The Ag Law Harvest

By: Jeffrey K. Lewis, Attorney and Research Specialist, OSU Agriculture and Resource Law Program

Did you know that the fastest animal in the world is the Peregrine Falcon?  This speedy raptor has been clocked going 242 mph when diving.

Like the Peregrine Falcon, this week’s Ag Law Harvest dives into supply chain solutions, new laws to help reduce a state’s carbon footprint, and federal and state case law demonstrating how important it is to be clear when drafting legislation and/or documents, because any ounce of ambiguity could lead to a dispute.      

Reinforcing the links in the supply chain.  President Joe Biden announced that ports, dockworkers, railroads, trucking companies, labor unions, and retailers are all coming together and have agreed to do their part to help reduce the supply chain disruption that has left over 70 cargo ships floating out at sea with nowhere to go.  In his announcement, President Biden disclosed that the Port of Los Angeles, the largest shipping port in the United States, has committed to expanding its hours so that it can operate 24/7; labor unions have announced that its workers have agreed to work the additional hours; large companies like Walmart, UPS, FedEx, Samsung, Home Depot and Target have all agreed to expand their hours to help move product across the country.  According to the White House, this expanded effort will help deliver an extra 3,500 shipping containers per week.  Port and manufacturing disruptions have plagued retailers and consumers since the beginning of the COVID-19 pandemic.  Farming equipment and parts to repair farming equipment are increasingly in short supply.  The White House hopes that through these agreements, retailers and consumers can finally start to see some relief.  

California breaking up with gas powered lawn equipment.  California Governor Gavin Newsom recently signed a new bill into law that would phase out the use of gas-powered lawn equipment in California.  Assembly Bill 1346 requires that new small off-road engines (“SOREs”), used primarily in lawn and garden equipment, be zero-emission by 2024.  The California legislation seeks to regulate the emissions from SOREs which have not been as regulated as the emissions from other engines.  According to the legislation, “one hour of operation of a commercial leaf blower can emit as much [reactive organic gases] plus [oxides of nitrogen] as driving 1,100 miles in a new passenger vehicle.”  The new law requires the State Air Resources Board to adopt cost-effective and technologically feasible regulations to prohibit engine exhaust and emissions from new SOREs.  Assembly Bill 1346 is a piece of the puzzle to help California achieve zero-emissions from off-road equipment by 2035, as ordered by Governor Newsome in Executive Order N-79-20

U.S. Supreme Court asked to review E15 Vacatur.  A biofuel advocacy group, Growth Energy, filed a petition asking the U.S. Supreme Court to review a federal court’s decision to abolish the U.S. Environmental Protection Agency’s (“EPA”) rule allowing for the year-round sale of fuel blends containing gasoline and 15% ethanol (“E15”).  Growth Energy argues that the ethanol waiver under the Clean Air Act for the sale of ethanol blend gasoline applies to E15, the same as it does for gas that contains 10% ethanol (“E10”).  Growth Energy also claims that limiting the ethanol waiver to E10 gasolines contradicts Congress’s intent for enacting the ethanol waiver because E15 better achieves the economic and environmental goals that Congress had in mind when it drafted the ethanol waiver.  Growth Energy asks the Supreme Court to overturn the lower court’s decision and instead interpret the ethanol waiver as setting a floor, not a maximum, for fuel blends containing ethanol that can qualify for the ethanol waiver.  Growth Energy now awaits the Supreme Court’s decision on whether or not it will take up the case. Visit our recent blog post for more background information on E15 and the waivers at issue.  

When in doubt, trust the trust.  A farm family in Preble County may finally be able to find some closure after the 12th District Court of Appeals affirmed the Preble County Court of Common Pleas’ decision to prevent a co-trustee from selling farm property.  Dorothy Wisehart (“Dorothy”), the matriarch of the Wisehart family established the Dorothy R. Wisehart Trust (the “Trust”) in which she conveyed a one-half interest in two separate farm properties, both located within Preble County to the Trust.  Dorothy retained her one-half interest in the two farms which passed to her son, Arthur, upon her death.  Furthermore, upon Dorothy’s death, the Trust became an irrevocable trust with Arthur as the sole trustee.  The Trust had five income beneficiaries – Arthur’s wife and four kids.  The Trust specifically allowed for removal and replacement of the trustee upon the written request of 75% of the income beneficiaries.  In 2010, four of the five income beneficiaries executed a document removing Arthur as the sole trustee and instead placed Arthur and Dodson, Arthur’s son and one of the income beneficiaries, as co-trustees.  Arthur, however, argued that only Dorothy had the power to remove and appoint a new trustee and once Dorothy passed, no new trustee could be appointed.  In 2015, Dodson filed suit against his father after Arthur allegedly tried to sell the two farms and further alleged that Arthur breached his fiduciary duty by withholding funds from the Trust.  Dodson also asked the court to determine the issue of whether Dodson was validly appointed as co-trustee.  The common pleas court sided with Dodson and found that (1) the Trust held an undivided one-half interest in the farms, (2) Dodson was validly appointed as co-trustee, and (3) Arthur wrongfully withheld funds from the Trust, breaching his fiduciary duty as a trustee.  Arthur appealed, arguing that the case was not “justiciable” because the harms alleged by Dodson were hypothetical and no real harm occurred.  However, the 12th District Court of Appeals disagreed with Arthur.  The court found that the Trust expressly provided for the removal and appointment of trustees by 75% of the income beneficiaries.  Further, the court ruled that this case was justiciable because Dodson’s allegations needed to be resolved by the courts or else real harm would have occurred to the income beneficiaries of the Trust.  This case highlights perfectly the importance of having well drafted estate planning documents to help clear up any disputes that may arise once you’re gone.  

No need to cut the “GRAS” today.  Consumer advocates, Center for Food Safety (“CFS”) and Environmental Defense Fund (“EDF”), brought suit against the Food and Drug Administration (“FDA”) asking the court to overturn the FDA’s rule regarding “Substances Generally Recognized as Safe (the “GRAS Rule”).  According to the plaintiffs, the GRAS Rule subdelegated the FDA’s duty to ensure food safety in violation of the United States Constitution, the Administrative Procedure Act (“APA”), and the Federal Food, Drug, and Cosmetic Act (“FDCA”).  In 1958, Congress enacted the Food Additives Amendment to the FDCA which mandates that any food additive must be approved by the FDA.  However, the definition of “food additive” does not include those substances that are generally recognized as safe.  Things like vinegar, vegetable oil, baking powder and many other spices and flavors are generally recognized as safe to use in food and not considered to be a food additive.  Under the GRAS Rule, anyone may voluntarily, but is not required to, notify the FDA of their view that a substance is a GRAS substance.  There are specific guidelines and information that must be presented to back up a manufacturer’s claim that a substance is GRAS.  In any case, the FDA retains the authority to issue warnings to manufacturers and to stop distribution when the FDA believes that a substance is not a GRAS substance.  Plaintiffs claim that under the GRAS Rule, the FDA is subdelegating its duty by allowing manufacturers to voluntarily notify the FDA of a GRAS substance rather than requiring it.  However, the Federal District Court for the Southern District of New York found that the FDA did not subdelegate its duties because the FDCA does not require the FDA provide prior authorization that a substance is GRAS.  Further, the court held that the FDA has done nothing more than implement a process by which manufacturers can notify the FDA of GRAS determinations and the FDA can choose to agree or disagree.  The court reasoned that even if a mandatory GRAS notification procedure or prior approval process were in place, manufacturers could simply lie about what’s in their products and the FDA would be none the wiser.  The court also noted that mandatory submissions would consume the FDA’s resources which would be better spent evaluating higher priority substances.  The court ultimately concluded that the FDA’s GRAS Rule does not highlight a constitutional issue, nor does it violate the FDCA or APA.

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New laws and new resources on wind and solar development in Ohio

Large-scale wind and solar energy development has generated both opportunity and conflict across Ohio in recent years.  For several months, we monitored the progress of Senate Bill 52, a proposal intended to address community and landowner concerns about wind and solar facilities.  This past Monday marked the effective date for Senate Bill 52, passed by the Ohio Legislature in June, and we’ve been busy developing new resources to help explain the laws that are now effective. 

The legislation expands local involvement in the siting and approval of large-scale wind and solar facilities in several ways:

  • County commissioners may designate “restricted areas” where such facilities may not locate.
  • County citizens may petition for a referendum to approve or reject restricted area designations.
  • Developers must hold a public meeting overviewing a proposed facility in the county where it would locate.
  • County commissioners may prohibit or limit a proposed wind or solar facility after learning of it at the public meeting.
  • County and township representatives must sit on the Ohio Power Siting Board committee that reviews facility applications.

The new laws also require wind and solar developers to submit decommissioning plans and performance bonds to address removal of a facility at the end of its lifetime. 

Our two law bulletins and video series on Senate Bill 52 are now available.  The resources work through each part of Senate Bill 52 and explain which types of facilities will be subject to the laws.  You’ll find the new resources in our energy law library on the Farm Office website at go.osu.edu/energylaw.

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New law bulletin explains Ohio’s sales tax exemptions for agriculture

If you’ve ever claimed a sales tax exemption on a purchase of farm goods, you may have experienced some confusion over whether you or the good is eligible for the exemption.  That’s because Ohio’s sales tax law is a bit tedious and complicated.  The law has several agricultural exemptions, but it can be challenging to understand who can claim them and what types of goods and services are exempt.  Those are the reasons for our newest law bulletin, Ohio’s Agricultural Sales Tax Exemption Laws.  We walk through the different sales tax exemptions that apply to agriculture, offer examples of goods that do and do not qualify for the exemptions, explain who can claim an exemption and how to claim it, and explain what happens when sales taxes are overpaid or not correctly paid.   We also offer steps a farmer can take to obtain the full benefits of Ohio’s agricultural sales tax exemptions.  The bulletin is available in our law library and through this link.

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The Ag Law Harvest

By:Jeffrey K. Lewis, Attorney and Research Specialist, OSU Agricultural & Resource Law 

Did you know that the Nile Crocodile has the strongest bite of any animal in the world?  The deadly jaws can apply 5,000 pounds of pressure per square inch, which is about 10 times more powerful than the crunch of the Great White Shark. Humans?  Well, they can apply about 100 pounds of pressure per square inch.  

This edition of the Ag Law Harvest takes a bite out of some federal lawsuits, Department of Labor developments, and USDA announcements affecting agriculture and the environment. 

Animal advocates lack standing to sue poultry producer.  In 2020, animal advocacy groups In Defense of Animals (“IDA”) and Friends of the Earth (“FoE”) (collectively the “Plaintiffs”) filed a lawsuit against Sanderson Farms (“Sanderson”), a Mississippi poultry producer, alleging that Sanderson engaged in false advertising as it relates to its chicken products.  According to Plaintiffs, Sanderson advertises that its chickens are “100% natural” with no “hidden ingredients.”  However, Plaintiffs allege that Sanderson has been misleading the public after many of Sanderson’s products tested positive for antibiotics and other unnatural substances.  This however is not the first court battle between FoE and Sanderson.  In 2017, FoE sued Sanderson for the same false advertising.  However, the 2017 case was dismissed because the court held that FoE did not have standing to bring the lawsuit.  The 2017 case was appealed to the Ninth Circuit Court of Appeals where the decision to dismiss the lawsuit was upheld.  Fast forward to 2020, FoE joined forces with a new plaintiff, IDA, hoping to file a lawsuit that would finally stick.  Recently however, a federal district court in California dismissed the most recent lawsuit because FoE was precluded, or prohibited, from suing Sanderson again on the same claims and because IDA lacked the standing to bring the lawsuit.  The California district court found that FoE could not bring its claims against Sanderson because those same claims were litigated in the 2017 lawsuit.  This legal theory, known as issue preclusion, prevents the same plaintiff from a previous lawsuit from bringing the same claims against the same defendant in a new lawsuit, when those claims were resolved or disposed of in a prior lawsuit.  Issue preclusion did not affect IDA, however, because it was a new plaintiff.  But the California district court still found that IDA lacked standing to bring this lawsuit against Sanderson.  IDA argued that because it expended resources to launch a campaign against Sanderson to combat the allegedly false advertising, it had organizational standing to bring the lawsuit.  Standing requires a plaintiff to show they suffered an “injury-in-fact” before they can maintain a lawsuit.  Organizational standing is the theory that allows an organization like IDA to establish an “injury-in-fact” if it can demonstrate that: (1) defendant frustrated its organizational mission; and (2) it diverted resources to combat the defendant’s conduct.  IDA argued that because it diverted resources including writing letters to Sanderson and the Federal Trade Commission, filing a complaint with the Better Business Bureau, publishing articles and social media posts, and diverting staff time from other campaigns to focus on countering Sanderson’s advertising, it had the organizational standing to bring the lawsuit.  The Court disagreed.  The Court reasoned that the diverting of resources by IDA was totally voluntary and not a result of Sanderson’s advertising.  The Court determined that in order to obtain organizational standing, IDA must have been forced to take the actions it did as a result of Sanderson’s advertising, the diverting of resources cannot be self-inflicted.  The Court held that Sanderson’s advertising did not ultimately frustrate IDA’s organizational mission and that any diverting of resources to counter Sanderson’s advertising was the normal course of action taken by a group like IDA.  

Joshua trees, a threatened species?  WildEarth Guardians (“Plaintiff”), a conservation organization, brought suit against the U.S. Secretary of the Interior and the U.S. Fish and Wildlife Service (“Defendants”) for failing to list the Joshua tree as a threatened species under the Endangered Species Act (“ESA”).  Plaintiff argued that the Defendants’ decision not to list the Joshua tree as threatened was arbitrary, capricious, contrary to the best scientific and commercial data available, and otherwise not in line with the standards set forth by the ESA.  In 2015 Plaintiff filed a petition to have the Joshua tree listed as a threatened species after Plaintiff provided scientific studies showing that climate change posed a serious threat to the continued existence of the Joshua tree.  The U.S. Fish and Wildlife Service (“FWS”) issued a 90-day finding that Plaintiff’s petition presented credible information indicating that listing the Joshua tree as threatened may be warranted.  However, the FWS’s 12-month finding determined that listing the Joshua tree as threatened or endangered under the ESA was not necessary due to the Joshua tree’s long lifespan, wide range, and ability to occupy multiple various ecological settings.  That’s when Plaintiff decided to bring this lawsuit asking the federal district court in California to set aside the 12-month finding and order the Defendants to prepare a new finding, and the Court agreed.  The Court held that Defendants’ decision was arbitrary, capricious, and contrary to the ESA and ordered the Defendants to reconsider Plaintiff’s petition.  The Court reasoned that the FWS’s climate change conclusions were arbitrary and capricious because it failed to consider Plaintiff’s scientific data and failed to explain why in its 12-month finding.  Further, the Court noted that the FWS’s findings regarding threats to the Joshua tree posed by climate change and wildfire were unsupported, speculative, or irrational.  And finally, the Court determined that the FWS’s conclusion that Joshua trees are not threatened in a significant portion of their range was arbitrary and capricious.  The FWS must now prepare a new finding that addresses all the above deficiencies.  

Department of Labor announces expanded measures to protect workers from extreme heat.  The U.S. Department of Labor (“DOL”) announced that the Occupational Safety and Health Administration (“OSHA”) is working on ways to protect workers in hot environments and reduce the dangers associated with exposure to high heat.  According to the DOL, OSHA will be implementing an enforcement initiative on heat-related hazards,  developing a National Emphasis Program on heat inspections, and launching a rulemaking process to develop a workplace heat standard.  Current and future extreme heat initiatives and rules apply to indoor and outdoor worksites in general industry, construction, agriculture and maritime where potential heat-related hazards exist. 

Deadline to apply for pandemic assistance to livestock producers extended.  The USDA announced that it is providing additional time for livestock and poultry producers to apply for the Pandemic Livestock Indemnity Program (“PLIP”).  Producers who suffered losses during the Covid-19 pandemic due to insufficient access to processing may now apply for relief for those losses through October 12, 2021.  Payments are based on 80% of the fair market value of the livestock and poultry and for the cost of depopulation and disposal of the animals.  Eligible livestock include swine, chickens, and turkeys.  For more information on PLIP, and how to apply, visit farmers.gov/plip.

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Ohio legislation on the move: the Farm Science Review edition

As it often goes with farming, the weather interfered with Farm Science Review this year.  We missed seeing farmers and students from across the state gather for the show on Wednesday.  But even wind and rain didn’t stop our Farm Office team from presenting Farm Office Live from the review on Thursday.   I presented an update on Ohio legislation for the program, as Ohio’s legislature is back from its summer break.  Other team members covered  Here’s a summary of the legislative update.

Bills passed and soon effective

S.B. 52 – Solar and wind facilities.  S.B. 52 passed several months ago and will be effective on October 11, 2021.  The new law will allow counties to designate “restricted areas” in a county where wind and solar projects may not locate and creates a county referendum process for a public vote on restricted area designation.  The law will also require developers to hold a public meeting in the county where a facility is proposed at least 90 days before applying for project approval with the Ohio Power Siting Board.  After the meeting, the county commissioner may choose to prohibit or limit the proposed project.  Another provision of the new law appoints 2 local officials from the proposed location to serve on the OPSB board that reviews a project.  And importantly for landowners, the new law requires a developer to submit a decommissioning plan to OPSB for approval with the application and to post and regularly update a performance bond for the amount of decommissioning costs.  Watch for our new law bulletins on S.B. 52, which we’ll publish soon.

Bills on the move

H.B. 30 – Slow-moving vehicles.  The bill passed the House on June 23, 2021, and just received its second hearing before the Senate Transportation on September 22, 2021.  It proposes revisions to marking and lighting requirements for animal-drawn vehicles to make the vehicles more visible and reduce roadway accidents.

H.B. 95 – Beginning farmers.   We’ve been hoping this bill aiding beginning farmers would continue to receive attention.  It would allow individuals to be certified as beginning farmers and create income tax credits for owners who sell land and agricultural assets to certified beginning farmers and for beginning farmers who attend approved financial management programs.  The bill passed the House on June 28, 2021 and was referred to the Senate Ways and Means Committee on September 8, 2021.

S.B. 47 – Overtime payThe Senate passed S.B. 47 on September 22, soon after returning from break.  It would exempt an employer from paying overtime wages for certain activities, including traveling to the workplace, actions before or after beginning principal work activities, or “de minimus” acts requiring insignificant time.  The bill sponsors state that it will bring necessary clarity to overtime pay in the era of more employees working unsupervised from home.

Bills newly introduced

H.B. 397 – Termination of Agricultural LeaseA bill that aims to bring certainty to farmland leases was introduced in the House on August 24, 2021 and referred to the Agriculture and Conservation Committee.  The proposal states that where a farm lease agreement does not provide for a termination date or a method for giving notice of termination, a landlord who wants to terminate that agreement must do so in writing by September 1.   Unless otherwise agreed in writing, the termination date would be either the date harvest or removal of the crops is complete or December 31, whichever is earlier.

H.B. 385 – Municipal waste discharges to Lake Erie western basin  Municipalities would be prohibited from discharging waste from treatment plants into Lake Erie under a new bill proposed by Rep. Jon Cross (R-Kenton).  The bill would require the Ohio EPA to revoke all existing NPDES permits for municipal treatment works or sewerage systems to in the western basin and prohibit any additional permits for that purpose.  It would also fine municipalities up to $250,000 per day for knowingly discharging waste into Lake Erie on the first offense and $1,000 per day for subsequent offenses, or to fine $100 million if the discharge amount exceeds 100 million gallons in a 12-month period. Introduced on August 6, 2021, the bill has been referred to the House Agriculture and Conservation Committee.

Catch a replay Farm Office Live from Farm Science Review at https://farmoffice.osu.edu/farmofficelive.  Register there to join us for the next Farm Office Live on October 13 at 7 p.m. or a repeat on October 15 at 10 a.m., where we’ll digest the latest news and information on agricultural law and farm management issues that affect Ohio’s farm offices.

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The Ag Law Roundup: your ag law questions answered

It’s time to round up another batch of legal Q&A.  Here are some of questions we’ve recently received in the Farm Office. 

My township recently notified me of having noxious weeds.  They identified “ragweed” as the problem, but the Ohio Revised Code’s list of noxious weeds doesn’t list “ragweed.”  What are my rights?  Under Ohio law, you have five days to respond to the township trustees to explain that no action need to be taken because no noxious weeds exist on the property and that plants were incorrectly identified as noxious weeds.  Therefore, your conversations with the township trustees should have met the legal requirements because you notified them that plants were incorrectly identified as noxious weeds.  Having a written record is always best, just in case there is ever a dispute, so you may want to follow up with the townships trustees in an email, just to confirm that no action need to be taken. 

I read that each landowner has a ten foot right of access on either side of the fence row.  How does that work? The ten foot right of access is for a situation where one neighbor hasn’t shared in the construction of the line fence.   If a landowner chooses to build a line fence and the adjoining neighbor doesn’t share in the construction of the fence.  Ohio Revised Code Section 971.08 allows the landowner to enter the neighbor’s property for up to ten feet for the length of the fence to build and maintain the fence.  A landowner who stays within that ten feet strip cannot be held guilty for trespassing, but can be liable for any damages caused on the neighbor’s property, including damages to crops.

A neighbor is spraying herbicides on the fence row where an adjoining neighbor is raising organic livestock.  Is there anything the livestock operator can do? There could be a spray drift issue if the herbicides are coming over onto the organic producer’s property.  The most common legal action for dealing with spray drift is negligence, and another legal theory is trespass.  If the drift causes harm, there would be a legal claim under either of those theories and the sprayer could be liable for harm caused by the drift.  Before moving right to a lawsuit, however, a letter from an attorney that explains the potential liability for the drift could be helpful.  Losing the organic certification would be costly, and an attorney would likely point that out.  Those types of letters don’t take a lot of time and wouldn’t be as costly as filing a lawsuit.  Additionally, the sprayer’s insurance policy might address negligence for spray drift and could provide a mechanism for compensation to the livestock producer.

We are in the process of buying a farm property to raise horses and relocate a small craft brewery to the location and grow hops and barley for the brewery. Can you provide information to help navigate the legal issues in doing this? Let’s start with two separate issues—the liquor licensing issue and the zoning issue.  You may already know that Ohio has a relatively new licensing law that eases the liquor license process for small brewers—the A-1c license, explained at https://www.com.ohio.gov/liqr/permitclasses.aspx.  That would allow you to brew and sell onsite if you meet the license requirements.

The zoning question is not as straightforward and instead is an “it depends” answer.  Ohio zoning law does specifically exempt wineries from local zoning regulation, if the winery is growing grapes.  There is not a similar specific exemption for breweries, though.   In some situations, the agricultural exemption from zoning authority applies and prevents the township from prohibiting an agricultural use if it meets the definition of “agriculture.”  Some of the activities you describe, growing hops and grains and raising horses, do fit within that definition.  Processing and marketing activities, like making and selling beer on-site, only fit within that definition if they are “secondary to” the growing/production activities.  Showing that the brewery would be a “secondary” use to the primary production activities could be difficult, and there aren’t clear standards on how to prove which is primary and which is secondary.  Some townships have examined amount of the property dedicated to the different uses, some have examined financial returns of the different uses, some have looked at amount of time… it’s a bit gray and open to interpretation. 

The other way to be exempt from zoning regulations would be to prove that the brewery is “agritourism.”  This requires first showing that the activity is a cultural, recreational, entertainment or historic activity that is “agriculturally related” to the property and that the property qualifies as a “working farm” that is engaged in commercial agricultural production.  Townships vary on how closely they examine these different components, but it seems that many are becoming more  strict about what is and is not “agriculturally related” to the property.  If none of the exemptions apply, whether you could engage in the land use would depend on your district zoning provisions.  You’d want the zoning district to allow a brewery activity as a permitted use in the zoning district, or to be able to seek a “conditional use” permit for it.

If someone has a hornet’s nest in the yard in a neighborhood with a sidewalk, is there concern if the hornets were to attack someone walking by? This is one of those “maybe” answers.  We don’t have clear legal guidance or court cases on liability for stings in Ohio, and my guess is that’s because the cases may settle out in the insurance process.  The hornet nest, though, is probably a natural situation that is less likely to result in liability on the landowner’s part than a manmade condition, especially if the nest is out in the open and easily seen.  The law expects people to bear responsibility to protect themselves from open and obvious natural dangers.  However, the fact that the landowner knows it is there could be problematic given the neighborhood situation, as in “you should have done something about it because you knew people would be walking by,” especially if it’s not easy for passers-by to detect it or if the landowner knows someone in the neighborhood is allergic to bees. To avoid the risk of potential harm or problems, the landowner could consider either putting up a sign warning about the nest or have it removed.  The cost of removal would probably be less than an injury claim or a lawsuit.  The landowner may also want to talk with her insurance agent to see if there would be coverage for an incident—likely not, but it’s worth an ask.  That might bring the landowner some peace of mind if he or she allows it to remain.

If you have an agricultural law question, send it to aglaw@osu.edu and we’ll do our best to provide an answer.  We can’t give you legal advice,of course, but we can explain the laws that apply to the situation.  Also be sure to check for answers in our law bulletins on the Ag Law Library, here on the Farm Office website.

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Join Farm Office Live from OSU’s Farm Science Review on September 23

Farm Science Review is back!  OSU’s Farm Office Team will be there, and we’ll broadcast the next Farm Office Live from our farm office at the Review.  We can’t promise we’ll be able to ignore biscuits and gravy, pork tenderloins, bahama mamas, or milkshakes during Farm Office Live, but we can promise you updates on recent developments in the world of farm management and agricultural law. 

The broadcast will be on Thursday, September 23 beginning at 10 a.m.  Here’s what’s on the agenda:

  • Carbon market programs and carbon agreements
  •  Legislative update
  • 2022 crop budgets
  • 2020 Farm Business Analysis program results from crop farms
  • Ohio cash rental rates
  • Dairy Market Volatility Assistance Program
  • Highlights of FSR and upcoming programs

Who’s on the Farm Office Live Team? OSU experts ready to help farmers, landowners and agribusiness professionals navigate the issues we all deal with in the farm office.  Our team includes:

  • Peggy Kirk Hall – Agricultural Law
  • David Marrison – Farm Management 
  • Dianne Shoemaker – Farm Business Analysis and Dairy Production
  • Barry Ward – Farm Management and Tax 
To learn more and register for Farm Office Live, visit https://farmoffice.osu.edu/farmofficelive.  Recordings of our previous Farm Office Live webinars are also available at that site.

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The Ag Law Harvest

By: Jeffrey K. Lewis, Attorney and Research Specialist, OSU Agricultural & Resource Law 

Did you know there is a sea creature capable of producing bubbles that are louder than a gun and hotter than lava?  Pistol shrimp, also known as snapping shrimp, are the super-powered creatures under the sea that no one talks about.  These bite-sized crustaceans have a special claw that allows them to form the deadly bubble to shoot at unsuspecting victims or enemies.  The sound of the pop of the bubble has been measured at 218 decibels, which is louder than a speeding bullet, and the heat generated by the bubble has been measured to reach almost 8,000 degrees Fahrenheit, making the bubble four-times hotter than lava.  Like the pistol shrimp, we have brought you the heat in this edition of the Ag Law Harvest.  

This Ag Law Harvest brings you agricultural and resource issues from across the country that have created their own noise, including animal liability laws, the reversal of relaxed environmental regulations, and requiring federal agencies to consider the impact of future agency activities on the environment. 

Farmers and ranchers begin to enjoy new protections under Texas animal liability laws. Texas House Bill 365, which expands protections under Texas’ Farm Animal Liability Act (“FALA”), went into effect on September 1, 2021.  House Bill 365 was passed in response to a 2020 Texas Supreme Court ruling which found that farmers and ranchers were not protected under FALA and could be liable for injuries that occur on working farms and ranches.  The new law prevents an injured individual from holding a farmer or rancher liable for their injuries, so long as the injuries are a result of the inherent risks of being involved in routine/customary activities on a farm or ranch.   

Federal Court revokes Trump Navigable Waters Protection Rule. The U.S. District Court in Arizona recently ruled that the Trump Administration’s Navigable Waters Protection Rule (“NWPR”) must be vacated because the rule contains serious errors and the Trump Administration’s rule could do more harm than good to the nation’s waters if left alone.  Opponents of the NWPR argued that rule disregards established science and the advice of the EPA’s own experts in order to redefine the phrase “waters of the United States.”  Specifically, opponents to the Trump Administration’s rule voiced their concern that the NWPR failed to take into consideration the effect ephemeral waters would have on traditional navigable waters. And the Court agreed.  The Court found that the NWPR must be vacated because the rule “could result in possible environmental harm.”  The Court also reasoned that because the EPA is likely to alter the definition of “waters of the United States” under the Biden Administration, the NWPR should not remain in place.  Proponents of the NWPR claim that the Court’s ruling creates uncertainty for farmers and ranchers across the country.  

EPA revokes Minnesota attempts to relax feedlot regulations. Earlier this year, Minnesota passed a law that relaxed the requirements to obtain a “Feedlot General Permit.”  The Feedlot General Permit is usually only for Minnesota’s largest feedlots, some 1,200 farms.  The permits are required under federal clean water laws but enforced by the state.  Prior to the law being passed, the Minnesota Pollution Control Agency required those farmers that applied manure during the first two weeks of October to implement one of four approved nitrogen management practices.  However, Minnesota lawmakers wanted to relax those regulations by prohibiting regulatory authorities from requiring farmers to take new steps to limit nitrogen runoff during October.  But, the EPA “vetoed” Minnesota’s relaxed regulations, which it can do when a state’s law conflicts with a federal law or regulation.  The EPA sent a letter notifying Minnesota that the relaxed regulations would be inconsistent with the Clean Water Act (“CWA”) and would result in an improper modification to the Minnesota Pollution Control Agency’s authority to administer the National Pollutant Discharge Elimination System (“NPDES”), which administers the feedlot permits.  Proponents of the new Minnesota law claimed that the existing permits were not flexible enough and that regulatory authorities focused on an arbitrary calendar date rather than focusing on natural conditions when limiting a farmer’s ability to spread manure.  Opponents to Minnesota’s law argue that the EPA did the right thing by using “common sense improvements to prevent manure runoff.” 

Department of Homeland Security found to have violated environmental regulations for its border-enforcement activity.  The Center for Biological Diversity and U.S. Congressman Raul Grijalva (the “Plaintiffs”) filed suit in federal court claiming that the Department of Homeland Security and its agency, Customs and Border Protection, (the “Defendants”) violated the National Environmental Policy Act (“NEPA”) and the Endangered Species Act (“ESA”).  Plaintiffs alleged that Defendants failed to update their programmatic environmental analysis for border-enforcement activity since 2001, as required by NEPA, and that Defendants failed to consult with the U.S. Fish and Wildlife Service (“FWS”) about the impacts of border-enforcement activity on threatened or endangered species, as required by the ESA.  In its opinion, the U.S. District Court of Arizona ruled that the Defendants did violate NEPA but not the ESA.  The Court found that NEPA has two primary goals: (1) require every federal agency to consider the environmental impact of the agency’s actions; and (2) require the federal agency to inform the public that it has considered the environmental impact.  NEPA also requires a federal agency to supplement its environmental impact statement if there is ongoing action being taken by the federal agency.  The Defendants claimed they did not violate NEPA because they conducted and provided site-specific or project-specific environmental assessments.  However, the Court ruled that although the Defendants did conduct project-specific analysis, they are required to supplement their environmental impact statement for the activity/program, as a whole, unless they legally opt out of the supplementation, which Defendants did not do until 2019.  Therefore, the Court found the Defendants did violate NEPA prior to 2019.  The Court also ruled that the ESA does not require federal agencies to consult with the FWS on a broad and continuing basis.  The Court felt that the Defendants had met any requirements under the ESA by meeting with the FWS for any site-specific or project-specific analysis.  Although the Court found that Defendants had violated NEPA, the Court concluded that Plaintiffs had waited too long to bring the lawsuit and that no remedy was available to Plaintiffs for the previous procedural violations of NEPA.  

USDA announces changes to CFAP 2. The USDA’s Farm Service Agency announced changes to the Coronavirus Food Assistance Program 2 (“CFAP 2”).  As a result of the changes, contract poultry, egg, and livestock producers, and producers of “sales-based commodities” – mostly specialty crops – can modify existing or file new applications by October 12, 2021, using either 2018 or 2019 to measure lost revenue in 2020.  The changes were published on August 27, 2021, and can be found here.

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When is it appropriate to appropriate?

By: Jeffrey K. Lewis, Attorney and Research Specialist, OSU Agricultural & Resource Law Tuesday, August 31st, 2021

You may have been involved in or known someone that was involved in an eminent domain dispute with a utility company or other state agency.  When the government tries to take an individual’s property, emotions are understandably heightened.  In Ohio, state agencies and other specific entities – like a public utility company – can appropriate or “take” a person’s property, but only if the taking is necessary and for a public use.  If the government or governmental agency does appropriate a landowner’s property, then the landowner is entitled to compensation for the taking.  

In the case below, a group of landowners disputed a power company’s ability to appropriate their property and the ability of the power company to assume it is entitled to an appropriation simply because a project for public use was approved by state authorities.  The landowners also sought to clarify when a landowner is entitled to recover the costs associated with defending their property interests against an attempted appropriation by the state or state agency.

Ohio Power Company v. Burns, et al. 


In 2017, the Ohio Power Board of Directors (“Ohio Power Board”) gave initial approval for a project located in Marietta, Ohio to enhance the electric transmission network (the “Project”).  The Project included miles of new transmission lines and required siting, rights of ways, and some property purchases.  In 2018 the Ohio Siting Board (“Siting Board”) issued a certificate of environmental compatibility and public need for the Project.  In 2019, the Project was given final approval by the Ohio Power Board.  

After failed easement negotiations, the Ohio Power Company (Plaintiff) filed petitions for appropriation against several landowners (“Defendants”) to take easements on the Defendants’ property.  As required by Ohio law, the trial court held a hearing on the appropriation petitions (the “Appropriation Proceedings”).  Plaintiff argued that it currently possesses an easement across the property of each Defendant, but it was seeking to replace the existing easement with a new, wider easement for the Project.  Plaintiff claimed that the new easements were necessary for a public good and that the Siting Board recognized the necessity of the Project and of acquiring easements, rights of way, and other interests in property along the new power line. 

Defendants, however, responded by saying that the Siting Board declared the Project a necessity, not the appropriations.  Further, Defendants argued that the easements sought by Plaintiff were overly broad and that the terms of the proposed easements went beyond the necessity to promote the public use. Lastly, Defendants claimed that when Plaintiff was ordered to remove distribution line rights from its appropriation petition, Plaintiff voluntarily abandoned its appropriation which required the trial court to enter a judgement against Plaintiff for the costs associated with defending against the distribution line rights contained within the proposed easements.

The trial court determined that the Siting Board’s certification of the Project and the testimony presented at the hearing established that the appropriations were necessary under Ohio law.  Additionally, the trial court found that even if the Siting Board’s certificate did not create an irrebuttable presumption, the appropriations were still necessary because Plaintiff, as a public utility company, is in the best position to determine what is necessary and what is not. The trial court also held that Plaintiff did not abandon the appropriations simply by removing certain provisions from the petitions.  Defendants then appealed to the 4th District Court of Appeals.

The following is brief explanation of the 4th District’s opinion that both agreed and disagreed with the trial court. 

Rebuttable and irrebuttable presumption


Normally under Ohio law, a public utility company, like the Plaintiff, has to prove that it has the right to make an appropriation and/or that the appropriation is necessary.  Plaintiff can do this by presenting evidence at an appropriation hearing and if the judge is persuaded, then Plaintiff will be allowed to take the property. The important part is that the burden of proof is on the public utility company.  

However, there are a few situations where the law assumes that a public utility company or other state agency has the right to make an appropriation.  Further, those presumptions are either rebuttable or irrebuttable.  If the state agency has a rebuttable presumption, then the law will assume that agency has the right to make the appropriation or that the appropriation is necessary unless another party, like a landowner, can prove otherwise.  In these situations, the burden of proof switches from the state agency to the landowner to prove that the state agency does not have the right to an appropriation or that the appropriation is not necessary.  A state agency gets a rebuttable presumption when:

  1. A resolution or ordinance of the governing or controlling body, council, or board of the agency declares the necessity for the appropriation; or 
  2. The public utility company presents evidence of the necessity for the appropriation. 

A public utility company can also get an irrebuttable presumption about its right to an appropriation or the necessity of an appropriation.  This means that no evidence can be presented to prove that the state agency does not have the right to an appropriation or that the appropriation is not necessary.  A state agency receives an irrebuttable presumption when it receives approval by a state or federal regulatory authority of an appropriation.

In this case, the Defendants claimed that the Siting Board, which is a state regulatory authority, and the Ohio Power Board, the board of the agency, approved the project, not the appropriation. Therefore, Defendants argued that the rebuttable or irrebuttable presumptions did not apply to Plaintiff.  Plaintiff on the other hand thought that both the rebuttable presumption and the irrebuttable presumption applied, and because the irrebuttable presumption applied, Plaintiff argued that the trial court did not need to review the easements. Plaintiff maintained judicial review of the easements was not necessary because a jury would decide the scope of the easement at a compensation hearing for the taking. 

The trial court agreed with the Plaintiff and found that Plaintiff was entitled to an irrebuttable presumption of the necessity for the appropriation because of the Siting Board certification. Additionally, the trial court also found that Plaintiff was entitled to a rebuttable presumption because the Ohio Power Board declared the necessity for the appropriation of property interests for the Project. 

However, the appeals court disagreed.  The 4th District noted that the Plaintiff’s argument ultimately allows it to “take whatever property rights it wants. . .”  and the only constraint on Plaintiff’s power to take would be how much a jury determines Plaintiff must pay for the taking. The appellate court found Defendants’ argument to be persuasive.  The appellate court held that because the Siting Board and the Ohio Power Board only approved the project and not the specific appropriations at issue in this case, Plaintiff was not entitled to either a rebuttable or irrebuttable presumption.  Although the Ohio Power Board recognized “the necessity of acquiring easements or rights of way in connection with” the project, the board only recognized such a necessity in a broad sense.  The appellate court held that specific appropriations must be reviewed and approved before a state agency is entitled to the rebuttable or irrebuttable presumption under Ohio law. 

Deference


The Defendants also argued that the trial court erred when it did not review the proposed easements.  The trial court found that the Plaintiff is in the best position to determine the necessity of the easements.  The trial court, therefore, did not review the proposed easments and defered to the expertise of the Plaintiff to determine the legality of the easements.  Additionally, the court deferred any issues regarding the scope of the easements to a jury at the future compensation hearing.    

The court of appeals disagreed with the trial court and held that the trial court should have reviewed the easements and should have made a separate necessity finding as to each one.  The 4th District determined that courts are required to engage in the review of easements under Ohio law to make sure that (1) the state is not taking more property than necessary; and that the state is acting (2) fairly; (3) without bad faith; (4) without pretext; (5) without discrimination; and (6) without improper purpose.  The appeals court reasoned that a trial court’s role is a critical constitutional check on the state’s power.  The appellate court noted that it is a trial court’s duty to determine the extent of the taking and a jury’s duty to determine the amount of damages owed to a landowner as a result of the taking. 

Abandonment


Another issue in this case was whether Plaintiff “abandoned” its appropriation for distribution lines.  If Plaintiff was found to have abandoned its appropriation, then Defendants would be entitled to fees and other costs associated with defending their property interest. 

In its initial appropriation petition, Plaintiff included an appropriation for distribution lines across the Defendants’ properties.  However, during the appropriation hearing, Plaintiff conceded that it did not need an appropriation for distribution lines and only included the distribution line rights in its appropriation petition just in case it was needed.  Plaintiffs admitted that their proposed easement was broader in scope than necessary, and the trial court ordered that Plaintiff remove the distribution line rights from its petitions. However, the trial court did not find that Plaintiff abandoned its appropriation for distribution lines and did not award Defendants any fees and costs for the alleged abandonment.  

On appeal, Defendants argued that the trial court was wrong for not entering a judgment against the Plaintiff for fees and costs associated with defending against the appropriation for distribution lines. Plaintiff claimed that it did not abandon its petition because it essentially amended its petition, it didn’t drop its petition entirely. The trial court agreed with Plaintiff, reasoning that removing the word “distribution” from Plaintiff’s petition did not amount to an abandonment.  

The court of appeals agreed with the trial court that Plaintiff did not abandon its appropriation petition but still found that Defendants were entitled to recover costs associated with defending their property interests.  The 4th district found three scenarios when a landowner would be entitled to the costs associated with defending its property interest against a taking. Those three scenarios are: 

  1. When an agency, like a public utilities company, voluntarily abandons the appropriation proceedings; 
  2. When a trial court determines that the appropriation is not necessary or not for public use; and 
  3. When a trial court determines, at any time during the appropriation proceedings, that the agency is not entitled to appropriate “particular property.” 

Defendants argued that the court ordering Plaintiff to remove the distribution line rights from its petition constituted a voluntary abandonment under scenario 1.  However, the 4th District found that Plaintiff could have only voluntarily abandoned the appropriation proceedings before the trial court’s order. The appellate court reasoned that the voluntary part of scenario 1 is absent once a court orders a party to remove an appropriation from its petition. The 4th District also found that scenario 2 did not apply to this case either.  According to the appellate court, the trial court must dismiss the entire matter because the appropriations are not necessary or not for public use.  Because that did not happen in this case, the 4th District determined that Defendants cannot recover costs under scenario 2. 

Under scenario 3, however, the 4th District did find that Defendants were entitled to costs for defending against the distribution line rights in Plaintiff’s petition.  In this scenario, an agency can bring appropriation proceedings for various parcels, property rights, or other property interests.  Understanding that different rights can be disputed, the appellate court found that if a court determines an agency is not entitled to appropriate “particular property”, or in other words take a particular property interest, then the agency must reimburse the landowner for its costs and fees associated with defending that property interest.  The 4th District determined that because the trial court ordered the Plaintiff to remove the distribution line rights from its petition, the trial court determined that the Plaintiff is not entitled to appropriate the “particular property” – or in this case, the distribution line rights.  Therefore, the 4th District determined that Plaintiff must be ordered to pay Defendants for the costs associated with defending against the distribution line rights.  

Conclusion


Although this ruling doesn’t dramatically change Ohio law, it helps clarify the requirements and procedures that must be followed when a state agency petitions for an appropriation.  This ruling will be closely reviewed by public utility companies and other state agencies to ensure that they have all the required approvals before filing any petition for future appropriations.  View the 4th District’s opinion for more details

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A close look at the Growing Climate Solutions Act

By: Zach Ishee, J.D. Candidate ’23, University of Mississippi, Research Fellow, National Agricultural Law Center
Zach has been working with OSU’s Agricultural and Resource Law Program thanks to our partnership with the National Agricultural Law Center. 

A major piece of environmental legislation currently making waves is the Growing Climate Solutions Act (GCSA), S. 1251. The GCSA passed through the Senate with overwhelming bipartisan support, by a final tally of 92-8. The bill sponsored by Senator Mike Braun (R-IN) had 27 Democratic co-sponsors, 26 Republican co-sponsors, and one independent co-sponsor. Although it has been criticized by some for not doing enough, the final vote shows a willingness by this Senate to grapple with the issues surrounding the environment and the climate. 

Purpose of the Growing Climate Solutions Act

The goal of the GCSA is to ease the burden on farmers, ranchers, and foresters entering the voluntary carbon markets through the creation of the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification program. The program’s efforts will be focused on removing the technical barriers of entry into the marketplace. The program calls for certification of certain entities to improve accurate information flow to farmers, ranchers, and foresters. 

Timeline and Advisory Council

The Agriculture Secretary will have eight months from the bill’s passage to create the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification program. If the Secretary decides against the program, he must publish a detailed explanation of why he has decided against the program.  

An advisory council will be established to help the USDA create protocols for calculating, sampling, accounting, verification and reporting methodologies. The advisory council will be comprised of United States Department of Agriculture (USDA) representatives, Environmental Protection Agency (EPA) representatives, and agriculture industry representatives, among other qualified participants. The council must have at least twelve members from the agriculture industry and at least six active farmers or ranchers. The council is also required to have at least four members from the forestry industry. Other groups of participants are capped between two and four members but include members from the scientific research community, members of the private sector who deal in voluntary credits, and experts/professionals in the verification field.  In total, over half of those serving on the council will be farmers, ranchers, and private forest owners.

Certification

Once the protocols have been created, the USDA must provide information for how entities self-certify and instructions on how to assist the farmers, ranchers, and private forest owners. The bill will require the creation of a website exclusively dedicated to assisting the potential market participants on best practices. 

The certification granted by the USDA will allow an approved entity to claim they are a “USDA-certified technical assistance provider or third-party verifier for voluntary environmental credit markets”. Other entities, not approved by the USDA, that claim this certification or something substantially similar are subject to a monetary fine of $1,000 and become ineligible to participate in the program for five years. The certified entities will be audited at least annually to ensure compliance with USDA guidelines. 

Funding

The GCSA will receive $1 million in funding from 2022-20226 along with $4.1 million rescinded from the American Rescue Act of 2021. This relatively small amount of new funding is likely one of the reasons for such strong bipartisan support for this bill. 

Public Reception

Although this bill is a welcome start to addressing climate issues through agriculture participants, a few large questions remain. The bill does nothing to address some of the main concerns that industry experts have, for example the bill does not directly mention farmer data. Of course, data is an extreme concern for the participants in voluntary credit markets because of how much data must be turned over prior to verification of their created credits. It seems the advisory council will certainly address this issue, among others, but this bill does not create certainty with respect to data. It will be extremely important to keep track of the recommendations made by the advisory council and the USDA’s final decision on best practices as they will set the standard for voluntary credit markets moving forward. 

Multiple organizations have come out in opposition of this bill. Family Farm Action has criticized the GCSA for playing into the hands of the major agribusinesses, stating “Without strong, preemptive antitrust protections, a carbon credit program would pay these agribusinesses for their pollution, compounding the already-substantial challenges they pose to the food system and the planet.”Senator Jeff Merkley (D-Ore) has also vocalized his reasoning for being part of the minority voting against the bill saying, “I don’t believe that an offset system that subsidizes corporations’ continued pollution in front-line communities is the best strategy. Let’s set incentives that reduce pollution in both agriculture and front-line neighborhoods.” The opposition to this bill has almost completely been in the camp that the bill does not do enough, rather than outright opposition against the overarching theme of combating climate change. 

On the other hand, support for the GCSA has been easy to find. Kameran Onley, the Director of North American Policy and Government Relations for The Nature Conservancy has come out in support for the bill stating, “American farmers know that sustainability and profitability go hand in hand. This bill will help farmers improve their operations, build new revenue streams, and implement climate-smart practices to safeguard our environment for the future.” American Farm Bureau Federation President Zippy Duvall thanked lawmakers for the bipartisanship and further said, “The Growing Climate Solutions Act acknowledges the potential of climate-smart farming while ensuring farmers would be respected as partners who can build on our strong foundation of environmental stewardship.”The support for the bill has been focused on the Senate’s ability to work across the aisle to begin structuring a unified approach towards carbon credit markets. 

What’s next?

Clearly the bill still awaits a vote in the House of Representatives to make it to the President’s desk to become law. Although no timeline exists for a house vote at this point, good reason exists to believe it could make its way through the House quickly. As of right now a companion bill exists in the house, H.R. 2820, which goes by the same name, Growing Climate Solutions Act. The companion bill is substantially the same as the Senate bill, calling for the same advisory council and certification process. The House bill is sponsored by Rep. Abigail Davis Spanberger (D-VA-7) and co-sponsored by 33 Democrats and 19 Republicans, which is only further proof of the bipartisanship seen in the climate arena. The latest action on the House version of the Growing Climate Solutions Act was its referral to the House Committee on Agriculture April 22nd of this year. The Senate bill was received and held at desk in the House as of June 24th of this year. Although the House Agriculture Committee has yet to schedule a markup if the legislation, the bipartisan Problem Solvers Caucus has endorsed the bill. 

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