March 17, 2024

Agricultural Law Weekly Review—March 18, 2024

Just Published—Brook Duer, EPA Made 2023 Commitment to CAFO Permitting Reform but No Action Evident to Date, Southern Ag Today (March 15, 2024)

Agribusiness: Federal District Court Finds Corporate Transparency Act Unconstitutional, United States Appeals to Eleventh Circuit 🌾
On March 1, 2024, the U.S. District Court for the Northern District of Alabama issued an opinion finding the Corporate Transparency Act (CTA) unconstitutional and an order enjoining the federal government from enforcing the CTA against the National Small Business Association and its members. National Small Business United v. Yellen, No. 5:22-cv-01448. The court determined that the CTA, which requires nearly all state-formed entities to report beneficial ownership information to the U.S. Treasury Financial Crimes Enforcement Network (FinCEN) to combat money laundering, trafficking, and fraud, “cannot be justified as an exercise of Congress’ enumerated powers,” including Congress’ foreign affairs and national security powers, taxing powers, and commerce clause powers—“[b]ecause the CTA doesn’t regulate the channels and instrumentalities of commerce or prevent their use for a specific purpose.” Observing that “[i]t is blackletter law that ‘corporations are creatures of state law’” and that “the Government has conceded that the act of incorporation is not enough to invoke the Commerce power,” the court found that “the connection between incorporation and criminal activity is far too attenuated to justify the CTA.” However, the court noted “how easily Congress could have written the CTA to pass constitutional muster,” stating that “nothing . . . would bar Congress from imposing the CTA’s disclosure requirements on State entities as soon as they engaged in commerce, or from prohibiting the use of interstate commerce to launder money, ‘evade taxes, hide . . . illicit wealth, and defraud employees and customers.’” Additionally, the court noted that “FinCEN’s [2016 Customer Due Diligence] CDD rule and the CTA provide FinCEN with nearly identical information, but the CDD rule does so in a constitutionally acceptable manner.” On March 11, 2024, the U.S. government filed a notice of appeal of the court’s decision to the U.S. Court of Appeals for the Eleventh Circuit. See also ALWR—Dec. 22, 2023, “Beneficial Ownership Information Reporting Requirements Effective January 1, 2024.”

Podcast: S. Treasury’s New “Beneficial Ownership Information” Filing for Business Entity Structures Formed Under State Law
National Agricultural Law Center Webinar Mar. 20: Corporate Transparency Act: New Reporting Requirements & Litigation Updates

Organic Agriculture: USDA Publishes Proposed Rule for Organic Mushrooms and Pet Food
On March 11, 2024, the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) published in the Federal Register a proposed rule (89 FR 17322) to amend USDA organic regulations for organic mushrooms and organic pet food, which currently are not covered by commodity-specific organic standards. The proposed rule addresses “sourcing of substrate and spawn in organic mushroom production, composting requirements for organic mushroom production, composition and labeling requirements for organic pet food, and the use of certain synthetic substances in organic pet food.” The proposed rule is open for public comment until May 10, 2024.

Webinar Mar. 22: Understanding the Basics of Organic Production

Food Labeling: FDA Approves Qualified Health Claim for Yogurt and Reduced Type 2 Diabetes
On March 1, 2024, the U.S. Food and Drug Administration (FDA) published a letter of enforcement in response to a petition from Danone North America stating that the agency “does not intend to object to the use of certain qualified health claims regarding the consumption of yogurt and reduced risk of type 2 diabetes provided that the qualified health claims are worded so as not to mislead consumers” (FDA-2019-P-1594). Also announced by FDA, the agency states that “[a]fter reviewing the petition and other evidence . . . [it] determined that there is some credible evidence supporting a relationship between yogurt intake and reduced risk of type 2 diabetes, but this evidence is limited,” and notes that the relationship “was based on yogurt as a food, rather than any single nutrient or compound in yogurt, regardless of fat or sugar content.” According to the announcement, “FDA considers 2 cups (3 servings) per week of yogurt to be the minimum amount for this qualified health claim.” See also the Center’s Dairy and Dairy Products Law Virtual Resource Room.

Animal Welfare: USDA and Justice Department Sign MOU on Animal Welfare Act Civil Enforcement
On March 8, 2024, the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) announced that the agency, along with the USDA Office of the General Counsel and the U.S. Department of Justice’s (DOJ) Environment and Natural Resources Division, had signed a Memorandum of Understanding (MOU) on “Civil Judicial Enforcement of the Animal Welfare Act (AWA).” Also announced by DOJ, the MOU states that the agencies agree to meet at least quarterly “to discuss and align on policy matters regarding the enforcement of the AWA” and, within 120 days, create and approve a training plan to inform agency staff “on each other’s process, policies, and approaches to enforcement of the AWA.” See also the Center’s Animal Confinement Issue Tracker.

Agribusiness: South Dakota Adopts Law Prohibiting Foreign Land Ownership
On March 4, 2024, South Dakota Governor Kristi Noem signed into law HB 1231, which prohibits six foreign governments—China, Cuba, Iran, North Korea, Russia, and Venezuela—and entities or “foreign person[s]” from those countries from owning agricultural land in the state of South Dakota. The new law amends the previous foreign ownership law (S.D. Codified Laws § 43-2A) to define “foreign entity,” “foreign person,” and “resident,” and requires “[a]ny person required to submit a report to the United States Department of Agriculture in accordance with the Agricultural Foreign Investment Disclosure Act of 1978” to also file the report with South Dakota’s Department of Agriculture and Natural Resources. See also the National Agricultural Law Center’s Foreign Ownership of Agricultural Land Resource Library.

National Agricultural Policy: President Publishes 2025 Budget Request
On March 11, 2024, President Joseph Biden published his fiscal year 2025 budget proposal along with multiple fact sheets describing various policy priorities. The budget proposal requests $29.2 billion for the U.S. Department of Agriculture, including $6 billion for “climate resilience and other conservation practices in agriculture production,” $3.8 billion for “agricultural research, education, and outreach,” and $1 billion for “loan guarantees for renewable energy systems and energy efficiency improvements for farmers and rural small businesses.”

Agricultural Labor: House Agricultural Labor Working Group Publishes Final Report with Policy Recommendations
On March 7, 2024, the U.S. House Committee on Agriculture’s Agricultural Labor Working Group published its Final Report with Policy Recommendations for U.S. agricultural labor, including “significant reforms to the H-2A program.” Also announced by the committee, the report recommended numerous policies “with unanimous support” from the bipartisan working group, including creating a single H-2A applicant portal, enacting H-2A wage reform, adopting a federal heat standard for H-2A workers, and allowing year-round industries—livestock, poultry, dairy, peanuts, sugar beets, sugarcane, and forestry—access to the H-2A program. See also the Center’s H-2A Program Issue Tracker.

Pesticides/Herbicides: Texas Farmers File Complaint Alleging PFAS Damage from Synargo Biosolids Fertilizer
On February 27, 2024, five Texas farmers filed an amended complaint in the Baltimore County Circuit Court of Maryland alleging that their farms and health were damaged by Per- and polyfluoroalkl substances (PFAS), known as “forever chemicals,” after a neighboring farmer used Synargo Granulite Fertilizer, a biosolids-based fertilizer produced and marketed by Synagro Technologies, Inc. Farmer v. Synargo, No. C-03-CV-24-000598. The complaint includes test results that “indicate high levels of PFAS in the soil, surface water, and well water” of the plaintiffs’ properties and describes the plaintiffs’ health problems and loss of livestock and animals, which the plaintiffs attribute to the high levels of PFAS. The plaintiffs allege that Synargo “knew or should have known its biosolid contain[ed] PFAS” and that the company is strictly liable because its Granulite Fertilizer is abnormally dangerous and defectively designed and it failed to warn customers of the dangers of the product.

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