Beruflich Dokumente
Kultur Dokumente
17-0062
7/24/2017 3:32 PM
tex-18392247
SUPREME COURT OF TEXAS
BLAKE A. HAWTHORNE, CLERK
V.
On Petition for Review from the 110th District Court of Floyd County,
Texas, No. 10,422; and the Amarillo Court of Appeals, Jody James
Farms, JV v. The Altman Grp., Inc. and Laurie Diaz,
506 S.W.3d 595, (Tex. App.–Amarillo 2016).
ii
TABLE OF CONTENTS
iii
CERTIFICATE OF COMPLIANCE .................................................... 24
APPENDIX .............................................................................................. 25
iv
INDEX OF AUTHORITIES
Cases
Statutes
vi
STATEMENT OF THE CASE
vii
Arbitration and In October 2014, Arbitrator Harper Estes
Confirmation of rendered an Award of Arbitrator stating JJF
Award/Disposition: did not establish a right of recovery and
determining JJF should take nothing.
(CR92-94; App. Tab 1) The arbitrator
indicated the findings of the original
arbitrator were consistent with his findings
precluding recovery. (CR94)
viii
STATEMENT OF JURISDICTION
pursuant to the policy. Therefore, this Court does not have jurisdiction
the opinion does not negatively impact the jurisprudence of the State of
section 22.001(a)(6) (Lexis 2017). Therefore, the Court should deny the
ISSUES PRESENTED
Briefed Issue:
Unbriefed Issues:
ix
Issue 4: Whether a non-party to an arbitration agreement can compel
arbitration of claims within the scope of the arbitration
agreement.
x
TO THE HONORABLE SUPREME COURT OF TEXAS:
The decision is compliant with state and federal law as they relate to
FCIC policies, so there is no need for the Court to review this matter.
STATEMENT OF FACTS
in JJF’s original suit against Rain and Hail (CR88-90; App. Tab 2) and
the arbitrator in this matter (CR92-94; App. Tab 1) determined there was
timely manner.
While this was one reason for denial of the claim, Rain and Hail also
1
that JJF intentionally misrepresented planting dates, both of which led
amber waves of grain, snowy fields of cotton, and golden crowned rows of
corn are subsidized with special assistance from the government, and
agent, the laws of arbitration, contract, and the FCIC collide into a
unique scenario that the trial and appellate courts and arbitrator
correctly handled.
The claims asserted by JJF are within the scope of the arbitration
the Policy. Because the determination was properly within the Policy
2
Petitioner attempts to take isolated language from the appellate
courthouse. But the appellate court properly set out the procedure for an
trial court made, not just one, but three determinations that the
agreement was arbitrable between the parties and was within the proper
ARGUMENT
A. Respondents, even as non-signatory third parties, were
entitled to compel arbitration pursuant to the language in this
FCIC contractual agreement.
3
agreement agreed to arbitrate arbitrability’ and proceeded to the second
by the trial court. Respondents raised the issue by way of their motion to
briefs (CR24), and the trial court granted the motion to compel. (CR26-
signatory argument (CR28-36), and that, too, was set for hearing (CR37)
parties and the claims were outside of the scope of any arbitration
agreement that might exist, but the arbitrator denied the motion.
(CR100-121; 123)
award, again raising the same arguments. (CR57-73) The trial court
4
denied the motion to vacate, granting the petition to confirm the final
did not put the primary focus on that procedural history, the facts and
opinion to future cases. Within that analysis, the court clearly delineated
5
1. The applicable arbitration provisions are broad.
(CR44-45)
its objections, just as it has listed them for this Court. (CRSupp. 4-76)
6
raising the non-signatory argument (CR28-36), and that, too, was set for
award, again raising the same arguments (CR57-73). The trial court
conducted again considered and denied the motion to vacate and granted
7
9 U.S.C. §10. These grounds are exclusive and are not open to
Matttell, Inc., 552 U.S. 576, 587-88 (2008). While this Court may have a
the authority of the Hall Street opinion. Nafta Traders, Inc., v. Quinn,
339 S.W.3d 84, 90, 92-93 (Tex. 2011). The Amarillo Court of Appeals
signatory versus a non-signatory, but the court clearly states “it matters
In Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 304 (Tex. 2006), this
to the agreement can compel arbitration with one who is, and vice versa.”
8
Id., at 305. The Court referenced case law for non-signatories compelling
arbitration against signatories, (In re Vesta Ins. Group, Inc., 192 S.W.3d
759, 761-762 (Tex. 2006) (per curiam)), and for signatories compelling
S.W.3d 127, 131-135 (Tex. 2005); In re Kellogg Brown & Root, Inc., 166
S.W.3d 732, 738 (Tex. 2005); In re FirstMerit Bank, N.A., 52 S.W.3d 749,
Agency, L.L.C., wherein the United States Court of Appeals for the Fifth
9
Meyer, 211 S.W.3d at 305-06, citing Grigson, 210 F.3d 524, 527 (5th Cir.),
cert. denied, 531 U.S. 1013, (2000) (quoting M S Dealer Serv. Corp. v.
Franklin, 177 F.3d 942, 947 (11th Cir. 1999) (internal citations and
210 F.3d at 526; Meyer, 211 S.W.3d at 304-05. And just as in those
F.3d at 528.
with Merrill brought suit against Merrill and a sister company that was
337 F.3d at 128. Notably, the investor was attempting to support his
10
trying to compel litigation against a signatory, and the court was quick
pet., Roe contracted with Metro LLP to renovate her home. Ladymon
signed the agreement in his capacity as partner but not individually. Id.,
capacity and ruled in favor of Roe’s requests for relief. Id., at 508-509.
Roe then filed suit to confirm the arbitration award, and Ladymon filed
The trial court, utilizing law applicable to FAA contracts, held the
11
an award against Ladymon individually. The trial court also noted the
contract.
Inc. v. Kaplan, 514 U.S. 938 (1995) as to whether a signatory could show
belonged to the trial court. Roe, 318 S.W.3d at 506. Therefore, the issue
of arbitrability was a question for the court, so the trial court should
12
In DK Joint Venture 1 v. Weyand, 649 F.3d 310 (5th Cir. 2011), the
and the chief executive and financial officers individually. Id., at 312.
for confirmation, the individual defendants argued the panel exceeded its
federal law were in accord on the issue. Id., at 314. The court also
17. With a resisting non-signatory, the court reviewed the district court’s
given if the court were reviewing a decision within the purview of the
13
And finally, the Houston Court of Appeals addressed a similar
limited partnership, but also included the limited partner (Herrera), who
405 S.W.3d 785 (Tex. App.—Houston [1st Dist. 2013, no pet.). There was
arbitrability over the objection of Herrera. Id., at 788. The award was
Herrera moved to vacate the award in the trial court, arguing the
court granted the motion and vacated that portion of the award. Id., at
789.
The court underwent the same analysis as the courts herein above,
and how that distinguishing fact impacts the arbitrator’s authority. Id.,
14
of arbitrability, but the trial court did not address the resolution of that
793.
who also made the important distinction that JJF, as the party resisting
Hail]” were subject to arbitration. Farms, 506 S.W.3d at 598. This fact
arbitrator.
Petitioner cites the opinion of Golden Age Senior Living of El Paso, LLC
opinion varies in at least one very significant manner. It does not involve
With all of the above in mind, we can now turn to the soundbite
15
Court’s attention. Within the framework of a nonsignatory compelling
the contract, the lower court looked to the actual arguments made by JFF
in the trial court, referencing the broad language and incorporation of the
cited cases Petitioner now argues are a problem because they involve
section provides:
16
a. Mandatory nature of FCIC arbitration
(FCIA). (CR 25) The FCIC was created for the purpose of providing
of the Chapter. These regulations are binding on “all who [seek] to come
within the FCIA.” Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380,
insurance policies. The actual provisions and terms of the policies are
preempt any contrary state laws that would apply to other insurance
specifically provided:
17
that such contracts or agreements provide that such laws or
rules shall not apply, or to the extent that such laws or rules
are inconsistent with such contracts or agreements.
the arbitration provision. The terms of the Policy are set forth in the
reinsured, and subsidized by the FCIC. The FCIC added the arbitration
42751 (emphasis added). Thus, the language calling for arbitration when
18
b. An agreement to arbitrate
requires proof that the party seeking to compel arbitration was a party
In re Merrill Lynch Trust Co., 123 S.W.3d 549, 554-555 (Tex. App.—San
Antonio 2003, orig. proceeding), mand. granted, 235 S.W.3d 217 (Tex.
agent obligations related to both JJF and Rain and Hail under the Policy
which Respondents, as agents of the insurer, Rain and Hail, LLC, were
agreement.
the first paragraph. (CR25) The Policy also makes specific mention of the
19
your crop insurance agent but must be confirmed in writing
within 15 days.
agents in an agency capacity with Rain and Hail to receive his claim. This
Rain and Hail with regard to receipt of claims from the insured. “Your
Both the interests of Rain & Hail and those of JJF were predicated
upon the reporting actions of Respondents as per the contract. See Merrill
Lynch Trust Co. FSB v. Alaniz, 159 S.W.3d 162, 169 (Tex. App.—Corpus
asserting he did not seek a “direct benefit” from Altman and Diaz under
contract. Meyer, 211 S.W.3d at 305. As more fully set forth above, Meyer
is applicable here because, absent the Policy contract, JJF has no claim
20
against Respondents. If the Policy did not exist, JJF would have no claim,
of loss from JJF and convey it on to Rain and Hail, and JJF would have
no damages for denial of the claims. JJF’s entire suit relies upon the
Texas and federal courts have often been confronted with plaintiffs
Rubiola, 334 S.W.3d 220, 225 (Tex. 2011), and analogized the scenario in
Pinto Tech. Ventures, L.P v. Sheldon, No. 16-0007, 2017 Tex. LEXIS 465;
60 Tex. Sup. J. 1015; 2017 WL 220357 (May 19, 2017). Therein, the Court
the party’s claims rather than the legal causes of action asserts.” Id., at
Kaplan Higher Educ. Corp., 235 S.W.3d 206, 209 (Tex. 2007). In Kaplan,
21
a group of students sought to avoid the terms of an arbitration clause by
employees who took part in the negotiations preceding it.” Id., at 209.
The arbitrator found “[t]he Parties acknowledged that their conduct was
CONCLUSION
This appeal marks the seventh time JJF has attempted his
well.
PRAYER
pray this Court deny the petition for review, thereby upholding the trial
agreement.
Respectfully submitted,
/S/ANNA MCKIM
FIELD, MANNING, STONE,
HAWTHORNE, AND AYCOCK, P.C.
2112 Indiana Ave.
Lubbock, Texas 79410
Tel: (806) 796-4000
Fax: (806) 792-9148
Anna McKim, SBN 24033381
amckim@lubbocklawfirm.com
J. Paul Manning, SBN 24002521
jpmanning@lubbocklawfirm.com
Attorneys for Respondents
23
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing was
served via the Court’s Electronic Filing System on this 24th day of July,
2017, to counsel for Appellant, Mr. Jody Jenkins, JENKINS, WAGNON
& YOUNG, P.C.
CERTIFICATE OF COMPLIANCE
24
APPENDIX
25
92
93
94
88
89
90
9 USCS § 10
Current through PL 115-43, approved 6/30/17
United States Code Service - Titles 1 through 54 > TITLE 9. ARBITRATION > CHAPTER 1. GENERAL
PROVISIONS
(a) In any of the following cases the United States court in and for the district wherein the award was
made may make an order vacating the award upon the application of any party to the arbitration--
(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon
sufficient cause shown, or in refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior by which the rights of any party have been
prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual,
final, and definite award upon the subject matter submitted was not made.
(b) If an award is vacated and the time within which the agreement required the award to be made has
not expired, the court may, in its discretion, direct a rehearing by the arbitrators.
(c) The United States district court for the district wherein an award was made that was issued
pursuant to section 580 of title 5 may make an order vacating the award upon the application of a
person, other than a party to the arbitration, who is adversely affected or aggrieved by the award,
if the use of arbitration or the award is clearly inconsistent with the factors set forth in section 572
of title 5.
History
(July 30, 1947, ch 392, § 1,61 Stat. 672; Nov. 15, 1990, P.L. 101-552, § 5, 104 Stat. 2745; Aug. 26,
1992, P.L. 102-354, § 5(b)(4), 106 Stat. 946; May 7, 2002, P.L. 107-169, § 1, 116 Stat. 132.)
This section is based on Act Feb. 12, 1925, ch 213, § 10, 43 Stat. 885 (§ 10 of former Title 9).
End of Document
9 USCS § 11
Current through PL 115-43, approved 6/30/17
United States Code Service - Titles 1 through 54 > TITLE 9. ARBITRATION > CHAPTER 1. GENERAL
PROVISIONS
In either of the following cases the United States court in and for the district wherein the award
was made may make an order modifying or correcting the award upon the application of any party
to the arbitration--
(a) Where there was an evident material miscalculation of figures or an evident material mistake in
the description of any person, thing, or property referred to in the award.
(b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter
not affecting the merits of the decision upon the matter submitted.
(c) Where the award is imperfect in matter of form not affecting the merits of the controversy.
The order may modify and correct the award, so as to effect the intent thereof and promote justice
between the parties.
History
This section is based on Act Feb. 12, 1925, ch 213, § 11, 43 Stat. 885 (§ 11 of former Title 9).
End of Document
7 USCS § 1502
Current through PL 115-43, approved 6/30/17
United States Code Service - Titles 1 through 54 > TITLE 7. AGRICULTURE > CHAPTER 36. CROP
INSURANCE > FEDERAL CROP INSURANCE ACT
(a) Purpose. It is the purpose of this subtitle [7 USCS §§ 1501 et seq.] to promote the national welfare
by improving the economic stability of agriculture through a sound system of crop insurance and
providing the means for the research and experience helpful in devising and establishing such
insurance.
(b) Definitions. As used in this subtitle [7 USCS §§ 1501 et seq.]:
(1) Additional coverage. The term "additional coverage" means a plan of crop insurance coverage
providing a level of coverage greater than the level available under catastrophic risk
protection.
(2) Approved insurance provider. The term "approved insurance provider" means a private
insurance provider that has been approved by the Corporation to provide insurance coverage
to producers participating in the Federal crop insurance program established under this subtitle
[7 USCS §§ 1501 et seq.].
(3) Beginning farmer or rancher. The term "beginning farmer or rancher" means a farmer or
rancher who has not actively operated and managed a farm or ranch with a bona fide insurable
interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more
than 5 crop years, as determined by the Secretary.
(4) Board. The term "Board" means the Board of Directors of the Corporation established under
section 505(a) [7 USCS § 1505(a)].
(5) Corporation. The term "Corporation" means the Federal Crop Insurance Corporation
established under section 503 [7 USCS § 1503].
(6) Department. The term "Department" means the United States Department of Agriculture.
(7) Farm financial benchmarking. The term "farm financial benchmarking" means--
(A) the process of comparing the performance of an agricultural enterprise against the
performance of other similar enterprises, through the use of comparable and reliable data,
in order to identify business management strengths, weaknesses, and steps necessary to
improve management performance and business profitability; and
(B) benchmarking of the type conducted by farm management and producer associations
consistent with the activities described in or funded pursuant to section 1672D of the Food,
Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925f).
7 USCS § 1502
(8) Loss ratio. The term "loss ratio" means the ratio of all sums paid by the Corporation as
indemnities under any eligible crop insurance policy to that portion of the premium designated
for anticipated losses and a reasonable reserve, other than that portion of the premium
designated for operating and administrative expenses.
(9) Organic crop. The term "organic crop" means an agricultural commodity that is organically
produced consistent with section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502).
(10) Secretary. The term "Secretary" means the Secretary of Agriculture.
(11) Transitional yield. The term "transitional yield" means the maximum average production per
acre or equivalent measure that is assigned to acreage for a crop year by the Corporation in
accordance with the regulations of the Corporation whenever the producer fails--
(A) to certify that acceptable documentation of production and acreage for the crop year is in
the possession of the producer; or
(B) to present the acceptable documentation on the demand of the Corporation or an insurance
company reinsured by the Corporation.
(c) Protection of confidential information.
(1) General prohibition against disclosure. Except as provided in paragraph (2), the Secretary, any
other officer or employee of the Department or an agency thereof, an approved insurance
provider and its employees and contractors, and any other person may not disclose to the
public information furnished by a producer under this subtitle [7 USCS §§ 1501 et seq.].
(2) Authorized disclosure.
(A) Disclosure in statistical or aggregate form. Information described in paragraph (1) may be
disclosed to the public if the information has been transformed into a statistical or
aggregate form that does not allow the identification of the person who supplied particular
information.
(B) Consent of producer. A producer may consent to the disclosure of information described in
paragraph (1). The participation of the producer in, and the receipt of any benefit by the
producer under, this subtitle [7 USCS §§ 1501 et seq.] or any other program administered
by the Secretary may not be conditioned on the producer providing consent under this
paragraph.
(3) Violations; penalties. Section 1770(c) of the Food Security Act of 1985 (7 U.S.C. 2276(c))
shall apply with respect to the release of information collected in any manner or for any
purpose prohibited by this subsection.
(4) Information.
(A) Request. Subject to subparagraph (B), the Farm Service Agency shall, in a timely manner,
provide to an agent or an approved insurance provider authorized by the producer any
information (including Farm Service Agency Form 578s (or any successor form)) or maps
(or any corrections to those forms or maps) that may assist the agent or approved insurance
provider in insuring the producer under a policy or plan of insurance under this subtitle.
7 USCS § 1502
(B) Privacy. Except as provided in subparagraph (C), an agent or approved insurance provider
that receives the information of a producer pursuant to subparagraph (A) shall treat the
information in accordance with paragraph (1).
(C) Sharing. Nothing in this section prohibits the sharing of the information of a producer
pursuant to subparagraph (A) between the agent and the approved insurance provider of
the producer.
(d) Relation to other laws.
(1) Terms and conditions of policies and plans. The terms and conditions of any policy or plan of
insurance offered under this subtitle [7 USCS §§ 1501 et seq.] that is reinsured by the
Corporation shall not--
(A) be subject to the jurisdiction of the Commodity Futures Trading Commission or the
Securities and Exchange Commission; or
(B) be considered to be accounts, agreements (including any transaction that is of the character
of, or is commonly known to the trade as, an "option", "privilege", "indemnity", "bid",
"offer", "put", "call", "advance guaranty", or "decline guaranty"), or transactions involving
contracts of sale of a commodity for future delivery, traded or executed on a contract
market for the purposes of the Commodity Exchange Act (7 U.S.C. 1 et seq.).
(2) Effect on CFTC and Commodity Exchange Act. Nothing in this subtitle [7 USCS §§ 1501 et
seq.] affects the jurisdiction of the Commodity Futures Trading Commission or the
applicability of the Commodity Exchange Act (7 U.S.C. 1 et seq.) to any transaction
conducted on a contract market under that Act by an approved insurance provider to offset the
approved insurance provider's risk under a plan or policy of insurance under this subtitle [7
USCS §§ 1501 et seq.].
History
(Feb. 16, 1938, ch 30, Title V, Subtitle A, § 502,52 Stat. 72; June 21, 1941, ch 214, § 1, 55 Stat. 255;
Aug. 1, 1947, ch 440, § 4, 61 Stat. 719; Oct. 13, 1994, P.L. 103-354, Title I, § 102(a), 108 Stat. 3180;
June 20, 2000, P.L. 106-224, Title I, Subtitle B, § 122, Subtitle D, § 141, 114 Stat. 377, 389; May 22,
2008, P.L. 110-234, Title XII, Subtitle A, §§ 12001, 12033(c), 122 Stat. 1371, 1405; June 18, 2008, P.L.
110-246, § 4(a), Title XII, Subtitle A, §§ 12001, 12033(c), 122 Stat. 1664, 2133, 2167; Feb. 7, 2014, P.L.
113-79, Title XI, §§ 11001, 11016(a), 11027(a), 128 Stat. 954, 963, 977.)
End of Document
7 USCS § 1506
Current through PL 115-43, approved 6/30/17
United States Code Service - Titles 1 through 54 > TITLE 7. AGRICULTURE > CHAPTER 36. CROP
INSURANCE > FEDERAL CROP INSURANCE ACT
(a) Succession. The Corporation shall have succession in its corporate name.
(b) Corporate seal. The Corporation may adopt, alter, and use a corporate seal, which shall be
judicially noticed.
(c) Property. The Corporation may purchase or lease and hold such real and personal property as it
deems necessary or convenient in the transaction of its business, and may dispose of such property
held by it upon such terms as it deems appropriate;
(d) Suit. Subject to section 508(j)(2)(A) [7 USCS § 1508(j)(2)(A)], the Corporation, subject to the
provisions of section 508(j) [7 USCS § 1508(j)], may sue and be sued in its corporate name, but
no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued
against the Corporation or its property. The district courts of the United States, including the
district courts of the District of Columbia and of any territory or possession, shall have exclusive
original jurisdiction, without regard to the amount in controversy, of all suits brought by or against
the Corporation. The Corporation may intervene in any court in any suit, action, or proceeding in
which it has an interest. Any suit against the Corporation shall be brought in the District of
Columbia, or in the district wherein the plaintiff resides or is engaged in business.
(e) Bylaws and regulations. The Corporation may adopt, amend, and repeal bylaws, rules, and
regulations governing the manner in which its business may be conducted and the powers granted
to it by law may be exercised and enjoyed.
(f) Mails. The Corporation shall be entitled to the use of the United States mails in the same manner
as the other executive agencies of the Government.
(g) Assistance. The Corporation, with the consent of any board, commission, independent
establishment, or executive department of the Government, including any field service thereof,
may avail itself of the use of information, services, facilities, officials, and employees thereof in
carrying out the provisions of this subtitle [7 USCS §§ 1501 et seq.];
(h) Collection and sharing of information.
(1) Surveys and investigations. The Corporation may conduct surveys and investigations relating
to crop insurance, agriculture-related risks and losses, and other issues related to carrying out
this subtitle [7 USCS §§ 1501 et seq.].
(2) Data collection. The Corporation shall assemble data for the purpose of establishing sound
actuarial bases for insurance on agricultural commodities.
7 USCS § 1506
(3) Sharing of records. Notwithstanding section 502(c) [7 USCS § 1502(c)], records submitted in
accordance with this subtitle [7 USCS §§ 1501 et seq.] and section 196 of the Agricultural
Market Transition Act (7 U.S.C. 7333) shall be available to agencies and local offices of the
Department, appropriate State and Federal agencies and divisions, and approved insurance
providers for use in carrying out this subtitle [7 USCS §§ 1501 et seq.], such section 196, and
other agricultural programs.
(i) Expenditures. The Corporation shall determine the character and necessity for its expenditures
under this subtitle [7 USCS §§ 1501 et seq.] and the manner in which they shall be incurred,
allowed, and paid, without regard to the provisions of any other laws governing the expenditure of
public funds and such determinations shall be final and conclusive upon all other officers of the
Government.
(j) Settling claims. The Corporation shall have the authority to make final and conclusive settlement
and adjustment of any claim by or against the Corporation or a fiscal officer of the Corporation.
(k) Other powers. The Corporation shall have such powers as may be necessary or appropriate for the
exercise of the powers herein specifically conferred upon the Corporation and all such incidental
powers as are customary in corporations generally.
(l) Contracts. The Corporation may enter into and carry out contracts or agreements, and issue
regulations, necessary in the conduct of its business, as determined by the Board. State and local
laws or rules shall not apply to contracts, agreements, or regulations of the Corporation or the
parties thereto to the extent that such contracts, agreements, or regulations provide that such laws
or rules shall not apply, or to the extent that such laws or rules are inconsistent with such
contracts, agreements, or regulations.
(m) Submission of certain information.
(1) Social security account and employer identification numbers. The Corporation shall require, as
a condition of eligibility for participation in the multiple peril crop insurance program,
submission of social security account numbers, subject to the requirements of section
205(c)(2)(C)(iii) of the Social Security Act [42 USCS § 405(c)(2)(C)(iv)], and employer
identification numbers, subject to the requirements of section 6109(f) of the Internal Revenue
Code of 1986 [26 USCS § 6109(f)].
(2) Notification by policyholders. Each policyholder shall notify each individual or other entity
that acquires or holds a substantial beneficial interest in such policyholder of the requirements
and limitations under this subtitle [7 USCS §§ 1501 et seq.].
(3) Identification of holders of substantial interests. The Manager of the Corporation may require
each policyholder to provide to the Manager, at such times and in such manner as prescribed
by the Manager, the name of each individual that holds or acquires a substantial beneficial
interest in the policyholder.
(4) Definition. For purposes of this subsection, the term "substantial beneficial interest" means not
less than 5 percent of all beneficial interests in the policyholder.
(n) Actuarial soundness.
(1) Projected loss ratio as of October 1, 1995. The Corporation shall take such actions as are
necessary to improve the actuarial soundness of Federal multiperil crop insurance coverage
7 USCS § 1506
made available under this subtitle [7 USCS §§ 1501 et seq.] to achieve, on and after October 1,
1995, an overall projected loss ratio of not greater than 1.1, including--
(A) instituting appropriate requirements for documentation of the actual production history of
insured producers to establish recorded or appraised yields for Federal crop insurance
coverage that more accurately reflect the associated actuarial risk, except that the
Corporation may not carry out this paragraph in a manner that would prevent beginning
farmers (as defined by the Secretary) from obtaining Federal crop insurance;
(B) establishing in counties, to the extent practicable, a crop insurance option based on area
yields in a manner that allows an insured producer to qualify for an indemnity if a loss has
occurred in a specified area in which the farm of the insured producer is located;
(C) establishing a database that contains the social security account and employee
identification numbers of participating producers, agents, and loss adjusters and using the
numbers to identify insured producers, agents, and loss adjusters who are high risk for
actuarial purposes and insured producers who have not documented at least 4 years of
production history, to assess the performance of insurance providers, and for other
purposes permitted by law; and
(D) taking any other measures authorized by law to improve the actuarial soundness of the
Federal crop insurance program while maintaining fairness and effective coverage for
agricultural producers.
(2) Projected loss ratio. The Corporation shall take such actions, including the establishment of
adequate premiums, as are necessary to improve the actuarial soundness of Federal multiperil
crop insurance made available under this subtitle [7 USCS §§ 1501 et seq.] to achieve an
overall projected loss ratio of not greater than 1.0.
(3) Nonstandard classification system. To the extent that the Corporation uses the nonstandard
classification system, the Corporation shall apply the system to all insured producers in a fair
and consistent manner.
(o) Regulations. The Secretary and the Corporation are each authorized to issue such regulations as
are necessary to carry out this subtitle [7 USCS §§ 1501 et seq.].
(p) Purchase of American-made equipment and products.
(1) Sense of Congress. It is the sense of Congress that, to the greatest extent practicable, all
equipment and products purchased by the Corporation using funds made available to the
Corporation should be American-made.
(2) Notice requirement. In providing financial assistance to, or entering into any contract with, any
entity for the purchase of equipment and products to carry out this subtitle [7 USCS §§ 1501 et
seq.], the Corporation, to the greatest extent practicable, shall provide to the entity a notice
describing the statement made in paragraph (1).
(q) [Redesignated]
(r) Procedures for responding to certain inquiries.
(1) Procedures required. The Corporation shall establish procedures under which the Corporation
will provide a final agency determination in response to an inquiry regarding the interpretation
7 USCS § 1506
by the Corporation of this subtitle [7 USCS §§ 1501 et seq.] or any regulation issued under
this subtitle [7 USCS §§ 1501 et seq.].
(2) Implementation. Not later than 180 days after the date of enactment of this subsection [enacted
June 23, 1998], the Corporation shall issue regulations to implement this subsection. At a
minimum, the regulations shall establish--
(A) the manner in which inquiries described in paragraph (1) are required to be submitted to
the Corporation; and
(B) a reasonable maximum number of days within which the Corporation will respond to all
inquiries.
(3) Effect of failure to timely respond. If the Corporation fails to respond to an inquiry in
accordance with the procedures established pursuant to this subsection, the person requesting
the interpretation of this subtitle [7 USCS §§ 1501 et seq.] or regulation may assume the
interpretation is correct for the applicable reinsurance year.
History
(Feb. 16, 1938, ch 30, Title V, Subtitle A, § 506,52 Stat. 73; June 21, 1941, ch 214, § 2, 55 Stat. 255;
Aug. 1, 1947, ch 440, § 7, 61 Stat. 719; Aug. 25, 1949, ch 512, § 8, 63 Stat. 665; Sept. 26, 1980, P.L. 96-
365, Title I, §§ 103, 107(a), 94 Stat. 1313; Nov. 28, 1990, P.L. 101-624, Title XXII, Subtitle A, §§
2201(a), 2202, 104 Stat. 3951, 3954; Dec. 13, 1991, P.L. 102-237, Title VI, § 601(1), (2), 105 Stat. 1878;
Aug. 10, 1993, P.L. 103-66, Title I, Subtitle D, § 1403(a), 107 Stat. 333; Oct. 13, 1994, P.L. 103-354,
Title I, §§ 104, 119(f)(2), 108 Stat. 3181, 3208; June 23, 1998, P.L. 105-185, Title V, Subtitle C, § 533,
112 Stat. 583; June 20, 2000, P.L. 106-224, Title I, Subtitle B, §§ 121(b), 124(b), 114 Stat. 377, 378; May
22, 2008, P.L. 110-234, Title XII, Subtitle A, §§ 12002(a), (b)(1), 12003(a), 12033(c), 122 Stat. 1371,
1405; June 18, 2008, P.L. 110-246, § 4(a), Title XII, Subtitle A, §§ 12002(a), (b)(1), 12003(a), 12033(c),
122 Stat. 1664, 2133, 2167.)
End of Document
7 USCS § 1507
Current through PL 115-43, approved 6/30/17
United States Code Service - Titles 1 through 54 > TITLE 7. AGRICULTURE > CHAPTER 36. CROP
INSURANCE > FEDERAL CROP INSURANCE ACT
(a) Appointment; Civil service exemption; compensation The Secretary shall appoint such officers and
employees as may be necessary for the transaction of the business of the Corporation pursuant to
civil-service laws and regulations, fix their compensation [in accordance with the provisions of the
Classification Act of 1923, as amended], define their authority and duties, and delegate to them
such of the powers vested in the Corporation as the Secretary may determine appropriate.
However, personnel paid by the hour, day, or month when actually employed may be appointed
[and their compensation fixed] without regard to civil-service laws and regulations [or the
Classification Act of 1923, as amended].
(b) Application of employee's compensation law. Insofar as applicable, the benefits of the Act entitled
"An Act to provide compensation for employees of the United States suffering injuries while in
the performance of their duties, and for other purposes," approved September 7, 1916, as
amended, shall extend to persons given employment under the provisions of this subtitle [7 USCS
§§ 1501 et seq.], including the employees of the committees and associations referred to in
subsection (c) of this section and the members of such committees.
(c) Use of associations of producers and private insurance companies; payment of administrative and
program expenses; sale of crop insurance through private agents and brokers; renewals, exclusion
of compensation from premium rates, indemnification for errors or omissions of Commission or
its contractors. In the administration of this subtitle [7 USCS §§ 1501 et seq.], the Board shall, to
the maximum extent possible, (1) establish or use committees or associations of producers and
make payments to them to cover the administrative and program expenses, as determined by the
Board, incurred by them in cooperating in carrying out this subtitle [7 USCS §§ 1501 et seq.], (2)
contract with private insurance companies, private rating bureaus, and other organizations as
appropriate for actuarial services, services relating to loss adjustment and rating plans of
insurance, and other services to avoid duplication by the Federal Government of services that are
or may readily be available in the private sector and to enable the Corporation to concentrate on
regulating the provision of insurance under this subtitle [7 USCS §§ 1501 et seq.] and evaluating
new products and materials submitted under section 508(h) or 523 [7 USCS § 1508(h) or 1523],
and reimburse such companies for the administrative and program expenses, as determined by the
Board, incurred by them, under terms and provisions and rates of compensation consistent with
those generally prevailing in the insurance industry, and (3) encourage the sale of Federal crop
insurance through licensed private insurance agents and brokers and give the insured the right to
renew such insurance for successive terms through such agents and brokers, in which case the
agent or broker shall be reasonably compensated from premiums paid by the insured for such
7 USCS § 1507
sales and renewals recognizing the function of the agent or broker to provide continuing services
while the insurance is in effect: Provided, That such compensation shall not be included in
computations establishing premium rates. The Board shall provide such agents and brokers with
indemnification, including costs and reasonable attorney fees, from the Corporation for errors or
omissions on the part of the Corporation or its contractors for which the agent or broker is sued or
held liable, except to the extent the agent or broker has caused the error or omission. Nothing in
this subsection shall permit the Corporation to contract with other persons to carry out the
responsibility of the Corporation to review and approve policies, rates, and other materials
submitted under section 508(h) [7 USCS § 1508(h)].
(d) Allotment of funds to Federal and State agencies. The Secretary may allot to bureaus and offices
of the Department or transfer to such other agencies of the State and Federal Governments that the
Secretary requests to assist in carrying out this subtitle [7 USCS §§ 1501 et seq.] any funds made
available pursuant to the provisions of section 516 [7 USCS § 1516].
(e) Utilization of producer cooperative associations. In carrying out the provisions of this subtitle [7
USCS §§ 1501 et seq.] the Board may, in its discretion, utilize producer-owned and producer-
controlled cooperative associations.
(f) Use of resources, data, boards, and committees of Federal agencies. The Board should use, to the
maximum extent possible, the resources, data, boards, and the committees of (1) the Soil
Conservation Service, in assisting the Board in the classification of land as to risk and production
capability and in the development of acceptable conservation practices; (2) the Forest Service, in
assisting the Board in the development of a timber insurance plan; (3) the Agricultural
Stabilization and Conservation Service, in assisting the Board in the determination of individual
producer yields and in serving as a local contact point for farmers where the Board deems
necessary; and (4) other Federal agencies in any way the Board deems necessary in carrying out
this subtitle [7 USCS §§ 1501 et seq.].
(g) Specialty Crops Coordinator.
(1) The Corporation shall establish a management-level position to be known as the Specialty
Crops Coordinator.
(2) The Specialty Crops Coordinator shall have primary responsibility for addressing the needs of
specialty crop producers, and for providing information and advice, in connection with the
activities of the Corporation to improve and expand the insurance program for specialty crops.
In carrying out this paragraph, the Specialty Crops Coordinator shall act as the liaison of the
Corporation with representatives of specialty crop producers and assist the Corporation with
the knowledge, expertise, and familiarity of the producers with risk management and
production issues pertaining to specialty crops.
(3) The Specialty Crops Coordinator shall use information collected from Corporation field office
directors in States in which specialty crops have a significant economic effect and from other
sources, including the extension service and colleges and universities.
History
7 USCS § 1507
(Feb. 16, 1938, ch 30, Title V, Subtitle A, § 507,52 Stat. 73; Aug. 1, 1947, ch 440, § 6, 61 Stat. 719;
Aug. 25, 1949, ch 512, § 10, 63 Stat. 665; June 6, 1972, P.L. 92-310, Title II, Part 2, § 221(b), 86 Stat.
201; Sept. 26, 1980, P.L. 96-365, Title I, § 104, 94 Stat. 1313; Nov. 28, 1990, P.L. 101-624, Title XXII,
Subtitle A, § 2206, 104 Stat. 3958; Dec. 13, 1991, P.L. 102-237, Title VI, § 601(3), 105 Stat. 1878; Oct.
13, 1994, P.L. 103-354, Title I, §§ 102(b)(4)(B), (C), 105, 115(b), 119(f)(2), 108 Stat. 3181, 3182, 3204,
3208; June 20, 2000, P.L. 106-224, Title I, Subtitle D, § 143, 114 Stat. 391; May 22, 2008, P.L. 110-234,
Title XII, Subtitle A, § 12033(c), 122 Stat. 1405; June 18, 2008, P.L. 110-246, § 4(a), Title XII, Subtitle
A, § 12033(c), 122 Stat. 1664, 2167.)
End of Document