Business and Financial

By: Evin Bachelor, Monday, September 16th, 2019

Farm Science Review is upon us, and we’re hoping that the low-80s forecast holds true.  In addition to checking the weather report, we’ve been monitoring the news for developments in the agricultural law world, and quizzing each other on agricultural law topics so that we’re ready to answer your questions.  While we hope you come see our presentations (speaking schedule available HERE), we won’t make you wait until you see us at the Molly Caren Agricultural Center in London to learn what we’ve found in the news.

Here’s our latest gathering of agricultural law news you may want to know:

Family Farmer Relief Act of 2019 signed into law.  We’ve talked about this bill on the ag law blog, and now it’s official.  With the President’s signature, the debt limit for family farmers seeking to reorganize under Chapter 12 bankruptcy increases to $10 million from an adjusted $4.4 million.

No vote on community rights in Williams County, yet.  A proposed county charter for Williams County, Ohio containing language similar to the Lake Erie Bill of Rights may not make it on the November ballot.  The Ohio Supreme Court recently refused to compel the Williams County Board of Elections (BOE) to include the charter on the ballot for procedural reasons.

The charter would have declared that the people of Williams County have the right to a healthy environment and sustainable community, and that the Michindoh Aquifer and its ecosystem have the right to exist, flourish, evolve, regenerate.  Further, the aquifer would have the right of restoration, recovery, and preservation, including the right to be free from interferences such as the extraction, sale, lease, transportation, or distribution of water outside of the aquifer’s boundary.

Even though the petition to put the charter on the ballot had enough signatures, the BOE believed that the language of the charter violated Ohio law, and therefore exercised its power to reject the petition and keep it off the ballot.  The petitioners appealed the BOE’s decision to the Williams County Court of Common Pleas, and that court agreed with the BOE.  Instead of going to the Court of Appeals, the petitioners tried to go directly the Ohio Supreme Court because the BOE will soon print the November ballots.  The Ohio Supreme Court said the petitioners should have gone to the Court of Appeals first, and that it will not decide on whether the BOE has to include the charter on the ballot until the petitioners do so.

This doesn’t mean the end for the proposed charter, but rather that more court time is in the proposed charter’s future.  To read the Ohio Supreme Court’s opinion, click HERE.  To read the text of the proposed charter, click HERE.

Hemp, hemp, and more hemp.  Legal and policy updates on hemp continue to trickle down from state and federal officials.  Since our last blog post, when we released our latest law bulletin on the legal status of hemp in Ohio, there have been a couple additional developments.

One of the latest updates we’ve heard from USDA is that industrial hemp growers in states with a USDA-approved hemp production plan may apply for crop insurance to cover hemp grown for fiber, flower, or seeds starting next year.  Ohio is in the process of putting together a hemp program to send to the USDA for approval.  Ohio farmers still cannot legally grow hemp until the Ohio Department of Agriculture creates a hemp program and the USDA approves that program, but we are expecting rules to be released from those agencies in the coming weeks.  For more about the crop insurance update, read the Risk Management Agency’s press release HERE.

Closer to home, we’ve heard that the Ohio Department of Agriculture (ODA) has requested $3.3 million from the Ohio Controlling Board for staffing along with IT equipment and support.  Further, ODA has made statements predicting that it expects to have its rule hemp program rule package ready by the end of the year.

Federal court orders U.S. EPA to reconsider Renewable Fuel Standards waivers and their impact on endangered species.  The U.S. EPA is responsible for creating fuel standards that incorporate and blend renewable sources of energy under the Clean Air Act.  These standards tell refineries how much of their fuel blend must come from renewable sources of energy; however, the U.S. EPA also has the authority to grant waivers to companies that would have difficulty meeting the standard.  The court noted that some industry groups felt that the 2018 rules were too strict, while others argued that they were too lax.  The court ended up dismissing all but one of the claims against the U.S. EPA, saying that Congress gave it discretion in developing the standards.  However, the court sent the rule back to the U.S. EPA due to an argument by environmental groups that the federal agency failed to conduct a thorough review of the risk to endangered animals, plants, and habitats under the Endangered Species Act.  Many farm groups have criticized the Trump administration’s granting of waivers for causing a reduction in demand for their products from energy companies, but it appears that they will have to make their arguments to the administration rather than to the courts.  To read the D.C. Circuit’s opinion, click HERE.

By: Evin Bachelor, Wednesday, September 04th, 2019

Whether we’re ready or not, Labor Day traditionally marks a transition from summer to fall.  Pumpkin flavored everything will soon be available at a coffee shop and restaurant near you, and Ohio’s agritourism farms will surely be busy.

Whether you are just getting your agritourism farm up and running, or a seasoned agritourism veteran, it never hurts to take a moment to think about your liability risks.  The OSU Extension Agricultural & Resource Law Program has developed a number of resources, available on our publications webpage, that can help you think about ways to minimize the legal risks to you and your farm.  These resources include:

  • Ohio’s Agritourism Law – Ohio law grants liability protection for personal injuries suffered while participating in an agritourism activity.  It also provides for special taxation and zoning of lands where agritourism activities occur.  This law bulletin explains what your farm needs to do to be covered by the immunity, and how much protection it provides.  Click HERE to read the law bulletin.
  • Farm Animals and People: Liability Issues for Agritourism – Farm animals can be a valuable attraction for an agritourism operation, but having people and animals interact on the farm creates liability risks.  This factsheet explains a range of animal liability risks and provides a checklist to think about what you can do to reduce the risk of injury to your visitors, as well as reduce the risk of a lawsuit.  Click HERE to read the factsheet.
  • Agritourism and Insurance – Even with immunity laws in place, a farmer must carefully consider the farm’s insurance needs and ensure that it has adequate coverage.  This factsheet explains agritourism insurance, why it may be needed, and more.  It also provides a checklist that may help an agritourism farmer make sure that certain important insurance questions are addressed before an accident occurs.  Click HERE to read the factsheet.
  • Agritourism Immunity Laws in the United States – Many states, including Ohio, have taken steps to encourage agritourism by providing agritourism farms with some degree of immunity to liability.  We explain Ohio’s law more in depth in our law bulletin titled “Ohio’s Agritourism Law,” but this factsheet compares approaches taken in other states and provides a checklist that helps an agritourism farm think about how much protection it has under these laws.  Click HERE to read the factsheet.
  • Agritourism Activities and Zoning – Zoning is a force to be reckoned with in many states, but many states, including Ohio, have taken steps to encourage agritourism through zoning regulations.  This factsheet explains how zoning and agritourism interact across the country, including an explanation of Ohio’s current approach.  Click HERE to read the factsheet.
  • Youth Labor on the Farm: Laws Farmers Need to Know – Many Ohio agritourism farms provide employment to youth, who are able to learn about agriculture, business, and customer service through working at the farm.  Those hiring youth under the age of 18 want to make sure that they are following federal and Ohio labor laws.  Our latest law bulletin explains the youth labor laws that are unique to agriculture.  Click HERE to read the factsheet.

Food sales present some special issues that you will want to think about if you wish to sell food at your farm.  Depending upon the foods you sell, you may have to obtain a retail food establishment license for food safety purposes.  The following resources can help you think through the steps you must take to sell food at your agritourism farm:

  • Food Sales at Agritourism Operations: Legal Issues – Whether you sell fresh produce, cottage foods or baked goods, or prepare and serve food on-site, there are legal risks and requirements that may come into play.  This factsheet explains some of the legal issues you should consider before selling food at your farm, and provides a checklist of things to consider before you begin selling food.  Click HERE to read the factsheet.
  • Selling Foods at the Farm: When Do You Need a License? – This Ohio-specific factsheet explores farmers, including those operating an agritourism farm, need to register or obtain a license in order to sell food at the farm.  Click HERE to read the law bulletin.

Beyond our website, many of our peers at OSU Extension have developed a number of helpful resources for agritourism farms.  OSU Extension’s Agritourism Ready webpage, which you can access at u.osu.edu/agritourismready/, is designed to be a one stop shop for preparing an emergency management plan.  You can also read factsheets on Ohioline related to agritourism ranging from “Creating Signage for Direct Food and Agricultural Sales” to “Grants and Low-Interest Loans for Ohio Small Farms,” and “Maps, Apps and Mobile Media Marketing” to “Selling Eggs in Ohio: Marketing and Regulations.”

As new legal issues arise, we will continue to create resources that help farmers understand and mitigate their risk.  In the meantime, we wish everyone a fun and safe fall at Ohio’s agritourism farms.

By: Evin Bachelor, Thursday, August 22nd, 2019

August turned out to be a very busy month for food law.  We’re again reading headlines about the definition of meat and debates over cage-free egg laws.  We’ve also come across some interesting criminal actions involving organic labeling fraud and undocumented workers at poultry processing plants.  And yet again we have a Roundup update, but fortunately for Bayer, the target of the latest lawsuits are Home Depot and Lowe’s.  So without further ado, here’s our latest gathering of agricultural law news you may want to know:

Tofurkey cries foul against state definitions of meat.  The maker of edible vegetarian products designed to replicate the taste and texture of meats is fighting back against state labeling and advertising laws that require products labeled as “meat” to be made of meat.  Tofurky filed a lawsuit in federal court in Arkansas to stop the state from enforcing such laws, which is similar to a lawsuit it filed in Missouri and yet another company filed in Mississippi.  Livestock advocacy groups succeeded in having 12 states pass laws restricting the ability of food producers to refer to their products as meats if those products contain no meat.  Livestock advocacy groups argue that the labeling practices are confusing and misleading to consumers, while companies like Tofurky argue that they have a constitutional right to describe their products with meat terminology.  On its website, Tofurky lists beer brats, jumbo hot dogs, “slow roasted chick’n,” “ham style roast,” and more.  None of the products contain meat.

Organic food fraud puts farmers in jail.  A federal judge sentenced a 60-year-old Missouri farmer to serve 10 years and 2 months in prison after being convicted of wire fraud, which is the federal crime of committing financial fraud through the use of a telecommunications wire across state lines.  This includes placing a phone call, sending an email, or advertising online in the furtherance of the fraudulent scheme.  Another three farmers were also sentenced to prison for terms ranging from 3 months to 2 years for their participation.  The fraud involved a decade-long scheme to mix traditional corn and soybeans with a small amount of organic grains and then label everything as certified organic.  The grains were mostly sold as animal feed to producers and companies selling organic meat.  Organic products generally are sold at a high premium, and the volume of goods in this scheme resulted in the farmers receiving millions of dollars from consumers that was fraudulently obtained.  The lengthy prison sentences reflect the farmers’ intentional misrepresentation and mislabeling.  In other words, it was not an accident.

Oregon joins California and Washington to make the west coast cage-free.  States continue to battle over whether eggs should come from cage-free hens or caged hens.  When we last discussed the topic HERE in May, the governor of the state of Washington had just signed his state’s cage-free requirement into law.  Iowa, the nation’s leading egg producing state, has gone the other way in trying to limit cage-free egg production.  Now, Oregon is set to ban the purchase or sale of eggs and egg products from caged hens starting in 2024.  However, Oregon’s law exempts eggs and egg products from caged hens if the sale occurs at a federally inspected plant under the Egg Products Inspection Act or if the caged hens were at a commercial farm with a flock of fewer than 3,000 hens.  You can read the text of the bill HERE.

Immigration and Customs Enforcement raids poultry processing plants.  Federal immigration officials have alleged that managers at five Mississippi poultry processing plants knowingly hired undocumented aliens who are not authorized to work in the United States.  Fines for individuals or companies proven to have actual knowledge that they hired undocumented workers can reach up to $3,000 per undocumented worker.  Individuals may also face prison time.  According to news reports, ICE arrested 680 possibly undocumented workers during its August 7th raids in Mississippi.  In their applications for the search warrants, the investigators alleged that the companies hired undocumented workers who were wearing GPS ankle monitors as they await deportation hearings, reported Social Security numbers of deceased persons, and used different names at different times.

Latest Roundup lawsuit targets retailers Home Depot and Lowe’s.  You’ve heard us talk before about the thousands of lawsuits against Monsanto (now owned by Bayer) based on the allegation that the glyphosate in products like Roundup has caused cancer.  If you’d like a refresher, you can review our last post HERE.  Now, instead of going after the manufacturer, a new plaintiff is going after retailers.  Plaintiff James Weeks filed two class action complaints in federal court in California against Home Depot and Lowe’s, alleging that the home improvement giants failed to adequately warn customers about the safety risks posed by using the popular weed killer.  Mr. Weeks argues that the labeling leaves the average consumer with the impression that the greatest risk of harm is eye irritation, when in fact the retailers know of the product’s potential carcinogenic properties.  As these complaints are class action complaints, Mr. Weeks seeks to claim representative status over all consumers who purchased Roundup products from these retailers, and thereby lead the case against the retailers.  It will be interesting to see whether the court certifies these cases as class actions, or if this strategy falls short for the plaintiff.  You can read the complaint against Home Depot HERE.

Food giants seek silence from U.S. Commodity Futures Trading Commission.  In 2015, the U.S. Commodity Futures Tradition Commission initiated a lawsuit against Mondelez International Inc. and Kraft Heinz Co. for allegedly manipulating the wheat futures market.  All parties recently agreed to an undisclosed settlement, and entered into a consent order with the court to close the matter.  The agreement apparently included a provision that all parties would refrain from publically commenting about the settlement.  However, the federal agency ended up commenting on the settlement by the end of the week in which the agreement was finalized.  Mondelez and Kraft Heinz believe that such statements violated the terms of the consent order, although the federal agency contests the allegation.  Nonetheless, the confidentiality restrictions make it difficult to know the full details of the settlement.  All we know for certain is that there was one.

Federal courts report that Chapter 12 family farm bankruptcies are on the rise.  The federal court system releases data every quarter on the number of bankruptcies filed each month in that quarter.  The latest numbers for April to June 2019 showed a slight increase in the number of Chapter 12 bankruptcies filed when compared to the same time period in 2018.  Nationwide, there were 164 new filings, compared to 135 in the second quarter of 2018.  The numbers show a gradual increase in the use of Chapter 12 bankruptcy since 2013, but the numbers are starting to tick up to levels not seen since the Great Recession.  Chapter 12 bankruptcy is a special form of bankruptcy that can only be used by family farmers and family fishermen whose total debts do not exceed a certain dollar limit.  The current dollar limit is $4.4 million, but there is legislation awaiting President Trump’s signature to increase the limit to $10 million.  In large part because of these restrictions, Chapter 12 is one of the least commonly used forms of bankruptcy. 

By: Peggy Kirk Hall, Tuesday, August 06th, 2019

Congress must be concerned about the financial state of farmers.  A bill to increase the Chapter 12 debt limit to $10 million has languished in Congress since March, but recently gained traction and passed through both houses quickly.  Congress forwarded the bill, known as the Family Farmer Relief Act of 2019, to the President after the Senate approved it late last week.  The House passed the change to Chapter 12 on July 25.

Chapter 12 allows eligible family farmers and fishermen to stay in business and reorganize their debts through a repayment plan.  The recent action by Congress more than doubles the debt limit for Chapter 12 eligibility from its current amount of $4.4 million, adjusted for inflation from the original $1.5 million limit established when Congress created Chapter 12 in 1986.  If the President signs the current bill, a family farmer or fisherman with an aggregate debt of no more than $10 million will be eligible to use the special protections of the Chapter 12 bankruptcy process. 

The bill’s sponsor, Rep. Antonio Delgado (D-NY), explained that the increase to the debt limit reflects higher land values and the growth over time in the average size of U.S. farming operations. He stressed that the changes are necessary so that farmers have additional options to manage the current farm economy because farmers are “currently facing a fifth year of declining net farm income…. [p]rices are low, inputs are high, and current trade policies make the future unknown.”

According to the U.S. Bankruptcy Courts, farmers and fishermen filed a total of 535 Chapter 12 bankruptcies from June 2018 to June 2019, up from 475 in the previous year and 482 in the 2017 period.  Ohio had nine of those cases in each of the past two years and six in 2017.  These numbers will likely continue to grow with the recent change made by Congress, as more farmers will qualify for the special protections of Chapter 12.

Posted In: Business and Financial
Tags: bankruptcy
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By: Peggy Kirk Hall, Friday, July 05th, 2019

With many farmers in Ohio unable to plant before the Final Planting Date for crop insurance, questions are arising about planting and harvesting cover crops on those prevented planting acres.  USDA Risk Management Agency (RMA) rules allow operators to plant cover crops on prevented planting acres and to hay, graze, or cut the cover crops for silage after the posted “harvest date.”  In previous years, the harvest date for cover crops was November 1.   If an operator harvested the cover crop before that date, the prevented plant payment would be reduced from 100% to 35%. 

The RMA has changed the harvest date for 2019, however.  In response to reduced livestock feed supplies that will result from the loss of planted acres this year, the RMA has moved up the cover crop harvest date to September 1.  An operator who plants a cover crop after the Final Planting Date and then cuts the crop for forage on or after September 1 can still receive 100% of the prevented plant payment, even if the operator sells the forage and regardless of whether the operator planted the cover crop during or after the Late Planting Period.  The Final Planting Date in Ohio was June 5 for corn and June 20 for soybeans; the Late Planting Period ended on June 20 for corn and runs until July 15 for soybeans.  Note, too, that a cover crop that was in the ground before the Final Planting Date but was not terminated because the operator couldn’t plant the intended corn or soybean crop can also be harvested for forage on or after September 1.

The RMA’s chart below illustrates payment scenarios for cover crops planted and harvested on prevented planting acres.

Cover Crop Planted

Disposition

Pay 100%

Pay 35%

Pay 0%

Before Final Planting Date (FPD) of the Prevented Crop**

Hayed/Grazed/Cut for silage during or before the end of the LPP

X

 

 

Hayed/Grazed/Cut for silage after the LPP, but before Sept 1

 

X*

 

Hayed/Grazed/Cut for silage on or after Sept 1

X

 

 

Harvested for grain or seed at any time

 

 

X

 

During Late Planting Period (LPP) of the Prevented Crop

Hayed/Grazed/Cut for Silage before Sept 1

 

 

X

Hayed/Grazed/Cut for silage on or after Sept 1

X

 

 

Harvested for grain or seed at any time

 

 

X

 

After Late Planting Period of the Prevented Crop

Hayed/Grazed/Cut for silage before Sept 1

 

X

 

Hayed/Grazed/Cut for silage on or after Sept 1

X

 

 

Harvested for grain or seed at any time

 

X*

 

*Provided the crop claimed as a cover crop is not the prevented crop and all other policy provisions are met.

**Example: Fall-Planted Cover Crop; Spring PP Crop

Other requirements for cover crops

While the cover crop harvest date seems pretty straightforward, don’t be fooled--crop insurance provisions can be tricky.  Farmers planning to put out cover crops on prevented plant acres should work closely with their crop insurance agents to ensure that all policy provisions and documentation requirements are met. 

An initial requirement is that the cover crop planted must meet the definition of an “acceptable cover crop” for crop insurance purposes.   The RMA considers an acceptable cover crop as one that is recognized by agricultural experts as agronomically sound for the area for erosion control or other purposes related to conservation or soil improvement and planted at the recommended seeding rate.  OSU agricultural experts can help provide guidance on acceptable cover crops.   

Operators should also be aware that many seed licenses, particularly for bio-engineered seeds, restrict the use of the seed to grain production only.  In those situations, planting the seed for a cover crop or harvesting it for silage would violate the seed licensing contract and create a liability situation for the operator.

Additionally, note that crop insurance provisions prohibit harvesting the cover crop for grain or seed, and an operator who does so will lose all of the prevented plant payment.  The cover crop harvest can also impact other provisions, such as the farm’s Actual Production History (APH) yields.  These and other provisions highlight the importance of a close working arrangement with the crop insurance agent in order to comply with RMA’s cover crop provisions.

For RMA’s guidance on Prevented Planting Flooding, go to this page.  The site contains a comprehensive list of questions and answers on prevented planting, along with information about the 2019 cover crop provisions.   

By: Evin Bachelor, Monday, June 10th, 2019

The biennial budget remains the center of attention for members of the Ohio General Assembly, but some other bills have made progress since our last legislative update.  We will post a separate blog post about the biennial budget soon, but for now here is a review of other legislative activity at the statehouse. 

New legislation since our last legislative update

  • Senate Bill 159, titled “Grant tax credits to assist beginning farmers.”  This bill is essentially the same as House Bill 183, which seeks to provide tax incentives to beginning farmers along with those willing to help them build a farm operation.  Introducing the bill in the Senate while the House considers another bill allows the process to potentially go more quickly.  Instead of waiting on the House to complete all of its committee hearings and approve the bill, the Senate can start its own process.
  • House Bill 223, titled “Alter setback-wind farms of 5 or more megawatts.”  In 2014, the Ohio General Assembly modified the distance that wind turbines must be setback from an adjacent property line.  House Bill 223 would modify the setback law to base the setback on the distance from the nearest habitable residential structure on a neighboring property instead of the property line.  The setback requirement would affect future project certificates, as well as any amendments made to an existing certificate.  Click HERE for more information about the bill from the Ohio General Assembly’s website.

Legislation that we continue to follow

Here’s a status update on bills we covered HERE in March and HERE in April.  Access each bill’s webpage on the Ohio General Assembly website by clicking on the bill number in the following tables. 

 

Legislation passed by the Senate and currently under consideration in the House

Category

Bill No.

Bill Title

Status

Hemp

SB 57

Decriminalize hemp and license hemp cultivator

- Passed Senate

- Passed House Ag & Natural Resources committee

- Awaits vote of the full House of Representatives

Regulations

SB 1

Reduce number of regulatory restrictions

- Passed Senate

- Referred to House State & Local Government Committee

Business Law

SB 21

Allow corporation to become benefit corporation

- Passed Senate

- Referred to House Civil Justice Committee

 

Legislation going through the committee process, but not yet passed in either chamber

Category

Bill No.

Bill Title

Status

Watershed Planning

SB 2

Create state watershed planning structure

- Completed third hearing in Senate Ag & Natural Resources Committee

Tax

HB 183

Allow tax credits to assist beginning farmers

- Completed second hearing in House Ag & Rural Development Committee

Estate Planning

HB 209

Abolish estate by dower

- Completed third hearing in House Civil Justice Committee

Animals

HB 24

Revise humane society law

- Passed House Ag & Rural Development Committee

- Awaits vote of the full House of Representatives

Oil and Gas

HB 55

Require oil and gas royalty statements

- Completed first hearing in House Energy & Natural Resources Committee

Mineral Rights

HB 100

Revise requirements governing abandoned mineral rights

- Completed first hearing in House Energy & Natural Resources Committee

Energy

SB 119

Exempt Ohio from daylight savings time

- Completed first hearing in Senate General Government and Agency Review Committee

Local Gov’t

SB 114

Expand township authority-regulate noise in unincorporated areas

- Completed second hearing in Senate Local Government, Public Safety, & Veterans Affairs Committee

Property

HB 103

Change law relating to land installment contracts

- Completed second hearing in House Civil Justice Committee

Regulation of Alcohol

HB 160

Revise alcoholic ice cream law

- Completed third hearing in House State & Local Government Committee

Regulation of Alcohol

HB 179

Exempt small wineries from retail food establishment licensing

- Completed first hearing in House Health Committee

 

Legislation not on the move

These bills have not made much progress.  The biggest action taken on each so far has been referring the bill to a committee, but no committee has yet to hold a hearing on any of the bills.  Remember that we are in the middle of budget season, and only in the first six months of this legislative cycle, so the bills could still see activity later.

Category

Bill No.

Bill Title

Status

Animals

HB 124

Allow small livestock on residential property

- Referred to House Ag & Rural Development Committee

Animals

HB 33

Establish animal abuse reporting requirements

- Referred to House Criminal Justice Committee

Energy

HB 20

Prohibit homeowner associations placing limits on solar panels

- Referred to House State & Local Government Committee

Local Gov’t

HB 48

Create local government road improvement fund

- Referred to House Finance Committee

Local Gov’t

HB 54

Increase tax revenue allocated to the local government fund

- Referred to House Ways & Means Committee

Oil and Gas

HB 94

Ban taking oil or natural gas from bed of Lake Erie

- Referred to House Energy & Natural Resources Committee

Oil and Gas

HB 95

Revise oil and gas law about brine and well conversions

- Referred to House Energy & Natural Resources Committee

Regulation of Alcohol

HB 181

Promote use of Ohio agricultural goods in alcoholic beverages

- Referred to House Ag & Rural Development Committee

Tax

HB 109

Grant tax exemption for land used for commercial maple syruping

- Referred to House Ways & Means Committee

 

By: Evin Bachelor, Tuesday, May 21st, 2019

A jury recently returned a verdict awarding a California couple $2.055 billion (yes, billion) in damages after the couple alleged that the glyphosate in Roundup caused their cancer.  This is the third California jury to be convinced that the Monsanto herbicide, which was acquired by Bayer last year, caused or substantially contributed to a cancer diagnosis of non-Hodgkin lymphoma.  A lot has happened since we last reported on these lawsuits HERE and HERE, so it is time to look at the glyphosate lawsuits, jury verdicts, and the larger debate.

Thousands of glyphosate lawsuits have been filed against Monsanto/Bayer.  Over 13,000 cases have been filed alleging almost the same thing: that a plaintiff’s cancer was caused by the glyphosate in Roundup.  About two years ago there were only a few hundred such cases.  News stories about large jury verdicts have caught people’s attention, as have commercials that some law firms have aired to find clients for this type of litigation.  The vast majority of these cases have been brought in state courts, which have a reputation for being somewhat quicker than federal courts, but there are still over a thousand in federal courts across the country.  So far, only three of these cases have reached a jury, and all have been in California.

First California jury awarded a plaintiff $289 million.  Dewayne Johnson was a school groundskeeper who routinely used Roundup as part of his job.  He was diagnosed with non-Hodgkin’s lymphoma in 2014, and believed that his diagnosis was a result of at least two prior incidents where he was soaked with Roundup.  His lawsuit against Monsanto in California state court was chosen to be the first case to be tried before a jury because his doctors did not expect him to live for much longer.

The San Francisco jury sided with Mr. Johnson and awarded him $39 million in compensatory damages, and $250 million in punitive damages.  Compensatory damages are meant to directly compensate for harm, and can include medical expenses, lost wages, and emotional distress.  Punitive damages, on the other hand, are meant to punish the party in the wrong and deter a similar course of conduct in the future.  The judge in the case ultimately reduced the punitive damages to match the compensatory damages, leaving Mr. Johnson with a potential $78 million recovery.  However, the decision is on appeal.

Second California jury awarded a plaintiff $80 million.  Edwin Hardeman sprayed Roundup on his property for about three decades.  In 2014, he was diagnosed with non-Hodgkin’s lymphoma, and decided to file a lawsuit two years later after learning about research connecting his form of cancer to Roundup use.  His lawsuit was the first to be heard in federal court.  This San Francisco jury awarded Mr. Hardeman $5.8 million in compensatory damages, and $75 million in punitive damages.  However, the decision is also on appeal.

Third California jury awarded the plaintiffs $2.055 billion.  The first two cases certainly sent shock waves through the news, but the size of this third jury award sent more than just shock.  The plaintiffs, Alva and Alberta Pilliod, are a California couple who were diagnosed with non-Hodgkin’s lymphoma within four years of each other.  The jury awarded the couple $55 million in compensatory damages, along with $1 billion in punitive damages each.  Bayer has promised to appeal this decision as well.

Will the parties ultimately get these punitive damages?  It is hard to answer this question just yet, but it is likely that the punitive damages awards will be reduced.  Courts are often hesitant about awarding punitive damages absent bad intentions by the party being punished, and few verdicts result in a punitive damages award.  When they are awarded, there are constitutional limitations on how large the award can be.  The U.S. Supreme Court has said that a punitive damages award that exceeds a compensatory damages award by more than a single digit multiplier likely violates a party’s due process rights and is not likely to be upheld.  This means that if a punitive damages award exceeds nine or ten times the compensatory damages, courts are to look at that jury’s decision with a high level of suspicion.  However, such an award could ultimately be awarded if the evidence of bad intent merits such an award, and if such award is necessary to deter future bad acts.

Bayer’s first hope on appeal is to have the jury decisions invalidated altogether by arguing that the juries were incorrect in linking these plaintiff’s cancer to their prior use of Roundup.  In order to succeed, it must prove that the decisions of the three juries were against the “manifest weight of the evidence,” meaning that they relied too much on one pile of evidence leaning one way while ignoring a mountain of evidence going the other way.  If it can succeed on this, then it would not have to pay damages to the plaintiffs.  However, this can be a high burden for an appellant to satisfy because of our legal system’s deference to juries.  If Bayer cannot succeed on avoiding fault, it would still argue that the jury awards are excessive.

In the first case, the initial jury award had a single digit multiplier of roughly six; however, the judge viewed even that multiplier as excessive and reduced the punitive damages award to match the compensatory damages award.  In the second case, the initial jury award had a multiplier of over twelve, which could give Bayer a strong argument on appeal if it is ultimately determined that it must pay the plaintiffs.  However, Bayer is also challenging the basis of the jury’s decision on appeal.

The third case is simply on a different level.  The $2 billion in punitive damages is 36 times the compensatory damages awarded to the couple.  The trial judge may respond like the first trial judge and reduce the compensatory damages award; however, that is not a guarantee.  What is likely a guarantee is that Bayer will appeal.

Does glyphosate cause non-Hodgkins lymphoma?  This question will continue to be a debate for years, and we as attorneys are not in the best spot to make any sorts of determinations based on the scientific research.  The U.S. Environmental Protection Agency and a number of scientific studies say no; however, the World Health Organization said in 2015 that glyphosate was “probably carcinogenic to humans.”  It was that announcement, and some research that followed, which triggered the wave of lawsuits we see today.  Bayer is using the first set of research to defend its product, while the plaintiffs are using the second set of research to attack Roundup.  The attorneys in the first three cases tried to undercut Bayer’s use of EPA and university research by arguing Monsanto had influenced the first set of research in a manner favorable to it.

For better or worse, what matters in a jury trial is less what the science says, and more what the jury believes the science says.  So far, three California juries have been convinced that there is enough science to say that glyphosate caused or contributed to the cancer of four plaintiffs.  The first non-California cases are beginning to be scheduled for later this year, including in Monsanto’s former home in St. Louis.  As of now, it remains to be seen whether the first three cases will be the outliers or the norms for the glyphosate litigation nationwide.

By: Ellen Essman, Thursday, April 25th, 2019

A case out of the Fourth Appellate District in Gallia County serves as a lesson for farmers in Ohio who have roadside stands and sell products using the honor system.  This case involves a honey stand owned by Frederick Burdell.  He kept cash in the freezer at his stand so customers could make change for their purchases. The case, State v. Montgomery, was an appeal from the Gallipolis Municipal Court’s conviction of first-degree misdemeanor theft of honey and money from a “self-service honey stand.”

On appeal, the person convicted of theft claimed that the State of Ohio did not have enough evidence to convict her, and that her conviction was against the manifest weight of the evidence.  In other words, she argued that the State did not have enough evidence to prove, beyond a reasonable doubt, that she committed the crime.  The appellate court did not agree with the defendant’s argument; her conviction was upheld.  For owners of roadside stands, the most relevant part of this case may not be the legal arguments, but instead, the evidence that was provided by the owner of the honey stand.  Mr. Burdell’s surveillance setup around the honey stand helped the jury find the defendant to be guilty of theft.  Owners of roadside stands for honey and other agricultural products should take note of the tools Mr. Burdell had in place to surveil his stand, as well as what he might have done to better protect his business from theft. 

The appellate court’s opinion reveals that Mr. Burdell had multiple cameras set up around the honey stand, which were able to capture footage of a car driving down the driveway and a passenger exiting the car.  From another viewpoint, a camera was able to record the defendant taking two items out of the refrigerator and all the cash from the freezer.  Another shot provided a close-up, “head to toe” view of the woman walking away.  What is more, the video captured the actions in color—so the jury was able to see the color of the car and the hair color of the thief.  The appellate court found that the video evidence was sufficient enough for the trial court to reach the decision that the defendant was the perpetrator.

 Owners of roadside stands can learn from Mr. Burdell’s set-up if they want to protect themselves from theft.  Multiple color cameras placed at multiple angles around the area helped Mr. Burdell recover some of his loss from the theft.  Owners may want to test cameras to make sure they are set up at good angles.  In addition, although it is not clear from this opinion whether or not Mr. Burdell had security lights and other lighting around his stand, owners of roadside stands may want to consider the lighting around their premises—inadequate lighting might be detrimental to seeing what is happening in surveillance footage.

 The trial court ultimately awarded Mr. Burdell $20 in restitution for the theft, which was the value of the honey stolen.  Mr. Burdell was not reimbursed for the money that was stolen, apparently because he could “not state…with certainty” how much money was taken from the freezer, instead he guessed it could have been up to $50.  There are certainly numerous tools roadside stand owners can use to keep track of money in their stands more accurately.  Owners can keep detailed records of what products are in their stand at any given time and their prices, so they know exactly how much money should be in the cash box at all times, even after customers make change.  Roadside stand owners can also make sure they or an employee or family member monitors the area around the stand from time to time, counts the cash, and possibly take away excess cash not needed at the site and store it in a safer place.  Essentially, any actions an owner can take to keep track of how much cash is in a stand with more accuracy could prove helpful in recovering stolen cash if they ever find themselves in a situation like Mr. Burdell. 

While the theft from Mr. Burdell’s self-service honey stand was unfortunate, it may serve as a helpful reminder to farmers who own similar honey, produce, or other stands of what they can do to protect their businesses.  It is also timely information as farmers prepare for spring and summer sales from roadside stands.  For those interested in more information on the case, the full opinion is available here

By: Evin Bachelor, Wednesday, April 24th, 2019

Since our last legislative update in March, Ohio’s legislators and staffers have been busy introducing more legislation.  As of this morning, there are 332 bills that have been introduced by members of the Ohio General Assembly since January.  Some have already passed both the Ohio House and Senate, but most are still pending.  While we cannot write about every pending bill, the following bills relate to agricultural, local government, or natural resource law.  In addition to these bills that we have not yet covered, see the end of this post for an update about bills we mentioned in our last blog post.

Tax

  • Senate Bill 183, titled “Allow tax credits to assist beginning farmers.”  Many agricultural news outlets quickly picked up on this bill.  The bill would authorize two nonrefundable tax credits.  One is for beginning farmers who attend a financial management program, while the other is for individuals or businesses that sell or rent farmland, livestock, buildings, or equipment to beginning farmers.  The Ohio Department of Agriculture would be responsible for certifying individuals as beginning farmers and for approving eligible financial management programs.  Click HERE for more information about the bill, and HERE for the current official bill analysis.
  • House Bill 109, titled “Grant tax exemption for land used for commercial maple syruping.”  The bill would exempt “maple forest land” from having to pay property taxes.  The landowner would have to apply for the designation with the Ohio Department of Taxation.  Eligible lands are those lands bearing a stand of maple trees where 1) an average of at least thirty taps are drilled each year into at least fifteen different maple trees per acre of land, 2) the harvested sap is incorporated into a maple product for commercial sale, 3) the land is managed under a forest land maintenance plan, and 4) the property has ten or more acres or the sap harvest produces an average yearly gross income of more than $2,500.  Note that all four requirements must be met in order to qualify as an exempt maple forest land.  Click HERE for more information about the bill.

Real property

  • House Bill 103, titled “Change law relating to land installment contracts.”  Ohio’s Land Installment Contract Law, which applies to contracts involving properties with a residence but not contracts involving only open farmland, would see some significant changes under this proposed legislation.  The bill would shift the burden of paying property taxes and homeowner’s insurance from the buyer to the seller.  The seller would also be prohibited from holding a mortgage on the property.  The contract would have to include provisions stating that the seller is responsible for all repairs and maintenance on the property.  Interest rates would also be capped so that the rate cannot exceed the Treasury bill rate for loans of the same length of time by 2%.  For example, if a 5-year land installment contract is entered into on September 7th and the 5-year Treasury bill rate on that day is 2.64%, the interest rate for the land installment contract would not be able to exceed 4.64% under this bill.  Click HERE for more information about the bill, and HERE for the current official bill analysis.

Estate planning

  • House Bill 209, titled “Abolish estate by dower.”  Dower provides a surviving spouse with rights in any real property owned by a decedent spouse.  This bill would end dower estates moving forward, but any interests that vest before the change would take effect would still be valid.  Click HERE for more information about the bill.

Local government

  • Senate Bill 114, titled “Expand township authority-regulate noise in unincorporated area.”  A board of township trustees is currently limited to regulate noise coming from either areas zoned as residential or premises where a D liquor permit has been issued.  The bill would expand the township’s authority to regulate noise anywhere within the unincorporated territory of the township.  However, the bill does not affect another section of the law that exempts agriculture from noise ordinances, so agricultural activities would not be subject to any new noise ordinances, should this law pass.  Click HERE for more information about the bill, and HERE for the current official bill analysis.
  • Senate Bill 12, titled “Change laws governing traffic law enforcement.”  Notably for townships, this bill would prohibit township law enforcement officers or representatives from using a traffic camera on an interstate highway.  Click HERE for more information about the bill, and HERE for the current official bill analysis.

Regulation of Alcohol

  • House Bill 181, titled “Promote use of Ohio agricultural goods in alcoholic beverages.”  The bill would authorize the Ohio Department of Agriculture to create promotional logos that producers of Ohio craft beer and spirits may display on their products.  Specifically, the bill would authorize an “Ohio Proud Craft Beer” and an “Ohio Proud Craft Spirits promotion.  Click HERE for more information about the bill.
  • House Bill 160, titled “Revised alcoholic ice cream law.”  Under current Ohio law, those wishing to sell ice cream containing alcohol 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 that are authorized to sell alcohol.  Click HERE for more information about the bill.
  • House Bill 179, titled “Exempt small wineries from retail food establishment licensing.”  The bill would exempt small wineries that produce less than 10,000 gallons of wine annually from having to obtain a retail food establishment license in order to sell commercially prepackaged foods.  The sales of the prepackaged foods cannot exceed more than 5% of the winery’s gross annual receipts.  The winery would have to notify the permitting authority that it is exempt, and also notify its customers about its exemption.  Click HERE for more information about the bill.

Energy

  • House Bill 20, titled “Prohibit homeowner associations placing limits on solar panels.”  The bill would prohibit homeowners and neighborhood associations, along with civic and other associations, from imposing unreasonable restrictions on the installation of solar collector systems on roofs or exterior walls under the ownership or exclusive use of a property owner.  Condominium properties would similar be prohibited from imposing unreasonable restrictions where there are no competing uses for the roof or wall space where a solar collector system would be located.  According to the bill analysis, an unreasonable limitation is one that significantly increases the cost or significantly decreases the efficiency of a solar collector system.  Individual unit owners would also have the right to negotiate a solar access easement.  Click HERE or more information about the bill, and HERE for the current official bill analysis.
  • Senate Bill 119, titled “Exempt Ohio from daylight savings time.”  The bill would require Ohio to observe Daylight Savings Time on a permanent basis effective March 8, 2020.  The state’s clocks would spring forward in March, but there would be no falling back in the fall.  Click HERE for more information about the bill, and HERE for the current official bill analysis.

As for the bills that we previously covered in our March legislative update, the following chart explains where those bills stand.  Those that have passed at least one chamber have their passage status underlined in the column on the right.  Those that have had at least one committee hearing list the number of hearings, while those that have not had any activity in committee state only the committee that the bill has been referred to from the floor.

Category

Bill No.

Bill Title

Status

Hemp

SB 57

Decriminalize hemp and license hemp cultivation

- Passed Senate

- Completed first committee hearing in House

Watershed Planning

SB 2

Create state watershed planning structure

- Referred to Senate Agriculture and Natural Resources Committee

Animals

HB 24

Revise humane society law

- Completed third committee hearing in House

Animals

HB 124

Allow small livestock on residential property

- Referred to House Agriculture and Rural Development Committee

Oil and Gas

HB 55

Require oil and gas royalty statements

- Completed first committee hearing in House

Oil and Gas

HB 94

Ban taking oil or natural gas from bed of Lake Erie

- Referred to House Energy and Natural Resources Committee

Oil and Gas

HB 95

Revise oil and gas law about brine and well conversions

- Referred to House Energy and Natural Resources Committee

Mineral Rights

HB 100

Revise requirements governing abandoned mineral rights

- Referred to House Energy and Natural Resources Committee

Regulations

SB 1

Reduce number of regulatory restrictions

- Completed three committee hearings in Senate

Business Law

SB 21

Allow corporation to become benefit corporation

- Passed Senate

- Completed first hearings in two separate House committees

Animals

SB 33

Establish animal abuse reporting requirements

- Completed fifth committee hearing in Senate

Local Gov’t

HB 48

Create local government road improvement fund

- Referred to House Finance Committee

Local Gov’t

HB 54

Increase tax revenue allocated to the local government fund

- Referred to House Ways and Means Committee

Property

HB 74

Prohibit leaving junk watercraft or motor uncovered on property

- Completed first committee hearing in House

By: Peggy Kirk Hall, Wednesday, April 10th, 2019

Written by Evin Bachelor, Law Fellow, OSU Extension Agricultural & Resource Law Program

The United States Department of Agriculture (USDA) announced last week that farmers.gov will now feature two new tools.  One will help farmers navigate the application process for obtaining temporary agricultural workers under H-2A, and the second will help farmers understand and manage their USDA-backed farm loans.  The press release explained that the USDA values the experience of its customers, and that it developed these tools after hearing feedback on the need for simple, technology based resources to help farmers.  Unveiled in 2018, farmers.gov allows users to apply for USDA programs, process transactions, and manage their accounts.

Customized H-2A checklists based on the needs of an individual farmer

Many farmers need seasonal or temporary workers for planting, cultivating, and harvesting crops.  The seasonal nature of agriculture can make it difficult for farmers to find an adequate supply of domestic labor willing to fill the temporary positions.  To relieve this difficulty, the federal government created the H-2A temporary agricultural worker program to allow these farmers to hire workers from foreign countries to supplement the domestic labor market on a temporary or seasonal basis.  Farmers must demonstrate that there are not enough U.S. workers able, willing, qualified, and available for the temporary work, and that the H-2A workers will not result in reduced wages for other U.S. workers.

Understanding the H-2A process has long been complex and confusing, but a new tool focused on education for smaller producers includes a revamped website and an interactive checklist tool.  The new website explains the basics of the program, includes an interactive checklist tool to create custom checklists, and gives an estimate of the costs of hiring H-2A workers.

The interactive checklist tool is a helpful way for producers to learn about the steps they need to take to obtain the labor that they need.  In the past, websites would rely heavily on producers to sift through information and determine the requirements that they needed to follow.  Now, the interactive tool asks questions one at a time to generate a custom checklist. 

When using the tool, producers will first be asked whether this will be their first time hiring workers using the H-2A Visa Program.  If the producer answers yes, they will be asked when they need the labor.  If the producer answers no to the first question, they will be asked whether they are extending the contract of workers that they are currently employing.  Ultimately, the producer will be asked when they need the labor.  At the end of the questions, the tool will provide a checklist that the producer will use to determine what steps he or she needs to take to obtain H-2A labor.  The checklists are designed to be easy to understand and to make the process less confusing.

View information about your USDA-backed farm loan online

The USDA offers farm ownership and operating loans through the Farm Services Agency to family-size farmers and ranchers who cannot obtain commercial credit.  Farmers.gov now allows producers to view information about these USDA-backed farm loans through a secure online account.  Producers can view loan information, history, and payments from a desktop computer, tablet, or smartphone.  Producers will need to sign up for a USDA online account in order to create an account profile with a password.

At this time, the program only allows producers doing business on their own behalf as individuals to view this information through farmers.gov.  Other entities such as LLCs and trusts or producers acting on behalf of another cannot utilize this tool yet, although the USDA indicates that this is planned for in the future.

The USDA’s press release made clear that the addition of these tools represents a step toward providing better customer service and increased transparency.  As only a step, producers can expect more tools and features to be added to farmers.gov in the future.  As this happens, we will be sure to keep you up to date about the website’s new bells and whistles.

Posted In: Business and Financial, Labor
Tags: USDA, H-2A, labor law, USDA loans
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