Farmer and Activist Groups Have Standing To Sue USDA Over Use of Pork Checkoff Funds.

The plaintiffs, a hog farmer and two activist groups with hog farmers as members claimed that the National Pork Board (NPB) misappropriated funds raised via the Pork Checkoff (assessed at the rate of $.40 per $100 value of pigs sold or when pigs or pork products are imported into the U.S.).   The NPB is a quasi-governmental entity  that administers the "Pork Order" which implements the Pork Act (7 U.S.C. Sec. 4801-19) which is designed to promote pork in the marketplace.  The NPB conducts, among other things, consumer information campaigns designed to stimulate pork product sales.  In 2006, the NPB bought four trademarks associated with the slogan "Pork:  The Other White Meat" from the National Pork Producers Council for $60 million, to be paid in annual installments of $3 million for 20 years.  The NPB can terminate the payments at any time with a year's notice with the ownership of the phrase then reverting to the NPPC.  In 2011, the NPB replaced the slogan with a new motto, "Pork:  Be Inspired."  The NPB retained the initial slogan as a "heritage brand" but does not feature it in its advertising.  The plaintiffs claimed that the NPB bought the slogan with the purpose of funding the NPPC to keep it in business and support the NPPC's lobbying efforts in violation of the Pork Act, that the NPB overpaid for the slogan and that the new slogan makes the initial one worthless.  The plaintiffs sued the USDA under the Administrative Procedure Act (APA) seeking to enjoin the NPB from making further payments to the NPPC and directing the USDA to "claw back" any payments possible from the deal.  The trial court dismissed the case for lack of standing.  The court determined that the hog farmer plaintiff could not show any injury in fact, and that the activist organizations could not sue in their own right or on behalf of their hog-producer members.  On appeal, the court reversed.  The court reasoned that the hog farmer had standing because he formulated a "concrete and particularized" injury via his return on investment being diminished by the annual $3 million payments and that he alleged facts that plausibly showed that the mark was worth less than $60 million, and that the NPB's purchase of the slogan was not negotiated at arm's length and that the NPPC and the NPB are intertwined with the NPPC lobbying for passage of the Pork Act and proposing the text that serves as the foundation for the Pork Order.  In addition, the NPPC was instrumental in developing the initial slogan.  A 1999 report USDA Inspector General Audit concluded that the NPB had put the NPPC in a position to exert undue influence over NPB budgets and grant proposals.  In addition, the hog farmer plaintiff also alleged facts that plausibly showed that the initial slogan is no longer worth $3 million annually.  The court did not rule on whether the other plaintiffs had standing.  The court also refused to uphold dismissal of the case for failure to exhaust administrative remedies because the plaintiffs merely wanted to make the USDA Secretary comply with the Pork Act and Order.  The court remanded the case.  Humane Society of the United States, et al. v. Vilsack, No. 13-5293, 2015 U.S. App. LEXIS 14271 (D.C. Cir. Aug. 14, 2015).