Feds: Iowa wetlands lawsuit stemmed from haywire talks between landowner, USDA

CEDAR RAPIDS — A sweeping legal challenge to federal protections for ag wetlands — one that could endanger millions of acres across the country — might be thwarted because of a misunderstanding.

At issue is nine acres of potential crop ground in northeast Iowa that is designated by the U.S. Department of Agriculture as a wetland.

Farmers who alter those wetlands to grow crops can lose important federal benefits, such as subsidized crop insurance, under the decades-old "Swampbuster" provision of the Food Security Act.

The nine acres in Delaware County are part of a larger tract owned by Jim Conlan, an out-of-state investor in farmland. He purchased the land in 2022 and then sought to nullify the wetland designation.

When he believed he was rebuffed by the USDA, he sued the department last year and argues the Swampbuster provisions are unconstitutional.

Farmers get federal payments when they keep land that is susceptible to erosion out of production — through the Conservation Reserve Program, or CRP — but they do not get payments for the wetlands.

"The government pays for CRP," Conlan told The Gazette on Monday. "They just need to pay for wetlands, too."

But the USDA argued Monday that the lawsuit is invalid because the department didn't rebuff Conlan.

"Do what we have here is a failure to communicate?" asked Chief Judge C.J. Williams, of the U.S. District Court for the Northern District of Iowa.

Williams held a hearing Monday in Cedar Rapids to discuss requests for him to decide the lawsuit before it goes to trial, which is set for June.

Assistant U.S. Attorney Brandon Gray, who is representing the USDA, said Conlan and his company, CTM Holdings, do not have legal standing to sue the department because, due to an apparent misunderstanding, the department did not issue a ruling last year about Conlan's wetland.

"They didn't because CTM didn't ask them to," Gray alleged.

How did the misunderstanding happen?

According to Gray, here’s how the misunderstanding happened:

Conlan's Delaware County tract encompasses about 72 acres. That includes the designated wetland acres, another area that the USDA determined is not wetland, and a third area that the department had not previously reviewed.

When Conlan asked the department for a review, he intended to seek a reevaluation of the wetland acres. But department officials thought he sought a review of the third, then-undetermined area, Gray said.

The department's response included its conclusion that the third area was not wetland. In a separate mailing, the department included the old determination that the 9 acres is wetland, which was made in 2010.

"They were trying to be helpful," Gray said of including the old determination, but Conlan interpreted it as a denial of his request and sued.

He is suspicious of the USDA's explanation and, with a shade of sarcasm, called it "very creative."

It's unclear when Williams will issue a ruling. Conlan wants him to agree that Swampbuster is unconstitutional.

The USDA and conservation proponents that have joined the case want him to dismiss the lawsuit.

Farmers aren't required to protect their wetlands, but they are compensated with the federal benefits by doing so.

"Absolutely this provides a strong incentive," Gray said. "But regardless of how strong that incentive is, it doesn't become coercive simply because it's a really good deal."

Whatever Williams decides will likely be appealed, according to attorneys who are involved in the case.

Comments: (319) 368-8541; jared.strong@thegazette.com