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AP file – Easterday Dairy has worked to reopen a Boardman, Oregon dairy but may now try to get out of the deal.

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Easterday Farms and Ranch legal issues

The Easterday family businesses have been embroiled in bankruptcy with debtors trying to recover more than $250 million after Cody Easterday was charged with wire fraud in a ‘ghost cattle’ scheme.

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Easterday Dairy has been trying to reopen a Boardman dairy plant for several years, but new documents show that after repeated setbacks and water quality violations, the company may be ready to throw in the towel.

In February, the company was cited for failing to get nitrate levels in the water under control, even though livestock had long since left the property.

The site is the former home of the Lost Valley Farms dairy. Today Easterday is suing the former owners for breach of contract, claiming it was their fault they were unable to clean up the site.

Easterday Dairy is seeking millions of dollars in damages or to be released from the purchase agreement.

Since his father’s arrest, the dairy portion of the Easterday family businesses has been run by Cole Easterday.

Their other businesses Easterday Farms and Easterday Ranches, based in the Tri-Cities area, are in the midst of a massive bankruptcy lawsuit after Cody Easterday was sued for federal wire fraud in a ‘ghost cattle’ scheme that defrauded Tyson Foods and other companies out of hundreds of millions of dollars.

Cody Easterday’s sentencing has been delayed while he helps handle the bankruptcy settlement. His next court appearance is scheduled for September.

Cody Easterday is the son of longtime Easterday chef Gale Easter, who died in a wrong-way traffic accident in Pasco after leaving his job in December 2020.

Cody Easter Cattle
Cody Easterday of Easterday Ranch and Farms, is shown in this file photo at the Easterday Dairy outside of Boardman, Oregon. He faces federal prison time for wire fraud in a ghost cattle scam involving Tyson Foods. His 24-year-old son applied to run the Oregon dairy. George Plaven capital press

Water quality issues

At the heart of the dispute over the dairy plant is a permit that would allow Cole Easterday to reopen the dairy plant.

This license was suspended when Lost Valley went bankrupt.

The Oregon Department of Agriculture has so far refused to issue an Easter Day permit for confined animal feeding operations until groundwater nitrate levels are brought back into compliance. and that a plan to maintain safe levels be approved. This means the company cannot resume dairy operations by then.

According to National Institute of HealthNitrate contamination of groundwater has been linked to an increased risk of cancer, thyroid disease, and birth defects.

Boiling water does not make nitrate-contaminated water safer to drink, in fact it does the opposite by increasing the concentrations of nitrates in the water.

Over the past two years, documents show the state has repeatedly inspected the site and recommended action, which Easterday Dairy has not implemented quickly enough.

This led to inspections showing they were in breach of nitrate levels every month from November 2020 to November 2021.

Department of Agriculture documents show they were finally able to bring nitrate levels back to an acceptable range by December 2021.

In the February 2022 letter, the department ordered Easterday to continue submitting water samples until they can show nitrate levels are within an acceptable range for nine consecutive months.

In a lawsuit filed this month, Easterday appears to blame the poor water quality on the former owners and on a farm that currently rents the neighboring property.

Attorneys for Easterday say the continued and deliberate action by the two groups has kept them from meeting state standards.

Tarah Heinzen, legal director of Food and Water Watch, said she hopes the state will continue to hold Easterday accountable because the dairy’s water source is an aquifer that poses a particularly high risk of contamination. According to a 2018 Statesman Newspaper Articlethe aquifer was classified as protected in 1976 due to falling water levels.

Watch out for food and water is a non-profit organization that focuses on corporate and government responsibility for food and water.

Heinzen said mega-dairies were a huge contributor to nitrate contamination, noting that even without a single animal on site in recent years Easterday had struggled to reach acceptable ranges.

She said the new lawsuit could provide Easterday with an exit from the dairy, but the risk of water contamination remains high and the state will need to continue to pressure Easterday or any future owners to protect the source of water. water.

“It seems to me that if Easter can’t have the dairy he wants, he doesn’t want the dairy parcel (at all),” Heinzen said.

land use

Easterday is suing Fall Line Capital and Canyon Farm, which bought the property after Lost Valley went bankrupt.

The nearly 7,300 acre site was divided into two parcels – 736 acres for the dairy and the remaining 6,542 for farmland.

In January 2019, Easterday Dairy entered into a self-funded $16 million deal to purchase the portion of the dairy facility. Later that year, they signed a commercial lease for the agricultural portion, but did not purchase it.

Easterday was to pay $2.67 million annually plus interest for the purchase of the dairy. To date, they have paid $10.5 million, leaving an outstanding balance of $8 million, including interest.

Easterday intended to obtain a new contained animal feed operations permit and resume dairy operations.

Easterday’s attorneys said in the lawsuit that the purchase agreement included clauses that would render the purchase ineffective in several cases if Easterday was unable to obtain a new permit. At the time, they moved forward with the impression that Easter Day could get it no later than December 31, 2022.

In March 2021, Easterday ended the commercial lease on the agricultural portion and Michigan-based Walther Farms took over the land.

At this time, Easterday signed an amended easement guaranteeing access to comply with Department of Agriculture requirements.

easter continues

Easterday’s attorneys say that at this point, Walther Farms refused to provide Easterday with the necessary reports under state orders, and then denied Easterday access to the farm parcel in order to perform tests.

Separate bankruptcy filings in the Easterday Farms and Ranches cases show Canyon Farms paid Easterday $2 million to terminate the farm parcel lease.

This agreement included language ensuring that Easter Day had access to certain areas, such as a storage complex and an animal feed storage area.

Canyon Farms and Walther then sued Easterday in March 2022 to have the easement dismissed, according to filings.

Lawyers for Easterday say it was a bad faith attempt to prevent or prevent the company from obtaining a new feed operations license, under the direction of the parent company of Canyon Farm, Fall Line.

With that trial open, the department put the permit application on hold. Easterday claims an attorney named Jonathan Septor then filed an unauthorized “Notice and Termination of Amended and Restated Easement” with Morrow County Property Records on behalf of Fall Line. They then filed a notice of dismissal as part of the easement proceedings.

Easterday claims that together these actions amount to Fall Line preventing them from obtaining a new feed operations permit by denying them access to the farm plot.

They ask the judge to:

  • Reinstate easement and access requirements that ensure Easterday will have access and authority over any irrigation or nutrients used on the farm.
  • Declare that the termination of the easement was made in bad faith and pay damages for both slander and delay.

In the event that the court does not accept these conditions, Easterday asks to be paid on the purchase contract.

They want to be paid for the money paid for the purchase so far, as well as for the improvements and work done on the land.

Easterday is seeking reimbursement of the $10.5 million paid and up to $4 million more to offset their investment. This path would ultimately result in Easterday abandoning plans to bring the dairy back online.

Fall Line has yet to file a response.

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Cory is an award-winning investigative journalist. He joined the Tri-City Herald in December 2021 as an editor/reporter covering housing and development. His previous work can be found in the Tyler Morning Telegraph and other Texas newspapers. He was a member of the Education Writers Association 2019-2020 and has been featured on The Murder Tapes, Grave Mysteries and Crime Watch Daily with Chris Hansen.