Olenhouse v. Commodity Credit Corp. - 42 F.3d 1560 (10th Cir. 1994)

Rule:

Section 701 of the Administrative Procedure Act provides that agency action is subject to judicial review except where there is a statutory prohibition on review or where agency action is committed to agency discretion as a matter of law. 5 U.S.C.S. § 701(a)(1) and (2). There are, however, two statutory provisions applicable to the Wheat Program that purport to limit judicial review: 7 U.S.C.S. § 1385 and 7 U.S.C.S. § 1429.

Facts:

Due to disastrous rains that destroyed fall plantings and flooded fields, Appellant-Farmers planted their 1987 program wheat after the fall 1986 planting season. The ASCS deemed the late planting a "changed practice" under program regulations and reduced the yield per acre for which deficiency payments would be made. The Farmers claimed the ASCS's action was arbitrary and capricious in that it was the product of an inadequate administrative appeals process and not supported by substantial evidence in the administrative record. The Farmers appealed this initial decision to the state ASCS committee and then the Deputy Administrator, State and County Operations (DASCO). Without making any findings of fact or articulating a reasoned basis for its decision, DASCO found no justification for relief. Instead of reviewing the administrative record itself, the District Court relied on counsel's statements as to what was in the record and material appended to the government's "Motion to Affirm." The District Court selected isolated bits of this secondhand evidence and concluded the agency's action was supported by the administrative record. While it found the Farmers' arguments regarding misinformation persuasive, the District Court construed its review powers narrowly and concluded the agency's findings were plausible and therefore not arbitrary and capricious.

Issue:

Was the district court required to find and identify substantial evidence to support the action of the ASCS?

Answer:

Yes.

Conclusion:

Section 701 of the APA provides that agency action is subject to judicial review except where there is a statutory prohibition on review or where agency action is committed to agency discretion as a matter of law. 5 U.S.C. § 701(a)(1), (2). There were two statutory provisions applicable to the Wheat Program that purport to limit judicial review: 7 U.S.C. § 1385 and 7 U.S.C. § 1429. Section 1385 provides: "The facts constituting the basis for any payment under the wheat program authorized by the Agriculture Act of 1949 or the amount thereof, when officially determined in conformity with the applicable regulations prescribed by the Secretary or by the Commodity Credit Corporation, shall be final and conclusive and shall not be reviewable by any other officer or agency of the Government." Further, 7 U.S.C. § 1429 provides: "Determinations made by the Secretary under [the Agriculture Act of 1949] shall be final and conclusive: Provided, That the scope and nature of such determinations shall not be inconsistent with the provisions of the Commodity Credit Corporation Charter Act. The essence of the Farmers' claims was the ASCS action violated due process, substantively in the sense of being arbitrary or capricious, and procedurally in the sense of denying minimum safeguards. Neither statute precluded judicial consideration of such claims; rather, consistent with the judicial review provisions of the APA, each prevented the reviewing court from substituting its judgment on the facts for that of the agency. As stated in Garvey: “No legislative language can deprive a man of a fair hearing in the adjudication of his rights, or of his right to have a court decide whether the administrative agency acted within its jurisdiction; and, whether the agency through a lay tribunal applied the correct rule of law to the facts.

Neither 7 U.S.C. § 1385 nor § 1429 limited a review of the agency action at issue in the present appeal.