Court Opinion

ID: 160778
Source: CourtListenerOpinion
Date Created: 2010-08-14 06:51:06+00
Date Added: 2024-06-11T17:15:37.848946
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           FEB 22 2001
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    SHORE LIMITED OPERATING
    PARTNERSHIP; RANDALL SHORE;
    STARLA SHORE,

                Plaintiffs-Appellants,                   No. 00-3097
                                                    (D.C. No. 97-CV-1495)
    v.                                                     (D. Kan.)

    ANN VENEMAN, * Secretary of the
    United States Department of
    Agriculture,

                Defendant-Appellee.

                            ORDER AND JUDGMENT           **

Before KELLY , ANDERSON , and MURPHY , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

*
      Pursuant to Fed. R. App. P. 43(c)(2), Ann Veneman is substituted for Dan
Glickman, Secretary of the United States Department of Agriculture, as the
defendant in this action.
**
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument.

      Plaintiffs Randall and Starla Shore, as partners in Shore Limited Operating

Partnership, appeal from the denial of their applications for emergency and

operating farm loans by defendant Secretary of the Department of Agriculture.

We have jurisdiction under 7 U.S.C. § 6999 and 28 U.S.C. § 1291.

      The Shores are farmers in western Kansas. In 1993, 1994, and 1995, heavy

hail damaged their crops. The county in which the Shore partnership is located

was declared a disaster area eligible for federal relief. In 1995, the Shores

applied to the Farmers Home Administration for a loan, designated “NAD 238W.”

In 1996, the Shores applied to the newly created Farm Service Agency (FSA) for

two more loans, designated “NAD 239W” and “NAD 240W.” The FSA also took

over NAD238W.

      NAD 238W was initially approved in September 1995 by the Farmers Home

Administration based on a 1995 “Farm and Home Plan,” a financial document

showing the annual financial condition of the partnership.   See 7 C.F.R.

§ 1924.57(b).   1
                    On the same day, Randall Shore signed a “Certification Approval”

which noted that the loan was “subject to the availability of funds and other

1
      The agency based its decision on the regulations as they existed in early
1996. The regulations were substantially revised later in 1996.

                                           -2-
conditions required by the Farmers Home Administration.” Appellants’ App.

at 35. Funds were obligated for NAD 238W, but the loan never closed.

      As time passed and the agency’s evaluation of the Shores’ three loan

applications continued, the agency prepared updated Farm and Home Plans which

reached conflicting results. An initial 1996 plan projected that the partnership

would be unable to repay the requested loans, but a revised 1996 plan showed a

positive cash flow. The FSA later prepared a 1997 plan based on updated

financial information from the partnership, which projected that the partnership

would be unable to repay the requested loans. Based on the 1997 plan, the FSA

determined that a repayment plan was not feasible and denied all three loan

applications.

      On the Shores’ request for agency review, the denial was first reversed by a

hearing officer and then reaffirmed by the Acting National Appeals Division

Director. The district court remanded after its first review of the Shores’ suit, and

affirmed the denial that resulted after the remand.

      The Shores contend on appeal that: (1) the Secretary of Agriculture and the

FSA failed to comply with the laws, regulations, and agency policy provisions

regarding emergency and operating loans; (2) the administrative decision denying

their loan applications is not supported by the record; and (3) the Secretary should

be ordered to pay interest on the loans in accordance with the Prompt Payment

                                         -3-
Act, 31 U.S.C. § 3902(h)(2). The Secretary reframes the issues on appeal as:

(1) whether the district court properly held that the FSA complied with applicable

regulations when it reevaluated and denied NAD 238W after it had been

approved; and (2) whether the district court properly held that FSA’s preparation

and use of the 1997 Farm and Home Plan to deny all three of the Shores’ loan

applications was done in accordance with regulations and was neither arbitrary

nor capricious. We consider the Secretary’s statement of the issues to be more

consistent with the Shores’ arguments of their issues.

       Under 7 U.S.C. § 6999, judicial review of the agency’s final decision is

governed by the Administrative Procedures Act, 5 U.S.C. §§ 701-06. We may set

aside an agency’s decision only if it is arbitrary, capricious, or otherwise not in

accordance with the law, or if the record does not contain substantial evidence to

support the decision. 5 U.S.C. § 706;     see Hoyl v. Babbitt , 129 F.3d 1377, 1382

(10th Cir. 1997). The district court’s orders are entitled to no deference.   Id. In

light of this standard, the Shores’ arguments do not prevail.

       The Shores maintain that 7 C.F.R. § 1910.6(f) required NAD 238W to be

paid within fifteen days after it was approved. As thoroughly explained by the

district court in its August 3, 1999 Memorandum and Order, § 1910.6(f) provides

an exception for loans, like NAD 238W, approved subject to the availability of

funds. NAD 238W was governed by the process described in § 1910.6(g), which

                                             -4-
required the FSA to update the partnership’s financial information,

§ 1910.6(g)(1), and allowed the FSA to reconsider both the eligibility of the

partnership and the feasability of the loan, § 1910.6(g)(2).

      The Shores also argue that the preparation and use of the 1997 plan to deny

the other loan applications was improper. We find no error. As explained above

and in more detail by the district court in its August 3, 1999 Memorandum and

Order, the regulations required the agency to update the Shores’ financial

information. Further, the Shores have not shown that the regulations required the

agency to make its loan decision in light of the combined financial condition of

the Shores and the partnership. The Shores also contend that the 1997 plan is

faulty because it was not dated and initialed by them, as required by 7 C.F.R.

§ 1924.57(d)(4). We agree with the district court’s conclusion in its March 3,

2000 Memorandum and Order that the error was harmless. Whether initialed and

dated or not, the 1997 plan showed that the Shore partnership would not be able

to pay back the requested loans.

                                         -5-
      Because we find no error in the denial of the Shores’ three loan

applications, we need not consider the argument that they are entitled to interest.

      AFFIRMED.

                                                    Entered for the Court

                                                    Stephen H. Anderson
                                                    Circuit Judge

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