Ballanger v. Johanns
| Decision Date | 15 September 2006 |
| Docket Number | No. 4:05-cv-00491.,4:05-cv-00491. |
| Citation | 451 F.Supp.2d 1061 |
| Parties | John BALLANGER, Jr., Plaintiff, v. Mike JOHANNS, Secretary of the United States Department of Agriculture, Defendant. |
| Court | U.S. District Court — Southern District of Iowa |
Thomas A. Lawler, Lawler & Swanson, PLC, Parkersburg, IA, for Plaintiff.
Gary L. Hayward, United States Attorney, Des Moines, IA, for Defendant.
Plaintiff, John Ballanger, Jr. ("Ballanger"), seeks judicial review of the United States Department of Agriculture's ("USDA" or "Agency") decision that he converted a wetland for agricultural use under 16 U.S.C. §§ 3801, 3821-24, making him ineligible for certain federal benefits. Ballanger appeals a decision issued on May 17, 2005 by M. Terry Johnson, Deputy Director of the USDA National Appeals Division ("AND"). In that decision, Johnson upheld Hearing Officer B. Dale Hicks' March 23, 2005 decision finding: (1) that Ballanger converted wetland; (2) that the Agency did not have to conduct a study to determine if the removal of woody vegetation impaired water flow; (3) that Ballanger was no longer eligible for USDA benefits; and (4) that Ballanger had to refund USDA benefits he had improperly received in an amount totaling $40,316.23.
Ballanger filed a Complaint (Clerk's No. 1) in this Court on August 25, 2005, and the Agency filed an Answer (Clerk's No. 4) on November 1, 2005. Ballanger filed a brief (Clerk's No. 15) on June 6, 2006, and the Agency filed a brief (Clerk's No. 17) on July 19, 2006. Ballanger filed a reply brief (Clerk's No. 19) on July 28, 2006. The matter is fully submitted.
Ballanger resides in Appanoose County, Iowa and owns a farm, Serial Number 1770, in Schuyler County, Missouri. Compl. ¶ 4; see also Admin. Rec. 5. The record indicates that the United States Department of Agriculture Natural Resource Conservation Service ("NRCS") conducted three inspections of Ballanger's land between April 2002 and December 2003. The inspections were aimed at determining whether Ballanger converted a wetland under the "Swampbuster" provisions of the Food Security Act of 1985, 16 U.S.C. §§ 3801, 3821-24, a law that "denies eligibility for several federal farm-assistance programs if wetlands are converted to agricultural use." Barthel v. United States Dep't of Ag., 181 F.3d 934, 936 (8th Cir.1999); see also Gunn v. United States Dep't of Ag., 118 F.3d 1233, 1235 (8th Cir.1997); Downer v. United States Dep't of Ag. and Soil Cons. Serv., 97 F.3d 999, 1002 (8th Cir.1996). The provisions do not make the conversion of wetland illegal, but instead provide that a farmer who converts a wetland forfeits eligibility for a number of federal farm assistance programs. Gunn, 118 F.3d at 1235.
First, in response to a possible violation, the NRCS sent Ballanger a letter informing him that John Baker, Wetland Emphasis' Team Leader, and Terri E. Bruner, Soil Conservationist, would conduct a certified wetland determination/delineation on Ballanger's farm, Tract 1169, on April 11, 2002. Admin. Rec. 4. After surveying six locations, identified as Transect/Plot ID numbers 1/1, 1/2, 1/3, 2/1, 2/2, and 2/3, the NRCS determined that Ballanger was in compliance with the Farm Bill. Admin. Rec. 5-23.
Second, after viewing slides, the NRCS sent Ballanger another letter informing him that "some clearing might have occurred on the west side of the Chariton River and could be a wetland violation." Admin. Rec. 39. Consequently, John Baker and Terri E. Bruner conducted a second certified wetland determination/delineation on Tract 1169 in July 2002. Admin. Rec. 43. During that inspection, the NRCS concluded that plot 1, consisting of 5.1 acres, was converted in 1996. Admin. Rec. 40-46. The NRCS identified wetland hydrology in drainage patterns, in oxidized root channels in the upper twelve inches, in local soil survey data, and in an FAC-Neutral test. Admin. Rec. 44. In November 2003, the NRCS sent Ballanger a letter notifying him of its conclusions, his right to request another field visit, to mediate the issue, or to appeal the conclusions to the Schuyler County Farm Service Agency ("FSA") Committee. Admin. Rec. 60-63.
Third, in response to an appeal request by Ballanger, the NRCS conducted a final inspection of Ballanger's land on December 29, 2003. Admin. Rec. 67. At that time, "[t]he corn being harvested allowed [the NRCS] to see the area better." Admin. Rec. 67. The NRCS was also able to survey the rest of the areas that were cleared in 1996. Admin. Rec. 67. The NRCS concluded that one area it had previously delineated as converted was in fact non-wetland. However, the NRCS also determined that two additional wetland areas were converted to cropland. Admin. Rec. 67. The NRCS based its determinations on several wetland hydrology indicators, including inundation, saturation in the upper twelve inches, drainage patterns in the wetlands, oxidized root channels in the upper twelve inches, local soil survey data, and FAC-Neutral tests. Admin. Rec. 67-100. In March 2004 the NRCS sent Ballanger a letter notifying him of its conclusions. The NRCS also notified Ballanger of his right to request another field visit, to mediate the issue, or to appeal the conclusions to the Schuyler County FSA Committee. Admin. Rec. 115-119.
On May 4, 2004, the NRCS' technical determination of a wetland conversion became final. Admin. Rec. 121. That same day, Max Starbuck, the Executive Director for the Schuyler County FSA Committee ("COC"), sent Ballanger a letter informing him that the COC must determine if a violation had occurred. Admin. Rec. 121. If Ballanger could produce evidence that he acted in good faith and converted the land without intent to violate the statute he would remain eligible for USDA/FSA program payments under a good faith exception, provided he restored the land. A good faith determination form and an explanation of Ballanger's appeal rights were submitted along with the letter. Admin. Rec. 121-131.
In a May 11, 2004 visit to the COC office, Ballanger stated that when he purchased the land, the prior owner informed him that there were no wetlands present. Admin. Rec. 132. In June 2004 Ballanger spoke at a COC meeting where he again stated that the prior owner informed him that there were no wetlands present. Admin. Rec. 133. Ballanger " also "stated that he had not made a written `good faith effort to comply with regulations' request as he felt that would be acknowledging wrong doing on his part." Admin. Rec. 133.
On June 15, 2004, the Schuyler County FSA Office denied Ballanger's appeal. Admin. Rec. 133. The COC office informed Ballanger that he was ineligible for USDA/FSA funds beginning in 1996 when the conversion occurred, and that his ineligibility would continue until the program year after restoration and mitigation were successfully completed. Admin. Rec. 133. Ballanger did not receive USDA/FSA funds from 1996-1999 or from 2003-2004. Admin. Rec. 133. Consequently, Ballanger was required to refund the USDA/FSA benefits he received from the years 2000 through 2002, totaling $40,316.23 (335,849.70 in principal and $4,466.53 in interest). Admin. Rec. 134. Ballanger was also informed of his right to seek mediation, to appeal to the State FSA Committee, or to appeal to the National Appeals Division. Admin. Rec. 134-137. The parties sought mediation, but they were unable to resolve their differences. Admin. Rec. 138-142.
Ballanger appealed to the USDA National Appeals Division. His complaint stated: "The land at issue is not a `wetland' as that term is defined in the wetland conservation provision." Admin. Rec. 161, 178, 181. On March 23, 2005, B. Dale Hicks, a National Appeals Division Hearing Officer, upheld the FSA's determination that Ballanger had converted wetland, that he was ineligible for USDA benefits as long as the land remained converted, and that he had to refund the USDA benefits he had improperly received from the years 2000 through 2002. Admin. Rec. 194-197.
During the appeal, Ballanger argued that "a wetland did not exist on his farm," "that NRCS did not complete a study to determine whether his removal of hydrophytic vegetation impedes the flow of water," and "that the FSA should reinstate his eligibility for USDA program benefits and cancel its demand for payments he received for the years 2000 through 2002." Admin. Rec. 196. Hearing Officer Hicks rejected all three arguments. Hicks concluded that the NRCS identified wetlands, found that Ballanger removed woody vegetation, found no federal regulation requiring the Agency to conduct a water flow impairment study, and held that Ballanger must refund the USDA benefits. Admin. Rec. 194-97.
In March 2005, Ballanger requested a Director Review of Hicks's decision. Admin. Rec. 505-10. Ballanger's complaint stated:
There was not a willful violation of the WC regulations and rules regarding this particular farm. The finding is against the weight of the credible evidence. I anticipate an Impartial third party to testify that the area at issue is not in violation of the WC rules and regulations. Further the removal of woody vegetation did not alter or affect the drainage or flow of any water and it was not wetland ground.
Admin. Rec. 511. On May 17, 2005, Deputy Director M. Terry Johnson upheld Hearing Officer Hicks's decision. Admin. Rec. 492-97. During the appeal, Ballanger made the same arguments he presented in his complaint. Admin. Rec. 492-97. The Deputy Director rejected all of Ballanger's arguments for the reasons discussed below.
First, the Deputy Director held that the FSA was not required to conduct a study proving that the removal of woody vegetation impaired water flow because the applicable regulation, 7 C.F.R. § 12.2, does not require a finding of water flow...
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