United States Court of Federal Claims
No. 15-915
Filed: November 29, 2016
______________________________________
)
LION FARMS, LLC, )
)
Plaintiff, )
)
v. )
)
THE UNITED STATES, )
)
Defendant. )
______________________________________
James A. Moody, James A. Moody Law Office, Washington, DC, attorney for plaintiff.
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 motion to dismiss. Plaintiff, Lion
Farms, LLC, seeks 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”). Plaintiff argues that it was never compensated for the Raisin
Administrative Committee’s (“Committee”) taking of his reserve raisins throughout 2006-2010.
Defendant alleges that plaintiff’s claims for the 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).
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). 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.
Plaintiff alleges that, in each of the 2006-07, 2007-08, 2008-09, and 2009-10 crop years,
plaintiff’s “final grower equity,” or the amount Lion Farms was to be paid, was $0. Complaint
(hereinafter “Compl.”) at 5-6. Plaintiff further alleges that the reserve pool raisins were taken
without just compensation. Id. Defendant argues that the Court does not have jurisdiction over
the 2006-07, 2007-08, and 2008-09 crop years, as each of those claims accrued more than six
years prior to the August 26, 2015 date on which Lion Farms filed this claim, and are thus barred
by the statute of limitations. Defendant’s Motion to Dismiss (hereinafter “MTD”) at 8.
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
-2-
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 plaintiff’s takings claims for the 2006-07,
2007-08, and 2008-09 crop years are barred by the statute of limitations. MTD at 9. In making
this argument defendant points out that the takings claims ripened in mid-October of each crop
year and argues that plaintiff 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. Essentially,
defendant argues that plaintiff’s earliest potential claim not barred by the statute of limitations
would be for the 2009-10 year, as plaintiff filed this claim on August 26, 2015. This Court does
not agree.
In its response to defendant’s motion to dismiss, the plaintiff mentions the accrual
suspension rule. P’s Response to MTD (hereinafter “P’s Resp.”) at 1. Plaintiff alleges that
“[r]easonable uncertainty regarding either element, whether property was taken, [sic] and the
amount of compensation to be paid, defeats claim accrual.” Id. at 3. Plaintiff then expounds on
this by stating that “[t]he ‘taking’ remains uncertain as a matter of both fact and law until USDA
issued a the final rule…[and] the amount of compensation remains uncertain until the pool
closing…so the ‘clock’ does not begin to run until the amount of that compensation is revealed
to be less than the ‘just’ amount.” Id. This analysis is incorrect. Under the Fifth Amendment, a
-3-
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
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). Plaintiff lost the use of its property when the raisins
were designated to the reserve pool, typically in mid-October of each of the 2006-07, 2007-08,
2008-09, and 2009-10 crop years.
Additionally, plaintiff has applied the accrual suspension rule in a novel and incorrect
way. Typically, 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, 90 Fed. Cl. at
61 (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 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.
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
plaintiff and its attorney 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 plaintiff from making a takings claim. It was not until
the decision in Horne that plaintiff’s claims were legally defensible. It would be unreasonable to
expect the plaintiff to file a takings claim that it reasonably believed was barred by Evans
precedent. As such, we must deny defendant’s partial motion to dismiss the claims during the
2007-08, 2008-09, and 2009-10 crop years.
-4-
III. Conclusion
For the reasons set forth above, defendant’s partial MOTION to dismiss or in the
alternative for summary judgment is DENIED. 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
-5-