Category: Ag Law

On August 25, 2026, the U.S. District Court for the Eastern District of California issued a ruling in United Farm Workers v. United States Department of Labor, 1:25-cv-01614-KES-EGC, holding that the 2025 Adverse Effect Wage Rate (AEWR) Interim Final Rule (IFR) was unlawful under the Administrative Procedures Act (APA).

Background

On October 2, 2025, the U.S. Department of Labor (DOL) published an IFR altering the methodology used to calculate the AEWR for the H-2A Program. There were four key components of the new rule:

1. DOL will utilize the Occupational Employment and Wage Statistics (OEWS) survey, instead of the discontinued USDA Farm Labor Survey (FLS) as its data source for wages.
2. DOL selected five Standard Occupational Classification (SOC) codes that most H-2A jobs are performed under. The job duties that the worker spends most of their time performing will be used to determine which classification code and AEWR they are paid.
3. DOL created a tiered system, dividing H-2A workers into skill level I and skill level II. Each skill level will get a separate AEWR.
4. The new AEWR methodology will include an adjustment on the worker’s hourly wage for the cost of hosting provided by the employer.

Typically, under the APA, final rules must go through a notice and comment period, where the public can submit comments and the agency must consider the comments when promulgating the final rule. For the AEWR IFR, DOL utilized the “good cause” exception under the APA to bypass notice and comment rulemaking.

On November 21, 2025, the plaintiffs filed suit alleging that the IFR violated the APA because it was “arbitrary and capricious,” and DOL “failed to demonstrate good cause to bypass notice-and-comment rulemaking.”

Arbitrary and Capricious Challenge

The plaintiffs alleged that all four components of the IFR are “arbitrary and capricious” under the APA. Under the APA, an agency action is arbitrary and capricious if “the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”[i] The court evaluated each component separately under the arbitrary and capricious standard.

Tiered System

Historically, the DOL set the AEWR at the mean wage for all workers in a specific state or region. Within the IFR, DOL stated that “setting AEWRs at the mean would tend to overstate wages for similarly employed American agricultural workers with less experience and understate wages for similarly employed American agricultural workers with more experience.”[ii] To remedy this, under the new tier system, DOL will set a wage for each of the five SOC codes under two tiers. The wage for a skill level I worker will be set at the 17^th wage percentile for all workers and the wage for a skill level II will be set at the 50^th wage percentile. DOL claims that over 90% of H-2A workers will fall under skill level I. The plaintiffs alleged that setting most H-2A wages at the 17^th percentile would decrease wages below the market-based wage rate and negatively impact U.S. workers who perform the same duties, violating the statutes under the H-2A program. The court agreed with the plaintiffs, holding that while using a tier system is not necessarily unreasonable, the wage rates that DOL used under the tier system it chose are unreasonable, and arbitrary and capricious. The court held that wages under the H-2A program must not adversely affect domestic employees and the “IFR failed to reasonably consider whether its methodology could fulfill DOL’s statutory duty.”[iii]

Housing Adjustment

Under the H-2A Program requirements, employers are required to provide free housing to their H-2A workers and any domestic workers who cannot return to their home within the same day. DOL claims that the housing requirement creates a disparity between H-2A and domestic workers. The IFR will calculate AEWRs with an adjustment in the hourly rate to account for the costs of housing provided to H-2A workers, but will not change its requirements to provide free housing to all H-2A workers and some domestic workers. The housing adjustment will be based on a forty-hour work week and the average fair market rent of a four-bedroom unit within the state. The plaintiffs claim that the housing adjustment is contrary to H-2A program requirements and violates the APA for three reasons. First, the plaintiffs argued that H-2A workers end up being less expensive for employers because of the housing adjustment, which violates the statutory requirement that utilizing H-2A workers cannot negatively impact domestic workers. Second, the plaintiffs argued that the wages set under the IFR charge workers for housing that is supposed to be provided to workers at no cost under H-2A program regulations. Third, the plaintiffs argued that a per hour adjustment for housing charges H-2A workers more than the value of the housing because most H-2A workers work more than forty hours per week. The court also agreed with the plaintiffs on this component, holding that DOL failed to show that the housing adjustment would not create wages for H-2A workers, and therefore adversely affect domestic workers.

OEWS Survey Data Source

Prior to the IFR, DOL utilized the USDA FLS as the data set to set the AEWR because it includes farm establishments in its data set. In August 2025, USDA discontinued the FLS. DOL replaced the FLS with the OEWS because the OEWS provides state or regional level data for agricultural jobs. However, the OEWS only includes data from farm contractors, not farm establishments. The plaintiffs claimed that OEWS is improper for two reasons. First, farm labor contractors only employ a minority of H-2A workers. Second, utilizing data that only includes farm labor contractors would lead to lower AEWRs because “those employed by farm labor contractors are less educated, less likely to be U.S. citizens than employees of farm establishments, and typically have substantially lower wages.”[iv] The plaintiffs provided several alternative data sources or calculations that DOL could have used instead of the OEWR. The court held that DOL failed to consider what problems utilizing the OEWR would cause and reasonable alternatives in its rulemaking, which constitutes an arbitrary and capricious decision.

Greater than 50% Rule

Under the IFR, the worker receives the hourly AEWR for the job that they spend greater than 50% of their time doing. Under prior regulations, the worker received the hourly rate for the highest job classification they worked in no matter how much time they spent doing that job. The plaintiffs claimed that the greater than 50% rule would encourage employers to utilize many H-2A workers to perform higher wage work, instead of having employees whose primary responsibility is the higher paid work, decreasing the average wages, which would adversely affect U.S. workers performing similar work. The plaintiffs identified alternatives to the greater than 50% rule that DOL could have considered. The court agreed with the plaintiffs, holding that “failure to consider such an alternative – and failure to consider whether the greater than 50% rule is consistent with its statutory duty to protect U.S. farmworkers’ wages from the adverse effects of hiring H-2A workers – renders its decision arbitrary and capricious.”[v]

Good Cause Challenge

The plaintiffs further allege that DOL improperly utilized the good cause exception to bypass APA notice and comment rulemaking requirements. Under the APA, notice and comment rulemaking can be bypassed if “the agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”[vi] DOL claimed that it was facing a December 31, 2025 deadline to identify a new data source and lower wages were necessary to solve an agricultural labor shortage. The court concluded that the good cause exception was properly invoked for utilizing a new data source because the prior data source, the FLS, had been discontinued and DOL was required to publish new AEWR by December 31, 2025. The court also concluded that DOL improperly invoked the good cause exception for the housing adjustment, greater than 50% rule, and tiered wage system because these three components were not tied to a December 31, 2025, deadline. Finally, the court held that DOL failed to explain why lowering wages would solve the agricultural labor shortage when H-2A visas are not statutorily capped.

Next Steps

The court held the IFR unlawful but did not vacate the rule. Instead, the court remanded the case requiring DOL to “promptly produce a new methodology for calculating AEWRs for H-2A workers that is consistent with this Order, and to promptly publish new AEWRs under that methodology.”[vii] The court is also requiring DOL to notify all state workforce agencies, employers, and the public, within seven days of the order that employers may be required to backpay their H-2A workers. The plaintiffs asked the court to require employers to backpay H-2A workers for wages paid between the date of notice and the date a new methodology is issued. Lastly, the court is requiring both parties to brief the backpay issue once the new methodology is published. Until a new methodology is published, DOL may continue to utilize the methodology imposed under the IFR, but backpay may be awarded by the court when a new methodology that complies with the court’s order is issued.

---

[i] United Farm Workers v. United States Department of Labor, 1:25-cv-01614-KES-EGC, at *10 (E.D. Cal. Aug. 26, 2026) (citing Motor Veh, Mfrs. Ass’n v. State Farm Mut. Auto. Co., 463 U.S. 29, 43 (1983)).

[ii] Id.at *10.

[iii] Id. at *14.

[iv] Id. at *17 (citing 75 Fed. Reg. at 6901).

[v] Id. at *21.

[vi] Id. (citing 5 U.S.C. § 553(b)(B)).

[vii] Id. at *28.

---

Recommended citation format: Capaldo, Samantha. “Federal District Court Holds the 2025 Adverse Effect Wage Rate Interim Final Rule Unlawful.” Southern Ag Today 6(41.5). October 9, 2026. Permalink

Last year, the Ninth Circuit Court of Appeals ruled in Natural Grocers v. Rollins that portions of the National Bioengineered Food Disclosure Standard (Standard) be set aside and sent back to a lower court. After being directed by the National Bioengineered Food Disclosure Law, USDA established the Standard in a 2018 Final Rule for the purpose of regulating the disclosure and labeling of Bioengineered (BE) foods. Specifically, the Standard required that food manufacturers, importers, retailers, and other food labeling entities disclose if a product included a BE food or ingredient. In 2020, a group of food and agricultural organizations challenged three aspects of the Standard – 1) the exclusion of highly refined foods from the BE foods definition, 2) the requirement to use the term BE, and 3) the allowance of QR codes or text-messaging to accomplish the required disclosures (electronic disclosures).

In a 2022 ruling, the District Court for the Northern District of California agreed with plaintiff’s claims on electronic disclosure regulations but rejected the other two. Though the electronic disclosure regulations were invalided by the lower court, they were remanded without vacatur to USDA for further consideration. This means that the regulations, though found unlawful, could still be enforced while the agency made the changes mandated by the court. However, in the fall of 2025 the plaintiffs appealed the ruling to the Ninth Circuit.

In an October 2025 decision, the Ninth Circuit agreed with the challengers that claims 1 and 3 should be set aside. However, the Ninth Circuit did not reject claim 2 and found that the use of term “BE” was appropriate for disclosure. Regarding claim 1, the court rejected the Standard’s position on highly refined food by finding that highly refined foods which have modified genetic material “as a component or constituent part” are considered BE even if the genetically modified material is not detectible. Thus, the court determined that those foods would be required to comply with disclosure rules. With this conclusion, the Ninth Circuit determined that USDA’s interpretation was incorrect and that the agency should reconsider the regulations.

As for claim 3, the Ninth Circuit looked to the Standard’s electronic disclosure regulations. Specifically, the court considered whether the lower court’s decision to send the regulations back to the agency without vacatur was improper. Here, the Ninth Circuit found that the lower court’s decision was improper and remanded the regulations back to the district court.  It instructed the lower court to gather input from the parties to help the agency overturn portions of the regulations as needed.

At the District Court 2026

After instructing both parties to file briefs in response to the Ninth Circuit’s decision, on August 3, 2026, the U.S. District Court for the Northern District of California published an order establishing January 1, 2028 as the effective vacatur date for those regulations. This means that there is now a deadline for when the current regulations will expire. Thus, food manufactures may comply with the current BE disclosure rules until January 1, 2028. However, they should be on the lookout for related agency rulemaking. In its 2026 Unified Agenda of Federal Regulatory and Deregulatory Actions, USDA indicated its intentions to propose rules that would revise the Standard “based on the Ninth Circuit [ . . .] decision.”

For more information on the Ninth Circuit decision, click here for NALC article “Ninth Circuit addresses ‘Natural Grocers v. Rollins.”

---

Recommended citation format: Stone, Emily. “Update for National Bioengineered Food Disclosure Standard.” Southern Ag Today 6(40.5). October 2, 2026. Permalink

Agricultural financial distress can be easy to see but difficult to quantify. Chapter 12 bankruptcy, specifically designed for family farmers and fishermen, has traditionally been used as the sole measurement of that stress in the legal system.

However, agricultural businesses who do not qualify for Chapter 12 may instead file under Chapter 11.  For example, many farm families rely on income from outside the farm to keep their operation afloat, potentially disqualifying them from Chapter 12 eligibility. Other families, given the high cost of agricultural inputs and equipment, exceed the amount of debt that is allowable in that chapter. In circumstances like these, filing for Chapter 11 allows the farm to continue operating while developing a plan to restructure and repay its debts.

Until now, the number of farms filing under Chapter 11 has been unknown, and those additional indicators of financial stress unrecognized.  The National Agricultural Law Center, together with the National Association of State Departments of Agriculture, worked together to identify many of those operations.  The result is the Data on Economic and Bankruptcy Trends, or “DEBT” project.

The DEBT project features an interactive map that allows users to explore ag related Chapter 11 & Chapter 12 bankruptcy filings between January 2021 and June 2026. Information can be filtered and viewed by bankruptcy chapter, year, and quarter, allowing users to examine where and when agricultural bankruptcy filings have occurred and identify trends over time. Users can select locations on the map to view individual cases and access additional information, including links to corresponding federal court records.  The page also includes access to the underlying dataset.

It was completed in conjunction with SAS, an advanced analytics company that turns data into usable information. Using Public Access to Court Electronic Records (PACER), an online system providing access to federal court files and case dockets, SAS developed an automated process to cross-reference bankruptcy records with publicly available data from the USDA Farm Service Agency. When an entity appeared in both a bankruptcy filing and FSA program recipient list, it was an indicator that the entity was an agricultural operation. 

It is not a perfect indicator.  Not all farmers facing significant financial stress file for bankruptcy, not all farm bankruptcies filed were tracked in this new set of data, and alternatives such as Chapter 7 and Chapter 13 are also available, but as of yet uncounted in the current DEBT dataset.  But the project and interactive map is a good first step to better recognizing the farm financial stress issue. 

 Through this project 1,401 agricultural bankruptcies were identified. The majority of those- 1,200- were filed under Chapter 12. However, 201 additional bankruptcies with an agricultural connection were filed under the requirements of Chapter 11.  In other words, agricultural bankruptcies over the past 5 years are at least 16% higher than anyone had previously realized.

The information gathered in the DEBT project has also given us more data to forecast 2026 possibilities.  In the first half of 2026, there have been at least 208 agricultural bankruptcies: 177 filed under Chapter 12 and 31 under Chapter 11.  To compare with last year’s data; at the halfway point of 2026, agricultural bankruptcies reached 61% of the total number recorded in all of 2025.  If filings continue at this pace, 2026 would see approximately 416 agricultural bankruptcies- about 22% higher than 2025.

While this project does not solve the problems of farm financial stress, it provides a more comprehensive view of trends across the agricultural sector. The data can help identify changes over time, geographic patterns, and emerging financial challenges affecting agricultural operations. When considered more broadly, these filings offer valuable information for farmers, attorneys, policymakers, researchers, lenders, and others seeking to understand the economic conditions affecting agriculture.

---

Recommended citation format: Rumley, Elizabeth. “A New Way to See Agricultural Bankruptcy Trends.” Southern Ag Today 6(39.5). September 25, 2026. Permalink

Authors: Jesse J. Richardson, Jr. and Paul Goeringer

A recent Missouri case provides an important reminder of the importance of how property is titled and the implications of attempting to change the titling of property. The story in Sielert v. Sielert, 737 S.W.3d 210 (Mo. Ct. App. 2026) begins with brothers Loren, Brian, and David Sielert receiving title to the family farm from their mother as joint tenants with the right of survivorship. With a joint tenancy, the ownership interest in a deceased co-owner passes to the other co-owners equally. In this case, Loren and David passed away, and Brian claimed sole ownership of the farm.

However, prior to his death, Loren recorded a beneficiary deed (also called transfer on death deed) that conveyed his interest to his son, Jordan, and recited that the deed severed the joint tenancy with right of survivorship and converted Loren’s interest to a tenancy in common. A tenancy in common is the other major way that multiple landowners can hold property. In a tenancy in common, the ownership interest held by a deceased owner passes to their heirs or under their will. In this case, if Loren held his 1/3 interest as a tenant in common, that 1/3 interest would pass to his son Jordan.

Therefore, the question in this case was whether Brian held a 100% interest in the farm or whether Brian owned a 2/3 interest and his nephew Jordan a 1/3 interest. Brian filed suit against his nephew, claiming 100% ownership interest.

A co-owner may sever a joint tenancy with right of survivorship by conveying their interest. The rules are fairly complex, so you should consult with an attorney if you have specific questions. However, a beneficiary deed conveys the property at the death of the grantor (in this case, Loren). The language in the beneficiary deed purporting to sever the joint tenancy was not enough to sever the joint tenancy. The court found that at Loren’s death, his interest in the property instantaneously went to the surviving joint tenants. Therefore, there was nothing left for the beneficiary deed to convey. Brian owns 100% of the family farm.

This case reminds us of the importance of the way property is titled. If Mom wanted the last survivor of her three children to own the family farm, the joint tenancy with right of survivorship would accomplish that goal. However, any of the three children could thwart that goal by conveying the property and severing the joint tenancy. This case also illustrates the limitations of conventional forms of property ownership. Mom perhaps should have formed a limited liability and included agreements to ensure that her goals were accomplished. The case also teaches important concepts about a beneficiary (or transfer on death) deed. These deeds allow a property owner to retain ownership until their death and convey the property without going through probate. However, like any other legal document, you should consult with an attorney and give the matter considerable thought before using that tool. Ironically, it appears that Loren consulted an attorney, but the attorney did not completely understand the nature of a beneficiary deed. The bottom line is that estate and transition planning is complex and involves difficult family dynamics. Every step should be well thought out and discussed with the family and an attorney.

---

Recommended citation format: Richardson, Jr., Jesse J., and Paul Goeringer. “The Importance of Titling of Property.” Southern Ag Today 6(35.5). August 28, 2026. Permalink

In mid-July, the United States Fish and Wildlife Service (“FWS”) together with the National Marine Fisheries Service (“NMFS”) (collectively, “the Services”) finalized a rule to rescind the regulatory definition of “harm” under the Endangered Species Act (“ESA”). The term is part of the ESA’s overall prohibition on “take” of protected wildlife and has been defined through regulation since 1975. In rescinding the rule, the Services allege that the definition of “harm” does not match the best possible interpretation of the ESA. Since the recission was finalized, at least four federal lawsuits have been filed by environmental groups and Native American Tribes, claiming that rescinding the definition violates federal law.

Under the ESA it is illegal to “take” any wildlife species that have been listed as either threatened or endangered. The term “take” is broadly defined under the ESA as “to harass, harm, pursue, hunt, shoot, wound, trap, capture, or collect, or to attempt to engage in any such conduct.” FWS first adopted a regulatory definition of “harm” for the purposes of “take” in 1975. That definition was slightly modified in 1981 and until the recission rule, “harm” was defined as “an act which actually kills or injures wildlife [including] significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering.” NMFS adopted the same definition in 1999.

By defining “harm” to include “significant habitat modification or degradation” that “actually kills or injures wildlife,” the Services interpreted the prohibition on “take” of protected species to include destruction of species habitat even if habitat destruction did not involve directly killing or injuring a member of the species. For example, under the 1981 definition of “harm,” it would be a violation of the ESA to cut down a stand of trees that provide habitat to an endangered species of bird even if none were directly killed when the trees were cut down.

The Supreme Court upheld this definition of “harm” in its 1995 decision, Babbitt v. Sweet Home Chapter of Communities for A Great Oregon,where the Court held 6-3 that the definition was “reasonable” in light of the “broad purpose” of the ESA to protect endangered and threatened wildlife. Because the Court concluded that the definition was reasonable, it relied on the doctrine of Chevron deference to decide the case. In a dissenting opinion, Justice Scalia disagreed with the majority’s conclusion and instead would have limited it to acts that directly kill or injure protected wildlife. According to Justice Scalia, limiting “harm” to direct acts against wildlife makes sense when looking at the statutory definition of “take” which includes other direct actions like pursue, hunt, shoot, and wound.

In their final rule to rescind the “harm” definition, the Services explained that the action was prompted by the Supreme Court’s 2024 ruling in Loper Bright Enters. v. Raimondo,where the Court overturned Chevron deference. When the Court issued Loper Bright, it recognized that many of its previous holdings were based on Chevron deference and concluded that those cases were still good law and should not be considered invalid or overturned because of the Court’s Loper Bright decision.

Although the Services acknowledged that pasts cases which relied on Chevron deference were still valid in their final recission rule, they argued that, as part of the Executive Branch, they have a constitutional responsibility to “take care that the laws be faithfully executed.” Because the Services believe that the single, best interpretation of the ESA’s “take” prohibition was given by Justice Scalia in his Babbit dissent, they moved to rescind the “harm” definition and limit “take” to actions that directly kill or injure protected species.

The recission rule is set to go into effect on September 14, 2026, and already at least four lawsuits have been filed to challenge it. All four claim that the recission violates the Administrative Procedure Act (“APA”) and ask that the rule be overturned. The plaintiffs in each lawsuit allege that the recission rule violates the APA because the Services did not provide a “reasonable rationale” for rescinding the “harm” definition.

The plaintiffs claim that the recission rule is “arbitrary and capricious” because the only explanation the Services provided to support rescinding the “harm” definition is an improper interpretation of Loper Bright. They argue that under the Loper Bright standard, it is courts, not agencies, that determine the single, best interpretation of the law. According to the plaintiffs, the recission rule cannot be the best interpretation of “harm” because it is one that the Supreme Court has rejected. They claim that the Services failed to explain how or why Justice Scalia’s dissent in Babbit, rather than the majority opinion, articulates the “single, best” meaning of “take” under the ESA.

Rescinding the regulatory definition of “harm” is likely to have broad impacts for a variety of reasons. For property owners and agricultural producers, the recission could result in reduced regulation at least as long as the rule remains in place. However, perhaps an unintended outcome of the recission rule is the opportunity to get a better understanding of how courts will treat Loper Bright going forward. The standard established by the Supreme Court in Loper Bright is still relatively new, particularly when compared with Chevron deference which was in place for decades before being overturned. For an industry as heavily regulated as agriculture, how courts treat agency rules interpreting statutory language is an important part of understanding how the law impacts day-to-day operations.

---

Recommended citation format: Rollins, Brigit. “Services Rescind ESA Definition of “Harm,” Face Lawsuits.” Southern Ag Today 6(34.5). August 21, 2026. Permalink