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The world of ag law never stops. Here are some of the recent changes in the law that impact agriculture. Every once in a while, a quick tour is in order.

  1. Des Moines Waterworks. They attempted to hold drainage districts responsible for nutrient run off fails.  The sue and settle method of the federal activist groups was not successfully parroted by the DSM Waterworks in their attempt to get additional parties to the table on nutrient run off management.
  2. Syngenta Litigation. The lawsuits have their first “bell weather trials” (aka test cases) working their way through the courts in Kansas and Minnesota. The results of these cases will determine if a global settlement is in the cards for the coming months. If you are a producer of corn in Iowa in the years in question, you are either represented individually by opting out of the class action, or you are represented by the class action lawyer, who essentially carries the case for all the nonspecifically represented corn producers.
  3. Pink Slime. The trial against ABC and its reporters for characterizing Beef Products, Inc.’s lean, finely textured beef as pink slime is underway. BPI says the report ruined its production, cut demand rapidly, and damaged the company to the tune of $1.9 billion (which could be tripled under South Dakota law where the suit is being heard).
  4. Industrial Hemp. Nevada (the state, not the town in Iowa with a different pronunciation of the same word) authorized growing industrial hemp for commercial purposes.
  5. Soda Tax. Seattle imposes a 1.75 cents per ounce tax on all non-diet sodas sold.
  6. Hazardous release exemption challenged.  Activist groups are challenging the EPA when it exempted farms from hazardous release reporting requirements. The district court found it didn’t have the authority to make the exemption. Producer groups were also suing the EPA, saying the exemption wasn’t broad enough and should cover concentrated animal feeding operations as well. Twenty-Eight Senators have asked the EPA to appeal the decision to the Supreme Court. The producers and the senators are worried that the reporting requirements (including low level ammonia and sulfur emissions that happen during livestock production) will expose farms to liability for not reporting correctly, and if they are reported correctly, the reporting system will be overwhelmed and create dangerous conditions. Further, farm groups fear the reporting requirements will subject them to attacks by extremist groups, because of the ease in which they can discover where feeding operations are located and managed via this reporting.
  7. Ag Supply Liens. Suppliers to ag feeding operations (like a feed mill) must file a new UCC filing statement with the Secretary of State every 31 days to maintain its ag supplier’s lien for feed sold within the last thirty days. Further, that lien is for the full amount of the feed supplied, and it attaches in full to the animals that consumed the feed. This is an important clarification that should help ensure distressed livestock farmers can still gain access to feed on credit, without the feed supplier sitting behind the operating credit lender in priority.
  8. Partition of real estate. Breaking up is hard to do, but splitting in kind falls from disfavor with the court. The Iowa Supreme Court ruled that when two parties own property, splitting up dollar bills is preferred to splitting up the farm.  The old “you pour, and I pick” method of splitting drinks won’t work either. This preference by the court means squabbling co-owners shouldn’t look to the court to split a farm, unless it is both fair and practicable. As no two pieces of dirt are ever the same, it creates a high bar. This is good news if you are an auctioneer or real estate agent, as court ordered sales appear to be favored going forward. Right after that ruling by the Supreme Court, the appeals court found that dividing in kind into identifiable tracts with no topographical differences would work, so all hope is not lost for those seeking to split the farm versus buying a co-owner out.
  9. Easements. Once a landowner is paid for the easement, the easement cannot be expanded without further compensation. The court indicates the key is to look at the use of the easement within the original idea of the grant of the easement. For example, allowing ingress/egress to a field doesn’t expand to parking on the access lane unless there is more to the story. If the use isn’t that clear, the court will look at the lay of the land, the actions in the first couple of years of the easement with an expansive view of allowing the easement holder the upper hand.
  10. Fences. Once again, good fences make good fences, and long standing fences make property lines; however, this is only true if coupled with conduct that shows ownership up to the fence. Fences not on the property line make fences the new boundary line after a period of years, but that installation of the fence needs to be coupled with mowing, grazing, or maintaining the area for your claim to stick. Also, fence agreements can be enforced, as one defendant found out when he entered into a fence agreement with his neighbor and then failed to follow its terms. The complaining neighbor picked up about $19,000 of damages and attorney’s fees because the agreement allowed for attorney’s fees to the prevailing party.
  11. Leases. After the court of appeals found one horse makes you a farmer for lease purposes, the Iowa Supreme Court gave further clear guidance. The new standard of whether a lease is a farm lease, for termination purposes, is the “primary purpose” test. The courts will now look at the actual use of the property to determine if it is a farm lease. So, the tenants out there with fainting goats, a herd of cats, and a broken-down nag will not get the September 1st protection that an actual farm tenant receives. In another matter, the court enforced the proration of unused lime as called for in the lease between the tenant and the farmer, which was a first legal test of that fairly standard provision.  The court also clarified that 99 year leases for primarily non-ag use would be acceptable under the Iowa Constitution.
  12. Nuisance.  A hog facility was found liable for interfering with a neighbor’s use and enjoyment of the property by not following generally acceptable management practices and was ordered to pay over $400,000 in damages.  The hog facility unsuccessfully complained the damages were too high, with the court finding that personal inconvenience, annoyance, discomfort and loss of full enjoyment of the property were caused by the odor from the hog facility. These damages may be limited in the future by the new law enacted in March that limits damages of this type.
  13. Insurance Contracts. I have often remarked that insurance companies do three things very well: deny claims, delay claims, and defend claims.  The insurance company has an army of attorneys who draft the terms of the insurance policy, and they are quick to defend the exact coverage.  A custom grower’s insurance policy was not responsible for the death of 837 hogs, because the contract only covered damage caused by the hogs, not damage TO the hogs.  Knowing the terms of your coverage can be the difference between a bump in the road and bankruptcy.
Saturday, May 30, 2020
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill Dillon focuses on family law, estate planning and IRS matters. Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill spent extensive time advocating for low income tax payers in front of the IRS and the State of Iowa Department of Revenue while at Drake.

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