Aageson Grain & Cattle v. U.S. Dept.
| Citation | 500 F.3d 1038 |
| Decision Date | 31 August 2007 |
| Docket Number | No. 05-36172.,05-36172. |
| Parties | AAGESON GRAIN & CATTLE; R Land, Inc.; Fairchild Farms, Inc., Plaintiffs-Appellees, v. UNITED STATES DEPARTMENT OF AGRICULTURE, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Beth Angus Baumstark (argued), Sarah Voegl Law Firm, P.C., Bismarck, ND, and Floyd D. Corder, Corder & Allen, Great Falls, MT, for appellees Aageson Grain & Cattle, et. al.
Appeal from the United States District Court for the District of Montana; Sam E. Haddon, District Judge, Presiding. D.C. No. CV-05-00022-SEH.
Before: WILLIAM C. CANBY, JR., CYNTHIA HOLCOMB HALL, and CONSUELO M. CALLAHAN, Circuit Judges.
The United States Department of Agriculture ("USDA") appeals the district court's order remanding this case to the National Appeals Division ("NAD") of the USDA to determine eligibility for an attorney's fees and costs award under the Equal Access to Justice Act ("EAJA"). The farmers prevailed in their appeals before the NAD challenging their local Farm Service Agency's ("FSA") denials of claims under the 2003 Noninsured Crop Disaster Assistance Program ("NAP"). They then applied for attorney's fees under the EAJA, which the NAD denied on the ground that the EAJA is inapplicable to NAD proceedings. The farmers filed a petition for judicial review, and the district court ruled that the EAJA applies to NAD proceedings and remanded.
We affirm the judgment of the district court.
Between March 17, 2004 and May 19, 2004, the Montana FSA denied the 2003 Noninsured Crop Disaster Assistance Program claims of Fairchild Farms, Inc., Aageson Grain and Cattle, and R Land, Inc. because it was Montana's policy that all perennial grasses were not covered during their first year. Each farm filed appeals with the NAD. The NAD consolidated their appeals for a hearing on October 27 and 28, 2004. At the hearing, the FSA was represented by two program specialists from the Montana FSA, Leonard McArthur, and Patricia Soares. On November 26, 2004, the Hearing Officer issued his decision overturning the FSA's denial of benefits to the farmers, concluding that the Montana policy "goes beyond being over-restrictive and actually avoids the requirement for NAP coverage." The FSA did not request review by the Director of the NAD, making the Hearing Officer's decision final on January 11, 2005.
The farms applied for an award of attorney's fees and expenses under the EAJA totaling $17,943.84. The NAD refused to consider the application, stating that
The farmers filed a petition for judicial review and both the farmers and the USDA filed cross-motions for summary judgment. The district court granted the farmers' motion for summary judgment, concluding that the NAD proceeding was an "adversary adjudication" under 5 U.S.C. § 504(a)(1) (2000). After entering judgment, the district court ordered the case remanded to the NAD for a determination of the proper attorney's fee and costs awards under the EAJA.
Although the district court ordered a remand, for the purposes of this appeal, the district court's order was a final order under 28 U.S.C. § 1291 because "it determined a separable legal issue" of whether the EAJA applies. Collord v. Dep't. of Interior, 154 F.3d 933, 935 (9th Cir.1998). Also, if the district court was wrong, its order would "result in a wasted proceeding applying an erroneous rule of law" and "review of the applicability of the EAJA to the proceeding might be foreclosed." Id.
This court reviews the district court's decision on the cross-motions for summary judgment de novo. Parravano v. Babbitt, 70 F.3d 539, 543 (9th Cir.1995). "On appeal from the District Court, we review the NAD's decision de novo, and will uphold it unless we find it to be `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'" Deaf Smith Cty. Grain Processors, Inc. v. Glickman, 162 F.3d 1206, 1213 (D.C.Cir. 1998) (internal citations omitted).
The sole issue in this case is whether the EAJA applies to administrative hearings before the NAD. The USDA contends that a proceeding before the NAD is not held "under" the Administrative Procedure Act ("APA"), therefore the EAJA does not entitle the farmers to attorney's fees. The district court followed the Eighth Circuit's decision in Lane v. USDA, 120 F.3d 106, 108 (8th Cir.1997), and found that the EAJA applied to proceeding before the NAD.
The EAJA states:
Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A). The EAJA is made applicable to administrative adjudications through section 504 of the Administrative Procedure Act ("APA"), which states in relevant part:
An agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust.
5 U.S.C. § 504(a)(1). The APA defines an adversary adjudication as "an adjudication under section 554 of this title in which the position of the United States is represented by counsel or otherwise."1 5 U.S.C. § 504(b)(1)(C).
Section 554 of the APA applies "in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing."2 5 U.S.C. § 554(a). A proceeding is "under" § 554 if it is "subject to" or "governed by" that "section." Ardestani v. INS, 502 U.S. 129, 135, 112 S.Ct. 515, 116 L.Ed.2d 496 (1991) (internal quotation marks and punctuation omitted). "Section 554 does not merely describe a type of agency proceeding; it also prescribes that certain procedures be followed in the adjudications that fall within its scope." Id. at 136, 112 S.Ct. 515.
The NAD is the statutorily created means of appealing the administrative decisions of officers, employees, or committees of the USDA. See 7 U.S.C. §§ 6992-7002. Congress created the NAD in its current form as part of the reorganization of the USDA in 1994. See Deaf Smith Cty., 162 F.3d at 1212-1213 (). Within ten (10) working days after an adverse decision by the USDA, the agency must provide "written notice of such adverse decision and the rights available to the participant under this subchapter or other law for the review of such adverse decision." 7 U.S.C. § 6994. Section 6996 states that "a participant shall have the right to appeal an adverse decision to the Division for an evidentiary hearing by a hearing officer consistent with section 6997 of this title." 7 U.S.C. § 6996(a).
The requirements for conducting an NAD hearing are controlled by § 6997(c), which provides:
(1) Location
A hearing on an adverse decision shall be held in the State of residence of the appellant or at a location that is otherwise convenient to the appellant and the Division.
(2) Evidentiary hearing
The evidentiary hearing before a hearing officer shall be in person, unless the appellant agrees to a hearing by telephone or by a review of the case record. The hearing officer shall not be bound by previous findings of fact by the agency in making a determination.
(3) Information at hearing
The hearing officer shall consider information presented at the hearing without regard to whether the evidence was known to the agency officer, employee, or committee making the adverse decision at the time the adverse decision was made. The hearing officer shall leave the record open after the hearing for a reasonable period of time to allow the submission of information by the appellant or the agency after the hearing to the extent necessary to respond to new facts, information, arguments, or evidence presented or raised by the agency or appellant.
(4) Burden of proof
The appellant shall bear the burden of proving that the adverse decision of the agency was erroneous.
The parties to an NAD proceeding may appeal the determination to the Director. 7 U.S.C. § 6998(a). Upon a timely request, "[t]he Director shall conduct a review of the determination of the hearing officer using the case record, the record from the evidentiary hearing under section 6997 of this title, the request for review, and such other arguments or information as may be accepted by the Director." 7 U.S.C. § 6998(b). Once an agency determination becomes final, it "shall be reviewable and enforceable by any United States district court of competent jurisdiction in accordance with chapter 7 of title 5." 7 U.S.C. § 6999.
The USDA argues that the farmer's contest of the denial of benefits under the Disaster Assistance Program before the NAD was not an "adversary...
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