Gunn v. U.S. Dept. of Agriculture, 96-3995

• Decision Date: 08 September 1997
• Docket Number: No. 96-3995,96-3995
• Citation: 118 F.3d 1233
• Parties: , 27 Envtl. L. Rep. 21,331 Charles GUNN, Appellant, v. UNITED STATES DEPARTMENT OF AGRICULTURE and Natural Resources Conservation Service, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1233

118 F.3d 1233

45 ERC 1091, 27 Envtl. L. Rep. 21,331

Charles GUNN, Appellant, v. UNITED STATES DEPARTMENT OF AGRICULTURE and Natural

Resources Conservation Service, Appellees.

No. 96-3995.

United States Court of Appeals,

Eighth Circuit.

Submitted May 19, 1997.

Decided July 7, 1997.

Rehearing and Suggestion for Rehearing En Banc Denied Sept. 8, 1997.

Wythe Willey (argued), Cedar Rapids, IA, for Appellant.

Gary L. Hayward, Asst. U.S. Atty. (argued), Des Moines, IA, for Appellees.

Before RICHARD S. ARNOLD, Chief Judge, BOWMAN and MORRIS SHEPPARD ARNOLD, Circuit Judges.

RICHARD S. ARNOLD, Chief Judge.

Charles Gunn filed this action in the District Court ¹ to challenge the Soil Conservation Service's (SCS's ²) determination that certain parts of his farmland were converted wetlands and could therefore not be farmed without his losing eligibility for certain farm benefit programs. The District Court held that the SCS's regulations are a reasonable interpretation of the pertinent statute, 16 U.S.C. §§ 3801, 3821-24, and that the SCS's determination that the lands were wetlands was supported by substantial evidence. The Court dismissed Gunn's taking-by-inverse-condemnation claim for lack of jurisdiction. We affirm.

I.

Gunn owns 160 acres of land in Iowa that he and his predecessors-in-interest have farmed since 1906. Before that time the acreage was wetlands and not arable. In 1906 the local drainage district installed tiles under the land to drain the excess water from the land. Other tiling allowed water from neighboring farmland to drain across Gunn's land. By 1947, additions to the drainage system had increased the drained area so that the amount of water in some years exceeded the capacity of the system, leaving parts of Gunn's land wet and unsuitable for farming. Realizing that a drainage problem existed, the drainage district in 1992 installed new drainage tiles and dug an open ditch on Gunn's land that remedied the system's shortcomings.

In order to combat the disappearance of wetlands through their conversion into crop lands, Congress passed a law known commonly as "Swampbuster." Food Security Act of 1985, Pub.L. No. 99-198, §§ 1201, 1221-23, 99 Stat. 1354, 1504-08 (codified as amended at 16 U.S.C. §§ 3801, 3821-24). This law did not make illegal the conversion of wetlands to agricultural use, but did provide that any agricultural production on a converted wetland would cause the farmer to forfeit his eligibility for a number of federal farm-assistance programs. Among the exemptions to the provisions of Swampbuster is one for wetlands that had been converted to agricultural production before December 23, 1985. See § 3821(d). The farming of such previously converted wetlands does not make the farmer ineligible for benefits.

In order for a farmer to participate in the benefits programs, he must certify his eligibility to the SCS. The SCS determines whether the land for which a farmer seeks benefits contains wetlands that have been converted for agricultural purposes. Charles Gunn sought certification in 1991, and was told by the SCS that his farm contained 32.9 acres of "farmed wetlands," which are, in essence, wetlands that are sometimes dry enough to farm. The SCS advised Gunn that he could continue to farm these lands as well as maintain the existing drainage system, but if he wished to remain eligible for benefits he could not improve the land's drainage. This ruling was upheld after an appeal within the agency. Gunn did not seek further review.

In 1992, the local drainage district improved the drainage system, as noted above. In the process of analyzing the new system, SCS discovered that the previous drainage system had had a greater capacity than previously realized, but still had been insufficient to drain the land completely. It also determined that because the new system completely drained the land, part of Gunn's land now constituted converted wetlands. After a series of appeals within the agency, the SCS concluded that 28.2 acres of Gunn's land were wetlands that had been converted by the drainage district's recent activities and could not be farmed by Gunn without his losing eligibility for farm benefit programs.

Gunn then filed this action in the District Court, seeking a declaratory judgment that he was entitled to farm this land without losing benefits, and damages for his not having farmed the lands during the decision and appeal process. In the alternative, if the converted-wetlands determination was upheld, he sought compensation for a taking of land by inverse condemnation. The District Court held that the classification of the lands as converted wetlands was reasonable, denied Gunn's desired declaration, and refused to award damages. It also dismissed the takings claim for lack of jurisdiction because Gunn sought compensation in an amount greater than $10,000, a claim over which the Court of Federal Claims has exclusive jurisdiction. See 28 U.S.C. §§ 1346, 1491. The District Court also stated that the government's action was not a taking. Gunn then took this appeal.

II.

Gunn challenges the SCS's decision in two ways. First, he contends that the pertinent regulations are neither consistent with, nor a reasonable interpretation of, the Swampbuster statute. Second, he argues that the SCS failed to follow its own regulations in deciding his eligibility. We hold that the regulations are consistent with the statute and that the SCS followed those regulations in its decision-making process.

A.

The statute makes ineligible for benefits, listed at 16 U.S.C. § 3821(b), any person who "converts a wetland by draining, dredging, filling, leveling, or any other means for the purpose, or to have the effect, of making the production of an agricultural commodity possible on such converted wetland ... for that crop year and all subsequent crop years." § 3821(c). It also makes ineligible for these same benefits, such as crop insurance, price supports, and government-sponsored loans, any person who "produces an agricultural commodity on converted wetland." § 3821(a). The act defines a converted wetland as a "wetland that has been drained, dredged, filled, leveled or otherwise manipulated" so that agricultural production is made possible. § 3801(a)(6)(A). The statute provides one exception relevant to this case: no person becomes ineligible for agricultural production on converted wetlands "if the conversion of the wetland was commenced before December 23, 1985." § 3822(b)(1)(A).

The SCS has promulgated regulations to refine the scope of these provisions. Gunn contends the regulations are contrary to the plain language of the statute, and, if the statute is ambiguous, that the regulations are not a reasonable interpretation under the rule of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Therefore, he argues, the decision by the SCS is invalid. We disagree, and conclude that the regulations carefully follow the statutory language and are reasonable interpretations of any statutory ambiguities.

The first aspect of the regulations that Gunn challenges is their definition of a converted wetland. He contends that the definitions at 7 C.F.R. § 12.2(a)(6) & 12.32 (1992) are contrary to the statute. Section 12.2(a)(6) defines converted wetlands in terms virtually identical to those used in the statute. ³ Section 12.32(a) lists factors that are to be considered in determining whether a wetland has been converted, such as whether woody hydrophytic vegetation has been removed. Finally, Section 12.32(b), which accords with the exception provided by 16 U.S.C. § 3801(a)(6)(B), explains that a wetland shall not be considered converted just because natural conditions, such as drought, allow a farmer to cultivate certain land, so long as that farming does not "permanently alter or destroy natural wetland characteristics"--the farmed-wetlands exception. We perceive no inconsistency between the regulations and the statute they are intended to effectuate. Rather, they provide scientifically defined bases for determining whether the provisions of the statute have been violated. Such expert refinements are well within the purview of the SCS, and do not make its determination in Gunn's case invalid.

Next, Gunn challenges the regulations' definition of "commenced." The statute allows the farming of wetlands the conversion of which was commenced before December 23, 1985, without the farmer's losing benefits. The regulations allow a farmer to demonstrate that he has commenced the conversion in one of two ways: by showing he has actually dredged, drained, filled, leveled, or otherwise manipulated the wetlands before the given date, 7 C.F.R. § 12.2(a)(6) & 12.5(b)(3)(i), or that he has contractually committed substantial funds to someone else who will perform these activities, § 12.5(b)(3)(ii). Gunn reads the substantial-funds requirement to have impermissibly narrowed the statutory term "commenced" from what Congress intended. Von Eye v. United States, 92 F.3d 681, 685 (8th Cir.1996), which considered the application of the requirement, suggests it did not. Moreover, the substantial-funds provision allows a farmer to come within the exception not only by actually starting the land-moving activities, as the statutory term "commenced" naturally suggests, but also by simply committing to have such activities undertaken in the future. Gunn has not shown that the 1992 conversion was commenced under either the statutory definition or the definition in the regulations. Any discrepancy between the two, therefore, does not change the conclusion that his wetlands do not come within the exception for previously converted wetlands.

Alternatively, Gunn could succeed on his claim if he had actively pursued this particular conversion since before December 23, 1985. Downer v. United States, 97 F.3d 999, 1004 (8th Cir.1996). The initial improvement...