Miller v. Federation of Southern Coop ( 2022 )

Case: 21-11271 Document: 00516249606 Page: 1 Date Filed: 03/22/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
March 22, 2022
No. 21-11271 Lyle W. Cayce
Clerk
Sid Miller, on behalf of himself and others similarly situated; Greg
Macha; James Meek; Lorinda O'Shaughnessy; Jeff
Peters,
Plaintiffs—Appellees,
versus
Tom Vilsack, in his official capacity as Secretary of
Agriculture,
Defendant—Appellee,
versus
Federation of Southern Cooperatives/Land Assistance
Fund,
Movant—Appellant.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:21-CV-595
Before Southwick, Haynes, and Higginson, Circuit Judges.
Case: 21-11271 Document: 00516249606 Page: 2 Date Filed: 03/22/2022
No. 21-11271
Per Curiam:*
Appellant Federation of Southern Cooperatives (the “Federation”)
moved to intervene in a class action challenging the constitutionality of
§ 1005 of the American Rescue Plan Act of 2021 (“ARPA”), Pub. L. No. 117-
2, 135 Stat. 4. The district court denied the motion. For the following
reasons, we REVERSE and REMAND.
I. Background
The Secretary of the United States Department of Agriculture
(“USDA”) is authorized under § 1005 to “provide a payment in an amount
up to 120 percent of the outstanding indebtedness of each socially
disadvantaged farmer or rancher” to pay off the disadvantaged farmer or
rancher’s loans “made” or “guaranteed by the Secretary.” ARPA
§ 1005(a)(2), 135 Stat. at 12–13. The term “socially disadvantaged farmer or
rancher” (“SDFR”) is defined as “a farmer or rancher who is a member of
a socially disadvantaged group,” 7 U.S.C. § 2279(a)(5), which, in turn,
means that the members of the group “have been subjected to racial or ethnic
prejudice because of their identity as members of a group without regard to
their individual qualities,” id. § 2279(a)(6). Per USDA interpretation, SDFR
includes (but is not limited to): “American Indians or Alaskan Natives;
Asians; Blacks or African Americans; Native Hawaiians or other Pacific
Islanders; and Hispanics or Latinos.” Notice of Funds Availability;
American Rescue Plan Act of 2021 Section 1005 Loan Payment (ARPA), 86
Fed. Reg. 28,329, 28,330 (May 26, 2021).
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
2
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Sid Miller, a white farmer excluded from the SDFR designation (who
describes his ancestry as “overwhelmingly white”),1 filed a class action
lawsuit against the Secretary, claiming that USDA violated Title VI of the
Civil Rights Act of 1964 and the U.S. Constitution “by excluding individuals
and entities from the benefit of federal programs on the grounds of race,
color, and national origin.” The district court certified the class and granted
a preliminary injunction to enjoin the Secretary from administering § 1005.
The Federation, “a nonprofit cooperative association of Black
farmers, landowners, and cooperatives,” 2 filed a motion to intervene as a
defendant in this action. The organization argued it was entitled to
intervention as a matter of right under Federal Rule of Civil Procedure 24(a)
or, alternatively, permissive intervention under Rule 24(b). Both the
Secretary and Plaintiffs opposed the motion to intervene as a matter of right,
arguing that the Federation failed to show that the Government inadequately
represented the Federation’s interest. Only Plaintiffs opposed permissive
intervention.
The district court denied the Federation’s motion to intervene on
both grounds. Miller v. Vilsack, No. 4:21-CV-0595-O, 2021 WL 6129207, at
1
Miller is the Agriculture Commissioner for the State of Texas but stated in the
class action complaint that he is “suing in his capacity as a private citizen[] and not on
behalf of the State of Texas or the Texas Department of Agriculture.”
2
According to the Executive Director of the Federation, the organization “serves
its members through advocacy, technical assistance, and support services.” It is also a
“unique” organization “because it has a cooperative membership as well as a land
assistance fund.” Here, the Federation’s minority farmer members, who are § 1005
beneficiaries or applicants, seek to present evidence of ongoing and current discrimination
against them by USDA—the agency administering the loan assistance program at issue.
3
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*3 (N.D. Tex. Dec. 8, 2021).3 The Federation timely appealed, and we
granted the motion to expedite.
II. Jurisdiction and Standard of Review
The district court had jurisdiction under 28 U.S.C. §§ 1331,
1343(a)(3). As to the denial of the motion to intervene as a matter of right,
we have jurisdiction over this appeal under 28 U.S.C. § 1291 and review this
denial de novo, Edwards v. City of Houston, 78 F.3d 983, 992, 995 (5th Cir.
1996) (en banc). As to the denial of the permissive intervention motion, we
only have “provisional jurisdiction” and review for a clear abuse of
discretion. Id. at 992, 995. Under this deferential standard, we will reverse
the district court’s decision only if “extraordinary circumstances” are
present. St. Bernard Parish v. Lafarge N. Am., Inc., 914 F.3d 969, 973 (5th
Cir. 2019) (quotation omitted).
III. Discussion
On appeal, the Federation argues that the district court erred in
denying its motion to intervene based on intervention as a matter of right or
(alternatively) permissive intervention. We agree that the court erred in
denying intervention as a matter of right, mooting the permissive
intervention issue.
To prevail on a motion to intervene as a matter of right, an applicant
must meet four requirements:
(1) The application must be timely; (2) the applicant must have
an interest relating to the property or transaction that is the
subject of the action; (3) the applicant must be so situated that
3
Instead, the district court granted the Federation leave to file a brief as amicus
curiae. Miller, 2021 WL 6129207, at *3.
4
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the disposition of the action may, as a practical matter, impair
or impede its ability to protect its interest; and (4) the
applicant’s interest must be inadequately represented by the
existing parties to the suit.
Brumfield v. Dodd, 749 F.3d 339, 341 (5th Cir. 2014) (quotation omitted);
Fed. R. Civ. P. 24(a)(2). Nevertheless, a Rule 24(a) inquiry “is a flexible one,
which focuses on the particular facts and circumstances surrounding each
application . . . measured by a practical rather than technical yardstick.”
Entergy Gulf States La., L.L.C. v. EPA, 817 F.3d 198, 203 (5th Cir. 2016)
(quotation omitted). In line with this flexibility, we have held that “[f]ederal
courts should allow intervention where no one would be hurt and the greater
justice could be attained.” Texas v. United States, 805 F.3d 653, 657 (5th Cir.
2015) (quotation omitted). Therefore, even though “the movant bears the
burden of establishing its right to intervene, Rule 24 is to be liberally
construed,” id. at 656 (quotation omitted), “with doubts resolved in favor of
the proposed intervenor,” Entergy, 817 F.3d at 203 (internal quotation marks
and citation omitted).
Because the parties do not dispute that the Federation can meet the
first three prongs of the Rule 24(a) inquiry, we limit our analysis to the fourth
prong—whether the Federation’s interest is adequately represented by the
Secretary. We have held that “[t]he applicant has the burden of
demonstrating inadequate representation, but this burden is ‘minimal.’”
Sierra Club v. Espy, 18 F.3d 1202, 1207 (5th Cir. 1994). However, “it cannot
be treated as so minimal as to write the requirement completely out of the
rule.” Texas, 805 F.3d at 661 (quotation omitted). Therefore, we have
“created two presumptions of adequate representation that intervenors must
overcome in appropriate cases.” Id. (internal quotation marks and citation
omitted). The first presumption applies “when the would-be intervenor has
the same ultimate objective as a party to the lawsuit.” Id. (internal quotation
5
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marks and citation omitted). The second presumption applies in cases where
a party “is presumed to represent the interests of all of its citizens,” Hopwood
v. Texas, 21 F.3d 603, 605 (5th Cir. 1994) (per curiam), such as “when the
putative representative is a governmental body or officer charged by law with
representing the interests of the [intervenor],” Texas, 805 F.3d at 661
(quotation omitted). This presumption is limited, however, to “suits
involving matters of sovereign interest.” Edwards, 78 F.3d at 1005.
The district court did not explicitly mention these two presumptions,
but it noted that “where the party whose representation is said to be
inadequate is a governmental agency,” the necessary showing of inadequacy
needed to be “much stronger.” Miller, 2021 WL 6129207, at *2 (quotation
omitted). We disagree with this conclusion because the second presumption
is not in play in this case, so we need not apply it.4
Turning to the first presumption, in order to overcome it, “the
applicant for intervention must show adversity of interest, collusion, or
nonfeasance on the part of the existing party.” Texas, 805 F.3d at 661–62
(quotation omitted). Specifically, “to show adversity of interest, an
intervenor must demonstrate that its interests diverge from the putative
representative’s interests in a manner germane to the case.” Id. at 662.
4
Although Hopwood mentioned “governmental agency” in passing, it involved a
case against the State of Texas, not a governmental agency, thus the question of whether a
governmental agency can assert a “matter of sovereign interest” was not the issue. See 21
F.3d at 605. Such a question was in play in Entergy, which concluded that because the EPA
was “a governmental agency and not a sovereign interest,” the second presumption was
inapplicable. See 817 F.3d at 203 n.2. This case is more like Entergy; it involves assistance
with loans by a governmental agency, not a sovereign interest.
Given the lack of “sovereign interest” here, we need not address the exact
circumstances of when a “sovereign interest” might apply in all instances. Nor do we
address when (or if) a governmental agency might be implicated as a sovereign interest.
Instead, we simply conclude that Entergy’s holding applies to the analogous agency at issue
here.
6
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Undoubtedly, the Secretary and the Federation share the “same
ultimate objective”—upholding the constitutionality of § 1005. Therefore,
the relevant inquiry is whether the Federation can “show adversity of
interest” by demonstrating that its interests diverge from the Secretary’s “in
a manner germane to the case.” Id. We conclude that the Federation has
made such a showing.
Relevant here, the Secretary maintains that he has provided
“evidence of discrimination within the last decade” and discussed reports
“highlighting how past discrimination continues to disadvantage minority
farmers today.” However, the Federation is making a meaningfully different
argument. Instead of focusing on how past discrimination continues to have
“lingering effects,”5 the Federation argues that USDA is continuing to
actively discriminate against its members. Therefore, the Federation has an
interest in taking a position that not only directly conflicts with the Secretary’s
position, but also potentially exposes the agency to liability. That interest is
“germane to the case” because evidence of continued discrimination may be
highly relevant to proving a “compelling governmental interest.” See Wynn
v. Vilsack, 545 F. Supp. 3d 1271, 1275, 1279 (M.D. Fla. 2021) (describing, in
a § 1005 case, how “evidence of continued discrimination” may be
“crucial”). Yet, this argument is not one the Secretary can reasonably be
5
Indeed, the record demonstrates that the Secretary’s position is “not that the
USDA is continuing to discriminate against minorities”; rather past discrimination “has
led to . . . lingering effects” that work against minorities. Because the Secretary maintains
that the USDA is no longer discriminating against minorities, which is something the
Federation disputes, that is strong evidence that the two entities are “staking out a position
significantly different” from each other. See Brumfield, 749 F.3d at 346 (observing that the
government entity conceded an issue that the parent intervenors disagreed with).
7
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expected to adopt or support: a U.S. Secretary would likely heartily deny that
their agency is currently discriminating against people based upon race.6
In light of this adversity of interest, we conclude that the Federation
has successfully rebutted the first presumption. Given our “broad policy
favoring intervention,” we hold that the Federation has met its “minimal”
burden demonstrating inadequate representation (though we limit this
holding to the facts of this case). See Sierra Club, 18 F.3d at 1207 (quotation
omitted).7 We therefore REVERSE the district court’s denial of
intervention as a matter of right and REMAND with the directive to permit
the Federation’s intervention.
6
It also stands to reason that, if given the opportunity to conduct discovery as a
party, the Federation would seek evidence demonstrating current discrimination by the
USDA against its members. It is highly unlikely the Secretary would put forth such
evidence in the absence of the Federation’s intervention.
7
The Federation also argues that USDA letters sent to its members disclosing the
agency’s intent to accelerate the members’ loans demonstrate a divergence of interest.
Whether or not this evidence is germane to the case, as to the first presumption, it provides
additional support to overcome the Federation’s “minimal” burden. Sierra Club, 18 F.3d
at 1207 (quotation omitted).
8