Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Articles Posted in Agriculture Law
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Elkhorn is a farm labor contractor for a California-based vegetable grower. As part of Elkhorn’s orientation for incoming employees, Martinez-Gonzalez signed employment paperwork that included arbitration agreements. The district court held that the arbitration agreements resulted from undue influence and economic duress and were invalid and unenforceable.The Ninth Circuit reversed and remanded for determination of whether Martinez-Gonzalez’s allegation of federal and state labor and wage law violations fell within the scope of the arbitration agreements. Under California law, the doctrine of economic duress did not render the arbitration agreements unenforceable because Elkhorn did not commit a wrongful act and reasonable alternatives were available to Martinez-Gonzalez. Martinez-Gonzalez made the journey from Mexico to California, where he was dependent on Elkhorn housing and had already started work but, while “not ideal,” those circumstances did not constitute a “wrongful act” under California law. No one at Elkhorn told Martinez-Gonzalez that refusing to sign the agreements was a cause for termination. It was clearly erroneous for the district court to conclude that MartinezGonzalez lacked a reasonable alternative. The timing and place of the orientation did not show that Martinez-Gonzalez’s will was overborne; the lack of time to consult with attorneys or read the agreements did not improperly induce his signatures. Elkhorn’s representatives’ instructions to sign the agreements quickly were not insistent demands. View "Martinez-Gonzalez v. Elkhorn Packing Co. LLC" on Justia Law

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The district court dismissed a putative class action challenge to ConAgra’s poultry labels and its website advertising, alleging that ConAgra falsely advertised its frozen chicken products as natural and preservative-free, when in fact they contain synthetic ingredients. The court found the claims preempted by the federal Poultry Products Inspection Act (PPIA), 21 U.S.C. 467e, under which the U.S. Department of Agriculture’s Food Safety and Inspection Service’s (FSIS) had approved ConAgra’s poultry labels.The Ninth Circuit reversed in part; the mere existence of the label was insufficient to establish that it was reviewed and approved by FSIS. Preemption is an affirmative defense, and when the parties dispute whether review occurred at all, the defendant must produce evidence that the label was reviewed and approved by FSIS. If the evidence on remand shows that ConAgra’s label was approved by FSIS, then the claims are preempted. The plaintiff may not assert that FSIS’s approval decision was wrong. ConAgra’s website representations were not reviewed by FSIS. The label and the website were not materially identical. A challenge to that part of the website’s representation that was materially different from the representations on the label is not preempted. The court rejected an argument under the primary jurisdiction doctrine, a prudential doctrine under which courts may determine that the initial decision-making responsibility should be performed by the relevant agency rather than the courts. View "Cohen v. ConAgra Brands, Inc." on Justia Law

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Environmental organizations challenged a National Pollutant Discharge Elimination System (NPDES) Permit issued by the EPA for Idaho Concentrated Animal Feeding Operations (CAFOs) under the Clean Water Act. On CAFOs, manure is typically stored in lagoons; waste that leaks from lagoons can reach groundwater that can reach navigable waters. Since the 1970s, the EPA has regulated both CAFO production areas (animal confinement, storage, lagoons) and land-application areas (fields where manure and process wastewater are applied as fertilizer).The Ninth Circuit held that the challenge was timely, rejecting the EPA’s contention that the Permit largely relied on a 2003 Rule. The Permit lacked sufficient monitoring provisions to ensure compliance with the Permit’s “zero discharge” requirements for both production and land-application areas. EPA's discretion in crafting appropriate monitoring requirements for each NPDES permit is not unlimited. The Permit had sufficient monitoring requirements for above-ground discharges from production areas; CAFOs were required to perform daily inspections. The Permit had no monitoring provisions for underground discharges from production areas. While the Permit flatly prohibited discharges from land-application areas during dry weather it had no monitoring provisions, although the record showed that such discharges can occur during irrigation of fertilized CAFO fields. View "Food & Water Watch, Inc. v. United States Environmental Protection Agency" on Justia Law

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The Ninth Circuit affirmed the district court's dismissal for failure to state a claim of an action filed by the Council, seeking declaratory and injunctive relief on the ground that California's Proposition 12 violates the dormant Commerce Clause in banning the sale of whole pork meat (no matter where produced) from animals confined in a manner inconsistent with California standards.The panel concluded that, under its precedent, a state law violates the dormant Commerce Clause only in narrow circumstances. The panel explained that the complaint does not plausibly allege that such narrow circumstances apply to Proposition 12, and thus the district court did not err in dismissing the Council's complaint for failure to state a claim. In this case, even though the Council has plausibly alleged that Proposition 12 will have dramatic upstream effects and require pervasive changes to the pork production industry nationwide, the panel concluded hat it has not stated a violation of the dormant Commerce Clause under existing precedent. The panel stated that alleged cost increases to market participants and customers did not qualify as a substantial burden to interstate commerce for purposes of the dormant Commerce Clause. View "National Pork Producers Council v. Ross" on Justia Law

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The Beef Promotion and Research Act of 1985 imposes a $1 assessment, or “checkoff,” on each head of cattle sold in the U.S. to fund beef consumption promotional activities. The Secretary of Agriculture oversees the program. The Montana Beef Council and other qualified state beef councils (QSBCs), receive a portion of the checkoff assessments to fund promotional activities and may direct a portion of these funds to third parties for the production of advertisements and other promotional materials. R-CALF's members include cattle producers who object to their QSBCs’ advertising campaigns. In 2016, the Secretary entered into memoranda of understanding (MOUs) with QSBCs which granted the Secretary preapproval authority over promotions and allowed the Secretary to decertify noncompliant QSBCs, terminating their access to checkoff funds. The Secretary must preapprove all contracts to third parties and any resulting plans. QSBCs can make noncontractual transfers of checkoff funds to third parties for promotional materials which do not need to be pre-approved. Plaintiffs contend that the distribution of funds under these arrangements is an unconstitutional compelled subsidy of private speech.The Ninth Circuit affirmed summary judgment in favor of the federal defendants after holding that R-CALF had associational standing and direct standing to sue QSBCs. The speech generated by the third parties for promotional materials was government speech, exempt from First Amendment scrutiny. Given the breadth of the Secretary's authority, third-party speech not subject to pre-approval was effectively controlled by the government. View "Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America v. Vilsack" on Justia Law

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In 2018, the EPA approved conditional registrations for three dicamba-based herbicides for an additional two years. Petitioners sought review of the 2018 decision, alleging that it violates both the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Endangered Species Act (ESA).The Ninth Circuit held that the EPA's 2018 decision, and the conditional new-use registrations of XtendiMax, Engenia, and FeXapan for use on DT soybean and cotton that are premised on that decision, violate FIFRA. The panel explained that it need not decide whether substantial evidence supports a finding that the applicants submitted satisfactory data, because the panel held that the EPA substantially understated risks that it acknowledged and failed entirely to acknowledge other risks. In this case, among other things, the EPA substantially understated the amount of DT seed acreage that had been planted in 2018, and, correspondingly, the amount of dicamba herbicide that had been sprayed on post-emergent crops; the EPA purported to be agnostic as to whether formal complaints of dicamba damage under-reported or overreported the actual damage, when record evidence clearly showed that dicamba damage was substantially under-reported; and the EPA refused to estimate the amount of dicamba damage, characterizing such damage as "potential" and "alleged," when record evidence showed that dicamba had caused substantial and undisputed damage. Therefore, the panel vacated the EPA's 2018 decision and the three registrations premised on that decision. View "National Family Farm Coalition v. U.S. Environmental Protection Agency" on Justia Law

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The Ninth Circuit affirmed the district court's dismissal of an appeal by Growers against members of the California Agricultural Labor Relations Board who promulgated a regulation allowing union organizers access to agricultural employees at employer worksites under specific circumstances. Growers sought declaratory and injunctive relief, alleging that the access regulation, as applied to them, was unconstitutional.The panel held that the access regulation as applied to the Growers did not amount to a per se physical taking of their property in violation of the Fifth Amendment. In this case, the Growers did not suffer a permanent physical invasion that would constitute a per se taking. The panel also held that the Growers have not plausibly alleged that the access regulation effects a seizure within the meaning of the Fourth Amendment. View "Cedar Point Nursery v. Shiroma" on Justia Law

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The en banc court vacated the district court's summary judgment for AgriCap in an action brought by produce growers under the Perishable Agricultural Commodities Act (PACA).The en banc court joined other circuits and adopted a "true sale" test to determine whether assets transferred in transactions that are labeled "sales" remained assets of a PACA trust. The court held that a court must conduct a two-step inquiry when determining whether the questioned transaction is a sale or creates a security interest, i.e., a loan. First, a court must apply a threshold true sale test of which the transfer-of-risk is a key, but not the sole, factor. If a court concludes that there was a true sale, it must then determine if the transaction was commercially reasonable. The court held that a district court should look to the substance of the transaction to determine whether the transaction is a true sale or a secured loan. In doing so, the transfer of risk should be a primary factor to which a court looks. View "G.W. Palmer & Co. v. Agricap Financial" on Justia Law

Posted in: Agriculture Law
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Plaintiffs submitted rulemaking petitions to the FDA, FTC, AMS, and FSIS, requesting that each agency promulgate regulations that would require all egg cartons to identify the conditions in which the egglaying hens were kept during production. Plaintiffs subsequently filed suit claiming that each agency had acted arbitrarily and capriciously in dismissing their rulemaking petitions. The district court granted summary judgment to defendants. The court concluded that the FSIS did not act arbitrarily or capriciously in denying plaintiffs' rulemaking petition where plaintiffs' proposed labeling regulations concern only shell eggs and thus fall outside of the FSIS's labeling jurisdiction under the Egg Products Inspection Act (EPIA), 21 U.S.C. 1031–56; the AMS also did not act arbitrarily or capriciously because the agency correctly concluded that it lacks the authority to promulgate mandatory labeling requirements for shell eggs; the FTC did not act arbitrarily or capriciously where the agency could not conclude that the potentially unfair or deceptive labeling practices plaintiffs challenge were "prevalent" as that term was used in the Federal Trade Commission Act (FTCA), 15 U.S.C. 41-58, and the agency reasonably denied the petition based on its discretion to combat any potentially misleading egg labeling through ad hoc enforcement proceedings; and the FDA's explanation for denying plaintiffs' petition barely met its low burden of demonstrating that it considered the potential problem and providing a reasonable explanation of its decision. Accordingly, the court affirmed the judgment. View "Compassion Over Killing v. FDA" on Justia Law

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Growers sold their perishable agricultural products on credit to a distributor, Tanimura, which made Tanimura trustee over a Perishable Agricultural Commodities Act (PACA), 7 U.S.C. 499a-499t, trust holding the perishable products and any resulting proceeds for the Growers as PACA-trust beneficiaries. Tanimura then sold the products on credit to third parties and transferred its own resulting accounts receivable to Agricap through a Factoring Agreement or sale of accounts. In this suit against Agricap, Growers alleged that the Factoring Agreement was merely a secured lending arrangement structured to look like a sale but transferring no substantial risk of nonpayment on the accounts; the accounts receivable and proceeds remained trust property under PACA; because the accounts receivable remained trust property, Tanimura breached the PACA trust and Agricap was complicit in the breach; and PACA-trust beneficiaries such as Growers held an interest superior to Agricap, and Agricap was liable to Growers. The court agreed with the district court's conclusion that Boulder Fruit Express & Heger Organic Farm Sales v. Transportation Factoring, Inc., controls the outcome of the case. The district court noted that the Ninth Circuit in Boulder Fruit expressly addressed the commercial reasonableness of a factoring agreement but implicitly rejected a separate, transfer-of-risk test. The district court further noted that the factoring agreement in Boulder Fruit transferred even less risk than the Factoring Agreement in the present case. Accordingly, the court affirmed the judgment. View "G.W. Palmer & Co. v. Agricap Financial" on Justia Law