USA. v. Dierckman

• Decision Date: 11 January 2000
• Docket Number: No. 98-4131,98-4131
• Citation: 201 F.3d 915
• Parties: (7th Cir. 2000) United States of America, Plaintiff-Appellee, v. Jerry M. Dierckman, Defendant-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 915

201 F.3d 915 (7th Cir. 2000)

United States of America, Plaintiff-Appellee, v. Jerry M. Dierckman, Defendant-Appellant.

No. 98-4131

In the United States Court of Appeals For the Seventh Circuit

Argued September 15, 1999

Decided January 11, 2000

Appeal from the United States District Court for the Southern District of Indiana, New Albany Division. No. 96-112-C-B/G--Sarah Evans Barker, Chief Judge. [Copyrighted Material Omitted] Before Cudahy, Coffey and Easterbrook, Circuit Judges.

Cudahy, Circuit Judge.

In 1993, the United States Department of Agriculture (USDA) declared Jerry Dierckman¹ ineligible for all USDA farm program benefits, retroactive to the 1991 crop year. Ineligibility was based on Jerry's violation of the Swampbuster provisions of the Food Security Act of 1985 (FSA), as amended by the Food, Agriculture, Conservation, and Trade Act (FACTA). The United States sued to recover the $92,703.00 in farm benefits paid to Jerry from 1991 to 1993. In that lawsuit, Jerry challenged the constitutionality of certain portions of the FSA and the validity of certain USDA regulations promulgated under the FSA, and he requested a declaration that his eligibility for benefits be reinstated. Both parties filed cross-motions for summary judgment, and on October 21, 1998, the district court granted summary judgment in favor of the government. Jerry appeals, and we affirm.

I. Legal Background

Congress adopted the Food Security Act on December 23, 1985. Pub. L. No. 99-198 (1985) (codified at 16 U.S.C. sec. 3801 et seq. (1986)). By enacting the FSA, Congress intended to "discourage the draining and cultivation of wetland that is unsuitable for agricultural production in its natural state." S. Rep. No. 99- 145 at 303 (1985), reprinted in 1985 U.S.C.C.A.N. 1103, 1969. To further this goal, Congress included the Swampbuster provision of the FSA, which, in its initial form, stated that "following December 23, 1985, any person who in any crop year produces an agricultural commodity on converted wetland shall be ineligible for" various USDA farm benefit programs. 16 U.S.C. sec. 3821 (1986).

In 1990, Congress decided to toughen up Swampbuster in the Food, Agriculture, Conservation, and Trade Act. See Pub. L. No. 101- 624, Title XIV, sec. 1421(b) (1990) (codified at 16 U.S.C. sec. 3801 et seq. (1994)). While retaining the original 1985 provision, FACTA added a new provision which provided that "any person who in any crop year subsequent to November 28, 1990, 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 shall be ineligible for" USDA farm benefits. 16 U.S.C. sec. 3821(b) (1994).² After the 1990 Swampbuster amendments, a person could become ineligible for USDA farm benefits either by (1) converting wetland and growing crops on the land if the conversion was accomplished after December 23, 1985, or (2) merely converting wetland after November 28, 1990, so that crops could be grown on the land. See 16 U.S.C. sec. 3821 (1994); 7 C.F.R. sec. 12.4 (1994).

The ineligibility determination under the Swampbuster provisions involves multiple agencies within the USDA. The Soil Conservation Service (SCS)³ determines whether a wetland or converted wetland exists on a particular farm and whether production of a crop is possible on any converted wetland. See 7 C.F.R. sec. 12.6(c). The initial SCS determination is made by the district conservationist. See id. The district conservationist's decision is appealable to the area conversationist, then to the state conservationist, and finally to the Chief of the SCS at USDA headquarters in Washington, D.C. See id. After the SCS makes its technical determination regarding the existence or conversion of a wetland, another USDA agency, the Agricultural Stabilization and Conservation Agency (ASCS),⁴ determines whether any exemptions apply to the conversion of the wetland. See 7 C.F.R. sec. 12.6(b). The ASCS then determines the eligibility of any farmer who applies to the ASCS for USDA farm benefits. See 7 C.F.R. sec. 12.6(a). These ASCS determinations are first made by an ASCS county committee. An appeal can be taken to the appropriate state committee, then to the Deputy Administrator for State and County Operations (DASCO) and finally to the National Appeals Division (NAD) of the ASCS. See 7 C.F.R. sec. 12.6(b).

II. Factual Background

The facts of this case can be nicely segmented into three phases. In the first phase, the SCS determined that wetlands and converted wetlands were present on Jerry's farm but that no Swampbuster violation existed as of early 1991. In the second phase, the SCS determined that additional conversions took place in 1991 in violation of the Swampbuster provision prohibiting the conversion of a wetland after November 28, 1990. In the third phase, the ASCS determined that both Jerry and Milton were ineligible for all USDA farm benefits as a result of the conversion.

A. The Wetland Determination

Jerry Dierckman is a farmer who grows crops both on his own land and on land that he rents from others, including his father, Milton Dierckman. The land relevant to this appeal is located in Franklin County, Indiana, and Jerry rented it from his father. In 1986, Milton cut down the trees on roughly the eastern two-thirds of the northern portion of this property. The stumps were left in the ground for a number of years afterwards--thus continuing to preclude farming on that portion of the farm--but in August of 1990, Gunter Excavating Company (Gunter) was hired to dig up the stumps, fill the holes and haul the stumps away. On September 3, 1990, Gunter issued a written proposal to Jerry concerning the work, and Gunter began work shortly thereafter. Gunter issued a bill for its work to Jerry on September 25. The bill shows "work ordered by" Jerry, but Milton paid this bill on October 10. Due to heavy rains in October of 1990, the excavating machinery bogged down, and Gunter could not continue its work of removing tree stumps. For the next several months, the land remained in the same condition, with some holes filled, some stumps remaining in the ground, other stumps scattered about the property and some holes left unfilled.

Jerry wanted USDA farm benefits for the land that he had rented from his father. In order to receive these farm benefits from the USDA for the 1991 crop year, Jerry was first required to get his eligibility certified. On January 7, 1991, Jerry completed ASCS Form AD-1026, entitled "Highly Erodible Land and Wetland Conservation Certification." AR, vol. 1 at 199.⁵ On this form, Jerry indicated that he intended to convert "wet areas" and intended to grow crops on converted "wet areas" on his farm.⁶ Needless to say, these responses attracted the attention of the ASCS, which referred the matter to the SCS. After receiving the referral, the SCS set out to determine if any of Jerry's "wet areas" were wetlands protected by the Swampbuster provisions of the United States Code. In March of 1991, an SCS district conservationist determined that the northern portion of Jerry's farm contained both wetlands and converted wetlands. AR, vol. 1 at 191. The district conservationist determined that the conversion of the wetlands had begun in August of 1990 but had ended before the more stringent Swampbuster provision went into effect on November 28, 1990. Thus, with respect to the already converted wetlands, Jerry was not in violation of Swampbuster because no crops had been planted on them. The district conservationist informed Jerry that any additional conversion of any additional wetlands, however, would be a Swampbuster violation, whether crops were grown or not. AR, vol. 1 at 191. After the district conservationist's determination, Jerry filed another Form AD-1026, this time stating that he had no plans to convert wet areas on the land.⁷ On March 19, 1991, however Jerry had appealed to the area conservationist the determination that the farm contained wetlands, stating: "I request a redetermination and permission to continue to clear the area in question. . . . Intended land use will be hayland, permanent pasture." AR, vol. 1 at 197.

On May 17, 1991, the area conservationist denied the appeal, and on July 11, the area conservationist's determination was affirmed by the state conservationist after members of the state conservationist's wetland appellate review team visited the farm and performed some field tests. In September of 1991, the administrative appeal process for the wetland determination ended with the affirmance by the SCS of the state conservationist's determination. In a letter to Jerry Dierckman dated September 27, the Chief of the SCS explained its conclusions: "We have determined that the areas in standing trees and stumps are wetlands (W), and the areas where the stumps have been removed are converted wetlands (CW). This decision supports the earlier decision of the SCS State Conservationist. . . ." AR, vol. 1 at 127. The Chief also explained that because the converted wetlands had been converted before November 28, 1990, and crops had not been grown on those converted wetlands, there had been no Swampbuster violation as of that time. Id. The Chief further made clear that any additional conversion activity would result in USDA ineligibility. Id.

B. The Conversion Determination

On December 18, 1991, the district conservationist and an SCS technician visited the part of Jerry's farm previously designated as wetlands and noticed changes to the property. Since their visit the prior spring, some additional stumps had been removed from the ground and moved into rows, the holes had been filled and the land appeared to have been root raked. The ground was now farmable. The visitors concluded that this work had occurred after November 28, 1990, and constituted a conversion of a...