On February 17, 2017, we blogged about the Fifth Circuit’s ruling in Markle Interests LLC v. U.S. Fish & Wildlife Service, upholding the Service’s designation of 1500 acres of Louisiana property as critical habitat for the dusky gopher frog, despite the absence of the frog from that land for over 50 years and the complete inability of the property to support the frog.

Markle has now filed a petition for certiorari, supported by a number of amici curiae, including the Chamber of Commerce and 18 state attorneys general.  The same 18 attorneys general have filed suit in District Court to enjoin the 2016 amendments to the regulations.

In April 2017, the D.C. Circuit issued a decision in Waterkeeper Alliance v. EPA, 853 F.3d 527, which, if upheld, will require approximately 63,000 small- and medium-sized farms that were previously exempt from the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and Emergency Planning and Community Right-to-Know Act (EPCRA) reporting requirements to come into compliance. Read Husch Blackwell’s analysis of the decision and its implications here.

Earlier this week, the U.S. Environmental Protection Agency (EPA) filed a motion to stay the mandate for six months. If the stay is issued, farms will have until January to come into compliance with the reporting requirements. It will also give the farming industry more time to file a petition for certiorari with the US Supreme Court and challenge the D.C. Circuit decision.   Otherwise, October 1 will be the deadline for filing a petition for certiorari as the mandate will be issued on that date and the reporting requirement will then take immediate effect.

According to EPA, farmers from all over the country have asked EPA for help in calculating their emissions. A stay is needed so the agency can develop guidance on how to measure emissions from animal waste and comply with the new reporting requirements. A stay would also provide farms relief from enforcement actions while they come into compliance. EPCRA and CERCLA contain citizen suit provisions and noncompliance carries the risk of administrative, civil, or even criminal penalties. A stay of the issuance of the mandate would allow farms temporary relief from these risks and enable them to focus on coming into compliance.

On February 9, 2017, we posted about legal challenges to designations of endangered species by the U.S. Fish & Wildlife Service, when the specie is confined to a single state. The Tenth Circuit Court of Appeals has reversed the first of these challenges. People for the Ethical Treatment of Property Owners v. U.S. Fish & Wildlife Service, No. 14-4151 (2017).

The court of appeals held that the Endangered Species Act (ESA), taken as a whole, substantially affected interstate commerce. It distinguished Supreme Court decisions striking down the Violence Against Women Act and the Gun-Free School Zones, on the ground that those were small parts of omnibus bills covering a wide variety of disparate subjects. By contrast, the ESA was a comprehensive bill addressed to one particular problem.

The court of appeals reasoned that the ESA as a whole clearly had a substantial effect on interstate commerce. First, prohibiting the taking of endangered species has a clear relationship to economic activity, the very activity which in many cases led to the endangerment finding. Second, Congress believed that by conserving species, it would promote commerce in the long term. Third, there is a multi-billion dollar-a-year illegal trade in endangered species.

The court of appeals also believed that regulation of purely intrastate species was necessary to the ESA’s comprehensive scheme. It found that 68% of endangered species were purely intrastate, so their exclusion would drive a gaping hole in the statute.

Expect a petition for certiorari.

The final Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption Rule (“Produce Safety Rule”) has proven to be one of the more confusing foundational rules issued by the U.S. Food and Drug Administration (“FDA”) under the Food Safety Modernization Act (“FSMA”). In particular, farmers have struggled to understand and come into compliance with the Produce Safety Rule’s complex agricultural water standards ever since FDA finalized the rule in 2015. In recognition of these challenges, the FDA announced on March 20, 2017, that it is exploring ways to simplify the testing requirements for agricultural water.

Currently, the Produce Safety Rule sets microbial quality standards for agricultural water, as it can be a major source of produce contamination. The Rule establishes two sets of criteria for microbial water quality based on the presence of generic E. coli, which indicates the presence of fecal contamination.

  1. Under the Rule, no detectable generic E. coli are allowed for uses of agricultural water where there is a risk that microbes could be transferred to produce through direct or indirect contact. This includes water used for washing hands during and after harvest, water used on food contact surfaces, water that comes in direct contact with produce during or after harvest, and water used for sprout irrigation.
  2. The second standard sets numerical criteria for agricultural water that is applied directly to growing produce, other than sprouts. The criteria are based on two values-the geometric mean (“GM”) and the statistical threshold (“STV”). The GM essentially represents the average amount of generic E. coli levels in a water source. The STV reflects the amount of variability in the water quality, indicating E. coli levels when adverse conditions come into play, like rainfall or a high water levels that wash waste into rivers and canals.

In response to this rule, the FDA received a significant amount of feedback from the agricultural industry pointing out that these standards are too complicated and too difficult for regulated parties to understand, translate, and implement. As a result, the FDA plans to work closely with the agricultural industry to explore the possibility of simplifying the agricultural water standards. This process will likely take a considerable amount of time, as it will likely require a formal rulemaking since the current rule does not provide much flexibility.

Nevertheless, farmers that are subject to the Produce Safety Rule should remain mindful of the looming compliance deadlines.  While the Rule establishes a staggered timeline designed to give some farmers extra time to come into compliance, the compliance date for the agricultural water-related requirements is January 27, 2020 for large businesses, January 26, 2021 for small businesses, and January 26, 2022 for very small businesses.

Ideally, FDA’s review of the standard will be quick, so that changes to the standard and testing frequencies are made before farms are expected to come into compliance. However, it is also possible that the FDA will extend the dates for complying beyond after the initial compliance deadline in 2020.

On February 13, 2017, by an eight to six vote, the Fifth Circuit denied en banc review of the panel opinion in Markle Interests, LLC v. U.S. Fish & Wildlife Service.  The case dealt with the predecessor to the new regulations effective March 2016, but it is highly significant in determining the extent of Fish & Wildlife’s authority to designate land as critical habitat.

The case concerns the dusky gopher frog, an endangered species that now resides exclusively in Mississippi.  At one time, the frog inhabited land in St. Tammany Parish in Louisiana but has not been seen there for more than 50 years.  Nonetheless, Fish & Wildlife designated some 1500 acres of land in Louisiana as unoccupied critical habitat.

The rationale was that the Louisiana property had one essential condition for conservation of the frog:  five ephemeral ponds.  An ephemeral pond is one that periodically dries up and hence cannot support fish.  The frog uses the pond to lay its eggs safe from predatory fish.

The problem is that the Louisiana property is not currently habitable by the frog.  Approximately 90% of the property is covered with closed-canopy loblolly pine trees, which would have to be removed and replaced with another variety to make the area habitable for the frog.  Fish & Wildlife has no authority to compel private landowners to undertake these changes and there is no evidence that they will.

The opportunity cost to the landowners may be more than $30 million.  We expect a cert. petition.

The State of Missouri recently joined 19 other states (7 of which are in Husch Blackwell’s geographic footprint) in challenging recently-enacted regulations extending the scope of the Endangered Species Act (ESA). State of Alabama ex rel. Strange v. Nat’l Marine Fisheries Service, No.16-cv-00593 (S.D. Ala.).  The National Marine Fisheries Service and the Fish & Wildlife Service (the Services) published the final regulations in February 2016 and they became effective in March 2016.

The ESA requires federal agencies to assure that their actions do not result in the “destruction or adverse modification” of habitat critical to the conservation of threatened or endangered species. Thus, a federal agency may not authorize or fund activities that adversely affect critical habitat.  The new regulations change the method for designating habitat as critical and the meaning of adverse modification.

The ESA distinguishes between “occupied” and “unoccupied” habitat. For the former, the Services must establish that the site has physical or biological features that are essential to the conservation of a species and may require special management considerations or protection.  For the latter, the Services must establish that habitat limited to its current range would be inadequate to ensure conservation of the species.  The statute explicitly states that critical habitat may not include the entire geographical area that can be occupied by the species.

According to the lawsuit, the new regulations exceed the Services’ powers under the ESA in four respects. First, they permit the Services to designate unoccupied land as critical habitat, even if unnecessary to recovery of the species.  Second, they permit the Services to designate areas as occupied critical habitat, even when neither occupied nor containing features necessary to conservation of the species.  Third, they allow the Services to designate uninhabited areas as critical habitat even if incapable of supporting the species.  Fourth, they allow the Services to declare broad, general swaths of land or water as critical habitat without requiring specificity. Continue Reading States Challenge New Endangered Species Act Regulations

In 1941, an Ohio farmer named Roscoe Filburn planted more wheat on his farm than the Agricultural Adjustment Act of 1938 permitted. He did not sell the wheat on the open market.  Rather, he fed the wheat to his livestock.  The Secretary of Agriculture imposed a penalty on Filburn for the excess.  Filburn sued, alleging that he had engaged in no commerce at all, let alone interstate commerce.

The District Court agreed and enjoined the penalty.  The Supreme Court unanimously reversed.  It acknowledged that Filburn had not engaged in any transaction.  Had he not violated the quota, however, he would have had to buy wheat on the open market.  The Court also acknowledged that Filburn’s contribution to higher priced wheat was trivial.  Combined with the similar actions of others, however, the effect on price was anything but trivial.  Thus, Congress had the authority under the commerce clause to regulate Filburn’s wheat.

In the years following, courts repeatedly relied on this aggregate theory of commerce to justify federal regulation of many items.  The constitutional foundation for the 1964 Civil Rights Act, for example, was the commerce clause, not the 14th amendment.  Similarly, the basis for federal regulation of purely intrastate sale of medical marijuana was the aggregate theory.  A number of courts have relied on that theory in sustaining the constitutionality of the Endangered Species Act (ESA) when applied to purely intrastate activities.

Two pending cases may overturn that result.  In People for the Ethical Treatment of Property Owners v. U.S. Fish & Wildlife Service, the Service designated the Utah prairie dog as an endangered species, though it subsequently downgraded the status to threatened.  The Utah prairie dog resides exclusively in Utah and there is no commercial market for it.  Plaintiff argued that the Service’s effort to regulate it exceeded Congress’ commerce clause powers. Continue Reading Potential Limits on Endangered Species Act

The federal Toxic Substances Control Act, originally enacted in 1976, will be substantially revised as a result of amendments passed by the House of Representatives last month and by the Senate this week.  Although pesticides remain excluded from the definition of chemical substances under the Act, many other chemical substances and mixtures manufactured and imported in the Food and Agriculture industry are subject to regulation.  Please see our summary of the changes.  For additional information please contact Bob Wilkinson or any member of our Environmental & Chemical Regulation team.

EPA today announced its seven national enforcement initiatives for fiscal years 2017 through 2019. EPA is continuing to focus using its enforcement authority to help prevent the contamination of surface and ground water by animal waste. In the announcement the agency noted that it has concluded 217 Clean Water Act enforcement actions at concentrated animal feeding operations since 2011 under this initiative. Owners and operators of animal feeding, handling and processing facilities can expect continued scrutiny by EPA over the next several years.

Husch Blackwell’s Food and Agribusiness group includes experienced environmental attorneys with significant experience in handling federal Clean Water Act enforcement actions and related regulatory compliance issues.