Activist Case Involving Chicken Farm Fails in D.C. Circuit on Standing Grounds

On June 22, 2021, the U.S. Court of Appeals for the District of Columbia Circuit dismissed an action brought by Food & Water Watch against the U.S. Department of Agriculture (USDA) challenging the environmental assessment made in connection with the Farm Service Agency’s guarantee of loan to a Maryland chicken farmer.  Food & Water Watch v. U.S. Dep’t of Agriculture, ___ F.3d ___, No. 20-5100 (D.C. Cir. June 22, 2021).  Plaintiff had argued that the agency’s finding of no significant impact for the guarantee violated the National Environmental Policy Act (NEPA).  The district court found standing to sue but rejected the plaintiff’s challenge on its merits.  On appeal, however, the D.C. Circuit ruled that the plaintiff had no Article III standing.

Plaintiff had predicated its standing claim on associational standing and argued that two of its members suffered injury in fact due to the alleged odor and other aspects of the chicken farm and the alleged aesthetic injury to recreational fishing areas.  The farm had four chicken houses housing 192,000 birds at a time, a manure structure, and a composting area, and the farm produced more than 1 million birds per year.  According to the plaintiff (and the district court), an order vacating the loan guarantee  would redress the claimed injuries because, without the guarantee, the farmer’s funding would be at risk and “the farmer would likely comply with additional environmental conditions imposed on the guarantee to continue to receive its benefit.”  Slip op. at 5.

The D.C. Circuit disagreed.  Even if it were assumed that plaintiff had established injury in fact and causation, there was no redressability because it would turn “not only on the actions of the Agency, but the independent actions of the farmer and lender in seeking a new loan guarantee.”  Id. at  7.   Standing had to be assessed at the time suit commenced, which was two years after the loan guarantee had been issued.  Id. at 9.  The court could “only guess how the lender or the farmer would react to a vacatur of the loan guarantee.”  Id.

As the court, in an opinion by Judge Rao, explained:

Considering the facts as they existed in 2017, we hold that Food & Water Watch has failed to establish that it is “likely, as opposed to merely speculative,” that vacatur of the loan guarantee would redress its members’ alleged injuries.  . . . The real question of redressability here is not whether the Agency could or would impose new environmental measures as a condition of the loan guarantee.  Rather, it is whether the lender or the farmer would even seek to have the loan guaranteed if the original guarantee were set aside.  Food & Water Watch speculates the farmer would likely agree to additional environmental measures as a condition of a new loan guarantee. Yet that puts the cart before the horse.

Food & Water Watch bears the burden of demonstrating standing but has provided no evidence that the lender or the farmer would apply for a new loan guarantee. That is, Food & Water Watch has established neither that the lender would foreclose on the loan in the absence of the guarantee, nor that the farmer would be unable to secure sufficient credit elsewhere without the guarantee.

Slip. op at 8 (citation omitted; emphasis added).

Judge Randolph concurred in the result but also “flag[ged] an issue lurking in the appeal, an issue the parties neglected to address and one that may recur.”  Concurring op. at 1.  Judge Randolph observed that there was a serious question whether the Council on Environmental Quality (CEQ) (which had issued NEPA regulations in 2020 excluding loan guarantees from the definition of “major Federal action”) “had Congressional authority to issue any regulations.”  Id.   Quoting Judge Henry Friendly, Judge Randolph noted that “where there is so much smoke, there must be a fair amount of fire, and we would do well to analyze the causes.”  Id. at 2.  Judge Randolph’s separation-of-powers doubts about the authority of the CEQ parallels a dissenting opinion earlier this year by Judge Rao, in which she opined that the present structure of the USDA system of administrative law judges is unconstitutional.

The third judge on the panel (Merrick Garland, now Attorney General) did not participate at oral argument or in the disposition of the case.

This case is among a number of decisions in recent months that we have written about ( here and here) in which federal appellate courts have rebuffed activist lawsuits against or involving the animal protein industry on standing or other grounds.

Often regarded as a dry “technicality,” challenging an activist plaintiff’s standing to sue is often an effective way to end the lawsuit.  The most prominent example of this is the litigation brought by animal rights groups that involved the Ringling Bros. Circus Asian elephants.  That case was dismissed after nearly a decade of litigation and a more than 6-week trial because none of the plaintiffs ultimately had standing.  ASPCA v. Feld Entertainment, Inc., 655 F. Supp. 2d 55 (D.D.C. 2009), aff’d, 659 F.3d 13 (D.C. Cir. 2011).  That outcome, and the parallel RICO case that it spawned, led to a legal fee recovery by the defendant of more than $25 million.