SM: CRE Regulatory Action of the Week
ARGUMENT SCHEDULED -- SEPTEMBER 17, 2001
Civ. No. 00-5364
IN THE UNITED STATES COURT OF APPEALS
JIM J. TOZZI, et al.,
UNITED STATES DEPARTMENT OF
APPEAL FROM THE UNITED STATES DISTRICT COURT
Dated: April 30, 2001
TABLE OF CONTENTS
TABLE OF AUTHORITIES
This action originated in the United States District Court for the District of Columbia. The case arises under the Administrative Procedure Act, 5 U.S.C. §§ 701-706 ("APA"), and concerns allegations of arbitrary and capricious agency action under 5 U.S.C. § 706. The district court possessed federal question subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and had authority to review this matter and grant the relief requested pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, and the APA.
The district court issued a final decision on September 30, 2000 in a 12-page memorandum opinion ("Mem. Op."), and its accompanying order was entered the same day. The court granted Defendants’1 motion to dismiss Plaintiffs Tozzi, Empire State Restaurant & Tavern Association, and Greenbaum & Gilhooley’s for lack of standing. The court denied the motion to dismiss as to Plaintiffs Brevet Industries and Brevet, Inc. (collectively, "Brevet"), ruling that Brevet satisfied the requirements for standing. In the same order the district court also granted Defendants’ motion for summary judgment and denied Plaintiffs’ motion for summary judgment. Appellants filed notice of this appeal on October 13, 2000. This Court has jurisdiction over the appeal pursuant to 28 U.S.C. § 1291.
PERTINENT STATUTES AND REGULATIONS
The judicial review provisions from the APA (5 U.S.C. §§ 701-706), section 301(b)(4) of the Public Health Service Act of 1978 mandating the issuance of the Report on Carcinogens ("RoC") (42 U.S.C.§ 241(b)(4)), the September 26, 1996 Federal Register notice containing the revised RoC listing criteria (61 Fed. Reg. 50499), the July 11, 1997 Federal Register notice in which the agency announced the proposal to upgrade the dioxin listing (62 Fed. Reg. 37272), and the two April 1999 agency "clarifications" of the listing criteria (64 Fed. Reg. 15983, 19188) are included, in order, in the attached addendum.
STATEMENT OF ISSUES PRESENTED
1. Whether the district court erred in giving deference to the agency’s current interpretation of the revised Report on Carcinogens listing criteria, notwithstanding contemporaneous evidence indicating a contrary agency intent at the time the revised criteria were promulgated?
2. Whether the agency’s new interpretation of the revised RoC listing criteria, under which the final descriptive paragraph substantively modifies the criteria for the "known" category, is both reasonable and reconcilable with congressional intent to maintain a clear distinction between the two listing categories?
3. Whether the district court erred in ignoring the agency’s failure to provide notice and a reasoned explanation for the change in its longstanding position regarding the meaning of the criteria for "known" human carcinogens listings?
4. Whether the district court erred in failing to consider whether the agency’s abrupt change of position on the meaning of the criteria, as expressed in the agency’s final dioxin listing, deviated so much from its previous position during the Report on Carcinogens review process as to have deprived the formal RoC review process of its effective role.
5. Whether the district court erred in holding that Plaintiffs Tozzi, Empire State Restaurant & Tavern Association, and Greenbaum & Gilhooley’s lacked standing to bring this action.2
STATEMENT OF THE CASE
Plaintiffs filed the complaint in this case, seeking declaratory and injunctive relief, on May 14, 1999. The complaint alleged that the Defendants had engaged in arbitrary and capricious agency action in connection with a proposal to list dioxin, for the first time, as a known human carcinogen in the Report on Carcinogens, and that the agency had failed to adhere to its own published rules for such listings.
Defendants moved to dismiss the case on July 20, 1999. Plaintiffs filed a motion for preliminary injunction against the agency’s publication of the 9th RoC containing the new dioxin listing on September 8, 1999. Following briefing on these two motions, Plaintiffs filed an amended complaint on November 1, 1999, to add Brevet as a plaintiff.3 At a hearing November 12, 1999, the district court consolidated Plaintiffs’ motion for preliminary injunction with trial on the merits pursuant to Fed. R. Civ. P. 65(a)(2) and ordered that the parties file cross-motions for summary judgment. Briefing in response to the court’s order was completed on February 1, 2000, and oral argument was scheduled for May 4, 2000.
Minutes before oral argument on May 4, 2000, counsel for Defendants handed Plaintiffs, for the first time, a finalized, type-set version of the dioxin listing the agency intended to publish. Dkt. Ref. 47. The final listing differed in certain material respects from the proposed listing that had been the subject of the litigation up to that point, and which had been through five levels of the formal RoC review process. Counsel for Plaintiffs therefore requested the court to postpone the argument and to permit briefing on the effects of the proposed final listing. The parties agreed that Defendants would be permitted to publish the 9th RoC, with the dioxin listing appearing, as it had in earlier editions of the RoC, among the "reasonably anticipated" human carcinogens, but with a notation indicating that a proposed upgraded listing to the "known" category was in litigation. Dkt. Ref. 44 at 2 n.1.
Briefing on the effect of the revised final listing was completed June 2, 2000, and oral argument before Judge Emmet Sullivan was held on June 14, 2000. See Dkt. Ref. 55 (Tr.). The district court issued its final ruling on September 30, 2000, and Plaintiffs filed their notice of appeal on October 13, 2000.
Plaintiffs moved for an injunction against publication of the final dioxin listing pending appeal, and these motions were denied by the district court on November 15, 2000 and by this Court on December 15, 2000. In that same December 15, 2000 Order, this Court denied the agency’s motion for summary affirmance, which the agency had filed on November 27, and directed the clerk to calendar the case for presentation to a merits panel. On January 19, 2001, Defendants published an addendum to the 9th RoC containing the final dioxin listing that was first disclosed to Plaintiffs on May 4, 2000, and which classified dioxin as a known human carcinogen. Supp. R.
Plaintiffs seek an order from this Court entering summary judgment for Plaintiffs (i) directing that the agency immediately retract its January 19, 2001 addendum to the 9th RoC, and (ii) declaring that the agency acted arbitrarily and capriciously with respect to the dioxin listing and/or that the agency’s interpretation of the revised RoC listing criteria is unreasonable.
STATEMENT OF FACTS
In 1978 an amendment to the Public Health Service Act, 42 U.S.C. § 241(b)(4), directed the Secretary of Health and Human Services to prepare annual reports (the Report on Carcinogens or "RoC") listing substances that were "known" to be, or "reasonably anticipated" to be, human carcinogens.4 The law was amended in 1993 to make the RoCs biennial rather than annual. Pub. L. No. 103-43, § 209, 107 Stat. 213. The published RoCs are widely reported in the media, are widely distributed in printed format, are posted on the agency’s Internet website, and often are cited by activist groups and the public as demonstrating the need for regulatory measures and other actions. See, e.g., Am. Compl. Exhs. 5 at ¶ 3 & n. 3, 6 at ¶ 3 & n. 3; Pl. Opp. Exh. 25 at 9-10.
The first RoC was published in 1980, and by 1994 seven editions had been issued. From the 2nd RoC in 1981 through the 8th RoC in May 1998 the agency listed 2,3,7,8-tetrachlorodibenzo-p-dioxin ("dioxin" or "TCDD") in the "reasonably anticipated to be human carcinogen" category, based on "sufficient" animal evidence and "limited" evidence from studies in humans. Throughout this period every listing in the known human carcinogen category was based on sufficient evidence from studies in humans, which was considered to mean evidence from epidemiologic studies. P.I. App. Exh. 1 (8th RoC).
From 1994 to 1996, the agency undertook an extensive public review of its listing criteria/rules5 and its process for reviewing proposed RoC listings or changes in listings. Minutes from the 1995-96 meetings at which revisions to the criteria were considered do not indicate that any substantive change to the criteria for known carcinogen listings was intended. See, e.g., Def. P.I. Opp. Exh. 4 at 3.
On September 26, 1996 the agency published revisions to the listing criteria and review procedures in the Federal Register. 61 Fed. Reg. 50499 (Sept. 26, 1996). Am. Compl. Exh. 1.6 The notice stated, "The changes/additions in the revised criteria are highlighted by underlining."7 Id. The notice set forth the following as "Former BRC Criteria Known To Be Carcinogens":
There is sufficient evidence of carcinogenicity from studies in humans which indicates a causal relationship between the agent and human cancer.
Id. at 50499. The notice then immediately set forth the following as "Revised BRC Criteria Known To Be Human Carcinogens":
There is sufficient evidence of carcinogenicity from studies in humans which indicates a causal relationship between exposure to the agent, substance or mixture and human cancer.
Id. The notice then set forth a similar comparison of the former and revised criteria for "reasonably anticipated" human carcinogens.
The same day the revised criteria were published, a DHHS press release announced approval of "updated criteria" for the reasonably anticipated human carcinogen listings. Am. Compl. Exh. 2. The press release stated, "The original criteria for listing a substance as a known human carcinogen remain unchanged". Id. at 2 (italics in original). In a similar article in the August 1996 issue of Environmental Health Perspectives, the official journal of the NIEHS8, the agency stated, "The revised criteria for listing a substance as ‘known to be a human carcinogen’ are substantively unchanged from the former criteria." Am. Compl. Exh. 3. Both the September 26, 1996 DHHS press release and the related Environmental Health Perspectives article had been authorized by the DHHS Secretary and the NTP Director prior to their issuance. P.I. App. Exh. 8.
On July 11, 1997 NTP announced proposed new listings for the 9th RoC, including a proposal to upgrade dioxin from the "reasonably anticipated" category to the "known" category. 62 Fed. Reg. 37272 (July 11, 1997). Plaintiff Tozzi filed a public comment in August 1997 in which he explained that the nomination of dioxin for the "known" category was inconsistent with the revised listing criteria and past agency practice. Am. Compl. Exh. 8. Tozzi stated that in making its listing decisions, the agency had consistently relied on evaluations of the strength of the evidence from studies in humans (epidemiologic studies) by the International Agency for Research on Cancer ("IARC"), but IARC had concluded only six months earlier that the human evidence for TCDD was "limited" rather than "sufficient", as required by NTP for "known" human carcinogen listings. Id. at 1-4.9
The RoC is published following a formally-prescribed six-step review process. See, e.g., P.I. App. Exh. 1 at 231-232. Sometime prior to late September 1997, the agency held non-public meetings of the first two RoC review groups in this process, the "RG1" and the "RG2". Both of these groups voted in favor of the dioxin upgrade. In September 1997 the agency announced a date for the third step in the review process, a public meeting of NTP’s outside peer-review committee (the "RoC Subcommittee").
Prior to the RoC Subcommittee meeting, the agency issued Draft Background Documents ("DBDs") for the listing proposals, including dioxin.10 The DBDs reflected the findings of the RG1 and RG2 and contained the agency’s proposed listing rationales. The listing rationale for dioxin expressly relied on a three-part combination of evidence including (i) "human studies" finding an "association" between dioxin exposure and cancer, (ii) studies in animals, and (iii) various mechanism of action data, including studies in vitro.11 Am. Compl. Exh. 9 at RC-1. These findings and this listing rationale were presented to the RoC Subcommittee to concur with, dissent from, or recommend changes.
The public also was invited to comment on the proposed listings and rationale at the RoC Subcommittee meeting. Plaintiff Tozzi submitted comments on the DBD for dioxin, asserting that the proposed listing change and accompanying rationale were clearly contrary to the agency’s listing criteria for the "known" category and were inconsistent with the recent IARC evaluation of the human evidence. Am. Compl. Exh. 11. Tozzi pointed out that the agency’s three-prong listing rationale, as stated in the DBD, was contrary to the RoC listing criteria, which required a "known" listing to be based solely on "sufficient evidence of carcinogenicity from studies in humans which indicates a causal relationship". Id. at 1-2.
On October 31, 1997, the RoC Subcommittee voted 4 to 3 to concur with the RG1 and RG2 recommendation to upgrade dioxin to "known" based on the agency reasoning reflected in the DBD.12 Following this meeting, Tozzi wrote to the agency’s designated head of the RoC program, Defendant Kenneth Olden, to point out numerous alleged irregularities in the October 31, 1997 proceedings and to reiterate the central points of his previous comments. Am. Compl. Exh. 10.
Shortly thereafter, Defendant NTP Director Olden announced that there would be a "re-review" of dioxin, which would include a second meeting of the RoC Subcommittee on December 2-3, 1998. Am. Compl. Exhs. 12, 14. Prior to the second RoC Subcommittee meeting, the agency re-issued the September 1997 DBD, without any changes, along with a "supplement" of "Epidemiological Updates". Am. Compl. Exh. 21. The supplement did not contain any new reasoning supporting the listing proposal, nor did it correct any of the alleged inaccuracies of which Plaintiff Tozzi had complained prior to Olden’s ordering the re-review. At the December 2, 1998 re-review of dioxin by the RoC Subcommittee, the Subcommittee reversed its previous vote and voted 7 to 5 against the proposed dioxin upgrade. E.g., Pl. Opp. Exh. 25 at 9-10.
Between November 20, 1998 and January 19, 1999, there was an exchange of correspondence between Tozzi’s legal counsel and the agency’s legal counsel in which Tozzi’s counsel asserted that the agency’s failure to follow its own listing criteria for the proposed dioxin listing had left the process fatally flawed. Am. Compl. Exhs. 22, 24, 25. The agency’s legal counsel asserted that the agency’s proposed dioxin listing was validly based on a final "descriptive" paragraph in the September 26, 1996 notice of the criteria revisions, which stated that a listing could be based on "scientific judgment" concerning "all relevant information". Am. Compl. Exh. 24 at 2. Tozzi’s counsel indicated that Tozzi would mount a legal challenge to the agency’s position and the listing proposal if the agency continued to rely on that position. Am. Compl. Exh. 22 at 6; Am. Compl. Exh. 25 at 5.
On February 24, 1999, the NTP Executive Committee – the fourth step in the review process – held a non-public meeting at which it voted in favor of the proposed upgrade, despite the recent contrary vote of the external peer reviewers.13 Mot. Dismiss Exh. 2.
On April 2, 1999 and April 19, 1999, after the final period for public comment on the proposed listings for the 9th RoC had passed, the agency published what it described as "clarifications" of the listing criteria in the Federal Register. Am. Compl. Exhs. 27, 28. Read together, these notices stated that the agency need not rely solely on evidence from studies "in" humans for a listing in the "known" category, but rather could rely as a matter of "judgment" on any evidence it considered "relevant", including animal and in vitro data derived "from" humans. The agency also announced that this position would be applied to both pending and future listing proposals. The notices contained no announcement of a departure from a previous agency position or any explanation for a revised position on the meaning of the "known" criteria.
Sometime after the February 24, 1999 NTP Executive Committee meeting, the listing proposals for the 9th RoC, including the proposal to upgrade dioxin, were forwarded to Defendant Olden for his review -- the fifth step in the review process. At the conclusion of that review, in early spring 2000, Defendant Olden recommended that dioxin be upgraded to a known human carcinogen.14 R. 32. Defendant Olden’s written recommendation to the Secretary was based, virtually verbatim, on the same three-part rationale set forth in the agency’s original (September 1997) DBD for dioxin. Id.; Am. Compl. Exh. 9 at RC-1.
On May 4, 2000, counsel for Defendants disclosed to Plaintiffs that the DHHS Secretary had completed her approval of the NTP Director’s recommendation -- the sixth and last step in the RoC review process -- and that the final dioxin listing was ready for publication. That final listing, first provided to Plaintiffs in court on the morning scheduled for oral argument, stated in pertinent part:
2,3,7,8-Tetrachlorodibenzo-p-dioxin (2,3,7,8-TCDD or TCDD) is known to be a human carcinogen based on sufficient evidence of carcinogenicity from studies in humans, involving a combination of epidemiological and mechanistic information which indicate a causal relationship between exposure to TCDD and human cancer.
Dkt. Ref. 47 (emphasis added). The agency had never used this formulation in any known human carcinogen listing in previous RoCs. Instead, the agency had stated simply, "there is sufficient evidence for the carcinogenicity of [substance] in humans" -- period. See, e.g., P.I. App. Exh. 1 at 15 (aflatoxins), 16 (4-aminobiphenyl), 16 (analgesic mixtures containing phenacetin), 17 (arsenic), 20 (asbestos), 22 (azathioprine), 23 (benzene).
On January 19, 2001, the agency published an addendum to the 9th RoC containing the above final dioxin listing. Supp. R. The final listing also identifies "hospital wastes" as a source of dioxin production and notes that more than 90 percent of human exposure to dioxin occurs through consumption of food, primarily meat, dairy products and fish. Id. at III-58B.
SUMMARY OF ARGUMENT
This case concerns an agency’s attempt to classify a substance as a known human carcinogen even though the undisputed evidence necessary to support such a classification, under the agency’s own rules, has not been adduced. The agency’s rules require a finding of sufficient evidence from "studies in humans" which indicates a causal relationship. However, both the agency and the world’s leading international cancer research organization, whose determinations on such matters the agency has always followed, have concluded that the epidemiologic studies are not "sufficient" to indicate a causal relationship between dioxin exposure and cancer in humans. Had the NTP, in its scientific expertise, concluded that the epidemiologic data on dioxin were "sufficient" to demonstrate cancer causation in humans, this case likely would never have been brought. But, as the agency has admitted, the requisite data simply are not there.
The name "dioxin" is notorious to many Americans, of course, and the agency’s review was conducted in a charged political environment. Perhaps in response to this pressure, the agency sought to overcome the deficit in human data by (a) expanding its interpretation of the listing criteria for "known" carcinogens beyond what the agency and experts in the field had always used the words to mean, and (b) recharacterizing the relatively more abundant data derived from studies in experimental animals and studies in vitro as "studies in humans."
Had the agency chosen to formally revise its carcinogen classification process to adopt these arguably suspect listing policies, then as the body congressionally authorized to administer the RoC program it might well have had authority to do so. Defendants failed to follow any appropriate procedures in effecting such formidable changes, however. Instead, the agency engaged in cryptic Federal Register "clarifications" containing distortions of plain language, post hoc "interpretations", and other semantic sleight of hand in an attempt to claim that no change in the criteria for known carcinogen listings even occurred. As discussed below, the district court failed to see through this smokescreen.
First, the district court erred when it granted deference to an agency interpretation of the revised RoC listing criteria that was contrary to the plain language of the rule and contrary to the Secretary’s intention at the time the criteria were issued, as demonstrated by two compelling pieces of contemporaneous evidence. By adopting such deference towards the agency’s position, the district court failed to engage in the "searching and careful" examination of the record that was required.
Second, applying this mistakenly deferential standard, the court below incorrectly held that the agency’s position on the listing criteria was reasonable. Under the NTP rules, in order for a substance to be listed as a known human carcinogen in the RoC, there must be a finding of "sufficient evidence from studies in humans which indicates a causal relationship" between exposure to the substance and cancer. 61 Fed. Reg. at 50499 (emphasis added). From the inception of the RoC program in 1980 until the advent of this litigation, the agency had always interpreted this requirement to mean sufficient epidemiologic evidence. The language of the criteria for "known human carcinogen" listings was not substantively changed when the criteria were revised in 1996.
The final "descriptive paragraph" in the September 26, 1996 Federal Register notice does not effect any substantive revision to the known listing criteria and cannot be reasonably interpreted to allow listings in the known category in the absence of sufficient epidemiologic evidence. The final paragraph’s broad catalog of "relevant information" plainly contradicts the first sentence of the "known" criteria, which sharply limits the type of data upon which known human carcinogen listings may be based. Neither the language of the revised criteria, the formatting and other presentation of the criteria in the Federal Register, nor the various statements of subordinate officials that the agency has cited support the argument that the final descriptive paragraph following the criteria was intended to substantively modify the criteria for known human carcinogen listings. The agency’s position that the final descriptive paragraph is consistent with the irreconcilable restrictive terms of the known carcinogen criteria is therefore arbitrary and capricious.
Under the agency’s theory, all RoC listings are to be based, not on the precisely delimited categories of evidence set forth in the criteria, but loosely, "on scientific judgment, with consideration given to all relevant information." Such an application of the final paragraph to both the known and the reasonably anticipated listings could easily result -- as in the case of dioxin -- in placement of the same substance into either category, a result that Congress, in mandating the RoC, expressly directed the agency to avoid. This is not a reasonable agency position.
Third, the district court failed to call the agency to task for not supplying clear notice and a reasoned explanation for its dramatic change in policy. Up until the publication of 9th RoC, the agency had never listed a substance as a known human carcinogen without a finding of "sufficient" evidence, based on epidemiologic studies, that the substance causes cancer in humans. When the listing criteria were revised in 1996, the agency did not announce any change in this policy, nor did it announce any such change two years later in publishing the 8th RoC. Not until Plaintiffs threatened this lawsuit did the agency finally go on record, in April 1999, and even arguably give notice that known carcinogen listings need not be based on sufficient evidence from epidemiological studies alone. Even at that point, the agency’s ambiguous "clarifications" were contrary to the wording of the "known" criteria and failed to provide clear notice of, and any reasoned explanation for, such a dramatic departure from longstanding agency practice. The district court failed to explain why this conduct was not arbitrary and capricious.
Fourth, the district court should not have tolerated Defendants’ abrupt deviation from established agency practice in reviewing substances for listing in the RoC. In an eleventh hour effort to gloss over its reliance on studies outside the permissible scope of the known carcinogen criteria, the agency changed the dioxin listing rationale that had been presented as the basis for five of the six "Formal Review Steps" for the RoC, including all points at which public observation and comment had been permitted.15 The new published rationale carefully eliminates specific reference to the agency’s obvious reliance on animal data to supplement less than sufficient epidemiologic data, which had appeared in the original proposed listing. The new version states instead that the upgraded listing is based on "studies in humans, involving a combination of epidemiological and mechanistic information" (emphasis added), while still citing for support animal and in vitro studies. This rationale, first presented to Plaintiffs only minutes before oral argument, was never subjected to outside peer-review or any of the other safeguards built into the RoC review process. By jettisoning its own established review procedures, the agency has engaged in further arbitrary and capricious conduct in violation of the APA.
Importantly, the Court in this case certainly is not called upon to second guess any agency determination regarding complicated scientific or technical issues relating to dioxin’s alleged carcinogenicity, determinations which would be accorded substantial deference. Instead, Appellants ask the Court to hold, as a matter of law, that the agency has (i) arbitrarily and capriciously disregarded its own published listing criteria in connection with the dioxin review, (ii) failed to provide notice of, and any reasoned explanation for, a substantive change in its longstanding policy regarding the criteria for known human carcinogen listings, and (iii) inappropriately undermined the multi-level RoC review process by arbitrarily and capriciously inserting a new, unreviewed and unauthorized post hoc rationale for the upgraded dioxin listing.
I. The District Court Erred in Granting Deference to the Agency’s New
Position on the Revised Listing Criteria.
This Court exercises de novo review of the district court’s decision. See, e.g., Scheduled Airlines Traffic Offices, Inc. v. Department of Defense, 87 F.3d 1356, 1361 (D.C. Cir. 1996) (reversing summary judgment for agency) (Tatel, J.). The applicable legal standard requires that a court’s review of agency action be "searching and careful". Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971); Wawszkiewicz v. Department of Treasury, 670 F.2d 296, 301 (D.C. Cir. 1981); Ethyl Corp. v. EPA, 541 F.2d 1, 34-35 (D.C. Cir.) (en banc), cert. denied, 426 U.S. 941 (1976).
The district court in this case concluded that it was required to give deference to the agency in interpreting the 1996 revised listing criteria (Mem. Op. at 10), and Appellants concede that an agency’s interpretation of its own rule ordinarily is entitled to some deference. See, e.g., Auer v. Robbins, 519 U.S. 452, 461 (1997). Both the Supreme Court and this Court, however, have firmly established two important exceptions to this doctrine. An agency’s reading of its own rule should not be accorded deference where an alternative reading is compelled by either (i) "the regulation’s plain language", or (ii) "other indications of the Secretary’s intent at the time of the regulation’s promulgation." Gardebring v. Jenkins, 485 U.S. 415, 430 (1988); S.G. Loewendick & Sons, Inc. v. Reich, 70 F.3d 1291, 1294 (D.C. Cir. 1995) (quoting Gardebring). Both of these exceptions are clearly present here, and the district court committed reversible error by failing to account for either.
First, the law is clear that the plain meaning of agency rules controls over any conflicting agency interpretation. Pfizer, Inc. v. Heckler, 735 F.2d 1502, 1509 (D.C. Cir. 1984). The Supreme Court last year reiterated the exception for deference to agency interpretations in such situations. In Christensen v. Harris County, 529 U.S. 576 (2000), the Court confirmed that "Auer deference is warranted only when the language of the regulation is ambiguous" and held that no deference was warranted in that case because, "To defer to the agency’s position would be to permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation." Id. at 588.
Here, there is no ambiguity because the 1996 revisions clearly effected no substantive change to the "known" category criteria. The September 26, 1996 Federal Register notice states plainly that the only revision to the "known" category are those "highlighted by underlining" (which became italics in the notice). Under the section of the notice titled "Revised BRC Criteria Known To Be Human Carcinogens", however, the only revisions indicated by italics are minor editorial changes.
The plain meaning of the term "studies in humans" in the revised criteria also forecloses any interpretation that would include studies in animals or studies in vitro. The term obviously excludes evidence from studies in animals. It also plainly excludes reliance on data from in vitro experiments, such as exposure of cell cultures or tissue samples to a substance while in laboratory containers. The word "in" is important here -- a studied biological reaction obviously is not "in" a human if it occurs "in" a petri dish.16 "Studies in humans" are studies of health effects in whole humans exposed while living. Thus the term plainly cannot include studies "in animals" or in glass (in vitro).17
That the term "studies in humans" is limited to epidemiological studies is not only obvious from the term itself, but is confirmed by the meaning IARC and other experts in the field ascribe to the term. The IARC monographs, on which Defendants have consistently relied, have maintained a similar separation between "studies in humans" and non-epidemiologic evidence. P.I. Reply Exh. 2. Every RoC prior to the 9th RoC also adhered to this distinction.18 Even the agency’s own DBD for dioxin clearly separates "human studies" from both animal studies and mechanistic data. Am. Compl. Exh. 9 at i-ii, RC-1, RC-2. Prior to the exchange of correspondence with agency counsel leading up to this lawsuit, the agency itself had consistently used the term "studies in humans" to mean simply epidemiologic studies. See P.I. App. Exh. 1.
Both sides agree that mechanistic data were not used as a basis for any RoC listings prior to 1996. The parties also agree that the revised criteria permitted consideration of such evidence for at least some RoC listings following the 1996 revisions. Under the agency’s theory, mechanistic data were therefore newly available to support "known" carcinogen listings in the 8th RoC, which was published in May 1998. Yet of the 70 substances that were listed as known human carcinogens in the 8th RoC, none was classified as a known human carcinogen based on mechanistic data where the epidemiological data were less than sufficient. Not one. See P.I. App. Exh. 1.
The term "studies in humans" thus plainly excludes "mechanistic" studies, many of which are based on animal data,19 but none of which are conducted "in humans". The agency’s new interpretation, which would permit listings in the known category to be based on undifferentiated "mechanistic information", is contrary to this plain meaning and should therefore be accorded no deference.
Even putting aside the question of whether the "plain language" of the revised listing criteria compels a reading contrary to the agency’s new interpretation -- which it does -- the district court overlooked two extraordinarily powerful pieces of contemporaneous evidence documenting the agency’s intent, at the time the revised criteria were published, not to broaden the criteria for known human carcinogen listings. See Am. Compl. Exhs. 2, 3. This evidence alone should have persuaded the lower court not to grant deference to the agency’s position. The district court discussed neither of these exhibits, however, nor this pivotal argument, in its opinion granting the agency’s motion for summary judgment.
To appreciate the seriousness of this omission, and the significance of these two pieces of documentary evidence, it is important to understand the agency’s position that the 1996 criteria revisions allowed, for the first time, consideration of evidence other than human epidemiological data in support of known carcinogen listings. The parties agree that, prior to 1996, listings in the "known" category required that a causal relationship be indicated by "sufficient" human evidence in the form of epidemiological data, and only epidemiological data. The agency now contends that the 1996 revisions permitted NTP to list substances in the "known" category on the strength of "mechanism of action" data, even if the epidemiologic data were less than sufficient. Because the criteria had not permitted consideration of mechanism of action data prior to 1996, the agency must now argue that the 1996 revisions substantively changed the criteria for the "known" category. Appellants, by contrast, maintain that the 1996 revisions effected no such change to the criteria for the "known" category.
The first piece of contemporaneous evidence contrary to the agency’s current reading of the criteria is a DHHS press release, issued the very day the revised criteria were published. Am. Compl. Exh. 2. The banner headline of the press release announces "Updated Criteria Approved for ‘Anticipated’ Human Carcinogens". Id. After discussion of how the agency intends, for the first time, to allow reasonably anticipated carcinogen determinations to be made on a "broader scientific base that includes the known chemical structure of the substance and its effects at the cellular level", id. at 1, the press release goes on to state, "The original criteria for listing a substance as a known human carcinogen remain unchanged." Am. Compl. Exh. 2 at 2 (italics in original). The NTP Director reviewed and approved this press release and submitted it to the HHS Secretary in an August 15, 1996 memorandum describing the revised criteria. P.I. App. Exh. 8 at 3. The Secretary herself approved the issuance of the press release. Id. at 3-4.
The second piece of contemporaneous evidence confirming the agency’s intention at the time is an August 1996 article in Environmental Health Perspectives, the official journal of the Appellee agency that oversees the NTP.20 Am. Compl. Exh. 3. The article, accompanied by the official NTP logo, stated, "The revised criteria for listing a substance as ‘known to be a human carcinogen’ are substantively unchanged from the former criteria. . . ." Like the press release, the thrust of this article, as stated in the opening paragraph, was that Defendant Shalala "has approved a revision of the criteria for listing a substance in the Biennial Report on Carcinogens (BRC) as ‘reasonably anticipated to be a human carcinogen.’" Id. (Emphasis added.) Both Defendants Olden and Shalala authorized issuance of such a statement in Environmental Health Perspectives. P.I. App. Exh. 8 at 3-4.
If, at the time the criteria were revised, the agency intended the new criteria to allow mechanism of action data to support "known" category listings in the absence of "sufficient" epidemiologic data -- truly a sea change in RoC methodology -- then why were these two documents ever issued? Neither of these crucial pieces of record evidence has ever been satisfactorily explained. The district court questioned government counsel about the press release at oral argument (Tr. at 41-43), and counsel’s only explanation was that the release was "somewhat misleading". Tr. at 43. Yet neither of these critical pieces of evidence was even mentioned in the district court’s opinion.
Given the unmistakable evidence of contrary contemporaneous agency intent, the district court should have accorded no deference to the new interpretation that the agency asserted during litigation.21 Instead of addressing the evidence presented in a "searching and careful" examination, the district court ignored the rule in Gardebring and summarily held that the agency is to be accorded deference in its new interpretation of the listing criteria.22 This was error. Reuters, Ltd. v. FCC, 781 F.2d 946, 951 (D.C. Cir. 1986); Platt College of Commerce, Inc. v. Cavazos, 796 F. Supp. 22, 26 (D.D.C. 1992); see also SSM Rehabilitation Inst. v. Shalala, 68 F.3d 266, 270-71 (8th Cir. 1995) (Secretary’s contemporaneous interpretation took precedence over post hoc "clarification").
The reason Gardebring bears so heavily on this appeal is that there was absolutely no contemporaneous evidence of a contrary agency intent in Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (1994), Wyoming Outdoor Council v. United States Forest Serv., 165 F.3d 43 (D.C. Cir. 1999), or Rollins Envtl. Servs. v. United States EPA, 937 F.2d 649 (D.C. Cir. 1991), the principal cases upon which the district court relied in granting "substantial deference" to Defendants’ "interpretation" of the listing criteria. See Mem. Op. at 10-11. Had evidence even approximating the probative value of the DHHS press release or the Environmental Health Perspectives article been adduced in those cases, the rule in Gardebring would have come into play, and a different outcome might well have been reached. The Thomas Jefferson, Wyoming Outdoor Council, and Rollins cases, however, have nothing to do with contemporaneous evidence of a contrary agency intent and thus offer no basis for the district court’s finding that substantial deference is warranted here.
II. The District Court’s and the Agency’s Application of the Final "Descriptive" Paragraph to the "Known" Carcinogen Listings Is Neither Reasonable Nor Reconcilable with Congressional Intent to Maintain a Clear Distinction Between the Two RoC Listing Categories.
As an essential component of its holding, the district court accepted without comment the agency’s assertion that the final "descriptive" paragraph of the revised criteria was intended to substantively modify both the "known" and "reasonably anticipated" listing categories. This paragraph states, "Conclusions regarding carcinogenicity in humans or experimental animals are based on scientific judgment, with consideration given to all relevant information. . . ."23
The agency argues that this provision effectively preempts the first sentence of the "known" criteria by allowing known carcinogen listings to be based on any information deemed "relevant". The paragraph provides that "relevant information includes, but is not limited to" several listed types of mechanistic and other data, including data derived from animal and in vitro studies. 61 Fed. Reg. at 50500 (emphasis added).
The seemly innocuous provision in the final "descriptive" paragraph cannot reasonably be interpreted to effect the sweeping change in the known carcinogen listing criteria that the agency has proposed during this litigation. Such a reading would flatly contradict the express terms of the "known" criteria, which clearly narrow the basis for listings in that category to "studies in humans." For nearly three years after the revised criteria were adopted, the agency never interpreted the criteria in the way Defendants advanced in the case below, and it was only with the specter of this litigation looming that the agency’s lawyers constructed the contrivance that the district court embraced as "eminently reasonable". Mem. Op. at 11.
The final descriptive paragraph is printed in italics under the heading of "Revised BRC Criteria Reasonably Anticipated To Be Human Carcinogens", and, as an initial matter, it appears to apply only to the reasonably anticipated carcinogen listings. There is no indication from either the format or the textual explanations that the paragraph alters the criteria for the "known" category. The district court’s conclusion in this regard that "the presentation of the proposed change in the Federal Register" supports the agency’s position (Mem. Op. at 11) does not bear scrutiny. In briefing below Defendants themselves had urged the district court to disregard the formatting in the Federal Register and to rely instead on shifting margins in unpublished internal agency documents purporting to show that the final "descriptive" paragraph applies to both the "known" and the "reasonably anticipated" categories. Appellants, by contrast, sought from day one -- even prior to the lawsuit -- to point out how the Federal Register formatting supports the conclusion that the final descriptive paragraph cannot substantively modify the "known" criteria. See, e.g., Am. Compl. Exh. 25 at 3 (January 19, 1999 letter from Plaintiffs’ counsel to DHHS counsel noting how Federal Register section headings contradict DHHS position).
Even if the Court were to find that the paragraph in some sense "applies" to both categories of listings, however, there certainly is no evidence that the agency intended to obviate, or substantively dilute, the requirement that known human carcinogen listings be based on sufficient evidence from studies in humans.
1. Neither the Plain Language of the Revised Criteria Nor the Presentation of the Criteria in the Federal Register Supports the Argument that the Final Descriptive Paragraph Substantively Modifies the Criteria for Known Human Carcinogen Listings.
The September 26, 1996 Federal Register notice expressly refers to the disputed text as a "descriptive paragraph", in evident differentiation from the preceding substantive text. Thus, under the terms of the notice itself, the final paragraph is not part of the substantive criteria. The Federal Register notice plainly states, "The changes/additions in the revised criteria are highlighted by [italics]," but no italicized text in the subsection "Revised BRC Criteria Known to Be Human Carcinogens" references the final paragraph. 63 Fed. Reg. at 50449 (top of col. 3). Likewise, the final "descriptive" paragraph does not purport to make any substantive revisions to the known criteria.
The final paragraph refers simply to considering "all relevant information". 61 Fed. Reg. at 50500 (emphasis added). On its face this is apparently a very benign statement, since "relevant data" must refer to whatever data are "relevant" under the "criteria" set out prior to this paragraph. Thus, for known human carcinogen listings, "relevant" information would include "evidence from studies in humans", and the final paragraph would clarify that reviewers are to use their scientific judgment in determining whether such studies are sufficient to indicate a causal relationship. Animal or other "mechanistic" data, however, are simply not "relevant" under the "known" criteria, which require sufficient evidence from studies in humans24.
The agency’s extraordinary new position that the final "descriptive" paragraph allows consideration of human in vitro and animal data to support known carcinogen listings in the absence of sufficient epidemiologic data became apparent only during communications leading up to this lawsuit. Nowhere in the notice of the revised criteria did the agency state that listings for the two categories would be based on whatever evidence the agency "chooses" to deem "relevant" -- a position that necessarily follows from the agency’s current interpretation, and one which the district court accepted. See Mem. Op. at 11 ("Defendants have chosen to consider mechanistic and animal data relevant.")
2. Ambiguous and Ad Hoc Statements of Subordinate Agency Officials, Made Significantly Before or Significantly After Issuance of the Revised Criteria Were Published, Do Not Demonstrate an Agency Intent that the Final Descriptive Paragraph Substantively Modify the Criteria for Known Human Carcinogen Listings.
The agency argued at some length in the district court, and in its November 27, 2000 motion for summary affirmance in this Court, that statements of subordinate agency officials, primarily during meetings in 1995-96 leading up to the issuance of the listing criteria revisions in September 1996, indicated that the agency intended that the final descriptive paragraph not only to apply to, but to substantively modify, the criteria for both categories of listings.
These statements, however, do not reflect the final and formally published views of the agency itself. They are instead excerpts of preliminary discussions from nine to seventeen months before the final rule was promulgated. The reason Gardebring and similar cases require the Court to look at "other indications of the Secretary’s intent at the time of the regulation’s promulgation" is that preliminary statements by agency officials may or may not ultimately be adopted in formal agency policy. See Gardebring, supra, 485 U.S. at 430.
Similarly unpersuasive are the agency’s citations to statements made significantly after the promulgation of the revised criteria. Statements by agency officials or their counsel made well after a rule’s promulgation may reflect mere revisionist justification. See Reuters, Ltd. v. FCC, 781 F.2d 946, 951 (D.C. Cir. 1986) (post hoc rationalizations entitled to no weight); Platt College of Commerce, Inc. v. Cavazos, 796 F. Supp. 22, 26 (D.D.C. 1992) (same).
Many of these statements are ambiguous or consistent with Appellants’ position that the final descriptive paragraph does not apply to known carcinogen listings or does not substantively modify the criteria for the known category.25 The summary minutes of the listing criteria meetings, for example, document discussions during which the scientists considered, but rejected, proposals to broaden the types of evidence that the agency may consider in listing a substance as a known human carcinogen. P.I. Opp. Exh. 4 at 3-4, 6; P.I. Opp. Exh. 6 at 4-5, 8; P.I. Opp. Exh. 7 at 3; P.I. Opp. Exh. 11 at 1, 4.
Moreover, in sharp contrast to the two formal agency announcements that Appellants submitted below -- statements authorized by the DHHS Secretary and the head of the NTP themselves -- the ad hoc statements the agency cites were made by subordinate officials and did not represent formal positions of the agency. See Paralyzed Veterans of America v. D.C. Arena, L.P., 117 F.3d 579, 587 (D.C. Cir. 1997) ("speech of a mid-level official of an agency . . . is not the sort of ‘fair and considered judgment’ that can be thought of as an authoritative departmental position.") (quoting Auer v. Robbins, 519 U.S. 452, 462 (1997)).
The agency’s extraordinarily broad reading of "all relevant information" in the final descriptive paragraph as allowing less than sufficient epidemiologic evidence to support both "known" and "reasonably anticipated" listings would completely vitiate any distinction between the two categories. As Appellants’ counsel attempted to explain at oral argument (Tr. at 11-14), the undisputed data set on potential dioxin carcinogenicity closely parallels the language of the "reasonably anticipated" category. Those criteria state that a substance shall be classified as a "reasonably anticipated" human carcinogen if:
There is less than sufficient evidence of carcinogenicity in humans . . . however . . . there is convincing relevant information that the agent acts through mechanisms indicating it would be likely to cause cancer in humans.
61 Fed. Reg. at 50500-50501. Agency statements regarding the scientific record confirm that the evidence regarding dioxin’s potential carcinogenicity consists of:
Am. Compl. Exh. 9 at RC-1. Thus, the agency’s own characterization of the data set for dioxin matches almost precisely the criteria for "reasonably anticipated" listings.
Under the agency’s theory, the "all relevant information" language from the final descriptive paragraph would permit upgrades to the "known" category, based on mechanistic data, even though the human data were less than sufficient. But if the final paragraph applies to both the "known" and the "reasonably anticipated" categories in this way, then any substance with the above profile could be placed into either category. Such an irrational blurring of the two categories would be both contrary to past agency practice and a direct contravention of congressional intent.
The Chairman of the Subcommittee that initiated the legislation mandating the RoC stated in describing the bill, "[T]he report should be properly organized so that no possible confusion could exist between clearly demonstrated carcinogens and those for which convincing data are not yet available. . . ." 124 Cong. Rec. 34,938 (1978) (statement of Chairman Rogers). The agency’s proffered reading of the final paragraph cannot be squared with this congressional directive. No "interpretation" can be considered reasonable if it allows simultaneous placement of the same chemical into two separate categories, categories which both Congress and the agency intended to remain distinct.
III. The District Court Erred in Ignoring the Agency’s Failure to Provide Notice and a Reasoned Explanation for a Change in Its Longstanding Position Regarding the Meaning of the Criteria for "Known" Human Carcinogen Listings.
Even if the Court were to conclude that the revised criteria permit listings in the known carcinogen category to be based on less than sufficient epidemiological evidence in combination with "mechanistic information"-- which they do not -- and even if the agency’s reading of the final descriptive paragraph were somehow reconcilable with the restrictive terms of the known carcinogen criteria -- which it is not -- still, at no point has the agency ever clearly announced that it was altering the "known" criteria and provided a reasoned explanation for changing a policy which dates back to the earliest RoCs.26
It is a "settled tenet" of administrative law that an agency acts arbitrarily and capriciously when it fails to provide a reasoned justification for a change in an established policy. Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41-42 (1983); DSE, Inc. v. United States, 169 F.3d 21, 31 (D.C. Cir. 1999); Troy Corp. v. Browner, 120 F.3d 277, 286-87 (D.C. Cir. 1997); Graphic Communications Int’l Union, Local 554 v. Salem-Gravure Division of World Color Press, Inc., 843 F.2d 1490, 1493-94 (D.C. Cir. 1988) cert. denied, 489 U.S. 1011 (1989); see also Pfizer, Inc. v. Heckler, supra, 735 F.2d at 1510. In this case, the agency has done precisely that. Although the agency’s failure to provide a reasoned analysis is perhaps understandable given the impossibility of reconciling Defendants’ new position with the narrow language of the known carcinogen criteria, that impossibility does not excuse the attendant APA violation.
In American Lung Ass'n v. EPA, 134 F.3d 388 (D.C. Cir. 1998), this Court discussed the reason agencies must adequately explain the principles underlying their decision-making:
Judicial deference to decisions of administrative agencies . . . rests on the fundamental premise that agencies engage in reasoned decision-making. See Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519, 524-25, 544-45, 558, 98 S.Ct. 1197, 1202-03, 1211-13, 1219, 55 L.Ed.2d 460 (1978); SEC v. Chenery Corp., 332 U.S. 194, 209, 67 S.Ct. 1575, 1583-84, 91 L.Ed. 1995 (1947) (agency's experience, appreciation of complexities and policies, and responsible treatment of the facts "justify the use of the administrative process"). With its delicate balance of thorough record scrutiny and deference to agency expertise, judicial review can occur only when agencies explain their decisions with precision, for "[i]t will not do for a court to be compelled to guess at the theory underlying the agency's action...." SEC v. Chenery Corp., 332 U.S. at 196-97, 67 S.Ct. at 1577. Where, as here, Congress has delegated to an administrative agency the critical task of assessing the public health and the power to make decisions of national import in which individuals’ lives and welfare hang in the balance, that agency has the heaviest of obligations to explain and expose every step of its reasoning. For these compelling reasons, we have always required the [EPA] Administrator to "cogently explain why [she] has exercised [her] discretion in a given manner." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins., 463 U.S. 29, 48, 103 S.Ct. 2856, 2869, 77 L.Ed.2d 443 (1983).
Id. at 392 (Tatel, J.). The Court in American Lung Ass’n went on to hold that EPA had failed to adequately explain its conclusion that physical effects experienced by some asthmatics after certain sulfur dioxide exposures did not amount to a public health problem. Id. at 393.
As previously noted, for all the RoCs from the beginning of the program in 1980 through 1998, the agency was absolutely consistent in requiring "sufficient" epidemiological evidence from studies in humans indicating a causal relationship before it listed a substance in the known carcinogen category. When did NTP change this listing policy? And why did it change it? Certainly the agency did not announce any change to the known carcinogen criteria when the revised criteria were published in 1996. In fact, as discussed above, it announced precisely the opposite. Am. Compl. Exhs. 2, 3. No listings in the 8th RoC in May 1998 suggested that the agency had changed the known criteria. Not until April 1999, after being confronted with this lawsuit, did the agency even arguably indicate a view that listings in the known category could be based on less than sufficient epidemiological evidence.
But even the two April 1999 Federal Register "clarifications" are merely conclusory statements rather than a clear announcement of a shift in position and a reasoned explanation for the substantial change to the criteria that the agency now asserts.27 In its April 19, 1999 Federal Register notice, the agency stated that the "final paragraph of the criteria", has applied to the "known" category "[s]ince these criteria were first published on September 26, 1998. . . ." [Sic – presumably 1996]. 64 Fed. Reg. at 19189. Neither this "clarification" nor the preceding notice on April 2, 1999 explained why the agency had concluded, for the first time, that the human carcinogenicity of a substance could be known in the absence of sufficient epidemiologic evidence.
Thus, even as the case stands today, the agency still has not given any reasoned justification for the radical change of course it asserts in this litigation. It also has not explained how its new position can be reconciled with the plain wording of the 1996 notice of revisions and the agency’s unmistakable contemporaneous "interpretation" of those revisions as having made no substantive change to the criteria for the "known" category. Nor has the agency attempted to explain how its new position comports with congressional intent that there be a clear and unmistakable distinction between the "known" and "reasonably anticipated" categories. The record is devoid of any explanation at all, much less a reasoned explanation. As noted, however, no reasoned explanation is possible.
IV. The District Court Erred in Failing to Find that the Agency’s Abrupt Change of Position on the Meaning of the Criteria, as Expressed in the Agency’s Final Dioxin Listing, Deviated So Much From Its Previous Position During the Report on Carcinogens Review Process as to Have Deprived the Review Process of Its Effective Role.
As discussed above, by proposing an upgrade to the dioxin listing based on less than sufficient evidence from studies in humans, the agency violated its own RoC listing rules. Thus, from the first publication of the DBD in 1997, the agency had started off on the wrong foot. Then, after encountering extensive criticism for its proposal -- including its external peer-review panel’s rejection of the upgrade and Plaintiffs’ initiation of this lawsuit -- the agency attempted to fix its violation by slipping in a new listing rationale, which it hoped would be less objectionable, at the very end of the review. This whipsaw in the normal review process, however, presents a separate, and alternative, basis for a finding of arbitrary and capricious agency action.
The agency has adopted what it describes as "Formal Review Steps" for consideration of listings in the RoC. P.I. App. Exh. 1 at 231-32; see also 61 Fed. Reg. at 50500 (announcing "Expanded Review Procedure"). From the date of its issuance near the beginning of the dioxin review in late September 1997 until Defendants’ counsel handed Plaintiffs’ counsel a type-set version of the final dioxin listing on May 4, 2000, the Draft Background Document for TCDD had been the centerpiece document around which the dioxin review was conducted. All parties involved -- the Plaintiffs, the four committees of reviewing scientists, the commenting public, and all other participants in the multi-level RoC review process -- had based their comments and decisions on the listing rationale stated in the DBD. That agency rationale included an express reliance on animal and in vitro data and supplied the basis for recommendations by three of the four review committees that dioxin be upgraded.
Significantly, even the Director of NTP, Defendant Olden, expressly relied on animal and in vitro data as a basis for his recommendation to the DHHS Secretary that dioxin be upgraded to a known human carcinogen. R. 32. In language virtually identical to that of the original DBD, Dr. Olden stated that his recommendation was based on the three kinds of evidence: (1) "human studies" showing an "association" (but not a "causal relationship") between dioxin exposure and cancer, (2) "studies in experimental animals", and (3) "a basic similarity in the mechanism of induction". Id. Thus, even Dr. Olden’s office was willing to admit that NTP was relying on animal and in vitro data to support the upgraded listing, and that the listing was not based on "sufficient evidence from studies in humans".28
Then, faced with the prospect of having to defend this untenable rationale in open court, the DHHS Secretary’s Office and agency counsel arbitrarily attempted to sanitize the agency’s stated rationale in the hope that, once scrubbed of its blatant reliance on animal data, the dioxin listing would pass legal muster. The new rationale stated that the upgraded dioxin listing was "based on sufficient evidence of carcinogenicity from studies in humans, involving a combination of epidemiological and mechanistic information". Dkt. Ref. 47 at III-58; see also Supp. R. at III-58A. The Secretary’s Office arrived at this new language independently, with no notice to the public, apparently with no input from any outside scientists, and in complete disregard for the rationale considered by the five preceding review levels. What additional review the Secretary’s Office did perform, if any, was accomplished in less than 10 weeks. See R. 32 and note 14, supra (noting that the NTP Director’s recommendation was drafted sometime between February 11, 2000 and the date scheduled for oral argument, May 4, 2000).
The APA requires the Court to hold unlawful and set aside agency action that is "without observance of procedure required by law." 5 U.S.C. § 706(1)(D). An agency’s procedural compliance with statutory norms is subject to close scrutiny, and the reviewing court must conclude that the agency acted with procedural integrity. See ITT World Communications v. FCC, 699 F.2d 1219, 1246 (D.C. Cir. 1983), rev’d on other grounds, 466 U.S. 463 (1984); National Resources Defense Council v. SEC, 606 F.2d 1031, 1048 (D.C. Cir. 1979) (court's review is "exacting"); Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1027 (D.C. Cir. 1978). In this regard, the Court may consider whether the Defendants have "applied proper legal standards and conducted the proceedings consistently with the statute and regulations". Cullivan v. Shalala, 886 F. Supp. 568, 572 (E.D. Tex. 1995) (emphasis added) (citing Bormey v. Schweiker, 695 F.2d 164, 168 (5th Cir. 1983), cert. denied, 462 U.S. 1121 (1983)).
The "Formal Review Steps" for RoC listings, which have been published in the Federal Register, as well as in previous editions of the RoC, constitute "regulations" with which Defendants should be held to comply. The DHHS Secretary’s Office therefore should not be permitted to effect a radical change to the agency’s listing rationale at the very end of the RoC process that would both undermine the purpose of the multi-level review process and mislead the public regarding the rationale that the review committees considered.
As an alternative to a violation of APA section 706(1)(D), which pertains to procedures "required by law", the Court may also hold that the Defendants’ conduct in deviating from the agency’s voluntarily established RoC review procedures evidences arbitrary and capricious conduct under 5 U.S.C. § 706(1)(A) and requires that the final dioxin listing be set aside. An agency’s abrogation of its own voluntary procedures may be arbitrary and capricious because, "Although an agency is ‘free to fashion [its] own rules of procedure’, it may not change the rules as the game progresses." Ingram Barge Co. v. United States, 691 F. Supp. 474, 482 (D.D.C. 1988) (quoting Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519 (1978)), rev’d on other grounds, 884 F.2d 1400 (D.C. Cir. 1989).29
The 8th RoC describes the six-level RoC review process as the "Formal Review Steps". P.I. App. Exh. 1 at 231. These Formal Review Steps are as follows:
Id. at 231-32. Up through level 5 above, the DBD for dioxin -- with its express reliance on animal data -- served as the basis for the dioxin review. Significantly, four out of these five groups recommended that the upgrade go forward, based on the impermissible rationale relying on animal data. Only at the third level (the RoC Subcommittee), where independent scientists and outside commenters challenged the agency’s use of animal data for the upgrade, was the proposal voted down (after re-review).
The importance of the Draft Background Document, as both a guide for the review committees and public commenters and as a record of the reviewing process, cannot be overstated. As described in Appendix C to the 8th RoC, the DBD is prepared at the RG1 level following a thorough literature survey. RG2 reviews the document, considers public comment on the proposed listings and makes any changes or deletions. The document is then made publicly available and serves as the focus of discussion at the RoC Subcommittee meeting.
Before the agency had backed away from the listing rationale stated in the DBD, Defendants themselves indicated their awareness of the DBD’s vital importance to the review process, stating in their December 17, 1999 summary judgment brief, "The September 30, 1997 Draft Background Document for dioxin outlines and summarizes the scientific findings that support the proposed dioxin listing." Def. S.J. Mem. at 11 (emphasis added). Former Defendant Dr. Lucier stated that the document reflects "what we did in RG1 and RG2," and that to understand the basis for the proposed listing one "would simply have to read the green document", i.e., the DBD. Pl. S.J. Reply Exh. 1 at 53. Dr. Lucier also confirmed his understanding of the DBD’s importance shortly prior to oral argument in this case:
Following completion of RG2’s review, the background documents are considered the document of record and will not be changed in response to any subsequent stakeholder input except to correct errors.
Supp. S.J. Mem. Exh. 1 at "4/6" (emphasis added).
One of the most critical stages in the RoC listing process is review by the RoC Subcommittee. NTP added this new review committee in 1996, the same year the listing criteria were revised, and notice of the expanded review procedure was published in the Federal Register the same day as notice of the revised listing criteria. 61 Fed. Reg. at 50500. The RoC Subcommittee is composed of scientific experts from outside the government who carefully review the proposed listing rationale as stated in the Draft Background Document. The RoC Subcommittee’s multi-day meeting includes oral and written presentations by members of the public, primarily addressed to the validity of the scientific rationale presented in the DBD. Following the RoC Subcommittee meeting, the NTP Executive Committee meets and also votes on the listing proposals. The recommendations of all the preliminary review committees -- informed by discussion of the DBD -- are then forwarded to the NTP Director and, finally, to the DHHS Secretary.
In the case of the dioxin review, however, the agency swept the rug out from under this established procedure by fundamentally altering the very document that formed the basis of the review committees’ recommendations. The agency’s departure from its "Formal Review Steps", which came without any reasoned justification, is contrary to procedures required by law and by past agency practice and is the epitome of arbitrary and capricious conduct.
Because Defendants suddenly changed the listing rationale at the end of the process, neither the public, the Plaintiffs nor the Court can know what data the reviewing scientists actually examined, nor what their recommendations might have been had the agency placed its new rationale before those committees pursuant to formal procedure. As noted previously, mechanism of action data derive from both animal studies and in vitro studies, and the "Mechanisms of Carcinogenicity" section of the DBD (section 7.0) lists both kinds of studies, as does the 1998 Supplement to the DBD. See Def. P.I. Opp. Exh. 1 at, e.g., 7-3; Am. Compl. Exh. 21 at 8-13. Yet, during the course of the dioxin review, the agency never attempted to distinguish the animal studies from what it now claims are "human" studies, nor did it explain that only the latter studies were to be considered in deciding whether there was "sufficient evidence from studies in humans" in the absence of sufficient epidemiologic data.30 Moreover, because the rationale stated in the DBD -- "the document of record" -- was effectively disavowed at the end of the review, there is now no reasoned explanation of the listing decision in the record other than one relying on animal data analysis.31
V. The District Court Erred in Holding that Plaintiffs Tozzi, Empire State Restaurant & Tavern Association, and Greenbaum & Gilhooley’s Lack Standing to Bring this Action.32
The court below erred in holding that Plaintiffs Tozzi, Empire State Restaurant & Tavern Association, and Greenbaum & Gilhooley’s (the "restaurant Plaintiffs") failed to satisfy the "injury in fact" requirement for standing. The district court’s basis for this conclusion was twofold. First, the court held that the restaurant Plaintiffs "are in the same position as any other restaurant, grocery store or food supplier that sells meat or dairy products". Mem. Op. at 6. Second, the district court found that the restaurant Plaintiffs "have not demonstrated that any significant number of people would stop buying and consuming these products as a result of the publication of the 9th RoC." Id. at 6-7. Both of these findings overlook significant record evidence and misconstrue applicable case law.
The 9th RoC poses a direct and adverse threat to the restaurant Plaintiffs’ economic interests. As noted above, the 9th RoC dioxin listing states that more than 90 percent of human exposure to dioxin occurs through consumption of food, primarily meat, dairy products and fish. Supp. R. at III-58B. The 9th RoC statements regarding dioxin’s human carcinogenicity and food-borne exposure are neither speculative nor hypothetical, but expressly implicate the food products the restaurant Plaintiffs sell. The resulting potential harm to the restaurant Plaintiffs’ business is sufficient to satisfy the element of injury in fact. See Mountain States Legal Found. v. Glickman, 92 F.3d 1228, 1234-35 (D.C. Cir. 1996) (increased risk of wildfire from certain logging practices constitutes injury in fact); Village of Elk Grove Village v. Evans, 997 F.2d 328, 329 (7th Cir. 1993) ("even a small probability of injury is sufficient to create a case or controversy") (citing Pennell v. San Jose, 485 U.S. 1 (1988)).
Courts will find standing where a plaintiff submits a detailed affidavit outlining the "personal and individual way" that he is harmed. Animal Legal Defense Fund, Inc. v. Glickman, 154 F.3d 426, 431-33 (D.C. Cir. 1998). The Supreme Court held last year that plaintiffs could demonstrate the threatened injury necessary to support standing where such an affidavit sets forth "reasonable concerns" of harm. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 169 (2000). The detailed affidavits the restaurant Plaintiffs filed in this case clearly demonstrate such reasonable concerns.
The 9th RoC’s statements regarding dioxin vilify the very foods that the restaurant Plaintiffs serve most frequently, i.e., meat, dairy products, and fish. See Am. Compl. at ¶¶ 25-27 (describing foods restaurant Plaintiffs serve); Supp. R. at III-58B. As noted in the supporting affidavits of Messrs Wexler and Leonard, these food products make up a significant percentage of the restaurant Plaintiffs’ revenues. Indeed, the meat, poultry, fish and dairy dishes (particularly desserts) constitute the "centerpieces" of the Plaintiffs’ menus. See Leonard Aff. at ¶ 5; Wexler Aff. at ¶ 5.
In 1999, a food scare driven by media reports of dioxin in various meat and egg products shook western Europe. Plaintiffs detailed these events in filings with the district court, Pl. Opp. Exhs. 5-19, 23, but the district court’s opinion does not reference any of this evidence. The reports Plaintiffs submitted specifically noted the dramatic adverse impact of the dioxin food scare on European restaurants. See Pl. Opp. Exhs. 10, 13, 14, 15, 16, 18.
In the wake of the publicity in the U.S. media over the European dioxin food scare, many of the restaurant Plaintiffs’ customers became sensitized to the issue of dioxin contamination. Leonard Aff. at ¶ 4; Wexler Aff. at ¶ 4. The restaurant Plaintiffs therefore reasonably believe that some of their customers will either avoid the implicated foods or demand that Plaintiffs be able to certify that their meals are "dioxin-free". Leonard Aff. at ¶ 4; Wexler Aff. at ¶ 4. Locating suppliers of "dioxin-free" meat, poultry, fish and/or dairy products would be very difficult, time consuming, expensive, if not impossible. Leonard Aff. at ¶ 4; Wexler Aff. at ¶ 4. Facilities capable of testing for dioxin are not widely available, and even without a run on their services, the costs, delays and logistical problems associated with such testing would be significant. See Leonard Aff. at ¶ 8; Wexler Aff. at ¶ 8.
For purposes of standing, the "informational nature" of the RoC distinguishes this case from cases challenging regulatory action where courts have ruled that only a regulated party would have standing. Here, the restaurant Plaintiffs will continue to suffer direct harm from the unsupported informational statements the agency has made. See Synthetic Organic Chem. Mfrs. Ass'n v. Secretary, DHHS, 720 F. Supp. 1244, 1248 (W.D. La. 1989) (holding loss of sales from adverse publicity caused by RoC listing sufficient to support standing); Dow Chem., USA v. Consumer Product Safety Comm’n, 459 F. Supp. 378, 387 (W.D. La. 1978) ("this administrative action imposes a penalty far more drastic than the fines customarily inflicted for breach of reviewable administrative orders"). The agency, in effect, is slandering the entire food service industry, but particularly fine eating establishments such as the restaurant Plaintiffs’ businesses.
That other persons not parties to this lawsuit might also be harmed by the 9th RoC dioxin listing does not deprive the restaurant Plaintiffs of standing. First, even assuming that other restaurants and food purveyors are similarly impacted by the flight of consumers from the affected products, food service businesses are not the general public. Their economic interest in consumer perceptions of food-borne contaminants is distinct from that of the public at large. Moreover, in Federal Election Comm’n v. Akins, 524 U.S. 11 (1998), the Supreme Court concluded that the plaintiffs’ "informational injury" satisfied Article III standing requirements even though the plaintiff arguably was suing over an injury shared by the general public. Id., 524 U.S. at 23-24 (noting "where a harm is concrete, though widely shared, the Court has found ‘injury in fact.’") (citing Public Citizen v. Department of Justice, 491 U.S. 440, 449-50 (1989)). The plaintiff in Akins, a non-profit public interest group, had sued the FEC for improperly failing to categorize an organization as a "political" and potentially subject to public disclosure requirements. The harm alleged in Akins thus was at least as "generalized" as the harm the restaurant Plaintiffs alleged here.
Even though the restaurant Plaintiffs cited and discussed the Akins case in their opposition to the agency’s motion to dismiss, the district court seems to have overlooked Akins in finding that the restaurant Plaintiffs lacked standing merely because many other restaurants also would be harmed by the dioxin listing. Likewise, the district court completely failed to address the evidence Plaintiffs submitted linking media coverage of dioxin in food to the behavior of consumers in turning away from the effected products. For these reasons, the district court’s holding that the restaurant Plaintiffs lack standing should be reversed. See also National Credit Union Admin. v. First Nat’l Bank & Trust Co., 522 U.S. 479, 488-90 (1998); Bennett v. Spear, 520 U.S. 154, 160-65 (1997); Animal Legal Defense Fund, Inc. v. Glickman, 154 F.3d 426, 431-32 (D.C. Cir. 1998); National Automatic Laundry and Cleaning Council v. Schultz, 443 F.2d 689, 693 (D.C. Cir. 1971) ("even a minuscule pecuniary stake of the litigant may be sufficient").
For the foregoing reasons, the district court’s ruling granting the agency’s motion
for judgment should be vacated and the Court should enter judgment for Appellants.
Dated: April 30, 2001
CERTIFICATE OF COMPLIANCE
I, Charles J. Fromm, counsel for Appellants, hereby certify that according to the word processing software utilized by my firm, the attached brief is 13,752 words in length and therefore complies with the type-volume limitation of Fed. R. App. P. 32(a)(7) and D.C. Cir. Rule 32(a).
Dated: April 30, 2001
1. Appellees are the United States Department of Health and Human Services ("DHHS"); Tommy G. Thompson, Secretary, DHHS; Kenneth Olden, Director of the National Institute of Environmental Health Sciences ("NIEHS") and Director of the National Toxicology Program ("NTP"); and Christopher Portier, Director of the NIEHS Environmental Toxicology Program. Throughout this appeal Appellants will refer to Appellees collectively, unless otherwise specified, as "Defendants", "the agency" or "NTP".
2. Resolution of the final issue on appeal may or may not be necessary. The district court correctly found that Plaintiff Brevet had satisfied the three-prong test for standing, i.e., injury, causation, and redressability (Mem. Op. at 6-8), and the agency has not filed a notice of cross-appeal regarding that decision. Once a court concludes that any one plaintiff has standing, the court need not engage in a separate standing analysis with respect to other plaintiffs. Watt v. Energy Action Educ. Found., 454 U.S. 151, 160 (1981).
3. The district court granted Plaintiffs’ motion for leave to amend the complaint by order dated November 16, 1999.
4. The amendment to section 301 of the Public Health Service Act, now codified at 42 U.S.C. § 241(b)(4), was enacted on November 9, 1978, as part of the "Community Mental Health Centers Extension Act of 1978". Pub. L. No. 95-622, § 262(b)(4), 92 Stat. 3435-36.
5. The agency has never contested the fact that its criteria for RoC listings are rules under the APA, 5 U.S.C. § 551(4). See also Synthetic Organic Chem. Mfrs. Ass'n v. Secretary, DHHS, 720 F. Supp. 1244, 1249 (W.D. La. 1989).
6. Exhibit 1 to the Amended Complaint filed November 1, 1999. The parties are using the deferred appendix method under Fed. R. App. P. 30(c), and citations to the joint appendix will appear in the final briefs. Abbreviations used throughout this brief to refer to exhibits filed in the district court are noted in the Glossary.
7. The underlining was printed as italics in the Federal Register notice.
8. NIEHS and its Director, who is also the NTP Director, have been delegated administrative responsibility for the RoC program by the DHHS Secretary.
9. Although IARC did place dioxin in its highest cancer hazard category (Group 1), IARC’s listing criteria differ from NTP’s in a crucial respect. IARC’s criteria expressly permit listings in the highest category "when evidence in humans is less than sufficient". P.I. App. Exh. 4 at 26 (emphasis added). NTP’s criteria do not.
10. The relevant excerpts of the DBD for dioxin appear at Am. Compl. Exhs. 4, 9. See also Def. P.I. Opp. Exh. 1.
11. Literally, in glass – i.e., experiments conducted in laboratory containers, as opposed to "in vivo", studies conducted in living entities.
12. This initial vote of the RoC Subcommittee was cited by a number of local governments in 1999 in support of regulatory initiatives intended to restrict various activities alleged to contribute to dioxin levels in the environment, including the sale of medical products containing polyvinyl chloride ("PVC") plastic. Am. Compl. Exhs. 5 at ¶ 3 & n. 3, 6 at ¶ 3 & n. 3, and 6A at p.2, ¶ 3 & n. 3.
13. The NTP Executive Committee is composed solely of officials from the federal agencies participating in the NTP program, the same agencies represented in RG2. P.I. App. Exh. 1 at 232 n. 2.
14. Defendant Olden’s recommendation is undated. However, the document notes a hearing in this case "is scheduled for May 4, 2000." R. 32. The district court set the date for that hearing on February 11, 2000. Dkt. Ref. "--" (following Dkt. Ref. 39) (Feb. 11, 2000).
15. There were two opportunities for public comment on the DBD and its rationale before it was reviewed by NTP Director Olden.
16. The criteria for known human carcinogen listings do not require sufficient evidence from studies "concerning humans" or "about humans" or "of humans". The agency substituted the word "of" for the word "in" when "clarifying" the revised criteria in its April 2, 1999 Federal Register notice. 64 Fed. Reg. at 15983 (incorrectly stating, "The ‘known human carcinogen’ category requires sufficient evidence from studies of humans.") (Italics in original, underlining added).
17. The term "in humans" does not exclude the use of data gathered from examining biological samples taken from whole humans who were exposed to the substance while living. Epidemiologic studies can involve taking blood, fluid, or tissue samples from exposed humans, sometimes post mortem. The crucial point is that the evidence must indicate what occurred in living humans who were exposed to the substance, as opposed to, for example, human cells cultured and exposed in a laboratory.
18. A review of various RoCs prior to the 8th (1998), shows that the summaries, or "profiles", of the data supporting a listing in an RoC are consistently organized into separate sections addressing (i) evidence from studies "in animals" and (ii) evidence from studies "in humans". P.I. App. Exh. 3. The "in humans" section always addresses epidemiologic data. Id. After the criteria revisions in 1996, a third and separate category of studies was added in the 8th RoC (P.I. App. Exh. 1). This new category was entitled "Other Information Relating to Carcinogenesis or Possible Mechanisms of Carcinogenesis" and included data on laboratory experiments in vitro with cultured cells and other biological materials.
19. That the mechanistic data relating to dioxin are based largely on animal tissue exposed in vivo and in vitro is clearly stated in DBD section 7.0 and is easily confirmed by the titles of many of the individual study reports cited therein and in the 1998 DBD Supplement. Def. P.I. Opp. Exh. 1 at, e.g., 7-3; Am. Compl. Exh. 21 at 8-13. The one study cited in the final published listing under "Additional Information Relevant to Carcinogenesis or Possible Mechanisms of Carcinogenesis" (DeVito, et al. 1995) also involved experimentally exposed animals. Supp. R. at III-58A; Def. Opp. Supp. App. B.
20. Environmental Health Perspectives is the official "Journal of the National Institute of Environmental Health Sciences". The journal is edited by personnel in NIEHS/NTP with responsibility for administering the Report on Carcinogens Program, including former Defendant George W. Lucier, who was Co-Editor-in-Chief at the time the article was published. P.I. Reply Exh. 5 at 3.
21. Conversely, a clear contemporaneous agency interpretation should be given substantial deference.
22. The district court’s opinion addressed the merits in less than four pages. Mem. Op. at 8-12.
23. The paragraph at issue appears in the first column on p. 50500 of the September 26, 1996 Federal Register notice. 61 Fed. Reg. at 50500.
24. The phrase "regarding carcinogenicity" in the final paragraph appears to refer loosely to data pertinent to either category insofar as such data are relevant to the criteria for that category.
25. The few unambiguous statements in support of the agency’s position were made either by Dr. George Lucier, a Defendant in the case below, or by staff under Dr. Lucier’s supervision. One prominent exhibit containing such statements, R. Ex. 30, is a Lucier affidavit prepared specifically for this litigation. That post hoc explanation, made three years after promulgation of the agency’s revised criteria, is obviously self-serving and does nothing to further the agency’s position.
26. Given the long and very public review process leading up to the 1996 Federal Register notice, it would have been difficult for the agency to announce an important change in the "known" criteria that had never been accepted by the groups reviewing the criteria revisions.
27. That both the April 2, 1999 and April 19, 1999 notice are denominated "clarifications" indicates the agency revealed no intent to make a substantive change, but rather to refer back to the 1996 revised criteria.
28. Under the RoC review process, the decision of the NTP Director is characterized as the "final decision", subject to approval by the Secretary. P.I. App. Exh. 1 at 232.
29. The D.C. Circuit in Ingram Barge did not disagree with the district court’s statement regarding an agency’s general obligation to follow its own voluntarily established procedures. The appellate court concluded, however, based on the administrative record in that case, that "the agency cannot be said to have promised more than it delivered." In addition, other regulations mandated that the agency refrain from complying with the ad hoc procedure that had been promised. 884 F.2d at 1405.
30. The published dioxin listing -- unlike the DBD -- cites only one study in the "Possible Mechanisms of Carcinogenesis" section, see Supp. R. at III-58A, and even this study (De Vito et al. 1995) involved animal data. Def. Opp. Supp. App. B ("Comparisons of Estimated Human Body Burdens of Dioxinlike Chemicals and TCDD Body Burdens in Experimentally Exposed Animals"). Ironically, this study also notes, "Chloracne is the only toxic effect induced by dioxins for which there is unequivocal evidence linking exposure to effect in humans." Id. at 820.
31. The agency has wavered during this litigation regarding its use of animal data to support the dioxin upgrade, at some points stating that such data do not supply the additional basis necessary to augment less than sufficient epidemiologic data, and at some points admitting that animal data may be included as part of the basis for known carcinogen listings. In their opposition to Plaintiffs’ cross-motion for summary judgment, the agency stated, somewhat obliquely, "While reference to animal data need not be stricken from the listing because the human mechanistic data becomes relevant when compared to the animal data, the upgrade is not based on it." Dkt. Ref. 37 at 16 (emphasis added). This statement concedes that the animal data are essential to the listing. Given the absence of any instruction to reviewing scientists that, under the agency’s revised position, the so-called "human mechanistic data" -- but only the "human mechanistic data" -- are pertinent to the upgrade, one is left to wonder what role animal data actually played in the final listing decision. The district court concluded simply that the agency has "chosen to consider . . . animal data relevant." Mem. Op. at 11. The bottom line is that the agency either is relying on animal data to fill the gap or it is not. Appellants’ opinion is that the agency, in fact, is relying on such data. But either way, the final dioxin listing is untenable.
32. As discussed in note 2, supra, the Court need not reach the issue addressed in Section V if, like the district court, the Court concludes that Plaintiff Brevet has standing.