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Mickelsen Farms, LLC v. Animal And Plant Health Inspection Service

United States District Court, D. Idaho

March 20, 2018

MICKELSEN FARMS, LLC, et al., Plaintiffs,



         Before the Court in the above entitled matter are cross Motions for Summary Judgment filed by the parties in this action. (Dkt. 75, 84.) The Motions have been fully briefed and are ripe for the Court's consideration. Having reviewed the record herein, the Court finds the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the Motions shall be decided on the record before this Court without oral argument.


         Plaintiffs are a number of entities and individuals who farm potatoes in southeastern Idaho. In April of 2006, Pale Cyst Nematode (PCN), Globodera Pallida, [1] was detected in the soil of a number of fields that raised potato crops in eastern Idaho. As a result, the Animal and Plant Health Inspection Services (APHIS)[2] published an Interim Rule and later adopted a Final Rule which provided regulations for the designation and quarantining of fields in Idaho as well as Deregulation Protocols. The Idaho State Department of Agriculture (ISDA) adopted rules and procedures that parallel APHIS's and assisted APHIS in implementing its Interim and Final Rules.

         The Plaintiffs filed this action against the federal and state Defendants challenging the issuance and implementation of the Interim Rule and Final Rule. (Dkt. 1.)[3]Specifically, Plaintiffs claim the federal Defendants violated the Administrative Procedure Act (APA), 5 U.S.C. §§ 553, 701-706; the Plant Protection Act (PPA), 7 U.S.C. §§ 7701 and 7786; the Federal Advisory Committee Act (FACA), 5 U.S.C. App. II, §§ 1-16; the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-70; and the Tenth Amendment of the United States Constitution. As to the state Defendants, the Plaintiffs claimed the ISDA failed to comply with its legal obligations under the Idaho Plant Pest Act (Idaho PPA), Idaho Code §§ 22-2001 to 22-2023; the Idaho Administrative Procedures Act (Idaho APA), Idaho Code §§ 67-5101 to 67-5292; and Idaho's Rules Governing the PCN (Idaho PCN Rules), IDAPA 02.06.10. In general, Plaintiffs claim the state and federal Defendants' actions were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

         The Court previously granted the state Defendants' Motion to Dismiss. (Dkt. 35.) The Parties have also filed a Stipulation for Voluntary Dismissal of the action as brought by Plaintiffs Gerald and Helen Kelley, Craig V. and Andrea Kelly, Dan G. and Karen K. Eldredge, and Bohemian, LLC. (Dkt. 47.) The Plaintiffs and federal Defendants have now filed their cross Motions for Summary Judgment as to the remaining claims which the Court takes up herein. (Dkt. 75, 84.)


         Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure which provides, in pertinent part, that judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). Under Rule 56, summary judgment is mandated if the non-moving party fails to make a showing sufficient to establish the existence of an element which is essential to the non-moving party's case and upon which the non-moving party will bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the non-moving party fails to make such a showing, “there can be no ‘genuine issue of material fact, ' since a complete[] failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 323.

         In order to withstand a motion for summary judgment, a party

(1) must make a showing sufficient to establish a genuine issue of fact with respect to any element for which it bears the burden of proof; (2) must show that there is an issue that may reasonably be resolved in favor of either party; and (3) must come forward with more persuasive evidence than would otherwise be necessary when the factual context makes the non-moving party's claim implausible.

British Motor Car Distrib. v. San Francisco Auto. Indus. Welfare Fund, 883 F.2d 371, 374 (9th Cir. 1989) (citation omitted). When applying this standard, the court views all of the evidence in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Hughes v. United States, 953 F.2d 531, 541 (9th Cir. 1992).


         The Plant Protection Act (PPA) authorizes the Secretary of the United States Department of Agriculture (USDA) to adopt and/or issue regulations “to prevent the introduction of plant pests into the United States or the dissemination of plant pests within the United States.” 7 U.S.C. §§ 7711(a), 7712(c). The Secretary delegated that authority to APHIS, making APHIS responsible for the regulation and containment of PCN. 7 C.F.R. § 2.22(a). Under that authority, APHIS issued the Interim and Final Rules which quarantined certain infested fields and associated fields in Idaho where PCN was found, restricts the interstate movement of regulated articles from those quarantined areas, and provides Deregulation Protocols for quarantined fields. See 7 C.F.R. § 301.86; (RM 1, 438.) The claims against the federal Defendants in this case allege violations of the APA, PPA, FACA, NEPA, and the Tenth Amendment relating to their actions taken under the PPA.


         1. Violation of the APA's Rulemaking Requirements

         Plaintiffs argue APHIS violated the APA's rulemaking requirements with regard to the Deregulation Protocols, 7 C.F.R. §§ 301.86-3(d)(1) & (2), because APHIS never issued the protocol contemplated in the Final Rule to deregulate infested fields and the multiple iterations of the protocols for deregulating associated fields were never subject to public notice or comment. (Dkt. 75 at 12-14) (Dkt. 87 at 6-7.)[4] Defendants counter arguing the Deregulation Protocols were not subject to the rulemaking requirements and, therefore, did not violate the APA. (Dkt. 84 at 14) (Dkt. 89 at 5.)

         The APA establishes the notice and comment procedures federal administrative agencies must use when engaged in “rulemaking, ” which is defined as the process of “formulating, amending, or repealing a rule.” Perez v. Mortgage Bankers Ass'n, 135 S.Ct. 1199, 1203-04 (2015); see also Hemp Industries Ass'n v. Drug Enforcement Admin., 333 F.3d 1082, 1087-88 (9th Cir. 2003); 5 U.S.C. §§ 551(5), 553. Those procedures generally require agencies to: (1) publish a notice of the proposed rule in the Federal Register; (2) provide a period for interested persons to comment on the proposed rule, which will be considered by the agency prior to adopting the rule; and (3) publication of the final rule in the Federal Register. 5 U.S.C. § 553; see also Mora-Meraz v. Thomas, 601 F.3d 933, 939 (9th Cir. 2010).

         There are two types of rules under the APA: legislative rules and interpretive rules. Perez, 135 S.Ct. at 1203. The rulemaking procedures only apply to legislative rules, not interpretative rules. If a rule is “legislative, ” the agency must use the notice and comment procedure unless “it publishes a specific finding of good cause documenting why such procedures ‘are impracticable, unnecessary, or contrary to the public interest.'” Hemp Indus., 333 F.3d at 1087 (quoting 5 U.S.C. § 553(b)(B)). On the other hand, “interpretive rules, general statements of policy, or rules of agency organization, procedure or practice” are exempt from the rulemaking procedures. 5 U.S.C. § 553(b)(3)(A); Mora-Meraz, 601 F.3d at 939.[5] The exceptions to the notice and comment requirements are “narrowly construed and only reluctantly countenanced.” Alcaraz v. Block, 746 F.2d 593, 612 (9th Cir. 1984). Failure to implement the notice and comment procedure when required, invalidates the resulting regulation. See Paulsen v. Daniels, 413 F.3d 999, 1008 (9th Cir. 2005).

         Plaintiffs assert the Deregulation Protocols are legislative rules subject to the APA's rulemaking procedural requirements. (Dkt. 87 at 6-7.) Defendants argue the protocols are not legislative rules but, instead, general policy statements and, therefore, excluded from the APA's rulemaking procedures (Dkt. 89 at 5.)[6]

         A. Legislative Rules

         Legislative rules “create rights, impose obligations, or effect a change in existing law pursuant to authority delegated by Congress.” Hemp Indus., 333 F.3d at 1087 (internal citation omitted). Legislative rules trigger the notice and comment process because they have the “force and effect of law.” Perez, 135 S.Ct. at 1203 (citing Chrysler Corp. v. Brown, 441 U.S. 281, 302-303 (1979)); see also Erringer v. Thompson, 371 F.3d 625, 630 (9th Cir. 2004). A rule has the force and effect of law:

(1) when, in the absence of the rule, there would not be an adequate legislative basis for enforcement action;
(2) when the agency has explicitly invoked its general legislative authority; or
(3) when the rule effectively amends a prior legislative rule.

Hemp Indus., 333 F.3d at 1087(internal quotation marks and citation omitted). “If the answer to any of these questions is affirmative, ” the rule is legislative, not interpretive. Oregon v. Ashcroft, 368 F.3d 1118, 1133 (9th Cir. 2004) (internal quotation marks and citation omitted), aff'd sub nom. Gonzales v. Oregon, 546 U.S. 243 (2006).

         Interpretive rules, on the other hand, “merely explain, but do not add to, the substantive law that already exists in the form of a statute or legislative rule.” Hemp Indus., 333 F.3d at 1087 (internal citation omitted). The “critical feature” of interpretive rules “is that they are ‘issued by an agency to advise the public of the agency's construction of the statutes and rules which it administers.'” Perez, 135 S.Ct. at 1204 (quoting Shalala v. Guernsey Mem'l Hosp., 514 U.S. 87, 99 (1995)). Interpretive rules do not require notice and comment rulemaking, and “do not have the force and effect of law.” Id. (quoting Chrysler Corp., 441 U.S. at 302-03).

         The Deregulation Protocol at issue in this case is a legislative rule. The Interim Rule itself states that it “amends” the existing Domestic Quarantine Notices regulation “by adding a new subpart regulating PCN” pursuant to APHIS's authority under the PPA. (RM 444-45.) The Deregulation Protocol, therefore, has the force and effect of law because it changes existing law by adding new substantive requirements for the quarantining and deregulating of PCN infested and associated fields to be implemented by APHIS pursuant to its authority under the PPA. See e.g. Record Buck Farms, Inc. v. Johanns, 510 F.Supp.2d 868 (M.D. FL 2007) (Parties did not contest that a similar amendment to the domestic quarantine notices regulation, 7 C.F.R. § 301.75, was a legislative rule but, instead, disputing whether the good cause exception to the rulemaking requirement applied.). Contrary to the Defendants' argument, the Deregulation Protocols do not merely explain APHIS's interpretation of the PPA but, instead, are themselves the rules governing APHIS's implementation of the PPA with regard to PCN. The fact that the regulations leave final approval of the protocol to the Administrator does not make the regulations any less binding on those who are obligated to follow the protocol. See Nat. Mining Ass'n v. McCarthy, 758 F.3d 243, 251-51 (D.C. Cri. 2014) (“An agency action that purports to impose legally binding obligations or prohibitions on regulated parties-and that would be the basis for an enforcement action for violations of those obligations or requirements-is a legislative rule. An agency action that sets forth legally binding requirements for a private party to obtain a permit or license is a legislative rule.”)).

         As a legislative rule, APHIS was required to satisfy the APA's rulemaking notice and comment requirements that it provide: 1) publication of notice of the proposed rule, 2) a period for interested individuals to comment on the proposed rule, and 3) publication of the adopted rule not less than thirty days before its effective date. 5 U.S.C. §§ 533(b), (c), (d); Paulsen, 413 F.3d at 1008. Defendants have not asserted nor shown that they satisfied the notice and comment process. Therefore, summary judgment is granted in favor of Plaintiffs on this claim.

         B. General Policy Statements

         To qualify for the “statement of policy” exception to formal rulemaking, two requirements must be satisfied: (1) the policy “must operate only prospectively, ” and (2) the policy “must not establish a binding norm, or be finally determinative of the issues or rights to which [it is] addressed, but must instead leave officials free to consider the individual facts in the various cases that arise.” Mada-Luna v. Fitzpatrick, 813 F.2d 1006, 1013-14 (9th Cir. 1987).

         On the first factor, the parties appear to agree that the protocols are prospective. (Dkt. 87 at 7) (Dkt. 89 at 7.) The Court concurs. The Deregulation Protocols set forth the process APHIS will apply in order to contain PCN and operate prospectively by informing the public of the areas to be quarantined, how APHIS will regulate and deregulate PCN infested and associated fields in Idaho, and establish restrictions on the interstate movement of regulated articles from the quarantined area. (RM 1, 438.)

         Turning to the second factor - whether the deregulation protocol is binding/finally determinative or is instead discretionary - the parties are in disagreement. “The critical factor to determine whether a directive announcing a new policy constitutes a rule or a general statement of policy is the extent to which the challenged [directive] leaves the agency, or its implementing official, free to exercise discretion to follow, or not to follow, the [announced] policy in an individual case.” Mada-Luna, 813 F.2d at 1013 (internal quotation marks and citation omitted). “To the extent that the directive merely provides guidance to agency officials in exercising their discretionary powers while preserving their flexibility and their opportunity to make ‘individualized determination[s], ' it constitutes a general statement of policy.” Id. “In contrast, to the extent that the directive ‘narrowly limits administrative discretion' or establishes a ‘binding norm' that ‘so fills out the statutory scheme that upon application one need only determine whether a given case is within the rule's criterion, ' it effectively replaces agency discretion with a new ‘binding rule of substantive law.' In these cases, notice-and-comment rulemaking proceedings are required, as they would be for any other substantive rule, and they will represent the only opportunity for parties to challenge the policy determinations upon which the new rule is based.” Id.

         There is no dispute that the Deregulation Protocols are written in mandatory language. (Dkt. 84 at 21.) Despite that mandatory language, Defendants argue the protocols are not binding nor finally determinative; pointing to examples of APHIS's emails with individual farmers where it considered whether particular fields would be deregulated. (Dkt. 84 at 21-22.) The Court disagrees.

         The mandatory language of the Deregulation Protocols is binding on APHIS and finally determinative of whether a field will be deregulated. See Mada-Luna, 813 F.2d at 1014. Under the protocols, the removal of a field from quarantine is dependent on whether the field has been found to be free of PCN and meets the applicable quarantine protocol approved by the Administrator as sufficient to support removal of the field from quarantine. 7 C.F.R. § 301.86-3(d). The specific protocols to be approved is left to the Administrator and those protocols have evolved over time, but the Deregulation Protocol's mandatory language remains final and binding on APHIS. (DEREG 800-02.) That the Administrator has periodically changed the Deregulation Protocols, in part, in response to feedback from the public does not eliminate the fact that APHIS may not remove a field from quarantine unless the field has satisfied the applicable protocol and been found to be free of PCN. See 7 C.F.R. § 301.86-3(d).

         The examples pointed to by Defendants do not show the Deregulations Protocols are discretionary. The emails and communications between APHIS and individual farmers identified in the Administrative Record by Defendants instead had to do with whether the particular fields were properly subject to quarantine/regulation in the first instance; not whether they had satisfied the Deregulation Protocol and should be removed from quarantine. (DEREG 437-509) (DEREG 1467-68.) Those examples, therefore, do not show the protocols are discretionary because APHIS's decisions with regard to those fields were based on its application of the regulations to those fields, not any discretionary action on the part of APHIS.

         For these reasons, the Court concludes the Deregulation Protocols are not general statements of policy. They are instead legislative rules subject to the APA's rulemaking notice and comment requirements. Accordingly, the Court grants the Plaintiffs' summary judgment on this claim.

         2. Violation of the Federal Advisory Committee Act

         The Fourth Claim for Relief alleges APHIS violated FACA and the APA when it established and utilized the Technical Working Group (TWG) as an advisory committee. (Dkt. 1 at ¶¶ 119-127.) Defendants argue TWG is not subject to FACA because APHIS never established or utilized the group as a federal advisory committee under the statute. (Dkt. 84 at 8.) Plaintiffs maintain the opposite is true. (Dkt. 75 at 3-7) (Dkt. 87 at 1-5.)

         FACA imposes a number of procedural requirements on “federal advisory committees, ” which are defined to include “any committee, board, commission, council, conference, panel, task force, or other similar group, or any subcommittee or other subgroup thereof...which is...established or utilized by one or more agencies, …in the interest of obtaining advice or recommendations for…one or more agencies or officers of the Federal Government....” 5 U.S.C. App. II, § 3(2). Although this definition of an “advisory committee” is broad, the Supreme Court has cautioned that FACA was “not intended to cover every formal and informal consultation between ... an Executive agency and a group rendering advice.” Public Citizen v. United States Dep't of Justice, 491 U.S. 440, 452 n. 8 (1989). Instead, the “Supreme Court has given a narrow interpretation to the words ‘established' and ‘utilized.'” Idaho Wool Growers Ass'n v. Schafer, 637 F.Supp.2d 868, 878 (D. Idaho 2009) (citing Heartwood, Inc. v. United States Forest Serv., 431 F.Supp.2d 28, 34 (D.D.C. 2006) (quoting Public Citizen, 491 U.S. at 457-58)).

         “A federal advisory committee is ‘established' by the federal government when a federal government entity forms an advisory committee for the purpose of obtaining advice or recommendations from that committee.” Washington Toxics Coal. v. United States E.P.A., 357 F.Supp.2d 1266, 1271 (W.D.Wa. 2004) (citing Aluminum Co. of Am. v. Nat'l Marine Fisheries Serv., 92 F.3d 902, 905 (9th Cir. 1996); Food Chem. News v. Young, 900 F.2d 328, 332-33 (D.C. Cir. 1990)). A committee is “utilized” when a federal agency exercises “strict ‘management or control” over an advisory committee. Id. (quoting Public Citizen, 491 U.S. at 440, 457-58). In determining if a committed is “utilized” courts inquire as to “whether the committee in question is ‘purely private, ' whether it accepted any public funds, whether federal agencies or officials ‘actually' managed or controlled the committee, and whether it was formed ‘for the explicit purpose of furnishing advice to the Government.'” Id. (quoting Public Citizen, 491 U.S. at 460; Aluminum Co. of Am., 92 F.3d at 906).

         The Ninth Circuit has further refined the definition of a FACA “advisory committee” as “a formal group of a limited number of private citizens who are brought together to give publicized advice as a group.” Aluminum Co. of Am., 92 F.3d at 906 (quoting Ass'n of Am. Physicians & Surgeons, Inc. v. Clinton, 997 F.2d 898, 915 (D.C. Cir. 1993) (The committee must ...

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