Lamson, Dugan and Murray, LLP, Attorneys at Law

And in this Corner: Preparing for Crop Insurance Arbitration

By Sean Minahan on Posted in Crop Insurance, Uncategorized

Farmer v. Crop Insurer

I was hanging out in Midwesttown, USA the other day and came across a poster advertising an event held at the community center.  The poster read: FIGHT NIGHT! Jimmythe Farmer v. Craig Crop Insurer in a 12 round winner take all bout.  So I headed right over, laid down my money and walked in to a sold out fight.  It was a good fight with both fighters standing toe to toe exchanging jabs, uppercuts and haymakers.  In the end, Jimmy the Farmer won by a close decision from which Craig Crop Insurer immediately requested a rematch.  Then I woke up, got dressed and went to work.Without a doubt, crop insurance disputes would be way more interesting if actually handled in the ring.

 

Considering the current drought may create a record $25 billion in crop insurance claims this year, community halls, civic centers and VFW’s would have a hard time scheduling all the potential fights.  In the real world, crop insurance disputes are handled in a beauracratic quagmire of paperwork, phone calls and eventually arbitration.

Federally re-insured crop insurance policies require farmers to arbitrate their disputes with crop insurance companies according to the rules of the American Arbitration Association (AAA).  However, the arbitration does not have to be handled by the AAA.  Rather, the farmer and crop insurer can select their own arbitrator to hear the dispute, which may save money and provide more control over selecting the arbitrator.  The USDA Risk Management Agency (RMA) recently submitted Bulletin No.: MGR-12-003.1 outlining the following steps for demanding arbitration if the AAA is not elected.

The process is initiated by filing an arbitration demand with the insurance company.  The demand must include a short statement of the facts of the dispute and the policy provisions which the farmer believes provided coverage.  The demand should also include the names and addresses of all parties, the amount disputed, and request the arbitration location.  The insurance company must confirm receipt of the demand.  The farmer and insurance company can then nominate up to 5 potential arbitrators upon which they must agree on one or more of the arbitrators.  If the farmer and insurance company cannot agree on the arbitrator, the arbitration will be conducted through the AAA.  Consequently, the parties should make a strong effort to agree on the arbitrator even if they cannot agree on anything else.

In the end, the arbitration process will mentally feel like 12 rounds.  Therefore, it is important to have the right people working the corner.

Workers Wanted Desperately Needed: Searching for a Solution to the Foreign Agricultural Labor Shortage

By Sean Minahan on Posted in Government Regulations

The call for immigration reform is being made again (or, still) as many producers find they are increasingly unable to provide the work force—a work force which comes predominantly from Mexico—needed to harvest their crops.  A recent article by Carol Lawrence examines some of the economic and policy issues responsible for creating a shortage of foreign workers.  (http://www.therepublic.com/view/story/farm-workers/farm-workers).

According to a recent report from the  Pew Hispanic Center, the difficulty in locating foreign workers is the result of a number of factors, including fewer U.S. agricultural jobs, stricter border enforcement, more dangerous border crossings, lower birthrates in Mexico, and an improving Mexican economy.  These factors are leading to dire consequences in some agricultural sectors.  In Ventura County, California, which is the focus of Ms. Lawrence’s article, the shrinking labor force has hampered employers’ abilities to harvest some of the most valuable crops in the state, including avocados, strawberries, lemons, and oranges.  As a result, some producers are faced with having to switch to growing crops which do not depend as much on manual labor, or getting out of the industry altogether.

One focus of the labor shortage is federal immigration policy, and specifically, the government’s program relating to guest farm workers.  Under the H-2A program, employers can petition to bring foreign workers from certain countries to the U.S. to work in temporary agricultural jobs, generally for a period of one to three years.  Eligibility under this program  depends on several requirements: (1) the job must be temporary or seasonal; (2) the employer must show there are insufficient U.S. workers to do the work; (3) the employer must show that the hiring of H-2A workers will not negatively impact similarly-situated U.S. workers; and (4) the employer must obtain a valid certification from the Department of Labor.  An employer wishing to bring foreign agricultural workers to the U.S. must file a labor certification application with the Department of Labor, and a Form I-129 with the USCIS, on behalf of the proposed non-immigrant worker.  Once the worker is here, the employer is required to meet stringent standards relating to wages, housing, transportation, insurance, and other matters.

Some critics allege that the current H-2A program is “cumbersome and ineffective” at best, or unworkable at worst.  A survey of producers participating in the H-2A program showed that almost 50% of those asked were either not satisfied or minimally satisfied with the program.  Proponents of a revised H-2A program envision a foreign worker program that is simpler, less expensive, and less strict.  U.S. Representative Elton Gallegly of California has suggested developing a guest worker program that would require foreign agricultural workers to periodically return to their home country for a period of time before they are allowed back to the U.S.  Such a program, which would likely still include minimum standards relating to housing and health care conditions, would not include a path towards permanent citizenship and would only be open to workers who have not committed crimes.

For now, producers hoping to bring foreign workers to the U.S. to harvest their crops will need to continue participating in the H-2A program—at least until these and/or other proposals aimed at reforming the current agricultural immigration policy become reality.

This blog was authored by Stacy Morris, a partner at Lamson, Dugan and Murray, LLP.

Stacy Morris is a member of the Firm’s Litigation Department. Mr. Morris practices in both State and Federal Courts in Nebraska and State Court in Iowa and the U. S. District Court, Northern District of Iowa. Mr. Morris specializes in immigration law and is proficient in Spanish

CSR2 Effect on Iowa Land Values

By Sean Minahan on Posted in Farm Management

In mid-August, Iowa’s Natural Resource and Conservation Service (NRCS) began rolling out an updated version of the Iowa Corn Suitability Rating; now commonly known as CSR2.  Iowa farmers need to be aware whether CSR2 has been implemented on their land and how the updated rating may affect property taxation and land value.

In 1971, a gentleman named Tom Fenton developed a rating to measure the potential productivity of the land based on soil type, slope characteristics and weather conditions on a 100 point scale.  Mr. Fenton’s corn suitability rating (CSR) was subsequently adopted as a system for comparing one farm to another in determining property values and taxes; the higher CSR points the higher the value.  It has become common to hear Iowa farmers discuss farm values in dollars per CSR point, rather than dollars per acre.  Since 1971, changes have occurred in soil mapping, classifications and determinations.  Therefore, CSR2 was established to correspond with these changes and obtain productivity values through better transparency, consistency and ease.  Although the goal was to obtain the same values as the original CSR, the CSR2 system has resulted in updated points which are sometimes lower or higher.  As you may guess, the result is higher or lower taxation and property values.

While NRCS started implementing CSR2 in August, it has yet to be adopted universally across Iowa.  Furthermore, NRCS publications do not differentiate between the new CSR2 points from the original CSR points.  Therefore, problems can arise with misinterpreting land values based on CSR points.  For example, a contract dispute may occur if a buyer discovers the CSR2 points are lower than the original CSR points after signing a purchase agreement.  The buyer may want to back out of the purchase based on a claim of material misrepresentation of the value and productivity of the land.  Lower or higher CSR2 points may also create conflicts between landowners and tenants in negotiating lease values.

Down the road, the updated CSR2 points will be universally integrated and everybody will be talking about the same values.  However, until then, farmers, landowners, and purchasers need to be aware which CSR value they are relying upon.

For more information on CSR2 and the potential effects on Iowa land values, check out these websites links.

Iowa’s New CSR2 How Does it Affect Value?

Hertz Farm Management, Inc.; CSR and CSR2 – An Explanation; and

C. Lee Burras’ Iowa State University CSR2 Presentation

 

 

 

PETA Video Given “R” Rating at Kansas State Fair

By Sean Minahan on Posted in Government Regulations

“R” meaning restricted, of course.  The Kansas State Fair  (Sept. 7 – 16) had required PETA to restrict viewing of PETA’s 13 minute video depicting livestock slaughter from people walking by PETA’s booth.  As previously discussed in my Aug. 27th blog, PETA did not like the restriction and filed a lawsuit claiming their constitutional right to free speech had been violated.  PETA asked the U.S. District Court, District of Kansas to block the restriction, but Judge J. Thomas Marten upheld the “R” rating.

Judge Marten felt the restriction did not significantly violate PETA’s right to free speech since PETA was not prevented from showing the video.  PETA could easily comply with the restriction by turning the monitor away from the public strolling through the aisle.  However, Judge Marten did not dismiss PETA’s lawsuit and expressed the restriction contradicted his own feelings about free speech.  In the end, Judge Marten determined the fair was a “limited public forum”, granting the fair authority to responsibly control the atmosphere of the event.  For the full story, check out Greg Henderson’s article in Drovers Cattle Network and Roxana Hegeman’s article in the Huffington Post.

The court may have correctly ruled the “R” rating was not violation of PETA’s right to free speech.  However, PETA may not actually care considering the amount of media attention the video has received leading up to the fair.

PETA is contemplating appealing the decision to the 10th Circuit Court for an immediate ruling while maintaining the current lawsuit in the District Court.

PETA Claims Constitutional Right to Protest Animal Agriculture at Kansas State Fair

By Sean Minahan on Posted in Government Regulations, Uncategorized

The People for the Ethical Treatment of Animals (PETA) has threatened to file a lawsuit against the Kansas State Fair for violating PETA’s right to free speech; specifically, the right to show a 13 minute undercover video of packing plants and large animal confinements.  PETA was granted to right to set up a booth at the fair but was not allowed to show the video or any pictures depicting animal processing.  The American Civil Liberties Union of Kansas and Western Missouri (ACLU) have agreed to represent PETA in a possible lawsuit against the Kansas State Fair for imposing restrictions based on content, thereby, violating PETA’s right to free speech. Via Drovers Cattle Network

The restriction is undisputedly targeted at the content of PETA’s message.  Therefore, Kansas would have to prove PETA’s content would disrupt a legitimate government purpose for which the State Fair has been dedicated.  Kansas could possibly argue the content disrupts the legitimate government interest of establishing a family friendly environment which caters to all ages, including young children.  While graphic footage of animal processing may not be best suited for young audiences, a court may not want to get trapped into constitutionally defining a “family friendly environment”.

The Iowa State Fair handled PETA’s video a little differently.  Iowa Fair officials were concerned about the language subtitled in the video rather than the images presented; specifically the F-word.  The film portrays a turkey farm employee trying to break a bird’s neck stating ”Sometimes they’re (expletive) hard to kill.”  While PETA claimed they were kicked out of the fair, Fair officials reported PETA packed up their booth and left overnight.  PETA eventually returned to the fair and showed the video, with the expletive removed from the subtitles. Via the Des Moines Register.

Whatever the outcome of Kansas’ prohibition against the video, we can expect PETA to continue showing up at state fairs.  PETA will either present the graphic video to state fair-goers or promote the video nationally on the coattails of constitutional rights lawsuits.  In the end, it is a win-win strategy for PETA’s message which PETA will keep pushing.

EPA Dishes Punishment on Iowa DNR’s Failure to Enforce CWA

By Sean Minahan on Posted in Uncategorized

“Just wait until your father gets home!” are the dreaded words my friends and I probably feared most growing up.  The Iowa Department of Natural Resources’ (IDNR) proverbial father, the EPA, recently came home and threatened to punish the IDNR for failing to properly enforce the Clean Water Act (CWA) against livestock facilities.

As discussed in my August 2011 blog, several environmental groups have claimed the IDNR has not been appropriately regulating CAFO wastewater discharges in Iowa.  The EPA finally responded to the environmental groups’ 2007 petition and gave the IDNR 60 days to come up with a plan to fix problems with inspection programs and permit enforcement.  Although staff reductions have limited the IDNR’s ability to assess permit needs and enforce compliance, the EPA found ”Iowa had failed to act in nearly half of the water quality violation cases against cattle farms the EPA reviewed.” David Pitt Real Clear Politics.

In response, the IDNR has resolved 26 of the 31 allegations found in the EPA’s July 2012 report.  The IDNR pointed to the fact that Iowa has identified and obtained NPDES permits for all large CAFO’s, which will be inspected every five years.  Furthermore, the IDNR has agreed to address the remaining 5 concerns and has been adding staff to more effectively employ the compliance program. David Hendee: Omaha World Herald.

The EPA will eventually decide whether Iowa’s plan sufficiently addresses the concerns of the report.  If not, the EPA may revoke the state’s authority to enforce the CWA, which would be an unusual  and harsh punishment to say the least.  No matter how the EPA dishes out the punishment, Iowa’s CAFO operators can expect more agency involvement and oversight.

 

After Instant Replay Review: Pesticide Drift Is Not a Trespass in Minnesota

By Sean Minahan on Posted in Crop Damage Claims

Almost one year ago, I reported in this blog, that the Minnesota Court of Appeals ruled “unwanted pesticide drift…can constitute a trespass” in favor of organic producer, Oluf Johnson.  The defendant, Paynesville Farmers Union Cooperative, tossed the red flag and requested an instant replay review.  After review, the Minnesota Supreme Court ruled pesticide drift cannot, as a matter of law, constitute a trespass.  The Minnesota Supreme Court didn’t exactly overturn a touchdown.  The Court emphasized pesticide drift cases are nuisance or negligence cases rather than trespass cases.

Trespass, nuisance, negligence?  In the end, who cares what you call it?  In reality, how you bring your lawsuit to the courthouse can make all the difference in the world.  Just ask Oluf Johnson, whose trespass claim for pesticide drift against Paynesville was kicked out by the lower court.  So why would a producer care whether a pesticide drift claim cannot be brought as a trespass claims?

In almost all cases you have to prove you suffered some sort of loss (damage) in order to prevail.  However, in Minnesota, you don’t have to prove actual loss to win a trespass claim.  Rather, you merely have to prove a person or some tangible object entered your land and interfered with your possession of your land.  Consequently, pesticide drift cases would be easier if they could be brought as trespass claims.  Oluf argued the tangible object, pesticide, entered his land and destroyed the ”organic nature” of his crop, thereby interfering with his exclusive possession of such crop.  The Minnesota Court disagreed for two reasons:

First, the Court ruled pesticides were intangible objects rather than a person or tangible object.

Second, the Court ruled the pesticide drift may have interfered with Oluf’s use or enjoyment of his property but did not interfere with the possession of his property.  The Court explained the pesticide drift prevented Oluf from using his land as an organic farm rather than preventing Oluf from possessing his farm.  A close but important distinction for sure.

In sum, claims addressing loss of use or enjoyment of your land are nuisance claims.  Claims addressing loss of possession of your land are trespass claims; at least in Minnesota.  Luckily for Oluf Johnson, he gets to replay the down and proceed under his original nuisance and negligence claims.

Oluf Johnson vs. Paynesville Farmers Union Cooperative

 

 

 

HSUS’ Flank Attack on Gestation Crates Pt. II: Analyzing the Blueprint for HSUS’ Strategy

By Sean Minahan on Posted in Farm Management, Government Regulations

HSUS is not the first group to go after hog operations for ammonia emissions.  The blueprint for HSUS’ flank attack was established by earlier lawsuits against hog and poultry operations for violations of the Comprehensive Environmental  Response, Compensation, and Liability Act (CERCLA aka the Superfund law) and the Emergency Planning and Community Right-to-Know Act (EPCRA).  CERCLA and EPCRA do not limit pollutants but require reporting when specific quantities of specific substances are released into the environment.  CERCLA and EPCRA also allow citizens to sue for violations of these laws and environmental groups have successfully used these “citizen suits” to sue poultry and swine operations for failure to report ammonia emissions. (ex. Sierra Club v. Tyson Foods, Inc. (2003) and Sierra Club v. Seaboard Farms (2004))  Sound familiar?

In December 2008, the EPA ruled animal waste emissions to the air were exempt from all CERCLA reporting requirements but only partially exempt from the EPCRA reporting requirements.  Larger operations subject to the permitting requirements under the Clean Water Act were still subject to the EPCRA while smaller operations were exempt.  Of course, neither side was happy with the compromised rule and another lawsuit was filed; the infamous Waterkeeper v. EPA case.  Prior to a final ruling, the court approved the government’s request to re-evaluate and possibly modify the emission reporting requirements.  The EPA anticipated proposing its revisions by 2012 but nothing has yet been submitted.

Understandably, EPA’s delay in submitting a new or revised rule has created confusion among producers and the state agencies enforcing the reporting requirements.  Despite the confusion, livestock and poultry operations like those targeted by HSUS are currently governed by the reporting requirements of the EPCRA.

If you have any questions whether your operation is required to report under the EPCRA please check out the University of Nebraska’s Livestock and Manure Management web page: New Air Emissions EPCRA Rule for Livestock and Poultry.  The page provides links to FAQ about the rule; determining your emissions; and submitting an EPCRA report; among other important links on this topic.

 

HSUS’ Flank Attack on Gestation Crates: Claims Environmental Violations of 51 Hog Facilities Pt. I

By Sean Minahan on Posted in Government Regulations

Battle of Big Bethel, VA 1861

The Humane Society of the United States (HSUS) recently posted the following headline: The HSUS Serves Notices of Intent to Sue More than 50 Pig Confinement Facilities for Toxic Air Pollution.  At first glance it does not make sense for a program whose alleged mission is to protect animals from abusive treatment to concern itself with environmental issues.  However, if the mission is not just the protection of animals, but to end “production agriculture” this strategy makes perfect sense.  Some may believe that production agriculture and abusive treatment of livestock are one in the same.  Others believe that HSUS’ mission is to end meat consumption all together.  Arguing HSUS’ mission or intentions is a topic for different blog.

In sum, HSUS filed notice of intent to sue 51 large pig operations in Iowa, North Carolina, and Oklahoma for failing to report the release of ammonia from the confinements.  The EPA requires a facility to report any release of 100 pounds of ammonia within a 24 hour period.  HSUS has admittedly not performed any air quality tests at any of the targeted facilities.  Rather, the allegations stem from a mathematical formula found on the EPA’s website which estimates the amount of ammonia produced by an average pig per day multiplied by the number confined in the facility.  HSUS does not hide the fact that its concern with ammonia releases is an obvious flank attack on facilities using gestation crates.

The National Pork Producers Council (NPPC) submitted the following response:

“It is important to point out that HSUS is not alleging environmental harm but rather paperwork violations of EPA’s emissions reporting rule. Additionally, it is worth noting that when the reporting rule went into effect in 2009 there was widespread confusion about it, with some states refusing to accept report, one state claiming EPA notices to report emissions were an Internet hoax and EPA’s Region 4 office initially telling producers and states there was no reporting requirement.” – Pork Network -

I do not know how the use of gestation crates specifically relates to ammonia production and would appreciate any information explaining a direct correlation.  However, HSUS believes attacking the environmental flank of large hog operations will further the HSUS mission, however, expansive that mission may be.

Illinois Taps CAFO’s to Fund Regulation of CAFO’s

By Sean Minahan on Posted in Government Regulations

Owners of concentrated animal feeding operations (CAFO’s) in Illinois will be partially funding their own pollution permits if the Governor Pat Quinn signs the recently passed Clean Water Funding Fairness Act.  The Act would require CAFO’s that discharge or intend to discharge pollutants to pay an annual fee for their permits under the National Pollution Discharge Elimination System (NPDES).  The fee amount is determined by the size of your CAFO: $750 for CAFO’s with over 1,000 animals; $350 for CAFO’s of 300-999 animals; and $150 for CAFO’s of less than 300 animals. Per Illinois Times article Manure Rules.

The Act is the result of a 2008 complaint filed by the Illinois Citizens for Clean Air and Water (ICCAW) to the United States Environmental Protection Agency (USEPA) against the Illinois Environmental Protection Agency (IEPA), alleging that the IEPA failed to enforce NPDES permits for livestock operations.  The USEPA found the IEPA was not properly enforcing the Clean Water Act against CAFO’s and threatened to rescind the IEPA’s authority to regulate and issue NPDES permits to CAFO’s and all other industries.  I reported on a similar situation happening in Iowa in my blog Who’s Regulating Iowa CAFO’s.

The IEPA emphasized the failure to enforce pollution permits against CAFO’s was caused by a lack of funding.  Historically, farming operations had been exempt from paying permit fees while other industries like municipal waste facilities and industrial processing plants paid fees and essentially subsidized the costs of enforcement against CAFO’s.  The initial bill  drafted by the Illinois Citizens for Clean Air and Water, Prairie Rivers Network , and Environment Illinois was rejected due to the high permit fees in the range of $1,800.  Through a year of negotiations, the bill was submitted with the above three-tiered fee system.

Paying to be regulated may soon be just another cost of doing business for CAFO operators in Illinois.