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"Give Me Back My Rights!" A New Campaign
to Fight Binding Arbitration
“Give Me Back My Rights!” is a new campaign to
educate the public on the ramifications of binding mandatory arbitration.
RAFI USA is collaborating with this coalition of consumers, farmers, employment,
and fair lending organizations as the repercussions of binding mandatory
arbitration resound through the agricultural community. Former poultry
grower Tom Greene spoke at the national press conference to kick off the
campaign.
Mr. Green understands the importance of this campaign firsthand. He lost
his farm and most of his life savings when he refused to sign a new poultry
contract with a binding mandatory arbitration clause. Greene is
one of many farmers who are facing a no-win situation as agricultural
companies increasingly incorporate binding mandatory arbitration clauses
into their contracts. He described these events at the press conference
noting, “Arbitration violates the fundamental liberties our Constitution
extends to us as free citizens in this great republic. … As a soldier,
a war veteran who has drawn blood in defense of those principles, I could
not sign that contract.”
A farmer, consumer or employee who signs a contract with a binding mandatory
arbitration clause gives up their right to take any future dispute with
the company to court. Instead, their only recourse is through binding
mandatory arbitration. In arbitration both sides make their case to a
third party (arbitrator) who decides the best resolution to the dispute.
Arbitration itself can be a positive process, however, the binding mandatory
process:
• can be prohibitively expensive for a single individual,
ranging from the tens of thousands of dollars that must be paid before
proceedings begin;
• has procedures and rules that favor the company
that wrote the contract; and
• lacks the procedural safeguards of going to court,
such as standards of evidence and the discovery process. Under these conditions
the company is under no pressure to release documents that may be crucial
to the case.
Small businesses, consumers and employees are often unaware
of the binding mandatory arbitration clauses in their contracts. Many
farmers are already in so much dept with the company (taking out loans
for equipment or to build facilities), that they must sign the contract,
regardless of whether they want to waive their rights to access the courts
or not. The “Give Me Back My Rights Campaign” is working to
educate the public on these unfair arbitration contracts. RAFI is working
to create laws that will protect farmers from unfair arbitration practices.
For more information about binding mandatory arbitration, the campaign
recent press coverage and/or the “Give Me Back My Rights Campaign”
go to www.givemebackmyrights.com.
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Top Ten Agricultural Law Cases of 2004
Guest Column by: David R. Moeller and Susan E. Stokes
of the Farmers’ Legal Action Group
With all due respect to David Letterman and everyone who does
year-end Top Ten lists, here is our top ten United States agricultural
law cases for 2004. There are no set criteria for the list except importance
for family farmers. Links to the decisions can be found at www.flaginc.org.
1. Captive Supplies in the Cattle Industry:
Pickett v. Tyson Fresh Meats
A jury found that Tyson violated the federal Packers and Stockyards Act
through use of captive supply contacts in purchasing cattle, and awarded
cattle farmers and ranchers up to $1.28 billion in damages. Federal Judge
Lyle Strom overturned that verdict, ruling that the evidence was insufficient
to support it. The cattle farmers and ranchers appealed to the Eleventh
Circuit of Appeals. Our argument was heard on December 17, 2004, and the
appeal court decision is expected in 2005.
2. Mad Cow Disease and USDA Rulemaking:
R-CALF v. USDA
On April 22, 2004, R-CALF filed a motion for a temporary restraining order
to prohibit USDA from lifting a ban on importation from Canada of beef
and other bovine tissue for human consumption. The ban was in place due
to the discovery of bovine spongiform encephalopathy (BSE) or “Mad
Cow Disease” in a Canadian born cow in Alberta, Canada. USDA, without
using the notice and comment rulemaking process, had issued a memorandum
that would have allowed Canadian beef to once again be imported into the
United States. Federal judge Richard Cebull granted R-CALF’s motion
stopping USDA from reopening the U.S. Canada border to imports of Canadian
beef. In May 2004, the parties reached an agreement that allowed USDA
to engage in a rulemaking on reopening the border to Canadian beef and,
at some point most likely live cattle. USDA’s new rule is to be
published in the January 4, 2005, Federal Register.
3. First Amendment Challenges to Commodity Checkoff
Programs: Cochran v. Veneman
2004 saw a lot of action over the constitionality of mandatory checkoff
programs. In the Cochran case, two Pennsylvania dairy farmers successfully
challenged the entire Dairy Checkoff Program. The district court held
that the Dairy Checkoff was constitutional, finding that the dairy industry
is as heavily regulated as the California tree fruit industry; whose marketing
order was held constitutional in a 1997 Supreme Court ruling. The Third
Circuit reversed the district court. The court concluded that the tree
fruit decision was not applicable because the Dairy Checkoff is a stand-alone
program not connected with the federal milk order system or other dairyindustry
regulatory schemes. The Cochran case is being held by the U.S. Supreme
Court pending its decision in the Beef Checkoff challenge, Veneman v.
Livestock Marketing Association.
4. Feedlot Regulation: Gacke v. Pork Xtra
and Worth County Friends of Agriculture v. Worth County
These two Iowa Supreme Court cases dealt with the conflict large feedlots
and government regulation. In Gacke, the Iowa Supreme Court struck down
Iowa’s right-to-farm law that barred nuisance lawsuits against feedlot
owners. The court ruled the law violated Iowa’s Constitution because
the bar on nuisance claims could allow feedlot owners to take other landowner’s
private property without just compensation. In Worth County, the Iowa
Supreme Court struck down a county ordinance that attempted to regulate
large feedlots. The court ruled that because the Iowa legislature had
enacted a statute regulating feedlots at the state level, that statute
preempted the county ordinance. The issue of feedlot regulation will likely
continue to be contested in courts and legislatures across the country.
5. Corporate Farming Restrictions: Smithfield
Foods v. Miller
In 2003, the Eighth Circuit struck down an anti-corporate farming amendment
to the South Dakota Constitution so-called “Amendment F” because
it was held to violate the dormant Commerce Clause of the U.S. Constitution.
This put other state’s corporate farming restrictions in question.
In this case, Smithfield Foods challenged Iowa’s law banning packer
ownership of livestock under the dormant Commerce Clause of the U.S. Constitution
and won at the district court. After the district court’s ruling
the Iowa’s Legislature amended Iowa’s law. The Eighth Circuit
decided the district court should take another look at the law in light
of the legislative changes and sent the case back to the district court.
A trial is expected to begin in early 2005.
6. Discrimination in USDA Program: Garcia
v. Veneman and Love v. Veneman
These two cases were brought against USDA for discrimination in USDA programs.
Garcia was brought on behalf of a class of Hispanic farmers. The district
court denied the Hispanic farmers’ class certification motion because
the court believed each individual farmer had different disputes with
USDA, and therefore the farmers could not satisfy the commonality requirement
for certification. In Love a case brought on behalf of women farmers claiming
discrimination on the basis of gender, the same district court denied
the women farmers’ motion for class certification on the same grounds.
The D.C. Circuit Court of Appeals has granted a motion to review the class
certification of the Love case.
7. Seed Saving Penalties: Monsanto Co. v.
McFarling
The Federal Court of Appeals upheld a finding that a farmer violated his
1998 Technology Agreement with Monsanto by saving seed, but held that
because the remedies provisions in the Agreement were “invalid and
unenforceable under Missouri law,” the $780,000 judgment against
the farmer must be vacated. The court reasoned that Monsanto’s liquidated
damages clause requiring farmers to pay 120 times the applicable technology
fee for each bag of seed purchased was not a reasonable estimate of the
financial harm Monsanto suffered when the farmer saved seed. Monsanto
removed this portion of the remedies clause from it 2005 Technology Agreement.
8. Deceptive Herbicide Pricing and Marketing:
Peterson v. BASF Corp.
The Minnesota Supreme Court unanimously affirmed a jury verdict and entry
of a $52 million judgment for a nationwide class of farmers of minor crops
who claimed that BASF’s herbicide marketing and pricing schemes
were deceptive. BASF filed a petition for the U.S. Supreme Court toreview
the case, which is being held pending that Court’s decision in Bates
v. Dow Agrosciences. The Bates case concerns whether state law product
liability claims against an herbicide manufacturer are preempted by Federal
Insecticide, Fungicide and Rodenticide Act and will be heard by the U.S.
Supreme Court in January 2005. It is expected that the Peterson case will
finally be decided by the end of 2005, nearly eight years after it was
filed.
9. Binding Arbitration in Production Contracts:
Tyson v. Archer
The Arkansas Supreme Court ruled that the binding arbitration clause in
a Tyson hog production contract was not enforceable because the contract
did not impose mutual obligations on Tyson and the farmer. The issue arose
when Tyson suddenly terminated contracts of more than 100 hog farmers.
The hog farmers sued for compensatory and punitive damages alleging that
they incurred substantial dept to build commercial hog farms that were
rendered useless without a contract. Tyson had contended that the contract
the hog farmers had signed required disputes to be resolved through binding
arbitration instead of litigation. The court found that the contract was
unenforceable because the farmer’s only remedy was to use arbitration,
but Tyson could pursue litigation if it chose to.
10. Termination of Peanut Production Quotas: Members of the
Peanut Quota Holders Association v. United States
A group of peanut farmers who held peanut production quotas that were
terminated by the 2002 Farm Bill sued for compensation under the Takings
Clause of the Fifth Amendment of the U.S. Constitution. The court held
that the peanut quota system was created by Congress and Congress has
the right to modify or terminate a federal program. Accordingly, the court
found that no benefit from such a program would constitute a property
interest protected by the Fifth Amendment, and it dismissed the peanut
farmer’s claims. For the first time since 1938, peanut farmers are
without a production quota safety net.
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2005 Grant Recipients of the Tobacco Communities Reinvestment
Fund
Randy Massey has been growing both tobacco and strawberries
in Caswell County for many years. He will be using his Tobacco Communities
Reinvestment Grant (TCRF) to cultivate an experimental vertical tower
system to produce high-quality, low disease strawberry transplants. Mr.
Massey hopes to sell these transplants from Virginia down to Florida,
breaking into a market that has been long-held by Canadian and California
growers.
In 2005 RAFI USA’s Tobacco Communities Reinvestment Fund (TCR) has
provided Massey and ten other applicants funding to invest in a new crop
or market strategy. The TCRF program offers financial assistance in the
form of two grants: Producer Grants provided $10,000 in support to farmers
who had earned income from tobacco at the time of the Master Settlement
Agreement, and Community Grants made available up to $30,000 to farmers,
farmer organizations, and community groups.
Through support of the North Carolina Tobacco Trust Fund, RAFI has been
able to fund successful initiatives that have kept farmer’s farming.
The 2005 Grant Recipients of the Tobacco Communities Reinvestment Fund
are:
Thomas Hall—Caswell County
Family, Farming, Fun, Fall Experience
Randy T. Massey—Caswell County
Growing Up Strawberry Tip Production
Rickie Smith—Caswell County
Certified Farm Produce Packing/Processing Facility
Shonnetta Ammons and Larry Shaw—Duplin (and adjacent) County
L&S Grain Producers, Inc. Feed to Farm
George Mainor—Duplin County
Mainor Family Farm Vegetable Seedlings
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Harold and Ann Wright—Duplin County
Twin Rivers Farmer Cooperative—Marketing Pasture-raised Pork
Sandra Davis—Yancey County
Growing Dreams in Greens
Johnny Deyton—Yancey County
Draft Horse Power—Exploring the Agritourism Route
Tal Galton—Yancey County Natural Products—Yancey County
Production and Marketing of Value-added Natural Products
Kenny Wilson—Yancey County
Micro Greens
Fred Woodby—Yancey County
Kiln Drying and Finishing Lumber
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