Unpublished Disposition, 932 F.2d 973 (9th Cir. 1989)

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US Court of Appeals for the Ninth Circuit - 932 F.2d 973 (9th Cir. 1989)

William G. CROOK, Mary L. Crook, Plaintiffs-Appellants,v.Clayton YEUTTER, successor to Richard E. Lyng, as Secretaryof Agriculture of the United States, F. Dale Robertson,Chief of the Forest Service of the United States Departmentof Agriculture, Defendants-Appellees.

No. 89-16429.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 12, 1991.Decided May 10, 1991.

Before SCHROEDER, BEEZER and NOONAN, Circuit Judges.



In 1987 the Forest Service rejected William and Mary Crook's application for a grazing permit. The Service rejected the application on the grounds that the Crooks had submitted a " 'false and fraudulent' partnership statement" when previously applying for a permit. The Crooks exhausted their administrative remedies and sought relief in federal district court. The district court affirmed, finding the agency's decision was supported by substantial evidence, was in accordance with the agency's regulations, and was not arbitrary or capricious. The Crooks filed a timely appeal. We affirm.


In 1971 the Forest Service issued a permit to William and Mary Crook which authorized them to graze cattle on the Rosasco allotment of land located in the Stanislaus National Forest. In 1972 the Crooks sold substantially all of their cattle to Leonard Brooks and leased some of their property to him for three years. These actions disqualified the Crooks from obtaining the Rosasco grazing permit. The Crooks did not want to relinquish control over the permit so they signed a false statement which said nothing of the sale of the cattle to Brooks, but rather stated that the cattle were owned by a partnership, allegedly comprised of the Crooks and Leonard Brooks. In his 1972 application for the Rosasco permit, William Crook also wrote that Brooks had a "60% financial interest" in the cattle. This statement also was false. Based on this information, the Forest Service issued the permit to the fictitious partnership. The Service issued grazing permits to the partnership throughout the 1970's.

On February 21, 1986 the Forest Supervisor for the Stanislaus National Forest cancelled the partnership's grazing permit because of the Crooks' submission of the false and fraudulent information. The Crooks appealed the decision to the Regional Forester but did not seek judicial review.

On February 28, 1987 the Crooks, not the fictitious partnership, applied for the Rosasco permit. According to an announcement made by the Forest Supervisor, the Crooks had the highest priority for receiving the permit. On November 20, 1987, the Forest Supervisor denied the Crooks' application and issued the permit to another party (Tim Erickson) with a lower priority. The Supervisor denied the Crooks' application because he found the Crooks submitted false and fraudulent information.

The Crooks appealed the Supervisor's decision to the Regional Forester, who affirmed the Supervisor's ruling. The Crooks then appealed to the Chief of the Forest Service, who also affirmed, and the Secretary of Agriculture declined review.

On December 14, 1988, the Crooks filed a complaint in federal district court. The parties submitted written briefs, and on September 19, 1988 the court heard oral argument. On October 2, 1989, the court entered judgment in favor of the Secretary. The Crooks filed a timely appeal and now seek injunctive and declaratory relief from this court.


We review the agency's final decision pursuant to the standards set forth in the Administrative Procedure Act, 5 U.S.C. § 706. Under those standards we will set aside the agency's decision only if it is "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law." Id. at Sec. 706(2) (A)-(D); Utility Reform Project v. Bonneville Power Admin., 869 F.2d 437, 442 (9th Cir. 1989).

The Crooks argue that we should review this case de novo because there was no adversary hearing. We review an administrative decision de novo only when we are convinced the agency's fact-finding procedures are inadequate. See Camp v. Pitts, 411 U.S. 138, 142 (1973); Citizens To Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415 (1971). Here the agency's fact-finding procedures were adequate without an adversary hearing. The Forest Service's procedures afforded the Crooks two levels of appeal to successively higher Forest Service officials. 36 C.F.R. Sec. 211.18(f) (1). At each level of appeal the Crooks submitted written reasons and comments supporting their appeal; they provided information for the record, including written documents; and they also were given the opportunity to make an oral presentation. Id. at Secs. 211.18(c) (1), (k), (m) & (p). Finally, the procedures allowed " [a]ny person or organization" to "submit written comments for the record," and the reviewing officer was entitled to consider any information "necessary to reach a decision." Id. at Secs. 211.18(k) & (p). These procedures allowed the Forest Service to establish adequately all of the relevant facts.

B. The Agency was Justified in Denying the Crook's Application

The Crooks advance several arguments in support of their contention that the Forest Service's ruling in this case is unwarranted. We are not persuaded by any of the arguments.

First, we reject the Crooks' argument that the Forest Service did not follow its rules when it issued the Rosasco permit to someone other than the Crooks. The Forest Supervisor did determine that the Crooks had the highest priority, but this finding was not an all-inclusive, binding ruling which precluded the Forest Service from denying the permit based on other factors. See Chrysler Corp. v. Brown, 441 U.S. 281 (1979); Powderly v. Schweiker, 704 F.2d 1092, 1098 (9th Cir. 1983); Rank v. Nimmo, 677 F.2d 692, 698 (9th Cir.) cert. denied, 459 U.S. 407 (1982). Indeed, the Forest Service's denial of the Crooks' application was in complete accord with its rules and regulations. The Service permanently cancelled the fictitious partnership's permit because the members of that supposed partnership had been fraudulent. That decision is final. The Crooks, the very members who had submitted the false information for the partnership, should not be allowed to obtain the same permit simply by applying as individuals, especially in light of the fact that they have contended the partnership never existed in the first place. See 36 C.F.R. Sec. 222.1(4) & 222.3(c) (iii) (1990); 43 U.S.C. § 1752(c).

The Crooks also argue that the agency erred by relying on a previous agency decision and by relying on a statement made by the Crooks' attorney in a post-trial brief in a state action between the Crooks and Brooks. The brief stated that the Crooks testified at the state trial that they had signed the partnership statement "with full knowledge that the agreement was false and fraudulent."

The previous agency decision and the Crooks' post-trial brief certainly augmented the Service's case against the Crooks, but this evidence was not essential to the Service's decision; even without this evidence there was substantial evidence in the record upon on which the Service could base its decision. For example, William Crook's application in 1972 stated that the cattle would be owned by a partnership, and he wrote that Leonard Brooks had a "60% financial interest" in the cattle. These statements were false. The Crooks admit in their opening brief that the sale of their cattle to Brooks "disqualified [them] as holders" for the permits. They state that they signed the statement of partnership in an effort "to retain some interest in [the permit] and thereby secure Brooks' performance of the obligations to them under their lease of their private land." This admission and the false statements in the application are enough to convince us that the Forest Service's decision in this case was based on substantial evidence and was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.

Finally, for the reasons stated in our discussion of the standard of review, we reject the Crooks' argument that Forest Service's fact-finding procedures were inadequate. We also reject the Crooks' related procedural due process claim. Balancing any property interest the Crooks may have had in obtaining the permit against the government's interest, which includes "the functions involved and the fiscal and administrative burdens that the additional or substitute procedural requirements would entail," we hold that the Forest Service's procedures provided the Crooks with due process. Mathews v. Eldridge, 424 U.S. 319, 335 (1976); Ressler v. Pierce, 692 F.2d 1212, 1216 (9th Cir. 1982); Stretten v. Wadsworth Veteran Hospital, 537 F.2d 361, 369 (9th Cir. 1976).


SCHROEDER, Circuit Judge, concurring:

I concur in the result. Regardless of whether the appellants were guilty of fraud or bad faith, the record does not support their entitlement to the preference they claim. They did not meet the priority requirements of applicable regulations.


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3