CTM Holdings, LLC v. U.S. Department of Agriculture

On April 16, the Liberty Justice Center and Pacific Legal Foundation jointly filed a lawsuit to challenge a federal law that unconstitutionally takes farmers’ property without compensation.

In 1985, Congress passed “Swampbuster,” a law that aims to protect the nation’s wetlands by requiring farmers to leave any land on their property deemed “wetlands” untouched. To ensure compliance, the federal government makes farmers sign an agreement to give up their wetlands to be eligible for U.S. Department of Agriculture benefits—which include everything from disaster relief and crop insurance to the ability to apply for loans. If farmers ever do anything to an area deemed wetlands, they could lose all USDA benefits for every property that they, or anyone affiliated with them, own.

While the federal government has the power to take someone’s private property for public use through eminent domain, the Fifth Amendment requires the government provide just compensation for that taking.

The Liberty Justice Center and Pacific Legal Foundation are challenging Swampbuster for violating farmers’ rights—first, by conditioning the receipt of federal benefits on the waiver of a constitutional right, and, second, by taking private property without just compensation. The lawsuit also alleges that Swampbuster violates the Commerce Clause, and that regulations implementing it unlawfully expand the USDA’s power beyond what the law authorizes.

The Liberty Justice Center and Pacific Legal Foundation represent CTM Holdings, LLC, a family-run Iowa company that owns and manages approximately 1,075 acres of Iowa farmland. CTM Holdings rents out its farmland to small local farmers to grow crops. Jim Conlan, owner and manager of CTM Holdings, grew up in a farming family and has invested in Iowa farmland, including his grandparents’ old farm, to reconnect with his roots after a successful career as a corporate attorney and amid a current career in the finance/private equity industry.

The federal government designated 9 acres of a 71-acre parcel of CTM Holdings’ property as wetlands—even though the area is dry, arable land that is not connected to any water source, contains no standing water, and is not inundated by water at any point in the year. Because of the provisions in Swampbuster, CTM Holdings cannot farm on those 9 acres. If they do, CTM Holdings, their tenant, and all the other tenants on the remaining 1,000 acres could lose their USDA benefits.

“While well-intentioned, this conservation scheme is unconstitutional. The government cannot condition benefits on the waiver of a constitutional right—in this case, the Fifth Amendment right to be compensated when the government takes some or all of your land. If welfare recipients had to promise to never criticize the government to receive welfare benefits, it would be plainly unconstitutional. Why should farmers’ rights be any different?” said Loren Seehase, Senior Counsel at the Liberty Justice Center.

“The Constitution does not grant the federal government the power to regulate any piece of land in the country it wishes,” said Paige Gilliard, an attorney at Pacific Legal Foundation. “Nor may government force people to give up their rights in exchange for a government benefit.”

“I am proud to stand with the Liberty Justice Center and Pacific Legal Foundation in challenging this legislation, on behalf of the farmers across the country whose rights have been violated by Swampbuster for far too long,” said plaintiff Jim Conlan.

The Liberty Justice Center and Pacific Legal Foundation jointly filed CTM Holdings, LLC v. U.S. Department of Agriculture in the U.S. District Court for the Northern District of Iowa, Eastern Division, on April 16, 2024.

The Upper Midwest Law Center served as local counsel to file the lawsuit.