AMERICAN MEAT v. United States Dept. of Agriculture

• Decision Date: 03 July 1980
• Docket Number: Civ. A. No. 79-986-N.
• Parties: AMERICAN MEAT INSTITUTE et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE, Defendant, and National Turkey Federation et al., Defendants-Intervenors.
• Court: U.S. District Court — Eastern District of Virginia

496 F. Supp. 64

AMERICAN MEAT INSTITUTE et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE, Defendant and National Turkey Federation et al., Defendants-Intervenors.

Civ. A. No. 79-986-N.

United States District Court, E. D. Virginia, Norfolk Division.

July 3, 1980.

H. Woodrow Crook, Jr., Smithfield, Va., J. Stanley Stroud, James R. Henderson, Mayer, Brown & Platt, Washington, D. C., James W. Gladden, Jr., Mayer, Brown & Platt, Chicago, Ill., for plaintiffs.

Justin W. Williams, U. S. Atty., Norfolk, Va., Alice Daniel, William Z. Elliott, Dept. of Justice, Daniel Marcus, Marshall M. Marcus, U.S. Dept. of Agriculture, Washington, D. C., for defendant.

John M. Hollis, Willcox, Savage, Lawrence, Dickson & Spindle, Norfolk, Va., Philip C. Olsson, Richard L. Frank, Olsson & Frank, Washington, D. C., for defendants-intervenors.

MEMORANDUM OPINION

KELLAM, District Judge.

`The time has come,' the Walrus said `To talk of many things Of shoes—and ships—and sealing wax— Of cabbages—and kings— And why the sea is boiling hot— And whether pigs have wings.'

Lewis Carroll, Through the Looking Glass, Chapter IV

This matter comes before the Court on the cross motions for summary judgment filed by plaintiffs and defendant Department of Agriculture.¹ The plaintiffs in this case challenge the lawfulness of a final regulation of the USDA, alleging that its adoption was contrary to USDA's authority and was arbitrary, capricious and an abuse of discretion. The plaintiffs ask the Court to declare the regulation unlawful and to permanently enjoin the USDA from issuing any approval for any poultry product label bearing the term "Turkey Ham."

I.

The authority of this Court to set aside agency action is limited by the strictures of the Administrative Procedure Act, 5 U.S.C. §§ 701-706. To be annulled by this Court, the USDA regulation at issue must be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" or be "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." Id. at § 706(2)(A), (C). While this Court cannot substitute its judgment for that of the agency, the agency must fully explicate its course of inquiry, its analysis, and its reasoning. Tanners Council of America, Inc. v. Train, 540 F.2d 1188, 1191 (4th Cir.1976). Furthermore, grounds relied upon by the agency must be clearly disclosed in and sustained by the record. Id.

The Court is and ought to be reluctant to review and interfere with the Secretary's administration of the Act in question, but Congress has placed that burden on the courts. The courts must accept that duty and responsibility. The existence of a well explained administrative practice does not relieve the court of its "responsibility to determine whether that practice is consistent with the agency's statutory authority." Securities and Exchange Commission v. Sloan, 436 U.S. 103, 98 S.Ct. 1702, 1712, 56 L.Ed.2d 148 (1978). A part of the responsibility of the Court is to determine whether the construction has a reasonable basis in law. Sloan case, supra.

Substantial deference is to be accorded the determinations made by the agency charged with the administration of Acts of Congress. Querne v. Mandley, 436 U.S. 725, 98 S.Ct. 2068, 56 L.Ed.2d 658 (1978). But, in order for an agency interpretation of a statute being administered by it to be granted deference, it must be consistent with the constitutional purpose. Morton v. Ruiz, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974). Courts need not defer to the administrative construction or interpretation of a statute where there are compelling indications that such construction is wrong. Espinoza v. Farah Manufacturing Co., Inc., 414 U.S. 86, 94 S.Ct. 334, 38 L.Ed.2d 287. Courts are not bound to give effect to administrative regulations interpreting a statute, although varying degrees of deference are accorded to administrative interpretations, such as consistency of the agency's position. Batterton v. Francis, 432 U.S. 416, 97 S.Ct. 2399, 53 L.Ed.2d 448 (1977). An administrative construction of the legislation governing the agency's operation and authority "is only one input in the interpretational equation." Sloan case, supra. On these terms, we now review the specific regulation which plaintiffs challenge.

II.

Since 1975, the Department of Agriculture has permitted certain cured poultry products, fabricated from turkey thigh meat, to be labeled as "Turkey Ham" without further qualification. These products are processed with the addition of curing ingredients, such as sodium nitrate, which may impute to them an appearance and taste resembling that of cured ham. The turkey products are shaped and packaged in a number of different ways, including those of customary ham rolls and ovals and of standard sandwich slices.² The USDA decision to permit the "Turkey Ham" labeling was apparently based on the opinion that the word "ham," when prefixed by the species name of an animal, refers to the hind limb of that animal. The Poultry Products Inspection Act³ does not define the word "ham." Rather, the Department's view of the meaning of that word has been based upon the following departmental regulation:

The word "ham," without any prefix indicating the species of animal from which derived, shall be used in labeling only in connection with the hind legs of swine.⁴

9 CFR 317.8(b)(13).

The American Meat Institute and the National Port Producers Council petitioned the Department of Agriculture to restrict the use of the word "ham" to the labeling of products prepared from the hind legs of swine.⁵ The Department thereupon proposed that standards be adopted for products made from cured turkey thigh meat and that those products be labeled as "Turkey Ham," with the contiguous qualifying statement "Cured Turkey Thigh Meat." Following the submittal of various comments concerning the proposed labeling, the Secretary issued a Final Rule amending the poultry products regulations in accordance with the proposal. 9 CFR § 381.171 (1980), 44 Fed.Reg. 51190 (Aug. 31, 1979).

III.

In the Congressional statement of findings of the Poultry Products Inspection Act,⁶ the Congress recognized that unwholesome, adulterated or misbranded poultry products are injurious to consumers, producers and processors of poultry products, and the public welfare. 21 U.S.C. § 451. The Congress therefore provided for the inspection and regulation of poultry products by the Department of Agriculture. For purposes of the Act, the term "misbranded" applies, among other circumstances:

(1) if its labeling is false or misleading in any particular;

(2) if it is offered for sale under the name of another food;

(3) if it is an imitation of another food, unless its label bears, in type of uniform size and prominence, the word "imitation" and immediately thereafter, the name of the food imitated.

21 U.S.C. § 452. The powers and responsibilities of the Secretary of Agriculture with regard to false or misleading labeling are provided in 21 U.S.C. § 457:

(b) The Secretary, whenever he determines such action is necessary for the protection of the public, may prescribe: (1) the styles and sizes of type to be used with respect to material required to be incorporated in labeling to avoid false or misleading labeling in marking and labeling any articles or poultry subject to this chapter; (2) definitions and standards of identity or composition or articles subject to this chapter . . ..

(c) No article subject to this chapter shall be sold or offered for sale by any person in commerce, under any name or other marking or labeling which is false or misleading, or in any container of a misleading form or size, but established trade names and other marking and labeling and containers which are not false or misleading and which are approved by the Secretary are permitted.

(d) If the Secretary has reason to believe that any marking or labeling or the size or form of any container in use or proposed for use with respect to any article subject to this chapter is false or misleading in any particular, he may direct that such use be withheld unless the marking, labeling, or container is modified in such manner as he may prescribe so that it will not be false or misleading.

Before approving a poultry product label, it is necessary that the Secretary make sufficient inquiry so as to help ensure that the label not be false or misleading. See Community Nutrition Institute v. Butz, 420 F.Supp. 751 (D.D.C.1976). Such inquiry is especially important where there exists an obvious and inherent propensity of the proposed label to mislead and confuse a substantial number of consumers, as with a label for "Turkey Ham."

The materials and evidence before the Secretary could only have led him to conclude that the proposed label "Turkey Ham-Cured Turkey Thigh Meat" is misleading to a substantial number of consumers. According to the Secretary's own count, a clear majority of the comments received were in opposition to the rule proposal. There were 553 submittals received by the Secretary, representing the views of 854 individuals and organizations. Of those individuals and organizations, 369 expressed support for the proposal, 481 were in opposition to the proposal,⁷ three were uncommitted, and one was a recorded duplicate. A summary of the comments was published in conjunction with the Final Rule. See 44 Fed.Reg. 51187, 51188 (Aug. 31, 1979).

Because so many of the comments received expressed opposition to the proposed label, the Secretary was on notice that a serious problem of misbranding might exist. No effort was made, however, to gather any reliable evidence that the label "Turkey Ham-Cured Turkey Thigh Meat" would not mislead a substantial number of consumers into believing the product might contain at least some pork. The Secretary was in possession of the results of two consumer surveys, but neither of those surveys tested consumer...