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Bedeker v. United States

March 16, 2009

JAMES E. BEDEKER, SALLY BEDEKER AND FIRST MIDWEST TRUST COMPANY, TRUSTEE UNDER THE TRUST #6243 DATED DECEMBER 18, 1997, PLAINTIFFS,
v.
UNITED STATES OF AMERICA, CHARLES F. CONNOR, ACTING SECRETARY OF THE UNITED STATES DEPARTMENT OF AGRICULTURE, FARM SERVICE AGENCY, NATURAL RESOURCES CONSERVATION SERVICE, AND THE UNITED STATES DEPARTMENT OF AGRICULTURE, DEFENDANTS.



The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

In 1998, Plaintiffs James and Sally Bedeker purchased a tract of approximately 600 acres of farmland in Grundy County, Illinois. Eight years earlier, the Natural Resources Conservation Service ("NRCS"), a federal agency within the United States Department of Agriculture ("USDA"), had determined that approximately eleven acres of the farm consisted of unconverted wetlands protected by federal law from being developed or otherwise cultivated. An NRCS conservationist met with the Bedekers in late 1998 and informed them that they had converted several acres of protected wetlands; he explained by letter that this activity jeopardized their right to farm program benefits. In response, the Bedekers agreed they would not farm the land and would instead plant the area with grasses, in exchange for which they would retain their eligibility for farm benefits. In 2006, NRCS reviewed new digital imagery and found that not only had the Bedekers farmed the wetlands area, they had cleared and planted crops on additional land designated as wetlands. In extensive administrative proceedings, the Bedekers challenged the determination that the areas were in fact wetlands and also argued that any actions they may have taken were performed in good faith. These arguments-as well as a due process argument-were rejected on administrative review, and the Bedekers were ordered to repay the farm benefits they had received from the federal government since 1998. Plaintiffs now seek review of the administrative determination under the Administrative Procedures Act, 5 U.S.C. §§ 701-06 ("APA"). For the reasons that follow, Plaintiffs' appeal is denied and the agency's determination is affirmed.

FACTUAL BACKGROUND

Under the "Swampbuster" provisions of the Food Security Act of 1985, 16 U.S.C. §§ 3801 et seq., farmers who produce a crop on converted wetland lose their eligibility for federal farm benefits.

16 U.S.C. § 3821(a), (b). In addition, the act of converting a wetland itself renders an individual ineligible for farm benefits. Id. § 3821(c). The Swampbuster provisions do contain certain exemptions that excuse wetland conversion activities, however, including exemptions for individuals who acted in good faith and for individuals whose actions had only a minimal effect on the wetlands. Id. § 3822(f), (h). The responsibility to administer the Swampbuster provisions rests primarily with two USDA agencies: the NRCS and the Farm Service Agency ("FSA"). NRCS is the scientific agency, making necessary technical determinations, developing restoration and mitigation plans, and monitoring compliance with the statute. Id. § 3822(j); see also 7 C.F.R. § 12.6(c). The FSA, acting through state FSA committees and county office committees ("COC"s), is the agency charged with enforcement of the statute and is primarily responsible for determining violations and benefit eligibility. 7 C.F.R. § 12.6(b).

On April 25, 1990, the NRCS completed a "Highly Erodible Land And Wetland Conservation Determination" that identified two wetlands areas covering approximately eleven acres on an area of land known by the USDA as Farm Serial Number ("FSN") 3103, Tract 2663 ("Tract 2663"). (A-155, 193.)*fn1 Shortly thereafter, NRCS notified the then-owner of the property of this determination. (A-155.) In 1998, the Bedekers purchased the beneficial interest in two parcels of farmland, which included Tract 2663, totaling approximately 600 acres, in Grundy County, Illinois.*fn2 (A-8-10.) On July 31, 1998-and at least five more times over the next eight years-Plaintiffs filed a Form AD-1026, entitled "Highly Erodible Land Conservation (HELC) and Wetland Conservation (WC) Certification" ("AD-1026"), with NRCS. (A-106, 257-303.) On the forms, signed by James Bedeker, Plaintiffs stated that they did not conduct and did not plan to conduct any farming activities on the portions of their land designated by NRCS as wetlands. (A-267.) Attached to the AD-1026 forms were AD-1026As, reports prepared by USDA that listed several tracts on the Bedekers' land, including Tract 2663, that contained areas designated as wetlands. (A-269.)

In November 1998, vocal concern by area residents regarding activity on the Bedekers' farm prompted Paul Youngstrom, an NRCS conservationist, to visit the Bedekers at their farm to examine their filling and clearing activities. (A-252.) After examining the activity and the corresponding wetland inventory maps, Youngstrom determined that the Bedekers had disturbed wetlands. (Id.) On December 21, 1998, Youngstrom mailed a letter to the Bedekers that described the circumstances of their meeting in November at the Bedeker farm and the agency's wetland determination. In pertinent part, the letter stated:

From my observations, a number of trees are being cleared, stumps removed and then burned. In reviewing USDA's wetland inventory maps, these areas are shown to be wetlands. Some of this work is being done to maintain some existing drainage ways. However, some of this work also appears to be clearing of wetlands to improve drainage and possibly allow more land to be cropped. If this is actually the case, USDA views this activity as the conversion of wetlands. The Farm Bill of 1996 prohibits anyone converting wetlands to be eligible for any farm program payments, loans, insurance, or cost-share payments.

(Id.) Although the letter does not conclusively affirm that the Bedekers had converted wetlands, Youngstrom communicated that the work "appears to be clearing of wetlands" and that the FSA "may suspend any payments that you have coming until we can understand what you are doing out there, whether any wetlands have been converted, and if so, how the situation may be reconciled." (Id.)

On August 3, 1999, Youngstrom notified the FSA of the Bedekers' wetland conversion activity (A-247.) In his letter to the FSA, Youngstrom documented his discussions with Mr. Bedeker:

[Mr. Bedeker] told us about the work that had been done earlier, and we informed him that he was out of compliance since he had cleared trees in a wetland and planted a crop. He stated that he didn't realize this was a problem and wanted to know how to remedy the situation. Mr. Bedeker has agreed to not farm the new acreage, and he hasn't this year. He plans to seed it to some permanent grass and keep it out of production. Therefore, Mr. Bedeker is not out of compliance for farm program benefits for 1999. (Id.) Subsequent agency decisions make clear that Youngstrom erred in his determination that by keeping the land out of production and replanting it with permanent grass, the Bedekers would be in compliance. (A-108, 159.) Under 16 U.S.C. §3821(c), the mere conversion of wetlands renders an individual ineligible for farm program benefits.

In 2006, as part of a routine FSA status review conducted to update the department's digital imagery, the FSA and NRCS reviewed apparent wetland conversion activity, including the planting of crops, on the Bedekers' farm. (B-127.) NRCS determined that Plaintiffs had converted approximately 8.5 acres of wetlands on Tract 2663. (A-156.) On April 24, 2006, NRCS conducted a wetland determination field investigation for Tract 2663 and found wetland hydrology and hydric soil indicators, and concluded, based on a comparable offsite location, that the natural vegetation of the cleared areas was hydrophytic.*fn3 (Id.) NRCS also determined that.4 acres of land that Plaintiffs leased from a third party were also converted wetlands. (A-106.) A few weeks later, NRCS informed the Bedekers that it had made a preliminary technical determination that Tract 2663 contained converted wetlands. (A-156.) The Bedekers failed to request either mediation or a field visit within thirty days of the preliminary technical determination, and the determination became final. (A-239-42.)

The appeals process for wetlands determinations generally follows the following steps. After the technical determination becomes final, the individual may appeal to the COC, which, as noted above, is a subdivision of the state Farm Service Agency within the USDA. 7 C.F.R. § 780.6. If he loses at the COC level, the individual usually takes his next appeal to the state FSA before appealing to the National Appeals Division of the USDA ("NAD"). Id. In certain circumstances, however, he may appeal directly to the NAD. Id. Within the NAD, the appealing party is entitled to a hearing, after which the hearing officer makes an initial determination, and that determination is appealable for a Director's review. Id. §§ 11.8, 11.9. After the director makes her determination, the matter is appealable to the United States District Court. 7 U.S.C. § 6999.

On July 13, 2006, the Bedekers were notified by the FSA that the wetland determination by the NRCS, dating back to the clearing and removal of trees by the Bedekers on Tract 2663 in 1998, rendered them ineligible for farm program benefits for all preceding years, beginning in 1998. (A-156.) Plaintiffs then initiated two separate administrative actions, which progressed through the appeals process independent of one another. First, the Bedekers appealed the eligibility decision to the COC, contending that the areas in question were improperly designated as wetlands. (A-156-57.) Second, the Bedekers requested a good faith determination that would exempt them from the penalties imposed by the Swampbuster statute. (A-156.)

In support of their appeal of the wetland determination, the Bedekers hired Valerie Jakobi, an environmental scientist. (A-201.) Although a Certified Professional in Erosion and Sediment Control, Jakobi is not certified by the USDA, nor is she trained to perform a "Minimal Effects Evaluation" according to USDA guidelines. (A-160-61, 201-03.) After reviewing the site, aerial photos, and mapped wetland resources, Ms. Jakobi concluded that the area may not have contained wetlands at all and, even if the area had contained wetlands, the Bedekers' violation had a minimal effect. (A-201-03.) In response, on January 17, 2007, the NRCS State Conservationist issued a report agreeing with the earlier NRCS determination that Tract 2663 contained converted wetlands. (A-157.) On March ...


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