Circuit court rules dairy checkoff unconstitutional

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The U.S. Third Court of Appeals has ruled the national dairy checkoff unconstitutional. The unanimous decision by the three-judge panel came just six weeks after the appeal was heard.

Pennsylvania dairy producers Brenda and Joseph Cochran argued that the mandatory checkoff represents coerced speech and is, therefore, a violation of their First Amendment rights. The Cochrans practice sustainable agriculture and say the mandatory checkoff program does nothing to promote their products.

The lawyers which defended the program for USDA argued that the congressionally mandated program was created to provide orderly and stable dairy markets and, therefore, the program represents government free speech that is constitutionally protected.

The appeals court based its decision to overturn the lower court ruling on the 2001 U.S. Supreme Court ruling in the mushroom industry. In that case, the Supreme Court ruled the national mushroom program’s mandatory checkoff forced mushroom processors to fund generic mushroom promotion that competed with the processor’s own brands and was, therefore, coerced speech.

The Supreme Court has made two rulings on generic commodity programs. In 1997, by a vote of 5-4 it ruled the checkoff program for tree fruit — plums, nectarines and peaches — was constitutional. Then, in 2001, it ruled the mushroom industry checkoff was not.

According to David Pelzer, vice president of Industry Relations for Dairy Management Inc, dairy checkoff collections will continue during the appeals process.

"This is just one step in the appeals process. The Department of Justice has other avenues to pursue, and we are very confident that ultimately the courts will find the dairy checkoff to be good for dairy producers and the American public," says Pelzer.

The dairy checkoff benefits all producers who produce milk — "It doesn’t matter what type of milk you produce or where you sell it," explains Pelzer. "The generic milk advertising funded through the checkoff helps build demand for all milk sold, therefore all producers should contribute."

The dairy checkoff is the latest commodity checkoff program to come under fire. Last July, a federal appeals court ruled that ranchers could not be forced to pay the mandatory $1 per head checkoff fee on cattle, and in October the pork checkoff met the same fate. The Department of Justice has already petitioned the Supreme Court to hear the beef checkoff case.

While the case is working its way through the appeals process, says Pelzer, "we will continue to do our job to build demand for dairy."

USDA, Associated Press, Oakland Tribune, DMI



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