Valentine’s Day was indeed a sweet day for Bader Farms, a peach farm in Missouri that claimed that dicamba products by Monsanto/Bayer and BASF drifted onto its property and injured 20,000 of its peach trees over 700 acres. A federal jury agreed and awarded the farm $15 million in compensatory damages. The following day, the jury gave the farm another $250 million in punitive damages against Bayer and BASF, bringing the total award to $265 million.
In 2016, Bader Farms was the first to file a dicamba drift lawsuit against Monsanto. A summary of the lawsuit from our partner, the National Agricultural Law Center, explains that the farm’s claim alleged widespread damage to the peach orchards and a multi-million dollar financial loss. At the center of Bader Farms’ original complaint was Monsanto’s genetically modified Roundup Ready 2 Xtend soybeans and Bollgard II Xtend cotton seeds (“Xtend crops”), dicamba-resistant seeds that Bader Farms alleged were released without an accompanying EPA-approved dicamba herbicide in 2015 and 2016. The farm argued that by selling the Xtend crop seeds without a corresponding herbicide, it was foreseeable to Monsanto that farmers would use old, highly volatile, drift-prone dicamba that had a strong chance of damaging neighboring crops.
Bader Farms later added BASF as a defendant to the case and also added new complaints for dicamba-related damage it suffered during the 2017 growing season. Bader Farms stated that Monsanto and BASF had worked together to manufacture, market, and sell dicamba-based products that they knew would cause harm.
The jury in the federal lawsuit ruled in favor of Bader Farms on all counts. Specifically, the jury concluded that Monsanto was negligent by releasing dicamba-tolerant seeds before releasing the herbicide. The jury also determined that both Monsanto and BASF were negligent because they issued new dicamba products that drifted off-target although the companies claimed that the products were less likely to drift. Important to the punitive damage award, the jury found that Monsanto and BASF had engaged in a “conspiracy to create an ecological disaster to increase profits.”
The Bader Farms case is the first of many dicamba-based cases against Monsanto/Bayer and BASF, combined last year into Multi-District Litigation involving both a Crop Damage Class Action Master Complaint and a Master Antitrust Action Complaint. For an excellent review of the dicamba cases, see the National Agricultural Law Center’s series on “The Deal with Dicamba,” available at https://nationalaglawcenter.org/the-deal-with-dicamba-part-three/.
Written by: Evin Bachelor, Law Fellow, and Ellen Essman, Sr. Research Associate
We’re back from the American Agricultural Law Association’s 2018 symposium, which was held in Portland, Oregon this year. We had the chance to hear from lawyers and experts from across the nation on various legal issues facing agriculture. Stay tuned to the Ag Law Blog for an update on what we learned at the symposium, but first, here’s the latest in agricultural law news:
Vote to designate watersheds in distress tabled by Ohio Soil and Water Conservation Commission. As recently reported in the Ag Law Blog, the Ohio Soil and Water Conservation Commission held a meeting this week to discuss whether to designate certain sub-watersheds in the Western Lake Erie Basin as “in distress.” Such designation would trigger additional management and reporting requirements on farmers in affected watersheds. The Commission voted 4-3 to table the discussion and wait for the Joint Committee on Agency Rule Review (JCARR) to examine the Ohio Department of Agriculture’s proposed rule changes next month. This week’s vote maintains the status quo without extending the “in distress” designation to other watersheds.
FDA releases two FSMA draft guidance documents. The Food and Drug Administration recently released draft guidance documents explaining how to follow rules under the Food Safety Modernization Act (FSMA). One document, titled “Guide to Minimize Food Safety Hazards of Fresh-cut Produce,” provides guidance on how to follow the Preventive Controls Rule under FSMA. “Fresh-cut produce,” is defined as “any fresh fruit or vegetable or combination thereof that has been physically altered from its whole state after being harvested from the field without additional processing.” The guidance would affect manufacturers, processors, packers, and holders of fresh-cut produce. The document covers current good manufacturing practices, as well as “new requirements for hazard analysis and risk-based preventive controls.” The draft guidance document, in addition to information on how to submit a comment on the guidance, is available here.
The second draft guidance document is titled “Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption: Guidance for Industry.” This document provides guidance on how to follow FSMA’s Produce Safety Rule. The guidance would affect produce farms. The guidance covers personnel qualifications and training, health and hygiene practices, biological soil amendments, contamination from domesticated and wild animals, suggestions for practices during the growing, harvesting, packing, and holding of produce, sanitation of equipment, recordkeeping on produce farms, and other topics. According to a press release about the two guidance documents, FDA will be holding a series of four public meetings at various places around the U.S. to discuss the second draft guidance document with those affected. FDA will be announcing the details about the meetings in the Federal Register soon.
It is important to remember that these are draft guidance documents. Furthermore, guidance documents are just that—guidance. In other words, the documents are there as suggestions on how to follow rules, and “do not establish legally enforceable responsibilities.”
EPA renews dicamba registration for cotton and soybeans, and updates labels. On October 31, 2018, the United States Environmental Protection Agency (EPA) shared its decision on changes to applying dicamba, the much discussed herbicide. EPA renewed the herbicide’s registration until December 20, 2020 for application to growing (what EPA terms “over-the-top”) dicamba-resistant cotton and soybean plants.
Below is EPA’s list of label alterations to dicamba products for the 2019-2020 growing season:
- Two-year registration (until December 20, 2020)
- Only certified applicators may apply dicamba over the top (those working under the supervision of a certified applicator may no longer make applications)
- Prohibit over-the-top application of dicamba on soybeans 45 days after planting and cotton 60 days after planting
- For cotton, limit the number of over-the-top applications from 4 to 2 (soybeans remain at 2 OTT applications)
- Applications will be allowed only from 1 hour after sunrise to 2 hours before sunset
- In counties where endangered species may exist, the downwind buffer will remain at 110 feet and there will be a new 57-foot buffer around the other sides of the field (the 110-foot downwind buffer applies to all applications, not just in counties where endangered species may exist)
- Clarify training period for 2019 and beyond, ensuring consistency across all three products (Xtendimax with Vapor Grip Technology, Engenia Herbicide, DuPont FeXapan Herbicide)
- Enhanced tank clean out instructions for the entire system
- Enhanced label to improve applicator awareness on the impact of low pH’s on the potential volatility of dicamba
- Label clean up and consistency to improve compliance and enforceability
Judge reduces jury verdict against Bayer’s Monsanto. As we predicted in a previous edition of The Harvest, Bayer’s Monsanto quickly challenged a quarter billion dollar verdict granted by a San Francisco jury to a plaintiff who alleged that Monsanto’s Roundup weed killer caused his cancer. Monsanto asked the judge to reconsider the jury’s verdict, and on Monday, October 22nd, the judge reduced the punitive damages portion of the jury verdict from $250 million to $39.25 million. The judge accepted the jury’s finding that Monsanto acted with malice, but said that the evidence did not justify a quarter billion dollar award. The judge did uphold the $39.25 million compensatory damages verdict. In total, the plaintiff would receive a $78.5 million award. Just this week, the plaintiff accepted the reduction in the award, saying that he will not ask the judge to reconsider the decision on damages. However, the litigation seems likely to continue, so stay tuned to the Ag Law Blog for more updates about the glyphosate and Roundup lawsuits.
Blockchain: the future of information sharing? We keep hearing about Blockchain technology, but what is it? Blockchain is a digital system that allows users to securely transfer information and money without an intermediary to facilitate the transfer. The transfers are recorded and timestamped, and the information contained in the “blocks” cannot be modified without the agreement of a majority of network users. The system is decentralized in nature, meaning that the information is not stored in one location but is rather is stored on servers across the globe. This makes the system more secure and less prone to modification because no single user can control the blockchain. Its early uses were for digital cryptocurrencies like Bitcoin, but its uses have expanded into information. The system has a potential in almost every sector of the economy, agriculture included. For example, Walmart announced plans to utilize blockchain to quickly track products like produce all the way from the ground to the consumer. By tracking information on foods like produce, companies like Walmart hope to be able to quickly determine sources of contamination in its food supply. This would not only be a way to save lives, but to also not have to waste produce that was not contaminated. For more information on Blockchain, here is a webinar from the National Agricultural Law Center that goes more in depth on what blockchain is, how it works, and how it can be utilized to help agriculture.
Here’s our gathering of recent agricultural law news you may want to know:
Ohio court upholds conservation easement restriction. In a battle over the future of a property subject to a conservation easement, the Twelfth District Court of Appeals has determined that the easement’s restriction on subdivision of the 76-acre property is valid. The easement requires that the property be retained forever in its natural and agricultural state and prohibits any subdivision of the property. The lower court determined that the subdivision is an invalid and unreasonable restraint on alienation because it does not contain a reasonable temporal limitation, but the Court of Appeals disagreed, noting that the property could still be sold and that the prohibition on subdividing the property was consistent with the purpose of the conservation easement. See Taylor v. Taylor here.
First decision is out in North Carolina nuisance lawsuits. On April 26, 2018, a federal jury found that Murphy-Brown LLC created a nuisance for neighbors living near Kinlaw Farms in North Carolina, where Murphy-Brown raises up 14,688 hogs. A subsidiary of Smithfield, the largest producer of pork in the world, owns Murphy-Brown LLC. Neighbors of Kinley Farms brought the lawsuit in 2014, asserting that the concentrated animal feeding operation (CAFO), with its open air lagoon, spraying of manure on nearby fields, and truck traffic, created “odor, annoyance, dust, noise and loss of use and enjoyment” of their properties. The neighbors also claimed that boxes of deceased hogs and hog waste on the farm attracted buzzards, insects and vermin. The jury found that Murphy-Brown substantially and unreasonably interfered with each of the ten plaintiffs’ use and enjoyment of their property and as a result, awarded each plaintiff $75,000 in compensatory damages and $5 million in punitive damages. Since the initial jury decision, the amount of punitive damages awarded to each plaintiff has been diminished to $250,000 due to a state law limiting such awards in North Carolina. Smithfield/Murphy-Brown LLC plans to appeal the decision. Similar lawsuits brought by neighbors against hog operations in eastern North Carolina will be heard in the near future. Several questions remain to be answered; one is whether Smithfield will be successful in their appeal. Another question is whether this case and the other lawsuits will inspire similar lawsuits against large livestock operations in other states.
Monsanto loses challenge of California glyphosate listing. A California Court of Appeals has held that the state may list glyphosate, the active ingredient in Monsanto's Roundup product, as a probable carcinogen under California’s Proposition 65, which requires the California Office of Environmental Health Hazard Assessment (OEHHA) to list all chemical agents with a known association to cancer. OEHHA based its listing on a 2015 report from the International Agency for Research on Cancer (IARC) which stated that glyphosate was a "probable" human carcinogen. Proposition 65 allows OEHHA to use an IARC finding for listing determinations, but Monsanto argued that such reliance represented an unconstitutional delegation of authority to a foreign agency. The court disagreed, ruling that OEHHA acted appropriately by relying on the IARC conclusion that glyphosate is a possible carcinogen. Monsanto Company v. Office of Environmental Health Hazard Assessment et al, F075362, 231 Cal.Rptr.3d 537 (Cal. Ct. App. April 19, 2018) is here.
National GMO Standard proposed. On May 4, the Agricultural Marketing Service (AMS) released the administrative rule it proposes to meet the 2016 Congressional mandate to develop a National Bioengineered Food Disclosure Standard. The rule would require that genetically modified or “bioengineered” food be labeled as such. According to the AMS, “[t]he proposed rule is intended to provide a mandatory uniform national standard for disclosure of information to consumers about the [bioengineered] status of foods.” The AMS is asking for interested parties to submit their comments about the proposed rule by July 3, 2018.
Industrial hemp bill on the move. Senate Majority Leader Mitch McConnell's federal legislation to allow states to regulate industrial hemp is gaining traction. The National Association of State Departments of Agriculture is supporting the bill and encouraging Congress to “provide an opportunity toward full commercialization of this new crop opportunity for farmers.”
More on Arkansas dicamba ban. In Arkansas, where the fight over the use of dicamba has raged for the past few years, the state Supreme Court has overruled several lower court judges’ rulings that certain farmers be exempted from the statewide ban on applying the volatile herbicide. The Arkansas State Plant Board has banned the use of dicamba in the state from April 16 through October 31 of this year.
Last week, the Environmental Protection Agency (EPA) announced an agreement with Monsanto, BASF and DuPont to change dicamba registration and labeling beginning with the 2018 growing season. EPA reports that the agreement was a voluntary measure taken by the manufacturers to minimize the potential of dicamba drift from “over the top” applications on genetically engineered soybeans and cotton, a recurring problem that has led to a host of regulatory and litigation issues across the Midwest and South. The upcoming changes might alleviate dicamba drift issues, but they also raise new concerns for farmers who will have more responsibility for dicamba applications.
The following registration and labeling changes for dicamba use on GE soybeans and cotton will occur in 2018 as a result of the agreement:
- Dicamba products will be classified as “restricted use” products for over the top applications. Only those who are certified through the state pesticide certification program or operating under the supervision of a certified applicator may apply the product. Training for pesticide certification will now include information specific to dicamba use and application, and applicators will be required to maintain records on the use of dicamba products.
- The maximum wind speed for applications will reduce from 15 mph to 10 mph.
- There will also be greater restrictions on the times during the day when applications can occur, but details are not yet available on those restrictions.
- Tank clean-out instructions for the prevention of cross contamination will be on the label.
- The label will also include language that will heighten the awareness of application risk to sensitive crops.
Farmers should note that the additional restrictions and information on dicamba labels shifts more responsibility for the product onto the applicator. An applicator must take special care to follow the additional label instructions, as going “off label” subjects an applicator to higher risk. If drift occurs because of the failure to follow the label, the applicator is likely to be liable to the injured party for resulting harm and may also face civil penalties. Producers should take care to assess the new dicamba labels closely when the manufacturers issue the revised labels for 2018.
To learn more about legal issues with pesticide use, be sure to sit in on the Agricultural & Food Law Consortium’s upcoming webinar, “From Farm Fields to the Courthouse: Legal Issues Surrounding Pesticide Use.” The webinar will take place on Wednesday, November 1 at Noon EST and will feature an examination of regulatory issues and litigation surrounding pesticide use around the country by attorneys Rusty Rumley and Tiffany Dowell Lashmet. To view the free webinar, visit http://nationalaglawcenter.org/consortium/webinars/pesticide/