Category: Ag Law

While the current outbreak of highly pathogenic avian influenza (HPAI) began in 2022 primarily infecting wild birds and domestic poultry, 2024 produced evidence of a mutated virus infecting dairy cattle in large numbers, as well as evidence of human infections thankfully limited in both case numbers and virulence.   

In human and animal health circles, the concepts underlying the terminology “One Health” (i.e. an integrated, collaborative approach by the medical and veterinary professions to the control of zoonotic disease) have been discussed for years.  However, during this past year, the reality of the general public itself following a multi-disciplinary and multi-state epidemiological investigation of the HPAI strain in dairy cattle has thus far produced a complex set of still-evolving answers. 

To some, in particular those who feel they are now armed with relevant recent knowledge gained from the COVID-19 pandemic, USDA and CDC disease control efforts have been perceived as not aggressive nor collaborative enough. In the end, perhaps only the history books will be able to render a judgment on that score.

But in the meantime, one fairly recent development in an unrelated legal dispute may address questions at the core of any One Health effort to control this zoonotic disease.  What are the statutory limits of the federal government’s attempts to control a potential animal disease?  

The federal government’s legal authority in this regard arises from a law known as the Animal Health Protection Act. This law vests broad and sweeping powers in USDA’s Animal and Plant Health Inspection Service (USDA APHIS) over the import, export and interstate movement of livestock and “articles or means of conveyance,” by regulations and orders “necessary to prevent the introduction into or dissemination within the United States of any pest or disease of livestock.”  7 U.S.C. § 8305(1). The primary statutory tools have and likely will continue to be orders designed to control interstate movement of dairy cattle, as well as other means of disease conveyance—including milk itself. 

By fortunate historical circumstances and decades of regulatory precedent, mandatory pasteurization of milk in interstate commerce fits the bill as the most effective and efficient control measure for this zoonotic disease.  

Nevertheless, re-examination and a fundamental questioning of the Animal Health Protection Act’s parameters of authority has been raised by the October 30, 2024, commencement by beef cattle producers of a lawsuit seeking to invalidate USDA’s final rule on electronic identification eartag (“EID”) requirements for certain cattle and bison. The final rule was promulgated, effective November 5, 2024, pursuant to Animal Health Protection Act authority, specifically animal disease traceability as a subset of the broad authority over any and all means of disease conveyance. 

In Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America v. United States Department of Agriculture, No. 5:24-cv-05085, multiple beef cattle producers (hereinafter collectively referred to simply as “R-CALF USA”) commenced a lawsuit by complaint in the U.S. District Court for the District of South Dakota seeking to invalidate the USDA APHIS final rule titled “Use of Electronic Identification Eartags as Official Identification in Cattle and Bison” (89 FR 39540). For the purposes of this article, the portion of the final rule at issue is the new text at 9 CFR §86.4(a)(1)(i) stating that all official eartags sold for and applied to cattle and bison that are required to be officially identified for interstate movement must be readable both visually and electronically. 

The producers allege, among multiple claims, that the final rule exceeds the authority granted by the Animal Health Protection Act to take actions “necessary to prevent the introduction or dissemination” of a pest or disease of livestock because “participants within the production chain [of affected animals] may continue to use EID eartags in the exact same way that they use visual-only eartags,” and as such, the rule is not necessary because it “does not actually fix the problems it is supposedly addressing.”  In other words, the determination of “necessity” is lacking for the new requirement of electronic readability. 

By way of further explanation, according to the complaint, “USDA has previously ‘stated that a participation rate of 70 percent of the nation’s cattle herd would be necessary for a [animal disease traceability, or “ADT”] program to be effective’ . . . but the Rule only applies to 11 percent of the nation’s cattle herd.”  R-CALF USA goes on to state: “APHIS provides only a conclusory statement that the ADT program helps prevent the dissemination of disease by helping minimize the effect of outbreaks through restrictions, such as the EID eartag requirement, that the agency has determined are necessary for efficient livestock tracing. . . But this bold statement does not reasonably explain how the EID Final Rule achieves any efficiency gains or why hypothetical efficiency gains are significant enough to be deemed ‘necessary’ under the Animal Health Protection Act.”

This litigation’s outcome could have broad and negative implications for all USDA APHIS actions taken pursuant to Animal Health Protection Act authority. The case essentially argues that every aspect of each regulatory requirement justified as serving animal disease control objectives must be subjected to the type of rigorous and individualized proof of “necessity” suggested by the R-CALF USA plaintiffs, taken out of the context of its role and place in the cumulative impact of the regulatory scheme on disease control and regulation. If this position is a correct interpretation of the law, the toolbox of measures available to USDA APHIS may shrink to only a handful of measures—perhaps only those which are proven to have a direct and independent causal relationship to ending the disease’s biological functioning. 

While such a restrictive view of executive branch regulatory authority under the Animal Health Protection Act may not be inconsistent with some recent U.S. Supreme Court decisions reigning in administrative rulemaking, it would be a sea change in zoonotic disease control.

---

Duer, Brook, and Paul Goeringer. “2024 Brings Unprecedented Zoonotic Disease Control Challenge As Well As Far-Reaching Questions of Legal Authority.” Southern Ag Today 5(2.5). January 10, 2025. Permalink

In November 2024, the D.C. Circuit Court of Appeals ruled that the Council on Environmental Quality (“CEQ”) does not have authority to issue binding regulations. Since the late 1970s, CEQ has issued regulations that implement the National Environmental Policy Act (“NEPA”). Federal agencies have followed these regulations when carrying out the NEPA while courts have consistently enforced them. Following the D.C. Circuit’s decision in Marin Audubon Soc’y v. Fed. Aviation Admin., No. 23-1067 (D.C. Cir. 2024), it is unclear what authority CEQ will have going forward. 

The primary purpose of NEPA is to “declare a national policy which will encourage productive and enjoyable harmony between man and his environment[.]” To achieve this goal, NEPA outlines a process by which federal agencies can assess the environmental impacts of their actions before making final decisions. 

NEPA provides two levels of environmental review. For proposed actions that have a “reasonably foreseeable significant effect on the quality of the human environment,” agencies should issue an environmental impact statement (“EIS”) that provides detailed information about the expected impacts of the action. For all other actions, agencies should prepare a “concise” document known as an environmental assessment (“EA”) that will either establish the agency’s “finding of no significant impact” or conclude that preparation of an EIS is necessary. NEPA also allows federal agencies to identify categories of actions that do not have significant effects on the environment. Such actions are called “categorical exclusions” and do not require NEPA review. 

NEPA also established CEQ and laid out its functions and duties, such as reviewing federal government activity to ensure NEPA compliance and making an annual report to the President on the “state and condition of the environment.” 

In 1970, President Nixon issued an Executive Order directing CEQ to issue “guidelines” to federal agencies on how to prepare NEPA documents. In 1977, President Carter issued a separate Executive Order empowering CEQ to issue regulations rather than guidelines. CEQ’s first round of NEPA regulations were issued in 1978 and established a framework that is still largely in effect today. Since 1978, federal agencies have followed those regulations while drafting NEPA documents and the Supreme Court in Andrus v. Sierra Club, 442 U.S. 347 (1979), held that CEQ’s NEPA regulations are “entitled to substantial deference.”

The plaintiffs in Marin Audubon Soc’y v. Fed. Aviation Admin. initiated their lawsuit in early 2023 to challenge a finalized plan between the FAA and the NPS that would allow tourism flights to operate over four parks in northern California. When the FAA and the NPS first announced the air tour plan, they also announced their intent to develop an EA. However, the agencies ultimately concluded that the plan was categorically exempted from NEPA review. That decision prompted the plaintiffs to file suit, claiming that the FAA and the NPS had violated NEPA by failing to conduct necessary review.

The D.C. Circuit Court of Appeals issued its ruling in Marin Audubon Soc’y v. Fed. Aviation Admin. on November 12, 2024. While the court concluded that the FAA and the NPS had violated NEPA by approving the air tour management plan without drafting an EA or an EIS, the bulk of the court’s decision focused on whether CEQ had authority to issue NEPA-implementing regulations. Ultimately, the court concluded that CEQ lacked that authority.

According to the court, the text of NEPA does not grant CEQ specific rulemaking authority. While NEPA provides that CEQ shall “make recommendations to the President,” Congress did not include language instructing CEQ to draft rules and regulations to implement NEPA. Instead, CEQ relies on the Executive Orders as the basis for its rulemaking authority. According to the D.C. Circuit, agencies cannot derive rulemaking authority from Presidential Executive Orders. The court relied on the Take Care Clause of the U.S. constitution which provides that the President “shall take care that the laws with faithfully executed[.]” Specifically, the court concluded that the Take Care Clause does not authorize the President to grant federal agencies rulemaking authority to “faithfully execute” the laws passed by Congress. Only Congress has the authority to grant federal agencies rulemaking power. Because NEPA does not specifically instruct CEQ to adopt implementing regulations, the D.C. Circuit concluded that CEQ does not have the authority to issue regulations, and any regulations it has issued are non-binding.

The decision was issued by a three-judge panel, but only two judges joined in the majority ruling. The third judge on the panel dissented. Primarily, the dissenting judge noted that neither the plaintiffs nor the defendants in Marin Audubon Soc’y v. Fed. Aviation Admin. challenged CEQ’s regulations. According to the dissent, the majority’s opinion violated the “principle of party presentation,” a legal concept which provides that judges may only consider the legal questions that are presented and argued before the court. The dissent concluded that there was no reason for the majority to consider the validity of the CEQ regulations because no one had asked them to do so.

It is currently unclear exactly what impact the decision in Marin Audubon Soc’y v. Fed. Aviation Admin. will have. While the court declined to vacate CEQ’s NEPA regulations, the decision establishes a precedent that CEQ lacks rulemaking authority, and that all regulations it issues are non-binding. The parties are expected to seek an en banc review of the decision, but the timeline is currently unclear.

In the meantime, the ruling is likely to cause delays for any activity currently undergoing NEPA review as federal agencies determine how to proceed. If the decision ultimately withstands further judicial review, federal agencies may face the challenge of drafting their own NEPA regulations or otherwise establishing some sort of policy to ensure that the agency meets its NEPA obligations. At the moment, the decision in Marin Audubon Soc’y v. Fed. Aviation Admin. has provided more questions than answers.

---

Rollins, Brigit. “D.C. Circuit Rules that CEQ Lacks Rulemaking Authority.” Southern Ag Today 5(1.5). January 3, 2025. Permalink

            On November 2024, the IRS announced the revised federal estate tax and gift tax limits for 2025.  The federal estate tax limit will rise from $13.61 million in 2024 to $13.99 million in 2025.  The federal gift tax limit will jump from $18,000 in 2024 to $19,000 in 2025. North Carolina and Texas have repealed their state estate taxes, and the remaining states in the South have tied their state estate taxes to the federal estate tax limits.  

Federal Estate Taxes

            For 2025, the federal estate tax limit increases to $13.99 million for an individual and $27.98 million for a couple.  A deceased person owes federal estate taxes on a taxable estate if the value is over the exemption amount.  The taxable estate is the gross estate minus allowable expenses and deductions.  For example, a couple with a taxable estate of $28 million passes away in 2025.  The couple’s heirs may exempt up to $27.98 million from federal estate taxes and only owe federal estate taxes on $20,000.  If an estate is getting close to federal estate tax limits, then please check with your accountant to better understand what potential taxes you would owe. 

            One last note on federal estate taxes: a surviving spouse has an unlimited marital deduction. The surviving spouse can include the predeceasing spouse’s unused federal estate tax limit in their federal estate tax limit. This concept is known as portability, and it provides strategies for estates that may be reaching the estate tax limits.

            It is important to note that the current exemptions sunset on Jan. 1, 2026.  Congress would need to extend the current exemptions, or we would have to revert to the prior exemptions.  The prior exemption is estimated to be around $7 million in 2026.

Federal Gift Tax Limit

            The federal gift tax limit goes up to $19,000 in 2025.  Federal tax law allows each taxpayer to gift up to $19,000 per year to one individual without incurring federal gift taxes. This exemption is tied to inflation but can only increase to the nearest $1,000 amount.  For a couple, this would be $38,000 in gifting to an individual.  Gifting strategies can be adopted by those individuals nearing the estate tax limits to reduce the value of their estates.  Individuals should talk to their accountant and attorney to consider developing strategies that will minimize the impacts of estate taxes.

How Does This Impact You?

            Benjamin Franklin once wrote, “In this world, nothing can be said to be certain, except death and taxes.” With that in mind, farm families concerned about hitting the top federal or state estate tax exemption need to begin working on farm succession and estate plans to limit potential estate taxes down the road. Research from USDA’s Economic Research Service highlights that in 2023, 99 percent of U.S. farms would owe no estate taxes with those farms being impacted by federal estate taxes being less than 1 percent.  

            Working with a tax advisor early on can help limit your taxes and devise a tax plan to keep the farm in operation for future generations. Failure to properly plan can force surviving family members to sell family assets to pay taxes on the inheritance. Along with a tax advisor, consider working with additional team members, such as an attorney and financial planner, to begin developing the family’s farm succession plan.

            For those who need to develop estate tax plans, you should discuss with your farm succession team members if the increases in the estate tax limits impact your plan. Although this change may not affect your succession plan, it allows you to discuss other changes in the farming operation over the past year.

---

Goeringer, Paul. “Federal Estate Tax and Gift Tax Limits Announced For 2025.” Southern Ag Today 4(49.5). December 6, 2024. Permalink

‘Tis the season for camo, foothills that are sprouting pickup trucks, and men, women and children afoot on varying terrain armed with rifles, bows, and dogs. If you are a landowner, there is a good chance you have been approached by someone seeking permission to hunt on or traverse your land. Before counting points on bucks, here are some points for landowners’ consideration to prepare for this season.

Get a signed lease. A hunting lease will provide clarity and protection to all parties by defining access, laying out expectations, addressing property management and use, and providing some liability protections. Agreements should be documented in writing with detail to prevent any confusion or misunderstanding of the agreed terms and as insurance should a dispute or issue arise. When drafting a lease, be specific and thorough. The danger of a “simple” lease is that most lease disputes don’t arise over terms that are clearly set forth in the lease, but rather most disputes arise from terms that are not addressed in the lease. Among the important lease terms such as naming the lessor(s) and lessee(s), payment terms, length of lease, liability, identifying the property and access points, remedies for breach and the like. A thorough hunting lease should address management kills, ATV use, fence and trail repairs, fallen trees, feeding plots, use and location of outbuildings, blinds and tree stands, whether guests are permitted and how many at once, communication with lessor, whether the hunting rights are exclusive or nonexclusive, wildlife that may be hunted, known or potential hazards, and other considerations of important to either party. If a dispute arises, a court will first look at the lease, and only the lease, to resolve it. Absent extenuating circumstances, additional agreements or promises which are not reflected in the lease itself will not be enforced. 

Reinforce to anyone hunting on your land that it is their responsibility to know the property boundaries. It is unlawful for hunters to track or retrieve wounded game on private property without permission. Hound hunters should check to see if their state has a right to retrieve law. These statutes generally allow the owners of hunting dogs to enter upon the land of another without permission for the purpose of retrieving their hunting dogs. Virginia’s 100-year-old statute was recently challenged by a group of landowners arguing that Virginia’s right to retrieve law amounted to a taking of private property without just compensation, converting their private property to public use.^[1] Despite alleging that hounds were a nuisance which had killed a landowner’s chickens and would spook horses allegedly justifying compensation from the state, the circuit court held that the law was merely an exception to criminal trespass and did not deprive the landowners of any property rights. In response, Virginia’s Board of Wildlife Resources considered two proposals which would have required hound hunters to use GPS collars and make reasonable attempts to prevent their dogs from entering another’s property. Though it was questioned whether the Board had authority to require such measures, both were ultimately rejected. 

Hunting leases are contractual agreements to which every other basic principle of contract law applies. Make sure leases are written, thorough, and reviewed by a knowledgeable agricultural attorney licensed in your jurisdiction. If you are hunting on your own land or that of others, know the property boundaries and as necessary, consult with a local attorney on your state specific laws related to one of the oldest practices in the world.

---

^[1] Medeiros, et al v. Virginia Dep’t of Wildlife Res., Record No. 230691 (Va. Sept. 26, 2024) (unpub. order).

---

Friedel, Jennifer Shaver. “Preparing for the (Camo) Season.” Southern Ag Today 4(47.5). November 22, 2024. Permalink

Each state has a right-to-farm law that protects agricultural operations from lawsuits that the farm is a nuisance.  In many cases, these laws vary from state to state.  Although the laws vary, decisions from other states often help us understand how these laws might be interpreted in other states.  Two recent decisions out of Kansas and Maryland highlight what farms might want to consider when determining if their operation meets the guidelines in their states.

In Kansas, the state’s supreme court recently upheld the decision of the Court of Appeals of Kansas not to allow a hog operation to utilize the defense.  The hog farm had expanded, and the new facilities required additional pipelines to be run in other fields to apply effluent from the operation.  The operation never got permission from the neighboring landowners to run the pipelines along the county road.  The Supreme Court of Kansas agreed that the easement for the road to the county only created a right to use the road and did not give permission to run pipelines along the right of way without the permission of the neighboring landowners.  Because the Kansas right-to-farm law required the operation to comply with all laws, the operation could not use the law since they had committed trespass to put in the pipelines.  That decision is in Ross v. Nelson (Kan., 2024).

In Maryland, a new farmland owner switched from using chemical fertilizers to a form of biosolids as fertilizer. Neighbors complained, and the Appellate Court of Maryland recently upheld the producer’s right to switch practices on the farmland and maintain the right-to-farm law protections.  Maryland state law requires an operation to exist for one year to gain protection, and the court agreed that switching nutrient management practices did not reset that clock.  The court pointed to legislative history, stating that the legislature should have fully understood that the one-year provision would allow operators to switch practices without resetting the one-year clock.  That decision is In the matter of Cheryl Lewis, et al. and is currently being appealed to the state’s supreme court.

I realize many of you are not in those states, but those decisions will often remind producers that they need to understand what their state’s right-to-farm law requires to ensure the farm can utilize the defense if needed. If you do not know your state’s right-to-farm law, the National Ag Law Center has compiled a list of all 50 states here.

---

Goeringer, Paul. “What Other State Decisions Can Tell Us About Right-to-Farm Laws.” Southern Ag Today 4(43.5). October 25, 2024. Permalink