Pratum Farm, LLC v. United States Department of Agriculture

CourtDistrict Court, D. Oregon
DecidedSeptember 30, 2024
Docket6:23-cv-01525
StatusUnknown

This text of Pratum Farm, LLC v. United States Department of Agriculture (Pratum Farm, LLC v. United States Department of Agriculture) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pratum Farm, LLC v. United States Department of Agriculture, (D. Or. 2024).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

EUGENE DIVISION

PRATUM FARM, LLC, Civ. No. 6:23-cv-01525-AA Plaintiff, OPINION AND ORDER

v.

UNITED STATES DEPARTMENT OF AGRICULTURE, Defendant.

________________________________________ AIKEN, District Judge:

Plaintiff, a small Oregon farm producing organic hazelnuts, sues under the Administrative Procedure Act challenging in part a final rule of Defendant United States Department of Agriculture (“USDA”). Plaintiff asserts injury based on the USDA’s organic certification program that allows, in large part, mostly foreign farms to have their products marketed with the USDA certified organic seal without undergoing the yearly, on-site inspection by an accredited certifier as Congress required. Before the Court are the parties’ motions for summary judgment. The Court cannot reach the merits of Plaintiff’s claim because Plaintiff lacks standing. On those grounds, Plaintiff’s Motion for Summary Judgment, ECF No. 12, is

DENIED. Defendant’s Cross-Motion for Summary Judgment, ECF No. 20 is GRANTED. BACKGROUND I. Historical Background and Rising Demand for Organic Products Congress enacted the Organic Foods Production Act (“OFPA” or the “Act”) in 1990 to “establish national standards governing the marketing” of organically produced agricultural products, to “assure consumers that organically produced

products meet a consistent standard[.]” 7 U.S.C. § 6501. The standards for organic production are prescribed by the statute, see id. § 6501 et seq., and further delineated in USDA’s implementing regulations, see 7 C.F.R. §§ 205.200-205.290. To ensure that producers comply with national standards, the statute charges the Secretary of Agriculture with establishing a program to certify “producers and handlers” that meet federal requirements. 7 U.S.C. § 6503(a). Consistent with that

mandate, the USDA established the National Organic Program through rulemaking (“Program”). See National Organic Program, 65 Fed. Reg. 80,548 (Dec. 21, 2000). The organic certification process is not performed by the USDA itself, but rather by “certifying agents,” which are third parties accredited by the USDA. Id. §§ 6502(3), 6503(d), 6514-6515. Certifying agents may be either a governing State official or a private person. Id. § 6514. In the last two decades, both demand for and sales of organic products have skyrocketed. AR 8019. Total sales of organic products in the United States reached more than $63 billon in 2021. Id. The number of businesses producing, handling,

marketing, and selling organic products have also grown to meet consumer demand. Id. Rapid growth—and the financial benefit that comes with marketing products as “organic”—has drawn interested businesses to seek use of the USDA organic label. Id. The USDA has stated that “high demand for organic products, the absence of direct enforcement over some entities in the organic supply chain, and organic price premiums increase the opportunity and incentive for organic fraud (when nonorganic

products are deceptively represented as organic).” AR 8020. When earlier organic regulations were published in the year 2000, organic products were marketed mostly locally or regionally, and supply chains tended to be short and transparent; for example, farm to wholesale to retail to consumer. Id. Demand and sales have grown considerably since then. Id. This significant market growth has attracted more producers, handlers, product suppliers, importers, brokers, distributors, and other

businesses to the organic market. Id. Partly in response to the growing risk of fraud to organic integrity, regulatory policy further developed, and enforcement improved. The USDA documented thousands of agricultural operations that had profited millions of dollars from the sale of products granted the USDA certified organic seal, but which, on investigation were found noncompliant with the USDA organic standard. AR 8020-21. In some instances, the USDA offered recertification to those operations if they could be proven to meet USDA organic standards through the USDA accredited certifiers (rather than other international certifier entities). AR 8020. The USDA

found that, in some cases, even when operations had been marketing their products as USDA certified organic for years, an accredited certifier could not certify according to USDA standards, despite the operations’ best efforts. Id. After such investigations, the USDA provided examples of sharp drops in foreign import of certified organic products, which the USDA noted “demonstrates both the magnitude of potential fraud in the market,” and how more effective oversight, such as “certification only by USDA-accredited certifying agents” can successfully safeguard

the integrity of the USDA organic label. Id. II. Statutory Text The statute authorizing the USDA to establish the Program for organic certification sets up requirements for on-site inspections for farms certified “organic.” 7 U.S.C. § 6506(a)(5) (the “inspection statute”). Under the inspection statute, congress required that a Program established under the OFPA shall:

provide for annual on-site inspection by the certifying agent of each farm and handling operation that has been certified under this chapter.

7 U.S.C. § 6506(a)(5) (emphasis added).

The OFPA defines “certifying agent” as “any person (including private entities) who is accredited by the Secretary as a certifying agent for the purpose of certifying a farm or handling operation as a certified organic farm or handling operation in accordance with this chapter.” 7 U.S.C. § 6502(3). Under the Act, a person may only sell or label a domestic agricultural product

as organically produced if it has been produced or handled in accordance with the OFPA. Id. § 6505. However, these requirements do not apply to “small farmers” which the Act defines as “persons who sell no more than $5,000 annually in value of agricultural products.” Id. § 6505(d). Additionally, imported agricultural products may be sold or labeled as organically produced if the Secretary determines that such products have been produced or handled under an organic certification program that “provides safeguards and guidelines” that are “at least equivalent to the

requirements” of the OFPA. Id. § 6505(b). III. Producer Groups (or Grower Groups) Important here is background on Producer Group Operations (historically known as “grower groups”). AR 8062; Amicus Brief at 9, ECF No. 22-1. “Grower group” is a term of art, meaning a group of farmers or producers in a certain location organized under one management system. 88 Fed. Reg. at 3,593 (“Final Rule”); see

also Amicus Br. at 9. First introduced in the 1980s, before existing USDA regulations, the grower group model was used by small organic farming associations and certification bodies to certify as organic products grown by small farmers in low‐income countries. Id. Under the grower group system, the group itself is certified, not the individual members (farms/farmers). By working collectively as a group, the small farmers could overcome the financial and administrative barriers to individual organic certification and access international markets.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Skidmore v. Swift & Co.
323 U.S. 134 (Supreme Court, 1944)
Heckler v. Chaney
470 U.S. 821 (Supreme Court, 1985)
Lujan v. Defenders of Wildlife
504 U.S. 555 (Supreme Court, 1992)
Bennett v. Spear
520 U.S. 154 (Supreme Court, 1997)
KERM, Inc. v. Federal Communications Commission
353 F.3d 57 (D.C. Circuit, 2004)
Already, LLC v. Nike, Inc.
133 S. Ct. 721 (Supreme Court, 2013)
Lexmark Int'l, Inc. v. Static Control Components, Inc.
134 S. Ct. 1377 (Supreme Court, 2014)
TransUnion LLC v. Ramirez
594 U.S. 413 (Supreme Court, 2021)
City of Los Angeles v. Faa
63 F.4th 835 (Ninth Circuit, 2023)

Cite This Page — Counsel Stack

Bluebook (online)
Pratum Farm, LLC v. United States Department of Agriculture, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pratum-farm-llc-v-united-states-department-of-agriculture-ord-2024.