Justia Agriculture Law Opinion Summaries

The Perishable Agricultural Commodities Act (PACA), 7 U.S.C. 499e, is a Depression-era statute designed to protect sellers of perishable produce form delinquent purchasers. In this case, two such purchasers filed for bankruptcy and the bankruptcy court appointed special counsel to collect and disburse funds to PACA-protected sellers that had claims against the purchasers-turned-debtors. At issue on appeal is whether special counsel’s (Stokes) fees and expenses be disbursed from the PACA fund. Nowhere in the orders on the interim appeals is there an indication that the district court realized these were interlocutory orders and believed there was a benefit to hearing them in this piecemeal manner. That absence means the district court did not have appellate jurisdiction over the first two interim fee orders. Therefore the court vacated for lack of jurisdiction the district court’s order vacating the first and second fee awards. The court found that Kingdom Fresh has no standing to dispute the percentage of Stokes’s fee allocable to the nonobjecting parties. Only the small percentage of Stokes’s fee apportionable to Kingdom Fresh is at issue in this appeal; Stokes is free to keep the remainder. The court agreed with the Second Circuit that PACA’s unequivocal language requires that a PACA trustee - or in this case, its functional equivalent - may not be paid from trust assets “until full payment of the sums owing” is paid to all claimants. Accordingly, the court affirmed the district court's order vacating the final fee award, but only as to Kingdom Fresh's pro rata share of the fees. View "Kingdom Fresh Produce, Inc., et al v. Delta Produc" on Justia Law

Wilma Stuller and her late husband bred Tennessee Walking Horses. They incorporated the operation and claimed its substantial losses as deductions on their tax returns. The IRS determined that the horse-breeding was not an activity engaged in for profit, assessed taxes and penalties, and penalized them for failing to timely file their 2003 return. After paying, the Stullers and LSA, sued the government for a refund. The district court excluded the Stullers’ proposed expert. It determined that his expertise did not extend to the financial or business aspects of horse-breeding and he lacked a reliable methodology to opine on the Stullers’ intent. The court found that the corporation was not run as a for-profit business under 26 U.S.C. 183, and determined that the Stullers lacked reasonable cause for failing to timely file their 2003 tax return. The court also denied a request to amend the judgment and effectively refund taxes paid by the Stullers on rental income received from the corporation. The Seventh Circuit affirmed. The district court followed Daubert in excluding the expert and applied each factor of the regulations to the facts. Only the expectation of asset appreciation weighed in the Stullers’ favor; almost every other consideration pointed to horse-breeding as a hobby or personal pleasure. View "Estate of Stuller v. United States" on Justia Law

Plaintiffs filed a class action against Riceland, requesting the district court compel Riceland to contribute a portion of its recoveries in various cases to the common benefit fund established by the district court to compensate plaintiffs for their legal work. The district court dismissed Riceland's counterclaims of breach of contract and tortious interference and certified the dismissal as a final judgment under FRCP 54(b). The court agreed with its sister circuits and held that a res judicata effect can properly be considered as a “miscellaneous factor” under the Hayden factor analysis. In this case, the district court did not err in considering the res judicata ramification in the Arkansas state court case. The district court found that plaintiffs and the district court itself would suffer injustice if entry of final judgment was delayed. On the merits, the court concluded that the claims regarding genetically-modified rice were released by the Settlement Agreement and Release, but the Release does not govern plaintiffs’ unjust enrichment and quantum meruit claims against Riceland for its failure to contribute to the fund. Accordingly, the court affirmed the district court's judgment. View "Riceland Foods v. Downing" on Justia Law

In the 1970s, the Department of the Interior’s Fish and WildlifeService began entering into cooperative farming agreements with farmers to manage public lands in the National Wildlife Refuge System for the conservation of migratory birds and wildlife, including at the Umatilla and McNary Refuges in the Pacific Northwest. Most CFAs share identical terms; the Service permits a “cooperator” to farm public land with specific crops that benefit wildlife. There is no payment. Cooperators typically retain 75 percent of the crop yield for their efforts. Hymas sought a cooperator contract. The Service selected other cooperators, but did not use formal procurement procedures or solicit full and open competition. It relied upon its system that gave preference to previous cooperators with a successful record of farming designated areas within the refuge. Hymas did not live adjacent to the refuges and had not previously farmed refuge lands. The Claims Court concluded that it had subject matter jurisdiction under the Tucker Act, 28 U.S.C. 1491(b)(1), to resolve his bid protest and held that the Service violated various federal procurement laws and the Administrative Procedure Act. The Federal Circuit vacated with instructions to dismiss, holding that the CFAs are not subject to Tucker Act review. View "Hymas v. United States" on Justia Law

Plaintiffs filed suit seeking declaratory and injunctive relief, claiming that new regulations promulgated by the USDA may result in an increase in foodborne illness from contaminated poultry. The district court concluded that plaintiffs failed to demonstrate an injury in fact and dismissed their claims for lack of standing. The court concluded that standing should have been evaluated under the motion to dismiss standard pursuant to Federal Rule of Civil Procedure 12(b)(1), and the district court erred by using the heightened standard for evaluating a motion for summary judgment. On the merits, the court concluded that, because plaintiffs have failed to plausibly allege that the NPIS substantially increases the risk of producing unwholesome, adulterated poultry compared to the existing inspection systems, they do not have standing. Further, plaintiffs' self-inflicted injuries are not fairly traceable to the NPIS, and their subjective fear does not give rise to standing. The court also concluded that FWW has not alleged an injury to its interest to give rise to organizational standing. Because plaintiffs have failed to establish that they will likely suffer a substantive injury, their claimed procedural injury necessarily fails. Accordingly, the court held that plaintiffs failed to show any cognizable injury sufficient to establish standing. The court affirmed the judgment. View "Food & Water Watch, Inc. v. Vilsack" on Justia Law

Appellees were 34 individuals who owned or resided on properties adjacent to a 220-acre farm in York County, owned since 1986 by appellant George Phillips. Phillips operated his own farm, Hilltop Farms, and leased part of the land to appellant Steve Troyer, who raised various crops. Appellants Synagro Central, LLC and Synagro Mid-Atlantic are corporate entities engaged in the business of recycling biosolids for public agencies for land application; they contracted with municipalities to recycle and transport biosolids, which were then used as fertilizer. Over approximately 54 days between March 2006 and April 2009, approximately 11,635 wet tons of biosolids were applied to 14 fields at the farm. The biosolids were spread over the fields’ surface and not immediately tilled or plowed into the soil. Appellees contended that as soon as the biosolids were applied, extremely offensive odors emanated. In July 2008, appellees filed two similar three-count complaints, which were consolidated; they also filed an amended complaint in 2010. In Count I, appellees alleged appellants’ biosolids activities created a private nuisance. Count II alleged negligence by appellants in their duty to properly handle and dispose of the biosolids. Count III alleged appellants’ biosolids activities constituted a trespass on appellees’ land. Appellees sought injunctive relief, compensatory and punitive damages, and attorney’s fees and costs. In October 2009, after receiving the third notice of violation from the PaDEP, Synagro suspended the use of biosolids at Hilltop Farms, rendering appellees’ request for injunctive relief moot. The last application of biosolids at the farm occurred in April 2009. Appellants moved for summary judgment on the basis that appellees’ nuisance claims were barred by the one-year statute of repose in section 954(a) of the Right To Farm Act (RTFA). The issue this appeal presented for the Supreme Court's review was whether a trial court or a jury should have determined the applicability of section 954(a), and whether the trial court properly concluded the land application of biosolids as fertilizer is a “normal agricultural operation,” rendering section 954(a) applicable. The Court held that section 954(a) was a statute of repose; its applicability, as determined by statutory interpretation, was a question of law for courts to decide. Further, the trial court properly held biosolids application fell within the RTFA’s definition of “normal agricultural operation,” which barred appellees’ nuisance claims. Accordingly, the Court reversed the portion of the Superior Court’s order that reversed the grant of summary judgment for appellants on the nuisance claims; the remainder of the order was affirmed. View "Gilbert v. Synagro Central" on Justia Law

This case was a putative class action challenging an herb grower’s (Defendant) marketing of its herbs as organic. Defendant sought judgment on the pleadings on federal preemption and primary jurisdiction grounds, arguing that the Organic Foods Production Act of 1990 vests the United States Department of Agriculture with exclusive authority to to regulate the labeling and marketing of organic products and both expressly and impliedly preempts state truth-in-advertising requirements. The trial court agreed and entered a judgment for Defendant. The Court of Appeals affirmed, concluding that the express preemption provisions in the Organic Food Act did not foreclose state false advertising suits, but such suits were impliedly preempted. The Supreme Court reversed, holding that a state law claim that produce is being intentionally mislabeled as organic is neither expressly nor impliedly preempted. Remanded. View "Quesada v. Herb Thyme Farms, Inc." on Justia Law

Between April 23 and June 1, 2008, there were 57 reported cases of salmonellosis. The FDA, federal and state agencies, and food industry began an investigation to determine the source of contamination. On June 3, 2008, the FDA issued a press release alerting consumers that the salmonella outbreak “appears to be linked” to the consumption of “raw red plum, red Roma, or round red tomatoes” and that “the source of the contaminated tomatoes may be limited to a single grower or packer or tomatoes from a specific geographic area.” Later, a spokesman stated the FDA suspected the contaminated tomatoes had been shipped from Florida or Mexico, and red plum, red Roma, and red round tomatoes were “incriminated with the outbreak.” A third press release announced that “fresh tomatoes now available in the domestic market are not associated with the current outbreak.” Although the link between the salmonella outbreak and the their tomatoes was eventually disproved, tomato producers alleged that all or almost all of the value of the perishable tomatoes was destroyed due to a decrease in market demand. The Federal Circuit affirmed dismissal on grounds that the warning of a possible link between the tomatoes and an outbreak did not effect a regulatory taking. View "DiMare Fresh, Inc. v. United States" on Justia Law

This case involved the raisins. One of the California Marketing Act of 1937's (CMA) requirements was that the Secretary of California’s Department of Food and Agriculture, in adopting a marketing order for industry advertising or research, must find that the order “will tend to effectuate the declared purposes and policies of [the CMA].” The trial court: (1) concluded that this requirement could be met only if “the [o]rder was necessary to address adverse economic conditions in the raisin-growing industry that were so severe as to threaten the continued viability of the industry”; (2) invalidated the advertising and research marketing order challenged here because there was insufficient evidence showing such economic conditions; and (3) found, on these same grounds, that the Department improperly exercised the police power in adopting the marketing order. The Court of Appeal found the trial court’s interpretation of this requirement of the CMA, which Karen Ross, the Secretary, appealed, erroneously limited the CMA’s applicability, as to marketing orders for industry advertising or research, only to Great Depression-like economic circumstances. Consequently, the Court reversed the judgment, which mooted the cross-appeal of Lion Raisins, Inc., and Lion Farms LLC (formerly Lion Brothers) (the cross-appeal concerns the proper calculation of the assessment refund for the invalidated marketing order), and remand the matter for the trial court to consider the other challenges to the marketing order that the raisin companies raised. View "California v. Raisin Valley Farms" on Justia Law

Silver Bait operates, on 750 acres in Tennessee, housing, growing, and packaging bait worms for sale to retailers. Silver Bait imports baby worms from Europe and feeds and grows them in seven concrete structures, 540 feet long and 50 feet wide, with a 10-foot wide tractor driveway down the center, with worm beds on either side. Durant grows his own corn in to ensure the quality of the feed. Workers send corn silage through a grinder and combine it with peat moss, lime, and water. Silver Bait also makes its own customized bait cups using an injection-molding machine. Believing its employees fell within a Fair Labor Standards Act exemption for agricultural workers, Silver Bait did not pay overtime. In 2010 the Department of Labor issued a report finding Silver Bait’s employees exempt, ordering Silver Bait to pay overtime for one four-week period when the company acted as a wholesaler, importing worms and immediately reselling them to retailers. After obtaining consent forms from other workers, employees filed a private action under 29 U.S.C. 216(b). The Sixth Circuit affirmed a declaratory judgment in Silver Bait’s favor. Although not a specifically enumerated farming activity, there is little to distinguish Silver Bait from a traditional farm other than the unfamiliarity of worm farming. View "Barks v. Silver Bait LLC" on Justia Law