Monday, June 18, 2018
The “Swampbuster” rules were enacted as part of the conservation provisions of the 1985 Farm Bill. In general, the rules prohibit the conversion of “wetland” to crop production by producers that are receiving farm program payments. A farmer that is determined to have improperly converted wetland is deemed ineligible for farm program payments. But, an exception exists for wetland that was converted to crop production before December 23, 1985 – the effective date of the 1985 Farm Bill.
Under the Swampbuster rules, “wetland” has: (1) a predominance of hydric soil; (2) is inundated by surface or groundwater at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation typically adapted for life in saturated soil conditions, and (3) under normal circumstances does support a prevalence of such vegetation. 7 C.F.R. §12.2(a). In other words, to be a wetland, a tract must have hydric soils, hydrophytic vegetation and wetland hydrology.
However, there have been several prominent cases in recent years illustrating that the Natural Resources Conservation Service (NRCS) has trouble applying the definition as it attempts to determine whether a particular tract has wetlands. A recent decision of the United States Department of Agriculture (USDA) National Appeals Division (NAD) makes the point.
Wetlands under the farm program rules – that’s the topic of today’s post.
In B & D Land & Livestock Co. v. Schafer, 584 F. Supp. 2d 1182 (N.D. Iowa 2008), the plaintiff purchased the tract in issue in 1997. The tract had been farmed by the prior owner’s tenant from 1972 to 1986, and was enrolled in the Conservation Reserve Program (CRP) from 1987 to 1997. The plaintiff purchased the property in 1999, before the USDA determined that a portion of the tract was wetland. Despite that determination, the plaintiff removed some woody vegetation in 2000 because it was a nuisance to the plaintiff’s farming operation. The USDA determined that the plaintiff had “converted” 0.9 acres of wetland. However, the plaintiff claimed that the tract had been cropped before December 23, 1985, thereby making it prior converted cropland. Also, the plaintiff introduced evidence that a drainage tile had been installed before December 23, 1985, and that the tile, along with a road ditch, removed the wetland hydrology from the tract. But, USDA believed that the tile was not functioning as of December 23, 1985, because woody vegetation existed.
The plaintiff’s expert civil engineer, however, concluded that if the drainage tile had been plugged, when the USDA broke the tile during the on-site field investigation, the resulting hole would have filled full of water and saturated the ground and would have continued to be fed from water from further up the tile line. But, that did not occur. So, the plaintiff argued that the drainage tile coupled with the installation of a road ditch removed the presence of wetland hydrology from the tract. USDA disagreed, claiming that the presence of hydrophytic vegetation, by itself, demonstrated wetland hydrology was present.
The court didn’t buy the USDA’s argument. The court noted the statute clearly specifies that a “wetland” has three separate, mandatory requirements: (1) hydric soil; (2) wetland hydrology, and; (3) hydrophytic vegetation. In addition, the court noted that the presence of hydrophytic vegetation is not sufficient to meet the wetland hydrology requirement. In addition, the court determined that the USDA reached its conclusion by disregarding evidence contrary to its experts that were relevant on the issues involved.
Accordingly, the court ruled that the USDA hearing officer’s “final” determination must be overturned as arbitrary and capricious, an abuse of discretion, or contrary to law. As for attorney fees, the court stated that it would reserve the issue for consideration upon a specific application for attorney fees.
In a recent dispute involving a tract of land in Virginia, the USDA NAD again determined that the NRCS didn’t follow applicable rules when determining the existence of wetlands. In re Hood, No. 2017E000755 (USDA NAD, Jun. 14, 2018). The landowner participated in the NRCS Environmental Quality Incentives Program (EQIP) for almost a decade. The contract covered most of his 31-acre tract. In 2006, the NRCS determined that the landowner had converted 18.74 acres of wetland on the tract to cropland. The NRCS issued a certified wetland determination to that effect, but neither the landowner nor the NRCS took any other action at that time.
In 2016, the NRCS again reviewed the property for compliance with the wetland provisions. They conducted a site visit and again concluded that the landowner had converted 18.76 acres of wetland to cropland after November 28, 1990, by sheering stumps (the tract had formerly been used as a tree farm) and planting crops on former wetland. An appeal to the Farm Service Agency (FSA) County Committee which upheld the NRCS final technical determination and held the landowner ineligible for USDA farm program benefits. The landowner appealed the FSA decision to the NAD asserting that the FSA decision was wrong because the underlying 2006 NRCS wetland determination was inaccurate and “incompetent.” Specifically, the landowner claimed that the NRCS did not follow its soil map, and didn’t properly identify the actual soil on his tract. The landowner also claimed that the NRCS did not properly follow the “50/20” rule (a method to select dominant aspects for wetland evaluation. The landowner claimed that the FSA’s decision resulted from the erroneous 2006 wetland determination, and that current and former USDA personnel had advised him that his wetland was farmable because it lacked the characteristics for wetland and contained upland and non-wetland plants. The landowner also claimed that the tract was drained by the federal government in the 1930s via the installation of three ditches which lowered the water table, changed the land’s hydrology and made the tract dry. The landowner also claimed that the allegedly converted wetlands were atypical and the NRCS should have reevaluated them as such.
The landowner also asserted that the NRCS engaged in misconduct by targeting him by taking over 120 soil samples in search of a wetland as part of an ongoing feud that the NRCS had with him as a part-time FSA employee.
The USDA NAD Secretary determined that the FSA determination was erroneous. The landowner had sufficiently demonstrated that a natural event of water receding altered the hydrology of the land. This hydrological change, the NAD Secretary reasoned, established that the wetland determinations were no longer reliable indicators of site conditions on the land. The NAD Secretary specifically found that the United States Geological Survey (USGS) maps showed no wetlands or swampland related to the cleared part of the land or on any of the land not adjacent to the stream lying on the north/northwest of the property line. Indeed, the NRCS national cooperative soil survey maps, the NAD Secretary noted, showed that the land was comprised of non-hydric sandy loam soils.
The NAD Secretary did not have the authority to review the landowner’s claim that the FSA and/or NRCS committed misconduct. However, the NAD Secretary noted that the landowner could file a complaint with the USDA’s Office of Inspector General. The NAD Secretary noted that the FSA could seek NAD Director Review by filing a request within 30 days of the Secretary’s decision.
When the government’s position is not substantially justified, attorney fees and other expenses can be awarded. In the Iowa case referred to above, the plaintiff’s lawyer did, indeed, make an application for $57,768.59 in fees and $683.00 in costs, $3,414.17 in expenses, and $13,380.43 in other fees and costs. Those fees, costs and expenses were the result of work performed on the case that the USDA chose to drag out for over eight years. The Equal Access to Justice Act (EAJA) allows for an award of attorney fees in cases where the plaintiff prevails against the U.S. Government and satisfies three requirements – (1) a final judgment has been rendered; (2) the plaintiff prevailed; and (3) the government’s position was not substantially justified. The USDA denied the plaintiff’s request for fees, claiming instead that their position was substantially justified, that special circumstances made an award of fees unjust, and that the plaintiff’s lawyer put excessive hours in on the case at too high an hourly rate and didn’t have any particular expertise in wetland matters.
The court noted that fees and other expenses are to be awarded under the EAJA unless the government’s position was substantially justified or special circumstances would make awarding fees and costs unjust. To be substantially justified, the government’s position must only have a reasonable basis in law and fact. That’s a rather low threshold. Basically, if the government can come up with any reasonable interpretation of statutory law, they win and no award of fees and costs will be required. In addition, even if the government loses in court, that doesn’t create a presumption that the government’s position was not substantially justified. But, the government still has the burden of proof to establish that its position was substantially justified.
The court held that the government had absolutely no reasonable basis for its “conflation of the separate “hydrophytic vegetation” and “wetland hydrology” requirements for a “wetland,” and improperly placing the burden on B&D to demonstrate why wetlands were not present based on criteria not identified in the statute or regulations.” The court also noted that USDA disregarded “saturation” evidence, disregarded evidence that wetland hydrology had already been removed because of pre-existing drainage and the adjacent road and the ditch. The court, in a particularly pointed comment, stated:
“At each stage of the proceedings, the government sought to uphold its prior “wetlands” determination, without regard to any evidence or law to the contrary, suggesting an entrenched bureaucracy’s refusal to admit error, not an interest in proper application of the law.”
The court also held that no special circumstances existed to deny an award of fees and costs. As for the government’s claim that the plaintiff’s attorney billed too many hours at too high an hourly rate, the court noted that the statutory rate specified $125/hour as a maximum rate unless the attorney had particular expertise. The plaintiff’s attorney had billed some work on the case at $175/hour and other work at $185/hour. The attorney justified the fee rate based on an inflation adjustment to the statutory rate and the attorney’s specialized skill in wetland matters. The court agreed on both points. USDA complained that the plaintiff’s lawyer didn’t need to put time in on a brief for injunctive relief because USDA had promised that it wasn’t necessary because they would continue to pay federal farm program benefits. The court wouldn’t bite, stating “the court…cannot…say…that the government’s assurances were so unequivocal or binding on the government that no preliminary injunction was warranted, particularly in light of the credible threat of bankruptcy for the plaintiff posed by any enforcement action by the government during the pendency of this action.”
In the Iowa case, the USDA basically harassed the plaintiff with bogus wetland violation claims for many years which placed the plaintiff within the potential peril of bankruptcy. In addition, the USDA continued to maintain its bogus claims in an attempt to avoid paying the plaintiff’s attorney fees. In the Virginia matter, the USDA/NRCS was conducting itself similarly and the NAD Secretary would have none of it.
The government’s conduct in both of these matters is something that the U.S. Court of Appeals for the Eighth Circuit was concerned with in Barthel v. United States Department of Agriculture, 181 F.3d 934 (8th Cir 1999). In that case, the court stated, in rejecting the USDA’s interpretation of the statute governing wetland drainage activities, that “…there is no worse statute than one misunderstood by those who interpret it.”
The USDA is now under new leadership, but lower level field staff remain from prior Administrations. Perhaps the requirement to pay attorney fees and costs for unreasonable positions will cause them to take more care to follow their own regulations when delineating wetlands.