Humane Soc'y of the U.S. v. U.S. Dep't of Agric.

• Decision Date: 22 July 2022
• Docket Number: 20-5291
• Parties: HUMANE SOCIETY OF THE UNITED STATES, et al., Appellants v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

41 F.4th 564

HUMANE SOCIETY OF THE UNITED STATES, et al., Appellants

v.UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Appellees

No. 20-5291

United States Court of Appeals, District of Columbia Circuit.

Argued April 20, 2022

Decided July 22, 2022

Caroline A. Flynn argued the cause for appellants. With her on the briefs were Ralph E. Henry, L. Allison Herzog, Roman Martinez, and Julia A. Hatcher.

H. Thomas Byron III, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, and Sushma Soni, Attorney.

Before: Tatel^* , Millett, and Rao, Circuit Judges.

Dissenting opinion by Circuit Judge Rao.

Tatel, Circuit Judge:

At the culmination of a five-month rulemaking, the Department of Agriculture announced a final rule designed to protect show horses from abuse. As required by the Federal Register Act, the agency transmitted the signed rule to the Office of the Federal Register, which made it available for public inspection. But on the day President Trump took the oath of office, his Chief of Staff directed executive agencies to withdraw all pending rules. The question in this case is whether an agency must provide notice and an opportunity for comment when withdrawing a rule that has been filed for public inspection but not yet published in the Federal Register. We hold that it must.

I.

The rule at issue in this case marks the latest effort in a fifty-year campaign to end the "soring" of show horses. To sore a horse means to cut, burn, or otherwise inflict pain on its legs to alter its natural gait. This form of abuse became a common method to "create[ ] artificially" the "distinctive ‘walk’ " of Tennessee walking horses popular in exhibitions without laborious and expensive training. H.R. Rep. No. 91-1597, at 2 (1970).

In 1970, Congress enacted the Horse Protection Act to bar the showing or sale of any horse subjected to a "cruel or inhumane method or device" "for the purpose of affecting its gait." Pub. L. No. 91-540, § 2, 84 Stat. 1404. The statute sought both to ensure humane treatment of horses and to prevent unscrupulous trainers from "compet[ing] unfairly" with those who opted to train their horses rather than torment them. Id. § 3. It directed the Secretary of Agriculture to conduct inspections as necessary to enforce these prohibitions. Id. § 5.

The 1970 Act did little to abate mistreatment. In particular, the "limited resources available to the Department of Agriculture" allowed it to inspect horses at only a handful of the several thousand exhibitions each year. H.R. Rep. No. 94-1174, at 5 (1976).

To bolster the Department's enforcement capabilities, Congress amended the Horse Protection Act in 1976, authorizing the agency to issue regulations for the appointment of private inspectors at horse exhibitions. Pub L. No. 94-360, § 5, 90 Stat. 915. Exercising this authority, the Department established a system of "designated qualified persons"—inspectors selected by management to inspect horses at their shows. Definition of Terms and Certification and Licensing of Designated Qualified Persons, 44 Fed. Reg. 1,558, 1,562 –63 (Jan. 5, 1979). Program regulations permitted horse industry organizations, after obtaining agency certification, to license designated qualified persons without direct agency training or oversight. Id. at 1,563. By appointing a designated qualified person to inspect horses at an exhibition, the exhibition's management fulfilled its "responsib[ility] for identifying all horses that are sore." Prohibition Concerning Exhibitors of Horses, 44 Fed. Reg. 25,172, 25,182 (Apr. 27, 1979).

Placing horse industry groups in charge of inspections proved ineffective, and soring continued apace. In 2010, the Department of Agriculture's Office of the Inspector General published a report finding that the "current program for inspecting show horses for abuse is not adequate to ensure that these animals are not being sored." U.S. Department of Agriculture Office of the Inspector General, Audit Report 33601-2-KC, Animal and Plant Health Inspection Service Administration of the Horse Protection Program and the Slaughter Horse Transport Program 10 (Sept. 2010). Because designated qualified persons were beholden to "the horse show organizers who employ[ed] them," they had "a direct conflict of interest with enforcing the law" and often overlooked violations. Id. at 10–11. The OIG report recommended that the Department abolish the designated-qualified-person system and "establish by regulation that inspectors will be independent, USDA-accredited veterinarians." Id. at 17.

Under increasing pressure following the OIG report, the Department published notice of a proposed rule under which it would assume direct control of inspector licensure and training consistent with the report's recommendations. Licensing of Designated Qualified Persons and Other Amendments, 81 Fed. Reg. 49,112 (July 26, 2016). The Department held five public hearings, extended the rule's comment period, and ultimately received over 130,000 written comments. See 81 Fed. Reg. 65,307 (Sept. 22, 2016).

On January 11, 2017, the Department posted on its website a signed final rule that substantially adhered to its initial proposal along with a press release announcing that it had "announced a final rule" that "will be publish[ed] in the Federal Register in the coming days." The rule provided that some of its provisions would become effective thirty days after publication while others would take effect the next year. The Department then transmitted the rule to the Office of the Federal Register (OFR) for publication. Following the internal processing required by OFR regulations, OFR scheduled the rule for publication and made it available for public inspection on January 19, 2017.

The next day, the newly inaugurated President's Chief of Staff issued a memorandum directing all executive agencies to "immediately withdraw" "regulations that have been sent to the OFR but not published in the Federal Register." Regulatory Freeze Pending Review, 82 Fed. Reg. 8,346, 8,346 (Jan. 24, 2017). Pursuant to that directive, the Department withdrew the rule from publication and took no further action on the rulemaking.

The Humane Society filed suit along with four of its members challenging the rule's withdrawal. It principally claims that the Department unlawfully repealed the rule without notice and comment or the reasoned decisionmaking that the Administrative Procedure Act requires. The district court dismissed, agreeing with the government that a rule becomes final only upon Federal Register publication. Humane Society of the United States v. Department of Agriculture , 474 F. Supp. 3d 320, 330–31 (D.D.C. 2020). The district court also rejected the Humane Society's alternative argument that OFR violated its own regulations. Our review is de novo. See Safari Club International v. Jewell , 842 F.3d 1280, 1285 (D.C. Cir. 2016) (reviewing de novo questions of subject matter jurisdiction and failure to state a claim).

II.

We can quickly dispense with the government's argument that the Humane Society and its members lack Article III standing to challenge the rule's withdrawal. "As the Supreme Court explained in Lujan v. Defenders of Wildlife , to establish constitutional standing, plaintiffs must satisfy three elements: (1) they must have suffered an injury in fact that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical’; (2) the injury must be ‘fairly traceable to the challenged action of the defendant’; and (3) ‘it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.’ " NB ex rel. Peacock v. District of Columbia , 682 F.3d 77, 81 (D.C. Cir. 2012) (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). An organization asserting standing on its own behalf must meet the same standard, demonstrating " ‘concrete and demonstrable injury to [its] activities[ ]’ " beyond " ‘a mere setback to [its] abstract social interests.’ " PETA v. Department of Agriculture , 797 F.3d 1087, 1093 (D.C. Cir. 2015) (quoting Equal Rights Center v. Post Properties, Inc. , 633 F.3d 1136, 1138 (D.C. Cir. 2011) ).

The Humane Society and its members easily surmount this bar. Each alleges a concrete, pecuniary injury. In its complaint, the Humane Society alleges that, absent a more rigorous inspection regime, it must "redirect its limited time and resources away from existing horse protection work to identify, investigate, publicize and counteract continuing soring activities." See id. at 1094 (organization suffers injury in fact when "the agency's action or omission to act injured the organization's interest" and "the organization used its resources to counteract that harm" (cleaned up)). And the Humane Society's members allege precisely the competitive harm Congress sought to eliminate with the Horse Protection Act: unable to compete with trainers who sore their horses with impunity, the individual plaintiffs have abandoned equestrian activities including exhibition and commercial training. See 15 U.S.C. § 1822 ("The Congress finds and declares that ... horses shown or exhibited which are sore, where such soreness improves the performance of such horse, compete unfairly with horses which are not sore."). "We repeatedly have held that parties suffer constitutional injury in fact when agencies lift regulatory restrictions on their competitors or otherwise allow increased competition." Louisiana Energy & Power Authority v. FERC , 141 F.3d 364, 367 (D.C. Cir. 1998).

To plead traceability, a plaintiff seeking to enforce procedural rulemaking requirements must demonstrate only "a causal relationship between the final agency action and the alleged injuries." Mendoza v. Perez , 754 F.3d 1002, 1010 (D.C. Cir. 2014). The Humane Society and its members have done just that by...