Aug 22, 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.

It's Time for Real Property Law to Join the 21st Century

Jul 31, 2014

I handle a number real estate transactions each year.  It is not uncommon to find an error in the property description located in a deed.  Often somewhere in the chain of title, someone made a typo which was then passed on from deed to deed to deed.  Attorneys call such mistakes "scrivener's errors."   These errors still occur today because the way property is described in deeds and other real estate documents has not changed much in past two centuries. Witnessing how much technology has improved farming in the past decade has made me wonder--why isn't the same technology being used to improve how we describe property boundaries?  

Real estate is described in most deeds using "metes and bounds," an old English system inherited by the thirteen colonies and later by other states joining the union. This method for describing property boundaries uses directions, bearings, and monuments.  Here is a basic example:  Begin at the center of Highway 50 in the southwest corner of Washington Township, Section 17, then face due east, then move a distance of 100 feet, then face due north and move a distance of 50 feet, etc. Eventually, you end up back where you started and have traced a boundary line around a property. Surveyors do the same but plot these descriptions on paper surveys.

Almost no property is a perfect rectangle with 90 degree corners or perfectly straight borders, meaning it is almost impossible for any untrained person to trace the boundaries of property without hiring an expert surveyor.  As a result, surveying is an entire industry developed to interpret the legal descriptions in deeds. Likewise, property purchasers buy "title insurance" to protect themselves in case their property contains a scrivener's error or other defect.  The title and survey industries exist to address the shortcomings of property law.

 

This 200+ year old system for describing property also creates a fair amount of litigation.  Since property owners can't always determine for themselves exactly where their property boundaries are, they often (inadvertently) construct fences, buildings, and other improvements that encroach onto neighboring property.  Encroachments are not uncommon to find when reviewing surveys for commercial, residential, or industrial property.

 

Technology now provides a better, more accurate way of surveying and describing property. Global Positioning Systems (GPS) can revolutionize the way we describe property boundaries in the United States. Farmers plant half-mile long rows of corn using GPS technology that are perfectly straight, down to the inch. There is no reason similar technology is not used to define property boundaries, rather than the common law feudal method used today.  GPS coordinates would be a very simple way of describing property boundaries. And anyone with a smart phone could easily survey their own property, plot out the correct place for a fence, etc.  

 

Property law has always been slow to change.  (We still refer to people who lease their property as "landlords" even though most landlords are not English "lords.")  But there comes a time when "that's the way we've always done it" is no longer a good reason.  It's time to hit reboot on how we describe real property in this country.  It's time for lawyers and surveyors to embrace GPS technology just like farmers already have.  

Book Review: The John Deere Way

Jul 29, 2014

 My last stop before heading to the lake for summer vacation was to the local half-price bookstore.  I was delighted when I found a previously-owned copy of The John Deere Way by David Magee, a book that promised to dive into the corporate culture of one of America's oldest corporations, Deere & Company. This book is a few years old already, but for the most part the topics are still relevant today.  Here is my book review.

 
The author covers some interesting topics. Of course, the book discusses John Deere's original steel plow and how it revolutionized farming the Great Plains' prairie soils.  There are also some less well known stories about the history of the company, including why Deere decided to move into manufacturing lawn and garden tractors--to satisfy a growing suburban population that still wanted John Deere products. More recently, this same story line evolved when Deere decided to begin selling lawn tractors at Home Depot, marking the first time Deere sold equipment outside of its dealerships since 1837.  The book also covers many non-agricultural ventures, such as Deere's brief entry into and exit from the snowmobile business in the 1970s as well as the more sustained production of the Gator series of vehicles.
 
The book focuses on four aspects that define Deere & Company's corporate culture:  quality, innovation, integrity and commitment. Since 1837, Deere has only had slightly more than a handful of leaders, each of them stuck by these values when making decisions that impacted farmers, dealers, and Deere employees. There were times in Deere's history when the company strayed from its agricultural roots, and the results were not always good.  One of the interesting examples described was John Deere Credit's foray into providing financing for the RV industry. The division learned the hard way that financing RVs is different than combines, since the industry lacked the same dealer network that knew their customers and, importantly, could track down a vehicle when repossession became necessary.
 
But the book falls short to those who grew up on a 4020.  It chooses to focus on how Deere maximized shareholder returns on Wall Street instead of how John Deere earned the trust and loyalty of thousands of farmers. The pivotal events in John Deere's history are only briefly addressed: the decision to branch into tractor manufacturing by purchasing the Waterloo Boy factory in Waterloo, Iowa in 1918; why Deere decided not to repossess thousands of tractors in the Great Depression in the 1930s when farmers could not pay their bills; and how the New Generation of four and six cylinder tractors in the 1960s made John Deere the largest agricultural equipment manufacturer in the world. These stories are given a few pages in the book, but to me, how and why Deere leadership made these decisions is the reason behind the company's long term success. These turning points deserved more credit than was given in the book.
 
Nevertheless, I enjoyed the book and would recommend it to John Deere fans.  If you aren't lucky enough to find it a local used bookstore like me, you can purchase on Amazon.com:  The John Deere Way.
 

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.

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