Horn Farms, Inc. v. Johanns, 04-2948.

• Decision Date: 02 February 2005
• Docket Number: No. 04-2909.,No. 04-2948.,04-2948.,04-2909.
• Citation: 397 F.3d 472
• Parties: HORN FARMS, INC., Plaintiff-Appellee, Cross-Appellant, v. Mike JOHANNS, Secretary of Agriculture, et al., Defendants-Appellants, Cross-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

397 F.3d 472

HORN FARMS, INC., Plaintiff-Appellee, Cross-Appellant, v. Mike JOHANNS, Secretary of Agriculture, et al., Defendants-Appellants, Cross-Appellees.

No. 04-2948.

No. 04-2909.

United States Court of Appeals, Seventh Circuit.

Argued January 3, 2005.

Decided February 2, 2005.

COPYRIGHT MATERIAL OMITTED

Brandon L. Jensen (argued), Budd Falen, Cheyenne, WY, for Plaintiff-Appellee, Cross-Appellant.

John S. Koppel (argued), Department of Justice Civil Division, Appellate Section, Washington, DC; Clifford D. Johnson, South Bend, IN; and Andrew B. Baker, Jr., Office of the United States Attorney, Hammond, IN, for Defendants-Appellants, Cross-Appellees.

Before BAUER, EASTERBROOK, and WOOD, Circuit Judges.

EASTERBROOK, Circuit Judge.

Farmers who convert wetlands to agricultural use lose eligibility for federal agricultural subsidies. The initial version of this statute, 16 U.S.C. §§ 3821-24, enacted in 1985 and dubbed "Swampbuster," made the loss proportional to the amount of wetland converted. An amendment in 1990 provided that converting any wetland would cause the farmer to lose all agricultural payments. A further amendment in 1996 added an exception for wetlands that had been drained and farmed, had reverted to wetland status, and then were restored to agricultural use. We must interpret and apply the 1996 exception.

In 1998 Horn Farms drained about 6.2 acres of wetlands. A system of tiles under that ground showed that this was not its first conversion to farm use, but well before 1998 the system had broken down and the parcel had reverted to wetland. The district conservationist concluded, from the age of trees and other vegetation, that the ground probably had become saturated again during the 1970s, and certainly no later than 1981. This led local agricultural officials to deem Horn Farms ineligible for the exception, which covers: "A wetland previously identified as a converted wetland (if the original conversion of the wetland was commenced before December 23, 1985), but that the Secretary determines returned to wetland status after that date as a result of — (i) the lack of maintenance of drainage, dikes, levees, or similar structures; (ii) a lack of management of the lands containing the wetland; or (iii) circumstances beyond the control of the person." 16 U.S.C. § 3822(b)(2)(D). The date on which the ground "returned to wetland status" could not be determined with certainty, but it preceded December 23, 1985 — so much Horn Farms concedes. Because the Department of Agriculture reads the phrase "after that date" to refer to December 23, 1985, its immediate antecedent, Horn Farms was ineligible for the exception and lost all federal agricultural subsidies. (The statute restores the subsidies if the farmer restores the wetlands, but Horn Farms has declined to do this, and the parties could not agree on the adequacy of its offer to mitigate the loss in other ways. See 16 U.S.C. § 3822(i).)

Horn Farms contends that "that date" is the date of the original conversion, so that any wetland converted to farm use before December 23, 1985, always may be farmed again without any loss of federal subsidy, no matter how long it had been a wetland before the second conversion and no matter what its status on December 23, 1985. A federal district court agreed with this position and directed the Department to resume Horn Farms' subsidy payments. 319 F.Supp.2d 902 (N.D.Ind.2004). The judge rejected Horn Farms' request that he declare the legislation unconstitutional as a misuse of Congress' spending power, so Horn Farms remains at risk of losing federal support again if it converts any wetland that had not been drained and farmed some time before December 23, 1985. Both sides have appealed; the Department of Agriculture also asks us to review two other parts of the district court's opinion that we describe later.

Because the district court remanded to the Secretary, we must consider whether the judgment is appealable as a "final decision" under 28 U.S.C. § 1291. It is not clear what the Secretary is supposed to do on remand; the judgment omits all details. The remand appears to be the result of careless drafting. The district court did not want the Department of Agriculture to take more evidence and make a fresh decision; instead the court contemplated that the Department would restore Horn Farms' subsidy. Yet if by ordering a remand rather than a concrete remedy the judge has made his decision non-final, an appeal is impermissible — though an application under Fed.R.Civ.P. 60(a) might be in order to conform the disposition to the opinion's rationale. Given the rationale of Sullivan v. Finkelstein, 496 U.S. 617, 110 S.Ct. 2658, 110 L.Ed.2d 563 (1990), and Forney v. Apfel, 524 U.S. 266, 118 S.Ct. 1984, 141 L.Ed.2d 269 (1998), however, the order is a "final decision" as it stands. Nothing that the Secretary could do in the future would lead to a fresh administrative order that the federal government could take back to district court (and this independent of the fact that the Department cannot petition for judicial review of its own orders). It is thus now or never for an appeal. Although Finkelstein and Forney concerned a provision in the Social Security act rather than § 1291, we applied them to § 1291 in Perlman v. Swiss Bank Corp., 195 F.3d 975, 979 (7th Cir.1999): "If the district court finds that the decision was erroneous and enters a judgment wrapping up the litigation, that decision is appealable even if extra-judicial proceedings lie ahead; but if the court postpones adjudication until after additional evidence has been analyzed, then it has not made a final decision." The district court concluded that the Secretary's decision was erroneous and awarded Horn Farms all financial relief that it sought, so the order is appealable now.

Section 3822(b)(2)(D) is ambiguous. The referent of "that date" could be December 23, 1985, as the Secretary contends, but it also could be the date on which the wetland was "previously identified" or the date on which the "original conversion ... was commenced". Several contextual elements support the Secretary's reading. First, December 23, 1985, is the last antecedent of "that date". See Barnhart v. Thomas, 540 U.S. 20, 26, 124 S.Ct. 376, 157 L.Ed.2d 333 (2003). Second, the date on which a wetland was "previously identified" is meaningless for land converted before December 1985, as the statute's approach to "identifying" wetlands did not come into existence until then. Third, the date of original conversion is an implausible candidate for the antecedent, because then the phrase "before that date" and much of the remaining language would serve no function. It would be as if the statute exempted: "A wetland converted before December 23, 1985, that the Secretary determines returned to wetland status after that date as a result of...". Any reading that makes so much of a statute surplusage has little to recommend it. Fourth, when "that date" is understood to be December 23, 1985, the subsection is a non-degradation clause: the legislation protects wetlands as they actually existed on the date of its enactment, penalizing withdrawals without attempting to restore lands then under agricultural production. Reading "that date" to be the time of original conversion would allow net reductions in wetlands after the legislation's enactment — and would allow them in ways that are difficult to police, because there would be few records to show the date of original conversion, so farmers who drained wetlands after 1985 could make hard-to-refute claims that they were just going back to some long-forgotten state of affairs.

So the Secretary's interpretation not only is reasonable but also is the most sensible understanding of the legislation. Moreover, because the interpretation is expressed in regulations adopted after notice and opportunity for comment, see 7 C.F.R. §§ 12.2(7), 12.2(8), and concerns the Secretary's administration of a federal program, it receives all of the deference contemplated by 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). Yet the district court concluded that a solitary statement by one of the legislation's sponsors overrode all of this. The judge relied on an exchange that took place in the House Agriculture Committee and was summarized (though not reported verbatim) in the committee report:

Mr. Daschle was recognized to offer a clarifying amendment to the previously adopted Swampbuster provisions. Mr. Daschle briefly explained the provisions of the amendment. Mr. Lewis offered an amendment to the amendment to clarify that the definition of wetlands would not include simply wet soils. Mr. Daschle said he would accept the amendment. The Committee agreed to the Lewis amendment by voice vote. Mr. Daschle and Mr. Lewis discussed the question of cropland that has been flooded and later reclaimed. Mr. Daschle stressed that the amendment would not affect the use of this land because if production was underway at any time in the past, the land would be grandfathered.

H.R. Rep. 99-271 (Pt. 1) at 419, 99th Cong. 1st Sess. (1985). This implies that Rep. Daschle thought that the version of the statute under consideration in 1985 allowed previously converted wetlands to be re-converted later without penalty. What that has to do with the interpretation of an amendment 11 years later is a mystery. The 1985 legislation lacked any counterpart to § 3822(b)(2)(D); Rep. Daschle could not have been trying to pin down the antecedent of "that date" in a bill whose drafting lay far in the future. The district judge also did not explain why one representative's view would trump that of the Cabinet official to whom administration has been delegated. If agencies and legislators read ambiguous language differently, the agency wins under Chevron. When Congress delegates to the Executive Branch a power of...