Dawson Farms, LLC v. Farm Service Agency

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
October 16, 2007
No. 06-30917
Charles R. Fulbruge III
DAWSON FARMS, LLC Clerk

Plaintiff-Appellant

v.

FARM SERVICE AGENCY, A Division of the United States Department of

Agriculture; COMMODITY CREDIT CORPORATION; UNITED STATES ARMY

CORPS OF ENGINEERS, VICKSBURG DISTRICT; NATURAL RESOURCES

CONSERVATION SERVICE, A Division of the United States Department of

Agriculture

Defendants-Appellees

Appeal from the United States District Court for the
Western District of Louisiana,

Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
The plaintiff, Dawson Farms, LLC, a farm operator, brought suit in the
district court against the Farm Service Agency (“FSA”), other agencies of the
Department of Agriculture (“USDA”), and the Corps of Engineers, seeking
declaratory and injunctive relief and damages. Dawson Farms alleges that the
FSA erroneously determined that Dawson Farms must return $107,172.31 in
USDA program benefits because of the company’s wetlands violations; and that
the agency erroneously intends to withhold future benefits from Dawson Farms
for the same reason. The district court dismissed the action for lack of subject
matter jurisdiction.
The threshold question in this case is whether 7 U.S.C. § 6912(e) ---
providing that a person shall exhaust administrative appeal procedures before
bringing a court action against the Secretary of Agriculture, his department or
his delegate --- is a jurisdictional prerequisite to subject matter jurisdiction or
merely an element of that action. We hold that section 6912(e) is not a
jurisdictional rule but the codification of a judicially developed requirement, for
which there are recognized exceptions and excuses. In this case, the district
court correctly determined that the farm operator failed to exhaust
administrative appeal procedures, but it erred in concluding that this failure
deprived it of subject matter jurisdiction. Instead of dismissing forthwith on
that basis, the district court was required to next address whether the operator
had shown that, under the circumstances of this case, it was excepted or excused
from the exhaustion requirement. Nevertheless, we affirm the district court’s
result in dismissing the action, because the farm operator has pointed to no basis
in the record or reason in law that supports its exception from the requirement
of exhaustion of administrative appeal procedures or that excuses its failure to
exhaust all such procedures in this case.
Statutory-Regulatory Structure
1. Eligibility for USDA Benefits under “Swampbuster” Provisions
Under the so-called “Swampbuster” provisions in the Food Security Act of
1985, codified at 16 U.S.C. § 3821, et seq., farmers become ineligible for crop
benefits if the USDA determines that the farmer converted wetlands for

2
agricultural purposes. Nat’l Wildlife Fed’n v. Agric. Stabilization and
Conservation Serv., 901 F.2d 673, 674 (8th Cir. 1990) (quoting 16 U.S.C. § 3821)
(“‘[A]ny person who in any crop year produces an agricultural commodity on
converted wetland shall be ineligible for’ federal agricultural subsidies with
regard to that commodity.”). The USDA defines “converted wetland” as “a
wetland that has been drained, dredged, filled, leveled, or otherwise
manipulated (including the removal of woody vegetation or any activity that
results in impairing or reducing the flow and circulation of water) for the
purpose of or to have the effect of making possible the production of an
agricultural commodity . . .” 7 C.F.R. § 12.2(a); see also 16 U.S.C. § 3801(a)(4).
The Food, Agriculture, Conservation and Trade Act (“FACTA”), enacted in 1990,
strengthened the Swampbuster provisions. Under FACTA, the USDA may
penalize the conversion of wetlands if agricultural commodity production is
possible on the converted land, even if no such commodity is actually produced.
16 U.S.C. § 3821(c); 7 C.F.R. § 12.4(a)(3). FACTA also added a stronger penalty:
a conversion may incur a total loss of all USDA benefits on all land the
individual controls until the wetland is restored or the loss mitigated. 16 U.S.C.
§§ 3821(c), 3822(i); see also Holly Hill Farm Corp. v. United States, 447 F.3d 258,
263 (4th Cir. 2006).
Two USDA agencies, the National Resource Conservation Agency
(“NRCS”) and FSA, are responsible for the day-to-day administration of the
Swampbuster provisions. The NRCS conducts technical determinations of
wetlands conversions for agricultural purposes and also evaluates restoration
and mitigation plans. 16 U.S.C. § 3822(j); see also 7 C.F.R. § 12.6(c). Once NRCS
determines that an individual violated the Swampbuster provisions by
converting wetlands, the FSA will determine (1) whether the individual is
ineligible for USDA benefits; (2) whether the violations were made in good faith;

3
and (3) whether any other exemptions apply to the wetlands conversion. 7 C.F.R.
§§ 12.6(a), 12.6(b)(3)(viii).
Non-USDA agencies have independent and concurrent authority over
determining federal regulatory effects of activities in respect to wetlands.1 The
Clean Water Act and corresponding regulations invest the Corps of Engineers
with authority to issue permits and regulate the dredging and filling of certain
wetlands. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 139
(1985); see also In Re Needham, 354 F.3d 340, 344-45 (5th Cir. 2003). If an
individual obtains authorization from the Corps of Engineers, the individual can
convert his wetlands without losing eligibility for USDA benefits. See
Protection of Wetlands, 62 Fed. Reg. 61215, 61216 (Nov. 17, 1997) (“A person
may also remain eligible for USDA program benefits if the action has been
permitted by the Army Corps of Engineers . . . via the individual permit
process.”). The Corps of Engineers can also, as in this case, grant an after-the-
fact permit, which allows an individual to maintain his eligibility for USDA
benefits despite having converted his wetlands. Id.; 33 C.F.R. § 326.3 (e)(1). If
the Corps of Engineers identifies a particularly serious violation of the Clean
Water Act, that agency may recommend the matter to the Environmental
Protection Agency (“EPA”) for administrative penalties. See 33 U.S.C. §
1319(g)(1)(B) (investing both the EPA and Corps of Engineers with authority to
issue administrative penalties); 1989 Memorandum Between The Department
of the Army and the Environmental Protection Agency, Federal Enforcement for
the Section 404 Program of the Clean Water Act, available at

1
While the Corps of Engineers and the EPA have concurrent authority over
wetlands, the NRCS and FSA are the lead agencies in regulating the conversion of
wetlands for agricultural purposes. See Memorandum of Agreement, January 6, 1994,
Concerning the Delineation of Wetlands for Purposes of Section 404 of the Clean Water Act
and Subtitle B of the Food Security Act, available at http://www.fws.gov/policy/m0222.pdf.

4
http://www.epa.gov/owow/wetlands/ regs/enfmoa.html (identifying the EPA as
the lead agency for flagrant violators and allowing the Corps to recommend to
the EPA that “administrative penalty action may be warranted.”). The EPA has
the authority to issue monetary penalties and enforce environmental laws,
including the Clean Water Act, through administrative and legal channels. See
33 U.S.C. § 1319(g)(1)(B); 1989 Memorandum Between The Department of the
Army and the Environmental Protection Agency, Federal Enforcement for the
Section 404 Program of the Clean Water Act, available at
http://www.epa.gov/owow/wetlands/ regs/enfmoa.html.
2. Appeals of USDA decisions
The underlying dispute concerns Dawson Farms’ ineligibility for USDA
benefits under the Swampbuster provisions. While the Commodity Credit
Corporation, a wholly-owned government corporation under the USDA,
administers the nation’s major agricultural commodity programs, including the
benefits program in this case, Deaf Smith County Grain Processors v. Glickman,
162 F.3d 1206, 1207 (D.C. Cir. 1998), the FSA is the agency invested with the
operational authority to make benefits eligibility determinations. Id. FSA
eligibility determinations adhere to the general appeals processes within the
USDA. Normally, appeals of FSA eligibility decisions, and also NRCS technical
determinations, first proceed to the local arms of the FSA, the County and State
Committees. See 7 C.F.R. § 12.6; 7 C.F.R. § 780.6 (FSA appeals); 7 C.F.R. §
780.11 (NRCS appeals); see generally United v. Dierckman, 201 F.3d 915, 918
(7th Cir. 2000). At any point, individuals can appeal to the highest appellate
authority within the USDA, the National Appeals Division (“NAD”). See 7
U.S.C. § 6996-998; see generally 7 U.S.C. §§ 6991-7002 (2000); see also 7 C.F.R.
§ 11.1-3 (2002). The district court then can review and enforce any NAD
decision. See 7 U.S.C. § 6999. Before a person may bring an action against the

5
Secretary or his department or his delegate, however, the person shall exhaust
all administrative appeal procedures as provided by 7 U.S.C. § 6912. Section
6912 states:
Exhaustion of administrative appeals
Notwithstanding any other provision of law, a person shall exhaust
all administrative appeal procedures established by the Secretary
or required by law before the person may bring an action in a court
of competent jurisdiction against--
(1) the Secretary;
(2) the Department; or
(3) an agency, office, officer, or employee of the Department.

The principal issue of law presented in this case is whether 7 U.S.C. § 6912(e)
requires the exhaustion of administrative remedies as a prerequisite to federal
court subject matter jurisdiction or merely codifies the judicially developed
principle under which exhaustion of administrative remedies is favored, but may
be excused by a federal court under a limited number of exceptions. Two of the
three Circuits that have spoken on the issue have concluded that §6912(e) is not
a jurisdictional prerequisite. See Ace Prop. and Cas. Ins. Corp. v. Fed. Crop Ins.
Corp., 440 F.3d 992, 999-1000 (8th Cir. 2006); McBride Cotton and Cattle Corp.
v. Veneman, 290 F.3d 973, 980 (9th Cir. 2002) (concluding that section 6912(e)
is non-jurisdictional); but see Bastek v. Federal Crop Ins. Corp., 145 F.3d 90, 94-5
(2d Cir. 1998) (concluding that section 6912(e) is jurisdictional). Taking their
cue from the Supreme Court in Weinberger v. Salfi, 422 U.S. 749, 757 (1975), Ace
Prop. and McBride point out that section 6912(e) does not contain the “sweeping
and direct” language barring federal court jurisdiction without administrative
exhaustion, as did the Social Security Act’s exhaustion provision in Salfi,
codified at 42 U.S.C. § 405(h). Rather, they point out, section 6912(e) is akin to
non-jurisdictional statutory exhaustion provisions found in statutes like the
Prison Litigation Reform Act (“PLRA”), codified at 42 U.S.C. § 1997e(a). We

6
agree with the Eighth and Ninth Circuits that section 6912(e) is not a
jurisdictional prerequisite for the reasons stated below.
Factual and Procedural Background
Dawson Farms, LLC (“Dawson Farms”) owned land with wooded wetlands
in Franklin Parish, Louisiana. At issue are the company’s two tracts of land,
Tract No. 2929 (“Henderson Place”) and Tract No. 10733 (“Macgruder Place”).
Tract 2929
In 1995, before proceeding to clear this tract, Mr. Dawson, proprietor of
Dawson Farms, requested that the NRCS survey this tract for wetlands. An
NRCS conservationist inspected Tract 2929 and informed Mr. Dawson of the
presence of wooded wetlands on the tract. Mr. Dawson was advised during the
visit that he would need to contact the Corps of Engineers for a Clean Water Act
permit before manipulating the wetlands areas. The conservationist also told
Mr. Dawson that any manipulation of the wetlands areas without a permit
would impact his eligibility for USDA benefits. Later that month, NRCS notified
Dawson Farms by certified letter of its determination that Dawson Farms had
cleared 1.35 acres of wooded wetlands, jeopardizing its eligibility for USDA
benefits. After Dawson Farms requested reconsideration, an NRCS field visit
was conducted. In its reconsideration decision, the NRCS concluded that the
conversion had “minimal effects,” and allowed Dawson Farms to retain its
eligibility. The NRCS rulings identified all the wetland areas on Tract 2929. In
this same decision, NRCS also advised Mr. Dawson that any discharge of
dredged or fill material in the wetlands areas would require a Corps of
Engineers permit.
As part of a random FSA status review in 2002, the NRCS reviewed the
status of Tract 2929 and found extensive manipulation of the tract’s wetlands
beyond the previously cleared 1.35 acres. NRCS notified Dawson Farms of this

7
Swampbuster violation in a Preliminary Technical Determination (“PTD”) on
August 15, 2002. See 7 C.F.R. § 614.2 (n). In this PTD, the NRCS advised
Dawson Farms that the determination could be reviewed by a field visit or be
submitted to mediation if Dawson Farms requested either option within 30 days,
i.e., before September 14, 2002. The PTD also stated that if Dawson Farms did
not so request, the PTD would become final, and that the time for appeal from
the PTD would elapse thirty days thereafter, i.e., on October 16, 2002. See 7
C.F.R. § 780.15. On May 15, 2003, the County Committee advised Dawson
Farms in a letter that the PTD became final on September 14, 2002. In the same
letter, the Committee also notified Dawson Farms that it was, therefore,
ineligible for crop benefits from 2002 onwards and had thirty calendar days to
appeal its decision. The Committee listed three appeals options: application for
reconsideration by the County Committee; an appeal to the State Committee;
and/or an appeal to the NAD. More than thirty days later, on July 8, 2003,
Dawson Farms sought reconsideration by the County Committee contending: (1)
no wetlands were converted to farmland; and (2) Dawson Farms had requested
a field visit but was never granted one. In its reconsideration decision, on
August 18, 2003, the County Committee maintained its position that Dawson
Farms was ineligible for USDA benefits and concluded that “[t]he only thing that
would be appealable would be the amount of [benefits to be returned]”and not
the final determination that wetlands were converted for agricultural
production. On August 25, 2003, Dawson Farms responded by asking the
County Committee, again, for a reconsideration.
While the foregoing was unfolding, on March 24, 2003, the Corps of
Engineers, pursuant to its concurrent authority under the Clean Water Act,
issued a Cease and Desist order to Dawson Farms barring any further
manipulation of wetlands on Tract 2929. The Corps of Engineers determined

8
that the manipulation of wetlands identified by the NRCS in its 2002 status
review was a flagrant violation of the Clean Water Act, and recommended the
matter to the EPA as a case for possible legal action and monetary penalties. See
33 U.S.C. § 1319(g)(1)(B); see also 1989 Memorandum Between The Department
of the Army and the Environmental Protection Agency, Federal Enforcement of
the Section 404 Program of the Clean Water Act, at III.D, available at
http://www.epa.gov/owow/ wetlands/regs/enfmoa.html.
In a September 4, 2003 letter, Dawson Farms attempted to delay the
enforcement of the Corps of Engineers’ Cease and Desist Order by notifying the
Corps of Engineers that it recently filed an “after-the-fact” permit application
with the Corps of Engineers. The EPA filed an administrative complaint for
monetary penalties against Dawson Farms on November 3, 2003; a Regional
Judicial Officer,2 an Administrative Law Judge within the EPA, was assigned
the case. See 40 C.F.R. §§ 22.4, 22.5, 22.13-15, 22.38;
After Dawson filed its answer, but before any hearing had taken place, the
EPA filed a motion to dismiss without prejudice on February 6, 2004. The EPA
did not immediately explain the reason for its motion. See 40 C.F.R. 22.14(d).
Dawson Farms did not oppose the motion. On February 24, 2004, the Regional
Judicial Officer issued an opinion that granted the EPA’s unopposed motion to
withdraw and dismiss without prejudice. In deciding whether a case should be
dismissed without prejudice, the Officer considered several factors outlined in
United States v. Outboard Marine Corp., 789 F.2d 497, 502 (7th Cir. 1986) and
other Circuit cases. He primarily weighed the EPA’s failure to provide a
justification for the withdrawal against the lack of prejudice to Dawson Farms,

2
The Regional Judicial Officer is an independent employee of the EPA who hears
and adjudicates EPA administrative cases. See 40 C.F.R. § 22.4(b). The parties’ filings
pertaining to this case and the Officer’s opinion are part of the record on appeal.

9
since the withdrawal occurred only three months after the complaint was filed
and Dawson Farms did not incur significant time or cost in preparing for trial.
Since the Officer found the lack of prejudice outweighed the EPA’s failure to
justify the withdrawal, the Officer dismissed the complaint without prejudice
and notified both sides with a written opinion justifying the case’s dismissal
without prejudice. Dawson Farms did not appeal the Officer’s decision to
dismiss the case without prejudice.
Meanwhile, the Corps of Engineers insisted Dawson Farms continue with
the permit process. Dawson Farms contended in a letter to the Corps of
Engineers that the EPA’s withdrawal released it from all charges of wetlands
violations and obviated any need to continue with the after-the-fact permit
process. After the Corps of Engineers consulted with the EPA about Dawson
Farms’ contention, the EPA sent Dawson Farms a letter on August 17, 2004
providing the reason for its motion for withdrawal. The EPA explained that it
voluntarily filed its motion for withdrawal, because it wanted to let Dawson
Farms continue the permit process with the Corps of Engineers. It notified
Dawson Farms that the withdrawal only released Dawson Farms from possible
monetary penalties for its Clean Water Act violations that the EPA had
authority to impose for egregious violations of the Clean Water Act. Since the
EPA’s complaint only related to possible monetary penalties under the authority
of the EPA, the EPA notified Dawson Farms that the EPA’s withdrawal did not
affect other agency actions pertaining to the underlying wetlands violations. See
33 U.S.C. § 1319(g) (providing the EPA’s authority to impose administrative
penalties for Clean Water Act violations based on information from the Secretary
of the Army, who is the administrator of the Corps of Engineers). Dawson
Farms informed the EPA that it continued to dispute the determination that
wetlands were converted on this tract.

10
 Tract 10733
Dawson Farms purchased Tract 10733 in 1999 with the intention of
clearing the land for farming. Prior to clearing the land, Dawson Farms asked
NRCS to inspect the areas it believed might constitute protected wetlands.
Before the NRCS could inspect the lands, Dawson Farms proceeded to clear the
land relying on an NRCS Soil Survey, a published map showing the different
soils in the area. NRCS eventually inspected the cleared areas and found hydric
soils, a wetlands indicator, in the cleared areas on October 20, 1999. NRCS
determined that Dawson Farms cleared some 3.1 acres of wetlands on Tract
10733 in violation of the FSA. 16 U.S.C. § 3801, et. seq. After receiving notice
of the violation, Dawson Farms initially appealed to the County Committee in
May 2000, but then submitted an application for a “good faith” determination by
the County Committee on June 20, 2000. See 7 C.F.R. § 12.5 (a)(5) (allowing
individual to apply for a “good faith” determination, which maintains
individual’s eligibility for USDA benefits for up to one year while taking
corrective actions). In its application, Dawson Farms noted that it had cleared
lands relying on the NRCS Soil Survey and carefully tried to avoid potential
wetland areas. Dawson Farms also added that “[Dawson Farms] do[es] not plan
to dispute the technical determination made by the NRCS team.” Dawson
Farms continued, “[Dawson Farms] [is] anxious to work with the NRCS to
develop a mitigation agreement to restore wetland values according to NRCS
requirements.” On July 28, 2000, the County Committee ruled in Dawson
Farms’ favor and found that “Dawson Farms acted in good faith without intent
to violate.” The County Committee also informed Dawson Farms in the ruling
letter that “[a] wetland mitigation plan must be developed with NRCS and
agreed upon before the exemption from ineligibility under the good faith
provisions will apply.” In a letter to the NRCS on September 19, 2000, Dawson

11
Farms acknowledged that “[i]n order to regain eligibility for USDA benefits, we
were given the choice of two options: (1) Restore the wetland. (2) Establish a
mitigation site . . . [Dawson Farms] ha[s] chosen the second option.” (emphasis
added). NRCS responded to Dawson Farms’ letter on January 26, 2001
acknowledging that Dawson Farms had chosen the second option. The letter
also listed the requirements for establishing a mitigation site. In April, 2001,
NRCS and Dawson Farms signed a mitigation agreement, which defined
Dawson Farms’ obligations in establishing the mitigation site.
In its Wetlands Mitigation Agreement (“Agreement”), Dawson Farms
agreed to implement the Agreement within 12 months from the date of
signature. Dawson Farms signed the Agreement on June 21, 2001. The
Agreement notified Dawson Farms that failure to comply within 12 months may
subject Dawson Farms to loss of and/or refund of USDA benefits. See National
Food Security Act Manual (NFSAM) § 517.31c.3 In September 2001, the Corps
of Engineers notified Dawson Farms that its conversion of wetlands would also
violate the Clean Water Act, but the Corps of Engineers would issue an “after-
the-fact” permit contingent on the fulfillment of the mitigation agreement.
More than 12 months elapsed without Dawson Farms’ fulfilling its
obligations under the Agreement. Dawson Farms requested an extension from
the USDA on March 3, 2003. NRCS notified Dawson Farms that the Agreement
was not fulfilled within the required time but nevertheless approved an
extension to November 1, 2003. The NRCS notified Dawson Farms in the letter
granting the extension that after November 1, 2003, “‘[a]s a result of non-
compliance, [Dawson Farms] will be subject to loss of USDA benefits and/or may

3
The NFSAM describes more specifically the technical application of the
Swampbuster provisions. Barthel v. U.S. Dep’t of Agriculture, 181 F.3d 934, 937 (8th Cir.
1999).

12
have to refund prior USDA program benefits. Additionally the Corps of
Engineers . . . may decide to pursue penalties under . . . the Clean Water Act.”
There is no indication in the record that Dawson Farms ever fulfilled its
obligations under the Agreement.
This Lawsuit
Dawson Farms brought this suit on March 2, 2005 against the FSA,
NRCS, Corps of Engineers, and Community Credit Corporation to challenge the
withholding of benefits. Its complaint seeks an order compelling the named
agencies to pay withheld benefits and reverse any restrictions on continued
eligibility based on previous determinations of wetlands violations. The
defendants filed a motion for dismissal arguing that Dawson Farms failed to
exhaust administrative remedies and that the court was without subject matter
jurisdiction to excuse exhaustion. In its memorandum in opposition to the
defendants’ motion to dismiss, Dawson Farms argued that it had exhausted
administrative remedies and that the government was estopped from arguing
that Dawson Farms had failed to exhaust. The district court dismissed the
complaint, holding that it lacked subject matter jurisdiction because Dawson
Farms had not exhausted its administrative remedies. Dawson Farms appealed
and argues that it exhausted all administrative appeal procedures; and, in the
alternative, that the § 6912(e) exhaustion requirement is non-jurisdictional and
that the circumstances of this case entitle it to be excepted or excused from the
exhaustion requirement.
Analysis
A. Standard of Review

We review a dismissal for lack of subject matter jurisdiction under Fed. R.
Civ. P. 12(b)(1) de novo. Zephyr Aviation, L.L.C. v. Dailey, 247 F.3d 565, 570
(5th Cir. 2001).

13
B. Dawson Farms Did Not Exhaust All Administrative Appeal
Procedures in Respect to Either Tract

Dawson Farms first argues that the EPA’s withdrawal of its complaint
precludes the defendants as agencies of the federal government from taking
administrative actions against the farm operator because of federal wetlands
violations. This argument is without merit. Only a judicial or administrative
judgment or finding on the merits adverse to one agency would bind all related
agencies dealing with the same issue. See Sunshine Anthracite Coal Co. v.
Adkins, 310 U.S. 381, 402-03 (1940); Boone v. Kurtz, 617 F.2d 435, 436 (5th Cir.
1980). The EPA’s withdrawal of its complaint is not a judgment or finding on
the merits in respect to the wetlands violations, and therefore had no effect on
other agency actions. Instead, the EPA’s motion for withdrawal was granted and
the case was dismissed without prejudice. A dismissal without prejudice has no
legal effect and “leaves the parties in the same legal position as if no suit had
been filed.” In re Wilson, 442 F.3d 872, 880 (5th Cir. 2006) (quoting Hawkins v.
McHugh, 46 F.3d 10, 12 (5th Cir. 1995)).
Dawson Farms failed to exhaust administrative appeal procedures in
challenging the agency determinations of its wetlands conversion violations. In
respect to Tract 10733, Dawson Farms did not timely appeal the 2002 PTD that
concluded wetlands were converted. Dawson Farms appealed the 2002 PTD to
the County Committee on July 8, 2003, which was significantly past the date
(October 16, 2002) when the PTD became final and the time for appeal expired.
In its decision, the County Committee correctly noted that the PTD was no
longer appealable at that point in time.4 Regarding Tract 2929, Dawson Farms

4
The regulations also specifically allow for an appeal to the NAD when another
USDA agency deems an issue as not appealable. 7 C.F.R. § 11.6 (a); 7 C.F.R. § 780.5 (c).
Dawson Farms did not appeal to the NAD when the County Committee deemed the PTD

14
chose to pursue an “after-the-fact” permit and, and as a condition in its
application for a “good faith determination,” admitted that it would not dispute
the determination that wetlands were converted.5 Dawson Farms concedes that
it did not appeal to the NAD in respect to any adverse determination that
wetlands had been converted on either tract. Dawson Farms also did not timely
appeal any adverse determination in respect to its benefits eligibility; even if it
did ask for reconsideration at the County Committee level for Tract 2929, it
never appealed from the County Committee’s adverse decision to the final
administrative agency within the USDA, the NAD. The NAD itself is composed
of two internal appeal levels. Appeals to the NAD are heard before a hearing
officer. The officer’s conclusions can be appealed to the Director of the NAD, who
is considered the last administrative decision-maker for all USDA actions before
judicial review. 7 U.S.C. § 6998; Carpenter’s Produce v. Arnold, 189 F.3d 686,
688 (8th Cir. 1999). Because Dawson Farms never appealed the lower agencies’
decisions to the NAD, and any such appeals now would be untimely, Dawson
Farms failed to exhaust its administrative remedies. See Am. Airlines, Inc. v.
Herman, 176 F.3d 283, 289 (5th Cir. 1999) (“[E]xhaustion requires only that a
party seeking review appeal the decision at issue through all available
administrative channels.”); cf. Mahon v. USDA, 485 F.3d 1247, 1261-62 (11th
Cir. 2007) (“Since it is undisputed that [the plaintiff] failed to sign the request
[for an appeal] within the applicable thirty-day period, we find that he failed to
exhaust his administrative remedies, and is barred from seeking judicial
review.”).

decision as not appealable.
5
By pursuing the “after-the-fact” permit process, Dawson Farms implicitly concedes
wetlands were converted, since it is seeking a permit and authorization for an admittedly
unauthorized and completed conversion.

15
C. 7 U.S.C. § 6912(e) Codifies the Judicial Doctrine of Exhaustion

The defendant-appellees argue that 7 U.S.C. § 6912(e) jurisdictionally bars
any action or appeal in a federal court against the Secretary or his delegate by
a person who has not exhausted all administrative appeal procedures
established by the Secretary or required by law.6 Dawson Farms argues,
alternatively, that if it failed to exhaust administrative remedies, the district
court had subject matter jurisdiction and should have excused it from the
exhaustion requirement under the circumstances of this case. Whether the
district court had subject matter jurisdiction so as to excuse the exhaustion
requirement constitutes a question of law.
Accordingly, the threshold issue presented on appeal is whether 7 U.S.C.
§ 6912(e) is a jurisdictional or jurisprudential requirement for the exhaustion of
administrative remedies. If §6912(e) is a jurisdictional requirement, it deprives
federal courts of jurisdiction to consider excusing a failure to exhaust
administrative remedies. If the provision codifies a jurisprudential requirement,
however, it merely continues the self-imposed doctrine of judicial restraint,
leaving the federal courts with jurisdiction to consider excusing a failure to

6
The district court’s citation of 7 U.S.C. § 6999 for the proposition that Dawson
Farms’ failure to exhaust the administrative appeal procedures deprived it of subject
matter jurisdiction was in error. Section 6999 provides that “a final determination of the
[NAD] shall be reviewable and enforceable by any United States district court of competent
jurisdiction in accordance with chapter 7 of Title 5.” Section 6999 does not deal expressly
with the situation in the present case in which Dawson Farms brought this action in the
district court without exhausting all administrative appeal procedures or obtaining a final
determination by the NAD. For the reasons discussed at length in this opinion, it is
possible for a party to bring an action without such exhaustion and invoke federal
jurisdiction in exceptional and extenuating circumstances, but Dawson Farms has failed to
establish that it should be excused or excepted from the exhaustion requirement of §6912(e)
in this case. Section 6999 appears to have been added mainly to require that parties
seeking review or enforcement of final NAD determinations must do so in the district court
rather than the Court of Federal Claims. See Deaf Smith County Grain Processors, 162 F.3d
at 1213; Bruhn v. United States, 74 Fed. Cl. 749, 754-55 (Fed. Cl. 2006).

16
exhaust administrative remedies. See Ace Prop., 440 F.3d at 996.
The Supreme Court in Weinberger v. Salfi, 422 U.S. 749 (1975) established
the standard for determining whether a statutory exhaustion requirement is
jurisdictional rather than merely the preservation of a jurisprudential doctrine.
In Weinberger, the Court construed statutory provisions relating to the
exhaustion of administrative remedies in the Social Security Act, codified at 42
U.S.C. § 405(h), as jurisdictional. Importantly, the Court described the
exhaustion provision in that statute as “sweeping and direct” and “plain from its
own language” that no federal court action shall be brought unless exhaustion
was satisfied. Id. at 757-58. 42 U.S.C. § 405(h) explicitly mentions and deprives
all forums, including courts, of jurisdiction when administrative remedies are
not fully exhausted. Id. at 757-59 & n.4 (preventing review “by any person,
tribunal, or government agency” unless the exhaustion requirements provided
in the statute are fulfilled) (quoting 42 U.S.C. § 405(h)).
1. The Split Among the Circuits
The Eighth and Ninth Circuits have held that the 7 U.S.C. § 6912(e)
exhaustion requirement is jurisprudential rather than jurisdictional in its effect.
The Second Circuit’s contrary view is that § 6912(e) is a prerequisite to a district
court’s subject matter jurisdiction in a person’s suit against the Secretary, the
USDA, or any of its agencies, officers or employees.
The Second Circuit construed 7 U.S.C. § 6912(e) as a jurisdictional
requirement in Bastek, 145 F.3d at 94-95 (citing Gleichman v. USDA., 896 F.
Supp. 42, 44 (D. Me. 1995)). The Second Circuit, following Gleichman, concluded
that section 6912(e)’s statutory language “explicitly” and clearly requires
plaintiffs to exhaust administrative remedies within the USDA before federal
courts can have jurisdiction over the claims. The Second Circuit’s conclusion
that 7 U.S.C. § 6912(e) is jurisdictional results from its conclusion that Congress

17
would not have conditioned the right of action on the exhaustion of
administrative appeal procedures if it had intended the requirement to have the
same effect as a “judicially-developed” doctrine. Id.; see also McBride Cotton and
Cattle Corp. v. Veneman, 290 F.3d 973, 980 (9th Cir. 2002).
By contrast, the Eighth and Ninth Circuits construe 7 U.S.C. § 6912(e) as
a statutory codification of a jurisprudential requirement. Ace Prop., 440 F.3d at
999-1000; McBride, 290 F.3d at 980. Both decisions were issued subsequent to
the Second Circuit’s decision and persuasively criticize the Second Circuit’s
analysis.7 Ace Prop., 440 F.3d at 999; McBride, 290 F.3d at 980. Both decisions
concluded that the mere fact that a statutory provision demands exhaustion does
not turn the statutory provision into a jurisdictional bar.8 Ace Prop., 440 F.3d
at 999; McBride, 290 F.3d at 980. According to these decisions, the Second
Circuit thus incorrectly assumed that all statutory exhaustion requirements are
jurisdictional. Ace Prop., 440 F.3d at 999; McBride, 290 F.3d at 980. As the
Eighth and Ninth Circuits note, a statutory exhaustion requirement can be
merely a codification of a judicially developed exhaustion requirement that does
not necessarily deprive district courts of their doctrinal authority to excuse
exhaustion under certain circumstances. McBride, 290 F.3d at 980; Ace Prop.,
440 F.3d at 999. Thus, they concluded, whether a statutory exhaustion

7
In addition to the reasons below, the Eighth Circuit notes the Second Circuit’s
standard for finding a jurisdictional bar is lower than the Supreme Court’s standard
established in Salfi. The Second Circuit found only “explicit” language requiring
exhaustion; this “explicit” language does not rise to the Supreme Court’s “sweeping and
direct” standard for construing a statutory provision as a jurisprudential bar. Ace Prop.,
440 F.3d at 999 (quoting Salfi, 422 U.S. at 757).
8
The D.C. Circuit has even indicated that there is a presumption against construing
a statutory exhaustion provision as jurisdictional. See Avocados Plus Inc. v. Veneman, 370
F.3d 1243, 1248 (D.C. Cir. 2004). Statutory exhaustion provisions are rarely a
jurisdictional bar. McBride, 290 F.3d at 978; I.A.M. Nat’l Pension Fund Benefit Plan C v.
Stockton TRI Indus., 727 F.2d 1204, 1208 (D.C. Cir. 1984).

18
requirement is a jurisdictional requirement and not just a codification of the
jurisprudential requirement turns on the statutory language itself. Ace Prop.,
440 F.3d at 999; McBride, 290 F.3d at 980. Both decisions extensively analyzed
7 U.S.C. § 6912(e)’s statutory language and compared the language to similar
language in other statutes, most notably the Prison Litigation Reform Act
(PLRA),42 U.S.C. § 1997e(a).9 Ace Prop., 440 F.3d at 998-99; McBride, 290 F.3d
at 979-80. All other Circuits, including ours, have construed 42 U.S.C. §
1997e(a) as a codification of the jurisprudential exhaustion requirement.10 See
Ace Prop., 440 F.3d at 998. Accordingly, the Eighth and Ninth Circuits concluded
that 7 U.S.C. § 6912(e) was also only a codification of the jurisprudential
exhaustion requirement. Ace Prop., 440 F.3d at 998-1000; McBride, 290 F.3d
at 979-80.
The Eighth Circuit in Ace Prop., 440 F.3d at 998, concluded that 7 U.S.C.
§ 6912(e), like 42 U.S.C. § 1997e(a), only addresses whether a person should
exhaust administrative remedies and does not specifically limit or condition the
jurisdiction of the federal courts. “Its directive is addressed to the individual
litigant rather than the court, and it pertains to the time when an action may be

9
42 U.S.C. § 1997e(a) reads:

(a) Applicability of administrative remedies

No action shall be brought with respect to prison conditions under
section 1983 of this title or any other Federal law, by a prisoner
confined in any jail, prison, or other correctional facility until such
administrative remedies as are available are exhausted.
10
While Booth v. Churner, 532 U.S. 731 (2001), which emphasized Congress’ intent
to demand exhaustion of all administrative remedies in the PLRA, may cast some doubt on
this conclusion, Circuits ruling on the PLRA’s exhaustion requirement subsequent to Booth
still all view the exhaustion requirement in the PLRA as a statutory codification of the
jurisprudential requirement. See Ace Prop., 440 F. 3d at 999 and cases cited therein from
the D.C., Second, Fourth, and Tenth Circuits.

19
brought in federal district court.” Ace Prop., 440 F.3d at 999. The Eighth Circuit
examined similar language in the PLRA, which does not mention the federal
courts when discussing exhaustion and is also directed towards the individual
litigant. Id. As the Eighth Circuit observed, all Circuits have found this
litigant-centric language in the PLRA to be a codification of a jurisprudential
requirement and not a jurisdictional bar. Id. at 998. Cf. Wright v.
Hollingsworth, 260 F.3d 357, 358 n.2 (5th Cir. 2001). Analogously, the litigant-
centric language in 7 U.S.C. § 6912(e) implies it is also a codification of the
jurisprudential exhaustion requirement.
The Ninth Circuit likewise compared the language in 7 U.S.C. § 6912(e)
to two other similar statutory exhaustion provisions, the PLRA and 43 C.F.R. §
4.21(c),11 which the Ninth Circuit held to be codified jurisprudential principles
in previous cases. Like those provisions, the Ninth Circuit noted that 7 U.S.C.
§ 6912(e) similarly “does not limit the district court’s subject matter jurisdiction
over the plaintiff’s claims,” because section 6912(e) does not contain the
“sweeping and direct” language depriving a federal court of jurisdiction.
McBride, 290 F.3d at 980. The Ninth Circuit, therefore, decided that 7 U.S.C. §
6912(e)’s exhaustion requirement is jurisprudential.
2. Fifth Circuit precedent
The Government cites to three cases from the Fifth Circuit in support of
its argument that the Second Circuit’s approach towards section 6912 should be
followed: Townsend v. U.S. Dep’t of Justice Immigration & Naturalization Serv.,
799 F.2d 179, 181 (5th Cir. 1986), Meliezer v. Resolution Trust Co., 952 F.2d 879,

11
The provision reads: “No decision which at the time of its rendition is subject to
appeal to the Director or an Appeals Board shall be considered final so as to be agency
action subject to judicial review.” See also Anderson v. Babbitt, 230 F.3d 1158, 1162 (9th
Cir. 2000).

20
882 (5th Cir. 1992), and Taylor v. U.S. Treasury Dep’t, 127 F.3d 470, 475 (5th
Cir. 1997). The Government primarily relies on dicta in Townsend that
concluded: “[w]hen exhaustion is statutorily mandated, the requirement is
jurisdictional.” Towsend, 799 F.2d at 181; see also Taylor, 127 F.3d at 475 (citing
to Townsend, 799 F.2d at 181).
The three cases relied upon by the government are clearly distinguishable,
however, because they dealt with differently worded statutes. In both Townsend
and Meliezer, the statutory provisions at issue, unlike section 6912(e), explicitly
mention the “courts” and directly limit their jurisdiction.12 Taylor actually
undermines the Government’s argument. In Taylor, we found no “express
statutory requirement of exhaustion,” because the statutory provision did not
“expressly require exhaustion of particular administrative remedies . . . [the
statutory provision] plainly does not constitute the ‘clear, unequivocal’
manifestation of Congressional intent necessary to render exhaustion of
administrative remedies a jurisdictional prerequisite.” 127 F.3d at 476.
Consistent with Taylor, we do not read these Fifth Circuit cases as following the
approach of Bastek. We do not read every statutory provision that refers to the
exhaustion of administrative remedies as statutorily “mandating” exhaustion.
We read these three cases, and particularly Taylor, as efforts to determine when
statutory language can be read as “mandating” exhaustion before federal courts
have jurisdiction. Taylor requires a “‘clear, unequivocal’ manifestation of
Congressional intent necessary to render exhaustion of administrative remedies

12
The statute at question in Townsend was 8 U.S.C. § 1105a(c), which reads, “[a]n
order of deportation . . . shall not be reviewed by any court if the alien has not exhausted
the administrative remedies available to him as of right under the immigration laws and
regulations.” (emphasis added). The statute at question in Meliezer was 12 U.S.C. §
1821(d)(13)(D), which reads, “[e]xcept as otherwise provided in this subsection, no court
shall have jurisdiction over– . . .” (emphasis added).

21
a jurisdictional prerequisite.” Id. Recent cases establish equally exacting
standards for determining whether statutory language should be read as
“mandating” exhaustion. See, e.g., Premiere Network Servs., Inc. v. SBC
Comm’ns, Inc., 440 F.3d 683, 686 n.5 (5th Cir. 2006) (interpreting the phrase
“statutorily mandated” to mean “textually required.”).
For these reasons, we agree with the Ninth and Eighth Circuits that one
important factor in deciding whether exhaustion is “textually required” or
“statutorily mandated” is whether the statute explicitly mentions and deprives
federal courts of jurisdiction if administrative remedies are not exhausted. Here,
section 6912(e) focuses on the individual litigant and does not expressly deprive
the courts of jurisdiction if the individual litigant fails to exhaust administrative
remedies. In addition, the reasoning behind the Eighth and Ninth Circuits’
analogy between the PLRA and 7 U.S.C. § 6912(e) is persuasive. Ace Prop., 440
F.3d at 998. We too have construed PLRA’s exhaustion requirement as
jurisprudential. See Hollingsworth, 260 F.3d at 358 n.2. Therefore, we now join
the Eighth and Ninth Circuits in holding that § 6912(e) analogously codifies the
jurisprudential doctrine of exhaustion and is not jurisdictional.13
D. No Excuse of Administrative Exhaustion Is Applicable

13
This holding is consistent with recent Supreme Court dicta regarding statutory
jurisdictional requirements. In Bowles v. Russell, 127 S. Ct. 2360, 2363-66 (2007), the
Court found the time limits for filing a notice of appeal are jurisdictional. The Court noted
that statutory time limits are jurisdictional because they are “grounded in a statute” and
“Congress forbids federal courts from adjudicating an otherwise legitimate ‘class of cases’
after a certain period has elapsed from final judgment.” Id. at 2365-66 & n.3 (internal
citations and quotations omitted) (emphasis added). First, cases regarding statutory time
limits are explicitly directed at the courts and therefore are distinguishable from
exhaustion requirements, such as section 6912, that are focused on litigants. According to
Bowles, when Congress directly “forbids” federal courts from deciding a “class of cases” in a
statute, the courts can then justifiably infer a jurisdictional bar. Id. The words of Section
6912 do not limit federal court jurisdiction or easily imply a Congressional intent to “forbid”
federal courts from hearing unexhausted claims against the USDA in exceptional
circumstances.

22
 Concluding that section 6912(e) is a codification of the jurisprudential
doctrine of exhaustion does not end our analysis. We must determine whether
excusing the exhaustion of administrative remedies is warranted in this case.
See, e.g., Taylor, 127 F.3d at 476-77. Overcoming the jurisprudential
requirement for administrative exhaustion is difficult. As we noted in Central
States, “[t]hese exceptions [to administrative exhaustion] apply, however, only
in extraordinary circumstances.” 826 F.2d at 329. There are limited bases for
excusing administrative exhaustion.
“Traditional circumstances in which courts have excused a
claimant’s failure to exhaust administrative remedies include
situations in which (1) the unexhausted administrative remedy
would be plainly inadequate, (2) the claimant has made a
constitutional challenge that would remain standing after
exhaustion of the administrative remedy, (3) the adequacy of the
administrative remedy is essentially coextensive with the merits of
the claim (e.g., the claimant contends that the administrative
process itself is unlawful), and (4) exhaustion of administrative
remedies would be futile because the administrative agency will
clearly reject the claim.”

Taylor, 127 F.3d at 477. In addition, exhaustion may be excused when (5)
irreparable injury will result absent immediate judicial review. Rhodes v.
United States, 574 F.2d 1179, 1181 (5th Cir. 1978).
None of the grounds for excusing administrative exhaustion have been
demonstrated to exist in this case. Dawson Farms’ brief does not sufficiently
describe the reasons supporting its broad and unsupported contention that all
grounds for excusing administrative exhaustion apply here. Therefore, we must
consider its argument on those grounds to have been waived. See McKethan v.
Texas Farm Bureau, 996 F.2d 734, 739 n. 9 (5th Cir.1993) (failure to sufficiently
brief an issue constitutes waiver of the issue). Assuming arguendo that some
grounds are not waived, based on the facts and Dawson Farms’ conclusory

23
statements, Dawson Farms apparently argues that the administrative remedies
were plainly inadequate and that any appeal would have been futile. Its
unexhausted administrative procedures consisted of its appeal to the NAD and
its completion of the process for obtaining an “after the fact” permit from the
Corps of Engineers. Dawson Farms has failed to show that either of these
procedures would have been inadequate or futile had it been timely and
diligently pursued. The records shows instead that Dawson Farms simply
allowed its time to elapse without consistently persevering along either
administrative avenue.
Because Dawson Farms failed to exhaust all of its administrative appeal
procedures and remedies and no excuse or exception has been shown to be
applicable, summary judgment in favor of the defendants was appropriate.
E. Estoppel Is Not Applicable
Dawson Farms also contends that the EPA’s withdrawal of its complaint
against the farm operator without prejudice equitably estops the defendants from
arguing that the farm operator should not be excused from its obligation to
exhaust all of its administrative remedies. Dawson Farms’ argument is not
persuasive. The case law establishes a difficult hurdle in urging estoppel against
the government. “In order to establish estoppel against the government, a party
must establish affirmative government misconduct in addition to the four
traditional elements of estoppel.” Taylor, 127 F.3d at 474. As in Taylor, we do not
need to reach the four elements of estoppel, because Dawson Farms has not
alleged any government misconduct. See id. Dawson Farms’ mistaken impression
that EPA’s withdrawal and dismissal of its complaint without prejudice barred
other agencies’ actions based on its wetlands conversion violations cannot furnish
grounds for estoppel. See Weiszmann v. Dist. Eng’r, U.S. Army Corps of Eng’rs,
526 F.2d 1302, 1305 (5th Cir. 1976) (holding that Corps’s passive observance of

24
developer’s dredging of canal and developer’s mistaken belief that a permit was
unnecessary did not constitute grounds for equitable estoppel).14
Conclusion
While failure to exhaust administrative remedies usually results in a
dismissal without prejudice, see Taylor, 127 F.3d at 478 & n.8, when exhaustion
is no longer possible, dismissal may be with prejudice. See Walker v. Thompson,
288 F.3d 1005, 1009 (7th Cir. 2002) (“Dismissal for failure to exhaust is without
prejudice and so does not bar the reinstatement of the suit unless it is too late
to exhaust. . .”); cf. Marsh v. Jones, 53 F.3d 707, 710 (5th Cir. 1999). As
exhaustion of administrative remedies is too late for the claims in this case, we
AFFIRM the district court’s judgment, but MODIFY the judgment to dismiss
with prejudice for the reasons stated above.

14
Dawson Farms’ argument that its pursuit of an “after-the-fact” permit and EPA’s
subsequent withdrawal of its complaint somehow foreclosed appeals within the USDA is
without merit. Dawson Farms did untimely appeal the PTD that wetlands were converted
to the local County Committee within the USDA before actually pursuing the “after-the-
fact” permit. The PTD letter specifically notified Dawson Farms that an appeal to other
appellate levels within the USDA was possible. Dawson Farms could have timely appealed
to the NAD before pursuing the “after-the-fact” permit.

25