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ARENT v. SHALALA

August 11, 1994

SHEREEN ARENT, et al., Plaintiffs,
v.
DONNA SHALALA, Secretary of the U.S. Department of Health and Human Services, Defendant.



The opinion of the court was delivered by: JUNE L. GREEN

 I. Introduction

 In this case, an individual consumer and two public interest organizations challenge final regulations promulgated by the U.S. Food and Drug Administration (FDA) to implement the Nutrition Labeling and Education Act of 1990 (NLEA). This matter is before the Court on the Plaintiffs' Motion for Summary Judgment and the Defendant's Motion to Dismiss. The Court holds that the regulations are not arbitrary and capricious and therefore, the Defendant's Motion to Dismiss is GRANTED.

 II. Facts

 The NLEA, however, treats differently the nutritional labeling of raw agricultural commodities and fish. The NLEA directed the Defendant to issue voluntary guidelines for grocery stores to provide nutrition information to consumers of the twenty most popular raw fruits, raw vegetables, and types of raw fish. 21 U.S.C. § 343(q)(4)(B). The guidelines would remain voluntary as long as the industry substantially complied with the statute. This arrangement differs from the mandatory nutritional information requirements which apply to other foods. 21 U.S.C. § 343(q)(4)(A).

 Twelve months after November 8, 1990, the NLEA required the Defendant to issue a final regulation defining the circumstances that constitute "substantial compliance" by food retailers with the voluntary guidelines. 21 U.S.C. § 343(q)(4)(B)(ii). The statute states that there is not substantial compliance if a "significant" number of retailers have failed to comply with the guidelines. Id. The size of the retailers and the portion of the market served by retailers in compliance with the guidelines must be considered in determining whether or not the "substantial compliance" standard has been met. Id.

 On November 27, 1991, the FDA published a final regulation which defined "substantial compliance" and explained its methodology in making the determination. 56 Fed. Reg. 60886-60887, 60890. In making its determination, the FDA stated that it would survey 2,000 representative retailers, including all of the chain retailers and a representative sample of independent companies. 21 C.F.R. § 101.43(b). The regulations also state that "substantial compliance" with the regulations occurs if at least sixty percent of all stores in the FDA survey are in compliance with the voluntary guidelines. 21 C.F.R. § 101.43(c). The FDA also determined that any one store which sells produce or raw fish is in compliance with the voluntary guidelines if that store provides nutritional labeling for at least 90 percent of its raw fruits and raw vegetables and 90 percent of its raw fish. 21 C.F.R. § 101.43(a).

 The NLEA required the Defendant to issue a report thirty months after May 8, 1990, detailing her experience with the guidelines and determining whether there is "substantial compliance" with the guidelines. 21 U.S.C. § 343(q)(4)(C)(i). If the Defendant finds that there is "substantial compliance" with the guidelines, then the Secretary shall issue a report and make "substantial compliance" determinations every two years. 21 U.S.C. § 343(q)(4)(C)(ii). *fn1"

 It also directs the Defendant to issue mandatory regulations if, after a comprehensive survey, the Defendant determines that grocery stores are not in "substantial compliance" with the voluntary guidelines. If there is no "substantial compliance" with the guidelines, the Defendant is required to propose mandatory regulations of the type required for other foods. 21 U.S.C. § 343(q)(4)(D)(i).

 The Plaintiffs argue that 21 C.F.R. § 101.43(c), which permits 40 percent of surveyed stores not to comply with the guidelines while finding "substantial compliance" in the industry, is arbitrary and capricious and violates § 343(q)(4)(B)(ii) of the NLEA. The Plaintiffs also claim that 21 C.F.R. § 101.43(a), which permits a retailer to be in compliance with the guidelines if that retailer complies with the guidelines for at least 90 percent of the raw agricultural commodities and 90 percent of the raw fish sold by that retailer, is arbitrary and capricious and violates § 343(q)(4)(B)(ii) of the NLEA. Plaintiffs argue that these two regulations, therefore, are invalid under the Administrative Procedure Act, 5 U.S.C. § 706(2).

 The Defendant filed a Motion to Dismiss the Plaintiffs' complaint on the following grounds: 1) the Plaintiffs present no "case or controversy" because their allegation of injury is speculative; 2) this Court has no jurisdiction over the Plaintiffs' claim since Congress committed this matter to the Defendant's discretion; and 3) the interpretation of the statute is not arbitrary or capricious.

 II. Discussion

 A. "Case or Controversy"

 In order to limit federal judicial power to the resolution of "cases" or "controversies", the Supreme Court has developed a doctrine of standing which requires a complainant to allege: 1) a personal injury-in-fact that is 2) "fairly" traceable to the defendant's conduct and 3) redressable by the relief requested. Branton v. FCC, 301 U.S. App. D.C. 244, 993 F.2d 906, 908 (D.C. Cir. 1993) (quoting Allen v. Wright, 468 U.S. 737, 751, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984)), cert. denied, 114 S. Ct. 1610 (1994). The party invoking federal jurisdiction bears the burden of establishing these elements. Lujan v. Defenders of Wildlife, 119 L. Ed. 2d 351, 112 S. Ct. 2130, 2136 (1992). When deciding standing issues, a trial court "must accept as true all material allegations of the complaint." United Transportation Union v. ICC, 282 U.S. App. D.C. 38, 891 F.2d 908, 911 (D.C. Cir. 1989) (quoting Warth v. Seldin, 422 U.S. 490, 501, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975)), cert. denied, 497 U.S. 1024 (1990). When a plaintiff's asserted injury arises from the government's allegedly unlawful regulation (or lack of regulation) of someone else, standing is not precluded, but it is ordinarily "substantially more difficult" to establish. Lujan v. Defenders of Wildlife, 119 L. Ed. 2d 351, 112 S. Ct. 2130, 2137 (1992). When the existence of one or more of the essential elements of standing depends on the unfettered choices made by independent actors not before the courts and whose exercise of broad and legitimate discretion the courts cannot presume either to control or to predict, it becomes the burden of the plaintiff to adduce facts showing that those choices have been or will be made in such manner as to produce causation and permit redressability of injury. Id.

 An injury-in-fact is an invasion of a legally-protected interest which is: a) concrete and particularized and b) actual or imminent, not conjectural or hypothetical. Id. at 2136. The D.C. Circuit has found injury-in-fact where the defendants actions impaired the plaintiffs' access to certain goods. See, Competitive Enterprise Inst. v. National Highway Traffic Safety Admin., 284 U.S. App. D.C. 1, 901 F.2d 107, 113 (D.C. Cir. 1990) (standing found where plaintiffs were allegedly injured by loss of opportunity to buy larger passenger vehicles). In this case, the Plaintiffs claim that the FDA's actions have reduced the availability of nutrition information which plaintiffs may receive at grocery stores. The Court finds that "the denial of nutrition information" is a sufficiently concrete and current allegation of injury to satisfy the injury-in-fact requirement of standing.

 The questions of causation and whether the requested relief would redress the injury substantially overlap where the petitioners seek only the cessation of illegal conduct. Id. In order to satisfy the causation requirement, Plaintiffs need not prove a cause-and-effect relationship with absolute certainty; substantial likelihood of the alleged causality meets the test. Id. (quoting Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59, 75, fn. 20, 57 L. Ed. 2d 595, 98 S. Ct. 2620 (1978)). This also applies to cases where the injury depends on the reactions of third parties to the agency's conduct. Id. A match between the statutory objective behind the agency regulation and the alleged injury can facilitate finding a causal link between the agency's conduct and the injury. 907 F.2d at 114; National Wildlife Federation v. Hodel, 268 U.S. App. D.C. 15, 839 F.2d 694, 708 (D.C. Cir. 1988) (Congress can provide legislative assessments which courts can credit in making standing determinations). A congressional finding of causation is not essential when there is evidence in the administrative record supporting the causal link. Id. There can be little doubt that the statutory objective of the NLEA is to prod retail stores into providing more information to consumers with respect to the nutritional value of produce and fish. If setting a higher standard cannot result in consumers receiving more nutrition information then the statute makes no sense. In addition, there can be no doubt that the industry's participation in the rulemaking process suggests that the proposed rules would influence their behavior. The Court believes that there is a substantial likelihood that the agency's definition of "substantial compliance" is the cause of the Plaintiffs' alleged injury.

 With respect to redressability, Plaintiffs need not prove that granting the requested relief is certain to redress their injury, especially where some uncertainty is inevitable. Id. at 118. A mere likelihood will do. National Wildlife Federation v. Hodel, 268 U.S. App. D.C. 15, 839 F.2d 694, 705 (D.C. Cir. 1988). The Defendant argues that the NLEA only seeks voluntary compliance with the guidelines and therefore, a regulation providing a higher "substantial compliance" figure would still not affect retail stores who have the option to ignore the guideline.

 The Court believes that the Defendant's view of the NLEA is too restrictive. The voluntary portion of the NLEA must be read in a larger context which includes the introduction of mandatory regulations if voluntary compliance is unsuccessful. The existence of this threat notifies the retailers that they may ignore nutritional labelling programs at the risk of a statutorily-imposed nutrition information program.

 The relief that the Plaintiffs request would redress their injury because by setting a "substantial compliance" figure in accord with congressional intent, either of two things would occur: the industry would provide the amount of information which Congress envisioned or the Plaintiffs would gain the protection of mandatory guidelines and receive the information. A higher substantial compliance figure does not ensure immediate receipt of nutrition information, but it does make the imposition of mandatory guidelines and the subsequent release of nutrition information more likely.

 As a matter Of logic, if the Court were to defer ruling until the Defendant imposed mandatory regulations, the Defendant and retail stores could potentially avoid review forever. If, for instance, the FDA set the level of "substantial compliance" at an extremely low number, retail stores could provide little nutrition information and easily satisfy the guidelines thus preserving the "voluntary" guidelines. The Defendant would then argue that since the guidelines were "voluntary", the Court could not intervene in order to correct this situation even though the stores were frustrating the will of Congress. Though the NLEA permits the industry to cause "injury" to the Plaintiffs during the "voluntary" phase, that is no reason to allow it to occur in perpetuity.

 Beyond the constitutional requirements, the federal judiciary has also adhered to a prudential principle that requires a plaintiff's complaint to fall within the "zone of interests" to be protected or regulated by the statute or constitutional guarantee in question. Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 474-75, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982). The zone of interests adequate to sustain judicial review is particularly broad in suits to compel federal agency compliance with the law, since Congress itself has pared back traditional prudential limitations by the Administrative Procedure Act (APA). FAIC Securities, Inc. v. United States, 247 U.S. App. D.C. 235, 768 F.2d 352, 357 (D.C. Cir. 1985).

 The APA confers standing to a person aggrieved by agency action within the meaning of a relevant statute. Clarke v. Securities Industry Ass'n, 479 U.S. 388, 394, 93 L. Ed. 2d 757, 107 S. Ct. 750 (1987) (quoting § 10 ...


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