The Ag Law Harvest

Written by: Evin Bachelor, Law Fellow, and Ellen Essman, Sr. Research Associate

Here’s a gathering of recent agricultural law news from OSU’s Agricultural & Resource Law Program:

FDA seeks comments, asking “what is milk?”  The Food and Drug Administration recently posted a request for public comment in the Federal Register regarding the labeling of plant-based products that use terms associated with dairy in their names.  The FDA explains that it wants to know how consumers use products like soy milk and whether such labels provide enough clarity to consumers.  The press releases can be viewed here.  The public may submit comments here until November 27th, 2018.

Sixth Circuit says Clean Water Act does not cover discharges into ground water.  The U.S. Court of Appeals for the Sixth Circuit, which includes Ohio, published an opinion on September 24th that seems to limit the extent of the Clean Water Act.  At issue in Tennessee Clean Water Network v. Tennessee Valley Authority was whether the TVA violated the Clean Water Act by dumping coal ash into a pond that was leaking into ground water that eventually would reach the Cumberland River.  The Fourth and Ninth Circuits previously published opinions saying that an underground “hydrological connection” between protected navigable Waters of the United States and unprotected ground water was enough to require a Clean Water Act permit.  In rejecting this approach, the Sixth Circuit creates a split that may send this question to the Supreme Court.  For now, the law in the Sixth Circuit, and therefore Ohio, is that a discharge into an underground water source that has a hydrological connection to a federal navigable water is not a discharge from a point source that triggers Clean Water Act protections.  The Sixth Circuit’s opinion is available online here.

Water Infrastructure Bill Headed to the President’s Desk.  After a bipartisan effort, Congress passed “America’s Water Infrastructure Act of 2018” on Wednesday with a 99-1 vote in the Senate.  The House had approved the bill by a voice vote in mid-September.  If signed by the President, the law would authorize the Army Corps of Engineer to carry out a variety of river and harbor improvements across the country, along with other conservation and water resource development projects.  The bill did not specifically earmark projects for Ohio, but it did authorize a Coastal Resiliency Study for the Great Lakes.  Also included in the bill was a reauthorization for the Safe Drinking Water Act, which authorizes the U.S. EPA to set drinking water standards and work toward reaching those standards.  Visit Congress’s website for the full text of the Senate Bill 3021.

States wait to decide on whether to end joint Ohio River standards.  Currently, the Ohio River Valley Water Sanitation Commission (ORSANCO) sets water quality standards and performs assessments for the Ohio River Basin.  Formed in 1948, ORSANCO includes representatives from Illinois, Indiana, Kentucky, New York, Ohio, Pennsylvania, Virginia, West Virginia, and the federal government.  The members of the commission were set last week to vote on whether to decentralize the setting of water quality standards, and instead have the individual states along the Ohio River set their own standards.  The vote was postponed in order to provide commissioners with more time to consider the proposal.  According to WCPO Cincinnati and Politico, opponents of the proposal say that this could harm water quality by allowing conflicting standards, while proponents argue that the commission’s role is redundant in light of the U.S. EPA’s jurisdiction over the Ohio River and its major tributaries.  Learn more about ORSANCO by visiting their website.

Multi-year and lifetime hunting and fishing licenses become available in Ohio.  As we reported in a Harvest post earlier this year, Governor Kasich signed a bill into law that created multi-year and lifetime hunting and fishing licenses for residents of Ohio, and that allows the Division of Wildlife to offer licensure “packages” for any combination of licenses, permits, or stamps.  The new license categories are codified in Ohio Revised Code section 1533.321.  On Tuesday, October 9, 2018, the Ohio Department of Natural Resources announced that the new multi-year and lifetime hunting and fishing licenses were available for purchase.  The options include 3, 5, 10-year, and lifetime licenses for three age categories—Youth (17 and younger), Adult (18-65), and Senior (66 and older).  More information on hunting and fishing licenses can be found here, including pricing, and where and how licenses can be purchased.

NAFTA 2.0 is now USMCA.  The Office of the U.S. Trade Representative has released the text of the proposed United States-Mexico-Canada Agreement (USMCA), which President Trump intends to use as a replacement for the North American Free Trade Agreement (NAFTA).  NAFTA is currently a federal statute, and replacing it will require an act of Congress.  The U.S. Trade Representative’s webpage contains official summaries and fact sheets regarding the agreement, along with the current text of the agreement.

 

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Understanding Ohio’s Line Fence Law

Since significant changes were made to Ohio’s Line Fence Law in 2008, landowners have contacted us with a variety of questions about how it works.  We have compiled many of the frequently asked questions in our new law bulletin, appropriately titled Ohio’s Line Fence Law: Frequently Asked Questions.  The law bulletin answers questions like:

  • Who has to pay for a new line fence?
  • Can I stop my neighbor from installing a new line fence?
  • Who has to pay for maintenance and upkeep of a line fence?
  • What is the role of the township trustees?
  • What happens when my neighbor and I disagree?

The new law bulletin is available here.  If you still have some questions about Ohio’s line fence law, check out the Line Fence Law section of our Ag Law Library here, including our more in-depth fact sheet and our explanation about line fence affidavits.

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Syngenta corn seed settlement claims due October 12

Those post cards advising producers of a $1.51 billion settlement in the Syngenta corn seed lawsuits are legitimate, and corn producers seeking compensation from the settlement must file claims by 11:59 p.m. on October 12, 2018.  The settlement is the result of class action and individual lawsuits alleging that Syngenta failed to receive import approval from China before selling its genetically modified Viptera and Duracade seeds in the United States, which led to the rejection of  U.S. corn shipments and a lowering of corn prices from 2013 to 2018.

Who can file a claim?

Three types of claimants that were involved in the U.S. corn market between September 15, 2013 and April 10, 2018 may file claims:

  • Corn producers, which includes any owner, operator, landlord or tenant who shared in the risk of producing any variety of corn, not just Syngenta varieties.  Landlords who operated under fixed cash leases are not eligible.
  • Grain handling facilities that purchased, transported, stored, handled and sold any variety of corn.
  • Ethanol production facilities that produced, purchased and sold dried distillers’ grains from any variety of corn.

How to file a claim?

File electronically through a secure, encrypted portal at www.CornSeedSettlement.com or download a printed form on the same website to file via U.S. mail.  Claimants must file using either a federal tax ID number or social security number and must file a separate claim for each Form 578 filed with FSA.  Note that the settlement claims administrator states that all claims information is confidential and will be destroyed after the payment of claims.

How much will a claimant receive?

Payments will vary and will depend upon the total number of filed claims.  For corn producers, the claims administrator will determine payments based on the following factors: (1) compensable recovery quantity as calculated by number of acres, ownership interest, NASS county yields and predetermined marketing year averages, (2) the year of planting, (3) the producer’s ownership interest, and (4) whether the producer purchased and planted Agrisure Viptera or Duracade seed or a different variety.

When will claimants receive payments?

A claimant might not receive a payment for about a year.  A court hearing to approve the settlement will take place in the U.S District Court in Kansas on November 15, 2018.  If the court approves the settlement, those who object to the approval can file appeals.  Final payments won’t occur until the court resolves all appeals, which could take about a year or more.

Must claimants report payments as income?

Class action settlement payments that compensate for the loss of business income should be reported for tax purposes.  Claimants should consult with tax advisors to determine IRS reporting requirements.

For more information, an extensive list of frequently asked questions about the Syngenta corn seed settlement is available here.

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Ohio Produce Company Found to Violate the Perishable Agricultural Commodities Act

By Ellen Essman, Sr. Research Associate

On September 25, 2018, USDA found a Cleveland, Ohio company to be in violation of the Perishable Agricultural Commodities Act, or PACA.  USDA initiated the complaint against Forest City Weingart Produce (Forest City) in November 2017.  Forest City’s failure to pay $716,689, collectively, to numerous produce sellers is considered “unfair conduct” under PACA.  The complaint was determined to be valid, and consequently, Forest City is not permitted to “operate in the produce industry” for a time.  Because USDA found Forest City’s violations to be “repeated and flagrant,” under PACA, the Secretary of Agriculture had the authority to revoke the company’s license.  According to USDA’s press release, Forest City will be able to reapply for a PACA license on September 21, 2020.  The principal officers of the company are also banned from being “employed by or affiliated with any PACA licensee” through September 21, 2019.  Since Forest City has been found to have violated PACA by participating in unfair conduct, the law states that the company is liable to those they took advantage of “for the full amount of damages,” which in this case, would be the aforementioned $716,689.

What is PACA?

PACA was passed in 1930.  The Act’s purpose is to promote “fair business practices” when buying and selling “perishable agricultural commodit[ies].”  A perishable agricultural commodity is defined in the law as “fresh fruits and fresh vegetables of every kind and character,” which can also be “frozen or packed in ice,” including “cherries in brine.”

PACA contains a list of what the law considers to be “unfair conduct.”  Such unfair conduct is unlawful for commission merchants, dealers, or brokers, who are essentially the middle-men of the perishable agricultural commodities industry, to engage in.  The following actions are deemed to be “unfair” under the law, and therefore illegal when the transaction is in interstate or foreign commerce:

  • Using any unfair, unreasonable, discriminatory, or deceptive practice when weighing, counting, or determining the quantity of a perishable agricultural commodity;
  • Rejecting or failing to deliver perishable agricultural commodities under the terms of the contract, if there is no reasonable cause for the failure;
  • Discarding, dumping, or destroying any perishable agricultural commodity received without reasonable cause;
  • Making a false or misleading statement, for a fraudulent purpose, in connection with any transaction involving a perishable agricultural commodity; failing or refusing to make full, prompt, payment in such a transaction; or failing to perform any specification or duty in such a transaction without reasonable cause;
  • Misrepresenting by word, act, mark, stencil, label, statement, or deed, the character, kind, grade, quality, quantity, size, pack, weight, condition, degree of maturity, or State, country, or region of origin of any perishable agricultural commodity;
  • Removing, altering, or tampering with any card, stencil, stamp, tag, or other notice upon any container or railroad car containing any perishable agricultural commodity, if such notice contains a certificate or statement under the authority or law or regulation of the federal or state government concerning the grade, quality, or origin of the commodity;
  • Making any change by way of substitution or otherwise in the contents of a load or lot of any perishable agricultural commodity after it has been officially inspected for grading and certification.

PACA also makes it mandatory for commission merchants, dealers, and brokers to be licensed.  In order to obtain a license, both an application and fee are required.  If all the requirements are met, the Secretary of Agriculture may issue the license.  Licenses can be annual or cover multiple years, depending on the type of entity licensed.  The Secretary may also suspend or revoke a license.

Violations, Complaints, and Liability

PACA specifically states that when any commission merchant, dealer, or broker is found to have participated in unfair conduct (discussed above), they are “liable” to those injured by their conduct “for the full amount of the damages sustained in consequence of such violation.”  Liability can be enforced through the complaint process or through the courts.  Complaints of unfair conduct can be sent to the Secretary of Agriculture up to nine months after the unfair conduct occurs.  Notifications of violations by merchants, dealers, or brokers can also be sent to the Secretary by officers of state agencies.  The Secretary is then able to investigate complaints and notifications.  If the investigation shows violations occurred, then the Secretary can “have the complaint served” on the violator.   If the alleged damages are more than $30,000, the Secretary must provide the violator with the opportunity for a hearing.  After a hearing, the Secretary can “determine whether or not the commission merchant, dealer, or broker has violated” any part of the law regarding “unfair conduct.”

Those interested in background information on PACA, fees, licensing, etc. can find it at the USDA’s website, here.  The federal regulations that accompany PACA are here.

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The Ag Law Harvest

Written by Evin Bachelor, Law Fellow and Sr. Research Associate

We’re back from another successful Farm Science Review!  Thank you to everyone who stopped by our booth to ask us questions and pick up law bulletins.  We received some great suggestions on new topics affecting agricultural law, so stay tuned as we post more to our Ag Law Blog and Law Library in the near future.

Here’s our gathering of ag law news you may want to know:

ODA reviews meat inspection rules.  Ohio’s meat inspection rules are up for review under the state’s Five-Year Review requirement.  The Ohio Department of Agriculture (ODA) recently posted the proposed changes to Ohio Administrative Code 901:2-1; 901:2-3; 901:2-6; and 901:2-7 for stakeholder comment on its website.  The primary changes to the substance of the rules are meant to bring them into compliance with new federal requirements that took effect earlier this year.  ODA also proposes to merge the interstate and intrastate regulations, which could change some rule numbers, but not necessarily their substance.  ODA will be accepting comments until Monday, October 1, 2018, which stakeholders may submit to AGReComments@agri.ohio.gov.

OSU explains tariff relief program and impacts.   Our good friend and economist Ben Brown and other policy experts in OSU’s College of Food, Agricultural, and Environmental Sciences recently published information that explains and analyzes the USDA’s response to the tariffs.  View a brief brochure that explains the Market Facilitation Program here.  View a longer report on the Market Facilitation Program and the impacts on farm income in Ohio here .

U.S. EPA petitions for new hearing on Chlorpyrifos registrations.  A panel of three judges on the U.S. Court of Appeals for the Ninth Circuit in San Francisco ordered the U.S. Environmental Protection Agency (EPA) to cancel chlorpyrifos registrations in August.  The judges cited scientific evidence that the chemical insecticide causes developmental defects in children.  The U.S. Department of Justice (DOJ), on behalf of the U.S. EPA, filed a petition on Monday, September 24th, requesting an en banc hearing on the decision.  If granted, an en banc hearing would involve all the judges who serve on the Ninth Circuit, rather than only the three judges who initially ordered the cancellation of the registrations.  The U.S. DOJ argues that the August decision was incorrect and that the court should allow the U.S. EPA to reconsider the insecticide’s registration.  For more details, check out The Progressive Farmer’s post here.

License needed to broker oil and gas leases in Ohio.  On Tuesday, September 25th, the Ohio Supreme Court decided that oil and gas leases fall within the statutory definition of “real estate.”  As such, a person who offers and negotiates an oil and gas lease must have a real estate broker’s license under Ohio Revised Code § 4735.01(A) and § 4735.02(A).  Check out Court News Ohio’s webpage for more details.

No “bill of rights” vote for Lake Erie.  The group Toledoans for Safe Water sought to put a “Lake Erie Bill of Rights” on the ballot this November as an amendment to the Toledo City Charter.  The amendment would have stated that Lake Erie and its watershed “possess the right to exist, flourish, and naturally evolve,” and that the citizens of Toledo have a right to a clean and healthy environment.  Enforcement would have been through a mix of revoking corporate licenses and privileges or criminal penalties if violated.  Despite having enough signatures, the Lucas County Board of Elections refused to place the issue on the ballot, saying that the amendment contained provisions beyond the City of Toledo’s authority.  The dispute made it up to the Ohio Supreme Court, which on Friday, September 21st, decided that Toledoans for Safe Water failed to prove that the Lucas County Board of Elections improperly denied their petition to place the issue on the ballot.  The court’s decision is here.

Iowa court makes owner liable for corporate liabilities.  An Iowa Court of Appeals decision recently allowed a plaintiff who was suing a biosolids management corporation to “pierce the corporate veil” and collect directly from the sole owner of the corporation.  The plaintiff obtained a judgment of $410,067 against the corporation for breach of contract after the corporation stopped performing its work.  However, the plaintiff could not collect against the corporation, and an Iowa Court of Appeals decided that the sole owner must pay the judgement.  The court said that the owner did not conduct the business or maintain its finances in a manner that demonstrates the existence of a separate legal entity from himself or his other businesses.  The owner co-mingled corporate and personal assets and accounts, failed to keep records, and had no bylaws or meeting records.  For more on the case, visit the Iowa State University’s Center for Agricultural Law and Taxation website here, or view the case opinion here.

California passes “home cooked food” law.  California’s governor signed a bill into law last Friday that allows cities and counties to authorize and permit residents to operate “microenterprise home kitchens.”  Assembly Bill 626 exempts qualifying businesses from some food service facility regulations to allow residents to sell prepared food from their home, while also recognizing the differences between a home kitchen and a commercial kitchen.  To qualify, among other things, the operation can have no more than one full-time non-family employee, the food must be sold direct to the customer, and no more than 60 individual meals can be prepared per week.  The bill’s full text and legislative analysis are here.

Barn wedding popularity continues to grow.  Fifteen percent of weddings in the United States took place in a barn last year, according to a survey published by the wedding planning site The Knot.  In comparison, only two percent of weddings took place in a barn as recently as 2009.  The popularity of wedding barns has become a point of contention in many states, including Ohio, because statutory zoning exemptions for agriculture have been used to exempt wedding barns from zoning requirements.  We explain Ohio’s zoning exemption for “agritourism” in this law bulletin.

Ohio legislation on the move:

  • Ohio Senate refers township bill to committee.  The Ohio House of Representatives passed House Bill 500 earlier this summer, and the bill has recently been referred to the Ohio Senate’s Local Government, Public Safety, and Veterans Affairs Committee.  House Bill 500 proposes to make a number of changes to Ohio’s township statutes, including a change to agricultural zoning regulations.  If passed as-is, the bill would allow a township to use zoning to regulate agricultural activities within any platted subdivision.  Under current law, townships are limited to a specified list of platted subdivisions that townships may regulate; however, the new law clarifies that the specified list is not intended to be exclusive.  For more information on the bill, view the bill analysis produced by the Ohio Legislative Service Commission, or visit the Ohio General Assembly’s website here.

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ODA again revises “watersheds in distress” rule

In an ongoing attempt to carry out Governor Kasich’s executive order to establish nutrient management requirements for agricultural nutrients within “watersheds in distress,” the Ohio Department of Agriculture (ODA) has made a second revision to its proposed rule package.  According to ODA, the proposed watersheds in distress rules “create a uniform, state-wide standard that governs the application of manure and fertilizer on frozen, snow-covered and rain-soaked ground” within areas designated as “watersheds in distress.” pursuant to Ohio Admin. Code 1501:15-5-20.  Those proposed standards include the following:

  • Manure and nutrient application restrictions.   Owners, operators and applicators shall not surface apply manure and nutrients (nitrogen and phosphorus) on more than 50 acres of land used for agricultural production on snow covered, frozen and saturated soil or when there’s a greater than 50% chance that precipitation would exceed one-half inch in 24 hours, unless the manure or nutrients are  injected, incorporated with 24 hours or applied to a growing crop.
  • Compliance with 590 standards.  Owners, operators and applicators must follow the conservation practices in USDA’s “Field Office Technical Guide,” also known as the “590 standards.”
  • Nutrient management plan (NMP) requirements.  Owners and operators within watersheds in distress must develop and comply with NMPs if applying nutrients on more than 50 acres or producing, applying, or received more than 350 tons or 100,000 gallons of manure annually by deadlines established by ODA, must submit an attestation of NMP completion to ODA, and must produce a copy of the plan within five days of a demand by ODA.  The rule outlines the requirements and standards for NMPs.
  • Ongoing compliance.  Owners and operators must update NMPs and attestations once every three years or when conditions change.
  • Enforcement.  The rule includes penalities for failure to comply with rule provisions.

ODA proposed the first rule package in July, accepted public comments on the rule, and published a revised rule package for public comments.   In response to the second round of comments, ODA has made another revision to the rule.  The agency states that it is now amending the rule “to require the Department to conduct an audit of at least 5% of the attestations submitted to determine compliance regarding completion of nutrient management plans.”  Explaining the purpose of the revision, ODA states that “support was voiced from certain stakeholders regarding the flexibility of farmers to apply manure and nutrients during the winter months when conditions were favorable and safe to apply. In contrast, other stakeholders raised concerns that agricultural operations would no longer have any restrictions on the application of manure and nutrients. Stakeholders also raised concerns regarding the Department’s ability to enforce the new proposals.”

The proposed watersheds in distress rule package is here and the business impact analysis for the rules is here.   The public may submit comments on the proposal to ODA at AGReComments@agri.ohio.gov until October 5, 2018. 

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Changes made to Ohio’s prohibited noxious weeds law

New changes to Ohio’s prohibited noxious weeds list took effect last Friday, September 14th.  In a previous blog post, we explained that the Ohio Department of Agriculture (ODA) was considering an update to the list as part of a mandatory five year review of all administrative rules.  ODA ultimately added 13 new species to the list, and removed 3 species.

Added to the list of prohibited noxious weeds are:

  • Yellow Groove Bamboo (Phyllostachys aureasculata), when the plant has spread from its original premise of planting and is not being maintained.
  • Field bindweed (Convolvulus arvensis).
  • Heart-podded hoary cress (Lepidium draba sub. draba).
  • Hairy whitetop or ballcress (Lepidium appelianum).
  • Perennial sowthistle (Sonchus arvensis).
  • Russian knapweed (Acroptilon repens).
  • Leafy spurge (Euphorbia esula).
  • Hedge bindweed (Calystegia sepium).
  • Serrated tussock (Nassella trichotoma).
  • Columbus grass (Sorghum x almum).
  • Musk thistle (Carduus nutans).
  • Forage Kochia (Bassia prostrata).
  • Water Hemp (Amaranthus tuberculatus).

Removed from the list are:

  • Wild carrot (Queen Anne’s lace) (Daucus carota L.).
  • Oxeye daisy (Chrysanthermum leucanthemum var. pinnatifidum).
  • Wild mustard (Brassica kaber var. pinnatifida).

Still on the list are:

  • Shatter cane (Sorghum bicolor).
  • Russian thistle (Salsola Kali var. tenuifolia).
  • Johnsongrass (Sorghum halepense).
  • Wild parsnip (Pastinaca sativa).
  • Grapevines: when growing in groups of one hundred or more and not pruned, sprayed, cultivated, or otherwise maintained for two consecutive years.
  • Canada thistle (Cirsium arvense).
  • Poison hemlock (Conium maculatum).
  • Cressleaf groundsel (Senecio glabellus).
  • Musk thistle (Carduus nutans).
  • Purple loosestrife (Lythrum salicaria).
  • Mile-A-Minute Weed (Polygonum perfoliatum).
  • Giant Hogweed (Heracleum mantegazzianum).
  • Apple of Peru (Nicandra physalodes).
  • Marestail (Conyza canadensis).
  • Kochia (Bassia scoparia).
  • Palmer amaranth (Amaranthus palmeri).
  • Kudzu (Pueraria montana var. lobata).
  • Japanese knotweed (Polygonum cuspidatum).

The revised list can be found online at Ohio Administrative Code § 901:5-37-01.  Readers may recall that the Farm Office’s Ag Law Library has a law bulletin on Ohio’s Noxious Weed Laws.  It has been updated to reflect the changes, and is available here.

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