Raymond P. Zajac and Helen Ann Zajac v. Federal Land Bank of St. Paul

First, minоrity interests. Iowa promote controlling frivolous latitude

has broad Raymond P. ZAJAC and Helen Ann inter- registration tiny fractional party Zajac, Appellants, that ISP is Because we conclude ests. many tiny fractional interest and indeed a FEDERAL LAND BANK OF ST. consistently outpolled parties have

other PAUL, Appellee. ISP, preserving order the state’s interest process supports the chal- in its democratic No. 88-5353ND. Furthermore, lenged statute. the burden state, insurmountable, not while Appeals, United States Court of the state’s adminis- also relevant. While Eighth Circuit. burden alone would

trative and financial Submitted Jan. 1990. infringing justify ISP’s not sufficient rights, when considered associational July Decided reg- controlling party the state’s interest interests, tiny fractional istration falls in favor of Iowa.

balance purpose for

Finally, we note that

allowing supporters identify their affil- party enable the political

iation with a is to

parties primaries. closed See to conduct 43.1, 43.2, (political par- 43.3

Iowa Code §§ must nominate

ty as defined statute organizations, primary). Political

closed percent thresh-

which do not meet the two requirement, cannot under state law

old pri- by closed

nominate their candidates

mary They election. must nominate

caucus, convention, petition. Iowa See argue does that this

Code 43.2. ISP political opportuni-

requirement burdens its Therefore, restriction on

ty. while Iowa’s pref- to indicate their

allowing registrants political affiliation with a

erence for or interest in

party is related to the state’s their

enabling political parties to conduct primaries, it is not related to the

closed opportunities.

burdening of ISP’s

III. regis- conclude that Iowa voter

We procedures, which do not allow ISP

tration preference their

supporters to indicate regis- with ISP on state’s

or affiliation form, unnecessarily does not bur-

tration supporters to opportunity of ISP

den Accordingly, we affirm.

organize.

1182 1174, Zajacs’

F.2d at we consider the con- Harper tention in the frаmework of the decision. Zajacs argue The first farmer-borrowers Bohnhorst, Paul, Minn., St. Mark A. “ especial comprise a class ‘for whose bene

appellants. ” Cort, fit the was enacted.’ 422 U.S. [Act] Loken, Minn., Minneapolis, James B. 78, quot 95 S.Ct. at 2088 appellee. omitted). Although ed citation the Bank argument conceded at oral that farmer-bor HEANEY, LAY, Judge, Before Chief represent rowers a class intended to bene McMILLIAN, Judge, Senior Circuit Act, fit from the the Ninth Circuit has GIBSON, FAGG, ARNOLD, R. JOHN Congress pri addressed the Act concluded WOLLMAN, MAGILL, BOWMAN, marily Farm to the financial crisis BEAM, Judges, En Banc. Circuit System, Harper, Credit 878 F.2d at 1174- FAGG, Judge. Circuit 75. We need not decide which of these prevail Zajacs views should because Zajac appeal Raymond P. and Helen Ann required showings cannot make the other dismissing court order their from a district Pierce, Lynch, Merrill Fen Cort. See Bank against the Federal Land lawsuit Smith, Curran, 353, ner & Inc. v. 456 U.S. (the Bank) to enforce St. Paul ‍‌‌‌‌​​​​‌‌‌‌‌‌​‌‌​‌‌‌​‌‌‌​​‌‌​‌​‌‌‌‌‌​​‌​​‌​​‌​‌‍borrowers’ 1825, 388, 1844, 102 S.Ct. 72 L.Ed.2d 182 Agricultural rights provisions of the Club, (1982) v. Sierra (quoting (the Act). See 12 Act of 1987 U.S.C. California 287, 1775, 302, 1783, 451 101 68 U.S. S.Ct. (1988). In Harper v. Feder 2202-2202a §§ J., (Rehnquist, L.Ed.2d 101 concur 1172, Spokane, al Land Bank 878 F.2d — ring)). denied, (9th Cir.1989), cert. 1173 U.S. 867, (1990), -, 107 L.Ed.2d 951 110 S.Ct. Zajacs argue legisla- The the Act’s next the Act the Ninth Circuit held does not history supports implied private tive provide imрlied private right of action right though express of action even “an Supreme After the for farmer-borrowers. private right proposed of action was petition denied the for certiorari Court Congress,” Harper, both houses of 878 Harper, the Tenth Circuit embraced the 1176, F.2d at and the conference committee v. Federal holding. Ninth Circuit’s Griffin considering the House and Senate bills Wichita, 902 F.2d 22, Land Bank of 24 private right chose to delete the of action (10th Cir.1990). join We now in the hold provision from the final version of the ings Harper and affirm the Griffin 490, see H.R.Conf.Rep. Cong., No. 100th decision of the district court. 178, reprinted in 1987 U.S.Code 1st Sess. 2956, Zajacs Cong. The contend & 2973. We dis- Admin.News implies private right agree. report Credit Act of 1987 The conference committee’s permitting stating pri- them to enforce the Act’s that the committee action deleted “ rights provisions. Zajacs right provision ‘represents The vate borrowers’ of action that, recognize implied right correctly agreed the final statement of the terms “[i]n ” cases, Harper, employ we an both houses.’ action 878 F.2d at [tests Ash, Schweiker, 66, 78, Demby v. (quoting 422 Cort nounced in U.S. 95 1176 671 “ 2080, 2088, (1975), 507, (D.C.Cir.1981)). L.Ed.2d to F.2d 510 26 ] ‘[N]ext Congress persuasive intended to it determinе the statute itself is the most ‘whether ” ” Id.; Wilder v. private remedy.’ congressional create evidence of intent.’ [a] , —U.S.-, Jones, Virginia Hosp. see also United States v. 811 F.2d Ass’n 444, (8th Cir.1987). n. Zajacs n. 110 S.Ct. L.Ed.2d never- Transamerica Mort (1990) (quoting congressional theless contend statements Lewis, Advisors, Inc. v. gage during 444 U.S. made floor debate on the House and 62 L.Ed.2d 146 Senate versions of the Act show the Harper (1979)). right provision the Ninth of action was deleted Since Circuit recognized controlling, Cort also conference committee because some mem- Having carefully mistakenly believed farm- considered all of the bers bring already Zajacs’ arguments, agree suit ers had we “the Ninth is mis- This contention in Harper v. Federal analysis federal court. Circuit’s commit- placed. Nothing in the conference Spokane is correct.” Land Bank of Grif- gave the committee report suggests tee’s fin, 902 F.2d at 24. We thus join the Ninth weight congressional the state- any holding and Tenth Circuits there is no Indeed, fi- permit Act’s ments. “[t]o [the implied private right of action available materially by altered to be nal version] Act, enforce the and affirm the district place before colloquies, which [took] [these] court. form, achieved its final the [Act] ha[d] inadvertent, open to the would the door ARNOLD, Judge, concurring Circuit undermining perhaps planned, even McMILLIAN, judgment, the with whom by Congress language actually voted on Judge, joins. Circuit by President.” signed into law the fully agree Judge Heaney’s per- I with v. Harper, Regan (quoting 878 F.2d at 1176 dissenting opinion respect suasive with to a Wald, 468 U.S. 222, 237, 104 S.Ct. private right of action for farmer-borrow- (1984)). 171 82 L.Ed.2d Act of ers under the comprehensive Zajacs argue also I nevertheless affirm this 1987. would by provided remedies administrative judgment, ground on the that the Anti-In- Congress do not show intended to with- Act 2283, deprived junction 28 U.S.C. § private enforcement of the borrowers’ hold jurisdiction District Court of to entertain disagree. rights provisions. Again, we injunction against pro- this suit for an “ [private] remedy presumption ‘The that a ceeding pending in a state court. Accord- deliberately a statute is omitted from ingly, by I in the result reached concur Congress strongest when has enacted banc, is to affirm. Court en which including comprehensive legislative scheme dissenting opinion, According to the integrated system procedures for en- ” Anti-Injunction Act is not a bar when “an Massachusetts Mut. forcement.’ Life Congress, clearly creating a federal Act of Russell, 473 U.S. 134, 147, Ins. v.Co. remedy in a right or enforceable federal (1985) 3085, 3093, (quot- 87 L.Ed.2d 96 S.Ct. given equity, court of could be its intended Airlines, Transport ing Northwest Inc. scope by stay of a state court Union, 77, 97, 451 U.S. Workers Foster, proceeding.” Mitchum v. (1981)). 407 U.S. 1571, 1583-84, 67 L.Ed.2d 750 instance, 32 L.Ed.2d provides Act what added), quoted by consider “a series of de- Zajacs themselves post pp. procedural rights[,] dissent, agree all of precise tailed and 1192-1193. mandatory phrased in agree ... I cannot which this is the correct standard. Harper agree thus with terms.” We Zajacs in this case. The were that it is met review “Congress intended administrative up, by way of de- completely free to set remedy” for violations to be the exclusive fense to the state-court foreclosure at 1176. the Act. 878 F.2d ap- ceeding, independent to an their Agricultural Credit Act praisal under the Finally, Zajacs argue the Con- though during the of 1987. This is true Act the exclu- gress created in the address indeed for al- proceeding, foreclosure keeping sively concern of farmers federal judgment had most a month after been however, ignore, their land. We cannot on them, rights under against their entered the Act that restricts fore- the section of The Technical Act uncertain. were See proceedings. U.S.C. closure retroactively Act of Corrections 2202a(b)(3). Because foreclosure is an 1988— Act to accord with the amending the 1987 law,” “traditionally controlled state area required it Zajacs’ interpretation that 1177, “it Harper, F.2d at would be appraisal independent when [private] infer a cause of inappropriate to Congress law,” Cort, approved by proposed solely federal action based —was August signed by the President late 95 S.Ct. at 2088. 422 U.S. at time, important empowering Zajacs’ appeal equally objective At that pending prescribed was still before certain foreclosure farm borrowers with Supreme Court. This feder- Harper give Dakota rights. North also refused to defense, ultimately rejected by the weight al to the man- clear statements of the courts, could have been vindicated state agers of the bill on the floor of the Senate Supreme Court of the United States on regarding Congress the intent of Supreme from the North appeal Court of spect Finally, rights. borrowers’ Har- (The remedy Dakota. now would be per wrongly concluded that in- certiorari, by appeal, because rather than tended the ex- administrative review to be mandatory Supreme most Court’s when, fact, remedy clusive the Farm point repealed, jurisdiction has been but has neither enter- Credit Administration be avail- remains that a federal court would an to enforce borrowers’ tained action right, able to vindicate this federal possessed power nor to do so. it.) disregard It there- state courts should sum, imply private right In a the failure way that the for fore cannot be said the intent of of action contradicts Con- statutory rights to Zajacs’ federal gress. injunction for in a by suit enforced was The state courts are federal district court. BACKGROUND consider, obligated and in fact are open to consider, Supremacy under the Clause to $250,000 1980, Zajacs In borrowed right, statutory of federal assertions By they the Bank. were unable from they part of someone’s whether arise making payments, and the to continue part of a defense. claim or as proceedings Bank commenced foreclosure Zajacs a in state court. The raised number Anti-Injunction Act embodies a fun- The defenses to the action. On December limi- policy of federalism. It is a damental a thе state court issued decision jurisdiction of the federal tation on the of the Bank. favor courts, scrupulously that should be and one Exceptions to the Act should be observed. delayed entry of state court The Bank its construed, narrowly and doubts should be judgment Zajacs afford the foreclosure applying it. Atlantic resolved favor opportunity their loan an to restructure R.R. v. Brotherhood Loco- Line Coast Agri- under sections 102 and 106 of Engineers, 398 U.S. motive 1987, 12 cultural Act of U.S.C. Credit basis, 1739, 26 L.Ed.2d 234 On this 2202 and 2202a. §§ affirm the District Court’s dismis- would Zajacs application an The submitted sal of this case. restructuring, which was considered but April denied the Bank on HEANEY, Judge, Senior Circuit ground that the Bank would incur a LAY, Judge, dissenting with whom Chief greater Zajacs’ restructur- loss under the joins. ing proposal through than would occur always are hesitant to create con- We property sale of the at foreclosure. The important circuits on issues flict between Zajacs appealed that decision to the Bank’s however, instance, is one of the law. This They asked the credit review committee. not hesitate to set forth which we should independent appoint ap- committee to an question оn the of whether our own view praiser pursuant procedures required by private right farm have a borrowers and, refused the Act. The committee after rights pro- action to enforce the borrowers’ Zajacs’ application hearing, denied the Agricultural Act of visions of the restructuring. Judgment of foreclosure view, my Harper wrongly 1987. May was entered the state court on ignored plain and Harper decided. 1988. Act, mandatory language wrongly judgment Zajacs appealed The major objective of the Act decided that the Supreme to the Minnesota preserve viability of foreclosure was to the financial stay judgment. for a neglected the Court and moved the Farm Credit Act, denied, Anti-Injunction Federal and the trial court U.S.C. motion was The was affirmed. Zajacs asked the Unit- point,

At that enjoin the Bank DISCUSSION District Court to ed States conducting sheriffs sale on their from I. IS THE BORROWER’S PROCEDUR- complied cer- the Bank had land until AN AL RIGHT TO HAVE INDEPEN- rights provisions of the tain borrowers’ DENT EN- APPRAISER APPOINTED Act, mandating including provision IN FEDERAL FORCEABLE appraisal. The district court independent COURTS? hearing. It Zajacs’ motion after denied Credit Act of 1987 express implied that there is no held procedures and formulae un- vides detailed сomply failure to private right of action for a borrower can seek to have a der which rights provisions with the borrowers’ distressed loan restructured.2 require inde- the Act did not required to restructure loans lenders land,1 Zajacs’ appraisal of the pendent restructuring exceeds unless the cost of deny the Bank’s decision to decision, Restructuring foreclosure.3 the cost of banking was a commercial the defined as follows: requested would violate that the relief statutory from the The lower court concluded 1. no review committees have that credit (e) 2202a(a)(2) provide and as ap § 3. 12 U.S.C. independent legal obligation appoint an Zajacs restructuring follows: praiser situations. The interpretation is argue court’s that the lower (a)(2) Cost of foreclosure ignores it the incorrect because of foreclosure” includes— The term “cost 1988, clearly which Corrections Act Technical (A) outstanding the difference between the right indepen have a to an states that borrowers qualified loan made a balance due on a appraisal restruc on review of a denial of dent turing. loan, liquidation lender and the vаlue of the argues the Technical The Bank taking into consideration the borrower’s retroactively apply Corrections Act should payment capacity liquidation and the value of disagree with the Bank and case. in this loan; used to secure the the collateral court erred. Section believe that the district (B) maintaining cost of a the estimated provides Corrections Act 1001 of the Technical asset; nonperforming a loan as Act "shall made that the amendments (C) of administrative and the estimated cost immediately after the as if enacted take effect legal necessary a loan and to foreclose actions 100-399, Act.” Pub.L. No. enactment of the 1987 acquired dispose property as the result of 989, (1988). Since the Stat. 1008 102 § foreclosure, attorneys’ including fees opera Agricultural Credit Act of became 1987 costs; 6, 1988, court January the Technical Correc tive on (D) changes in the the estimated cost of operative the Za- well before tions Act became to secure a loan dur- appraisal value of collateral used requested independent jacs Moreover, ing period beginning on thе date of in April there is no manifest liquidate appli or of an action to foreclose justice from such retroactive initiation to the Bank disposi- presumably ending knew the on the date of the because the Bank the loan and cation collateral; May denied the law in 1988 when it state of the tion of the independent appraisal. Zajacs’ request (E) an as the result of all other costs incurred Thus, by the Bank in its brief are cases cited liquidation of a loan. the foreclosure or inapposite. (e)(1) Restructuring general 2202a(a)(3) provides as follows: § 2. 12 U.S.C. po- qualified that the lender determines If a loan” means a loan "distressed The term qualified lender of restruc- tential cost to such have the financial does not that the borrower proposed a turing accordance with the loan in according pay to its terms and that capacity to equal restructuring plan or to the is less than following charac- more of exhibits one or foreclosure, qualified lender potential cost of teristics: with the the loan in accordance shall restructure (A) demonstrating adverse The borrower plan. repayment trends. finanсial and (2) Computation of cost (B) past due under delinquent or The loan is determining potential cost whether In contract. the terms of the loan restructuring a distressed qualified lender of (C) in sub- factors listed One or both of the potential equal cost of to the loan is less than (A) (B), together with inade- paragraphs foreclosure, all qualified shall consider collateralization, lender high proba- present a quate factors, including— bility relevant to the lender. of loss 1186

The terms “restructure” and “restruc- drafting Congress simply errors when turing” rescheduling, include reamortiza- forgot codify its evident intention to jects 12 U.S.C. terms financially viable. way operations of the borrower will become taking of terest, monetary tion, renewal, that will make it of, request § any 2202a(a)(7). or forbear deferral ‍‌‌‌‌​​​​‌‌‌‌‌‌​‌‌​‌‌‌​‌‌‌​​‌‌​‌​‌‌‌‌‌​​‌​​‌​​‌​‌‍of other action to restructuring, concessions, on, probable If the lender re- principal loan in any modify and the that the further or in- provide a cause statute that suggests, question. equall deny an Chicago, implied 99 S Ct y silent or ” 441 “the does not Cannon v. cause US remedy legislative history 677, 694, ambiguous action. ^[1956] expressly will action doctrine University 60 L Ed 2d (1979). typically Rather, create or aof We recognized Congress’ have therefore procedures can be instituted the borrow- may implicitly appear “intent in the lan request er. The borrower can a review of statute, 2202(b)(1). guage or structure or in that decision. 12 U.S.C. As § review, aspect grants the circumstances its enactment." an of that the Act Advisors, independent ap- Mortgage an Transamerica Inc. borrower 2202(d). Lewis, 11, 18, praisal. 12 v. 62 L Ed 2d U.S.C. US determining whether the Zajacs have S Ct ^[246] implied cause of action to assert a bor- Thompson, 484 U.S. at procedural right independent rower’s added). appraisal procedures and other mandated A. Language and Structure Act, congressional under the intent is the Thompson ultimate Thompson, issue. emphasizes The 1987 Act that borrowers 513, 516, 484 U.S. power proce- have the to initiate certain Thompson, L.Ed.2d In the Su- dures. Part C of the Act is entitled preme implied Court defined the cause of Borrowers; “Rights Loan Restructur- of action doctrine rearticulated the Cort ing.” One of the enumerated there- analysis. v. Ash right independent appraisal is the to an determining pri- whether to infer a stage at the credit review committee of a vate causе of action from a federal stat- restructuring proceeding. pertinent The ute, point Congress’ our focal is intent in part of the Act reads as follows: we action doctrine would be a virtual dead cause of action. The ly Congress, four factors set out in statutory construction.... Our focus on US congressional intent does not mean that ^[2088] cerning that enacting had mind require (1975), along the statute. As intent, evidence that Members of enacting L Ed the we have relied on the creation of a 2d with the implied Cort v. statute, other tools guides 95 S Ct 2080 Ash, cause of private actual- to dis- of er). the stock or the property securing the loan for an review of the decisionfiled under subsec- tion credited clude, committee under this An appeal filed with a credit review qualified (b)(1) independent appraiser, a participation (2) part lender held of this appraisal, by an ac- section, any section certifications of request interests the borrow- (other a may request for a than in- correcting letter were it limited to (A) present applied the value of interest income to be sources to the debt and all assets principal forgone by сarry- and ing the lender in pledged, showing probabil- to be a reasonable restructuring plan; the out ity orderly debt retirement will occur as a (B) necessary reasonable and administra- proposed restructuring; result of the expenses working tive involved in with the (D)whether the borrower has furnished or implement

borrower to finalize and structuring plan; the re- willing complete is to furnish and current acceptable financial statements in a form (C) presented whether the borrower has a the institution. preliminary restructuring plan and cash-flow added). (emphasis analysis taking into account income from all for restructur- may the loan be suitable request a days after Within ing. (1), the credit paragraph under appraisal present the bor- committee 2202a(b)(2). review shall 12 U.S.C. § ap- appraisers a list of three with rower (c) may foreclose That no lender qualified lend- appropriate the proved has lender loan before the distressed select shall from which borrower er loan for completed consideration appraisal to conduct appraiser restructuring, rower such cost of tion with appraisal and shall consider which shall be respect to anym the loan. borne final determina- by the bor- results ^[12] U.S.C. § meet sonable That the personally opportunity 2202a(b)(3). lendershall with representative provide a rea- borrower

the lender. 2202a(c). 12 U.S.C. § appraisal made under copy any A (e) lender That determines provided to the subsection shall this restructuring a loan potential cost borrower. post-restructuring in accordance with 2202(d)(1), (2), 12 U.S.C. § equal potential to the plan is than or less added). lender foreclosing, qualified cost of appointment language requiring The in accordance restructure loan shall upon request independent appraiser anof plan. with the The permissive. mandatory rather than is 2202a(e)(l). 12 U.S.C. § to follow the stat- System lender directed precision which Con- with detail left only discretion procedure. The utory rights under gress set borrowers’ forth review commit- and the the lender credit Congress’ powerful indicators section with a list present the borrower tee tois specific intent to confer enforceable which the borrower appraisers from three of action A cause borrowers. this, the commit- Having done can select. “ readily ‘whеre will be found ap- results of tee consider must explicitly statute confer[s] any final determination praisal in- persons that class of directly on a the loan. spect to ” Re- plaintiff.’ Universities clude^] by Congress with language used The 754, 771- Coutu, 450 U.S. v. search Ass’n rights provi- the other borrowers’ spect to 1462, 1451, L.Ed.2d 662 72, 67 101 S.Ct. setting mandatory in forth is also sions University (1981) (quoting Cannon v. of Sys- that exceedingly procedures detailed 13, 677, n. 99 S.Ct. 690 Chicago, 441 U.S. Thus, Act the must follow. tem lenders (1979)); 13, 560 1946, 60 L.Ed.2d n. 1954 inter alia: provides, Mo., 974 n. 673 F.2d Miener v. State of it is determined that (a) That when Thus, lender (8th Cir.1982). if a 4 distressed, the is by a made lender loan by the rights specific mandated grants the notice to the provide written lender shall by a Act, purpose served is no further may be suitable the that loan borrower ultimate deci- the lender’s judicial review restructuring. or restructur- regarding foreclosure sion 2201(b). Coutu, 12 U.S.C. 450 U.S. at ing. See the ignored Harper The court days at 1462. before than (b) That not later reaching its in the Act language of plain proceedings, begins foreclosure lender decision.4 that borrower notify the lender shall the 301-03, Club, U.S. relying nia v. the Sierra point, on than rather

4. On 1783-84, 68 L.Ed.2d simply majority reasoning Harper, the flawed C.J., concurring). (Rehnquist, of whether the determination that declаres Court that agree happy “especial to benefit” ... am enacted Act was right action because implied analysis there no its under is irrelevant borrowers legisla- its language the statute reasoning ”[t]he cannot be recon- Ash. This Cort v. suggest Act was that the history concluding do not Rehnquist’s tive Chief Justice ciled with espe- rights for the federal create concurring opinion intended in his statement Califor- why Congress it impetus The reasons found nec- Much of the for H.R. 3030 adopt continuing depression detailed from essary to borrowers’ derives fully subsequent agriculture began early sec- that in the are set forth more 1980’s say originate it to that tions of this dissent. Suffice but whose roots the inflation- encourage ary period earlier efforts in the late 1960’s and 1970’s. restructuring of distressed loans had been by many System ignored lenders and Con- H.R. 3030 ... looks to the future —to an remedy gress intended to this situation. agricultural delivery system that not follows, Harper, majority rele- which sensitively will have dealt with to- gates language and structure of the day’s financially-stressed farm borrow- insignificant statute status under its competitive, ers but one that will more be analysis. Harper, v. Ash Cort See responsive more efficiеnt and more (specifically holding F.2d at 1174-75 economic realities. the district court erred when it concluded 53-54, reprinted Id. at in 1988 U.S.Code language implies of the Act Cong. & Admin.News at 2725. of action because that conclu- Report high- further states that the

sion somehow conflicts with statements on lights of H.R. 3030 include: major impe- the floor of the Senate that preserve tus of the Act was to the Farm Providing enhanced borrowers’ System). By ignoring language requiring rather and structure of the the Ninth Circuit than certain loans. foreclosure of analysis has modified the to a Cort Ash added). legislative determination of whether the discussing testimony of the vari- history implied alone creates an cause of appear ous witnesses to before the House long implied action. As as the cause of committee, Report states: exists, action doctrine the dominant focus representing Dozens of witnesses language must and structure of the commodity groups farmer and testified question. Act in Thompson, See 484 U.S. before the Committee as to two basic 108 S.Ct. at 520. Because the lan- way many System weaknesses in- clear, guage of the Act is so it would be problems. stitutions have dealt with its proper language, to rest our case on that First, System lenders have been exceed- supported by but the clear is also ingly reluctant to restructure individual legislative history of the Act. basis; and, ease-by-case loans on sec-

ond, pressures the tensions and on both Report B. lenders, The House brought borrowers and distress, collapse financial ‍‌‌‌‌​​​​‌‌‌‌‌‌​‌‌​‌‌‌​‌‌‌​​‌‌​‌​‌‌‌‌‌​​‌​​‌​​‌​‌‍have caused Report The House sets forth twofold comity of the traditional sense purpose of the Act. It stated: good System will between the and its require H.R. 3030 Farm will Credit borrower/owners. System lenders to restructure the loans 62, reprinted Id. at in 1988 U.S.Code financially-stressed farmer-borrowers, Cong. & Admin.News at 2733. help keep in order to farmers on the land Report The went on to state: help turn around the condition of Complaints System about the System stressed institutions. being borrowers abused at both the asso- 295(1), H.R.Rep. Cong., No. 100th 1st Sess. ciation and district levels have been like a added), (emphasis reprinted in 1988 constant drumbeat in the offices of some Cong. U.S.Code & Admin.News years. Members of for several say: package It went on to adopted The of borrower ante, persons," private remedy.” cial a benefit оf class of at Ante at 298 at [101 S.Ct. 297-298, 2d, 1781], 2d, 1781], at 68 L Ed at [101 68 L Ed at 110. 110-111, and because there is "evidence no at Id. 101 S.Ct. at 1784. Congress anticipated that that there would rates, origina- ferential interest and loan reflect a common sense in H.R. 3030 changes stan- charges, should have been tion interest rates approach which coopera- in a operating procedures options) loan and the of first dard tive, system. lending borrower-owned repurchase or lease land for- refusal merly that owned a borrower has 1988 U.S.Code reprinted by System on institu- been foreclosed at 2735. Cong. & Admin.News n Providing tion. borrowers with advance Report C. The Senate and accurate loan information will allow forwarding the Act to the floor of the In financial them make better informed Senate, Agricul- the Senate Committee decisions. ture, Forestry stated that Nutrition and Also, banks and associations will be major reorganization of Act called “for a required to use Credit Review Commit- Ameri- delivery mechanism for the credit tees to denials of new loans and review assure economic securi- agriculture” can restructuring of distressed loans. or- rancher and family farmer and ty for the institution, by der tо both assist the cre- System. the Farm stability of assets, ating earning help and to 230,100th Cong., 1st S.Rep. Sess. institutions, family System in all farmer reorgani- major elements of this One of family the distressed loans of farmers restructuring of the mandated zation was under Title IV if must be restructured necessary be- This was distressed loans. restructuring less than the the cost of restructur- System lenders were not cause cost of foreclosure. restructuring cost-effective. ing when added). Id. at 4-5 The Act and associa- requires banks certain By granting farmer-borrowers turn, must, in receiving assistance rights, tions also intended to specific the Senate farmers and ranchers consequences, assist troubled remedy many of the drastic restructuring delinquent their loans agricultural depression of caused restructuring costly is less 1980s, where num- including the tremendous Sys- Each Farm Credit than foreclosure. forcing families of foreclosures farm ber District, Sys- (FCS) that contains tem out of their homes. to receive assist- institution certified tem agricultural depression of the Asset Special ance must establish of the 1930’s terms 1980’s rivals that of a distressed Group to review each loan impact on farmers. of its for fore- or rancher that is slated farmer closurе. began operating Farmers who either restructuring procedures were These their significantly expanded the 1970’sor District’s the St. Paul FCS

modeled after period are most affect- operations in this had program—farmers in land values because by the decline ed when that was loans restructured their of debt. they greatest amount have and the beneficial both debt, However, no even farmers with helped has thou- program This farmer. retirement, have seen generat- are close needy farmers and has who sands of their retire- Applying net and hence System. their worth ed income for by the col- help savings stripped away al- nationally will ment procedures these System.... major lapse drain on the of farmland values. leviate a significantly fallen Report notes that the has The Senate While debt Id. at 3. spe- has not years farmer-borrowers three burden granted the last Senate bill Many of those uniformly an accurate determi- reduced. cific to ensure been restructuring holdings was cost- able to reducing were nation of whether their debt relatively they low had effective. do so because their income. relative to levels of debt farmer-borrowers provides Title IV Committee, the disturbing to the Most important rights including — causing the fall group major (regarding dif- other right to loan information 1190 has those reports.

debt been farmers forced off the House and Senate The 1987 enacted, foremost, inability their farms as a result of their Act was first and “to provide credit assistance to farmers.” to meet their commitments to lenders. roughly H.R.Conf.Rep., Cong., percent While of farmers 100th 1st Sess. (1987). percent have no debt some 10-12 Chairman of the Conference Com- mittee, Representative holding de la of Tex- percent farmers of the total Garza as, reading Report difficulty. debt are in extreme financial the Conference to the House, clearly expressed what the Confer- Id. at 14. thought driving ence Committee to be (D-Okla.), Senator Boren the Senate for force enactment of the Act: “the terri- bill, manager upon stated introduc- problem ble that our farmers and ranchers tion bill to Senate floor: in rural experienced during America have must All institutions restructure an past years.” Cong.Rec. several eligible nonaccruing loan borrower’s if: say: He went on to First, cheaper it is to restructure than to Speaker, hope my colleagues Mr. foreclose; second, apply- the borrower is join message will with us to send the at ing necessary all income over and above care, point that we would this that we living operating and reasonable ex- like them to have another tool at third, penses; if the borrower has the disposal, their which is credit an ac- capacity management financial skills ceptable they nature so that could contin- collateral; fourth, protect if the providing ue us with the excellent food capable working borrower is out exist- they past. and fiber that in the have done ing financial difficulties. added). (emphasis (R-Idaho), upon Senator McClure the re- request appeal Borrowers who turn of Report the Conference to the Sen- may the credit review committee also just passage ate and before final request independent appraisal Act, expressed Congress the sentiment of securing the collateral the loan con- in terms that few could misunderstand: independent appraisal ducted. If an important part The most legisla- of this requested, the committee must сonsider tion ... is the restructuring of farm independent apprais- the results financially loans of stressed farmer-bor- making al when its determina- final System. rowers of the keep order to tion on the loan. necessary these farmers on the land it is Cong.Rec. S16831 add- System banks and associations to ed). Harper While the court considered change their attitude toward debt re- Congress’ solvency concern for the overall structuring. past In the if a farmer was of the Farm Credit in the various delinquent payment, late it was legislative reports to indicate that almost automatic that the bank or associ- did not intend to create a cause of began liquidation ation foreclosure or ac- action, Harper, 1177-78, 878 F.2d at tion. The banks and associations were simply majority concludes that the confer- not helping focused on the farmer ence committee’s decision to eliminate the through restructuring. mounting With express cause of action is both the start losses, it doing became clear that busi- under Cort v. Ash. inquiry and end of an ness as usual would not suffice. A more majority thereby ignores all other indi- lenient attitude was needed. Because intent, congressional сators of and its in- forthcoming Sys- from the quiry is inconsistent with Thompson, tem, Congress made an in- See, supra U.S. 108 S.Ct. at 516. tegral part of the financial assistance note 4. package. If banks were to re- Report D. The Conference Congress, they ceive assistance from the Report The Conference reiterated must restructure farmer loans where it legislation requires goal previously broad of the Act This expressed cheaper.

H91 loans it is the review of all structuring procedures factors and of farmer cost alternative. important by Congress. least deemed S18458, Cong.Rec. S18469-70 133 Legislative E. added). History Other above, light certainly there can When the bill reached the floor of the Congress the Act quarrel no that viewed hearings, Senate after committee Senator responsive to the needs of farmer-bor- (D-ND) Burdick offered an amendment on ways that earlier Farm rowers Credit provide the Senate floor to expressly that Moreover, clearly Acts were not. the Act any person right would have a to sue Congress’ provide intent to manifests bor- under the Act. His concern was that the ability proce- with the to enforce rowers bill, express House which conferred an granted protect unjust- dures to them from only borrowers, cause of action was too ified foreclosure. This can be done narrow, eliminating existing rights.5 He right implying private of action for bor- stated: rowers. section G. See infra Currently, any person right has the right Implying private of action for However, sue these two entities. carefully to enforce defined borrowers provision arguably House limits this mandated cedures right System. to borrowers of the This Act is also consistent with the additional rights persons restricts who are not strengthen and goal of the 1987 Act borrowers, yet or who are farmer-bor- System. the Farm The Act stabilize rowers, to sue. de- requires lenders to make cost-effective My simply up amendment cleans this concerning possibility of re- cisions problem and restores the to all structuring. Harper v. Federal Land See persons, whether borrowers or not. (“the

Bank, Act is 878 F.2d at 1175 1987 (Dec. 1987). Cong.Rec. 133 S16995 further reinforced the fact that a bor- (D-Okla.), Senator Boren chairman of the delinquent right to restructure a rower’s Senate Subcommittee on Cred- is limited to situations which loan n bill, manager responded it and floor for the equal is less than or cost оf as follows: foreclosure”). Granting the cost of bor- unduly I am told that the House has private right injunctive relief rowers a right restricted the of the borrower to weigh lenders to the costs of re- requires bring proposal and that is the suit structuring against the costs of foreclosure my thought the House bill. It would be Injunctive resorting to the latter. before weakens, oppose ... that we would that House strengthens, rather than relief provision in the conference committee. System by requiring lend- the Farm Credit thorough a decision on a That would have much the same effect ers to make based right bring that a did not have the House version of the 1987 Act included borrower 5. The gave right damages provision borrowers the to sue an action for under the 1985 amend- any any for violation "of farm credit institution ments to the 1971 Farm Credit Act. standard, prescribed duty, under misunderstanding ques or limitation Much of the over the owing right and to the borrower." H.R. the Act tion whether borrowers had a Sess., H7638, Cong.Rec. Cong., 1st 133 100th present at the time enacted the action 21, 1987). (Sept. apparent Act stems from an confusion between actions under state law and statu common law obviously concerned Senator Burdick See, tory e.g., Cong.Rec. H00000- actions. 133 given rights applicants would be for loans (consideration of H.R. 3030 on the floor of 30 right enforce them under the but denied the Representatives, statements of the House of they, wanted to make sure that House bill. He Watkins, Glickman). Madigan, Reps. At the too, right an action to had the to maintain enactment, permitted some states bor time of procedures granted by enforce that, time, to use the Farm Credit Act of 1971 any rowers impression His at the the Act. as a defense to foreclosure. its amendments See, person had the to sue was not correct. Circuit, instance, e.g., Paul v. Over Federal Land Bank St. held in Redd v. Feder- This boe, (N.D.1987). Louis, (8th But see Pro N.W.2d 445 F.2d al Land Bank St. Cir.1988), Iperen, N.W.2d Credit Ass’n v. Van v. Production Credit Ass’n duction and Mendel 1986). Midlands, (8th Cir.1988), (Minn.Ct.App. F.2d 180 against Secretary Agriculture the amend- the of and adoption of Burdick as the attempting our enjoining have without other officials them from fore- ment would actual of closing to write the the Farm- farm loans obtained from here on floor amendment ers Home Administration because the Sec- time. retary promulgate procedural had failed to implementing regulations and substantive (R-Ind.), ranking minority Lugar Senаtor legislation to defer farm loans in intended Agriculture of the Senate Commit- member injunction pro- certain circumstances. The tee, stated: foreclosing Secretary from hibited understanding that confirm the would complied until he had farm loans with distinguished Okla- Senator from congressional Act. distinguished homa and I have with the of this amendment. We will author Wilson, Bank, In et al. v. Mason State oppose the House amendment fact (8th Cir.1984), 738 F.2d 343 we held problem, conference. We understand the Wilsons could not maintain an action appreciate the Senator’s and we would against private damages bank which this oc- pursuing not this amendment on had made a loan to the Wilsons under the assurance. casion with that Emergency Agricultural Adjustment Credit assurances, of these Sen- Id. On basis 95-334, Act of 1978. Pub.L. No. 92 Stat. his amendment and ator Burdick withdrew following (appearing 429-33 at U.S.C. and passed.6 This is both the best bill 1947)(1982). distinguished We Al- section explicit explanation why the cause following grounds: lison v. Block on the provision was eliminated at Con- of action involved an action a farmer Allison otherwise, as the ma- ference. To conclude against Secretary Agriculture to has, jority Congress’ is to assume intеnt provisions enforce the of 7 U.S.C. structure, language, support without 1981a We found that in section history. legislative 1981a, Congress’s it was intention to of Senator Boren and Sen- The comments place duty on the Secre- affirmative not, Lugar as ator described proce- tary Agriculture ‍‌‌‌‌​​​​‌‌‌‌‌‌​‌‌​‌‌‌​‌‌‌​​‌‌​‌​‌‌‌‌‌​​‌​​‌​​‌​‌‍to establish in Harper, the Ninth Circuit Bank and dures to defer foreclosures on farm leg- in the F.2d at isolated comments purpose loans. found that the We by plaintiffs record selected to bol- islative amendment was to benefit farmers They the comments ster their case. were subject to foreclosure. We held that the responsible for man- by those in the Senate Secretary’s failure to establish such through legislative pro- aging the Act cedures was abuse of discretion and cess. granted injunctive the farmer relief. Al- lison, such, support provides no F. Prior Case Law attempt imply Wilsons’ argues Farm Cred- The Bank that earlier money cause action to recover dam- in- cases decided it this Court alleged for the ages Bank’s violations volving question implied right regulations promulgated protect against giving militate private actions such FmHA. agree. rights here. I do not To the сon- Wilson, (emphasis added). 738 F.2d at past trary, I that the cases of this believe equitable support the relief. Circuit Block, Miller v. In Iowa ex rel. State of (8th J., Block, (Heaney, joined by 771 F.2d 347 723 F.2d 631 Allison J., C.J., Fagg, dissenting), Cir.1983), Lay, enti- with we we held that farmers were declaratory injunctive again relief relief to individual farmers granted tled to said, Burdick, Boren, Lugar, congressman up and the who stood "All 6. Senators tor or constituents, clearly giving congressmen spoke, right, $4 we are billion to who intended other System. Along judicial form of enforce- bail out the Farm Credit this, that there be some ment, going give spe- judicial enforcement we are farmer-borrowers at least the kind rights, to make such in the instant case. On the cific but we do intend that is asked for hand, single rights enforceable court.” there is not a individual sena- other of we followed Redd and held that neither the Secretary sought compel who to develop program a for the Agriculture to Farm Act of 1971 nor to Iowa payments” “disaster making of by implication pri- amendments created a within the who suffered disasters farmers damages. right spe- vate of action We noted that: meaning of the Act. We cifically open question left of whethеr of this Court It is not the business might farmer-borrowers have a payments make Secretary order provisions to enforce the of of action specific farmers. under SDPP the 1985 amendments. Congress has created a But when Significant differences exist between the contemplates pay- that such gram which and the 1987 Act. The 1985 amendments appropriate in cir- ments will be made cumstances, 1985 amendments did not have a section duty the clear of the it is promulgate regulations Secretary Rights.” entitled Title III of “Borrowers’ Congress. the intent of carry which out the 1985 amendments was entitled: “TI- TLE III —PROTECTION FOR FARMERS importance Id. at 352. We noted the “imperative statute AND OTHER FARM CREDIT SYSTEM at payments).” make disaster BORROWERS; {‘shall’ AND DISCLOSURE AC- CESS TO INFORMATION.” The 1985 simply required System In Redd v. Federal Land Bank St. amendments Cir.1988), Louis, (8th (1) we 851 F.2d provide lenders to their borrowers to the 1971 held that the 1985 amendments meaningful timely and disclosure of inter- implied not create an Farm Credit Act did information,7 (2) develop policy est rate a damages. right of action forbearance,8 (3) provide copies borrowers documents,9 (4) of loan establish re- In Mendel v. Production Credit Ass’n .credit Midlands, (8th Cir.1988), committees,10 provide a loan F.2d 180 view and (a) In accord- 9. SEC. 4.13A. ACCESSTO DOCUMENTSAND 7. SEC. 4.13. DISCLOSURE.— regulations regula- оf the Farm Credit Ad- ance with INFORMATION.—In accordance with ministration, System provide shall institutions Sys- tions of the Farm Credit Administration borrowers, their for all loans that borrowers, provide tem shall their institutions (15 Lending subject U.S.C. to the Truth in Act loans, copies of execution of of all the time meaningful timely seq.), disclo- et and § 1601 signed by any the borrower and at documents following: sure thereafter, request, cop- on a borrower's time loan; (1) the current rate of interest on signed all documents or delivered ies of (2) adjustable or variable in the case of an time, any request, and at borrower loan, frequency by which rate the amount incorpo- copy of the institution's articles of during rate can be increased the interest bylaws. ration or charter and or, the loan if there are no such term of limitations, effect, and the a statement to that OF AC- 10. SEC. 4.14. RECONSIDERATION to, (including, limited cost factors but not APPLICATION.—The Board TION ON LOAN funds, expenses, provision operating Farm Credit insti- of directors of each losses) be taken into account for loan by that will institution in establish one or more credit re- tution shall determining lending ad- committee(s), which shall include farm- view rate; justments to the interest Any applicant representation. er loan board effect, (3) by representative as shown notice, under sec- who has received written pur- example examples, required 4.13, deny or reduce the tion of a decision to participation certificates in of stock or chase for, requests interest; applicant applied if the so loan effective rate of the institution on the receiving thirty days writing after within notice, applica- any change may rate of such in the interest obtain a review such loan. person ble to the borrower's review before the credit decision applicant requests When a loan committee. (b) accord- 8. SEC. 4.13. DISCLOSURE.— decision, majori- review of an adverse credit regulations of the Farm Credit Ad- ance with serving ty persons review commit- on such develop System institutions shall ministration persons involved who were not tees must be governing policy Each forbearance. Promptly making the adverse decision. provide borrowers with a institution shall review, any applicant shall after such regarding policy copy for- of the institution’s writing review com- of the credit notified in or times as the Farm at such time bearance therefor. prescribe and the reasons in such mittee’s decision shall Credit Administration regulations. University Chicago, Cannon mechanism.11 view 60 L.Ed.2d 560 U.S. that it 1987, Congress determined had By (1979), the Farm Credit rely on simply could not Supreme has never withheld Court] program [The operate a initiate and System to remedy the statute ex- where private imple- regulations to promulgate to and on a of confers a benefit class meaningful plicitly program giving that ment not it does assure persons farmer-borrowers.12 and where distressed lief to and ability to activate persons those the Remedies G. Alternate process participate in the administrative contemplated by the statute. of the Har- adopts the view majority The armed has the Congress that per court 41, 41. at 1963 n. at 706 n. 99 S.Ct. Id. variety of ad- System with a Credit Farm assurance here.13 There is no such compliance to assure remedies ministrative Moreover, support not this record does rights provisions of the the borrowers’ with ability has either the that the FCA the view Also, by of 1987. Act Agricultural Credit willingness enforce the borrowers’ or to Administration entrusting the Farm Credit has its provisions. The FCA viewed rights enforce- (FCA) in the first instance examining responsibility as one of рrimary Act, according Harper, Con- ment System for in the financial the institutions mechanism that provided a fosters gress condition, quality management, sound- of applica- interpretation and consistency in ness, regula- and compliancewith laws and expense potential minimizes the and tion 1987, took During the FCA tions. private court chal- delay of numerous and actions, sought none of which enforcement within of institutions lenges to the conduct compliance with borrowers’ the System. the the 1987 Act. visions of however, fact, that the is FCA plain its Finally, even the FCA with limited effectively enforce the position to is in no to enforce the borrowers’ resources wanted provisions of the 1987 borrowers’ Act, authority to the its rights provisions of way have no The farm borrowers Act. is orders temporary cease-and-desist issue powers of the FCA. the remedial invoke orders can is- such charges unavailable because filing or procedure is no There only if the lender’s violation Supreme sued the Court noted complaints. As Employees, U.S. lending v. Federal of 13. In Karahalios local institution 307. Each SEC. 11. 1282, 527, (1989), the under 103 L.Ed.2d 539 established the 109 S.Ct. Farm Credit (12 et of the Civil Supreme § U.S.C. 2001 Court that Title VII Credit Act of 1971 held Farm (CSRA) not seq.) Reform of 1978 did shall— Service Act placed presence that has been imply each loan because of the review of action by institution to deter- remedy. status such nonaccrual of an administrative may be restructured such loan mine whether guideposts of indicate that Court These changes of the circumstances based on concluding Appeals quite correct in Act result of this and such institution the structure nor neither Act; and made the amendments provide any congressional intent to Act shows (2) notify writing the borrower each enforce cause of action to federal provisions of this section. such loan duty representation. employees of fair unions’ recognized duty Tennessee, expressly is in the That bring- Representative Jones of 12. remedy for its breach is and an administrative to the floor ing from H.R. 3030 committee FLRA, expressly provided House, for before stated: body by Congress to created enforce system summary to let the and FCA I want agencies imposed duties unions destroyed integri- they together know that VII, duty represen- including of fair Title Act and necessitat- ty Farm Credit of the 1985 legislative history Nothing tation. in the year’s legislation. The can- ed this called to our attention Title VII has again been irresponsible action tolerate such Congress contemplated indicating that direct regulator expect system its we duty. judicial of the union's enforcement respective responsi- diligently undertake their at-, at 103 L.Ed.2d 547. 109 S.Ct. at Id. cooperate matters in those and to bilities CSRA, VII advantage Unlike Title necessary that full is to ensure provides no effective admin- Act of 1987 provisions of the new law. taken of H11869, (Dec. 1987). remedy. istrative Cong.Rec. H11873 2159; Amalgamated likely insolvency cause or substan- 92 S.Ct. at of Clothing dissipation earnings of assets or Workers America v. Richman tial Co., seriously or otherwise Bros. the institution 348 U.S.

prejudice the interests of the investors 99 L.Ed. 600 System obligations Farm Credit or share- First, the Federal Land Banks were cre- holders in the institution. by Congress ated in 1916 as “instrumentali- 2262(a). Similarly, 12 U.S.C. its authori- § ties of the United States.” U.S.C. ty suspend or remove officers extends Indeed, the entire Farm Credit involving only to those situations substan- uniquely itself is federal because it loss, impairment tial financial of sharehold- pleasure is created and exists at the interests, personal dishonesty. er Also, Congress. systemwide require- 2264(a). U.S.C. § ments of the Credit Act of sum, are, practical In аs a borrowers restructuring, such as only not matter, unable to enforce their federal; uniquely provisions such are abso- through administrative avenues. lutely federal. Second, congressional purpose under- II. ACT ANTI-INJUNCTION lying completely the Act will be defeated Zajacs’ The district court held that Zajacs granted injunctive are not relief request injunctive relief violated the stop process. to the state foreclosure Both Anti-Injunction Zajacs disagree, Act. The the House and the Senate were concerned arguing squarely that this case falls in the System past lenders’ about abuses of “expressly exception to the authorized” proceedings.14 state court foreclosure Con- Anti-Injunction Act. The to determine test gress preclude therefore enacted the Act to expressly a federal statute autho- whether or a institution continuation of state injunction against an court rizes state proceeding court foreclosure until the lend- ceedings Congress, an Act of “is whether restructuring. By temporarily er considers clearly creating remedy a federal stopping the continuation of a foreclosure equity, enforceable a federal court of proceeding, encompasses the Act the use of given scope intended could be its injunctions by prevent federal court stay proceeding.” court state proceedings state court foreclosure viola- Foster, Mitchum v. U.S. tion of the Act. (1972) (em- 32 L.Ed.2d 705 Act, added). Moreover, together legislative phasis the federal stat- with its his- specific tory, congressional authoriza- question ute in need not make ref- establishes squarely falls Anti-Injunction erence to either the Act or tion so that the 1987 Act excep- injunction proceedings. “expressly of state court within the authorized” case, System country Farm Credit looked to In this the Bank used state court fore- proceedings Zajacs could closure once the as a first resort rather than a last foreclosure obligations. By enacting their financial meet today The bill that we introduce is resort.... Act, Congress attempted require the 1987 System reestablishing aimed at Farm Credit System lenders to evaluate the economics of policies help help that will farmers in need of resorting restructuring remedy to the drastic before preserving and at local control of the Farm introducing When one of foreclosure. System. bills, Pryor explained: Senator of the Senate Sess., Cong., Cong.Rec. S. 1st 100th established to The Farm Credit was 6, 1987). (May 6102-03 source ensure the existence of viable Melcher, upon introduction of the Senator credit on reasonable terms for farmers bill, second stated: Senate provide such times when the market will not disaster, Mr. Before this crisis becomes President, System’s Farm Credit historical credit. The something must do to lift this we strengthen participation mission has been to crushing rural Amer- burden from the back of agriculture, by broadening availability get system rates down ica. We must interest Unfortunately, of credit during to borrowers.... stop foreclosure and forced the wholesale years past of the few the crises family liquidation of farms and ranches. managers of the Farm Credit seem to Sess., Cong.Rec. Cong. S. 100th 1st cooperative forgotten have whom their 7, 1987). (Aug. many parts serve. established to Thus, Anti-Injunction tion to the Act. As a argument, final the Bank asserts Anti-Injunction injunctive Act does not bar grant its failure to Zajacs’ request relief in instance. independent this for an appraisal plainly

harmless under the circumstances of this еase. may The Bank’s assertion well be CONCLUSION true, argument but recognize fails to Farm private right borrowers have a scope the limited granted action to rights pro- enforce the borrowers’ and, by Congress borrowers consequently, visions of the requires one of which scope the limited of the remedies available that, review, independent appraiser pursuant federal By courts to the Act. request be named at the of the farmer-bor- asking this Court to evaluate the harmless- go rower.15 I would no further than that decision, ness of the Bank’s the Bank seeks suggest that, this case.16 I do not if the an evaluation of the credit review commit- rights provisions borrowers’ are followed tee’s decision to foreclose as reasonable in and the credit review committee still de- light independent of an appraisal prepared deny restructure, cides request Zajacs. question— This sort of of that decision reasonableness will be whether a credit review committee’s deci- appropriate It would not reviewed. sion is type judicial reasonable—is a a federal court to intrude into credit deci- inquiry clearly not authorized orAct System sions of a if lender the lender com- by Congress. desired This Court can en- plies statutorily with the proce- mandated only specific procedures force those grant- My dures. view is that enacted protect ed to borrowers. System Act the belief that lenders I would therefore remand this matter to wisely they complied would act with such the district court with enjoin directions to procedures. respect procedure With to the the Bank from foreclosing on the property here, Congress at issue wanted to ensure question until such time as the Bank that there independent appraisal was an complies with procedures the mandated the record so that the farmer-borrower found in rights the borrowers’ provisions of effectively argue could his case before the the Act. credit review committee and that the com- mittee would base its decision on all rele-

vant information. It is inappropriate for specific

us to refuse to enforce proce- this

dure. Harper, Cir.1983). applying

15. the Ninth Circuit in Cort provi- This is not a case where the Ash, 66, 78, 2080, 2088, v. 422 U.S. 95 S.Ct. question primarily sions in were concerned (1975), apparently L.Ed.2d 26 concluded the Hofbauer, with lenders rather than borrowers. "especial” 1987 Act was not enacted for the 700 F.2d at 1200. There is no better evidence of benefit of farmеr-borrowers. 878 F.2d at 1174- this “unmistakable focus” than the 1987 Act's disagree. I There can be no doubt that grant only power to borrowers of the to initiate protected farmer-borrowers are a class under procedures enacted within the "borrowers’ language the Act because its and structure estab- rights" provisions Moreover, of the Act. to con- lished broad for borrowers and mandato- ignores clude Sys- otherwise the Federal Credit ry duties for lenders. A cause of action specifically provide tem’s creation capital for readily will be found "where the farmers. explicitly right directly statute confer[s] on a persons plaintiff.” class of that include[s] the costly 16. Such a rule litigation will not result in Coutu, Universities Research v. Ass’n 450 U.S. System lenders. Enforceable of bor- 754, 771, 101 S.Ct. 67 L.Ed.2d 662 limited, requiring only specific rowers are in- (1981), (quoting University Cannon v. Chica- junctive relief. There 677, 13, will be the need go, 441 U.S. 690 n. 1954 n. discovery Moreover, pleadings. limited (1979)); 60 L.Ed.2d Miener v. State of Mo., (8th Cir.1982). damages would not hold that 673 F.2d n. available. Ul- timately, if the Certainly, Congress ‍‌‌‌‌​​​​‌‌‌‌‌‌​‌‌​‌‌‌​‌‌‌​​‌‌​‌​‌‌‌‌‌​​‌​​‌​​‌​‌‍lenders follow the nar- drafted the 1987 Act with rowly prescribed rules set forth an "unmistakable focus on the in the benefited class:" Cannon, permit Court will proceed farmer-borrowers. 441 U.S. at action to into 1955; S.Ct. at the merits Northwestern Nat'l lender’s decision to Hofbauer Rochester, (8th Bank 700 F.2d foreclose rather than to restructure.

Case Details

Case Name: Raymond P. Zajac and Helen Ann Zajac v. Federal Land Bank of St. Paul

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Jul 31, 1990

Citation: 909 F.2d 1181

Docket Number: 88-5353ND

Court Abbreviation: 8th Cir.