Many agricultural producers across the nation obtain crop insurance coverage for their planted acreage under the federal crop insurance program (“FCIP”). The first article of this series outlined the structure of the FCIP. Generally, crop insurance agents assist producers with obtaining insurance coverage for their commodity. When insuring crops, insurance agents rely on the insurance policies designed by the Federal Crop Insurance Corporation (“FCIC”) and the Risk Management Agency’s (“RMA”) Crop Insurance Handbook (“Handbook”). However, there are instances where the crop insurance statutes, regulations, and the Handbook lack clarity on how to properly insure a producer’s commodity. When this occurs, the ambiguous insurance provisions are resolved by legislation, regulation, or judicially.

In United States ex rel. Kraemer v. United Dairies, L.L.P., No. CV 16-3092 (DWF/LIB), 2022 WL 959771 (D. Minn. Mar. 30, 2022), the United States (“Government”), on behalf of a private citizen, filed a lawsuit against several dairy farm operations for receiving insurance benefits on silage corn they insured as grain corn. According to the FCIC insurance policy for coarse grains and the Handbook, insurance coverage is not available for a variety of corn that is adapted only for silage use; however, there is no governmental guidance on what varieties of corn are adapted for “silage use only.”

The plaintiffs in this case allege that the defendants made false crop insurance claims in violation of the False Claims Act (“FCA”) (31 U.S.C. §§ 3729 – 3733) and that the defendants were unjustly enriched when they received loss payments on these claims. On March 30, 2022, Judge Donovan Frank, a federal judge serving the United States District Court for the District of Minnesota, ruled that the defendants did not violate the FCA, but were unjustly enriched for receiving insurance benefits through false claims. However, either party may appeal Judge Frank’s ruling to the Court of Appeals for the Eighth Circuit.


The defendants in this case are involved in dairy farming operations and also produce corn crops. Many dairy farming operations plant corn and harvest it as silage in order to feed their dairy cattle. From 2013 through 2015, the defendants planted brown midrib seeds, which is a dual-purpose variety of corn that can be processed as silage or grain corn. During these years, the defendants insured their corn crops as grain under the FCIP.

In the defendants’ Acreage Reporting Forms, a document used by insurance agents and Approved Insurance Providers (“AIPs”) to determine which insurance coverage applies to a producer’s crops, they certified that they planted corn with the intent to harvest the crop as grain. Accordingly, the defendants obtained revenue protection insurance policies. Revenue protection insures against loss of revenue resulting from a production loss and price decline if the market price drops. This type of insurance policy is available for grain and not silage because silage is not typically sold on the market.

The defendants’ insurers, however, were aware that the defendants harvested some, if not most, of their corn as silage. In general, corn continues to be insured as grain or silage as reported in a producer’s Acreage Reporting Form even if they harvest the crop differently than the method indicated on the form. Producers changing their method of harvest must notify their insurance agent of the change so the agent can send an adjuster to calculate the actual production of their yield, which is then used when producers make a claim on their insurance. The defendants in this case notified their insurers of the change and adjusters appraised their fields. Although the defendants’ insurers knew they harvested a portion of their crops as silage instead of grain, the defendants received revenue loss payments under their insurance policies.

In 2014, Kenneth Kraemer (“Kraemer”) suspected United Dairies (“United”), a defendant in this case, was falsely certifying the type of corn crops it planted in obtaining insurance. Specifically, Kraemer suspected United—and the other named defendants—of falsely certifying corn crops as grain and received insurance payments on that basis even though the defendants intended to harvest some or most of its corn as silage. Kraemer filed a qui tam lawsuit against defendants, alleging crop insurance fraud under the FCA and unjust enrichment. A qui tam lawsuit allows a private citizen acting as a whistleblower, called a “relator,” to sue on behalf of the Government to recover damages from guilty parties for using false records or statements to obtain payment from the Government.

FCA Claims

In order to prove an FCA claim, the relator must demonstrate that the defendant made a claim for payment to the Government, that the claim was false, and that the defendant knew this claim was false. See U.S. ex rel. Simpson v. Bayer Healthcare (In re Baycol Prods. Litig.), 732 F.3d 869 (8th Cir. 2013). Additionally, the relator must prove the defendant’s false claim or statement was crucial to the Government’s decision to pay a claim. An FCA claim may arise, as in this case, when the defendant certifies their compliance with statutory, regulatory, or contractual requirements, but, according to the relator, the defendant has not complied with such requirements.

In this case, Kraemer alleges that the defendants falsely certified silage corn as grain corn on their Acreage Reporting Forms to obtain revenue protection coverage, and that the defendants knowingly made these false certifications. Relying on the Handbook and insurance policy, Kraemer argues that the defendants’ crops were not eligible for revenue protection coverage. For all crop years relevant to this case, Handbook stated that “a variety of corn adapted for use as silage only is not insurable as grain and must be insured as silage.” Further, the insurance policy states that coverage is not available for a “variety of corn adapted for silage use only when the corn is reported for insurance as grain.” 7 C.F.R. § 457.113. According to Kraemer, the defendants knowingly made false claims to the Government when insuring silage as grain in order to obtain insurance coverage that they otherwise would not have received had they certified their crops as silage.

Ultimately, Judge Frank dismissed the FCA claims because the plaintiffs failed to prove that any defendant knowingly made false claims to receive insurance benefits. Although the evidence shows that the defendants made false claims each time they certified their crop as grain, Judge Frank concluded that the defendants did not knowingly falsify their certifications because the defendants primarily relied on their insurance agents when insuring their corn crops.

Based on testimony from crop insurance agents, the court found that agents recommend that producers insure their corn as grain with a revenue protection policy even if they intend to harvest it for silage. Because there is no statute, regulation, or Handbook provision that lists silage-specific varieties that are not insurable as grain, insurers interpreted what they believed FCIC and RMA intended to accomplish under the “silage use only” policy and Handbook provision. The agents testified that this practice is acceptable when insuring silage so long as the variety planted is dual-purpose. According the testimony, AIPs instruct their agents to offer grain insurance to producers, even if they list the crop as silage and intend to harvest as silage, so long as they are not planting a silage-only variety.

Further, the defendants in this case properly notified their agents prior to harvesting their grain crop as silage so an adjuster could appraise their crops. Judge Frank determined that it is reasonable for the defendants to believe they correctly insured their crops if they pass an audit, which every defendant in this case did. Therefore, the court ruled that the defendants did not knowingly make false claims because they relied on their insurance agents when insuring their corn crops.

Unjust Enrichment Claim

To recover on a claim of unjust enrichment, the plaintiff must prove that the defendant received something of value at the plaintiff’s expense. Under Minnesota law, the plaintiff must show that the defendant was “unjustly enriched in the sense that the term ‘unjustly’ could mean illegally or unlawfully.” See ServiceMaster of St. Cloud v. GAB Business Services, Inc., 544 N.W.2d 302, 306 (Minn. 1996). For example, unjust enrichment can occur when one party fulfills their part of a contract while the other party does not fulfill their part of the contract.

Judge Frank ruled that the defendants were unjustly enriched by receiving loss payments from the Government. Although the defendants did not knowingly make false claims, the judge determined that the defendants did receive revenue loss payments for grain they did not harvest as grain. Because the defendants used the harvested silage to feed their dairy cattle—and did not market the crops—they did not suffer a loss of revenue.


Overall, Judge Frank determined that the defendants did not violated the FCA. Without clear guidance on which varieties of corn are “adapted for use as silage only,” the defendants’ insurance agents insured their silage crops as grain. Judge Frank determined that the defendants relied on their agents when insuring their crops, and thus did not knowingly make false claims to the Government to receive insurance benefits. However, the court ruled that the defendants were unjustly enriched by receiving loss payments under their insurance policies. As a result, the judge ruled that the plaintiffs are entitled to $1,007,191.30 in damages, the amount the defendants received in loss payments.

Overall, while this case provides a ruling on important crop insurance issues, it does not resolve the ambiguity in the RMA policy and Handbook regarding silage-specific varieties of corn. Accordingly, RMA may soon consider adopting guidance in its policy or Handbook that specifies which varieties of corn are adapted for silage use only. Also, it is possible that the plaintiffs or defendants will appeal Judge Frank’s ruling.

Essentially, an appeal is when a litigant requests a higher court (the appellate court) to review the district court’s decision. In this case, for example, the Government may seek to appeal Judge Frank’s dismissal of the FCA claims while the defendants may attempt appeal the unjust enrichment ruling. The appellate court determines whether the district court judge made an error in applying the law and whether that error is important to the district court judge’s ruling. If the appellate court determines the error changed at least part of the outcome of the case, they may reverse the district court’s decision and remand the case back to the district court for further action.

Usually, parties have 30 days from the entry of the district court’s ruling to file a notice of appeal; however, this time period is extended to 60 days when the U.S. government is a party to the lawsuit. Therefore, the parties in this case have 60 days from March 30, 2022 to file a notice of appeal. The filing of an appeal generally does not prevent the enforcement of the district court’s ruling, which means the defendants are required to pay the damages ordered by Judge Frank. However, if the defendants in this case file an appeal, they may also request a supersedeas bond. This bond postpones the defendants’ requirement to pay the damages until the appeal is complete by guaranteeing that they will pay the damages if Judge Frank’s ruling is not reversed on appeal.


To read the court’s ruling, click here.

To read NALC resources on crop insurance, click here.