After several repeated attempts to reopen its dairy in northern Oregon, Easterday Dairy LLC is suing the former owners for breach of contract. The dairy is asking for millions in damages and to either have the easement agreement reinstated or to be released from the purchase agreement.
Easterday Dairy bought the facility in Boardman in Morrow County several years ago and has been repeatedly cited for failing to bring nitrate levels in the water under control, even without cattle, the Tri-City Herald reported.
In 2019, Greg te Velde failed to comply with the terms of the existing confined animal feeding operation (CAFO) permit on a parcel known as Lost Valley Farm and declared bankruptcy. The parcel was then sold to Fall Line Capital LLC and split into two sections, a farm and dairy parcel. Easterday Dairy purchased the dairy parcel from Fall Line Capital for $16 million.
According to court documents, the terms of the bankruptcy agreement were for te Velde to remove all animals and complete remediation efforts to the satisfaction of the Oregon Department of Agriculture (ODA), totaling approximately $5 million.
Easterday purchased the dairy, intending to secure a CAFO permit for 28,300 head from the state of Oregon. The ODA refused to issue a new CAFO permit until the nitrate levels in the groundwater were brought back into compliance and a plan for maintaining safe levels was approved.
A coalition of environmental groups led by Stand Up to Factory Farms filed a petition with Gov. Kate Brown (D) in August 2021, demanding her to direct state agencies to deny the CAFO permit. The environmental groups claimed the dairy would use up already scarce groundwater; threaten the region’s air, water and wildlife; and worsen the effects of climate change.
“These problems are likely to worsen if the state issues a permit for this mega-dairy,” said Mackenzie Aime, the Oregon organizer with Food and Water Watch. “All mega-dairies pose a threat to Oregon’s public health and environment.”
According to the Tri-City Herald, ODA documents showed the state repeatedly inspected the site and recommended courses of action to rectify nitrate levels, which Easterday Dairy failed to implement quickly enough. That led to inspections showing they violated nitrate levels monthly from November 2020 through November 2021. The nitrate levels were brought into compliance in December 2021, and ODA required Easterday Dairy to continue submitting samples to show the nitrate levels were within an acceptable range for nine consecutive months.
On March 1, 2022, Fall Line Capital filed suit against Easterday Dairy, seeking a judgment rescinding the amended and restated easement. The easement terms called for Easterday to obtain a CAFO permit on or before Dec. 31, 2022, allowing Easterday to operate the dairy facilities.
According to court documents, Easterday believed Fall Line filed the lawsuit with the intent to delay Easterday’s ability to obtain a CAFO permit. The state of Oregon stated it would not issue a permit while an open case remained. Easterday filed a motion to dismiss the case.
Lawyers for Easterday Dairy contend the company would not have purchased the dairy, nor applied for the CAFO permit, if the adjoining farm parcel could not be used to spread manure from the dairy operation. The adjacent farm parcel lease was terminated in March 2021, and Fall Line signed a new lease with Walther Farms LLC, a Michigan company. Easterday’s lawyers further assert Walther Farms and Fall Line refused to provide nutrient and irrigation information as required by the amended easement or to allow Easterday on the premises for soil testing. The lawyers also said Walther Farms trespassed on the dairy property.
Easterday lawyers are asking to reinstate the easement and access requirements that guarantee Easterday Dairy will have authority over any irrigation or nutrients used at the farm. They are also asking for the judge to declare that the easement termination was made in bad faith and request damage payments for slander and the delays caused.
If the judge does not agree to the terms, lawyers for Easterday Dairy are asking to rescind the dairy parcel purchase and for the $10.5 million paid on the note thus far, plus the money paid for capital improvements, maintenance and remediation costs.
Easterday Dairy was not affected by the bankruptcies of Easterday Farms and Easterday Ranches Inc. Since the bankruptcy filing, the dairy portion of Easterday family businesses has been headed by Cole Easterday, Cody Easterday’s son. Easterday Dairy did owe Easterday Farms $2.1 million. To satisfy bankruptcy proceedings, the loan to Easterday Farms will be guaranteed by Karen Easterday—Cole Easterday’s grandmother, entity BC 140 LLC. — Charles Wallace, WLJ editor
