872 F.3d 602
D.C. Cir.2017Background
- USDA issues and renews Animal Welfare Act (AWA) exhibitor licenses; initial licenses require APHIS inspection and demonstration of compliance, renewals require fee, annual report, self‑certification of compliance, and availability for inspection.
- Cricket Hollow Zoo (Sellners) obtained an initial USDA license in 1994 and received annual renewals; by 2015 it housed ~193 animals.
- Appellants (Tracey & Lisa Kuehl and ALDF) alleged repeated on‑site noncompliance documented in inspection reports and citizen complaints; USDA renewed the Zoo’s license in 2014 and 2015 despite alleged chronic violations and an open investigation.
- Plaintiffs challenged the 2014/2015 renewals on statutory grounds (7 U.S.C. § 2133: no license shall be issued until exhibitor has demonstrated compliance) and under the APA as arbitrary and capricious for relying on self‑certification when the agency knew of violations.
- District Court dismissed both claims, holding § 2133 ambiguous as to renewals and deferring to USDA’s renewal regulations; this court affirms the statutory holding but vacates dismissal of the APA claim and remands for agency explanation and supplementation of the record if needed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 2133’s "no license shall be issued until... demonstrated" unambiguously requires the same demonstration for renewals as for initial licenses | "Issue" includes renewals; renewals must require an affirmative demonstration of compliance (inspection) before issuance | Statute silent on renewals; USDA reasonably set different, administrative renewal procedures (self‑certification + availability for inspection) | Court: statute ambiguous re: renewal procedure; Congress delegated gap‑filling to USDA and its renewal scheme is a reasonable construction (Chevron step two) — statutory claim affirmed |
| Whether USDA is entitled to Chevron deference for its renewal scheme | Agency lacked a formal rulemaking interpreting "issue"; current position is post‑hoc litigation | USDA has long regulatory practice and history filling the statutory gap; its renewal scheme is a permissible interpretation | Court defers to the agency’s regulatory scheme as reasonable gap‑filling; need not resolve definitional "issue" question |
| Whether reliance on licensee self‑certification was arbitrary and capricious under the APA when agency had evidence of noncompliance | Renewing despite known, chronic violations and contemporaneous inspection findings makes reliance on self‑certification irrational and arbitrary | Reliance followed the regulations; enforcement tools (suspension/revocation) remain available; regulations are consistent with statute | Court: dismissal of APA claim was erroneous; reliance on facts the agency knew were false can be arbitrary and capricious — vacated and remanded for agency explanation and record supplementation |
| Whether the administrative record should be supplemented for review of the agency's rationale | Plaintiffs sought inclusion of inspection reports and agency records showing noncompliance as background and as evidence the agency knew renewals were improper | Agency excluded documents it did not rely on; District Court denied supplementation | Court: district court should reconsider supplementation on remand; background documents may be required to evaluate whether agency considered relevant factors |
Key Cases Cited
- Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (establishing two‑step deference to agency statutory interpretations)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (arbitrary and capricious standard for agency rulemaking/decisions)
- Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (deference to agency gap‑filling interpretations)
- Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (limits on deferring to litigating positions not grounded in agency practice)
- Village of Barrington v. Surface Transp. Bd., 636 F.3d 650 (statutory ambiguity and agency construction principles)
- Am. Wildlands v. Kempthorne, 530 F.3d 991 (standards for supplementing the administrative record)