GRAND FORKS, N.D. - The federal lawsuit between the U.S. government and LaMoure, N.D., farmer Leonard Peterson has been covered extensively in Agweek. The case is fascinating. For many farmers, the win by Peterson over the Natural Resources Conservation Service is an inspiring victory for David over Goliath.
In recent years, there has been a striking increase in the size and scope of the federal government’s authority over farmers. Many farmers choose not to fight the government because of the exorbitant cost in money, time and effort. Attorney fees can be staggering, and there is no guarantee of the outcome when a farmer sues the federal government.
The Peterson case illustrates some legal peculiarities that are common to every case between a farmer and the federal government. The first example is the doctrine of “estoppel,” also known as detrimental reliance.
In a typical legal squabble, the doctrine of estoppel is a defense that can be used by someone who detrimentally relies upon the word of another person.
In the Peterson case, he was accused of wrongfully draining wetlands. In order to drain a wetland, or even to clean a drain, a farmer must have permission from the NRCS. He did seek and receive permission from the local NRCS to do so. He was verbally told such drainage was permissible.
Accordingly, he hired an excavator with sophisticated equipment and experience to carefully perform the permitted drainage. Then, a short time after the drainage was performed, the NRCS changed its tune, notifying Peterson he had violated Swampbuster prohibitions against unpermitted drainage.
Now, in a case not involving the U.S. government, Peterson might have been able to offer a defense of estoppel, by asserting that he was only relying upon the word of the U.S. Department of Agriculture employee who told him he could go ahead and perform the drainage.
But it is well settled law that estoppel is not a defense against the USDA or any other governmental agency. If you rely upon the spoken word of a government employee, you do so at your own peril. This strange legal principle seems unfair, but as one of my law professor’s used to say “Mr. Welte, you’re in a court of law, not a court of fair.”
The second hurdle in the Peterson case is the doctrine of “exhaustion of administrative remedies.” In the Peterson case, he had an initial administrative hearing with USDA, and then filed a county appeal. Eventually, he ended up in USDA’s National Appeals Division.
All in all, there were more than five years between the time Peterson started his drainage and the time he finally won his case. Besides being deprived of over $570,000.00 of farm program payments to which he was entitled, he also had the financial responsibility of attorney’s fees, and also his time.
Agweek readers might be wondering why Peterson didn’t avoid all of the administrative appeals and just sue USDA. The reason is he had good legal counsel, who knew that the doctrine of exhaustion of administrative remedies requires a litigant against USDA to exhaust all possible administrative appeals - in other words, the appeals within USDA - before initiating a suit against the federal government. If the farmer doesn’t exhaust those appeals, the government can have the case dismissed as a matter of law, because of the doctrine of exhaustion of administrative remedies. This is true even if it costs the farmer hundreds of thousands of dollars, in addition to his time and resources.
Between the Clean Water Act, the Clean Air Act, Swampbuster and other EPA edicts, there have been many recent cases of the federal government flexing its muscle to the detriment of the farmers it purports to help. The Peterson case shows what can happen when a farmer gets good legal counsel and remains firm in his resolve.
Editor’s note: Welte is an attorney with the Vogel Law Firm in Grand Forks, N.D., and a small grains farmer in Grand Forks County.
