Summary
The Ninth Circuit reviewed a challenge under the Administrative Procedure Act to federal regulations establishing the National Bioengineered Food Disclosure Standard. The court held that the Agricultural Marketing Service legally erred by generally excluding highly refined foods from the disclosure requirement, affirmed the agency’s use of the term “bioengineered,” and directed prospective vacatur of two invalid disclosure-format regulations. The court reversed in part, affirmed in part, and remanded.
Topics
Practice areas
Questions Presented
- Whether the district court's ambiguous judgment implicitly granted summary judgment to defendants on plaintiffs' remaining claims, thereby creating an appealable final judgment.
- Whether at least one plaintiff had Article III standing for each APA claim.
- Whether the AMS acted contrary to law by excluding highly refined foods made from bioengineered ingredients when modified genetic material was not detectable under 7 C.F.R. § 66.9.
- Whether the AMS had statutory authority under 7 U.S.C. § 1639b(b)(2)(B) to address detectability by setting appropriate amounts of bioengineered substance that qualify a food as bioengineered.
- Whether the AMS acted arbitrarily and capriciously by requiring the uniform use of the term bioengineered rather than allowing terms such as genetically engineered or GMO.
- Whether the district court abused its discretion by remanding 7 C.F.R. §§ 66.106 and 66.108 without vacatur.
Holdings
- The district court's ambiguous September 2022 judgment is construed, in light of the record and procedural history, as implicitly granting summary judgment to the AMS and intervenors on the remaining claims. The judgment therefore finally disposed of all claims and was appealable under 28 U.S.C. § 1291.
- The plaintiffs established Article III standing, and because at least one plaintiff had standing to assert each of the three APA claims, the court could reach the merits without determining the standing of every plaintiff.
- The AMS acted contrary to law under the APA by treating food made from bioengineered ingredients as outside the definition of bioengineered food whenever modified genetic material was not detectable under the particular methods in 7 C.F.R. § 66.9.
- Although the AMS's existing detectability rule was unlawful because it was not adopted as an exercise of § 293(b)(2)(B) authority, the statute permits the agency to address detectability by setting appropriate amounts of bioengineered substance that qualify a food as bioengineered.
- The AMS's decision to require the uniform use of bioengineered, rather than allowing genetically engineered, genetically modified, or GMO to independently satisfy the disclosure requirement, was not arbitrary and capricious.
- The district court abused its discretion by remanding 7 C.F.R. §§ 66.106 and 66.108 without vacatur. Vacatur and remand is the default remedy for unlawful agency action, and the record did not justify allowing the unlawful rules to remain in effect throughout the administrative process.
Key quotations
“In common parlance, “contain” means “[t]o have within” or “[t]o have as a component or constituent part.”” (25)
“Even without having to resort to epistemological philosophizing, there is an obvious and important difference between whether a substance is actually present and whether, using a particular method, one is able to detect that the substance is present.” (26)
“The necessary concomitant of that level-setting authority is that, once an “appropriate” level is set, the potential presence of bioengineered substances below that level will not suffice “in order for the food to be a bioengineered food.”” (31-32)
“Where, as here, “a court holds an agency action unlawful, vacatur and remand is the default remedy under the APA, but the court retains equitable discretion in ‘limited circumstances’ to remand a decision without vacatur while the agency corrects its errors.”” (48)
Factual background
Congress directed the Secretary of Agriculture to establish a national mandatory disclosure standard for bioengineered foods, and the Secretary delegated that authority to the Agricultural Marketing Service. The AMS promulgated regulations requiring disclosures using the term bioengineered and excluding foods made from bioengineered ingredients when modified genetic material was not detectable under specified regulatory methods. The regulations also authorized electronic-or-digital-link and text-message disclosure options, despite the agency's finding that electronic or digital methods did not provide consumers sufficient access under ordinary shopping conditions. Plaintiffs, including grocery retailers and public-interest organizations, challenged these regulatory choices under the APA.
Procedural history
Plaintiffs filed suit in July 2020 challenging three aspects of Agricultural Marketing Service regulations under the APA. The district court permitted three industry organizations to intervene, granted plaintiffs summary judgment on the challenges to 7 C.F.R. §§ 66.106 and 66.108, remanded those provisions without vacatur, and denied summary judgment in all other respects. Because the judgment was ambiguous about the remaining claims, the Ninth Circuit construed it as implicitly granting summary judgment to defendants on those claims and therefore treated it as a final appealable judgment. The Ninth Circuit held that plaintiffs had standing, reversed in part, affirmed in part, and remanded.
Remand instructions
The district court must grant summary judgment to plaintiffs on the APA cause of action challenging the detectability-based exclusion of highly refined foods, remand the relevant regulations to the AMS, and determine after receiving party input whether any relevant provisions should be vacated. The district court must also prospectively vacate 7 C.F.R. §§ 66.106 and 66.108 after receiving party input on the appropriate form and timing of prospective vacatur. The district court's judgment was affirmed in all other respects.