                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 05-1547
                                   ___________

Steven E. Clason,                       *
                                        *
             Appellant,                 *
                                        * Appeal from the United States
      v.                                * District Court for the
                                        * District of Nebraska.
                                        *
Mike Johanns, in his official capacity *
as Secretary, United States Department *
of Agriculture and Chairman of the      *
Board of Directors of the Commodity *
Credit Corporation,                     *
                                        *
             Appellee.                  *
                                   ___________

                             Submitted: November 16, 2005
                                Filed: February 22, 2006
                                 ___________

Before ARNOLD, BEAM, and RILEY, Circuit Judges.
                           ___________


ARNOLD, Circuit Judge.

      Steven Clason appeals a judgment affirming a decision by the National Appeals
Division (NAD) of the Department of Agriculture that he owed the federal
government $9,703.62 plus interest for the unpaid balance of a marketing assistance
loan. The dispute centers on whether Mr. Clason was entitled to repay the loan at an
advantageous rate when he sold, but did not physically deliver, the corn securing the
loan. The local office of the Farm Service Agency (FSA) (an agency of the
Agriculture Department) determined that in order to repay the loan at the lower
amount, Mr. Clason was required to make physical delivery of the corn to the buyer.
After exhausting his administrative appeals, Mr. Clason sought review in the district
court,1 which affirmed the agency's decision. Mr. Clason appealed that decision to
this court, and we affirm.

                                         I.
       In October, 1998, Mr. Clason accepted a marketing assistance loan for over
$66,000 from the Commodity Credit Corporation (CCC), a federal corporation within
the Department of Agriculture. As required by the loan's terms, Mr. Clason gave the
CCC a security interest in 36,000 bushels of corn valued at $1.86 per bushel. He
agreed not to move the corn from where it was stored on his property or to co-mingle
it with other corn without the CCC's approval.

        Under the terms of the loan, the interest rate was set at 5.875% and payment
was due in July, 1999. The loan program, however, allowed farmers to discharge a
marketing assistance loan at a reduced rate if the price of corn dropped during the term
of the loan. 7 C.F.R. § 1421.25(b), (c) (1998). Several weeks before the loan was
due, Mr. Clason sought approval from the local FSA office, which administers CCC
loans, to sell and deliver more than 30,000 bushels of the corn to his brother. To
obtain approval from the FSA, Mr. Clason executed a standardized form, CCC-681-1,
titled "Authorization for Delivery of Loan Collateral For Sale." The authorization
form provided a repayment rate of $1.49 per bushel "for any quantity delivered on or
before" July 26, 1999. Another provision of the form stated that the CCC's security
interest would be released "only if the CCC receives payment at the [Furnas County
FSA Office] for the quantity of commodity delivered to the buyer."

      1
        The Honorable David L. Piester, United States Magistrate Judge for the
District of Nebraska, sitting by consent of the parties. See 28 U.S.C. 636(c); see also
Fed. R. Civ. P. 73.

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       In August, Mr. Clason notified the Furnas County FSA office that, although he
had sold the bulk of his corn to his brother, only 8,573 bushels of corn had been
transferred from his storage bins to his brother's operation. The rest of the corn
remained in his possession. Mr. Clason nonetheless contended that because that corn
now belonged to his brother, it had been "delivered" and he was entitled to the lower
repayment rate. In addition, Mr. Clason maintained that he had spoken with an FSA
employee prior to the July 26 deadline, and that the employee had assured him that
physical delivery was not necessary.

       Upon learning that Mr. Clason had not made physical delivery of all of the corn
that he had sold to his brother, the FSA determined that Mr. Clason owed the full
repayment amount of $1.935 per bushel for the corn that remained in his possession.
After accepting as partial payment the checks that Mr. Clason tendered, the FSA
calculated an outstanding balance due of $9,703.62.

       Pursuant to Agriculture Department procedure, Mr. Clason appealed the
deficiency notice to the FSA county committee, which determined that Mr. Clason's
failure to make physical delivery of the corn disqualified him from repaying the lower
rate. Mr. Clason then unsuccessfully appealed to the FSA state committee and to the
NAD, the latter of which held an evidentiary hearing. The NAD hearing officer
concluded that physical delivery was required to qualify for the lower rate, and the
NAD National Director upheld that decision. His administrative appeals exhausted,
Mr. Clason sought review in the district court. The magistrate judge determined that
the administrative decision was not arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with the law and therefore affirmed the agency
determination.

                                     II.
    Mr. Clason contends that the meaning of the term "delivery," as used on the
CCC-681-1 form, is not confined to physical delivery. Neither the form nor the

                                         -3-
regulations governing marketing assistance loans provide a definition of "delivery."
Our task is not to interpret the contract independently, but instead to determine
whether the NAD's interpretation was "arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law," and should be set aside pursuant to the
provisions of the Administrative Procedure Act. 5 U.S.C. § 706(2)(A).

        Because we are reviewing an agency's interpretation of a term in a document
that it created, we must first determine the level of deference to give to the NAD's
construction of that term. See Rain & Hail Ins. Serv., Inc. v. Federal Crop Ins. Corp.,
426 F.3d 976, 979 (8th Cir. 2005). In this case, the interpretation at issue involves the
language on the CCC-681-1 form. The regulations governing the marketing
assistance loans authorized the CCC to set the terms and conditions of the CCC-681-1
form. See 7 C.F.R. § 1421.20(a) (1998). The terms of CCC-681-1 involve complex
matters within the Department of Agriculture's area of expertise, namely, the
repayment terms of subsidized agricultural commodity loans. We also note that the
NAD's appeal process, which provided Mr. Clason with a face-to-face hearing, see
7 U.S.C. § 6991-7002, qualifies as formal adjudication. Lane v. United States Dep't
of Agriculture, 120 F.3d 106, 108-110 (8th Cir. 1997). Because of the NAD's
expertise and the extensive administrative review afforded to Mr. Clason, we will
afford the NAD's interpretation the same level of deference afforded to an agency's
interpretation of its own regulations. See Rain & Hail Ins., 426 F.3d at 979 (citing
Martin v. Occupational Safety & Health Rev. Comm'n, 499 U.S. 144, 151 (1991)).
This deferential approach requires us to accept the NAD's interpretation of the term
"delivery" unless that interpretation is "plainly erroneous." Rain & Hail Ins., 426 F.3d
at 979 (citing Auer v. Robbins, 519 U.S. 452, 461 (1997)).

       In this case, the NAD determined that the "delivery" required by CCC-681-1
was physical delivery. This was not plainly erroneous. The regulations governing
these transactions during the relevant time period referred to the "removal of" and
"moving" of farm-stored commodities. See 7 C.F.R §§ 1421.20(a), (e); 1421.23(b)

                                          -4-
(1998). By requiring producers who wish to take advantage of the favorable
repayment rate to make physical delivery to the buyer, the Agriculture Department
rationally may have believed that it was promoting the actual use of commodities. In
any case, although the word "delivery" can be interpreted to include constructive
delivery, see, e.g., Black's Law Dictionary (8th ed. 2004), the NAD's interpretation is
reasonable and consistent with the regulations governing marketing assistance loans.

       Mr. Clason contends that the agency has changed its definition of the word
"delivery" and therefore the NAD's interpretation deserves no weight. Although an
inconsistent agency interpretation is less authoritative than a consistent one, INS v.
Cardoza-Fonseca, 480 U.S. 421, 446 n.30 (1987), Mr. Clason has not identified any
previous administrative or judicial decision that establishes a contrary government
interpretation. Instead he points to a statement in the record from an Agriculture
Department official that "the FSA currently, and for the past several years, has
interpreted and defined 'delivery' as the movement to a purchaser of a commodity
under loan" to the CCC. Mr. Clason contends that this language necessarily leads to
the conclusion that the FSA used a different definition of the term at some previous
time. We disagree. The language quoted above, by itself, is insufficient to support
Mr. Clason's inference that the FSA has used more than one definition of the term
"delivery."

                                          III.
       In the alternative, Mr. Clason argues that the government is estopped from
requiring physical delivery because of his reliance upon assurances that he allegedly
received from a county FSA officer. The FSA officer stated at the hearing that she did
not recall telling Mr. Clason that constructive delivery was acceptable. Even if she
had made such statements, however, they would not be sufficient to support the
application of estoppel against the federal government. Any claim of equitable
estoppel against the government would require proof "that the government committed
affirmative misconduct." Charleston Housing Auth. v. U.S. Dep't of Agric., 419 F.3d

                                         -5-
729, 739 (8th Cir. 2005). The record here does not contain any evidence of
affirmative misconduct. At most, the FSA officer's comments were the product of
negligence, which is insufficient to satisfy Mr. Clason's heavy burden of proof. See
Morgan v. C.I.R., 345 F.3d 563, 566-67 (8th Cir. 2003).

                                          IV.
      For the reasons stated above, the judgment of the district court is affirmed.
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