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Robert Koshman v. Tom Vilsack

March 31, 2012



This matter was on calendar on April 6, 2011 on cross-motions for summary judgment filed by plaintiff Robert Koshman and by defendants Tom Vilsack, the United States Department of Agriculture (USDA), David White, USDA Natural Resource Conservation Service (NRCS), Jonathan Coppess, and the USDA Farm Service Agency (FSA). David M. Ivester of Briscoe, Ivester & Bazel LLP appeared for plaintiff; Lynn Trinka Ernce, Assistant United States Attorney, appeared for defendants. For the reasons set forth below, the court denies defendants' motion and grants plaintiff's motion.

I. Background*fn1

Defendant USDA is the agency in charge of agriculture-related programs, including wetland conservation and farm subsidy programs, which defendants NRCS and FSA administer jointly. ECF No. 27 ¶¶ 3-5. Plaintiff Robert Koshman, his family, and the Koshman Family Trust ("the trust"), have obtained USDA program benefits in the past. ECF No. 27 ¶ 1. They have owned land in Placer County for decades and had produced rice on Fields 7, 7a and 8a before 1985, including in the 1950s and 1960s. ECF No. 27 ¶ 1; AR 15, 28.*fn2

In December 1996, NRCS issued a certified wetland determination that Fields 7 and 8a of Koshman Family Trust properties contained a total of 34.3 acres of farmed wetlands. ECF No. 32 ¶ 3. This determination did not delineate or identify the specific location of the wetlands within these fields. Rather, NRCS notified the Trust it should contact NRCS for a wetlands delineation "prior to any further manipulation of soils, topography or hydrology. . . ." ECF No. 32 ¶ 5; AR 149. The Koshmans did not appeal the determination. ECF No. 32 ¶ 6.

In January 1998, plaintiff notified the NRCS in writing that he wanted to laser level Field 7 because "he could be more efficient when working the ground with the equipment" and "[i]t takes less time and less money to work a rice field with square checks than a field that has crooked checks." ECF 32 ¶ 7; AR 143. He said he had "been producing rice off this ground for many years," and that all he had to do was "disk the ground and plant. I do not need to drain, dredge, fill, level this land to produce a crop of rice." AR 143. He concluded that "[i]f for some reason the government says I'm not to do this, please let me know." AR 144. Plaintiff noted that if he could not undertake laser leveling, he would "summer flow the ground and put the rice checks back where they were" so he could plant rice in 1999. AR 144.

NRCS responded that laser leveling "would be altering the field conditions that existed in 1985 which could create a 'Converted Wetland" situation," but that plaintiff could "maintain the field to the extent that existed prior to 12/23/85." ECF No. 32 ¶ 9; AR 142. The District Conservationist told plaintiff he would visit the area the following month and "strongly recommend[ed] that you not do anything prior to our scheduled visit which could jeopardize compliance with the Food and Security Act provisions." ECF No. 32 ¶ 10; AR 142.

In May 1998, plaintiff again asked the NRCS to undertake a wetland delineation of the property and sought permission to re-level the field, install rectangular rice checks and plant rice. ECF No. 32 ¶ 11; AR 139. NRCS told plaintiff the process could take as long as two years and would involve the development of a mitigation plan, but that he could plant rice so long as he left surface drainage patterns intact. ECF No. 32 ¶ 12-13; AR 139. With its letter to plaintiff, NRCS included a copy of NFSAM [National Food Security Act Manual] 514.20, which addresses "Identifying Wetlands Where The 1985 Act Restrictions Apply." ECF No. 32 ¶ 14; AR 140-141. The administrative record does not include any information suggesting that plaintiff went forward with the delineation at that time.

In 2002 and 2003, plaintiff undertook laser leveling of his fields. He planted rice in Field 7A in 2002 and in Fields 7 and 8A in 2003; he did not consult NRCS or seek a wetlands determination before doing so. ECF No. 32 ¶¶ 15-18; ECF No. 27 ¶ 7; Compl. ¶ 7; AR 54. In May 2003, plaintiff signed two AD-1026 ["Highly Erodible Land Conservation (HELC) And Wetland Conservation (WC) Certification"] forms and answered "no" to the question whether anyone had conducted or will conduct any activities, including leveling, on the property. ECF No. 32 ¶ 19; AR 133-138.

In a letter dated November 7, 2003, NRCS informed plaintiff of its preliminary determination that he had violated the Swampbuster provisions of the Food Security Act, 16 U.S.C. § 3821, et seq., by converting wetlands in 2002 and 2003. ECF No. 32 ¶ 20; AR 131. Specifically it said that "your manipulation by lasier [sic] leveling on this wetland area is considered an alteration that makes the area more farmable which is a violation of Swampbuster provisions." AR 113.

Plaintiff appealed this determination, arguing that "by laser leveling he was improving the land for better water management and was not in violation." AR 113. In response to the appeal, NRCS inspected the property and examined FSA compliance slides as well as aerial photographs. ECF No. 32 ¶ 22; AR 124-128. NCRS prepared its final technical determination, finding that "substantial earth moving occurred during 2002 (field 7 and 7A) and 2003 (field 8a) that resulted in the conversion of wetlands." ECF No. 32 ¶ 23; AR 118 & 124. It also noted that some areas in Field 8A were still farmed wetland or artificial wetlands, but "the remainder of wetlands on all fields are now considered [converted] wetlands because manipulation (fill) resulted 'in impairing or reducing the flow, circulation or reach of water'" on twenty-four acres, citing NFSAM § 514.24b. ECF No. 32 ¶¶ 24, 27; AR 98, 124. NRCS further found that rice was produced on Field 7 in 2002 and on Field 7A in 2002 and 2003, and that "production was made possible in field 7A in 2002 and field 8A in 2003." ECF No. 32 ¶ 25; AR 54, 118. The agency informed plaintiff that the determination would remain in effect until there was mitigation, and that his eligibility for USDA benefits would be affected. ECF No. 32 ¶ 26; AR 118.

After this determination, FSA notified plaintiff that the Trust and anyone associated with it had to refund USDA benefits from July 2002 forward, totaling $173,368. ECF No. 32 ¶ 28; AR 84. Plaintiff appealed this determination, arguing that the land had been leveled in the past. AR 112, 113.

In February 2004, the FSA County Committee reviewed the case file, the information provided by plaintiff, the NRCS technical determination, the report from the NRCS inspection team, photographs and slides and NRCS procedures, and concluded that "a violation did occur." ECF No. 32 ¶ 29; AR 110.

Plaintiff appealed this determination to the National Appeals Division (NAD) of the USDA. AR 10. He provided "a short explanation of the basis of the appeal," including his argument that any actions that served only to make his fields "more farmable" as NRCS had determined did not violate the Swampbuster provisions of the FSA. AR 73. Plaintiff argued specifically that neither the law nor the regulations allowed a wetland conversion to be based on a determination that actions made fields "more farmable." AR 74.

NRCS argued to the NAD that plaintiff was aware that there was a wetland determination as to the fields at issue; that he had not appealed that determination; that it had "determined the wetland to be converted as a result of the action of leveling the field, resulting in hydrologic manipulation that makes the area more farmable." AR 92-97.

After conducting a hearing, the NAD hearing officer requested "additional information on the methodology used by the Natural Resources Conservation Service (NRCS)" in determining that the fields at issue had become converted wetlands as well as FSA documentation about rice production in 2002 and 2003. The officer also posed several questions to the parties. AR 64-65.

In resolving the appeal, the hearing officer framed the issues to be decided as: "did appellants produce rice in previous years (prior to 1985) on the same fields as they did in 2002 and 2003" and "did appellants' moving of soil by the use of laser leveling cause Farmed Wetlands (FW) to become converted wetlands." AR 27. The officer made several findings of fact: (1) that plaintiff used laser leveling on fields 7, 7a and 8a in 2002 and 2003 "to conserve water" but that rice levees had been present in those fields before the 1985 enactment of the Food Security Act; (2) plaintiff produced rice on these fields as early as 1962 and during the mid 1960s; (3) plaintiff produced rice on these fields in 2002 and 2003; (4) NRCS's November 7, 2003 preliminary technical determination found that plaintiff's laser leveling constituted a wetlands violation; (5) during a physical inspection in late November 2003, NRCS found substantial movement of earth, which "resulted in conversion of wetlands;" (6) in December 2003, an NRCS biologist visited the fields and found that "manipulation (fill) resulted in impairing or reducing the flow, circulation, or reach of water" and that "substantial earth moving" had occurred, but said more interpretation of aerial photographs was necessary to determine how many acres and locations were manipulated; and (7) in February 2004, the FSA confirmed a wetlands violation. AR 28-29. The hearing officer then said that while "laser leveling may result in converted wetlands," such leveling must be undertaken to "'make the production of an agricultural commodity possible" when such production would not otherwise have been possible. AR 30-31. He rejected NRCS's argument that "laser leveling, by definition, results in converted wetlands" because "the plain reading of the . . . statutes and regulation, applicable sections from NFSAM . . . do not, in this case, support his argument . . . ." AR 31. The officer ultimately ruled that NRCS's determination that plaintiff converted the wetlands was erroneous because the "laser leveling was not manipulation that made rice production 'possible' . . . because rice production was already possible as early as 1962." ECF No. 32 ¶ 30; AR 28-31.

The FSA and NRCS requested a Director's Review of this determination. AR 22-23, 25-26, 806-812. They argued that the hearing officer based his determination solely on the fact that plaintiff had previously planted rice on the site and that while "[p]roduction may have been possible before laser leveling took place, . . . laser leveling would have definitely contributed to improved water management efficiencies, uniformity of depth across the fields, and ultimately crop yields." AR 25, 22. They continued that after the laser leveling and filling, the "fields had their hydrology significantly reduced or eliminated." AR 23, 26.

On August 25, 2004, the Director reversed the NAD decision and agreed with FSA's determination that plaintiff had converted wetlands. ECF No. 32 ¶ 31; AR 13. He rejected the hearing officer's second and third factual findings, but adopted the rest, including these undisputed facts: (1) the Koshman family produced rice on the fields "prior to 1985, including the 1950s and 1960s;" (2) in 1998, NRCS became aware that plaintiff intended to laser level field 7 and so advised plaintiff that he "could only maintain the field to the extent that existed prior to December 23, 1985" and that laser leveling would alter these conditions; (3) during its on-site review, the NRCS inspectors "found that substantial earth movement had occurred as a result of the laser leveling;" that "the land leveling substantially filled shallow areas of the wetland," including one area that contained "12 inches of fill," and concluded that "the laser leveling altered the wetland hydrology of the farmed wetland areas and made the land more farmable." AR 15-16. The Director said the hearing officer had not ruled on whether the laser leveling would make the lands more farmable, but rather focused on the prior rice production on the fields. AR 17.

The Director said:

The intent of . . . .16 U.S.C. § 3801 is to conserve wetlands. A strict reading of 16 U.S.C. § 3801(a)(6)(A) would exclude all farmed wetlands from conversions. Farmed wetlands, by definition, are wetlands that prior to December 23, 1985, were manipulated and used to produce an agricultural commodity. . . . To provide protection to areas classified as farmed wetlands, the issue is not whether the production of an agricultural commodity was possible before the manipulation but rather, whether Appellants' manipulation made the land more farmable

Unlike most manipulations, where a producer drains a wetland to produce a crop, Appellants manipulated the farmed wetlands and altered wetland hydrology in an attempt to retain more water for their rice crop. Although Appellants maintain that the purpose of the laser leveling was solely to conserve water, the evidence shows that the laser leveling will assist in Appellants' rice production, since it will allow water to stay in the wetland areas for a longer duration. Thus, Appellants' laser leveling constituted a conversion because it made the lands more farmable.

AR 18-19 (emphasis added).

Plaintiff asked for reconsideration of this decision, arguing that the Director's reliance on the "more farmable" standard exceeded the authority granted by Congress. ...

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