Opinion ID: 545560
Heading Depth: 2
Heading Rank: 7

Heading: Alternate Remedies

Text: 106 The majority adopts the view of the Harper court that Congress has armed the Farm Credit System with a variety of administrative remedies to assure compliance with the borrowers' rights provisions of the Agricultural Credit Act of 1987. Also, by entrusting the Farm Credit Administration (FCA) in the first instance with enforcement of the Act, according to Harper, Congress provided a mechanism that fosters consistency in interpretation and application and minimizes the potential expense and delay of numerous private court challenges to the conduct of institutions within the System. 107 The plain fact, however, is that the FCA is in no position to effectively enforce the borrowers' rights provisions of the 1987 Act. The farm borrowers have no way to invoke the remedial powers of the FCA. There is no procedure for filing charges or complaints. As the Supreme Court noted in Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979), 108 [The Supreme Court] has never withheld a private remedy where the statute explicitly confers a benefit on a class of persons and where it does not assure those persons the ability to activate and participate in the administrative process contemplated by the statute. 109 Id. at 706 n. 41, 99 S.Ct. at 1963 n. 41. There is no such assurance here. 13 110 Moreover, this record does not support the view that the FCA has either the ability or willingness to enforce the borrowers' rights provisions. The FCA has viewed its primary responsibility as one of examining the institutions in the System for financial condition, quality of management, soundness, and compliance with laws and regulations. During 1987, the FCA took only 24 enforcement actions, none of which sought compliance with the borrowers' rights provisions of the 1987 Act. 111 Finally, even if the FCA with its limited resources wanted to enforce the borrowers' rights provisions of the Act, its authority to issue temporary cease-and-desist orders is unavailable because such orders can be issued only if the lender's violationis likely to cause insolvency or substantial dissipation of assets or earnings of the institution or otherwise seriously prejudice the interests of the investors in Farm Credit System obligations or shareholders in the institution. 112 12 U.S.C. Sec. 2262(a). Similarly, its authority to suspend or remove officers extends only to those situations involving substantial financial loss, impairment of shareholder interests, or personal dishonesty. 12 U.S.C. Sec. 2264(a). 113 In sum, borrowers are, as a practical matter, unable to enforce their rights through administrative avenues. II. ANTI-INJUNCTION ACT 114 The district court held that the Zajacs' request for injunctive relief violated the Anti-Injunction Act. The Zajacs disagree, arguing that this case falls squarely in the expressly authorized exception to the Anti-Injunction Act. The test to determine whether a federal statute expressly authorizes an injunction against state court proceedings is whether an Act of Congress, clearly creating a federal right or remedy enforceable in a federal court of equity, could be given its intended scope only by the stay of a state court proceeding. Mitchum v. Foster, 407 U.S. 225, 238, 92 S.Ct. 2151, 2160, 32 L.Ed.2d 705 (1972) (emphasis added). Moreover, the federal statute in question need not make specific reference to either the Anti-Injunction Act or an injunction of state court proceedings. Id. at 237, 92 S.Ct. at 2159; Amalgamated Clothing Workers of America v. Richman Bros. Co., 348 U.S. 511, 516, 75 S.Ct. 452, 455, 99 L.Ed. 600 (1955). 115 First, the Federal Land Banks were created by Congress in 1916 as instrumentalities of the United States. 12 U.S.C. Sec. 2011. Indeed, the entire Farm Credit System itself is uniquely federal because it is created by and exists at the pleasure of the Congress. Also, systemwide requirements of the Agricultural Credit Act of 1987, such as restructuring, are not only uniquely federal; such provisions are absolutely federal. 116 Second, the congressional purpose underlying the Act will be completely defeated if the Zajacs are not granted injunctive relief to stop the state foreclosure process. Both the House and the Senate were concerned about the System lenders' past abuses of state court foreclosure proceedings. 14 Congress therefore enacted the Act to preclude the institution or continuation of a state court foreclosure proceeding until the lender considers restructuring. By temporarily stopping the continuation of a foreclosure proceeding, the Act encompasses the use of injunctions by a federal court to prevent state court foreclosure proceedings in violation of the Act. 117 The Act, together with its legislative history, establishes congressional authorization so that the 1987 Act falls squarely within the expressly authorized exception to the Anti-Injunction Act. Thus, the Anti-Injunction Act does not bar injunctive relief in this instance.