Written by: Evin Bachelor, Law Fellow
Welcome to 2019 from all of us at the OSU Extension Agricultural and Resource Law Program! With a new Congress, a new Ohio General Assembly, and a new slate of leaders atop Ohio’s executive offices, we are expecting a flurry of activity in the new year. Our resolution this year is to keep you in the know about agricultural law news, and maybe find some time to exercise.
Here’s our latest gathering of agricultural law news that you may want to know:
U.S. Supreme Court declines to hear state livestock standard lawsuits. In a previous blog post, we noted that California and Massachusetts had adopted laws that would require sellers of certain meats and eggs to follow heightened animal care standards in order to sell those products within California or Massachusetts. Thirteen states, led by Indiana, quickly sued Massachusetts to stop its law from taking effect. Missouri led another group of thirteen states in suing California.
Indiana and Missouri had attempted to have their cases brought directly before the U.S. Supreme Court, arguing that the U.S. Supreme Court has “original jurisdiction” over claims between states. After the states filed their arguments with the Supreme Court, the justices asked the U.S. Solicitor General whether he believed these cases were appropriate for the Court’s original jurisdiction. The Solicitor General filed briefs in the Indiana v. Massachusetts and Missouri v. California maters, and suggested that the Supreme Court should not exercise original jurisdiction because, among other things, the states lack the proper standing to sue. Here, this argument essentially means that the resulting harm from enforcement of the statutes would not harm the states as states, but only some of their citizens, and that those citizens may still sue California or Massachusetts for their individualized harm.
The Supreme Court took the position of the Solicitor General and denied the requests of Indiana and Missouri to have the cases brought before the Court. Any further action will have to be taken through the lower courts. For more information about the Missouri v. California matter as argued to the Supreme Court, click here. For more information about the Indiana v. Massachusetts matter as argued to the Supreme Court, click here.
USDA not required to adopt Obama-era “Farmer Fair Practice Rules,” according to federal appeals court. In December 2016, the USDA published the Farmer Fair Practices Rules as an interim final rule, and published two amendments to its rules that deal with the Packers and Stockyards Act. The amendments addressed the ease of bringing a lawsuit for unfair and uncompetitive business practices under the Packers and Stockyards Act. The rule was set to take effect at the end of February 2017, although the amendments were only proposals that had not fully gone through the required notice and comment process. In early February 2017, citing the President’s regulatory freeze, and arguing that the rule would cause more litigation and confusion, the USDA postponed, and ultimately withdrew, the rule. The USDA also did not take action on the two proposed amendments. The Organization for Competitive Markets sued to stop the USDA from withdrawing the interim final rule, and to compel the USDA to promulgate the two amendments, arguing that the 2008 Farm Bill requires action by the USDA.
On December 21, 2018, the United States Court of Appeals for the Eighth Circuit denied the Organization for Competitive Markets’ request for review. The court explained that the USDA did not fail to fulfill its mandate, describing Congress’s language as ambiguous. Further, the court said that the USDA’s withdrawal of the interim final rule followed the proper notice and comment procedures. Ultimately the court believed that Congress has been monitoring this issue and if Congress wishes for a more specific action, then Congress should act. The court’s opinion in Organization for Competitive Markets v. USDA, No. 17-3723 (8th Cir. 2018) is available here.
Funding for National Weather Service and National Algal Bloom Program receives President’s signature. On Monday, January 7th, President Trump signed Senate Bill 2200, which passed during the previous Congress. The bill increases funding for the National Weather Service’s agriculture related weather monitoring and forecasting from $26.5 million in 2019 to $28.5 million by 2023. The Office of Oceanic and Atmospheric Research, the research arm of the National Oceanic and Atmospheric Administration (NOAA), will see an increase in funding from $136.5 million in 2019 to $154 million by 2023. The bill also instructs NOAA to “plan the procurement of future data sources and satellite architectures,” essentially instructing NOAA to think about cost-effective ways to upgrade weather monitoring systems both on the ground and in space. The National Integrated Drought Information System will also see an increase in funding from $13.5 million this year to $14.5 million by 2023. The program is to use some of the funding to “develop a strategy for a national coordinated soil moisture monitoring network” within the next year. Finally, the bill also reauthorizes $20.5 million each year through 2023 for relief from hypoxia or harmful algal blooms “of national significance,” which the bill defines as “a hypoxia or harmful algal bloom event that has had or will likely have a significant detrimental environmental, economic, subsistence use, or public health impact on an affected state.” For the text of the act, visit Congress’s webpage here.
Ohio Case Law Update
- Ohio Power Citing Board cannot extend construction certificate for wind farm by simple motion, but must follow amendment process, according to the Ohio Supreme Court. Black Fork Wind Energy filed an application with the Ohio Power Citing Board (“the board”) to construct a wind farm in Crawford and Richland Counties in 2011, and the board approved the application in January 2012. Black Fork had five years, until January 2017, to begin construction on the project. The project was delayed due to a lawsuit challenging the project, and Black Fork sought an additional two years to begin construction. The board granted Black Fork’s motion without a full application to amend and investigation. The board argued that it regularly grants such extensions and that extensions do not amount to an “amendment” that would require an application because an extension is not “a proposed change to the facility.” The majority of the Ohio Supreme Court disagreed, and held that the board acted improperly. Because the commencement of construction was a term in the certificate, granting an extension amounts to an amendment in the certificate. As such, the board should not have acted on the request without requiring an application for amendment and investigation. The Court reversed the order and remanded the issue back for further proceedings. Justices Fischer and O’Donnell dissented, arguing that the Court should defer to the board in how it reads “amendment” under Ohio Revised Code § 4906.07(B). For the Ohio Supreme Court’s opinion from In re application of Black Ford Wind Energy, Slip Opinion No. 2018-Ohio-5206, click here.
- Creditors must first seek payment of unpaid bills from estate of deceased spouse before attempting to collect from a surviving spouse, according to the Ohio Supreme Court. In Embassy Healthcare v. Bell, Mr. Robert Bell received care at a nursing home operated by Embassy Healthcare. Embassy sent a letter for collection to his wife, Mrs. Bell, six months and three days after he had passed away, but no estate for Mr. Bell had been opened. In Ohio, creditors have six months to request an estate administrator be appointed in order to collect a debt from an estate, but Embassy did not make such a request. Since it missed the six month statute of limitations, Embassy tried to seek collection from Mrs. Bell under Ohio’s “necessaries” law, as provided in Ohio Revised Code § 3103.03. This law requires spouses to support their spouse with money, property, or labor if their spouse cannot do so on their own; however, the Ohio Supreme Court has said that a person is responsible for their own debts first, and that under this statute their spouse will only be liable if that person cannot pay for their debts. In this case, the Ohio Supreme Court said that Embassy had to seek payment from Mr. Bell’s estate before it could require payment from his spouse. Since the statute of limitations had run to bring a claim against Mr. Bell’s estate, Embassy would be unable to demonstrate that Mr. Bell’s estate could not cover his personal debts. Therefore, Embassy would not be able to prove an essential requirement of Ohio’s necessaries law, and cannot recover from his spouse. For the Ohio Supreme Court’s opinion in Embassy Healthcare v. Bell, Slip Opinion No. 2018-Ohio-4912, click here.
- Trial court may determine width of easement as a question of fact, and will not be reversed by appellate court unless the evidence shows it clearly lost its way, according to Ohio Court of Appeals for the 7th District. A property owner signed an express easement to a neighbor so that the neighbor could cross the property owner’s land to access the public road. The written easement did not specify the width of the easement, but the neighbor cleared a path approximately 10 feet wide. The property owner eventually sold the property, and the new owner laid gravel on the path from the public road to their garage, and the neighbor extended the gravel all the way to his own property. Disputes later arose regarding the easement, and the neighbor sued the new property owners for breach of easement, and sought a declaration that the easement was thirty feet wide. Ohio case law allows trial courts to establish the dimensions of an easement if the writing does not specify any dimensions if the trial court examines: 1) the language of the granting document, 2) the context of the transaction, and 3) the purpose of the easement. The trial court found the easement to be ten feet wide. The neighbor appealed, but the Seventh District found the trial court’s decision to be reasonable given the evidence and Ohio law. Since the width of an easement is a question of fact, an appellate court will not reverse the trial court absent evidence that the trial court clearly lost its way given the weight of the evidence. For the Seventh Districts’ opinion in Cliffs and Creek, LLC v. Swallie, 2018-Ohio-5410 (7th Dist.), click here.
The midterm elections are over, and Thanksgiving is upon us. A lot of activity is expected out of Washington and Columbus as the legislative sessions wind up. The OSU Extension Agricultural and Resource Law team will continue to keep you up to date on the legal issues affecting agriculture as we enter into the holiday season.
Here’s our gathering of ag law news you may want to know:
State of Ohio sued over wind turbine setbacks. Four farmers in Paulding County have joined with The Mid-Atlantic Renewable Energy Coalition to sue the State of Ohio over wind turbine setbacks added to the 2014 biennial budget that some allege curtailed wind energy development in Ohio. In that budget bill, lawmakers included provisions late in the lawmaking process to amend Ohio Revised Code § 4906.20, which establishes the setback requirements for wind turbines. Those provisions more than doubled the distance that wind turbines must be located away from the nearest residential structures. The plaintiffs in this lawsuit allege that including these restrictions in the budget bill violated the single-subject provisions of the Ohio Constitution because the setbacks lack a “common purpose or relationship” to the rest of the budget bill. On this issue, the Ohio Supreme Court said in the case In re Nowak (cited as 2004-Ohio-6777) that the single-subject rule is a requirement that legislators must abide by, but that only a “manifestly gross and fraudulent” violation will result in the law being struck down. The plaintiff’s complaint is available here. Stay tuned to the Harvest for updates.
Department of Labor proposes rule requiring H-2A advertisements be posted online. The U.S. Department of Labor (DOL) published a notice of proposed rulemaking in the Federal Register on November 9th that would change how employers must advertise available positions before they may obtain H-2A worker permits. H-2A permits are work visas for temporary agricultural workers who are non-U.S. citizens. Currently, employers must advertise work in a local newspaper of general circulation for at least two consecutive days, one of which must be a Sunday. This requirement is located in the Code of Federal Regulations at 20 C.F.R. § 655.151. The DOL now proposes to modernize the recruitment advertising rule by requiring employers to post the jobs online instead of in print. The DOL’s notice explained that it believes online postings would more effectively and efficiently give U.S. workers notice of job opportunities. Further, the notice explained that the DOL intends to only require online advertisements, which would render newspaper advertisements unnecessary. U.S. Secretary of Agriculture Sonny Perdue issued a press release in support of the DOL’s proposal. The public may submit comments to the DOL about the proposed rule. Those wishing to comment may do so until December 10th, 2018, by visiting the proposed rule’s webpage in the Federal Register.
LLC agreement to adjust member financial contributions must be in writing. The Ohio Fourth District Court of Appeals recently affirmed a decision finding a verbal agreement to adjust contributions between members of a Limited Liability Company (LLC) to be unenforceable, even if the other party admitted to making the statements. Ohio Revised Code § 1715.09(B) requires a signed writing in order to enforce a “promise by a member to contribute to the limited liability company,” and therefore the court could not enforce an oral agreement to adjust contributions. The Fourth District Court of Appeals heard the case of Gardner v. Paxton, which was originally originally filed in the Washington County Court of Common Pleas. The plaintiff, Mr. Gardener, argued that his business partner breached an agreement to share in LLC profits and losses equally. In order to share equally, both parties would have needed to adjust their contributions, but Mr. Paxton only made verbal offers that were never reduced to writing. Because there was no writing, Mr. Paxton’s statements were not enforceable by his business associate against him.
Ohio legislation on the move:
The Ohio General Assembly has returned from the midterm elections with a potentially busy lame duck session ahead of it. Already a number of bills that we have been monitoring have seen activity in their respective committees.
- Ohio Senate Agriculture Committee held first hearing on multi-parcel auction bill. State senators heard testimony on House Bill 480 last Tuesday, November 13th. The bill would authorize the Ohio Department of Agriculture to regulate multi-parcel auctions, which are currently not specifically addressed in the Ohio Revised Code. The bill also defines “multi-parcel auction,” saying such an auction is one involving real or personal property in which multiple parcels or lots are offered for sale in part or in whole. The bill would also establish certain advertising requirements. The bill’s primary sponsor, Representative Brian Hill of Zanesville, says that he introduced the bill in an effort to recognize by statute what auctioneers are already doing, and to do so without interrupting the industry. The bill passed the Ohio House of Representatives 93-0 in June. For more information on the legislation, visit the House Bill 480 page on Ohio General Assembly’s website or view this bill analysis prepared by the Ohio Legislative Service Commission.
The development of wind farms is a controversial land use issue in Ohio, as in other states. Arguments abound on both sides and revolve around private property rights, community land use planning, green energy, preservation of open landscapes and wildlife impacts. It is this last factor--impacts on wildlife--that convinced a federal court to halt a wind development project in the Appalachian mountains of West Virginia, much to the dismay of developers of the $300 million project.
The Beech Ridge wind energy project involves construction of 122 wind turbines along the ridgeline of the Appalachian mountains in Greenbrier County. About forty of the turbines are currently in the construction phase, but the federal court has issued an injunction stopping construction of any additional turbines and limiting existing turbine use to the bat's winter hibernation period. The reason: project developers failed to take seriously the issue of harm to the Indiana bat. The Indiana Bat is on the list of "endangered" species, and interference with the animal or its habitat is prohibited by the federal Endangered Species Act (ESA). The wind project developers did hire an environmental consultant to examine the situation, but the consultant repeatedly disregarded information and advice from the U.S. Fish and Wildlife Service (FWS) that would have more accurately identified the Indiana bat population. The court critized the consultant's efforts, stating that "[s]earching for bats near proposed wind turbine locations for one year instead of three, looking in one season rather than three, and using only one method to detect bats was wholly inadequate to a fair assessment." Later surveys revealed the existence of two caves within ten miles of the project that are home to hundreds of bats, including Indiana bats, and evidence suggested that nearly 7,000 bats would die each year because of the project.
Despite the existence of the bats near the project, however, the court pointed out that Beech Ridge's developers could have requested an "incidental take permit" (ITP) pursuant to the ESA. The ESA's incidental take permit mechanism could have allowed the project to proceed, but with preparation of an FWS approved Habitat Conservation Plan demonstrating that measures would be taken to minimize or mitigate adverse effects on the Indiana bat. "Indeed, the tragedy of this case is that Defendants disregarded not only repeated advice from the FWS but also failed to take advantage of a specific mechanism, the ITP process, established by federal law to allow their project to proceed in harmony with the goal of avoidance of harm to endangered species," said the court.
The Animal Welfare Institute and Mountain Communities for Responsible Energy filed the lawsuit, and produced expert testimony indicating that Indiana bats exist near the project site and that there was a very high likelihood that the turbines would kill and injure the bats. The court drew upon Benjamin Franklin in its response to the expert testimony, stating ". . . the Court concludes, by a preponderance of the evidence, that, like death and taxes, there is a virtual certainty that Indiana bats will be harmed, wounded, or killed imminently by the Beech Ridge Project . . ."
The difficulty of rendering such a decision is apparent in the court's opinion. Judge Titus expresses disappointment and frustration with the project developer's approach to the bat issue, and "reluctantly" orders the injunction. But unlike many in the wind development arena, the court does not hesitate to give credibility to the interference of wind turbines with the bat population. He recognizes that the case illustrates a clash between two federal policies: protection of species and encouragement of renewable energy development, but insists that the two policies are not necessarily in conflict because of the ESA's incidental take option and the opportunity for harmonious development. Seeking an incidental take permit is the only avenue available to help project developers resolve their "self-imposed plight," states the court. "The development of wind energy can and should be encouraged," says Judge Titus, "but wind turbines must be good neighbors."
As the Indiana bat did years ago, wind development has made its way to Ohio. The Ohio Power Siting Board is currently considering approval of several wind projects including the Buckeye Wind Project, a 70 turbine project in Champaign County that would be Ohio's largest wind development. Testimony by an environmental consultant at last month's hearings before the board focused on potential impacts of the project on the Indiana bat. According to the consultant, studies revealed no evidence of the Indiana bat in the project area. Studies in nearby Logan County in 2008 revealed the existence of Indiana bats in an area that has since been removed from the project, and another wind developer reported finding an Indiana bat in Champaign County earlier this year. The Ohio Power Siting Board may take months to decide whether to approve the Buckeye Wind Project and to indicate its conclusions about impacts on Indiana bats.
In accordance with state policy promoting renewable resource development, the Ohio Department of Natural Resources encourages wind developers to enter into a voluntary agreement to cooperatively address wildlife issues. In the agreement, ODNR promises not to pursue liability against the developer for any incidental takings of endangered or threatened species. However, ODNR's agreement cannot prevent private groups from challenging the turbines in federal court using the approach of the Beech Ridge Energy case. Should the Ohio Power Siting Board approve a project like the Buckeye Wind Project, Ohio may see its own federal court case on Indiana bats and wind development.
Read the court's December 8, 2009 decision in the Beech Ridge Energy case here or go to the Maryland District Court's webpage for the opinion and order at http://www.mdd.uscourts.gov/publications/opinions/Opinions.asp.