Category: Ag Law

Postscript:  After this article was completed and while waiting to be published, the Ninth Circuit Court of Appeals rendered a decision on October 2, 2024, upholding the EPA’s decision to deny the plaintiff environmental groups’ petition to compel revised CAFO regulations. A request for the granting of an appeal to the U.S. Supreme Court must be filed within 90 days of October 2, 2024.

Note: This article is a continuation of a topic first discussed in an article published on March 15, 2024, titled, “EPA Made Commitment to CAFO Permitting Reform But No Action Evident to Date.” 

There have been significant developments in the last six months since Southern Ag Today first published an article outlining: 

1. the United States Environmental Protection Agency’s (“EPA”) announcement of an internal “comprehensive evaluation” of its Clean Water Act (“CWA”) NPDES permit regulations for confined animal feeding operations (“CAFO”) for potential agency initiation of reforms; and 
2. a lawsuit captioned, Food & Water Watch, et al. v. EPA, No. 23-2146, pending in the U.S. Court of Appeals for the Ninth Circuit, seeking NPDES CAFO permit reform through court intervention and order. 

At issue is EPA’s continued use and implementation of a regulatory scheme defining NPDES permit obligations by reference to species-specific animal equivalency units (“AEU”) housed on site—resulting in the now familiar CAFO classifications as Large, Medium and Small, each carrying varying obligations, or none at all. Notably, the CWA contains no definition of a CAFO, which statutorily must be regulated as a point source discharge under the NPDES permit system. EPA uses those classifications to implement and enforce the law in substitution for measurement or monitoring of discharges. EPA’s regulatory scheme is based entirely upon an agency interpretation, not one found in the law. 

1. EPA internal CAFO Permitting Reform Process

EPA has begun its internal assessment of NPDES CAFO permitting reform in earnest with:

• April 30, 2024: EPA appointments to the advisory Animal Agriculture and Water Quality Subcommittee “(AAWQ”), charged with making reform recommendations to EPA; 
• May 30-31, 2024: First AAWQ meeting (Washington, D.C.) 
• August 8-9, 2024: Second AAWQ meeting (Lancaster, PA)

It has been slightly more than one year since EPA announced its internal CAFO Reform effort, and its parameters. EPA included its plan within two August 15, 2023, agency adjudications denying administrative petitions filed by Food & Water Watch and others challenging the continued legal efficacy of the current NPDES CAFO permit regulations. Despite fifteen years of use (last revised in 2008) the petitioners argue that the regulations fail to conform to CWA statutory authority and purposes. It is a relatively safe assumption that this process will likely continue at a slow pace. 

1. Litigation on its way to the U.S. Supreme Court?  

Meanwhile, Food & Water Watch, and the other petitioners, appealed the August 15, 2023, denial of those two petitions to the Ninth Circuit Court of Appeals in Food & Water Watch, et al. v. EPA, No. 23-2146.  That case has now completed:

• All Briefs have been filed by the parties. 
• September 12, 2024: Oral argument conducted (view recording). 

Oral argument is a difficult predictor of an outcome, but questioning during oral argument by the Ninth Circuit panel of 3 judges appeared to be more sympathetic to EPA’s arguments. That is not surprising based upon the heretofore poor track record of success of administrative petitions seeking to force regulation changes.  

Nevertheless, the most important thing about the pending appeal is that the U.S. Supreme Court is the next available appeal. Whichever party receives an adverse ruling, in whole or in part, the outcome at the Ninth Circuit will almost certainly result in a request to the U.S. Supreme Court to grant an appeal and review the legal issue of whether current EPA NPDES CAFO permit regulations should stand as-is, be declared invalid and remanded to EPA for further action, or some permutation of those outcomes as applied to individual provisions.  

The current U.S. Supreme Court has illustrated its interest in becoming involved in cases where it perceives an administrative agency has overstepped its statutory bounds in promulgating regulations and/or has made interpretations not directly supported by the statute on how to fulfill its statutory duties to implement and enforce a statute.

That willingness has been illustrated in full flower in the well-known recent decisions in both Sackett et ux. v. EPA et al., No. 21-454 (reversing EPA’s regulatory scheme for interpreting the statutory term “waters of the United States” (“WOTUS”) under the Clean Water Act) and Loper Bright, et al., v. Raimondo, et.al, No. 22-451 (no longer granting any deference to administrative agency interpretation of how to implement and enforce a regulation when faced with a statute containing an ambiguity).    

Before the U.S. Supreme Court granted an appeal of the Circuit Court of Appeals outcome in the Sackett case in 2022, few, if any, legal observers would have pegged that relatively obscure litigation as the future vehicle for a monumental overhaul of the WOTUS definition in federal law. 

Will this case be the next unlikely vehicle for groundbreaking U.S. Supreme Court intervention in administrative agency regulatory practice?  

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Duer, Brook, and Paul Goeringer. “Will the U.S. Supreme Court Be Asked to Send EPA Back to the Drawing Board on CAFO Permits?” Southern Ag Today 4(41.5). October 11, 2024. Permalink

In their most recent legislative sessions, nine states – Alabama, Arizona, Florida, Kentucky, Michigan, New York, Pennsylvania, Tennessee, and Texas – considered legislation banning the manufacture, sale, or distribution of cell-cultured meat. Florida and Alabama both passed the legislation, and their governors signed it into law. In Kentucky, New York, Tennessee, and Texas the proposed bills did not make it out of committee before the session ended. Arizona’s bill made it further with HB2121 passing in the House of Representatives but failing in the Senate. The Pennsylvania and Michigan bills, whose legislative sessions are ongoing, were introduced following the passage of the Alabama and Florida bills and are each being considered in committee. 

Florida 

On May 1, 2024, Florida became the first state in the U.S. to ban cell-cultured meat. SB1084, an appropriations bill with a number of agriculture-related measures, included a provision outlawing the manufacturing for sale, selling, holding or offering for sale, or distribution of “cultivated meat.” The Florida law defines cultivated meat as “any meat or food product produced from cultured animal cells.” The violation of this law is deemed a misdemeanor of the second degree and a food establishment which violates the law will be subject to disciplinary actions. Additionally, a restaurant, store, or other business may have its license suspended if the owner or an employee is convicted of violating this law in connection with that business. The law does not ban research conducted on the production of cultivated meat. The law went into effect on July 1, 2024.

Alabama 

Similarly, on May 7, 2024, Alabama Governor Kay Ivey signed SB23 into law. This law prohibits the manufacturing, selling, holding or offering for sale, or distribution of any cultivated food product in Alabama. The law defines a cultivated food product as any food product produced from cultured animal cells. A violation of this law is considered a Class C misdemeanor, and establishments found to be in violation could have its food safety permit suspended. The law does not prohibit research of cultivated food products by a “federal, state, or local governmental entity or institution of higher education, or a person that is partnered with a governmental entity or institution of higher education.” SB23 goes into effect on October 1, 2024. 

Lawsuit against Florida  

On August 12, 2024, UPSIDE Foods, Inc. filed a complaint in the U.S. District Court for the Northern District of Florida challenging Florida’s ban on cell-cultured meat. UPSIDE is a California company that produces cultivated meat products grown from animal cells. UPSIDE was the first manufacturer of cell-cultured meat or poultry authorized by the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA), who share the regulatory authority over cell-cultured meat, to sell its product in the U.S. 

In this complaint, UPSIDE argues that Florida’s cell-cultured meat ban is unconstitutional because it violates both the Supremacy Clause and the Commerce Clause of the U.S. Constitution. The complaint alleges that the Supremacy Clause, which gives priority to the Constitution and federal laws over any conflicting state laws, is violated because Florida’s ban is preempted by federal laws regulating meat and poultry products. Further, UPSIDE argues that the Commerce Clause, which grants Congress the authority to regulate commerce among the states, is violated by Florida’s ban because it discriminates against out-of-state producers of cultivated meat and benefits the interests of Florida’s agricultural industry. So far this is the only legal challenge brought against Florida’s cell-cultured meat ban, and no challenge has been made against Alabama’s. However, that might change when the Alabama law goes into effect on October 1, 2024. 

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Stone, Emily. “Cell Cultured Meat.” Southern Ag Today 4(37.5). September 13, 2024. Permalink

As fall approaches, so does hunting season.  As hunters are scouting for the best locations, landowners may be searching for opportunities to generate additional revenue from agricultural and forested property. Outdoor recreation such as hunting, fishing, camping, and hiking can provide additional opportunities for landowners, depending upon the property and the willingness of the landowner to go down this path. Not all landowners are willing to accept strangers walking around their property so recreational leases are not a perfect fit for everyone.  The leases can also be challenging as they differ significantly from traditional agricultural leases.

When considering these leases, landowners must make decisions on what types of activities and limitations they are willing to allow.  Some of the issues to decide include: 

• How do you price your recreational opportunities?
• How many people have permission to enter the property? 
• Can the lessees camp and build campfires on the property? 
• What species are being hunted? 
• Are there limits on the amount of game that can be taken?
• How do you allow for recreational use while protecting growing crops and livestock?

However, there are other issues that may be addressed through the lease as well as other means. For example, what about liability in case someone is injured on your property? Insurance is a readily available and cost-effective means to reduce liability. Based on my conversations with insurance underwriters over the years, many claims submitted for hunting accidents involve tree stands and ATVs. In addition to insurance, simple changes to a lease agreement such as forbidding ATVs and limiting tree stands to only ones that they personally install, may help to mitigate those and other risks.  

To see a more in-depth list of factors to consider in a hunting lease, as well as a model lease form, you can read the Ranchers’ Agricultural Leasing Handbook: Grazing, Hunting and Livestock Leases handbook which discusses these issues and many more that landowners should consider. 

Even with this information, I strongly recommend that an attorney draft your recreational lease, specific to your property, your boundaries and your situation.  For tips on finding an attorney, please visit this Southern Ag Today article.

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Rumley, Rusty. “Hunting Leases and Rural Land.” Southern Ag Today 4(36.5). September 6, 2024. Permalink

On June 21, 2024, the United States Supreme Court issued an opinion in the long-running dispute between Texas and New Mexico over the 1938 Rio Grande Compact. The Court, in a 5-4 decision, held that the federal government could block an agreement between Texas and New Mexico to resolve their dispute. Although the compact relates to the river, the dispute centers on groundwater pumping. 

Texas filed suit against New Mexico in 2013, alleging that excessive groundwater pumping in New Mexico deprived Texas of its fair share of Rio Grande water under the compact.  Note that lawsuits between states originate in the United States Supreme Court. The Court appoints a Special Master to hold hearings and make recommendations to the Court, which ultimately decides the issues.

Unlike most compacts, the Rio Grande Compact requires New Mexico to deliver water not to the New Mexico/Texas border, but to Elephant Butte Reservoir, a federal project about 100 miles north of the border. Texas alleged that groundwater pumping along the river between the Elephant Butte Reservoir and the state line took water from the river that rightfully belonged to Texas.  

The federal government filed a motion to intervene in the litigation in 2014, alleging that its interest in the federal project at Elephant Butte allowed intervention to protect the government’s rights and obligations. The federal government, through Downstream Contracts, was required to deliver water to an irrigation district in New Mexico, and one in Texas. The Court allowed the federal government to intervene, a relatively rare occurrence, because of the unique circumstances of the case and the fact that its interests aligned with those of Texas.

Texas’ lawsuit focused on increased groundwater pumping between the Elephant Butte Reservoir and the state line. While the federal government had operated the reservoir based on data from 1951 to 1978 (“D2 data”), a time period where groundwater pumping increased significantly in New Mexico, Texas asked for allocations to be based on 1938 data, when there was much less groundwater pumping in New Mexico. The United States, which had operated based on the later for decades, did not request a change.

After 10 years of hearings and litigation, Texas and New Mexico agreed on a consent decree, settling the issues between the states. The agreement continued water allocations based on the D2 period, which favors New Mexico, but measured the water delivery at El Paso, which favors Texas. Complex accounting measures in the agreement ensured that Texas would receive the state’s fair share of water. 

However, the federal government objected to the agreement, claiming that its interests in administering the water project were threatened. In addition, for the first time, the federal government claimed that the water allocation should be based on 1938 levels of groundwater withdrawals. New Mexico estimates that a forced reduction in groundwater withdrawals to 1938 levels would mean a loss of 50,000 jobs and 10% of the state’s gross domestic product.

Justice Jackson, joined by Chief Justice Roberts and Justices Sotomayor, Kagan, and Kavanaugh wrote the majority opinion. The majority found that the federal government had independent claims that would be resolved by the agreement. Given that the government was now a party, the agreement could not resolve the government’s interests without its consent. Since the government’s interests were aligned with those of Texas, and Texas had requested a 1938 baseline, the government was deemed to make a similar request. Given the close connection between the compact, the federal project and the irrigation contracts, the government must agree to any resolution of the case.

Justice Gorsuch, who also authored the Court’s 2018 unanimous opinion allowing the United States to intervene, wrote the dissenting opinion, and was joined by Justices Thomas, Alito, and Barrett. The dissenters summarized their position as follows:

The Court’s decision … defies 100 years of this Court’s water law jurisprudence. And it represents a serious assault on the power of States to govern, as they always have, the water rights of users in their jurisdictions. The Special Master issued a detailed 115-page report laying all this out. His views were wise, his recommendations sound, and, respectfully, we should have done as he suggested.

The dissenters opine that the Court denied the entry of the consent decree “[b]ecause the federal government demands as much.” In addition, the federal government could not assert these claims alone in the Court but would have to file a lawsuit in the lower court.

Given the number of federal water projects in the United States, and increasing disputes between surface water and groundwater users, this decision could allow the federal government to take control of groundwater allocations in a large number of situations. Groundwater users generally lose these disputes because groundwater withdrawals generally began after surface water withdrawals. Since the surface water users have seniority, surface water withdrawals receive priority. The decision may cause large cuts in groundwater withdrawals in New Mexico, as well as put groundwater users in jeopardy wherever federal water projects exist. As in this case, the competing uses will likely include large agricultural users. New Mexico and Texas will now have to start back at square one.