Ranchers-Cattlemen Action Legal Fund v. Vilsack
| Decision Date | 09 February 2021 |
| Docket Number | CV-16-41-GF-BMM-JTJ |
| Parties | RANCHERS-CATTLEMEN ACTION LEGAL FUND, UNITED STOCKGROWERS OF AMERICA, a Montana Corporation, Plaintiffs, v. TOM VILSACK, in his official capacity as Secretary of Agriculture, and the UNITED STATES DEPARTMENT OF AGRICULTURE, Defendants. |
| Court | U.S. District Court — District of Montana |
Plaintiff Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America ("R-CALF") moves the Court under the Equal Access to Justice Act ("EAJA"), for attorney fees and litigation costs incurred in procuring a preliminary injunction against the Government-Defendants, United States Department of Agriculture and Secretary of Agriculture Sonny Perdue (collectively "USDA"). (Doc. 152 at 2 (citing 28 U.S.C. §§ 2412(a)(1), (d)(1)(A)).
The Food Security Act of 1985, 7 U.S.C. § 2901 et seq. ("Beef Act"), and the Beef Promotion and Research Order, 7 C.F.R. Part 1260, require cattle producers to pay a "checkoff" assessment on each head of cattle sold in, or imported into, the United States. The checkoff assessments are used for promotion and research to strengthen the domestic beef industry. 7 U.S.C. § 2901(b). The Cattlemen's Beef Promotion and Research Board ("Beef Board") administers programming funded by the checkoff assessments. 7 U.S.C. §§ 2904(1)-(5); 7 C.F.R. §§ 1260.141, 1260.161.
The Beef Board certifies qualified state beef councils ("QSBC"s), which may be private entities organized and operated within a state or may be entities authorized by state statute. QSBCs may collect the checkoff assessments on the Beef Board's behalf. 7 U.S.C. § 2904(8); 7 C.F.R. § 1260.172(a).
The Beef Act implements a "credit policy" that permits producers to allot half of their federal checkoff assessment to their respective QSBC to support state promotional programming. 7 U.S.C. § 2904(8)(C); 7 C.F.R. § 1260.172(a)(3). In practice, QSBCs implement this credit policy by collecting the full federal checkoff assessment, retaining $0.50 of every checkoff dollar collected, and forwarding the remainder to the Beef Board. Some states require producers to contribute half of their assessment to the QSBC. Producers who reside in stateswithout a participation requirement may elect into the credit policy and send their checkoff assessment to their QSBC to be divvied accordingly. Those producers who decline to participate in the credit policy direct their full checkoff assessment amount to the national Beef Board. See 7 C.F.R. §§ 1260.172(a)(6), (7), 1260.181(b)(8).
USDA holds limited statutory and regulatory authority over QSBCs' use of checkoff funds. USDA permits QSBCs to engage in promotional activities that "strengthen the beef industry's position in the marketplace." 7 C.F.R. § 1260.181(b)(1); see also 7 C.F.R. § 1260.169 (). QSBCs must certify, however, that they will not use any of the money received from checkoff assessments to promote "unfair or deceptive" practices, or to "influenc[e] governmental policy." 7 C.F.R. § 1260.181(b)(7).
R-CALF represents domestic cattle producers in Montana. (Doc. 47 at 7). R-CALF disapproved of Montana's privately held QSBC ("Montana Beef Council") and its advertising campaigns because those campaigns failed to distinguish between domestic beef and foreign beef. R-CALF wanted Montana Beef Council to promote only domestic beef. Id. On May 2, 2016, R-CALF brought an as-applied First Amendment challenge to USDA's checkoff assessment credit policy. (Doc. 1).
R-CALF claimed that its members were required to subsidize private speech with which they disagreed, in plain violation of the First Amendment. Id. R-CALF alleged that checkoff assessment proceeds, taken by private QSBCs and used to pay for private speech, was an unconstitutional government-compelled subsidy of speech. Id. R-CALF argued that the checkoff assessment program, and QSBC credit policy, constituted a tax on producers that proves "unconstitutional under any level of scrutiny" to the extent it funds private speech. R-CALF v. Perdue, 2017 WL 2671072, at *7 (D. Mont. June 21, 2017). R-CALF contended that Montana Beef Council's speech was not "government speech," which would fall outside of First Amendment protections, because it "lack[ed] the central hallmark of government speech: it [was] in no way controlled or approved by the government." (Doc. 1 at 5).
USDA filed a Motion to Dismiss, a Motion to Dismiss for Failure to State a Claim, and a Motion to Stay on August 4, 2016. (Doc. 19). R-CALF filed a Motion for Summary Judgment or in the Alternative for a Preliminary Injunction on August 24, 2016. (Doc. 21). The Court subsequently denied USDA's motions. (Doc. 44 at 1-2; Doc. 47 at 8-19). The Court held that questions of fact concerning whether USDA effectively controlled the Montana Beef Council precluded granting summary judgment in favor of R-CALF at that time. (Doc. 44 at 1-2; Doc. 47). The Court did determine, however, that R-CALF had demonstrated theneed for a preliminary injunction, by showing that it would likely succeed on the merits. (Doc. 47 at 19-22); see also Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011).
In the years following the Court's 2017 issuance of the preliminary injunction (Doc. 47), USDA entered into Memoranda of Understanding ("MOU"s) with over a dozen QSBCs. (Doc. 99 at 7). The only MOU entered into before the Court issued a preliminary injunction (Doc. 47) came after the Magistrate entered Findings and Recommendations, which supplied the basis for the Court's determination. (Doc. 44). The MOUs include a number of measures to strengthen USDA's oversight over QSBCs' use of checkoff proceeds, including QSBCs' agreement to submit to USDA "for pre-approval any and all promotion, advertising, research, and consumer information plans and projects." (Doc. 135 at 3). As a result of the MOUs, USDA has broad new authority over any potential speech that the QSBCs might produce. (Doc. 147 at 2). The parties filed competing motions for summary judgment in 2019. (Docs. 89, 94, 98).
The Court reviewed those motions and issued an Order granting summary judgment in favor of USDA. (Doc. 147). The Court found that the MOUs provided USDA with sufficient control of QSBCs' speech to qualify as government speech. Id. The Court's grant of summary judgment in favor of USDA vacated its prior preliminary injunction. (Doc. 160 at 6). That 2017 preliminaryinjunction was the only judicially mandated relief that R-CALF obtained during the course of this lawsuit. Id.
R-CALF now moves for $145,428.08 in attorney fees and $5,344.17 in costs associated with procuring the 2017 preliminary injunction. (Doc. 152). USDA counters that R-CALF was not a "prevailing party" and is therefore not entitled to attorney fees and litigation costs under the EAJA. (Doc. 160 at 12).
The EAJA authorizes federal courts to award attorney fees, costs, and other expenses when a party prevails against the United States. Hardisty v. Astrue, 592 F.3d 1072, 1076 (9th Cir. 2010). This fee-shifting is not mandatory, however. Id. Eligibility for fees and costs under the EAJA requires, among other conditions: "(1) that the claimant be a prevailing party; [and] (2) that the Government's position was not substantially justified." Comm'r INS v. Jean, 496 U.S. 154, 158 (1990). The applicant for fees bears the burden of establishing that it was the "prevailing party." Carvajal v. United States, 521 F.3d 1242, 1249 (9th Cir. 2008). If the applicant meets its initial burden, the burden shifts to the government to show that its position was "substantially justified." Hardisty, 592 F.3d at 1076 n. 2. The Court has an independent duty to review the fee applicant's itemized log of hours to determine the reasonableness of the hours requested in each case. Hensley v. Eckerhart, 461 U.S. 424, 433, 436-37 (1983).
The Court must first determine whether R-CALF has shown that it was the prevailing party. R-CALF argues that it prevailed because the Court's entry of the preliminary injunction prompted USDA's entrance into MOUs with certain QSBCs. (Doc. 153 at 13-15). A fees applicant qualifies as a "prevailing party" "when actual relief on the merits of his [or her] claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Higher Taste, Inc. v. City of Tacoma, 717 F.3d 712, 715 (9th Cir. 2013) (quoting Farrar v. Hobby, 506 U.S. 103, 111-12 (1992)). "Relief on the merits" occurs when the material alteration in the parties' legal relationship was prompted by "judicial imprimatur." Id. (citing Buckhannon Bd. & Care Home, Inc. v. W. Va. Dept. of Health & Human Res., 532 U.S. 598, 605 (2001)). Judicial imprimatur can be found in the form of an enforceable judgment on the merits, a court-ordered consent decree, or a preliminary injunction involving "a judicial determination that the claims on which the plaintiff obtains relief are potentially meritorious." Id.
The Ninth Circuit asks two questions in a prevailing party analysis where the plaintiff received a preliminary injunction: (1) whether the court's preliminary injunction ruling was sufficiently "on the merits" to satisfy the "judicial imprimatur" requirement; and, if yes, (2) whether the plaintiff "obtained reliefsufficiently enduring to satisfy the 'material alteration of the parties' legal relationship' requirement." Id. at 716.
Here, the Court granted R-CALF's preliminary injunction on the basis that it "likely will succeed on its First Amendment claim due to the compelled private speech." (Doc. 47 at 19). The preliminary injunction that R-CALF received therefore satisfies the judicial imprimatur requirement. The Court must next determine whether R-CALF's...
To continue reading
Request your trial