It’s been a busy July in the ag law world, to say the least. The Ohio General Assembly officially passed the hemp bill and a budget, RMA adjusted its prevent plant restrictions, and we have seen more activity on LEBOR. With everything that is going on, it’s time for another ag law harvest. Here’s our latest gathering of agricultural law news you may want to know:
Ohio Department of Agriculture announces website for future hemp program. Just days after S.B. 57 took effect, the Ohio Department Agriculture (ODA) launched a new webpage declaring “Hemp Is Now Legal.” However, the webpage goes on to explain that hemp cultivation, processing, and research licenses, which are required to legally do those activities, are not yet available as the rules and regulations have not been developed. ODA says the goal is to have farmers licensed and able to start planting hemp by spring 2020. As for CBD, the webpage says that it is now legal to sell properly inspected CBD products in Ohio. Note the “properly inspected” caveat. ODA wants to test CBD products for safety and accurate labeling before the product is sold to Ohio consumers. If they have not already done so, those wanting to sell CBD products should contact ODA to have their product tested. You can view the new webpage HERE.
Judge says $2 billion damages award is too much in Roundup case. A California state judge recently reduced the punitive damages award granted to Alva and Alberta Pilliod from $2 billion to $69 million, and reduced their compensatory damages from $55 million to $17 million. All combined, the couple would still receive $86.7 million in damages. As we previously discussed, the couple successfully convinced a jury that the glyphosate in Roundup significantly contributed to causing their non-Hodgkin’s Lymphoma. In reducing the awards, the judge explained that the punitive damages were excessive and unconstitutional because they exceeded the U.S. Supreme Court’s restrictions. However, the judge denied Bayer’s request to strike the punitive damages award outright.
U.S. EPA denies petition to ban use of cholrpyrifos pesticide. Back in 2007, environmental groups petitioned to have the U.S. EPA revoke tolerances and registrations for the insecticide chlorpyrifos, citing harmful effects to people and nature. Without getting into the merits of the allegations, the timeline and history of the U.S. EPA’s decision is fairly interesting. The U.S. EPA had not completed its review of the chemical by 2015, so the groups took the agency to court, where they received a court order compelling the U.S. EPA to make a decision. The agency issued a proposed rule at the end of 2015 that would have revoked the tolerances; however, the federal court said that the U.S. EPA had not completed a full review nor properly responded to the 2007 petition. Even though it made a decision, the court wanted to see more evidence of a full administrative review. By the time the agency had a chance to fully review the chemical’s effects, the Obama EPA had turned into the Trump EPA. In March 2017, the U.S. EPA issued a denial order regarding the petition, which essentially threw out the petition. The environmental groups submitted an objection shortly after the denial order. By July 2019, the U.S. EPA had a chance to think some more and issued a final order denying the objections. As it stands now, the agency has decided not to revoke tolerances or registrations for chlorpyrifos. To read the agency’s final order denying the objections, click HERE.
Animal Disease Traceability program to require RFID tagging for cattle and bison by 2023. The USDA’s Animal and Plant Health Inspection Service is looking to fully bring animal disease traceability into the digital world, at least for beef and dairy cattle and bison. By requiring radio frequency identification (RFID) tags, the service says that animal health officials would be able to locate specific animals within hours of learning about a disease outbreak, significantly less than with paper records. Starting at the end of 2019, the USDA will stop providing free metal tags, but would allow vendors to produce official metal tags until the end of 2020. At that time, only RFID tags may be used as official tags. Starting on January 1, 2023, RFID tags will be required for beef and dairy cattle and bison moving interstate. Animals previously tagged with metal ear tags will have to be retagged, but feeder cattle and animals moving directly to slaughter will be exempt. To learn more, view the USDA’s “Advancing Animal Disease Traceability” factsheet HERE.
Senators want to fund more ag and food inspectors at U.S. ports of entry. Citing the national interest to protect the nation’s food supply, four U.S. Senators have introduced a bill that would provide the U.S. Customs and Border Protection with additional funding over the next three years. In each of the three fiscal years, the funds would be used to hire, train, and assign 240 additional agriculture specialists, 200 new agriculture technicians who provide support to the agriculture specialists, and 20 new canine teams. The personnel would work at U.S. ports of entry, including seaports, land ports, and airports across the country. If passed, S.2107 would require the Comptroller General of the United States to brief congressional committees one year after the bill’s enactment on how well federal agencies are doing at coordinating their border inspection efforts and how the agriculture specialists are being trained. The bill comes months after U.S. Customs and Border Protection seized nearly a million pounds of Chinese illegally smuggled pork from China, where African swine fever has ravaged the country’s pork industry. For more information about the bill, click HERE.
Cannabis decriminalization bill introduced in Congress. Congressman Jerrold Nadler (D-NY) has introduced H.R. 3884 with the aim to do four things: 1) decriminalize cannabis at the federal level, 2) remove cannabis from the federal controlled substances schedules, 3) provide resources and rehabilitation for certain people impacted by the war on drugs, and 4) expunge certain criminal convictions with a cannabis connection. The bill currently has 30 co-sponsors, including 29 Democrats and 1 Republican. None of Ohio’s members of Congress have signed on as a co-sponsor at this time. The bill follows the recent change in status for hemp, which found favor in the 2014 and 2018 Farm Bills. However, that change in status was largely predicated on the argument that hemp is not marijuana, so it remains to be seen whether the political climate is ready to loosen restrictions on marijuana as well. For more information about the bill, click HERE.
A jury recently returned a verdict awarding a California couple $2.055 billion (yes, billion) in damages after the couple alleged that the glyphosate in Roundup caused their cancer. This is the third California jury to be convinced that the Monsanto herbicide, which was acquired by Bayer last year, caused or substantially contributed to a cancer diagnosis of non-Hodgkin lymphoma. A lot has happened since we last reported on these lawsuits HERE and HERE, so it is time to look at the glyphosate lawsuits, jury verdicts, and the larger debate.
Thousands of glyphosate lawsuits have been filed against Monsanto/Bayer. Over 13,000 cases have been filed alleging almost the same thing: that a plaintiff’s cancer was caused by the glyphosate in Roundup. About two years ago there were only a few hundred such cases. News stories about large jury verdicts have caught people’s attention, as have commercials that some law firms have aired to find clients for this type of litigation. The vast majority of these cases have been brought in state courts, which have a reputation for being somewhat quicker than federal courts, but there are still over a thousand in federal courts across the country. So far, only three of these cases have reached a jury, and all have been in California.
First California jury awarded a plaintiff $289 million. Dewayne Johnson was a school groundskeeper who routinely used Roundup as part of his job. He was diagnosed with non-Hodgkin’s lymphoma in 2014, and believed that his diagnosis was a result of at least two prior incidents where he was soaked with Roundup. His lawsuit against Monsanto in California state court was chosen to be the first case to be tried before a jury because his doctors did not expect him to live for much longer.
The San Francisco jury sided with Mr. Johnson and awarded him $39 million in compensatory damages, and $250 million in punitive damages. Compensatory damages are meant to directly compensate for harm, and can include medical expenses, lost wages, and emotional distress. Punitive damages, on the other hand, are meant to punish the party in the wrong and deter a similar course of conduct in the future. The judge in the case ultimately reduced the punitive damages to match the compensatory damages, leaving Mr. Johnson with a potential $78 million recovery. However, the decision is on appeal.
Second California jury awarded a plaintiff $80 million. Edwin Hardeman sprayed Roundup on his property for about three decades. In 2014, he was diagnosed with non-Hodgkin’s lymphoma, and decided to file a lawsuit two years later after learning about research connecting his form of cancer to Roundup use. His lawsuit was the first to be heard in federal court. This San Francisco jury awarded Mr. Hardeman $5.8 million in compensatory damages, and $75 million in punitive damages. However, the decision is also on appeal.
Third California jury awarded the plaintiffs $2.055 billion. The first two cases certainly sent shock waves through the news, but the size of this third jury award sent more than just shock. The plaintiffs, Alva and Alberta Pilliod, are a California couple who were diagnosed with non-Hodgkin’s lymphoma within four years of each other. The jury awarded the couple $55 million in compensatory damages, along with $1 billion in punitive damages each. Bayer has promised to appeal this decision as well.
Will the parties ultimately get these punitive damages? It is hard to answer this question just yet, but it is likely that the punitive damages awards will be reduced. Courts are often hesitant about awarding punitive damages absent bad intentions by the party being punished, and few verdicts result in a punitive damages award. When they are awarded, there are constitutional limitations on how large the award can be. The U.S. Supreme Court has said that a punitive damages award that exceeds a compensatory damages award by more than a single digit multiplier likely violates a party’s due process rights and is not likely to be upheld. This means that if a punitive damages award exceeds nine or ten times the compensatory damages, courts are to look at that jury’s decision with a high level of suspicion. However, such an award could ultimately be awarded if the evidence of bad intent merits such an award, and if such award is necessary to deter future bad acts.
Bayer’s first hope on appeal is to have the jury decisions invalidated altogether by arguing that the juries were incorrect in linking these plaintiff’s cancer to their prior use of Roundup. In order to succeed, it must prove that the decisions of the three juries were against the “manifest weight of the evidence,” meaning that they relied too much on one pile of evidence leaning one way while ignoring a mountain of evidence going the other way. If it can succeed on this, then it would not have to pay damages to the plaintiffs. However, this can be a high burden for an appellant to satisfy because of our legal system’s deference to juries. If Bayer cannot succeed on avoiding fault, it would still argue that the jury awards are excessive.
In the first case, the initial jury award had a single digit multiplier of roughly six; however, the judge viewed even that multiplier as excessive and reduced the punitive damages award to match the compensatory damages award. In the second case, the initial jury award had a multiplier of over twelve, which could give Bayer a strong argument on appeal if it is ultimately determined that it must pay the plaintiffs. However, Bayer is also challenging the basis of the jury’s decision on appeal.
The third case is simply on a different level. The $2 billion in punitive damages is 36 times the compensatory damages awarded to the couple. The trial judge may respond like the first trial judge and reduce the compensatory damages award; however, that is not a guarantee. What is likely a guarantee is that Bayer will appeal.
Does glyphosate cause non-Hodgkins lymphoma? This question will continue to be a debate for years, and we as attorneys are not in the best spot to make any sorts of determinations based on the scientific research. The U.S. Environmental Protection Agency and a number of scientific studies say no; however, the World Health Organization said in 2015 that glyphosate was “probably carcinogenic to humans.” It was that announcement, and some research that followed, which triggered the wave of lawsuits we see today. Bayer is using the first set of research to defend its product, while the plaintiffs are using the second set of research to attack Roundup. The attorneys in the first three cases tried to undercut Bayer’s use of EPA and university research by arguing Monsanto had influenced the first set of research in a manner favorable to it.
For better or worse, what matters in a jury trial is less what the science says, and more what the jury believes the science says. So far, three California juries have been convinced that there is enough science to say that glyphosate caused or contributed to the cancer of four plaintiffs. The first non-California cases are beginning to be scheduled for later this year, including in Monsanto’s former home in St. Louis. As of now, it remains to be seen whether the first three cases will be the outliers or the norms for the glyphosate litigation nationwide.
All is quiet at the statehouse as the Ohio legislature continues on its summer recess, but here’s our gathering of other agricultural law news you may want to know:
Does Roundup cause cancer? A jury in California has determined that it’s possible. The jury awarded $289 million last Friday against Monsanto in the first of thousands of cases alleging that Monsanto should have warned users about Roundup’s cancer risk. The plaintiff argued that Monsanto has known for decades that the Roundup product could cause cancer but failed to warn consumers, while Monsanto claimed that more than 800 studies and reviews conclude that glyphosate itself does not cause cancer. Monsanto plans to appeal the award.
Pursuing a Bill of Rights for Lake Erie. The Toledoans for Safe Water submitted over 10,500 signatures last week on a petition proposing to amend the city’s charter to establish a bill of rights for Lake Erie. The proposed bill of rights would state that Lake Erie and its watershed possesses a right to exist, flourish and naturally evolve; that the people of Toledo have a right to a clean and healthy Lake Erie, a collective and individual right to self-government in their local community and a right to a system of government that protects their rights; and that any corporation or government that violates the rights of Lake Erie could be prosecuted by the city and held legally liable for fines and all harm caused. The effort is backed by the Community Environmental Legal Defense Fund. If successful, the initiative would appear on the November ballot for Toledo residents.
EPA ordered to ban the sale of chlorpyrifos. The U.S. Ninth Circuit Court of Appeals late last week ordered the U.S. EPA within 60 days to cancel all registrations for chlorpyrifos, a pesticide first introduced by Dow and commonly used on crops and animals. The court held that there was no justification for a decision by previous EPA Administrator Scott Pruitt refusing to grant a petition to ban chlorpyrifos in the face of scientific evidence that the pesticide can cause neurodevelopmental damage in children. The court also discarded the agency’s argument that it could refuse to ban chlorpyrifos so based on a possible contradiction of evidence in the future. Both actions, said the court, placed the agency in direct violation of the Federal Food, Drug, and Cosmetic Act and the Federal Insecticide, Fungicide and Rodenticide Act. The highest uses of chlorpyrifos are on cotton and corn crops and almond and fruit trees.
Highest award in Smithfield nuisance litigation raises responses. The third and largest jury award in a series of nuisance lawsuits in North Carolina yielded a $473.5 million award for plaintiffs claiming harm from hog farms owned by Smithfield. The verdict will reduce to $94 million due to a state law that caps punitive damages. Agricultural interests are claiming that the lawsuits circumvent state right to farm laws and are seeking state legislative responses. Opponents are also hoping to reverse a gag order issued by the court to impose communication restrictions on potential witnesses, parties and lawyers in the cases. The federal judge in the case, Hon. Earl Britt from the Eastern District of North Carolina, is stepping down due to health issues. Hon. David Faber of the Southern District of West Virginia will replace Judge Britt and will soon hear a fourth trial that targets a 7,100 head hog farm in Sampson County, North Carolina.
It’s official: no reporting of air emissions from animal waste. The U.S. EPA has posted a final rule clarifying that air emissions from animal waste at farms are exempt from federal regulations that require the reporting of air releases from hazardous wastes. The rule implements an order by the U.S. Court of Appeals for the District of Columbia and revisions in the Fair Agricultural Reporting Method Act enacted by Congress earlier this year. We reported on the court case and legislation earlier this year.
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.