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Valentine’s Day was indeed a sweet day for Bader Farms, a peach farm in Missouri that claimed that dicamba products by Monsanto/Bayer and BASF drifted onto its property and injured 20,000 of its peach trees over 700 acres. A federal jury agreed and awarded the farm $15 million in compensatory damages. The following day, the jury gave the farm another $250 million in punitive damages against Bayer and BASF, bringing the total award to $265 million.
In 2016, Bader Farms was the first to file a dicamba drift lawsuit against Monsanto. A summary of the lawsuit from our partner, the National Agricultural Law Center, explains that the farm’s claim alleged widespread damage to the peach orchards and a multi-million dollar financial loss. At the center of Bader Farms’ original complaint was Monsanto’s genetically modified Roundup Ready 2 Xtend soybeans and Bollgard II Xtend cotton seeds (“Xtend crops”), dicamba-resistant seeds that Bader Farms alleged were released without an accompanying EPA-approved dicamba herbicide in 2015 and 2016. The farm argued that by selling the Xtend crop seeds without a corresponding herbicide, it was foreseeable to Monsanto that farmers would use old, highly volatile, drift-prone dicamba that had a strong chance of damaging neighboring crops.
Bader Farms later added BASF as a defendant to the case and also added new complaints for dicamba-related damage it suffered during the 2017 growing season. Bader Farms stated that Monsanto and BASF had worked together to manufacture, market, and sell dicamba-based products that they knew would cause harm.
The jury in the federal lawsuit ruled in favor of Bader Farms on all counts. Specifically, the jury concluded that Monsanto was negligent by releasing dicamba-tolerant seeds before releasing the herbicide. The jury also determined that both Monsanto and BASF were negligent because they issued new dicamba products that drifted off-target although the companies claimed that the products were less likely to drift. Important to the punitive damage award, the jury found that Monsanto and BASF had engaged in a “conspiracy to create an ecological disaster to increase profits.”
The Bader Farms case is the first of many dicamba-based cases against Monsanto/Bayer and BASF, combined last year into Multi-District Litigation involving both a Crop Damage Class Action Master Complaint and a Master Antitrust Action Complaint. For an excellent review of the dicamba cases, see the National Agricultural Law Center’s series on “The Deal with Dicamba,” available at https://nationalaglawcenter.org/the-deal-with-dicamba-part-three/.
Last year, we wrote a post on recent developments in ag-gag litigation. In that post, we discussed a few ag-gag laws that had been struck down on First Amendment grounds. Court actions and decisions in recent months show that this trend is continuing. Namely, decisions in Iowa and Kansas have not been favorable to ag-gag laws.
What is an ag-gag law?
“Ag-gag” is the term for state laws that prevent undercover journalists, investigators, animal rights advocates, and other whistleblowers from secretly filming or recording at livestock facilities. “Ag-gag” also describes laws which make it illegal for undercover persons to use deception to obtain employment at livestock facilities. Many times, the laws were actually passed in response to undercover investigations which illuminated conditions for animals raised at large industrial farms. Some of the videos and reports produced were questionable in nature—they either set-up the employees and the farms, or they were released without a broader context of farm operations. The laws were meant to protect the livestock industry from reporting that might be critical of their operations—obtained through deception and without context, or otherwise. The state of Ohio does not have an ag-gag law, but a number of other states have passed such legislation.
Injunction in Iowa lawsuit
You may recall that Iowa’s ag-gag law was overturned in January of last year. The judge found that the speech being implicated by the law, “false statements and misrepresentations,” was protected speech under the First Amendment. The state wasted little time in passing a new ag-gag law that contained slightly different language. (We wrote about the differences between Iowa’s old and new versions of the law here.) After passage of the new law, animal rights and food safety groups quickly filed a new lawsuit against the state, claiming that like the previous law, the new law prohibited their speech based on content and viewpoint. In other words, they argued that the new Iowa law was still discriminatory towards their negative speech about the agricultural industry, while favoring speech depicting the industry in a positive light.
While the new challenge of Iowa’s law has not yet been decided by U.S. District Court for the Southern District of Iowa, the court did grant a preliminary injunction against the law late last year. This means the law cannot be enforced while the case is ongoing, which is certainly a strike against the state. We’ll have to wait and see if the court is persuaded that the new language of the law violates the plaintiff’s First Amendment rights, but for the time being, there is no enforceable ag-gag law in the state of Iowa.
Kansas law overturned
Kansas passed its ag-gag law in 1990, and has the distinction of having the oldest such law in the country. Although the law was long-standing, the U.S. District Court for the District of Kansas still determined that it was unconstitutional.
What exactly did the law say? The Kansas law, among other things, made it illegal, “without the effective consent of the owner,” to “enter an animal facility to take pictures by photograph, video camera or by any other means” with the “intent to damage the animal facility.” The law also made it illegal for someone to conceal themselves in order to record conditions or to damage the facility. “Effective consent” could be obtained by “force, fraud, deception, duress, or threat,” meaning under the law, it was not permissible for an undercover whistleblower to apply for a job at an animal facility and work at the facility if they really intended to record and disseminate the conditions.
In a 39-page opinion, the court explained its reasoning for striking down the law. Following a familiar formula for First Amendment cases, the court found that the law did in fact regulate speech, not just conduct. The court stated that the “prohibition on deception” in the law prohibited what an animal rights investigator could say to an animal facility owner, and that the outlawing of picture taking at animal facilities affected the investigator’s creation and dissemination of information, which the Supreme Court has found to be speech. Next, the court found that the law prohibited speech on the basis of its content; to determine whether someone had violated the law, they would have to look at the content of the investigator’s statement to the animal facility owner. Furthermore, the court pointed out that the law did not prohibit deceiving the facility owner if the investigator intended to disseminate favorable information about the facility. Moving on, the court cited Supreme Court decisions to show that false speech is indeed protected under the First Amendment. Since the court found that the law prohibited speech, on the basis of its content, and that false speech is protected, it had to apply strict scrutiny when considering the constitutionality of the law. Applying this test, the court explained that the law did “not prevent everyone from violating the property and privacy rights of animal facility owners,” instead, it prevented “only those who violate said rights with intent to damage the enterprise conducted at animal facilities.” As such, the law did not stand up to strict scrutiny because it was “underinclusive”—it applied to a small group of people with a certain viewpoint, but nobody else.
Based upon its reasoning above, the court did overturn most of the Kansas ag-gag law. However, it is worth noting that it upheld the part of the law that prohibits physically damaging or destroying property or animals at an animal facility without effective consent from the owner.
What’s on the horizon?
The next two ag-gag decisions will likely be made by courts in Iowa and North Carolina. We discussed the Iowa case above—the court will have to determine whether the slightly different language in the new law passes constitutional muster. We’re also continuing to watch the lawsuit in North Carolina, which has been working its way through the courts for several years now. North Carolina’s “ag-gag” law is interesting in that it doesn’t just prevent secret recording and related actions at livestock facilities, but also prohibits such actions in “nonpublic areas” of a person or company’s premises.
There’s always something going on with the waters of the United States (WOTUS) rule. Last September, we wrote a post about how the 1986/1988 WOTUS rule would replace the 2015 Obama rule until the Trump administration finalized its new rule. Well, the final rule was just announced by the EPA on January 24, 2020. So, what does the new rule categorize as “waters of the United States?” Are there any differences between the rule as it was proposed in February of 2019 and the final rule? Will this version of WOTUS stick?
What is (and isn’t) WOTUS now?
The Trump EPA’s WOTUS rewrite maps out which waters are and are not waters of the United States. The following are WOTUS in the new rule:
- The territorial seas, and waters which are currently used, or were used in the past, or may be susceptible to use in interstate or foreign commerce, including waters which are subject to the ebb and flow of the tide;
- Lakes and ponds, and impoundments of jurisdictional waters; and
- Adjacent wetlands.
Notably, this definition is a great deal shorter than the 2015 iteration of the rule, meaning that less waters fall under the rule. For a refresher on the 2015 rule, we discussed it at length here.
In addition, the new rule contains a much longer list of waters that are not WOTUS:
- Waters or water features that are not identified in the definition of WOTUS, above;
- Groundwater, including groundwater drained through subsurface drainage systems;
- Ephemeral features, including ephemeral streams, swales, gullies, rills, and pools;
- Diffuse stormwater run-off and directional sheet flow over upland;
- Ditches that are not territorial seas, waters used in foreign commerce, or tributaries, and those portions of ditches constructed in some adjacent wetlands;
- Prior converted cropland;
- Artificially irrigated areas, including fields flooded for agricultural production, that would revert to upland should application of irrigation water to that area cease;
- Artificial lakes and ponds, including water storage reservoirs and farm, irrigation, stock watering, and log cleaning ponds, constructed or excavated in upland or in non-jurisdictional waters, so long as those artificial lakes and ponds are not impoundments of jurisdictional waters that are connected the territorial seas, or waters used in interstate or foreign commerce;
- Water-filled depressions constructed or excavated in upland or in non-jurisdictional waters incidental to mining or construction activity, and pits excavated in upland or in non-jurisdictional waters for the purpose of obtaining fill, sand, or gravel;
- Stormwater control features constructed or excavated in upland or in nonjurisdictional waters to convey, treat, infiltrate, or store stormwater run-off;
- Groundwater recharge, water reuse, and wastewater recycling structures, including detention, retention, and infiltration basins and ponds, constructed or excavated in upland or in non-jurisdictional waters; and
- Waste treatment systems.
Changes made to proposed rule
The most significant difference between the proposed rule and the final rule is the treatment of some waters connected by ephemeral streams. Ephemeral streams are those streams that only last for a short time after precipitation. In the proposed version of the rule, if upstream perennial and intermittent tributaries were connected to a water of the United States by an ephemeral stream, they were not WOTUS. The final rule changes this, and such tributaries are WOTUS if they have a surface water connection to a downstream water of the United States during a normal year. To make a long story short, the final rule protects some bodies of water that the proposed rule left out.
So, WOTUS is set in stone now, right?
Not exactly. In addition to the ongoing lawsuits over the brief recodification of the 1986/1988 rules, (see our post here), it is almost certain that environmental groups and some states will file lawsuits against the new WOTUS rule. Additionally, while many in the world of agriculture cheer the new rule, there are other groups that have already spoken out against it. For example, the group Public Employees for Environmental Responsibility (PEER), which includes many EPA employees, scientists, and lawyers, filed a lengthy complaint against the rule with the Inspector General. In the complaint, PEER argues that the new rule violates EPA’s “Scientific Integrity Policy,” which EPA employees must follow when making decisions. PEER alleges that top employees at the EPA did not follow this policy when writing the rule because the rule was not based on science, and EPA staff with expertise in the area were not consulted. While the new rule is currently the law of the land, we’ll have to wait and see how long it will last. Challenges like the PEER complaint will have to be addressed, as well as an inevitable wave of lawsuits. Like the 2015 rule, the lawsuits and challenges will likely alter and/or interrupt the implementation of this so-called “final” rule.
Lawsuits against the U.S. EPA and individual states seem to be a popular strategy to address water pollution problems. Last April, we wrote about Lucas County, Ohio and its suit against the EPA over water quality in the western basin of Lake Erie. Since that time, a federal judge has given another lawsuit concerning Lake Erie, filed by the Environmental Law & Policy Center (ELPC), the green light. But not all litigation concerns Ohio waters—recently, Maryland’s attorney general was directed to sue the EPA and Pennsylvania over water pollution in the Chesapeake Bay. Here are summaries of these two developments.
Environmental Law & Policy Center vs. EPA
We wrote about this lawsuit in February 2019, when ELPC had just filed its complaint. Essentially, ELPC contended that the U.S. EPA violated the Clean Water Act (CWA) when it allowed the Ohio EPA to designate Lake Erie as an impaired water body without instituting a Total Maximum Daily Load (TMDL) for pollutants going into the lake. You can get more details on this case by reading our blog post, here. Subsequently, EPA moved to dismiss the complaint. In addition, Lucas County joined ELPC as co-plaintiffs.
On November 13, 2019, the U.S. District Court for the Northern District of Ohio denied EPA’s motion to dismiss. Judge James Carr ruled that the case can go forward, finding that ELPC “plausibly alleges that Ohio EPA has clearly and unambiguously refused to develop a TMDL for Western Lake Erie.” This means that the action will go forward and that ELPC will be able to argue the case on the merits. You can read the ruling here.
Maryland to sue EPA, Pennsylvania
Meanwhile, in Maryland, the governor recently sent a letter to the state’s attorney general asking him to “commence litigation” against the EPA for “failing to enforce the Chesapeake Bay” TMDL, and against its upstream neighbor, Pennsylvania, for “repeatedly falling short of necessary pollution reduction goals.” At the center of this controversy is Pennsylvania’s draft Watershed Implementation Plan (WIP), which Maryland’s governor alleges will cause Pennsylvania to fall far behind its 2025 pollution reduction targets in addition to not meeting the TMDL. The governor asserts that by accepting Pennsylvania’s WIP with very few changes, the EPA is failing to enforce Pennsylvania’s compliance with the established TMDL.
It typically takes these types of lawsuits a while to work through the courts. The way the courts decide these cases will affect how TMDLs are viewed. Are TMDLs necessary under the CWA and enforceable, as the plaintiffs claim? Or are TMDLs simply soft goals and guidelines for reducing pollution that EPA does not necessarily have to enforce? Ultimately, outcomes of these cases could have implications for agricultural runoff, which can be a contributor to pollution in both Lake Erie and the Chesapeake Bay.
A new rule proposed by the USDA Agricultural Marketing Service (AMS) covers a topic that has been up in the air for more than a decade. The 2008 Farm Bill called on the Secretary of Agriculture to create regulations meant to guide the USDA in determining whether or not a packer, swine contractor, or live poultry dealer gave a person or locality “any undue or unreasonable preference or advantage” when purchasing livestock and meat products. The Secretary of Agriculture entrusted the rulemaking to USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA). GIPSA did propose versions of the rule in 2010 and 2016, but neither ever went into effect due to congressional prohibitions on such rulemaking and a presidential transition, respectively. (The anticipated regulations have long been referred to as the “Farmer Fair Practice Rules.”) Once Trump came into office, his administration did away with GIPSA and gave its responsibilities to AMS, further delaying the rulemaking.
After all this time, what does AMS propose for the Farmer Fair Practice Rules? On January 13, AMS published its proposed rule in the Federal Register. AMS would add a section to the Packers & Stockyards regulations, which would allow the Secretary of Agriculture to “consider one or more criteria” when deciding whether a packer, swine contractor, or live poultry dealer unfairly favored any person or locality over another in their dealings. AMS developed four criteria to be considered when determining whether a packer, contractor, or dealer’s actions were unfair. Actions would be deemed unfair when they:
- Cannot be justified on the basis of cost savings related to dealing with different producers, sellers, or growers;
- Cannot be justified on the basis of meeting a competitor’s prices;
- Cannot be justified on the basis of meeting other terms offered by a competitor; and
- Cannot be justified as a reasonable business decision that would be customary in the industry.
In the rulemaking, AMS provides several examples of fair and unfair practices. AMS also emphasizes several times that the Secretary of Agriculture would not be limited to considering just those four criteria when making a decision, as each situation is unique. In essence, the proposed language is meant to guide the Secretary’s thinking when making a determination about whether or not an action is unfair.
If you would like to read more about this proposed rule it is available in its entirety here. Information about submitting comments on the rule is available at the same link. Comments on the rule may be submitted up until March, 13, 2020. Will this version of the elusive Farmer Fair Practice Rules finally stick? We will have to wait and see.
With 2019’s ups and downs in the weather and the marketplace, it’s likely that many farmers used the Federal Crop Insurance Program to mitigate their losses. Those farmers whose crop insurance claims reach $200,000 or more will be audited by the USDA’s Risk Management Agency.
What’s the purpose of an audit—does it mean you’re in trouble with the government? What can you expect when going through the audit process? How do you prepare for an audit? What kind of records and documentation do you need? All of these questions and more are answered in a new fact sheet we recently published through our partnership with the National Agricultural Law Center. Click here to read the fact sheet to better prepare you for going through an audit.
I often receive quizzical looks when someone asks me what kind of law I practice and I say “agricultural law.” A common response is “what in the world is that”? A look back at agricultural law in 2019 provides a pretty good answer to that question. Our review of major developments in the last year illustrates the diversity of legal issues that make up the world of agricultural law. It’s never dull, that’s certain.
Here are the highlights of what we saw in agricultural law in 2019:
- The Lake Erie Bill of Rights (LEBOR). Toledo citizens gained national attention when they passed a charter amendment granting legal rights to Lake Erie and its ecosystem to “exist, flourish, and naturally evolve.” The amendment also allowed Toledoans to sue corporations and governments that violate the lake’s legal rights. Ohio’s legislature quickly enacted a law prohibiting any attempt to enforce LEBOR, and Drewes Farm challenged LEBOR as unconstitutional in a lawsuit that is still tied up in federal court. While Toledoans won’t be able to use LEBOR to recognize legal rights for the lake, the measure raised awareness of the water quality frustrations felt by Toledoans and others with ties to Lake Erie, and brought attention to similar efforts around the country to protect natural resources by granting them legal rights. Read our review of LEBOR here.
- Watersheds in Distress tug-of-war. Controversial rules proposed by the Kasich administration would have expanded areas in Ohio designated as “watersheds in distress” and added regulations for farmers operating within those areas. Governor DeWine’s new Director of Agriculture yanked the rules upon taking office in January, however, effectively ending the controversy over whether more regulations for farmers are the solution to Ohio’s water quality problems. The governor's H2OH initiative offers an alternative to the Watersheds in distress approach.
- Hemp hemp, hooray. After the 2018 Farm Bill legalized hemp by distinguishing it from marijuana under federal law, then authorized states to allow hemp production, Ohio passed legislation also decriminalizing hemp. Ohio’s proposed rules for cultivating and processing hemp are now out, and ODA held a hearing on the proposed rules on December 18, 2019. ODA also submitted Ohio’s Hemp Production Plan to the USDA in December, and the USDA approved the plan. Once the state rules become final, Ohio’s hemp program will open up and applicants can apply for cultivation licenses and begin growing hemp as a commodity crop in 2020. ODA’s hemp program page is here.
- Waves of WOTUS. We began 2019 with the Trump administration’s proposed WOTUS rewrite in February, which is still under review and not yet effective. We followed that with the administration’s announced repeal of the Obama-era 2015 WOTUS rule in September; the repeal became effective on December 23, 2019. There’s more: the administration published a reinstatement of the WOTUS definition from 1986/1988 until its proposed rule becomes final. But that’s not all. Sprinkled in and around those dates were a slew of lawsuits and injunctions challenging the Obama-era rule, the rulemaking process, and the pre-2015 definitions of WOTUS. By the end of the year, we were left with a patchwork of different WOTUS rules across the country and uncertainty about which are actually in effect. Read our latest WOTUS post here.
- Third Roundup cancer lawsuit is biggest yet. A jury awarded a whopping $2 billion to a California couple who claimed that Monsanto failed to warn them about the health risks of using Roundup, which they believe caused their non-Hodgkins lymphoma. This was the largest of three verdicts against Monsanto to date, but the court later reduced the amount to $87 million. Approximately 13,000 more Roundup cases are pending in state and federal courts across the country, and more Roundup lawsuits are also underway against Home Depot and Lowe’s. Bayer announced in June that it would invest $5.6 billion on weed management research to find alternatives to the glyphosate used in Roundup.
- Ohio’s Right to Farm law expanded. Buried deep in Ohio’s budget bill were significant changes to Ohio’s Right to Farm law, the law that gives agricultural activities immunity from civil nuisance lawsuits. The changes were an obvious response to the Lake Erie Bill of Rights initiative. The revisions allow agricultural activities on any CAUV land and agricultural activities conducted by a person pursuant to a lease agreement to qualify for the immunity, in addition to the pre-existing law’s coverage for land owners enrolled in the “Agricultural District Program” with the county auditor. The new law also attempts to clarify the types of agricultural activities that receive protection under the law, including fertilizer and manure applications and any expansions or changes in farm operations. Read more about the changes, which became effective October 17, here.
- Congress increases farm bankruptcy limit. Sometimes Congress can agree on something. The Family Farmer Relief Act of 2019 is one example. The federal bill, effective August 23, 2019, raised the debt limit for family farmers and fishermen seeking to use Chapter 12 bankruptcy law to reorganize debts and stay in business. Farmers may now have an aggregate debt of up to $10 million when using Chapter 12, rather than the previous limit of $4.4 million.
- Revisions to H-2A rules begin. Long awaited revisions to the H-2A program are underway. In October, changes were made to the labor market test for H-2A labor certification, which determines whether qualified American workers are available to fill temporary agricultural positions and if not, allows an employer to seek temporary migrant workers. Employers will no longer have to advertise a job in a print newspaper of general circulation in the area of intended employment. For the final rule, visit this link.
- Meat and eggs are not so simple anymore. While all is quiet in Ohio, the country continues to battle over what exactly is “meat” and when eggs must come from cage free hens. The most recent egg law arose in Michigan, whose lawmakers passed a bill that will require all eggs sold in the state by 2024 to be from birds housed in cage-free facilities. Oregon and Washington passed similar laws in 2019. Meanwhile, litigation in Arkansas has put a hold on carrying out a state law that prohibits labeling a food product as “meat” if it doesn’t derive from an animal. A similar law and lawsuit developed in Missouri last year. And in Washington DC, the USDA and FDA jockeyed for regulatory authority over “cell cultured meat” and finally agreed to divide labeling and inspection authority between the two agencies. We expect these food battles to continue in 2020.
- Solar leasing on the rise. Yes, solar leasing in Ohio. Thousands of acres of farmland in Ohio will soon be home to utility-scale solar energy facilities under long-term solar energy leases. The Ohio Power Siting Board has approved six solar facilities, with eight more in the works. We’ve examined the legal issues raised by solar energy leasing on farmland and have summarized them in our Farmland Owner’s Guide to Solar Leasing, available here.
What might the wide world of agricultural law see in 2020? We’ll tackle that question next, so stay tuned for more.
Hemp, drones, meat labeling and more—there is so much going on in the world of ag law! With so much happening, we thought we’d treat you to another round of the Harvest before the holidays.
Hemp for the holidays. As 2020 and the first growing season approach, there has been a flurry of activity surrounding hemp. States have been amending their rules and submitting them to the USDA for approval in anticipation of next year. In addition, just last week USDA extended the deadline to comment on the interim final hemp rule from December 30, 2019 to January 29, 2020. If you would like to submit a comment, you can do so here. To get a refresher on the interim rule, see our blog post here.
In other hemp news, EPA announced approval of 10 pesticides for use on industrial hemp. You can find the list here. Additional pesticides may be added to the list in the future.
Congress considers a potential food safety fix. It’s likely that over the last several years, you’ve heard about numerous recalls on leafy greens due to foodborne illnesses. It has been hypothesized that some of these outbreaks could potentially be the result of produce farms using water located near CAFOs to irrigate their crops. A bill entitled the “Expanded Food Safety Investigation Act of 2019” has been introduced to tackle this and other potential food safety problems. If passed, the bill would give FDA the authority to conduct microbial sampling at CAFOs as part of a foodborne illness investigation. The bill is currently being considered in the Senate Health, Education, Labor, and Pensions Committee.
Animal welfare bill becomes federal law. In November, the President signed the “Preventing Animal Cruelty and Torture Act” (PACT), into law. PACT makes it a federal offense to purposely crush, burn, drown, suffocate, impale, or otherwise subject non-human mammals, birds, reptiles, or amphibians to serious bodily injury. PACT also outlaws creating and distributing video of such animal torture. The law includes several exceptions, including during customary and normal veterinary, agricultural husbandry, and other animal management practices, as well as during slaughter, hunting, fishing, euthanasia, etc.
No meat labeling law in Arkansas? Last winter, Arkansas passed a law that made it illegal to “misbrand or misrepresent an agricultural product that is edible by humans.” Specifically, it made it illegal to represent a product as meat, beef, pork, etc. if the product is not derived from an animal. Unsurprisingly, the law did not sit well with companies in the business of making and selling meat substitutes from plants and cells. In July, The Tofurky Company sued the state in the U.S. District Court for the Eastern District of Arkansas, Central Division, claiming the labeling law violates the First and Fourteenth Amendments, as well as the dormant Commerce Clause. On December 11, the District Court enjoined, or stopped Arkansas from enforcing, the labeling law. This means that the state will not be able to carry out the law while the District Court considers the constitutionality of the law. We will be following the ultimate outcome of this lawsuit closely.
Ag wants to be part of the drone conversation. The Senate Committee on Commerce, Science, and Transportation is currently considering a bill called the “Drone Advisory Committee for the 21st Century Act.” If passed, the bill would ensure that the Federal Aviation Administration (FAA) includes representatives from agriculture, forestry, and rangeland, in addition to representatives from state, county, city, and Tribal governments on the Drone Advisory Committee (DAC). Thus, such representatives would be part of the conversation when the DAC advises the FAA on drone policies.
Ag financing tools may get an upgrade. The “Modernizing Agriculture and Manufacturing Bonds Act,” or MAMBA (what a great name) was introduced very recently in the House Committee on Ways and Means. Text of the bill is not yet available, but when it is, it should be located here. According to this fact sheet, the bill would make a number of changes to current law, including increasing “the limitation on small issue bond proceeds for first-time farmers” to $552,500, repealing “the separate dollar limitation on the use of bond proceeds for depreciable property” which would mean famers could use the full amount for equipment, breeding livestock, and other capital assets, and modifying the definition of “substantial farmland” to make it easier for beginning farmers to gain access to capital.
Shoring up national defense of agriculture and food is on the docket. The Committee on Agriculture, Nutrition, and Forestry sent the National Bio and Agro-Defense Facility Act of 2019 (NBAF) to the floor of the Senate for consideration. Among other things, bill would allow the USDA, through the National Bio and Agro-Defense Facility, to address threats from human pathogens, zoonotic disease agents, emerging foreign animal diseases, and animal transboundary diseases, and to develop countermeasures to such diseases. Essentially, USDA and NBAF would see to national security in the arena of agriculture and food.
We hope you have a wonderful holiday season! We will be sure to continue the ag law updates in the next decade!
Christmas is a good time to make wishes for the peace and well-being of others. One of our top wishes this year does that: we hope for all Ohio farmers to have written farmland leases. It’s an odd wish, we know. But putting leases in writing can help landowners and farm tenants live in peace, and we like that.
Farm leases have always been prone to being verbal agreements, sealed with a handshake. Simplicity and trust are two plausible reasons we’ve done business that way. But a written farm lease can be simple, and using one doesn’t have to mean that the parties don’t trust each another. Instead, a lease can keep distrust from arising between the parties by anticipating needs and foreclosing uncertainties and disagreements.
One of the strongest disagreements we hear about verbal farm leases is whether one party can terminate the lease without giving the other much notice of that termination. For example, if Riley has rented land from Dale every year for the past ten years, can Dale terminate the lease for the 2020 planting season in February of 2020? What if Riley has already purchased inputs, added nutrients, or planted a cover crop? Or perhaps Dale passes away at the end of the year. Will Riley lose the lease if Dale’s children sell the land before planting season begins? These are the uncertainties that can lead to fighting, distrust, and sometimes, costly and difficult litigation.
A written farmland lease can prevent these uncertainties that can arise with verbal leases. A written lease can state how much notice is required in order for one party to terminate the lease. It can address other potentially problematic issues, such as who repairs drainage tiles, fences and access points, how to address new subsurface drainage and soil fertility needs, and whether and how to adjust annual lease rental rates. When an issue or question about the arrangement develops, the written farm lease can provide the already agreed-upon answer or solution.
When it comes to the peace and well-being of farmers, written farmland leases are a good thing to wish for. So let’s keep the Grinch of uncertainty from showing up in 2020, and put those farmland leases in writing. For our resources on what to include in a written farm lease, how to create an enforceable lease, and other farm lease needs, please visit this page.
Written by Ellen Essman and Peggy Hall
The holidays are almost here, 2019 is almost over, but the world of ag law isn’t taking a break. From cannabidiol, to Ohio bills on water quality and wind power, to a cage-free egg law in Michigan, here’s the latest roundup of agricultural law news you may want to know:
FDA warns companies about cannabidiol products. If you’ve been following the hemp saga unfold over the past year, you know that the Food and Drug Administration (FDA) has been contemplating what to do with cannabidiol, or CBD from derived hemp products. In addition to manufacturing standards, FDA has also considered how CBD products are marketed and labeled. Although FDA has issued no official rules on CBD marketing and labeling, the agency has warned a number of companies that their marketing of CBD violates the Federal Food, Drug, and Cosmetic Act (FD&C Act). On November 25, FDA sent warning letters to 15 companies. FDA asserts that the companies “are using product webpages, online stores and social media to market CBD products in interstate commerce in ways that violate the FD&C Act.” In particular, FDA is apprehensive about those companies who market CBD products in ways that claim they can treat diseases or be used therapeutically for humans and animals. Since CBD has not been approved by FDA or found safe for these uses, companies cannot make such claims. You can see FDA’s news release for more information and for the list of companies.
It won’t be as difficult for financial institutions to serve hemp related businesses. Federal agencies and state bank regulators released a statement clarifying what is required of banks when hemp businesses are customers. Since hemp was removed from the federal list of controlled substances, banks no longer have to file a Suspicious Activity Report on every customer involved in growth or cultivation of hemp just because they grow hemp. This action will make it easier for those legally cultivating hemp to work with banks and obtain loans for their farms. For more information, the agencies’ press release is available here.
Ohio House considers the Senate’s water quality bill. Ohio’s House Energy & Natural Resources Committee held a hearing on Senate Bill 2 just last week. The bill would implement a Statewide Watershed and Planning Program through the Ohio Department of Agriculture (ODA). Under the bill, ODA would be charged with categorizing watersheds in Ohio and appointing coordinators for each of the watersheds. ODA and the coordinators would work closely with soil and water conservation districts to manage watersheds. Ag groups such as the Sheep Improvement Association, the Cattleman’s Association, the Pork Council, the Dairy Producers Association, and the Poultry Association testified in favor of SB 2.
Ohio House committee debates wind bill. The House Energy & Natural Resources Committee was busy last week—in addition to SB 2, they also discussed House Bill 401. In the simplest terms, if passed, HB 401 would allow townships to hold a referendum on approved wind projects. This means that with a vote, townships could overturn decisions made by the Ohio Power and Siting Board (OPSB). In the committee hearing, wind industry representatives argued that such a referendum would be harmful, since it would overturn OPSB decisions after companies have already spent a great deal of money to be approved by the Board. They also argued that the bill singles out the wind industry and does not allow referendums on other energy projects. Republican committee members signaled that they may be willing to revise the language of HB 401 to allow a referendum before OPSB decisions.
Iowa’s ag-gag law is paused. In May, we wrote about Iowa’s new ag-gag law, which was the state’s second attempt to ban undercover whistleblowers and journalists from secretly filming or recording at livestock production facilities. In response, numerous animal rights groups sued the state, claiming that the law unconstitutionally prevents their speech based on content and viewpoint. On December 2, the U.S. District Court for the Southern District of Iowa issued a preliminary injunction, which means that the state will not be able to enforce the ag-gag law while the lawsuit against it is being considered. The preliminary injunction can be found here.
Cage free eggs coming to Michigan in 2024. Michigan lawmakers recently passed Senate Bill 174, which, among other things, will require that all birds producing eggs both in and out of the state be housed in “cage-free” facilities by 2024. The cage-free facilities will have to allow hens to roam unrestricted with the exception of exterior walls, and some types of fencing to contain the birds. In an indoor facility, the farmer must be able to stand in the hens’ usable floor space while caring for them. In addition, the facilities must have enrichments for hens such as scratch areas, perches, nest boxes, and dust bathing areas. Michigan joins California, Oregon, Rhode Island, and Washington in banning non-cage-free eggs. Note that Michigan’s law will apply to Ohio egg producers who sell eggs to buyers in Michigan.
Case watch: hearing set in Lake Erie Bill of Rights case. The court has set a January 28, 2020 hearing date for the slow moving federal lawsuit challenging the Lake Erie Bill of Rights (LEBOR) enacted by Toledo voters in February. The hearing will likely focus on several motions to dismiss the case filed by the parties on both sides of the controversy, but Judge Zouhary indicated that he’ll set the agenda for the hearing prior to its date. Drewes Farm Partnership filed the federal lawsuit against the City of Toledo in February, claiming that LEBOR is unconstitutional and violates several Ohio laws. The State of Ohio was permitted to join the farm as plaintiffs in the case, but the court denied motions by Toledoans for Safe Water and the Lake Erie Ecosystem to join as defendants in the case. For more on the LEBOR lawsuit, refer to this post and this post. For our explanation of LEBOR, see this bulletin.
Stay tuned to the Ohio Ag Law Blog as we continue to track these and other developments in agricultural law through the holidays and beyond.