Olenhouse v. Commodity Credit Corp., 89-1029-PFK.
| Citation | 807 F. Supp. 688 |
| Decision Date | 12 November 1992 |
| Docket Number | No. 89-1029-PFK.,89-1029-PFK. |
| Court | United States District Courts. 10th Circuit. United States District Courts. 10th Circuit. District of Kansas |
| Parties | Don OLENHOUSE, Alan Sharp and John Rubow, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. COMMODITY CREDIT CORPORATION; Richard Lying, Secretary of the United States Department of Agriculture; Milton Hertz, National Administrator of Agricultural Stabilization and Conservation Service; Frank Mosier, State Director of Agricultural Stabilization and Conservation Service for the State of Kansas; Julius Johns, Chairman and Member of the State Committee for the Agricultural Stabilization and Conservation Service for the State of Kansas; and David Stokebrand and Jim Carpenter, Members of the State Committee for Agricultural Stabilization and Conservation Service for the State of Kansas, Defendants. |
Karen K. McIlvain, Madison, KS, for plaintiffs.
Lee Thompson, U.S. Atty., and Stephen K. Lester, Asst. U.S. Atty., Wichita, KS, for defendants.
The present case comes to this court for review of a final administrative agency decision by the Agricultural Stabilization Conservation Services (ASCS). Plaintiffs received reduced deficiency payments for their wheat crop pursuant to a decision by the ASCS. Defendants moved to affirm this administrative agency's decision, and plaintiffs moved for summary judgment claiming that the decision was unsupported by fact and unwarranted by law.
Plaintiffs, Don Olenhouse and Alan Sharp, planted wheat in September of 1986. At the end of September and throughout October of that same year, Wilson County received over 25 inches of rain and President Reagan declared it a disaster county. Plaintiffs' wheat was destroyed by the floods.
On November 22, 1986, Mr. Olenhouse replanted parts of the fields that had been flooded. Mr. Sharp did the same with his fields in December of 1986. Mr. Olenhouse planted more of his fields on January 8, 1987 and finished in February, 1987. Mr. Sharp finished his fields in March of 1987. Another plaintiff, Mr. Rubow, finished planting in March as well due to the earlier flooding.
There is a factual dispute concerning the plaintiffs' knowledge of yield reductions. Plaintiffs claim that the ASCS County Committee did not tell them that the time of planting would result in reductions in yields. They also claim that they had no notice that the ASCS County Committee had set an end planting date in Wilson County.1 Defendants argue that a notice concerning the possibility of such yield reductions in cases where different practices are used was mailed on November 12, 1986 and again on December 1, 1986. Defendants further point out that the end planting date of November 30, 1986 for Wilson County was clearly set forth in ASCS Handbook 5-PA, Rev. 7.
On December 8, 1986, the county committee reviewed 5-PA, Rev. 7, ¶ 414, and found that yield reductions would not be appropriate because any changed practices were due to reasons beyond the producers' control. Plaintiffs argue that Notice PA-1112, which more explicitly allows for reductions in deficiency payments, was not received in the Wilson County ASCS Office until January 9, 1987. Plaintiffs point out that it was not until April 4, 1987 that the state director, Mr. Mosier, indicated that yields would be reduced for excessively late planting.
On October 5, 1987, the district director recommended yield reductions of 25% for wheat planted in January, 50% if planted in February, and 100% for wheat planted in March. Plaintiffs argue that they received no notice or information concerning the method by which these reductions were calculated. They also claim that the calculations were arbitrary and lacked scientific foundation.
Defendants moved for summary judgment asking this court to affirm the decision of the administrative agency in its reduction of the deficiency payments made to plaintiffs. Plaintiffs moved for summary judgment claiming that the agency decision is not supported by substantial evidence and that plaintiffs are entitled to judgment.
When reviewing an administrative agency's final decision, 5 U.S.C. § 706(2)(A) directs the reviewing court to use the arbitrary and capricious standard of review. The court must uphold the agency's findings and conclusions unless they are found to be arbitrary and capricious, and the court may not substitute its judgment for that of the agency. Motor Vehicle Mfrs. Ass'n of the U.S., Inc. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983); 5 U.S.C. § 706(2)(A). The question before this court is whether or not the administrative agency's findings were arbitrary and capricious in light of the facts before them.
The U.S. Secretary of Agriculture must make deficiency payments available to producers participating in the wheat program. 7 U.S.C. § 1445b-3(c)(1)(A). The amount of any deficiency payment shall be reduced to reflect reductions in yield which are the result of causes other than a natural disaster, such as a change in farming practice. 7 C.F.R. 713.6(c).
Plaintiffs argue that the information they received and relied on indicated that they would receive full deficiency payments. Plaintiffs cite their applications for disaster credit and the letter from the local office which said that disaster credit was available to suggest that they would get full deficiency payments. Plaintiffs claim they were never told the contrary until December of 1987, virtually a full year after they planted the wheat. Defendants argue that reasonable farmers would not have relied on such information.
Defendants submit that on November 12, 1986 and December 1, 1986, a notice of yields and acreage bases was mailed informing farmers that yields may be reduced if practices differ from those normally followed. Also, defendants point out that the plaintiffs knew or should have known, from the ASCS Handbook, that November 30, 1986 was the end planting date. To plant beyond this time was not normal practice and therefore could be covered by the notice mailed to them.
Thus, although plaintiffs present many sound arguments for lack of notice, the plaintiffs did have some notice and this court cannot find that the agency's finding of adequate notice was arbitrary and capricious.
Plaintiffs argue that after being informed of the agency's decision, the reconsideration sought through the Deputy Administrator, State and County Operations (DASCO), was fraught with due process problems. Hearings were by phone, one allegedly by a secretary, not a hearing officer. The state committee's records were incomplete and inaccurate. DASCO found that plaintiffs were informed about the payment yields and that the correct procedures were used to determine reductions in yields.
7 U.S.C. § 1469 requires the Secretary of Agriculture to establish an appeal procedure which provides for administrative review of any determinations made with respect to farm acreage basis, crop acreage basis, and farm program payment yields. The regulations provide for an informal hearing at both the state committee and deputy administrator levels. 7 C.F.R. 780.4 & 780.5 (1987). The reviewing authority shall prepare a written record containing a clear statement of the facts found by the reviewing authority. 7 C.F.R. 780.8(d).
Plaintiffs argue that the record did not contain the specific reasons for the committees' findings or decisions. The plaintiffs did, however, present the argument to both the county and state committees. The administrative agency found that the appeals procedure had been followed and that both the county and state committees used the proper procedures. The regulation in question merely requires that the committee or agency prepare a written record with a clear statement of the facts presented to it and a clear statement of the material facts found by the reviewing authority. 7 C.F.R. § 780.8(d). The administrative agency found no procedural violations by either the county or state committees, and set forth the facts presented and the basis for its conclusions.
Thus, any argument that the administrative agency violated plaintiffs' due process rights is unfounded in light of the record and the regulations.
Plaintiffs cite 7 C.F.R. § 790.2, which states that performance "in reliance upon action or advice of any authorized representative of a county committee ... may be accepted by the ASCS as meeting the requirements of the applicable program." (Emphasis added.) Because the county commissioner failed to tell them about an end planting date, plaintiffs argue that the government should be effectively estopped from demanding compliance with governmental regulations. The problem with plaintiffs' argument is that the section cited says "may" not "shall." In this case, the government argues that because the farmers should have known that planting wheat in January and February was beyond the acceptable period, any representations made by the county commissioner to the contrary were not reasonable to follow. It is, therefore, within the government's...
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Olenhouse v. Commodity Credit Corp., 93-3012
...attributing this interpretation to the agency, and affirming the interpretation as the agency's own. See Olenhouse v. Commodity Credit Corp., 807 F.Supp. 688, 692-93 (D.Kan.1992). While it found the Farmers' arguments regarding misinformation "persuasive" and opined they "may have a stronge......