Farm-To-Consumer Legal Def. Fund v. Sebelius

• Decision Date: 18 August 2010
• Docket Number: No. C 10-4018-MWB,C 10-4018-MWB
• Citation: 734 F.Supp.2d 668
• Parties: FARM-TO-CONSUMER LEGAL DEFENSE FUND, Laurie Donnelly, Jennifer Allen, Dr. Joseph Heckman, Dane Miller, Cynthea Lee Rose, Eric Wagoner, Anne Cooper, and Michael Buck, Plaintiffs, v. Kathleen SEBELIUS, in her official capacity as Secretary, United States Department of Health and Human Services, United States Department of Health and Human Services, Margaret Hamburg, in her official capacity as Commissioner, United States Food and Drug Administration, and United States Food and Drug Administration, Defendants.
• Court: U.S. District Court — Northern District of Iowa

734 F.Supp.2d 668

FARM-TO-CONSUMER LEGAL DEFENSE FUND, Laurie Donnelly, Jennifer Allen, Dr. Joseph Heckman, Dane Miller, Cynthea Lee Rose, Eric Wagoner, Anne Cooper, and Michael Buck, Plaintiffs,
v.
Kathleen SEBELIUS, in her official capacity as Secretary, United States Department of Health and Human Services, United States Department of Health and Human Services, Margaret Hamburg, in her official capacity as Commissioner, United States Food and Drug Administration, and United States Food and Drug Administration, Defendants.

No. C 10-4018-MWB.

United States District Court,
N.D. Iowa,
Western Division.

Aug. 18, 2010.

734 F.Supp.2d 674

David G. Cox, Law Office of David G. Cox, Columbus, OH, Wallace L. Taylor, Cedar Rapids, IA, for Plaintiffs.

Martha A. Fagg, U.S. Attorney's Office, Sioux City, IA, Roger Joseph Gural, United States Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANTS' MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED

MARK W. BENNETT, District Judge.

TABLE OF CONTENTS

I. INTRODUCTION 675

A.	Factual Background	675
B.	Procedural Background	678

II. LEGAL ANALYSIS 681

A. Subject Matter Jurisdiction 681

1.	Justiciability requirements	681
2.	Nature of the defendants' challenge	682
3.	Standing	684

a.	Arguments of the parties	684
b.	Analysis	686

i.	Standing of the direct purchaser plaintiffs	687
ii.	Standing of the principal and agent	690
iii.	The producer plaintiff	690

c. Summary 692

4. Ripeness 692

a.	Arguments of the parties	692
b.	Analysis	693

i.	Fitness	693
ii.	Hardship	695

c. Summary 696

5. Foreclosure by Ewing 697

a.	Arguments of the parties	697
b.	Analysis	698

6. Summary 699

B. Failure To Exhaust Administrative Remedies 699

1.	Arguments of the parties	699
2.	Analysis	700

a.	The administrative exhaustion requirement	700
b.	The necessity of exhaustion of the present claims	701
c.	The prudence of exhaustion of questions ante	702

III. CONCLUSION 703

Got [raw] milk? This lawsuit presents the interesting question of the validity of Food and Drug Administration (FDA) regulations requiring "milk" in final package form for beverage use to be pasteurized or ultrapasteurized and prohibiting the delivery

734 F.Supp.2d 675

into interstate commerce of any milk in final package form for direct human consumption unless the product has been pasteurized. The plaintiffs are individuals who purchase "raw" (unpasteurized) milk for their personal consumption in states where the sale of raw milk is allowed, then transport the raw milk to states where the sale of raw milk is not allowed to consume it; the owner of a "virtual farmers' market," who transports raw milk ordered by market members from a state where the sale of raw milk is allowed to a state where the sale of raw milk is not allowed and distributes the raw milk to the members who ordered it; a farmer who sells raw milk, some of which is purchased by people living in other states in which the sale of raw milk is prohibited; and an organization representing the interests of such persons. The plaintiffs challenge the validity of the regulations on the various grounds, including that the regulations violate the plaintiffs' constitutional rights to travel and privacy. The immediate issues, however, raised in the defendants' motion to dismiss, are whether the plaintiffs have standing to assert their challenges to the regulations, whether their claims are ripe for judicial determination, whether the plaintiffs improperly bypassed administrative remedies before filing suit, and whether they state claims upon which relief can be granted.

I. INTRODUCTION

A. Factual Background

Because this matter is before the court on a motion to dismiss, the factual background is drawn primarily from the plaintiffs' Amended Complaint (docket no. 8). This statement of facts is supplemented, where appropriate, on a challenge to the court's subject matter jurisdiction, by facts drawn from affidavits in support of the plaintiffs' resistance to the defendants' motion to dismiss.

The court will describe six of the individual plaintiffs-Laurie Donnelly, Jennifer Allen, Dr. Joseph Heckman, Dane Miller, Cynthia Lee Rose, and Eric Wagoner, to the extent that his claims rely on the same conduct-as the "direct purchaser plaintiffs." All of the direct purchaser plaintiffs, with the exception of plaintiff Miller, allege that they reside in states where it is illegal to sell raw (unpasteurized) milk, even though it is legal to consume raw milk in those states.¹ They allege, further, that on one or more occasions, they each traveled to an adjacent state where it is legal to sell raw milk in final package form, at least under certain conditions, and legally purchased and obtained such raw milk. They allege that they then traveled back to their home states where they and/or their family members consumed the raw milk. Thus, these plaintiffs each were citizens of "no raw milk sales" states, bought raw milk in adjacent "raw milk sales" states, then took it home to consume in their "no raw milk sales" states. Each alleges that such conduct continues to this day.

Plaintiff Miller's allegations are somewhat different. Plaintiff Miller alleges that he is a citizen of Pennsylvania, where it is legal to sell raw milk, at least under certain conditions, but that he has relatives in Virginia, where it is not legal to sell raw milk. He alleges that, on more than one occasion, he drove from Virginia back to his home state of Pennsylvania, where he legally purchased and obtained raw milk in final package form from a licensed dairy

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farm. He alleges that he then traveled back to Virginia, in possession of the raw milk, where he and his relatives then consumed the raw milk. Thus, Miller is a citizen of a "raw milk sales" state, but he still traveled from a "no raw milk sales" state to a "raw milk sales" state to buy raw milk, then took it back to the "no raw milk sales" state to consume it. Miller also alleges that this activity continues to this day.

The allegations of two of the individual plaintiffs, Eric Wagoner and Anne Cooper, whom the court will describe as the "principal and agent plaintiffs," are different. In addition to his "direct purchaser" allegations, plaintiff Wagoner alleges that he is the owner of an internet-based "virtual farmers' market" based in Georgia that others may join by paying an annual membership fee. He alleges that it is illegal to sell raw dairy products in Georgia, but it is legal to sell them in South Carolina. He alleges that members of his virtual farmers' market residing in Georgia, including plaintiff Anne Cooper and himself, order raw milk in final package form for personal consumption from three dairies located in South Carolina who list their dairy products with the virtual farmers' market. Wagoner alleges that he drives to South Carolina to pick up the raw dairy products, returns with them to Georgia, and distributes them to the members of the virtual farmers' market who ordered them. Wagoner and Cooper allege that Wagoner was Cooper's agent to pick up the raw milk that she had ordered in South Carolina and to deliver it to her in Georgia. Wagoner alleges that the members pay the farmers for the products listed on the virtual farmers' market.

Wagoner alleges that, on October 15, 2009, he was driving from South Carolina to Georgia with about 110 gallons of raw milk in final package form ordered by members of his virtual farmers' market, but upon reaching Georgia, his truck was searched and seized and the raw milk in it was embargoed, without a warrant, by officials from Georgia. He alleges that, on October 19, 2009, he was ordered to and did destroy the 110 gallons of raw milk, including milk "owned" by himself and Cooper, by order of Georgia officials and the FDA, again without a warrant or other legal process.² The FDA counters that allegations that it ordered the destruction of the milk are "bizarre" and unsupported, because if the FDA, rather than state officials, had actually ordered the destruction of the milk as alleged, the FDA would have done so in an in rem seizure action, pursuant to the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 334, in which Wagoner would have had the opportunity to appear and object, but there is no evidence of any such action. The FDA does not offer any affidavits to counter Wagoner's version of these events, however, and apparently does not deny that a FDA agent was present at the destruction of Wagoner's load of raw milk.

Plaintiff Michael Buck, whom the court will describe as the "producer plaintiff," alleges that he owns and operates a dairy farm in South Carolina that is licensed by the State of South Carolina. He also alleges that he has held a retail raw milk license from the State of South Carolina since 2006. He alleges that it is legal to sell raw milk in South Carolina as long as the seller is either a licensed dairy farm or a licensed retail store. Buck alleges that approximately 25 % of his milk is sold in

734 F.Supp.2d 677

South Carolina as retail raw milk. He alleges that he sells only raw milk, and no other raw dairy products, on his farm and to four retail stores in South Carolina. Buck alleges that he has personal knowledge that people from North Carolina and Georgia, where it is illegal to sell raw milk for human consumption, purchase raw milk at his farm and at one or more of the retail stores where he sells his raw milk. Buck alleges that he has never had any sanctions or penalties levied against his dairy; he has never had to dump even a single load of milk since he has been in business; and, as far as he knows, there has never been any illness caused by the consumption of raw milk produced at his dairy.

Plaintiff Farm-to-Consumer Legal Defense Fund (the "Fund" or "FTCLDF") alleges that it is a non-profit organization organized under the laws of the State of Ohio, with its principal place of business in Falls Church, Virginia. The Fund alleges that it consists of over 1,900...