The Ag Law Harvest

By:Jeffrey K. Lewis, Esq., Program Coordinator, OSU Income Tax Schools & ANR Extension Monday, October 02nd, 2023
Combine in the field ready to harvest.

Happy Fall Y’all! We are back with another monthly edition of The Ag Law Harvest. This month’s edition brings you an Ohio Supreme Court case that clarifies a party’s obligations under express indemnification provisions in a contract, an Ohio woman’s fight against a local zoning ordinance that sought to remove her pet ducks, and agricultural labor updates. 

Common Law Notice Requirements May No Longer Exist Under Express Indemnification. 
The Ohio Supreme Court recently made a significant decision regarding indemnification clauses in contracts. Indemnification is the right of one party to be fully reimbursed for payments they made on behalf of another party who should have made those payments. There are two types of indemnity: express and implied. Express indemnity is when a written contract explicitly states that one party will reimburse the other under certain circumstances. Implied indemnity is a common law principle where each party is responsible for their own wrongdoing, and the wrongdoer should reimburse the injured party.

In this case, Discovery Oil and Gas contracted with Wildcat Drilling, which included an express indemnification provision. Wildcat was supposed to indemnify Discovery for any fines related to pollution or contamination from drilling. When Wildcat violated Ohio law by using brine improperly, Discovery settled with the Ohio Department of Natural Resources for $50,000 without notifying Wildcat and requested reimbursement. Wildcat refused, arguing that Discovery didn't follow Ohio common law, which requires notice before settling a claim.

The Ohio Supreme Court sided with Discovery, stating that the express clause in the contract indicated the parties' intent to deviate from common law principles. The court clarified that notice requirements for indemnification are determined by the contract terms. Depending on the contract, parties may not need to provide notice before settling a claim and seeking reimbursement. This ruling emphasizes the importance of contract language in determining indemnification obligations.

Medina County Woman Has All Her Ducks in a Row. 
A Medina County woman is able to keep her pet ducks after a battle with the Village of Seville and an interpretation of its zoning ordinances. Ms. Carlson, the owner of the ducks at issue, fought to keep her pet ducks after being ordered to remove them from her property by Wadsworth Municipal Court. Ms. Carlson appealed the municipal court’s ruling, arguing that Seville’s zoning ordinance against “poultry and livestock” is unconstitutionally vague. The appellate court agreed with Ms. Carlson. The appellate court found that Seville’s ordinance against poultry focused on hens, roosters, coop hygiene, and the sale of poultry byproducts such as meat and eggs. The court held that an ordinary person would not be able to understand that keeping other birds, such as ducks, as companion animals would violate Seville’s ordinances. Therefore, Ms. Carlson could not be found to have committed an unclassified misdemeanor by owning pet ducks. However, had Ms. Carlson been keeping the ducks and selling their byproducts such as duck eggs and meat, there might have been a different outcome.  

Farm Labor Stabilization and Protection Pilot Program. 
The U.S. Department of Agriculture (“USDA”) has announced the opening of the Farm Labor Stabilization and Protection Pilot Program (“FLSP”). The FLSP will award up to $65 million in grant funding to provide support for agricultural employers to implement new hearty labor standards/procedures and update existing workplace infrastructure to help promote a healthy and safe work environment. The USDA states that the purpose of the FLSP program is “to improve food and agricultural supply chain resiliency by addressing challenges agricultural employers face with labor shortages and instability.” The FLSP has three goals: (1) drive U.S. economic recovery and safeguard domestic food supply by addressing current labor shortages in agriculture; (2) reduce irregular migration from Northern Central America through the expansion of regular pathways; (3) improve working conditions for all farmworkers. Qualified applicants can receive grants ranging from $25,000 - $2,000,000. The application window closes on November 28, 2023. For more information, view the USDA’s fact sheet on the FLSP

Department of Labor Publishes Proposed Rule to Amend H-2A Regulations. 
The U.S. Department of Labor (“DOL”) Employment and Training Administration (“ETA”) has published a proposed rule titled “Improving Protections for Workers in Temporary Agricultural Employment in the United States.” The proposed rule seeks to amend several H-2A program regulations by: 

  • Adding new protections for worker self-advocacy. 
  • Clarifying when a termination is “for cause.” 
  • Making foreign labor recruitment more transparent. 
  • Making wages more predictable. 
  • Improving workers’ access to safe transportation. 
  • Enhancing enforcement to improve program integrity. 

Read more about the proposed rule by visiting the DOL’s news release. The comment period on the proposed rule ends November 14, 2023. 

Department of Homeland Security Publishes Proposed Rule Amending H-2 Program.  
The U.S. Department of Homeland Security (“DHS”) has published a proposed rule titled “Modernizing the H-2 Program Requirements, Oversight, and Worker Protections.” The DHS announced its intent to strengthen protections for temporary workers through the H-2A and H-2B worker programs by providing greater flexibility and protections for participating workers, and improving the programs’ efficiency. The proposed rule would: 

  • Provide whistleblower protection to H-2A and H-2B workers who report their employers for program violations. 
  • Extend grace periods for workers seeking new employment, preparing for departure from the United States, or seeking a change of immigration status. 
  • Establish permanent H-2 portability, allowing employers to hire H-2 workers who are already lawfully in the United States while the employer’s H-2 petition for the worker is pending. 

The comment period for the proposed rule ends on November 20, 2023.