Category: Ag Law

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.

The emerging conflict between utility-scale solar development and farmland loss has generated growing interest in proving the economic viability of continued agricultural production on landscapes leased for solar use, introducing the neologism agrivoltaics. Rural community resistance to solar development is expressed at the focal point of county zoning approval, with citizen testimony raising concerns over negative environmental and property value impacts on the surrounding community. Though such protestations without supporting research often fail to rebut a case for rezoning (depending on state law standards), the friction with agricultural producers remains of greater economic concern due to perceived loss of output and farmland “loss.” The reduced costs of solar development on working farmland – no tree removal, existing drainage infrastructure, road access – are well understood, and the numerous efforts by state and local governments to deter such development vary in success. 

The body of research on the projected aggregate agricultural economic impact of state renewable energy targets is in its infancy. However, the immediate impact to individual producers losing leased fields to solar development is easily measured in lost production acres, and such individuals often retain significant voice and goodwill in the community. The growing body of policy work on decommissioning of solar facilities – i.e. the promise that one day the land may be farmed – fails to address short term concerns.

One principal area of addressing such friction is the exploration of a compromise in farmland loss and resulting economic impact. Given the present economic limitations between prevalent low-to-ground technology and panel spacing, continued agricultural production options – and ag economic output – remain limited. According to the National Renewable Energy Laboratory’s OpenEI Agrivoltaics Map, there are 517 dual-use solar facilities covering 61,477 acres and generating 9844 megawatts of electricity. (The author is aware of dual use facilities not appearing on the map.) The vast majority of these sites are devoted to pollinator habitat production – with its tenuous economic impact – with the next predominant agricultural use of sheep grazing. Some sites support active research, including blueberry production (Maine). Limited U.S. markets for sheep meat and wool may serve as a bottleneck to wider implementation of agrivoltaic grazing regimes. Site opportunities for grazing contracts may be misaligned with available grazing services, local producers and processing. The national leader in solar grazing efforts – American Solar Grazing Association – maintains its own map of agrivoltaic grazing sites.

The US Department of Energy has stepped up research funding into this area, and there are numerous active research projects underway across the country. One recent agrivoltaic grazing research grant application by NC State University illustrates possible research approaches: 1) incorporating diversified livestock grazing into vegetation management regimes – that would otherwise rely on equipment and chemical applications – to measure the impact of grazing on soil health, water quality and carbon sequestration; 2) an enhanced understanding of resource and site design requirements (e.g. panel spacing, height); and 3) exploration of socio-economic impacts in the local community to better understand long-term acceptance of agrivoltaic systems, economic viability to producer, landowner and producer, and scalability of such systems. 

The exploration of the third item may have a direct impact on reducing zoning hearing friction. At least one study^[1] finds that “81.8% of respondents [to a survey] would more likely support solar development in their community if it integrated agricultural production” and other social responses are revealed on the figure below.  As noted, academic research into statewide and community agricultural economic impacts is needed, and as are the likely economic compromises and policy incentives required for scalable and high-value agricultural output to address concerns over farmland loss. 

Image reproduced from article Pascaris, A.S. et al, Do agrivoltaics improve public support for solar? A survey on perceptions, preferences, and priorities, Department of Social Sciences, Michigan Technological University, 1400 Townsend Drive, Houghton, MI 49931, USA

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^[1]  Pascaris, A.S., Schelly, C., Rouleau, M. et al. Do agrivoltaics improve public support for solar? A survey on perceptions, preferences, and priorities. GRN TECH RES SUSTAIN 2, 8 (2022)

On February 1, 2024, the U.S. Court of Appeals for the Eleventh Circuit granted a partial injunction in favor of two individuals challenging a Florida law that restricts certain foreign investments in real property. In May 2023, a group of Chinese citizens living in Florida and a real estate brokerage firm filed a lawsuit (Shen v. Simpson, No. 4:23-cv-208 (N.D. Fla. 2023)) against the state of Florida alleging that the state’s newly enacted foreign ownership law violates the United States Constitution. Florida’s law restricts certain foreign investments in real property located within the boundaries of the state, particularly investments by individuals and entities “domiciled” in China. After the district court denied the plaintiff’s motion to prevent the state from implementing and enforcing their foreign ownership law, the plaintiffs appealed to the Eleventh Circuit which granted a partial preliminary injunction.

Although the Shen plaintiffs claim that the Florida law is unconstitutional for several reasons, the court’s order granting the partial injunction rests solely on the plaintiffs’ preemption argument. The plaintiffs argue Florida’s foreign ownership law violates the Supremacy Clause of the U.S. Constitution by conflicting with the federal government’s system of regulating land purchases by foreign investors. 

According to the Eleventh Circuit’s order, two of the Shen plaintiffs have shown a substantial likelihood that the federal government’s role in monitoring certain foreign acquisitions of real property located within the U.S. preempts Florida’s foreign ownership law. As a result, the state is currently restrained from prohibiting these two individual plaintiffs from completing their real property transactions within the state of Florida.

Importantly, this is merely a decision on the preliminary injunction.  The court did not rule on the merits of the case. Oral arguments for the Shen case are expected to be set for April 2024, at which time the appellate court will hear arguments on the merits of the case.

Brown, Micah. “Foreign Ownership Law violates the U.S. Constitution???” Southern Ag Today 4(12.5). March 22, 2024. Permalink

In August 2023, the United States Environmental Protection Agency (EPA) publicly disclosed an ambitious and extensive internal plan to conduct a potentially transformative reform process of NPDES permitting confined animal feeding operations (“CAFO”) under the Clean Water Act. The commencement of this process can best be described as a “soft launch” in that it was first revealed in a relatively obscure agency decision denying an administrative petition pending since 2017.  National attention to this undertaking will certainly grow as it progresses due to its potential, at least on paper, to be the seeds of significant changes to the CAFO permitting and regulatory scheme which has become an integral part of the national agricultural lexicon. 

On March 8, 2017, a group of environmental groups led by Food & Water Watch filed a petition with EPA seeking a complete re-write of the Clean Water Act CAFO permitting system embodied in federal regulations. Petitions seeking changes to federal executive agency regulations are quite common. While very rarely producing the requested relief, they create an agency decision-making process the results of which can be appealed to federal court. This serves to place a particular objective of the petitioners in play with an agency and, most importantly, provides a chance to appeal the results to a federal court which may be more sympathetic than the agency to some portion of the petitioners’ arguments. Generally, those arguments are that a regulation, on its face or as applied, fails to comply with the authorizing legislation’s text. Such was the case in this instance. 

The 2017 Food and Water Watch petition’s first paragraph summarized its contents as follows: “[T]he agricultural sector, including CAFOs, remains largely unregulated and is now the nation’s leading source of water quality impairments. The Agency’s current CAFO regulations are plainly not up to the task of protecting our waterways from industrial livestock operations.” On August 15, 2023, after six years pending and a subsequent October 2022 petition seeking similar relief, the EPA denied both the 2017 and 2022 petitions.   

Within the agency denials, the EPA announced it reform undertaking, which its website currently describes as “a comprehensive evaluation of the CAFO program” which will include “a detailed study of the CAFO effluent limitations guidelines [ELGs] as well as establishing a Federal Advisory Committee, the [Animal Agriculture and Water Quality Subcommittee (AAWQ)], . . . through which a diverse array of stakeholders will help inform EPA’s efforts to improve its CAFO program.” 

Noteworthy text within the EPA decisions included the following:

• “EPA also shares your concern that CAFOs can be a significant source of pollutants into waters of the United States. The Agency recognizes that there may be opportunities to do more to address these pollutants.”

• “Federal and state agency staff, have experienced challenges effectively implementing and assuring compliance with the current CWA CAFO regulatory requirements.”

The EPA’s statements do not read like an agency entirely confident that all is well with the status quo of its enforcement efforts of the Clean Water Act concerning CAFOs. 

Following the August 2023 decisions, the EPA published a Federal Register Notice on November 16, 2023, soliciting nominations to the AAWQ subcommittee by a deadline of January 24, 2024.  Thus far, there has been no further word on appointments.  EPA’s “detailed study” of the CAFO ELGs was in fact previously announced in January 2023.  However, there has been no public evidence of that undertaking being conducted over one year later.   

Meanwhile, the federal courts are now also involved. On September 8, 2023, the EPA’s denials were appealed through the filing of a petition for review with the U.S. Court of Appeals for the Ninth Circuit, docketed at Food & Water Watch, et al. v. EPA, No. 23-2146. American Farm Bureau Federation, National Pork Producers’ Council, U.S. Poultry & Egg Association and United Egg Producers have become intervening parties to that case. Presently, briefing by the parties is slated to conclude by June 1, 2024. A decision could take anywhere from a few months to a few years, and the outcome at the Ninth Circuit (perceived as potentially more sympathetic to the petitioners than the other eleven Circuit Courts of Appeals) remains uncertain. The same could be said about the prospects of any attempt by a dissatisfied party to appeal an adverse outcome to the U.S. Supreme Court (perceived as not sympathetic to the petitioners).  

The coming months or years will tell us how diligently EPA pursues unilateral changes of its own accord in its Clean Water Act enforcement regarding CAFOs, either as presently defined or under a new regulatory design. Over that time, we will also learn whether decisions about the future of EPA’s CAFO regulatory and permitting scheme will be dictated by the federal courts. This effort could alter not only the federal definition of a CAFO itself and how potential surface water discharges of animal production operations are regulated and permitted, but also may include new tools like monitoring or drastically overhauled effluent standards. Any changes at the federal level will assuredly impact each states’ undertakings, where applicable, of NPDES and non-NDPES water quality programs and, most importantly, state budgeting for the same.  

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Duer, Brook, and Paul Goeringer. “EPA Made 2023 Commitment To CAFO Permitting Reform But No Action Evident to Date.” Southern Ag Today 4(10.5). March 8, 2024. Permalink