James M. Fogg Farms, Inc. v. United States
134 Fed. Cl. 363
| Fed. Cl. | 2017Background
- Plaintiffs are farmers who entered 5-year Conservation Security Program (CSP) contracts with USDA/NRCS in 2005 under the 2002 Farm Bill (16 U.S.C. § 3838a et seq.).
- The statute prescribed payment-calculation methods and authorized the Secretary to promulgate implementing regulations; NRCS issued regulations (7 C.F.R. § 1469.23) after notice-and-comment rulemaking.
- Plaintiffs claim NRCS applied payment rates under the regulations that underpaid them compared to the statutory minimums, asserting breach of contract (Counts I–III).
- Plaintiffs also contend the 2008 Farm Bill’s prohibition on CSP renewals after Sept. 30, 2008 was an anticipatory repudiation of their renewal rights (Count IV).
- The Government moved to dismiss for failure to state a claim (or alternatively for summary judgment); Plaintiffs moved for summary judgment. The Court heard argument and disposed of the case on motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statutory payment rules are contractual terms | Statute-prescribed payment formula is part of the contract and NRCS payments breached that term | CSP contracts incorporate NRCS regulations, not the statute; statutory provisions not incorporated into contract absent explicit term | Statute not incorporated; plaintiffs failed to plead a contractual term giving rise to breach; dismissal granted |
| Whether NRCS regulation implementing payment reductions breached contracts when funding varied | Regulation’s reduction factors conflicted with statute, so payments were inadequate | Regulations were validly adopted by NRCS and were the incorporated terms of the contract | NRCS rule governs; no contract term alleged that required statutory method, so no breach |
| Whether the 2008 Farm Bill’s renewal bar was repudiation of renewal rights | Amendment barring renewals after 9/30/2008 repudiated plaintiffs’ contractual renewal expectation | Renewal rights alleged in the statute were not incorporated into individual contracts; Congress can change statutory program terms | Dismissed: no contractual right to statutory renewal term alleged, so no repudiation claim under contract law |
| Jurisdiction/money-mandating source | Plaintiffs say statute mandates payments sufficient for Tucker Act jurisdiction | Government says statutory provisions not incorporated into contracts and thus not a money-mandating source for contract damages | Court concluded no money-mandating contractual term pleaded; jurisdiction for these claims not established |
Key Cases Cited
- St. Christopher Assocs., L.P. v. United States, 511 F.3d 1376 (Fed. Cir. 2008) (courts reluctant to read statutory/regulatory provisions into government contracts absent explicit incorporation)
- Smithson v. United States, 847 F.2d 791 (Fed. Cir. 1988) (similar principle limiting incorporation of statutes into contracts)
- Meyers v. United States, 96 Fed. Cl. 34 (2010) (CFC decision rejecting similar CSP statutory-incorporation claims)
- Earman v. United States, 114 Fed. Cl. 81 (2013) (CFC decision rejecting comparable theories about CSP payment calculations)
- Briseno v. United States, 83 Fed. Cl. 630 (2008) (pleading standard under RCFC 12(b)(6) described)