Hedge v. Lyng, Civ. No. 4-86-610.

• Decision Date: 25 August 1987
• Docket Number: Civ. No. 4-86-610.
• Citation: 689 F. Supp. 884
• Parties: Sam HEDGE, Jim Stengrim, William Decker, Lowell Nelson, individually, on behalf of themselves and others similarly situated, Plaintiffs, v. Richard E. LYNG, Secretary of the United States Department of Agriculture; Vance Clark, Administrator of the Farmers Home Administration; Russ Bjorhud, Minnesota State Director of the Farmers Home Administration, Defendants.
• Court: U.S. District Court — District of Minnesota

689 F. Supp. 884

Sam HEDGE, Jim Stengrim, William Decker, Lowell Nelson, individually, on behalf of themselves and others similarly situated, Plaintiffs, v. Richard E. LYNG, Secretary of the United States Department of Agriculture; Vance Clark, Administrator of the Farmers Home Administration; Russ Bjorhud, Minnesota State Director of the Farmers Home Administration, Defendants.

Civ. No. 4-86-610.

United States District Court, D. Minnesota, Fourth Division.

June 30, 1987.

Opinion on Request to Represent Larger Class August 25, 1987.

Juliet M. Tomkins, and James T. Massey, Farmers' Legal Action Group, St. Paul, Minn., for plaintiffs.

William Robert Irvin, Dept. of Justice, Civil Div., Washington, D.C., for defendants.

MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

Farmers Sam Hedge, Jim Stengrim, William Decker, and Lowell Nelson bring this action for injunctive and declaratory relief against the Secretary of Agriculture and the Administrator and Minnesota State Director of the Farmers Home Administration (FmHA). Plaintiffs challenge the legitimacy of regulations governing FmHA County Commissioner elections and the elections themselves. The first amended complaint alleges violations of the Food Security Act of 1985, the Administrative Procedures Act (APA), and the challenged regulations. It also alleges denial of constitutional rights to equal protection and freedom of association. The court denied defendants' motion to dismiss on June 18, 1987. The matter is now before the court on plaintiffs' motions for leave to file a second amended complaint, for class certification, for a preliminary injunction, and for partial summary judgment. A hearing was held on all motions on June 19, 1987. Since the injunctive relief sought relates to a June 30 election, it is necessary to reach the issues raised by that motion first. A subsequent order will consider the remaining issues.

A. Background

The pertinent facts are substantially undisputed. FmHA is the federal agricultural and rural development agency. It is the lender of last resort for farmers and ranchers seeking to finance their operations or improve their property. 7 U.S.C. §§ 1921-2000. Wherever FmHA operates its farm loan programs, it must establish a three member "county committee." 7 U.S. C. § 1982(a). These committees have numerous functions, including determining eligibility for certain types of loans, making recommendations regarding "problem cases" and applications for compromise, adjustment or cancellation of debts, and advising the FmHA county supervisor on certain matters. 7 C.F.R. § 2054.1103(a). Certification by the county committee is a prerequisite for obtaining certain loans. See e.g. 7 C.F.R. §§ 1941.33 and 1943.33.

Until 1986, the Secretary of Agriculture (the "Secretary") appointed all three members of each county committee. 7 U.S.C. § 1982 (amended 1985). Under the Food Security Act of 1985, Pub.L. 99-198, 99 Stat. 1354, however, two of the three county committee members are to be elected by the farming community:

In each county or area in which activities are carried out under this chapter, there shall be a county committee composed of three members. Two members shall be elected, from among their number, by farmers deriving the principal part of their income from farming who reside within the county or area, and one member, who shall reside within the county or area, shall be appointed by the Secretary for a term of three years. At the first election of county committee members under this subsection, one member shall be elected for a term of one year and one member shall be elected for a term of two years. Thereafter, elected members of the county committee shall be elected for a term of three years. The Secretary, in selecting the appointed member of the county committee, shall ensure that, to the greatest extent practicable, the committee is fairly representative of the farmers in the county or area. The Secretary may appoint an alternate for each member of the county committee. Appointed and alternate members of the county committee shall be removable by the Secretary for cause. The Secretary shall issue such regulations as are necessary relating to the election and appointment of members and alternate members of the county committees.

7 U.S.C. § 1982(a).

As required by statute, the Secretary, acting through FmHA, developed regulations. He did not, however, comply with the general APA procedure, which requires a notice of proposed rulemaking and a comment period before final regulations are published. Rather, without notice, the Secretary published "interim final rules" on May 22, 1986. A 30-day comment period followed the publication of the regulations but any comments that may have been received apparently did not affect the regulations.

Under these regulations, FmHA borrowers and their spouses and dependent children are not eligible for committee positions. 7 C.F.R. § 2054.1104(f). Persons who are political party officers or employees or "active in the management or affairs of any political club organization, or committee" are also ineligible. 7 C.F.R. § 2054.1104(d).

The interim final regulations also provide that the county committee elections must be held in June, § 2054.1105(a), and that the period for nominating by petition "should begin 45 days and end 20 days before election." § 2054.1111(b)(1). The opportunity to nominate is to be announced at least in local publications of general circulation. § 2054.1111(b)(2). Nominating petitions require three signatures, but nominees may sign their own petitions. § 2054.1111(b)(4). No one may sign more than one nominating petition. Id.

On May 28, 1986, the Administrator of FmHA (the "Administrator") issued a "Procedure Notice" adopting the May 22 regulations and setting a calendar for the 1986 county committee elections. The county supervisors were to publish notice of the nominating period by Thursday, June 5, 1986, but to accept petitions only until Tuesday, June 10, 1986.

The plaintiffs assert that they were entitled to nominate themselves or others under the statute, but prevented from doing so by the regulations and procedure notice. They challenge the regulations as unconstitutional and contrary to both the Act and the APA. They challenge the elections held pursuant to the procedure notice as unconstitutional, contrary to the APA, and contrary to the challenged regulations. Defendants respond that the ineligibility of certain groups for committee membership is both necessary and reasonable and that congressional and agricultural time constraints both required an admittedly rushed 1986 election calendar.

B. Motion for Leave to File Second Amended Complaint

Plaintiffs seek to amend their complaint to add a sixth claim alleging that defendants' conduct of the 1986 county committee elections violated both the interim final regulations and the May 22 procedure notice. The proposed second amended complaint also contains a new paragraph of factual allegations relating to count six and a demand for a preliminary injunction.

Leave to amend a pleading should be "freely given when justice so requires." Fed.R.Civ.P. 15(a); Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). Defendants do not oppose amendment per se, but argue that the addition of count 6 and the supporting allegations in paragraph 51 would be futile because plaintiffs lack standing to assert count 6. Defendants' standing argument is fact-related and more appropriately considered on a motion for summary judgment. The motion for leave to amend should therefore be granted.

C. Motion for Class Certification

Plaintiffs seeking to represent a class have the burden of establishing that they are entitled to class certification under Rule 23 of the Federal Rules of Civil Procedure. E.g. Smith v. Merchants & Farmers Bank, 574 F.2d 982, 983 (8th Cir.1978). Two requirements not expressly stated in Rule 23 are implicit: a "class" must exist, e.g. Roman v. ESB, Inc., 550 F.2d 1343, 1348 (4th Cir.1976), and the class representatives must be members of the class. E.g. Smith v. Board of Education, 365 F.2d 770, 777 (8th Cir.1966). See also General Telephone Co. v. Falcon, 457 U.S. 147, 156, 102 S.Ct. 2364, 2370, 72 L.Ed.2d 740 (1982) ("a class representative must be part of the class and `possess the same interest and suffer the same injury' as the class members.") The plaintiffs must also show that

(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed.R.Civ.P. 23(a). In addition, the class must satisfy one of the subdivisions of Rule 23(b). Here, plaintiffs assert that

the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole....

Fed.R.Civ.P. 23(b)(2)

1. Existence of a Class

Plaintiffs seek certification of a single class, but their proposed class description appears to identify both a class and two subclasses. The proposed class would include all Minnesota farmers entitled to vote in FmHA elections. The two apparent subclasses would include (1) Minnesota farmers who wished to run for committee positions but were ineligible under 7 C.F.R. § 2054.1104(d) and (f) and (2) Minnesota farmers who wished to run or to nominate a candidate for committee positions, but were unable to do so because they could not satisfy the nomination requirements within the five days provided under the May 22, 1986 procedure notice. For present purposes, the court considers only whether plaintiffs can maintain a class of

All farmers in the State of Minnesota who

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