The Center for Food Safety (CFC), along with other groups and a number of organic farms, filed a lawsuit early this month claiming that USDA violated the Organic Foods Production Act (OFPA) when it allowed hydroponically-grown crops to bear the “Certified Organic” label.  In January 2019, CFC filed a legal petition asking USDA to create regulations which would ban hydroponic operations from using the organic label.  USDA denied the petition, and CFC’s current lawsuit also alleges that USDA’s denial violated the Administrative Procedure Act (APA).  CFC asks the U.S. District Court for the Northern District of California to vacate USDA’s denial of their petition and to bar the agency from certifying any hydroponic operations as organic.  The complaint can be found here. 

What do “hydroponic” and “organic” mean anyway?

Many of you are probably familiar with hydroponic and organic growing, but since the terms are very important in this lawsuit, it’s worth reviewing them before we continue. 

The USDA, on its National Agricultural Library website, defines “hydroponics” as “growing plants in a nutrient solution root medium.” In other words, hydroponic plants can be grown in mediums such as sand, gravel, and water with additional nutrients.  Simply put, hydroponic plants are not grown in the soil. 

OFPA (available here) says in order to sell or label an agricultural product as “organically produced,” the product must:  1) have been produced and handled without the use of synthetic chemicals, except as otherwise provided; (2) except as otherwise provided in this chapter and excluding livestock, not be produced on land to which any prohibited substances, including synthetic chemicals, have been applied during the 3 years immediately preceding the harvest of the agricultural products; and (3) be produced and handled in compliance with an organic plan agreed to by the producer and handler of such product and the certifying agent.  Thus, for a plant to be “organic,” it must meet these criteria. 

CFC’s argument under OFPA

In their lawsuit, CFC is principally concerned with the third part of the organic requirements listed above—that in order to be labeled as organic, an agricultural product must be “produced and handled in compliance with an organic plan.” Organic plans, in turn, must also meet a number of requirements.  One of those requirements is that the “organic plan shall contain provisions designed to foster soil fertility, primarily through the management of the organic content of the soil through proper tillage, crop rotation, and manuring.” At its most basic, CFC’s argument is that fostering soil fertility is an integral and required part of the OFPA, and therefore, plants not grown in actual soil cannot meet all the requirements necessary for organic certification.  In other words, since hydroponics by definition are not grown in soil, hydroponic farmers can’t foster soil fertility.  As a result, CFC maintains that since fostering soil fertility is required in order for plants to be labeled “organic,” hydroponically-grown plants can’t be organic.  By allowing hydroponics to be labeled organic, CFC asserts that USDA is in violation of the OFPA. 

CFC’s argument under the APA

The plaintiffs also contend that USDA’s denial of their 2019 petition violated the APA. The APA (you can find the relevant chapter here) is the law that federal agencies must follow when writing and adopting regulations.  Under the APA, courts have the power to overturn agency actions if they are arbitrary, capricious, an abuse of discretion, or are otherwise unlawful.  Additionally, courts can overturn agency actions when they go beyond the authority given to the agency by Congress.  Here, CFC argues that USDA’s denial of their petition was arbitrary and capricious and not in accordance with the law.  Basically, they are arguing that USDA violated the APA by ignoring the soil fertility language that Congress included in OFPA. 

What’s USDA’s take?

USDA’s denial of CFC’s petition gives us a little insight into what the agency’s response to the lawsuit might include.  The agency claims that the National Organic Program (NOP) has allowed hydroponic operations to be certified organic in the past.  Furthermore, USDA counters that the statutory and regulatory provisions that refer to “soil” do not require every organic plant to be grown in soil.  Instead, they say the provisions are simply “applicable to production systems that do use soil.”

The court will certainly have a lot to sift through in this lawsuit.  USDA still has to respond to the complaint, and hydroponic operations might throw their support behind the agency’s cause.  We’ll be keeping an eye on what happens and will make sure to keep you updated!

Written by Peggy Kirk Hall and Ellen Essman

In the not-too-surprising news category, a federal court has invalidated the Lake Erie Bill of Rights (LEBOR) that Toledo residents passed last year to recognize and protect legal rights for Lake Erie.  What is surprising, however, is how the court reached its decision to strike down LEBOR, even in the wake of a law passed by the Ohio legislature in July of 2019 that denies legal standing to nature and prevents a person from bringing a court action on behalf of nature or any ecosystem.

The verdict came exactly one year after Drewes Farm Partnership filed its federal lawsuit to prevent enforcement of LEBOR a day after Toledoans passed the measure.  Drewes Farm asserted that LEBOR violated the farm’s rights under the First Amendment, Equal Protection Clause, and Due Process Clauses of the Fifth and Fourteenth Amendments.  Drewes Farm also argued that LEBOR exceeded the City of Toledo’s authority because it usurped the power of the state and the federal government by interfering with international relations, invalidating state and federal permits, invalidating state law, altering the rights of corporations, and creating new causes of action in state courts.  In April 2019, the state of Ohio joined the lawsuit as a fellow plaintiff.  Proponents of LEBOR unsuccessfully attempted to join in the litigation.

Did the plaintiffs have the right to bring the case?

The opinion begins with the court’s “standing” analysis.  Toledo argued that Drewes Farm and Ohio did not have legal standing to bring the lawsuit against the City.  Legal standing requires that a plaintiff (1) suffers an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.  Failing to meet the legal standing requirement would force dismissal of the lawsuit.  Without a finding in favor of legal standing, the court wouldn’t be able to determine LEBOR’s validity.   

The central issue in whether the parties had legal standing was the injury in fact requirement, according to the court.  To challenge LEBOR, the plaintiffs must demonstrate “concrete and particularized” injury that is “actual or imminent, not conjectural or hypothetical.”  The court determined that the state of Ohio met this requirement because it suffered an injury, “at least on paper,” from LEBOR’s invalidation of Ohio laws, regulations, licenses and permits and because the state “could” be sued under LEBOR.  The judge also found that Drewes Farm demonstrated injury in fact since any Toledo resident “could” sue the farm for violating LEBOR.

In its brief attention to the second component of standing, that the injury is fairly traceable to the defendant, the court determined that the potential injuries were traceable to Toledo because its city charter was amended by voters to include the LEBOR language.  Even though the City itself did not legislatively enact LEBOR, had actually attempted to keep the issue off the ballot due to concerns that it was unconstitutional, and had not indicated any intent to enforce LEBOR, the court concluded that “the City is a proper defendant in the suit.”  The court also found that invalidating LEBOR would redress the plaintiffs’ injuries, the final requirement for legal standing. 

LEBOR violates due process

The court next directly examined only one of the many constitutional claims against LEBOR, the Fourteenth Amendment’s right to due process, and specifically focused on one element of due process:  clarity of the law.  The court stated that if a law is vague and unclear, it can “trap the innocent by not providing fair warning and invite arbitrary enforcement by prosecutors, judges, and juries.”  Pointing to language in LEBOR such as the right of Lake Erie and its watershed to “exist, flourish, and naturally evolve,” and Toledoans’ right to a “clean and healthy environment,” the court questioned what type of conduct would violate the broad language and how a judge or jury would determine the line between “clean and unclean and healthy and unhealthy.”  Spreading even a small amount of fertilizer could possibly violate LEBOR, the court said, as well as countless other activities such as catching fish, pulling weeds, planting corn, or driving a gas-powered vehicle.  Not surprisingly, the court concluded that the language is void for vagueness.  While LEBOR’s language sounds powerful, the court explained, it has no practical meaning, contains merely “aspirational statements” rather than rules of law, and violates constitutional due process.

What about other constitutional claims?

The court surprisingly didn’t tackle the many other constitutional issues raised by Drewes Farm and the State.  But in its “severability” analysis, the court did briefly touch on the constitutionality of LEBOR’s preemption of state and federal laws.  LEBOR contains a severability clause stating that a determination of one part of LEBOR as invalid does not invalidate the remaining parts of LEBOR.  According to the court, this severability clause is valid only if the constitutional and unconstitutional parts of LEBOR are capable of separation and can stand by themselves.  The court concluded that once the vague rights are stripped away, the remaining parts of LEBOR are meaningless.

The court then took the opportunity to note that LEBOR’s attempt to preempt Ohio law in the name of environmental protection would fail on its own merits.  Lake Erie’s health falls well beyond Toledo’s authority and rights to govern its internal affairs, and enacting laws that conflict with Ohio law is a “textbook example of what municipal government cannot do,” said the court.

Protecting Lake Erie is a worthy goal

In a slightly sympathetic nod to LEBOR supporters “frustrated by the status quo,” the court notes that using a democratic process to protect Lake Erie is a well-intentioned goal but LEBOR simply fails to achieve the goal.  Careful drafting by Toledoans could result in valid legislation that would reduce water pollution, the court explains, while highlighting an ordinance in Madison, Wisconsin that restricted the use of phosphorus-containing fertilizers in the city and withstood a legal challenge.   

It comes as no surprise

Echoing what many had already concluded, the court criticized LEBOR’s authors for ignoring legal principals and constitutional limitations and stated that LEBOR’s invalidation should come as no surprise.  “This is not a close call,” the court says.  “LEBOR is unconstitutionally vague and exceeds the power of municipal government in Ohio.  It is therefore invalid in its entirety.”

Now what?

LEBOR has met the end of its road, but it never really stood a chance of actual enforcement due to its clearly unconstitutional language.  LEBOR’s proponents often claimed that the purposes of LEBOR were to gain more attention to Lake Erie’s poor water quality and to push the concept of recognizing legal rights for nature and ecosystems a bit further down the road.  Were they successful?  Will Toledoans give up, or will they regroup and carefully draft new legislation to protect their water?

Farmers in Ohio now have absolute certainty that they will not be sued for violating Lake Erie’s “rights,” but such a lawsuit never really stood a chance of actual success due to LEBOR’s clearly unconstitutional language.  And let’s not forget the new language in Ohio Revised Code §2305.01 stating that “nature or any ecosystem does not have standing to participate in or bring an action in any court of common pleas; no person, on behalf of or representing nature or an ecosystem, shall bring an action in any court of common pleas; and no person shall bring an action in any court of common pleas against a person who is acting on behalf of or representing nature or an ecosystem.”

And what about Lake Erie’s water quality?  New voluntary programs are rolling out from Governor DeWine’s H2Ohio plan.  But many claim that more forceful measures are necessary.  Other litigation over the lake’s water quality lingers, and Ohio has listed the Western Lake Erie Basin as “impaired” and must develop a plan to address Total Maximum Daily Loads of pollutants in the lake.  It’s no surprise that even though it’s the end of the road for LEBOR, conflicts over solving Lake Erie’s water quality problems will continue. 

Read the U.S. District Court’s opinion on LEBOR here.  For our in-depth look at LEBOR, click here.  We review other current Lake Erie legal activities here.

The year is still fairly new, and 2020 has brought with it some newly-introduced legislation in the Ohio General Assembly.  That being said, in 2020 the General Assembly also continues to consider legislation first introduced in 2019.  From tax exemptions to CAUV changes, to watershed programs and local referendums on wind turbines, here is some notable ag-related legislation making its way through the state house. 

New legislation

• House Bill 400 “To authorize a nonrefundable income tax credit for the retail sale of high-ethanol blend motor fuel”

HB 400 was introduced after our last legislative update in November, so while it was first introduced in 2019, it still technically qualifies as “new” to us.  Since its introduction, the bill has been discussed in two hearings in the House Ways & Means Committee.  The bill would give owners and operators of gas stations a tax rebate of five cents per gallon for sales of ethanol.  To apply, the fuel would have to be between 15% and 85% ethanol (E15).  If passed, the tax credit would be available for four years.  The bill is meant to encourage gas station owners in Ohio to sell E15, which is much more readily available in other states.  The bill is available here.

• House Bill 485 “To remove a requirement that owners of farmland enrolled in the CAUV program must file a renewal application each year in order to remain in the program”

Introduced on January 29, 2020, HB 485 would make it easier for farmers to stay enrolled in the Current Agricultural Use Valuation (CAUV) program.  CAUV allows agricultural land to be taxed at a much lower rate than other types of land.  If HB 485 were to pass, the initial application for CAUV on land more than 10 acres would automatically renew each year but the landowner must notify the auditor if the land ceases to be devoted exclusively for agricultural use. Owners of agricultural land less than 10 acres in size, who can qualify for CAUV if gross income from the land exceeds $2,500, would have to submit documentation on the annual gross income of the land to the county auditor each year rather than filing the renewal application. The CAUV bill can be found here.

Legislation from 2019 still being considered

• House Bill 24 “Revise Humane Society law”

In November, we reported that HB 24 passed the House unanimously and was subsequently referred to the Senate Committee on Agriculture & Natural Resources.  Since that time, the committee has held two hearings on the bill. The hearings included testimony from the bill’s House sponsors, who touted how the bill would improve humane societies’ public accountability. The bill would revise procedures for humane society operations, require humane society agents to successfully complete training in order to serve, and would establish procedures for seizing and impounding animals. It would also remove humane societies’ current jurisdiction over child abuse cases and make agents subject to bribery laws. Importantly, HB 24 would allow law enforcement officers to seize and impound any animal the officer has probable cause to believe is the subject of an animal cruelty offense.  Currently, the ability to seize and impound only applies to companion animals such as dogs and cats.  You can read HB 24 here. 

• House Bill 109 “To authorize a property tax exemption for land used for commercial maple sap extraction”

HB 109 was first introduced in February of 2019, but has recently seen some action in the House Ways & Means Committee, where it was discussed in a hearing on January 28, 2020.  The bill would give owners of “maple forest land” a property tax exemption if they: (1) Drill an average of 30 taps during the tax year into at least 15 maple trees per acre; (2) use sap in commercially sold maple products; and (3) manage the land under a plan that complies with the standards of reasonable care in the protection and maintenance of forest land.  In addition, the land must be 10 contiguous acres. Maple forest land that does not meet that acreage threshold can still receive a tax exemption if the sap produces an average yearly gross income of $2,500 or more in the three preceding years, or if evidence shows that the gross income during the current tax year will be at least $2,500.  You can find the text of the proposed bill here.

• House Bill 160 “Revise alcoholic ice cream law”

Have you ever thought, “Gee, this ice cream is great, but what could make it even better?” Well this is the bill for you! At present, those wishing to sell ice cream containing alcohol in Ohio must obtain an A-5 liquor permit and can only sell the ice cream at the site of manufacture, and that site must be in an election precinct that allows for on- and off-premises consumption of alcohol.  This bill would allow the ice cream maker to sell to consumers for off-premises enjoyment and to retailers who are authorized to sell alcohol. HB 160 passed the House last year and is currently in Agriculture & Natural Resources Committee in the Senate.  Since our last legislative update, the committee has had three hearings on the bill. In the hearings, proponents testified in support of the bill, arguing that it would allow their businesses to grow and compete with out of state businesses. Senators asked questions about how the ice cream would be kept away from children, how the bill would help business, and about other states with similar laws. To read the bill, click here.

• Senate Bill 2 “Create watershed planning structure”

In 2019, SB 2 passed the Senate and moved on to the House Energy and Natural Resources Committee. If passed, this bill would do four main things. First, it would create the Statewide Watershed Planning and Management Program, which would be tasked with improving and protecting the watersheds in the state, and would be administered by the ODA director.  Under this program, the director of ODA would have to categorize watersheds in Ohio and appoint watershed planning and management coordinators in each watershed region.  The coordinators would work with soil and water conservation districts to identify water quality impairment, and to gather information on conservation practices.  Second, the bill states the General Assembly’s intent to work with agricultural, conservation, and environmental organizations and universities to create a certification program for farmers, where the farmers would use practices meant to minimize negative water quality impacts. Third, SB 2 charges ODA, with help from the Lake Erie Commission and the Ohio Soil and Water Conservation Commission, to start a watershed pilot program that would help farmers, agricultural retailers, and soil and water conservation districts in reducing phosphorus.  Finally, the bill would allow regional water and sewer districts to make loans and grants and to enter into cooperative agreements with any person or corporation, and would allow districts to offer discounted rentals or charges to people with low or moderate incomes, as well as to people who qualify for the homestead exemption.

Since SB 2 moved on to the lower chamber, the House Energy and Natural Resources Committee has held multiple hearings on the bill, and has consented to two amendments.  The first amendment would keep information about individual nutrient management plans out of the public record. Similarly, the second amendment would keep information about farmers’ agricultural operations and conservation practices out of the public record. The text of SB 2 is available here.

• Senate Bill 234 “Regards regulation of wind farms and wind turbine setbacks”

SB 234 was introduced on November 6, 2019.  Since that time, the bill was assigned to the Senate Energy & Public Utilities Committee, and three hearings have been held. The bill would give voters in the unincorporated areas of townships the power to have a referendum vote on certificates or amendments to economically significant and large wind farms issued by the Ohio Power and Siting Board. The voters could approve or reject the certificate for a new wind farm or an amendment to an existing certificate by majority vote.  The bill would also change how minimum setback distances for wind farms might be measured.  The committee hearings have included testimony from numerous proponents of the bill. SB 234 is available here.  A companion bill was also introduced in the House.  HB 401 can be found here. 

Valentine’s Day was indeed a sweet day for Bader Farms, a peach farm in Missouri that claimed that dicamba products by Monsanto/Bayer and BASF drifted onto its property and injured 20,000 of its peach trees over 700 acres.  A federal jury agreed and awarded the farm $15 million in compensatory damages.  The following day, the jury gave the farm another $250 million in punitive damages against Bayer and BASF, bringing the total award to $265 million.

In 2016, Bader Farms was the first to file a dicamba drift lawsuit against Monsanto.  A summary of the lawsuit from our partner, the National Agricultural Law Center, explains that the farm’s claim alleged widespread damage to the peach orchards and a multi-million dollar financial loss. At the center of Bader Farms’ original complaint was Monsanto’s genetically modified Roundup Ready 2 Xtend soybeans and Bollgard II Xtend cotton seeds (“Xtend crops”), dicamba-resistant seeds that Bader Farms alleged were released without an accompanying EPA-approved dicamba herbicide in 2015 and 2016. The farm argued that by selling the Xtend crop seeds without a corresponding herbicide, it was foreseeable to Monsanto that farmers would use old, highly volatile, drift-prone dicamba that had a strong chance of damaging neighboring crops. 

Bader Farms later added BASF as a defendant to the case and also added new complaints for dicamba-related damage it suffered during the 2017 growing season. Bader Farms stated that Monsanto and BASF had worked together to manufacture, market, and sell dicamba-based products that they knew would cause harm. 

The jury in the federal lawsuit ruled in favor of Bader Farms on all counts.  Specifically, the jury concluded that Monsanto was negligent by releasing dicamba-tolerant seeds before releasing the herbicide.  The jury also determined that both Monsanto and BASF were negligent because they issued new dicamba products that drifted off-target although the companies claimed that the products were less likely to drift.  Important to the punitive damage award, the jury found that Monsanto and BASF had engaged in a “conspiracy to create an ecological disaster to increase profits.”

The Bader Farms case is the first of many dicamba-based cases against Monsanto/Bayer and BASF, combined last year into Multi-District Litigation involving both a Crop Damage Class Action Master Complaint and a Master Antitrust Action Complaint.  For an excellent review of the dicamba cases, see the National Agricultural Law Center’s series on “The Deal with Dicamba,” available at https://nationalaglawcenter.org/the-deal-with-dicamba-part-three/.