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US Citrus Science Council v. United States Department of Agriculture

United States District Court, E.D. California

February 27, 2018

THE UNITED STATES DEPARTMENT OF AGRICULTURE; SONNY PERDUE, Secretary of Agriculture; and KEVIN SHEA, Administrator, Animal and Plant Health Inspection Service, Defendants.




         Plaintiffs U.S. Citrus Science Council, Santa Paula Creek Ranch, CPR Farms, Green Leaf Farms, Inc., Bravante Produce, and Richard Bagdasarian, Inc. (collectively, “Plaintiffs”) bring this action against Defendants United States Department of Agriculture (“USDA”), Sonny Perdue, Secretary of Agriculture, and Kevin Shea, Administrator, Animal and Plant Health Inspection Service (“APHIS”) (collectively, “Defendants” or the “Government”), to challenge a rule lifting the ban on lemons imported from Argentina (the “Rule” or “Final Rule”). Both parties move for summary judgment. This matter is suitable for disposition without oral argument. See Local Rule 230(g). For the reasons set forth below, Plaintiffs' motion for summary judgment is DENIED, and Defendants' cross-motion for summary judgment is GRANTED.


         A. Statutory Framework

         1. Plant Protection Act

         The Plant Protection Act (“PPA”) authorizes the Secretary of the USDA to issue regulations “to prevent the introduction of plant pests into the United States or the dissemination of plant pests within the United States.” 7 U.S.C. § 7711(a). The Secretary delegated that authority to the Animal and Plant Health Inspection Service (“APHIS”), an agency within USDA. 7 C.F.R. §§ 2.22(a), 280(a)(36). Pursuant to the PPA, APHIS has issued a number of regulations regarding the conditions under which fruits and vegetables can be imported into the United States.

         2. Regulatory Flexibility Act

         The Regulatory Flexibility Act (“RFA”) requires that agencies issuing rules under the Administrative Procedure Act (“APA”) publish a final regulatory flexibility analysis assessing the negative impact of the rule on small businesses. 5 U.S.C. §§ 603, 604. However, the agency does not need to engage in flexibility analysis if the agency head certifies that the rule will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. § 605(b).

         Such an analysis must meet certain statutory requirements. It must state the purpose of the relevant rule and the estimated number of small businesses that the rule will affect, if such an estimate is available. In addition, each analysis must summarize comments filed in response to the agency's initial regulatory flexibility analysis, along with the agency's assessment of those comments. Finally, each analysis must include “a description of the steps the agency has taken to minimize the significant economic impact” that its rule will have on small businesses, “including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.” § 604(a)(5).

         B. Regulatory History

         Since 1947, regulations under the PPA and its predecessor statutes have barred the importation of lemons and other citrus from Argentina. See 7 C.F.R. § 319.28(a)(1)-(3) (2015). In 2000, APHIS promulgated a rule lifting the ban on importing lemons from Argentina, but the regulation was vacated in 2001 because this Court concluded that APHIS relied on faulty assumptions in completing its pest risk assessment. See Harlan Land Co. v. U.S. Dep't of Ag., 186 F.Supp.2d 1076 (E.D. Cal. 2001).

         In May 2016, APHIS proposed a new regulation permitting the importation of lemons from northwest Argentina. Importation of Lemons from Northwest Argentina, 81 Fed. Reg. 28, 758 (May 10, 2016) (“Proposed Rule”). The Proposed Rule acknowledged the presence of certain pests affecting citrus crops in Argentina, but posited that the risk of pests could be effectively mitigated by the use of a “systems approach.” Id. The “systems approach” outlined procedures intended to ensure the safety of imported lemons, including the responsibilities of the Argentine government's inspection agency (“SENASA”), preventative measures required by Argentine growers, mitigation measures required by Argentine lemon packinghouses, and APHIS's role in overseeing and inspecting imported lemons. Id. at 28, 759-28, 761.

         The Proposed Rule was accompanied by an initial regulatory flexibility analysis. Id. at 28, 762-28763. The analysis estimated that between 15, 000 and 20, 000 metric tons of fresh lemons would be imported from Argentina annually, causing the price of fresh lemons to drop between 2% and 4%. Id. at 28, 762. It predicted a corresponding loss to California and Arizona lemon growers between $10.9 and $22 million each year. Id. at 28, 762. The analysis concluded that the “[e]conomic effects of the rule for both producers and consumers are not expected to be significant.” Id.

         After a period of notice and comment, APHIS published its Final Rule governing the importation of Argentine Lemons. Importation of Lemons From Northwest Argentina, 81 Fed. Reg. 94, 217 (Dec. 23, 2016) (codified at 7 C.F.R. § 319.56-76) (“Final Rule”). In the Final Rule, APHIS concluded that it would allow the importation of fresh lemons from northwest Argentina, subject to conditions and requirements articulated in the Final Rule. Id. The Final Rule was scheduled to go into effect on January 23, 2017, but was postponed until May 26, 2017. See Importation of Lemons From Northwest Argentina: Stay of Regulations, 82 Fed. Reg. 8353 (Jan. 25, 2017); Importation of Lemons From Northwest Argentina: Stay of Regulations, 82 Fed. Reg. 14, 987 (Mar. 24, 2017). On May 1, 2017, USDA issued a Stakeholder Announcement indicating that the previously issued Final Rule would go into effect on May 26, 2017, and announcing that “[f]or 2017 and 2018, Argentine lemons would be imported only into the northeastern United States.” See USDA, APHIS Will Not Extend Stay on Import Regulations for Lemons from Northwest Argentina (May 1, 2017), available at On August 17, 2017, representatives from APHIS, SENASA, and the Argentine lemon industry signed the final operational workplan, which set forth additional details and procedures for implementing the day-to-day operations of the Rule. See Administrative Record (“AR”) 28340.[1] The Rule is now effective, see 7 C.F.R. § 319.56-76, although Plaintiffs indicate that imports will begin “in full” in March 2018, ECF No. 40 at 1-2.

         C. Procedural Background

         Plaintiffs filed the instant lawsuit on May 17, 2017, challenging the Final Rule and the Amendment promulgated by APHIS under the PPA, APA, National Environmental Policy Act (“NEPA”), and RFA. (ECF No. 2.) Plaintiffs brought six counts in the First Amended Complaint: failure to disclose for public comment data, notes, or a trip report for the 2015 harvest season site visit under the PPA and APA (Count I); failure to consider properly SENASA's failed history, and unjustified reliance on SENASA workplan under the PPA and APA (Count II); failure to use notice and comment procedures to amend, and failure to provide reasoned decision-making in amending, the rule to restrict importation to northeastern ports under the PPA and APA (Count III); failure to provide reasoned decision-making under the APA (Count IV); failure to comply with NEPA (Count V); and failure to comply with the RFA (Count VI). Defendants previously moved to dismiss the FAC on the basis that Plaintiffs lacked standing. The Court dismissed Count III, but concluded that Plaintiffs had standing to pursue Counts I, II, IV, V, and VI. ECF No. 36 (“October 25 Order”). Both parties now move for summary judgment on all remaining claims. (ECF Nos. 35, 37.)

         This Court has federal question jurisdiction pursuant to 28 U.S.C. §§ 1331, 1361, and 2201-2202, as well as the APA, 5 U.S.C. §§ 701-706, and the RFA, 5 U.S.C. § 611. Venue is proper in this Court and the matter is ripe for review.


         A. Summary Judgment

         The remedy for challenging an agency's decision not to authorize testimony is a separate action in federal court pursuant to the APA. See In re Boeh, 25 F.3d 761, 764 n.3 (9th Cir. 1994). In an action brought pursuant to the APA, a reviewing court may “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). “It is well established that once an agency has taken final agency action under the APA, a reviewing court analyzes that decision under the ‘arbitrary and capricious' standard of review.” Mt. St. Helens Mining & Recovery Ltd. P'ship v. United States, 384 F.3d 721, 727 (9th Cir. 2004) (citations omitted).

         “Under the arbitrary and capricious standard, a reviewing court must determine whether an agency's decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Mt. St. Helens, 384 F.3d at 728 (citation omitted). “This standard is narrow and [a reviewing court] may not substitute [its] judgment for that of the agency. Applying the arbitrary and capricious standard, [the] court must determine whether the agency articulated a rational connection between the facts and the choice made.” Id. (citations omitted). “This standard of review is highly deferential, presuming the agency action to be valid and affirming the agency action if a reasonable basis exists for its decision.” Ranchers Cattlemen Action Legal Fund v. U.S. Dep't of Agric., 499 F.3d 1108, 1115 (9th Cir. 2007) (quotations omitted). “In its paradigmatic statement of this standard, the Supreme Court explained that an agency violates the APA if it has ‘relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.'” Id. (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

         “Unlike substantive challenges, however, . . . . review of an agency's procedural compliance is exacting, yet limited.” Kern Cty. Farm Bureau v. Allen, 450 F.3d 1072, 1076 (9th Cir. 2006). The reviewing court determines “the adequacy of the agency's notice and comment procedure, without deferring to an agency's own opinion of the . . . opportunities it provided.” Natural Res. Def. Council v. EPA, 279 F.3d 1180, 1186 (9th Cir. 2002).

         Under the APA, the district court's review of an agency's decision is usually limited to the administrative record. 5 U.S.C. § 706; see also Cnty. of Los Angeles v. Shalala, 192 F.3d 1005, 1011 (D.C. Cir. 1999) (when reviewing final agency action, the district court is not managing a “garden variety civil suit, ” but rather “sits as an appellate tribunal”). Therefore the usual “genuine dispute of material fact” standard for summary judgment normally does not apply in an APA case. San Joaquin River Group Auth. v. Nat'l Marine Fisheries Serv., 819 F.Supp.2d 1077, 1083-84 (E.D. Cal. 2011). Put another way, in the context of reviewing an administrative decision under the APA, there are normally no “disputed facts that the district court must resolve.” Occidental Eng'g Co. v. I.N.S., 753 F.2d 766, 769 (9th Cir. 1985). “[T]he function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.” Id.; see also City & Cnty. of San Francisco v. United States, 130 F.3d 873, 877 (9th Cir. 1997). “[S]ummary judgment is an appropriate mechanism for deciding the legal question of whether the agency could reasonably have found the facts as it did.” Occidental, 753 F.2d at 770. Summary judgment is proper if the movant shows “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         B. Standing

         This Court's Article III jurisdiction “depends on the existence of a ‘case or controversy.'” GTE California, Inc. v. FCC, 39 F.3d 940, 945 (9th Cir. 1994). “To enforce Article III's limitation of federal jurisdiction to ‘cases and controversies, Plaintiffs must demonstrate . . . standing.'” Nelson v. Nat'l Aeronautics and Space Admin., 530 F.3d 865, 873 (9th Cir. 2008). To satisfy the Constitution's standing requirement, “a plaintiff must show (1) it has suffered an ‘injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that there injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envt'l Servs., Inc., 528 U.S. 167, 180-81 (2000); Spokeo, Inc. v. Robbins, 136 S.Ct. 1540, 1547 (2016); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).

         In addition, where an organization or association is bringing suit on behalf of its members, that organization or association must demonstrate that: (1) at least one of its members would otherwise have standing to sue in their own right; (ii) the interests it seeks to protect are germane to the organization's purpose; and (iii) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 181 (2000).

         IV. ANALYSIS

         A. Standing

         The Court previously determined that Plaintiffs had Article III standing under the doctrines of competitive and environmental standing to bring their claims in Counts I, II, IV, V, and VI. ECF No. 36. The Court further concluded that Plaintiffs had statutory authority under the RFA to pursue Count IV. Id. at 19-21. In their motion for summary judgment, Defendants ask the Court to reconsider Plaintiffs' standing, arguing that, in light of the complete administrative record, Plaintiffs have not established economic or environmental injuries. Plaintiffs also argue that the Court erred in determining that Plaintiffs have standing as indirectly regulated entities under the RFA. The Court addresses that argument separately below. Infra at 30.

         With respect to Defendants' renewed arguments about competitive standing, the Court is persuaded that its initial reasoning was correct. See ECF No. 36 at 7-12. According to Defendants, Plaintiffs' declarations in support of their motion for summary judgment suggest that there is an attenuated chain of causation between Argentine lemon imports and competitive injury to domestic growers that rests on “speculative contingencies.” The Court disagrees. Its initial conclusion that the Rule caused injury to domestic lemon growers was based primarily on APHIS's own conclusions about likely economic harm to domestic lemon growers. See ECF No. 36 at 10 (“APHIS's own predictions show that the increase in supply will lead to a drop in price relative to what the price would otherwise be, and predicts that domestic lemon growers will suffer millions of dollars of economic loss as a result”); see also AR16-17, 28, 30. The other arguments raised by Defendants were previously considered and rejected by the Court.[2] Plaintiffs have economic injury sufficient for Article III standing based on a theory of competitor standing.

         Likewise, the record also supports a finding that Plaintiffs have suffered a non-speculative environmental injury, giving rise to environmental standing. The Pest Risk Assessment conducted by APHIS identified no fewer than seven quarantine pests that would have the potential to be introduced to the United States through exported fruit. AR106-107. Defendants argue that the risk of such pests establishing in the United States is speculative, but that conclusion is contradicted by APHIS's own Pest Risk Assessment. It is undisputed that the unregulated import of Argentine lemons would pose a risk to domestic citrus. The question, therefore, is whether that risk is adequately addressed by the regulation. Whether the systems approach described in the Final Rule is an arbitrary and capricious exercise of APHIS's judgment - or whether it sufficiently mitigates the risks of any quarantine pest establishing on domestic soil - is a question that is bound up in the merits of this case. See ECF No. 36 at 15 (“The ‘likelihood and extent of impact' of the alleged environmental harm are questions should be addressed with the merits” (quoting Save Our Heritage, Inc. v. FAA, 269 F.3d 49, 56 (1st Cir. 2001))). The Court will not import a merits determination into the standing analysis. See Rosales v. United States, 824 F.2d 799, 802-03 (9th Cir. 1987). APHIS's own pest assessment adequately establishes a risk giving rise to environmental injury and standing.

         B. Procedural Challenges to the Rulemaking Process

         1. 2015 Trip Report

         Plaintiffs argue that APHIS failed to satisfy its obligations to use “transparent and accessible” “processes” under the PPA, 7 U.S.C. § 7712, and to comply with notice and comment procedures under the APA, 5 U.S.C. § 553, by concealing a report detailing APHIS's 2015 trip to Argentina (“2015 Trip Report”) until after the close of public comment. Defendants counter that the report was not critical to APHIS's decision, and that the material contained in it was otherwise known and subject to public comment. Therefore, Defendants argue, the non-disclosure was not material. Defendants further contend that the non-disclosure of the 2015 Trip Report is not a cognizable procedural challenge to the Final Rule, but is instead a substantive challenge masquerading as a procedural one.

         An agency is obligated to “identify and make available technical studies and data that it has employed in reaching the decisions to propose particular rules.” Kern Cty. Farm Bureau v. Allen, 450 F.3d 1072, 1076 (9th Cir. 2006). However, “the public is not entitled to review and comment on every piece of information utilized during rule making.” Id. “Instead, an agency, without reopening the comment period, may use ‘supplementary data, unavailable during the notice and comment period, that expands on and confirms information contained in the proposed rulemaking and addresses alleged deficiencies in the pre-existing data, so long as no prejudice is shown.'” Id. (quoting Idaho Farm Bureau Fed'n v. Babbitt, 58 F.3d 1392, 1402 (9th Cir. 1995)).

         If the undisclosed 2015 Trip Report contained information critical to the agency's determination that was also “unique information that was not duplicated in other reports, ” the nondisclosure deprived Plaintiffs and others of the opportunity for public comment, and the agency determination should be reversed and the comment period reopened. Idaho Farm Bureau Fed'n, 58 F.3d at 1403; Kern Cty. Farm Bureau, 450 F.3d at 1074. If, however, the report provided only “supplementary” data that “‘expand[s] on and confirm [s]' information contained in the proposed rule[ ] and “did not alter the justifications or conclusions that were vital to the listing decision, ” there was no procedural error in not publishing it. Kern Cty. Farm Bureau, 450 F.3d at 1079.

         Plaintiffs contend that the information in the 2015 Trip Report was critical because APHIS needed to verify SENASA's oversight of, and compliance with, the harvesting, production, and packinghouse procedures that APHIS was contemplating as part of the systems approach. Defendants dispute the characterization of the report as critical, stating that the purpose of the trip was to assist in the development of the operational work plan, and disputing Plaintiffs' contention that the 2015 site visit was “among the primary bases for concluding that SENASA can comply with the systems approach[.]” (ECF No. 35-1 at 15.) Defendants note that the report summarizing the later September 2016 site visit, which was disclosed to the public for comment, was used in assessing SENASA's oversight capabilities and relied on by APHIS in formulating the Final Rule. (ECF No. 39-1 at 18.)

         Whether or not the document was “critical, ” it certainly was not unique, nor did its non-disclosure prevent meaningful comment on SENASA's oversight capabilities. The 2016 Trip Report addresses the same central issue addressed in the 2015 Trip Report - Argentina's progress in implementing the systems approach. Compare AR 26207-34 with AR25905-24. Plaintiff argues that disclosure of the 2016 Trip Report was not sufficient, because the 2016 trip took place after the harvest season, and therefore the delegation was not able to observe Argentine growers' compliance with, and SENASA's oversight of, harvesting and packinghouse procedures. However, this subject was addressed in several documents available for public comment, including the Risk Management Document, the Proposed Rule itself, and the 2016 Trip Report. AR25905-24; AR156-59; AR168-70. Indeed, the 2016 Trip Report discusses pesticides used by Argentine growers (including dosages), the fruit fly trapping requirement, harvest and packing requirements, the number of SENASA inspectors, and more. See AR25907-13. The information contained in the 2015 Trip Report was duplicative of other information contained in the September 2016 Trip Report, and identified elsewhere throughout the Proposed Rule. However, the September 2016 trip came later in the process, therefore was arguably more central and relevant to APHIS's determination of whether SENASA could reach compliance than the 2015 trip. Therefore, the failure to disclose this report was not material and does not require the reopening of the public comment period. See Aina Nui Corp. v. Jewell, 52 F.Supp.3d 1110, 1122-23 (D. Haw. 2014) (site visit report did not contain new critical information where the information contained therein was largely already contained in the proposed rule and in other documents in the record).

         Defendant also draws a distinction between the 2015 Trip Report and the types of “scientific studies” and “complex factual surveys” that courts concluded should have been disclosed in other cases. (ECF No. 42 at 5.); See also, e.g., Idaho Farm Bureau, 58 F.3d 1392, 1403 (9th Cir. 1995); Ober v. EPA, 84 F.3d 304, 314 (9th Cir. 1996) (reopening public comment). As the Ninth Circuit noted in Kern County Farm Bureau, agencies are compelled to disclose documents setting out the “technical basis” for a proposed rule. 450 F.3d at 1076. As Defendants point out, without access to those types of documents, the public is unable to point out errors in methodology, data selection, and sampling. By contrast, the 2015 Trip Report merely provides a summary of the 2015 site visit. Plaintiffs are not disputing the factual accuracy of the report - there is no methodology or data selection to critique - but rather arguing that the agency should have used the report to reach a different conclusion about whether it could rely on SENASA to execute its obligations under the Final Rule. Bear Valley Mut. Water Co. v. Jewell, 790 F.3d 977, 993 (9th Cir. 2015) (agency's failure to disclose studies was not prejudicial where public was on notice of the issues raised in the additional studies and plaintiffs did not challenge undisclosed studies' reliability or conclusions).

         Plaintiffs do not identify any entirely unique and material argument or comment that it would have made had the report been disclosed before the conclusion of the notice and comment period. Plaintiffs argue that the report evinces SENASA's continued failure to implement procedures in line with APHIS's requirement - an argument that could equally be based on the disclosed 2016 Trip Report or any number of other documents. In other words, Plaintiffs are not arguing that their comments would have made any substantively unique comments if they had an opportunity to comment on the 2015 Trip Report. Rather, Plaintiff objects that the agency should have considered the information in the report to come to a different conclusion. That argument will be addressed with Plaintiffs' other substantive arguments and APHIS's conclusion will be subject to review to determine whether it was arbitrary, capricious, or an abuse of discretion. Bear Valley Mut. Water Co., 790 F.3d at 993 (rejecting plaintiffs' procedural challenge, noting that plaintiffs “do not challenge the reliability of the studies, but disagree with the [agency]'s interpretation and use of the studies”). Based on the Court's review of that document, the information contained within it was largely duplicated in the disclosed 2016 Trip Report, the Proposed Rule, and other documents in the record.

         Moreover, a number of interested parties, including Plaintiffs, did address SENASA's oversight capabilities in response to the Proposed Rule. See, e.g. AR25656 (identifying potential issues with SENASA oversight under the heading “Questions on SENASA Inspectors”). The robust comments from the public on the issues related to SENASA's oversight and the site visits leading up to the implementation demonstrates that there was no prejudice in the non-disclosure. Kern Cty. Farm Bureau, 450 F.3d at 1076 (agency need not provide opportunity to comment on documents that “expands on and confirms information contained in the proposed rulemaking . . . so long as no prejudice is shown.”).

         Defendant also notes that the 2015 Trip Report was disclosed primarily in response to comments questioning the nature of the visit. Courts have consistently concluded that an agency may add supporting documentation to the record in response to a comment without having to offer an additional opportunity for public comment, so long as the additional information is not both critical and unique. See Rybachek v. EPA, 904 F.2d 1276, 1286 (9th Cir. 1990) (“Nothing prohibits the Agency from adding supporting documentation for a final rule in response to public comments”); Alaska v. Lubchenco, 825 F.Supp.2d 209, 223-24 (D.D.C. 2011) (“Were it otherwise, an agency could find itself stuck in an infinite feedback loop of public comments on responses to public comments”).

         2. Operat ...

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