Opinion
No. 1:21-cv-02702-RLY-KMB
2023-03-15
RJMC FARMS, LLC et al., Plaintiffs, v. Thomas James VILSACK, Secretary United States Department of Agriculture et al., Defendants.
Colby J. Byrd, Jeremiah L. Buettner, McAfee & Taft a Professional Corporation, Oklahoma City, OK, for Plaintiffs. J. Taylor Kirklin, United States Attorney's Office, Indianapolis, IN, for Defendants.
Colby J. Byrd, Jeremiah L. Buettner, McAfee & Taft a Professional Corporation, Oklahoma City, OK, for Plaintiffs. J. Taylor Kirklin, United States Attorney's Office, Indianapolis, IN, for Defendants.
ENTRY ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
RICHARD L. YOUNG, JUDGE
Defendant, the Secretary of the United States Department of Agriculture ("USDA"), excluded the four Plaintiff farms from the federal crop insurance program, and the farms appealed their exclusion to the Director of the USDA's National Appeals Division ("NAD"). Following adverse decisions that upheld their ineligibility, the farms sued for judicial review of the agency's decision. As the court finds the agency acted in accordance with the law, the court GRANTS Defendants' cross-motion for summary judgment and DENIES Plaintiffs' motion for summary judgment.
I. Background
A. Regulatory Framework
Following the havoc created by the Dust Bowl in the 1930s, Congress created the Federal Crop Insurance Corporation ("FCIC") to backstop farmers when they lost crops due to uncontrollable weather conditions. See 7 U.S.C. § 1501 et seq. (Federal Crop Insurance Act). While crop insurance participants initially contracted directly with the USDA through the FCIC, Congress eventually allowed private insurance companies to directly issue crop insurance policies that would be reinsured by the FCIC. See Pub. L. No. 96-365, 94 Stat. 1312 (1980). The crop insurance policies in this case are of this type: initially contracted between the Plaintiff farms and a third-party insurer and reinsured by the USDA. (AR at RJMC000005; see also 7 CFR § 457.8 (standard private crop insurance contract)).
But even though the USDA is not a party to the insurance contracts, it has promulgated rules to determine when participant farms are ineligible for further insurance under the Federal Crop Insurance Act. See 7 CFR §§ 400.675 et seq. (1994). While there are a few avenues for a participant to be ineligible, the most relevant is when a participant has "a delinquent debt on a crop insurance policy, issued or reinsured by FCIC." 7 CFR § 400.679(a). A delinquent debt is "any debt owed to FCIC or the insurance provider . . . that has not been paid by the termination date specified in the applicable contract of insurance, or other due date for payment contained in any other agreement or notification of indebtedness." 7 CFR § 400.677. Naturally, a delinquent debt also requires a debt, which is somewhat confusingly defined as any money "which has been determined by an appropriate agency official to be owed." Id.
The parties agree that the controlling regulations are those in force at the time (2011) the insurance policy was active. The regulations in force at that time were first promulgated in 1997 and not modified until 2014. As such, all citations to the CFR will be to the applicable 1997 version unless otherwise identified.
The regulations are not, however, overly rigid in text or application; participants can and will often make deals with insurers to alter their payment schedules. These agreements come in two flavors: "scheduled installment payment agreements" and "any other agreement" to repay money. 7 CFR § 400.677. A scheduled installment payment agreement is an agreement that "modif[ies] the terms of the original debt." Id. That means once the agency has determined a participant owes money, the insurer and participant can agree to repay that money on an agreed upon schedule. Id. These agreements are useful because they help participants avoid being declared ineligible despite missing a payment or regain ineligibility following a missed payment. See 7 CFR § 400.681 (explaining a missed payment will cause a participant to be ineligible unless or until "the person has executed a scheduled installment payment agreement"). "[A]ny other agreement[s]" are broader as they are not aimed at making a participant eligible despite missing payments but are instead private contracts between insurer and participant to repay money before the agency gets involved. See, e.g., 7 CFR § 400.677.
B. Factual Background
Plaintiffs—RJMC Farms, LLC, Michelle Farms, LLC, Renee Farms, LLC, and Jennifer Farms, LLC—are four farms that participated in the federal crop insurance program to protect the soy and corn they grew from 2009 to 2014. (See AR at RJMC000756, 760-61). As is typical most years, the farms purchased insurance policies from a private insurer for their crops during the 2011 crop year. (Id. at 756-57). That year, the farms received indemnification from the insurer that collectively amounted to $372,194 for losses to their soy and corn. (Id.).
The exclusion of these four farms came to the agency in four separate actions. The Defendant Director consolidated them into one decision. The different administrative records present the same legal issues and differ primarily with regard to names, addresses, and dollar amounts.
The USDA Office of the Inspector General, charged with overseeing the efficient and legal execution of the insurance program, began investigating the farms in 2015. (Id. at 756). Specifically, the Inspector General inquired into whether the four farms, separately owned by Michael Carnahan and his three daughters, had been established to circumvent the agency's payment limitations and increase the number of multi-peril crop insurance payments. (Id. at 759-65). After two years of investigation, the office found nothing actionable and turned the case over to the USDA's regional compliance office for administrative, rather than criminal, proceedings. (Id. at 759).
After reviewing the evidence, the compliance office issued a set of initial findings in 2018 concluding the insurer improperly made indemnity payments to Plaintiffs for the 2011 crop year. (Id. at 756). That was because the farms did not have "a bona-fide insurable interest for the 2011 crop year." (Id.). Significant evidence in the form of documents submitted by the farms, bank statements, and certifications made by Carnahan supported these preliminary findings. (Id. at 759-82, 788, 799, 1180 et seq.). Therefore, the agency informed the insurer that "[a]s a result of our findings, we are voiding the [farms'] policies for the applicable crop years." (Id. at 757).
The insurer interpreted this command as a "request to void" the farms' policies. (Id. at 1537). At a later proceeding, the insurer testified that it did not believe it was obligated to void the policies. (AR at Audio Recording of Combined Hearing (Dec. 8, 2020), at 2:14:40-15:04). Even so, the insurer voided the policies, notified the agency of that action, and enclosed a summary of the amounts due from the farms. (AR at RJMC0001537). Then the insurer told the farms that, based on its "independent review," the farms' policies were void because the farms misrepresented their eligibility for crop insurance. (Id. at 1562-63). This required the farms to enter into agreements structuring when and how the farms would repay the improperly received indemnity payments. (Id.). The first payments were due on July 1, 2019. (Id. at 1568).
Shortly after those agreements were entered, the agency issued final findings that upheld its initial findings. (Id. at 481 et seq.). Less than two months later, the agency withdrew both of its previous findings because it believed it overstepped its authority and did not have the power to void or direct insurance providers to void policies. (AR at Audio Recording, at 1:38:45-1:40:02). Notably, this decision was not "based on any errors with respect to the underlying factual findings." (Id. at 1:40:03-1:40:40). Despite this withdrawal, the insurer maintained the policies were void and the farms were bound by their repayment agreements. (AR at RJMC001888).
Then, on July 1, 2019—the same day the farms' first payments were due—the agency reissued a corrected set of initial findings that reached the same factual and legal conclusions as the previous findings. (Id. at 1660). The only difference is the corrected findings did not purport to void the 2011 policies, even though it recognized there had been indemnity overpayments that would need to be repaid. (Id. at 1666). The agency made these corrected findings final in February of 2020. (Id. at 1671-72).
Despite these repeated findings, the farms did not begin repaying the indemnity overpayments on July 1 as agreed. (Id. at 193). Instead, the farms indicated to the insurer that they did not believe the repayment agreements were enforceable. (Id. at 1888). The insurer thought differently. (Id.). As the insurer believed the farms were delinquent on their debt, it reported this information to the USDA in September of 2020—14 months after the farms missed their payments. (Id. at 280). After reviewing the insurer's report, the USDA excluded the farms from the federal crop insurance program on the grounds that the farms had delinquent debt. (Id. at 211-15; see 7 CFR § 400.679(a) (requiring agency to exclude participants in the crop insurance program where they have unpaid delinquent debt)).
The farms appealed this exclusion to the NAD. (Id. at 107). They specifically contended the agency did not determine the farms owed a debt before the farms entered into the repayment agreements with the insurer, which made those agreements invalid. (Id.). Consequently, the farms could not have had delinquent debt. (Id.). After receiving evidence and holding a hearing, the NAD upheld the exclusion. (Id. at 116). It did so because, in the administrative judge's view, the regulations allowed the insurer to demand repayment from a farm without input from the agency. (Id. at 113). After an unsuccessful appeal to the Director of the NAD, the agency action became final. (Id. at 191). This case followed to review the Director's decision.
II. Legal Standard
Because this suit seeks review under 5 U.S.C. §§ 701-06, the summary judgment standard in Federal Rule of Civil Procedure 56 does not apply. Fisher v. Pension Ben. Guar. Corp., 468 F. Supp. 3d 7, 18 (D.D.C. 2020); see also Hunger v. Leininger, 15 F.3d 664, 669 (7th Cir. 1994). Here, summary judgment "is simply the procedural vehicle for asking the judge to decide the case on the basis of the administrative record." Heather S. by Kathy S. v. Wisconsin, 125 F.3d 1045, 1052 (7th Cir. 1997). Put differently, the facts have already been determined by the agency, which means "the entire case on review is a question of law." Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001). In that context, the district court "acts as an appellate tribunal." Brinklys v. Johnson, 175 F. Supp. 3d 1338, 1349 (M.D. Fla. 2016); see also Hunger, 15 F.3d at 669 (comparing role of district court in reviewing administrative action to "a panel of appellate judges").
The ultimate question is whether the agency action was arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence in the case, without observance of procedure required by law, or not in accordance with law. 5 U.S.C. §§ 706(2) et seq. While this marks "the full extent of judicial authority to review executive agency action for procedural correctness," FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513, 129 S.Ct. 1800, 173 L.Ed.2d 738 (2009), it creates varying, but overlapping, standards of review depending on the issue, see, e.g., Fox v. Clinton, 684 F.3d 67, 75 (D.C. Cir. 2012) (discussing differing standards of review under § 706). Here, the standard differs for each issue and is discussed in each respective section.
III. Discussion
The farms identify three errors they believe demonstrate the agency improperly excluded them from the federal crop insurance program. First, the Director misinterpreted the regulations governing when a farm must be excluded by failing to require the agency to determine the farms had a "debt" before the farm could enter a binding agreement to repay money. Thereby, the Director overlooked a critical procedural error that should have prevented exclusion. Second, the Director acted arbitrarily and capriciously by refusing to vacate the agency's action for a failure to follow its own procedures. Third, the insurer did not independently void the 2011 policies, and substantial evidence did not support the agency's determination to the contrary. The court addresses each assigned error in turn.
A. Regulatory Framework
1. Standard of Review
Because this challenge involves deciding whether an agency has properly interpreted its own regulation, the appropriate framework for review is Auer deference. See Auer v. Robbins, 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997); see also Cerniglia v. Glickman, 118 F. Supp. 2d 27, at 31-32 (D.D.C. 2000) (applying Auer as standard of review in reviewing a decision of the Director of the NAD); Davids v. USDA, No. 17-cv-3091, 2018 WL 8367469, at *3 (N.D. Iowa Oct. 16, 2018) (same); Bertschland Fam. Prac. Clinic, P.C. v. Thompson, No. IP01-562-CH/F, 2002 WL 1364155, at *5-6 (S.D. Ind. June 4, 2002) (discussing Auer and Chevron as standards of review) (Hamilton, J.).
The application of Auer deference proceeds in two-steps. See Kisor v. Wilkie, — U.S. —, 139 S. Ct. 2400, 2415-16, 204 L.Ed.2d 841 (2019). First, the court determines if the regulation is ambiguous. Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945) (deferring only "if the meaning of the words used is in doubt"). This process utilizes the court's traditional tools of interpretation without regard to the agency's interpretation. See, e.g., Kisor, 139 S. Ct. at 2415. Second, if the regulation is ambiguous, the court will defer to the agency's reading so long as that reading is "reasonable." Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 506, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (explaining "the dispositive question" under step two is whether the interpretation "is a reasonable construction of the regulatory language").
Before concluding a regulation is "genuinely ambiguous," the court must "exhaust all the traditional tools of construction." Kisor, 139 S. Ct. at 2415 (internal quotation marks omitted). This inquiry begins "where all such inquiries must begin: with the language . . . itself." United States v. Ron Pair Enter., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). In engaging in that inquiry, the court must "interpret[ ] [the regulation] in accord with the ordinary public meaning of its terms at the time of enactment." Bostock v. Clayton Cnty., — U.S. —, 140 S. Ct. 1731, 1738, 207 L.Ed.2d 218 (2020). But where terms are defined by the regulation, those definitions control. Burgess v. United States, 553 U.S. 124, 129, 128 S.Ct. 1572, 170 L.Ed.2d 478 (2008).
The court can declare a regulation ambiguous only when "more than one interpretation is 'plausible' and 'the text alone does not permit a more definitive reading' " after its deploying traditional interpretive tools. Exelon Generation Co., LLC v. Loc. 15, Int'l Brotherhood of Elec. Workers, AFL-CIO, 676 F.3d 566, 570 (7th Cir. 2012) (quoting Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 207, 131 S.Ct. 871, 178 L.Ed.2d 716 (2011)).
2. Step One
Before delving into the regulatory scheme, it is helpful to precisely define the dispute. Both parties agree that under the applicable regulations the agency needs to determine a participant owes money before that participant can be excluded, and there is no dispute the agency determined the farms owed a debt at the end of the exclusion process. The issue here is one of timing. The farms contend the regulations required the agency to determine they owed a debt before the farms entered into repayment agreements with the insurer, rather than after the farms missed their payments under those agreements. Notably, the regulations do not facially impose any timing on the agency; the agency can seemingly make the debt determination any time prior to completing the process to exclude the participant. See 7 CFR § 400.680. Rather, the farms believe the agreements with the insurer were a specific type of agreement—a scheduled installment payment agreement—which requires an agency determination before being valid. The court does not agree. The agreements were not a scheduled installment payment agreement and the regulations, therefore, unambiguously do not require the agency to make a determination of debt before participants and their insurer can enter into a repayment agreement.
The farms' argument goes like this: within the context of the regulations, "debt" is defined as an "amount of money which has been determined by an appropriate agency official to be owed . . . based on evidence submitted by the insurance provider." Id. (emphasis added). This determination is important because the agency needs to make a determination of debt before the farm and insurer can enter into a special type of agreement: the "scheduled installment payment agreement," which is an "agreement . . . to satisfy financial obligations . . . under conditions which modify the terms of the original debt." 7 CFR § 400.677 (emphasis added). These agreements are used to help debtors avoid ineligibility despite delinquent debt. Compare 7 CFR § 400.679(a) (explaining participants are ineligible with "delinquent debt on a crop insurance policy"), with 7 CFR § 400.681 (explaining participants with delinquent debt will be ineligible unless or until "the person has executed a scheduled installment payment agreement"). It follows, then, that a scheduled installment payment agreement requires "original debt" as determined by the agency. Id.
Thus, the farms believe there needs to be "original debt" for their breached repayment agreements to be valid. 7 CFR § 400.677. Without an original debt determination, the farms never could have entered into scheduled installment payment agreements, they never could have missed payments as the agreements could not be legally binding, and they could not possibly have had delinquent debt for their failure to pay on July 1, 2019. Consequently, their exclusion would be inconsistent with the regulatory scheme.
While this is logically sound, the farms conflate two different types of agreements demarcated by the regulatory scheme: scheduled installment payment agreements and other agreements to repay money. Debt is delinquent when a participant fails to pay "by the termination date specified in the applicable contract," by the "due date for payment contained in any other agreement or notification of indebtedness," or by being overdue pursuant to "a scheduled installment payment agreement." 7 CFR § 400.677 (emphasis added). Notably, scheduled installment payment agreements are limited to situations where the agency has made a debt determination because they are for a particular purpose. (See, e.g., AR at RENE000101 (noting "[the farms'] argument is correct for the term "scheduled installment payment agreement") (NAD decision)). That purpose is assisting participants in avoiding or remedying ineligibility for delinquent debt. 7 CFR § 400.681(a)(1) (explaining participant with delinquent debt will be ineligible "until . . . the person has executed a schedule installment payment agreement"). "Any other agreement[s]" are a distinct species of agreement from the scheduled installment payment agreement, one that is not textually required to have the agency determine debt before being valid. See 7 CFR § 400.677.
The farms counter that this construction draws an unfounded distinction between pre-ineligibility agreements and post-ineligibility agreements. This argument is a non-starter because the regulations draw no such distinction. Scheduled installment payment agreements help avoid ineligibility despite delinquency; they are not necessarily linked to the eligibility determination. That scheduled installment payment agreements focus on avoiding ineligibility despite delinquency is why the plans must specifically modify "original debt." 7 CFR § 400.677. If parties could enter these agreements without a determination of debt by the agency, a scheduled installment payment agreement could not help a participant remain eligible despite delinquency as a debt cannot be delinquent unless the debt exists. See 7 CFR § 400.681(a)(1) (explaining a person will be ineligible for delinquent debt unless "the person has executed a scheduled installment payment agreement"). The farms' view that all repayment agreements are scheduled installment repayment agreements that require an agency determination of debt before being valid is inconsistent with the plain text of the regulations.
The farms also cursorily suggest the regulations do not consider agreements made after a participant is deemed ineligible at all. This is not true. Subsection U has a provision for the "reinstatement of eligibility" which allows a participant to return to eligibility if "the person has executed a scheduled installment payment agreement." 7 CFR § 400.682(a). The farms' misunderstanding aside, this further confirms that scheduled-installment payment agreements are focused on ineligibility, while "any other agreement[s]" are focused on all other situations where a participant may agree to repay money.
In other words, a participant could be delinquent on debt and execute a scheduled installment payment agreement before being declared ineligible. Were that to occur, there would be no basis for declaring the participant ineligible and no ineligibility determination could take place because of the presence of a scheduled installment payment agreement. See 7 CFR § 400.681.
The farms' confusion flows from informal agency guidelines that name pre-delinquency payment agreements, which are a type of "other agreement" under the regulations, as "scheduled installment payment agreements," despite not necessarily falling under that regulatory umbrella. (See AR at RJMC002020 (ITS Handbook)). Sample contracts included in those agency guidelines show these contracts occur entirely between the insurer and the participant with no room for the agency to make a debt determination. (Id. at 2047). This type of contract is expressly considered by the regulations under the "any other agreement" provision and does not carry the same limitations of scheduled installment payment agreements. 7 CFR § 400.677.
Ultimately, after applying its traditional legal toolkit, the court concludes the regulations unambiguously allow insurers to contract with farmers to demand repayment before the agency makes a determination of debt. Regardless of what the agency calls them, pre-debt determination, "other" agreements are different in kind from the scheduled installment payment agreements that require a debt determination before being valid. See 7 CFR § 400.677. This agreement between the insurer and the farms was a pre-debt determination agreement that was not constructed to help the farms avoid ineligibility but rather set a timeline for repaying the overpayments. The agreement, therefore, was not a scheduled installment payment agreement. Per the regulations, the insurer and farms could have entered into valid agreements without a determination of debt by the agency.
As the court determines the regulations are not ambiguous, it is not necessary to proceed beyond step one of Auer.
The agency's opinion explained this point succinctly: the regulations "did not require an appropriate agency official to determine" the farms owed money to the insurer "before [the insurer] could demand repayment;" rather they require a determination of debt "before the Agency itself could treat that obligation as a delinquent debt." (AR at RENE000177 (emphasis in original)). Put differently, the regulations limit the agency's ability to determine a participant is ineligible not an insurer's ability to contract with that participant. Nothing suggests these regulations would displace the traditional contract principles governing agreements between the farms and the insurer. To the contrary, the purpose of the regulation expressly limits the regulation's reach to creating procedures for determining if debt is delinquent rather than regulating whether a non-agency party can demand repayment. See 7 CFR § 400.675.
Thus, the repayment agreement was valid, and the agency did not err in determining it did not need to make a determination of debt before the insurer and farms entered repayment agreements. That, ultimately, means the farms' failure to pay under the repayment agreements constituted delinquent debt, as determined by the agency before exclusion. Exclusion from the crop insurance program was proper.
B. Failure to Follow Procedure
1. Standard of Review
The farms' second challenge is that the Director erred by upholding the farms' exclusion even though the insurer failed to certify the farms' delinquency within a 21-day period after the participant fails to make a payment. Here, the court reviews the decision to determine if it is "arbitrary or capricious." 5 U.S.C. § 706. That simply requires the agency to "consider[ ] relevant data under the correct legal standards and offer[ ] a satisfactory explanation for its action." Wisconsin v. EPA, 266 F.3d 741, 746 (7th Cir. 2001). An agency's explanation is satisfactory when it rationally connects the facts to its decision. Howard Young Med. Ctr. Inc. v. Shalala, 207 F.3d 437, 441 (7th Cir. 2000). In sum, so long as "the agency's path may be reasonably discerned," its decision will be upheld. Mt. Sinai Hosp. Med. Ctr. v. Shalala, 196 F.3d 703, 708 (7th Cir. 1999).
2. Analysis
The Director did not act arbitrarily or capriciously by determining the insurer's failure to certify the farms delinquency within 21 days did not change the result. At the outset, the farms attempt to frame the 21-day limit as a procedural requirement formally placed on the agency by the agency. This is not the case. The formal regulations do not impose any timeframe on the agency or insurer to submit evidence of ineligibility or place offending participants on the ineligibility list. See 7 CFR §§ 400.680(a-c); (AR at RJMC000198, Director's Opinion). This time-limit came from an informal handbook published by the agency, which makes the 21-day limit an aspirational guideline for insurers operating within the agency framework. (AR at RJMC000199 (observing there is "no penalty" for missing the deadline and citing the ITS handbook as creating the 21-day limit)). In other words, a failure by the insurer to follow the permissive guidelines does not render the agency's decision arbitrary: regardless of whether the insurer took longer than 21-days, the agency would be obligated by the formal regulations to exclude the participant once it received the appropriate documentation. (See id. at 198-99).
The Director also cogently explicated the relationship between the time-limit and the agency. All a failure to comply with the time-limit does is "result in a delay in denying program benefits to the [participant.]" (AR at RJMC002036). Insurers would then be forced to pay out benefits until the agency excluded the participant, which is why there is, ultimately, "no penalty" to the participant for an insurers' failure to meet the deadline and why the failure to follow this guidance would not change the outcome here. (Id. at RJMC000199). This explanation rationally connects the agency guidelines to the facts of the case. In doing so, the Director offered a satisfactory explanation such that the decision—failing to comply with the time period would not, by itself, preclude an ineligibility determination—was not arbitrary or capricious.
C. The Determination of the Voided Policies
1. Standard of Review
Finally, the farms challenge the Director's factual determination that the insurer independently decided to void the farms' 2011 insurance policies. The court must uphold the agency's factual findings "if they are supported by substantial evidence on the record as a whole." Dana Container, Inc. v. Sec'y of Labor, 847 F.3d 495, 499 (7th Cir. 2017). There is substantial evidence where there is " 'such relevant evidence as a reasonable mind might accept as adequate to support the conclusion' reached by the agency." Zero Zone, Inc. v. U.S. Dep't of Energy, 832 F.3d 654, 668 (7th Cir. 2016) (quoting Loc. 65-B, Graphic Commc'ns Conf. of Int'l Bhd. of Teamsters v. NLRB, 572 F.3d 342, 347 (7th Cir. 2009)). That requires "more than a mere scintilla" of evidence. Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). Barring exceptional circumstances, the court defers to the Director's credibility determinations. Chao v. Gunite Corp., 442 F.3d 550, 557 (7th Cir. 2006). Ultimately, "[s]ubstantial evidence is not a high threshold." Karr v. Saul, 989 F.3d 508, 511 (7th Cir. 2021).
2. Analysis
After a review of the record, the court holds substantial evidence supports the agency's finding that the insurer voided the 2011 insurance policies on its own accord. In voiding the policies, the insurer emphasized that "We [the insurer] have determined that you [the farms] misrepresented [your] eligibility" and "we are voiding your 2011 policy." (AR at RENE000243). The insurer continually referred to this decision as "our determination." (Id. at 242). The decisionmakers for the insurer testified that they decided to void the policies on its own using evidence produced by the agency. (AR at Audio Recording, at 2:14:40-15:04). That testimony also indicates the insurer did not believe it had to void the policies, but it could do so if it chose. (Id.). Agency documents and testimony also reinforces the belief that the insurer could make its own decision. (Id.; AR at RJMC001640 (explaining to insurer that the agency findings "do[ ] not direct, require or authorize" the insurer "to take any particular action" and the insurer must "conduct an independent review and evaluation" of whether the policy is void) (emphasis in original)). All this sufficiently supports the agency's factual finding.
In a final maneuver, the farms claim the insurer should not have been allowed to use the evidence obtained by the agency in the insurer's decision to void the policies. That is true, they say, because the agency withdrew its 2018 findings before the insurer voided the policies. The farms do not cite any law indicating this would be an error. (See also AR at RENE000104, Appellate Division Opinion ("I find nothing that prohibits [the insurer] from using information from the Agency's investigation to reach its own determination regarding FCIP eligibility.")). Nor does the farms' position make intuitive sense: just because the 2018 report's legal conclusions were invalid does not mean the insurer could not use the factual evidence in making its own decision. Accordingly, the agency did not err in finding that the insurer, not the agency, made the decision to void the 2011 policy.
IV. Conclusion
For the reasons discussed above, the court GRANTS Defendants' Cross-Motion for Summary Judgment (Filing No. 20) and DENIES the Plaintiffs' Motion for Summary Judgment (Filing No. 18). IT IS SO ORDERED this 15th day of March 2023.