# Fitch v. United States of America

> District Court, M.D. Alabama · May 20, 2022

URL: https://www.frixlaw.com/law-library/cases/9987801

## Case

- **Court:** District Court, M.D. Alabama
- **Decided:** May 20, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9987801

## How later opinions describe it (automated extraction)

- explaining that a party may be excused from exhausting administrative remedies if further administrative procedures would be futile
- finding that claimant had failed to exhaust with the NAD certain issues he was raising before the court

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
SOUTHERN DIVISION

AMY FITCH, )
)
Appellant, )
)
v. ) CASE NO. 1:20-cv-513-RAH
) [WO]
UNITED STATES OF )
AMERICA, et al., )
)
Appellees. )

MEMORANDUM OPINION AND ORDER
Amy Fitch appeals from the final determination of the Director of the United
States Department of Agriculture’s (USDA or the Agency) National Appeals
Division that upheld the hearing officer’s decision to retroactively deny Fitch’s
claim for benefits under the Noninsured Crop Disaster Assistance Program (NAP).
The issues have been fully briefed, and each party has moved for summary judgment.
For the reasons below, Fitch’s motion is DENIED, the USDA’s motion is
GRANTED, and the Director’s decision is affirmed.
I. BACKGROUND
Fitch Family Farms is a commercial vegetable family farm located in Houston
County, Alabama, run by Lee and Amy Fitch and their company, River Road Farms,
Inc. (RRF). Amy Fitch owns 40% of RRF and is a guarantor on a loan procured by
RRF from Servis1st Bank to fund its operations.
For the 2016 crop year, Fitch, in her individual capacity, enrolled a tomato
crop in NAP that was to be grown on land owned by RRF. By enrolling individually

and because she could qualify as a socially disadvantaged farmer, Fitch saved
money, including an administrative fee and half of the NAP premium. This financial
benefit was unavailable to RRF, which was already separately enrolled in NAP.

Ultimately, the tomato crop failed, and therefore Fitch filed a claim for
payment in July 2016 with the Farm Service Agency (FSA) of the USDA. The loss
was adjusted, and the claim was approved for payment by the local Houston County
FSA committee in September 2016. The claim was paid, and Fitch apparently re-

enrolled and received NAP payments in 2017 and 2018.
Not too long after the 2016 crop season, the Office of the Inspector General
(OIG) began investigating fraud by the Houston County FSA committee for the

claims it had approved during the 2016 crop year. The OIG found complicity by the
committee in approving fraudulent claims in 2016, which resulted in a review of
claims approved by the committee in 2016. Fitch’s 2016 claim was one of the claims
reviewed.

After reviewing Fitch’s claim, on May 9, 2019, the USDA1 reversed the
0F
Houston County FSA committee’s September 2016 claim decision, finding that

1 The USDA, Agency, and FSA are used interchangeably.
Fitch had been ineligible for the 2016 NAP payment because, among others, Fitch
had made misrepresentations (that she shared in 100% of the tomato crop as a

producer) concerning her eligibility for payment. As to Fitch’s eligibility, the USDA
concluded that Fitch was not a “producer” as defined under NAP because Fitch “did
not share in the risk of producing the crop” and was not entitled to share in the crop

available for marketing. (Doc. 28-3 at 27.) Therefore, Fitch was deemed
retroactively ineligible for the 2016 NAP payment, and as a further sanction, she
was also deemed ineligible for program payments in the two successive years of
2017 and 2018. All told, the USDA sought a refund from Fitch for all three years of

NAP payments, totaling approximately $85,000.
Fitch appealed to the National Appeals Division,2 and a hearing officer was
1F
assigned and conducted an in-person evidentiary hearing over three days in October,
November, and December 2019. On February 19, 2020, the hearing officer issued
his appeal determination. Of the numerous issues raised, the hearing officer found
in Fitch’s favor on all, except for two—that Fitch was an eligible producer and that
NAP’s Finality Rule applied. As applicable to the producer issue, the hearing officer

concluded:
…the information presented by Appellant fails to show that she was

2 The National Appeals Division is responsible for adjudicating specified administrative appeals
from adverse decisions by certain agencies within the USDA, including the Commodity Credit
Corporation, the Farm Service Agency, and the FSA state, county, and area committees, including
appeals from the “[d]enial of participation in, or receipt of benefits under, any program of an
agency[.]” See 7 U.S.C. §§ 6991-7002; 7 C.F.R. § 11.1; 7 C.F.R. § 11.3.
operating as an individual. The land that Appellant grew her tomatoes
on is owned by River Road Farms. The only input receipt in the record
is for River Road Farms. All evidence shows that River Road Farms,
not Appellant, had a risk in growing the crop and was entitled to share
in the crop had the crop been produced. While Appellant argues that it
is a normal farming operation to operate within an entity of a family
farming operation, Appellant did not sign up for NAP coverage for
River Road Farms and, in fact, River Road Farms had its own NAP
coverage in 2016. Appellant’s failure to show how her interest in the
crop was separate and distinct from River Road Farms does not justify
a separate payment to Appellant, when Appellant was clearly operating
under the pretense of River Road Farms. Appellant is not an eligible
producer who was eligible for NAP benefits and she misrepresented
that she is a producer who shares in the risk of producing the crop and
who is entitled to share in the crop had the crop been produced.

(Doc. 23-3 at 103.)
And as to the Finality Rule, the hearing officer concluded that the
“misrepresentation” exception applied because “Appellant misrepresented that she
is a producer who shares in the risk of producing the crop and who is entitled to share
in the crop had the crop been produced.” (Doc. 23-3 at 104.)
Fitch then appealed to the Director of NAD, challenging the hearing officer’s
decision and requesting equitable relief. Upon reviewing the record and the parties’
submissions, the Director concluded that the hearing officer’s decision was
“supported by substantial evidence” and that the “county committee’s decision
approving her NAP program claim was erroneous.” (Doc. 23-3 at 123–24.) And as
to the Finality Rule, the Director concluded that the rule, because of Fitch’s
misrepresentations about her status as an eligible producer, did not bar the USDA
from, after the fact, seeking a refund of the NAP payments made to Fitch in 2016,
2017, and 2018. Finally, as to Fitch’s claim for equitable relief, the Director denied

the request, concluding that Fitch had failed to show that her ineligibility stemmed
from erroneous actions or misrepresentations by an agency official. Instead, the
Director concluded that Fitch’s predicament stemmed from her choice to enroll in

NAP individually. This decision constituted the USDA’s final decision under 7
U.S.C. § 6999.
II. STANDARD OF REVIEW
Summary Judgment is particularly appropriate in cases in which a district

court is asked to review a decision rendered by a federal administrative agency.
Mahon v. United States Dep’t of Agric., 485 F.3d 1247, 1253 (11th Cir. 2007).
However, even in the context of summary judgment, an agency action is entitled to

great deference. Id.
Judicial review of a final agency determination is governed by the
Administrative Procedure Act, which provides in part that a court may set aside an
agency’s “action, findings, and conclusions” if they are arbitrary, capricious, an

abuse of discretion, otherwise not in accordance with the law, or unsupported by
substantial evidence. Id. (citing 5 U.S.C. § 706). See also 7 U.S.C. § 6999; Payton
v. United States Dep’t of Agric., 337 F.3d 1163, 1167 (10th Cir. 2003).
“To determine whether an agency decision was arbitrary and capricious, the
reviewing court must consider whether the decision was based on a consideration of

the relevant factors and whether there has been a clear error of judgment.” N.
Buckhead Civic Ass’n v. Skinner, 903 F.2d 1533, 1538 (11th Cir. 1990) (internal
quotations omitted). The arbitrary and capricious standard is exceedingly

deferential, Fund for Animals, Inc. v. Rice, 85 F.3d 535, 541 (11th Cir. 1996), and
“[t]he reviewing court is not authorized to substitute its judgment for that of the
agency concerning the wisdom or prudence of the” decision, N. Buckhead, 903 F.2d
at 1539. “Rather, the ‘task of the reviewing court is to apply the appropriate ...

standard of review ... to the agency decision based on the record the agency presents
to the reviewing court.” Pres. Endangered Areas of Cobb’s History, Inc. v. United
States Army Corp of Eng’rs, 87 F.3d 1242, 1246 (11th Cir. 1996) (quoting Fla.

Power & Light Co. v. Lorion, 470 U.S. 729, 743–44 (1985)) (internal quotation
marks omitted).
III. DISCUSSION
The parties have filed opposing summary judgment motions that address

three issues—Fitch’s status as an eligible producer under NAP, NAP’s Finality
Rule, and Fitch’s entitlement to equitable relief.
To begin, NAP provides financial assistance to producers of non-insurable

crops to protect against natural disasters that result in lower yields or crop losses or
prevent crop planting. The program is administered under the general supervision of
the Commodity Credit Corporation and is carried out by the local state and county

committees of the FSA. See Mahon v. United States Dep’t of Agric., 485 F.3d 1247,
1253 (11th Cir. 2007); 7 C.F.R § 718.2. Eligible producers must apply for NAP
coverage using form CCC-471 and pay a service fee and a premium.

Pertinent to the issues on appeal here are several defined terms under NAP —
“producer,” “person,” and “operator.” The relevant regulations define a “producer”
as “an owner, operator, landlord, tenant, or sharecropper, who shares in the risk of
producing a crop and who is entitled to share in the crop available for marketing

from the farm, or would have shared had the crop been produced.” 7 C.F.R § 718.2;
7 U.S.C. § 7202(12) (emphasis added). A “person” is defined as someone who must
“(1) Have a separate and distinct interest in the land or the crop involved; (2)

Exercise separate responsibility for such interest; and (3) Be responsible for the cost
of farming related to such interest from a fund or account separate from that of any
other individual or entity.” 7 C.F.R. § 718.2. Finally, NAP regulations define an
“operator” as “an individual, entity, or joint operation who is determined by the FSA

county committee to be in control of the farming operations on the farm.” Id.
A. The USDA did not act arbitrarily or capriciously in determining
Fitch was not an “eligible producer.”

As it concerns the Director’s finding that Fitch was not an eligible producer,
Fitch provides five reasons for why the decision was “arbitrary and capricious and
unsupported by a preponderance of the evidence.” (Doc. 30 at 15.) First, Fitch
references the special treatment of family farms in the congressional farm bills

passed in 2014 and 2018. Second, she argues that she shared in the risk of the crop
through RRF because she shared in 40% of the profits and losses of RRF as part
owner. Third, she argues that as a spouse of a farmer actively engaged in farming,

and therefore sharing in the risk of the crop, she should be deemed as sharing in the
risk through him. Fourth, she argues that even if not deemed to share in the risk
through her husband, because she provided personal labor and personal management
over the crop, she received income based on the farm’s operating results and

therefore shared in the risk of the crop. Fifth, Fitch argues that there is evidence in
the record that she received $96 for 12 boxes of tomatoes from the tomato plot,
which was not referenced by either the hearing officer or the Director in their

decisions, and which shows she directly shared in the risk of the crop.
The USDA counters that the record confirms that Fitch did not share in the
risk of producing the tomato crop, and therefore the underlying decisions were not
arbitrary, capricious, or otherwise not in accordance with the law. It further argues

that Fitch’s claimed eligibility as a producer was based on her status as an owner of
RRF, a separate producer, and not her own individual status as a person. Therefore,
so the argument goes, Fitch failed to show how she operated separately from RRF

for NAP purposes.
As noted, the applicable regulations define an eligible producer as an owner,
operator, tenant, or sharecropper “who shares in the risk” of producing a crop and

who is entitled to share in the crop if it is produced. 7 C.F.R. § 718.2. These
regulations also require producers to provide “acceptable evidence” of “an interest
in the commodity being produced or control of the crop acreage on which the

commodity was grown at the time of the disaster . . . [and] [t]he producer’s risk in
the crop.” 7 C.F.R. § 1437.8(c).3
2F
Here, the evidence presented by Fitch to the hearing officer as it concerns her
producer status falls into two buckets. First, there is physical evidence, including:
(1) an input receipt for seed and fertilizer; (2) two alleged tomato sales receipts, one
of which contained Fitch’s handwritten name; (3) a commercial loan agreement
executed by RRF; (4) a personal guaranty of that loan executed by Fitch; (5) a letter

from Servis1st Bank setting forth Fitch’s 100% personal liability for the
indebtedness of the family farm; (6) the CCC-471 (NAP application) and notice of
loss in Fitch’s individual name; (7) a CCC-578 acreage report in Fitch’s name; and
(8) a Grower’s Permit containing the names of RRF, Lee Fitch, and Amy Fitch.

3 An agency's interpretation of its own regulations is “controlling unless plainly erroneous or
inconsistent with the regulation.” Auer v. Robbins, 519 U.S. 452, 461 (1997). See also Sierra Club
v. Johnson, 436 F.3d 1269, 1274 (11th Cir. 2006). However, to decide this appeal, the Court need
not determine whether the bright-line rule of requiring input receipts as proof of “shar[ing] in the
risk” of a crop is a plainly erroneous interpretation of the agency regulation because, even
assuming so, there is insufficient evidence in the record to support that Fitch shared in the risk in
any other potential way.
And second, there is testimonial evidence from Fitch, including that: (1) she
is married to Lee Fitch, a farmer; (2) she is part owner of RRF; (3) RRF is a family

farm; (4) she was involved in managing the books of the family farm; (5) she
personally farmed crops for 6 to 8 years and for RRF for 17 years; and (6) 2016 was
the first year she had personally grown crops on that parcel even though RRF had

previously grown crops there. She also cites to her testimony that “on any harvest
we hire a crew,” thereby implying that she personally would have hired the crew that
would harvest the tomato crop had it been successful. (Doc. 23-3 at 45.)
None of this evidence proves that Fitch, personally, shared in any degree of

risk of the tomato crop. Fitch’s assertions—such as that she “manages, pays bills,
and oversees the planting and harvest of her crops,” “remained responsible for
expenses,” “provided personal management,” and “worked her crop”—are

unsupported by the record. (Doc. 30 at 10–11, 18–19.) Moreover, as the Director
noted, Fitch failed to present documentation or information showing that Fitch,
personally, had any direct input or investment in the tomato crop, rather than
derivatively through her role with RRF, whether that be seed and feed expenses,

labor expenses, or sweat labor on her part. And as to the one item of evidence
regarding input, the Director noted, and correctly so, that it was a purchase receipt
showing the purchase of seed and fertilizer by RRF, not Fitch.

Fitch points to two documents that she claims constitute receipts that show
she owned the tomato crop and received income from it. These two documents, on
their face, show little if anything regarding Fitch’s risk or share in the crop because

she never presented testimonial evidence supporting these assertions. Instead, these
two documents were submitted by Fitch to the hearing officer after the in-person
hearing had concluded and therefore they were submitted without any testimony of

what they proved or showed. No context was given to them, such as who sold the
tomatoes, where the tomatoes came from, where the money went, and whether this
was even reflective of the sale of tomatoes from the subject plot. That Fitch’s name
is handwritten across one of them proves nothing, especially without supporting

testimony that gives them context.4
3F
Fitch also places much emphasis on her risk attributable through her
ownership interest in RRF, being the spouse of Lee Fitch, her status as a guarantor
of a bank loan that funded RRF’s operations, and on the assertion that the 2014 and
2018 congressional farm bills were intended to protect family farms of which Fitch
is a participant by virtue of her role as a spouse to a farmer and a part owner of RRF.
But the NAP regulations control the issue and outcome here, not vague assertions

about the general purpose of two farm bills that differentially addressed a multitude

4 The problem with these alleged receipts, as with much of Fitch’s argument, is that Fitch failed to
develop a detailed factual record about how she, personally, shared in the risk of the crop. Instead,
the established record largely focuses on Fitch’s role as the spouse of a farmer, a partial owner in
an incorporated entity, and a personal obligor on the line of credit for that entity.
of distinct federal farm programs. Indeed, when vaguely referencing the farm bills,
Fitch appears to be mixing the eligibility rules of certain specified commodity

programs with NAP, a disaster assistance program.
As to the NAP regulations themselves, they clearly distinguish between
individuals, entities, and joint operations as it concerns NAP applicants. The

regulations also define “persons” as having separate and distinct interests in the land
or crop, exercising separate responsibility for that interest, and being responsible for
the cost. 7 C.F.R. § 718.2; 7 U.S.C. § 7202(12). Fitch’s interpretation essentially
would make a producer of anyone or any entity that is tangentially tied to the success

or failure of a farming operation, including banks who lend to a farming entity, the
local farmer’s supply store that sells feed and seed on credit, and any stockholder or
member who holds an ownership interest no matter how small.

As the record makes clear, Fitch applied for NAP coverage in her personal
name and capacity,5 not in the name of RRF, not as an owner of RRF, and not in any
4F
other capacity such as a joint enterprise with her husband, RRF, or a family farm.
And the reason for that decision was likely to avail herself of the financial benefits
of being a socially disadvantaged farmer that were not otherwise available to RRF.

5 Under the NAP Handbook, the mere act of purchasing NAP coverage individually is not
sufficient to meet eligibility requirements. (Doc. 23-3 at 124.)
Given the dearth of evidence in the record concerning Fitch’s personal share
in the risk of the tomato crop, the Court cannot find, and does not, that the Director

acted arbitrarily, capriciously, or not in accordance with the law in concluding that
Fitch was not an eligible producer.6 And for this Court, when reviewing an agency
5F
decision as it does here, it cannot re-weigh the evidence to reach a different result.
See Spring Creek Farming Co. v. Fed. Crop Ins. Corp., 653 F. App'x 728, 733 (11th
Cir. 2016) (per curiam) (“But courts cannot re-weigh the evidence on agency
review.”).
B. The Director did not act arbitrarily or capriciously in not applying
the Finality Rule.

The second issue raised by Fitch concerns the Finality Rule. Fitch argues that
it was error for the Director, the hearing officer, and the USDA not to apply the
Finality Rule, which Fitch claims precluded the USDA from revisiting the 2016
claim in 2019 and then clawing back payments made to Fitch for the 2016 year and
the two subsequent years in 2017 and 2018.7 Relying upon the plain language of the
6F
Finality Rule, the USDA argues that Fitch’s misrepresentation of her producer status

6 While this is not an insurance claim dispute in the traditional sense, the current dispute operates
much the same as those involving “insurable interests” in the things insured at the time of a
property loss. See, e.g., Mt. Hebron Dist. Missionary Baptist Assoc. of Ala., Inc. v. Alexander, 835
F. App’x 415 (11th Cir. 2020) (per curiam).

7 Under 7 C.F.R. § 1437.16(c), if a person “[m]ade any fraudulent representation with respect to
such program” or “[m]isrepresented any fact affecting a program determination,” that person “is
ineligible to receive assistance . . . for the crop year plus two subsequent crop years.”
constituted an exception to the Finality Rule.
The Finality Rule is codified at 7 C.F.R. § 718.306. It provides that a

“determination by an FSA State or county committee (or employee of such
committee) becomes final on an application for benefits and binding 90 days from
the date the application for benefits has been filed, . . . unless any of the following

exceptions exist: . . (2) The determination was in any way based on erroneous,
innocent, or purposeful misrepresentation; false statement; fraud; or willful
misconduct by or on behalf of the participant.…” 7 C.F.R. § 718.306(a)(2)
(emphasis added).

Fitch first argues that “[t]he Agency failed to prove that any statement of Fitch
was material to the award of benefits,” and therefore, the Finality Rule should have

applied. (Doc. 30 at 27.) The plain language of the Finality Rule illustrates the
infirmity of Fitch’s argument. The regulation is clear and creates an exception when
“the determination was in any way based on erroneous, innocent, or purposeful
misrepresentation.” 7 C.F.R. § 718.306(a)(2). Fitch seems to argue that the Finality

Rule requires that the misrepresented fact be the primary or moving force behind
payment of the claim. But the rule is not written in such narrow terms. It only
requires that the decision be based “in any way” on the misrepresentation, a meager

hurdle for the USDA to meet.
Moreover, regardless of the weight given to the misrepresentation, there was
substantial evidence in the record to find that Fitch made a misrepresentation and

that it influenced her receipt of NAP payments. Below, Fitch provided no proof of
input receipts, no proof of capital, equipment, or land contribution, no proof of actual
personal management or labor, no proof that Fitch leased the land from RRF, and no

proof that she shared in the crop had it been marketed. Indeed, she provided virtually
nothing showing a personal, direct risk or share in the tomato crop. And the USDA
presented evidence, primarily in the form of the NAP application certifications, the
notice of loss, and the FSA representative’s testimony before the hearing officer, that

being a producer was necessary to be eligible to participate in NAP and receive
payment. It was not arbitrary, capricious, or otherwise erroneous for the USDA to
later conclude that Fitch’s misrepresentation about her producer status of the tomato

crop was a representation that impacted her eligibility for payment. Indeed,
eligibility is almost always the gateway issue in any claim decision; this claim was
no different.
Fitch’s second argument is even less appealing. Fitch also argues that she did

not deliberately misrepresent anything related to her producer status. But she again
runs into the plain language of the regulation. The plain language does not base its
application on Fitch’s level of knowledge or intent. Instead, the exception applies to

all misrepresentations, even innocent ones.
Because the Court has already concluded that the Director did not act
arbitrarily, capriciously, or otherwise in error in finding that Fitch was not an eligible

producer and in upholding the hearing officer’s decision, the Court also concludes,
as it must, that the exception to the Finality Rule was appropriately applied. And by
extension, pursuant to the exception, the USDA possessed the authority, as a

sanction, to seek reimbursement of the payments made to Fitch from 2016 through
2018.
C. The Director did not act arbitrarily or capriciously in denying
equitable relief.
Finally, as another fallback position, Fitch argues the Director acted arbitrarily
and capriciously in failing to grant her “equitable relief because she made a good
faith effort to follow the requirements of the NAP program.”8 (Doc. 30 at 27.)
7F
As the USDA correctly notes, the Director’s ability to grant equitable relief
can arise from two scenarios or tests:
The Secretary may provide relief to any participant that is determined
to be not in compliance with the requirements of a covered program,

8 7 U.S.C. § 7996(b) provides that “The Secretary may provide relief to any participant . . .”. Thus,
it is arguable that the Director’s discretionary decision is not subject to judicial review because it
is an area committed to agency discretion by law under the APA. See 5 U.S.C. § 701 (a)(2). It is
also arguable that, under 7 U.S.C. § 7996(f), the Director’s decision is not subject to judicial
review. See 7 U.S.C. § 7996(f); Harmon v. United States Dep’t of Agric., 2014 WL 12684895, at
*2, n.10 (D. Mont. Jan. 23, 2014), aff’d 666 F. App’x 698, 701 (9th Cir. 2016). But see Hixson ex
rel Hixson Farms v. United States Dep't of Agric., No. 15-CV-02061-RBJ, 2017 WL 2544637, at
*5 (D. Colo. June 13, 2017) (arguing that 7 U.S.C. § 7996(f) does not apply and “7 U.S.C. § 6999
provides that any final determination by the Director is subject to judicial review under the APA.
The Director’s denial of Hixson’s request for equitable relief is thus subject to judicial review.”).
and therefore ineligible for a loan, payment, or other benefit under the
covered program, if the participant—

(1) acting in good faith, relied on the action or advice of the
Secretary (including any authorized representative of the
Secretary) to the detriment of the participant; or

(2) failed to comply fully with the requirements of the covered
program, but made a good faith effort to comply with the
requirements.

7 U.S.C. § 7996(b). See also 7 C.F.R. § 718.303.
The USDA first argues that Fitch failed to preserve and exhaust her argument
that she is entitled to equitable relief under 7 U.S.C. § 7996(b) because she did not
properly raise it with the NAD, including the hearing officer. But the USDA also
acknowledges that the Director9 and Secretary of the USDA have the sole authority
8F
to grant equitable relief under 7 U.S.C. § 7996(b). Requiring Fitch to raise an
equitable relief claim to a hearing officer, who statutorily cannot grant such a
request, conflicts with the pertinent statutes and defies the purposes of the exhaustion
requirement; that is, to preserve judicial resources, improve the efficiency of the
administrative process, and avoid futility. See Johnson v. Meadows, 418 F.3d 1152,
1156 (11th Cir. 2005) (Dubina, J.) (citing Alexander v. Hawk, 159 F.3d 1321, 1327
(11th Cir. 1998) (listing purposes of exhaustion)). See also Ace Prop. & Cas. Ins.

9 The Director can grant equitable relief in the same manner and to the same extent as the Secretary.
7 U.S.C. § 6998(d).
Co. v. Fed. Crop Ins. Corp., 440 F.3d 992, 1000 (8th Cir. 2006) (explaining that a
party may be excused from exhausting administrative remedies if further

administrative procedures would be futile). Accordingly, the Court finds
unpersuasive the USDA’s position that Fitch had to first raise her equitable relief
claim with the hearing officer. That, however, does not mean that Fitch should not

create a factual record with the hearing officer if she intends to later present an
equitable relief request to the Director on director review.
The next consideration is whether Fitch properly presented the equitable relief
issue to the Director, a person who did have statutory authority to grant equitable

relief under 7 U.S.C. § 7996(b). As the USDA notes, the entirety of Fitch’s equitable
relief request was simply a vague, boilerplate statement buried within certain
documents, such as the fifth page of her Petition for Director Review. (See, e.g., Doc.

23-3 at 92.) She made no argument, no affirmative showing, and no advocacy of her
entitlement to equitable relief under either 7 U.S.C. § 7996(b) test to the Director.
This failure to explicitly raise and argue it undoubtedly frustrates the administrative
review process and undermines the goals of exhaustion.

The Court thus concludes that Fitch failed to properly preserve and exhaust
her argument for why she is entitled to equitable relief under 7 U.S.C. § 7996(b).
Mahon, 485 F.3d at 1254–55 (“Under ordinary principles of administrative law, a

reviewing court will not consider arguments that a party failed to raise in [a] timely
fashion before an administrative agency.”); Fleming v. United States Dep't of Agric.,
987 F.3d 1093, 1100 (D.C. Cir. 2021) (“On deferential review under the APA, see 5

U.S.C. § 706, we could not conclude that a decision by the Judicial Officer was
arbitrary and capricious in failing to identify, raise, and resolve sua sponte an issue
never presented to her.”); Care Net Pregnancy Ctr. of Windham Cnty. v. United

States Dep’t of Agric., 896 F. Supp. 2d 98, 112 (D.D.C. 2012)(“since issue
exhaustion is required in administrative proceedings before the Appeals Division,
Care Net had to raise more than just the ‘substance’ of its . . . claims. It was instead
obligated to ‘forcefully present[ ]’ its argument before the Appeals Division, ‘or else

waive the right to raise those arguments on appeal’ before this Court.”); Ballanger
v. Johanns, 495 F.3d 868, 869-870 (8th Cir. 2007) (finding that claimant had failed
to exhaust with the NAD certain issues he was raising before the court). Fitch’s

failure to preserve the issue forecloses her new argument to this Court even if the
Director erred in his analysis of equitable relief. See Fleming v. United States Dep't
of Agric., 987 F.3d 1093, 1100 (D.C. Cir. 2021) (“Put differently, “[i]f a party flouts
[agency] regulation[s] by failing to raise with the [agency] an issue that the party

asserts in court, the court generally has no basis for ‘setting aside’ the [agency's]
order (even assuming the administrative law judge erred.”).
It is correct that the Director briefly discussed one of the equitable relief tests

— detrimental reliance under 7 U.S.C. § 7996(b)(1) — in the determination of
Fitch’s appeal. But he did not address the second; whether Fitch made a good faith
effort to comply with NAP requirements. However, the Director’s sua sponte

consideration of 7 U.S.C. § 7996(b)(1) does not alter this Court’s conclusion that
Fitch failed to preserve an argument for remedies as it concerns both § 7996(b)(1)
and (b)(2). Amaya-Artunduaga v. United States Att’y Gen., 463 F.3d 1247, 1249–51

(11th Cir. 2006) (per curiam) (holding that the Board of Immigration Appeals’ sua
sponte consideration of an issue does not preserve it for appellate review and
reasoning that the goals of exhaustion are better served by declining to review claims
a petitioner, without excuse or exception, failed to present before the BIA, even if

the BIA addressed the underlying issue). See also Hooks v. Yandell, No. 20-7061,
2021 WL 3557190, at *3 (10th Cir. Aug. 12, 2021) (“But because he does not
develop this argument or present any legal authority, it is waived.”); United States

v. George, 448 F.3d 96, 99 (1st Cir. 2006) (“George’s brief hints at additional due
process arguments but fails to develop them sufficiently to warrant further
mention.”).
Regardless, the Court concludes that the Director’s decision not to grant

equitable relief based on Fitch’s claim of good faith was not arbitrary, capricious, or
not in accordance with the law because Fitch presented no evidence that she
completed the NAP application based upon faulty or wrong advice received from

the USDA or any agency representative. And the Director was not required to grant
equitable relief in the face of a factual circumstance where Fitch was not an eligible
producer under NAP rules based upon a unilateral decision by Fitch to enroll in NAP

in the manner that she did.
In short, the Court dismisses Fitch’s challenge to the Director’s failure to grant
her equitable relief since Fitch failed to properly raise the issue with the Director.

But even if she had, the Court concludes that the Director did not act arbitrarily,
capriciously, or otherwise in error in not granting her this request.
IV. CONCLUSION
For the preceding reasons, it is ORDERED as follows:

1. Appellant Amy Fitch’s Motion for Summary Judgment (Doc. 30) is
DENIED;
2. Appellant Amy Fitch’s Motion to Strike10 (Doc. 35) is DENIED;
9F
3. The Appellees’ Motion for Summary Judgment (Doc. 33) is GRANTED;
4. The appeals determination of the Director of the National Appeals
Division is AFFIRMED; and
5. The Clerk of Court is directed to enter judgment in favor of Appellees,

10 Through a Motion to Strike, Fitch takes exception to the USDA’s brief, which Fitch interprets
as accusing her of knowingly participating in fraudulent conduct. (Doc. 35.) The Court notes that
the USDA’s brief does not accuse Fitch of knowingly participating in fraud. Instead, the USDA
cites the record in which testimony was provided that explained why Fitch’s NAP claim was
reviewed nearly three years after it was paid. Because the motion and the cited language in the
USDA’s brief are irrelevant to the outcome of this appeal, the Court denies the Motion to Strike.
United States of America, the Farm Service Agency, and the United States
Department of Agriculture, and close this file.

DONE, on this the 20th day of May, 2022.

/s/ R. Austin Huffaker, Jr.
R. AUSTIN HUFFAKER, JR.
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9987801. Public record. Not legal advice.