Steen v. U.S.

• Citation: 395 F.Supp.2d 1345
• Decision Date: 03 October 2005
• Docket Number: Slip Op. 05-131.,Court No. 04-00623.
• Parties: Ron STEEN, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

395 F.Supp.2d 1345

Ron STEEN, Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 05-131.

Court No. 04-00623.

United States Court of International Trade.

October 3, 2005.

Steptoe & Johnson, (Joel D. Kaufman and Tina Potuto Kimble) for Plaintiff.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; Jeanne E. Davidson, Deputy Director, David S. Silverbrand, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, for Defendant.

OPINION

WALLACH, Judge.

I Introduction

This case challenges the Department of Agriculture's ("Agriculture") definition of "net farm" or "net fishing" income pursuant to 19 U.S.C. § 2401e(a)(1)(C) (2004). On August 23, 2005, the court held oral argument on Defendant's Motion to Dismiss for Failure to State a Claim Upon Which Relief May Be Granted ("Defendant's' Motion"). The Court has jurisdiction pursuant to 19 U.S.C. § 2395 (2005). For the following reasons Defendant's Motion is granted.

II Background

On November 6, 2003, the Foreign Agricultural Service ("FAS") certified that Pacific Salmon fisherman in Alaska and Washington¹ were eligible to apply for agricultural trade adjustment assistance ("TAA") pursuant to 19 U.S.C. § 2401a.² Trade Adjustment Assistance for Farmers, 68 Fed.Reg. 62,766 (November 6, 2003). On December 23, 2003 Plaintiff, Ron Steen, a Pacific salmon producer residing in Olympia, Washington, applied for TAA benefits. Complaint at 1; Plaintiff's Response to Defendant's Motion to Dismiss for Failure to State a Claim Upon Which Relief May Be Granted at 3. Defendant, the United States Department of Agriculture ("Defendant" or "Agriculture") denied his application on the grounds that Plaintiff's net fishing income of $9,915 for 2002 was higher than his net fishing income of $4,573 for 2001. Defendant's Motion at 8. Plaintiff appealed Agriculture's denial to the National Appeals Division of the Department of Agriculture. Defendant's Motion at 4. Once Defendant notified Plaintiff that the denial was final, Plaintiff sought judicial review of Agriculture's determination on December 3, 2004. Id. at 4-5.

III Arguments

Defendant contends Plaintiff failed to state a claim upon which relief may be granted, and requests dismissal of this action arguing it properly denied Plaintiff TAA benefits because Plaintiff failed to meet eligibility requirements. Defendant's Motion at 6-7 (citing 19 U.S.C. § 2401e(a)(1) and 7 C.F.R. § 1580.301(e)(4)). Specifically, Defendant claims that since Plaintiff has failed to demonstrate his net fishing income for the most recent year is not less than his net fishing income for the latest year in which no TAA assistance was received, he is ineligible for benefits and therefore fails to state a claim upon which relief may be granted. Id. at 9.

Plaintiff argues he has met the statutory requirements of 19 U.S.C. § 2401e(a)(1) and (b) and should therefore be eligible for TAA assistance. Plaintiff's Response at 5. Plaintiff also argues that Defendant's regulations disregard Congress' statutory scheme and place additional requirements that conflict with the statute. Id. Accordingly, Plaintiff asserts Defendant's decision to deny Plaintiff TAA assistance should be overturned.

IV Standard of Review

A Defendant's Motion to Dismiss

A Defendant is entitled to dismissal under USCIT Rule 12(b)(6) where, accepting factual allegations made in the Complaint and drawing all inferences in favor of Plaintiff, it appears beyond doubt that no set of facts can be proven that would entitle Plaintiff to relief. See Mitchell Arms, Inc. v. United States, 7 F.3d 212, 215 (Fed.Cir.1993); Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1565 (Fed.Cir.1988); United States v. Ford Motor Co., 2005 WL 400399 (CIT 2005); Kemet Electronics Corp. v. Barshefsky, 21 CIT 912, 976 F.Supp. 1012, 1027 (1997). In order to determine the sufficiency of a claim, consideration is limited to the facts stated on the face of the Complaint, or incorporated in it by reference. See Kemet at 1027. "On a motion to dismiss for failure to state a claim, any factual allegations in the complaint are assumed to be true and all inferences are drawn in favor of the plaintiff." Amoco Oil Co. v. United States, 234 F.3d 1374, 1376 (Fed.Cir.2000). Nevertheless, the "plaintiff must plead specific facts, and not merely conclusory allegations." Int'l Custom Prods. v. United States, Slip Op. 05-00341 2005 Ct. Int'l Trade LEXIS 74, 374 F.Supp.2d 1311, 1323 (CIT June 15, 2005) (citing United States v. Inn Foods, Inc., 2003 Ct. Int'l Trade LEXIS 49, 264 F.Supp.2d 1333, 1335 (CIT May 13, 2003)).

B The General Standard of Review in Administrative Law

In administrative proceedings, the court has jurisdiction to affirm or remand the actions of the Secretary of Agriculture "in whole or in part." 19 U.S.C. § 2395(c) (2004). The Department of Agriculture's determination regarding certification of eligibility for TAA will be upheld if it is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 2395(b); Former Employees of Swiss Indus. Abrasives v. United States, 17 CIT 945, 947, 830 F.Supp. 637, 639 (1993). In addition, the Administrative Procedures Act ("APA") provides that agency determinations shall be held invalid if they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706 (2004). Under the latter standard, an agency's determination will be upheld unless the agency fails to acknowledge applicable law or to demonstrate how it reaches its conclusions of law. See Arizona Grocery Co., v. Atchison T. & S.F.R. Co., 284 U.S. 370, 389, 52 S.Ct. 183, 76 L.Ed. 348 (1932) (holding that an agency may not refuse to recognize its own rules or regulations); Burlington Truck Lines Co. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962) (holding that an agency finding must show "a rational connection between the facts found and the choice made.")

V Discussion

A Parties' Arguments

Defendant contends Plaintiff's Complaint failed to state a claim upon which relief may be granted. Defendant's Motion at 6. In particular, Defendant claims that Plaintiff does not meet the eligibility requirements under 19 U.S.C. § 2401e or 7 C.F.R. § 1580.301.³ Id. at 6-7. Defendant says that while a producer may qualify for TAA assistance using either net farm or fishing income, the producer must to demonstrate that "net farm income (as determined by the Secretary) for the most recent year is less than... net farm income for the latest year in which no adjustment assistance was received ... under this chapter." Id. at 7-8 (quoting 19 U.S.C. § 2401e(a)(1)(C)) (emphasis added); see also 7 C.F.R. § 1580.301(e)(4) and 7 C.F.R. § 1580.102. Because Plaintiff's net fishing income was higher in 2002 than it was in 2001, Defendant says Plaintiff does not qualify for benefits under the TAA program.⁴ Defendant's Motion at 8; Defendant's Reply at 1-2.

Plaintiff requests that the court deny Defendant's Motion to Dismiss and remand the instant case to the Secretary. Plaintiff claims that Defendant's regulations implementing the TAA statute and the agency's interpretation of the statute are unreasonable and contrary to Congressional intent. Plaintiff's Response at 1, 5. Plaintiff argues that he has met the statutory criteria set forth in 19 U.S.C. § 2401e(a)(1), that he does not fall within the limitations set forth in 19 U.S.C. § 2401e(b), and was denied TAA benefits erroneously. Id. at 5.

B The Department of Agriculture's Regulations Implementing 19 U.S.C. § 2401e Satisfy the Chevron and Mead Tests and Is Entitled to Judicial Deference

In determining whether an agency's interpretation and application of a statute is "in accordance with law," the court must undertake a two-step analysis prescribed 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). The first Chevron step is to determine whether "Congress has directly spoken to the precise question at issue." Id. at 842, 104 S.Ct. 2778. Employing traditional tools of construction, the court first looks to the statutory text. See Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed.Cir.1998). Because the "statute's text is Congress's final expression of its intent, if the text answers the question, that is the end of the matter." Timken Co. v. United States, 2001 CIT 96, 166 F.Supp.2d 608, 614 (2001) (quoting Timex, 157 F.3d at 882). If however, further examination is needed, then the tools of statutory construction "`includ[ing] the statute's structure, canons of statutory construction, and legislative history'" must be reviewed. Id. (quoting Floral Trade Council v. United States, 99 CIT 10, 41 F.Supp.2d 319, 323 n. 6 (1999)).

After applying the first prong of Chevron, if the court determines that the statute is either silent or ambiguous with respect to the issue at hand, then the question becomes whether or not the agency's interpretation of the statute is permissible. Chevron 467 U.S. at 843, 104 S.Ct. 2778. This inquiry focuses on the reasonableness of the agency's interpretation of the statute. "[A]dministrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." United States v. Mead Corp., 533 U.S. 218, 226, 121 S.Ct. 2164, 2171, 150 L.Ed.2d 292 (2001). Provided that Agriculture has acted reasonably and rationally in implementing the statute, the court may not substitute its judgment for the agency's. See Koyo Seiko Co. Ltd. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994).

A review of 19 U.S.C. § 2401e and its legislative history indicates that Congress did not clearly express an intent to limit the "net farm income"...