Opinion ID: 4193391
Heading Depth: 1
Heading Rank: 3

Heading: analysis

Text: Because the FMIA and implementing regulations plainly authorize the FSIS to withhold from use labeling that is “false or misleading in any particular,” 21 U.S.C. § 607(e), we review its decision for reasonableness under the familiar arbitrary and capricious review standard of the Administrative Procedure Act (“APA”). 5 U.S.C. § 706 (directing court to “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”); see also Arent v. Shalala, 70 F.3d 610, 616 (D.C. Cir. 1995). “The scope of review under the 6 FSIS Directive 12,600.1 requires “[t]he [re-boxing] facility . . . [to] maintain records of label transfers . . . to identify properly the product origin in the event of a product control problem . . . .” Directive 12,600.1 at 8-9; see also id. at 8 (“Inspection program personnel will verify that facilities are using approved labels, wrappers, or containers bearing the official mark of inspection.”). 11 ‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that of the agency.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). We must ensure that the agency “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Id. (internal quotation marks omitted). Although we will “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned,” id. (internal quotation marks omitted) (quoting Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974)), we cannot “supply a reasoned basis for the agency’s action that the agency itself has not given,” id. (citing SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)). Applying this standard here, we believe that the FSIS’s determination that US1’s labeling is misleading is neither arbitrary nor capricious. In his final determination, the Administrator noted that the FSIS permits a re-boxer to use its supplier’s establishment number only if the supplier consents to the practice, consent “historically” given by transferring its labels containing its establishment number to the re-boxer. JA 114 (“FSIS has previously explained that labeling policies and the regulations have historically permitted official establishments to arrange for off-site labeling/re-labeling of their product at approved [re-boxing] facilities, by transferring their labels, bearing their official inspection legend, to such facilities, provided documentation of such transfers and other applicable records are made available to inspection personnel.”); accord Directive 12,600.1 at 8 (“The [re-boxing] facility must maintain records of label transfers and records of products labeled or relabeled at the facility . . . .”). The Administrator further found that “US1 has not provided documentation as requested, in accordance with 9 CFR 320.1(b)(11), showing consent of the official establishment.” 12 JA 114. US1’s use of a supplier’s establishment number, then, does not simply—and erroneously—signify that one five-digit number is, or can be, interchangeable with another without more; instead, it signifies that US1 has the supplier’s consent to use the supplier’s establishment number on US1’s packaging. But that signification is false—US1 printed its supplier’s inspection mark at its own facility without the latter’s consent and incorporated it as part of its label. JA 75. We believe the Administrator reasonably concluded that [a]bsent a documented transfer of labels, or other records . . . assur[ing] FSIS of the knowledge, consent, or direction . . . of the official establishment number, FSIS has reason to believe that the consuming public may be misled by application of the official mark of inspection. FSIS cannot authorize application of any label to a meat or poultry product when there is reason to believe that its use has the effect of causing such articles to become misbranded. JA 117; see also JA 114 (US1’s labeling “provide[d] a false impression, and [was therefore] misbranded by definition under 21 U.S.C. [§] 601.”). On these facts, we conclude that the FSIS “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43. Although the Administrator’s analysis is less than pellucid, we must “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” Id. (quoting Bowman Transp., 419 U.S. at 286). US1 makes various counterarguments but none is persuasive. First, US1 insists that the Administrator’s final determination is “not in accordance with law,” reciting 9 C.F.R. § 350.3(a)(1)—the AMA regulation under which US1 13 voluntarily participates in the FSIS inspection program—that an FSIS inspector place the “marks of Federal inspection” on a meat product’s label before resale. Examples of the “official marks” of federal inspection are set forth in 9 C.F.R. § 312.2 and, as noted, the number “38” is used. See supra 3. Footnote 1 of that regulation explains that the “number ‘38’ is given as an example only” and that the “establishment number of the official establishment where the product is prepared shall be used in lieu thereof.” 9 C.F.R. § 312.2 n.1 (emphasis added). Because footnote 1 recites that the official establishment’s number “shall be used” in place of “38,” US1 insists that it is entitled to—indeed, required to—use the establishment number of its supplier—the “official establishment”—instead of its own, irrespective of the official establishment’s consent. We disagree. Footnote 1 merely makes plain that the official establishment is to use its establishment number instead of the placeholder “38.” See id. Next, US1 argues that the FSIS’s consent requirement constitutes a new “legislative rule” and is invalid because it was not promulgated in accordance with the APA. Granted, we have often said that “[l]egislative rules have the ‘force and effect of law’ and may be promulgated only after public notice and comment.” Nat’l Min. Ass’n v. McCarthy, 758 F.3d 243, 250 (D.C. Cir. 2014). But no new rule was promulgated here. The Administrator’s final determination does not impose any new legal obligation on US1; instead, it enforces a preexisting prohibition of misleading labeling set forth in the FMIA and implementing regulations. See 21 U.S.C. §§ 601(n)(1), 607(e), 610(d); 9 C.F.R. § 317.8(a). Finally, US1 insists that the Administrator’s final determination represents an unexplained departure from agency precedent because US1, while subject to FSIS inspection, used its supplier’s establishment number on its labels for three years without complaint. “[W]here an agency departs from 14 established precedent without a reasoned explanation, its decision will be vacated as arbitrary and capricious.” ANR Pipeline Co. v. FERC, 71 F.3d 897, 901 (D.C. Cir. 1995). But there was no departure from precedent—no “prior policies and standards [were] deliberately changed.” Ramaprakash v. FAA, 346 F.3d 1121, 1124 (D.C. Cir. 2003) (quoting Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970)). Instead, the FSIS, albeit tardily, rectified its inspectors’ apparently isolated (on this record) failure to verify that US1 had its supplier’s consent to use the latter’s establishment number. Although the non-enforcement is lamentable, especially on the part of personnel charged with ensuring the “health and welfare of consumers,” 21 U.S.C. § 602, we discern no FSIS “depart[ure] from established precedent.” ANR Pipeline Co., 71 F.3d at 901. For the foregoing reasons, the petition for review is denied.7 So ordered. 7 Regarding the dissenting opinion, we and our dissenting colleague are like ships passing in the night. Of course he is right that a rule must be preceded by notice and comment and that, if that procedure is leapfrogged, the rule is ultra vires and cannot be enforced. No argument there. But we are not dealing with an unenforceable rule—the FSIS determined that the properly promulgated (and unchallenged) regulation prohibiting misleading and misbranded labeling was violated by US1’s failure to follow Directive 12,600.1. That failure produced a false label. Next, the dissent points out that the FSIS does not contend “that United Source One obtained the meat anywhere other than [from] the original establishment.” Dissent Op. 2. True. It does contend, however, and US1 admits, that the supplier’s label was not obtained therefrom but was instead printed by US1 itself, necessarily without its source’s consent. Finally, the dissent apparently differentiates between a label violation and “a violation of conduct,” concluding that the former does not “cure the defective source of the nonexistent regulation.” Dissent Op. 2. Unsure of what is meant by a “violation of conduct,” we again respond that US1’s use of its supplier’s establishment number is “misleading” because it signifies that US1 has the supplier’s consent to use the latter’s establishment number on US1’s packaging. Directive 12,600.1 explains why US1’s labeling is misleading.