NOT RECOMMENDED FOR PUBLICATION
File Name: 23a0001n.06
Case No. 22-1209
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
) Jan 03, 2023
EDGAR MILLER,
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellant, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR
UNITED STATES DEPARTMENT OF ) THE WESTERN DISTRICT OF
AGRICULTURE; RISK MANAGEMENT ) MICHIGAN
AGENCY; FEDERAL CROP INSURANCE )
CORPORATION, ) OPINION
Defendants-Appellees. )
)
Before: SUTTON, Chief Judge; SUHRHEINRICH and NALBANDIAN, Circuit Judges.
SUTTON, Chief Judge. For years Edgar Miller purchased crop insurance, hoping to
protect his farm from poor harvests. While the insurance for the most part served that purpose, it
also brought him three federal lawsuits, an arbitration, and an adverse agency determination from
the Federal Crop Insurance Corporation. Today Miller challenges this last decision—the agency’s
decision—under the Administrative Procedure Act. The district court rejected the challenge.
We do too.
I.
“[T]he only possible guarantee of the future is responsible behavior in the present.”
Wendell Berry, The Unsettling of America: Culture & Agriculture 58 (3d ed. 1996). The point
has many components, and most farmers appreciate all of them. One of them is the imperative
each year to risk the “up-front costs” of sowing in return for the never-guaranteed prospect of
Case No. 22-1209, Miller v. U.S. Dep’t of Agric. et al.
“back-end revenue” from reaping. Helena Agri-Enters., LLC v. Great Lakes Grain, LLC, 988 F.3d
260, 266 (6th Cir. 2021). The Federal Crop Insurance Act helps farmers to manage these
uncertainties through a crop insurance system, which the Federal Crop Insurance Corporation
oversees. 7 U.S.C. §§ 1502(a), 1503. Under this federal program, farmers can purchase insurance
from the Insurance Corporation or from an approved insurance provider that the Insurance
Corporation reinsures. Id. §§ 1502(b)(2), 1508(a)(1).
In either case, the Common Crop Insurance Policy, promulgated under the Act, governs.
7 C.F.R. § 457.8. The Crop Insurance Policy requires compliance with the Act, attendant
regulations, and the Insurance Corporation’s procedures. Id. It sets out the particulars of the
insurance coverage and the claims process. See id. § 457.8(3), (14). Certain provisions address
the readjustment and repayment of settled claims. Section 21(b)(3), for instance, allows for
repayment of overpaid claims if a farmer “knowingly misreported” yield information. Id.
§ 457.8(21)(b)(3). And § 21(f) contemplates repayment if a farmer fails “to maintain or provide”
certain records. Id. § 457.8(21)(f), (g).
The Policy also requires the arbitration of disputed claims. See id. § 457.8(20)(a)(1). But
if a dispute involves policy interpretation, rather than mere application, the parties must turn to the
Insurance Corporation for a final agency determination interpreting the Policy. Id. Parties must
submit a request that “[i]dentif[ies] and quote[s] the specific provision” at issue. Id.
§ 400.767(a)(3). From there, the Insurance Corporation issues a generally applicable interpretation
that binds all program participants. Id. §§ 400.766(b)(2), 400.768(e). Because these decisions
must be generally applicable, any requests for interpretation must not turn on or even invoke
“specific facts” or “alleged conduct.” Id. § 400.767(a)(8).
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Edgar Miller, a corn and soybean farmer, has experienced this “large regulatory regime”
firsthand. Helena Agri-Enters., 988 F.3d at 267. He purchased crop insurance from an approved
insurance provider, Farmers Mutual Hail Insurance Company of Iowa. After poor harvests in
2012, 2013, and 2014, Miller filed claims. He received payouts for 2012 and 2013. But Farmers
Mutual declined his claim for 2014. Making matters worse for Miller, Farmers Mutual realized it
had overpaid Miller for 2012 and 2013 due to his poor recordkeeping. It demanded repayment.
When Miller refused, the parties went to arbitration.
Farmers Mutual secured a favorable arbitral award and filed a petition to confirm it. But
the district court nullified the award after finding that the arbitrator had stepped out of line and
interpreted the Policy in deciding that Farmers Mutual could readjust past claims and require
repayment from Miller. Farmers Mut. Hail Ins. Co. of Iowa v. Miller, 366 F. Supp. 3d 974, 978
(W.D. Mich. 2018); see 7 C.F.R. § 457.8(20)(a)(1).
The parties returned to the Insurance Corporation. It issued “Final Agency Determination
287,” a title that brings with it the virtue of making everyday speech sound like poetry. The ruling
explained that multiple policy provisions require farmers to repay overpaid claims, and that
insurers have a duty to correct errors in claims. Final Agency Determination FAD-287 (Oct. 16,
2019), https://tinyurl.com/hyb4rzep. With Final Agency Determination 287 in its hand, if not its
ear, Farmers Mutual filed another petition to confirm the arbitral award. This time, the district
court granted it, and we affirmed. Farmers Mut. Hail Ins. Co. of Iowa v. Miller, No. 20-1978,
2021 WL 3044275, at *1, *4 (6th Cir. July 20, 2021).
Having reached the end of the road on the arbitral award proceedings, Miller challenged
one premise of that ruling—Final Agency Determination 287—under the Administrative
Procedure Act. The district court rejected the challenge. This appeal followed.
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II.
All that’s before us today is whether Final Agency Determination 287 complies with the
Administrative Procedure Act. Only if the ruling is arbitrary and capricious may we set it aside
under the Act. 5 U.S.C. § 706(2)(A). This “standard requires that agency action be reasonable
and reasonably explained.” FCC v. Prometheus Radio Project, 141 S. Ct. 1150, 1158 (2021).
Determination 287, for short, meets this modest standard. What did the parties ask the
agency to decide? Farmers Mutual wanted to know if § 21(b)(3) of the Crop Insurance Policy—
which requires repayment if a farmer “knowingly misreported any information related to any
yield”—sets out “the only circumstances” for recovering overpaid claims. R.12 at 2, 6. Miller, in
turn, asked whether an insurer could readjust claims outside of either § 21(b)(3) or “a failure to
provide and to retain records” under § 21(f). Id. at 53. The Insurance Corporation answered “no”
to the former question and “yes” to the latter. Final Agency Determination FAD-287, supra. It
added that insurers must “audit and correct any claim that was not adjusted according to [the
Insurance Corporation’s] loss adjustment procedures.” Id. Put differently, the Insurance
Corporation found that (1) multiple policy provisions require farmers to repay overpaid claims and
(2) insurers have a duty to correct such errors.
The text of the Crop Insurance Policy and the regulatory framework support both
conclusions.
Begin with the Policy’s text. It obligates a farmer to “repay any overpaid amounts,” e.g.,
7 C.F.R. § 457.8(21)(g), in a variety of circumstances. Included among them are: “misreport[ing]
any material information,” id. § 457.8(3)(g)(4); having an incorrect approved yield, id.; failing to
provide “verifiable records to support [a] yield in the database,” id. § 457.8(3)(h)(1); failing to set
out a “valid” agronomic basis for an approved yield, id.; changing “production method[s],” id.
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§ 457.8(3)(h)(3); “incorrectly report[ing] any information on the acreage report,” id. § 457.8(6)(h);
having a harvested production that “exceeds the appraised production,” id. § 457.8(15)(b)(2);
“knowingly misreport[ing]” yield information, id. § 457.8(21)(b)(3); failing to “maintain” records,
id. § 457.8(21)(f); and failing to “provide records,” id.
The Policy’s text also requires the correction of errors. The Crop Insurance Policy tells
insurers to comply with the Insurance Corporation’s loss adjustment procedures, id. § 457.8(14)(i),
and obligates farmers to retain and provide records upon the insurer’s “request,” id. § 457.8(21)(b).
These obligations bolster Determination 287’s finding of a duty to audit and correct claims.
The crop insurance system’s broader regulatory framework supports these conclusions as
well. The Crop Insurance Policy requires insurers to comply with the Insurance Corporation’s
procedures, including its “handbooks, manuals, memoranda[,] and bulletins.” Id. § 457.8. And
the regulatory scheme binds all program participants. See Fed. Crop Ins. Corp. v. Merrill, 332
U.S. 380, 384–85 (1947).
The Insurance Corporation’s procedures convey a similar set of obligations to the Policy.
The Loss Adjustment Manual outlines extensive processes that insurers must follow in adjusting
claims, including corrected claims. Loss Adjustment Manual Standards Handbook: 2018 and
Succeeding Crop Years 313 (Jan. 2018), https://tinyurl.com/yktejunc. The bulletins and
informational memoranda subject insurers to periodic compliance reviews, Informational
Memorandum COM-17-004 (Aug. 7, 2017), https://tinyurl.com/5yarzkms, and direct insurers to
“reevaluate[]” claims after changes in guidance occur, Managers Bulletin MGR-19-029 (Dec. 23,
2019), https://tinyurl.com/269a62nh.
Some of the Insurance Corporation’s other decisions confirm the point. Recall that these
determinations apply generally and bind all program participants. 7 C.F.R. § 400.766(b)(2). Past
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determinations have set out a duty for insurers to correct claims. See, e.g., Final Agency
Determination FAD-136 (Apr. 20, 2011), https://tinyurl.com/3ra4e2ua (requiring insurer “to
correct claims when information is found to be incorrect in accordance with FCIC approved policy
provisions and procedures”); Final Agency Determination FAD-140 (May 10, 2011),
https://tinyurl.com/2p8yncjx (noting “any time there is not conformance with the approved policy
and procedures, [insurers] must take such actions as are necessary to achieve conformance”). Far
from announcing a novel obligation, Determination 287 echoed these prior determinations.
All perspectives considered, the Crop Insurance Policy and the regulatory framework
support the two core holdings in Determination 287, making it anything but arbitrary and
capricious.
Attempting to avoid this conclusion, Miller points out that the Insurance Corporation failed
to list all of the policy provisions that require repayment in Determination 287. But the regulations
put the burden on the requesting parties to “[i]dentify and quote” the policy provision that they ask
to be interpreted. 7 C.F.R. § 400.767(a)(3). For its part, Farmers Mutual requested an
interpretation of § 21. But Miller requested “a determination based on the Basic Provisions, in
general.” R.12 at 52. Having failed to comply with the regulations on the front end, he cannot
complain about the agency’s determination on the back end.
Miller objects that Determination 287 includes analysis that is irrelevant to his case. But
that should not come as a surprise. Recall that final agency determinations apply generally, bind
all participants, and are not permitted to consider specific facts or conduct. 7 C.F.R.
§§ 400.766(b)(2), 400.767(a)(8).
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Miller claims that Determination 287’s reliance on two prior agency determinations—Final
Agency Determinations 106 and 281—cannot be squared with the text of the Crop Insurance
Policy. But Miller failed to challenge these decisions in the right way. A farmer must ask the
agency to decide if a determination is “subject to administrative review” before he may seek
judicial review of it. Id. § 457.8(20)(k); see also id. § 11.6. Miller followed this process for
Determination 287. But he never did the same for Determinations 106 and 281, as required. Id.
§ 457.8(20)(k). That’s one problem.
Another problem is that, whatever the merits of Miller’s concerns about Determinations
106 and 281, Determination 287 stands on its own. The decision is well explained, reasonable,
and far from arbitrary and capricious.
The third problem is that his objections to these earlier Determinations are unconvincing
anyway. Miller objects to one sentence in Determination 106: “When overpayments are
discovered as a result of non-compliance with any policy provision, the policyholder may be
required to repay such overpaid amounts.” Final Agency Determination FAD-106 (Jan. 21, 2010),
https://tinyurl.com/p534yhwd. This sentence, as he sees it, renders superfluous the phrase “repay
any overpaid amounts” found in § 21(g) and other provisions. Appellant’s Br. 23–24. But the
supporting examples listed in Determination 106—“incorrect yields, uninsurable acres reported
on the acreage report, overstated acreage, incorrect share,” Final Agency Determination FAD-106,
supra—all correspond to policy provisions that explicitly require repayment. See 7 C.F.R.
§ 457.8(3)(g)(4), (6)(h), (21)(b)(3). The broader regulatory system, as shown, supports this error
correction and repayment obligation.
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As for Determination 281, Miller objects to its conclusion that insurers and the Insurance
Corporation have a “duty to correct claims” in order to protect taxpayer dollars. Final Agency
Determination FAD-281 (Sept. 20, 2018), https://tinyurl.com/k53bcvac. This sentence, as he sees
it, lacks any basis in the Crop Insurance Policy. But the policy does not operate in a vacuum. The
Act requires the crop insurance system to be “sound,” 7 U.S.C. § 1502(a), and requires insurers
“to address program compliance and integrity issues as such issues develop,” id. § 1515(a)(2). The
regulations create administrative remedies to ensure “compliance and prevent fraud, waste, and
abuse” in the program. 7 C.F.R. § 400.451(a); see id. § 400.451(e) (requiring “protection of the
public interest”). These provisions support the duty to protect the public fisc outlined in
Determination 281.
Miller also faults the Insurance Corporation for citing Old Republic Insurance Co. v.
Federal Crop Insurance Corp., 947 F.2d 269 (7th Cir. 1991). That case, it is true, considered
repayments from an insurer to the Insurance Corporation, not from a farmer to an insurer. But the
Seventh Circuit held that the Insurance Corporation could collect overpayments from insurers
based in part on a provision in the reinsurance agreement allowing for the review and auditing of
records for paid claims. Id. at 274–75. The Crop Insurance Policy contains a similar provision for
reviewing records, as between farmers and insurers. 7 C.F.R. § 457.8(21)(b). Although the facts
differ in this case and that one, the Insurance Corporation could reasonably invoke the reasoning
of Old Republic to support the point that insurers must correct errors in claims.
What of the district court’s statement in its prior order nullifying the arbitral award that a
paid claim “remains settled” unless § 21(b)(3) applies? Miller, 366 F. Supp. 3d at 979. That is
neither here nor there. It is not pertinent here because time and plenty of later proceedings have
long overtaken it. And it was not right there because it could not be reconciled with the multiple
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other policy provisions requiring repayment, see 7 C.F.R. § 457.8(3)(g)(4), (3)(h),
(6)(h), (15)(b)(2), (21)(f); was inconsistent with § 21(b) and its carve-out of the right of the insurer
to request and inspect records, id. § 457.8(21)(b); and does not fit with the process for correcting
claims in the Loss Adjustment Manual, see Loss Adjustment Manual, supra, at 313.
We affirm.
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