Appeal from the United States Court of Federal Claims in case No. 03-CV-2794, Judge Thomas C. Wheeler.
The opinion of the court was delivered by: Schall, Circuit Judge.
Before RADER, PLAGER, and SCHALL, Circuit Judges.
Acceptance Insurance Companies, Inc. ("Acceptance") seeks reversal of the decision of the United States Court of Federal Claims that dismissed its claim for a compensable taking under the Fifth Amendment. Acceptance Ins. Cos. v. United States, 84 Fed. Cl. 111 (2008) ("Dismissal Order"). Acceptance brought suit alleging that, when the Risk Management Agency ("RMA"), a component of the Department of Agriculture, declined to approve a proposed sale of certain crop insurance assets to Rain and Hail LLC ("Rain & Hail"), the government rendered those assets valueless and, consequently, effected a categorical taking in violation of the Fifth Amendment.
The Court of Federal Claims dismissed Acceptance's takings claim pursuant to RCFC 12(b)(6) for two reasons. Id. at 120. First, the court held that Acceptance had not alleged a legally cognizable property interest for purposes of the Fifth Amendment. Id. at 115--17. Second, the court held that, even if there was a legally cognizable property interest, Acceptance's claim was precluded under the line of cases following the Supreme Court's decision in Omnia Commercial Co. v. United States, 261 U.S. 502 (1923). See Dismissal Order, 84 Fed. Cl. at 117--20. Because the Court of Federal Claims did not err in holding that Acceptance had failed to allege a legally cognizable property interest for Fifth Amendment purposes, we affirm.
Our decision in Acceptance Insurance Cos. v. United States, 503 F.3d 1328 (Fed. Cir. 2007) ("Remand Decision"), which is discussed below, sets forth most of the pertinent facts. Additional facts recited herein are drawn from Acceptance's First Amended Complaint ("Compl."). See, e.g., Papasan v. Allain, 478 U.S. 265, 283--86 (1986) (stating that courts must accept the well-pleaded facts in the complaint as true when reviewing a dismissal for failure to state a claim); Cambridge v. United States, 558 F.3d 1331, 1335 (Fed. Cir. 2009) (looking to the well-pleaded facts in the complaint).
The Federal Crop Insurance Corporation ("FCIC") is a wholly-owned government corporation within the Department of Agriculture, established to regulate the crop insurance industry. Federal Crop Insurance Act, 7 U.S.C. §§ 1501, et seq. ("FCIA"); see Remand Decision, 503 F.3d at 1330. Private insurance companies offer crop insurance and are then reinsured (and regulated) by the FCIC. See Remand Decision, 503 F.3d at 1330. When a private insurance provider is eligible for reinsurance through the FCIC, the insurance provider and the FCIC enter into a Standard Reinsurance Agreement ("SRA"), pursuant to which the policies issued by the private insurance provider to producers of agricultural commodities are reinsured. Id.; Compl. ¶ 6. See generally 7 U.S.C. § 1508 (outlining the considerations and requirements that govern crop reinsurance). The RMA is an agency within the Department of Agriculture whose purpose is to supervise the FCIC. See 7 U.S.C. § 6933. Its responsibilities include the "[a]dministration and oversight of all aspects... of all programs authorized under the [FCIA]" and "any other functions as the Secretary considers appropriate." See id.; Remand Decision, 503 F.3d at 1330 & n.2. Among other things, the RMA has the authority to approve or disapprove certain transactions that affect the FCIC, such as transactions concerning insurance policies that are governed by SRAs. See, e.g., 7 U.S.C. §§ 1508(h), (k); 7 C.F.R. §§ 400.703--.706 (providing that the RMA will review submissions pertaining to provisions of insurance policies); Compl. ¶ 4.*fn1
Acceptance is a publicly traded insurance holding company. At the time relevant to this case, one of its holdings was American Growers Insurance Co. ("American Growers"), a corporation organized under the laws of Nebraska. American Growers provided crop insurance policies that were reinsured pursuant to the federal crop insurance program and, as such, were regulated by the FCIC/RMA.*fn2 See Compl. ¶¶ 6-- 8, 13. American Growers' reinsurance relationships were governed by SRAs with the FCIC. See id. ¶ 6. The company therefore was required to comply with certain coverage levels, prices, and premium rates determined by the FCIC. See id. ¶ 8. Because American Growers was organized under the laws of Nebraska, it also was regulated by the Nebraska Department of Insurance ("NDOI"). See id. ¶ 7.
In November of 2002, American Growers disclosed that it had suffered a $130 million loss, causing its policyholder surplus to fall below mandated levels.*fn3
Acceptance's Br. 4. Subsequently, on November 18, 2002, Acceptance entered into a non-binding letter of intent with Rain & Hail, another company in the crop insurance business. Under the letter of intent, the parties contemplated that Rain & Hail would purchase the crop insurance portfolio serviced by American Growers. See Compl. ¶¶ 9--11; Remand Decision, 503 F.3d at 1330--31. According to the letter of intent, Rain & Hail proposed to purchase approximately 360,000 of American Growers' insurance policies for $21.5 million. See Compl. ¶¶ 10, 12. Acceptance states that, "[b]ecause the insurance assets to be purchased by Rain and Hail were reinsured by the FCIC and [were] subject to the FCIC's general oversight authority over the crop insurance industry, the transaction between Acceptance and Rain & Hail was subject to approval by the RMA." Compl. ¶ 13; see Remand Decision, 503 F.3d at 1330--31. The Administrator of the RMA, however, rejected the proposed sale. According to Acceptance, this was because the Administrator determined the sale would be "detrimental" to the interests of farmers and taxpayers. See Compl. ¶¶ 15--16.
On November 22, 2002, the RMA "ordered American Growers to cease and desist [from] marketing and selling... any new insurance contracts under its reinsurance agreements with the FCIC." Compl. ¶ 18; see Remand Decision, 503 F.3d at 1330--31. In addition, the RMA notified American Growers that the FCIC would not reinsure any new insurance contracts for it. See Remand Decision, 503 F.3d at 1330-- 31. Soon thereafter, as a result of American Growers' poor financial condition, the NDOI placed the company under supervision and in statutory liquidation. See id. at 1331. Acceptance contends that the RMA then took control of the liquidation and redistributed a portion of American Growers' policies to other crop insurance companies. See Remand Decision, 503 F.3d at 1331. Acceptance received no compensation for the policies that the RMA redistributed. Acceptance alleges that these actions, in concert, effectively put American Growers out of business and rendered Acceptance's property (its interest in American Growers) valueless. Compl. ¶¶ 18, 19. II.
In due course, Acceptance filed suit in the Court of Federal Claims, alleging that "[w]hen the RMA, acting as agent of the United States, rejected the proposed Rain and Hail/Acceptance transaction..., it effected a taking of Acceptance's property, namely certain of Acceptance's assets, which were to be sold to Rain and Hail, for public use." Compl. ¶ 24. As explained in the Remand Decision, the government responded with a motion to dismiss for lack of jurisdiction, arguing that 7 U.S.C. § 1506(d) granted exclusive jurisdiction to the district courts over all suits against the FCIC. Remand Decision, 503 F.3d at 1331. Eventually, the Court of Federal Claims granted the government's motion to dismiss for lack of jurisdiction and transferred the case to the United States District Court for the District of Nebraska. Id. at 1331--32; see Acceptance Ins. Co. v. United States, 72 Fed. Cl. 299 (2006). However, on appeal of the district court's denial of Acceptance's motion to retransfer to the Court of Federal Claims, we held that, while 7 U.S.C. § 1506(d) provides exclusive jurisdiction in the district courts for suits against the FCIC, it does not divest the Court of Federal Claims of jurisdiction over a takings claim brought against the United States. See Remand Decision, 503 F.3d at 1338--39. Following our decision, Acceptance's action was returned to the Court of Federal Claims.
With the case back in the Court of Federal Claims, the government filed another motion to dismiss, but this time for failure to state a claim under RCFC 12(b)(6). On September 25, 2008, the court granted the government's motion and dismissed Acceptance's takings claim. Dismissal Order, 84 Fed. Cl. at 112. The court did so for two reasons. First, relying primarily on the rationale in cases such as Mitchell Arms, Inc. v. United States, 7 F.3d 212 (Fed. Cir. 1993), it concluded that Acceptance had not alleged a legally cognizable property interest for purposes of the Fifth Amendment. Dismissal Order, 84 Fed. Cl. at 115--17. Despite Acceptance's arguments that the property interest taken by the government was American Growers' tangible insurance portfolio, the court identified the property interest that Acceptance had alleged was taken as its "interest in selling its property to Rain and Hail." Id. at 116. In characterizing the property interest this way, the court noted that Acceptance's complaint focused on the RMA's rejection of the proposed sale as the alleged taking and that, following the RMA's rejection of the sale, Acceptance still "retained possession of the insurance portfolio at issue." ...