Case Summaries

The Nebraska Court of Appeals found that an owner-installed speed bump did not unreasonably burden an ingress/egress easement. The plaintiffs in the lawsuit were the owners of the dominant estates and had the right of ingress and egress. The defendants were the titled landowners who had installed a speed bump within the easement without talking to the plaintiffs prior. The speed bump was painted. The plaintiffs argued the speed bump was unsafe and could interfere with emergency vehicles. They stated they were concerned about their liability if the speed bump caused accidents or damage. Finally, one owner testified the speed bump caused additional wear to their snowplow equipment, but did not bring a claim for damages.

The court noted that the legal test for such an issue rests on the reasonableness of the action. Both plaintiffs, as the dominate estate, and defendants, as the servient estate, share rights to the easement land. The court had to determine whether the speed bump was “an unreasonable use relative to the [Plaintiffs’] rights.” In this case, the court found the speed bump was allowed. It did not restrict the plaintiffs’ ability to access their properties, nor did it pose an unreasonable risk of damage to those using the easement. Specifically, the plaintiffs did not bring forth any specific reasons why the speed bump would interfere with emergency vehicles or posed unreasonable risk of damage during snow removal. Therefore, the speed bump was allowed.

Barsell v. Rasmussen, No. A-23-446 (Neb. Ct. App. April 9, 2024).

Plaintiff National Wildlife Federation (“NWF”) challenged a 2020 Final Rule regarding the certification of wetland maps that occurred between 1990-1996.  The rule was established by the National Resource Conservation Service (“NRCS”). In the 1990 Farm Bill, Congress required NRCS to “delineate wetlands on wetland delineation maps”, certified each map, and periodically “review and update” the certifications. In the 1996 Farm Bill, the statute was amended and stated certifications “shall not be subject to a subsequent wetland certification[.]”

Prior to 2013, state-level NRCS offices were not taking a uniform approach to certified wetland determination requests regarding pre–1996 certifications, and often times farmers were told that their determination was not certified. Beginning in 2013, NRCS began treating pre-1996 determinations as certified if the map was legible and the farmer was informed of their appeal rights. There were a few interim rules, but ultimately in 2020 NRCS issued a final rule substantially the same as the 2013 procedures. The NRCS did not consult with the Fish and Wildlife Service (“FWS”) or create an updated Environmental Impact Statement when issuing the final rule, but it did issue a new finding of “no significant impact” under the National Environmental Policy Act. The plaintiff challenged the 2020 rule arguing that NRCS violated the Administrative Procedures Act (“APA”) by creating the rule “without exercising reasoned decision-making” and moved for summary judgment. The NRCS also moved for summary judgement arguing that NWF did not have standing to bring the suit.

The D.C. District Court found that NWF had Article III standing and could bring a lawsuit against NRCS. NWF has standing through the “associational standing doctrine” which requires that at least one member has standing to sue individually, and the lawsuit pertains to the organization’s purpose. The court found that three members of NWF would have standing to sue because they receive recreational benefits from wetlands.

The D.C. District Court found that NRCS did violate the APA when it created the 2020 Final Rule. NRCS argued that it did not change its policy in 2013; instead, it clarified confusion that occurred at the state level. The court did not agree, it reviewed the record and found that there is a discernable difference beginning in 2013 in how the agency’s treated pre-1996 certifications. NRCS conceded that if the policy had changed, it violated the APA. Therefore, the court found that NRCS violated the APA when it made the 2020 Final Rule regarding pre-1996 certifications.

Nat'l Wildlife Fed v Lohr et. al., Civil Action No. 19-cv-2416 (D.D.C. Feb. 22, 2024).

Defendants are a farmer and his employee. In 2020, on a rented field next to wetlands, they planted soybeans. In June 2020,  the farmer’s employees were attempting to scare off geese that were eating the soybean crop. Later in the summer the farmer’s employee spread something on the edge of the field near the wetlands. The next day the landlord and their son went to the field and noticed yellow corn in a line on the ground, near dead birds. In total there were 17 geese, 1 female mallard duck, and 7 red-winged birds that were found near the corn. The Pennsylvania Game Commission was called and took samples. The testing found that carbofuran was present in the corn and the dead birds.

When asked about the situation the following day, the farmer said that he had directed his employee to spread seed corn “to feed the geese to keep them away from his plants.” He denied that the corn was intentionally poisoned. Instead, he claimed he made a mistake by directing his employee to spread seed corn instead of “regular corn.” He then showed the pink coated seed corn to the investigating agent.

The United States brought three claims against defendants and found the defendants guilty of all three. The defendants were found guilty of conspiracy. The alleged objective of the conspiracy was to (1) violate the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)  by using carbofuran for an illegal purpose and (2) violate the Migratory Bird Treaty Act (MBTA) by unlawfully killing migratory birds without permit or authorization. The court found that both defendants were familiar with agrichemicals and therefore would have known that carbofuran was on the corn and that it had no authorized uses since 2009. Further, the court reasoned that the defendants knew of the illegality of their actions when they directed the investigation agent to the pink seed corn, which “had obviously different physical characteristics” than the corn found in the field. The other two claims against the defendants were violations of FIFRA and MBTA. The court found the defendants guilty of violating both for the same reasons they were guilty of a conspiracy.

U.S. v. Yost & Reese, Crim. No. 2:21-cr-00467-WSH (W.D. Pa. Jan. 24, 2024).

Plaintiff is a development company that purchased farmed land in 2016. At the time of purchase, it was assessed as agricultural for property tax purposes, and received “greenbelt status.” In 2018, the company leased the land to a farmer who planted alfalfa in September of that year. In December 2017, the Douglas County Assessor gave notice to plaintiff that the land would no longer have greenbelt status for 2018 because the assessor’s office noticed surveyor stakes and grading of the property. Pursuant to Nebraska law, the plaintiff filed an application with the assessor to have the land put back under greenbelt status. The plaintiff explained that after grading took place in June, alfalfa would be grown on the property pursuant to the lease. The assessor’s office denied the application on July 15th, the statutory deadline for the decision, when it saw grading equipment on the property in late June. After following the correct process to appeal the assessor’s office’s determination, the plaintiff protested the determination to Nebraska’s Tax Equalization and Review Commission (TERC). After a hearing, TERC affirmed the assessor’s office’s denial of the greenbelt application because no agricultural activity was happening on January 1 or July 15th in 2018. The plaintiff appealed TERC’s determination.

The Nebraska Supreme Court overturned the TERC determination because TERC wrongly considered the use of the property on July 15th. The statute that authorizes greenbelt status states that eligibility “shall be determined each year as of January 1.” Further, a review of the relevant statutes shows that greenbelt status requires the land to be “primarily used” for agriculture or horticulture purposes, and does not prevent greenbelt status on land that is being platted and subdivided into separate lots. The court then reviewed the evidence to determine the property’s use as of January 1, 2018. The evidence showed that the land was “the same as every other agricultural property in Nebraska after a fall harvest[.]” Therefore, TERC’s decision to affirm the denial of the plaintiff’s application for greenbelt status was arbitrary and unreasonable. The court reversed the decision of TERC and remanded with directions to sustain the protest.

Fountain II, LLC v. Douglas Cnty. Bd. of Equal., 315 Neb. 633 (Neb. Jan. 5, 2024).

The parties are sisters, Kristi and Elisa, who co-owned two parcels in Missouri. Kristi brought a partition action on the parcels in February 2021. In January 2022, the sisters entered into settlement agreements, one for each parcel. At the time of signing, no specific price for either parcel was listed. Instead, the price would be determined by one party and the other party would choose whether to sell or buy at the determined price. This method for pricing is commonly referred to as a “shotgun clause” in partnerships or closely held corporations. Each sister got to determine the price on one parcel and choose whether to buy or sell on the other parcel. Both sisters listed a price for their assigned property, but Elisa refused to decide whether she would buy or sell at the price Kristi determined. She also refused to close on the other parcel when Kristi decided to buy her out at her listed price.

Kristi sued Elisa for breach of the settlement agreements. Elisa responded by arguing the settlement agreements were not enforceable because they were missing a material term – the purchase price. The district court found the settlement agreements were enforceable and Elisa appealed.

The Missouri Western Court of Appeals affirmed the district court. Missouri law requires an enforceable real estate contract to “stipulate a price, or method of determining it[.]” The court found that the shotgun clause was deliberately chosen because it was “presumably more suited to reaching their settlement goals.” Further, since Elisa listed a price for her assigned property it was clear that she understood the pricing mechanism within the agreements. Finally, the court likened the mechanism to a “first refusal” option clause that leaves price to future agreement, which has been upheld as an enforceable contract in a 1956 Missouri Supreme Court case.  

Brown v Pfeifer, WD85929 (W.D. Mo. Ct. App. Jan. 02, 2024).

Debtors operate a farming and cattle operation in Kansas that filed Chapter 12 bankruptcy in February 2021. Farmers State Bank (hereafter, “bank”) is a creditor that holds over 90% of the claims against debtors. Debtor and Bank signed a settlement agreement which the bankruptcy court approved in September 2021. The agreement required the debtors to make annual payments in June. The default language within the agreement allowed the 2022 and 2023 payments to be reduced by 20%, but also stated “[t]his provision shall be the limit of Debtors’ ability to modify the Chapter 12 Plan as to [bank].”

In December 2021, the court confirmed the Debtors’ §1222 plan. In the plan, the debtors “reserve the right to modify” the plan before the completion of payments to unsecured creditors as long as the requirements of 11 U.S.C. §1229 were met. The plan also states that bank’s claim is subject to the settlement agreement, and attached the agreement.

In June 2023, the debtors motioned the court for a modification of the plan when they were unable to make the 2023 payment to the bank. The debtors wanted a past payment to be recharacterized, which would allow for a portion of that payment to be applied to a future payment. The bank opposed the modification, arguing that the settlement agreement controlled, and that modification was not permitted.

In the opinion, the court succinctly stated the main issue before it. “[C]an a Chapter 12 debtor modify an agreed settlement, partially performed, because § 1229 permits modification of confirmed Chapter 12 plans and the settlement was incorporated into the plan?” The court found that the debtors cannot modify the agreement under this fact scenario. The anti-modification term in the settlement agreement controls since it was incorporated into the plan and was specific compared to the general modification provision found in the §1222 plan.

In Re Huninghake, No.21-40090-12 (Bankr. Kan. Dec. 15, 2023).


Defendants owned a 4-H hog that escaped its pen and injured the plaintiff neighbor. The hog caused the neighbor to fall down, thereby injuring his neck, back, and leg. The neighbor brought a lawsuit against owners. Under Louisiana statute, animal owners are liable for damage caused by their animal when (1) the owner knows, or should have known, the animal’s behavior would cause damage and (2) reasonable care could have prevented the damage. On a summary judgment motion, the defendants argued the plaintiff could not prove they knew or should have known the hog would cause damage. The district court granted the motion. The plaintiff appealed, arguing that “generally large animals, when they escape their enclosures, are inherently dangerous.”

The Louisiana Third Circuit Court of Appeals affirmed the district court. The court noted that negligence is the basis of liability for all animals except dogs in Louisiana. The court agreed with the defendants that there was no evidence that they should have known the hog had “vicious propensities.” The depositional testimony showed that the hog was “gentle, sweet, and friendly[,]” and would routinely be let out of his pen. The court also found there was no evidence of any circumstances that day that would “excite or scare” the hog. The court stated the only thing that could have stressed the hog, “would be knowledge of its demise once [Plaintiff] employed self-help, immediately after this incident, by shooting and killing the [Defendant’s] hog.” Therefore, the court found that plaintiff could not prove defendants should have known their hog would cause damage, and affirmed the district court’s dismissal.

Johnson v Battise, No. 23-283 (La. Ct. App. 3rd Dec. 13, 2023).  

Plaintiff was injured when his friend’s tractor unexpectedly took off and ran him over. The friend did not have insurance on the tractor or his home, so Plaintiff made a claim under his own car insurance policy’s uninsured motorist’s policy. The insurance company denied his claim. Plaintiff argued that the policy covered injuries caused by a “vehicle used in the business of farming or ranching” and that the tractor was such a vehicle. The insurance company argued that the tractor was not used for business purposes and therefore was not obligated to pay Plaintiff’s claim. The tractor was used to bale hay for the friend’s horses and cows. The friend was not a farmer, and had never sold  his cows or horses, their offspring, or any other farm products.

On summary judgment, the district court found that the tractor was not used for the business of farming, instead it was personal use for the owner. The plaintiff appealed arguing that coverage should be determined by the type of vehicle, not the use of the vehicle when the accident occurred.

The Eleventh Circuit affirmed the district court, finding that the use of the vehicle determined coverage. The policy utilizes the term “used” and not “designed for use” which demonstrates that the proper focus is on the activity of the vehicle, not the type. Further, the policy specifies “business of farming” instead of just “farming” which requires even more analysis on how the vehicle was used when determining if the accident was covered under the policy.  

Haskins v. USAA Casualty Ins. Co., No.23-10411 (11th Cir. Dec. 01, 2023).

Plaintiffs are a class of farms and farmers that own and use equipment manufactured by Deere & Company (Deere).  Plaintiffs allege that Deere’s has designed their machinery to require Deere software tools to diagnose and complete a repair, while also preventing farmers and independent repair shops (IROs) from accessing the necessary Deere software and giving access only to Deere dealerships. They believe this restrains trade in violation of Section 1 of the Sherman Act. The plaintiffs also allege that there is a conspiracy among dealerships and Deere to create this repair monopoly which is a violation of Section 2 of the Sherman Act. Three counts were brought under Section 1 of the Sherman Act, and four counts were brought under Section 2.

After filing their answer, Deere brought a 12(c) motion arguing that plaintiffs lack standing under Article III due to lack of causal connection between the alleged injury and their conduct. They also claimed there was no antitrust standing because the plaintiffs bought Deere repair services from dealerships, not Deere directly, and did not bring suit against the dealerships. Deere also argued for dismissal claiming plaintiffs brought defective counts.

The district court found that plaintiffs had standing, and all counts were strong enough to survive the motion for dismissal. The plaintiffs plead that they had utilized Deere repair services from Deere dealerships, which was enough of a causal link between the alleged injury and Deere’s conduct for Article III standing.  The court found there was antitrust standing because plaintiffs are the direct purchasers of the repair services, not the dealerships, and a conspiracy that Deere was preventing IROs and others from obtaining repair software was plausibly alleged.  

On the issue of defective counts, the court found that plaintiffs have shown enough circumstantial evidence to show it is possible there is a “common scheme” among the dealerships and Deere to create an aftermarket repair monopoly. This is enough for the counts associated with Sections 1 and 2 of the Sherman Act to survive at this stage of litigation.

In re: Deere & Co. Repair Serv. Antitrust Litig., No. 3:22-cv-50188, 2023 WL 8190256 (N.D. Ill. Nov. 27, 2023).  

Plaintiff Picazo contracted in 2020  with Aptos Berry Farms, Inc. (“Aptos”) to farm strawberries in 2021 that Driscoll's, Inc. (“Driscoll's”) later sold. Initially the contract was oral, but a written contract was executed in July 2021 stating an effective date of October 1, 2020. Driscoll’s was identified as a third-party beneficiary to the contract. However, Driscoll’s delivered the strawberries and routinely inspected Picazo’s operation. The payment terms were not a set price per crate, instead Picazo would receive a portion of the sale proceeds which was influenced by a pooling arrangement with other growers’ strawberries. Several months after harvest of the strawberries, Picazo had not received a full accounting and was unsure of how Aptos and Driscroll’s calculated his payments. Picazo did eventually receive an accounting, but only after he sent a demand letter in December 2022.  Picazo was not satisfied with the accounting and brough suit against Aptos and Driscoll’s alleging violations of the Perishable Agricultural Commodities Act (PACA) and bringing claims for an accounting and conversion.  Aptos filed a 12(b)(6) motion to dismiss.

The court granted the motion to dismiss, but allowed plaintiff leave to amend. The PACA claims relied on Section 499b(4) which makes it illegal for a “merchant, dealer, or broker” to not pay or make an accounting under an agricultural goods contract. The court found that Aptos is not a merchant, dealer or broker because it does not market or sell the strawberries. Further, the court found that Aptos was not an agent of Driscoll’s. Therefore, PACA does not apply to Aptos. The court found that Driscoll’s is subject to PACA. However, PACA requires contractual privity between plaintiff and defendant and there was no contract between plaintiff and Driscoll’s. Driscoll’s status as a third-party benefit was irrelevant. Ultimately, no PACA claim survived. On the issue of the conversion claim, the court found that the “[p]laintiff does not sufficiently allege a right to receive the payment he seeks” since contractual rights cannot lead to a conversion claim under California law. Finally, the court found that accounting claim moot since an accounting was provided to Plaintiff in December 2022.

Picazo v. Aptos Berry Farms, Inc., No. 23-cv-02735-SVK (N.D. Cal. Nov. 2, 2023).

Plaintiffs are environmental organizations challenging the new plan for livestock grazing in the Fremont-Winema National Forest. Plaintiffs sued U.S. Forest Service (USFS) and the U.S. Fish and Wildlife Service (FWS) in the Federal District Court of Oregon. Plaintiffs argued that both the USFS and ESA failed to adequately address the threats this program would pose to the Oregon spotted frog. They argued there were material deficiencies in the USFS's Final Environmental Impact Statement (FEIS) and the FWS's 2018 Biological Opinion (BiOp). On a summary judgment motion, the district court found that both USFS and FWS properly reviewed the environmental consequences of the new livestock grazing program in the FEIS and BiOp. The plaintiffs appealed to the Ninth Circuit.

The Ninth Circuit found that the FEIS properly addressed impacts to the Oregon spotted frog, but the BiOp did not. The court found that the FEIS “rationally explained its decision to focus on habitat characteristics rather than frog numbers[,]” and therefore met the “rule of reason” standard for a FEIS. In contrast, the court found that the BiOp failed to adequately address the impact of both possible climate change and grazing-related impacts on the Oregon spotted frog population. Additionally, the BiOp failed to address what effect climate change could have on water levels and streamflow. The failure to address these two issues was enough to show that the FWS “failed to consider an important aspect of the problem.” Further, the mitigation strategies outlined in the BiOp were not clear or definitive enough to overcome the deficiency. Finally, the BiOp failed to specifically find that the new grazing plan would not jeopardize the Oregon spotted frog’s survival. The Ninth Circuit reversed the grant of summary judgment and vacated the FWS’s BiOp.

W. Watershed Project v. McCay, No. 22-35706 (9th Cir. Oct. 26, 2023).

On October 13, the Patent Trial and Appeal Board (“board”) granted a petition filed by Inari requesting a post-grant review of U.S. Patent No. 11,371,055 B2 owned by Corteva. The patent is referred to as the “055 patent” of an herbicide resistance gene for soybeans and cotton. The '055 patent identifies its preferred enzyme and gene as AryloxyAlkanoate Dioxygenase and shortened it to "AAD-12". Corteva patented AAD-12 with up 85% variability of the amino acids that comprise AAD-12. Inari challenged the issuance of the patent stating that claims of the patent are unpatentable due to “lack of written description” and “lack of enablement.”

In response, Corteva asked the board to invoke their power of discretion to deny the review because the “same or substantially the same arguments” were already examined by the USPTO prior to the issuance of the patent. The board rejected this argument finding that Inari raises a new argument when it claims structure outside the disclosed AAD-12 can also affect herbicidal resistance. The court also found that the USPTO materially errored when it did not issue a rejection for lack of enablement. Therefore, the board chose not to invoke its power to deny the review request.

On the merits of the petition, the board found that Inari successfully brought both claims. The ‘055 patent had a lack of written description since the description was overly broad when it claimed up to 85% variability of the amino acids in AAD-12 would still achieve herbicide resistance. The board noted that Corteva did not show proof herbicide resistance in any combination less than 99% the same as the sequence disclosed in the patent. This shortfall was also cited as the reason the board found that there was a lack of enablement in the patent. The board found that the ‘055 patent would not lead someone skilled in plant genetics to be able to produce a variable AAD-12 that would still retain the intended herbicide resistance.

Inari Agric. v. Corteva Agriscience LLC, PGR2023-00022, Patent 11,371,055 B2 (P.T.A.B Oct 13, 2023).

The Montana Supreme Court ruled that their courts have personal jurisdiction over a New York resident who disparaged a Montana game farm on Facebook. Groo, a New York resident, made two Facebook posts against Triple D Game Farm. The first post shared a disparaging article about Triple D from and encouraged others to share the post. The second post tagged individuals and companies in business with Triple D and encouraged them to cancel any events or future business plans. Groo was not in Montana shortly prior to making the posts or when she made these Facebook posts.  

Triple D sued Groo for tortious interference with contractual relations and tortious interference with prospective economic advantage. Groo then filed a motion to dismiss based on lack of personal jurisdiction. The motion failed and Groo subsequently filed a Petition for Writ of Supervisory Control with the Montana Supreme Court.

The Court found that the second Facebook post by Groo gave rise to personal jurisdiction, but the first Facebook post did not. The court reasoned that since Groo tagged specific accounts in her second post she had created a social media campaign that solely target “Montana residents and business with contractual relations in Montana.” The court emphasized that the correct test for personal jurisdiction is not whether the individual was in Montana at the time the tort occurred, but instead “what the defendant’s actions were, and whether those acts led to events that gave rise to tort claims in Montana.”

Groo v. Mont. Eleventh Judicial Dist., OP 22-0587 (Mont. Oct. 11, 2023).  

Plaintiffs filed a qui tam action under the False Claims Act (FCA) alleging that the Defendants fraudulently received crop insurance payments by insuring their corn as grain, even though the majority of crop was routinely harvested as silage. As a result of certifying the corn as grain and not silage, the plaintiffs claimed defendants received bigger crop insurance payouts. Plaintiffs, on behalf of the US government, sued defendants for fraud and common law unjust enrichment.

The district court determined that the defendants made a false claim each time they certified their corn as grain, but they did not “knowingly” make a false claim. This is because the defendants relied upon the advice of their insurance agents and passed audits. Therefore, the plaintiffs’ FCA claim failed.  However, the district court did find the defendants were unjustly enriched by applying for grain corn crop insurance and not silage corn crop insurance. Therefore, the court found in favor of the Plaintiffs’ unjust enrichment claim and awarded damages.

The United States then intervened and moved for post-trial relief arguing the plaintiffs did not have standing to bring common law claims on behalf of the US government. The district court agreed and vacated the unjust enrichment judgment due to lack of subject matter jurisdiction. The plaintiffs appealed, arguing that the district court errored by granting the post-trial motion by the US and in finding that the Plaintiffs did not knowingly make a false claim.

The Eight Circuit Court found that certifying the corn as grain on the application was not a materially false statement for FCA purposes. The court first found that insurance application is not a claim under the FCA. Second, the court ruled the plaintiffs failed to prove initially insuring a crop mostly intended for silage as a grain lead to a false claim for payment. The court noted the government is aware of the practice and routinely pays this type of claim. Finally, the court found that, “all the record establishes is that Defendants received the crop insurance coverages they paid for.”

On the issue of unjust enrichment, the court affirmed the district court’s vacating their prior judgment. A subject-matter jurisdiction argument can be raised at any time. Since the US government was the real party in interest, they had the right to bring the motion even though it was after the district court’s initial verdict. The court also noted there are numerous court actions that establish that the FCA does not allow qui tam actions for common law claims.  

US ex rel Kraemer v United Dairies, L.L.P., No 22-3306 (8th Cir. Sept. 20, 2023).  


Debtor is an Iowa limited liability company (LLC) formed in 2018. The company’s main assets were real estate near Thornton, Iowa, and used farm equipment the company’s owner fixed and resold. In December 2022, debtor filed for Chapter 12 bankruptcy, listing a total debt of $261,190 and $83,000 in farm assets from a cattle operation. A creditor who had issued debtor a loan challenged the Chapter 12 filing by arguing the debtor did not qualify for family farm bankruptcy, and asked the court to convert the case to a Chapter 7 bankruptcy action.

The court granted the creditor’s motion to convert the case to Chapter 7. Specifically, the court found that debtor committed fraud in filing a Chapter 12 case by “overwhelming evidence in the record.” In support of its finding, the court noted that in 2019 and 2021, the LLC filed its required biannual report with the Secretary of State and stated that it was not a family farm LLC, nor did it hold an interest in agricultural land. The manager of the LLC also applied for a business loan disclosing the farm machinery resale business only, and recertified the parcel was not agricultural land in a Consent Decree of Foreclosure with the loan creditor. The court also found that the cattle operation was owned by a different LLC with the same owner as the debtor LLC, and any testimony that the debtor company owned the cattle under an unwritten lease agreement between the two companies was not credible. Finally, the court found the cattle had been sold to a third party prior to the filing of the bankruptcy petition.

Ultimately, the court found the debtor company was not a “farming operation” and therefore did not qualify for Chapter 12. The court further found that even if cattle were owned by the debtor company, the value of the cattle did not meet the Chapter 12 requirements that 80% of the company’s assets relate to the farming operation or that 50% of the debt arises from the farming operation.

In re DLB II, L.L.C., No. 22-00834 (Bankr. N.D. Iowa Sept. 8, 2023).

The 2018 Farm Bill permits the growing of “industrial hemp” if a state chooses to allow the crop. The Farm Bill explicitly states that it does not preempt any state or triable law that regulates the production of hemp, but does not allow a state to prevent the transportation of hemp products through the state. In 2023, the Arkansas passed Act 629, a law that bans “the growth . . . transfer, or possession of industrial hemp that contains certain Delta THC substances[,]” and criminalized hemp products that were derived “from a synthetic chemical process.” However, the bill did try to address the interstate transportation issue by allowing the “continuous transportation” of the hemp derived Delta substances through Arkansas.

The plaintiff sued officials in Arkansas claiming the state law was preempted by the 2018 Farm Bill, violates the Commerce Clause, and is a regulatory taking under the 5th amendment. They asked the court for a preliminary injunction against the enforcement of the Arkansas law.

The court issued the preliminary injunction on multiple grounds. The court found there is a conflict preemption based on the differing definitions of hemp between the two laws. Specifically, the court found that the federal definition allows for downstream hemp-derived products as long as they do not contain more than 0.3 percent delta-9 THC while the Act 629 does not.

The court also found there was express preemption on the transportation issue. Act 629 does not further define “continuous transportation” and plaintiff successfully argued that the law would not allow a truck driver to stop for gas or rest in Arkansas. The court found that this conflicted with federal allowance of hemp transportation through a state.

Bio Gen, LLC et al. v Sanders, et al.4:23-CV-00718-BRW (E.D. Ark. Sept. 07, 2023).

The Texas Legislature enacted three bills amending the state’s Right to Farm statute during the 2023 legislative session. The new law modifies several definitions, changes when a lawsuit can be brought, and imposes a higher burden of proof for potential plaintiffs. These changes went into effect September 1, 2023.

The Texas Right to Farm statute prohibits nuisance lawsuits against farms that have been in operation and substantially unchanged for one year. Texas Agric. Code § 251.004. Previously, a physical expansion was considered a separate date of establishment. The new law provides that a farm operation has only one date of establishment and that date is when the farm commenced agricultural operations. The law includes a definition for “substantial change” which means “a material alteration to the operation of or type of production at an agricultural operation that is substantially inconsistent with the operational practices since the established date of operation.”

In addition to providing immunity from nuisance lawsuits, HB 2308 expanded the protection offered to farm operations to include any “other action to restrain an agricultural operation.” This could likely include claims of trespass or negligence. In addition, the law requires that a plaintiff prove each element of their claim by “clear and convincing evidence.” This burden of proof is stricter than the “preponderance of the evidence” standard, but less strict than the “beyond a reasonable doubt” standard used in criminal cases.

For more information: HB 1750HB 2308, HB 2947

A group of 18 plaintiffs live near hog farm facilities in North Carolina. Defendants Murphy-Brown and Smithfield Foods owned the hogs on the facilities. The plaintiffs brought nuisance and trespass claims alleging that the defendants' farming activities caused flies, dust, and manure to come onto their property. The defendants petitioned the court for summary judgment.

Under North Carolina law, a trespass claim requires proof that a detectable substance not only crossed over but actually landed on the plaintiff’s property. Wall v. Trogdon, 107 S.E.2d 757, 762 (N.C. 1959). Several defendants claimed that they saw manure from trucks spill onto the highway next to their homes. Yet, they did not offer evidence that the waste came onto their property. Additionally, the plaintiffs failed to prove that the defendants caused the alleged dust or manure to enter the properties instead of other neighboring farms or passing vehicles.

Similarly, the plaintiffs failed to provide a link between their negligence claim and the defendants’ actions. A negligence claim requires a showing that “the negligent breach of [the defendant’s] duty was the proximate cause of the injury.” Whisnant v. Carolina Farm Credit,693 S.E.2d 149, 156 (2010). As a result, the district court granted the defendants’ motion for summary judgment.

Barden v. Murphy-Brown LLC, 2023 WL 5282376 (E.D. N.C. Aug. 16, 2023).

A group of cow-calf ranchers indirectly sold their cattle to the defendants, the four largest meat packing companies in the country. The ranchers raised and sold weaned calves to feedlots and stockers. Once the animals reached market weight, the feedlots would then sell the cattle to the meat packing companies under forward contracts or through the cash market. The ranchers brought this lawsuit alleging that the defendants conspired to suppress the price of fed cattle which “led to a parallel collapse of prices of cows and calves.” The plaintiffs claimed this violated the Sherman Act and the Packers and Stockyards Act.

Defendants argued that the plaintiffs did not adequately plead antitrust standing and moved to dismiss the lawsuit. To prove antitrust standing, the plaintiff must show, among other factors, a causal connection between the alleged antitrust violation and the plaintiff’s injury. Midwest Commc'ns v. Minn. Twins, Inc., 779 F.2d 444, 450 n.6 (8th Cir. 1985). The district court found that the plaintiffs failed to show how the defendants’ alleged actions caused a collapse in the fed cattle market and resulted in a downturn in the cow-calf market.

The plaintiffs did not show that they were the direct target of an anticompetitive activity or that their injury is traceable to defendants’ actions. Many years pass and multiple players are involved between the ranchers selling their livestock and the defendants purchasing the animals. Thus, the district court granted the defendants’ motion to dismiss.

In re: Cattle and Beef Antitrust Litigation, 2023 WL 5310905 (D. Minn. Aug. 17, 2023).

A food manufacturer sold a “Stoneground Wheat Cracker” which stated “ORGANIC WHOLE WHEAT FLOUR” on the bottom of the package. Plaintiffs brought a class action lawsuit claiming that the label misled them to believe that the product primarily contained whole wheat flour as opposed to enriched wheat flour. The plaintiffs alleged this violated New York law prohibiting deceptive practices and false advertising. N.Y. Gen. Bus. §§ 349-350. The manufacturer filed a motion to dismiss.

To succeed on a claim for deceptive practices and false advertising, the plaintiff must show that product’s label is “likely to mislead a reasonable consumer acting reasonably under the circumstances.” Bynum v. Fam. Dollar Stores, Inc., 592 F. Supp. 3d 304, 310 (S.D.N.Y. 2022). If a label is ambiguous, but any uncertainty can be answered on the ingredient label, then a reasonable consumer would not be misled. Here, the phrase “ORGANIC WHOLE WHEAT FLOUR” was in small letters next to the phrase “ORGANIC WHOLE BROWN FLAX SEED & SEA SALT.” Compare Mantikas v. Kellogg Co., 910 F.3d 633, 636 (2d Cir. 2018). This ambiguity of whether the product contained whole wheat rather than enriched wheat flour could have been resolved by reading the nutrition label. Because a reasonable consumer would not have been misled, the court granted the manufacturer’s motion to dismiss. 

Venticinque v. Back to Nature Foods Co. LLC, 2023 WL 5055034 (S.D. New York, Aug. 8, 2023).

After experiencing financial difficulties, a farm debtor applied for Chapter 12 bankruptcy. If a secured creditor does not agree to the debtor’s proposed plan and the debtor does not surrender the secured property, the court will provide the creditor with a lien and a promise of future payments. To ensure that a secured creditor receives at least “the value, as of the effective date of the plan” an interest rate may be charged on these payments. 11 U.S.C. § 1225(a).

The appropriate market rate “should consist of a risk-free rate, plus additional interest to compensate a creditor for risks posed by the plan.” United States v. Doud, 869 F.2d 1144, 1146 (8th Cir. 1989). The bankruptcy court used the 20-year treasury bond rate, rounded up to two percent, as a starting point plus added a two percent risk adjustment for a final rate of four percent. Farm Credit Services, a secured creditor, agreed with the two percent risk adjustment, but appealed the use of the treasury rate instead of the national prime rate (3.25 percent).

Treasury rates do not account for risk while prime rates do account for “the relatively slight risk of default.” Till v. SCS Credit Corp., 541 U.S. 465, 479 (2004). The Eighth Circuit determined that the final rate matters, not which risk-free rate is used as a starting point. Nevertheless, the starting rate must first be determined because it influences the risk adjustment. In determining the risk adjustment, the bankruptcy court considered how Farm Credit was over secured and the overall risk of default. As a result, the Eighth Circuit affirmed that the bankruptcy court applied the correct rate.

In re Topp, 2023 WL 4921241 (8th Cir. 2023).  

The defendant operated a business converting raw manure from feedlots into organic fertilizer. Two employees brought a lawsuit claiming that the defendant and his business violated the Fair Labor Standards Act (FLSA) by failing to pay them overtime wages for time worked in excess of 40 hours during a given week. 29 U.S.C. § 207(a)(1). The defendants moved for summary judgment arguing that the plaintiffs were engaged in “agricultural employment” and thus exempt from FLSA’s overtime payment requirement. Id. at § 213(b)(12).

Agricultural employment includes farming in both the traditional and secondary sense. To show that the plaintiff’s work falls with the secondary sense, the defendant has the burden of showing that the plaintiff’s work was “(1) performed by a farmer or on a farm, and (2) incident to or in conjunction with such farming operations.” Pacheco v. Whiting Farms, Inc., 365 F.3d 1199, 1205 (10th Cir. 2004).

In their motion, the defendants claimed that the business raised livestock and that the plaintiffs prepared “a by-product for market of that farming operation.” The court found that this was a conclusion and did not establish the type of work the plaintiffs performed. Similarly, the motion did not address whether the defendants’ operations were incidental to the farming operation. Because the defendants failed to meet their burden, the court denied the motion for summary judgment.

Porter v. T.J. Crowder and Sons, LLC, 2023 WL 4899551 (D. Col. July 31, 2023).

A couple obtained a loan from Farm Service Agency (FSA) to purchase a farm. Despite some concerns about the property, the buyers went through with the purchase. The morning after the closing, the buyers tried to rescind the sale. The seller initially agreed to rescind the sale, then refused. The buyers brought several tort claims against FSA under the Federal Tort Claims Act and argued that the loan officer breached her fiduciary duty. See 28 U.S.C. § 2674.   

Although a lender does not typically have a fiduciary relationship with a borrower, a lender may owe a fiduciary duty to a subservient borrower. The courts will consider the borrower's age, mental capacity, education, and business experience to determine whether the borrower is subservient. Here, the borrowers did not have any physical or mental impairments. They both had post-secondary degrees and many years of farm experience. Because the borrowers failed to show that FSA acted a fiduciary, the district court granted FSA’s motion for summary judgment.

Karl v. United States, 2023 WL 4762827 (W.D. Wis. July 26, 2023).

Plaintiffs are Colorado farmers who own the surface rights above a large oil and gas deposit and defendants hold the mineral rights below. Between 2004-2007, the defendants’ lessees drilled seven vertical wells. Plaintiffs requested that defendants drill directional wells, which would have reduced the number of well site to two. The lessees did not drill directional wells, and the plaintiffs and similarly situated neighbors sued the mineral rights holders for trespass in a class action lawsuit. The crux of their argument is that only using vertical wells when directional wells would have sufficed caused the mineral right holders to exceed their right to drill and the excess wells are a trespass based on unreasonable surface use.

The court used a “three-step burden-shifting approach” examine a trespass claim based on unreasonable surface use. The surface owner must first prove that the mineral right holder “material interfered with surface uses.” Material interference is a high standard. It requires that the surface rights holder prove their use of the land is “completely precluded or substantially impaired” and that there is “no reasonable alternative” to the current use. The court found that the plaintiffs failed to prove material interference since the land was still used for agricultural purposes. The court acknowledged the plaintiffs were inconvenienced by the presence of the wells, but that alone is not enough to establish material interference.

Bay v. Anadarko E&P Onshore, LLC, No. 21-1361 (10th Cir. July 18, 2023).

Plaintiffs own 63 acres which are leased to a winery. On the property there is a “toolshed parcel” and “warehouse parcel.” The toolshed stores a wine press, wine processing sometimes occurs, and is storage for 40-60 barrels of wine. The space also sometimes serves as an event venue. The warehouse stores empty wine bottles and wine bottles awaiting pickup for distribution.

In 2018, the county auditor determined that the toolshed and warehouse do not qualify as agriculture, and instead should be taxed as commercial property. The plaintiffs appealed this determination to the Board of Revision, who ultimately determined the properties should be taxed as industrial property. The plaintiffs appealed the Board of Revision’s determination to the Board of Tax Appeals. The Board of Tax Appeals affirmed that the property was industrial. The plaintiffs appealed the Board of Tax Appeals, arguing that both parcels should be taxed as agricultural property.

The Ohio Court of Appeals found that both the toolshed and the warehouse were agricultural property. The court, using the definition of agriculture found in Ohio Revised Code § 1.61, found that the primary use of both facilities was agricultural. Although the regulations defining agriculture for property taxation does not include the storage of wine, the statute trumps the administrative code’s definition of agriculture. Since Ohio Revised Code § 1.61 specifically states that “viticulture, winemaking, and related activities . . . [and] the processing, drying, storage and marketing of agricultural products” is agriculture, the property taxation schemed is required to use this definition over the definition within the regulations.

Dalton G. Bixler 2016 Trust v. Tuscarawas Cty. Bd. of Revision, 2023-Ohio-2455 (Ohio Ct. App. 5th July 18, 2023).

Quay Road AI runs south along tracts owned by the Ambercrombies and plaintiffs. In 1954, a flood washed out a bridge along Quay Road and the rerouted crossing occurred 100 feet west, onto plaintiffs’ land. In 2005, the Ambercrombies leased their property for a solar farm, and access to the leased lands required use of the crossing. When construction began, plaintiffs demanded payment from the solar lease company to use the crossing. Negotiations between the solar company and plaintiffs failed, and plaintiffs sued for an injunction to prevent the solar company from using the crossing. The county intervened claiming the crossing was within a public prescriptive easement.    

A public prescriptive easement requires the claiming party to establish that the public used the property, open or notorious adverse use of land, and the use continued without interruption for the prescriptive period. Trial court found that there were maps showing the crossing as a public road, neighbors never asked permission for use, and the local title company identified the road as public. The trial court found that crossing was a public prescriptive easement. On appeal, the court of appeals overturned the trial court and held that establishing a public prescriptive easement requires evidence showing the public’s frequency of use or number of users.

The supreme court found that crux of the issue lies with proving the public nature of the road, not the number of individuals who used. Ultimately, the court held that to establish a prescriptive easement “frequency of use or number of users is unimportant, it being enough if use of the road in question was free and common to all who had occasion to use it as a public highway[.]” It held the crossing on plaintiffs’ land was subject to a public prescriptive easement.

McFarland Land and Cattle, Inc. v. Caprock Solar 1, LLC, No. S-1-SC-38934 (N.M. July 13, 2023).

The plaintiffs own land directly east of the defendants, and use the north 60 feet of defendants’ land to access a two-acre tract separated from the rest of plaintiffs’ parcel by a creek. A disagreement arose over the location of the boundary line, and resulted in plaintiffs bringing an action for a prescriptive easement to access the two-acre field.

In Kansas, the elements necessary to prove a prescriptive easement are very similar to adverse possession. The elements are: (1) open, (2) exclusive, (3) continuous, (4) for a set prescriptive period; and (5) adverse. The controversy of this case rested on whether plaintiffs met the exclusive element since others would use the north 60 feet to hunt or fish.

The court held that the exclusive element to establish a prescriptive easement meant that the plaintiffs’ use was unique compared to others. This is different than the exclusive element for adverse possession, where exclusive means the person claiming ownership must keep all others out. The court made it clear that multiple parties could have prescriptive easements over the same land, as long as their easement was for their unique purpose. Ultimately, the court found that the plaintiffs had established a prescriptive easement over the north 60 feet of defendants’ land for purposes of “a corridor” to the two-acre field.

Pyle v. Gall, No. 123,823 (Kan. July 7, 2023).

Defendant was the landowner of a parcel that was the servient estate for an ingress egress easement. The easement was called Whippoorwill Lane by locals and was established in 1937. There was various easement language on earlier deeds that conveyed land that would eventually become the plaintiffs' parcel and the defendant’s parcel. However, the plaintiffs’ deed made no mention of the easement, and the defendant’s deed only stated that the conveyance was “subject to . . . easements . . . of record, if any.” Eventually, the defendant wanted to move the location of the easement. He wanted the plaintiffs to use an alternative road that he constructed. Plaintiffs were not amicable to using the new road.

Plaintiffs sued defendant for a declaratory judgment of an express easement along Whippoorwill Lane. Defendant counterclaimed for trespass and asked the court to relocate the easement by “judicial fiat,” arguing a balancing test weighing the burdens and benefits of the two roads was the appropriate standard for the court to use to determine whether to relocate the easement. Trial court found in Whippoorwill Lane was an express easement.  Defendant appealed the trial court’s determination.

On appeal, the appellate court affirmed the trial court. The easement was an appurtenant easement that was properly recorded in earlier deeds. The omission of the specific easement on plaintiffs’ and defendant’s deed was irrelevant. The court also held that the location “cannot be changed by either party without the other’s consent[.]” Therefore, the trial court used the correct approach when it did not use the balancing test to determine if the easement should be moved to defendant’s new road. 

Wallace v. Byrne, No. ED110783 (Mo. E. App. Ct. June 27, 2023).

Kathleen, Linda, and Glen were three owners of two farm parcels. They held the land as tenants in common. They all signed a “restriction agreement” when the Glen bought into the property in 2001. The restriction agreement prevented any one party from selling or transferring to an outside party without first offering to the other two owners. This also included transfers that occurred due to the death of an owner. If the procedure was not followed, then that transfer of property would be “null and void and have no effect whatsoever.” The agreement would terminate when there is one original interest holder.  

In 2016, Kathleen transferred her property interest to herself and her husband, Virgil. This was contrary to the restriction agreement terms since no notice was given to the other two owners. Kathleen died in 2017 with her interest going to Virgil. Virgil died in January 2021.

Glen filed a petition asking the court to compel sale of the land pursuant to the restriction agreement. The respondent replied by arguing that the restriction agreement was an illegal restrain on alienation and therefore Glen had no purchase right.

The trial court determined that the restriction agreement was not illegal restraint on alienation. The appellate court affirmed the trial court and  found that the restrictive agreement was not a restraint on alienation. There was a termination date, the time to decide to buy after a proposed transfer is reasonable, range and frequency of options is reasonable, and has a reasonable pricing scheme.

In re Estate of Hoppert, No. 362694 (Mich. Ct. App. June 29, 2023).

The County of Kaua‘i authorized the opening of a drainage system outfall several times in 2020 and 2021. The water, containing pollutants, would flow from a ditch through the outfall and into the Pacific Ocean. The County did not have a National Pollutant Discharge Elimination System (NPDES) permit during that time. Plaintiffs brought this lawsuit claiming that the County violated the Clean Water Act (CWA) by discharging a pollutant into navigable waters from a point source without a NPDES permit.

The defendant claimed that the drain was not a point source because there are other nonpoint sources within the plain where the drain is located. However, the CWA defines a point source as “any discernible, confined and discrete conveyance, including but not limited to any ... ditch....” 33 U.S.C. § 1362. Thus, the district court granted the plaintiffs’ motion for summary judgment on the issue of liability.

The case is Na Kia'i Kai v. County of Kaua'i, 2023 WL 3981422 (D. Haw. June 13, 2023)


Murfam Enterprises, LLC is the privately held company of a multi-generation hog farming family in North Carolina and taxed as a partnership. In 2000, the company obtained a 6,171-acre parcel of land named the “Rose Tract.” Subsequently, the State of North Carolina granted hog-farming certificates that were attached to Rose Tract. The certificates authorized a “feeder-to-finish” facility, but could be converted into authorization for a “farrow-to-wean” facility. In 2007, North Carolina imposed a moratorium on issuing new hog-farming certificates. In 2010, Murfam donated a conservation on the whole of Rose Tract to North American Land Trust. The easement specified that Rose Tract could not be used to hog farm, and claimed a charitable deduction of $5,744,600 for the donation of the easement.

In 2015, the IRS challenged the value of easement. They claimed the value was $446,000. Murfam contested this determination. Prior to the tax court trial, both parties agreed that the value of the easement “is in effect the value of the hog-farming certificates.”

The court utlitized the “highest and best use” method to determine the value of easement. In doing so, it relied heavily on the calculations of Murfam’s expert, who determined that a farrow-to-wean facility was the most profitable use for the property before the easement. The IRS expert only examined the financials of building a feeder-to-finish facility and found that operation to be “financially unfeasible.” 

In calculating the value of the easement, the court first took the value of the hog-farming facility plus the stipulated value of the remaining acreage to determine the initial value of the tract prior to the easement donation. It then subtracted the stipulated value of the land after the donation to determine that the value of the easement was $5,637,207.

Murfam Enterprises, LLC v. IRS, T.C. Memo 2023-73 (June 15, 2023).

Defendant was a sales agronomist in South Dakota for the plaintiff until March 23, 2023, and then began working for a competitor of the plaintiff. The plaintiff is Wilbur-Ellis, a company that sells agricultural products including seed, fertilizer, and pesticides. The parties entered into an employment agreement signed in March 2015. There were three relevant paragraphs within the agreement: (1) the auto renewal of the contract, (2) restrictive covenants that included a non-compete and non-solicitation for two years and within 100 miles, and (3) a survival clause. The survival clause did not expressly state that restrictive covenants survived the termination of employment agreement.

On April 19, the plaintiff brought suit against defendant for violating the restrict covenants in the employment agreement and asked the court for an injunction. The court will grant the injunction if the plaintiff can prove they have “a fair chance of prevailing.” The court found that the existence of the survival clause shows the parties intended certain terms to continue after termination. There were no provisions within the contract that expressly stated the survival clause applied to that term, and rules of interpretation require a court to prefer an interpretation that gives effect to all clauses within a contract. Therefore, the restrictive covenants continued to be in effect after defendant’s employment ended and the employment agreement was terminated. The court ordered that the defendant abide by the parameters found in the employment agreement’s restrictive covenants.  

Federal court rules require that a bond is posted when an injunction is ordered. This is to protect the financial interests of the party enjoined, especially if later proceedings determine they were wrongful enjoined from income producing activity. The court ordered the plaintiff to post a $350,000 bond based on loss revenue and lost customers to defendant’s new employer while awaiting trial. The new employer will only receive this money if defendant is found to be successful at trial.

Willbur-Ellis Co. v Erickson, No. 4:23-CV-04058-LLP (D.S.D. June 13, 2023). 

In 2018 Mr. Keenan received $70,966 from Rancho Santa Fe Association pursuant to a settlement agreement. Keenan was employed as a ranch manager by the company. The settlement agreement stated the payout was for “emotional stress damages” and continued to pay Keenan’s healthcare premiums. In return, Keenan dropped his employment discrimination lawsuit. The IRS audited Keenan’s tax return, arguing that the payment was taxable non-employee compensation. Keenan argued the payment should be characterized as “damages received on account of personal physical injuries or physical sickness” which under IRC § 104(a)(2) are excludable from income.  

When damages are received pursuant to a settlement agreement, the nature of the claim that was settled determines whether the proceeds are taxable. Even though the settlement agreement referenced emotional distress damages, the court found that the settlement payment was made to settle an employment dispute and was not payment that went towards medical care for emotional distress. The IRS’s determination was correct, and the payment was taxable income.

Keenan v. IRS, T.C. Memo 29299-21S (June 12, 2023).

Lawsuits alleging that paraquat exposure led to Parkinson’s disease are currently part of multi-district litigation being litigated in the Southern District of Illinois. In February 2022 the court dismissed public nuisance claims in 316 individual cases involved in the litigation. There have been over 150 more public nuisance claims brought since that time from around the nation against Syngenta and Chevron for their sale of paraquat. The defendants brought a motion to dismiss all public nuisance claims, in all pending cases involved in the multi-district litigation.  The court, attempting to balance judicial economy with the rights of each plaintiff, decided to analyze the public nuisance claim in one of the four trial selection cases.  The court dismissed the public nuisance claim in the trial selection case and deferred ruling on the public nuisance claims with regard to other plaintiffs.

The court analyzed public nuisance under Illinois law. A public nuisance claim in Illinois requires the plaintiff to have a “special injury” compared to “injury sustained by the general public.” The court found that the injury sustained by the plaintiff, specifically Parkinson’s disease, was not a different kind of injury compared to other farmers and rural residents who were exposed to Paraquat. Since the plaintiff could not show a special injury to himself associated to the Paraquat exposure, he does not have standing and his public nuisance claim was dismissed.  

On the issue of the remaining public nuisance claims for other plaintiffs, the court ordered Plaintiff’s leadership counsel to confer with the other plaintiffs and determine whether they will continue to pursue public nuisance claims.

In re Paraquat Products Liability Litigation, No. 3:21-md-3004-NJR (S.D. Ill. June 12, 2023).

A Washington marijuana grower brought a lawsuit against an Idaho corporation that fumigated potatoes on an adjacent parcel. The plaintiff alleged trespass, nuisance, and other related claims after the plaintiff's plants were seized by the State of Washington for having levels of chlorpropham (a herbicide) in excess of levels allowed by regulations. Plaintiff filed its lawsuit in Washington State Court. The defendant responded by removing the case to federal court using diversity jurisdiction. 

The Western District Court of Washington abstained from presiding over the lawsuit and remanded the case back to state court. The Court reasoned that a Buford abstention was appropriate. A Buford abstention occurs when federal review would intrude upon a state’s ability to create a comprehensive policy in a particular subject. Since the defendants planned to have the federal court dismiss the lawsuit based on the illegality of the plaintiff’s operations under federal law, having the federal court review the tort-based case would disrupt Washington’s ability to regulate its marijuana market and deny the plaintiff relief from legal harms they suffered.

Stirling Hort, LLC v Industrial Ventilation, Inc., No. C22-1155-JCC (W.D. Wash. June 7, 2023).   

An Oklahoma couple was audited by the IRS for filing a Schedule F in 2017 and 2018 that reported $128,990 and $133,929 in deductions, respectively. Several years earlier, the couple entered into a business arrangement in which the taxpayers would contribute financially to the wife’s mother’s ranch. The couple reported the expenses on their tax return while the cattle sales and income from ranching were reported on the mother’s tax return. The reported income listed on taxpayers’ Schedule F came primarily from the rodeo winnings of the taxpayers’ children, and was minimal in comparison to the expenses of the ranch. 

During the audit and before the tax court, the IRS argued that the Schedule F activity was not a business activity. They determined the activity reported on the Schedule F was rodeoing, not ranching. As a result, the IRS determined that all deductions on the Schedule F should be disallowed.

The tax court disagreed with the IRS. The tax court found that the deductions were associated with the ranching activities, and the IRS failed to directly challenge the profit motive of the ranching. Further, the IRS did not challenge the substantiation of expenses behind the Schedule F deductions. Therefore, the court held that the IRS waived their right to refocus the audit to only rodeo expenses. As a result, the court found that the Schedule F activities were correctly reported as “for profit” activities.

Carson v. Commissioner, T.C. Memo 23086-21S (May 18, 2023).

In 2004, the National Resources Conservation Service (NRCS) certified a small portion of a farmer’s property as a wetland. The farmer requested a review of the certification several times, most recently in 2017 and 2020. The NRCS denied both requests. The farmer brought suit claiming, among other things, that the NRCS violated the Administrative Procedure Act (APA) by denying his review requests. See 5 U.S.C. § 706(2)(A).

A farmer may request a review of a wetland certification “only if a natural event alters the topography or hydrology of the subject land . . . or if NRCS concurs with an affected person that an error exists in the current wetland determination.” 7 C.F.R. § 12.30(c)(6). The farmer did not argue that he complied with the regulation in 2017. For the 2020 request, the farmer did provide new information through an engineering report. However, when NRCS asked to provide evidence that the NRCS failed to consider specific information topographic information, the farmer failed to respond. As a result, the Eighth Circuit affirmed the grant of summary judgment in favor of the NRCS.

Foster v. Vilsack68 F.4th 37 (8th Cir. 2023).

Several non-profit organizations “dedicated to reforming industrial agriculture” through undercover investigations challenged Arkansas Code § 16-118-113. This law grants owners a civil remedy against those who knowingly access their property without authority. The plaintiffs claimed that the statute violated the First Amendment and sought an injunction preventing Peco Foods, Inc., a chicken farm the plaintiffs intended to investigate, from bringing an enforcement action under the law. On appeal, the Eighth Circuit found that the plaintiffs had Article III standing and remanded the case to the district court.

The district court granted the defendant’s Rule 12(b)(6) motion to dismiss. The First Amendment prohibits the government from restricting speech. It does not prohibit private parties from restricting speech. Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct. 1921, 1928 (2019). The district court concluded the Eighth Circuit’s Article III determination did not equate to state action. Additionally, the defendant had not filed an action to enforce the law. Because there is no state action, the First Amendment did not apply.

The case is Animal Legal Defense Fund v. Peco Foods Inc., 2023 WL 2743238 (E.D. Ark. March 31, 2023).

A “commercial vendor of agricultural data” requested farm numbers, tract numbers, and customer numbers from the USDA. The USDA assigns these numbers to administer its farm subsidy programs. The USDA refused to release this information under Exemptions 3 and 6 of the Freedom of Information Act (FOIA). 5 U.S.C. § 522(b)(3), (6). The ag tech company then brought this lawsuit challenging the USDA’s refusal. The USDA moved for summary judgment which the district court granted. The ag tech company appealed.

The USDA withheld the farm numbers and tract numbers under Exemption 3. This exemption applies to records “specifically exempted from disclosure” by a statute. The 2008 Farm Bill prohibited the USDA from disclosing “geospatial information…about agricultural land or operations….” 7 U.S.C. § 8791(b)(2).

The ag tech company argued that “geospatial information” does not include the farm and tract numbers. Geospatial is defined as “relating to information that identifies where particular features are on earth’s surface, such as oceans or mountains.” Geospatial, Cambridge Business English Dictionary (2011). In the same way, the USDA uses farm and tract numbers to identify the specific location of a farm. The court noted that the Eighth Circuit had also concluded that farm and tract numbers fell within § 8791(b)(2)(B). Cent. Platte Nat. Res. Dist. V. USDA, 643 F.3d 1142 (8th Cir. 2011).

The USDA withheld the customer numbers under Exemption 6 of FOIA. A federal agency is not required to release requested records if the records are “similar” to “personnel” or “medical” files and if their disclosure “would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C. § 552(b)(6). Because the customer numbers can be used to identify specific farm owners, the court concluded that they are “similar” files.

The court determined that releasing customer numbers would implicate a privacy interest because it would “allow for an inference to be drawn about the financial situation of an individual farmer.” If disclosure will harm a substantial privacy interest, the court must determine whether the privacy interest outweighs a significant public interest. Although there is a significant public interest in monitoring the USDA’s activity, § 8791 clearly shows the legislative intent to protect this information. Therefore, the D.C. Circuit Court of Appeals affirmed the grant of summary judgment in favor of the USDA.

Telematch v. USDA, 2022 WL 3330101 (D.C. Aug. 12, 2022).

Traditional dicamba herbicide is highly volatile and can easily damage non-targeted, non-tolerant crops. Before the EPA registered low volatility dicamba for certain over-the-top use, it was illegal to use dicamba during the growing season. 7 U.S.C. § 136j(a)(2)(G). Monsanto and BASF agreed to work together to develop a dicamba-resistant seed. Although the EPA had not approved a lower-volatility dicamba, Monsanto began selling a dicamba-tolerant cotton seed (Xtend) in 2015. Each bag of seed warned farmers that applying dicamba over the top of Xtend plants was illegal. The EPA approved Monsanto’s lower-volatility dicamba in 2016 and BASF’s in 2017.

Bader Farms, Inc. sued both companies for negligent design and failure to warn alleging that its peach trees were damaged by dicamba drift. A jury found in favor of Bader Farms and awarded $15 million in compensatory damages and $250 million in punitive damages. The district court reduced the punitive damages to $60 million and held both defendants jointly and severally liable. The district court also denied the defendants’ motion for a new trial.


On appeal, the defendants claimed that Bader failed to prove both cause in fact and proximate cause. They argued that Bader did not prove which company’s dicamba injured the trees and that misuse of the product by a third party was an intervening cause. The Eighth Circuit explained that the jury believed Xtend, not dicamba, caused Bader’s injury. Bader had argued that but-for the dicamba resistant seed, neighboring farmers would not have applied the herbicide.

The court also held that misuse by third-party farmers did not break the chain of proximate causation. Monsanto controlled the third-party farmers through growers’ licenses and technology-use terms. Additionally, the primary benefit of Xtend is its dicamba-resistance. Xtend consumers could only obtain this benefit by misusing dicamba.


The defendants also argued that the district court erred in instructing the jury to measure compensatory damages by lost profits rather than reduction in land value. The court stated that, under Missouri law, if a tree owner does not own the land, damages should not be measured by the loss of land value. Cooley v. Kansas City, P. & G.R. Co., 51 S.W. 101, 104 (1899). Here, Bader only owned the peach trees. The land was owned by an individual. Therefore, the court determined there was no error.

Punitive Damages

Lastly, the court considered whether the district court erred in holding Monsanto and BASF jointly and severally liable for punitive damages. Under Missouri law, unless the defendants had established a joint venture, they are only “liable for the percentage of punitive damages for which fault is attributed to such defendant by the trier of fact.” See Mo. St. § 537.067.2. The jury was only instructed to consider Monsanto’s liability for punitive damages. BASF was not mentioned.

The court found that Monsanto and BASF had not established a joint venture because BASF did not have equal control in the agreement to develop a dicamba-resistant seed. Additionally, there was sufficient evidence to establish “different degrees of culpability.” As a result, the Eighth Circuit vacated the $60 million punitive damage award and remanded the case for a new trial to determine punitive damages.

Hahn v. Monsanto Co., F.4th 954 (8th Cir. 2022).

In 2019, the USDA announced the optional New Swine Slaughter Inspection System (NSIS). Modernization of Swine Slaughter Inspection, 84 Fed. Reg. 52,300, 52,315 (Oct. 1, 2019). Among other things, the rule revoked maximum line speeds for swine slaughterhouses which opted into NSIS. The rule also ended the HACCP-Based Inspections Models program (HIMP) which granted line-speed waivers for some plants.

A group of labor unions at pork processing plants challenged the rule under the Administrative Procedure Act (APA). A federal district court held that the rule was arbitrary and capricious because it failed to consider worker safety. United Food and Comm. Workers Union, Local No. 663 v. USDA, 532 F.Supp.3d 741 (D. Minn. 2021). The district court only vacated the portion of the rule eliminating line speed limits. Two months later, three pork processing companies which had participated in HIMP moved to intervene and sought clarification that the district court’s order reinstated the prior HIMP waivers. The district court found the motion untimely and, thus, denied it. United Food and Comm. Workers Union, Local No. 663 v. USDA, 2021 WL 2010779 (D. Minn. May, 20, 2021). The companies appealed.

When assessing timeliness, the court will consider the litigation’s progression, the proposed intervener’s knowledge of the litigation, the reason for the delay, and any prejudice to the existing parties. Smith v. SEECO, Inc., 922 F.3d 398, 405 (8th Cir. 2019). The Eighth Circuit found that all four factors weighed in favor of denying the intervention. The litigation had concluded with the district court’s grant of summary judgment and the companies were well aware of the litigation as they had filed amicus briefs with the district court.  

The companies alleged that they had a “divergence of interests” with the USDA after the district court vacated the line speed limit portion of the rule. The court found this unpersuasive as the USDA, in defending the rule, never sought a return to the HIMP waiver system. Lastly, the court determined that allowing the companies to intervene would hinder the USDA’s ability to implement the remaining rule provisions and manage the national food system. Therefore, the Eight Circuit affirmed the denial of the companies’ motions to intervene.

United Food and Comm.. Workers Union, Local No. 663 v. USDA, 36 F.4th 777 (8th Cir. 2022).

Section 1005 of the American Rescue Plan Act (ARPA) authorizes the USDA to pay up to 120 percent of certain eligible loans balances to “socially disadvantaged farmers and ranchers” (SDFR). SDFR includes producers who are a member of socially disadvantaged groups such as “Black, American Indian/Alaskan Native, Hispanic, Asian, and Pacific Islander.” See 7 U.S.C. § 2279(a)(6).

A white farmer, who did not qualify for the SDFR designation, filed a class action lawsuit against the USDA claiming that the law violated the Civil Rights Act of 1964 and the U.S. Constitution. The district court certified the class and granted a preliminary injunction to enjoin the Secretary from administering § 1005. An advocate organization “of Black farmers, landowners, and cooperatives” filed a motion to intervene. The district court denied the motion and the advocate organization appealed. Miller v. Vilsack, 2021 WL 6129207 (N.D. Tex. Dec. 8, 2021).

To prevail on a motion to intervene as a matter of right, the applicant must show that their interest is inadequately represented by the existing parties to the suit. Fed. R. Civ. P. 24(a)(2). In this case, the court considered whether the advocate organization demonstrated that its interest diverged from the USDA’s “in a manner germane to the case.” See Texas v. U.S., 805 F.3d 653, 662 (5th Cir. 2015).

The court found that the two parties’ interests clearly diverged. Both the advocate organization and the USDA seek to uphold the constitutionality of § 1005. However, the advocate organization argued that the USDA continues to discriminate against minority farmers while the USDA argues that past USDA discrimination still has a lingering effect. Additionally, the advocate organization’s interest was germane to the case. Race-based governmental actions must be narrowly tailored to meet a compelling government interest. Here, evidence of continued discrimination may be crucial to proving a compelling government interest. Accordingly, the Fifth Circuit reversed the district court’s denial of intervention.

Miller v. Vilsack, 2022 WL 851782 (5th Cir. March 22, 2022).

A hotel owned the .49-acre wetland adjacent to it. The hotel applied for a permit under the Clean Water Act to fill the wetland claiming it intended to build a commercial building. See 33 U.S.C. §§ 1311(a), 1341(a)(1), 1344(a), (e). The hotel received a general permit from the Army Corps of Engineers for the construction of commercial buildings.

A member of an environmental non-profit sought declaratory judgment and the restoration of the wetland. She alleged that the hotel always intended to fill the wetland for landscape purposes; therefore, she claimed that the authorization was null and void because the hotel “intentionally and maliciously misled the Corps.” The hotel moved to dismiss the complaint. The district court granted the motion holding that the individual member did not have standing because she did not allege injury in fact. The member appealed to the Eleventh Circuit.

To have standing, a plaintiff must have suffered an injury due to the actions of the defendant. Here, the member claimed that she suffered an aesthetic injury. Such an injury occurs when a person who uses the affected area will experience diminished aesthetic value due to the challenged activity. Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc., 528 U.S. 167, 183 (2000). The member alleged she gained aesthetic pleasure from viewing the hotel’s wetland.

The court rejected the hotel’s argument that the member must have “actually visited” the wetland before it was filled. Even if the individual member never visited the wetland, the court found that she nevertheless experienced an injury in fact because she could no longer could enjoy viewing the wetland. Additionally, the individual member did not need to have physically occupied the wetland to have an aesthetic interest. While the plaintiff must have an interest in the specific area, the court noted the limitations of this requirement. Otherwise, a plaintiff must “step[] on the Old Faithful geyser at Yellowstone National Park to challenge its destruction.” Lastly, the court found it irrelevant that the wetland was private property. While the member had no right to occupy the wetland, she still had an aesthetic interest in it. Because the individual member sufficiently alleged injury, the court vacated the lower court’s dismissal.

The case is Glynn Env't Coal. v_Sea Island Acquisition LLC, 2022 WL 620284 (11th Cir. March 3, 2022).

In 2017 and 2018, the North Carolina General Assembly amended the state’s Right to Farm law in response to several nuisance lawsuits against pork producer Murphy-Brown. The lawsuits resulted in five large jury verdicts against the company. S.B. 711 created additional requirements a plaintiff must meet to bring a nuisance lawsuit while H.B. 467 provides limitations on the amount of compensatory and punitive damages a plaintiff can receive.

In June 2019, a group of nonprofits brought this lawsuit claiming that S.B. 711 and H.B. 467 violated the North Carolina Constitution’s Law of the Land Clause. The North Carolina Supreme Court has held this clause to be the equivalent of the Fourteenth Amendment Due Process Clause. State v. Collins, 84 S.E. 1049, 1050 (1915). After the superior court granted the defendants’ motion to dismiss under Rule 12(b)(6), the plaintiffs appealed.

Law of the Land Clause and Due Process Clause

To survive a due process challenge, the purpose of the law must be within the scope of police power, the law must be reasonably necessary to promote public good, and the interference with the landowner’s right to use his property must be reasonable. Here, the court found that promoting agricultural activities clearly falls within the state’s police powers. Additionally, both S.B. 711 and H.B. 467 promote the public good by reasonably limiting nuisance claims against agricultural operations. Any interference with the use and enjoyment of property is reasonable.

Right to Trial by Jury

The plaintiffs also claimed that H.B. 467 violated Article I, Section 25 of the North Carolina Constitution by limiting the plaintiffs’ right to a trial by jury. The court disagreed finding that H.B. 467 limited remedies and damages available to a plaintiff, but “did not impair nor abolish the right to a jury trial.”

The case is Rural Empowerment Association for Cmty. Help v. North Carolina, 2021 WL 6014722 (N.C. App. Dec. 21, 2021).

Two environmental organizations brought a lawsuit against a dairy farm under the Clean Water Act (CWA). Intending to build a concentrated animal feeding operation (CAFO) on the property, the dairy farm filled two ditches and installed drainage tiles. The plaintiffs allege that the dairy farm site consists of farmed wetlands and that, through the construction activities, the dairy farm violated the CWA. The CWA prohibits the “discharge of dredged or fill material” into waters of the United States. 33 U.S.C. § 1344(a). This includes farmed wetlands. The dairy farm moved to dismiss the lawsuit claiming that there were no wetlands on the property.

The dairy farm sits on a drained lakebed that has been used as farmland since the 1900s. The dairy farm asserts that the plaintiffs’ petition shows that the land is prior converted cropland. Unlike farmed wetland, prior converted cropland does not have hydrologic signs of wetlands and is not subject to CWA jurisdiction. 7 C.F.R. § 12.2. Farmed wetland includes land that was used to produce an agricultural commodity before December 23, 1985, and experiences inundation for at least 15 consecutive days or 10 percent of the growing season. The court found that the complaint alleged wetland factors including evidence of hydrophytic vegetation, hydric soil, and wetland hydrology. Additionally, the complaint alleged that these wetlands have a significant nexus to jurisdictional waters. Because of this, the court denied the motion to dismiss.

Hoosier En't Council v. Nat. Prairie Indiana Farmland Holdings, LLC, 2021 WL 4459509 (N.D. Ind. Sept. 29, 2021).

In this case, two environmental advocacy organizations allege that the U.S. Army Corps of Engineers (Corps) violated the Administrative Procedure Act (APA) by failing to adhere to technical guidance manuals when making a wetland determination. After filling and tiling drainage ditches, a dairy farm contacted the Corps to determine if the farmland and adjacent ditches were subject to the Clean Water Act (CWA). The Corps determined that, unlike the ditches, the farmland did not have signs of a wetland, but was a prior converted cropland not regulated by the CWA. 

Congress directs the Corps to use the Wetlands Delineation Manual to identify jurisdictional wetlands. The plaintiffs argue that the Corps did not rely on relevant factors set forth in the Wetlands Delineation Manual concerning an atypical situation. An atypical situation exists when there are significant alterations to one of the three wetland parameters. A significant alteration includes the construction of drainage systems.

If there is an atypical situation on farmland, the Wetlands Delineation Manual directs the Corps to assess whether the land could have wetland hydrology. The court found that the Corps did not follow the required technical guidance. For example, it did not consider the relevant factors listed in the guidance manuals to determine the hydrology of the land before the alterations or the impact of the dairy farm’s alterations. Additionally, there was no sufficient reason why the Corps deviated from its own guidance. The court held that the Corps determination was arbitrary and capricious and remanded the case for further consideration of the Corps jurisdiction over the farmland.

Hoosier Env't Council v. Nat. Prairie Indiana Farmland Holdings LLC, 2021 WL 4477152 (N.D. Ind. Sept. 29, 2021).

In 2016, the Ranchers-Cattlemen Action Legal Fund (R-CALF) brought a lawsuit against the USDA for allowing mandatory assessments from the Beef Checkoff program to fund Qualified State Beef Councils’ (QSBCs) promotional activities. In response the USDA began to enter into memoranda of understandings (MOUs) with the QSBCs. These MOUs granted the USDA pre-approval authority over “any and all promotion, advertising, research, and consumer information plans and projects.” On July 27, 2021, the Ninth Circuit held that the USDA “effectively controlled” the advertising and, therefore, the Beef Checkoff program did not violate the First Amendment.

In this current lawsuit, R-CALF claims that the USDA violated the Administrative Procedure Act (APA) by entering into MOUs rather than engaging in formal notice-and-comment rulemaking. See 5 U.S.C. § 553. Because of this, R-CALF alleged that its members would suffer financial injury as the Beef Checkoff funds will go towards speech which threatens the livelihoods of independent, domestic ranchers. The USDA filed a motion to dismiss, claiming that R-CALF lacked standing because it did not identify a specific member who was injured by the MOUs.

Although R-CALF did not identify specific members who had standing to sue in their own right, the district court found that the organization did provide general allegations that its members, “independent, domestic producers,” would be harmed by QSBC advertising “promot[ing] corporate consolidation in the beef industry.” Additionally, R-CALF sufficiently alleged causation to survive the motion to dismiss. R-CALF claimed that if its members had the opportunity to participate in the rulemaking process, the MOUs may have contained more favorable provisions or even a complete prohibition of using checkoff funds for speech. Therefore, the court denied the motion to dismiss, but with the disclaimer that R-CALF must next prove actual members have suffered harm due to the MOUs.

R-CALF v. USDA, 2021 WL 442723 (D.D.C. Sept. 29, 2021). 

Two plaintiffs brought this Clean Water Act (CWA) citizen’s suit against their neighbors who owned 191 acres of agricultural land. The defendants had installed drainage tile several times in recent years, most recently in 2014. The defendants did not obtain a CWA section 404 permit to discharge dredged materials into a navigable water. In 2015, after a heavy rain, the plaintiffs’ property began to experience unprecedented flooding that destroyed their home and other property. The plaintiffs claimed in their citizen’s suit that the previous tiling activity was an unauthorized discharge of a pollutant in violation of Sections 301 and 404 of the CWA. The defendants moved for summary judgment, asserting that the plaintiffs sought to impose liability for a “wholly past violation.”

To have standing in a citizen suit, the proponent must prove that the alleged violation is continuous or intermittent, but still ongoing. Tamaska v. City of Bluff City, Tenn., 26 F. App'x 482, 485 (6th Cir. 2002). Here, there was insufficient evidence that there was either a continuing discharge of a pollutant or a likelihood of a continuing discharge of a pollutant when the plaintiffs filed this lawsuit in 2018. The defendants had not conducted any tiling activities since the lawsuit was filed, nor was there evidence that they intended to do so.

Additionally, any ongoing discharge from the drainage system only consisted of water. While that may be causing flooding on the plaintiffs’ property, water is not a pollutant. Therefore, the plaintiffs asserted a wholly past violation and their “remedy, if any, [was] not grounded in the Clean Water Act in federal court.” See Bettis v. Town of Ontario, N.Y., 800 F. Supp. 1113, 1120 (W.D.N.Y. 1992). The court declined to exercise supplemental jurisdiction over the plaintiffs’ remaining nuisance and negligence claims and granted the defendants’ motion for summary judgment.

The case is Ward v. Stucke, 2021 WL 4033166 (S.D. Ohio, Sept. 3, 2021).

In 2016, the Ranchers-Cattlemen Action Legal Fund (R-CALF) challenged the beef checkoff program, claiming it violated the First Amendment by compelling producers to subsidize private speech through funding of Qualified State Beef Councils’ (QSBCs) promotional activities. While the litigation made its way through the courts, the USDA began to enter into memoranda of understanding (MOUs) with QSBCs, granting the USDA pre-approval authority over “any and all promotion, advertising, research, and consumer information plans and projects.”

In 2018, the Ninth Circuit affirmed R-CALF’s request for a preliminary injunction to prevent a QSBC from using the checkoff to fund advertising campaigns. On remand, the District of Montana found that the recently executed MOUs effectively controlled the QSBCs advertising and therefore constituted government speech immune from First Amendment scrutiny. R-CALF v. Perdue, 449 F.Supp.3d 944 (D. Mont. 2020). R-CALF appealed.

If speech is “effectively controlled” by the government, it is government speech not subject to First Amendment scrutiny. Johanns v. Livestock Marketing Ass’n, 544 U.S. 550, 559-60 (2005). In this case, R-CALF asserted that the advertising generated by hired third parties constituted private speech. The Ninth Circuit disagreed and held that the MOUs gave the USDA the authority to control the content of the advertising by requiring pre-approval of any and all advertising or contracts entered into by the QSCBs. Under the MOUs, the USDA had final authority over the promotional campaign as it may decertify a noncompliant QSCB. Thus, the court affirmed that promotional activities subject to pre-approval are government speech.

R-CALF v. Vilsack, 2021 WL 3161201 (9th Cir. July 27, 2021).

Section 1005 of the American Rescue Plan Act (ARPA) authorizes the USDA to pay up to 120 percent of certain eligible loans balances to “socially disadvantaged farmers and ranchers” (SDFR). SDFR includes producers who are a member of socially disadvantaged groups such as “Black, American Indian/Alaskan Native, Hispanic, Asian, and Pacific Islander.” See 7 U.S.C. § 2279(a)(6). A Caucasian farmer from Florida brought this lawsuit claiming that Section 1005 of the ARPA violated both the equal protection component of U.S. Const. amend. V’s Due Process clause and that it should thus be prohibited by the Administrative Procedure Act (APA). The plaintiff petitioned the court for a preliminary injunction.

To obtain a preliminary injunction, the proponent, among other factors, must show that he is likely to succeed on the merits. The plaintiff in this case must prove Section 1005 is unconstitutional. Race-based governmental actions are subject to strict scrutiny review and must be narrowly tailored to meet a compelling government interest. The court will consider factors such as the necessity of relief and effectiveness of alternative remedies; the flexibility of the relief or availability of waiver provisions; and whether the law is over-inclusive or under-inclusive. While remedying past government discrimination is usually a compelling interest, the solution must attempt to remedy a past wrong.

Here, the court held that the law was not narrowly tailored. Neither party contests the USDA’s past discrimination against SDFRs which resulted in lower approval rates among minority farmers or loans with less favorable terms. However, Section 1005 only benefits SDFRs who actually received an eligible USDA loan. Additionally, there was no evidence that Congress attempted to first consider race-neutral alternative remedies.

While the defendant argued that Section 1005 is narrowly tailored to quickly provide monetary assistance to producers near foreclosure, the court disagreed, finding it to be inflexible. Section 1005 does not base qualification upon profitability—or the lack thereof—but only on race. Similarly, it did not provide a waiver provision for a non-SDFR to qualify.

Next, the court held that Section 1005 is both over-inclusive and under-inclusive. It does not require a past showing of USDA discrimination, which is the past wrong Congress intended to remedy. It also provided relief to certain groups for which there was little evidence of USDA farm loan discrimination. Alternatively, the court found Section 1005 was under-inclusive because it failed to provide relief for producers who specifically experienced USDA discrimination. Therefore, the court found that the plaintiff was likely to succeed on the merits of the case and granted the motion for a preliminary injunction.

Wynn v. Vilsack, 2021 WL 2580678 (M.D. Fla. June 23, 2021).