IN THE UNITED STATES DISTRICT COURT
JIM J. TOZZI, et al.
Civil Action No CV:99-1170
MEMORANDUM IN OPPOSITION TO
Plaintiffs hereby oppose Defendants’ Motion to Dismiss and file this Memorandum of points and authorities as the basis for that opposition.
By Order entered August 9, 1999, the Court set briefing on Defendants’ motion to dismiss and Plaintiffs’ forthcoming motion for preliminary injunction. Pursuant to that Order, Defendants’ reply to this opposition is due August 27, 1999, the final brief on Plaintiffs’ motion for preliminary injunction is scheduled to be filed September 29, 1999, and oral argument on the two motions is scheduled for November 12, 1999.
This case concerns two agency actions, one that has already taken place and one that is imminent. What this case does not concern is a review of Defendants’ scientific conclusions regarding the carcinogenicity of 2,3,7,8 tetrachlorodibenzo-p-dioxin ("dioxin"). Defendants have declared their intention to disregard their own formal, published criteria for listing substances in the Report on Carcinogens ("RoC"). The result of that disregard for the agency’s own rules is the likelihood that the RoC will contain a dioxin listing that is both false, highly inflammatory, and greatly harmful to plaintiffs.
Defendants devote a considerable portion of the brief in support of their Motion to Dismiss ("Def. Mem.") to a description of the multi-layer review process that occurs before the RoC is published. Def. Mem. at 2-8. While Plaintiffs generally do not dispute this recitation of statutory authority (see Compl. at ¶¶ 5-11), the subsequent discussion (Def. Mem. at 8-11) gives short shrift to the contentious proposed dioxin listing itself. Indeed, Defendants fail to explain the crux of the debate over the "known human carcinogen" listing criteria and why resolution of this debate is so critical to the appropriate classification of dioxin in the RoC.
Dioxin was listed as a "reasonably anticipated" human carcinogen in the previous (Eighth) edition of the RoC, and there is a near certainty that dioxin will be listed as a "known" human carcinogen in the Ninth Edition if Defendants' new and mistaken application and "clarification" of the listing criteria are allowed to stand. Plaintiffs dispute that Defendants can base a "known" human carcinogen classification on evidence other than evidence from studies in humans which indicates a causal relationship between exposure to the agent, substance or mixture and human cancer. Taking animal and other data into account, as its own distinct classification criteria permit, the International Agency for Cancer Research ("IARC") concluded as much in 1997. Compl. at ¶ 51. Contrary to Defendant's implication (Def. Mem. at 22), Plaintiffs therefore do not contend that mere classification of dioxin as "carcinogenic" will necessarily come as surprising news to the general public. What will come as news, however, are the twin statements from a respected federal agency that (1) dioxin is "known" -- with all the certainty that term implies -- to be a human carcinogen, and (2) that dioxin is "known" to cause cancer in humans through "widespread" contamination of our nation's food supply, particularly from consumption of meat, poultry, fish, and dairy products. This conclusion is both alarmingly newsworthy and severely damaging to Plaintiffs. As discussed further below, and demonstrated by the attached exhibits, public and governmental reaction to recent news of dioxin in the European food supply demonstrates compellingly the legitimacy of Plaintiffs' concerns.
I. The Legal Standard Governing Defendants' Motion to Dismiss Favors Resolution in Favor of Plaintiffs.
In resolving a motion to dismiss, a plaintiff’s factual allegations must be presumed true and liberally construed in favor of the plaintiff. Phillips v. Bureau of Prisons, 591 F.2d 966, 968 (D.C. Cir. 1979) (citing Miree v. DeKalb County, Georgia, 433 U.S. 25, 27 n.2 (1977)). The plaintiff must be given every favorable inference that may be drawn from his allegations of fact. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Dismissal is appropriate only where it appears beyond doubt that no set of facts proffered in support of a plaintiff’s claim would entitle the plaintiff to relief. Haynesworth v. Miller, 820 F.2d 1245, 1254 (D.C. Cir. 1987).
The Supreme Court reiterated in Bennet v. Spear, 520 U.S. 154, 117 S. Ct. 1154 (1997), that a plaintiff’s allegations regarding injury necessary to support standing are to be deemed true for purposes of a motion to dismiss:
[a]t the pleading stage, general factual allegations of injury resulting from defendant’s conduct may suffice, for on a motion to dismiss we "‘presum[e] that general allegations embrace those specific facts that are necessary to support the claim."
Id., 117 S. Ct. at 1164 (1997) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
For purposes of resolving Defendant's motion to dismiss, therefore, all of Plaintiffs' factual allegations, including those set forth in the accompanying affidavits, must be viewed as true. This is particularly so with respect to Plaintiffs' claims regarding the direct and immediate harm their businesses are likely to suffer in terms of lost sales, disruption of supply, increased costs, damage to reputation, and loss of goodwill. These threatened injuries are described in detail in the attached affidavits of Michael J. Leonard, Owner/Vice President of Plaintiff Greenbaum & Gilhooley’s ("Leonard Aff."), and Scott W. Wexler, Executive Director of Plaintiff Empire State Restaurant & Tavern Association ("Wexler Aff.")
II. The Ripeness and Final Agency Action Doctrines Do Not Bar Plaintiffs' Claims.
Defendants first argue that this case should be dismissed on ripeness grounds because Defendants have taken no final agency action. Def. Mem. at 12. In examining the questions of ripeness, the Supreme Court has announced a two-prong test that requires the Court to evaluate "both the fitness of the issues for judicial decision and the hardship to the parties of withholding judicial consideration." Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967). With respect to determining whether final agency action has occurred, the Court should take a "pragmatic" and "flexible" approach. Id. at 149-50.
Such an approach is particularly appropriate where the release of a government report identifying a substance as a "known human carcinogen" is concerned. See, e.g., Flue-Cured Tobacco Co-op Stabilization Corp. v. United States EPA, 857 F. Supp. 1137, 1143 (M.D.N.C. 1994) (employing "a pragmatic approach, as well as a flexible view of finality" and holding that classification of environmental tobacco smoke as "known human carcinogen" was final agency action); Dow Chemical, U.S.A. v. Consumer Product Safety Comm’n, 459 F. Supp. 378, 384 & n.5, 385-87 (W.D. La. 1978) (holding that "interim policy statement" pursuant to which CPSC had made "provisional classification" of perchlorethylene as Category A carcinogen was final agency action).
The Court should consider, inter alia, whether the agency's action has a direct and immediate effect on the day-to-day business of the parties challenging the action. Abbott Labs., supra, 387 U.S. at 152; see also Chemical Waste Management, Inc. v. United States EPA, 869 F.2d 1526, 1533 (D.C. Cir. 1989) ("where the likelihood of future harm is demonstrably high, it is often appropriate for courts to intervene before the future feared event occurs.") (quoting Friends of Keeseville, Inc. v. F.E.R.C., 859 F.2d 230, 234 (D.C. Cir. 1988)); Ciba-Geigy Corp. v. United States EPA, 801 F.2d 430, 436-37 (D.C. Cir. 1986) (noting importance of "practical effect" of agency’s pesticide labeling changes on plaintiff).
In this case, there are two bases upon which the Court should conclude that Defendants have taken final action necessary to permit judicial review, either of which is sufficient to deny Defendants' motion to dismiss. First, Defendants' final interpretation of the RoC listing criteria, as stated in the January 6, 1999 letter from the HHS Office of General Counsel (Compl. Exh. 24), and as published in Defendants' April, 1999 Federal Register "clarifications" (Compl. Exhs. 27, 28), is itself final agency action sufficient to support judicial review. Second, the Court should find, given the conclusiveness of the NTP Executive Committee's dioxin listing recommendation, the nature of the remaining HHS pre-publication review process, the imminence of the RoC's publication, and the absence of any notice to Plaintiffs and further opportunity to intervene, or notice of further agency review, prior to the RoC's publication, that judicial intervention is warranted at this time.
A. Defendants' Legal Interpretation of the RoC Listing Criteria, As Set Forth in the January 6, 1999 Letter from HHS Counsel and in the April,
The first basis for concluding that judicial review is timely arises from Defendant HHS's publication of a binding and final legal opinion and is independent from the imminent publication of the RoC. Thus, even putting aside the question of whether publication of the RoC is sufficiently imminent to warrant judicial intervention, Defendants' issuance of the final interpretation of the RoC listing criteria makes the case reviewable. The fact that the RoC is not yet published is not determinative of whether the case is ripe for adjudication.
Defendants correctly point out that one factor affecting ripeness is "whether the issue presents a purely legal as opposed to fact-bound inquiry." Def. Mem. at 19 (citing Cronin v. Federal Aviation Admin., 73 F. 3d 1126, 1130 (D.C. Cir. 1996)). Contrary to Defendants' implication, however, this case does not rest on the "very fact intensive" science-based inquiry regarding dioxin. Id. Instead, the critical issue is purely a legal one: have Defendants acted arbitrarily and capriciously by disregarding the September 26, 1996 RoC criteria for listing a substance as a "known" human carcinogen? See 61 Fed. Reg. at 50500 (Compl. Exh. 1).
On November 20, 1998, counsel for Plaintiffs wrote to the office of HHS General Counsel requesting that office to issue a legal opinion on the correct interpretation of the RoC listing criteria. Compl. Exh. 22. Specifically, Plaintiffs' counsel stated:
[P]rompt clarification is needed from your office in the form of a legal memorandum stating that non-human evidence, including animal bioassay and mechanism of action data, cannot support a listing of known human carcinogen under the Report on Carcinogen listing criteria.
Compl. Exh. 22 at 6.
HHS counsel responded by letter dated January 6, 1999. Compl. Exh. 24. That letter rejected the documentary evidence of the agency’s contemporaneous interpretation that Plaintiffs' counsel had submitted and asserted that the final paragraph of the 1996 listing criteria, which Plaintiffs maintain had previously applied only to listings of reasonably anticipated human carcinogens, instead applied to listings of known human carcinogens as well. The looser criteria set forth in that final paragraph permit consideration of "all relevant information". See Compl. Exh. 1. The April, 1999 Federal Register notices formally embraced this legal opinion. See 64 Fed. Reg. at 19189, 1st col. (Compl. Exh. 28).
As noted above, if Defendants' mistaken interpretation of the RoC listing criteria is allowed to stand, then the listing of dioxin in the RoC as a "known" human carcinogen is essentially a foregone conclusion. Once mechanistic, animal and other data not "from studies in humans" are considered in determining the "known" category, then dioxin is highly likely fall into the higher classification. The proper RoC listing for dioxin therefore depends largely, if not entirely, on a resolution of the above question of law.
The D.C. Circuit has held that final agency action for purposes of APA review occurs:
 When a published interpretation represents the initial views of an agency, approved by the Commission or person who heads the agency,  when it is the product of the process provided by the agency for taking into account the position of the agency staff as well as the outside presentation, [and]  when the interpretation is not labeled as tentative or otherwise qualified by arrangement for reconsideration[. . . .]
National Automatic Laundry and Cleaning Council v. Schultz, 443 F.2d 689, 702 (D.C. Cir. 1971) (ruling that interpretation of law set forth in letter from Department of Labor Administrator was final agency action); see also Natural Resources Defense Council v. Thomas, 845 F.2d 1088, 1094 (D.C. Cir. 1988) (holding guidance memorandum by EPA subordinate official was final agency action where no further action by EPA Administrator was implicated and no further proceedings were noticed); Ciba-Geigy, supra, 801 F.2d at 436-36 (holding that letter from EPA Director of Pesticide Programs stating EPA’s unequivocal position on request for cancellation hearing constituted final agency action). Here, all three of the above criteria are met.
In Student Loan Marketing Ass’n v. Riley, 104 F. 3d 397 (D.C. Cir. 1997), cert. denied, ___ U.S. ___, 118 S. Ct. 295 (1997), the court held that letters from the Department of Education interpreting a statutory provision satisfied all three of the above tests and were therefore final agency action. As in this case, the plaintiff had previously advised the agency of plaintiff's contrary position, and the agency's communication was a "'marching order' valid for all of the Department." Id. at 405. The court also noted that the letter from the General Counsel reflected the position of the Secretary. Id.
In an apparent attempt to characterize the HHS legal position as "tentative or otherwise qualified," Defendants argue that, because the April, 1999 Federal Register notice "clarifications" effected a change in the listing criteria, the notices merely demonstrate that the criteria are susceptible of being changed, and that HHS's action is therefore not necessarily final. Def. Mem. 18-19. This is doublespeak. Defendants are attempting to invoke the one act that perhaps most clearly justifies this lawsuit as grounds for their assertion that the lawsuit is brought too early. The Court should disregard Defendants' argument. See Better Gov’t Ass’n v. Department of State, 780 F.2d 86, 93 (D.C. Cir. 1986) ("Where, as here, the agency has stated that the action in question governs and will continue to govern its decisions, such action must be viewed as final in our analysis of ripeness.") (emphasis in original).
In a case strikingly similar to this one on its facts, the court in Dow Chem., supra, held that an agency’s interim regulations relating to the classification of perchlorethylene ("perc") as a suspected carcinogen were reviewable even though the agency’s action was merely "an announcement of a rule or policy that the agency has not yet put into effect." Dow Chem., 459 F. Supp. at 386. The court noted that, as here, the "‘interim policy statement’ itself contains no equivocal or tentative language." Id. at 387. In addition to the tangible economic burden the agency’s classification placed on the plaintiffs, the court also stressed that review was timely because of "the continuing damage that the plaintiffs’ reputation will necessarily be subject to as long as adjudication of the validity of the regulation is deferred." Id. ("The Commission . . . proposes to inform the public that the plaintiffs are selling a product which is a carcinogen.")
For purposes of the Ninth RoC listings, the January 6, 1999 letter from HHS Counsel and the April 1999 Federal Register notices represent not the latest tentative characterization of the listing criteria but the final word. Neither the letter from HHS counsel nor the Federal Register notices were "labeled as tentative", nor was there any suggestion of future reevaluation or further clarification of the criteria. The April notices represent the first such clarification of the listing criteria since they were formally adopted on September 26, 1996. Counsel for Plaintiffs had placed the issue that the notices addressed -- i.e., the types of evidence that may be considered to support a "known" human carcinogen RoC listing -- squarely before agency counsel in letters dated November 20, 1998 and January 19, 1999 (Compl. Exhs. 22, 25). Those letters expressly requested a legal opinion from agency counsel providing a final NTP interpretation of the listing criteria. Because the April 1999 notices appear to fully resolve the legal issue regarding NTP interpretation, there are unlikely to be further "clarifications" of the criteria, certainly not prior to publication of the Ninth RoC. The criteria are therefore as "final" as they can be at this time.
The Supreme Court’s rationale in finding final agency action in Bennet v. Spear, supra, is instructive. Like the Fish and Wildlife Service’s issuance of the biological opinion in Bennet, the actions of the Defendants are only "virtually determinative" of the ultimate outcome -- the final RoC listings themselves. See 117 S. Ct. at 1165. As in Bennet, however, "final agency action" has occurred. The January 6, 1999 letter from HHS counsel and the subsequent April 1999 Federal Register "clarification" of the RoC listing criteria are not an action "of a merely tentative or interlocutory nature". 117 S. Ct. at 1168. Instead, the "clarification", which baldly states that the final paragraph of the September 26, 1996 listing criteria will (henceforth) apply to the listings of "known" as well as "reasonably anticipated" human carcinogens, represents a final, non-appealable agency determination on how the RoC listings are to be made.
B. Publication of the RoC is Imminent.
The imminence of the RoC's publication, coupled with the inability of Plaintiffs to obtain further notice of the report’s pending release and to seek review on the merits at a later date, also argue forcefully against dismissal of this case on ripeness grounds. Defendants admit that the RoC could be released as early as November, 1999. Def. Mem. at 10 n. 3. See also National Toxicology Program, Current Directions and Evolving Strategies at 16 (1999) (Ninth RoC "is scheduled for publication in late 1999") (attached as Exhibit 2).
Plaintiffs have no way to be certain when the fifth stage in the RoC review process -- the review by NTP Director Defendant Olden -- will be completed. According to a recent trade press article, however, Defendant Lucier projects that the Ninth RoC will be on the Secretary's desk for final approval by September 1, 1999. See Exh. 3. Plaintiffs likewise have no way to know when Defendant Shalala will complete her review and approve the Ninth RoC for publication. The next formal notice that Plaintiffs will receive regarding the Ninth RoC’s release is that publication has occurred. By then, it will be too late.
C. All Meaningful Review Has Already Occurred.
Defendants predictably emphasize that the final two stages in the RoC review process have yet to be formally concluded. Def. Mem. at 16-17. An agency's own characterization of finality is not necessarily decisive, however, in determining when "final agency action" has occurred for purposes of appellate review of the agency action. Carter/Mondale Presidential Campaign v. Federal Election Comm'n, 711 F.2d 279, 289 & n. 17 (D.C. Cir. 1983) (citing Fidelity Television, Inc. v. FCC, 502 F.2d 443, 448 (D.C. Cir. 1974)). Whether final agency action has occurred for purposes of APA review should not depend on semantic characterization but rather on a "realistic assessment of the nature and effect" of the agency action. Fidelity Television, 502 F.2d at 448.
Defendants assert that review of the dioxin listing by the NTP Director, Defendant Olden, is still underway, and they have filed an affidavit to this effect. Plaintiffs contest Defendant Lucier’s characterization of the February 24, 1999 NTP Executive Committee meeting and continue to maintain that Director Olden did vote in favor of the dioxin upgrade, effectively expressing his final decision. This secondary dispute aside, however, Defendant Olden has gone on record as favoring an upgraded listing of dioxin as a known human carcinogen. In explaining his basis for directing the re-review of dioxin, Dr. Olden told reporters that he had no argument with the recommendation to upgrade dioxin from ‘reasonably anticipated’ to ‘known human carcinogen’ but wanted to make sure the review crossed every "t" and dotted every "i". See Exh. 4. The RoC states that the NTP Director "makes the final decision regarding the proposed listing and/or delisting" (8th RoC, App. C, p. 232), and he has approved the dioxin upgrade.
Approval of the dioxin upgrade by Defendant Shalala is also virtually inevitable, assuming the NTP’s listing criteria interpretation is followed. Although no formal record is maintained or made public regarding the HHS Secretary’s evaluation of the proposed RoC listings, Plaintiffs understand and allege on the basis of informal conversations with government officials that, in practice, the HHS Secretary virtually always adopts the NTP Director’s recommendation. This is particularly likely in the case of the politically charged dioxin upgrade. The bottom line is that the dioxin upgrade is now sufficiently likely so as to be "threatened" for purposes of the Court’s jurisdictional analysis.
D. The Cases Defendants Cite Do Not Support Dismissal Here.
The case at hand is distinguishable from the decisions Defendants cite where courts concluded that the agency action was not final, and/or the case was not ripe for review under Abbott Labs., supra. Defendants mistakenly claim that "this case is controlled by" the recent D.C. Circuit decision in Pfizer, Inc. v. Shalala, WL 498553 (D.C. Cir. July 16, 1999), a case that concerned potential lost profits arising out of the Food and Drug Administration’s acceptance of the plaintiff's competitor's drug product for preliminary review. See Def. Mem. at 14-15, 20. The Pfizer court took pains to point out, however, that the plaintiff there could later avail itself of a sufficient judicial remedy if FDA eventually approved the competitor's drug, noting, "This case might nonetheless be ripe if the FDA's acceptance of [the competitor's abbreviated new drug application] somehow foreclosed Pfizer's right ever to get meaningful judicial review. . . ." Pfizer, slip op. at 4. Such later judicial review is not available here. Defendants imply that the only action that will satisfy the jurisdictional prerequisite is publication of the RoC. Def. Mem. at 16. When publication occurs, the damage to Plaintiffs will be done, and meaningful judicial review will be foreclosed.
Similarly, in Action on Smoking and Health v. Department of Labor, 28 F.3d 162 (D.C. Cir. 1994), the petitioner made no claim that OSHA’s delay in issuing health and safety standards for environmental tobacco smoke jeopardized the court’s future power of review. 28 F.3d at 165. The case concerned the claim that OSHA’s proposed rulemaking would violate the regulatory timetable of the agency’s own cancer policy, and the court found that the claim of future delay was not ripe for review. Id. at 163. No comparable claim or facts are present here.
In State of Cal. v. Department of Justice, 114 F.3d 1222 (D.C. Cir. 1997), the Attorney General "had not yet made a final decision" regarding the amount of money that would be paid to California for incarcerating undocumented criminal aliens under the Justice Department's new grant procedure. 114 F. 3d at 1225. California was not challenging the new regulation, however, only the amount under the grant procedure that it would be paid. By contrast, HHS certainly has made a final decision on its interpretation of the disputed RoC listing criteria, and the ultimate outcome for the dioxin listing is thereby fixed.
In a passage shortly following the statement Defendants quote (Def. Mem. at 13), the Supreme Court in Texas v. United States, 523 U.S. 296 (1998), explained that in that case the Court had "no idea whether or when such [a sanction] will be ordered". 523 U.S. at 300. Here, by contrast, both the outcome of the dioxin listing decision and the timing of the RoC publication are much more certain.
In Ohio Forestry Ass’n, Inc. v. Sierra Club, 523 U.S. 726, 228 S. Ct. 1665, 1670 (1998), the Forest Service had developed a plan which, although it made logging more likely, did not itself authorize the cutting of trees. Before tree-cutting permits would be issued, several additional administrative procedures had to be completed, including proposing a particular site and specific harvesting method, preparing of an environmental analysis and -- significantly -- providing affected parties with an opportunity to be heard. Here, by contrast, there will be no additional opportunity for the affected parties to challenge a subsequent, more "specific" plan.
E. The Threat of Injury to Plaintiffs Outweighs Any Jurisprudential
Finally, the court should exercise its discretion to hear the merits of this case now, rather that waiting until Defendants' definition of "finality" is satisfied, because the harm to the Plaintiffs if the RoC were published prior to the Court's review strongly outweighs any harm Defendants would suffer from immediate adjudication. The D.C. Circuit recognizes that district courts enjoy this discretion with respect to issues of ripeness. See Consolidation Coal Co. v. Federal Mine Safety and Health Review Comm'n, 824 F.2d 1071 (D.C. Cir. 1987) (holding agency decision ripe for review without requiring mining company to "demonstrate additional quantum of injury caused by deferring review" ). Defendants cannot claim that judicial review of their listing criteria interpretation will cause them any significant burden. Even allowing some months for complete adjudication of the issue, issuance of the Ninth RoC will not be delayed beyond its 2000 scheduled release. As demonstrated below, on the other hand, the threat to Plaintiffs from the RoC’s publication -- as proposed -- is direct, immediate, and concrete. Judicial review at this time is therefore warranted.
III. Plaintiffs Have Standing Necessary for the Court's Jurisdiction.
Defendants next argue that this case should be dismissed because Plaintiffs have not demonstrated a sufficient likelihood of harm and therefore lack standing. Defendants do not allege -- nor can they -- that Plaintiffs are required to demonstrate such harm with absolute certainty, merely that there is "a very significant possibility of future harm." Def. Mem. at 21 (quoting San Diego Gun Rights Comm. v. Reno, 98 F.3d 1121, 1126 (9th Cir. 1996)) (emphasis added). Defendants further do not allege that the declaratory and injunctive relief Plaintiffs seek will fail the redressability prong of the three-part standing test under Lujan v. Defenders of Wildlife. The thrust of Defendants' standing argument, therefore, is that the threatened harm to Plaintiffs is "completely speculative". Def. Mem. at 22.
As discussed below, Defendants’ standing argument fails for two reasons. First, Plaintiffs meet the three-prong test for standing under Article III. Second, Plaintiffs fall within the applicable zone of interest of the Public Health Service Act, 42 U.S.C. § 241.
A. Plaintiffs Meet the Minimal Constitutional Requirements for Standing.
Plaintiffs must satisfy three well established criteria for Article III standing: (1) injury-in-fact, (2) a "fairly traceable" causal connection, and (3) redressability. Lujan v. Defenders of Wildlife, supra, 504 U.S. at 560-61; see also Omnipoint Corp. v. FCC, 78 F.3d 620, 628 (D.C. Cir. 1996). As noted above, the redressability prong is not seriously questioned here because the Court has clear authority to correct Defendant’s wrongful action by enjoining publication of the RoC and granting the declaratory relief Plaintiffs seek. Defendants therefore appear to be challenging Plaintiffs’ standing on one or both of the first two prongs. Neither challenge should prevail.
1. The Threatened Harm to Plaintiffs Is
The imminent publication of the RoC threatens a direct and adverse impact on Plaintiffs' economic interests. The proposed RoC statements regarding dioxin's human carcinogenicity and food-borne exposure are neither speculative nor hypothetical, and these statements expressly implicate the food products Plaintiffs sell. This potential harm 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)).
Defendants assert incorrectly that Plaintiffs have not "provided the Court with any indication of which foods they serve that contain dioxin or how much." Def. Mem. at 23. To the contrary, Plaintiffs’ Complaint and the attached excerpts from the Draft Background Document indicate clearly that the proposed RoC will vilify the very foods that Plaintiffs serve most frequently, i.e., "meat including poultry, dairy products, and fish." See Compl. at ¶¶ 25-27 (describing foods Plaintiffs serve); Compl. ¶¶ 38-39 & Exh. 4 (listing dioxin exposures targeted in proposed RoC). As noted in the attached supporting Affidavits of Messrs. Wexler and Leonard, these food products make up a significant percentage of Plaintiff’s 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 the wake of the publicity in the U.S. media and elsewhere over the recent European dioxin scare, many of Plaintiffs’ customers have been sensitized to the issue of dioxin contamination. Leonard Aff. at ¶ 4; Wexler Aff. at ¶ 4. Particularly in light of recent events, if the RoC were published with the dioxin listing written as publicly proposed, many of Plaintiffs’ customers would 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, and expensive. Plaintiffs first would have to try to obtain information on whether their supplies are contaminated with dioxin, and/or at what levels. This means that either Plaintiffs or their suppliers would have to locate appropriate testing facilities, supply samples, pay the costs, and wait for results. Leonard Aff. at ¶ 4; Wexler Aff. at ¶ 4. Facilities capable of testing for dioxin are not widely available, however, and even without a run on their services, the cost and delays associated with such testing would be significant. See Leonard Aff. at ¶ 8; Wexler Aff. at ¶ 8. The logistical problems in arranging for such testing are considerable, including preparing samples for testing, packaging the samples in special sealed containers, and arranging for express shipment. Leonard Aff. at ¶ 8. In the event increased demand were placed on the testing facilities, the both the cost and time required for the necessary testing would increase. Leonard Aff. at ¶ 8; Wexler Aff. at ¶ 8. Given the volume of continuous testing required (see Leonard Aff. at ¶ 9), the cost of such an ongoing testing program would be considerable.
If -- as is likely -- Plaintiffs could not immediately obtain meat, poultry, fish and dairy supplies that were certified "dioxin-free", then they would either be unable to serve meals containing these products, or they would be pressed to search for alternative products that could be certified as "dioxin-free". See Leonard Aff. at ¶ 4; Wexler Aff. at 4. Such products are not widely available, however, and would significantly increase Plaintiffs’ costs. Id. If Plaintiffs were unable to serve meals containing their usual meat, fish, and dairy products, or satisfactory alternatives, their businesses would suffer in terms of economic losses and unquantifiable damage to reputation and customer goodwill. Id.
The "informational nature" of the RoC distinguishes it from regulatory action cases where courts have ruled that only the regulated party would have standing. The case of Synthetic Organic Chem. Mfrs. Ass'n v. Secretary, DHHS, 720 F. Supp. 1244 (W.D. La. 1989) ("SOCMA"), established, in the context of the RoC’s publication, that such an informational action can be considered agency action if it will have a practical effect on the plaintiffs. Here, Plaintiffs will suffer direct harm not from an agency regulation, but from the unsupported informational statements the agency makes. See also Dow Chem., supra, 459 F. Supp. at 387 ("this administrative action imposes a penalty far more drastic than the fines customarily inflicted for breach of reviewable administrative orders). Defendants are poised, in effect, to slander the entire food service industry, particularly fine eating establishments such as the Plaintiffs’ restaurants. See id. This case is therefore distinct from cases holding that a particular non-regulated entity, i.e., a party not sufficiently affected by an the agency's regulatory action, does not have standing to bring a court challenge.
That other persons not parties to this lawsuit might also be harmed by the RoC does not deprive the Plaintiffs of standing. First, even assuming that other restaurants and food purveyors were affected 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 Akins v. Federal Election Comm’n, 524 U.S. 11, 118 S. Ct. 1777 (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. 118 S. Ct. at 1786. The plaintiff in that case, a non-profit public interest organization, had sued the FEC for improperly failing to categorize an organization as a "political" organization that could potentially be subjected to public disclosure requirements.
2. The Threatened Harm to Plaintiffs is Linked
To support standing, an injury must also be "fairly traceable" to the defendant’s conduct. Lujan v. Defenders of Wildlife, supra, 504 U.S. at 560. The "fairly traceable" requirement, however, is not equivalent to the tort requirement of causation. National Resources Defense Council v. Watkins, 954 F.2d 974, 980 n.7 (4th Cir. 1992). In order to demonstrate that they are more than "concerned bystanders", plaintiffs need only show that there is a "substantial likelihood" that defendant’s conduct caused, or is likely to cause, plaintiff’s harm. See Public Interest Research Group of N.J., Inc. v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 72 (3d Cir. 1990) (citing Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 75 n. 20 (1978)), cert. denied, Powell Duffryn Terminals, Inc. v. Public Interest Research Group of N.J., Inc., 498 U.S. 1109 (1991). The threat of "imminent injury" is sufficient to confer standing. Lujan Defenders of Wildlife, supra, 504 U.S. at 566-67 (emphasis added).
Since the filing of this lawsuit, real world events have demonstrated compellingly how consumers react to news of dioxin contamination in food supplies and a federal government’s final pronouncement that dioxin is a "known" human carcinogen. In the spring of 1999, television news from Belgium reported that Belgian-produced meats were contaminated with dioxin. The news caused widespread public alarm, the scare soon spread to other meats and dairy products, and consumers and government agencies reacted dramatically. A sampling of the enormous media attention devoted to the story is attached as Exhibits 5-19, 23. Domestic meats and dairy products were banned and removed from stores and menus. Consumers shunned the implicated products. The European Union, and other countries, including the United States (through the U.S. Department of Agriculture and FDA) banned imports from Europe until they could be subjected to extensive and rigorous testing and demonstrated to be safe. See Exhs. 20, 21, 23, 24. News reports specifically noted the drastic impacts on restaurants, both inside and outside Belgium. See Exhs. 10, 13, 14, 15, 16, 18. As one news report put it, the "restaurant menus are as misleading as they used to be in the Soviet Union, where ‘there isn’t any’ seemed to be the national dish." See Exh. 13. Environmental groups in the United States are particularly likely to seize on a new RoC listing of dioxin as government endorsement of their concerns and set off or exacerbate public alarms. See, e.g., Exh. 25, 26.
Defendants’ motion to dismiss argues that dioxin is already uniformly recognized as unsafe. See Def. Mem. at 22-23. This is not so. While dioxin has been reported as a risk in occupational chemical plant exposure situations, it has not been recognized as a hazard for the general population, particularly in common foods. See Exh. 1. Activist groups are eagerly awaiting some kind of government pronouncement of general population hazard, particularly in view of the 1995 rejection by EPA’s Science Advisory Board of that agency’s proposed finding that dioxin presented such a generalized risk. See Exh. 27. As alleged in the Complaint, the Defendant agency itself attempts to disseminate the RoCs as widely as possible and to publicize their release. See Compl. at ¶ 7.
B. Plaintiffs Are Within The Zone of Interest Required for APA Standing.
A plaintiff challenging an agency action pursuant to the APA must demonstrate that the injury suffered falls within the zone of interest the statute was designed to protect. Lujan v. National Wildlife Federation, 497 U.S. 871, 883 (1990) (denying standing to challenge classification of federal lands for resource development where plaintiffs asserted only that they used the lands "in the vicinity" of the lands to be developed). As this Court has stated:
The [APA] grants a right of judicial review to persons "adversely affected or aggrieved by agency action within the meaning of a relevant statute." 5 U.S.C. § 702 (1989). To have standing to obtain review of an agency action, plaintiff must allege injury in fact caused by arbitrary and capricious administrative action to an interest within the "zone of interests" protected by statute, executive order or regulation.
H & F Enters., Ltd. v. United States, 973 F. Supp. 170, 174 (D.D.C. 1996) (Sullivan, J.) (citing Clarke v. Securities Indus. Ass’n, 479 U.S. 388, 394-96 (1987)).
The Plaintiff restauranteurs in this case fall within the APA’s "generous review provisions", Association of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150, 156 (1970), because their businesses lie within the zone of interests of the statute pursuant to which the RoC is issued, the Public Health Service Act, 42 U.S.C. § 241. One of the purposes of that statute is to make the public aware of the presence of confirmed or potential carcinogens in their surroundings, including in the foods they consume. The House Report accompanying passage of the Public Health Service Act provides, in part:
The committee believes that a considerable amount of cancer can be prevented or at least detected early if more people become aware of the presence of carcinogens in their surrounding environment, in the workplace, in the foods they eat, in the water they drink and to which they may be inadvertently exposing themselves through their personal habits.
H.R. Rep. No. 95-1192, 95th Cong., 2d Sess., at 22 (1978) (Def. Mem. Exh. 1 at 22) (emphasis added). In light of Congress’s express contemplation of foods as a potential source of exposure to carcinogens, and the RoC’s aim of reducing such exposures, it is difficult to imagine how the Plaintiff restauranteurs could be said to lie outside the Public Health Service Act’s zone of interest.
The zone of interest test assesses "whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." Data Processing Serv. Orgs., supra, 397 U.S. at 153 (emphasis added); see also Bennet v. Spear, supra, 117 S. Ct. at 1161 (holding that economic interest of ranchers and irrigation districts placed them within the zone of interest of Endangered Species Act); Animal Legal Defense Fund v. Glickman, supra, 154 F.3d at 444 (holding plaintiff’s allegations of aesthetic interest placed him within zone of interests of Animal Welfare Act); Reyblatt v. United States Nuclear Reg. Comm’n, 105 F.3d 715, 721-22 (D.C. Cir. 1997) (holding nuclear expert and citizens group within zone of interest as "intended beneficiaries" of statute enacted "to protect the health and safety of the public"); American Bankers Ins. Group, Inc. v. Board of Governors of the Fed. Reserve Sys., 3 F. Supp. 2d 37, 42 (D.D.C. 1998) (holding plaintiffs within zone of interests of Truth in Lending Act where "plaintiffs share[d] a congruence of interests with the ultimate beneficiaries of the TILA’s disclosure provisions") (Sullivan, J.).
The zone of interests of an applicable statute, such as the Public Health Service Act, should be interpreted broadly for purposes of satisfying APA judicial review requirements. See Data Processing, supra, 397 U.S. at 154 ("When statutes are concerned, the trend is toward enlargement of the class of people who may protest administrative action."). In order for a plaintiff to be an "aggrieved person" within the meaning of APA section 702, the plaintiff must show actual or threatened harm as a result of the agency action. See Prince Georges’ County v. Holloway, 404 F. Supp. 1181, 1184 (D.D.C. 1975). A plaintiff need only show an "identifiable trifle" of injury, however. Public Citizen v. Lockheed Aircraft Corp., 565 F.2d 708, 714 (D.C. Cir. 1977) (citing United States v. Students Challenging Regulatory Action Procedure, 412 U.S. 669, 689 n. 14 (1973)).
The D.C. Circuit has stated the following with respect to the zone of interests test:
[T]he zone of interests test requires some indicia -- however slight -- that the litigant before the court was intended to be protected, benefitted or regulated by the statute under which the suit was brought. Courts should give broad compass to a statute’s zone of interests in recognition that this test was originally intended to expand the number of litigants able to assert their rights in court.
Autolog Corp. v. Regan, 731 F.2d 25, 29-30 (D.C. Cir. 1984) (emphasis in original) (citations and internal quotations marks omitted). Here, as in Dow Chemical, supra, 459 F. Supp. at 378, Defendants are poised to announce to the public that Plaintiffs are purveyors of products containing, in this case, a "known", human carcinogen. This threat to Plaintiffs’ economic interests surely places them within the zone of interest necessary for APA standing.
In Bennet v. Spear, supra, the Supreme Court found that the plaintiffs, who were not objects of the Endangered Species Act regulation at issue, nevertheless had standing under the APA to challenge the statute’s implementation. 117 S. Ct. at 1167. In doing so, the Court rejected prior precedent suggesting that only those individuals and organizations seeking to advance environmental protection are within an environmental laws’ zone of interest, and instead held that plaintiffs threatened with adverse economic effects were within the zone. Id. See also National Credit Union Admin. v. First Nat’l Bank & Trust Co., 522 U.S. 479, 118 S. Ct. 927, 934 (1998) ("[T]here need be no indication of congressional purpose to benefit the would-be plaintiff.")
Thus, even under a narrower interpretation of "zone of interest" test than the Supreme Court has adopted in Bennet v. Spear and National Credit Union, Plaintiffs in this case would fall within of the zone of interest of the Public Health Service Act because they are purveyors of food to the public and because Congress expressly intended that the RoC influence the foods the public consumes. See Animal Legal Defense Fund, supra,154 F.3d at 444-45; National Automatic Laundry and Cleaning Council, supra, 443 F.2d at 693 ("even a minuscule pecuniary stake of the litigant may be sufficient if it provides a suitable and effective vehicle for vindication of larger values.").
C. The Cases Defendants Cite Do Not Support Dismissal.
None of the several authorities Defendants cite (see Def. Mem. at 21-25), supports dismissal of this case. In the recent case of Alaska Legislative Council v. Babbit, WL 485138 (D.C. Cir. July 13, 1999), for example (Def. Mem. at 23), the court ruled that the plaintiffs, who had never fished -- or even indicated an intent ever to fish -- in the waters affected by the agency action, lacked standing under the APA. In that case, however, the court understandably found that the plaintiffs had failed to allege that their interests were "adversely affected" by the agency action, or that they were threatened with "actual or imminent injury" as the APA requires. Id., slip op. at 7. The interests of Plaintiffs here clearly are "adversely affected."
Likewise, in Steel Co v. Citizens for a Better Env’t, 523 U.S. 83 (1998), the Court held that plaintiffs lacked standing because none of the relief sought would likely remedy the respondents' alleged injury. Such is clearly not the case here.
Plaintiffs in this case are unlike the plaintiffs in several of the cases Defendants cite, who could not distinguish their interests from those of the general public. Federation for Am. Immigration Reform, Inc. v. Reno, 93 F.3d 897 901-02 (D.C. Cir. 1996), cert. den., 521 U.S. 1119 (1997) stands for the unremarkable proposition that legal residents do not have standing under the Immigration and Naturalization Act to challenge the government’s immigration policy of allowing a certain number of Cuban immigrants to enter the United States each year. The court in that case concluded that "[t]he injury (if any) to a citizen qua citizen from admission of an alien is an injury common to the entire population and for that reason seems particularly well-suited for redress in the political rather than the judicial sphere." 93 F.3d at 901. Plaintiffs in this case, by contrast, are not alleging simply the injury of "citizen qua citizen", but rather that of business owners whose economic interests will be particularly and directly impacted by the agency’s proposed action. Defendants’ citation to a citizen/taxpayer standing suit is similarly inapposite. See Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 220 (1974). Finally, in the same vein, Plaintiffs here are not simply "[c]itizens at large" asserting "a justiciable interest ‘in having the Executive Branch act in a lawful manner.’" Def. Mem. at 25 (quoting Common Cause v. Federal Election Comm’n, 108 F. 3d 413, 419 (D.C. Cir. 1997)). As described above, their interests in release of the RoC are far more individualized and particularly implicated.
IV. Issuance of the ROC Is "Agency Action" Subject to Judicial Review.
There is a strong presumption in favor of judicial review of agency action under the APA. Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670 (1986). This presumption may be overcome only upon a showing of clear and convincing evidence of a contrary legislative intent. Traynor v. Turnage, 485 U.S. 535, 542 (1988) (quoting Abbott Labs., supra, 387 U.S. at 141). While Defendants argue that the publication of the RoC is exempt from this presumption (Def. Mem. at 25), they offer no relevant case authority or evidence of clear legislative intent to support this assertion.
Defendants appear to concede, as they must, that the only court specifically to decide whether issuance of the RoC is judicially reviewable "agency action" ruled that it is. See Def. Mem. at 26-27 n.6. As the court in SOCMA explained, "the Supreme Court has recognized that the term ‘agency action’ is to be interpreted expansively, as it brings together previously defined terms . . . to assure the complete coverage of every form of agency power." 720 F. Supp. at 1249 (citations and internal quotations omitted). The SOCMA court concluded, "The [HHS] Secretary's adoption of the Classification Procedures and Criteria fits well within the rubric of reviewable 'agency action.'" 720 F. Supp. at 1249. Specifically, the SOCMA court found:
Here, the [RoC listing] Criteria are "designed to implement" the statutory requirement that the Secretary classify substances as known or reasonably anticipated to be carcinogens and limit the Secretary's discretion in making future classification decisions. The Criteria thus constitute a "rule" as defined in [5 U.S.C.] § 551(4), subject to judicial review pursuant to § 702.
Id. The SOCMA court also held that issuance of the RoC "is agency action even though it is informational and imposes no sanctions or obligations." Id. (quoting Dow Chem., supra, 459 F. Supp. at 386).
Notwithstanding this specific contrary authority, Defendants assert that because Congress "characterized" the RoC as an "informational document", and did not "mandate" that the RoC have regulatory effect, its issuance is nonreviewable. Def. Mem. at 26. As Defendants point out, however, Congress did foresee a nexus between issuance of the RoC and regulatory activity. Id.; see also SOCMA, supra, 720 F. Supp. at 1249; Dow Chem., supra, 459 F. Supp. at 386 ("‘moral suasion’ is a considerably potent force in our society"). In addition, as the SOCMA court explained, the listing of a substance in the RoC does have a "substantial regulatory impact", including the application of OSHA labeling requirements and various state regulations. SOCMA, 720 F. Supp. at 1248. The RoC therefore is "a decisional pronouncement affecting legal rights and obligations" and is reviewable. See Bennet v. Spear, supra, (holding Interior Department report reviewable under APA); Troy Corp. v. Browner, 120 F.3d 277 (D.C. Cir. 1997) (enjoining listing of two substances in EPA’s Toxics Release Inventory because agency failed to follow its guidelines).
Defendants' recitation of decisions concerning other actions, taken by other federal agencies, in connection with other published reports, is unpersuasive. As the D.C. Circuit has acknowledged, decisions regarding reviewability of agency actions are particularly fact-specific and dependent on the agency action at issue. See Industrial Safety Equip. Ass'n, Inc. v. EPA, 837 F. 2d 1115, 1117 (D.C. Cir. 1988) (noting that statutory categories of agency action "are imprecise" and determinations of reviewable agency action are made on a "case-by-case basis").
Defendants place great emphasis on American Portland Cement Alliance v. EPA, 101 F.3d 772 (D.C. Cir. 1996) (Def. Mem. at 25-28 & n.6). In Portland Cement, however, the court did not interpret what was an agency action under the APA. The scope of the courts review was limited by a specific statutory provision that expressly narrowed the actions the court could review. The court held that EPA's administrative "determination" regarding hazardous waste regulation of kiln dust was not reviewable because the applicable statute (Resource Conservation and Recovery Act § 7006(a)(1)) "by its plain terms" provided for judicial review of only three types of EPA actions -- (1) promulgation of final regulations, (2) promulgation of requirements, and (3) denial of petition for promulgation, amendment, or repeal or regulations -- none of which included the kiln dust determination at issue. Here, there is no comparable statutory provision circumscribing the Court's APA review authority. The APA allows judicial review of "agency action", which is a broader term than regulations ("rules") or requirements.
Industrial Safety, supra, is wholly distinct from the case at hand. That case addressed contentions that the agency failed to follow the APA notice-and-comment procedures required for "substantive" or "legislative" rules under § 553. See 837 F.2d at 1116, 1119, 1121 & n.11. Plaintiffs in that case did not challenge the agency’s action as "arbitrary and capricious" under APA § 706, or, as stated in the opinion, they did not allege that an agency interpretation of its rules or a dissemination of damaging information was "false". 837 F.2d at 1122. Plaintiffs in the case at hand are not challenging agency actions on the basis of failure to follow notice-and-comment procedures. Instead, they are challenging agency actions on the basis that such actions are arbitrary and capricious, or "false".
Finally, of course, not all "agency action" need be published in the Code of Federal Regulations. See, e.g., Jackson v. Lynn, 506 F.2d 233 (D.C. Cir. 1974) (federal agencies’ insuring of houses not meeting local codes was "agency action"). Thus, Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533 (D.C. Cir. 1986) and other cases addressing the effect of publication in the Code of Federal Regulations are not controlling.
None of Defendants’ arguments supports dismissal of this action. In light of their final legal interpretation of the RoC listing criteria and the imminent release of the report Defendants’ ripeness and finality arguments must fail. Plaintiffs have standing to bring this lawsuit because their concrete interests -- both economic and reputational -- are directly threatened by the RoC’s imminent publication and Plaintiffs are within the zone of interest
of the RoC legislation. Finally, the most relevant case precedent, as well as the legislative intent behind the RoC, support the conclusion that the RoC is judicially reviewable.
Defendants’ motion to dismiss should therefore be denied.
Attorneys for Plaintiffs