May 2016

Breaking: U.S. Supreme Court Sides with Landowners in Key Clean Water Act Case

The United States Supreme Court unanimously ruled today that an approved jurisdictional determination from the U.S. Army Corps of Engineers stating that property contains “waters of the United States” is “final agency action” subject to judicial review. This is a big victory for landowners throughout the country.

As we’ve written previously, the landowners in this case purchased wetlands in northern Minnesota, seeking to mine them for peat moss used to improve golf courses. The landowners initially sought a Section 404 permit from the Corps. The Corps, however, strongly discouraged the landowners from pursuing the permit or the project, telling them that the process would be very costly, would require much additional study and data, and would likely not yield a permit in the end. The Corps eventually issued an approved jurisdictional determination (JD), stating that the landowners’ wetland was a “water of the United States” because of its “significant nexus” to the Red River, which was 120 miles away. The landowners sought judicial review of the JD, but the district court ruled that the JD was not “final agency action” subject to review. The Corps had argued, and the district court agreed, that the landowners had continuing rights. They could move forward with their permit application or launch their dredge and fill operation and see if the Corps took administrative action against them. If the permit was denied or if the agency took enforcement action, the landowners could then challenge what would only then be the “final agency action.”

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Iowa Supreme Court Issues Much-Anticipated Ag Supply Dealer Lien Answers

A federal bankruptcy case has been shaping interpretation of the Iowa agricultural supply dealer lien statute since the operator of a farrow-to-finish hog facility declared bankruptcy in 2009.

On May 27, 2016, the Iowa Supreme Court issued its second opinion in this case, answering two key certified questions in this drawn out litigation. The answers to the two certified questions—which uphold the decision from the bankruptcy court--further refine the contours of the ag supply dealer lien established by Iowa Code chapter 570A. They also bring welcome certainty to a sometimes muddled area of the law.

While the questions are not simple, the facts are. The debtor’s hogs were sold, and the proceeds were insufficient to satisfy the liens of both the feed supplier that extended credit to the debtor for the purchase of feed, and the bank, which had a preexisting perfected security interest in the hogs. $342,371.78 remains in escrow pending resolution of the parties’ competing claims.

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Evaluating a Wind Energy Agreement: A Brief Review

We’ve recently received a number of inquiries regarding wind energy agreements. This article, while not offering legal advice, is intended to inform landowners as to some of the key legal issues they should consider when evaluating a wind energy agreement proposed by a developer.

According to the American Wind Energy Association, more than 31 percent of Iowa’s in-state electricity generation came from wind in 2015. The Iowa Utilities Board has reported that this is the first time that wind has ever supplied a state with more than 30 percent of its yearly electricity. Sustaining this increase in wind energy output is an increase in wind farm development. When wind farm developers approach landowners about constructing wind turbines on their property, many are left with many questions. Landowners are encouraged to consult with legal counsel and their tax advisors regarding the implications of the agreement they are evaluating. Following are some important considerations.

The backbone of any wind farm is the wind energy agreement. Every landowner who sells an easement or leases property to a developer does so pursuant to a detailed contract drafted by the developer. It is important that landowners fully understand the rights and obligations detailed in these contracts before signing them. With many of these agreements dictating land usage for the next 50 years or so, it is well worth the expense of hiring an attorney experienced in these matters to review the paperwork before signing. Given the voluntary nature of these projects to date, there may not be a lot of room for negotiation. Even so, landowners should not be afraid to ask for terms that better meet their needs. And landowners should not hesitate to walk away from negotiations if they are not comfortable with the terms offered. Because these contracts often contain a confidentiality clause, landowners usually don’t know the terms of their neighbors’ agreements. As such, it is sometimes difficult to evaluate the fairness of a financial offer.

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