Steve Bass v. Tom Vilsack

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 7:11-cv-00239-H. Copies to all parties and the district court/agency. [999502634]. [14-1017]

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 1 of 14

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1017

STEVE BASS; TERRY H. BASS,
Plaintiffs – Appellants,
v.
TOM
VILSACK,
Agriculture,

Secretary

United

States

Department

of

Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington.
Malcolm J. Howard,
Senior District Judge. (7:11-cv-00239-H)

Argued:

October 30, 2014

Decided:

December 31, 2014

Before SHEDD, AGEE, and WYNN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Thomas A. Lawler, LAWLER & SWANSON, Parkersburg, Iowa,
for Appellants.
Matthew Fesak, OFFICE OF THE UNITED STATES
ATTORNEY, Raleigh, North Carolina, for Appellee.
ON BRIEF:
Thomas G. Walker, United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Raleigh, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 2 of 14

PER CURIAM:
The “Swampbuster” provision of the Food Security Act, 16
U.S.C. § 3821, prohibits persons who participate in programs
administered
(“USDA”

or

by

the

“the

United

States

agency”)

Department

from

of

converting

agricultural use without authorization.

Agriculture
wetlands

to

Appellants Steve and

Terry Bass (collectively “the Basses”) seek judicial review of a
final decision of the USDA finding them in violation of this
provision.

Because we agree with the district court that the

agency conformed with controlling statutes and did not commit a
clear error of judgment in its decision, we affirm.

I.
This case centers around a piece of farmland in Sampson
County, North Carolina, referred to as Farm 3188, Tract 8355,
Field UN2 (“Field UN2”).

Joe Bass, the original owner of this

tract, filed an application in 1994 with the USDA seeking a
wetland determination in anticipation of clearing Field UN2 for
agricultural
Conservation
responsible

crop

production.

Service
for

making

(“NRCS”),
wetland

The
the

National

division

determinations,

2

of

Resources
the

concluded

USDA
that

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 3 of 14

Field UN2 contained approximately 38 acres of wetlands. 1

Joe

Bass was properly notified of this determination and informed
that

clearing,

possible

the

ineligible

draining,

planting

for

most

of

USDA

or
a

altering

these

commodity

farm

crop

programs.

areas

would
Joe

to

make

render

Bass

took

him
no

further administrative action regarding the NRCS determination,
which thus became final.
In 2004, Joe Bass again filed an application seeking to
convert Field UN2 to farmland, falsely representing that he had
not “previously received a wetland determination or delineation
on this tract from [NRCS.]”
the

1994

wetland

(J.A. 103.)

determination,

an

Apparently unaware of

NRCS

wetland

specialist

completed an on-site inspection of Field UN2, which resulted in
another

NRCS

concluding

wetland

that

the

determination,
tract

contained

issued
at

March

least

23,

28

2005,

acres

of

wetlands.
NRCS informed Joe Bass that this determination would become
final unless he requested further review or mediation within
thirty

days.

However,

the

NRCS

letter

did

not

include,

as

required by USDA regulations, a notice that he could also appeal
to the USDA’s National Appeals Division (“NAD”).
1

This defect

NRCS was then known as the Soil Conservation Service.
ease of reference, we refer to this division and
predecessors as NRCS.

3

For
its

Appeal: 14-1017

Doc: 23

rendered

Filed: 12/31/2014

the

2005

Pg: 4 of 14

determination

procedurally

deficient.

Nonetheless, Joe Bass did not pursue an appeal and he later
died.

His interest in Field UN2 passed to the Basses.

NRCS was required and did notify the U.S. Army Corps of
Engineers (“USACE”) of its 2005 wetlands determination, which
prompted the USACE to issue a letter to the Basses advising that
it might also have jurisdiction over Field UN2 under the Clean
Water Act.
inspected.

The USACE letter recommended having the property
The Basses then hired a private consultant, the Land

Management Group, Inc. (“LMG”), to provide wetland mapping for
the tract.

LMG prepared a report finding no wetlands on Field

UN2, but its evaluation did not meet any of NRCS’s requirements
for determining the presence of wetlands under the Food Security
Act.
In response to the LMG report, the USACE conducted a site
visit and found waters of the United States over which it had
jurisdiction
USACE

then

along

the

notified

southern

the

Basses

boundary
that

of

this

Field

UN2.

determination

The
only

“applies to Section 404 of the Clean Water Act,” and that it
“may or may not be valid for identifying wetlands or waters
subject to the rules of the Food Security Act.”

(J.A. 434.)

Without contacting or seeking any information from NRCS,
the Basses drastically altered Field UN2 by removing the natural
forest

and

woody

vegetation

through
4

logging,

stump

removal,

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 5 of 14

drainage, and disking to prepare the tract for agricultural use.
The

Basses

sought

a

cropland

acreage

determination

from

the

USDA, which triggered an investigation by NRCS to determine if
the Food Security Act was violated by the alteration of the
tract.
NRCS conducted an on-site inspection and determined that
Field UN2 contained wetland hydrology prior to its alteration.
As part of its investigation, NRCS also examined whether the
Basses could qualify for a minimal effects exemption under 16
U.S.C. § 3822(f), which permits alteration of a wetland if the
changes

have

hydrological

only
and

area[.]”

that

“minimal

biological

Id.

determined

a

The
the

value

exemption
effects

effect

of

of

on
the

the

functional

wetlands

did

not

apply

the

wetland

in

the

because

NRCS

conversion

were

determine

the

greater than minimal.
NRCS

then

worked

with

the

Basses

to

feasibility of mitigating the converted wetlands on Field UN2,
but

those

efforts

proved

unsuccessful.

Consequently,

NRCS

issued a final technical determination in June 2010 finding that
Field UN2 contained at least 13.5 acres of converted wetlands.
The

Basses

were

then

declared

ineligible

for

programs

or

benefits administered by the USDA.
The Basses timely filed an administrative appeal with the
NAD, which held a lengthy evidentiary hearing.
5

In a written

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 6 of 14

decision, the NAD affirmed NRCS’s final determination that Field
UN2 contained converted wetlands in violation of 16 U.S.C. §
3821.

The hearing officer found that NRCS had met its burden of

proving that wetlands were present on Field UN2 prior to its
alteration,
converted
NRCS’s

and

it

now

contained

at

wetlands.

In

addition,

the

evidence

and

testimony

least

13.5

hearing

more

acres

officer

credible,

of

found

specifically

observing that the Basses’ private consultant did not complete
its wetland survey in compliance with the applicable guidelines.
Pertinent
wetlands

here,

existed

activities.

on

the

Basses

Field

UN2

attempted
prior

to

to

argue

their

that

no

conversion

The hearing officer found this issue barred under 7

C.F.R. § 12.30(c)(4), which provides that once a final wetland
determination has been made any appeal regarding a potential
conversion is “limited to the determination that the wetland was
converted[.]”

Id.

Noting the absence of any evidence that NRCS

had

its

1994

rescinded

determination

or

that

the

property’s

prior owner had appealed that determination, the hearing officer
precluded the Basses from presenting evidence that the property
did not contain wetlands.
The Basses then filed this lawsuit seeking judicial review
of

the

USDA’s

final

action.

Their

complaint

raised

several

claims, but only two are now at issue on appeal: (1) did the NAD
hearing officer err by limiting their appeal in the manner noted
6

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 7 of 14

above; and (2) did NRCS incorrectly perform a minimal effects
determination in compliance with 16 U.S.C. § 3822(f)?
The district court granted the USDA’s motion for summary
judgment, finding no error in the hearing officer’s decision to
preclude the Basses from re-litigating the question of whether
wetlands ever existed on Field UN2.

Specifically, the court

held:
[T]here
was
at
least
one
valid
prior
certified wetland determination in existence
at the time of the plaintiffs’ conversion of
Field UN2.
In such circumstances, the
review of the agency’s 2010 determination
that conversion occurred is properly limited
to that question of conversion on appeal
before the agency, and thus to this court as
well. . . .
. . . .
. . . The agency reasonably interpreted its
own regulations by limiting the scope of
review to whether a conversion took place,
thus the court must defer to the agency.
(J.A.

62-64.)

The

district

court

also

held

that

it

lacked

jurisdiction over the minimal effects claim because the Basses
never pursued this argument during the administrative process
and thus “failed to exhaust their administrative remedies[.]”
(J.A. 64.)
The Basses timely appealed, and this Court has jurisdiction
pursuant to 28 U.S.C. § 1291.

7

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 8 of 14

II.
We review the district court’s ruling on summary judgment
de novo.

See Holly Hill Farm Corp. v. United States, 447 F.3d

258,

(4th

262

Cir.

2006).

However,

this

Court,

like

the

district court, reviews the underlying decision from the USDA
pursuant

to

the

Administrative

Procedures

Act

(“APA”),

under

which the agency’s decision must be upheld unless “arbitrary,
capricious,

an

abuse

of

accordance with law[.]”
Hill

Farm

Corp.,

447

discretion,

or

otherwise

standard,

we

F.3d

at

262-63

are

“not

(applying

empowered

judgment for that of the agency.”
U.S.

Dep’t

of

Agric.,

976

F.2d

to

APA

is

“to

determine

judicial

Following this
substitute

[our]

Md. Dep’t of Human Res. v.
1462,

1475

(4th

(citation and internal quotation marks omitted).
task

in

5 U.S.C. § 706(2)(A); see also Holly

review to a final determination of the NAD).
narrow

not

whether

the

agency

Cir.

1992)

Rather, our

conformed

with

controlling statutes,” and “whether the agency has committed a
clear error of judgment.”

Id. (citations and internal quotation

marks omitted).

A.
The NAD hearing officer limited the Basses’ appeal pursuant
to

7

C.F.R.

wetlands

§

12.30(c)(4),

determination

which

exists
8

provides
for

that

purportedly

if

a

prior

converted

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 9 of 14

property, any administrative appeal is limited to the issue of
whether wetlands were converted.

After remarking that the 2005

wetland determination was deficient, the hearing officer found
that the 1994 determination was a final, certified decision for
purposes of this regulation.
The Basses argue that the NAD hearing officer contravened
16 U.S.C. § 3822(a)(4) in reaching that conclusion, citing the
statutory

language

that

provides

“[a]

final

[wetland]

certification . . . shall remain valid and in effect . . . until
such time as the person affected by the certification requests
review of the certification by the Secretary.”
3822(a)(4).
the

1994

16 U.S.C. §

Relying on this provision, the Basses contend that

wetland

determination

was

made

void

requested a new wetland determination in 2004.

when

Joe

Bass

They conclude

that, because the 1994 determination was invalid at the time of
their appeal, “7 C.F.R. § 12.30(c)(4)’s limitation [could] not
apply [and] [t]he hearing officer’s ruling to the contrary is an
error of law.”

(Opening Br. 21.)

We find this argument to lack merit.
3822(a)(4)

ends

the

validity

of

By its plain terms, §
an

existing

wetland

determination only when an aggrieved landowner “requests review”
of that decision.

We agree with the USDA’s position (regardless

of the deference applied) that Joe Bass’s actions in 2004 were

9

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 10 of 14

not a request for review, making this provision inapplicable. 2
Accordingly, the NAD hearing officer did not act contrary to law
in concluding that the 1994 determination was a valid wetland
decision that limited the Basses’ appeal.
Furthermore, even assuming the hearing officer erred in the
manner

alleged,

the

result

in

this

case

would

be

unaffected

because the evidence was overwhelming that Field UN2 contained
wetlands prior to its conversion.

Any error on the part of the

USDA was therefore harmless, and the Basses’ argument fails.
See Ngarurih v. Ashcroft, 371 F.3d 182, 190 n.8 (4th Cir. 2004)
(noting

that

the

harmless-error

doctrine

is

available

in

judicial review of administrative actions).

2

Citing to SEC v. Chenery, 332 U.S. 194 (1947), the Basses
contend that this argument is unavailable because it was not
relied upon by the NAD hearing officer in the administrative
decision below.
While generally a reviewing court may only
judge the propriety of an agency decision on the grounds invoked
by the agency, see id. at 196-97, the court is not so bound
when, as here, the issue in dispute is the interpretation of a
federal statute.
See N.C. Comm’n of Indian Affairs v. U.S.
Dep’t of Labor, 725 F.2d 238, 240 (4th Cir. 1984) (“We do not .
. . perceive there to be a Chenery problem in the instant case
because the question of interpretation of a federal statute is
not ‘a determination or judgment which an administrative agency
alone is authorized to make.’” (citation omitted)).

10

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 11 of 14

B.
The Basses next claim that NRCS did not correctly perform a
minimal effects determination under 16 U.S.C. § 3822(f).

The

district court determined it lacked jurisdiction to adjudicate
this

claim

because

administrative

the

Basses

appeal.

While

never
we

raised

agree

it

that

during

the

their

Basses

are

foreclosed from pursuing this claim on appeal, we reach that
result on a different basis than the district court.
The Supreme Court has long held that it is inappropriate
for

courts

to

administrative
function.

consider
agency

See

arguments

because

Woodford

v.

not

doing

Ngo,

developed

so

548

usurps

U.S.

81,

before

the

an

agency’s

88-91

(2006);

United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 36–
37 (1952); see also Pleasant Valley Hosp., Inc. v. Shalala, 32
F.3d

67,

70

(4th

Cir.

1994)

(“As

a

general

matter,

it

is

inappropriate for courts reviewing appeals of agency decisions
to

consider

arguments

agency involved.”).

not

raised

before

the

administrative

As explained by the Supreme Court,

orderly procedure and good administration
require that objections to the proceedings
of an administrative agency be made while it
has opportunity for correction in order to
raise issues reviewable by the courts. . . .
[C]ourts
should
not
topple
over
administrative
decisions
unless
the
administrative body not only has erred but
has erred against objection made at the time
appropriate under its practice.

11

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 12 of 14

L.A. Tucker Truck Lines, Inc., 344 U.S. at 37.
In Sims v. Apfel, 530 U.S. 103 (2000), the Supreme Court
further explained that the need for issue exhaustion is, first
and

foremost,

a

question

of

statutory

construction

and

that

agencies generally have the power to adopt regulations requiring
issue exhaustion.

Id. at 107–08.

Where the relevant statutes

and regulations do not clearly require exhaustion, however, a
court-imposed issue exhaustion requirement may be appropriate.
Id.

at

108.

“[T]he

desirability

of

a

court

imposing

a

requirement of issue exhaustion depends on the degree to which
the

analogy

to

normal

adversarial

litigation

particular administrative proceeding.”

applies

Id. at 109.

in

a

Where the

parties are expected to fully develop the dispute during the
course of an adversarial proceeding, the rationale for requiring
issue exhaustion is at its strongest.
where

an

administrative

proceeding

Id. at 110.
is

not

Conversely,

adversarial,

reasons for requiring issue exhaustion are much weaker.
There

is

no

statute

exhaustion in this case.

or

regulation

that

the

Id.

mandates

issue

See Mahon v. U.S. Dep’t of Agric., 485

F.3d 1247, 1256 (11th Cir. 2007) (“[T]here is no express issue
exhaustion requirement in the NAD regulations[.]”).

However,

the regulations that describe the review process before the USDA
reflect

that

exhaustion

this

should

process
be

is

required.
12

adversarial
Id.

(“The

and
NAD’s

that

issue

procedures

Appeal: 14-1017

Doc: 23

Filed: 12/31/2014

Pg: 13 of 14

provide an adversarial system in which parties are given a full
and

fair

opportunity

evidence,

and,

arguments

and

as

to

a

make

their

corollary,

evidence

to

presented

arguments

attempt

by

the

to

and

present

challenge

agency.”);

see

the
also

Downer v. U.S. Dep’t of Agric., 97 F.3d 999, 1005 (8th Cir.
1996)

(noting

that

a

general

exhaustion

of

remedies

is

insufficient in the context of a wetlands determination, and
specific issue exhaustion is required).

Indeed, every court to

address this question has found that issue exhaustion applies to
similar proceedings before the USDA.
Johanns,

495

F.3d

866,

868-71

(8th

See, e.g., Ballanger v.
Cir.

2007);

Care

Net

Pregnancy Ctr. of Windham Cnty. v. U.S. Dep’t of Agric., 896 F.
Supp. 2d 98, 110 (D.D.C. 2012).

Finding these cases persuasive,

we agree that an issue exhaustion requirement applies.
The

Basses

had

ample

opportunity

to

raise

the

minimal

effects claim at each phase of the administrative proceeding and
before the NAD, yet they failed to do so.

Instead, the Basses

focused their administrative appeal on arguing that Field UN2
did not contain wetlands prior to its conversion.
of

action

discretion
claim.

denied
and

the

USDA

expertise

in

an

opportunity

considering

any

to

This course
exercise

minimal

On these facts, preclusion is appropriate.

its

effects

See Mahon,

485 F.3d at 1256-57 (precluding claims raised for the first time

13

Appeal: 14-1017

in

Doc: 23

federal

Filed: 12/31/2014

court

and

never

Pg: 14 of 14

presented

to

the

NAD

during

the

plaintiffs’ administrative appeal).
Although

the

district

court

incorrectly

viewed

the

foregoing as a jurisdictional bar, see Pleasant Valley Hosp.,
Inc.,

32

F.3d

jurisdictional
ultimately
claim.

at

70

bar,

correct

(“[T]his
it

in

Accordingly,

is

its
we

general

a

prudential

decision
find

rule

the

to

is

one[.]”),

forego

district

not

review
court’s

a

strict
it

was

of

this

decision

without reversible error. 3

III.
For the foregoing reasons, the judgment of the district
court is
AFFIRMED.

3

Apparently forecasting this hurdle, the Basses argue that
plain error would result if we decline to consider this claim.
Under this doctrine, as applied in our civil jurisprudence, we
will correct an error not raised previously if it is “‘plain’
and our refusal to consider it would result in a miscarriage of
justice.”
Nat’l Wildlife Fed’n v. Hanson, 859 F.2d 313, 318
(4th Cir. 1988) (citation omitted).
Plain error analysis, in
the noncriminal context, is very rarely available, and then only
to correct particularly egregious errors. See In re Under Seal,
749 F.3d 276, 285-86 (4th Cir. 2014). It is not at all evident
that NASD erred in its minimal effects determination in the
manner alleged.
Moreover, this type of error does not
constitute a “miscarriage of justice” as defined in our case
law. See Holly Hill Farm Corp., 447 F.3d at 268; see also In re
Celotex Corp., 124 F.3d 619, 631 (4th Cir. 1997). We therefore
find this doctrine inapplicable.

14