Mahon v. United States Department of Agriculture

the based on the case resolve COX, court would Circuit and Before DUBINA summary judgment, for motion SCHLESINGER,* Mahons’ District and Judges, motion, and to that response the USDA’s Judge. de novo the review of district court’s the SCHLESINGER, Judge: District court district The records. administrative Paul John, Shelby, summary and for motion the appellants, . The Mahons’ denied judgment the Unit- against summary Mahon, complaint entered and judgment filed order, Agriculture the of In its Department USDA. favor of the ed States in Shelby District States and (“USDA”) as to John the United that in concluded court Florida. determination claims, District the the Middle USDA’s for Court Mahon’s review of judicial not unreason- sought benefits was complaint denying The them the respect in which contrary to law. With determinations final nor able it applica- appellants’ Mahon, concluded the court had denied Paul USDA assistance he had failed disaster because jurisdiction for federal tions lacked (2002) damage for remedies § 1480.20 administrative his 7 C.F.R. exhaust trees) (citrus at the ap- crops an administrative timely file container-grown failing to County, in Lake nurseries located followed. This peal. Mahons’ was caused damage Florida. below, vacate we stated For reasons in that occurred temperatures freezing respect to decision court’s the district 2000. December and November claims and Shelby Mahons’ and John Mahon, the com- Shelby and proceedings. toAs John for further this case mand (1) had claims, USDA we plaint asserted to Paul Mahon’s respect With by not procedures” own follow its “failed to court. of the district the decision affirm Hearing Officer’s determina- reviewing the BACKGROUND (2) I. “mis- required, days, ten as

tion within (3) regulations, applied” of a are Mahon owners Shelby and John against John “unlawfully] discriminat[ed]” County, in Lake nursery located citrus John Mahon, deprived Shelby and and produces nursery primarily Florida. rights.” process Shelby of their “due and oth- however, produces trees, it also citrus selloms including philodendron plants, Mahon, the com- er to Paul respect With plants and The trees azaleas. and to reverse the district plaint asked sold. and then containers small determination, grown which final agency approximately on nursery is situated an Their request for his had denied the USDA crop can consist 126-acres, typical and grounds appeal on 175,000 plants. trees approximately to remand untimely, and request was citrus owner of a is also Mahon evidentiary Paul to the USDA matter County, Florida.1 in Lake nursery located complaint asserted hearing. The nursery, Shelby Mahon’s John and accept Like refusing to erred in had USDA * famil- what the from record unclear Il is Schlesinger, United Harvey E. Honorable Shelby relationship is between ial Middle Judge District States District Paul Mahon. Mahon Florida, designation. sitting by nursery

his primarily produces citrus of Florida’s records that they showed trees. His situated five “out of business.” The denial letter noted land, acres crops his can consist of Mahon had submit- 100,000 many as trees and plants. On receipts ted “reflect[ed] days several between November operation was moving inventory off of the December the Mahons’ crops citrus location [when] were not certified were destroyed as a result freezing with the State of addition, Florida.” temperatures. the County Committee concluded that the Plaintiffs did not follow “best management 2001, John,

In January Shelby, and Paul practices.” John Mahon also applications filed for disaster assis- sought reconsideration, and their request pursuant tance to the 2000 Crop Disaster was likewise denied. Program, (2002), C.F.R. Part 1480 program established the USDA. The A. PAUL MAHON’S Mahons requested approximately $1.45 ADMINISTRATIVE million in benefits. APPEAL. 25, 2001, May On the County Lake Com- 5, 2001, On December following the de- mittee of the Farm Service nial of his benefits application, Paul Mahon (“FSA”) denied Paul Mahon’s application proceed elected to to mediation. After ground on the that he not “d[id] meet the mediation impasse, reached an Paul Ma- eligibility criteria for a nursery commercial attorney hon’s sent a letter purporting to operation” because he had not renewed his be a notice of appeal May 29, 2002,2 on certificate registration to sell or distrib- again 7, on June 2002.3 ute, or to offer for sale or distribution stock law, under Florida 13, 2002, On June Paul Mahon signed a 581.131, (2000), Fla. Stat. and because written statement in which he authorized the State of Florida’s records showed that his attorney to appeal to the National Ap- he was longer “no in business.” Paul Ma- peals (“NAD”) Division and “confirmed” hon filed a request reconsideration, for his attorney’s 7, June request for was denied on appeal. November 2001. Paul Mahon signed also a letter The denial letter noted that in request his that forwarded signed the authorization to reconsideration, for Paul Mahon had sub- the NAD and asked NAD the to “consider mitted receipts that “reflect[] movement signed [the to authorization] be [his] for- of inventory off of the property he [when] mal appeal notice of request for oral was not certified with the State of Flori- argument.” (or On June Paul Mahon da.” behalf) acting someone on his mailed the appeal written authorization transmit- 9, 2001, On November the County Lake tal letter. Committee denied John and Shelby Ma- applications hon’s ground they NAD sent a letter to Paul Mahon’s not “di[d] meet the eligibility criteria for a counsel denying the June request commercial nursery operation” because, appeal an that, on the ground even Mahon, like Paul their certificate regis- application after 11.5(c)(1) of 7 C.F.R. tration as commercial growers under Flor- (stating request that a for mediation ida law expired had because State tolls the thirty-day period appeal to 2. The letter was sent to County the Lake Com- 3. This letter was sent to Appeals the National letter, mittee. In the attorney (“NAD”), Paul Mahon’s Division substantively was simi- asked the Committee to consider the letter to lar to letter sent County Lake Com- be a notice appeal. of administrative mittee. those and that the FSA had not asked April law NAD), impasse date on an based registered whether nurseries fíled[d] Paul Mahon “[had] ac- Although an Florida law. the FSA request signed personally erroneously it knowledged limit estab- had issued [thirty day] time within the 11.6(b)(l)-(2) payments ineligible applicants, some [7 lished federal argued (2002).].” FSA (2002),prohib- § 718.9 regulation, 7 C.F.R. 20, 2002, objected Mahon Paul On June seeking from a refund. The the FSA ited claiming that his appeal the denial of testimony sworn presented FSA also the medi- notify NAD did not him had not been of the “sta- the FSA aware May until impasse reached an had ation it unregistered recipients when tus” 25, 2002, there was never and that and that approved applications their had to have amongst agreement identified, problem [the] “once Paul April declared on impasse licensure status began inquiring FSA into an evi- rehearing “a demanded paying before benefits.” applicants of all impasse dentiary hearing as when to the lack of notice.” occurred and Hearing [had] Offi- On December point- Paul Mahon support position, To his Determination in Appeal issued an cer Agricultural Medi- out that the Florida ed County he found that the Lake Service, the media- ation which conducted in denying had erred John Ma- Committee tion, mediation to not consider the did Shelby applications Mahon’s for hon’s 28, May until impasse reached an have Hearing The Officer con- relief. disaster deny Agency’s decision cluded 2002. Shelby Mahon relief to John and disaster Paul Ma- NAD nevertheless denied The registra- their state certificate because on the request for reconsideration hon’s expired, nursery to sell stock had tion signed notice of personally that his ground cer- granting relief to others whose while signed on June appeal, which was expired, was arbi- had likewise tificates was un- postmarked June contrary According to trary and to law. impasse date. The timely based on either Officer, Agency “must Hearing the the Paul Mahon’s subsequently denied NAD equal- producers to all provide assistance motions for numerous reconsideration. addition, Hearing the Officer ly.” B. AND SHELBY MAHON’S JOHN of Florida [A]gency’s that “the use found APPEAL.

ADMINISTRATIVE deny- for one of the [sic] as basis Statutes Shelby Crop Disas- ing Mahon’s [John Shelby Ma- John and On June is not in accordance Program] benefits ter notices of ad- timely signed and filed hon by federal the standards established A the NAD. appeal with ministrative alternative, In the regulations.” published hearing a Hearing Officer conducted that even Hearing Officer noted the During hearing, the November a applicable, was Florida’s certification law that other received the Officer evidence in already concluded Official had USDA County and in Lake elsewhere nurseries Florida law a cer- case that under another though even Florida had received benefits until such time required was not tification growers the they paid had not commercial ready sold.4 Since crop was to be by Florida the required fees as as registration The letter was and Jamie by Mar- ers Aaron Fender. was made 4. This conclusion law Wolthuis, County Director Executive to a for reconsidera- cinda sent in reference motion FSA, Lake-Orange a letter granting Co. the for Fenders and in tion filed 19, 2001, grow- addressed to dated December provide any failed to evidence nevertheless determined that Lake for crops eligible that the Mahon’s were County Committee’s denial of benefits sale, they required regis- were not to be “supported by was the law and the evi- producers pursuant commercial tered as dence” and that the Hearing Officer’s Lastly, Hearing Florida law. Officer 4, 2002, Determination, Appeal December Agency’s concluded that the determination “must be reversed.” Shelby manage- that John and Mahon’s Deputy Director found that nursery ment of the did not meet Agency properly denied disaster relief to management practices” definition of “best Shelby they Mahon because 27, 2002, erroneous. On December were not as a operating commercial nurs- Acting FSA Administrator filed ery at Deputy the time of their loss. The quest review of Hearing Officer’s Director reasoned benefits “[disaster Appeal December Determination expressly by regulations limited to or- by the Director of the NAD. nursery crops that grown namental January On Director issued in a container controlled environment Determination, a Director Review in which property commercial sale on owned or ruling. he Hearing reversed the Officer’s producer,” leased and since John The Director found that John and nursery reg- Mahon’s was not request Mahon’s for disaster relief was istered as commercial appropriately denied because had not law, Florida and since their crops could employed management practices” “best legally be sold under Florida with- law required by Di- regulations. federal being registered out on the dates of their rector declined address “the issue of loss, disaster benefits were properly de- Shelby whether miss- [John Mahon’s] nied. ing registration] state of also [certificate

supported [the] FSA’s adverse decision.” 9, 2003, September On 7, 2003, February

On “Request Mahon filed their for Reconsid- requested reconsideration of the eration of the Director’s Revised Review.” “Director’s Review Determination.” 17, Their request was denied on October Thereafter, 15, 2003, August Dep- Director, uty who delegated had been authority to make determinations on re- II. DISCUSSION reconsideration, quests for issued a Re- vised Director’s Review Determination. A. Deputy The Director vacated the Janu- This court reviews a district court’s 22, 2003, ary Director Review Determi- novo, grant summary judgment ap de finding nation based on a it had plying the same standard as the district been “based on material fact that was Brown, 1283, court. v. McDowell 392 F.3d Specifically, Deputy error.” Di- (11th Cir.2004); 1288 O’Ferrell v. United rector found the Director’s conclusion (11th States, 1257, Cir.2001). 253 F.3d 1265 employ had failed to Mahons may affirm This court a district court’s management practices” “best was errone- summary grant judgment any The “on Deputy ous. Director then conduct- matter, ed a de novo review ground fairly supported by but the record.” inventory required motion Ms. Wolthuis stated: crop "No not have been until the was year eligible Deeming had been sold in the 2001 therefore for sale. that the certifica- required certification with the State of Florida would tion at the time of loss.”

1253 Industries, [specified] qualifying losses.” Metals, Hinely incurred Inc. v. Alliance Cir.2000). (11th “losses due to Inc., 895, “Qualifying losses” include 222 F.3d 900 ... associated with damaging weather particularly Summary Judgment are, by the crops that as determined Sec- which a district in cases in appropriate (1) retary[,] quantity losses for the 2000 ren a decision is asked review crop; for the 2000 crop; quality losses agency. a federal by dered for the 2000 or severe economic losses Brock, v. Vegetable & Ass’n Florida Fruit § 114 at 1549A-55- crop.” Stat. (11th Cir.1985); 10B 1459 771 F.2d to “losses program applies 1549A-56. The R. & Wright, Alan Arthur Miller Charles crops, by all as the Secre- determined Kane, Practice and Kay Federal Mary disasters[,] including ... nurs- tary, due to ed.1998). (3d However, § 2733 Procedure Florida that ery losses in the State of summary judg in the context of “even occurred], disaster, during because ment, great entitled to action is 1, 2000, and period beginning on October Alabama-Tombigbee Rivers deference.” 114 ending on December 2000.” 477 F.3d Kempthorne, Coalition Stat. 1549A-56. Cir.2007) (citations omitted). (11th directive, Following Congress’s Act, Procedure the Administrative Under USDA, CCC, promulgated through ac any agency set this court must aside (2002), implement Part tion, that is found to C.F.R. finding or conclusion Program. See 1 Crop Disaster of dis arbitrary, capricious, abuse be (2002). regulations unconstitutional, § 1480.1 cretion, in excess of statu C.F.R. will be admin- pro provide program “[t]he tory authority, without observance law, general supervision unsupported required istered cedure President, Commodity the Executive Vice evidence. 5 U.S.C. substantial (CCC), and shall be 706(2); Corporation to Preserve Overton Credit see Citizens by Farm out in the Service Park, 91 carried field Volpe, Inc. v. 401 U.S. (1971). (FSA) county commit- State 28 L.Ed.2d 136 S.Ct. 1480.2(a) (2002). However, judg our we cannot substitute tees.” “[pjroduc- regulations provide further agency. Kempthorne, for that of the ment Instead, eligible will be ers in the United States we must look 477 F.3d at 1254. ... receive disaster benefits agency’s decision was to see “whether eligible of crop losses [] the relevant fac have suffered on consideration of based 7 disasters. C.F.R. crops” specified a clear due to there has been tors and whether 1480.4(a) (2002). Also, “eligi- the terms § (quoting Sierra judgment.” of Id. error Johnson, crop” were as- crop” and “value loss F.3d 1273-74 ble Club v. (11th Cir.2006)). meanings assigned to those signed the (Noninsured Part 1437 by 7 C.F.R.

terms B. Regu- Program Crop Disaster Assistance Succeeding Crop the 1998 and for lations Agriculture, Development, In the Rural (2002); Years). § see 7 C.F.R. 1480.3 Administration, and Relat- Drug Food “eligible (defining § 1437.3 2001, C.F.R. Act of Agencies Appropriation ed include, crop” to crop” and “value loss 106-387, 815, § 114 Stat. No. Pub.L. nursery crop” as “decora- “ornamental (2000), Congress directed 1549A-55 con- container or plant grown tive Secretary Agriculture of to use Commodi- sale”). environment for commercial (“CCC”) trolled funds “to ty Corporation Credit Furthermore, regulations provide ... emergency financial assistance make “freeze[s],” 7 eligible that have disasters include a farm producers available to on 1480.10(a)(1),and, moreover, Crop Program The 2000 Disaster Ha'iid- C.F.R. ¶ boolc, (2000), regulations state that disaster benefits for 3-DAP Amend. states nursery ... are limited crops “ornamental as follows: nursery crops that to ornamental Eligible nursery ornamental includes grown in a container or controlled environ- plants grown in a decorative container property ment for commercial sale on or controlled environment for commer- by producer, owned or leased cial sale. using nursery managed good cared include, Eligible nursery crops but are 1480.18(d) growing practices.” 7 C.F.R. not limited to: (2002). “[Disaster [Part benefits (cid:127) shrubs, deciduous broadleaf ever- 1480] calculated based the loss of greens, evergreens, coniferous disaster, at the time value as deter- trees, flowering shade and etc. 1480.18(b). by mined CCC.” 7 C.F.R. (cid:127) seed stock for propagation use as (“NAD”) The National Appeals Division a commercial ornamental responsible for adjudicating specified is operation. appeals from adverse deci- Note: This includes fruit and nut agencies sions certain within the seedlings grown for sale as seed (2000). §§ USDA. See 7 U.S.C. 6991-7002 opera- stock commercial orchard responsibilities The NAD’s include the ad- growing tions the fruit or nut. judication appeals from deci- adverse Eligible nursery crops do not include: CCC, FSA, sions and the FSA (cid:127) edible varieties State, county, committees, and area see 7 (cid:127) term, § 11.1 (defining plants produced for reforestation committees), “agency” including local purposes or purposes pro- for the including appeals par- from “[d]enial ducing a crop for which NAT or in, under, ticipation receipt of benefits crop provide insurance does not any program agency[.]” of an 7 C.F.R. protection. (2002).

§ 11.3 added). (emphasis Accordingly, Id. since and Shelby pro- John Mahon’s citrus trees C. fruit,” duced they argue, “edible their respect With crops could not fall under the definition of Mahon, the issue before this court “ornamental nursery,” and their citrus finding whether district court erred in trees were required to have been interpretation that the USDA’s regu its grown for “commercial sale” in order to be implementing lations Crop Disas eligible for disaster benefits. First, Program ter was reasonable. The USDA contends that John and Shel- argue Mahon that the district by Mahon argument by failing waived this in finding they operated court erred to it during pro- raise the administrative nursery” an “ornamental as defined under ceedings. agrees This court with the 1480.18(d). 7 argument USDA and finds that the claim that operations their citrus waived. do not fall agency’s within the own defini ordinary principles “Under of adminis- “eligible nursery tion of crops” of an “or law, reviewing trative a fact, will not con- nursery.” they argue, namental In arguments party sider that a failed to crops explicitly that their are excluded raise timely the definition set forth in the fashion before an administrative FSA’s hand agency.” 103, 114, book. Apfel, Sims v. 530 U.S.

1255 (2000) apply exper- discretion or its 2080, 2087, 147 exercise its L.Ed.2d 80 120 S.Ct. (4) tise; efficiency to J., dissenting); improve accord (Breyer, Woodford — 2378, (5) -, 126 S.Ct. process; to conserve Ngo, v. U.S. administrative (2006); 2385-86, United resources, 165 L.Ed.2d 368 judicial since the com- scarce Lines, Inc., Tucker Truck v. L.A. States may be successful in vin- plaining party 67, 68-69, 33, 36-37, 73 S.Ct. 344 U.S. pro- in the administrative dicating rights (1952); Compen Unemployment L.Ed. 54 may never have to cess and the courts Aragon, 329 Alaska v. sation Comm’n (6) intervene; a give agency 245, 249-51, 143, 155, 67 S.Ct. U.S. and correct its own chance to discover (1946). Supreme As the Court L.Ed. 136 (7) errors; possibility to avoid the long ago: explained frequent flouting and deliberate adminis [O]rderly procedure good processes the administrative could weak- objections require that tration agency by of an en the effectiveness of an administrative proceedings encouraging people ignore proce- its for opportunity it has be made while dures. re in order to raise issues correction Meadows, 418 F.3d Johnson v. .... [C]ourts the courts viewable (11th Cir.2005) J.) (Dubina, (citing Alexan over topple should not administrative (11th Hawk, 1321, 1327 der v. 159 F.3d body the administrative decisions unless Cir.1998)). against but has erred not has erred opined has further Supreme Court appropriate at the time objection made desirability imposing of a court that “the practice. under its depends requirement of issue exhaustion Lines, Inc., 344 at L.A. Tucker Truck U.S. analogy to degree to which the added). (emphasis 73 S.Ct. at 69 litigation applies in a adversarial normal of ad Although requirements true that proceeding.” administrative particular principal exhaustion are ministrative issue at v. 530 U.S. at 120 S.Ct. Apfel, Sims statute,” v. ly Apfel, “creatures of Sims where the Accordingly, 2085. at at 530 U.S. S.Ct. fully develop during expected to issues equal force requirements apply an adversarial administrative the course of regu many involving a statute or cases requiring is proceeding, the rationale at lation. Id. at 120 S.Ct. strongest. at its Id. sue exhaustion is judicially created is imposing basis for contrast, By where at 2085. S.Ct. analogy requirement sue-exhaustion not adver proceeding is an administrative courts general appellate rule that sarial, ex requiring reasons for issue arguments consider not raised be will not Id.; Shep are much weaker. see haustion Id.; v. Hel trial courts. see Hormel fore NLRB, 344, 351, 103 S.Ct. 459 U.S. ard 552, 556, 719, 721, vering, 61 S.Ct. 312 U.S. (noting the 74 L.Ed.2d 523 rationale (explaining 85 L.Ed. 1037 wide differences between requirement). This of issue-exhaustion courts). agencies and reasons policy also noted seven court has case, NAD instant adminis- require applying an issue exhaustion impose do not appeal procedures trative ment: The NAD’s requirement. issue-exhaustion (1) premature interruption to avoid claimants to ex- regulations require do let the process; to the administrative appeal the NAD’s administrative haust necessary the factual agency develop judicial re- prior seeking to procedures upon which decisions should background 11.13(b) 11.2(b), (2002), view, §§ based; to 7 C.F.R. permit to the be 1256 present to regulations require opportunity claimants to evidence and raise

and the may not or why proffered the adverse decision issues have been state the reasons in stages at of the liti raised earlier the administrative review was incorrect several 11.6(b)(2), 11.8(c)(2), process, §§ either on account of omission or gation, 7 C.F.R. 11.9(a), (2002), however, at apparent 11.11 there is no because were the regulations express requirement regulations provide in the time. The the specific hearing presentation a officer “will allow the party must list the issues reviewing hearing by any party will consider. of evidence at the See Johanns, regard without to whether the evidence Ballanger F.Supp.2d v. 451 (S.D.Iowa 2006) (“[T]he officer, employee, 1068 Court is not was known to the or any regulation agency making aware of statute or committee of the the ad- requires appeal exhaustion for an verse decision at the time the adverse issue NAD”).5 addition, made.” at Compare from the with 20 decision was Id. (2002) (requiring phase, § that in the Director Review the C.F.R. 802.211 director petition upholding, a filed before the Benefits Review issues a final determination Labor, modifying or Department versing, Board of the determination of 11.9(d)(1). § 7 petition “Specifically hearing must the is officer. C.F.R. state[ ] Board”). to sues be considered director also retains the discretion to portion remand all or a of the determina- Although express there is no issue ex- officer, hearing tion to or hold new requirement regula- haustion the NAD hearing presented. new evidence is Id. tions, a review of the NAD’s Rules of proceedings procedures provide Procedure reveals that NAD The NAD’s an ad system are “adversarial” in nature. The director versarial parties given are charged with “the a full fair hearing opportunity officer to make their authority evidence, and, affirma- arguments present to administer oaths and as a they may corollary, subpoenas attempt challenge argu tions” and issue pro- presented by the attendance of witnesses and the ments and evidence such, request agency. duction of evidence at the of either As the adversarial nature of 11.8(a)(2) (2002). party. 7 Upon proceedings C.F.R. the administrative counsel timely request, appellant against allowing Shelby is entitled John and Mahon to a hearing, hearing arguments officer receives to raise new were not position, written during statements each sides’ raised the course of their adminis hearing and takes evidence into the appeal during record. trative the Director Re 11.8(c). Also, during phase. Apfel, C.F.R. view at Sims 530 U.S. 109-10, hearing “[a]ny party course of the shall at S.Ct. 2084-85. The opportunity present have the oral and was not on notice of John and evidence, documentary testimony argument prior oral of Mahon’s this witnesses, arguments in support stage party at this neither can present party’s position; controvert evidence relied evidence. Hormel v. Helvering, See by any party; Furthermore, other all question U.S. at 61 S.Ct. at 722. 11.8(c)(5)(h). every witnesses.” given regulations provide opportunity also all with an to raise their arguments at Although procedures proceed- this Court is not bound constitute adversarial Ballanger Moreover, district court’s decision in v. Jo ings. this Court finds that Ballan- hanns, F.Supp.2d this Court decision, ger a well reasoned and is accord- published notes that it is the other case ingly very persuasive. dealing with the issue of whether the NAD they brought were not to the although proceed the administrative phase of each court,” 11.8(c)(5)(ii), required §§ attention of the [district] ing, see 7 C.F.R. 11.9(d)(1), that the court examine several issues that was denied and and at trial. Id. its discretion the defendant failed to raise opportunity to exercise 464-68, considering the issue. See at at 1547-49. The expertise S.Ct. 52(b) at at 120 S.Ct. that Rule did Apfel, v. 530 U.S. Johnson Court found Sims J., (Breyer, dissenting); Johnson 2087-88 mandate review because the “forfeited 1156; Meadows, Ballanger at “seriously v. 418 F.3d affect the fair error” did not Johanns, F.Supp.2d at 1069. ness, judi v. integrity public reputation or cial Id. at 117 S.Ct. at proceedings.” brief, Shelby reply In their John (internal alterations and citations con argue that the district court’s Mahon omitted). case, In the the Federal instant an “orna they operating clusion are inappli Rules of Criminal Procedure 1480.18(d) nursery” under 7 C.F.R. mental furthermore, cable, and, there is no indica plain and that error plain error constitutes “seriously error af alleged tion that support In trumps any alleged waiver. fairness, integrity public fect[s] argument, they cite Johnson Unit their reputation judicial proceedings.” As States, 1544, 137 520 U.S. 117 S.Ct. ed such, an provide excep Johnson does not (1997), proposition L.Ed.2d 718 general rule that in adminis tion may correct an error that that this court reviewing “a court will not trative cases not raised the district court was before arguments party consider that a failed to error. See id. at 466- showing plain timely raise in fashion before adminis Although at John 117 S.Ct. 1548-49. agency.” Apfel, trative Sims v. 530 U.S. explain fail to further J., (Breyer, at at 2087 dis theory, they appear imply their S.Ct. senting). to be drawn from Johnson is inference during if an issue was waived

that even D. process, administrative and the issue was court, the never raised before the district argue that Mahon also by may appellate issue be reviewed assuming that their citrus trees were even plain if the district court commits nursery crops,” as defined “ornamental error, thus, this court can review the error. 1480.18(d) (2002), under 7 C.F.R. court com differently, the district Said by affirming the district court erred plain respect error with issue mits were re- NAD’s determination during that was never raised the adminis producers commercial quired register it, raised before process, trative and never law, out section under Florida as set be reviewed may the issue nevertheless (2000), 581.131, Fla. Stat. order satis- argument unsupported this court. This 1480.18(d)’s requirement fy section accordingly rejected. by the law and is held nursery crops” must be “ornamental at time of the for “commercial sale” States, the Su Johnson v. United for federal qualify in order to disaster considering ap a direct preme Court They argue that assistance. also disaster conviction, not an peal of a criminal arbitrarily capri- Agency acted adjudication. Id. at portion ciously by only applying Specifically, the John 117 S.Ct. was adverse to the section 581.131 which examining whether Federal son Court was statute’s add- 52(b), by ignoring Mahons Procedure Rule of Criminal requirement which re- ed notice af written provides “[p]lain errors or defects the Mahons quired provide the state to rights may be noticed fecting substantial 1258 that inter long to their certifi- tation of the statute so as sixty days prior notice

with date, denying pretation the Ma- is reasonable. See Cadet v. Bul expiration cation 1185; others who were also ger, Mazariegos hons benefits while 377 F.3d at Office Gen., un- producers 1320, as commercial Att’y not certified 241 1327 the U.S. F.3d of benefits, (11th Cir.2001). and granted Florida law were der agency’s n. 4 inter Mahons ignoring evidence pretation shall be considered reasonable engaged in the commercial sale controlling long so as it is not “arbi and by ar- responds The USDA citrus trees. manifestly contrary to trary, capricious, or term interpretation that its guing Scott, the statute.” Dawson v. 50 F.3d reasonable, therefore, “commercial sale” is Cir.1995) 884, (11th Chevron, (quoting 887 defer to the in- this court should USDA’s 2782). 844, 104 467 at at U.S. S.Ct. affirm terpretation deny its decision to agency’s interpretation “An of its own Mahon. This benefits to John regulations ‘controlling plainly is unless er that the decision that court finds USDA’s regula roneous or inconsistent with the engaged Mahon were not ” Johnson, tion.’ Sierra Club v. 436 F.3d sale” of their citrus the “commercial Robbins, (quoting at 1274 Auer v. 519 U.S. arbitrary capricious trees was 452, 461, 905, 911, 117 S.Ct. 137 L.Ed.2d contrary to the law and the evidence. (1997)); 79 see also Brennan v. S. Con explained, this court has an As (5th Serv., tractors 492 F.2d 501 Cir. agency’s decision should “be set aside 1974)6 (holding Secretary Labor’s arbitrary, capricious, if to be found interpretation regulation promulgated of a discretion, or otherwise not abuse Occupational Safety and Health Act accordance with the law.” Sierra Club v. “great weight”). was entitled to This def Johnson, 436 F.3d at 1273. When review long erential standard is so as “an a ing agency’s interpretation of statute a agency regulation does not formulate agency responsible is for adminis merely parrots statute it is de tering, apply two-part we test.” Id. signed implement. Oregon, Gonzales v. Chevron, U.S.A., Inc. v. Natural (citing 546 126 163 U.S. S.Ct. Council, 837, 842-43, Res. 467 U.S. Def. (2006) (“An agency L.Ed.2d 748 does not 2778, 2781-82, 104 S.Ct. 81 L.Ed.2d 694 acquire special authority interpret its (1984)); Bulger, see also Cadet v. 377 F.3d when, using own words instead of its ex (11th Cir.2004); 1185 Lewis v. Barn pertise experience reg to formulate (11th hart, Cir.2002); 285 F.3d 1333 ulation, merely para it has elected Legal Envtl. Assistance Found. v. EPA statutory phrase language.”). (11th Cir.1997). 1467, 1473 First, 118 F.3d reviewing legis After statute its clear, congressional if intent is then this history, it apparent Congress lative give agency court and the must effect to provide any guidance respect failed to with unambiguously expressed intent of the meaning of the term “commercial Johnson, Congress. Sierra Club v. sale,” therefore, Congress implicitly has 1273; Bulger, F.3d at Cadet v. 377 F.3d at (11th Cir.2004). gap statutory left a in the hand, scheme On the other Chevron, must be filled the USDA. See ambiguous the statute is silent or (“The issue, at 467 U.S. 104 S.Ct. respect particular we obligated agency’s interpre power to defer to the to ad Prichard, City prior 6. In Bonner v. 661 F.2d sions of the Fifth Circuit handed down (11th Cir.1981) (en banc), September this to the close of business on binding adopted precedent all deci pro prohibited created and were therefore from dis- eongressionally minister law, formulation necessarily requires tributing nursery the gram stock under Florida fill making any of rules to policy of and the Agency crops concluded that their left, explicitly, by gap implicitly or Con were not for commercial sale.7 (internal citations and alterations gress”) argue Agency The Mahons that the vio- omitted). such, court must defer As this 1480.2(b) (2002), § lated 7 C.F.R. which interpretation of the term agency’s to the provides county that “FSA State and com- it long “commercial sale” so is reason representatives mittees and do not have able. authority modify any to or waive of the The terms and conditions for the 2001 1480],” provisions by deferring to [Part Crop Program Disaster are set and 2002 by incorporating rely- Florida law and (2002). forth under 7 C.F.R. Part 1480 ing upon compliance regis- with Florida’s purpose § See 7 C.F.R. 1480.1. The tration to requirements eligibili- determine program provide is to disaster assistance ty for federal disaster assistance. As who incurred due to producers to losses argument, though obliquely alternative in occurring disasters 2001 and 2002. Id. stated, Shelby John and Mahon assert 1480.4(a) provides § Specifically, C.F.R. if Agency even it is reasonable that “[producers in the States will United law, it upon relied Florida was neverthe- un- eligible be to receive disaster benefits arbitrary capricious less Agen- for the only they der this have suffered part cy apply to the statute when the state in eligible crops losses of 2001 or 2002 as a failed to send them a renewal notice as of a disaster or related condition result 581.131, required by section Fla. Stat. See ” .... nursery crops, For ornamental “di- 581.131(8), § Fla. (providing Stat. ... are limited to ornamen- saster benefits department provide shall to each “[t]he nursery in crops grown tal that were subject person to this section written no- container or controlled environment for tice days prior and renewal forms 60 property commercial sale on owned or annual informing person renewal date producer, leased and cared for and registration certificate renewal managed using good nursery growing fee.”). simply, date and the Put practices.” (emphasis 7 C.F.R. 1480.18 Shelby argue John added). Agency’s application selective Flori- Agency denied John and Shel arbitrary capricious. da statute was by Mahon disaster relief because the This Court finds that while it is reason- Agency nursery crops concluded that their rely Agency upon able for the to state law were not for “commercial sale.” In order provide meaning to to an undefined statu- the term provide to “commercial sale” with term, Chevron, tory see U.S. Agency meaning, looked Florida 104 S.Ct. at the USDA acted arbi- law, provides any person that before trarily selectively in applying part can sell or distribute stock in the the Florida statute. Under section state, they must registered be with the 581.131, Stat., in Fla. order to sell their 581.131, state. Fla. Stat. Since Florida, in crops citrus the Mahons must registered Mahon were not disaster, However, register with the state at the time of the with the state. provides carriage shipment any nursery except law “[i]t 7. Florida is unlawful for or stock dealer, any nurseryman, agent, compliance provisions plant stock with the of this sell, transfer, give away, chapter pursuant law.” broker move or and the rules made moved, 581.121, carry, ship, cause to be or deliver for Fla. Stat. provide required state is them with Mahon further sixty days prior to the annual re- notice claim arbitrarily by acted During the newal date. denying them benefits while the evidence testified that proceedings, Mahons demonstrated that over one million dollars statutorily never received the non-registered pro was awarded to other notice, quired and the failed to ducers the State of Florida. Such dis present rebutting testimony. this evidence parate similarly pro treatment of situated an agency’s This court cannot condone ducers, they argue, demonstrates choosing and practice picking por- mere Agency’s arbitrary capricious and treat statute, instead, tions of a state in cases addition, ment of their claims. John agency incorporate where an chooses to effect, in argue, and that should, it in- practicable, state statute arbitrarily the Agency capri acted and statute, just corporate the whole and not ciously ignoring they in evidence that were portions support isolated that a certain re- engaged in the “commercial sale” of citrus practice sult. This serves to insure con- considering trees. After these conten sistency predictability and in the adminis- tions, this court is convinced that process. trative Agency arbitrarily capriciously acted and selectively Aside from the issue of incor- by treating similarly producers situated only that porating provisions those were differently, by ignoring and evidence which Mahons, adverse to the another issue re- supported the Mahon’s claims. mains, and that is whether the Florida First, the record demonstrates that the apply statute should to the instant case at payments made to other uncerti- all. Although not addressed nurseries, fied who had suffered the same briefs, in their this Court notes that a loss, $325,958.00 type of and that even official in USDA another benefits case sim- paid very to uncertified nurseries opinion ilar to this one rendered an County originally same Committee that 581.131, only section Fla. would apply Stat. jected Mahon’s claims. crops eligible if a were claimant’s for sale Also, arbitrarily the Agency ig- chose to Thus, at the time of the disaster. establishing nore evidence and standard, this the fact that the Mahons Shelby Mahon were in the business of registered were not as commercial produc- selling citrus The record trees. demon- crops ers would be relevant if their they growing strates that had been and ripe ready were for sale at the time selling twenty years, citrus trees for over they destroyed.8 were The district court they and that continuing grow were to failed to consider whether section 581.131 175,000 trees, over in grown which were interpreted way, should be this or whether individual containers on their 126-acre applies regardless the statute of whether Why at the time of the disaster. crops ready the Mahons’ were for sale. they were growing many so trees on their Furthermore, troubling this court finds it per- farm in individual containers? For interpret apply that the USDA would Furthermore, sonal differently respect during section 581.131 so use?9 the ad- similarly to two process situated claimants. ministrative the Mahons intro- nothing Agency’s 8. This court finds in the record indi- It seems that this was indeed the However, cating crops ready whether the Mahon’s were conclusion. common sense seems at the person going plant for sale time of the disaster. Accord- to dictate that aif were to 175,000 use, i.e., ingly, may personal the district court need to deter- citrus trees for fruit, crops eligible pick they plant mine whether Mahon’s were and eat the would ground pots. for sale. trees in the and not in argue complied that he with the which fails receipts into evidence several duced regulations, applicable continuing applicable demonstrate regulations require personal did not his Logically, these nursery stock. sell their signature, interpreta- in or that the NAD’s they were suggest that indeed facts regulations was arbi- selling citrus tion of growing business discretion, trary, capricious, abuse trees. In- not in accordance with law. otherwise granted agencies While true stead, baldly he claims NAD interpreting Con deference tremendous accepted have his late should formulating gressional directives by concluding that the district court erred regulations, that deference implementing had not exhausted his administra- that he acts as arbi end when must any citing remedies. Without federal tive regard the law trarily obtusely with that the district court authority, he claims here. See as the USDA did and facts power to find that he had the inherent Park, Inc. v. to Preserve Overton Citizens pro- the substantially complied with NAD 824; at 91 S.Ct. Volpe, 401 U.S. attorney’s prior on his cedures based Johnson, F.3d at 1273- Sierra Club his to quests appeal, to and because failure that the Accordingly, requires the law 74. the “technical details” of the comply with vacated. of the district court be decision regulations been “inadvertent.” had We arguments are without E. find these merit. appeal, to Paul Mahon’s Turning 11.6(b)(1), § to 7 C.F.R. once under 7 Pursuant note that U.S.C.

we first notice that his 6912(e), an Paul Mahon received claim party may bring § a before denied, he had been had they must “exhaust for disaster relief action in federal court the adverse decision. thirty days appeal to appeal procedures estab all administrative fil- prior he mediation to requested In Since Secretary.” implementing the lished however, thirty-day directive, pe- the ing appeal, the an explicit Congressional this 11.2(b) § and he had the balance riod was tolled agency promulgated C.F.R. remaining period in that to file an (2002), days provides person that a “shall concluded. See 7 after appeal an decision before a mediation seek review of adverse 11.5(c)(1). Officer,” § “may further C.F.R. Hearing seek Director,” seeking review before ap- that his received notice Paul Mahon judicial review. See also C.F.R on November plication was denied 11.13(b) (2002). Thus, § we deter must twenty- 2001. On December did ex mine Paul Mahon indeed whether later,10 days gave he to two calendar notice remedies. haust his to his he intended exercise agency such, thirty- As right this mediation. Paul contention Mahon’s tolled and he had a total of rejection day period was the NAD’s court should reverse days appeal an after mediation ground eight file appeal on the of his administrative im- Taking the later mediation signed concluded. personally not filed a that he had 28, 2002,11 May as the date of rele- thirty-day passe request appeal within date, days, or eight Mahon had by 7 vant Paul established time limit 5, 2002, 11.6(b)(1) (2) (2002). However, appeal. to submit an he until June § Mahon, 11.1, denying his "[d]ays a to Paul 11. In letter sent According to 7 C.F.R. 10. NAD contended request appeal, speci- days unless otherwise mean calendar impasse April an on mediation reached fied.” a appeal expired, participant, copy the time to had shall include Before reviewed, attorney requested ap- Paul Mahon’s decision to the adverse be peal May request available, but the was along with a brief statement of Mahon. personally signed by not Paul participant’s believing reasons for fact, a personally Paul Mahon did not file decision, agency’s or the failure signed request appeal for an with the act, wrong. participant also days agency until June nine after a copy request shall send of the for a appeal period expired. had hearing agency, may send a copy the adverse decision to be re- 11.6(b) provides appli- 7 C.F.R. agency, viewed to the but failure to do procedures that followed cable must be grounds either will not constitute requesting when from an ad- appeal. a dismissal Instead of pro- That verse decision. section hearing, participant may request a vides as follows: record review. 11.8, obtain a hearing To added). (emphasis Id. participant personally request Accordingly, must days plain regulation than text of the hearing requires such later after participant person seeking appellate the date on which the first review must re- received notice of the adverse decision quest thirty days such review within partici- or after the which the date on personally sign request.12 must Since pant receives notice of the Director’s undisputed it is that Paul Mahon failed to appeal- determination that a decision is sign request applicable within the thir- .... able ty-day period, we find that he failed to remedies, request hearing A for a shall be exhaust his administrative and is writing personally signed by seeking judicial and the barred from review.13 noted, although experlise, 12. As the district court sec- trative exhaustion of administrative 11.6(b) favored, ‘'hearing,'' tion uses the term the sec- may remedies is but be a excused participant tion is even if a does exceptions general limited number request hearing. regula- not an actual Doe, Honig rule. See 484 U.S. 326-27 tions, whole, contemplate when read as a (1988); 108 S.Ct. 98 L.Ed.2d 686 § procedural 11.6 as the sole mechanism for Prop. see also Ace and Cas. Ins. Co. v. Federal party seeking appeal agency's a an adverse (8th Crop Corp., Ins. 440 F.3d 996-97 11.5(c)(1) e.g., (pro- decision. See Cir.2006) (explaining the distinctions between viding "participant stops running that non-jurisdictional jurisdictional and exhaus 30-day period during participant which a requirements finding tion that the admin may appeal Appeals National [the Division] requirement istrative exhaustion set in 7 out 11.6(b)(1) ...”). under However, jurisdictional). U.S.C. 6912 is need this Court not resolve that issue in the arguments indirectly 13. Paul Mahon's raise proffered instant case because Paul Mahon’s impression an issue of first for this Court. excusing reasons for his failure to exhaust Specifically, require whether the exhaustion compli administrative remedies—substantial 6912(e) jurisdictional ment found in section is regulations, ance with the statute and and his non-jurisdictional Supreme in nature. The comply inadvertent failure to with the techni explained jurisdiction Court has a that under regulations— cal of the details statute and the al an statute exhaustion of administrative recognized exceptions do not fall within the requirement remedies waived, cannot be excused or non-jurisdictional requirements. exhaustion party’s and a failure to exhaust serves See, e.g., Cochran v. United States Health Care jurisdictional Weinberger as a See v. Sal bar. Admin., (11th 749, 765-66, Fin. F.3d fi, Cir. 422 U.S. 95 S.Ct. 2466- 2002) (1975). contrast, (finding non-jurisdictional By admin 45 L.Ed.2d 522 non-jurisdictional requirements may by statute exhaustion be codifies com istrative which, futile, passed principle mon law exhaustion to them if resort would be or if such, judicial economy remedy inadequate). for reasons adminis is As Paul Deputy action here. The agency due the III. Conclusion interpreting any not federal Director was reasons, For the above stated he, as the district statute. Neither was Mahon’s spect to John believed, any interpreting federal arbitrarily acted find that the USDA we Indeed, regulation. only “in- claims for denying their capriciously terpretation” “[t]he he offered was Pro- Crop the 2000 Disaster relief under persons is intended to reimburse program Mahon, Paul conclude As to we gram. ornamental nurs- selling in the business of to exhaust available adminis- that he failed ery crops, persons growing plants and is therefore barred trative remedies Thus, judicial review. we seeking from for their own use.” The do not deny- order the district court’s VACATE dispute interpretation. Shelby Mahon’s motion for ing Director decided one Deputy summary summary judgment granting plants question: whether Mahons’ USDA, and RE- in favor of the

judgment This grown for commercial sale. court for further MAND to the district And, of fact question questions of fact.1 opinion. consistent with this proceedings adjudi agency through resolved Mahon, judgment Paul respect to With catory hearing process properly re court is AFFIRMED. of the district by a court under the substantial viewed to Preserve evidence test. Citizens Over COX, Judge, specially Circuit Park, Volpe, Inc. v. 401 U.S. 413- ton concurring: 814, 822-23, L.Ed.2d 136 91 S.Ct. join I judgments, I in the concur 556, 557); §§ see (citing 5 U.S.C. majority address- part opinion of the 706(2)(E). also 5 U.S.C. join I do not ing appeal. Paul Mahon’s Here, addressing Deputy Director’s decision part opinion my grown Mahon’s because plants that the Mahons’ were not majority. from that of the analysis differs supported for commercial sale is not reaching record evidence. In substantial applied pro- in this case regulation The conclusion, Deputy Director relied his nursery crops vides disaster benefits for the Mahons were on one fact in a container or con- “grown that are —that delinquent paying registration in the $552 for commercial sale on trolled environment requires for the sale fee that Florida law producer owned or leased property 1480.18(d) (2000). But, nursery ....” the record contains stock. court, concluding that Chevron def- district evidence relevant to undisputed other due, summary granted judg- erence grown were question plants of whether agency, affirming to the the denial of ment commercial sale. addition for for disaster bene- application the Mahons’ growing of the Mahons’ citrus large scale upon Deputy Director’s find- fits based who conducted the operation, the officer ing plants grown were not found: the Ma- evidentiary hearing commercial sale. nursery in business for hons had been years; plants that all of the about and the disagree

I with the district court sought payment had is which the Mahons majority’s view that Chevron deference that the determination was regardless whether we “I have concluded Mahon’s claim fails jurisdictional not. I find that section 6912 is fact that was in error. based on a material determination.” therefore vacate the Deputy 1. The Director’s decision acknowl- edges on a determination of fact. it rests containers and grown been individual sale; the Mahons

intended for dur- engaged business regis- were not

ing period the Florida statute. pursuant

tered all agency’s failure to consider of this

undisputed finding evidence renders its unsupported by

fact substantial evidence. America,

UNITED STATES

Plaintiff-Appellee, JOHNSON,

Burtram Defendant-

Appellant.

No. 06-13564

Non-Argument Calendar. Appeals,

United States Court of

Eleventh Circuit.

May

Case Details

Case Name: Mahon v. United States Department of Agriculture

Court Name: Court of Appeals for the Eleventh Circuit

Date Published: May 10, 2007

Citation: 485 F.3d 1247

Docket Number: 06-12793

Court Abbreviation: 11th Cir.