Each December, we look back at the biggest ag law developments for the year. It was another busy year in the agricultural law realm. Here were some of the key stories.
Also, if you’d like to listen to Paul Goeringer and I discuss these issues and more, be sure to check out our 2019 Ag Law Year in Review podcast episode here.
The big story for 2019 is hemp. The 2018 Farm Bill paved the way for legal hemp production in the United States. Most individual states have made changes to their laws that have set the stage for hemp to be produced in the majority of US states. However, as my dad would say, there is still a long row to hoe. Before hemp can be produced under the provisions of the 2018 Farm Bill, there will have to be state-level production plans in place that have been approved by the USDA, or for states not planning to submit a state-level plan, growers will have to follow a federal USDA plan. The Interim Final Rule was published last month, instructing states on what must be included in their plans. [Click here for summary of Interim Final Rule and here for a video summary.] Once plans have been approved by the USDA, states will then need to get their licensing or permitting procedures up and running before growers can legally start producing.
Beef checkoff litigation.
Litigation related to the beef checkoff program continues around the country. As beef producers know well, under the checkoff program, a mandatory $1/head assessment is paid when cattle are sold. Typically, half of that payment is retained by the qualified state beef council and the other half is remitted by the council to the national organization, the Cattleman’s Beef Board.
R-Calf initially filed suit in the United States District Court for the District of Montana, R-CALF v. Perdue, challenging the requirement that producers pay checkoff money to the Montana Beef Council. Specifically, R-Calf argued this requirement violates the First Amendment because the Montana Beef Council is a private entity that engages in speech. Further, they argue, there is no mechanism allowing plaintiffs to elect to have their full assessment paid to the Cattleman’s Beef Board if the plaintiffs object to the messaging by the Montana Beef Council.
The beef councils argue, among other things, that their messaging is not private speech, but is instead government speech and point to a memorandum of understanding entered into between the Montana Beef Council and other state beef councils with the USDA to provide USDA oversight and approval for any messaging from the state beef councils. This issue of whether the speech is private or government is critical, as prior United States Supreme Court rulings have found that compelled government speech does not implicate the First Amendment, whereas compelled private speech does raise First Amendment concerns.
During this litigation, R-Calf sought and was granted a preliminary injunction requiring all checkoff payments made by Montana producers be sent to the Cattlemen’s Beef Board unless producers specifically indicate they wish for a portion of their checkoff payment be retained by the Montana Beef Council.
The Montana lawsuit was then expanded to request a permanent injunction in Montana for the funding of state beef councils in 13 additional states (HI, IN, KS, NE, NV, NY, NC, PA, SC, SD, TX, VT, WI). Thus far, no similar injunctions have been issued in these other states, although they have been requested by R-Calf.
If my math is correct, this marks the fourth year of the controversy surrounding the definition of “Waters of the United States” under the Clean Water Act making this list. A brief summary of the issue is that the Clean Water Act gives federal jurisdiction to the Environmental Protection Agency and the US Army Corps of Engineers over “waters of the United States.” As such, to do certain activities on a WOTUS, a federal permit is required. What the Clean Water Act failed to do, however, is define the meaning of “WOTUS.” This has been the source of legal disputes lasting several decades.
In 2015, the EPA promulgated a new regulation that did define WOTUS. Numerous lawsuits were filed related to this definition, various stays and injunctions have been issued, and several courts have ruled on various issues, including most recently Georgia v. Wheeler, where the United States District Court for the Southern District of Georgia hold that the rule was both procedurally and substantively invalid.
Currently, the 2015 Rule has been rescinded by a final agency rule-making from the EPA effective December 23, 2019. Thus, barring any injunctions or other court action, as of December 23, the 2015 rule will not be in effect anywhere in the United States. Instead, landowners are left with the pre-2015 WOTUS approach that led to years’ worth of litigation.
Meanwhile, the Trump administration is working on crafting a new WOTUS definition. They released their proposed draft to the public last December and took public comment through April 15, 2019. After reviewing the comments received, the agencies will issue a final rule imposing a new WOTUS definition. It is all but certain litigation will follow, meaning we will likely make it 5 years in a row talking about this issue next December.
Groundwater as a Conduit.
Sticking with the Clean Water Act topic, another major issue this year is whether indirect discharges from a point source into groundwater that eventually reaches a Water of the United States fall within the jurisdiction of the Clean Water Act. If so, a NPDES permit would be required for each discharge. There have been a number of federal court rulings on this issue, which have created a circuit split. For more background on these cases, click here.
One of these cases, Maui County v. Hawaii Wildlife Fund, was argued before the United States Supreme Court in November. In that case, the County of Maui pumped effluent into injection wells. The effluent went into the groundwater and then made its way into the Pacific Ocean. The Hawaii Wildlife Fund filed suit, claiming that the County needed a NPDES permit for the injection wells. At oral argument, the County essentially argued that it is only direct discharges that require a permit, meaning that no permits are required for discharges into groundwater. On the flip side, the Hawaii Wildlife Fund argued that any discharge that was “fairy traceable” from the Water of the United States back to the point source required a permit. I was able to attend the oral arguments in this case, and recorded a podcast episode with several other ag lawyers who were in attendance to get our thoughts, impressions, and predictions on how the case may come out. To listen to that podcast episode, click here.
The Opinion in this case should be released by June 2020, and depending on the decision and the way it is written, there is the potential to have major impacts on the agricultural industry nationwide.
Endangered Species Act revisions.
In August of this year, the Department of the Interior announced significant changes to the Endangered Species Act. Some of the most significant changes included: (1) allowing consideration of economic impacts when determining whether a species should be listed as endangered; (2) requiring that a “critical habitat” be an area actually occupied by the listed species or for an unoccupied area a showing be made that the currently occupied area is inadequate to ensure survival; (3) the protections of animals deemed “endangered” will no longer automatically apply to species listed as “threatened”; and (4) to be listed as “threatened” factors considered must be “likely” to occur, rather than just foreseeable.
Shortly after the new rule was published, a number of environmental and animal rights groups filed suit in Center for Biological Diversity, et al. v. Bernhardt, challenging the new regulations. Specifically, the lawsuit filed in the United States District Court for the Northern District of California claims the new rules violate the National Environmental Policy Act, the Administrative Procedures Act, and the Endangered Species Act.