Creekside Valley Farms v. Dept. of Agriculture ( 2024 )

No. 461 July 3, 2024 569
IN THE COURT OF APPEALS OF THE
STATE OF OREGON
CREEKSIDE VALLEY FARMS, LLC,
and Paul H. Kuehene,
Petitioners,
v.
DEPARTMENT OF AGRICULTURE,
Respondent.
Oregon Department of Agriculture
190723; A177927
Argued October 25, 2023.
Richard P. Brown argued the cause for petitioners. Also
on the briefs were John T. Bridges and Brown, Tarlow,
Bridges, & Palmer, PC.
Robert Koch, Assistant Attorney General, argued
the cause for respondent. Also on the brief were Ellen F.
Rosenblum, Attorney General, and Benjamin Gutman,
Solicitor General.
Before Shorr, Presiding Judge, Mooney, Judge, and Pagán,
Judge.
MOONEY, J.
Reversed and remanded.
Pagán, J., dissenting.
570 Creekside Valley Farms v. Dept. of Agriculture
MOONEY, J.
Petitioners seek review of a final order of the Oregon
Department of Agriculture (the department) imposing civil
penalties for multiple violations of ORS 634.372(4), which
provides, in part, that “[a] person may not: * * * [p]erform
pesticide application activities in a faulty, careless or neg-
ligent manner.” They raise eight assignments of error, all
of which essentially challenge the department’s conclusion
that each petitioner committed eight separate pesticide vio-
lations. We conclude that the department’s interpretation
of its rule defining what constitutes a violation is plausible.
We conclude, however, that substantial evidence and reason
do not support the department’s conclusion that petitioners
made eight separate decisions to apply pesticide to eight
separately managed radish fields, resulting in eight sepa-
rate acts constituting eight statutory violations. We there-
fore reverse and remand.
FACTS AND PROCEDURAL HISTORY
The relevant facts are undisputed. Petitioners are
Creekside Valley Farms, LLC (an agricultural operation
and leaseholder of the subject property) and Paul Kuehene,
Creekside’s sole member and registered agent. Kuehene is
licensed by the department as a Private Pesticide Applicator,
and Creekside is licensed as a Commercial Pesticide
Operator. The agricultural property at the heart of this
matter consists of 461 acres which, in 2019, were dedicated
to the cultivation of radish crops for purposes other than
human consumption. Petitioners do not dispute that the pes-
ticide, Witness Herbicide, was applied to the radish crops
on May 9, 2019, and again on May 27, 2019, at Kuehene’s
direction. They agree that those applications violated ORS
634.372(4).
The department investigated the use of Witness
Herbicide on the farm after receiving a formal complaint.
It obtained and executed an administrative search war-
rant that authorized the department to take field samples
in connection with its investigation. In anticipation of the
sampling, the lead investigator, Odenthal, reviewed arial
maps of the property that he obtained from Google Earth.
Cite as 333 Or App 569 (2024) 571
He identified and marked the perimeter of the farm on one
such map with a blue line, and he used yellow lines to iden-
tify what he characterized as eight separate fields within
that perimeter. The map that he completed, shown below,
identified the fields as:
NW Corner 28 acre
Circle 1 100 acres
N Center 18 acres
Circle 2 170 acres
SE   32 acres
NE 7 acres
East 23 acres
Circle 3 83 acres
Following an administrative contested case hearing, an
ALJ issued two proposed orders,1 concluding that, by
1
One order pertained to Creekside and the other to Kuehene. The orders
contain minor variations in referring to Creekside (through its employees) apply-
ing the herbicide versus Kuehene ordering and supervising the application, and
some details specific to Kuehene’s knowledge as a private pesticide applicator. The
orders are identical in all ways relating to the issues presented in this petition for
review.
572 Creekside Valley Farms v. Dept. of Agriculture
applying Witness Herbicide to the radish fields, Creekside
and Kuehene had each committed eight violations of ORS
634.372(4). The proposed orders noted that “because the
eight separate radish fields were managed separately, each
act of applying Witness pesticide to each separate field is
considered a separate act and therefore a separate violation
under OAR 603-057-0500(11).” Petitioners were assessed a
$10,000 fine for each violation, resulting in an $80,000 fine
each for Creekside and Kuehene. Petitioners filed excep-
tions, and the Director of the department issued final orders
that deleted text from the proposed orders relating to the
definition of a “field,” but otherwise adopted the proposed
orders. This petition for judicial review followed.
STANDARD OF REVIEW
We review the department’s order in this contested
case for substantial evidence, abuse of discretion, and errors
of law. ORS 183.482(8). Our decision turns on the require-
ment of substantial evidence, focusing in particular on
that requirement’s component of substantial reason. As the
Supreme Court recently explained:
“Implicit in the requirement that orders be supported by
substantial evidence is an additional requirement that
they be supported by substantial reason. An order is sup-
ported by substantial reason when it articulates a rational
connection between the facts and the legal conclusions it
draws from them. Among other purposes, the substantial-
reason requirement ensures meaningful judicial review.”
SAIF v. Coria, 371 Or 1, 12, 528 P3d 785 (2023) (internal
quotation marks and citations omitted). Meaningful review
requires us to do more than simply verify that the department
gave an explanation for its conclusions. Meaningful review
requires us to read the content of the explanation to ensure
that it supplies the required “rational connection between the
facts and the legal conclusions it draws from them.” Id.ANALYSIS
In evaluating whether the department lawfully
assessed eight pesticide violations against each petitioner,
we begin with the department’s interpretation of what
constitutes a violation. OAR 603-057-0500(11) defines
Cite as 333 Or App 569 (2024) 573
“violation” as “an act or omission” that “does not comply
with a provision of ORS chapter 634 that relates to pesti-
cide application, sale, or labeling[.]” In the final orders, the
department noted that “the key to determining how many
violations occurred is determining how many distinct acts
or omissions occurred.” In summarizing the way the depart-
ment makes that determination, the final order stated:
“Department staff testified that, when a pesticide is applied
unlawfully to fields that are in commercial agricultural
production, the Department treats each unlawful pesticide
application to a distinguishable field as a separate viola-
tion. Department staff further testified that, in attempt-
ing to determine how many separate fields exist at a given
site, the Department evaluates any physical barriers that
separate the fields, and whether the fields are managed
separately or as a single unit. If a person is making sepa-
rate decisions about how to grow crops in different areas,
then the person is committing a separate ‘act’—and, there-
fore, a separate violation—each time the person decides to
unlawfully apply a pesticide to a given area (in this case,
to a given field). That determination is made by examining
whether, as a factual matter, the areas in question have
any physical divisions, and whether they are managed sep-
arately or as a single unit.”
We defer to an agency’s plausible interpretation of
its own rule, including an interpretation made in the course
of applying the rule, if that interpretation is not inconsistent
with the wording of the rule, its context, or any other source
of law. Papas v. OLCC, 213 Or App 369, 377, 161 P3d 948
(2007). “Act or omission” is not defined in ORS chapter 634
or the relevant administrative rules. The dictionary defines
an “act” as “a thing done or being done.” Webster’s Third New
Int’l Dictionary 20 (unabridged ed 2002). The department’s
interpretation of “act” as including each decision to apply
pesticides to separate fields is a plausible interpretation of
the term and is consistent with the State Pesticide Control
Act’s purpose of regulating the application and use of pesti-
cides in the public interest. ORS 634.005.
In assessing the number of fields involved, the depart-
ment’s policy is to consider (1) physical characteristics of the
property such as roads, fences and other barriers, irrigation
574 Creekside Valley Farms v. Dept. of Agriculture
systems, and crop heights, and (2) whether the property is
managed as separate fields or as a unified piece of property.
It is certainly plausible to think that different physical char-
acteristics of the property might make it necessary to make
different decisions about whether and how to apply pesticide
to different parts of the property because of those charac-
teristics. The second inquiry of the department’s policy—
considering how the property is actually managed—provides
additional information that, in conjunction with information
about the physical characteristics of the property, provides
a plausible way of determining how many decisions were
made that resulted in separate acts, each of which violated
ORS 634.372(4). We conclude that the department reasonably
interpreted its rule and that its interpretation merits our
deference.
We turn to the department’s application of its rule
in this case to conclude that petitioners separately managed
the acreage as eight separate agricultural fields and that
they made eight separate decisions that resulted in eight
separate pesticide applications in violation of the law. As
noted above, we review findings of fact for substantial evi-
dence and the application of the law to the facts for substan-
tial reason. “Substantial evidence supports a finding when
the record, viewed as a whole, permits a reasonable person
to make the finding.” Gage v. Fred Meyer Stores - Kroger Co.,
329 Or App 360, 362, 540 P3d 592 (2023), adh’d to on recons,
330 Or App 669, ___ P3d ___ (2024).
The final order noted a number of factors that were
considered in determining that the farm was comprised of
eight separately managed fields, including: manmade and
natural barriers, including farm roads, a line of trees, and a
slough with water; crop growth height; and the use of center
pivot versus big gun irrigation systems. The findings of fact
with respect to the presence of those features are supported
by substantial evidence, particularly the photographs and
the testimony of department investigators about their
observations of the property. The department specifically
relied on the following observations made by Odenthal in
concluding that the acreage was divided into and separately
managed as eight radish fields:
Cite as 333 Or App 569 (2024) 575
“Circle l and NW Corner fields - The Circle 1 field was
separated from the NW Corner field by a road and field
growth around the edge. The Circle 1 field was irrigated
with a center pivot irrigation system. The NW Corner field
was irrigated with a big gun irrigation system.
“NW Corner and N Center fields - The NW Corner field
was separated from the N Center field by trees and a slough
with water in it.
“Circle 2, NE, and N Center fields - The Circle 2 field
was irrigated with a center pivot irrigation system. The
NE and N Center fields were triangular shaped. The NE
and N Center fields were irrigated with a big gun irrigation
system. The Circle 2 field was separated from the NE and
N Center fields by the edge of the circle pattern where the
center pivot irrigation ended.
“The SE and Circle 2 fields - The SE field was separated
from the Circle 2 field by a road and trees. The Circle 2 field
was irrigated with a center pivot irrigation system. The SE
field was irrigated with a big gun irrigation system.
“The Circle 3 and East fields - The Circle 3 field was
irrigated with a center pivot irrigation system. The East
field was irrigated with a big gun irrigation system. The
crop growth in Circle 3 was higher than the crop growth
in the East field. The Circle 3 field was separated from the
East field by the edge of the circle pattern where the center
pivot irrigation ended.”
(Footnotes omitted.) We cannot say that the department’s
description of the physical characteristics of the property and
irrigation systems is not supported by substantial evidence in
the record. And for our purposes here, we assume the descrip-
tions to be true, as far as they go. But we reject the notion
that each constellation of characteristics described above
and attributed to certain areas within the acreage supports
the department’s conclusion that those areas are separately
managed and that, therefore, the decision to apply pesticide
to each area was separately made and executed.
The problem with the department’s analysis is two-
fold. First, the physical characteristics and layout of the
acreage does not provide evidence of the decision or deci-
sions that petitioners made about applying pesticide to the
crops in May 2019. The argument that the layout of the farm
576 Creekside Valley Farms v. Dept. of Agriculture
requires it to be managed as eight separate fields and that,
therefore, eight decisions and eight pesticide applications
were necessarily made in May 2019 assumes too much. The
department did not explain how the presence of multiple
watering systems, providing water to a contiguous, irregu-
larly shaped farm, led it to conclude that areas within the
farm were separately managed. The final order identified
no evidence that the different types of irrigation equipment
were independently used to achieve separate goals or that
separate decisions were made about when or how much to
irrigate different sections of the acreage. The evidence cer-
tainly supports an inference that petitioners use different
types of irrigation equipment to deliver water to the acre-
age, but that does not lead to a nonspeculative conclusion
about how petitioners decided to, or did, apply pesticide in
May 2019. This is particularly notable with respect to the
distinction between Circle 2 and the NE and N fields where
the use of different irrigation systems was the only factor
identified by the department as separating them. Indeed,
soil and plant samples from those three areas were combined
together in the testing process, returning one result for what
the department characterized as three separate fields.
Without engaging in the additional inquiry about
what decisions were actually made and how the property
was managed, the department assumed the thing that
required proof by substantial evidence—that eight decisions
were made, resulting in eight acts of applying the prohibited
pesticide and, thus, eight statutory violations. And the fact
that the ALJ did not believe Kuehene’s testimony that the
acreage was managed as a single unit does not supply evi-
dence that there were eight decisions to apply pesticide to
eight separate sections of the farm.
The second problem with the department’s analysis
is that, even if physical characteristics alone were sufficient
evidence of the human decisions to apply pesticide, when the
record is considered as a whole, the department’s application
of its rule and policy to the farmland in question was inher-
ently inconsistent and failed to otherwise rationally support
its conclusion that there were eight separate statutory vio-
lations. There are inconsistencies in the department’s use of
Cite as 333 Or App 569 (2024) 577
topography in different ways at different points across the
acreage with no explanation for why it did so. For example,
the department used a row of trees to justify treating the NW
field as separate from the N Center field, and yet it did not
use the very same line of trees that extended into and across
Circle 2 to divide that circle into separate fields.2 Similarly,
the presence of farming roads in some locations was used to
support the conclusion that fields were separate, but other
roads through other areas were not mentioned at all. This dis-
parate treatment renders the decision to find eight violations
unsupported by substantial reason.
The most that can be said is that certain physi-
cal characteristics of the acreage and irrigation equipment
appeared to the investigator to reflect eight areas or fields.
But attributing different significance to the same line of trees
and slough without explanation for that disparate treatment
does no more to explain the department’s conclusion that
petitioners made eight separate decisions to apply pesticide
than the fact that they use different irrigation equipment to
deliver water to the various reaches of the acreage.
The defining characteristics that the department
identified in finding eight separate areas do not support a
finding of eight acts or omissions. The department did not
supply a rational connection between the facts on which it
relied and its legal conclusion that there were eight separate
violations. We therefore reverse and remand.3
Reversed and remanded.
PAGÁN, J., dissenting.
Petitioners admitted to intentionally using illegal
pesticide on over 400 acres of farmland. Having no defense to
the allegation of misuse, the only issue petitioners contested
2
The department asserts in its answering brief that the tree line through
Circle 2 was not sufficient to outweigh the irrigation evidence; however, the final
order did not rely on that rationale, and it did not acknowledge the continuation
of the slough and tree line.
3
We are not persuaded by petitioners’ assertion that the department’s
approach to tallying violations deprived petitioners of fair notice of how many vio-
lations they were exposed to, thus violating their right to due process. Petitioners
had notice of what activity was prohibited (the unlawful use of pesticides) and
had the opportunity to be heard on the issue of their violation. Sachdev v. Oregon
Medical Board, 312 Or App 392, 402, 494 P3d 1018, rev den, 368 Or 637 (2021).
578 Creekside Valley Farms v. Dept. of Agriculture
was how many violations occurred on that large swath of
farmland. The Department of Agriculture provided an
expert to testify on the issue. That expert visited the farm-
land, spoke with witnesses, looked at the equipment used
on all the fields, and then applied the department’s inter-
nal guidelines for discerning how many violations occurred.
That expert concluded that there were eight fields, primarily
because each one of those fields had its own irrigation man-
agement system, and the fields tended to be separated by
either man-made or natural barriers. To rebut that expert,
petitioners offered their own witnesses from the farm, who
testified simply that there was only one field, despite the
barriers and separate irrigation systems. The ALJ hearing
these witnesses decided that the expert was more credi-
ble. The department then adopted that ALJ’s findings and
explained that it used the ALJ’s credibility finding to sup-
port its decision to find eight separate violations. Thus, in my
view, the department’s decision is supported by substantial
evidence, and having explained how that evidence allowed it
to find eight violations, is supported by substantial reason.
Jenkins v. Board of Parole, 356 Or 186, 195-96, 335 P3d 828
(2014). To the extent the majority concludes either that the
department failed to provide substantial reasoning for its
conclusions, or that the case law on our standard of review
requires the department to do more than provide a rationale
for its reasoning, I dissent.
Our appellate courts are sending mixed mes-
sages when reviewing a state agency’s decision under ORS
183.482(8). On the one hand, “[o]ur review for substantial
evidence [under ORS 183.482(8)] does not entail or permit
the reviewing tribunal to reweigh or to assess the credibility
of the evidence that was presented to the factfinding body.”
WaterWatch of Oregon v. Water Resources Dept., 324 Or App
362, 384, 527 P3d 1, rev den, 371 Or 332 (2023) (citations
and internal quotation marks omitted). “In other words, to
the extent that the substantial reason requirement inheres
in an agency’s duty to make findings of fact and conclusions
of law, the substantial reason requirement concerns the
reviewability of the agency’s orders.” Jenkins, 356 Or at 195-
96 (emphasis added). Focusing on reviewability provides a
Cite as 333 Or App 569 (2024) 579
particular heft to the deference we give to the agency. Or, as
the Supreme Court stated before Jenkins:
“On judicial review, the court will not substitute its judg-
ment for that of the agency in drawing an inference, but
the court must be satisfied that agency judgment has actu-
ally been exercised. Sometimes a rational nexus between
an evidenced fact and an inference drawn from it is obvi-
ous from common experience (e.g., we may infer from the
fact of a wet street that it recently rained). In other cases,
however, and particularly in cases involving expertise, the
reasoning is not obvious (e.g., we may infer from present
meteorological conditions that it will snow tomorrow). In
such an inference, we will not assume the existence of a
rationale. Rather, we look to the order to state the rational
basis of the agency’s inference. The explanation need not be
complex, but it should be sufficient to demonstrate the exis-
tence of a rational basis and to allow for judicial review.”
City of Roseburg v. Roseburg City Firefighters, 292 Or 266,
271-72, 639 P2d 90 (1981) (footnote and citations omitted).
On the other hand, we have interpreted ORS
183.482(8) to require that the agency explain or justify what
may be considered “inherent inconsistencies.” See, e.g., SAIF
v. Coria, 371 Or 1, 14, 528 P3d 785 (2023) (remanding agency
decision because the order failed to address inconsistencies);
The Boeing Company v. Cole, 194 Or App 120, 123-24, 93 P3d
824 (2004) (explaining that “when there are inconsistencies
in an expert’s testimony, the board must provide an expla-
nation as to the basis for its reliance on that testimony”).
The two positions are plainly inconsistent. Either
we are deferential and looking only to see that the agency
explained its rationale sufficient for review, or we are
reviewing the agency’s decision for its persuasive weight.
For me, the tension is relieved by adhering to the deference,
examining whether the agency explained its reasoning, and
ensuring that the agency in fact exercised its discretion.
Here, instead, the majority would have required the
department to provide in its final order an explanation of
“inherent inconsistencies” in the expert’s testimony, such
as why a row of trees was used to separate one field but
may not have been for another. In my view, such an inquiry
580 Creekside Valley Farms v. Dept. of Agriculture
necessarily oversteps the limitations of our review and
spurns the deference we are supposed to provide agencies.
The ALJ was presented with two evidentiary presentations
on the issue of how many fields existed and was required
to make a credibility finding. Following that finding, the
department explained why the expert was more credible,
explained how the expert used internal guidelines to make
their conclusions, and why those conclusions would justify
imposing a violation for each field separately under the
appropriate regulations. That is all that is needed under
ORS 183.482(8) for us to determine that the “agency judg-
ment has actually been exercised.” Jenkins, 356 Or at 196(quoting City of Roseburg, 292 Or at 271).
Finally, to the extent the majority believes that
the explanation is not sufficient under ORS 183.482(8), the
only remedy is to send it back to the department to provide
a full explanation for its reasoning. See id. at 195 (“If an
agency order that is subject to ORS 183.470(2) does not con-
tain [substantial reasoning], then the appellate court will
reverse and remand the order for the agency to correct the
deficiency.”); Coria, 371 Or at 14 (“Therefore * * * we remand
the case to the board to explain its reasoning.”).
I would conclude that the department’s decision is
supported by substantial evidence and substantial reason-
ing and would affirm.