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Did you know that a group of ferrets is called a business? Ironically, we are in the business of ferreting out agricultural and resource law issues and providing you updates. This edition of the Ag Law Harvest provides an update on recent court decisions from across the country that deal with the right to farm, food labeling, and conditional use permits for solar gardens.
Right to Farm Act upheld in North Carolina. Earlier this month, a three-judge panel on the North Carolina Court of Appeals upheld the constitutionality of North Carolina’s right to farm law. In 1979, the North Carolina legislature enacted the Right to Farm Act (the “Act”). In 2017 and 2018 the North Carolina legislature amended the Act by passing House Bill 467 and Senate Bill 711 (collectively referred to as “the Amendments”). The Amendments sought to clarify and strengthen North Carolina’s right to farm law. The Plaintiffs argued that the Amendments violated North Carolina’s equivalent of the U.S. Constitution’s Fourteenth Amendment Due Process Clause and that the Act exceeded the scope of North Carolina’s police power. The Court of Appeals disagreed. The Court recognized North Carolina’s interest in promoting and preserving agriculture and that North Carolina has the authority to regulate such an interest. The Court found that the Act’s limitation on potential nuisance claims against those engaged in agriculture, forestry, and other related operations helps to protect North Carolina’s interest, and encourages North Carolina’s goal to encourage the availability and continued “production of food, fiber, and other products.” The Plaintiffs also argued that the Amendments were “private laws” to specifically protect the swine industry in violation of North Carolina’s Constitution. The Court found, however, that the Act and the Amendments are laws of general applicability that apply to all agricultural and forestry operations, not just swine producers. Lastly, the Plaintiffs argued that because the language in House Bill 467 limited the amount of compensation that can be recovered in a nuisance action against agricultural and forestry operations, the Plaintiffs’ right to a trial by jury had been impaired and/or abolished. The Court ruled, however, that North Carolina has the authority to “define the circumstances under which a remedy is legally cognizable and those under which it is not.” The Court found that there are many examples where compensation and remedies are limited within North Carolina law and that House Bill 467 did not “impair nor abolish the right to a jury trial.”
Where is the cacao? A California man (“Plaintiff”) is suing Costco Wholesale Corporation (“Costco”) for allegedly mislabeling Costco’s “Chocolate Almond Dipped Vanilla Ice Cream Bars” (the “Product”). Plaintiff argues that because of the Product’s packaging and name, he expected the Product’s chocolate would have been predominately derived from cacao beans. Plaintiff asserts that chocolate is defined by the Food and Drug Administration (“FDA”) and California law “as prepared from ground roasted cacao bean” and that it must be “made chiefly from cacao beans with a small amount of optional ingredients.” Based on this definition, Plaintiff claims that Costco’s packaging is misleading because the Product’s chocolate contains mostly vegetable oils and small amounts of ingredients derived from cacao beans. In his Complaint, Plaintiff argues that federal regulations require Costco to label the Product as “milk chocolate and vegetable oil coating” rather than just “chocolate.” However, the court found that neither of Plaintiff’s cited regulations support a viable theory of liability against Costco. First, the court could not find Plaintiff’s definition of chocolate anywhere in the Code of Federal Regulations. Secondly, the court held that there are no federal regulations that require a certain amount of cacao bean ingredients as opposed to vegetable oils to be used in “chocolate” and that there is no language mandating the labeling of Costco’s Product as “milk chocolate and vegetable oil coating almond dipped ice cream bars.” The court also dismissed Plaintiff’s claim that Costco engaged in consumer deception with its Product’s label. The court found that a reasonable consumer would not have been deceived by the Product’s label and that if there were any questions about the ingredients of the Product, a consumer could have resolved those questions by looking for the ingredients list on the back of the Product’s packaging.
Conditional use permits at the center of the Minnesota’s “solar system.” Move over Sun because conditional use permits are at the center of attention in Minnesota, for now. The Minnesota Court of Appeals has recently ruled against a county’s decision to deny two conditional use permits to build solar gardens in McLeod County, Minnesota. Two subsidiary companies of Nokomis Energy LLC (“Plaintiff”) each applied for a conditional use permit (“CUP”) to build separate, one-megawatt solar energy facilities. McLeod County considered the two CUP applications at public hearings. Two neighboring landowners expressed concerns about stray voltage and the number of fetal deaths among their livestock. The landowners claimed that the number of fetal deaths increased after other solar facilities were constructed nearby. Plaintiff did not deny that solar gardens can produce stray voltage but proposed to alleviate those concerns by hiring only licensed professionals and to allow third-party oversight during construction. Plaintiff also offered to conduct stray voltage testing before and after construction and indicated that it would accept any conditions set forth by county officials. The county, however, denied both applications on the basis that the proposed sites are “prime farmland” and because the stray voltage would negatively affect livestock. The court rejected the county’s assessment. First, the court held that preserving prime farmland is not a sufficient legal basis for denying a CUP. Second, the court ruled that the county cannot deny a CUP without first considering whether any proposed conditions would eliminate any concerns about the application. Here, the court found that McLeod County’s failure to address Plaintiff’s proposals to eliminate the stray voltage concerns amounts to an unjust denial of Plaintiff’s CUPs.
Thanks for reading and Happy New Year!
Just when you think estate planning can’t get any more complex, we see a court case that proves us wrong. The case below arises out of a dispute about a devise in a will to a beneficiary that died before the testator. The central issue was whether Ohio’s anti-lapse statute protected the devise or if the devise lapsed and became part of the testator’s residual estate. Believe it or not, the answer to that question lies within the word “means.” Below we discuss the Third District Court of Appeals’ decision and how it reached its conclusion that the word “means” narrows the definition of devise in Ohio’s anti-lapse statute which may create an outcome for families and loved ones that the law or legislature did not intend.
What it means to “lapse” and Ohio’s anti-lapse statute. To understand the context and importance of this case, it helps to have a little understanding of Ohio’s common law lapse rule and anti-lapse statute. Traditionally, at common law, a devise given to a person who predeceases the testator is said to “lapse.” Devise, as used here, is a general term that is used to mean “the act of giving property by will.” This is an important distinction to make because, as you will learn later, the court had to interpret devise differently under Ohio’s anti-lapse statute.
If you think about it, it makes sense that a devise would lapse when the beneficiary predeceases the testator because you cannot give property to someone who is already dead. But under the lapse rule, all surviving heirs of that predeceased beneficiary also lose out on any assets that the beneficiary would have been entitled to. Instead, the lapsed devise will either become part of the testator’s “residual estate” – where it will be distributed pursuant to the terms of a residuary clause contained within the testator’s will – or it passes through intestate succession.
The common law rule of lapse has been criticized for the harsh results that it produces. This is especially true when the lapse rule is applied to wills containing a devise to a child or close relative that predeceases the testator. For example, Farmer A has no children and wants to give the farm to a family member that will continue the farming operation. Farmer A’s siblings, however, hope that they get the farmland to sell for a premium price. Farmer A decides to execute a will that gifts the farm and all associated assets to his nephew who has been helping him on the farm for the past few years. Farmer A probably hoped or believed that after he was gone, his nephew was going to continue the farming operation and prepare his sons to take over the farm and keep Farmer A’s legacy alive. However, Farmer A’s nephew was in a horrific tractor accident and passed away shortly after Farmer A executed his will. Not long thereafter, Farmer A’s health declined, and Farmer A passed away. In this scenario, the nephew’s sons would not be entitled to the farm because the lapse rule essentially voids the gift to the nephew. Instead the farm is likely to be passed to Farmer A’s siblings and will be sold.
To remedy the harsh results, Ohio enacted its anti-lapse statute which can be found in Ohio Revised Code Section 2107.52. In the event that a beneficiary dies before the testator, Ohio law “protects” the devise and prevents the devise from being extinguished by the common law lapse rule.
However, Ohio’s anti-lapse statute only applies in certain situations. First, a devise must be to:
- a grandparent;
- a descendant of a grandparent (descendants of a grandparent include your siblings, children, parents, aunts, cousins, etc.); or
- a stepchild of the testator
If any one of the individuals listed above (also referred to as “devisees”) dies before the testator and leaves surviving descendants, then two situations can occur:
- If the devise is an individual devise (i.e. the devise is not to a group or class of individuals like “my children” or “my grandchildren”) a substitute gift is created in the devisee’s surviving descendants. The surviving descendants are entitled to the property that the devisee would have been entitled to, had the devisee survived the testator.
- If the devise is in the form of a class gift, a substitute gift is created in the surviving descendants of any deceased devisee.
Ohio’s anti-lapse statute requires any devise that fails to become part of the testator’s residue or “residual estate.” If the devise cannot become part of the residue, then it passes by intestate succession. This overview of Ohio’s anti-lapse statute is very brief and does not cover the many nuances that are contained within the statute. If you have more questions regarding Ohio’s anti-lapse statute you can visit the statute here or contact a knowledgeable estate planning attorney.
Case Background. Now we get to the reason for this post. We will first discuss the background information of the case before diving into the court’s analysis and holding. In 2019, Theodore Penno passed away leaving a validly executed will which read:
ITEM II. I hereby give, devise and bequeath my farm located in Butler Township, Mercer County, Ohio, and any interest that I may have in any farm chattel property to my brother, JOHN PENNO.
ITEM III. All the rest, residue, and remainder of my property, real and personal, of every kind, nature, and description, wheresoever situated, which I may own or have the right to dispose of at the time of my decease, I give, devise, and bequeath equally to my brother, JOHN PENNO and my sister, MARY ANN DILLER, absolutely and in fee simple, share and share alike therein, per stirpes.
ITEM V. I hereby appoint my niece, LINDA PENNUCCI and my niece, PHYLLIS DILLER, or the survivor of them, as Co-Executors of this my Last Will and Testament.
John Penno, Theodore’s brother, passed away approximately three years before Theodore. The only sibling to survive Theodore was his sister, Mary Ann Diller. John is survived by his two children, David Penno and Linda Pennucci. Mary Ann filed a complaint for declaratory judgment and for construction of Theodore’s will. Mary Ann argued that Theodore’s gift to John in Item II should lapse because John passed away before Theodore and the farm and farm property should become part of Theodore’s residual estate and be distributed according to the terms of Item III. John’s children argued to the contrary and asked the court to find that Theodore’s farm and any farm property be distributed to them alone.
The issue. The issue in this case was whether the devise to John in Item II lapsed and became part of Theodore’s residual estate. If the devise did not lapse, then only John’s children would be entitled to the farm and farm property. If the devise did lapse, then the farm and farm property become part of Theodore’s residual estate and is then distributed according to the terms of Item III, which would entitle Mary Ann to some portion of the farm and farm property. The probate court and the trial court found that the devise in Item II did not lapse, and John’s children were entitled to the farm and farm property alone. Mary Ann then filed her appeal to the Third District Court of Appeals.
The court’s interpretation of “devise” in Ohio’s anti-lapse statute. At the center of this case is the definition of “devise” contained within Ohio’s anti-lapse statute. The statute provides that:
“Devise" means an alternative devise, a devise in the form of a class gift, or an exercise of a power of appointment.
The word "means" is bolded and underlined here because it becomes very important to the court’s interpretation of the statute.
Like the court, Mary Ann and her daughter, Phyllis, also thought the word “means” was very important. They argued that the gift of Theodore’s farm and farm chattel in Item II was not a “devise” under Ohio’s anti-lapse statute and therefore, the gift to John lapsed when John predeceased Theodore. Mary Ann and Phyllis reasoned that Theodore’s devise to John was a primary devise and Ohio’s anti-lapse statute only protects an alternative devise, a devise in the form of a class gift, or an exercise of a power of appointment. The court eventually agreed with Mary Ann and Phyllis.
The court explained the difference between a primary devise and the other meanings of devise contained within Ohio’s anti-lapse statute. According to the court, the different definitions are as follows:
- Primary devise – “is a devise to the first person named as taker.”
- Alternative devise – “is a devise that, under the terms of the will, is designed to displace another devise if one or more specified events occur.”
- Class gift – “is a gift to a group of persons, uncertain in number at the time of the gift but to be ascertained at a future time, who are all to take in definite proportions, the share of each being dependent on the ultimate number in the group.”
- Power of appointment – “is a power created or reserved by a person having property subject to disposition, enabling the donee of the power to designate transferees of the property or shares in which it will be received; esp., a power conferred on a donee by will * * * to select and determine one or more recipients of the donor’s estate.”
The court examined the definition of “devise” as written in the statute and concluded that the definition only meant alternative devise, class gift, or power of appointment. The court reasoned that the use of the word “means” conveys that the definition of “devise” in Ohio’s anti-lapse statute is intended to be an exhaustive definition and that the three kinds of testamentary gifts following the word “means” are the only kinds of testamentary gifts capable of qualifying as “devises.” To help reinforce their conclusion, the court compared the word “means” to the word “includes” and concluded that “means” indicates that there is only one meaning whereas “includes” conveys the idea that there are other items that can be included in the definition of a word, even though they are not specifically stated.
Based on the court’s findings and conclusions, the court ruled that Theodore’s gift to John was a primary devise and was not protected by Ohio’s anti-lapse statute. The court found that the gift to John must become part of Theodore’s residual estate or pass through intestate succession.
The court’s ruling may seem counterintuitive to the purpose of the anti-lapse statute, and the court admitted as much. But the court reiterated the concept that it is not the court’s place to change the meaning of a statute as it is written – that obligation is left to the legislature and the legislature alone. The court argued that if the court’s ruling is an unintended consequence resulting from how the statute is written, the legislature can change the words of the law to more accurately reflect the purpose of the anti-lapse statute.
Conclusion. This case demonstrates how one simple word can drastically change the meaning of the law and how that small word can affect a lot of people. This case is also a great reminder about the importance of planning for all possible scenarios. Many times, when we create our own estate plan, we must face the reality of our own deaths. Facing that reality is quite uncomfortable. But we must also come to terms with the even more uncomfortable possibility that our loved ones pass away before us. This is why it is important to speak with an experienced and knowledgeable estate planning attorney as you plan for the future. A good attorney will address not only the immediate needs you have for transferring your assets but will also help you plan for all possibilities so that your intentions are carried out.
This case is also a good example of why we should update our estate plans when major life events occur. The death of a beneficiary is definitely one of those instances where you should contact your attorney to update your estate plan so that there is no doubt your loved ones are taken care of when you are gone.
To read the court’s decision, please visit the Ohio Supreme Court’s website.
The weeks since Thanksgiving have been busy ones at Ohio's Statehouse, but not a creature is stirring now as the legislature enjoys its Christmas recess. While agriculture didn’t receive any final Christmas gifts from the General Assembly, a few bills advanced and may pass early next year. Here’s a rundown of agricultural legislation in Ohio.
Newly introduced Ohio legislation
S.C.R. 13 – Repeal Individual Income Tax. Sen. George Lang (R-West Chester) introduced a concurrent resolution on December 9, 2021 expressing an intention for the legislature to repeal the state personal income tax within ten years. The resolution cites disincentives to reside in Ohio, repeals by other states, and business climate impacts as justification for the intent to repeal the income tax. The Senate referred the measure to its Ways and Means Committee on December 15.
H.B. 484 -- Walleye as Official State Fish. Representatives Michael Sheehy (D-Oregon) and Lisa Sobecki (D-Toledo) introduced a bill that would designate the walleye as Ohio’s official state fish. The bill was referred to the House Agricultural & Conservation Committee on November 16, 2021.
H.B. 507 -- Poultry Chicks. This bill to reduce the minimum number for poultry chicks sold in lots from six to three was introduced by Rep. Koehler (R-Springfield) on December 8, 2021.
Ohio legislation on the move
H.B. 440/S.B. 241– Agricultural Linked Deposit Program. Part of the “Ohio Gains Initiative,” these companion bills would make revisions to Ohio’s Agricultural Linked Deposit Program, which provides interest rate reductions of up to 3% on operating loans and lines of credit for farm operators and agribusinesses. The legislation would extend the program to agricultural cooperatives and replace the $150,000 loan maximum to amounts as determined by the State Treasurer. The House passed the bill on December 9, 2021. The Senate Financial Institutions and Technology Committee reported out its bill on December 15, 2021, so the bill should head to the Senate floor soon.
H.B. 397– Agricultural Leases. For agricultural crop leases that don’t address how and when to terminate the lease, H.B. 397 would require a landlord who wants to terminate the lease to provide a written notice of termination to the tenant by September 1. The termination would be effective December 31 of the year notice is provided or on the date harvest is complete, whichever comes first. The House passed the bill on December 8, 2021 and the Senate referred it to the Senate Agriculture & Natural Resources Committee on December 15, 2021.
H.B. 321– Auctioneers. The proposal makes several revisions to auctioneers licensing, including eliminating the apprentice requirement and replacing it with a course of study in auctioneering at an approved institution; removing the oral exam requirement ; increasing the number of written exams offered; removing the special auctioneer license; allowing auction firms to provide online or live auction services; and granting the Ohio Department of Agriculture authority over internet auctions, which are currently exempt from ODA oversight. The bill passed the House on December 9, 2021 and was referred to the Senate Agriculture & Natural Resources Committee December 15, 2021.
H.B. 95 -- Beginning Farmers. This legislation passed the House back on June 28, 2021 and finally received its second hearing before the Senate Ways and Means Committee on December 7, 2021. It proposes to allow individuals to be certified as beginning farmers and would establish income tax credits for certified beginning farmers who attend approved financial management programs and for owners who sell land and agricultural assets to certified beginning farmers.
S.B. 210 – Postnuptial Agreements. Spouses could agree to terminate or modify pre-nuptial agreements after marriage under this proposal, which would bring Ohio in line with many other states. The bill passed the Senate on November 16, 2021 and was assigned to the House Civil Justice Committee on December 7, 2021.
S.B. 246 – Income Tax. The goal of this bill is to avoid the federal State and Local Tax (SALT ) $10,000 deduction cap for federal income tax by allowing an electable individual income tax on a pass-through entity’s income apportioned to Ohio and a refundable income tax credit for tax paid. It received its third hearing with the Senate Ways and Means Committee on December 14, 2021.
S.B. 247 – Income Tax. The sale of an ownership interest in a business would be considered business income for Ohio income tax purposes if federal income tax law treats the sale as a sale of assets or the seller materially participates in the business activities during the taxable year in which interest was sold or any of preceding five taxable years. If passed, the legislation would apply to any audits, refund applications, petition for reassessments, and appeals pending on or after the bill’s 90-day effective date. The proposal had a third hearing with the Senate Ways and Means Committee on December 14, 2021.
Ohio legislation at a standstill
H.B. 175 – Water Pollution. This controversial legislation would exclude “ephemeral features”—those that result from surface water flowing or pooling in direct response to precipitation--from water pollution control programs. The bill passed the House in late September and received a second hearing in the Senate Agriculture & Natural Resources Committee on November 30 but has not received attention since that date.
S.B. 47– Overtime Pay. The proposal would exempt an employer from paying overtime for employer travel to and from a worksite, preliminary and postliminary activities, and minor tasks performed beyond scheduled work hours without authorization, such as checking email or phone messages. It passed the Senate in September and received a first hearing before the House Commerce and Labor Committee but no further action has occurred since October 26, 2021.
S.B. 257– Income Tax Credit for Donations to Townships. Qualifying donations of cash, property or services accepted by a township would receive a refundable state income tax credit of up to $5,000 under this proposal. The bill has not received a hearing since its referral to the Senate Ways and Means Committee on November 10, 2021.
S.J.R. 3 – Constitutional right to hunt and fish. If passed, the joint resolution would place a constitutional amendment before Ohio voters that would guarantee the right to hunt, fish, and harvest wildlife, subject only to laws and rules that promote wildlife conservation and management or preserve the future of hunting and fishing. No action has been taken on the resolution since it received a second hearing before the Senate Agriculture and Natural Resources Committee on November 16, 2021.
Tags: Ohio legislation
The holidays are fast approaching, but we're still at work gathering information for this week's Farm Office Live. Give yourself the gift of catching up on legal, tax, and farm management information that affects your farm office!
Our program this week will feature Cheryl Turner, State Statistician with USDA's National Agricultural Statistics Service, sharing Ohio agricultural census and survey data. The Farm Office team of Dianne Shoemaker, David Marrison, Peggy Kirk Hall, and Barry Ward will follow Cheryl with discussion on:
- 2022 Dairy Margin Coverage and Supplemental Coverage
- Ohio meat processing grants and federal programs
- State and federal legislation
- Farm taxes
- Looking ahead to 2022
We'll offer Farm Office Live this Wednesday, December 15 from 7--8:30 pm and again on Friday, December 17 from 10--11:30 am. Register or catch our replay at go.osu.edu/farmofficelive.
Tags: Farm Office Live
Did you know that a male moose loses its antlers every year? Moose usually lose their antlers every winter and grow new ones in the spring. Additionally, because of the lack of antlers during the winter months, a moose’s first line of defense is its sharp hooves, which can mortally wound a wolf or bear. This edition of the Ag Law Harvest kicks around a few USDA announcements and FDA rule proposals and sheds some light on overtime compensation for California’s agricultural workers.
USDA announces new micro-farm insurance policy. The U.S. Department of Agriculture’s (“USDA”) Risk Management Agency (“RMA”) announced that the USDA has developed a new micro farm insurance policy for agricultural producers with small-scale farms who sell locally. The new insurance policy seeks to simplify recordkeeping and introduces insurance coverage for post-production costs and value-added products. Farm operations that earn an average allowable revenue of $100,000 or less, or for carryover insureds, that earn an average allowable revenue of $125,000 or less are eligible for the policy. The new insurance policy will be available for the 2022 crop year. Crop insurance is sold and delivered sole through private crop insurance agents, a list of which can be found at the RMA Agent Locator.
USDA accepting applications to help rural communities get access to internet. The USDA announced that it has begun accepting applications for up to $1.15 billion in loans and grants to help rural communities gain access to high-speed internet. The announcement follows the recently enacted infrastructure bill, which provides another $2 billion in additional funding for USDA’s ReConnect Program. According to the USDA, the funding will be available for projects that serve rural areas where at least 90% of the households lack broadband service at speeds of 100 megabits per second (Mbps) (download) and 20 Mbps (upload). The USDA will give funding priority to projects that will serve people in low-density rural areas and areas lacking internet service speeds of at least 25 Mbps (download) and 3 Mbps (upload). In making the funding decisions, the USDA will consider the economic needs of the community to be served and the extent to which a provider will offer affordable service options to the community.
FDA proposing changes to testing requirements of pre-harvest agricultural water. The Food and Drug Administration (“FDA”) published a proposed rule that would change some provisions of the FDA’s Produce Safety Rule. The proposed rule seeks to replace the microbial criteria and testing requirements for pre-harvest agricultural water for covered produce other than sprouts. Some of the proposed changes include:
- Replacing the microbial quality criteria and testing requirements with new provisions for conducting pre-harvest agricultural water assessments for hazard identification and risk management purposes;
- A new testing option for certain covered farms that elect to test their pre-harvest agricultural water for generic Escherichia coli (“E. coli”);
- Providing additional flexibility in responding to findings from pre-harvest agricultural water assessments;
- Expedited implementation of mitigation measures for known or reasonably foreseeable hazards related to certain adjacent and nearby land uses; and
- Required management review of pre-harvest agricultural water assessments.
The FDA is accepting comments on the proposed rule until April 5, 2022.
California’s overtime compensation for agricultural workers. In 2016, California passed Assembly Bill No. 1066 that slowly implemented overtime wages for California’s agricultural workers. Beginning in 2022, agricultural employees are entitled to one-half times their regular rate of pay for all hours worked over eight hours in any workday or over 40 hours in any workweek. However, the law only affects agricultural employers with 26 or more employees. Agricultural employers with 25 or fewer employees will be required to follow the same overtime compensation structure beginning in 2025. California will also begin to require that any work performed by an agricultural employee in excess of 12 hours in any workday be paid twice their regular rate of pay. Again, this provision only effects agricultural employers with 26 or more employees but will go into effect for all agricultural employers in 2025.
In Ohio, we are no strangers to the dreaded “black ice.” You probably know someone that has fallen victim to this invisible nuisance. We see it time and time again. Someone hits a patch of black ice and inevitably swerves off the road. Sometimes, a motorist may hit a mailbox, a tree, or a telephone pole and suffer serious injury. A common question that arises after such an incident is whether the owner or the party responsible for that tree or pole can be held liable for the motorist’s injuries. After all, had they removed the off-road object the motorist may have just slid into a ditch without any serious injury, right?
Well, in a recent decision, the Ohio Supreme Court clarified the duty owed to motorists by landowners or occupiers of land adjacent to a public roadway with respect to off-road objects. The case arises after a motorist hit a patch of black ice causing him to veer off the road and hit a mailbox, which then caused his truck to roll. The central issue of the case revolved around the landowner’s potential liability for the mailbox being within the right-of-way and causing the motorist’s truck to flip. Below we review the Ohio Supreme Court’s decision in Snay v. Burr and the duty owed to motorists by landowners or occupiers of land.
Background. On December 19, 2016, Cletus Snay was driving from his home in Norwalk, Ohio to his place of work in Bellevue, Ohio. Mr. Snay was traveling along a two-lane country road when he hit a patch of black ice that caused him to veer off the road. Ohio Highway Patrol found Mr. Snay’s truck rolled over. The state trooper had concluded that Mr. Snay’s truck went off the right side of the road, struck the first mailbox, owned by Matthew and Diane Burr, and began to flip, hitting the second mailbox and eventually ending up overturned further down the road. As a result of the accident, Mr. Snay suffered damage to his spine, rendering him quadriplegic.
After the accident, it was discovered that the Burrs’ mailbox post remained in the ground, while the second mailbox post that Mr. Snay’s truck hit was destroyed. Mr. Burr installed his mailbox approximately 20 years before Mr. Snay’s accident. Before installing the mailbox, Mr. Burr obtained guidelines for mailbox installation published by the United States Postal Service. The guidelines recommended, but did not require, that a metal mailbox support be two-inch-diameter standard-steel or aluminum pipe and be buried no more than 24 inches deep. Mr. Burr, however, used an eight-inch-diameter metal pipe that he buried 36 inches deep.
Mr. Snay and his wife hired an accident reconstructionist that agreed with the state trooper that Mr. Snay’s truck began to roll over after hitting the Burrs’ mailbox. However, the accident reconstructionist was of the opinion that the Burrs’ unyielding mailbox post was the mechanism that caused Mr. Snay’s truck to overturn. The accident reconstructionist characterized the Burrs’ mailbox support as a “dangerous hazard to motorists.”
The Snays filed suit alleging that the Burrs were negligent in constructing their mailbox because “it was supported by a thick, non-breakaway metal pipe.” The Burrs moved for summary judgment, arguing that they owed no duty of care to Mr. Snay and that Mr. Snay’s failure to control his vehicle was the cause of Mr. Snay’s injuries, not the mailbox. Both the trial court and the appellate court agreed with the Burrs. The Snays then brought the case before the Ohio Supreme Court.
What is the duty that a landowner owes to motorists traveling on a roadway with respect to off-road objects and obstructions? The Snays asked the Ohio Supreme Court to hold the Burrs liable for breaching the duty of care owed to motorists traveling on the road adjacent to their property. The Snays argued that the Burrs negligently misused the right-of-way by creating an unreasonable hazard that a motorist might encounter when they veer off the road. The Court disagreed.
The Court went through a historical analysis of Ohio’s law as it relates to off-road objects and the duty owed to motorists by landowners or occupiers. The Court found that under Ohio law “the effect that an object or obstruction in a right-of-way has on the ordinary use of the roadway” controls when determining the existence of a duty owed to motorists. The Court reasoned that if any duty is owed to a motorist by a landowner, it is the duty to ensure that any off-road hazard does not make “the roadway unsafe for the usual and ordinary course of travel.” Examples of off-road objects that may make the roadway unsafe for the usual course of travel include corn growing in the right-of-way that obstructs a motorist’s view of cross traffic or a large sign that obstructs a motorist’s view of the road.
The Court also found that there is no precedent to impose a duty on a landowner to remove an off-road hazard that makes only off-road travel unsafe, unless the off-road travel is shown to be an aspect of the ordinary and usual course of travel on that particular roadway. Here the Court held that the Burrs’ mailbox did not make ordinary travel on the road adjacent to the Burrs’ property unsafe. The Court found that the motorists traveling on the roadway usually drove on the paved area of the road. The Court recognized that motorists are not free to drive on a right-of-way as they please and found that the Burrs’ mailbox only presented a hazard to a motorist once the motorist errantly left the road.
So, if a landowner has an off-road object in the right-of-way, the Ohio Supreme Court has now ruled that the landowner’s duty is to ensure that the off-road object does not make the ordinary or usual travel of the roadway unsafe for motorists, otherwise all fixed objects like mailboxes or trees could impose liability on a landowner.
Do landowners owe a duty of care to motorists that leave the roadway? The Snays also argued that the Burrs’ “unreasonably dangerous construction” of the mailbox and deviation from the nonbinding guidelines of the United States Postal Service, gave rise to a duty of care to motorists that might leave the road and hit the mailbox. Again, the Ohio Supreme Court disagreed.
The Court again reiterated the fact that in order for a landowner or occupier to be liable there must first “be a condition or obstruction that jeopardizes the safety of traffic on the ordinarily traveled portion of the road.” The Court reasoned that the right-of-way beyond the paved portion of the road adjacent to the Burrs’ property was not used for ordinary travel. Therefore, the Court stated that a “vehicle traveling ordinarily and with due care on the road would not come in contact with the Burrs’ mailbox.” The Court also reasoned that adjacent landowners are entitled to presume that motorists will observe the law and exercise ordinary care while driving on a roadway and that a motorist hitting a patch of black ice is neither normal or expected.
The Court concluded that Mr. Burr’s construction of the mailbox, even though inconsistent with the United States Postal Service guidelines, “does not warrant a departure from the general rule that the duty to motorists owed by an adjacent landowner or an occupier of land adjacent to the road extends only to conditions in the right-of-way that render ordinary travel on the regularly traveled portion of the road unsafe.” Therefore, a landowner owes no duty to a motorist that errantly veers off the road and hits an off-road hazard.
Conclusion. As a landowner, or an occupier of land adjacent to a public roadway, it is your duty to ensure that any off-road object or obstruction does not make the ordinary and usual travel of the roadway unsafe. Only then can a landowner, or occupier of land, be liable for injuries caused by an off-road object or obstruction. Ohio does not impose a duty on landowners or occupiers of land to keep a right-of-way free of objects that may pose a danger to wayward vehicles. To read the Ohio Supreme Court’s decision, visit the Ohio Supreme Court’s website.
As 2021 winds down, it is always good to plan for the new year. Part of that planning includes making sure, as an employer, you are compliant with any updates to current law as we turn the calendars to 2022. One law that is changing next year, is Ohio’s minimum wage law. Beginning January 1, 2022, the Ohio minimum wage will rise to $9.30, up from the current $8.80, for non-tipped employees. However, as an agricultural employer, the law provides some exemptions to paying federal or state minimum wage. In this post, we review minimum wage requirements, agricultural exemptions to minimum wage, and who qualifies for the agricultural exemptions.
Ohio versus federal minimum wage. As discussed above, Ohio’s minimum wage will rise to $9.30 for non-tipped employees but federal minimum wage will remain at $7.25. An agricultural employer is required to follow both state and federal laws, but when the two sets of laws differ, there may be some confusion about which one applies. Normally, federal law reigns supreme and usually preempts, or overrides, state law. But in this case, the federal law sets the floor for minimum wage. This means that employers across the country that are subject to the Fair Labor Standards Act (“FLSA”) cannot pay less than $7.25 per hour to their employees. However, if a state law requires that employers pay their employees more than the federal minimum wage, then the employer must meet the state’s minimum wage standard. Thus, Ohio employers must pay the Ohio minimum wage, unless an exemption applies.
Ohio’s “small employer” exemption. Starting in 2022, Ohio employers that grossed less than $342,000 in 2021 are not required to pay Ohio’s $9.30 minimum wage. Instead, those employers are required to pay the $7.25 federal minimum wage to their employees, unless another exemption applies.
Ohio and federal agricultural exemptions. Under both Ohio and federal law, agricultural employers are exempt from paying the federal or Ohio minimum wage to their employees if any of following apply:
- The employer did not use more than 500 man-days of agricultural labor during any calendar quarter during the preceding year.
- The employee is the parent, spouse, child, or other member of the employer’s immediate family.
- The employee:
- is employed as a hand-harvest laborer;
- is paid on a piece-rate basis;
- commutes daily from their permanent residence to the farm; and
- was employed in agriculture for less than 13 weeks during the previous calendar year.
- The employee is:
- 16 years of age or younger;
- employed as a hand-harvest laborer;
- paid on a piece-rate basis;
- employed on the same farm as their parent or legal guardian; and
- paid the same piece-rate wage as employees over the age of 16.
- The employee is engaged in range production of livestock.
500 man-days exemption. The “man-days” exemption was intended to exempt small and family-sized farms. A “man-day” is any day during which an employee performs at least one hour of agricultural labor. To calculate a “man-day”, an agricultural employer needs to keep track of the number of people who worked each day and for how long. 500 “man-days” is roughly equal to having seven employees working for at least one hour each, five days a week during a calendar quarter. It is also not just full-time employees that are counted towards the 500 “man-day” exemption, temporary and seasonal workers also count towards the “man-day” exemption.
Family member exemption. An agricultural employer is not required to pay family members the minimum wage. This family member exemption applies to employees engaged in agriculture and are either the parent, spouse, child or other member of the employer’s immediate family. However, not every blood relative is considered “other immediate family.” According to the U.S. Department of Labor, the following will be considered as part of the employer’s “other immediate family”: stepchildren, foster children, stepparents, and foster parents. Other family members, including siblings, cousins, nieces, nephews, uncles, and aunts do not count as immediate family members.
Employed in agriculture. Ohio law closely resembles, if not mirrors, FLSA requirements when it comes to agricultural exemptions to minimum wage and overtime requirements. But, to qualify for the agricultural exemptions discussed above, an employer must have employees that are employed in “agriculture.” Under the FLSA, “agriculture” has two distinct branches, primary agriculture and secondary agriculture. Employees engaged in primary agriculture are considered to be employed in agriculture for that workweek. Employees engaged in secondary agriculture are only considered to be employed in agriculture if the activities are performed by a farmer or on a farm in connection with the farming operations.
What is considered primary agriculture? Primary agriculture “includes farming in all its branches” and are those activities traditionally viewed as agricultural, including:
- Cultivating and tilling the soil;
- Producing, cultivating, growing, and harvesting agricultural or horticultural commodities; and
- Raising livestock, bees, fur-bearing animals, or poultry.
Activities that qualify as primary agriculture do not necessarily have to take place on a farm. For example, someone employed in a hatchery that is located in an industrial complex is engaged in a primary agriculture activity (raising poultry) and is considered to be employed in agriculture. On the other hand, even though an activity takes place on a farm, it does not necessarily mean it is considered to be a primary agriculture activity. For example, courts have determined that employees of Dairy Farm A are not engaged in a primary agriculture activity when they process milk produced by Dairy Farm B.
What is secondary agriculture? Secondary agriculture includes all activities, including forestry or lumbering operations, that may not themselves be considered agricultural practices but are necessary to agriculture. For an activity to be considered secondary agriculture it must meet two requirements:
(1) the activity must either be performed by a farmer or on a farm; and
(2) the activity must be incidental to or in conjunction with such farming operations.
Secondary agriculture includes preparing an agricultural product for market, delivering agricultural products to storage, to market, or to carriers for transportation to market.
Any activity that is performed by a farmer’s employees, is also considered to be “performed by a farmer.” Moreover, an activity is considered “incidental to or in conjunction with” farming activities if the work being performed is:
(1) An established part of agriculture;
(2) subordinate to the farming operations of the farm; and
(3) not an independent business.
Mixing it up. After understanding what work is considered agricultural, it is important to understand the impact of an employee performing both exempt and non-exempt work. If an employee does both exempt and non-exempt work in the same week, then the employee loses their exemption status and must be paid according to federal/Ohio minimum wage and overtime requirements. However, if an employer can separate the employee’s exempt and non-exempt work into separate weeks, then the employer would only have to pay the employee federal/Ohio minimum wage and overtime for those weeks that the employee performed non-exempt work.
This especially important to agricultural employers that also engage in agritourism activities. Having a farm employee perform work related to an agritourism activity does not qualify for the agricultural exemptions under federal/Ohio law. Agricultural employers should be careful when assigning their employees tasks. Assigning tasks outside the realm of agriculture will subject the employer to the provisions of federal and state minimum wage and overtime laws.
Overtime. Agricultural employers are exempt from paying their agricultural employees an overtime wage rate. This exemption applies to all agricultural employees, not just small farm employees or immediate family members.
Conclusion. Determining whether your employees qualify for an agricultural exemption can be a complex issue, with multiple layers of analysis. It is always best to ask an attorney to help clarify whether your employees are considered to be “employed in agriculture” and thus qualify for the agricultural exemptions to minimum wage and overtime laws. Further, it is always a good idea to seek a lawyer’s counsel every so often to help make sure your operation is continuing to be compliant with labor and employment laws.
References and Resources.
29 U.S. Code Chapter 8 – Fair Labor Standards, https://www.law.cornell.edu/uscode/text/29/chapter-8
29 U.S. Code § 206 - Minimum wage, https://www.law.cornell.edu/uscode/text/29/206
29 CFR Chapter 5 – Wage and Hour Division, Department of Labor, https://www.ecfr.gov/cgi-bin/text-idx?SID=9215c26baf64464cdfbd4073e46247d3&mc=true&tpl=/ecfrbrowse/Title29/29chapterV.tpl
29 C.F.R. §§ 780 et seq. – Exemptions Applicable to Agriculture, https://www.ecfr.gov/cgi-bin/text-idx?SID=09461535e9555139c7d6471d1b26598d&mc=true&node=pt29.3.780&rgn=div5#se29.3.780_1103
Ohio Constitution, Article II, Section 34 – Minimum Wage, https://codes.ohio.gov/ohio-constitution/section-2.34a
Ohio Department of Commerce, 2022 Minimum Wage Poster, https://www.com.ohio.gov/documents/dico_2022MinimumWageposter.pdf
Ohio Revised Code Chapter 4111 – Minimum Fair Wage Standards, https://codes.ohio.gov/ohio-revised-code/chapter-4111
U.S. Department of Labor Wage and Hour Division, Field Operations Handbook Chapter 20 – Agriculture: Related and Seasonal Exemptions, https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/FOH_Ch20.pdf
U.S. Department of Labor Wage and Hour Division, Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA), https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/whdfs12.pdf