Singh v. Fed. Crop Ins. Corp.

Decision Date27 December 2018
Docket NumberCase No. 1:17-cv-01373-SAB
PartiesKEWAL SINGH, Plaintiff, v. FEDERAL CROP INSURANCE CORPORATION, Defendant.
CourtU.S. District Court — Eastern District of California

KEWAL SINGH, Plaintiff,
v.
FEDERAL CROP INSURANCE CORPORATION, Defendant.

Case No. 1:17-cv-01373-SAB

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

December 27, 2018


ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

(ECF Nos. 21, 22, 23, 24)

I.
INTRODUCTION

This is an action for judicial review under the Administrative Procedure Act, 5 U.S.C. § 701, et seq., of final agency action relating to the federal crop insurance program. Plaintiff seeks review of the good farming practices determination pertaining to Plaintiff's 2015 almond crop. Currently before the Court are the parties' cross-motions for summary judgment. The Court heard oral arguments on December 12, 2018. (ECF No. 25.)1 Counsel Tracy Agrall appeared for Plaintiff Kewal Singh ("Singh" or "Plaintiff"), and counsel Benjamin E. Hall appeared for Defendant Federal Crop Insurance Corporation ("FCIC" or "Defendant"). (Id.) Having considered the moving, opposition and reply papers, the declarations and exhibits attached thereto, arguments presented at the December 12, 2018 hearing, as well as the Court's file,

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Plaintiff's motion for summary judgment is DENIED, and Defendant's motion for summary judgment is GRANTED.

II.
BACKGROUND

A. Procedural History

On October 12, 2017, Plaintiff filed this action seeking judicial review and declaratory relief under the Administrative Procedure Act ("APA"). (ECF No. 1.) On December 22, 2017, Defendant filed an answer. (ECF No. 9.) On February 6, 2018, pursuant to U.S.C. § 636(c)(1), the parties consented to the jurisdiction of the undersigned magistrate judge to conduct all proceedings in this matter, including trial and entry of final judgment. (ECF Nos. 14, 15.) On April 26, 2018, Defendant lodged the Administrative Record with the Court. (ECF No. 19.) On July 23, 2018, Plaintiff filed a motion for summary judgment. (ECF No. 21.) On August 22, 2018, Defendant filed an opposition to Plaintiff's motion for summary judgment and a cross-motion for summary judgment. (ECF No. 22.) On September 19, 2018, Plaintiff filed a reply brief in support of his motion for summary judgment and in opposition to Defendant's cross-motion for summary judgment. (ECF No. 23.) On October 3, 2018, Defendant filed a reply in support of Defendant's cross-motion for summary judgment. (ECF No. 24.) The Court heard oral arguments on December 12, 2018. (ECF No. 25.)

B. Plaintiff's Allegations in the Complaint

Plaintiff was engaged in almond farming in the County of Fresno, California, during the time period relevant to this matter. (Compl. ¶ 1, ECF No. 1.) Under the Federal Crop Insurance Act, crop insurance is available through private approved insurance providers ("AIP(s)"), with such policies reinsured and regulated by the Defendant, FCIC. (Compl. ¶ 5.) The FCIC is a government owned corporation managed by the U.S. Department of Agriculture ("USDA"), and the Risk Management Agency ("RMA"). (Compl. ¶¶ 2, 5.)

In 2015, Plaintiff's almond orchard was covered by a certain crop insurance policy insuring production and revenue for the crop, bearing Crop Insurance Policy No. MP-03923094. (Compl. ¶ 7.) The Policy insured the 194-acre almond crop against drought, heat, and other

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natural causes of crop failure. (Id.) During the 2015 crop season, the Central Valley of California experienced severe heat conditions which allegedly caused Plaintiff to suffer insurable losses to his almond crop, and Plaintiff timely submitted a claim to Rain and Hail Insurance Service ("RHIS"), an AIP, on April 6, 2015. (Id.)

On April 29, 2016, RHIS denied Plaintiff's insurance claim, finding that a lack of adequate irrigation severely affected the production for the 2015 crop year. (Compl. ¶ 9.) On July 1, 2016, Plaintiff requested a good farming practices ("GFP") determination from RMA. (Compl. ¶ 11.) On October 13, 2016, RMA upheld RHIS's assessment that Plaintiff did not follow good farming practices due to his failure to provide irrigation water to the almonds at appropriate times and amounts in the 2014 crop year, which in turn impacted the 2015 crop. (Id.)

Following RMA's determination, Plaintiff filed a complaint in the above-entitled court on October 12, 2017, seeking judicial review and declaratory relief pursuant to the APA and the Federal Crop Insurance Act, 7 U.S.C. § 1501 et seq. (Compl. ¶ 5.) In summary, Plaintiff argues that Defendant improperly denied crop insurance indemnity for Plaintiff's 2015 crop under the federally reinsured crop insurance policy. (Compl. ¶ 6.) Plaintiff seeks relief under the APA asserting the agency's GFP determination is in contradiction of the evidence of record, is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. (Compl. ¶¶ 16-17.) Plaintiff also seeks a declaration that: 1) Plaintiff suffered crop loss due to insured natural causes and therefore is entitled to coverage under the policy; 2) Plaintiff's crop loss is not due to lack of good farming practices; 3) Plaintiff is entitled to payment of its 2015 crop insurance claim and the indemnity shall be due and payable; and 4) Defendant's good farming practice determination was arbitrary and capricious. (Compl. ¶ 24.)

C. Factual Background in the Administrative Record

The following subsections outline the facts contained in the administrative record that are most relevant to the Court's review of the agency's GFP determination.

1. RHIS Insurance Adjuster Site Visits

After Plaintiff filed his insurance claim, the RHIS adjuster visited the orchard multiple

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times. On April 24, 2015, the adjuster noted: "Visited ranch for GSI. Definite payable. Crop is light. Will appraise in May/June."2 (Administrative Record ("AR") 341.) On June 12, 2015, the adjuster noted: "Looks like trees haven't had water for some time. Crop is definitely very light . . . Don't know what's going on with water issue here. Need to speak to grower. A lot of trees are dying." (Id.) On June 16, 2015, the adjuster noted: "Spoke to grower. He says he's been irrigating again a few days ago." (AR 342.)

The entry for July 7, 2015, states "Spoke to insured. He said he's continuing to farm almonds, irrigating, etc." (Id.) On July 9, 2015, the adjuster noted: "Visited ranch. Looks like its [sic] been abandoned. No evidence of recent irrigation." (Id.) On August 7, 2015, the adjuster noted: "Visited ranch again. Very bad. Possibly 80% of orchard is dead or at point of no return. No evidence of recent irrigation. Took photos." (Id.) On September 3, 2015, the adjuster noted: "Called & spoke to insured. Requested input records again. He says already harvested crop, around 30,000 lbs. total. Only about 150 lbs/a." (AR 343.)

The RHIS adjuster also took photographs of Plaintiff's almond orchard and the neighboring orchard owned by another farmer. The photos include: 1) the neighboring orchard on June 18, 2015 (AR 296-97); 2) Plaintiff's orchard, irrigation equipment, and utility meter, on June 12 and June 18, 2015 (AR 306-337); 3) a picture of Plaintiff's orchard on one side with the neighboring almond orchard on the other side on June 18, 2015 (AR 338-339); and 4) Plaintiff's orchard on August 7, 2015 (AR 298-305).

2. RHIS's Denial of Plaintiff's Insurance Claim

On April 29, 2016, RHIS denied Plaintiff's claim asserting that he had not properly irrigated the orchard in 2014 and such lack of adequate water had affected the crop production for the 2015 crop year. (AR 283-85.) The RHIS denial stated in relevant part:

Your irrigation well was not operating during the winter and spring months and personal observations during the year by the adjuster and myself showed lack of sufficient water application to produce a crop at the guaranteed level. Almond trees with the use of micro sprinklers require the annual application of 4.36 ac/ft. of water. We have not been able to confirm application of water post-harvest

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2014, through the winter months nor adequate amounts throughout the year. Although there was a heat event in March of 2014 [sic], it was not to the degree that would cause the lack of crop you are claiming as a standalone event . . .

. . . Therefore . . . [RHIS] must deny your claim for loss to your almond crop. The lack of adequate irrigation severely affected the crop production for the 2015 crop year. Which [sic] has prevented RHIS from determining any actual losses due to weather related production losses. Therefore, RHIS must appraise your crop at the full guarantee as per the policy procedures for not following good farming and irrigation practices under the USDA, FCIC program . . .

. . . As found in the Common Crop Insurance Policy . . . If you disagree with our decision of what constitutes a good farming practice, you must request a determination from FCIC of what constitutes a good farming practice before filing any suit against FCIC.

(AR 283-84.) Following a request for reconsideration, RHIS upheld its denial of Plaintiff's claim on June 6, 2016. The letter repeated much of the language in the original April 29, 2016 denial letter, and also stated:

We have reviewed the documents provided and have determined that based on your lack of adequate irrigation for your almond acreage in 2013 and 2014 contributed [sic] to the lack of almonds produced in the crop year 2015. This is not an insurable covered peril and therefore your claim must remain denied for failure to follow recognized good farming practices for the insured crop and failure to carry out a good irrigation practice for the insured crop . . . Almond trees with the use of micro sprinklers require the annual application of 4.36 ac/ft. of water. Based on the irrigation information that you provided for our review, it confirms that you only applied 2.24 ac/ft in crop year 2014 and 2.36 ac/ft in crop year 2014. Although there was a heat event in March of 2015, it was not to the degree that would cause the lack of crop you are claiming as a
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