October 16, 2019

ABA SEER Agricultural Management Committee Update

Erin Potter Sullenger

(1) Waters of the United States––Final Rule September 12, 2019––Step One

On September 12, 2019, the U.S. Environmental Protection Agency (EPA) and Department of the Army released the final rule repealing the 2015 Clean Water Rule. Also known as “Step One” of a two-part process, the Final Rule recodifies the regulatory text that existed prior to the 2015 Rule and reinstates the applicability of relevant agency guidance documents as well as Supreme Court decisions interpreting those regulations. The Final Rule cited four primary reasons for the repeal. First, the 2015 Rule exceeded the agencies’ authority in the Clean Water Act and the “significant nexus” test articulated in Rapanos. Second, the agencies failed to give due weight to the stated policy of the Clean Water Act (CWA) in section 101(b). Third, the 2015 Rule went too far in terms of exerting federal jurisdiction over traditional state land-use planning authority. Finally, the 2015 Rule’s “distance-based limitations suffered from certain procedural errors and a lack of adequate record support.” The Final Rule becomes effective 60 days after publication in the Federal Register.

With the recodification of the pre-2015 regulatory text, the Final Rule also eliminates the patchwork of applicability of the 2015 Rule that resulted from litigation in numerous courts around the United States. The 2015 Rule applied in only 22 states because several federal district courts had enjoined its applicability pending the outcome of litigation.

The agencies released the proposed rule for the next step, Step Two, to revise the definition of “waters of the United States” on December 11, 2018. The proposed rule stated that “the phrase ‘the waters of the United States’ [would] encompass relatively permanent flowing and standing waterbodies that are traditional navigable waters in their own right or that have a specific connection to traditional navigable waters, as well as wetlands abutting or having a direct hydrologic surface connection to those waters.” Over 600,000 comments were submitted during the public comment period, which closed April 15, 2019.

(2) Endangered Species Act Regulatory Rollback

On August 12, 2019, the U.S. Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) announced a series of three rules applicable to section 4 and 7 of the Endangered Species Act (ESA). Section 4, among other things, deals with adding species to or removing species from the Act’s protections and designating critical habitat, while section 7 addresses consultations with federal agencies. The rules were published in the Federal Register on August 27, 2019, and became effective September 26, 2019.

One rule, found at 84 Fed. Reg. 45,020, revises regulations for listing species and designating critical habitat. This rule revision comes in the wake of the 2018 U.S. Supreme Court case Weyerhaeuser v. Fish and Wildlife Service, 139 S Ct. 361 (aka, the “frog case”). In Weyerhaeuser, a unanimous Supreme Court decided that “critical habitat” must be habitable and that the FWS’s cost-benefits analysis is susceptible to judicial review. The habitat rule added a requirement that “an unoccupied area must have one or more of the physical or biological features essential to the conservation of the species in order to be considered as potential critical habitat.”

Another rule, found at 84 Fed. Reg. 44753, revises the regulations for prohibitions or protections for species listed at threatened. The default position of the FWS has been that most of the protections given to endangered species were extended to threatened species. This rule does away with that practice and requires the FWS to determine which protections are appropriate for threatened species. This does not affect species currently listed as threatened, but will apply to species listed after September 26, 2019.

The third rule, found at 84 Fed. Reg. 44,976, revises regulations for interagency cooperation. Under the ESA, if an agency is carrying out an action that may affect a listed or threatened species, there must be “informal consultation” with FWS or NMFS. If the action is likely to adversely affect such a species, there must be a “formal consultation” with FWS or NMFS. The new regulations are intended to make the consultation process more efficient and consistent. One such revision is setting a 60-day deadline for “informal consultations” after such review is requested. The rule also revises the definition of “destruction or adverse modification,” “effects of the action,” and “environmental baseline” that will impact how the Agencies determine how to evaluated the impact of the current agency’s action.

(3) California Moves to Ban Pesticide Chlorpyrifos after EPA Declines

In the wake of a lawsuit filed by Earthjustice against the EPA for its refusal to ban the use of the pesticide chlorpyrifos, the California Environmental Protection Agency (CalEPA) officially announced the Department of Pesticide Regulation (DPR) will begin actions to ban the use of this pesticide in California. This action does not come as a surprise in the state after chlorpyrifos was listed as a “toxic air contaminant” in April.

The process of banning the use of the pesticide is expected to take two years as the state agencies will be working to identify safer alternatives. The DPR’s interim restrictions from November 2018 will remain in place and include a ban on aerial spraying, quarter-mile buffer zones, and limiting use to crop-pest combinations that lack alternatives. California has dedicated $5.7 million to fund safer alternatives during the transition. The DPR formed the Alternatives to Chlorpyrifos Work Group, which includes leaders and experts from agriculture, California universities, environmental justice groups, farmworker health and safety organizations, and pesticide manufacturers, begins its work in identify viable alternatives.

Chlorpyrifos has been used as a pesticide since 1965 in both agricultural and nonagricultural applications. The most common use is with corn, but is also used on soybeans, tree nuts, vegetables, grapes, citrus, cotton, and alfalfa. Chlorpyrifos has been a key tool in Asian citrus psyllid control in Florida. Nonagricultural uses include golf courses, turf, greenhouses, and on nonstructural wood treatments such as utility poles and fence posts. Hawaii has already banned its use and the New York legislature passed a bill outlawing its use, which awaits the governor’s signature.

(4) EPA Rulemaking on Pesticides for Hemp

On August 21, 2019, the EPA announced it had received 10 pesticide applications to expand their labeling for use on hemp crops. The December 2018 Farm Bill removed hemp from the Controlled Substances Act, legalizing it for commercial use and production.

EPA opened a 30-day public comment period for the 10 pesticide products for application for industrial hemp in order to identify protection tools available for the 2020 application and growing seasons. Though not required to submit such decision to public comments, the EPA elected to request public comment “because of the potential significant interest from the public in these initial applications and in furtherance of being completely transparent about these applications.” The public comment period closed on September 23. According to regulations.gov, the EPA received 33 public comments.

(5) Oregon RICO Case against Marijuana Farmer

An Oregon vineyard owner filed a lawsuit against a neighboring marijuana farm under the Racketeer Influenced and Corrupt Organizations Act (RICO). Momtazi Family, LLC v. Wagner et al., No. 3:19-cv-00476-ER (D. Or.). The vineyard claims that the marijuana farm has diminished the vineyard’s value and marketability of its grapes after the vineyard suffered a loss in rental revenue and cancellation of orders for grapes from the vines nearest to the marijuana farm. The vineyard specifically claimed that it was forced to accept decreased rent from its winery tenant due to a perceived diminution in property value. It also alleged that a six-ton order of grapes was cancelled because the buyer became concerned that the odors emitted by the marijuana would permeate the grapes and taint any wine made from them. The allegation also alleged that terracing by the marijuana farm caused large amounts of sediment to flow into a fish-stocked reservoir on the vineyard creating a hazard for the fish and wildlife that form “an essential part” of the vineyard’s biodynamic operation.

The district court denied the marijuana farmer’s motion to dismiss finding that the vineyard raised plausible RICO claims because its allegations establish “an injury to a property interest” and alleged concrete financial loss caused by alleged racketeering activity. In 2017, the Tenth Circuit Court of Appeals in Safe Streets Alliance v. Alternative Holistic Healing, LLC, opened the door for private citizens to sue neighboring marijuana growers under the federal RICO statute, on the theory that the growers are interfering with the neighbors’ use of their land because cultivation is illegal under federal law.

The Oregon case is one of the few cases to overcome the hurdle of alleging a concrete loss due to the neighboring cultivation of marijuana and establish standing to bring this type of lawsuit.

(6) Pennsylvania Supreme Court in Pig Farm Dispute

When Scott Sponenberg filed an application to build a swine nursery barn with a manure storage facility with the Montour Township Zoning Board in 2013, the Township asked Sponenberg to provide legally binding assurances that his proposed operation of 4,800 pigs would not adversely impact the neighbors, namely via ground and surface water contamination, noise, and odors. On September 26, 2019, the Pennsylvania Supreme Court ruled that the Montour Township’s requirements were stricter than Pennsylvania’s Nutrient Management Act (NMA) and were preempted by the Act’s requirements.

The Supreme Court concluded that local governments are prohibited from imposing tighter controls than the NMA. “The act preempts any local regulation of nutrient management to the extent the local regulation imposes requirements that are stricter than, inconsistent with, or in conflict with the state law requirements.” The court also determined that even though Sponenberg’s planned pig barn was too small to trigger a mandatory filing of a manure handling plan, he was still protected from stricter local restrictions under the NMA.

Erin Potter Sullenger

Erin Potter Sullenger is an attorney at Crowe & Dunlevy in its Oklahoma City office. Her practice is focused on environmental regulatory compliance, environmental litigation, and administrative law.