{"id":151,"date":"2018-12-28T13:57:40","date_gmt":"2018-12-28T17:57:40","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/animallawdevelopments\/?p=151"},"modified":"2018-12-28T13:57:40","modified_gmt":"2018-12-28T17:57:40","slug":"eighth-circuit-upholds-trump-administrations-scuttling-of-packers-and-stockyards-act-rules","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/2018\/12\/28\/eighth-circuit-upholds-trump-administrations-scuttling-of-packers-and-stockyards-act-rules\/","title":{"rendered":"Eighth Circuit Upholds Trump Administration’s Scuttling of Packers and Stockyards Act Rules"},"content":{"rendered":"

By John M. Simpson.<\/p>\n

The U.S. Court of Appeals for the Eighth Circuit recently denied a petition for review of the Secretary of Agriculture’s actions to withdraw interim final and proposed regulations under the Packers and Stockyards Act (PSA).\u00a0 Organization for Competitive Markets, et al., v. Dep’t of Agriculture, et al.<\/em>, No. 17-3723 (8th Cir. Dec. 21, 2018).\u00a0<\/a> The\u00a0 interim final and proposed rules had been issued by the\u00a0U.S. Department of Agriculture (USDA) in the Obama Administration in late 2016 but were scuttled by the Trump Administration.\u00a0 <\/p>\n

Sections 202(a)-(b) of the\u00a0PSA make it unlawful for any packer, swine contractor, or live poultry dealer to “use any unfair, unjustly discriminatory, or\u00a0deceptive practice” or\u00a0“give any undue or unreasonable preference or advantage to any particular person or locality in any respect.”\u00a0 7 U.S.C. \u00a7\u00a0 192(a)-(b).\u00a0 For about 75 years, USDA had interpreted\u00a0these provisions as not requiring proof of an anti-competitive effect, but Congress had re-enacted the PSA seven times without endorsing the agency’s view.\u00a0 Moreover, at least six federal circuits had disagreed with USDA’s position.<\/p>\n

In the waning days of the Obama Administration, USDA attempted to enshrine its interpretation in the PSA regulations.\u00a0 The agency issued an interim final rule on\u00a0December 20, 2016, entitled the “Farmer Fair Practices Rules” that declared that a finding of an adverse effect on competition is not necessary in all PSA cases.\u00a0 USDA\u00a0also issued two proposed\u00a0amendments to the PSA regulations\u00a0 that (a) defined when a practice\u00a0would be violative of the PSA regardless of\u00a0whether it harms or is likely to harm competition and (b) listed six non-exclusive criteria\u00a0that the\u00a0Secretary would consider in determining whether the PSA has been violated.\u00a0 After the\u00a0Trump Administration took over, USDA withdrew the interim final rule and issued notice that would take no further action on the proposed rules.\u00a0 USDA explained\u00a0that the interim final rule, which conflicted with several circuit court decisions, would engender unproductive litigation\u00a0and that there was no good cause\u00a0that warranted the issuance of the interim final rule without additional public comments.\u00a0 As to cancellation of the proposed rules, USDA explained that the elimination of specific unfair or deceptive practices was better achieved on a case-by-case basis.<\/p>\n

On a petition for direct review to the Eighth Circuit, the Court rejected the petitioners’\u00a0 argument that USDA’s reasoning was “arbitrary and capricious” in violation of the federal Administrative Procedure Act (APA):<\/p>\n

An agency\u2019s decision to retain the status quo is more easily defensible than a shift in policy would be. \u00a0Here, USDA explained that it was withdrawing the interim final rule and taking no further action on the proposed regulations because the proposed regulatory change of course would generate protracted litigation, adopt vague and ambiguous terms, and might prevent innovation and foster vertical integration that would hinder new market entrants. 82 Fed. Reg. at 48,603-04. These are legitimate regulatory and substantive concerns.\u00a0 We cannot say that the USDA actions at issue were arbitrary and capricious.\u00a0 We deny the petition to review under 5 U.S.C. \u00a7 706(2)(A).<\/p><\/blockquote>\n

Slip op. at 8.\u00a0\u00a0 The court also rejected the petitioners’ claim that the USDA’s action was agency action “unlawfully withheld or unreasonably delayed” because it was allegedly contrary to a provision of the 2008 Farm Bill setting a two-year deadline for the\u00a0promulgation of certain PSA regulations:<\/p>\n

We are wary of becoming the ultimate monitor of Congressionally set deadlines, as \u201ccourts are not charged with general guardianship against all potential mischief in the complicated tasks of government.\u201d …\u00a0\u00a0Congress gave USDA an ambiguous directive in the 2008 Farm Bill.\u00a0 USDA made extensive efforts to comply, promulgating three final regulations and a proposed regulation on the fourth controversial subject it declined to finalize.\u00a0 Congress has demonstrated on-going interest in the issue, can determine that its directive has been unreasonably delayed, and take appropriate action. \u00a0\u201c[I]t must be remembered that legislatures are ultimate guardians of the liberties and welfare of the people in quite as great a degree as the courts.\u201d<\/p><\/blockquote>\n

Id<\/em>. at 13 (citations omitted).\u00a0\u00a0 In an interesting footnote, the Court also rejected the notion that, had it agreed with petitioners’ arguments on the merits, the Court could actually have ordered USDA to issue the rules that had been withdrawn:<\/p>\n

For relief, petitioners ask us to \u201corder the Department to issue\u201d the rules and\u00a0regulations it withdrew.\u00a0 This reflects a distressing disregard of the separation of powers mandated by the Constitution.\u00a0 Article III grants us the \u201cjudicial Power\u201d to decide \u201cCases\u201d and \u201cControversies,\u201d not the legislative power to rewrite the PSA or the executive power to promulgate interpretive regulations.<\/p><\/blockquote>\n

Id<\/em>. at 5 n.3.<\/p>\n","protected":false},"excerpt":{"rendered":"

By John M. Simpson. The U.S. Court of Appeals for the Eighth Circuit recently denied a petition for review of the Secretary of Agriculture’s actions to withdraw interim final and proposed regulations under the Packers and Stockyards Act (PSA).\u00a0 Organization for Competitive Markets, et al., v. Dep’t of Agriculture, et al., No. 17-3723 (8th Cir. … <\/p>\n

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