Kathy D. Massey v. United States ( 2004 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-3253
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United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Arkansas.
Kathy D. Massey, *
*
Appellant. *
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Submitted: April 16, 2004
Filed: August 25, 2004
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Before LOKEN, Chief Judge, and BYE, Circuit Judge, and MAGNUSON,1 District
Judge.
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BYE, Circuit Judge.
Kathy D. Massey was removed for misconduct from her position as a Program
Technician (PT) by the Jackson County (Arkansas) Executive Director of the United
States Department of Agriculture and its Farm Service Agency (FSA; agency). After
exhausting her administrative appeals, Massey brought an action in the district court
under the Administrative Procedures Act (APA), claiming the decision to terminate
her was arbitrary and capricious or an abuse of discretion, violated her Fifth
1
The Honorable Paul A. Magnuson, United States District Judge for the District
of Minnesota, sitting by designation.
Amendment rights, and was not based on substantial evidence. The district court2
granted summary judgment to the government, affirming the decision of the
Executive Director for State Operations (EDSO). We affirm.
I
A. Factual Background
Massey was employed for fourteen years as a PT in the Jackson County FSA
Office in Newport, Arkansas. She was in charge of reconstitutions3 and compliance
programs. A county FSA office is run by a County Executive Director (CED), and
the CED of the Jackson County FSA office was Floyd Campbell. The CED answers
to a County Committee (COC) composed of farmers elected to serve from the local
area. The COC answers to the Arkansas FSA State Committee (STC), composed of
the State Executive Director and Arkansas farmers appointed by the Secretary of
Agriculture. Disciplinary decisions concerning county employees are made by the
STC. The State Executive Director is in charge of overall program implementation
and direction. There is a District Director for each district who is responsible for the
oversight of several county offices. During the time relevant to this case, Gary Roger
Davis was the District Director overseeing Jackson County. Typically, a district
director visits the county offices once a month.
2
The Honorable William R. Wilson, Jr., United States District Judge for the
Eastern District of Arkansas.
3
Farm reconstitutions are authorized by 7 U.S.C. § 1379 and are permitted
when ownership of a farm changes. A reconstitution is "a change in the land
constituting a farm as the result of combination or division." Vanderford v. Penix,
39 F.3d 209, n.2 (8th Cir. 1994) (citation omitted).
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In 1997, the Jackson County FSA Office came under investigation following
concerns about allegations of farm program irregularities and conflicts of interest.
Following initial conflicting reports, the Office of the Inspector General conducted
an audit of the Jackson County FSA Office. Nathan Moore, an expert in
reconstitutions, was one of the members of the audit team in charge of auditing the
reconstitutions for the Jackson County Office for the time period of 1992 to 1998.
The audit team discovered problems with reconstitutions, prevented planting, and
ghost acres. It issued a report known as the "Jackson County Special Report," which
formed the basis for the agency's disciplinary actions against Massey, CED Floyd
Campbell, and another PT, Brenda Dawson.
The Special Report alleged that, inter alia, CED Campbell failed to disclose his
financial interests in a farming operation in Jackson County, which presented a
conflict of interest. The Special Report alleged five Jackson County FSA
reconstitutions allowed producers to use the farm division and combination process
to improperly build rice crop acreage bases (CAB)4 and thereby improperly receive
government program payments for which the producers were not eligible. Ninety-six
percent of the problems with the reconstitutions involved one Jackson County family
farming operation, the John Conner family. CED Campbell was involved with his
son in a farming operation which had business dealings with John Conner. Nathan
Moore estimated these problems cost the government more than five million dollars.
It is undisputed Massey performed the reconstitutions in question.
4
CABs are part of the reconstitution process. A farm's crop acreage base "in
a particular program crop [such as wheat] represents the farm's average historic yield
of that crop." Vanderford, 39 F.3d at n.5.
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B. Procedural Background
The STC sent a letter to Massey notifying her she was suspended without pay
pending removal for conduct issues and numerous program deficiencies.5 Massey's
suspension letter provided two reasons for the STC's decision. The first reason stated
she failed to properly perform the duties of her position as to reconstitution. The first
specification under this reason stated from 1992 through 1995 Massey allowed
producers to use the reconstitution process to build CAB and at the same time
participate in the Acreage Reduction Program. The second specification under this
reason stated from 1993 through 1995 Massey incorrectly loaded acreage reports
regarding rice planted behind failed or prevented planted wheat acreage, as the rice
should have been coded as "ghost acres" not to receive disaster payments and planted
and considered planted acreage to build a rice CAB.
Reason two of Massey's suspension letter stated she had impeded the
effectiveness of FSA operations. The first specification under this reason stated as
a PT, she failed to effectively manage the programs for which she was directly
responsible, resulting in overpayments of government monies and expenditures of
numerous staff resources to correct these program deficiencies. The second
specification under this reason stated as a PT, Massey, inter alia, improperly executed
program documents, allowing the disbursement of government funds by permitting
producers to use the reconstitution process to build rice CAB.
5
The agency also took disciplinary action against CED Floyd Campbell and PT
Brenda Dawson on the basis of the Jackson County Special Report. Campbell was
terminated and Dawson was suspended and moved. Neither is a party to this appeal.
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Following a non-adversarial proceeding, the STC concluded Massey did not
provide sufficient responses to the charges and she was terminated.6 Massey
appealed the STC's decision to the EDSO. Hearing Officer John Chott conducted a
comprehensive five-day hearing. He recommended the second specifications of the
charges involving her work on the Disaster, Acreage Reduction Program and
Production Planning Contract programs not be sustained, concluding Massey neither
improperly loaded acreage reports on the system, nor improperly accepted incorrect
acreage reports or processed documents which allowed producers to collect benefits
to which they were not entitled. The hearing officer did, however, sustain
specification one of charge one and specification one of charge two concerning
Massey's work on reconstitutions.
The EDSO adopted Chott's decision, and this determination is a final
administrative decision. See 7 C.F.R. § 7.30. Massey then filed suit in the district
court for judicial review of the agency's decision. The district court affirmed and this
appeal followed.
II
When reviewing the district court's opinion upholding the administrative
agency's decision, this court must render an independent decision on the basis of the
same administrative record as that before the district court. Moore v. Custis, 736 F.2d
1260, 1262 (8th Cir. 1984). This court should hold unlawful and set aside agency
action if it is arbitrary, capricious, an abuse of discretion, contrary to constitutional
right, or without observance of procedure required by law. Id. This standard of
review is a narrow one and the court is not permitted to substitute its judgment for
6
When an FSA county employee is removed for misconduct, the relevant
procedures to be followed are set forth in the FSA regulations at 7 C.F.R. §§ 7.28-33and 22-PM ASCS (FSA) Handbook Part 10, ¶ 4, or the County Office Personnel
Manual.
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that of the agency. Sierra Club v. Davies, 955 F.2d 1188, 1992-93 (8th Cir. 1992).
The appellant bears the burden of proving the agency's action was abitrary and
capricious. Id. at 1264.
Massey first contends the STC did not consider all relevant factors and relied
on false information, and requests this court remand the case back to the STC for
additional investigation. Specifically, Massey contends the STC was unaware
someone else was changing the contribution percentages in the farm-record history
which then contributed to the reconstitution problem. Significantly, however, Massey
does not cite to any proof the STC was unaware other employees had access to the
computer system. For example, as to one of the reconstitutions in question, A20116,
the hearing officer expressly found although Massey was not in the office when three
of the CABs resulting from the reconstitution were altered, Massey was in the office
when the improper processing of the reconstitution was done in May 1992. We find
Massey has produced no evidence which would call this conclusion into question, and
therefore find no basis for remand on this issue.
Massey's attempts to refer to alleged errors regarding charges that were not
sustained by the hearing officer are similarly unavailing, as this appeal only concerns
the charges sustained by the hearing officer.
Massey also contends the agency's action was arbitrary and capricious because
it failed to consider the allegations made against her involved actions or policies
which had been approved, reviewed, and rejected by higher agency authority. The
bulk of Massey's citations from the hearing transcript in support of her argument
concern the issue of whether rice planted later than wheat is a normal farm practice
in Jackson County. Again, this issue is irrelevant to the questions before this court
as the charges against Massey on this issue were not sustained.
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Significantly, Massey does not dispute she worked on all five of the questioned
reconstitutions. And while it is true the reconstitutions were approved by her
superiors, the STC had knowledge of this approval, and the CED in Jackson County
Floyd Campbell (Massey's supervisor) was also terminated for improper conduct.
Also, District Director Gary Roger Davis had only limited contact with the Jackson
County FSA (performing "spot checks" during a monthly visit to ascertain how the
programs are being administered overall). Therefore, we find unpersuasive Massey's
contention she should be absolved of responsibility for the improper reconstitutions
and their results based on Davis's supervisory role. In sum, although we suspect
Massey may have found herself in an unfortunate circumstance, she has not presented
sufficient evidence to indicate she was merely a scapegoat.
Massey further contends she has a "reasonable expectation of continued
employment" creating a property interest protected by the Due Process Clause of the
Fifth Amendment of the United States Constitution. Unlike employees covered by
the Civil Service Reform Act, however, county employees serve at the pleasure of the
county executive director. Buchholz v. Aldaya, 210 F.3d 862, 864 (8th Cir. 2000)
(concluding a county employee from the Agricultural Stabilization and Conservation
Service had no protected interest in her employment and therefore no due process
claim).
Massey argues the existence of her property interest is demonstrated by the
agency's rules or regulations concerning discharge by the agency itself. In Bucholz,
this court rejected a similar argument, concluding the agency's procedural
requirements which allowed an employee the right to an informal hearing and review
by the Area Director did not confer a property interest for due process purposes and
were consistent with the declaration that county employees work at the pleasure of
the County Director. Bucholz, 210 F.3d at 867.
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Additional discussion of Massey's remaining claims would serve no useful
purpose, and we affirm. See 8th Cir. R. 47B.
III
We affirm the agency's decision to terminate Massey.
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