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FDA releases two FSMA draft guidance documents. The Food and Drug Administration recently released draft guidance documents explaining how to follow rules under the Food Safety Modernization Act (FSMA).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 The draft guidance document, in addition to information on how to submit a comment on the guidance, is available here.
The second draft guidance document is titled “Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption: Guidance for Industry.”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.
It's Farm Science Review week! Be sure to visit us in the Firebaugh Building to get your questions answered and pick up copies of our Law Bulletins and a helping of candy corn. We'll be speaking on "Pond Liability" at the Gwynne Conservation Area on Wednesday and on "Estate Planning: Mistakes to Avoid" in the Ask the Experts session everyday.
Here's our gathering of ag law news you may want to know:
Movement on Ohio “Watersheds in Distress” rules. As we have reported on several times this summer, Governor John Kasich signed an executive order on July 11, 2018 directing ODA to “consider whether it is appropriate to seek the consent of the Ohio Soil and Water Commission (OSWC) to designate” certain watersheds “as watersheds in distress due to increased nutrient levels resulting from phosphorous attached to soil sediment.” Since that time, ODA has submitted a proposed rule dealing with Watersheds in Distress. Amendments were made to the proposed rule after evaluating the first set of public comments, and ODA is now resubmitting the rules package. ODA reopened the proposed rule for public comments, but it closed the comment period on September 7, 2018. Information about the proposed rules, as well as how and where to comment, can be found here (click on the “Stakeholder Review” tab and then the “Soil and Water Conservation – Watersheds in Distress OAC 901:13-1” drop down option). A draft of the newly amended proposed rules is available here.
WOTUS woes continue. The Obama administration’s hotly contested “Waters of the United States” Rule is back in the news, and this time, where it applies is dependent on where you live. A background on the rule can be found in our previous blog post. The rule basically expanded which bodies of water qualify as “waters of the United States,” which in turn protected more waters under the Clean Water Act. The rule became effective in 2015. Since that time, U.S. District Courts in North Dakota and Georgia have issued preliminary injunctions against Obama’s WOTUS Rule, which means it cannot be carried out in twenty-four states. Additionally, last summer, the EPA and Army Corps of Engineers, under the direction of President Trump, announced their plan to repeal Obama’s WOTUS Rule and replace it with the definition of WOTUS “that existed prior to 2015” until a new definition could be developed. Trump’s rule was published on February 6, 2018, giving the administration until 2020 to come up with a new definition. However, in a ruling on August 16, 2018, in a U.S. District Court in South Carolina, Judge David Norton determined that the Trump administration “failed to comply with” requirements of the Administrative Procedure Act when it enacted its rule. This means that the Trump rule repealing and replacing the definition of WOTUS is invalidated. As a result of Judge Norton’s decision, in the remaining twenty-six states without an injunction, the Obama administration’s version of the rule has been reinstated. Ohio is one of the twenty-six states where the Obama rule currently applies. Will the Trump administration and the EPA respond to Norton’s decision by announcing yet another new WOTUS rule? Follow the Ag Law Blog for any updates. In the meantime, the country remains nearly split in half by which version of the WOTUS rule is carried out.
Regulators, meet “meat.” Under a new Missouri law, it is a criminal offense to misrepresent a product as “meat” if there is, in fact, no meat. Missouri’s revision of its meat advertising laws took effect on August 28th, and has been dubbed by many as the first attempt by a state to regulate what qualifies as meat. Defining meat as “any edible portion of livestock, poultry, or captive cervid carcass,” the law prohibits “misrepresenting a product as meat that is not derived from harvested production livestock or poultry.” Violations are treated as a misdemeanor, with a fine up to $1,000 and possible jail time. The Missouri Department of Agriculture has said that it intends to enforce the law, but that it plans to give affected companies until the start of next year to bring their labels into compliance. Supporters of the law, like the Missouri Cattlemen’s Association, argue that it will provide consumers with accurate information about their food, and also protect meat producers from unfair labeling of plant-based or lab-grown meat alternatives. Opponents have already filed a lawsuit to prevent enforcement, arguing that the law restricts free speech and improperly discriminates against out-of-state producers of meat alternatives. The named plaintiff on the lawsuit is Turtle Island Foods, an Oregon company that does business under the names Tofurky and The Good Foods Institute. The company makes plant-based food products, and is joined in its opposition by the American Civil Liberties Union of Missouri and the Animal Legal Defense Fund. Beyond Missouri, the National Cattlemen’s Beef Association has listed the issue as a top policy priority for this year, and the U.S. Cattlemen’s Association has petitioned the USDA to adopt stricter labeling requirements. As this issue develops, the Ag Law Blog will keep you updated.
USDA taps Commodity Credit Corporation to aid farmers. Readers are no doubt aware of global trade disputes in which other countries have increased tariffs on American agricultural exports. Given the extensive news coverage, the Harvest will not attempt to cover the dispute in depth; however, one point that has been less covered is the tool that the USDA has selected to provide relief to impacted farmers: the Commodity Credit Corporation. What is it? The Commodity Credit Corporation (CCC) is a federal government entity created during the Great Depression in 1933 to “stabilize, support, and protect farm income and prices.” Since 1939, it has been under the control of the Secretary of Agriculture, although it is managed by a seven member Board of Directors. CCC is technically authorized to borrow up to $30 billion from the U.S. Treasury at any one time, but due to trade agreements, that number is, in reality, much smaller. This gives USDA access to billions of dollars in funding without having to go to Congress first. The money can be used to provide loans or payments to agricultural producers, purchase agricultural products to sell or donate, develop domestic and foreign markets, promote conservation, and more. CCC has no staff, but is instead administered through other USDA agencies, largely the Farm Service Agency and Agricultural Marketing Service. On August 27th, Secretary of Agriculture Sonny Perdue announced that USDA plans to tap the Commodity Credit Corporation for up to $12 billion worth of aid to farmers affected by recent tariffs. The Market Facilitation Program will provide direct payments to eligible corn, cotton, dairy, hog, sorghum, soybean, and wheat producers, and the Food Purchase and Distribution Program will purchase up to $1.2 billion in select commodities. For more about the Commodity Credit Corporation, check out its website.
Bayer reports increasing number of lawsuits against newly acquired Monsanto. Bayer, the German pharmaceutical and life sciences company that acquired Monsanto early this summer, has indicated that there are an increasing number of lawsuits in the United States alleging that its weed killers cause cancer. According to the Wall Street Journal, there were roughly 8,700 plaintiffs seeking monetary damages from Bayer as of late August, a sharp increase from the 5,200 plaintiffs just months earlier. Many of these lawsuits involve cancer patients who claim that Monsanto’s glyphosate-containing herbicides like Roundup caused their cancer. As we reported in a previous edition of the Harvest, one person’s successful lawsuit against Monsanto resulted in a San Francisco jury award of $289.2 million for failing to warn consumers of the risks posed by its weed killers. Monsanto is expected to file motions for a new trial and for the judge to set aside the verdict, and may ultimately appeal the decision. These cancer-related claims come at a time when another Monsanto product, Dicamba, is causing great controversy. Stay tuned to the Ag Law Blog as these lawsuits continue to develop.
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.
Catharine Daniels, Attorney, OSUE Agricultural & Resource Law Program
The court's decision was not exactly what a group of farmers, seed sellers, and agricultural organizations was hoping for, but they are nevertheless claiming partial victory against Monsanto in a recent lawsuit centered on genetically modified seed. On June 10, 2013, the United States Court of Appeals denied the group's request for a judgment against Monsanto but at the same time declared that Monsanto would be judicially bound to its promise not to pursue future patent infringement suits against the growers, seed sellers or organizations for "inadvertently using or selling 'trace amounts' of genetically modified seeds."
Several farmers and organizations who grow, use, or sell conventional and organic seeds ("Seed Growers") filed a federal lawsuit against Monsanto in March of 2011. Ohioans in the group include the Ohio Ecological Food and Farm Association. The Seed Growers asked the court to declare some of Monsanto’s patents “invalid, unenforceable, and not infringed.” The Seed Growers claimed they had to forgo planting certain crops and had to take “costly precautions” to avoid contamination by Monsanto's genetically modified "Roundup Ready" seeds. Pointing to Monsanto's history of aggressive patent infringement litigation, the Seed Growers feared they would be sued by Monsanto despite their efforts to prevent unintended contamination. The Seed Growers also alleged adverse health effects and long term environmental impacts from the genetically modified seed. The federal court dismissed the case after determining that no traceable injury existed that the court could address, since none of the Seed Growers had actually been sued by Monsanto.
The Seed Growers appealed the decision to the Court of Appeals for the Federal Circuit. The court of appeals agreed that there was not a current traceable injury to the Seed Growers. But the appeals court also concluded that there was no risk of harm to the Seed Growers because Monsanto had “unequivocally disclaimed any intent to sue appellant growers, seed sellers, or organizations for inadvertently using or selling “trace amounts” of genetically modified seeds.” Even though Monsanto had denied the Seed Growers' request to enter into a written covenant not to sue, the appeals court held that Monsanto's promise to the Seed Growers throughout the lawsuit had the same effect as a written, signed agreement not to bring suit.
How Can the Court Enforce Monsanto's “Promises”?
Monsanto's promise not to sue the Seed Growers came through verbal representations made in the course of the federal court proceedings. How can the court hold Monsanto to such a promise? To do so, the appeals court relied on the unique legal doctrine of "judicial estoppel," which states that under certain circumstances, a party who makes a declaration in a legal proceeding will be bound to that statement and may not contradict the declaration in a future legal proceeding. The appeals court examined three factors that warrant a court's use of judicial estoppel:
- The party’s later position is clearly inconsistent with its prior position.
- The party successfully persuaded a court to accept its prior position.
- The party would derive an unfair advantage or impose an unfair detriment on the opposing party if the court didn't step in to enforce the promise.
According to the court, all three of these situations would exist if Monsanto later sued the parties for patent infringement, which requires the application of judicial estoppel to bind Monsanto to its promise.
But the Promise is Limited
Monsanto's promise was not to sue "inadvertent users or sellers of seeds that are inadvertently contaminated with up to one percent of seeds carrying Monsanto's patented traits." But what about growers who inadvertently use or sell seed containing greater than trace amounts; i.e. greater than one percent? Despite the appeals court's effort to clarify whether or not Monsanto would assert its patent rights in those situations, Monsanto would not state its position on the issue. Monsanto did make it clear that their view of an inadvertent infringement is quite narrow, stating that an "inadvertent infringer" would not include “those growers whose crops become accidentally contaminated, and who do not treat their fields with Roundup, but who, knowing of the contamination, harvest and replant or sell the seeds.” Thus in situations where growers inadvertently use or sell seed containing greater than trace amounts of Monsanto's seed, it is possible that Monsanto could bypass judicial estoppel and pursue a patent infringement case.
So Was this Really a Victory for the Organic Seed Growers?
While the Seed Growers did not obtain the declaratory judgments they sought against Monsanto, they did receive some protection from future litigation in the form of judicial estoppel. Because the appeals court concluded that the Seed Growers were not at risk of being sued by Monsanto, the court was able to avoid delving into the deeper issues of whether or not Monsanto's patents are valid, whether avoiding contamination is a burden to conventional farmers and whether Monsanto's seed poses health and environmental harms. The Seed Growers have expressed interest in requesting a review of the decision by the U.S. Supreme Court. Even if the case does not make its way to the Supreme Court, it surely isn't the last lawsuit we'll see that challenges genetically modified seed technology.
View Organic Seed Growers et al v. Monsanto here.
Tags: Monsanto, Organic Seed Growers and Trade Association v. Monsanto