B & D Land and Livestock Co. v. Schafer

• Decision Date: 05 November 2008
• Docket Number: No. C 07-3070-MWB.,C 07-3070-MWB.
• Citation: 584 F.Supp.2d 1182
• Parties: B & D LAND AND LIVESTOCK CO., an Iowa corporation, Plaintiff, v. Ed SCHAFER, Secretary, United States Department of Agriculture, Defendant.
• Court: U.S. District Court — Northern District of Iowa

584 F.Supp.2d 1182

B & D LAND AND LIVESTOCK CO., an Iowa corporation, Plaintiff, v. Ed SCHAFER, Secretary, United States Department of Agriculture, Defendant.

No. C 07-3070-MWB.

United States District Court, N.D. Iowa, Central Division.

November 5, 2008.

Thomas A. Lawler, Lawler & Swanson, PLC, Parkersburg, IA, for Plaintiff.

Martha A. Fagg, U.S. Attorney's Office, Sioux City, IA, for Defendant.

MEMORANDUM OPINION AND ORDER REGARDING JUDICIAL REVIEW OF FINAL AGENCY ACTION

MARK W. BENNETT, District Judge.

                TABLE OF CONTENTS
                I. INTRODUCTION............................................................. 1183
                   A. Procedural Background................................................. 1183
                     1. The parties and their dispute ...................................... 1183
                     2. Prior litigation.................................................... 1184
                

                3. The USDA's decision now at issue.................................... 1185
                     4. The present action.................................................. 1185
                   B. Facts Established By The Administrative Record........................ 1186
                     1. The tract in question............................................... 1186
                     2. The parties' renewed investigations................................. 1187
                     3. The Hearing Officer's decision...................................... 1189
                II. LEGAL ANALYSIS ......................................................... 1190
                   A. Federal Protection Of Wetlands........................................ 1190
                   B. Standards For Judicial Review......................................... 1190
                   C. Application Of The Judicial Review Standards.......................... 1191
                     1. Arguments of the parties............................................ 1191
                       a. B & D's argument.................................................. 1191
                       b. The USDA's response............................................... 1192
                       c. B & D's reply..................................................... 1193
                     2. The definitions of a "wetland"...................................... 1194
                       a. The statutory definition.......................................... 1194
                       b. The regulatory definition......................................... 1196
                     3. Review of the Hearing Officer's decision............................ 1198
                       a. Conflation of statutory requirements.............................. 1198
                       b. Disregard of pertinent "saturation" evidence...................... 1199
                       c. Disregard of evidence that wetland hydrology had been
                removed............................................................ 1200
                         i. The drainage tile issue.........................................1200
                         ii. The adjacent disturbance issue.................................1201
                       d. Summary...........................................................1202
                   D. The Appropriate Relief................................................1202
                III. CONCLUSION.............................................................1203
                

This is an action for judicial review of a final agency determination by the United States Department of Agriculture (USDA) that the plaintiff farmer has improperly "converted" certain "wetland" in violation of the "Swampbuster" Act, 16 U.S.C. §§ 3801, 3821-24. The farmer contends that the USDA's "wetland" determination is arbitrary and capricious, because the USDA improperly conflated the three statutory requirements for a "wetland" into two, eliminating the requirement of wetland hydrology by looking only at the presence of hydric soils and hydrophytic vegetation on the land in question, and ignoring all evidence that the wetland hydrology was eliminated in one area by a tile drainage system and disturbed in another area by an adjacent county road and drainage ditch. The USDA, however, asserts that it made a proper "expert" determination of the presence of "wetlands" on the tract in question and that the evidence to which the farmer points is either irrelevant to the statutory definition of wetlands or is not credible. Thus, the USDA staunchly maintains that the certified wetlands determination that it originally made in 1999 is still correct, notwithstanding the farmer's equally staunch challenges to that determination through three separate actions for judicial review.

I. INTRODUCTION

A. Procedural Background

1. The parties and their dispute

The plaintiff in this action, B & D Land and Livestock Company,¹ is an Iowa corporation with its registered agent living in Franklin County, Iowa. The defendant is Ed Schafer, the Secretary of the USDA.²

B & D alleges, and the Secretary does not dispute, that the Secretary of the USDA is ultimately responsible for the final agency actions of the USDA at issue in this case.

B & D owns real estate in Cerro Gordo County, Iowa, that is operated as a farm producing # 2 yellow corn and soybeans. The farm includes land identified as Section 32, Owen Township, Cerro Gordo County, Iowa, labeled by the USDA as Farm Number f2091, tract number t1653. B & D purchased t1653 in 1997. The USDA determined in 1999 that t1653 contains "wetlands," and subsequently determined that B & D had improperly "converted" 0.9 acres of those "wetlands" in 2000 to make possible the production of agricultural commodities on that land in violation of the "Swampbuster" Act, 16 U.S.C. §§ 3801, 3821-24. The consequences of such a determination include B & D's ineligibility for USDA farm program benefits. B & D disputes the USDA's "wetlands" determination and, hence, disputes the USDA's "conversion" determination as to some of those "wetlands."

2. Prior litigation

This action is the third one arising from the USDA's determination that B & D "converted" certain "wetland" on t1653 in 2000. B & D filed its first action for judicial review on July 10, 2002, disputing the USDA's determination that B & D had "converted" 0.9 acres of "wetland" on t1653. See B & D Land and Livestock Co. v. Veneman, No. C 02-3051-MWB (N.D.Iowa). In that action, by order dated November 15, 2002, the court "preliminarily enjoin[ed] [the Secretary of the USDA] from pursuing, instituting, continuing, or completing any and all enforcement actions, including, but not limited to, certification of the ineligibility of the plaintiff or any of its shareholders for farm program benefits pursuant to the Food Security Act, 16 U.S.C. §§ 3821-3824, as amended, until such time as th[e] preliminary injunction is dissolved or vacated, by this court or a reviewing court." B & D Land and Livestock Co. v. Veneman, 231 F.Supp.2d 895, 914 (N.D.Iowa 2002) (B & D I). Following the court's entry of the preliminary injunction, the court remanded B & D's first judicial review action, at the USDA's request, for further review upon a complete record. B & D Land and Livestock Co. v. Veneman, No. C 02-3051-MWB, slip op. (N.D.Iowa Jan. 18, 2003).

After remand, however, the USDA determined that it would stand upon its prior determination that B & D had "converted" certain "wetland" in 2000 and its further determination that B & D was not entitled to equitable relief from the consequences of such a "conversion." Therefore, B & D brought a second action for judicial review on September 30, 2003, B & D Land and Livestock Co. v. Veneman, No. C 03-3086-MWB (N.D.Iowa). B & D did not seek a preliminary injunction on enforcement action by the USDA during the pendency of its second action for judicial review, however, because the USDA took no enforcement action during the pendency of that action. On August 17, 2004, the court rendered its decision in B & D's second action for judicial review. B & D Land and Livestock Co. v. Veneman, 332 F.Supp.2d 1200 (N.D.Iowa 2004) (B & D II). In its order, the court found and declared "that the 1999 wetland determination was subject to `appeal' in the administrative proceedings concerning B & D's purported wetland `conversion' violation, and the agency's final determination to the contrary was arbitrary and capricious, an abuse of discretion, and contrary to law." B & D II, 332 F.Supp.2d at 1216. The court held, further, that "the Director Review Determination as to Tract # 1653 is vacated in its entirety and this case is remanded for agency action in conformity with the court's judgment." Id.

3. The USDA's decision now at issue

The parties engaged in further administrative proceedings pursuant to the court's second remand order. The results of those proceedings left B & D no happier than the prior agency determinations had, however. By letter dated January 22, 2007, Richard Van Klaveren, State Conservationist for the National Resources Conservation Service (NRCS), a department of the USDA, notified B & D that the NRCS had fully re-examined the sites in question and the records and had determined that the certified wetland determinations conducted in 1999 were correct and, furthermore, that B & D's removal of woody vegetation in 2000 was a "conversion" of 0.9 acres of "wetland." The NRCS decision was based on a November 9, 2006, highly erodible land and wetland conservation determination completed by Tony Moore, designated conservationist. The NRCS letter stated, further, that the NRCS had found no applicable exemptions for conversion of the wetland in question.

B & D appealed the November 9, 2006, wetland determination to the National Appeals Division (NAD) of the USDA. The NAD Hearing Officer, Michael R. Stewart (the Hearing Officer), held an evidentiary appeal hearing on B & D's appeal on June 27, 2007, in Mason City, Iowa. Following that hearing, in a decision dated August 30, 2007, the Hearing Officer upheld the agency's November 9, 2006, wetland conservation determination. Neither party sought a director's review of the Hearing Officer's decision. Therefore, the Hearing Officer's decision constitutes final administrative action by the Secretary of the USDA.

4. The present action

B & D now seeks judicial review of the Hearing...