CIAPESSONI et al v. USA

Filing 54

REPORTED ORDER granting in part and denying in part 22 Motion to Dismiss - Rule 12(b)(1). Signed by Senior Judge Loren A. Smith. (mr) Copy to parties.

United States Court of Federal Claims
No. 15-938
Filed: November 29, 2016
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BRUCE CIAPESSONI, et al,
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Plaintiffs,
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v.
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THE UNITED STATES,
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Defendant.
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M. Miller Baker, McDermott Will & Emery LLP, Washington, DC, attorney for plaintiffs.
Brian A. Mizoguchi, United States Department of Justice, Civil Division, Washington, DC, for
defendant.
OPINION AND ORDER
SMITH, Senior Judge
This case comes before the Court on defendant’s partial motion to dismiss. Plaintiffs,
Bruce Ciapessoni, et al. seek just compensation under the Fifth Amendment Takings Clause for
reserve-tonnage raisins taken from raisin growers by the United States Department of
Agriculture (“USDA” or “Agency”). Plaintiffs argue that they, along with any potential fellow
class members, were never compensated for the Raisin Administrative Committee’s
(“Committee”) taking of its reserve raisins throughout 2002-2009. Defendant alleges that
plaintiffs’ claims for the 2002-03, 2003-04, 2005-06, 2006-07, 2007-08, and 2008-09 crop years
should be dismissed because they are barred by the statute of limitations. Defendant’s motion to
dismiss is fully briefed and ripe for review.
I.

Background

During the Great Depression, Congress established the Agricultural Marketing
Agreement Act of 1937 (“AMAA”) in order to help farmers obtain fair value for their
agricultural productions. Lion Raisins, Inc. v. United States, 416 F.3d 1356, 1358 (Fed. Cir.
2005) (citing Pescosolido v. Block, 765 F.2d 827, 828 (9th Cir. 1985)); 7 U.S.C. § 602 (2000).
The AMAA directs the Secretary of Agriculture (“Secretary”) to issue “marketing orders” which
regulate the marketing and sale of agricultural commodities. 7 U.S.C. § 608c (2012). The Act

allows the Secretary to “issue marketing orders, upon the request of the affected producers,
regulating the sale and delivery of various commodities, including raisins, ‘in order to avoid
unreasonable fluctuation in supplies and price.’” Id. (citing Parker v. Brown, 317 U.S. 341, 368
(1943); Kyer v. United States, 369 F.2d 714, 716-17 (1966), cert. denied, 387 U.S. 929 (1967); 7
U.S.C. §§ 608c, 602(4) (2000)).
On or before August 15 of each crop year, the Committee meets to review shipment and
inventory data and “other matters relating to the quantity of raisins of all varietal types.” 7
C.F.R. § 989.54(a). After the review, the Committee typically recommends a reserve pool, at
which point the USDA usually implements the reserve by issuance of a final rule, which
determines the percentage of each farmer’s crop that will be “free tonnage” and the percentage
that will be “reserve tonnage.” 7 C.F.R. § 989.55. Then, on or about October 5 of each year,
raisin handlers are required to set aside a certain percentage of their raisins as the reserve tonnage
for the current crop year. 7 C.F.R. § 989.166(b)(1). The handlers then pay the raisin farmers for
the free tonnage raisins, but not for the reserve tonnage raisins. Complaint (hereinafter
“Compl.”) at 4.
Once the reserve raisins have been set aside, the Committee “acquires title to the reserve
raisings that have been set aside, and decides how to dispose of them in its discretion.” Horne v.
Dep’t of Agriculture, 135 S. Ct. 2419, 2424 (2015). Once the Committee determines what to do
with the reserve raisins, the proceeds from those raisins are used to pay the Committee’s
administrative expenses and export subsidies to certain handlers. Any remaining proceeds are
given to the growers on a pro-rata basis. 7 C.F.R. §§ 989.53(a), 989.66(h).
Plaintiffs allege that, in each of the 2002-03, 2003-04, 2005-06, 2006-07, 2007-08, 200809, and 2009-10 crop years, plaintiffs were only paid for their free tonnage raisins. Compl. at 6.
They further allege that the Committee, "acting on behalf of the USDA, physically appropriated
Plaintiffs’ reserve tonnage raisins, but provided no compensation to Plaintiffs when it did so.”
Id. On June 22, 2015, the Supreme Court held in Horne v. Dep’t of Agriculture, that the
California Raisin Handling Order’s reserve pool requirement was “a clear physical taking” that
violated the Fifth Amendment’s Takings Clause and for which just compensation was due. 135
S. Ct. at 2428. Plaintiffs contend that their claims and their status as plaintiffs were inherently
unknowable prior to the decision in Horne. Compl. at 6.
II.

Discussion
A.

Standard of Review

This Court’s jurisdictional grant is found primarily in the Tucker Act, which provides the
Court of Federal Claims the power “to render any judgment upon any claim against the United
States founded either upon the Constitution, or any Act of Congress or any regulation of an
executive department, or upon any express or implied contract with the United States . . . in cases
not sounding in tort.” 28 U.S.C. § 1491(a)(1). Although the Tucker Act explicitly waives the

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sovereign immunity of the United States against such claims, it “does not create any substantive
right enforceable against the United States for money damages.” United States v. Testan, 424
U.S. 392, 398 (1976). Rather, in order to fall within the scope of the Tucker Act, “a plaintiff
must identify a separate source of substantive law that creates the right to money damages.”
Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc in relevant part).
When the Court’s subject matter jurisdiction to hear a case is challenged, the plaintiff has
the burden of establishing by a preponderance of the evidence that this Court has jurisdiction
over its claims. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The
Court “must accept as true all undisputed facts asserted in the plaintiff’s complaint and draw all
reasonable inferences in favor of the plaintiff.” Trusted Integration, Inc. v. United States, 659
F.3d 1159, 1163 (Fed. Cir. 2011) (citing Henke v. United States, 60 F.3d 795, 797 (Fed. Cir.
1995)).
Summary judgment is appropriate when the evidence indicates that there is “no genuine
dispute as to any material fact and that the movant is entitled to judgment as a matter of law.”
RCFC 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A “genuine”
dispute is one that “may reasonably be resolved in favor of either party,” and a fact is “material”
if it might significantly alter the outcome of the case under the governing law. Anderson, 477
U.S. at 248, 250. In determining the propriety of summary judgment, the Court will not make
credibility determinations, and will draw all inferences in the light most favorable to the
nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88
(1986).
B.

Statute of Limitation

Defendant argues in its motion to dismiss that plaintiffs’ takings claims for the 2002-03,
2003-04, 2005-06, 2006-07, 2007-08, and 2008-09 crop years are barred by the statute of
limitations. Defendant’s Motion to Dismiss (hereinafter “MTD”) at 10. In making this argument
defendant points out that the takings claims ripened in mid-October of each crop year and argues
that plaintiffs only had 6 years from each crop year’s mid-October taking during which to make
their claims without running afoul of the statute of limitations. Id. at 13. Essentially, defendant
argues that plaintiffs’ earliest claim not barred by the statute of limitations is for the 2009-10
year, as plaintiffs filed this claim on August 26, 2015, before mid-October 2015, at which time
the statute of limitations would have run. This Court does not agree.
Plaintiffs argue that their claims are not barred by the statute of limitations due to the
accrual suspension rule. Plaintiffs’ Response to Defendants MTD (hereinafter “Ps’ Resp.”) at
34. The accrual suspension rule “suspends the statute of limitations when “an accrual date has
been ascertained, but plaintiff does not know of his claim.” Petro-Hunt, L.L.C. v. United States,
90 Fed. Cl. 51, 61 (2009) (quoting Japanese War Notes Claimants Ass’n, Inc. v. United States,
373 F.2d 356, 358-58 (Ct. Cl. 1967)). Essentially, the accrual suspension rule suspends the
accrual of a claim against the United States, “for purposes of 28 U.S.C. § 2501, until the claimant

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knew or should have known that the claim existed.” Id. (quoting Martinez v. United States, 333
F.3d 1295, 1319 (Fed. Cir. 2003)). This rule applies when “the change in circumstance arises
out of a decision that overrules or alters prior precedent, with the claim deemed to have been
tolled until the modifying decision was made.” Id.
Plaintiffs argue that the accrual suspension rule applies here because, while they
understood that a taking had occurred when the Committee designated a portion of their raisins
as reserve raisins, Evans v. United States barred their claims. 74 Fed. Cl. 554 (2006), aff'd, 250
F. App’x 321 (Fed. Cir. 2007, cert. denied, 552 U.S. 1187 (2008). They also argue that the law
barring their claim changed on June 22, 2015, when the Supreme Court effectively overturned
the ruling in Evans, in holding that the Marketing Order resulted in a physical taking. Horne,
135 S. Ct. at 2431.
Defendant argues, in the alternative, that the accrual suspension rule does not apply here
because the decision in Evans was not a binding precedent. Defendant’s Reply in support of
MTD (hereinafter “D’s Reply”) at 18. Courts must look to the reality of a decision’s effect, not
just to the formal question of whether the decision is binding precedent. It would certainly raise
ethical questions for an attorney to file litigation in a case where the client was sure to lose. In
such a case, the attorney would be wasting the client, the government, and the Court’s time and
resources. In cases where the facts are dramatically different or a long period has gone by since
the original decision there may be an ethical basis for relitigating an issue. However, the
plaintiffs and their attorneys should not be made to speculate that filing may breach an ethical
duty and non-filing may forfeit a potential claim. Such a legal standard would undercut rational
legal decision making in a changing world. It is important for courts to look not only to the letter
of the law, but also to principles of equity in making determinations. The decision in Evans,
while not technically binding, effectively barred plaintiffs from making a takings claim. It was
not until the decision in Horne that plaintiffs’ claims were legally defensible. It would be
unreasonable to expect the plaintiffs to file a takings claim that they reasonably believed was
barred by Evans precedent. As such, we must deny defendant’s partial motion to dismiss the
claims during the 2002-03, 2003-04, 2005-06, 2006-07, 2007-08, and 2008-09 crop years.
In making their complaint, plaintiffs aver that “[i]n numerous crop years…including but
not limited to 2002-03, 2003-04, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10, plaintiffs
delivered their raisins to handlers.” Compl. at 6 (emphasis added). By incorporating the phrase
“including but not limited to,” plaintiffs are attempting to leave the door open to earlier crop
years being included in their takings claims. Additionally, plaintiffs attempt to argue that their
takings claims did not accrue until the Committee completed its administrative compensation
process. Ps’ Resp. at 15. This Court does not agree. Defendant argues, in its motion to dismiss,
that the statute of limitations began to run when the handlers set aside the reserve tonnage
raisins. MTD at 11. This Court agrees with that assessment. Under the Fifth Amendment, a
physical taking is “‘a permanent and exclusive occupation by the government that destroys the
owner’s right to possession, use, and disposal of…property.’” John R. Sand & Gravel Co. v.
United States, 457 F.3d 1345, 1357 (Fed. Cir. 2006) (quoting Boise Cascade Corp. v. United

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States, 296 F.3d 1339, 1353 (Fed. Cir. 2002)); see Otey Mesa Property L.P. v. United States, 86
Fed. Cl. 774, 786 (2009) (citations omitted). Plaintiffs lost the use of their property when it was
taken from them, typically in mid-October of each of the 2002-03, 2003-04, 2005-06, 2006-07,
2007-08, and 2008-09 crop years. As such, the earliest year not barred by the statute of
limitation under the accrual suspension rule is the 2002-03 year.
III.

Conclusion

For the reasons set forth above, defendant’s partial MOTION to dismiss or in the
alternative for summary judgment is DENIED in part, and GRANTED in part as to any crop
years not stated with specificity in the original complaint. On or before Tuesday, December 20,
2016, the parties shall file a joint status report indicating how this case should proceed, with a
proposed schedule, as appropriate.
IT IS SO ORDERED.
s/

Loren A. Smith

Loren A. Smith,
Senior Judge

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