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UNITED STATES v. FRAME

April 28, 1987

United States of America
v.
L. Robert Frame, Sr., and Vintage Sales Stables, Inc.



The opinion of the court was delivered by: CAHN

 CAHN, J.

 In this action the government seeks to recover monies allegedly due from defendants under the Beef Promotion and Research Act ("Act") of 1985, 7 U.S.C. §§ 2901 et seq. (Supp. 1985). Since October 1, 1986, the Act has required purchasers of cattle such as defendants to collect a one dollar a head assessment from cattle producers to finance "a coordinated program of promotion and research designed to strengthen the beef industry's position in the marketplace and to maintain and expand domestic and foreign markets and uses for beef and beef products," 7 U.S.C. § 2901(b), which is administered by the Cattleman's Beef Promotion and Research Board ("Board").

 There is no dispute that defendants, producers as well as purchasers of beef cattle, have failed to collect the assessments due under the statute; however, defendants defend this failure by arguing that the statute is unconstitutional. The government asserts the constitutionality of the statute and requests an order declaring that defendants have violated the Act, requiring compliance with an outstanding administrative subpoena, and enjoining any further operation of the defendants' livestock market until they comply with the Act. Before me is plaintiff's motion for partial summary judgment on the issue of liability and defendants' counterclaim for injunctive relief.

 The Statutory Scheme

 The Beef Promotion and Research Act of 1985 directs the Secretary of Agriculture to establish, through a Beef Promotion and Research Order, a research and marketing program to bolster the troubled beef industry. 7 U.S.C. § 2901. On July 18, 1986, the Secretary issued the required order which became effective October 1, 1986. 7 C.F.R. §§ 1260.101 et seq. On that date purchasers of cattle, designated "collecting persons," began deducting a one dollar assessment from the purchase price paid to cattle farmers and importers for each head of cattle to finance the program. 7 U.S.C. § 2904(8)(A). Under the Act these assessments are remitted to either a state beef council, such as the Pennsylvania Beef Council, Inc. or the Board, a group of cattle producers appointed by the Secretary. Id.

 The Board acts primarily through an Operating Committee ("Committee") comprised of ten members of the Board and ten members elected by a federation that includes the state beef councils. The Committee develops "promotion, research, consumer information and industry information plans or projects," 7 U.S.C. § 2904(4)(B), for the Secretary's approval and then implements the approved proposals. The total costs of collection of assessments and administrative staff incurred by the Board may not exceed five percent of the total projected assessments for any fiscal year.

 The program may be short-lived. Within twenty-two (22) months after the effective date, the Secretary must conduct a referendum among beef producers to decide whether the program should be continued. If the program is not approved by a majority of those voting, the Secretary must terminate the program as soon as practicable. 7 U.S.C. § 2906. In addition, any producer who does not support the program may request a refund of his assessments under designated procedures. 7 U.S.C. § 2907(c). All refunds will be made subsequent to the producer referendum and the Secretary is required to maintain an escrow account equal to fifteen percent of assessments paid. 7 U.S.C. § 2907(b).

 Finally, the Act authorizes the Secretary to request that the Attorney General initiate a civil action to enforce, and to prevent and restrain a person from violating, any order or regulation promulgated by the Secretary pursuant to the Act. 7 U.S.C. §§ 2908(b), (c).

 Defendants' Arguments

 Defendants make four broad attacks on the constitutionality of the legislation:

 
1. The assessment is an unlawful delegation of the taxing power of Congress.
 
2. The assessment violates the Fifth Amendment because:
 
a. it is a taking without just compensation for a private purpose; and
 
b. it is a denial of equal protection (the whole burden falls on the farmer rather than butchers, etc.).
 
3. The assessment violates the First Amendment because:
 
a. it violates defendants' right to freedom of association (forced to associate with ...

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