Summary of a Recent
Judicial Development in
Administrative Law

Producer Maintains Right to Challenge
Wetlands Determination

Steven White
National AgLaw Center Graduate Assistant

Summary of Decision

In B & D Land and Livestock Co. v. Veneman, No. C 03-3086-MWB, 2004 WL 1877602 (N.D. Iowa Aug. 17, 2004), the Untied States District Court for the Northern District of Iowa held that a producer did not waive his right to challenge a USDA wetland determination.

Background

In 1999, the Natural Resources Conservation Service (NRCS) determined that Plaintiff B & D Land and Livestock Co. (B & D) owned property that contained three wetlands areas. See id. B & D challenged the wetlands determinations, but later withdrew the challenge. See id. B & D subsequently removed some woody vegetation from the property. See id. It was later notified that this action "had 'converted' a wetland in violation of 16 U.S.C. § 3812-24 . . . 'by grubbing of trees and shrubs on this wetland area.'" Id. B & D appealed this determination to the FSA County Committee. See id. The Committee transferred the matter to the NRCS State Conservationist for review. See id.

The State Conservationist affirmed the original NRCS determination. See id. B & D then appealed the matter determination to the USDA's National Appeals Division (NAD). See id. at *3. The NAD Hearing Officer also affirmed the original NRCS determination, holding that "[t]he Agency's designation of a site as a converted wetland . . . [was] not erroneous. Id. B & D then appealed to the Director of NAD. See id. The Director upheld the Hearing Officer's determination, stating that there was substantial evidence supporting the NRCS's converted wetland decision. See id. The Director also rejected B & D's contention that the initial 1999 wetland determination should be reviewed because B & D "had 'waived the right for review of NRCS wetland determination' by filing an administrative appeal of the determination, but then withdrawing it." Id. In addition, the Director denied B & D's request for equitable relief. See id.

B & D was subsequently notified that he was ineligible for USDA program benefits for the year 2002 and subsequent years and that he was required to repay program benefits he had already received.

B & D's appealed to federal district court, requesting a declaratory judgment that the NRCS's action was arbitrary and capricious, that B & D's actions did not satisfy the wetland conversion criteria, and that the initial 1999 wetland determination was incorrect. See id. The Secretary filed a motion requesting that the matter be remanded for further administrative review. Id. at *5. The district court granted the Secretary's motion. See id.

In 2003, the NAD Director issued a decision on the remanded case. See id. It upheld the Hearing Officer's determination and denied B & D's request for equitable relief. See id. The Director also held that the USDA could not review the initial wetland determination because B & D had "relinquished its right for further review by other USDA officials" because of the withdrawing of its first appeal of the wetland determination. Id. B & D appealed this decision, which marked its second attempt to have the matter judicially reviewed. See id.

Arguments

B & D argued that the USDA erred in three instances, but the district court only addressed its claim that the USDA erred in refusing to review the initial wetland determination. See id. at *9. Specifically, B & D asserted that the

statutory and regulatory scheme permits a person adversely affected by a woody veg delineation to request a review of that woody veg delineation pursuant to 16 U.S.C. § 3822(a)(4)a and forbids the USDA to make a subsequent wetland delineation certification unless so requested by a person adversely affected by the existing determination pursuant to 16 U.S.C. § 3822(a)(6).

Id.

B & D argued it was adversely affected by the wetland determination, that there was evidence to show the wetland was converted before that time, and that the USDA relied on incorrect information in making its determination. See id.

The Secretary argued that "neither the agency nor this court has jurisdiction to review the 1999 wetland determination, because [plaintiff] dropped its NAD appeal concerning that determination and subsequently 'converted' the wetland." Id. The Secretary further asserted that B & D had exhausted its administrative remedies because neither the NRCS nor NAD had the opportunity to review the determination. See id.

Analysis and Holding

The court explained that "[w]hen the language of the statute is plain, the inquiry . . . ends with the language of the statute, for in such instances 'the sole function of the courts is to enforce [the statute] according to its terms.'" Id. at *10 (citations omitted). It also explained that B & D's assertion of error could be resolved by the proper reading of 16 U.S.C. § 3822(a). See id. at *11.

The court interpreted 16 U.S.C. § 3822(a)(4), the statutory provision relied upon by B & D, as allowing an administrative review of the initial wetland determination because B & D was now affected by the NRCS's determination of wetland conversion. See id. Section 3822(a)(4) provides that "'[a] final certification made . . . shall remain valid and in effect as long as the area is devoted to an agricultural use or until such time as the person affected by the certification requests review of the certification by the Secretary.'" Id. (quoting 16 U.S.C. § 3822(a)(4)). The court stated that § 3822(a)(4) allowed "a second administrative challenge to a wetland determination, after the final certification of the wetland has become final, when a person affected by the certification requests review of the certification." Id. at *12. In doing so, the court noted that the USDA relied on the fact that B & D had withdrawn its first appeal before it was notified of wetland violation. See id. at *14.

The court stated that B & D's withdrawal of its appeal "did not bar further review of the 1999 wetland determination when [plaintiff] was notified of a wetland 'conversion' violation." Id. Because this occurred before the final certification, the court determined that § 3822(a)(4) allowed B & D another opportunity "to challenge the correctness of the wetland determination, after that determination is 'final' and 'certified,' when the producer is affected by that wetland determination." Id.

B & D requested that the court find and declare that the NRCS erred in its action and that the matter be remanded with instructions to find the determination not correct. See id. The court stated that it did not have this power under the Administrative Procedures Act. See id. The court also stated that because "the agency determined that the question was 'unreviewable,' the agency never made necessary factual determinations regarding the correctness of the 1999 wetland determination that this court could review." Id.

The court therefore vacated the NAD Director's determination and remanded the matter to the agency for action in conformation "with the court's judgment that the USDA must first determine whether the 1999 wetland determination . . . was correct, where [plaintiff] challenges the correctness of that determination . . . as a party affected by [it]." Id. The court limited the NRCS to only making a conversion determination if it is determined that the 1999 wetland determination was correct. See id.

The case was decided on August 17, 2004; this summary was posted Feb. 16, 2005.