Petition for Writ of Certiorari — Horn Farms, Inc. v. Johanns (No. 04-1502)

Supreme Court brief2004

Ask Donna

What actually matters in this document.

Text

FILED

041502 MAY 2 - 2005

3n The

Supreme Court of the Anited States

HORN FARMS, INC.,

Petitioner,

MIKE JOHANNS,

SECRETARY OF AGRICULTURE, et ai.,

Respondents.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

KAREN BUDD-FALEN

Counsel of Record

BRANDON L. JENSEN

BuUDD-FALEN Law OFFICES, LLC

300 East 18th Street

Post Office Box 346

Cheyenne, Wyoming 82001

(307) 632-5105

Counsel for Petitioner

= lleeeleele

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

The wetland conservation provisions of the Food

Security Act of 1985, as amended by the Food, Agriculture,

Conservation, and Trade Act of 1990 and the Federal

Agriculture Improvement and Reform Act of 1996, make it

unlawful to convert 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 agricul-

tural commodity possible on such converted wetland,”

unless one or more of the statute’s exemptions apply. 16

U.S.C. §§ 3821(c), 3822(b) (Supp. IV 1998). Any person

who in any crop year violates the wetland conservation

provisions shall be permanently ineligible for certain

payments, loans, or programs administered by the United

States Department of Agriculture. 16 U.S.C. §§ 3821(a)(2),

(b), and (c) (Supp. IV 1998).

Accordingly, the Petitioner’s questions presented for

review include the following:

1. Whether the United States Court of Appeals for the

Seventh Circuit erred in holding that an exemption to

program ineligibility, as set forth in 16 U.S.C.

§ 3822(b\(2D) (Supp. IV 1998), for wetlands previ-

ously converted for the production of an agricultural

commodity, was inapplicable if wetland characteris-

tics returned prior to the enactment of the Food Secu-

rity Act of 1985?

2. Whether the statute permanently terminating a

farmer’s eligibility, in its entirety, is a violation of the

Spending Power of the United States Constitution,

because it amounts to impermissible coercion?

PARTIES TO THE PROCEEDING

AND CORORATE DISCLOSURE STATEMENT

The Petitioner in this Court is Horn Farms, Inc. There

are no parent corporations, publicly held companies, or

investment funds that hold any ownership interest in the

‘corporation. The corporation is privately-owned in its

entirety by Gene and Ellen Horn of Kewanna, Indiana.

The Respondents in this Court are Mike Johanns, in

his official capacity as Secretary of the United States

Department of Agriculture; the United States Department

of Agriculture; Steven Rodenberg, in his official capacity as

Fulton County Executive Director of the United States

Farm Service Agency, an agency of the United States

Department of Agriculture; and Daniel M. Rosswurm, in

his official capacity as District Conservationist of the

United States Natural Resources Conservation Service, an

agency of the United States Department of Agriculture.

10 ~

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW .............. i

PARTIES TO THE PROCEEDING AND CORPO-

RATE DISCLOSURE STATEMENT ...................... ii

ee CI Fy EE i ccicccveccenccsckcrcecncdsescctssncccce v

I ciniiabbatad 1

I a i ee 1

CONSTITUTIONAL AND STATUTORY PROVI-

I i cn ceetnaiatl 1

STATEMENT OF THE CASE ..........cc.cccccccccccsscccsccses 2

B, Beatebery BRGITOUIAG 220.ccrcccccccecccccscoscscoccsceses 3

Bs. SE CUEIOUIINES ccceidciccnscesccdsacscatsecsescunidees 5

C. Initiation of Judicial Review and the District

ee apa NE IP RR ape A 7

D. The Seventh Circuit’s Decision ........................ 9

REASONS FOR GRANTING THE PETITION.......... 10

I. THE CIRCUITS ARE SPLIT OVER THE

USDA'S AUTHORITY TO TERMINATE ELI-

GIBILITY BASED ON THE CONVERSION OF

A WETLAND PRIOR TO THE ENACTMENT

OF SWAMPBUSTER IN 1985. ...................00000

Il. THE COURT OF APPEALS ERRED IN HOLD-

ING THAT THE LEGISLATIVE HISTORY OF

THE SWAMPBUSTER WAS IRRELEVANT IN

UPHOLDING THE SECRETARY'S INTER-

PRETATION OF THE STATUTE UNDER

IIIT scinenelinicchcbsctheckbéendecdeibaciteabineseainade 15

TABLE OF CONTENTS -— Continued

Page

III. REVIEW BY THIS COURT IS WARRANTED

TO CLARIFY LIMITATIONS ON CONGRESS’

SPENDING POWER TO CONDITION THE

RECEIPT OF FEDERAL FUNDS BASED

UPON COMPELLED COMPLIANCE WITH A

AT TO acc cccccccccccnccccnsensccnccsences 20

CE ibicchadinccuibictnbtt seein chad icndecodtbtineenniieiiibeininans 30

APPENDIX A (Seventh Circuit Decision)

ge Foe ys, 1s % eae ce eee la

APPENDIX B (District Court Decision)

319 F.Supp.2d 902 (N.D. Ind. 2004) ..............eceseseeees 12a

APPENDIX C (Administrative Decisions)

NRCS Preliminary Technical Determination ............. 53a

NRCS Non-Agricultural Determination ........2............ 64a

NRCS Final Technical Determination ........................ 67a

Farm Service Agency Decision .............cccccsssssseeeeeseeees 8la

FSA Fulton County Committee Decision. .................... 84a

Hearing Officer’s Preliminary Decision ..................+++- 86a

Hearing Officer’s Final Decision .................ccceseeeseeeees 90a

Denial of a Director Review Request ..............2::::see+++ 94a

Second Denial of a Director Review Request.............. 96a

APPENDIX D (NRCS Field Notes)...............sscssccssseeeesees 99a

APPENDIX E (United States Code) .................ceseeeseeees 10la

APPENDIX F (Code of Federal Regulations)............... 113a

TABLE OF AUTHORITIES

Page

CASES:

A.W. v. The Jersey City Public Schools, 341 F.3d 234

RI I Ris csnciniicttiiciticnainnhiadtnnlouncdcsde col. oe 29

B&D Land and Livestock, Co. v. Veneman, 231

F.Supp.2d 895 (N.D. Iowa 2002) ........cecccccccsssececoceseceees 22

Barthel v. United States Department of Agriculture,

181 F.3d 934 (8th Cir. 1999) oo. cecccccescseseee 13, 14, 16

Bradley v. Arkansas Department of Education, 189

F.S6 745 (Gtth Cir, 1990) u....n:ccccccsesscsoccscsesseseen ecscsessecece, 26

Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1994).....cccccecceccoeeeees 9, 11, 15

College Savings Bank v. Florida Prepaid Post

Secondary Education Expense Board, 527 U.S.

PE iidhintchinituinleateendiabucaste Soe 20, 21, 21

Commonwealth of Virginia, Department of Education

v. Riley, 106 F.3d 559 (4th Cir. 1997) (en banc).................. 27

Doe v. State of Nebraska, 345 F.3d 593 (8th Cir.

2003) ....... niin dalpipiinnadahnnadiipictiinpabiusniaaibipaimiiipiniesstaanietiaie 27

Frost v. Railroad Commission of the State of Cali-

fornia, 271 U.S. 588 (1926)...............e.ececeseceseoeesessee. 24, 25

General Dynamics Land Systems, Inc. v. Cline, 540

WA GE GNPIAD hscciinsciicesaineiantctcescgcedn nc ee 15

Greene v. McElroy, 360 U.S. 474 (1959).....ccccccccccscseseesecee. 30

Gunn v. United States Department of Agriculture,

118 F.3d 1233 (8th Cir. 1997) o.oo. ccccccscccoscoseceeces 12,13

Horn Farms, Inc. v. Veneman, 319 F.Supp.2d 902

a NE og | NED LALO TES BAPE RE Hike. 22

TABLE OF AUTHORITIES — Continued

Page

Immigration and Naturalization Service v. Car-

doza-Fonseca, 480 U.S. 421 (1987) ..0.........cccccccceesceeeeseee 15

dim C. v. United States, 235 F.3d 1079 (8th Cir.

I Oe i icnccccreensnintciceitintaniinsnninierntipiimemiiaiiaiiinias 27

Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494

CEL GRE CED cncceesensvatnatniiintacscehaceeniatentiatilinkgiaanbiaiinies 18

Kansas v. United States, 24 F.Supp.2d 1192 (D.

Kan. 1998), aff'd, 214 F.3d 1196 (10th Cir. 2000) .. 21, 27

Koslow v. Commonwealth of Pennsylvania, 302 F.3d

BR Cae Gi Bir irctcncstsicecnasiilenscccecenceniessninnnisueinaitaaianiicis 29

Massachusetts v. Mellon, 262 U.S. 447 (1923).................. 20

Mich. Dep't of State v. United States, 166 F.Supp.2d

SD Cees Se, CD cccsnictacsncencctbinccntenaniillitetndiiianis 21

National Wildlife Federation v. Agricultural Stabi-

lization and Conservation Service, 955 F.2d 1199

GRUB Clee, Be acscsnnensecssncsusscttcherenscesssesusuiealdenaannne 18, 22

New York v. United States, 505 U.S. 144 (1992)......... 20, 24

Oklahoma v. Schweiker, 655 F.2d 401 (D.C. Cir. 198})......... 21

Perry v. Sindermann, 408 U.S. 593 (1972) .................00000 29

Solid Waste Agency of Northern Cook County v.

United States Army Corps of Engineers, 531 US.

South Dakota v. Dole, 483 U.S. 203 (1987).....9, 20, 25, 26, 28

State of California v. United States, 104 F.3d 1086

Vii

TABLE OF AUTHORITIES - Continued

Page

United States v. Butler, 297 U.S. 1 (1936)................ 24, 25

United States v. Dierckman, 201 F.3d 915 (7th Cir.

OUTED caieristiphcntpistntgantetiinatatligsnhidtaigena ac A 22

United States v. James Daniel Good Real Property,

Oy Ie SG aaah 30

United States v. Sabri, 183 F.'Supp.2d 1145 (D.

EEA COR TSI AN es ee AED 27

United States v. Sabri, 326 F.3d 937 (8th Cir. 2003) .. 27, 28

United States v. Shimer, 367 U.S. 374 (1961).................. 15

West Virginia v. United States Department of

Health and Human Services, 289 F.3d 281 (4th

(SIU ED anpnsiihsnniintensesttemnieanadonibatensidainkinind kml 27, 28

STATUTES AND REGULATIONS:

Farmland Protection Policy Act, 7 U.S.C. § 4201 et seq.:

7 U.S.C. § CaO PI nsicisesteniarcncissthniiiediibasisacacescen 2

Food Security Act of 1985, Pub. L. No. 99-198, 99

Stat. 1354 (December 23, 1985) oo.0.......-occccccccccsocoseocoes-. 3

16 U.S.C. § 3821 (Supp. TTT 1985)... cccccccscececeeeeee-... 3

Food, Agriculture, Conservation, and Trade Act,

Pub. L. No. 101-624, 104 Stat. 3359 (November

SE, BED icwcessecetnts piadnnsigenesdiidetmdsnisitintnnstbaannieniniaanaindisaniaian 3

16 U.S.C. § 3821(a) (Supp. IT 1990)... ccccccccesocseeess-s... 4

16 U.S.C. § 3821(b) (Supp. IT 1990)... ecco. 3,4

16 U.S.C. § 3821(bX1XA) (Supp. IT 1990)........................ 4

Federal Agriculture Improvement and Reform Act

of 1996, Pub. L. No. 104-127, 110 Stat. 888 (April

viii

TABLE OF AUTHORITIES — Continued

Page

Food Security Act, as amended:

16 U.S.C. § 3821(a) (Supp. IV 1998)... eee 1,3

16 U.S.C. § 3821(b) (Supp. IV 1998)... eee ceeeeeeeeees 3

16 U.S.C. § 3821(c) (Supp. TV 1998) 0.0... eeseseeee 1,3

16 U.S.C. § 3822(b) (Supp. IV 1998)... eens 1,3

16 U.S.C. § 3822(bX1)(A) (Supp. IV 1998)................. 3,17

16 U.S.C. § 3822(b)\(1G) (Supp. IV 1998)............. passim

16 U.S.C. § 3822(b)\(2)(D) (Supp. IV 1998)............. passim

16 U.S.C. § 3822(i) (Supp. IV 1998)............cceceeeeeeeeee 3,5

7 C.FR.:

Ris FT Ct ceestcniencniccesninntnsecscsninnpsastesnncantinidensal 2

eet: BI i iarstiticiinesenaicennicasinsecssinnceaensein 2, 8, 11, 16

ee BE itt etestesieniicichcesebiinnbidienhainihebigalisnaciaadiiiianig 2

Rats FE ad ivccrnsnisniiiininincicndbinsentansininentiniacialbhig alae

i Re hikitiincnckcncscicnenichnnnicsapnesincsahenmnanbaonia 2

Section 12.5(bX1ii) (1999) .............cccecccccsecccssssceceeees 7,16

ite Fe ee SE tiscnctsecnedcnninnctinnnitnnpansistninnisinten 5

ea, Fe sirsicenincnhidairninnniucsacitinidniacincnpieibhiaaamab 13

is Tee CD ereninctcinicteniincentiatiincisitiniaiaminiainiens 4

Section 614.102 (1999)............s:cscsssssssessesseeeseeeeees mca 5

MISCELLANEOUS:

H.R. Rep. No. 99-271, pt. 1, 99th Cong. (1st Sess.

1985), reprinted in 1985 U.S.C.C.A.N. 1103..... 17, 18, 22

136 Cong. Rec. H11029, 11345 (daily ed. Oct. 22,

1990) (statement of Rep. De La Garza)................::00000+ 23

Baker, Lynn A., Conditional Federal Spending After

Lopez, 95 COLUM. L. REV. 1911 (1995) ..........:ccsscseeereees 29

Chemerinsky, Erwin, Protecting the Spending

Power, 4 CHAP. L. REV. 89 (2001)..............sssescscsssssssseees 21

—

—_

TABLE OF AUTHORITIES - Continued

Page

Douglas, Patrick R., Conservation or Coercion:

Federal Regulation of Intrastate Wetlands Under

the Swampbuster Provisions of the Food Security

Act, 8 Mo. ENVTL. L & Pot’y REV. 59 (2001)................. 22

McBeth, Daryn, Wetlands Conservation and Fed-

eral Reguiation: Analysis of the Food Security

Act’s “Swampbuster” Provisions as Amended by

the Federal Agriculture Improvement and Reform

Act v," 1996, 21 Harv. ENVTL. L. REV. 201 (1997)............ 4

Zietlow, Rebecca E., Federalism’s Paradox: The

Spending Power and Waiver of Sovereign Immu-

nity, 37 WAKE ForEsT L. REV. 141 (2002)..................... 29

4 ere

PETITION FOR WRIT OF CERTIORARI

Petitioner Horn Farms, Inc. respectfully petitions for

a writ of certiorari to review the judgment of the United

States Court of Appeals for the Seventh Circuit.

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Seventh Circuit (App. A, infra, la-1lla) is reported at

397 F.3d 472. The opinion of the United States District

Court for the Northern District of Indiana, South Bend

Division, the Honorable Judge Allen Sharp presiding (App.

B, infra, 12a-52a), is reported at 319 F.Supp.2d 902. The

opinions and orders of the various administrative agencies

are reproduced herein at App. C, infra, 53a-98a.

JURISDICTION

The judgment of the Court of Appeals was entered on

February 2, 2005. The jurisdiction of this Court is invoked

pursuant to 28 U.S.C. § 1254(1) (2000).

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

This case raises issues involving the Spending Clause

of the United States Constitution, which authorizes

Congress to “lay and collect Taxes, Duties, Imposts, and

Excises, to pay the Debts and provide for the common

Defence and general Welfare of the United States.” U.S.

Const. art. I, § 8, cl. 1. The relevant provisions of the Food

Security Act, 16 U.S.C. §§ 3821 and 3822(b) (Supp. IV

1998), are reproduced herein at App. E, infra, 106a-112a.

The pertinent regulations, 7 C.F.R. §§ 12.1 through 12.5

(1999), are reproduced herein at App. F, infra, 113a-134a.

STATEMENT OF THE CASE

Fundamentally, this matter concerns the balance

between protecting the Nation’s long-term capability to

produce food and fiber, and preserving the functions and

values of the Nation’s wetlands. The issue in this case is

whether, pursuant to the Food Security Act of 1985, the

United States Department of Agriculture (“USDA”) prop-

erly has jurisdiction over previously converted wetlands,

which at one time were lawfully converted for the produc-

tion of one or more agricultural commodities, even though

wetland characteristics returned prior to the enactment of

the Food Security Act on December 23, 1985.

Despite Congress’ admonition that farmland is not to

be irreversibly converted to nonagricultural uses and its

assurance that other national interests will not override

the importance of the protection of farmland nor otherwise

outweigh the benefits of maintaining farmland resources,

7 U.S.C. § 4201(aX7) (1994), the Seventh Circuit Court of

Appeals held that if the wetland characteristics of a prior

lawfully converted wetland return at any time prior to

December 23, 1985, then the Petitioner and others remain

subject to the prohibitions of the Food Security Act of

1985. Failure to adhere to the provisions of the Act shall

result in the termination of eligibility to receive various

farm subsidies from the USDA; a coercive or punitive

measure, which remains attached to both the Petitioner

and his private property in perpetuity.

A. Statutory Background.

Congress enacted the wetland conservation provisions

of the Food Security Act on December 23, 1985. Pub. L. No.

99-198, §§ 1221-1222, 99 Stat. 1507 (1985) (codified at 16

U.S.C. §§ 3821-3822). The Act’s wetland conservation

provisions are commonly referred to as “Swampbuster,”

because the Act seeks to provide an economic encourage-

ment to farmers to voluntarily conserve wetlands located

on their privately-owned property, and conversely, seeks to

remove any economic incentives for farmers to produce

agricultural commodities on converted wetlands. Specifi-

cally, any person who produces an agricultural commodity

on a converted wetland after December 23, 1985, shall be

ineligible for certain benefits provided by the USDA. 16

U.S.C. § 3821 (Supp. III 1985); App. E, infra, 101a-102a.

However, in 1990, Congress strengthened the provi-

sions of Swampbuster through the enactment of the Food,

Agriculture, Conservation, and Trade Act. Pub. L. No. 101-

624, § 1421(b), 104 Stat. 3572 (November 28, 1990). While

retaining the original 1985 prohibitions, the 1990 amend-

ments additionally 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 sha!! be ineligible” for

certain benefits provided by the USDA. 16 USC.

§ 3821(b) (Supp. II 1990); App. E, infra, 103a-105a.

Consequently, subsequent to the 1990 amendments,

any person could become ineligible for certain USDA

benefits by either (1) converting a wetland and producing

agricultural commodities after December 23, 1985, or (2)

merely converting a wetland after November 28, 1990, so

that agricultural commodities could be produced. 16

U.S.C. §§ 3821(a), (b) (Supp. II 1990); App. E, infra, 103a-

105a. Nevertheless, under the Act and the 1990 amend-

ments, no person shall become ineligible as the result of

the production of an agricultural commodity on a con-

verted wetland if the conversion of such wetland occurred

before December 23, 1985. 16 U.S.C. § 3822(b)1)(A) (Supp.

II 1990); App. E, infra, 105a-106a.

Finally, and perhaps most importantly, the 1996 re-

authorization of the Food Security Act, via the Federal

Agriculture Improvement and Reform Act of 1996, Pub. L.

No. 104-127, §322(b), 110 Stat. 888, 988-89 (April 4,

1996), provides for the lawful conversion of a wetland, “if

the original conversion of the wetland occurred prior to

December 23, 1985, and the wetland characteristics

returned after that date as a result of the lack of mainte-

nance of drainage, the lack of management of the lands

containing the wetlands, or circumstances beyond the

control of the person.” 16 U.S.C. §§ 3822(b)\(1)(G), (bX 2D)

(Supp. IV 1998) (emphasis added). This language effec-

tively repealed the Natural Resources and Conservation

Service’s regulations pertaining to abandonment.

Previously, if a farmer abandoned a prior converted

wetland, which was exempt from the provisions of

Swampbuster, for five years during which time the wet-

land characteristics returned, the prior converted wetland

was considered “abandoned” and was “re-labeled” as a

wetland, subject to the provisions of Swampbuster. 7

C.F.R. § 12.33(b) (1996). However, the 1996 amendments

“perfect” a prior converted wetland status for a landowner:

once a prior converted wetland, always a prior converted

wetland. McBeth, Daryn, Wetlands Conservation and

Federal Regulation: Analysis of the Food Security Act’s

“Swampbuster” Provisions as Amended by the Federal

Agriculture Improvement and Reform Act of 1996, 21

HARV. ENVTL. L. REV. 201, 256 (1997).

B. Factual Background.

Petitioner Horn Farms is owned and operated by Mr.

Gene Horn. Between February 8, 1995 and February 28,

1996, Petitioner Gene Horn purchased 150 acres of farm-

land in Fulton County, Indiana. Mr. Horn principally

produces agricultural commodities such as corn and

soybeans for sale at market. Prior to 1999, the Petitioner

was eligible to participate in, and receive loans and subsi-

dies from, various agriculture programs administered by

the USDA. App. B, infra, 13a.

In the late 1970's, the drainage tile system on the

Petitioner’s private property began to fall into disrepair

and needed to be replaced. Jd. at 14a-15a, 32a, 4la-43a;

App. A, infra, 2a; and App. D, infra, 99a-100a. The Peti-

tioner determined that his property had previously been

farmed, but portions had reverted to wetlands through

lack of maintenance of the drain tile system. Jd. at 14a.

Unfortunately, much needed repairs never occurred prior

to the Petitioner’s ownership. After the Petitioner pur-

chased the property, he endeavored to replace the entire

drainage tiling system to improve and more efficiently

maintain water drainage. Therefore, in 1998, he converted

several wetlands and restored the drain tile system

throughout the property. Jd. at 14a-15a, 41a-43a.

On May 5, 1999, the Petitioner was preliminarily

notified by the NRCS that he allegedly converted 6.2 acres

of wetlands in violation of the provisions of Swampbuster.

Id. at 15a-16a; App. C, infra, 53a-64a. The notification

provided the Petitioner an opportunity to mediate his

alleged misconduct with the NRCS, as required by 7 C.F.R.

§ 614.102 (1999). During mediation, the NRCS provided

the Petitioner with the option of restoring or mitigating

the loss of the wetlands in accordance with 16 U.S.C.

§ 3822(i) (Supp. IV 1998) and 7 C.F.R. § 12.5(b4) (1999).

According to the NRCS, even though the Petitioner alleg-

edly converted only 6.2 acres of wetlands, he was required

to acquire, develop, or restore approximately 32 acres of

wetlands in order to mitigate their loss. Jd. at 16a-17a;

App., infra, 65a-66a. Due to the substantial discrepancy

between the amount of acreage allegedly converted, and

the amount of acreage potentially required for restora-

tion/mitigation, the Petitioner declined to accept the

restoration/mitigation criteria. Jd. at 17a.

Therefore, on July 30, 2001, the NRCS declared the

Petitioner ineligible for all USDA programs administered

by the Farm Service Agency. App. C, infra, 67a-8la. The

final decision by the NRCS requires the Petitioner to

either restore the converted areas to wetland conditions or

mitigate their loss. Jd. at 75a, 77a. According to the Farm

Service Agency, and in accordance with 16 U.S.C. § 3821(c)

(Supp. [V 1998), all of the Petitioner’s USDA-related bene-

fits were to be withheld beginning in 1999, and will

continue through all subsequent years until the wetlands

are restored or mitigated before January Ist of the subse-

quent crop year. App. B, infra, 16a; App. C, infra, 81a-84a.

Subsequently, each of the Petitioner's administrative

appeals failed. Jd. at 17a-19a; App. C, infra, 84a-98a. The

production of an agricultural commodity in a converted

wetland, without the attendant loss of agricultural subsi-

dies, is strictly prohibited by any successor-in-interest,

even those wholly innocent of the actual unlawful conver-

sion. Such a determination has a significant adverse

impact on the fair market value of the Petitioner’s prop-

erty.

©. Initiation of Judicial Review and the District

Court’s Decision.

On November 18, 2002, the Petitioner brought this

action challenging the authority of the NRCS to terminate

his eligibility based on the re-conversion of a previously

lawful conversion of the wetlands on his privately-owned

property. The Petitioner sought to have the district court

hold unlawful and set aside the USDA's termination of his

eligibility. Additionaily, the Petitioner sought to compel the

USDA to reimburse him for those USDA payments which

have been unlawfully withheld since 1999. App. B, infra,

27a.

Swampbuster provides for the lawful re-conversion of

a wetland, if the original conversion of the wetland oc-

curred prior to December 23, 1985, and the wetland

characteristics returned after that date as a result of the

lack of maintenance of drainage, the lack of management of

the lands containing the wetlands, or circumstances beyond

the control of the person. 16 U.S.C. §§ 3822(bX1XG), (bX2D)

(Supp. IV 1998) (emphasis added); and 7 C.F.R. § 12.(bX1Xii)

(1999). Both parties agree that the meaning of the phrase

“after that date,” determines whether the exemption is

applicable to the Petitioner’s wetlands and his alleged

unlawful activity. Id. at 42a; App. A, infra, 2a-4a.'

The parties cross-moved for summary judgment, and

on May 20, 2004, the district court concluded that the

phrase “after that date,” as set forth in the exemption, is

* If the Petitioner's interpretation is correct (ie., the phrase refers

to the date of the original conversion of the wetlands), then the

Petitioner is exempt from program ineligibility. However, if the USDA's

interpretation is correct, (ie., the phrase refers to the date of the

enactment of the Act, or December 23, 1985), then the Petitioner's

eligibility may be subject to termination.

ambiguous as to whether it refers to the date of the en-

actment of the Act, December 23, 1985, or the date of the

original conversion of the wetlands. Jd. at 44a. Despite the

district court’s conclusion that the USDA's interpretation

of the exemption was reasonable given the ambiguous

language within the statute, and after reviewing the

legislative history and purpose of the exemption, the

district court ultimately held that the Petitioner’s inter-

pretation of the phrase is correct, and that the Petitioner’s

wetlands, must therefore, be classified as “prior converted

wetlands,” and are exempt from the prohibitions under

Swampbuster, pursuant to 16 U.S.C. § 3822(bX2XD) (Supp.

IV 1998). Id. at 40a-47a. The district court also held that

the USDA's regulatory definition of the exemption, 7

C.F.R. § 12.2 (wetland determination (8)) (1999), which

required the land to be in production as of December 23,

1985 in order to qualify for the exemption, exceeded the

agency’s statutory authority. Jd. at 46a-47a. Accordingly,

the district court granted partial summary judgment in

favor of the Petitioner and remanded this matter to the

USDA for action not inconsistent with its opinion. Jd. at

51la-52a.”

In addition, however, the Petitioner further alleged

that the statute terminating his eligibility is a violation of

the Spending Power of the United States Constitution,

because it amounts to impermissible coercion. Id. at 36a.

Congress has conditioned the receipt of USDA-related

funding in such a manner as to leave the recipient, such as

the Petitioner herein, with no practical alternative, other

than complying with the Federal mandate. The district

* As of October 1, 2003, the USDA had withheld from the Peti-

tioner approximately $150,000 in payments or benefits for which he

was previously entitled to receive. App. B, infra, 35a.

9 -

court agreed that “the Swampbuster provisions are coer-

cive, in fact, they give the USDA a big club with which to

protect wetlands.” Jd. at 37a. Nevertheless, the district

court ultimately concluded that no constitutional provi-

sions provide an independent bar to the conditional grant

of federal funds by the USDA to the American farmer.

Ibid. Accordingly, the district court granted partial sum-

mary judgment in favor of the USDA and upheld the

provisions of Swampbuster as Constitutional. Jd. at 38a-

39a.

D. The Seventh Circuit’s Decision.

The Seventh Circuit reversed the district court’s

judgment. First, similar to the district court, the court of

appeals concluded that the language of the exemption, 16

U.S.C. $§ 3822(bX 1G), (bX2XD) (Supp. IY 1998), is ambigu-

ous. App. A, infra, 4a. Yet, the court of appeals held that the

USDA's interpretation was reasonable and entitled to

substantial deference under Chevron U.S.A. Inc. v. Natu-

ral Resources Defense Council, Inc., 467 U.S. 837 (1994).

Id. at 4a-7a. Contrary to the district court, the court of

appeals determined that the legislative history of the

Swampbuster to be irrelevant under Chevron, and more-

over, lend no support to the Petitioner’s arguments. Jbid.

Second, the court of appeals affirmed the district court and

upheld the constitutionality of the wetland conservation

provisions under South Dakota v. Dole, 483 U.S. 203

(1987). Id. at 7a-8a. For these reasons, the court of appeals

reversed the judgment of the district court. Consequently,

Horn Farms, Inc. timely files this petition for certiorari.

REASONS FOR GRANTING THE PETITION

The Seventh Circuit reached a decision in this case

which is erroneous as a matter of statutory interpretation

and constitutional law, and seriously infringes on a

farmer's privilege of unrestricted use and enjoyment of his

privately-owned property; not to mention his interest to be

free from governmental interference. Moreover, it is

apparent from the legislative history of Swampbuster, that

Congress must not have intended the purportedly broad

curtailment of private property rights that the Secretary's

interpretation has permitted. This Court should grant

review, because the circuits are seemingly split as to the

applicability of the provisions of Swampbuster to wetlands

lawfully converted prior to December 23, 1985. In addi-

tion, review is warrante? in order to clarify the limitations

of Congress’ spending power under the Constitution to

condition the receipt of federal funds upon compliance

with a federal regulatory scheme under which Congress

may, through the guise of its spending power, indirectly

regulate the use of private property that it is unable to

regulate under its constitutionally enumerated powers.

I. THE CIRCUITS ARE SPLIT OVER THE USDA’S

AUTHORITY TO TERMINATE ELIGIBILITY

BASED ON THE CONVERSION OF A WETLAND

PRIOR TO THE ENACTMENT OF SWAMP-

BUSTER IN 1985

Farmers, landowners, and other agricultural produc-

ers are entitled to consistent treatment under the provi-

sions of Swampbuster throughout the country; the fate of

their activities on the wetlands located on their property

should not turn on the fortuity of which circuit court their

land lies within. Accordingly, the need for national uni-

formity is great.

The NRCS, in this case, confirmed the Petitioner's

claims and agreed that sometime prior to 1985, the Peti-

tioner’s wetlands had been converted and supported the

production of one or more agricultural commodities. App.

B, infra, 41a; App. D, infra, 99a-100a. Even though the

USDA recognized that the Petitioner's wetlands were

previously converted prior to 1985, the NRCS nonetheless

determined that in 1998, the Petitioner unlawfully con-

verted approximately 6.2 acres of wetlands, in violation of

Swampbuster. The district court concluded, however, that

the wetlands at issue are exempt as “prior-converted

wetlands” under 16 U.S.C. § 3822(b2XD) (Supp. IV 1998),

and that the USDA's regulatory definition of the exemp-

tion, 7 C.F.R. § 12.2 (wetland determination (8)) (1999),

which required the land to be in production as of Decem-

ber 23, 1985 in order to qualify for the exemption, ex-

ceeded the agency's statutory authority. App. B, infra, 46a-

47a.

The Seventh Circuit reversed, reasoning that since

the language of the statute is in fact ambiguous, the

Secretary's interpretation was “the most sensible under-

standing of the legislation,” and entitled to “all of the

deference contemplated by Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984).” App.

A, infra, 4a-5a. Moreover, the court of appeals was per-

suaded that when “after that date” is understood to be

December 23, 1985, supra, see discussion at pp. 7-8, “the

subsection is a non-degradation clause: the legislation

protects wetlands as they actually existed on the date of

its enactment, penalizing withdrawals without attempting

to restore lands then under agricultural production.

Reading ‘that date’ to be the time of original conversion

would allow net reductions in wetlands after the legisla-

tion’s enactment/|.}” Jd. at 5a.

The circuit court’s decision stands in marked contrast

to various judgments issued by the Court of Appeals for

the Eighth Circuit and various district courts within that

circuit. The Eighth Circuit has remarked that “[a]mong

the exemptions to the provisions of Swampbuster is one

for wetlands that had been converted to agricultural

production before December 23, 1985. ... The farming of

such previously converted wetlands does not make the

farmer ineligible for benefits.” Gunn v. United States De-

partment of Agriculture, 118 F.3d 1233, 1235 (8th Cir. 1997).

While the Eighth Circuit in Gunn v. United States Depart-

ment of Agriculture did not discuss the exception at issue

herein, i.e., 16 U.S.C. § 3822(bX2XD),” the court noted that

even if a wetland was converted prior to 1985, the peti-

- tioner was authorized to maintain that drainage system

without losing benefits, so long as the previously accom-

plished drainage or manipulation is not significantly

improved upon. /d. at 1237-38.

At issue in Gunn was 160 acres of land in Iowa which

had been farmed since 1906. Jd. at 1235. Prior to 1906, the

land was wetlands and not arable. bid. In 1906, however,

the local drainage district installed tiles under the land to

drain the excess water from the land. Jbid. By 1947,

additions to the drainage system had increased the drain-

age area so that the amount of water in some years ex-

ceeded the capacity of the system, leaving parts of Gunn’s

land wet and unsuitable for farming. /bid. Finally, in 1992,

realizing that a drainage problem existed, the drainage

district installed new drainage tiles and dug an open ditch

* It bears noting that the exception at issue herein, ie, 16 U.S.C.

§ 3822(bX2KD), was not enacted by Congress until July 3, 1996;

accordingly, the Eighth Circuit could not have considered the scope of

that particular exception in Gunn, because the actions at issue occurred

in 1992.

on Gunn’s land that remedied the system’s shortcomings.

Ibid. The 1992 improvements were designed to further

degrade the wetland characteristics of the farm. Jd. at

1238.

According to the Eighth Circuit, “it is the initial

man‘pulation, not some subsequent ‘applications’ of it,

that is to be considered.” Jd. at 1236 n.3. In fact, the court

mentioned that the “initial improvement took place in

1906, and the [NRCS] told Gunn he could maintain that

drainage system without losing benefits.” Jd. at 1237.

Ultimately, the court concluded that part of the farm

encompassed “converted wetland,” but that it did not

become converted wetland until 1992. Jd. at 1238.

Moreover, in Barthel v. United States Department of

Agriculture, 181 F.3d 934 (8th Cir. 1999), the Eighth

Circuit reiterated its holding in Gunn by providing that

farmers “‘may continue to farm such wetlands ... as they

did prior to December 23, 1985. However, no action can be

taken to increase effects on the water regime beyond that

which existed on such lands’ on or before that date.”

Barthel v. United States Department of Agriculture, 181

F.3d 934, 936 (8th Cir. 1999) (emphasis in original), citing

7 C.F.R. § 12.33(a) (1992). Consequently, “[ljand meeting

{the prior converted wetland) exemption can be main-

tained as it was prior to the effective date of the Act

without loss of federal benefits.” Jbid. Again, as in Gurn,

the Eighth Circuit neld that under Swampbuster, the

farming of a wetland should be maintained at the level

that was achieved prior to the Act. Jd. at 937.

At issue in Barthel was the permissible dredging of a

drainage ditch across Barthel’s 450-acre hay meadow in

Nebraska. Jd. at 935-36. Prior to 1985, Barthel was able to

produce hay, and pasture his milk cows on the land. Jd. at

936. In 1987, the USDA denied him permission to clean

the drainage ditch which left his land completely and

permanently under water. Jd. at 936-37. Barthel con-

tended that “maintenance of the manipulation should

allow them to use the land as they did prior to the passage

of the Act.” Id. at 937. The Eighth Circuit agreed, stating

that the “agency's interpretation misses the clear focus on

the Swampbuster provisions and the implementing regu-

lations.” Ibid.

According to the Eighth Circuit, the proclaimed

purpose of Swampbuster is to preserve wetlands, or, if the

wetlands were altered, to preserve the conditions as altered.

Ibid. “The unambiguous focus of the statute and imple-

menting regulations is to maintain the status quo of the

manipulated wetlands — not the drainage ditch.” Jd. at 938

(emphasis added). Therefore, a technical determination

which produces a result contrary to the previous status

quo of the wetlands cannot stand. Ibid. “The statute and

regulations mandate that the Barthels should be able to

have the water and farming regime they had before De-

cember 23, 1985.” Ibid (emphasis added).*

The Eighth Circuit’s opinions stand in marked con-

trast to the Seventh Circuit’s decision below, because the

Eighth Circuit may have ultimately permitted the Peti-

tioner’s activities on his farmland. The Petitioner was

attempting to maintain and repair the original drainage

system on his property, and had no intention of significantly

improving upon the previously accomplished drainage.

Therefore, under the Eighth Circuit’s interpretation of the

* Importantly, the Eighth Circuit noted that at “oral argument,

counsel for the government did concede that the Barthels are entitled to

the best drainage of their land, on or before December 23, 1985, that

they can prove with reliable evidence.” Barthel v. United States

Department of Agriculture, 181 F.3d at 938 n.8 (emphasis added).

provisions of Swampbuster, the Petitioner would have

remained eligible for benefits.

For these reasons, this Court should resolve the

conflict in the lower courts by granting the petition and

addressing the important question whether the USDA

may terminate an individual’s eligibility, based on the re-

conversion of a prior lawfully converted wetland, if wet-

land characteristics have returned prior to the enactment

of Swampbuster on December 23, 1985.

II. THE COURT OF APPEALS ERRED IN HOLD-

ING THAT THE LEGISLATIVE HISTORY OF

THE SWAMPBUSTER WAS IRRELEVANT IN

UPHOLDING THE SECRETARY’S INTERPRE-

TATION OF THE STATUTE UNDER CHEVRON

In Chevron, U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984), this Court held that

considerable weight should be accorded to the agency’s

construction of a statutory scheme it was entrusted to

administer, “‘unless it appears from the statute or its

legislative history that the accommodation is not one that

Congress would have sanctioned.’” Chevron, U.S.A., Inc. v.

Natural Resources Defense Council, Inc., 467 U.S. 837, 845

(1984) (emphasis added), quoting United States v. Shimer,

367 U.S. 374, 382 (1961). Even for an agency to claim all

the deference possible under Chevron, “deference to its

statutory interpretation is called for only when the devices

of judicial construction have been tried and found to yield

no clear sense of congressional intent.” General Dynamics

Land Systems, Inc. v. Cline, 540 U.S. 581, 600 (2004),

citing Immigration and Naturalization Service v. Cardoza-

Fonseca, 480 U.S. 421, 446-48 (1987).

As set forth in greater detail above, Swampbuster

provides for the lawful re-conversion of a wetland, if the

original conversion of the wetland occurred prior to De-

cember 23, 1985, and the wetland characteristics returned

after that date as a result of the lack of maintenance of

drainage, the lack of management of the lands containing

the wetlands, or circumstances beyond the control of the

person. 16 U.S.C. §§ 3822(b\1G), (bX 2D) (Supp. IV 1998)

(emphasis added). The USDA has interpreted this exemp-

tion as applying only in those circumstances when wetland

characteristics have returned after the enactment of the

Act, or December 23, 1985. 7 C.F.R. § 12.5(b)(1)(ii) (1999);

and 7 C.F.R. § 12.2 (wetland determination (8)) (1999). In

other words, the USDA requires the land to be in produc-

tion as of December 23, 1985, in order to qualify for the

exemption. Jbid. Both the district court and the court of

appeals determined that the statutory language pertain-

ing to the implementation of this exemption is in fact

ambiguous. App. A, infra, 4a; App. B, infra, 44a.

While the district court concluded that the legislative

history of the exemption supported the Petitioner’s conten-

tion that the exemption is applicable even if wetland

characteristics returned prior to 1985, the court of appeals

reversed, reasoning that the Secretary’s interpretation is

reasonable, and therefore, the legislative history is irrele-

vant. Jd. at 5a-6a; App. B, infra, 43a-47a. Nevertheless,

the court of appeals uitimately concluded that the legisla-

tive history did not lend any support to the Petitioner’s

interpretation of the statute. Jd. at 6a-7a. Consequently,

the court of appeals erroneously disregarded the express

language and purpose of the Act, and by upholding the

Secretarys interpretation of the exemption, frustrated

Congress’ intent. As best stated by the Eighth Circuit,

“[clertainly, there is no worse statute than one misunder-

stood by those who interpret it.” Barthel v. United States

Department of Agriculture, 181 F.3d 934, 937 (8th Cir.

1999).

1. The court of appeals mischaracterized the general

purpose of the Food Security Act of 1985 as only preserv-

ing those wetlands characteristics still in existence in 1985

from agricultural production. App. A, infra, 5a. The court

of appeals cited no authority for its limited characteriza-

tion of the purpose of the statute. Indeed, the statute

expressly exempts those wetlands which were converted

before the enactment of the statute, demonstrating a clear

purpose to “grandfather” prior converted wetlands used for .

agricultural production prior to 1985. 16 U.S.C.

§§ 3822(b)(1)(A), (b)(1G), and (b\(2XD) (Supp. IV 1998);

H.R. Rep. No. 99-271, pt. 1, at 416, 419, 99th Cong. (1st

Sess. 1985), reprinted in 1985 U.S.C.C.A.N. 1103, 1520-23

(statements by Rep. Daschle that if agricultural produc-

tion occurred at any time in the past, the land would be

grandfathered as of the date of the bill’s enactment into

law). Congress expressly recognized that certain exemp-

tions were required for a reasonable and fair implementa-

tion of the provisions of Swampbuster. H.R. Rep. No. 99-

271, pt. 1, at 88, 99th Cong. (1st Sess. 1985), reprinted in

1985 U.S.C.C.A.N. 1103, 1189.

Moreover, the Food Security Act of 1985 was derived

from a desire to bolster a failing agricultural economy:

The purpose of this bill is simple. It is to provide,

as far as it can be done in legislation of this kind,

* The court of appeals misunderstood the importance of Rep.

Daschle’s statements which were contemporaneous with the enactment

of the Food Security Act of 1985. App. A, infra, 5a-6a. Even though Rep.

Daschle’s statements were made long before the enactment of the

exemption at issue herein, his statements indicate Congress’ intent to

exempt all prior converted wetlands from the provisions of Swamp-

buster. The 1996 amendments, while not contemporaneous with Rep.

Daschle’s statements, provide further evidence of Congress’ original

intent in 1985.

Borge: am

Dr GReig ets e. eas t

the basis for an economic climate in which effi-

cient American family farmers can survive the

grim squeeze that has already driven too many of

them to or close to the brink of ruin.

H.R. Rep. No. 99-271, pt. 1, at 8, 99th Cong. (Ist Sess.

1985), reprinted in 1985 U.S.C.C.A.N. 1103, 1111. It is

clear that Congress enacted the Food Security Act in an

effort to protect our Nation’s largest and most basic

industry. Jd. at 1111-12. Congress was concerned about the

implications to the national economy if segments of the

agricultural economy were permitted to collapse. Id. at

1111. The Food Security Act of 1985 addressed not only the

conservation of our Nation’s highly erodible lands and

wetlands, but established and continued significant price

support programs for producers who grow sugar, dairy,

wool, wheat, cotton, rice, peanuts, and soybeans. Id. at

1113-79.

The legislative history demonstrates that the primary

purpose of the Food Security Act of 1985 was, as the name

implies, to secure a market oriented climate for the pro-

duction of our Nation’s food and fiber by providing eco-

nomic security to our Nation’s farmers. Congress chose to

balance this effort with a conservation ethic that protects

wetlands, but not at the expense of prior farming prac-

tices. Congress made a policy decision to “grandfather”

prior converted wetlands — a policy decision which has

been subverted by a new definition promulgated by the

agency, and upheld by the court of appeals, which under-

mines the statute’s general purpose. Where the intent of

Congress is clear, as it is here, it governs. National Wild-

life Federation v. Agricultural Stabilization and Conserva-

tion Service, 955 F.2d 1199, 1204 (8th Wir. 1992), citing

Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S.

827, 837 (1990).

2. Moreover, the 1990 and 1996 amendments to the

Food Security Act did not alter the Act’s general purpose,

or provide an increased emphasis on the preservation of

wetlands. For instance, the Food, Agriculture, Conserva-

tion, and Trade Act of 1990 was enacted in order to extend

and revise agricultural support programs, to provide for

agricultural export programs, to ensure consumers an

abundance of food and fiber at reasonable prices, and to

provide for resource conservation. Pub. L. No. 101-624, 104

Stat. 3359 (November 28, 1990). The Federal Agriculture

Improvement and Reform Act of 1996 was intended to

modify the operation of certain agricultural programs.

Pub. L. No. 104-127, 110 Stat. 888 (April 4, 1996). Neither

amendment sought to undermine Congress’ initial decision

to exempt prior converted wetlands from the provisions of

Swampbuster.

3. In fact, in 1996, the prohibitions under Swamp-

buster were relaxed in order to provide greater flexibility

to farmers who lawfully converted their wetlands prior to the

enactment of the Food Security Act in 1985. The Federal

Agriculture Improvement and Reform Act of 1996 expanded

the list of statutory exemptions to agricultural program

ineligibility. Pub. L. No. 104-127, § 322(b), 110 Stat. 888, 988-

89 (April 4, 1996) (codified at 16 U.S.C. §§ 3822(bX1XG),

(bX2XD) (Supp. IV 1998)); supra, see discussion at p. 4. The

particular exemption at issue authorized the re-conversion of

a prior lawfully converted wetland, where wetland charac-

teristics returned to the site due to a lack of drainage

maintenance or circumstances beyond the control of the

property owner. 16 U.S.C. §§ 3822(bX1G), (bX2XD) (Supp.

IV 1998). This amendment, enacted in 1996, provides

additional evidence of Congress’ statutory scheme —

Congress intended all drained, dredged, filled, leveled, or

otherwise manipulated wetlands to be exempt from

agricultural production ineligibility, so long as the original

manipulation of the wetlands occurred prior to December

23, 1985.

The court of appeals upheld the USDA's contention

that the wetlands at issue herein were not “prior con-

verted wetlands” as of December 23, 1985, because wet-

land characteristics had returned to the site. The court of

appeals’ determination was erroneous for two reasons.

First and foremost, the 1996 amendments provide that

any previously converted sites, which are or have returned

to wetland characteristics, will remain exempted from

ineligibility. Second, the determination of the USDA is not

one Congress would have sanctioned, and thus, frustrates

Congress’ intent. 16 U.S.C. §§ 3822(bX1\G), (b\2XD)

(Supp. IV 1998). The USDA's determination, upheld by the

court of appeals, effectively negates the prior converted

wetland exemption that Congress clearly and unequivo-

cally granted farmers like Mr. Horn, whose land was

manipulated, converted, and farmed prior to 1985.

Ill. REVIEW BY THIS COURT IS WARRANTED

TO CLARIFY LIMITATIONS ON CONGRESS’

SPENDING POWER TO CONDITION THE RE-

CEIPT OF FEDERAL FUNDS BASED UPON

COMPELLED COMPLIANCE WITH A STATU-

TORY SCHEME

Despite the recognition that federal funds are consid-

ered a “gift” from Congress that it was under no obligation

to give, College Savings Bank v. Florida Prepaid Post

Secondary Education Expense Board, 527 U.S. 666, 686-87

(1999) and Massachusetts v. Mellon, 262 U.S. 447, 480

(1923), Congress’ spending power is not without limita-

tions. South Dakota v. Dole, 483 U.S. 203, 207 (1987); and

New York v. United States, 505 U.S. 144, 167 (1992). This

Court notably established that “in some circumstances the

financial inducement offered by Congress might be so

coercive as to pass the point at which ‘pressure turns into

compulsion.’” Jd. at 211; Steward Machine Co. v. Davis,

301 U.S. 548, 590 (1937) (noting that “the location of the

point at which pressure turns into compulsion, and ceases

to be inducement, would be a question of degree, at times,

perhaps, of fact.”). Consequently, Congress may not condi-

tion the receipt of federal funds in such a manner as to

leave the recipient with no practical alternative, other

than complying with the Federal directives. College

Savings Bank v. Florida Prepaid Post Secondary Educa-

tion Expenses Board, 527 U.S. at 687.

Review by this Court is especially warranted, because

the circuit courts, including the Seventh Circuit below,

have either declined the opportunity to develop a workable

standard for detecting unconstitutional coercion, or re-

fused to acknowledge the viability and application of the

coercion theory altogether, often characterizing it as an

“uphill battle.” App. B, infra, 37a; App. A, infra, 7a-8a;

State of Nevada v. Skinner, 884 F.2d 445, 448 (9th Cir.

1989); Oklahoma v. Schweiker, 655 F.2d 401, 414 (D.C. Cir.

1981); Mich. Dep't of State v. United States, 166 F.Supp.2d

1228, 1233-34 (W.D. Mich. 2001); Kansas v. United States,

24 FSupp.2d 1192, 1196 (D. Kan. 1998), aff’d, 214 F.3d

1196 (10th Cir. 2000); and Chemerinsky, Erwin, Protecting

the Spending Power, 4 CHAP. L. REv. 89, 103 (2001).

Clarification of Congress’ spending authority to compel

compliance with a statutory scheme is much needed, for no

other reason than the fact that the district court below

concluded that “the Swampbuster provisions are coercive,

in fact, they give the USDA a big club with which to

protect wetlands.” App. B, infra, 37a. Yet, the district court

refused to hold the provisions of Swampbuster unconstitu-

tional. Ibid.

1. Congress has conditioned the receipt of certain

farm subsidies in such a manner (i.e., the potential loss of

100% of USDA benefits) as to leave the recipient, such as

the Petitioner and others, with no practical alternative

other than complying with the regulation of their private

property in order to prevent the further loss of wetlanus

for the production of agricultural commodities. The Food

Security Act encompasses “a coercive federal regulatory

scheme under which Congress may, through the guise of

its spending power, indirectly regulate the use of private

property that it is unable to regulate under its constitu-

tionally enumerated powers.” Douglas, Patrick R., Conser-

vation or Coercion: Federal Regulation of Intrastate

Wetlands Under the Swampbuster Provisions of the Food

Security Act, 8 Mo. ENVTL. L & POL’y REV. 59, 59 (2001).

Similar to the Court’s concerns in College Savings

Bank v. Florida Prepaid Postsecondary Education Expense

Board, what Congress threatens if the farmer refuses to

agree to its conditions is not the denial of a gift or gratuity,

“but a sanction: exclusion of the [individual] from other-

wise permissible activity.” College Savings Bank v. Florida

Prepaid Postsecondary Education Expense Board, 527 U.S.

at 687; United States v. Dierckman, 201 F.3d 915, 927 (7th

Cir. 2000) (characterizing the termination of eligibility

pursuant to the Food Security Act as a “penalty” and “sanc-

tion” for improperly converting wetlands); National Wildlife

Federation v. Agricultural Stabilization and Conservation

Service, 955 F.2d 1199, 1204 (8th Cir. 1992) (sanction);

Horn Farms, Inc. v. Veneman, 319 F.Supp.2d 902, 909

(N.D. Ind. 2004) (penalty); B&D Land and Livestock, Co. v.

Veneman, 231 F.Supp.2d 895, 906 (N.D. Iowa 2002) (pen-

alty); H.R. Rep. No. 99-271, pt. 1, at 88, 99th Cong. (1st

Sess. 1985), reprinted in 1985 U.S.C.C.A.N. 1103, 1189

(sanction). Accordingly, the point of coercion is automati-

cally passed when what is attached to the refusal to abide

—

by the conditions of receipt of the funding is a penalty,

sanction, or the exclusion from otherwise lawful activity.

Ibid. The loss of 100% of eligibility in USDA-related

programs can be characterized not as the denial of a gift or

gratuity, but only as a coercive or punitive measure, which

remains attached to both the Petitioner and his private

property in perpetuity.

Its bears noting that while the farmer is forever

excluded from receiving agricultural subsidies from the

USDA for violating the provisions of Swampbuster, id. at

64a-65a, his private property is similarly subject to the

broad curtailment of certain rights and uses by the

farmer’s successors-in-interest. The production of an

agricultural commodity in a converted wetland, without

the attendant loss of agricultural subsidies, is strictly

prohibited by any successor-in-interest, even those wholly

innocent of the actual unlawful conversion. Such a deter-

mination has a significant adverse impact on the fair

market value of farmland in rural communities. Maintain-

ing sufficient productive cropland and/or forage areas on

farmland is unavoidable for the property to remain mar-

ketable for agricultural production purposes. 136 Cong.

Rec. H11029, 11345 (daily ed. Oct. 22, 1990) (statement of

Rep. De La Garza). Under such circumstances, the provi-

sions of Swampbuster obviously were not intended to be a

condition on the receipt of a gratuitous benefit, but rather,

were intended to penalize individuals for the unlawful

conversion of wetlands.

Recipients of USDA-related funding are forced to

choose between two equally coercive alternatives: the

recipient must either submit to Federal regulation of their

private property by opting not to use wetlands on their

property for agricultural use, even those that were prior

converted, or lose 100% of their USDA benefits. Under

Swampbuster, the range of alternatives is unacceptably

narrow. New York v. United States, 505 U.S. 144, 176-77

(1992).

2. In United States v. Butler, 297 U.S. 1 (1936),

certain provisions of the Agricultural Adjustment Act of

1933 were determined to exceed Congress’s enumerated

authority under the Constitution. United States v. Butler,

297 U.S. 1, 62-78 (1936). Even though the Court held the

challenged legislation invalid as a violation of the Tenth

Amendment, rather than the Spending Clause, the Court

also determined that the challenged legislation constituted

impermissible coercion under the Spending Clause. Jd. at 70-

74. Importantly, the Court stated that “[t]here is an obvious

difference between a statute stating the conditions upon

which moneys shall be expended and one effective only upon

assumption of a contractual obligation to submit to a regula-

tion which otherwise could not be enforced.” Jd. at 73.°

Swampbuster clearly involves the latter and not the former.

The Court in Butler colorfully defined “impermissible

coercion” as “an option to forego a privilege which may be

vital to his livelihood or submit to a requirement which

may constitute an intolerable burden.” United States v.

Butler, 297 U.S. at 72, quoting Frost v. Railroad Commis-

sion of the State of California, 271 U.S. 583, 593 (1926).’

* In Solid Waste Agency of Northern Cook County v. United States

Army Corps of Engineers, 531 U.S. 159, 171-74 (2001), this Court held

that federal authority over wholly intrastate wetlands raises “signifi-

cant constitutional questions.”

” In Frost, Justice Sutherland explained that:

It would be a palpable incongruity to strike down an act of

state legislation which, by words of express divestment,

seeks to strip the citizen of rights guaranteed by the federal

Constitution, but to uphold an act by which the same result

is accomplished under the guise of a surrender of a right in

exchange for a valuable privilege which the state threatens

otherwise to withhold.

(Continued on following page)

“While Butler’s authority is questionable insofar as it

assumes that Congress has no regulatory power over farm

production, its discussion of the spending power and its

description of both the power’s breadth and its limitations

remain sound.” South Dakota v. Dole, 483 U.S. 203, 216-17

(1987) (O’Connor, J., dissenting). In fact, Justice O’Connor

has interpreted the Spending Clause to afford Congress no

authority “to impose requirements on a grant that go

beyond specifying how the money should be spent,” unless

the condition “falls within one of Congress’ delegated

regulatory powers.” Jd. at 216 (citation omitted).

With regard to the termination of agricultural benefits

in Butler, the Court determined that the processing tax

coerced farmers in complying with an acreage reduction

scheme. United States v. Butler, 297 U.S. at 69-73. In

support of this conclusion, the Court stated that:

The regulation is not in fact voluntary. The

farmer, of course, may refuse to comply, but the

price of such refusal is the loss of benefits. The

amount offered is intended to be sufficient to ex-

ert pressure on him to agree to the proposed

regulation. The power to confer or withhold

unlimited benefits is the power to coerce or de-

stroy. If the cotton grower elects not to accept the

benefits, he will receive less for his crops; those

who receive payments will be able to undersell

him. The result may well to financial ruin....

This is coercion by economic pressure. The as-

serted power of choice is illusory.

United States v. Butler, 297 U.S. at 70-71 (emphasis

added). Similar to the Court’s opinion in Butler. pertaining to

the Agricultural Adjustment Act of 1933, and Justice

Frost v. Railroad Commission of the State of California, 271 U.S. 583,

593 (1926).

O’Connor’s dissenting opinion in South Dakota v. Dole,

pertaining to the National Minimum Drinking Age Amend-

ment, the provisions of Swampbuster clearly encompass an

exercise of regulatory, not spending, authority. Swampbuster

does not create a spending program; it merely imposes a

penalty — the loss of federal funding.

The wetland conservation provisions are impermissi-

bly coercive, because the potential loss of an individual’s

entire eligibility is intended to be sufficient to exert

pressure on him to agree to the proposed regulation of his

private property.’ The Federal Government has, in an act

more akin to forbidden regulation than to permissible

condition, supplanted with its own policy preferences the

considered judgments of the States, such as to how best to

preserve the functions and values of wetlands located

entirely within their respective borders.

3. It is not surprising that in the aftermath of South

Dakota v. Dole, lower courts have been called upon to limit

the spending authority of Congress based upon the coer-

cion theory. The courts of appeals have disagreed whether

the coercion theory remains a viable means of limiting

Congress’ spending power. The United States Court of

Appeals for the Eighth Circuit, in Bradley v. Arkansas

Department of Education, 189 F.3d 745 (8th Cir. 1999), held

that the section of the Federal Rehabilitation Act requiring

Arkansas to waive its Eleventh Amendment immunity to all

claims arising under the Rehabilitation Act, if it receives

Federal funding, amounted to impermissible coercion.

Bradley v. Arkansas Department of Education, 189 F.3d

* To be sure, the wetland conservation provisions constitute far

more than a “temptation” or “mild encouragement.” The wetland

conservation provisions are impermissibly coercive, because they

authorize 100% ineligibility in certain USDA-related programs.

745, 757-58 (8th Cir. 1999). The Eighth Circuit concluded

that the “condition § 504 imposes on recipients of federal

funds exceeds the ordinary quid pro quo involved in a

proper exercise of Congress’s spending power.” Ibid.

(citation omitted). However, the Eighth Circuit panel’s

decision was reversed on rehearing en banc. Jim C. v.

United States, 235 F.3d 1079 (8th Cir. 2000) (en banc). The

court in Jim C. v. United States, was unpersuaded that the

loss of twelve percent in education-related funding com-

pelled Arkansas’ choice. Jd. at 1082.

Similarly, other courts have held that the loss of Federal

funding at issue, on the grounds that the recipients refused

to fulfill their Federal obligations in some insubstantial

respect, did not deprive the recipients of any meaningful

choice or amount to impermissible coercion. Doe v. State of

Nebraska, 345 F.3d 593, 598-600 (8th Cir. 2003); Kansas v.

United States, 214 F.3d at 1201-02; State of California v.

United States, 104 F.3d 1086, 1092 (9th Cir. 1997); and State

of Nevada v. Skinner, 884 F.2d at 449-50.

Importantly, however, “while most courts faced with

the question have effectively abandoned any real effort to

apply the coercion theory,” some courts do not view the

coercion theory with such suspicion. West Virginia v.

United States Department of Health and Human Services,

289 F.3d 281, 287-91 (4th Cir. 2002); Commonwealth of

Virginia, Department of Education v. Riley, 106 F.3d 559,

561 (4th Cir. 1997) (en banc) (stating that the Federal

Government’s withholding from the Commonwealth of

100% of an annual special education grant, because of the

Commonwealth’s failure to abide by certain conditions,

“resembles impermissible coercion.”); and United States v.

Sabri, 183 F.Supp.2d 1145, 1156 (D. Minn. 2002) (conclud-

ing that two local governments’ decisions to either abide by

certain funding conditions, or forego approximately

99.97% and 99.96% of their federal funds, respectively,

surely is “so coercive as to pass the point at which pres-

sure turns into compulsion.”).” At the very least, the

coercion theory remains viable in the Fourth Circuit. Jd. at

291. According to the Fourth Circuit, “federal statutes that

threaten the loss of an entire block of federal funds upon a

relatively minor failing by a [recipient] are constitutionally

suspect.” Id.”

Had the Petitioner’s wetlands been located within the

Fourth Circuit, the result in this case may certainly have

been different. The Fourth Circuit may have brought more

credibility to the Petitioner’s argument that the wetland

conservation provisions are impermissibly coercive,

because the Food Security Act, as amended, confers the

power to withhold unlimited benefits from agricultural

producers unwilling or unable to comply with the wetland

conservation provisions. This Court should not tolerate a

circuit split on an issue as important as the scope and

limitation of Congress’ spending authority.

4. Furthermore, each of the above cases involve

conditional Federal spending which arguably interferes

* The court’s decision in United States v. Sabri was reversed on

appeal, because the Eighth Circuit determined that the statute at issue

did not actually condition the receipt of federal funds. United States v.

Sabri, 326 F.3d 937, 945-48 (8th Cir. 2003). The Eighth Circuit con-

cluded, therefore, that since the statute did not qualify as a conditional-

grant statute, the spending limitations set forth in South Dakota v.

Dole did not apply. Id. at 948.

” The Fourth Circuit, in West Virginia v. United States Department

of Health and Human Services, ultimately held that the Federal

requirements that states adopt an estate recovery program, or lose all

or part of their Federal Medicaid reimbursements, were not impermis-

sibly coercive, because the government threatened to withhold “all or

part” of West Virginia’s Federal financial participation in the State’s

Medicaid Program. West Virginia v. United States Department of Health

and Human Services, 289 F.3d at 291-92.

with a state’s autonomy. In this case, the Petitioner does

not represent a sovereign community, but rather is an

individual. A state possesses political powers, particularly

the power to tax, that “help ensure the federal government

does not ‘coerce’ the state through economic ‘encourage-

ment.’” A.W. v. The Jersey City Public Schools, 341 F.3d

234, 243-44 (3rd Cir. 2003), quoting Koslow v. Common-

wealth of Pennsylvania, 302 F.3d 161, 174 (8rd Cir. 2002).

“An individual citizen, in contrast, lacks these formidable

institutional resources.” Koslow v. Commonwealth of

Pennsylvania, 302 F.3d at 174. An individual’s refusal of

conditional money is an unsatisfactory choice “in light of

growing depen@ence of recipients on federal money.”

Zietlow, Rebecca E., Federalism’s Paradox: The Spending

Power and Waiver of Sovereign Immunity, 37 WAKE

ForEsT L. REv. 141, 172 n.206 (2002).

Consequently, “the states are sufficiently strong to

resist the blandishments of federal money, while private

individuals and institutions tend not to be.” Baker, Lynn A.,

Conditional Federal Spending After Lopez, 95 COLUM. L.

Rev. 1911, 1957 n.16 (1995) (citation omitted). “[Plolitical

self-help by [individuals] is less feasible when majorities seek

to curtail civil liberties than when Congress goes beyond its

enumerated powers or interferes with the autonomy of state

or local government.” Jbid. Moreover, the Government “may

not deny a benefit to a person on a basis that infringes his

constitutionally protected interests.” Perry v. Sindermann,

408 U.S. 593, 597 (1972).”

“ In addition to their private property rights, individuals have a

constitutionally protected property interest in statutory entitlements,

such as agricultural subsidies, for persons qualified to receive them.

Atkins v. Parker, 472 U.S. 115, 128 (1985); Cleveland Board of Educa-

tion v. Loudermill, 470 U.S. 532, 538 (1985); Mathews v. Eldridge, 424

U.S. 319, 332 (1976); Board of Regents of State Colleges v. Roth, 408

(Continued on following page)

5. Finally, it is appropriate to resolve the issue at

this time, because the Seventh Circuit’s refusal to studi-

ously consider these arguments renders meaningless this

Court’s acknowledgment that a person has the right to be

free from unauthorized actions of government officials

which substantially impair his or her property rights.

Greene v. McElroy, 360 U.S. 474, 492-93 (1959). If the

right to unrestricted use and enjoyment of one’s property,

and the right to be free from governmental interference, are

in fact private interests of historic and continuing impor-

tance, United States v. James Daniel Good Real Property,

510 U.S. 43, 53-54 (1993), then the Petitioner is entitled to a

more exacting scrutiny of Congress’ encroachment into the

Petitioner’s “privilege of use,” than that provided by either

the district court or the court of appeals.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

KAREN BUDD-FALEN

Counsel of Record

BRANDON L. JENSEN

BUDD-FALEN LAW OFFICES, LLC

300 East 18th Street

Post Office Box 346

Cheyenne, Wyoming 82001

(307) 632-5105

Counsel for Petitioner

April 2005

U.S. 564, 577-78 (1972); and Goldberg v. Kelly, 397 U.S. 254, 262 n.8

(1970).

SUPREME COURT APPENDIX

Page

Appendix A (7th Circuit Decision)........... saadadiiivnendiltidlevaunes la

397 F.3d 472 (7th Cir. 2005)

Appendix B (District Court Decision).....................:c00008 12a

319 F.Supp.2d 902 (N.D. Ind. 2004)

Appendix C (Administrative Decisions)

NRCS Preliminary Technical Determination............. 53a