These days, industrial hemp never seems to leave the news. Just this week, the U.S. Court of Appeals for the Ninth Circuit declined to decide a case involving the interstate shipment of hemp between Oregon and Colorado by way of Idaho.  Hemp is illegal in Idaho, where the product was seized and the driver was arrested, even though the 2018 Farm Bill allows for the interstate transportation of hemp.  The Ninth Circuit, reviewing the case, determined that the state court actions needed to be decided before federal courts could hear the case.  As you may be aware, Ohio also made news this summer when the state passed a bill legalizing hemp in the state. 

All of these developments involving industrial hemp may leave you with many questions. What is hemp? What did the 2018 Farm Bill do? What does Ohio’s new law do? Most importantly, can I grow and process hemp right now? To help farmers and others interested in the status of the hemp industry, we have recently added a law bulletin entitled “Legal or Not? Growing Industrial Hemp in Ohio” to our Ag Law Library.  There, we sort out the above questions and more.  We also discuss the anticipated development of federal and state hemp regulations.  The bulletin is available for you to read here. 

The U.S. Department of Labor (DOL) says that it has found a number of inefficiencies in the H-2A temporary agricultural labor visa program, and the department has a solution: change the program’s rules.  The DOL has proposed a number of administrative rule changes that it believes will make the approval process move along quicker, relieve burdens on U.S. farms, and create a more level playing field with regards to pay.  Before we talk about the rule changes, let’s recap what the H-2A program is.

H-2A is a visa program for seasonal agricultural laborers from other countries.

Labor shortages have plagued farms across the United States for decades.  Congress first created a visa program for non-immigrant labor in the early 1950s, but it wasn’t until 1986 that Congress established the H-2A visa program for temporary agricultural workers.  Under this program, farmers may apply to employ H-2A workers on their farm on a temporary or seasonal basis for up to a year, but may apply to renew the worker’s visa for up to three total years.

In order to hire H-2A workers, an employer must certify in an application to the DOL that there are not enough qualified domestic workers willing and able to perform temporary and seasonal agricultural labor.  In order to prove that there is not enough domestic labor, the farmer must demonstrate an effort to advertise the available work in the local area.

Further, the farmer must demonstrate to the DOL that employing foreign workers will not negatively affect the wages and working conditions of similarly employed U.S. workers.  In other words, a farmer can’t hire foreign labor because it’s cheaper.  A farmer is expected to pay the foreign workers the same as the farmer would pay domestic workers, based upon the higher of the DOL’s Adverse Effect Wage Rate, minimum wage, or prevailing wage.

What does the Department of Labor seek to change?

The DOL proposes to make several changes to the H-2A program’s administrative rules.  Some of these changes update the rules to reflect what is already happening, while some make slight changes to the program’s overall scope.

• Mandate e-filing.  The DOL currently allows farmers to submit their applications online or in hard copy, but reports that 4/5 of applications are completed online.  A review by the DOL has found that online applications get completed more quickly, have fewer errors, and reduce costs relative to hard copy submissions.  Under the new rule, the DOL would require all applications to be completed online, unless the farmer has a disability or does not have internet access.
• Allow e-signatures.  The DOL currently requires farmers to sign a hard copy of their applications and either scan the document into the application or mail it.  Under the new rule, the DOL would accept e-signatures as equal to handwritten signatures.
• Subdivide the adverse effect wage rate based upon specific agricultural occupations.  In the previous section, we noted that the farmer must pay the foreign workers the same as he or she would pay domestic workers.  One way to determine that wage is to use the DOL’s Adverse Effect Wage Rate.  Currently, the DOL has one rate for a state or region based upon the combined numbers for field and livestock workers.  Under the new rule, the DOL would use Farm Labor Survey data to subdivide agricultural occupations in order to ensure that higher paying occupations, such as supervisors of farmworkers and construction laborers on farms, use an Adverse Effect Wage Rate that properly reflects the wages of those higher paying occupations, rather than one general rate for all agricultural workers.
• Update the methodology for calculating prevailing wage standards.  Another way to calculate the minimum wages of H-2A laborers is to base their pay off of the prevailing wage.  The current method of calculating the prevailing wage, which has not been updated since 1981, requires in-person interviews of employers.  Under the new rule, the DOL would eliminate the in-person requirement and allow states to collect data using more modern methods.
• Incorporate guidance letters regarding animal shearing, commercial beekeeping, custom combining, and reforestation occupations into formal rules.  When asked for an interpretation of its rules and policies, a federal agency may issue a guidance letter to the person seeking an interpretation.  These guidance letters are not necessarily binding, and have no general application beyond the person seeking the interpretation.  By incorporating the guidance into a formal rule, the interpretation holds the force of law.  The DOL identified these occupations as unique relative to other agricultural occupations, and created a special set of procedures to obtain H-2A laborers to work these types of jobs.
• Expand the definition of “agriculture” to include reforestation and pine straw activities.  Currently, reforestation and pine straw occupations are only available for H-2B applications, which are for non-agricultural occupations.  Under the new rule, these activities would be eligible for the agricultural based visa.
• Reduce the time an employer must allow a domestic worker to apply for a job to 30 days.  Currently, the DOL requires a farmer to hire all eligible, willing, and qualified U.S. workers who make themselves available to work until the half way point in the H2-A contract period.  This means that if a farmer has H-2A laborers working under a six-month contract, then the farmer must hire any eligible, willing, and qualified domestic worker during the first three months of the contract.  Under the new rule, the farmer would only have to leave such opportunity open to domestic workers for 30 days.
• Allow an employer to stagger the entry of H-2A labor.  Sometimes a farmer does not need all of the H-2A labor to arrive at once, but rather needs some to start on one date and then others to start on a different date.  Currently, this would require the farmer to submit an application for each date on which the farmer needs H-2A labor.  Under the new rule, the farmer would be able to submit one application but stagger the start dates of his or her workers over the course of 120 days.  This 120-day clock begins on the day the first H-2A workers enter the U.S.

For more information about the proposed changes, visit the proposed rule’s entry on the Federal Register HERE.

The public may submit comments until September 24, 2019.

As part of the public rulemaking process, the DOL is seeking public input on the proposed rule changes.  Members of the public may submit written comments to the DOL until Tuesday, September 24, 2019.

You may submit a comment online (visit https://www.regulations.gov/) or by mail (send to Adele Gagliardi, Administrator, Office of Policy Development and Research, Employment and Training Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5641, Washington, DC 20210).  When mailing comments, be sure to include the rule’s Regulatory Information Number (RIN): 1205-AB89.

August turned out to be a very busy month for food law.  We’re again reading headlines about the definition of meat and debates over cage-free egg laws.  We’ve also come across some interesting criminal actions involving organic labeling fraud and undocumented workers at poultry processing plants.  And yet again we have a Roundup update, but fortunately for Bayer, the target of the latest lawsuits are Home Depot and Lowe’s.  So without further ado, here’s our latest gathering of agricultural law news you may want to know:

Tofurkey cries foul against state definitions of meat.  The maker of edible vegetarian products designed to replicate the taste and texture of meats is fighting back against state labeling and advertising laws that require products labeled as “meat” to be made of meat.  Tofurky filed a lawsuit in federal court in Arkansas to stop the state from enforcing such laws, which is similar to a lawsuit it filed in Missouri and yet another company filed in Mississippi.  Livestock advocacy groups succeeded in having 12 states pass laws restricting the ability of food producers to refer to their products as meats if those products contain no meat.  Livestock advocacy groups argue that the labeling practices are confusing and misleading to consumers, while companies like Tofurky argue that they have a constitutional right to describe their products with meat terminology.  On its website, Tofurky lists beer brats, jumbo hot dogs, “slow roasted chick’n,” “ham style roast,” and more.  None of the products contain meat.

Organic food fraud puts farmers in jail.  A federal judge sentenced a 60-year-old Missouri farmer to serve 10 years and 2 months in prison after being convicted of wire fraud, which is the federal crime of committing financial fraud through the use of a telecommunications wire across state lines.  This includes placing a phone call, sending an email, or advertising online in the furtherance of the fraudulent scheme.  Another three farmers were also sentenced to prison for terms ranging from 3 months to 2 years for their participation.  The fraud involved a decade-long scheme to mix traditional corn and soybeans with a small amount of organic grains and then label everything as certified organic.  The grains were mostly sold as animal feed to producers and companies selling organic meat.  Organic products generally are sold at a high premium, and the volume of goods in this scheme resulted in the farmers receiving millions of dollars from consumers that was fraudulently obtained.  The lengthy prison sentences reflect the farmers’ intentional misrepresentation and mislabeling.  In other words, it was not an accident.

Oregon joins California and Washington to make the west coast cage-free.  States continue to battle over whether eggs should come from cage-free hens or caged hens.  When we last discussed the topic HERE in May, the governor of the state of Washington had just signed his state’s cage-free requirement into law.  Iowa, the nation’s leading egg producing state, has gone the other way in trying to limit cage-free egg production.  Now, Oregon is set to ban the purchase or sale of eggs and egg products from caged hens starting in 2024.  However, Oregon’s law exempts eggs and egg products from caged hens if the sale occurs at a federally inspected plant under the Egg Products Inspection Act or if the caged hens were at a commercial farm with a flock of fewer than 3,000 hens.  You can read the text of the bill HERE.

Immigration and Customs Enforcement raids poultry processing plants.  Federal immigration officials have alleged that managers at five Mississippi poultry processing plants knowingly hired undocumented aliens who are not authorized to work in the United States.  Fines for individuals or companies proven to have actual knowledge that they hired undocumented workers can reach up to $3,000 per undocumented worker.  Individuals may also face prison time.  According to news reports, ICE arrested 680 possibly undocumented workers during its August 7^th raids in Mississippi.  In their applications for the search warrants, the investigators alleged that the companies hired undocumented workers who were wearing GPS ankle monitors as they await deportation hearings, reported Social Security numbers of deceased persons, and used different names at different times.

Latest Roundup lawsuit targets retailers Home Depot and Lowe’s.  You’ve heard us talk before about the thousands of lawsuits against Monsanto (now owned by Bayer) based on the allegation that the glyphosate in products like Roundup has caused cancer.  If you’d like a refresher, you can review our last post HERE.  Now, instead of going after the manufacturer, a new plaintiff is going after retailers.  Plaintiff James Weeks filed two class action complaints in federal court in California against Home Depot and Lowe’s, alleging that the home improvement giants failed to adequately warn customers about the safety risks posed by using the popular weed killer.  Mr. Weeks argues that the labeling leaves the average consumer with the impression that the greatest risk of harm is eye irritation, when in fact the retailers know of the product’s potential carcinogenic properties.  As these complaints are class action complaints, Mr. Weeks seeks to claim representative status over all consumers who purchased Roundup products from these retailers, and thereby lead the case against the retailers.  It will be interesting to see whether the court certifies these cases as class actions, or if this strategy falls short for the plaintiff.  You can read the complaint against Home Depot HERE.

Food giants seek silence from U.S. Commodity Futures Trading Commission.  In 2015, the U.S. Commodity Futures Tradition Commission initiated a lawsuit against Mondelez International Inc. and Kraft Heinz Co. for allegedly manipulating the wheat futures market.  All parties recently agreed to an undisclosed settlement, and entered into a consent order with the court to close the matter.  The agreement apparently included a provision that all parties would refrain from publically commenting about the settlement.  However, the federal agency ended up commenting on the settlement by the end of the week in which the agreement was finalized.  Mondelez and Kraft Heinz believe that such statements violated the terms of the consent order, although the federal agency contests the allegation.  Nonetheless, the confidentiality restrictions make it difficult to know the full details of the settlement.  All we know for certain is that there was one.

Federal courts report that Chapter 12 family farm bankruptcies are on the rise.  The federal court system releases data every quarter on the number of bankruptcies filed each month in that quarter.  The latest numbers for April to June 2019 showed a slight increase in the number of Chapter 12 bankruptcies filed when compared to the same time period in 2018.  Nationwide, there were 164 new filings, compared to 135 in the second quarter of 2018.  The numbers show a gradual increase in the use of Chapter 12 bankruptcy since 2013, but the numbers are starting to tick up to levels not seen since the Great Recession.  Chapter 12 bankruptcy is a special form of bankruptcy that can only be used by family farmers and family fishermen whose total debts do not exceed a certain dollar limit.  The current dollar limit is $4.4 million, but there is legislation awaiting President Trump’s signature to increase the limit to $10 million.  In large part because of these restrictions, Chapter 12 is one of the least commonly used forms of bankruptcy. 

This weekend, as you enjoy your morning cup of coffee and find yourself wondering what’s the news in our court system, look no further than this blog post.  Every now and then there’s a new court opinion related to agricultural law that peaks our interest and makes us want to share a summary of what happened.  This week we read cases about the federal Takings Clause, wind energy, and oil and gas rights.  Here are the stories:

• A property owner may bring a claim in federal court under the Fifth Amendment when the government has violated the Takings Clause by taking property without just compensation.  This case involved a township ordinance requiring all cemeteries to be held open and accessible to the general public during daylight hours.  A property owner with a small family graveyard was notified that she was violating the ordinance.  The property owner filed suit in state court arguing that the ordinance constituted a taking of her property, but did not seek compensation.  The township responded by saying it would withdraw the notice of violation and not enforce the ordinance against her.  The state court said that the matter was therefore resolved, but the property owner was not satisfied with that decision.  She decided to bring a takings claim in federal court.

Before this decision, there was a roadblock to bringing such claim.  Lower courts had read a previous Supreme Court decision to say that if a state or local government commits a taking, the property owner would first have to seek a remedy through the state’s adverse condemnation procedure before going to federal court.  But in doing so, the property owner would actually not have a chance to bring the claim in federal court because the federal court would have to give full faith and credit to the state court decision.  At first, that seemed like what would happen to the property owner because the state court had decided that the issue was moot since the township had agreed not to enforce the ordinance against her.  But the U.S. Supreme Court cleared the way for the property owner by taking the rare action of overruling its prior precedent.  Knick v. Township of Scott, Pennsylvania, was not an Ohio court case, but rather one that made its way all the way up to the U.S. Supreme Court.  To read the case, click HERE.

The final opinion handed down by the justices is certainly important, but it is also notable for Ohio because the Ohio Farm Bureau Federation (OFBF) submitted an amicus brief in support of the property owner through its legal counsel, Vorys Sater Seymour and Pease, LLP of Columbus.  The brief cited examples in Ohio showing that the Supreme Court’s prior precedent was causing problems for Ohio property owners by limiting their access to federal courts in Fifth Amendment takings claims.  OFBF has noted that this was the first time it had submitted an amicus brief to the U.S. Supreme Court.

• Ohio Power Siting Board’s approval of new wind-turbine models in facility’s certificate does not constitute an amendment to the certificate for the purposes of triggering current turbine-setback requirements.  In 2014, the Ohio Power Siting Board approved an application by Greenwich Windpark to construct a wind farm in Huron County with up to 25 wind turbines.  In the initial application, all of the wind turbines would have used the same model of turbine.  Just over a year after the application was approved, the wind farm developer applied for an amendment to add three additional models to the approved wind turbine model list, noting that the technology had advanced since its initial application.  Two of the three newer models would be larger than the originally planned model, but would occupy the same locations and would comply with the minimum setback requirements at the time the application was approved. 

The issue involved whether the new setback requirements, which were put in place by the state between the initial approval and the requested change, should apply.  An amendment to a certificate would trigger the current wind turbine setback requirements.  Greenwich Windpark wanted the less restrictive setback requirements in their initial application to still apply to the newer models, but a local group wanted the more restrictive setback requirements to apply.  The Ohio Power Siting Board said that adding the new wind turbine models would not be an amendment, and would not trigger the more restrictive setbacks.  The Ohio Supreme Court sided with the Ohio Power Siting Board, explaining that the Ohio General Assembly wanted the Ohio Power Siting Board to have broad authority to regulate wind turbines.  This case is cited as In re Application of 6011 Greenwich Winkpark, L.L.C., 2019-Ohio-2406, and is available to read on the Ohio Supreme Court’s website HERE.

• Children claiming to be heirs of reserved oil and gas rights are in privity with previous owners of the interest when connected by an auditor’s deed specifically mentioning those interests.  The issue was whether children claiming their father’s oil and gas interests were blocked by the legal doctrine of issue preclusion from obtaining clear title to their interest when a previous Ohio Dormant Mineral Act (ODMA) lawsuit quieted title to mineral interests underlying their claim.  This preclusion would be possible because the previous owners’ interests formed the basis of the father’s interest.  Even though they were not named in the previous ODMA lawsuit, by virtue of being in privity, or legally connected, to the previous owners, the children would be bound by the previous lawsuit because the ODMA lawsuit cleared the previous owners’ interests along with any interests in their successors and assigns.  Ultimately the court found that because the children stood in their father’s shoes, and his claim would be linked to the previous owners’ claims in the land, the previous ODMA lawsuit binds the children.  This had the effect of eliminating the children’s claims in the oil and gas rights.  This case is cited as Winland v. Christman, 2019-Ohio-2408 (7th Dist.), and is available to read on the Ohio Supreme Court’s website HERE.