Holly Hill Farm Corp. v. U.S.
| Decision Date | 08 May 2006 |
| Docket Number | No. 05-1857.,05-1857. |
| Parties | HOLLY HILL FARM CORPORATION, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fourth Circuit |
John Frederick Ames, Richmond, Virginia, for Appellant. Tara Louise Casey, Assistant United States Attorney, Office of the United States Attorney, Richmond, Virginia, for Appellee.
ON BRIEF:
Paul J. McNulty, United States Attorney, Alexandria, Virginia, for Appellee.
Before MOTZ and TRAXLER, Circuit Judges, and JAMES P. JONES, Chief United States District Judge for the Western District of Virginia, sitting by designation.
Affirmed by published opinion. Chief District Judge JONES wrote the opinion, in which Judge MOTZ and Judge TRAXLER joined.
This case involves the judicial review of the final decision of appellee United States of America, acting through the United States Department of Agriculture ("USDA"), denying appellant Holly Hill Farm Corporation's application for farm benefits. Because we agree with the district court that the agency's decision was not arbitrary or capricious nor the result of an abuse of discretion, we affirm.
Holly Hill Farm Corporation ("Holly Hill") owns a 650-acre estate in Caroline County, Virginia, and operates a farm, Farm Serial Number 1075 ("FSN 1075"), under the Direct County-Cyclical Program ("DCP"), administered by the USDA. The DCP provides income support to producers of eligible crops. At issue in the present case is Field 16 of FSN 1075, which is located between the Mattaponi River and Route 207 in Caroline County. Field 16 consists of three and one-half acres and includes approximately one acre that has been designated as an illegally converted wetland. This designation rendered Holly Hills ineligible for program benefits and is thus the subject of this appeal.
The chain of events resulting in the designation at issue began on May 16, 1989, when George R. Ways, District Conservationist for the Soil Conservation Service ("SCS")1, confirmed the presence of hydric soil on FSN 1075. Because such soil indicates the possible presence of wetlands, Ways advised Holly Hill in a letter dated February 7, 1990, to seek a determination of the wetland status of FSN 1075 before beginning the clearing of any woodland. Ways explained that the clearing of woodland that may also be wetland for use as a pasture would not violate the 1985 Farm Bill, but attached an article suggesting that destruction of wetland for any purposes may violate other laws.
In a subsequent letter dated March 6, 1990, Ways noted that at that time Field 16 was designated as woodland and that clearing was in progress in that field and others without prior planning or approval by SCS. Ways advised Holly Hill "that the clearing of wetland could result in a violation of Federal Wetland Laws" and made arrangements for SCS to map the soils on the entire property and make a wetlands determination. (J.A. 229.)
On June 11, 1990, SCS notified Holly Hill that Fields 6, 9, 10, and an unnumbered area northeast of Field 11 were designated as wetlands. The soil map accompanying the report and the wetland determination itself specifically stated that "[w]etland determinations have been made only for areas specifically delineated." (J.A. 230, 231.) The disclaimer on the soil map additionally provided that (J.A. 231.) Holly Hill appealed, and there were some revisions to the dimensions of the land designated as wetland in Fields 6 and 9. A review of the record performed during this appeal process revealed that "wetland determination disclaimer statements are inappropriate on [the] soil map." (J.A. 233E.) On August 23, 1991, SCS completed and certified a revised wetland determination designating Fields 6, 9, 10, and an unnumbered area northeast of Field 11 as wetlands. There was no reference to Field 16 in this official wetland determination.
Also in 1991, the USDA received a whistle-blower complaint regarding possible wetland conversions on Holly Hill's property. Holly Hill refused USDA officials access to the property in order to investigate the complaint, and accordingly the USDA automatically denied farm benefits according to Farm Services Agency ("FSA") procedure. Holly Hill again denied USDA access to investigate the whistle blower complaint in 1994. Additionally, in 1995, the Environmental Protection Agency ("EPA") issued an "Order for Compliance" instructing Holly Hill to cease unauthorized filling of wetlands in violation of the Clean Water Act and noted in the order that Holly Hill had previously denied the USDA, Army Corps of Engineers, and NRCS access to the property in order to investigate the matter.
For crop year 2002, Holly Hill applied for program benefits for FSN 1075. NRCS responded in November 2002 that Holly Hill would be ineligible unless it allowed NRCS officials access to investigate the outstanding wetland noncompliance complaint and establish a conservation plan for the farm. Holly Hill initially resisted, but eventually granted access to the property in June 2003. On August 1, 2003, NRCS conducted an initial survey and determined that one acre of land in Field 16 of FSN 1075 contained wetlands converted after November 28, 1990. This determination was based on the presence of hydrology and hydric soils, and on aerial photographs from 1993-2002 demonstrating a conversion from bottomland hardwoods to pastureland in or around 1994.
The determination became final, and on November 3, 2003, Holly Hill appealed to the Hanover/Caroline FSA County Committee ("FSA county committee"). The FSA county committee held a hearing on December 19, 2003, decided that the case warranted a review by the NRCS State Conservationist, and referred the matter to NRCS. On January 20, 2004, the State Conservationist concluded that the converted wetland determination was technically accurate and final. The County Executive Director of the FSA county committee notified Holly Hill of the State Conservationist's conclusion and informed Holly Hill that it was thus not eligible for program benefits.
Holly Hill appealed to the National Appeals Division ("NAD") of the USDA on April 9, 2004. Holly Hill requested subpoenas for four NRCS and three EPA employees to testify at the hearing. The Hearing Officer faxed this subpoena request to the USDA, and the USDA responded that it would send Dan Solomon, Farm Bill Program Manager, and Jerry Quesenberry, the soil scientist responsible for wetland determinations in the area of Virginia encompassing Holly Hill's property, neither of whom were among those witnesses requested by Holly Hill. The NAD Hearing Officer denied all of Holly Hill's subpoena requests on the grounds that the requested witnesses did not possess specific relevant information not otherwise available.
The NAD hearing was held June 23, 2004. During the hearing, Holly Hill objected when the NAD Hearing Officer questioned the USDA officials, arguing that the Hearing Officer was thereby leading the government through the case. On July 22, 2004, the NAD Hearing Officer issued a decision holding that the FSA's denial of program benefits based on the NRCS technical determination of wetland conversion after November 28, 1990, was not erroneous. Holly Hill requested that the NAD Director review the NAD Hearing Officer's determination, and the NAD Director upheld the NAD Hearing Officer's determination on October 21, 2004, constituting final agency action. Holly Hill appealed to the district court, asserting that the USDA abused its discretion, took unreasonable action, and issued an arbitrary and capricious decision.
In its memorandum opinion granting the government's motion for summary judgment, the district court found that (1) the NAD Hearing Officer did not abuse his discretion when he confined the evidence presented at the hearing to what he determined was relevant and non-repetitious; (2) the NAD Hearing Officer did not abuse his discretion when he denied Holly Hill's requests for witness subpoenas; (3) the NAD Hearing Officer's ex parte communication did not relate to the merits of the appeal, but rather only to procedural matters, and was thus not prohibited; (4) the NAD Hearing Officer's attempt to clarify questions and answers, and to obtain all the applicable evidence, did not evidence an improper bias or prejudice toward the defendant; and (5) the USDA's substantive decision to deny program benefits based on its determination that Field 16 contained converted wetlands was supported by substantial evidence and thus not arbitrary or capricious.
On appeal, Holly Hill makes four substantive arguments in support of its claim that the USDA's denial of benefits was arbitrary and capricious. First, Holly Hill argues that the USDA determined that Field 16 was not a wetland in 1991, and that the USDA should be bound by this determination as well as by Ways' statement in his February 7, 1990, letter to Holly Hill that clearing of Field 16 would not violate the 1985 Farm Bill. Second, Holly Hill contends that the USDA's determination that Field 16 was converted after November 28, 1990, is arbitrary and capricious. Third, Holly Hill argues that even if the wetlands on Field 16 were converted after November 28, 1990, all of the evidence regarding the alleged scope of the conversion supports the conclusion that Holly Hill is entitled to a minimal effects exception under the Regulations. Lastly, Holly Hill challenges the manner in which the NAD hearing was conducted, asserting that the Hearing Officer's denial of subpoena requests, ex parte contact with the USDA, and questioning of government witnesses violated due process.
This court reviews the district court's grant of...
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