offered by the agency's own experts in the field.
Even if this Court were to exclude certain or all of the documents at issue on the basis that they might be considered internal agency memoranda, review of the remaining portions of the 'administrative record' would lead to the same conclusion on the merits of this case. The edited record proffered by HHS is replete with credible evidence of the danger of raw milk consumption, and the support of various organizations, both within and without the Government, for a federally imposed interstate ban. On the other hand, there is a noticeable lack of evidence in the record to allow us to say that the Secretary's refusal to institute a pasteurization requirement, on the basis that regulation is more appropriate at the state level, was rationally related to the facts found by the agency. For the reasons discussed below, and in light of the administrative record, the denial of Public Citizen's petition and HHS's refusal to promulgate rules banning the interstate sale of raw milk was arbitrary and capricious.
III. The Secretary's Action under the Arbitrary and Capricious Test
Prior to a more detailed explanation of the review of the Secretary's decision, this Court must first address the unusual procedural posture of this case. HHS has actually taken two separate "actions" with regard to raw milk. First, the Secretary failed to lift the 1974 stay of the 1973 standard of identity requirements as they apply to certified raw milk even though overwhelming evidence of the risks associated with the consumption of raw milk, both certified and non-certified, has been presented.
Second, the Secretary denied Public Citizen's 1984 petition requesting HHS to promulgate a new regulation banning all raw milk sales.
Public Citizen never directly petitioned HHS to lift the 1974 stay. Plaintiffs challenge HHS's failure to do so in Count I of their complaint, claiming that HHS effectively rescinded its 1974 pasteurization requirement without providing the public with notice and an opportunity to comment as required by the APA. Plaintiffs further argue that the denial of their petition constitutes a de facto recission of the stayed standard of identity regulation. In plaintiffs' prayer for relief, this Court is requested to reinstate the 1974 pasteurization requirement as well as to direct HHS to initiate new rulemaking regarding both interstate and intrastate sales of raw milk, together with any other further relief the court finds proper.
HHS contends that there is no basis for judicial relief with regard to the 1974 stay, where plaintiffs' initial challenge is made in this court proceeding. Since Public Citizen did not petition HHS to reconsider the 1974 stay, technically, plaintiffs have not exhausted their administrative remedies.
As a result, Public Citizen's request with regard to the 1974 stay is not properly before the court and it may not be ruled on directly.
We turn, therefore, to the Secretary's second action, the denial of Public Citizen's petition asking HHS to engage in rulemaking, and we first consider the appropriate scope of review. Notice and comment rulemaking conducted pursuant to section 553 of the APA is unlawful if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." APA § 706(2)(A). This review is focused and restricted, and it does not permit the court to substitute its judgment for that of the agency. Citizens to Preserve Overton Park, 401 U.S. at 416, 91 S. Ct. at 823. "Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a 'rational connection between the facts found and the choice made'." Motor Vehicles Manufacturers Ass'n v. State Farm Mutual, 463 U.S. 29, 103 S. Ct. 2856, 2866-67, 77 L. Ed. 2d 443 (citation omitted).
In this case, however, the agency decided after years of inquiry and lengthy proceedings, not to engage in rulemaking. The Secretary argues that the standard of review to be applied to denials of petitions for rulemaking is even narrower than that applied to review of the promulgation of a rule. "The law in this Circuit makes clear that the scope of review . . . of an agency decision to deny a rulemaking petition is very narrow. Such review is limited to ensuring that the agency has adequately explained the facts and policy concerns it relied on, and that the facts have some basis in the record." Arkansas Power & Light Co. v. I.C.C., 233 U.S. App. D.C. 189, 725 F.2d 716, 723 (D.C.Cir.1984); see also New England Coalition on Nuclear Pollution. It is this more deferential standard of review HHS would have this Court adopt.
A heightened degree of deference by the reviewing court is derived from policy considerations concerning the competence of the judiciary to 'second guess' a discretionary determination made by the agency charged with particular expertise in an area. The judiciary's expertise lies in statutory interpretation of Congress' mandate as expressed in statutes which give administrative agencies their authority to take certain types of action. When a court is acting in this capacity, the reasons for judicial deference are diminished. Alternatively, "an agency's discretionary decision not to regulate a given activity is inevitably based, in large measure, on factors not inherently susceptible to judicial resolution -- e.g., internal management considerations as to budget and personnel; evaluations of its own competence; weighing of competing policies within a broad statutory framework." NRDC v. SEC, 196 U.S. App. D.C. 124, 606 F.2d 1031 (D.C.Cir.1979). In these types of cases judicial deference is appropriate.
These reasons for judicial deference to an agency's decision not to act, however, are not present in the case at bar. The Secretary's decision to refuse to regulate the sale of certified raw milk does not appear to be based on internal management considerations as to budget and personnel. Here, the sale of uncertified raw milk has already been regulated by the FDA. No evidence has been presented which shows that to additionally require the regulation of certified raw milk, contrary to the Secretary's bare assertion that resources will be diverted from truly national problems, will impose a significant burden on the agency's budget or personnel. In fact, the major expenditure of agency resources has already been incurred. No further investigation or hearings need be held, and no additional administrative record need be compiled as these events have already occurred. Accordingly, the incremental increase in expenditures HHS will incur, in order to regulate certified raw milk in addition to uncertified raw milk, is very small.
Nor can the Secretary's inaction be based on evaluations of the FDA's competence to regulate certified raw milk. If the FDA is able to competently regulate raw milk sales, there is no reason why it is not equally able to competently regulate the very limited certified raw milk sales.
The Secretary has not advanced any specific competing policy which outweighs its primary responsibility to protect the public health and welfare and makes regulation of raw milk sales impossible. Assertions of counsel made in litigation memoranda that this Court should review the Secretary's decision under a more deferential standard, without any supporting justifications for deference, are not sufficient to overcome the strong presumption of reviewability of agency action under section 10(a) of the APA. There has been no "clear showing that pragmatic considerations [make] judicial review inappropriate." Bargmann v. Helms, 230 U.S. App. D.C. 164, 715 F.2d 638, 640 (D.C.Cir.1983) (citations omitted).
In review of a decision not to enact a rule, there "is the additional concern that . . . unless the agency has carefully focused its considerations, judicial review will have an undesirably abstract and hypothetical quality." NRDC at 1046-47. The NRDC court explained that in a case where "the agency has in fact held extensive rulemaking proceedings narrowly focused on the particular rules at issue, and has explained in detail its reasons for not adopting those rules, . . . the questions posed will be amenable to at least a minimal level of judicial scrutiny. Id.; accord National Black Media Coalition v. FCC, 191 U.S. App. D.C. 55, 589 F.2d 578 (D.C.Cir.1978); Action for Children's Television v. FCC, 183 U.S. App. D.C. 437, 564 F.2d 458 (D.C.Cir.1977).
This case, like NRDC, is one in which there were formal rulemaking proceedings in 1973, followed by 12 years of agency information gathering with regard to those rules, a public hearing on the matter in 1984, and the compilation of a full administrative record, all pertaining to the exact matter about which plaintiffs' petitioned HHS. It is unlikely that the issues involved or the proposed rule could become any more focused. Thus, there is no abstract or hypothetical quality about this Court's review of the Secretary's inaction.
The detail of explanation given by the Secretary in her reasons for refusing to promulgate a rule banning certified raw milk sales is rather brief and conclusory. That does not, however, indicate that the decision is any less amenable to judicial review, but rather that the Secretary lacked a reasoned basis for that decision.
Having determined that the Secretary's decision not to promulgate a rule is reviewable under the arbitrary and capricious standard, we must consider whether that decision was in fact arbitrary and capricious. An agency's decision is arbitrary and capricious
if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
Motor Vehicle Mfr. Ass'n. v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 103 S. Ct. 2856, 2867, 77 L. Ed. 2d 443 (1983). In this case the Secretary has indeed offered an explanation for her decision that runs counter to the voluminous evidence to the contrary she had before her.
The crux of the Secretary's explanation for her decision to deny plaintiff's petition is that since a greater amount of raw milk is marketed and consumed locally, rather than shipped interstate, and most illness occurs within the producing locality, the problem is one more appropriately dealt with at the state level. The Secretary claims that interstate sales of certified raw milk are "negligible". There is evidence that most raw milk is produced and consumed locally (mainly in California and Georgia) consistent with state law that permits the sale of unpasteurized milk. The record also shows that there is a serious risk of illness resulting from the consumption of that raw milk which does travel across state lines. The risk is not at all diminished merely because the amount of milk which is sold outside of the producing state is smaller than that sold intrastate. The Secretary failed to recognize that although the relative amount of raw milk that is shipped interstate may be small, the chance of out-of-state residents becoming seriously ill from drinking raw milk remains quite high.
Federal regulation is warranted regardless of the absolute volume of certified raw milk sold interstate. Residents of non-producing states near the producing states do not have access to, and are not represented in, the producing state's political process. A resident of Nevada, for example, who is at risk of becoming ill from the consumption of certified raw milk produced in California and sold in Nevada, cannot turn to a California Congressperson for recourse through the political process. It is precisely in this sort of situation, where a decision made at a local level affects unrepresented persons outside of the locality, that a higher level of government is needed to intervene to protect the interests of the unrepresented parties. While an interstate ban on all raw milk might not solve the problem the producing state faces if intrastate sales are permitted, the residents of the producing state are able to turn to the local political process for redress.
The Secretary's reason for her decision has no rational connection to the undisputed facts in the record.
As such, her decision cannot be upheld. See State Farm. Nothing in the record supports a conclusion that state regulation would be superior to federal regulation. Evidence in the record clearly reflects that the states have been unsuccessful in their individual attempts to regulate the sale of raw milk. The individual states do not have the authority to prohibit sales of raw milk beyond their own boundaries. Only the federal government, under its commerce clause power, may institute a nationwide ban. Even in light of the deferential review this Court must perform, in this case, the action of the Secretary was clearly arbitrary and capricious and must be reversed.
A remand to the agency for further proceedings would serve no purpose and would only add to the delay already encountered. HHS has spent over thirteen years studying the matter and gathering evidence and a hearing has been held. It is undisputed that all types of raw milk are unsafe for human consumption and pose a significant health risk. The appropriate remedy in this case, therefore, is an order compelling the agency to promulgate a regulation prohibiting the interstate sale of certified raw milk and certified raw milk products, and non-certified raw milk and raw milk products.
"'Administrative rulemaking does not ordinarily comprehend any rights in private parties to compel an agency to institute such proceedings or promulgate rules'". WWHT, Inc. v. FCC, 211 U.S. App. D.C. 218, 656 F.2d 807, 818 (D.C.Cir.1981) (citations omitted). In rare and compelling circumstances, however, the courts have acted to overturn an agency judgment not to institute rulemaking proceedings. Id. The limited rule which emerges from those cases is that "an agency may be forced by a reviewing court to institute rulemaking proceedings if a significant factual predicate of a prior decision on the subject (either to promulgate or not to promulgate specific rules) has been removed." Id.
The extremely rare circumstances the Arkansas and WWHT courts referred to, which were necessary before rulemaking would be compelled, are present here. Over thirteen years ago, the Secretary recognized the hazard of raw milk consumption and formally regulated its sale in interstate commerce. That action was partially stayed, so that the Secretary could determine, through a public hearing, the factual issue of whether certified raw milk was safe to consume.
As the evidence accumulated over those thirteen years, and the results of that hearing have conclusively shown, and as the Secretary now concedes, certified raw milk is unsafe. There is no longer any question of fact as to whether the consumption of raw milk is unsafe. The factual predicate to the Secretary's lifting the 1973 stay has indisputably been removed.
Public Citizen asks this Court to compel the agency to promulgate a rule banning both interstate and intrastate sales of raw milk. While we must agree that a rule banning the interstate sale of raw milk is appropriate, at this time there is no indication that a rule banning the intrastate sale of raw milk is necessary to effectuate the interstate ban. Accordingly, the Court declines to order the promulgation of a rule banning intrastate sales of raw milk. Assuming the interstate ban is effective without an intrastate ban, it is up to the individual states to decide on such matters of purely local concern. Should it appear that the interstate sale of raw milk continues, it is within HHS's authority at that time to institute an intrastate ban as well. An Order consistent with this Memorandum Opinion will be entered this date.
Upon consideration of the parties' cross-motions for summary judgment, supporting and opposing memoranda, and the entire record, it is this 31st day of December, 1986,
ORDERED that plaintiffs' motion for summary judgment be granted; it is further
ORDERED that defendant's motion for summary judgment be denied; and it is further
ORDERED that Food and Drug Administration promulgate, and the Secretary of the Department of Health and Human Services approve a rule banning the interstate sale of all raw milk and all raw milk products, both certified and non-certified, based on the now completed rulemaking proceedings and consistent with the opinion herein.