United States District Court, D. Colorado
GLENN AUSMUS, RUSSELL L. AUSMUS, DWAYNE FRITZLER, SHIRLEY FRITZLER, BLAKE GOURLEY, FARA GOURLEY, DEAN JAGERS, and JEFF SELF, Plaintiffs,
SONNY PERDUE, [*] Secretary of the United States Department of Agriculture, STEVEN C. SILVERMAN, Director, National Appeals Division, and HEATHER MANZANO, [**] Acting Administrator of the Risk Management Agency and Manager of the Federal Crop Insurance Corporation, Defendants.
ORDER REVERSING AND REMANDING USDA'S
BROOKE JACKSON JUDGE
to 7 U.S.C. § 6999, 7 C.F.R. § 11.13, and Chapter 7
of Title 5 of the United States Code, Plaintiffs seek
judicial review of a final decision of the National Appeals
Division (“NAD”), a division of the United States
Department of Agriculture. ECF No. 1 at 3. After considering
the arguments, applicable law, and administrative record, the
Court reverses the final decision of NAD for the reasons
factual background is not disputed. Plaintiffs are farmers
who produce winter wheat in Baca County, Colorado. ECF No. 1
at ¶¶ 1-8. They seek judicial review of an adverse
decision of the Risk Management Agency, which was
subsequently affirmed by NAD. The sole issue in this case is
one of statutory interpretation. The Court must determine
whether NAD properly determined that the Actual Production
History (“APH”) Yield Exclusion set out in 7
U.S.C. § 1508(g)(4)(C) was not immediately available to
Plaintiffs upon the passage of the Agricultural Act of 2014
(“Farm Bill”),  but was instead subject to the
Risk Management Agency's discretion as to the timing of
implementation of that amendment.
11009 of the Farm Bill amended subparagraph 1508(g)(4)(C) of
the Federal Crop Insurance Act (“FCIA”). ECF No.
36 at ¶ 3. This amended section is commonly known as the
APH Yield Exclusion. Id. The APH Yield Exclusion was
added to the FCIA to give crop producers the opportunity to
exclude uncharacteristically bad crop years from the
agency's calculation of how much crop insurance coverage
they are entitled to. Id. at ¶¶ 3-4.
Plaintiffs sought to invoke the APH Yield Exclusion in time
for their 2015 winter wheat crop, but the agency denied their
request. Id. at ¶¶ 6-10. Plaintiffs
challenge this decision as a wrongful denial of a benefit to
which they are entitled under the FCIA. Id.
Defendants argue that the agency had not yet fully
implemented the APH Yield Exclusion provision, so the denial
of Plaintiffs' request to invoke the APH Yield Exclusion
was not a denial of any actualized right under the FCIA. ECF
this Court assesses the merits of these arguments at greater
length, some background in the relevant statutes is
Federal Crop Insurance Act. 
enacted the FCIA in 1938 to provide crop insurance to farmers
because private insurance companies “deemed all-risk
crop insurance too great a commercial hazard.”
Stewart v. Fed. Crop Ins. Corp., No. 4:09-CV-101,
2010 WL 3341863, at *1 (E.D. Tenn. Aug. 25, 2010) (citing
Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 383
(1947)). In 1980, Congress amended the FCIA to require the
Federal Crop Insurance Corporation
(“Corporation”) generally to reinsure policies
issued by private insurance companies rather than to issue
direct policies. Id.
common form of crop insurance is called an APH-based policy.
A.R. at 971-1019. These policies base their premium,
insurance guaranty, and indemnity on a crop producer's
average historical yields (APH). Id. The APH is the
simple average of the producer's actual yields derived
from four to ten years' worth of yield data. See
7 C.F.R. § 400.55(b). The goal of an APH-based policy is
to protect a producer against the effect of yield losses
resulting from natural causes (e.g., drought) by using that
producer's actual production history as a baseline.
Farm Bill amended FCIA § 1508(g)(4) by adding a new
subparagraph (C)-the APH Yield Exclusion. The intended
effect of the APH Yield Exclusion is to address the
disproportionate deflation of a producer's historical
yields resulting from crop years where there were
catastrophic droughts or other widespread causes of loss.
A.R. at 458. Such crop years result in artificially low
insurance guarantees and indemnities. Id. By
excluding unusually bad years, crop producers no longer have
to worry that a natural disaster will reduce their insurance
coverage for years to come. Id.
language establishing the APH Yield Exclusion reads:
(4) Adjustment in actual production history to
establish insurable yields.
Application. This paragraph shall apply
whenever the corporation uses the actual production records
of the producer to establish the producer's actual
production history for an agricultural commodity for any of
the 2001 and subsequent crop years.
. . .
Election To Exclude Certain History.
(i) In General. Notwithstanding
paragraph (2), with respect to 1 or more of the crop years
used to establish the actual production history of an
agricultural commodity of the producer, the producer may
elect to exclude any recorded or appraised yield for any crop
year in which the per planted acre yield of the agricultural
commodity in the county of the producer was at least 50
percent below the simple average of the per planted acre
yield of the agricultural commodity in the county during the
previous 10 consecutive crop years.
(ii) Contiguous Counties. In any crop year
that a producer in a county is eligible to make an election
to exclude a yield under clause (i), a producer in a
contiguous county is eligible to make such an election.
7 U.S.C. § 1508(g)(4)(A, C).