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Sunrise Cooperative, Inc. v. United States Department of Agriculture

United States Court of Appeals, Sixth Circuit

June 4, 2018

Sunrise Cooperative, Inc., an Ohio cooperative association, Plaintiff-Appellant,
v.
United States Department of Agriculture; Risk Management Agency, an agency of the United States Department of Agriculture; Federal Crop Insurance Corporation, an agency and body corporate of the United States Department of Agriculture, Defendants-Appellees.

          Argued: March 6, 2018

          Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 3:16-cv-01297-James G. Carr, District Judge.

         ARGUED:

          David C. Barrett, Jr., BARRETT, EASTERDAY, CUNNINGHAM & ESELGROTH, LLP, Dublin, Ohio, for Appellant.

          Jody L. King, UNITED STATES ATTORNEY'S OFFICE, Toledo, Ohio, for Appellees.

         ON BRIEF:

          David C. Barrett, Jr., Troy A. Callicoat, Amanda Stacy Hartman, BARRETT, EASTERDAY, CUNNINGHAM & ESELGROTH, LLP, Dublin, Ohio, for Appellant.

          Jody L. King, UNITED STATES ATTORNEY'S OFFICE, Toledo, Ohio, for Appellees.

          Before: COLE, Chief Judge; WHITE and BUSH, Circuit Judges.

          OPINION

          COLE, Chief Judge.

         When Congress speaks clearly, administrative agencies must listen. Congress spoke clearly in the 2008 Farm Bill when it said "an entity that was approved" to provide rebates to its members may continue to do so "in a manner consistent with the payment plan approved." But an agency, under the guise of interpretation, nevertheless imposed additional eligibility requirements on approved entities that are unmoored from the statute. We hold that the agency's interpretation is foreclosed by the statute and reverse the judgment below.

         I. BACKGROUND

         Sunrise is an Ohio agricultural cooperative with members in Ohio, Michigan, and, more recently, Indiana. Sunrise also owns one-third of Lund and Smith Insurance Services, a company that sells crop insurance. In exchange for its members' buying insurance from Lund and Smith, Sunrise pays "patronage" to those members based on how much crop insurance they buy. A patronage payment is, in essence, a rebate tethered to the amount of insurance purchased. Sunrise is authorized to pay patronage only in Ohio and Michigan and pays patronage to its members only in those states.

         These types of payments fall within the ambit of three federal agencies. The Risk Management Agency ("RMA") is an agency within the United States Department of Agriculture ("USDA") that is tasked with administering the programs of the Federal Crop Insurance Corporation ("FCIC").

         Patronage payments were prohibited until 2000, when Congress authorized some rebating if permitted under state law. But this authorization was short-lived. Congress changed course in 2008 and prohibited patronage payments (again) with three exceptions. One of those exceptions is a grandfather clause that allows entities that were already approved to pay patronage to continue to make those payments. 7 U.S.C. ...


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