U.S. v. Massey, 03-3253.

• Decision Date: 25 August 2004
• Docket Number: No. 03-3253.,03-3253.
• Citation: 380 F.3d 437
• Parties: UNITED STATES of America, Appellee, v. Kathy D. MASSEY, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 437

380 F.3d 437

UNITED STATES of America, Appellee, v. Kathy D. MASSEY, Appellant.

No. 03-3253.

United States Court of Appeals, Eighth Circuit.

Submitted: April 16, 2004.

Filed: August 25, 2004.

Appeal from the United States District Court for the Eastern District of Arkansas, William R. Wilson, Jr., J Robert V. Krueger, argued, Mexico, MO, for appellant.

Stacey E. McCord, argued, Asst. U.S. Attorney, Little Rock, AR, for appellee.

Before LOKEN, Chief Judge, and BYE, Circuit Judge, and MAGNUSON,¹ District Judge.

BYE, Circuit Judge.

Kathy D. Massey was removed for misconduct from her position as a Program Technician (PT) by the Jackson County (Arkansas) Executive Director of the United States Department of Agriculture and its Farm Service Agency (FSA; agency). After exhausting her administrative appeals, Massey brought an action in the district court under the Administrative Procedures Act (APA), claiming the decision to terminate her was arbitrary and capricious or an abuse of discretion, violated her Fifth Amendment rights, and was not based on substantial evidence. The district court² granted summary judgment to the government, affirming the decision of the Executive Director for State Operations (EDSO). We affirm.

I

A. Factual Background

Massey was employed for fourteen years as a PT in the Jackson County FSA Office in Newport, Arkansas. She was in charge of reconstitutions³ and compliance programs. A county FSA office is run by a County Executive Director (CED), and the CED of the Jackson County FSA office was Floyd Campbell. The CED answers to a County Committee (COC) composed of farmers elected to serve from the local area. The COC answers to the Arkansas FSA State Committee (STC), composed of the State Executive Director and Arkansas farmers appointed by the Secretary of Agriculture. Disciplinary decisions concerning county employees are made by the STC. The State Executive Director is in charge of overall program implementation and direction. There is a District Director for each district who is responsible for the oversight of several county offices. During the time relevant to this case, Gary Roger Davis was the District Director overseeing Jackson County. Typically, a district director visits the county offices once a month.

In 1997, the Jackson County FSA Office came under investigation following concerns about allegations of farm program irregularities and conflicts of interest. Following initial conflicting reports, the Office of the Inspector General conducted an audit of the Jackson County FSA Office. Nathan Moore, an expert in reconstitutions, was one of the members of the audit team in charge of auditing the reconstitutions for the Jackson County Office for the time period of 1992 to 1998. The audit team discovered problems with reconstitutions, prevented planting, and ghost acres. It issued a report known as the "Jackson County Special Report," which formed the basis for the agency's disciplinary actions against Massey, CED Floyd Campbell, and another PT, Brenda Dawson.

The Special Report alleged that, inter alia, CED Campbell failed to disclose his financial interests in a farming operation in Jackson County, which presented a conflict of interest. The Special Report alleged five Jackson County FSA reconstitutions allowed producers to use the farm division and combination process to improperly build rice crop acreage bases (CAB)⁴ and thereby improperly receive government program payments for which the producers were not eligible. Ninety-six percent of the problems with the reconstitutions involved one Jackson County family farming operation, the John Conner family. CED Campbell was involved with his son in a farming operation which had business dealings with John Conner. Nathan Moore estimated these problems cost the government more than five million dollars. It is undisputed Massey performed the reconstitutions in question.

B. Procedural Background

The STC sent a letter to Massey notifying her she was suspended without pay pending removal for conduct issues and numerous program deficiencies.⁵ Massey's suspension letter provided two reasons for the STC's decision. The first reason stated she failed to properly perform the duties of her position as to reconstitution. The first specification under this reason stated from 1992 through 1995 Massey allowed producers to use the reconstitution process to build CAB and at the same time participate in the Acreage Reduction Program. The second specification under this reason stated from 1993 through 1995 Massey incorrectly loaded acreage reports regarding rice planted behind failed or prevented planted wheat acreage, as the rice should have been coded as "ghost acres" not to receive disaster payments and planted and considered planted acreage to build a rice CAB.

Reason two of Massey's suspension letter stated she had impeded the effectiveness of FSA operations. The first specification under this reason stated as a PT, she failed to effectively manage the programs for which she was directly responsible, resulting in overpayments of government monies and expenditures of numerous staff resources to correct these program deficiencies. The second specification under this reason stated as a PT, Massey, inter alia, improperly executed program documents, allowing the disbursement of government funds by permitting producers to use the reconstitution process to build rice CAB.

Following a non-adversarial proceeding, the STC concluded Massey did not provide sufficient responses to the charges and she was terminated.⁶ Massey appealed the STC's decision to the EDSO. Hearing Officer John Chott conducted a comprehensive five-day hearing. He recommended the second specifications of the charges involving her work on the Disaster, Acreage Reduction Program and Production Planning Contract programs not be sustained, concluding Massey neither improperly loaded acreage reports on the system, nor improperly accepted incorrect acreage reports or processed documents which allowed producers to collect benefits to which they were not entitled. The hearing officer did, however, sustain specification one of charge one and specification one of charge two concerning Massey's work on reconstitutions.

The EDSO adopted Chott's decision, and this determination is a final administrative decision. See 7 C.F.R. § 7.30. Massey then filed suit in the district court for judicial review of the agency's decision. The district court affirmed and this appeal followed.

II

When reviewing the district court's opinion upholding the administrative agency's decision, this court must render an independent decision on the basis of the same administrative record as that before the district court. Moore v. Custis, 736 F.2d 1260, 1262 (8th Cir.1984). This court should hold unlawful and set aside agency action if it is arbitrary, capricious, an abuse of discretion, contrary to constitutional right, or without observance of procedure required by law. Id. This standard of review is a narrow one and the court is not permitted to substitute its judgment for that of the agency. Sierra Club v. Davies, 955 F.2d 1188, 1192-93 (8th Cir.1992). The appellant bears the burden of proving the...