Rieschick v. United States

21 Cl. Ct. 621, 1990 U.S. Claims LEXIS 402, 1990 WL 162234
CourtUnited States Court of Claims
DecidedOctober 23, 1990
DocketNo. 528-88C
StatusPublished

This text of 21 Cl. Ct. 621 (Rieschick v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rieschick v. United States, 21 Cl. Ct. 621, 1990 U.S. Claims LEXIS 402, 1990 WL 162234 (cc 1990).

Opinion

OPINION

ROBINSON, Judge:

This case was originally brought in the United States District Court for the District of Kansas (District Court). In its August 31, 1988 memorandum and order the District Court found that plaintiffs’ claim was essentially a contract dispute for a sum in excess of $10,000 and that the United States Claims Court (Claims Court) had exclusive jurisdiction pursuant to 28 U.S.C. §§ 1346 and 1491. The District Court transferred the case to this court pursuant to 28 U.S.C. § 1631 for further proceedings.

This case is now before the court on defendant’s motion for summary judgment and plaintiffs’ motion for transfer back to the District Court or, in the alternative, plaintiffs’ cross-motion for summary judgment. Defendant contends that this is a suit under the Tucker Act, 28 U.S.C. § 1491, in which plaintiffs seek money damages from the United States. Defendant moves for summary judgment on the grounds that there are no genuine issues of material fact in dispute and that it is entitled to judgment as a matter of law. Lynn and Keith Rieschick (plaintiffs) move to return this case to the District Court alleging that this court lacks jurisdiction to entertain their complaint in that this is not a contract dispute, but rather a claim for [623]*623declaratory and injunctive relief from the promulgation and application of 7 C.F.R. § 1430.455(c)(1). In the alternative, plaintiffs move for summary judgment alleging that the Secretary of Agriculture’s (Secretary) promulgation of 7 C.F.R. § 1430.455(c)(1) was unlawful, and its application, as augmented by an informal policy discussed below, to plaintiffs’ contract under the Dairy Termination Program (DTP), 7 U.S.C. § 1446(d), was arbitrary, capricious, and an abuse of discretion. Plaintiffs’ pray for damages in the amount of $45,000 plus interest and costs. For the following reasons the court will grant defendant’s motion for summary judgment and will deny plaintiffs’ motion to transfer the case to the District Court, or alternatively, for summary judgment.

Factual Background

On December 23, 1985, Congress passed the Food Security Act of 1985, Pub.L. No. 99-198, 99 Stat. 1354 (1985) (Act). The Act authorized the DTP as an incentive program to encourage dairy producers to dispose of their dairy stock and to cease milk production for a period of five years. Through the DTP, Congress hoped to permanently reduce the level of commercially marketed milk. Final rules and regulations concerning this program were issued in the Federal Register on March 7, 1986. 51 Fed.Reg. 45, 7913 (1986). These rules were effective on February 10, 1986.

The Commodity Credit Corporation (CCC) administered the DTP for the Department of Agriculture through local Agricultural Stabilization and Conservation Service (ASCS) State and county committees. 7 C.F.R. § 1430.451(a). Under the DTP, the CCC entered into contracts with eligible producers who, in return for monetary reimbursements, agreed to cease milk production for five years by: (1) slaughtering or exporting their herds, and (2) not having any interest in milk or dairy cattle for five years. 7 U.S.C. §§ 1446(d)(3)(A)(ii) and (iv). Prospective participants were permitted to submit bids for three herd disposal periods, but could only be accepted for one. 7 C.F.R. § 1430.456.

Under the DTP, producer reimbursement was determined by multiplying the producer’s prior milk production base by their respective bid per hundredweight of milk. Each producer’s base was calculated from the lower of milk poundages commercially marketed by the producer for the two 12-month periods ending June 30, 1985 and December 31, 1985.1 7 C.F.R. § 1430.455(a). Under 7 C.F.R. § 1430.455(c)(1),2 this base was reduced by 20,000 pounds for each cow transferred on or after January 1, 1986 for other than export or slaughter. Defendant developed an informal policy permitting participants to escape application of this last provision by repurchasing the exact (not similar) cattle.

DTP bids were submitted on contracts provided by local ASCS offices. The contracts set forth the cow transfer rules, specifically including in the appendix the provisions of 7 C.F.R. § 1430.455(c)(1). Bids could not be withdrawn after the last date for bid submission established by the CCC. 7 C.F.R. § 1430.456(a). When a bid was accepted, a CCC representative signed [624]*624the contract (bid) and returned a copy to the participant. 7 C.F.R. § 1430.456(c).

Prior to passage of the Act speculation surrounding the proposed DTP precipitated a decrease in the value of dairy cattle. This diminished the value of plaintiffs’ dairy cattle which were being used as collateral to secure their loans at the Farmers State Bank of Circleville, Kansas (Bank). On September 25, 1985, the Bank sent a notice to plaintiffs that their collateral was insufficient and that their line of credit would need restructuring.

During the fall, plaintiffs attempted to resolve this problem with the Bank. Finally, on November 26,1985, plaintiffs offered to sell certain cattle. However, due to the disruption of market activity caused by speculation over the DTP, plaintiffs were unable to sell any cattle at that time.

After the Act passed there was speculation by the press that the bids accepted under the Act would run between $7.00 and $10.00 per hundredweight of milk. Plaintiffs performed an analysis with the Bank using a bid of $12.50 per hundredweight and determined that this price was not acceptable for their operation. As a result, plaintiffs pursued a course of debt reduction through a planned sale of assets. Under this plan plaintiffs would market 25 bred springer heifers.3 Plaintiffs were able to sell 10 of these heifers on January 24, 1986.

On February 14, 1986 the local ASCS office mailed out letters to local dairy farmers concerning the DTP. This letter asked interested parties to make an appointment to discuss the DTP, bringing with them their milk marketings from July 1, 1984 through December 31, 1985, and the composition of their dairy herd on January 1, 1985 and January 1, 1986.

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Bluebook (online)
21 Cl. Ct. 621, 1990 U.S. Claims LEXIS 402, 1990 WL 162234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rieschick-v-united-states-cc-1990.