Fence Creek Cattle Company, an Oregon partnership v. United States Forest Service, an agency of the United States

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 FENCE CREEK CATTLE COMPANY, an
Oregon partnership; GAZELLE LAND
AND TIMBER, LLC, an Oregon
limited liability company; KING
WILLIAMS; MICHAEL G. SMITH,
Plaintiffs-Appellants,
v.
No. 08-36051 UNITED STATES FOREST SERVICE, an
agency of the United States; MARY D.C. No.
 DEAGUERO, in her official capacity 2:06-cv-01236-SU
as District Ranger, Eagle Cap- OPINION
HCNRA District, Wallowa-
Whitman National Forest;
BARBARA WALKER, in her official
capacity as District Ranger,
Wallowa Valley District,
Wallowa-Whitman National
Forest,
Defendants-Appellees. 
Appeal from the United States District Court
for the District of Oregon
Ancer L. Haggerty, Senior District Judge, Presiding
Argued and Submitted
March 1, 2010—Portland, Oregon
Filed April 26, 2010
Before: Richard A. Paez, Richard C. Tallman, and
Milan D. Smith, Jr., Circuit Judges.
6117

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Opinion by Judge Tallman
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COUNSEL
Paul A. Turcke, Moore Smith Buxton & Turcke, Chartered,
Boise, Idaho, for the plaintiffs-appellants.
Kurt G. Kastorf (argued) and David Shilton, U.S. Department
of Justice Environment & Natural Resources Division, and
John C. Cruden, Assistant Attorney General, for the
defendants-appellees.
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OPINION
TALLMAN, Circuit Judge:
The issue in this case boils down to a simple question:
Where’s the beef? Plaintiff-Appellant Fence Creek Cattle
Company (“Fence Creek”) claimed that it had purchased over
1,500 head of cattle from the former owner, which it wished
to continue grazing on federal land. But, when questioned by
the United States Forest Service (“Forest Service”), Fence
Creek could not sufficiently prove that it owned the cattle.
Consequently, the Forest Service cancelled portions of Fence
Creek’s livestock grazing permit.
The Forest Service issued a term grazing permit to Fence
Creek on February 6, 2004. The permit allowed cattle grazing
on four allotments in Oregon’s Wallowa-Whitman National
Forest: Chesnimnus, Log Creek, Dodson-Haas, and Mid-
dlepoint. However, the Forest Service cancelled Fence
Creek’s use of the Chesnimnus and Log Creek allotments on
December 9, 2005, for failure to comply with the terms and
conditions of the permit. Fence Creek invoked the Forest Ser-
vice’s internal procedures for administrative review, appeal-
ing to both the Deputy Forest Supervisor and the Deputy
Regional Forester. Each reviewer upheld the decision.
Still unsatisfied with the cancellation of the two allotments,
Fence Creek filed a complaint in the United States District
Court for the District of Oregon alleging under the Adminis-
trative Procedure Act (“APA”) that the Forest Service’s deci-
sion was arbitrary and capricious and that the Forest Service
violated both constitutional and statutory due process require-
ments. The district court granted the Forest Service’s sum-
mary judgment motion, and we affirm.
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I
The facts pertaining to the grazing permit at issue arise
from a real estate transaction in Wallowa County, Oregon. In
September 2003, Gazelle Land & Timber (“Gazelle”) pur-
chased over 27,000 acres of land, called the Lucky Diamond
Ranch, 1,459 cows, and 92 bulls from Garnet Lewis. The real
estate sales agreement required Lewis to deliver grazing per-
mit waivers to Gazelle, or its nominee, for specific federal
grazing allotments, including the ones at issue in this appeal.1
The real estate sales agreement also provided that certain par-
cels of land be deeded to Fence Creek.2
On February 4, 2004, Fence Creek submitted an application
for a grazing permit for the Chesnimnus, Log Creek, Dodson-
Haas, and Middlepoint allotments.3 The application was sup-
ported by waivers signed by the previous permittees operating
1A grazing permit authorizes the holder to graze livestock on specific
allotments of the National Forest Service lands. See 36 C.F.R.
§ 222.1(b)(5). An allotment is a designated portion of government land
available for livestock grazing under terms and conditions specified in this
special use permit. See id. § 222.1(b)(1). A permit holder has first priority
to receive a new permit at the end of the term period. Id. § 222.3(c)(1)(ii).
If the permittee sells the livestock allowed to graze on an allotment, a new
term permit is issued to the purchaser only if the original permittee waives
his term grazing permit in favor of the purchaser. Id. § 222.3(c)(1)(iv).
Thus, a waiver is essentially a transfer of the original permit holder’s graz-
ing rights to the purchaser and is necessary for the purchaser to obtain a
new grazing permit.
2The real estate sales agreement identified Gazelle as the “Buyer” and
Garnet Lewis and his family as the “Seller.” Numerous addenda to the
agreement involved parties not listed in the original agreement, including
Fence Creek. It is unclear from the record why the additional parties bene-
fitted from the real estate transaction; we can only assume it was in con-
junction with the joint venture formed after the transaction occurred.
3Although the Forest Service’s inquiry into Fence Creek’s grazing per-
mit included all four allotments, the Forest Service took no action against
the Dodson-Haas and Middlepoint allotments. Therefore, this opinion will
discuss only the Chesnimnus and Log Creek allotments.
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on the allotments: Delbert Lewis, Garnet Lewis, Geraldine
Lewis, and Barbara Kudrna. The Chesnimnus allotment was
permitted for 850 head of cattle, and the Log Creek allotment
was permitted for 247 head. Fence Creek also provided a bill
of sale indicating that Fence Creek, a partnership of Wayne
and Michele Smith and Bruce and Mary Agar, purchased
1,459 cows and 92 bulls from Garnet Lewis. Bruce and Mary
Agar, as the partners of Fence Creek, signed the application
for the grazing permit and the supporting waivers. On Febru-
ary 6, 2004, the Forest Service issued the grazing permit for
the Chesnimnus and Log Creek allotments pursuant to the
terms of the waivers and application: it again permitted 850
head of cattle to graze on the Chesnimnus allotment and 247
head to graze on the Log Creek allotment.
In conjunction with the purchase of the Lucky Diamond
Ranch, Gazelle and Fence Creek formed a joint venture with
Wayne and Michele Smith, Monty and Shelly Siddoway,
Bryan and Zachary Williams, and Wyatt Agar in October
2004. The joint venture agreement provided that the members
of the joint venture had purchased smaller parcels of land that
were originally part of the Lucky Diamond Ranch. It also
identified Fence Creek as the purchaser of nearly 1,500 head
of cattle and the associated grazing permit.
In June 2005, seventeen months after the issuance of the
grazing permit, the Forest Service began investigating the
ownership of certain cattle that Rick Smith, a Forest Service
employee, had observed on Fence Creek’s allotments during
the 2004 grazing season. Smith saw cattle grazing on the
Chesnimnus allotment bearing a brand other than the regis-
tered Lucky Diamond brand. The terms and conditions of
Fence Creek’s grazing permit authorized only Fence Creek’s
cattle to graze on the permitted allotments.
The owner of the cattle seen on the Chesnimnus allotment,
Wayne Smith, claimed that he had sold them to Fence Creek
and that the cattle were in fact marked with the Lucky Dia-
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mond brand, but it was smaller (and harder to see) because the
brand was affixed as a hair brand rather than a cow brand.4
There followed a series of telephone calls, meetings, and writ-
ten communications. Bruce Agar told the Forest Service that
Fence Creek originally planned to cull the cattle purchased
from Garnet Lewis and replace the culled cattle with cattle
purchased from Wayne Smith and Monty and Shelly Sid-
doway. Although the grazing permit did not list either Wayne
Smith or the Siddoways as partners of Fence Creek, Bruce
Agar claimed that the intent was to include at least Wayne
Smith as a partner of Fence Creek. Unsatisfied with the expla-
nation offered by Wayne Smith and Bruce Agar, the Forest
Service decided to seek clarification of who owned the cattle
to determine if further action was necessary.
The Forest Service sent a written request to Fence Creek on
June 28, 2005, seeking additional documentation that Fence
Creek was in compliance with the terms and conditions of the
grazing permit. The letter explicitly stated that Fence Creek
needed to submit proof of ownership of the livestock permit-
ted on the allotments and listed acceptable methods of proof.
It also reminded Bruce and Mary Agar that “only livestock
owned by the permittee are authorized to graze under this per-
mit.” This letter did not state that Fence Creek’s grazing per-
mit would be subject to cancellation; it simply requested
verification that Fence Creek met the eligibility requirements
for its grazing permit.
The Agars visited the local Forest Service office to address
the issues identified in the written inquiry. They produced
brand inspection certificates for 600 head of cattle purchased
from the Lewis family in 2003. The Agars admitted that they
only purchased 600 head and that they had never received a
bill of sale listing them as purchasing all 1,459 cows and 92
4A hair brand is a temporary brand because it only burns the hair and
does not damage the skin. Because it simply burns the animal’s hair, it
only lasts until the bovine sheds its hair.
6124 FENCE CREEK CATTLE CO. v. USFS

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bulls. Instead, they intended to buy 600 head from the Lewis
family and then add another 400 contributed by Wayne and
Michele Smith and Monty and Shelly Siddoway as capital for
the Fence Creek partnership. One month later, the Agars sub-
mitted information claiming that they had in fact purchased
1,459 cows and 92 bulls, but that only 600 cows and 25 bulls
were brand inspected for Fence Creek. Fence Creek repre-
sented that it then “obtained an additional 200 head of cows
and 10 bulls from Wayne Smith . . . and obtained another 175
head from Monty Siddoway” to make a herd of approximately
1,000 head of cattle.
While the Forest Service was investigating Fence Creek’s
grazing permit, the joint venture fractured and the parties
entered into a settlement agreement on June 17, 2005. Under
the terms of this agreement, Bruce and Mary Agar were to
receive a lump-sum buyout in exchange for the transfer of all
right, title, and interest in the Fence Creek partnership and
brands, as well as the grazing permit issued to Fence Creek.
The Agars also relinquished all right, title, and interest in
Gazelle. King Williams, a partial owner of Gazelle, then noti-
fied the Forest Service that he was in control of Fence Creek.
Bruce and Mary Agar requested the Forest Service contact
Williams regarding its concerns over the grazing permit
issued in February 2004, but the Forest Service responded that
it needed to ensure that Fence Creek had in fact purchased the
cattle from Garnet Lewis before it would accept a waiver of
the grazing permit from the Agars to Williams.
The Forest Service sent the Agars a letter on September 6,
2005, with a copy to Williams, again attempting to acquire
information that would validate the grazing permit issued to
Fence Creek in February 2004. It explicitly stated that the
grazing permit could be cancelled if Fence Creek failed to
provide the necessary documentation and requested a
response by September 30, 2005. In response, the Agars
stated that they had no brand inspection certificate validating
the purchase of 247 permitted cattle for the Log Creek allot-
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ment, and that they only purchased 600 cows from Garnet
Lewis. The Agars told the Forest Service that Wayne and
Michele Smith and Monty and Shelly Siddoway were sup-
posed to be partners in Fence Creek, but were unable to obtain
financing. The Agars admitted there was no brand inspection
certificate showing that Fence Creek had purchased the cattle
“contributed” by either the Smiths or the Siddoways.
King Williams responded by arguing that the grazing per-
mit for the Log Creek allotment was waived on the basis of
the purchase of the base property, and that Fence Creek culled
a substantial portion of the 1,459 cows and 92 bulls purchased
from Garnet Lewis. He also asserted that the Forest Service
knew of the culling of the original Lewis herd and that Fence
Creek did not have the necessary “paper trail” because the
Forest Service staff “always assured [Fence Creek] that they
had all of the necessary documents.”
The Forest Service finally sent the Agars a letter on
December 9, 2005, notifying them of cancellation of the per-
mit for the Log Creek allotment “for failure to comply with
the conditions for waiver of a term grazing permit.” The For-
est Service also reduced the permit for the Chesnimnus allot-
ment by 250 head of cow/calf pairs “for failure to comply
with the conditions for waiver of a term grazing permit.”
Finally, the Forest Service cancelled the permit for the Ches-
nimnus allotment in its entirety “for allowing livestock not
owned by the permittee to graze on the permitted allotment.”
Fence Creek administratively appealed the Forest Service’s
decision, claiming that it was arbitrary and capricious and
therefore in violation of the APA. The Forest Service’s deci-
sion was upheld on the first-level appeal. The Deputy Forest
Supervisor found “insufficient evidence to support waiver and
issuance of a term grazing permit” for the Log Creek allot-
ment based on the purchase of either base property or permit-
ted livestock. The reviewing official found there was no
evidence that the Forest Service had approved extensive cull-
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ing by Fence Creek, justifying the reduction of permitted cat-
tle on the Chesnimnus allotment. Additionally, the Deputy
Forest Supervisor found “no documentation to support [Fence
Creek’s] claim that [it] acquired Mont[y] Siddoway or Wayne
Smith livestock prior to stocking them on the Chesnimnus
allotment.” Finally, the reviewing officer found that there was
sufficient support in the record for the complete cancellations.
The Deputy Forest Supervisor also denied all of Fence
Creek’s challenges regarding the factfinding procedures
employed by the Forest Service. Fence Creek then sought
review through a second-level appeal. The Regional Forester
affirmed the Forest Service’s cancellation of the Log Creek
and Chesnimnus allotments for reasons similar to those identi-
fied in the first-level appeal.
Because Fence Creek had exhausted its administrative rem-
edies, it filed a complaint in the District of Oregon alleging
violations of the APA and statutory and constitutional due
process guarantees. Fence Creek sought to expand the admin-
istrative record by adding Forest Service files from twenty-
five other grazing cases, and both parties filed motions for
summary judgment. The district court refused to expand the
administrative record, and then granted the Forest Service’s
motion for summary judgment, concluding that the Forest
Service provided Fence Creek all the due process required
under the APA, and that the Forest Service’s decision was not
arbitrary and capricious. Fence Creek timely filed a Notice of
Appeal, giving us jurisdiction under 28 U.S.C. § 1291.
II
[1] Generally, judicial review of an agency decision is lim-
ited to the administrative record on which the agency based
the challenged decision. Lands Council v. Powell, 395 F.3d
1019, 1029 (9th Cir. 2005). We allow expansion of the
administrative record in four narrowly construed circum-
stances: (1) supplementation is necessary to determine if the
agency has considered all factors and explained its decision;
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(2) the agency relied on documents not in the record; (3) sup-
plementation is needed to explain technical terms or complex
subjects; or (4) plaintiffs have shown bad faith on the part of
the agency. Id. at 1030. We review a district court’s decision
not to expand the administrative record for an abuse of discre-
tion. See Sw. Ctr. for Biological Diversity v. U.S. Forest Serv.,
100 F.3d 1443, 1447 (9th Cir. 1996).
The files Fence Creek wished to include concerned twenty-
five grazing permits that were not cancelled by the Forest Ser-
vice despite being deficient. The district court denied Fence
Creek’s request because it found the administrative record
was complete and that Fence Creek did not make an adequate
showing of necessity or explain its failure to supplement the
record before the agency. On appeal, Fence Creek argues that
the proffered material would “advance the intuitive notion
that the Forest Service dramatically over-reacted [sic].”
[2] We interpret Fence Creek’s argument as an attempt to
supplement the record in order to establish bad faith by the
Forest Service. However, as discussed more thoroughly
below, the Forest Service’s decision to cancel Fence Creek’s
grazing permit for the Chesnimnus and Log Creek allotments
was justified. Fence Creek has not shown that review of
agency files of twenty-five unrelated grazing permits and
actions taken concerning those permits would demonstrate
that the Forest Service acted in bad faith in this specific case.
Fence Creek has not met its heavy burden to show that the
additional materials sought are necessary to adequately
review the Forest Service’s decision here. As we said in
Lands Council, 395 F.3d at 1030, “[t]hese limited exceptions
operate to identify and plug holes in the administrative
record.” Fence Creek has failed to show any such gaps or
holes. We think the voluminous record already before us is
sufficient to conduct the necessary review under the APA. We
simply cannot say that the district court abused its discretion
in denying Fence Creek’s motion.
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III
Fence Creek next challenges the propriety of the Forest
Service’s decision to cancel the Chesnimnus and Log Creek
allotments. The district court granted summary judgment to
the Forest Service on these issues. We conduct a de novo
review of a district court’s grant of summary judgment.
Anchustegui v. Dep’t of Agric., 257 F.3d 1124, 1127 (9th Cir.
2001). Our review of the agency’s decision is from the same
position as the district court. Id. at 1128.
When reviewing agency action, the APA directs us to “hold
unlawful and set aside agency action, findings, and conclu-
sions found to be . . . arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2)(A). We must be careful not to substitute our judg-
ment for that of the agency. Motor Vehicle Mfrs. Ass’n v.
State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
Instead, we examine the agency’s decision to ensure that it
has articulated a rational relationship between its factual find-
ings and its decision; we also must determine that its decision
was based on relevant factors and does not constitute a clear
error of judgment. Id.
Fence Creek challenges the Forest Service’s decision on
two grounds. First, it argues that the decision was a clear error
in judgment because the Forest Service did not explicitly find
that Fence Creek knowingly and willfully misrepresented any
facts relating to the purchase of the Lucky Diamond Ranch
and the permitted livestock. It then argues that the cancella-
tion was arbitrary and capricious because Fence Creek ade-
quately proved that it purchased the livestock necessary to
support waiver of the grazing permit.
A
Fence Creek relies on a federal regulation, 36 C.F.R.
§ 222.4(a)(5), to support its argument that the Forest Service
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must make a factual finding that Fence Creek acted “know-
ingly and willfully” before it may exercise the authority to
cancel the two allotments. The subsection upon which Fence
Creek relies gives the Forest Service the authority to “[c]ancel
or suspend the permit if the permittee knowingly and willfully
makes a false statement or representation in the grazing appli-
cation or amendments thereto.” Id. We do not need to address
whether the Forest Service adequately made a finding of
knowing and willful action, however, because the Forest Ser-
vice’s cancellation of the grazing permit is authorized under
different subsections of 36 C.F.R. § 222.4.
B
[3] The Forest Service may cancel a grazing permit “if the
permittee does not comply with provisions and requirements
in the grazing permit.” 36 C.F.R. § 222.4(a)(4). This authority
does not require the Forest Service to find that the permittee
acted knowingly or willfully—the Forest Service need only
ascertain that Fence Creek violated the terms and conditions
of the grazing permit. Id. The grazing permit issued to Fence
Creek in February 2004 explicitly prohibits the grazing of
livestock other than cattle owned by the permittee on the
allotments encompassed by the permit. In its December 9,
2005, letter, the Forest Service notified Fence Creek that it
was cancelling the Chesnimnus allotment for such a violation:
Fence Creek “allow[ed] livestock not owned by the permittee
to graze on the permitted allotment.” We cannot conclude that
the Forest Service acted arbitrarily or capriciously in doing so.
[4] The Forest Service questioned Fence Creek’s compli-
ance with the terms of its grazing permit because cattle with-
out the appropriate brand were seen on the Chesnimnus
allotment and subsequently moved to another part of Oregon.
That necessarily caused the agency to question who owned
the cattle grazing on its land. When the Forest Service investi-
gated, all the parties involved stated that Wayne Smith and
Monty Siddoway “contributed” the cattle to Fence Creek.
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Additionally, the Forest Service discovered that some of the
improperly branded cattle were also marked with a temporary
Lucky Diamond brand—a hair brand. As a result, the Forest
Service expressly required Fence Creek to produce supporting
documentation “in the way of cancelled checks, bills of sale,
or Oregon State brand inspections showing that Wayne Smith
or Mont[y] Siddoway cattle were purchased by” Fence Creek.
But Fence Creek never produced the requested documentation
and even admitted that no such documentation existed.5 Fur-
thermore, the temporary hair brands on some of the cattle
were not sufficient to prove ownership.
[5] Based on the lack of evidence that Fence Creek actu-
ally owned the cattle observed on the Chesnimnus allotment,
we conclude that substantial evidence supports the Forest Ser-
vice’s factual finding of non-ownership. See Gebhart v. SEC,
595 F.3d 1034, 1043 (9th Cir. 2010) (reviewing an agency’s
factual finding to determine if it was supported by “such rele-
vant evidence as a reasonable mind might accept as adequate
to support a conclusion”). This factual finding enabled the
Forest Service to cancel Fence Creek’s grazing permit for
failing to comply with the terms of the grazing permit. See 36
C.F.R. § 222.4(a)(4). It also provided the requisite “rational
connection between the facts found and the choice made.” See
Ariz. Cattle Growers Ass’n v. U.S. Fish & Wildlife Serv., 273
F.3d 1229, 1236 (9th Cir. 2001); id. at 1238-39 (applying the
standard of review to the issuance of an Incidental Take State-
ment).
C
[6] We uphold the cancellation of the grazing permit cov-
5Fence Creek submitted an undated, unsigned bill of sale for 200 cows
and 10 bulls sold by Wayne Smith to Fence Creek, as well as an undated,
unsigned bill of sale for 175 cows and 10 bulls sold by Monty and Shelly
Siddoway to Fence Creek. These incomplete documents are not adequate
to establish that the intended transaction came to fruition.
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ering the Log Creek allotment for similar reasons. The Forest
Service has the ability to cancel a grazing permit “in the event
the permittee . . . [r]efuses or fails to comply with eligibility
or qualification requirements.” 36 C.F.R. § 222.4(a)(2)(ii).
Fence Creek lost its permission to graze on the Log Creek
allotment because it failed to comply with the basic require-
ments for waiver of the former Lewis/Kudrna grazing permit.
Specifically, Fence Creek did not submit evidence to the For-
est Service showing that it had purchased the 247 head of cat-
tle previously permitted to graze on the Log Creek allotment.
[7] Federal regulations allow the issuance of a new grazing
permit “to the purchaser of a permittee’s permitted livestock
and/or base property, provided the permittee waives his term
permit.” 36 C.F.R. § 222.3(c)(1)(iv). Fence Creek submitted
a waiver for the Log Creek allotment based on the purchase
of the 247 head of Lewis and Kudrna cattle that were previ-
ously permitted on that allotment. But, Fence Creek was
unable to prove that it had actually purchased these cattle. The
only brand inspection certificate Fence Creek produced shows
it bought 600 cattle marked with the Lucky Diamond brand
from Garnet Lewis. The waiver for the Log Creek allotment
shows the 247 head of previously permitted cattle were
instead owned by Geraldine Lewis and Barbara Kudrna.
There is no brand inspection certificate, bill of sale, cancelled
check or receipt to prove the purported purchase actually
occurred. Barbara Kudrna’s affidavit, in which she avers that
Fence Creek purchased the cattle, does not conclusively
establish that Fence Creek complied with the requirements of
obtaining its grazing permit by purchasing the previously per-
mitted livestock. The Forest Service repeatedly informed
Fence Creek that it would need to submit confirming docu-
ments such as bills of sale, brand inspection certificates, or
cancelled checks to establish ownership, but Fence Creek
failed to do so. Thus, the Forest Service’s determination that
Fence Creek did not purchase the cattle is supported by sub-
stantial evidence and provides an adequate basis for the chal-
lenged cancellation. See Ariz. Cattle Growers Ass’n, 273 F.3d
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at 1238-39. The Forest Service’s determination was, there-
fore, neither arbitrary nor capricious.
Fence Creek also asserts that it met the eligibility require-
ments for waiver of the Log Creek allotment because it pur-
chased the base property. However, even if we were to
assume the validity of the incomplete waiver identifying the
purchase of the base property as the reason for the waiver, the
record does not support the statement that Fence Creek
bought the base property. A statutory warranty deed for the
base property of the Log Creek allotment lists Monty and
Shelly Siddoway as the purchasers. The Siddoways did not
submit the waiver or apply for the grazing permit, and they
were never partners in Fence Creek. Therefore, the Forest
Service properly concluded that the Siddoways’ purchase of
the base property does not validate Fence Creek’s grazing
permit. See 36 C.F.R. § 222.3(c)(1)(iv).
Fence Creek applied for the grazing permit because it had
allegedly purchased over 1,500 head of cattle. However, it
could not sufficiently prove any such transaction ever took
place. Consequently, the Forest Service did not act in an arbi-
trary or capricious manner when it cancelled Fence Creek’s
grazing rights for two allotments within the Wallowa-
Whitman National Forest.
IV
[8] Fence Creek challenges the cancellation of parts of its
grazing permit by arguing that the Forest Service violated the
due process requirements set forth in the APA.6 The district
6Fence Creek’s complaint alleges violations of both constitutional and
statutory due process. In its opening brief, however, Fence Creek chal-
lenges only the decision, or lack thereof, regarding the statutory due pro-
cess protections. Because constitutional due process arguments were not
addressed in the opening brief, we do not address that issue here. See
Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir. 2003)
(“[W]e will not consider any claims that were not actually argued in appel-
lant’s opening brief.”).
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court granted summary judgment in favor of the Forest Ser-
vice on this issue, so we review its decision de novo.
Anchustegui, 257 F.3d at 1127. Under the APA, an agency
cannot lawfully suspend or revoke a license unless the
licensee has been given written notice of the facts warranting
the action and an opportunity to demonstrate compliance with
the requirements “before the institution of agency proceed-
ings.” 5 U.S.C. § 558(c).7 We have previously applied these
protections to grazing permits. See Anchustegui, 257 F.3d at
1129.
In Anchustegui, 257 F.3d at 1128-29, we invalidated the
Forest Service’s decision to cancel a grazing permit because
the permittee was violating the terms of the permit. We held
that the Forest Service failed to give the permittee “an oppor-
tunity to achieve compliance or to demonstrate that he had
achieved compliance before the institution of agency proceed-
ings.” Id. at 1129. The Forest Service had not provided ade-
quate notice under § 558 because its initial contact with the
permittee was to issue a show cause letter stating that action
was warranted and that the grazing permit would be cancelled
unless the permittee could show why cancellation was not
appropriate. Id. In essence, the Forest Service had instituted
agency proceedings because it had already determined that the
grazing permit would be cancelled without notifying the per-
mittee that cancellation was warranted or giving the permittee
an opportunity to correct or explain his violations. Id.
Fence Creek’s protestations that similar events occurred in
this case are unavailing in light of the record before us. We
are not convinced that the Forest Service had already decided
to cancel the Chesnimnus and Log Creek allotments before it
contacted Fence Creek about its concerns. The first written
communication from the Forest Service to Fence Creek was
7Section 558 does not apply “in cases of willfulness.” 5 U.S.C. § 558(c).
As explained supra, the Forest Service did not base its decision on a find-
ing of willfulness, making the exception irrelevant to the issue before us.
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sent over five months prior to the cancellation decision. This
letter, written on June 28, 2005, was not a show cause letter.
It set forth the reasons for the Forest Service’s inquiry and
explicitly identified what documents Fence Creek needed to
provide in order to confirm ownership of the cattle and enti-
tlement to the grazing permit. The letter did not state that
Fence Creek’s grazing permit would be cancelled, nor did it
indicate in any other way that agency proceedings had begun.
The letter sent to Fence Creek on September 6, 2005, also
was not a show cause letter. As it explicitly stated, the pur-
pose was to provide Fence Creek “an opportunity to present
full and complete understanding of the existing supporting
evidence and provide additional information, as necessary.”
The letter responded to the documents Fence Creek had sub-
mitted and explained why those documents were inadequate
to show compliance with the terms and conditions of the graz-
ing permit.
[9] Unlike the earlier communication, this letter warned
Fence Creek that its failure to meet the requirements “could
result in the cancellation” of its grazing permit. Nonetheless,
this second communication is still distinguishable from the
letter in Anchustegui, 257 F.3d at 1129. The Forest Service
did not tell Fence Creek in the second letter that its grazing
permit would be cancelled unless it produced certain docu-
ments; such language would indicate that the decision had
already been made. Rather, the Forest Service stated that can-
cellation could occur, illustrating that the Forest Service was
merely investigating, and agency revocation proceedings had
not yet been initiated.
Fence Creek further argues that they were deprived of a
meaningful opportunity to comply with the terms of the graz-
ing permit because the Forest Service did not begin its inquiry
until over a year after the grazing permit was issued. How-
ever, the timing of the Forest Service’s inquiry does not inval-
idate the decision to cancel the Chesnimnus and Log Creek
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allotments. The Forest Service issued the grazing permit
because Fence Creek initially represented that it had fulfilled
the eligibility requirements. The Forest Service began to ques-
tion Fence Creek’s representations only after it began to sus-
pect that something was amiss, i.e., a Forest Service employee
observed cattle with an unauthorized brand grazing on the
Chesnimnus allotment, and then learned that those cattle were
moved to a different part of Oregon. The Forest Service had
no reason to investigate earlier, making earlier notification
infeasible. Had Fence Creek actually fulfilled the require-
ments of obtaining a grazing permit, it would not have been
difficult to provide responsive documents to assuage the For-
est Service’s concern.
[10] We are thus satisfied that the Forest Service fully
complied with the due process requirements of the APA. It
gave notice and fair opportunity to Fence Creek to answer its
concerns. It clearly advised Fence Creek of the facts leading
to the Forest Service’s investigation, and it gave Fence Creek
ample opportunity to show compliance with the terms of the
grazing permit. As required under § 558, all of this prelimi-
nary notification and investigation was done “before the insti-
tution of agency proceedings.” 5 U.S.C. § 558(c). The Forest
Service gave Fence Creek almost six months to show that it
owned either the permitted livestock or the base property sup-
porting transfer of the grazing permits. It could not.
V
[11] The district court properly denied Fence Creek’s
motion to expand the administrative record and correctly
entered summary judgment for the Forest Service. The Forest
Service did not act arbitrarily or capriciously when it cancel-
led the Chesnimnus and Log Creek allotments, and it pro-
vided adequate due process to Fence Creek as required by the
APA.
AFFIRMED.
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