Community Supported Agriculture (CSA) can be a beneficial tool for producers to add value to their operation. However, if a CSA is not carefully formed with a detailed business plan and proper risk management tools, concerns about liability can arise. Liability is a legal term used in situations when a party is held legally responsible for something. For example, in an agricultural scenario, liability concerns might arise if consumers are injured white at a producer’s property to purchase farm products. This article will discuss the liability concerns that arise with CSA, and it is the third installment in a series of articles on Community Supported Agriculture. Click here to read the first two articles in the series.
Background on CSA
CSA is a farm business model where consumers can sponsor a producer’s growing season by purchasing a membership, and in return, receive a share of the season’s product. Because the member purchases the share prior to growing season, the producer shares the burden of risk with the member. After farm products are harvested, members will receive a box of them on a periodic basis. The distribution of the box can occur on-location at the CSA farm, at an off-farm location, or even through delivery to the member’s home or business. The method of distribution is an important decision for a CSA because liability should be considered when determining a CSA distribution plan.
Distribution Liability Concerns
A producer operating a CSA can choose from a few methods of distribution. Each distribution method comes with its own liability and other legal concerns.
On-site distribution
When CSA operators distribute boxes by having members come on their land, the producers open themselves up to premise liability. This type of liability arises when a person suffers a personal injury or damage to personal property while upon the property of another. To make a premise liability claim, a plaintiff must establish the landowner owned them a duty of care, that the duty of care was breached, the breach was the proximate cause of the plaintiff’s injury, and the breach resulted in injury to the person or property. Traditionally, the duty of care is determined by what type of land entrant the plaintiff is; however, it will also depend on the state you are in. A land entrant, that is a person who enters onto another’s land, is given a classification under the law which determines the duty of care owned them by the landowner. The three traditional categories of land entrants are trespasser, licensee, or invitee.
A trespasser is someone who is on the land without the landowner’s permission and does not provide the landowner any benefit. Trespassers are given the lowest duty of care, only owned a duty of care to refrain from willfully or wantonly injuring the trespasser. A licensee is one- like a family friend- who is on the premise with permission, but does not bestow a benefit on the landowner or occupier. The landowner owns a licensee the duty to warn of hidden dangers that the landowner knows about and the licensee cannot reasonably be expected to discover. Last, an invitee is one who is on the premise for business purposes or for mutual advantage rather than solely for the benefit of the person entering the property. The landowner will owe an invitee a duty of care to make and keep the premises safe and to warn of existing dangers that cannot be made safe.
Under the traditional duty of care model, a member coming to a CSA operation to pick up their farm products box would be classified as an invitee. This means they would be owed the highest standard of care. For example, Member Mike, a member of Farmer Fran’s CSA operation, is considered an invitee when he comes to Fran’s land for his weekly box pickup. Mike is an invitee because his visit to Fran’s land is for mutual advantage to both him and Fran. The purchase of the box is a benefit to Fran, while the collection of the box of farm products is a benefit to Mike. Further, if Mike is injured by slipping in a puddle of rainwater on Fran’s property while going to collect his box, Fran could be liable because she owes him a duty of care to keep the premises safe.
Some jurisdictions have moved away from the duty of care classification system, and instead use a system based on a general duty of reasonable care for foreseeable risks. Landowners will owe a duty of reasonable care under all circumstances in this system. A few factors that are considered include the foreseeability of the visitor’s presence, the risk of injury, the benefits of allowing the condition, and the burdens to safeguard the condition. For example, if Member Mike is injured walking up faulty entryway stairs into Farmer Fran’s barn where the CSA box pickup occurs, then Fran could be liable. Under this system, it is foreseeable that Mike and other CSA members would be using the entryway stairs to enter the barn where Fran distributes the boxes. Therefore, Fran would owe a duty of reasonable care to protect visitors like Mike from injury on her faulty stairs. To learn more about landowner liability generally, click here to visit NALC’s Landowner Liability reading room.
Off-site distribution
Even if the distribution of farm product boxes are occurring at a location that is separate from the CSA and not owned by the producer, the producer might still owe a duty of care to members. This means that under the traditional model, a member coming to the distribution site for box pickup might be considered an invitee and owned the highest duty of care. A producer should be aware of the duty of care owned to members at the distribution site, and ensure the premises are safe and members are warned of any existing dangers that cannot be made safe. For example, Farmer Fran is doing box distribution at a local community center in a room that has a large crack in the foundation. To avoid breaching the duty of care owed to invitees, she should warn members of the crack, so they do not trip and risk injury. Alternatively, under the modern system, a member could be owed a duty of reasonable care for foreseeable risks at the time of pickup. For example, Farmer Fran’s CSA distributes farm product boxes at a local business during Tuesday evenings. The parking lot of the local business has poor lighting and is full of potholes. It is foreseeable that a member coming to the local business for distribution after dark might be injured walking through the poorly lit parking lot full of potholes. Farmer Fran should take precautions, such as warning members of the parking lots’ conditions, to avoid liability for an injury that might occur.
Delivery distribution
Some CSAs choose to distribute the boxes by delivering directly to members. Under this distribution method, a producer, CSA employee, core group member, or volunteer will transport boxes from the CSA operation to the member’s listed address. The largest liability concern with delivery stems from potential accidents involving delivery drivers. Because of this, the driver’s relationship with the CSA is an important factor in mitigating the risk of liability involved with delivery of farm product boxes. As further discussed below, the CSA might be held liable under the theory of vicarious liability for the actions of a delivery driver. For example, Core Group Member Carrie helps Farmer Fran deliver farm product boxes to member houses. If Carrie causes a car accident on her delivery route, then the CSA and Fran might be liable for Carrie’s actions.
Vicarious Liability
Another liability consideration for CSAs using off-farm distribution is the legal principle of vicarious liability. Vicarious liability is a legal concept where a party is held responsible for the actions of another. It typically occurs in an employment situation where an employer is responsible for the actions of their employee if that employee causes harm or injury to another person. Depending on the CSA’s formation, there might be several actors that a producer could be liable for. This could include employees, volunteers, or core group members. If producers enlist the help of volunteers or core group members for help with off-site distribution or delivery, they could be liable for the actions of those actors. For example, Core Group Member Cole is running the off-farm distribution for Farmer Fran, and he stacks the boxes of farm products in a way that is not stable. If the boxes topple over and injure a member, Fran and the CSA could be liable for Cole’s actions. A future article in this series will discuss in depth CSAs and labor concerns that arise in their operations.
Food and Product Safety Liability
Another liability concern for a CSA operation arises from the product itself. Whenever a business is selling a product, there is a potential of liability for injuries caused by that product. Specifically, when the product is food, there is always a risk of the product causing a foodborne illness. Producers should take care to identify potential sources of contamination and create a plan to reduce the risk of it. Food safety trainings and certifications are options that producers can utilize to help mitigate risks. Additionally, if a producer is seeking to add benefits to their CSA operation through canning foods, creating baked goods, or more, there might be cottage food laws they should take care to comply with. This topic will be discussed in more depth in an upcoming article in this series.
Work Requirements and Liability
Along with distribution and food safety liability concerns, CSAs might also have liability issues arise if a member is injured while fulfilling a work requirement. The next article in this series will provide a more in-depth discussion of CSA labor issues such as these.
Liability Suggestions
Insurance
One way to manage the risk associated with businesses such as CSAs is by maintaining an insurance policy. A general homeowner’s or farm and ranch policy may not cover the business – it is important to confirm with your agent that all of the activities that you expect your business to engage with are covered. The Ohio State University Agricultural & Resource Law Program has an excellent resource for people interested in learning more about insurance policies and provisions.
Business Structure
Another way to limit liability is to form the CSA under a legal business structure that will protect the producer from being personally liable for the actions and debts of the business. Being personally liable means that if the business gets into legal trouble, the producer’s personal assets could be used to pay for any debts or judgements. However, if the CSA is formed as a limited liability company, a corporation, a limited liability partnership, or another business structure that limits liability, the producer’s personal assets are likely to be protected. Business organizations vary from state to state and have different requirements depending on the state where it is formed. To learn more about business organizations and other CSA formation concerns, click here to visit the second installment in this article series.
Conclusion
CSAs are an excellent avenue for producers looking to add value to their operation; however, the formation of a CSA is not without its own liability concerns. On-farm distribution, off-farm distribution, delivery, food safety, and work requirements are just a few areas of the CSA that might pose a risk of liability.