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It’s been a busy spring for legal developments in pesticides and insecticides.  Our last article summarized recent activity surrounding dicamba products.  In today’s post we cover legal activity on glyphosate and chlorpyrifos.   

Roundup award.  The Ninth Circuit Court of Appeals dealt another loss to Monsanto (now Bayer) on May 14, 2021, when the court upheld a $25.3 million award against the company in Hardeman v. Monsanto.   The lower court’s decision awarded damages for personal injuries to plaintiff Edward Hardeman due to Monsanto’s knowledge and failure to warn him of the risk of non-Hodgkin lymphoma from Roundup exposure.  Monsanto argued unsuccessfully that the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) preempted the plaintiff’s claim that California’s Proposition 65 law required Monsanto to include a warning about Roundup’s carcinogenic risks on its label.  That requirement, according to Monsanto, conflicted with FIFRA because the EPA had determined via a letter that a cancer warning would be considered “false and misleading” under FIFRA. The Ninth Circuit disagreed that the EPA letter preempted the California requirements.

The Court of Appeals also held that the trial court did not abuse its discretion in allowing the plaintiff’s expert testimony.  Monsanto had challenged testimony from a pathologist whom it alleged was not qualified to speak as an expert.  But the court agreed that the witness testimony met the standard that expert opinions be “reliably based” on epidemiological evidence.

Monsanto also challenged the damages themselves.  The award in Hardeman included $20 million in punitive damages that the district court reduced from $75 million originally awarded by the jury.  While $75 million seemed “grossly excessive,” the appellate court reasoned, $20 million did not, especially considering Monsanto’s reprehensibility, because evidence of the carcinogenic risk of glyphosate was knowable by Monsanto. 

Roundup settlement.  In a second Roundup case, a California district court last week rejected a motion to approve a $2 billion settlement by Monsanto (now Bayer) to a proposed class of users exposed to Roundup or diagnosed with non-Hodgkin lymphoma who have not yet filed lawsuits.  The offer by Bayer in Ramirez, et al. v. Monsanto Co. included legal services, compensation, research and assistance with non-Hodgkin lymphoma diagnosis and treatment, and changes on the Roundup label advising users of a link to non-Hodgkin lymphoma, but would require class members to waive their right to sue for punitive damages if they contract non-Hodgkin lymphoma and stipulate to the opinion of a seven-member science panel about whether Roundup causes non-Hodgkin lymphoma. 

The judge determined that the settlement would accomplish a lot for Bayer by reducing its litigation and settlement exposure, but it would greatly diminish the future settlement value of claims and “would accomplish far less for the Roundup users who have not been diagnosed with NHL (non-Hodgkin lymphoma)—and not nearly as much as the attorneys pushing this deal contend.”   The court also determined that the benefits of the medical assistance and compensation components of the settlement, to last for four years, were greatly exaggerated and vastly overstated.  The proposed stipulation to a science panel also received the court’s criticism. “The reason Monsanto wants a science panel so badly is that the company has lost the “battle of the experts” in three trials,” the court stated.  Concluding that “mere tweaks cannot salvage the agreement,” the court denied the motion for preliminary approval and advised that a new motion would be required if the parties could reach a settlement that reasonably protects the interest of Roundup users not yet diagnosed with non-Hodgkin lymphoma.

Bayer responded to the court’s rejection immediately with a “five-point plan to effectively address potential future Roundup claims.”  The plan includes a new website with scientific studies relevant to Roundup safety; engaging partners to discuss the future of glyphosate-based producers in the U.S. lawn and garden market; alternative solutions for addressing Roundup claims including the possible use of an independent scientific advisory panel; reassessment of ongoing efforts to settle existing claims; and continuing current cases on appeal.

Chlorpyrifos.  The insecticide chlorpyrifos also had its share of legal attention this spring. Chlorpyrifos was first registered back in 1965 by Dow Chemical but its use has dropped somewhat since then. Its largest producer now is Corteva, who announced in 2020 that it would end production of its Lorsban chlorpyrifos product in 2021.  That’s good timing according to the strongly worded decision from the Ninth Circuit Court of Appeals, which ruled in late April that the EPA must either revoke or modify all food residue tolerances for chlorpyrifos within sixty days. 

The plaintiffs in the case of League of United Latin American Citizens v. Regan originally requested a review of the tolerances in 2007 based on the Federal Food, Drug and Cosmetic Act (FFDCA), which addresses pesticide residues in or on a food.  FFDCA requires EPA to establish or continue a tolerance level for food pesticide residues only if the tolerance is safe and must modify or rescind a tolerance level that is not safe.  Plaintiffs claimed the tolerances for chlorpyrifos are not safe based upon evidence of neurotoxic effects of the pesticide on children.  They asked the EPA to modify or rescind the tolerances.  The EPA denied the request, although that decision came ten years later in 2017 after the agency repeatedly refused to make a decision on the safety of the product.  The Obama Administration had announced that it would ban chlorpyrifos, but the Trump Administration reversed that decision in 2017.

Plaintiffs objected to the EPA’s decision not to change or revoke chlorpyrifos tolerance, arguing that the agency should have first made a scientific finding on the safety of the product.  The EPA again rejected the argument, which led to the Ninth Circuit’s recent review.  The Ninth Circuit concluded that the EPA had wrongfully denied the petition, as it contained sufficient evidence indicating that a review of the chlorpyrifos tolerance levels was necessary.  The EPA’s denial of the petition for review was “arbitrary and capricious,” according to the court.  “The EPA has sought to evade, through one delaying tactic after another, its plain statutory duties,” the court stated. 

More to come.  While the spring held many legal developments in pesticide law, the rest of the year will see more decisions.  The Roundup litigation is far from over, and the same can be said for dicamba.  How will the EPA under the new administration handle pesticide review and registration, and the court's order to address chlorpyrifos tolerances?  Watch here for these and other legal issues with pesticides that will outlive the spring.

It’s that time of year again.  A time full of excitement and hope.  Kids and students are eagerly waiting for that final bell to ring, releasing them into weeks of freedom and fun.  Some are celebrating with their closest loved ones as they prepare to embark on their next journey.  And lastly, some parents have circled a certain fall date for when things return back to normal.  It is finally nice to see hope, joy, and excitement return to our lives.  These past 18 months have been a real wake-up call, and by no means is it over, but the light can be seen at the end of the tunnel.  This past week has also been abuzz with interesting agricultural and resource issues.  This edition of the Ag Law Harvest brings you some interesting lawsuits, reports, and initiatives from across the country affecting agriculture and the environment. 

USDA expands aquaculture disaster assistance.  The USDA has announced a policy change that makes food fish and other aquatic species eligible for the Emergency Assistance for Livestock, Honey Bees and Farm-raised Fish Program (ELAP).  Previously, only losses of farm-raised game and bait fish were eligible under ELAP.  Under the program, eligible producers can receive financial assistance for losses due to disease and certain severe weather events.  To be eligible, losses must have occurred on or after January 1, 2021.  The Farm Service Agency (FSA) is waiving the requirement to file a notice of loss within 30 calendar days for farm-raised fish and other aquatic species death losses that occurred prior to June 1, 2021.  Producers must still provide records to document any eligible losses.  The deadline to file an application for payment for the 2021 program year is January 31, 2022.  The USDA also announced that it will purchase up to $159.4 million in domestically produced seafood, fruits, legumes, and nuts for distribution to domestic food assistance programs in order to address disruptions in the food production and supply chains resulting from the COVID-19 pandemic. 

Oregon ballot initiative seeks to redefine animal cruelty.  Supporters of Oregon Initiative Petition 13 (“IP13”) have succeeded in meeting their first requirement to putting their proposed law on the 2022 Oregon ballot.  IP13 seeks to amend the definition of what constitutes animal cruelty and who can be punished.  Oregon, like many other states, does have an animal cruelty law that prohibits individuals from unnecessarily harming animals.  Additionally, Oregon’s current law specifically exempts certain practices from being assumed to be animal abuse (activities like farming, breeding livestock, hunting, fishing, wildlife management practices, rodeos, slaughter, and scientific or agricultural research).  However, IP13 seeks to remove all the above listed exemptions and would make it a crime to engage in those types of activities.  IP13 only exempts individuals that harm an animal because the animal posed an immediate risk of danger and veterinarians.  Supporters of IP13 claim that no one should be above the law and should be held accountable for any and all animal abuse and neglect.  Opponents of IP13 fear that if the initiative passes and becomes law, Oregon’s animal agriculture industry will be destroyed.  Opponents argue that IP13 makes common farming practices like breeding and slaughtering livestock for food, illegal.  If supporters of IP13 continue to collect signatures and meet the required thresholds, IP13 will be voted on by the citizens of Oregon in 2022. 

Indiana passes law to purchase locally grown food from youth agricultural education programs.  Indiana’s governor signed a bill into law that allows schools to purchase up to $7,500 worth of food from youth agricultural education programs.  The bill, sponsored by State Rep. Steve Davisson, was born after local Indiana FFA students were raising hogs and growing hydroponic lettuce to sell to their school cafeteria but hit a roadblock because of state laws and requirements.  House Bill 1119 provides an avenue for local youth agricultural programs to sell to their respective school districts and not compete against wholesale distributors.  Rep. Davisson hopes the program will expand into other Indiana schools to give students practical agricultural experience and potentially launch students into a career in agriculture.  

Federal lawsuit about USDA’s RFID tags for cattle dismissed.  Last month we reported that farmers and ranchers from South Dakota and Wyoming filed a lawsuit against the USDA and its subagency, the Animal and Plant Health Inspection Service (“APHIS”), for improperly using advisory committees to create new rules in violation of federal law.  Well, last week a Wyoming federal court dismissed the complaint against the USDA and APHIS.  The court concluded that APHIS did not “establish” the Cattle Traceability Working Group (“CTWG”) or the Producer Traceability Council (“PTC”) as advisory councils to create the RFID tag rules.  The court also found that the advisory groups were completely private and consisted of cattle industry representatives, showing that APHIS did not “establish” these advisory groups.  Additionally, the court held that APHIS did not “utilize” or control the actions of the advisory groups.  The court reasoned that the advisory groups and APHIS were working on parallel tracks to achieve the same goal, preventing and tracing animal disease for livestock moving across state lines, and that APHIS only provided input to the advisory groups.  The court held that the USDA and APHIS were not in violation of federal law because the advisory groups were not subject to the Federal Advisory Committee Act.  As it stands, the USDA and APHIS have rescinded their July 2020 notice that RFID tags would be required for cattle crossing state lines. However, attorneys and interest groups representing the farmers and ranchers in the Wyoming case still fear that APHIS and the USDA will use the information provided by these advisory groups to implement an “unlawful mandate” in the future.  

South Dakota farmer suing the USDA over a mud puddle?  On May 05, 2021, Arlen and Cindy Foster filed a federal lawsuit in South Dakota claiming that the USDA has improperly identified a mud puddle in the middle of their farm field as a federally protected wetland and that the Swampbuster Act violates the U.S. Constitution.  Under the Swampbuster Act, farmers that receive USDA benefits cannot produce crops on or around a federally protected wetland or they risk losing all federal agriculture benefits.  The Fosters contend that Arlen’s father planted a tree belt in 1936 to help prevent soil erosion which is now causing snow to accumulate under the tree belt producing a puddle in the field when the snow melts.  The Fosters argue that this makes the puddle in their field an unregulated “artificial wetland” and is not subject to the Swampbuster Act or the USDA’s control.  Additionally, the Fosters claim that the Swampbuster Act violates the Tenth Amendment of the U.S. Constitution, and that the federal government cannot regulate the Fosters’ alleged wetland.  The Fosters reason that if their puddle should be considered a wetland, any regulation of that wetland should come from the state of South Dakota, not the federal government.   

Hawai’i man fined over $600,000 for pouring poison into Paahe’ehe’e Stream.  Hawai’i’s Board of Land and Natural Resources (“BLNR”) fined a Hilo resident $633,840 for pouring poison into a North Hilo stream and causing the death of an estimated 6,250 Tahitian prawns.  North Hilo has a history of individuals using poison to harvest Tahitian prawn.  DLNR, in conjunction with other natural resource protection entities, are continuously concerned with the impact that the poison will have on the local wildlife and environment.  The $633,840 fine is the largest in BLNR history and advocates hope that it is a step in the right direction to let illegal fishers know that Hawai’i is committed to prosecuting individuals that engage in harmful environmental practices to the full extent of the law in order to protect Hawai’i’s natural resources. 

Montana man sentenced to prison for cattle theft.  A ranch manager has been sentenced to 30 months in prison and ordered to pay back $451,000 after pleading guilty to wire fraud and to selling cattle that he did not own.  The Montana man was a ranch manager at Hayes Ranch in Wilsall, Montana from 2008 to 2017 and also started his own cattle company in 2015.  When the owners of Hayes Ranch were out of town, the ranch manager began stealing cattle from his employer and selling them as if they were his own.  The ranch manager was ordered to repay his former employer $241,000 for the stolen cattle.  Additionally, the ranch manager was ordered to pay Northwest Farm Credit Services over $200,000 for selling cattle that he pledged as collateral for loans obtained from the lender.  

The return of the U.S. Jaguar?  Environmental groups and scientists recently published a paper urging U.S. wildlife managers to consider reintroducing jaguars to the American Southwest.  Advocates argue that reintroducing jaguars to the region is essential to species conservation and restoration of the ecosystem.  In July 2018, the U.S. Fish and Wildlife Service published a jaguar recovery plan as required by the Endangered Species Act of 1973.  While the recovery plan does not call for the reintroduction of jaguars into the Southwest region of the U.S., federal officials have been increasingly focused on sustaining habitat, eliminating poaching, and improving public acceptance for jaguars that naturally make their way across the U.S.-Mexico border.  The southwest region of the U.S. makes up 1% of the jaguar’s historic range but is suitable for sustaining the big cat.  Jaguar sightings have been reported in the area, although very rarely.  Jaguar advocates hope that potential opposition to the reintroduction of jaguars, specifically from ranchers and rural residents, can be eased by implementing compensation programs focused on things like increased livestock deaths. 

Barry Ward; Leader, Production Business Management; Director, OSU Income Tax Schools, May 19, 2021

What a difference a year makes! The crop margin outlook for this year is decidedly different from where we were last year at this time. Factors affecting both supply and demand have driven commodity crop prices much higher over the last 12 months and the result is a positive margin outlook for 2021 commodity crops. In spite of higher fertilizer, fuel and insurance costs among others, there is a good profit outlook for 2021.

Fuel costs have increased as the state of the overall economy has improved over the last months and fertilizer prices have increased fairly dramatically as a number of factors have impacted costs in manufacturing, and overall supply and demand for nitrogen, phosphorous and potassium fertilizers.

Each year producers tend to purchase inputs over a period of several months leading up to planting for a variety of reasons. Some farmers look to spread risk by pricing fertilizer over several months, some purchase inputs early to take advantage of early buying discounts while many will pre-pay for certain inputs to manage income taxes. On-farm fuel and fertilizer storage tend to give producers more flexibility in spreading their purchases over a longer period to take advantage of possible lower prices. This large input purchase window may have paid dividends this year especially if producers priced fertilizer prior to big price increases.

Production costs for Ohio field crops are forecast to be higher than last year with higher fertilizer prices leading the way. Variable costs for corn in Ohio for 2021 are projected to range from $405 to $488 per acre depending on land productivity. The trend line corn yield (177.9 bpa) scenario included in the corn enterprise budget shows an increase in variable costs of 9.5%.  

Variable costs for 2021 Ohio soybeans are projected to range from $227 to $253 per acre. Variable costs for trend-line soybeans (55.3 bpa) are expected to increase 12.8% in 2021 compared to 2020.

Wheat variable expenses for 2021 are projected to range from $173 to $207 per acre. The trend line wheat yield (70.6 bpa) scenario included in the wheat enterprise budget shows an increase in variable costs of 5.8%.  

Returns will likely be positive for most producers depending on price movement throughout the rest of the year. Grain prices used as assumptions in the 2021 crop enterprise budgets are $5.00/bushel for corn, $13.20/bushel for soybeans and $6.30/bushel for wheat. Projected returns above variable costs (contribution margin) range from $307 to $579 per acre for corn and $357 to $623 per acre for soybeans. Projected returns above variable costs for wheat range from $182 to $327 per acre.

Return to Land is a measure calculated to assist in land rental and purchase decision making. The measure is calculated by starting with total receipts or revenue from the crop and subtracting all expenses except the land expense. Returns to Land for Ohio corn (Total receipts minus total costs except land cost) are projected to range from $135 to $389 per acre in 2021 depending on land production capabilities. Returns to land for Ohio soybeans are expected to range from $233 to $484 per acre depending on land production capabilities. Returns to land for wheat (not including straw or double-crop returns) are projected to range from $93 per acre to $229 per acre.

Total costs projected for trend line corn production in Ohio are estimated to be $824 per acre. This includes all variable costs as well as fixed costs (or overhead if you prefer) including machinery, labor, management and land costs. Fixed machinery costs of $78 per acre include depreciation, interest, insurance and housing. A land charge of $195 per acre is based on data from the Western Ohio Cropland Values and Cash Rents Survey Summary. Labor and management costs combined are calculated at $83 per acre. Details of budget assumptions and numbers can be found in footnotes included in each budget.

Total costs projected for trend line soybean production in Ohio are estimated to be $565 per acre. (Fixed machinery costs: $62 per acre, land charge: $195 per acre, labor and management costs combined: $55 per acre.)

Total costs projected for trend line wheat production in Ohio are estimated to be $479 per acre. (Fixed machinery costs: $36 per acre, land charge: $195 per acre, labor and management costs combined: $45 per acre.)

Data used to compile these enterprise budgets includes research, surveys, market data, economic modeling, calculations and experience of authors.

Current budget analyses indicates very favorable returns for all three primary commodity crops but crop price change and harvest yields may change this outcome. These projections are based on OSU Extension Ohio Crop Enterprise Budgets. Newly updated Enterprise Budgets for 2021 have been completed and posted to the Farm Office website: https://farmoffice.osu.edu/farm-mgt-tools/farm-budgets

Energy is a hot topic at the statehouse these days.  The Ohio General Assembly is reviewing several proposals dealing with energy sources, including solar and wind facilities, oil, gas, and gas pipelines.  The proposals raise a critical question about where control over energy production activities should lie:  with the state or with local communities?  The proposals offer contrasting views on the answer to that question.

Solar and wind projects.  We reported in March that companion bills H.B. 118 and S.B. 52 were on hold due to conflicts with the proposals, which would have allowed citizens to use the referendum process to reject proposed large scale wind and solar energy developments in their communities.  On May 12, the bill sponsors offered a substitute bill to the House Public Utilities Committee.   The new approach in the substitute bill would allow a township to adopt a resolution designating all or parts of the township as “energy development districts.”  Doing so would allow wind and solar facilities to be constructed within the designated district(s) and would prevent the Ohio Power Siting Board from approving any projects that are not within a designated district.  The residents in a township, however, would have the right to petition an energy development district designation and submit it to a vote by township residents.  Sponsor Sen. Rob McColley (R-Napoleon) explained that the new approach would allow a township to let energy developers know “up front” that the community is “open for business.”  The committee will hear responses to the substitute bill in additional hearings, not yet scheduled.

Fossil fuel and gas pipelines.  A proposal regarding energy generation from fossil fuels and gas pipelines takes an opposite approach on local control.  H.B. 192, sponsored by Rep. Al Cutrona (R-Canfield) would prohibit counties, townships, and municipal corporations from prohibiting or limited the use of fossil fuels for electricity generation and the construction or use of a pipeline to transport oil or gas.  About a dozen opponents testified against the bill at its third hearing before the House Energy and Natural Resources last week, with most arguing that the proposal removes rights of local communities to control their energy sources and violates the home rule authority for municipalities provided in Ohio’s Constitution.  The bill is not yet scheduled for an additional committee hearing.

Natural gas.  A bill that guarantees access to natural gas passed the House of Representatives on May 6, largely along party lines.  H.B. 201, sponsored by Rep. Jason Stephens (R-Kitts Hill), guarantees that every person has a right to obtain any available distribution service or competitive retail natural gas service from gas suppliers, and bars a political subdivision from enacting laws that would limit, prevent, or prohibit a consumer within its boundaries from using distribution services, retail natural gas service, or propane.  Opponents argue that the bill violates home rule authority and is unnecessary, since no community in Ohio has ever banned the use of natural gas.  The bill was referred to the Senate Energy and Public Utilities Committee on May 12.

We'll keep you posted on the progress of these bills as the Ohio General Assembly continues to deal with the question of local versus state control of energy production and distribution in Ohio.