OPINION & ORDER
MICHAEL R. BARRETT, District Judge.
This matter is before the Court on the Motion for Summary Judgment filed by Plaintiff Cardinal Land Conservancy, Inc. (Docs. 37, 40, 41) and the Motion for Summary Judgment filed by Defendants United States Department of Agriculture; Secretary, United States Department of Agriculture; National Appeals Division; Director, National Appeals Division; National Resources Conservation Service; Acting Chief, Natural Resources Conservation Service; State Conservationist, Natural Resources Conservation Service; and Commodity Credit Corporation (collectively, "Federal Defendants") (Docs. 38, 39).
I. BACKGROUND
a. The Parties
Plaintiff is a non-profit land trust headquartered in Milford, Ohio, that helps preserve natural land and farmland in Southwestern Ohio.
Defendant United States Department of Agriculture ("USDA") is a federal executive department made up of federal agencies.
One of the assistance programs that Defendant NRCS implements is called the Agricultural Conservation Easement
b. 2015-2016
On September 18, 2015, via letter and in response to Plaintiff's application, Defendant NRCS offered Plaintiff enrollment of the Parcels into the Agricultural Conservation Easement Program for an agricultural land easement. (Doc. 29-2 PageID 637). Defendant NRCS instructed Plaintiff to return two signed documents, one titled "Notice of Grant and Agreement Award" and another titled "Cooperative Agreement," to move forward on the application. (Id.) Defendant NRCS noted that Plaintiff's "easement grantees must provide clear title and written, recordable right of access to the easement area" and that "[t]his may require obtaining subordination agreements from a bank or other lending institution for any debts that may encumber the property." (Id.)
On September 21, 2015, Plaintiff, Defendant NRCS, and Defendant Ohio Department of Agriculture entered into a 3-year Cooperative Agreement for the purchase of the agricultural land easement to protect the agricultural use of Parcels. (Id. PageID 641-51). Pursuant to the Cooperative Agreement, Defendant NRCS agreed to provide Plaintiff a $385,000.00 grant—that was to be combined with $171,542.00 in funding from Defendant Ohio Department of Agriculture—that would be used to purchase the agricultural land easement. (Id.) Pursuant to the Cooperative Agreement, Plaintiff agreed to "ensure that the title to the lands or interests therein will be unencumbered or that outstanding or reserved interests are subordinated to the agricultural land easement." (Id. PageID 646).
c. 2016-2017
On March 23, 2016, Attorney G. Robert Hines, Plaintiff's title agent, provided a title opinion letter—addressed to representatives for Defendant NRCS and Defendant Ohio Department of Agriculture and carbon copying Plaintiff's representative—that sets forth the state of the title for the Parcels. (Id. PageID 703-06); see (Doc. 29-3 PageID 840-41). Attorney Hines explained that a Commitment of Title Insurance would issue, in the name of Defendant Ohio Department of Agriculture and the amount of $171,542.00, within 14 days of the date of that letter. (Doc. 29-2 PageID 703). Attorney Hines found that the fee simple title to the Parcels is vested in Carriage House Farm. (Id. PageID 705). He then found that the Parcels are subject to certain exceptions including, inter alia, flowage easements in favor of the United States. (Id.) The title insurance commitment, accordingly, listed those flowage easements as exceptions to the title insurance coverage. (Id. PageID 703 — Doc. 29-3 PageID 770-824, 827-29). Attorney Hines opined that, subject to his findings regarding the certain exceptions, the title to the Parcels is good and marketable. (Doc. 29-2 PageID 706).
The flowage easements in favor of the United States are specifically in favor of the United States Army Corps of Engineers ("USACE"), and are associated with the operation of the Markland Locks and Dam on the Ohio River. (Id. PageID 740-73). The flowage easements allow the USACE to permanently flood the land on the Parcels that is below elevation 456 feet Mean Sea Level ("MSL"); allow the USACE to occasionally flood the land on the Parcels that is above elevation 456 feet MSL; allow the USACE to clear and remove any brush, debris, and natural obstruction that is below elevation 463 feet MSL; and prohibit the construction of any structure on the land without written approval of a USACE representative. (Id.)
In August 2016, one of Defendant NRCS's two primary representatives on the Parcels' project emailed the other Defendant NRCS primary representative on the project regarding the title opinion letter. (Doc. 29-3 PageID 831-32). She stated that she read the USACE flowage easements to mean that the USACE could permanently flood any land on the Parcels that is below elevation 500 feet, and questioned whether NRCS should request a subordination before proceeding with the agricultural land easement on the Parcels. (Id.)
In September 2016, via email, Defendant NRCS's two primary representatives project continued to question whether NRCS should proceed with project in light of the USACE flowage easements. (Id.) The two representatives first questioned whether Parcels are already protected due to the USACE flowage easements, as the easements prohibit construction of infrastructure on the land. (Id.) The representatives next questioned whether the USACE flowage easements would permit long-term agricultural protection on the Parcels, as the easements permit permanent flooding on a large portion of the land. (Id.) One representative stated that, based on her review of a map
d. January 2017-July 18, 2017
On April 26, 2017, Attorney Hines—in an email to, inter alia, the primary representatives working on the Parcels' project for Plaintiff, Defendant NRCS, and Defendant Ohio Department of Agriculture—explained that the USACE has had flowage easements up and down the Ohio River, and all of the rivers flowing into it, since the construction of the Markland Dam in 1964. (Id. PageID 838-39). He explained that the flowage easements shield the USACE from liability for claims by land owners whose property abuts the Ohio River and the Great Miami River for any flooding that results from closing the dam gates. (Id.) He opined that the USACE would never consider a request for a release or subordination of the flowage easements. (Id.)
Later that day, a Defendant NRCS employee—who was not on Attorney Hine's earlier email, is not one of two NRCS primary representatives on the Parcels' project, and who is an NRCS realty specialist who works for an easement support services team— sent an email to, inter alia, Attorney Hines and the primary representatives on the Parcels' project for Plaintiff, Defendant NRCS, and Defendant Ohio Department of Agriculture. (Id. PageID 845-46). In it, the Defendant NRCS employee explained that NRCS did not require a subordination for the USACE flowage easements, and he did not foresee the flowage easements being an issue for NRCS to move forward on the Parcel's enrollment in NRCS's Agricultural Conservation Easement Program. (Id.)
However, in an April 27, 2017 email from one of Defendant NRCS's primary representatives to Defendant Ohio Department of Agriculture's primary representative, NRCS's primary representative indicated that NRCS remained uneasy with the USACE flowage easements and noted that, in the past, NRCS had cut similar easements out, as the land is already protected. (Id. PageID 838).
On May 15, 2017, via email, one of Defendant NRCS's primary representatives asked Plaintiff's primary representative to provide Defendant NRCS with a map directly from the USACE that specifically shows the permanent and temporary pool lines found in the USACE flowage easement language. (Id. PageID 844-45). Defendant NRCS explained that it needed this map to make its final decision regarding enrolling the Parcels in the Agricultural Conservation Easement Program. (Id.) One week later, via email, Plaintiff's primary representative forwarded maps obtained from the USACE to, inter alia, one of Defendant NRCS's primary representatives. (Id. PageID 834).
On June 6, 2017, via email, one of Defendant NRCS's primary representatives informed Plaintiff's primary representative that, unless Plaintiff can obtain a subordination or release of the USACE flowage easements, Defendant NRCS will not fund the project or enroll the Parcels in the Agricultural Conservation Easement Program. (Id. PageID 847).
On June 12, 2017, Plaintiff's primary representative emailed, inter alia, one of Defendant NRCS's primary representatives and Defendant Ohio Department of Agriculture's primary representative. (Id. PageID 849). Plaintiff's representative reiterated the USACE easement language that permits permanent flooding on the land that is below elevation 456 feet MSL; attached a different map of the Parcels, that includes contour lines from Hamilton County Cincinnati Area Geographic Information Systems,
On June 14, 2017, Plaintiff's primary representative emailed, inter alia, Defendant NRCS's two primary representatives and explained that there might be some confusion regarding what the forwarded maps from the USACE portrayed. (Id. PageID 852). Plaintiff's representative explained that he followed up with the USACE about the maps and the USACE was unable to tell him where the elevation lines were located on the map because the USACE did not have the data to determine contour lines. (Id.) He clarified that the USACE maps did not specifically show the distinct permanent and temporary pool lines of the USACE flowage easements, and that the USACE would not supply such a differentiating map without first physically surveying the land.
In a July 11, 2017 email from Defendant Ohio Department of Agriculture's primary representative to Plaintiff's primary representative and one of Defendant NRCS's primary representatives, Defendant Ohio Department of Agriculture informed the parties that it would move forward with its $171,542.00 portion of the funding on the Parcels' project despite the USACE's flowage easements and NRCS's hesitation. (Id. PageID 853).
e. July 19, 2017 ineligibility determination
In a July 19, 2017 letter—that appears to have been emailed to Plaintiff on August 24, 2017—Defendant NRCS informed
f. January 2018 Administrative Judge decision
Plaintiff timely sought administrative review of Defendant NRCS's ineligibility determination,
First, the Administrative Judge acknowledged Plaintiff's responsibility to provide clear title to the land offered for enrollment into the Agricultural Conservation Easement Program and that the USACE confirmed that Plaintiff had not requested a waiver of the flowage easements. (Id. PageID 369).
Second, the Administrative Judge determined that the USACE flowage easements do not already protect the Parcels because, although the easements prohibit construction of shelter on the land, the easements do not prohibit sand and gravel mining. (Id. PageID 366). He found that agriculture and mining are the only two possible uses of the Parcels in light of their location on a flood plain. (Id. PageID 362). He explained that the Parcels have been valued at $1.5MM for sand and gravel mining,
Third, the Administrative Judge determined that Defendant NRCS's concern about the USACE flowage easements' ambiguity is misplaced. (Id. PageID 367). He found that that the USACE flowage easements do not apply to the entire acreage of the Parcels. (Id. PageID 361). He found that the USACE maps are aerial images with the flowage easements outlined in red, but do not indicate any elevation points or contain a legend. (Id. PageID 363). He explained that the USACE clarified that the flowage easements outlined in red show the land covered by both the permanent and temporary flooding portions of the USACE's flowage easements, and that the USACE could not clarify any elevation points on the maps without a survey. (Id.)
He then found the Cincinnati Area Geographic Information Systems map to be more credible.
In sum, and largely based on the Cincinnati Area Geographic Information Systems map and Parcels' occasional flooding history, the Administrative Judge found that Defendant NRCS incorrectly interpreted the USACE flowage easements, erroneously concluded that the USACE was likely to exercise their rights under those easements, and incorrectly determined that the USACE easements are an unacceptable right on the title of the Parcels. (Id. PageID 369).
g. August 2018 NAD Director Determination
Defendant NRCS timely requested that the Director of NAD ("Defendant NAD Director") review the Administrative Judge's decision. (Doc. 22-5). Plaintiff timely submitted a Response to the Request for Director Review. (Doc. 22-6). In an untimely determination, Defendant NAD Director reversed the Administrative Judge's decision. (Doc. 22-8); see 7 U.S.C. § 6998(b)(1) (providing that the Director shall complete his review and issue a final determination or remand not later than 10 business days after receipt of the request for review received by the agency); 7 C.F.R. § 11.9(d)(2) (same).
h. Proceedings before the Court
Plaintiff brings this action pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq., and seeks judicial review of Defendant NAD Director's August 2018 determination. (Doc. 22); see (Doc. 1). Plaintiff asks the Court to set aside Defendant NAD Director's determination, reinstate the Administrative Judge's decision, direct Defendant NRCS to fund the Agricultural Conservation Easement Program agricultural land easement grant in Plaintiff's favor, and award costs and fees under the Equal Access to Justice Act ("EAJA"). (Doc. 22 PageID 302). The parties have filed cross motions for summary judgment. (Docs. 37, 38).
II. STANDARD OF REVIEW
The APA provides for judicial review of final agency actions. Sierra Club v. United States Forest Serv., 828 F.3d 402, 407 (6th Cir. 2016) (citing 5 U.S.C. § 702). Summary judgment is an appropriate procedure when a court reviews an agency's administrative record. See id. However, given the district court's limited role in reviewing an administrative record—because, under the APA, the agency, not the district court, finds facts and reaches a decision based on the administrative record—the summary judgment standard found in Federal Rule of Civil Procedure 56(a)
Pertinent here, a final determination by Defendant NAD Director is reviewable by the Court in accordance with the APA. See 7 U.S.C. § 6999; 7 C.F.R. § 11.13. Importantly, it is the final determination of Defendant NAD Director, rather than the underlying decision of Defendant NRCS, that the Court reviews in accordance with the APA. See Epp v. Nat. Res. Conservation Serv., 425 F.Supp.3d 1142, 1147 (D. Neb. 2019) (cleaned up); accord Foster v. Vilsack, No. CIV. 13-4060-KES, 2014 WL 5512905, at *3 (D.S.D. Oct. 31, 2014), aff'd, 820 F.3d 330 (8th Cir. 2016).
The APA standard of review provides that "the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action," and "shall hold unlawful and set aside agency action, findings, and conclusions found to be—
5 U.S.C. § 706(2)(A). Thus, the court "reviews an agency's reasoning to determine whether it is `arbitrary and capricious,' or, if bound up with a record-based factual conclusion, to determine whether it is supported by `substantial evidence.'" First Tennessee Bank Nat. Ass'n v. Johanns, 618 F.Supp.2d 778, 791 (M.D. Tenn. 2008), amended in part sub nom. First Tennessee Bank Nat'l Ass'n v. Johanns, No. 1-05-0027, 2009 WL 10727933 (M.D. Tenn. Feb. 11, 2009) (citing Dickinson v. Zurko, 527 U.S. 150, 164 (1999)).
The APA's "arbitrary or capricious standard" requires the court to ask whether the party challenging the agency's action has shown that the that the action had no rational basis or involved a clear and prejudicial violation of applicable statutes or regulations. Kroger Co. v. Reg'l Airport Auth. of Louisville & Jefferson Cty., 286 F.3d 382, 389 (6th Cir. 2002); accord Michigan Bell Tel. Co. v. MCIMetro Access Transmission Servs., Inc., 323 F.3d 348, 354 (6th Cir. 2003) ("The arbitrary and capricious standard is the most deferential standard of judicial review of agency action, upholding those outcomes supported by a reasoned explanation, based upon the evidence in the record as a whole."). "An agency decision would normally be considered arbitrary and capricious if its decision was based on factors that Congress did not intend it to consider; if the agency entirely failed to consider an important aspect of the problem; or if the agency offered an explanation for its decision that ran counter to the evidence before the agency or was so implausible that it could not be ascribed to a difference in view or the product of agency expertise." First Tennessee Bank Nat. Ass'n, 618 F. Supp. 2d at 791 (citing Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).
The APA's "substantial evidence" standard requires a court to ask whether a "reasonable mind might accept" a particular evidentiary record as "adequate to support a conclusion." Dickinson, 527 U.S. at 162. "Substantial evidence review gives the agency the benefit of the doubt, since it requires not the degree of evidence which satisfies the court that the requisite fact exists, but merely the degree which could satisfy a reasonable factfinder." First Tennessee Bank Nat. Ass'n, 618 F. Supp. 2d at 792 (internal quotation marks omitted) (citing Wilson Air Center, LLC v. F.A.A., 372 F.3d 807, 813 (6th Cir. 2004)).
As detailed above, the APA's "arbitrary or capricious standard" and "substantial evidence" standard are two of six provisions found in 5 U.S.C. § 706(2). Id. The two standards are separate standards, and, although an agency's final action may be supported by substantial evidence, the action may still reflect arbitrary and capricious action. Association of Data Processing Service Organizations, Inc. v. Board of Governors, 745 F.2d 677, 683-84 (D.C. Cir. 1984) (Scalia, J.); First Tennessee Bank Nat. Ass'n, 618 F. Supp. 2d at 792 (citing Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 284 (1974)).
III. ANLAYSIS
Plaintiff asserts that Defendant NAD Director applied the wrong standard of review to the wrong entity and abused his discretion in doing so. (Docs. 37, 39, 41) (relying primarily on 7 C.F.R. § 11.9(d)(1)). Specifically, Plaintiff argues that Defendant NAD Director should have reviewed the Administrative Judge's decision under the substantial evidence standard of review but, instead, improperly passed over the Administrative Judge's decision and reviewed Defendant NRCS's ineligibility determination under the arbitrary, capricious, and an abuse of discretion standard of review. (Doc. 37 PageID 887-889); (Doc. 39 PageID 908-12); (Doc. 41 PageID 928-34).
The Federal Defendants, in their Motion for Summary Judgment, first assert that Defendant NRCS correctly determined that Plaintiff's application for the agricultural land easement was ineligible because Plaintiff could not provide clear title for the Parcels in light of the USACE flowage easements and this determination was neither arbitrary nor capricious. (Doc. 38 PageID 902-06). The Federal Defendants only address Defendant NAD Director's determination in their Motion for Summary Judgment in the statement of facts. (Doc. 38). Subsequently, in their Response in Opposition to Plaintiff's Motion for Summary Judgment, the Federal Defendants argue that Defendant NAD Director's determination was not arbitrary, capricious, or an abuse of discretion, and was supported by substantial evidence, as the evidence found in the administrative record permitted the Director to reverse the Administrative Judge. (Doc. 40 PageID 922-25) (first acknowledging 7 C.F.R. § 11.9(d)(1)).
Pursuant to 7 C.F.R. § 11.9(d)(1), Defendant NAD Director was to review the Administrative Judge's decision to determine whether the Administrative Judge's decision was supported by substantial evidence. 7 C.F.R. 11.9(d)(1) ("The Director will conduct a review of the determination of the Hearing Officer using the agency record, the hearing record, the request for review, any responses submitted. . ., to determine whether the decision of the Hearing Officer is supported by substantial evidence.").
It is clear that the applicable regulation charges Defendant NAD Director with review of the Administrative Judge's January 2018 decision to determine whether that decision is supported by substantial evidence. See 7 C.F.R. 11.9(d)(1). It is also clear that the Court must review Defendant NAD Director's August 2018 decision, and not Defendant NRCS's July 2017 ineligibility determination or the Administrative Judge's January 2018 decision. See Epp, 425 F. Supp. 3d at 1147; Foster, 2014 WL 5512905, at *3. As it is Defendant NAD Director's August 2018 decision being reviewed, the question is not whether Defendant NRCS itself acted arbitrarily or capriciously with respect to its July 2017 ineligibility determination; rather, the question is whether Defendant NAD Director acted arbitrarily or capriciously with respect to his August 2018 reversal of the Administrative Judge's January 2018 decision. See Epp, 425 F. Supp. 3d at 1147; Foster, 2014 WL 5512905, at *3. A review of Defendant NAD Director's August 2018 decision reveals that it is not clear whether he reviewed the Administrative Judge's January 2018 decision to determine whether that January 2018 decision was supported by substantial evidence. (Doc. 22-8). Defendant NAD Director's August 2018 decision must be set aside as being arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, as it is not clear if the Director reviewed the Administrative Judge's January 2018 decision in accordance with the pertinent regulation. See 5 U.S.C. § 706(2)(A); Kroger Co., 286 F.3d at 389.
Remand to Defendant NAD Director for reconsideration of the correct entity under the correct standard of review is the appropriate remedy.
As a Court of general jurisdiction, the Court is not trained to evaluate, for example, whether reliance on the Cincinnati Area Geographic Information Systems map and USACE flowage easement language—which Plaintiff argues establish that no more than 2% of the Parcels is subject to permanent flooding and no more than 13% of the Parcels is subject to occasional flooding—is more proper than reliance on the USACE maps and USACE flowage easement language—which Federal Defendants argue establish that up to 60% of the Parcels is subject to occasional flooding—in directing direct Defendant NRCS to fund the Agricultural Conservation Easement Program agricultural land easement grant in Plaintiff's favor, as Plaintiff requests the Court so direct. Defendant NAD Director should make that evaluation, as well as others, while reviewing the Administrative Judge's January 2018 decision to determine whether that January 2018 decision is supported by substantial evidence. Cf. Dawson Farms v. Risk Mgmt. Agency, 698 F.3d 1079, 1083 (8th Cir. 2012). The court expresses no opinion as to the ultimate outcome in remanding.
Finally, Plaintiff's request for an award of costs and fees under EAJA is premature as final judgment in this matter has yet to occur. See 28 U.S.C. § 2412(d)(1)(B) ("A party seeking award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application. . ."); id. § 2412(d)(2)(G) (defining "final judgment" as "a judgment that is final and not appealable, and includes an order of settlement"); see also Melkonyan v. Sullivan, 501 U.S. 89, 96 (1991) (holding that "final judgment" for purposes of EAJA "means a judgment rendered by a court that terminates the civil action for which EAJA fees may be received. The 30-day EAJA clock begins to run after the time to appeal that `final judgment' has expired."). Plaintiff may file a motion for fees and other expenses at the appropriate time.
IV. CONCLUSION
In light of the foregoing, it is hereby
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