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PETERSON FARMS I v. MADIGAN

December 17, 1991

PETERSON FARMS I, et al., Plaintiffs,
v.
EDWARD MADIGAN, SECRETARY, UNITED STATES DEPARTMENT OF AGRICULTURE, Defendant.



The opinion of the court was delivered by: JOYCE HENS GREEN

 On September 16, 1991, plaintiffs, four farming partnerships, filed the instant complaint and a motion for a preliminary injunction, alleging, inter alia, that the United States Department of Agriculture, Agricultural Stabilization and Conservation Service ("ASCS"), acting on behalf of the Commodity Credit Corporation ("CCC"), wrongfully suspended plaintiffs from participation in a federal farm program and withheld payments due plaintiffs for the 1987 crop year, and they seek injunctive and declaratory relief. On October 10, 1991, in response to plaintiffs' motion for a preliminary injunction, defendant filed a motion to dismiss.

 On November 26, 1991, there was a hearing on plaintiffs' motion for a preliminary injunction and on defendant's motion to dismiss. At that hearing, counsel for plaintiffs candidly admitted that plaintiffs could not meet their burden of demonstrating irreparable injury and thus, withdrew their motion for a preliminary injunction. Having considered the arguments raised at oral argument and in the pleadings, and for the following reasons, defendant's motion to dismiss shall be denied.

 I. BACKGROUND

 According to the Complaint, plaintiffs' farming operations involve participation in a federal farm program called the Price Support and Production Adjustment Program for Wheat, Corn, and Cotton and Other Commodities ("Production Adjustment Program" or the "farm program(s)"). The farm program is funded by the CCC, and the day-to-day operations of administering it are performed by employees of the ASCS.

 The Secretary of Agriculture uses local and state committees, which were established as part of ASCS, to administer the programs. The local county committee consists of producers from within the county elected by other producers, and the statewide committee consists of producers from each state selected by the Secretary. The State Committee hears appeals from final determinations of the counties in that state. A national ASCS office in Washington, D.C., headed by the Deputy Administrator, State and County Operations ("DASCO"), directs the implementation of the programs, supervises the county and state committees, and renders the final determinations of appeals from the state committees.

 Farmers who receive funding through the CCC are subject to limitations in the amount of payments they may receive. In essence, each "person" is limited to $ 50,000 in payments, and although the term "person" was not defined by Congress, the Secretary's regulations define "person" to include individuals, partnerships, and corporations that are economically independent units.

 Each of the plaintiffs submitted a 1987 farm operating plan on March 23, 1987 to the Fresno County Committee. On March 30, 1987, the Fresno County ASCS Committee notified plaintiffs that they were considered 12 persons eligible to receive program benefits for the 1987 crop year. Plaintiffs went forward and farmed in reliance on that determination.

 The Complaint further alleges that in September, 1988, plaintiffs were selected for payment limitation review by a special task force. As a result of this review, plaintiffs were notified on April 19, 1989, by letter from the California State ASCS Office, that the four general partnerships were determined ineligible for payment for 1987. *fn1" Specifically, plaintiffs were advised that they were limited to one "person" for crop year 1987.

 Plaintiffs appealed the decision to the State Committee, which case was heard on September 6, 1989. On September 12, 1989, however, the State Committee ruled that "'the manner in which the new partnerships assumed the liabilities of the old partnership and the subsequent payment of bills was a violation of the financing rules in Handbook 5-CM as well as 7 C.F.R. 795.3.'" Complaint, P15.

 II. DISCUSSION

 In viewing a motion to dismiss, "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80 , 78 S. Ct. 99 (1957). The factual allegations of the complaint must be presumed true and liberally construed in favor of plaintiff. Shear v. National Rifle Association, 196 App. D.C. 344, 606 F.2d 1251, 1253 (D.C. Cir. 1979); 5A C. Wright & A. Miller, Federal Practice and Procedure, § 1357, p. 304 (1990). The plaintiff is ...


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