Lane v. UNITED STATES OF AMERICA et al

Filing 29

ORDER granting 21 Motion for Preliminary Injunction. The USDA shall stay its enforcement of Plaintiff's debarment pending the conclusion of this Court's judicial review. Plaintiff shall inform any potential lenders that his crop insurance is subject to rescission upon an adverse judgment by this Court. Signed by Chief Judge J. Randal Hall on 2/27/2018. (pts)

IN

THE

UNITED

STATES

DISTRICT

SOUTHERN DISTRICT

OF

COURT

FOR THE

GEORGIA

STATESBORO DIVISION

STEVE LANE,

Plaintiff,
*

CV

617-082

*
*

*

UNITED STATES OF AMERICA,
UNITED

STATES

AGRICULTURE,

DEPARTMENT

*

OF

and SONNY PERDUE,

in his Official Capacity as
Secretary of the United States
Department of Agriculture,

*

*

Defendants.

ORDER

Before

the

Court

Injunctive

Relief."

Plaintiff

requests

penalty imposed by
(the

"Department")

Court.
§ 705,

is

(Doc.
the

the

Plaintiffs'

21.)

Court

Pursuant
stay

the

United States

pending

"Emergency

review

to

5 U.S.C.

five-year

Department

of

Motion

that

for

§ 705,

debarment

of Agriculture

decision

by

this

Because the Court finds that a stay is warranted under
the Court GRANTS Plaintiff's motion.
I. Background

In 2009 Plaintiff filed a claim for crop insurance with the
Great

American

drought

Insurance

insurance

on

Company

44-acres

("Great

of

American")

non-irrigated

to

"dry

recover

land"

tobacco.

After

its

adjuster inspected Plaintiff's

land,

Great

American approved the claim.

In 2012 Randy Upton,
Agency

for

investigate
major

the

Department

of

Plaintiff on the

scheme

("FCIP").

an investigator with the Risk Management

to

defraud

Agriculture

suspicion that

the

Federal

Based on the results of Mr.

("RMA"),
he

Crop

was

began

to

involved in

Insurance

a

Program

Upton's investigation,

the

RMA determined that Plaintiff's farm did not experience a drought
in

2009

and

policy.

it

recommended

Subsequently,

that

Great

Plaintiff

federally-mandated arbitration.

and

American

Great

void

the

American

insurance

engaged

in

The arbitrator found in favor of

Plaintiff and "would have allocated all costs and expenses for the

action

against

the

Authorized

Insurance

regulations permitted such an award."
In

December

2014,

administrative

action

Judge ("ALJ")

Janice K.

2015.

On

Plaintiff

April

5,

the

against

if

federal

(Doc. 11, at 7.)

Government

Plaintiff.

proceeded

with

Administrative

Law

Bullard held a two-day hearing in June

2016,

"willfully

Provider

and

the

ALJ

issued

intentionally

an

order

provided

finding

false

or

inaccurate information to the Federal Crop Insurance Corporation

or to

[Great American]

with

respect to

an

policy under the Federal Crop Insurance Act."

insurance

plan

or

(Doc. 12, at 13.)

The ALJ imposed an $11,000 fine and a five year debarment in
which Plaintiff was disqualified "for five years from receiving

any monetary

or non-monetary benefit

under

various

statutory

provisions

[as

well

as]

any

law

that

provides

assistance

to

a

producer of an agricultural commodity affected by a crop loss or

a decline in the prices of agricultural commodities."
at

6.)

In

other

words,

the

ALJ

barred

(Doc.

Plaintiff

15,
from

participating in^ the FCIP.
Plaintiff

5 U.S.C.

he

§

now

705.

seeks

a

Plaintiff

cannot obtain the

unable

to

farm,

he

of

claims

loans he

that

debarment

without

pursuant

crop

to

insurance,

needs to operate his

farm in the

that "if he

will

in most

farm and equipment to foreclosure."
II.

5 U.S.C.

his

Plaintiff further claims

upcoming growing season.
is

stay

§ 705 states,

likelihood lose

his

family

(Doc. 21, at 5.)

Discussion

in pertinent part:

When an agency finds that justice so requires, it may
postpone the effective date of action taken by it, pending
judicial review. On such conditions as may be required and
to the extent necessary to prevent irreparable injury, the
reviewing court
. . . may issue
all necessary and
appropriate process to postpone the effective date of an

agency

action

or

to

preserve

status

or

rights

pending

conclusion of the review proceedings.

When determining whether to grant a stay under § 705,

seemingly

every court has applied the four factors traditionally required

to obtain a preliminary injunction under Federal Rule of Civil
Procedure

stay

will

likelihood

65:

"(1)

prevail
that

absent a stay;

the

(3)

the

on

likelihood

the

moving

merits
party

that

of
will

the

the
be

party

seeking

appeal;

(2)

irreparably

the

the

harmed

the prospect that others will be harmed if

the

court

grants

granting the
974

(D.C.

F.2d

v. Fed.

stay."

Cir.

773,

the

(4)

the

United States

public
NRC,

see also Associated Sec.

(10th Cir.

interest
772

Corp.

F.2d

v.

1960);

Va.

Petroleum

Jobbers

925

(D.C.

1958);

833 F. Supp.

Cir.

in
972,

SEC,

259 F.2d 921,

Power Comm'n,

Club v. Jackson,

and

Cuomo v.

1985);

774-75

stay;

283

Ass'n

Sierra

2d 11, 30 (D.D.C. 2012).

Both parties contend that the same standard which governs a

preliminary

disagree,

injunction

however,

standard.
four

as

Plaintiff

factors

a

The Government,
demonstrate

a

how

that

lower

a

"all

that

under

Court
the

more

probability

four

stay

the

on the other hand,

that

injunction."

to

contends

such

counterbalance

governs

§

705.

should

Court

may

success

apply

the

and

balance

the

injury

irreparable

of

They

can

vice

versa.

contends that Plaintiff must

factors

weigh

in

favor

of

[an]

(Doc. 24 at 3.)

The Court finds that Plaintiff's balancing approach is more

in line with the language of § 705. The plain language of § 705

gives

courts

ample

room

to

make

an

equitable

decision

when

granting a stay and does not confine them to the four factors
needed

to

grant

a

preliminary

injunction

under

Rule

65.

Additionally, the primary concern of § 705 appears to be whether

or not the party requesting

injury" absent a stay.

review would suffer "irreparable

Thus, the Court will consider all of the

four factors required for a preliminary injunction, but it will

not require Plaintiff to demonstrate that all four factors weigh

in

favor of a stay.

Instead,

it will balance the

four

factors

to determine whether a stay is warranted as a matter of equity.
First,

the

Court

irreparable

harm

absent

Plaintiff

submitted

an

finds

a

that

stay

Plaintiff

of

affidavit

his

will

five
that

stating

year
he

suffer

debarment.

attempted

to

secure crop financing for the 2018 growing season but was denied

financing because he could not obtain crop insurance.
1.)

Plaintiff also submitted an affidavit from his banker,

Lanier,

which

the

Vice-President

states

that

of

Second,

the Court

succeeding on

Durden

Banking

Durden Bank could not

without a crop insurance policy.

which

(Doc. 21-

grant

Company,

Luke
Inc.,

Plaintiff a loan

(Doc. 26-1.)

finds that Plaintiff has a probability of

appeal.

Plaintiff

raises

could potentially demonstrate

"arbitrary and capricious."

many

that

the

evidentiary issues
ALJ's

decision was

While the Court admits the Plaintiff

faces an uphill battle given the standard of review,

the record at

bar indicates that his appeal is certainly not frivolous.

Third,

the

Court

finds

that

the

prospect

being harmed because of the stay is low.

of

other

parties

The only parties which

might be harmed should a stay be granted are potential lenders to
Plaintiff.

This

harm,

however,

can

be

abated

by

the

Court

imposing a condition that Plaintiff inform potential lenders that

he might

lose

his crop insurance

should this Court rule against him.

for the 2018
Thus,

growing

season

any potential lenders

can adequately assess the risks before lending to Plaintiff.

Fourth,
the

public

incident

the Court finds that granting the stay will not harm
interest.

for

nearly

Plaintiff
a

decade

Federal Insurance Program.

has

since

operated
he

his

allegedly

farm

without

defrauded

the

Additionally, while the public interest

is served by the prompt enforcement of rules and regulations,

it is

also served by ensuring that citizens have recourse to Article III
courts as a check on the powers of administrative agencies.

Balancing
Plaintiff
5 U.S.C.

§

four

entitled

is

these

to

factors,
a

stay

(Doc.

of

Court

the

concludes

agency

action

that
under

705.
III.

Upon

the

the

21.)

Plaintiff's

foregoing,
The

Court

Department

debarment

judicial review.

the

Conclusion

SHALL

pending

the

GRANTS
STAY

Plaintiff's
its

conclusion

motion.

enforcement
of

this

of

Court's

As a condition of this stay Plaintiff SHALL

inform any potential lenders that his crop insurance is subject
to rescission upon an adverse judgment by this Court.

This stay

SHALL NOT apply to the fine imposed by the ALJ.

ORDER ENTERED
February,

at Augusta,

Georgia,

this off/^ day of

2018

\

jLrandal hall,/ chief judge

unitejp states district court
iern district of georgia