Harper v. Farm Credit Admin.
| Decision Date | 04 June 1985 |
| Docket Number | Civ. No. 85-291-PA. |
| Citation | 628 F. Supp. 1030 |
| Parties | Myron HARPER and Jane Harper, husband and wife, Plaintiffs, v. The FARM CREDIT ADMINISTRATION; Donald J. Wilkinson; the Federal Intermediate Credit Bank of Spokane, Washington; Kenneth P. Krueger; Thomas E. Brown; Jerald Wharton; and Willamette Production Credit Association in Liquidation, Defendants. |
| Court | U.S. District Court — District of Oregon |
Clifford N. Carlsen, Jr., R. Alan Wight, Richard A. Edwards, Miller, Nash, Wiener, Hager & Carlsen, Portland, Or., for defendants Federal Intermediate Credit Bank, Kenneth P. Krueger, Thomas E. Brown, Jerald Wharton, and Willamette Production Credit Assn.
Charles H. Turner, U.S. Atty., Jack C. Collins, Asst. U.S. Atty., Portland, Or., Richard K. Willard, Acting Asst. Atty. Gen., Sandra M. Schraibman, Stanley Dalton Wright, Wendy B. Kloner, U.S. Dept. of Justice, Civ. Div., Washington, D.C., for defendants Farm Credit Admin. and Donald J. Wilkinson.
Henry A. Carey, Henry A. Carey, P.C., Portland, Or., William D. Brandt, Ferder, Ogdahl & Brandt, Salem, Or., for plaintiffs.
Two related cases have previously been before me. VanLeeuwen, et al. v. The Farm Credit Administration, et al., Civil No. 83-1413-PA, was an action brought by five shareholders and former directors of the Willamette Production Credit Association (WPCA) alleging that the FCA conducted an improper audit. I granted a preliminary injunction declaring this audit null and void and restoring the WPCA to its prior status. See VanLeeuwen, 577 F.Supp. 264 (D.Or.1983). On May 15, 1984 I dismissed that action with prejudice, based on a Stipulated Agreement (Agreement) filed with the court and signed by all parties. On December 12, 1984 I reopened the case for a determination of whether the Agreement had been violated. On December 28, 1984 I found the Agreement had not been violated and reinstated the dismissal with prejudice. See VanLeeuwen v. Farm Credit Administration, 600 F.Supp. 1161 (D.Or.1984); 600 F.Supp. 1173 (D.Or. 1984).
I dismissed Coleman, et al. v. Federal Intermediate Credit Bank of Spokane, et al., Civil No. 84-6251E-PA, slip op. (D.Or. Dec. 12, 1984) because it was barred by res judicata.
This is an action against The Farm Credit Administration (FCA); its governor, Donald J. Wilkinson; The Federal Intermediate Bank of Spokane (FICB); its president, Kenneth P. Krueger; a FICB senior vice president, Rod R. Olson; and Jerald Wharton, an officer of the FICB and liquidating agent of the Willamette Production Credit Association in Liquidation.
Plaintiffs Myron and Jane Harper own and operate a farm near Salem, Oregon. They have financed their farm operations through loans from the WPCA since 1973. They began having financial difficulties in 1981. On May 17, 1984 the WPCA rejected a loan renewal request made by the Harpers. The loan committee stated that, unless a satisfactory liquidation plan could be agreed upon, collection should begin. The WPCA was not in liquidation when that recommendation was made. A foreclosure action was filed by the WPCA against the Harpers in Oregon State Court in October, 1984 (after liquidation of the WPCA began).
Plaintiffs ask that defendants be enjoined from proceeding with the liquidation of the WPCA or other Production Credit Associations (PCAs) or foreclosing on mortgages or loans until this court is satisfied that proper regulations governing liquidation of PCAs have been promulgated pursuant to 12 U.S.C. §§ 2183 and 2252(b). They ask that the state court foreclosure proceeding against them be enjoined and request a declaratory judgment that the liquidations of the WPCA and other PCAs are unlawful. Plaintiffs assert that the defendants have failed to adopt proper final regulations governing the liquidation of PCAs and that this alleged failure is violative of the Administrative Procedure Act, 5 U.S.C. § 701 et seq. Federal Defendants have issued proposed regulations concerning liquidation. See 50 Fed.Reg. 6000 (1985). I assume for the purposes of this decision that the proposed regulations are inadequate. Plaintiffs also move for certification of a nationwide class action. All defendants have moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6).
For the reasons stated below, I find that plaintiffs have failed to state a claim for which relief can be granted. I DENY plaintiffs' motion for a preliminary injunction and GRANT the defendants' motions to dismiss. Plaintiffs' Motion For National Class Certification is therefore moot.
The FCA is an independent executive agency comprised of the FCA Board, the Governor, and other personnel. 12 U.S.C. § 2241. The FCA is mandated to charter, supervise, examine, and regulate the banks and associations that comprise the Farm Credit System (System). The System is divided into twelve Farm Credit Districts, each of which contains a federal land bank, a federal intermediate credit bank, a bank for cooperatives, and varying numbers of local federal land bank associations, local banks for cooperatives, and PCAs. The Association is one of thirty PCAs in the Twelfth Farm Credit District. Those PCAs obtain funds from the FICB to finance operating and capital credit needs of eligible borrowers. The System banks and associations are owned by borrower-members and operated on a cooperative basis. Their function is to serve the credit needs of farmers, ranchers, and aquatic producers and harvesters.
The traditional equitable criteria for granting injunctive relief are:
In this circuit, the movant meets its burden by demonstrating either (1) a combination of probable success on the merits and the possibility of irreparable injury or (2) that serious questions are raised and the balance of hardships tips sharply in its favor. Id. at 1201. These are not separate tests, but the outer reaches of "a single continuum." Benda v. Grand Lodge of Intern'l Association of Machinists, 584 F.2d 308, 315 (9th Cir.1978), cert. dismissed, 441 U.S. 937, 99 S.Ct. 2065, 60 L.Ed.2d 667 (1979).
A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The complaint must be read in the light most favorable to the plaintiff. Russell v. Landrieu, 621 F.2d 1037, 1039 (9th Cir.1980).
I. Standing
Article III of the Constitution requires that the federal courts only adjudicate "cases" and "controversies." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). Standing is one aspect of this "case" or "controversy" requirement. See Allen v. Wright, 468 U.S. 737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984).
To meet the constitutional requirement of standing a plaintiff must allege "personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Allen, 104 S.Ct. at 3325. Determining whether plaintiffs have standing in a particular case requires examination of the allegations to ascertain whether a particular plaintiff is entitled to an adjudication of the particular claims asserted. Id. Defendants assert that plaintiffs lack standing to bring the present action.
The personal injury plaintiffs allege is the foreclosure of the mortgage on their farm. This is the type of personal injury plaintiffs are required to allege to meet the first prong of the standing requirement. See Allen, 104 S.Ct. at 3315.
Plaintiffs assert that the lack of proper regulations governing liquidation of PCAs is the cause of the foreclosure action. Defendants argue that the WPCA Board of Directors had already recommended collection on the Harpers' loan around the time that the WPCA was placed in voluntary liquidation and that the foreclosure on the Harpers' property would have occurred regardless of the liquidation. Defendants reason that any purported lack of regulations could not have caused injury to plaintiff. Plaintiffs assert that the "collection" recommended by the WPCA is different than foreclosure and that the foreclosure was not instituted until after the liquidation of the WPCA was begun. Plaintiffs argue that the liquidation, without proper guidelines, creates a rigid relationship between the Association and the borrower where foreclosure is seen as the only remedy for "problem" loans. They assert that this relationship, caused by a lack of proper liquidation regulations, is the cause of their injury.
In Allen, parents of black public school children alleged that the Internal Revenue Service (IRS) had not adopted...
To continue reading
Request your trial
-
Harper v. Federal Land Bank of Spokane, s. 88-4033
...proceeding. The district court denied the Harpers' motion for an injunction and dismissed the action. Harper v. Farm Credit Admin., 628 F.Supp. 1030, 1033-34 (D.Or.1985). After several continuances of the state court's foreclosure trial, the Harpers entered into a settlement agreement to re......
-
Federal Land Bank of Spokane v. Stiles
...whether the injuries of which Stiles complain are fairly traceable to the PCA's conduct. The PCA cites Harper v. Farm Credit Administration, 628 F.Supp. 1030, 1032-33 (D.Or. 1985), in which the court held as speculative plaintiffs' allegation that the lack of proper regulations governing PC......
-
Harper v. Federal Land Bank of Spokane, Civil No. 88-449-PA.
...foreclosure proceeding. On June 4, 1985, I denied the Harpers' motion for an injunction and dismissed the action. Harper v. Farm Credit Admin., 628 F.Supp. 1030 (D.Or.1985). The state court action proceeded. The Harpers filed a Chapter 11 bankruptcy petition. In July 1986, WPCA obtained rel......