Southern Ag Today

Author: Tiffany Dowell Lashmet

  • US Supreme Court Finds Texas Landowners Can Pursue Takings Claim

    US Supreme Court Finds Texas Landowners Can Pursue Takings Claim

    The United States Supreme Court issued a unanimous decision in Devillier v. Texas, allowing Texas landowners’ takings claims to proceed against the State of Texas under an amended complaint.  [Read Opinion here.]

    Background

    A group of Texas farmers, ranchers, and rural landowners filed an inverse condemnation action against the State of Texas, claiming that the Texas Department of Transportation’s (DOT) widening of I-10 intentionally caused widespread flooding on their property, resulting in a taking for which they were due just compensation.

    The Plaintiffs brought takings lawsuits under both the Texas and United States Constitutions in Texas state court.  Texas removed the cases to federal court where they were consolidated into one case. Texas then filed a motion to dismiss claiming that the Plaintiffs were not entitled to sue directly under the Fifth Amendment.  

    The district court denied the Motion to Dismiss. Texas sought an immediate appeal of that order and the question of whether property owners may sue under the Fifth Amendment without invoking Section 1983.

    The United States Court of Appeals for the Fifth Circuit reversed in a one paragraph opinion, holding that the Fifth Amendment does not provide a right of action for takings claims against a state. See 53 F.4th 904.  

    The Plaintiffs sought review by the United States Supreme Court

    US Supreme Court Opinion

    Justice Clarence Thomas authored the unanimous opinion of the Court.  [Read Opinion here.] 

    The Court noted that this case raised only a question regarding the procedural vehicle by which a landowner may seek redress for a taking.  Typically, a lawsuit to invoke or assert a constitutional right is brought under the authority of another statute, such as 42 U.S.C. Section 1983.  The landowner argued that claims under the Fifth Amendment are an exception to this, meaning that the landowner believes the Fifth Amendment is “self-executing” and a claim can be brought based solely upon the Fifth Amendment.  Texas, conversely, argues that a claim under the Fifth Amendment must be based on a statutory basis.

    The Court noted that “our precedents do not cleanly answer the question whether a plaintiff has a cause of action arising directly under the Takings Clause.”  However, the Court continued, “this case does not require us to resolve that question.”  The Court held that the Texas state law inverse-condemnation cause of action provides the vehicle for a takings claim based on both the Texas Constitution and the Fifth Amendment of the US Constitution.  The Court held that because the landowners do have a state cause of action under which to litigate their federal Fifth Amendment claims, the Court need not address whether the Fifth Amendment is self-executing if no such statutory claim exists.

    In order for the landowners to rely upon the Texas inverse condemnation action, they will need to amend their Complaint, but Texas assured the Court it would not oppose such an amendment.

    Thus, the Court noted that the landowners should be permitted to pursue their Fifth Amendment claims under the Texas cause of action and can amend their Complaint to do so.  

    The judgment of the US Court of Appeals for the Fifth Circuit was vacated, and remanded the case.

  • Texas Farmers Sue USDA for Alleged Discrimination

    Texas Farmers Sue USDA for Alleged Discrimination

    A group of Texas farmers recently filed suit against the United States Department of Agriculture claiming that the USDA improperly discriminated against them in administering various disaster and pandemic relief programs. Plaintiffs in Strickland v. USDA challenge the USDA’s disparate treatment for certain producers based upon race and sex. The Plaintiffs assert that the USDA violated both the Equal Protection Clause of the US Constitution and the Administrative Procedures Act.

    Background

    The Plaintiffs note that over the past four years, Congress appropriated $13.7 billion to USDA to implement crop and livestock disaster assistance and nearly $11.2 billion to implement disaster assistance programs for coronavirus-related relief.  The USDA took these appropriated funds and implemented a number of programs to aid farmers and ranchers who lost income, crops, or livestock due to natural disasters or the pandemic.

    Complaint

    The Plaintiffs begin their Complaint with the following sentence summarizing their arguments:  “Natural disasters do not discriminate, and neither should the USDA.”  The Plaintiffs claim that the USDA based the amount of financial assistance provided by programs on race and sex despite a lack of Congressional authorization to do so. Plaintiffs note that the appropriations bills passed by Congress never mention race or sex.  The USDA, Plaintiffs claim, factored it in anyway.

    Plaintiffs assert that USDA used two different methods for calculating the amount and type of financial assistance for farmers and ranchers.  One method was used for producers falling within the following four categories:  (1) veteran farmers, distinguished by having served in the armed forces; (2) beginning farmers, distinguished by being new to the profession; (3) limited-resource farmers, distinguished by having low incomes, and (4) socially disadvantaged farmers, distinguished by being of a particular race or sex.  “Socially disadvantaged” farmers include American Indians or Alaskan Natives Asians or Asian-Americans, blacks or African-Americans, Hispanics or Hispanic-Americans, Native Hawaiians or other Pacific Islanders, and women.  The Plaintiffs claim producers falling within these categories were paid “significant additional benefits” such as refunds of insurance premiums, refunds of fees, automatic enrollment in certain programs to cover non-insured crops, or additional financial assistance.  For other farmers, the Plaintiffs claim, a second method of payment calculation was utilized.

    These actions, the Plaintiffs allege, are unlawful and unconstitutional.  The lawsuit claims that the USDA violated the Administrative Procedure Act by acting beyond the scope of authority granted by Congress.  Additionally, the USDA allegedly violated the Equal Protection Clause of the United States Constitution by discriminating and treating similarly situated farmers differently based on race and by discriminating and treating similarly situated farmers differently based on sex. Finally, the Plaintiffs claim the USDA violated the Administrative Procedure Act by shifting its policy on processing insurance refunds to a “progressive factoring” system.  By doing so, Plaintiffs claim, the USDA stopped providing refunds of federal crop insurance and NAP insurance premiums and fees to all farmers, without offering a reasoned explanation for this action as required by the APA. The Plaintiffs ask the court to hold these programs unlawful and to enter various declaratory judgments and injunctions preventing the USDA from implementing programs based on race or sex absent clear Congressional authorization. 

    Motion for Preliminary Injunction 

    A week after the Complaint was filed, the Plaintiffs filed a Motion for Preliminary Injunction seeking an injunction or stay against USDA to prevent the USDA from relying on discriminatory criteria as it issues disaster relief.  

  • US Supreme Court Will Not Hear North Carolina “Ag Gag” Appeal

    US Supreme Court Will Not Hear North Carolina “Ag Gag” Appeal

    Last week, the United States Supreme Court denied a Petition for Certiorari filed by the State of North Carolina and the North Carolina Farm Bureau Federation seeking review of a decision striking down a portion of the state’s Property Protection Act, often called an “ag gag” law.

    The law, passed in 2015, punishes “any person who intentionally gains access to the nonpublic areas of another’s premises and engages in an act that exceeds the person’s authority to enter.”  Activities that “exceed” authority include (1) capturing, removing, or photographing employer data, records, or documents in order to breach the person’s duty of loyalty to the employer, (2) capturing images or sound occurring on the premises in order to breach the duty of loyalty to the employer, (3) placing an unintended camera or electronic surveillance device on the employer’s property to record images or data, and (4) committing an act that substantially interferes with the ownership or possession of real property.

    The lawsuit was initially filed by People for the Ethical Treatment of Animals, the Animal Legal Defense Fund, and other animal rights groups who claim the law violates their First Amendment rights.  Earlier this year, the United States Court of Appeals for the Fourth Circuit held that the Property Protection Act was unconstitutional as applied to “newsgathering activities.”  As there will be no Supreme Court review, that decision will stand. 

    These “ag gag” laws have faced litigation around the country in an attempt to prohibit trespassing and falsifying information to gain access to agricultural facilities to conduct undercover surveillance.  To date, 11 states have passed some version of an “ag gag” statute.  The US Court of Appeals for the Eighth Circuit is considering whether to uphold a lower court decision striking down an Iowa law making it a crime to record video or audio on a “trespassed property.”  Portions or all of “ag gag” statutes have also been stricken as unconstitutional in Idaho, Kansas, Utah, and Wyoming.  The only statute to be challenged and fully upheld was Arkansas’ statute after a Motion to Dismiss was granted in the lawsuit challenging its constitutionality.

    For a compilation of all “ag gag” statutes and legal challenges, click here.  To listen to a discussion of these statutes and legal challenges, click here.

    United States Supreme Court Petition Information:  Stein v. PETA, 22-1150; North Carolina Farm Bureau Federation, Inc. v. PETA, 22-1148.

    Lashmet, Tiffany. “US Supreme Court Will Not Hear North Carolina “Ag Gag” Appeal.” Southern Ag Today 3(44.5). November 3, 2023. Permalink

    Photo by Jaxon Matthew Willis (Highpoint, NC): https://www.pexels.com/photo/aerial-photography-of-green-trees-and-body-of-water-13591082/

  • United States Supreme Court Upholds Proposition 12

    United States Supreme Court Upholds Proposition 12

    Last week, the United States Supreme Court issued its Opinion in National Pork Producers Council v. Ross.  The National Pork Producers Council (NPPC) challenged California’s Proposition 12, a law imposing certain animal welfare requirements such as pen size and space on pork sold in California, alleging that it violated the Dormant Commerce Clause.  

    The Dormant Commerce Clause essentially implies that because the United States Constitution expressly grants power to regulate interstate commerce to Congress, that, by implication, means such power is not vested with the states.  Here, NPPC argued that the California law had extraterritorial impacts on pork producers in other states, thereby violating the Dormant Commerce Clause.

    The Court issued a fractured Opinion affirming the lower courts’ grant of California’s Motions to Dismiss, with some portions agreed upon by each of the 9 Justices, and others garnering support from far fewer.

    The Justices unanimously agreed on two points.  First, the “antidiscrimination principle lies at the very core of” Dormant Commerce Clause jurisprudence.  Here, NPPC did not allege that Proposition 12 was facially discriminatory statute, admitting it applied equally to in-state and out-of-state pork producers.  Second, all Justices rejected NPPC’s argument that there is an “almost per se” rule that forbids state laws that have a “practical effect of controlling commerce outside the state.”  This was too broad a reading of the Dormant Commerce Clause for all of the Justices.  As the Court explained, “In our interconnected national marketplace, many (maybe most) state laws have the ‘practical effect of controlling’ extraterritorial behavior.”

    Where the Justices disagreed, however, was the proper scope and analysis under the Pike balancing test.  When a law has a substantial burden on interstate commerce, the Pike balancing test requires a court to balance the burden on interstate commerce against the local benefits from the law.  Some Justices held that the Court was not intended to, or able to, weigh such burdens.  Other Justices held that there was no proof of a substantial burden on interstate commerce, which means the Court should not reach the balancing test at all in this case.  Still others found that a substantial burden was alleged, but that the US Court of Appeals for the Ninth Circuit improperly applied the balancing test and would have remanded the case with instructions to correctly balance the interests.

    Where does this leave producers?  Currently, the regulations surrounding Proposition 12 are not set to go into effect until July 1, 2023. Another challenge alleging additional facts seeking to prove that Proposition 12 does impose a substantial burden could potentially be filed.  A similar law was passed in Massachusetts, and a lawsuit is currently pending challenging that law.  It is certainly possible that additional laws related to animal husbandry practices could be passed in other states as a result of this ruling. 

    For more information click here.

    Lashmet, Tiffany. “United States Supreme Court Upholds Proposition 12.” Southern Ag Today 3(20.5). May 19, 2023. Permalink

    Photo by Mark Stebnicki: https://www.pexels.com/photo/close-up-shot-of-pigs-2737178/

  • Beef Custom Harvest Agreement Considerations  

    Beef Custom Harvest Agreement Considerations  

    Many cattle producers utilize a custom-exempt processing facility in their direct-to-consumer businesses. In this scenario, the producer sells a live calf (or fractional share thereof) to the consumer and then delivers the live animal to the custom-exempt facility, where it will be processed for the purchaser.  

    Anyone using this approach should have a custom harvest agreement to memorialize the contractual agreement between the producer and purchaser. 

    The following topics should be considered when drafting a custom harvest agreement:

    • Description of product being sold.  Be clear in the agreement that it is the live animal being sold to the consumer, not the processed beef.  Be clear on what percentage of the animal the customer is purchasing. If selling a specific animal, be sure to include the ear tag number or other description of the animal.
    • Educational information.  Include information a purchaser may not realize, such as the difference between the live animal weight and boxed beef weight, the amount of freezer space needed for a full, half, or quarter beef, and a sample cut sheet.
    • How will payment be calculated?  Describe how the price for the animal will be calculated, such as a flat fee or price per pound.  If per-pound, will it be calculated on the live weight or hanging weight of the animal? 
    • When and how will payment be due?  Detail any required deposit amount. Set payment deadlines. Identify allowable payment methods. 
    • Processing fees.  Typically, the purchaser pays the processor directly, and this should be spelled out in the agreement. 
    • Reselling/donating meat from the animal is prohibited.  Make clear in the custom harvest agreement that due to federal law, the beef from this animal may not be resold or donated.  
    • Point at which animal is property of the buyer.  Make clear at which point in time the animal officially becomes the property of the buyer.  Certainly, this has to be done at least by the point in time when it is delivered to the custom processing facility but could be as early as when the initial deposit is made.  This is important in the event of the death of an animal prior to delivery to a processing facility. 

    A custom harvest agreement provides important information to the purchaser and ensures both parties are on the same page about the sales transaction. For more information on direct-to-consumer beef sales, click here.

    Lashmet, Tiffany. “Beef Custom Harvest Agreement Considerations.” Southern Ag Today 3(19.5). May 12, 2023. Permalink