Source: http://openjurist.org/995/f2d/1505/state-of-kansas-todd-v-united-states
Timestamp: 2014-04-17 01:01:30
Document Index: 440087332

Matched Legal Cases: ['§ 400', '§ 1501', '§ 1502', '§ 1503', '§ 1506', '§ 1516', '§ 1508', '§ 1508', '§ 1508', '§ 1508', '§ 1507', '§ 1516', '§ 1506']

995 F2d 1505 State of Kansas Todd v. United States | OpenJurist
995 F. 2d 1505 - State of Kansas Todd v. United States	Home995 f2d 1505 state of kansas todd v. united states
995 F2d 1505 State of Kansas Todd v. United States 995 F.2d 1505
STATE OF KANSAS, ex rel. Ron TODD, Commissioner of Insuranceof the State of Kansas, Plaintiff-Appellant,v.UNITED STATES of America, et al., Defendants-Appellees.
No. 92-3203.
John J. Knoll, Atty., Office of the Atty. Gen., State of Kan. (John W. Campbell, Deputy Atty. Gen., State of Kan., Robert T. Stephan, Atty. Gen., State of Kan., on brief), for plaintiff-appellant.
Thomas M. Bondy, Atty., Appellate Staff Civil Div., Dept. of Justice (Stuart M. Gerson, Asst. Atty., Gen., Lee Thompson, U.S. Atty., Robert S. Greenspan, Atty., Appellate Staff Civil Div., Dept. of Justice, with him on brief), for defendants-appellees.
MOORE, Circuit Judge, MCWILLIAMS, Senior Circuit Judge, and WOOD, JR., Senior Circuit Judge.*
The state of Kansas objects to recent regulations, 7 C.F.R. §§ 400.351-52, promulgated by the Federal Crop Insurance Corporation ("FCIC") under the Federal Crop Insurance Act, 7 U.S.C. §§ 1501-20, that preempt state laws and regulations which are inconsistent with the FCIC's terms and conditions in its insurance policies, including contracts insured or reinsured by the FCIC. The district court found the FCIC did not exceed its statutory authority in promulgating the regulations. The court found the administrative record showed the FCIC's adoption of the regulations was not arbitrary or capricious. Because we agree with the district court, we affirm.
The Federal Crop Insurance Act was enacted in 1938 as part of President Franklin Delano Roosevelt's New Deal legislation to rescue and preserve agriculture in order to restore it to its previous position of strength in the national economy. See generally James T. Graves, Comment, Federal Crop Insurance: An Investment in Disappointment??, 7 Univ. of Kan.L.Rev. 361 (1959); Wayne Rasmussen, The New Deal & Its Legacy: Agricultural Policies after Fifty Years, 68 Minn.L.Rev. 353 (1983). Congress significantly expanded the federal crop insurance program in 1980, and the program remains today "one of a panoply of government programs designed to encourage, by subsidy if necessary, the nation's agricultural business." R & R Farm Enters., Inc. v. Federal Crop Ins. Corp., 788 F.2d 1148, 1154 (5th Cir.1986). Its express purpose is "to promote the national welfare by improving the economic stability of agriculture through a system of crop insurance and providing the means for the research and experience helpful in devising and establishing such insurance." 7 U.S.C. § 1502.
The FCIC, a wholly government-owned corporate body, is an agency within the Department of Agriculture designated by Congress to implement the crop insurance program. Id. § 1503. The FCIC has "such powers as may be necessary or appropriate for the exercise of the powers herein specifically conferred upon the [FCIC] and all such incidental powers as are customary in corporations generally." Id. § 1506(j). The Secretary of Agriculture and the FCIC are authorized to issue regulations necessary to carry out the provisions of the Act. Id. § 1516(b).
The FCIC provides multiple risk crop insurance by several means. The Act authorizes the FCIC to enter directly into insurance contracts with producers of agricultural commodities. Id. § 1508(a). The FCIC may also reinsure crop insurance contracts between producers and private insurance companies. Id. § 1508(h). The FCIC will pay the private insurance companies' operating and administrative costs with respect to those policies which the FCIC reinsures. Id.
In 1980, the changes to the Act were designed in large part to increase participation in the crop insurance program by producers because increased participation was deemed essential for the program's success. H.R. No. 430, 96th Cong., 2d Sess. 11-13 (1980), reprinted in 1980 U.S.C.C.A.N. 3068, 3073-75. In order to foster participation, additional premium subsidies were authorized by Congress, and the program was expanded in its geographical area and number of commodities covered by insurance. 7 U.S.C. § 1508. Congress further recognized that in order to achieve its goal of increased participation, the FCIC should make better use of the experience and resources of private insurance companies. Congress wanted to avoid building another huge federal agency when the private sector could help, with the encouragement of federal reinsurance contracts. H.R. No. 430, 96th Cong., 2d Sess. 11-13 (1980), reprinted in 1980 U.S.C.C.A.N. 3068, 3073-75. Congress directed the FCIC "to provide reinsurance, to the maximum extent practicable." 7 U.S.C. § 1508(h). See id. § 1507(c). Today, more than 85% of the federal insurance for producers of agricultural commodities is through these reinsurance contracts.
The FCIC's authority to set "the terms and conditions" of its government insurance contracts in order to carry out the purposes of the Act is plenary, as delegated by Congress. Id. § 1516(b); Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 3, 92 L.Ed. 10 (1947). Congress specifically provided that "State and local laws or rules shall not apply to contracts or agreements of the [FCIC] or the parties thereto to the extent that such contracts or agreements provide that such laws or rules shall not apply, or to the extent that such laws or rules are inconsistent with such contracts or agreements." 7 U.S.C. § 1506