145 F.3d 90 (2nd Cir. 1998), 97-6221, Bastek v. Federal Crop Ins. Corp.

Docket NºDocket No. 97-6221.
Citation145 F.3d 90
Party NameJames BASTEK, Russell Kowal, Christopher Pawelski, and Michael Pillmeier, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. FEDERAL CROP INSURANCE CORPORATION and Dan Glickman, solely in his capacity as Secretary of Agriculture, Defendants-Appellees.
Case DateMay 22, 1998
CourtUnited States Courts of Appeals, United States Court of Appeals (2nd Circuit)

Page 90

145 F.3d 90 (2nd Cir. 1998)

James BASTEK, Russell Kowal, Christopher Pawelski, and

Michael Pillmeier, on behalf of themselves and all

others similarly situated, Plaintiffs-Appellants,

v.

FEDERAL CROP INSURANCE CORPORATION and Dan Glickman, solely

in his capacity as Secretary of Agriculture,

Defendants-Appellees.

Docket No. 97-6221.

United States Court of Appeals, Second Circuit

May 22, 1998

Argued Jan. 29, 1998.

Page 91

Martin R. Gold, Gold, Farrell & Marks, New York City (Robert P. Mulvey, Debra A. Mayer, of counsel), for Plaintiffs-Appellants.

Irene Chang, Assistant United States Attorney, Southern District of New York (Mary Jo White, United States Attorney, Gideon A. Schor, Assistant United States Attorney, Southern District of New York, of counsel), for Defendants-Appellees.

Before: CALABRESI, CABRANES and HEANEY, [*] Circuit Judges.

JOSE A. CABRANES, Circuit Judge:

Plaintiffs James Bastek, Russell Kowal, Christopher Pawelski, and Michael Pillmeier appeal an order of the United States District Court for the Southern District of New York (Barrington D. Parker, Jr., Judge ), dismissing their complaint for failure to exhaust administrative appeals pursuant to 7 U.S.C. § 6912(e). Plaintiffs, who are onion farmers, sought a declaratory judgment that the manner in which defendant Federal Crop Insurance Corporation ("FCIC") calculated indemnities due to plaintiffs as a result of the 1996 growing season failed to comply with the Federal Crop Insurance Act, 7 U.S.C. §§ 1501 et seq. ("FCIA"). They assert that, notwithstanding the exhaustion requirement prescribed by the statute, the district court should have employed exceptions articulated by the courts in so-called common law (or "judicial") exhaustion cases to excuse plaintiffs from the statutory requirement.

Page 92

Defendants FCIC and Dan Glickman, the Secretary of Agriculture, argue that such exceptions are not applicable in the face of an explicit statutory mandate of exhaustion. We affirm the district court's dismissal of plaintiffs' complaint.

I.

Plaintiffs are onion farmers in Orange County, New York. Defendant FCIC is an agency of the United States Department of Agriculture, created to effect the purposes of the FCIA. See id. § 1503. Both the FCIC and Secretary Glickman are authorized to issue regulations implementing the FCIA, as amended by the Federal Crop Insurance Reform Act of 1994, Pub.L. No. 103-354, § 101(a), 108 Stat. 3179 (1994). See id. § 1506(p) (1994).

The FCIC offers various kinds of insurance coverage, and so-called catastrophic risk insurance provides the "minimum level of coverage." 7 C.F.R. § 400.651. Under the FCIA, catastrophic risk insurance covers a "50 percent loss in yield ... indemnified at 60 percent of the expected market price, or a comparable coverage (as determined by the [FCIC] )." 7 U.S.C. § 1508(b)(2)(A) (emphasis added).

Plaintiffs Bastek, Kowal, and Pawelski purchased catastrophic risk insurance directly from the FCIC, and plaintiff Pillmeier obtained the same coverage from an FCIC-approved private insurance provider. 1 The 1996 growing season witnessed a catastrophe of the type contemplated by the insurance policies: a cold, wet spring gave way to both a late frost and an early heat wave in May. Two hailstorms in June and July and a tropical storm in mid-July completed the damage; the majority of plaintiffs' onion crops were destroyed. Secretary Glickman declared Orange County a disaster area.

In early November 1996, plaintiffs filed claims for recovery under their catastrophic risk insurance policies. Meanwhile, after reading a newsletter circulated by the Orange County Farm Service Agency (the "FSA"), plaintiff's counsel, Martin Gold, anticipated that plaintiffs would be awarded less than they desired. Accordingly, he wrote two letters on November 1, 1996: one to Kenneth D. Ackerman, Acting Administrator of the Risk Management Agency of the Department of Agriculture, and one to Secretary Glickman. Both letters took issue with the FCIC policies utilized by the FSA, as agent for the FCIC, to determine the amounts due claimants. The letters accused the FCIC of "arbitrarily using an unrealistic market price and improperly subtracting a salvage factor," resulting in "benefits to farmers which are generally less than 10% of what they should be." Gold asserted that this methodology violated both the FCIA and 7 C.F.R. § 402.4(4)(a), which provide that the farmers should be covered for 50% of the approved yield indemnified at 60% of the expected market price "or a comparable coverage" as determined by the FCIC.

Gold never heard directly from Secretary Glickman, but on December 11, 1996, he received a letter from Ackerman, thanking Gold for his letters to Ackerman and Glickman.

Page 93

After explaining the procedure for calculating onion indemnities pursuant to their policies, Ackerman defended the agency's calculation of the established market price for onions, noting that when plaintiffs purchased coverage, they knew what their coverage would be and had the option of purchasing a higher level of protection. The letter never mentioned the specific details of plaintiffs' claims, focusing instead on the general procedure followed by the FCIC in calculating onion insurance indemnities. On January 21, 1997, Gold filed plaintiffs' complaint in the United States District Court for the Southern District of New York, claiming that the FCIC's calculation of the indemnities due to plaintiffs violated the FCIA, and primarily seeking a declaratory judgment requiring the FCIC to use "true" expected market prices ($12.00 per cwt.) rather than "arbitrary" expected market prices ($4.84 per cwt.) to calculate the indemnities.

One day later, Larry Atkinson, Director of the Raleigh Regional Service Office of the Department of Agriculture's Risk Management Agency, sent a letter to each individual plaintiff, notifying them that after "thorough review and careful consideration," the agency was unable to approve the claims submitted in November 1996 by each plaintiff. Atkinson defended the agency's calculation of established market price as based on available market data, and noted that the price was part of the insurance contract executed by the plaintiffs, as was the salvage value determination. The letter concluded by outlining three methods of contesting the agency's determination: plaintiffs could (1) file a written request for reconsideration with the Risk Management Agency within 30 days, (2) request appellate review by the National Appeals Division of the Department of Agriculture within 30 days, or (3) request mediation or alternative dispute resolution with the Risk Management Agency within 15 days.

Plaintiffs refrained from exercising any of these three administrative options, choosing instead to proceed with their case before the district court. The statute of limitations has now run on all three administrative review options.

II.

On August 28, 1997, Judge Parker granted defendants' Rule 12(c) motion for judgment on the pleadings. We review such dismissals de novo. See Sheppard v. Beerman, 94 F.3d 823, 827 (2d Cir.1996). "All allegations in the complaint must be accepted as true; all inferences must be drawn in favor of the plaintiff; and dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which...

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106 practice notes
  • 535 F.Supp.2d 1268 (N.D.Ga. 2008), C. A. l 03-cv-1230, Sierra Club v. United States Forest Service
    • United States
    • Federal Cases United States District Courts 11th Circuit United States District Courts. 11th Circuit. Northern District of Georgia
    • February 22, 2008
    ...522, 530-31 (7th Cir.1993); The Lands Council v. Vaught, 198 F.Supp.2d 1211, 1241 (E.D.Wash.2002). But see Bastek v. Fed. Crop Ins. Corp., 145 F.3d 90, 94-95 (2nd Cir.1998). The Court elects to do so in the case of the Kisatchie appeal, but not the Florida appeal. The record affirmatively s......
  • Saleh v. Pastore, 042721 NYSDC, 19 Civ. 11799 (KPF)
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Courts. 2nd Circuit. Southern District of New York
    • April 27, 2021
    ...not free to dispense with [it].” Escaler, 582 F.3d at 292 (alteration in Escaler) (quoting Bastek v. Fed. Crop Ins. Co., 145 F.3d 90, 94 (2d Cir. 1998)). Accordingly, “[i]f a party fails to exhaust administrative remedies, then the court may dismiss the action becau......
  • 457 F.Supp.3d 67 (D.Conn. 2020), Civ. 3:20cv534 (JBA), McPherson v. Lamont
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Court (Connecticut)
    • May 6, 2020
    ...clearly required exhaustion, sound judicial discretion governs." (citations omitted)); Bastek v. Fed. Crop Ins. Corp., 145 F.3d 90, 94 (2d Cir. 1998) ("Statutory exhaustion requirements are mandatory, and courts are not free to dispense with them. Common law (o......
  • 253 F.Supp.2d 496 (W.D.N.Y. 2003), 99-CV-6353, Labounty v. Johnson
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Court of Western District of New York
    • March 27, 2003
    ...free to dispense with them." Hemphill v. New York, 198 F.Supp.2d 546, 549 (S.D.N.Y.2002); see also Bastek v. Fed. Crop Ins. Corp., 145 F.3d 90, 94 (2d Cir. 1998). Because Congress specifically mandated that all prisoners exhaust their administrative remedies prior to bringing suit, Nus......
  • Request a trial to view additional results
105 cases
  • 535 F.Supp.2d 1268 (N.D.Ga. 2008), C. A. l 03-cv-1230, Sierra Club v. United States Forest Service
    • United States
    • Federal Cases United States District Courts 11th Circuit United States District Courts. 11th Circuit. Northern District of Georgia
    • February 22, 2008
    ...522, 530-31 (7th Cir.1993); The Lands Council v. Vaught, 198 F.Supp.2d 1211, 1241 (E.D.Wash.2002). But see Bastek v. Fed. Crop Ins. Corp., 145 F.3d 90, 94-95 (2nd Cir.1998). The Court elects to do so in the case of the Kisatchie appeal, but not the Florida appeal. The record affirmatively s......
  • Saleh v. Pastore, 042721 NYSDC, 19 Civ. 11799 (KPF)
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Courts. 2nd Circuit. Southern District of New York
    • April 27, 2021
    ...not free to dispense with [it].” Escaler, 582 F.3d at 292 (alteration in Escaler) (quoting Bastek v. Fed. Crop Ins. Co., 145 F.3d 90, 94 (2d Cir. 1998)). Accordingly, “[i]f a party fails to exhaust administrative remedies, then the court may dismiss the action becau......
  • 457 F.Supp.3d 67 (D.Conn. 2020), Civ. 3:20cv534 (JBA), McPherson v. Lamont
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Court (Connecticut)
    • May 6, 2020
    ...clearly required exhaustion, sound judicial discretion governs." (citations omitted)); Bastek v. Fed. Crop Ins. Corp., 145 F.3d 90, 94 (2d Cir. 1998) ("Statutory exhaustion requirements are mandatory, and courts are not free to dispense with them. Common law (o......
  • 253 F.Supp.2d 496 (W.D.N.Y. 2003), 99-CV-6353, Labounty v. Johnson
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Court of Western District of New York
    • March 27, 2003
    ...free to dispense with them." Hemphill v. New York, 198 F.Supp.2d 546, 549 (S.D.N.Y.2002); see also Bastek v. Fed. Crop Ins. Corp., 145 F.3d 90, 94 (2d Cir. 1998). Because Congress specifically mandated that all prisoners exhaust their administrative remedies prior to bringing suit, Nus......
  • Request a trial to view additional results
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