Seventh Circuit Sides With Landowner In Wetlands Determination Case
The Seventh Circuit recently ruled that the USDA acted arbitrarily and capriciously when it treated several acres of an Indiana couple’s farm as a converted wetland and rendered their entire farm ineligible for USDA benefits. Boucher v. USDA, No. 16-1654 (7th Cir. 2019).
The August 2019 ruling ends a 16-year battle with NRCS that began nearly a decade after a farmer cut down nine trees on his property. In a stinging rebuke, the Court recounted how USDA repeatedly failed to follow applicable law and agency standards, disregarded compelling evidence showing that the acreage never qualified as wetlands, and kept shifting its explanations for treating the acreage as converted wetlands. The court reversed a district court order that had supported the USDA ruling, and remanded with instructions to enter judgment in favor of the farmer’s widow.
Since 1985, Swampbuster has conditioned the availability of farm program benefits on a farmer’s willingness to protect wetlands on his or her property. 16 U.S.C. §§ 3801, 3821-24. Farmers who convert wetlands are denied benefits. Initially, the loss of farm program benefits was proportionate to the amount of wetland converted. In 1990, however, a Swampbuster amendment provided that converting any wetland would cause the farmer to lose all agricultural payments or government farm loans. 16 U.S.C. § 3821(a). The 2014 Farm Bill added crop insurance premium assistance to the list of benefits lost when a wetland is converted. Wetlands converted prior to December 23, 1985, are not subject to Swampbuster, as long as the farmer continues to farm the ground. These acres are prior converted cropland.
To make a wetland determination, NRCS must assess whether the area of interest supports a prevalence of (1) hydrophytic vegetation, (2) a predominance of hydric soils, and (3) wetland hydrology under normal circumstances. 7 C.F.R. § 12.30(c)(7). All three characteristics must be present for a wetland determination to be made.[i] In some atypical situations where vegetation has been altered or removed, the NRCS may obtain evidence of hydrophytic vegetation by examining an adjacent area. This comparison site, however, must have the same topographic position, soils and hydrology, as the altered area. A comparison site can only be used if the NRCS is convinced that the disputed area has (1) hydric soil, (2) the requisite hydrology (or potential hydrology if altered) to support hydrophytic vegetation, and (3) hydrophytic vegetation that has been removed or altered.
Preliminary Wetland Determination
The case at hand involved an Indiana farm that had raised livestock and grain for more than 150 years. The Bouchers had purchased the farm in the late 1980s, after Swampbuster had gone into effect. The USDA sent them a notice shortly after their purchase that the farm contained hydric soils and thus had the potential for a wetland classification. A Wetland Inventory taken in 1989, however, did not identify any wetlands on the property.
Around 1994, Mr. Boucher began cleaning up a section of his farm that had been used for illegal dumping by unknown persons. To reduce cover for this dumping, Mr. Boucher removed five trees. A few years later, he removed four more trees. The nine trees had occupied approximately 12/10,000th of an acre. Eight years later, a USDA representative visited the farm to consider a request for a conservation filter strip around the perimeter of the farm. The USDA employee reported a potential wetland violation based upon the tree removal.
An NRCS conservationist investigated and completed a routine wetland determination. She found no significant disturbance and no surface water. She also found that any soil saturation was at a depth greater than 12 inches. Despite these findings, she incorrectly assumed that the hydrology had been drained through the installment of field tile. She thus deemed the parcels “atypical” and selected as a comparison site an adjacent, unfarmed wetland in a depression. Based upon her analysis of this comparison site, the conservationist determined that the parcels where Mr. Boucher had removed the trees contained 2.8 acres of converted wetland.
In 2003, the NRCS sent a preliminary determination with these findings to Mr. Boucher, who hired an attorney and requested review. Mr. Boucher asserted that the only trees he had removed were those unlikely to be found in wetlands. He also asserted that no leveling or drainage work had been performed on the parcels. The case was referred to the NRCS state conservationist for review. A site visit took place in September of 2003, but the USDA retained no record or documentation of this meeting. Mr. Boucher believed he had proven his position in this visit, and no further communication was received from the USDA for 10 years. Mr. Boucher died in early 2004.
Final Technical Determination
After her husband’s death, Mrs. Boucher took over the farm and leased it to a tenant who asked if he could remove a house and barn from a portion of the property. In 2012, she sought permission from the USDA for the removal. This inquiry prompted the agency to discover that a final determination had never been made regarding the Boucher’s 2003 appeal. USDA representatives again visited the property and issued a new preliminary technical determination that the parcels at issue were converted wetlands. Shortly thereafter, NRCS issued a final technical determination affirming its 2003 preliminary determination, but reducing slightly the designated wetland acres to 2.6. The USDA again assumed without evidence that the land had been drained and used the adjacent wetland as a reference site to evaluate the parcels at issue since hydrophytic vegetation was not visible.
Mrs. Boucher appealed the decision to the National Appeals Division, again submitting evidence that the parcels at issue did not have drainage tiling, but that even if they did, it was installed before 1985. She also submitted evidence that the land did not demonstrate inundation or saturation with water, that it was not in a depression, and that the removed trees had not been hydrophytic. In fact, she asserted, as had her husband, that they were trees unlikely to occur in a wetland. The agency continued to argue on appeal that the land had been drained and that a proper investigation thus required the use of a comparison site. The hearing officer ruled against Mrs. Boucher, and that decision was upheld by the Director. On appeal, the district court granted summary judgment for NRCS, and Mrs. Boucher appealed to the United States Court of Appeals for the Seventh Circuit.
Seventh Circuit Opinion
The Seventh Circuit reversed the district court’s order and remanded, directing the district court to enter judgment for Mrs. Boucher. In painstaking detail, the court recounted the many errors the USDA made during the 16-year ordeal. In the end, the court ruled that the agency’s decision was not entitled to deference because it was arbitrary and capricious, showing a disregard for both the facts and the law.
Primarily, the court found that NRCS personnel had assumed without evidence that the Bouchers' parcels had been drained of water through the installation of field drainage tile and that the parcels were located in a depression. Neither assumption was true, but the USDA used that evidence to find that the parcels had been altered, thus justifying a comparable site analysis. The NRCS then used that comparable site data to determine that the parcels at issue were converted wetlands. The supposed comparable site, however, was not comparable at all. Field 7, the adjacent land used for comparison, was an unfarmed wetland in a depression. Even under the most favorable reading of the government’s preferred regulation and guidance, the court found that Field 7 was not a proper reference site. Even so, before using any comparable site data, NRCS was required to verify that an alteration had been made and the date of that alteration. It was also required to assess the effect of that alteration and obtain all possible evidence to characterize the previous hydrology. These steps were not taken. In fact, NRCS had no evidence that the land had been tiled after 1985.
In light of these findings, the court admonished the government for trying to “change the subject” when it realized on appeal the shortcomings of its findings. Before the Seventh Circuit, USDA argued that the basis for using the atypical analysis (and thus a comparison site), was not the assumption of drainage tile, but the removal of trees. In response, the Court stated that it was “not sure what 600-page administrative record the government [was] looking at, but it does not appear to be the same one we have.” The court said that the case should have been over when Mrs. Boucher provided evidence that the USDA experts should have found or recognized a decade earlier. But, the USDA continued to press its appeal.
The court also firmly rejected the USDA’s backup argument that the removal of woody hydrophytic vegetation from hydric soils is—by itself—sufficient to declare the area a “converted wetland.” This approach, the court reasoned would directly conflict with the statute’s focus on hydrology. The court also noted that hydrology was at the heart of the dispute but that none of the experts NRCS sent to the Bouchers' farm was a hydrologist. Furthermore, the court stated that the agency’s sudden assertion on appeal that the removal of nine trees removed wetland hydrology from several acres of land was incompatible with “common sense” and the agency’s own expert notations, which had stated that the tree removal had “minimal impact” on the area.
Given the errors and unfounded assumptions girding the USDA’s determination, the court held that the resulting decision was arbitrary and capricious. The district court was directed on remand to enter judgment for Mrs. Boucher.
Monitoring New Rule
Although this case was a win for Mrs. Boucher, no one really prevailed. This landowner obtained her relieve only after years of court battles and no doubt many thousands of dollars of litigation expenses. This case was decided while USDA continues to consider rules clarifying its process for making wetlands determinations. An interim final rule published last December has been criticized by farm and environmental groups alike.
We will continue to monitor this important subject.
[i] On December 7, 2018, USDA published an interim rule clarifying the process for making wetlands determinations. https://www.federalregister.gov/documents/2018/12/07/2018-26521/highly-erodible-land-and-wetland-conservation. Comments were accepted through February 5, 2019.
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