Author: Paul Goeringer

Disclaimer: This article is provided for purely educational purposes, and the reader should check to see if state policy has changed since its posting.  

            The question often asked by landowners considering leasing a portion of their property for solar development is, what happens at the end of the lease?  The answer to this question often depends on current state policy and the decommissioning clause negotiated in the lease.  While this is a rapidly developing topic, we provide a current synopsis of both in the paragraphs that follow. 

Based on a cursory review of state law – and as summarized in Table 1 – there is a considerable amount of variability across the South.  For example, 6 states require some form of decommissioning plan, with 4 of those also requiring assurance that funds will be available to decommission the solar project at the end of its life.  Another 3 states have legislative action pending and/or have developed a model ordinance for local government (e.g. Georgia).  Finally, 4 states have no statewide decommissioning regulations.  

With respect to decommissioning clauses negotiated into leases, lease terms often state that the facility will be removed and potentially include a bonding requirement.  Landowners should often consider negotiating a decommissioning clause that considers current state policy plus how to restore the land in the future once the solar facility is removed.

            When presented with a lease for a solar energy facility, landowners should have a clause that deals with decommissioning and cleanup of the site.  Depending on the state, these clauses can either enhance the existing decommissioning policy or dictate how the cleanup process will occur.  The typical lease should require the company to remove all its Solar Facility, including the panels, posts, and concrete pads, and typically remove wiring down to plow depth.  Some leases may go beyond this clause and require the solar company to put up a bond to cover the necessary cleanup costs.  Landowners often request a bond to assist with potential cleanup costs if the solar company defaults on the required cleanup of the facility.  Many state policies related to solar decommissioning also require putting up bonds to cover necessary cleanup costs.  

            As a landowner presented with a solar lease, what should you consider as it relates to decommissioning a solar facility? First, take a moment to consider the location of the facility.  What features exist on that piece of property that need to be restored?  How do you want to see the site restored? Next, negotiate how the site should be restored to allow the land to return to productive agricultural use.  Take photos to demonstrate the current conditions and to give future parties an understanding of what the site initially looked like.  Taking the time to document the land’s condition and negotiate a decommissioning clause that considers state policies at the time will allow for the site to be decommissioned in a way that reduces potential conflicts in the future.

Table 1.  Summary of State Decommissioning Regulations in the South

Goeringer’s work is supported by the Agriculture and Food Research Initiative (AFRI) program, grant no. 2020-68006-31182/project accession no. 1022637, from the U.S. Department of Agriculture, National Institute of Food and Agriculture.  Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author. They should not be construed to represent any official USDA or U.S. Government determination or policy.

Goeringer, Paul, and Bart L. Fischer. “Riding off into the Sunset: State Policies and Contract Provisions That Impact Decommissioning a Solar Facility.” Southern Ag Today 3(18.5). May 5, 2023. Permalink

Image Credit: A herd of cattle grazing near a solar panels by Dzmitry Palubiatka

Over the past few months, two potential class action lawsuits have been filed in South Carolina and Georgia by former poultry growers for Amick Farms and Perdue Farms, claiming that growers are not independent contractors as stated in their contracts but employees.  In the lawsuits, the former growers claim that both companies miscategorized growers and failed to pay growers a minimum wage and overtime.  The cases are Diaz v. Amick Farms, LLC, No. 5:22-CV-01246, and Parker v. Perdue Farms, Inc., No. 5:22-cv-00268-TES.

Class action lawsuits allow the judicial system to manage lawsuits that could potentially be unmanageable. Cases would become unwieldy if each potential class member were to bring a lawsuit.  In class actions, the class members must share common questions of law or fact, with proposed claims or defenses typical for each member.  At the same time, class actions require that the size of the potential class makes it impractical for all the members to join in and that the class representatives can adequately protect the interests of the entire class.

In both lawsuits, the former growers claim that the poultry companies miscategorized the growers as independent contractors and that growers should be treated as employees.  As employees, the growers are entitled to be paid the minimum wage required under federal law.  At the same time, one of the lawsuits argues that the growers are entitled to overtime pay for all work over 40 hours per week.  The growers claim that the tournament system used to compensate growers did not provide a wage above the minimum wage for hours worked by the growers.  Additional claims were filed, but for now, these are the ones we are focusing on.

It will be interesting to watch if these lawsuits are certified as a class action lawsuit and which federal district court will be given jurisdiction over the class action suit.  All this could happen in 2023, and poultry growers should continue to keep an eye on this litigation.

Author: Paul Goeringer

Senior Faculty Specialist

lgoering@umd.edu

Poultry growers may have started to receive settlement forms recently for a broiler grower class action lawsuit settlement.  Defendants involved in the lawsuit include Koch Poultry, Pilgrim’s Pride, Sanderson Farms, Tysons, and Perdue, and several co-conspirators, including Agri Stats, Foster Farms, Mountaire Farms, Wayne Farms, George’s, Inc., Peco Foods, Inc., House of Raeford Farms, Simmons Foods, Keystone Foods, Fieldale Farms Corp., O.K. Industries, Case Foods, Marshall Durbin Companies, Amick Farms, Inc., Mar-Jac Poultry, Inc., Harrison Poultry, Inc., and Claxton Poultry Farms.  At this point, Perdue and Tyson have not agreed to the settlement, but their growers are still included in the settlement process.  Growers might be surprised to receive this form in the mail and may have questions about the case and settlement.  There is a website designed to answer questions about the settlement process (https://www.broilergrowersantitrustsettlement.com/koch-settlement/), which includes many important deadlines for broiler growers.  Answers to many of the important questions growers may have, including how much money each grower will receive and whether additional integrators will, are currently unknown.  

            Originally filed in 2017 in the federal district court for the Eastern District of Oklahoma, the lawsuit alleges that several integrators colluded in the broiler market.  According to the court filings, the plaintiffs alleged that the integrators agreed not to poach growers.  In addition to the no-poaching agreement, the integrators also allegedly used Agri Stats to share detailed data about their operations.  Although this data shared through Agri Stats is anonymous, it is highly detailed, making it possible for companies to distinguish various operations.  This data is also non-public — private data only available to the integrators, according to the court filings.  By sharing this detailed data with Agri Stats, the integrators could collude to lower grower compensation.

            Growers for all these companies will receive settlement forms as potential class members impacted by the lower grower compensation amount due to the alleged collusion.  Growers receiving settlement forms will need to pay attention to certain dates.  The first important date is Sept. 23, 2022, for postmarking requests to be excluded from the settlement. A party always has the right to be excluded from a settlement.  When a party elects, they often have the right to sue for similar claims on their own or do nothing.  To have that opportunity, a grower must opt out by the September 23 deadline.  Second, all claims’ forms must be submitted online or be postmarked by February 6, 2023.  Please check the website at https://www.broilergrowersantitrustsettlement.com/koch-settlement/ for additional information to determine if a grower wants to be part of the settlement or if a grower notice mistakes on the settlement form.  

Goeringer, Paul. “Broiler Grower Settlement Forms Arriving to Growers: Background on the Class Action“. Southern Ag Today 2(38.5). September 16, 2022. Permalink