Sunrise Cooperative v. United States Dep't of Agric., 891 F.3d 652

Sunrise, an Ohio agricultural cooperative, was approved to pay crop-insurance-related patronage rebates to members for the 2005–2007 reinsurance years and continued under the 2008 Farm Bill grandfather exception.
In 2016 Sunrise merged with Trupointe, a non-grandfathered cooperative with members in Indiana; Sunrise absorbed Trupointe and continued operating under the Sunrise corporate identity.
RMA (within USDA/FCIC) concluded the merger made Sunrise ineligible for the grandfather exception, interpreting “entity” to require the same structure and relative size and disallowing mergers, acquisitions, or similar changes.
Sunrise challenged the RMA decision in district court under the APA seeking declaratory relief; the district court found the statute ambiguous, applied Chevron deference, and upheld the RMA.
The Sixth Circuit reversed, holding the statutory grandfather clause unambiguously protected an approved entity that continues to pay under the same approved payment plan, and that the RMA’s added eligibility conditions contradicted the statutory text.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the statutory grandfather exception (7 U.S.C. §1508(a)(9)(B)(iii)) covers a grandfathered cooperative after it merges with a non-grandfathered cooperative	Sunrise: "Entity" means the same legal organization surviving a merger; merger does not defeat grandfathered status if payments continue under the same approved plan	RMA: "Entity" requires same structure and relative size; mergers/acquisitions create a different entity and defeat grandfather status	Court: Statute unambiguously covers the surviving approved entity; merger here did not strip Sunrise of grandfather status
Whether Chevron deference permits RMA to impose additional eligibility restrictions not grounded in the statute	Sunrise: No—statute is unambiguous, so agency has no discretion to rewrite eligibility	RMA: Term "entity" is undefined and ambiguous, so agency interpretation is permissible	Court: Chevron step one—statute unambiguous; agency interpretation foreclosed by text and legal principles; Chevron deference not applied to uphold RMA’s reading

Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984) (establishes the two-step administrative deference framework)
Nat’l Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005) (addresses limits of agency deference when statutory meaning is clear)
MCI Telecommunications Corp. v. AT&T, 512 U.S. 218 (1994) (consult dictionary and ordinary meaning when statute is undefined)
Brown v. Gardner, 513 U.S. 115 (1994) (presumption that identical terms used consistently applies only to identical terms)
Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) (explains corporate personhood and distinct legal identity of entities)
United States v. Detroit Medical Center, 833 F.3d 671 (6th Cir. 2016) (use of ordinary meaning and dictionary definitions for undefined statutory terms)