VIDEO: LaMoure, N.D., farmer overturns 2009 Swampbuster accusation
LAMOURE, N.D. -- Leonard Peterson wants farmers to know that if they're wrongly accused of a Swampbuster, a national law prohibiting farm program payments if farmers drain wetlands to plant crops, they might be able to win in court.
LAMOURE, N.D. - Leonard Peterson wants farmers to know that if they’re wrongly accused of a Swampbuster, a national law prohibiting farm program payments if farmers drain wetlands to plant crops, they might be able to win in court.
Peterson was accused of violating the law in 2009, and after two unsuccessful national administrative appeals, he took the case to federal court.
In the end, the court ruled U.S. Department of Agriculture’s Natural Resources Conservation Service had improperly denied him benefits for converting a wetland. U.S. District Judge Ralph Erickson, in Fargo, N.D., said there was “insufficient evidence from which a fact-finder could conclude” that Peterson’s scraping of field drains led to an increase in production of crops or “had the effect of making the production of an agricultural commodity possible.”
At most, Erickson said, the manipulations “simply allowed the farmer to traverse the wetland portions of the property without damaging farm equipment.”
The government had collected $434,443 from Peterson through checks or set-offs in payments he’d received they said he wasn’t eligible for, because of the alleged conversion of wetlands. In addition, they withheld at least $135,959 in payments to which he was entitled.
Eventually, Peterson received all of his money. The last checks came to him in late 2015.
While under appeal, the federal government required that Peterson pay interest on any money they had been “overpaid” during the period the alleged infractions covered. When USDA reimbursed him for any money he was ultimately owed, their interest payments were calculated only from 30 days after Erickson’s decision.
A wet period Peterson, 57, farms on the east edge of Grand Rapids, Minn., population 10. He and his sons, Dustin and Cody, farm together but are individual entities for USDA purposes.
Leonard says his legal troubles started in August 2009, but his water problems started before that.
In 2007 and 2008, with the 100-plus inches of snow and the 2- to 4-inch rains the Peterson land received that summer, the water ran down the hill and created washouts across a field the Petersons couldn’t safely cross with their machinery.
“I broke a $5,000 GPS globe off the sprayer hitting one of them in 2009,” Peterson recalls. “That’s when I figured we have to do something about this.”
He contacted LaMoure County NRCs District Conservationist Darin Hirschkorn. He asked Hirschkorn if the Petersons could “pull the shoulders off” these washouts, so they could cross them with machinery. He says Hirschkorn initially said they could, but they could go no deeper than what the washouts are.
“This quarter was farmed in three different fields because we couldn’t cross the washouts,” Peterson says. “In July, after we harvested the field of winter wheat, I talked to him again. He said he’d forgot (to come out), I think it was. But he told us we could pull the shoulders off.”
Peterson hired a neighbor, Bruce Shockman, who had a laser device on his scraper, to go no deeper than the bottom of the washout. There were places where the washout was deeper than the grade, so the Petersons filled some of those spots. Even with Hirschkorn’s verbal approvals, Shockman was worried about inadvertently doing something wrong and being turned in for a Swampbuster violation. So he also contacted Hirschkorn to make sure his actions were legal.
On Aug. 18, 2009, Shockman started working with Cody to smooth the edges on the washout. Within an hour, Hirschkorn appeared at the scene.
The ‘OK’ Concerned about Hirschkorn’s presence, Cody and Bruce called Leonard. Leonard, who was traveling in Iowa, told them to speak to Hirschkorn. “But as we went forward in the tractors to talk to him, he started driving away,” Cody recalls.
Shockman, who was a friend of Hirschkorn’s, called him. Shockman reported to Cody that Hirschkorn saw nothing wrong with what they were doing, and that’s why he drove away. Meanwhile, Leonard told them to cease further work until he could talk to Hirschkorn at length. The next day, he spoke to Hirschkorn and got the OK to proceed. “He told me twice, we were doing nothing wrong,” Leonard says.
They completed the work the following day and planted winter wheat in late September.
According to the record, on Nov. 30, 2009, Peterson was notified the NRCS received a report of a potential wetland violation.
On Dec. 2, 2009, NRCS employees visited the farm to start a compliance review. Peterson told them they had to leave when he discovered they’d dug more than 25 holes in his winter wheat field, and to come back after harvest. “It looked like pocket gophers all over the field,” he recalls. “I asked them to leave. I didn’t appreciate them digging holes in my crop, so that’s when they left.”
In the NADs In September 2010, NRCS employees performed an additional on-site inspection.
On Oct. 18, 2010, the NRCS issued a preliminary wetland determination, which became final 30 days later.
Leonard received a letter from USDA stating he had to pay back payments from 2009, because he had denied access. “Anybody else who goes out into a seeded crop gets in trouble, except them,” he says.
Soon, Peterson hired Beth Baumstark, who has experience with USDA. Baumstark Braaten Law Partners filed a county appeal and eventually went to the National Appeals Division.
NRCS used aerial photographic evidence to allege that Peterson had manipulated a number of wetlands, starting in 2006, and then in 2009.
Peterson hired Frank Beaver of GeoDynamics Inc. in Grand Forks, N.D. With a doctorate in geology and a master’s degree in geological engineering, Beaver conducted a field investigation and submitted photographs taken nine days before the hearing, showing the wetland was operating as it had for the past ten years. A photo from 2011 showed the water reached the same weed outline it had in 2006, even though they said Shockman’s work had drained it.
Rod Dahl, an NRCS state appeals specialist in North Dakota, showed aerial photos in 2006, but photos from 2007 and 2008 were unavailable as a result of clouds or other weather problems.
David Brecker, an NRCS resource soil scientist, said the Peterson’s land “cannot wash, will not wash” because of the soil type and land slope. Mark Anderson, another NRCS state resource conservationist, testified he’d found “fill,” in the wetland that was 4 inches deep, but he couldn’t say how wide or how long the fill was.
In Aug. 18, 2011, Peterson lost his first NAD appeal. A hearing officer who came to LaMoure agreed with the NRCS that Peterson had illegally “converted” a wetland by the alteration of a drain.
On June 18, 2012, he lost a second time, this time to director of the NAD.
Federal court On May 23, 2013, the Petersons filed a federal lawsuit against the NRCS in U.S. District Court in Fargo.
On Sept. 26, 2014, U.S. District Judge Ralph Erickson agreed with the Petersons, overturning the NRCS decision. Erickson questioned NRCS methods, saying the evidence wasn’t substantial in 2006. The judge said the work Peterson did in 2009 didn’t make it possible for farming because the wetlands were still there. All it did was make it possible to cross it, which is what Leonard said was his intended purpose.
The NRCS filed a notice to appeal the case to the Eighth Circuit Court of Appeals, based in St. Louis, Mo. On Feb. 13, 2015, NRCS filed a motion to dismiss their appeal, without explanation.
“I would surmise they thought they didn’t have a case they were confident in,” Braaten says. “They may have been worried about the precedent it would set.”
The court said even though the Petersons’ work might have affected the ponding of water, the NRCS had misapplied the rules and failed to prove the completed work was for production of an agricultural product. The court said the so-called Swampbuster provisions are designed to prevent draining, dredging or filling a wetland for production of an agricultural product.
‘I’ll show you’ Baumstark and Braaten in 2015 applied for attorney fees through the Equal Access to Justice Act. The NRCS argued Leonard should be considered an “individual” and not eligible because his net worth exceeded a $2 million cap. Baumstark successfully argued he was instead a sole proprietor of an unincorporated business - eligible for a $7 million cap.
Baumstark says other clients have been denied attorney fees for similar reasoning, so the decision “opens up the possibility for fees under the EAJA to a large number of farmers who had previously been denied fees when treated as an individual.”
Leonard thinks he knows why the government pursued the Swampbuster case. “They were on an ‘I’ll show you’ mission, because I’d kicked them out of my field,” he says. “They were going to show me that you do not do that to them.”
The Petersons say the case has soured their opinion about the government works.
“I don’t believe a blankity blank word the government says,” Leonard says.
He wrote numerous letters to politicians and government officials, up to Secretary of Agriculture Tom Vilsack, asking for their help. He dealt with aides who told him “Washington” wouldn’t let them intervene.
“These politicians did absolutely nothing,” he says. “I didn’t hear a response from any of them, really. And I’ve decided we don’t need politicians running this country, we need business people.”