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Marler Blog Providing Commentary on Food Poisoning Outbreaks & Litigation

My Favorite Case: TEXAS FOOD INDUSTRY ASS’N v. ESPY

This case has saved a lot of illnesses and deaths in consumers of ground beef over the last two decades.  It has also saved the beef industry – although it likely would not admit it.

It is worth the full read.

I. BACKGROUND

On October 17, 1994, the United States Department of Agriculture (“USDA”) announced a new Escherichia Coli O157:H7 (“E. Coli”) sampling program, to be conducted by the Food Safety and Inspection Service (“FSIS”). The notice announced that the FSIS would collect and test five thousand (5,000) samples of raw ground beef from federally inspected establishments and retail stores. Any of these samples testing positive for the pathogen E. Coli would be treated as “adulterated” under the Federal Meat Inspection Act (“FMIA”) and referred to FSIS headquarters for regulatory action.1 Prior to this announcement, the USDA had treated pathogen-contaminated2 meat as unadulterated under the FMIA.

On November 1, 1994, several supermarket and meat-industry organizations3 brought this action seeking to prevent the USDA from conducting its E. Coli sampling program. Plaintiffs argue that the USDA failed to adhere to the notice-and-comment procedure required by the Administrative Procedure Act (“APA”) and move this Court for a temporary and permanent injunction. Plaintiffs also contend that the sampling program is an arbitrary and capricious exercise of agency authority and that it exceeds the USDA’s statutory authority under the FMIA.

II. FINDINGS OF FACTS AND CONCLUSIONS OF LAW

In order to obtain a preliminary injunction, the Fifth Circuit requires the movant for a preliminary injunction to prove the following four elements:

(1) a substantial likelihood of success on the merits; (2) a substantial threat of irreparable injury if the injunction is not issued; (3) that the threatened injury to the movant outweighs any damage the injunction might cause to the opponent; and (4) that the injunction will not disserve the public interest.  Lakedreams v. Taylor, 932 F.2d 1103, 1107 (5th Cir.1991); see also Enterprise International, Inc. v. Corporacion Estatal Petrolera Ecuatoriana, 762 F.2d 464, 471 (5th Cir. 1985). If the movant fails to sufficiently prove any of these elements, the preliminary injunction should be denied.

In evaluating the first element, whether there is a substantial likelihood of success on the merits, the nature of the Plaintiffs complaint must first be determined. Plaintiffs do not contest that the USDA has statutory authority to conduct sampling and testing; however, Plaintiffs do attack the USDA’s E. Coli sampling program because it treats E. Coli as an adulterant under the FMIA. Plaintiffs claim that the USDA’s decision to treat E. Coli as an adulterant should be enjoined because it 1) violates the APA 2) is arbitrary and capricious and 3) exceeds USDA’s statutory authority. The Court will address each of these arguments in turn.

A. Violation of the APA

Under the APA, government agencies may issue rules only after the notice-and-comment procedures enumerated in the statute are completed. 5 U.S.C. § 553. It is undisputed that the USDA’s sampling program was promulgated without engaging in those procedures. However, USDA argues that notice-and-comment requirements do not apply in this case by virtue of § 553(b)(3)(A) which carves out an exception for “interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice.” 5 U.S.C. § 553(b)(3)(A). According to USDA, its E. Coli sampling program is nothing more than an inspection program which qualifies as a “procedural rule” under § 553(b)(3)(A). In the alternative, USDA argues that its decision to consider E. Coli an adulterant under the FMIA is an interpretive rule intended to advise the meat and grocery industries of the agency’s position on the law.4

In determining whether an agency’s action requires notice-and-comment, courts have recognized that there are no bright-line rules used to determine whether an agency’s action fits into one of the enumerated exceptions. E.g. Avoyelles Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897, 909 (5th Cir. 1983) (stating that the “categories have `fuzzy perimeters’ and establish `no general formula’”) (citations omitted). Rather, “it has fallen to the courts to discern the line through the painstaking exercise of hopefully, sound judgment.” Community Nutrition Institute v. Young, 818 F.2d 943, 946 (D.C.Cir.1987).

In the present case, the process is further complicated because the agency action in question, is actually comprised of two distinct parts. The first component is the agency’s decision to test raw ground beef for the E. Coli pathogen and the second is its decision to treat E. Coli contaminated meat as “adulterated” under the FMIA.5

As for the first part, it appears to be undisputed that USDA has the authority to test for E. Coli without engaging in notice-and-comment rulemaking.6 The FMIA authorizes the USDA to conduct testing and this aspect USDA’s announcement appears to be a “procedural rule” in that it merely informs the industry of the procedures it will use to conduct this testing. Furthermore, in determining whether a rule is in fact procedural, the real inquiry has been described as whether a rule will have a “substantial impact” on those regulated. Brown Express, Inc. v. United States, 607 F.2d 695, 702 (5th Cir.1979). Since the testing program is conducted and funded by FSIS, it does not compel any specific industry action. In fact, there is nothing about the agency’s decision to test for E. Coli, by itself that imposes any kind of burden on the industry. Therefore, USDA was not required to conduct notice-and-comment procedures before implementing its plan to test raw ground beef for E. Coli. See U.S. Dept. of Labor v. Kast Metals Corp., 744 F.2d 1145, 1151-52 (5th cir. 1984) (holding that an inspection plan properly fit the “procedural rule” exception to the notice-and-comment requirement of the APA).

The more difficult question is whether the second part of USDA’s announcement, its decision to treat E. Coli as an adulterant, violated the APA’s notice-and-comment requirement. The Court agrees with the Plaintiffs that this decision may have a substantial impact on the regulated industry. Therefore, it does not qualify as a “procedural rule.” Furthermore, the USDA’s announcement does not appear be a “general statement of policy.” See, e.g., Brown, 607 F.2d at 701 (describing general statements of policy as “announcements to the public of the policy which the agency hopes to implement in future rulemakings or adjudications. A general statement of policy like a press release, presages an upcoming rulemaking or announces the course which the agency intends to follow in future adjudications”) (citing Pacific Gas & Electric Co. v. FPC, 506 F.2d 33, 38 (D.C.Cir.1974); Batterton v. Marshall, 648 F.2d 694, 706 (D.C.Cir.1980) (stating that an agency action was not a general policy statement because it left “no room for further exercise of administrative discretion”). Therefore, unless the Court finds that USDA’s decision to consider E. Coli an adulterant is an “interpretive rule,” the agency violated the notice-and-comment requirements of the APA.

In describing the distinction between “interpretive rules” and rules requiring notice-and-comment (“substantive rules”), courts have stated that “`substantive rules … are those which create law, usually implementary to an existing law; whereas interpretative rules are statements as to what the administrative officer thinks the statute or regulation means.’” Brown, 607 F.2d at 700 (quoting Gibson Wine Co. v. Snyder, 194 F.2d 329, 331 (D.C.Cir.1952)). The District of Columbia Circuit presented the best reconciliation of the case law on this issue when it stated:

Accordingly, insofar as our cases can be reconciled at all, we think it almost exclusively on the bases of whether the purported interpretive rule has “legal effect”, which in turn is best ascertained by asking (1) whether in the absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties, (2) whether the agency has published the rule in the Code of Federal Regulations, (3) whether the agency has explicitly invoked its general legislative authority, or (4) whether the rule effectively amends a prior legislative rule. If the answer to any of these questions is affirmative, we have a [substantive], not an interpretive rule. American Mining Congress v. Mine Safety & Health Administration, 995 F.2d 1106, 1112 (D.C.Cir.1993).

In the present case, the Court concludes that the USDA’s decision to consider E. Coli as an adulterant is an interpretive rule. The FMIA does not require the USDA to engage in substantive rulemaking as a predicate to considering a particular substance an adulterant. Young v. Community Nutrition Institute, 476 U.S. 974, 981-83, 106 S.Ct. 2360, 2364-66, 90 L.Ed.2d 959 (1986). Therefore, the “agency has the discretion to proceed through case-by-case adjudication and interpretive orders, rather than through the rule-making process.” Marsh, 715 F.2d at 909. Furthermore, the USDA has neither published the rule in the Code of Federal Regulations, nor invoked its general legislative authority. Finally, although the rule does constitute a change in USDA’s interpretation of the FMIA, it does not effectively amend a prior legislative rule.7

Based on the foregoing, the Court holds that the USDA did not violate the APA. Under the factors enumerated in American Mining Congress, USDA’s decision to consider E. Coli an adulterant is an “interpretive rule.” Furthermore, its decision to conduct sampling and testing constitutes a “procedural rule.” Therefore, the Court concludes that, as a whole, the USDA’s E. Coli sampling program is exempted from the notice-and-comment requirement of the APA.

B. Arbitrary and Capricious

In order to find that an agency action is arbitrary and capricious, the Court must find that there is no rational basis for the agency action. E.g. American Petroleum Institute v. E.P.A., 858 F.2d 261, 264 (5th Cir.1988) (emphasis added). The agency’s decision is entitled to a presumption of regularity and a Court is not empowered to substitute its judgment for that of the agency. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-16, 91 S.Ct. 814, 823-24, 28 L.Ed.2d 136 (1971). However, the presumption “is not to shield [the agency's] action from a thorough, probing, in-depth review.” Id.

Plaintiffs in this case claim that USDA’s action is arbitrary and capricious because it will not achieve its intended purpose. Among other reasons, they allege that testing is prohibitively expensive and that the industry is already doing all it can to control the problem. They also argue that USDA has singled out a particular product (raw ground beef) and a particular pathogen (E. Coli) with no adequate explanation. They allege that other pathogens currently pose greater health risks. Finally, Plaintiffs contends that USDA’s action is arbitrary and capricious because it abandons long-standing USDA policy without adequate explanation.

In response, Defendants argue that their program has already begun to achieve its intended purpose of spurring industry to use preventive measures. They also present evidence of emerging scientific and public health data, which they claim, justifies their focus on E. Coli in raw ground beef. Finally, they argue that their change in policy is due to the emerging nature of the evidence in this area.

After reviewing the evidence and arguments presented by the Parties, the Court finds that the Defendants E. Coli sampling program was not arbitrary and capricious. There is certainly a rational basis for the USDA to conduct some sort of testing in order to educate itself about this problem. Furthermore, the evidence indicates that the program has been at least partially successful in spurring industry to take greater preventive measures. Moreover, in light of the common cooking practices of most Americans, there is at least a rational basis for treating E. Coli differently than other pathogens. Finally, the Court finds that the Defendants’ changing policy is a rational response to an emerging problem.

C. Statutory Authority Under the FMIA

The Plaintiffs final claim is that USDA’s sampling program exceeds its statutory authority. The “`interpretation given [a] statute by the officers or agency charged with its administration’ is entitled to substantial deference.” Marsh, 715 F.2d at 919 (citations omitted). “Regardless of whether the court would have arrived at the same interpretation, if the agency’s interpretation is reasonable the court must respect it.” Id.

Here, the Plaintiffs do not dispute the Defendants’ general authority to test raw ground beef for E. Coli, rather Plaintiffs contest the Defendants’ decision to consider E. Coli as an “adulterant” under the FMIA. Plaintiffs’ primary argument in this regard is that E. Coli contaminated ground beef is not adulterated because it is only injurious to health if improperly cooked. However, after reviewing the evidence submitted by the Parties, the Court disagrees.

Under the FMIA, a product is “adulterated” if “it bears or contains any poisonous or deleterious substance which may render it injurious to health; but in case the substance is not an added substance, such article shall not be considered adulterated under this clause if the quantity of such substance in or on such article does not ordinarily render it injurious to health….” 21 U.S.C. § 601(m)(1) (emphasis added). In construing this language, Courts have held that other pathogens, such as Salmonella, are not adulterants. See, e.g., American Public Health Assoc. v. Butz, 511 F.2d 331, 334 (5th Cir. 1975). In reaching this conclusion, the court in Butz relied upon the fact that ordinary methods of cooking and preparing food kill the Salmonella pathogen. See Id. (stating that “American housewives and cooks normally are not ignorant or stupid and their methods of preparing and cooking of food do not ordinarily result in salmonellosis”). However, unlike other pathogens, it is not “proper” cooking but “thorough” cooking that is necessary to protect consumers from E. Coli. The evidence submitted by Defendants indicates that many Americans consider ground beef to be properly cooked rare, medium rare, or medium. The evidence also indicated that E. Coli contaminated ground beef cooked in such a manner might cause serious physical problems, including death. Therefore, E. Coli is a substance that renders “injurious to health” what many Americans believe to be properly cooked ground beef. Based on this evidence, the Court finds that E. Coli fits the definition of an adulterant under the FMIA.

III. CONCLUSION

Pursuant to the foregoing analysis, the Court finds that Plaintiffs do not have a substantial likelihood of success on merits. Therefore, the Court is of the opinion that Plaintiffs’ motion should be denied.8

ACCORDINGLY IT IS ORDERED that Plaintiffs’ Motion for Preliminary Injunction is hereby DENIED.