Creekside Valley Farms v. Dept. of Agriculture

No. 461 July 3, 2024 569

IN THE COURT OF APPEALS OF THE

STATE OF OREGON

CREEKSIDE VALLEY FARMS, LLC,

and Paul H. KUEHENE,

Petitioners,

v.

DEPARTMENT OF AGRICULTURE,

Respondent.

Oregon Department of Agriculture

190723; A177927

Argued October 25, 2023.

Richard P. Brown argued the cause for petitioners. Also

on the briefs were John T. Bridges and Brown, Tarlow,

Bridges, & Palmer, PC.

Robert Koch, Assistant Attorney General, argued

the cause for respondent. Also on the brief were Ellen F.

Rosenblum, Attorney General, and Benjamin Gutman,

Solicitor General.

Before Shorr, Presiding Judge, Mooney, Judge, and

Pagán, Judge.

MOONEY, J.

Reversed and remanded.

Pagán, J., dissenting.

570 Creekside Valley Farms v. Dept. of Agriculture

MOONEY, J.

Petitioners seek review of a final order of the Oregon

Department of Agriculture (the department) imposing civil

penalties for multiple violations of ORS 634.372(4), which

provides, in part, that “[a] person may not: * * * [p]erform

pesticide application activities in a faulty, careless or neg-

ligent manner.” They raise eight assignments of error, all

of which essentially challenge the department’s conclusion

that each petitioner committed eight separate pesticide vio-

lations. We conclude that the department’s interpretation

of its rule defining what constitutes a violation is plausible.

We conclude, however, that substantial evidence and reason

do not support the department’s conclusion that petitioners

made eight separate decisions to apply pesticide to eight

separately managed radish fields, resulting in eight sepa-

rate acts constituting eight statutory violations. We there-

fore reverse and remand.

FACTS AND PROCEDURAL HISTORY

The relevant facts are undisputed. Petitioners are

Creekside Valley Farms, LLC (an agricultural operation

and leaseholder of the subject property) and Paul Kuehne,

Creekside’s sole member and registered agent. Kuehne is

licensed by the department as a Private Pesticide Applicator,

and Creekside is licensed as a Commercial Pesticide

Operator. The agricultural property at the heart of this

matter consists of 461 acres which, in 2019, were dedicated

to the cultivation of radish crops for purposes other than

human consumption. Petitioners do not dispute that the pes-

ticide, Witness Herbicide, was applied to the radish crops

on May 9, 2019, and again on May 27, 2019, at Kuehne’s

direction. They agree that those applications violated ORS

634.372(4).

The department investigated the use of Witness

Herbicide on the farm after receiving a formal complaint.

It obtained and executed an administrative search war-

rant that authorized the department to take field samples

in connection with its investigation. In anticipation of the

sampling, the lead investigator, Odenthal, reviewed arial

maps of the property that he obtained from Google Earth.

Cite as 333 Or App 569 (2024) 571

He identified and marked the perimeter of the farm on one

such map with a blue line, and he used yellow lines to iden-

tify what he characterized as eight separate fields within

that perimeter. The map that he completed, shown below,

identified the fields as:

NW Corner 28 acre

Circle 1 100 acres

N Center 18 acres

Circle 2 170 acres

SE   32 acres

NE 7 acres

East 23 acres

Circle 3 83 acres

Following an administrative contested case hearing, an

ALJ issued two proposed orders,1 concluding that, by

1

One order pertained to Creekside and the other to Kuehne. The orders con-

tain minor variations in referring to Creekside (through its employees) applying

the herbicide versus Kuehne ordering and supervising the application, and some

details specific to Kuehne’s knowledge as a private pesticide applicator. The orders

are identical in all ways relating to the issues presented in this petition for review.

572 Creekside Valley Farms v. Dept. of Agriculture

applying Witness Herbicide to the radish fields, Creekside

and Kuehne had each committed eight violations of ORS

634.372(4). The proposed orders noted that “because the

eight separate radish fields were managed separately, each

act of applying Witness pesticide to each separate field is

considered a separate act and therefore a separate violation

under OAR 603-057-0500(11).” Petitioners were assessed a

$10,000 fine for each violation, resulting in an $80,000 fine

each for Creekside and Kuehne. Petitioners filed exceptions,

and the Director of the department issued final orders that

deleted text from the proposed orders relating to the defini-

tion of a “field,” but otherwise adopted the proposed orders.

This petition for judicial review followed.

STANDARD OF REVIEW

We review the department’s order in this contested

case for substantial evidence, abuse of discretion, and errors

of law. ORS 183.482(8). Our decision turns on the require-

ment of substantial evidence, focusing in particular on

that requirement’s component of substantial reason. As the

Supreme Court recently explained:

“Implicit in the requirement that orders be supported by

substantial evidence is an additional requirement that

they be supported by substantial reason. An order is sup-

ported by substantial reason when it articulates a rational

connection between the facts and the legal conclusions it

draws from them. Among other purposes, the substantial-

reason requirement ensures meaningful judicial review.”

SAIF v. Coria, 371 Or 1, 12, 528 P3d 785 (2023) (internal

quotation marks and citations omitted). Meaningful review

requires us to do more than simply verify that the department

gave an explanation for its conclusions. Meaningful review

requires us to read the content of the explanation to ensure

that it supplies the required “rational connection between the

facts and the legal conclusions it draws from them.” Id.

ANALYSIS

In evaluating whether the department lawfully

assessed eight pesticide violations against each petitioner,

we begin with the department’s interpretation of what

constitutes a violation. OAR 603-057-0500(11) defines

Cite as 333 Or App 569 (2024) 573

“violation” as “an act or omission” that “does not comply

with a provision of ORS chapter 634 that relates to pesti-

cide application, sale, or labeling[.]” In the final orders, the

department noted that “the key to determining how many

violations occurred is determining how many distinct acts

or omissions occurred.” In summarizing the way the depart-

ment makes that determination, the final order stated:

“Department staff testified that, when a pesticide is applied

unlawfully to fields that are in commercial agricultural

production, the Department treats each unlawful pesticide

application to a distinguishable field as a separate viola-

tion. Department staff further testified that, in attempt-

ing to determine how many separate fields exist at a given

site, the Department evaluates any physical barriers that

separate the fields, and whether the fields are managed

separately or as a single unit. If a person is making sepa-

rate decisions about how to grow crops in different areas,

then the person is committing a separate ‘act’—and, there-

fore, a separate violation—each time the person decides to

unlawfully apply a pesticide to a given area (in this case,

to a given field). That determination is made by examining

whether, as a factual matter, the areas in question have

any physical divisions, and whether they are managed sep-

arately or as a single unit.”

We defer to an agency’s plausible interpretation of

its own rule, including an interpretation made in the course

of applying the rule, if that interpretation is not inconsistent

with the wording of the rule, its context, or any other source

of law. Papas v. OLCC, 213 Or App 369, 377, 161 P3d 948

(2007). “Act or omission” is not defined in ORS chapter 634

or the relevant administrative rules. The dictionary defines

an “act” as “a thing done or being done.” Webster’s Third New

Int’l Dictionary 20 (unabridged ed 2002). The department’s

interpretation of “act” as including each decision to apply

pesticides to separate fields is a plausible interpretation of

the term and is consistent with the State Pesticide Control

Act’s purpose of regulating the application and use of pesti-

cides in the public interest. ORS 634.005.

In assessing the number of fields involved, the depart-

ment’s policy is to consider (1) physical characteristics of the

property such as roads, fences and other barriers, irrigation

574 Creekside Valley Farms v. Dept. of Agriculture

systems, and crop heights, and (2) whether the property is

managed as separate fields or as a unified piece of property.

It is certainly plausible to think that different physical char-

acteristics of the property might make it necessary to make

different decisions about whether and how to apply pesticide

to different parts of the property because of those character-

istics. The second inquiry of the department’s policy—con-

sidering how the property is actually managed—provides

additional information that, in conjunction with information

about the physical characteristics of the property, provides

a plausible way of determining how many decisions were

made that resulted in separate acts, each of which violated

ORS 634.372(4). We conclude that the department reasonably

interpreted its rule and that its interpretation merits our

deference.

We turn to the department’s application of its rule

in this case to conclude that petitioners separately managed

the acreage as eight separate agricultural fields and that

they made eight separate decisions that resulted in eight

separate pesticide applications in violation of the law. As

noted above, we review findings of fact for substantial evi-

dence and the application of the law to the facts for substan-

tial reason. “Substantial evidence supports a finding when

the record, viewed as a whole, permits a reasonable person

to make the finding.” Gage v. Fred Meyer Stores - Kroger Co.,

329 Or App 360, 362, 540 P3d 592 (2023), adh’d to on recons,

330 Or App 669, ___ P3d ___ (2024).

The final order noted a number of factors that were

considered in determining that the farm was comprised of

eight separately managed fields, including: manmade and

natural barriers, including farm roads, a line of trees, and a

slough with water; crop growth height; and the use of center

pivot versus big gun irrigation systems. The findings of fact

with respect to the presence of those features are supported

by substantial evidence, particularly the photographs and

the testimony of department investigators about their

observations of the property. The department specifically

relied on the following observations made by Odenthal in

concluding that the acreage was divided into and separately

managed as eight radish fields:

Cite as 333 Or App 569 (2024) 575

“Circle l and NW Corner fields - The Circle 1 field was

separated from the NW Corner field by a road and field

growth around the edge. The Circle 1 field was irrigated

with a center pivot irrigation system. The NW Corner field

was irrigated with a big gun irrigation system.

“NW Corner and N Center fields - The NW Corner field

was separated from the N Center field by trees and a slough

with water in it.

“Circle 2, NE, and N Center fields - The Circle 2 field

was irrigated with a center pivot irrigation system. The

NE and N Center fields were triangular shaped. The NE

and N Center fields were irrigated with a big gun irrigation

system. The Circle 2 field was separated from the NE and

N Center fields by the edge of the circle pattern where the

center pivot irrigation ended.

“The SE and Circle 2 fields - The SE field was separated

from the Circle 2 field by a road and trees. The Circle 2 field

was irrigated with a center pivot irrigation system. The SE

field was irrigated with a big gun irrigation system.

“The Circle 3 and East fields - The Circle 3 field was

irrigated with a center pivot irrigation system. The East

field was irrigated with a big gun irrigation system. The

crop growth in Circle 3 was higher than the crop growth

in the East field. The Circle 3 field was separated from the

East field by the edge of the circle pattern where the center

pivot irrigation ended.”

(Footnotes omitted). We cannot say that the department’s

description of the physical characteristics of the property and

irrigation systems is not supported by substantial evidence in

the record. And for our purposes here, we assume the descrip-

tions to be true, as far as they go. But we reject the notion

that each constellation of characteristics described above

and attributed to certain areas within the acreage supports

the department’s conclusion that those areas are separately

managed and that, therefore, the decision to apply pesticide

to each area was separately made and executed.

The problem with the department’s analysis is two-

fold. First, the physical characteristics and layout of the

acreage does not provide evidence of the decision or deci-

sions that petitioners made about applying pesticide to the

crops in May 2019. The argument that the layout of the farm

576 Creekside Valley Farms v. Dept. of Agriculture

requires it to be managed as eight separate fields and that,

therefore, eight decisions and eight pesticide applications

were necessarily made in May 2019 assumes too much. The

department did not explain how the presence of multiple

watering systems, providing water to a contiguous, irregu-

larly shaped farm, led it to conclude that areas within the

farm were separately managed. The final order identified

no evidence that the different types of irrigation equipment

were independently used to achieve separate goals or that

separate decisions were made about when or how much to

irrigate different sections of the acreage. The evidence cer-

tainly supports an inference that petitioners use different

types of irrigation equipment to deliver water to the acre-

age, but that does not lead to a nonspeculative conclusion

about how petitioners decided to, or did, apply pesticide in

May 2019. This is particularly notable with respect to the

distinction between Circle 2 and the NE and N fields where

the use of different irrigation systems was the only factor

identified by the department as separating them. Indeed,

soil and plant samples from those three areas were combined

together in the testing process, returning one result for what

the department characterized as three separate fields.

Without engaging in the additional inquiry about

what decisions were actually made and how the property

was managed, the department assumed the thing that

required proof by substantial evidence—that eight decisions

were made, resulting in eight acts of applying the prohibited

pesticide and, thus, eight statutory violations. And the fact

that the ALJ did not believe Kuehne’s testimony that the

acreage was managed as a single unit does not supply evi-

dence that there were eight decisions to apply pesticide to

eight separate sections of the farm.

The second problem with the department’s analysis

is that, even if physical characteristics alone were sufficient

evidence of the human decisions to apply pesticide, when the

record is considered as a whole, the department’s application

of its rule and policy to the farmland in question was inher-

ently inconsistent and failed to otherwise rationally support

its conclusion that there were eight separate statutory vio-

lations. There are inconsistencies in the department’s use of

Cite as 333 Or App 569 (2024) 577

topography in different ways at different points across the

acreage with no explanation for why it did so. For example,

the department used a row of trees to justify treating the NW

field as separate from the N Center field, and yet it did not

use the very same line of trees that extended into and across

Circle 2 to divide that circle into separate fields.2 Similarly,

the presence of farming roads in some locations was used to

support the conclusion that fields were separate, but other

roads through other areas were not mentioned at all. This dis-

parate treatment renders the decision to find eight violations

unsupported by substantial reason.

The most that can be said is that certain physi-

cal characteristics of the acreage and irrigation equipment

appeared to the investigator to reflect eight areas or fields.

But attributing different significance to the same line of trees

and slough without explanation for that disparate treatment

does no more to explain the department’s conclusion that

petitioners made eight separate decisions to apply pesticide

than the fact that they use different irrigation equipment to

deliver water to the various reaches of the acreage.

The defining characteristics that the department

identified in finding eight separate areas do not support a

finding of eight acts or omissions. The department did not

supply a rational connection between the facts on which it

relied and its legal conclusion that there were eight separate

violations. We therefore reverse and remand.3

Reversed and remanded.

PAGÁN, J., dissenting.

Petitioners admitted to intentionally using illegal

pesticide on over 400 acres of farmland. Having no defense to

the allegation of misuse, the only issue petitioners contested

2

The department asserts in its answering brief that the tree line through

Circle 2 was not sufficient to outweigh the irrigation evidence; however, the final

order did not rely on that rationale, and it did not acknowledge the continuation

of the slough and tree line.

3

We are not persuaded by petitioners’ assertion that the department’s

approach to tallying violations deprived petitioners of fair notice of how many vio-

lations they were exposed to, thus violating their right to due process. Petitioners

had notice of what activity was prohibited (the unlawful use of pesticides) and

had the opportunity to be heard on the issue of their violation. Sachdev v. Oregon

Medical Board, 312 Or App 392, 402, 494 P3d 1018, rev den, 368 Or 637 (2021).

578 Creekside Valley Farms v. Dept. of Agriculture

was how many violations occurred on that large swath of

farmland. The Department of Agriculture provided an

expert to testify on the issue. That expert visited the farm-

land, spoke with witnesses, looked at the equipment used

on all the fields, and then applied the department’s inter-

nal guidelines for discerning how many violations occurred.

That expert concluded that there were eight fields, primarily

because each one of those fields had its own irrigation man-

agement system, and the fields tended to be separated by

either man-made or natural barriers. To rebut that expert,

petitioners offered their own witnesses from the farm, who

testified simply that there was only one field, despite the

barriers and separate irrigation systems. The ALJ hearing

these witnesses decided that the expert was more credi-

ble. The department then adopted that ALJ’s findings and

explained that it used the ALJ’s credibility finding to sup-

port its decision to find eight separate violations. Thus, in my

view, the department’s decision is supported by substantial

evidence, and having explained how that evidence allowed it

to find eight violations, is supported by substantial reason.

Jenkins v. Board of Parole, 356 Or 186, 195-96, 335 P3d 828

(2014). To the extent the majority concludes either that the

department failed to provide substantial reasoning for its

conclusions, or that the case law on our standard of review

requires the department to do more than provide a rationale

for its reasoning, I dissent.

Our appellate courts are sending mixed mes-

sages when reviewing a state agency’s decision under ORS

183.482(8). On the one hand, “[o]ur review for substantial

evidence [under ORS 183.482(8)] does not entail or permit

the reviewing tribunal to reweigh or to assess the credibility

of the evidence that was presented to the factfinding body.”

WaterWatch of Oregon v. Water Resources Dept., 324 Or App

362, 384, 527 P3d 1, rev den, 371 Or 332 (2023) (citations

and internal quotation marks omitted). “In other words, to

the extent that the substantial reason requirement inheres

in an agency’s duty to make findings of fact and conclusions

of law, the substantial reason requirement concerns the

reviewability of the agency’s orders.” Jenkins, 356 Or at 195-

96 (emphasis added). Focusing on reviewability provides a

Cite as 333 Or App 569 (2024) 579

particular heft to the deference we give to the agency. Or, as

the Supreme Court stated before Jenkins:

“On judicial review, the court will not substitute its judg-

ment for that of the agency in drawing an inference, but

the court must be satisfied that agency judgment has actu-

ally been exercised. Sometimes a rational nexus between

an evidenced fact and an inference drawn from it is obvi-

ous from common experience (e.g., we may infer from the

fact of a wet street that it recently rained). In other cases,

however, and particularly in cases involving expertise, the

reasoning is not obvious (e.g., we may infer from present

meteorological conditions that it will snow tomorrow). In

such an inference, we will not assume the existence of a

rationale. Rather, we look to the order to state the rational

basis of the agency’s inference. The explanation need not be

complex, but it should be sufficient to demonstrate the exis-

tence of a rational basis and to allow for judicial review.”

City of Roseburg v. Roseburg City Firefighters, 292 Or 266,

271-72, 639 P2d 90 (1981) (footnote and citations omitted).

On the other hand, we have interpreted ORS

183.482(8) to require that the agency explain or justify what

may be considered “inherent inconsistencies.” See, e.g., SAIF

v. Coria, 371 Or 1, 14, 528 P3d 785 (2023) (remanding agency

decision because the order failed to address inconsistencies);

The Boeing Company v. Cole, 194 Or App 120, 123-24, 93 P3d

824 (2004) (explaining that “when there are inconsistencies

in an expert’s testimony, the board must provide an expla-

nation as to the basis for its reliance on that testimony”).

The two positions are plainly inconsistent. Either

we are deferential and looking only to see that the agency

explained its rationale sufficient for review, or we are

reviewing the agency’s decision for its persuasive weight.

For me, the tension is relieved by adhering to the deference,

examining whether the agency explained its reasoning, and

ensuring that the agency in fact exercised its discretion.

Here, instead, the majority would have required the

department to provide in its final order an explanation of

“inherent inconsistencies” in the expert’s testimony, such

as why a row of trees was used to separate one field but

may not have been for another. In my view, such an inquiry

580 Creekside Valley Farms v. Dept. of Agriculture

necessarily oversteps the limitations of our review and

spurns the deference we are supposed to provide agencies.

The ALJ was presented with two evidentiary presentations

on the issue of how many fields existed and was required

to make a credibility finding. Following that finding, the

department explained why the expert was more credible,

explained how the expert used internal guidelines to make

their conclusions, and why those conclusions would justify

imposing a violation for each field separately under the

appropriate regulations. That is all that is needed under

ORS 183.482(8) for us to determine that the “agency judg-

ment has actually been exercised.” Jenkins, 356 Or at 196

(quoting Roseburg, 292 Or at 271).

Finally, to the extent the majority believes that

the explanation is not sufficient under ORS 183.482(8), the

only remedy is to send it back to the department to provide

a full explanation for its reasoning. See id. at 195 (“If an

agency order that is subject to ORS 183.470(2) does not con-

tain [substantial reasoning], then the appellate court will

reverse and remand the order for the agency to correct the

deficiency.”); Coria, 371 Or at 14 (“Therefore * * * we remand

the case to the board to explain its reasoning.”).

I would conclude that the department’s decision is

supported by substantial evidence and substantial reason-

ing and would affirm.