Ohio Supreme Court rejects challenge to CAUV table
We learn early in law school that it’s an uphill battle when challenging agency actions in court, as the law typically grants agencies discretion to apply expertise and professional judgment when making decisions. A landowner in Clark County just learned this lesson. The landowner appealed the Ohio tax commissioner’s adoption of the 2016 Current Agricultural Use Valuation (CAUV) table, but the Ohio Supreme Court found no showing of an abuse of discretion by the agency.
The case arose from the CAUV valuation update in 2016 of William Johnson’s land in Clark County. In setting the CAUV values, the county auditor consulted the unit-value table adopted by the tax commissioner. The unit-value table lists soil types and ratings of each soil type along with per-acre values for each soil type. The tax commissioner annually adopts the table using a potential-income approach, as required by Ohio law, which determines typical net income from agricultural products for each type of soil, assuming typical management, yields, and cropping and land use patterns. A county auditor refers to the unit-value table when determining CAUV farmland values, applying the per-acre values from the table to the soil types on a parcel.
Johnson claimed that his CAUV value was too high because the 2016 unit-value table adopted by the tax commissioner did not list separate values for drained and undrained soils on his land. The table does list differing values for Adrian, Carlisle and Linwood soils—one value for drained soils and one value for undrained soils. However, the table lists just one value for all Crosby, Kokomo, and Patton soil types, the soils contained on the Johnson’s parcel. Johnson argued that the tax commissioner erred by adopting the unit-value table without establishing separate values for drained and undrained Crosby, Kokomo, and Patton soil types.
The Supreme Court explained that Johnson’s challenge required showing that the tax commissioner committed an “abuse of discretion” in adopting the unit-value table. Two important principles apply to the “abuse of discretion” standard, the first being that the court will not substitute its judgment for the agency’s judgment unless the agency acted with an unreasonable, arbitrary, or unconscionable attitude. The court also presumes that an agency’s decision is carried out in good faith and with sound judgment, unless there is proof to the contrary.
According to Johnson, the tax commissioner abused his discretion in several ways: by departing from the USDA’s taxonomy of soils, excluding data for land lacking artificial drainage, and not listing all soils with drained and undrained variations. The court found no abuse of discretion, however, and no evidence to support the Johnson’s claims. The court pointed out that the commissioner, as required by law, consulted with the “agricultural advisory committee” in preparing the table and referred to both Ohio State University’s Bulletin 685 and updates to the USDA taxonomy for guidance on soil types. Explaining that the CAUV potential-income approach required the commissioner to determine “typical” management practices, the court stated that the commissioner was justified in not establishing a separate value for the Johnson’s “atypical practice” of not installing artificial drainage for the specific soils on his property. Considering investments required for artificial drainage for some soil types but not for others doesn’t prove an abuse of discretion, the court stated.
The court’s conclusion reiterates the lesson on the difficulty of challenging an agency decision:
“To repeat: the differential treatment of soil types reflects the exercise of judgment by the commissioner, which we presume to be sound. . . The record does not disclose the rationale for every consideration underlying the unit-value table, but it was not the commissioner’s burden to demonstrate the reasonableness of the CAUV journal entry—it was Johnson’s burden to show an arbitrary or unconscionable attitude on the part of the commissioner. He has not done so.”