Jul 28, 2014
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Janzen Ag Law Blog

RSS By: Todd Janzen, AgWeb.com

Janzen Ag Law is a blog written by Todd Janzen, former Kansas farmer now practicing attorney in Indiana. Topics include all types of legal questions facing modern farmers and agribusinesses, including contracts, environmental regulations, nuisance, big data and privacy concerns, as well as other issues. His email is tjanzen@psrb.com. He tweets from @JanzenLaw. His regular blog columns can also be found at JanzenAgLaw.com.

Legal Rights You Give Up When Agreeing to Arbitration

Jun 26, 2014

Although most people are unfamiliar with the arbitration process, it is common for many form contracts to contain "arbitration" clauses. The Texas Supreme Court recently addressed cotton farmers’ challenge to an arbitration clause in a cotton marketing contract.  The Texas court upheld the arbitration clause but questioned whether a one-sided attorneys’ fees provision favoring the marketer was unconscionable. (Read Texas ag blogger Tiffany Dowell's good summary here).  Having not read the boilerplate common in many contacts, people are often surprised to learn they have consented to arbitration.  The recent Texas case reminded me of my own experiences with arbitration clauses and what four rights clients give up when they agree to arbitrate:

1.   Your right to have your dispute resolved by the judicial system.  Arbitration is meant to be a speedy alternative to the courthouse.  When you agree to arbitrate a dispute, you give up your right to seek redress in a court.  Instead, your dispute is resolved according to the particular arbitration rules selected by your contract. Rather than your dispute being heard in the nearest county courthouse, arbitration will take place in the forum selected by the contract or the arbitrators.  This may mean your dispute is resolved in a state far away.

2.    Your right to have your dispute resolved by a judge or jury.  File a breach of contract action in a court and either a judge or jury will determine (a) whether there has been a breach and (b) to what extent damages are owed.  In arbitration, a contractual dispute is resolved by one or more arbitrators who render a decision and, if deemed necessary, award damages to the prevailing party.  Who are these arbitrators?  That depends on what the contract or arbitration rules require.  They may be industry professionals, retired judges, private practice attorneys, or anyone identified by the contract.

3.    Your right to obtain "discovery" in the judicial process.  One of the central components of court litigation is "discovery," the process by which both plaintiff and defendant are allowed to learn all aspects of their opponent's case.  This means the opportunity to ask the other side to answer questions (interrogatories) under oath, require witnesses to answer questions live in depositions under oath, and require parties to provide documents to support their positions.  Discovery can be long, expensive and grueling process, but it can also be very thorough.  Arbitration typically shortens the "discovery" process, limiting a party's ability to obtain information about their opponent's position.

4.  Your right to an appeal.  If you do not agree with an arbitration award, you have few options to appeal.  You can appeal the award to court, claiming the process was unfair, an arbitrator was biased, or the award was unconscionable.  But courts give great deference to arbitration awards and will overturn them only in rare circumstances.  There must be something outrageous that occurred.  Most likely, the arbitration award will stand and will be binding.

Giving up these rights does not mean you should avoid contracts with arbitration clauses.  Arbitration is intended to provide a streamlined, less expensive means for resolving contractual disputes.  Parties signing contracts with arbitration clauses should consult an attorney and understand what they are giving up and how arbitration will occur, if needed.  The agreement to arbitrate is made at the time the contract is signed, not when a dispute arises.

Before You Click "Accept," Read Your Farm Data Privacy Policy

Jun 06, 2014

If you are like most people, when computer programs ask you to accept their latest privacy policy, you probably just hit "I accept these terms" and get on with using the software.  But recent concern over who controls agriculture's "big data" might have made you pause and think about whether you should just accept the terms provided--or decline and look for something else.  As agribusinesses roll out their farm data collection and analysis programs, take some time to read the data privacy policy that will accompany the program.  Here are some questions to ask as you do:


1.  What information will be collected?  Most privacy policies should explain what information will be collected for use by the technology provider.  Keep in mind the data collected by the provider may be more than just the information you manually provide.  The software might also be collecting how you access the program, when you access the program, and why you access the program.   Therefore, the first question to always ask is what information is the provider collecting?


2.  What control do I have over data that is collected?  Once you know what information the provider is collecting, your next inquiry should be to determine what control the provider gives you in managing data generated by your farm.  "Control" requires three things:  The right to maintain, alter, and delete your data on your terms.  Can you delete data that has been previously uploaded to the provider or, once uploaded, does the data become the property of the provider?  A good privacy policy should explain that you have the right to cancel service and know that your data is deleted by the provider.


3.  How will the provider use the information?  This is the question in farm industry circles.  Once a user provides farm data to a provider, what rights does the provider have in using that data for its own purpose?  Similarly, does the provider have the right to share or sell that data with others?  We all know that Google sells our search terms to advertisers.  Will your provider similarly sell your data to vendors that might want to know, for example, that you are running low on glyphosate?   The privacy policy should explain this. 


4.  Is the provider committed to notifying you of future changes?  Finally, when reviewing a data privacy policy, determine whether the provider is offering to keep you informed of changes to its data privacy policies.  Alternatively, the provider may tell you "these terms are subject to change at any time without notice."  Make sure the provider agrees to notify you when changes in policy occur—because they will.  The law and these issues are evolving, and data privacy policies will too.  


Remember, by clicking "accept" you are agreeing to be bound by the technology provider's privacy policy—which is a binding contract.  Federal and state laws are mostly void of statutes protecting your farm data privacy, but by reading data privacy policies, you can make an informed decision.     

Are Drones Legal As "Hobby" Aircraft?

May 16, 2014

The prevalence of drone flights on farms and in other remote locations has apparently caused some real concern at the Federal Aviation Administration (FAA).  There are court cases pending to determine whether current drone usage is legal (from both a regulatory standpoint and a First Amendment standpoint--more on that in future posts), and new FAA regulations are expected in 2015 integrating drone use into U.S. airspace.  But in the meantime, many farmers are taking to the skies--either believing drones are already legal or believing no one will notice or care.

The main reason I hear explaining why drones are legal in the US is that they are essentially "model" or "hobby" aircraft. I thought it was worth digging into the legal basis for this claim. Here's what I found.

The FAA states: "Flying model aircraft solely for hobby or recreational reasons does not require FAA approval." However, flyers must follow the FAA Advisory Circular 91-57 guidelines for model aircraft. These guidelines instruct a model aircraft operator:

a. Select an operating site that is of sufficient distance from populated areas. The selected site should be away from noise sensitive areas such as parks, schools, hospitals, churches, etc. 

b. Do not operate model aircraft in the presence of spectators until the aircraft is successfully flight tested and proven airworthy.

c. Do not fly model aircraft higher than 400 feet above the surface. When flying aircraft within 3 miles of an airport, notify the airport operator, or when an air traffic facility is located at the airport, notify the control tower, or flight service station. 

d. Give right of way to, and avoid flying in the proximity of, full-scale aircraft. Use observers to help if possible. 

e. Do not hesitate to ask for assistance from any air traffic control tower or flight service station concerning compliance with these standards.

Don't assume that these guidelines mean that flying a drone under 400 feet means the FAA will consider such usage legal. The FAA recently called this belief a "misperception" of the law, stating: "The FAA is responsible for the safety of U.S. airspace from the ground up. This misperception [that the FAA has no control under 400 feet] may originate with the idea that manned aircraft generally must stay at least 500 feet above the ground. Read: Busting Myths About the FAA and Unmanned Aircraft.

So are farm drones legal as "hobby" or "model" aircraft?  That probably depends on the drone and how it is being used.  Our courts will eventually provide a more definite answer.  In the meantime, if you are flying your farm drone, you would be wise to follow the FAA's guidelines for hobby aircraft.

With the Promise of Drones Comes Legal Questions

May 05, 2014

Imagine a future where a rancher can use an autonomous drone to fly out to a pasture miles from the homestead to check on his herd. The drone reports back that the herd is accounted for except for one steer that is lying down alone, more than 1,000 feet from the herd, and appears to be sick. The drone sends GPS coordinates to the rancher, who then dispatches a ranch hand to the exact location of the sick animal. The drone’s surveillance ultimately saves the animal’s life. 

Now imagine that a similar drone is used by the Environmental Protection Agency (EPA) to fly over feedlots. The EPA drone spends its flying hours, not looking for sick or stray cattle, but instead looking for Clean Water Act violations. The drone flies over pens, counts cattle to make sure numbers do not exceed permitted amounts and checks for visual evidence of runoff from pens into nearby creeks or streams. If a problem is found, the drone takes pictures for evidence and alerts state or federal officials to come to the feedlot for an inspection.

As is often the case with new technology, beneficial uses are often accompanied by nefarious uses. The promise for drones raises a lot of legal questions about how drones will ultimately be used.

The term is used frequently, but what are "drones?" The Federal Aviation Administration (FAA) uses the term "unmanned aircraft system," or "UAS" to describe what we think of as "drones." A UAS, by definition, flies without an onboard pilot, relies on GPS for guidance and contains a data link to a control station on the ground.  A UAS is different than a remote-controlled aircraft that is flown within sight of an on-ground controller.

Congress has given the FAA jurisdiction over U.S. airspace. In uncongested rural areas, U.S. airspace begins at 500 feet. Currently, the FAA has not approved commercial UAS usage. That is expected to change in the next two years as the FAA is working on regulations to integrate drones into U.S. airspace.

Thus, in the future, farmers, ranchers and other persons will be allowed to use drones for agricultural purposes. No doubt government agencies will also see the benefits of using autonomous aircraft to inspect farms and livestock facilities. However, government usage comes with added requirement that flyovers occur within legal boundaries.

Although drone usage by government agencies is relatively new, courts long ago examined the legality of similar aerial surveillance activities when performed by the government. Such analysis involves two questions: "Is there a statute that permits aerial surveillance?" and "Is the exercise of that statutory authority constitutional?"

The leading case is Dow Chemical Co. v. U.S., 476 U.S. 227 (1986), a case that made it all the way to the U.S. Supreme Court. In that case, Dow Chemical Co. challenged the EPA’s authority to conduct aerial surveillance of one of its factories under the Clean Air Act after it learned that the EPA had flown over at 1,200 feet to photograph interior portions of the plant that were open to the sky.  The Supreme Court held that the use of aerial photography was within EPA’s statutory authority because Congress, by passing the Clean Air Act, had provided the EPA with a "right of entry to, upon or through any premises." The court also noted that the EPA’s aerial surveillance used the same observation methods commonly available to the public.

There are also constitutional concerns. All Americans are afforded a right to privacy that is implicit in the Fourth Amendment, which prohibits "unreasonable searches and seizures."

The test of whether aerial surveillance violates one’s right to privacy is twofold: First, a person must have exhibited an actual (subjective) expectation of privacy in the property searched; and second, the expectation must be one that society recognizes as "reasonable." Katz v. U.S., 389 U.S. 347, 361 (1967). If both elements are present, the government can still search the premises, but it must first obtain a warrant issued by a court.

In deciding the Dow case, the Supreme Court distinguished searches between the "curtilage" of one’s home and the "open fields" nearby. "Curtilage" is the "area immediately surrounding a private house."

People have a reasonable expectation of privacy in their home and its curtilage. On the contrary, the Fourth Amendment does not protect the privacy of individuals in areas "out of doors in fields, except in the area immediately surrounding the home." The court ultimately found that the Dow factory was an industrial complex, more like an open field than the curtilage of one’s private residence. The EPA’s aerial surveillance was constitutionally allowed.

Thus, there is precedent to allow government agencies to use drones to fly over U.S. businesses, within constitutional limits. Such flyovers are permitted over fields but likely become suspect when occurring over the "curtilage" of someone’s home.

It is safe to assume drone usage in the future will push the legal envelope even further than prior cases involving piloted aircraft, since drones can fly closer and more secretively than a helicopter or airplane ever could.

Finally, I offer a word of caution to anyone who thinks they have the right to shoot down a drone over their property. The FAA recently issued a statement that "shooting at an unmanned aircraft could result in criminal or civil liability, just as would firing at a manned airplane."

The FAA continued by saying that a drone "hit by gunfire could crash, causing damage to persons or property on the ground, or it could collide with other objects in the air." The FAA’s statement has support from the U.S. Code, which makes it a crime for any person who "sets fire to, damages, destroys, disables or wrecks any aircraft in the special aircraft jurisdiction of the United States ..." 18 U.S.C. 31(a).

Individuals have been prosecuted under this statute for shooting at manned aircraft. Because the code does not distinguish between manned and unmanned aircraft, it seems probable that a person shooting at or downing an unmanned drone could be prosecuted.

A drone flying over your property may be trespassing (unless permitted by the FAA), which is a crime as well. Drones’ promise for agriculture in the next few years is huge. When the wave comes, we’re likely to see waves of litigation as well, as courts sort out the limits of aerial surveillance once again. 

U.S. v. Causby: How a 1940s Chicken Farmer Case Will Impact Drone Usage in the 21st Century

May 05, 2014

In 1946, a North Carolina chicken farmer sued the United States government for trespass by air. The US navy and army operated an airstrip adjacent to the chicken farm, such that the glide path from the runway extended directly over the farmer’s house and outbuildings. Normal glide paths put aircraft 67 feet above the house, 63 feet above the barn, and 18 feet above the highest tree. Bombers, fighters, and other aircraft routinely flew over the farm, causing quite a disturbance:

The noise is startling. And at night the glare from the planes brightly lights up the place. As a result of the noise, respondents had to give up their chicken business. As many as six to ten of their chickens were killed in one day by flying into the walls from fright. The total chickens lost in that manner was about 150. Production also fell off. The result was the destruction of the use of the property as a commercial chicken farm. Respondents are frequently deprived of their sleep and the family has become nervous and frightened.

US v. Causby, 328 US 256, 258 (1946).  The farmer decided to sue the US government for trespass.  At the time, US jurisdictions followed the old common law rule that landowner owns all of the land beneath their property and all of the sky above their property "into the periphery of the universe"—in Latin: Cujusest solum ejus est usque ad coelum.  But the coming age of air travel caused the US Supreme Court to declare that this old doctrine had no place in the modern world.  "The air is a public highway," Justice Douglas wrote.  Were it not, every commercial flight over land would be a "trespass," subjecting the US government and private airlines to endless trespass claims.

Still, it was obvious to the Court that the "public highway" rule did not address the wrong suffered by the chicken farmer caused by hundreds of airplanes flying barely over his property.  The result was newly created doctrine articulated to protect landowner rights while giving aircraft the right to fly over private property:

[I]f the landowner is to have full enjoyment of the land, he must have exclusive control of the immediate reaches of the enveloping atmosphere. Otherwise buildings could not be erected, trees could not be planted, and even fences could not be run. . . . The landowner owns at least as much of the space above the ground as he can occupy or use in connection with the land. 

US v. Causby, 328 US 256, 264 (1946).  Thus was born the "enveloping atmosphere" rule, holding that a landowner owns as much of the airspace above his or her property to which he or she can reasonably use, and any invasion of that airspace is a trespass subject to damages. Likewise, that airspace above the "immediate reaches above the land" is part of the public domain, not subject to trespass.

The Causby case demonstrates that our courts are capable of adapting old laws to new technology. The coming age of drones will no doubt test the "enveloping atmosphere" rule, since drones won’t fly in the upper atmosphere with airplanes, but instead in the lower airspace above farms and farmland.

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