Groundbreaking Ruling Finds Poultry Owner Potentially Liable for CAFO’s Discharges
In a landmark decision issued in late July, the federal district court in Maryland allowed citizens to proceed in their lawsuit against a poultry owner attempting to hold that owner responsible for discharges from the farm it contracts with to raise its poultry. The ruling, issued under the federal Clean Water Act (CWA), was a victory for environmentalists in their effort to impose liability on livestock and poultry owners for the environmental violations committed by their contract farms. This case may have implications for hog owners who contract with finishers and cattle owners whose cattle are being fed in feedlots.
In Assateague Coastkeeper et al. v. Alan and Kristin Hudson Farm, et al., Civil Action No. WMN-10-cv-0487 (District of Maryland July 21, 2010), citizen environmentalists sued Perdue Farms Incorporated (Perdue) and Alan and Kristin Hudson Farm (Hudson Farm) claiming they both were liable for alleged unlawful discharges from the Hudson Farm to the Pocomoke River under the CWA. Perdue contracted with Hudson Farm, a concentrated animal feeding operation (CAFO) under the CWA, to raise its poultry.
The plaintiffs’ complaint alleged that Perdue “so supervises, dominates, and controls the actions and activities of its respective poultry growers that the relationship is not one of independent contractor, but rather one of employer and employee or one of principal and agent.” In making this allegation, the environmentalists stated that Perdue dictated to Hudson Farms all aspects of the care and handling for its birds, including feed, supplements, housing, and health care. These requirements were set forth, according to plaintiffs, in contracts “presented to poultry growers with no opportunity to negotiate their essential terms.” The environmentalists’ complaint also alleged that Perdue periodically visited the Hudson Farm to assure that its requirements were being implemented.
Since it was neither a permit holder under any Hudson Farm CAFO permit nor a discharger under the Clean Water Act, Perdue moved to dismiss the complaint. Expanding the potential reach of the CWA to the poultry owner, the court denied Perdue’s motion to dismiss.
As to its claim that it was not a permit holder, the court found that the CWA prohibits the “discharge of any pollutant by any person.” Therefore, one need not be a permit holder to violate the CWA.
As to its claim it was not a discharger, the court determined that the CWA “imposes liability both on the party who actually performed the work and on the party with responsibility for or control over performance of the work.” The decision indicates that a poultry owner’s “liability is determined on the basis of its level of control over their contractors’ chicken operations.” Based on that determination, the court found that the citizens alleged Perdue’s control over the Hudson Farm operations were sufficient to state a plausible claim against Perdue at the motion to dismiss stage.
In extending the potential reach of the CWA beyond the actual discharger, the Court relied on several district court decisions involving other contexts (e.g. parent company exercising control over subsidiary, owner contractor that hired a construction company) and a statement by the United States Environmental Protection Agency (EPA) in the commentary to the 2001 proposed CAFO rule suggesting that owners, “which are responsible for or control the performance of the work at individual CAFOs may be subject to the CWA as an operator of the CAFO.” 66 Fed. Reg. 2960, 3024 (Jan. 12, 2001). Since the ruling occurred at the motion to dismiss stage, the court did not determine that Perdue was actually liable for any violations of the CWA at Hudson Farm, only that Perdue could be responsible.
Although the Assateague Coastkeeper decision controls only in Maryland, other federal district courts across the country may adopt this court’s interpretation of the CWA. The prospect that livestock owners may be responsible for the environmental violations of their contract farms opens up a whole new realm of potential liability for poultry, hog, and other livestock owners who contract with third parties to raise, finish, or feed their livestock.
For more information, read the decision or contact a member of the Gray Plant Mooty Agribusiness team.