A judge I very much respect once told me that a successful mediation is one in which the dispute gets settled and while no one leaves happy, everyone can look themselves in the mirror the next morning and be glad that the dispute is over. He makes a good point. In litigation, two problematic things happen: (1) when the dust settles at the end of a trial or hearing, there is a clear winner and a clear loser; and (2) the people invested in the fight don’t get to decide who wins and who loses.
Mediation provides another path. The warring parties can craft compromises that provide some gains and some losses for both sides, and, more importantly, the people involved in the dispute are the ones who craft the terms under which the issue will be resolved. When it comes to disputes under the National Organic Program (“NOP”), mediation and settlement agreements can play a crucial role in resolving conflicting positions.
As discussed in our prior posts on the procedural and substantive aspects of NOP appeals (available here and here), the USDA organic regulations set the parameters for the appeal process. These regulations require that accredited certifying agencies (“ACA’s”) must provide operators an opportunity to request mediation within 30 days of an operator’s receipt of an adverse action. 7 C.F.R. § 205.663. The goal of mediation is to reach a settlement agreement that will either (1) bring the operator into compliance with the USDA’s organic regulations; or (2) facilitate the operator’s exit from organic production.
So, how does mediation work under the NOP? Certified organic operations, certifiers, applicants for organic certification or accreditation, uncertified operations, and suspended operations or certifiers that have been denied reinstatement may appeal an “adverse action” by an ACA “in writing.” An “adverse action” includes any proposed suspension, revocation, notice of noncompliance, denial of certification, accreditation, cease and desist notice and denial of reinstatement. If the ACA rejects the mediation offer, it must also do so in writing and notify the operation of its right to appeal that determination. 7 C.F.R. § 205.663. If mediation is accepted by the ACA, the mediation shall be conducted by a qualified mediator mutually agreed upon by the parties to the mediation. Mediation can be as simple as offering a settlement agreement to the operator. The operator may accept or reject the settlement agreement, propose a counteroffer, or request a more formal mediation process.
The terms of any agreement must be mutually agreed upon, comply with the USDA organic regulations and include a timeframe by which any corrective actions will be completed. The Secretary may review any mediated agreement for conformity to the NOP and may reject any agreement or provision not in conformance with the Act or the regulations.
One of the biggest advantages to operators of entering into a mediation agreement is that any subsequent breach of the mediation agreement generally requires the ACA to reissue a proposed adverse action. In a sense, this gives the operator a second bite of the apple. If the operator fails to meet the terms of the settlement agreement, the ACA may not issue a final adverse action as a result of the breach. Instead, a new adverse action must be issued which starts the process rolling again.
Settlement agreements have become an increasingly more utilized tool to resolving NOP appeals. The top priority of the USDA is ensuring organic integrity, and settlement agreements provide an opportunity to allow operators to come into compliance with NOP regulations while reaching a hopefully peaceful resolution of disputes between ACA’s and operators.