ag law update

Cosponsored by the Agricultural Law Section

Thursday, May 27, 2021 Noon–1 p.m.

1 General CLE credit (ID 78313)

Ag Law Update

iiAg Law Update

AG LAW UPDATE

SECTION PLANNERS

Sally Anderson Hansell, Anderson Hansell PC, HermistonChelsea Glynn, Dunn Carney LLP, Portland

Tate Justesen, Western Resources Legal Center, PortlandRebecca Knapp, Knapp Law Office PC, EnterpriseSarah Liljefelt, Schroeder Law Offices PC, Portland

Jeffrey Misley, Sussman Shank LLP, PortlandJudith Parker, The Winemakers’ Lawyer, Portland

Cassie Peters, Attorney at Law, Eugene

OREGON STATE BAR AGRICULTURAL LAW SECTION EXECUTIVE COMMITTEE

Chelsea Glynn, ChairMary Anne Cooper, Chair-Elect

Jeffrey C. Misley, Past ChairKathryn A. Peters, Treasurer

Sally Anderson Hansell, SecretaryJohn B. Rocky Dallum

Molly Tucker HasenbankTate F. Justesen

Rebecca J. KnappSarah R. Liljefelt

Nellie Lisbeth McAdamsJudith A. Parker

The materials and forms in this manual are published by the Oregon State Bar exclusively for the use of attorneys. Neither the Oregon State Bar nor the contributors make either express or implied warranties in regard to the use of the materials and/or forms. Each attorney must depend on his or her own knowledge of the law and expertise in the use or modification of these materials.

Copyright © 2021OREGON STATE BAR

16037 SW Upper Boones Ferry RoadP.O. Box 231935

Tigard, OR 97281-1935

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TABLE OF CONTENTS

Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Faculty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Presentation Slides: Agricultural Law Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

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SCHEDULE

Noon Trends and Hot Topics in Forest-Timber ManagementJoin trial lawyer Anne Foster and Lewis and Clark law student Shelby Long for an update on new and noteworthy cases and recent key legal developments in agriculture..

1:00 Adjourn

FACULTY

Anne Foster, Dunn Carney LLP, Portland. Ms. Foster serves on the firm’s Executive Committee. Her practice focuses on complicated business disputes, sticky employment situations, and catastrophic injury and abuse claims, representing both plaintiffs and defendants. She is a member of the American Board of Trial Advocates, Oregon Women Lawyers, and the Multnomah Bar Association. Ms. Foster is admitted to practice in Oregon and Washington and before the United States Supreme Court.

Shelby Long, Law Student and Law Clerk at Dunn Carney LLP, Portland. Ms. Long is a summer associate at Dunn Carney and a third-year law student at Lewis & Clark Law School. She is a member of the Business Law Society and serves as the Academic Enhancement Program Student Director.

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1Ag Law Update

Agricultural Law UpdateAnne Foster & Shelby Long

May 27, 2021

About us

Anne [email protected]

Trial Lawyer, 50+ trials to verdict

Focus on complex litigation

Agriculture, Water, Food and Other Natural Resources

Numerous trial verdicts in favor of Ag. clients

Employment Law

Product Liability

Wrongful Death and Personal Injury

Business and Contract Disputes

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About us

Shelby [email protected]

Summer Associate at Dunn Carney

Third-year law student at Lewis & Clark Law School

Member of Business Law Society

Advanced Enhancement Program’s Student Director

What we will coverUpdates on Oregon Cases Relevant to Ag

Taxes: requirements for tax exempt status of farm equipment

Trespass to Produce: a claim similar to Trespass to Timber

Water Law: update on Klamath Water Basin Litigation

Employment: aid-or-abet liability and noneconomic damages

Pesticides: EPA must ban or modify tolerances for chlorpyrifos

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What we will coverStatutes or Bills Relevant to Ag

FSMA: Food Safety Modernization Act

Animal Slaughter: Oregon initiative to ban animal slaughter, breeding

Other Cases or Rulings of Interest to Ag in Oregon

Employment: overtime for ag workers

The Deliberative Process Privilege: can be waived by inaction and/or failures.

What we will cover

Updates on Oregon Cases Relevant to Ag

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Taxes: Requirements for tax exempt status of farm equip.Farmer’s Direct, Inc. v. Dep’t of Revenue, 2021 WL 366864 (Or. Tax Regular Div.)(Feb. 3, 2021)Facts:

• Farmers’ Direct (Taxpayer) is a corporation and business which compresses bales of hay and straw from farms.

• For its business, Taxpayer uses a 1,372.2 square feet Compression System that is housed in a pole barn Taxpayer leases. To prevent the Compression System from moving while baling, the System is bolted down and is “hardwired” to an electric panel. The System could be disassembled in a day or less.

• Taypayer alleged the Compression System was exempt from property taxes as tangible personal property under ORS 307.394 (1)(d). The IRS disagreed and claimed the System was “affixed” to land and taxable as real property.

Taxes: Requirements for tax exempt status of farm equip.Farmer’s Direct, Inc. v. Dep’t of Revenue, 2021 WL 366864 (Or. Tax Regular Div.)(Feb. 3, 2021)

ORS 307.394 requires an exempt item be:

(1) tangible personal property;

(2) farm machinery and equipment; and

(3) used primarily for preparation of land, feeding, breeding, implement a remediation plan.

There is also a fourth requirement for farm equipment taken from case law: (4) the equipment must be movable.

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Taxes: Requirements for tax exempt status of farm equip.Farmer’s Direct, Inc. v. Dep’t of Revenue, 2021 WL 366864 (Or. Tax Regular Div.)(Feb. 3, 2021)

Holding:

After spending a significant amount of time discussing the common use, Black Legal Dictional and the Legislative intent of each of the terms “affixed,” “erected upon,” and “movable,” the Court concluded that it was necessary to look at all of the facts, including the intent of the parties, before determining if the property was personal property affixed to the land and therefore denied Defendants’ motion for summary judgment and sent the case for trial.

Trespass to Produce is a Claim: Just like Trespass to TimberSimington Gardens, LLC v. Rock Ridge Farms, LLC, 308 Or App 661 (Jan. 27, 2021).

Facts: Plaintiff Farmers brought action for common-law trespass, conversion, and statutory “trespass to produce” against defendant dairy farmer, relating to loss of Farmers’ organic salad crop following the escape of defendant’s cows. Plaintiff won on all claims at trial and Plaintiff received an enhanced award of double damages on the statutory claim.

Defendant appealed alleging Plaintiff was not entitled to statutory trespass damages, Plaintiff should have been required to elect between either common-law trespass or statutory trespass before going to jury and enjoyed a duplicative recovery because plaintiff was not required to choose after.

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ORS 105.810 states:

Whenever any person, without lawful authority, willfully injures or severs from the land of another any produce thereof or cuts down…any tree…if judgment is given for the plaintiff, it shall be given for treble the amount of damages claimed.

ORS 105.815 states:

If, upon the trial of an action included in ORS 105.810, it appears that the trespass was casual or involuntary…judgment shall be given for double damages.


Holding:

• The unauthorized injury to or severance of produce or timber constitutes a trespass;

• Plaintiffs do not have to elect between its common-law trespass & statutory claim before going to jury; and

• Plaintiff’s did not obtain double recovery when it did not elect between claims after the verdict.

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Water Law: Klamath Water Basin SHORT UpdateKlamath Tribes v. U.S. Bureau of Reclamation, 2021 WL 1819695 (May 6, 2021 Dist Or)Facts: Litigation in the Klamath Basin has been on-going for decades. Following is a short summary of a recent federal court ruling.

• The Bureau manages the Klamath Irrigation Project under the Klamath Project Operation Plan.

• In 2018, the Bureau submitted their 2019-2024 Operation Plan for input to NMFS and USFWS. The 2019 NMFS BiOp found that the Operation Plan would have a negative effect on the salmon.

Water Law: Klamath Water Basin SHORT UpdateKlamath Tribes v. U.S. Bureau of Reclamation, 2021 WL 1819695 (May 6, 2021 Dist Or)• The Bureau re-initiated consultation on the Operation Plan and put into place an

Interim Operative Plan that recognized the 2019 NMFS BiOp with one major difference, the Interim Plan allows for a surface flush to assist in disrupting the life cycle of a parasite to the salmon.

• In April 2020 the USFWS released a biological opinion analyzing the effect of the Interim Plan on fish and found that the Interim Plan would not jeopardize the fish so long as water elevation levels remained within the scope of analysis. If the water levels fell below these boundaries, the no jeopardy determination may not apply.

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Water Law: Klamath Water Basin SHORT UpdateKlamath Tribes v. U.S. Bureau of Reclamation, 2021 WL 1819695 (May 6, 2021 Dist Or)• Recognizing that 2021 will likely be one of the worst draught years ever, the Tribes

sought a temporary restraining order stopping the release of water from the Upper Klamath Lake because the water levels were below any BiOp and on the grounds that the release will endanger at least two fish species that are culturally, spiritually and ceremonially significant fish for the Tribes.

Holding: In its order, the Court noted that water levels have fallen outside the scope considered by the 2020 BiOp. But that the Bureau was continuing to comply with the terms and condition of the Interim Operating Plan by consulting with the Services. The Court then said the Bureau was not responsible for the unprecedented drought year and therefore the Tribes have not shown they will likely succeed on the merits.

Employment: No damages cap in cases alleging only emotional injury like most employment cases Zweizig v. Rote, 368 Or 79 (May 6, 2021)

Facts: Zweizig sued the employer in federal district court alleging it unlawfully retaliated against him. A jury awarded Zweizig $1,000,000 in noneconomic damages. The trial court reduced the noneconomic damages to $500,000 under the damages cap set forth in ORS 31.710(1).

Zweizig appealed to the 9th Circuit. The 9th Circuit then sent a certified question to the Oregon Supreme Court asking whether ORS 31.710(1) applies to noneconomic damages awarded for unlawful employment practices claims.

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Employment: No damages cap in cases alleging only emotional injury like most employment cases Zweizig v. Rote, 368 Or 79 (May 6, 2021)

Holding: The damages cap in ORS 31.710(1) does not apply to noneconomic damages awarded for unlawful employment practices where the plaintiff does not seek damages that arise out of bodily injury and instead seeks damages for emotional injury.

ORS 31.710 states in relevant part: “…in any civil action seeking damages arising out of bodily injury, including emotional injury or distress, death or property damage of any one person…the amount awarded for noneconomic damages shall not exceed $500,000.

Employment: Anyone can be an aider and abetterHernandez v. Catholic Health Initiatives, 311 Or App 70 (May 5, 2021).

Facts:

• Plaintiff as a nurse employee alleged discrimination in violation of ORS659A.183 in that she was improperly terminated because of a disability. Plaintiff also alleged that defendants aided and abetted the unlawful employment practices by mishandling her medical leave benefits.

• Plaintiff appealed the limited judgment of dismissal entered after the trial court granted defendants’ motion to dismiss on the aid and abet charges.

• Plaintiff argued that anyone, not just employees, may aid or abet. Any suggestion to the contrary was due to a drafting error in the bill.

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Employment: Anyone can be an aider and abetterHernandez v. Catholic Health Initiatives, 311 Or App 70 (May 5, 2021).

Holding: The drafters got it wrong- any person can be anyone, not just an employer or employee. Aid-or-abet liability under ORS 659A.030(1)(g) is not limited to employers and employees. Anyone qualifying as a “person” under ORS 659A.001(9) (which includes corporations and associations) may be an aider or abettor of an ulawful employment practice in a way that subjects them to liability under ORS 659A.030(1)(g). Case reversed and remanded.

ORS 659A.030(1)(g) states in relevant part: “It is an unlawful employment practice:…(g) for any person, whether an employer or an employee, to aid, abet, incite, compel or coerce the doing of any of the acts forbidden under this chapter or to attempt to do so.”

EPA must ban controversial pesticide chlorpyrifos or prove its safeLeague of United Latin Am. Citizens v. Regan, __ F3d __, 2021 WL 1682251 (Apr. 29, 2021) Facts:

• In a 116-page opinion, the Ninth Circuit ruled that the chemical chlorpyrifos is not safe for farm workers and causes development harm in children.

• Chlorpyrifos is a common pesticide mainly used in Oregon on Christmas trees, leafy greens crops, and alfalfa. Its use has been linked to harmful effects on the human body, including memory loss and verbal comprehension.

• Farmworkers and those who live near farms where the pesticide is used have also testified about health effects they have experienced from exposure.

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EPA must ban controversial pesticide chlorpyrifos or prove its safeLeague of United Latin Am. Citizens v. Regan, __ F3d __, 2021 WL 1682251 (Apr. 29, 2021)

Ninth Circuit Held:

1. The EPA, by leaving the tolerances in effect, violated its continuous obligation to ensure safety under the Federal Food, Drug and Cosmetic Act (FFDCA);

2. The EPA’s order denying petition to revoke tolerances, after a 13 year delay, was arbitrary and capricious and in violation of the APA; and

3. The EPA must either ban the use of chlorpyrifos or prove the pesticide will cause no harmful health effects from those who experience acute exposure.

What we will cover

Statutes or Bills

Relevant to Ag

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Food Safety Modernization Act and Human Food

FSMA inspections of intentional adulteration facilities have begun.

The US FDA announced that it will be begin routine inspections of small businesses to verify compliance with the Food Safety Modernization Act’s intentional rule.

The goal of FSMA rule is to address hazards that may be intentionally introduced to foods, including by acts of terrorism, with intent to cause wide scale public health harm.

What constitutes a small business in the animal food sector?

A very small business is a business that averages less than $2.5 million per year during the three-year period.

Must be in sales of animal food plus market value of animal food manufactured, processed, packed or held without sale.

Small businesses are businesses (including any subsidiaries and affiliates) employing fewer than 500 full-time equivalent employees.

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What about produce? A covered farm is a very small business if, on a rolling basis, the average

annual monetary value of produce the farm sold during the previous 3-year period is more than $25,000 but no more than $250,000.

A covered farm is a small business if, on a rolling basis, the average annual monetary value of produce the farm sold during the previous 3-year period is more than $250,000 but no more than $500,000.

Oregon Initiative to ban animal slaughter and breeding

An Oregon ballot initiative proposed for 2022 would effectively criminalize farming of food animals in the state by classifying their slaughter as aggravated abuse.

The initiative also redefines artificial insemination and castration as sexual assault.

Initiative petition 13 was filed with Oregon elections officials in November.

The petition would remove farmer exemptions from existing laws barring animal cruelty and target practices used for breeding domestic livestock.

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What we will cover

Other Cases Outside of Oregon That May Be of Interest to Ag in Oregon

On the horizon for Oregon….

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Employment: Ag is not exempt from overtimeMartinez-Cuevas v. DeRuyter Brothers Dairy, 475 P3d 164 (Nov. 5, 2020).

Washington State’s Supreme Court rules farmworkers are entitled to overtime pay.

House Bill 2358 is pending Oregon’s House of Representatives.

• “Prohibits employers from permitting or requiring agricultural workers to work in excess of 40 hours in one workweek unless workers are compensated for overtime hours worked.”

• Currently, under review in Oregon House of Representatives’ Rules committee.

Deliberative Process Privilege: Say What?

Deliberative Process Privilege covers:

• documents reflecting advisory opinions, recommendations and deliberations;

• comprising part of a process by which governmental decisions and policies are formulated.

The idea is that officials will not communicate candidly among themselves if each remark is a potential item of discovery and front page news…it is supposed to enhance the quality of governmental decisions. Often described as shielding predecisional and deliberative documents.

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Deliberative Process Privilege: Say What?

Deliberative Process Privilege can be waived:

1. First, did the government claim the privilege on the privilege log? If not, they may have waived the privilege.

2. Second, are there any claims of government malfeasance? If so, based on public policy, you have a right the documents.

Thank you

Anne [email protected]

Shelby [email protected]

ag law update

Documents