United States Court of Appeals for the Federal Circuit 

 2009-5015 

ACCEPTANCE INSURANCE COMPANIES, INC., 

 Plaintiff-Appellant, 

v. 

UNITED STATES, 

 Defendant-Appellee. 

Lewis S. Wiener, Sutherland Asbill & Brennan LLP, of Washington, DC, argued 

for plaintiff-appellant. Of counsel were Ronald Massumi and G. Brendan Ballard; and 

Patrick B. Griffin, Kutak Rock LLP, of Omaha, Nebraska. 

Michael N. O’Connell, Trial Attorney, Commercial Litigation Branch, Civil 

Division, United States Department of Justice, of Washington, DC, argued for 

defendant-Appellee. With him on the brief were Michael F. Hertz, Acting Assistant 

Attorney General, Jeanne E. Davidson, Director, and Mark A. Melnick, Assistant 

Director. 

Appealed from: United States Court of Federal Claims 

Judge Thomas C. Wheeler 
United States Court of Appeals for the Federal Circuit 

2009-5015 

ACCEPTANCE INSURANCE COMPANIES, INC., 

 Plaintiff-Appellant, 

v. 

UNITED STATES, 

 Defendant-Appellee. 

Appeal from the United States Court of Federal Claims in case No. 03-CV-2794, Judge 

Thomas C. Wheeler. 

_________________________ 

DECIDED: October 1, 2009 

_________________________ 

Before RADER, PLAGER, and SCHALL, Circuit Judges. 

SCHALL, Circuit Judge. 

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. 

BACKGROUND 

I. 

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, 

2009-5015 2
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. ¶ 4.1

 

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.2 See Compl. ¶¶ 6–

8, 13. American Growers’ reinsurance relationships were governed by SRAs with the 

 1

 We note that, for purposes of this appeal, the parties do not contest whether 

the RMA acted within its authority when it rejected the particular transaction at issue, 

the proposed sale to Rain & Hail. 

2

 Neither Acceptance nor the government contends that the FCIC and the 

RMA cannot be considered as one for the purposes of this appeal. 

2009-5015 3
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.3

 

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 

 3

 Policyholder surplus refers to the amount of an insurance company’s assets, 

in excess of its obligations, that could be used to pay policyholders for insured losses. 

2009-5015 4
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

2009-5015 5
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.” Id. In further support of its conclusion that 

Acceptance had not alleged a cognizable property interest, the court noted that 

2009-5015 6
Acceptance had voluntarily entered into an area of pervasive government regulation 

and that any alleged property interest was dependent on the pertinent regulations. Id.

at 116–17. 

As an alternative rationale for dismissing Acceptance’s claim, the court held that, 

even assuming the existence of a cognizable property interest, the property interest, at 

most, was “a letter of intent to enter into an agreement [and not even] an actual 

contract.” Dismissal Order, 84 Fed. Cl. at 119. Starting from that premise, the court 

ruled that the Omnia Commercial, 262 U.S. at 508–513, line of cases—holding that a 

viable taking does not occur when the government merely causes the loss of benefits of 

a contract or simply frustrates business expectations—precluded the “taking” of that 

interest. See Dismissal Order, 84 Fed. Cl. at 117–120. Acceptance has timely 

appealed to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). 

DISCUSSION 

I. 

As noted, the Court of Federal Claims dismissed Acceptance’s takings claim on 

the pleadings pursuant to RCFC 12(b)(6). In order to avoid dismissal for failure to state 

a claim, a complaint must allege facts “plausibly suggesting (not merely consistent 

with)” a showing of entitlement to relief. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 

557 (2007); Cambridge, 558 F.3d at 1335. At the same time, a court is “not bound to 

accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. 

at 555 (quoting Papasan, 478 U.S. at 286). “The question of whether a complaint was 

properly dismissed for failure to state a claim upon which relief could be granted is one 

2009-5015 7
of law, which we review independently.” Highland Falls-Fort Montgomery Cent. Sch. 

Dist. v. United States, 48 F.3d 1166, 1170 (Fed. Cir. 1995). 

The Fifth Amendment to the United States Constitution proscribes the taking of 

private property “for public use, without just compensation.” U.S. Const. V, cl. 4. “Real 

property, tangible property, and intangible property, all may be the subject of takings 

claims.” Conti v. United States, 291 F.3d 1363, 1338–39 (Fed. Cir. 2002) (citing Lucas

v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992), Ruckelshaus v. Monsanto Co., 

467 U.S. 986, 1003–04 (1984), and Andrus v. Allard, 444 U.S. 51, 65 (1979)). 

A “taking” may occur either by physical invasion or by regulation. See, e.g., 

Lucas, 505 U.S. at 1014–15. The Supreme Court has long recognized that “if regulation 

goes too far it will be recognized as a taking.” Penn. Coal Co. v. Mahon, 260 U.S. 393, 

415 (1922); see, e.g., Lucas, 505 U.S. at 1014–19; Am. Pelagic Fishing Co. v. United 

States, 379 F.3d 1363, 1371 (Fed. Cir. 2004); Maritrans Inc. v. United States, 342 F.3d 

1344, 1351 (Fed. Cir. 2003); Conti, 291 F.3d at 1339. This case concerns an alleged 

regulatory taking. 

When evaluating whether governmental action constitutes a taking without just 

compensation, a court employs a two-part test. First, the court determines whether the 

claimant has identified a cognizable Fifth Amendment property interest that is asserted 

to be the subject of the taking. Second, if the court concludes that a cognizable 

property interest exists, it determines whether that property interest was “taken.” See, 

e.g., Palmyra Pac. Seafoods, L.L.C. v. United States, 561 F.3d 1361, 1364 (Fed. Cir. 

2009); Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206, 1212–13 (Fed. Cir. 

2005); Am. Pelagic Fishing, 379 F.3d at 1372; Conti, 291 F.3d at 1339. “[W]e do not 

2009-5015 8
reach this second step without first identifying a cognizable property interest.” Air 

Pegasus, 424 F.3d at 1213; see, e.g., Am. Pelagic Fishing, 379 F.3d at 1372. 

II. 

A. 

On appeal, Acceptance goes to some length to explain its takings claim. It states 

that, “as a direct consequence of the RMA’s rejection of the sale of assets to Rain & 

Hail,” it “lost the entirety of the crop insurance business it conducted through its whollyowned crop insurance subsidiary, American Growers, including a large and valuable 

portfolio of in-force policies.” Acceptance’s Br. 8. Amplifying, Acceptance points out 

that after the RMA refused to approve the sale of American Growers, the NDOI seized 

control of the company’s policies. Thereafter, according to Acceptance, the RMA 

controlled the disposition and redistribution of the American Growers insurance 

portfolio. Acceptance argues that these actions collectively constituted a categorical 

taking. 

Contending that the Court of Federal Claims’ basis for dismissal was incorrect, 

Acceptance argues that the court incorrectly characterized the asserted property 

interest as only involving “the taking of a contract or a proposed sale.” In Acceptance’s 

view, this characterization was incorrect because it alleged the taking of neither a 

contract nor a proposed sale, but instead consistently emphasized that the government 

took actual property—namely, the American Growers crop insurance business. Thus, 

Acceptance urges, because the government took actual property, it (Acceptance) did 

assert a cognizable property interest, and therefore its takings claim is distinguishable 

from those asserted in cases such as Mitchell Arms, 7 F.3d 212. 

2009-5015 9
Acceptance points out that in Mitchell Arms, because the plaintiff actually 

retained possession of its property—i.e., the firearms at issue—the “only affected 

interest was the right to sell imported assault weapons in the United States, which 

existed only by virtue of a revocable federal permit to do so.” Acceptance’s Br. 11–12. 

In contrast, according to Acceptance, it is not complaining of the loss of the right in a 

particular use of its property—i.e., the right to sell its property—but rather the actual loss 

of the property itself—i.e., the entire crop insurance business of American Growers. 

Responding, the government argues that the Court of Federal Claims correctly 

found no cognizable property interest. The government points out that American 

Growers’ insurance policies were at all times subject to, and governed by, the pertinent 

FCIC regulatory scheme, which provides the RMA with the authority to reject certain 

proposed transactions. The government argues that, as a result, the court correctly 

ruled that no taking could occur because the “taking alleged relates to a right to 

exclude” that Acceptance never possessed—namely, “the right to exclude the 

Government from reviewing sales of crop insurance policies.” Gov’t Br. 22–23. 

Additionally, according to the government, the court correctly held that, although the 

government may have precluded Acceptance from realizing a business expectation by 

preventing the proposed sale, that expectation was entirely dependent upon the RMA’s 

approval of the sale.4

 

 4

 Both parties make arguments about whether the Court of Federal Claims 

correctly dismissed Acceptance’s claim based on the Omnia Commercial line of cases. 

Because we hold that Acceptance failed to assert a cognizable property interest, we do 

not reach those arguments. 

2009-5015 10
B. 

 As the first step in our analysis, we must identify what, if anything, was the 

subject of the alleged taking. See Branch v. United States, 69 F.3d 1571, 1575 (Fed. 

Cir. 1995) (“In analyzing a takings claim, a court must first determine what was taken.”). 

As just noted, in its briefing on appeal Acceptance characterizes the alleged taking as 

consisting of several distinct actions viewed in concert. We have stated, however, that 

such a “characterization . . . is too broad” because “it does not pinpoint what step in the 

sequence of events . . . constituted conduct that the government could not engage in 

without paying compensation.” Id. (rejecting the plaintiff’s characterization of the 

alleged “taking,” which consisted of several distinct events); see, e.g., Kitt v. United 

States, 277 F.3d 1330, 1336 (Fed. Cir. 2002) (stating that analysis of a takings claim 

requires identifying the precise governmental action that is the subject of the claim); 

Creppel v. United States, 41 F.3d 627, 634 (Fed. Cir. 1994) (“[T]his court must 

determine when the events fixing any potential Government liability [for a taking] 

occurred.”). Notwithstanding the arguments in its brief, Acceptance’s First Amended 

Complaint and statements to the court pinpoint the precise action that it contends 

constituted conduct the government could not engage in without paying compensation. 

That action was the RMA’s rejection of the proposed sale to Rain & Hail of American 

Growers’ portfolio of insurance policies. 

 Looking to the complaint, as we must when reviewing a dismissal pursuant to 

RCFC 12(b)(6), Acceptance consistently focuses on the RMA’s rejection of the 

proposed sale. See generally Compl. ¶¶ 21–30. Specifically, Acceptance states: “The 

RMA exercised its regulatory authority in rejecting the proposed Rain and 

2009-5015 11
Hail/Acceptance transaction, rendering valueless American Growers’ insurance 

assets . . . .,” Compl. ¶ 21; “Acceptance held a reasonable investment backed 

expectation that the RMA would approve the proposed Rain and Hail/Acceptance 

transaction,” id. ¶ 23. Moreover, in the paragraph that summarizes its takings claim, 

Acceptance asserts that “[w]hen the RMA . . . rejected the proposed Rain and 

Hail/Acceptance transaction . . . it effected a taking of Acceptance’s property.” Id. ¶ 24. 

Indeed, except for a solitary paragraph in the “Facts” section, which merely provides 

additional background about the RMA’s later actions, see id. ¶ 18, Acceptance’s First 

Amended Complaint focuses exclusively on the RMA’s rejection of the proposed sale to 

Rain & Hail as the alleged taking. 

 Moreover, at oral argument—not only in this appeal, but in the previous appeal 

relating to the same takings claim, see Remand Decision—Acceptance made it clear 

that it alleges a taking occurred when the RMA rejected the proposed sale. In the 

previous appeal, because the court was skeptical about whether Acceptance had in fact 

brought a takings claim, the court asked “[c]an you help me identify the taking here?” 

See Oral Arg., Aug. 8, 2007, 1:01–1:30, available at

http://oralarguments.cafc.uscourts.gov/mp3/2007-1127.mp3. Responding, Acceptance 

stated that it “asserts a Fifth Amendment takings claim based on the government’s 

action in preventing Acceptance from selling its in-force crop insurance business and 

other insurance related assets . . . .” Id. (emphasis added). When asked to be more 

specific, Acceptance reiterated that the alleged taking occurred “[w]hen [it] wanted to 

sell its in-force insurance policies to Rain & Hail,” but was prevented from doing so by 

the RMA. See id. at 2:07–14. In fact, Acceptance pinpointed the RMA’s action as the 

2009-5015 12
alleged taking two other times during the same oral argument. See id. at 3:34–46 (“As 

a consequence of the RMA . . . saying [it] would not authorize or approve of the 

requested transaction.”); id. at 4:40–5:05 (“It is the regulatory action of denying the sale 

. . . .”). At the same time, Acceptance was consistent during oral argument in this 

appeal, emphasizing that a taking allegedly occurred when the RMA rejected the 

proposed sale of American Growers’ portfolio. See, e.g., Oral Arg., Aug. 5, 2009, 6:04–

6:16, available at http://oralarguments.cafc.uscourts.gov/mp3/2009-5015.mp3 (“The 

taking is the frustration of saying we will not approve the sale, . . . .”); id. at 7:45–8:00 

(“Court: They did not take that property. Acceptance: They certainly did your Honor. . . . 

By saying to Acceptance, you may not sell those policies to Rain & Hail.”).5 

 In short, the action that allegedly constituted conduct that the government could 

not engage in without paying compensation was the RMA’s rejection of the proposed 

sale to Rain & Hail of American Growers’ insurance policy portfolio. We therefore must 

determine what interest, if any, was affected when that action occurred and whether 

Acceptance possessed a legally cognizable Fifth Amendment property right in that 

interest. 

C. 

The Court of Federal Claims determined that the interest that was affected by the 

RMA’s action was Acceptance’s interest in selling American Growers’ crop insurance 

policies to Rain & Hail. See Dismissal Order, 84 Fed. Cl. at 116. It also determined that 

such interest was not a legally cognizable property interest for purposes of the Fifth 

 5

 Identifying the alleged “taking” as the RMA’s rejection of the proposed sale is 

consistent with Acceptance’s $21.5 million request for damages, which was the value of 

the proposed sale rejected by the RMA. See Compl. ¶¶ 10, 12, 27. 

2009-5015 13
Amendment. See id. at 116–17. We agree with the court on both counts. The first 

point requires little discussion. Plainly, what the RMA’s action affected was 

Acceptance’s ability to freely sell American Growers’ insurance portfolio to Rain & Hail. 

The critical question is whether this was a legally cognizable property interest. 

It is well settled that “‘existing rules and understandings’ and ‘background 

principles’ derived from an independent source, such as state, federal, or common law, 

define the dimensions of the requisite property rights for purposes of establishing a 

cognizable taking.” Conti, 291 F.3d at 1340; see Lucas, 505 U.S. at 1029–30; Am. 

Pelagic Fishing, 379 F.3d at 1376 (“We determine whether an asserted right is one of 

the rights in the bundle of sticks of property rights that inheres in a res by looking to 

‘existing rules or understandings’ and ‘background principles’ derived from an 

independent source such as state, federal, or common law.” (quoting Lucas, 505 U.S. at 

1030)). These existing rules often define “the citizen’s relation to the physical thing,” 

which may include the right to possess, use, and dispose of the property at issue. See, 

e.g., United States v. Gen. Motors Corp., 323 U.S. 373, 378 (1945) (explaining that the 

Fifth Amendment is not concerned “with other collateral interests which may be incident 

to . . . ownership”); Conti, 291 F.3d at 1340. 

Under the “background principles” and rules existing when Acceptance entered 

into the crop insurance business, Acceptance could not freely transfer the policies at 

issue. Rather, such action was subject to the RMA’s approval. Therefore, Acceptance 

did not possess a cognizable Fifth Amendment property interest in freely selling 

American Growers’ portfolio of insurance policies to Rain & Hail. See, e.g., Am. Pelagic 

Fishing, 379 F.3d at 1381 (“Because the right to use . . . was not inherent in its 

2009-5015 14
ownership of the [property], [but instead was totally dependent upon the regulatory 

scheme,] American Pelagic did not suffer the loss of a property interest . . . when its . . . 

permits were revoked.”); Conti, 291 F.3d at 1342 (affirming dismissal for failure to state 

a claim because “[t]he absence of crucial indicia of a property right, [such as the right to 

sell, assign, or otherwise transfer,] coupled with the government’s irrefutable retention of 

the right to suspend, revoke, or modify [the plaintiff’s] permit, compels the conclusion 

that” there was no cognizable property right). 

As a general matter, we have no reason to assume that an insurance company, 

such as American Growers, does not have a property right in the contracts of insurance 

(the policies) it sells. Similarly, we have no reason to assume that such property right 

does not include the common law right to sell or assign its interest in the contracts. 

However, be that as it may, by voluntarily entering into the federally regulated crop 

insurance business, Acceptance relinquished its right to freely transfer American 

Growers’ insurance policies, in exchange for the benefits of the crop insurance program, 

such as being reinsured by the government for certain losses. See, e.g., Am. Pelagic 

Fishing, 379 F.3d at 1379 (“Because it was already in place by the time [the plaintiff] 

purchased the Atlantic Star, the [regulatory scheme] was an ‘existing rule’ or 

‘background principle [ ]’ of federal law that inhered in [the plaintiff’s] title to the vessel.” 

(quoting Lucas, 505 U.S. at 1029–30)). Accordingly, because the RMA had the 

authority to deny the sale of the policies at issue, Acceptance, through American 

Growers, did not possess the unfettered right to sell or otherwise transfer the policies, 

thus precluding the existence of a cognizable property interest. See, e.g., Am. Pelagic 

Fishing, 379 F.3d at 1374 (rejecting an alleged property interest in permits and 

2009-5015 15
authorization letters because the government retained the right to deny or sanction 

those permits and letters); Conti, 291 F.3d at 1341–42 (finding no cognizable property 

interest in a fishing permit because the plaintiff did not have “[t]he right[ ] to sell, assign, 

or otherwise transfer” the permit and “the government at all times retained the right to 

revoke, suspend, or modify the permit”). In other words, when the RMA decided to 

disapprove of the sale to Rain & Hail, there was no right to freely alienate the policies 

extant in Acceptance/American Growers with which that decision interfered. 

Essentially, Acceptance asks us to recognize a cognizable property right in a decision 

by the RMA not to exercise its authority to reject the sale of insurance policies subject to 

the crop insurance regulatory scheme. We decline to do that. See Conti, 291 F.3d at 

1342 n.5 (finding no cognizable property right “in the government’s discretionary 

decision not to exercise its explicitly granted authority to revoke, suspend, or modify the 

permit” (citing Bowen v. Public Agencies Opposed to Soc. Sec. Entrapment, 447 U.S. 

41, 55 (1986))). Even assuming that the RMA had previously approved of other similar 

transactions, any expectation that the RMA would approve of future transactions does 

not rise to the level of a cognizable property interest because simply “enjoying a use of . 

. . property that the government chose not to disturb,” although could have, does “not 

equate to a cognizable property interest.” Am. Pelagic Fishing, 379 F.3d at 1377 

(“[T]here is a distinction between simply not being disturbed in the particular use of 

one’s property and having the right to that use of the property. Clearly, in order for there 

to be a cognizable property interest sufficient to support a takings claim, the latter must 

be true.”). 

2009-5015 16
Acceptance argues, however, that because its physical property—specifically, 

American Growers—was actually “taken,” it did suffer a taking. According to 

Acceptance, American Pelagic Fishing, Conti, and Mitchell Arms are therefore 

distinguishable. In each of those cases, Acceptance urges, the plaintiff retained 

physical possession of the property in question and was only prevented from using the 

property in a particular manner—e.g., selling the property. We disagree. When the 

RMA rejected the proposed sale of American Growers’ policies to Rain & Hail, the 

government did not actually “take” American Growers. Rather, Acceptance still 

maintained possession of American Growers and held the same property interest as it 

had prior to the RMA’s rejection—a property interest that included having American 

Growers subject to the coverage and capital requirements of the pertinent crop 

insurance regulations. Put another way, when the RMA rejected the proposed sale, 

Acceptance possessed no more or no less of a property interest in American Growers 

than it did prior to the RMA’s rejection. 

In sum, contrary to Acceptance’s arguments, when the RMA rejected the 

proposed sale, it did not actually take American Growers’ insurance policy portfolio. 

Rather, Acceptance, through its ownership of American Growers, retained possession 

of the polices, but was barred from selling them to a particular buyer, Rain & Hail. As a 

result, it was prevented from realizing a business expectation. Under these 

circumstances, Acceptance’s takings claim is not distinguishable from our decisions in 

American Pelagic Fishing, Conti, and Mitchell Arms, where physical property was 

retained but a business expectation was frustrated. 

2009-5015 17
2009-5015 18

CONCLUSION 

For the foregoing reasons, Acceptance did not have a cognizable property 

interest for Fifth Amendment purposes in the ability to freely transfer American Growers’ 

portfolio of insurance policies. Thus, there was no cognizable property interest that 

could be “taken” when the RMA rejected the proposed sale to Rain & Hail. We thus 

affirm the decision of the Court of Federal Claims that dismissed Acceptance’s takings 

claim pursuant to RCFC 12(b)(6). Because we have ruled that Acceptance failed to 

allege a cognizable property interest, we do not need to address the parties’ arguments 

relating to the Court of Federal Claims’ alternative rationale under the Omnia 

Commercial line of cases for dismissing Acceptance’s claim. 

AFFIRMED