Wooten v. U.S. Secretary of Agriculture

• Decision Date: 06 July 2006
• Docket Number: Slip Op. 06-101. Court No. 05-00208.
• Citation: 441 F.Supp.2d 1253
• Parties: Henry H. WOOTEN, III, Plaintiff, v. UNITED STATES, SECRETARY OF AGRICULTURE, Defendant.
• Court: U.S. Court of International Trade

441 F.Supp.2d 1253

Henry H. WOOTEN, III, Plaintiff, v. UNITED STATES, SECRETARY OF AGRICULTURE, Defendant.

Slip Op. 06-101. Court No. 05-00208.

United States Court of International Trade.

July 6, 2006.

Miller & Chevalier Chartered, Washington, DC (Daniel P. Wendt, and Elizabeth Puskar) for Plaintiff.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; Patricia M. McCarthy, Assistant Director; Delfa Castillo, Trial Attorney, U.S. Department of Justice, Civil Division, Commercial Litigation Branch; and Jeffrey Kahn, Attorney-Advisor, Office of the General Counsel, International Affairs & Commodity Programs Division, U.S. Department of Agriculture, of Counsel, for Defendant.

OPINION

WALLACH, Judge.

I Introduction

This matter comes before the court on Defendant's Motion to Dismiss ("Defendant's Motion") filed on January 18, 2006, and Plaintiff's Motion for Judgment Upon Agency Record ("Plaintiffs Motion") filed on February 22, 2006. Plaintiff has failed to establish the facts necessary to warrant his eligibility for trade adjustment assistance benefits. Defendant's Motion is granted and Plaintiffs Motion is denied. This court has jurisdiction pursuant to 19 U.S.C. § 2395 (2004).

II Background

On November 25, 2003, the Foreign Agriculture Service ("FAS") approved the Catfish Farmers of America's petition for certification for eligibility for trade adjustment assistance for catfish producers in the states of Alabama, Arkansas, Florida, Georgia, Idaho, Illinois, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nevada, North Carolina, Ohio, Oklahoma, South Carolina, Texas, and Utah. See Trade Adjustment Assistance for Farmers, 68 Fed. Reg. 66,072 (Nov. 25, 2003). On January 23, 2004, Plaintiff Henry Wooten, a catfish farmer from Arkansas, submitted his application for TAA benefits and also attended the requisite training required under the TAA program. Plaintiffs Opposition at 3. The U.S. Department of Agriculture ("Defendant" or "Agriculture") denied Plaintiffs application for trade adjustment assistance ("TAA") because his net fishing income did not decline from 2001 to 2002. Specifically, Agriculture found that since Plaintiffs fishing enterprise lost less money in 2002 than in 2001 he was ineligible for TAA benefits. Defendant's Motion at 6-7. Plaintiff filed a Summons and Complaint challenging Defendant's determination.

III Arguments

Defendant argues that Plaintiff has failed to state a claim upon which relief may be granted and that this matter should be dismissed. Defendant says that Plaintiff has not alleged facts sufficient to warrant eligibility for TAA benefits because Plaintiff's net fishing income did not decline in 2002 as compared to 2001 as required by the statute.

Plaintiff argues that Agriculture's regulations are arbitrary and capricious because they do not give discretion to Agriculture to distribute TAA benefits to those fisherman that are experiencing economic hardship although they did not suffer a decline in net fishing income. Plaintiff also claims that Agriculture has unreasonably defined net farm income to include net farm loss contrary to Congressional intent.

IV

Applicable Legal Standard

A Motion to Dismiss

When reviewing a motion to dismiss, a court must decide whether all factual allegations taken as true and construed in the light most favorable to the plaintiff are sufficient to state a legal claim. See Degussa Canada Ltd. v. United States, 889 F.Supp. 1543, 1545 (CIT 1995) (citing Halperin Shipping Co., v. United States, 13 CIT 465, 466 (1989)). Dismissal of a complaint is appropriate when it appears that plaintiff can prove no set of facts which would entitle him to legal or equitable relief. See Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1565 (Fed.Cir.1988) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

B Motion for Summary Judgment

This 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); see Van Trinh v. U.S. Sec'y of Agric., 395 F.Supp.2d 1259, 1265 (CIT 2005); see also Former Employees of Swiss Indus. Abrasives v. United States, 17 CIT 945, 947, 830 F.Supp. 637, 639 (1993). Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Courts have found that substantial evidence "is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the [same] evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted). The scope of review of the agency's actions is limited to the administrative record. Defenders of Wildlife v. Hogarth, 25 CIT 1309, 1315, 177 F.Supp.2d 1336, 1342-43 (2001). 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).

V Discussion

A Plaintiff Has Not Stated a Claim Upon Which Relief May be Granted

Defendant claims that since Plaintiff did not have a decrease in net farm income from 2001 to 2002, Plaintiff's Amended Complaint does not allege facts sufficient to warrant eligibility for TAA benefits and consequently fails to state a claim upon which relief may be granted. Defendant's Motion at 9. Specifically, Defendant argues that Plaintiff never submitted verifiable net fishing income during the application review period and only provided the requisite documentation after the court granted his motion to supplement the record. Id. at 10. Defendant further asserts that Plaintiff's income documentation indicates that he did not suffer a larger loss in 2002 than he did in 2001, and accordingly failed to qualify for TAA benefits. Id. at 10-11; Defendant's Reply at 1. Since, Plaintiff failed to provide proof of his qualification for TAA cash payments, Defendant argues that Plaintiff's Amended Complaint does not state a claim upon which relief can be granted and thus should be dismissed. Id. at 15. Furthermore, Defendant requests that if the court does not grant its motion to dismiss, that it affirm Agriculture's determination denying Plaintiff's application for TAA benefits. Defendant's Response at 1.

Plaintiff asserts that although he suffered a larger loss in fishing income in 2001 as compared to 2002, he is still enduring economic hardship and should qualify for TAA benefits. Plaintiff's Motion at 1-2. Plaintiff admits, however, that "under Agriculture's regulations implementing the TAA for Farmers program and the current administrative record, as supplemented, Mr. Wooten cannot show that his net farm income (as defined by regulation to included net farm losses) in 2002 was less than his net farm income in 2001." Id. at 5.

The TAA statute at 19 U.S.C. § 2401e(a)(1) articulates the basic qualifying requirements which must be met by petitioners prior to receiving TAA benefits. One of the primary conditions for the grant of TAA is that "[t]he producer's net farm income (as determined by the Secretary) for the most recent year is less than the producer's net farm income for the latest year in which no adjustment assistance was received by the producer under this part." 19 U.S.C. § 2401e(a)(1)(C). Agriculture's regulations define "net fishing income" as "net profit or loss, excluding payments ... reported to the Internal Revenue Service for the tax year that most closely corresponds with the marketing year under consideration." 7 C.F.R. § 1580.102. Agriculture's regulations require a producer to submit a certification that "net farm or fishing income was less than during the producer's pre-adjustment year." 7 C.F.R. § 1580.301(e)(4).

In this instance, Plaintiff originally failed to provide the required certification but was permitted to supplement the record during the course of this litigation. See Wooten v. United States Sec'y of Agric., 414 F.Supp.2d 1313 (CIT 2006). As Defendant correctly asserts, Plaintiff, despite that supplementation, still fails to demonstrate that his income declined between 2001 and 2002. Plaintiff himself admits that he cannot demonstrate that his net fishing income (using the current definition to include net fishing losses) was less in 2002 than in 2001. Plaintiff's Response at 5. In fact, his reported net loss was ($86,470) in 2002, as compared to a net loss in 2001 of ($125,671), an actual increase in income of $39,201. Plaintiff's Response at 2. Taking all the allegations in Plaintiff's Amended Complaint in the light most favorable to him, he continues to be ineligible for TAA cash benefits pursuant to 19 U.S.C. § 2401e because there was no decrease in income between 2001 and 2002. Degussa Canada Ltd., 889 F.Supp. at 1545. As a result, unless Defendant's application of the statute is not in accordance with law, this matter must be dismissed for failure to state a claim upon which relief may be granted.

B The Department of Agriculture's Definition of Net Fishing Income is in Accordance with Law

Plaintiff argues that Agriculture's definition of net farm income is arbitrary, capricious, and contrary to Congressional intent. Plaintiffs Motion at 1, 5. Plaintiff asserts that under Agriculture's current definition of net farm income, his income in 2002 is "deemed to be greater" than his income in 2001 because "his...