1

Familiarity with the court’s decision is presumed.

SLIP OP. 07-93

UNITED STATES COURT OF INTERNATIONAL TRADE

------------------------------x

ROBERT L. ANDERSON, :

 : 

Plaintiff, :

 : Before: Pogue, Judge

 v. : Court No. 05-00329

 :

:

UNITED STATES SEC’Y :

OF AGRICULTURE, :

 : 

Defendant. :

------------------------------x

[Defendant’s remand determination affirmed as to result.]

Dated: June 7, 2007.

Robert L. Anderson, Plaintiff pro se. 

Peter D. Keisler, Assistant Attorney General; Jeanne E. Davidson,

Director, Patricia M. McCarthy, Assistant Director, Commercial

Litigation Branch, Civil Division, U.S. Department of Justice

(David S. Silverbrand), for Defendant United States Secretary of

Agriculture. 

OPINION AND ORDER

Pogue, Judge: In Anderson v. United States Sec’y of Agric., 30 CIT

__, 462 F. Supp. 2d 1333 (2006) (“Anderson I")1, the court remanded

an initial determination from the United States Department of

Agriculture (“USDA”) denying Plaintiff’s application for Trade

Adjustment Assistance (“TAA”) on the basis of the agency’s summary

conclusion that Mr. Anderson’s net fishing income had not declined

during the 2000 to 2003 time period. The court found not in
Court No. 05-00329 Page 2

accordance with law the agency’s refusal to consider Mr. Anderson’s

claim that his net income, reported on an accrual basis, had

declined during the relevant time period. 

The USDA filed its first remand determination with the court

on December 11, 2006. Reconsideration upon Remand of the

Application of Robert L. Anderson. (“First Remand Determination”).

In its first remand determination, the USDA did not, as directed by

the court in Anderson I, consider Mr. Anderson’s accrual-basis

claim, but rather once again found, relying solely on the net

fishing income line as presented on Mr. Anderson’s tax return as

submitted to the Internal Revenue Service (“IRS”), that Mr.

Anderson’s income did not decline from the marketing year to the

qualifying year. First Remand Determination. Upon review of the

first remand determination, the court again remanded the

determination to the USDA, ordering the USDA to comply with the

court’s initial remand order. Anderson v. United States Sec’y of

Agric., 30 CIT __, 469 F. Supp. 2d 1300 (2006) (“Anderson II”). On

February 9, 2007, the USDA issued its second remand determination,

finding that using the accrual method of accounting, Mr. Anderson’s

income did decline over the period from the marketing year to the

qualifying year, and as such found that Mr. Anderson would be

entitled to a TAA payment. Reconsideration upon the Second Remand

of the Application of Robert L. Anderson (“Second Remand

Determination”). The court affirms the results of USDA’s second
Court No. 05-00329 Page 3

2

For example, Mr. Anderson cited evidence of delayed payment

for fish sold.

remand determination. 

DISCUSSION

As discussed in the court’s opinion in Anderson I, Mr.

Anderson was part of a group of salmon fishermen that had been

certified by the USDA as eligible for TAA. To continue the twopart process for obtaining TAA benefits, Mr. Anderson was then

required to demonstrate that he was personally qualified for such

assistance, by providing evidence to the USDA that his net fishing

income had declined over the relevant two-year period. Anderson I,

30 CIT at __, 462 F. Supp. 2d at 1334.

The net fishing income line on Mr. Anderson’s IRS returns

indicated that his income had actually increased between 2002 and

2003. Id. at 1335. Mr. Anderson, however, provided other

supporting information in conjunction with his TAA application.

Id.2 Mr. Anderson claimed that this other information documented

that, considered on an accrual basis, Mr. Anderson’s net fishing

income had actually declined over the period in question. The

USDA never considered Mr. Anderson’s supporting information,

deeming it unnecessary to do so, because the net fishing income

line on his tax return had indicated an increase in income. 

The court found that the USDA’s determination failed to

consider an important aspect of the problem presented and was
Court No. 05-00329 Page 4

therefore not in accordance with law. Id. at 1342. Specifically,

the court concluded that the USDA’s blind application of its

regulation 7 C.F.R. § 1580.102(2004), without any consideration of

the fact that applicants can report their income on either an

accrual or cash basis, leads to the possibility of the USDA

treating similarly situated people differently. Id. at 1339.

Additionally, the court explained that in adopting the definition

of “net farm income,” the USDA did not comment on how the

regulatory definition would have the effect of including or

excluding people based on their election of cash or accrual

accounting, and why such effects would be legally acceptable. Id.

at 1342. The court remanded the determination to the USDA in order

that the USDA:

consider the reasonableness of its regulation as applied

to Mr. Anderson, in view of the differences in cash

versus accrual accounting, the inequities the agency’s

application presents, and the fact that applicants elect

their accounting technique without knowing that it could

adversely impact their eligibility for benefits in the

future. On remand, the agency shall reconsider its

position and may reopen the record to permit an

acceptable alternative solution. 

Id.

In the USDA’s first remand determination, the USDA refused to

comply with the court’s order. First Remand Determination;

Anderson II, 30 CIT __, 469 F. Supp. 2d 1300. In doing so, the

agency cited the decision of the U.S. Court of Appeals for the

Federal Circuit (“CAFC”) in Steen v. United States, 468 F. 3d 1357
Court No. 05-00329 Page 5

3 Notwithstanding the USDA’s assertion that it had no need

to revisit the reasonableness of the regulation as applied to Mr.

Anderson, the USDA separately found that “based on the evidence

in the record, it [was] not possible to surmise how Mr.

Anderson’s Schedule C’s would have been calculated had he chosen

the accrual method of accounting, nor is it possible to ascertain

whether the IRS would have accepted them if they were submitted

in such a manner.” First Remand Determination at 2.

(Fed. Cir. 2006) as standing for the proposition that the USDA’s

“regulatory definition of the term ‘net farm income’ as applied to

fishing income was reasonable and cannot be condemned as arbitrary,

capricious, or manifestly contrary to the statute.” First Remand

Determination at 1 (quoting Steen, 468 F. 3d at 1363). Based on

the USDA’s reading of Steen, the USDA determined that it had no

obligation to evaluate the reasonableness of its application, to

Mr. Anderson’s accrual-basis claim, of its regulation defining “net

fishing income.” The agency stated that Steen “explicitly rejected

the [P]laintiff’s argument that the agency is barred from using the

standards applied under the Internal Revenue Code as a basis for

makings [sic] its determination of eligibility of cash benefits

under the TAA program.” First Remand Determination at 2.3 

Finding that the agency failed to comply with the court’s

remand order by reading the holding of Steen too broadly, the court

once again remanded the matter to the USDA. Anderson II, 30 CIT

__, 469 F. Supp. 2d 1300. The court noted that, in Steen, the CAFC

explicitly qualified its holding regarding the net fishing income

regulation. Specifically, the CAFC stated: “Mr. Steen does not

contend that his tax returns distort the net amount of his income
Court No. 05-00329 Page 6

4

As the court further explained in Anderson II, the agency's

action in the first remand was not only wrong on the law; it was

also improper procedurally. The agency is not free to disobey

remand instructions by invoking its interpretation of precedent.

Its choices are to ask for rehearing, to accede or to fully

comply under protest. Anderson II, 30 CIT __, 469 F. Supp. 2d.

at 1301. 

5The Department of Agriculture based this advice upon its

own regulation, 7 C.F.R. § 1580.301(e)(6). This regulation

explains the form of documentation that can be provided to

demonstrate to the agency that an individual producer’s net

fishing income was less than that during the producer’s preadjustment year. The regulations state that an applicant shall

provide either:

(continued...)

derived from all fishing sources in the two relevant years . . . .”

Anderson II, 30 CIT at __, 469 F. Supp. 2d at 1300-01; Steen, 468

F. 3d at 1364. Because Mr. Anderson raised just such a claim-–that

his cash-basis tax returns distorted the net amount of his income

derived from all fishing sources in the two relevant years-–the

court remanded the matter to the USDA for reconsideration

consistent with the court’s remand orders. Anderson II, 30 CIT at

__, 469 F. Supp. 2d. at 1301.4

In the second remand determination the USDA reopened the

record, and requested additional documentation from Mr. Anderson,

advising him that:

Acceptable documentation includes supporting

documentation from a certified public accountant or

attorney, or relevant documentation and other supporting

documentation and other supporting financial data, such

as financial statements, balance sheets, and reports

prepared for or provided to the Internal Revenue Service

or another U.S. Government agency. 

Second Remand Determination at 1.5 In response to the Department
Court No. 05-00329 Page 7

5(...continued)

(i) Supporting documentation from a certified public

accountant or attorney, or (ii) Relevant documentation

and other financial data, such as financial statements,

balance sheets, and reports prepared for or provided to

the Internal Revenue Service or another U.S. Government

agency. 

7 C.F.R. § 1580.301(e)(6)(2004); see also Second Remand

Determination at 2.

of Agriculture’s request, Mr. Anderson provided a letter from his

accountant, with accompanying Schedule C’s prepared using the

accrual form of accounting (as opposed to the cash form of

accounting originally used by Mr. Anderson in his tax returns).

Id. at 3. The accountant’s statement reconstructed Mr. Anderson’s

cash-basis tax filing, to present accrual-basis Schedule C’s. Id.

In the letter, Mr. Anderson’s accountant also includes the normal

tax-filing disclaimer, stating:

Our compilation was limited to presenting in the form

prescribed by the Internal Revenue Service information

that is the representation of the owner. We have not

audited or reviewed the financial statements referred to

above, and, accordingly, do not express an opinion or any

other form of assurance on them. 

***

This report is intended solely for the information and

use of Robert L. Anderson and the United States

Department of Agriculture for determining qualification

under the Trade Adjustment Assistance for Farmers

program, and is not intended and should not be used by

anyone other than these specified parties. 

Second Remand Determination at 2; Letter from Charles E. Morgan,

CPA, Jason, Morgan & Hent, PLLC, to Mr. Anderson (Apr. 6, 2007),

Attach. to Pl.’s Resp. to USDA Letter (“Reply Letter”).
Court No. 05-00329 Page 8

In commenting on the information provided by Mr. Anderson in

response to the agency’s request for additional information, the

USDA stated that

[t]he agency does not regard this documentation which

according to his certified public account [sic] only

relies upon Mr. Anderson’s representations, rather than

documentation or other supporting financial data reported

to the Internal Revenue Service or another U.S.

Government agency, without any audit or review of the

statements, in conjunction with the certified public

accountant’s unwillingness to express an opinion or any

assurance on them, as complying with the certification

that his net fishing income was less than that during the

pre-adjustment year. The very purpose of requiring such

documentation is to verify the producer’s certification

that his income actually declined in order to determine

eligibility for cash benefits. Merely presenting Mr.

Anderson’s representations on Schedule C’s does not

adequately support his certification that his net fishing

income was less than his income in the pre-adjustment

year. Furthermore, the certified public accountant’s

limiting the use of the report to Mr. Anderson and the

Department of Agriculture does not meet the requirement

in the regulation that the net fishing income be net

profit or loss reported to the Internal Revenue Service.

7 C.F.R. § 1580.102 (2004). In addition, it appears that

these revisions to his income are not being reported to

the Internal Revenue Service. 

Second Remand Determination at 3.

Despite this analysis, the agency then determined, based on

Mr. Anderson’s submissions, that his “income on an accrual basis

declined from the pre-adjustment year, 2001, to the most recent

marketing year, 2002.” Id. at 3. Based on that finding, the USDA

further found that “[i]f this Court’s decision is the final

decision after all opportunities for appeal have been exhausted,

based upon an accrual method of accounting . . . Mr. Anderson would
Court No. 05-00329 Page 9

6The USDA, in its second remand determination, provided no

further analysis of the reasonableness of its application of its

regulation to Mr Anderson, but rather continued to object to the

usage of the accrual method of accounting to determine whether or

not Mr. Anderson’s net fishing income declined, stating:

[t]he agency disagrees with the application of the

accrual method of accounting in determining whether Mr.

Anderson’s net fishing income declined, because Mr.

Anderson had reported his net fishing income on a cash

basis to the Internal Revenue Service, and is only doing

so under protest, in accordance with the Court’s Order.

Second Remand Determination at 2. 

The court notes that in its initial opinion, it had directed

the USDA to reexamine the reasonableness of its regulation (and

the regulation’s interaction with farmers’ legal right to choose

to report their business income on either a cash or accrual

basis), as applied to Mr. Anderson, in light of the fact that the

regulation has the effect of treating similarly situated people

differently. Anderson I, 30 CIT at __, 462 F. Supp. 2d at 1339;

see Former Employees of Merrill Corporation v. United States, 31

CIT __, Slip Op. 07-46 at 27(Mar. 28, 2007). The USDA has yet to

make a reasonableness determination, as it first relied on Steen

to avoid evaluating the reasonableness of the application of the

regulation, and then sidestepped the issue altogether in the

second remand determination by stating that it was applying the

accrual method “only ... under protest, in accordance with the

Court’s order.” Second Remand Determination at 2. Accordingly,

the court considers the issue waived.

be entitled to a TAA payment.” Id. at 4.6

Mr. Anderson, in his Reply Letter, stated that he provided

information in accordance with the plain language of the USDA’s

regulation and the agency’s request to Mr. Anderson for supporting

documentation. Mr. Anderson, a pro se plaintiff, stated, in his

response:

I did provide supporting documentation from a CPA. This

supporting documentation was provided to the USDA,(a US

government agency). The regulation asked me to provide

supporting documentation from a CPA, OR a report prepared
Court No. 05-00329 Page 10

7

Mr. Anderson claims, and Defendant does not dispute, that

his attempts at compliance with the USDA’s rules included a

conversation with a contact person at the USDA in order to

“clarify exactly what the USDA wanted,” as the “USDA’s letter

requesting supporting documentation was not clear to [Mr.

Anderson].” Reply Letter at 2 (emphasis in original). According

to Mr. Anderson, he was told “that they wanted me to have a CPA

recalculate my 2001 and 2002 fishing income on an accrual basis,

using an IRS style format.” Id.

8

Under 7 C.F.R. § 1580.102, the USDA defines net farm income

as “net farm profit or loss, excluding payments under this part,

reported to the Internal Revenue Service Schedules C or C-EZ for

individuals or taxable income . . . during the tax year that most

closely corresponds with the marketing year under consideration.” 

7 C.F.R. § 1580.102(2004).

for, or provided to a US government agency. I provided

both.

Reply Letter at 2 (emphasis in original). 

The plain language of the regulation, with which Mr. Anderson

sought to comply,7

 supports Mr. Anderson’s interpretation. 7 C.F.R.

§ 1580.301(e)(6)(2004); see Christensen v. Harris County, 529 U.S.

576, 588 (2000)(An agency’s interpretation of its own regulation is

not entitled to deference when it is contrary to the plain language

of the regulation). The USDA, as indicated by its comments quoted

above, seems to believe that its regulations require more than is

stated by their terms. This, however, in addition to ignoring the

plain language of the regulation, ignores the court’s two previous

rulings which require the USDA to evaluate the reasonableness of

its application of 7 C.F.R. § 1580.102,8 upon which the USDA relies

for its definition and determination of net income, to Mr.
Court No. 05-00329 Page 11

Anderson. Remand Determination at 2; Def.’s Resp. to Pl.’s

Comments Upon Remand at 5. The agency cannot have it both ways.

If it wished to invoke 7 C.F.R. § 1580.102 as a basis for rejecting

Mr. Anderson’s filing, it was required to explain why its reasons

for doing so were reasonable and in accordance with law. 

Despite the USDA’s refusal to evaluate the effects of its

regulation on individual producers, in light of the fact that

farmers are in the unique position of being permitted to choose

accrual or cash accounting as a means of reporting their income,

and despite the agency’s seeming rejection of Mr. Anderson’s

supporting information, the USDA did approve the granting of TAA

benefits to Mr. Anderson pending the exhaustion of the agency’s

opportunities for appeal. Therefore, this court affirms the remand

determination only as to the results. See Hontex Enters., Inc. v.

United States, 30 CIT__, 425 F. Supp. 2d 1315 (affirming the

conclusion of a remand determination, but finding the summary and

discussion sections not to be in accordance with the remand

instructions). 

SO ORDERED.

Dated: June 7, 2007

 New York, N.Y. /s/ 

 Donald C. Pogue, Judge 
SLIP OP. 07-93

UNITED STATES COURT OF INTERNATIONAL TRADE

------------------------------x

ROBERT L. ANDERSON, :

 : 

Plaintiff, :

 : Before: Pogue, Judge

 v. : Court No. 05-00329

 :

:

UNITED STATES SEC’Y :

OF AGRICULTURE, :

 : 

Defendant. :

------------------------------x

Judgment

This action has been duly submitted for decision, and this

Court, after due deliberation, has rendered a decision herein; now,

in conformity with that decision, it is hereby

ORDERED that the United States Department of Agriculture remand

determination with respect to the application of Robert L. Anderson

is affirmed as to the results.

 /s/ 

 Donald C. Pogue

 Judge

Dated: June 7, 2007

 New York, New York