Farm Sues USDA for Voiding its Crop Insurance Policy

On Friday, Froerer Farms, Inc. filed a complaint against the United States Department of Agriculture (USDA) and the Federal Crop Insurance Corporation (FCIC) alleging that the USDA and FCIC arbitrarily and capriciously interpreted internal handbooks to deny Froerer Farm’s crop insurance claim. 

The FCIC administers the Federal Crop Insurance Act, which was passed in 1938 “to protect farmers from vagaries of the market and nature and to encourage innovation.” As an administrator of the Federal Crop Insurance Act, the FCIC and the Risk Management Agency of the USDA have authorized several insurance providers to issue policies under terms and conditions approved by the FCIC, the complaint explained.

Froerer Farms purchased crop insurance from Hudson Insurance Company, a provider approved by the FCIC, through Chase Froerer. The complaint alleges that in 2016 Froerer Farms authorized Chase Froerer to purchase crop insurance through a corporate resolution and a power of attorney allowing him to purchase and apply for crop insurance. 

The complaint states that in 2019, after faithfully paying premiums on the crop insurance and submitting all required reports and obligations under the policy, Froerer Farms submitted a claim for loss of revenue to Hudson. The complaint alleges that on June 17, 2019, Hudson rejected the claim stating that the power of attorney had not authorized Chase Froerer to execute the crop insurance application and that the policy was retroactively void. 

Froerer subsequently initiated arbitration against Hudson seeking a determination from the FCIC interpreting the policy and related regulations. Further, Froerer Farms states that it executed an other power of attorney retroactively authorizing Chase Froerer “to negotiate, acquire and manage all matters involving insurance policies” for Froerer Farms.  

The complaint states that despite the corporate resolution and the two power of attorneys the FCIC interpreted the policy and its internal handbook in favor of Hudson allowing it to void the policy. Froerer argues that the FCIC’s interpretation was erroneous, arbitrary and capricious and runs counter to the evidence before the agency. 

Accordingly, Froerer Farms filed the present lawsuit requesting that the court reverse the FCIC interpretation and declare its policy through Hudson valid and effective.  Froerer Farms is represented by Butler & Looney, P.C. and Arnold & Jacobwitz PLLC.