The opinion of the court was delivered by: GESELL
These consolidated cases involve review of a regulation
issued by the Secretary of Agriculture implementing the 1977 congressional amendment to the National School Lunch and Breakfast programs. By determining what foods are deemed non-nutritious and by prohibiting the sale of certain competing non-nutritious foods on school premises until after lunch, the Secretary's regulation has raised highly emotional responses. The various plaintiffs in these cases, having been unsuccessful in persuading the Secretary of their divergent points of view, now vent upon the Court their frustrations over the results of the regulatory process. Plaintiffs in Civil Action No. 80-0243, Community Nutrition Institute ("CNI") and others, criticize the regulation for not going far enough in several particular respects, while the National Soft Drink Association ("NSDA") seeks to enjoin all aspects of the proposed rule in Civil Action No. 80-1093.
For more than 30 years, Congress has recognized the desirability of providing school children with nutritious foods during the school day. Legislation to further this national health policy has included the authorization of grants-in-aid and the promotion of other cooperative efforts with the states.
It has long been recognized that foods sold in competition with the school lunch and school breakfast programs might impede the nutritional objectives of such programs, promote waste and confuse children as to the relative nutritional value of different foods.
In 1977, Congress authorized the Secretary of Agriculture to regulate the sale of such competitive foods. Pub.L.No.95-166, § 17; 91 Stat. 1345, (1977) U.S. Code Cong. & Admin. News p. 3517. In conferring this authority on the Secretary, Congress expected and intended that new affirmative steps would be taken to restrict access by school children to foods of low nutritional value. See S.Rep.No.277, 95th Cong., 1st Sess. 17 (1977); H.R.Rep.No.708, 95th Cong., 1st Sess. 44, reprinted in (1977) U.S. Code Cong. & Admin. News, pp. 3555, 3573. The legislative debates convey an unmistakable concern that "junk foods," notably various types of candy bars, chewing gum and soft drinks, not be allowed to compete in participating schools. E.g., 123 Cong.Reg. 21766 (Sen. McGovern), 21778 (Sen. Dole); 123 Cong.Rec. H11669 (daily ed. Oct. 27, 1977) (Rep. Perkins).
The Secretary issued the regulation here under attack after two years of thorough examination and analysis. He had the benefit of elaborate input from representatives of state government, school systems, parents, students, citizens-at-large, and the potentially affected industries, as well as assorted health and nutrition experts.
In testing the reasonableness of the regulation, the Court has reviewed some of the raw data available to the Secretary. Obvious administrative problems must be taken into account. Moreover, while remaining conscious of the need to protect children from nutritional harm, it is necessary to have in mind the evolving learning in the nutrition field and to avoid judgments that reflect excessive responses to partially known conditions.
Jurisdiction and Standing
At the outset, the Secretary contends that the Court lacks jurisdiction to review the regulation, because Congress intended his action to be purely discretionary. 5 U.S.C. § 701(a)(2) (1976). The Secretary was not, however, directed to proceed without guidance from Congress. Although the statute does not contain more than general language, it is apparent that agency expertise was to be exercised to meet declared purposes. Sale of nutritious foods, as sanctioned by the Secretary, was to be permitted. The Secretary was authorized to bar competing non-nutritious foods that did not make a sufficient contribution to children's dietary habits. Thus circumscribed, administrative discretion was far from complete, and in the absence of any indication in the statute suggesting nonreviewability it is clear that jurisdiction exists under the Administrative Procedure Act. See Barlow v. Collins, 397 U.S. 159, 165-67, 90 S. Ct. 832, 836-838, 25 L. Ed. 2d 192 (1970).
The claim that plaintiff lacks standing to sue is equally without merit here. The Secretary argues that because the thrust of the statute is directed to the food eaten by school children, groups generally interested in nutrition and the soft drink manufacturers who face economic losses have only concerns or injuries that do not satisfy the zone of interest test. See generally Barlow v. Collins, supra; Association of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150, 90 S. Ct. 827, 25 L. Ed. 2d 184 (1970). The Court does not read the cases this narrowly. The applicable "zone" covers interests regulated as well as protected by the statute in question. Association of Data Processing Serv. Orgs. v. Camp, supra, 397 U.S. at 153, 90 S. Ct. at 829. Plaintiffs in No. 80-0243 include individuals, and organizations speaking for individuals, whose health and nutrition interests are affected by the Secretary's action. And surely an industry such as the soft drink manufacturers, directly regulated by the challenged rule, can be heard. Standing will be recognized.
Overall Rationality of the Regulation
The competitive food regulation was promulgated under informal rulemaking procedures of the Administrative Procedure Act, 5 U.S.C. § 553 (1976). It is established that such agency action deserves considerable deference when tested in the context of the rulemaking process. The regulation is to be set aside, wholly or in part, only if found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). See Ethyl Corp. v. EPA, 176 U.S. App. D.C. 373, 541 F.2d 1, 34 (D.C.Cir.), cert. denied, 426 U.S. 941, 96 S. Ct. 2663, 49 L. Ed. 2d 394, 96 S. Ct. 2662 (1976). Where, as here, the interests at stake are not merely economic but include the health and well-being of children, thorough scrutiny of administrative action is both appropriate and desirable. National Assn. of Farmworkers Orgs. v. Marshall, 202 U.S. App. D.C. 317, 628 F.2d 604 (D.C.Cir. 1980); Wellford v. Ruckelshaus, 142 U.S. App. D.C. 88, 439 F.2d 598, 601 (D.C.Cir. 1971). But in assuring itself that full consideration has been given to all significant factors, the Court need not find that the administrator's choice was optimal. So long as the decision has a reasoned basis and support in the record, the Court may not substitute its own judgment for that of the agency. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S. Ct. 814, 823, 28 L. Ed. 2d 136 (1971).
In this regard, it should be obvious that the Secretary need not answer each of the thousands of comments he received over a two-year period. See Automotive Parts & Accessories Assn. v. Boyd, 132 U.S. App. D.C. 200, 407 F.2d 330, 338 (D.C.Cir. 1968). Nor does every non-frivolous "substantive" inquiry merit a head-on response in the agency's general statement under 5 U.S.C. § 553(c). Instead, the Secretary is obligated to identify and comment on only major issues raised during the proceeding which are central to his exercise of regulatory discretion. Judgments as to what issues are vital and material also are susceptible to review under the arbitrary and capricious standard. Home Box Office, Inc. v. FCC, 185 U.S. App. D.C. 142, 567 F.2d 9, 35 (D.C.Cir.), cert. denied, 434 U.S. 829, 98 S. Ct. 111, 54 L. Ed. 2d 89 (1977).
The Secretary is claimed to have acted beyond his power and arbitrarily in both his choice of a substantive approach and his failure to address various criticisms and alternative proposals when announcing the regulation. Substantively, it is urged that the congressional purpose could best be achieved by affirmatively designating specified foods as qualified for use, rather than restricting the types of food that are made available. The statement of this objection almost alone defeats its force. Congress intended to authorize regulation only of non-nutritious foods. H.R.Rep.No.708, supra at 44. The nutrient density standard rationally furthers this goal by excluding certain food categories on the basis of a per calorie yardstick widely accepted in the scientific community. The choice of whether to proceed by approval or restriction was within the Secretary's sound discretion. The rule does not purport to prescribe the ideal meal, nor does it address the particulars of an overall balanced diet. This is entirely sensible given the limited congressional authorization and considerations of feasibility amply documented on the record. Incomplete scientific knowledge in the field, recognized variations in nutritional effects by age, sex, race, and geographic region, and the enormous administrative costs of formulating and updating a food endorsement system all support the agency's decision to proceed cautiously by separating out known non-nutritious categories while encouraging nutritious meal service.
Further, it is not arbitrary for the agency to apply its nutrient density standard only to certain categories as an initial baseline approach. The Secretary recognized that a regulatory scheme having precautionary objectives and addressing unsettled areas of scientific inquiry must necessarily be somewhat imprecise. His choice of four classes of foods, based on broad and undisputed evidence of their minimal nutritional value, is a reasonable first step. The present refusal to expand restricted categories by prescribing limits for fat, sodium and sugar content of competitive foods, which is attacked by CNI, must be viewed in this light. Lack of a scientific consensus and inadequacy of existing data on these food components justify the more gradual approach adopted. The petition procedure, permitting both ...