264 F. Supp. 3d 23
D.D.C.2017Background
- This is a D.D.C. case challenging the Seafood Import Monitoring Program (the Rule) under the Administrative Procedure Act and the Regulatory Flexibility Act.
- Plaintiffs are U.S.-based seafood importers, processors, harvesters, and a trade group alleging the Rule is unlawful, burdensome, and beyond authority.
- The Rule requires importers to obtain permits, collect and report supply-chain data, and designate species subject to traceability; effective data requirements began January 1, 2018.
- The court split on whether the Rule was properly promulgated, whether Congress authorized seafood fraud regulation under the MSA, and whether the APA and RFA requirements were satisfied.
- Secretary Wilbur Ross ratified the Final Rule after the court raised Appointments Clause concerns, curing potential defects in promulgation.
- The court ultimately upheld the Rule, denying Plaintiffs’ summary judgment motion and granting Defendants’ cross-motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| MSA delegation and Appointments Clause validity | MSA does not authorize sub-delegation; challenged promotion by Rauch/Sobeck violated Appointments Clause. | Delegation to subordinates was permissible; ratification by Secretary Ross cured any defect. | Promulgation cured by Secretary Ross’s ratification; Appointments Clause issues rejected. |
| Statutory authority to regulate seafood fraud under the MSA | MSA does not authorize regulation of seafood mislabeling/fraud; FDA has sole authority. | MSA’s broad “necessary to carry out” authority and amendments authorize regulation of seafood fraud; related legislative history supports it. | MSA authorizes the Rule, including seafood fraud regulation. |
| APA notice, data disclosure, and rational basis | Verifiable Data used to justify priority species list was not disclosed for comment; rulemaking biased. | Data disclosure was not required; analyses were rational and adequately supported by record. | APA notice and data disclosure requirements met; rulemaking not arbitrary or capricious. |
| RFA compliance and consideration of alternatives | RFA FRFA insufficient; failed to consider significant alternatives and impacts on small entities. | FRFA considered costs, affected small entities, and alternatives; adequate under RFA. | RFA requirements satisfied; Rule valid. |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. State Farm, 463 U.S. 29 (U.S. 1983) (reasoned-connection requirement for agency action; rational basis review)
- U.S. Telecom Ass’n v. FCC, 359 F.3d 554 (D.C. Cir. 2004) (presumption of delegation for statutory authority; sub-delegation permissible)
- Conn. Light & Power Co. v. Nuclear Regulatory Comm’n, 673 F.2d 525 (D.C. Cir. 1982) (agency data must be disclosed to allow meaningful public comment)
- Chamber of Commerce v. SEC, 443 F.3d 890 (D.C. Cir. 2006) (data disclosure and comment requirements in rulemaking)
- Am. Radio Relay League, Inc. v. FCC, 524 F.3d 227 (D.C. Cir. 2008) (importance of data and evidence in agency rulemaking)
- Hardin County v. Trunkline Gas Co., 330 F.2d 789 (5th Cir. 1964) (ratification and authority concepts in delegated actions)