United States District Court, N.D. California
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY
JUDGMENT AND DENYING PLAINTIFFS' MOTION FOR SUMMARY
JUDGMENT Re: Dkt. Nos. 96, 97
HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE
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.
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).
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).
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.
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.
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.
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.
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
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).
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
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 ...