Saltzman v. Farm Credit Services of Mid-America, ACA

• Decision Date: 09 December 1991
• Docket Number: AC,MID-AMERIC,D,No. 90-3542,90-3542
• Citation: 950 F.2d 466
• Parties: Jon E. SALTZMAN and Paul E. Saltzman, Plaintiffs-Appellants, v. FARM CREDIT SERVICES OFefendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 466

950 F.2d 466

Jon E. SALTZMAN and Paul E. Saltzman, Plaintiffs-Appellants, v. FARM CREDIT SERVICES OF MID-AMERICA, ACA, Defendant-Appellee.

No. 90-3542.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 15, 1991.

Decided Dec. 9, 1991.

Paul J. Wallace, Bowers, Harrison, Kent & Miller, Evansville, Ind. and Eugene F. Mooney (argued), Mooney, Mooney & Mooney, Lexington, Ky., for plaintiffs-appellants.

R. Stephen LaPlante (argued), Stone, Keck, LaPlante & Folz, Evansville, Ind., for defendant-appellee.

Before BAUER, Chief Judge, and POSNER and FLAUM, Circuit Judges.

FLAUM, Circuit Judge.

This is a case of first impression in this Circuit. The sole issue on appeal is whether an implied private right of action is available for alleged violations of the Agricultural Credit Act of 1987 (the Act), 12 U.S.C. §§ 2001 to 2279aa-14 (1988). Following decisions in the Eighth, Ninth, and Tenth Circuits, the district court found no implied private right of action under the Act and granted defendant's motion to dismiss. We now join these circuits and affirm the decision of the district court.

Jon and Paul Saltzman, owners of a farm in Indiana, sought to restructure their farm loans with Farm Credit Services of Mid-America (the lender). Both the lender and its farm credit review committee denied the application for restructuring and eventually the Saltzmans lost their farm through foreclosure. The Saltzmans here assert that, in denying their application, the lender failed to comply with borrowers' rights provisions in the Act that give farmers certain protections. Thus, they seek to enforce the Act by private right of action.

Three circuit courts of appeal have concluded that no express or implied private right of action exists under the Act. See Zajac v. Federal Land Bank, 909 F.2d 1181 (8th Cir.1990) (en banc); Griffin v. Federal Land Bank, 902 F.2d 22 (10th Cir.1990); Harper v. Federal Land Bank, 878 F.2d 1172 (9th Cir.1989), cert. denied, 493 U.S. 1057, 110 S.Ct. 867, 107 L.Ed.2d 951 (1990). Two district courts in this Circuit (in addition to the district court in this case) have concurred. Walker v. Federal Land Bank, 726 F.Supp. 211 (C.D.Ill.1989); Hartman v. Farmers Production Credit Ass'n, 628 F.Supp. 218 (S.D.Ind.1983). ¹ Because these decisions provide extensive analysis of the issue, we limit our discussion to the essentials.

In Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), the Supreme Court delineated a four-part test for determining whether one may imply a private right of action under federal legislation: (1) Is the plaintiff one of the class for whose especial benefit the statute was enacted? (2) Is there any indication of legislative intent, explicit or implicit, to create or deny a remedy? (3) Is it consistent with the underlying purpose of the legislative scheme to imply a remedy? (4) Is the cause of action one traditionally relegated to state law so that it would be inappropriate to infer a federal cause of action? Id. at 78, 95 S.Ct. at 2088. Although the continuing vitality of Cort's four-prong analysis has been questioned, Thompson v. Thompson, 484 U.S. 174, 188, 108 S.Ct. 513, 520-21, 98 L.Ed.2d 512 (1988) (Scalia, J., concurring), recent cases have continued to rely on it. See id. at 179, 108 S.Ct. at 516. Nonetheless, the Court has effectively converted the second factor, congressional intent, into the linchpin of its analysis, employing the remaining factors to simply shed light on intent. See id.; Universities Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 771-72, 101 S.Ct. 1451, 1461-62, 67 L.Ed.2d 662 (1981); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 23-24, 100 S.Ct. 242, 249, 62 L.Ed.2d 146 (1979); Touche Ross & Co. v. Redington, 442 U.S. 560, 575-76, 99 S.Ct. 2479, 2489, 61 L.Ed.2d 82 (1979). "The intent of Congress remains the ultimate issue ... and 'unless this congressional intent can be inferred from the language of the statute, the statutory structure, or some other source, the essential predicate for implication of a private remedy simply does not exist.' " Thompson, 484 U.S. at 179, 108 S.Ct. at 516 (quoting Northwest Airlines, Inc. v. Transport Workers, 451 U.S. 77, 94, 101 S.Ct. 1571, 1582, 67 L.Ed.2d 750 (1981)).

In the present case, the Saltzmans maintain that, although the Act provides some administrative remedies to ensure compliance with its provisions, Congress nonetheless intended to create an implied private right of action to supplement enforcement. In floor debate a handful of representatives expressed agreement with this position, see, e.g., H.R. 3030, 100th Cong., 1st Sess., 133 Cong.Rec. 7638, 7692-93 (Sept. 21, 1987) (statements of Reps. Watkins and De La Garza referring to the Farm Credit Act of 1971), and the Saltzmans offer this evidence as the nub of their case. However, other evidence is far more probative of congressional intent. Most telling, Congress chose to delete a proposed private right of action provision from the final version of the Act, see H.R. 3030, 100th Cong., 1st Sess. 178, 133 Cong.Rec. 11820 (Dec. 18, 1987). This vote was taken against the backdrop of numerous court decisions (interpreting the Farm Credit Act of 1971) concluding no private right of action was implied, see, e.g., Bowling v. Block, 785 F.2d 556, 557 (6th Cir.), cert. denied, 479 U.S. 829, 107 S.Ct. 112, 93 L.Ed.2d 60 (1986); Smith v. Russellville Production Credit Ass'n, 777 F.2d 1544, 1548 (11th Cir.1985) (1971 Act and regulations); Hartman, 628 F.Supp. at 222, which further suggests that Congress chose to ratify this judicial determination when adopting the 1987 Act. "The normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific." Midlantic Nat'l Bank v. New Jersey Dep't of Envtl. Protection, 474 U.S. 494, 501, 106 S.Ct. 755, 759, 88 L.Ed.2d 859 (1986). Had it been so inclined, Congress could have...