Gollehon Farming v. U.S.
| Decision Date | 12 June 1998 |
| Docket Number | No. CV-96-033-GF-PGH.,CV-96-033-GF-PGH. |
| Citation | 17 F.Supp.2d 1145 |
| Court | U.S. District Court — District of Montana |
| Parties | GOLLEHON FARMING; Gollehon Grain Co.; Greg P. Alzheimer; Jim Anderson; Larry F. Arendt; Armstrong Farms; Bar Triangle J. Ranch; B.M. (Bud) Beastrom; James Beastrom; Cecil Benjamin; Dellas Bentz; Carter Berg, et al.; Dennis and Herman Bertsch; Roger, Myrna & Randy Bertsch; Pius Black; Arlo Bodin; Sidney Boe; Albert L. Boeckel; Gaylon E. Brandt; Gilbert Braun; Ervin Bren; Budak Farms; Bart Burdick; Jerry & Donna Buxbaum; CA Weeding & Sons; Lloyd L. Calkins; Don Canham; Chapin Farm Account; Charles Senner, Inc.; Christine Christiansen; Helen Christiansen; Carlyle H. Colby; et al., Plaintiffs, v. UNITED STATES of America, Defendants. |
William C. Watt, Sara J. Johnson, Robert G. Mullendore, Mullendore, Tawney, Watt, PC, Missoula, MT, Alan F. Blakley, Blakley & Velk, Missoula, MT, for Plaintiffs.
The plaintiffs, consisting of 346 farmers and 2 grain elevator companies located in Montana, North Dakota and South Dakota, instituted the present action seeking monetary and declaratory relief for injuries allegedly incurred between May 2, 1993, and January 24, 1994, when the Federal Grain Inspection Service ("FGIS"),1 adopted the Near Infrared Transmittance ("NIRT") technology as the official method for estimating the protein content in wheat analyzed under its national wheat testing program. Plaintiffs' claims for monetary damages are premised upon the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671-2680, the Little Tucker Act, 28 U.S.C. § 1346(a)(2), and the Grain Standards Act, 7 U.S.C. §§ 71 et seq. The claims for declaratory relief are based upon alleged violations of the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 et seq.
Presently before the court is defendant's Motion to Dismiss; plaintiffs' Motion for Summary Judgment; plaintiffs' Motion for Sanctions; and plaintiffs' Motion for Class Certification on behalf of all wheat producers and county grain elevators in the United States that sold wheat between May 2, 1993, and January 24, 1994, under circumstances where the protein content of the wheat was determined by miscalibrated NIRT instruments.2 Having reviewed the record, together with the briefs submitted by the respective parties, the court is prepared to rule.
Through the Grain Standards Act of 1976 and related amending acts, 7 U.S.C. §§ 71 et seq., Congress seeks to protect the integrity of interstate and foreign commerce in various agricultural grains. See, 7 U.S.C. § 74(a). The Act authorizes the FGIS to evaluate the quality and condition of domestic agricultural grains by means of official inspections at export locations and other official inspection sites. See, 7 U.S.C. § 79. Official certificates describe the results of official inspections undertaken by the FGIS. See, 7 U.S.C. § 79(a),(c).3 One of the parameters measured by the FGIS is protein content. See, 7 U.S.C. § 79(b), 7 C.F.R. §§ 800.45, 800.71 (Schedule A, Table 1). Protein levels are an important factor in determining wheat prices, especially spring wheat, with higher protein levels commanding a higher market price.
Official testing of wheat protein, under the Grain Standards Act, began on May 1, 1978. See, 43 Fed.Reg. 13,406 (1978). At that time, the FGIS utilized the Near-infrared reflectance ("NIRR") technology as the official technology to estimate the protein content in wheat. To properly utilize the NIRR technology, wheat grains had to be ground prior to analysis. Inconsistent grinding and handling of the pulverized grain sometimes resulted in inaccurate protein determinations.
Cognizant of the shortcomings of the NIRR technology, the FGIS searched for another method for measuring wheat protein. On July 15, 1992, the FGIS announced it would begin using the NIRT technology to determine the protein content in hard red spring wheat, hard red winter wheat and soft white wheat.4 Shortly thereafter, the FGIS suspended use of NIRT instruments, when it discovered that calibration equations incorporated into the NIRT instruments failed to accurately estimate the protein content in certain types of hard red winter wheat.
Following further testing and calibration, the FGIS recommenced use of the NIRT instruments on May 2, 1993.5 At that time, most grain elevators operated by private parties used NIRR instruments to determine wheat protein. Shortly after the FGIS began using NIRT instruments, it became apparent that NIRR instruments used by the grain elevators and NIRT instruments used by the FGIS, did not yield consistent protein estimates for all classes of wheat. Accordingly, the operators of the grain elevators changed the bias of their NIRR instruments so the protein measurements obtained with the NIRR instruments approximated the protein measurements obtained with the official NIRT instruments.6 Numerous farmers, including the plaintiff-farmers, sold wheat for a price determined with reference to a protein content measured by the altered NIRR instruments.
Sometime after May 2, 1993, the FGIS learned the NIRT instruments underestimated the protein content in durum wheat harvested in 1993, and certain weathered hard red spring wheat. The underestimation occurred because the NIRT instruments were not properly calibrated for these particular types of wheat. In response, the FGIS developed new calibration equations for hard red spring wheat and durum wheat.7 The FGIS began using the new calibration equation for durum wheat on November 8, 1993. The FGIS began using the new calibration equation for hard red spring wheat on January 24, 1994. Plaintiffs do not challenge the accuracy of the NIRT instruments following the recalibration in January of 1994. In the present action, the plaintiff-farmers seek, inter alia, monetary damages for losses they incurred between May 2, 1993, and January 24, 1994, when they sold wheat for a price determined by grain elevators using NIRR instruments adjusted to approximate the protein measurements of the NIRT instruments used by the FGIS. The plaintiff-farmers allege they incurred losses when the NIRR instruments underestimated the protein content in their wheat. The plaintiff-farmers contend the government is responsible for their losses, because the FGIS used miscalibrated NIRT instruments for official protein determinations, knowing the private grain elevators would adjust their NIRR instruments to approximate the protein measurements of the official NIRT instruments.
The plaintiff-grain elevators allege they incurred damages when they purchased wheat from farmers, based upon a protein content determination made with NIRR instruments that were not adjusted to approximate NIRT instruments, and then sold the same wheat for a lower price when miscalibrated NIRT instruments, operated by the FGIS, yielded a lower protein estimate.
The FTCA operates as an explicit waiver of the government's sovereign immunity under certain circumstances. The FTCA provides that the United States may be held liable in tort when a federal employee is negligent in the scope of his employment "under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." See, 28 U.S.C. § 1346(b). The FTCA's waiver of sovereign immunity, however, is not without limits. Section 2680 of Title 28 describes several exceptions to the government's liability under the FTCA. When a claim falls within an exception to the FTCA's waiver of sovereign immunity, the court is without subject matter jurisdiction to hear the case. Mundy v. United States, 983 F.2d 950, 952 (9th Cir.1993). Each exception to the FTCA must be strictly construed in favor of the United States. Saraw Partnership v. United States, 67 F.3d 567, 569 (5th Cir.1995).
In the case sub judice, the government argues the plaintiffs' FTCA claims should be dismissed for three reasons. First, the claims are barred by the "misrepresentation exception" to the FTCA. See, 28 U.S.C. § 2680(h). Second, the claims are barred by the "discretionary function exception" to the FTCA. See, 28 U.S.C. § 2680(a). Third, the United States, if a private person, could not be found liable under State law for the alleged acts underlying the plaintiffs' FTCA claims. See, 28 U.S.C. § 1346(b).
The misrepresentation exception to the FTCA prohibits claims against the United States "arising out of ... misrepresentation."8 See, 28 U.S.C. § 2680(h). The exception covers both affirmative acts of misrepresentation and omissions of material fact. McNeily v. United States, 6 F.3d 343, 347 (5th Cir.1993). It excludes both negligent and intentional misrepresentation claims. OPM v. Richmond, 496 U.S. 414, 430, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990). Historically, courts have had difficulty determining whether a claim is one for misrepresentation. The concept is slippery; "any misrepresentation involves some underlying negligence" and "any negligence action can be characterized as one for misrepresentation because any time a person does something he explicitly or implicitly represents that he will do the thing non-negligently." United States v. Fowler, 913 F.2d 1382, 1387 (9th Cir.1990). "[T]he essence of an action for misrepresentation, whether negligent or intentional, is the communication of misinformation on which the recipient relies." Block v. Neal, 460 U.S. 289, 296, 103 S.Ct. 1089, 75 L.Ed.2d 67 (1983).
To determine whether a claim is one of misrepresentation or negligence, the court examines the distinction ...
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