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Clanton v. United States

United States District Court, W.D. Arkansas, El Dorado Division

February 4, 2015

RANDY CLANTON, JR., SAMUEL CLANTON, HERITAGE FARMS, GUY MARTIN WARDLAW, CRAIG WARDLAW, MARTY LEE WARDLAW, J&B CARE, INC., and PATTSVILLE FARMS, INC., Plaintiffs,
v.
UNITED STATES OF AMERICA, Acting Through the United States Department of Agriculture, Risk Management Agency, Defendant.

MEMORANDUM OPINION

SUSAN O. HICKEY, District Judge.

Before the Court is Plaintiff's Motion for Summary Judgment. (ECF No. 10). Defendant did not file a response. Instead, Defendant filed its own Motion for Summary Judgment and For Leave to File Exhibit not part of the Administrative Record. (ECF No. 14). Plaintiffs did not respond to Defendant's Motion.

Plaintiffs assert that they are entitled to summary judgment because the actions of the Defendant were arbitrary and capricious, an abuse of discretion, not in accordance with law and unsupported by substantial evidence. Defendant asserts that the Court lacks jurisdiction over two of the three contested final agency determinations, the Administrative Procedure Act is inapplicable to Plaintiffs' challenges, and the federal agencies acted within the applicable regulations when interpreting the regulations. The Court finds these matters ripe for its consideration.

I. Background

The Federal Crop Insurance Act ("FCIA"), 7 U.S.C. § 1501-24, is designed to "promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance and providing the means for the research and experience helpful in devising and establishing such insurance." 7 U.S.C. § 1502(a). Congress created the Federal Crop Insurance Corporation ("FCIC"), under the supervision of the Risk Management Agency ("RMA") of the United States Department of Agriculture ("USDA"), to administer the FCIA. 7 U.S.C. § 1503, § 6933(a), (b)(1)-(3); 7 C.F.R. § 400.701. The FCIA empowers the FCIC to provide crop insurance directly to farmers or to provide reinsurance to private approved insurance providers who sell federal crop insurance policies. 7 U.S.C. § 1508(a)(1) & (k). In order to qualify for reinsurance through the FCIC, the policies written by approved private insurers must comply with the FCIA and its accompanying regulations. Consequently, "[t]he FCIA generally establishes the terms and conditions of insurance, ... even though the crop insurance policy is between the farmer and an approved insurance provider." Davis v. Producers Agr. Ins. Co, 762 F.3d 1276, 1284 (11th Cir. 2014).

Plaintiffs in this action were all tomato producers in Bradley County, Arkansas in 2009, and each Plaintiff purchased a "Guarantee Production Plan of Fresh Market Tomato Federal Crop Insurance" policy, through a private insurance provider approved by the FCIC, for the 2009 crop year. There was an unexpected freeze in Bradley County in April 2009 and then heavy unexpected rainfall in May 2009. These weather events caused damage to the Plaintiffs' crops, and they subsequently filed claims under their crop insurance policies. These types of "Guarantee Production Plan of Fresh Market Tomato Federal Crop Insurance" policies are governed by 7 C.F.R. § 457.128, and certain requirements for insurability are set forth in that regulation. Specifically, 7 C.F.R. § 457.128(9)(a)(2), in relevant part, provides:

We do not insure any acreage of tomatoes:

...

(iii) On which tomatoes, peppers, eggplants, or tobacco have been grown within the previous two years unless the soil was fumigated or nematicide was applied before planting the tomatoes, except that this limitation does not apply... if otherwise specified in the Special Provisions[.]

7 C.F.R. § 457.128(9)(a)(2)(iii).

The Special Provision for Bradley County, Arkansas, provided:

In regards to the policy provisions, fumigation is not required if a valid Nematode Analysis Test is on file with the Insurance Provider and confirms that the planted acreage is not infested to a concentration exceeding 75 root knot nematodes per pint of soil. Test samples must be taken while the plants are actively growing between fruit set and end of production in accordance with Cooperative Extension Service guidelines during the immediately preceding crop year and tested by the Nematode Diagnostic Clinic, University of Arkansas, SW Research and Extension Center.

Special Provisions of Insurance for Bradley County, Arkansas, Fresh Market Tomatoes, 2009.[1]

Plaintiffs' 2009 crop insurance claims were denied by their private insurance providers, who determined that Plaintiffs' tomato crops were uninsurable, under 7 C.F.R. § 457.128 Section 9(a)(2)(iii), because Plaintiffs had planted tomatoes within the previous two years, had not fumigated or applied nematicide prior to planting, and did not have a valid nematode analysis test on file with the insurer. Plaintiffs contended that their crop insurance claims should not be denied for their failure to take the required protective measures against nematodes because their crops had been damaged by weather, not nematodes. Plaintiffs argued that their failure to fumigate, apply nematicide, or have a valid Nematode Analysis Test on file should only prevent farmers from being insured against damage caused by nematodes. ...


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