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Ranchers-Cattlemen Action Legal Fund v. United States Department of Agriculture

United States District Court, E.D. Washington

June 5, 2018

RANCHERS-CATTLEMEN ACTION LEGAL FUND; UNITED STOCKGROWERS OF AMERICA; and CATTLE PRODUCERS OF WASHINGTON, Plaintiffs,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE; and SONNY PERDUE in his official capacity as Secretary of Agriculture, Defendants.

          ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          ROSANNA MALOUF PETERSON UNITED STATES DISTRICT JUDGE.

         BEFORE THE COURT are the parties' cross-motions for summary judgment, ECF Nos. 14 and 23. Plaintiffs Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, and Cattle Producers of Washington (collectively, “Plaintiffs”) challenge as unlawful the effects of a Final Rule promulgated in 2016 by Defendants Sonny Perdue and United States Department of Agriculture (“USDA, ”, collectively “Defendants”). ECF No. 1 at 33-34. Plaintiffs ask this Court to declare unlawful and vacate USDA regulations related to the country of origin labeling (“COOL”) requirements of beef. Id. Plaintiffs also seek to enjoin Defendants from continuing to implement USDA regulations regarding the marking or labeling of imported beef or pork to the extent that those regulations fail to require that imported beef and pork comply with existing statutes. Id. The Court has heard the parties' arguments, has reviewed the pleadings, and is fully informed.

         BACKGROUND

         At issue in this case are two USDA regulations governing the country of origin labeling requirements for foreign and domestic beef and pork. Country of origin labeling requirements require retailers to notify their customers about the country of origin of certain products.

         Plaintiffs are nonprofit membership organizations with the goals of ensuring the continued profitability and viability of independent cattle producers and advancing the interests of domestic farmers. ECF No. 1 at 12-18. Plaintiffs allege that two USDA regulations have caused harm to Plaintiffs. Id. at 8. Plaintiffs further allege that these two USDA regulations are unlawful and should be vacated. Id. at 33-34.

         USDA Regulations Challenged by Plaintiffs

         The first USDA regulation Plaintiffs challenge is 9 C.F.R. § 327.18(a) (“1989 Foreign Products Rule”). See ECF No. 1 at 2; ECF No. 14 at 35-36. The second challenged USDA regulation is the Removal of Mandatory Country of Origin Labeling Requirements, 81 Fed. Reg. 10, 755 (Mar. 2, 2016) (“2016 COOL Requirement Removal Rule”).

         The Consumer and Marketing Service, an agency within the USDA's Agricultural Research Service (now the Food Safety and Inspection Service, or “FSIS”), issued the 1989 Foreign Products Rule, 9 C.F.R. § 327.18(a), to comply with amendments to the Federal Meat Inspection Act, 21 U.S.C. § 601 et seq. See 35 Fed. Reg. 15, 552, 15, 552-15, 610 (Oct. 3, 1970). FSIS amended the rule in 1976 and 1989. See 9 C.F.R. § 327.18. The 1989 Foreign Products Rule provides that “[a]ll products, after entry into the United States, shall be deemed and treated as domestic products and shall be subject to the applicable provisions of the [Federal Meat Inspection Act] and the regulations in this subchapter and the applicable requirements under the Federal Food, Drug and Cosmetic Act. . . .”[1] § 327.18(a).

         The Agricultural Marketing Service, another USDA agency, implemented the 2016 COOL Requirement Removal Rule to conform with amendments to the Agricultural Marketing Act of 1946, 7 U.S.C. § 1621 et seq., contained in the 2016 Consolidated Appropriations Act, Pub. L. No. 114-113, § 759, 129 Stat. 2242 (2016). See 81 Fed. Reg. 10, 755 (Mar. 2, 2016). The 2016 COOL Requirement Removal Rule removed all country of origin labeling requirement references to beef, ground beef, pork, and ground pork in 7 C.F.R. § 65, the Agricultural Marketing Service's regulation governing country of origin labeling requirements for specific products.[2] See id.

         Relevant Statutory and Regulatory Framework for Country of Origin Labeling Requirements

         Several federal statutes provide a framework for country of origin labeling requirements and regulations. USDA regulations implement the country of origin labeling requirements enacted by Congress.

         The Federal Meat Inspection Act (“FMIA”), 21 U.S.C. § 601 et seq., was enacted by Congress in 1906. The relevant provision concerns the meat or meat food products of cattle and other animals. 21 U.S.C. § 620(a). The statute requires that “[a]ll such imported articles shall, upon entry into the United States, be deemed and treated as domestic articles subject to the other provisions of this chapter and the Food, Drug, and Cosmetic Act: Provided, That they shall be marked and labeled as required by such regulations for imported articles . . . .” Id. (internal citation omitted). The USDA issued the original version of the 1989 Foreign Products Rule to implement § 620 of the FMIA when Congress amended § 620 in 1967.

         The Tariff Act of 1930, 19 U.S.C. § 1202 et seq., concerns the marking of imported articles and containers. 19 U.S.C. § 1304(a). It states that, “[e]xcept as hereinafter provided, every article of foreign origin . . . imported into the United States shall be marked . . . in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article.” Id.

         The Agricultural Marketing Act (“AMA”), 7 U.S.C. § 1621 et seq., enacted in 1946, authorizes the Secretary of Agriculture to carry out a number of functions related to the marketing and distribution of agricultural products. See, e.g., 7 U.S.C. §§ 1621, 1622. In 2002, Congress enacted legislation amending the AMA to require retailers to notify their customers of the country of origin of covered commodities, including beef, ground beef, pork, and ground pork. See Farm Security and Rural Investment Act of 2002, Pub. L. No. 107-171, § 282, 116 Stat. 134 (2002). The 2002 legislation also directed the Secretary of Agriculture to promulgate implementing country of origin labeling regulations. Id.

         To comply with the 2002 legislation, the Agricultural Marketing Service issued a Final Rule implementing the AMA's mandatory country of origin labeling requirements on January 15, 2009. See Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts, 74 Fed. Reg. 2, 657 (Jan. 15, 2009). The 2009 Final Rule required country of origin labeling on specific meat products.

         While the 2002 legislation and subsequent 2009 Final Rule had positive effects for domestic providers of beef like Plaintiffs, see ECF Nos. 15-19, foreign suppliers of beef and pork responded by requesting formal consultations with the United States as part of a World Trade Organization (“WTO”) dispute resolution process concerning the country of origin labeling provisions for beef and pork under the AMA. In 2012, the WTO Appellate Body found that the country of origin labeling requirements under the AMA discriminated against imported meat. See Appellate Body Report, United States-Certain Country of Origin Labelling [sic] (COOL) Requirements, WT/DS384/AB/R (June 29, 2012).

         In response to the Appellate Body's findings, the Agricultural Marketing Service attempted to address the international concerns about the AMA, amending its prior regulations. See Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts, 78 FR 31, 367 (May 4, 2013).

         On May 29, 2015, the WTO Dispute Settlement Body adopted an Appellate Body report that upheld the Compliance Panel findings largely in favor of Canada and Mexico.[3] See Appellate Body Report, United States-Certain Country of Origin Labelling [sic] (COOL) Requirements, WT/DS384/AB/RW (May 18, 2015). Canada and Mexico subsequently requested and received authorization from the WTO Dispute Settlement Body to raise import duties on millions of dollars of imports from the United States.[4]

         Following the WTO rulings, Congress amended the AMA to remove beef and pork from the list of covered commodities for which retailers are required to comply with mandatory country of origin labeling requirements. See 2016 Consolidated Appropriations Act, Pub. L. No. 114-113, 129 Stat. 2242 (2015); 7 U.S.C. §§ 1638, 1638a. On March 2, 2016, to comply with Congress's amendment of the AMA, the Agricultural Marketing Service issued the 2016 COOL Requirement Removal Rule at issue in this case. See Removal of Mandatory Country of Origin Labeling Requirements for Beef and Pork Muscle Cuts, Ground Beef, and Ground Pork, 81 Fed. Reg. 10, 755 (Mar. 2, 2016). The 2016 COOL Requirement Removal Rule amended the Agricultural Marketing Service's country of origin labeling regulations to remove beef, ground beef, pork, and ground pork from the list of covered commodities. Id.

         Subject Matter Jurisdiction

         This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1331 as a civil action arising under the laws of the United States because Plaintiffs allege that two federal regulations are not in accordance with federal statutory requirements, in violation of the Administrative Procedure Act (“APA”), 5 U.S.C. § 500 et seq. There ...


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