Addressing the Legal Side of Spring Agritourism Activities

Written by: Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program

If you are an agritourism provider or are interested in learning more about agritourism, sign up for our AgritourismReady event on April 5th!  Details of the event are here.

Spring has sprung and many agritourism providers are busy gearing up for spring agritourism activities such as maple syrup production, school tours, and berry picking. Agritourism providers should take time this spring to review the key elements of Ohio’s new agritourism law and understand how the law affects the agritourism operation.

Ohio’s new agritourism law applies to qualifying farms, including you-pick operations and farm markets, when an agritourism activity is conducted on that farm.  A qualifying farm under the law is either at least 10 acres in size or a farm under 10 acres that grosses an average income of $2500 from production (the same requirements for qualifying for Ohio’s CAUV property tax program).  Agritourism activities include agriculturally related educational, entertainment, historical, cultural, or recreational activities.  Below are two important benefits of Ohio’s agritourism law that agritourism providers should review this spring: liability protection and zoning protection.

Liability Protection

One of the main benefits of the law is liability protection for agritourism providers against claims by participants injured as a result of an inherent risk of an agritourism activity. The law defines inherent risks to be dangers and conditions that are an integral part of the activity, including surface and subsurface land conditions, actions of wild animals and domestic animals other than vicious or dangerous dogs, dangers of farm structures and equipment, illness from contacting animals, feed or waste, and the participant’s failure to follow instructions or use reasonable caution.

There are several limitations and requirements under the law that impact this liability protection. Most importantly, agritourism providers must post signs either at the entrance to the farm or at each agritourism activity in order to receive liability protection under the law.  The signs must meet the specifications of the law.  For more information about posting signs and the law’s liability protection, our previous post on agritourism is here.

Zoning

Ohio’s agritourism law also provides some zoning protections to agritourism providers. Under the law, township and county zoning authorities cannot prohibit agritourism activities on farms.  But, townships and counties can regulate some factors related to agritourism to protect public health and safety. These factors include the size of structures used primarily for agritourism, setbacks for structures, ingress and egress from the parcel, and the size of parking areas.  A township or county that wants to regulate these limited factors must have provisions addressing the factors in the local zoning code.  We explain the zoning provisions of the agritourism law in more detail in our law bulletin, here.

Preparing for the 2017 Season

As agritourism providers prepare for the 2017 season, providers should take a few actions to ensure the benefits of the agritourism law for their operations:

  • Post the required signs at the entrance to the agritourism operation or at each agritourism activity. Also, consider adding your own signs to give instructions, guide visitors safely around the property or warn visitors of potential hazards.
  • Even with the law’s liability protection, make sure the property is as safe and clean as possible.  Spring is a good time to walk the property to identify any dangerous conditions that might put a visitor at risk and fix those conditions before inviting guests on the property.
  • Farms under 10 acres in size should take time to brush up on good recordkeeping practices. Farms that are under 10 acres may be required to prove that they qualify as a farm under the agritourism law by showing $2500 in gross receipts.  Be sure to maintain all records of farm income.
  • If starting a new agritourism activity, check the local zoning code to see if the township or county has zoning requirements for the few agritourism factors it can regulate.  Be prepared for a visit by the local zoning inspector and be ready to show the inspector that the activity falls under the new agritourism law’s zoning protections because it is “agritourism” conducted on a “farm.”

A full description of the Ohio Agritourism Law is available via our law bulletin here.

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Contentious Des Moines Water Works Litigation Comes to an End

Federal court dismisses Clean Water Act lawsuit against Iowa drainage districts

A federal district court has dismissed the controversial Des Moines Water Works lawsuit that put the agricultural community on edge for the past two years.  While the decision is favorable for agriculture, it didn’t resolve the question of whether the water utility could prove that nitrates draining from farm fields are harming the utility’s water sources.  The court’s dismissal prevents Des Moines Water Works from further asserting such claims.

The lawsuit by the Des Moines Water Works (DMWW) utility sued irrigation districts in three Iowa counties for allowing discharges of nitrates through drainage infrastructure and into the waterways from which the utility drew its water.  In addition to claiming that the discharges violate the federal Clean Water Act’s permitting requirements, DMWW also asserted nuisance, trespassing, negligence, takings without compensation, and due process and equal protection claims under Iowa law.   The utility sought monetary damages for the cost of removing nitrates from its water as well as an injunction ordering the drainage districts to stop the discharges with proper permits.

The federal district court first certified several questions of state law to the Iowa Supreme Court to clarify whether Iowa law provided immunity to the drainage districts for DMWW’s claims.   On January 27, 2017, the Iowa Supreme Court responded in the positive, explaining that Iowa drainage districts had been immune from damages and injunctive relief claims for over a century because drainage districts “have a limited, targeted role—to facilitate the drainage of farmland in order to make it more productive.”  The Iowa court also clarified that Iowa’s Constitution did not provide a basis for DMWW’s constitutional arguments.

Turning to the party’s claims in light of the Iowa Supreme Court’s ruling, the federal district court focused on the drainage district’s motion to dismiss DMWW’s claims based on the doctrine of redressability, which requires a showing that the alleged injury is likely to be redressed by a favorable decision.  The doctrine of redressability concludes that a plaintiff cannot have standing to sue and therefore cannot proceed in a case if the defendant doesn’t have the power to redress or remedy the injury even if the court granted the requested relief.

The drainage districts argued that they could not redress DMWW’s Clean Water Act claims because the districts had no power to regulate the nitrates flowing through the drainage systems.  The court agreed, stating that “DMWW seeks injunctive relief and the assessment of civil penalties against the drainage districts arising from alleged duties and powers that the districts simply do not possess under Iowa law.  DMWW may well have suffered an injury, but the drainage districts lack the ability to redress that injury.”

The federal district court also dismissed DMWW’s remaining claims against the drainage districts.  DMWW argued that the immunity given the drainage districts as described by the Iowa Supreme Court prevented DMWW’s remaining claims and thus violated the U.S. Constitution’s Equal Protection, Due Process, and Takings Clauses.  The federal district court found these contentions to be “entirely devoid of merit” and dismissed the state law claims of nuisance, trespassing, negligence, takings, due process and equal protection.  Because none of the counts against the drainage districts survived the court’s scrutiny, the court dismissed and closed the case.

What does the decision mean for agriculture?

The DMWW case was a futile but somewhat inventive attempt to allocate liability for nitrate pollution to the agricultural community.  “Unregulated agricultural discharges into Iowa’s rivers, lakes and streams continue to increase costs to our customers and damage Iowa’s water quality and environment,” said DMWW’s CEO Bill Stowe upon filing the lawsuit.  A public poll by the Des Moines Register soon after Stowe brought the DMWW lawsuit showed that 42% of the respondents agreed with him in believing that farmers should pay for nitrate removal from DMWW’s waters, while 32% thought those who lived in Des Moines should pay to remove the nitrates.

If the goal is to force agriculture to reduce nutrient run off or pay for the cost of removing nutrients from waterways, the DMWW case tells us that suing those who oversee agricultural drainage infrastructure projects is not the proper mechanism for accomplishing that goal.  So will the next strategy be to sue the farmers who use the nutrients and the drainage infrastructure?

One challenge in suing farmers directly for nutrient runoff, and the issue that was not addressed in DMWW, is whether nutrient runoff from farm fields carried through drainage systems constitutes a “point source” that requires regulation under the Clean Water Act, or whether nutrient runoff fits within the agricultural exemption under the Clean Water Act.  That law defines a “point source” as “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged,” but states that point sources do not include “agricultural storm water discharges and return flows from irrigated agriculture.”  What we still don’t know after two years of DMWW litigation is whether a court would put the transport of agricultural nutrients through drainage systems in the point source definition or would consider it an agricultural exemption from the point source definition.

A second challenge in an attempt to bring agricultural nutrients under the Clean Water Act is whether a plaintiff could prove the actual origin of a downstream nutrient—who applied the nutrient that ended up downstream?  DMWW sought to minimize this challenge by suing the drainage districts that oversee the entire region.   But DMWW still would have had to trace the nutrients to the region, a difficult task.

Meanwhile, the agricultural community expects that its voluntary efforts to reduce nitrate and phosphorus runoff from farm fields will positively impact water quality and reduce the possibility of more litigation like the DMWW case.   A multitude of voluntary efforts are underway, such as Iowa’s Nutrient Reduction Strategy and the flourish of cover crops in the Western Lake Erie Basin.  Ohio has also added a regulatory approach that requires farmers to engage in fertilizer application training.   Let’s hope these initiatives will reduce nutrient impacts before another party is willing to point its finger and agriculture and pursue a lawsuit like DMWW.

Read the federal district court’s decision in DMWW here.  Our previous post on DMWW is available here.

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Ohio Senate to Consider “Purple Paint Law” for Trespassing

The Senate Judiciary today heard testimony in support of a proposed change to Ohio’s criminal trespass laws.  The “purple paint law” proposed by Sen. Bill Coley (R-Liberty Twp.) allows landowners to use purple paint to alert potential trespassers of property boundary lines.  The purple paint would serve the same purpose as a “No Trespassing” sign by indicating that a person does not have permission to enter the property.

“It is often difficult for landowners, particularly owners who have large pieces of real estate, to maintain and replace their “No Trespassing” signs on a regular basis,” states Rep. Coley.  “This legislation amends Ohio’s criminal trespass law to allow purple paint to be a warning sign for trespassers.”

Ohio’s criminal trespass law establishes misdemeanor penalties for persons who knowingly or recklessly enter or remain on land of another without authorization from the landowner.  The law allows a landowner to notify a potential intruder that access is prohibited in several ways:  by actual communication, by fencing designed to restrict access, or by signage or posting in a manner reasonably calculated to come to the attention of potential intruders.  The proposed bill would clarify that “posting in a manner reasonably calculated to come to the attention of potential intruders” would include placing identifying purple paint marks on trees or posts around the property.  The purple marks would have to be readily visible vertical lines at least eight inches long, with the bottom of the mark being at least three feet but no more than five feet from the base of the tree or post and no more than 25 yards from the next paint mark.

Today’s committee hearing is the first for the bill.  If the legislation eventually passes through the House and Senate, Ohio would join a dozen other states around the country in allowing purple paint to mark property boundary lines for trespassing purposes. Similar laws exist in West Virginia, Kansas, Arizona, Montana, Arkansas, Idaho, Florida, Maine, North Carolina, Missouri, Illinois and Texas.

Follow the proposed purple paint law, SB 76, here.

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Regulating Livestock Welfare Remains an Issue Around the Country

Written by:  Ellen Essman, Law Fellow, OSU Agricultural & Resource Law Program

Livestock producers in Ohio have been subject to standards for the care of livestock since 2011 but animal welfare is still a topic of debate around the country. Most recently, attention turned to the care of livestock raised under the National Organic Program and animals raised in confinement in Massachusetts.   In this post, we examine the proposed federal organic standards and a livestock care ballot initiative passed in Massachusetts.  The discussion provides an opportunity to take a look at the status of Ohio’s livestock care standards.

Federal Organic Standards

On January 19, 2017, the USDA’s Agricultural Marketing Service (AMS) promulgated a final rule for the National Organic Program (NOP).  The rule concerns practices for organic livestock and poultry.  Namely, the rule “clarifies how producers and handlers participating in the NOP must treat livestock and poultry to ensure their wellbeing.”  These treatment standards are applicable at numerous times throughout the lives of livestock, including when the animals are transported or slaughtered.  Additionally, the rule spells out the amount and type of indoor and outdoor space organic poultry must have under NOP.  The rule also describes the timing and methods for physically altering livestock and poultry under NOP.  The rule allows “[p]hysical alterations…only…for an animal’s welfare, identification, or safety.”  For example, the rule limits the use of teeth clipping and tail docking in pigs, and prohibits the de-beaking of chickens or face branding of cattle.  Many other banned and limited alterations are spelled out in the rule, as well as provisions that require active monitoring of animal health and treatment of injuries, sicknesses, and diseases.  The rule was originally supposed to become effective on March 20, 2017.  The Trump Administration, however, has since instituted a regulatory freeze in order to review recently made regulations.   In response to the regulatory freeze, AMS pushed back the effective date to May 19, 2017.  Barring any decisions by the new administration to the contrary, the rule should become effective on that date.  More information concerning this final rule is available here.

Massachusetts voters approve livestock confinement ballot initiative

Some states have taken it upon themselves to address various aspects of animal welfare.  This past Election Day, Massachusetts passed Question 3, a ballot initiative concerning confinement of livestock.  Question 3, also called the Prevention of Farm Animal Cruelty Act, applies to farm owners and operators who raise breeding pigs, veal calves, and egg-laying hens within the state, and also to business owners and operators who sell products from such livestock within the state.  When the Act becomes effective on January 1, 2022, this will mean that any farmers or businesses selling their pork, veal, or eggs in Massachusetts, even if they are not physically located within the state, would have to comply with the state’s confinement rules.  The law prohibits the aforementioned livestock being “confined in a cruel manner,” meaning that the animals cannot be “confined so as to prevent [them] from lying down, standing up, fully extending [their] limbs, or turning around freely.”  There are certain exceptions to this rule, including during transport, at fairs, during a veterinary examination, etc.  When the Act goes into effect, violators will face a $1,000 civil fine per violation, and/or an injunction

Ohio Livestock Care Standards

As many will remember, Ohio has its own laws and regulations concerning livestock welfare.  Voters passed an amendment to the Ohio Constitution in 2009.  The amendment created the Ohio Livestock Care Standards Board, which was tasked with creating the actual “care standards” for livestock animals in the state.  The first of these “livestock care standards,” or rules, became effective on September 29, 2011.  Standards exist for different types of livestock and cover everything from acceptable euthanasia practices for each species, to the provision of food and water, to acceptable methods of transportation.  The board continues to meet regularly to review the care standards.

The regulations on livestock care include an investigation process initiated by complaints on potential violations of the standards.  Since the standards became effective, the Ohio Department of Agriculture has received a number of complaints and works with operators to bring them into compliance if the agency finds a violation. According to Farm and Dairy, there were 51 such investigations in 2012, 29 in 2013, and 23 in 2014.  In 2015, there were 33 investigations—23 of which resulted in no violations of the standards.   Producers can learn more about the livestock care standards at http://www.agri.ohio.gov/LivestockCareStandards.

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Pipelines, Property, and You: What Ohio Property Owners Impacted by Pipeline Projects Should Know

Written by:  Chris Hogan, Law Fellow, OSU Agricultural & Resource Law Program

Several major pipeline projects, which plan to crisscross the state, are in the final stages of preparation. As part of the planning process for a project, pipeline builders plot the path that the pipeline will travel across the state. That path inevitably crosses private landowners’ property. Some landowners may feel overwhelmed trying to understand the rights of private pipeline companies to cross private property in Ohio. The frequently asked questions discussed below should help answer some of the common questions about pipeline projects in Ohio.

Can a pipeline company come on to my property to conduct a survey?

Yes. Prior to building a pipeline, pipeline companies must select a route where the pipeline is to be constructed. A pipeline project usually crosses private property along a proposed route. When a pipeline must cross private property along the project’s route, the pipeline company will ask the landowner for an easement that allows for pipeline construction on the property. However, even before signing an easement, a survey of the property may be necessary to determine the feasibility of constructing a pipeline on the property. Therefore, a pipeline company may need to enter a landowner’s private property to conduct a survey.

In Ohio, the law allows private companies that are organized “for transporting natural or artificial gas, petroleum, coal or its derivatives . . . through tubing, pipes or conduits” to enter upon private land to examine or survey for pipelines. This means that a pipeline company organized for these specific purposes does have the right in Ohio to enter onto a landowner’s property to conduct a private survey for the purpose of pipeline construction.

A pipeline company is telling me that they might use Eminent Domain to acquire my property. Is that legal?

Most likely, yes. A pipeline company may negotiate an easement with landowners which compensates landowners in exchange for the right to build a pipeline. However, landowners may not want to give a pipeline company the right to cross their property. In that scenario, pipeline companies have the option of crossing a landowner’s property by using eminent domain. Eminent domain is the taking of private property for public purposes with compensation.

In Ohio, the same law that allows for companies that are organized “for transporting natural or artificial gas, petroleum, coal or its derivatives . . . through tubing, pipes or conduits” to enter upon private land for survey also allows those same companies to use eminent domain to take private land. The law states that a company organized for the above purpose “may appropriate so much of such land, or any right or interest [to the land], as is deemed necessary for the laying down or building of pipes . . .” This suggests that pipeline companies have the power of eminent domain in Ohio.

Some argue that the law only grants eminent domain rights for transporting gas, and does not extend the right of eminent domain for the transport of gas derivatives such as ethane. While there is not strong legal support for this argument, it is under litigation in Ohio courts.

To use eminent domain, the pipeline company must prove that the landowner and the company were not able to reach an agreement about granting a pipeline easement and that the taking of the pipeline easement is “necessary.” A pipeline company must establish that the taking of property will serve a “public use.” Ohio courts have noted that the term public use is flexible. Accordingly, Ohio courts have held that private pipelines are a public use if those pipelines provide an economic benefit to Ohio. After establishing necessity and public use, the pipeline company must follow the procedures for eminent domain in Ohio Revised Code Chapter 163.

For an interstate pipeline that runs between Ohio and another state, federal law could allow a company to use eminent domain to obtain land from unwilling landowners. Federal law states that a company may acquire property rights for a gas pipeline if the company has obtained a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission and the company and landowner have not been able to agree on compensation for the pipeline easement. See 15 USC §717(F).

What about the pipeline cases that are in court right now, do those affect my rights?

Ohio landowners have probably heard about several high-profile pipeline projects that are planning to cut across the state. Some landowners have challenged the construction of these pipeline projects on their property.  These landowners are challenging the right of the pipeline companies to use eminent domain to acquire an easement on their property. Two pipeline projects in Ohio are of particular interest: Kinder Morgan’s Utopia Project and Rover Pipeline LLC.

A court in Wood County, Ohio decided in 2016 that Kinder Morgan’s Utopia Project, which plans to run across Ohio and into Canada, did not have eminent domain authority. The court concluded that the pipeline did not “serve the public of the State of Ohio or any public in the United States.” The court based its conclusion on the fact that Utopia did not provide a benefit to Ohio. However, Kinder Morgan quickly appealed that case to Ohio’s Sixth Circuit Court of Appeals. Therefore, this opinion is on hold while a higher court decides whether it agrees with the lower court’s interpretation of the eminent domain law.

A second high-profile pipeline case involves the right of Rover Pipeline LLC to use eminent domain for an interstate pipeline project. The Federal Energy Regulatory Commission issued this pipeline project a certificate of public convenience and necessity on February 2, 2017. As a result, Rover Pipeline LLC is moving forward with construction on landowners’ property, because a federal court found that the pipeline company has eminent domain authority.

So how do these court cases affect landowners? First, landowners should be aware that other pipeline projects in Ohio likely have eminent domain authority, if they meet the requirements for eminent domain described by Ohio law. Second, landowners should be aware that that the pipeline case that began in Wood County and is currently being appealed is still pending. It is important to note that this case is reviewing the Utopia Project’s right to use eminent domain in Ohio. Therefore, this does not mean that all pipeline companies in Ohio no longer have the right to use eminent domain to acquire private property in Ohio. Instead, this case will determine the fate of that particular pipeline project and whether or not that project has the right to use eminent domain to acquire an easement. In the meantime, pipeline companies continue to have the right to use eminent domain in Ohio.

More information on pipelines in Ohio and resources for landowners considering signing an easement is available here.

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A Worrisome Week for WOTUS

Written by: Ellen Essman, Law Fellow, and Peggy Hall, Asst. Professor, OSU Agricultural & Resource Law Program

 The controversial “Waters of the United States” (WOTUS) Rule suffered two governmental assaults this week.   We reported earlier this year about litigation over the Rule and a Senate Resolution urging withdrawal of the Rule.   Actions this week in the House of Representatives, the White House and the EPA echo the Senate’s sentiments and push the Rule further towards its demise.

The House Resolution

In the U.S. House of Representatives, Ohio’s Representative Bob Gibbs introduced a resolution on February 27, 2017 stating that the Rule should be vacated.  House Resolution 152 declares that the Clean Water Act (from which the Rule derives) is one of the nation’s most important laws whose success requires cooperative federalism, under which federal, state and local governments have a role in protecting water resources.   Based upon the foundation of cooperative federalism, “Congress left to the States their traditional authority over land and water, including farmers’ field, non-navigable, wholly intrastate water (including puddles and ponds), and the allocation of water supplies.”  The Resolution asserts that the latest revision to the Rule, however, claimed broad federal jurisdiction over water that encroaches upon the authority of the States and undermines the Clean Water Act’s historical exemptions from federal regulation.  The Resolution also claims that the EPA failed to follow proper processes when issuing the Rule.

 The Executive Order

 President Trump’s executive order  (EO) issued on February 28, 2017 calls for the EPA and the Army for Civil Works (“Civil Works”, a part of the Army Corps of Engineers) to “rescind or revise” the WOTUS Rule.  It is important to note, however, that the EO does not abolish the Rule; it simply orders the two agencies to review the Rule and try to adapt it to the Trump administration’s policies.   The EO includes a policy statement explaining that it is in the best interest of the United States to keep “navigable waters… free from pollution,” but there is also a strong interest in promoting economic growth, so any changes to the Rule must balance both of those interests.  The EO also gives the Attorney General the discretion to communicate any potential changes to the WOTUS Rule to federal courts with pending WOTUS litigation.

The EO further directs the EPA and Civil Works, when revising or rescinding the WOTUS Rule, to construe “navigable waters” as Justice Scalia did in the Supreme Court case Rapanos v. U.S.   Under the Clean Water Act, “navigable waters” are defined as “waters of the United States, including territorial seas.”  This means that the terms “navigable waters” and “waters of the United States” are interchangeable.   In Rapanos, Justice Scalia, who wrote the decision for a plurality of the Court, asserted that navigable waters/WOTUS cannot be “ordinarily dry channels through which water occasionally or intermittently flows.”  Instead, they must be “relatively permanent, standing or flowing bodies of water,” or wetlands with a “continuous surface connection” to permanent water bodies.   Scalia’s interpretation is at odds with the interpretation contained in the Obama administration’s WOTUS Rule.

Agency Response to the Executive Order

EPA Administrator Scott Pruitt and Civil Works acting Secretary Douglas Lamont didn’t waste any time responding to Trump’s EO.  On the same day Trump signed the Order, the agencies filed a Notice of Intention to Review and Rescind or Revise the Clean Water Rule.  In the notice, the agencies explain their intentions to follow the EO, review the Rule and consider adopting Justice Scalia’s interpretation of navigable waters.   The agencies state that they will utilize new rulemaking to “provide greater clarity and regulatory certainty concerning the definition of ‘waters of the United States.’”

 Refresher:  What’s in the WOTUS Rule?

The Obama Administration’s WOTUS Rule was released in the Federal Register on June 29th, 2015, and went into effect on August 28th, 2015.  According to the EPA and the Army Corps of Engineers at the time, the rule was meant to “clarify the scope of ‘waters of the United States’…protected under the Clean Water Act.”  In particular, the Rule states that a number of bodies of water qualify as WOTUS, such as: “tributaries to interstate waters, waters adjacent to interstate waters, waters adjacent to tributaries of interstate waters, and other waters that have a significant nexus to interstate waters.”  The Rule elaborates on the definition of “tributaries,” which are WOTUS if they flow “to a traditional navigable water, an interstate water, or the territorial seas,” regardless of whether the flow is year-round, seasonal, or due to precipitation.  Tributaries flowing into navigable and interstate waters that have “a bed and banks,” as well as “an indicator of ordinary high water mark” qualify as WOTUS under the Rule.  “Adjacent waters” means “all waters located in whole or in part within 100 feet of the ordinary high water mark” of WOTUS, as well as “all waters within the 100-year floodplain” of WOTUS.   Numerous different kinds of water can be “adjacent,” such as “wetlands, ponds, lakes, oxbows,” and “impoundments.”   More information about the WOTUS Rule is available here.

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Farmers Have One Month to Decide Whether to Stay in Syngenta Litigation

Farmers are receiving a lot of attention from law firms these days, from video mailers to offers of free consultations, dinners, hats and more.  The purpose of these marketing efforts is to entice farmers away from participating in the current class action lawsuit against Syngenta.  Law firms want farmers to exclude themselves from the class action litigation and participate in individual lawsuits their firms would bring against Syngenta.  With a deadline of April 1 looming, farmers must decide whether to remain in or step away from the class action lawsuit.

The class action lawsuit, known as “In re Syngenta AG MIR162 Corn Litigation,” is pending before the U.S. District Court in Kansas.  It is one of two major lawsuits regarding corn rejected by China in 2013 because China had not yet approved Syngenta’s Duracade and Viptera brands of genetically-modified corn.  The lawsuit consolidated hundreds of similar federal court cases that all claimed that Syngenta should be liable for the drop in corn prices that followed China’s rejections because Syngenta stated that it had obtained all necessary regulatory approvals for Duracade and Viptera, but instead released the seed before receiving China’s approval.

Class Certification

Last September, the court certified the litigation as a class action lawsuit, which allows the case to commence on behalf of all class members.  Any farmer that fits within the class definitions is automatically included in the lawsuit and does not have to pursue individual litigation against Syngenta.  The court established a nationwide class of “producers,” defined as any person or entity listed as a producer on an FSA-578 form filed with the USDA who priced corn for sale after November 18, 2013 and who did not purchase Viptera or Duracade corn seed (farmers who used Syngenta’s seed have different legal claims).  The nationwide class is for producers bringing claims under federal law.  The court also certified eight state classes for producers bringing claims under state laws, including Ohio.  Syngenta appealed the class certification, but the Tenth District Court of Appeals denied the appeal.

Ohio farmers who fit the definition of “producers” are now automatically members of both the nationwide and Ohio classes.  This means that every Ohio producer can receive a share of any award or settlement that results from the litigation, with required documentation.  However, Ohio producers may choose to exclude themselves from or “opt out” of their classes and bring their own individual actions against Syngenta.  The district court required attorneys for the class action suit to notify all potential producers of the lawsuit and of a producer’s right to be excluded from the litigation.   A producer must send an exclusion request by April 1, 2017, following the process for exclusion stated in the court’s order, available here.

Pros and Cons of Staying in the Class

A major benefit of remaining in the class action lawsuit is convenience.  Class members in the lawsuit have no responsibility for the proceedings, which falls upon the attorneys who represent the entire class.  However, convenience comes at the cost of deferring decision making authority and losing a share of the award or settlement to court-ordered attorney fees, although class members may file objections to such decisions.  Exclusion from the class gives producers freedom to pursue their own actions, which will likely lead to a stronger role in decision making and the ability to negotiate attorney fees.  Exclusion also allows a farmer who may not agree with the litigation on principal to dissociate from the lawsuit.

What’s Next?

The court has scheduled “bellwether” cases in the lawsuit, which will go to trial in June.  Bellwether cases are chosen to be representative of the class.  Allowing these cases to go to trial gives an indication of how the litigation will play out—the strength of each side, how juries react and how the law applies to the situation.   Upon completion of the bellwether cases, both sides should be better able to decide whether to settle the lawsuit or continue with litigation.

The U.S. District Court’s website for the Syngenta class action lawsuit is http://www.ksd.uscourts.gov/syngenta-ag-mir162-corn-litigation/

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