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Appeal Still Viable Because FSA Acted Arbitrarily
Craig RaysorNational AgLaw Center Research Associate
In Harts v. Johanns, 433 F. Supp. 2d 1251 (D. Kan. 2006), the United States District Court for the district of Kansas reversed and remanded the decision by the Farm Service Agency (FSA) regarding a land appraisal and recapture amount related to a shared appreciation agreement (SAA) after the court found that the agency acted arbitrarily and capriciously in refusing to hear specific evidence during the appeal process, and making factual findings not supported by substantial evidence.
An appraisal of the farmer's land occurred on December 16, 1998, to determine the amount of shared appreciation that would be recaptured pursuant to a SAA. See id. at 1254. The farmer made phone calls to FSA to dispute the appraisal on January 27, 1999 and February 2, 1999. FSA provided a written response outlining the appeal process sent on February 3, but it was dated January 12. See id. The farmer received the letter on February 5, and he requested a meeting to appeal on March 8, but FSA informed him on that day that "he was too late." Id. Subsequently, the farmer entered into three recapture payment suspension agreements in 1999, 2000, and 2001. Id. In 2003, FSA sent the farmer a notice of debt acceleration, which prompted the farmer to appeal to the National Appeals Division (NAD). Id. The NAD Hearing Officer held that the farmer was not entitled to appeal the 1998 appraisal, and the Director affirmed this decision shortly afterward. Id.
The farmer appealed to the district court claiming that FSA acted arbitrarily and capriciously by, among other things, not considering the misleading statement on March 8, 1999, and that the final decision by the FSA misstated the day on which the farmer received notice to appeal and the day the suspension agreement was entered into by the parties. See id. at 1256-59. The district court held that the agency's decision to use the January 12 to begin the 30-day appeal period instead of February 5 was arbitrary and capricious. Id. The court also held that the agency's decision not to address the farmer's complaint regarding the misleading statement "that he was to late" to request a meeting to appeal on March 8, 1999, was arbitrary and capricious. See id. at 1256-57.
The case was decided on June 7, 2006.