Advocates of the pork checkoff had more to celebrate than their 20th anniversary.
Just hours into the second day of World Pork Expo in early June, National Pork Board President Danita Rodibaugh stood before reporters with two major announcements.
The first was that the constitutionality challenge of the pork checkoff was being withdrawn. Second, the terms of an agreement to purchase the “Pork — the Other White Meat” trademark/slogan from the National Pork Producers Council had been approved by NPPC delegates.
Checkoff Saga Nears End
National Pork Board CEO Steve Murphy recounted the challenges the pork checkoff and other commodity research and promotion programs had undergone for several years, culminating in the U.S. Supreme Court decision to hear the case challenging the beef mandatory checkoff.
On May 23, 2005, the Supreme Court ruled, in a 6-3 vote, that the mandatory beef checkoff is government speech and therefore does not violate constitutional rights to free speech as protected by the First Amendment. Consequently, the Supreme Court sent the pork checkoff case back to the lower court to take action in accordance with the beef checkoff decision.
“The Supreme Court decided that these research and promotion programs, beef in particular, were government speech, and as such were not protected by the First Amendment,” Murphy explained. “Unfortunately, the pork case also had complaints that dealt with freedom of association, so the pork case was only partially resolved because the freedom of association issue remained open.”
Motion after motion was filed, petitioning the Federal District Court to reopen the record, he said. A dialogue with the plaintiffs, including the Campaign for Family Farms (CFF), was ongoing in recent months. On May 26, the plaintiffs filed a motion to dismiss the lawsuit challenging the mandatory pork checkoff program.
“We have been working with the Department of Justice and the USDA to review that motion and just a few moments ago, DOJ recommended that we accept (the motion, to withdraw the complaint) and the USDA supported that recommendation,” Murphy recounted. “We, too, support that recommendation. This complaint has essentially been on the books and in the courts longer than I have been here (with the Pork Board), and we're happy it will be resolved in the very near future.”
The CFF formally announced its intentions in a news release.
“While the plantiffs have filed a motion for dismissal, and while we will not challenge that motion, it still requires a federal court judge to act on that motion,” Murphy noted. “Once that occurs, essentially all the legal challenges against the U.S. pork checkoff will disappear.”
Trademark to Change Hands
On the other checkoff-related matter, Rodibaugh announced that terms of an agreement to purchase the “Pork — the Other White Meat” trademark/slogan had been accepted by NPPC delegates, allowing the organization's board of directors to complete the sale to the National Pork Board.
The National Pork Board will pay NPPC $3 million/year for the next 20 years. “Bringing that back to a net present value, the purchase price is somewhere around $34.5 million (adjusted for inflation),” Murphy explained.
“According to the purchase agreement, if ever the assessment rate of the U.S. pork checkoff falls below 40 cents (per $100 value), or if ever the U.S. (pork) checkoff assessment, because of structural change, becomes voluntary or has a refund provision, then the purchase will be suspended, the (previous) licensing agreement will be reinstated and both parties will come back to the table and renegotiate a new purchase price based on the economic realities,” he says.
“This is essentially the purchase of a strategic asset by the National Pork Board, and we have a lot of exciting plans for that brand in the future,” Murphy added. “It is our belief that if you invest in building a brand, you better own it. We're planning to put a lot of energy and a lot of investment in this brand over the next 20 years.”
“The final legal agreement still needs to be completed and approved by the USDA, but our hope is to ‘close’ on the purchase by July 1,” explained Rodibaugh. “Then all producers will own the ‘Pork — the Other White Meat’ brand.” The legalities of the transaction were being ironed out at press time.