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By M. Sean High, Staff Attorney | Penn State Center for Agricultural and Shale Law

Understanding the latest litigation, legislation, and regulations can help any businesses avoid costly penalties and fines associated with noncompliance. This is especially true in the ever-changing nature of agriculture. A strong knowledge of trends in agricultural law can provide operators with the ability to better plan for the future by anticipating future legal demands, exploring potential products and markets, and properly negotiating business agreements. For example, some of today’s hottest and most relevant legal developments affecting agriculture involve the issues of genetically modified (GMO) food labeling, cannabis legalization, and natural gas pipeline right-of-ways.   

GMO Labeling
The U.S. District Court for the Southern District of Florida recently ruled that a class action lawsuit that alleges Chipotle Mexican Grill Inc. (Chipotle) had “misrepresent[ed] to customers that its food products contain only non-GMO ingredients,” may proceed (Reilly v. Chipotle Mexican Grill Inc.). Bringing the action on behalf of all others similarly situated, Leslie Reilly asserted that she and the proposed class members “interpreted Chipotle’s advertisements to mean that its animals were not raised on GMO feed” and that she and the proposed class members “paid a premium price for Chipotle’s food only because [they] believed [the food] did not contain GMOs.”

According to the court, Chipotle “does not classify meat and dairy products sourced from animals who consumed GMO feed as GMO products.” Reilly asserted that “the products were ‘misbranded and worthless’ or, at least, not worth the price Reilly and other proposed class members paid for them.”

While this lawsuit is directed at Chipotle, any legal decision could have an effect on many agricultural operators that produce meat and dairy products. Specifically, if Reilly and the proposed class members are successful with their lawsuit, it is quite possible that many agricultural operators could face new requirements and restrictions regarding the types of feed they provide their animals.

Cannabis Legalization
On April 17, 2016, Pennsylvania Gov. Tom Wolf signed into law the establishment of a medical marijuana program (Act 16). While most of the resulting attention focused on how the law would affect users of the product, the new legislation also addressed who would be permitted to grow the product.

Significantly, before agricultural operators begin to count on medical marijuana as their next lucrative cash crop, they must understand that under the enacted legislation only persons holding a permit from the Pennsylvania Department of Health may grow or process medical marijuana. Accordingly, the Department of Health is authorized to issue only 25 permits throughout the entire state, and must charge each permit holder a $10,000 application fee, a $200,000 permit fee, and a $10,000 yearly permit renewal fee.

The Pennsylvania legislature is also considering the legalization of another product produced from the cannabis family—industrial hemp.

On April 6, 2016, the Pennsylvania House of Representatives voted unanimously to pass Pennsylvania House Bill 967, which is designed to partially legalize the growth and cultivation of industrial hemp (HB 967). The proposed legislation authorizes the Pennsylvania Department of Agriculture (PDA) “or an institution of higher education for the purposes of research conducted under an agricultural pilot program” to grow and cultivate industrial hemp, and for PDA to establish, implement, and administer the agricultural pilot program and develop and implement the permitting requirements.

While the purpose of legal medical marijuana is not to provide farmers with a new cash crop, the ultimate goal of the proposed industrial hemp legislation is to do just that. According Reps. Russ Diamond (R- Lebanon County) and Marty Flynn (D- Lackawanna County), cosponsors of HB 967, industrial hemp could provide “fibers for textiles,…[and be] used to manufacture biodegradable plastics, building materials, food, paper, environmental, and energy products.” In extolling the possibilities of industrial hemp, the representatives stated that “[c]ompanies overseas are switching out potentially dangerous fiberglass insulation with hemp insulation…[and that] [f]armers are cultivating the plant in between growing seasons as a cover crop for its ability to keep valuable nutrients in the soil.”

Natural Gas Pipeline Right of Ways
Recent natural gas developments have dramatically affected Pennsylvania’s agricultural land. Increasingly, pipeline easements have become a major issue for landowners as companies seek to construct systems for natural gas transport.

In most situations, gas companies negotiate right-of-way agreements with landowners to acquire pipeline construction right of ways. Occasionally, however, contractual agreements cannot be reached between the gas companies and landowners.  

Due to the increasing importance of energy development, both from a financial and national security perspective, when pipeline right-of-way negotiations fail, the government has provided natural gas companies with the ability to use the eminent domain process (where the government takes privately owned land for public use) to condemn land for pipeline construction.

Agricultural operators need to be aware that the eminent domain process is a very real possibility, and that the contracting process generally provides the best opportunity to limit and control future pipeline development. Thus, a proper knowledge of what language to include in a right-of-way agreement can usually provide agricultural operators with their greatest layer of legal protection.   

Conclusion
The business of agriculture is often governed by ever changing court decisions as well as new statutes and regulations. Thus, an awareness of the latest legal developments can greatly benefit agricultural operators by allowing them to better plan for future obligations, to be aware of new sources of revenue, and to properly negotiate contracts. Ultimately, knowledge of current agricultural legal developments can serve as a valuable tool to help agricultural operators make sound business decisions and maintain financial viability. 

Sean High is staff attorney at the Penn State Center for Agricultural and Shale Law. He is responsible for executing the Center’s outreach strategy of disseminating information to attorneys, government officials, industry leaders, and interested members of the general public. Sean serves as the primary agricultural law researcher at the center where a significant portion of his efforts focus on landowner liability, statutory protections of agriculture, and business planning. He is licensed to practice law in Pennsylvania and is a member of the Pennsylvania Bar Association and the American Agricultural Law Association.