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Center for Food Safety v. Perdue

United States District Court, N.D. California

May 24, 2018

CENTER FOR FOOD SAFETY, et al., Plaintiffs,
SONNY PERDUE, et al., Defendants.



         On April 7, 2015, a collective of non-profit organizations and commercial entities (“Plaintiffs”) brought suit against representatives of the United States Department of Agriculture (“USDA”), the Agricultural Marketing Service, and the National Organic Program (“NOP”) (collectively, “Defendants”), asserting claims for declaratory and injunctive relief under the Administrative Procedures Act (“APA”), 5 U.S.C. § 553, and the Organic Foods Production Act (“OFPA”), 7 U.S.C. §§ 6501-6523. Currently pending before the Court are the parties' motions for summary judgment. See Dkt. Nos. 96 (“Defs. Mot.”), 97 (“Pls. Mot.”), 99 (“Defs. Opp.”), 100 (“Pls. Opp.”). On November 9, 2017, the Court heard argument on the motions. After carefully considering the parties' arguments, the Court GRANTS Defendant's motion for summary judgment, and DENIES Plaintiff's motion for summary judgment.


         The basic facts are not in dispute. This case arises from a notice (“the Sunset Notice” or “the Notice”) promulgated by USDA that alters the review process for determining which substances may be used in food certified as “organic” under the OFPA. The OFPA requires the Secretary of Agriculture (“the Secretary”) to establish a “National List” of substances that fall into specific groupings, including synthetic substances permitted to be used in organic products (referred to as “exempted substances”), and non-synthetic substances that are prohibited from use in organic products (referred to as “prohibited substances”). See Defs. Mot. at 2; 7 U.S.C. § 6517(b)-(c). The OFPA requires the National Organic Standards Board (“NOSB”) to develop the National List for submission to the Secretary. The NOSB is composed of fifteen members appointed by the Secretary. The Secretary cannot exempt a synthetic substance unless the NOSB proposes to do so. 7 U.S.C. § 6517(d).

         The OFPA also contains a “sunset provision, ” which provides that no substances on the National List are “valid unless the [NOSB] has reviewed such exemption or prohibition as provided in this section within 5 years.” 7 U.S.C. § 6517(e). Prior to the Notice that triggered this lawsuit, USDA's regulations required the NOSB to consider public comments and vote on “the continuation of specific exemptions and prohibitions contained on the National List.” NOP, Sunset Review, 70 Fed. Reg. 35, 177 at 35, 178 (June 17, 2005). Under that framework, a vote of two-thirds of the NOSB was required to recommend that a substance be renewed. See 7 U.S.C. § 6518(i). If two-thirds of the NOSB did not favor renewal, the substance expired and the Secretary was required to remove the substance from the National List. See Pls. Mot. at 5; 7 U.S.C. § 6517(d).

         The USDA's September 16, 2013 notice enacted a new eight-step sunset review procedure. NOP, Sunset Process, 78 Fed. Reg. 56, 811, 56, 812 (Sept. 16, 2013). Pursuant to that new procedure, the full NOSB does not vote to renew each substance on the National List. Id. at 56, 814. Instead, a NOSB subcommittee examines each substance set for sunset review and proposes to the full NOSB a list of substances to be removed from the National List. Id. It is only those substances that a NOSB subcommittee member proposes for removal, and that a member of the NOSB subsequently moves to remove, that are voted upon by the full NOSB. Id. A motion to remove must receive two-thirds of the votes cast by the NOSB to pass. See Defs. Mot. at 6. Once all motions have been voted on, the full NOSB completes its sunset review. 78 Fed. Reg. 56, 814.

         Following the NOSB's final vote, the NOSB Chair compiles all reviews and recommendations for removal, and transmits it to USDA for consideration. Id. USDA then examines this document, and if it elects to renew substances that have undergone sunset review, USDA publishes in the Federal Register a list of all substances that are renewed for another five years on the National List. Id. If USDA initiates a proposed removal of a substance from the National List, USDA publishes in the Federal Register the proposal to remove a substance and requests public comment. Id. at 56, 815. Based on comments received, USDA determines whether to finalize a substance's removal from the National List. Id.

         Following issuance of the Notice, Plaintiffs filed this action for declaratory and injunctive relief. See Dkt. No. 1. On July 17, 2015, Defendants moved to dismiss the complaint for lack of jurisdiction, or alternatively, for failure to state a claim. Dkt. No. 16. The Court granted Defendant's motion on October 9, 2015, but provided Plaintiffs with leave to amend their complaint. Dkt. No. 49. On October 30, 2015, Plaintiffs filed the first amended complaint. Dkt. No. 50 (“FAC”). Defendants moved to dismiss the FAC, and the Court denied the motion. Dkt. Nos. 53, 61 (“Prior Order”). The parties finalized the Administrative Record on August 11, 2017. See Defs. Mot. at 8-9.


         Defendants move for summary judgment on two alternative grounds. First, Defendants argue that the Notice is not “final agency action” under the APA, and is therefore immune from judicial review. Defs. Mot. at 10-13. Second, if review is permissible, Defendants contend that the Notice satisfies the APA's procedural requirements and is fully consistent with the OFPA. Id. at 13-22. Plaintiffs also move for summary judgment on the merits of their OFPA and APA claims. Pls. Mot. at 10-24. Specifically, Plaintiffs argue that the Notice contravenes the substantive provisions of the OFPA, and is therefore arbitrary and capricious. In addition, Plaintiffs argue that the Notice violates the APA because it is a legislative rule enacted without prior notice-and-comment. The Court turns first to the issue of whether the issuance of the Notice is reviewable.

         Final agency action is a prerequisite to judicial review under the APA. 5 U.S.C. § 704 (“Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.”). As the parties acknowledged at oral argument, there is no dispute that this requirement applies to Plaintiffs' claims. See also Defs. Mot. at 10; Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 882 (1990) (“When, as here, review is sought not pursuant to specific authorization in the substantive statute, but only under the general review provisions of the APA, the agency action in question must be final agency action.”).

         For agency action to be final, “the action must (1) ‘mark the consummation of the agency's decisionmaking process' and (2) ‘be one by which rights or obligations have been determined, or from which legal consequences will flow.'” Oregon Nat. Desert Ass'n v. U.S. Forest Serv., 465 F.3d 977, 982 (9th Cir. 2006) (quoting Bennett v. Spear, 520 U.S. 154, 178 (1997)). “The core question is whether the agency has completed its decisionmaking process, and whether the result of that process is one that will directly affect the parties.” Id. (quotation omitted). In applying Bennett's principles “certain factors provide an indicia of finality, such as whether the action amounts to a definitive statement of the agency's position, whether the action has a direct and immediate effect on the day-to-day operations of the party seeking review, and whether immediate compliance with the terms is expected.” Indus. Customers of Nw. Utilities v. Bonneville Power Admin., 408 F.3d 638, 646 (9th Cir. 2005) (quotation and alterations omitted).

         Defendants argue that the Notice does not satisfy either of Bennett's requirements for final agency action. Defs. Mot. at 9. Defendants claim that the Notice does not consummate the USDA's decisionmaking process regarding renewal or removal of substances from the National List; rather, the Notice simply alters the method by which substances are proposed for removal or renewal from the National List. See Defs. Mot. at 3-6, 11. Defendants similarly contend that the Notice does not itself impart or remove any public rights or legal obligations. Id. at 12-13. On the other hand, Defendants acknowledge that USDA's actual renewal or removal decision does constitute final agency action. See Id. at 11-12. According to Defendants, Plaintiffs may accordingly challenge that “consummating” agency action. See id.

         In response, Plaintiffs present three reasons why they satisfy Bennett. First, Plaintiffs argue that the Notice is final in that it “definitively mark[s] the consummation of USDA's process in overhauling the sunset review process.” Pls. Mot. at 20; Pls. Opp. at 21. Second, Plaintiffs highlight that the Notice requires immediate compliance by USDA, even if final renewal and removal decisions are subsequently made. Pls. Opp. at 21-22. Third, Plaintiffs claim that the Notice's change to voting procedures shifts the presumption in favor of automatic renewal, instead of removal. See Pls. Mot. at 13-14; Pls. Opp. at 21-22. Plaintiffs accordingly assert that this shift directly impacts their day-to-day operations, as new voting procedures will discourage individuals from participating in the sunset review process. See ...

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