Ag in the Courtroom

 [Disclosure: The author contributed to an amicus curiae brief supporting Monsanto in this case]

Today, the U.S. Supreme Court issued a unanimous opinion in the patented soybean case, Bowman v. Monsanto.  The Court held that a farmer who buys patented seeds may not reproduce and replant patented seeds without the patent holder's permission.  This decision is a major win for agricultural innovation and will ensure that investments in biotechnology research will continue in the future.  

Background

Vernon Bowman, an Indiana farmer, found a novel way to access Roundup Ready technology without paying license fees.  He purchased commodity soybeans from a local elevator and planted them as seed.  When the crop emerged, he sprayed the crop with glyphosate.  Only the soybeans containing the Roundup Ready trait survived the burndown spray.  He subsequently harvested and saved seed from this crop, ensuring that future crops would contain the patented Roundup Ready biotechnology.  Mr. Bowman notified Monsanto of his plans and continued to save the Roundup Ready beans for eight years.  Monsanto sued Mr. Bowman for patent infringement.

What was at stake?

If the Supreme Court ruled in Mr. Bowman's favor, it would have created a loophole to allow seed saving.  While a typical technology agreement between a seed dealer and a farmer includes a contract provision prohibiting saved seed, grain elevators are not usually a party in such contracts.  Farmers could avoid paying tech fees by following Mr. Bowman's lead and purchasing bin-run beans from grain elevators and using them as seed.  These bin-run beans would not be subject to technology agreements.  Patent protection is the only tool that biotech companies can use to protect their investment in research and development.

While many farmers often fantasize about a world without tech fees, the vast majority recognize that these fees are worth the cost.  The numbers do not lie.  Well over 85% of the soybeans, corn, and cotton produced in this country is improved with genetic modification.  Glyphosate-resistant and insect-resistant varieties make crop management easier, reduce soil erosion, improve carbon sequestration, and reduce headaches in general.  

Developing these traits is a time and resource-intensive process that costs well over $100 million per trait.  Biotech companies will not make the investment of time and money without an assurance that they will be compensated for their risk and effort.  Like other innovators, biotech seed companies rely on patents to protect their investment.  Without patent protection, biotech companies would have little incentive to invest research in self-pollinating crops, like soybeans, because there is no guarantee that they would be able to recover their investment beyond their first year's crop.

Looking Forward

This decision further cements the patent protection that biotech companies enjoy.  With assurance that they can enforce their patents, seed developers can confidently invest the resources necessary to develop new, useful cutting-edge genetic traits.  Traits in the pipeline, such as improved drought resistance, yield boosters, and neutraceuticals will eventually make their way to the marketplace.  Yes, farmers will have to pay for these patented traits if they choose to use them; however, without patent protection, it is unlikely that the new traits would ever see the light of day.  

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer.

As expected, the Vermont House of Representatives approved a measure that will require certain foods containing genetically-modified ingredients sold in the state to have labels indicating the presence of GM material.  The legislation passed the House on a vote of 107-37.   Because the legislation was passed late in the session, the Vermont Senate will not have an opportunity to vote on the measure until 2014.

The law exempts labeling for alcoholic beverages as well as products derived from animals, such as meat or cheese.  As we all know, the great state of Vermont will not apologize for its cheese.

The Vermont measure is one of a handful of labeling proposals that are being considered in state legislatures and statewide ballot initiatives.  There have also been bills proposed in the U.S. Senate and House of Representatives that would require labeling across the United States.  However, observers have noted that it is unlikely that a federal GMO-labeling bill will survive a vote in both houses of Congress.

As I discussed in my previous post about state GMO-labeling measures, these bills may run afoul of the Dormant Commerce Clause.  The Dormant Commerce Clause is a principle that promotes national markets and prohibits state laws that discriminate against or burden interstate commerce.  

One exception to the Dormant Commerce Clause is the "health and safety" exemption.  This allows an otherwise discriminatory or burdensome provision to stand if the state legislature based its decision-making on its inherent power to protect the health and safety of its citizens.  The drafters of the Vermont legislation, H. 112, appear to have written the GMO-labeling bill with this exception in mind.

If Vermont does pass such legislation in 2014, there is sure to be a lawsuit over the measure.  When that happens, we will get to see whether the Dormant Commerce Clause will come out of hibernation.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer.

The short answer to this question is likely a qualified "yes." 

Unmanned aircraft’s use in warfare has been the subject of international debate for the past few years as our military increasingly relies on drones to target al-Qaeda and associated groups.  Libertarians and privacy activists have raised concerns over law enforcement’s use of drones domestically.  Now, some in agriculture are concerned that drones will be used by activists groups to harass farmers and ranchers.

It does not require a substantial logical leap to believe that activist groups may use drones to spy on animal operations in hopes of finding environmental violations.  PETA recently announced that it intends to deploy a fleet of drones to monitor hunters to spot poachers and wildlife violations.  Given the potential annoyance that activist drones could cause producers, I have received several inquiries as to whether farmers have any legal protections against drones snooping on their operation.

There is often a lag between the commercialization of a new technology and laws designed to address and regulate that technology.  For example, Congress is still struggling to address a broad array of issues related to internet commerce.  Drones are no exception.  Some states have adopted laws that limit or outlaw state and local police’s use of drones in law enforcement activities.  However, private use of drones is lightly regulated.  The small drones contemplated by PETA are considered model aircraft by the FAA.  According to FAA regulations, these drones are legal to operate so long as they are flown in the line of sight of the operator, fly lower than 400 feet, and avoid aircraft and flight patterns.

At this time, there are only two common legal protections in place to prevent harassment from drones: trespass and nuisance.  Trespass occurs when someone invades, or in the case of drones, causes something to invade property that a landowner exclusively controls.  Trespass is easy to prove when, for instance, your neighbor’s cows escape their fence and trample your crop.  Trespass is much harder to prove when it involves an invasion of airspace.  A low-flying drone could potentially result in a trespass; however the drone would have to interfere with airspace that the farmer actually controls – such as below a roofline.

Nuisance claims can also be filed against activists groups if drone activity leads to a "substantial and unreasonable interference" with the "quiet use and enjoyment" of your property.  Drones can be noisy, frighten livestock, and annoy landowners.  There is a possibility that a drone could be deemed a nuisance if there is proof of damages in the form of reduced agricultural production, decreased property value or the landowner’s stress from constant surveillance by overzealous activists. 

With limited options to regulate the private usage of drones, there may be calls for additional state laws designed to curb private usage of unmanned aircraft.   However, we in agriculture should be cautious about cutting off our nose to spite our face.  While activists may be able to add drones to their bag of tricks to harass agriculture, drones also present a great opportunity for farms and ranches.  Drones are already being used for crop monitoring, weed scouting, and precision agriculture.  We are not far from the day when drones can be used to "ride fence" and assist in monitoring animal health.

It will be a while before we fully understand the role that drone technology will play in both agriculture and activist’s efforts against agriculture.  If they do play a substantial role, I imagine the law related to drones will evolve.  In the meantime, if you have a problem with activist drones monitoring your operation, you should consult your attorney for legal advice.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer.  This column is not a substitute for legal advice.

It looks like EPA will have to defend its position on "dust and feather" discharges.  A West Virginia federal court allowed a lawsuit that pits American Farm Bureau against EPA to proceed.  The case, Alt v. EPA, contests EPA’s authority to require Concentrated Animal Feeding Operations (CAFOs) to obtain NPDES permits on the basis that a "discharge" occurs when dust, feathers, and dander released through ventilation fans comes into contact with precipitation.  The lawsuit has national implications for livestock producers and has attracted high profile intervenors such as American Farm Bureau Federation, Waterkeeper Alliance, and the Center for Food Safety.

The last time I reported on this case, EPA had dropped its order requiring the broiler operation to obtain an NPDES permit.  EPA’s basis for withdrawing the order was that the farmer, Lois Alt, had taken steps to remedy and prevent environmental harm from her operation.  EPA then sought to dismiss the case on the basis that the lawsuit was "moot," meaning there was no longer a live controversy and further litigation would be merely academic.

American Farm Bureau opposed EPA’s motion to dismiss on the grounds that even though EPA changed course in regards to Lois Alt’s farm, it had not changed its national policy regarding whether small accumulations of dust, feathers, and dander outside CAFO ventilation fans constitute a discharge under the Clean Water Act.  American Farm Bureau argued that dismissing the Alt case would essentially allow EPA to punt instead of defending its national policy regarding CAFO regulation.

The court sided with Farm Bureau and denied EPA’s motion to dismiss.  The court reasoned that EPA could not avoid litigating the dust-and-feathers issue in this one case by voluntarily ceasing its conduct towards one farmer while it was actively pursuing the same contested actions against other farmers.

The upshot of this decision is that the court is going to keep EPA’s feet to the fire.  EPA will be forced to defend its policy of requiring NPDES permits for CAFOs on the basis of airborne emissions that come into contact with precipitation.  On the other hand, much is at stake for animal agriculture.  An unfavorable decision for agriculture could establish precedent that requires livestock producers to obtain NPDES permits.  NPDES permits are often burdensome to comply with and empower EPA and state environmental agencies with substantial control over livestock facilities.

The parties in this suit will be submitting briefs containing their arguments this summer.  I will keep you updated as developments occur.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer.

HSUS intends to use a federal lawsuit over horse slaughter as a vehicle to advance a novel legal argument that could burden all slaughter facilities with additional regulatory compliance costs.  If HSUS is successful, then all animal slaughter plants would be subject to lengthy regulatory delays prior to commencing operations.

Horse slaughter, to be certain, is a contentious issue.  The issue forces us to weigh our nation's collective emotional attachment to horses against the harsh reality of a need for an outlet to control the overpopulation of horses.  Congress has wrestled with the issue as well.  Horse slaughter was effectively banned from 2007 to 2011.  Recognizing that the ban led to a dramatic increase in the number of American horses bound for Canadian and Mexican slaughter plants, Congress lifted the ban in 2011.

With no legal barriers to domestic horse slaughter, several facilities have requested USDA to provide inspectors, which will allow horse slaughter to commence.  One such facility, Valley Meats Co., filed a lawsuit in a New Mexico federal court to compel USDA to provide inspectors for their facility.  While much of the discussion of Valley Meats' suit has centered around the ethics of horse slaughter, HSUS has raised an issue that may have an impact well beyond the slaughter of horses.

HSUS intervened in the suit to oppose Valley Meats' request to begin processing horses.  In its complaint, HSUS argues that horse slaughter cannot commence until USDA considers the environmental impacts of its decision to allow Valley Meats to begin slaughtering horses.  HSUS argues that USDA is required to take this action under the National Environmental Policy Act (NEPA).

NEPA is essentially a paperwork requirement.  NEPA requires federal agencies to take a hard look at the environmental consequences of their projects before taking action.  If the federal agency determines that its actions may affect the environment, then it must conduct what is known as an "Environmental Assessment" to determine whether a proposed action would have a significant impact on the environment.  If a significant effect is found, then the agency must then conduct an Environmental Impact Study, which details potential environmental effects.  The Environmental Assessment and the Environmental Impact Study are not slight endeavors.  They take years to compile, cost millions of dollars, and the results can be contested in court after they completed. 

HSUS contends that NEPA analysis should be conducted prior to the opening of horse slaughter at Valley Meats.  Recent history suggests HSUS will file these same lawsuits at other horse slaughter facilities.  In 2007, HSUS prevailed in such a lawsuit, HSUS v. Johanns, which held that USDA failed to comply with NEPA by not considering the environmental impacts of allowing horse slaughter facilities to pay USDA on a fee-for-service arrangement to inspect horses for slaughter.

If you are confused as to how a change in a payment arrangement for inspectors has an impact on our environment, you are not alone.  The court's reasoning in Johanns is baffling. Nonetheless, HSUS used the courts and NEPA's paperwork mandate to bring about an end to domestic horse slaughter.

We cannot expect HSUS to limit its use of NEPA to barring horse slaughter.  It will certainly use NEPA to stifle and delay openings of other slaughter plants, causing many operations to never come to fruition.  The courts and Congress will do what it may with horse slaughter, but agriculture should certainly beware of HSUS and its use of NEPA as a sword against animal agriculture.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer.