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Even with most of the country shut down, the U.S. EPA and the Supreme Court last week released an important rulemaking and a decision, respectively, regarding how parts of the Clean Water Act will be interpreted going forward. On April 21, 2020, the EPA and the Department of the Army published the Trump administration’s final rule on the definition of “waters of the United States” (WOTUS) under the Clean Water Act (CWA). Then, on April 23, the Supreme Court released its long awaited opinion determining whether or not pollutants from a point source, which are released and then carried by groundwater into a navigable water, must be permitted under the CWA.
Trump’s new WOTUS
If you recall, we explained this final rule in January when the draft version was released. Basically, the Trump administration wanted to repeal and replace the Obama administration’s 2015 WOTUS rule (explained here) because the administration felt that it was overreaching in the waters it protected. The Trump administration did repeal the 2015 rule, and replaced it with the old 1986/1988 version of the WOTUS rule while they worked on the new version. (See an explanation of the 1986/1988 language here.)
So what is included in the administration’s new definition? The following are defined as WOTUS, and therefore subject to the CWA under 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.
Importantly, the new rule also includes an extensive list of what waters are not WOTUS, and therefore will not be protected by the CWA:
- Waters or water features that are not identified in the definition of WOTUS, above;
- Groundwater, including groundwater drained through subsurface drainage systems;
- Ephemeral (caused by precipitation) 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.
Currently, the 1986/1988 rules are the law of the land until this new rule goes into effect on June 22, 2020. While this is the so-called “final” rule, chances are that it will be anything but final. Like Obama’s 2015 rule, this new 2020 rule will probably be subject to lawsuits, this time from environmental groups and some state governments. If you want to know more about WOTUS, our colleagues at the National Ag Law Center have created a very helpful timeline that explains all the different definitions of waters of the United States.
U.S. Supreme Court determines the scope of a “point source”
The CWA requires the polluter to obtain a permit from the EPA if pollutants are being discharged from a point source into navigable waters. Under the CWA, “point source means any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.” The term “navigable waters” is defined as “the waters of the United States, including the territorial seas.”
In County of Maui, Hawaii v. Hawaii Wildlife Fund et. al., the United States Supreme Court was tasked with determining whether water treated by the County of Maui, which is pumped into the ground water and then travels about half a mile before it goes into the Pacific Ocean, requires a point source permit from the EPA. Ultimately, in a 6-3 majority led by Justice Breyer, the court decided that yes, in this case, a permit would be required. However, that does not mean that every conveyance through ground water will have the same outcome.
So, how did the court come to this conclusion? First, Justice Breyer examined the meaning of the word “from” in the CWA. Remember that the definition of a point source “means any discernible, confined, and discrete conveyance…from which pollutants are or may be discharged.” On one hand, Breyer says that the Ninth Circuit’s definition of “from” was too broad, and on the other, he says that Maui’s definition was too narrow. The Ninth Circuit adopted a “fairly traceable” approach, meaning that permits would be required for any pollutant that is “fairly traceable” back to a point source. Breyer and the majority say that the Ninth Circuit took it too far, because then any pollutant that travelled for years and years or many miles could be considered to be “from” a point source. Maui County argued that “if at least one nonpoint source” is “between the point source and the navigable water,” then no permit is necessary under the CWA. The majority felt this was too narrow, because then every time a pollutant was moved along to a navigable water by a little bit of rainwater or a small stretch of groundwater, the polluter would be free to pollute without a permit. In other words, there would be a huge loophole in the statute—because the polluter or “pipe’s owner, seeking to avoid the permit requirement,” could “simply move the pipe back, perhaps only a few yards, so that the pollution must travel through at least some groundwater before reaching the sea.” What is more, Breyer cites congressional actions and history to interpret that Congress did not mean to make the statute as broad as the Ninth Circuit found it to be, nor as narrow as Maui County and the EPA suggest.
If the majority determined that one side read the statute too liberally and one too narrowly, then in what situations are point source permits required? Well, the court takes a kind of “we know it when we see it” approach. The court says that a permit is required “when there is a direct discharge from a point source into navigable waters or when there is a functional equivalent of a direct discharge.” The court further explains this language saying that a “functional equivalent” happens when pollutants reach the “same result through roughly similar means.” The court then provides some examples. For instance, a permit is obviously needed if a pipe ends just a couple of feet from a navigable water, and the pollutants then travel underground or across the land to the navigable water. However, “[i]f the pipe ends 50 miles from navigable waters,” the pollutants would travel through a long stretch of groundwater, mixing with other pollutants, and taking years to reach the navigable waters. In this situation, the court says a permit would likely not be required. Finally, Breyer lists relevant factors to consider when determining whether a permit is required:
- Transit time,
- Distance traveled,
- The nature of the material through which the pollutant travels,
- The extent to which the pollutant is diluted or chemically changed as it travels,
- The amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source,
- The manner by or area in which the pollutant enters the navigable waters, and
- The degree to which the pollution (at that point) has maintained its specific identity.
Note that other factors could apply. In addition, the court says that time and distance will often be the most important factors, but not always. In the future, the EPA and lower courts will use this guidance to determine whether or not a point source permit is required.
Two major actions took place last week that will guide how the CWA is carried out going forward. Trump’s WOTUS rule could be taken down by lawsuits or replaced by the next administration, and the Supreme Court’s ruling may be further clarified by future decisions. As of today, though, these are the guidelines for implementing the CWA.
Economic relief measures in the CARES Act have proven difficult for farms, first due to confusion over which and how farmers qualify and also by soaring demand and depleted funding. But the recently enacted Paycheck Protection Program and Health Care Enhancement Act (HR 266) should help. The legislation injects more funds into both the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans Program (EIDL) and clarifies that farmers can qualify for EIDL loans. The bill also came with a bonus: additional guidance from the USDA and SBA for farmers seeking to access the programs. Both programs are first-come, first-served, so farm businesses who haven’t applied for the funds should decide whether to do so right away.
Here’s how the new legislation affects agricultural businesses:
- Allocates another $310 billion for the PPP to provide payroll funding for eligible employers, which includes $60 billion in funding for smaller lending institutions working with PPP loan applicants.
- Doubles the EIDL program, adding another $10 billion to the SBA disaster loan program for eligible businesses.
- Clarifies that agricultural enterprises are eligible for EIDL loans.
Using the PPP: a few quick tips
The SBA will resume accepting applications for the PPP today. Information about the program is on SBA’s website, here. Generally, PPP gives loans of up to $10 million at 1% interest to keep employees employed, with a loan maturity of two years and generous forgiveness provisions.
Farm businesses, including cooperatives, with fewer than 500 employees or who fit within the definition of a “small business concern” may apply for a PPP loan through an approved lender. Lenders include local banks as well as agricultural lenders in the Farm Credit System. Farmers should talk first to the lenders with whom they ordinarily do business to see if the lenders are participating in the PPP. If not, SBA provides a lender locating tool here.
The PPP application is here. Employers may use the loan for payroll costs or owner compensation replacement, as well as for mortgage interest, rent, and utility payments and interest payment on other debts, but 75% of the expenditures must be for payroll costs. To determine the maximum loan amount, an employer must document and calculate aggregate payroll costs from the previous 12 months, from calendar year 2019, or from February to June of 2019 if a seasonal employer. The SBA provides assistance on how to calculate payroll costs, and finally addresses the requirements for self-employed farms who report income on Schedule F. Read the guidance here, and see question 3 if you’re reporting income on Schedule F.
Upon receiving a PPP loan, a lender will set up a separate account for the funds. Borrowers should carefully document loan expenditures. This is not only for compliance purposes, but also because the PPP loan program includes a forgiveness component that forgives an amount equal to the sum of eligible costs and payments made during the eight weeks following disbursement of loan funds. At least 75% of the amount forgiven has to be for payroll costs, and the amount may be reduced by reductions in total salary or wages. Borrowers will have to apply for forgiveness, and documentation of all expenditures will prove necessary to the forgiveness process. We’re awaiting additional guidance on the forgiveness provisions, so keep an eye out for more information on this important topic.
The EIDL program
Farm businesses and agricultural cooperatives with no more than 500 employees may also now apply for EIDL, which gives loans up to $2 million for businesses that suffer economic injuries due to COVID-19. Because the program ran out of funds, there is a backlog in EIDL applications and the SBA is not reopening the loan portal until it catches up with the backlog. If SBA does reopen the program, businesses apply directly through the SBA here.
Businesses may use an EIDL loan for fixed debt, payroll, accounts payable, and other operating expenses due to the pandemic, but can’t use the funds for the same purposes as the borrower’s PPP loan. The interest rate for EIDL is higher at 3.75% (2.75% for non-profits), but the term can be up to 30 years.
Important to note: EIDL also includes an “emergency advance” component that provides an employer up to $1,000 per employee or a maximum of $10,000 as a grant. A borrower doesn’t have to repay the advance, even if the borrower doesn’t ultimately qualify for a loan. But if the borrower also has a PPP loan, the PPP forgiveness is reduced by the $10,000 EIDL advance. The emergency advance can go towards paying sick leave, payroll, increased materials costs, rental or mortgage payments, or other obligations due to revenue losses, as long as the borrower hasn’t used PPP funds for those costs.
There's still more for farms to digest from the CARES Act. The Farm Office team is ready to help! Join us for "The Farm Office is Open" tonight at 8 p.m., when we'll discuss the CARES Act programs and other economic developments for agriculture. Register for the live webinar and access past webinar recordings here.
Who knew wedding barns could lead us to the Ohio Supreme Court? Such is the case for a longstanding controversy over a barn in Medina County. Litchfield Township so opposed the use of the barn for weddings that it initiated a lawsuit and eventually appealed the case to Ohio’s highest court. In a unanimous decision issued today, the court ruled against the township and in favor of the wedding barn.
The case revolves around Forever Blueberry Barn, LLC (“Blueberry Barn”), whose owners built a barn in 2015 in Litchfield Township. The owners’ plans were to host weddings and other social events in the barn. The owners believed their use qualified the barn as "agriculture" under Ohio’s broad “agricultural exemption” from zoning authority. The township thought differently, and claimed that the use was not agriculture and instead violated the township’s residential district zoning regulations. The township sought an injunction to prevent weddings and events from taking place in the barn.
The Medina County Court of Common Pleas issued the injunction against Blueberry Barn, agreeing that the barn did not qualify as agriculture under the agricultural exemption. But the court later withdrew the injunction upon receiving evidence that the owners of Blueberry Barn had planted grape vines on the property. Doing so constituted “viticulture," which is within the definition of “agriculture” for purposes of the agricultural exemption, the court determined.
On an appeal by the township, however, the Ninth District Court of Appeals concluded that the trial court should have examined whether the barn itself was being “used primarily for the purpose of vinting and selling wine.” Ohio’s agricultural exemption prevents townships from using zoning authority to prohibit the use of land for “agriculture,” which includes viticulture, and also states that townships can’t prohibit the use of buildings or structures “used primarily for vinting and selling wine and that are located on land any part of which is used for viticulture.…” The appellate court said that a determination must be made at the trial level whether the wedding barn structure was “used primarily” for wine vinting and sales.
At its second trial court hearing, Blueberry Barn brought forth evidence that it produced and stored wine and winemaking equipment in the barn. Blueberry Barn also explained to the court that persons could only rent the wedding barn if they purchased wine from Blueberry Barn. Based on this evidence, the trial court concluded that the primary use of the barn was for vinting and selling wine. On a second appeal by the township, the Ninth District Court of Appeals agreed with the trial court’s judgment. The township appealed yet again, this time to Ohio’s Supreme Court.
The issue before the Court focused on one word in the agricultural exemption: primarily. In order for the agricultural exemption to apply, the wedding barn must be used primarily for vinting and selling wine. The agricultural exemption does not define the word primarily, so the Court looked to the ordinary dictionary meaning of the word “primary,” which is “of first rank, importance, or value.” The Court reminded us that whether a use is primary is a question of fact to be determined by the trial court.
The township argued that the trial court’s conclusion that vinting and selling wine was the primary use of the barn was incorrect, because only 4% of the barn’s physical space involved vinting and selling wine. The Supreme Court disagreed with such a conclusion, and clarified that “primary” does not mean “majority.” The Court stated that the amount of space or time devoted to vinting and selling wine would not determine whether the use is “primary.” It would not be unreasonable for a new winery producing limited quantities of wine in its early stages of production to use its barn space for other purposes, reasoned the Court.
One never knows when the Buckeyes will pop up in a conversation or even a court case, and it happened in this one. In a teaching moment, the Supreme Court used Ohio Stadium to illustrate its interpretation of the word “primary.” It would be hard to argue that football is not the primary use of Ohio Stadium even if the stadium holds 20 events a year and only 7 of those events are for Buckeye football, the Court explained. The same concept applies to determining the primary use of a barn. Additionally, the Court pointed to the fact that only those who purchased wine from Blueberry Barn could use the facility for weddings or events as further support for the trial court’s factual determination that wedding rentals contributed to the barn’s primary use of vinting and selling wine. The Court affirmed the ruling in favor of Blueberry Barn, bringing an end to the six-year wedding barn controversy.
I’ve taught zoning law and Ohio’s agricultural exemption for many years. One question I’ve received hundreds of times is this: how do we know which use of a structure is “primary”? The Court’s decision today sheds light on this seemingly minor but highly relevant question. The answer is one that helps us interpret not only the “used primarily for vinting and selling wine” language in the agricultural exemption, but also relates to additional provisions that apply to “agritourism” structures. Several references in the agricultural exemption prohibit zoning regulation over buildings “used primarily” for agritourism. When next asked what “primary” means, I can now refer to the new “primary-use test” created today by the Supreme Court: primary does not mean majority, but does mean of first rank, importance, or value. That’s a primary contribution to Ohio’s agricultural zoning law.
Read the Ohio Supreme Court's decision in Litchfield Twp. Bd. Of Trustees v. Forever Blueberry Barn, L.L.C. here.
Although many of us are quarantined at home these days, the gears of the legal world are still turning. Here’s our gathering of recent notable news and legal developments:
Our Farm Office is open Monday night! Join us for the Farm Office’s live online office hours this Monday night from 8—9:30 p.m. Our team of experts will provide updates on the Paycheck Protection Program and the dairy economy and discuss COVID-19 macro-economic and export impacts, BWC dividends, property tax concerns, potential legal issues arising from COVID-19, and other issues you want to discuss. Register at https://go.osu.edu/farmofficelive.
What’s the deal with dicamba? Our partner, the National Agricultural Law Center, is hosting a free webinar on dicamba litigation on Wednesday, April 15 at noon EST. "The Deal with Dicamba: An Overview of Dicamba Related Litigation," will feature attorney Brigit Rollins, who will review each of the dicamba lawsuits, the claims made by the plaintiffs, and what the outcome of each suit could mean for dicamba use in the United States. Go here to learn more.
Walmart sued for employee’s COVID-19 death. We’ve been wondering when we’d start seeing COVID-19 lawsuits, and the answer is now. On Monday, the estate of a Walmart employee in Illinois who died from COVID-19 sued the company for negligence and wrongful death. The complaint alleges that Walmart failed to properly clean the store or provide employees with masks, gloves, antibacterial wipes and other protective equipment, knew that employees were exhibiting COVID-19 signs and symptoms, and did not screen new employees for COVID-19. A second employee at the same store has also died of the virus. Read the complaint here.
Shell eggs go to market. The FDA issued guidance that eases up packaging and labeling requirements during the COVID-19 pandemic for shell eggs sold directly to consumers in retail food establishments. The agency explained that it made the change because plenty of shell eggs are available to meet increased consumer demands, but properly labeled retail packaging for the eggs is not. See the guidance here.
EPA’s glyphosate approval is challenged. Glyphosate, used in the weed killer Roundup, is in the news again. This time, the controversy surrounds the EPA’s decision in January 2020 to allow glyphosate to continue being used in the interim while the agency conducts its mandatory 15-year re-approval review. Although EPA has yet to make its re-approval decision, two groups of plaintiffs have petitioned the Ninth Circuit Court of Appeals for an invalidation of the EPA’s decision allowing continued use in the interim. Plaintiffs argue that the decision violates both the Federal Insecticide, Fungicide, and Rodenticide Act and the Endangered Species Act because the EPA has not gathered enough information to prove that glyphosate is safe for humans, the environment, and endangered species. You can read the petitions here and here, and EPA’s interim decision here.
No rehearing for RFS litigation. We reported previously that the Tenth Circuit Court of Appeals held the EPA in violation of the Renewable Fuel Standard (RFS) when it granted RFS blending waivers to three small refineries. While the Trump administration did not appeal the court’s decision, two of the oil refiners requested a rehearing before the full panel of Tenth Circuit judges. This week, those requests were rejected by the Tenth Circuit, starting a 90-day period during which the refiners may petition for a hearing before the U.S. Supreme Court.
ODNR suspends hunting and fishing license sales for non-residents. The Ohio Department of Natural Resources announced this week that it is “temporarily suspending the sale of non-resident hunting and fishing licenses until further notice” to further discourage travel into the state. ODNR has no set date to lift the suspension; it will be in place as long as state COVID-19 orders dictate. Read ODNR’s press release here.
BWC gives dividends and deferrals. The Ohio Bureau of Workers’ Compensation board decided yesterday to pay dividends to employers for BWC premiums to the tune of up to $1.6 billion. Checks will go out to employers later in April, and will equal approximately 100% of the BWC premiums paid in their 2018 policy years. The agency is also allowing employers to delay unpaid premium installments due for March through May until June 1, 2020 and will not lapse coverage or assess penalties for amounts not paid due to the COVID-19 pandemic. See this FAQ for details.
As you may know, Ohio State's campuses and offices are closed. But we are all working away at home, and our virtual offices are still open for business. Starting today, April 6th, the OSU Extension Farm Office Team will open our offices online and offer weekly live office hours from 8:00-9:30 pm EST. We'll provide you with short updates on emerging topics and help answer your questions about the farm economy. Each evening will start off with a quick 10-15-minute summary of select farm management topics from our experts and then we'll open it up for questions and answers from attendees on other topics of interest. For tonight's office hours, we'll focus on the newly enacted CARES Act and how it affects agriculture.
Who's on the Farm Office Team? Our team features OSU experts ready to help you run your farm office:
- Peggy Kirk Hall -- agricultural law
- Dianne Shoemaker -- farm business analysis and dairy production
- Ben Brown -- agricultural economics
- David Marrison -- farm management
- Barry Ward -- agricultural economics and tax
Each office session is limited to 500 people and if you miss our office hours, we'll post recordings on farmoffice.osu.edu the following day. Register at https://go.osu.edu/farmofficelive. We look forward to seeing you there!
We love blogging about agricultural law, but sometimes we don’t feel the need to interpret a law that one of our colleagues has already explained perfectly. Such is the case with an article about the new Paycheck Protection Program recently enacted by Congress in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Our colleague Kristine Tidgren at Iowa State’s Center for Agricultural Law and Taxation has written an excellent explanation of the new loan program here.
A few questions about the Paycheck Protection Program that Kristine answers in detail in her blog post are:
- Who’s eligible for the loans? Any small business concern, business concern, 501(c)(3) nonprofit, veterans’ organization or tribal business concern employing 500 or fewer employees whose principal place of residence is the U.S. and eligible self-employed individuals including independent contractors may apply for a loan. Farm businesses with less than 500 employees may fit within these eligibility parameters.
- How much are the loans? The program has a maximum loan amount of the lesser of either $10 million or 250% of the average monthly payroll costs in the one year prior to the loan plus refinanced Economic Injury Disaster loans received after 1/31/20.
- What can the loans be used for? Certain payroll costs, as well as group health care benefits, salaries, commissions and similar compensation, mortgage interest, rent, utilities, and other previous debt obligations.
- What are the terms? The loans have maturity of 2 years and a maximum maturity of 10 years, and the SBA has set the interest rate at 1% (and can’t exceed 4%). Lenders have to defer both interest and principal payments for at least the first 6 months. Note the forgiveness provisions below, however.
- What about loan forgiveness? A borrower is eligible for loan forgiveness in an amount equal to the sum of certain payroll, mortgage interest, rent, and utility payments made during the 8-week period after the loan’s origination date. The loan forgiveness can’t exceed the principal amount and is subject to a number of reduction factors, which Kristine explains.
- What considerations apply to loan approval? In reviewing loan applications, a lender must consider whether the borrower was in operation on Feb. 15, 2020 and had employees for whom the borrower paid salaries and payroll taxes. Applicants must also certify that the uncertainty of current economic conditions makes the loan request necessary to support ongoing operations; funds will be used to retain workers and pay eligible expenses; the applicant does not have an application pending for another loan for the same purpose; and that the applicant has not received amounts under the program for the same purpose for the period of February 15 to December 31, 2020.
- How to apply? According to the Small Business Administration: “Businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.” Consult with your local lender as to whether it is participating in the program. Visit www.sba.gov for a list of SBA lenders.
- When to apply? Lenders may begin processing loan applications for most businesses as soon as April 3, 2020, and for independent contractors and self-employed individuals by April 10, 2020.
- Where to learn more? The Treasury Department and the Small Business Administration have posted extensive information and the application the loan program on their websites.
Watch for more resources about the CARES Act and other COVID-19 legislation here on our blog and on OSU’s Farm Office website at farmoffice.osu.edu.
Hello, readers! We hope you are all staying safe and healthy. Understandably, news related to agricultural law seems to have slowed down a little bit over the last few weeks as both the federal and state governments have focused mainly on addressing the unfolding COVID-19 outbreak. That being said, there have been a few notable ag law developments you might be interested in.
Federal government extends the tax deadline. The IRS announced on March 21 that the deadline for filing or paying 2019 federal income taxes will be extended to July 15, 2020.
Ohio Coronavirus Legislation. The Ohio General Assembly quickly passed House Bill 197 on Wednesday March 25, 2020. HB 197 originally just involved changes to tax laws, but amendments were added to address the current situation. Amendments that made it into the final bill include provisions for education—from allowing school districts to use distance learning to make up for instruction time, to waiving state testing. Other important amendments make it easier to receive unemployment, move the state tax filing deadline to July 15, extend absentee voting, allow recently graduated nurses to obtain temporary licenses, etc. Of particular note to those involved in agriculture, HB 197 extends the deadlines to renew licenses issued by state agencies and political subdivisions. If you have a state license that is set to expire, you will have 90 days after the state of emergency is lifted to renew the license. HB 197 is available here. A list of all the amendments related to COVID-19 is available here.
Proposed changes to hunting and fishing permits in Ohio. In non-COVID news, Ohio House Bill 559 was introduced on March 18. HB 559 would allow grandchildren to hunt or fish on their grandparents’ land without obtaining licenses or permits. In addition, the bill would give free hunting and fishing licenses or permits to partially disabled veterans. You can get information on the bill here.
EPA simplifies approach to pesticides and endangered species. Earlier this month, the U.S. EPA released its “revised method” for determining whether pesticides should be registered for use. Under the Endangered Species Act (ESA), federal agencies must consider whether an action (in this case, registration of a pesticide) will negatively impact federally listed endangered species. EPA is authorized to make decisions involving pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The revised method consists of a three-step process. First, EPA will consider whether use of the pesticide “may affect” or conversely, have no effect on the listed species. If no effect is found, EPA can register the pesticide. On the other hand, if EPA finds that the pesticide may affect the endangered species, it must examine whether the pesticide is “likely to adversely affect” the species. In this second step, if EPA decides that the pesticide may affect the endangered species, but is not “likely to adversely affect” the species, then the agency may register the pesticide with the blessing of the Fish and Wildlife Service (FWS) or the National Marine Fisheries Service (NMFS). Conversely, if EPA finds that the pesticide is likely to adversely affect the species, it must move on to step three, where it must work with FWS or NMFS to more thoroughly examine whether an adverse effect will “jeopardize” the species’ existence or “destroy or adversely modify its designated critical habitat.” The revised method is meant to simplify, streamline, and add clarity to EPA’s decision-making.
EPA publishes rule on cyazofamid tolerances. Continuing the EPA/pesticide theme, on March 18, EPA released the final rule for tolerances for residues of the fungicide cyazofamid in or on commodities including certain leafy greens, ginseng, and turnips.
Administration backs off RFS. In our last edition of the Ag Law Harvest, we mentioned that the Tenth Circuit Court of Appeals had handed a win to biofuels groups by deciding that EPA did not have the authority to grant three waivers to two small refineries in 2017. By granting the waivers, the EPA allowed the refineries to ignore the Renewable Fuel Standard (RFS) and not incorporate biofuels in with their oil-based fuels. The Tenth Circuit decision overturned this action. The Trump administration has long defended EPA’s action, so that’s why it’s so surprising that the administration did not appeal the court’s decision by the March 25 deadline.
Right to Farm statute protects contract hog operation. If you’re a regular reader of the blog, you may recall that many nuisance lawsuits have been filed regarding large hog operations in North Carolina. In Lewis v. Murphy Brown, LLC, plaintiff Paul Lewis, who lives near a farm where some of Murphy Brown’s hogs are raised, sued the company for nuisance and negligence, claiming that the defendant’s hogs made it impossible for him to enjoy the outdoors and caused him to suffer from several health issues. Murphy Brown moved to dismiss the complaint, arguing that the nuisance claim should be disqualified under North Carolina’s Right to Farm Act, and that the negligence claim should be barred by the statute of limitations. The U.S. District Court for the Eastern District of North Carolina made quick work of the negligence claim, agreeing with Murphy Brown that the statute of limitations had passed. North Carolina’s Right to Farm Act requires a plaintiff to show all of the following: that he is the legal possessor of the real property affected by the nuisance, that the real property is located within one-half mile of the source of the activity, and that the action is filed within one year of the establishment of the agricultural operation or within one year of the operation undergoing a fundamental change. Since the operation was established in 1995 and the suit was not brought until 2019, and no fundamental change occurred, the court determined that Lewis’s claim was barred by the Right to Farm Act. Since neither negligence or nuisance was found, the court agreed with Murphy Brown and dismissed the case.
It’s been a quiet few weeks here at the Farm Office as we adjust to life with Coronavirus-19, but it’s time to get back to the Ohio Ag Law Blog. We hope our readers are safe and healthy.
We’ve received several questions about Ohio’s Stay at Home Order and how it affects agricultural businesses. As you well know, the Order states that residents are to stay at home and may leave “only for Essential Activities, Essential Governmental Functions, or to participate in Essential Businesses and Operations.” All non-essential businesses and activities are to cease. It became effective early Tuesday morning and remains in place until the end of the day on April 6. Here are the relevant parts of the Order that answer the questions we’ve received:
What businesses are “essential”?
The Order lists (on pages 5 and 6) the “Essential Businesses and Operations” that may continue during this period. The list specifically includes many agricultural activities, such as:
12 b. Stores that sell groceries and medicine. Grocery stores, pharmacies, certified farmers' markets, farm and produce stands, supermarkets, convenience stores, and other establishments engaged in the retail sale of groceries, canned food, dry goods, frozen foods, fresh fruits and vegetables, pet supplies, fresh meats, fish, and poultry, prepared food, alcoholic and non-alcoholic beverages, any other household consumer products (such as cleaning and personal care products), and specifically includes their supply chain and administrative supp0rt operations. This includes stores that sell groceries, medicine, including medication not requiring a medical prescription, and also that sell other non-groce1y products, and products necessary to maintaining the safety, sanitation, and essential operation of residences and Essential Businesses and Operations;
c. Food, beverage, and licensed marijuana production and agriculture. Food and beverage manufacturing, production, processing, and cultivation, including farming, livestock, fishing, baking, and other production agriculture, including cultivation, marketing, production, and distribution of animals and goods for consumption; licensed medical marijuana use, medical marijuana dispensaries and licensed medical marijuana cultivation centers; and businesses that provide food, shelter, and other necessities of life for animals, including animal shelters, rescues, shelters, kennels, and adoption facilities;
h. Gas stations and businesses needed for transportation. Gas stations and auto supply, auto-repair, farm equipment, construction equipment, boat repair, and related facilities and bicycle shops and related facilities;
o. Restaurants for consumption off-premises. Restaurants and other facilities that prepare and serve food, but only for consumption off-premises, through such means as in-house delive1y, third-party delivery, drive-through, curbside pick-up, and carry-out…. This Order is consistent with and does not amend or supersede prior Orders regarding the closure of restaurants.
The list also includes many businesses that service and supply agricultural businesses, such as hardware and supply stores, shipping and delivery services, and financial and professional services.
Can employees travel to and for an “essential business”?
Yes. The Order allows (on page 2) residents to leave their homes to perform work at Essential Businesses or Operations. The Order also allows (on page 7) for “Essential Travel,” which includes “any travel related to the provision of or access to” Essential Businesses and Operations.
Do employeess need documentation about why they are out traveling?
No. Also note that in the Frequently Asked Questions about the Order, the State responded as follows to the question, "I work in an essential service. How will the police know I'm allowed to be outside my house?""
"Law enforcement officials will not stop residents who are on their way to or from work or who are out for necessities like going to the pharmacy or getting groceries, or just taking a walk. People gathering in any size group may be asked to physically distance themselves or go home. Ohioans should abstain from all nonessential activities. Adhering to the order will save lives and it is the responsibility of every Ohioan to do their part. We are in this together. "
What precautions should I take for employees and others at my “essential business”?
First, the Order lays out (on page 8) several required measures that Essential Businesses must follow:
15 a. Required measures. Essential Businesses and Operations and businesses engaged in Minimum Basic Operations must take proactive measures to ensure compliance with Social Distancing Requirements, including where possible:
Designate six-foot distances. Designating with signage, tape, or by other means six-foot spacing for employees and customers in line to maintain appropriate distance;
Hand sanitizer and sanitizing products. Having hand sanitizer and sanitizing products readily available for employees and customers;
Separate operating hours for vulnerable populations. Implementing separate operating hours for elderly and vulnerable customers; and
Online and remote access. Posting online whether a facility is open and how best to reach the facility and continue services by phone or remotely.
Second, the Order also includes (on pages 8 and 9) a COVID-19 Information and Checklist for Businesses/Employers that requires businesses and employers to take the following actions. We encourage employers to read these provisions carefully:
- Allow as many employees as possible to work from home by implementing policies in areas such as teleworking and video conferencing.
- Actively encourage sick employees to stay home until they are free of fever (without the use of medication) for at least 72 hours (three full days) AND symptoms have improved for at least 72 hours AND at least seven days have passed since symptoms first began. Do not require a healthcare provider's note to validate the illness or return to work of employees sick with acute respiratory illness; healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
- Ensure that your sick leave policies are up to date, flexible, and non-punitive to allow sick employees to stay home to care for themselves, children, or other family members. Consider encouraging employees to do a self-assessment each day to check if they have any COVID-19 symptoms (fever, cough, or shortness of breath).
- Separate employees who appear to have acute respiratory illness symptoms from other employees and send them home immediately. Restrict their access to the business until they have recovere
- Reinforce key messages stay home when sick, use cough and sneeze etiquette, and practice hand hygiene to all employees, and place posters in areas where they are most likely to be seen. Provide protection supplies such as soap and water, hand sanitizer, tissues, and no-touch disposal receptacles for use by employees.
- Frequently perform enhanced environmental cleaning of commonly touched surfaces, such as workstations, countertops, railings, door handles, and doorknobs. Use the cleaning agents that are usually used in these areas and follow the directions on the label. Provide disposable wipes so that commonly used surfaces can be wiped down by employees before each use.
- Be prepared to change business practices if needed to maintain critical operations (e., identify alternative suppliers, prioritize customers, or temporarily suspend some of your operations).
What is “social distancing,” exactly?
There’s been a lot of talk about social distancing. The Order requires residents to practice social distancing when outside of their residences and defines (on page 15), exactly what it means:
15. Social Distancing Requirements. For purposes of this Order, Social Distancing Requirements includes maintaining at least six-foot social distancing from other individuals, washing hands with soap and water for at least twenty seconds as frequently as possible or using hand sanitizer, covering coughs or sneezes (into the sleeve or elbow, not hands), regularly cleaning high-touch surfaces, and not shaking hands.
Who’s enforcing the Order?
The Order also addresses enforcement (on page 8), stating that:
17. Enforcement. This Order may be enforced by State and local law enforcement to the extent set forth in Ohio law. To the extent any public official enforcing this Order has questions regarding what services are prohibited under this Order, the Director of Health hereby delegates to local health departments the authority to answer questions in writing and consistent with this Order.
Note, however, that Governor DeWine (on Twitter) has encouraged businesses not to overwhelm law enforcement or local health departments with questions and advice on what’s “essential,” but instead to “use your own good judgment of that order to make your own determination if you are essential.”
Are there recordkeeping requirements?
No. But we attorneys always advise agricultural operators to keep good records. Governor DeWine agrees, as he has stated (on Twitter) that businesses should “create a document about why you believe you are an essential business and how you are providing a safe workplace.” If there is a question in the future about what you did or did not do during this important period, be sure that you have documentation to back it up. As always, documentation includes not only written information but also photographs and videos.
We encourage readers to carefully review the Stay at Home Order, which is available here on Ohio’s coronavirus.ohio.gov website. OSU also has a site with COVID-19 resources, available here on https://u.osu.edu/2019farmassistance/covid-19/
The Center for Food Safety (CFC), along with other groups and a number of organic farms, filed a lawsuit early this month claiming that USDA violated the Organic Foods Production Act (OFPA) when it allowed hydroponically-grown crops to bear the “Certified Organic” label. In January 2019, CFC filed a legal petition asking USDA to create regulations which would ban hydroponic operations from using the organic label. USDA denied the petition, and CFC’s current lawsuit also alleges that USDA’s denial violated the Administrative Procedure Act (APA). CFC asks the U.S. District Court for the Northern District of California to vacate USDA’s denial of their petition and to bar the agency from certifying any hydroponic operations as organic. The complaint can be found here.
What do “hydroponic” and “organic” mean anyway?
Many of you are probably familiar with hydroponic and organic growing, but since the terms are very important in this lawsuit, it’s worth reviewing them before we continue.
The USDA, on its National Agricultural Library website, defines “hydroponics” as “growing plants in a nutrient solution root medium.” In other words, hydroponic plants can be grown in mediums such as sand, gravel, and water with additional nutrients. Simply put, hydroponic plants are not grown in the soil.
OFPA (available here) says in order to sell or label an agricultural product as “organically produced,” the product must: 1) have been produced and handled without the use of synthetic chemicals, except as otherwise provided; (2) except as otherwise provided in this chapter and excluding livestock, not be produced on land to which any prohibited substances, including synthetic chemicals, have been applied during the 3 years immediately preceding the harvest of the agricultural products; and (3) be produced and handled in compliance with an organic plan agreed to by the producer and handler of such product and the certifying agent. Thus, for a plant to be “organic,” it must meet these criteria.
CFC’s argument under OFPA
In their lawsuit, CFC is principally concerned with the third part of the organic requirements listed above—that in order to be labeled as organic, an agricultural product must be “produced and handled in compliance with an organic plan.” Organic plans, in turn, must also meet a number of requirements. One of those requirements is that the “organic plan shall contain provisions designed to foster soil fertility, primarily through the management of the organic content of the soil through proper tillage, crop rotation, and manuring.” At its most basic, CFC’s argument is that fostering soil fertility is an integral and required part of the OFPA, and therefore, plants not grown in actual soil cannot meet all the requirements necessary for organic certification. In other words, since hydroponics by definition are not grown in soil, hydroponic farmers can’t foster soil fertility. As a result, CFC maintains that since fostering soil fertility is required in order for plants to be labeled “organic,” hydroponically-grown plants can’t be organic. By allowing hydroponics to be labeled organic, CFC asserts that USDA is in violation of the OFPA.
CFC’s argument under the APA
The plaintiffs also contend that USDA’s denial of their 2019 petition violated the APA. The APA (you can find the relevant chapter here) is the law that federal agencies must follow when writing and adopting regulations. Under the APA, courts have the power to overturn agency actions if they are arbitrary, capricious, an abuse of discretion, or are otherwise unlawful. Additionally, courts can overturn agency actions when they go beyond the authority given to the agency by Congress. Here, CFC argues that USDA’s denial of their petition was arbitrary and capricious and not in accordance with the law. Basically, they are arguing that USDA violated the APA by ignoring the soil fertility language that Congress included in OFPA.
What’s USDA’s take?
USDA’s denial of CFC’s petition gives us a little insight into what the agency’s response to the lawsuit might include. The agency claims that the National Organic Program (NOP) has allowed hydroponic operations to be certified organic in the past. Furthermore, USDA counters that the statutory and regulatory provisions that refer to “soil” do not require every organic plant to be grown in soil. Instead, they say the provisions are simply “applicable to production systems that do use soil.”
The court will certainly have a lot to sift through in this lawsuit. USDA still has to respond to the complaint, and hydroponic operations might throw their support behind the agency’s cause. We’ll be keeping an eye on what happens and will make sure to keep you updated!
In Ohio and around the country, farmers are gearing up for a new planting season. Spring is (almost) here! Before we leave winter totally behind, we wanted to keep you up to date on some notable ag law news from the past few months.
Here’s a look at what’s going on in ag law across the country…
New law signed to ramp up ag protections at U.S. ports of entry. Last summer, a bill was introduced in the United States Senate by a bipartisan group of senators. The purpose of the bill was to give more resources to Customs and Border Control (CBP) to inspect food and other agricultural goods coming across the U.S. border. On March 3, 2020, the President signed the bill into law. The new law authorizes CBP to hire and train more agricultural specialists, technicians, and canine teams for inspections at ports of entry. The additional hires are meant to help efforts to prevent foreign animal diseases like African swine fever from entering the United States. You can read the law here.
The Renewable Fuel Standard gets a win. We reported on Renewable Fuel Standard (RFS) issues last fall, and it seems as though the battles between biofuel producers and oil refineries have spilled over into 2020. For a refresher, the RFS program “requires a certain volume of renewable fuel to replace the quantity of petroleum-based transportation fuel” and other fuels. Renewable fuels include biofuels made from crops like corn, soybeans, and sugarcane. In recent years, the demand for biofuels has dropped as the Trump administration waived required volumes for certain oil refiners. As a result, biofuels groups filed a lawsuit, asserting that EPA did not have the power to grant some of the waivers it gave to small oil refiners. On January 24, 2020, the U.S. Court of Appeals for the Tenth Circuit agreed with the biofuels groups. You can find the 99-page opinion here. If you’re not up for that bit of light reading, here’s the SparkNotes version: the court determined that EPA did not have the authority to grant three waivers to two small refineries in 2017. The court found that EPA “exceeded its statutory authority” because it extended exemptions that had never been given in the first place. To put it another way, the court asked how EPA could “extend” a waiver when the waiver had not been given in previous years. The Trump Administration is currently contemplating whether or not to appeal the decision.
Virginia General Assembly defines “milk.” To paraphrase Shakespeare, does “milk by another name taste as sweet?” Joining the company of a number of other states that have defined “milk” and “meat,” the Virginia General Assembly passed a bill on March 4, 2020 that defines milk as “the lacteal secretion, practically free of colostrum, obtained by the complete milking of a healthy hooved mammal.” The bill would make it illegal to label products as “milk” in Virginia unless they met the definition above. Essentially, products like almond milk, oat milk, soy milk, coconut milk, etc. would be misbranded if the labels represent the products as milk. Governor Ralph Northam has not yet signed or vetoed the bill. If he signs the bill, it would not become effective until six months after 11 of 14 southern states enact similar laws. The 11 states would also have to enact their laws before or on October 1, 2029 for Virginia’s law to take effect. The states are: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and West Virginia. North Carolina has already passed a similar law.
And now, for ag law in our neck of the woods.
Purple paint bill reintroduced in Ohio. You may recall that the Ohio General Assembly has been toying with the idea of a purple paint law for the past several years. On March 4, 2020, Senator Bill Coley (R-Liberty Township) once again introduced a purple paint bill. What exactly does “purple paint” mean? If passed, the bill would allow landowners to put purple paint on trees and/or fence posts. The marks would have to be vertical lines at least eight inches long, between three and five feet from the base of the tree or post, readily visible, and placed at intervals of at most 25 yards. If the bill passed, such marks would be sufficient to inform those recklessly trespassing on private property that they are not authorized to be there. People who recklessly trespass on land with purple paint marks would be guilty of a fourth degree criminal misdemeanor. You can read the bill here.
Bill giving tax credits to beginning farmers considered. Senate Bill 159, titled “Grant tax credits to assist beginning farmers” had a hearing in the Senate Ways & Means Committee on March 3, 2020. The bill, introduced last year, seeks to provide tax incentives to beginning farmers who participate in an approved financial management program, as well as to businesses that sell or rent agricultural land, livestock, facilities, or equipment to beginning farmers. A nearly identical bill is being considered in the House, HB 183. Back in February, Governor Mike DeWine indicated he would sign such a bill if it passed the General Assembly. SB 159 is available here, and HB 183 is available here.