MSM Farms, Inc. v. Spire

927 F.2d 330, 1991 WL 22952
CourtCourt of Appeals for the Eighth Circuit
DecidedFebruary 27, 1991
DocketNo. 90-1300
StatusPublished
Cited by16 cases

This text of 927 F.2d 330 (MSM Farms, Inc. v. Spire) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MSM Farms, Inc. v. Spire, 927 F.2d 330, 1991 WL 22952 (8th Cir. 1991).

Opinion

LARSON, Senior District Judge.

In 1982, Nebraska voters adopted article XII section 8 of the Nebraska Constitution through Nebraska’s initiative and referendum process. The objective of the initiative was to prohibit non-family farm corporations from owning and operating Nebraska farm and ranch land. In 1988, plaintiff MSM Farms, a Nebraska corporation with unrelated shareholders, sought a declaration that article XII section 8 violates the equal protection and due process clauses of the fourteenth amendment of the United States Constitution. The district court1 upheld the law. We affirm.

[332]*3321. EQUAL PROTECTION

The equal protection clause of the fourteenth amendment provides that no state shall “deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const, amend. XIV, § 1. A corporation such as MSM Farms is a “person” under the equal protection clause. Pembina Consolidated Silver Mining & Milling Co. v. Pennsylvania, 125 U.S. 181, 189, 8 S.Ct. 737, 741, 31 L.Ed. 650 (1888). MSM argues article XII section 8 of the Nebraska Constitution denies it equal protection because the law’s prohibition of non-family corporate farming is not rationally related to achieving any legitimate state purpose.

We begin our analysis with the presumption that the law, which involves no suspect classifications or fundamental rights, is constitutional. See Kadrmas v. Dickinson Public Schools, 487 U.S. 450, 462, 108 S.Ct. 2481, 2489, 101 L.Ed.2d 399 (1988); New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976). Social and economic measures, like the corporate farming prohibition in this case, run afoul of the equal protection clause only when “the varying treatment of different groups or persons is so unrelated to the achievement of any combination of legitimate purposes that we can only conclude that the legislature’s actions were irrational.” Kadrmas, 487 U.S. at 463, 108 S.Ct. at 2489 (citing Vance v. Bradley, 440 U.S. 93, 97, 99 S.Ct. 939, 943, 59 L.Ed.2d 171 (1979)).

States are accorded wide latitude in the regulation of their local economies under their police powers, and rational distinctions may be made with substantially less than mathematical exactitude.... [I]n the local economic sphere, it is only the invidious discrimination, the wholly arbitrary act, which cannot stand consistently with the Fourteenth Amendment.

Dukes, 427 U.S. at 303-04, 96 S.Ct. at 2517.

In determining whether the people of Nebraska acted in a wholly arbitrary or irrational way in adopting the constitutional provision MSM has challenged, we look first to whether a legitimate state purpose exists for the law voters approved. Because the law was adopted through the initiative and referendum process,2 there is little traditional legislative history regarding its purpose. See Omaha National Bank v. Spire, 223 Neb. 209, 389 N.W.2d 269, 279 (1986). Cf. Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 465, 467, 468, 470, 101 S.Ct. 715, 724, 725, 726, 727, 66 L.Ed.2d 659 (1981) (citing legislative debates). Noting that the Nebraska law is similar to the statutory provisions adopted by eight other midwestern states, amici3 contend Nebraska’s objectives are similar to those explicitly set forth in the legislation of these other states.4 Amici cite as an example Minn.Stat. § 500.24(1), which states that

it is in the interests of the state to encourage and protect the family farm as a basic economic unit, to insure it as the most socially desirable mode of agricultural production, and to enhance and promote the stability and well-being of rural society ... and the nuclear family.

Minn.Stat. § 500.24(1). See also S.D.Codified Laws Ann. § 47-9A-1.

Defendant-intervenors Everett Holstein and Richard Bartek, Nebraska farmers for over twenty years and supporters of the initiative, contend that the Nebraska law was intended to address the social and economic evils supporters perceived as related to corporate farming. According to evidence presented by defendant-intervenors, supporters of the Nebraska initiative believed that a rise in corporate farming in Nebraska would lead to the decline of the [333]*333family farmer, who would be unable to compete fairly with the ability of corporations to raise capital and benefit from the tax laws. Supporters further maintained that corporate farming would lead to absentee landowners and tenant operation of farms, would adversely affect the rural social and economic structure, and would result in decreased stewardship and preservation of soil, water, and other natural resources. See generally Affidavit of George William Burrows, J.A. 267-274; Affidavit of Neil Oxton, J.A. 285-292; Affidavit of Martin Douglas Strange, J.A. 326-328, and attached studies prepared by the Center for Rural Affairs, J.A. 329-438.

Defendant-intervenors presented reports prepared by the Agricultural Extension Services of the North Central Region5 which reflect this country’s historical reliance on family or dispersed farm ownership. See University of Illinois at Urbana-Champaign College of Agriculture Cooperative Extension Service, Special Publications 27 & 28, “Who Will Control U.S. Agriculture?” J.A. 196-232. These reports suggest that not only would family farmers find their situation vastly changed if concentrated or corporate farming were to prevail throughout the country, but that firms supplying the farmer/producer, firms marketing and processing farm products, rural communities, and consumers would also be affected. See, e.g., id., Special Publication 27 at 16-17, J.A. 220-221.

In determining the purpose of the Nebraska initiative prohibiting non-family corporate farming, the district court turned to the language of the initiative petition itself. The court concluded that Nebraska voters sought to retain and promote family farm operations in Nebraska and sought to prevent a perceived threat that would stem from unrestricted corporate ownership of Nebraska farm land by preventing the concentration of farmland in the hands of non-family corporations. We agree with the district court that such a policy represents a legitimate state interest under the equal protection clause. Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 245, 104 S.Ct. 2321, 2331, 81 L.Ed.2d 186 (1984); Asbury Hospital v. Cass County, 326 U.S. 207, 214-15, 66 S.Ct. 61, 64-65, 90 L.Ed. 6 (1945). See State ex rel. Webster v. Lehndorff Geneva, Inc.,

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Msm Farms, Inc. v. Spire
927 F.2d 330 (Eighth Circuit, 1991)

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Bluebook (online)
927 F.2d 330, 1991 WL 22952, Counsel Stack Legal Research, https://law.counselstack.com/opinion/msm-farms-inc-v-spire-ca8-1991.