Kevin Gubbels and Insure My Honey, Inc. v. U.S. Department of Agriculture and U.S. Risk Management Agency

CASE SUMMARY

NCLA filed a complaint and a motion for preliminary injunction in the U.S. District Court for the District of Nebraska. The case, Kevin Gubbels and Insure My Honey, Inc. v. U.S. Department of Agriculture and U.S. Risk Management Agency, was filed against the U.S. Department of Agriculture (USDA), the U.S. Risk Management Agency (RMA), and the respective heads of those entities. Gubbels is contesting those agencies’ efforts to suspend and debar his participation in the federal crop insurance program without a hearing.

RMA’s action risks destroying a recently thriving business, and it has already put over 60 insurance agents out of work based on a hearsay complaint without giving the business a chance to contest the accusation at a hearing. Even if Mr. Gubbels is eventually granted a hearing, the process will be anything but fair, as the existing regulations consolidate the roles of both prosecutor and judge in the agency head. This in-house administrative adjudication makes a mockery of due process, and it has seriously threatened Mr. Gubbels’s livelihood.

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CASE STATUS: Active

CASE START DATE: June 1, 2020

DECIDING COURT: The U.S. District Court for the District of Nebraska

ORIGINAL COURT: The U.S. District Court for the District of Nebraska

CASE DOCUMENTS

November 23, 2020 | Memorandum and Order of the United States District Court for the District of Nebraska
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July 17, 2020 | Plaintiffs’ Brief in Opposition to Defendants’ Motion to Dismiss and for Summary Judgment, and Reply in Support of Plaintiffs’ Motion for Preliminary Injunction
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June 1, 2020 | Complaint for Declaratory and Injunctive Relief
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June 1, 2020 | Plaintiffs’ Brief in Support of Motion for Preliminary Injunction
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PRESS RELEASES

July 17, 2020 | NCLA Suit Challenges Lack of Due Process Hearing in Suspension from USDA Crop Insurance Program

Washington, DC (June 17, 2020) – The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, today filed a brief in opposition to the Motion to Dismiss submitted by the Department of Agriculture (USDA), the U.S. Risk Management Agency (RMA), and the respective heads of those entities. NCLA clients Kevin Gubbels and Insure My Honey, Inc. are contesting the efforts of the agencies to summarily and indefinitely suspend his participation and that of his company’s insurance agents in the federal crop insurance program without due process. The brief asks the U.S. District Court for the District of Nebraska to reject the agencies’ demands to dismiss the case and to instead grant Mr. Gubbels’s request for a preliminary injunction.

The government has taken the position that the federal court cannot hear any challenge to its suspension procedure until it finalizes its action against Mr. Gubbels. In challenging that allegation, NCLA has pointed out that the federal court has subject-matter jurisdiction over all of Mr. Gubbels’s claims. It also states that the agency has violated his constitutional rights, and it cannot sidestep judicial oversight by refusing to provide Gubbels with the hearing that he is due, the right to confront witnesses, and the right to defend himself in the stalled agency proceeding. Every month that goes by further increases damage to Mr. Gubbels from his suspension.  So, as USDA drags out the administrative process, delay itself becomes a severe punishment.

The USDA and the RMA did not follow their own regulations or comply with basic constitutional protections before imposing their suspension order against Mr. Gubbels. They first failed to provide adequate notice of specific charges against him. While admitting that Mr. Gubbels is entitled to a full evidentiary hearing to challenge a “temporary” suspension order, they have so far refused to confirm if and when they will grant him the hearing. To make matters worse, RMA Administrator Martin Barbre, who would oversee any hearing, has already shown that he is unable to be an impartial adjudicator.

This situation started in November 2019 when an anonymous accuser told RMA (the agency that administers crop insurance) that Mr. Gubbels was selling crop insurance policies after the deadline and misrepresenting the program. USDA, acting through RMA, indefinitely suspended Mr. Gubbels, unlawfully claimed the authority to also suspend Insure My Honey, Inc., and suspended all of the independent contractor insurance agents from participating in the company’s business of selling and servicing federal crop insurance policies.

Mr. Gubbels has remained in suspension for nearly five months with no chance to clear his name. USDA’s unwillingness to provide Mr. Gubbels a hearing to dispute all of the charges requires federal court intervention.

NCLA released the following statements:

“The Constitution protects Mr. Gubbels’s rights regardless of whether federal agencies and administrators play games by claiming that they will eventually provide due process, while also refusing to actually move forward with a hearing.  Lip service does not satisfy the mandates of the 5th Amendment to the United States Constitution.  Empty promises are no substitute for due process of law.”

—Harriet Hageman, Senior Litigation Counsel, NCLA

“Even though it has indefinitely shuttered Mr. Gubbels’s business, cost him millions of dollars in lost revenue, ruined his reputation, and threatened the livelihoods of more than 60 people who work with him, USDA has argued in court that a federal judge lacks any power to right the wrongs inflicted on Mr. Gubbels. This case provides the court an opportunity to remind agencies like USDA that they must comply with the Constitution.”

—Caleb Kruckenberg, Litigation Counsel, NCLA

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

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June 2, 2020 | NCLA Takes USDA to Task over Unlawful Agency Adjudication Procedures that Violate Civil Libertie

Washington, DC (June 2, 2020) – The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, has filed a complaint and a motion for preliminary injunction in the U.S. District Court for the District of Nebraska. The case, Kevin Gubbels and Insure My Honey, Inc. v. U.S. Department of Agriculture and U.S. Risk Management Agency, was filed against the U.S. Department of Agriculture (USDA), the U.S. Risk Management Agency (RMA), and the respective heads of those entities. Gubbels is contesting those agencies’ efforts to suspend and debar his participation in the federal crop insurance program without a hearing.

RMA’s action risks destroying a recently thriving business, and it has already put over 60 insurance agents out of work based on a hearsay complaint without giving the business a chance to contest the accusation at a hearing. Even if Mr. Gubbels is eventually granted a hearing, the process will be anything but fair, as the existing regulations consolidate the roles of both prosecutor and judge in the agency head. This in-house administrative adjudication makes a mockery of due process, and it has seriously threatened Mr. Gubbels’s livelihood.

In November 2019, an unknown tipster told RMA (the agency that administers the crop insurance program) that Mr. Gubbels was selling crop insurance policies after the deadline for doing so. USDA, acting through RMA, indefinitely suspended Mr. Gubbels, unlawfully claimed the authority to suspend Insure My Honey, Inc.—which is a distinct corporate entity, and suspended all of the independent contractor insurance agents from participating in the company’s business of selling and servicing federal crop insurance policies.

But these agencies did not follow their own regulations or comply with basic constitutional protections before imposing the order. First, they failed to provide adequate notice of specific charges against Mr. Gubbels that could serve as a lawful basis for that suspension and proposed debarment. Second, the agency has allowed a temporary “suspension” order to linger for months without providing Mr. Gubbels a hearing to contest the charge. These actions have shut down his business, and that of his insurance agents, with no due process.

Every day the suspension lingers, the financial damage increases. Administrator Barbre has already shown his unwillingness to be an impartial adjudicator. Mr. Gubbels has already been presumed guilty and has never been given the chance to clear his name. Not only does this action violate the applicable regulations, it violates the outer limits of procedural due process.

NCLA released the following statements:

“There is a reason that we have constitutional procedures in place to protect the rights of individuals and small businesses who contract with the government to provide important services to our agriculture community. It is to prevent federal employees from arbitrarily destroying their livelihood while also blocking them from defending themselves. Mr. Gubbels is entitled to tell his side of the story, regardless of whether USDA and the Risk Management Agency want to hear it.”

—Harriet Hageman, Senior Litigation Counsel, NCLA

“A bureaucrat shouldn’t have the power to arbitrarily shut down a thriving business. That’s what due process is supposed to protect against. This lawsuit will ensure that ‘agency adjudication’ can no longer be code for depriving people of basic liberties.”

—Caleb Kruckenberg, Litigation Counsel, NCLA

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

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