U.S. Constitution
We are back with another edition of the Ag Law Harvest, where we bring you rulings, laws, and regulations that affect the agricultural industry. This month's Ag Law Harvest is bringing the heat with H-2A wage rule injunctions, cultivated meat ban challenges, sales and use tax issues, and an emergency order from the EPA.
Federal Judge in Georgia Blocks H-2A Wage Rule for Named Plaintiffs. A Georgia federal judge has limited the U.S. Department of Labor's enforcement of a rule titled "Improving Protections for Workers in Temporary Agricultural Employment in the United States" (the “Final Rule”). This rule, challenged by 17 states led by Kansas and Georgia, as well as by Miles Berry Farm and the Georgia Fruit and Vegetable Growers Association (the “Plaintiffs”), is claimed to be unconstitutional. The Plaintiffs argued that the Final Rule violates the 1935 National Labor Relations Act (the “Act”) by granting H-2A farmworkers greater organizing and collective bargaining rights than those afforded to U.S. citizen agricultural workers, effectively bypassing the Act. The U.S. District Court in Georgia sided with the plaintiffs, ruling that the Department of Labor's Final Rule improperly creates a right that Congress did not intend and did not create by statute. The court emphasized that administrative agencies, including the DOL, cannot create laws or rights that Congress has not established. The court criticized the DOL for overstepping its authority, stating that while the DOL can assist Congress, it cannot assume the role of Congress. The court granted a preliminary injunction prohibiting the DOL from enforcing the Final Rule, but only for the Plaintiffs. Thus, the preliminary injunction will only apply in Georgia, Kansas, South Carolina, Arkansas, Florida, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, Nebraska, North Dakota, Oklahoma, Tennessee, Texas, and Virginia. The injunction will also apply to Miles Berry Farm and the Georgia Fruit and Vegetable Growers Association. We will keep you updated as the case goes up on appeal and how this ruling affects other H-2A lawsuits across the country.
Florida Cultivated Meat Ban Challenged. A California business has filed a federal lawsuit against the state of Florida, challenging a law that bans the sale of cultivated meat. The company argues that Florida's prohibition is unconstitutional, claiming it violates their right to engage in interstate commerce by restricting their ability to sell their products across state lines. Upside Foods, Inc., the California based company, alleges that Florida Senate Bill 1084 (“SB 1084”), which bans the manufacture, distribution, and sale of cultivated meat, violates the U.S. Constitution’s Supremacy Clause because SB 1084 “is expressly preempted by federal laws regulating meat and poultry products.” Furthermore, Upside Foods alleges that SB 1084 violates the U.S. Constitution’s Dormant Commerce Clause because SB 1084 “was enacted with the express purpose of insulating Florida agricultural businesses from innovative, out-of-state competition like UPSIDE.” Upside Foods has asked the district court in Florida to declare SB 1084 unconstitutional and to issue an injunction preventing SB 1084’s enforcement. Proponents of SB 1084 argue that the law protects Floridians, however, Upside Foods alleges that the Florida ban isn’t meant to protect the public, rather it was passed to “protect in-state agricultural interests from out-of-state competition.”
Board of Tax Appeals Finds Utility Vehicle Not Exempt Under Agricultural Sales Tax Exemption. Claugus Family Farm LP (CFF), an Ohio timber farm, purchased a 2015 Mercedes-Benz utility vehicle and claimed it was exempt from sales tax under Ohio’s Agricultural Sales Tax Exemption. After an audit, the Ohio Department of Taxation assessed the sales tax on the vehicle. CFF petitioned for reassessment, but the Ohio Tax Commissioner determined that CFF did not provide enough evidence to prove the vehicle was primarily used for farming as required by law. CFF then appealed to the Ohio Board of Tax Appeals, arguing that the vehicle was mainly used for farming operations, such as transporting people around the farm, monitoring tree health, applying pesticides, maintaining equipment, and carrying supplies. CFF claimed the vehicle was used 95% of the time on farming activities. Upon review, the Board of Tax Appeals noted that “the use of vehicles for transportation around a farm, as well as general uses such as delivering parts and cutting and hauling of wood and brush, do not constitute direct farming activities.” The Board held that the vehicle was used primarily for these purposes and not directly in farming and thus found the vehicle to be subject to Ohio’s sales and use tax.
EPA Emergency Order Suspends Use of Pesticide DCPA/Dacthal. On August 7, 2024, the U.S. Environmental Protection Agency (“EPA”) issued an Emergency Order immediately suspending the registration and use of all pesticides containing dimethyl tetrachloroterephthalate (“DCPA” or “Dacthal”). The EPA cited the danger the substance poses to pregnant women and unborn babies. The agency determined that the continued sale, distribution, or use of DCPA products during the cancellation process would present an imminent hazard, justifying the emergency suspension without a prior hearing. Despite efforts by AMVAC Chemical Corporation, the sole registrant of DCPA products, to address these concerns, the EPA concluded that no practicable mitigations could make the use of DCPA safe.
Tags: ag law harvest, H-2A, pesticides, EPA, Cultivated Meat, U.S. Constitution, Ohio Sales Tax, Agricultural Sales Tax Exemption, Ag Law, Farm Law
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Did you know that female turkeys can lay a fertilized egg without mating? This process is called parthenogenesis, a type of asexual reproduction that can also occur in other types of animals including invertebrates, fish, and lizards. In turkeys, this process always produces a male chick. The likelihood of an embryo from parthenogenesis surviving to chick-hood is small, but possible.
In this edition of the Ag Law Harvest and in the spirit of Thanksgiving, we are thankful for the opportunity to present to you the newly proposed definition of “waters of the United States”, Kansas’s battle to protect agricultural facilities, and food labeling cases from across the country.
EPA and Army Corps of Engineers propose rule to establish the definition of “waters of the United States.” The EPA and Army Corps of Engineers announced a proposed rule to return the definition of “waters of the United States” (“WOTUS”) to the pre-2015 definition with a few updates to reflect Supreme Court decisions. In 2020, the Navigable Waters Protection Rule went into effect and interpreted WOTUS to include: “(1) territorial seas and traditional navigable waters; (2) tributaries of such waters; (3) certain lakes, ponds, and impoundments of jurisdictional waters; and (4) wetlands adjacent to other jurisdictional waters (other than jurisdictional wetlands).” On January 20, 2021, President Biden signed Executive Order 13990 directing all executive agencies to review and address any federal regulations that went into effect during the previous administration. After reviewing the Trump Administration’s Navigable Waters Protection Rule, the agencies determined that the rule is significantly reducing clean water protections. The new rule proposed by the agencies seeks to interpret WOTUS to include: (1) traditional navigable waters; (2) interstate waters; (3) the territorial seas and their adjacent wetlands; (4) most impoundments of WOTUS; (5) tributaries to traditional navigable waters, interstate waters, the territorial seas, and impoundments, that meet either the relatively permanent standard of the significant nexus standard; (6) wetlands adjacent to impoundments and tributaries, that meet either the relatively permanent standard or the significant nexus standard; and (7) “other waters” that meet either the relatively permanent standard or the significant nexus standard. The agencies will be taking comment on the proposed rule for 60 days once the rule is published in the Federal Register.
Kansas Attorney General asks Supreme Court to review Kansas “Ag Gag” Law. Derek Schmidt, Attorney General of Kansas, has asked the United States Supreme Court to review the Kansas Farm Animal and Field Crop and Research Facilities Protection Act (the “Act”) which criminalizes the unauthorized access to agricultural facilities without consent of the owner of the facility with the intent to damage the business of the facility. Under the Act, consent is not effective if it is “[i]nduced by force, fraud, deception, duress or threat.” Earlier this year, the 10th Circuit Court of Appeals found the Kansas law to be unconstitutional by violating the free speech clause in the First Amendment of the United States Constitution and prohibited Kansas from enforcing the Act. Now, Derek Schmidt has petitioned the Supreme Court to review the Kansas law arguing that the Act does not violate the First Amendment because the Act regulates conduct not speech. The Attorney General goes on to argue that even if trespass by deception were to be considered a form of speech, it is a form of speech that is not protected by the First Amendment. The Attorney General reasoned that the Act protects a private property owner’s right to exclude and that the First Amendment does not provide a license to violate a person’s property rights.
Oklahoma’s meat labeling law on trial. Earlier this month, the Plant Based Foods Association and the Tofurky Company (“Plaintiffs”) filed an amended complaint challenging Oklahoma’s Meat Consumer Protection Act (the “Act”) alleging that the Act violates the dormant commerce clause, the due process clause, and the supremacy clause of the United States Constitution. Plaintiffs allege that the Oklahoma law “institutes a protectionist trade barrier” that is contrary to and preempted by federal law. According to Plaintiffs, the Act “forbids plant-based meat producers from using meat terms unless they include a disclaimer on their product labels in the same type size and prominence to the ‘name of the product’ that their plant-based products are not actually meat derived from animals.” Plaintiffs argue that the Oklahoma law would require plant-based meat producers to develop Oklahoma specific labels or abandon the Oklahoma market which is essentially interfering with interstate commerce and in violation of established federal law. This case is set for trial in 2022. But, this is not the first time the Oklahoma law has been challenged on constitutional grounds. Plant Based Foods Association and Upton’s Naturals Company also filed suit alleging the Oklahoma law violated the First and Fourteenth Amendments of the Constitution. However, a Federal District Court in Oklahoma denied an injunction to prevent Oklahoma from enforcing the law. The court found that the disclosure requirement in the Act is reasonably related to Oklahoma’s interest in preventing the confusion or deception of consumers. The court reasoned that the commercial speech at issue could potentially be misleading to reasonable consumer. The court argued that “the possibility of deception flowing from the use of meat-related terms for the plant-based products is self-evident from the natural inference a consumer would draw from the meat-related terms used.” This not the end of the battle for the Oklahoma law, there will likely be appeals to higher courts to help settle the dispute.
Pepperidge Farm sued over “Golden Butter” cracker label. Hawa Kamara decided to file a lawsuit against Pepperidge Farm, Inc. after purchasing “Golden Butter” crackers at a local Target store in New York. According to the ingredients list attached to Kamara’s complaint, the crackers were made with butter but also included vegetable oils. Kamara asserted that the presence of vegetable oils makes the “Golden Butter” packaging misleading and/or deceptive because a reasonable consumer would conclude the crackers were “all or predominantly made with butter.” A Federal District Court in New York, however, did not find the packaging misleading or deceptive. The court reasoned that “the packaging accurately indicated that the product contained butter, and the ingredients list confirmed that butter predominated over other oils and fats.” Further, the court argued that a reasonable consumer could believe the “Golden Butter” labeling described the product’s flavor and not the ingredient proportions. Ultimately, the court decided to dismiss the case against Pepperidge Farm because Kamara’s complaint did not plausibly allege that the “Golden Butter” packaging materially misrepresented the ingredients in the crackers.
Thank you for reading and we hope that everyone has a happy and safe Thanksgiving!!
Tags: WOTUS, Food Labeling, EPA, Army Corps of Engineers, Ag Gag, U.S. Constitution
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Did you know that elephants can’t jump? In fact, it’s impossible for elephants to jump because, unlike most mammals, the bones in an elephant’s leg are all pointed downwards, which eliminates the “spring” required to push off the ground.
Unlike elephants, we have jumped all over the place to bring you this week’s Ag Law Harvest. Below you will find agricultural and resource law issues that include, among other things, conspiracy, preemption, succession planning support, ag spending and disaster relief, and Ohio’s broadband and salmon expansion.
Poultry price fixing conspiracy. According to a press release from the Department of Justice (“DOJ”) a federal grand jury has decided to indict Koch Foods and four former executives of Pilgrim’s Pride for allegedly engaging in a nationwide conspiracy to fix prices and rig bids for broiler chicken products. These indictments combine to make a total of 14 individuals charged in the conspiracy that allegedly started in 2012 and lasted until 2019. The indictments allege that the defendants and co-conspirators conspired to suppress and eliminate competition for sales of broiler chicken products sold to grocers and restaurants. The DOJ reiterated its commitment to prosecuting price fixing and antitrust violations. These indictments come on the heels of President Biden’s Executive Order seeking to promote competition within the American Economy, which focused heavily on the agriculture industry. In addition to Koch Foods, additional companies have been indicted in the conspiracy. So far, Claxton Poultry and Pilgrim’s Pride have both been indicted in the conspiracy with Pilgrim’s Pride agreeing to pay a $107 million fine. Koch Foods denies any involvement in the price fixing scheme.
FIFRA giving Monsanto a little relief. About a week before the trial of another lawsuit against the Monsanto Company (“Monsanto”) and its Roundup products, a California judge dismissed some of the claims filed by the plaintiff. According to the judge, some of the claims asserted by the plaintiff were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) and therefore could not be pursued. The plaintiff claimed that Monsanto had a state-law duty to warn that Roundup causes cancer. The judge noted that under FIFRA, a state cannot impose or continue to impose any requirement that is “in addition to or different from” those required by FIFRA. At the time, federal regulations did not require Monsanto to place a cancer warning on its Roundup products. The judge reasoned that since federal law is supreme (i.e. preempts state law) California cannot impose a state-law duty on Monsanto to warn that Roundup causes cancer. The judge, therefore, found that the plaintiff cannot pursue her claims against Monsanto for failure to warn under California law. This ruling is in contrast to a recent 9th Circuit Court of Appeals decision which concluded that the failure to warn claims brought by the plaintiff in that suit were not preempted by FIFRA. Plaintiff has time to appeal the judge’s decision, even beyond the start of the trial and could rely on the 9th Circuit’s opinion to help her argue that her claims should not have been dismissed.
Competitive loans now available for land ownership issues and succession planning. The USDA announced that it will be providing $67 million in competitive loans through the new Heirs’ Property Relending Program (“HPRP”). The HPRP seeks to help agricultural producers and landowners resolve land ownership and succession issues. Lenders can apply for loans up to $5 million at 1% interest through the Farm Service Agency (“FSA”) once the two-month signup window opens in late August. Once the lenders are selected, heirs can apply to those lenders for assistance. Heirs may use the loans to resolve title issues by financing the purchase or consolidation of property interests and for costs associated with a succession plan. These costs can include buying out fractional interests of other heirs, closing costs, appraisals, title searches, surveys, preparing documents, other legal services. Lenders will only make loans to heirs who: (1) look to resolve ownership and succession of a farm owned by multiple owners; (2) are a family member or heir-at-law related by blood or marriage to the previous owner; and (3) agree to complete a succession plan. The USDA has stated that more information on how heirs can borrow from lenders under the HPRP will be available in the coming months. For more information on HPRP visit https://www.farmers.gov/heirs/relending.
House Ag Committee approves disaster relief bill. The House Agriculture Committee approved an $8.5 billion disaster relief bill to extend the Wildfire and Hurricane Indemnity Program (“WHIP”). The bill, known as the 2020 WHIP+ Reauthorization Act, provides relief for producers for 2020 and 2021 related to losses from the ongoing drought in the western half of the United States, the polar vortex that hit Texas earlier this year, wildfires that tainted California wine grapes with smoke, and power outages, like the one seen during the polar vortex in Texas, which caused dairy farmers to dump milk. The bill makes it easier for farmers to recover for losses related to drought, now only requiring a D2 (severe) designation for eight consecutive weeks as well as allowing disaster relief payments for losses related to power outages that result from a qualified disaster event. With the Committee’s approval the bill makes its way to the house floor for a debate/vote. Whether it’s a standalone bill or a bill that is incorporated into an appropriations bill or a year-end spending measure remains to be seen.
Senate Appropriations Committee approves ag spending bill. The Senate Appropriations Committee voted in favor of a fiscal year 2022 spending bill for the USDA and FDA that includes about $7 billion in disaster relief and $700 million for rural broadband expansion. The Committee approved $25.9 billion for the FY2022 ag spending bill, which is an increase of $2.46 billion from the current year. In addition to disaster relief funds and rural broadband, the bill increases research funding to the USDA, increass funding for conservation and climate smart agricultural practices, and increases funding for rural development including infrastructure such as water and sewer systems and an increase in funding to transition rural America to renewable energy. The ag spending bill is now set for debate and vote by the full Senate.
Ohio to be the second site for AquaBounty’s genetically engineered salmon. Land-based aquaculture company AquaBounty has selected Pioneer, Ohio as the location for its large-scale farm for AquaBounty’s genetically engineered salmon. The new farm will be AquaBounty’s first large-scale commercial facility and expects to bring over 100 jobs to northwestern Ohio. According to AquaBounty’s press release, the plan for the new farm is still contingent on approval of state and local economic incentives. Ohio is still finalizing a package of economic incentives for the new location and AquaBounty hopes to begin construction on the new facility by the end of the year. AquaBounty has modified a single part of the salmon’s DNA that causes them to grow faster in early development. It raises its fish in what it calls “Recirculating Aquaculture Systems,” which are indoor facilities that are designed to prevent disease and protect wild fish populations. According to AquaBounty, its production methods offer a reduced carbon footprint and no risk of pollution of marine ecosystems as compared to traditional salmon farming. AquaBounty anticipates commercial production to begin in 2023.
DeWine orders adoption of emergency rules to speed up the deployment of broadband in Ohio. Governor Mike DeWine signed an executive order which will help speed up the launch of the Ohio Residential Broadband Expansion Grant Program (the “Program”) which was recently signed into law by Governor DeWine. The Program is Ohio’s first-ever residential broadband expansion program which grants the Broadband Program Expansion Authority the power to review and award Program grant money for eligible projects. The Program requires a weighted scoring system to evaluate and select applications for Program grants. Applications must be prioritized for unserved areas and areas located within distressed areas as defined under the Urban and Rural Initiative Grant Program. The Program hopes to provide high-speed internet to Ohio residences that do not currently have access to such services. With DeWine’s executive order, the Program can start immediately rather than waiting until the lengthy administrative rule making process is complete. Normally, rules by a state agency must go through a long, drawn out process to ensure the public has had its input on any proposed rules and those affected the most can challenge or argue to amend the rules. However, the Governor does have the ability to suspend the normal rule making process when an emergency exists requiring the immediate adoption of rules. According to Governor DeWine’s executive order, the COVID-19 pandemic, the increase in telework, remote learning, and telehealth services have created an emergency that allows DeWine to suspend the normal rule making process to allow the Program to be enacted without delay. Although emergency rules are in place, they are only valid for 120 days. New, permanent rules must be enacted through the normal rule making procedure.
Tags: Estate and Succession Planning, broadband, USDA, Ag Spending Bill, Disaster Relief, FIFRA, U.S. Constitution
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