Stephen D. Basford is a former pork producer who lives near Grand Ridge, Fl. Basford, who operated under the name of Basford Farms, had a 350-sow, fully integrated hog farm, complete with his own boar stud and feed mill, which produced approximately 6,500 market hogs each year. Basford Farms shut down its pork production business in 2003, during a seven year “grace period” prior to a law going into effect that made the use of gestation crates unlawful. The Basford Farms crates were sold to – and are now in use by – a farm in Georgia approximately 50 miles away.
Basford Farms brought an inverse condemnation action against the State of Florida to recover lost value of its facilities. Basford Farms claimed that the barns could not be cost effectively converted to pen gestation or be used for any purpose other than “high volume” pork production, and that the State of Florida should reimburse him for rendering his facilities unusable without gestation crates. In July 2013, the Florida First District Court of Appeals affirmed a trial court’s award of damages to Basford Farms in the amount of $505,000.
This unique case has caught the attention of many in the pork industry and the Florida Supreme Court, which is considering whether to hear an appeal on the matter. This article briefly reviews the Florida law that led to this case; the claim of inverse condemnation brought by Basford Farms; and whether or not the Basford Farms result can be applied to laws in other states, or if it will prevent new legislation surrounding the use of gestation crates.
The “Pregnant Pig” Amendment
In 2002, the State of Florida adopted the “pregnant pig” amendment to the state’s constitution. A handful of other states, such as Michigan, Colorado and Arizona have similar laws. The Florida law was recommended by the Human Society of the United States and took effect in 2008. This statute makes it unlawful for "any person to confine a pig during pregnancy in an enclosure, or to tether a pig during pregnancy, on a farm in such a way that she is prevented from turning around freely."
Inverse Condemnation and Regulatory Takings
Basford Farms prevailed at the trial and appellate court level, obtaining an award of more than $500,000 under the theory of inverse condemnation. Inverse condemnation is strongly analogous to eminent domain, which is the right to take private property for public use upon paying the owner due compensation. Inverse condemnation differs from eminent domain in that the landowner, rather than the government body with condemnation power, institutes the action. Thus inverse condemnation is simply a device to force a government body to exercise its power of condemnation, even if it has no desire to do so. Upon the exercise of its power of condemnation, the governmental body must compensate the land owner for the value of property that has been “taken” by that exercise of power.
Inverse condemnation is often referred to a as a “regulatory taking.” A regulatory taking occurs when a government body prevents a landowner from making a particular use of the property that otherwise would be permissible, or when the purpose of governmental regulation and its economic effect on the property owner render the regulation substantially equivalent to an eminent domain proceeding and, therefore, require the government to pay compensation to the property owner.
Can the Basford Case be used in other States with Similar Legislation?
Basford Farms was required to show that there was a “substantial deprivation of economic use or reasonable investment-back expectations” in order to prevail. This requires a “fact intensive inquiry of impact of the regulation on the economic viability of the landowner’s property by analyzing permissible uses before and after enactment of the regulation.”
This essentially means in order to recover, Basford Farms was required to show that his barns could not be used for any purpose other than raising pigs in crates and that the other improvements, such as the feed mill, had no other practical purpose or use.
At trial, Basford Farms was the benefactor of two essential events that allowed for a winning verdict. First, the State of Florida offered no evidence to refute Basford Farm’s testimony that there were no alternative uses of the facilities and improvements. The State of Florida failed at the trial court level, and on appeal, to argue that the improvements had any other purpose or that Basford Farms could have converted to pen-raising facilities. In addition, the trial court determined the other improvements, such as the feed mill and wells, were “fully integrated” with the gestation crates and therefore were of no use after the “pregnant pig amendment” went into effect.
The Basford Farms case is a good starting point for bringing a claim that gestation-stall legislation constitutes a regulatory taking, in which the governing body must compensate the producer. It is reasonable that the required outlay of converting from gestation stalls to pen gestation would be recoverable under the inverse condemnation theory. Laws such as Florida’s “pregnant pig” amendment do seem to render gestation crates of little or no value once the law takes effect.
The Basford Farms case is unique in not only the facts of the case, but also in the manner in which the case was presented at trial. Future developments in Florida and other states will be the ultimate determining factor as to whether inverse condemnation will provide relief to those producers forced to stop utilizing gestation crates. However, it is unlikely that inverse condemnation will prevent future legislation.
Editor’s Note: Scott Halbur is a member of the firm's product liability and environmental practice that defends, resolves, prevents and manages issues and litigation. He grew up on Halbur Farms near Carroll, Iowa and leverages a strong agriculture background.