DL Farms LLC v. United States Department of Agriculture et al

1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
DL Farms LLC,
Plaintiff and
Counter-Defendant,
vs.
United States Department of Agriculture,
Federal Crop Insurance Corporation, and
Risk Management Agency,
Defendants and
Counterclaimants.
ORDER
Case No. 3:21-cv-144
As noted in the Court’s prior order (Doc. No. 29), this case presents with a highly unusual
procedural posture, as it involves a complaint seeking judicial review of an administrative action
related to DL Farms’ 2019 crop insurance, and a counterclaim from the United States, along with
a jury demand, alleging separate False Claims Act violations against DL Farms (and Darren
Tronson, if joined as a party) in 2017 and 2018. The Court previously denied DL Farms’ motion
to dismiss counterclaim. Id. The Court reserved ruling on DL Farms’ motion to strike (Doc. No.
20) and the United States’ motion to join party (Doc. No. 13) pending review of the supplemental
briefing regarding whether allowing the counterclaim to proceed would unduly complicate the
administrative action. Both parties filed timely supplemental briefs. Doc. Nos. 30, 32.
Having fully considered the supplemental briefing and the positions of the parties, the
Court remains quite concerned that allowing the United States’ counterclaim to proceed unduly
complicates the administrative action, which is an appeal of an agency decision with a closed
record. Specifically, the Court is concerned with the segregation of the filings and arguments
between the administrative action, on the one hand, and the traditional litigation necessitated by
Case 3:21-cv-00144-PDW-ARS Document 33 Filed 06/17/22 Page 1 of 3

2
the False Claims Act allegations in the counterclaim, on the other. The difficulty in segregating
the record presents an obvious issue should either party choose to appeal the ultimate decisions.
The segregation issue also gives rise to the threat of consideration of material outside the
administrative record in DL farms’ initial complaint seeking judicial review of the administrative
agency decision. Notably too, based on the Court’s research, permissive counterclaims to
administrative actions typically involve a counterclaim relating to attorney fees, which is not the
case here. See e.g., Taylor P. ex rel. Chris P. v. Missouri Dep’t. of Elementary & Secondary Educ.,
No. 06-4254-CV-C-NKL, 2007 WL 869502, at *8 (W.D. Mo. Mar. 20, 2007)
“[T]he court has discretion to refuse to entertain any counterclaim, when allowing it would
unduly complicate the litigation.” 6 Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1420 (3d ed. 2017). Additionally, the Eighth Circuit has found that district court’s
enjoy significant discretion with respect to docket management. Burgett v. Snow, 175 F. App’x
787, 787–88 (8th Cir. 2006); see Griffin v. Super Valu, 218 F.3d 869, 870 (8th Cir. 2000). Further,
there is wide agreement among the federal courts that district judges have broad discretion in
managing their dockets. United States v. Hildebrand, 928 F. Supp. 841, 844 (N.D. Iowa 1996)
(May 30, 1996) (collecting cases). Given the potential for the issues noted above, the Court
believes allowing the counterclaim to proceed would unduly complicate the administrative action.
Accordingly, in exercising its broad discretion, the Court grants the motion to strike the
counterclaim. This Court takes no position on the merits of the counterclaim and notes that the
claims alleged may be brought in a separately filed action.
Case 3:21-cv-00144-PDW-ARS Document 33 Filed 06/17/22 Page 2 of 3

3
III. CONCLUSION
For the reasons provided above, DL Farms’ motion to strike counterclaim (Doc. No. 20) is
GRANTED. As a result, the Court FINDS AS MOOT the United States’ motion to join party
(Doc. No. 13).
IT IS SO ORDERED.
Dated this 17th day of June, 2022.
/s/ Peter D. Welte
Peter D. Welte, Chief Judge
United States District Court
Case 3:21-cv-00144-PDW-ARS Document 33 Filed 06/17/22 Page 3 of 3