On June 22, 2017 and September 15, 2017, we blogged about “ag-gag” laws – laws intended to prevent undercover access to agricultural production facilities for the purpose of finding and disclosing unethical behavior. These laws have met with varying fates in the federal courts.

In 2012, the Iowa legislature passed an ag-gag law, making it a misdemeanor to obtain access to an agricultural production facility by false pretenses or to obtain employment at such a facility by such means.

On October 10, 2017, the Animal Legal Defense Fund and several other pro bono organizations filed suit for declaratory and injunctive relief against Iowa’s ag-gag law. The suit alleges that the statute violates the First Amendment, both facially and as applied, in that it is a content-based restriction on efforts to obtain information about mistreatment of animals.  The suit also alleges that the statute was motivated by animus against the plaintiffs and hence violates due process and equal protection.

On June 22, 2017, we blogged about the Wyoming “ag gag” statute designed to discourage undercover reporting in animal facilities. The statute prohibited persons from (1) trespassing on private land for the purpose of collecting data; (2) trespassing to collect data; or (3) trespassing to obtain access to public land for such purposes. The District Court held that the statute implicated no First Amendment concerns, as it merely prohibited trespassing, although the penalties for violation were substantially greater than under the general trespass law.

Last week the Tenth Circuit reversed and remanded the case for further proceedings, including the proper standard of review and a decision on he merits. The appellate court held the act of collecting information on public lands was protected by the First Amendment, because obtaining information is a necessary prerequisite to disseminating it. It relied on several cases holding that the First Amendment protects the recording of public officials’ public conduct.

The Tenth Circuit recognized that not all regulations that incidentally restrict collection or dissemination of information necessarily implicate the First Amendment. For example, the Supreme Court has upheld restrictions on the right to travel to Cuba even though that would interfere with the acquisition of information about the island. The Court suggested that the application of Wyoming’s general trespass statute to trespassers in search of information might not implicate the First Amendment. But the substantially higher penalties in the ag-gag law did.

The appellants in Wyoming did not appeal from the ruling that trespassing with the purpose or effect of collecting information satisfied the First Amendment, so those parts of the statute will remain in effect. The Ninth Circuit has not yet ruled on the successful challenge to Idaho‘s ag-gag law nor the Fourth Circuit on the unsuccessful challenge to North Carolina’s law.

Given the number of these statutes and the inconsistent results reached by the lower courts to date, a successful cert. petition may be in the works.

On June 22, 2017, we blogged about the status of so-called “ag-gag laws” in various states. The purpose of such laws is to prevent undercover exposure of mistreatment of farm animals.  On July 7, 2017, a federal district court held that Utah’s ag-gag law violated the First Amendment.

The Utah statute criminalized four kinds of conduct.  It made it illegal to gain access to an agricultural operation under false pretenses. It also prohibited bugging an agricultural operation; filming such an operation after applying for employment with an intent to film; and filming such an operation while trespassing.

The Animal Legal Defense Fund and others sought to enjoin the statute as a violation of their First Amendment rights.  The State countered that the statute only prohibits lies and that the First Amendment does not protect lies.  In United States v. Alvarez, the Supreme Court held that lies were unprotected only if they cause legally cognizable harm. The District Court concluded that false pretenses incidental to filming animal abuse caused no such harm.

The State first claimed that the statute protected the health of animals and other employees.  The District Court agreed that this would qualify as legally cognizable harm under Alvarez and it recognized that some lies – the ability to operate farm machinery competently, for example – could indeed cover it.  But many of the lies that undercover operatives tell – their longstanding desire to work on a farm, for example – would not cause such harm, so the statute was fatally overbroad.

The State next argued that trespass in and of itself was legally cognizable harm.  Plaintiffs countered that they had consent, albeit induced by deception.  The District Court held that whether the consent was effective depended on the type of harm that the liar causes.  If the liar causes the kind of harm that trespass was intended to protect – interference with ownership or possession of land – the lie vitiated the consent.  If the lie causes some other type of harm, however, the consent remains in effect.

Once again, the District Court recognized that some liars could indeed injure ownership or possession of property and hence be guilty of trespass.  But other kinds of liars – e.g., the food critic who conceals his identity from the restaurant – would never cause trespass-type harm.  So, once again, the statute was fatally overbroad.

The State’s final argument was that lying to obtain employment causes harm because the employer is paying money on the false assumption that it has a loyal employee.  Again, however, the statute criminalized many more lies than merely ones made to obtain employment so it again was overbroad.

Alternatively, the State contended that the statute’s recording provisions were constitutional, because recording audio or film is not itself speech.  The District Court observed that the Supreme Court had held that the right to broadcast such things as movies was protected and thus the right to record them in the first place was necessarily protected.

The State’s final argument that the First Amendment did not apply was that the statute only regulated speech on private property and private landowners have the right to exclude others.  This argument failed because the entity attempting to regulate speech is the State, not the owner of the agricultural production facility.

The District Court held that strict scrutiny was the appropriate standard of review because the statute regulated on the basis of content, thus requiring the State to prove a compelling governmental interest protected by a narrowly tailored statute.  As a practical matter, application of strict scrutiny is almost always fatal to a statute, and so it is here.

The State argued that it had a compelling interest in avoiding disease and injury to workers or animals from incompetent undercover agents.  But the State produced no evidence that undercover agents caused these problems and purely speculative harm is never a compelling state interest.  Moreover, there were plenty of other ways to avoid these evils.

Expect an appeal.  The same issue is currently before the Tenth Circuit on an appeal from an order sustaining Wyoming’s ag-gag law.

For years, animal rights activists have employed various subterfuges to gain access to animal facilities to film or video animal abuses. For example, a reporter will apply for a job at an animal facility and use his/her I-phone to record mistreatment of animals. The adverse publicity generated by these undercover activities has cost many entities millions of dollars and resulted in some bankruptcies.

Several states have enacted so-called “ag gag” laws that attempt in one way or another to limit these underground efforts. These laws typically prohibit film or video of animal or research facilities.  Others prohibit submitting a false employment application as a means of gaining access to such facilities. These laws have met with varying results in court.

Idaho was the first state to enact a modern ag gag law in 2014, following release of a video demonstrating animal abuse at a dairy. The statute creates a new crime: interference with agricultural production. Such interference consists of:

  • Entry into an agricultural facility by force, threat, misrepresentation or trespass.
  • Acquisition of records of such a facility by force, threat, misrepresentation or trespass.
  • Obtaining employment in such a facility by force, threat, misrepresentation or trespass, with intent to injure the facility’s operations.
  • Making audio or video recordings of the operations of such a facility without consent.
  • Intentionally causing injury to the facility, its operations or its property.

Violation is a felony punishable by a year in jail. In addition, the statute provides a private right of action to recover twice the economic injury sustained by the facility.

The Animal Legal Defense Fund sued to enjoin the statute, arguing that it violated both the First Amendment and equal protection. The District Court agreed with both arguments. It rejected the State’s argument that the First Amendment does not protect false statements. The correct rule, the Court held, is that it does not protect false statements that cause legally cognizable harm. Here, false statements to obtain employment or access do not cause material harm. Disclosure of animal mistreatment may cause material harm, but that is not the direct product of the alleged misrepresentations. The false statements actually serve First Amendment values by exposing misconduct and fostering public debate. Continue Reading “Ag Gag” Laws

We had previously posted about the State of Missouri’s petition for certiorari to review California’s requirement that all eggs sold in the State conform to California’s minimum cage requirement for hens.  The Supreme Court has denied the petition.

The basis for the District Court’s and the Ninth Circuit’s dismissal of the case was that Missouri had not suffered any concrete harm to its sovereign interest, not the merits.  So it is likely that either Missouri or a Missouri egg producer will refile the lawsuit.

In 2008, California voters approved Proposition 2, which banned the sale of eggs in California unless the laying hens had a minimum amount of space in which to lay their eggs. Regulations that became effective January 1, 2015, required a minimum of 116 square inches for each hen, approximately twice the space that was standard in the industry.  California egg producers generally complied with the regulations by reducing the number of hens in each cage rather than building expensive new cages.  Since their fixed costs remained the same, the net result was a substantial increase in the unit cost per egg.

In 2010, under pressure from California egg growers, the legislature enacted a statute applying Proposition 2 to all eggs sold in the State of California, regardless of where they were laid. Thus, if a Missouri egg grower wanted to sell into the California market, it would have to comply with the minimum cage size requirement.  It could do so either by doubling the number of cages or accepting a 50% reduction in egg production.  Either alternative would impose substantial financial costs on the grower.

The California legislature attempted to justify the statute on the ground that larger cages meant less stress on the hens, thus reducing the likelihood of salmonella infection. It had to acknowledge, however, that there is little scientific evidence supporting a link between stress and salmonella.  Other parts of the legislative history suggested that the real purpose of the statute was to avoid placing California egg growers at a competitive disadvantage.

About one third of the eggs laid in Missouri are sold in California, making up about 13% of the latter state’s total consumption. Fluctuations in supply and demand during the course of the year make it impossible for growers to set up one operation for California and another operation for everywhere else.  Missouri growers therefore had a choice:  become California compliant by incurring considerable costs which would make their eggs uncompetitive elsewhere; or abandon the California market. Continue Reading Missouri Challenges California Egg Rule

On Monday, June 13, 2016, the Patent Trial and Appeal Board issued its first ever post-grant review decision under the America Invents Act.  The Board invalidated two patents challenged by Husch Blackwell client American Simmental Association, a national cattle breed association representing the interests of Simmental cattle breeders in the United States. The ASA successfully argued that two previously issued patents which sought to protect a method of determining the relative market value of feeder cattle based upon genetic merit and physical traits of the animals constituted non-patentable subject matter. The Board agreed and stated that the challenged patents’ methodology were “fundamental concepts” that were “long prevalent in our system of commerce” and that some of the patents’ claims would have been obvious to a person familiar with the relevant technology based on previous inventions.

More information on the first-of-its-kind ruling, Husch Blackwell’s involvement and a link to the Law360 article can be found on our website.

Over the past few years, there has been a virtual onslaught of lawsuits directed to the food and beverage industry, principally relating to claims that certain marketing efforts of food and beverage producers falsely advertise their products and encourage consumers to purchase them based upon fraudulent representations.  Likely due to California’s expansive consumer protection statutes and perceived “green” nature, the U.S. District Court for the Northern District of California has become the venue of choice for many of these lawsuits and, as a result, has been dubbed by some as the “Food Court.”

Recently, the Food Court received another complaint directed to a human food product. Rather than a labeling or false advertising claim, this suit contends that the U.S. Food and Drug Administration’s (FDA) recent approval of a genetically modified (GM) animal intended for human consumption was unsound and further challenges the FDA’s authority to even approve genetically modified animals used for food.  At issue is a GM salmon offered by AquaBounty Technologies, Inc, which claims its now-FDA approved salmon grow twice as fast as wild versions of Atlantic salmon while consuming 25% less feed in the process.  In November, the FDA approved AquaBounty’s GM salmon finding the product “safe for human consumption” and equally nutritious as non-genetically engineered Atlantic salmon.  The AquaBounty salmon is the first GM animal cleared for human consumption in the United States. Continue Reading Will Genetically Modified Salmon Be Served a Setback in the Food Court? Consumer Groups Seek to Stall Release of GM Fish

On September 28, 2015, the U.S. Government Accountability Office (GAO) issued a report to the Senate Committee on Health, Education, Labor and Pensions and the House Committee on Energy and Commerce on animal drug compounding. The GAO reviewed and analyzed regulation of animal drug compounding and concluded that FDA oversight could be strengthened, and recommended that executive action be taken to: (1) modify the adverse event reporting form to detect more adverse events arising from compounding, (2) develop policy for enforcing of compounding regulations for animals, and (3) more consistently document the bases for FDA decisions in the area.

Nonetheless, no regulatory or statutory changes were recommended and no projections were provided on the effect that the recommendations, when implemented, would have on animal health or animal drug compounding practice in the U.S. FDA is in the process of updating its guidance in this area and a notice and comment rulemaking is under way. The comment period on the new guidance has been extended until November 16, 2015. This guidance likely will interest those in the animal health industry. Husch Blackwell’s Animal Health Team is available to facilitate submission of comments by those potentially affected.

What This Mean to The Animal Health Industry

Compounders of animal drugs may face an increase in enforcement activity from FDA, but without changes in laws, regulations or funding, FDA’s ability to bring about major change will be limited. Those stricter enforcement against animal drug compounding may not be satisfied with the changes brought about by the GAO report.

September was a busy month for the Husch Blackwell Animal Health Team.  We started the month attending the Kansas City Animal Health Corridor Investment Forum, which featured a variety of companies that hope to bring a wide range of new products and innovations to the animal health industry.   Later in the month, we attended a Legal, Regulatory and Compliance Forum on Animal Health, which was held in New York City.  The conference was well attended and, unlike most legal education programs, was focused exclusively on the animal health industry.  The content was excellent, with presenters raising some issues we thought worthy of sharing with the animal health community.  Here are a few summary points from the presentations:

  1. Animal Health is On the Radar of Regulators.  Speakers highlighted the fact that the animal health industry is no longer essentially a niche market out of the spotlight.  Instead, animal health is viewed as a growing area of economic strength and, as such, the industry is garnering much more attention from regulators.  In fact, the USDA, FDA, EPA and state and local regulators have put many new regulations in place and are otherwise watching production and other issues much more carefully than they have done in the past.  Much of this activity is driven by consumer groups and the ever increasing number of lawsuits that are filed annually involving animal health companies, including consumer false advertising claims.
  2. If Your Company Potentially Could be the Subject of A Future Enforcement Action, Involve Lawyers Early On in the Life of A Product.  The speakers emphasized the need to involve lawyers early on in the product development process, not afterwards once a product is on the market and an issue arises.  It is penny wise and pound foolish to involve lawyers only when there is a lawsuit or regulatory action.  This is the case because counsel can take proactive, helpful, preventive steps from the beginning that may minimize or even eliminate problems with regulators and/or reduce or eliminate litigation risk down the road.  For example, counsel can help establish rules for internal communications and provide training that can prevent the creation of “bad documents”, such as poorly phrased emails (e.g., “We tried to implement a QC process that would eliminate the risk of unsafe products from reaching the market, but we just can’t seem to get 100% effectiveness in our fail safe systems.”) that can harm one’s defense later on when the regulator comes knocking.  Instead, counsel can facilitate team members awareness and sensitivity as to what they say in the more permanent, electronic written medium.
  3. The MUMS (“Minor Use and Minor Species”) Act May Not be the Least Expensive Avenue for Development of New Veterinary Drugs.  It is often believed that MUMS approval processes save money and expedite new drug approvals.  If, however, the drug is being developed for ultimate use in food animals, ultimately the product will need to go through the more rigorous approval process anyway.  So, in the end, submitting first under MUMS may only, in the end, add to your expenses.
  4. For European Patent Owners, Now is the Time to Decide Whether to Opt Out of the Unified Patent Court.  This Court is being established to provide a court system for all participating states for litigating in all participating states matters involving a European Patent.  Article 83 of the Unified Patent Court provides for a transition period during which owners of patents will be able to opt out of the UPC.  A party who opts out may later opt in.  There will be a fee associated with opting out.  Although the amount has not yet been set, some believe it may end up being around 100 Euros.  Start planning now.
  5. Consumer Class Action Lawsuits Involving Animal Feed, Treats and Other Products are On the Rise.  New cases are being filed almost daily against all types of products in which the class action plaintiffs bring product mislabeling and/or false advertising claims.  Arbitration clauses have been one avenue used by companies to try to minimize litigation costs, but they have not always succeeded in doing so.  Coupon settlements are a new trend in class action settlements, but they are subjected to careful scrutiny by courts.  If suit is filed, consider filing a motion to dismiss or otherwise find a way to attack class certification.  Finally, the speakers recommended that, if a party is sued, they should consider a settlement strategy early on in the case.

These are but a few of the highlights from the program.  It was well attended and the content truly was relevant to those in the animal health industry.  If you would like more information about any of the topics touched on above, feel free to contact Joan Archer or any other member of the Husch Blackwell Animal Health Team.