Ag Legal Issues in the Time of Covid
By Tim Linden W hile many of the trends regarding legal issues in the agricultural space do not appear to have changed significantly in the past year, the coronavirus, and the pandemic it has unleashed, is certainly top of mind and has greatly impacted the legal process. Civil cases are not going to trial, lawyers and clients are not meeting in person, depositions are being taken by Zoom and government agencies are not operating in the same manner as they were a year ago. Western Grower & Shipper contacted a handful of attorneys specializing in ag law to get their take on the current situation. Collectively, they see more nuisance lawsuits and demand letters as plaintiff attorneys have reportedly increased their efforts to manipulate class action lawsuits. There are also new legal actions relating to the coronavirus and more expected to be on their way. Below are reports from five attorneys, all of whom are participants in the Western Growers Agricultural Legal Network, which guarantees members a discount for some legal services. Paul Moncrief of Moncrief & Hart For Paul Moncrief, who specializes in contract law in Salinas, CA for Moncrief & Hart, his work-life has not been upended by COVID-19, but the novel coronavirus has kept him busy dealing with many potential legal issues surrounding the pandemic. In a far-reaching interview covering many different contract types dealing with agricultural practices, the veteran ag law attorney
have an interest in solving the issues without litigation and they typically do so. But Moncrief said that from a strictly legal perspective, a buyer purchasing a product who then loses his customer for that product because of a restaurant closure, for example, would have a difficult time winning litigation based on force majeure. “This doesn’t really fit the definition,” he said. “Market risk is not an Act of God.” Moncrief did note that there certainly were instances when force majeure could be applied. For example, a contracted supplier of produce for an event in the future that could not be held because of a government mandate would have a difficult time trying to enforce that contract. When speaking to WG&S in August, he reiterated that the early weeks of the pandemic did result in cancelled orders and other issues but they were typically worked out between the parties, with contracts since then attempting to add the pandemic to the “Act of God” list. Moncrief said some buyers did try to add that wording to contracts already in place but he advised his clients against signing such addendums. He said the coronavirus, and other issues such as food safety concerns, continue to create situations where buyers, especially large buyers, try to shift liability to the shipper or grower. Moncrief said basic contract law calls for each party to pay the damages they cause. He said not only is it bad business to accept liability for damages you don’t cause, but it can also run afoul of your insurance policy. He explained that insurance companies write policies to insure you against your own actions that result in damages to another party. By accepting liability above that, you risk invalidating your policy. At the very least, your insurance company probably will not pay for the damages that you did not cause even if you contractually accept liability. Moncrief also cautioned against signing contracts that on their face are unfair but the buyer demands your concurrence with a “take it or leave it” offer. He said while this might seem like a coerced signing, the courts will not see it that way. “It is still enforceable,” he said. “It’s the market risk you assume.” Although he did say that public policy might offer some relief. For example, California law is specific about the terms that can be enforced with regard to non-compete clauses that employees are often asked to sign. A company in another state would not be able to enforce such a clause against a California employee if it is counter to California law.
revealed that there are more questions than impacts due to the coronavirus. Parties to both sides of many different contracts are exploring the role that COVID-19 might play in potential litigation, but for the most part, he said using the coronavirus to break a contract is not a winning argument. In law, force majeure or an Act of God, is a common legal clause in contracts that frees both parties from
liability or obligation when an extraordinary event happens. Moncrief said that, like with many legal disputes in the produce industry between buyer and seller, most of the contract issues regarding product during the early stages of coronavirus-caused business shutdowns were worked out between the parties amicably. Buyers and sellers have ongoing relationships so they
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SEPTEMBER | OCTOBER 2020
Western Grower & Shipper | www.wga.com
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