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Court upholds USDA's actions on GIPSA rule withdrawal

Court upholds USDA's actions on GIPSA rule withdrawal

OCM loses challenge to require USDA to return to drawing board on rewriting rules to level competition in markets.

A federal district court denied a petition for review filed by the Organization for Competitive Markets (OCM) and three of its members petition for review of the 2017 U.S. Department of Agriculture orders withdrawing an interim final rule and two proposed regulations promulgated under the Packers & Stockyards Act.

The 2008 farm bill required USDA to write the “GIPSA” rules to help level the playing field for poultry and livestock farmers and attempt to ensure fairness under the Packers & Stockyards Act. However, over the years, GIPSA riders in appropriations bills prevented the agency from moving forward on the rule until the final months of the Obama Administration.

Last fall, Agriculture Secretary Sonny Perdue rescinded the Farmer Fair Practices Rules. The OCM lawsuit focused on the fact that by rescinding the rule, the agency was not following the intent of Congress when it called for the regulations to be written by 2010.

However, the judge felt differently. “In December 2016, the outgoing USDA administrators left their successors a time bomb -- published proposed agency actions promulgating USDA’s long-standing interpretation of the [Packers & Stockyards Act] that would increase its regulatory authority, an interpretation that had been consistently rejected by numerous courts of appeals for over 75 years, without congressional intervention. Not surprisingly, USDA’s incoming secretary, acting on a promise to reduce regulation, took action to postpone and then cancel these proposals,” the judge wrote in his opinion.

“USDA explained that it was withdrawing the interim final rule and taking no further action on the proposed regulations because the proposed regulatory change of course would generate protracted litigation, adopt vague and ambiguous terms and might prevent innovation and foster vertical integration that would hinder new market entrants,” the opinion added.

The judge explained that this is not a case where an agency has failed to take action in the face of multiple unambiguous commands. “USDA postponed the interim final rule, solicited additional public comment and then took the alternative final action urged in a substantial majority of the comments, giving rational reasons for its decision to withdraw a proposed regulatory change and to adhere to its long-standing practice,” the opinion stated.

A statement from OCM spokesman Angela Huffman said, “We took the USDA to court to hold Secretary Perdue accountable for gutting key protections for independent farmers and ignoring a congressional mandate to act. The Eighth Circuit declined to reinstate those protections or to order the agency to comply with Congress's directive. We are disappointed in the court's ruling in light of USDA having ignored a clear command of Congress.”

During the oral arguments for the case, USDA announced that it would continue rule-making on the issue in the spring of 2019, which the judge’s opinion restated.

“We hope Secretary Perdue will take that opportunity to make markets more fair. Either way, OCM will keep fighting for an even playing field for independent farmers, in Congress, in the courts and in future administrations,” OCM said in its statement.

TAGS: Policy
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