C. B. JONES, Fred W. Koch, and John H. Simpson, Marketing Quota Review Committee, United States Department of Agriculture, Agricultural Stabilization and Conservation Service, Appellants, v. Lawson HUGHES, Appellee. C. B. JONES, Fred W. Koch, and John H. Simpson, Marketing Quota Review Committee, United States Department of Agriculture, Agricultural Stabilization and Conservation Service, Appellants, v. LINDSEY BROS., a Partnership, Appellee.
No. 19095.
No. 19096.
United States Court of Appeals Eighth Circuit.
September 16, 1968.
400 F.2d 585
E. J. Butler, Forrest City, Ark., for appellees; Phil Hicky, Forrest City, Ark., on the brief.
Before VAN OOSTERHOUT, Chief Judge, HEANEY, Circuit Judge, and REGISTER, Chief District Judge.
HEANEY, Circuit Judge.
The principal issue presented on this appeal is: Does a determination by personnel of a county (ASCS) office that the appellees were in compliance with their cotton acreage allotment bar a redetermination of that compliance? The District Court held that it did. Lindsey Bros. v. Jones, 271 F.Supp. 933 (E.D. Ark.1967). We hold to the contrary.
The secondary issue is: Are the appellees nevertheless protected against the effects of an adverse redetermination by the “erroneous notice” provision of regulations promulgated by the Secretary of Agriculture pursuant to the Act?
Under the
The Secretary, pursuant to authority granted in the Act,
When a determination of excess acreage is made,1 the producer may request a remeasurement,
If the decision is to plow under the excess, a crop reporter revisits the farm after the plowing and reports to the county office.
The regulations further provide that the state or county committee, or the deputy administrator, may at any time require a redetermination of the acreage planted.
More than fifteen days later, a redetermination was made by two supervisory crop reporters of the Hughes\’ and Lindsey Brothers\’ farms. They reported that neither had made the required plow under. They also reported that the earlier crop reporters had erred in computing the acreage planted. The office manager, acting on the basis of the reports, notified the appellees that they were not in compliance. The Lindsey Brothers decided against a further plow under. The Hughes\’ crop had been fully harvested. The county committee assessed penalties.
The appellees appealed to the Marketing Quota Review Committee.2 They alleged reliance on the initial notice of compliance and contended that the Department of Agriculture could not in good faith and justice redetermine the issue of their compliance. They did not dispute the accuracy of the acreage planted as found on redetermination, but contended that they had made the plow under.
The review committee viewed the Hughes\’ and Lindsey Brothers\’ claims as a request for relief under the provisions of the “erroneous notice” regulation. It held an evidentiary hearing and made findings of fact and conclusions of law. It denied relief on the grounds that the producers had not established facts entitling them to relief under the regulation.
The appellees then sought review of the review committee\‘s decision in the United States District Court.3 The court entered an order reversing and remanding the Lindsey Brothers\’ case with directions to refund the assessed penalty with interest. It subsequently took similar action in the Hughes\’ case.
The District Court held, as a matter of law, that the notice of compliance given to each producer became final within fifteen-days from the date the notices were received by the producers. The decision was based on
Section 1385 provides, in substance, that the facts constituting the basis for various payments under the programs administered by the Secretary of Agriculture “when officially determined in conformity with the applicable regulations prescribed by the Secretary” shall be final and conclusive and shall not be reviewable by any other officer or agency of the government. The District Court held that the notice of compliance, prepared by the office personnel of the county ASCS office, constituted an official determination in conformity with the applicable regulations and was non-reviewable. We disagree.
The regulations make it clear that an acreage determination by the office personnel is intended to be neither official nor final within the meaning of
If the county committee decides to assess a penalty, the producer is mailed a “Notice of Marketing Quota Excess and Penalty Due” form. This form indicates the excess acreage, the normal yield per acre, the marketing excess and the penalty due as a result of this excess.6
The regulations give the producer fifteen days to appeal the decision of the county committee assessing the penalty. The appeal application is sent to the county committee for review. If it finds that the relief sought is proper, it is authorized to grant it.
At that hearing, the producer is permitted to contest any fact constituting a basis for the imposition of the penalty,
In the light of the regulations, we hold that an official determination, pursuant to the regulations, is not made until the county committee notifies the producer that it has assessed a penalty. It follows that the earlier notice of acreage (compliance) is not final as to a producer or the Department of Agriculture.
The regulations are, in our view, consistent with
We are also of the opinion that Kopf is not controlling. The rationale of Kopf is that a decision which is final as to a producer should be final as to the Department of Agriculture. Here, the notice of compliance was final as to neither.
In Kopf, the yield determination was made by the county ASCS committee after a full evidentiary hearing. Here, it was made by the personnel of a county ASCS office without a hearing. We also note that the administrative action was of an executive, rather than an adjudicative, nature and was thus not binding in a res judicata sense. K. Davis, Administrative Law § 18.08, p. 602 (1958). See, Pearson v. Williams, 202 U.S. 281, 26 S.Ct. 608, 50 L.Ed. 1029 (1906).
In Kopf, the Court found that the position of the Department of Agriculture was inconsistent with the regulations as a whole. Here, the procedure followed was consistent with the regulations.
We also note that the statute and regulations provide at least two ways in which a producer can, by paying the cost, obtain an acreage determination not subject to a redetermination: by measurement prior to planting,
We recognized in Kopf the necessity of the Secretary maintaining some supervisory power over the action of his subordinates, but held that such power did not give him the right to reverse a determination made after an evidentiary hearing held pursuant to regulations. Here, the need to maintain the power is consistent with the need to treat producers fairly.
II. PROTECTIONS FROM PENALTY BY “ERRONEOUS NOTICE” REGULATION.
We turn to the question of whether the review committee erred in finding that neither producer was entitled to protection under
(1) The producer relied in good faith on an erroneous measurement;
(2) The producer did not receive actual knowledge of the error in time to adjust his acreage in accordance with the regulations;
(3) The error in the notice is the fault of the reporter or an employee of the county office;
(4) The producer was in no way at fault; and
(5) The error in the notice was not so great that the producer could reasonably be expected to have questioned the acreage of which he was notified.
The findings of the review committee are conclusive if supported by substantial evidence.
As the facts as to each producer are different, we consider them separately:
THE LINDSEY BROTHERS
The Lindsey Brothers received a 550 acre cotton allotment for the 1964 crop year. They applied for and received an additional 17 acres before planting.
On June 15, 1964, N. Peevey, a crop reporter, inspected the Lindsey Brothers\’ farm and, on July 31st, they were notified that they had planted 590.3 acres, 23.3 more than their allotment.
On October 31st, S. Chun and A. Rowlett, supervisory crop reporters, checked the Lindsey Brothers\’ farm. At that time, they had harvested a substantial portion of the crop. The reporters redetermined that they had planted 624.96 acres. The reporters also redetermined that the Lindsey Brothers had plowed under only 8.86 acres of cotton prior to Danehower\‘s check rather than 23.3 acres.
On November 20th, the Lindsey Brothers were notified that their adjusted acreage was 616.1 acres, that the value of their excess production over their marketing quota was $27,054 and that they were assessed a penalty of $5,519.02.
The Lindseys\’ applied to the county committee for relief under the “erroneous notice” regulation. The application was denied on March 24, 1965.
They appealed to the Market Quota Review Committee. Their sole contention before the review committee was that they had relied upon the September 4th notice of compliance. The review committee, after a full evidentiary hearing, affirmed the action of the county committee.
The review committee found that (1) the Lindsey Brothers had plowed under only 8.6 of the 23.3 acres originally found to have been overplanted, (2) the extent of the error in the original notice should have caused them to question the acreage of which they were notified, and (3) at the time they were notified of the results of the spot-check, they had sufficient acreage to adjust their acreage but did not do so.
The Lindsey Brothers challenge the sufficiency of the evidence supporting each of the review committee\‘s findings.
(1) W. Lindsey testified that he “plowed up” more than 23.3 acres of cotton after receiving the original notice. The written report of D. Danehower, received in evidence, confirmed his testimony.
Chun, on the other hand, testified that he rechecked the farm and disallowed all of Danehower\‘s “plow-up credits,” except for 8.86 acres. He testified that he disallowed the difference of 14.44 acres because:
“* * * Mr. Peevey measured back from the edge of the field to where the cotton actually started and gave this as a deduction. Then the plow-up reporter that checked the plow-up came right along and gave this same identical deduction as a plow-up.
* * * * * *
“Now Mr. Lindsey did plow-up some cotton, but I would have to say on some fields there wasn\‘t any cotton plowed up from the original check but now on some fields there was, * * * [8.37 acres].”
The review committee rejected W. Lindsey\‘s direct testimony and accepted the testimony of Mr. Chun. It stated: “Mr. Chun and Mr. Rowlett carefully examined the acres on which plow-up credit had been allowed by previous reporters and found no evidence that plow-up had been performed in these areas.”
The issue as to whether W. Lindsey plowed up eight or twenty-three acres is one of credibility. This being the case, we accept the finding of the committee.
(2) We reject the review committee\‘s finding that the error in the original notice was so great that the producer should have questioned it. This finding is, of necessity, based on the conclusion that the Lindsey Brothers knew, or should have known, that they planted 625 acres rather than 567. There is no evidence before the review committee that the Lindsey Brothers had actual knowledge, or that a reasonable producer would have known, of the over-planting. The record shows that the county committee\‘s decision that the Lindsey Brothers should have known that they overplanted was based on an allegedly new but unpublished and unsubstantiated standard that anyone that overplanted by more than five per cent would automatically be denied protection of the “erroneous notice” regulation. While this may or may not be a reasonable standard to impose, this record fails to support its reasonableness as to the Lindsey Brothers or indeed that the standard was a reasonable one.
(3) We also reject the finding that the Lindsey Brothers were notified of the difference between 590 and 625 acres in time to adjust their acreage “in accordance with the applicable regulations.” By regulation, the Secretary provides for an adjustment prior to harvesting.
We hold that the Lindsey Brothers are entitled to relief under the “erroneous notice” regulation for all but 14.4 acres — the difference between the 23.3 acres they were instructed to plow under and the 8.86 acres that they were found to have plowed under.
HUGHES
Hughes received a 55 acre cotton allotment for the 1964 crop year. On July 7, 1964, S. Nichols, a crop reporter, visited the farm for the purpose of obtaining a report of acreage. On July 14th, Hughes received a notice stating that he was determined to be 3.2 acres in excess of his allotment. Hughes requested a remeasurement which was performed by another crop reporter, T. Leoppard, on August 24th. That recheck also indicated an excess of 3.2 acres and Hughes was duly notified.
Hughes elected to adjust his acreage and so notified the county ASCS office. On August 27, 1964, a third crop reporter, D. Danehower, revisited the farm to determine whether the necessary plow under had been completed. He reported in the affirmative and, on August 31st, Hughes was notified that he was in compliance.
Since the farm had been determined to be in compliance with the allotment, Hughes received his marketing card and proceeded to harvest all of his cotton.
On November 26th, S. Chun and A. Cothan, two supervisory crop reporters, rechecked the Hughes\’ farm. They determined that Hughes had originally planted 59.5 acres, instead of 58.2 acres, and that Hughes had not in fact plowed up the 3.2 excess acres of which he was originally notified.
On December 1st, he was notified that he was 4.5 acres in excess. And, on the same date, he was notified that his farm marketing excess was $3,505 and that the penalty was $715.02.
Hughes applied to the county committee for relief under the “erroneous notice” regulation. The county committee granted relief. The state office reversed. Hughes appealed to the Market Quota Review Committee which held a full evidentiary hearing and made findings of fact and conclusions of law.
In this appeal, Hughes\’ sole contention was that he was entitled to relief under the “erroneous notice” regulation.
The review committee refused to grant Hughes relief on the grounds that: (1) he did not plow under the excess of which he was originally notified, and (2) the extent of the error in the original notice should have caused him to question the acreage of which he was notified.
(1) We have reviewed the record and conclude that the review committee\‘s findings that Hughes had not in fact plowed under the excess acreage is supported by substantial evidence. The finding is based on the oral testimony of Crop Reporter Chun who testified that he examined the area supposedly plowed under and found cotton stalks but no lint cotton in the ground, indicating that the cotton had not been picked before it was plowed. It is further supported by the written report signed by Chun and Cothan.
(2) We hold, however, that Hughes had a right to rely on the Nichols\’ report of July 7th and the Leoppard report of August 24th that his excess acreage was 3.2 instead of 4.5 acres. Thus, the penalty should be assessed on the former rather than the latter amount.
We reverse and remand to the District Court with instructions to it to remand to the review committee for a reassessment of the penalties in accordance with this opinion.