Ethanol News From Across the Hall

Jeff Featherstun, an attorney at our firm, frequently writes about environmental issues on his blog, Outside of My Environment.  This week he tackled two stories involving ethanol that will be of interest to readers of this blog.  First, California's attempt to discriminate against  "Midwest" corn ethanol in favor of "California" ethanol was struck down as unconstitutional:

A federal judge recently struck down California’s program to reduce the “carbon intensity” of motor fuels, citing constitutional “interstate commerce” concerns that it discriminates against ethanol. The case was brought by groups that have an interest in corn ethanol, including corn growers, users, merchants and marketers of distillers grain (a by-product created during the corn-to-ethanol process that is fed to livestock), producers of corn ethanol, and importers of ethanol into California from other states.

Did President Obama Read the Janzen Ag Law Blog?

Well, maybe.  Last March, after much controversy swirled about whether the EPA was going to regulate milk containers under its Oil Spill Prevention, Control and Countermeasure rule (SPCC), I paraphrased EPA Administrator Lisa Jackson's response as:  "No need to cry over spilled milk."  The EPA eventually exempted milk from the SPCC rule, and dairy farmers breathed a sigh of relief.  

Tonight, in the State of Union address, President Barack Obama essentially said the same thing:

There is no question that some regulations are outdated, unnecessary, or too costly. In fact, I've approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his. I've ordered every federal agency to eliminate rules that don't make sense. We've already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years. We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill- because milk was somehow classified as an oil. With a rule like that, I guess it was worth crying over spilled milk. 

I'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder. . . . 

President Obama, I hope that you are reading this blog.  There are plenty of other agricultural regulations that could  use the same common sense approach applied to the "spilled milk" issue.  See, for example, the Department of Labor's proposed child labor restrictions.

Bill Gives Farmers a Legal Tool to Stop Groundless Nuisance Suits

Today's Indianapolis Star ("Protection Bill Leaves a Bad Smell") contained an editorial opposing HB 1091, a bill before the Indiana General Assembly that would allow courts to award attorneys' fees to farmers that successfully defend "frivolous, maliciously initiated, or groundless" nuisance suits.   The Star's editorial mistakenly described the bill, "under which agricultural operations, such as large confined livestock complexes, would be guaranteed payment of their legal fees if found to be victims of nuisance lawsuits."  (Emphasis added).

As the bill is currently written, the Star's statement is wrong.  Only if the farm prevails in the lawsuit and the suit is determined by a court to be "frivolous, maliciously initiated, or groundless," would the court award attorneys' fees. This is not a guaranty.

Nevertheless, some anti-ag groups are already lining up to oppose the bill.  Kim Ferraro of the Hoosier Environmental Counsel explained in Nuvo: "Given the significant hurdles already in place that limit the ability of CAFO communities to protect themselves,this is probably the most repulsive, underhanded and unjust piece of proposed legislation I've ever seen. . . . No other industry is afforded these protections (included in the proposed bill) ... It seems the purpose is to have a chilling effect."

Farm group industry leaders explained why the bill is necessary.  Justin Schneider, a staff attorney from Indiana Farm Bureau, testified that was bill was necessary because there have been several cases where judges declined to award court costs to successful defendants.  Michael Platt, executive director of the Indiana Pork Producers, testified that he is seeing more attorneys file suits against CAFOS with the express purpose of delaying and disrupting industry expansion.

From my standpoint, Indiana Farm Bureau and Indiana Pork have it right. A number of lawsuits have been filed in the last few years against Indiana farms, often funded by out-of-state attorneys or in state anti-farm groups.  Nuisance suits dissuade farms from expanding.  HB 1091 seeks to address these problems. 

Read the text of HB 1091 for yourself:  HB 1091.

Sackett v. EPA: Quotes from oral argument

Any attorney who has argued in open court will tell you that you cannot always predict how a court will rule based upon the questions asked from the bench.  Still, the inquiry can tell you a lot about what a judge is thinking and what issues he or she views as most important.  Sackett v. EPA, the recent wetlands case before the United State Supreme Court, provided its observers with a lot of insight into what issues are important to the justices.  Here are few of the more interesting quotes from the oral argument: (Mr. Stewart = EPA's counsel):

Justice Alito asked:  “Mr. Stewart, if you related the facts of this case as they come to us to an ordinary homeowner, don't you think most ordinary homeowners would say this kind of thing can't happen in the United States? You don't -- you buy property to build a house. You think maybe there is a little drainage problem in part of your lot, so you start to build the house and then you get an order from the EPA which says: You have filled in wetlands, so you can't build your house; remove the fill, put in all kinds of plants; and now you have to let us on your premises whenever we want to.  You have to turn over to us all sorts of documents, and for every day that you don't do all this you are accumulating a potential fine of $75,000.  And by the way, there is no way you can go to court to challenge our determination that this is a wetlands until such time as we choose to sue you.

Chief Justice Roberts:  ”That's what you would do? You would say, I don't think there are wetlands on my property but EPA does, so I'm going to take out all the fill, I'm going to plant herbaceous trees or whatever it is, and I will worry about whether to -- that way, I'll just do what the government tells me I should do.”

Justice Breyer: “for 75 years the courts have interpreted statutes with an eye towards permitting judicial review, not the opposite. And yet -- so here you are saying that this statute that says nothing about it precludes review, and then the second thing you say is that this isn't final. So I read the order. It looks like about as final a thing as I have ever seen.”  

In response to Mr. Stewart's suggestion that the EPA might alter its wetlands determination during litigation, Justice Alito responded: “Well, that makes the EPA's conduct here even more outrageous.  We think now that this is -- these are wetlands that -- that qualify, so we're going to hit you with this compliance order, but, you know, when we look into it more thoroughly in the future, we might change our mind?”

To the read the full transcript, click here.

Sackett v. EPA: Supreme Court Reviews EPA's Ability to Regulate Wetlands

Today the United States Supreme Court will hear oral argument in Sackett v. EPA, a case that may fundamentally alter the scope of the EPA’s ability to enforce the Clean Water Act. The Sacketts’ counsel describes the issue as the EPA’s overreaching net:

Representative Photo

The Clean Water Act casts a nationwide regulatory net that snags individual citizens doing ordinary, everyday activities. Unlike other environmental statutes, the Clean Water Act is not directed toward a certain field of activity where those involved would be expected to know the applicable regulations. Any citizen engaged in a range of activities may run afoul of the Act. The Clean Water Act’s reach is extremely broad, requiring a permit for the discharge of “pollutants” from a “point source” into the “waters of the United States,” which phrase has been interpreted by regulation to include “wetlands.”

Wetlands are themselves defined by complex criteria—including soil type, vegetation, and hydrology—which defy consistent application and are not apparent to the average citizen. The government finds regulable “wetlands” even on land that appears to be totally dry.  

The plaintiffs were ordinary citizens that purchased a residential lot and began to develop it for construction of their home, only to receive a compliance order from the EPA:

The order charges them with violating the Clean Water Act by placing fill material on their lot. . . First, the order enjoins them from the only authorized use of the property under local law. . . The order, as subsequently amended, requires them, at their own expense, to “remove all unauthorized fill material” and move it to “a location approved by [an] EPA representative,” as well as to prepare for EPA “photographs of [s]ite conditions prior to and following compliance” with the order.

Even after completion of the fill removal, the compliance order continues to control the use of the Sacketts’ property. The order then requires them to plant certain native plants on their property.

Most troubling for the Sacketts, though, is that failure to abide by the order’s terms can result in civil penalties up to $37,500 per day.

The Sacketts were denied judicial review before the local district court, where they alleged the “wetlands” were not under the Clean Water Act’s (and thus the EPA’s) jurisdiction. The district court dismissed complaint, holding that so-called “pre-enforcement” orders by the EPA were not reviewable.  The Sacketts’ only choice was to obey the order and essentially lose all use of their land, or ignore the order and potentially be fined.  Instead, they took their case to the U.S. Supreme Court.

The Sacketts have asserted that the order violates their due process rights.  Various other groups have also filed briefs in the case, including American Farm Bureau the National Association of Manufacturers.  Stay turned for the results.

The Debate on Labeling GM Food

The Diane Rehm Show on NPR recently featured a debate on whether companies should be required to label genetically modified food (GM food or GMOs) on their packaging.  This episode was particularly interesting to me because one of the panelists was Thomas P. Redick, principal at the Global Environmental Ethics Counsel and general counsel for the United Soybean Board.  I know Mr. Redick as he and I  are both officers on the American Bar Association's Agricultural Management Committee.

Gary Hirshberg, president of Stonyfield Farms, was also on the program. He stated:

Polls show that Americans overwhelmingly want labeling. Thomson Reuters, in a poll actually commissioned by NPR a year ago, showed over a sample of 3,000, showed 93 percent of consumers desiring foods to be labeled. Lake Associates, Consumers Union, MSNBC, there's endless polls. All of the numbers come in at well over 90 percent. This is not a small debatable number.

Mr. Redick reponded that such polls may not be as clear cut as suggested:

[T]here's a good group called IFIC International Food Information Council that did a survey that's not designed to get a result. I mean, in these surveys that Gary mentioned they say, wouldn't you like to label gm foods, and that's a very leading question. If you ask the question, what would you like to see on a label that's not already there, genetic modification is very low on the list. So we view the survey as designed to get a result.

Mr. Redick also suggested that requiring labeling of GMOs would inevitably lead to higher costs for consumers:

And because companies would then have to change the labels and then they would voluntarily source non-GM inputs to avoid the label, it will drive more folks in the chain of, say, corn chips to purchase a non-GMO corn. And then, the non-GMO corn goes up in price because of demand. That's certainly the case in any nations they've implemented labeling. 

Well, there's over 40 nations actually that have labeling laws. The Institute for -- IFPR, International Food Policy Research did a study that showed not many of these are actually being implemented. Where they are being implemented, significant costs are incurred and it raises the price for those who can least afford to pay for the food.

Continued reading or listen to the complete discussion at  The Diane Rehm Show website.