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When Dealing With an Unlicensed Crop Insurance Agent, Recent Court Ruling Finds Agent Did Not Violat

Updated: Jul 2, 2020

Tractor pulling a cultipacker across a field.

This post is not a substitute for legal advice.

Recently, the U.S. Fifth Circuit Court of Appeals upheld the dismissal of a farming couple’s complaint against their unlicensed crop insurance agent. The Shannons, the producers in this case, had filed a lawsuit in federal court seeking damages against their crop insurance agent. The Shannons sought damages under the Racketeer Influenced and Corrupt Organizations Act (RICO). A federal district court dismissed the Shannons’ RICO claims, saying those claims did not cause the Shannons’ injuries. To the court, the mishandling of the Shannons’ claims was more likely due to other causes than to the crop insurance agent being unlicensed.

Before we discuss the case, let’s talk about RICO, the act the Shannons claimed their crop insurance agent violated. RICO was passed in 1970 to combat organized crime and provide criminal and civil liabilities for racketeering activities. The “racketeering activity” we are concerned about is mail and wire fraud, or depriving someone of honest services through fraudulent services through the mail or wire services. That was the focus of the Shannons’ RICO claims.

Al Capone

Looking at the RICO claims, the Shannons needed to show the RICO offense (mail and wire fraud) was the proximate cause of their injury. Remember that proximate cause is when an event is related to a legally recognized injury considered the cause of the damage. For an overview of proximate cause, see my previous post (

In the court’s eyes, the Shannons had failed to prove proximate cause. According to the record, the crop insurance agent had been unlicensed for seven years, starting when the Shannons’ bought their first coverage in 2004. The injuries occurred in 2011 and 2012 when the crop insurance agent had mishandled the Shannons’ policies and claims, costing them over $200,000. According to the court, mishandling claims in two years was not enough to demonstrate proximate cause. If being unlicensed was the proximate cause, then the damages should have begun showing in 2004 and not 2011. The Fifth Circuit upheld the dismissal of the Shannons’ RICO claims for failure to show proximate cause.

What is left for the Shannons in this case? This ruling does not end their case, and the trial court will still have to look at other claims, including negligence, contract claims, and violations of state law. Traditional claims such as these, also pleaded by the Shannons, are ones you will utilize when claiming a crop insurance agent (licensed or unlicensed) mishandled your policies.

This case will continue to play out in court, and we will have to keep an eye on it to see how the court handles the traditional claims. If you have other questions on crop insurance, see the Crop Insurance page ( on the Department of Agricultural and Resource Economics website and the Crop Insurance page ( on the University of Maryland Extension’s Grain Marketing website.


Shannon v. Ham, No. 15-10483, 2016 WL 556370 (5th Cir. Feb. 11, 2016).

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