Apr 20, 2014
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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.




Appeals Court to Re-hear COOL Case

Apr 04, 2014

 The suit brought by livestock and meatpacking groups against USDA's mandatory Country-of-Origin Labeling (mCOOL) rule lives to fight another day. A panel of the active judges (known in the legal world as an "en banc" panel) sitting on the D.C. Circuit Court of Appeals entered an order today (4/4/14) to vacate the D.C. Circuit's decision to uphold USDA's COOL Rule. The entire panel of the active judges on the D.C. Circuit will re-hear the case on May 19th.

As I mentioned in my assessment of the Circuit Court's original decision on the case, the original panel of judges suggested that the issue of whether mCOOL violated the First Amendment should be heard before an en banc panel. This unprecedented suggestion tipped off the reader that the Court was not confident that their fellow judges necessarily agreed with their findings.

The issue that the en banc panel will re-hear pertains to whether the government has a sufficient justification under the First Amendment to require mCOOL. The Court's original mCOOL decision departed from D.C. Circuit precedent, which had held that mandatory labeling regimes similar to mCOOL were only allowed to prevent or remedy consumer deception. Even though mCOOL is not designed to prevent or remedy consumer deception, the Court held that it is valid because it enables consumers to make purchasing decisions on the basis of protectionism.

The en banc panel's order requests the parties to submit briefs on the issue of whether the mCOOL decision should be governed by the Central Hudson standard or the Zauderer standard. Under the Central Hudson standard, the government is only allowed to compel commercial speech if the mandate serves a "substantial" governmental interest. As the name indicates, substantial governmental interests are not a dime a dozen. Substantial governmental interests generally involve protection of health and safety, and certainly do not involve "empowering" consumers to make protectionist choices.

The Zauderer standard is much easier to achieve, but it is only available to the government in certain circumstances. Under Zauderer, a goverment can require labeling of "factual and non-controversial" information. However, the D.C. Circuit has only allowed Zauderer to be used as a justification in instances where the mandatory disclosure prevents or remedies consumer deception. 

Drawing inferences from a Court's actions in circumstances like this is a risky proposition. However, it is clear that a majority of the D.C. Circuit's judges believe this issue needs a second look. I'll be following up on this issue as developments unfold.

A copy of the D.C. Circuit's order is below:

PER CURIAM ORDER, En Banc, filed [1487010] that this case will be heard en banc. It is FURTHER ORDERED that the judgment filed March 28, 2014, be vacated. It is FURTHER ORDERED that oral argument before the en banc court be heard at 9:30 a.m. on Monday, May 19, 2014. It is FURTHER ORDERED that, by 4:00 p.m. on April 18, 2014, the parties and amici refile each brief and the appendix initially filed in this case. It is FURTHER ORDERED that, by 4:00 p.m. on April 21, 2014, the parties file simultaneous supplemental briefs, not to exceed 7,500 words each, addressing the following issue: Whether, under the First Amendment, judicial review of mandatory disclosure of "purely factual and uncontroversial" commercial information, compelled for reasons other than preventing deception, can properly proceed under Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985), or whether such compelled disclosure is subject to review under Central Hudson Gas & Electric v. PSC of New York, 447 U.S. 56 (1980). 

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



Appeals Court Upholds mCOOL

Apr 01, 2014

On Friday, a unanimous panel of the D.C. Circuit Court of Appeals upheld USDA’s controversial mandatory Country-of-Origin Labeling (mCOOL) rule. The mCOOL rule requires that fresh muscle cuts of beef, pork, lamb and chicken sold at grocery stores must display a label indicating where the source animal was born, raised, and slaughtered. Although this ruling is a setback for the meat and livestock industry, the mCOOL rule is by no means settled. The WTO’s Dispute Settlement Board is in the process of deciding whether the labeling rule violates the United States’ treaty obligations.

Compliance with this labeling regime has created a substantial burden for meat packing operations located near our northern and southern borders because animals must be slaughtered, packaged, and stored separately based on their country of origin categorization. Several packing plants have cited mCOOL compliance as the one of the reasons for shuttering their plants, costing thousands of jobs and causing feedlots to search farther afield to find packing plants to slaughter their cattle.

Several livestock and meat organizations, such as NAMA (Disclosure: OFW Law represents NAMA in this matter), AMI, SMA, NCBA, NPPC as well as Canadian and Mexican livestock groups challenged the regulation in federal court in July 2013, seeking a preliminary injunction against USDA from enforcing the "born, raised, and slaughtered" rule. Several anti-animal agriculture groups, such as HSUS and Food and Water Watch, joined sides with anti-trade agricultural groups, such as U.S. Cattlemen, R-CALF, and National Farmers Union to support USDA’s efforts to defend the labeling regime. USDA and its supporters prevailed on the first round of litigation in September 2013. The plaintiffs immediately appealed the matter to the D.C. Circuit Court of Appeals.

The plaintiffs did not fare any better on the appeal to the D.C. Circuit. The plaintiffs argued that the mCOOL regulation violated Congress’s intent when it banned the practice of commingling products with different country of origin categorizations. Furthermore, the plaintiffs argued that the mCOOL rule violated the First Amendment by compelling commercial speech. The Court ultimately held that USDA had adopted a permissible interpretation of Congress’s intent when it banned the practice of commingling. Furthermore, the Court held that USDA had the authority to require a simple label so long as it contained factual and non-controversial information.

The Court’s ruling was a departure from previous labeling decisions in the D.C. Circuit. In prior decisions, the Court would only allow a government to require a label in instances where the government had a substantial interest (such as health or safety regulation) or to prevent consumer deception. Neither such interests were implicated in mCOOL. The Court, recognizing that its decision to expand the universe of permissible justifications for mandatory labels does not enjoy universal support, took the unprecedented step of suggesting that the case be re-heard anew by the entire panel of active judges on the D.C. Circuit.

Whether the parties will seek a rehearing remains to be seen. Nonetheless, mCOOL still faces a substantial hurdle in the WTO. In fact, mCOOL is no stranger to the WTO.  The first time around, the WTO determined that the prior mCOOL labeling regime, which allowed commingling, needed to be re-written because it discriminated against Canadian and Mexican livestock. Instead of heeding the WTO’s advice, USDA doubled down and eliminated the practice of commingling, which causes further discrimination against Canadian and Mexican livestock. We can expect the WTO to issue its initial decision in this dispute in June 2014.

I’ll be following this matter and posting updates as they 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.  This column is not a substitute for legal advice



Judge: Commercial Drones are Legal

Mar 07, 2014

 A National Transportation Safety Board administrative law judge ruled that Federal Aviation Administration's (FAA) regulations do not prohibit the use of small drones for commerical purposes. While this decision may be appealed, this decision is a legal victory for farmers that want to use drones for agricultural applications.

Through policy statements, FAA has maintained the stance that small, unmanned aircraft are only legal for certain users, such as model aircraft hobbyists and researchers. It has posted guidance indicating that drone use for commercial purposes is prohibited until it implements regulations regarding commercial use. While FAA held the position that commercial drone use is illegal, it rarely enforced the ban.

In fact, the only person FAA charged with illegal drone use was Raphael Pirker. Mr. Pirker, is a Swedish drone operator that filed a commercial for the University of Virginia medical school. During the filming of the commercial, he allegedly operated the drone in an unsafe manner. In response to his actions, FAA attempted to fine Mr. Pirker $10,000 for unlawful drone operation. 

Mr. Pirker challenged this penalty on the basis that there was no law preventing the use of drones for commercial purposes. The administrative judge agreed. The judge noted that FAA's prohibition on commercial drone use was based in a policy statement, not a regulation that complied with the requirements of the Administrative Procedure Act. The judge reasoned that FAA had no basis to ban the use of drones for commercial purposes absent a statute or regulation prohibiting their use. 

This decision could open the skies to drone use earlier than FAA intended. The agency is required to finalize regulations permitting commercial drone use in 2015. It already intends to introduce proposed regulations on commercial drones by the end of the year. If FAA does not appeal this decision, or the decision is affirmed on appeal, then commercial drone operators are free to use unmanned aircraft within the parameters of existing law (below 400 feet, away from runways and flight paths, etc.).

Of course, this also means I will need to eat some crow. My recent Farm Journal article, "Drones and the Law," relied on the FAA's now-invalid guidance, which stated that commercial drone use was illegal. Given the great potential that drones pose for agriculture, it will not be too terribly hard to swallow.

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.

Environmentalists, Glyphosate and Butterflies

Feb 26, 2014

Natural Resource Defense Council (NRDC) has petitioned EPA to restrict the use of glyphosate herbicide to protect the dwindling population of the monarch butterfly. The petition states that the rapid adoption of glyphosate-resistant (Roundup Ready®) corn and soybeans in the Midwest has depleted the milkweed "community," which serves as the exclusive food source for monarch butterfly larvae along the route of its annual migration from Canada to Mexico.

NRDC petitioned EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). FIFRA requires EPA to register each pesticide used in the U.S. and set parameters for the pesticide’s use, such as target species, labeling requirements, and restrictions on use. Each pesticide must undergo a re-registration process every 15 years. The current glyphosate re-registration process will be completed in 2015; however, NRDC has requested EPA take action to restrict the use of glyphosate prior to the scheduled completion of the re-registration process.

Under FIFRA, EPA can register a pesticide only if it first determines that the pesticide "will perform its intended function without unreasonable adverse effects on the environment." FIFRA defines an unreasonable adverse effect on the environment to include "any unreasonable risk to . . . the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide." In its petition, NRDC argues that the loss of milkweed communities brought about by increased glyphosate use has brought about unreasonable adverse effects on the environment because it has decreased monarch butterfly habitat.

It is hard to tell if EPA will take any action on NRDC’s petition. While NRDC may have a feasible argument that the increased use of glyphosate is adversely affecting the monarch butterfly population, the law requires EPA to consider the costs and benefits of pesticide use. When viewed objectively, there are a tremendous amount of environmental benefits provided by glyphosate-resistant technology. The most striking benefit is the increased use of no-till or reduced till practices, which decreases soil erosion, water pollution, and fossil fuel use and improves carbon sequestration. Additionally, glyphosate replaces the use of other pesticides that pose larger environmental risks.

Farmers have been trying to get rid of milkweed for as long as they have been planting crops in North America. Now, with the advent of glyphosate-resistant technology, they finally have the tools to effectively control the weed. In other words, if farmers could have eliminated milkweed from agricultural lands prior to Roundup Ready® technology, they would have. I see no reason why farmers should have to handicap themselves to set aside a portion of their land for milkweed habitat, or more dramatically, give up glyphosate as a weed-control tool, simply to protect one species of butterfly. 

To their credit, NRDC’s petition does identify some alternatives to an outright ban on glyphosate or mandatory refuges (like those in place for Bt corn and cotton). While NRDC is not necessarily concerned about a farmer’s need to control weeds, it does suggest that EPA could solve the butterfly problem by restricting glyphosate use in some non-agricultural applications, such as roadside ditches and electric line right-of-ways. If EPA does seriously consider NRDC’s petition, this option may be the right one to take for agriculture. Roads and power line right-of-ways could provide a corridor of travel for the monarch butterfly without imposing a burden on agricultural uses for glyphosate.

I’ll be following this issue and will update you if there are 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.  This column is not a substitute for legal advice.

NH GMO Labeling Measure Fails – Common Sense Prevails in the Granite State

Jan 24, 2014

The New Hampshire House of Representatives delivered a victory for agriculture and consumers on Wednesday. The House defeated a bill that would have required food sold in grocery stores and certain retail establishments to display a label on foods containing genetically engineered ingredients. This measure, if it passed, would have added costs at the checkout counter for New Hampshire residents without providing them any added value. This vote also represents a setback for the pro-labeling forces that enjoyed some success in the New England states.

The NH House Environment and Agriculture Committee had previously voted 12-8 to kill the labeling measure based on concerns that there is no proof that GMO foods are dangerous and the measure would be unconstitutional and unenforceable. However, in New Hampshire, all proposed bills get a floor vote, which came Wednesday. The entire House voted 185-162 to kill the measure.

It should be noted that an identical measure will be considered in the New Hampshire Senate. Sources close to the matter indicate that there is a better chance that this bill will receive approval in the Senate. If this is still the case, the House will have to take another vote on this matter.

While the labeling issue is not completely settled in New Hampshire, the vote to defeat the measure was a smart move for the House of Representatives. In addition to the practical flaws in the labeling bill, it was very problematic under the U.S. Constitution.

First, there is the issue of what is known as the "dormant commerce clause." The Constitution’s commerce clause provides the federal government with the authority to regulate interstate commerce. With this grant of power, it is also assumed that states cannot pass laws that interfere with interstate commerce. Although the GMO labeling measure isn’t intended to provide New Hampshire food companies a leg up over their out-of-state competitors, its effect would still burden out-of-state businesses that are trying to sell products in New Hampshire. There are exceptions to the dormant commerce clause, such as health and safety regulation, but it does not appear that the drafters of the legislation attempted to couch this as a safety measure.

New Hampshire imports between 85-95% of its food from other states. If New Hampshire had passed the measure, this would mean that food manufacturers would have to develop special labels just for products that are sold in New Hampshire. In some instances, it is likely that some food distributors would forego selling into the New Hampshire market because of the extra costs that would come with labeling. This would have certainly placed an undue burden on out-of-state companies trying to do business in New Hampshire.

Second, the First Amendment provides some protections for what can and cannot be mandated in terms of labeling. If a state government wants to compel a label, it must have a "substantial interest" in requiring a label. An acceptable substantial interest would be one geared towards consumer health and safety. For instance, nutrition labels or warning labels on pharmaceuticals are acceptable because they provide consumers with information pertaining to their health and safety. However, the proponents of this legislation argued that the basis for the labeling was that New Hampshire residents have a "right to know" what is in their food. While the "right to know" argument is appealing to some, it is not enough to stand up in court.

Federal courts have made it clear that there are limits to what a government can require when it comes to labels and satisfying the curiosity of some consumers is not enough. Without any proof that genetically engineered food ingredients are unhealthy, a state labeling measure will not muster.

While common sense prevailed in New Hampshire House, this legislative fight will continue in other states. It will not likely be settled until FDA takes action on a federal level to preempt the patchwork of state labeling regimes that could emerge.

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.

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