Lane v. UNITED STATES OF AMERICA et al

Filing 30

ORDER granting in part and denying in part the parties' 9 Motion for Summary Judgment and 15 Cross-MOTION for Summary Judgment. The Court vacates and affirms certain portions of the ALJ's decision. The Court remands this case back to t he ALJ for purposes of determining the appropriate sanctions in light of this Court's ruling. This Court's injunction pursuant to 5 USC § 705 shall remain in place until the ALJ determines the appropriate sanctions on remand. Signed by Chief Judge J. Randal Hall on 09/06/2018. (jlh)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
STATESBORO DIVISION

STEVE LANE,

Plaintiff,
CV 617-082
V.

UNITED STATES OF AMERICA,
UNITED STATES DEPARTMENT OF

AGRICULTURE, and SONNY PERDUE,

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

ORDER

Before

of

the

America's

judgment.

Court

{the

are

Plaintiff and

^^Government")

(Docs. 9, 15.)

Defendant

cross

United

motions

for

States

summary

Plaintiff, a farmer from southeast

Georgia, challenges a decision issued by an Administrative Law

Judge ("ALJ") with the United States Department of Agriculture
C'USDA").

The ALJ's decision found that Plaintiff made a false

claim

crop

for

insurance

on

his

2009

tobacco

crop

and

that

Plaintiff failed to properly report information as required by

his crop insurance policy.

The ALJ imposed an $11,000 fine and

barred Plaintiff from participating in any federal aid program
to farmers for five years.

Plaintiff seeks judicial review from

this

Court

and

argues

that

the

decision

was

arbitrary

and

capricious.

I. BACKGROUND

Plaintiff

is

a

farmer

in

Emmanuel

County,

Georgia.

In

April 2009 Plaintiff planted tobacco on two plots of land: Unit
101 and Unit 104.

On Unit 101 he planted 45 acres of irrigated

flue cured tobacco.

On

Unit 104

irrigated flue-cured tobacco.

he planted 44 acres of non-

Plaintiff insured both units with

the Great American Insurance Company (""Great American").
The

centerpiece

of

Plaintiff's

crop

insurance

policy,

or

any crop insurance policy for that matter, was the ""production

guarantee."
determined

When a farmer makes a claim, the loss incurred is
by

imputing

mathematical formula.

the

production

guarantee

into

a

The production guarantee is, essentially,

the number of pounds of harvested tobacco a farmer may insure on
any given plot of land, and it is usually measured in pounds per
acre.

The production guarantee is calculated using either (1)

the farmer's previous production history on the specified land
or (2) if no production
land,

county

actuarial

history is available

tables.

Plaintiff

Unit 104, thus Great American relied

had

on

the specified

never

farmed

on

upon the county actuarial

tables to calculate his production guarantee.

Plaintiff's 2009

production guarantee was 1,580 pounds per acre for Unit 101 and

1,510 pounds per acre for Unit 104.

His total guarantee (the

production

guarantee

times

the

insured

acreage)

was

71,100

pounds for Unit 101 (45.0 acres X 1,580 lbs.) and 66,440 pounds
for Unit 104 (44.0 acres X 1,510 lbs.).

On August 7, 2009, Plaintiff filed a notice of loss on Unit
104

due

to

insurance
tobacco.

drought

adjuster

and

wind

damage.

On

Ned

Day

inspected

August

12,

Plaintiff's

2009,

insured

Day estimated that Unit 101 would produce 2,188 pounds

of tobacco per acre (i.e., 98,460 lbs. total) and Unit 104 would
produce

2,207

total).

pounds

Because

of

Day's

tobacco

estimated

per

acre

production

(i.e.,
per

97,108

acre

lbs.

exceeded

Plaintiff's production guarantees. Day estimated that Plaintiff
would have no need to file a claim.

After harvesting the tobacco. Plaintiff reported that: (i)
Unit

101

(the

irrigated

plot)

produced

177,099

pounds

of

tobacco,^ of which 101,657 pounds were sold to Market Center
Planters

('"MC

Planters")

for

$165,042;

and

(ii)

that

Unit

104

(the non-irrigated plot) produced only 13,394 pounds of tobacco,

which was sold to MC Planters for $18,515.85.
to

Plaintiff's

reported

crop

yields.

Unit

Thus, according
101

exceeded

its

^ The Court notes that despite its efforts, it could determine
neither the source nor significance of this number.

The Court could
only determine that, for purposes of this case, it is largely
irrelevant.
The Government cited this number in its complaint to the
ALJ, but the Government's main investigator. Randy Upton, later
recanted its use and clarified that the operative number was really
the 101,657 pounds sold to MC Planters. (See Transcript, p. 174-75.)

production guarantee by 30,557 pounds^ while Unit 104 missed its
production

guarantee

by

53,046

pounds.

In

December

2009

Plaintiff made a claim on Unit 104 for a loss of $104,429.

In

January

of

2010,

$104,429.00

Plaintiff

minus

credits

collected
due

to

an

indemnity

Great

payment

American,

for

a

net

payment of $72,688.
Around

Carolina

2009,

received

the

Office

information

of

Inspector

about

a

General

major

scheme

in

by tobacco

producers to defraud the federal crop insurance program.
its

investigation,

Independent

Tobacco

the

Government

Services,

Inc.

subpoenaed

("ITS").

North

During

records

Randy

from

Upton,

an

investigator with the Risk Management Agency for the Department of
Agriculture ("RMA"), sought records of tobacco producers in Georgia
who

failed

pounds.

to

Mr.

meet
Upton

their

2009

identified

guarantees
Plaintiff

as

by

more

than

falling

50,000

within

this

an interview

with

category, and, in 2012, began to investigate Plaintiff.
On October 31, 2012,

Mr.

Upton

conducted

Plaintiff at the Farm Service Agency office in Swainsboro, Georgia.

During the

interview,

Mr.

Upton

Plaintiff's 2009 tobacco crop.

inquired into the

specifics of

Of particular interest to Mr. Upton

was Plaintiff's sale of approximately 29,000 pounds of tobacco to
ITS in 2009.

Plaintiff initially did not recall any sales to ITS,

^ Once again, the Court notes that it is using only the 101,657
pounds to determine the excess of the production guarantee, not the
177,099 pounds cited in the United States' complaint.

but when informed that Joseph Boyett bought tobacco on behalf of
ITS, Plaintiff speculated that it was probably trash tobacco or
might have been tobacco left over from previous years ("carryover
tobacco").

Based

upon

investigation,
losses

from

this

Upton
a

interview

hypothesized

drought

but

and
that

instead

the

results

Plaintiff
(1)

did

shifted

of

not

some

his

suffer
of

his

production from Unit 101 to Unit 104 and (2) sold Unit 104 tobacco
to ITS.

Upton's hypothesis went as follows:

Plaintiff exceeded his production guarantee by 30,000 pounds
on Unit 101 and missed his production guarantee by 54,000
pounds on Unit 104.
Plaintiff sold 29,000 pounds to ITS which he claimed was
carryover tobacco from 2006.
Assume that the 30,000 overproduction in Unit 101 was really
production from Unit 104.
Assume also that the 29,000 sold to ITS was not carryover
tobacco from 2006, but was instead production from Unit 104.

The sum of 30,000 (the overproduction from Unit 101), 29,000
(the alleged carryover tobacco), and 14,000 (Plaintiff's
reported production from Unit 104) is 73,000 pounds.
73,000 pounds is only slightly greater than the original
66,400 pound production guarantee for Unit 104.
Additionally, if Plaintiff had shifted the 30,000 pounds from
Unit 104 to Unit 101, then Unit 101 would have produced only
71,000 pounds (101,000 - 30,000 = 71,000) — almost exactly the
original production guarantee for Unit 101.
Thus,

Upton concluded,

after taking

into account the

adjuster's

prediction that both Unit's 101 and 104 would hit their production
guarantees. Plaintiff must have shifted production from Unit 104 to
Unit 101.

At the

conclusion of

Plaintiff to the

United

his investigation, Mr.

States

Attorney's

Office.

Upton

referred

In

December

2012, Plaintiff and his attorney met with Assistant United States
Attorney Edgar Bueno.

Plaintiff explained that the tobacco he sold

to ITS in 2009 was carryover tobacco
stored

because

provided

the

of

unfavorable

United

States

market

he had grown in 2006 but

conditions.

Attorney's

Plaintiff

Office

supporting the existence of a drought in 2009.

with

also

evidence

The United States

Attorney's Office declined to prosecute Plaintiff and referred the
case back to the RMA for administrative review.

On April 25, 2014, the RMA recommended that Great American
void

Plaintiff's

policy.

PRISM

weather experts

exist

in

Emanuel

The

RMA

disclosed

County,

wrote that "[a]n

that

Georgia

analysis

drought conditions did

in

2009."

{CX-22,

at

by
not
3.)

Subsequently, Plaintiff and Great American engaged in federallymandated arbitration.

Plaintiff's

drought

The arbitration, however, did not focus on

claim.

Rather,

it

focused

on

Plaintiff's

failure to report the tobacco he claimed to carryover from 2006.

Plaintiff's insurance policy required Plaintiff to submit an
acreage

report

every

year.

The

policy

required

Plaintiff

to

include in his acreage report, inter alia, any ''carryover tobacco
from

previous

defined

years."

(RX-14,

at

36.)

carryover tobacco as "[a]ny tobacco

The

insurance

produced

policy

on the

FSA

farm serial number in previous years that remained unsold at the

end of the most recent marketing year."

(Id. at 35.)

Incorrectly

reporting "any information on the acreage report for any crop year"
could

result

in

repayment

of

benefits

by

the

insured

"if

the

correction

of

any

indemnity, prevented

misreported

information

would

affect

an

planting payment[,] or replant payment that

was paid in a prior crop year."

(Id. at 15.)

Using Plaintiff's failure to report any carryover tobacco on

his 2009 acreage report, Great American sought to void the 2009
policy and avoid making payment on a claim submitted by Plaintiff
in 2012.

The arbitrator ruled in favor of Plaintiff, finding that

the failure to include the 2006 carryover tobacco was: (1) ''NOT
intentional" because "[t]he overwhelming weight of the evidence was
that Mr. Lane did not attempt to conceal anything and did not have

knowledge that the information provided in the Acreage Reports and
the Production Reports was false"; and (2) "NOT material" because
"the failure to list the Carryover Tobacco . . . (i) in no way
affected

any decision

making

by

[Great

American] (or, for

that

matter, by USDA or any division thereof); (ii) in no way affected
[Great /American's] ability to adjust any claim or loss; and (iii)
in no way affected premiums charged to Mr. Lane as the insured or

otherwise caused a monetary loss to the crop insurance program."
(RX-36, at 5-6 (emphasis in original).)
In December 2014, the Government brought an administrative

action against Plaintiff seeking the maximum penalty of a five
year

disqualification

from

participation

in

government

programs as well as the imposition of an $11,000 fine.

complaint, the

crop

In its

Government alleged that "drought conditions did

not exist in Emanuel County, Georgia in 2009" and thus Plaintiff

made a false crop insurance claim.
that

Plaintiff

material

and

''knowingly

relevant

and

fact

The Government also alleged

intentionally,

[sic]

pertaining

misrepresented

to

[his]

policy"

when he "did not report alleged carryover tobacco on his acreage

report, filed false Notice of Loss, and signed a 2009 loss claim
production
payment

worksheet

to

be

Complaint.)

made

to

cause

[sic]

him."

an

incorrect

(Government's

indemnity

Administrative

The Government's complaint cited as its supporting

evidence,

among

doubt

the

on

that

other

things,

existence

of

PRISM

a

weather

drought,

reports

loss

casting

adjuster

Day's

prediction that Units 101 and 104 would exceed their production
guarantee.

Plaintiff's

interview,

and

allegedly

Plaintiff's

inconsistent

failure

to

October

report

any

2012

carryover

tobacco.

In June 2015, ALJ Janice K. Bullard held a two-day hearing

in

Swainsboro,

Georgia.

The

ALJ

heard

evidence

from

several

sources, including Mr. Lane.
Christopher
agent,

testified

Webb,
that

Plaintiff's
he

prepared

long-time
Plaintiff's

crop

insurance

acreage

reports

for the years 2006, 2007, 2008, and 2009, and that Plaintiff did

not

report

any

carryover

crop

during

those

years.

Webb

testified that the form he uses does not include a special place
to

report

carryover

carryover
in

the

tobacco,

remarks

but

section

he
of

would
the

have

form.

noted
Webb

any
also

testified that, although he prepared Plaintiff's notice of loss

8

for wind damage, he did not prepare Plaintiff s notice of loss
for drought.

According to Webb, Plaintiffs notice of loss for

drought was irregular because it included a claim number, which
is

normally not assigned

until after the

notice is submitted,

and the notice identified a future, rather than present, loss.
Ned

Day, the insurance

2009 crop,
"'both

testified

irrigated

and

that

adjuster

at

the

time

non-irrigated

quality,

although

the

leaves."

(ALJ Decision, at 6.)

who inspected
of

crops

non-irrigated

Plaintiffs

his crop
looked

may

have

inspection

to

had

be

good

thinner

Day further testified that ""the

tobacco was mature, and [he] saw no evidence of wind damage or

damage due to drought."

(Id.)

Finally, Day stated that he ''had

never had an appraisal miss as much as the one he conducted of
[Plaintiffs] 2009 tobacco crop."

(Id. at 7.)

Randy Upton testified that he suspected Plaintiff was lying
about the drought claim and had shifted some of his production
from

Unit

growing

104

season

to

Unit

101.

inspection

as

He

based

well

as

this

the

belief

rough

on

Day's

equivalence

between Plaintiffs 30,000 pound over production on Unit 101 and
his 53,000 pound underproduction on Unit 104.

based

upon

the

price

ITS

paid

Plaintiff

bought in 2009, the tobacco was "trash."

Upton agreed that

for

the

tobacco

it

(ALJ Decision, at 8.)

Upton, however, "admitted that he had no idea where the tobacco

[sold to ITS] came from, or when it was grown."

(Id.)

Dr.
the

Jeffrey

weather

Underwood

conditions

in

testified
the

summer

as
of

Plaintiff's
2009.

At

expert

the

on

time

of

the hearing, Dr. Underwood was the Chair of the Department of

Geology

and

previously

Geography

the

at

Southern

Nevada

official

Georgia

State

University

and

was

Climatologist.

Dr.

Underwood testified that although April and May were quite wet,

drought conditions existed in
and July of 2009.

Emanuel County,

Georgia in

June

Dr. Underwood also noted that according to

data gathered by the National Climatic Data Center, June through
August

2009

in

Georgia

was

"'the

sixth

August" in 115 years of record keeping.
Wesley

Harris

testified

as

driest

June

through

(Transcript, at 530.)

Plaintiff's

expert

on

the

effects of the weather conditions on Plaintiff's tobacco plants.
Mr. Harris earned a degree in agricultural engineering from the
University of Georgia and at the time of the hearing had spent

27 years working for the Georgia agricultural extension service,
much of which he spent helping farmers with the growth of nearly
4,000 acres of tobacco.

Harris inspected Unit 104 in person and

testified that the soil on Unit 104

"extremely,

extremely

(Transcript, at 542.)

limited"

was very sandy and

capacity

to

hold

had an

water.

He then testified that wet weather in the

early part of the growing season can truncate a tobacco plant's

root system, potentially causing a crop failure if the tobacco
then

goes

through

a

hot,

dry

period.

Harris

testified

that

while the tobacco leaf might still look nice and green, it will

10

not ripen properly and will be worthless on the market.
offered

his

extremely

expert

opinion

challenging

year.

that

2009

There's

"would

no

way

He then

have

with

been

the

an

heavy

impact of the saturated soils right after transplanting and then
another shot right after that that we would have developed the
root system to the point that we could sustain the type of dry
hot

weather

that

{Transcript,

we

had

at

554.)

during

the

According

primary

to

growing

Harris,

the

season."

damage

to

Plaintiff's crop was complete by the time Plaintiff filed his
notice in August 2009.
Allen

Denton,

a

retired

compliance

investigator

with

the

RMA, testified for the Government about the tobacco growing and

harvesting

process.

Plaintiff's crop and

Respondent
which

planted

[the]

Mr.

of

non-irrigated
the

crop

event

testified

would

have

that

he "believed

prevented

pictures

and

taken,

the

Johnson,

John

Paul

on

tobacco

was

(ALJ Decision, at 10.)

He

that

Respondent's

the

date

only
crop

a

catastrophic

from

producing

2,000 pounds per acre, as appraised on August 12, 2009."
Dan

of

upon the date that

tobacco

was

mature and ready to be harvested."
further

inspected

testified that "based

his

picture

Denton

Johnson,

and

Bobby

(Id.)

Lane,

all

neighboring farmers, testified that they filed claims for losses
due to drought in 2009.

Finally, Burt Rocker, one of Plaintiff's neighbors, and Dr.
Ricky Lane,

Plaintiff's

brother,

11

testified

that they

witnessed

Plaintiff's stored carryover tobacco.

Mr. Rocker testified that

when he was on Plaintiff's land in early 2007, he saw tobacco
barns full

of

tobacco.

He

remembered

this

event

because

it

was

the wrong time of year to have tobacco in storage and normally
tobacco would have been sold by then.
in

2007

or

2008

he

observed

tobacco

Dr. Lane testified that
in

Plaintiff's

warehouse.

Dr. Lane also took note of this fact because he was visiting in
the

winter

months

and

tobacco

is

not

usually

stored

at

that

time.

On April 5, 2016, the ALJ issued an order finding Plaintiff
"willfully

and

intentionally

provided

false

or

inaccurate

information to the Federal Crop Insurance Corporation [("FCIC")]
or

to

[Great

policy

under

American]
the

Federal

(ALJ Decision, at 28.)
that "[t]he

with

gravamen

respect

Crop

to

an

Insurance

insurance

Act

[(the

plan

or

"Act")]."

The ALJ began her discussion by noting

of the

instant

matter

is

whether

or

not

[Plaintiff] experienced loss of his non-irrigated tobacco crop
due to drought in 2009, or whether
law."
the

(Id. at 18.)

evidence

suffer

the

The ALJ found that "the preponderance of

supports
loss

he filed a false claim of

the

that

he

conclusion

that [Plaintiff] did

reported"

(id.

at

19)

and

not
that

"[Plaintiff] failed to report carryover tobacco in 2006, 2007,
2008,

and

2009,

which

constitutes

a

serious

lapse

in

his

responsibilities under the crop insurance program" (id. at 24.).

The

ALJ

imposed

an

$11,000 fine
12

and

a

disqualified

Plaintiff

"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."
Plaintiff

appealed

{Doc. 15, at 6.)
the

ALJ's

Officer upheld the ALJ's decision.

decision.

The

Judicial

Plaintiff now seeks judicial

review from this Court.

II. STANDARD OF REVIEW

"[W]hen

a

party

seeks

review

of

agency

action

under

the

[Administrative Procedures Act ("APA")], the district judge sits

as

an

appellate

question

tribunal.

of law."

The

American

^entire

case'

Bioscience, Inc.

F.3d 1077, 1083-84 (D.C. Cir. 2001).

on
v.

review

is

a

Thompson, 269

"Accordingly, the standard

set forth in Rule 56 does not apply because of the limited role

of

a

court

in

reviewing

the

administrative

judgment is the mechanism for deciding

record.

Summary

whether as a matter of

law the agency action is supported by the administrative record
and

is

otherwise

consistent

with

the

APA

standard

of

review."

CS-360, LLC V. U.S. Dep't of Veterans Affairs, 101 F. Supp. 3d

29,

32

(D.D.C.

2015)

(citations

and

internal

quotations

omitted).

"Under the [APA], [a court] may set aside a decision of a
federal agency only if it is ^arbitrary, capricious, an abuse of
13

discretion, unconstitutional, in excess of statutory authority,

without

observance

of

procedure

as

required

unsupported by substantial evidence.'"

by

law,

or

Alma Brightleaf, Inc. v.

Federal Crop Ins. Corp., 552 F. App'x 861, 864 (11th Cir. 2013)

(quoting Mahon v. U.S. Dep't of Agriculture, 485 F.3d 1247, 1252
(11th Cir. 2007)).

''The 'arbitrary and capricious' standard is

exceedingly deferential."

Jones Total Health Care Pharmacy, LLC

V. Drug Enforcement Agency, 881 F.3d 823, 829 (11th Cir. 2018)

(quoting Defs. Of Wildlife v. U.S. Dep't of Navy, 733 F.3d 1106,
1115 (11th Cir. 2013)).

Courts "may not substitute [their] own

judgment for that of the agency so long as its conclusions are
rational

and

based

on

the

evidence

before

Miccosukee Tribe of Indians of Fla. v.

it."

Id.

(citing

United States, 566 F.3d

1257, 1264 (11th Cir. 2009)).

Courts, however, "may set aside

a

decision

as 'arbitrary

and capricious when, among other flaws, the agency has relied on
factors which Congress has not intended it to consider, entirely
failed

to

consider

an

important

aspect

of

the

problem,

[or]

offered an explanation for its decision that runs counter to the
evidence before the agency.
'"

Id. (quoting High Point, LLLP v.

Nat'1 Park Serv., 850 F.3d 1185, 1193-94 (11th Cir. 2017)).

A

decision is "unsupported by substantial evidence" when it lacks
"'such

relevant evidence

as a

reasonable

adequate to support a conclusion.'"

mind

might accept as

Alma Brightleaf, Inc., 552

F. App'x at 864 (quoting Stone and Webster Constr., Inc. v. U.S.
14

Dep^t

of

Labor^

684

F.3d

administrative
substantial

be

evidence

1127,

1133

agency's

even

if

finding

two

drawn from the evidence."

{11th

Cir.

is

inconsistent

Jones Total

2012)).

But

supported

conclusions

by
could

Health, 881 F.3d

at

829 (internal quotations and citations omitted).

III. DISCUSSION

The

question

[Plaintiff]

presented

willfully

inaccurate

by

the

ALJ

was

''[w]hether

and

information

intentionally

provided

with

respect

policy

to

a

false
or

plan

or
of

insurance to FCIC or any approved insurance provider, or failed

to comply with a requirement of FCIC."
The ALJ found in the affirmative.

(AJL Decision, at 1.)

This Court finds that part of

the ALJ's decision was arbitrary and capricious and part of its
decision was supported by substantial evidence.
A.

Applicable Law

''A . . . person that willfully and intentionally provides

any

false

insurance

or

inaccurate

provider

with

information
respect

.

to

a

.

.

to

policy

an
or

approved
plan

of

insurance" or ^'willfully and intentionally fails to comply with

a requirement of the [FCIC]" may be subject to civil fines or
disqualification from receiving monetary or nonmonetary benefits
under

federal

farm

programs.

7

U.S.C.

§

1515(h)(1)-(3).

Federal regulations further provide that "[d]isqualification and
civil fines

may

be

imposed

on
15

any

participant

or

person

who

willfully

and

inaccurate

provider

intentionally:

information

with

authorized

to

respect

(1)

FCIC

to

[p]rovides

or

a

to

any

policy

false

approved

or

under the Act either through

any

plan

or

insurance

of

insurance

action or omission to

act when there is knowledge that false or inaccurate information
is

or

will

be

provided;

requirement of FCIC."

or

(2)

Fails

to

comply

with

a

7 C.F.R. § 400.454(b) {1)-(2).

''Disqualification and civil fines may only be imposed if a
preponderance
other person
FCIC
§

has

of

the

evidence

shows

that

the

participant

or

has met the standards contained in § 400.454(b).

the

400.454(b)

burden
have

of

been

proving

met."

that

7

the

C.F.R.

standards

§

in

400.454(A)(3).

"Disqualification and civil fines may be imposed regardless of
whether FCIC or the approved insurance provider has suffered any

monetary

losses.

disqualification
material

in

However,
will

only

accordance

if
be

with

there

is

imposed
§

no

if

monetary

the

400.454(c)."

loss,

violation
7

is

C.F.R.

§

400.454(A)(4).

"Willful
inaccurate

and

intentional"

information

with the

means

"[t]o

knowledge

provide

false

or

that the information

is false or inaccurate at the time the information is provided;
the

failure

to

correct

the

false

or

inaccurate

information

when

its nature becomes known to the person who made it; or to commit

an act or omission with the knowledge that the act or omission
is not in compliance with a 'requirement of FCIC
16

at the time

the act or omission occurred. No showing of malicious intent is
necessary."

7 C.F.R. § 400.452.

''Material" is defined as "[a]

violation that causes or has the potential to cause a monetary
loss

to

the

crop

insurance

program

or

it

adversely

affects

program integrity, including but not limited to potential harm
to the program's reputation or allowing persons to be eligible
for benefits they would not otherwise be entitled."
B.

Id.

The ALJ's Decision

The

ALJ

made

three

findings.

First,

she

found

that

Plaintiff's 2009 Unit 104 tobacco crop did not suffer a loss due

to

drought.

Second,

intentionally
Third,

she

failed

found

she
to

that

found

report
the

Plaintiff and against Great
the Government.

be

arbitrary

supported
finds

by

that

and

that

Plaintiff

carryover

arbitration

American

capricious

substantial

Plaintiff

has

but

the

evidence.
not

met

his

tobacco

decision

did

This Court finds the

willfully

not

from
in

and

2006.

favor

of

preclude suit

by

ALJ's first conclusion to

second

conclusion

Additionally,
burden

of

the

to

be

Court

demonstrating

that the arbitration decision precluded suit by the Government.
1.

The ALJ's Finding that Plaintiff Suffered No Loss

The

foundation

of

the

ALJ's

suffered no loss is Day's inspection.

inspection

demonstrates

Plaintiff

17

decision

that

Plaintiff

The ALJ found that Day's

could

not

have

suffered

a

loss.

After setting this foundation,^ the ALJ found that: (1)

Plaintiff s explanation of carryover tobacco cannot be believed
because,

among

other

things.

Plaintiff

is

not

a

credible

witness; (2) Plaintiffs expert witness testimony demonstrating

the effect of the wet-dry weather pattern on the non-irrigated

crop must be discounted; arid (3) no evidence established that
the

25,000

pounds

Plaintiffs

2009

of

tobacco

crop.

sold

(ALJ

to

ITS

Decision,

did
at

not

come

21.)

The

from
ALJ

concluded by reasoning that while ''it is speculative to conclude
that some of the excess production sold from Unit 101 came from
Unit 104, . . . the evidence demonstrates that at least some of

the 25,000 pounds of the crop sold to ITS represents unreported
tobacco
some

harvested

of

the

by [Plaintiff] in

tobacco

was

trash

2009,

tobacco

acreage and some carry over tobacco."

even

from

crediting

the

that

non-irrigated

(Id. at 23.)

The overarching problem with the ALJ's finding is that it
relies

season

on

only

one

inspection.''

piece

The

of

concrete

ALJ

cites

evidence:

no

Day's

concrete

growing

evidence

^ The Court notes that while it presents the ALJ's arguments in a
chronological order, the ALJ did not craft her opinion in this
chronological way.
The Court merely re-presents the ALJ's opinion in

this manner for the sake of clarity.
Even Day's growing season inspection, however, is not entirely
persuasive.
The inspection consisted of Day measuring the number of
tobacco stalks, counting the leaves on a sample of tobacco plants, and
estimating how many leaves were in the 40 acres on Plaintiff's Unit
104. Day then used a handbook to determine how many pounds of tobacco
would result from the estimated leaf total assuming the leaves would

mature properly.
Day testified at trial that his inspection was not
related to the claim filed by Plaintiff, and that it was not an
18

indicating that a

drought did

not

occur,

no concrete evidence

that the drought, if it did occur, would not have had or did not
in fact have a deleterious effect on Plaintiff's tobacco crop,

and no concrete evidence, despite hearing testimony from the ITS
purchaser, that the tobacco
2009 crop.

sold to ITS came from

Plaintiff's

Instead the ALJ fills her opinion with explanations

of why she does not believe Plaintiff's story.

She cites the

fact that she does not find Plaintiff credible, she cannot find

any evidence establishing the source of the crop sold to ITS,
and she does not agree with Plaintiff's agricultural expert.
The second problem, which stems from the first, is that the
ALJ's opinion
the

Government

decision

works almost to switch the burden of proof from
to

Plaintiff.

consists

The

of explaining

vast

why

the

majority

ALJ

does

of

the

not

ALJ's

believe

Plaintiff's version of events, and it is filled with conclusions

rejecting Plaintiff's arguments: "[R]espondent's explanation for
carrying tobacco is not supportable" (ALJ Decision, at 20); ^^the
preponderance
version
pounds

of
of

of

the

events"
tobacco

evidence

(id.);
to

ITS

does

not

"'Plaintiff
that

he

support

undoubtedly

failed

to

[Plaintiff's]
sold

report

25,000
but

the

evidence does not establish the source of the crop" (id.); "the

entirely accurate prediction of the expected yield. According to Day,
"the actual production could be very different than [the appraisal
estimate]."
(Transcript, at 103.)
Furthermore, Day testified that
"another thing about these appraisals, you got to go by what the book
says. You know that's all you can do.
And it's nothing saying its
exact, like I told that other lawyer . . . . It's just something to
give you an idea what he's got out there." (Id. at 105.)
19

preponderance
conditions

of

the

ravaged

evidence

the

does

not

non-irrigated

support

crop"

that

(id.} ;

drought

and

"the

preponderance of the evidence does not support that all of the

unreported crop that [Plaintiff] sold in 2009 represented the at
most dozen bales that Dr. Lane observed repeatedly in the winter
months

of

largely

2007

and

devoid,

Government's

2008"

(id.

however,

of

arguments.

at

any

The

23-24).

The

explanation

ALJ

fails

decision

is

concerning

the

reference

any

to

substantive Government evidence, other than the Day inspection,
showing
Thus,

that

the

Plaintiff's

ALJ

appears

crops
to

were

have

not

ravaged

presumed

the

by

drought.

Government

was

correct and required that Plaintiff prove otherwise.
The third problem, which, like the second, also stems from
the

first,

is

speculation.

that

the

ALJ's

conclusion

is

almost

entirely

The ALJ's decision rests upon two main premises:

(1) Day's inspection proves Plaintiff suffered no loss and (2)
Plaintiff's

sale to ITS

was

healthy Unit 104 tobacco.

actually a

way to

dispose of his

While the ALJ relies on at least one

concrete piece of evidence - the Day inspection - to prove the
first

premise,

second.

least

She

some

of

she

cites

no

writes

that

the

25,000

concrete

"the

evidence

evidence

pounds

of

supporting

demonstrates

the

crop

sold

that

to

the
at

ITS

represents unreported tobacco harvested by [Plaintiff] in 2009,
even crediting that some of the tobacco was trash tobacco from
the

non-irrigated

acreage

and

some
20

carry

over

tobacco," thus

Plaintiff

"knowingly

and

intentionally

provided

false

information when he certified the production worksheet for Unit
104."

(ALJ

evidence
admits

in

Decision,

at

23.)

support of this

that "the

evidence

crop [sold to ITS]."

Additionally,

The

ALJ,

assertion.

does

not

however,

cites

no

To

the

contrary,

she

establish

the

source

the

of

(ALJ Decision, at 23 (emphasis added).)

when

asked

at

trial

whether

he

had

any

"direct evidence whatsoever that [Plaintiff] grew [the carryover
tobacco] in

2009," Upton, the

Government's chief investigator,

responded: "The only thing I have is what Mr. Day told me that

he

thought

the

tobacco

claim

was

produced 300 pounds [per acre]."

suspicious

because

he

(Transcript, at 161.)

only
Upton

further admitted that despite reviewing "all of the records that
were available" and "interview[ing] everybody [he] knew that had

anything to do with" this case, "not one witness" ever told him
that Plaintiff

grew

the tobacco

sold

to ITS in 2009.

(Id.)

Thus, a central pillar of the ALJ's opinion, that Plaintiff must

have disposed of his healthy Unit 104 tobacco by selling it to
ITS, is completely

without any supporting evidence other than

the ALJ's conclusion that she does believe Plaintiff's story.^
The ALJ further speculated when discounting the eyewitness

testimony

offered

by

Plaintiff

showing

that

he

did

have

^ Interestingly, this brings the Court right back to problem
number two: the ALJ appears to have placed the burden on the Plaintiff
to prove he didn't make a false claim rather than on the Government to
prove he did.
21

significant carryover tobacco from 2006.

The ALJ reasoned that

''[t]he amount of tobacco that [Plaintiff] has said was held over

is

questionable,

given

the

contradiction

observation that [Plaintiff's] barns

between

Mr.

Rocker's

were full of tobacco

when

he would have expected the crop to have been sold and Dr. Lane's

description

of

warehouse."

some

{ALJ

out, ''there

is

bales

Decision,

no

record

Lane's

tobacco

barns

(Doc.

11,

22.)

warehouse
tobacco

at

of

and

at

of
the

In

(Id.)

20.)

the

But

of

did

as

not

the

than

should

at

contends

this

be

the

Mr.

issue."

that

smaller

a

points

between

warehouse

the

fill

Plaintiff

difference

Plaintiff

larger

Indeed,

that

size

size

fact.

is "substantially

barns."

tobacco

the

portable
case,

the

contradiction cited by the ALJ would be no contradiction at all.
Thus, the ALJ's discounting of the eyewitness testimony on the
basis of a "contradiction" is not supported by any evidence in
the record.

Finally,

in

the

"contradiction" between
the

ALJ

writes

testimony

that

that

same

paragraph

the testimony

while

asserting

of

Rocker

and

she "accords

weight

to

[Plaintiff]

stored

some

Dr.
Dr.

tobacco

the
Lane,
Lane's

out

of

season, . . . the tobacco could easily have been the bales of

trash tobacco that [Plaintiff] testified he collects during the

growing season."
his

brief,

(ALJ Decision, at 20.)

however,

(Doc. 11, at 23.)

"this

is

As Plaintiff notes in

speculation,

pure

and

simple."

The ALJ provides no evidence that the bales
22

the eyewitnesses saw were not from the 2006 harvest.
right

to

state

that

the

origin

of

the

stored

The ALJ is
tobacco

is

uncertain, but because the Government has the burden of proof,
uncertainty must weigh in favor of Plaintiff.
a

determination

and

determine

proof.

based

on

whether

the

the

evidence

Government

The ALJ must make

the

Government

has

met

its

presents

burden

of

Because the ALJ references no evidence supporting her

assertion, the Court must conclude that this assertion is mere

speculation.

The fourth problem is that the ALJ ignores the great weight
of

evidence

suffer a

weather
none.

put

loss.

pattern
The

forth

by

demonstrating

Plaintiff offered two expert

and tobacco agronomy.

Plaintiff's

important facts.

Plaintiff

expert

First,

Dr.

The

witnesses

the

he

did

witnesses on

the

Government offered
testified

to

two

Underwood testified that in

2009

Emanuel County experienced a wet spring followed by an extremely
dry summer.

Second, Wesley Harris testified that: (1) the wet

spring would cause the tobacco plants to grow shallow roots, and
that the shallow roots would cause the plants to struggle in the

dry summer;^ (2) he had examined the soil of Unit 104 and it had

® Specifically, Harris testified that ''wet weather in the early
part of the season, a month or so after transplanting" would have
a

deleterious effect.

All of the literature that

you see on

particularly irrigation scheduling warns against that. And then
the implication is that if you saturate the soil you create
anaerobic

mass.

conditions

down

there,

which

will

truncate

the

root

And that creates at that point an imbalance, like I was
23

a very limited capacity for holding water;^ (3) while the tobacco
plants might
lack

of

have

water

looked

would

healthy because they were

have

severely

hampered

their

green, the
ability

to

mature properly;® and (4) the damage to the crops was complete by

the time Day conducted his inspection.®

talking about between the root structure and the leaf structure.

And if it is dryland tobacco and that tobacco goes into a
different stress period, either from a combination of heat and
dry weather or long term dry weather scenarios, it can create a
crop failure.
(Transcript, at 549.)
^ Harris testified that the soil on Unit 104 was consistent with

the soil in that area of Georgia.
When asked to describe the ^^water
holding features or capacities of that soil type," Harris opined:
Unfortunately since we have extremely low cation exchange
capacities in most east Georgia soils and very low organics our
water holding capacity is extremely, extremely limited.
If we
don't have pretty much regular rainfall or supplement it with
irrigation over that period of time it's extremely difficult to
be successful in producing a crop.
(Transcript, at 542.)
® Harris testified that tobacco needs "between an inch and a
quarter to an inch-and-a half [of rain] per week" to be healthy.
If
the tobacco doesn't get the needed rain:
[A] couple of things will happen.
Number one, the energy
production in the plant from the -- all the way down to the
mitochondrion on up, begins to cease to function in a strong
position.
We go into almost dormancy type thing.
And with
tobacco where you're dealing with a very turgid and heavy leaf,
once it starts to lose that capacity to continue to mature then

it

won't

get

effectively.
there,
but

to

the

point

where

it

will

actually

ripen

And then you'll have essentially a nice leaf out
it
will
be
worthless
to
the
cigar/cigarette

manufacturer.

(Transcript, at 551 (emphasis added).)
picture of the crop, Harris opined that

24

Additionally,

when

show

a

The ALJ, however, ignored Plaintiff's persuasive evidence.

While the ALJ appeared to accept Dr. Underwood's testimony that
Emanuel County experienced a wet spring followed by an extremely

dry summer, she dismissed Harris' testimony that the truncated
root

system

created

by

the

plant in the dry summer.

wet

spring

would

have

harmed

the

The ALJ reasoned that ''I accord little

weight to the opinion of agricultural expert Wesley Harris that
wet weather early in the season would have a bad effect on the

crop,

as

the

rain

fell

on

both

irrigated

and

non-irrigated

fields, and the irrigated unit produced tobacco in excess of the
production

guarantee."

(ALJ

Decision,

at

21.)

But

this

for it to be as dark green as it is, it expresses and basically
verifies my point of the type of weather conditions that he had,
allowed

for

a

reduction

in

the

root

system

as

well

as

a

reduction in the ability of the plant to grow as it should have.
And, therefore, we didn't utilize the nitrogen that he had put
on the plant early to sustain it, until it got to this point
where it kicked back in - literally kicked back into gear with
more favorable weather and that's why it's so green and the only
way we could even begin to salvage this crop, which essentially
won't happen.
(Transcript, at 557.)

^ Examining a picture of the crop during Day's growing season
inspection, and taking note of the time of year the picture was taken
as well as the time the tobacco was planted, Harris answered the
question of whether the tobacco had ''much of an opportunity . . . to
recover and develop a marketable leaf that year":
Once you get to that stage and, again, without being right on
top of it, I can't ascertain how much of that is sucker growth

and how much, you know, is actual prime leaf.
But the reality
would be once we get this late in the year we start running out
of daylight hours to be able to effectively ripen the tobacco.
(Transcript, at 558.)

25

conclusion

misunderstands

the

critical

irrigated and non-irrigated crops.
to

water.

Non-irrigated

crops

distinction

between

Irrigated crops have access

do

not.

Thus,

although

the

irrigated and non-irrigated crops both experienced a wet spring,
the irrigated crops were better able to withstand the ensuing
dry summer because they had artificial access to water while the
non-irrigated crops suffered because they were completely at the

mercy of the weather.
is

troubling, both

The ALJ's dismissal of Harris' testimony

because

it

wrongly

dismisses

persuasive

evidence that Plaintiff's crops did suffer a loss due to drought
and

because

it

demonstrates

a

fundamental

misunderstanding

of

the science surrounding crop growth — science that is vital to

assessing the Government's complaint against Plaintiff.^®

Indeed, Plaintiff's tobacco expert explained this principle in
detail at trial:

Drought is a problem, obviously, to any plant.
But it is
exacerbated significantly when you have high temperatures to go
along with it.
If any of us recall the week or two of weather
we have had you certainly can relate to that very effectively.
In this particular case not only did we have a relatively
prolonged period of in excess of 30 days with less than two
inches of rain we also had significantly high temperatures in
there not only from the maximum side of it, but also from the
minimum side. If we maintain nighttime temperatures as a low in
the 75, 74, 76 degree range the plant literally does not respire
at night.
If it doesn't respire at night it can't go back into
an energy state again.
That would indicate to me those two scenarios right there,
that the opportunity to produce a good quality tobacco crop
would be almost impossible. And that's why we are, you know, we
like to see the capacity to irrigate because we could have gone
in there even with a truncated and minimal root system we could
have augmented the — not only the moisture capability, but also
reduced some of the temperature at that particular point during
that critical stage.
26

The fifth problem is that the ALJ's opinion is inconsistent

and based on distortions of the record.
most

visible,

characterization

distortion

of

that

Plaintiff

during

their

[October

before

me,

2012]

Plaintiff's

record

testimony.

^'admittedly

[Plaintiff]

Upton."

the

Plaintiff's

states

Mr.

of

The first, and perhaps

lied

ALJ

that

he

by

the

was

ALJ,

ALJ's

wrongly

Investigator

interview" and "[a]t

admitted

cited

the

The

to

(ALJ Decision, at 19, 22.)
testimony

is

not

the

Upton

hearing

truthful

with

The full context of
however,

demonstrates

that Plaintiff never admitted that he "lied" to Upton:
Plaintiff:

Everything in that [October 2012] interview
and in here nothing was accurate.
I was
trying to remember.
Everything that I told
him

was

the

best

that

I

could

remember

at

the time.
Maybe some - some of it may be
accurate and some of it not, you know, I'm
setting there trying to remember.
We have
picked out trash before, but we would sell
it at the end of the year with the crop.
And if you'11 look —

Prosecutor:

So you are admitting you did that to have
trash tobacco in 2009 that you sold in
2009?

Roundtree:

Objection.

That's not accurate. That's not

what the man said at all.

Prosecutor:
Court:

What were you saying?
No. Mr. Lane is saying that he didn't tell
the truth here. . .

(Transcript,

at

387-88

(emphasis

added).)

Plaintiff

clearly

stated that "
[e]verything I told him was the best that I could

(Transcript, at 555 (emphasis added).)
27

remember at that time."

lied.

Thus,

not

(Id.)

only

Plaintiff did not admit that he

did

the

ALJ

wrongly

characterize

Plaintiff's testimony, the ALJ wrongly characterized Plaintiff's

testimony

on

one

of

the

most

critical,

and

hotly

contested,

issues in the entire case.

The

Rex

ALJ

Denton

also

as

distorted

a ''tobacco

the

record

expert."

when

When

she

characterized

discussing

why

she

discounted Plaintiff's testimony, the ALJ wrote that "[t]obacco

expert Rex Denton testified that 21 days without rain after the
crop was appraised on August 12, 2009, would

have

effect on the crop."

Denton, however,

was

never

identified,

(Doc. 11, at 17.)

(ALJ Decision, at 21.)
proffered,

nor

qualified

as

had little

an

expert.

Indeed, the transcript shows that even the

ALJ agreed Denton was not a tobacco expert:
Roundtree:

Your Honor, if the
asked

to

comment

witness is

on

the

about to be

tobacco

that's

in

this picture, I want to lodge an objection.
First that the witness' expertise in this
tobacco

has

not

been

established

and,

therefore, there's no foundation with that.
And, second, this witness has not been
identified as an expert in tobacco. He was
identified as a — Mr. Denton is expected

to testify as to his participation in the
tape recorded interview of [Plaintiff] on
October 31st, 2012. And I would suggest
that it's inappropriate for this witness'
testimony to exceed that description.

Court:

Well, I hear what you're saying. I sustain
your
objection
on
the
first
grounds.
Despite the fact that Mr. Denton has been - his testimony now already has gone far
afield from what has been intimated, I have

28

numerous questions to ask somebody about
the Risk Management Agency's expectations
of filing claims, and tobacco claims and I
believe

that

Mr.

Denton

would

be

the

appropriate person to answer those. So as
for asking Mr. Denton questions about a
photograph, I really think that it's not
very
probative
unless
you're
going
to
establish that he actually saw the crop. I
mean

—

Simpson

No, we are not going to establish that he
was there and saw the crop. But he has
extensive experience in tobacco. He has
been a tobacco farmer for years.

Court

Right. I don't think you have to be an
expert, Mr. Roundtree, to give your opinion
about whether a crop looks good or not. But
I think — I guess what I'm saying to you
it has limited probative value in this
instance because it's a photograph. I mean,
you -- I think you'd have to ask a whole
lot
of
questions
to
establish
that
a
photograph is as good -- will give a
witness as good an opportunity to make an
opinion about the quality of the crop. So
you can try to do that.
I don't think we need him to be qualified
as an expert to ask questions about his
opinion of farming or tobacco or routines
involving tobacco. I believe Mr. Denton has

established he's familiar enough with it.
We are not asking an opinion about anything
that I think is even probative to the
issue. But I do think you have to make some
— lay some foundation, Mr. Simpson, about
whether or not any photograph, with any
crop is enough to give someone the basis to
say whether the crop is good, bad, routine,
usual, unusual.

Simpson

Well, I guess I'm not sure why this picture
would not be enough for somebody who knows
tobacco, knows the planting date, knows the

29

Court:

Well, I said you're going to have to
establish that with foundational questions.

{Transcript, at 241-43 (emphasis added).)
Finally, the ALJ again distorted the record to support her
conclusion that

Plaintiff's] explanation for carrying over

tobacco is not supportable."

(ALJ Decision, at 20.)

The ALJ

states that:

[Plaintiff]
maintained
that
tobacco
would
deteriorate
every year that it is stored, or at least turn darker,
which

was

the

reason

he

could

not

sell

it

in

the

first

place.
Mr. Boyett agreed that tobacco carried over for
years would be worthless.
Despite the risk of further
reducing
its
value.
Respondent
purportedly
kept
the
tobacco in question for three years.
(Id.)
did

The ALJ's reasoning commits two errors.

not "agree[] that tobacco carried over for

worthless."

(ALJ Decision, at 20.)

First, Boyett
years

would

be

What Boyett actually said

was "I don't think you could keep trash tobacco for three years.

It'd be bad enough as it was, but at the end of three years you

would not have anything to amount to anything."
226 (emphasis added).)

(Transcript, at

Second, although it is technically true

that Plaintiff did not sell the tobacco because it was too dark,

the

ALJ's

Plaintiff

characterization
testified

that

does

not

purchasers

tell
will

desiring darker or lighter color tobacco.

whether
lighter

the

full

oscillate

story.
between

When Plaintiff tried

This fact was also supported by Boyett's testimony. When asked
tobacco companies sometime prefer a darker and sometimes a
tobacco, Boyett testified that the tobacco companies "buy
30

to sell his 2006 tobacco, the purchasers would not pay him what
he

thought

tobacco.

it

was

Because

worth

because

they

wanted

a

lighter

he thought the tobacco was high

color

quality, he

decided to hold it over and try to sell it the next year for a

better price in
demand.

hopes that darker tobacco

would

be in

higher

By 2009, Plaintiff realized that he was not going to be

able to recoup his losses.

Thus, he determined that '"a little

bit [of cash] is better than nothing," and he sold his tobacco
on the cheap.
In

sum,

(Transcript, at 365.)
the

Court

finds

that

the

ALJ's

decision

with

regards to Plaintiff s reported crop failure was "arbitrary and
capricious," because

the

ALJ's

decision

was

not supported

by

substantial evidence and the ALJ "offered an explanation for its
decision that [ran] counter to the evidence before the agency."

Jones Total Health, 881 F.3d at 829.

on

Day's

inspection

than

it

was

The ALJ placed more weight

meant

to

bear,

repeatedly

misconstrued the record, and unreasonably discounted Plaintiff's

substantial
that

the

because

expert

ALJ's
it

Government.

testimony.

opinion

fails

to

Additionally,

constitutes

place

the

an

burden

the

abuse
of

Court

of

proof

finds

discretion
upon

the

Thus, the Court VACATES the ALJ's decision finding

that Plaintiff did not suffer a loss on his Unit 104 tobacco.

according to the customer's demands' and would at times "discriminate
against the darker tobacco." (Transcript, at 230.)
31

2.

The
ALJ's
Finding
that
Plaintiff
Willfully
and
Intentionally Failed to Report His Carryover Tobacco

The ALJ found that "[i]n addition to failing to accurately
report

the

source

of

tobacco

that

[Plaintiff]

sold

in

2009,

[Plaintiff] failed to report carry-over tobacco in 2006, 2007,
2008,

and

2009,

which

responsibilities

under

Decision, at 24.)

constitutes
the

crop

a

serious

insurance

lapse

in

his

program."

{ALJ

The ALJ reasoned Plaintiff's excuse that he

did not know he needed to report his carryover tobacco was not

enough,

because "ignorance

of

reporting

requirements

does

not

excuse him from failing to comply with FCIC's guaranteed tobacco

crop

provisions."

Plaintiff s

(Id.)

"assertion

Additionally,

that

he

believed

the
he

ALJ
did

noted
not

that

have

to

report production over his guarantee is at odds with his report
of excess production from Unit 101 in 2009."

Plaintiff
willfully

argues

and

that

"there

intentionally

requirement of FCIC."

is

no

failed

(Id.)

evidence

that

[he]

comply

with

any

to

Plaintiff further argues that the Acreage

Reporting Form provided by Great American support his position
because it contains no place to report carryover tobacco.
11,
also

at
no

24.)

Additionally,

evidence

that

Plaintiff

[his]

contends

omission

affected [his insurance policy]."

(Id.)

would

(Doc.

that "there

have

in

any

is
way

He buoys this position

by asserting "the current policy does not even require carryover
tobacco to be included on the acreage report."

32

(Id.)

The Court finds that the ALJ did not err in finding that

Plaintiff willfully and intentionally failed to report his 2006
carryover

tobacco.

carryover

tobacco

The
and

states

included in the insured
could

have

made

a

Guaranteed
that

acreage

finding

on

Tobacco

Provisions

carryover

report.

whether

tobacco

defines
must

Furthermore, the

be
ALJ

Plaintiff "intentionally

and willfully" refused to report the carryover tobacco based on

the credibility of Plaintiff's testimony combined with the other

testimony offered at trial.
was

Thus, the Court concludes that the

ALJ's

decision

"rational

and

based

on

the

evidence

before

it."

Jones Total Health, 881 F.3d 823, 829 (11th Cir. 2018).

C. Issue Preclusion

Plaintiff's final argument is that the federally mandated
arbitration between himself and Great American precludes suit by

the Government.

According to Plaintiff, he "has been forced by

the Government to re-litigate the identical issues in this case
twice and this action is barred by issue preclusion."
at

24.)

arbitration

Plaintiff
"[d]ue

to

argues
its

that
high

the
level

(Doc. 11,

RMA

controlled

the

of

involvement

and

direction at every single level," and that "[Great American] had
the identical interest as the Government at Arbitration."

(Id.

at 25.)

"A court may give preclusive effect to a matter in dispute

only when (1) that issue is identical to an issue decided in an
earlier proceeding; (2) the issue was actually litigated on the
33

merits; (3) the
meaning the
critical

issue

was decided

in

the

earlier

proceeding,

prior determination of the issue must have

and

necessary

part

of

the

judgment

in

that

been a
earlier

decision; and (4) the burden of proof in the earlier proceeding
is at least as stringent as the burden of proof in the current
proceeding."
2008)

Bates v. Harvey, 518 F.3d 1233, 1240-41 (11th Cir.

(quotations

and

internal

[C]ollateral estoppel can apply only

citations

omitted).

^when the parties are the

same (or in privity) [and] if the party against whom the issue
was

decided

had

a

full

and

fair

opportunity

to

litigate

the

issue in the earlier proceeding.
'" EEOC v. Pemco Aeroplex, Inc.,

383 F.3d 1280, 1285 (11th Cir. 2004) (quoting

In

re Southeast

Banking Corp., 69 F.3d 1539, 1552 (11th Cir.1995)).

""The party

seeking

burden

to

invoke

collateral

estoppel

bears

the

proving that the necessary elements have been satisfied."

of

In re

McHorter, 887 F.2d 1564, 1566 (11th Cir. 1989).
The

proof

Court

that

finds

issue

that

Plaintiff

preclusion

has

not

applies.

met

his

burden

Plaintiff

has

of

not

identified the elements needed for issue preclusion and he has
not explained why each element is met.

Furthermore, although he

claims that "due to its high level of involvement and direction
at

every

single

level,

Arbitration

for

provides

additional

no

purposes

[the
of

Government]
issue

supporting

that the Government was in privity
34

controlled

preclusion,"

facts
with

or

the

Plaintiff

reasoning

showing

Great American during

arbitration^^.

(Doc. 11, at 25.)

Thus, Plaintiff has failed to

establish that the Government was in privity with Great American
for

purposes of issue

preclusion, and, for this

his argument must fail.

reason

alone,

Pemco Aeroplex, Inc., 383 F.3d at 1285

(''If identity or privity of parties cannot be established, then
there

is

whether

no

need

res

Accordingly,

to

examine

judicata

the

or

the

other

factors in

determining

estoppel

applies.").

collateral

Court AFFIPMS

the

ALJ's

decision

that

issue

preclusion did not bar the Government from pursing the present
action.

III. CONCLUSION

The Court DENIES IN PART and GRANTS IN PART the parties'

cross motions for summary judgment.

(Docs. 9, 15.)

The Court

finds that the ALJ's decision regarding Plaintiff's 2009 crop
insurance

claim was arbitrary and capricious, thus it VACATES

that portion of the ALJ's decision.
ALJ's

decision

carryover

regarding

tobacco

was

not

Plaintiff's

arbitrary

The Court finds that the
failure

and

AFFIRMS that portion of the ALJ's decision.

to

report

capricious, thus

his

it

Finally, the Court

AFFIRMS the ALJ's finding that issue preclusion does not apply.

The Court acknowledges that Plaintiff did reference his motion
and brief filed before the ALJ as providing further argumentation.
The Court, however, will not consider any arguments incorporated by
reference because such arguments are nothing more than attempts to
exceed the page limits set forth in this Court's local rules. See FNB
Bank v. Park Nat. Corp, No. 13-0064-WS-C, 2013 WL 6842778, *1 n.l
(S.D. Ala. Dec. 27, 2017).
35

The Court, however, notes that its split finding might have
implications for the sanctions that may be imposed by the ALJ in
this

case.

See

7

C.F.R.

section

400.454(a)(4)

(""Disqualification and civil fines may be imposed regardless of
whether FCIC or the approved insurance provider has suffered any
monetary

loss.

However,

disqualification

will

if

only

there

is

be

imposed

no

if

monetary

the

violation

material in accordance with section 400.454(c).").
the

Court

REMANDS

this

case

back

to

the

loss,
is

Accordingly,

ALJ for

purposes

of

determining the appropriate sanctions in light of this Court's
ruling.

See

Black

Warrior

Riverkeeper, Inc.

v.

United

States

Army Corps of Engineers, 781 F.3d 1271, 1290-91 (11th Cir. 2015)

(finding

that

"'remedy

of

remand

without

vacatur

reviewing court's equity powers under the APA").
injunction

pursuant

to

5

U.S.C.

§

705

SHALL

is

within

a

This Court's

REMAIN

IN

PLACE

until the ALJ determines the appropriate sanctions on remand.
ORDER

ENTERED

at

Augusta,

Georgia,

this

September, 2018.

CHIEF JUDGE

UNITED^TATES DISTRICT COURT
~SUUTH^RN DISTRICT OF GEORGIA

36

day

of