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Creekstone Farms Premium Beef, L.L.C. v. U.S. Dep't of Agriculture

March 29, 2007

CREEKSTONE FARMS PREMIUM BEEF, L.L.C., PLAINTIFF,
v.
U.S. DEPARTMENT OF AGRICULTURE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: James Robertson United States District Judge

MEMORANDUM

Plaintiff Creekstone Farms Premium Beef, LLC wants to test every one of the approximately 300,000 head of cattle it slaughters each year to determine whether it was infected with bovine spongiform encephalopathy (BSE), commonly known as "mad cow disease." The United States Department of Agriculture (USDA), however, has denied plaintiff's request to purchase BSE test kits, asserting its authority under the Virus-Serum-Toxin Act, 21 U.S.C. §§ 151-159, (VSTA). The parties have cross-moved for summary judgment on the first two counts of plaintiff's complaint, which assert that the agency has exceeded its authority under the VSTA, in violation of the Administrative Procedure Act, 5 U.S.C. § 706(2)(C), by (1) promulgating regulations that are inconsistent with the VSTA, and (2) denying Creekstone's request to perform BSE testing on its own cattle.

BACKGROUND

BSE is a fatal, irreversible disease that causes progressive degeneration of the brain and central nervous system in cattle. The disease is caused by prions, abnormal proteins that cause normal cellular protein to convert to an abnormal form. The existence of BSE in an animal is confirmed through post-mortem microscopic examination of the animal's brain tissue or by detection of the abnormal form of the prion protein in its brain tissue.

Experts generally agree that the same agent that causes BSE in cattle may cause a similar condition in humans known as variant Creutzfeldt-Jakob Disease (vCJD). Like BSE, vCJD is a neurodegenerative disease that is progressive, incurable, and fatal. Humans contract vCJD by consuming BSE-contaminated meat.

Approximately 190 people have died of confirmed cases of vCJD, almost all of them in the United Kingdom. Experts believe that BSE spread through the UK cattle herd through the consumption of feed contaminated with BSE-infected animal protein. In the past 20 years, BSE has spread from the UK to at least 20 other countries, including Canada and Japan.

In December 2003, a BSE-positive cow was found in the state of Washington. An investigation revealed that the cow was born in Canada and likely exposed to BSE there. Nevertheless, the discovery of BSE-infected cattle in the United States had a substantial impact on the American beef export industry. Major export markets, such as Japan and South Korea, banned American-bred beef, causing a 75 percent decline in U.S. beef exports. Surveys in the United States and Japan showed that consumers were wary of U.S. beef because of fears about BSE.

USDA has implemented a number of measures designed to reduce the likelihood that BSE-infected beef will enter the U.S. food supply. USDA's Animal and Plant Health Inspection Service (APHIS) has conducted surveillance testing of U.S. cattle since 1990 in order to estimate the prevalence of BSE. Following the discovery of BSE within the U.S. in 2003, APHIS established an enhanced surveillance program, testing cattle identified as "high risk" - cattle older than 30 months, cattle exhibiting signs of central nervous system disorders, and cattle that could not walk. The enhanced surveillance program continued for 26 months and screened approximately 750,000 cattle. Only two positive cases were found. Current testing, performed exclusively by government-affiliated labs, screens approximately 40,000 cattle a year. Private testing is prohibited.*fn1

USDA's policy position is that testing only high risk cattle, as opposed to all cattle, is the most efficient method for detecting the presence of BSE. This is primarily because of the limits of existing BSE tests. The incubation period for BSE - the time from infection to outward manifestation of the disease - is two to eight years; the average period is five years. Only rarely do cattle younger than 30 months show any signs of the disease. The earliest point at which current testing methods can detect a positive case of BSE is two to three months before an animal would exhibit any external symptoms. Most cattle going to market in the United States are less than 24 months old. Therefore, BSE testing of slaughter-age cattle is unlikely to identify the disease, even in infected cattle, and USDA's position is that testing young cattle offers "no food safety value" and is "likely to produce false negative results." Decl. of Dr. Lisa Ferguson [#10-3] at ¶ 6.

Creekstone, a leading supplier of premium-quality beef products, alleges that it has lost substantial profits due to the reduced demand for U.S. beef. The bans in Japan and South Korea, for example, cost Creekstone $200,000 per day in revenues when they were in effect. Although those bans were lifted in 2006, at least partially, Creekstone contends that its profits continue to suffer due to consumer fears about BSE.

In order to address those fears, Creekstone decided to conduct its own testing of all of its cattle. It built a laboratory for BSE testing at its Arkansas City, Kansas, beef processing facility and sent employees to France for training on BSE testing procedures by Bio-Rad, Inc., which produces a BSE rapid screening test used by USDA, Japan, and other countries.

Creekstone also discussed purchasing test kits from Bio-Rad. In the course of those discussions, Bio-Rad informed Creekstone that USDA would only permit BSE testing as part of USDA's official surveillance program and would not permit the sale of test kits to Creekstone. Creekstone subsequently contacted USDA for approval, submitting a detailed BSE sampling, testing, and control procedure manual, and describing how the tests would be conducted and used.

On March 17, 2004, the USDA, through APHIS, issued Notice No. 04-08, which declared that the "sale and use" of BSE test kits would be restricted to laboratories approved by state and USDA animal health officials, and that the "distribution and use" of BSE test kits must be under the supervision of, and subject to conditions imposed by, USDA. As authority for that notice, USDA cited its regulations implementing the VSTA, specifically 9 C.F.R. §§ 104.1 - which requires a permit to import "biological products" - and 102.5(d) - which authorizes "restrictions on the use of a product."*fn2

In an April 8, 2004 meeting with Creekstone officials, USDA rejected Creekstone's request to perform BSE testing.*fn3 The agency announced that decision in a press release the next day, and reiterated it in a June 1, 2004 letter to Creekstone. The letter cited as its reasons that "allowing a company to use a BSE test in a private marketing program is inconsistent with USDA's mandate to ensure effective, scientifically sound testing for significant animal diseases and maintain ...


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