Agricultural Law Weekly Review—April 28, 2016

Written by M. Sean High – Staff Attorney

The following information is an update of recent, local, state, national, and international legal developments relevant to agriculture:

Litigation: Court Rejects Contract Grower Claims against Pilgrim’s Pride

On April 22, 2016, the United States District Court, E.D. Texas, Marshall Division granted summary judgement and dismissed claims brought by more than 200 poultry growers alleging that Pilgrim’s Pride Corporation (PPC) violated the Packers and Stockyards Act (PSA) by closing two processing facilities (Sheila Adams, et al, v. Pilgrim’s Pride Corp., 2016 WL 1615700).  The court disagreed with the poultry growers’ assertion that PPC’s facility closures had violated PSA through an attempt to increase prices by keeping as much chicken off the market as possible.

GMO Ingredients: Court Permits Chipotle Advertisement Lawsuit to Move Forward

On April 20, 2016, the United States District Court Southern District of Florida ruled that a class action lawsuit, alleging that Chipotle Mexican Grill, Inc. (Chipotle) “misrepresented to customers that its food products contain only non-GMO products,” may proceed (Reilly v. Chipotle Mexican Grill, Inc., Case No. 15-Civ-23425-COOKE-TORRES).  Specifically, the court stated that the plaintiffs are permitted to proceed with their “allegation that Chipotle’s ‘Non-GMO’ claims ‘mislead consumers into paying a premium price…for inferior products or undesirable ingredients or for products that contain ingredients that are not disclosed.”

Equine Disease: PDA Quarantines Barn after Horse Tests Positive for Equine Infections Anemia

On April 20, 2016, the Pennsylvania Department of Agriculture (PDA) issued a press release announcing the quarantine “of an equine barn in Halifax, Dauphin County, after a horse at the barn tested positive for Equine Infectious Anemia (EIA) on Monday, April 18.”  According to PDA, both the barn and the horses will be quarantined for at least 60 days.  PDA further stated that EIA poses no health threat to humans and that “[t]he quarantine can be lifted after the remaining horses are determined not to be infected.”

Contract Review: USDA to Continue Payments for Pork Trademarks

On April 20, 2016, the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) announced that the agency “has completed its review of the 2006 asset purchase agreement between the National Pork Board and the National Pork Producers Council (NPPC) for the purchase of four trademarks…[which] include the word ‘pork’ in distinctive lettering set against a pork loin silhouette and ‘The Other White Meat’ in various forms.”  According to USDA, “[a]s a result [of the review], AMS is approving continuing annual payments of $3 million under the terms of the agreement.”

Department Structure: PDA Announces Reorganization

On April 23, 2016, the Pennsylvania Department of Agriculture (PDA) published notice in the Pennsylvania Bulletin that “[t]he Executive Board approved a reorganization of the Department of Agriculture effective April 4, 2016” (46 Pa.B. 20165).  Of note, “at the request of the Joint Committee on Documents under 1 Pa. Code § 3.1(a)(9) (relating to contents of Code)” PDA’s reorganization is published through the use of an organizational chart.   

Regulation: USDA Proposes Amendment to Voluntary Grading of Shell Eggs

On April 20, 2016, the United States Department of Agriculture Agricultural Marketing Service published notice in the Federal Register that the agency was “propos[ing] to amend the Regulations Governing the Voluntary Grading of Shell Eggs to clarify the definition of ‘condition’ and revise the prerequisite requirement for shell eggs eligible for voluntary USDA grading and certification” (81 FR 23188).  The comment period for the proposed rule closes June 20, 2016.

Chesapeake Bay Update: Pennsylvania Announces New Plan to meet Chesapeake Bay Requirements

Written by M. Sean High – Staff Attorney

On January 21, 2016, the Pennsylvania Department of Agriculture (PDA) issued a press release announcing a new strategy, “developed jointly by the Pennsylvania Departments of Agriculture, Conservation and Natural Resources (DCNR), and Environmental Protection (DEP),” to enable Pennsylvania to achieve federal Chesapeake Bay requirements.

According to the press release, the newly developed strategy stems from the commonwealth receiving “immense pressure from the federal Environmental Protection Agency (EPA) to improve water quality,” resulting from Pennsylvania’s inability to meet EPA “requirements to reduce water pollution under the requirements of federal court orders and regulations.”

According to the new strategy, titled A DEP Strategy to Enhance Pennsylvania’s Chesapeake Bay Restoration Effort, Pennsylvania’s inability to meet established EPA reduction goals has caused EPA to: 1) “withhold $2,896,723 in federal funding for Chesapeake Bay-related activities and grants”; and 2) identify potential targets, under federal authority, “to address the Pennsylvania Bay restoration shortfalls.”

According to the new strategy, Pennsylvania has not been compliant with EPA regulations regarding pollution reduction due to: 1) lack of farm inspection, documentation, and verification of pollution reduction activities; and 2) improper funding.  To correct these short comings, the new strategy proposes the following six recommendations:

1.      Establish a Chesapeake Bay Office within DEP to coordinate and implement Chesapeake Bay efforts and requirements.

2.      DEP and Conservation District staff should annually inspect 10% of all Pennsylvania farms in the Chesapeake Bay watershed (an increase from the current 1.8% annual inspection rate).

3.      Improve reporting, record keeping, and data systems (with the possibility of mandatory reporting requirements).

4.      Shift $1,250,000 of state water quality funding to Best Management Practices (BMP) programs and document the use of all BMPs (especially those previously unreported).

5.      Obtain additional sources of funding to assist in improving water quality and meeting federal Chesapeake Bay requirements.

6.      Identify any program, regulatory, or legislative changes that will allow Pennsylvania to achieve federal reduction goals by 2025. 

Raw Milk Update: Texas Jury Rules Raw Milk Sale Illegal

Written by M. Sean High – Staff Attorney

On December 16, 2015, the Farm-to-Consumer Legal Defense Fund (FTCLDF) reported that its client, Texas dairy farmer Eldon Hooley, had lost his jury trial regarding the sale of raw milk. 

According to FTCLDF, raw milk produced on Hooley’s dairy farm (located within the city of Grandview, Texas), transported by a van owned by Hooley, was seized by law enforcement officials at an off-farm customer drop-site located within the Fort Worth, Texas city limits.  At the time of the seizure, Hooley’s state license to sell raw milk was under suspension after his raw milk had previously tested positive for the bacteria Yersinia.  

Though Hooley’s dairy farm was not located within the Fort Worth city limits, prosecutors argued that under the Fort Worth city code regulating food establishments: 1) Hooley’s van met the classification of food establishment; and 2) because Hooley’s raw milk license was under suspension, the raw milk sales were illegal.  According to FTCLDF, the jury agreed with the city prosecutors and determined that Hooley should pay $1,500 in fines plus $67 for court costs.  

Similarly, in Pennsylvania, state law makes it illegal to sell raw milk for human consumption without a permit issued by the Pennsylvania Department of Agriculture (PDA).  Accordingly, raw milk sales must remain “in compliance with the testing and documentation requirements of the Milk Sanitation Law, and any other applicable statute or regulation.” Furthermore, any raw milk used in the manufacturing of aged cheese can only be sold if PDA specifically issues a permit for the sale of aged cheese produced from raw milk.  Importantly, PDA is empowered to file summary criminal prosecutions for any raw milk permitting violation.

In Pennsylvania, if a dairy farmer continues to sell raw milk after their raw milk permit has been revoked or suspended, PDA may “[a]pprise the Department of Health and any local health department having jurisdiction of the situation, and recommend these entities take lawful action to ensure that sales of raw milk cease.”  Additionally, PDA may ask the Pennsylvania Office of Attorney General to: 1) seek an injunction to prevent raw milk sales; and 2) seek fines and/or imprisonment if an injunction is violated.  Relevant to Hooley’s transportation of raw milk via his van, Pennsylvania state law defines raw milk sales broadly to include “the selling, exchanging, delivering or having in possession, care, control or custody with intent to sell, exchange, or deliver or to offer or to expose for sale.” 

On a related side-note, under Pennsylvania’s raw milk law, “[w]henever, in the opinion of the [PDA] Secretary, a given supply of raw milk or raw milk products is considered unsafe or a menace to public health, the Secretary may seize, condemn, denature or destroy the milk or milk products, without compensation to the owner of the milk or milk products.”   

PDA Issues Correction to Clean and Green

Written by M. Sean High

On August 22, 2015, the Pennsylvania Department of Agriculture (PDA) issued a corrective amendment to the Pennsylvania Code to remedy § 137b.24 of the Preferential Assessment of Farmland and Forest Land under the Clean and Green Act.  The corrective amendment, published in the Pennsylvania Bulletin Volume 45, number34, stated that PDA had “discovered a discrepancy between the agency text of 7 Pa. Code § 137b.24 (relating to ineligible land)…and the official text as published at 31 Pa.B. 1701 (March 31, 2001)…” 

According to the official text published in 31 Pa.B.1701, the first sentence of the Pennsylvania Code under “ineligible land” should have stated: “A landowner seeking preferential assessment under the act shall include ineligible land on the application if the ineligible land is part of a larger contiguous tract of eligible land, and the use of the land which causes it to be ineligible exists at the time the application is filed.” (Emphasis added).  Instead, the first sentence of 7 Pa. Code § 137b.24 “Ineligible land” had stated: “A landowner seeking preferential assessment under the act shall include ineligible land on the application if the eligible land is part of a larger contiguous tract of eligible land, and the use of the land which causes it to be ineligible exists at the time the application is filed.” (Emphasis added).  The corrective amendment to Pennsylvania Code § 137b.24 now properly reflects the official text published in 31 Pa.B. 1701.

The corrective amendment to Pennsylvania Code § 137b.24 became effective upon the August 22, 2015 publication in the Pennsylvania Bulletin. 

PDA Enacts Quarantine Order to Reduce Spread of Avian Influenza

  On June 20, 2015, the Pennsylvania Department of Agriculture (PDA) published notice in the Pennsylvania Bulletin regarding the establishment of an interstate Quarantine Order for all live bird markets and breaker eggs shipped interstate to Pennsylvania.  The order became effective upon publication. 

  Enacted to reduce the potential exposure of Pennsylvania poultry to highly pathogenic avian influenza, the interstate Quarantine Order applies to “live bird markets,” defined as markets that sell live birds for consumers or sell live birds and slaughter them on-premises for customers, and “breaker eggs,” defined as eggs that are cracked and sold in liquid form to be used by wholesale bakers and restaurants.  According to the order, poultry and breaker eggs that originate from states where Highly Pathogenic Avian Influenza has been detected are not allowed into the Commonwealth unless the products are properly tested and documented.

  In a press release issued by PDA, Secretary of Agriculture Russell Redding stated, “As avian influenza continues to spread eastward, we have increased our monitoring and protocols to safeguard the state’s $13 billion poultry industry.” Additionally, Secretary Redding noted, “[w]ith this order, Pennsylvania’s biosecurity efforts are strengthened without impeding commerce.”

Currently, avian influenza has been confirmed in twenty states.  

Written by Katharine Richter - Research Assistant

June 22, 2015