January 27, 2005: With all due respect to David Letterman
and everyone who does year-end Top Ten lists, here are our top ten
United States agricultural law cases for 2004. There are no set
criteria for the list except importance for family farmers. Links
to the decisions can be found at www.flaginc.org.
Supplies in the Cattle Industry
Pickett v. Tyson Fresh Meats, 315 F. Supp. 1172 (U.S. District
for the Middle District of Alabama April 23, 2004). A jury found
that Tyson violated the federal Packers and Stockyards Act through
its use of captive supply contracts in purchasing cattle and awarded
cattle farmers and ranchers up to $1.28 billion in damages. Then
federal Judge Lyle Strom overturned that verdict, ruling that the
evidence was insufficient to support it. The cattle farmers and
ranchers appealed to the Eleventh Circuit Court of Appeals. Oral
argument was heard on December 17, 2004, and the appeals court decision
is expected in 2005.
2. Mad Cow Disease
and USDA Rulemaking
R-CALF v. USDA, No.
CV-04-51-BLG-RFC (U.S. District Court for the District of Montana
April 26, 2004).
On April 22, 2004, R-CALF filed a motion for a temporary restraining
order to prohibit USDA from lifting a ban on importation from Canada
of beef and other bovine tissue for human consumption. The ban was
in place due to the discovery of bovine spongiform encephalopathy
(BSE) or “Mad Cow Disease” in a Canadian born cow in
Alberta, Canada. USDA, without using the notice-and-comment rulemaking
process, had issued a memorandum that would have allowed Canadian
beef to once again be imported into the United States. Federal Judge
Richard Cebull granted R-CALF’s motion stopping USDA from
reopening the U.S.-Canada border to imports of Canadian beef. In
May 2004, the parties reached an agreement that allowed USDA to
engage in rulemaking on reopening the border to Canadian beef. Editor's
Note: The USDA announced it will reopen the border to Canadian beef
in March after ruling the nation was a 'minimal risk region for
BSE.' Two additional mad cows were later detected but the order
to reopen the border still stands.
3. First Amendment
Challenges to Commodity Checkoff Programs
Cochran v. Veneman, 359 F.3d 263 (Third
Circuit Court of Appeals February 24, 2004).
2004 saw a lot of action over the constitutionality of mandatory
checkoff programs. In the
Cochran case, two Pennsylvania dairy farmers successfully challenged
the entire Dairy
Checkoff Program. The district court held that the dairy checkoff
was constitutional, finding
that the dairy industry is as heavily regulated as the California
tree fruit industry whose
marketing order was held constitutional in a 1997 Supreme Court
ruling. The Third Circuit
reversed the district court. The court concluded that the tree fruit
decision was not
applicable because the dairy checkoff is a stand-alone program not
connected with the
federal milk marketing order system or other dairy industry regulatory
Cochran case is being held by the U.S. Supreme Court pending its
decision in the Beef
Checkoff challenge, Veneman v. Livestock Marketing Association,
335 F.3d 711 (Eighth
Circuit Court of Appeals July 8, 2003). Also being held pending
the Supreme Court’s
decision in LMA are challenges to the Pork Checkoff Program, Veneman
v. Campaign for
Family Farms, 348 F.3d 157 (Sixth Circuit Court of Appeals October
22, 2003) and the
Louisiana alligator checkoff, Pelts & Skins v. Landreneau, 365
F. 3d 423 (Fifth Circuit
Court of Appeals April 2, 2004).
4. Feedlot Regulation
Gacke v. Pork Xtra, L.L.C., 684 N.W.2d
168 (Iowa Supreme Court June 16, 2004) and
Worth County Friends of Agriculture v. Worth County, 688 N.W.2d
257 (Iowa Supreme
Court October 6, 2004).
These two Iowa Supreme Court cases dealt with the conflict between
large feedlots and government regulation. In Gacke, the Iowa Supreme
Court struck down Iowa’s right-to-farm law that barred nuisance
lawsuits against feedlot owners. The court ruled the law violated
Iowa’s Constitution because the bar on nuisance claims could
allow feedlot owners to take other landowners’ private property
without just compensation. In Worth County, the Iowa Supreme Court
struck down a county ordinance that attempted to regulate large
feedlots. The court ruled that because the Iowa Legislature had
enacted a statute regulating feedlots at the state level, that statute
preempted the county ordinance.
The issue of feedlot regulation will likely continue to be contested
in courts and legislatures across the country.
5. Corporate Farming
Smithfield Foods v. Miller, 367 F.3d
1061 (Eighth Circuit Court of Appeals May 21, 2004).
In 2003, the Eighth Circuit struck down an anti-corporate farming
amendment to the South Dakota Constitution—so-called “Amendment
E”—because it was held to violate the dormant Commerce
Clause of the U.S. Constitution. This put other states’ corporate
farming restrictions in question. In this case, Smithfield Foods
challenged Iowa’s law banning packer ownership of livestock.
Smithfield challenged the law under the dormant Commerce Clause
of the U.S. Constitution and won at the district court. After the
district court’s ruling, however, the Iowa Legislature amended
Iowa’s law. The Eighth Circuit decided the district court
should take another look at the law in light of the legislative
changes and sent the case back to the district court. A trial is
expected to begin in early 2005.
6. Discrimination in USDA Programs
Garcia v. Veneman, 224 F.R.D. 8 (U.S.
District Court for the District of Columbia September 10, 2004)
and Love v. Veneman, 224 F.R.D. 240 (U.S. District Court for the
District of Columbia September 29, 2004).
These two cases were brought against USDA for discrimination in
USDA programs. Garcia was brought on behalf of a class of Hispanic
farmers. The district court denied the Hispanic farmers’ class
certification motion because the court believed each individual
farmer had different disputes with USDA, and therefore the farmers
could not satisfy the commonality requirement for certification.
In Love, a case brought on behalf of women farmers claiming discrimination
on the basis of gender, the same district court denied the women
farmers’ motion for class certification on the same grounds.
The D.C. Circuit Court of Appeals has granted a motion to review
the class certification issue in the Love case.
7. Seed Saving Penalties
Monsanto Co. v. McFarling, 363 F.3d
1336 (Federal Circuit Court of Appeals April 9,
The Federal Court of Appeals upheld a finding that a farmer violated
his 1998 Technology Agreement with Monsanto by saving seed, but
held that because the remedies provisions in the Agreement were
“invalid and unenforceable under Missouri law,” the
$780,000 judgment against the farmer must be vacated. The court
reasoned that Monsanto’s liquidated damages clause requiring
farmers to pay 120 times the applicable technology fee for each
bag of seed purchased was not a reasonable estimate of the financial
harm Monsanto suffered when the farmer saved seed. Monsanto removed
this portion of the remedies clause from its 2005 Technology Agreement.
8. Deceptive Herbicide
Pricing and Marketing
Peterson v. BASF Corp., 675 N.W.2d
57 (Minnesota Supreme Court February 19, 2004).
The Minnesota Supreme Court unanimously affirmed a jury verdict
and entry of a $52 million judgment for a nationwide class of farmers
of minor crops who claimed that BASF’s herbicide marketing
and pricing schemes were deceptive. BASF filed a petition for the
U.S. Supreme Court to review the case, which is apparently being
held pending that Court’s decision in Bates v. Dow Agrosciences,
332 F.3d 323 (Fifth Circuit Court of Appeals June 11, 2003). The
Bates case concerns whether state law product liability claims
against a herbicide manufacturer are preempted by the Federal Insecticide,
Fungicide and Rodenticide Act and will be heard by the U.S. Supreme
Court in January 2005. It is expected that the Peterson case will
finally be decided by the end of 2005, nearly eight years after
it was filed.
9. Binding Arbitration in Production Contracts
Tyson v. Archer, 147 S.W.3d 681 (Arkansas
Supreme Court February 19, 2004).
The Arkansas Supreme Court ruled that the binding arbitration clause
in a Tyson hog production contract was not enforceable because the
contract did not impose mutual obligations on Tyson and the farmer.
The issue arose when Tyson suddenly terminated contracts of more
than 100 hog farmers. The hog farmers sued for compensatory and
punitive damages alleging that they incurred substantial debt to
build commercial hog farms that were rendered useless without a
contract. Tyson had contended that the contract the hog farmers
had signed required disputes to be resolved through binding arbitration
instead of litigation. The court found that the contract was unenforceable
because the farmers’ only remedy was to use arbitration, but
Tyson could pursue litigation if it chose to. State and federal
legislation has been introduced to address problems with binding
arbitration provisions in agricultural contracts.
10. Termination of Peanut Production Quotas
Members of the Peanut Quota Holders
Association v. United States, 60 Fed. Cl. 524
(United States Court of Claims April 30, 2004).
A group of peanut farmers who held peanut production quotas that
were terminated by the 2002 Farm Bill sued for compensation under
the Takings Clause of the Fifth Amendment of the U.S. Constitution.
The court held that the peanut quota system was created by Congress
and Congress has the right to modify or terminate a federal program.
Accordingly, the court found that no benefit from such a program
would constitute a property interest protected by the Fifth Amendment,
and it dismissed the peanut farmers’ claims. For the first
time since 1938, peanut farmers are without a production quota safety
Cases to Watch in 2005
There are a number of cases farmers should keep in an eye on in
2005. The U.S. Supreme Court will issue at least four decisions
that will be important to farmers. In Veneman v. Livestock Marketing
Association, the Court will decide whether the federal beef checkoff
violates the First Amendment of the U.S. Constitution. In Bates
v. Dow Agrosciences, the Court will decide whether state law claims
based on defective pesticides are preempted by the Federal Insecticide,
Fungicide and Rodenticide Act. In Kelo v. City of New London, the
Court will decide whether government has the power to condemn or
take private property for private redevelopment uses. And in Orff
v. United States, the Court will decide whether farmers have the
right to sue the federal government over breach of water rights
contracts. In addition, the First Circuit Court of Appeals in Harvey
v. Veneman will decide an organic farmer’s challenge to rules
implementing the Organic Foods Production Act of 1990. There may
also be a decision in Been v. OK Industries, a case involving the
cancellation of more than 400 Oklahoma poultry growers’ contracts.
The trial in that case is scheduled to begin in Oklahoma state court
in March 2005.
FLAG will continue to follow these cases and other legal developments
that concern family
David R. Moeller is a FLAG Staff Attorney and Susan E. Stokes
is FLAG’s Legal Director. FLAG is
dedicated to providing legal services to family farmers and their
rural communities in order to help keep family farmers on the land.
for more information.