Bartlett v. U.S. Dep't of Agric.

• Decision Date: 05 June 2013
• Docket Number: No. 12–3087.,12–3087.
• Citation: 716 F.3d 464
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: Peter BARTLETT; Sara Boevers; Steven Boevers; Dale Busch; Duane Busch; Brad Carlson; Matthew Carlson; Scott Chapin; Jeffrey Cook; Dimon Grain & Livestock, Inc.; Doolittle Enterprises, LLC; Eric Doolittle; Brian Fonken; Jacquelyn Fonken; Max Fonken; Hanson Corporation; Russell L. Hanson; Charles A.D. Haywood; Paul Haywood; Terry Hennings; Hillcrest Stock Farms, Inc.; Kreg Kantak, Plaintiffs–Appellants Kevin Luedtke, Plaintiff Larry Luhring; Richard Luhring; Brian Meyer; Moser Farms, Inc.; Mott Farms, Inc., Plaintiffs–Appellants Jack Moulds, Plaintiff Kennerly N. Reece; Ridge View Stock Farms, Corp.; Nolan Rollene; Schwandt Farms, Inc.; Dallas Thomas; Vierkandt Farms; Adam Wibholm; John Wibholm; Jason Woodring, Plaintiffs–Appellants v. UNITED STATES DEPARTMENT OF AGRICULTURE; Thomas J. Vilsack, in his official capacity as Secretary of the United States Department of Agriculture; Farm Service Agency; Bruce Nelson, in his official capacity as Acting Administrator of the Farm Service Agency; Iowa State Farm Service Agency; John Whitaker, in his official capacity as Executive Director of the Iowa State Farm Service Agency, Defendants–Appellees.

716 F.3d 464

Peter BARTLETT; Sara Boevers; Steven Boevers; Dale Busch; Duane Busch; Brad Carlson; Matthew Carlson; Scott Chapin; Jeffrey Cook; Dimon Grain & Livestock, Inc.; Doolittle Enterprises, LLC; Eric Doolittle; Brian Fonken; Jacquelyn Fonken; Max Fonken; Hanson Corporation; Russell L. Hanson; Charles A.D. Haywood; Paul Haywood; Terry Hennings; Hillcrest Stock Farms, Inc.; Kreg Kantak, Plaintiffs–AppellantsKevin Luedtke, PlaintiffLarry Luhring; Richard Luhring; Brian Meyer; Moser Farms, Inc.; Mott Farms, Inc., Plaintiffs–AppellantsJack Moulds, PlaintiffKennerly N. Reece; Ridge View Stock Farms, Corp.; Nolan Rollene; Schwandt Farms, Inc.; Dallas Thomas; Vierkandt Farms; Adam Wibholm; John Wibholm; Jason Woodring, Plaintiffs–Appellants

v.UNITED STATES DEPARTMENT OF AGRICULTURE; Thomas J. Vilsack, in his official capacity as Secretary of the United States Department of Agriculture; Farm Service Agency; Bruce Nelson, in his official capacity as Acting Administrator of the Farm Service Agency; Iowa State Farm Service Agency; John Whitaker, in his official capacity as Executive Director of the Iowa State Farm Service Agency, Defendants–Appellees.

No. 12–3087.

United States Court of Appeals, Eighth Circuit.

Submitted: April 9, 2013.

Filed: June 5, 2013.

Brant Daniel Kahler, argued, Sean P. Moore, on the brief, Des Moines, IA, for appellant.

Jacob Alden Schunk, AUSA, argued, Teresa Baumann, AUSA, on the brief, Cedar Rapids, IA, for appellee.

Before LOKEN and GRUENDER, Circuit Judges, and PHILLIPS,¹ District Judge.

GRUENDER, Circuit Judge.

Plaintiffs are thirty-eight individuals and entities who farm corn and soybeans in several counties in Iowa (collectively, the “Producers”). Each Producer claimed eligibility to receive a payment under the Supplemental Revenue Assistance Payments Program (“SURE Program”) for the 2008 crop year. In this lawsuit, the Producers allege that the defendants, six government entities and officials, improperly calculated SURE program payments allegedly owed to them under 7 U.S.C. § 1531. The district court ² dismissed the lawsuit because the Producers failed to exhaust their administrative remedies before filing suit and no equitable doctrine excused their failure to exhaust. The Producers appeal, and we affirm.

I. BACKGROUND

The defendants are the United States Department of Agriculture (“USDA”); the Farm Service Agency (“FSA”); the Farm Service Agency for the State of Iowa (“Iowa FSA”); Secretary of Agriculture Thomas J. Vilsack; Acting Administrator of the Farm Service Agency, Bruce Nelson; and Executive Director of the Iowa Farm Service Agency, John Whitaker (collectively, the “Government”). The USDA, through its division the FSA, implements the SURE Program on the federal level. Congress created the SURE Program through the Food Conservation and Energy Act of 2008, and the FSA has adopted regulations to administer the program. The SURE Program provides disaster assistance payments to eligible producers for losses in crop production or quality resulting from a natural disaster. Under the SURE Program, eligible producers may receive sixty percent of the difference between the disaster assistance program guarantee (“SURE guarantee”) and the total actual revenue of the farm. 7 U.S.C. § 1531(b)(2)(A). Pursuant to a statutory formula, the SURE guarantee is equal to 120 percent of the product of three factors, one of which is the “price election for the commodity elected by the eligible producer”(“price election”). Id. § 1531(b)(3)(A)(ii). In turn, FSA regulations define “price election” as “the crop insurance price elected by the participant multiplied by the percentage of price elected by the participant.” 7 C.F.R. § 760.602. State committees, such as the Iowa FSA, and local county committees are responsible for administering FSA programs on the local level. 7 C.F.R. § 7.2. As part of their responsibilities, these FSA subdivisions use federal and statutory formulas to calculate and issue SURE Program payments under the supervision of the FSA.

A program participant may seek administrative review of certain adverse county committee determinations by requesting reconsideration by the county committee, appealing to the state committee, requesting reconsideration by the state committee, agreeing to mediation, or appealing to the USDA National Appeals Division (“NAD”). 7 C.F.R. § 780.6. The NAD is a separate subdivision within the USDA and is independent of all other USDA agencies and offices, including local department officials. 7 C.F.R. § 11.2(a). The Secretary of Agriculture appoints the Director of the NAD, 7 U.S.C. § 6992(b)(1), and the NAD Director makes the final administrative decision as to whether an agency decision is appealable. Id. § 6992(d); 7 C.F.R. § 11.6. Notwithstanding the other avenues of administrative appeal, only “final determination[s]” by the NAD are “reviewable and enforceable” by district courts. 7 U.S.C. § 6999; 7 C.F.R. § 11.13(a).

However, not all county committee decisions are eligible for administrative review. By regulation, neither the FSA nor the NAD has the authority to review matters of “general applicability.” The relevant FSA regulations state that unappealable county committee determinations include decisions regarding: “(1) Any general program provision or program policy or any statutory or regulatory requirement that is applicable to similarly situated participants; [or] (2) Mathematical formulas established under a statute or program regulation and decisions based solely on the application of those formulas.” 7 C.F.R. § 780.5(a). The administrative appeal regulations applicable to the NAD further provide that “[t]he procedures contained in this part may not be used to seek review of statutes or USDA regulations issued under Federal Law.” 7 C.F.R. § 11.3(b). These regulations provide both the State Executive Director and the NAD Director with the authority to determine whether an adverse county committee decision is appealable. 7 U.S.C. § 6992(d); 7 C.F.R. § 11.6(a); 7 C.F.R. § 780.5(b). However, the State Executive Director's determination is not a final agency action; rather, it “is considered by FSA to be a new decision.” 7 C.F.R. § 780.5(c). In other words, only the NAD Director has the final authority to determine whether an FSA decision falls into the categories of issues that are eligible for administrative appeal, and, as explained above, only a final decision of the NAD is reviewable by a district court. 7 U.S.C. § 6999; 7 C.F.R. § 11.13.

The Producers each submitted an application for a SURE Program payment for the 2008 crop year. The dispute here centers on the price election figure that the county committees used to calculate the Producers' SURE Program payments. Specifically, the Producers contend that the price election should be determined by using the price election figure in each of their individual crop insurance policies, rather than the price election figures established by the USDA's Risk Management Agency (“RMA”). The Producers argue that the county committees' decision to use the RMA price election figures resulted in SURE Program payments that were erroneously low, and in some cases, zero.

One of the Producers, Vierkandt Farms, contacted attorney Douglas E. Gross after the local county committee in Hardin County, Iowa, informed it that no SURE Program payment would be forthcoming for the 2008 crop year. Gross requested a hearing before the Hardin County Committee to reconsider the matter. Gross averred that at that hearing, Kevin McClure, Iowa FSA Chief Agricultural Program Specialist, informed him that the issues raised at that hearing were matters of general applicability and, thus, not eligible for administrative appeal.

Five days after the hearing, Gross spoke with McClure by telephone. Gross stated that McClure agreed that the “FSA/NAD appealability review process” would be a “wast[e of] everyone's time and money” because it would be “fruitless and futile.” He further testified that McClure stated that “he would ensure that the Hardin County FSA's letter denying Vierkandt Farms's appeal would contain language stating that Vierkandt Farms' administrative appeal process had been exhausted at the county level.” Gross's firm then was retained by thirty-seven other clients, including each of the Producers. The Producers all appealed their initial 2008 SURE Program payment calculations to their respective county committees. The FSA county committees heard each appeal at separate informal hearings and denied the appeals, all finding the issues were non-appealable matters of general applicability. Following each of the informal hearings, the Producers each received a letter from their respective FSA county committee informing them of the committee's decision. The letters explained how the SURE Program payments were calculated and stated that there were no data entry errors. Each letter also stated:

The county committee has determined that the issues raised in this appeal are not appealable.... You may seek a review of the county committee's determination by filing with either the FSA State Executive Director or the National Appeals Division (NAD) Director a written request no later than 30 calendar days after the date you receive this notice according to the FSA appeal procedures found at 7 CFR Part 780 or the NAD appeal procedures found at 7 CFR Part 11. If you believe that this issue is appealable, you must write to either the FSA State Executive Director or the NAD Director at the applicable address shown and explain why you believe this determination is appealable.... If you request an appealability review by the State Executive Director and the State Executive Director determines that the issue is not appealable, you will be afforded the right to request an appealability review by the NAD Director.

The letters then provided the addresses of the Iowa FSA Executive Director and the NAD Director....