In a case that may someday serve as a legal landmark, the anti-industry activist group Waterkeeper Alliance lost and lost big-time in a federal lawsuit they hoped would bring the poultry industry to its knees.

Judge William M. Nickerson of the U.S. District Court for Maryland produced a 50-page opinion this week stating that the group “had failed to meet its burden” of establishing that waste from poultry growout operation owned by Berlin, Md., farmers Alan and Kristin Hudson contaminated a drainage ditch that ultimately flows into the Pocomoke River, which empties into Chesapeake Bay. Nickerson also rejected the argument that Salisbury, Md.-based Perdue Farms, for whom the Hudsons are contract growers, should assume liability for any pollution.

The plaintiffs in the case included the Assateague Coastal Trust, an environmental group working to preserve open space and maintain water quality in the Chesapeake Bay area, and the University of Maryland Environmental Law Clinic. A spokesperson for the law clinic suggested that the plaintiffs would likely appeal Thursday’s ruling.

A proxy fight

This is a battle that has gone on for almost three years, and what started out as an action against an (alleged) violator of the Clean Water Act became a proxy fight for the forces opposed to livestock production in what’s known as the Eastern Shore, the lands east of Chesapeake Bay in Maryland and Delaware. Perhaps of greater significance was the implied legal challenge to the contract status of virtually all poultry producers, a model that has been in place now for decades.

Industry defends that structure because it streamlines production and allows farmers entry to the business without raising large amounts of capital. Critics decry the system because they contend that the major poultry processors—Perdue, Tyson Sanderson, et al—are merely shielding themselves from liability by claiming that none of their growers are corporate employees.

Both arguments have some merit, as did both sides in this court battle.

Don’t get me wrong: Had the court’s decision gone the other way, this would have been a major setback for hundreds of farmers and growers across Maryland, Virginia and Delaware.

For one, it would have dealt a severe blow—maybe not a knockout punch—but certainly done damage to the fortunes of the family-owned growout operations across the Delmarva region. If there is one single factor responsible for the disappearance of hundreds of small, locally based packing plants across the United States during the 1980s and 1990s, it was the threat of what the liability a lawsuit over a food-safety incident would do to those small businesses.

Likewise, if liability were attached to Perdue, or any other poultry processor, for regulatory violations, the corporations would quickly shift that burden to growers like the Hudsons, all but assuring that many would choose to exit the business.

However, celebratory speeches ought to be kept on hold for now.

“We are thrilled with [the] ruling,” Julie DeYoung, Perdue’s spokesperson, said in a statement. “We are also pleased that the judge upheld existing law that safeguards the contractor relationship and confirms the independence of thousands of family farms who choose to raise poultry and livestock.”

All true, but also not relevant to the deeper issues involved in this case.

Yes, the origins of the Waterkeeper lawsuit were suspect. Allegedly, officials with the Assateague Coastal Trust flew over the Eastern Shore in 2009 looking for a farm that might be in violation of federal Clean Water Act regulations. According to court testimony, they spotted what appeared to be a manure pile, from which runoff was draining into a nearby ditch on the Hudsons’ farm.

According to a report in the Baltimore Sun newspaper, the material was later confirmed by the Maryland Department of the Environment to be treated sewage sludge being used on the farm as fertilizer. Nevertheless, Waterkeeper went ahead with its suit, citing high levels of bacteria in the ditch.

That shouldn’t surprise anyone. That’s what environmental groups do: They file suit, seeking judicial rulings to enforce—or expand—federal regulatory interpretations as they apply to surface waters, air quality and land use. Groups such as the Waterkeeper Alliance don’t bother lobbying for legislative change. That takes too long and the resulting legislation ultimately gets too watered down.

Despite prevailing in court, here’s why industry groups shouldn’t start planning any victory laps.

For one, the ruling rested on a technicality. Judge Nickerson wrote that the bacteria fouling the surface drainage on the Hudson farm came from a herd of dairy cows that was allowed to roam around and deposit manure alongside the ditch. Technically, that wasn’t illegal when the suit was filed, although newer state regulations now require that farm animals be kept away from creeks and drainage areas.

Second, contract case law is solid enough that a lawsuit such as the one in this case isn’t going to challenge the mountain of legal precedence. Perdue, or any other corporate meat or poultry processor, would prevail in a similar suit challenging the status of the contractor business model.

Btu that doesn’t mean that the growout system doesn’t potentially shield big corporations from liability that results when the very systems they impose result in food-safety, environmental or public health problems.

You can find dozens upon dozens of cases across the United States where cities and states have been left holding the bag for massive clean-up costs when a pulp mill or refinery or smelting operation or any of a dozen other commercial businesses that operated prior to the establishment of our current environmental standards left town, went bankrupt or got themselves sold to some conglomerate that shuts down operations and weaseled out of paying for the subsequent environmental mitigation.

Often, clean-up costs for just a single plant can end up with municipalities and states on the hook for hundreds of millions of taxpayer dollars.

Right now, Chesapeake Bay is in the midst of a highly publicized clean-up, with EPA, state governments and numerous regional agencies and NGOs joining forces to rescue what had been a very ecologically sick body of water. Yes, point-source discharge from industrial operations upstream was a contributor, but the industrial corridor between New Jersey and eastern Pennsylvania actually drains into the Delaware River, which doesn’t empty into Chesapeake. Much of the pollution that nearly wrecked the Bay, in fact, did come from farm and residential runoff.

The bottom line is that this week’s ruling is a victory for animal agriculture, but it ought to be tempered by the realization that it was political and judicial pressure from environmental groups a generation ago that was largely responsible for the production practices companies like Perdue now boast about.

This particular lawsuit should never have been filed, but winning in court doesn’t mean the industry’s work on the ecological front is done.

The opinions expressed in this commentary are solely those of Dan Murphy, a veteran food-industry journalist and commentator.