In 2016, the Ranchers-Cattlemen Action Legal Fund (R-CALF) brought a lawsuit against the USDA for allowing mandatory assessments from the Beef Checkoff program to fund Qualified State Beef Councils’ (QSBCs) promotional activities. In response the USDA began to enter into memoranda of understandings (MOUs) with the QSBCs. These MOUs granted the USDA pre-approval authority over “any and all promotion, advertising, research, and consumer information plans and projects.” On July 27, 2021, the Ninth Circuit held that the USDA “effectively controlled” the advertising and, therefore, the Beef Checkoff program did not violate the First Amendment.
In this current lawsuit, R-CALF claims that the USDA violated the Administrative Procedure Act (APA) by entering into MOUs rather than engaging in formal notice-and-comment rulemaking. See 5 U.S.C. § 553. Because of this, R-CALF alleged that its members would suffer financial injury as the Beef Checkoff funds will go towards speech which threatens the livelihoods of independent, domestic ranchers. The USDA filed a motion to dismiss, claiming that R-CALF lacked standing because it did not identify a specific member who was injured by the MOUs.
Although R-CALF did not identify specific members who had standing to sue in their own right, the district court found that the organization did provide general allegations that its members, “independent, domestic producers,” would be harmed by QSBC advertising “promot[ing] corporate consolidation in the beef industry.” Additionally, R-CALF sufficiently alleged causation to survive the motion to dismiss. R-CALF claimed that if its members had the opportunity to participate in the rulemaking process, the MOUs may have contained more favorable provisions or even a complete prohibition of using checkoff funds for speech. Therefore, the court denied the motion to dismiss, but with the disclaimer that R-CALF must next prove actual members have suffered harm due to the MOUs.
R-CALF v. USDA, 2021 WL 442723 (D.D.C. Sept. 29, 2021).