Posted January 27, 2014
In Jagers v. Federal Crop Insurance Corporation, No. 12-1342, 2014 WL 114508 (10th Cir. Jan. 14, 2014), the Tenth Circuit Court of Appeals, held that the Federal Crop Insurance Corporation (FCIC) did not act arbitrarily and capriciously in denying coverage to appellants after determining that they did not follow good farming practices. For a copy of the decision, please contact the National Agricultural Law Center at nataglaw@uark.edu. For more information on crop insurance, please visit the Center’s Crop Insurance Reading Room here.
Background
Appellants are five farmers who planted corn on newly broken, non-irrigated acreage in Baca County, Colorado. Id. at *1. Some of the land was previously part of the USDA Conservation Reserve Program (CRP) and other land was grass crop. Id. Appellants each applied for Group Risk Income Protection (GRIP) coverage. Id. Appellants GRIP policies provided that the insurer would not insure any acreage where the insured failed to follow “good farming practices.” Id. The Risk Management Agency (RMA), the agency which supervises the FCIC, received an email from an AIP (Approved Insurance Provider) that some farmers in Baca County were acting in bad faith by planting on pastureland and insuring the land the first year of cultivation. Id. at *2. In response, RMA began a monitoring program in Baca County to investigate program abuse. Id. at *3. RMA also began researching “good farming practices” for that area. Id.
The AIP and RMA informed the appellants that it had made GFP determinations and their 2008 Baca County corn crops were ineligible for insurance coverage because they failed to follow GFP by “planting corn on newly broken lands without a fallow period” and “planting non-irrigated corn on acreage newly broken out of native vegetation, rangeland, or CRP.” Id. at *4.
The District Court affirmed the agency’s decision and the farmers appealed. Id. The farmers argued that the FCIC’s determination was arbitrary and capricious because “(1) the agency predetermined this result and made its decision based on bias and other improper motivations, and (2) the agency failed to follow its own procedures relating to the issuance of GFP determinations.”
Analysis and Holding
The Tenth Circuit Court of Appeals held that the agency’s negative GFP determination was not predetermined or based on an improper motive. Id. at *5. The court stated: the “record indicates that RMA exercised its agency expertise by examining scientific evidence relating to various types of farming practices on non-irrigated lands and determined that this specific practice … was not a good farming practice.” Id.
The court also held that the Accardi doctrine, “which require[s] an agency to adhere to the policy and regulations it [] promulgates,” does not apply to policies, “which appear to be ‘housekeeping provision[s].” Id. at *6. The court stated that even if Accardi applied, RMA did not violate any of its own policies or procedures. Id.
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