Court Opinion

ID: 2749150
Source: CourtListenerOpinion
Date Created: 2014-11-07 22:01:12.313294+00
Date Added: 2024-06-11T12:12:25.639816
License: Public Domain

UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA

ASSOCIATED DOG CLUBS OF NEW
YORK STATE, INC., et al.,

                       Plaintiffs,
                                                    Case No. 1:13-cv-01982 (CRC)
                       v.

THOMAS J. VILSACK, Secretary, United
States Department of Agriculture, et al.,

                       Defendants,

and

THE HUMANE SOCIETY OF THE
UNITED STATES,

               Intervenor-Defendant.

                                     MEMORANDUM OPINION

       With few exceptions, there is nothing one can buy in a traditional store that cannot be

bought online as well. It should come as no surprise, then, that the Internet unleashed a growing

online market for pet sales. Prompted by this expansion of sight-unseen sales over the Internet, the

Department of Agriculture, through the Animal and Plant Health Inspection Service (“APHIS”),

issued a new rule that redefined “retail pet store”—a statutory category of pet sellers exempt from

regulation by the agency. Whereas APHIS previously exempted from regulation all outlets that

sold certain animals directly to the public, its revised retail pet store definition exempted only face-

to-face sellers. Many online sellers thus became subject to regulation for the first time. The new

rule brought howls from small breeders anxious over the potential costs of regulatory oversight. A

collection of those breeders—through some 42 separate dog and cat clubs—seek to bring APHIS to

heel, arguing that the agency exceeded its statutory authority in issuing the new rule. But the clubs

are barking up the wrong tree: Their complaints are more policy disagreements with APHIS’s
regulatory approach than they are valid legal objections to APHIS’s authority and the process it

followed in adopting the rule. Because APHIS acted within its authority in promulgating the rule

and otherwise complied with the requirements of the Administrative Procedures Act, the Court will

grant summary judgment for the agency.

       I.      Background

       Congress passed the Animal Welfare Act (“AWA”), 7 U.S.C. § 2131 et seq., in 1966 “to

insure that animals intended . . . for use as pets are provided humane care and treatment,” id. §

2131(1). The Act gives the Secretary of Agriculture authority, which has been delegated to APHIS,

to promulgate regulations that require “animal dealers” to be licensed, keep records, and maintain

humane facilities. Id. §§ 2133, 2143. The AWA exempts “retail pet stores” from the definition of

“animal dealers”—making them free from all regulation by APHIS—but the statute does not define

that term. Id. § 2132(f). Congress left that task to the Secretary. Accordingly, APHIS issued a

regulation in 1971 defining “retail pet store” to mean “any retail outlet where animals are sold only

as pets at retail.” 36 Fed. Reg. 24,917, 24,919 § 1.1(t) (Dec. 24, 1971). It later created a de minimis

exception from regulation for any person who maintains three or fewer breeding females and who

sells only the offspring of those females for pets or exhibition. 54 Fed. Reg. 36,123, 36,148 §

2.1(a)(3)(iii) (Aug. 31, 1989). Although both APHIS and Congress considered several alternative

definitions over the years, these regulations remained relatively unchanged over the next several

decades.

       In 2010, however, the Department of Agriculture Office of the Inspector General (“OIG”)

published an audit report critical of APHIS’s inspection program. OIG, APHIS Animal Care

Program Inspections of Problematic Dealers, Audit Report 33002-4-SF (“OIG Report”) (May,

2010), Administrative Record (“AR”) 146–214. Among other issues, the report documented a pack

of complaints by owners of sick or injured animals purchased from unregulated online sellers. Id.

                                                  2
at 186. The report observed, however, that ‘[l]arge breeders that sell AWA-covered animals over

the Internet . . . [we]re exempt from [APHIS’s] inspection and licensing requirements” because

online sellers fell within the definition of retail pet stores. Id. at 185. It therefore urged APHIS to

seek legislation to cover these unregulated entities. Id. at 186. APHIS responded favorably to the

recommendation, assuring the OIG that it was promoting a bill that “would place dogs sold directly

to the public via the Internet . . . within the jurisdiction of the AWA.” Id. at 187.

       Instead of continuing to pursue legislative change, however, APHIS determined that “the

AWA’s definition of a regulated ‘dealer’ is sufficiently broad to allow us to clarify—without

legislation—the regulatory definition of a ‘retail pet store’ so that Internet retail sales of regulated

animals are covered[.]” Letter from Cindy J. Smith, APHIS Administrator, to Congressman Bob

Goodlatte (Sep. 9, 2010), AR at 241. APHIS thus published a notice of proposed rulemaking to

limit the retail pet store exemption to only those outlets where “each buyer physically enters [the

store] in order to personally observe the animals[.]” Proposed Rule, 77 Fed. Reg. 28,799 (May 16,

2012), AR 322–28.

       APHIS also published a Regulatory Impact Analysis that sought to estimate the number of

breeders that would be covered by the new rule and its resulting economic impact on those

breeders. APHIS, Regulatory Impact Analysis & Initial Regulatory Flexibility Analysis (April

2012) (“Impact Analysis”), AR 400–62. The analysis acknowledged that “[t]here is a great deal of

uncertainty surrounding the number of facilities that will be affected by this rule[.]” Id. at 402.

APHIS nevertheless developed an estimate by first identifying breeders listed in two online breeder

registries and assuming an additional unlisted breeder for every four listed breeders, which yielded

approximately 8,400 to 15,000 dog breeders nationally. Id. at 402–403. It then assumed that 75

percent of those breeders sell dogs as pets, 55 percent have more than four breeding females, and 75

percent make sight-unseen sales, thereby arriving at an estimated 2,599 to 4,641 online dog sellers

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that would be covered by the regulations for the first time. Id. Using a similar methodology,

APHIS estimated 325 cat breeders and 75 rabbit breeders also would be affected by the new rule.

Id. at 414–16.

       APHIS predicted that compliance costs for newly-regulated breeders would vary widely

depending on the size of their facilities and their existing level of compliance with the regulations.

Because comments to the proposed rule indicated that breeders generally maintain facilities above

the minimum humane treatment standards the AWA requires, APHIS assumed the new rule would

result in only modest additional costs to build new structures. Id. at 423. The impact analysis

indicated that dog breeders with noncompliant facilities would be required to either purchase dog

houses that provide adequate shelter from the elements, which fetch between $80 and $120 for “an

igloo-style dog house,” or would need to construct additional commercial kennels, which were

estimated to cost between $220 and $260 per animal. Id. at 428–29. APHIS estimated that

breeders who did not meet the regulation’s veterinary care standards would incur costs of between

$1,375 and $3,570 for site visits, care issues, and vaccinations. Id. at 425–26. The impact analysis

estimated that meeting cleaning and sanitation requirements would require between one and two

hours of work per day, which would cost between $3,420 and $6,850 a year if a breeder chose to

hire outside labor. Id. at 427. The analysis estimated that all newly regulated dog breeders would

be subject to licensing, tagging, and recordkeeping costs of between approximately $250 and

$1,055 depending on their size. See id. at 419–21. By applying these figures to the estimated

numbers of newly regulated compliant and noncompliant breeders, APHIS estimated the total cost

of compliance would range between $853,000 and $2.8 million annually for all breeders. Id. at 430.

       After receiving over 75,000 comments, which both supported and opposed the new rule,

APHIS promulgated the new definition of “retail pet store” in September 2013. Final Rule, 78 Fed.

Reg. 57,227 (Sep. 18, 2013), AR 375–98. Along with the new definition, the rule change also

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expanded the de minimis exception from three to four breeding females. Id. The pertinent sections

of the final rule provide:

        Retail pet store means a place of business or residence at which the seller, buyer, and
        the animal available for sale are physically present so that every buyer may
        personally observe the animal prior to purchasing and/or taking custody of that
        animal after purchase[.]

9 C.F.R. § 1.1.

        The following persons are exempt from the licensing requirements . . . . Any person
        who maintains a total of four or fewer breeding female dogs, cats, and/or small
        exotic or wild mammals . . . and who sells, at wholesale, only the offspring of these
        [breeding females], which were born and raised on his or her premises, for pets or
        exhibition, and is not otherwise required to obtain a license.

Id. § 2.1(a)(3)(iii).

        Plaintiffs, a collection of 42 dog and cat clubs and registries, 1 then brought this suit, alleging

that the agency’s rulemaking violated the Administrative Procedure Act (“APA”), 5 U.S.C. § 706.

Approximately three months later, Congress passed the Agricultural Act of 2014, Pub. L. No. 113-

79, which amended the AWA to, among other things, exempt from licensing “a dealer or exhibitor

under this Act if the size of the business is determined by the secretary to be de minimis.” Id. §

12308 (italics added). The Conference Report for the bill explains that the amendment was meant

to codify APHIS’s prior de minimis exception, so that APHIS could focus “its limited budget and

inspection and enforcement staff on entities that pose the greatest risks to animal welfare and public

safety.” 160 Cong. Rec. H1269-01. The Conference Report also recommended that APHIS engage

in rulemaking to further define the di minimis exception given “confusion among the regulated

industry” over the term “breeding female.” Id. The Agricultural Act did not affect APHIS’s new

definition of retail pet store. After the clubs brought suit, the Humane Society of the United States

filed a motion to intervene to defend the rule, which the Court granted. Mem. Op. and Order (May

1
  With no offense to our feline friends, the Court will refer to the Plaintiffs as “dog clubs” or
simply “clubs.”
                                                    5
16, 2014). The dog clubs, the Secretary, and the Humane Society have now cross-moved for

summary judgment.

       II.     Standard of Review

       Summary judgment in an APA case supported by an administrative record generally does

not apply the standard set forth in Federal Rule of Civil Procedure 56(a). See, e.g., AFL–CIO v.

Chao, 496 F. Supp. 2d 76, 81 (D.D.C. 2007); Sierra Club v. Mainella, 459 F. Supp. 2d 76, 89–90

(D.D.C. 2006). Instead, the district court’s role “‘is to determine whether or not as a matter of law

the evidence in the administrative record permitted the agency to make the decision it did.’”

Stuttering Found. of Am. v. Springer, 498 F. Supp. 2d 203, 207 (D.D.C. 2007) (quoting Occidental

Eng’g Co. v. INS, 753 F.2d 766, 769–70 (9th Cir. 1985)). “Summary judgment thus serves as a

mechanism for deciding, as a matter of law, whether the agency action is supported by the

administrative record and is otherwise consistent with the APA standard of review.” Id. (citing

Richards v. INS, 554 F.2d 1173, 1177 & n.28 (D.C. Cir. 1977)).

       III.    Analysis

       The dog clubs have two main bones of contention with the new rule. First, they argue that

APHIS exceeded its regulatory authority under the AWA by changing the agency’s long-

established definition of “retail pet store,” which they view as inconsistent with the new definition.

Second, the clubs contend that the agency’s rulemaking process was arbitrary and capricious

because APHIS underestimated the number of breeders that would be affected by the new rule,

minimized the fiscal impact of the rule on those breeders, and arbitrarily covered smaller breeders

despite the fact that the OIG only identified problems with large Internet sellers.

               A. Authority Under the AWA

       Chevron, U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984), establishes a

two-part inquiry to determine whether an agency charged with implementing a statute has arrived at

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a permissible interpretation of the law. First, if a law directly addresses the precise question at

issue, Congress’s directive is, of course, controlling. Id. at 842–43. Second, if the statute is silent

or ambiguous regarding the matter at hand, “‘the question for the court is whether the agency’s

interpretation is based on a permissible construction of the statute in light of its language, structure,

and purpose.’” Nat’l Treasury Emps. Union v. Fed. Labor Relations Auth., 754 F.3d 1031, 1042

(D.C. Cir. 2014) (quoting Chao, 409 F.3d at 384). The court must defer to any reasonable agency

interpretation, Loving v. IRS, 742 F.3d 1013, 1016 (D.C. Cir. 2014); the interpretation need not be

the one “deemed most reasonable by the courts[,]” Entergy Corp. v. Riverkeeper, Inc., 556 U.S.

208, 218 (2009) (emphasis in original).

       As the Secretary and the clubs both agree, the D.C. Circuit in Doris Day Animal League v.

Veneman, 315 F.3d 297 (D.C. Cir. 2003), found the meaning of “retail pet store” in the AWA to be

ambiguous. Id. at 300 (“there is enough play in the language of the Act to preclude us from saying

that Congress has spoken to the issue with clarity”). Thus, the only question before the Court is

whether, under Chevron step-two, the agency’s new rule is a reasonable construction of the term.

The Court concludes that it is.

       The new rule limits the retail pet store exemption to outlets where the seller, buyer, and

animal are physically present at each sale, while the old rule considered any retail outlet, including

mail-order or online sellers, to be exempt from AWA regulation. APHIS justified the limitation by

explaining that face-to-face buyers are able to inspect the seller’s premises and the animals. Final

Rule, 78 Fed. Reg. at 57,227, AR 375. Online buyers, by contrast, generally cannot determine the

animal’s condition before receiving the pet and may never see the seller’s facilities. Particularly in

light of the recent growth in online sales, the Secretary posited that this lack of oversight by online

buyers justified bringing sight-unseen sales within the scope of APHIS regulation.

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       The Secretary’s justification for the rule is reasonable on its face. The dog clubs

nevertheless maintain that APHIS exceeded its authority because the new definition of retail pet

store is inconsistent with the agency’s prior definition, which had allowed unregulated sight-unseen

sales for 47 years and which APHIS defended against an APA challenge as recently as 2003. See

Doris Day, 315 F.3d at 297. But that dog won’t hunt. An agency may change, or even reverse,

longstanding positions while enjoying Chevron deference so long as it provides a reasoned

explanation for doing so. E.g., Verizon v. FCC, 740 F.3d 623, 636 (D.C. Cir. 2014). APHIS has

provided such an explanation here. The clubs overstate the regulatory change in any event: The

prior rule did not expressly exempt sight-unseen sales; it merely failed to address them. Thus,

APHIS’s new approach is more accurately described as closing a loophole than reversing a settled

position. As APHIS explained, it updated the definition to address the “dramatic rise in sight

unseen sales” brought on by the Internet. Final Rule, 78 Fed. Reg. 57,227, AR 375. Closing a

loophole because it has grown into a significant regulatory gap is a sufficiently reasoned

explanation for adopting a new agency position. See Ctr. for Sci. in the Pub. Interest v. U.S. Dep’t

of Treasury, 797 F.2d 995, 998–99 (D.C. Cir. 1986)

       Despite the clubs’ assertions to the contrary, the Secretary’s current position is not

inconsistent with the government’s litigation position in Doris Day, where a previous Secretary

defended the prior retail pet store definition. 315 F.3d at 297. The government’s position in Doris

Day was that the definition of retail pet store was not clearly established, and APHIS’s

interpretation of the term was reasonable in light of that ambiguity. See id. at 300. The government

still maintains that the term is open for interpretation; it simply argues that both the prior and

current definitions are reasonable. Moreover, the primary defense of the regulation advanced by the

Secretary in Doris Day was that “‘retail dealers . . . are already subject to a degree of self-regulation

and oversight by persons who purchase animals from the retailers’ homes.’” Id. at 301 (quoting 64

                                                    8
Fed. Reg. 38,546 (July 19, 1999)). As discussed above, that justification does not apply to online

sales. See OIG Report, AR 185 (“for Internet breeders, there is no degree of self-regulation and

oversight because consumers do not have access to their facilities”). Accordingly, the prior

Secretary’s position in Doris Day does not undercut APHIS’s authority to promulgate the rule at

issue here.

       The dog clubs also contend that APHIS’s revision of the retail pet store definition through

rulemaking is inconsistent with its prior commitment to address its concerns about online sellers via

legislation. Pls.’ Mem. in Supp. of Mot. Summ. J. (“Pls.’ Mem.”) at 20. They rely on American

Mining Congress v. United States Army Corps of Engineers, 951 F. Supp. 267 (D.D.C. 1997),

where the district court rejected the agency’s revised definition of “discharge” under the Clean

Water Act. Id. at 272–77. In a footnote, the court observed in passing that the agency had intended

to clarify the term through legislation before issuing the challenged regulation. Id. at 276 n.20. But

the court did not rely on this fact in holding that the text and legislative history of the Clean Water

Act did not support the agency’s interpretation. Id. at 272–77. American Mining Congress

therefore does not help the clubs, and they have not offered any other authority for the proposition

that an agency’s stated intention to pursue legislative change forever bars it from seeking the same

result through regulation. Cf. Devon Energy Corp. v. Kempthorne, 551 F.3d 1030, 1039 (D.C. Cir.

2008) (interim or non-final agency interpretations are not binding on an agency) (citing Bennett v.

Spear, 520 U.S. 154, 177–78 (1997)).

       The clubs also argue that APHIS exceeded its authority because Congress acquiesced in the

prior definition of “retail pet store” by reenacting the AWA several times without modifying the

definition. When Congress reenacts a statute but does not modify an Agency’s interpretation of a

regulatory provision, it can be evidence that Congress has endorsed the interpretation. E.g., Doris

Day, 315 F.3d 297 at 300 (citing among others Commodity Futures Trading Comm’n v. Schor, 478

                                                   9
U.S. 833, 846 (1986)); Am. Mining Cong., 951 F. Supp. at 270. APHIS emphasizes, however, that

Congress reenacted the AWA after the rule change as well. Agricultural Act of 2014, Pub. L. No.

113-79 § 12308. Indeed, although the Court is somewhat leery of congressional acquiescence

arguments generally, the subsequent passage of the Agricultural Act of 2014 creates a particularly

sturdy footing for the argument that Congress acquiesced to the new definition. That is so because

the Agricultural Act codified one aspect of the AWA exemption—the historic de minimis

exception—but did not affect the brand-new “retail pet store” definition. See id. Similarly, the

Conference Report on the bill urges APHIS to clarify the meaning of “breeding female” but does

not mention the new definition of “retail pet store.” See 160 Cong. Rec. H1269-01. Both the Act

and its legislative history thus suggest that members of Congress specifically considered the retail

pet store exemption immediately after APHIS changed the definition but left the change untouched.

Short of explicit endorsement, it is difficult to imagine a better example of congressional

acquiescence to a regulatory change.

               B. Arbitrary and Capricious Review

       The APA forbids final agency action that is arbitrary or capricious. 5 U.S.C. § 706(2)(A).

This means, among other things, that the agency must “examine the relevant data and articulate a

satisfactory explanation for its action including a ‘rational connection between the facts found and

the choice made.’” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463

U.S. 29, 43 (1983) (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)).

An agency’s findings of fact must also be supported by substantial evidence. 16 U.S.C. § 825l(b).

“Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion, and requires more than a scintilla but less than a preponderance of evidence.”

S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 54 (D.C. Cir. 2014) (quotations omitted). “When

applied to rulemaking proceedings, the substantial evidence test ‘is identical to the familiar arbitrary

                                                  10
and capricious standard,’ which ‘requires the [agency] to specify the evidence on which it relied

and to explain how that evidence supports the conclusion it reached.’” Id. (quoting Wis. Gas Co. v.

FERC, 770 F.2d 1144, 1156 (D.C. Cir. 1985)).

       An agency can change its prior position to address a loophole, even a longstanding one, and

can decide that a growing problem warrants more oversight than was previously necessary. See,

e.g., Ctr. for Sci. in the Pub. Interest v. U.S. Dep’t of Treasury, 797 F.2d 995, 998–99 (D.C. Cir.

1986) (“it is not improper for an agency to engage in new rulemaking to supersede defective

rulemaking” so long as it provides a reasoned analysis of its decision (quotation omitted)). As

explained previously, APHIS determined that the new rule was necessary because the burgeoning

online pet market sparked a large increase in unregulated, sight-unseen sales. Final Rule, 79 Fed.

Reg. 57,228, AR 376. While sight-unseen sales have existed since AWA’s inception, the clubs do

not dispute the growth of the online pet market. They nonetheless argue that the agency’s response

was disproportionate to the problems it identified.

       i)      Inclusion of small breeders

       The clubs first argue that APHIS did not adequately explain why it was extending the new

rule beyond very large breeders in light of the fact that the OIG Report criticizing the online sales

loophole focused on “large” Internet breeders. OIG Report, AR 185–87. Yet, APHIS also received

reports of animal abuse by online retailers independent of the OIG report. Proposed Rule, 77 Fed.

Reg. 28,801, AR 322. Moreover, even assuming the OIG Report was the genesis of the new

rulemaking, the clubs’ argument cuts the issue too finely. Although the report at times refers to

“large” breeders, it also raises concerns about unregulated Internet breeders generally. Id. In fact,

after conducting an informal search to estimate what percentage of online breeders who did not

meet the de minimis exception were unregulated, id. at 186, the OIG recommended simply to

“exclude Internet breeders from the definition of ‘retail pet store[.]’” Id. at 187.

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       The APA does not, in any event, require agencies to tailor their regulations as narrowly as

possible to the specific concerns that generated them. APHIS’s reasoning for the rule change—that

the public cannot inspect or monitor online retailers’ physical facilities—applies to smaller online

sellers as well as large ones, regardless of whether the agency had only received reports of

mistreatment by large online sellers. See id. Surviving arbitrary and capricious review requires

only a reasoned explanation based on the facts found by the agency, e.g., Verizon v. FCC, 740 F.3d

623, 636 (D.C. Cir. 2014), which is precisely what APHIS provided. Furthermore, the gap between

what the OIG Report termed “large” sellers and what the clubs term “small” sellers appears to be

fairly narrow. At the hearing on these motions, the parties acknowledged that five breeding

females—the fewest number that would exceed the de minimis exception—would ordinarily be

capable of producing 50 or more animals a year, see Comments, AR 131,552, which is not too far

off from the 83 dogs owned by some of the “large” animal breeders mentioned in the OIG Report.

See Pls.’ Opp’n at 7.

       ii)     Cost estimates

       The clubs also assert that APHIS underestimated the number of breeders that would be

affected by the rule and the costs associated with compliance. As explained above, APHIS

identified breeders in two online registries, made certain assumptions, and estimated that roughly

3,000 to 5,000 additional breeders would be covered by the rule. Other knowledgeable sources,

such as the American Kennel Club, provided comments estimating a much higher number. The

clubs rely on these later estimates to suggest that the Secretary’s estimate was unreasonable. 2 As

2
  The clubs also emphasize the D.C. Circuit’s offhand comment in Doris Day that “[h]undreds of
thousands of dog breeders throughout the United States raise and sell puppies from their homes.”
315 F.3d at 297. The court did not support this statement with a citation or analysis, it was
immaterial to the opinion’s reasoning and outcome, and the court did not suggest how many of
those household breeders would fall below the de minimis threshold. Accordingly, the comment is
neither binding on nor persuasive to this Court.
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the Secretary points out, however, the clubs offer no better methodology for determining how many

online dog and cat breeders exist. They simply draw from other online breeding registries and, by

adding together multiple available lists, arrive at a much larger number. Not only does this

approach fail to undercut the reasonableness of APHIS’s estimates, the clubs’ methodology does

not appear to correct for breeders who are listed in multiple registries, likely resulting in counting

the same breeders multiple times.

       Beyond the number of affected breeders, the clubs dispute APHIS’s assumptions of the

costs that breeders will incur to construct new facilities. But the breeders’ bark seems bigger than

the regulator’s bite. The impact of facilities costs on the overall industry of hobby breeders appears

to be modest. APHIS estimated that only one percent of newly-regulated breeders would be

required to construct new primary enclosures, Impact Analysis, AR 432, and that the cost of

building new kennels would range from $220 to $2,600 for each affected breeder, id. at 429. The

clubs do not posit any greater percentage. They point instead to comments by four individuals who

asserted that building new facilities to comply with regulations would cost between $20,000 and

$40,000. Pls.’ Mem. at 14 (citing AR at 1840, 2760, 7242, and 731). But neither the clubs nor the

underlying comments explain why complying with the regulations would cost tens of thousands of

dollars. These unsubstantiated comments do not discredit the agency’s estimates. See Helicopter

Ass’n Int’l v. FAA, 722 F.3d 430, 439 (D.C. Cir. 2013) (“An unsubstantiated estimate is

insufficient to call the agency’s figure into question.”).

       Even if a handful of breeders not considered in APHIS’s Impact Analysis would have to

construct new buildings to continue breeding as many dogs as they currently do, that would not

make the rule arbitrary and capricious. APHIS’s substantive regulations require housing facilities

that secure and protect animals from injury; provide adequate heating, cooling, ventilation, and

lighting; and allow access to potable water, washrooms, and drainage of excrement. 9 C.F.R § 3.1.

                                                   13
The clubs assert that some members will now be required to buy or construct new buildings with

plumbing, electrical, and heating systems. Pls.’ Mem. at 26–27. But the regulations permit outdoor

housing facilities with none of those features unless the breed cannot tolerate the prevalent

temperatures in the area. 9 C.F.R. § 3.4(a)(1)(i)-(iii). Thus, if the clubs are correct that some of

their members would have to build new housing to avoid keeping dogs in inappropriate conditions,

it would only substantiate APHIS’s underlying justification for the rule: some unregulated online

retailers may be treating their animals inhumanely.

       The clubs also complain that their members will have to pay to comply with licensing and

reporting requirements. Pls.’ Opp’n at 10. But the clubs do not point to any errors in APHIS’s cost

assumptions for complying with the AWA licensing and reporting requirements. APHIS estimated

licensing and reporting costs to be between $250 and $1,055, depending on the size of the breeder.

Impact Analysis, AR 419–21. These estimates, based on APHIS’s knowledge of the costs of

regulation on industry members in the past, appear well-reasoned.

       iii)    De minimis exception

       The clubs also assert that APHIS failed to adequately explain why it defined the de minimis

exception based on the number of breeding females on site, as opposed to the number of animals a

breeder sells in a year. The clubs suggest that 50 or fewer pets sold per year would have been a

better indication of a “small” breeder. But APHIS explained that it cannot require exempt sellers to

keep records of their sales and thus it would have difficulty determining who actually sold fifty or

fewer animals. Final Rule, 78 Fed. Reg. at 57,241, AR 389. During a single visit, on the other

hand, an inspector can count how many breeding females a seller has. Impact Analysis, AR 461.

This is an adequately reasoned justification for the de minimis exception.

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               C. Regulatory Flexibility Act

        Finally, the clubs argue that APHIS’s analysis of the adverse impact of the rule change

violates the Regulatory Flexibility Act, 5 U.S.C. § 601, et seq. They contend that APHIS violated

section 604 of that Act, which requires an agency promulgating a final rule to prepare a regulatory

flexibility analysis stating the significant issues raised by public comments, an estimate of the

number of small entities the rule will affect, and a description of the steps the agency has taken to

minimize the economic effect on those entities. Id. §§ 604(a)(2), (4), (6). The Regulatory

Flexibility Act’s “requirements are ‘[p]urely procedural’” and only require the agency to describe

the required topics. Nat’l Tel. Co-op. Ass’n v. FCC, 563 F.3d 536, 540 (D.C. Cir. 2009) (quoting

U.S. Cellular Corp. v. FCC, 254 F.3d 78, 88 (D.C. Cir. 2001)). The clubs do not suggest that

APHIS failed to address the required topics, but rather dispute the merits of the agency’s analysis.

See Pls.’ Mem. at 27. The Regulatory Flexibility Act does not provide another forum for the clubs

to chew over their substantive arguments. The APA governs the merits of the matter and, as

established above, APHIS’s reasonable construction of “retail pet store” keeps it out of the APA

doghouse.

        IV.    Conclusion

        For reasons stated above, the Court will grant the Defendants’ and Intervenor-Defendant’s

motions for summary judgment and deny the Plaintiffs’ motion. The Court will issue an order

consistent with this opinion.

                                                              CHRISTOPHER R. COOPER
                                                              United States District Judge

Date:    November 7, 2014

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