Happy last day of June! We close out the month with another Ag Law Harvest, which brings you two interesting court cases, one about an Ohio man asserting his right to give away free gravel, and another which could decide the constitutionality of “Ag-Gag” laws once and for all. We also provide a few federal policy updates and announcements.
Ohio Department of Agriculture Prohibited from Fining a Landowner for Charging to Load Free Gravel. In May of 2020, Paul Gross began selling gravel and topsoil (collectively “gravel”) that he had accumulated from excavating a pond on his property. Gross charged $5 per ton of gravel, which was weighed at a scale three miles from his property. After receiving a complaint of the gravel sales, the Madison County Auditor sent a Weights and Measures Inspector to investigate Gross’s gravel sales. The Inspector informed Gross that the gravel sales violated Ohio Administrative Code 901:6-7-03(BB) (the “Rule”) because the gravel was not being weighed at the loading site. Under the Rule, “[s]and, rock, gravel, stone, paving stone, and similar materials kept, offered, or exposed for sale in bulk must be sold . . . by cubic meter or cubic yard or by weight.” As explained by the Inspector, Gross’s problem was that he was selling gravel by inaccurate weight measurements because the trucks hauling the gravel lose fuel weight when traveling the three miles to the scale.
Instead of installing scales on his property, Gross decided to start giving away the gravel for free. However, Gross did charge a flat rate fee of $50 to any customer that requested Gross’s help in loading the gravel. According to Gross, this $50 fee was to cover the cost of his equipment, employees, and other resources used to help customers load the gravel. Unsatisfied with the structure of this transaction, the Ohio Department of Agriculture (“ODA”) decided to investigate further and eventually determined that even though Gross was giving away the gravel for free, the flat fee for Gross’s services represented a commercial sale of the gravel and, therefore, Gross was in continued violation of the Rule.
For the alleged violation, the ODA intended to impose a $500 civil penalty on Gross, who requested an administrative hearing. The hearing officer recommended imposing the penalty and the Franklin County Court of Common Pleas agreed. Gross appealed the decision to the Tenth District Court of Appeals, which found that Gross was not in violation of the Rule.
The Tenth District reasoned that customers were paying for the service of moving the gravel, not for the gravel itself. The court explained that the purpose of the Rule is to protect consumers by ensuring transparent pricing of materials like gravel. Since Gross was not in the business of selling gravel and the transaction was primarily for services, the court concluded that the ODA’s fine was impermissible.
North Carolina Asks U.S. Supreme Court to Review “Ag-Gag Law.” In 2015, the North Carolina Legislature passed the North Carolina Property Protection Act, allowing employers to sue any employee who “without authorization records images or sound occurring within” nonpublic areas of the employer’s property “and uses the recording to breach the [employee’s] duty of loyalty to the employer.” After the act’s passage several food-safety and animal-welfare groups, including the People for the Ethical Treatment of Animals (“PETA”), challenged the Property Protection Act in an effort to prevent North Carolina from enforcing the law.
A federal district court in North Carolina struck down the law, finding it to be a content-based restriction on speech in violation of the First Amendment of the United States Constitution. The 4th Circuit Court of Appeals upheld the district court’s ruling also reasoning that the law’s broad prohibitions restrict speech in a manner inconsistent with the First Amendment. Now, the North Carolina Attorney General, Josh Stein, has petitioned the Supreme Court of the United States (“SCOTUS”), asking the Court to reverse the 4th Circuit’s decision. If SCOTUS decides to hear the case, the justices will be tasked with determining “[w]hether the First Amendment prohibits applying state tort law against double-agent employees who gather information, including by secretly recording, in the nonpublic areas of an employer’s property and who use that information to breach their duty of loyalty to the employer.”
We have reported on several Ag-Gag laws and the court challenges that have followed. If SCOTUS decides to take up the case, we may finally have a definitive answer as to whether Ag-Gag laws are constitutional or not.
Lab-grown Chicken Given the Green Light by the USDA. The United States Department of Agriculture’s (“USDA”) Food Safety and Inspection Service granted its first approvals to produce and sell lab-grown chicken to consumers. Upside Foods and Good Meat, the two entities given the green light by the USDA, plan on initially providing their “cell-cultivated” or “cultured” chicken to patrons of restaurants in the San Francisco and Washington D.C. areas. However, the timeline for such products showing up in your local grocery store has yet to be determined.
USDA Suspends Livestock Risk Protection 60-Day Ownership Requirement. The USDA’s Risk Management Agency issued a bulletin suspending the 60-day ownership requirement for the Livestock Risk Protection (“LRP”) program. Normally under the LRP, covered livestock must be owned by the producer within the last 60 days of the specified coverage endorsement period for coverage to apply. According to the bulletin, “[d]ue to the continuing severe drought conditions impacting many parts of the nation, producers are struggling to find adequate supplies of feed or forage, causing them to market their livestock sooner than anticipated.” In response, the USDA is allowing producers to apply to waive the 60-day ownership requirement, subject to verification of proof of ownership of the livestock. The USDA hopes this waiver will allow producers to market their livestock as necessary while dealing with the current drought effects. Producers will be able to apply for the waiver until December 31, 2024.
USDA Announces Tool to Help Small Businesses and Individuals Identify Contracting Opportunities. Earlier this month, the USDA announced a new tool “to assist industry and small disadvantaged entities in identifying potential opportunities for selling their products and services to USDA.” USDA’s Procurement Forecast tool lists potential contracting or subcontracting opportunities with the USDA. Until now, businesses could only access procurement opportunities through the federal-wide System for Award Management (“SAM”). The USDA hopes the Procurement Forecast tool will provide greater transparency and maximize opportunity for small and underserved businesses.
Did you know that the Florida Panther is the last subspecies of Mountain Lion found east of the Mississippi River? The Florida Panther is an endangered species with an estimated population of under 100 panthers. As bleak as it may seem, things may be looking up for the Florida Panther to make a roaring comeback (which is ironic because Florida Panthers can’t roar).
Like the Florida Panther, we have prowled agricultural and resource issues from across the country. Topics include a historic move by Florida to protect its wildlife and natural resources, agritourism getting a boost in Pennsylvania, Colorado’s livestock industry receiving a lifeline, and USDA efforts to expand broadband and water quality initiatives.
Florida makes conservation history. Florida has recently enacted a new law known as the Florida Wildlife Corridor Act (the “Act”). The Act creates a wildlife corridor that will connect Florida’s large national and state parks and create an unbroken area of preserved land that stretches from the Alabama state line all the way down to the Florida Keys. Specifically, the Act looks to protect about 18 million acres of habitat for Florida’s wildlife. The Act seeks to prevent wildlife, like the Florida Panther, from being cut off from other members of its species, which is a main driver of extinction. The Act also aims to protect Florida’s major watersheds and rivers, provide wildlife crossings over and/or under major highways and roads, and establish sustainable practices to help working ranches, farms and, forests that will be vital to ensuring the success and sustainability of the wildlife corridor. The Act goes into effect July 1 and provides $400 million in initial funding to help purchase land to create the corridor.
Pennsylvania provides protection for agritourism operators. Pennsylvania Governor, Tom Wolf, signed House Bill 101 into law. Like Ohio’s law, House Bill 101 shields agritourism operators from certain lawsuits that could arise from circumstances beyond their control. House Bill 101 prevents participants in an agritourism activity from suing the agritourism operator if the operator warns participants of the inherent risks of being on a farm and engaging in an agritourism activity. An agritourism operator must: (1) have a 3’ x 2’ warning sign posted and notifying participants that an agritourism operator is not liable, except under limited circumstances, for any injury or death of a participant resulting from an agritourism activity; and (2) have a signed written agreement with an agritourism participant acknowledging an agritourism operator’s limited liability or have specific language printed on an admission ticket to an agritourism activity that notifies and warns a participant of an agritourism operator’s limited liability. House Bill 101, however, does not completely shelter agritourism operators. An agritourism operator can still be liable for injuries, death, or damages arising from overnight accommodations, weddings, concerts, and food and beverage services. The enactment of House Bill 101 will help to protect farmers from costly and unnecessary lawsuits and provide additional sustainability to Pennsylvania’s agritourism industry.
Colorado Supreme Court strikes proposed ballot initiative seeking to hold farmers liable for animal cruelty. The Colorado Supreme Court issued an opinion removing Initiative 16, also known as the Protect Animals from Unnecessary Suffering and Exploitation Initiative (“PAUSE”), from voter consideration. Initiative 16 sought to amend Colorado law and remove certain agriculture exemptions from Colorado’s animal cruelty laws. Initiative 16 intended to set limitations on the slaughter of livestock and to broadly expand the definition of “sexual act with an animal” to include any intrusion or penetration of an animal’s sexual organs, which opponents of the initiative have argued would prohibit artificial insemination and spaying/neutering procedures. The Colorado Supreme Court found that the initiative violated Colorado’s single-subject requirement for ballot initiatives and therefore, was an illegal ballot initiative. The court argued that the central theme of the initiative was to incorporate livestock into Colorado’s animal cruelty laws. However, because the initiative redefined “sexual act with an animal” to include animals other than livestock, the court concluded that the ballot initiative covered two subjects, not one. The court reasoned that because the initiative addresses two unrelated subjects, voters could be surprised by the consequences of the initiative if it passed, which is why Colorado has single-subject requirement for ballot initiatives.
USDA announces dates for Conservation Reserve Program (“CRP”) signups. The USDA set a July 23 deadline for agricultural producers and landowners to apply for the CRP General and will also be accepting applications for CRP Grasslands from July 12 through August 20. Through the CRP General, producers and landowners establish long-term conservation practices aimed at conserving certain plant species, controlling soil erosion, improving water quality, and enhancing wildlife habitat on cropland. CRP Grasslands helps landowners and producers protect grasslands including rangeland, pastureland, and certain other lands, while maintaining grazing lands. To enroll in the CRP, producers and landowners should contact their local USDA Service Center.
USDA expands CLEAR30 initiative nationwide. The USDA announced that landowners and agricultural producers currently enrolled in CRP now have an opportunity to sign a 30-year contract through the Clean Lakes, Estuaries, and Rivers Initiative (“CLEAR30”). CLEAR30 was created by the 2018 Farm Bill to address water quality concerns and was originally only available in the Great Lakes and Chesapeake Bay watersheds. Now, producers and landowners across the country can sign up for CLEAR30. Eligible producers must have certain water quality improvement practices under a continuous CRP or under the Conservation Reserve Enhancement Program (“CREP”) and contracts that are set to expire on September 30, 2021. The USDA hopes that by expanding the initiative, it will enable more producers to take conservation efforts up a level and create lasting impacts. CLEAR30’s longer contracts help to ensure that conservation benefits will remain in place longer to help in reducing sediment and nutrient runoff and reducing algal blooms. To sign up, producers and landowners should contact their local USDA Service Center by August 6, 2021.
Three federal agencies enter into agreement to coordinate broadband funding deployment. The Federal Communications Commission (“FCC”), the USDA, and the National Telecommunications and Information Administration (“NTIA”) entered into an agreement to coordinate the distribution of federal funds for broadband development in rural and underserved areas. In an announcement released by the USDA, Secretary Vilsack stressed the importance of broadband in rural and underserved communities. Lessons learned from the COVID-19 Pandemic have made access to broadband a central issue for local, state, federal and Tribal governments. The goal is to get 100% of Americans connected to high-speed internet. As part of the signed agreement, the agencies will share information about existing or planned projects and identify areas that need broadband service in order to reach the 100% connectivity goal. Visit the USDA’s Rural Development Telecom Programs webpage to learn more about the USDA’s efforts to provide broadband service in rural areas.
Update: Mengel Dairy Farms appealed the federal district court's decision regarding loss of business income (discussed below) to the 6th Circuit Court of Appeals. On July 16, 2021, the 6th Circuit Court of Appeals issued an opinion agreeing with the district court's decision. The 6th Circuit concluded that in order for Mengel Dairy Farms to receive insurance proceeds for loss of business income, Mengel Dairy Farms had to completely shut down its dairy farm. The 6th Circuit found that a reduction in business is simply not enough.
When was the last time you read your farm business insurance policy? Under your policy, do you know when coverage is triggered for loss of business profits and loss of assets? In the case below, you will learn about a dairy farm that recently dealt with the issue of stray voltage causing dairy cattle to unexpectedly pass away. Even though the farm had insurance, the farm continued to operate, albeit at a reduced capacity, while it dealt with the silent killer. The farm continued to operate under the assumption that any loss of business income and the loss of its primary assets would be covered under its insurance policy.
Mengel Dairy Farms
Mengel Dairy Farms (“Mengel”) could not begin to fathom why its dairy cattle were unexpectedly dying off. Beyond its loss of livestock, Mengel also suffered loss of milk production and business profits. The farm eventually hired an expert to help it determine the cause of death of its cattle. The expert determined that a stray electrical current was present on the property, causing the dairy cattle to die.
Mengel then proceeded to file an insurance claim with its insurance provider, Hastings Mutual Insurance Company (“Hastings”), hoping to receive insurance benefits for the lost cattle, cost of the investigation into the death of the cattle, the subsequent repairs to correct the stray electrical current, and for its lost business profits.
Hastings, however, sent out its own expert to help determine the cause of death of the cattle. Hastings’ expert could not find any stray voltage on the property but did believe that electrocution may have caused Mengel’s cattle to stop eating and ultimately die.
After its investigation, Hastings paid Mengel for the death of its cattle and the cost of the investigation into the deaths of the livestock, but Hastings rejected coverage for the loss of business income. Hastings then filed an action in the Federal District Court, asking the court to determine that there was no coverage for Mengel’s lost business income as a result of the electrocuted dairy cattle.
After Hastings filed its action, Mengel submitted a second insurance claim to Hastings for the death of additional livestock, costs of additional investigation and repair, and additional lost profits. Hastings did not provide any coverage, this time, to Mengel for its second insurance claim and instead issued a reservation of rights letter to Mengel stating that coverage for Mengel’s second claim may be subject to exclusions under Mengel’s insurance policy. Hastings then asked the court to also determine whether Hastings was required to pay for the loss of the additional dairy cattle and additional lost profits.
Coverage for Electrocuted Dairy Cattle
In its arguement to the court, Hastings claimed that under the dairy farm’s insurance policy, Hastings was not required to pay any insurance benefits for the additional dairy cattle that passed away from the stray electrical current. Hastings argued that even though death or destruction of livestock by electrocution is a covered peril under Mengel’s insurance policy, the term electrocution means instant death, and because Mengel’s cattle did not die instantly, Mengel was not entitled to insurance benefits for the cattle.
The Court disagreed. The court found that the term “electrocution” was an ambiguous term within the insurance policy because it was not expressly defined. Additionally, the court went on to analyze that coverage existed for both the death or destruction of livestock. The court determined that the term destruction encompasses more than just death. Reading the terms destruction and electrocution together, the court held that electrocution can consist of an event that does not necessarily result in instantaneous death but may still cause irreparable harm.
Therefore, the electrocution causing Mengel’s cattle to stop eating and ultimately die could be considered “destruction of livestock” which would be covered under the farm’s insurance policy.
Coverage for Lost Business Income
Since discovering the cause of death to its dairy cattle, Mengel reduced its farming operations to deal with the stray electrical current. Under Mengel’s insurance policy, coverage existed for lost business income “due to the necessary suspension” of operations. The insurance policy also indicated that the necessary suspension of farm operations must have been caused or resulted from an insured peril. Mengel thought that because it reduced operations for a covered peril (the electrocution of its livestock), it was entitled to coverage for its lost business income. Hastings disagreed and claimed that coverage did not exist for Mengel because the farm did not shut down its farming operations completely, it only reduced operations.
The court sided with Hastings. The court found that “necessary suspension” means a complete shutdown of operations, even if temporary. The court noted that a slowing down of business is not covered under the insurance policy. Therefore, Mengel’s claim for lost profits is not covered under the policy because it continued to operate at a reduced capacity.
Mengel filed its own claims against its insurer for bad faith and breach of contract. However, after the court’s determination that coverage existed for electrocuted cattle that did not die instantly and the court’s conclusion that Mengel was not owed any insurance benefits for lost profits, the parties settled their dispute out of court.
It may not be as easy as you think to determine what is covered (and what should be covered) under your insurance policy. Insurance companies do their best to draft insurance policies to be as precise as possible. Certain pre-requisites must be met in order for coverage to exist for a farmer and their business. It is vital that you understand what is covered (and not covered) under your insurance policy. You may be taking steps to remediate any issues with the assumption that insurance will cover any expenses or lost revenue you may endure, but as the above case demonstrates, this is not always true.
Welcome to August! Despite the fact that most of us haven’t seen much besides the inside of our homes lately, the world still turns, which is also true for the gears in Washington D.C. In this issue of the Ag Law Harvest, we will take a look at some recently introduced and passed federal legislation, as well as a proposed federal rule.
Great American Outdoors Act is a go. The Great American Outdoors Act, one of the last pieces of legislation introduced by the late Representative John Lewis, was signed into law by the President on August 4. The new law secures funding for deferred maintenance projects on federal lands. The funding will come from 50% of the revenues from oil, gas, coal, or alternative energy development on federal lands. The funding will be broken down between numerous agencies, with 70% to the National Park Service each year, 15% to the Forest Service, 5% to the U.S. Fish and Wildlife Service, 5% to the Bureau of Land Management, and 5% to the Bureau of Indian Education. You can read the law in its entirety here.
A meat processing slowdown for worker safety? In addition to the Great American Outdoors Act, numerous bills have been introduced to help farmers, ag-related businesses, and rural areas in the wake of COVID-19. For instance, in early July, Ohio’s own Representative from the 11th District, Marcia Fudge, introduced H.R. 7521, which would suspend increases in line speeds at meat and poultry establishments during the pandemic. Notably, if passed, the bill would “suspend implementation of, and conversion to the New Swine Slaughter Inspection System,” which has been planned since the USDA published the final rule in October of 2019. It would also make the USDA suspend any waivers for certain establishments related to increasing line speed. The resolution was introduced to protect the safety of workers, animals, and food. In theory, slower line speeds would make it easier for workers to social distance. This is especially important in the wake of outbreaks among workers at many processing plants. On July 28, Senator Cory Booker introduced a companion bill in the Senate.
Will livestock markets become more competitive? On July 9, a group of Representatives from Iowa introduced H.R. 7501. The bill would amend the Agricultural Marketing Act of 1946 “to foster efficient markets and increase competition and transparency among packers that purchase livestock from producers. To achieve this outcome, the bill would require packers to obtain at least 50% of their livestock through “spot market sales” every week. This means that the packers would be required to buy from producers not affiliated with the packer. “Unaffiliated producers” would have less than a 1 percent equity interest in the packer (and vice versa), no directors, employees, etc. that are directors, employees, etc. of the packer, and no fiduciary responsibility to the packer. Additionally, the packer would not have an equity interest in a nonaffiliated producer. Basically, this bill would make it easier for independent producers to sell to packers. This bill is a companion to a Senate Bill 3693, which we discussed in a March edition of the Ag Law Harvest. According
New bill would make changes to FIFRA. Just last week, a new bill was proposed in both the House and Senate that would alter the Federal Insecticide, Fungicide, and Rodenticide Act. The bill is called the “Protect America’s Children from Toxic Pesticides Act of 2020.” In a press release, the sponsoring Senator, Tom Udall, and Representative, Joe Neguse, explained that the proposed law would ban organophosphate insecticides, neonicotinoid insecticides, and the herbicide paraquat, which are linked to harmful effects in humans and the environment. Furthermore, the law would allow individuals to petition the EPA to identify dangerous pesticides, close the loopholes allowing EPA to issue emergency exemptions and conditional registrations to use pesticides before they are fully vetted, allow communities to pass tougher laws on pesticides without state preemption, and press the pause button on pesticides found to be unsafe by the E.U. or Canada until they undergo EPA review. Finally, the bill would make employers report pesticide-caused injuries, direct the EPA to work with pesticide manufacturers on labeling, and require manufacturers to include Spanish instructions on labels. You can read the text of the bill here.
USDA AMS publishes proposed Organic Rule. Moving on to federal happenings outside Congress, the USDA Agricultural Marketing Service published a proposed rule on August 5. The rule would amend current regulations for organic foods by strengthening “oversight of the production, handling certification, marketing, and sale of organic agricultural products.” The rule would make it easier to detect any fraud, trace organic products, and would make organic certification practices for producers more uniform. Anyone interested in commenting on this proposed rule has until October 5, 2020 to do so. You can find information on how to submit a comment on the website linked above.
Written by Ellen Essman and Peggy Kirk Hall
Many people are still working from home, but that hasn’t stopped legal activity in Washington, D.C. Bills have been proposed, federal rules are being finalized, and new lawsuits are in process. Here’s our gathering of the latest ag law news.
SBA posts Paycheck Protection Program (PPP) loan forgiveness application. We’ve been waiting to hear more about how and to what extent the SBA will forgive loans made under the CARES Act’s PPP that many farm businesses have utilized. The SBA recently posted the forgiveness application and instructions for applicants here. But there are still unanswered questions for agricultural applicants as well as talk in Congress about changing some of the forgiveness provisions, suggesting that loan recipients should sit tight rather than apply now. Watch for our future blog post and a discussion on the forgiveness provisions in our next Farm Office Live webinar.
House passes another COVID-19 relief bill. All predictions are that the bill will go nowhere in the Senate, but that didn’t stop the House from passing a $3 trillion COVID-19 relief package on May 15. The “HEROES Act” includes a number of provisions for agriculture, including an additional $16.5 billion in direct payments to producers of commodities, specialty crops and livestock, as well as funds for local agriculture markets, livestock depopulation losses, meat processing plants, expanded CRP, dairy production, other supply chain disruptions, and biofuel producers (discussed below). Read the bill here.
Proposed bipartisan bill designed to open cash market for cattle. Last week, Republican Senator Chuck Grassley and Democratic Senator Jon Tester introduced a bill that “would require large-scale meatpackers to increase the proportion of negotiable transactions that are cash, or ‘spot,’ to 50 percent of their total cattle purchases.” The senators hope this change would bring up formula prices and allow livestock producers to better negotiate prices and increase their profits. In addition, the sponsors claim ithe bill would provide more certainty to a sector hard hit by coronavirus. Livestock groups aren’t all in agreement about the proposal. You can read the bill here, Senator Grassley’s press release here and Senator Tester’s news release here.
New Senate and House bills want to reform the U.S. food system. Representative Ro Khanna from California has introduced the House companion bill to the Senate's Farm System Reform Act first introduced by Senator Cory Booker in January. The proposal intends to address underlying problems in the food system. The bill places an immediate moratorium on the creation or expansion of large concentrated animal feeding operations and requires such operations to cease by January 1, 2040. The proposal also claims to strengthen the Packers and Stockyards Act and requires country of origin labeling on beef, pork, and dairy products. The bill would also create new protections for livestock growers contracted by large meat companies, provide money for farmers to transition away from operating animal feeding facilities, strengthen the term “Product of the United States” to mean “derived from 1 or more animals exclusively born, raised, and slaughtered” in the U.S., and, similar to the Grassley/Tester bill above, require an increased percentage of meatpacker purchases to be “spot” transactions.
Lawmakers ask Trump to reimburse livestock producers through FEMA. In another move that seeks to help livestock producers affected by the pandemic, a bipartisan group of U.S. Representatives sent a letter to Donald Trump imploring him to issue national guidance to allow expenses of livestock depopulation and disposal to be reimbursed under FEMA's Public Assistance Program Category B. The lawmakers reason that FEMA has "been a valued Federal partner in responding to animal losses due to natural disasters," and that the COVID-19 epidemic should be treated "no differently." You can read the letter here.
More battling over biofuels. Attorneys General from Wyoming, Utah, Louisiana, Oklahoma, Texas, Arkansas and West Virginia have sent a request to EPA Administrator Andrew Wheeler to waive the Renewable Fuel Standard (RFS) because of COVID-19 impacts on the fuel economy. The letter states that reducing the national quantity of renewable fuel required would alleviate the regulatory cost of purchasing tradable credits for refiners, who use the credits to comply with biofuel-blending targets. Meanwhile, 70 mayors from across the U.S. wrote a letter urging the opposite, and criticizing any decisions not to uphold the RFS due to the impact that decision would have on local economies, farmers, workers, and families who depend on the biofuels industry. The House is also weighing in on the issue. In its recently passed HEROES Act, the House proposes a 45 cents per gallon direct payment to biofuel producers for fuels produced between Jan 1 and May 1, 2020 and a similar payment for those forced out of production during that time.
New USDA rule for genetically engineered crops. A final rule concerning genetically engineered organisms is set to be published this week. In the rule, USDA amends biotechnology regulations under the Plant Protection Act. Importantly, the new rule would exempt plants from regulation by the Animal and Plant Health Inspection Service (APHIS) if the plants are genetically engineered but the same outcome could have occurred using conventional breeding. For instance, gene deletions and simple genetic transfers from one compatible plant relative to another would be exempted. If new varieties of plants use a plant-trait mechanism of action combination that has been analyzed by APHIS, such plants would be exempt. You can read a draft of the final rule here.
Trump’s new WOTUS rule attacked from both sides of the spectrum. A few weeks ago, we wrote about the Trump Administration’s new “waters of the United States” or WOTUS rule. Well, it didn’t take too long for those who oppose the rule to make their voices heard. The New Mexico Cattle Growers Association (NMCGA) sued the administration, claiming that the new rule is still too strict and leaves cattle ranchers questioning whether waters on their land will be regulated. In their complaint, NMCGA argues that the new definition violates the Constitution, the Clean Water Act, and Supreme Court precedent. On the other side, the Natural Resources Defense Council (NRDC), along with other conservation groups, sued the administration, but argued that the new rule does not do enough to protect water and defines “WOTUS” too narrowly. Here we go again—will WOTUS ever truly be settled?
The Farm Office is Open! Join us for analysis of these and other legal and economic issues facing farmers in the Farm Office Team’s next session of “Farm Office Live” on Thursday, May 28 at 9:00 a.m. Go to this link to register in advance or to watch past recordings.
Last year, we wrote a post on recent developments in ag-gag litigation. In that post, we discussed a few ag-gag laws that had been struck down on First Amendment grounds. Court actions and decisions in recent months show that this trend is continuing. Namely, decisions in Iowa and Kansas have not been favorable to ag-gag laws.
What is an ag-gag law?
“Ag-gag” is the term for state laws that prevent undercover journalists, investigators, animal rights advocates, and other whistleblowers from secretly filming or recording at livestock facilities. “Ag-gag” also describes laws which make it illegal for undercover persons to use deception to obtain employment at livestock facilities. Many times, the laws were actually passed in response to undercover investigations which illuminated conditions for animals raised at large industrial farms. Some of the videos and reports produced were questionable in nature—they either set-up the employees and the farms, or they were released without a broader context of farm operations. The laws were meant to protect the livestock industry from reporting that might be critical of their operations—obtained through deception and without context, or otherwise. The state of Ohio does not have an ag-gag law, but a number of other states have passed such legislation.
Injunction in Iowa lawsuit
You may recall that Iowa’s ag-gag law was overturned in January of last year. The judge found that the speech being implicated by the law, “false statements and misrepresentations,” was protected speech under the First Amendment. The state wasted little time in passing a new ag-gag law that contained slightly different language. (We wrote about the differences between Iowa’s old and new versions of the law here.) After passage of the new law, animal rights and food safety groups quickly filed a new lawsuit against the state, claiming that like the previous law, the new law prohibited their speech based on content and viewpoint. In other words, they argued that the new Iowa law was still discriminatory towards their negative speech about the agricultural industry, while favoring speech depicting the industry in a positive light.
While the new challenge of Iowa’s law has not yet been decided by U.S. District Court for the Southern District of Iowa, the court did grant a preliminary injunction against the law late last year. This means the law cannot be enforced while the case is ongoing, which is certainly a strike against the state. We’ll have to wait and see if the court is persuaded that the new language of the law violates the plaintiff’s First Amendment rights, but for the time being, there is no enforceable ag-gag law in the state of Iowa.
Kansas law overturned
Kansas passed its ag-gag law in 1990, and has the distinction of having the oldest such law in the country. Although the law was long-standing, the U.S. District Court for the District of Kansas still determined that it was unconstitutional.
What exactly did the law say? The Kansas law, among other things, made it illegal, “without the effective consent of the owner,” to “enter an animal facility to take pictures by photograph, video camera or by any other means” with the “intent to damage the animal facility.” The law also made it illegal for someone to conceal themselves in order to record conditions or to damage the facility. “Effective consent” could be obtained by “force, fraud, deception, duress, or threat,” meaning under the law, it was not permissible for an undercover whistleblower to apply for a job at an animal facility and work at the facility if they really intended to record and disseminate the conditions.
In a 39-page opinion, the court explained its reasoning for striking down the law. Following a familiar formula for First Amendment cases, the court found that the law did in fact regulate speech, not just conduct. The court stated that the “prohibition on deception” in the law prohibited what an animal rights investigator could say to an animal facility owner, and that the outlawing of picture taking at animal facilities affected the investigator’s creation and dissemination of information, which the Supreme Court has found to be speech. Next, the court found that the law prohibited speech on the basis of its content; to determine whether someone had violated the law, they would have to look at the content of the investigator’s statement to the animal facility owner. Furthermore, the court pointed out that the law did not prohibit deceiving the facility owner if the investigator intended to disseminate favorable information about the facility. Moving on, the court cited Supreme Court decisions to show that false speech is indeed protected under the First Amendment. Since the court found that the law prohibited speech, on the basis of its content, and that false speech is protected, it had to apply strict scrutiny when considering the constitutionality of the law. Applying this test, the court explained that the law did “not prevent everyone from violating the property and privacy rights of animal facility owners,” instead, it prevented “only those who violate said rights with intent to damage the enterprise conducted at animal facilities.” As such, the law did not stand up to strict scrutiny because it was “underinclusive”—it applied to a small group of people with a certain viewpoint, but nobody else.
Based upon its reasoning above, the court did overturn most of the Kansas ag-gag law. However, it is worth noting that it upheld the part of the law that prohibits physically damaging or destroying property or animals at an animal facility without effective consent from the owner.
What’s on the horizon?
The next two ag-gag decisions will likely be made by courts in Iowa and North Carolina. We discussed the Iowa case above—the court will have to determine whether the slightly different language in the new law passes constitutional muster. We’re also continuing to watch the lawsuit in North Carolina, which has been working its way through the courts for several years now. North Carolina’s “ag-gag” law is interesting in that it doesn’t just prevent secret recording and related actions at livestock facilities, but also prohibits such actions in “nonpublic areas” of a person or company’s premises.
Hemp, drones, meat labeling and more—there is so much going on in the world of ag law! With so much happening, we thought we’d treat you to another round of the Harvest before the holidays.
Hemp for the holidays. As 2020 and the first growing season approach, there has been a flurry of activity surrounding hemp. States have been amending their rules and submitting them to the USDA for approval in anticipation of next year. In addition, just last week USDA extended the deadline to comment on the interim final hemp rule from December 30, 2019 to January 29, 2020. If you would like to submit a comment, you can do so here. To get a refresher on the interim rule, see our blog post here.
In other hemp news, EPA announced approval of 10 pesticides for use on industrial hemp. You can find the list here. Additional pesticides may be added to the list in the future.
Congress considers a potential food safety fix. It’s likely that over the last several years, you’ve heard about numerous recalls on leafy greens due to foodborne illnesses. It has been hypothesized that some of these outbreaks could potentially be the result of produce farms using water located near CAFOs to irrigate their crops. A bill entitled the “Expanded Food Safety Investigation Act of 2019” has been introduced to tackle this and other potential food safety problems. If passed, the bill would give FDA the authority to conduct microbial sampling at CAFOs as part of a foodborne illness investigation. The bill is currently being considered in the Senate Health, Education, Labor, and Pensions Committee.
Animal welfare bill becomes federal law. In November, the President signed the “Preventing Animal Cruelty and Torture Act” (PACT), into law. PACT makes it a federal offense to purposely crush, burn, drown, suffocate, impale, or otherwise subject non-human mammals, birds, reptiles, or amphibians to serious bodily injury. PACT also outlaws creating and distributing video of such animal torture. The law includes several exceptions, including during customary and normal veterinary, agricultural husbandry, and other animal management practices, as well as during slaughter, hunting, fishing, euthanasia, etc.
No meat labeling law in Arkansas? Last winter, Arkansas passed a law that made it illegal to “misbrand or misrepresent an agricultural product that is edible by humans.” Specifically, it made it illegal to represent a product as meat, beef, pork, etc. if the product is not derived from an animal. Unsurprisingly, the law did not sit well with companies in the business of making and selling meat substitutes from plants and cells. In July, The Tofurky Company sued the state in the U.S. District Court for the Eastern District of Arkansas, Central Division, claiming the labeling law violates the First and Fourteenth Amendments, as well as the dormant Commerce Clause. On December 11, the District Court enjoined, or stopped Arkansas from enforcing, the labeling law. This means that the state will not be able to carry out the law while the District Court considers the constitutionality of the law. We will be following the ultimate outcome of this lawsuit closely.
Ag wants to be part of the drone conversation. The Senate Committee on Commerce, Science, and Transportation is currently considering a bill called the “Drone Advisory Committee for the 21st Century Act.” If passed, the bill would ensure that the Federal Aviation Administration (FAA) includes representatives from agriculture, forestry, and rangeland, in addition to representatives from state, county, city, and Tribal governments on the Drone Advisory Committee (DAC). Thus, such representatives would be part of the conversation when the DAC advises the FAA on drone policies.
Ag financing tools may get an upgrade. The “Modernizing Agriculture and Manufacturing Bonds Act,” or MAMBA (what a great name) was introduced very recently in the House Committee on Ways and Means. Text of the bill is not yet available, but when it is, it should be located here. According to this fact sheet, the bill would make a number of changes to current law, including increasing “the limitation on small issue bond proceeds for first-time farmers” to $552,500, repealing “the separate dollar limitation on the use of bond proceeds for depreciable property” which would mean famers could use the full amount for equipment, breeding livestock, and other capital assets, and modifying the definition of “substantial farmland” to make it easier for beginning farmers to gain access to capital.
Shoring up national defense of agriculture and food is on the docket. The Committee on Agriculture, Nutrition, and Forestry sent the National Bio and Agro-Defense Facility Act of 2019 (NBAF) to the floor of the Senate for consideration. Among other things, bill would allow the USDA, through the National Bio and Agro-Defense Facility, to address threats from human pathogens, zoonotic disease agents, emerging foreign animal diseases, and animal transboundary diseases, and to develop countermeasures to such diseases. Essentially, USDA and NBAF would see to national security in the arena of agriculture and food.
We hope you have a wonderful holiday season! We will be sure to continue the ag law updates in the next decade!
Written by Evin Bachelor, Law Fellow, OSU Extension Agricultural & Resource Law Program
Toledo’s Lake Erie Bill of Rights (LEBOR) has been in the headlines a lot lately, and certainly on the minds of farmers in the Lake Erie watershed. So far, the Ag Law Blog has focused attention on what LEBOR is, why it was on the ballot, and what types of defenses agricultural producers can raise if sued. Because voters approved the ballot measure, the focus now shifts to how LEBOR will be treated in the courts.
On February 26th, Toledo held a special election, with one of the ballot questions being whether to amend the City of Toledo’s charter to adopt LEBOR. While less than 9 percent of Toledo’s registered voters cast a ballot, the majority of those who did voted in favor of amending the city’s charter to include LEBOR.
On February 27th, the Drewes Farm Partnership filed a complaint and initiated a lawsuit in federal court against the City of Toledo. Family owned and operated, this Wood County based grain farm operates wholly within the Lake Erie watershed. Drewes Farm utilizes both manure and commercial fertilizers, and states in its complaint that it follows industry best practices, scientific recommendations, and all legal requirements such as keeping records and not applying fertilizer on snow covered ground. Two of the family members obtained Fertilizer Applicator Certificates, and the Ohio Department of Agriculture certified the farm under its Ohio Agricultural Stewardship Verification Program.
The complaint specifically alleges violations of Drewes Farm’s rights under the First Amendment, Equal Protection Clause, and Due Process Clauses of both the Fifth and Fourteenth Amendments. Further, the complaint argues that LEBOR exceeds the City of Toledo’s authority by intruding on state and federal powers by attempting to meddle with international relations, invalidate state and federal permits, invalidate state law, alter the rights of corporations, and create new causes of action in state courts. Drewes Farm requests that the court 1) grant it a preliminary and permanent injunction to prevent LEBOR’s enforcement, 2) invalidate LEBOR, and 3) grant the plaintiff an award for costs and fees.
The following day, Drewes Farm filed a motion for a preliminary injunction. Parties use preliminary injunctions as a way to enforce the status quo and prevent the other parties from acting in a way that would cause further harm. If granted, the preliminary injunction would prevent the enforcement of LEBOR against the Drewes Farm Partnership during the course of the litigation. At the end of the case, there would be a determination of whether Drewes Farm should receive a permanent injunction, which would prevent LEBOR from being enforced against it after the case has ended.
The party who brings the motion must argue and prove four elements in order for the court to grant the motion for a preliminary injunction:
First, that the movant has a likelihood of success on the merits, meaning that it is likely that the movant will win the underlying case. Drewes Farm’s motion examines each of the grounds that it believes violates its constitutional rights and state and federal law. Drewes Farm argues that it can win on each of the dozen grounds it examines, and that it need only show a likelihood of success on one ground to satisfy this element.
Second, that the movant could suffer irreparable harm without a preliminary injunction, meaning that without a preliminary injunction, the other party may take action to harm the movant in a way that it will not be able to recover. Here, Drewes Farm cites court cases explaining that the loss of one’s constitutional rights for any amount of time constitutes irreparable harm, and that a likelihood of success also demonstrates irreparable harm.
Third, that the issuance of an injunction will not cause greater harm. This element balances the previous element to see whether the injunction is fair. Where the second element looks at the harm to the movant, the third element looks at whether a preliminary injunction will harm others. Here, Drewes Farm argues that others will not be harmed by the granting of a preliminary injunction because it will merely allow the farm to continue operating as required under the law and its permits using best practices. Further, Drewes Farm mentions that the other farms in the watershed will actually experience a benefit from the prevention of LEBOR’s enforcement.
Fourth, that the issuance of a preliminary injunction would serve the public interest. Here, Drewes Farm cites additional court cases explaining that the enforcement of constitutional rights is inherently in the public interest. Further, it argues that the State of Ohio holds its portion of Lake Erie in trust “for all Ohio citizens, not just those residing in a single municipality.”
If the court is satisfied that Drewes Farm has established each of the four elements, it may grant a preliminary injunction.
At this time, the City of Toledo has not filed any responses to the complaint or motion; however, procedural rules require it to respond in a timely manner. Because it has not filed anything with the court, it is unclear how the City of Toledo intends to defend or respond. However, since enforcement of LEBOR had not been commenced against the Drewes Farm Partnership, it is possible that Toledo will challenge the plaintiff’s standing to sue at the present time.
The case is cited in court records as Drewes Farm Partnership v. City of Toledo, Ohio, 3:19-cv-00343 (N.D. Ohio). Stay tuned to the Ag Law Blog for updates about the case.
Whether producing crops, livestock, or other agricultural products, it can be challenging if not impossible for a farmer to completely prevent dust, odors, surface water runoff, noise, and other unintended impacts. Ohio law recognizes these challenges as well as the value of agricultural production by extending legal protections to farmers. The protections are “affirmative defenses” that can shield a farmer from liability if someone files a private civil lawsuit against the farmer because of the unintended impacts of farming. A court will dismiss the lawsuit if the farmer successfully raises and proves an applicable affirmative legal defense.
In our latest law bulletin, we summarize Ohio’s affirmative defenses that relate to production agriculture. The laws afford legal protections based on the type of activity and the type of resulting harm. For example, one offers protections to farmers who obtain fertilizer application certification training and operate in compliance with an approved nutrient management plan, while another offers nuisance lawsuit protection against neighbors who move to an agricultural area. Each affirmative defense has different requirements a farmer must meet but a common thread among the laws is that a farmer must be a “good farmer” who is in compliance with the law and utilizing generally accepted agricultural practices. It is important for farmers to understand these laws and know how the laws apply to a farm’s production activities.
To learn more about Ohio’s affirmative defenses for agricultural production activities, view our latest law bulletin HERE.
A few weeks ago we attended the American Agricultural Law Association’s (AALA) annual conference, which was held in Portland, Oregon this year. While we were there, we had the opportunity to learn about numerous topics related to agricultural law. One such topic was presented by our colleague from the National Sea Grant Law Center, Amanda Nichols. Nichols presented her research on state “right-to-farm” statutes and their applicability to aquaculture.
What is aquaculture?
For those who don’t know, aquaculture is defined by the National Oceanic and Atmospheric Administration (NOAA) as “the breeding, rearing, and harvesting of fish, shellfish, plants, algae, and other organisms in all types of water environments.” Thus, aquaculture is essentially the farming of aquatic species in freshwater and saltwater, in manmade and natural bodies of water.
What are right-to-farm laws?
Right-to-farm laws are meant to protect agricultural operations against nuisance lawsuits brought by neighboring landowners complaining about smell, dust, noise, or other annoyances. In terms of “traditional,” terrestrial farming, for example, right-to-farm laws could potentially protect against lawsuits claiming the spreading or accumulation of livestock manure is a nuisance to neighbors. Every state in the U.S. has their own right-to-farm statute, and some of the statutes protect farming operations more completely than others do. For example, Ohio’s right-to-farm language provides farmers with a complete defense to civil nuisance lawsuits when certain conditions are met. On the other hand, neighboring Michigan and Pennsylvania’s statutes provide no such defenses.
Where aquaculture and right-to-farm laws overlap
In her research on the topic of which states include protection of aquaculture operations in their right-to-farm laws, Nichols found that twenty-six states, including Ohio, “expressly include fish or aquaculture within the scope of their right-to-farm protections.” As a result, any right-to-farm protections to traditional agriculture, as well as any conditions agricultural operations must meet in order for the right-to-farm language to apply, would also extend to aquaculture in those twenty-six states. Nichols found that one state, New Jersey, did “not mention aquaculture or fish expressly” but has adopted a manual for best management practices (BMPs) for aquaculture within the state, which shows the state’s “intent” to protect aquaculture from nuisance lawsuits.
Ohio’s right-to-farm legislation
As mentioned above, Ohio’s right-to-farm legislation “expressly include[s]” aquaculture. It does so by defining “agricultural production” not only as “animal husbandry” or production of plants for “a commercial purpose,” but also as “commercial aquaculture” and “algaculture meaning the farming of algae.”
Ohio farmers, including those involved in aquaculture, have right-to-farm protection in two parts of the Ohio Revised Code (ORC). ORC Chapter 929 establishes “agricultural districts.” Generally, in order to place land in an agricultural district, the owner of the land must file an application with the county auditor. Certain requirements must be met in order for an application to be accepted. Slightly different rules apply if the land in question is within a municipal corporation or is being annexed by a municipality. If the application is accepted, the land is placed in an agricultural district for five years. The owner may submit a renewal application after that time is up.
Being part of an agricultural district in Ohio can help farmers and landowners to defend against civil lawsuits. ORC 929.04 reads:
In a civil action for nuisances involving agricultural activities, it is a complete defense if:
- The agricultural activities were conducted within an agricultural district;
- Agricultural activities were established within the agricultural district prior to the plaintiff’s activities or interest on which the action is based;
- The plaintiff was not involved in agricultural production; and
- The agricultural activities were not in conflict with federal, state, and local laws and rules relating to the alleged nuisance or were conducted in accordance with generally accepted agriculture practices.
The ORC’s chapter on nuisances provides additional protection for those “engaged in agriculture-related activities.” Under ORC 3767.13, people who are practicing agricultural activities “outside a municipal corporation, in accordance with generally accepted agricultural practices, and in such a manner so as not to have a substantial, adverse effect on public health, safety, or welfare” are typically exempt from claims of nuisance due to farm noise, smells, etc.
Not only is Ohio’s right-to-farm legislation more forceful in its protection of agriculture than many other states, but it also explicitly includes aquaculture under that protection. AALA gave us the chance to learn about this very interesting study of right-to-farm legislation as applies to aquaculture, which is an area of agriculture that many Ohioans might not necessarily think about. If you are interested in learning more about state right-to-farm laws and aquaculture, the National Sea Grant Law Center’s report is available here.