Charley E Johnson Revocable Living Trust v. United States of America

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Charley Johnson, No. CV-22-01339-PHX-JJT 10 Plaintiff, ORDER 11 v. 12 United States of America, et al., 13 Defendants. [14] 15 At issue is Plaintiff Charley Johnson’s Motion for Summary Judgment and 16 Memorandum of Law in Support Thereof (Doc. 33, “MSJ”), to which Defendants filed an 17 Answering Brief (Doc. 39, “Defs.’ Br.”) and Plaintiff filed a Reply (Doc. 40, “Reply”). 18 The Court finds the Motion appropriate for resolution without oral argument. See LRCiv 19 7.2(f). For the following reasons, the Court denies Plaintiff’s Motion, grants summary 20 judgment in favor of Defendants, and dismisses this case. 21 I. BACKGROUND 22 In 2006, Plaintiff purchased about twenty-one acres of land in Gila County, Arizona. 23 (Doc. 1, “Compl.” ¶ 10.) The purchased land seemingly included a house, a well, corrals, 24 and other related ranch structures. (Compl. ¶ 13.) Unbeknownst to Plaintiff, however, those 25 improvements were located on National Forest System (“NFS”) land. (Compl. ¶¶ 11–13.) 26 Plaintiff only learned of this when his neighbor conducted a property survey in 2007, which 27 revealed that the northern boundary of Plaintiff’s land was farther south than Plaintiff had 28 believed it to be. (Compl. ¶¶ 16.) 1 To acquire the land containing the improvements, Plaintiff proposed to the United 2 States Forest Service (“USFS”) that he purchase six to eight acres of NFS land under the 3 Small Tracts Act (“STA”). After discussing the matter with Plaintiff intermittently for 4 about a decade, the USFS eventually determined that the encroachments would be best 5 resolved by Plaintiff purchasing only the land containing the house, barn, and well, which 6 amounted to 0.59 acres. (Doc. 34-8 at 42.) The USFS declined to convey the land 7 containing most of the corrals because the corrals were “authorized range improvements” 8 that were “not in trespass.” (Doc. 34-4 at 43, 47.) The USFS reasoned that this sale would 9 convey the minimum necessary to resolve the encroachments, and Plaintiff could continue 10 to use the corrals and other range improvements under the USFS permits that Plaintiff 11 already had. (Doc. 34-8 at 42.) In 2020, Plaintiff agreed to purchase the 0.59 acres. 12 To determine the purchase price of the land, the USFS sought an appraisal. 13 (Doc. 34-2 at 5.) The appraiser was to appraise the NFS land as if it were zoned consistently 14 with non-federal property, and the appraiser concluded that, under the Gila County Zoning 15 and Development Code, the consistent zoning for the land would be for single-family 16 residences. (Doc. 34-2 at 5, 21.) The appraiser determined that the land’s highest and best 17 use was “rural residential and agricultural” or “single-family rural residential.” (Doc. 34-2 18 at 9, 24.) The appraiser then identified six recent sales of somewhat similar residential lots 19 near the area, noting that “sales activity in the subject area is extremely limited” and there 20 is “little data” on the market. (Doc. 34-2 at 39, 41.) The appraiser compared the land for 21 purchase to the six comparable lots, adjusted for any relevant differences, and valued the 22 land for purchase at $27,000. (Doc. 34-2 at 40–42.) A review appraisal found the appraisal 23 to be “compliant with standards” and approved of the appraisal’s conclusion. (Doc. 34-8 24 at 2.) In 2022, Plaintiff purchased the land from the United States for $27,000. (Doc. 34-10 25 at 56–59.) 26 Plaintiff then initiated this action under the Administrative Procedures Act (“APA”), 27 alleging that Defendants acted arbitrarily and capriciously in denying his request to 28 purchase a larger plot of land and in accepting the value set forth in the appraisal. (Compl.) 1 Plaintiff now moves for summary judgment on those claims. Defendants oppose the motion 2 and, in their brief, ask the Court to grant judgment in their favor and dismiss this case. 3 II. LEGAL STANDARD 4 The APA provides that a district court may review agency action. 5 U.S.C. § 706 . 5 If the court finds that an agency’s actions were “arbitrary, capricious, an abuse of 6 discretion, or otherwise not in accordance with law,” the court may reverse or set aside the 7 decision. 5 U.S.C. § 706 (2)(A). The standard of review under the APA is deferential, and 8 the court is not empowered to substitute its judgment for that of the agency. Motor Vehicle 9 Mfrs. Ass’n v. State Farm Mut. Ins. Co., 463 U.S. 29, 43 (1983). When reviewing an agency 10 action, “the focal point for judicial review should be the administrative record already in 11 existence.” Camp v. Pitts, 411 U.S. 138, 142 (1973). For an agency decision to be upheld, 12 the agency must have “examine[d] the relevant data and articulate[d] a satisfactory 13 explanation for its action including a ‘rational connection between the facts found and the 14 choice made.’” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43 (quoting Burlington Truck Lines, 15 Inc. v. United States, 371 U.S. 156, 168 (1962)). 16 A motion for summary judgment may be used to review agency administrative 17 decisions within the limitations of the APA. Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., [18] 18 F.3d 1468 , 1471–72 (9th Cir. 1994). And a motion for summary judgment should be 19 granted if “there is no genuine dispute as to any material fact and the movant is entitled to 20 judgment as a matter of law.” Fed. R. Civ. P. 56(a). In deciding whether to grant summary 21 judgment in an APA challenge, the district court “is not required to resolve any facts” but 22 rather must “determine whether or not as a matter of law the evidence in the administrative 23 record permitted the agency to make the decision it did.” Occidental Eng’g Co. v. Immigr. 24 & Naturalization Serv., 753 F.2d 766 , 769 (9th Cir. 1985). 25 III. ANALYSIS 26 A. The Modification of Plaintiff’s STA Application 27 Plaintiff originally proposed to purchase six to eight acres of NFS land under the 28 STA, which provides that “[t]he Secretary [of Agriculture] is authorized, when the 1 Secretary determines it to be in the public interest, to sell, exchange, or interchange” NFS 2 land. 16 U.S.C. § 521d(a)(1). Defendants ultimately modified Plaintiff’s proposal and sold 3 only 0.59 acres. Plaintiff challenges that modification on the grounds that the reduction 4 was arbitrary and capricious. (MSJ at 3–10.) Defendants respond that judicial review is 5 unavailable under the APA because the STA is a permissive statute and add that, even if 6 judicial review is available, Defendants’ actions were reasonable. (Defs.’ Br. at 5–8.) 7 Although the APA generally allows for judicial review, it precludes judicial review 8 of agency decisions when “(1) statutes preclude judicial review; or (2) agency action is 9 committed to agency discretion by law.” 5 U.S.C. § 701 (a). However, “the exception for 10 action ‘committed to agency discretion’ . . . is a very narrow exception.” Citizens to 11 Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971), abrogated on other 12 grounds by Califano v. Sanders, 430 U.S. 99 , 105–06 (1977). To determine whether agency 13 action is excepted from judicial review under 5 U.S.C. § 701 (a)(2), a court must determine 14 whether the discretionary power at issue is so broad “that the court cannot discern from the 15 language of the statute, or from legislative intent, a legal basis upon which to review the 16 Secretary’s exercise of his discretion.” Strickland v. Morton, 519 F.2d 467, 468 (9th Cir. 17 1975). 18 Defendants assert that the STA falls under the second exception because it commits 19 action to agency discretion. Specifically, Defendants argue that the STA permits a land 20 transaction solely “when the Secretary determines it to be in the public interest,” 16 U.S.C. 21 § 521d(a)(1), and the Secretary’s regulations clarify that “[t]he sale, exchange, or 22 interchange of lands . . . under these rules are discretionary,” 36 C.F.R. § 254.35 (e). 23 Defendants are correct that the statute grants the Secretary discretion to determine 24 when to transfer land, but that discretion is not unfettered. The regulations set forth seven 25 factors for the USFS to consider when determining whether the public interest will be 26 served by a conveyance of NFS land. 36 C.F.R. § 254.36 (c); see also 16 U.S.C. § 521h(1) 27 (requiring the Secretary to issue regulations specifying criteria for determining what 28 constitutes the public interest). And the regulations further provide five factors for the 1 USFS to consider “when determining whether to convey lands upon which encroachments 2 exist.” 36 C.F.R. § 254.32 (c). Thus, although the STA leaves much to the Secretary’s 3 discretion, it is not “drawn in such broad terms that in a given case there is no law to apply.” 4 See Citizens to Preserve Overton Park, 401 U.S. at 410 . The STA therefore provides 5 substantial law upon which a court can review the agency’s decisions.1 Still, judicial review 6 of agency action under the STA is necessarily limited to the select few provisions in the 7 STA and its accompanying regulations that are mandatory. See, e.g., 16 U.S.C. 8 § 521d(a)(1) (requiring that transfers be in the public interest); 36 C.F.R. § 254.32 (c) 9 (requiring USFS to consider factors when determining whether to convey land); 36 C.F.R. 10 § 254.35 (placing certain limitations on land transfers). Aside from such provisions, the 11 regulations make clear that transfers under the STA “are discretionary.” 36 C.F.R. 12 § 254.35(e). And notably, nothing in the STA entitles any applicant to the acquisition of 13 NFS land. 14 Plaintiff appears to understand that he is not entitled to any specific purchase—he 15 clarifies that he “is not arguing that the Forest Service should have sold him eight acres of 16 land.” (Reply at 11.) Rather, Plaintiff argues that the partial denial of his application and 17 the decision to exclude a portion of the corrals were arbitrary and capricious. (MSJ at 5.) 18 Plaintiff focuses his arguments on whether the corrals were “encroachments” in “trespass” 19 and whether he had notice of any encroachment based on certain grazing permits. (MSJ at 20 5–8.) But these arguments are inapposite because Plaintiff does not argue that Defendants 21 failed to comply with a mandatory provision of the STA or the regulations. In fact, Plaintiff 22 acknowledges that Defendants “appropriately concluded that the disposal of 0.59 acres of 23 Forest Service land was in the public interest.” (MSJ at 4.) The administrative record also 24 shows that Defendants considered the five factors set forth in 36 C.F.R. § 254.32 (c) that 25 they were required to consider “when determining whether to convey lands upon which 26 encroachments exist.” (Doc. 34-9 at 5.) Furthermore, Defendants explained to Plaintiff that [27] 1 At least one appellate court has reviewed a USFS decision to exchange land under 28 the STA. See Citizens’ Comm. to Save Our Canyons v. U.S. Forest Serv., 297 F.3d 1012 (10th Cir. 2002). 1 they were reducing the land for sale to 0.59 acres because that was the “minimum 2 necessary” to resolve the encroachments, which is precisely what is required by regulation. 3 See 36 C.F.R. § 254.35 (g) (“The area of land conveyed shall be limited to the minimum 4 necessary to resolve encroachment.”). 5 Plaintiff’s arguments thus fall outside the scope of the court’s review. Because 6 Plaintiff fails to identify any mandatory provision that Defendants failed to adhere to when 7 electing to reduce the amount of land for sale, the Court cannot conclude that Defendants 8 acted beyond the bounds of the discretion granted to them by law. 9 B. The Appraisal 10 Plaintiff also argues that Defendants acted arbitrarily and capriciously by relying on 11 an appraisal that failed to comply with the Uniform Appraisal Standards for Federal Land 12 Acquisition (“UASFLA”). More specifically, he argues that the appraiser erred in 13 determining the highest and best use, selecting a consistent zoning, and finding comparable 14 land sales, and the appraiser failed to consider that the land for sale is “landlocked.” (MSJ 15 at 11–15.) 16 The regulations provide that the valuation of tracts for sale under the STA shall be 17 determined “by recognized appraisal methods following Forest Service appraisal 18 procedures and the [UASFLA].” 36 C.F.R. § 254.2 (b). According to the UASFLA, an 19 appraiser must determine the land’s “highest and best use,” which is “[t]he highest and 20 most profitable use for which the property is adaptable and needed or likely to be needed 21 in the reasonable future.” (Doc. 34-9 at 40.) To make this determination, appraisers must 22 analyze four “tests,” ensuring that the highest and best use is physically possible, legally 23 permissible, financially feasible, and results in the highest value. (Doc. 34-9 at 40–41.) The 24 appraiser then determines the land’s value using one of several methods. The “preferred 25 method”—and the one used here—is the “sales comparison approach.” (Doc. 34-9 at 44.) 26 This method requires the appraiser to “study the market for sales of properties with the 27 same highest and best use as the subject property that are as close in proximity and time as 28 possible.” (Doc. 34-9 at 44.) Each comparable sale is then “adjusted for elements that are 1 different from the subject property and the resulting array of sales data is reconciled to a 2 final opinion of market value.” (Doc. 34-9 at 44.) 3 In the appraisal report here, the appraiser analyzed the four tests and determined that 4 the highest and best use for the tract was “rural residential and agricultural use.” (Doc. 34-2 5 at 24.) But in the report’s “executive summary,” the appraiser stated that the highest and 6 best use was “single-family rural residential.” (Doc. 34-2 at 9.) Plaintiff challenges the 7 latter characterization, arguing that the appraiser failed to consider the reasonable probable 8 future use of the 0.59 acres, which he states is “rural residential and agricultural.” (MSJ at 9 12–13.) The appraiser, however, considered that “[t]he most probable buyer and user of 10 the subject tracts would be an individual or family interested in developing a single-family 11 residence with ancillary agricultural uses.” (Doc. 34-2 at 24.) 12 Plaintiff also takes issue with the appraiser appraising the land as if it were zoned 13 for single-family residences. (MSJ at 13–14.) He suggests that a “more appropriate zoning” 14 would have been “rural residential” or “general rural,” and he contends that the appraiser 15 should have considered “more appropriate comparables that were in areas zoned for rural 16 residential or general rural.” (MSJ at 13–14.) However, Plaintiff does not show that the 17 appraiser’s zoning was necessarily incorrect, nor does he demonstrate that his preferred 18 zoning was even possible.2 And although he suggests that there is “nearby property that is 19 similarly zoned,” he does not specifically identify any such properties, nor do any appear 20 in the administrative record. (MSJ at 13.) Moreover, the appraiser noted that “[f]or rural 21 properties with potential residential use, the market is limited to very specific areas and 22 there is little data,” adding that “sales activity in the subject area is extremely limited, with 23 an average of three sales of rural residential lots annually over the past ten years.” 24 (Doc. 34-2 at 39.) This suggests that Plaintiff’s wish for “more appropriate comparables” 25 may not have been feasible, and he makes no showing to the contrary. Furthermore, the [26] 2 The Court “is not required to resolve any facts” in ruling on this Motion, 27 Occidental Eng’g Co., 753 F.2d at 769, but the Court notes that the Gila County Zoning and Development Code appears to require “rural residential” lots to be “not less than one 28 acre,” and “general rural” lots to be “not less than three acres.” (Doc. 34-10 at 127–28, 130–31.) 1 appraiser acknowledged that the comparable parcels differed in several aspects from the 2 land for sale, including their zoning, size, and location. (Doc. 34-2 at 29, 38–41.) But the 3 appraiser considered quantitative and qualitative adjustments for each comparable lot 4 before reaching a final conclusion, as is required by the UASFLA. (Doc. 34-2 at 38, 42-43; 5 Doc. 34-9 at 45.) 6 Finally, Plaintiff argues that the appraisal report relied on inaccurate information 7 regarding access to the parcel for sale. (MSJ at 14.) In the “property data” section of the 8 report, the appraiser concluded that the land had “average” accessibility, noting that the 9 property is accessible via Jones Ranch Road. (Doc. 34-2 at 19.) Plaintiff argues, apparently 10 for the first time, that the report fails to consider that “the 0.59 acre parcel is actually 11 landlocked, because the Jones Ranch Road is a private road that has no public easements 12 along it.” (MSJ at 14.) 13 Plaintiff, however, fails to demonstrate that accessibility within the meaning of the 14 UASFLA contemplates legal encumbrances. The UASFLA does not specifically define 15 “access,” but it does provide examples such as “topographical constraints or distance to 16 road or rail line.” (Doc. 34-9 at 63.) Without a showing from Plaintiff that the land’s 17 accessibility is affected by a lack of easements, the Court cannot conclude that the appraiser 18 erred in finding the property accessible. 19 Ultimately, Plaintiff fails to show that the appraiser did not comply with the 20 UASFLA in deciding the highest and best use of the land, determining a consistent zoning, 21 finding appropriate comparable sales, or analyzing the land’s accessibility. And even if 22 Plaintiff could show some error in the appraisal process, he fails to show exactly how any 23 of the alleged errors would change the ultimate valuation of $27,000 for the 0.59 acres of 24 land. Accordingly, the Court concludes that Defendants did not arbitrarily or capriciously 25 accept the appraisal. 26 C. Summary Judgment 27 Although Defendants ask the Court in their brief “to enter judgment in the 28 government’s favor and dismiss this action,” the only Motion before the Court is Plaintiff’s. 1 || However, “[e]ven when there has been no cross-motion for summary judgment, a district 2|| court may enter summary judgment sua sponte against a moving party if the losing party || has had a ‘full and fair opportunity to ventilate the issues involved in the matter.’” Gospel Missions of Am. v. City of L.A., 328 F.3d 548, 553 (9th Cir. 2003) (quoting Cool Fuel, Inc. || v. Connett, 685 F.2d 309, 312 (9th Cir. 1982)). After considering Plaintiff's Motion and || Reply, and examining the administrative record, the Court finds that Plaintiff has had a “full and fair opportunity to ventilate the issues involved.” The Court will therefore deny 8 || Plaintiff's Motion for Summary Judgment and enter summary judgment sua sponte in favor 9|| of Defendants. 10 IT IS THEREFORE ORDERED denying Plaintiff Charley Johnson’s Motion for || Summary Judgment and Memorandum of Law in Support Thereof (Doc. 33). 12 IT IS FURTHER ORDERED granting summary judgment in favor of Defendants. 13 IT IS FURTHER ORDERED directing the Clerk to enter judgment in favor of Defendants and to close this case. 15 Dated this 26th day of February, 2024. CN 16 “wok: Unifga StatesDistrict Judge [28] -9-