Lyng v. Payne

Decision Date17 June 1986
Docket NumberNo. 84-1948,84-1948
Citation90 L.Ed.2d 921,476 U.S. 926,106 S.Ct. 2333
PartiesRichard E. LYNG, Secretary of Agriculture, et al., Petitioners v. Ronald E. PAYNE et al., etc
CourtU.S. Supreme Court

Under the Consolidated Farm and Rural Development Act, the Secretary of Agriculture has authority to make emergency loans to farmers who suffer economic losses as a result of a natural disaster. Pursuant to a rule of the Farmers Home Administration (FmHA), the Secretary required loan applicants suffering from disasters occurring between December 26, 1972, and April 20, 1973, to file their applications by April 2, 1974. That rule embodied the command of Pub.L. 93-237 to keep such loan programs open at least until that date. During this period, loans were available on terms far more generous than under later versions of the authorizing statute. In 1976, a class action was instituted in Federal District Court, in which respondents represented farmers who had been eligible for loans during this period as the result of a Florida flood occurring in early April 1973, but who, because of lack of notice, had not been aware of their eligibility. It was alleged, inter alia, that the FmHA's failure to publicize the program more fully violated its own regulations, and an injunction was sought to require the FmHA to reopen the loan program. The District Court granted the requested relief, finding that the FmHA, in violation of one of its own regulations, had failed to give adequate notice of the availability of loans, and requiring the agency to reopen the program for the period from April 15, 1981, to June 15, 1981. The Court of Appeals affirmed on different grounds, holding that the FmHA had failed to comply with another regulation that required it to notify the public through the news media of the program's generous terms. After an earlier remand from this Court, the Court of Appeals adhered to its prior views and reinstated its decision, observing that petitioner Government officials' liability was premised on the FmHA's failure to follow its own regulations.


1. The lower courts erred in holding that the Secretary's conduct violated the notice procedures relevant to the implementation of Pub.L. 93-237. Accordingly, even assuming, arguendo, that reopening the loan program would have been an appropriate remedy had the relevant regulations been violated, awarding that relief was clearly improper in light of the FmHA's compliance with its own procedures. The agency's appli- cable regulations provided for press releases to inform the news media of the "provisions of P.L. No. 93-237." Public Law 93-237 itself said nothing about the availability of the generous terms of the loan program, but merely stated that loans with respect to disasters occurring prior to April 20, 1973, would be administered under Pub.L. 92-385, and thus the statement in the FmHA's news releases that "loan applications will be taken under the terms of a new law (P.L. 93-237) enacted January 2, 1974," was no less informative than were the "provisions" of the Act the release was endeavoring to describe. And in light of the history of Pub.L. 93-237 and the regulatory history, the District Court's remedy cannot be supported on the theory that the FmHA violated its earlier notice requirements. Pp. 935-942.

2. Nor can the injunctive relief be supported on the theory that inadequate notice of the loan program deprived the respondents of property without due process of law. Even assuming that respondents had a legitimate claim of entitlement protected by due process, the notice published by the Secretary in the Federal Register after the enactment of Pub.L. 93-237, which notice set out in detail the terms and conditions of the loan program, as well as the notice afforded by the Secretary in full compliance with his own procedures, was more than ample to satisfy any due process concerns. Pp. 942-943.

751 F.2d 1191, reversed.

O'CONNOR, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, WHITE, MARSHALL, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. STEVENS, J., filed a dissenting opinion, post, p. 943.

Bruce N. Kuhlik, Washington, D.C., for petitioners.

Theodore L. Tripp, Jr., Fort Myers, Fla., for respondent.

Justice O'CONNOR delivered the opinion of the Court.

Federal law vests in the Secretary of Agriculture the authority to make emergency loans to farmers who suffer economic losses as a result of a natural disaster. See Consolidated Farm and Rural Development Act (Act), §§ 321-330, 75 Stat. 311, as amended, 7 U.S.C. §§ 1961-1971 (Act). Pursuant to an agency rule, the Secretary required loan applicants suffering from disasters occurring between December 26, 1972, and April 20, 1973, to file their applications by April 2, 1974. 39 Fed.Reg. 7569 (1974) (later codified at 7 CFR § 1832.82(a) (1975)). That rule embodied a statutory command to keep the loan program open at least until that date. Pub.L. 93-237, 87 Stat. 1025. The question presented is whether a federal court has the remedial authority to reopen this long-terminated loan program on the basis of its finding that the Secretary, in alleged violation of another rule, failed adequately to notify affected farmers of the program's availability and terms.


In early April 1973 torrential rains struck 13 counties in the northern part of Florida. Initial estimates, which were later sharply reduced, projected that resulting crop and property losses would be in excess of $3 million. In light of the scope of these anticipated losses, on May 26, 1973, President Nixon declared the region a major disaster area. 38 Fed.Reg. 14800 (1973). See Disaster Relief Act of 1970, Pub.L. 91-606, 84 Stat. 1744 (repealed or transferred 1974). As a result of this declaration, the Secretary of Agriculture came under a statutory obligation to "make loans" to qualifying individuals in the region. 7 U.S.C. § 1961(b) (1970 ed., Supp. III).

At the time of the declaration, the federal disaster relief program, like much of the rest of the Federal Government, had become embroiled in a budgetary dispute between the Executive and Legislative Branches. In 1972, Congress had passed Pub.L. 92-385, 86 Stat. 554, which authorized emergency loans under terms far more generous than those available under later versions of the Act. Under the 1972 law as implemented by the Secretary, loans carried a 1% interest rate and were not conditioned upon the unavailability of alternative sources of credit. In addition, the Secretary was directed to forgive outright up to $5,000 of the principal of the loan. On December 27, 1972, as part of a larger, administration-wide effort to control what were viewed as excessive congressional appropriations, the Secretary directed that regional Farmers Home Administration (FmHA) officials effectively cease processing loan applications. See generally Berends v. Butz, 357 F.Supp. 143 (Minn.1973); Impoundment of Appropriated Funds by the President: Joint Hearings before the Ad Hoc Subcommittee on Impoundment of Funds of the Senate Committee on Government Operations of the Senate Committee on the Judiciary, 93d Cong., 1st Sess., 532 (1973). Aware that the "forgiveness features and low interest rates provided for by Public Law 92-385" had contributed to the unilateral executive decision to curtail the program, Congress attempted to resolve the crisis by repealing those provisions. S.Rep. No. 93-85, p. 1 (1973), U.S. Code Cong. & Admin. News 1973, p. 1285. Public Law 93-24, 87 Stat. 24, which became effective on April 20, 1973, set the interest rate on emergency loans at 5%, limited the availability of loans to those unable to obtain credit from other sources, and eliminated entirely the provision that had previously allowed for cancellation of a portion of the principal. A grandfather clause provided that the terms of the earlier act, Pub.L. 92-385, would remain applicable to disasters designated between January 1 and December 27, 1972.

Left unclear, however, was the status of disasters occurring during the 4-month period between December 27, 1972, and April 20, 1973, the effective date of Pub.L. 93-24. Congress resolved this uncertainty by passing Pub.L. 93-237, the provision at the center of this case. Section 4 of the new Act provided that, "[n]otwithstanding the provisions of Public Law 93-24," loans "with respect to natural disasters which occurred" during this interim period would be governed by the more generous terms of Pub.L. 92-385. In addition, § 10(c) provided that the deadline for applying for a loan would be extended 90 days beyond the date of the enactment of Pub.L. 93-237. This 90-day extension supplanted the established regulatory policy of the Secretary to accept loan applications for crop losses only if filed within nine months of the formal disaster declaration. (For physical losses the deadline was 60 days.) According to the Conference Report, the purpose of the extension was to make sure that the FmHA's "administratively set deadlines" took into account the confusion among farmers concerning the numerous changes in federal disaster relief law in the recent past. S.Conf.Rep. No. 93-363, p. 6 (1973), U.S. Code Cong. & Admin. News 1973, p. 3340. The bill was signed into law on January 2, 1974. Thus, the congressionally mandated 90-day period for loans under Pub.L. 93-237 expired on April 2, 1974.

The Florida flood coincided with this period of confusion in the administration of federal disaster relief. Between May 26, 1973 (the date the disaster was declared), and January 2, 1974 (the date Pub.L. 93-237 became law), the loan program was administered pursuant to the terms of Pub.L. 93-24. Accordingly, during this initial loan period, farmers had nine months, or until February 26, 1974, to submit applications for emergency loans. At the time of the May 26, 1973, Presidential disaster...

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