Tuesday, March 04, 2008

Fourth Circuit issues opinion on standing

In NEESE v. JOHANNS, tobacco producers challenged the Secretary of Agriculture’s implementation of the Fair and Equitable Tobacco Reform Act of 2004 ("FETRA"). The Act authorized the Secretary to offer buy out contracts to tobacco producers who had previously operated under a fixed quota system, which had been in place since the late 1930s. The producers accepted a series of contracts for annual payments over the course of ten years and then assigned those contracts, and all accompanying rights, to third parties in exchange for a lump sum payment. After the assignment, the producers argued that the Secretary improperly calculated their contract payouts under FETRA and asserted an entitlement to additional payments. The Fourth Circuit affirmed the district court's decision that the producers lacked standing.

To have standing to bring this action, appellants must allege a "personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief." Allen v.Wright, 468 U.S. 737, 751 (1984). To satisfy the injury-in-fact element, a plaintiff must demonstrate "an invasion of a legally protected interest which is . . . concrete and particularized." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).

In this case, any claim to a specific sum of money must flow from the contractual relationship between the Secretary and the producer. See 7 U.S.C. § 518b(a) ("The Secretary shall offer to enter into a contract. . . under which the producer of quota tobacco shall be entitled to receive payments under this section . . . .") (emphasis added). Appellants, however, cannot maintain such a claim. After accepting the Secretary’s offer of payment contracts without reservation and entering into those contracts, they transferred all their rights under those contracts to third parties. Quite simply, appellants have no rights left to invoke and, therefore, lack standing to pursue further contracts or payments from the Secretary.

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