Iowa company's lawsuit challenges federal ‘swampbuster law’ that protects wetlands

An Iowa company is suing the U.S. Department of Agriculture over the federal government’s so-called “swampbuster law” that requires farmers to either leave wetlands untouched or forfeit certain federal benefits.

CTM Holdings filed the lawsuit was filed this week in U.S. District Court for the Northern District of Iowa. The company describes itself as a family-owned, limited liability corporation that owns 1,075 acres of Iowa farmland, including a 72-acre parcel in Delaware County that contains a 9-acre strip the USDA has designated a wetland.

According to the lawsuit, if the USDA designates any part of a farmer’s land as a wetland, it effectively obtains a conservation easement over that portion of the property, restricting its use. Farmers who develops or cultivate the designated areas lose USDA benefits, such as loans and crop insurance ― not just for the property in question, but potentially for all of their farmland.

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The lawsuit claims the USDA is failing to provide landowners with “just compensation” and that the agency “will continue to do so unless and until a court orders them to stop.”

CTM Holdings argues that “forcing” an applicant for USDA benefits to give the government a conservation easement constitutes a “per se physical taking” of land. The USDA, the company claims, also is imposing an unconstitutional condition on the collection of sought-after federal farmland benefits.

Challenged law dates from 1985

In addition to the USDA, the lawsuit names as defendants Secretary of Agriculture Tom Vilsack; the USDA’s Natural Resources Conservation Service and its director, Terry Cosby; and Jon Hubbert, the Iowa state conservationist for the NRCS.

The law at issue in the case was is part of the Food Security Act of 1985, which established a conservation effort called the Erodible Land and Wetland Conservation and Reserve Program. Two components of the program are referred to as the “sodbuster” and “swampbuster” laws.

The swampbuster provision conditions USDA agricultural benefits on farmers keeping designated wetlands in conservation rather than converting them to cropland, while the sodbuster provision is based on a voluntary program that pays farmers market rent to keep highly erodible acreage in conservation.

Under the law, once an area of farmland is designated a wetland, it cannot be “drained, dredged, filled, leveled, or otherwise manipulated” without the loss of USDA-provided agricultural benefits.

Suit contends designated swamp not 'visibly wet'

According to the plaintiffs’ attorneys, the managing member of CTM Holdings, Jim Conlan, was raised in Iowa and comes from a line of farmers. In 1990, Conlan purchased his grandparents’ farm and, in the years that followed, acquired additional Iowa farmland in four Iowa counties, the lawsuit states.

CTM says that on Sept. 30, 2022, it purchased the Delaware County land that included the acreage the USDA had designated a wetland in 2010. According to the lawsuit, the area has dry soil, and asked the Natural Resources Conservation Service to reevaluate the designation. The service allegedly responded by saying the designation would stand and there was no right to an appeal.

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CTM claims the 9 acres are not “visibly wet” and are at least 1,000 feet away from a small, seasonal stream.

“Growing season in Iowa usually begins around mid-April,” the lawsuit states. “If Defendants are not enjoined from enforcing the swampbuster statutes and regulations, then (CTM Holdings) will be unable to plant its crop on the nine acres, will miss the window of time to plant for this year’s crop season, and will therefore lose any profits from crops that could have been grown on the nine acres.”

Because of the way the law is structured, CTM Holdings argues, the company has no choice but to give up all uses of the acreage in order to retain the USDA benefits for itself and for its tenant farmers on all of the 1,075 acres the company owns.

The lawsuit seeks unspecified damages for alleged violations of the commerce clause of the U.S. Constitution, as well as a judgment declaring that the swampbuster provisions of the law are unconstitutional and exceed Congress’ power to regulate interstate commerce.

The lawsuit is backed by the Liberty Justice Center and Pacific Legal Foundation. The USDA and other defendants have yet to file a response to the lawsuit.

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