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Animal Legal Defense Fund, Inc. v. Perdue

United States Court of Appeals, District of Columbia Circuit

September 29, 2017

Animal Legal Defense Fund, Inc., et al., Appellants
Sonny Perdue, Secretary, United States Department of Agriculture and Robert Gibbens, Western Regional Director, Animal and Plant Health Inspection Service, United States Department of Agriculture, Appellees

          Argued April 4, 2017

         Appeal from the United States District Court for the District of Columbia (No. 1:14-cv-01462)

          Stefanie Wilson argued the cause and filed the briefs for appellants. Katherine A. Meyer entered an appearance.

          Delcianna J. Winders was on the brief for amicus curiae Delcianna J. Winders in support of plaintiffs-appellants.

          Anna E. Frostic was on the brief for amici curiae The Humane Society of the United States and The Fund for Animals in support of plaintiffs-appellants.

          Jeremy S. Simon, Assistant U.S. Attorney, argued the cause for appellees. With him on the brief was R. Craig Lawrence, Assistant U.S. Attorney.

          Before: Garland, Chief Judge, Griffith, Circuit Judge, and Edwards, Senior Circuit Judge.



         The Animal Welfare Act ("AWA" or "Act") charges the United States Department of Agriculture ("USDA") with administering a licensing scheme for animal exhibitors, including zoos. 7 U.S.C. § 2133 (2012). The Act directs the Secretary of Agriculture ("Secretary") to promulgate regulations governing minimum animal housing and care standards, id. § 2143, and also to issue licenses to entities and individuals seeking to engage in exhibition activities, id. § 2133. Although the Act leaves many regulatory details to the agency's discretion, it specifies that "no license shall be issued until the dealer or exhibitor shall have demonstrated that his facilities comply with the standards promulgated by the Secretary." Id.

         USDA has bifurcated its approach to licensing: For initial license applications, an applicant must agree to comply with the agency's prescribed standards and regulations, pay an application fee, keep its facilities available for agency inspection, and pass an agency compliance inspection of its facilities before the license may be issued. 9 C.F.R. §§ 2.1-2.12. For license renewals, an applicant must submit an annual report, pay the appropriate application fee, certify compliance and agree to continue to comply with agency standards and regulations, id., and agree to keep its facilities available for inspection by the agency "to ascertain the applicant's compliance with the standards and regulations, " id. § 2.3(a). The agency treats the renewal procedure as administrative - that is, if the requirements are met, the agency will issue a license renewal. Id. § 2.2(b). Separately, USDA conducts random inspections of licensed facilities as part of its enforcement regime. See id. § 2.126. Violations discovered during these inspections may lead to license revocation or suspension, following notice and an opportunity for a hearing. Id. § 2.12; 7 U.S.C. § 2149.

         Tom and Pamela Sellner own and operate the Cricket Hollow Zoo in Manchester, Iowa. USDA granted their initial license application in 1994, and it has renewed their license each year since. Appellants Tracey and Lisa Kuehl, along with the Animal Legal Defense Fund ("ALDF"), a non-profit animal rights organization, brought suit against the agency challenging its most recent renewal of the Sellners' license. Appellants alleged that, at the time of the renewal, the agency was aware that Cricket Hollow was in violation of numerous animal welfare requirements under the Act and its implementing regulations. Accordingly, they argued, the agency's decision to renew the Sellners' license was contrary to AWA's requirement that "no . . . license shall be issued until the . . . exhibitor shall have demonstrated that his facilities comply with the standards promulgated by the Secretary." 7 U.S.C. § 2133. They also asserted that the agency's reliance on the Sellners' self-certification of compliance as part of its renewal determination, despite having knowledge that the certification was false, was arbitrary and capricious in violation of the Administrative Procedure Act ("APA").

         The District Court dismissed the case, concluding that USDA's license renewal regulations constituted a permissible interpretation of the Act. ALDF v. Vilsack, 169 F.Supp.3d 6 (D.D.C. 2016). Finding that the challenged license renewal was issued in accordance with those regulations, the court held that none of the challenges in the complaint could succeed. Id. at 20. The Kuehls and ALDF appealed the District Court's decision to this court. We find that AWA's compliance demonstration requirement does not unambiguously preclude USDA's license renewal scheme and that the scheme is not facially unreasonable. Accordingly, for the reasons set forth below, we affirm the judgment of the District Court on the statutory claim. However, we vacate the District Court's order granting the Government's motion to dismiss Appellants' arbitrary and capricious claim, and remand the case to the District Court with instructions to remand the record to the agency for further proceedings consistent with this opinion.

         I. Background

         A. Statutory and Regulatory Background

         Congress enacted the Animal Welfare Act in 1966 to ensure the humane treatment of animals used in medical research. Pub. L. 89-544, 80 Stat. 350 (Aug. 24, 1966); see also 7 U.S.C. § 2131. In 1970, Congress amended the Act to cover animal "exhibitors, " a category that includes zoos. Pub. L. 91-579, 84 Stat. 1560-61 (Dec. 24, 1970); see also 7 U.S.C. § 2132(h). The Act authorizes the Secretary of Agriculture to "promulgate standards to govern the humane handling, care, treatment, and transportation of animals by . . . exhibitors, " including minimum standards addressing the animals' "handling, housing, feeding, watering, sanitation, ventilation, shelter . . ., adequate veterinary care, . . . [and] for a physical environment adequate to promote the psychological well-being of primates." 7 U.S.C. § 2143(a).

         In order to ensure compliance with those standards, the Act prohibits an individual from exhibiting animals "unless and until" he or she has "obtained a license from the Secretary and such license shall not have been suspended or revoked." Id. § 2134. The Act delegates to the Secretary authority to prescribe the "form and manner" by which an exhibitor must apply for a license, "[p]rovided[] [t]hat no such license shall be issued until the . . . exhibitor shall have demonstrated that his facilities comply with the standards promulgated by the Secretary pursuant to section 2143 of [the AWA]." Id. § 2133 (emphasis omitted).

         The Act also grants the agency enforcement authority. "If the Secretary has reason to believe that any person licensed as a[n] . . . exhibitor . . . has violated or is violating any provision of [the Act], or any of the rules or regulations or standards promulgated by the Secretary [t]hereunder, he may suspend such person's license temporarily . . . ." Id. § 2149(a). "[A]fter notice and opportunity for hearing, " the Secretary "may suspend for such additional period as he may specify, or revoke such license, if such violation is determined to have occurred." Id. The Secretary may also impose civil and criminal penalties. Id. § 2149(b), (d).

         Finally, the Secretary may "promulgate such rules, regulations, and orders as he may deem necessary in order to effectuate the purposes of [the statute]." Id. § 2151.

         The Secretary has delegated his responsibilities under the Act to the Administrator of the Animal and Plant Health Inspection Service ("APHIS"). See Animal Welfare; Inspection, Licensing, and Procurement of Animals, 69 Fed. Reg. 42089, 42089 (July 14, 2004) (to be codified at 9 C.F.R. pts. 1, 2). Pursuant to that authority, APHIS has adopted a comprehensive scheme of animal welfare requirements applicable to licensees. See 9 C.F.R. §§ 3.1-3.142 (2017). These include general and species-specific requirements, such as providing potable water daily, id. § 3.55, keeping enclosures reasonably free of waste and regularly sanitized, id. § 3.1, removing feces and food waste daily, id. § 3.11, and addressing social needs of primates to "promote [their] psychological well-being, " id. § 3.81.

         The agency has also promulgated a series of regulations governing the granting, renewal, and revocation of animal exhibition licenses. Since 1989, the implementing regulations have distinguished between applications for an initial license and those for annual license renewal. In their present form, the regulations direct that an applicant for an initial license must (1) "acknowledge receipt of the regulations and standards and agree to comply with them by signing the application form, " id. § 2.2(a); (2) submit the appropriate fee, id. § 2.6; and (3) "be inspected by APHIS and demonstrate compliance with the regulations and standards . . . before APHIS will issue a license, " id. § 2.3(b). By contrast, an applicant for a license renewal must (1) pay the annual fee before expiration of the license, id. § 2.1(d)(1); (2) self-certify "b y signing the application form that to the best of the applicant's knowledge and belief, he or she is in compliance with the regulations and standards and agrees to continue to comply with [the same], " id. § 2.2(b); and (3) submit an annual report detailing the number of animals owned, held, or exhibited at his or her facility, id. § 2.7. Both types of applicants "must make his or her animals, premises, facilities, vehicles, equipment, other premises, and records available for inspection during business hours and at other times mutually agreeable to the applicant and APHIS." Id. § 2.3(a). "A license will be issued to any applicant" that has met the relevant regulatory requirements and has paid the application and license fees. Id. § 2.1(c).

         B. Factual and Procedural Background

         Tom and Pamela Sellner first applied for an animal exhibition license over twenty years ago. At the time, the couple operated a small "mobile zoo" that included only a few animals. See Kuehl v. Sellner, 161 F.Supp.3d 678, 690 (N.D. Iowa 2016). USDA granted the application and issued a license for Cricket Hollow Zoo on May 27, 1994. Appellees' Br. 16. The Sellners have since complied with the administrative license renewal requirements at every anniversary of the license's issuance. USDA has, in turn, granted their renewal applications each year. Id. The Sellners' 2015 license renewal application indicates that the Zoo now houses approximately 193 animals. 2015 License Renewal Application, reprinted in Appendix ("App.") 384.

         Sisters Tracey and Lisa Kuehl are Iowa residents. Supplemental Complaint ("Supp. Compl.") ¶¶ 13-14, 24, reprinted in App. 46, 50. They allege that they visited Cricket Hollow Zoo on several occasions between 2012 and 2013. Id. ¶¶ 13-30, App. 46-51. Both sisters claim that they experienced distress and anguish as a result of witnessing animals in what they felt were inhumane and harmful conditions. Id. Tracey Kuehl asserts that she observed animals in enclosures that had "standing water and accumulating excrement, " and that "a lion was repeatedly ramming itself against the cage wall, " which she interpreted as a sign of obvious psychological distress. Id. ¶ 15, App. 47. She later learned that three Meishan piglets had died in their enclosure and that their bodies had not been removed before the facility was opened to the public. Id. ¶¶ 18-19, App. 48. Lisa Kuehl similarly alleges that she witnessed animals in isolated confinement and in cages that lacked drinking water. Id. ¶¶ 25-28, App. 50-51. She asserts that she observed "lions and wolves covered with flies . . . [which] filled up the interior of the animals' ears, " as well as a baby baboon who was "separated from the other animals and being continuously handled by humans." Id. ¶¶ 25, 27, App. 50.

         The Kuehls met with several state public officials and organizations to share their concerns about the Zoo. Id. ¶¶ 19-20, 26, App. 48-50. Tracey Kuehl repeatedly wrote to USDA about the conditions of the animals' enclosures. Id. In 2014, she wrote a letter asking that the agency "carefully review the consistent poor record of compliance [with AWA standards] and not renew [the Zoo's] license to exhibit the animals to the public." Id. ¶ 20, App. 49.

         The Kuehls also assert that USDA officials had knowledge, apart from their letters, of Cricket Hollow's failure to comply with certain AWA regulations and standards. Appellants' Br. 3-5; see also Appellees' Br. 16-17. Appellants allege that agency inspectors have repeatedly reported that the animals lacked adequate veterinary care, and that "[t]here are not enough employees to clean [the Zoo] to meet appropriate husbandry standards . . . [or] provide for the health and well-being of the animals." Supp. Compl. ¶¶ 99-129, App. 63-68. They assert that USDA has sent official warnings to the Sellners for these "numerous non-compliances, " id. ¶ 117, App. 66, and the USDA regional director has concluded that "it is clear that there is a chronic management problem" at the Zoo, id. ¶ 108, App. 64. Nonetheless, the agency granted the Sellners' license renewal application in May of 2014. Id. ¶ 81, App. 59.

         Upon learning of the agency's 2014 renewal decision, the Kuehls and ALDF filed this action against the Secretary in the District Court on August 25, 2014. The original complaint alleged that USDA's decision to renew the Zoo's license in 2014 violated the Act because the Sellners had not "demonstrated that [their] facilities comply" with the requisite animal welfare provisions of the Act or its regulations, which Appellants claim AWA § 2133 requires before a renewal may be issued. Complaint ¶¶ 123-28, ALDF, 169 F.Supp.3d 6 (D.D.C. 2016) (Dkt. No. 1). In the alternative, the complaint asserted that the agency's reliance on the Sellners' self-certification of compliance in connection with the renewal decision was arbitrary and capricious in violation of the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2)(A). Id.

         In 2015, USDA again renewed the Zoo's license, and Appellants filed a supplemental complaint on July 17, 2015, challenging the 2015 renewal and the Zoo's "pattern and practice" of renewing Cricket Hollow Zoo's license despite knowing that the Zoo is not in compliance with AWA regulations and standards. Supp. Compl. ¶¶ 131-36, App. 68-69.

         On July 28, 2015, USDA moved to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Appellants opposed that motion.

         When USDA produced its administrative record to the District Court, it included only the Sellners' renewal application, annual report, and evidence of payment of the renewal fee. While the Government's motion to dismiss was pending, Appellants moved for the court to compel inclusion of additional administrative documents related to the Cricket Hollow Zoo which they alleged were in the agency's records, including inspection reports indicating that the Zoo was out of compliance with AWA standards. The agency opposed the motion, claiming that it did not rely on those records in making its renewal decision and that they were ...

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