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.
