Failure To Appeal Final Wetland Determination Proves Costly.

The plaintiffs’ predecessor owned a tract of farmland and in 1994 sought an NRCS wetland determination for the tract because he was considering converting it to crop production.  The NRCS concluded that the tract contained approximately 38 acres of wetlands the conversion of which would make the owner ineligible for USDA farm program subsidies.  The owner did not appeal the NRCS decision, but did seek another wetland determination for the tract in 2004.  This time, the NRCS determined that the tract contained at least 28 acres of wetlands.  The NRCS notice of its decision to the owner didn’t inform the owner of his appeal rights as required by regulations.  The owner died and the tract passed to the plaintiffs.  The NRCS notified the U.S. Army Corps of Engineers (Corps) of its wetland determination.  The plaintiffs hired a private company to do wetland mapping for the tract, and the company concluded that the tract did not contain wetlands.  But, the NRCS argued that the private mapping did not meet government regulations, and the Corps determined that part of the tract had federal jurisdictional wetlands for purposes of the permit requirements of the Clean Water Act (CWA).  The plaintiffs converted the tract to crop production use and their acreage determination request triggered another NRCS investigation.  This time, NRCS determined that the tract contained “at least 13.5” acres of wetlands that had been converted.  The NRCS also determined that the plaintiffs were not eligible for a minimal effects exemption.  As a result, the plaintiffs were disqualified for farm program subsidies.  The USDA National Appeals Division (NAD) affirmed, and barred the plaintiffs from presenting evidence that no wetland existed on the tract before conversion to crop production via a regulation that provides that any appeal of a final determination is limited to a determination that the wetland was converted.  On judicial review, the trial court affirmed the NAD on the question involving the scope of judicial review and determined that it lacked jurisdiction over the minimal effects issue because the plaintiffs didn’t raise the issue during the administrative process.  On appeal, the appellate court affirmed.  The 2004 wetland determination did not displace the 1994 determination, which was not appealed and the 2004 request was not one for review of the 1994 determination.  The appellate court also determined that issue exhaustion applied to the minimal effects issue and upheld the trial court on that issue.  Bass v. Vilsack, No. 14-1017, 2014 U.S. App. LEXIS 24633 (4th Cir. Dec. 31, 2014).   

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