A federal court in the Northen District of Iowa has found the wetlands conservation program commonly known as “Swampbuster,” is constitutional. The decision, issued on May 29, 2025, stemmed from a lawsuit filed by a landowner in 2024 who claimed that Swampbuster was both an unconstitutional violation of the Commerce Clause and served as an unconstitutional taking of private land. However, the court disagreed, concluding that Swampbuster is a valid exercise of Congress’s spending power and that the law should be upheld.
Background
Swampbuster is the term commonly used to refer to provisions of the Highly Erodible Land and Wetland Conservation program that address wetland conservation. The goal of Swampbuster is to conserve wetlands across the country by reducing the incentive to convert wetlands into areas capable of producing an agricultural commodity. Under Swampbuster, any agricultural producer who converts a designated wetland into an area capable of agricultural production will become ineligible for certain benefits granted by the United States Department of Agriculture (“USDA”).
Swampbuster is implemented by the USDA’s Natural Resources Conservation Service (“NRCS”). As part of its Swampbuster responsibilities, NRCS carries out a process known as wetland determination. Under that process, NRCS will classify an area as being either a type of wetland, a converted wetland, or an area not subject to Swampbuster regulation. If an area is designated as a wetland by NRCS, converting that wetland will result in loss of USDA benefits. If a landowner disagrees with a wetland determination for a portion of their property, they can request that NRCS review the certification. 16 U.S.C. § 3822 (a)(5). However, NRCS will only recertify a designated wetland if “the final certification is no longer a reliable indication of site conditions[.]” 7 C.F.R. § 12.30(c)(6).
The complaint in CTM Holdings, LLC v. U.S. Dep’t of Agriculture, No. 6:24-cv-2026 (N.D. Iowa, May 29, 2025) was initially filed by a landowner in Iowa on April 16, 2024. The plaintiff in the case was a limited liability company that owned 1,075 acres of farmland in Iowa, including nine acres that were designated as “wetland” by USDA in 2010 prior to the plaintiff’s purchase of the land. According to the plaintiff, the wetland determination prevented it from using the nine acres to produce an agricultural crop which resulted in the plaintiff losing any profits from crops that could have been grown. The plaintiff claimed that it had no choice but to give up all uses of the nine acres or lose USDA benefits. For those reasons, the plaintiff argued that Swampbuster is unconstitutional under the Commerce Clause of the United States Constitution, and amounts to an unconstitutional “Takings” in violation of the Fifth Amendment.
In response, USDA claimed that Swampbuster is a valid constitutional exercise of Congress’s spending power, citing three previous courts that have ruled accordingly. Similarly, USDA argued that Swampbuster is not a Takings because it “does not independently taking anything from, or require anything of, the landowner.”
After reviewing the arguments, the federal court in Iowa found that Swampbuster was constitutional and ruled in favor of USDA.
Court Decision
In drafting its decision, the court in CTM Holdings, LLC v. U.S. Dep’t of Agriculture had two questions to answer: first, did the plaintiff have the standing necessary to bring this case, and second, was Swampbuster unconstitutional. In both instances, the court answered no.
Does the Plaintiff Have Standing?
In order for a plaintiff to bring a lawsuit before a judge, they need to demonstrate that they have standing to bring the case. Generally, a plaintiff must satisfy three elements to show that they have standing. First, the plaintiff must show that they suffered a real injury or an “injury in fact.” Usually, this means that the plaintiff must show that they have been actually harmed in some concrete way. Second, the plaintiff must show that the defendant’s actions directly lead to the injury the plaintiff suffered. Third, the plaintiff must show that the court has the ability to provide an adequate remedy for the plaintiff’s injuries. Additionally, if a plaintiff is challenging an action taken by a federal agency, the action must be a “final agency action.” The term “final agency action” comes from the Administrative Procedure Act, the federal law that governs agency procedure, and is defined as an agency action that is “made reviewable by statute” or “for which there is no other adequate remedy” other than in a court of law. 5 U.S.C. § 704.
To determine whether the plaintiff in CTM Holdings, LLC v. U.S. Dep’t of Agriculture had standing to bring its case, the court began by noting that there was no final agency action for the plaintiff to challenge. While the plaintiff argued that a letter issued to it by NRCS in 2022 notifying the plaintiff on how to request review of the 2010 wetlands determination was a final agency action, the court disagreed. According to the court, there is no evidence indicating that the plaintiff had formally requested a review of the wetland determination. Because the letter from NRCS merely notified the plaintiff about how to request a review of the determination, and because plaintiff never submitted a request for review, the court determined that there was no final agency action for the plaintiff to challenge
The court also considered whether the plaintiff met the three elements traditionally required to demonstrate standing. According to the court, the plaintiff failed to meet the first element of standing which requires a plaintiff to demonstrate that they have suffered an injury in fact. Specifically, the court noted that the plaintiff had failed to allege that it had suffered an injury that was “actual or imminent.” Instead, the plaintiff only alleged a “speculative chain of possibilities” by claiming that if the nine acres that had been designated as wetlands were not classified that way, then the plaintiff could farm on those acres without risking the loss of USDA benefits. According to the court, that was not sufficient to satisfy the injury requirement for standing both because the plaintiff had never sought to have the wetlands designation reviewed, and because under Swampbuster the plaintiff could have farmed the nine acres without losing farmland benefits by mitigation the impacts of the converted wetlands. For those reasons, the court determined that the plaintiff did not have standing to bring the case.
Is Swampbuster Constitutional?
While the court could have resolved the case on the standing question alone, it chose to consider the merits of the plaintiff’s challenge to the constitutionality of Swampbuster. First, the court considered whether Swampbuster violated the Commerce Clause of the United States Constitution. Then, the court considered whether Swampbuster had resulted in an unconstitutional Takings of the plaintiff’s property.
The Commerce Clause of the United States Constitution grants Congress the power “to regulate Commerce with foreign Nations, and among the several States.[]” U.S. Const. ArtI.S8.C3. Congress has typically relied on the Commerce Clause as the basis for passing legislation that regulates the activities of states and citizens. In CTM Holdings, LLC v. U.S. Dep’t of Agriculture, the plaintiff argued that Swampbuster is an invalid exercise of Congress’s Commerce Clause authority because it does not regulate interstate or foreign commerce. Instead, it regulates lands that usually lie completely within the boundaries of one state, such as the plaintiff’s nine acres of designated wetlands which are located entirely within the state of Iowa.
The court disagreed. According to the court, Swampbuster does not violate the Commerce Clause because it is based on Congress’s spending power, not the Commerce Clause. Article I, Section 8, clause 1 of the United States Constitution provides that Congress “shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States[.]” In South Dakota v. Dole, 483 U.S. 203 (1987), the Supreme Court held that “[i]ncident to this power, Congress may attach conditions on the receipt of federal funds,” and noted that Congress had repeatedly used its spending power to “further broad policy objectives by conditioning the receipt of federal moneys upon compliance by the recipient with federal statutory and administrative directives.” According to the court in CTM Holdings, LLC v. U.S. Dep’t of Agriculture, Swampbuster is a valid exercise of Congress’s spending power because it conditions the receipt of USDA monetary benefits on compliance with Swampbuster’s directive to not convert designated wetlands into land that could be used to produce an agricultural commodity. Additionally, the court cited several cases, including a decision from the Seventh Circuit Court of Appeals, U.S. v. Dierckman, No. 98-4131 (7th Cir. 2000), which have reached the same conclusion.
Finally, the court considered whether Swampbuster had caused an unconstitutional Takings of the plaintiff’s property. The Fifth Amendment to the United States Constitution states that “nor shall private property be taken for public use, without just compensation.” In other words, the Fifth Amendment establishes that the federal government may not “take” private property without providing the owner with appropriate compensation. The plaintiff in CTM Holdings, LLC v. U.S. Dep’t of Agriculture argued that Swampbuster amounted to an unconstitutional Takings of the nine designated wetland acres because it was required to give up the right to farm the land without receiving just compensation.
However, the court was not convinced. First, the court noted that the plaintiff had voluntarily excepted the “government’s offer” to not farm the nine acres because the plaintiff accepted the USDA benefits that it received in return. Second, while the plaintiff had agreed not to convert the nine acres of wetland into cropland, there were still other things that the plaintiff could do with the land that would not violate Swampbuster. Finally, the court noted that the typical remedy for an illegal Takings is appropriate compensation for the private property. However, here the court noted that the plaintiff was already receiving compensation for not farming the wetland acres in the form of USDA benefits. Therefore, the court reasoned that even if the wetland determination amounted to a Takings, the plaintiff was being appropriately compensated. For those reasons, the court determined that Swampbuster had not caused an unconstitutional Takings of the plaintiff’s property.
Ultimately, the court concluded its decision by finding that Swampbuster was constitutional under Congress’s spending power and dismissed the case.
Conclusion
The court in CTM Holdings, LLC v. U.S. Dep’t of Agriculture is the latest to consider whether Swampbuster is unconstitutional under the Commerce Clause. In 2021, a landowner in South Dakota filed a lawsuit alleging that Swampbuster was a violation of the Commerce Clause. There, the court also concluded that Swampbuster was a valid exercise of Congress’s spending power. Like the court in CTM Holdings, LLC v. U.S. Dep’t of Agriculture, the court in the South Dakota case relied on U.S. v. Dierckman to support it conclusion. More information on the South Dakota lawsuit is available here.
While it is possible that the plaintiff could appeal the ruling to the Eighth Circuit Court of Appeals, it is unclear whether it would be successful. To date, courts have been unwilling to find that Swampbuster violates the Commerce Clause and instead have consistently held it to be a valid exercise of Congress’s spending power.
To read the court’s decision in CTM Holdings, LLC v. U.S. Dep’t of Agriculture, click here.
To read the plaintiff’s complaint, click here.
To read the court’s decision in U.S. v. Dierckman, click here.
To read the text of Swampbuster, click here.