818 F.2d 943 (D.C. Cir. 1987), 84-5223, Community Nutrition Institute v. Young

Docket Nº:84-5223.
Citation:818 F.2d 943
Party Name:COMMUNITY NUTRITION INSTITUTE, et al., Appellants, Laura A. Rogers v. Frank YOUNG, Commissioner, Food and Drug Administration.
Case Date:May 15, 1987
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 943

818 F.2d 943 (D.C. Cir. 1987)

COMMUNITY NUTRITION INSTITUTE, et al., Appellants, Laura A. Rogers


Frank YOUNG, Commissioner, Food and Drug Administration.

No. 84-5223.

United States Court of Appeals, District of Columbia Circuit

May 15, 1987

Argued Dec. 19, 1986.

Page 944

Appeal from the United States District Court for the District of Columbia (Civil Action No. 80-03110).

William B. Schultz, with whom Alan B. Morrison and Katherine A. Meyer, Washington, D.C., were on the brief for appellants.

Michael J. Ryan, Asst. U.S. Atty., with whom Joseph E. diGenova, U.S. Atty., Royce C. Lamberth, Craig Lawrence, Asst. U.S. Attys., Washington, D.C., Thomas Scarlett, Chief Counsel, Rockville, Md., and Michael M. Landa, Associate Chief Counsel for Enforcement, Food and Drug Admin., were on the brief for appellee. Patricia J. Kenney, Asst. U.S. Atty., Washington, D.C., Stephen D. Terman, Counsel, Food and Drug Admin., Rockville, Md., Richard K. Willard, Atty. Gen., Leonard Schaitman and John M. Rogers, Attorneys, Dept. of Justice, Washington, D.C., entered appearances for appellee.

Page 945

Philip C. Olsson, Washington, D.C., was on the brief for amicus curiae in support of appellee, State of South Carolina, urging affirmance of the Dist. Court decision.

Before MIKVA, EDWARDS and STARR, Circuit Judges.


Opinion concurring in part and dissenting in part filed by Circuit Judge STARR.


This case makes its second appearance before this court. It presents a challenge by a consortium of organizations and private citizens (collectively referred to as CNI) to the Food and Drug Administration's regulation of certain unavoidable contaminants in food, most particularly, aflatoxins in corn. 1 Pursuant to its statutory mandate to limit the amount of "poisonous or deleterious substances" in food, see 21 U.S.C. Sec. 346, FDA establishes "action levels" informing food producers of the allowable levels of unavoidable contaminants such as aflatoxins. Producers who sell products that are contaminated above the action level, which for aflatoxins in corn is currently set at 20 parts per billion, are subject to enforcement proceedings initiated by FDA.

CNI filed suit in federal district court, launching a three-pronged attack on FDA's action level for aflatoxins in corn: (1) in issuing the action level, FDA failed to comply with the rulemaking requirements of the Food, Drug and Cosmetic Act (FDC Act), see 21 U.S.C. Sec. 346; (2) the action level violated the Administrative Procedure Act because it constitutes a legislative rule issued without the requisite notice-and-comment procedures, see 5 U.S.C. Sec. 553; and (3) FDA's decision to permit adulterated corn to be blended with unadulterated corn to bring the total contamination within the action level violated the FDC Act. The District Court granted summary judgment in favor of FDA on each issue.

In our initial opinion, we confined ourselves to CNI's first argument. We concluded that the FDC Act, by stating that FDA "shall promulgate regulations," 21 U.S.C. Sec. 346, required that FDA issue formal regulations or "tolerances," rather than informal action levels. Having invalidated the action level on this ground, we concluded that CNI's APA argument was thus rendered moot and that the blending issue stood in need of reevaluation on remand. See 757 F.2d 354 (D.C.Cir.1985).

The Supreme Court reversed our decision, --- U.S. ----, 106 S.Ct. 2360, 90 L.Ed.2d 959, holding that the FDC Act was not so clear as to preclude FDA's interpretation of the statute under which the agency could lawfully proceed by way of action levels. 106 S.Ct. 2360 (1986). Since the Court did not reach the APA or blending issues, it remanded the case to this court for "further proceedings consistent with [its] opinion." Id. at 2366. Thus, with the first issue resolved by the High Court, we must now address the still pending APA and blending issues.


Under the APA, agency rules 2 may be issued only after the familiar notice-and-comment procedures enumerated in the statute are completed. See 5 U.S.C. Sec. 553. It is undisputed that the action level at issue here was promulgated sans those procedures. FDA, however, argues that notice-and-comment requirements do not apply by virtue of subsection (b)(3)(A) of section 553, which carves out an exception for "interpretative rules [and] general statements of policy." According to the

Page 946

FDA, action levels represent nothing more than nonbinding statements of agency enforcement policy. CNI, on the other hand, argues that the action levels restrict enforcement discretion to such a degree as to constitute legislative rules.

The distinction between legislative rules and interpretative rules or policy statements has been described at various times as "tenuous," Chisholm v. FCC, 538 F.2d 349, 393 (D.C.Cir.), cert. denied, 429 U.S. 890, 97 S.Ct. 247, 50 L.Ed.2d 173 (1976), "fuzzy," Pacific Gas & Electric Co. v. FPC, 506 F.2d 33, 38 (D.C.Cir.1974), "blurred," Saunders, Interpretative Rules With Legislative Effect: An Analysis and a Proposal For Public Participation, 1986 Duke L.J. 346, 352, and, perhaps most picturesquely, "enshrouded in considerable smog." Noel v. Chapman, 508 F.2d 1023, 1030 (2d Cir.), cert. denied, 423 U.S. 824, 96 S.Ct. 37, 46 L.Ed.2d 40 (1975), quoted in American Bus Association v. United States, 627 F.2d 525, 529 (D.C. Cir.1980). 3 As Professor Davis puts it, "the problem is baffling." 2 K. Davis, Administrative Law Treatise 32 (2d ed. 1979). By virtue of Congress' silence with respect to this matter, it has fallen to the courts to discern the line through the painstaking exercise of, hopefully, sound judgment. Guardian Federal Savings & Loan Ass'n v. FSLIC, 589 F.2d 658, 667 (D.C.Cir.1978).

Despite the difficulty of the terrain, prior cases do provide some useful guideposts. In this circuit, we are particularly guided by American Bus. There, in speaking for the court, Judge McGowan identified "two criteria" that courts have used in their efforts to fathom the interpretative/legislative distinction:

First, courts have said that, unless a pronouncement acts prospectively, it is a binding norm. Thus ... a statement of policy may not have a present effect: "a 'general statement of policy' is one that does not impose any rights and obligations"....

The second criterion is whether a purported policy statement genuinely leaves the agency and its decisionmakers free to exercise discretion.

627 F.2d at 529 (quoting Texaco v. FPC, 412 F.2d 740, 744 (3d Cir.1969)). 4

In conducting our analysis of these two criteria, we consider and give some, albeit "not overwhelming," deference to an agency's characterization of its statement. Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 537 (D.C.Cir.1986). 5 As befits a principled exercise in interpretation, courts are to give far greater weight to the language actually used by the agency; we have, for example, found decisive the choice between the words "will" and "may." Compare American Bus, 627 F.2d at 532 (use of "will" indicates statement is in fact a binding norm) with Guardian Federal, 589 F.2d at 666 (use of "may" indicates statement is a "general statement of policy").

Applying these principles to the case at hand, we are persuaded that the FDA action levels are legislative rules and thus subject to the notice-and-comment requirements of section 553. While FDA

Page 947

now characterizes the action levels as policy statements, see, e.g., Supplemental Brief for Appellee at 7 ("In sum, action levels do not bind courts, food producers or FDA."), a variety of factors, when considered in light of the criteria set out in American Bus, indicate otherwise.

First. The language employed by FDA in creating and describing action levels suggests that those levels both have a present effect and are binding. Specifically, the agency's regulations on action levels explain an action level in the following way:

[A]n action level for an added poisonous or deleterious substance ... may be established to define the level of contamination at which food will be deemed to be adulterated. An action level may prohibit any detectable amount of substance in food.

21 C.F.R. Sec. 109.4 (1986) (emphasis added). 6 This language, speaking as it does of an action level "defin[ing]" the acceptable level and "prohibit[ing]" substances, clearly reflects an interpretation of action levels as presently binding norms. 7 This type of mandatory, definitive language is a powerful, even potentially dispositive, factor suggesting that action levels are substantive rules. Cf. Cathedral Bluffs, 796 F.2d at 538. Moreover, the regulations provide that an action level may appropriately be established whenever there exist the same conditions required to establish a formal tolerance, if, in addition, the "appropriateness" of the tolerance may change in the near future because, for example, of technological changes. 21 C.F.R. Sec. 109.6(c); see also id. Sec. 109.6(b) (requirements for establishing a tolerance). 8

Second. This view of action levels--as having a present, binding effect--is confirmed by the fact that FDA considers it necessary for food producers to secure exceptions to the action levels. A specific regulatory provision allows FDA to "exempt from regulatory action and permit the marketing of any food that is unlawfully contaminated with a poisonous or deleterious substance" if certain conditions exist. Id. Sec. 109.8(a). This language implies that in the absence of an exemption, food with aflatoxin contamination over the action level is "unlawful." This putatively unlawful status can derive only from the action level, which, again, indicates that the action level is a...

To continue reading