Organic Trade Ass'n v. U.S. Dep't of Agric.
This text of 370 F. Supp. 3d 98 (Organic Trade Ass'n v. U.S. Dep't of Agric.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
ROSEMARY M. COLLYER, United States District Judge
On January 19, 2017, the last day of the administration of former President Barack Obama, the United States Department of Agriculture (USDA) issued the final Organic Livestock and Poultry Practices Rule (Final OLPP Rule), which made more stringent the regulations that govern the certification of livestock as "organic" by USDA. On January 20, 2017, the first day of the administration of President Donald Trump, the White House directed executive agencies to delay implementation of all pending regulations that had not yet become effective, which included the Final OLPP Rule. USDA thereafter issued "Delay Rules" in February, May, and November 2017, each further delaying the effective date of the Final OLPP Rule. Eventually, on March 13, 2018, USDA formally withdrew the Final OLPP Rule.
The Organic Trade Association (OTA) challenged the delays to the effective date of the Final OLPP Rule in September 2017, while the November Delay Rule was open for public comment and not yet finalized. Between then and now, the Complaint has twice been amended and now also includes a challenge to the withdrawal of the rule. The government moves to dismiss the Second Amended Complaint.
*101OTA opposes. Having studied the parties' briefs, the Court finds OTA has standing to sue but will dismiss its challenge to the Delay Rules.
I. BACKGROUND
A. The Organic Food Products Act
Congress enacted the Organic Food Products Act (OFPA) in 1990 "to establish national standards governing the marketing of certain agricultural products as organically produced products"; "to assure consumers that organically produced products meet a consistent standard"; and "to facilitate interstate commerce in fresh and processed food that is organically produced."
a plan of management of an organic farming or handling operation that has been agreed to by the producer or handler and the certifying agent and that includes written plans concerning all aspects of agricultural production or handling described in this chapter including crop rotation and other practices as required under this chapter.
To aid the Secretary in this undertaking, the OFPA required the establishment of "a National Organic Standards Board ... to assist in the development of standards for substances to be used in organic production and to advise the Secretary on any other aspects of the implementation of [the OFPA]."
Although "generally responsible for advising the Secretary on all aspects" of the OFPA, the National Organic Standards *102Board is "[s]pecifically ... responsible for evaluating substances for inclusion on the Proposed National List."
Free access — add to your briefcase to read the full text and ask questions with AI
ROSEMARY M. COLLYER, United States District Judge
On January 19, 2017, the last day of the administration of former President Barack Obama, the United States Department of Agriculture (USDA) issued the final Organic Livestock and Poultry Practices Rule (Final OLPP Rule), which made more stringent the regulations that govern the certification of livestock as "organic" by USDA. On January 20, 2017, the first day of the administration of President Donald Trump, the White House directed executive agencies to delay implementation of all pending regulations that had not yet become effective, which included the Final OLPP Rule. USDA thereafter issued "Delay Rules" in February, May, and November 2017, each further delaying the effective date of the Final OLPP Rule. Eventually, on March 13, 2018, USDA formally withdrew the Final OLPP Rule.
The Organic Trade Association (OTA) challenged the delays to the effective date of the Final OLPP Rule in September 2017, while the November Delay Rule was open for public comment and not yet finalized. Between then and now, the Complaint has twice been amended and now also includes a challenge to the withdrawal of the rule. The government moves to dismiss the Second Amended Complaint.
*101OTA opposes. Having studied the parties' briefs, the Court finds OTA has standing to sue but will dismiss its challenge to the Delay Rules.
I. BACKGROUND
A. The Organic Food Products Act
Congress enacted the Organic Food Products Act (OFPA) in 1990 "to establish national standards governing the marketing of certain agricultural products as organically produced products"; "to assure consumers that organically produced products meet a consistent standard"; and "to facilitate interstate commerce in fresh and processed food that is organically produced."
a plan of management of an organic farming or handling operation that has been agreed to by the producer or handler and the certifying agent and that includes written plans concerning all aspects of agricultural production or handling described in this chapter including crop rotation and other practices as required under this chapter.
To aid the Secretary in this undertaking, the OFPA required the establishment of "a National Organic Standards Board ... to assist in the development of standards for substances to be used in organic production and to advise the Secretary on any other aspects of the implementation of [the OFPA]."
Although "generally responsible for advising the Secretary on all aspects" of the OFPA, the National Organic Standards *102Board is "[s]pecifically ... responsible for evaluating substances for inclusion on the Proposed National List."
With the assistance of the National Organic Standards Board, USDA has promulgated a series of rules regulating the care of organic livestock.2 For example, in 2000 USDA promulgated the National Organic Program Rule (Organic Program Rule),
In April 2016, USDA proposed the OLPP Rule, after it determined that its organic regulations concerning livestock care needed "additional specificity and clarity to better ensure consistent compliance by certified organic operations" and to "better satisfy consumer expectations that organic livestock meet a uniform and verifiable animal welfare standard."
For example, in organic poultry production, outdoor access ranges from extensive pasture to roofed enclosures, i.e. , porches with no access to soil or vegetation. This disparity in amounts of outdoor access has economic implications for producers and lessens consumer confidence in the organic label.
On January 19, 2017, after a decade of internal work and administrative review, including public notice and comment, USDA published the Final OLPP Rule, which addressed "care and production practices, transport, slaughter, and living conditions for organic livestock and poultry."
*103Although the Final OLPP Rule regulated multiple practices, outdoor access for mammals and especially for birds was "a prominent issue."
B. Delay and Withdrawal
On January 20, 2017, Reince Priebus, then-Chief of White House Staff in the newly-inaugurated Trump Administration, issued a moratorium directing departments and agencies in the Executive Branch to, inter alia , postpone for 60 days the effective date of any regulations that had been published in final form in the Federal Register but not yet taken effect, so that the new administration would have an opportunity to "review questions of fact, law, or policy they raise." Mem. for the Heads of Exec. Dep'ts and Agencies (Trump Moratorium),
On February 9, 2017, consistent with the Trump Moratorium and stating that there were "significant policy and legal issues ... that warrant further review," USDA published, without notice or opportunity for public comment, and without input from the National Organic Standards Board, the February Delay Rule delaying the effective date of the Final OLPP Rule from March 20, 2017, until May 19, 2017.
On May 10, 2017, USDA published a May Delay Rule further delaying the effective date of the Final OLPP Rule, this time until November 14, 2017. See
USDA received approximately 47,000 comments on the Proposed November Delay Rule, most in favor of implementation *104of the Final OLPP Rule. On November 14, 2017, USDA finalized the Proposed November Delay Rule and postponed the effective date of the Final OLPP Rule until May 14, 2018.
On December 18, 2017, USDA noticed a 30-day public comment period on a proposed rule to withdraw the Final OLPP Rule.
On March 13, 2018, USDA published a final rule withdrawing the Final OLPP Rule.
C. OTA's Legal Challenges
OTA is a membership-based business association which represents organic product consumers, farmers and livestock growers, ingredient suppliers, processors, manufacturers, retailers, accredited certifying agents, and those in international trade. OTA works generally to promote, develop, and protect organic standards, and worked for many years on behalf of its members specifically on the development of the Final OLPP Rule.
OTA filed suit on September 13, 2017, during the open comment period for the Proposed November Delay Rule, challenging the February and May Delay Rules. Compl. [Dkt. 1]. OTA subsequently amended its complaint after the November Delay Rule was finalized, challenging that rule as well. First Am. Compl. [Dkt. 13]. USDA moved to dismiss. Defs.' Mot. to Dismiss *105[Dkt. 14]. The matter was fully briefed as of March 1, 2018.
Then USDA finalized the OLPP Withdrawal Rule on March 13, 2018, causing OTA to move to amend its complaint again. Req. for Leave to File Second Am. Compl. [Dkt. 34]. With its motion, OTA submitted its Proposed Second Amended Complaint that alleges, in Count I, that the three Delay Rules violated the Administrative Procedure Act (APA); in Count II, that the OLPP Withdrawal Rule violates the APA; and in Count III, that the three Delay Rules and the OLPP Withdrawal Rule violate the OFPA because USDA did not engage in prior consultation with National Organic Standards Board. Proposed Second Am. Compl. (SAC) [Dkt. 34-3].3 The Court granted leave to amend. 10/04/2018 Order [Dkt. 74]. USDA moves to dismiss the entire Complaint for lack of subject-matter jurisdiction and Counts I and III for failure to state a claim.4
II. LEGAL STANDARDS
A. Motion to Dismiss Under Rule 12(b)(1)
Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may move to dismiss a complaint, or any portion thereof, for lack of subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). When a defendant challenges a plaintiff's standing to bring a lawsuit, the defendant's motion is properly understood as a motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1). This is because a "defect of standing is a defect in subject matter jurisdiction." Haase v. Sessions ,
B. Motion to Dismiss Under Rule 12(b)(6)
A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the adequacy of a complaint on its face. Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, a complaint must contain sufficient factual information, accepted as true, to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal ,
III. ANALYSIS
A. Standing
Standing is part and parcel of Article III's limitations on the judicial power of the federal courts, which extends only to cases and controversies. U.S. Const. art. III, § 2 ("The judicial Power shall extend to all Cases, in Law and Equity arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority [and] to Controversies...."); see also Ariz. State Legislature v. Ariz. Indep. Redistricting Comm'n , --- U.S. ----,
An organization can assert standing on its own behalf by demonstrating injury, causality, and redressability in the same way as a traditional plaintiff. See, e.g., Am. Legal Found. v. FCC ,
As to OTA's associational standing claims, the government argues only that the identified members have not themselves suffered a concrete and particularized injury due to the OLPP Withdrawal Rule. OTA counters with several points. It begins with the argument that its members have "competitor standing" because they will face increased competition in the marketplace as a result of the OLPP Withdrawal Rule. The D.C. Circuit has "repeatedly ... held that parties suffer constitutional injury in fact when agencies lift regulatory restrictions on their competitors or otherwise allow increased competition." La. Energy & Power Auth. v. FERC ,
*107OTA's members state that they suffer competitive harm because they must continue to compete against other organic operators which "achieve lower production costs by ignoring the consensus organic ... space requirements, while remaining certified." SAC, Ex. 15, Decl. of Gina Asoudegan (Asoudegan Decl.) [Dkt. 34-15] ¶ 8; see also SAC, Ex. 8, Decl. of John Lee (Lee Decl.) [Dkt. 34-12] ¶ 10. By clarifying and ultimately making more stringent the requirements for organic certification, the Final OLPP Rule would have brought the practices, and thus costs, of other operators who want to participate in the "organic" market in line with those of OTA's members. Asoudegan Decl. ¶ 9; see also RIA at 3 (finding organic egg and broiler producers "will face additional production costs as a result of this rule"). In contrast, the OLPP Withdrawal Rule allows operators to remain in the organic market while using cheaper practices, keeping prices down and generally competing for "organic" sales.
USDA responds that the OLPP Withdrawal Rule "neither enlarged the pool of livestock producers eligible to compete in the organic livestock market nor created any competitive asymmetries; it has merely withdrawn regulatory requirements in a manner that affects all market participants equally." Reply at 12. This effect, the government argues, cannot support standing because the competitor standing doctrine applies only "to an agency action that itself imposes a competitive injury, i.e. , that provides benefits to an existing competitor or expands the number of entrants in the petitioner's market." New World Radio, Inc. v. FCC ,
The government next argues that OTA's competition claim requires "impermissible speculation about the future market choices of third parties." MTD at 28. For example, the government argues that no market exit by competitors is certain. Further, even if competitors exit, consumers may not switch to more expensive organic eggs, even as cheaper eggs lose the organic seal.
As the D.C. Circuit has explained, although there are "various formulations of the standard for determining whether a plaintiff asserting competitor standing has been injured[,] ... the basic requirement is that the complainant show an actual or imminent increase in competition, which increase we recognize will almost certainly *108cause an injury in fact." Sherley v. Sebelius ,
As to whether consumers would continue to buy organic eggs if they rose in price under the Final OLPP Rule: OTA's members only stand to gain since they are already willing to produce and sell organic eggs at current prices. Further, nothing in USDA's analysis hints at consumers' complete abandonment of the organic egg market due to a rise in prices. See RIA at 50 ("Clear standards will also help to maintain consumer demand for organic livestock products.").
OTA also argues that its members must currently pay for additional (private-sector) certification when they want to signal to consumers that their standards for animal welfare go beyond what is required by USDA, but the Final OLPP Rule would have put all organic producers on the same playing field and made such additional certifications unnecessary. See SAC, Ex. 14, Decl. of George Siemon (Siemon Decl.) [Dkt. 34-15] ¶¶ 25-26; Asoudegan Decl. ¶ 9. Because the Final OLPP Rule is being jettisoned, OTA's members will have to continue to pay for additional certifications. Thus, the OLPP Withdrawal Rule injures OTA's members by depriving them of a benefit they would have otherwise received. Cf. Burlington N. & Santa Fe Ry. Co. v. Surface Transp. Bd. ,
The government responds that such certification costs are self-inflicted; nothing requires OTA's members to pay for additional certification now and they could compete at lower standards if they chose. Cf. Grocery Mfrs. Ass'n v. EPA ,
The Court recognizes that, given that several requirements of the Final OLPP Rule would have become effective on a rolling basis, including the broiler space requirements beginning in 2020, there is a question as to whether or not OTA's alleged injury is "imminent."7 As the Supreme Court has instructed, "[a]lthough imminence is concededly a somewhat elastic concept," its ultimate purpose "is to ensure that the alleged injury is not too speculative for Article III purposes-that the injury is certainly impending." Lujan ,
The government does not contend that the competitive and financial interests of OTA's members are not germane to the organization, or that any individual member must participate in this action to secure relief. The Court concludes that the injury to OTA's members is concrete and particularized. Therefore, the Court finds that OTA has associational standing to challenge the OLPP Withdrawal Rule on behalf of its members.
Finally, USDA argues that even if OTA has standing to challenge the OLPP Withdrawal Rule, it did not have standing to challenge the Delay Rules when the Complaint was filed, needed standing at the commencement of the lawsuit to continue with the lawsuit, and cannot now cure this jurisdictional defect with its Second Amended Complaint. See Friends of the Earth ,
B. Failure to State a Claim
1. Challenging the Delay Rules
Count I of OTA's complaint is that USDA violated the APA and Organic Food Products Act (OFPA) by twice delaying the effective date of the Final OLPP Rule without public notice and comment (the February and May Delay Rules), and then again by delaying the effective date by rule with inadequate public notice and comment (the November Delay Rule). The APA requires a federal agency to provide public notice of proposed rulemaking and an opportunity for public comment before promulgating new rules. See
"The mootness doctrine ... limits federal courts to deciding actual, ongoing controversies." Clarke v. United States ,
The November Delay Rule delayed the effective date of the OLPP Rule until May 14, 2018. USDA then finalized the OLPP Withdrawal Rule on March 13, 2018, before the November Delay Rule expired. OTA can receive no remedy if it successfully challenges the Delay Rules but unsuccessfully challenges the OLPP Withdrawal Rule-the Final OLPP Rule will remain withdrawn. Conversely, if OTA successfully challenges the OLPP Withdrawal Rule, there would still be no effective remedy vis-à-vis the November Delay Rule (or any earlier Delay Rule) as it is now well past May 14, 2018, and all the Delay Rules have expired.
*112Normally, a claim would be moot under these circumstances. OTA seeks to avoid this conclusion by arguing that the Delay Rules are "capable of repetition, yet evading review," and so its challenge to the practice is exempt from the mootness doctrine. Kingdomware Techs., Inc. v. United States , --- U.S. ----,
OTA identifies four legal wrongs which may recur. First, it argues that rules effecting short-term delays-as a general matter, not specific to the Final OLPP Rule-are by their nature of short duration and thus evade review. While accurate, the Final OLPP Rule cannot be delayed again because it has been withdrawn. OTA's responds "that no 'precedent requires that the very same facts must recur for the capable of repetition exception to apply.' " Opp'n at 32 (citing Del Monte Fresh Produce Co. v. United States ,
OTA's second identified legal wrong is that an opportunity to comment on a rule after the effective date is no substitute for an opportunity to comment before. Opp'n at 33 (citing Am. Fed'n of Gov't Emps., AFL-CIO v. Block ,
Third, USDA determined as part of the November Delay Rule that it was not required to consult with the National Organic Standards Board and so did not consult with the Board. OTA argues that this failure to consult violated the OFPA and APA, and that OTA has a legitimate basis to fear that USDA will violate the OFPA and APA in future rulemaking. For present purposes, OTA's argument is overly speculative; USDA could consult with the Board in the future as Congress intended. More importantly, USDA's statement about consultation with the Board also appeared in the OLPP Withdrawal Rule. OLPP Withdrawal Rule,
Fourth, OTA argues that USDA improperly relied on the Trump Moratorium to justify the February Delay Rule and that the Court should issue a "clarifying ruling" that any such delays require notice and comment rulemaking beyond presidential proclamation. Opp'n at 35. The concept of regulatory moratoria is relatively recent. See Kathryn A. Watts, Regulatory Moratoria,
Such directions from incoming Presidents are quintessential exercises of Executive authority into which the federal courts are loath to explore. More importantly, the legal issue is how the executive agencies respond to a presidential moratorium in light of the APA. At present, it is overly speculative to predict how executive agencies might respond to a hypothetical future moratorium, since it is unclear if (1) a new administration will take office in 2021; (2) a new administration, much less a new administration of the same party, would issue a regulatory moratorium; (3) that moratorium would apply to already published rules; and (4) any such rule would affect OTA or its members. OTA has not shown a reasonable expectation or demonstrated probability that each of the above will come to pass; there is insufficient evidence in the record to justify an exception to the mootness doctrine.
The Court concludes that OTA's complaint against the Delay Rules is moot and no longer presents an Article III case or controversy. The likelihood of repetition is too speculative to render it a current controversy. Count I in the Second Amended Complaint will be dismissed.
2. Challenging the Withdrawal Rule
Count II of OTA's Second Amended Complaint alleges that the OLPP Withdrawal Rule is arbitrary and capricious *114because it lacks sufficient reason or explanation for reversing course. The government wisely does not argue that OTA has failed to allege a legally sufficient claim against the OLPP Withdrawal Rule. Count II will move forward.
3. Failure to Consult the NOSB
Count III of the Second Amended Complaint alleges that USDA violated the OFPA by failing to consult with the National Organic Standards Board when it considered and finalized the OLPP Withdrawal Rule. Following congressional direction in § 6518 of the OFPA, the Secretary established the Board "to assist in the development of standards for substances to be used in organic production and to advise the Secretary on any other aspects of the implementation of this chapter."
"Where Congress uses certain language in one part of a statute and different language in another, it is generally presumed that Congress acts intentionally." Nat'l Fed'n of Indep. Bus. v. Sebelius ,
The language in §§ 6517 and 6506 shows that Congress clearly knew how to compel consultation and involve the Board more closely in the promulgation of regulations. That said, § 6509 does not give the Board the same degree of input into livestock standards as it does for National List exemptions and prohibitions under § 6517. It does not even go as far as § 6506(c), on wild seafood, which specifically requires USDA to consult with the Board, instead of requiring the Board to make recommendations to USDA. Thus, the Court cannot find a blanket requirement for USDA to consult with the Board on livestock regulations because it would make those more *115specific statutory provisions superfluous. Cf. Davis Cnty. Solid Waste Mgmt. v. EPA ,
That said, even if there is no blanket requirement for USDA to consult with the Board whenever it promulgates new rules affecting the organic certification program, the Court cannot decide on this briefing whether USDA was nonetheless required to consult with the Board before promulgating the OLPP Withdrawal Rule. It may be that specific requirements to consult ensure that rules affecting those specific issues, no matter how small, are always run past the Board. It may also be that the specific requirements to consult are not surplusage because not all small acts of rulemaking affecting the certification program require prior input from the Board. But it is also clear from the Senate Report that Congress intended the National Organic Standards Board to play a key role in developing the organic certification program. To restate the language: "The Committee regards this Board as an essential advisor to the Secretary on all issues concerning [the OFPA] and anticipates that many of the key decisions concerning standards will result from recommendations by this Board." Senate Report at 296; see also id. at 297 ("The Board is generally responsible for advising the Secretary on all aspects of the implementation of [the OFPA]."). Additionally, § 6503requires the Secretary to consult with the Board when developing the organic certification program. The Final OLPP Rule was the largest and most important organic rule promulgated since the 2010 Access to Pasture Rule and USDA consulted over its development with the Board. As such, notwithstanding the uncertain consultation requirement for small rulemaking, § 6503 may have required USDA to consult on a timely basis with the National Organic Standards Board before finalizing the OLPP Withdrawal Rule, which is similarly large and important.11
The Court will not decide this issue on the current briefing. Accordingly, Count III will not be dismissed.
IV. CONCLUSION
The government's Motion to Dismiss Second Amended Complaint, Dkt. 43, will be granted in part and denied in part. A memorializing Order accompanies this Memorandum Opinion.
Related
Cite This Page — Counsel Stack
370 F. Supp. 3d 98, Counsel Stack Legal Research, https://law.counselstack.com/opinion/organic-trade-assn-v-us-dept-of-agric-cadc-2019.