Olenhouse v. Commodity Credit Corp.

136 F.R.D. 672, 1991 U.S. Dist. LEXIS 6588, 1991 WL 84439
CourtDistrict Court, D. Kansas
DecidedMay 10, 1991
DocketCiv. A. No. 89-1029-T
StatusPublished
Cited by34 cases

This text of 136 F.R.D. 672 (Olenhouse v. Commodity Credit Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Olenhouse v. Commodity Credit Corp., 136 F.R.D. 672, 1991 U.S. Dist. LEXIS 6588, 1991 WL 84439 (D. Kan. 1991).

Opinion

MEMORANDUM AND ORDER

THEIS, District Judge.

Presently before the court is the motion of defendants for dismissal for lack of jurisdiction and the motion of plaintiffs for class certification. This action is against the Secretary of the United States Department of Agriculture (“USDA”) and various officials of federal agencies associated with that Department. Plaintiffs allege violations of the Agricultural Act of 1949, 7 [673]*673U.S.C. §§ 1421 et seq., the Agricultural Adjustment Act of 1938, 7 U.S.C. §§ 1281 et seq., the Food Security Act of 1985, Pub.L. No. 99-198, 99 Stat. 1354, as well as the regulations promulgated under these acts. Plaintiffs also allege an unconstitutional taking of a contractual property interest in violation of the fifth amendment to the United States Constitution.

I. Background

All three plaintiffs are owner and tenant farmers residing in rural areas of Wilson County, Kansas. Plaintiff John Rubow is also a landlord of farmland in this county. Each plaintiff is a participant in a farm price and income support program administered by the Agricultural Stabilization and Conservation Service (“ASCS”), an agency of the Department of Agriculture. Defendant Commodity Credit Corporation (“CCC”) is the entity authorized to provide price support payments to farmers. 7 U.S.C. § 1421 et seq.

A. Statutory and Regulatory Scheme

Pursuant to 16 U.S.C. § 590h(b) (1988), the Secretary is directed to “utilize the services of local and State committees” formed under the aegis of the Secretary for the purpose of administering federal grant-in-aid programs for farmers. Among his duties, the Secretary must “ensure that information concerning changes in Federal laws in effect with respect to agricultural programs and the administration of such laws are communicated in a timely manner to local committees in areas that contain agricultural producers who might be affected by such changes.” Id. § 590h(b) (as amended by Food Security Act of 1985, Pub.L. No. 99-198, § 1711(a), 99 Stat. 1354, 1635-36 (1985)). The ASCS provides these local and state committees with a handbook that sets forth their authority and duties, the policies of ASCS, and how the policies are to be implemented. If a farmer acts in good faith reliance upon the advice of a representative of the State or local committee, the ASCS or CCC may accept such good faith performance as meeting the requirements for the applicable program. 7 C.F.R. §§ 790.2, 791.2 (1991).

The particular price support program at issue in this case concerns “deficiency payments” that are made when the average market price for a crop falls below the target price or loan rate established by the government. Pursuant to 7 U.S.C. § 1445b-3(c)(l)(A) (1988), the Secretary must make available deficiency payments to participating farmers for crops grown in each of the years from 1986 through 1990. One factor entering into the calculation of the amount of these deficiency payments is the “farm program payment yield” for the crop. Id. § 1445b-3(c)(l)(A)(iii). In accordance with 7 U.S.C. § 1446(b)(1), the farm program payment yield for each of the 1986 and 1987 crop years was to be the average of the farm program payment yields for the 1981 through 1985 crop years, excluding the years when such yield was the highest and the lowest.

The regulation implementing the farm program payment yields is located at 7 C.F.R. § 713.6 (1987),1 which provides in part:

For the purpose of determining the amount of any deficiency payment ... or the amount of any disaster payment ... the farm program payment yield for a farm shall be reduced in accordance with instructions issued by the Deputy Administrator to reflect:
(1) Any reduction in the current year’s yield for such farm which is the result of causes other than a natural disaster or other condition beyond the producer’s control, such as a change in farming practice;____

Id. § 713.6(c) (emphasis added). The 1986/87 ASCS Handbook sets forth the circumstances under which the local committees are to reduce the farm program payment yield for purposes of deficiency payments. Paragraph 414A of the Handbook provides that yields should be reduced if: farming practices for the current year have significantly changed; the changed practice would normally result in a sub[674]*674stantially lower yield; there is a lower production than the farm’s normal practices would be expected to produce; and the change was due to reasons within the farmer’s control. Paragraph 414B of the Handbook directs that reductions are not to be made for conditions that are a direct result of a disaster.

Pursuant to his statutory responsibility, the Secretary has established “an administrative appeal procedure which provides for an administrative review of determinations made with respect to farm acreage bases, crop acreage bases, and farm program payment yields.” 7 U.S.C. § 1469 (1988). If a participating farmer is dissatisfied with the local committee’s determination of matters such as farm program payment yields, the person is entitled to a review and informal hearing with first, the State committee, and then the Deputy Administrator. 7 C.F.R. §§ 780.4, 780.5 (1991). At the informal hearing, the producer or his representative is to be given “a full opportunity to present facts and information relevant to the matter in issue and may present oral or documentary evidence.” Id. § 780.8(c). The reviewing authority must then prepare “a written record containing a clear, concise statement of the facts as asserted by the producer or participant and material facts found by the reviewing authority.” Id. § 780.8(d).

B. Plaintiffs’ Factual Allegations

This dispute concerns the dissatisfaction of numerous farmers in Wilson County with the deficiency payments for their 1987 wheat crop. Due to heavy rains in September and October of 1986, wheat that had already been planted was flooded out, and many fields could not be replanted until November 1986 through March 1987. The complaint indicates that the effect of the rains on ASCS policy for wheat deficiency payments was the subject of considerable confusion between the local and State committees. At the request of the Wilson County ASCS committee, a special meeting with the state committee was held in Topeka, Kansas on January 13, 1987. The purpose of the meeting was to determine what course of action was permissible to be eligible for deficiency payments.

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Bluebook (online)
136 F.R.D. 672, 1991 U.S. Dist. LEXIS 6588, 1991 WL 84439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olenhouse-v-commodity-credit-corp-ksd-1991.