Summary of a Recent
Judicial Development in
Production Contracts

Pork Contractor's Control Over Feedlot
Sufficient to Deny Motion to Dismiss

Harrison M. Pittman
Staff Attorney

In an action brought by three plaintiffs against the owners of a pig feedlot and the contractor that supplied pigs to the feedlot for nuisance, negligence, trespass, and violations of the Minnesota Environmental Rights Act ("MERA"), Minn. Stat. § 116B.01, the United States District Court for the District of Minnesota has denied the contractor's motion to dismiss the plaintiffs' claims for nuisance, negligence, and trespass because the contractor had sufficient control over the feedlot to sustain those claims. Overgaard v. Rock County Board of Commissioners, No. 02-601, 2002 WL 31924522 (D. Minn. Dec. 30, 2002). It granted the contractor's motion to dismiss the plaintiffs' claim that it had violated the MERA because the plaintiffs failed to comply with the necessary procedures for bringing a claim under the MERA. See id. at *4.

Glenn Overgaard, Mabel Overgaard, and Loren Overgaard, plaintiffs, lived in Rock County, Minnesota and owned land adjacent to a pig feedlot operated on land owned by Scott Overgaard and Chad Overgaard, defendants. See id. at *1. Scott and Chad were part owners of the feedlot, known as Overgaard Pork, which was a Minnesota general partnership. See id. Schwartz Farms, Inc. ("Schwartz "), also a defendant, was a Minnesota corporation that owned the pigs grown on the Overgaard Pork feedlot. See id. The plaintiffs' action against the defendants was based on nuisance, trespass, negligence, and violations of the Minnesota Environmental Rights Act ("MERA"), Minn. Stat. § 116B.01. See id.

Schwartz signed an "Independent Contractor Agreement" with Overgaard Pork, Scott and Anita Overgaard, husband and wife, and Chad and Carrie Overgaard, also husband and wife. See id. Under this agreement, Schwartz retained control over various functions of the Overgaard Pork feedlot operation. See id. In particular, Schwartz "retained ownership of the pigs throughout their stay at the Overgaard feedlot, specified the housing construction on the Overgaard Pork feedlot, and directed Overgaard Pork's daily maintenance of the pigs (including the pigs' sorting, feeding, cleaning, and disposal)." Id.

Schwartz also entered into an "Easement/Assignment" with Overgaard Pork, Scott and Anita Overgaard, and Chad and Carrie Overgaard that provided Schwartz ingress and egress rights to the feedlot land. See id. The "Easement/Agreement" also provided that

[G]rowers and Owners [Overgaard Pork, Scott and Anita Overgaard, and Chad and Carrie Overgaard] hereby grants to Schwartz an odor and air quality easement over the Property. For the term of the easement, Grower and Owners waive any claim they may have against Schwartz based on odor from the Facility Site or based on exceedances of state ambient air quality emission standards arising from the operation and use of the Facility Site. This Easement/Agreement remains in effect until July 2006, five years after the agreement was signed.

Id. at *1-2.

The plaintiffs alleged that "[b]ased upon Schwartz Farms' relationship with Scott and Chad Overgaard and Overgaard Pork . . . that Schwartz Farms contributed to the alleged air emissions and water contamination related to [the] [p]laintiffs' assertions of negligence, nuisance, trespass, and MERA violations." Id. at *2. Schwartz Farms filed a motion to dismiss. See id.

With respect to the nuisance and negligence claims, Schwartz argued that the plaintiffs "have not made any factual allegations that tie Schwartz Farms to any wrongful conduct that caused the alleged harm to the [p]laintiffs, because [it] merely owns the pigs on the Overgaard Pork feedlot and has not created a nuisance or acted negligently." Id. Under Minnesota law,

[a]nything which is injurious to health, or indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, is a nuisance. An action may be brought by any person whose property is injuriously affected or whose personal enjoyment is lessened by the nuisance, and by the judgment the nuisance may be enjoined or abated, as well as damages recovered.

Id. at *3 (citing Minn. Stat. § 561.01).

The court noted that Schwartz owned the pigs located at the Overgaard Pork feedlot and that the plaintiffs had alleged "that Schwartz Farms has retained sole control over many of the management and maintenance functions over the pigs at the feedlot." Id. It also noted that the "Independent Contractor Agreement" the parties entered into "fully describes the nature of Schwartz Farms' control, including detailed requirements related to the construction of the building and the maintenance of the pigs." Id. The court stated that the plaintiffs' claims for nuisance and negligence

are founded upon the alleged odor, chemical emissions, and water pollution that [p]laintiffs contend to have occurred as a result of the construction, design, and maintenance of the Overgaard Pork feedlot operations. Plaintiffs have established that Schwartz Farms played a significant role in the construction, design, and ongoing maintenance of the Overgaard Pork feedlot. Based upon Schwartz Farms' control over the Overgaard Pork Feedlot, [p]laintiffs' complaint is sufficient to sustain a cause of action against Schwartz Farms.

Id.

Next, the court considered Schwartz's motion to dismiss with respect to the plaintiffs' claim for trespass. See id. The court explained that "'[t]respass encompasses any unlawful interference with one's person, property, or rights, and requires only two essential elements: a rightful possession in the plaintiff and unlawful entry upon such possession by the defendant.'" Id. (citations omitted). It added that "'[t]respass is not limited to human entry and can include 'throwing or placing an object upon the property of another.''" Id. (citations omitted).

The court noted that the plaintiffs alleged, in part, that odor, chemicals, and water pollution were emitted from the feedlot operations, which resulted in damage to the plaintiffs' property. See id. It added that

[s]uch odor, emissions, and pollution allegedly were caused by the maintenance and operation of the feedlot that Schwartz Farms controlled and designed. While it is not clear to the Court that odor alone could result in a trespass claim, the alleged emissions and pollution could constitute an unlawful entry onto [p]laintiffs' land, thus sustaining an action for trespass under Minnesota law.

Id.

Finally, the court considered Schwartz's argument that because it was a "family farm corporation" it was exempt from being sued under the MERA. See id. at *4. The court rejected this argument, stating that without further discovery it could not conclude that Schwartz was a "family farm corporation" and therefore exempt from actions brought under the MERA. See id. The court ruled, however, that it did not have jurisdiction to decide the MERA claim because the plaintiffs failed to "serve a copy of the Summons and Complaint upon the Minnesota Attorney General within seven days to allow the State of Minnesota an opportunity to intervene," and failed to "publish notice of the action within 21 days as required by the statute." Id. (citations omitted). Therefore, the court granted Schwartz's motion to dismiss the plaintiffs' claim that it had violated the MERA. See id.

The case was decided on December 30, 2002; this summary was posted December 30, 2002