Class 26 Chap' 9

1
Class 26 -- Chap. 9 11

• Recitation
• Case Students
• Processing p. 238 action, issue facts Lance
  Hofmann
• Law, holding rule Doug
• Papas, p. 243 - action, issue facts Chris
• Law, holding rule Lance Mathies
• Keller, p. 313 action, issue facts Justin
• Law, holding rule Michael
• Laird, p. 315 -- action, issue facts Aaron
• Law, holding rule Andrew
• Southland, p.320 Action, issue Facts--Kent
• Law, holding rule -- Holly

2
Quiz 8

• 4. A friendly institution, not party to the
  litigation, may enter a brief in a legal
  proceedings. Their presentation is
• a. A summons
• b. An answer
• c. An amicus curiae or
• "friend of the court" brief.
•   5. Federal law makes soil conservation
  practices for some producers a requirement for
  price and income support payments?
• 6. This Ag Law Course is
• a. About right
• b. Better than expected
• c. No opinion
• d. Below expectations
• e. Above average

• 1. Administration of Section 404 of the federal
  Clean Water Act may restrict the dredging of a
  man-made ditch.
• 2. An Indiana county drainage board may
• a. Clear a tile drain stoppage on private
  property.
• b. Preempts the authority of the Army Corp. (COE)
  and IDNR
• c. Both a. and b.
• 3. The modified Common enemy rule, dealing with
  land surface drainage, has been the law in
  Indiana.

3
Food Security Program of 1985

• 1. Sodbuster -- restricts the conversion of
  highly
• erodible land to crop production.
• 2. Swampbuster -- restricts the conversion of
  wetlands
• to cropland.
• 3. Conservation compliance -- requires the
  development and implementation of a
  plan for lands that are highly erodible (HEL)
• a plan by 90, and in place by 95
• the NRCS staff (formerly SCS) determine which
  land and which practices are acceptable.
• Violation of the above brings loss of specified
  benefits from various federal programs.
  

4
1985 Food Security Program

• 4. Conservation Reserve program -- a voluntary
  land retirement program for the most erosive
  cropland for 10 year periods for a rent per
  acre
• farmers offer their acres at a price, and the
  program authorities elect to accept or not
• once in the CRP, no crops including hay or
  grazing is permitted
• unless with the express permission of the USDA

5
Govnt Program Up-to-date

• The 1990, and 1996 legislation continues these
  programs.
• Criteria for CRP with the last round of
  legislation to favor lands that promotes cleaner
  water.
• The 2002 Legislation maintains and expands on
  environmental provisions.
• The 2002 Farm bill is budgeted at approximately
  180 billion over 10-year period.
• Conservation provisions received 17 billion of
  the 180 billion

6
Conservation Program Acronyms

• CCEP Comprehensive Conservation Enhancement
  Program
• CRP Conservation Reserve Program
• CSP Conservation Security Program
• EQIP Environmental Quality Incentive Program
• FPP Farmland Protection Program
• GRP Grasslands Reserve Program
• NRCS Natural Resources Conservation Service
• USDA U.S. Department of Agriculture
• WHIP Wildlife Habitat Improvement Program
• WRP Wetland Reserve Program

7
Conservation Security Program

• New and different approach to conservation
• For a broader segment of the agricultural
  community by including all commodity producers.
• Rewards those producers who presently maintain or
  agree to begin a more sustainable production
  system.
• It shifts the distribution of payments
  geographically, by commodity, by size of
  operation.

8
Air Pollution

• Agriculture contributes to air pollution
• But, to a much less extent than large urban and
  industrial areas
• Clean Air Act establishes national air quality
  standards, and states also have separate
  standards that may exceed the federal standards,
  e.g., Calif.
• States enforce air quality standards
• Agricultures biggest concern may be odor problems

9
Processing and Books, Inc. v.Pollution Control
Board. S. Ct. Ill 76

• Lance Hofmann Action?
• To enforce a fine, and cease and desist order
• Issue?
• Is the agency within its capacity under the
  statute to levy a fine, and a cease and desist
  order?

10
Processing and Books, Inc.

• Facts
• An egg farm was fined and ordered to cease and
  desist for air pollution due to manure, and
  incinerating chickens.
• Operation was in an area zoned for ag uses.
• A 300,000 layer operation.

11
Processing and Books, Inc.

• Doug
• Holding The offense for which the defendant was
  charged is in the Illinois Environmental
  Protection Act
• Air pollution is defined as the presence in the
  atmosphere of one or more contaminants in
  sufficient quantity, and of such characteristics,
  and duration as to be injurious to human, life,
  to health, or to property, or to unreasonably
  interfere with the enjoyment of life or property.

12
Processing and Books, Inc.

• Holding determination of a violation the board
  must consider
• 1. All facts and circumstances bearing on the
  emissions
• 2. Social and economic value of the source
• 3. Suitability of the source in the area it is in
• 4. Technical practicability and economic
  reasonableness of reducing or eliminating the
  emission

13
Processing and Books, Inc.

• Holding While the def had significant economic
  value,
• a serious odor problem was documented
• Odor came from the fields where the manure was
  spread, from large holding tanks, from manure
  treatment facilities, and incineration of about
  175 chickens a day.
• What is unreasonable must be beyond what is
  trivial.
• The agency fine and order were within their
  discretion.

14
Other Areas of Concern

• Air Pollution
• Organic compounds and particulate matter in the
  air
• Open burning is regulated
• Noise pollution
• Pesticide regulation in ag production

15
Pesticide Regulation

• Federal Rules Started with a 1910 act which
  prohibited the manufacture or sale of
  adulterated, misbranded insecticides, and
  fungicides.
• In 1947 the Federal Insecticide, Fungicide, and
  Rodenticide Act (FIFRA) was enacted.
• 1972 revisions now provide for
• general and restricted use chemicals.
• for certification of applicators.
• See handout on Pesticide Spray Liability for
  statutes.

16
Pesticide Regulation

• Classification All pesticides must be registered
  with the EPA
• Pesticides must meet their claims, and not have
  substantial adverse effects on the environment
  when properly used.
• Manufacturers must establish the benefits and
  safety of the pesticide with appropriate data
  before they may be registered.

17
Pesticide Regulation

• Certification of Applicators
• Certification in Indiana and other states is by a
  state program approved by EPA.
• Purdue CES has conducted a training and
  certification program for many years.
• Private applicators are certified to use
  restricted use pesticides for producing
  agricultural commodities on property owned by
  their
• employer or on property of another person if on
  a share help basis.
• Commercial applicators refers to all other
  applicators -- who may be specialized in their
  use of chemicals.

18
Pesticide Regulation

• Worker protection
• OSHA regulations deal with worker protection
  requirements, e.g.,
• time limits on entering application areas
• protective clothing
• emergency supplies

19
Pesticide Regulation

• State Regulations
• States may have specific applicator requirements
  such as bonding or liability insurance.
• Indiana has a requirement, at
• IC 15-3-3.6 (see HO,Pesticide Spray Drift
  Liability Law, App. A)
• Use permits are required in Calif.
• Note, a locality can limit the application of
  pesticide.
• Indiana requires a local ordinance, restricting
  pesticide use
• to be approved by the Indiana Pesticide Review
  Board.
• See IC 15-3-3.5-12 for the Review Board.
• This as a 90s law intended to avoid the
  Mortier case from Wisconsin.    

20
What is the role of the pesticide investigator?

• After receiving a complaint, an investigator will
  contact pertinent individuals to conduct
  inspections and/or interviews.
• The investigator will document the incident
  through maps, photographs, affidavits, pesticide
  label reviews, and on-site assessments.
• The investigator will focus on whether a
  violation of state or federal pesticide law has
  occurred.

21
Role of the pesticide investigator?

• The investigator's observations will be compiled
  into a case summary of the incident.
• The investigator may also collect physical
  evidence such as soil, vegetation, and water
  samples to aid in the determination of any
  violations of the pesticide laws.
• Physical samples are not taken in every
  investigation.
• The investigator will determine if samples might
  be useful and admissible in any enforcement
  proceeding.
• Purdue Pesticide Programs site
• http//www.btny.purdue.edu/PPP/PPP_pubs.html

22
Papas v. Upjohn Co., U. S. Ct. of Appeals, 11th
Cir., 91

• Chris Action?
• Negligence, strict liability and breach of an
  implied warranty of merchantability.
• Issue?
• Does FIFRA preempt the claim?
• Facts Pl complains of health problems from a dog
  insecticide by Upjohn.

23
Papas

• The basic charge was inadequate labeling.
• Upjohn/Zoecon argued they had satisfied FIFRA and
  a claim is preempted.
• District court granted def a summary judgment.
• Lance Mathies
• Holding Lower court upheld.

24
Papas -- Holding

• Preemption is based on the supremacy clause of
  the U.S. Constitution. Preemption can be
  inferred
• 1. If there is an outright conflict.
• 2. If compliance with both federal state law is
  physically impossible.
• 3. If there is an implicit barrier in federal law
  to state regulation.
• 4. If Congress legislated comprehensively, thus
  occupying an entire field no room for states to
  add to federal law.
• 5. If the state law stands as an obstacle to the
  full objectives of Congress.

25
Papas -- Holding

• Under FIFRA, the federal government (EPA) has the
  sole and exclusive right to regulate pesticide
  labels.
• FIFRA impliedly preempts state common law tort
  actions based on labeling claims in several ways.
• Feds have preempted the entire field of label
  regulation, leaving no room for states even for
  common law suits.
• Uniform labeling across the country is one strong
  argument.

26
Papas -- Holding

• The Label
• For EPA-registered pesticides, the warning and
  use statements on the label indicates that those
  statements are adequate to protect man and the
  environment
• That the pesticide as labeled does not pose any
  unreasonable risk to man or the environment,
  taking into account the economic, social, and
  environmental costs and benefits of the use of
  any pesticide.

27
At www.findlaw.comenter FIFRA

• Nebraska Supreme Court Upholds Preemption of
  Warranty Claims Pfeifer, et al. v. E. I. du Pont
  de Nemours Co., .N.W.2d., 2000 WL 148944 (Neb.
  Feb. 11, 2000).
• On February 11, 2000, the Nebraska Supreme Court
  joined the majority of federal and state courts
  that have held FIFRA preempts warranty claims.

28
Hazardous Substances Waste Disposal

• Resource Conservation and Recovery Act, 76
• RCRA deals with the identification,
  transportation, treatment, storage, and disposal
  of hazardous waste. (See current handout
  articles.)
• EPA not only was required to identify hazardous
  wastes, but also to establish regulations to
  monitor and control hazardous waste storage and
  disposal.
• In 1980, Comprehensive, Environmental Response
  Compensation, and Liability Act
• CERCLA, (Superfund) was amended by SARA in 86

29
Superfund

• EPA may force clean-up of hazardous waste sites.
• Potentially Responsible Parties (PRPs) may be
  both current and past owners or operators of a
  site, and those who benefited from the use of the
  site.
• Innocent landowner(IL)--a major defense
• A buyer gets IL status if all appropriate
  inquiry was conducted before acquisition of the
  property to discover any potential for
  environmental contamination.
• A purchaser has strong incentive to audit
• Note Brownfields movement in the last 15 years.

30
Regulation of Research in Biotechnology

• Regulations are needed to control experiments in
  biotechnology.
• Ethical concern for the species and the moral
  questions involving mans right to tamper with
  nature.
• What are the long term societal effects?

31
Natl. Inst. Of Health

• Sets rules for the projects it funds.
• USDA has established processes for safety and
  risks involved in bio-technologically developed
  or altered products or organisms.

32
Minerals , Timber, and other NaturalResource Use
Problems

• Numerous rules and regs apply to oil, gas, coal
  exploration and mining.
• Indiana DNR has divisions for oil gas as well
  as coal in the state regulatory government.
• Indiana Geological Survey at Bloomington has a
  lot of data relating to mineral resources.

33
Minerals , Timber, and other NaturalResource Use
Problems

• Considerable leasing activity for gas, oil, coal
  and even shale a few years ago.
• See, Leasing mineral interests by G. Harrison
  at http//www.ces.purdue.edu/extmedia/agecon.htm
  Under Legal Affairs.
• There are many considerations for farming around
  such activity, and for maintenance of the land.

34
Minerals , Timber, and other NaturalResource Use
Problems

• Law of mineral leases
• A mineral rights estate may be severed from the
  fee, e.g.
• Gas, oil coal lease
• Provisions to consider
• How the land is to be used, accessed
• Compensation or royalty for minerals removed
• Initial bonus payment
• Time frame of activity

35
Minerals , Timber, and other NaturalResource Use
Problems

• Surface Mining--Federal Legislation
• Surface Mining Control and Reclamation Act of 77
  --requires the restoration of land once strip
  mining is complete.
• 1. Back to original contour
• 2. Control erosion and pollution
• 3. Separate top soil, and restore
• 4. Create water impounding
• 5. Seal auger holes to prevent drainage
• 6. Stabilize waste piles

36
Surface Mining Control and Reclamation Act of
77, cont.

• 7. Refrain from surface mining with in 500 ft of
  an underground mine
• 8. Construct access roads to prevent erosion,
  pollution, and
• damage to water flow
• 9. Blast only after notice
• 10. Establish a vegetative cover
• 11. Protect off site areas from slides, etc.
• 12. Dispose spoil to prevent mass movement and
  soil erosion
• 13. min. disturbance to the hydrologic balance
• prevent pollution with acids,etc
• and restore recharge capacity

37
Timber

• Federal and State Assistance
• See NCRS staff in the FSA office
• Forest specialists available
• Indiana allows a 1/acre assessment for lands
  designated as permanent forests.
• Timber Cutting Contracts
• Tax law is important--See Bill Hoovers Forest
  Owners Guide to Federal Income Tax USDA, Ag
  Handbook, No. 708

38
Product Liability, p. 312

• Express Warranties
• Arise by implication, and
• By statements about a product
• oral
• written
• puffing?
• They may or may not bring liability
• See Figure 11-1 page 312,

39
Keller v. Flynn, App. Ct. Ill 52

• Justin Action?
• for damages due to dead hogs under an express
  warranty.
• Issue?
• Did the necessary elements exist to set-up an
  express warranty?

40
Keller

• Facts?
• Pl/Keller purchased hogs at sale barn.
• Several of the hogs died in the feedlot.
• Vaccination certificates were received.
• Seller made statements that the hogs were
  healthy.
• The trial court held for the pl.

41
Keller

• Michael
• Holding Upheld the trial court.
• The pl was induced to buy the hogs with
  statements about hogs good health.
• Evidence in the record suggests the pl relied on
  these positive statements.
• Based on the evidence before the jury no
  reversible error can be found.

42
Implied Warranties

• Caveat Emptor(CE)-- let the buyer beware
• Puts the burden on the buyer to see the defect(s)
  before buying.
• Many products today come with implied warranties
  taking them outside of caveat emptor.
• Article 2 of the Uniform Commercial Code prevails
  in modern law.

43
Implied Warranties

• Sec 2-314 Merchantability--Usage of Trade where
  the seller is a merchant goods must be at least
  such as
• passes without objection in the trade under the
  contract description
• for fungible goods, of fair and average quality
• are fit for the ordinary purposes for which
• such goods are used
• run within the variations permitted by the
  agreement
• conform to the promises or affirmations of fact
  on the container of label

44
Implied Warranties

• Sec. 2-315. Fitness for Particular Purpose says
• Where the seller at the time of contracting has
  reason to know any particular purpose for which
  the goods are required,
• and the buyer is relying on the sellers skill or
  judgment to select or furnish suitable goods,
• there is, unless excluded or modified under the
  next section an implied warranty that the goods
  shall be fit for such purpose.
• E.g., Livestock feed is fit for consumption.
• A herbicide will perform according to the label
  and as advertised.

45
Laird v. Scribner Coop., Inc.S. Ct. of Neb. 91

• Aaron Action?
• Damages via a fitness warranty under Article 2 of
  the UCC.
• Issue--Does a warranty extend under these facts?

46
Laird

• Facts Laird was a hog producer.
• In March 86 he contracted for corn from an
  elevator via a former employee who was the
  sellers manager.
• Laird agreed to take about 1,300 bu.
• Paid for it, with only a moisture discount and
  took delivery for hog feed.
• Laird noticed an odor upon delivery.
• Upon feeding the corn, health problems and death
  resulted.

47
Laird

• Corn was finally checked by a Univ. of Nebr. lab
  which found vomitoxin!
• A vet concluded Lairds problem was the
  contaminated corn.
• Co-op said they would not knowingly sell such
  corn, and Laird testified he had no knowledge of
  such a problem in corn.
• Laird got a 52,330 judgment.

48
Laird

• Andrew Holding?
• Affirmed the lower court
• To recover under a fitness warranty buyer must
  show seller knew the purpose intended for the
  item,
• in this case corn for livestock feed,
• and seller knew the buyer was relying on him or
  her.
• There is no evidence that Laird, arguably an
• expert in corn and hogs, was in full reliance
  of the seller.

49
Laird

• The sellers knowledge is an issue. Was the
  seller a merchant--- one who holds himself out as
  an expert?
• If yes, the burden can be shifted to the seller
  who collected for good corn,
• and the buyer must only establish the corn was
  bad.
• Rule The implied warranty of merchantability

50
Possible Defenses from Warranties

• Lack of privity of contract is based on the lack
  of a contractual relationship between a
  manufacturer and the consumer or user.
• Lack of privity was a successful defense against
  consumer liability suits where the consumer had
  no direct contact, and against third parties who
  had no contact with a manufacturer nor seller.
• Def.--Privity is participation in knowledge or
  interest. A connection, or bond of union,
  between parties,
• A priviy is a person having an interest not as
  a party to the
• contract, but via another, I,e., privy to
  one of the parties.

51
Warranties Defenses

• UCC Sec. 2-318 greatly restricts the use of the
  privity defense (see page 318)
• Alternative A A sellers warranty whether
  express or implied extends to any natural person
  of the family or household of the buyer or his
  guest if it is reasonable to expect that such
  person may use who is injured A seller may
  not exclude or limit the operation of this
  section.
• Alternative B extends to any natural person
  who may reasonably be expected to use ditto
  above
• Alternative C extends to any person who may
  reasonably be expected to use ... ditto above

52
Warranties Defenses

• Disclaimers
• sold with all faults (as is) is an
  expression a seller or manufacturer may use to
  attempt to sidestep warranties
• of merchantability, and
• of fitness for a particular purpose
• Disclaimers wont work if viewed as
  unconscionable!
• For consumer goods, disclaimers are prima facie
  unconscionable!

53
Warranties Defenses

• UCC Sec. 2-316 provides
• to exclude or modify any implied warranty of
  merchantability or any part of it the language
  must mention merchantability, the writing must be
  conspicuous
• and likewise to exclude or modify an implied
  warranty of fitness
• 3. a. How? There are no warranties which extend
  beyond the description of the face hereof.
• All implied warranties may be extinguished by as
  is or with all faults or other language that
  could be commonly understood by a buyer to make
  plain there is no implied warranties

54
Warranty Defenses UCC Sec. 2-316 provides
warranty exclusions

• b. when the buyer before entering into the
  contract has examined the goods there is no
  implied warranty with regard to defects which a
  examination ought to have revealed
• c. an implied warranty can also be excluded or
  modified by course of dealing or course of
  performance or usage of trade
• 4. Remedies for breach of warranty can be limited
  in accordance with the provision of this Article
  for liquidation of or limitation of damages and
  on contractual modification of remedy
• UCC Sec. 2-719 provides in part Consequential
  damages may be limited or excluded unless such is
  unconscionable.

55
Warranties Defenses

• Obvious defects-- UCC Sec. 2-316 if the purchaser
  has examined the product or
• refused to inspect, after the seller makes a
  demand for inspection,
• no implied warranty is created regarding defects
  that would have been discovered by such
  examination.
• Examples of disclaimers
• pesticide manufacturers try to escape certain
  types of damages
• machinery and equipment come with time limits on
  warranties as permitted by the UCC