A comprehensive summary of today’s judicial, legislative, and regulatory developments in agriculture and food. Email important additions to: camarigg at uark.edu

ANNOUNCEMENT: Join us this Wednesday, September 21, at 12 noon (ET) for a free webinar: CRISPR: A Biotechnology Breakthrough and an Inventorship Quandary. Details and sign-in information here.  

JUDICIAL: Includes contract, zoning, tax, and antitrust issues.

In WILLIAM KYLE AYMOND, Plaintiff-Appellant THAD HERRON, HILLARY DENISE HERRON AND WILLIAM GARRETT AYMOND, ET AL v. CITIZENS PROGRESSIVE BANK Defendant-Appellee, 50,825 (La. App. 2 Cir. 9/16/16), plaintiffs (a number of farm business entities) appealed district court decision in favor of defendant (bank). District court found that neither written loan requirements drafted by the bank nor a promissory note “contained language indicating a crop loan was made for the benefit of a third party.” Plaintiffs appealed. Appellate court observed that “a contracting party may stipulate a benefit for a third person called a third party beneficiary.” The court noted, however, that, “A stipulation pour autrui is never presumed. The person claiming the benefit has the burden of proof.” Plaintiffs did not meet burden of proving bank’s loan requirements manifested an “intention by the lender and borrowers to provide a benefit to a third party.”

In Engel v. Monitor Twp. Zoning Bd. of Appeals, No. 327701, 2016 WL 4770183 (Mich. Ct. App. Sept. 13, 2016), plaintiffs appealed decision by a town board granting a variance to a third party that wanted to construct an indoor horse training arena near their property line. The requested variance was from an ordinance requiring a 100-foot setback for “[f]arm buildings housing animals or poultry.” At issue was the statutory language, “housing animals or poultry.” Court noted that “the important distinction in this case is whether the arena in question does or does not house the horses.” The court, agreeing with the board, found that the horses “do not live in the arena and they are not stored there,” and that “the horses train in the arena before they are returned to their respective barns, where they live and are stored.” Judgment for defendant affirmed.

In BARNHART RANCH, CO., ET AL., Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent, T.C.M. (RIA) 2016-170 (T.C. 2016), plaintiffs (BRC), a cattle farming corporation, claimed a pair of brothers were personally liable for net losses, not the corporation. Plaintiffs argued the corporation served only as the brothers’ agent. The court observed that, “An exception to the separate taxable entity principle exists where a corporation serves as the agent of the taxpayers,” and that, “if a corporation was merely the shareholders’ agent, then income or expenses generated by the corporation’s assets would be income and expenses of the shareholders as principals.” Court found the ranch corporation “held itself out to the public, including the livestock auctions and other brokers, buyers, sellers, and vendors, as the legal entity that owned the cattle.” Court ruled the brothers “sufficiently held BRC out to others as the owner of the cattle during the years in issue and that BRC had significant control over the cattle.”  Court ruled plaintiffs to be owners of the cattle for tax purposes and denied their motion.

In In re: Processed Egg Prod. Antitrust Litig., No. 08-MD-2002, 2016 WL 4922706 (E.D. Pa. Sept. 13, 2016), plaintiffs accused defendant egg producers of violating the Sherman Act by “colluding to reduce egg production in periods of oversupply through coordinated action,” and claimed that United Egg Producers (UEP) and United States Egg Marketers (USEM) are “not Capper-Volstead agricultural collectives and thus, not shielded from antitrust liability.” Court observed Capper–Volstead Act “exempts certain agricultural cooperatives, made up of farmers, planters, ranchmen, dairymen, or nut or fruit growers, from some of the provisions of the antitrust laws.” The court noted that, “In order for an agricultural cooperative to enjoy the limited exception to the antitrust law afforded by Capper-Volstead . . . all members of the cooperative must be shown to be qualified in order for the statute to apply.” Court found that UEP allowed a non-producer farm to join their cooperative and concluded that “the precedent is clear that participation by even a single non-producer . . . is sufficient to remove Capper-Volstead protection for the entire cooperative.” Plaintiff’s motion granted as to UEP, but denied as to USEM.

LEGISLATIVE:

S. 3333: A bill to provide for the disposal of certain Bureau of Land Management land in Mohave County, Arizona, and for other purposes. Bill referred to Senate Committee on Energy and Natural Resources which will consider it before sending it to the Senate. Sponsor: Sen. Jeff Flake [R-AZ].

S. 3350: A bill to amend the Packers and Stockyards Act, 1921, to clarify the duties relating to services furnished in connection with the buying or selling of livestock in commerce through online, video, or other electronic methods, and for other purposes. Bill referred to Senate Committee on Agriculture, Nutrition, and Forestry which will consider it before sending it to the Senate. Sponsor: Sen. Thad Cochran [R-MS].

H.R. 2494: Eliminate, Neutralize, and Disrupt Wildlife Trafficking Act of 2016. Bill was passed in the House and the Senate, but the Senate made changes and sent it back to the House on September 15, 2016.

H.R. 5346: Securing our Agriculture and Food Act. Ordered to be Reported (Amended) by Voice Vote. The committees assigned to this bill sent it to the House or Senate as a whole for consideration on September 13, 2016.

H.R. 5883: Technical and Clarifying Amendments to the Packers and Stockyards Act of 2016. Bill was added to the House’s schedule for the coming week, according to the House Majority Leader. See the week ahead.

H.R. 6004: MGT Act. Bill was added to the House’s schedule for the coming week, according to the House Majority Leader. See the week ahead.

H.R. 6022: To authorize a pilot project for an innovative water project financing program, and for other purposes. This bill’s text is now available.

H.R. 6029: To require State and local government approval of prescribed burns on Federal land during conditions of drought or fire danger. This bill’s text is now available.

REGULATORY: Includes USDA, FDA, ITA and NOAA.

AGRICULTURE DEPARTMENT:

Notice the Office of Advocacy and Outreach announced a meeting of the Beginning Farmers and Ranchers Advisory Committee. Details here.

Notice announcing meeting of the GIPSA Grain Inspection Advisory Committee. Info here.

FOOD AND DRUG ADMINISTRATION:

Rule announcing effective date for the definition of qualified auditor in two final rules regarding risk-based preventive controls for food for animals that appeared in the Federal Register of September 17, 2015. Info here.

Notice soliciting comments on a survey entitled “Survey on the Occurrence of Foodborne Illness Risk Factors in Selected Institutional Foodservice and Retail Food Stores Facility Types (2015-2025).” Details here.

INTERNATIONAL TRADE ADMINISTRATION:

Notice ITA preliminarily determines none of the mandatory respondents in this review qualify for a separate rate and are, therefore, considered a part of the Vietnam-Wide Entity for their exports of Frozen Fish Fillets From Vietnam exported to the United States during the period of review August 1, 2014, through July 31, 2015. Info here.

Notice on May 13, 2016, the Department of Commerce published the preliminary results of the administrative review of the antidumping duty order on solid fertilizer grade ammonium nitrate from Russia. Details here.

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION:

Rule NMFS wants to list the Maui’s dolphin as endangered and the South Island Hector’s dolphin as threatened under the Endangered Species Act. Info here.

Rule NMFS completed a comprehensive status review under the Endangered Species Act for the common guitarfish and the blackchin guitarfish. Details here.