(Des Moines Register)—A federal judge has heard oral arguments in a case that could overturn a decades-old statute tying wetland conservation to federal farm benefit eligibility.
The plaintiff CTM Holdings, which owns and rents land to Iowa farmers, sued over the U.S. Department of Agriculture’s “swampbuster” law, alleging its implementation is unconstitutional, and that it takes land without any compensation to landowners.
The government defendants and intervening environmental groups argued in a hearing Monday against CTM and alleged the company had no standing as it had not suffered any injury from the statute.
Chief Judge C.J. Williams, for the U.S. District Court for the Northern District of Iowa, questioned if the whole issue was a “failure to communicate” between the landowner and Natural Resources Conservation Service, which administers the swampbuster rule.
The case, CTM Holdings v. U.S. Department of Agriculture, pertains to a 9-acre portion of a 72-acre tract in Delaware County that was designated a wetland by NRCS prior to the company’s purchase of the land.
The company wanted to cut down trees and remove stumps from the wetland area, which it alleges is dry land, for the purpose of farming.
CTM Holdings, represented by the nonprofit litigation groups Liberty Justice Center and Pacific Legal Foundation, argues the Wetland Conservation Compliance provisions of the 1985 Farm Bill, often referred to as “swampbuster,” unconstitutionally puts conditions on a farmer’s ability to receive farm credits. Additionally, the group holds that farmers are not properly compensated for the wetland easements.
The Iowa Farmers Union, Dakota Rural Action, Food & Water Watch and the Iowa Environmental Council were approved as intervenors in the case on behalf of the USDA and NRCS in December.
The groups argued that overturning the swampbuster rule would “threaten” their members and communities by removing wetland conservation practices from neighboring farmland.
Could dispute be the result of a miscommunication?
Liberty Justice senior counsel Loren Seehase, on behalf of CTM Holdings, argued the company had requested a “redetermination” by NRCS of the wetland portion of the land in 2023, but that it’s “near impossible” to get the agency to reevaluate its ruling.
The lawsuit holds NRCS “exceeds the statutory definition” by only considering a redetermination if a “natural event alters the topography or hydrology” of the land or if the agency agrees it made an error in its initial determination.
Attorney Brandon Gray, on behalf of the USDA, former Secretary of Agriculture Tom Vilsack, the NRCS and other government officials named in the complaint, denied that the company had requested a redetermination of the wetland. Gray said the action in 2023 dealt with a different portion of the 72-acre tract, though he agreed the letters from the NRCS were “confusing.”
Judge Williams wondered if this was just a misunderstanding between CTM and the regulating agency.
Jim Conlan, owner of CTM Holdings, with over 1,000 acres of land in Iowa, said the opposing counsel was “very creative” with this argument and holds that he did apply for a redetermination of the wetland.
Seehase, Conlan’s attorney, said it is “disingenuous” for the government to say the NRCS did a “piecemeal” determination in 2023 rather than examining the whole property.
Landowner says wetland designation is a taking, should be compensated
Seehase said CTM “has and will continue to suffer” under swampbuster because the 9 acres determined to be a wetland cannot be rented for farming.
The lawsuit also holds that the landowner should be compensated for the wetland acreage that cannot be farmed. Seehase said there should be a program for wetlands like the Conservation Reserve Program, which pays farmers to keep sensitive land in long-term vegetative covers.
Dani Replogle, staff attorney with the environmental group Food & Water Watch, one of the intervenors, said that argument doesn’t “have a leg to stand on.”
“The compensation is clearly the farm benefits that swampbuster provides access to,” Replogle said.
Those benefits for compliant landowners include crop insurance and other important farming subsidies distributed by the USDA.
Williams, the judge, asked if it was “coercive” on behalf of the government to condition those funds on compliance with the law.
Gray, for the USDA, said swampbuster does not stop property owners from doing what they want to the land. He said the fact that government subsidies are “a good deal” for farmers doesn’t mean it’s coercive.
He said the conditions follow Congress’ directive to ensure government spending is for the “general welfare.”
Kathleen Garvey, on behalf of the intervenors, said there are also “myriad” exemptions from swampbuster, including a farmer’s ability to drain and farm over a wetland by purchasing a mitigation credit.
Garvey said ruling in favor of the plaintiff would “radically curtail” Congress’ power and “drastically change” farm policy.
She said CTM Holdings has not suffered injury from the issue, and that the company actually profited from a lower purchase price for the land and the sale of timber on the wetland portion and that it has maintained consistent farming tenants.
Pacific Legal Foundation attorney Jeffery McCoy said the injury is in the government’s “ask” to “waive a constitutional right” to receive benefits.
Seehase said “it’s really not a choice” for a farmer to forgo farm benefits. CTM Holdings is eligible for farm benefits, which Conlan said are passed on to his tenants in return for a higher lease price.
The plaintiffs also argued that the NRCS definition of altering a wetland exceeds the statute set by Congress.
The law holds that filling, draining, leveling, clearing woody vegetation or diverting runoff water are all actions considered to alter a wetland for the purpose of agriculture use.
Gray, on behalf of the government, said just because the statute and the agency rules are different, it does not automatically mean the intent is also different.
Gray said it is the agency’s job to define a statute to make it applicable.
Change in swampbuster would have lasting implications
According to a study from the Union of Concerned Scientists, wetlands provide protection from residential flood damages equivalent to nearly $23 billion annually. Wetlands in Iowa alone have the potential to mitigate $477 million annually in flood damage, according to the study.
The same study estimates there are more than 640,000 acres of wetlands in Iowa, though the Iowa Department of Natural Resources says the state has lost 95% of what were once wetlands, the majority of which were drained for agricultural uses.
Swampbuster defendants, their attorney said. believe that without the law, wetlands across the country would be drained.
“The impacts of us losing the case would be that federal farm benefits would be open to any farmer or holding company or corporate landowner that wanted to just destroy all the ecosystems on their property and farm every acre,” said Replogle, the Food & Water Watch attorney.
She said the lawsuit would have implications on quite a few federal farm credit programs that have eligibility requirements, especially on a similar statute, known as “sodbuster,” that protects highly erodible land from being farmed.
Replogle said there is “no limiting principle” in CTM Holdings’ case that would prevent sodbuster from being ruled unconstitutional along with swampbuster.
Williams said he will take the oral arguments into advisory and issue judgment at a later date.
Both parties said they would appeal the case if the judge rules against them.
This story was updated to add a video.