Opinion ID: 2974939
Heading Depth: 1
Heading Rank: 3

Heading: refusal of an unreasonable inspection

Text: “[C]ourts are to ‘give substantial deference to an agency’s interpretation of its own regulations.’” St. Francis Health Care Ctr. v. Shalala, 205 F.3d 937, 943 (6th Cir. 2000) (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994)).1 The Secretary’s2 interpretation may be overturned “if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law,’” but “if ‘it is a reasonable regulatory interpretation we must defer to it.’” Id. at 944 (quoting Thomas Jefferson Univ., 512 U.S. at 512; Shalala v. Guernsey Memorial Hosp., 514 U.S. 87, 94-95 (1995)). 1 Both the USDA here and the Tenth Circuit in McNamar v. Apfel, 172 F.3d 764, 766 (10th Cir. 1999), which the USDA quotes, inaccurately claim that the Supreme Court’s opinion in Thomas Jefferson University holds that courts defer to agency interpretations of both the statutes and regulations they administer. Thomas Jefferson University refers only to the interpretations of regulations. A federal agency’s interpretation of statutes is subject to a less deferential standard, as set forth below. 2 The Judicial Officer “serves as the delegate for the Secretary of Agriculture for judicial matters, and has final administrative authority to decide the Department’s [USDA’s] cases . . . .” Rowland v. USDA, 43 F.3d 1112, 1114 (6th Cir. 1995) (citing 7 C.F.R. § 2.35). -4- No. 06-3350 Bennett v. USDA Regarding statutes, however, courts give less deference to an agency’s interpretation. To “assess[] an agency’s construction of a statute that it administers,” courts perform the two-part analysis set forth in Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Harris v. Olszewski, 442 F.3d 456, 466 (6th Cir. 2006). That analysis inquires: (1) “has Congress ‘directly spoken to the precise question at issue?’” and (2) “is ‘the agency’s answer [] based on a permissible construction of the statute?’” Id. (alteration in original) (quoting Chevron, 467 U.S. at 842-43). The Horse Protection Act prohibits “[t]he failure or refusal to permit access to or copying of records, or the failure or refusal to permit entry or inspection, as required by [15 U.S.C. § 1823].” 15 U.S.C. § 1824(9). This “inspection” is explained in § 1823: [T]he Secretary [of Agriculture], or any representative of the Secretary duly designated by the Secretary, may inspect any horse show, horse exhibition, or horse sale or auction or any horse at any such show, exhibition, sale, or auction. . . . Each such inspection shall be commenced and completed with reasonable promptness and shall be conducted within reasonable limits and in a reasonable manner. Id. § 1823(e). The Department of Agriculture’s regulations further provide: Each horse owner, exhibitor, trainer, or other person having custody of, or responsibility for, any horse at any horse show, horse exhibition, or horse sale or auction, shall allow any APHIS representative to reasonably inspect such horse at all reasonable times and places the APHIS representative may designate. . . . APHIS representatives will not generally or routinely delay or interrupt actual individual classes or performances at horse shows, horse exhibitions, or horse sales or auctions for the purpose of examining horses, but they may do so in extraordinary situations .... 9 C.F.R. § 11.4(a). -5- No. 06-3350 Bennett v. USDA Both the statute and the regulation address the “reasonableness” of an inspection. The statute requires “reasonable promptness,” “reasonable limits,” and a “reasonable manner,” and the regulation states that USDA officials will “reasonably inspect” at “reasonable times and places.” However, neither expressly provides that a trainer or owner may refuse inspection due to a lack of such reasonableness. The Judicial Officer’s opinion does not expressly address the regulation. It does explain his interpretation of the statute’s reasonableness requirements: The failure of a representative of the Secretary of Agriculture to conduct an inspection in a reasonable manner, as required by section 4(e) of the Horse Protection Act (15 U.S.C. § 1823(e)), may be used to challenge the results of the inspection, but may not be used as a basis to refuse to permit completion of the inspection or as a basis to require inspection by another representative of the Secretary of Agriculture. Opinion of Secretary at 17-18. At oral argument, the USDA conceded that there might exist extreme circumstances under which a trainer or exhibitor could refuse an inspection due to its unreasonableness without violating § 1824(9). Thus, the court is not presented with the question of whether it would ever be permissible for an exhibitor to refuse an inspection because it was unreasonable. The court need only decide whether, in this case, Bennett’s refusal of an inspection he believed to be unreasonable was a violation of the Horse Protection Act. Because the statute itself does not specify whether the “reasonableness” language provides a basis for owners and trainers to refuse inspection, Congress has not “directly spoken to the precise question at issue” in this case, the first question under the Chevron analysis. The second Chevron question is whether the USDA’s interpretation is “based on a permissible construction of the statute.” Harris explains that “[i]f so and if Congress has given the agency authority to interpret the -6- No. 06-3350 Bennett v. USDA statute, a federal court will defer to the agency’s interpretation.” 442 F.3d at 466 (citing Chevron, 467 U.S. at 842-43). The Supreme Court explained in Smiley v. Citibank, 517 U.S. 735, 740-41 (1996), that “[w]e accord deference to agencies under Chevron . . . because of a presumption that Congress, when it left ambiguity in a statute meant for implementation by an agency, understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows.” Thus, even if the statutory “gap for the agency to fill,” and the attendant “delegation of authority” for the agency to interpret the statute, are “implicit rather than explicit,” “a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.” Chevron, 467 U.S. at 843-44. In this case, § 1823(e) makes clear that the inspection required by § 1824(9) is to be carried out by the Secretary of Agriculture or his representative. Thus, the inspection described in § 1824(9) is implemented by the USDA, and under Chevron, the USDA properly should resolve the ambiguity in § 1824(9). Thus, provided the Judicial Officer’s interpretation of the statute is “permissible,” the panel should defer to his interpretation. Harris, 442 F.3d at 466; see also Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980 (2005) (“If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even if the agency’s reading differs from what the court believes is the best statutory interpretation.”). -7- No. 06-3350 Bennett v. USDA The Judicial Officer determined that Bennett’s “belief that Dr. Guedron was not conducting the inspection in a reasonable manner and [Bennett’s] request for inspection by” Dr. Bourgeois “are not relevant to [Bennett’s] violation of . . . the Horse Protection Act,” which position the USDA maintains on appeal. Opinion of Secretary at 17. This interpretation is reasonable. As the USDA points out in its brief, this interpretation furthers the purposes of the Horse Protection Act. Permitting a trainer or owner to refuse inspection based on his own assertion that an inspection is unreasonable, in the absence of circumstances “well outside the norm of regularity in the inspection process” to which the USDA referred at oral argument,3 would potentially allow trainers to avoid discovery of “soring,” the prevention of which is the purpose of the Horse Protection Act. 15 U.S.C. § 1822. Because § 1824(9) does not explicitly state the consequences of the requirement than an inspection be reasonable, and because the USDA’s interpretation of the reasonableness language is permissible, this court must accept the USDA’s determination that an exhibitor violates the Horse Protection Act if he refuses an inspection that is not egregious, based on his subjective belief that the inspection is unreasonable.