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June 2013 Archive for Ag in the Courtroom

RSS By: John Dillard, AgWeb.com

John Dillard grew up on a beef cattle farm and now works as an agricultural and environmental litigation attorney with OFW Law. His blog analyzes legal issues and court decisions that affect America’s farmers and ranchers.

 

 

 

USDA Gives Go-Ahead on Horse Slaughter . . . For Now

Jun 28, 2013

I thought my piece last week, Congress Effectively Kills Horse Slaughter, was going to be my last word on horse slaughter for the foreseeable future. But, we live in strange times. Today, USDA's Food Safety Inspection Service issued a grant of inspection to allow New Mexico's Valley Meat Co. to proceed with its plans to slaughter horses for human consumption. Furthermore, FSIS announced it intends to grant approval to plants in Missouri and Iowa next week. This is certainly a victory for Valley Meat and the rule of law, but the victory may be short-lived.

Horse slaughter for human consumption is legal under the Federal Meat Inspection Act. However, another requirement of the Act is that all slaughter plants must be overseen by FSIS inspectors. These FSIS inspectors are paid for with federal funds. HSUS has failed to convince Congress to ban horse slaughter outright. However, it has succeeded in achieving a de facto ban on the practice. From 2006 to 2011, the annual agricultural appropriations legislation contained a ban on funding FSIS inspectors, which made it impossible for horse slaughter plants to operate.

This ban was not included in the FY2012 or FY2013 ag approprations bills. As such, there have been no legal impediments prohibiting horse slaughter since October 1, 2011. However, the few plants that have applied for approval to commence horse slaughter since the ban was lifted have faced all the bureaucratic barriers USDA has at its disposal. USDA has successfully slow-walked the process for over a year.

The grant of inspection means that Valley Meat can begin hiring employees and FSIS can begin putting inspectors in place. However, the grant of inspection means we can also expect to see HSUS begin to take legal actions. HSUS has already made its intentions known that it will file a tongue-in-cheek environmental suit to halt or delay the Valley Meat venture.

It should be noted that all of this is unfolding with the backdrop of the FY2014 ag appropriations process. The House and Senate appropriations committees have approved ag spending bills that would eliminate funding for FSIS inspectors at horse slaughter facilities. If these provisions survive votes on the House and Senate floor and the conferencing process, then the de facto ban on horse slaughter will be reinstated on October 1, 2013. However, the 113th Congress is certainly earning its nickname, "The Congress to Nowhere", so anything can happen.  

I will follow up if there are updates.

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.

Supreme Court Draws the Line on Genes and Patents

Jun 25, 2013

Naturally-occurring DNA is not, in itself, patentable.  So said the U.S. Supreme Court in its unanimous opinion in Association for Molecular Pathology v. Myriad Genetics, Inc.  While the Court’s decision has drawn both ire and praise from scattered pockets of the biotech community, the Myriad decision is not the game-changer that the popular press would have you believe.  Although the Court held that naturally-occurring DNA is not patentable, the decision will have a limited effect on biotechnology as it exists in the real world and agriculture, in particular.

The Supreme Court has used the 2012-13 term to more clearly define the boundaries of how federal law treats patents.  In Bowman v. Monsanto Co., the court analyzed whether patent rights extended to subsequent generations of patented seeds.  In Bowman, the Court held that patent rights extended to subsequent generations of patented soybean seeds, even if the seeds were acquired from a grain elevator.  With the Myriad decision, the Court has established another bright-line rule – isolated, but naturally-occurring DNA is a "product of nature" and not patentable.

In Myriad, the plaintiffs challenged three of Myriad’s patents related to BRCA-testing.  The BRCA test, recently made famous by Angelina Jolie, allows a patient to determine whether she carries a gene for an increased risk of breast cancer.  Myriad held a patent on the isolated DNA sequence for the BRCA1 and BRCA2 gene.  Myriad also held a patent on complimentary DNA, known as cDNA, for these genes, which was synthetically-replicated based on the isolated DNA sequence in question.

The difficult question Myriad posed to the Court was whether the act of discovering and isolating a naturally-occurring gene, an expensive and time-consuming breakthrough that could save millions of lives, was patentable.  Patent protection would give Myriad the right to determine how the gene was used and could allow it to recoup the cost it invested in discovering the gene.  However, one problem that was ultimately fatal to Myriad’s case is that "products of nature" cannot be patented.  The Court invalidated Myriad’s patents in the isolated DNA because it was a naturally-occurring product of nature that Myriad had discovered, but not made.  At the same time, the Court held that cDNA was patentable subject matter because its existence came about by human intervention, not nature.

In other words, scientists that identify and isolate a useful gene or DNA segment cannot patent their discovery.  Instead, they must take an additional step beyond identification and isolation of DNA and "make" something to qualify for a patent.  Up to this point, many biotech companies have made it a practice to patent naturally-occurring DNA.  However, they have also patented the technologies that they developed using the naturally-occurring DNA.  After the Myriad decision, only the patents on subsequent technology utilizing the DNA will be valid.

The net effect for those of us in agriculture is limited.  All of the patented biotechnology that we encounter is something "made" from naturally-occurring DNA.  For instance, Roundup Ready soybean technology uses genes from a bacteria that are inserted into the soybean’s DNA sequence.  By placing the gene from one species into another, Monsanto "made" a unique plant that qualifies for patent protection.  Similarly, the DNA-based Red Factor Test to determine whether cattle are "homozygous black" remains patentable so long as the test itself, and not the underlying red/black gene, is patented.

Biotechnology has made waves in the patent world ever since the Supreme Court affirmed that living things are eligible for patent protection in 1980 with the Diamond v. Chakrabarty opinion.  Myriad is certainly a landmark case that places some boundaries on Chakrabarty.  However, in practice, its effect will be limited.

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.

Congress Effectively Kills Horse Slaughter

Jun 20, 2013

The Farm Bill’s demise is not the only thing that took place in our Capitol today.  The Senate Appropriations Committee voted to de-fund FSIS inspections for horse slaughter on a voice vote.  This action, coupled with the House Appropriation Committee’s adoption of a similar amendment all but ensures the 2013 Agriculture and Rural Development Appropriations bill will include a ban on FSIS inspections for horses, which will effectively re-instate a de facto prohibition on horse slaughter in the United States.  No doubt, Congress’ decision to re-instate the ban is a major victory for Wayne Pacelle and the Humane Society of the United States. 

While Congress has made its position known on the horse slaughter issue, it still has to address a few questions and issues:

  1. 142,740 horses were slaughtered in the United States in 2006, the last year horse slaughter was allowed.  In 2012, 176,223 U.S. horses were slaughtered in foreign countries, mostly Canada and Mexico.  Has the U.S. slaughter ban prevented horse slaughter or has it simply changed the location and applicable humane slaughter laws?
  2. Does Congress intend to compensate the horse industry for the long-term damage that the horse slaughter ban has wreaked on the horse market?
  3.  Does Congress intend to compensate horse owners for the additional costs they bear (feed, veterinary care, shelter, humane euthanasia, burial) in caring for and ultimately disposing of unwanted horses?
  4.  Does Congress intend to compensate Native American tribes whose grazing lands are decimated by feral horses and unwanted horses that are released onto tribal property?
  5. Congress spent $44 million in 2012 to manage 49,000 feral horses.  34,000 of those horses were adopted out to ranches that received payment in return.  15,000 feral horses are currently housed in holding pens.  Congress will provide for 11,000 additional feral horses in 2013 at a cost of $2,000 per horse.  Does Congress want to add to the glut of unwanted horses in the country?

 

While Congress has provided an answer as to how it feels about horse slaughter, it has conveiently punted on some harder questions.  I will keep you updated on any developments.

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.

Latest mCOOL regs will have USDA Singing “O Canada”

Jun 13, 2013

Canada stands on guard for a lot, and that includes its beef.

I recently had a chance to travel to British Columbia for a conference with state and provincial legislators that chair their respective agriculture committees.  On this trip, I encountered several kind, but candid, Canadians involved in their agricultural sector.  At the tip of everyone’s tongue was "country of origin labeling" and the devastating effect that it has on their livestock industry.  They were madder than that time the Marines marched around with an upside-down maple leaf at the World Series

Because turnabout is fair play, they were almost giddy at the proposed retaliations the Canadian government submitted to the World Trade Organization in response to the U.S.’s Mandatory Country of Origin Labeling (mCOOL) rule.  Another thing the Canadians should be giddy over is our First Amendment.

mCOOL has been flailing around, begging to be put out of its misery, since the 2002 Farm Bill.  While mandatory labeling of meat products by country of origin has been required by statute since 2002, Congress has a habit of speaking out of both sides of its mouth.  It restricted funds for implementing the law until 2008, when fears of tainted Chinese cat food ingredients tipped the scale in favor of putting mCOOL into effect.

In general, the law requires retailers to prominently display the country of origin for packages of beef, pork, chicken and other meat animals.  mCOOL proponents argue that mandatory labeling is necessary to properly inform consumers of where their meat is coming from so that they can make informed choices about which products to purchase.  Skeptics, myself included, argue that mCOOL’s primary purpose is to disrupt international trade by imposing so many regulatory and practical burdens that it is simply easier for American packers to stick to processing American livestock.

mCOOL cannot be defended to our trade partners with a straight face and is not doing American farmers any favors.  The WTO’s Appellate Body rejected the first iteration of mCOOL in 2012, holding that it discriminated against Canadian beef and pork.  As part of the WTO’s ruling, USDA was ordered to either eliminate mCOOL or re-write the regulation so as to not discriminate against international commerce.  This placed the Obama Administration in an awkward position wherein they had to concurrently re-write the mCOOL regulation while lobbying Congress to repeal the labeling law.  It remains to be seen whether Congress will repeal mCOOL in the Farm Bill, but USDA did re-write the mCOOL rule.  The new mCOOL rule is not much better than its predecessor; it requires additional burdesome labeling and is quite vulnerable to a WTO challenge for putting a technical trade barrier in place.

The new mCOOL rule is also vulnerable to a challenge under our First Amendment.  As we know, the First Amendment guarantees the right to free speech.  Encompassed in the right to free speech is the right to refrain from speech.  Commercial speech, such as advertising and labeling, is also protected by the First Amendment.

Mandatory labeling laws force or compel companies to engage in commercial speech.  We see compelled commercial speech on a daily basis.  Product warnings, nutrition labels, and exit signs are examples of compelled commercial speech (come to think of it, the government really takes the fun out of silica gel packets).  However, the government must clear multiple hurdles before it can compel commercial speech such as mandatory labeling laws.  One of those hurdles is proving that the government has a substantial interest in requiring mandatory labels.

In this instance, USDA states that its interest in requiring mandatory labels is to "provide consumers with more specific information."  USDA does not take the position that meat from one country is healthier than another, or that labels should be a warning to consumers.  In other words, the primary interest served by mCOOL is satisfying consumer curiosity about the journey that meat has taken to get to their plate. 

Unfortunately for USDA, federal courts have held that compelling commercial speech merely to satisfy consumer curiosity is unconstitutional under the First Amendment.  Such was the case in International Dairy Foods Assoc. v. Amestoy, where the Second Circuit Court of Appeals struck down Vermont’s mandatory rBST-labeling law, which was predicated on the government’s desire to satisfy consumer curiosity about whether their milk was produced by cows that received synthetic hormones.

My guess is that the courts will give mCOOL the same treatment and send this law to pasture.  That will give us something to cheer about on both sides of the border.

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.  

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