Based on its review of the value of the four trademarks that were the subject of the 2006 asset purchase agreement between the National Pork Board (NPB) and the National Pork Producers Council (NPPC), the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS) is approving continuing annual payments by NPB to NPPC under the terms of the 2006 agreement.
AMS’s review arose out of a 2012 lawsuit filed by The Humane Society of the United States (HSUS) challenging USDA’s approval of the agreement and annual payments. In December, 2015, HSUS and USDA entered into a stipulation agreement whereby HSUS dismissed the parts of its complaint seeking that USDA recover the funds already paid to NPPC under the agreement. USDA agreed to review the agreement and payments consistent with its own independent judgment and authority.
As part of its review, AMS directed NPB to contract for an independent expert to provide a current valuation of the trademarks. Stout Risius Ross conducted the valuation and accepted input from both HSUS and NPPC, ultimately finding that the value of the trademarks far exceeded the purchase price for the trademarks and the remaining principal balance under the agreement. Therefore, AMS is approving the continuing payments under the agreement.
Separately, USDA’s General Counsel sent a letter to NPB’s chief operating officer regarding the NPB Delegate Body’s advisement to Agriculture Secretary Tom Vilsack, which it says violates pork checkoff laws.
During the March 3-5 National Pork Industry Forum, 145 pork checkoff delegates representing 43 states and importers unanimously joined the North Carolina Pork Council in support of an advisement to Vilsack asking USDA to defend its original decision supporting the trademark transaction.
In the letter, USDA’s General Counsel informed NPB’s COO that the advisement and the letter forwarding it were in violation of the Pork Promotion, Research & Consumer Information Order and AMS guidelines forbidding AMS research and promotion boards from using mandatory assessment funds to engage in lobbying for governmental action and was in direct contradiction to counsel provided by AMS during the Delegate Body meeting.
As such, the General Counsel directed that the board, within 30 days, must account for and reimburse all pork checkoff funds related to the Delegate Body action and suggested that the COO, board officers and any other critical staff attend remedial training on the proper use of pork checkoff funds.