COUNTY FORESTRY ASSOCIATION OFFICERS/DIRECTORS LUNCHEON
October 23, 2003
Silver Star Convention Center
FORESTRY LAW FROM A LANDOWNER’S PERSPECTIVE:
YESTERDAY, TODAY AND TOMORROW
Adams and Reese LLP
I know from personal experience that many of you don’t like lawyers as a group. Many Americans believe that lawyers are like Siegfried and Roy’s Las Vegas tigers – they are inherently dangerous, you can’t train them and they will turn on you. However, most of you make an exception for your lawyer whom you hold in very high regard.
The paradox of generally disliking lawyers while liking your personal lawyer illustrates the changes in the law and the legal system during my father’s lifetime. A few generations ago, most people, if asked to name famous real or literary characters who were lawyers would respond with the names of Thomas Jefferson (proponent of individual rights and human liberty), Clarence Darrow (champion of the working man), and Atticus Finch (champion of the falsely accused). Today, however, we are more likely to name a character in a John Grisham novel or television series who has either taken advantage of the legal system or been abused by it. Where we once saw leadership and public service, many people today see only television’s portrayal of greed, conceit, and selfishness, except, of course, in their own lawyer. It is as if you hire Atticus Finch but others seem to use lawyers straight out of the Grisham’s fictional “firm,” Bendini, Lambert and Locke.
Law is much more than anyone’s view of lawyers. As the Mississippi Forestry Association holds its 66th Annual Meeting and devotes this luncheon to the work of the officers and directors of its county forestry associations, I thought it might be interesting to look at forestry law from a landowner’s perspective. To do this effectively we need to focus on the law as it existed in the past, as we find it today, and as we project its role in the future.
Perhaps the public’s view of the law has changed because of the increased role of the law in our lives. Seventy years ago, most Mississippians would work with a lawyer on rare occasions: buying or selling a home; writing a will; or, probating an estate.
If you owned a farm at the time MFA was founded in 1939 it was probably in your name or the name of you and your spouse. You may have a partnership with another farmer, but if your partnership agreement was written at all it probably would only consist of one or two pages.
If you bought equipment it would usually be for cash or for a few payments made to the local bank or the equipment dealer. The paperwork was non-existent or very simple. You wouldn’t think of involving your lawyer for these types of transactions. You just shook hands and made a deal.
Your farm was probably primarily for agriculture. Neither you nor anyone else had a tree farm. You might have sold some timber, but it was most likely on a handshake with someone who had a portable mill. You just let God plant the trees and you let them grow as best they could.
You kept all your “books” in one journal or ledger. All the math was done by hand.
If you hired a lawyer to work for you in answering a forestry law question, the lawyer might have found the answer to your question in the two-volume Mississippi Code of 1930. He may also have looked in the 189 or so volumes of the Mississippi Reports, the official reporter of cases of the one appellate court in the state.
The statutes he might consult may address what is required in a deed or deed of trust, liability for trespass to timber, and the standard weights and measures for selling timber.
Most of the reported decisions addressing timber concentrated on the obvious issues – that merchantability of timber is based upon what products can be bought and sold at the time, that a sale of land includes the sale of standing timber, and that the owner of trees wrongfully cut by another is entitled to be paid for the value of his trees.
The chances that your lawyer would have to know anything about federal law would be remote. Sure, there had been a United States Department of Agriculture since Abraham Lincoln founded it in 1862, but the USDA principally provided information to farmers.
The labor movement of the 1920’s did not include farming and forestry operations in the beginning. There was a conservation movement of protecting property from erosion but there was no environmental movement as we know it today. It was your land and you could do with it what you wanted. You could draw water from the river without asking permission, you could mix fertilizers and dispose of containers as you thought best and you could kill any snake, turtle or salamander you decided needed killing.
If someone was injured on your property, the church folks in the community may help them with some food or chores. It was unheard of to sue a landowner just because the injured person was hurt on his land. The church members might help them get over their injuries but no one considered it the landowner’s obligation to help take care of the injured person although you would help just the same as the others in the community.
Your father’s lawyer would struggle to answer issues of forestry law today. There have been many changes in the last seventy years. Those changes include changes in agriculture, society and law.
Farming has certainly changed. There is a good chance your farm is titled in the name of a corporation, limited liability company, family limited partnership or other corporate structure. This may be done for a myriad of reasons including limitation of liability, ease of decision making, management of diverse interests, and tax planning. If you still own your property in your individual name, you probably have ample insurance to cover liability risks and are working with your lawyer, accountant and other tax professionals to make informed decisions on a number of issues including taxes.
Your father’s farm of diary cattle or row crops may now be largely or entirely a forest. You may have received government assistance (money) to covert that erodible land to a healthy forest. You may be a tree farmer owning a certified tree farm. The term "tree farming," first used in the 1940's to introduce the public to sustainable forestry terminology, is well known now in Mississippi. The public can understand farming concepts of continual stewardship and production of goods. Today’s concepts of sustainable forestry are a logical progression of the conservation movement of the early 1900’s.
You couldn’t operate without a computer. You have to run many decisions by your accountant or lawyer. Every deal is written and it too long.
In the last seventy years, Congress and state legislatures have rapidly expanded statutory law. The Mississippi Code today is no longer two volumes, it is 30 volumes. There are two appeals courts in Mississippi not one. In addition to the 254 volumes of the Mississippi Reports, their decisions and those of neighboring states are recorded in 200 volumes of the Southern Reporter and 900 volumes of the Second Edition of the Southern Reporter.
This state law expansion pales in comparison to the growth of federal law. The United States Code consists of approximately 275 volumes today. The Code of Federal Regulations that houses the federal regulations published in a single year contains almost 100 volumes. To look up “federal” cases today, a lawyer may find a relevant decision in the 999 volumes of the Federal Supplement, the 275 volumes of the Second Edition of the Federal Supplement, the 999 volumes of the Federal Reporter, the 999 volumes of the Second Edition of the Federal Reporter and the 350 volumes of the Third Edition of the Federal Reporter.
The law has changed in many ways that are more significant than the sheer number of books on a shelf. Suing hardworking people and businesses has become a pastime in this state. Tort reform is a hot campaign topic. Certain counties in Mississippi are known nationally for their jackpot justice.
There is more litigation today than our parents could have dreamed and it involves issues unimaginable to preceding generations. Although there is a divergence of opinion in the current debate over religion and the first amendment, we would probably all agree that our parents or grandparents would be surprised by the argument that the United States Constitution doesn’t allow children to pray publicly in school or allow our neighboring State of Alabama to place a copy of the Ten Commandments in its Supreme Court building. Fifty years ago who would have sued their neighbor if they stepped in a hole and broke their leg while walking across their neighbor’s pasture?
Our farms have changed but our society has changed more. As society changes, our laws change. The law changes as courts revise their interpretation of our Constitution or existing statutes. The law changes as Congress and state legislatures pass new statutes and as our courts create new or revise existing common law.
Don’t misunderstand my message. I am not saying all changes have been bad and that I long for a return to the good old days. Many of the changes have been needed. For example, our country and state excluded racial and ethnic minorities far too long, and for no legitimate reason. We did not offer full opportunities to women. We did not even equip our public buildings for access for the physically challenged in our communities. It took a national movement to bring about civil rights and a river catching on fire for Congress to understand the seriousness of pollution.
The point is simply that we live today. Yesterday is gone. Our society has changed to the point that operating a tree farm or forestry business requires the owner to have a working knowledge in property, labor, employment, tax, environmental and other laws. You have gained this knowledge over time and are still learning today. If approached by a new timberland owner who wanted to purchase and operate a forest or forest business, what would you tell him about forestry that didn’t involve forestry law?
1. Organization of Entity
a. Consideration of tax advantages
b. Consideration of management
c. Consideration of liability
2. Acquisition/Verification of Land/Title
a. Deeds, Title Opinions, Title Insurance
b. Maps (timber type, age, land use)
c. Cruise information
d. Tax Receipts
f. Environmental/Endangered Species concerns
g. Restrictions (Flood Plain, Coastal Zones, protected areas, etc.)
h. Riparian Rights
3. Financial Analysis (In Connection with their Financial Advisors)
a. Portfolio Diversification
b. Debt service/Cash Flow Needs
c. Rate of Return (short and long term)
4. Agreement with Consulting Forester and Degree of Landowner Hands on Management
5. Financial Record Keeping System (In connection with their accountant and Tax Consultants)
b. Income/Capital Gain
d. Estate Planning
e. Conservation Easements
iii. Government Programs (federal and state)
iii. Silvicultural Expenses
8. Desired Uses, and Projected Prescriptions (and silvicultural basis for the prescriptions)
a. Initial prescription with periodic review
b. Updating of cruise information (periodic schedule)
9. Keeping What is Yours (Boundary Line Maintenance)
a. Schedule for maintenance
b. Method of maintaining
c. Relationship with neighbors
10. Managing What is Yours (Use of Contractors)
a. Independent contractor status, selection and employment
b. Written agreements (approved by counsel)
11. Moving What You Sell (Road Weights and Harvest Permits)
a. Identification of road and bridge issues
b. Understanding of positions of local government officials
12. Lobbying or Governmental Relations
a. Identification of all local government officials and legislators
b. Support for local government officials and legislators
13. Insurance (In connection with their insurance agent)
14. Knowing What to Do (Education)
a. Landowner Courses (MSU, Extension, other)
b. Organizations (MFA, Local county forestry associations, Forest Landowners,
Wildlife groups, Environmental groups, other)
15. Conveyances of Interest in Property
a. Hunting licenses (form approved by counsel)
b. Easements (form approved by counsel)
16. Dealing with Threats of Litigation
a. Consult your lawyer
i. Understand work product privilege
ii. Understand attorney client privilege
b. Tell your insurance company
c. Follow the advice of professionals
17. Running the Business
a. Understanding labor and employment laws
b. Understanding tax laws
c. Understanding environmental and preservation laws
d. Understanding forestry laws
e. Understanding markets (local, domestic and international)
You also have to remind a new timberland owner that this is just general information for today. There will be more information to master tomorrow.
Although there is no way to predict what the future will bring, we know it will at least bring continued change. We will experience a rapidly accelerating change in agriculture, forestry, technology, society and our laws.
I’ll let you speculate on the changes in agriculture, forestry, technology and society. I will venture an opinion or the future of some forestry laws and forest policy issues.
Our statutory law will continue to grow at an increasing pace and continue to affect your forest land. Government is needed but it is a little like Kudzu. It is hard to beat back once you let it get a foothold on your property.
Environmental laws will continue their current focus on non-point source pollution. It will be difficult to keep best management practices as voluntary. There will be more restrictions on forestry activities that could have any impact on water quality. Fertilizers and other chemical applications will be hit hard as streams undergo heightened water quality assessments of their total maximum daily loads.
More flexibility will be granted under the Endangered Species Act. Some will be regulatory by way of increased Habitat Conservation Plans and Safe Harbor and Candidate Conservation Agreements. Most forest landowners will still desire some changes in the ESA to be made by Congress to make it more forestry and landowner friendly.
Certification and “green practices” will be a hot issue, particularly in the South. As Home Depot and Lowe’s endorse “environmentally friendly” wood acquisitions, mills will be forced to consider how to implement a process to certify that the products they manufacture were produced in compliance with environmental laws and “approved practices.” There is a cost to certification that many consumers today will not choose to pay. When the day comes in the future that consumers are willing to spend more or the process is mandated by the government or mills, a new layer of regulations and compliance will be imposed on tree farmers.
Conservation easements will be more prevalent. Foresters have always supported conservation of resources. Landowners will find opportunities to continue this practice and receive tax benefits at the same time.
We will all pay more attention to local, national and international wood markets and demands. Forestry operates in a global economy just as agriculture does in today’s world. There will still be local and national pressures and impacts on supply and demand but international markets and demands will become increasingly important to forest landowners.
Products will change. There will continue to be more and better products made from laminated and engineered wood. Many products will continue to add glues, plastics and other materials to add strength, durability and a longer useful life. Increased research and development will be a key to developing new products and adapting our forests to meet production demands.
Small tree farmers will have to operate smarter. Everyone is going to have to think like the small town hardware store owner after Wal-Mart came to town. I don’t know what will be your Wal-Mart. It may be Canadian wood, new industrial standards or other changes we could not even imagine today. You will each have to increase productivity, trim expenses, and look for opportunities to save money or make more money through cooperative or other ventures.
Teach children that trees are a renewable resource and that when you harvest your land you aren’t cutting the rain forest. Tomorrow’s children will grow up on concrete. Their grandparents will probably live in a city and not on a farm. We have a lot of educating to do to avoid legislation that attempts to cure a perceived forestry ill that doesn’t exist.
Encourage other tree farmers and those in forestry. What advice do you give them? I like the “Advice from a Tree” that I first saw on a T-shirt I bought in Asheville, North Carolina. It is from “Your True Nature” and reads:
Stand tall and proud
Sink your roots into the earth
Be content with your natural beauty
Go out on a limb
Drink plenty of water
Enjoy the view
Thank you for allowing me to speak with you today. I hope you will recognize that lawyers have a role in assisting you in today’s and tomorrow’s society and I wish you luck with your future experiences with forestry law.
Adams and Reese LLP
P. O. Box 24297
Jackson, MS 39225-4297
(601) 292-0740 (phone)
(601) 355-9708 (fax)
1 Gee Ogletree is a partner in the firm of Adams and Reese LLP where he serves as the Transactional and Corporate Advisory Services Practice Group Leader and as Team Leader for the firm’s Forestry Team. Gee has over twenty years of experience in the practice of law, is licensed in Mississippi and Alabama, and works out of the firm’s Jackson, Mississippi office where his practice includes a wide variety of issues pertaining to forestry, real estate and business.
2 Adams and Reese LLP is a regional law firm with approximately 280 lawyers with offices in Baton Rouge, Birmingham, Houston, Jackson, New Orleans, Mobile and Washington, D.C. The firm’s attorneys practice in a number of areas of law with the broad practice groups of Litigation, Transactions and Corporate Advisory Services and Special Business Services.
3 For further information, check out the following website http://www.YourTrueNature.com
Adams and Reese LLP
Forestry Law From a Landowner’s Perspective