Property

You may have been involved in or known someone that was involved in an eminent domain dispute with a utility company or other state agency.  When the government tries to take an individual’s property, emotions are understandably heightened.  In Ohio, state agencies and other specific entities – like a public utility company – can appropriate or “take” a person’s property, but only if the taking is necessary and for a public use.  If the government or governmental agency does appropriate a landowner’s property, then the landowner is entitled to compensation for the taking.  

In the case below, a group of landowners disputed a power company’s ability to appropriate their property and the ability of the power company to assume it is entitled to an appropriation simply because a project for public use was approved by state authorities.  The landowners also sought to clarify when a landowner is entitled to recover the costs associated with defending their property interests against an attempted appropriation by the state or state agency.

Ohio Power Company v. Burns, et al. 

In 2017, the Ohio Power Board of Directors (“Ohio Power Board”) gave initial approval for a project located in Marietta, Ohio to enhance the electric transmission network (the “Project”).  The Project included miles of new transmission lines and required siting, rights of ways, and some property purchases.  In 2018 the Ohio Siting Board (“Siting Board”) issued a certificate of environmental compatibility and public need for the Project.  In 2019, the Project was given final approval by the Ohio Power Board.  

After failed easement negotiations, the Ohio Power Company (Plaintiff) filed petitions for appropriation against several landowners (“Defendants”) to take easements on the Defendants’ property.  As required by Ohio law, the trial court held a hearing on the appropriation petitions (the “Appropriation Proceedings”).  Plaintiff argued that it currently possesses an easement across the property of each Defendant, but it was seeking to replace the existing easement with a new, wider easement for the Project.  Plaintiff claimed that the new easements were necessary for a public good and that the Siting Board recognized the necessity of the Project and of acquiring easements, rights of way, and other interests in property along the new power line. 

Defendants, however, responded by saying that the Siting Board declared the Project a necessity, not the appropriations.  Further, Defendants argued that the easements sought by Plaintiff were overly broad and that the terms of the proposed easements went beyond the necessity to promote the public use. Lastly, Defendants claimed that when Plaintiff was ordered to remove distribution line rights from its appropriation petition, Plaintiff voluntarily abandoned its appropriation which required the trial court to enter a judgement against Plaintiff for the costs associated with defending against the distribution line rights contained within the proposed easements.

The trial court determined that the Siting Board’s certification of the Project and the testimony presented at the hearing established that the appropriations were necessary under Ohio law.  Additionally, the trial court found that even if the Siting Board’s certificate did not create an irrebuttable presumption, the appropriations were still necessary because Plaintiff, as a public utility company, is in the best position to determine what is necessary and what is not. The trial court also held that Plaintiff did not abandon the appropriations simply by removing certain provisions from the petitions.  Defendants then appealed to the 4th District Court of Appeals.

The following is brief explanation of the 4th District’s opinion that both agreed and disagreed with the trial court. 

Rebuttable and irrebuttable presumption

Normally under Ohio law, a public utility company, like the Plaintiff, has to prove that it has the right to make an appropriation and/or that the appropriation is necessary.  Plaintiff can do this by presenting evidence at an appropriation hearing and if the judge is persuaded, then Plaintiff will be allowed to take the property. The important part is that the burden of proof is on the public utility company.  

However, there are a few situations where the law assumes that a public utility company or other state agency has the right to make an appropriation.  Further, those presumptions are either rebuttable or irrebuttable.  If the state agency has a rebuttable presumption, then the law will assume that agency has the right to make the appropriation or that the appropriation is necessary unless another party, like a landowner, can prove otherwise.  In these situations, the burden of proof switches from the state agency to the landowner to prove that the state agency does not have the right to an appropriation or that the appropriation is not necessary.  A state agency gets a rebuttable presumption when:

1. A resolution or ordinance of the governing or controlling body, council, or board of the agency declares the necessity for the appropriation; or 
2. The public utility company presents evidence of the necessity for the appropriation. 

A public utility company can also get an irrebuttable presumption about its right to an appropriation or the necessity of an appropriation.  This means that no evidence can be presented to prove that the state agency does not have the right to an appropriation or that the appropriation is not necessary.  A state agency receives an irrebuttable presumption when it receives approval by a state or federal regulatory authority of an appropriation.

In this case, the Defendants claimed that the Siting Board, which is a state regulatory authority, and the Ohio Power Board, the board of the agency, approved the project, not the appropriation. Therefore, Defendants argued that the rebuttable or irrebuttable presumptions did not apply to Plaintiff.  Plaintiff on the other hand thought that both the rebuttable presumption and the irrebuttable presumption applied, and because the irrebuttable presumption applied, Plaintiff argued that the trial court did not need to review the easements. Plaintiff maintained judicial review of the easements was not necessary because a jury would decide the scope of the easement at a compensation hearing for the taking. 

The trial court agreed with the Plaintiff and found that Plaintiff was entitled to an irrebuttable presumption of the necessity for the appropriation because of the Siting Board certification. Additionally, the trial court also found that Plaintiff was entitled to a rebuttable presumption because the Ohio Power Board declared the necessity for the appropriation of property interests for the Project. 

However, the appeals court disagreed.  The 4th District noted that the Plaintiff’s argument ultimately allows it to “take whatever property rights it wants. . .”  and the only constraint on Plaintiff’s power to take would be how much a jury determines Plaintiff must pay for the taking. The appellate court found Defendants’ argument to be persuasive.  The appellate court held that because the Siting Board and the Ohio Power Board only approved the project and not the specific appropriations at issue in this case, Plaintiff was not entitled to either a rebuttable or irrebuttable presumption.  Although the Ohio Power Board recognized “the necessity of acquiring easements or rights of way in connection with” the project, the board only recognized such a necessity in a broad sense.  The appellate court held that specific appropriations must be reviewed and approved before a state agency is entitled to the rebuttable or irrebuttable presumption under Ohio law. 

Deference

The Defendants also argued that the trial court erred when it did not review the proposed easements.  The trial court found that the Plaintiff is in the best position to determine the necessity of the easements.  The trial court, therefore, did not review the proposed easments and defered to the expertise of the Plaintiff to determine the legality of the easements.  Additionally, the court deferred any issues regarding the scope of the easements to a jury at the future compensation hearing.    

The court of appeals disagreed with the trial court and held that the trial court should have reviewed the easements and should have made a separate necessity finding as to each one.  The 4th District determined that courts are required to engage in the review of easements under Ohio law to make sure that (1) the state is not taking more property than necessary; and that the state is acting (2) fairly; (3) without bad faith; (4) without pretext; (5) without discrimination; and (6) without improper purpose.  The appeals court reasoned that a trial court’s role is a critical constitutional check on the state’s power.  The appellate court noted that it is a trial court’s duty to determine the extent of the taking and a jury’s duty to determine the amount of damages owed to a landowner as a result of the taking. 

Abandonment

Another issue in this case was whether Plaintiff “abandoned” its appropriation for distribution lines.  If Plaintiff was found to have abandoned its appropriation, then Defendants would be entitled to fees and other costs associated with defending their property interest. 

In its initial appropriation petition, Plaintiff included an appropriation for distribution lines across the Defendants’ properties.  However, during the appropriation hearing, Plaintiff conceded that it did not need an appropriation for distribution lines and only included the distribution line rights in its appropriation petition just in case it was needed.  Plaintiffs admitted that their proposed easement was broader in scope than necessary, and the trial court ordered that Plaintiff remove the distribution line rights from its petitions. However, the trial court did not find that Plaintiff abandoned its appropriation for distribution lines and did not award Defendants any fees and costs for the alleged abandonment.  

On appeal, Defendants argued that the trial court was wrong for not entering a judgment against the Plaintiff for fees and costs associated with defending against the appropriation for distribution lines. Plaintiff claimed that it did not abandon its petition because it essentially amended its petition, it didn’t drop its petition entirely. The trial court agreed with Plaintiff, reasoning that removing the word “distribution” from Plaintiff’s petition did not amount to an abandonment.  

The court of appeals agreed with the trial court that Plaintiff did not abandon its appropriation petition but still found that Defendants were entitled to recover costs associated with defending their property interests.  The 4th district found three scenarios when a landowner would be entitled to the costs associated with defending its property interest against a taking. Those three scenarios are: 

1. When an agency, like a public utilities company, voluntarily abandons the appropriation proceedings; 
2. When a trial court determines that the appropriation is not necessary or not for public use; and 
3. When a trial court determines, at any time during the appropriation proceedings, that the agency is not entitled to appropriate “particular property.” 

Defendants argued that the court ordering Plaintiff to remove the distribution line rights from its petition constituted a voluntary abandonment under scenario 1.  However, the 4th District found that Plaintiff could have only voluntarily abandoned the appropriation proceedings before the trial court’s order. The appellate court reasoned that the voluntary part of scenario 1 is absent once a court orders a party to remove an appropriation from its petition. The 4th District also found that scenario 2 did not apply to this case either.  According to the appellate court, the trial court must dismiss the entire matter because the appropriations are not necessary or not for public use.  Because that did not happen in this case, the 4th District determined that Defendants cannot recover costs under scenario 2. 

Under scenario 3, however, the 4th District did find that Defendants were entitled to costs for defending against the distribution line rights in Plaintiff’s petition.  In this scenario, an agency can bring appropriation proceedings for various parcels, property rights, or other property interests.  Understanding that different rights can be disputed, the appellate court found that if a court determines an agency is not entitled to appropriate “particular property”, or in other words take a particular property interest, then the agency must reimburse the landowner for its costs and fees associated with defending that property interest.  The 4th District determined that because the trial court ordered the Plaintiff to remove the distribution line rights from its petition, the trial court determined that the Plaintiff is not entitled to appropriate the “particular property” – or in this case, the distribution line rights.  Therefore, the 4th District determined that Plaintiff must be ordered to pay Defendants for the costs associated with defending against the distribution line rights.  

Conclusion

Although this ruling doesn’t dramatically change Ohio law, it helps clarify the requirements and procedures that must be followed when a state agency petitions for an appropriation.  This ruling will be closely reviewed by public utility companies and other state agencies to ensure that they have all the required approvals before filing any petition for future appropriations.  View the 4th District’s opinion for more details. 

Did you know that elephants can’t jump?  In fact, it’s impossible for elephants to jump because, unlike most mammals, the bones in an elephant’s leg are all pointed downwards, which eliminates the “spring” required to push off the ground.  

Unlike elephants, we have jumped all over the place to bring you this week’s Ag Law Harvest.  Below you will find agricultural and resource law issues that include, among other things, conspiracy, preemption, succession planning support, ag spending and disaster relief, and Ohio’s broadband and salmon expansion. 

Poultry price fixing conspiracy.  According to a press release from the Department of Justice (“DOJ”) a federal grand jury has decided to indict Koch Foods and four former executives of Pilgrim’s Pride for allegedly engaging in a nationwide conspiracy to fix prices and rig bids for broiler chicken products.  These indictments combine to make a total of 14 individuals charged in the conspiracy that allegedly started in 2012 and lasted until 2019.  The indictments allege that the defendants and co-conspirators conspired to suppress and eliminate competition for sales of broiler chicken products sold to grocers and restaurants.  The DOJ reiterated its commitment to prosecuting price fixing and antitrust violations.  These indictments come on the heels of President Biden’s Executive Order seeking to promote competition within the American Economy, which focused heavily on the agriculture industry.  In addition to Koch Foods, additional companies have been indicted in the conspiracy.  So far, Claxton Poultry and Pilgrim’s Pride have both been indicted in the conspiracy with Pilgrim’s Pride agreeing to pay a $107 million fine.  Koch Foods denies any involvement in the price fixing scheme.  

FIFRA giving Monsanto a little relief.  About a week before the trial of another lawsuit against the Monsanto Company (“Monsanto”) and its Roundup products, a California judge dismissed some of the claims filed by the plaintiff.  According to the judge, some of the claims asserted by the plaintiff were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) and therefore could not be pursued.  The plaintiff claimed that Monsanto had a state-law duty to warn that Roundup causes cancer.  The judge noted that under FIFRA, a state cannot impose or continue to impose any requirement that is “in addition to or different from” those required by FIFRA.  At the time, federal regulations did not require Monsanto to place a cancer warning on its Roundup products.  The judge reasoned that since federal law is supreme (i.e. preempts state law) California cannot impose a state-law duty on Monsanto to warn that Roundup causes cancer.  The judge, therefore, found that the plaintiff cannot pursue her claims against Monsanto for failure to warn under California law.  This ruling is in contrast to a recent 9th Circuit Court of Appeals decision which concluded that the failure to warn claims brought by the plaintiff in that suit were not preempted by FIFRA.  Plaintiff has time to appeal the judge’s decision, even beyond the start of the trial and could rely on the 9th Circuit’s opinion to help her argue that her claims should not have been dismissed.

Competitive loans now available for land ownership issues and succession planning.  The USDA announced that it will be providing $67 million in competitive loans through the new Heirs’ Property Relending Program (“HPRP”).  The HPRP seeks to help agricultural producers and landowners resolve land ownership and succession issues.  Lenders can apply for loans up to $5 million at 1% interest through the Farm Service Agency (“FSA”) once the two-month signup window opens in late August.  Once the lenders are selected, heirs can apply to those lenders for assistance.  Heirs may use the loans to resolve title issues by financing the purchase or consolidation of property interests and for costs associated with a succession plan.  These costs can include buying out fractional interests of other heirs, closing costs, appraisals, title searches, surveys, preparing documents, other legal services.  Lenders will only make loans to heirs who: (1) look to resolve ownership and succession of a farm owned by multiple owners; (2) are a family member or heir-at-law related by blood or marriage to the previous owner; and (3) agree to complete a succession plan.  The USDA has stated that more information on how heirs can borrow from lenders under the HPRP will be available in the coming months.  For more information on HPRP visit https://www.farmers.gov/heirs/relending.  

House Ag Committee approves disaster relief bill.  The House Agriculture Committee approved an $8.5 billion disaster relief bill to extend the Wildfire and Hurricane Indemnity Program (“WHIP”).  The bill, known as the 2020 WHIP+ Reauthorization Act, provides relief for producers for 2020 and 2021 related to losses from the ongoing drought in the western half of the United States, the polar vortex that hit Texas earlier this year, wildfires that tainted California wine grapes with smoke, and power outages, like the one seen during the polar vortex in Texas, which caused dairy farmers to dump milk.  The bill makes it easier for farmers to recover for losses related to drought, now only requiring a D2 (severe) designation for eight consecutive weeks as well as allowing disaster relief payments for losses related to power outages that result from a qualified disaster event.  With the Committee’s approval the bill makes its way to the house floor for a debate/vote.  Whether it’s a standalone bill or a bill that is incorporated into an appropriations bill or a year-end spending measure remains to be seen.  

Senate Appropriations Committee approves ag spending bill.  The Senate Appropriations Committee voted in favor of a fiscal year 2022 spending bill for the USDA and FDA that includes about $7 billion in disaster relief and $700 million for rural broadband expansion.  The Committee approved $25.9 billion for the FY2022 ag spending bill, which is an increase of $2.46 billion from the current year.  In addition to disaster relief funds and rural broadband, the bill increases research funding to the USDA, increass funding for conservation and climate smart agricultural practices, and increases funding for rural development including infrastructure such as water and sewer systems and an increase in funding to transition rural America to renewable energy.  The ag spending bill is now set for debate and vote by the full Senate. 

Ohio to be the second site for AquaBounty’s genetically engineered salmon.  Land-based aquaculture company AquaBounty has selected Pioneer, Ohio as the location for its large-scale farm for AquaBounty’s genetically engineered salmon.  The new farm will be AquaBounty’s first large-scale commercial facility and expects to bring over 100 jobs to northwestern Ohio.  According to AquaBounty’s press release, the plan for the new farm is still contingent on approval of state and local economic incentives.  Ohio is still finalizing a package of economic incentives for the new location and AquaBounty hopes to begin construction on the new facility by the end of the year.  AquaBounty has modified a single part of the salmon’s DNA that causes them to grow faster in early development.  It raises its fish in what it calls “Recirculating Aquaculture Systems,” which are indoor facilities that are designed to prevent disease and protect wild fish populations.  According to AquaBounty, its production methods offer a reduced carbon footprint and no risk of pollution of marine ecosystems as compared to traditional salmon farming.  AquaBounty anticipates commercial production to begin in 2023. 

DeWine orders adoption of emergency rules to speed up the deployment of broadband in Ohio. Governor Mike DeWine signed an executive order which will help speed up the launch of the Ohio Residential Broadband Expansion Grant Program (the “Program”) which was recently signed into law by Governor DeWine.  The Program is Ohio’s first-ever residential broadband expansion program which grants the Broadband Program Expansion Authority the power to review and award Program grant money for eligible projects.  The Program requires a weighted scoring system to evaluate and select applications for Program grants.  Applications must be prioritized for unserved areas and areas located within distressed areas as defined under the Urban and Rural Initiative Grant Program.  The Program hopes to provide high-speed internet to Ohio residences that do not currently have access to such services.  With DeWine’s executive order, the Program can start immediately rather than waiting until the lengthy administrative rule making process is complete.  Normally, rules by a state agency must go through a long, drawn out process to ensure the public has had its input on any proposed rules and those affected the most can challenge or argue to amend the rules.  However, the Governor does have the ability to suspend the normal rule making process when an emergency exists requiring the immediate adoption of rules.  According to Governor DeWine’s executive order, the COVID-19 pandemic, the increase in telework, remote learning, and telehealth services have created an emergency that allows DeWine to suspend the normal rule making process to allow the Program to be enacted without delay.  Although emergency rules are in place, they are only valid for 120 days.  New, permanent rules must be enacted through the normal rule making procedure.  

Perhaps it’s an overused phrase but “sometimes you win, sometimes you lose” has relevance to agriculture lately.  It’s a fitting response to several new decisions from the federal courts.  Some of the decisions align with positions advocated by agricultural interests but others do not.  We wrote last week about a case in the “sometimes you lose” category--the Court’s ruling in favor of small refineries claiming exemptions from renewable fuels mandates.  Several members of Congress have already proposed legislation that would nullify the Court’s decision in that case.  A second loss came with a challenge to California’s animal welfare standards and a third with the court striking down a waiver of E15 ethanol blends.  The sole win came with a challenge to a California statute allowing union organizing activities on private property.  Here’s a summary.

California Proposition 12 – North American Meat Institute v. Bonta

The U.S. Supreme Court announced that it would not grant certiorari and review a decision by the Ninth Circuit Court of Appeals’ on California Proposition 12.  Voters approved Proposition 12, the “Prevention of Cruelty to Farm Animals Act,” in 2018.  The Act establishes housing standards for egg-laying hens, breeding hogs and veal calves and prohibits the confinement of animals in spaces that don’t meet the standards.  Business owners and operators in California may not sell meat or egg products from animals that are not confined according to the standards.  Standards for calves (43 square feet) and egg laying hens (1 square foot) became effective in 2020 while standards for breeding pigs and their offspring (24 square feet) and cage-free provisions for egg laying hens are to be effective beginning January 1, 2022.

The North American Meat Institute (NAMI) sought a preliminary injunction against Proposition 12 in 2019, arguing that it violates the Interstate Commerce Clause of the U.S. Constitution, which grants only Congress the authority to regulate commerce among the states.  NAMI claimed that the Act establishes a “protectionist trade barrier” that would protect California producers from out-of-state competition and control conduct outside of its state borders. 

Both the federal District Court and the Ninth Circuit Court of Appeals disagreed with NAMI.   The appellate court affirmed the District Court’s conclusions that Proposition 12 is not discriminatory on its face and does not have a discriminatory purpose or effect, as there was no evidence that the state had a protectionist intent and the Act treats in-state and out-of-state producers the same.  Nor does the Act try to directly regulate out-of-state conduct or impose burdens on out-of-state producers, but instead only precludes sale of meats resulting from certain practices, the courts concluded.  The federal government and 20 states joined NAMI in a request for a rehearing of the case by the full panel of judges on the Ninth Circuit but were unsuccessful.

NAMI turned to the U.S. Supreme Court, seeking a review of the case on the basis that the Ninth Circuit’s decision conflicts with holdings by other appellate courts and the U.S. Supreme Court.  The Supreme Court denied the request for review on June 28, offering no explanation for its decision.  The legal challenges to Proposition 12 do not end with that denial, however.  A separate case filed by the National Pork Producers Association and American Farm Bureau Federation is pending before the Ninth Circuit Court of Appeals.  It also argues that Proposition 12 negatively impacts interstate commerce and will increase consumer costs for pork and that the federal district court judge who dismissed the case failed to examine the practical effects the law would have on producers.  The Ninth Circuit heard the appeal in April, so we may see a decision in the next few months.

E15 waiver:  American Fuel & Petrochemical Manufacturers v. EPA

The D.C. Circuit Court of Appeals held in favor of a claim by the American Fuel and Petrochemical Manufacturers (AFPM) challenging a Trump Administration rule in 2019 that waived restrictions on summer sales of E15 due to higher fuel volatility in summer temperatures.  The decision could mean that current sales of E15 must end unless further legal challenges follow.

The 2019 Reid Vapor Pressure (RVP) waiver for E15 allowed fuel stations to sell 15% ethanol blends during the summer months rather than limiting those sales to 10% ethanol, a move that would increase ethanol sales.   As expected, the oil and gas refining industry responded to the waiver issuance with a legal challenge, arguing that the administration lacked the authority to grant the RVP waiver for fuels over 10% ethanol. 

The volatility waiver authority derives from the Clean Air Act, which establishes when the EPA may alter volatility limits through the waiver process and specifically allows the EPA to grant an ethanol waiver for “fuel blends containing gasoline and 10 percent denatured anhydrous ethanol” in Section 745(h)(4).  The EPA relied upon the ethanol waiver language in the Clean Air Act back in 1992 to waive volatility standards for E10.  But whether the EPA could use the Clean Air Act language to issue a waiver for ethanol beyond 10 percent is the question at the heart of the dispute.  The EPA and intervenors in the case representing biofuel interests claimed the language was ambiguous enough to allow the EPA to grant waivers for fuel with 10% ethanol or more.

In a unanimous decision, the Court of Appeals concluded that “the text, structure, and legislative history” of the Clean Air Act do not allow EPA to extend a waiver to E15.  The court found the statutory language straightforward, lacking any modifiers that would establish a range of ethanol blends rather than the 10 percent stated in the statute.  Legislative actions at the time also supported an interpretation that the 10 percent language addressed E10 and not ethanol blends in excess of 10 percent. 

The next critical question for this case is what the Biden Administration EPA will do with case and the E15 waiver.  A request for further review of the D.C. Circuit’s opinion is possible.  Or perhaps the EPA will pursue a legislative fix that increases the statutory reference from 10 percent to 15 percent ethanol.  And it’s always possible that no further action will occur and E15 summer sales will no longer be an option.

Union organizer access as a taking – Cedar Point Nursery v Hassid

In the “win” column for agricultural employers is a case that asks whether a state regulation granting access to private property for union activities is a “taking” of property under the Constitution.  The U.S. Supreme Court’s answer to the question is “yes,” although three of the Justices dissented from the majority opinion. 

A regulation formed under the California Agricultural Labor Relations Act of 1975 gives labor organizations a “right to take access” to an agricultural employer’s property “for the purpose of meeting and talking with employees and soliciting their support.”  The regulation requires agricultural employers to allow union organizers to be on the property up to three hours per day and four 30-day periods per year but cannot be “disruptive” and must provide written notice to employers.   An employer who interferes with the organizers can be subject to sanctions. 

After representatives from United Farm Workers accessed Cedar Point Nursery and engaged in disruptive conduct and sought to access Fowler Packing Company, both occasions without notice to the employers, the companies filed a lawsuit seeking an injunction from the federal District Court.  They argued that the regulation was a physical taking of their properties because it granted an easement to the union organizers, which required compensation under the Fifth and Fourteenth amendments of U.S. Constitution.

The District Court did not grant the injunction and held that the regulation is not a physical taking because it doesn’t allow the public a permanent and continuous right of access to the property for any reason.  The Ninth Circuit Court of Appeals affirmed that decision, agreeing that it wasn’t a physical taking, but a strong dissent argued that the union activities were a physical occupation and taking of property.  The agricultural companies sought but were denied a hearing before all of the Ninth Circuit judges, leading to a request for review granted by the U.S. Supreme Court.

The majority of the Justices concluded that the California regulation is a physical taking because it grants union organizers a right to invade an agricultural employer’s property.  Particularly important to the majority was the regulation’s removal of an owner’s right to exclude people from their private property, which is a “fundamental element” of property rights according to the Court.  The Court rejected the argument that the access must be continuous and permanent to be a physical taking and dispensed with claims that the holding could endanger regulations that allow government entries onto private land.  The Court’s holding was clear:  the access regulation amounts to simple appropriation of private property.

Read the court opinions in these three cases here:

Ninth Circuit’s Opinion North American Meat Institute v. Becerra/Bonta

American Fuel & Petrochemical Manufacturers v. EPA

Cedar Point Nursery v. Hassid

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.