Shelley v. United States
| Docket Number | 1:20-cv-505-RAH-KFP [WO] |
| Decision Date | 20 May 2022 |
| Parties | MICHAEL W. SHELLEY, et al., Appellants, v. UNITED STATES OF AMERICA, et al., Appellees. |
| Court | U.S. District Court — Middle District of Alabama |
Michael W. Shelley and Hudson T. Shelley have appealed from the final determinations of the Director of the United States Department of Agriculture's (USDA or the Agency) National Appeals Division that upheld administrative hearing officers' decisions to deny their respective claims for crop disaster payments under the Noninsured Crop Disaster Assistance Program (NAP). The issues have been fully briefed and each party0F[1] has moved for summary judgment. (Docs. 23 26.) For the reasons below, the Shelleys' motion is DENIED, the USDA's motion is GRANTED, and the Director's decisions are affirmed.
I. BACKGROUND
The Shelley family has operated a farm for over 100 years. The current generation of farmers includes Michael, Todd, and Hudson Shelley.
On January 31, 2018, Michael and Hudson, through Todd as power of attorney, separately enrolled certain vegetable crops in NAP for the 2018 growing season at the Jackson County Florida, FSA office. NAP provides financial assistance to farmers of non-insurable crops to protect against natural disasters that result in lower yields or crop losses or prevent crop planting. NAP is administered under the general supervision of the Commodity Credit Corporation and is carried out by the local state and county committees of the FSA. See Mahon v. United States Dep't of Agric., 485 F.3d 1247, 1253 (11th Cir. 2007); 7 C.F.R § 718.2. To avail themselves of program benefits, farmers (called producers in NAP) must submit an application (form CCC-471) and pay a service fee and a premium.
As pertinent to Michael and Hudson, Todd met with Sarita Bryant, the county FSA technician, to enroll their crops. Todd has no recollection of meeting with Bryant or speaking with her about the crop-types he wished to enroll in NAP on behalf of Michael and Hudson. Although he believes he would have orally instructed Bryant to enroll crookneck squash because the Shelley family had grown that croptype for years and because his normal course of practice would have been to tell the technician to enroll all crops, including crookneck squash, Todd acknowledges that it was “possible” that he failed to tell Bryant to enroll crookneck squash.
According to Bryant, she inputted all crop-types1F[2] that Todd verbally identified for her, as was her customary practice. Among the crop-types that she inputted into the system, and therefore on the NAP applications for Michael and Hudson, were two types of squash (summer and zucchini) and two types of watermelon, and as to Michael, two types of greens (collards and turnip).
Crop-types are given unique identifiers in the system and on the NAP application. For example, there are multiple types of squash, each with its own croptype identifier: summer squash as SUM, zucchini squash as ZUC, and crookneck squash as CRK.2F[3]
Under the eleventh column of their NAP applications, summer squash and zucchini squash were separately identified for both Michael and Hudson. Crookneck squash was not. If it had been, it would have been identified on a separate line with a “CRK” designation under column eleven, like the summer squash and zucchini squash designations.
On both applications, Todd signed as power of attorney for Michael and Hudson and further verified that “all information entered on this Application for Coverage (CCC-471), whether or not personally entered by me, is true and correct.” (Doc. 21-1 at 181; Doc. 22-1 at 143.) In signing the applications, he also acknowledged the following: “I acknowledge all of the following . . . the election or buy-up coverage is as shown on this application”; “As provided in statute or regulation, failure to provide true and correct information may result in the invalidation of this application, a determination of noncompliance or ineligibility, or other remedies or sanctions”; “the information will be used to determine eligibility for program benefits in response to an application for coverage”; and that the “producer signing this application applies for coverage on the producer's share of noninsured crop(s) by pay crop/pay type.” (Doc. 21-1 at 181-82; Doc. 22-1 at 14345.)
On July 5, 2018, Michael and Hudson submitted notices of loss (form CCC-576) to the USDA for disaster events associated with their respective crookneck squash crops.
The Jackson County, Florida, FSA office denied their claims via letters dated June 27, 2019, on the ground that, according to their NAP applications, NAP coverage for the crookneck squash had not been purchased by the application closing date of February 28, 2018.
Michael and Hudson jointly appealed to the National Appeals Division through an administrative appeal procedure afforded to them under NAP. A hearing officer was appointed and held a joint hearing on October 16, 2019, and November 5, 2019. The hearing officer issued appeal determinations on December 19, 2019, in which he concluded that the county FSA office's decisions to deny the crop claims were not erroneous.
The Shelleys appealed again, asking for director review. In his decision, the Director addressed the sole issue of whether the Shelleys were entitled to equitable relief. In finding that they were not entitled to such relief, he noted that crookneck squash was not listed on the NAP applications, that Todd had testified that it was possible that he had failed to tell the FSA technician to include crookneck squash on the NAP applications, and that the Shelleys had the responsibility of reviewing their NAP applications and ensuring their accuracy before signing and submitting them for NAP coverage. This decision constituted the USDA's final decision under 7 U.S.C. § 6999.
Summary Judgment is particularly appropriate in cases in which a district court is asked to review a decision rendered by a federal administrative agency. Mahon v. United States Dep't of Agric., 485 F.3d 1247, 1253 (11th Cir. 2007). However, even in the context of summary judgment, an agency action is entitled to great deference. Id.
Judicial review of a final agency determination is governed by the Administrative Procedure Act, which provides in part that a court may set aside an agency's “action, findings and conclusions” if they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law or unsupported by substantial evidence. Id. (citing 5 U.S.C. § 706). See also 7 U.S.C. § 6999; Payton v. United States Dep't of Agric., 337 F.3d 1163, 1167 (10th Cir. 2003).
“To determine whether an agency decision was arbitrary and capricious, the reviewing court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” N. Buckhead Civic Ass'n v. Skinner, 903 F.2d 1533, 1538 (11th Cir. 1990) (internal quotations omitted). The arbitrary and capricious standard is exceedingly deferential, Fund for Animals, Inc. v. Rice, 85 F.3d 535, 541 (11th Cir. 1996), and “[t]he reviewing court is not authorized to substitute its judgment for that of the agency concerning the wisdom or prudence of the” decision, N. Buckhead, 903 F.2d at 1539. “Rather, the ‘task of the reviewing court is to apply the appropriate ... standard of review ... to the agency decision based on the record the agency presents to the reviewing court.” Pres. Endangered Areas of Cobb's History, Inc. v. United States Army Corp of Eng'rs, 87 F.3d 1242, 1246 (11th Cir. 1996) (quoting Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985)) (internal quotation marks omitted).
III. DISCUSSION
The parties have filed opposing summary judgment motions that address two primary issues - whether the Director ignored evidence confirming that the parties intended to include crookneck squash in the NAP application and whether the Director improperly failed to award equitable relief.
The Shelleys first and primarily argue that the Director acted arbitrarily and capriciously in “ignoring analysis of the collateral documents to determine the true intention of the parties.” (Doc. 23 at 24.) In particular, the Shelleys focus on certain post-application documents, including commodity, acreage, and inspection loss reports, which according to them, confirm that they intended to enroll crookneck squash in NAP because all of these documents referenced their crookneck squash crop. They further argue that these documents constitute “collateral documents that should be incorporated into the contract to determine the intentions of the parties regarding the crops to be insured.” (Doc. 23 at 18-19.)
The USDA argues that the Shelleys waived this issue - that is, consideration of certain extrinsic or collateral documents - by failing to raise it with the hearing officer and the Director during the administrative proceedings below. Stated differently, the Shelleys did not properly issue-exhaust the issue.
“Under ordinary principles of administrative law, a reviewing court will not consider arguments that a party failed to raise in [a] timely fashion before an administrative agency.” Mahon v. United States Dep't of Agric., 485 F.3d 1247, 1254-55 (11th Cir. 2007). In Mahon, the Eleventh Circuit held that, due to the adversarial nature of the NAD procedures and for various policy reasons, parties cannot raise new arguments to a district court on appeal from a final NAD decision that were not raised during the course of the administrative proceedings below. Mahon, 485 F.3d at 1256. This holding is...
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