In this series of posts examining a recent challenge to North Carolina’s expansion of its Right to Farm Act, Rural Empowerment Ass’n for Cmty. Help v. State, No. 19-CVS-008198 (N.C. Super. Ct. filed June 19, 2019) (detailed here), today’s post considers the plaintiffs’ invocation of the relatively unknown, but not un-litigated, prohibition on “local and special laws” in the N.C. Constitution. N.C. Const. art. II, § 24. “The General Assembly shall not enact any local, private, or special act or resolution . . . [r]elating to health, sanitation, and the abatement of nuisances.” Id. Plaintiffs in the REACH complaint argue that the Act’s amendments constitute a “special law” because they were adopted “in response to a specific case and to existing circumstances at the time of their passage and designed to protect a special class or favored few.” Complaint at 37, Rural Empowerment Ass’n for Cmty. Help, No. 19-CVS-008198.

North Carolina courts have not yet analyzed whether a limit on punitive damages constitutes a “special law.” Nor is it clear how the Right to Farm Act amendments even relate to “issues of health, sanitation, and the abatement of nuisances,” at least as far as North Carolina courts have construed those terms. The Supreme Court of North Carolina has stated that courts must look to “whether, in light of its stated purpose and practical effect, the legislation has a material, but not exclusive or predominant, connection to issues involving health, sanitation, and the abatement of nuisances.” City of Asheville v. State, 369 N.C. 80, 103, 794 S.E.2d 759, 776 (2016).

There is also little guidance on how North Carolina courts interpret the meaning of a “special” act or resolution. Most of North Carolina’s jurisprudence has arisen on the “local” front, but North Carolina courts have treated the terms “local” and “special” seemingly interchangeably at times. When North Carolina courts have attempted to distinguish between “local laws” and “general laws,” they have applied a “reasonable classification” test, which distinguishes between local laws, which “discriminate[] between different localities without any real, proper, or reasonable basis or necessity,” and general laws, which “appl[y] to and operate[] uniformly on all the members of any class of persons, places or things requiring legislation peculiar to itself in matters covered by the law.” City of Asheville, 369 N.C. at 91, 794 S.E.2d at 768–69. Assumedly, the state’s courts would apply an analogous test (with altered language) to the question of what constitutes a special law with one possible conclusion being that “[a] law which applies generally to a particular class of cases is not a local or special law.” See Reed v. Howerton Eng’g Co., 188 N.C. 39, 123 S.E. 479, 481 (1924).

How the court treats this legal theory will be telling in how state legislatures can constitutionally encourage the growth of agricultural industries in their state. If the very fact that a law allegedly benefits a specific individual or entity makes it an unconstitutional special law, the state’s government would likely be severely constrained in attracting entrepreneurs to the state or maintaining the state’s growing economy. For example, the General Assembly has passed a law that allows business owners to sue for harm to their business if an individual fraudulently gains employment there in order to engage in an undercover investigation, which then goes public. The North Carolina Property Protection Act, N.C. Gen. Stat. § 99A-1 (2018). Would such a law, although textually aimed at generally protecting property rights across industries, be a special law because it also benefited the state’s agricultural operations, specifically the poultry industry? State lawmakers would have to ensure that no law benefited any entity over the other, even tangentially, a seemingly absurd proposition. Hopefully the court will clarify exactly what constitutes a “special law” and if the term has a meaning distinguishable from “local.”

Sean Placey is a summer associate in the firm’s Greensboro office.

Losing a pet can be hard for owners.  However, it can be even harder for those owners to know that they will be separated from their beloved pets in their final resting place.  In the U.S., households own about 89.7 million dogs and 94.2 million cats.[1]  When looking at total pet ownership, including horses, fish and other animals, that number is at almost 400 million “pets.”[2]  As sad as it may be, both these pets and their owners are destined to pass on eventually.  Owners may worry about what will happen to their pre-deceased pet’s remains when the inevitable happens and the owners themselves pass on.  They may also be concerned about where a pet that outlives them will be buried.

The solution to these concerns will ultimately depend upon the state of burial for the owner.  As of 2016, New Yorkers are allowed to be buried in certain cemeteries alongside the cremated remains of their pets.[3]  However, this requires that the human be buried in a not-for-profit cemetery that has consented to the pet burial on its grounds.[4]  This law also only allows the burial of cremated pets on cemetery grounds.[5]  While these requirements may be slight inconveniences, New York is far more permissive of owner-pet burials than many other states.

In New Jersey, while it is technically possible for pet owners to have their remains disposed of in their pet’s cemetery, as described below, it is much harder for a human to share their final resting place with their pet, since New Jersey does not allow pets to be buried in human cemeteries.[6]  For those pet owners who take the time to plan, the following options are available.

A person who elects to be cremated can have their ashes scattered in a pet cemetery containing their pet’s remains,[7] since human cremation is considered a final disposition.[8]  Alternatively, a person can be buried in a pet cemetery as long as the pet cemetery permits human remains to be buried in their plots.[9]  This takes a considerable amount of planning for the owner prior to their death, something that not all people either think about or are able to do.

Additionally, these alternatives are subject to other practical considerations that owners have to account for.  First, they need to consider the impact this decision may have on their surviving family members and the owner’s beliefs regarding an appropriate final resting place for themselves.  For example, some of the Jewish faith consider cremation, at the least, frowned upon, and most consider it prohibited.[10]  Second, there are different rules governing the maintenance and future uses of pet cemeteries, as opposed to strictly human cemeteries.[11]  Thus, those considering burial in a pet cemetery may have to consider whether they are comfortable with the knowledge their resting place may not remain final.

While there may be some solutions for New Jersey residents that wish to be buried with their pets, there is a considerable amount of planning and contemplation that must go into this decision, as compared to New York residents in the same position.

All pet owners concerned about these issues should consider including their desired options in their wills and/or trusts so that their wishes are followed to the extent they are legally valid.

[1] American Pet Products Association Inc.’s 2017-2018 National Pet Owners Survey & Demographic Sourcebook; AVMA 2016.  U.S. Pet Industry Spending Figures & Future Outlook.

[2] Id.

[3] N.Y. Not-for-Profit Corp. Law § 1510(n) (McKinney 2016).

[4] Id.

[5] Id.

[6] N.J.S.A. 45:27-2 (defining a cemetery as “land or place used or dedicated for use for burial of human remains, cremation of human remains, or disposition of cremated human remains”) (emphasis added).  Additionally, The New Jersey Cemetery Board, which is in charge of licensing and regulating non-religious corporation cemeteries, has stated that, based on this definition, “A cemetery, by definition may not accept pets, unless it is exclusively a pet cemetery.”

[7] Alex Nepoliello, Want to Be Buried With Your Pet?  In N.J., It’s Complicated, NJ.com (June 26, 2019), https://www.nj.com/news/2016/09/can_nj_residents_be_buried_with_their_pets.html.

[8] See N.J.S.A. 26:6-4.2 (including cremation among discussion of final disposition).

[9] There is no state prohibition on burying human remains on private property.  However, if it is deemed dangerous to public health, such a burial may be disallowed.  See N.J.S.A. 26:6-5.  Also, before burring a body on private property, local laws and rules should be consulted and a burial permit should be obtained.  N.J.S.A. 26:6-5.1.  See also Nepoliello, supra note 7.

[10] MJL, Jewish Views on Cremation, My Jewish Learning, https://www.myjewishlearning.com/article/judaism-on-cremation/ (last visited June 27, 2019).

[11] Compare N.J.S.A. 4:22A-5 (which can allow for the removal of a dedication of a pet cemetery by the pet cemetery owner if there is relocation of the remains and permission from heirs or assigns to relocate the remains) with N.J.S.A. 45:27 (making no provision for the removal of a dedication on a cemetery).

Carmella Campisano is a summer associate in the firm’s Princeton office.

In the ongoing controversy over a series of nuisance suits regarding eastern North Carolinian hog-farming operations, a collection of advocacy groups have now filed a constitutional challenge to the North Carolina General Assembly’s recent amendments to the Right to Farm Act (the “Act”) (detailed here) in Wake County Superior Court. Rural Empowerment Ass’n for Cmty. Help v. State, No. 19-CVS-008198 (N.C. Super. Ct. filed June 19, 2019).

The amendments to the Act protect North Carolinian agricultural and forestry industries operating in good faith. The statutory scheme’s text is broadly applicable to any agricultural or forestry operation that allegedly results in a nuisance and restricts punitive damages to those instances where the federal or state executive branches bring enforcement (civil or criminal) actions against the operation. N.C. Gen. Stat. §§ 106-701 to -702 (2018). The plaintiffs construe the 2017 and 2018 amendments as specifically and intentionally denying the recovery of punitive damages in the ongoing nuisance suits in violation of the North Carolinian (but not the Federal) Constitution.

Although the statutory text itself does not mention the ongoing nuisance suits, the plaintiffs argue that other legislative evidence indicates the true purpose of the statute, namely limiting plaintiffs’ recovery in the nuisance suits. Specifically, the plaintiffs rely on legislative floor discussions and the 2018 amendment’s statement that its passage was prompted by a recent federal trial court’s misinterpretation of North Carolina’s statutory nuisance scheme. According to the complaint, this violates North Carolina’s constitutional prohibition on “special act[s] or resolution[s] . . . relating to health, sanitation, and the abatement of nuisances,” along with North Carolina’s “law of the land” constitutional provision (comparable to the federal Due Process clause), and the constitutional guarantee of a jury trial.

This is not the first challenge to the constitutionality of limits on punitive damages in North Carolina. In Rhyne v. K-Mart Corp., the state’s Supreme Court analyzed whether the statutory cap on punitive damages to three times the compensatory damages awarded or $250,000 was constitutional. 358 N.C. 160, 594 S.E.2d 1 (2004), aff’g 149 N.C. App. 672, 562 S.E.2d 82 (2002). The plaintiffs in Rhyne brought a number of challenges similar to the plaintiffs here (e.g., law of the land challenge and right to jury trial challenge). The Rhyne court, among other things, upheld the punitive-damages cap, finding that it was a “modification of the common law within the General Assembly’s policy-making authority to define legally cognizable remedies” and that the General Assembly actually had “the power to abolish the recovery of punitive damages” in certain tort actions “because, unlike actual or compensatory damages, plaintiffs [have] no right to the recovery of those damages.” Id. at 170–71, 594 S.E.2d at 9.

This lawsuit threatens the stability of the state’s agricultural industry. Even beyond discussion of the common law and vested rights, the state government’s ability to control punitive damages plays an important role in economic growth. Although punitive damages can serve public policy by “punish[ing] intentional wrongdoing,” Rhyne, 358 N.C. at 166, 594 S.E.2d at 6, they can also be awarded with seemingly no consistency against parties engaging in similar behavior but whom juries fail to treat similarly. Theodore B. Olson, The Parasitic Destruction of America’s Civil Justice System, 47 SMU L. Rev. 359, 366 (1994) (“Punitive damages combine the worst elements of a lottery and a plague by combining little rhyme or reason for who is rewarded and who is punished.”). Such risk can often discourage entrepreneurs from entering in to industries that are prone to frivolous lawsuits, yet are still essential to a state’s economic growth, like extensive agricultural operations. Olson, supra, at 366 (“Because punitive damages are so freakish, capricious, and lottery-like, they discourage the responsible entrepreneur.”). The amendments to the Right to Farm Act, in limiting punitive damages, allow business entities involved in agricultural operations to conduct themselves accordingly, knowing the amount of risk they face by entering into an important state industry like hog-farming.

Plaintiffs’ legal theories have tenuous legal support, but, if accepted, could potentially threaten the day-to-day operations of many agricultural and forestry operations, as will be detailed in a follow-up post.

Sean Placey is a summer associate in the firm’s Greensboro office.

In recent years, farmers and ranchers have been increasingly targeted by animal rights groups trespassing on their properties, stealing farm animals, and other acts of vandalism. The frequency with which undercover animal rights groups infiltrate farms, ranches and other animal enterprises as undercover employees is increasing. In light of this increased activity, farmers and ranchers are searching for new ways to guard their property and protect their animals, especially after a breach of privacy. Although some state legislatures have attempted to regulate the release of video or photographs taken at an animal enterprise without permission, much related legislation has been successfully challenged on constitutional grounds.

For example, in Animal Legal Defense Fund, et al. v. C.L. Butch Otter and Lawrence Wasden, No. 1:14-cv-00104-BLW (D. Idaho Aug. 3, 2015), the court held that legislation which targets journalists or activists, who may be critical of animal enterprises, could violate the constitutional right to freedom of speech. While that ruling protects filming and the subsequent release of a video, there still may be legal remedies that farmers and ranchers can seek against those who enter their operation under false pretenses to harm their animals and business.

The Animal Enterprise Terrorism Act (AETA), 18 U.S.C. § 43, is a federal law that protects against the potential damage and harm caused by members of animal rights groups. The AETA prohibits individuals who have traveled in interstate or foreign commerce, or used or caused to be used the mail or any facility of interstate or foreign commerce, from damaging the property of an animal enterprise, or intentionally putting the owner of an animal enterprise in fear of death or serious bodily injury. An individual found guilty pursuant to the AETA faces a range of penalties, including fines and imprisonment depending on the severity of harm and economic damage caused.

Can farmers and ranchers use the AETA to prosecute those individuals who knowingly accepted employment of an animal enterprise for the purpose of harming that business and the animals therein? To succeed with an AETA claim, farmers or ranchers would have to demonstrate the damage to the animals, 18 U.S.C. § 43(a)(2)(A), or show how undercover employees interfered with or conspired to interfere with the operation. 18 U.S.C. §§ 43(a)(2)(B),(C).

Until these questions are explored in a court of law, best practice on any animal enterprise to prevent loss, damage or harm to animals, equipment and other property is always to thoroughly screen employees and ensure that they are properly trained and supervised.

Sarah Philips is a summer associate in the firm’s Princeton office.

According to the 2017-2018 American Veterinary Medical Association’s Pet Ownership and Demographic Sourcebook, approximately 71.5 million U.S. households own at least one pet, 38% of which are dogs.[1] There is also a large portion of the country that owns non-traditional “pets” – equine, cattle, poultry and other livestock. Pet and livestock owners in urban, suburban and rural areas have a high demand for veterinarian care, but the high barriers to entry in an accredited veterinary school may be limiting animals’ access to medical attention from licensed veterinarians. Further complicating the reality of practicing veterinary medicine is the increase in legal issues resulting from alleged veterinary malpractice suits. Modern pet owners have access to more knowledge about medicine and treatments, and although veterinary medicine cannot guarantee health or long life, pet owners have high expectations.[2] In a time when pets are increasingly accepted as part of the family, pet owners are frequently attempting to hold veterinarians personally liable for the death of their pets.[3]

There are 30 accredited veterinary schools in the United States. Only 27 states are home to veterinary schools; Alabama, California and Tennessee are the only states with multiple veterinary schools.[4] With a limited number of schools, only 10-15% of those who apply to veterinary school are accepted.[5] The geographic location of the school is one of many factors that contributes to the low acceptance rates.[6] According to the Association of American Veterinary Medical Colleges’ 2018-2019 Annual Data Report, a majority of students accepted at any given school are residents of that state.[7] Resident students likely receive discounted tuition and have limited moving costs while those who come from out of state pay higher tuition and can expect high moving costs. Students who do not live in a state with a veterinary school are at a severe disadvantage.[8] Their chances of acceptance at an out-of-state school are much lower than in-state residents, and if they are accepted, the higher cost might deter them from enrolling.[9]

Another deterrent for veterinary school applicants is the rigorous prerequisites for application. Candidates need more than just a high GPA; they need significant experience working with animals in the field.[10] Most opportunities to work with practicing veterinarians in the field are in the form of internships with limited stipends or other financial incentives.[11] For those that cannot afford to take on a low paying internship to get the necessary experience, vet school acceptance becomes less likely.[12]

Of those who are accepted, the average individual will graduate with $143,111 in debt.[13] Females can expect to graduate with more debt, and a lower starting salary at their first job than their male counterparts. For example, in the equine industry, a female equine veterinarian can expect to earn about 16.2% less than her male counterpart.[14]

After graduation from veterinary school, graduates face a different set of challenges. The American Association of Equine Practitioners estimates that 4 out of every 5 practicing equine veterinarians have work-related injuries, but cannot afford to take time off to heal. In addition to work place injuries, many veterinarians struggle with mental health challenges. According to a 2015 CDC survey, 1 in 6 veterinarians have considered suicide,[15] and given their frequent exposure to dying animals and access to controlled substances, this number is quite alarming.

The country has a growing need for healthy, qualified and diverse veterinarians with a variety of specialties. However, encouraging students to take on the challenge of applying to and completing veterinary school is becoming more difficult. In addition to high debt, long hours and salary discrepancies, potential veterinarians may also be deterred by the increasingly frequent malpractice suits accusing them of failing to care for pets appropriately. For individuals who choose veterinary medicine because of their love for animals, alleged malpractice can not only be a financial burden, but an emotional and mental hardship as well. Addressing disparity in cost, opportunities and post-graduate employment options, in addition to providing more legal protection for veterinarians will help potential, well-qualified individuals choose to pursue a career in veterinary medicine.

Sarah Philips is a summer associate in the firm’s Princeton office.

 

[1] Pet Ownership and Demographic Sourcebook, American Veterinary Medical Association (2017-2018 ed.).

[2] Mary Margaret McEachern Nunalee and G. Robert Weedon, Modern Trends in Veterinary Malpractice: How Our Evolving Attitudes Toward Non-Human Animals Will Change Veterinary Medicine, 10 Animal L. 125 (2004).

[3] Id.

[4] Why the Majority of Veterinary School Applicants are Denied, (Mar. 20, 2017), https://bit.ly/2XckYCs.

[5] Id.

[6] Id.

[7] Annual Data Report 2018-2019, Association of American Veterinary Medical Colleges (2019)

[8] Why the Majority of Veterinary School Applicants are Denied, (Mar. 20, 2017), https://bit.ly/2XckYCs.

[9] Id.

[10] Id.

[11] AVMA-AAEP 2016 Survey of Equine Practitioners, (2016).

[12] Lisa M. Greenhill, MPA, EdD, The Market for Veterinary Medical Education, Association of American Veterinary Medical Colleges (Oct. 22, 2018)

[13] Malinda Larkin, Salaries, Debt for New Graduates Continue to Increase, American Veterinary Medical Association (Nov. 28, 2018), https://bit.ly/2NaPXtH.

[14] AVMA-AAEP 2016 Survey of Equine Practitioners, (2016)

[15] David Leffler, Suicides Among Veterinarians Becomes a Growing Problem, The Washington Post (Jan. 23, 2019), https://wapo.st/2AX5uoA.

In a 6-3 decision, SCOTUS rejected the “substantial competitive harm” test, as applied to FOIA’s Exemption 4, established by the D. C. Circuit in National Parks & Conservation Assn. v. Morton, 498 F. 2d 765, 767 (D.C. Cir. 1974) (“the National Parks test”) and adopted by many other appellate courts since that time.  See Food Marketing Institute v. Argus Leader Media, 588 U.S. ____ (2019).  After overcoming the jurisdictional hurdle facing FMI—known as “standing”—the Court undertook a traditional review of the meaning of the statutory text of Exemption 4, as enacted by Congress in 1966.

Exemption 4 shields from mandatory disclosure ‘commercial or financial information obtained from a person and privileged or confidential.’  See, id (quoting 5 U.S.C. §552(b)(4).

With no statutory definition of “confidential,” the Court analyzed the definitions of the term in 1966-contemporaneous dictionaries to determine the “ordinary, contemporary, common meaning” of “confidential” at that time.  At issue in this case, was the confidential nature of sales data from grocery stores participating in the SNAP USDA program, where the data provided to the government was privately guarded and provided to USDA with the understanding that the government would not disclose it to anyone.

The Court’s holding that the National Parks’ test requiring a heightened standard—proof that release of the confidential information would cause the releasing entity substantial competitive harm—was not supported by the plain meaning of the statute and which Congress had left untouched.  This decision is important, not only to the grocers involved in the at-issue USDA program, but to the hundreds of other businesses and industries represented by the multitude of amicus curiae briefs filed in support of FMI’s Petition.  See, e.g., Brief amicus curiae of Retail Litigation Center, Inc., Brief amici curiae of Alliance of Marine Mammal Parks & Aquariums, et al., Brief amicus curiae of Chamber of Commerce of the United States of America, and Brief amici curiae of National Association of Convenience Stores, et al.

Importantly, the Court found “National Parks’ contrary approach [to statutory interpretation] . . . a relic from a ‘bygone era of statutory construction.’”  Now, in additional to protecting confidential information a private entity voluntarily provides to the government, confidential information required to be provided to the government should also be exempt from disclosure pursuant to Exemption 4.

The Court concluded,

At least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy the information is ‘confidential’ within the meaning of Exemption 4.

At least one tool in the weaponization of FOIA has been removed.

 

Can veterinarians comply with state and federal requirements for the Veterinary Client Patient Relationship and practice via telemedicine?

Nearly, if not all states, have some requirements regarding the establishment and maintenance of a veterinarian-client-patient relationships (VCPR) before the veterinarian can treat an animal owned by a client.  In New Jersey, for example, the regulations (not statute) defines the VCPR as

  1. i) The veterinarian has undertaken to make medical judgments regarding the health of an animal or animals, herd or flock being treated and the need for medical treatment;
  2. ii) The client has retained the services of the veterinarian;

iii) The veterinarian has sufficient knowledge of the animal or animals, herd or flock to initiate at least a general or preliminary diagnosis of the medical condition of the animal or animals, herd or flock;

  1. iv) The veterinarian is available for follow-up treatment; and
  2. v) The veterinarian maintains records on the animal or animals, herd or flock in accordance with N.J.A.C. 13:44-4.9.

N.J.A.C. 13:44-4.1 (b)(1).

FDA requires veterinarians issuing a Veterinary Feed Directive (VFD) (essentially a prescription for treatment of livestock and poultry) to:

(i) Be licensed to practice veterinary medicine; and

(ii) Be operating in the course of the veterinarian’s professional practice and in compliance with all applicable veterinary licensing and practice requirements, including issuing the VFD in the context of a veterinarian-client patient relationship (VCPR) as defined by the State. If applicable VCPR requirements as defined by such State do not include the key elements of a valid VCPR as defined in § 530.3(i) of this chapter, the veterinarian must issue the VFD in the context of a valid VCPR as defined in § 530.3(i) of this chapter.

21 CFR § 558.6(b)(1).

FDA has identified states that do not define the VCPR in the same way that FDA does, and has mandated that veterinarians writing VFD’s must comply with federal standards.  See FDA’s guidance.

Consider the continued contemporaneous evolution of three veterinary concerns regarding the proper care of livestock and poultry in the United States:

  1. The decreasing number of food animal veterinary practitioners, particularly in rural states;
  2. The state licensure requirements for each veterinarian practitioner; and
  3. The FDA requirements regarding the establishment of a VCPR prior to issuance of a VFD.

The decreasing number of food animal practitioners may have to be licensed in multiple states and be compliant with state and federal laws (which in the case of the VCPR may be inconsistent) to provide care to their patients, including medications pursuant to a VFD.  One viable solution to assist these veterinarians and the animals they treat, is telemedicine.  In many situations, veterinarians can comprehensively evaluate the needs of a herd or flock without visiting in person.  While there should be an initial in-person visit, veterinarians, like physicians, should be able to communicate, diagnose and prescribe for remote herds and flocks without a required in-person visit.  State licensing laws may have to be relaxed as a decreasing number of veterinarians engage in large anima/food animal practice.

Arizona has recently relaxed its laws, permitting out of state professionals moving to the state to engage in licensed practice without completing the previously required rigorous state licensing testing.  Historically, states have permitted limited consultation from out of state veterinarians.  Farmers and ranchers would certainly benefit if they could access veterinarians from other states that specialize in food animal medicine, without requiring a physical presence and in-person examination in each state.

Beef producers and packers have been required for years to “identify hazard points and critical points during beef slaughtering, which is a necessary first step toward developing a hazard analysis and critical control point system to control meat contamination by Escherichia coli O157:H7.”  See R. Guyon, et. al, Hazard Analysis of Escherichia coli O157:H7 Contamination during Beef Slaughtering in Calvados, France, J. Food Protection, Vol 64, No. 9, 2001, pp 1341-1345.  While protecting the health of employees and customers is of utmost importance, in addition to the development and implementation of robust HACCP plans that address the former, food producers can help protect themselves from the financial impact of an E. coli outbreak or similar contamination in food products by ensuring that agreements with suppliers, producers, and insurers includes a provision that expressly covers such a situation.  The following summary of a recent case provides guidance for others to use, to avoid similar outcomes.

In April 2011, beef from Meyer Natural Angus (“Meyer”), a Colorado natural beef producer, and processed by Greater Omaha Packing (“GOP”) allegedly tested positive for a dangerous strain of E. coli bacteria.  Meyer Natural Foods LLC v. Greater Omaha Packing Co., Inc. 302 Neb. 509 at *2 (Neb. 2019).

Meyer had a processing agreement with Greater Omaha Packing (“GOP”), pursuant to which GOP would slaughter, process, and fabricate Meyer’s cattle into various beef products.  Id.  The processing agreement also required GOP to maintain property insurance on Meyer property in its possession, with a total value of $1.8 million.  Id. at *5.  Further, Meyer had the option to reject “all products failing to meet the warranties and specifications” contained in the agreement and return said rejected products to GOP and charge GOP its out of pocket expenses of storing and reshipping any products properly rejected by Meyer.  Id. at *6.

On April 25, 2011, Meyer delivered 1600 head of cattle to GOP for slaughter and processing.  After processing, GOP sealed and delivered the beef to Meyer.  Id. at *2.  While on “hold” for testing prior to delivery to stores, 17.5% of the beef tested returned presumptively positive for E. coliId.  Meyer immediately recalled the trucks with the contaminated beef, and sent the beef either to the cooker to be sold at a reduced charge or to a landfill because it was unsafe for human consumption.  Id. at *3.

After the contamination, Meyer sued GOP claiming that GOP was responsible for contaminating the beef and alleging breach of contract, breach of warranty, breach of an indemnity obligation, failure to obtain insurance, and breach of the guarantee.  Meyer moved for partial summary judgment for failure to obtain and maintain property insurance on the value of Meyer’s beef.  The district court denied Meyer’s motion because it found that GOP had a property insurance policy that provided coverage for any non-owned personal property in GOP’s care, custody, and control that GOP “agreed, prior to loss, to insure.”  Id. at *5.  Thus, GOP complied with its contractual obligations.  The district court also granted summary judgment to GOP on Meyer’s remaining claims because Meyer failed to return the rejected products to GOP, as required by the processing agreement.  Meyer appealed.

In March of this year, the Nebraska Supreme Court issued its opinion upholding the district court’s decisions.  On appeal, Meyer argued that the insurance policy’s exclusion of coverage for damage resulting from E. coli constituted a breach of the contractual requirement between Meyer and GOP that GOP maintain property insurance on Meyer’s property in its possession.  Id. at *4.  Nebraska’s Supreme Court concluded that the processing agreement did not contain any language regarding the inclusion of E. coli coverage or the prohibition of exclusions contained within the insurance policy.  Id. at *5.  Thus, GOP did not breach its contract with Meyer by maintaining a policy that excluded coverage for E. coli contamination.  Id.  Nebraska’s Supreme Court also upheld the district court’s conclusion that Meyer was not entitled to damages for GOP’s breach because it failed to return the rejected products to GOP.  Meyer could have avoided the loss caused by GOP’s breach by doing soId. at *6-7.

Meyer also argued that GOP breached its express warranty that the meat it processed would “not be adulterated or misbranded” by contaminating it with E. coli.  Id. at *7.  The Nebraska Supreme Court agreed that GOP breached its express warranty by adulterating the beef with E. coli, but because Meyer failed to return the beef to GOP for full credit as provided for by the processing agreement, it was not entitled to recoveryId. at *8-9.

Lastly, the court rejected Meyer’s negligence claim because there was no evidence presented that demonstrated that GOP was negligent on the days on which GOP fabricated Meyer’s cattle.  Id. at *9.

Takeaways: Review your agreements with third party vendors and ensure that you are requiring those vendors to maintain insurance policies that actually cover the main risks in your business, and be sure to follow the remedies required in your agreements when a breach occurs.

Stayed tuned for more analysis on the court’s conclusion regarding adulterating.

I was recently a panelist at the 2019 annual meeting of the New Jersey State Bar Association discussing legal issues about how to share pets after divorce.  As pets become increasingly important in many households in the United States, their disposition after divorce has become the subject of legal disputes during divorce.  Analysis of the economics related to pet ownership should be used as a tool to help inform adjudicators decide where the beloved pet should reside to insure they are properly cared for.

In the US, 67% of the estimated 84.9 million households reportedly owned a pet, according the 2019-2010 National Pet Owners Survey (“the Survey”), conducted by the American Pet Products Association (“APPA”).  In the 2017-2018 Survey, APPA reported 89.7 million dogs and 94.2 million cats reside in US households, and if you add less traditional pets, like poultry, reptiles and also include horses, the total approaches 400 million.  Americans spent nearly $67 billion dollars on their dogs and cats in 2016, including over $30 billion for veterinary care, supplies and medication, $28.23 billion for food, and $5.76 billion for pet services like grooming and boarding (an area expected to continue to expand).  APPA 2017-2018 National Pet Owners Survey.

At the same time, improvements in veterinary medicine have resulted in the increased life expectancy of pets.  Geriatric pets develop many of the same problems seen in older people, such as cancer, heart disease, metabolic disorders (e.g., kidney disease, liver disease, diabetes), osteoarthritis and senility. Virtually any treatment available to humans is also available to animals, but the cost of that care can be significant. If divorcing parties are bickering over pet ownership, the willingness of each to provide and pay for reasonable veterinary care for the rest of the pet’s life, can help inform the adjudicator when deciding “pet custody” issues.

The human-animal bond is a well-recognized and powerful phenomenon, which makes decisions about “pet custody” particularly emotion-ridden.  While divorcing parties may allege that the pet would be better off with one party, pets will often be just as happy with either party.  In addition to the medical and economic considerations described above, if “custody” is shared, the parties should agree to provide consistent food, housing, and exercise to avoid disruptions that could result in medical or behavioral abnormalities (of the pet).  A board-certified veterinary behaviorist should examine any pet if there are concerns about behavioral issues—before or after divorce.  Since veterinarians have a statutory, professional and ethical duty to the pet owner, ownership issues must be resolved even if custody is shared, to ensure that the veterinarian obtains informed consent before any treatment is provided.

Rabies is a nearly 100% fatal disease when unvaccinated animals and humans are exposed.  As previously discussed the risk of exposure to rabies from dogs imported from other countries, especially from Egypt, has increased exponentially resulting from the shift from pets purchased from USDA licensed or exempt breeders in to the unregulated sales of pets increasingly imported from other countries.

On May 10, 2019, the Centers for Disease Control and Prevention, though publication in the Federal Register, announced that

effective immediately, it is temporarily suspending the importation of dogs from Egypt. This includes dogs originating in Egypt that are imported from third-party countries if the dogs have been present in those countries for less than six months. CDC is taking this action in response to an increase of imported cases of rabies in dogs from Egypt. This action is needed to prevent the reintroduction of canine rabies virus variant (CRVV), which has been eliminated from the United States. This suspension will remain in place until appropriate veterinary controls have been established in Egypt to prevent the export of rabid dogs. CDC will coordinate with other federal agencies and entities as necessary to implement this action.

As, rabies, which can infect any mammal, is typically fatal once clinical signs appear.  There are various forms of rabies, and the United States has been free of the canine variant (although other variants exist in the US) since 2007.  According to the CDC “the canine variant  is responsible for 98% of the estimated 59,000 human rabies deaths worldwide each year (WHO, 2004 [Page 116]).”

CDC initiated its temporary importation ban based on the following incidents resulting from importation of rabid dogs to the US from Egypt:

  1. Importation of one rabies-infected of 26 imported dogs from Egypt on January 29, 2019, imported from a Kansas-based rescue organization into the Kansas City area. The dogs had been “placed into foster care or adopted in the Kansas City metro area of Kansas and Missouri.”
  2. In December 2017, one of four dogs, imported to JFK from Egypt by an animal rescue group, was diagnosed with the canine variant of rabies, infected before departure from Egypt.
  3. In May, 2015 one of 35 dogs and cats, imported into New York from Egypt, was diagnosed with rabies after euthanization. Animals from this shipment were transported to five states, and multiple humans and animals were exposed to the rabies virus.

CD  justified its ban because,

[t]he United States was declared CRVV free in 2007. The importation of just one dog infected with CRVV risks the re-introduction of the virus into the United States. CRVV has been highly successful at adapting to new host species, particularly wildlife. Importation of even one CRVV-infected dog could result in transmission to humans, transmission to other dogs, transmission to wildlife, and of particular concern, could result in sustained transmission in a susceptible animal population, thereby threatening our entire rabies public health infrastructure.

Rabies is just one of many zoonotic diseases that has been imported along with “rescues” from other countries.  Animal and public health remains at risk until animal health importation regulations are applied to shelter and rescue organizations in the same way they are applied to professionally and purposely bred pets regulated by USDA.