USDA’s National Appeals Division: A Checklist for Farmers

Farm producer and USDA program customers increasingly are turning to USDA’s National Appeals Division (NAD) as the best option when they find themselves facing an adverse decision from a USDA agency.   NAD offers a far quicker, more user-friendly, and more inexpensive way to get an objective “second opinion” compared with suing the agency in Federal court or under formal legal arbitration.

NAD has built a corps of hearing officers in 57 locations around the country, able to reach almost any local area.  In 2012 alone, farmers and USDA program users filed  2,197 cases with NAD.  NAD hearing officers also conducted 1,003 in-person or telephonic hearings and record reviews, and issued 1,760 determinations.  According to NAD statistics, the outcome in these cases was favorable to appellants in 36 percent of the cases.

Before bringing a case to NAD, it is important first to do your homework.  Here is a quick checklist of questions to ask yourself:

  1. Is your gripe actually against USDA?.

NAD can only hear appeals from adverse decisions by USDA agencies like FSA, RMA, NRCS, or Rural Development.  Make sure your complaint isn’t against someone else, such as a crop insurance agent, or a farm seed or equipment supplier.  Do you have an actual letter from USDA turning you down on something, or a ruling against you?  If not, then NAD may be the wrong place to go.

  1. Does the gripe involve you personally?

NAD appeals must involve an agency decision involving an individual.  You, the farmer or program user, must personally sign the appeal.  (Your lawyer can’t do it for you.)  NAD generally can NOT hear complaints against rules of “general applicability,” that is, general policy pronouncements that apply to everyone.  If FSA or RMA makes a program-wide decision you don’t like, then call your Congressman, not NAD.

  1. Are the rules on your side?

NAD decisions must be consistent with agency regulations.  NAD can only exercise discretion to the same extent as the agency.  If an agency like FSA can apply “equitable relief,” then so can the NAD Director.  Since RMA cannot, then neither can NAD in RMA cases.  A NAD hearing officer cannot rule your way simply because they like you or think you got a raw deal.  You must base your argument on the rules.  Read them very closely before you go forward.

  1. Are you ready to tell your story?

The NAD gives you the choice to present your case in either: (a) a face-to-face, in-person hearing with a hearing officer, (b) a hearing by telephone conference call, or (c) a simple review of the paper records.  Usually, the most effective method is the in-person hearing, where you can tell your own story in your own words.  Think, in advance, what you want to say, and be ready to answer questions.  Don’t worry too much whether you are a “good talker.”  If you organize your material well and tell the truth, the hearing officer will put aside any “style points.”

  1. Do you have good records?

In a NAD appeal, you, the farmer, have the burden of proving that USDA made a mistake in applying its program rules.  Records are essential.  When you file an appeal, the USDA agency must send you a full official “record,” including all documents it used to reach its decision.  But this often only tells half the story, the agency’s half.  To show how the agency went wrong, you often need more.  If your own records have gaps, make a quick visit to your local USDA office (or crop insurance agent on RMA issues).  Beyond agency forms, see if you have diaries, letters, e-mails, bank statements, or anything else to prove your version of events.

  1. Do you have witnesses?

Often, the strongest way to tell your story is with witnesses, and NAD allows to you present both fact witness as well as subject matter experts.  In some cases, you can even request a NAD subpoena requiring the attendance of agency staff to answer questions.

  1. Have you followed all the preliminary procedures?

FSA usually allows farmers to bring their disputes first to a local County Committee, which often can be the most friendly, helpful forum for solving a problem, usually followed by an appeal to the State Committee.  NAD will check to see that you followed these internal review channels, giving the agency a fair chance to correct the problem first.  Many agencies offer “mediation,” where you and the agency meet with a neutral facilitator or try and reach an informal solution before filing an appeal.

  1. Should you hire a lawyer?

Farmers or program participants do not need a lawyer to bring a case before NAD.  NAD hearings are designed to be informal, avoiding technical rules of evidence that can trip up non-experts.   But lawyers can still be very helpful.  A lawyer can help analyze agency regulations, point out weaknesses in your case, organize your presentation at the hearing, and be a good advocate.  If you are concerned about cost, make sure the lawyer gives you a budget in advance and defines his role carefully.  Sometimes, you can lower the cost by doing most of the work yourself, and just have the lawyer check it at the end, or connect to the hearing by phone.  Also, make sure the lawyer is familiar with USDA programs specifically.  Don’t count on the hearing officer to do your homework for you or to be your advocate.  Their job is to be neutral.

  1. Should you appeal even if you might not win?

In any litigation, there is always risk – even if, in your own eyes, the case seems crystal clear.  Cases sometimes are decided on unexpected or narrow technical grounds – despite you or your lawyer doing a first rate job in telling your story.  Always be realistic about the chance of losing (and always distrust a lawyer who minimizes it).  Usually, the biggest factor for farmers in deciding whether to spend the time and money for a NAD appeal is the amount in dispute.  If an FSA adverse decision might cost a farmer $100,000 or more in lost program payments on other damages, it makes sense to spend the $20,000 or so to hire a lawyer and appeal.  If the case involves a much smaller amount, then perhaps it makes sense to appeal without a lawyer, or simply skip it.

  1. Is it better just to sue USDA in court?

Before you can sue a USDA agency in Federal court, the rules require that you first appeal your adverse decision to the NAD – at least through the hearing officer state – to obtain a final agency determination.  The NAD system gives farmers and USDA program users a first bite at the apple that is relatively quick and inexpensive.  NAD rules require a hearing within 45 days, and a decision 30 days after that.  An appeal to the Director could add another 45 days or so to the process.  The cost, even with a lawyer, is a fraction of formal litigation or arbitration.

Whether it makes sense for you depends on your unique individual circumstances.   We’re here to help, and would be happy to discuss with you any situation and answer your questions.   Please contact me at kackerman@ofwlaw.com

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