New York v. U.S. Dep't of Agric.

Citation454 F.Supp.3d 297
Decision Date16 April 2020
Docket Number1:19-cv-2956 (ALC)
Parties States of NEW YORK, California, Illinois, Minnesota, New Mexico, and Vermont, and the District of Columbia, Plaintiff, v. UNITED STATES DEPARTMENT OF AGRICULTURE, United States
CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

Matthew Colangelo, Max Shterngel, Monica Blong Wagner, Samantha Liskow, Office of the New York State Attorney General, New York, NY, for Plaintiff State of New York.

Julia Harumi Mass, California Department of Justice, Oakland, CA, for Plaintiff State of California.

Sarah A. Kogel-Smucker, Kathleen Konopka, Office of the Attorney General for the District of Columbia, Valerie M. Nannery, Washington, DC, for Plaintiff District of Columbia.

Jamie Davidson Getz, Aaron Scott Chait, Illinois Attorney General's Office, Chicago, IL, for Plaintiff State of Illinois.

Arastu Kabeer Chaudhury, Casey Kyung-Se Lee, United States Attorney's Office, New York, NY, for United States Department of Agriculture, United States Department of Agriculture Food and Nutrition Service, Sonny Perdue.

OPINION AND ORDER

ANDREW L. CARTER, JR., United States District Judge:

Plaintiff-States of New York, California, Illinois, Minnesota, New Mexico, and Vermont, and the District of Columbia brought this action against the United States Department of Agriculture, the United States Department of Agriculture and Food and Nutrition Service, and Sonny Perdue in his official capacity as Secretary of Agriculture (together, "Defendants" or "USDA"), claiming that the promulgation of an Agency rule in 2018—which provided schools flexibility in complying with certain sodium and whole grain requirements previously adopted in a 2012 rule—violated substantive and procedural requirements of the Administrative Procedure Act ("APA"). (ECF No. 44 or "Am. Compl."). Defendants now move to dismiss on jurisdictional grounds (ECF Nos. 41, 42 or "Def. Br."). For the following reasons, that motion is DENIED.

I. Factual Background

The National School Lunch Act and the Child Nutrition Act require the Defendants to ensure that school-served meals meet national nutritional requirements. (Am. Compl. at ¶ 8). "As initially enacted, both Acts require USDA to prescribe nutritional requirements ‘on the basis of tested nutritional research.’ " (Id. ) (quoting 42 U.S.C §§ 1758(a)(1)(A), 1773(e)(1)(A) ). Congress has consistently reinforced that mandate, most recently in 2010, "by requiring USDA to update nutritional requirements based on a 2009 study by the Food and Nutrition Board, which is part of the National Academy of Sciences." (Id. at ¶¶ 8, 49) (citing Pub. L. No. 111-296, § 201) (codified at 42 U.S.C. § 1753(b)(3)(A) ).

"Federal funding for school meals is provided in the form of reimbursements for each meal served that meets the nutritional requirements in USDA's regulations." (Id. at ¶ 31) (citing 7 C.F.R. §§ 210.7, 220.9 ). "Meals that are served free or at a reduced price to children from lower-income families are reimbursed at higher rates." (Id. ) (citing 83 Fed. Reg. 34,105 -07 (July 19, 2018); 7 C.F.R. §§ 210.4(b), 220.9(b) ). Additionally, USDA "directly purchases food for school meals (‘USDA Foods’) and provides it to school food authorities, often through a state agency. Each school food authority receives an annual allotment to procure USDA Foods." (Id. at ¶ 32) (citing 7 C.F.R. § 250.56(c) ); see 7 C.F.R. § 250.56(a)(b).

In 2012, the USDA promulgated a rule pursuant to the statutory mandates of Congress establishing nutritional standards for school meals based on the Dietary Guidelines for Americans and the 2009 Nutrition Board Study. (Id. at ¶¶ 50–51) (citing 77 Fed. Reg. 4088 (Jan. 26, 2012) ) (codified at 7 C.F.R. §§ 210.10, 220.8 ) ("2012 Rule"). "Before issuing the 2012 Rule, USDA had issued a proposed rule in 2011 and considered 133,268 public comments on the proposed rule." (Id. at ¶ 52) (citing 77 Fed. Reg. at 4089 ). Of particular relevance here, the 2012 Rule restricted sodium and increased the whole grains provided in students’ lunches. With respect to sodium, the Rule required schools to reduce the sodium in school meals over a ten-year period, with ultimate goals of a roughly 25% reduction in breakfasts and a roughly 53% reduction in lunches (Sodium Target 3). Schools had to meet two intermediate sodium targets (Sodium Target 1 and Sodium Target 2) within that ten-year period at the two- and four-to-five-year marks. (Id. at ¶¶ 59–60); 77 Fed. Reg. at 4097–98, 4147, 4155–57.

By the 2014-2015 academic year, schools needed to decrease sodium levels by roughly 5 to 7% in breakfasts and by roughly 10% in lunches (Sodium Target 1); 77 Fed. Reg. at 4097–98, 4146, 4155. By the 2017-2018 academic year, schools were required to reduce breakfast sodium levels by roughly 15 to 17% and lunch sodium levels by about 32 percent (Sodium Target 2). Id. "The compliance date for the final sodium target was school year 20222023" (Sodium Target 3). (Am. Compl. at ¶ 61).

The 2012 Rule also required that for the 2012-2013 and 2013-2014 school years, half of the grain products offered by schools at breakfast and lunch needed to be whole-grain rich, meaning comprised of at least 51% whole grains. (Am. Compl. at ¶ 66) (citing 77 Fed. Reg. at 4093, 4144–45, 4155–56 ). In the 2014-2015 year and beyond, schools could serve only whole-grain rich items. (Id. at ¶ 67) (citing 77 Fed. Reg. at 4093, 4144–45, 4156 ).

Beginning in late 2011, before the 2012 Rule was even finalized, Congress provided schools with flexibility in meeting the proposed sodium and whole grain requirements. In the Consolidated and Further Continuing Appropriations Act , Congress prohibited the implementation of a sodium reduction greater than the parameters of the 2012 Rule's Target I, or two-year target. See Consolidated and Further Continuing Appropriations Act , 2012, Pub. L. 112–55, § 743(2) (Nov. 18, 2011). Congress renewed this prohibition multiple times, limiting the sodium reduction requirement to Target 1 throughout the 20172018 school year. See Consolidated and Further Continuing Appropriations Act , 2015, Pub. L. 113–235 § 752 (Dec. 16, 2014); Consolidated and Further Continuing Appropriations Act, § 733(b) (Dec. 18, 2015) ("2016 Act"); Consolidated and Further Continuing Appropriations Act , 2017 Pub. L. 115-31 § 747(b) (May 5, 2017) ("2017 Act"); Consolidated and Further Continuing Appropriations Act , 2018 Pub. L. 115-56 div. D § 101(a) (Sept. 8, 2017) ("2018 Act"). Similarly, in 2014, Congress instructed that States could grant an exemption to the only whole grains requirement where a school could demonstrate hardship "in procuring specific whole grain products which are acceptable to the students and compliant with the whole-grain-rich requirements," Pub. L. 113-235 § 751. Under the exemption, half, as opposed to all of the school's grains products were required to be whole-grain rich. Id. The exemption program was set to expire after the 2017-2018 school year.

In 2017, the USDA promulgated an interim final rule extending additional deadlines present in the 2012 Rule. (Am. Compl. at ¶ 74) (citing 82 Fed. Reg. 56,703 (Nov. 30, 2017) ). The 2017 Interim Rule extended the Sodium Target 1 requirement through the academic year of 2018-19, meaning schools would not be required to comply with Target 2 until the 2019-20 school year. (Id. at ¶ 75) (citing 82 Fed. Reg. 56,704 ) (codified at 7 C.F.R. §§ 210.10(f)(3), 220.8(f)(3) ). The product waiver program for the whole grain mandate was also extended through the school year 2018-2019. (Id. at ¶ 76) (citing 82 Fed. Reg. at 56,704 ) (codified at 7 C.F.R. §§ 210.10(c), 220.8(c) ).

The USDA did not provide the public with notice or an opportunity to comment until after the 2017 Interim Final Rule had been issued. (Id. at ¶ 77–78).

In 2018, the USDA issued a final rule granting schools flexibility in reducing their sodium content and increasing whole grain availability. (Id. at ¶ 79) (citing Child Nutrition Programs: Flexibilities for Milk, Whole Grains, and Sodium Requirements , 83 Fed. Reg. 63, 775 (Dec. 12, 2018) ) (codified at 7 C.F.R. § 210.10 ; 7 C.F.R. § 220.8 ) (the "2018 Rule"). The 2018 Rule eliminated the 2012 Rule's final sodium reduction targets, which would have gone into effect in the 20222023 school year, and delayed by five years the implementation of Sodium Target 2 requirements, which would have gone into effect in the 2018 school year. (Id. at ¶¶ 80, 87) (citing 83 Fed. Reg. 63,776, 63-787 ). In other words, schools only had to satisfy Target 1's requirements until the beginning of the 2024–25 academic year, when Target 2 requirements would take effect.

The 2018 Rule also relaxed significantly the 2012 Rule's whole grains framework. The new rule eliminated entirely the requirement that schools ultimately serve only whole-grain-rich products, leaving in place the requirement that half of a school's weekly grain products be whole-grain rich. (Id. at ¶ 95) (citing 83 Fed. Reg. at 63,776 ). Again, under the 2012 Rule, schools were required to begin providing 100% whole-grain-rich products beginning in the 2014-2015 academic year. ( Id. )

The 2018 Rule sets minimum nutritional standards. States are free to impose additional or stricter requirements. See 7 C.F.R. § 210.19(e).

II. Procedural Background

The Plaintiffs filed their two-count complaint against the USDA and other Defendants on April 3, 2019. (ECF No. 1). They amended their complaint on September 16, 2019. (ECF No. 44). The amended complaint claims first, that Defendants violated the APA because the 2018 Rule was promulgated without notice and comment, and thus, its provisions should be held unlawful and set aside pursuant to 5 U.S.C. § 706(2)(D). (Am. Compl. at ¶¶ 138–44). Second, Plaintiffs claim that the provisions in the 2018 Rule eliminating the final sodium target, delaying compliance with sodium target 2, and cutting in half the whole-grain-rich requirement, are inconsistent with the goals of the most...

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