Summary of a Recent
Judicial Development in
Administrative Law

USDA Conducted Improper Wetlands Delineation by Failing to
Appropriately Apply Swampbuster Provisions

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In B & D Land & Livestock Co. v. Schafer, 584 F.Supp.2d 1182 (N.D. Iowa 2008), the United States District Court for the Northern District of Iowa held that the United States Department of Agriculture's (USDA) delineation of wetlands on plaintiff farmer's property and conversion determination were arbitrary and capricious, an abuse of discretion, and otherwise contrary to law. Specifically, the court found that the agency hearing officer improperly conflated statutory requirements, disregarded pertinent saturation evidence, and disregarded evidence involving the removal of wetland hydrology.

Background

Farmer produced soybeans and corn on land located in Cerro Gordo County, Iowa. Id. at *1. In 1999, the USDA determined that farmer's land contained wetlands, and later, in 2000, the agency determined that farmer improperly converted 0.9 acres of wetland to produce agricultural commodities in violation of the Swampbuster Act, 16 U.S.C. §§ 3801, 3821-24. Id. The conversion determination jeopardized farmer's receipt of farm program payments. Id. On July 10, 2002, farmer sought judicial review of the agency's decisions. Id. On review, the instant court enjoined the agency from continuing or completing enforcement actions against farmer and remanded the decision back to the agency. Id. After remand, the USDA affirmed its prior determination, finding that farmer converted wetlands and was not entitled to equitable relief from the consequences of conversion. Id. at *2.

Thereafter, farmer again sought judicial review in the instant court. Id. The court vacated the agency's decision in its entirety and remanded the case back to the agency for a decision in conformity with its holding. Id. After engaging in further administrative proceedings, the agency notified farmer that it had re-examined the sites in question and the records, and determined that the 1999 wetland and conversion determinations were correct. Id. Farmer appealed to the National Appellate Division (NAD) of the USDA. Id. The NAD hearing officer upheld the wetland conservation determination. Id. Thereafter, farmer brought the instant action seeking judicial review of the NAD hearing officer's final determination. Id.

Arguments

Farmer contended that the USDA's wetland determination was arbitrary and capricious because the agency conflated the wetlands statutory requirements, eliminated the requirement of wetland hydrology by looking only at presence of hydric soils and hydrophytic vegetation on the land in question, and ignored wetland hydrology evidence. Id.

The USDA asserted that it made the proper wetlands determination and conversion determination, and that the evidence on which farmer relied was either irrelevant to the statutory definition of wetlands or was not credible. Id.

Analysis and Holdings

The court explained that the case turned on whether the USDA properly applied the statutory and regulatory definitions of "wetland" to the parcels of land at issue. Id. at *11. The Swampbuster Act defines "wetland" as "land that has a predominance of hydric soils, is inundated or saturated by surface or groundwater at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation, and under normal circumstances does support a prevalence of such vegetation." Id. at *11-12 (quoting 16 U.S.C. § 3801). To satisfy the statutory definition of wetland, the court held that all three of the listed requirements, as separate and mandatory requirements, must be met. Id. at *12.

Because the hearing officer treated the presence of hydrophytic vegetation as adequate to prove the presence of wetland hydrology, the court held that the officer conflated the requirements. Id. at *16. That conflation made the hearing officer's decision arbitrary and capricious, an abuse of discretion, and otherwise contrary to law. Id. In addition to conflating the requirements, the hearing officer's decision also ran contrary to the soil sample evidence before the agency and contrary to evidence showing that wetland hydrology was removed on one parcel by a tile drainage system and on another parcel by underlying sand deposits and disturbance of the wetland hydrology by an adjacent county road and ditch. Id. at *17. The court held that the errors in the hearing officer's decision could not be attributed to a difference in view or a product of agency expertise. Id. at *19.

The case was decided on November 5, 2008.