Summary of a Recent
Judicial Development in
Administrative Law

Court Issues Preliminary Injunction Enjoining
USDA Action on Mad Cow Disease

Harrison M. Pittman
Staff Attorney

Summary of Decision

In Ranchers Cattlemen Action Legal Fund v. Veneman, No. 04-BLG-RFC, 2004 WL 1151970 (D. Mont. May 5, 2004) (hereinafter Ranchers II), the United States District Court for the District of Montana issued a preliminary injunction that enjoined the United States Department of Agriculture (USDA) from implementing the terms of an agency memorandum that would have lifted a prohibition "on the importation of most kinds of bovine meat and other tissue from Canada for human consumption." The relevant facts and substantive rulings involved in Ranchers II are found in Ranchers Cattlemen Action Legal Fund v. Veneman, No. 04-CV-51, 2004 WL 1047837 (D. Mont. Apr. 26, 2004) (hereinafter Ranchers I).

Background

The USDA has for several years issued regulations that prohibit the importation of ruminants and ruminant meat products from countries where bovine spongiform encephalopathy (BSE), commonly referred to as mad cow disease, is known to exist. See Ranchers I, 2004 WL 1047837, at *1. In May of 2003 a cow infected with BSE was discovered in Canada. See id. On May 29, 2003, the Animal and Plant Health Inspection Service, an agency within the USDA, responded by issuing a regulation that added Canada as a country from which ruminants and ruminant meat products could not be imported. See id. The regulation, however, provided that "'the Administrator may upon request in specific cases permit ruminants or products to be brought into or through the United States under such conditions as he or she may prescribe, when he or she determines in the specific case that such action will not endanger the livestock or poultry of the United States.'" Id. (quoting 40 C.F.R. § 93.401(a)). On August 8, 2003, USDA Secretary Ann Veneman announced that the USDA "'will begin immediately to accept applications for import permits for certain low-risk ruminant-derived products from Canada,'" including "'[b]oneless bovine meat from cows under 30 months of age.'" Id. On November 4, 2003, the USDA published a proposed rule that sought to amend its May 29, 2003, regulation. See id. at *2. The November 4, 2003, proposed rule would have allowed live ruminants and ruminant products, including "fresh meat from bovines less than 30 months of age, fresh bovine liver, and fresh bovine tongues," to be imported from Canada. Id.

An undated memorandum from APHIS addressed to "'U.S. Importers, Brokers, and Other Interested Parties'" (hereinafter APHIS memorandum) provided that "effective April 19, 2004, all existing permits to import beef from Canada 'will be deemed to cover all edible bovine meat products . . .,' provided each shipment is accompanied by a statement that the meat was processed in 'establishments that are certified . . . to [the Food Safety and Inspection Service] as eligible for export to the United States.'" Id. The APHIS memorandum effectively lifted a ban "on the importation of most kinds of bovine meat and other tissue from Canada for human consumption." Id. at *1.

Arguments

Plaintiff Ranchers Cattlemen Action Legal Fund (R-CALF) challenged the APHIS memorandum and requested a temporary restraining order to prevent the terms of the memorandum from being implemented. See id. Defendant USDA Secretary Ann Veneman argued that judicial review was inappropriate because there had been no "final agency action." See id. at *3. The defendant further argued that the "August 8, 2003 notice that importation of boneless beef was no longer prohibited and the April19, 2004 [APHIS] memorandum . . . were authorized by 40 C.F.R. § 93.401(a), the provision . . . establishing the ban on imports from countries with BSE that allows case-by-case exceptions, pursuant to permit." Id.

Analysis and Holdings

The court explained that for an agency action to be considered a final agency action it "should mark the 'consummation' of the agency's decision-making process" and "must be one by which rights or obligations have been determined, or from which 'legal consequences will flow.'" Id. at *4 (citations omitted). The court held that the APHIS memorandum constituted a final agency action and that it was therefore judicially reviewable. See id. The court stated that the face of the memorandum establishes "'new criteria" for importing bovine meat products from Canada and that "all existing importation permits are now 'deemed to cover all edible bovine meat products.'" Id. It added that the APHIS memorandum "is a statement of general applicability covering all existing permits to import beef from Canada and governing any future permits. It is intended to affect individual rights and have the force of law. Thus, notice-and-comment rulemaking was required before its adoption." Id. (citation omitted).

The court next considered whether it should grant R-CALF's request for a temporary restraining order. See id. at *5. The court explained that a moving party is entitled to a temporary restraining order if it can show either "a combination of probable success on the merits and the possibility of irreparable injury," or "that the plaintiff's papers raise 'serious questions' on the merits and the balance of hardships tips sharply in its favor." Id. at *5 (citations omitted). The court also explained that a temporary restraining order "is not a preliminary adjudication on the merits but rather 'a device for preserving status quo and preventing irreparable loss of rights before judgment.'" Id. (citation omitted). See also id. (stating that "[t]he standard for issuing a temporary restraining order is substantially identical to the standard for issuing a preliminary injunction.") (citation omitted).

The court stated that under the Administrative Procedures Act (APA) R-CALF will succeed on the merits if it can establish that the APHIS memorandum was "'arbitrary, capricious, an abuse of agency discretion, or otherwise not in accordance with the law' or taken 'without observance of procedure required by law.'" Id. (citing 5 U.S.C. § 706(2)(A) and (D)). The court noted that the parties did not dispute that the APHIS memorandum was issued without complying with APA notice-and-comment procedures and that it had previously determined that the memorandum was a final agency action. See id. The court thus concluded that "it follows that it is likely Plaintiff will be able to demonstrate that Defendant violated the APA." Id. (citation omitted).

The court also concluded that there was a significant threat of irreparable injury. See id. at *8. It stated that "[t]he prevalence of BSE in Canadian cattle is not known, but two cases of BSE in Canadian-raised cows have been detected in the past 11 months, through very limited testing. If imported Canadian beef products contain the BSE agent, . . . [the APHIS memorandum] action may result in a fatal, non-curable disease in humans who consume those products." Id. The court also noted testimony from an expert in agricultural economics who opined that if another case of BSE were discovered in Canadian cattle "the effect on demand for U.S. cattle could cripple the cattle growing industry" and that the "adverse impact on the business of R-CALF's . . . members could be billions of dollars, and it would be substantially greater than the economic benefit of lower beef prices resulting from the greater supply." Id.

The court further concluded that the defendant would not be harmed significantly if a temporary restraining order were issued and that the balance of harms "tips sharply in favor" of R-CALF. See id. It noted that the restraining order would primarily effect Canadian beef exporters. See id. It also noted that while the increase in the beef supply that resulted from Canadian imports may slightly reduce the price of meat for consumers, "USDA's economic analysis for the November 4, 2003 proposed rule predicts that even a full resumption of previous levels of imports would only reduce the price of beef by $0.05-0.06 per pound." Id. (citation omitted).

The court subsequently converted the temporary restraining order into a preliminary injunction. See Ranchers II, 2004 WL 1151970, at *1. The court stated that the preliminary injunction will terminate five days after R-CALF is notified of final agency action on the November 4, 2003, proposed rule and that Secretary Veneman must provide at least five days' notice of final agency action to R-CALF. See id. The court listed in a document attached to its order the bovine meat products that may be imported from Canada while the preliminary injunction is in effect. See id. This list was not available on the date this article was written for publication.

The case was decided on May 5, 2004; this summary was posted June 10, 2004.