The U.S. Department of Agriculture (“USDA”) announced late last month that it will be taking measures to support the enforcement of the Packers and Stockyards Act (“P&S Act”), a 100-year-old law designed to protect “poultry farmers, hog farmers, and cattle ranchers from unfair, deceptive and anti-competitive practices within the meat markets.” The proposed revisions involve additional changes to the unlawful conduct provisions of Title II of the P&S Act as well as a menu of grant and loan programs to address problems throughout the food supply chain. Continue Reading USDA to Begin Work to Strengthen Enforcement of the Packers and Stockyards Act

The Craft Beverage Modernization Act (“CBMA”) provisions of the Tax Cuts and Jobs Act of 2017 reduced excise taxes levied against all alcoholic beverage producers, large and small, foreign and domestic. In 2020, Congress made those tax cuts permanent and transferred responsibility for administering CBMA imported alcohol provisions from U.S. Customs and Border Protection (“CBP”) to the Treasury Department effective December 31, 2022. Domestic industry takes direct advantage of CBMA benefits when paying tax to TTB. However, foreign producers and importers will soon have to navigate a new system to take advantage of CBMA tax credits. Continue Reading Updates to the CBMA: How to Navigate TTB’s Proposed 2023 Refund Claims for Imported Alcohol System

On January 6, 2021, we blogged about two California farms’ challenges to California’s regulation requiring agricultural producers to grant unions access to their property to recruit workers.  The regulation required access for three hours a day – one hour before work started, one hour at lunch and one hour after work – for a maximum of 120 days per year.  The Ninth Circuit held that this regulation did not constitute a per se taking for purposes of the Fifth Amendment because it did not require access on a 24/7 basis.

In a 6-3 opinion on clear ideological lines, the Supreme Court reversed.  The majority opinion held that the Court had recognized two kinds of takings:  physical occupation of property, which is a per se taking, and regulatory takings, when the regulation goes “too far.”

The majority held that the California regulation was a per se taking because it appropriated the growers’ property for the benefit of the unions.  The courts have long held that one of the most fundamental elements of the right of property is the right to exclude others, and the regulation deprives the owners of that right for up to 360 hours a year.  It effectively forces the owners to grant an easement to the unions.

The majority held that the temporary nature of the easement was irrelevant.  As a matter of common sense, it makes no sense to apply one set of rules to an easement available 365 days a year and another to an easement 364 days a year.  As a matter of law, a number of prior Court cases had held that temporary invasions of private property were nonetheless a taking.  For example, a 1946 case found that the government had taken plaintiff’s property by periodically flying aircraft over it less than 100 feet off the ground.

The majority also held that it made no difference that the regulation did not provide a common law easement as defined by California law.  While state law is generally the source of property rights, it would be a wholesale elevation of form over substance to hold that the permanent, periodic access allowed by the regulation was not a taking.

As we predicted in our January 6 blog post, the majority went out of its way to emphasize that its holding would not impact ordinary health and safety inspections.  The majority held that there is a clear difference between a trespass and a taking.  It also held that there were various common law exceptions to the law of trespass, such a public official’s right to arrest or to engage in a reasonable search.  And there is nothing wrong with conditioning a permit or license on the condition that the recipient allow reasonable health and safety inspections.

Justice Kavanaugh concurred.  While the case did not involve labor unions, Justice Kavanaugh thought that the Court’s opinion in NLRB v. Babcock & Wilcox strongly supported the result.  In Babcock & Wilcox, the Court held that Congress could authorize labor unions to enter on private property to organize workers only when the unions had no other reasonable means of communicating with the workers elsewhere.  The day of the company town is over and there was no reason why union representatives could not contact workers at their place of residence.

The ruling does not mean that California cannot continue to require producers to allow limited union access to their premises.  It only means that California must amend its statutes to authorize just compensation to the owner.  The opinion does not address what compensation would be just or how it should be calculated.

Starting in 2024, U.S. consumers are going to start seeing new formulations of yogurt on supermarket shelves. The U.S. Food and Drug Administration (FDA) has released an amended standard of identity for yogurt as part of its Nutrition Innovation Strategy. According to the FDA, the new, modernized standard of identity for yogurt allows for greater innovation and technical advances in yogurt production while maintaining yogurt’s basic nature and essential characteristics. Continue Reading FDA Amends Yogurt Standard of Identity

Partner Carlos Rodriguez has authored an article on International Trade Insights regarding a troubling pattern of disappearing service contracts in ocean shipping and the resurgence of ocean tramp practices.

This occurrence has impacted agricultural companies which export to China, as carriers are holding cargo at the terminal for several weeks, then increase shipping rates, and if the higher rate is not accepted the cargo will not move.

For more information, please read the article here.

Recently, President Biden signed the Food Allergy Safety, Treatment, Education and Research (FASTER) Act. The law adds sesame to the list of major allergens, requiring its disclosure on food labels as an allergen.  Food manufacturers have until January 1, 2023 to add sesame allergen statements to their labels.

Current food labeling regulation allows sesame to be declared as a “natural flavor” or “natural spice.”  This creates uncertainty for consumers allergic to sesame when they review product labels at their local grocery stores. Continue Reading Foods Soon to Bear Sesame Allergen Labels

Last summer the Office of Environmental Health Hazard Assessment (OEHHA) proposed to amend Proposition 65, also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, to create an exception from the warning requirement for listed chemicals that are formed when food is cooked or heat processed. In essence the proposed rule would treat food products that contain acrylamide as a result of cooking or heating as “naturally occurring” thereby relieving manufacturers of the duty to warn consumers about the presence of acrylamide as long as the levels present are below the OEHHA proposed thresholds. Continue Reading New Modifications to OEHHA’s Proposed Rule Offer Additional Flexibility

The U.S. Food and Drug Administration (FDA) recently released a new action plan designed to further reduce exposure to toxic elements, including heavy metals, from foods for infants and young children. This represents the latest development concerning the widespread focus on the levels of heavy metals in baby food. The action plan, titled “Closer to Zero” highlights four steps that the FDA will take over the next three years to reduce exposure to toxic elements “to as low as possible.” Continue Reading FDA Issues Action Plan to Reduce Heavy Metals in Foods

We have blogged about Missouri’s meatless meat statute, most recently on June 4, 2020.  The statute purports to prohibit producers of plant- or lab-based “meat” from describing their products as such – e.g., bacon, burgers, or hot dogs.  Shortly after the statute took effect, the Missouri Department of Agriculture issued an interpretive bulletin asserting that the statute did not bar the use of these words, so long as there was clear disclosure about the true origin of the product.  This interpretation, of course, nullified the obvious purpose of the statute – to protect growers of conventional meat from competition. Continue Reading Missouri Meatless Meat Statute Update

On February 5, 2020, we blogged about the Kansas so-called “ag gag” law.  The objective of the statute is to discourage undercover scrutiny of agricultural facilities to obtain evidence of cruelty to animals, food safety violations, and other malfeasance and to broadcast that evidence to the public.  The Kansas statute accomplishes this by making it a criminal offence to enter onto the property to take photos or recordings or to remain on the property without the owner’s consent.  Consent induced by fraud is invalid.  The statute also provides a private right of action for damages.

Earlier this year, the District Court held that the Kansas law violated the First Amendment.  The state appealed and the result was a lively oral argument before the Tenth Circuit that could well result in a reversal.  Judge Hartz and Judge McHugh were most active; the third panel member, Judge Murphy, was silent.

Based on her questions, Judge McHugh was clearly sympathetic to the judgment.  She clearly thinks that the purpose of the statute is to silence undercover investigations and that violates the First Amendment.  Judge Hartz seemed much more sympathetic to the state.  He kept pushing the parties as to why the standard, plain vanilla trespass statute would not ban the conduct in question; as a general rule consent induced by misrepresentation is no consent at all.  Plaintiffs’ counsel finally agreed that the general trespass statute could apply to such conduct, which would suggest that the ag gag law is unnecessary.

We expect an opinion in a month or so.