Very interesting case, which includes the nugget that FSA altered its guidance (scroll down for excerpt) to conform with what a decision-maker said to justify the decision reversed here, when the Sixth Circuit Court of Appeals -- on April Fool's Day, no less -- slammed the Agriculture Department's treatment of former Rep. Nick Smith (R-Mich.), who lost his farm benefits after trying to fix a drainage tile. That's a very abbreviated version, but let the Sixth Circuit tell it:
This complicated case only involves a 2.24-acre parcel of land. But Smith contends, and we have no reason to doubt, that this case has ramifications for thousands of corn and soybean farmers. In January 2009, USDA signed a mediation agreement with Smith, permitting him to plant the parcel in the spring and cut down trees so long as Smith did not remove stumps. USDA has never argued that Smith intentionally violated this agreement. Nonetheless, USDA has permanently deprived Smith of program benefits and forced him to navigate a bureaucratic labyrinth. All the while, USDA has demonstrated a disregard for its own regulations and insisted that Smith mitigate his land when the relief he seeks is not based on regulations requiring mitigation.
At oral argument, USDA stated that “the fact that [Smith] would not come to the mitigation or restoration table colored the reaction of the agency.” The fact that Smith’s stance on mitigation may have “colored” the agency’s relationship with him does not mean that USDA is entitled to ignore the law.
We defer to USDA’s interpretation of the prior-converted wetland exemption in 16 U.S.C. § 3822(b)(2)(D). But because NRCS did not consider Smith’s minimal-effect evidence, as the applicable regulations contemplate that NRCS must do, we remand on this issue.
We also remand to FSA for the agency to consider Smith’s penalty-reduction request in accordance with law. On remand, FSA may not rely on its new guidance, whether or not crafted specifically for the purposes of this litigation. We, therefore, REVERSE the judgment of the district court and REMAND with instructions to remand to the respective agencies for further proceedings in accordance with this opinion.