Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America a Montana Corporation v. Vilsack et al

Filing 47

MEMORANDUM AND ORDER: Findings and Recommendations 44 are adopted them in full. Defendants Motion to Dismiss for Lack of Standing 19 is DENIED. Defendants' Motion to Dismiss for Failure to State a Claim 19 is DENIED. Defendants' Motio n to Stay 19 is DENIED. Plaintiff's Motion for Summary Judgment 21 is DENIED. Plaintiff's Motion for Preliminary Injunction 21 is GRANTED. Defendants are enjoined from continuing to allow the Montana Beef Council to use the assessment s that it collects under the Beef Checkoff Program to fund its advertising campaigns, unless the payer provides prior affirmative consent authorizing the Montana Beef Council to retain a portion of the payer's assessment. Plaintiff's Motion for Temporary Restraining Order 27 is DENIED as moot. Signed by Judge Brian Morris on 6/21/2017. (MMS)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION

RANCHERS-CATTLEMEN ACTION
LEGAL FUND, UNITED
STOCKGROWERS OF AMERICA,
Plaintiff,

FILED
JtJN 2 I 2017
CIe!j<. U So Coorls
Distdo! Of Monl8n8

Glee! Falls Dlvislon

CV 16-41-GF-BMM
MEMORANDUM

AND ORDER

vs.
SONNY PERDUE, in his official
capacity as Secretary of Agriculture;
and UNITED STATES
DEPARTMENT OF AGRICULTURE,
Defendants.

INTRODUCTION

Plaintiff Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of
America is political advocacy and trade organization representing independent,
domestic cattle producers across the United States, including Montana. Plaintiff
filed this action for declaratory and injunctive relief on May 2, 2016. Plaintiff
seeks a determination that the current administration of the federal Beef Checkoff
Program in Montana violates the First Amendment to the United States
Constitution. The Beef Checkoff Program allows the Montana Beef Council to
use a portion of a federal beef checkoff to fund promotional campaigns by the
Montana Beef Council.

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Defendant United States Department of Agriculture (USDA) administers the
federal Beef Checkoff Program. Defendant Sonny Perdue (perdue) serves as the
Secretary of Agriculture. Perdue oversees the federal Beef Checkoff Program.
Presently before the Court are the following motions: Defendants' Motion
to Dismiss for Lack of Standing; Defendants' Motion to Dismiss for Failure to
State a Claim; Defendants' Motion to Stay; Plaintiff's Motion for Summary
Judgment; Plaintiff's Motion for Preliminary Injunction; and Plaintiff's Motion for
a Temporary Restraining Order.
United States Magistrate Judge John Johnston issued Findings and
Recommendations in this matter on December 12,2016. (Doc. 44). Judge
Johnston recommended that Defendants' Motions to Dismiss be denied, that
Defendants' Motion to Stay be denied, that Plaintiff's Motion for Summary
Judgment be denied, that Plaintiff's Motion for Preliminary Injunction be granted,
and that Plaintiff's Motion for a Temporary Restraining Order be denied as moot.
(Doc. 44 at 12).
Defendants filed objections to Judge Johnston's Findings and
Recommendations on December 23,2016. (Doc. 45). Defendants argue that
Judge Johnston erred when he denied their motions to dismiss, and when he

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granted Plaintiff's motion for a preliminary injunction. Plaintiff filed a response
to the Defendants' objections on January 5, 2017. (Doc, 46).
STANDARD OF REVIEW

The Court reviews de novo findings and recommendations to which the
parties make objections. 28 U.S.c. § 636(b)(l). No review is required of
proposed findings and recommendations to which no objection has been made.
Thomas v. Am, 474 U.S. 140,149-152 (1986).
BACKGROUND

The Beef Promotion and Research Act of 1985 (Beef Act), 7 U.S.C. § 2901
et seq., imposes a $1 assessment on cattle producers on each head of cattle sold in
the United States, and on each head of cattle imported into the United States.
7 U.S.C. §§ 2901(b), 2904(8)(C); 7 C.F.R. § 1260. 172(a)(l ). The assessment, also
known as a checkoff, funds beef related promotional campaigns designed to
"strengthen the beef industry's position in the marketplace and to maintain and
expand domestic and foreign markets ... for beef and beefproducts. 7 U .S.C.

§ 2901(b).
The "Cattlemen's Beef Promotion and Research Board" (Beef Board)
administers the federal checkoff program. See 7 U.S.C. § 2904(1)-(2). The
Secretary ofthe Agriculture appoints the Beef Board. Jd. The "Beef Promotion
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Operating Committee" (Beef Committee) develops national promotional
campaigns for the Beef Board. 7 U.S.C. § 2904(4)(B). The Beef Board's
promotional campaigns must comply with the Beef Act.
The Beef Act prohibits the Beef Board from developing promotional
campaigns that distinguish between domestic and foreign beef products. See
7 U.S.C. §§ 2901, 2904(4)(B)(ii); 7 C.F.R. § 1260.169(d). The Secretary ofthe
Agriculture must approve the Beef Board's promotional campaigns. 7 C.F.R.
§ 1260.169; Johanns v. Livestock Mktg. Ass 'n, 544 U.S. 550, 561 (2005).
The Beef Act allows "qualified state beef councils" to collect the checkoff
assessments on behalf of the Beef Board. 7 C.F.R. § 1260.l81(b)(2)-(4).
Qualified state beef councils are private entities organized and operated within a
state. 7 C.F.R. § 1260.181(a). The Montana Beef Council operates as Montana's
qualified state beef council. The Montana Beef Council is a private corporation
organized under the laws of Montana. (Doc. 23 at 1[47).
The Montana Beef Council collects beef checkoff assessments in Montana.
When the Montana Beef Council collects the $1 per-head checkoff from a cattle
producer it sends 50 cents from each dollar to the Beef Board. The Montana Beef
Council retains the remaining 50 cents to fund its own promotional activities. (See
Doc. 1-2 at 6; 7 U.S.C. § 2904(8)(C); 7 C.F.R. § 1260.172(a)(3).
·4·

The USDA possesses some authority over the Montana Beef Council. The
USDA requires that the Montana Beef Council engage in promotional activities
that promote beef and beef products. The USDA also requires that the Montana
Beef Council certifY that it will not use any ofthe money that it receives under the
Beef Checkoff Program to promote "unfair or deceptive" practices, or to
"influenc[e] goverronental policy." See 7 C.F.R. § 1260.181(b)(7) (cross­
referencing 7 C.F.R. § 1260.169(e); see also, Beef Promotion and Research
Order, 51 Fed. Reg. 26132, 26137 (July 18, 1986).
The USDA does not control how the Montana Beef Council spends the
money that it obtains from the federal Beef Checkoff Program. (See Doc. 1-2 at
7). The Montana Beef Council determines for itself how the checkoff money that
it receives should be invested. (See Doc. 1-2 at 13). The Montana Beef Council
uses the checkoff monies that it receives to fund advertising campaigns that
promote the consumption of beef The USDA requires only that the Montana Beef
Council submit annual reports of its expenditures. See 7 C.F.R. § 1260.1 8 1(b)(6).
The Montana Beef Council's board possesses broad discretion to determine
the content of its promotional activities. The advertisements ofthe Montana Beef
Council do not distinguish between domestic beef and foreign beef. The USDA

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does not supervise the Montana Beef Council's promotional campaigns. (Doc. 40­
1 at ~~ 14-15).

The Beef Board possesses limited authority with respect to the Montana
Beef Council 's promotional campaigns. !d. The Beef Board reviews the Montana
Beef Council's "annual marketing plan" that "outlines" the Montana Beef
Council's "planned activities" for the coming year. The Beef Board also conducts
post-hoc audits of the Montana Beef Council's activities. (Doc. 40-] at ~ ] 9).
Until recently, no mechanism existed for a cattle producer to direct the
Montana Beef Council to send the entire checkoff assessment to the Beef Board.
Cattle producers who disagree with the Montana Beef Council's promotional
activities now may direct that the full amount of their checkoff assessment be
forwarded to the Beef Board by submitting a redirection request to the Montana
Beef Council. See Beef Promotion and Research; Amendments to Allow
Redirection of State Assessments to the National Program, 81 Fed. Reg. 45,984,
45986 (proposed July 15,2016).
The Montana Beef Council has 60 days to review the redirection request to
determine whether the cattle producer has submitted the necessary paperwork to
opt-out. !d. The Montana Beef Council holds the cattle producer's checkoff
assessment during this review period. The Montana Beef Council must forward
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the full amount ofthe cattle producer's checkoff assessment to the Beef Board if
the cattle producer provides the necessary paperwork. [d.
Plaintiff represents domestic cattle producers in Montana. Plaintiff
disapproves of the Montana Beef Council's advertising campaigns. Plaintiff
disapproves of the advertisements' failure to distinguish between domestic beef
and foreign beef. Plaintiff would like the Montana Beef Council to promote only
domestic beef.
Plaintiff seeks declaratory and injunctive relief. Plaintiff seeks an order
declaring that the current administration of the federal Beef Checkoff Program in
Montana violates the First Amendment to the United States Constitution. (Doc. I
at 34-35). Plaintiff argues that federal Beef Checkoff Program violates the First
Amendment because it forces its members to associate with the Montana Beef
Council, and to subsidize the Montana Beef Council's private speech
(advertising), with which it disagrees. [d.
Plaintiff seeks an order enjoining "the Secretary of Agriculture ... from
continuing to allow the Montana Beef Council to [collect checkoff] assessments
... under the federal Beef Checkoff" Program. (Doc. I at 36). Plaintiff's
members wish to pay their checkoff assessments directly to the Beef Board.

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DISCUSSION
A.

Defendants' Motion to Dismiss for Lack of Standinl

Defendants argue that this case should be dismissed under Fed. R. Civ. P.
12(b)(1), because Plaintifflacks standing.
Article III of the Constitution limits the judicial power of federal courts to
the resolution of cases and controversies. Valley Forge Christian College v.
Americans United for Separation ofChurch and State, Inc., 454 U.S. 464,471

(1982). A case or controversy may exist under Article III only if the Plaintiff
possesses standing. Gettman v. DEA, 290 F.3d 430, 433 (D.C. Cir. 2002).
Article III standing requires three elements: (1) injury-in-fact; (2) causation; and
(3) redressability. Steel Co. v. Citizens for a Better Env., 523 U.S. 83, 102-03
(1998). Defendants limit their challenge to the causation and redressability
components.

a.

Causation

The causation element of standing requires that a causal connection exist
between the defendants's conduct and the injury alleged by the Plaintiff. Lujan v.
Defenders ofWildlife, 504 U.S. 555, 560 (1992). Defendants argue that the

Plaintiff cannot satisfY the causation requirement because Plaintiff cannot show

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that Defendants caused the hann alleged by Plaintiff- the forced payment of a
checkoff assessment to a privately owned beef council. Defendants argue that
they have taken no action to compel any member of Plaintiff's group to contribute
any portion of the checkoff assessment to the Montana Beef Council.
Defendants point out that Plaintiff's members may avoid making any
contribution to the Montana Beef Council merely by submitting a redirection
request to the Montana Beef Council to forward the full amount of the checkoff
payment to the Beef Board. Defendants argue that any contribution by Plaintiff's
members to the Montana Beef Council occurs only due to the members' failure to
avail themselves of the option to redirect the entire assessment to the Beef Board.
Defendants contend that such self-inflicted injury cannot satisfy the Article III
causation requirement.
The First Amendment prohibits the Government from compelling its
citizens to subsidize private speech to which they object. United States v. United

Foods, Inc., 533 U.S. 405,410 (2001); see also, Johanns v. Livestock Mktg. Ass 'n,
544 U.S. 550,557 (2005). The constitutional rights at stake involve the freedom
of speech and the freedom of association. See Knox v. Servo Employees Int 'I

Union, LocallOOO, 132 S.Ct. 2277, 2288 (2012). The Government violates the
First Amendment when it compels a citizen to subsidize the private speech of a
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private entity without first obtaining the citizen's "affirmative consent." See Knox,
132 S.Ct. at 2296.
The First Amendment violation may occur even for a temporary compeUed­
subsidy. !d. at 2290; In re Wash. State Apple Advert. Comm 'n, 257 F. Supp. 2d
1274, 1288 (E.D. Wash. 2003). The Government first must secure the citizen's
"affirmative consent" through an opt-in provision when it wishes to have a citizen
fund private speech through a compelled subsidy. Knox, 132 S.Ct. at 2295-96.
An op-out provision fails to alleviate the First Amendment violation that arises,
however, when the Government compels a citizen to subsidize the private speech
of a private entity. Id. at 2293.
Cattle producers in Montana must pay the checkoff assessments to the
Montana Beef Council. One-half of the monies received by the Montana Beef
Council fund the Montana Beef Council's advertising program unless the cattle
producer opts-out by submitting a proper redirection request. The parties disagree
on whether the Montana Beef Council's advertising program constitutes private
speech or public speech.
Plainti ff would possess a viable First Amendment claim if the Montana Beef
Council's advertising involves private speech. The Montana Beef Council would
have received the compelled assessment without first having obtained the cattle
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producer's affinnative consent through an opt-in provision. Plaintiff satisfies the
causation component of standing in that context.

b.

Redressability

The redressabiIity element of standing requires a showing that the injury
alleged by the Plaintifflikely will be "redressed by a favorable decision." Lujan,
504 U.S. at 561. Defendants argue that a favorable decision from this Court
would be an order authorizing Plaintiffs members to pay the total amount of their
checkoff assessments directly to the Beef Board. Defendants claim that such a
ruling would fail to redress Plaintiffs alleged injury. The Beef Act prohibits the
Beef Board from running the promotional advertisements that Plaintiff desires­
"advertisements that distinguish between domestic and foreign beef products."
(Doc. 45 at 17).
An injunction authorizing Plaintiff's members to pay the total amount of
their checkoff assessments directly to the Beef Board would redress the

i~ury

that

Plaintiff alleges. Plaintiff's members would not be compelled to tum money over
to, and thereby associate with, a private entity that engages in speech that
Plaintiffs members oppose. What distinguishes unconstitutional subsidies for
private speech from constitutional subsidies of government speech is not the
content of the speech, but rather that the latter is "democratic[ally] accountab[le]."
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Johanns, 544 U.S. at 563. Plaintiffs members may not always agree with the
advertising of the BeefBoard. They can attempt to exert influence, however, over
the Beef Board's advertising through the democratic process. Plaintiffs members
do not possess the same ability to influence the advertising ofthe Montana Beef
Council. Plaintiff satisfies the requirements for standing.

B.

Defendants' Motion to Dismiss for Failure to State a Claim

Defendants have moved to dismiss this case under Fed. R. Civ. P. 12(b)(6),
on grounds that Plaintiffs Complaint fails to state a claim upon which relief may
be granted. Defendants argue that Plaintiff's Complaint fails to allege a First
Amendment violation for the following reasons. Defendants contend first that the
First Amendment does not apply to the Montana Beef Council's checkoff-funded
advertisements that involve Government speech. Defendants next argue that no
First Amendment violation has occurred even ifthe Montana Beef Council's
advertisements constitute private speech.
Defendants suggest that the Beef Checkoff Program's redirection provision,

by which cattle producers who object to contributing to the Montana Beef Council
may redirect their full assessment to the Beef Board, removes any compelled­
subsidy concern. And Defendants further contend that the operation of the Beef

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Checkoff Program in Montana satisfies intermediate scrutiny, the standard
applicable to commercial speech. (Doc. 45 at 18).

a.

Do the Montana Beef Council's Advertisements Constitute
Government Speech?

Defendants argue that Plaintiff has failed to state a First Amendment
violation because the Montana Beef Council's checkoff-funded advertisements
constitute government speech. The First Amendment does not prohibit the
Government from compelling its citizens to subsidize government speech.

Johanns, 544 U.S. at 562. Unlike private speech, government speech remains
"subject to democratic accountability." Id. at 563. People and groups who
disfavor government speech may use the political process to compel the
government to change its speech. Id.
Whether speech of a private entity constitutes government speech turns on
whether government officials exercise "effective control" over the speech.

Paramount Land Co. LP v. California Pistachio Commission, 491 F.3d 1003,
1011 (9th Cir. 2007) (citing Johanns, 544 U.S. at 560). This rule consistently has
been understood to mean that the government must at least hold statutory control
over the entity that makes the challenged speech, and, also, in most cases, the
speech itself. For example, the Supreme Court in Johanns determined that

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advertising by the BeefBoard qualified as government speech because the USDA
retained effective control over the Beef Board and its advertising. The Supreme
Court reasoned that "a politically accountable official" supervised the Beef
Board's promotional program, appointed and dismissed key Beef Board personnel,
and retained absolute veto power over the content of the Beef Board's
advertisements, "right down to the wording." Johanns, 544 U.S. at 563.
Similarly, the Ninth Circuit in Paramount Land Co. LP determined that
promotions of the California Pistachio Commission qualified as government
speech because the California Secretary of Agriculture exercised effective control
over the Commission. Paramount Land Co. LP, 491 F.3d at 1010-11. The Court
noted that the Secretary of Agriculture possessed the authority to appoint one
member of the Commission, and "suspend or discharge the Commission's
president." /d. The statutory scheme also required the Secretary of Agriculture to
"concur in any [Commission] nomination and election procedure[]," and annually
review and approve all of the activities of the Commission. Id.
Finally, the Ninth Circuit in Delano Farms Co. v. California Table Grape
Commission, 586 F.3d 1219 (9th Cir. 2009), determined that promotions ofthe
California Table Grape Commission qualified as government speech because the
California Secretary of Agriculture exercised effective control over the
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Commission. Id. at 1228-29. The Secretary of Agriculture "possesse[d] the
power of nomination over all ofthe table grape commissioners," and "the power to
remove a table grape commissioner." Id.
The statutes and regulations relating to the Beef Checkoff Program provide
the USDA with less control over the Montana Beef Council. See 7 C.F.R.

§ 1260.181(b). The USDA lacks the authority to appoint or remove any of the
Montana Beef Council's members. The USDA does not control how the Montana
Beef Council spends the checkoff assessments. The applicable statutes and
regulations merely prohibit the Montana Beef Council from using checkoff money
to promote "unfair or deceptive" practices, or to "influenc[e] governmental
policy." See 7 C.F.R. § 1260.181(b)(7). In fact, these statutes and regulations
require only that the Montana Beef Council's advertising advance the image and
desirability ofbeef and beefproducts. 7 U.S.C. § 2901(b); 7 C.F.R.

§ 1260.169(a).
Defendants' claim that it effectively can control the Montana Beef Council
through the Beef Board proves incorrect. The Beef Board is not a
"democratic[ally] accountab[le]" body that is mandated to respond to and
implement citizens's concerns. See Johanns, 544 U.S. at 563. The statutes and
regulations structure the Beef Board to operate as an independent body. The Beef
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Board only can operate constitutionally because the Executive Branch appoints its
members and oversees it operations. See 7 U.S.c. § 2904.
Moreover, the Beef Board does not exercise the level of control over the
Montana Beef Council that proved compelling in Johanns, Paramount Land, and

Delano Farms. The BeefBoard cannot appoint or remove any members of the
Montana Beef Council. Cf Delano Farms Co., 586 F.3d at 1228-29. The Beef
Board lacks the ability to direct the Montana Beef Council's advertising program.

Cf Paramount Land Co. LP, 491 F.3d at 1010-11. The Beef Board's only
participation in developing the Montana Beef Council's promotional campaigns is
that it reviews the Council's an annual outline of its planned activities, and
conducts post-hoc audits of the Council's activities. (Doc. 40-1 at ~ 19).
The Court cannot state, as a matter of law, that USDA's limited control over
the Montana Beef Council, constitutes "effective control" over the Montana Beef
Council's advertising program. The Court cannot conclude, therefore, as a matter
oflaw, that the Montana Beef Council's advertisements qualifY as government
speech. Defendants' motion to dismiss must be denied.

b.

Redirection Procedure

Defendants argue that the cattle producers' ability to request that the
Montana Beef Council send their entire checkoff assessment to the Beef Board,
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through a redirection request, obviates any First Amendment violation. The First
Amendment prohibits the government from compelling individuals to subsidize
private speech with which they disagree. Johanns, 544 U.S. at 557. The Supreme
Court has rejected the argument that mere presence of an opt-out provision
alleviates First Amendment concerns. Knox, 132 S.Ct. at 2993. The presence of a
"redirection" provision does not prove fatal to Plaintiffs claim. Defendant's
motion to dismiss must be denied.

c.

Intermediate Scrutiny

Defendants argue, in the alternative, that the compelled assessments
authorized by the Beef Act and used by the Montana Beef Council to fund its
advertising prove constitutional because they satisfy the intermediate scrutiny
standard applicable to commercial speech. (Doc. 45 at 28). The Supreme Court
set forth a three-pronged test for intermediate scrutiny in Central Hudson Gas &

Elec. Corp. v. Public Servo Comm 'n, 447 U.S. 557, 564 (1980). Defendants argue
that the compelled assessments authorized by the Beef Act satisfy the Hudson test
for intermediate scrutiny.
Defendants point to the following three factors: 1) the Beef Checkoff
Program "promotes substantial government interests" such as: "enhancing the
welfare of beef producers, stabilizing the general economy ofthe Nation, and
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ensuring that the people of the United States receive adequate nourishment;"
2) the "Beef Act directly advances the government's interests by embedding ...
established State organizations [qualified state beef councils] into its regulatory
scheme; and 3) "any interference with [the Plaintiffs] First Amendment rights ...
is not more extensive than necessary to serve the government's interests." (Doc.
39 at 28-29).
The Supreme Court made clear in Knox that "compulsory subsidies for
private speech remain subject to exacting First Amendment scrutiny" rather than
the intermediate scrutiny applied to commercial speech. Knox, 132 S. Ct. at 2289.
Compelled subsidies "cannot be sustained unless two criteria are met." Id. First,
"there must be a comprehensive regulatory scheme involving a 'mandated
association' among those who are required to pay the subsidy." Id. Second, "even
in the rare case where a mandatory association can be justified, compulsory fees
can be levied only insofar as they are a 'necessary incident' of [a1 'larger
regulatory purpose which justified the required association." Id. (quoting United

Foods, 533 U.S. at 414).
The government cannot compel citizens to subsidize a private advertising
program for the sole purpose of increasing demand for a product. United Foods,
533 U.S. at 415. The Montana Beef Council uses the compelled assessments
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solely for advertising to increase the demand for generic beef. Compelled
subsidies used solely to fund private speech remain unconstitutional under any
level of scrutiny, even under the lesser scrutiny accorded to commercial speech.

United Foods, 533 U.S. at 410. Defendants' motion to dismiss must be denied.

C.

Plaintiffs Motion for Preliminary Injunction

Plaintiff has moved for a preliminary injunction to enjoin the Defendants

from continuing to allow the Montana Beef Council to use the assessments that it
collects under the Beef Checkoff Program to fund its advertising campaigns,
absent prior affirmative consent from the payer. Defendants oppose the motion.
A party seeking preliminary injunctive relief must show the following:
L

It "is likely to succeed on the merits;"

2.

It is "likely suffer irreparable harm in the absence
of a preliminary relief;"

3.

The "balance of equities tips in favor" of a
preliminary injunction; and

4.

An "injunction is in the public interest."

Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011).
Each ofthe preliminary injunction factors weigh in Plaintiff's favor.
Plaintiff likely will succeed on its First Amendment claim due to the
compelled private speech. United Foods, 533"U.s. at 415. Ifthe Court were to
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determine that the Montana Beef Council's advertising qualifies as private speech,
a First Amendment violation occurs each time that the Montana Beef Council
accepts a checkoff assessment without the payer's affirmative consent. Id. at 413.
The Supreme Court in United Foods analyzed a First Amendment challenge to a
govermnent program that required mushroom growers to contribute to an
advertising program. Id. at 410-411. The Supreme Court recognized that
producers might be required to subsidize speech with which they disagree. Id.
The Supreme Court noted that it had not upheld compelled subsidies for speech in
the context of a program "where the principal object is speech itself." !d. at 415.
The program at issue here likewise requires contributions for speech itself­
compelling speech with which Plaintiffs members disagree.
The Government's statutorily authorized control over the Montana Beef
Council appears inadequate to transform the Montana Beef Council's advertising
into govermnent speech. Cj Johanns, 544 U.S. at 563. The Supreme Court in
Johanns acknowledged that the Secretary of Agriculture "does not write ad copy

himself." Johanns, 544 U.S. at 560. The Supreme Court noted instead the degree
to which the speech at issue remained "subject to democratic accountability." Id.
at 563. This point, the degree to which participants could alter the message
through the democratic process, led the Supreme Court to classifY the beef check­
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off program at issue in Johanns as government speech. This determination led the
Supreme Court to reject a compelled speech challenge. Id. at 566-567. The
Montana Beef Council avoids the same type of "democratic accountability" that
would transform the messages at issue to government speech.
Second, Plaintifflikely will suffer irreparable harm. "The loss of First
Amendment freedoms, for even minimal periods oftime, unquestionably
constitutes irreparable injury." Klein v. City ofSan Clemente, 584 F.3d 1196,
1208 (9th Cir. 2009). The Court in In re Wash. State Apple Advert. Comm 'n, 257
F. Supp. 2d at 1288, recognized that the use of compelled assessments, "even
temporarily," violates the First Amendment. Likewise, the Supreme Court in Ellis
v. Brotherhood ofRy. Clerks, 466 U.S. 435, 444 (1984), addressed a challenge to
compelled speech in the form of union dues. The union collected the dues and
months later refunded a portion to those members who objected to the union's
non-collective bargaining activities. This temporary collection of dues, followed
by a refund, still violated the First Amendment. Ellis, 466 U.S. at 444. The opt­
out provision at issue here, with its eventual redirection of the checkoff fee,
likewise fails to remedy the First Amendment violation.
Third, the balance of equities and the public interest tip in favor of a
preliminary injunction. Freedom of speech represents a fundamental right. There
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exists a "significant public interest in upholding free speech principles." Klein,
584 F.3d at 1208. A preliminary injunction would protect not only Plaintiffs
members, but also all other Montana cattle producers who may disagree with the
speech at issue. An injunction that protects persons other than the plaintiff tips the
equities in the plaintiff's favor. See Barrett v. Premo, 101 F. Supp. 3d 980,998
(D. Or. 2015). Plaintiff has met its burden to show that a preliminary injunction
would be appropriate.

CONCLUSION
I find no error in Judge Johnston's Findings and Recommendations and
adopt them in full.
Accordingly, IT IS HEREBY ORDERED:
1.

Defendants' Motion to Dismiss for Lack of Standing (Doc. 19-1) is

DENIED.
2.

Defendants' Motion to Dismiss for Fail ure to State a Claim (Doc. 19­

2) is DENIED.
3.

Defendants' Motion to Stay (Doc. 19-3) is DENIED.

4.

Plaintiff's Motion for Summary Judgment (Doc. 21-1) is DENIED.

5.

Plaintiff's Motion for Preliminary Injunction (Doc. 21-2) is

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GRANTED. Defendants are enjoined from continuing to allow the Montana Beef
Council to use the assessments that it collects under the Beef Checkoff Program to
fund its advertising campaigns, unless the payer provides prior affirmative consent
authorizing the Montana Beef Council to retain a portion of the payer's
assessment.
6.

Plaintiff's Motion for Temporary Restraining Order (Doc. 27) is

DENIED as moot.
DATED this 21st day of June, 2017.

Brian MorriS

United States District Court Judge

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