Source: http://washburnlaw.edu/practicalexperience/agriculturallaw/waltr/annotations/regulatorylaw/
Timestamp: 2017-12-16 07:17:35
Document Index: 151492652

Matched Legal Cases: ['§ 213', '§ 70', '§70', '§ 22', '§ 1983', '§1983', '§ 301', '§483', '§ 213', '§1508', '§76', '§65', '§65', '§ 484', '§ 40101', '§103', '§ 192', '§202', 'art 1400', '§1400', '§6998', '§7756', '§ 22', 'art 107', 'art 137', '§552', 'art 107', '§42']

Regulatory Law Annotations (Agricultural Law and Tax)
This page contains summaries of significant recent court opinions involving federal and state regulation of agricultural businesses and land use activities.
EPA Announcement on Dicamba Use. On October 13, 2017, the U.S. Environmental Protection Agency (EPA) announced amendments to the Federal Insecticide, Fungicide, Rodenticide Act (FIFRA) that will modify the label to Monsanto’s XtendiMax, BASF’s Engenia and DowDupont’s FeXapan products (more commonly known as “Dicamba) and make Dicamba a restricted use pesticide beginning in 2018. Accordingly, Dicamba will become subject to record-keeping requirements and additional spray drift mitigation measures. As a restricted use pesticide, Dicamba’s availability and use will be restricted to certified retailers and applicators. In addition, state pesticide regulators and agencies will be required to train all applicators before they can use the dicamba herbicides, and annual certification training for applicators will be required. The EPA notes that application of Dicamba will be limited to sunrise to sunset. This limitation on application will essentially ban nighttime spraying, when temperature inversions are most likely to occur. Also, applications will be limited to instances where wind speeds are between three and 10 (down from 15) miles per hour. Applicators of Dicamba will be required to keep records showing they have surveyed the surrounding area for susceptible and sensitive crops, in accordance with guidance that will appear on the Dicamba label. One of those recordkeeping requirements will require applicators to maintain “receipts of purchase” for Dicamba products for two years. The modified label, which expires in December of 2018, contains tank cleanout language designed to prevent cross contamination. Monsanto has claimed that the new formulation of its version of Dicamba is designed to be significantly less volatile than prior formulations. However, the product will still volatize and remain in the air for many hours (and, possibly, days) following application. EPA Announcement of Oct. 13, 2017 concerning use of Dicamba products.
Overtime Wage Payment Case Heads to Trial on Issue of Whether Employment Was “Secondary Agriculture” or “Manufacturing.” The defendant operates a hog farm and a feed mill. The plaintiffs were employed at the feed mill between 2013 and 2016, during which time they often worked more than forty hours per week and were never paid overtime. From the time of the feed mill’s inception until summer 2016 the defendant used its own employees to produce animal feed at the feed mill while simultaneously contracting with Bi-County Pork, Inc. to purchase feed produced by Bi-County’s own staff at its independent neighboring facilities using inputs provided solely by the defendant. Bi-County only produced feed for the defendant and the defendant purchased all the feed Bi-County produced. All of the defendant’s feed is either fed to animals that the defendant owns or raises or is sold to third-parties. Before the plaintiffs began working for the defendant at the feed mill, at least one other feed mill employee complained about not receiving overtime pay. The complaint prompted an investigation by the United States Department of Labor (DOL) into the applicability of the FLSA’s overtime exemption for secondary agricultural labor at the feed mill. The DOL concluded that the feed mill’s operations warranted a secondary agricultural designation exempting feed mill employees from overtime pay because the primary use of the feed produced there was feeding the defendant’s hogs. The DOL also concluded that the defendant used 55 percent of the feed it produced itself and sold the remaining 45 percent. The DOL also pointed out that although the feed mill qualified as secondary agricultural at that time and date, the success with outside suppliers and clients might change that designation in the future. The plaintiffs both sued alleging that the defendant’s failure to pay them overtime constituted violations of state (IN) minimum wage and wage payment statutes as well as the Fair Labor Standards Act (FLSA). The cases were subsequently removed to federal court based upon original jurisdiction arising from their claims under the federal FLSA. Through discovery actions, the defendant reported that about 75 percent of their total feed output was sold to third parties with 75-80 percent of that total feed output being produced by Bi-County. Under 29 U.S.C. § 213(b)(12), the overtime provisions of the FLSA do not apply “to any employee employed in agriculture.” The FLSA distinctly identifies two branches of agriculture: primary agriculture and secondary agriculture. The parties agreed that the work that the plaintiffs performed at the feed mill only qualified for the agricultural exemption from overtime pay if it constituted secondary agriculture. The federal court concluded that in order to defer to the DOL’s report they must first assess whether the totality of the circumstances especially with respect to the portion of the defendant’s income streams, during the time of the plaintiffs’ employment, changes significantly enough from the time covered by the DOL’s investigation to warrant reclassifying work at the feed mill from secondary agriculture to manufacturing. The court held that because the defendant failed to produce data specifying the total feed production and sales from the feed mill and Bi-County separately during the relevant period of the plaintiffs’ employment, a genuine issue of fact existed as to what proportion of the feed mill’s feed output was sold to third parties. As a result, the court concluded that neither party was entitled to summary judgement as a matter of law. Kidd v. Wallace Pork Sys., No. 3:16-CV-210-MGG, 2017 U.S. Dist. LEXIS 163174 (N.D. Ind. Oct. 2, 2017).
USDA Must Pay Attorney Fees For Improperly Withholding SNAP Information. In 2011, the plaintiff filed a Freedom of Information Act (FOIA) request for information from the USDA concerning store redemptions involving the Supplemental Nutrition Assistance Program (e.g., Food Stamps). The USDA refused to divulge the requested information claiming an exemption from FOIA. The trial court agreed, but the appellate court reversed and remanded. On remand, the USDA claimed two different exemptions and moved for summary judgment. The trial court denied the motion and held a bench trial, ultimately entering judgment in the plaintiff’s favor. The plaintiff then motioned to recover attorney fees. The court noted that the release of the requested information served a public benefit in improving public policy regarding city planning, distribution of government resources and government transparency. The court also noted that while the release of the information provided a commercial benefit to the plaintiff, the plaintiff was seeking to further its private interest but to obtain information to share with the public. The court also noted that the plaintiff’s interest in the records was more akin to “disinterested scholarly purposes. While the USDA has a reasonable basis for withholding the requested information, the other factors outweighed the USDA’s interests. Accordingly, the court awarded reasonable attorney fees to the plaintiff in the amount of $60,000 plus $8,422.67 of costs. Argus Leader Media v. United States Department of Agriculture. No. 4:11-CV-04121-KES, 2017 U.S. Dist. LEXIS 122126 (D. S.D. Aug. 3, 2017). In a later action, the court granted an additional $2,900 in attorney’s fees as reasonable compensation for the time spent preparing the motion and brief to recover attorney fees. The court noted that if the plaintiff is ultimately successful on appeal, the court’s judgment for attorney fees and costs will also include the “fees on fees” amount. Argus Leader Media v. United States Department of Agriculture, No. 4:11-CV-04121-KES, 2017 U.S. Dist. LEXIS 172937 (D. S.D. Oct. 19, 2017).
State Can Regulate Captive Deer To Control CWD. The defendant, Missouri Conservation Commission, amended regulations pertaining to the importation and possession of deer, which took effect in January of 2015. Among the wildlife regulated are elk and white-tailed deer, which are native to Missouri and are in the family cervidae commonly known as cervids. The plaintiff owns hunting preserves and white-tail breeding operations in MO. The 2015 regulatory amendments were made in response to Chronic Wasting Disease (CWD). CWD is a fatal neurodegenerative disease infecting cervids that is spread directly through animal-to-animal contact as well as indirectly through environmental contamination. There is no method for testing cervids for CWD while they are still alive. The approved test must be performed post-mortem. In addition, CWD has an incubation period of eighteen months, meaning a cervid can be CWD-positive for a period of time without showing any signs of the disease. The plaintiffs challenged the regulations and sought to enjoin their enforcement. The trial court declared regulations are invalid pursuant and prohibited the defendant from directly or indirectly relying on or enforcing them. The defendant appealed. The appellate court determined that the defendant’s authority to enact the regulations was derived from the Missouri Constitution, Article IV, Section 40(a), which provides: “The control, management, restoration, conservation and regulation of the bird, fish, game, forestry and all wildlife resources of the state, . . . shall be vested in a conservation commission. . .”. The appellate court interpreted this to mean that “game” modifies “resources of the state”. Thus, in order for the defendant to have authority to regulate the plaintiff’s captive cervids, they must qualify as “game resources of the state.” The appellate court noted that Webster’s New International Dictionary defines resources as “available means as of a country or business” and gives the example of “America’s rich natural resources.” The appellate court determined that cervids, whether captive or free-ranging are resources of the state because they are available means of the state. They are considered available means of the state because they are products of the state. Thus, the court determined that cervids whether captive or free-ranging are among Missouri’s natural resources. As such the plaintiff’s captive cervids are “game resources of the state,” and are subject to regulation. The appellate court also noted that regardless of whether the defendant has the authority to regulate captive cervids, it undoubtedly has the authority to regulate free-ranging cervids. Given the highly communicable nature of CWD, the defendant’s efforts to restore and conserve free-ranging cervids would be threatened without the authority to regulate all cervids capable of infecting free-ranging cervids with this fatal disease. As a result, the appellate court reversed the trial court and found the amended regulations to be valid and enforceable. However, because of the general interest and importance of the questions involved, the appellate court also transferred the case to the Missouri Supreme Court under Rule 83.02. Hill v. Mo. Dep’ of Conservation, No. ED105042, 2017 Mo. App. LEXIS 1011 (Mo. Ct. App. Oct. 10, 2017).
Land Subject To Permanent Conservation Easement Not Classified As Agricultural. The plaintiffs own land that was previously farmed, but is now subject to permanent easements under the Wetland Reserve Program (WRP). The easements prohibit the plaintiffs from any further “haying, mowing or seed harvesting the land for any reason…planting or harvesting any crop; and grazing or allowing livestock on the easement area.” Land that is classified as agricultural under Wis. Stat. § 70.32(2)(a) is assessed for tax purposes according to the income that could be generated from its rental for agricultural use. The definition of agricultural use for purposes of §70.32 excludes the plaintiffs’ land that is subject to permanent wetland conservation easements. As a result, that land is not classified as agricultural and is not assessed according to the income that could be generated from the land’s rental for agricultural use. The plaintiffs brought suit against the Department of Revenue challenging the validity of Wis. Admin. Code § Tax 18.05(1)(d) which provides the definition of agricultural use. They also allege that the defendant’s exclusion of their properties from the definition of agricultural use violates their state and federal equal protection rights and the Uniformity Clause of the Wisconsin Constitution. The circuit court granted summary judgment in favor of the defendant, and dismissed the actions. The plaintiffs appealed. The court determined that the proper standard of review was rational basis scrutiny. When applying the rational basis test, the court will uphold the law if any reasonably conceivable state of facts could provide a rational basis for the classification. The court pointed out that land subject to a permanent easement restricting the land’s agricultural use may not ever again be used for crop or animal production. However, land that is subject only to a temporary easement restricting the land’s use for crop or animal production may be returned to agricultural use in the future after the easement or program is completed. Thus, the court held it was reasonable for the legislature to give preferential tax treatment to the land that can be put to agricultural use in the future. In addition, the court pointed out that both categories effectively receive preferential tax treatment. Land in a permanent easement is not as valuable as land without such restrictions and thus is taxed less than unrestricted land. On the other hand, agricultural land also receives preferential treatment. To the extent agricultural land under temporary restrictions is taxed at a lower level than similar land in a permanent conservation easement, the court held that difference reasonably reflects the legislature’s preference for reserving farmland in the long run. In addition, the Uniformity Clause requires that the method and mode of taxing real property be applied uniformly to all property within a tax district. The last sentence in the Uniformity Clause states that “Taxation of agricultural land and undeveloped land, both as defined by law, need not be uniform with the taxation of each other nor with the taxation of other real property.” The court held that this made it clear that agricultural land need not be uniformly taxed as compared to other types of property, but it must be taxed uniformly as compared to other agricultural land. The plaintiffs argued that lands enrolled in long-term, but temporary, conservation easements and those lands such as theirs enrolled in permanent easements are currently identical in every meaningful way and it is therefore not reasonable to treat their property differently from property subject to non-permanent conservation easements. However, the court held that his argument centers on the failure of their property to be classified as agricultural and they are really just restating their arguments made in support of their equal protection challenge. As a result, the court affirmed the circuit court’s grant of summary judgment for the defendant. Multerer v. Wisconsin Department of Revenue, No. 2016AP1076, 2017 Wisc. App. LEXIS 763 (Wisc. Ct. App. Sept. 28, 2017).
Statutory CSP Payment Rates Not Part of Actual CSP Contract. The plaintiff participates in the Conservation Security Program (CSP) administered by the USDA’s Natural Resources Conservation Service (NRCS). The 2002 Farm Bill created the CSP. The statute provides that “the Secretary of Agriculture shall establish, and for each of fiscal years 2003 through 2007, carry out a conservation security program to assist producers of agricultural operations in promoting. . . conservation and improvement of the quality of soil, water, air, energy, plant and animal life, and any other conservation purposes. . .” The plaintiff entered into CSP contracts in 2005 with each contract being a base term for five years. As required by law the Secretary was to make payments upon the contracts “as soon as practicable” after October 1 of each fiscal year. The statute also provided a mechanism for calculating the payments. In the 2008 Farm Bill however, Congress amended the statute to provide that “a conservation security contract may not be. . . renewed under this subchapter after September 30, 2008.” The plaintiff brought this compliant on behalf of themselves and all others similarly situated in February 2017. The plaintiff claimed that the Government breached their CSP contracts by using payment rates contrary to the minimum rates the CSP statue required, effectively underpaying them in 2007 and 2008. In addition, the plaintiff alleged that the 2008 Farm Bill’s prohibition on the renewals of CSP contracts after September 30, 2008 constituted a repudiation and breach of all CSP contracts. The plaintiff moved for summary judgement. In its response, the Government moved to dismiss the case for failure to state a claim upon which relief can be granted. The court determined that the crux of the plaintiff’s argument was that the payments made according to their contracts, outlined in the regulations, were not based on their strict reading of the CSP statute, and that this misreading constituted a breach of contract. The court also pointed out however that the plaintiffs did not point to a specific term of the contract that was breached. The plaintiff argued that the court must read the CSP statute into the contract. However, the court held that while the contracts expressly incorporated the regulations, they did not incorporate the statute. Thus, the plaintiff did not have a contractual right to anything provided in the statutes, either the method of calculating payments, or the renewal option. Therefore, because the plaintiff failed to allege a contractual term entitling them to relief, its motion for summary judgment was denied and the Government’s motion to dismiss was granted. James M. Fogg Farms, Inc. v. United States, No 17-188C, 2017 U.S. Claims LEXIS 1195 (Fed. Cl. Sept. 27, 2017).
Illegal Use of Biotech Seeds Costs Farmer Approximately Six Million Dollars. The plaintiff sued the defendant for the alleged improper conversion of the plaintiff’s seeds, interference with contractual relations, and unjust enrichment. The court entered default judgment against the defendant and temporarily enjoined the defendant from making, using, selling, transferring, offering to sell or transfer, or handling any soybean or other seed containing plaintiff’s patented biotechnology. The court determined that because seeds can proliferate exponentially, infringement could cause widespread proliferation of plaintiffs’ technology in a way that is almost impossible to monitor or redress and the potential for such a circumstance in this case satisfies the irreparable injury requirement for a permanent injunction. In addition, the court found that the nature of seed reproduction suggested that multiple lawsuits could be necessary each time the seed is wrongfully replanted and resold. Furthermore, given the ongoing nature of the defendant’s infringement in this case by allowing the plaintiff’s seeds to be planted and stored on his land, the defendant was likely to continue to infringe on the plaintiffs’ property. Thus, the court determined that money damages would be inadequate to make the plaintiff whole. The court also determined that the injunction would not force the defendant to abandon farming altogether because there are over fifty varieties of soybean and corn seeds available regionally that did not contain the plaintiff’s biotechnology. In addition, the defendant testified that he had been engaging in custom-work farming since the court issued its temporary injunction. The court found that the plaintiff on the other hand would be prevented from fully protecting its intellectual property without an injunction. In addition, the cost of research and development required to produce the infringed upon biotechnology, and the cost and difficulty of protecting intellectual technology further weighed in the plaintiff’s favor. Consequently, the court determined that the balance of the hardships weighed in favor of granting the permanent injunction. Finally, the court determined that no public interest would be disserved by the permanent injunction, which would actually support the public interest in enforcing lawful patents and protecting law-abiding farmers. As a result, the plaintiff’s request for a permanent injunction was granted. The court awarded compensatory damages in the amount of $1,933,968.40. In addition, because the defendant both sold and replanted the seed when he knew of the patent protection and that selling and replanting was prohibited, the court determined that enhancement of three times the total compensatory damages amount, as well as prejudgment interest, and attorney’s fees and costs were warranted. As a result, in addition to the permanent injunction the plaintiff was awarded compensatory damages in the amount of $1,933,968.40, an enhancement of damages totaling $5,801,905.20, prejudgment interest at a rate of 9 percent and reasonable attorney’s fees and costs. Monsanto Prod. Supply LLC v. Rosentreter, No. 3:16-cv-03038, 2017 U.S. Dist. LEXIS 158532 (C. D. Ill. Sept. 27, 2017).
False Advertising Claim Not Preempted By Federal Food, Drug & Cosmetic Act. The plaintiffs purchased Canada Dry Ginger Ale within the last five years. They allege to have seen and relied upon the wording on the cans of Canada Dry that stated it was “Made from Real Ginger.” In addition, they claim that they saw commercials over the past five years for Canada Dry Ginger Ale, which depicted “Jack’s Ginger Farm,” in which a worker is harvesting ginger, but when he pulls up one of the plants by its stalk, he finds a bottle of Canada Dry Ginger Ale where the ginger root would normally be. The voice-over narrates, “Find your way to relaxation with the crisp soothing taste of real ginger and bubbles. Canada Dry. The root of relaxation.” The plaintiffs allege that this commercial reinforced their belief that Canada Dry contained real ginger. The plaintiffs filed a putative class action in state court against Dr. Pepper, the defendant in this case and the maker of Canada Dry Ginger Ale, which was later removed to federal court. The plaintiffs’ complaint contained only state law claims for false advertising; common law fraud, deceit and or misrepresentation; and unlawful, unfair and fraudulent trade practices. The defendant moved to dismiss the complaint on the ground that the court lacked personal jurisdiction over it. However, the court found that it had personal jurisdiction over the defendant as to all the claims against it because the class was a nationwide class. The defendant also moved to dismiss the complaint on the ground that the plaintiffs had not satisfied the requirements for pleading fraud under Federal Rule of Civil Procedure 9(b) which provides that, “in alleging fraud or mistake a party must state with particularity the circumstances constitution fraud or mistake.” “Averments of fraud must be accompanied by the who, what, when, where and how of the misconduct charged.” The court determined that the ‘who’ is the defendant, the ‘what’ is the four commercials featuring “Jack’s Ginger Farm,” the ‘when’ is over the last five years, the ‘where’ is throughout the United States, and the ‘how’ is that the statements and representations made in the commercials suggested that Canada Dry Ginger Ale contained ginger root. As a result, the court held that the plaintiffs’ fraud and fraud-related claims based on the Canada Dry commercials survived the 9(b) motion. The plaintiffs also argued against the motion to dismiss their fraud claims by asserting they pled a longstanding advertising campaign, which means they would not be required to plead that they had actually relied on the defendant’s commercials. The court determined that the fact that: 1) the plaintiff saw the commercials, which had been airing at different times over the five-year period; 2) the complaint attached the URLs linking to the commercial each of which contains cert key commonalities (Jack’s Ginger Farm); and 3) the plaintiffs relied on the commercials by purchasing one case of Canada Dry each year, indicated sufficient reliance on the commercials. Finally, the defendant moved to dismiss all of the claims in the complaint as preempted because the plaintiffs sought to add additional food labeling requirements in violation of the Federal Food, Drug and Cosmetic Act (FDCA). However, the court pointed out that the plaintiffs did not seek to change the labeling from “natural” to “artificial” as the defendant suggested. Instead the plaintiffs sought to enjoin the defendant from printing the “Made From Real Ginger” statement on cans of Canada Dry. The court held that because the plaintiffs’ claims appeared to be based on ingredients rather than flavor, the court did not find that their claims were preempted based on the arguments in the defendant’s motion. Consequently, the court denied the defendant’s motion to dismiss for lack of personal jurisdiction and denied the defendant’s motion to dismiss under Rule 12(b)(6). Fitzhenry-Russell v. Dr. Pepper Snapple Grp., No. 17-cv-00564 NC, 2017 U.S. Dist. LEXIS 155654 (N.D. Cal. Sept. 22, 2017).
Condemnation Proceedings Brought By Pipeline Company Not Enjoined. The plaintiff owns a ranch through which the defendant plans to build an intrastate natural gas pipeline in accordance with state (TX) law which allows a natural gas utility to condemn land for a “public use.” However, for the defendant to do so, TX law requires the defendant to first attempt to negotiate with the plaintiff. An attempt was made but failed. Consequently, the defendant began condemnation proceedings. During those proceedings, the plaintiff sued for relief in federal court on grounds of a Due Process violation under the Anti-Injunction Act (AIA). Specifically, the plaintiff claimed that that TX law violated the Due Process Clause because it broadly delegated state power to a private party and failed to provide for a pre-deprivation hearing. The trial court ruled against the plaintiff on the basis that federal courts cannot enjoin ongoing state court proceedings. The local county commissioners then issued their valuation of $645,000 for cost of the defendant’s taking of a portion of the plaintiff’s land for the pipeline. The defendant completed construction of the pipeline. On appeal, the appellate court determined that the trial court decision was not dispositive of the matter and the fact that construction had been completed did not moot the plaintiff’s request for injunctive relief. The appellate court noted that could order the defendant to return the plaintiff’s land to it pre-condemnation state based on Porter v. Lee, 328 U.S. 246 (1946). However, on the merits, the appellate court held that the plaintiff could not meet its burden for the issuance of an injunction. The appellate court note that TX eminent domain laws had been on the books many years and had withstood legal challenges, including the type of claim that the plaintiff brought. The appellate court also determined that the “private nondelegation doctrine” did not apply because the doctrine does not allow the federal courts to dictate how state governments allocate their powers. Boerschig v. Trans-Pecos Pipeline, L.L.C., No. 16-50931, 2017 U.S. App. LEXIS 19179 (5th Cir. Oct. 3, 2017).
Building Of Box Culvert Constitutes Fee-Simple Governmental Taking. The defendant planned to condemn a portion of the plaintiff’s property for the creation of a permanent easement so that a large box culvert and drainage system could be constructed. The project would ultimately change the plaintiff’s boundary along the entire western edge and half of the northern edge. The Narrative Description of Acquisition estimated that the after-taking utility of the permanent easement would be five percent. In addition, no benefit to the property from the easement was listed. The plaintiff desired to have the property taken in fee simple but the defendant insisted that it could only take a permanent easement per state and federal guidelines. The plaintiff argued that taking an easement would leave the plaintiff with possible liability for injury or accidents on or because of the culvert and drainage system. The defendant filed a trial court petition for condemnation seeking to take temporary construction and permanent drainage easements on the plaintiff’s property. The appointed commissioners found that the requested permanent easement would cause a $1,287 decrease in the fair market value of the property and that a fair rental value for the construction was $8,000. The plaintiff filed an answer to the petition specifically contesting the defendant’s right to take the property and arguing that the defendant was acting in bad faith or abusing its discretion by seeking to take a permanent easement rather than a fee simple interest. At the close of an evidentiary hearing the trial court ruled in the defendant’s favor. The plaintiff appealed, contending that the defendant’s planned act of taking all of the usefulness but leaving the liability and other burdens on his property through a permanent easement rather than fee simple was arbitrary and in excess of the defendant’s condemnation authority. The appellate court determined that the interest that the defendant proposed to take was neither in proportion to the 95 percent utility it would take from the property nor consistent with the pass-through function of an easement. In addition, the appellate court pointed out that the property will not be used as merely a pass through to allow the defendant to provide maintenance because the structures will be erected on the property and will be owned by the defendant. For these reasons the court determined that it was clear that the defendant is actually taking the plaintiff’s property in fee simple. Accordingly, the taking of less than a fee simple interest in the property was arbitrary and in excess of the defendant’s authority under the Eminent Domain Act. The trial court’s judgment was reversed and the case remanded for further proceedings consistent with the appellate court’s decision. Moore v. Lexington-Fayette Urban Cty. Gov’t., No. 2016-CA-000187-MR, 2017 Ky. App. LEXIS 515 (Ky. Ct. App. Sept. 15, 2017).
Wind Energy Company Began “Wind Farm” Construction Without First Obtaining a Lease. In 2015, a federal district court decision allowed the defendant to conduct excavation work necessary to build 84 wind turbines on 8,400 acres in western Osage County in northeastern Oklahoma without first obtaining a mining permit from the Bureau of Indian Affairs (BIA) or approval from the Osage Minerals Council (OMC). The Osage Nation, acting through the OMC owns the beneficial interest in the mineral estate on the property at issue. The defendant’s excavation activity involved the digging of pits 60-feet wide and 30-feet deep, and resulting in the excavation of over 60,000 cubic yards of limestone, dolomite and other minerals. The defendant then ran the rock and minerals through a rock crusher and then returned them to the excavated area. Under federal law, “mining activity” in Osage County required a BIA permit, and the BIA defines “mining” as the “science, technique and business of mineral development.” The U.S. Interior Department sued on behalf of the OMC, but after learning that excavation had been completed, the Interior Department removed its injunction request and filed an amended complaint seeking damages for improper mineral extraction. The trial court ruled against the Interior Department and the OMC sought to intervene after learning that the Interior Department would not oppose the court’s ruling. The trial court, however, denied intervention on the basis of lack of jurisdiction. The OMC appealed. The appellate court determined that the OMC was a proper party to the appeal. The appellate court, on the merits, reversed the trial court and held that the defendant’s extraction, sorting, crushing and use of the minerals as part of the excavation was “mineral development” that required a lease approved by the federal government. The appellate court determined that “mining” was not limited to situations involving the commercial sale of minerals. The appellate court remanded the case to the trial court. United States v. Osage Wind, LLC, et al., No. 15-5121, 2017 U.S. App. LEXIS 17996 (10th Cir. Sept. 18, 2017).
International Wind Farm With Erroneously Issued Permit Continues Operations. One of the defendants in this case constructed and began operations on a commercial wind farm in La Rumorosa, Mexico. The operation has a transmission line that runs 1.65 miles in total. Roughly 0.65 miles stands on U.S. soil and roughly one mile stands on Mexican soil. Because the transmission line connects at an international border, the defendant had to obtain a permit from the United States Department of Energy (DOE) prior to construction or operation. Pursuant to the National Environmental Policy Act (NEPA) the DOE conducted an environmental review and prepared an Environmental Impact Statement (EIS) in May 2012. In August 2012, the DOE issued the permit authorizing the defendant to connect the transmission lines across the international border. The plaintiff filed a complaint against the defendant and DOE in December 2012 for declaratory and injunctive relief for violations of a number of environmental laws. After two rounds of summary judgment, only the plaintiffs’ NEPA claim remained. The court found that the NEPA claim was meritorious because the purpose and need statement of the EIS was overly narrow and failed to consider the environmental impacts upon Mexico and the United States. Both parties agreed that, pursuant to these findings, the court should remand the case for the DOE to issue another EIS. However, the plaintiff sought a permanent injunction requiring the defendant to disconnect the line at the border and be enjoined from expanding the operation until the DOE published a valid EIS. In addition, the plaintiff argued that under the Administrative Procedures Act (APA) the Court should vacate the permit because it was issued in error. The court pointed out that under the APA the court is allowed to take into account the effect of the error on the final determination of whether to issue the permit. In narrowly framing the purpose and need statement, the DOE failed to consider distributed power generation as an alternative to the project. However, because it had already been determined that distributed power generation was not a feasible alternative to a utility scale wind farm the defendant’s narrow framing of the purpose and need statement did not cause them to make an erroneous decision. In addition, the court determined that because the Mexican Ministry of Environmental Natural Resources reviewed the impacts of the project and determined that they were acceptable, the defendants’ lack of consideration of the environmental impacts on Mexico again did not lead to an erroneous decision to issue the permit. The court also determined that an injunction would disrupt a substantial flow of a substantial revenue stream to both the defendant and members of the Mexican Agricultural Community and take away a number of paying jobs. Balancing the seriousness of the errors against the disruptive consequences of setting aside the permit and enjoining operations the court denied the plaintiff’s request for vacatur as well as the plaintiff’s request for an injunction prohibiting continued operation. In addition, the court determined that because the expansion of the operation was not a planned certainty and because it is highly unlikely that the added turbines would even be viewable from the United States the court denied the plaintiff’s request for a permanent injunction prohibiting further expansion of the wind farm during the remand project. Backcountry Against Dumps v. Perry, No. 3:12-cv-03062-L-JLB, 2017 U.S. Dist. LEXIS 139090 (S.D. Cal. Aug. 29, 2017).
Farm Pond Regulated Out of Existence. The plaintiffs constructed a pond on their farm. They thought they were entitled as of right to build this pond under Conn. Gen. Stat. § 22a-40(a) which allows the construction of a farm pond as a matter of legal right if the farm pond is essential to the farming operation. However, the defendant issued a cease-and-desist order and required the plaintiffs to submit an application and to seek permission from the defendant to build the pond. The defendant determined that the plaintiffs’ farm was not essential to their farming operation and that plaintiffs had to remediate the pond to restore the land to its previous condition. The plaintiffs did not do so and the defendant issued another cease-and-desist order and sued. The defendant ultimately prevailed in the state court action and the state court issued a permanent injunction that required the plaintiffs to remove the pond and remediate their land. The trial court’s decision was affirmed on appeal. More than three years later, the plaintiffs brought a federal court action against the defendant, the Inland Wetlands and Watercourses Commission and the defendant’s environmental planner. The plaintiffs claimed that, pursuant to 42 U.S.C. § 1983, the defendant’s regulations and their implementation of them through the previous actions violated the plaintiffs’ clearly established statutory right to use their land and their constitutional right to pursue their farming occupation. The defendants moved for a judgment on the pleadings arguing that the complaint is barred by the statute of limitations. The statue of limitations for a §1983 action for violation of the Constitution that is filed in federal court is three years. The court determined that the plaintiffs’ cause of action accrued more than three years earlier when the first cease and desist order was issued. The court also pointed out that the plaintiffs were aware of their injury when they litigated with the defendants about it in the state court system. In addition, the court determined that the continuing violation doctrine did not apply because the plaintiffs did not argue that the defendant’s actions accumulated over time to the point that only after a certain point did their actions become unlawfully injurious. The court held that through both cease-and-desist orders and the state court litigation the plaintiffs had reason to know many times over of their alleged injury. As a result, their case was barred by the statute of limitations and the defendant’s motion for judgment on the pleadings was granted. Andrews v. Town of Wallingford, No. 3:16-cv-01232, 2017 U.S. Dist. LEXIS 133486 (D. Conn. Aug. 21, 2017).
Lack Of Payment For Pickles Violates PACA Trust Provisions. The plaintiff sells wholesale quantities of produce. The defendant is engaged in buying perishable agricultural commodities in wholesale or jobbing quantities. The parties entered into a written contract for the sale of fresh cucumbers, also known as Persian pickles. Pursuant to the contract, the plaintiff was to sell 3,200 cartons of pickles to the defendant at a set price of $13 per carton on 21-day payment terms every week from October 2015 through January 2016. The contract also specified that the quality must be “#1” and the product must be “crunchy and dark green.” The plaintiff completed 10 shipments of pickles to the defendant before December 11, 2015. The defendant claimed that each of the shipments was non-conforming to the contract specifications and, as a result, never paid the invoices despite having received and accepted the pickles. The defendant claimed that he attempted to sell the non-conforming pickles in good faith, but did so at a loss. Following December 11, 2015, the defendant terminated the contract citing the plaintiff’s failure to provide conforming goods. The plaintiff sued, asserting claims for recovery of Perishable Agricultural Commodities Act (PACA) trust benefits, recovery of damages of the defendant’s unlawful conduct under PACA, and breach of contract. PACA requires produce buyers to hold all perishable commodities purchased on short-term credit, as well as sales proceeds, in trust for the benefit of unpaid sellers. The court pointed out that PACA requires the produce buyer to maintain records that contain specific information regarding goods returned or rejected by a buyer, goods dumped as commercially worthless, and regarding other allowable expenses; which the defendant did not do. The court determined that the defendant could not recover losses related to non-conforming goods when it unlawfully failed to maintain records to prove those losses. In addition, the court determined that the defendant breached the contract by failing to pay for the 10 shipments that it accepted. As a result, the plaintiff was entitled to re-sell the goods and was entitled to recover the lost balance. Consequently, the court granted the plaintiff’s motion for summary judgment, and the defendant’s counterclaim for breach of contract was dismissed. Horti Ams., L.L.C. v. Steven Produce King, Inc., No. 16 Civ. 889, 2017 U.S. Dist. LEXIS 134203 (E.D.N.Y. Aug. 22, 2017).
Glyphosate Used During Harvesting of Oats Does Not Bar ‘Natural’ Label. The plaintiffs brought a class action suit against the defendant. They sought damages for several state statutory and common law claims concerning their assertion that the defendant’s products contained glyphosate. The defendant, buys oats from farmers who, during the growing and harvesting of the oats, use glyphosate to aid in the drying of the oats and produce an earlier and more uniform crop. Traces of glyphosate was found to be present in the defendant’s products in an amount well under the EPA-allowed maximum. The plaintiffs claimed that they were induced to purchase the defendant’s oats because of its labeling as “Natural,” “100% Natural,” “100 % Natural Whole Grain,” “Heart Healthy,” or “Part of a Healthy Diet” and that had they been aware of the presence of glyphosate they would not have purchased the defendant’s products – a deceptive labeling claim. The court pointed out that the labeling of food is governed by the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.). The court concluded that the language in this act which states: “no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in the interstate commerce,” indicates that Congress intended to prohibit states from imposing food labeling requirements on manufacturers. In addition, the Food and Drug Administration (FDA) has published guidance specifically addressing the use of the term “natural”. According to the FDA the use of the term “natural” was not intended to address food production methods such as the use of pesticides. Consequently, the court determined that because the Congress has preempted the field of food labeling, and the presence of pesticides and chemical residues is governed by federal statues, the plaintiffs could not challenge the defendant under state or common law. The court granted the defendant’s motion to dismiss. Gibson v. Quaker Oats Co., No. 16 CV 4853, 2017 U.S. Dist. LEXIS 130696 (N.D. Ill. Aug. 14, 2017).
Court Invalidates Obama-ERA DOL Overtime Rules. Under the Fair Labor Standards Act (FLSA), ag employees that are exempt from the overtime wage payment rate, they must be paid a minimum amount of wages per week. Until December 1, 2016, the minimum amount was $455/week ($23,660 annually). Under a proposal of the Department of Labor (DOL), however, the minimum weekly amount was to increase to $913 ($47,476 annually). Thus, an exempt employee that is paid a weekly wage exceeding $913 is not entitled to be paid for any hours worked exceeding 40 in a week. But, if the $913 weekly amount was not met, then the employee would generally be entitled to overtime pay for the hours exceeding 40 in a week. Thus, the proposal would require farm businesses to track hours for those employees it historically has not tracked hours for – managers and those performing administrative tasks. But, if the employee is an agricultural worker performing agricultural work, the employee need not be paid for the hours in excess of 40 in a week at the overtime rate. The proposal also imposes harsh penalties for noncompliance. Before the new rules went into effect, many states and private businesses sued to block them. The various lawsuits were consolidated into a single case, and in November of 2016, the court issued a temporary nationwide injunction blocking enforcement of the overtime regulations. Nevada v. United States Department of Labor, 218 F. Supp. 3d 520 (E.D. Tex. 2016). The court later entered summary judgment for the plaintiffs in the case thereby invalidating the regulations. In its ruling, the court focused on the congressional intent behind the overtime exemptions for “white-collar” workers as well as the authority of the DOL to define and implement those exemptions. The court determined that the Congress clearly intended to exempt overtime wages for work that involved “bona fide executive, administrative, or professional capacity duties.” Consequently, the DOL did not have regulatory authority to use a “salary-level test that will effectively eliminate the duties test” that the Congress clearly established. The court also concluded that the DOL did not have any authority to categorically exclude workers who perform exempt duties based on salary level alone, which is what the court said that the DOL rules did. The court noted that the rules more than doubled the required salary threshold and, as a result, “would essentially make an employee’s duties, functions, or tasks irrelevant if the employee’s salary falls below the new minimum salary level.” The court went on to state that the overtime rules make “overtime status depend predominantly on a minimum salary level, thereby supplanting an analysis of an employee’s job duties.” The court noted that his was contrary to the clear intent of the Congress and, as a result, the rules were invalid. Nevada v. United States Department of Labor, No. 4:16-cv-731, 2017 U.S. Dist. LEXIS 140522 (E.D. Tex. Aug. 31, 2017).
Co-Owner Of Agricultural Company Is Considered An Employer Under Migrant And Seasonal Worker Protection Act. The defendant co-owns a wholesale plant nursery facility. The plaintiffs claimed that, starting in November 2016, defendants have employed up to 283 employees to make and produce plants for their wholesale nursery, who have not been paid any wages for the work performed. The plaintiffs’ complaint alleged that the defendant violated the “Hot Goods” provisions of the Fair Labor Standards Act (FLSA) and that the defendant violated the Migrant and Seasonal Agricultural Worker Protection Act (MSWPA). The defendant motioned to dismiss, claiming that although he shared the day-to-day management duties of the company with his partner from 1997-2014, he relinquished the day-to-day duties to his partner starting in 2014. As a result, he claimed that he was not an employer with regard to the FLSA and MSWPA, and moved for summary judgment. The court determined that when an individual exercises control over the nature and structure of the employment relationship or economic control over the relationship then that individual is considered an “employer” within the meaning of the FLSA and MSWPA. Because the defendant had the power to hire and fire employees and authority over some of the conditions of employment, the court determined that he exercised control over the nature and structure of employment. In addition, the defendant continuously and on a regular basis had toured the nursery and interviewed and directed employees as to their job assignments. The defendant also made various contributions to, and directed payment to, the employee payroll. Thus, the court concluded that the defendant also had control over the purse strings, and denied the defendant’s motion to dismiss. Acosta v. EuroAmerican Propagators, LLC, No. 17-cv-00131-H-RBB, 2017 U.S. Dist. LEXIS 129072 (S.D. Cal. Aug. 14, 2017).
Vacation Of Highways Needed To Access Public Resources Upheld. Three townships vacated portions of several section-line highways. The plaintiff, South Dakota Department of Game, Fish and Parks, opposed the action on the basis that the highways provided access to bodies of water held in trust by the State for the public. The trial court affirmed in part and reversed in part and the plaintiff appealed. The appellate court held that the determination of whether vacating the highways will better serve the public interest is a practical legislative determination which was entrusted to the discretion of the townships. Therefore, the issue was not for the court to decide. In addition, the appellate court held that the legislature empowered the townships with the ability to vacate highways if the public interest would be better served by the proposed vacating. The appellate court noted that there is no restraint on vacating highways that provide access to a public resource. As a result, the question was whether the public harm of cutting off such access was outweighed by the public benefit in vacating the highway. However, the court determined that this balancing of competing public interests is a policy question and therefore not one properly answered by the courts. The appellate court did find, however, that one township’s decision to vacate was based not on a determination that vacating the highway segments would better serve the public interest, but rather on a determination that doing so would better prevent public access. As a result, the court of appeals reversed that township’s decision to vacate. State v. Troy Township, No. 27981, 2017 S.D. LEXIS 105 (S.D. Sup. Ct. Aug. 16, 2017).
Plaintiff Not Entitled to Resident Hunting License To Hunt Father’s Land. The plaintiff resided at a trailer on his father’s Iowa property on weekends or during hunting season. The defendant sent the plaintiff a letter requesting information about the plaintiff’s residency status. The plaintiff replied that he was employed in Minnesota (five hours away), did not receive mail in Iowa, did not pay any utility bills and considered his father’s IA home to be his residence. The plaintiff also had no vehicles registered in IA. The plaintiff, it was determined, listed a MN address on his tax returns, but paid property tax in IA. Based on these facts, the defendant notified the plaintiff that they believed he was claiming residency status only for hunting purposes, and that he did not meet the residency requirements of Iowa Code §483A.1A(10)(a). The plaintiff appealed the defendant’s administrative decision and an Administrative Law Judge upheld the defendant’s determination on the basis that the plaintiff had claimed a residency privilege in MN. On review, the head of the defendant affirmed. On review, the trial court reversed and remanded on the basis that the defendant should not have based its decision on the fact that the plaintiff had claimed a residency privilege in MN and spent little time in IA. On remand, however, the Administrative Law Judge again held that the plaintiff did not meet the residency requirements of IA law, and the defendant’s director affirmed. The trial court affirmed, and the plaintiff appealed. The appellate court affirmed, concluding that the trial court did not base its decision solely on the fact that the plaintiff had a MN driver’s license. The appellate court determined that the plaintiff did not have a principal and primary residence in IA, a prerequisite of being able to obtain a resident hunting license. The appellate court also determined that the statute was not void for vagueness and that the burden of proof to establish residency was on the plaintiff. Schultz v. Iowa Department of Natural Resources, No. 16-1689, 2017 Iowa App. LEXIS 853 (Iowa Ct. App. Aug. 16, 2017).
Onion Packing Employees Do Not Fall Under FLSA Exception. The defendant is the largest producer of sweet onions in the country. As a part of its operation, the defendant ran a packing shed where employees process and package onions that the defendant grew as well as those raised by other onion farmers. The Department of Labor (DOL) filed a lawsuit alleging that the defendant's practices violated the Fair Labor Standards Act (FLSA) because it did not pay its packing shed workers overtime wages during the 2012-2016 onion seasons when those employees processed onions grown by farmers other than the defendant's onions. Under the FLSA, employers must generally pay their employees overtime wages when the employees work more than 40 hours in a week. However, there is an exception which provides that employees employed in “agriculture” are not entitled to overtime wages (29 U.S.C. § 213 (b) (12)). The definition of agriculture with respect to the FLSA has two distinct branches: primary agriculture which includes typical farming activities like the cultivation and tillage of the soil, and secondary agriculture which includes any practices, whether or not farming practices, that are performed by a farmer on a farm and are incident to or in conjunction with such farming operations. The court determined that secondary practices must relate to the farmer’s own farming operations and not the farming operations of others. Because the defendant was not the farmer of the onions grown by the contract growers, the processing of those onions was incidental to or in conjunction with the farming operations of the contract growers and not the defendant. As a result, the court determined that the agriculture exemption did not apply to the packing-shed employees when they were processing onions owned by others because they were not performing secondary agricultural practices at that time. Acosta v. Bland Farms Prod. & Packing, LLC No: CV 614-053, 2017 U.S. Dist. LEXIS 119874 (S.D. Ga. July 31, 2017).
USDA Must Pay Attorney Fees For Improperly Withholding SNAP Information. In 2011, the plaintiff filed a Freedom of Information Act (FOIA) request for information from the USDA concerning store redemptions involving the Supplemental Nutrition Assistance Program (e.g., Food Stamps). The USDA refused to divulge the requested information claiming an exemption from FOIA. The trial court agreed, but the appellate court reversed and remanded. On remand, the USDA claimed two different exemptions and moved for summary judgment. The trial court denied the motion and held a bench trial, ultimately entering judgment in the plaintiff’s favor. The plaintiff then motioned to recover attorney fees. The court noted that the release of the requested information served a public benefit in improving public policy regarding city planning, distribution of government resources and government transparency. The court also noted that while the release of the information provided a commercial benefit to the plaintiff, the plaintiff was seeking to further its private interest but to obtain information to share with the public. The court also noted that the plaintiff’s interest in the records was more akin to “disinterested scholarly purposes. While the USDA has a reasonable basis for withholding the requested information, the other factors outweighed the USDA’s interests. Accordingly, the court awarded reasonable attorney fees to the plaintiff in the amount of $60,000 plus $8,422.67 of costs. Argus Leader Media v. United States Department of Agriculture. No. 4:11-CV-04121-KES, 2017 U.S. Dist. LEXIS 122126 (D. S.D. Aug. 3, 2017).
USDA Improperly Delayed Implementation of Crop Insurance Provision. A provision in the 2014 Farm Bill, Actual Production History (APH) Yield Exclusion, allows eligible producers impacted by severe weather to receive a higher approved yield on their insurance policies through the federal crop insurance program. APH works by allowing a farmer to exclude yields in particularly bad years (e.g., those having a natural disaster or other extreme weather event) from their production history when calculating yields that are used to establish their crop insurance coverage. The level of crop insurance available to a farmer is based on the farmer’s average recent yields. Particularly low yields in a prior year would reduce the level of insurance coverage in future years but for the APH provision. Farmers are eligible for the APH exclusion when the county yield is at least 50 percent below the average of the immediately previous 10 consecutive crop years. The provision was to become effective in the spring of 2015 for spring crops with a November 30, 2014 change date. Eligible crops include corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts and popcorn. However, the USDA later decided to delay the APH Yield Exclusion for wheat for the 2015 crop year for winter wheat. The plaintiff challenged that decision as arbitrary, but the USDA’s National Appeals Division (NAD) upheld the decision. However, in late 2016 a U.S. Magistrate Judge recommended that the court reverse the USDA’s decision to delay implementation of the APH Yield Exclusion (i.e., “yield plug”) for winter wheat. The USDA appealed, but the trial court found that the NAD’s decision was erroneous because it failed to recognize the Farm Bill’s (7 U.S.C. §1508 (g)(4)(A)) effect on implementation for the 2015 winter wheat crop year. The court determined that Congress chose to leave the applicability provision in place thereby making it self-executing and immediate for the APH Yield Exclusion. In addition, the fact that Congress chose to include specific application/implementation language for other crops and yet stay silent as to winter wheat indicates a direct intention to allow the governing and existing statutory law to be applicable as to the implementation of the APH Yield Exclusion for the 2015 winter wheat crop. As a result, the court adopted the findings and conclusions of the Magistrate Judge. On July 18, 2017, the USDA filed a notice of appeal with the Fifth Circuit. Adkins v. Vilsack, No. 1:15-CV-169-C 2017 U.S. Dist. LEXIS 72790 (N. D. Tex. May 12, 2017).
Utah Law Banning Photographing, Audiotaping and Videotaping While Under False Pretenses or Trespassing Unconstitutional. Utah law (Code §76-6-112) (hereinafter Act) criminalizes entering private agricultural livestock facilities under false pretenses or via trespass to photograph, audiotape or videotape practices inside the facility. A citizen-activist was arrested while filming what appeared to be a bulldozer moving a sick cow at a slaughterhouse. However, the plaintiff was on public property at the time and the charges were eventually dismissed. Ultimately, anti-livestock activist groups sued on behalf of the citizen-activist claiming that the Act is an unconstitutional restriction on speech in violation of the First Amendment. The defendant claimed that the plaintiffs lacked standing to because they have not yet suffered an injury under the statute. The court noted that there is a three-part test for a plaintiff alleging injury based on a chilling effect of speech. The plaintiff needs to (1) have been engaged in the type of speech in the past; (2) have the desire but no specific plans to engage in the speech; and (3) presently has no intention of engaging in the speech because of the credible threat that the statute will be enforced. The court determined that the plaintiffs satisfied all three of these requirements. The state also argued that lying, which the statute regulates, is not protected by free speech. The court determined that only lying that causes “legally cognizable harm” falls outside First Amendment protection. The court admitted that while some of the misrepresentations criminalized by this Act cause a legally cognizable harm, it concludes that not all of them do. As a result, the court determined that if the state wishes to criminalize these misrepresentations as well, then the act must survive First Amendment scrutiny. The state also argued that the act of recording is not speech that is protected by the First Amendment. However, the court determined that a consensus among courts is that the act of recording is protectable First Amendment speech. The court concluded that the fact that the speech occurred on a private agricultural facility does not render it outside First Amendment protection. Restrictions to speech are subject to either strict or intermediate scrutiny. Content-based speech is subject to strict scrutiny. If the law is content neutral it is subject to intermediate scrutiny. The court determined that both the lying and the recording provisions of the Act are content- based provisions and are subject to strict scrutiny. To survive strict scrutiny the state must demonstrate that the restriction furthers a compelling state interest. The court determined that “the state has provided no evidence that animal and employee safety were the actual reasons for enacting the Act, nor that animal and employee safety are endangered by those targeted by the Act, nor that the Act would actually do anything to remedy those dangers to the extent that they exist”. For those reasons, the court determines that the actwas unconstitutional. Animal Legal Defense Fund v. Herbert, No. 2:13-cv-00679-RJS 2017 U.S. Dist. LEXIS 105331 (D. Utah Jul. 7, 2017).
Company Fails To Follow Law to Get Authority To Install Transmission Line. Ameren Transmission Company of Illinois (ATXI) applied to the Missouri Public Serve Commission (PSC) for a conditional certificate of convenience and necessity (CCN) authorizing ATXI to construct, install, operate, control, manage and maintain a new electric transmission line running though several Missouri counties. PSC granted the CCN with the condition that ATXI acquire the required county assents before the CCN would become effective. Neighbors United Against Ameren’s Power Line (Neighbors United) is a not-for-profit corporation whose members are mostly residents of the Missouri counties that ATXI’s line will be running through. Neighbors United sued claiming that ATXI had not obtained the county commission assents required by Missouri law. It further claimed that because the transmission line crosses farming and ranching property it infringes on the rights of farmers and ranchers under Article I, Section 35 of the Missouri Constitution to engage in farming and ranching practices. The court noted that MO law bars public utilities from erecting power lines in a county without first obtaining the approval of the county commission. Further, the court pointed out that Missouri law specifically states that the applicant for a CCN shall file evidence of local government consent before the PSC issues a CCN. As a result, the court determined that the PSC is authorized to issue a CCN only after the applicant has submitted evidence satisfactory to the PSC that consent has been secured by the public utility. ATXI claimed that the PSC could only impose reasonable and necessary conditions on a CCN. However, the court disagreed, pointing out that Missouri law requires that the county commission consents “shall” be on file before the PSC grants a CCN. Thus, the court held that the county commission assents must be submitted to the PSC before the PSC could grant a CCN. Consequently, the PSC’s issuance of a CCN contingent on ATXI’s subsequent provision of required county commission assents was unlawful as it exceeded the PSC’s statutory authority. Because the court invalidated the PSC’s issuance of the CCN on these grounds it did not need to consider Neighbors United’s second argument involving the infringement on the rights of farmers and ranchers. In re Ameren Transmission Co., No. WD79883 2017,2017 Mo. App. LEXIS 244 (Mo. Ct. App. Mar. 28, 2017), app. to transfer den., No. SC96427, 2017 Mo. LEXIS 266 (Mo. Sup. Ct. Jun. 27, 2014).
Farmer’s Re-enrollment in Conservation Resource Program Properly Rejected. A farmer began participating in the Conservation Resource Program (CRP) in 1998. In order to determine which tracts are eligible for re-enrollment the FSA uses a scoring factor based on the number of trees and shrubs best suited for wildlife in the area. In 2006, the farmer was notified of the opportunity to re-enroll his land in the CRP for another 10 years. He began the process of getting re-enrolled and signed a conservation plan provided by the FSA identifying the conservation practices necessary for the upcoming year. However, after the performance of a maintenance inspection, the FSA terminated the contract because a population of failed red oak on the property lowered the scoring factor below the acceptable level of re-enrollment. The farmer argued that the FSA could not expect him to predict that the conservation plan standards that he was meeting under his 1997 contract would be changed when he applied for re-enrollment 10 years later. The court determined that even if he had received more advance notice he would not have been able to comply with the changed standards before he was required to offer the tract for re-enrollment given the maturity of his forest by 2006. In addition, the court determined that the statutes and regulations allow the FSA to flexibly address standards to meet the needs of the CRP over time in order to carry out the objectives of the program. The plaintiff’s argument that he was entitled to re-enrollment under the original standards would be contrary to this flexibility. Finally, the court held that the farmer’s commitment to pay liquidated damages if the offer was revoked was not consideration. Instead, it was simply proof of earnest which is no more binding on the offeree than it would be or any other good faith deposit required for an offer. Mittelstadt v. Vilsack, No. 15-cv-725-wmc, 2017 U.S. Dist. LEXIS 91280 (W.D. Wisc. Jun. 14, 2017).
Feed Yard Expansion Approved Under Exception To Separation Distance Requirements. The defendant owned and operated a cattle feed yard. The plaintiff owned a home near the defendant’s facility. In 2012 the defendant applied for and received a permit from the Kansas Department of Health and Environment (KDHE) to expand its facility to 2000 head of cattle and build a water pollution control system. The plaintiff sued, claiming that the expansion violated the separation distance requirements between a confined feeding facility and the nearest habitable structure set forth in K.S.A. 2016 Supp. §65-171d(j)(1). The plaintiff also filed a nuisance action on behalf of her late husband’s estate claiming that the expansion interfered with his burial site in the nearby cemetery. The court determined that the expansion did violate the distance requirements, but that the feed yard fell under one of the exceptions provided in K.S.A. 2016 Supp. §65-171(l)(1)(A)-(C). However, the court concluded that the exceptions provided in subsections (l)(1)(A) & (B) could not apply to the 2012 expansion because those exceptions were only applicable to facilities that existed and were approved before July 1, 1996. But, the court found that the exception provided by subsection (l)(1)(C) could apply to expansions made after July 1, 1996 as long as the utilization of the exception did not result in the facility being closer in distance to the nearest habitable structure than it was before the expansion. Since the defendant’s 2012 expansion did not decrease the distance between his facility and the plaintiff’s home the expansion fell under this exception. The court also held that the estate could not bring a private or a public nuisance claim. A private nuisance claim could not survive in favor of a personal representative of the deceased unless it accrued during the decedent’s lifetime. Since in this case the nuisance did not occur during the decedent’s lifetime, the private nuisance claim failed as a matter of law. Furthermore, individuals could not bring a public nuisance claim unless the private individual’s alleged harm is distinguishable from that suffered by the general public. Since the harm suffered resulted in an increase in insects and foul odors, it was not different than the harm suffered by any member of the public who visited the cemetery. Herd v. Shrauner Feedyard, LLC, No. 116,193, 2017 Kan. App. Unpub. LEXIS 468 (Kan. Ct. App. Jun. 16, 2017).
Deer-Hunting Preserve Quarantine Not An Unconstitutional Taking. The plaintiffs land was formerly used as a whitetail-deer hunting preserve. During the preserve’s operations deer harvested on the property tested positive for chronic wasting disease (CWS). The landowners were given instructions from the Iowa Department of Natural Resources (IDNR) to depopulate and disinfect their land. The IDNR also required the plaintiffs to construct an electric fence and be solely responsible for its repair and maintenance. Upon completing the depopulation and disinfection, the plaintiffs sent a letter to the DNR announcing that they would no longer be operating the land as a deer-hunting preserve. The DNR responded by issuing an emergency order to require them to keep the electric fence and to close and keep closed all of the gates. The landowners appealed the emergency order on the grounds that the DNR lacked jurisdiction over the property since it was no longer a hunting preserve, and that the terms of the quarantine provided by the emergency order constituted an unconstitutional taking. The court found that a straightforward interpretation of the language of Iowa Code § 484C supported the landowner’s position that the term “quarantine” is modified by the phrase following it, “of diseased preserve whitetail.” Therefore, the statue did not allow for quarantine of non-diseased whitetail or whitetail that are not preserve whitetail. As a result, the agency lacked statutory authority to issue the emergency order. In determining if the order constituted an unconstitutional taking the court analyzed several factors. The court stated that the order was merely temporary and not permanent, and that the economic impact of the order was not large enough to weigh in favor of a taking. The court also determined that a reasonable investor would be aware that a hunting preserve is subject to state regulation, therefore investment-backed expectations were not dramatically upset in this case, further weighing against an unconstitutional taking. As a result, the court determined that the order did not constitute an unconstitutional governmental taking. Brakke v. Iowa Dep’t of Natural Res., No. 15-0328, 2017 Iowa Sup. LEXIS 70 (Iowa Sup. Ct. Jun. 16, 2017).
Montana Beef Checkoff Enjoined. The plaintiff, a cattle rancher advocacy group, claimed that the federal law requiring funding of the Montana Beef Council (MBC) via funds from the federal beef checkoff. The court, which involved findings and recommendations of a U.S. Magistrate Judge, determined that the plaintiffs had standing and stating a claim upon which relief could be granted. Under the Beef Checkoff, a $1.00/head fee is imposed at the time cattle are sold. The money generated funds promotional campaigns and research, and state beef councils can collect the funds and retain half of the collected amount with the balance going to the Cattleman’s Beef Production and Research Board (Beef Board). But, a producer can direct that all of the producer’s assessment go to the Beef Board. The plaintiff claimed that the use of the collected funds violated their First Amendment rights by forcing them to pay for “speech” with which they did not agree. The defendant (USDA) motioned to dismiss, but the Magistrate Judge denied the motion. The court determined that the plaintiffs had standing, and that the U.S. Supreme Court had held in prior cases that forcing an individual to fund a private message that they did not agree with violated the First Amendment. Any legal effect of an existing “opt-out” provision was not evaluated. The court also rejected the defendant’s claim that the case should be delayed until federal regulations with respect to the opt-out provision was finalized because the defendant was needlessly dragging its heels on developing those rules and had no timeline for finalization. The court entered a preliminary injunction barring the MBC from spending funds received from the checkoff. On further review by the federal trial court, the court adopted the magistrate judge’s decision in full. The trial court determined that the plaintiff had standing on the basis that the plaintiff would have a viable First Amendment claim if the Montana Beef Council’s advertising involves private speech, and the plaintiff did not have the ability to influence the advertising of the Montana Beef Council. The trial court rejected the defendant’s motion to dismiss for failure to state a claim on the basis that the court could not conclude, as a matter of law, that the Montana Beef Council’s advertisements qualify as government speech. The trial court also determined that the plaintiff satisfied its burden to show that a preliminary injunction would be appropriate. Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America v. Perdue, No. CV-16-41-GF-BMM, 2017 U.S. Dist. LEXIS 95861 (D. Mont. Jun. 21, 2017).
Denial of SURE Payment Upheld, But Equitable Relief Improperly Denied. The plaintiff suffered loss to his planted wheat crop due to wind and drought. An adjuster inspected the field, verified the loss and processed the claim. The wheat was destroyed with the adjuster’s approval and the plaintiff planted 622.3 acres of uninsured grain sorghum on the wheat acres. The plaintiff submitted Form CCC-576 with the county FSA committee. While the Form relates to uninsured losses, it is denoted on the Form that it relates to insured losses. The Form sought coverage for the 622.3 acres under the Supplemental Revenue Assistance Payments Program (SURE), USDA’s federal crop insurance program. The county committee requested documentation from the plaintiff’s insurance agency to verify the loss but never received any response by September. The county committee did not contact the plaintiff or notify him that no response was received from his insurance agency. As a result, the notice was disapproved and a letter was mailed to the plaintiff informing him of the disapproval advising him that the disapproval was because the wheat crop was destroyed and a grain sorghum crop replanted before he advised the FSA that the wheat crop had been planted and failed. The letter advised the plaintiff of his right to appeal within 30 days. The plaintiff claimed that he never received the letter, which was the reason he didn’t contact the county FSA until two years later when he provided the county committee with the insurance documentation. He then filed an application for payment which was approved, but for no benefits on the basis that he had no failed acres. The plaintiff appealed, but the county denied the appeal on the basis that there was no factual dispute. The plaintiff then filed a direct appeal with the USDA’s National Appeals Division (NAD). The NAD hearing officer determined that the plaintiff’s attempt to appeal the disapproval was untimely. The plaintiff then filed a complaint with the court arguing that the award of $0 and NAD director’s decision was arbitrary and capricious and that the USDA’s overall treatment of his SURE application was a denial of due process. The court determined that the award of $0 was not arbitrary and capricious because the plaintiff’s appeal was not timely filed. On this point, the court noted that the letter from FSA to the plaintiff was deemed to have been received seven days after it was mailed because it was not returned. The court also determined that although the plaintiff had a cognizable property interest in a SURE payment, the government’s denial of that payment did not violate his due process rights because “due process does not require that a property owner receive actual notice before the government take his property”. Instead it merely requires that the government provide notice reasonably calculated to apprise interested parties of the pendency of the action and afford them an opportunity present their objections. The committee accomplished this requirement when they sent the letter to the plaintiff. However, the court held that the NAD Director improperly denied the plaintiff’s request for equitable relief. The court reversed the NAD Director’s decision and remanded the case to the Director for consideration of the plaintiff’s equitable relief claim. Hixson ex rel. Hixson Farms v. United States Dep’t of Agric., No. 15-cv-02061-RBJ, 2017 U.S. Dist. LEXIS 90207 (D. Colo. Jun. 13, 2017).
California Proposition Involving Egg Production Safe From Challenge. The plaintiff, MO Attorney General, sued the defendant, CA Attorney General, seeking declaratory and injunctive relief, costs and fees, associated with blocking enforcement of CA's Proposition 2 and A.B. 1437 which will increase size of egg-laying hen enclosures and decrease flock densities for CA egg producers and egg producers in other states desiring to sell eggs in CA. A 2008 CA ballot initiative required all CA egg producers to produce eggs from laying hens in cages that allowed the hens to “lie down, stand up, fully extend its limbs, and turn around freely.” Because of the additional cost placed on CA egg producers which made their eggs non-competitive with eggs produced in other states not subject to such restrictions, CA passed a law in 2010 making it a crime to sell shelled eggs in CA (regardless of whether the eggs were produced in CA) that came from a laying hen that was confined in a cage not allowing the hen to “lie down, stand up, fully extend its limbs, and turn around freely.” The law was purportedly based on consumer health concerns, but it had the effect of regulating egg production in all states. The plaintiff noted that CA consumers bought one-third of all eggs produced in MO in 2013 and CA requirement will substantially increase cost of MO egg production if egg producers continue to sell eggs in CA, which will also make eggs too expensive to sell in other states. The plaintiff also noted that if MO producers choose to not participate in CA market, other markets will have surplus eggs and egg prices will fall which could force some producers out of business; suit claims that CA provision was an unconstitutional violation of the Commerce Clause by "conditioning the flow of goods across its state lines on the method of their production." In the alternative, the suit alleged federal preemption via 21 U.S.C. Sec. 1052(b) – the Federal Egg Products Inspection Act. The suit was filed after the Farm Bill conferees rejected House Farm Bill provision that would have barred the conduct that CA has engaged in. The trial court held that the plaintiff lacked standing for failure to articulate an interest separate and apart from the interests of private parties, and that the claim that egg price effect on consumers were remote and speculative. The trial court also determined that the CA law was not discriminatory. On further review, the appellate court affirmed, but remanded for dismissal without prejudice. The U.S. Supreme Court declined to hear the case. Missouri v. Harris, No. 2:14-cv-00341-KJM-KJN, 2014 U.S. Dist. LEIXS 76305 (E.D. Ca. Jun. 2, 2014), aff’d., No. 14-17111, 842 F.3d 658 (9th Cir. 2016), cert. den. sub.nom., Missouri v. Becerra, No. 16-1015 (U.S. Sup. Ct. May 30, 2017).
County Setback Distance Upheld. The plaintiff sought to build a wind generation facility on more than 29,000 acres in two counties in Indiana containing 95 aerogenerators. In 2015, the plaintiff filed an application with the defendant (county zoning board of appeals) for the approval of a special exception from the applicable zoning ordinance to build a portion of the facility in the defendant’s county. The county zoning ordinance required a minimum setback distance of 1,000 feet from residential dwellings. Concerned landowners in the designated area raised concerns about harmful side effects of the project including noise, stress, sleep disruption, vibration, flicker, and other annoyances that would impact them personally and lower their property values. The plaintiff then amended its application to have a 1,400-foot setback from landowners that didn’t enter into leases with the plaintiff. A member of the defendant proposed a 2,300-foot setback from the property lines of landowners not entering into lease agreements with the plaintiff and the measure passed on a majority vote of the defendant. The plaintiff filed for judicial review of the increased setback requirement. The trial court upheld the enhanced setback requirement based on the explicit language of the county zoning ordinance at issue that specified a “minimum” 1,000-foot setback as merely a guideline. The trial court also allowed the disaffected landowners to participate in the lawsuit. On appeal, the appellate court affirmed. The appellate court held that, as a guideline, the setback was subject to a “reasonable restrictions” to preserve the public’s health and safety. On the landowners’ motion to intervene, the appellate court also upheld the trial court on the basis that IN Trial Rule 24(A)(2) was satisfied – the landowners showed an interest in the subject of the action; disposition of the action could impede the protection of the landowners’ interest; and representation of the interest by the plaintiff and defendant would inadequately represent the landowners’ interest if the defendants’ decision were modified or reversed. The court pointed to the negative impact on land values and health impacts if the setback distance were reduced. On May 25, 2017, the Indiana Supreme Court refused to hear the case. Flat Rock Wind, L.L.C. v. Rush County Area Board of Zoning Appeals, No. 70A01-1606-PL-1382, 2017 Ind. App. LEXIS 60 (Ind. Ct. App. Feb. 14, 2017), pet. to transfer jurisdiction den., Ind. Sup. Ct. May 25, 2017.
Court Lack Jurisdiction To Hear Claim That Utilities Violated FERC. The plaintiffs bought a wind-powered generator in an attempt to reduce their energy expenses by producing their own power and selling any excess energy to the defendant, a non-regulated utility in the plaintiff’s locale. The wind generator is a “qualified facility” under the Public Utility Regulatory Policy Act of 1978 (PURPA). The plaintiffs have been selling excess power from their wind turbine to the defendant at avoided cost (the price the defendant pays for its electricity from Central Iowa Power Cooperative (CIPCO). The plaintiffs challenged the defendant’s calculation of avoided cost and attempted to have the Federal Energy Regulatory Commission (FERC) initiate an enforcement action against both the defendant and CIPCO). The defendant claimed that the court lacked personal jurisdiction over the matter. The court agreed with the defendant, noting that to establish personal jurisdiction over a non-resident defendant, the plaintiffs had to establish jurisdiction under the D.C. long-arm statute and that conferring jurisdiction satisfies constitutional due process. Here, the court noted that the FERC did not have any contact with Iowa and no facts were alleged that would satisfy the D.C. long-arm statute. The court also noted that the FERC has no statutory duty to initiate an enforcement action, and the PURPA has no guidelines for determining whether to commence an enforcement action. FERC can simply decline to bring an enforcement action. In that event, the plaintiff can bring an action. FERC’s decision to not initiate an action is not reviewable. The decision is up to agency discretion and the court lacked subject-matter jurisdiction. The court granted the defendant’s motion to dismiss. Swecker v. Midland Power Cooperative, No. 16-1434 (CRC), 2017 U.S. Dist. LEXIS 74872 (D. D.C. May 17, 2017).
FAA Registration Rule Inapplicable As Applied to “Model Aircraft.” The plaintiff is a model aircraft hobbyist that was required to register with the Federal Aviation Administration (FAA) due to an FAA regulation issued in 2015 (the “Registration Rule”) that required the owners of small unmanned aircraft operated for recreational purposes to register with the FAA. Such aircraft are termed “model aircraft.” The FAA regulation resulted from the FAA Modernization and Reform Act of 2012 (49 U.S.C. § 40101). The court noted that Section 336 of the Act specifies that the FAA “may not promulgate any rule or regulation regarding a model aircraft.” The Act defines “model aircraft” as an unmanned aircraft that is “(1) capable of sustained flight in the atmosphere; (2) flown within visual line of sight of the person operating the aircraft; and (3) flown for hobby or recreational purposes.” However, the FAA Registration Rule required the owners of small unmanned aircraft, including model aircraft, to register with the FAA by providing their names, physical mailing address, email address and any other information that the FAA might desire. The Registration Rule also requires that a $5 fee be paid for each registration and requires each model aircraft to have a unique identifier number issued by the FAA. Failure to register is punishable by civil or criminal monetary penalties and up to three years in prison. The court determined that the Registration Rule is a rule regarding model aircraft that establishes a new regulatory regime for model aircraft and uses the same definition of “model aircraft” as the Act. As such, the Registration Rule was not allowed under the FAA’s regulatory authority as it was contrary to the clear language of the Act. The court would not allow a policy consideration of improving aviation safety to override the clearly expressed congressional intent. Accordingly, the court vacated the Registration Rule to the extent it applied to model aircraft. Taylor v. Huerta, No. 15-1495, 2017 U.S. App. LEXIS 8790 (D.C. Cir. May 19, 2017).
Ownership of Crops Not Represented Properly and Farm Program Benefits Forfeited. The plaintiffs were farmers that applied for farm program payments with the defendant. The defendant determined that all three applicants were eligible for payments, but later determined that each of the plaintiffs had misrepresented their respective ownership interests in crops produced on particular tracts. The plaintiffs appealed the denial of program benefits to the USDA National Appeals Division (NAD), and the NAD upheld the findings of the Farm Service Agency. The plaintiffs then sought judicial review, and the trial court upheld the NAD. On further review, the appellate court affirmed. The appellate court found that the record contained evidence that a reasonable mind might accept as adequate to support a conclusion that the plaintiffs submitted false or erroneous information on their application for benefits via submitted bank documents and the completed Certification of Disaster Losses form. The trial court’s decision was affirmed. Davis v. United States Department of Agriculture, No. 16-16846, 2017 U.S. App. LEXIS 7722 (11th Cir. May 2, 2017).
Animal Facility Video Statute Challenge Dismissed For Lack of Standing. The plaintiffs, numerous animal rights activist groups, brought a pre-enforcement challenge to the North Carolina Property Protection Act (Act). The Act creates a civil cause of action for a NC employer against an employee who “captures or removes” documents from the employer’s premises or records images or sound on the employer’s premises and uses the documents or recordings to breach the employee’s duty of loyalty to the employer. The plaintiffs claimed that the Act stifles their ability to investigate NC employers for illegal or unethical conduct and restricts the flow of information those investigations provide in violation of the First and Fourteenth Amendments of the U.S. Constitution and various provisions of the NC Constitution. The defendants motioned to dismiss the case. The court granted the defendant’s motion for lack of standing, noting that the plaintiffs had yet to sustain any particularized invasion of a legally protected interest. Merely having fear of liability was insufficient, and there was no substantial risk that the Act would be enforced against them. The court noted that “it is purely speculative “ whether the defendants would invoke the law. The Act also did not infringe the plaintiffs’ rights to receive speech from “investigators” because the right was to too remote and speculative to confer standing. The court also did not find any standing based on state law. People for the Ethical Treatment of Animals v. Stein, No. 1:16CV25, 2017 U.S. Dist. LEXIS 66310 (M.D. N.C. May 2, 2017).
State Legislation Establishes Review Process for Wind Projects. The Tennessee House has passed, on an 85-3 vote, HB 1021. The bill, if approved by the Tennessee Senate, will impose a moratorium against activities associate with wind energy facilities in certain counties and create a joint legislative study committee. Counties and municipalities would be exempt from the moratorium if they adopt regulations by July 1, 2018. Without the exemption, the amendment imposes a moratorium on the construction, operation, expansion or redevelopment of a wind energy facility. The bill also creates a six-member joint legislative study committee to evaluate and make recommendations relative to the siting of wind energy facilities. The committee will be composed of three members of the Senate, to be appointed by the speaker of the Senate, and three members of the House, to be appointed by the speaker of the House. The committee is to timely report its findings and recommendations, including any potential legislation, to the energy, agriculture and natural resources committee of the Senate, and the House agriculture and natural resources committee by January 1, 2018. The committee will cease to exist at that point. Tennessee HB 1021.
Iowa Agricultural Legislation Enacted. During its 2017 session the Iowa legislature enacted several provisions of relevance to agriculture. One provision, HF 410, places Palmer Amaranth on the primary noxious weed list and bars it from import, sale or distribution in Iowa. An exception is provided for the weed’s presence on Conservation Reserve Progam (CRP) land where it can only be controlled consistent with the terms of any existing CRP contract. The provision is effective July 1. SF 357 modifies Iowa Code §103 with respect to electrical wiring projects on farms. Under the provision, the farm need not have electrical work completed by a licensed electrician, but the person performing the work must have a business interest in the farm, be related to the farm’s owner, or be an operator or manager of the farm. For purposes of the bill, “farm” means land, buildings and structures used for agricultural purposes including, but not limited to, storage, handling, and drying of grain and the care, feeding and housing of livestock. The provision excludes the farm residence. The provision is effective July 1. SF 362 provides immunity to the Iowa state fair and county fairs from tort liability for damages caused by any domesticated animal pathogen transmitted at the animal’s premises at the fair. The immunity applies regardless of whether the pathogen is transmitted while the animal is present at the fair or is engaged in a domesticated animal activity. The immunity is conditioned upon the fair’s postage of appropriate signage that warns visitors to take appropriate precautions to help prevent the spread of pathogens (e.g,, not touching face and washing food, etc.). The provision is effective July 1. HF 254 allows a deer carcass to be tagged in the immediate vicinity of where the deer was taken if tagging the deer without moving it would pose a safety hazard (such as in a waterway, entanglement or other safety hazard) to the party that killed the deer or a third party. The provision is effective July 1. HF 464 allows an all-terrain vehicle or off-road utility vehicle to cross a state or county highway directly at a 90-degree angle after coming to a complete stop and yielding the right of way to any oncoming traffic. The crossing must be made from a designated all-terrain vehicle trail to another all-terrain vehicle trail and, if a divided highway is being crossed, the crossing must be made at an intersection. The provision is effective July 1. SF 406 eliminates any otherwise applicable permitting requirements for any motor vehicle that a farmer operates to transport an implement of husbandry between fields or repair or storage locations. Any applicable size, weight, load and lighting restrictions still apply. The provision is effective July 1.
GIPSA Interim Final Rule on Marketing of Livestock and Poultry Delayed. In the fall of 2016, the USDA sent to the Office of Management and Budget (OMB) interim final rules that provide the agency’s interpretation of certain aspects of the Packers and Stockyards Act (PSA) involving the buying and selling of livestock and poultry. The proposed interim final rules generated thousands of comments, with ag groups and producers split in their support. The interim final rules concern Section 202 of the PSA (7 U.S.C. §§ 192 (a) and (e)) which makes it unlawful for any packer who inspects livestock, meat products or livestock products to engage in or use any unfair, unjustly discriminatory or deceptive practice or device, or engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices or creating a monopoly in the buying, selling or dealing any article in restraint of commerce. The “effect” language of the statute would seem to eliminate any requirement that the producer show that the packer acted with the intent to control or manipulate prices. However, the federal courts have largely interpreted the provision to require a plaintiff to show an anti-competitive effect in order to have an actionable claim. However, the USDA issued proposed regulations in June of 2010 providing guidance on the handling of antitrust-related issues under the PSA. 75 Fed. Reg. No. 119, 75 FR 35338 (Jun. 22, 2010). Under the proposed regulations, "likelihood of competitive injury" is defined as "a reasonable basis to believe that a competitive injury is likely to occur in the market channel or marketplace.” It includes, but is not limited to, situations in which a packer, swine contractor, or live poultry dealer raises rivals' costs, improperly forecloses competition in a large share of the market through exclusive dealing, restrains competition, or represents a misuse of market power to distort competition among other packers, swine contractors, or live poultry dealers. It also includes situations “in which a packer, swine contractor, or live poultry dealer wrongfully depresses prices paid to a producer or grower below market value, or impairs a producer's or grower's ability to compete with other producers or growers or to impair a producer's or grower's ability to receive the reasonably expected full economic value from a transaction in the market channel or marketplace." According to the proposed regulations, a “competitive injury” under the PSA occurs when conduct distorts competition in the market channel or marketplace. The scope of PSA §202(a) and (b) is stated to depend on the nature and circumstances of the challenged conduct. The proposed regulations specifically note that a finding that a challenged act or practice adversely affects or is likely to affect competition is not necessary in all cases. The proposed regulations also note that a PSA violation can occur without a finding of harm or likely harm to competition, but as noted above, that is contrary to numerous court opinions that have decided the issue. On April 11, 2017, the USDA announced that it was delaying the effective date of the interim final rule for 180 days, until October 19, 2017. The due date for public comment is June 12, 2017.
Court Upholds State Listing of Glyphosate As Cancer-Causing Chemical. California voters approved Proposition 65 in 1986. That initiative became the Safe Drinking Water and Toxic Enforcement Act of 1986. Under that law, California must publish a list of chemicals known to cause cancer or birth defects or other reproductive harm. The list is updated at least one time every year. It now contains about 800 chemicals. The state delegated its authority to the International Agency for Research on Cancer (IARC) to determine which chemicals are to be added to the list of possible cancer-causing agents, and IARC determined that glyphosate, the active ingredient in the plaintiff’s Roundup chemical product, should be listed. The plaintiff challenged that delegation of authority as unconstitutional and the court disagreed, reasoning that an independent, authoritative source was making the decision concerning listing as opposed to the fundamental policy decision of whether to create a list. The plaintiff also asserted a due process violation on the basis that its property interest and business goodwill and reputation would be damaged by the listing and that no procedural safeguards existed. However, the court held that due process did not apply because the matter involved a quasi-judicial action to which procedural due process did not apply. The court also dismissed the plaintiff’s Guarantee Clause claim because such a challenge only involves a political question. The court likewise dismissed the plaintiff’s claims based on unlawful amendment to the CA Constitution and free speech. On the free speech claim, the court noted that being a listed chemical does not require a label. The court determined that the mere listing of glyphosate on the list of chemicals known to cause cancer does not require the plaintiff to provide a warning, and the plaintiff may never actually be required to provide a warning. The plaintiff argued that the listing was the functional equivalent of being required to provide a warning label. The plaintiff claimed that it was caught in a catch 22 - if it provided a warning label, then sales would drop and if it didn’t provide a label that the law did not require, it could get sued if someone proves injury because the plaintiff didn’t provide a label. However, the court disagreed, noting that CA has the discretion to determine if glyphosate poses no significant risk of causing cancer even if glyphosate is placed on the Prop. 65 list of chemicals. In addition, the court noted, the plaintiff is not required to provide a warning label if it can show that glyphosate poses no significant risk of causing cancer in humans. So the issue of whether the plaintiff is required to provide a warning label, the court ruled, is not yet ripe for adjudication. Monsanto Co. v. Office of Environmental Health Hazard Assessment, No. 16CECG00183,2017 Cal. Super. LEXIS 3 (Ca. Super. Ct. Mar. 10, 2017).
Farmer Not Separate Person from LLC for Payment Limitation Purposes. The plaintiff received federal farm program payments from 2005 through 2008. The defendant determined that the plaintiff was not a separate “person” from his LLC which also received farm program payments for the same years. As a result, the defendant required the plaintiff to refund to the government the payments that he had received. The defendant exhausted his administrative remedies with the defendant to no avail, and the trial court upheld the defendant’s determination on summary judgment. On appeal, the appellate court affirmed. The court noted that the plaintiff was required to show that he was “actively engaged in farming” and that he was a “separate person” from the LLC because the definition of “person” applied to all of part 1400 of the Code of Federal Regulations which contains the “separate person” rules and, consequently, the defendant’s interpretation of its own regulation defining “person” for payment limitation purposes that is set forth in 7 C.F.R. §1400.3 was consistent with the regulation and not plainly erroneous. The court also determined that substantial evidence supported the conclusion that the plaintiff was not a separate person from his LLC due to many unexplained transfers or loans between the plaintiff and the LLC without accompanying documentation which suggested a commingling of funds and the making of operating loans back and forth between the plaintiff and the LLC. As such, the appellate court believed it was not possible to determine the true assets and liabilities of either the plaintiff or the LLC. The court believed that the plaintiff had not made a good faith effort to comply with the per-person payment limitations, was not a separate person from the LLC and was entitled to only one payment limit instead of two. Also, the finality rule which makes a determination by a state or county Farm Service Agency final and binding 90 days from the date an application for benefits was filed did not bar the Farm Service Agency from evaluating the plaintiff’s program eligibility because the determination was based on misrepresentations that the plaintiff should have known were erroneous. On the application, the plaintiff had represented that he provided all of the capital and labor on his farm and didn’t receive any operating loans from related entities. In addition, while the National Appeals Director’s decision did not meet the 30-day deadline, it was not void because the statute at issue (7 U.S.C. §6998(b)(2)) contains no remedy for failure to comply. Harmon v. United States Department of Agriculture, No. 14-35228, 2016 U.S. App. LEXIS 23105 (9th Cir. Dec. 22, 2016).
County Setback Distance Upheld. The plaintiff sought to build a wind generation facility on more than 29,000 acres in two counties in Indiana containing 95 aerogenerators. In 2015, the plaintiff filed an application with the defendant (county zoning board of appeals) for the approval of a special exception from the applicable zoning ordinance to build a portion of the facility in the defendant’s county. The county zoning ordinance required a minimum setback distance of 1,000 feet from residential dwellings. Concerned landowners in the designated area raised concerns about harmful side effects of the project including noise, stress, sleep disruption, vibration, flicker, and other annoyances that would impact them personally and lower their property values. The plaintiff then amended its application to have a 1,400-foot setback from landowners that didn’t enter into leases with the plaintiff. A member of the defendant proposed a 2,300-foot setback from the property lines of landowners not entering into lease agreements with the plaintiff and the measure passed on a majority vote of the defendant. The plaintiff filed for judicial review of the increased setback requirement. The trial court upheld the enhanced setback requirement based on the explicit language of the county zoning ordinance at issue that specified a “minimum” 1,000-foot setback as merely a guideline. The trial court also allowed the disaffected landowners to participate in the lawsuit. On appeal, the appellate court affirmed. The appellate court held that, as a guideline, the setback was subject to a “reasonable restrictions” to preserve the public’s health and safety. On the landowners’ motion to intervene, the appellate court also upheld the trial court on the basis that IN Trial Rule 24(A)(2) was satisfied – the landowners showed an interest in the subject of the action; disposition of the action could impede the protection of the landowners’ interest; and representation of the interest by the plaintiff and defendant would inadequately represent the landowners’ interest if the defendants’ decision were modified or reversed. The court pointed to the negative impact on land values and health impacts if the setback distance were reduced. Flat Rock Wind v. Rush County Area Board of Zoning Appeals, No. 70A01-1606-PL-1382, 2017 Ind. App. LEXIS 60 (Ind. Ct. App. Feb. 14, 2017).
Livestock Regulation Did Not Violate Constitution. The plaintiff operated a cattle ranch and wheat farm and sought to add a new chicken barn and egg-laying operation. The plaintiff went through an application and approval process with the defendant before being granted approval in late 2015. In early 2016, the plaintiff sued the defendant for an equal protection claim arguing that the defendant’s approval process treated egg-laying operations differently from similarly situated chicken-raising operations. Under the defendant’s rules, new confined animal operations had to go through the approval process where livestock are raised or fed out, but ag uses of the land that produce ag and livestock products originating from the land’s productivity are exempt. The court dismissed the plaintiff’s claim on the basis that the plaintiff had misrepresented the provision on the basis that its purpose was to maintain the same general uses of the community. The plaintiff’s claim that a farmer could buy chickens and sell the live young without an approval process as long as no eggs were sold was, the court opined, “an absurd interpretation of the defendant’s regulatory process. Kuntz v. Delta County Board of Commissioners, No. 16-CV-710-CMA-GPG, 2017 U.S. Dist. LEXIS 17065 (D. Colo. Feb. 7, 2017).
Montana Beef Checkoff Enjoined. The plaintiff, a cattle rancher advocacy group, claimed that the federal law requiring funding of the Montana Beef Council (MBC) via funds from the federal beef checkoff. The court, which involved findings and recommendations of a U.S. Magistrate Judge, determined that the plaintiffs had standing and stating a claim upon which relief could be granted. Under the Beef Checkoff, a $1.00/head fee is imposed at the time cattle are sold. The money generated funds promotional campaigns and research, and state beef councils can collect the funds and retain half of the collected amount with the balance going to the Cattleman’s Beef Production and Research Board (Beef Board). But, a producer can direct that all of the producer’s assessment go to the Beef Board. The plaintiff claimed that the use of the collected funds violated their First Amendment rights by forcing them to pay for “speech” with which they did not agree. The defendant (USDA) motioned to dismiss, but the Magistrate Judge denied the motion. The court determined that the plaintiffs had standing, and that the U.S. Supreme Court had held in prior cases that forcing an individual to fund a private message that they did not agree with violated the First Amendment. An legal effect of an existing “opt-out” provision was not evaluated. The court also rejected the defendant’s claim that the case should be delayed until federal regulations with respect to the opt-out provision was finalized because the defendant was needlessly dragging its heels on developing those rules and had no timeline for finalization. The court entered a preliminary injunction barring the MBC from spending funds received from the checkoff. The court’s decision will be reviewed by the federal trial court. On December 23, 2016, the defendnat filed its objections to the Magistrate Judge's recommendations, and on January 5, 2017, the plaintiff filed its opposition brief to the defendant's objections. Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America v. Vilsack, No. CV-16-41-GF-BMM-JTL, D. Mont. Dec. 12, 2016).
Senate Has Now Approved Bill With HRA Relief. During the early evening hours of November 30, the U.S. House of Representatives passed on a 392-26 vote H.R. 34, and on December 7, the U.S. Senate voted 392-26 to approve the legislation. The bill is essentially a biomedical research and funding bill, but Section 18001 of the bill (on page 824) contains a provision that amends Obamacare to allow a "small employer" (defined as one with less than 50 full-time employees who does not offer a group health plan to any employees) to offer a health reimbursement arrangement (HRA) that the employer funds to reimburse employees for qualified medical expenses, including health insurance premiums. Under the provision, employees that are covered by such an HRA will generally not be eligible for subsidies (i.e., the premium assistance tax credit (PATC)) for health insurance purchased under an exchange during the months that they (and their family members) are covered by the employer’s HRA. That is the case for any month the employee is covered by an HRA if the HRA provides "affordable coverage." An HRA provides "affordable coverage" if the excess of the amount that would be paid by the employer as the premium for such month for self-only coverage under the second lowest cost silver plan offered in the relevant individual health insurance market, over 1/12 of the employee's permitted benefit (as defined in Sec. 9831(d)(c)) under the HRA does not exceed 1/12 of 9.5 percent of the employee’s household income. The maximum annual reimbursement that can be provided under an HRA is $4,950. That amount rises to $10,000 if the plan provides for the employee's family members. Those amounts are prorated for the months of coverage. Other requirements are that funding of the HRA is to be solely by employer contributions, with no salary reduction contributions. Also, an employee with such an HRA is to have health insurance coverage via a plan that is acceptable under Obamacare. The HRA is to be provided on the same terms to all eligible employees, but some employees can be excluded from being offered an HRA – employees lacking 90 days of employment; employees not age 25 or older; part time (less than 30 hours weekly) or seasonal employees; and non-resident aliens that have don’t have U.S. income. In addition, employers offering such HRAs will have to adhere to notification and reporting requirements. The employer has to give the employee notice within 90 days of the beginning of the tax year (or 90 days from the date the employee is eligible to participate). The notice is to include a statement of the amount that would be the employee's permitted benefit under the HRA for the year; a statement that the employee needs to provide information to a health insurance exchange if they apply to the exchange for advance payment of the PATC; and a statement that if the employee does not have minimum essential coverage for any month, the employee may be subject to the penalty imposed by I.R.C. Sec. 5000A for the month and that HRA reimbursements may be included in the employee's gross income. Failure to give the notice subject the employer to a penalty of $50/employee per incident (capped at $2,500 annually) unless the employer shows reasonable cause and no willful neglect. The provision will, effective for plan years beginning after December 31, 2016, deem such HRAs to no longer be a violation of Obamacare's market "reforms" that would subject the employer to a penalty as stated in IRS Notice 2013-54, I.R.B. 2013-40 (thereby triggering a$100/day penalty per affected person). "Large" employers would remain, however, subject to the Obamacare restrictions on HRAs. In addition, the provision retroactively extends the initial penalty relief provided to small businesses under Notice 2015-17, I.R.B. 2015-14, 845, to apply to any plan year beginning on or before December 31, 2016. In accordance with Rev. Rul. 61-146, 1961-2, CB 25, reimbursed medical expenses are excluded from the employee’s gross income, even if the employer pays the premiums directly to the insurer. The relief provided by Notice 2015-17 applies to any plan year beginning before 2017. That apparently means that the $100 daily penalty won't apply, but the law is unclear. Of course, all of this becomes irrelevant if Obamacare is repealed. However, lack of support in the Senate blocked Senator Grassley's bill from getting through.
Insecticide-Coated Seeds Exempt From EPA Regulation Under FIFRA. The plaintiff is a consortium of individuals and groups with concerns about the effect of pesticide-treated seeds on bees and other pollinators. The plaintiff claimed that the EPA failed to enforce the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) with respect to pesticide-treated seeds, claiming that seeds coated with neonicotinoids (a type of pesticide that distributes throughout the resultant plant and kills insects by direct contact and when they eat the plant). The plaintiff also claimed that the pesticide-treated seeds can release pesticidal “dust-off” that spreads the insecticide beyond the seeds themselves. The plaintiff claimed that the use of such seeds has a systematic and catastrophic impact on bees and the beekeeping industry in the U.S. The plaintiff claimed that the seeds were subject to FIFRA regulation which requires their registration before usage. The court disagreed, noting that the 1988 FIFRA exemption for “an article or substance that is treated with or that contains a pesticide to protect the article or substance itself if the pesticide is registered for such use” applied. In 2003, EPA published a document in which it said that such seeds were exempt from FIFRA regulation if the pesticide protection of the seed does not extend beyond the seed itself to offer pesticidal benefits or value attributable to the treated seed. Thus, when a treated seed is planted and the seed is treated with a registered pesticide, the seed itself is exempt from FIFRA. In addition, a 2013 EPA guidance document discussed pesticide-related bee deaths and the plaintiff claimed that the guidance document was a final action that needed to be supported by an exhaustive record and is reviewable under the Administrative Procedures Act (APA) and subject to the APA’s rulemaking requirements. The court disagreed. Anderson v. McCarthy, No. C16-00068 WHA, 2016 U.S. Dist. LEXIS 162124 (N.D. Cal. Nov. 21, 2016).
Health Reimbursement Arrangements for "Small Employers." During the early evening hours of November 30, the U.S. House of Representatives passed on a 392-26 vote H.R. 34. The bill is a essentially a biomedical research and funding bill, but Section 18001 of the bill (on page 824) contains a provision that amends Obamacare to allow a "small employer" (defined as one with less than 50 full-time employees who does not offer a group health plan to any employees) to offer a health reimbursement arrangement (HRA) that the employer funds to reimburse employees for qualified medical expenses, including health insurance premiums. Under the provision, employees that are covered by such an HRA will not be eligible for subsidies for health insurance purchased under an exchange during the months that they are covered by the employer’s health reimbursement arrangement. The maximum reimbursement that can be provided under an HRA is $4,950. That amount rises to $10,000 if the plan provides for the employee's family members. Other requirements are that funding of the HRA is to be solely by employer contributions, with no salary reduction contributions. Also, an employee with such an HRA is to have health insurance coverage via an plan that is acceptable under Obamacare. In addition, employers offering such HRAs will have to adhere to notification and reporting requirements. The provision will, effective for plan years beginning after December 31, 2016, deem such HRAs to no longer be a violation of Obamacare's market "reforms" that would subject the employer to a penalty. "Large" employers would remain, however, subject to the Obamacare restrictions on HRAs. In addition, the provision retroactively extends the initial penalty relief provided to small businesses under Notice 2015-17, I.R.B. 2015-14, 845, to apply to any plan year beginning on or before December 31, 2016. During the week of December 4, the U.S. Senate will take up H.R. 34 and is expected to pass it without any amendment. The President has already indicated that he will sign the bill.
Raisin Producer’s Takings Claim Survives Dismissal. The plaintiff, a California raisin producer, refused to participate in the USDA marketing order program for raisins which would have diverted a percentage of the plaintiff’s raisins into a “reserve pool” which USDA then sold in non-competing markets such as foreign countries. Funds from the sale of “reserve pool” raisins paid for the administrative costs of the program, with remaining funds each year (if any) returned to participants. In 2015, the U.S. Supreme Court determined that the marketing order program constituted an unconstitutional taking. In that case, Horne v. United States Department of Agriculture, 135 S. Ct. 2419 (2015), the plaintiff grew and packed raisins and refused to forfeit 47 percent of his crop in one year and 30 percent of his crop in another year to the USDA for the privilege of selling the balance of his crop not subject to the marketing Order implemented in 1949 that is based on the Agricultural Marketing Agreement Act of 1937 allowing the USDA to seize the specified percentages of his crop. The USDA fined the plaintiff $483,843.53 for the market value of the raisins he refused to give up, plus a $200,000 civil penalty for disobeying the marketing order. The plaintiff sued for a constitutional taking. Reversing the Ninth Circuit, the U.S. Supreme Court held that a physical taking was involved since title to the subject grapes had been taken by the government. As such, the plaintiff was entitled to "just compensation" under the Fifth Amendment. That amount was the market value of the amount of the grapes that the government seized. In the present case, the plaintiff claimed that it was required to turn over 10-15 percent of its raisin crop for crop years 2006-2009. The “reserve pool” for each of the raisin crops wasn’t closed out until 2010-2012. The crops were valued at $1,210-$1,343 per ton. The plaintiff claimed that it didn’t receive any money back in three of the four years at issue. The plaintiff sued for an unconstitutional taking and the defendant motioned for dismissal on the basis that the plaintiff’s claim is barred by the six-year statute of limitations. The defendant claimed that any takings claim ripened in mid-October of each crop year and that the plaintiff only had six years from each crop’s mid-October taking during which they could make a timely claim. Because the plaintiff didn’t file its claim until August 26, 2015, the defendant asserted that the only claim not barred by the statute of limitation would be for the 2009-2010 crop year. The court disagreed with the defendant, pointing out that the plaintiff was effectively barred from filing a takings claim until the U.S. Supreme Court’s decision in Horne. Only then did the plaintiff’s claims become legally defensible. Until that time, the court reasoned, the plaintiff did not have a reasonable belief that it had a legally defensible claim due to prior precedent. Thus, the court dismissed the defendant’s partial motion to dismiss the takings claim with respect to the 2007-2009 crop years. Lion Farms v. United States, No. 15-915, 2016 U.S. Claims LEXIS 1812 (Fed. Cl. Nov. 29, 2016).
Posted, November 21, 2016
California Proposition Involving Egg Production Safe From Challenge. The plaintiff, MO Attorney General, sued the defendant, CA Attorney General, seeking declaratory and injunctive relief, costs and fees, associated with blocking enforcement of CA's Proposition 2 and A.B. 1437 which will increase size of egg-laying hen enclosures and decrease flock densities for CA egg producers and egg producers in other states desiring to sell eggs in CA. A 2008 CA ballot initiative required all CA egg producers to produce eggs from laying hens in cages that allowed the hens to “lie down, stand up, fully extend its limbs, and turn around freely.” Because of the additional cost placed on CA egg producers which made their eggs non-competitive with eggs produced in other states not subject to such restrictions, CA passed a law in 2010 making it a crime to sell shelled eggs in CA (regardless of whether the eggs were produced in CA) that came from a laying hen that was confined in a cage not allowing the hen to “lie down, stand up, fully extend its limbs, and turn around freely.” The law was purportedly based on consumer health concerns, but it had the effect of regulating egg production in all states. The plaintiff noted that CA consumers bought one-third of all eggs produced in MO in 2013 and CA requirement will substantially increase cost of MO egg production if egg producers continue to sell eggs in CA, which will also make eggs too expensive to sell in other states. The plaintiff also noted that if MO producers choose to not participate in CA market, other markets will have surplus eggs and egg prices will fall which could force some producers out of business; suit claims that CA provision was an unconstitutional violation of the Commerce Clause by "conditioning the flow of goods across its state lines on the method of their production." In the alternative, the suit alleged federal preemption via 21 U.S.C. Sec. 1052(b) – the Federal Egg Products Inspection Act. The suit was filed after the Farm Bill conferees rejected House Farm Bill provision that would have barred the conduct that CA has engaged in. The trial court held that the plaintiff lacked standing for failure to articulate an interest separate and apart from the interests of private parties, and that the claim that egg price effect on consumers were remote and speculative. The trial court also determined that the CA law was not discriminatory. On further review, the appellate court affirmed, but remanded for dismissal without prejudice. Missouri v. Harris, No. 2:14-cv-00341-KJM-KJN, 2014 U.S. Dist. LEIXS 76305 (E.D. Ca. Jun. 2, 2014), aff’d., No. 14-17111, 2016 U.S. App. LEXIS 20613 (9th Cir. Nov. 17, 2016).
County Ban on GMO Crops Struck Down. In the fall of 2014, the defendant county adopted an ordinance that banned the cultivation and testing of genetically modified engineered organisms (GMOs). In an earlier action, the court entered an injunction preventing enforcement of the ordinance until the court decided the merits of a challenge to the ordinance. The trial court invalidated the ordinance as unenforceable as being expressly preempted by the Plant Protection Act (PPA) (7 U.S.C. §7756(b)) and the regulations thereunder to the extent that it bans genetically engineered plants in the United States. The ordinance, the court held, also exceeded the authority that the state had delegated to the county and that the fines specified in the ordinance were excessive. On appeal, the court affirmed. The appellate court held that the ordinance was expressly preempted by the PPA to the extent that it banned genetically engineered plants that the Animal and Plant Health Inspection Service (APHIS) regulates as plant pests, but is not impliedly preempted by the PPA in its application to genetically engineered crops that APHIS has deregulated. However, with respect to deregulated genetically engineered crops, the appellate court held that the ordinance was impliedly preempted by Hawaii’s comprehensive state statutory scheme for the regulation of potentially harmful plants. Robert Ito Farm, Inc., et al. v. County of Maui, et al., No. 14-00511, 2015 U.S. Dist. LEXIS 84709 (D. Haw. Jun. 30, 2015), aff’d., Atay v. County of Maui, No. 15-16466, 2016 U.S. App. LEXIS 20670 (9th Cir. Nov. 18, 2016).
Another Hawaii Ordinance Banning GMOs Struck Down. Plaintiff seed companies filed an action against the County of Kauai, seeking to invalidate and enjoin enforcement of Kauai County Code § 22-22 (2013) (Ordinance 960), relating to pesticides and genetically modified organisms (GMO). Generally, the provision (which was originally set to take effect August 16, 2014, but was delayed until October 1, 2014) required commercial agricultural entities to: issue weekly and annual reports regarding their use of "restricted use" pesticides and their possession of GMOs and to establish pesticide buffer zones between crops to which “restricted use” pesticides were applied and surrounding properties. The plaintiffs argued that the law was preempted by state and federal law and that it imposed burdensome operational restrictions violating their due process and equal protection rights. They also alleged that the buffer zone requirement would result in “takings” without just compensation. On motions for summary judgment, the court ruled that Ordinance 960 was preempted by state law and was, therefore, invalid. The court stated that its decision “in no way diminishes the health and environmental concerns of the people of Kauai… [but] simply recognizes that the State of Hawaii has established a comprehensive framework for addressing the application of restricted use pesticides and the planting of GMO crops, which presently precludes local regulation by the County.” The court did not find that the Ordinance was preempted by federal law. It also did not need to rule on the constitutional claims since state preemption invalidated the law. On appeal, the appellate court affirmed and specifically noted that the GMO reporting provision of the law was impliedly preempted by state law. Syngenta Seeds v. County of Kauai, No. 14-00014 BMK, 2014 U.S. Dist. LEXIS 117820 (D. Haw. Aug. 23, 2014), aff’d., No. 14-16833, 2016 U.S. App. LEXIS 20689 (9th Cir. Nov. 18, 2016).
Beef Checkoff Case Continues With Procedural Moves. In 2011, the Office of Inspector General for the USDA initiated an audit of the Beef Checkoff Program, released it in 2013, withdrew it, and later re-released it in 2014. The checkoff program bars the producer-derived funds from being used for policy activities. The initial audit said that the National Cattleman Beef Association (NCBA) was in full compliance, but the re-released audit removed that statement. Before the OIG audit, there was an independent audit that disclosed problems with the use of checkoff funds by NCBA. In 2013, a livestock market advocacy group (assisted by the Humane Society of the U.S.) filed a Freedom of Information Act (FOIA) request with respect to OIG the audit reports. After that filing, the OIG withdrew the initial audit for further consideration. In 2014, the same group filed a complaint for injunctive relief against the OIG requesting that the OIG make a final determination and release all required records related to the audits. The advocacy group sought the information to determine if there is a connection between the drop in cattle-producer numbers and the price of calves and losses, with the use of checkoff funds. The NCBA claims that the audit activities will weaken the checkoff and asserts that the audits have found the NCBA to be in full compliance with the checkoff rules. In 2016, the NCBA sought to intervene in the injunction case, and in late September the advocacy group filed its response. NCBA sought intervention because some of the information in the audit reports involved confidential business information unrelated to the checkoff. It has been reported that there are approximately 9.300 pages of financial data involving the beef checkoff. The case is filed in the U.S. District Court for the District of Columbia and a ruling is soon expected on the NCBA’s request for intervention.
Final Rules Finalized on Drones - Unmanned Aircraft Systems (UASs). The Federal Aviation Administration (FAA) issued a Final Rule on UASs (“drones”) on June 21, 2016. The Final Rule largely follows the Notice of Proposed Rulemaking issued in early 2015 (80 Fed. Reg. 9544 (Feb. 23, 2015)) and allows for greater commercial operation of drones in the National Airspace System. At its core, the Final Rule allows for increased routine commercial operation of drones which prior regulations required commercial users of drones to make application to the FAA for permission to use drones - applications the FAA would review on a case-by-case basis. The Final Rule (FAA-2015-0150 at 10 (2016)) adds Part 107 to Title 14 of the Code of Federal Regulations and applies to unmanned “aircraft” that weigh less than 55 pounds (that are not model aircraft and weigh more than 0.5 pounds). The Final Rule became effective on August 29, 2016.
The following are the highlights of the Final Rule:
• The drone must be registered with the FAA. Registration is primarily done online and the registrant must be at least 13 years of age. A $5.00 fee is required at the time of registration and the make and model of the drone must be provided and the drone must be labeled with the registration number. Registration lasts for three years;
• Drones may operate during daylight or “civil twilight” (30 minutes before sunrise and 30 minutes after sunset), and there must be at least three miles of visibility;
• Drones cannot be operated more than 400 feet above ground and groundspeed must be kept at 100 miles per hour or less. Also, the drone must be operated out-of-doors, and cannot be operated over other persons who are not involved in the drone’s operation. In addition, the drone operator must yield the right-of-way so as to avoid accidents with other airspace users;
• Drones must stay within the vision (without binoculars) of either the operator or an observer that is in communication with the pilot;
• The drone operator must obtain FAA air traffic control permission before flying the drone in controlled airspace;
• The drone operator must be at least 16 years of age, communicate in English, and have a “remote pilot airman certificate” (obtained either by passing an aeronautical knowledge test (initially and then every two years) or by having a pilot certificate, completing a flight review in the prior two years and an online FAA training course (at a cost of approximately $150) for small drones) containing, at a minimum, a small drone rating. The certificate will last for two years. The drone can be flown by the certified operator or a person under the certified operator’s direct supervision;
• The operator must conduct a “pre-flight check” of the drone’s safety and make it available for FAA inspection;
• The drone can be operated from a moving vehicle located in an area that is sparsely populated, but it cannot be operated from a moving aircraft;
• If the drone is used in agricultural operations to dispense agricultural chemicals or fertilizer, the drone must comply with the “agricultural aircraft operation” regulations of 14 C.F.R. Part 137;
• The operator must report to the FAA within 10 days any “operation that results in at least serious injury, loss of consciousness, or property damage of at least $500;
• A small drone operator can apply for a waiver from the operational rules, but must submit with the waiver application documentation that the safe operation of the drone can be maintained if the waiver were granted; and
• Violation of the regulations can result in civil fines of up to $27,500. Criminal penalties of up to $250,000 can apply if destruction of property occurs or the drone causes a threat to public safety.
OSHA Memo Constituted Safety Standard Subject to Notice and Comment Requirements. In April of 2013 an explosion at a Texas fertilizer company killed 15 people and injured many others. The plant stored large quantities of anhydrous ammonia for distribution as fertilizer to farmers. In 1992, the Occupational Safety and Health Administration (OSHA) promulgated a Process Safety Management (PSM) Standard (Standard) designed to protect employees in industries having processes that involve highly hazardous chemicals. The Standard exempted “[r]etail facilities” from its requirements. Such facilities were defined as “an establishment…at which more than half of the income is obtained from direct sales to end users.” After the explosion, President Obama issued an executive order directing changes be made to the Standard. OSHA, in 2015, issued a Memo rescinding the 50 percent test and restricting the exemption to retail facilities that are “organized to sell merchandise in small quantities to the general public. The Memo had the effect of subjecting farm supply establishments to the Standard’s requirements for managing highly hazardous chemicals. The plaintiffs, an association of agricultural retailers, filed petitions for review challenging the narrowed definition of “retail facilities on the basis that the OSHA Act required OSHA to follow notice-and-comment procedures in changing the definition. The court agreed because the definitional change amounted to a standard rather than simply an interpretation of an existing standard. The court determined that the Memo was to expand the substantive reach of the Standard by narrowing its exemption and subjecting many more businesses to additional safety standards in order to address a “particular significant risk.” Accordingly, the court had jurisdiction to review OSHA’s action and the Memo was subject to public notice-and-comment requirements of the Administrative Procedure Act. Consequently, the court vacated the Memo. Agricultural Retailers Association v United States Department of Labor, et al., No. 15-1326, 2016 U.S. App. LEXIS 17367 (D.C. Cir. Sept. 23, 2016).
Feeding and Caring for Animals is “Agriculture” for FLSA Purposes. The plaintiff worked at a small farm, originally commuting to the farm from his home, where he assisted the resident caretaker. When the resident caretaker died, the plaintiff moved to the farm and assumed full responsibility for caring for the animals and grounds. At the farm were several retired racehorses, a mule, a donkey, two llamas, two cows, about 20 chickens, ten ducks, twenty pigeons and a dog. Also, on the farm was the deceased caretaker’s 1,000-pound pig. The plaintiff fed the animals twice daily, took them from the stable to pasture, sprayed the horses with fly spray and groomed them, and also check on the horses at night. The plaintiff also drove the farm truck to buy food and supplies for the all of the livestock. The plaintiff was also responsible for the animals’ medical care by lining up veterinarians. On a daily basis, the plaintiff called the owner to report on the animals. The plaintiff also maintained the farm grounds by shoveling snow, mowing grass, trimming trees, and controlling weeds. The plaintiff had some assistance in these tasks, but remained on the farm on a constant basis to care for the animals. After the owner died, the plaintiff filed a claim against the owner’s estate for overtime pay under the Fair Labor Standards Act (FLSA). The FLSA requires overtime pay for works hours exceeding 40/week, but a worker who works in “agriculture” for a small agricultural operation is exempt from the overtime requirements. The FLSA defines “agriculture” to include “farming in all its branches and among other things includes…the raising of livestock, bees, fur-bearing animals, or poultry, and any practice…performed on a farm as an incident to or in conjunction with such farming operation.” The court held that the plaintiff was engaged in the primary agricultural practice of raising livestock, which the FLSA defines as “cattle, sheep, swine, horses, mules, donkeys, and goats.” The court also noted that the FLSA regulations define “raising” of livestock as “the breeding, fattening, feeding, and general care of livestock.” The court also held that the balance of the plaintiff’s work on the farm that did not involve feeding and general care of the animals also qualified for the agriculture exemption because they were performed on the farm and were incidental to the farming activities. Chhum v. Anstett, No. 3:15-cv-00900 (JAM), 2016 U.S. Dist. LEXIS 104463 (D. Conn. Aug. 9, 2016).
Farm Groups Have Standing To Bring “Reverse” FOIA Suit. In 2008, the Government Accounting Office (GAO) issued a report stating that the Environmental Protection Agency (EPA) had inconsistent and inaccurate information about confined animal feeding operations (CAFOs), and recommended that EPA compile a national inventory of CAFO’s with NPDES permits. Also, as a result of a settlement reached with environmental activist groups, the EPA agreed to propose a rule requiring all CAFOs to submit information to the EPA as to whether an operation had an NPDES permit. The information required to be submitted had to provide contact information of the owner, the location of the CAFO production area, and whether a permit had been applied for. Upon objection by industry groups, the proposed rule was withdrawn and EPA decided to collect the information from federal, state and local government sources. Three environmental activist groups submitted Freedom of Information Act (FOIA) requests to obtain the EPA’s records containing CAFO information. In response, the EPA released information gathered from 28 states and from the EPA’s data systems. The released information contained the CAFO owner’s name, mailing address, email address and primary telephone number. When ag groups were notified of the release, the EPA agreed to look into whether it had disclosed information that was not publicly available that could trigger FOIA privacy concerns. The EPA determined that the records released obtained from 19 states were not eligible for exemption from FOIA under 5 U.S.C. §552(b)(6) because the information was publicly available over the internet. The EPA obtained additional information about CAFOs, and various environmental activist groups filed a FOIA request. Some of the requested information include the CAFO owner’s legal name and mailing address, email address, and telephone number. EPA released information gathered from 28 states, and from its own data systems. The plaintiffs, two national ag groups, sued seeking an order to bar the EPA from making additional disclosures of personal information already collected, and recalling the personal information already released. The plaintiffs claimed that the EPA abused its discretion and acted arbitrarily and capriciously by releasing the information. Several environmental activist groups intervened in support of the disclosure. The trial court granted summary judgment for the EPA on the basis that the plaintiff lacked standing. On appeal, the court reversed, finding that the trial court improperly addressed the merits of the plaintiffs’ claims rather than the standing issue, and noted that the claims were still live because the EPA had proposed to release more information from seven states (including Minnesota). The appellate court noted that an individual’s interest in controlling the dissemination of information regarding personal matters does not disappear simply because the information may be publicly available in some form. Here, the EPA made it much easier for the activist groups to identify and target particular CAFOs. Accordingly, the appellate court held that the disclosure would invade a substantial privacy interest of the CAFO owners and further little public interest recognizable under FOIA. As such, the records were exempt from public disclosure, and the EPA had abused its discretion in determining that the exemption from mandatory FOIA disclosure did not apply. The court remanded on the issue of injunctive relief to bar the EPA from disclosing the additional records. American Farm Bureau Federation v. United States Environmental Protection Agency, No. 15-1234, 2016 U.S. App. LEXIS 16623 (8th Cir. Sept. 9, 2016).
Rock Island Clean Line Not a Utility – Decision To Grant Certificate of Public Convenience and Necessity Reversed. The plaintiff is a subsidiary of a transmission energy development company and also owns four other companies that are developing long-distance transmission projects across several states. It is also owned partly by a company that owns and operates more than 8,600 miles of high voltage transmission facilities in the U.S. The plaintiff was formed to construct and manage a high-voltage line running from northwest Iowa to just southwest of the Chicago area, with the purpose of connecting wind generation facilities in northwest Iowa, South Dakota, Nebraska and Minnesota with electricity markets to the east. The plaintiff filed an application with the Illinois Commerce Commission (ICC) for a certificate of public convenience and necessity under IL law to allow it to operate as a transmission-only public utility in IL and to construct, operate and maintain an electric transmission line for wind energy, and to condemn private property for the purpose of building its line. The application set forth a proposed route, but did not seek the right of eminent domain. The plaintiff claimed that its project would deliver 15 million megawatt-hours of electricity annually. The plaintiff asserted it was a “merchant developer” and not a traditional utility with cost-based rates, and claimed that IL residents would not pay for the line via rate assessments. The plaintiff anticipated that the project would pay for itself through revenues received from anticipated purchase agreements with wind generators – “anchor tenants” in northwest Iowa, and then attract lenders using the “anchor tenants” as collateral. However, the plaintiff’s financing plan did not identify any current anchor tenants or lenders. Several parties intervened in the application process asserting that the plaintiff was not a public utility because it did not own any infrastructure for electric transmission lines in IL, and argued that only a utility can obtain a certificate to construct facilities. At the public hearing, the testified that the “need” for the transmission line was driven by legislation mandating utilities to replace energy generated by fossil fuels with renewable energy, 75 percent of which must come from wind. The plaintiff admitted that its projections were based on predictions that did not yet exist – there are no transmission customers until the project is built. The plaintiff testified that was about $1 billion short of funds anticipated to be required to build the project. An expert economist in federal electricity regulation and policy testified that the project’s impact was not known because the plaintiff had not addressed the costs of negative land use impacts or the impact of connecting generators, and that the financial aspects of the project left open the possibility of allocating future transmission costs of unknown amounts to electricity customers in IL. Ultimately, the ICC granted the plaintiff a certificate of public convenience and necessity to transact business as a transmission public utility and to operate a transmission line. The ICC determined that the plaintiff qualified as a public utility and satisfied the statutory “public use” requirement. On review, the court reversed on the basis that the plaintiff did not “own, control, operate, or manage utility assets directly or indirectly, within the state.” Therefore, it didn’t also offer those assets for public use without discrimination – a second statutory requirement under the IL Public Utilities Act. Importantly, the court determined that the primary beneficiary of the project would be wind generator companies operating as the “anchor tenants” in northwest Iowa, not those in Illinois. While the court noted that an applicant for a certificate need not be a public utility at the time an application for certification is filed, jurisdiction was not properly conferred based on the ICC’s decision that the plaintiff was a public utility. Illinois Landowners Alliance v. Illinois Commerce Commission, No. 3-15-0099, 2016 Ill. App. LEXIS 535 (Ill. Ct. App. Aug. 10, 2016).
Activist Group Lacks Standing to Challenge Hog Farm Approval. A hog farming operation filed a “Notice of Intent to Construct” a 3,384 animal unit hog facility (approximately 17,000 head of hogs) with the defendant. The defendant held a public informational meeting regarding the proposal at which some of the plaintiff’s members testified and determined that the proposed hog farm “more likely than not” satisfied the state (IL) Livestock Management Facilities Act (Livestock Act). The plaintiff sought review of the decision, but the trial court dismissed the action on the basis that the plaintiff lacked standing to seek review of the Defendant’s decision because the plaintiff was not a party or record in the administrative proceedings. On appeal, the plaintiff claimed that standing only required a showing of injury a legally cognizable interest and that being a party to the administrative proceedings was not required to have standing. The plaintiff claimed that some of its members lived, worked and recreated in the vicinity of the proposed hog farm. The appellate court affirmed dismissal on the basis that the proposal complied with the Livestock Act, and that the only resident within the “occupied residence” setback distance of 1,760 feet waived the setback distance. While the plaintiff had members living in the “populated area” setback distance, the appellate court noted that there were insufficient persons living within the “populated area” to confer standing by statute. Also, the court noted that the informational meeting was held in accordance with the Livestock Act which did not involve legal relations between the parties. A concurring justice to point out that is a permit were denied that the hog farm could seek administrative review, but if the permit were erroneously granted, only the people within the 1,760 setback distance could object even though other might be negatively impacted. Save Our Sandy v. Department of Agriculture, No. 4-15-0582, 2016 Ill. App. LEXIS 421 (Ill. Ct. App. Jun. 30, 2016).
Final Rule Issued on Unmanned Aircraft Systems (UASs). The Federal Aviation Administration (FAA) issued a Final Rule on UASs (“drones”) on June 21, 2016. The Final Rule largely follows the Notice of Proposed Rulemaking issued in early 2015 (80 Fed. Reg. 9544 (Feb. 23, 2015) and allows for greater commercial operation of drones in the National Airspace System. At its core, the Final Rule allows for increased routine commercial operation of drones which prior regulations required commercial users of drones to make application to the FAA for permission to use drones which applications the FAA would review on a case-by-case basis. The Final Rule (FAA-2015-0150 at 10 (2016)) adds Part 107 to Title 14 of the Code of Federal Regulations and applies to unmanned “aircraft” that weighs less than 55 pounds (that are not model aircraft). The following are the highlights of the Final Rule:
• The drone must be registered with the FAA;
• Drones may operate during daylight or “civil twilight” (30 minutes before sunrise and 30 minutes after sunset);
• Drones cannot be operated more than 400-feet above ground and groundspeed must be kept at 100 miles per hour or less;
• Drones must stay within the vision of either the operator or an observer;
• The drone operator must be at least 16 years of age, communicate in English, and have a “remote pilot airman certificate” (obtained by either passing either an aeronautical knowledge test (initially and then every two years) or by having a pilot certificate, completing a flight review and an FAA training course for small drones) containing, at a minimum, a small drone rating;
• The operator must conduct a “pre-flight check” of the drone and make it available for FAA inspection;
• The operator must report to the FAA within 10 days any “operation that results in at least serious injury, loss of consciousness, or property damage of at least $500; and
• A small drone operator can apply for a waiver from the operational rules, but must submit with the waiver application documentation that the safe operation of the drone can be maintained if the waiver were granted.
The FAA homepage containing an FAQ on the new rule can be found here: https://www.faa.gov/uas/faqs/
Certificate for Construction of Wind Power Station Approved Over Biting Dissent. A wind energy company filed an application with the state (OH) Power Siting Board (Board) for a 56-aerogenerator development on 13,500 acres. The application was challenged by a non-profit citizen group as well as the county where the development would occur and three local townships. The Board approved, in late 2012, a construction certificate with 72 conditions and denied a rehearing and the challengers appealed on four grounds – (1) blade throws and setbacks; (2) wind-turbine noise; (3) requirements under the state’s public interest, convenience and necessity law; and (4) procedural and evidence-related arguments. On the first issue, the challengers claimed that the Board did not properly consider a blade throw from another wind power station where the largest piece of blade traveled 764 feet from the failed generator. However, the court noted that state law had been amended since that event to prescribe greater setback distances and that those distances were sufficient to deal with the blade throw issue. The court also deferred to the judgment of the Board on the setbacks and the consideration of the evidence allowed and offered. The court also deferred to the Board’s judgment on the noise issue and claimed that “…exposure to turbine noise has not been scientifically demonstrated to harm humans.” On the public interest claim, the court claimed that the challengers asserted that the repealed mandated requirement that a certain portion of the state’s electricity come from renewable sources such as wind eliminated the public interest of the wind power station. However, the court upheld the Board’s determination that there were other ways the wind power station could satisfy the public interest such as “benefitting the environment” and the availability of electricity to Ohio consumers.” On the procedural challenges, the court determined that they were not significant enough to send the matter back to the Board. The dissent noted that this case was the first time the court had considered setbacks since the blade throw event, and that the case was the first time the court had been presented with the correct way to account for noise issues. On the setback issue, the dissent noted that the setback requirements were clearly insufficient to accommodate blade throws. The dissent also noted that all of the experts involved in the case agreed that an unsuitable method was used to calculate background noise. As such, the dissent pointed out that the granting of the certificate was “unreasonable, unconscionable and unlawful.” In re Application of Champaign Wind, L.L.C., No. 2013-1874, 2016 Ohio LEXIS 929 (Ohio Sup. Ct. Apr. 13, 2016).
Montana Revenue Department Overstepped Its Authority With Rules Governing Ag Operations. The taxpayer had a 1.029-acre property that had a dwelling and a 3-year old vineyard that was planted in 2011. In 2012 the defendant, state Department of Revenue, granted the property provisional ag status for tax purposes. Under state (MT) law at the time, the taxpayer had five years for the vines to mature and produce at least $1,500 of annual revenue to maintain the ag status for the property. The provisional ag status was renewed in 2013 and 2014. Later in 2014, the plaintiff promulgated new regulations that required a taxpayer seeking ag status for a tract to have a tract of at least 2 acres (if a residence present). As a result, the defendant, denied the provisional ag status in 2015. The State Tax Appeal Board held that the new regulation not only clarified the definition of “bona fide agricultural land,” but also added a new minimum acreage requirement. As such, the regulation (Mont. Adm. Code §42.20.601(7) and .683(16)(a) were invalid because the exceeded the legislature’s grant of authority to the defendant because the statute only set a qualification of $1,500 annual revenue from agricultural activity on the property. The appeal board also noted that the rule was arbitrary because it didn’t account for modern practices of grape-growing that used non-mechanized growing techniques that could allow small operations to generate much more than the $1,500 annual revenue threshold. Goodspeed v. Montana Department of Revenue, No. PT-2015-3 (Mont. Tax App. Bd. Mar. 22, 2016).
Transfer of Lost Dog to New Owners Does Not Sever Original Owners’ Rights. The plaintiffs, a brother and sister, owned a German Shepherd dog. They bought him for $2,500 and spent $10,000 for dog training. They owned him from a puppy and owned him as a family pet for seven years. On New Year’s Day, 2013, the dog escaped through an open garage door. The plaintiffs searched for the dog, posted signs, offered a reward, and made website inquiries. The defendant, the city animal control department, found the dog on January 2 running at large without tags. They listed him on a website as a Belgian Malinois rather than a German Shepherd. As a result, the plaintiffs did not find him on the website because they searched for German Shepherd dogs. The defendant also incorrectly designated the dog as “owner surrender.” The dog tested positive for heartworms, was not considered healthy, and could not be sold. The dog was scheduled to be euthanized on January 7, but gave the dog to a dog rescue volunteer instead. Two days later, the plaintiff sister saw a message on a lost and found website stating that her dog might be at the defendant’s facility. She went to the facility and was told the dog had been given away. The plaintiff sister visited the party with the dog who refused to give up the dog. The plaintiffs sued for conversion, et al., seeking an injunction ordering the dog’s return. The trial court agreed and ordered the dog returned and awarded costs to the plaintiffs. The court of appeals reversed, and the plaintiffs appealed. On further review, the state Supreme Court reversed the court of appeals. The Court noted that the record did not support any notion that the plaintiffs had abandoned the dog, and there is no statutory or common law support for the notion that the plaintiffs’ property rights in the dog were lost merely because the dog could not be found for a few days. Applicable ordinances indicated that the defendant did not intend to transfer ownership of an animal while at the facility. Instead, if title passes, it passes to the county. Also, one ordinance only allowed dogs with tags to be euthanized. In addition, the court noted that the ordinances should be construed to prohibit a forfeiture of property rights. Lira v. Greater Houston German Shepherd Dog Rescue, Inc., No. 14-0964, 2016 Tex. LEXIS 231 (Tex. Sup. Ct. Apr. 1, 2016).
No Trademark Violation Where Product Lines Not Similar. The plaintiff manufactures and sells fishing tackle that he initially started to sell in an area of Wisconsin called Land O’ Lakes. The plaintiff’s business grew to where it was selling fishing tackle in numerous states. In 2000, the plaintiff registered “LAND O’ LAKES” as the trademark of his fishing tackle. However, an agricultural cooperative, “LAND O’ LAKES” also has a trademark on the same name. The cooperative wrote the plaintiff to inform him that he was infringing on the cooperative’s trademark and that he would need a license to continue to use the name for his fishing tackle. The plaintiff refused and the cooperative brought a proceeding in the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office opposing the plaintiff’s registration of the trademark. That proceeding was suspended awaiting the outcome of this case. The trial court dismissed the dilution claim because the cooperative had waited too long to make the claim and the appellate court agreed. Stating further that the cooperative would not win the case on the merits. The court noted that the cooperative’s name was derived from the state of Minnesota’s catch-phrase and, as such, the cooperative could not claim it was the sole lawful user of the phrase for all products. The court also noted that the product line of fishing tackle was completely unlike dairy products that the cooperative sold and that neither business line of products would be impacted by sales of the other company. The court dismissed the case. Hugunin v. Land O’ Lakes Tackle Co., No. 15-2815, 2016 U.S. App. LEXIS 3779 (7th Cir. Mar. 1, 2016).
Court Says That Rancher’s Water Right on Federal Land Did Not Mean Rancher’s Cattle Could Drink. The defendant, the estate of a deceased rancher, held a water right to water on federal grazing land in Nevada. The federal government sued the rancher for trespass, but the trial court held that the water rights created an easement by necessity allowing the cattle to graze the federal land without a permit and, thereby, created a defense to the trespass claim. The court also determined that Bureau of Land Management (BLM) personnel violated the rancher’s Due Process rights in their investigation and denial of grazing permits and did so in a contemptuous manner. On appeal, the court reversed. The court in its opinion (composed by two Clinton appointees and one Obama appointee) reversed and remanded the trespass issue for a determination of damages to a different judge than authored the trial court opinion (who was appointed by G.W. Bush), and also reversed the contempt ruling against the BLM officials. The trial court determined that the rancher had a property right in a grazing permit for substantive and procedural Due Process purposes that could not be deprived without the BLM officials following procedural safeguards, and certain adverse actions could not be taken against a permittee irrespective of the procedures taken. However, the appellate court determined that the Taylor Grazing Act revoked prior federal practices and policies that allowed “indiscriminate” grazing on federal rangeland. In addition, the court determined that the Congress had later revoked any implied license to graze national forest lands. The court determined that the Taylor Grazing Act conferred only a benefit of being first in line for holders of water rights when a grazing permit is offered, but that the TGA did not change the requirement that a rancher obtain a grazing permit before grazing cattle on federal land. Thus, the rancher was liable for trespass. On the rancher’s counterclaim that the government’s filing of the trespass claim in 2011 was a final agency action that could be appealed, the court disagreed. The end result of the court’s opinion is that the rancher had a water right to the water on federal land but that his cattle had no right to access that water. United States v. Estate of Hage, 810 F.3d 712 (9th Cir. 2016).
USDA Denial of Rulemaking Petition is Reviewable. The plaintiff, an animal activist group, filed a petition with the defendant in 2011 requesting that the defendant label foie gras (duck liver) to bear a warning label that stated, “NOTICE: Foie gras products are derived from diseased birds.” The plaintiff claimed that the Administrative Procedure Act (APA) required the defendant to act on the petition within a reasonable time and that the defendant had violated the APA by not responding for more than four years before denying the petition. The plaintiff claimed that the denial was arbitrary, capricious and an abuse of discretion. The trial court dismisses the case for lack of subject-matter jurisdiction. On appeal, the court reversed. The court determined that while agency actions not to take enforcement action are within an exception to judicial review, an agency decision not to initiate rulemaking is presumed to be reviewable and that the trial court erred in determining that the defendant’s denial of the plaintiff’s petition was the same as an agency decision not to take an enforcement action. The court reversed the trial court and remanded the case for an evaluation of various standing arguments that were not considered below. Animal Legal Defense Fund v United States Department of Agriculture, No. 13-55868, 2015 U.S. App. LEXIS 21182 (9th Cir. Dec. 7, 2015).
Worker Was Ranch-Hand Rather Than Sheepherder Under FLSA. The plaintiff, a citizen of Peru, was hired by the defendant as a sheepherder under an H-2A visa. The Fair Labor Standards Act (FLSA) set the minimum wage for a sheepherder at the time at $750/month plus food and lodging, and the employer must pay for all related visa fees and all related travel expenses and recruitment costs. Under the FLSA and H-2A procedures, a sheepherder works around the clock caring for flocks in remote grazing locations and also does other related farm work on an incidental basis. Basically, a sheepherder is on-call 24-hours/day. However, the plaintiff claimed that the higher monthly wage for a ranch hand should apply to him because he did not work in a remote location and worked regular hours that were monitored by the defendant’s employees. The trial court granted summary judgment for the defendant, and the plaintiff appealed. The appellate court reversed. The record showed that the plaintiff did not work in a remote location, but in the immediate vicinity of the defendant’s headquarters. The animals he worked with were not grazing animals. The court also determined that the plaintiff worked a normal workday schedule of 8-10 hours rather than around that clock as a sheepherder would work. The court also determined that the plaintiff performed more than mere incidental work beyond sheepherding. Thus, the plaintiff did not qualify as a H-2A sheepherder, but was a ranch hand entitled to the FLSA’s minimum wage requirement. Mencia v. Allred, d/b/a Allred Land & Livestock, No. 14-4047, 2015 U.S. App. LEXIS 21609 (10th Cir. Dec. 14, 2015).
Court Says Plaintiffs Lacked Standing To Challenge Poultry Inspection Rules. The defendant finalized new poultry inspection rules the became effective in 2014, and the plaintiffs, a food safety activist group and an individual, claimed that the new rules made poultry products less safe and threatened the health and safety of consumers. The trial court dismissed the case for lack of standing and the appellate court affirmed. The appellate court determined that the plaintiffs’ complaint did not plausibly allege that the New Poultry Inspection System (NPIS) that the rules established substantially increased the risk of foodborne illness as compared to prior inspection methods, and that mere allegations that consumers would incur costs to avoid NPIS inspected poultry were insufficient to confer standing. Thus, only a non-particularized, abstract injury was alleged. Food & Water Watch, Inc., et al. v. United States Department of Agriculture, No. 15-5037, 2015 U.S. App. LEXIS (D.C. Cir. Dec. 22, 2015), aff’g., 79 F. Sup. 3d 174 (D. D.C. 2015).
Bobcats Are Not Dangerous Wild Animals Under State Statute Barring Licensure for Ownership. The plaintiff has owned a bobcat since 2003 and has always received from the defendant a non-commercial propagating license to allow ownership of the bobcat. In 2012, the state (OH) legislature enacted legislation regulating the possession of wild animals that barred the licensure of any “dangerous” wild animal. Based on the legislation, the defendant refused to issue a license for the bobcat on the basis that a bobcat was of the genus of “lynx” that was listed in the statute as a dangerous wild animal. On review, the trial court reversed the defendant’s order on the basis that the legislature used common names for animals listed as “dangerous wild animals” and that the term “lynx” did not include the lynx genus. On appeal, the court affirmed, noting that nowhere in the statute did the legislature identify an animal by using its scientific genus, but rather used common names and “bobcat” was not listed. The appellate court also noted testimony from the chair of the task force that submitted recommendations to the legislature as to which animals to include and that bobcats were not recommended to be listed. Federer v. Ohio Department of Natural Resources, No. 15AP-104, 2015 Ohio App. LEXIS 5181 (Ohio Ct. App. Dec. 22, 2015).
Claim That Farm Flooding Caused By Improperly Constructed Railroad Embankment Preempted. The plaintiff’s farm was flooded by, what the plaintiff claimed, was a defectively constructed railroad embankment that blocked water flow. The embankment bisected the plaintiff’s farm. Over the years, as the railroad increased the height of the embankment to stop water from flowing over the tracks, additional drainage capacity was not provided. In 2011, the embankment was breached, resulting in significant topsoil loss to the plaintiff’s farmland. The plaintiff sued in state court based various tort theories. The state court stayed the litigation pending a determination by the defendant whether federal law preempted the claims. The defendant determined that the claims were largely preempted except for an alleged violation of federal regulations under the Federal Railroad Safety Act (FRSA). The defendant determined that state courts have no jurisdiction over matters that the defendant directly regulates and that the claims involved how rail transportation was managed or governed, which the defendant determined. However, any claims related to FSRA regulations applicable to drainage under the tracks were not preempted. On appeal, the court affirmed. The court determined that the plaintiff’s state law claims would unreasonably burden or interfere with rail transportation based on the evidence before the Board. Tubbs v. Surface Transportation Board, et al., No. 14-3898, 2015 U.S. App. LEXIS 22686 (8th Cir. Dec. 28, 2015).
Regulatory Agencies Cannot Be Sued For Violating CWA Permitting Procedures. The plaintiffs sued the defendants due to algae in the local water supply that created unsafe tap water for three days. At the crux of the case was the plaintiffs’ challenge to a state (OH) law that transferred permitting of confined animal feeding operations (CAFOs) under the NPDES permit program from the state EPA to the state Dept. of Agriculture, subject to federal EPA approval. The plaintiffs claimed that the OH Dept. of Agriculture was making most of the permitting decisions for several years without the federal EPA approving the transfer of decision making as the CWA required, and that such permitting decisions were invalid as a result. The trial court dismissed the case for lack of subject matter jurisdiction. The appellate court affirmed on the basis that the CWA does not allow suits to be filed against regulators for regulatory functions. Askins v. Ohio Department of Agriculture, et al., No. 15-3147, 2016 U.S. App. LEXIS 57 (6th Cir. Jan. 6, 2016).
Court Finds Private Right of Action for Mislabeled Organic Products. The defendant is a large herb grower that became the subject of a class action accusing the defendant of mixing organic and conventionally grown herbs in the same package and selling the package at a premium as "fresh organic." The class sued under state (CA) unfair competition and false advertising laws. The trial court held that the class action was preempted by federal law governing organic labeling. On appeal, the CA Supreme Court reversed. The court noted that the federal Organic Foods Act displaced state law concerning organic standards and thereby created a federal definition of "organic" and created a federal organic certification procedure. The court, however, determined that federal law did not either explicitly or implicitly preempt state rules for mislabeling. Likewise, the court held that state consumer protection law furthered the Congressional objective of ensuring reliable organic standards. Quesada v. Herb Thyme Farms, No. S216305, 2015 Cal. LEXIS 9481 (Cal. Sup. Ct. Dec. 3, 2015).