Jones v. Hughes

• Decision Date: 16 September 1968
• Docket Number: No. 19095,19096.,19095
• Citation: 400 F.2d 585
• Parties: C. B. JONES, Fred W. Koch, and John H. Simpson, Marketing Quota Review Committee, United States Department of Agriculture, Agricultural Stabilization and Conservation Service, Appellants, v. Lawson HUGHES, Appellee. C. B. JONES, Fred W. Koch, and John H. Simpson, Marketing Quota Review Committee, United States Department of Agriculture, Agricultural Stabilization and Conservation Service, Appellants, v. LINDSEY BROS., a Partnership, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

400 F.2d 585 (1968)

C. B. JONES, Fred W. Koch, and John H. Simpson, Marketing Quota Review Committee, United States Department of Agriculture, Agricultural Stabilization and Conservation Service, Appellants, v. Lawson HUGHES, Appellee.

C. B. JONES, Fred W. Koch, and John H. Simpson, Marketing Quota Review Committee, United States Department of Agriculture, Agricultural Stabilization and Conservation Service, Appellants, v. LINDSEY BROS., a Partnership, Appellee.

Nos. 19095, 19096.

United States Court of Appeals Eighth Circuit.

September 16, 1968.

Robert V. Zener, Atty., Dept. of Justice, Washington, D. C., for appellants; Edwin L. Weisl, Jr., Asst. Atty. Gen., Dept. of Justice, Washington, D. C., Alan S. Rosenthal, Atty., Dept. of Justice, Washington, D. C., and W. H. McClellan, U. S. Atty., Little Rock, Ark., on the brief.

E. J. Butler, Forrest City, Ark., for appellees; Phil Hicky, Forrest City, Ark., on the brief.

Before VAN OOSTERHOUT, Chief Judge, HEANEY, Circuit Judge, and REGISTER, Chief District Judge.

HEANEY, Circuit Judge.

The principal issue presented on this appeal is: Does a determination by personnel of a county (ASCS) office that the appellees were in compliance with their cotton acreage allotment bar a redetermination of that compliance? The District Court held that it did. Lindsey Bros. v. Jones, 271 F.Supp. 933 (E.D. Ark.1967). We hold to the contrary.

The secondary issue is: Are the appellees nevertheless protected against the effects of an adverse redetermination by the "erroneous notice" provision of regulations promulgated by the Secretary of Agriculture pursuant to the Act? 7 C.F.R. § 718.10(b) (1964 ed.). The District Court did not reach this issue. We hold that each producer is partially protected.

Under the Agricultural Adjustment Act of 1938, 7 U.S.C. § 1281 et seq. (1964 ed.), cotton acreage allotments are established for each farm by a county committee. Each farm on which cotton is produced is measured to ascertain whether the acreage planted is within the allotment. 7 U.S.C. § 1374(a).

The Secretary, pursuant to authority granted in the Act, 7 U.S.C. § 1375, promulgates regulations which establish the procedure to be followed by the county committee in securing compliance. 7 C.F.R. §§ 718.1-718.15. They provide that after an allotment has been established, each farm shall be visited by a crop reporter for the purpose of obtaining a report of acreage. 7 C.F.R. §§ 718.7-718.8; 722.6. This report is signed by the farm operator, 7 C.F.R. § 718.8 (a), and from it, personnel of the county office determine the acreage and mail notices of their determination to the farmer. 7 C.F.R. §§ 718.9(a); 718.10 (a); 722.6.

When a determination of excess acreage is made,¹ the producer may request a remeasurement, 7 U.S.C. § 1374(c); 7 C.F.R. § 718.13, or plow under the excess.

If the decision is to plow under the excess, a crop reporter revisits the farm after the plowing and reports to the county office. 7 C.F.R. § 718.14. Its personnel determine whether the farmer is then in compliance and notify the producer of its decision. If the county office finds him in compliance, it issues him a farm marketing card. 7 C.F.R. § 722.17.

The regulations further provide that the state or county committee, or the deputy administrator, may at any time require a redetermination of the acreage planted. 7 C.F.R. §§ 718.11; 718.13; 722.46(a). If this redetermination establishes that the producer has over-planted, then the producer (1) may be given the opportunity to plow under the excess, 7 C.F.R. § 718.14(f) (2) (1965 ed.), or (2) may be assessed a penalty. In the latter case, the producer may pay the penalty or request a review by the review committee.

The procedure outlined above was followed with respect to Hughes and the Lindsey Brothers. A crop reporter visited each farm and submitted a report to the county office. A determination was made by the office personnel that excess acreage had been planted on each farm. Both producers elected to comply and purported to do so by plowing under excess acreage. A second crop reporter visited each farm, verified the plow under and again reported to the county office. The office manager notified the appellees, on a "notice of acreage" form that they were in compliance and issued each a "farm marketing card."

More than fifteen days later, a redetermination was made by two supervisory crop reporters of the Hughes' and Lindsey Brothers' farms. They reported that neither had made the required plow under. They also reported that the earlier crop reporters had erred in computing the acreage planted. The office manager, acting on the basis of the reports, notified the appellees that they were not in compliance. The Lindsey Brothers decided against a further plow under. The Hughes' crop had been fully harvested. The county committee assessed penalties.

The appellees appealed to the Marketing Quota Review Committee.² They alleged reliance on the initial notice of compliance and contended that the Department of Agriculture could not in good faith and justice redetermine the issue of their compliance. They did not dispute the accuracy of the acreage planted as found on redetermination, but contended that they had made the plow under.

The review committee viewed the Hughes' and Lindsey Brothers' claims as a request for relief under the provisions of the "erroneous notice" regulation. It held an evidentiary hearing and made findings of fact and conclusions of law. It denied relief on the grounds that the producers had not established facts entitling them to relief under the regulation.

The appellees then sought review of the review committee's decision in the United States District Court.³ The court entered an order reversing and remanding the Lindsey Brothers' case with directions to refund the assessed penalty with interest. It subsequently took similar action in the Hughes' case.

The District Court held, as a matter of law, that the notice of compliance given to each producer became final within fifteen-days from the date the notices were received by the producers. The decision was based on 7 U.S.C. § 1385,⁴ and the decision of this Court in United States v. Kopf, 379 F.2d 8 (8th Cir. 1967), interpreting § 1385. The District Court did not reach the question of whether the appellees were entitled to relief under the provisions of the "erroneous notice" regulation.⁵

I. FINALITY OF THE NOTICE OF COMPLIANCE.

Section 1385 provides, in substance, that the facts constituting the basis for various payments under the programs administered by the Secretary of Agriculture "when officially determined in conformity with the applicable regulations prescribed by the Secretary" shall be final and conclusive and shall not be reviewable by any other officer or agency of the government. The District Court held that the notice of compliance, prepared by the office personnel of the county ASCS office, constituted an official determination in conformity with the applicable regulations and was non-reviewable. We disagree.

The regulations make it clear that an acreage determination by the office personnel is intended to be neither official nor final within the meaning of § 1385. The regulations authorized the Secretary to make a redetermination, and the producer can, if he sees fit, ignore an adverse determination or redetermination until the county committee assesses a penalty.

If the county committee decides to assess a penalty, the producer is mailed a "Notice of Marketing Quota Excess and Penalty Due" form. This form indicates the excess acreage, the normal yield per acre, the marketing excess and the penalty due as a result of this excess.⁶

The regulations give the producer fifteen days to appeal the decision of the county committee assessing the penalty. The appeal application is sent to the county committee for review. If it finds that the relief sought is proper, it is authorized to grant it. 7 C.F.R. § 711.14. If not, it takes the necessary steps to arrange a hearing before the review committee.

At that hearing, the producer is permitted to contest any fact constituting a basis for the imposition of the penalty, 7 C.F.R. §§ 711.14 and 711.21, except those which have "previously been reviewed by a review committee and have become final." 7 C.F.R. § 711.13.

In the light of the regulations, we hold that an official determination, pursuant to the regulations, is not made until the county committee notifies the producer that it has assessed a penalty. It follows that the earlier notice of acreage (compliance) is not final as to a producer or the Department of Agriculture.

The regulations are, in our view, consistent with § 1385. That section cannot be read as giving the status of an official determination to every act of an ASCS employee.

We are also of the opinion that Kopf is not controlling. The rationale of Kopf is that a decision which is final as to a producer should be final as to the Department of Agriculture. Here, the notice of compliance was final as to neither.

In Kopf, the yield determination was made by the county ASCS committee after a full evidentiary hearing. Here, it was made by the personnel of a county ASCS office without a hearing. We also note that the administrative action was of an executive, rather than an adjudicative, nature and was thus not binding in a res judicata sense. K. Davis, Administrative Law § 18.08, p. 602 (1958). See, Pearson v. Williams, 202 U.S. 281, 26 S.Ct. 608, 50 L.Ed. 1029 (1906).

In Kopf, the Court found that the position of the Department of Agriculture was inconsistent with the regulations as a whole. Here, the procedure followed was consistent with the regulations.

Finally, the applicable regulations in Kopf did not provide relief for those who, in good faith, relied on an earlier determination. Here, relief is provided for those who do so in good faith. 7 C.F.R. § 718.10(b).

We also note that the statute and...