Southern Illinois Grain Inspection Service, Inc. v. United States

881 F. Supp. 1229, 1995 U.S. Dist. LEXIS 4242, 1995 WL 144258
CourtDistrict Court, S.D. Indiana
DecidedMarch 17, 1995
DocketNo. IP 93-1319 C
StatusPublished

This text of 881 F. Supp. 1229 (Southern Illinois Grain Inspection Service, Inc. v. United States) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern Illinois Grain Inspection Service, Inc. v. United States, 881 F. Supp. 1229, 1995 U.S. Dist. LEXIS 4242, 1995 WL 144258 (S.D. Ind. 1995).

Opinion

ENTRY

BARKER, Chief Judge.

This matter is before the court on the summary judgment motion of defendants United States of America, Neil E. Porter, David Galliart and Champaign-Danville Grain Inspection Department.

I. FACTUAL BACKGROUND

The facts in this case are largely undisputed. On September 1, 1990, Plaintiff Southern Illinois Grain Inspection Service (“Southern Illinois”) was designated by the Federal Grain Inspection Service (“the Inspection Service,” or “the Agency”) as an official agency for the inspection of grain. The designation included four geographic areas in Indiana and Illinois. Southern Illinois’ designation was for a three year period ending September 30, 1993.

On March 31,1993, the Agency published a notice in the Federal Register declaring that Southern Illinois’ designation would terminate on September 30, 1993, and solicited applications from interested parties. Request for Applications, 58 Fed.Reg. 16,810 (1993). The notice required that applications be postmarked or sent by telecopier by April 30, 1993. Intervenor Champaign-Danville Grain Inspection Departments, Inc. (“Cham-paign”) responded to the notice by telefaxing to the Agency a letter stating its intention to apply on April 30, 1993. The Agency received Champaign’s completed application for designation on May 10, 1993.

On June 3, 1993, the Agency requested comments regarding the applications filed pursuant to the March 31 notice. Request for Comments, 58 Fed.Reg. 31,491 (1993). The request stated that four inspection services had applied for Southern Illinois’ territory, including Champaign and Southern Illinois.

On September 7, Southern Illinois received notice that the Terre Haute portion of its territory would be assigned to Champaign. The rationale for the decision was set out in a report entitled the “Recommendation for Designation in the Southern Illinois Grain Inspection Service, Inc., Geographic Area” [1232]*1232(“Recommendation Report”). The Recommendation Report incorporated information contained in a second report generated by the Agency’s Office of Inspector General (“OIG”) entitled “Chronology of Southern Illinois Grain Inspection Service Acts and Events” (“Chronology”). In concluding that Southern Illinois was “unqualified for designation” in the Terre Haute area, the Recommendation Report referred to eight problem areas that “detracted from the integrity of the official grain inspection system.” (Recommendation Report, at p. 17). Despite this unqualified rating for the Terre Haute area, however, the Agency decided that Southern Illinois would continue to service the remainder of its existing geographic area on a one-year interim basis.

On September 29, 1993, Plaintiff filed the present suit seeking inter alia to temporarily enjoin the Agency from awarding the Terre Haute region to Champaign. In a hearing held in New Albany, Indiana, on October 5, 1993, this Court denied the requested injunc-tive relief. On February 22, 1994, Plaintiff petitioned for leave to file an amended complaint, which the Court granted on March 4, 1994. The Amended Complaint alleges that Southern Illinois was denied property without due process of law and injured by arbitrary and capricious agency action. The Defendants now move for summary judgment on both claims and, for the reasons stated below, we grant the motion.

II. UNITED STATES GRAIN STANDARDS ACT

The Federal Grain Inspection Service was established by the United States Grain Standards Act in 1976. 7 U.S.C. §§ 71 et seq. The Act provides for the official inspection and weighing of all grain in accordance with regulations prescribed by the Agency. 7 U.S.C. §§ 77, 79(a); see generally South Louisiana Grain Services, Inc. v. Bergland, 590 F.2d 1204 (D.C.Cir.1978); South Louisiana Grain Services, Inc. v. United States, 1 CLCt. 281 (1982).

Under the terms of the statute, the Administrator may “designate” persons as an “official agency” for the inspection of grain. In order to be designated, however, that person must show “to the satisfaction of the Administrator that such agency or person” satisfies several statutory requirements, including:

(1) having adequate facilities and qualified personnel for the performance of official inspection functions;
(2) meeting specific training requirements and personnel standards as set forth in another section of the statute;
(3) assuring compliance with all provisions of the Act;
(4) charging inspection fees that are not discriminatory or unreasonable;
(5) maintaining complete and accurate records of its official activities; and
(6) ensuring that conflicts of interest do not arise between the designated agency and local grain operators.

7 U.S.C. § 79(f)(1)(A). Once these criteria are satisfied, the Administrator must further determine that “the applicant is better able than any other applicant to provide official inspection service.” § 79(f)(1)(B).

The designation of an official agency “shall terminate at such time as specified by the Administrator but not later than triennially.” § 79(g)(1). However, the designation “may be renewed in accordance with the criteria and procedure [sic] prescribed” in § 79(f). Id. In other words, the Administrator may renew a designation if the agency satisfies the same criteria required in the initial designation process, including that “the applicant [be] better able than any other applicant to provide official inspection service.” § 79(f)(1)(B).

III. PROCEDURAL DUE PROCESS

A. Standard of Review

Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). The movant bears the initial burden of showing that no genuine issue of material fact exists. Once that burden is met, the non-moving party must come forward with [1233]*1233specific facts to rebut that showing. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Hudson Insurance Co. v. City of Chicago Heights, 48 F.3d 234, 237 (7th Cir.1995).

B. Lack of a Protectable Property Interest

Plaintiffs initially argue that they “had a reasonable expectation of redesig-nation as the official grain inspection agency for the” Terre Haute service area. (Plaintiffs Memorandum in Opposition, p.

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881 F. Supp. 1229, 1995 U.S. Dist. LEXIS 4242, 1995 WL 144258, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-illinois-grain-inspection-service-inc-v-united-states-insd-1995.