Piala v. Farmers Home Admin., 94-3151
| Decision Date | 18 May 1995 |
| Docket Number | No. 94-3151,94-3151 |
| Citation | 54 F.3d 779 |
| Parties | NOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit. James M. PIALA, Plaintiff-Appellant, v. FARMERS HOME ADMINISTRATION, Defendant-Appellee, and Michael Bera and Helen Bera, Intervenors. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Before ALDISERT, * EASTERBROOK, and ROVNER, Circuit Judges.
James M. Piala and Michael Bera both applied to the Farmers Home Administration ("FmHA") for the privilege of purchasing a 242-acre farm located near Genesee Depot, Wisconsin. The County Committee, comprised of three local farmers who act as a branch of the federal agency, evaluated the applications of Piala and Bera, along with the twenty-one other applications it received, and selected Bera to purchase the farm. Piala exercised his right to seek a review of that decision by a hearing officer assigned by the FmHA National Appeals Staff. After taking testimony from Piala, Bera, and the supervisor of the County Committee, the hearing officer upheld the County Committee's decision. Piala then appealed to the FmHA State Director, who reviewed the record developed below and reversed the decision of the County Committee, awarding the right to purchase the farm to Piala. Bera took this decision to the FmHA's National Appeals Staff, which itself reviewed the record and reversed the decision of the State Director, reinstating the County Committee's selection of Bera as the purchaser of the property. Having exhausted all avenues for relief within the administrative agency, Piala filed this action in federal court pursuant to 5 U.S.C. Sec. 702. The district court refused to disturb the FmHA's final decision because it believed that the agency had followed the applicable regulations and had sufficiently considered the many arguments advanced by Piala in his federal complaint. Piala now appeals to this court, and we have jurisdiction pursuant to 5 U.S.C. Sec. 702 and 28 U.S.C. Sec. 1291. For the reasons set forth below, we affirm the district court's judgment dismissing Piala's complaint.
As the district court observed, review in federal court of decisions entrusted to administrative agencies is extremely deferential. We will set aside agency action only if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. Sec. 706(2)(A); see also Central States Enterprises, Inc. v. ICC, 780 F.2d 664, 673 (7th Cir. 1985). In applying this standard, we look to the administrative record already in existence, and we thus accord no deference to the district court's disposition of the matter. Hanson v. Espy, 8 F.3d 469, 472 (7th Cir. 1993). We focus primarily on whether the agency considered the relevant data and offered a satisfactory explanation for its action; we look only for a rational connection between the facts the agency found and the decision it made. Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Ins. Co., 463 U.S. 29, 43 (1983); Schneider Nat'l, Inc. v. ICC, 948 F.2d 338, 343 (7th Cir. 1991); Central States, 780 F.2d at 674. We are not permitted to reweigh the evidence or to substitute our own judgment for that of the administrative agency. Jancik v. HUD, 44 F.3d 553, 556 (7th Cir. 1995). 1
With this deferential standard of review in mind, our task in this case becomes a relatively simple one because Piala cannot contest that the FmHA considered the relevant factors under the regulations; he instead quarrels with how those factors were applied by the agency to the applications in this case. We begin, then, by briefly discussing the regulatory framework that guided the agency's decision.
When FmHA receives applications from "two or more eligible operators of not larger than family-sized farms, as of the time immediately after the contract of sale or lease is entered into," the local County Committee must make a selection between the qualified applicants. 7 C.F.R. Sec. 1955.107(e)(2). 2 The regulations direct the County Committee to look for the applicant who has "the greatest need for farm income and best meet[s] the criteria for eligibility for farm ownership loan assistance." Id. The criteria for farm ownership loan assistance include whether an applicant:
(1) [Is] a citizen of the United States ... or an alien lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act....
(2) Possess[es] the legal capacity to incur the obligations of the loan.
(3) [Has] sufficient applicable educational and/or on the job training or farming experience in managing and operating a farm or ranch (within 1 of the past 5 years) which indicates the managerial ability necessary to assure reasonable prospects of success in the proposed plan of operation.
(4) [Has] the character (emphasizing credit history, past record of debt repayment, and reliability) and industry to carry out the proposed operation....
(5) Honestly [tries] to carry out the conditions and terms of the loan.
(6) [Is] unable to obtain sufficient credit elsewhere to finance actual needs at reasonable rate and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time.
(7) [Is] the owner-operator of not larger than a family farm after the loan is closed ....
7 C.F.R. Sec. 1943.12(a). In evaluating these criteria and in assessing which applicant has the greatest need for farm income, the County Committee is to be guided by the underlying objective of FmHA's farm ownership loan program -- "to assist eligible applicants to become owner-operators of family farms, to make efficient use of land, labor and other resources, to carry on sound and successful operations on the farm and to enable farm families to have a reasonable standard of living." 7 C.F.R. Sec. 1980.180; see also 7 C.F.R. Sec. 1943.2.
It is clear to us, as it was to the district court, that the various arms of the FmHA applied the above regulations in a rational manner in the instant case. Piala and Bera were but two of twenty-three applicants for the right to purchase the 242-acre farm. Piala explained in his application that he and his wife owned an eighteen-acre nursery located less than two miles from the farm, that they had operated the nursery for twelve years, and that they were looking to purchase additional farmland to expand their existing operations. Piala expressed an intention to rent the four-bedroom house on the property to married employees of the nursery and to rent a separate portion of the property to a neighboring hunting club. Piala's financial statement showed a net worth of $695,183.35 and liabilities of $106,805.35.
Bera, meanwhile, explained in his application that he had grown up on a farm, that he had been a member of 4-H, and that he had served as Secretary of the local chapter of Future Farmers of America ("FFA"). Bera expressed a desire to own and to raise his family on a farm but indicated that he had not initially gone into farming because of the high start-up costs. He instead had procured a job as a systems analyst at a bank in Milwaukee. Bera's application detailed plans for the seventy-four acres of crop land, 152 acres of conservation area, and seven acres of homestead on the property. Bera intended to use his father's farming equipment in the beginning, but he recognized that future equipment purchases probably would be required. Bera's financial information reflected a net worth of $33,000 and liabilities of $4,000. Bera planned to use the property as his homestead and to raise his family there.
The three local farmers who comprised the County Committee reviewed the twenty-three applications and selected Bera as the purchaser of the property. The Committee advised Piala by letter that his application had not been accepted and provided three reasons: (1) the Pialas already owned a successful nursery and garden shop; (2) expansion was not necessary to provide for family living; and (3) the Pialas were not in the most need.
Piala then appealed to the National Appeals Staff, which appointed a hearing officer to conduct a hearing on Piala's administrative appeal. The hearing officer held a hearing on December 14, 1989, and testimony was offered by Piala and his wife, Bera and his fiance, and...
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