The Ag Law Blog

Written by Ellen Essman

Dicamba, Roundup, WOTUS, and ag-gag: although there are important updates, this week’s Harvest topics could be considered some of the Ag Law Blog’s “greatest hits.”   In addition to these ongoing issues, a bill that is meant to encourage farmers to participate in carbon markets was recently introduced in the Senate. June has certainly been a busy month.

Decisions on dicamba. If you’ve been following along with our blog posts over the past few weeks, you know that the Ninth Circuit Court of Appeals vacated the registration of several over-the-top dicamba products, and in response, the EPA announced that all such products in farmers’ possession must be used before July 31, 2020 (our last post on the topic is available here).  The Ohio Department of Agriculture went a step further, making the final date for dicamba use in the state June 30, 2020, due to the state registrations expiring on that day.  Since the Ninth Circuit decision, the companies that produce dicamba products such as Engenia and, FXapan, and XtendiMax have filed numerous motions with the Ninth Circuit.  On June 25, the court declined a motion from the BASF Corporation, which makes Engenia, asking the court to pause and withdraw their decision from the beginning of the month.  What does this mean?  Basically, at this moment, the court’s ruling still stands, and use of certain over-the-top products will have to cease on the dates mentioned above.  That’s the latest on this “volatile” issue.

Bayer settles Roundup lawsuits, but this probably isn’t the end. Bayer, the German company that purchased Monsanto and now owns rights to many of the former company’s famous products, has been fighting lawsuits on multiple fronts.  Not only is the company involved in the dicamba battle mentioned above, but over the past few years it has had a slew of lawsuits concerning Roundup. On June 24, Bayer, the German company that now owns the rights to Roundup, announced that it would settle around 9,500 lawsuits.  The lawsuits were from people who claimed that Roundup’s main ingredient, glyphosate, had caused health problems including non-Hodgkin’s lymphoma.  The amount of the settlement will be between 8.8 and 9.6 billion dollars.  Some of that money will be saved for future Roundup claims.  Although many are involved in this settlement, there are still thousands of claims against Bayer for litigants who did not want to join the settlement.

Updated WOTUS still not perfect. As always, there is an update on the continuing saga of the waters of the United States (WOTUS) rule.  If you recall, back in April, the Trump administration’s “final” WOTUS rule was published.  Next, of course, came challenges of the rule from both sides, as we discussed in a previous Harvest post.  Well, the rule officially took effect (in most places, we’ll get to that) June 22, despite the efforts of a group of attorneys general from Democratically-controlled states attempting to halt the implementation of the rule.  The attorneys general asked the U.S. District Court for the Northern District of California a nationwide preliminary injunction, or pause on implementation of the rule until it could be sorted out in the courts.  The district court judge denied that injunction on June 19. On the very same day, a federal judge in Colorado granted the state’s request to pause the implementation of the rule within the state’s territory.  Remember that the 2015 rule was implemented in some states and not others for similar reasons.  The same trend seemingly continues with Trump’s replacement rule.  In fact, numerous lawsuits challenging the rule are ongoing across the country.  A number of the suits argue that rule does not go far enough to protect waters.  For instance, just this week environmental groups asked for an injunction against the rule in the U.S. District Court for the District of Columbia.  Environmental organizations have also challenged the rule in Maryland, Massachusetts, and South Carolina district courts.  On the other hand, agricultural groups like the New Mexico Cattle Growers Association have filed lawsuits arguing that the rule is too strict.

No more ag-gag in NC?  We have mentioned a few times before on the blog that North Carolina’s ag-gag law has been embroiled in a lawsuit for several years (posts are available here).  North Carolina’s version of “ag-gag” was somewhat different from other states, because the statute applied to other property owners, not just those involved in agriculture. The basic gist of the law was that an unauthorized person entering into the nonpublic area of a business was liable to the owner or operator if any damages occurred.  This included entering recording or surveilling conditions in the nonpublic area, which is a tool the plaintiffs use to further their cause. In a ruling, the U.S. District Court for the Middle District of North Carolina was decided largely in the plaintiffs’ (PETA, Animal Legal Defense Fund, etc.) favor. In order to not get into the nitty gritty details of the 73-page ruling, suffice it to say that the judge found that that law did violate the plaintiffs’ freedom of speech rights under the First Amendment to the U.S. Constitution. Another ag-gag law bites the dust.

Carbon markets for farmers?  And, now for something completely different. In the beginning of June, a bipartisan group of four U.S. senators introduced the “Growing Climate Solutions Act.”  On June 24, the Senate Committee on Agriculture, Nutrition, and Forestry held its first hearing on the new bill, numbered 3894.  The text of SB 3894 is not currently available online, but it would create “a certification program at USDA to help solve technical entry barriers that prevent farmer and forest landowner participation in carbon credit markets.”  The barriers “include[] access to reliable information about markets and access to qualified technical assistance providers and credit protocol verifiers” and “have limited both landowner participation and the adoption of practices that help reduce the costs of developing carbon credits.” You can read the Committee’s full press release about the bill here. It is backed by several notable businesses and groups, including the American Farm Bureau Federation, the National Corn Growers Association, the Environmental Defense Fund, and McDonalds and Microsoft.

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Dicamba battles continue: court allows dicamba use

sprayThere was a great deal of action last Friday in the case that vacated the registrations of XtendiMax, Engenia and FeXapan dicamba-based products.  Despite a barrage of court filings on Friday, however, nothing has changed the current legal status of the dicamba products in Ohio, and Ohio growers may use existing stocks of the products now but must end use by June 30, 2020.

Here’s a rundown of the orders that the Ninth Circuit Court of Appeals issued in the case last Friday:

  • The court denied the emergency motion that the petitioners (National Family Farm Coalition, Center for Food Safety, Center for Biological Diversity, and Pesticide Action Network North America) filed on June 13.  That motion asked the court to enforce its previous mandate to vacate the registrations, to prevent any further use of the products, and to hold the EPA in contempt for issuing the Cancellation Order the agency had made that allowed continued use of existing stocks of the products.  The court did not provide its reasoning for denying the motion.
  • The court granted amicus curiae (friend of the court) status to CropLife America and American Farm Bureau (representing  itself as well as national soybean, cotton, wheat, corn and sorghum association interest.)  Those parties filed their amicus curiae briefs in support of the EPA’s Cancellation Order and in opposition to the petitioners’ emergency motion.
  • The court granted also emergency motions to intervene in the case filed by BASF Corporation, maker of Engenia, and DuPont (Corteva) , maker of FeXapan.   The companies argued that they did not know that the  scope of the court’s order on Bayer’s XtendiMax product registration would also affect their dicamba product registrations and they should now be permitted an opportunity to defend their products.
  • BASF filed a motion asking the court to recall the court’s mandate that had cancelled the registrations of the products, claiming that the court had not followed appropriate procedural rules.  In its brief, BASF also suggested that te company would be filing petitions for rehearing since BASF had not had an opportunity to be heard when the court vacated the registration of its Engenia product.
  • The court ordered the original petitioners to file a brief in response to BASF’s motion to recall the mandate by June 23, and for BASF to reply to that brief by June 24.

The companies that make the dicamba products clearly intend to challenge the vacatur of their product registrations, even though the EPA’s Cancellation Order allows continued use of existing stocks of the products until July 30, 2020.   This dicamba battle is not yet over, and we’ll keep you posted on new developments.

Read our previous posts on the court’s vacatur in National Family Farm Coalition v. EPA here, on the EPA’s Cancellation Order here, and on the Ohio Department of Agriculture’s ruling on use of the products in Ohio here.

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Ohio Legislative Update

Written by Ellen Essman

There’s been a lot of action in the Ohio General Assembly over the last few weeks ahead of the body’s summer break.  Specifically, the House of Representatives has considered bills involving a student debt forgiveness program for veterinarians, animal abuse, road safety in Amish country, immunity for apiary owners for bee stings, and a bill meant to support county fairs during the COVID pandemic. Finally, both the Ohio House and Senate have passed bills that would limit liability involving the transfer of COVID-19.

Animal-drawn vehicle lighting. House Bill 501, concerning slow-moving, animal drawn vehicles, was introduced in February of 2020 and was first heard in the House Transportation & Public Safety committee on June 2.  The purpose of HB 501 is to “clarify the law governing slow-moving vehicles and to revise the lighting and reflective material requirements applicable to animal-drawn vehicles.” The bill would require animal-drawn vehicles, like the buggies typically driven by the Amish, to have the following: (1) at least one white lamp in the front visible from 1,000 feet or more; (2) two red lamps in the rear visible from 1000 or more; (3) one yellow flashing lamp mounted on the top most portion of the rear of the vehicle; (4) a slow moving vehicle (SMV) emblem; and (5) micro-prism reflective tape that is visible from at least 500 feet to the rear when illuminated by low beams on a vehicle.  In the committee hearing, HB 501 had mostly positive feedback, and was touted as a solution to crashes involving animal-drawn vehicles in poor visibility.

When the bee stings.  HB 496, which would grant apiary owners immunity for bee stings, passed the Ohio House on June 9, 2020.  The bill would protect the owner of a registered apiary from liability in the case of a personal injury or property damage from a sting if they do the following: (1) implement and comply with the beekeeping industry best management practices (BMPs) as established by the department of agriculture; (2) keep correct and complete records of their implementation and compliance with BMPs and make the records available in a legal proceeding; (3) comply with local zoning ordinances pertaining to apiaries; (4) operate the apiary in compliance with the Ohio Revised Code.  Notably, the bill would not protect apiarists from harming a person intentionally or through gross negligence.  The bill now moves on to the Ohio Senate for consideration.

Debt forgiveness for veterinarians.  The House also passed HB 67 on June 10, 2020.  This bill would create the “veterinarian student debt assistance program,” which would determine which veterinarians would receive student debt assistance, and how much each person would receive.  The amount awarded must be between $5,000 and $10,000.  Essentially, if the new veterinarian agrees to live in Ohio for a certain amount of time, and to participate in “charitable veterinarian services” like spaying and neutering for a nonprofit organization, humane society, law enforcement agency, or state, local, or federal government, student debt could be forgiven.  The details, including how many hours a veterinarian would need to work for charity, the types of charities that qualify, the amount of time a person must live in Ohio, and others would be determined by State Veterinary Medical Licenses Board.

Animal abuse. HB 33 passed the lower chamber on June 11, 2020.  This bill would require veterinarians, social service professionals (people who work at the county Job and Family Services, Children’s Services), counselors, social workers, and other similar professions to report violations against “companion animals” (dogs, cats, other animals kept in a residential dwelling), to law enforcement and/or the county humane agent or animal control officer.  People in these professions would have to report when they have “knowledge or reasonable cause to suspect” that violations to companion animals are happening, and they know or suspect that a child or older adult (60 years and older) lives in the residence, and they know or suspect that the violation is having an impact on the child or older adult.  Violations include animal abandonment, injury, poisoning, cruelty, fighting, dog fighting, or sexual conduct with an animal.

Assistance for county fairs.  If you’ve heard about any Ohio legislation recently, it was likely this bill.  HB 665 was passed by the House after much debate on June 11, 2020.  The 61 page bill makes a lot of changes to the statutory language.  Importantly, the bill would make it a misdemeanor for patrons not to follow written warnings and directions on amusement rides.  The bill also makes a number of changes to how county agricultural societies operate.  First of all, members of a county agricultural society would have to be residents of the county.  Members would have to pay a fee to retain membership, and the societies would have to issue a printed membership certificate to members.  In counties with an ag society, the county treasurer must transfer $1600 to the society each year as long as the society holds its annual exhibition, reports to the Ohio Department of Agriculture (ODA), and the director of ODA presents the society with a certificate showing it has followed applicable laws and regulations.  The bill also addresses independent agricultural societies, to which similar rules apply. The county board of commissioners would also be required to appropriate at least $100 to the ag society’s junior club.  The bill would require ag societies to create a report of its proceedings during the year, file a financial report and send it to the ODA director, and publish an announcement in the county newspaper or the society’s website a statement about the filing of the financial report, and contact information for people who want to obtain a copy of the report.  The bill also outlines the circumstances under which an ag society can sell fairgrounds or parts of fairgrounds.  Finally, an amendment to the bill was adopted that would allow rescheduling of horse races.

So what was so controversial about this bill?  A suggested amendment to the bill led to a heated argument in the House.  The amendment would have banned sales and displays of confederate flags and other memorabilia at county fairs.  This ban is already in place at the Ohio State Fair, but not county fairs.  Ultimately, the bill passed in the house, but this amendment did not.  The vote to table the amendment was largely along party lines, with every Republican except one voting against the amendment, and all Democrats voting for.

COVID-19 liability. The House passed HB 606 back in May, and we discussed it in a blog post here.  As a refresher, the bill is meant to protect businesses, schools, corporations, people, etc. from liability.  It would accomplish this with the declaration: “orders and recommendations from the Executive Branch, from counties and local municipalities, from boards of health and other agencies, and from any federal government agency, do not create any new legal duties for purposes of tort liability.” In other words, as long as the person, school, or business did not expose or transfer the virus recklessly, intentionally, or with willful and wanton conduct, someone could not bring a civil action for injury, death, or loss to person or property if they contract COVID from the entity.  Furthermore, the bill also provides temporary civil immunity for health care providers, grants immunity to the State for care of persons in its custody or if an officer or employee becomes infected with COVID-19 in the performance or nonperformance of governmental functions and public duties, and expands the definition of “governmental functions” for purposes of political subdivision immunity to include actions taken during the COVID-19 pandemic.

The Ohio Senate passed a similar bill, SB 308. Unlike the House bill, SB 308 provides immunity only in the health care context.  The bill would provide immunity from civil liability for doctors, nurses, and others working in the health care arena during “disasters” like the current pandemic.  It would also provide a qualified immunity from liability to services providers for “manufacturing” and any other service “that is part of or outside of a service provider’s normal course of business conducted during the period of a disaster or emergency declared due to COVID-19 and ending on April 1, 2021.”

What’s next?  The Ohio Senate is scheduled to meet next week on an “as needed” basis.  During these tentatively scheduled sessions, the senate could consider the bills that have cleared the House—HBs 496, 67, 33, and 665.  If passed by the Senate, the bills would then move on to Governor DeWine for approval.  We will keep you updated on what the Senate and Governor decide.  In the case of the COVID immunity bills, each bill moved to the opposite house, where they are currently being considered in committees.  We’ll have to wait and see if one or both are sent on to DeWine, or if the two houses choose to somehow combine the bills into one document.

 

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Ohio Department of Agriculture: dicamba use in Ohio ends June 30, 2020

The dicamba roller coaster ride continues today, with a statement issued by the Ohio Department of Agriculture clarifying that the use of XtendiMax, Engenia, and FeXapan dicamba-based products in Ohio will end as of June 30, 2020.  Even though the US EPA has issued an order allowing continued use of the products until July 31, 2020, use in Ohio must end on June 30 because the Ohio registrations for the three dicamba-based products expire on that day.

As we’ve explained in our previous blog posts here and here, the Ninth Circuit Court of Appeals vacated the registration of the dicamba products on June 3, 2020.  In doing so, the court stated that the EPA had failed to perform a proper analysis of the risks and resulting costs of the products.  According to the court, EPA had substantially understated the amount of acreage damaged by dicamba and the extent of such damage, as well as complaints made to state agriculture departments.  The court determined that EPA had also entirely failed to acknowledge other risks, such as the risk of noncompliance with complex label restrictions, economic risks from anti-competition impacts created by the products, and the social costs to farm communities caused by dicamba versus non-dicamba users.  Rather than allowing the EPA to reconsider the registrations, the court vacated the product registrations altogether.

The EPA issued a Cancellation Order for the three products on June 8, stating that distribution or sale by the registrants is prohibited as of June 3, 2020.  But the agency also decided to examine the issue on the minds of many farmers:  what to do with the products.  Applying its “existing stocks” policy, the EPA examined six factors to help it determine how to deal with stocks of the product that are in the hands of dealers, commercial applicators, and farmers.  The EPA concluded that those factors weighed heavily in favor of allowing the end users to use the products in their possession, but that use must occur no later than July 31, 2020 and that any use inconsistent with the previous label restrictions is prohibited.

Despite the EPA’s Cancellation Order, however, the Ohio Department of Agriculture is the final arbiter of the registration and use of pesticides and herbicides within Ohio.  ODA patiently waited for the EPA to act on the Ninth Circuit’s ruling before issuing its guidance for Ohio users of the dicamba products.  In its guidance released today, ODA stated that:

  • After careful evaluation of the court’s ruling, US EPA’s Final Cancellation Order, and the Ohio Revised Code and Administrative Code, as of July 1, 2020, these products will no longer be registered or available for use in Ohio unless otherwise ordered by the courts.
  • While use of already purchased product is permitted in Ohio until June 30, further distribution or sale of the products is illegal, except for ensuring proper disposal or return to the registrant.
  • Application of existing stocks inconsistent with the previously approved labeling accompanying the product is prohibited.

But the roller coaster ride doesn’t necessarily end there.  Several dangling issues for dicamba-based product use remain:

  • We’re still waiting to see whether the plaintiffs who challenged the registrations (the National Family Farm Coalition, Center for Food Safety, Center for Biological Diversity, and Pesticide Action Network North America) will also challenge the EPA’s Cancellation Order and its decision to allow continued use of the products, and will request immediate discontinuance of such uses.
  • Bayer Crop Science, as an intervenor in the Ninth Circuit case, could still appeal the Ninth Circuit’s decision, as could the EPA.
  • All of these orders add complexity to the issue of liability for dicamba damage.  That issue has already become quite controversial, often pitting farmer against farmer and requiring the applicator or damaged party to prove adherence to or violation of the complicated label restrictions.  But the Ninth Circuit’s attention to the risks of adverse impacts from the products raises additional questions about whether an applicator who chooses to use the products is knowingly assuming a higher risk, and whether a liability insurance provider will cover that risk.  For this reason, growers may want to have a frank discussion with their liability insurance providers about coverage for dicamba drift.

The dicamba roller coaster ride will surely continue, and we’ll keep you updated on the next development.

Read the ODA’s Official Statement Regarding the Use of Over-the-Top Dicamba Products here.

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US EPA allows use of dicamba products by July 31, 2020

When we explained in our last blog post the recent Court of Appeals decision that vacated the registration of three dicamba-based products, we mentioned that one possibility for answering the “what happens now” question was for the EPA to issue a cancellation order that would allow use of existing stocks of the products held by end users.  That’s exactly what happened yesterday, when the US EPA made a final order that cancelled the registrations of XtendiMax, Engenia, and FeXapan but allows for movement and use of the products.  Here’s a summary of the agency’s order.

Authority to issue the cancellation order

After reviewing the background of the dicamba product registrations vacated by the Ninth Circuit Court of Appeals last week for lack of “substantial evidence” supporting the registrations, the EPA stated that it was relying upon the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) to establish provisions for the disposition of existing stocks of registrations that are found to be invalid.   “The Administrator may permit the continued sale and use of existing stocks of a pesticide whose registration is suspended or canceled under [sections 3, 4 or 6 of FIFRA] to such extent, under such conditions, and for such uses as the Administrator determines that such sale or use is not inconsistent with the purposes of [FIFRA]” stated the agency.

The EPA noted that FIFRA does not prohibit the use of unregistered pesticides, but only prohibits the sale and distribution of unregistered pesticides.  The agency noted that without its action, end users holding stocks of the products aren’t prevented from using the stocks without following label directions and restrictions.  And the agency pointed to a similar action it took after a 2015 court order that vacated the registration of sulfoxaflor and a 2010 court decision that vacated the registration of spirotetramat.  In both cases, the EPA utilized a cancellation order to establish terms and conditions for the disposition of existing stocks of the products.

Existing Stocks Determination

The EPA established an “existing stocks policy” in 1991 to help the agency assess how to treat existing stocks of cancelled pesticides, both when no significant risk concerns have been identified and when there are significant risk concerns for a cancelled product.  The agency noted that it considered the six factors outlined in the policy for considering significant risk concerns associated with a cancelled pesticide and reached the conclusion that “distribution and use in certain narrow circumstances is supported.”

The six factors the agency considered in determining what to do with the existing stocks of dicamba products are:

  1. Quantities of existing stocks at each level of the channels of trade

The agency noted that due to the current timing of the growing season, significant existing stocks are present in the possession of end users and throughout the channels of trade.  Stating that it couldn’t determine the exact quantities of existing stocks at each level of the channels of trade, the EPA estimates that “approximately 4 million gallons could be in the channels of trade.”

  1. Risks resulting from the use of the existing stocks

Again concluding that because the product registrations were vacated and the labels therefore voided, end users were not legally bound to follow label restrictions if using the dicamba products.  The agency concluded that such non-label uses would have greater potential for adverse effects than if the agency issued an order regulating the use of the existing stocks. Such an order is imperative, said the agency, to ensure that any use of the products would be consistent with previously approved labeling and can be enforced in order to prevent unreasonable adverse effects on the environment. Surprisingly, the EPA gave little attention to the volatility concerns raised by the Ninth Circuit in its decision last week, and evidence the court pointed to in that case that suggested that even applications by those who carefully followed the label restrictions were subject to drift and damage.

  1. The benefits resulting from the use of existing stocks

Capitalizing on the unfortunate timing of the Ninth Circuit’s vacation of the pesticide in regards to planned immediate uses in the current growing season, the agency concluded that “the benefits resulting from the use of the products are considerable and well established, particularly for this growing season.”  The EPA reiterated many of the numerous communications it had received stating how essential the over-the-top products are, especially with the growing season underway. It also concluded that allowing non-over-the-top uses would result in substantially greater benefits to users and society than would disposal of the products.

  1. The financial expenditures users and others have already spent on existing stocks

Again pointing to the current growing season, the agency concluded that “the costs to farmers are not limited to their existing stocks of these dicamba products, but include other sunk costs made in expectation of the availability of these products (seed purchase, tilling, planting, etc.) as well as the lost opportunity to switch to a different crop or to another herbicide or weed management method.”

  1. The risks and costs of disposal or alternative disposition of the stocks

The EPA concluded that disposal of the existing stocks of dicamba products would incur substantial costs for all and, for stock already in the hands of end users, “may be neither feasible nor advisable.”  Additionally, the agency pointed to disposal or return of opened containers which would have high risks of spillage and increased expenses for proper disposal.

  1. The practicality of implementing restrictions on distribution, sale, or use of the existing stocks

Another option available to the agency under FIFRA would be to issue individual stop sale, use and removal orders to all end users holding dicamba products, but the EPA concluded that such an action would be unwarranted under the present facts because tracking the existing stocks would be burdensome, inaccurate and impractical and that “hard-pressed farmers who have made large investments in their existing stocks may be uncooperative with a cancellation order that requires disposal.”

Final Order

After weighing the six factors above, the EPA concluded that the six factors weigh heavily in support of allowing end users to use existing stocks of the dicamba products in their possession.   However, the agency imposed a July 31 , 2020 cut-off date for use of existing stocks in order to “further reduce the potential for adverse effects.”  Here are the final orders the agency made for the products:

  1. Distribution or sale by the registrant. Distribution or sale by the registrant of all existing stocks of the products listed below is prohibited effective as of the time of the order on June 3, except for distribution for the purposes of proper disposal.
  2. Distribution or sale by persons other than the registrant. Distribution or sale of existing stocks of the products listed below that are already in the possession of persons other than the registrant is permitted only for the purposes of proper disposal or to facilitate return to the registrant or a registered establishment under contract with the registrant, unless otherwise allowed below.
  3. Distribution or sale by commercial applicators. For the purpose of facilitating use no later than July 31, 2020, distribution or sale of existing stocks of products listed below that are in the possession of commercial applicators is permitted.
  4. Use. Use of existing stocks of products listed below inconsistent in any respect with the previously-approved labeling accompanying the product is prohibited. All use is prohibited after July 31, 2020.

Now what? 

While the manufacturers of XtendiMax, Engenia, and FeXapan are prohibited from selling and distributing their products effective as of June 3, 2020, the EPA’s cancellation order allows others to return, dispose of, or use the products according to the previous label restrictions and no later than July 31, 2020.  But a few other factors come into play:

  • Some states have already taken actions to restrict the use of the dicamba products, which is within a state’s authority. Ohio has not done so, and instead has stated that it has been awaiting US EPA guidance on the legal status of the products and will communicate options for farmers afterwards.  This means that users in Ohio should keep a close eye on the Ohio Department of Agriculture to see if it will go along with the US EPA’s guidance or direct otherwise.
  • A cancellation order issued by the EPA is a final agency action that is subject to appeal, so we might see an immediate of the cancellation order and a request to stay the order pending appeal. Such an appeal could challenge whether the EPA has the authority to regulate existing stocks of the products and whether the agency’s analysis sufficiently addressed the risks of adverse impacts from continued use.

As seems often to be the case with dicamba, there’s a mixed sense of drama and dread with what lies ahead.  We’ll be sure to keep you posted on the next legal news for dicamba.

Read the US EPA’s cancellation order for XtendiMax, Engenia, and FeXapan here.

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Dicamba takes another blow:  Court of Appeals vacates dicamba registration

Dicamba has had its share of legal challenges, and a decision issued yesterday dealt yet another blow when the Ninth Circuit Court of Appeals vacated the product’s registration with the U.S. EPA.  In doing so, the court held that the EPA’s approval of the registration violated the provisions of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), which regulates the use of herbicides and other chemicals in the U.S.  Here’s a summary of how the court reached its decision and a few thoughts on the uncertainty that follows the opinion.

The challenge:  EPA’s approval of three dicamba products

We first have to step back to 2016, when the EPA approved three dicamba-based products– Monsanto’s XTendiMax, DuPont’s FeXapan, and BASF’s Engenia–as conditional use pesticides for post-emergent applications in 34 states, including Ohio.  Although dicamba has been around for years, the approval came after the companies reformulated dicamba to make it less volatile and in anticipation of the development of dicamba tolerant soybean and cotton seeds.  The agency conducted a risk assessment and concluded that if used according to the label restrictions, the benefits of the dicamba products outweighed “any remaining minimal risks, if they exist at all.”  The EPA also provided that the registrations would automatically expire if there was a determination of an unacceptable level or frequency of off-site dicamba damage.

Before the conditional registrations were set to automatically expire in late 2018, the EPA approved requests by Bayer CropScience (previously Monsanto), Cortevo (previously DuPont) and BASF to conditionally amend the registrations for an additional two years.  The approval came despite widespread concerns about dicamba drift and damage during the 2017 growing season.  To address those concerns, EPA chose not to conduct a new risk assessment and instead adopted additional label restrictions that had been proposed by Monsanto/Bayer to minimize off-field movement of dicamba.   Many states added restrictions for dicamba use that exceeded the label restrictions, including banning any use of the product during certain periods.

Several organizations challenged the EPA’s dicamba registration approvals.  The National Family Farm Coalition, Center for Food Safety, Center for Biological Diversity, and Pesticide Action Network North America filed suit against the EPA, claiming that the agency violated both FIFRA and the Endangered Species Act in approving the product registrations.  Monsanto requested and was granted permission to intervene in the case.

The Ninth Circuit’s review

To approve the request to amend the dicamba registrations, FIFRA required the EPA to make two conclusions:  first, that the applicant had submitted satisfactory data related to the proposed additional use of the pesticide and second, that the approval would not significantly increase the risk of unreasonable adverse effects on the environment.  The task before the Ninth Circuit Court of Appeals was to review the EPA’s 2018 decision  and determine whether there was substantial evidence to support the EPA’s conclusions and amend the registrations.

The conclusion that drew the most attention from the court was the EPA’s determination that amending the dicamba registrations for two years would not cause unreasonable adverse effects on the environment.  The court determined that the EPA erred in making this conclusion when it substantially understated several risks of dicamba registration, such as:

  • Misjudging by as much as 25% the amount of acreage on which dicamba would be used in 2018.
  • Concluding that complaints to state departments of agriculture could have either under-reported or over-reported the actual amount of dicamba damage, when the record clearly showed that complaints understated the amount of damage.
  • Failing to quantify the amount of damage caused by dicamba, “or even to admit that there was any damage at all,” despite having information that would enable the EPA to do so.

But that’s not all.  The court pointed out that the agency had also “entirely failed to acknowledge other risks, including those it was statutorily required to consider,” such as:

  • The risk of substantial non-compliance with label restrictions, which the court noted became “increasingly restrictive and, correspondingly, more difficult to follow” and to which even conscientious applicators could not consistently adhere.
  • The risk of economic costs.  The court stated that the EPA did not take into account the “virtually certain” economic costs that would result from the anti-competitive effect of continued dicamba registration, citing evidence in the record that growers were compelled to adopt the dicamba products just to avoid the possibility of damage should they use non-dicamba tolerant seed.
  • The social costs of dicamba technology to farming communities.  The court pointed out that a farmer in Arkansas had been shot and killed over dicamba damage, that dicamba had “pitted neighbor against neighbor,” and that the EPA should have identified the severe strain on social relations in farming communities as a clear social cost of the continued registration of the products.

Given the EPA’s understatement of some risks and failure to recognize other risks, the Court of Appeals concluded that substantial evidence did not support the agency’s decision to grant the conditional registration of the dicamba products.  The EPA “failed to perform a proper analysis of the risks and resulting costs of the uses,” determined the court.  The court did not address the Endangered Species Act issue.

What remedy?

A critical point in the decision is the court’s determination of the appropriate remedy for the EPA’s unsupported approval of the dicamba products.  The EPA and Monsanto had asked the court to utilize its ability to “remand without vacatur,” or to send the matter back to the agency for reconsideration.  The remedy of “vacatur,” however, would vacate or void the product registrations.  The court explained that determining whether vacatur is appropriate required the court to weigh several criteria, including:

  • The seriousness of the agency’s errors against the disruptive consequences of an interim change that may itself be changed,
  • The extent to which vacating or leaving the decision in place would risk environmental harm, and
  • Whether the agency would likely be able to offer better reasoning on remand, or whether such fundamental flaws in the agency’s decision make it unlikely that the same rule would be adopted on remand.

The court’s weighing of these criteria led to its conclusion that vacating the registrations of the products was the appropriate remedy due to the “fundamental flaws in the EPA’s analysis.”  Vacating the registrations was not an action taken lightly by the court, however.  The judges acknowledged that the decision could have an adverse impact on growers who have already purchased dicamba products for the current growing season and that growers “have been placed in this situation through no fault of their own.”  Clearly, the court places the blame for such consequences upon the EPA, reiterating the “absence of substantial evidence” for the agency’s decision to register the dicamba products.

What now?

The court raised the issue we’re all wondering about now:  can growers still use the dicamba products they’ve purchased?  Unfortunately, we don’t have an immediate answer to the question, because it depends largely upon how the EPA responds to the ruling.  We do know that:

  • FIFRA § 136a prohibits a person from distributing or selling any pesticide that is not registered.
  • FIFRA § 136d allows the EPA to permit continued sale and use of existing stocks of a pesticide whose registration is suspended or canceled.  The EPA utilized this authority in 2015 after the Ninth Circuit Court of Appeals vacated  the EPA’s registration of sulfoxaflor after determining that the registration was not supported by substantial evidence.  In that case, the EPA allowed continued use of the existing stocks of sulfoxaflor held by end-users provided that the users followed label restrictions.  Whether the agency would find similarly in regards to existing stocks of dicamba is somewhat unlikely given the court’s opinion, but remains to be seen.  The EPA’s 2015 sulfoxaflor cancellation order is here.
  • While the U.S. EPA registers pesticides for use and sale in the U.S., the product must also be registered within a state in order to be sold and used within the state.  The Ohio Department of Agriculture oversees pesticide registrations within Ohio, and also regulates the use of registered pesticides.
  • If the EPA appeals the Ninth Circuit’s decision to the U.S. Supreme Court, the agency would likely include a request for a “stay” that would delay enforcement of the court’s Order.
  • Bayer strongly disagrees with the decision but has paused its sale, distribution and use of XtendiMax while assessing its next step and awaiting EPA direction.  The company states that it will “work quickly to minimize any impact on our customers this season.”  Bayer also notes that it is already working to obtain a new registration for XtendiMax for the 2021 season and beyond, and hopes to obtain the registration by this fall.  See Bayer’s information here
  • BASF and Corteva have also stated that they are awaiting the EPA’s reaction to the decision, and will “use all legal remedies available to challenge this Order.”
  • Syngenta has clarified that its Tavium Plus VaporGrip dicamba-based herbicide is not part of the ruling and that the company will continue selling that product.

For now, all eyes are on the U.S. EPA’s reaction to the Ninth Circuit’s decision, and we also need to hear from the Ohio Department of Agriculture.  Given the current state of uncertainty, it would be wise for growers to wait and see before taking any actions with dicamba products.  We’ll keep you posted on any new legal developments.  Read the court’s decision in National Family Farm Coalition et al v. U.S. EPA here.

 

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Ohio House passes bill to limit liability for COVID-19 transmissions

Capture“Will I be liable for that?” is a common question we hear in the legal world.  COVID-19 has made that question even more commonplace, especially as more businesses reopen or expand services and more people reengage in public activities.  About a dozen states have acted on the liability concern and passed COVID-19 liability protections, and Congress is also deliberating whether federal legislation is necessary.  Here in Ohio, the House and the Senate have been reviewing separate immunity proposals.  Yesterday, Ohio’s House passed its bill, which aims to limit liability in certain situations where a person claims harm from the transmission of COVID-19.

The language of House Bill 606 effectively explains the House’s intent in putting forth its proposal, stating that:

  • The Ohio General Assembly is aware that lawsuits related to the COVID-19 health emergency numbering in the thousands are being filed across the country.
  • Ohio business owners, small and large, as they begin to re-open their businesses are unsure about what tort liability they may face, and recommendations regarding how best to avoid infection with COVID-19 change frequently.
  • Businesses and premises owners have not historically been required to keep members of the public from being exposed to airborne viruses, bacteria, and germs.
  • Those individuals who decide to go out into public places are responsible to take those steps they feel are necessary to avoid exposure to COVID-19, such as social distancing and wearing masks.

The House bill declares that for the above reasons, any COVID-19 “orders and recommendations from the Executive Branch, from counties and local municipalities, from boards of health and other agencies, and from any federal government agency, do not create any new legal duties for purposes of tort liability.”

The bill’s reference to not establishing a legal duty  in regards to COVID-19 is important, as it forms the basis of immunity from liability for COVID-19 infections.  Under Ohio law, a person who can prove that harm resulted because another failed to meet a required duty of care can make a successful claim of negligence and receive damages for harm caused.  Negating a legal duty of care for handling of COVID-19 removes the possibility of civil liability.

The House bill clearly lays out its general liability protection in Section 4 and extends the immunity from March 9 to December 31, 2020 to “any person,” which includes an individual, corporation, business trust, estate, trust, partnership, association, school, for-profit, nonprofit, governmental, or religious entity, and state institution of higher education.  But it also makes an exception from immunity where a person has acted recklessly, intentionally, or with wanton misconduct:

  • No civil action for damages for injury, death, or loss to person or property shall be brought against any person if the cause of action on which the civil action is based, in whole or in part, is that the injury, death, or loss to person or property is caused by the exposure to, or the transmission or contraction of [COVID-19] or any mutation thereof, unless it is established that the exposure to, or the transmission or contraction of, any of those viruses or mutations was by reckless or intentional conduct or with willful or wanton misconduct on the part of the person against whom the action is brought.

Opponents to the bill claim that it would encourage persons not to take any COVID-19 precautions, but proponents argue that the bill does so by discouraging reckless behavior.  Under the legislation, to behave recklessly means that “with heedless indifference to the consequences, the person disregards a substantial and unjustifiable risk that the person’s conduct is likely to cause an exposure to, or a transmission or contraction of [COVID-19] or any mutation thereof, or is likely to be of a nature that results in an exposure to, or a transmission or contraction of, any of those viruses or mutations.”

In addition to the general immunity protection explained above, the House bill also provides temporary civil immunity for health care providers, grants immunity to the State for care of persons in its custody or if an officer or employee becomes infected with COVID-19 in the performance or nonperformance of governmental functions and public duties, and expands the definition of “governmental functions” for purposes of political subdivision immunity to include actions taken during the COVID-19 pandemic.

The Ohio Senate is working on its own version of a COVID-19 immunity bill. A fourth hearing on Senate Bill 308 took place on May 27 before the Senate Judiciary Committee.  Several substitute bills have replaced the original bill, and it’s yet uncertain what the final version will contain.

Read about House Bill 606 here and Senate Bill 308 here.

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Meat processing laws in Ohio and the U.S.

Meat sales have been subject to serious supply chain issues wrought by COVID-19, raising many questions here in Ohio about who can process meat and where meat can be sold.  In my opinion, explaining meat processing laws is nearly as difficult as summarizing the Internal Revenue Code.  But one easy answer to the meat processing questions we’ve been receiving relates to Ohio’s participation in the Cooperative Interstate Shipment (CIS) Program established by the 2008 Farm Bill.   Ohio was the first state to participate in CIS and is the largest of the seven approved state CIS programs.  CIS participation means that a small Ohio processor can apply to operate as a “federally inspected” plant and sell meat across state lines, including through online sales.

To become a “CIS establishment,” the processor must have fewer than 25 full-time employees and meet specific food safety and sanitation standards that are verified through an inspection and assessment process.  Because Ohio’s “state inspected program” already includes many components of the “federally inspected” standards, it’s not a difficult leap for Ohio processors to get into the CIS program and expand their sales opportunities.  Small processors interested in CIS start the process by talking with their designated meat inspector from the Ohio Department of Agriculture.  For a list of Ohio’s 26 CIS establishments, visit the USDA/FSIS CIS Establishments page here.

Want to know more about meat processing laws?  Our partner, the National Agricultural Law Center, will host a webinar on June 3, 2020 to address the topic.  Join us at Noon EST for Slaughtering and Processing in the United States:  Oversight and Requirements with Senior Staff Attorneys Rusty Rumley and Elizabeth Rumley.  The two will outline the balance and differences between federal and state authority over slaughter and processing of meat and poultry, along with proposed federal legislation that might change processing requirements and additional challenges facing small meat processors.   Information about the webinar and a link to the registration are on the National Agricultural Law Center’s website, here.  And don’t worry, it will make more sense than the Internal Revenue Code.

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Thinking of direct food sales? Consider these legal issues

There’s much disagreement over what we know about COVID-19, but one thing we can agree upon is that it has left an impact on the food supply chain.  For some food producers, that impact is creating opportunity.  Many growers see the potential of filling the gaps created by closed processing facilities, thin grocery shelves, and unwillingness to shop inside stores.   If you’re one of those growers who sees an opportunity to sell food, we have a few thoughts on legal issues to consider before moving into the direct food sales arena.  Doing so will reduce your risks and the potential of legal liability.

Follow COVID-19-related guidelines

Perhaps this goes without saying, but businesses should take COVID-19 guidelines seriously.  Doing so will hopefully reduce the potential of a COVID-19 transmission in the operation while also minimizing the risk of an enforcement action and potential legal liability for failing to protect employees and customers.   Follow the Ohio Department of Health Responsible RestartOhio Guidelines that are now in effect.  Engaging directly with customers places a grower in the “Consumer, Retail and Services” sector guidelines, which are here.  Mandatory requirements include protecting the health and safety of employees, customers and guests by establishing six-foot distances or barriers, wearing face masks, handwashing and sanitizing, checking for symptoms daily, posting signs, deep cleaning, and dealing with suspected and confirmed cases of COVID-19.   The FDA has also issued “Best Practices for Retail Food Stores, Restaurants and Food Pick-Up and Delivery Services” here, and OSU’s direct marketing team has many helpful resources for implementing the practices here.   Develop protocols based upon the guidelines, carefully train employees on protocols, and document your compliance.

Determine what food safety regulations apply to you

For food safety purposes, the Ohio Department of Agriculture and local county health department require licensing or inspection of certain types of food sale activities.  The regulations are a bit messy, and it’s challenging to know when an operator is affected by these regulatory requirements.  We’ve explained licensing laws pertaining to sales directly at the farm in this law bulletin, “Selling Foods at the Farm:  When Do You Need a License?”   There are more stringent requirements for those who sell meat, process food, or sell higher risk foods or several different types of foods.   We’ve provided a few simple guidelines in the chart at the end of this post, but please refer to the above law bulletin for further details.  Additionally, produce growers need to comply with Good Agricultural Practice (GAPs) and Food Safety Modernization Act (FSMA) rules.  Learn more about those on our Fruit and Vegetable Safety Program website here.

Check your zoning

If you’re within a municipality, you may have zoning regulations that apply to your production and sales activities.  Check your local zoning regulation to ensure that those activities are “permitted uses” within your designated zoning district.  If not, you may need to seek a “conditional use” permit.  Also be aware that some municipal zoning regulations regulate “home businesses,” and a home bakery or cottage food operation that has customers coming to the home to purchase the goods might fall into that category.

If you’re outside a municipality, Ohio’s agricultural exemption from county and township zoning applies to your production and sales activities.  Local zoning can’t prohibit your activities regardless of your zoning district, with limited exceptions if you’re in a “platted subdivision” situation (on a lot under 5 acres in a platted area of at least 15 other contiguous lots).  Note, however, that county and township zoning can regulate a “farm market” that receives more than 50% of its gross income from goods that weren’t raised on the owner’s farm.   You might need to comply with a few zoning regulations that pertain to the size and setback lines for your structure, the parking area, and ingress and egress points for customers.

You may have to collect sales taxes on some items

Most takeaway food items to be consumed off-site, such as meat and produce, aren’t subject to Ohio’s sales tax.  But if you sell items that are not exempt from sales tax, you’ll need to collect sales taxes on the items.  If you’re planning to sell ready-to-eat items on site, beverages, flowers, or container plants, you must charge and collect sales taxes and obtain a vendor’s license in order to submit the taxes to the state.  Find more details in our law bulletin on vendor’s licenses and sales taxes here.

Review contracting situations

You’ll likely be presented with a contract or agreement in many situations, such as a farmers’ market contract or an agreement for selling on an online sales platform.  Or you may need to generate your own contract for selling whole animals or establishing a “community supported agriculture” operation.  In either instance, read your contracts carefully.  Be sure to include and review important terms such as price, quality delivery dates, payment processes, late fees, data use, and other provisions related to your type of sale.   Don’t hesitate to involve an agricultural attorney to be sure that you’ve minimized your legal risk.

Talk to your insurance provider

Direct food sales might not be adequately covered by your insurance policy.   You’ll need to know whether you have sufficient premises liability coverage if a customer is harmed on your farm, coverage for transporting foods or for selling at a farmers’ market (typically required by the market) and product liability coverage in case someone claims illness or other injury from consuming your food.  You may need to increase coverage or purchase additional riders to the policy, depending on your risk level.  Reviewing your policy with your provider and aligning coverage with your food sales activities is imperative to reducing your liability risk.

Do you need a separate business entity?

Consider whether your food sales activities put other assets at risk, and whether your insurance is sufficient to address that risk.  If not, you should consider forming a separate business entity for your direct marketing business.   Forming a Limited Liability Company for your direct food sales activities can help shield your other assets from the liability of the food sales.  Talk with an agricultural attorney to assess your needs and determine what type of entity is best for your situation.

Keep great records 

This one applies to everything above.  Maintain records of what you do in regards to COVID-19 precautions, employee training, food safety compliance, and financial records of your expenditures and sales.  If a liability incident arises, document it carefully.  Keep the records for the required amount of time, which is typically three years for receipts for purchases and sales, ten years for insurance and employee records, and permanently for other records.

Don’t stop here

This list is a starting point for legal considerations for direct food sales, but it shouldn’t be the end.  There may be other legal issues that affect your particularly situation.  To learn more and fully consider all risks of direct marketing, talk with others who’ve directly sold food, visit with your accountant, lawyer and insurance provider, and learn the best practices for growing and marketing your food products.

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CFAP Direct Support sign up begins May 26

CaptureWe’ve been anxiously waiting for details on additional financial support to farmers through the Coronavirus Food Assistance Program (CFAP).  Those details finally arrived yesterday, when the USDA announced its Final Rule for CFAP’s Direct Support to Farmers and Ranchers Program, which will allocate $16 billion in funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Commodity Credit Corporation.

The Farm Office team has digested the Final Rule and written an explanation in our latest news bulletin here:   Sign up for USDA-CFAP Direct Support to Begin May 26, 2020.  The news bulletin provides details on:

  • Eligibility requirements for producers
  • Eligible commodities
  • Payment limitations
  • Application and timeline
  • Payment calculations, including examples of how to calculate payments

The Farm Office team will also host a webinar about Ohio’s CFAP sign up process soon.  Be sure to check back with this blog and our Farm Office Live page for further information about the webinar.

The Final Rule and additional information on CFAP are available on USDA’s CFAP website.

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