Court Opinion

ID: 3218116
Source: CourtListenerOpinion
Date Created: 2016-06-29 14:01:22.1696+00
Date Added: 2024-06-11T14:29:33.952816
License: Public Domain

Case: 15-14818   Date Filed: 06/29/2016   Page: 1 of 14

                                                       [DO NOT PUBLISH]

          IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                           No. 15-14818
                       Non-Argument Calendar
                     ________________________

               D.C. Docket No. 5:14-cv-00241-MW-GRJ

SPRING CREEK FARMING COMPANY,

                                                          Plaintiff-Appellant,

                                versus

FEDERAL CROP INSURANCE CORPORATION,
RISK MANAGEMENT AGENCY OF THE UNITED STATES DEPARTMENT
OF AGRICULTURE,
U.S. DEPARTMENT OF AGRICULTURE,
SECRETARY, U.S. DEPARTMENT OF AGRICULTURE,

                                                       Defendants-Appellees.

                     ________________________

              Appeal from the United States District Court
                  for the Northern District of Florida
                    ________________________

                            (June 29, 2016)
              Case: 15-14818    Date Filed: 06/29/2016   Page: 2 of 14

Before WILSON, MARTIN and ROSENBAUM, Circuit Judges.

PER CURIAM:

      This case requires us to decide whether a government agency acted

arbitrarily and capriciously by rejecting a peanut farmer’s crop insurance claim that

the crops did not get enough rain. Because neither party had exact measures of

how much rainfall the crops received, the agency weighed the available evidence.

On the one hand, there was inexact weather data from several sources, which could

be used to approximate rainfall. On the other hand, there was evidence that the

crops got less rainfall than the data indicated, though much of that evidence came

from interested parties. The agency judged the objective data to be more

convincing. It also relied on a peanut farming expert’s opinion, which was based

on that data. On this record and giving due deference to the agency, we cannot say

that these decisions were arbitrary and capricious.

                                          I.

      The Federal Crop Insurance Corporation administers the federal crop

insurance program through an operating entity called the Risk Management

Agency (“RMA”),. See 7 C.F.R. § 400.701. Under this program, private insurers

indemnify farmers’ covered crop losses, and the Crop Insurance Corporation

reinsures those policies. If a farmer claims a loss greater than $500,000, the

private insurer must notify the RMA, and the RMA can choose to intervene in the

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claim (as it did in this case). Also, a loss need not constitute an entire crop—

farmers can insure against low production yields caused by certain covered events.

See 7 C.F.R. § 457.8. In this case, the disputed event is “[a]dverse weather

conditions,” or more specifically, an alleged drought.

      In 2012, Spring Creek Farming Company (“Spring Creek”) planted 1,354

acres of peanuts on five farms in Jackson County, Florida. Spring Creek insured

its peanut crop through a Crop Insurance Corporation-approved private insurer,

and the policy included a yield guarantee. The parties do not dispute that Spring

Creek’s peanut harvest was less than the yield guarantee. Rather, they debate the

reason why it was. Spring Creek claims that regional drought caused the low

yield. The defendants argue that the peanuts received adequate rainfall to produce

a normal yield, so Spring Creek’s low yield was not a covered loss.

      After intervening in the claim, the RMA’s regional office investigated and

denied it. Because Spring Creek did not record rainfall on its farms, the regional

office used other information to investigate the claim. First, the regional office

compiled weather data from a Florida Automated Weather Network station

(“weather station”) that is located approximately 17 miles away from Spring

Creek’s affected farms and measures actual rainfall. Second, the regional office

accessed weather data from the Center for Agribusiness Excellence (“the Center”)

that approximated rainfall for areas between weather stations based on “real time

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radar and real time weather information from the weather stations.” The Center

data were presented in half-mile grids, so Dr. Kathryn Taylor, an RMA employee,

averaged the data across grids if a farm covered more than one. Finally, the

weather station as well as the Center data were submitted to Dr. John Beasley, a

recognized peanut farming expert and agronomist. Based on his analysis of the

data, Dr. Beasley concluded, “I do not see lack of water as a reason for yield loss.”

The regional office denied Spring Creek’s claim “because drought was not the

cause of loss.”

      Spring Creek requested that the RMA review the regional office’s decision.

The RMA first outlined each party’s position and evidence. Then, it cross-

referenced the weather station and Center data with new weather data from a

system called PRISM, which showed similar quantities of rainfall in the area of

Spring Creek’s farms. The RMA upheld the regional office’s finding that drought

was not the cause of the loss.

      Next, Spring Creek appealed to the United States Department of

Agriculture’s (“USDA”) National Appeals Division (“NAD”), which offers two

rounds of administrative review. In the first round, Spring Creek presented its

evidence to an NAD hearing officer at an evidentiary hearing that lasted several

days. The NAD hearing officer affirmed the agency decision, stating that the

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RMA had relied on credible evidence. In the second round, the NAD director also

upheld the decision.

      Spring Creek then sought judicial review of the final agency decision in the

district court. It argued that the RMA’s decision was arbitrary, capricious, and not

supported by substantial evidence. The district court granted summary judgment

for the defendants. The court concluded that the agency’s decision to favor some

evidence over other evidence was not arbitrary and capricious. Spring Creek

timely appealed to this Court.

                                          II.

      This Court reviews de novo a district court’s grant of summary judgment,

applying the same standard as the district court. Mahon v. U.S. Dep’t of Agric.,

485 F.3d 1247, 1252 (11th Cir. 2007). Under the Administrative Procedures Act, 5

U.S.C. § 701 et seq., federal courts shall set aside agency decisions that are

“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law.” Id. § 706(2)(A). “To make this finding the court must consider whether the

decision was based on a consideration of the relevant factors and whether there has

been a clear error in judgment.” Citizens to Preserve Overton Park, Inc. v. Volpe,

401 U.S. 402, 416, 91 S. Ct. 814, 823–24 (1971), abrogated on other grounds,

Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980 (1977). This is a deferential

standard, and “we cannot substitute our own judgment for that of the agency.”

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Alabama-Tombigbee Rivers Coalition v. Kempthorne, 477 F.3d 1250, 1254 (11th

Cir. 2007).

      A court must also consider whether the agency decision was not supported

by “substantial evidence” in the record. 5 U.S.C. § 706(2)(E). The substantial

evidence test is similar to the arbitrary and capricious standard, but it applies to

factual findings. See Fields v. Dep’t of Labor Admin. Review Bd., 173 F.3d 811,

813 (11th Cir. 1999) (per curiam). Substantial evidence is “such relevant evidence

as a reasonable mind might accept as adequate to support a conclusion.” Stone &

Webster Constr., Inc. v. U.S. Dep’t of Labor, 684 F.3d 1127, 1133 (11th Cir. 2012)

(quotation omitted). “The substantial evidence standard limits the reviewing court

from deciding the facts anew, making credibility determinations, or re-weighing

the evidence.” Id. (quotation omitted). The fact that the record may support a

contrary conclusion is not enough. DeKalb Cty. v. U.S. Dep’t of Labor, 812 F.3d
1015, 1020 (11th Cir. 2016).

                                          III.

      It is undisputed that no actual rainfall collection data was available for

Spring Creek’s farms, because Spring Creek did not record it and the nearest

weather station is approximately 17 miles away. The agency was therefore forced

to work with imperfect data, as is often the case. Spring Creek says the agency

should’ve weighed the evidence in its favor, alleging a number of flaws with the

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evidence as well as the agency’s decisionmaking process. Spring Creek makes two

broad challenges: to the measurement of rainfall, and to the assessment of the

peanuts’ water requirements relative to that rainfall. Neither challenge warrants

overturning the agency’s decision.

A.    Rainfall Measurements

      Spring Creek claims the agency’s rainfall measurements were inaccurate for

three reasons. First, the data were unreliable because they were based on

“manipulated” estimates and an unknown methodology. Second, the evidence

presented by Spring Creek was more compelling. Finally, other farmers’ drought

claims were paid within the same geographical area.

      1.     Data reliability.

      Spring Creek alleges that the agency improperly used unreliable rainfall

estimates. It claims the data were unreliable because they merely estimated rainfall

on Spring Creek’s farms; because the RMA had to average the Center data for

some farms; and because the methodology for obtaining that data is unknown.

First, Spring Creek is correct that the data were based on estimates, but estimates

were the only measurements available. In the absence of exact measurements, the

agency did not act arbitrarily and capriciously by considering weather data that

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approximated rainfall for areas between weather stations.1 These data were clearly

a “relevant factor.” See Overton Park, 401 U.S. at 416, 91 S. Ct. at 823–24.

       Spring Creek also argues that the RMA “unscientifically manipulated” the

Center data by running them through “formulas.” This point is overstated. The

record shows that, if a given peanut farm covered more than one half-mile grid, Dr.

Taylor calculated a “simple average” 2 of the Center data for those grids, which

would represent average rainfall for that farm. Spring Creek does not explain why

this process was scientifically unsound or how it adversely impacted the quality of

the Center data—instead, Spring Creek’s argument seems to be that any secondary

treatment of the data was inherently unreliable. Yet Spring Creek does not propose

a superior method for blending the Center data between half-mile grids. 3 We

cannot say it was a “clear error in judgment” for the agency to consider these data.

Id.

       Spring Creek’s last challenge to the data is based on the methodology used

to generate them, which Spring Creek claims is not in the record. Spring Creek

quotes parts of Dr. Taylor’s testimony to support this argument. However, a full

review of Dr. Taylor’s testimony shows that she repeatedly stated the Center data

       1
          The agency also considered actual rainfall collection data for the nearest weather
station. However, that station was 17 miles away and may have experienced different rainfall.
                         (1+2+3)
        2
          As an example, 3 = 2 is the simple average of 1, 2, and 3.
        3
          Spring Creek also rejects the use of a weighted average, which Dr. Taylor later used to
check the accuracy of her original calculations.
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were generated by means of radar reflectance, which creates a signal when

outgoing radar waves are reflected back after encountering precipitation in the

atmosphere. In fact, Dr. Taylor testified she was “certain” that the Center data

were obtained “us[ing] radar data and . . . real time data, from weather stations.”

Dr. Taylor clarified that she was only uncertain about how similar the computer

models for the Center and PRISM were, and that they might be slightly different,

although their data output “by and large agree[s].” 4 Thus, contrary to Spring

Creek’s assertion, the methodology used to generate the Center data was not

unknown. The agency did not act arbitrarily and capriciously by considering these

data.

        2.    Competing evidence.

        4
         The uncertainty about modeling does not seem to have been clarified elsewhere. Spring
Creek argues this is because the USDA arbitrarily and capriciously denied its request to
subpoena an employee of the Center to testify on the subject. A subpoena may issue in an NAD
hearing only if: (1) the person being subpoenaed “possesses information that is pertinent and
necessary” to the proceeding; (2) “the information cannot be obtained except through testimony
of the person”; and (3) “the testimony cannot be obtained absent issuance of a subpoena.” 7
C.F.R. § 11.8(a)(2)(iii)(B). The NAD hearing officer ultimately denied Spring Creek’s subpoena
request because the desired testimony was “in the nature of expert testimony, and the Agency
Record does not reveal that [the RMA] consulted with a person within [the Center] to interpret
any data obtained from [it]. . . . The relevant information Appellant seeks can be obtained by
examining [the RMA]’s representative(s) . . . and/or by retaining its own expert.” In other
words, because RMA personnel used the Center’s resources but did not rely on its employees,
the desired information could be obtained without the requested testimony. See id. Even
assuming (without deciding) that RMA representatives could not or would not supply the desired
information, as Spring Creek briefly alleges, Spring Creek does not allege that it was unable to
hire an expert to testify regarding the Center’s modeling. The hearing officer’s subpoena denial
was not arbitrary and capricious.
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      Next, Spring Creek claims the agency improperly weighed the evidence.

Spring Creek points to competing evidence it introduced, including witness

testimony (much of it from Spring Creek insiders), photographic exhibits of crops,

and several weather or agricultural reports. But courts cannot re-weigh the

evidence on agency review. See Stone & Webster Constr., 684 F.3d at 1133. The

agency considered and discounted Spring Creek’s competing evidence, and we

cannot simply substitute our own judgment. See Alabama-Tombigbee Rivers

Coalition, 477 F.3d at 1254. Spring Creek’s evidence was discounted by the

agency because much of it was ambiguous or unsupportive. For instance, affiliates

of Spring Creek vaguely testified they did not recall “significant,” “meaningful,” or

“big” rains during parts of the growing season, but they had no rainfall records and

could not remember whether there were lighter rains. And a crop consultant who

viewed peanut plants on Spring Creek’s farms from across the road said the crop

“looked like a good stand,” and nothing about the crop “stood out to [him].”

Although Spring Creek presented some other evidence of a drought, it is not

enough that the evidence could support a decision contrary to that made by the

agency. See DeKalb Cty., 812 F.3d at 1020. On this record, we cannot say the

agency improperly weighed the evidence.

      3.     Other insurance claims.

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      Spring Creek’s final challenge to the rainfall measurements arises from the

payment of several crop insurance claims filed by other farmers in Jackson County,

Florida. The fact that these farmers were located nearby and recovered on drought

claims, Spring Creek argues, is evidence of a regional drought. Thus, Spring

Creek concludes that the agency acted arbitrarily and capriciously under this

Court’s precedent in Mahon. Spring Creek’s reliance on Mahon is misplaced. In

Mahon, some nurseries in Florida with expired licenses suffered losses from a

freeze and applied for disaster assistance. Id. at 1249. The USDA denied relief to

the plaintiff nurseries because their licenses were expired, but the evidence showed

that the USDA granted relief to other nurseries with expired licenses. Id. at 1249–

51. Because all the nurseries had expired licenses, this Court held that the

nurseries were “similarly situated,” and the USDA acted arbitrarily and

capriciously “by treating similarly situated producers differently.” Id. at 1260.

      Unlike in Mahon, it is not so easy to declare Spring Creek and the other

claimants “similarly situated.” While determining the expiration date of a license

is relatively simple, deciding whether (and to what extent) a farmer’s crop yield

has been affected by drought is rather more difficult, as this case demonstrates.

Indeed, Spring Creek put forward evidence suggesting that rainfall may be variable

not just within Jackson County, but even within a single field. Spring Creek did

not present evidence that the other farmers’ fields received a similar quantity of

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rainfall or that the fields were planted at the same time. For these reasons, Mahon

does not apply.

B.    Crop Requirements

      Spring Creek also challenges the agency’s determination of crop

requirements, and whether those requirements were satisfied. Dr. Beasley, a

recognized peanut farming expert, concluded that the rainfall data discussed above

were sufficient for a peanut crop in Jackson County, Florida, to avoid yield loss,

and the agency relied on his opinion. Spring Creek argues this conclusion was

flawed for three reasons: (1) it failed to consider all the variables; (2) it

misinterpreted the data; and (3) it was based on a faulty assumption.

      1.     Variables.

      First, Spring Creek claims that the RMA’s conclusion ignored important

variables such as soil temperature and type. But it is not clear that Dr. Beasley’s

analysis, on which the RMA relied, ignored these variables. When the RMA sent

the rainfall data to Dr. Beasley for analysis, it asked him if the rainfall “would have

caused a significant [peanut] yield loss given the regular recharge of the soil

moisture” that took place “in this particular Florida County.” (Doc. 23-4: 54

(emphasis added)). This focus on the moisture level in the soil—which would

implicate variables other than rainfall, such as soil temperature and type—belies

Spring Creek’s claim that Dr. Beasley merely analyzed crops grown “in a

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vacuum.” Instead, his analysis apparently considered soil moisture requirements

for peanuts grown in a specific place during a specific time period. Unless Dr.

Beasley failed to consider the RMA’s question and data—and Spring Creek

presents no evidence that occurred—Dr. Beasley necessarily made certain

assumptions about the conditions for peanut farming in Jackson County, Florida,

during the relevant time period. The RMA did not make a clear error of judgment

by relying on Dr. Beasley’s expertise.

      2.     Data interpretation.

      Second, Spring Creek argues that the RMA arbitrarily relied on Dr.

Beasley’s analysis because he misinterpreted the rainfall data. Even accepting the

rainfall data, Spring Creek argues, Dr. Beasley’s conclusion is anomalous because

the peanut farms received less than the target amount of rainfall in many key

growing weeks. It’s true that the farms received less than the target amount of

rainfall in some weeks—a fact that is expressly incorporated into the RMA’s

question to Dr. Beasley. In other weeks, though, the farms received much more

than the target amount of rainfall: during the week of August 4 to August 8, in

particular, the data showed heavy rainfall across all of Spring Creek’s peanut

farms. Dr. Beasley is a peanut farming expert. As a court, we cannot determine

whether heavy rainfall in one week can compensate for lesser rainfall in another

week, nor can we say how minimal rainfall must be before it significantly reduces

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crop yields. Dr. Beasley made those determinations and arrived at an opinion. The

agency did not act arbitrarily by relying on it.

       3.      Faulty assumption.

       Lastly, Spring Creek argues that Dr. Beasley’s opinion cannot be substantial

evidence because he relied on a faulty assumption: that all of Spring Creek’s

peanut farms were planted on May 5, 2012. In fact, only one of Spring Creek’s

peanut farms was planted on May 5, and the rest were planted between May 19 and

May 23. This detail does not seem to have been accounted for in the data given to

Dr. Beasley. However, Spring Creek fails to explain how this “faulty assumption”

renders the entire agency decision arbitrary and capricious, or how it transforms

Dr. Beasley’s opinion into insubstantial evidence. Other than pointing this

oversight out, Spring Creek has not explained what adverse effect it would have.5

The RMA’s clerical error is not enough to carry the day for Spring Creek.

                                        *       *      *

       Because Spring Creek has not satisfied the heavy burden of showing that the

agency’s actions were arbitrary, capricious, or not supported by substantial

evidence, we must AFFIRM.

       AFFIRMED.

       5
         When the omission is added back into the mix, total estimated rainfall in the affected
fields during the key growing weeks actually increases by between 0.84 and 2.36 inches,
depending on the farm. In other words, had Dr. Beasley received the correct planting dates, he
would have seen more total rainfall during the key growing weeks, not less.
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