Cardinal Land Conservancy v. United States Dep’t of Agriculture, No. 1:18-cv-00534 (S. D. Ohio, March 16, 2022)

State: Ohio

Procedural Status: Case active.

Date: 2022

Keywords: Administrative Procedure Act; agricultural conservation easement; Agricultural Conservation Easement Program; dam; federal conservation easement; flood control; flowage easement; public conservation easement; title; United States Army Corps of Engineers.

Summary of Facts and Issues: A brother and sister owned a family farm of 154 acres with frontage on the Great Miami River, one of the few remaining farms in Hamilton County. The farm property was subject to flowage easements granted in the 1960’s to the Army Corps of Engineers (USACE) in connection with the operation of a downstream dam. The flowage easements allowed the USACE to permanently flood a portion of the property, and to periodically flood another portion. The USACE also had the right to clear debris and vegetation and to prohibit any structures within the easement area. In essence, the flowage easements gave USACE the right to operate its downstream dam in such a way as to cause backwater flooding on the farm property. This backwater flooding was beneficial to agriculture because it deposited valuable topsoil on the property. However, the backwater floods were rare, with only two occurring since 1937. In 2015, the Cardinal Land Conservancy (CLC) entered into a cooperative agreement with the Natural Resources Conservation Service (NRCS) for enrollment of the farm property into the Agricultural Conservation Easement Program – Agricultural Land Easement (ACEP-ALE). The agreement entailed NRCS’ contribution of $385,000 towards the purchase of a conservation easement, to be combined with $172,000 in funding from the Ohio Department of Agriculture. However, in 2017 NRCS notified CLC that the project was ineligible for a grant because of the flowage easements, which were deemed to be an unacceptable title encumbrance. Due to imprecise USACE maps, the exact areas of the property subject to the flowage easements were uncertain at the time NRCS made its initial ineligibility determination. During the appeals process better maps were found and it was determined that 2% of the property was subject to the permanent flooding rights and 13% subject to the temporary flooding rights. The 2% subject to permanent flooding was streambank land already underwater most of the year prior to the dam creation. CLC sought administrative review of NRCS’ rejection before a USDA Administrative Judge, who found in January 2018 that NRCS’ ineligibility determination was erroneous because the flowage easements did not pose a high likelihood of conversion to a non-agricultural use, which was the applicable standard under the NRCS’s rules for evaluating existing easements. The Administrative Judge also ruled that the flowage easements did not render the property already protected from development, because even though they prohibited structures, the property could still be used as a sand and gravel mining operation. NRCS appealed the Administrative Judge’s decision to the USDA’s National Appeals Division (NAD), which reversed the Administrative Judge’s decision. CLC then appealed in federal district court under the Administrative Procedure Act.

Holding: The District Court ruled on summary judgment that NAD had improperly reviewed NRCS’ ineligibility determination, and not the Administrative Judge’s ruling. The court remanded to NAD to review the Administrative Judge’s decision.

July 2022 Update: In July 2022, the Director of the National Appeals Division issued a determination upholding the Administrative Judge’s decision that, based on substantial evidence, the flowage easements are consistent with agriculture and not a title encumbrance inconsistent with the requirements of the ACEP-ALE program.

• Analysis and Notes: This case is a fascinating and inspiring example of a land trust sticking up for its rights throughout a tangle of different agencies and appeals processes. The Department of Justice guidance stated that when two federal agencies have an interest in real property, they are to consult with each other and work it out if possible. NRCS tried to make the land trust “work it out” with USACE, asking the land trust to get USACE to subordinate their flowage easement to the ACEP-ALE easement. Meanwhile, USACE wouldn’t talk with the land trust unless paid for its time, like a user fee. This was the first time that a federal agency asked the land trust to pay a user fee to talk to the federal agency.