"Environmental Law and Application in Bankruptcy Law as used in In Re Fv Steel And Wire Co."

Appearing in JNREL Vol. 22 No. 2 this comment was written by former staff member Marlene Bennett. Staff member Bryan Henley wrote this abstract.

In the United States, bankruptcy laws allow discharge of most debts in exchange for liquidating of most of the debtor's assets in an attempt to repay as much of the debt is possible. By definition, the claims sought by creditors to a bankrupt debtor exceed, in aggregate, the debtor's available assets. Often, the purpose of bankruptcy proceedings is to mete out the available assets. As one might imagine, excluding a claim has a profound effect for all other creditors. Reduction in any one debt necessarily increases the assets available for all other debts. Such a situation provides a strong incentive for creditors to bicker over debts, often so much so that the bankruptcy estate is devoured by the legal process as opposed to paying the actual debts. Accordingly, efficiency is a strong motivation for bankruptcy procedures, like estimation of debts. Parties often submit arguments praying that the court follow one method or another for estimating the amount owed under a given debt. Such was exactly the salient issue for In re Steel and Wire Co., a bankruptcy case involving environmental cleanup debt. 372 B.R. 446 (Bankr. E.D. Wis. 2007).

In 1989, the Environmental Protection Agency ("EPA") identified the Sherman Wire Company as one of the parties responsible for the environmental harm caused to the Chemical Recycling, Inc. site. This dubious distinction bound the Sherman Wire Company to bear a share of the cleanup costs of this site, which operated as a debt. In 2004, Sherman Wire Co. declared bankruptcy. The committee in charge of the site cleanup (CRI committee) urged the court to estimate the debt at nearly two-million dollars due, among other costs, the expense of hauling away mass amounts of soil. The debtor, Sherman Wire Company, contested the need to remove the soil and argued that other proposed actions by the committee could cause more harm than good. The debtor submitted an estimate of seventy-five thousand dollars. The bankruptcy court is afforded great discretion in determining the proper method to estimate a given debt, and here the court used that discretion. It chose, as a bankruptcy court, to find that the soil removal and other expensive processes proposed by the committee were not necessary.

This interaction between bankruptcy law and environmental is not uncommon. Business entities that have breached environmental regulation are unlikely to be able to predict the cleanup costs that the EPA might bring to bear. These costs can be surprisingly burdensome, as this case exemplifies. The bankruptcy court must act quickly to preserve assets. Environmental law also encourages swift action to handle compromised sites, as faster cleanup abates the risks of harm to the surrounding environment and human life. In her comment titled "Environmental Law and Application in Bankruptcy Law", Marlene Bennett thoroughly analyzes one court's synthesis of environmental law and bankruptcy. If history serves as a model for the future, this will not be the last time that these questions arise and we would all be well served in maintaining a familiarity with these issues.

Addressing Fraud in Organic Farming

This post was written by staff member Adrianne Crow.

Almost everyone has heard of the supposed benefits of organic foods. However, recent problems surfacing in the organic food industry suggest that consumers may not always be getting what they pay for.

A recent article in the Lexington Herald-Leader explained that in the past year, several fertilizer makers, some of which are leaders in the California organic market, have come under fire for using substances in their fertilizers that are banned from organic farms. Jim Downing, California moves to curb organic fraud, LEXINGTON HERALD LEADER, available at http://www.kentucky.com/greenspot/story/939041.html (last visited Sept. 22, 2009). In January, Port Organic Products was raided by federal agents who found a stock of aqua ammonia. Jim Downing, Organic crop fraud targeted, THE SACRAMENTO BEE, available at http://www.sacbee.com/business/story/2188480.html (last visited Sept. 22, 2009). Aqua ammonia is a common source of synthetic nitrogen. Additionally, an investigation by The Sacramento Bee discovered that the Department of Food and Agriculture discovered the company California Liquid Fertilizer adding synthetic nitrogen to its fertilizer. Id. This particular company sold its produce to organic food leaders Earthbound Farm and Driscoll's, as well as other organic farming leaders. Id.

While synthetic fertilizers do not necessarily present health risks to consumers, they are disfavored by organic farmers because of the negative environmental impacts they can cause. Id. These fertilizers utilize increased energy in production, lower the natural fertility of soil and increase water pollution. Id. Furthermore, consumers of organic produce are willing to pay a higher price for the goods because of the promise that they were grown without these types of chemicals. Id.

Despite the controversy caused by these dishonest business practices, the only penalty handed down to California Liquid Fertilizer was to stop selling the product on the market. Id. Reacting to this situation, the state of California, which leads the nation in the organic farming, also plans to be the leader in combating fraud in the industry. Id. Assembly Bill 856, which was authored by Assemblywoman Anna Caballero, addresses these problems in the area of organic fertilizer. Id. A copy of the bill in its current state can be found on Cabballero's website: http://democrats.assembly.ca.gov/members/a28/Legislation/default.aspx. The bill, which should arrive on the desk of California Governor Arnold Schwarzenegger soon, increases penalties for violations of organic fertilizer standards. Id. In addition, it increases the authority that state regulators have over inspections and raises approximately $416,000 per year for enforcement due to new fees imposed on fertilizer makers. Id.

What it means to “maintain” a waste site in Kentucky: A Case Comment on Astro, Inc. v. Environmental and Public Protection Cabinet

Former Articles Editor Rebekah Frazier wrote this comment appearing in JNREL Vol. 22 No. 2. This abstract was written by staff member Tara Hester.

Illegal dumping is a serious problem, and many states, including Kentucky, have enacted legislation to promote the cleanup of hazardous waste sites. KRS §§224.40-305 requires a person to obtain a permit in order to "establish, construct, operate [or] maintain a waste site." In Astro, Inc. v. Environmental and Public Protection Cabinet, the Kentucky Court of Appeals addressed what it means to "maintain" a waste site within the meaning of the statute. Astro, Inc. bought the property in question knowing that it contained a large amount of construction/demolition debris (waste), and then added it's own waste to the existing pile Astro did not have a permit as required by KRS §§224.40-305 to add additional waste to the pre-existing pile and was served with several violations pursuant to the statute.

The Secretary of the Environmental and Public Protection Cabinet (EEPC) found that Astro had maintained a waste site without a permit, and stated that Astro did not have a defense because Astro failed to remove the waste it added to the pile, and thus maintained the site. Astro's main contention on appeal was that although they may be liable for the items they added to the pile, they are not responsible for the pre-existing debris. The court found that Astro maintained a waste site on its' property because Astro placed more debris in the waste site and failed to prevent others from doing the same.

The Astro decision is in line with other state court's interpretations of similar statutes. In Vermont, a defendant stacked piles of chicken manure on his farm to harass his neighbors, under the guise that he was using the manure as fertilizer. In Vermont, as in Kentucky, a permit is required to store solid waste such as chicken manure, and the defendant was found to be in violation of the statute. The Kentucky decision is in line with the Vermont decision because both courts upheld the requirement of a permit for waste disposal sites. In addition to Vermont, Maryland courts have also interpreted waste disposal statutes to reflect the need for permits. In a Maryland case, the defendants were held to be in violation of a Maryland statute for operating a landfill on their property without a permit. Even though the defendants stated they were only accepting the waste to create additional flatland that they could use as pasture land, the Maryland court, much like the Vermont and Kentucky courts, held that because the defendants did not have a permit, they were in violation of the Maryland law.

Although the court in Astro limited it's holding to a specific fact pattern, the Astro decision could be applied to determine how a Kentucky court would rule in a situation where a defendant purchased a piece of property with pre-existing waste but did not contribute any additional waste to the site and prevented others from doing so as well. A Massachusetts case ruled that a landowner is liable for maintaining a waste site if they "keep or sustain" the facility. This suggests that Kentucky landowners must take measures to get rid of the waste site to avoid liability. Additionally, a New York case held that landowners, who allow pre-existing waste to remain on their property, even though they have not contributed any additional waste, are liable for a "continuous" violation. It seems the Kentucky courts would be unsympathetic to landowners who buy property with pre-existing waste. However, because KRS §§224.43-020 provides a defense landowners if they are not the generators of the waste and are not disposing or letting others dispose of waste on their property, landowners with pre-existing waste sites may be able to avoid liability in limited circumstances. Ultimately, it is important to remember when buying property in Kentucky with pre-existing waste, one should be careful not to add to the waste or let others add to the waste to prevent liability.

Fire in the Hole: Aluminum Dross in Landfills

This Note appeared in JNREL Vol. 22. No 2. and was written by staff member Thomas Szcsygielski. Staff member Sunni Harris wrote the following abstract.

Every year there are approximately 8,300 fires that occur in landfills. Landfill fires frequently emit harmful dioxins that can cause cancer, liver damage, skin rashes, and reproductive disorders. A growing subset of these fires is caused when aluminum dross reacts with water.

Aluminum dross is the material that is left behind when aluminum ore is melted or processed. Five million tons of aluminum dross is produced per year as aluminum is often used for such commercial products as pistons, engine and body parts for cars, beverage cans, doors, siding and aluminum foil. Aluminum dross can become dangerous when it is improperly stored in landfills because it is highly combustible when mixed with water.

While aluminum dross storage can be easily regulated by legislation, it currently is not. CERCLA (The Comprehensive Environmental Response, Compensation, and Liability Act) is the primary source of federal jurisdiction over hazardous material dump sites. CERCLA allows the EPA to undertake direct removal or remedial action to protect the public health or the environment when it determines that release of a hazardous substance poses an imminent and substantial danger; however, the EPA has not used CERCLA to regulate aluminum dross because it does not consider aluminum dross a hazardous material. It is interesting that while the EPA does not officially recognize the production of aluminum dross as hazardous, it recognizes the need for its regulation.

Barmet Aluminum Corp v. Reilly illustrates this point well. In Barmet, the plaintiff operated an aluminum recycling plant that produced aluminum dross as a by-product. The plaintiff stored the dross in landfills; however, the EPA placed these landfills on a list of high priority hazardous sites under CERCLA and threatened to hold the plaintiff liable for damage to a nearby stream that originated in the waste. The plaintiff sued for injunctive relief arguing that the EPA forced them to expend resources for expensive, remedial feasibility studies before they were deemed responsible for the damage to the nearby river. The court rejected the plaintiff's argument. Barmet is a demonstration that while the U.S. EPA does not deem aluminum dross as legally hazardous, they recognize the importance of its regulation.

Going forward, there are three main suggestions to decrease the amount of fires that are started because of the improper disposal of aluminum dross: (1) continue to allow landfills to be responsible for their own dross, (2) encourage or mandate companies that produce dross as a by-product to recycle it, or (3) have the EPA classify aluminum dross as hazardous substance. The most effective solution will most likely be a combination of the aforementioned approaches.

Challenging the Government’s Management of Wild Horses in our Western States in The Fund for Animals v. U.S. Bureau of Land Management

Appearing in JNREL Vol. 22 No. 2 this comment was written by staff member Melanie Price. The abstract was written by staff member Derek Leslie.

This Comment analyzes the legal avenues available to activist individuals or groups who seek to prevent a government agency from implementing an environmental plan. The Fund for Animals v. U.S. Bureau of Land Management, 460 F.3d 13 (D.C. Cir. 2006), provides an instructive lesson for potential plaintiffs in this area.

The Plaintiff in this case, The Fund for Animals, attempted to stop the U.S. Bureau of Land Management (hereinafter "BLM") from implementing a plan that would reduce the population of wild horses and burros. The BLM's plan was promulgated in order to address increasing concerns about overpopulation of wild horses and its effect on the ecological balance. In fact, the BLM was specifically tasked with maintaining appropriate management levels of these populations in order to achieve this balance under the Wild and Free-Roaming Horses and Burros Act (hereinafter "WHBA") enacted by Congress. The challenged plan was proposed to Congress pursuant to the Act, passed, and BLM field offices had begun implementing the plan at the time of litigation.

The Fund sought to enjoin the BLM from implementing this plan. They argued that the BLM violated the National Environmental Policy Act (hereinafter "NEPA"), because it did not prepare an environmental impact statement before implementing the plan. Recognizing that 5 U.S.C. §702 mandates that the federal courts are not to review agency policy in the abstract and that the WHBA and NEPA both lacked provisions providing standing, the Fund's claim was based on a cause of action under the Administrative Procedure Act (hereinafter "APA"). Under the APA there is a cause of action to "a person suffering legal wrong because of an agency action, or adversely affected or aggrieved by agency action." Importantly, the APA states that courts may only intervene when a specific final agency action has an actual or immediately threatened effect.

The district court dismissed the parts of the Fund's injunction request concerning the removal strategy because the BLM's plan, in their view, was not a final agency action. The Fund's objections to specific gathers, where the plan had already been implemented, the court suggested were moot. The Court of Appeals, affirmed suggesting that a Budget Request to Congress was too tenuous to the removal of the animals to constitute reviewable specific implementation of a broader agency policy. Moreover, they found that an expired internal memorandum to BLM field offices with guidance on implementing the plan within the allotted time did not represent "final agency action" and because of its expiration date, it was moot. As to the seven gathers where the plan had already been implemented, the Court of Appeals, agreed with the district court that this part of the claim was also moot.

This case demonstrates the narrow way courts will approach review of agency action under the APA. Potential plaintiffs have only a minute actionable window in which to bring a claim satisfying justiciability without raising issues of mootness. Plaintiffs must be keenly aware of this narrow opportunity if they have any hope of getting an injunction against agency action. Groups like The Fund for Animals, would do well to be vigilant as budget proposals come to Congress, in hopes of finding politicians, and votes, sympathetic to their point of view. Sympathy, as this case shows, is not the courts main concern when asked to intervene in agency action.

THE JURY’S ROLE IN EMINENT DOMAIN COMPENSATION AS EXPLAINED IN METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA v. CAMPUS CRUSADE FOR CHRIST, INC.

Appearing in JNREL Vol. 22 No. 2, this comment was written by former Comments Editor Ashley Owens. This abstract was written by staff member Tanner James.

Few legal terms elicit an impassioned response comparable to that inspired by "eminent domain." When discussing the governmental power to take possession of private, real property, the reactions are as varied and intense as one might imagine. Given this volatility, courts are faced with a delicate balancing act when defining the terms and limits of this power and its interpretation.

In Metropolitan Water District v. Campus Crusade for Christ, Inc., 161 P.3d 1175 (Cal. 2007), the California Supreme Court undertook the task of defining the role of judge and jury in determining damages (i.e., compensation) in eminent domain actions. At issue was the question of who should decide what constitutes "the highest and most profitable use to which the property might be put in the reasonably near future." Specifically, when property would require rezoning in order to achieve its "highest and most profitable use," who is to decide whether the possibility of rezoning is sufficient to justify damages based on the planned use of the property?

In a reversal of the lower court, the California Supreme Court held that the jury must be presented any evidence that would show a "reasonable probability" of rezoning. Furthermore, the court held that the question of rezoning-probability should be submitted to the fact-finders if a reasonable juror could find that rezoning is likely. This holding effectively establishes the judge as a gatekeeper, while also granting substantial power to the jury to determine the extent of damages.

The implications of this case are, appropriately, subject to criticism from both poles. While the damages awarded may increase as a result of jury control, the judge still retains the power to exclude certain damages as the ultimate gatekeeper.

Maintaining the Status Quo of Trade with Cuba: The goals of the Embargo

This post was written by staff member Jessica Drake.

In 2008, Fidel Castro stepped down as President of Cuba after ruling his Communist regime for 49 years. Manuel Roig-Franzia, Uncertainty as Castro Steps Down, The Washington Post, Feb. 20, 2008,at A1, available at http://www.washingtonpost.com/wpdyn/content/article/2008/02/19/AR200802

1900147.html. An adversary to American Presidents since the Kennedy era, Castro's continued disregard for international standards of human rights has led this country to place a trade ban against Cuba for nearly 40 years. Despite his resignation, the US embargo against the country continues. See Cuban Liberty and Democratic Solidarity Act ( LIBERTAD), 22 U.S.C.A §§6021- 6091 (1996). However, it is an area of increasing criticism by many US citizens, congressmen, and foreign governments. With President Obama's April 2009 decision to allow travel to Cuba for Cuban-Americans and a democratically-ruled congress, some argue that the embargo could be on its way out. Leslie Clark, Cuban Trade ban stands despite rising efforts to end it, LEXINGTON HERALD LEADER, Sept., 10, 2009 available at http://www.kentucky.com/1084/story/929346.html. However, advocates of the trade ban hold to their belief in the embargo's ability to show civil disobedience to the Communist Nation and its new leader, the brother of Castro himself. The U.S. President's recent decision to renew the ban encourages those who believe civil disobedience is the proper course of action to take towards Cuba.

In 1996, LIBERTAD renewed and codified our country's efforts to limit assistance through trade with Cuba. See supra LIBERTAD. The legislature, in the enactment of LIBERTAD, grounded the trade ban in its stated desire to assist the Cuban people in regaining a democratic government. It found that Fidel Castro exhibited "continued violations of fundamental human rights." 22 U.S.C.A. § 6021(4) (1996). In its rationale, Congress felt the embargo would strengthen international sanctions of Cuba, encourage free elections of governmental officials, and protect US nationals from confiscatory takings by the Castro regime. See 22 U.S.C.A § 6022. To terminate the embargo, the President must find and report to Congress that a transitory government is in place. See 22 U.S.C.A § 2064(a). The President then may, upon consultation of Congress, work to terminate the embargo. See 22 U.S.C.A § 2064(c).

In the past, the motivation behind the economic isolation of the country withstood scrutiny. Recently,opposition has arisen, but on September 15^, 2009, President Barack Obama decided to renew the embargo for another year, standing by his promise to allow Cuban-Americans to travel and send remittances to family there but maintaining the embargo. Juan O. Tamayo, White House renews trade ban on Cuba, MIAMI HERALD, Sept., 15, 2009, available at http://www.miamiherald.com/1264/story/1233997.html.

President Obama declared that he would not consider lifting the ban until Cuba "improves its human rights and frees political detainees." Nelson Acosta, Cuba Chides Obama over U.S. Trade Embargo, Sept., 16, 2009, available at http://www.canada.com/business/Cuba+chides+Obama+over+trade+embargo/2000661/story.html. Many would suggest that his statement seems arbitrary in light of the fact that the embargo poses no serious problem upon the Cuban government. American-made Products Readily Available in Cuba, Miami Herald, Aug. 29, 2009 available at http://www.miamiherald.com/embargo/story/1209009.html. U.S. goods still get into the country on the black market, and the embargo only serves to make the prices of said goods astronomical, furthering the economic divide between the rich and poor in Cuba. See id. Furthermore, the embargo gives the Communist government more fuel with which to blame America for the plight of the increasingly poor nation. With these facts, despite an admirable stand to articulate, we must accept the substance and reality of the thing. If American goods cause this much damage and could do so much more good by legalizing trade, should we not be willing to swallow our pride and try a different way?

“Damages and Injury: Smith v. Carbide and Chemicals Corporation and the Application of Kentucky Law Under the Price-Anderson Act”

Appearing in JNREL Vol. 22. No.2 this comment was written by former Articles Editor Cole Adams. The abstract was written by staff member John Hendricks.

The Price-Anderson Act was enacted in 1957 to encourage private sector development of nuclear power and provide insurance to private corporations in the event of a nuclear accident. The act also created a federal cause of action for accidents and injuries arising from the actions of nuclear power plants. While the federal courts have jurisdiction for actions under the Price-Anderson Act, these courts are required to adhere to state substantive law. In Smith v. Carbide and Chemicals Corporation, the Kentucky Supreme Court provides guidance on the applicable rules of intentional trespass and damages for an action under the Price-Anderson Act.

In 1988, the containments trichloroethylene and technetium-99 were found to be flowing from the groundwater of the Paducah Gaseous Diffusion Plant ("PDGP"). PDGP is located ten miles west of the town of Paducah, Kentucky and while contamination did not exceed regulatory levels, residents of the area were provided with new water sources. Contaminated groundwater was detected to be originating from PDGP again in 1990. Finally, in 1997 a lawsuit was filed in federal court seeking recovery for diminution in property values as a result of the contaminated ground water. On appeal of summary judgment for the defendant the Kentucky Supreme Court granted certification to answer questions of Kentucky law.

The Court first examined whether proof of actual harm was required to state a claim for intentional trespass. Relying on Ellison v. R & B Contracting, Inc. it was held that actual harm was not a required element to maintain a claim of intentional trespass. Secondly, the Court addressed whether proof of diminution in property values due to an intentional trespass gave rise to a right to recover. Acknowledging the common law principal that any encroachment on to the property of another was sufficient to support a finding of actual injury, the Court acknowledged more than nominal damages could be awarded. Finally, it was stated that the measure of damages should be the diminution in the fair market value of the property.

Smith, could have potential long term implications for environmental litigation in the state of Kentucky. The majority's opinion provides the possibility of increased litigation of environmental trespass cases. It appears that intentional trespass cases now have a stronger chance of surviving motions for summary judgment and reaching a jury. The author of the comment provides a more in-depth analysis of the case, as well as an excellent summary of the dissent in Smith and the case's potential impact on the Commonwealth.

Washington Court backs Department of Fish and Wildlife

This post was written by staff member Andrew S. Leung.

Down by the docks in the state of Washington, the natives grow restless. In the perpetual war between environmental interests and the interests of commercial fishermen, Mother Nature has won the latest battle. Thurston County Superior Court recently denied the petition of a group of commercial fishermen seeking a restraining order against the enforcement of Washington Department of Fish and Wildlife ("WDFW") regulations limiting the amount of Dungeness crab harvested per week. Jeremy Pawloski, Court upholds state's limits on crab catch, THE OLMPIAN, available at http://www.thenewstribune.com/news/local/story/869631.html.

At first glance, the WDFW restrictions do not seem unreasonable, as the current allotment of 4500 pounds per week is nearly double the initial allotment of 2500 pounds per week. Id. Nonetheless, Washington's commercial crab fishermen are disgruntled, claiming that their property rights were violated. Id. Plaintiffs' attorney alluded to an upcoming civil suit in which he planned to sue for economic compensation. Id.

Any suit based on the private citizen's right to the fisheries of a state seems doomed from the onset. Following the time tested doctrine of ratione soli, the Thurston County Superior Court based its decision on the premise that the Dungeness crabs belonged to the state, thus foreclosing the possibility of any property rights to said crabs vested in the private citizen. Washington courts have long held that "...fishermen do not have a 'vested' or 'natural' property [r]ight to fish [or] to take fish...." Puget Sound Gillnetters Ass'n v. Moos, 92 Wash.2d 939 at 947, 603 P.2d 819 at 824 (Wash. 1979). The court also warned that "...we must remember that the state, in its sovereign capacity, owns the fish in the waters of the state... [and] [f]ishermen have no private property rights in taking [fish]." Washington Kelpers Ass'n v. State, 81 Wash.2d 410 at 415, 502 P.2d 1170 at 1172 (Wash. 1972).

Furthermore the Washington Kelpers court found that "...the state owns the fish in its sovereign capacity as the representative of and for the benefit of all people in common." Id., at 416. In the present case, WDFW based the new restrictions on the finding that more than 50% of the crab catch was soft-shelled. See supra Pawloski. A Dungeness crab is soft only period immediate following its molt, but before it spawns for the season.

Despite the probable adverse economic effect upon the class of commercial crab fishermen, the court has reached an appropriate conclusion. The WDFW's finding essentially suggests that approximately half of the adult crabs harvested annually in the state of Washington have not yet had the opportunity to add progeny to state waters. The Washington Kelpers decision provides, "...if you don't regulate to reduce the total catch along the line, then your spawning escapement will suffer and your subsequent production will go down." Id., at 419. For now, Washington's commercial crab fishermen will have to tighten their belts so that future generations of crab fishermen will have something to wrap theirs around.

The Endangered Species Act and the Conflict With Modern Economic and Development Interests

This note written by staff member Michael D. Russell appeared in JNREL Vol. 22 No.2. The abstract was written by staff member Ramsey Groves.

Congress enacted the Endangered Species Act (ESA) in 1973. The ESA was enacted because many people were concerned about several species and their diminishing populations. These species included the bald eagle, the American alligator, the wolf, and the grizzly bear. Accordingly, one of the main purposes of the ESA is to protect these and other species of fish, wildlife, and plants. Another purpose of the ESA is to protect the ecosystems of both endangered and threatened species. These ecosystems are termed "critical habitats." Disputes stemming from the ESA often concern the impact of an economic development on a habitat, which ultimately harms a species.

Two competing interests are generally involved in ESA conflicts. These are the interests of conservation and the interests of economic development. The ESA tends to place more value on conservation interests than economic development concerns. Due to these two clashing interests, this statute has produced a great deal of controversy. However, economic considerations also affect the conservation side of the dispute. For example, many citizens, such as fishermen, rely upon a species for their livelihood. If that particular species is not protected and ultimately eradicated, there will be grave economic consequences.

To ensure that specific species are protected, the ESA provides federal agencies with certain duties. Unless the agency has been granted an exemption, the ESA requires every federal agency to guarantee that its actions do not harm an endangered or threatened species. The agency in question is forced to find alternatives if it is determined that specific actions would violate the ESA. If no alternatives are available, a committee is formed to determine whether economic interests outweigh the interests of the ESA. This committee, which has become known as the "God Squad," may choose to allow agency action. This committee is essentially playing God because it determines if a species is sacrificed due to a stronger economic interest.

The ESA does provide for judicial review, but there is no express standard of review included in the statute. According to courts, the arbitrary and capricious standard is the appropriate standard of review under the ESA. Consequently, courts should generally defer to reasonable agency decisions. Courts may not weight interests because, in reality, agencies are better equipped to perform this balancing function.

There has been a great deal of controversy due to the ESA. For example, in the middle of a drought in the Klamath Basin, the government shut off irrigation water to provide sufficient water levels for a species of fish. Due to lack of access to water, farmers and ranchers were adversely affected. Additionally, people in Georgia have faced water shortages because the ESA required a certain amount of water to be released downstream to protect endangered species. These examples illustrate how the ESA forces judgment calls when important but competing interests clash. As a result, the ESA will certainly remain a hotly debated statute for years to come.

Animal Cruelty in Kentucky: Are Horses Provided Adequate Protection?

This post was written by staff member, Matt Cocanougher.

It is nearly impossible to imagine the state of Kentucky without the equine industry. From the Derby, to the Kentucky Horse Park, to our "unbridled spirit", horses are an integral part in creating the culture of the Bluegrass State. Because of their star stature and economic importance, one would assume that Kentucky's animal cruelty laws would be especially strict for those who abuse horses. Interestingly, however, Kentucky law on animal cruelty reserves its most severe punishment for animal fighting while designating other types of animal abuse as lesser offenses.

The Kentucky statute on animal fighting provides that the owner of an animal involved in fighting "for profit or pleasure" as well as the owner of the land where the fight occurred and "anyone who participates in the organization" of the fight are guilty of a Class D felony. Ky. Rev. Stat. Ann. § 525.125 (LexisNexis 2009). This crime carries a penalty of up to five years in prison as well as a fine of up to $10,000. Ky. Rev. Stat. Ann. § 532.020 (LexisNexis 2009); Ky. Rev. Stat. Ann. § 534.030 (LexisNexis 2009). On the other hand, Kentucky's more general statute on animal cruelty states that a party is guilty of animal cruelty in the second degree if they intentionally or wantonly: abandon the animal, are spectators or vendors at an animal fighting event, mutilate, beat or torture an animal other than a cat or dog, . . . or fail to provide adequate food, drink, space or health care for the animal. Ky. Rev. Stat. Ann. § 525.130(1)(a) (LexisNexis 2009). This crime is considered a Class A misdemeanor, and carries a punishment of up to 12 months in county jail along with a potential maximum fine of $500. Ky. Rev. Stat. Ann. § 532.020 (LexisNexis 2009); Ky. Rev. Stat. Ann. § 534.040 (LexisNexis 2009). Given the similarities in the means used to abuse the animals in these statutes, should these two crimes have such a disparity in punishment?

This question is illuminated by a recent Lexington Herald Leader article covering an incident of animal cruelty in Danville, Kentucky. See Danville Man to be Arraigned on Animal-Cruelty Charges, LEXINGTON HERALD LEADER, available at http://www.kentucky.com/latest_news/story/928474.html (last visited Sept. 17, 2009). James Lancaster was charged with animal cruelty after starving horses that were in his care. After an anonymous tip to authorities, the emaciated horses were found in a barn north of Danville. Id. At the time the horses were found, "The equine body condition scores of the 10 animals were 1 and 2, with the highest possible score being 10." Id. Fortunately, veterinarians were able to treat these horses and they were taken out of Mr. Lancaster's care. Id. While this story had a happy ending, Mr. Lancaster's actions raise several legal issues. Even though his possible sentence of a year in jail and a $500 fine is nothing to scoff about, it pales in comparison to what his penalty would have been if he had been involved in animal fighting. This begs the question, is starving or torturing an animal any less blameworthy than participation in animal fighting?

From a policy perspective, this situation also raises the issue of whether this result is tenable from the perspective of the horse industry as many horse owners must trust others to care for their animals. Those in care of the animals, like Mr. Lancaster, have a special responsibility to the horses and their owners. A punishment for animal abuses on par with that of animal fighting may provide a clear example of this special duty to those who are supposed to be caring for the animals.

Land and Home in the American Mind

Written by Will Sarvis this article appears in JNREL Vol. 22. No.2. This abstract was written by staff member Anthony Cash.

The American feelings towards property and home ownership have gone through drastic changes since the first settlers arrived in the United States. The early settlers were primarily informed by English common law, Christianity, and Enlightment philosophy, especially John Locke. These ideas have combined with Native American feelings of closeness to the land to produce a distinctly American way of viewing property and home ownership. This unique bond between Americans and the land they live upon has always informed their reactions to land use restrictions, government takings, and property law generally.

However, the industrialization of the United States and the current post industrial age have made previous affections with land ownership less functional ways of interacting with property. The United States is experiencing many of the same problems which have long plagued Europe. Central to these is a growing population that puts ever greater demands on limited space available. Of course these increased demands lead to a need for increased regulation and progressive zoning laws. These needs often conflict with the almost spiritual connection many Americans feel for their home and property. By examining the history and development of American feelings towards land and land ownership, we can hopefully understand a way forward that takes this bond into account, while advancing responsible land use restrictions.

“State Regulation of Complementary and Alternative Veterinary Therapies: Defining the Practice of Veterinary Medicine in the 21st Century”

Appearing in KJEANRL Vol. 1 No. 1 this article was written by Milton Toby. The abstract was written by staff member John Hendricks.

State regulations of complementary and alternative veterinary therapies ("CAVT") are in a state of upheaval and change. Part of the difficulty of regulating CVAT is defining CAVT under existing statutes. While the American Veterinary Medical Association ("AVMA") has drafted a Model Veterinary Practice Act ("MVPA"), few states have adopted the definition of CAVT provided in the MVPA or language similar to the MVPA. However, thirteen states have adopted a statutory definition of CVAT. Language contained in state statutes regulating CAVT such as "including but not limited to" likely satisfies the requirements of certainty and provides a method for regulating CAVT not specifically mentioned in a particular statutory definition of CAVT.

Even states that lack references to CAVT in their statutes may still regulate CAVT. The legal reasoning used in People v. Amber, would likely be applicable to veterinary statutes which do not specifically reference CVAT. In that case the court reasoned that "[w]hether actions constitute the practice of medicine is dependent upon the facts and not the name of the procedure, its origins or legislative lack of clairvoyance." If applied to most states veterinary statutes this reasoning would mean that the statute may regulate CAVT without specifically mentioning them and that the failure to mention CAVT would not allow non-veterinarian practitioners to operate unregulated within a state.

While states that do not mention CAVT practices may be able to still regulate the procedures, "Hybrid States", which are states that define veterinary medicine in a broad enough way to include some CAVT practices, may have a more difficult time regulating all CAVT practices. These "hybrid states" raise issues of statutory interpretation which have been examined by few state courts. States that have only included specific enumerated CAVT practices in the definition of "veterinary medicine" have created an inference that non-enumerated CAVT practices do not constitute veterinary medicine.

Six states have also provided specific exemptions from state veterinary regulations for CVAT practices. Many other states provide non-specific exemptions under which CVAT practices may be included. However, the language of these statutes does not make it clear that CVAT practices are exempted. The lack of uniformity and conflicting language among state regulations and the need for uniform guidelines are demonstrated by the confusing and vague exemptions that CVAT practices may fall under.

Ultimately, there is a need for a harm-based system of state regulation of CAVT. In comparing the harm-based system to State v. Norene, the harm that state regulators should attempt to prevent should not be a generalized fear of public harm but a well defined risk. The use of CAVT treatment should not be limited to only licensed veterinarians. Instead licensing and supervision could allow adequately trained individuals to provide CAVT treatments through a uniform and defined statutory scheme. Several methods exist for creating a more reasonable and balanced regulation of CVAT procedures including gaining the animal owners consent, the use of liability insurance, and guaranteeing that licensed individuals are under the direct or indirect supervision of a licensed veterinarian.

U.S. Control Over Extraterritorial Water Pollution: The Interplay Between International and Domestic Law

This comment written by staff member Kathryn Martin appeared in JNREL Vol. 22 No.2. The abstract was written by staff member Meghan Jackson.

As a result of today's ever-growing global economy, lawmakers are faced with the challenge of effectively regulating the activities of international businesses and adequately enforcing international laws without overstepping their respective jurisdictional boundaries. In an effort to ensure compliance with the International Convention for the Prevention of Pollution from Ships and the Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships (collectively MARPOL), the United States established the Act to Prevent Pollution from Ships (the APPS). The APPS requires ships entering U.S. territories to keep accurate oil record books, which are subject to inspection by U.S. authorities upon entering a U.S. port.

In United States v. Ionia Mgmt. S.A., 498 F.Supp.2d 477 (D.Conn. 2007), the United States District Court for the District of Connecticut upheld the authority of the United States to impose criminal penalties for violating the APPS. The defendant argued that according to the "law of the flag" doctrine, the United States was without jurisdictional authority to impose such penalties as the defendant flew a Greek flag. However, the court determined that since the violations (presenting false oil record books) occurred in a U.S. port, the United States had the jurisdictional authority to prosecute them regardless of where the actual oil discharges took place.

Ionia Mgmt. is an important decision as it impacts both environmental law and international law. First, it illustrates a growing trend among U.S. courts to view U.S. law and international law as working with each other, not against each other. In addition, it sends the message that U.S. courts are serious about enforcing the APPS and preventing environmental harm.

Horse Slaughter in America, an increasing practice?

This post was written by staff member Katie Shoultz.

Horse slaughtering remains a heated issue in the equine industry with bills constantly being introduced to the members of federal and state House and Senate Committees. In 2007, the three remaining horse slaughterhouses ceased operation after Illinois legislation banned horse slaughter within the state and was upheld under Cavel Intern., Inc. v. Madigan, 500 F.3d 551 (2007) along with the Fifth Circuit Court of Appeals upholding a Texas state law that prohibited the sale of horsemeat for human consumption. Empacadora de Carnes de Fresnillo, S.A. de C.V. v. Curry, 476 F.3d 326 (5th Cir.2007). Last year, in 2008, no horse processing facilities were in operation within the United States but horses continued to be exported to Mexico and Canada and the landscape continues to change.

In Montana, after Gov. Brian Schweitzer allowed H.B. 418 to lapse into law by taking no action, private horse slaughter/processing plant development is now permissible within the state. Pat Raia, Montana Horse Slaughter Bill Becomes Law, The Horse, available at http://www.thehorse.com/ViewArticle.aspx?ID=14098. The bill was introduced by state Representative Ed Butcher. Id. Schweitzer vetoed the bill in April 2009 with an amended version for review by the legislators. Id. However, the bill was sent back to Schweitzer in its original format. Id. This second time, Schweitzer neither vetoed nor signed the bill that has now become law.

H.B. 418 not only allows for horse processing plant development, but it also affords protection from legal challenges. If an action is filed in district court challenging the issuance of a license or permit, the plaintiff must post 20 percent of the horse processing plant's construction or operation costs as a surety bond. Id. It also disallows the issuance of an injunction that would stop or delay construction " . . . based on legal challenges or appeals of a permit, license, certificate, or other approval issued in conjunction with environmental laws." H.B. 418, 2009 Leg., 61st Sess. (Mt. 2009).

However, it is certainly only a matter of time before the constitutionality of this law is challenged. It also raises issues regarding food safety compliance. Any meat processing plant operating within the U.S. is subject to USDA inspections and must comply with USDA regulations. USDA, http://www.fsis.usda.gov/HELP/FAQs_Hotline_Inspection/index.asp (last visited September 14, 2009). As such, any horse slaughter/processing plant that may become operational within Montana is subject to USDA regulations and inspections. In 2005, the USDA lost federal funding to inspect horse-processing plants via the Ensign-Byrd Amendment to Fiscal Year 2006 Agriculture Appropriations Bill. The Humane Society of the United States, Congress Addressing Horse Slaughter Cruelty in Federal Legislation, Jan. 15, 2009, http://www.hsus.org/press_and_publications/press_releases/congress_introduces_horse_slaughter_bill_011509.html. The question then becomes: where will the meat go and how will it be sold?

Exactly how "organic" does organic food have to be?

This post was written by staff member Derek Leslie.

As one peruses the local grocery store, or spends a Saturday morning at their local farmer’s market, it quickly becomes apparent that foods labeled natural or organic have really taken off. Grocery store chains devoted to the once-niche organic food market have expanded rapidly in the past decade. Indeed, it is hard to grab a bite these days at all without hearing the buzz words associated with this bona fide food phenomenon. And while its success as a brand and a marketing tool seems clear, the word organic may not be as straightforward as you might have hoped.

In 1990 Congress enacted the Organic Foods Production Act (OFPA) in order to provide consistent national standards for producing and marketing organically produced agricultural products. Organic Foods Production Act (OFPA), 7 U.S.C.A. §6501 (West 2009). OFPA requires the Department of Agriculture to promulgate regulations to effectuate its purpose. These regulations, then, provide the legal standard for the certification of foods as “organic”. Specifically, to be sold as organic, a food must “be produced and handled without the use of synthetic substances, such as pesticides, and in accordance with an organic plan agreed to by an accredited certifying agent and the producer and handler of the product.” Harvey v. Veneman, 396 F.3d 28, 32 (1st Cir. 2005) (citing 7 U.S.C. § 6504). An organic plan refers simply to an agreed upon procedure to follow in the care of the agricultural product in order to ensure it meets the standards set forth in the OFPA and the associated regulations. Organic Production and Handling System Plan, 7. C.F.R. 205.201 (2009). This includes plans to make certain synthetic substances as well as products exposed to synthetic substances do not come into contact with the organic product. Id. This, however, is just the beginning of the process.

Surprisingly, all organic foods are not created equal. Labeling and certification are, therefore, not quite as simple as “organic” or “not organic.” Actually, it consists of a four-tier labeling system based upon the percentage of organic ingredients the food contains: products containing 100% organic ingredients may be labeled “100 percent organic,” products containing 94 to 100% organic ingredients may be labeled “organic,” products made from 70 to 94 % organic ingredients may be labeled “made with organic (specified ingredients or food groups),” and finally, foods that contain less than 70% organic ingredients may identify organic ingredients used on its label as “organic.” Product Composition, 7 C.F.R. § 205.301 (2009).

Moreover, products in the first two tiers of the labeling categories may bear both a United States Department of Agriculture seal and the seal of a private certifying agent. 7 C.F.R. §§ 205.303(b)(4)-(5)(2009). Products in the third tier, those made from 70 to 94% organic ingredients, may bear the seal of a private certifying agent, and products in the final tier, those containing less than 70% organic ingredients, may not bear a USDA seal nor that of a private certifier. 7 C.F.R. § 205.304 (2009); 7 C.F.R. § 205.305(b) (2009).

This, still, is not the end of the process. OFPA requires the Secretary of Agriculture to establish a National Organic Standards Board to create a list of synthetic substances recommended as exceptions to OFPA’s general prohibition against their use in the production of organic products. Another series of guidelines within OFPA exists for these exceptions. 7 U.S.C. 6517(a) (West 2009).

With the growth of the organic food industry, these regulations are having a significant impact on the lives of average American citizens, who remain largely oblivious to their operation. If we are to become savvy organic food consumers, it is necessary to familiarize ourselves with the labels and certifications that come with the territory. Only then will we be equipped to truly know what we are eating.

“The Pending Farmers’ Market Fiasco: Small-Time Farmers, Part-Time Shoppers, and a Big-Time Problem”

Written by staff member Brandon Baird, this Note appeared in KJEANRL Vol. 1 No. 1. This abstract is written by staff member Brandon Wells.

The recent growth in farmer’s markets has created increased complexities in dealing with liability for injuries from food sold at these markets. The main focus of this note is on the implications of applying the modern “consumer expectations” test of food liability to the markets, as well as what duties the vendors at these markets may owe to the consumers that visit them.

The analysis begins with a brief discussion of the history of farmer’s markets, noting that farmer’s markets have been around essentially as long as people have been trading for produce. A brief timeline is provided, outlining the shift from early products liability law that applied a strict liability theory to the sellers of food to the modern “consumer expectations” test. The “consumer expectations” test actually provides food purchasers less protection than strict liability, mainly because the “consumer expectations” test allows a jury to decide whether the reasonable consumer should have expected to find the defective aspect of the food.

The legal liability of the farmer’s markets is of significant importance, and there is much concern over whether the mostly uninsured farmer’s markets can continue to thrive while facing inevitable products liability claims for defective food. There is also an interest in the protection of farmer’s market consumers, and how the law can come to their aid. Courts have found manufacturers and restaurants liable for failing to warn of possible contamination in food, and the duty to warn should be applied to farmers in markets as well.

While some markets do require their vendors to carry liability insurance, unfortunately most do not. This opens up vendors to a potentially unlimited amount of liability. Most farmers’ market vendors don’t have many assets, and while this may prevent them from acquiring insurance; it may also prevent them from ever having to defend against a claim. Pursuing a claim against a vendor with little assets to satisfy a judgment may not be practical for injured consumers.

Although growing more prominent with local purchasers trying to save money in a tough economy and those that just want to enjoy local fresh produce; farmer’s markets are not completely safe for consumers. Contamination of food is at great risk with farmer’s markets, especially since farmers are mostly unregulated and are allowed to process foods such as jam, jelly and cake in their own kitchens. A failure to warn combined with uninsured vendors makes claims against farmers more complex and less remedial than those against large food retailers. While farmer’s markets have the ability to be a great part of our future society, the legal liabilities involved are certainly a risk factor we can’t ignore.

World Equestrian Games Bring Tourists (and Transient Tax?)

This post was written by staff member Tanner James.

With the Alltech FEI World Equestrian Games coming to Lexington in September of 2010, masses of spectators will likely descend upon the Commonwealth in record numbers. Local hotels and inns will thrive, but at some point they will almost certainly reach maximum occupancy, and the prospect of cashing in on this problem has come to the attention of local homeowners. Many Lexington residents are willing to rent out their homes to the city’s newest visitors—for a healthy fee, of course. But things may not be so simple.

As of this writing, Lexington officials are engaged in research and deliberation regarding state and municipal laws that may present obstacles to the would-be temporary lessors. Linda Blackford, WEG rentals might face hurdles, LEXINGTON HERALD LEADER, available at http://www.kentucky.com/news/local/story/894703.html. From zoning laws to health department rules, these rentals may be subject to the same legal standards as full-sized hotels. Id. Particularly complex and noteworthy, however, is the potential for tax liability. Id.

Established by the Kentucky Code, there exists a “special transient room tax” that may be levied by an urban-county government upon “all persons, companies, corporations, or other like or similar persons, groups, or organizations doing business as motor courts, motels, hotels, inns, or like or similar accommodations businesses.” Ky. Rev. Stat. Ann. §91A.390(1) (West 2008). Monies collected from this tax are for the benefit of tourist and convention commissions under the theory that hotels, motels, inns, etc. all benefit from the use of this revenue. Lexington v. Motel Developers, Inc., 465 S.W.2d 253, 254 (Ky. 1971).

The amount of the tax is initially restricted to no more than three percent (3%) of the rental price, though additional taxes may be applied dependant upon factors too complicated and numerous to discuss here. Ky. Rev. Stat. Ann. § 91A.390 (West 2008).

This all adds up to substantial source of confusion for those wishing to rent out their homes, as well as for Lexington officials who must research and clarify the issue. Will local homeowners be taxed like hotels? Or, will the state provide for an exemption? The answers to these and related questions stand to have a substantial impact on the atmosphere surrounding the World Equestrian Games.

In a recent decision...

...the United States Supreme Court upheld the authority of the United States Army Corps of Engineers (the Corps) to issue permits for the discharge of slurry, a by-product of the mining technique referred to as “froth flotation.” Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, 129 S.Ct. 2458 (2009). Overturning the Court of Appeals for the Ninth Circuit, the Supreme Court determined that slurry is, in fact, “fill material” as defined by the Clean Water Act (the CWA or the Act), and, in accordance with the CWA, the disposal of such material shall be regulated by the Corps without regard to the strict limitations imposed by the Environmental Protection Agency (the EPA) for the disposal of pollutants. Id. at 2463.

The defendant in the case, Coeur Alaska, Inc. (Coeur Alaska), attempted to revitalize an 80-year-old gold mine in Juneau using the “froth flotation” technique whereby the mine’s crushed rock would be mixed with certain chemicals, resulting in the separation of valuable minerals. Id. at 2463-2464. One of the considerations in developing this plan, as is common in most mining operations, was what to do with the mixture of crushed rock and chemicals, referred to as slurry, once the valuable minerals were extracted. Coeur Alaska determined that the most cost-efficient and environmentally-friendly method of disposal would be to deposit the slurry into a nearby lake. Id. Upon approval by the Corps to implement its plan, several environmental activist groups filed suit against Coeur Alaska alleging that the mining company did not comply with the CWA. Id. at 2463.

The Supreme Court’s decision was not a difficult one as the language of the CWA and the regulations that accompany the Act clearly give the Corps the authority to issue permits for the discharge of slurry. However, the Appalachia Restoration Act, which was introduced in the Senate in March, 2009, proposes to change the definition of “fill material” to exclude slurry. S. 696, 111th Cong. (2009). Although no major congressional action has been taken, the Bill presents another potential challenge for companies like Coeur Alaska in the development of their mining operations.

The following post was written by staff member Meghan Jackson.

Topping v. Commissioner: An Example of How an Equestrian Taxpayer Can Utilize "Single Activity" to PReclude the IRS "Hobby Loss" Challenge

This comment appears in KJEANRL Vol. 1 No. 1 and was written by comments editor Anna Garcia. The abstract was written by staff member Sunni Harris.

Professionals in the equine industry are prone to having their horse-based activities classified as “hobbies” by the IRS. Examples of activities that are considered hobbies by the IRS include, but are not limited to: racing, showing, boarding, and breeding horses. Often professionals in the equine industry utilize these same activities to promote their equine businesses. The equine professional taxpayer suffers non-deductible losses when horse-based activities relating to his or her business are classified as hobbies instead of what they really are: business pursuits. Mrs. Garcia’s comment advises equine professionals on how to avoid hobby loss challenges.

In order for an equine professional to avoid a hobby loss challenge, he or she must prove that the activities the IRS classifies as “hobbies” are in reality business activities. The best way to convince the IRS that horse-based activities are business related is by aggregating the activities together, showing that they are sufficiently interconnected to be considered a single activity. When hoping to avoid a hobby loss by claiming a “single activity,” taxpayers should: (1) develop a written business plan integrating the various business activities, (2) keep and consolidate the records and books of multiple activities, (3) utilize services of the same manager and CPA for all activities, (4) use the same assets for both businesses, (5) file a single Schedule C form for sufficiently related business and hobby activities, (6) employ conventional advertising, unless the industry custom creates an exception, and (7) create “goodwill” by participating in and actually winning public competitions related to the hobby. By employing the aforementioned advice, the taxpayer is often able to show the organizational and economic relationship of their activities, thus improving the taxpayers chance of winning against the IRS.

“Disappearing Acts: How Parens Patriae Makes Private Environmental Suits Vanish in the Blink of an Eye”

Appearing in KJEANRL Vol. 1 No. 1 this comment was written by former Editor-In-Chief Chris Way. The abstract was written by staff member Stephanie Wurdock.

Citizen suits essentially allow private citizens to litigate on behalf of themselves and the general public against entities who violate environmental statutes. However, after those citizens bring suit, the government may assume the role of “parens patriae” in which it acts on their behalf. The result is often a “consent decree,” a settlement agreement between the government and the offender. This action ends in dismissal of the original citizen-suit.

By focusing on a 2004 citizen-suit in which injunctive relief and civil penalties were sought for numerous violations of the Clean Air Act (CAA), one may examine the reasons for the parens patriae policy. This in-depth examination provides a path for exploring the potential implications of barring subsequent private suits brought under citizen provisions.

An important question concerning suits of this nature is when parens patriae applies and whether or not it creates privity between the government agency and the private citizens it represents. The courts have followed a number of different guidelines to make such determinations and to decide when a consent decrees bar further citizen-suits. Looking to the standards developed by the Eighth, Seventh, and Second Circuits presents a comprehensive view of these approaches. Furthermore, an analysis of those courts’ decisions provides a basis for the holding in the 2004 citizen-suit in which the “diligent prosecution test” of the Seventh Circuit was adopted.

The implications of the Court’s holding include the potential for widespread application of the “diligent prosecution” standard in similar suits and the unaffected ability of the government to address environmental violations. The decision also has significant implications for what remedies are available to the individual citizens of the original plaintiff class. Finally, the holding provides additional individual causes of action for persisting environmental violations.

Coexisting: Track Betting and Lottery Prohibitions

This post was written by staff member Alex Torres.

While a great number of states authorize, if not actively run and endorse, lotteries there was a time when such widespread presence was non-existent. Specifically the Supreme Court in Champion v. Ames, 188 U.S. 321 ( 1903) upheld, as within Congress’ powers under the Commerce Clause, the Federal Anti-Lottery Act which prohibited the transport of lottery tickets across state lines. While lotteries have become increasingly prevalent among the several states in the century since the decision in Champion tensions have arisen when this prohibition, which was incorporated into multiple state constitutions in the following years, was alleged to prohibit other types of gambling.

Specifically, the Supreme Court of Michigan was called on in Rohan v. Detroit Racing Ass’n, 314 Mich. 326, 345 (Mich. 1946) to determine whether a state statute authorizing the licensing and “parimutuel betting” violated the Michigan Constitution providing that “the legislature shall not authorize any lottery nor permit the sale of lottery tickets.” MICH. CONST. of 1908, art. V, § 33. Should the court have found that horse betting did qualify as a lottery the import would have been to establish a precedent against horse betting and, by extension, the horse racing industry as a whole as a result of extensive lottery prohibitions in state constitutions across the country.

Thankfully the court held that gambling on horse races did not come within the penumbra of a lottery. The court based this primarily on the logic that lotteries were differentiated from horse races, and presumably other games of ‘chance’, on the premise that the result of a lottery could not be divined by “will… human reason, foresight [or] sagacity.” Rohan, 314 Mich. at 343(citing People v. Elliott, 74 Mich. 264, 267 (Mich. 1889). Chance was further emphasized as a necessary ingredient in the finding that a system was a lottery with the court emphasizing that, “[c]hance is an essential element of a lottery in the sense that, unless a scheme for the awarding of a prize requires that it be awarded by chance, it is not a lottery.” Id. at 344. The court held that betting on horse racing required more than mere chance, specifically that winners were not ones chosen at random but those who, by their own volition, “bet on the winning horse.” Id.

Since the winners were not determined by mere chance, but by exercise of “judgment and discretion” in selecting their entrants, the court found that pari-mutuel betting fell outside the purview of the lottery prohibition and was therefore not unconstitutional in that regard. Id. at 346. This holding is especially relevant as the 6th Circuit is home to our nation’s greatest reserve of equine potential which would have been unfairly stunted should horse betting have been found violate. Further, the court’s holding that horse betting was more than mere chance imparts an air of respectability, and perhaps glamour, to our equine industry, differentiating it from mere lotteries and other games of chance.

No Contest? An Analysis of the Legality of Thoroughbred Handicapping Contests under Conflicting State Law Regimes

Appearing in KJEANRL Vol 1. No.1 this article was written by Laura A. D'Angelo & Daniel Waxman. The abstract was written by staff member J. Anthony Cash.

Gaming and the equine industry have long and profitable history together. However, the rise of viable gaming options has reduced the market share of gaming revenue collected via traditional track betting on horse races. In response the horse racing industry has experimented with a number of tactics, but none have been more successful than the advent of handicapping tournaments.

A handicapping contest holds much of the same appeal as a fantasy sports league or the World Series of Poker. In a handicapping contest, the most popular of which is the National Handicapping Championship, players pay an entry fee to bet set fictional amounts on a set number of specified races. The player who accumulates the largest fictional bankroll wins the contest and a significant share of the initial pool of entry fees. This creative format creates concern about its legality in a number jurisdictions.

Laura A. D’Angelo and Daniel Waxman confront this problem, analyzing the legality of handicapping contests under the state laws of both Kentucky and Florida, states with a significant horse racing industry. While providing a thorough analysis of the law of each jurisdiction, the authors illustrate a number of possible challenges to the legality of handicapping contest and their possible solutions. Ultimately, the authors’ analysis reveals the incompatibility between the gaming laws of Kentucky and Florida, the possible liability to horse racing establishments conducting handicapping contests, and the subsequent need for an industry wide push to enact legislation permitting handicapping contests.

In order to reach this conclusion, the authors investigate the Predominance/Dominant Factor Test and the Any Chance Test, two tests which have been used by Kentucky courts to determine whether an activity qualifies as a game of chance as opposed to a game of skill. Under Kentucky law wagers on games of chance violate the criminal prohibition against gambling, while wagers on games of skill do not. While the authors make a strong argument that handicapping contests qualify as games of skill under the Predominance/Dominant Factor Test and are, therefore, legal in Kentucky, they also point to case law that could indicate the more restrictive Any Chance Test applies in Kentucky. If that were the case, then handicapping contests would violate Kentucky law if they contain any element of chance, which they undoubtedly do.

Handicapping contests’ questionable legality in Kentucky is compared to their questionable legality under Florida law. Florida law has a more stringent restriction on gaming than does Kentucky. Consequently, the authors show that handicapping contests could be legal under Florida law if the Florida courts deem the entry fees paid to enter the handicapping contest to be “bona fide entry fees” for a “purse, prize, or premium” rather than a wager. Again the authors illustrate that this exemption requires handicapping contests to be viewed as a game of skill rather than a game of chance by the Florida courts.

Considering these factors, the authors’ suggested legislative and administrative exemptions for handicapping contests seem to be a logical solution to a pressing problem.

Progress in the Prevention of Soring: Increased Regulation of the Tennessee Walking Horse Industry

The following post was written by staff member Ramsey Groves.

This past Wednesday marked the beginning of the 71st annual Tennessee Walking Horse National Celebration. Larry Taft, Tennessee walking horse Abuse triples in 4 months: But scrutiny may help clean up the sport, The Tennessean, http://www.tennessean.com/article/20090823/SPORTS11/908230371/Tennessee+Walking+Horse+abuse+triples+in+4+months (last visited Aug. 31, 2009).The Celebration is a well-known event that receives a great deal of publicity. However, this year the headlines concern a hotly debated issue: increased regulation of soring in the walking horse industry. Id. Soring involves applying chemicals to a horse’s front feet so that the animal will raise its feet higher and faster. See id. This painful procedure results in the horse having the high-stepping gait characteristic of prize-winning walking horses. See id. Although federal laws were enacted nearly 40 years ago to ban soring, this procedure has remained far too common in the industry. A new agency is hoping to bring about much needed change. Id.

The law demands that the walking horse industry have a regulatory agency to insist on compliance. For years, the commission in charge of compliance basically failed to enforce Soring regulations. Id. The commission’s lack of action can no doubt be attributed to the fact that is comprised of owners and trainers who have conflicting interests. In order for their walking horses to be successful, it was in their best interest to overlook practices of soring. This past April, however, “a new federally sanctioned agency, directed by the Tennessee Walking Horse National Celebration, began examining horses at shows.” Id. Veterinarians, as opposed to people with a more personal interest in the walking horse industry, now comprise the regulatory agency. See id. Consequently, soring has been monitored more closely and inspections have resulted in the exposure of instances of this prohibited practice. Since April, “violations of industry and federal regulations on the humane treatment of horses more than tripled compared with the same period in 2008.” Id. This increased regulation shows that the new agency is serious about cleaning up the industry and ensuring the humane treatment of walking horses.

In Kentucky, legislation regulating walking horses was enacted as far back as 1956. K.R.S. § 436.185 stipulates:

“… (2) No walking horse shall be permitted to compete or exhibit in any exhibition or fair either for profit or pleasure, if said horse's front legs or hoofs show evidence of burns, drugs, lacerations, any sharp pointed instrument, or any pain inflicting device.

(3) It shall be the duty of the assigned ringmaster in charge of any such exhibition or competition to properly inspect the front legs and hoofs of each entry in each class or event. Said inspection shall be for the purpose of determining whether there is any evidence of burns, drugs, lacerations, any sharp pointed instrument, or any pain inflicting device appearing on said animal.

(4) If any such evidence appears to the satisfaction of the ringmaster, he shall immediately bar said horse from competition, and notify the sheriff of said county of said violation. The handler of said horse shall be fined not less than ten dollars ($10) nor more than one hundred dollars ($100) or imprisoned for ten (10) days or both. For the second and each subsequent offense he shall be imprisoned for thirty (30) days.

(5) Any ringmaster who fails to perform these duties, and permits the commission of any of the offenses stated in subsection (2), shall be fined not less than ten dollars ($10) nor more than one hundred dollars ($100) for each offense allowed.” Ky. Rev. Stat. Ann. §436.185(West 2009).

The Kentucky penalties seem rather mild in comparison to those imposed by the new regulatory agency. Since the new agency initiated action in April 2008, three individuals “deemed responsible for the care and control” of a horse received lifetime suspensions due to abuse uncovered during inspections. Larry Taft, Tennessee Walking Horse Abuse triples in 4 months: But scrutiny may help clean up the sport, The Tennessean, http://www.tennessean.com/article/20090823/SPORTS11/908230371/Tennessee+Walking+Horse+abuse+triples+in+4+months (last visited Aug. 31, 2009). Additionally, a trainer and two others received one-year suspensions due to various infractions. See id. This new agency seems to be serious about cracking down on owners and trainers. Hopefully, its actions will continue to bring about positive changes in the walking horse industry.