Summary of a Recent
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Court Gives Deference to NAD Director Review
Kurt B. OlsonNational AgLaw Center Graduate Assistant
In Clason v. Johanns, 438 F.3d 868 (8th Cir. 2006), the Eighth Circuit Court of Appeals upheld a National Appeals Division (NAD) interpretation of a delivery requirement in an authorization form relating to marketing assistance loan collateral. Appellant received a marketing assistance loan from the Commodity Credit Corporation, pledging his corn as security. See id. at 869-870. When the price of corn fell, appellant signed a Farm Service Agency (FSA) form that allowed appellant to sell corn and repay the loan at a lower rate “for any quantity delivered [to the buyer] on or before" a certain date. See id. at 870. Though the appellant sold the corn, he continued to store most of it on his farm and physically delivered only a portion. See id. The FSA argued the terms of the agreement require that he physically deliver the corn in order to reap the benefits of a lower repayment rate. See id. Appellant, on the other hand, argued he constructively delivered the corn at the time of sale when title was transferred. See id. at 870. At the final stage of the administrative appeal process, the Director of NAD agreed with the FSA’s interpretation of the term “delivery.” See id. Upon judicial review, the district court upheld the NAD decision. See id. The court of appeals determined NAD’s expertise and the fact appellant was given formal adjudication through a face-to-face hearing warranted ordinary agency deference. See id. at 871. The court upheld the decision after finding the NAD interpretation of the term “delivery” was not plainly erroneous. See id.
In the alternative, appellant argued equitable estoppel prevented the FSA from requiring physical delivery because a county FSA officer allegedly assured him that constructive delivery would suffice. See id. at 872. The FSA officer could not remember making such a representation and, as the court pointed out, “[a]ny claim of equitable estoppel against the government would require proof ‘that the government committed affirmative misconduct.’” Id (citation omitted). The court found the FSA officer’s actions were at most, negligent and that the record contained no evidence of affirmative misconduct required to support an equitable estoppel claim. See id.
The case was decided on February 22, 2006; this summary was posted Apr. 17, 2006.