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Associated Dog Clubs of N.Y. State, Inc. v. Vilsack

United States District Court, D. Columbia.

November 7, 2014

ASSOCIATED DOG CLUBS OF NEW YORK STATE, INC., et al., Plaintiffs,
v.
THOMAS J. VILSACK, Secretary, United States Department of Agriculture, et al., Defendants, and THE HUMANE SOCIETY OF THE UNITED STATES, Intervenor-Defendant

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[Copyrighted Material Omitted]

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For ASSOCIATED DOG CLUBS OF NEW YORK STATE, INC., AUSTRALIAN SHEPHERD CLUB OF AMERICA, Plaintiffs: Philip Herbert Hecht, Washington, DC.

For AMERICAN DOG BREEDERS ASSOCIATION, INC., VIRGINIA FEDERATION OF DOG CLUBS AND BREEDERS, CALIFORNIA FEDERATION OF DOG CLUBS, ALBANY KENNEL CLUB, INC., ALBANY OBEDIENCE CLUB, INC., ALLPURRS CATTERY, AMERICAN FOX TERRIER CLUB, AMERICAN POMERANIAN CLUB, AMERICAN RUSSELL TERRIER CLUB, BELGIAN SHEEPDOG CLUB OF AMERICA, CAT FANCIERS LEGISLATIVE GROUP, CHARLOTTESVILLE-ALBEMARLE KENNEL CLUB, CHATTANOOGA KENNEL CLUB, CHIHUAHUA CLUB OF AMERICA, CLEVELAND COLLIE CLUB, COLONIAL NEWFOUNDLAND CLUB, COLUMBIA POODLE CLUB OF OREGON AND SOUTHWEST WASHINGTON, DACHSHUND CLUB OF GREATER BUFFALO, DACHSHUND FANCIERS OF CENTRAL VIRGINIA, EAGLE ROCK KENNEL CLUB, INC., ERIE CANAL SCHIPPERKE CLUB, GOLDENDOODLE ASSOCIATION OF NORTH AMERICA, HURON VALLEY AUSTRALIAN SHEPHERD ASSOCIATION, INTERNATIONAL BENGAL CAT SOCIETY, INTERNATIONAL SHILOH SHEPHERD DOG CLUB, KENNEL CLUB OF PALM SPRINGS, MINIATURE AUSTRALIAN SHEPHERD CLUB OF AMERICA, MINUTEMAN SAMOYED CLUB, INC., MISSISSIPPI CANINE COALITION, INC., NORTHLAND NEWFOUNDLAND CLUB, POTOMAC BASSETT HOUND CLUB, SARATOGA (NY) KENNEL CLUB, INC., SCHENECTADY DOG TRAINING CLUB, SHAWANGUNK KENNEL CLUB, INC., SHETLAND SHEEPDOG CLUB OF WESTERN NEW YORK, SOCIETY FOR THE PERPETUATION OF DESERT BRED SALUKIS, SYRACUSE OBEDIENCE TRAINING CLUB, TRI VALLEY SHETLAND SHEEPDOG CLUB OF NORTHWEST LOS ANGELES, WEIMARANER CLUB OF THE WASHINGTON DC AREA, WORKING AUSTRALIAN SHEPHERD CLUB OF UPSTATE NEW YORK, Plaintiff: Philip Herbert Hecht, LEAD ATTORNEY, Washington, DC.

For THOMAS J. VILSACK, UNITED STATES DEPARTMENT OF AGRICULTURE, Defendants: Timothy Andrew Johnson, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Civil Division, Federal Programs Branch, Washington, DC.

For HUMANE SOCIETY OF THE UNITED STATES, Intervenor Defendant: Aaron D. Green, LEAD ATTORNEY, HUMANE SOCIETY OF THE UNITED STATES, Washington, DC; Kimberly Denise Ockene, THE HUMANE SOCIETY OF THE UNITED STATES, Washington, DC.

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MEMORANDUM OPINION

CHRISTOPHER R. COOPER, United States District Judge.

With few exceptions, there is nothing one can buy in a traditional store tat cannot be bought online as well. It should come as no surprise, then, that the Internet unleashed a growing online market for pet sales. Prompted by this expansion of sight-unseen sales over the Internet, the Department of Agriculture, through the Animal and Plant Health Inspection Service (" APHIS" ), issued a new rule that redefined " retail pet store" --a statutory category of pet sellers exempt from regulation by the agency. Whereas APHIS previously exempted from regulation all outlets that sold certain animals directly to the public, its revised retail pet store definition exempted only face-to-face sellers. Many online sellers thus became subject to regulation for the first time. The new rule brought howls from small breeders anxious over the potential costs of regulatory oversight. A collection of those breeders--through some 42 separate dog and cat clubs--seek to bring APHIS to heel, arguing that the agency exceeded its statutory authority in issuing the new rule. But the clubs are barking up the wrong tree: Their complaints are more policy disagreements with APHIS's regulatory approach than they are valid legal objections to APHIS's authority and the process it followed in adopting the rule. Because APHIS acted within its authority in promulgating the rule and otherwise complied with the requirements of the Administrative Procedures Act, the Court will grant summary judgment for the agency.

I. Background

Congress passed the Animal Welfare Act (" AWA" ), 7 U.S.C. § 2131 et seq., in 1966 " to insure that animals intended . . . for use as pets are provided humane care and treatment," id. § 2131(1). The Act gives the Secretary of Agriculture authority, which has been delegated to APHIS, to promulgate regulations that require " animal dealers" to be licensed, keep records, and maintain humane facilities. Id. § § 2133, 2143. The AWA exempts " retail pet stores" from the definition of " animal dealers" --making them free from all regulation by APHIS--but the statute does not define that term. Id. § 2132(f). Congress left that task to the Secretary. Accordingly, APHIS issued a regulation in 1971 defining " retail pet store" to mean " any retail outlet where animals are sold only as pets at retail." 36 Fed.Reg. 24,917, 24,919 § 1.1(t) (Dec. 24, 1971). It later created a de minimis exception from regulation for any person who maintains three or fewer breeding females and who sells only the offspring of those females for pets or exhibition. 54 Fed.Reg. 36,123, 36,148 § 2.1(a)(3)(iii) (Aug. 31, 1989). Although both APHIS and Congress considered several alternative definitions over the years, these regulations remained relatively unchanged over the next several decades.

In 2010, however, the Department of Agriculture Office of the Inspector General (" OIG" ) published an audit report critical of APHIS's inspection program. OIG, APHIS Animal Care Program Inspections of Problematic Dealers, Audit Report 33002-4-SF (" OIG Report" ) (May, 2010), Administrative Record (" AR" ) 146-214. Among other issues, the report documented a pack of complaints by owners of sick or injured animals purchased from

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unregulated online sellers. Id. at 186. The report observed, however, that '[l]arge breeders that sell AWA-covered animals over the Internet . . . [we]re exempt from [APHIS's] inspection and licensing requirements" because online sellers fell within the definition of retail pet stores. Id. at 185. It therefore urged APHIS to seek legislation to cover these unregulated entities. Id. at 186. APHIS responded favorably to the recommendation, assuring the OIG that it was promoting a bill that " would place dogs sold directly to the public via the Internet . . . within the jurisdiction of the AWA." Id. at 187.

Instead of continuing to pursue legislative change, however, APHIS determined that " the AWA's definition of a regulated 'dealer' is sufficiently broad to allow us to clarify--without legislation--the regulatory definition of a 'retail pet store' so that Internet retail sales of regulated animals are covered[.]" Letter from Cindy J. Smith, APHIS Administrator, to Congressman Bob Goodlatte (Sep. 9, 2010), AR at 241. APHIS thus published a notice of proposed rulemaking to limit the retail pet store exemption to only those outlets where " each buyer physically enters [the store] in order to personally observe the animals[.]" Proposed Rule, 77 Fed.Reg. 28,799 (May 16, 2012), AR 322-28.

APHIS also published a Regulatory Impact Analysis that sought to estimate the number of breeders that would be covered by the new rule and its resulting economic impact on those breeders. APHIS, Regulatory Impact Analysis & Initial Regulatory Flexibility Analysis (April 2012) (" Impact Analysis" ), AR 400-62. The analysis acknowledged that " [t]here is a great deal of uncertainty surrounding the number of facilities that will be affected by this rule[.]" Id. at 402. APHIS nevertheless developed an estimate by first identifying breeders listed in two online breeder registries and assuming an additional unlisted breeder for every four listed breeders, which yielded approximately 8,400 to 15,000 dog breeders nationally. Id. at 402-403. It then assumed that 75 percent of those breeders sell dogs as pets, 55 percent have more than four breeding females, and 75 percent make sight-unseen sales, thereby arriving at an estimated 2,599 to 4,641 online dog sellers that would be covered by the regulations for the first time. Id. Using a similar methodology, APHIS estimated 325 cat breeders and 75 rabbit breeders also would be affected by the new rule. Id. at 414-16.

APHIS predicted that compliance costs for newly-regulated breeders would vary widely depending on the size of their facilities and their existing level of compliance with the regulations. Because comments to the proposed rule indicated that breeders generally maintain facilities above the minimum humane treatment standards the AWA requires, APHIS assumed the new rule would result in only modest additional costs to build new structures. Id. at 423. The impact analysis indicated that dog breeders with noncompliant facilities would be required to either purchase dog houses that provide adequate shelter from the elements, which fetch between $80 and $120 for " an igloo-style dog house," or would need to construct additional commercial kennels, which were estimated to cost between $220 and $260 per animal. Id. at 428-29. APHIS estimated that breeders who did not meet the regulation's veterinary care standards would incur costs of between $1,375 and $3,570 for site visits, care issues, and vaccinations. Id. at 425-26. The impact analysis estimated that meeting cleaning and sanitation requirements would require between one and two hours of work per day, which would cost between $3,420 and $6,850 a year if a breeder chose to hire outside labor. Id. at 427. The analysis estimated that all newly

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regulated dog breeders would be subject to licensing, tagging, and recordkeeping costs of between approximately $250 and $1,055 depending on their size. See id. at 419-21. By applying these figures to the estimated numbers of newly regulated compliant and noncompliant breeders, APHIS estimated the total cost of compliance would range between $853,000 and $2.8 million annually for all breeders. Id. at 430.

After receiving over 75,000 comments, which both supported and opposed the new rule, APHIS promulgated the new definition of " retail pet store" in September 2013. Final Rule, 78 Fed.Reg. 57,227 (Sep. 18, 2013), AR 375-98. Along with the new definition, the rule change also expanded the de minimis exception from three to four breeding females. Id. The pertinent sections of the final rule provide:

Retail pet store means a place of business or residence at which the seller, buyer, and the animal available for sale are physically present so that every buyer may personally observe the animal prior to purchasing ...

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