Court Opinion

ID: 767399
Source: CourtListenerOpinion
Date Created: 2012-04-18 08:33:05+00
Date Added: 2024-06-11T17:55:28.098932
License: Public Domain

201 F.3d 915 (7th Cir. 2000)
United States of America,    Plaintiff-Appellee,v.Jerry M. Dierckman,    Defendant-Appellant.
No. 98-4131
In the  United States Court of Appeals  For the Seventh Circuit
Argued September 15, 1999Decided January 11, 2000

Appeal from the United States District Court   for the Southern District of Indiana, New Albany Division.  No. 96-112-C-B/G--Sarah Evans Barker, Chief Judge. [Copyrighted Material Omitted]
Before Cudahy, Coffey and Easterbrook, Circuit Judges.
Cudahy, Circuit Judge.

1
In 1993, the United  States Department of Agriculture (USDA) declared  Jerry Dierckman1 ineligible for all USDA farm  program benefits, retroactive to the 1991 crop  year. Ineligibility was based on Jerry's  violation of the Swampbuster provisions of the  Food Security Act of 1985 (FSA), as amended by  the Food, Agriculture, Conservation, and Trade  Act (FACTA). The United States sued to recover  the $92,703.00 in farm benefits paid to Jerry  from 1991 to 1993. In that lawsuit, Jerry  challenged the constitutionality of certain  portions of the FSA and the validity of certain  USDA regulations promulgated under the FSA, and  he requested a declaration that his eligibility  for benefits be reinstated. Both parties filed  cross-motions for summary judgment, and on  October 21, 1998, the district court granted  summary judgment in favor of the government.  Jerry appeals, and we affirm.

I. Legal Background

2
Congress adopted the Food Security Act on  December 23, 1985. Pub. L. No. 99-198 (1985)  (codified at 16 U.S.C. sec. 3801 et seq. (1986)).  By enacting the FSA, Congress intended to  "discourage the draining and cultivation of  wetland that is unsuitable for agricultural  production in its natural state." S. Rep. No. 99-  145 at 303 (1985), reprinted in 1985 U.S.C.C.A.N.  1103, 1969. To further this goal, Congress  included the Swampbuster provision of the FSA,  which, in its initial form, stated that  "following December 23, 1985, any person who in  any crop year produces an agricultural commodity  on converted wetland shall be ineligible for"  various USDA farm benefit programs. 16 U.S.C.  sec. 3821 (1986).

3
In 1990, Congress decided to toughen up  Swampbuster in the Food, Agriculture,  Conservation, and Trade Act. See Pub. L. No. 101-  624, Title XIV, sec. 1421(b) (1990) (codified at  16 U.S.C. sec. 3801 et seq. (1994)). While  retaining the original 1985 provision, FACTA  added a new provision which provided that "any  person who in any crop year subsequent to  November 28, 1990, converts a wetland by  draining, dredging, filling, leveling, or any  other means for the purpose, or to have the  effect, of making the production of an  agricultural commodity possible on such converted  wetland shall be ineligible for" USDA farm  benefits. 16 U.S.C. sec. 3821(b) (1994).2 After  the 1990 Swampbuster amendments, a person could  become ineligible for USDA farm benefits either  by (1) converting wetland and growing crops on  the land if the conversion was accomplished after  December 23, 1985, or (2) merely converting  wetland after November 28, 1990, so that crops  could be grown on the land. See 16 U.S.C. sec.  3821 (1994); 7 C.F.R. sec. 12.4 (1994).

4
The ineligibility determination under the  Swampbuster provisions involves multiple agencies  within the USDA. The Soil Conservation Service  (SCS)3 determines whether a wetland or  converted wetland exists on a particular farm and  whether production of a crop is possible on any  converted wetland. See 7 C.F.R. sec. 12.6(c). The  initial SCS determination is made by the district  conservationist. See id. The district  conservationist's decision is appealable to the  area conversationist, then to the state  conservationist, and finally to the Chief of the  SCS at USDA headquarters in Washington, D.C. See  id. After the SCS makes its technical  determination regarding the existence or  conversion of a wetland, another USDA agency, the  Agricultural Stabilization and Conservation  Agency (ASCS),4 determines whether any  exemptions apply to the conversion of the  wetland. See 7 C.F.R. sec. 12.6(b). The ASCS then  determines the eligibility of any farmer who  applies to the ASCS for USDA farm benefits. See  7 C.F.R. sec. 12.6(a). These ASCS determinations  are first made by an ASCS county committee. An  appeal can be taken to the appropriate state  committee, then to the Deputy Administrator for  State and County Operations (DASCO) and finally  to the National Appeals Division (NAD) of the  ASCS. See 7 C.F.R. sec. 12.6(b).

II. Factual Background

5
The facts of this case can be nicely segmented  into three phases. In the first phase, the SCS  determined that wetlands and converted wetlands  were present on Jerry's farm but that no  Swampbuster violation existed as of early 1991.  In the second phase, the SCS determined that  additional conversions took place in 1991 in  violation of the Swampbuster provision  prohibiting the conversion of a wetlandafter  November 28, 1990. In the third phase, the ASCS  determined that both Jerry and Milton were  ineligible for all USDA farm benefits as a result  of the conversion.

A. The Wetland Determination

6
Jerry Dierckman is a farmer who grows crops  both on his own land and on land that he rents  from others, including his father, Milton  Dierckman. The land relevant to this appeal is  located in Franklin County, Indiana, and Jerry  rented it from his father. In 1986, Milton cut  down the trees on roughly the eastern two-thirds  of the northern portion of this property. The  stumps were left in the ground for a number of  years afterwards--thus continuing to preclude  farming on that portion of the farm--but in  August of 1990, Gunter Excavating Company  (Gunter) was hired to dig up the stumps, fill the  holes and haul the stumps away. On September 3,  1990, Gunter issued a written proposal to Jerry  concerning the work, and Gunter began work  shortly thereafter. Gunter issued a bill for its  work to Jerry on September 25. The bill shows  "work ordered by" Jerry, but Milton paid this  bill on October 10. Due to heavy rains in October  of 1990, the excavating machinery bogged down,  and Gunter could not continue its work of  removing tree stumps. For the next several  months, the land remained in the same condition,  with some holes filled, some stumps remaining in  the ground, other stumps scattered about the  property and some holes left unfilled.

7
Jerry wanted USDA farm benefits for the land  that he had rented from his father. In order to  receive these farm benefits from the USDA for the  1991 crop year, Jerry was first required to get  his eligibility certified. On January 7, 1991,  Jerry completed ASCS Form AD-1026, entitled  "Highly Erodible Land and Wetland Conservation  Certification." AR, vol. 1 at 199.5 On this  form, Jerry indicated that he intended to convert  "wet areas" and intended to grow crops on  converted "wet areas" on his farm.6 Needless to  say, these responses attracted the attention of  the ASCS, which referred the matter to the SCS.  After receiving the referral, the SCS set out to  determine if any of Jerry's "wet areas" were  wetlands protected by the Swampbuster provisions  of the United States Code. In March of 1991, an  SCS district conservationist determined that the  northern portion of Jerry's farm contained both  wetlands and converted wetlands. AR, vol. 1 at  191. The district conservationist determined that  the conversion of the wetlands had begun in  August of 1990 but had ended before the more  stringent Swampbuster provision went into effect  on November 28, 1990. Thus, with respect to the  already converted wetlands, Jerry was not in  violation of Swampbuster because no crops had  been planted on them. The district  conservationist informed Jerry that any  additional conversion of any additional wetlands,  however, would be a Swampbuster violation,  whether crops were grown or not. AR, vol. 1 at  191. After the district conservationist's  determination, Jerry filed another Form AD-1026,  this time stating that he had no plans to convert  wet areas on the land.7 On March 19, 1991,  however,Jerry had appealed to the area  conservationist the determination that the farm  contained wetlands, stating: "I request a  redetermination and permission to continue to  clear the area in question. . . . Intended land  use will be hayland, permanent pasture." AR, vol.  1 at 197.

8
On May 17, 1991, the area conservationist  denied the appeal, and on July 11, the area  conservationist's determination was affirmed by  the state conservationist after members of the  state conservationist's wetland appellate review  team visited the farm and performed some field  tests. In September of 1991, the administrative  appeal process for the wetland determination  ended with the affirmance by the SCS of the state  conservationist's determination. In a letter to  Jerry Dierckman dated September 27, the Chief of  the SCS explained its conclusions: "We have  determined that the areas in standing trees and  stumps are wetlands (W), and the areas where the  stumps have been removed are converted wetlands  (CW). This decision supports the earlier decision  of the SCS State Conservationist. . . ." AR, vol.  1 at 127. The Chief also explained that because  the converted wetlands had been converted before  November 28, 1990, and crops had not been grown  on those converted wetlands, there had been no  Swampbuster violation as of that time. Id. The  Chief further made clear that any additional  conversion activity would result in USDA  ineligibility. Id.

B. The Conversion Determination

9
On December 18, 1991, the district  conservationist and an SCS technician visited the  part of Jerry's farm previously designated as  wetlands and noticed changes to the property.  Since their visit the prior spring, some  additional stumps had been removed from the  ground and moved into rows, the holes had been  filled and the land appeared to have been root  raked. The ground was now farmable. The visitors  concluded that this work had occurred after  November 28, 1990, and constituted a conversion  of a wetland. They designated the land "CW+91,"  signifying that a Swampbuster violation had taken  place in 1991, and notified Jerry of the finding  by letter on January 31, 1992. AR, vol. 1 at 122-  25. Jerry responded by phone on February 3, for  the first time making an argument that he would  repeat throughout the administrative appeals  process and still repeats in this court: Jerry  told the district conservationist that his  father, Milton Dierckman, owned the tract and  that Milton was going to continue to "improve"  the land. Jerry added, in an obvious attempt to  exonerate himself, "I have no control over the  ground. Dad owns it. I just rent it." AR, vol. 1  at 121.

10
In July of 1992, Jerry met with SCS officials  at the farm. Further conversion had taken place,  and only a small wooded section remained  untouched. Jerry (and his mother, who was also  present) again explained that the conversion was  Milton's doing. The notes of the meeting indicate  that the SCS agent asked Jerry "if he had checked  with the ASCS office to see if the records could  be changed to only show him . . . as the renter[  ] of the cropland." AR, vol. 1 at 92. Jerry  responded that he had "had no dealings with the  ASCS office." Id.8

11
Although he supposedly had no control over the  wetlands, Jerry pursued an appeal that was  rejected by the area conservationist on July 17,  1992. The determination that wetlands had been  converted after November 28, 1990, was  subsequentlyaffirmed by the state  conservationist. In its letter of September 15,  1992, the SCS again urged Jerry to contact his  local ASCS office to discuss his status as  operator with respect to USDA program benefits.  Finally, on October 28, 1993, the Acting Chief of  the SCS rejected Dierckman's final appeal. Jerry  was advised that any conversion taking place  after November 28, 1990, that made agricultural  production possible would result in the loss of  eligibility until the area designated CW+91 was  restored.

C. Ineligibility determination

12
The SCS referred the matter to the Franklin  County ASCS Office, explaining that its wetlands  and conversion inquiries were complete with its  having found that Jerry Dierckman had converted  wetlands after November 28, 1990. At a regular  session meeting on November 17, 1993, the county  ASCS committee discussed the SCS's final  determinations in the Dierckman matter, and  determined that both the owner, Milton Dierckman,  and the operator, Jerry, were the producers  responsible for the conversion. Therefore, both  were declared ineligible for USDA farm benefit  payments on all land that they owned and  operated. Jerry asked the committee to reconsider  on the grounds that he was not the operator of  the land constituting converted wetlands and that  any work he performed had ended before the  November 28, 1990, trigger date for the more  stringent Swampbuster provision. The committee  rejected this argument in January of 1994,  stating that, after reviewing all the facts, it  determined that Jerry was the operator of the  farm--which "means the total farm, not just the  cropland"--and was therefore ineligible. AR, vol.  2 at 48A.

13
Jerry appealed to the state ASCS, and received  his first favorable decision. The committee  determined that "although Jerry may have been  associated with the conversion of the wetland, he  had no control over his father's decision to  finish clearing the wetland after he was told to  stop by the SCS." AR, vol. 2 at 35B. The state  body requested that the county grant Jerry's  requested relief, but the county committee  refused to reverse its determination, and the  appeal continued up the chain. The Deputy  Administrator for State and County Operations  found Jerry ineligible for subsidies "because  there is evidence that Jerry Dierckman was in  general control of the operation on the wetland  area in question. . . ." AR, vol. 2 at 21. Jerry  appealed this decision to the ASCS National  Appeals Division, but the NAD denied his appeal  by letter on January 17, 1995. Thus, Jerry was  ineligible for USDA subsidies retroactive to the  1991 crop year.

D. Proceedings Below

14
The United States sued Jerry to recover the  benefit payments it had made during the 1991,  1992 and 1993 crop years, totaling $92,703.00.  Jerry challenged the United States' claim on the  ground that the wetland at issue is not covered  by the FSA. He also challenged the ineligibility  determination because: (1) the agency fails to  provide a rational basis for its conclusion that  Jerry violated the Swampbuster provisions of the  FSA, (2) the USDA regulation mandating his  ineligibility is void because it is inconsistent  with the FSA and (3) the FSA and its implementing  regulations violate substantive due process. The  district court upheld all of the administrative  determinations and found for the United States on  summary judgment. See United States v. Dierckman,  41 F. Supp. 2d 870 (S.D. Ind. 1998). This appeal  followed.

III. Discussion

15
In his appeal to this court, Jerry Dierckman  makes basically the same challenges as he did in  the district court. He argues that the wetland in  question is outside the reach of the FSA. He also  argues that the agency regulation on which the  USDA based its decision is outside the scope of  the FSA and that the agency failed to provide a  rational basis for its conclusion that Jerry  violated the Swampbuster provisionof the FSA.  Finally, Jerry argues that the FSA and its  implementing regulations violate substantive due  process.

A.  The Reach of the FSA

16
Jerry asserts that because the wetland on his  farm is isolated and has no connection to  interstate commerce, it cannot be regulated under  the Food Security Act. His argument centers on an  analogy to the Clean Water Act (CWA), 33 U.S.C.  sec. 1251 et seq. (1999), which prohibits the  discharge of pollutants into the waters of the  United States. Because the "wetlands" regulated  by the FSA are a subset of the waters of the  United States regulated by the CWA, Jerry argues,  regulation of an intrastate wetland is only valid  if the appropriate agency has determined that the  wetland in question had at least some  relationship to interstate commerce. Therefore,  he concludes, because no agency has determined  that the wetlands on his farm had a connection to  interstate commerce, no federal agency has proper  jurisdiction. But this analogy between the FSA  and the CWA lacks force because, as the district  court explained, "the language in the Clean Water  Act on which he relies is not parallel to the  Food Security Act." Dierckman, 41 F. Supp. 2d at  874. Further, Jerry's argument overlooks the  difference between direct congressional  regulation under the Commerce Clause, which  requires a connection to interstate commerce, and  indirect regulation under the spending power,  which does not. Compare United States v. Lopez,  514 U.S. 549, 559-60 (1995), with South Dakota v.  Dole, 483 U.S. 203, 207 (1987).

17
The CWA directly regulates the chemical,  physical and biological integrity of the Nation's  waters, and "the geographical scope of the Act  reaches as many waters as the Commerce Clause  allows." Solid Waste Agency of N. Cook County v.  United States Army Corps of Eng'rs, 191 F.3d 845,  851 (7th Cir. 1999). Therefore, Jerry is entirely  correct that any potential target of CWA  regulation must have some connection to  interstate commerce. But, Jerry fails to provide  a plausible reason why the limitations that  narrow the application of the CWA should also  limit the FSA.

18
Jerry's argument falters because it assumes that  the FSA is a creature of the Commerce Clause. The  FSA is not an exercise of direct regulatory  power; instead, the FSA conditions the receipt of  USDA farm benefits on the preservation of  wetlands. This is indirect regulation invoking  the spending power and is not limited by the  enumeration of Congressional powers in Article I,  section 8 of the Constitution. As the Supreme  Court has explained:

19
"[T]he power of Congress to authorize expenditure  of public moneys for public purposes is not  limited by the direct grants of legislative power  found in the Constitution." Thus, objectives not  thought to be within Article I's "enumerated  legislative fields," [like the Commerce Clause,]  may nevertheless be attained through the use of  the spending power and the conditional grant of  federal funds.

20
South Dakota v. Dole, 483 U.S. at 207 (quoting  United States v. Butler, 297 U.S. 1, 66 (1936)).

21
Even though Congress may lack the authority to  regulate directly a strictly intrastate wetland,  the incentive provided by the Food Security Act  is a valid exercise of the spending power. In an  attempt to avoid this conclusion, Jerry asserts  that "there is no indication on the face of the  FSA or in its legislative history that Congress  has yet chosen to exercise this power by  attempting to regulate water bodies that are  traditionally the exclusive concern of the  state." Appellant's Br. at 36-37. This certainly  does not follow. Congressional intent to include  intrastate wetlands could not be clearer on the  face of the FSA: the Act defines both "wetland"  and "converted wetland," see 16 U.S.C. sec.sec.  3801(a)(4), (a)(16) (1994), without reference to  interstate commerce or any definitionapplicable  to the CWA.9 The FSA conditions eligibility for  USDA benefits on not converting wetlands or  farming on converted wetlands, as defined. See 16  U.S.C. sec. 3821. This simple scheme clearly  demonstrates Congress' intent to exercise  indirect regulatory power "by conditioning  receipt of federal moneys upon compliance by the  recipient with federal statutory and  administrative directives." South Dakota v. Dole, 483 U.S. at 206 (quoting Fullilove v. Klutznick,  448 U.S. 448, 474 (1980)). Jerry's argument  therefore fails.

B. The Implementing Regulations

22
Jerry next argues that the USDA regulation  which mandates his ineligibility--namely 7 C.F.R.  sec. 12.4(e)--is void because it is inconsistent  with the FSA. Jerry characterizes the regulation  as extending liability to a farm "operator" who  has played no role in the wetland conversion; he  further argues that the plain language of the  Swampbuster provision prohibits this  extension.10 After a thorough consideration  of Jerry's argument, we find that the regulations  easily survive his challenge.

23
We review USDA regulations under the  Administrative Procedure Act, and we may set  aside the agency action only if the regulations  are "arbitrary, capricious, an abuse of  discretion, or otherwise not in accordance with  law." 5 U.S.C. sec. 706(2)(A) (1999). Because  Congress expressly authorized the USDA to  promulgate regulations on ineligibility, see 16  U.S.C. sec. 3844 (1994),11 we review the  USDA's regulations within the framework  established by the Supreme Court in Chevron  U.S.A., Inc. v. Natural Resources Defense  Council, 467 U.S. 837 (1984). See Hanson v. Espy,  8 F.3d 469, 472-73 (7th Cir. 1993). The starting  point of this analysis is, of course, the  language of the statutory Swampbuster  provisions,12 and if "the plain meaning of  the text of the statute either supports or  opposes the regulation," the inquiry ends, and  this court applies the statute's plain meaning.  Solid Waste Agency, 191 F.3d at 851. If the  statute is silent or ambiguous, "the court must  defer to the agency interpretation so long as it  is based on a reasonable reading of the statute."  Id.; see also Hanson, 8 F.3d at 473.

24
Jerry's challenge to the regulation depends on  defining the scope of the phrase "any person who  converts a wetland."13Jerry argues that this  phrase is unambiguous and demonstrates clearly  that Congress intended "[o]nly the person who  converts the wetland" to be ineligible for USDA  benefits. Appellant's Br. at 22-23. He claims  that the person who converts the wetland must be  the person who actually brings about the  conversion--e.g., by draining, dredging, filling  or leveling--or any person who hires another to  perform the conversion. Id. at 26-27. This  interpretation strikes us as a plausible reading,  but nothing in the statutory text unambiguously  compels such a reading.

25
The most obvious reading of the phrase "any  person who converts a wetland" may denote an  individual who physically converts wetlands--  i.e., who digs up the stumps, fills in the holes,  etc. With that reading, only the excavation  company--in this case Gunter--would be deemed  ineligible for USDA farm benefits. Congress  certainly intended to cover more than an  excavator, but the precise contours of the phrase  "any person who converts a wetland" do not leap  from the text of the statute. Congress leaves us  only with this ambiguous phrase; therefore, "the  question for the court is whether the agency's  answer is based on a permissible construction of  the statute." Chevron, 467 U.S. at 843.

26
The regulations addressing ineligibility for  farm benefits are found at 7 C.F.R. sec. 12.4.  Jerry challenges 7 C.F.R. sec. 12.4(e), which  provides that the statutory phrase "any person  who converts a wetland" covers the operator of a  wetland that is converted to farmland. The  regulation states:

27
For the purposes of paragraph (a)14 of this  section, a person shall be determined to have  produced an agricultural commodity on a field in  which highly erodible land is predominant or to  have designated such a field as conservation use,  to have produced an agricultural commodity on  converted wetland, or to have converted a  wetland, if:

28
(1) SCS has determined that--

29
(i)  Highly erodible land is predominant in such  field, or

30
(ii)  All or a portion of the field is converted  wetland; and

31
(2) ASCS has determined that the person is or  was the owner or operator of the land, or  entitled to share in the crops available from the  land, or in the proceeds thereof.

32
7 C.F.R. sec. 12.4(e) (footnote added). The  regulations defined an "operator" as "the person  who is in general control of the farming  operations on the farm during the crop year." 7  C.F.R. sec. 12.2(a)(20). In this case, the SCS  determined that a portion of the field was  converted wetland under sec. 12.4(e)(1)(ii) of  the regulations.15 Then the ASCS found that  Jerry was the person who was in general control  of the farming operations during the 1991 crop  year. See sec.sec. 12.4(e)(2), 12.2(a)(20). On  this basis, Jerry was deemed to have converted  the land.16

33
This regulatory interpretation of the phrase  "any person who converts a wetland" is broad but  not unreasonable. Jerry argues to the contrary  because the regulations impose "strict and  vicarious" liability on an "innocent" operator,  and he points toward legislative history as  supportive of his argument. We, however, find  little to help him there. The legislative history  does not do much more than repeat, mantra-like,  the phrase "any person who converts a wetland."  See, e.g., S. Rep. No. 101-357 at 236 (1990),  reprinted in 1990 U.S.C.C.A.N. 4656, 4890 ("This  new provision holds a person who converts a  wetland . . . "). Based on the legislative  history, neither Jerry's nor the USDA's reading  is unreasonable.

34
But Jerry further claims that an operator  should not be charged with the actions of an  owner because the owner has "ultimate" control  over the land. However, under the regulations,  before one can be considered an operator of a  piece of land, such a person "must be in general  control of the farming operations on the farm  during the crop year." 7 C.F.R. sec. 12.2(a)(20).  Thus, a measure of control over the land, even  with respect to the owner, is explicit in the  definition of "operator." It is, therefore, not  unreasonable for the USDA to hold such a person  in "control" responsible for the conversion of a  wetland. If the operator is in fact in "control,"  he must at least have acquiesced in the  conversion and to that extent is responsible for  it. See 7 C.F.R. sec. 12.10.17 On the present  facts, to escape liability, Jerry must at least  have done or said something to negate clearly his  acquiescence in his father's actions and to put  himself in opposition to them. See infra at 21-  22.

35
The effect of the regulation is to make one who  is in control of the farm and is seeking USDA  benefits responsible for the conversion. Congress  acknowledged that "[p]articipation in federal  programs is voluntary, and participation has  always carried with it certain responsibilities,  obligations, and conditions." S. Rep. No. 101-357  at 231, reprinted in 1990 U.S.C.C.A.N. at 4885.  The regulations serve to align the benefits with  the burdens: one who seeks USDA benefits must  make certain to meet the conditions which  encumber them. In light of all these  considerations, the regulations are not  "unreasonable or contrary to the purposes of the  statute or to clearly expressed legislative  intent on the point in issue." Jones v. Dir.,  Office of Workers' Comp. Programs, United States  Dep't of Labor, 977 F.2d 1106, 1110 (7th Cir.  1992). Therefore, under Chevron, we uphold the  agency regulation.

C. Agency Findings of Fact

36
Jerry makes his most formidable argument by  challenging the agency's determination that he  was the "operator" of the converted wetlands. He  argues that although he was the "operator" of all  farmable land on the tract, he was not the  "operator" of the wetlands. Jerry claims that his  father, Milton, was the "operator" of the  wetlands. If this is accurate, Jerry falls  outside of the scope of sec. 12.4(e) and was  improperly found ineligible for benefits.  Although Jerry contends that the administrative  record contains uncontradicted evidence that  Milton alone was the decision maker and actor  with respect to the conversion of the wetlands in  1991 and thereafter, and therefore in sole  control, the ASCS disagreed. It found that Jerry  was in general control of the farming operations  and therefore the "operator" of the converted  wetlands.

37
We may set aside agency findings of fact only  if they are "arbitrary, capricious, an abuse of  discretion, or otherwisenot in accordance with  law." 5 U.S.C. sec. 760(2)(A). This is a highly  deferential standard. See Citizens to Preserve  Overton Park, Inc. v. Volpe, 401 U.S. 402, 416  (1971). But, of course, deference is not total.  Id. at 415, 91 S. Ct. 814. And although we must "uphold a  decision of less than ideal clarity if the  agency's path may reasonably be discerned,"  Bowman Transp. Inc. v. Arkansas-Best Freight  Sys., Inc., 419 U.S. 281, 286 (1974), we may not  supply a reasoned basis for the agency's action  that the agency itself has not given. SEC v.  Chenery Corp., 332 U.S. 194, 196 (1947). The  agency's decision "need not include detailed  findings of fact but must inform the court and  the petitioner of the grounds of the decision and  the essential facts upon which the administrative  decision was based." Bagdonas v. Dep't of the  Treasury, 93 F.3d 422, 426 (7th Cir. 1996)  (quoting Kitchens v. Dep't of the Treasury, 535 F.2d 1197, 1199-1200 (9th Cir. 1976)). This means  that on the administrative record the decision  must have a rational basis. Bagdonas, 93 F.3d at  425-26.

38
The National Appeals Division of the ASCS made  the final decision here, applying the test of  "general control of the farming operations on the  farm." 7 C.F.R. sec. 12.2(a)(20). It found that  "[Jerry Dierckman] was clearly the operator of  the converted wetland acreage in 1991." AR, vol.  2 at 6. In coming to this conclusion, the agency  relied on information that Jerry himself provided  when he was seeking benefits for the land. In its  written decision, the NAD made several specific  findings of fact that supported its conclusion:

39
1. Form ASCS-211, Power Of Attorney, was completed  by [Jerry Dierckman] and Milton J. Dierckman on  November 16, 1989, October 1, 1990, and October  26, 1990. The notarized instruments appointed  [Jerry] the true and lawful attorney for and in  the name, place and stead of the undersigned  (Milton J. Dierckman) in connection with all  agricultural programs under the jurisdiction of  the USDA, administered through county committees.

40
2. Form CCC-477, Contract To Participate in the  1991 Price Support And Production Adjustment  Programs, was completed and signed by [Jerry] for  farm number 3051 on April 26, 1991. [Jerry]  initialed the form as the participating operator  and indicated he was entitled to a 100 percent  share of the crops and payments.

41
3. Form CCC 502A, Farm Operating Plan For Payment  Limitation Review for an Individual, was filed  and signed by [Jerry Dierckman] on April 26,  1991, for the 1991 crop-year. Farm number 3051  was listed by [Jerry] as a farm owned and/or  leased and operated by him for the 1991 crop  year.

42
4. Form AD-1026, Highly Erodible Land and Wetland  Certification, was completed by [Jerry] for the  1991 crop-year on January 7, 1991. [He] indicated  on the AD-1026 that he intended to produce an  agricultural commodity on land, including wet  areas that were or will be improved, maintained,  drained, modified or converted after December 23,  1985. [Jerry] also indicated on the AD-1026 that  he planned to convert land, including wet areas,  for the production of an agricultural commodity  during 1991.

43
AR, vol. 2 at 5. Jerry maintains that none of  these facts establish that he was the operator of  the wetlands. But in his filings submitted to the  USDA, he had labeled himself the "operator" of  the farm and implicitly also of the wetlands that  were part of the farm.18

44
Although Jerry characterizes himself as helpless  and punished for the whims of his father, there  were several paths he could have chosen to avoid  the ineligibility sanction. As we have noted,  Jerry should have done what he could to stop his  father's conversion activities and to negate his  acquiescence in those activities. See supra at 920-21. Also, he could have declined to seek USDA  benefits for this particular farm, thus dodging  the USDA's authority to deny him benefits on his  other farmland. And had Jerry wanted to  effectively disclaim control over the wetlands in  question, he could have requested reconstitution  of the farm, separating the wetlands and the  cropland into separate administrative  units.19 7 C.F.R. pt. 719 (1994). But instead  of negating acquiescence, foregoing benefits or  requesting reconstitution, Jerry continued to  pursue USDA benefits and continued to label  himself the "operator" of the undivided farm,  pursuing administrative appeals of the wetland  determination to the national level. And, while  it is true that Jerry repeatedly told the SCS  that he had no control over his father's actions,  he produced little or no evidence that he  actually tried to stop the conversion.20  Thus, it was not arbitrary or capricious for the  ASCS to find that Jerry was the "operator" of the  wetland when it was converted. On that basis, he  is ineligible for farm benefits under 7 C.F.R.  sec. 12.4(e).

D. Substantive Due Process

45
Jerry finally challenges the assessment of  liability on the grounds that the FSA and its  implementing regulations violate substantive due  process because they irrationally penalize the  operator even though it was the owner who did the  conversion. This is a most unpromising argument  because "[i]t is by now well established that  legislative Acts adjusting the burdens and  benefits of economic life come to the Court with  a presumption of constitutionality, and that the  burden is on one complaining of a due process  violation to establish that the legislature has  acted in an arbitrary and irrational way."  Pension Benefit Guaranty Corp. v. R.A. Gray &  Co., 467 U.S. 717, 729 (1984) (quoting Usery v.  Turner Elkhorn Mining Co., 428 U.S. 1, 15  (1976)). Jerry claims that it is irrational to  attempt to deter wetlands conversion through an  ineligibility sanction imposed on an operator.  Jerry contends that because an owner would be  undeterred by an operator's loss of benefits,  sanctioning an operator is a vain exercise. We must disagree.

46
The owner and the operator share control of the  land, and, to the extent each is penalized for  the conversion of wetlands, the purposes of  Swampbuster will be furthered. Sanctions fall on  owners and operators who could potentially  benefit from agricultural conversion of their  land, thus providing both with incentives to  prevent conversion. The legislation and  regulations have a rational basis, and they  survive Jerry's substantive due process  challenge.

IV.  Conclusion

47
In conclusion, we hold that (1) the Swampbuster  provisions of the United States Code are a proper  exercise of Congress' spending power and can  therefore reach an intrastate wetland with no  connection to interstate commerce; (2) 7 C.F.R.  sec. 12.4(e) is a reasonable interpretation of  the underlying statute and therefore valid; (3)  the ASCS properly determined that Jerry was the  operator of the wetland when it was converted;  and (4) the statute and regulations as applied in  this case satisfy the requirements of substantive  due process.

48
The decision of the district court is Affirmed.

Notes:

1
 The opinion will refer to the defendant-appellant  Jerry Dierckman as Jerry because Jerry's father,  Milton Dierckman, figures substantially into the  story. Jerry's father will be referred to as  Milton. This should prevent any confusion.

2
 In amending 16 U.S.C. sec. 3821 in 1990, Congress  renumbered the original Swampbuster provision as  sec. 3821(a). Congress has since amended sec.  3821 again. See Pub. L. No. 104-127, Title III,  Subtitle C, sec. 321 (1996). The original  Swampbuster provision in the FSA, as amended, is  still codified as sec. 3821(a). The 1990  Swampbuster provision added by FACTA is now  codified as sec. 3821(c) instead of sec. 3821(b),  as it was originally codified. All further  references to Swampbuster provisions and all  citations in this opinion will be to the 1994  editions of the United States Code and Code of  Federal Regulations, which contain the versions  of the statute and regulations in effect at all  times relevant to this appeal.

3
 The SCS has since been abolished, and its  functions have been transferred to the Natural  Resources Conversation Service. See Pub. L. No.  103-354, sec. 246 (1994) (codified at 7 U.S.C.  sec. 6962). However, because the SCS was  operating during all times relevant to this  appeal, the opinion will refer to the SCS  throughout.

4
 The ASCS has been replaced by the Farm Service  Agency. See Pub. L. No. 103-354, sec. 226 (1994)  (codified at 7 U.S.C. sec. 6932) (replacing the  ASCS with the Consolidated Farm Service Agency  (CFSA)); 60 Fed. Reg. 56,392 (Nov. 8, 1995)  (renaming the CFSA as the Farm Service Agency).  The ASCS was operative during all times relevant  to this appeal, and the opinion will refer to the  ASCS throughout.

5
 Citations to the Certified Administrative Record  will follow this format: AR, vol. [1 or 2] at  [page].

6
 Question 5 on Form AD-1026 read: "Will an  agricultural commodity be produced on any land,  including wet areas, on the farm(s) listed on AD-  1026A that was or will be improved, maintained,  drained, modified, or converted after December  23, 1985? If "YES", check the appropriate Tract  Number in column 13 of attached AD-1026A." And  Question 6 read: "Do you plan to convert any  land, including wet areas, for the production of  an agricultural commodity this year or during the  term of a requested USDA loan or other program  benefit? If "YES", check the appropriate Tract  Number in column 14 of attached AD-1026A." Jerry  Dierckman answered "YES" to each of these  questions. AR, vol. 1 at 199.

7
 He indicated this by answering "NO" to questions  regarding conversion of wet areas on a new Form  AD-1026 dated April 26, 1991. The format of the  AD-1026 had changed, but the substance of the  questions remained the same. AR, vol. 1 at 187.

8
 The agent's notes continue: "I checked with the  Jennings County ASCS when I returned[, and] they  said that the farm could be [reconstituted] by an  operator to only show him as operator of the  cropland and the owner could be shown as the  owner and operator of the wooded part." AR, vol.  1 at 92-93. However, rather than pursuing  reconstitution, Jerry had continued to list  himself as the "operator" of the farm and filed  another Form AD-1026 with the ASCS, this time for  the 1992 crop year. On that form, dated March 2,  1993, Jerry indicated that he had converted or he  would convert wetland to make it farmable. AR,  vol. 2 at 140.

9
 Jerry also relies on a Memorandum of Agreement  between the USDA and agencies in charge of  administration of the CWA. The agreement shows,  at best, that the agencies agreed to use  consistent definitions for "wetland" and  "converted wetland." This agreement in no way  would make the FSA and the USDA subject to the  jurisdictional and constitutional limitations of  the CWA and the agencies responsible for its  implementation.

10
 Jerry's argument, so stated, has both a legal and  a factual predicate. He claims as a fact that he  had nothing to do with the conversion, and then  states that to hold him liable, given his  innocence, is legally beyond the scope of the  FSA. We first address the legal aspect of his  argument because, if the regulation is invalid,  the agency's findings of fact are irrelevant, and  Jerry wins. However, if the regulation employs a  valid method for determining ineligibility, then  we must decide if the agency followed the  regulation faithfully in finding Jerry  ineligible. If it did, he loses.

11
 This section stated, in part:
[T]he Secretary shall issue such regulations as  the Secretary determines are necessary to carry  out this chapter, including regulations that
. . .
(2) govern the determination of persons who shall  be ineligible for program benefits . . . , so as  to ensure a fair and reasonable determination of  ineligibility. . . .
16 U.S.C. sec. 3844 (1994) (since omitted in  general revision to statute by Pub. L. No. 104-  127, Title III, Subtitle E, sec. 341 (1996)).

12
 The first step of Chevron focuses on the text of  the statute, leaving legislative history for the  second step. See Bankers Life & Casualty Co. v.  United States, 142 F.3d 973, 983 (7th Cir. 1998)  ("While this circuit has examined legislative  history during the first step of Chevron, we now  seem to lean toward reserving consideration of  legislative history and other appropriate factors  until the second Chevron step.") (citations  omitted).

13
 At the time relevant to this action, the statute  stated, in full:
Except as provided in section 3822 of this title  and notwithstanding any other provision of law,  any person who in any crop year subsequent to  November 28, 1990, converts a wetland by  draining, dredging, filling, leveling, or any  other means for the purpose, or to have the  effect, of making the production of an  agricultural commodity possible on such converted  wetland shall be ineligible for those payments,  loans, or programs specified in subsections  (a)(1) through (3) of this section for that crop  year and all subsequent crop years.
16 U.S.C. sec. 3821(b) (1994).

14
 Section 12.4(a) echoes the language found in sec.  3821(b) of the statute, stating that "a person  shall be ineligible for all USDA program  benefits" if "[a]fter November 28, 1990, the  person converts a wetland. . . ." 7 C.F.R. sec.  12.4(a)(2).

15
 Jerry apparently does not challenge the SCS's  determination in this appeal. Thus, it is beyond  doubt that there were converted wetlands that  violated Swampbuster on the farm.

16
 We address the agency's application of the  regulation and factual findings in the next  section of the opinion.

17
 Although not cited by either of the parties, the  USDA regulations explicitly suggest that  acquiescence is grounds for ineligibility:
All or any part of the [USDA benefits] may be  withheld or required to be refunded if the person  adopts or participates in adopting any scheme or  device designed to evade, or which has the effect  of evading, the provisions of this part. Such  acts shall include . . . acquiescence in,  approval of or assistance to acts which have the  effect of, or the purpose of, circumventing these  regulations.
7 C.F.R. sec. 12.10.

18
 The administrative record also contains evidence,  beyond forms he filled out, that support the  conclusion that Jerry was the "operator" of the  wetlands. When DASCO determined that Jerry should  be ineligible for benefits, it did so stating:
[T]here is evidence that Jerry Dierckman was in  general control of the operation on the wetland  area in question as follows:    Jerry Dierckman was actively involved in appeals  to SCS regarding the wetland determinations on  the area prior to the violation.
A job work order was billed to Jerry Dierckman  on September 25, 1990, for clearing stumps on the  wetland area, which indicates that Jerry  Dierckman did have general control over the  activities on the converted wetland. The bill  also shows Jerry in the "Work Ordered By" item.
AR, vol. 2 at 21.

19
 This was actually done during the administrative  appeal process, but Jerry does not argue that it  has any bearing on the outcome of this appeal.

20
 We also note that Jerry produced no evidence that  his father has thwarted any attempts to restore  the converted wetlands. Apparently, Jerry has  made no such attempt even though he could regain  some benefits by restoring the land. See 7 C.F.R.  sec. 12.5(b)(7). Again, this suggests  acquiescence in the conversion.