Top 5 Legal Issues for Illinois Farmers in 2017

Macon Co. Farm Bureau

March 21, 2017

By Cari B. Rincker, Esq.

Who I Am• Grew up on a beef cattle

farm in Shelbyville, Illinois– Advanced degrees in animal

science• Past-Chair of the ABA,

General Practice, Solo & Small Firm Division’s Agriculture Law Committee

• Client bases ranges from farmers, food entrepreneurs to small to mid-size agri-businesses

Top 5 Legal Issues For Illinois Farmers

Veterinary Feed Directive

Syngenta Litigation

Waters of the United States (“WOTUS”)

Planning Against the Big D’s

More Than a Handshake

Veterinary Feed Directive

Timeline

This second VFD rule became effective on

October 1, 2015

December 2016 is the target for drug

sponsors to implement changes to

use conditions of products

January 1, 2017 target for switching OTC

drugs to VFD

Stakeholder Requirements

Veterinarians

Livestock Producers

Feed Distributors

Drug Manufacturers

Veterinary RequirementsMust be in compliance with the state’s veterinarian-client-patient relationship (“VCPR”) requirements pursuant to § 530.3(i)

If state doesn’t require a VCPR then FDA now requires that the VFD be issued within context of Federally defined VCPR, which requires:• Engage with livestock producer and assume responsibility for making

medical judgment about the animal’s health.• Have sufficient knowledge of the animal by virtue of examination and/or

visit the facility where the animal is managed to initiate a preliminary diagnosis.

• Provide for any necessary follow-up evaluation or care.

21 § CFR 558.6(b)

Veterinary Requirements

The veterinarian must also provide a written

veterinary feed directive (“VFD”).

The VFD must be in compliance with the

conditions for approved use, conditionally

approved use or indexed use under the ADAA.

21 CFR 558.6(a)

Veterinary Requirements

Extra-labeling Use is not permitted • I.e., Use of feed containing a VFD

drug in a manner other than as directed on the label is not permitted.

21 C.F.R. 558.6(a)

VFD Requirements

• Vet’s and livestock producer/client’s • Name• Address• Telephone number

• Premises at which the animals are located

• Date of VFD issuance• Species and production class of animals

to be fed the VFD feed

Required Informatio

n

VFD Requirements

VFD must include the name of the VFD drug • could be the generic name• can state that a substitution drug

is or isn’t allowed (optional info) • if substitution is allowed then the

feed distributor may choose to substitute if the generic VFD is part of an approved combination

21 CFR 558.6(b)

VFD Requirements

VFD must include an expiration date• The vet can write a date up to 6

months from the date the VFD is initiated.

• Duration determines the length of time the VFD is allowed to be fed to the animals as specified on the product label.

• If no expiration date then 6 mo. is the default

VFD RequirementsVFD Must Include

• Approximate/potential number of animals to be fed by the expiration date of the VFD on a premises• Also needs the expiration date

• Indication for which the VFD is issued • Drug level• Duration of use

• Note: Duration is different than expiration date• Withdrawal time• Special instructions/cautions• Number of reorders (refills) authorized – if permitted by the drug

approval

VFD Requirements

VFD Must Include

this Statement

• “Use of feed containing this veterinary feed directive (VFD) drug in a manner other than as directed on the labeling (extralabel) is not permitted.”

VFD Requirements

VFD must include:• An affirmation of

intent for combination VFD drugs

• Veterinarian’s electronic or written signature

Veterinary RequirementsAffirming Intent on the VFD

Choice 1: “This VFD only authorizes the use of the VFD drug(s) cited in this order and is not intended to authorize the use of such drugs in combination with any other animal drugs.”

Choice 2: “This VFD authorizes the use of the VFD drug(s) cited in this order in the following FDA-approved, conditionally approved, or indexed combination(s) in medicated feed that contains the VFD drug(s) as a component.” [List specifics ______________________ ______________________________________________________]

Choice 3: “This VFD authorizes the use of the VFD drug(s) cited in this order in any FDA-approved, conditionally approved, or indexed combination(s) in medicated feed that contains the VFD drug(s) as a component.”

VFD Requirements

VFD must include premises ID but may include more information of the animals • This is so someone can locate the animals,

if needed.• May include specific information, such as

the pen or description of where the animals are currently located.

• If the VFD is intended to authorize the use of a VFD feed in a group of animals that are located at more than one physical location, then the VFD can specify more than one pen so long as the feed is supplied by a single feed distributor.

Optional VFD Information

VFD may provide the following additional information:

• Approximate age/weight range of the animals

• Any other information the veterinarian deems appropriate to identify the animals specified in the VFD

Veterinary Requirements

Please note that the VFD no longer requires the veterinarian to state the amount of feed to be fed to the animals

• Instead, the burden is on the distributor to determine the proper amount of feed to manufacture and distribute to the producer

Veterinary Requirements

Importantly, is not a required VFD Form• Guidance for the Industry

(“GFI”) #233 lists several recommended common formats for the VFD

• Veterinarian can create his/her own VFD form but should have it reviewed by an attorney for compliance

Veterinarian RequirementsCopy of the VFD must go to the client (producer) and feed distributor• Can be delivered hard-copy, facsimile or

electronic (e.g., email)• Transmitted to the distributor and client

gets copy

Must maintain VFD records for 2 years

• Must retain original VFD • Other segments can keep copies but the

veterinarian must keep original

21 C.F.R. 558.6(a)

Producer Requirements

Feed animal feed containing a VFD drug only to animals based upon a duly issued VFD from a licensed veterinarian

Maintain all VFD records for 2 years

• Keep copy in original form (hard copy v. original)

• Must be available for inspection and copying by FDA upon request

21 CFR 558.6(a)

Producer Requirements

Prohibited from feeding a VFD after an expiration date• The expiration defines the period

of time for which the authorization to provide an animal feed containing a VFD drug is lawful.

• Expiration date specifies the last day the VFD feed can be fed to a group of animals.

Producer Requirements

Veterinary Feed Directive Issuance

VFD should

state the expiration

date

Feed DeliveryMedicated feed being delivered

in different

increments

FeedingExpiration

Date

21 CFR 558.6(a)

Note: Was the duration prescribed different than the expiration date?

Syngenta Litigation

Syngenta Litigation

• In 2013, China refused to accept shipment of corn that contained Syngenta’s MIR 162 trait found in Veptera and Duracade because the GMO had not yet received a safety certification due to incomplete submission of materials and statistics by Syngenta.

Syngenta Litigation• China rejected 887,000 tonnes of

US corn shipments due to the presence of MIR 162 trait.

• This loss of China as a trade partner caused a decrease in demand in the United States for corn.– This arguably caused a decrease in

the market price of all U.S. corn, regardless of its variety and who the corn seed was bought from.

– Allegedly causing more than $1 billion in losses for US farmers.

Syngenta Litigation

• Cargill v. Syngenta• Trans Coastal v. Syngenta

Lawsuits by

Companies

• U.S. farmers have also filed a class action lawsuit against Syngenta in federal courts in 11 states – consolidated into Kansas case and class certified.

Lawsuits by

Farmers

Class Certification

• Federal court certified 9 classes, including a nationwide producer class– Any producer who priced corn for sale after November

18, 2013 and who did not purchase Viptera or Duracade corn seed.

– Any person falling within this definition is automatically included in the lawsuit as a class member.

• Eligible producers should have been notified and have until April 1, 2017 to “opt out” of the class – No action to “opt in”

Are You In or Are You Out?

• Represented by named counsel • No control over settlement; no costs to the producer

Remaining in Class

Action

• Producer won’t share any in of the $$ recovery• May go to court and file his or her own individual claim

against Syngenta• Own lawyer• Own decision about settlement• Own costs

Opting Out

Waters of the United States (“WOTUS”)

WOTUS LitigationRapanos v. United States, 547 U.S. 715 (2006)• Facts: John Rapanos sought to fill in

three wetland areas on his property in order to build a shopping mall. He was warned by Michigan Department of Environmental Quality that the area was federally protected land, which he ignored along with a cease-and-desist order from the U.S. Environmental Protection Agency, which resulted in a civil suit against him by the United States.

WOTUS Litigation

Rapanos v. United States, 547 U.S. 715 (2006)

• Argument: Rapanos argued that the Clean Water Act gives government jurisdiction to regulate only traditionally navigable water, while the government argued that Rapanos’s lands were covered by the CWA as “adjacent wetlands.” The District Court upheld the government interpretation of the Act.

WOTUS LitigationRapanos v. United States, 547 U.S. 715 (2006)• Appeal: The case was

appealed to the Supreme Court of the United States where in a 5 to 4 opinion the Supreme Court held that: the definitional term “waters of the United States” can only refer to “relatively permanent, standing or flowing bodies of water,” not “occasional,” “intermittent,” or “ephemeral” flows.

New Rule to Define WOTUS

• The rule, published on June 29, 2015 and becoming effective on August 28, 2015, identifies six types of waters that are categorically within federal jurisdiction and two categories of water for which a case-by-case determination is required.

New Rule to Define WOTUS

Case-by-case analysis is required if the water in question is either:• a member of a series of named

formations such as prairie potholes, Carolina and Delmarva Bays, pocosins, western vernal pools in California, or Texas coastal prairie wetlands; or

• a water body that, due to its location within a certain distance from a high tide or high water mark of a jurisdictional water, has a “significant nexus” to that water.

New Rule to Define WOTUSHaving a significant nexus means “that a water, including wetlands, either alone or in combination with other similarly situated waters in the region, significantly affects the chemical, physical, or biological integrity of [waters used in interstate or foreign commerce, interstate waters, and the territorial seas].”

New Rule to Define WOTUS

• On August 28, 2015, the WOTUS Rule went into effect in all states except 13, where a federal district court in North Dakota granted a preliminary injunction blocking the implementation of the new rule.

• The 13 states (Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, and Wyoming) claimed that the new WOTUS rule is a threat to state sovereignty because it asserts federal jurisdiction over wetlands and waters that should be subject to state government control.

Temporary

Injunction of

WOTUS Rule

Trump’s Executive Order

• In February 2017, President Trump signed an executive order directing the EPA to reconsider WOTUS– It does not repeal the rule– It may be years before we

know the result of this reconsideration

Planning Against the Big D’sDeath

Debt

Destruction

Divorce

Disability

DeathEstate Planning• Last Will and Testament• Advanced Directives

• Power of Attorney• Medical Power of Attorney/ Living Will

• Trusts

Succession Planning• Business Planning?• Shifting Management/ Training • Operations Manual

Estate and succession planning mediation?

DestructionWhen is the last time you did an insurance review?• Have your activities changed? (e.g., agritourism, roadside food

stand)• Comprehensive Farmowners Insurance Policy• Commercial Insurance Policy• Food product liability insurance• Cyber insurance

Umbrella policies• They don’t fill in holes- they are more like a top hat in your

current coverage!

Divorce

Prenups are not taboo• Divorce can heavily impact family farms

Go about divorce the right way• Consider Alternative Dispute

Resolution

More Than a Handshake

• Land• Livestock• Fam Machinery

Purchase Agreements

• Farm Lease• Bull/Boar/Horse Leases• Farm Machinery Leases• Grazing Leases

Leases

Specialized Contracts

Custom Feeding

Arrangements

Stocker Cattle

Contracts

Embryo Transfer

Contracts

Non-Disclosure

Agreements

Partnership Agreements• A partnership arises when

two or more people agree to share profits and losses in a business

• Types of partnerships:– General Partnership– Limited Partnership– Limited Liability Partnership

Please Stay in Touchcari@rinckerlaw.comwww.rinckerlaw.com

Illinois Office:301 N. Neil Street, Suite 400Champaign, IL 61820(217) 531-2179

Twitter: @CariRincker @RinckerLawwww.facebook.com/rinckerlaw http://www.linkedin.com/in/caririnckerSnapchat + Periscope: CariRincker IG: @CariRincker + @RinckerLawYouTube: /CariRincker