Court Opinion

ID: 214628
Source: CourtListenerOpinion
Date Created: 2011-04-13 19:17:08+00
Date Added: 2024-06-11T09:43:36.959391
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                              No. 10-1513

In Re:   PEANUT CROP INSURANCE LITIGATION, MDL-1634.

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PEANUT FARMERS,

                  Plaintiff - Appellant,

           v.

WILLIAM J. MURPHY, Administrator, Risk Management Agency,

                  Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Greenville. Malcolm J. Howard,
Senior District Judge. (4:05-cv-00008-H)

Submitted:   April 7, 2011                  Decided:   April 13, 2011

Before WILKINSON, KING, and GREGORY, Circuit Judges.

Affirmed by unpublished per curiam opinion.

R. Daniel Boyce, BOYCE & ISLEY, PLLC, Raleigh, North Carolina,
for Appellant.   George E. B. Holding, United States Attorney,
Eric D. Goulian, R. A. Renfer, Jr., Assistant United States
Attorneys, Raleigh, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

            Appellants (the “Peanut Farmers”) appeal the district

court’s order granting summary judgment to the Government and

dismissing     the    Peanut   Farmers’       breach       of   contract     and   due

process claims.       Finding no error, we affirm.

            The Peanut Farmers’ crops were, at times relevant to

this appeal, reinsured by the Federal Crop Insurance Corporation

(“FCIC”), which is in turn administered by the U.S. Department

of Agriculture’s (“USDA”) Risk Management Agency (“RMA”).                          The

Peanut Farmers each purchased a Multiple Peril Crop Insurance

(“MCPI”) policy for their peanut crops for the 2002 crop year.

The Appellees in this case include the Secretary of Agriculture

and   the   administrator      of   the   RMA,       but   will   be   collectively

referred to as “the Government.”

            Prior to 2002, statutes authorized the Secretary of

Agriculture to set quotas on the amount of peanuts that could be

marketed as food in the United States.                     Shares of the annual

national quota were allocated to specific farms on the basis of

their   past    production      history.         7     U.S.C.     § 1358-1      (2000)

(repealed 2002).        Holders of rights under the quotas derived

significant benefits from the ability to sell peanuts in the

domestic     market    as   food,   thus      commanding        the    higher   price

dictated by the value of food-use peanuts.                  “Non-quota” peanuts,

by contrast, commanded a lower market price because their end-

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use (conversion to meal or peanut oil) value was significantly

lower than that of food-use peanuts.

          The   difference   in   value   of   “quota”   and   “non-quota”

peanuts was reflected in the amount that each type of peanut

loss was indemnified under the MCPI policy.              During the crop

years immediately preceding 2002, the loss of quota peanuts was

indemnified at a rate of 31 cents per pound, while non-quota

peanuts losses were indemnified at a rate of 16 cents per pound.

The rate at which the Government was to pay under an MCPI policy

depended on the allocation of quota to the insured farm.               We

previously summarized the formula in part as follows:

     If an insured farm has not been allocated an effective
     poundage marketing quota, . . . the entire production
     would be insured at the non-quota rate. Thus, when an
     annual farm poundage quota allocation for an insured
     farm is “zero,” none of that farm’s peanut production
     is insured at the quota rate. . . . After determining
     the amount of insured quota and non-quota peanuts,
     those amounts are multiplied by their respective price
     elections.

In re Peanut Crop Ins. Litg., 524 F.3d 458, 465 (4th Cir. 2008).

          In late 2001 and early 2002, the USDA announced its

peanut quotas for the 2002 crop year.           The USDA also informed

holders of quota rights that pending legislation might alter or

rescind the peanut quota program.         In early 2002, the President

signed into law the Farm Security and Rural Investment Act of

2002, Pub.L. No. 107-171, §§ 1301-1310, 116 Stat. 134, 166-83

(2002) (the “2002 Farm Bill”).         In relevant part, the 2002 Farm

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Bill repealed the peanut quota system, replaced it with other

price support measures, and mandated that the amount used to

calculate indemnity for non-quota peanut losses under the 2002

MCPI policy would increase from 16 cents per pound to 17.75

cents per pound.            2002 Farm Bill § 1310(c).            After crop losses

in    2002,    the    Peanut      Farmers    sought   indemnification         and   were

indemnified at the 17.75 cent rate pursuant to the 2002 Farm

Bill.

               The    Peanut     Farmers    instituted      a   series   of   lawsuits

that challenged the outcome of their indemnification requests.

Ultimately, several class actions against the Government were

consolidated         in   the    district    court    for   pretrial     proceedings.

The    court    granted         summary    judgment   in    favor   of    the   Peanut

Farmers on their breach of contract claims, and the Government

appealed.       Barnhill v. Davidson, No. 4:02-cv-00159-H (E.D.N.C.

July 22, 2004).            On appeal, we concluded that the court erred,

vacated its judgment, and remanded for disposition of the Peanut

Farmers’ remaining claims.                In re Peanut Crop Ins. Litig., 524
F.3d at 458.              On remand, the district court granted summary

judgment in favor of the Government on the Peanut Farmers’ due

process claims.           The Peanut Farmers noted a timely appeal.

               We review de novo a district court’s order granting

summary judgment and view the facts in the light most favorable

to the nonmoving party.              Rowzie v. Allstate Ins. Co., 556 F.3d
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165, 167 (4th Cir. 2009).        Summary judgment is appropriate when

no genuine issue of material fact exists and the moving party

“is entitled to judgment as a matter of law.”                 Fed. R. Civ. P.

56(a).   Summary judgment will be granted unless “a reasonable

jury could return a verdict for the nonmoving party” on the

evidence presented.         Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986).

            While    the    Peanut    Farmers    raise    several   claims    of

error, they are, at bottom, a reiteration of the same basic

argument:     they    allege    that    they    were     entitled   to   certain

benefits under the MCPI policy and that the Government deprived

them of those benefits without due process of law. *                Our review

of those claims leads us to conclude that they all rest on

premises that we rejected in our first review of this case.

            First,    the    Peanut    Farmers    assert     that   they     were

entitled to the benefit of the 31 cent indemnity rate and they

were deprived of that right when the 2002 Farm Bill was enacted.

They refer to this as a “contract right” and note that they

     *
       The Peanut Farmers additionally claim that they were
subject to an unlawful taking without compensation in violation
of the Fifth Amendment.    This argument was not raised in the
complaint, and was not brought before the district court until
the Peanut Farmers’ response to the Government’s motion for
summary judgment after remand, seven years after the complaint
was filed.   Because the argument was not presented before the
district court in a timely manner, we do not consider it.

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relied on the benefits conferred by the MCPI policies.                                This

court, however, has rejected that argument.                       We concluded that

the 31 cent rate was not guaranteed by the MCPI policy and that

the 2002 Farm Bill did not actually adversely amend the MCPI

policies.       Accordingly, the Peanut Farmers’ arguments that they

were subject to an adverse retroactive legislative action and

deprived of a contract right without due process are unavailing.

            In addition, the Peanut Farmers claim that they relied

on the 31 cent rate, and that because of their reliance, the

2002 Farm Bill was arbitrary and they should be entitled to the

difference in rates.              Again, though, we concluded that, at least

with   respect        to    the     Peanut    Farmers’        theory   of   reasonable

reliance in the contract context, any actual reliance they have

shown was not reasonable.               In re Peanut Crop Ins. Litig., 524
F.3d at 475-76.            The Peanut Farmers were on notice well before

they signed the 2002 MCPI policies that the Government might

eliminate       the    quota       system     altogether.         Moreover,      as    we

discussed, there has been “persistent congressional refinement

of   the   peanut     quota       program,”       and   the   Peanut   Farmers   cannot

argue they were taken by surprise by this legislative action.

Id. at 476.

            We see no reason to conclude that the Peanut Farmers’

unreasonable      reliance         should    be    accorded     more   weight    in   the

context    of    their      due     process       arguments.       While    we   remain

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sympathetic to the Peanut Farmers’ losses, the law of this case

is clear that where the Government has provided ample warning of

pending legislative changes and where the insured is dealing in

an   area      of   heavy,    and   frequently     shifting,       government

regulation, there is no basis to argue reliance on the pre-

existing statutory scheme.

            Accordingly, we affirm the judgment of the district

court.      We dispense with oral argument because the facts and

legal    contentions    are   adequately   presented    in   the    materials

before   the    court   and   argument   would   not   aid   the   decisional

process.

                                                                     AFFIRMED

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