Curry v. Block, Civ. A. No. CV 281-37.

Citation541 F. Supp. 506
Decision Date11 June 1982
Docket NumberCiv. A. No. CV 281-37.
PartiesInez CURRY, Remer Curry, Emory C. Mills, Margaret T. Mills, Billie R. Collins, Andrew Covin, and Lannis H. Morrell on behalf of themselves and all others similarly situated, Plaintiffs, v. John BLOCK, Individually and in his capacity as Secretary of the United States Department of Agriculture; H. Allan Brock, Individually and in his capacity as Deputy Administrator of FmHA Farm and Family Programs; Orson G. Swindle, III, Individually and in his capacity as State Director for Georgia, Farmers Home Administration, United States Department of Agriculture; and William J. Holley, Individually and in his capacity as District Director Farmers Home Administration, United States Department of Agriculture, Defendants.
CourtUnited States District Courts. 11th Circuit. United States District Court (Southern District of Georgia)


Holle Weiss-Friedman, Brunswick, Ga., Martha A. Miller, John L. Cromartie, Jr., Atlanta, Ga., for class action plaintiffs.

Melissa S. Mundell, Savannah, Ga., Ted L. Elders, Atlanta, Ga., for defendants.

Garland T. Byrd, Charles W. Byrd, Butler, Ga., Denmark Groover, Jr., Macon, Ga., Robert Rosenblum, Waycross, Ga., for intervenors.


ALAIMO, Chief Judge.


Plaintiffs, acting on their own behalf and on behalf of a class defined as:

"all persons in Georgia who have farm operating, ownership, or emergency loans financed under the Consolidated Farm and Rural Development Act, P.L. 87-128, whose loans were, are, or will be held by the Farmers Home Administration of the United States Department of Agriculture, and whose farm loans have been foreclosed, are in foreclosure, are threatened with foreclosure, or shall be foreclosed upon or threatened with foreclosure,"

have brought this action seeking declaratory and injunctive relief in a challenge to the procedures used by the Farmers Home Administration (FmHA) in implementing a 1978 amendment to the Consolidated Farm and Rural Development Act entitled "Loan moratorium and policy on foreclosures." 7 U.S.C. § 1981a (1982 Supp.). Specifically, the plaintiffs seek a declaration by the Court that the members of the class must be given personal notice of the availability of deferral relief under § 1981a and must be granted the opportunity to apply for the same before any acceleration action is commenced. Plaintiffs also pray that the Court enjoin the defendants from foreclosing on the applicable FmHA loans without first providing the borrowers with personal notice of and an opportunity to apply for § 1981a deferral relief. A declaration is also sought that the FmHA has a duty to promulgate regulations implementing § 1981a consistent with the underlying Congressional intent. Further, plaintiffs ask the Court to enjoin the failure of the FmHA to promulgate these regulations. Finally, plaintiffs seek an Order enjoining the defendants from foreclosing on all consolidated rural housing and farm loans until they have complied with a consent Order entered in a similar case. See Williams v. Butz, No. 176-153 (S.D.Ga. Oct. 7, 1977). In that case, the FmHA agreed to provide certain rural housing program borrowers with personal notice of the availability of moratorium relief under the Rural Housing Act, 42 U.S.C. § 1475 (that Act's functional equivalent of § 1981a). Plaintiffs claim that the refusal of the FmHA to provide consolidated farm and rural housing borrowers with the rights due to rural housing borrowers (personal notice of moratorium rights) violates the Williams v. Butz consent Order.1


The named plaintiffs and the class they represent are farmers in rural Georgia. One way or another, each of them has become eligible for and received agricultural credit through the FmHA under the Consolidated Farm and Rural Development Act. 7 U.S.C. §§ 1921 et seq.

It is apparent that most if not all of these farmers began experiencing financial difficulty in 1977 due in large part to adverse weather and economic conditions. As a result, the farmers have found it desirable to maximize their use of loan servicing devices and have attacked the FmHA's implementation of § 1981a.

At this point in the litigation, it is clear that the only real issue between the parties is legal in nature. Accordingly, the parties have filed extensive cross-motions for summary judgment, and the case is now ready for final adjudication.


The legal issue in this case basically involves the interpretation and construction of a section of a Congressional enactmentsection 1981a. In such situations, it is "the conventional judicial duty to give faithful meaning to the language Congress adopted in light of the evident legislative purpose in enacting the law in question." United States v. Bornstein, 423 U.S. 303, 310, 96 S.Ct. 523, 528, 46 L.Ed.2d 513 (1976). Thus, a cursory review of the history of federal involvement in agricultural credit through 1978, and a summary of the statutory and regulatory framework, are necessary to aid this Court in determining the legislative purpose.

A. History of federal involvement in agricultural credit2

The federal government has been involved in extending agricultural credit for some 120 years. The first such involvement was initiated in 1863 with the passage of the Homestead Act; an act designed to provide farming opportunities for small-scale, family farmers—still a goal for federal intervention in agricultural credit. Although this aspect of federal involvement remained basically the same over the next 72 years, credit to farmers was also made available through the Federal Land Banks (1916), the Federal Intermediate Credit Banks (1923), and the Banks for Cooperatives (1933). The federal government was also making "natural disaster" loans available pursuant to a presidential directive issued in 1918 in response to a severe drought.

Then, in 1935, the earliest predecessor to the FmHA, the Resettlement Administration, was created by Executive Order. This agency was authorized to make small loans to farmers with the goal toward helping families settle in the rural areas. Soon thereafter, Congress again entered the agricultural credit market, this time by passing the Bankhead-Jones Farm Tenant Act of 1937. This Act created the Farm Security Administration to administer a program of supervised, long-term farm ownership loans to be made to farmers without alternative credit sources—a basic duty of the present-day FmHA. Thus, the concepts of the present farm loan programs are rooted in that mass of social legislation arising out of the Depression years.

The Bankhead-Jones Farm Tenant Act of 1937 was reenacted in 1946 as a part of the Farmers Home Administration Act of 1946. This latter Act did not change the nature of federal involvement in agricultural credit; instead it was enacted "to simplify and improve credit services to farmers and promote farm ownership." 1946 U.S.Code Cong.Service 1028. As implied by its title, the act abolished the ten year old Farm Security Administration and replaced it with the Farmers Home Administration.

Fifteen years after the Farmers Administration Act of 1946 was passed, changing conditions in the agricultural section of this country forced Congress to update its program for agricultural credit:

"The revolution occasioned by the mechanization of farming operations generally, the change in character and extent of resources necessary to successful operation of family farms, and the increase in farming technology have made tremendous differences in the credit needs of farmers. While amendments have been made since 1946 to modify the Secretary's lending authority as these changes were taking place, many of the provisions of earlier loans have ceased to serve their initial purpose and are unworkable as a basis for a Federal supplement to the financing of our Nation's agricultural production."

1961 U.S.Code Cong. & Ad.News 2243, 2306. As a result, Congress passed the Consolidated Farmers Home Administration Act of 1961 (as Title III of the Agricultural Credit Act of 1961). The Act, in response to the "increase in farming technology" and the "tremendous differences in the credit needs of farmers," was designed as "a consolidation and modernization of the Secretary's authority to make available to eligible farmers who cannot obtain credit elsewhere direct and insured loans necessary to finance their acquisition, improvement and operation of farms." Id. at 2305. Thus, the 1961 Act placed under one more modern roof the already existing authority of the Secretary to loan money for three purposes —real estate acquisitions and improvement (Subtitle A), operating expenses (Subtitle B) and emergencies (Subtitle C).

Contemporaneously with its intervention in the farmer program loans, the federal government was also involved in extending credit, through the FmHA, to farm owners to enable them to construct, improve, alter or repair their farm dwellings. See 42 U.S.C. § 1471, 63 Stat. 432 (1949). This program was a part of the Congressional action on a national housing policy designed to assist in the "elimination of substandard and other inadequate housing ..., and the realization of the goal of a decent home and a suitable living environment for every American family." The Housing Act of 1949, 63 Stat. 413, 413 (1949).

In 1972, the farmer loan program and the rural housing loan program were consolidated through an amendment to the Consolidated Farms Home Administration Act of 1961. This amendment changed the name of the 1961 Act to the Consolidated Farm and Rural Development Act and adopted provisions relevant to Rural Housing loans. It did not, however, change the nature of the farmer loan program; thus this program stands today basically as it has for almost half a century.

In summary, federal intervention in agricultural credit shows a long history of farmer loans designed to aid the family farmer who cannot obtain credit from a different...

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