714 F.2d 1510
Ronald E. PAYNE, Individually and on behalf of himself and
others similarly situated, Plaintiffs-Appellees,
v.
John R. BLOCK, Individually and as Secretary of the United
States Department of Agriculture, et al.,
Defendants-Appellants,
v.
James J. COLLINS, Movant-Appellant-Intervenor.
No. 81-5365.
United States Court of Appeals,
Eleventh Circuit.
Sept. 19, 1983.
Michael Kimmel, Dept. of Justice, Civ. Div., Washington, D.C., for Block, FHA, Dept. of Agriculture.
William R. King, Haas, Holland, Lipshutz, Levison & Gibert, Atlanta, Ga., for Collins, intervenor.
J. Victor Africano, Live Oak, Fla., Moorey, Seals & Garvin, Theodore L. Tripp, Jr., Fort Myers, Fla., Charles L. Carlton, Carlton & Carlton, Lakeland, Fla., for plaintiffs-appellees.
Appeals from the United States District Court for the Middle District of Florida.
Before GODBOLD, Chief Judge, HENDERSON and CLARK, Circuit Judges.
CLARK, Circuit Judge:
Beginning about April 1, 1973, thirteen north Florida counties received a series of torrential rains resulting in flooding, crop damage, and property damage. Pursuant to the Disaster Relief Act of 1970, the President, on May 26, 1973, declared the aforementioned area a major disaster area. 38 Fed.Reg. 14800 (1973). The Farmers Home Administration (FmHA) was authorized and funded by the Consolidated Farm and Rural Development Act, 7 U.S.C. sections 1961-69, to make emergency loans in this thirteen-county area. Originally the application period for production losses was nine months (ending February 26, 1974) and for property damage was sixty days (ending July 30, 1973). Apparently, crop losses are allowed a longer filing period because of the inability to determine the extent of loss prior to harvest and sale. The initial terms of the emergency loans included a 5% per annum interest rate and a provision requiring applicants to show an inability to obtain credit from commercial lenders.
Ronald E. Payne, a farmer in one of the designated counties, brought a class action suit against the FmHA, United States Department of Agriculture, seeking injunctive relief to secure for himself and all similarly situated farmers in the area the right to apply for emergency loans. Plaintiffs alleged inadequate notice of the availability of loans due to FmHA's failure to adhere to its own regulations providing for appropriate notice.
The applicable FmHA regulations in effect during this initial loan application period included provisions prescribing notice of the availability of loans to eligible area farmers. The Code of Federal Regulations contained the following section:
(a) [T]he State Director [of the FmHA] will notify the appropriate County Supervisors immediately and instruct them to make EM loans available under sec. 1832.13. His notification will be confirmed by State requirements issued as soon as possible. The State Director will also notify the USDA Defense Board Chairman and will make such public announcements as appear appropriate.
(1) Immediately upon receiving notice about the counties under his jurisdiction, the County Supervisor will notify the appropriate County USDA Defense Board Chairman and make such public announcements as appear appropriate about the availability of EM loans under sec. 1832.13. Also, the County Supervisor will explain to other agricultural lenders in the area the assistance available under this program.
7 C.F.R. sec. 1832.3(a)(1) (1973). The alleged failure of the agency to comply with the regulation is the gravamen of the original complaint.
Regarding announcement of the availability of emergency loans in designated disaster areas, Claude Greene, State Director of FmHA, issued notification to all county supervisors in the affected area. On June 4, 1973, Greene also sent a sample press release to the county supervisors with instructions to "use it as soon as possible." The release stated that applications should be submitted prior to July 30, 1973; it totally omitted any reference to the nine-month period, expiring February 26, 1974, in which to apply for production losses. The release was routinely forwarded to the local media. However, county officials made no follow-up to determine whether the press release was published. Several newspapers carried information concerning the FmHA program, but only one printed the release in full and others contained erroneous information in addition to omitting notice of the longer application period for crop loans.
The President's Office of Emergency Preparedness coordinated a week-long public meeting at the Live Oak, Florida, Coliseum in early June 1973. Various government agencies set up booths each manned by an agency representative for the purpose of supplying information regarding the available disaster relief programs. The FmHA booth was manned by an agency representative for a short period of time and by a volunteer the remaining time. Apparently, the volunteer was without knowledge of or familiarity with FmHA programs generally or this emergency program specifically. Several farmers attending the meeting testified that they were told no relief was available for farmers who had sustained crop losses but only for those who had sustained damage to their homes. Record Vol. 5 at 207, 228, 267-68; Vol. 8 at 589. Moreover, testimony indicated that FmHA officials were aware of the losses suffered as a result of the flooding. Record Vol. 8 at 684-86. The FmHA maintains that handout materials about the emergency loans and application forms were available at the meeting. However, the FmHA processed no applications and granted no emergency loans in this thirteen-county area during the 1973 loan period.
The government contends that no loans were made during this period because of credit available elsewhere. However, many of these lenders, such as the Small Business Administration, did not extend loans for crop losses. Record Vol. 10 at 1071. The government also asserts that the actual damage sustained by area farmers was much less than originally estimated.
On January 2, 1974, the President of the United States signed Public Law No. 93-237, which extended the application period for emergency loans to April 2, 1974. The new law provided for more attractive loan terms [the interest rate was dropped to 1% and the first $5,000 was forgiven] and eliminated the requirement that loan applicants be unable to obtain sufficient credit elsewhere. Notice of the reopened application period was not published in the Federal Register until February 27, 1974, so that two-thirds of the extended application period had expired. The regulations provided that the county supervisor was to prepare a list of paid-up and indebted borrowers who had received emergency loans, notify each person on the list of the new terms, and determine if that person was eligible for any benefit under the new terms of the loan. Since no one filed an emergency loan application during the first application period, no letters were sent.
The new regulation also stated that "State Directors will issue an instruction setting forth this information [regarding Public Law No. 93-237] for use in their respective states. State Directors and County Supervisors will inform the news media including newspapers, radio, and television in the affected counties of the provisions of P.L. 93-237." 39 Fed.Reg. 7570 (1974). On February 28, 1974, the state director issued a memorandum and sample press release to all county supervisors. The sample press release stated that loan applications would be taken under the terms of the new law. Contrary to the mandate of the regulation, the release did not recite the terms of Public Law No. 93-237. The press release was routinely forwarded to the local media but received little publication. No other efforts at notification were undertaken. Only three or four loans were granted during this second period. Plaintiffs attack the agency's failure to comply with this regulation as the second prong of their inadequate notice argument.
Inquiring into possible reasons or motivations for this failure to provide notice and, thus, ultimately to grant loans, we are acutely aware of the historical background of this case. The political climate of the early 1970s was one of considerable struggle between the executive and legislative branches of government. Congress appropriated monies for various programs and the executive branch refused to spend the funds on those it considered unwise. Several impoundment cases arose, hearings were held, and statutes were passed. As indicated earlier, in the area of agriculture Congress had passed very generous loan legislation. Pub.L. No. 92-385, 86 Stat. 554 (1972). The Secretary of Agriculture, however, by administrative fiat curtailed the grant of these loans. Injured farmers in Minnesota filed suit against the Secretary of Agriculture seeking reinstatement of the program. They alleged that the Secretary acted unlawfully and beyond the scope of his authority in terminating the FmHA emergency loan program. The district court agreed, finding the Secretary's action in violation of applicable statutes, departmental regulations, and due process of law. Berends v. Butz, 357 F.Supp. 143 (D.Minn.1973).
At the congressional hearings on Impoundment of Appropriated Funds by the President, then-Secretary Butz testified that in an effort to reduce spending his agency examined existing programs and withheld funds from those it found "least essential." The decisions were made on the basis of "subjective judgment." In response to the "termination" of the emergency loan program and in order to assure reinstatement of the program, Congress repealed 92-385 to the extent of its generous loan terms. Pub.L. No. 93-24, 87 Stat. 24 (1973). Congress also provided for the applicability of the terms of 92-385 to previously declared disasters. Id.; Pub.L. No. 93-237, sec. 4, 87 Stat. 1023 (1974). In an apparent attempt to persist in executive budgetary goals, the agency then merely withheld appropriate notice of the loan program.
Following a bench trial in the instant case, the district court issued an order and opinion on February 11, 1981 finding that the notice of the emergency loan program was insufficient to comport with the applicable regulations providing that the state director and county supervisors "make such public announcements as appear appropriate." 7 C.F.R. sec. 1832.3(a)(1) (1973). The district court also found that specific types of notice provided for in the regulations were not effectuated. Id. Judgment was entered for the plaintiff and the recertified class with the court ordering the FmHA to reopen the 1973-74 emergency loan program in the designated counties and the parties to submit a plan for notification of class members. A plan was submitted and accepted, and the district court denied defendants' motion for suspension of injunction pending appeal. Defendants filed an appeal and ultimately obtained in this court a stay of the injunction pending appeal in this court. An amended final judgment adding a second class representative as party plaintiff was later entered. Record Supp. Vol. 1 at 4.
On appeal, the government contests the authority of the district court to reopen the emergency loan program and contends that the original public notice was sufficient. Upon review of these issues and the evidence presented, we affirm the district court.
Propriety of the District Court Remedy
The government's primary position in this case is that the 90-day extension of Public Law No. 93-237 constitutes a legislatively enacted termination date of the benefits of 93-237 and as such deprives the agency of the authority to reopen the loan application process. Thus, assuming a failure to notify, the agency is left in the absurd position of arguing that it can disobey a congressional mandate to make loans available to eligible farmers but has no authority to make the loans in cases of inadequate notice of availability because Congress did not mandate an extension of time for those cases. The government maintains that since the statutory deadline for seeking assistance has long since expired, no statutory authority exists, as is needed, for making emergency loans under the terms of that program at this time. The government does not contend that funds are no longer available for these emergency loans, just that no authority exists to expend them for this disaster absent a timely filed application.
The government's initial brief chiefly relied on the Ninth Circuit's decision in Emergency Disaster Loan Association, Inc. v. Block, 653 F.2d 1267 (9th Cir.1981). Although based upon a similar factual setting, we find the case inapposite. The Ninth Circuit case failed to consider the regulation published on February 27, 1974 requiring notice to prior applicants and the news media. The court considered only an earlier internal Special Instruction which embodied the same terms but, as such, was found to be discretionary. As was apparently the case in the Ninth Circuit, the government in this case failed to bring to our attention the notice provision in the above-mentioned regulation. The government's reply brief, however, did footnote the error contained in its main brief. An additional distinction between the Ninth Circuit case and the instant one is that there the plaintiffs sought mandamus. The Ninth Circuit denied that relief since the instruction was discretionary and thus unenforceable in an action for mandamus. See generally United States ex rel. McLennan v. Wilbur, 283 U.S. 414, 420, 51 S.Ct. 502, 504, 75 L.Ed. 1148 (1931).
Traditionally, the Secretary of Agriculture declared as a matter of policy the duration of application periods for emergency loans. Public Law 93-237 maintained that policy, see 39 Fed.Reg. 7570 (1974) ("Termination dates for any new counties that might be designated after January 2, 1974, will follow the current policy (60 days for physical losses and 9 months for production losses)."), but provided that for "all disasters occurring on or after December 27, 1972, the Secretary of Agriculture shall extend for ninety days after the date of enactment of this [statute] the deadline for seeking assistance under ... the Consolidated Farm and Rural Development Act." Public Law No. 93-237, sec. 10(c), 87 Stat. 1023 (1974). Thus, an extended termination date of April 2, 1974 was set for the acceptance of applications for all losses resulting from the instant disaster. 39 Fed.Reg. 7570 (1974).
This "statutory" reopening of the application period was a result of contemporary changes in the disaster relief laws which caused public uncertainty as to the terms of emergency loans. Congress was "concerned that administratively set deadlines ... set by the [FmHA] ... may expire, thus precluding ... farmers ... from applying for benefits under [93-237]." Conf.Rep. No. 93-363, 93d Cong., 1st Sess. 2, reprinted in 1973 U.S.Code Cong. & Ad.News 3342, 3343. Thus, Congress indicated its expectation that the FmHA would extend the deadline for seeking relief for previously declared disasters as a result of the enactment of 93-237. Conf.Rep. No. 93-363, 93d Cong., 1st Sess. 2, reprinted in 1973 U.S.Code Cong. & Ad.News 3342, 3343-44. This expectation was incorporated into the statutory language. Pub.L. No. 93-237, sec. 10(c), 87 Stat. 1023 (1974).
The materials cited above clearly demonstrate Congress' concern that the benefits of the emergency loan program be extended to all eligible farmers and that they have ample opportunity to derive benefits therefrom. The "statutory" deadline was inserted merely to insure agency adherence to congressional intent. That extension operated as a congressional demand to the Secretary of Agriculture to extend the application period. To equate the "statutory" extension to a congressional termination of benefits overlooks the context in which the act was passed. No statutory authorization is required, as the government here contends, for the Secretary to extend deadlines merely because Congress inserted a deadline in a disaster relief law which originally was designed to remedy a Secretarial curtailment of loan grants. See Sen.Rep. No. 93-85, 93d Cong., 1st Sess. 1, reprinted in 1973 U.S.Code Cong. & Ad.News 1285. Application deadlines are normally administratively prescribed. FmHA's application period is a policy decision of that agency and expandable by the agency. We do not condone the failure of potential loan applicants to follow legitimate time restrictions set as a prerequisite to applying for governmental benefits. However, we do find that where, as here, exigent circumstances beyond the farmers' control precluded intended beneficiaries from applying for loans, the agency had the power to extend the loan period and the district court was within its power in ordering the agency to do so. To hold otherwise would allow FmHA to totally fail to provide notice to congressionally intended potential beneficiaries and avoid being called to task for such conduct.
The liability of the agency in this case is grounded in Congress' enactment of legislation directing the Department of Agriculture to implement the terms of the legislation, the agency's passage of implementing regulations, and the agency's failure to follow the resulting affirmatively required procedure. See generally United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681 (1954); United States v. Heffner, 420 F.2d 809 (4th Cir.1970). An agency must follow its own procedure even though the procedure is more stringent than would constitutionally be required. Morton v. Ruiz, 415 U.S. 199, 235, 94 S.Ct. 1055, 1074, 39 L.Ed.2d 270, 293 (1974). The FmHA regulations in issue are not merely statements of agency policy. The notice provisions were all promulgated in the Code of Federal Regulations and constituted rules of procedure governing emergency loan programs legislated and funded by Congress. FmHA must adhere to those rules.
We reject FmHA's contention that Schweiker v. Hansen, 450 U.S. 785, 101 S.Ct. 1468, 67 L.Ed.2d 685 (1981) (per curiam), controls this case. In Schweiker v. Hansen, a Social Security employee erroneously informed an inquiring claimant of her ineligibility for government benefits, resulting in her failure to file an application. A written application was a prerequisite to receiving benefits. An internal claims manual instructed agents to recommend such a filing to uncertain inquirers. Upon a later filing and receipt of the benefits in issue, plaintiff brought suit to estop the Secretary of Health and Human Services from denying complete retroactive benefits for the period in which plaintiff was eligible but had not filed a written application. The Court found estoppel inapplicable to the case since an internal instruction is not a binding regulation, plaintiff was able to correct the misrepresentation, and the estoppel would threaten the public fisc.
In Hansen, the claimant was negligent in failing to file an application and the agency employee was negligent both in failing to instruct her to file and in advising her of ineligibility. The present case is not an instance of a single government employee negligently failing to follow intra-office procedure and an agency nevertheless insisting on adherence to its regulations. This is not a case of a negligent plaintiff. Rather, this is a case of gross failure on the part of an entire agency to follow self-imposed regulations prescribing adequate notice to potential applicants. Additionally, the error in Hansen was revocable. By filing an application on any subsequent day, the claimant could have corrected the error or obtained the benefits. Clearly, the Florida farmers have available no such remedial option; the court must reopen the application period for availability of benefits. Perhaps the most important difference in Hansen, however, is the potential ramifications on the public fisc. If a person could obtain retroactive Social Security benefits by claiming to have visited the office and been told of ineligibility, the expenditure of funds on proof of claimant eligibility and employee behavior could be astounding. The district court's remedy in the present case does not threaten the public fisc. Loans, which presumably are repaid, are involved. A revolving fund exists for such loans. The remedy merely provides for a reopening of the application period; farmers must still demonstrate eligibility for relief. We must presume that the agency in the future will give sufficient notice to the public of the availability of emergency loans and that this factual situation will not recur.
Having thus found the agency responsible for violating its own procedure as prescribed by law, relying on Ruiz, 415 U.S. at 235, 94 S.Ct. at 1074, Accardi, 347 U.S. at 268, 74 S.Ct. at 503, and Heffner, 420 F.2d at 811-12, and having held this not to be a case of negligence as in Hansen, Augusta Aviation, 671 F.2d at 449, and Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10 (1947), we turn to the government's final contention.
Sufficiency of Notice
Appellants claim that notwithstanding their other contention, the district court committed reversible error in concluding that the notice transmitted by FmHA regarding its emergency loan program was legally insufficient. The government argues that notice was provided in the Federal Register, the appropriateness of the notice is committed to agency discretion and hence not judicially reviewable, and FmHA otherwise complied with the applicable regulations. Appellees assert that FmHA failed to comply with specific notice requirements imposed by regulation, the public announcements were inappropriate as a matter of law, and the notice was insufficient under the due process clause of the fifth amendment.
At the time of publication of the disaster declaration, the applicable regulations specifically instructed FmHA officials to notify the state and appropriate county USDA Defense Board Chairmen and other agricultural lenders in the area. 7 C.F.R. sec. 1832.3(a)(1) (1973). The regulations also provided for other "such public announcements as appear appropriate." Id. Pursuant to the passage of Public Law No. 93-237, the Federal Register carried notification of the extended application period and an instruction to FmHA officials to "inform the news media including newspapers, radio, and television in the affected counties of the provisions of P.L. 93-237."
The district court specifically found that "Defendants did not comply with the regulations requiring the giving of notice to State and County USDA Defense Boards and agricultural lenders in the community." Record Vol. 3 at 104. Several exhibits indicate that FmHA requested a meeting of Defense Board personnel to acquaint them with the availability of USDA assistance to disaster victims. Plaintiffs' Exhibits 12-15; Defendants' Exhibit 5. Such a request and subsequent meeting probably suffices to meet the directive that the State Director notify the USDA Defense Board Chairman. See 7 C.F.R. sec. 1832.3(a). Evidence exists, however, indicating that the notice given at this meeting stated only that applications should be filed by the July 30, 1973 deadline. A telegram clarifying the February 26, 1974 deadline for production losses was not received by the State Director until July 9, 1973--some time after the meeting. Plaintiffs' Exhibit 17. As to the county supervisor's duty to notify the appropriate county USDA Defense Board Chairman, several county supervisors testified that they normally maintained contact with the USDA Defense Board and conversed regarding the emergency loan program information. Record Vol. 5 at 173-74; Vol. 9 at 935-37, 967. Several county supervisors also testified that they informed agricultural lenders in the area of the emergency loan program. Record Vol. 6 at 306; Vol. 9 at 936. The Chairman of the Board of Directors of the local Federal Land Bank testified, however, that he was unaware of the FmHA emergency loan program and had he been aware would have applied for a loan for his disaster related losses. Record Vol. 8 at 586-609. Area farmers also testified that they borrowed money on less favorable terms from other lenders during this time period. Record Vol. 5 at 208, 231-32; Vol. 7 at 480-81, 504-05.
While agreeing that community agricultural lenders were without sufficient notice, this intra-agency/business notice pertains only peripherally to the issue on which we affirm the district court's finding of inadequate notice. FmHA failed to comply with federal regulations specifically designed to transmit notice of available emergency loan programs to the public. FmHA made no loans during the initial application period and only a handful during the renewed period. The press releases mandated during the reopened loan period, see 39 Fed.Reg. 7570 (1974), consisted of one state-issued sample press release forwarded to local newspapers by county officials. Aside from receiving little publication, the sample press release merely stated that "loan applications will be taken under the terms of a new law (P.L. 93-237) enacted January 2, 1974." Plaintiffs' Exhibit 21. It said nothing of the availability of a reduced interest rate, the possibility of a partial cancellation of loan principal, or the elimination of the "credit available elsewhere" requirement. The notice failed to "inform the news media ... of the provisions of P.L. 93-237." 39 Fed.Reg. 7570 (1974) (emphasis supplied).
In light of FmHA's failure to comply with specific prescriptions for notice, we find it unnecessary to determine whether FmHA provided "such public announcements as appear appropriate" or whether in fact such a requirement is judicially reviewable. We do note, however, the paucity of public announcement during both the initial and reopened application periods. Especially is this continual dearth of public notice noteworthy where the state director testified that his staff and he were "flabbergasted" at the lack of response to the emergency loan program. Record Vol. 8 at 658.
In contrast to the procedure invoked by FmHA for disseminating notice of emergency loan availability, the Small Business Administration (SBA) and Agricultural Stabilization and Conservation Service (ASCS) transmitted numerous detailed notices to the potential beneficiaries of their respective programs. SBA authored at least three extensive notices listing its program's specific terms which were sent to the available area media offices, including the Jacksonville UPI and AP offices, four television stations, and numerous newspapers and radio stations. Record Vol. 10 at 1060-65. ASCS used its ongoing system of monthly newsletters to inform farmers of its emergency program and would have allowed other agencies to use this source of notice if asked. Record Vol. 7 at 540-52; Vol. 9 at 882-85. Moreover, some testimony revealed the possible existence of a "sign-up" sheet emanating from the week-long disaster meeting coordinated by OEP which could have been utilized by FmHA in contacting interested area farmers. Record Vol. 9 at 1023; Vol. 10 at 1077-78.
Our review of the record convinces us that the district court was not clearly erroneous in its six pages of findings of fact and that it was correct in its ultimate conclusion of insufficient notice. See Marable v. H. Walker & Associates, 644 F.2d 390, 395 (5th Cir. Unit B 1981).Motion to Intervene
James H. Collins, Jr., a Georgia farmer, sought to intervene in this suit individually and on behalf of all others similarly situated. The class Collins seeks to represent is one of all farmers in the 27 states and Puerto Rico who live in areas declared disaster areas during the same time period as the initial suit, who suffered losses as a result of the natural disaster which was the subject of said designations, and who were eligible to apply for emergency disaster loans but were not notified of their eligibility to apply. The district court denied Collins' motion to intervene as an individual and class plaintiff, finding the motion untimely since the case had already "proceeded to final judgment and [was then] on appeal." Record Vol. 4 at 131. Collins appeals to this court.
The timeliness of a motion to intervene is a question largely committed to the district court's discretion. Howse v. S/V "Canada Goose I", 641 F.2d 317 (5th Cir. Unit B 1981). The standard of review is abuse of discretion. Stallworth v. Monsanto Co., 558 F.2d 257 (5th Cir.1977). As in the instant case, courts often are reluctant to grant leave to intervene post-judgment. "Interventions after judgment have a strong tendency to prejudice existing parties to the litigation or to interfere substantially with the orderly process of the court." United States v. United States Steel Corp., 548 F.2d 1232 (5th Cir.1977).
After careful consideration of the arguments in support of intervention, we find no abuse of discretion in the trial court's denial of leave to intervene. The appeal decided today results from a case involving extensive discovery and lengthy litigation. The testimony relates almost solely to action or inaction by state and county officials in Florida. To allow the requested intervention would require exhaustive discovery to determine what information was disseminated in 27 states and Puerto Rico. Since our finding of insufficient notice is limited to one specific disaster declaration, the proposed intervention would inject into this case numerous issues not heretofore considered. Collins' admonition that we enter a Rule 54 judgment in favor of the existing plaintiffs and declare plaintiffs-intervenors a subclass is not well-taken. We note, however, that these would-be intervenors are not necessarily precluded by today's ruling from filing an independent action. For the foregoing reasons and because a district court's proper denial of intervention is not a final judgment, United States v. United States Steel Corp., 548 F.2d 1232 (5th Cir.1977), we dismiss plaintiffs-intervenors' appeal for want of jurisdiction.
Accordingly, the district court order is
AFFIRMED.