Court Opinion

ID: 9489662
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:20:48.320636+00
Date Added: 2024-06-11T17:53:38.808895
License: Public Domain

BEAM, Circuit Judge,
concurring and dissenting.
I. BACKGROUND
The factual background to this appeal is set out in some detail in the district court opinion and accompanying administrative record. See Downer v. United States, 894 F.Supp. 1348 (D.S.D.1995). In essence, Downer filled two man-made dugouts during the period between the 1988 and 1989 growing seasons. The SCS determined that the dugouts had been sited in “wetlands” as defined by Swampbuster and that fill had been spread over “wetland” area beyond the boundaries of the dugouts. The agency concedes that filling a man-made dugout in itself is permissible. See 16 U.S.C. § 3822(b)(2). *1007The issue is whether Downer went beyond that and altered the surrounding “wetland,” and if so, whether Downer’s actions fall into one of the exemptions to Swampbuster. If Downer’s actions amount to “conversion” of the surrounding “wetland,” and do not fall into an exemption, he has violated Swamp-buster. See 16 U.S.C. §§ 3821(a)(1); 3801(a)(4)(A). A violator who then farms the converted “wetland” becomes ineligible for price support payments for that crop year. Id. § 3821(a)(1). A determination that the violator acted in good faith and/or that the violator has taken certain remedial actions may, however, result in complete or partial restoration of farm program subsidies. Id. § 3822(h)(1) & (2).
Downer appealed, through the SCS’s many layers of administrative process, the SCS determination that his filling activity had violated Swampbuster. He was unsuccessful. He then appealed, through the ASCS administrative processes, for reconsideration of the SCS technical determination and/or for a finding that his violation was mitigated or excused under the good faith exception to Swampbuster. He was again unsuccessful. On May 26, 1993, Downer refunded to the ASCS the $4,624 in price support payments which he had received in 1989. He then sought review in the district court, under 5 U.S.C. §§ 704-706, claiming that the determinations by the SCS and ASCS were wrong, were arbitrary and capricious, and denied him due process of law.5
II. DISCUSSION
I concur in Parts II.A, II.B.l, II.B.2, II. B.3, and II.C. of the court’s opinion. In my view, the result reached by the court in Part II.B.4 (Artificial Wetlands) is both unfair to Downer and validates an incorrect and unlawful construction of 16 U.S.C. § 3822(b) and 7 C.F.R. § 12.6(9) by the SCS. Thus, I dissent.
Downer argues that it was the pre-1980 construction of the dugouts in dry areas that created the wet areas in the first place, and thus he is exempted from ineligibility by 16 U.S.C. § 3822(b). Subsection (b) exempts from ineligibility those who farm or convert “wetland created by excavating or diking nonwetland to collect and retain water.” Id. Specifically,
No person shall become ineligible under section 3821 of this title for program loans, payments, and benefits—
(1) as the result of the production of an agricultural commodity on—
(B) an artificial lake, pond, or wetland created by excavating or diking nonwet-land to collect and retain water for purposes such as water for livestock ... or flood control;
or;
(2) for the conversion of—
(A) an artificial lake, pond, or wetland created by excavating or diking nonwet-land to collect and retain water for purposes such as water for livestock ... or flood control.
Id. Downer complains that the agency has not shown that the “wetlands” at issue predate the dugouts. The agency maintains that once it shows that the area became a “wetland” and was “converted” as those terms are defined in sections 3801(a)(4)(A) & (a)(16), see supra at 1002-04 & 1004, it need not show how or when the “wetland” came about. The agency asserts that section 3822(b) permits filling of and production of agricultural commodities on artificial lakes and dugouts, but not the filling of and production of agricultural commodities on any “wetlands,” however or whenever created.6 The agency gives no basis or rationale for *1008this assertion which is, of course, contrary to the plain language and import of section 3822(b). This assertion is also contrary to the agency’s own regulations which exempt production of agricultural commodities on artificially created “wetlands.” 7 C.F.R. § 12.5(b). Because the regulation merely reiterates, verbatim, the statutory exemption for artificially created “wetlands,” it is the statute to which I turn.
While I must defer to a reasonable agency statutory interpretation, see Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984), I cannot defer to obtuse interpretation or noninterpretation. The agency has, in fact, failed to interpret sections 3822(b)(1)(B) and (2)(A) at all. The agency does not point out, as it well might, that subsection (b)(1)(B), which exempts production of agricultural commodities on artificially created “wetlands,” was included in the original Swampbuster enacted in 1985; but subsection (b)(2)(A), which explicitly exempts “conversion” of artificial “wetlands,” was added by the 1990 amendments. The district court applied the later, 1990, version of section 3822(b) when it considered the issue, evidently because the agency failed to alert that court that there had been a change. Compare Food Security Act, § 1222(a), Pub.L. No. 99-198, 99 Stat. 1508 (1985) (codified at 16 U.S.C. § 3822 (Supp. IV 1986)) with Food and Agriculture Act, § 1422, Pub.L. No. 101-624, 104 Stat. 3573 (1990) (codified as amended at 16 U.S.C. § 3822 (Supp. III 1991)).7 The version of the exemption for artificial “wetlands” in effect at the time of Downer’s production of agricultural commodities was thus, perhaps, not as explicit as after the 1990 elucidation. However, even without the 1990 exposition, the original section 3822 makes abundantly clear that whether the “wetlands” in question here were artificially created is relevant indeed.
Had the agency interpreted the statute, or even its own regulations (which, as noted, merely replicate, verbatim, the version of subsection (b) in effect at the time of their issue),8 we would have the benefit of its expertise in considering whether subsection (b)(1)(B) (the exemption permitting production of agricultural commodities on artificially created lakes, ponds, and “wetlands”) necessarily implies an exemption for the conversion which permits that production. Or, if not, whether subsection (b)(2)(A) applies retroactively. However, because subsection (b)(1)(B) obligatorily, if impliedly, exempts the “conversion” of an artificially created “wetland,” the retroactivity of the clarification provided by subsection (b)(2)(A) need not concern us.
“Agricultural commodities” are defined as “any agricultural commodity planted and produced ... by annual tilling of the soil.” 16 U.S.C. § 3801(a)(1)(A). Such production, therefore, necessarily requires the filling of an artificially created lake or pond. This the agency concedes. I see no reason why the third listed exempted entity, an artificially created “wetland,” would be subject to any different interpretation. The plain language of section 3822(b)(1)(B) exempts “production of an agricultural commodity on ... an artificial lake, pond, or wetland.” (Emphasis added). Section 3822(b) has always contained a separate exemption for production of agricultural commodities on “wetlands,” of any origin, when such production is made possible by entirely natural events such as drought.9 16 U.S.C. § 3822(b)(1)(D). Thus, the production of agricultural commodities exempted in *1009subsection (b)(1)(B) must be production made possible by manipulation of artificially created “wetlands.” Otherwise, the inclusion of “wetland” in subsection (b)(1)(B) is mere sur-plusage.
Congress must be presumed to be using the definitions it provides for a statutory scheme. Here, Congress clearly exempted the “production of an agricultural commodity” on artificially created “lake[s], pond[s], or wetland[s],” and at the same time provided the definitions and penalties for “conversion” of “wetlands.” Thus the mere determination of “wetland” and “conversion” is not enough. There must be a determination that the “wetlands” in question were naturally occurring.10 To find otherwise would render Congress’s exemption of those who “produce an agricultural commodity” on artificial “wetlands” nugatory and meaningless. Such an interpretation cannot be correct.
While the evidence in the administrative record as to soil type may be sufficient for an expert determination that the “wetlands” predated the dugouts, we are not authorized or qualified to make such a determination. There also may be aerial photographs existent which show that the wet areas predated the dugouts, but no such photographs are in this record. Or it may be that the agency scientists implicitly determined that the “wetlands” were naturally occurring and predated the construction of the dugouts. I do not know and the other members of the panel cannot know because the agency has given us no guidance.
When the agency has neither argued nor addressed an important issue, we may not do it for them. See Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43, 103 S.Ct. at 2866-67. If the agency itself has not provided a reasoned basis for its action, the court may not supply one. Id. We may not substitute our judgment for theirs, and here the agency, relying on a clearly erroneous statutory interpretation, has apparently made no judgment as to the issue at all. Rather, it relies on the bald assertion that the possible artificial origin of the “wetlands” is irrelevant. That assertion is simply wrong. An agency interpretation and application of a statutory seheme must incorporate, or at least deal with, the statutory exemptions embedded within that scheme. I find no place in the administrative record where the question of artificial creation is explicitly considered or addressed, and the agency does not direct us to any such determination. Because the agency has not addressed an important aspect of the problem in any way, I would find the agency’s determination that Downer’s conversion of “wetlands” rendered him ineligible for crop subsidy payments to be arbitrary, capricious, and not otherwise in accordance with law. Id.
The court simply chooses to ignore this statutory dereliction by the agency. It accomplishes this by first asserting that Downer “faded to present the point” before the agency. Supra at 1006. This is error. While Downer conceded that no evidence on the point was offered by either party, he has asserted this legal issue from the inception of this dispute.
Next, the court assigns to Downer the burden of proof of the facts necessary to establish this essential legal element of the agency’s claim against Downer. This is also error. The statute says that “[n]o person shall become ineligible [for price support payments] ... as the result of production ... on ... an artificial ... wetland created by excavating or diking nonwetland ... or for the conversion of ... an artificial lake, pond, or wetland_” 16 U.S.C. § 3822(b). It is the agency who is asserting Downer’s ineligibility; thus, proof of ineligibility should be the burden of the government. According to the court, all the agency must do is assert ineligibility. This, then, according to the court, shifts to Downer the burden of afftr-*1010matively refuting this bald legal conclusion, even in the face of an agency assertion that is based upon an erroneous statutory construction. I disagree.
The court points to an agency regulation, 7 C.F.Ri § 12.5(b)(9), a regulation not applicable to the procedures in play in this matter. And, even if arguably applicable, the regulation violates the underlying statute that defines ineligibility. The regulation states in pertinent part:
(9) It is the responsibility of the person seeking an exemption related to converted wetlands under [section 12.5] to provide evidence, such as receipts, crop history data, drawings, plans or similar information, for purposes of determining whether the conversion or other action is exempt in accordance with [section 12.5],
7 C.F.R. § 12.5(b)(9) (emphasis added).
Here, as in 16 U.S.C. § 3822(b)(1)(B) and (2)(A), the issue is whether or not the land in question is, indeed, naturally occurring “wetlands” regulated by the statute at all. The point is, there has to be an initial determination, at the burden of the agency, that the land upon which- the production occurs is within the purview of the Swampbuster legislation. If it is, then the burden of establishing an exemption falls upon the producer shown to be ineligible. Use of 7 C.F.R. § 12.5(b)(9) to throw this first responsibility upon Downer violates the statutory scheme and, perhaps, due process. The government has contended throughout this proceeding, and in its brief to the court, that a man-made “dugout” or “water hole” produces a regulated “wetland” subject to a declaration of ineligibility under the Act. This interpretation, however, clearly flies in the face of the plain, unambiguous language of 16 U.S.C. § 3822(b)(1)(B) and (2)(A).
We review an administrative decision de novo. Von Eye v. United States, 92 F.3d 681, 684-85 (8th Cir.1996) (citing Lockhart v. Kenops, 927 F.2d 1028, 1032 (8th Cir.), cert. denied, 502 U.S. 863, 112 S.Ct. 186, 116 L.Ed.2d 148 (1991)). We must uphold the agency decision “unless it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ ” Von Eye, 92 F.3d at 685 (quoting 5 U.S.C. § 706(2)(A)) (emphasis added).
Given the agency’s overreaching and erroneous interpretation of the statute, its decision cannot be “in accordance with law.” Further, any regulation that purports to relieve the agency of its obligation to follow the law as enacted by Congress is either inapplicable or must be disregarded. See, e.g., Newton v. Chater, 92 F.3d 688, 693-94 (8th Cir.1996).
III. CONCLUSION
Because the agency, relying on unsupportable statutory interpretation, failed to properly establish whether the land in question is regulatable “wetlands,” or not, I would reverse the determination of ineligibility as arbitrary, capricious and not in accordance with the law. I would remand this tempest to the agency teapot for consideration of this important issue.

. There is some overlap in the chronology of procedural events. Downer filed the initial suit before the last ASCS determination of no good faith, and refunded the price support payments only after the government counterclaimed for them. These overlaps are, however, irrelevant for purposes of this appeal.

. I note that the district court did not consider the question of whether the “wetlands” were artificially created to be irrelevant. Rather, that court, in addressing the question, seems to have assumed the answer rather than find it in the agency record. See Downer v. United States, 894 F.Supp. 1348, 1357 (D.S.D.1995).

. I realize that the notes to 16 U.S.C.A. § 3822 state that the 1990 amendment of that section did not change subsection (b) other than reletter-ing. Examination of the U.S. Code, however, shows those notes to be in error.

. USDA's regulations reproduce the exemptions for artificially created "wetlands." First, 7 C.F.R. § 12.5(b)(l)(iv)(A) (1995) explicitly exempts a farmer from any penally from an SCS finding of "conversion of wetland ... [i]f the area is ... artificial ... wetland,” making the agency’s claim of irrelevance all the more puzzling. The older version of the regulation, 7 C.F.R. § 12.5(d)(l)(ii) (1989), reproduces the original statute’s proscription against a determination of ineligibility "as the result of the production of an agricultural commodity on ... [a]n artificial ... wetland,” which also puts artificiality clearly in issue. The agency does not address or even mention these regulations in its assertion of irrelevance.

.This alternate exemption is present in section 3822 both as originally passed, and as amended.

. Section 3801(a)(4)(B) farther confirms the necessity of such a determination. That subsection directs that there shall be no finding of “converted wetland[s]” if “production of an agricultural commodity” is possible due to a natural occurrence such as drought and "is not assisted by an action of the producer that destroys natural wetland characteristics." Id. (emphasis added).
We, of course, do not make any finding on what “naturally occurring” means, or on the interplay between that and "artificially created.” Perhaps "artificial” "wetlands" become "natural" after the passage of long periods of time. These are the sorts of interpretive nuances which Congress committed to the agency's expertise in the first instance.