Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-13-05293/USCOURTS-caDC-13-05293-0/pdf.json

Parties Involved:
Harvey Dillenburg
Appellee
Humane Society of the United States
Appellant
Iowa Citizens for Community Improvement
Appellee
Thomas J. Vilsack
Appellee

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 7, 2015 Decided August 14, 2015 

No. 13-5293 

HUMANE SOCIETY OF THE UNITED STATES, 

APPELLANT

HARVEY DILLENBURG AND IOWA CITIZENS FOR COMMUNITY 

IMPROVEMENT, 

APPELLEES

v. 

THOMAS J. VILSACK, SECRETARY OF THE U.S. DEPARTMENT 

OF AGRICULTURE, 

APPELLEE

Consolidated with 13-5307 

Appeals from the United States District Court 

for the District of Columbia 

(No. 1:12-cv-01582) 

Matthew E. Penzer argued the cause for appellants. With 

him on the briefs was Jonathan R. Lovvorn. Ralph E. Henry

entered an appearance. 

Abby C. Wright, Attorney, U.S. Department of Justice, 

argued the cause for appellee. With her on the brief were 

USCA Case #13-5293 Document #1567874 Filed: 08/14/2015 Page 1 of 11
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Ronald C. Machen Jr., U.S. Attorney at the time the brief was 

filed, and Scott R. McIntosh, Attorney. 

Before: GRIFFITH, SRINIVASAN and PILLARD, Circuit 

Judges. 

Opinion for the Court filed by Circuit Judge PILLARD. 

PILLARD, Circuit Judge: The plaintiffs, a pork producer 

named Harvey Dillenburg and two animal welfare 

organizations who count pork producers among their 

members, claim that the National Pork Board has 

misappropriated millions of dollars from a fund for pork 

promotion into which pork producers are required to pay. 

The plaintiffs filed suit in federal district court and the court 

dismissed their claim for a lack of standing. We reverse. 

I. 

The National Pork Board is a quasi-governmental entity 

responsible for administering a federal regulatory scheme 

known as the “Pork Order.” See 7 U.S.C. § 4808; see also 

7 C.F.R. Part 1230. The Order implements the Pork Act, 

7 U.S.C. §§ 4801-19, the purpose of which is to promote pork 

in the marketplace, see 7 U.S.C. § 4801(b)(1). The Board 

strengthens, maintains, develops, and expands markets for 

pork and pork products through research and consumer 

information campaigns. In exchange for the Board’s efforts 

on behalf of their industry, pork producers pay the Board a 

special assessment on each hog they import or sell. See 

7 C.F.R. § 1230.71(b). 

In 2006, the Board, with the approval of the Secretary of 

the Department of Agriculture, bought four trademarks 

associated with the slogan Pork: The Other White Meat

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(hereinafter “the slogan” or “the mark”) from the National 

Pork Producers Council, an industry trade group, for $60 

million.1

 The payment terms provide that the Board will pay 

the Council $3 million annually for twenty years. The Board 

can terminate the payments at any time with one year’s 

notice, in which case ownership of the phrase reverts back to 

the Council. Five years after buying the mark, the Board 

replaced it with a new motto, Pork: Be Inspired. Now the 

Board keeps the initial slogan around as a “heritage brand” 

that it does not feature in its advertising. 

The plaintiffs claim that the Board did not buy the slogan 

for its value as a marketing tool. They allege that the Board 

used the purchase of the slogan as a means to cut a sweetheart 

deal with the Council to keep the Council in business and 

support its lobbying efforts. They maintain that the Board 

overpaid for the slogan and that the Board’s shift to the Pork: 

Be Inspired campaign makes the initial slogan all but 

worthless. According to the plaintiffs, the purchase of the 

mark and continued payment for it was and is arbitrary and 

capricious. The plaintiffs also argue that the Board’s 

purchase of the slogan with the purpose of supporting the 

Council’s lobbying efforts violates the Pork Act and Order’s 

prohibitions against the Board spending funds to influence 

legislation. See 7 U.S.C. § 4809(e); 7 C.F.R. § 1230.74. 

The plaintiffs sued the Secretary of the Department of 

Agriculture under the Administrative Procedure Act seeking 

 

1

 The Secretary of the Department of Agriculture is charged with 

reviewing and approving the Board’s actions. See 

7 U.S.C. § 4808(b)(3); 7 C.F.R. § 1230.60(a). In this opinion, for 

clarity and concision, we attribute Board-recommended, Secretaryapproved actions to the Board even though ultimate authority and 

liability for those actions runs against the Secretary. 

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an order enjoining the Board’s further payments to the 

Council and directing the Secretary to claw back what 

payments he can from the deal. The district court dismissed 

the plaintiffs’ suit for lack of Article III standing. See 

Humane Soc’y v. Vilsack, 19 F. Supp. 3d 24, 29 (D.D.C. 

2013). The court held that Dillenburg failed to establish an 

injury in fact fairly traceable to the Board’s actions that is 

likely to be redressed by a favorable decision. Id. at 34-42. It 

also held that the two plaintiff organizations could not 

establish standing to sue in their own right or on behalf of 

their pork-producing members. Id. at 42-47. The plaintiffs 

appealed via separate notices and we consolidated the cases 

for review. 

For the reasons that follow, we reverse and remand. This 

case involves a concrete and particularized harm caused by an 

agency’s failure to confer a direct economic benefit on a 

statutory beneficiary. We also reject the government’s 

argument that the plaintiffs have failed to exhaust their 

administrative remedies. The statute’s provision for 

administrative review would not offer the plaintiffs adequate 

relief, and therefore they were not required to pursue it. 

II. 

This suit ended on a motion to dismiss. We review such 

dismissals de novo. Mendoza v. Perez, 754 F.3d 1002, 1010 

(D.C. Cir. 2014). To survive a motion to dismiss for lack of 

standing, a complaint must state a plausible claim that the 

plaintiff has suffered an injury in fact fairly traceable to the 

actions of the defendant that is likely to be redressed by a 

favorable decision on the merits. See Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560-61 (1992); see also Ashcroft v. 

Iqbal, 556 U.S. 662, 678 (2009). Determining a claim’s 

plausibility is “a context-specific task that requires the 

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reviewing court to draw on its judicial experience and 

common sense.” Iqbal, 556 U.S. at 679. We accept facts 

alleged in the complaint as true and draw all reasonable 

inferences from those facts in the plaintiffs’ favor. Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 556-57 (2007). 

A. 

Dillenburg has made out a plausible claim to Article III 

standing. His argument is simple. He says that his return on 

his investment has been diminished by the Board’s unlawful 

payments of $3 million per year for Pork: The Other White 

Meat. If the Board stopped paying for the slogan, recouped 

funds unlawfully channeled to the Council, and devoted the 

money saved to more effective pork promotions, Dillenburg’s 

alleged harm would be at least partially redressed. Amend. 

Compl. ¶¶ 15, 128, J.A. 11, 34. That claim, if supported by 

sufficient factual allegations to “nudge [it] . . . from 

conceivable to plausible,” Twombly, 550 U.S. at 570, is 

sufficient to establish Article III standing. Dillenburg’s claim 

readily clears that line. 

As an initial matter, Dillenburg has alleged a “concrete 

and particularized” injury. Lujan, 504 U.S. at 560. He has 

alleged facts plausibly showing that the mark was worth less 

than its $60 million purchase price. Between 2001 and 2004, 

the Board paid the Council one dollar per year to license the 

slogan. Amend. Compl. ¶ 59, J.A. 20. In 2004, the Board 

negotiated a new five-year license with the Council, providing 

that payments would increase from one dollar per year to 

$818,000 for three years before reverting back to one dollar 

per year for the final two years. Id. ¶¶ 63, 109, J.A. 21-22, 

30-31. The plaintiffs allege that the Board’s CEO wrote that 

the increased license fee was negotiated to “allow the 

[Council] to get the money they need for the next four years.” 

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Id. ¶ 63, J.A. 21-22. Before the Board entered the new 

licensing agreement, the Board’s own economist 

recommended that the Board pay no more than $375,000 

annually to license the mark. Id. ¶ 64, J.A. 22. He also 

advised the Board that it was in a powerful position to dictate 

favorable terms to the Council because there would be few 

other buyers willing to purchase a generic slogan closely 

identified with the promotion of pork. Id. ¶ 83, J.A. 25-26. 

Indeed, there were no competing offers to purchase the 

slogan. Id. ¶ 84, J.A. 26. Those facts raise a plausible 

inference that the slogan was not worth its purchase price at 

the time, and is not worth $3 million per year now. 

Dillenburg also alleged facts tending to show that the 

Board’s purchase of the mark was not negotiated at arm’s 

length, which increased the plausibility of allegations that the 

Board paid too much. According to the complaint, the 

Council and the Board have been intertwined intimately since 

the Board’s formation in the mid-1980s. Id. ¶¶ 43-45, 55, 

J.A. 17, 19-20. The Council lobbied for passage of the Pork 

Act, and it proposed the text that ultimately served as the 

foundation for the Pork Order. Id. ¶¶ 43, 45, J.A. 17. The 

Council played an instrumental role in developing the slogan, 

vetting possible promotions for the Board to undertake, and 

engaging with advertising agencies to develop them. Id.

¶¶ 46-54, J.A. 18-19. Even though the Board paid for the 

mark’s development, the Council registered the mark in its 

own name and as its sole owner. Id. ¶¶ 52-53, J.A. 19. The 

Board and the Council were so enmeshed that, in 1986 when 

the Board voted to adopt the campaign and so committed 

itself to spend tens of millions of dollars in assessment funds 

over two decades on the promotion, it did not execute any 

licensing agreement or fee contract to formalize that 

arrangement. Id. ¶ 51, J.A. 19. The Department of 

Agriculture’s Office of Inspector General concluded in a 1999 

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audit that the Board had “relinquished too much authority to 

its primary contractor, the [Council], and ha[d] placed the 

[Council] in a position to exert undue influence over Board 

budgets and grant proposals.” Id. ¶ 55, J.A. 19-20. That 

history, as alleged, raises a plausible inference that the 

Board’s purchase was not the product of arm’s-length 

negotiation. 

Dillenburg has also alleged facts plausibly showing that, 

whatever its value when the Board purchased it, the mark is 

no longer worth $3 million per year. In 2011, the Board 

replaced the slogan with a “proud new brand identity”—Pork: 

Be Inspired. Id. ¶ 100, J.A. 28. In the same press release in 

which it announced that it would be adopting Pork: Be 

Inspired, the Board stated that the initial mark would be 

treated as a “heritage brand,” and that “The Other White Meat

campaign will not be featured in advertising.” Id. ¶ 101, 

J.A. 29. The Board’s replacement of the mark with Pork: Be 

Inspired justifies the inference that the mark is no longer 

worth $3 million annually. 

That inference is strengthened by the fact that when the 

Board valued the mark and negotiated its purchase in 2006, it 

expressly assumed that it would be using the slogan as its 

primary brand identity for the indefinite future. Id. ¶¶ 105-

106, J.A. 29-30. At that time, the Board reasoned that it could 

either purchase the mark from the Council, or spend millions 

of dollars building a new brand identity. Id. ¶¶ 68-72, 

J.A. 22-23. The Board chose to purchase the slogan. Id. ¶ 71, 

J.A. 23. In a letter seeking approval for the purchase from the 

Department of Agriculture, the Board stated that its “primary 

objective” was to purchase the mark for less than the 

estimated cost of establishing the new brand identity. Id.

¶ 72, J.A. 23. The Board’s valuation of the slogan 

incorporated the assumption that it would serve as the Board’s 

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primary brand identity in the future. Now that it is no longer 

the Board’s primary brand identity, the slogan is likely worth 

substantially less than the $3 million per year the Board pays 

for it. 

Those allegations establish Dillenburg’s Article III 

standing. Dillenburg’s injury is a classic form of concrete and 

particularized harm: actual economic loss. See Sierra Club v. 

Morton, 405 U.S. 727, 736-37 (1972); Shaw v. Marriott Int’l, 

Inc., 605 F.3d 1039, 1042 (D.C. Cir. 2010). The Board’s 

allegedly unlawful overpayments for an advertising campaign 

it does not use divert funds from other promotions. Because 

of that pork demand is lower, and thus the price at which pork 

producers can sell their hogs is lower than it would be if the 

Board were spending those funds on legitimate promotions 

and other demand-enhancing campaigns rather than 

squandering them with the Council. The misuse of the 

assessment funds cognizably harms Dillenburg’s bottom line. 

See, e.g., United Transp. Union v. ICC, 891 F.2d 908, 912 n.7 

(D.C. Cir. 1989) (explaining that “courts routinely credit” 

allegations founded on the “application of basic economic 

logic”); see also Clinton v. City of New York, 524 U.S. 417, 

432-33 (1998) (explaining that a “petitioner who is likely to 

suffer economic injury as a result of [governmental action] 

that changes market conditions satisfies” Article’s III injuryin-fact requirement) (alterations in original) (quoting 

3 Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative 

Law Treatise 13-14 (3d ed. 1994)).

Traceability and redressability readily follow. 

Dillenburg’s harm is caused by the Board’s failure to spend 

his mandatory assessment funds on legitimate promotions. 

The harm is thus “fairly traceable” to the challenged action. 

Lujan, 504 U.S. at 560 (internal quotation marks omitted). 

Furthermore, if the Board were ordered to stop paying $3 

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million annually for the mark, it would be required by law to 

use those funds reasonably and for legitimate purposes, an 

outcome likely at least partially to redress his injury. See

Massachusetts v. EPA, 549 U.S. 497, 525-26 (2007) 

(explaining that litigation success need only partially redress a 

plaintiff’s injury to meet the redressability requirement). The 

close relationship between a holding that the funds are being 

unlawfully used and a remedy that would make them 

available for lawful, more effective uses makes it “likely, as 

opposed to merely speculative, that the injury will be 

redressed by a favorable decision.” Lujan, 504 U.S. at 561 

(internal quotation marks omitted). 

We therefore conclude that Dillenburg has alleged a 

plausible claim to Article III standing. Because we find that 

Dillenburg has standing, we need not and do not reach the 

arguments of the other plaintiffs regarding their standing. See 

Mendoza, 754 F.3d at 1010; In re Navy Chaplaincy, 697 F.3d 

1171, 1178 (D.C. Cir. 2012). 

B. 

The government argues that we should affirm the district 

court’s order dismissing the complaint on the alternative 

ground that the plaintiffs failed to exhaust their administrative 

remedies. We reject that argument because the statute offers 

administrative relief that, in the context of this case, is too 

“doubtful and limited” to justify requiring the plaintiffs to 

pursue it. Bowen v. Massachusetts, 487 U.S. 879, 901 (1988). 

Under the relevant provision of the Pork Act, any person 

subject to “an order” may petition the Secretary of the 

Department of Agriculture (1) “stating that such order, a 

provision of such order, or an obligation imposed in 

connection with such order is not in accordance with law” and 

(2) “requesting a modification of such order or an exemption 

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from such order.” 7 U.S.C. § 4814(a)(1). The government 

contends that the plaintiffs were required to petition the 

agency to exempt them from their payment obligations under 

the Pork Order, or seek a modification of the Pork Order 

prohibiting the Board from making the expenditures to which 

they objected. Appellee Br. 17-19. 

There is reason to doubt that the exhaustion provision 

applies to the plaintiffs’ claims at all. The statute provides 

that an individual subject to the Pork Order must “stat[e]” in 

his petition for relief “that such order, a provision of such 

order, or an obligation imposed in connection with such order 

is not in accordance with law.” 7 U.S.C. § 4814(a)(1)(A). 

But the plaintiffs are not claiming that any provision of the 

Pork Order itself is “not in accordance with law.” The 

government asserts, however, that the plaintiffs fall within the 

provision because the Board’s misappropriation of assessment 

funds transforms otherwise lawful assessments into 

“obligation[s] imposed in connection with” the Pork Order 

“not in accordance with law.” Id. That is a strained reading 

of the provision. 

Even assuming the plaintiffs came within the Pork Act’s 

administrative relief provision, the only relief they could 

obtain would be inadequate. See Bowen, 487 U.S. at 901. 

The Act provides only two administrative remedies: “an 

exemption from” the Pork Order, or “a modification” of it. 

7 U.S.C. § 4814(a)(1)(B). Neither of those remedies would 

provide plaintiffs anything like the relief they seek. See 

Garcia v. Vilsack, 563 F.3d 519, 522 (D.C. Cir. 2009) 

(explaining that administrative relief must be of the “same 

genre” as Administrative Procedure Act relief sought). 

An exemption from assessments would not remedy the 

plaintiffs’ harms. The plaintiffs seek specific performance. 

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An exemption is more akin to rescission. The two are not 

equivalent. Moreover, making exemptions from payment the 

only relief available to pork producers would undermine the 

program: Producers who identify actionable abuses of the 

Board’s discretion would be exempted, narrowing the Board’s 

base even as it failed to correct its malfeasance. 

Alternatively, a modification of the Pork Order would 

offer the plaintiffs only doubtful relief. The plaintiffs’ claim 

is that the Secretary is failing to comply with the Pork Act and 

Order. The plaintiffs do not want to change the rules; they 

want to see the existing rules enforced. Modifying the Order 

will not get them that. Because neither an exemption nor a 

modification of the Pork Order would offer the plaintiffs 

adequate relief, they were not required to pursue an 

administrative path that offered only those two remedies. 

* * * 

 For the foregoing reasons, we reverse and remand for 

further proceedings consistent with this opinion. 

So ordered. 

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