Contender Farms, L.L.P. v. United States Department of Agriculture
2015 U.S. App. LEXIS 2741
5th Cir.2015Background
- Contender Farms and owner Mike McGartland, regular participants in Tennessee walking horse shows, sued to invalidate a 2012 USDA regulation requiring Horse Industry Organizations (HIOs) to impose mandatory suspensions and USDA‑approved appeal procedures for persons found to have "sored" horses.
- The Horse Protection Act (HPA) requires the Secretary to prescribe requirements for appointment and qualification of inspectors (DQPs) but leaves event management/HIOs as primary enforcers; USDA historically certified HIO training programs and used voluntary operating plans.
- The USDA adopted the Regulation after an OIG report criticized inconsistent private enforcement; the Regulation conditions DQP program certification on HIO adoption of mandatory minimum penalties, USDA‑approved appeals, timelines, and reserves USDA enforcement authority.
- Contender Farms and McGartland challenged the Regulation as exceeding USDA authority (Chevron), violating the APA and Regulatory Flexibility Act, and raising due process and separation‑of‑powers concerns; USDA raised standing and ripeness defenses.
- The district court found the challenge justiciable but upheld the Regulation on the merits; the Fifth Circuit affirmed justiciability but reversed and vacated on the merits, remanding for judgment for the plaintiffs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing | Contender Farms and McGartland are objects of the Regulation and suffer concrete, imminent injury from increased penalties and loss of choice among HIOs. | USDA argued plaintiffs lack standing/ripeness because they do not sore horses and might never be subject to penalties. | Plaintiffs have standing; they are regulated objects and face concrete, redressable burdens. |
| Ripeness | Pre‑enforcement facial/administrative challenge is ripe because the rule is final and poses substantial risk of harm to participants. | USDA argued the challenge is premature absent an actual enforcement action. | Challenge is ripe; legal challenge to a final rule asserting likely future harm is reviewable. |
| Statutory scope of §1823(c) (DQP qualification authority) | §1823(c) authorizes requirements only related to qualifications/training of inspectors, not to prescribing HIO enforcement penalties or appeals. | USDA contended §1823(c) and the DQP program authorize conditioning HIO certification on uniform penalties and appeal procedures. | §1823(c) does not authorize the USDA to impose an HIO‑administered enforcement regime or mandatory suspensions; statute targets inspector qualifications. |
| General rulemaking §1828 / Chevron deference | Broad §1828 rulemaking power must be read to implement, not to change, statutory enforcement scheme; regulation conflicts with HPA enforcement provisions. | USDA claimed §1828 and Chevron permit reasonable construction to require uniform penalties for effective enforcement. | Court declined to reach Chevron step two because statute unambiguously limits USDA to inspector‑related rules; §1828 does not authorize creating a mandatory private enforcement system. |
Key Cases Cited
- Chevron v. Natural Resources Defense Council, 467 U.S. 837 (agency interpretation framework)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requirements)
- Susan B. Anthony List v. Driehaus, 134 S. Ct. 2334 (pre‑enforcement chill and ripeness)
- City of Arlington v. FCC, 133 S. Ct. 1863 (deference to agency interpretations of ambiguity)
- Nat’l Pork Producers Council v. EPA, 635 F.3d 738 (agency cannot create liability beyond statute)
- Am. Bar Ass’n v. FTC, 430 F.3d 457 (limits on broad rulemaking to change regulated scope)
- Texas v. United States, 497 F.3d 491 (courts constrained by statutory means Congress prescribed)