Opinion ID: 1235880
Heading Depth: 1
Heading Rank: 1

Heading: implied private right of action

Text: Hillesland contends that the trial court erred in concluding that there is no implied private right of action for wrongful discharge under the Farm Credit Act. Hillesland contends that termination of Farm Credit System employees without cause is prohibited by 12 U.S.C. § 2227(a)(3), which provides in pertinent part: Appointments, promotions, and separations so made shall be based on merit and efficiency and no political test or qualification shall be permitted or given consideration. The four-part test first enunciated in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26, 36 (1975), governs the determination of whether or not to imply a private right of action: In determining whether a private remedy is implicit in a statute not expressly providing one, several factors are relevant. First, is the plaintiff `one of the class for whose especial benefit the statute was enacted,' ... (emphasis supplied)  that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one?... Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?... And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? [Citations omitted.] Hillesland has failed to cite a single decision holding that there is an implied private right of action under the Farm Credit Act, 12 U.S.C. §§ 2001-2259. In fact, it appears that every court which has considered the issue has held that there is no implied right of action under the Act under the Cort test. See Bowling v. Block, 785 F.2d 556, 557 (6th Cir.), cert. denied, ___ U.S. ___, 107 S.Ct. 112, 93 L.Ed.2d 60 (1986); Smith v. Russellville Production Credit Association, 777 F.2d 1544, 1546-1548 (11th Cir. 1985); Brekke v. Volcker, 652 F.Supp. 651, 654 (D.Mont.1987); Schroder v. Volcker, 646 F.Supp. 132, 134-135 (D.Colo.1986); Creech v. Federal Land Bank of Wichita, 647 F.Supp. 1097, 1101 (D.Colo.1986); Aberdeen Production Credit Association v. Jarrett Ranches, Inc., 638 F.Supp. 534, 537 (D.S.D.1986); Farmer v. Wilkinson, No. 4-85-1448 (D.Minn.1986); Corum v. Farm Credit Services, 628 F.Supp. 707, 719-720 (D.Minn.1986); Spring Water Dairy, Inc. v. Federal Intermediate Credit Bank of St. Paul, 625 F.Supp. 713, 717-720 (D.Minn. 1986); Apple v. Miami Valley Production Credit Association, 614 F.Supp. 119, 122 (S.D.Ohio 1985), aff'd on other grounds, 804 F.2d 917 (6th Cir.1986); Hartman v. Farmers Production Credit Association of Scottsburg, 628 F.Supp. 218, 222 (S.D.Ind. 1983); Production Credit Association of Worthington v. Van Iperen, 396 N.W.2d 35, 37 (Minn.Ct.App. 1986); Johansen v. Production Credit Association of Marshall-Ivanhoe, 378 N.W.2d 59, 62 (Minn.Ct.App.1985). See also Federal Land Bank of Saint Paul v. Overboe, 404 N.W.2d 445, 448 (N.D.1987), and Federal Land Bank of St. Paul v. Halverson, 392 N.W.2d 77, 83 (N.D.1986) ( recognizing that federal courts have unanimously concluded that there is no private cause of action against entities of the Farm Credit System under the Farm Credit Act and regulations). Hillesland raises two distinctions between this case and those decisions which have refused to imply a private cause of action under the Act. First, Hillesland notes that most of those decisions involved actions by borrowers or customers of the Farm Credit System, whereas his claim is for wrongful discharge pursuant to provisions added in the 1959 amendments to the Farm Credit Act. Hillesland contends that those amendments were intended solely to benefit Farm Credit System employees and that an implied right of action under the amendments is appropriate. Although the 1959 amendments did include some provisions dealing with employment considerations, there were a number of other provisions. The preamble to the 1959 enactment states that it is an act To amend the Federal Farm Loan Act to transfer responsibility for making appraisals from the Farm Credit Administration to the Federal land banks, and for other purposes. Farm Credit Act of 1959, Pub.L. No. 86-168, 73 Stat. 384. Furthermore, the legislative history of the 1959 enactment indicates that its intent was to effectuate fully the express policy of the Farm Credit Act of 1953 to encourage and facilitate borrower participation in the management, control, and ownership of the Farm Credit System. See, e.g., H.R.Rep. No. 287, 86th Cong., 1st Sess., reprinted in 1959 U.S. Code Cong. & Ad.News 2123. Hillesland has failed to identify any legislative history to support his contention that the 1959 enactment was primarily an employees' rights bill, and we can find no evidence of Congressional intent to create a private right of action on behalf of Farm Credit System employees. We also note that the one federal court which has addressed the issue has held that Farm Credit System employees do not have an implied private right of action for wrongful discharge under the Farm Credit Act. See Corum v. Farm Credit Services, supra, 628 F.Supp. at 719-720. Hillesland also contends that the legislative history of the 1985 amendments to the Farm Credit Act suggests that Congress did intend to create a private remedy under the Act. In particular, Hillesland cites the comments of Representative De la Garza in floor debate of the Farm Credit Amendments Act of 1985, Pub.L. No. 99-205, 99 Stat. 1678: [A] major section of this bill does establish a set of borrowers' rights, and it would be my understanding that the rights of applicants and member-borrowers as set forth in this act and in the regulations of the Farm Credit Administration shall be enforceable in courts of law. 131 Cong.Rec. H11519 (daily ed. Dec. 10, 1985). Initially we note that Representative De la Garza spoke only of enforcement of rights of applicants and member-borrowers. We also agree with those federal courts which have held that Representative De la Garza's statements concerning the 1985 amendments are irrelevant to a determination of whether Congress intended to create a private right of action under earlier-enacted provisions of the Farm Credit Act. See Aberdeen Production Credit Association v. Jarrett Ranches, Inc., supra, 638 F.Supp. at 536-537; Corum v. Farm Credit Services, supra, 628 F.Supp. at 719-720 n. 11; Production Credit Association of Worthington v. Van Iperen, supra, 396 N.W.2d at 38. We particularly agree with the following reasoning in Aberdeen Production Credit Association v. Jarrett Ranches, Inc., supra, 638 F.Supp. at 537: This Court does not read [Representative De la Garza's] statement to indicate that all regulations of the Farm Credit System were intended to be enforceable in courts of law. The statement was expressly made in reference to `borrowers' rights' established in Title III, § 301 et seq. of the 1985 Farm Credit Amendments Act  the `rights' of disclosure and access to documents. The defendants are not claiming any violation of rights allegedly established under the 1985 amendments. Therefore, this Court is not required to consider the significance of the 1985 Farm Credit Amendments Act in determining the existence of a private cause of action. Because the acts complained of occurred prior to its passage, the statements of Representative De la Garza are irrelevant to the present action.... Moreover, this Court declines to find any significant probative value in using subsequent legislative history to establish the intent of Congress in enacting the original legislation in 1971. [Citations omitted.] Having found no relevant legislative history which indicates a Congressional intent to create a private right of action for wrongful discharge on behalf of Farm Credit System employees, we conclude that no such private right of action exists under the Farm Credit Act. [1]