Food Centers, Inc. v. BlockFood Centers, Inc. v. Block
Leonard M. Hoffius, Douglas W. VanEssen (argued), Grand Rapids, Mich., for plaintiff-appellee.
James M. Goldberg, Richard L. Frank, Dennis R. Johnson, Washington, D.C., for amicus.
Before KENNEDY and KRUPANSKY, Circuit Judges; and BROWN, Senior Circuit Judge.
BAILEY BROWN, Senior Circuit Judge.
Plaintiff-appellee D & W Food Centers, Inc. (D & W) filed this action in the federal district court for the Western District of Michigan. On the basis of briefs and stipulated facts, the district court issued a declaration that D & W‘s pizza-making operation was not covered by the continuous inspection provision of the Federal Meat Inspection Act,
I
D & W is a Michigan corporation, owning and operating a chain of thirteen retail grocery stores in the Grand Rapids area. The business operates entirely in intrastate commerce; however, if the requirements of this regulatory statute are otherwise met, the pizzas sold would be treated as “prepared for commerce,”
In 1981, D & W began selling meat “deli” pizzas at its retail stores. In 1982, D & W constructed, at a cost of approximately $190,000.00, a central commissary at its Grandville, Michigan supermarket, for preparation and distribution of meat pizzas to all thirteen stores. The pizza-making area is connected to the main shopping area of the Grandville store by two swinging doors with windows. D & W claims to have constructed the centralized facility to improve quality control, cleanliness and efficiency. For delivery, D & W also purchased, at a cost of approximately $40,000.00, and uses a specially-equipped refrigerated truck.
The district court, however, found that D & W‘s facility is not a “packing ... or similar establishment,” but a retail facility, not covered by the provisions of Sec. 606. D & W Food Centers, Inc. v. Block, No. G83-844 CA1, slip op. at 6-15 (W.D.Mich., July 20, 1984).2 In the alternative, the court concluded that even if the Secretary‘s interpretation of Sec. 606 were correct, it could not stand, because it would constitute a “rule” of “general applicability,” invalid under the Administrative Procedure Act for lack of publication.
II
Because any one of the conclusions of the district court constitutes an independent ground for its decision, the Secretary would be entitled to prevail only if he were correct on each point.
A
The Secretary concedes that a grocery store that prepared and marketed meat pizzas for sale therein would not be a “packing ... or similar establishment” subject to continuous inspection under Sec. 606. He contends, however, that in preparing meat pizzas at its central facility and transporting those pizzas for sale to its other twelve stores, D & W becomes a “packing ... or similar establishment” within the meaning of that section.
In reaching the conclusion that D & W‘s operation is not covered by Sec. 606, the district court relied in part on an opinion by the Attorney General of the United States (AG). In 1972, the AG reviewed the language and the legislative history of Sec. 606, and concluded that Congress had intended that “a retail establishment normally would not be considered an establishment ‘similar’ to a slaughtering, meat-packing, canning or rendering plant.” 42 Op.Att‘y Gen. 459, 461 (1972). The AG noted that the facilities to which establishments must be “similar” in order to be covered by Sec. 606--slaughtering, canning, salting, packing or rendering plants--all were “usually wholesale businesses.” Id. The AG thought it clear that “the obvious differences in the marketing functions” of these two kinds of businesses, id., suggested that Sec. 606 was not intended to provide universal coverage of all meat preparation facilities (except those expressly exempted), and indeed suggested the reverse:
that retail establishments like ordinary grocery stores and restaurants are not, as such, covered by the inspection and sanitation provisions ... regardless of their location and whether or not they offer their products for sale interstate.
Id. at 466.3
The Secretary‘s attempt to use Safeway to show that D & W is a “packer” because its operation involves “shipment ... after processing” is misguided. The court in Safeway held that nationwide food chains that operated centralized meat processing plants, where carcasses were broken, boned and trimmed, and beef was corned, made into sandwich spread, or sliced and wrapped, were properly found by the Secretary to be within the definition of “packer” in the Packers and Stockyards Act of 1921,
First, although the Stockyards Act‘s definition of “packer” is similar to that in the FMIA, the statutes have quite different purposes. The FMIA is a public health statute, aimed at “preventing the use in commerce of meat and meat food products which are adulterated....”
The second important distinction between Safeway and the instant case is that the scope of the chains’ operations in Safeway was enormous. Hundreds of millions of pounds of raw meat, including whole carcasses, were processed by the chains in Safeway, thus making their central facilities resemble packing houses much more closely than the thirteen-store supplier in the present case. In reaching its decision, the Safeway court relied on the large scope of the chains’ operations as support for its conclusion that they should be treated as packers. Safeway, 369 F.2d at 956 & n. 12 (chains should be treated as packers because they “buy for 6,684 stores doing over $8,033,893,421 of business a year,” having “absorbed part of the preparation and manufacturing function ... that the ‘Big Five’ formerly performed“). In contrast, under the USDA‘s own regulations, D & W‘s operation apparently continues to qualify as a “retail” establishment in terms of quantities prepared and sold.4 While surely D & W makes more pizzas at its central facility than it could sell at one store, we are not persuaded that this factor permits the Secretary to disregard his other regulations regarding the size and type of operation that should be designated as “retail.” See 42 Op.Att‘y Gen. at 461.
Finally, the only reason D & W even arguably is covered by Sec. 606 is an establishment “similar” to a “packing” house. But “packing” must be construed ejusdem generis with the other types of facilities listed, viz., slaughtering, meat-canning, salting or rendering. Obviously, D & W‘s operation is only with difficulty characterized as “similar” to the class of establishments covered by Sec. 606. That Congress intended Sec. 606 to require continuous inspection primarily of a class of establishments involved with large-scale sale and distribution of meat products is suggested by the AG‘s observation that the establishments Congress intended to reach were “usually wholesale businesses,” 42 Op.Att‘y Gen. at 462, and by the court‘s decision in Safeway, 369 F.2d at 955-56. Alternatively, we believe that a business of smaller scale might be subject to continuous inspection if its operations closely resembled those characterizing the class described in Sec. 606. Either type of business might implicate the public health problems that the Act aims at eradicating.
But a business like D & W‘s--neither large-scale, nor otherwise presenting the public health concerns created by the other members of the class enumerated in Sec. 606--seems an inappropriate candidate for membership in that class. In neither scope nor nature does D & W‘s operation present the public health concerns that led Congress to subject “packing” houses to the inspection provisions of the FMIA. Quite the contrary, the differences between D & W‘s operation and those of an “ordinary” grocery store are slight, while the similarities are apparent. D & W‘s relatively small assembly operation in fact takes place in a grocery store. It probably is as visible to customers as any similar operation whose sales are limited to one store. While the specific purchasers will not have observed preparation, the class of consumers will have been represented by shoppers in the Grandville store, where sanitary conditions may be observed. The meats used by D & W‘s operation already have been subject to federal inspection at earlier levels, and all sales of the pizzas are to retail customers.
For all of these reasons, we agree with the district court‘s conclusion that D & W‘s operation may not be characterized as “similar” to a “packing” house, and therefore that it stands outside the reach of Sec. 606.
B
The Secretary further argues, however, that even if D & W‘s construction of Sec. 606 might be thought more persuasive than his own, the Secretary‘s interpretation must be upheld under the deference due to an administrative agency‘s construction of a statute that it administers. See, e.g., Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694, 702-04 (1984). The Secretary correctly states that in order for his interpretation to be accepted, this court ordinarily need not find that it was the only permissible one, as long as it constitutes a sufficiently rational interpretation of the FMIA. See, e.g., Chemical Manufacturers Association v. Natural Resources Defense Council, Inc., 470 U.S. 116, 125, 105 S.Ct. 1102, 1107, 84 L.Ed.2d 90, 98 (1985).
We first note that it is not clear that the Secretary‘s construction of Sec. 606 would be sufficiently rational to warrant judicial deference, in light of our earlier discussion. We have already concluded that D & W‘s is the best reading of the statute; however, we need not here decide whether this reading could stand against a less plausible, but still tenable USDA rule, because we conclude that the Secretary‘s construction of Sec. 606 represents an “interpretation of general applicability,” required to be published by the Administrative Procedure Act.
An agency pronouncement must be published if it is of such a nature that knowledge of it is needed to keep parties informed of the agency‘s requirement as a guide for their conduct. United States v. Hayes, 325 F.2d 307, 309 (4th Cir.1963) (per curiam). An interpretation is not “of general applicability” if (1) only a clarification or explanation of existing laws is expressed, and (2) the interpretation results in no significant impact on any segment of the public. Anderson v. Butz, 550 F.2d 459, 463 (9th Cir.1977). Agencies need not publish “interpretative rules, general statements of policy, or rules of agency organization, procedure or practice.”
Under these standards, it is clear that the Secretary‘s reading of Sec. 606--that regardless of its size or of potential adverse impact on public health, any centralized grocery kitchen that prepares any meat food products for sale off-premises is a “packing ... or similar establishment“--does more than interpret an existing law. D & W correctly argues that the policy will affect every intrastate-selling grocery store in any one of the twenty-seven designated states that may wish to prepare meat food products at one of its stores for wider distribution to its other locations. Thus, the rule certainly might result in significant impact on at least that segment of the public. Anderson, 550 F.2d at 463. And since the Secretary‘s rule departs from the literal language of the statute and of the AG‘s opinion, it would do violence to plain English to characterize the rule as only a “clarification” of existing law. Id. We therefore conclude that, even if the Secretary‘s construction of Sec. 606 would otherwise be entitled to judicial deference, that construction may not be adopted here, where D & W was deprived of notice and the opportunity to comment before the rule became effective, and especially before it had expended a large sum of money on construction of the centralized facility.
Any remaining doubt that the Secretary‘s construction of Sec. 606 must be rejected disappears when we consider the criminal provisions of the FMIA. Section 676(a) provides criminal penalties for violation of any section of the Act. No principle of law is better established than the necessity of the criminal law speaking clearly. Accordingly, courts are bound to construe narrowly the applicability of any criminal statute. E.g., United States v. Bass, 404 U.S. 336, 346-48, 92 S.Ct. 515, 521-23, 30 L.Ed.2d 488 (1971). Here, the Secretary invites us to adopt a construction of “packing ... or similar establishment” that is not plain in the statute or its regulations; that may remain unknown to most grocery stores for its lack of publication; and that might subject this plaintiff and hundreds of other similarly-situated businesses to criminal liability. We decline the invitation, and hold that D & W‘s centralized pizza-making operation is not subject to the provisions of
Accordingly, we AFFIRM the judgment of the district court.
Notes
shall not apply to operations of types traditionally and usually conducted at retail stores and restaurants, when conducted at any retail store or restaurant or similar retail-type establishment for sale in normal retail quantities or service of such articles to consumers at such establishments if such establishments are subject to such inspection provisions only under this paragraph (c).