No. 04-1379

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

ARTHUR HARVEY,

Plaintiff-Appellant,

5.

ANN VENEMAN,

Secretary of Agriculture,

Defendant-Appellee

Appeal from the U.S. District Court

for the District of Maine

REPLY BRIEF OF PLAINTIFF-APPELLANT

ARTHUR HARVEY

                        Paula Dinerstein

                        (First Circuit Bar. No. 97079)

                        Lobel, Novins & Lamont

                        1275 K Street, N.W., Suite 770

                        Washington, D.C. 20005

                        (202) 371-6626

                        Counsel for Plaintiff-Appellant

July 19, 2004




REPLY BRIEF OF PLAINTIFF-APPELLANT ARTHUR HARVEY

INTRODUCTION

Nothing in USDA’s Brief undermines Harvey’s contentions that the challenged regulations are
inconsistent with OFPA. They should be invalidated.

I. HARVEY HAS STANDING TO BRING ALL OF THE COUNTS APPEALED

The standing concerns raised by USDA and the Magistrate Judge are half-hearted at best.
Nevertheless, because USDA’s brief raises the issue, and because the Court must assure itself of
its own jurisdiction, Harvey addresses the basis for his standing here.

Without explicitly challenging standing, or any further explanation, USDA alleges that “[t]he
issues in this litigation have been difficult to define, respond to and decide, because Mr. Harvey
lacks the type of concrete, particularized injury that standing requires in order to sharpen and
focus them.”11 In the District Court, USDA challenged Harvey’s standing only with respect to
Counts 1, 4 and 8.22 The Magistrate Judge rejected this challenge:

With respect to the Secretary’s challenge to Harvey’s standing, I conclude Harvey has standing
with respect to at least eight of the nine claims. It is uncontested that Harvey is a certified
organic farmer, a handler as defined under OFPA, an organic foods consumer, and an organic
inspector employed by USDA accredited certifiers. . . . I do not, for the most part, credit the
Secretary’s standing concern, except, as noted below, with respect to Count VII.

Appendix (“App.”)at 104-05.

The Magistrate Judge’s concern with Count 7 is cryptic. She “note[s] that the question of
Harvey’s standing on this count is premised mostly on his consumption of organic food in
general (there is no allegation that he is a milk drinker) and his familiarity with dairy
producers.” Id. at 134. But she also refers to Harvey’s allegation that as a result of the
challenged rule, he will not be able to tell whether the milk he purchases is truly organic and will
not have the choice to purchase only truly organic milk, id., i.e., that he is a consumer of
organic dairy products suffering concrete injury from the challenged regulation. The
Recommended Decision rejects Harvey’s standing on the basis of his commercial dealings with
organic dairy farmers, but does not address why Harvey’s status as a purchaser of organic
dairy products is not sufficient to confer standing. Id. It is not even clear that the
Recommended Decision adopted by the District Court actually ruled that Harvey lacked standing.
It states that “Harvey has standing with respect to at least eight of the nine claims.” Id. at 104
(emphasis supplied).

There are two components to standing for purposes of APA review: constitutional and
prudential. The prudential standing requirement concerns

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.

Ass’n of Data Processing Service Orgs. v. Camp, 397 U.S. 150, 153 (1970). As seems obvious
and as USDA has conceded, as a certified organic farmer, organic inspector, and consumer of
organic products, Harvey is “likely . . . the type of person who falls within the zone of interests
that the OFPA was designed to protect.” D. 31 at 17.

To present a “case or controversy” under the constitution, the plaintiff must have suffered a
concrete injury which must be fairly traceable to the action of the defendant, and it must be
likely that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61 (1992). In suits challenging government action, if the plaintiff himself is
the subject of the action,

there is ordinarily little question that the action or inaction has caused him injury, and that a
judgment preventing or requiring the action will redress it.

504 U.S. at 561-62. Here, Harvey is subject to the regulations as an organic producer, handler
and inspector, and affected by them as an organic consumer. The challenged regulations are
traceable to the action of USDA, and court action vacating the regulations and requiring
conformance with the statute would redress Harvey’s injury.

Standing on all of the Counts is premised on the claim that the challenged regulations
undermine the integrity and the proper operation of the USDA organic program, including
maintenance of the strict organic standards intended by Congress. Thus, the regulations injure
Harvey as a consumer of organic foods who seeks to rely on a properly operating organic
program adhering to strict organic standards. They also injure him as an organic producer and
handler who depends on consumer confidence in the organic label.

Count 1 challenges USDA’s allowance of “any nonorganically produced agricultural product” in
organically-labeled processed foods, as long as “the product is not commercially available in
organic form.”33 This regulation injures Harvey as an organic consumer because it degrades
the quality of organically-labeled food intended by OFPA, which requires that all nonorganic
ingredients be individually approved in accordance with the statutory National List procedures.
He is also harmed as a producer, because his own products, which meet OFPA’s standards, are
forced to compete with products which do not meet those standards, but nevertheless bear the
same organic certification and labeling.44

Count 2 involves products with 70 to 95% organic content. It challenges the regulatory
provisions which require the identification of an organic certifier, preceded by the words
“certified organic by . . . ,” and permit the use of the certifier’s seal or logo.55 These provisions
cause Harvey competitive injury. His blueberry products all contain at least 95% organic
ingredients, and until this regulation became effective, no other certified products competed
with his unless they also were at least 95% organic.66

Count 3 challenges the regulatory allowance of synthetics in organically-labeled processed
foods.77 These provisions also cause competitive injury, forcing Harvey’s blueberry products,
which do not contain synthetics, to compete against products which do contain synthetics but
which nevertheless bear the same organic certification and labeling. They harm Harvey as a
consumer by permitting products to be organically-labeled which do not meet the requirements
of OFPA.

Count 5 challenges the exclusion of wholesalers and distributors who sell previously packaged
organic products from the Act’s certification and inspection requirements.88 This regulation
injures Harvey as an organic consumer by removing regulatory oversight, intended to prevent
fraudulent and careless violations of organic integrity, from a sector of the organic industry.

Count 6 challenges the regulation which, purportedly to prevent conflicts of interest, forbids
organic certifiers and inspectors from “giving advice” “for overcoming identified barriers to
certification.”99 This regulation injures Harvey by preventing him from carrying out his job as
an organic inspector in the manner that he chooses and which he believes to be most beneficial
to farmers and consumers. It also restricts his freedom of speech.1010

Count 7 challenges the unauthorized exception to the requirement that dairy animals be fed
organic feed for one year prior to the sale of dairy products as organic.1111 As noted above,
Harvey is injured by this regulation because it permits dairy products which he buys to be
labeled as organic even though they do not meet the requirements of OFPA.

Count 8 challenges the regulation which forbids private certifying agents from requiring
compliance with production or handling practices additional to those provided for in the Act and
the regulations.1212 Prior to implementation of this regulation, Harvey’s certifier, the Maine
Organic Farmers and Gardeners Association (“MOFGA”), did not certify products which were
grown on fields treated with long-lasting herbicides and rotated in and out of organic status.
MOFGA also did not certify products with less than 95% organic content. In order to be
accredited by USDA, MOFGA was forced to certify such products.1313 Harvey suffers
competitive injury because he is forced to compete with products produced to lesser standards
than his products, but bearing the same certification seal. The regulation also prevents Harvey
from obtaining certification to MOFGA’s former standards from any other USDA-accredited
certifier. Count 8 also seeks to restore the benefits of competition in the organic marketplace,
benefitting Harvey both as an organic consumer and an organic producer.

II. USDA HAS ADMITTED THAT NONORGANIC AGRICULTURAL PRODUCTS IN ORGANICALLY-
LABELED FOODS MUST BE INDIVIDUALLY LISTED IN ACCORDANCE WITH THE NATIONAL LIST
PROCEDURES. THE COURT SHOULD ISSUE A DECLARATORY JUDGMENT TO THAT EFFECT.
(COUNT 1)

USDA now unequivocally admits that nonorganic agricultural products may be used in the five
percent nonorganic component of organic processed foods only if “they were listed pursuant to
National List procedures the way that the five specific ingredients in 7 C.F.R. § 205.606 have
been listed . . . .”1414 USDA also admits that at least some of its public guidance to the organic
industry, to the effect that .606 allows nonorganically produced agricultural products to be
used without being on the National List, is “misleading.”1515 USDA nevertheless resists a
declaratory judgment as to the meaning of this regulation, suggesting that the Court should
“trust the Secretary.” USDA Br. at 11, n. 5.

As demonstrated in Harvey’s opening brief, both the plain language of the regulation and all of
USDA’s public statements and guidance concerning it (except in this litigation) permit “any
nonorganically produced agricultural product [to be] used . . . when the product is not
commercially available in organic form.”1616 The language of the regulation and USDA’s public
interpretations warrant declaratory judgment as to the meaning of the regulation. The organic
food labels submitted by Harvey also illustrate that producers and handlers have in fact
implemented the regulation as written and interpreted by USDA, and are including many
nonorganic ingredients which are not specifically listed in the regulation. See, App. 81-82, 89-
91, 93-95 (organic labels listing nonorganic natural flavors, carrageenan, guar gum, rice bran
extract, vinegar, cultured milk, xanthan, vegetable gum, spice extract, whey, natural vanilla
flavor, natural chocolate flavor, natural marshmallow flavor, natural blueberry flavor, and
garlic).1717

Whether or not intentionally, by the way it has worded and publicly interpreted the regulation,
USDA has created a situation in which organic handlers are in good faith using nonorganic
agricultural ingredients which are not on the National List. USDA has now admitted that this
practice is contrary to the statute, but proposes to do nothing to remedy it, other than
suggesting product by product noncompliance actions and complaints to the National Organic
Program (“NOP”).1818 This would be an extremely inefficient way to attack a global problem
created by USDA’s misleading regulatory language and guidance. It would also be highly unfair
to organic producers who relied in good faith on USDA’s statements.1919

Instead, this Court should issue a judgment declaring the meaning of the regulation as now
asserted by USDA, and direct USDA to so inform the public and the organic community. The
Court should direct a phase-in period for compliance with the regulation as newly interpreted,
so that existing products complying with the former interpretation need not be relabeled or
pulled from store shelves or production lines. The regulation must properly reflect OFPA’s
requirements prospectively. Retroactive application, however, would unfairly penalize
producers for USDA’s admittedly “misleading” actions.2020 As the Supreme Court has stated:

the presumption against retroactive legislation is deeply rooted in our jurisprudence . . . .
Elementary considerations of fairness dictate that individuals should have an opportunity to
know what the law is and to conform their conduct accordingly; settled expectations should not
be lightly disrupted.

Landgraf v. USI Film Products, 511 U.S. 244, 265 (1994) (footnote omitted).2121

III. USDA HAS NOT REFUTED THE CLAIM THAT PRODUCTS WITH LESS THAN 95% ORGANIC
INGREDIENTS MAY NOT BE CERTIFIED (COUNT 2)

USDA’s response on Count 2 addresses only USDA’s authority, pursuant to 7 U.S.C. §6505(c),
to create a three tier labeling system in which the word “organic” may be used to describe the
organically produced ingredients in products with less than 95% organic content.2222 USDA
erects a straw man, because Harvey has never disputed USDA’s authority to implement §6505
(c) with a three tier labeling system.2323 While defending what Harvey has not attacked, USDA
fails completely to support the parts of the regulation which are actually challenged. These
provisions require the identification of a certifier, preceded by the statement “‘Certified organic
by . . ., ’ or similar phrase,” and permit the use of a certification seal or logo, on the labels of
products containing 70% to 95% organic ingredients.2424

USDA recognizes that these products “would not qualify for the official 95% seal.”2525 The
legislative history makes abundantly clear that products with less than 95% organic content
“would never be eligible for the USDA seal.”2626 The statute itself states that the Secretary
may determine

to permit the word ‘organic’ to be used on the principal display panel of such products only for
the purpose of describing the organically produced ingredients.

7 U.S.C. §6505(c)(1). See also, 1990 U.S.C.C.A.A.N. at 5221.

USDA has circumvented the clear intent of Congress to forbid labeling which indicates that
these products meet USDA certification standards. The regulation forbids use of the USDA seal,
but then totally undermines the value of that prohibition by requiring a statement that the
product is “certified organic by” a particular USDA-accredited certifier and allowing the use of
the private certifier’s seal or logo. The whole Act is based on using USDA-accredited private
certifiers to attest to the fact that the USDA standards (at the least) have been met, as USDA
itself does not certify anything. See, 7 U.S.C. §6513(a) (certifying agents shall review organic
plans to “determine if such plan meets the requirements of the programs”); 7 U.S.C., § 6515(a)
(“To be accredited as a certifying agent . . . a governing State official or person shall be able to
fully implement the applicable organic certification program established in this chapter”); 1990
U.S.C.C.A.A.N. at 4947 (certifying agents “make certain that the requirements set forth under
this title for organic production have been met”). Thus, the private seal cannot be used on
products which do not meet USDA standards.

USDA recognizes this in 7 C.F.R. 205.501(b)(2), which dictates that the use of accredited
private certification seals be based upon production and handling practices identical to those
provided in the Act and the regulations.2727 Inconsistently, the regulation challenged in Count
2 allows private certification of products which do not meet OFPA’s certification requirements.
2828

In sum, the use of private certification notices or seals on products which admittedly do not
meet OFPA’s organic standards is both contrary to the statute and highly misleading.2929

IV. THE NATIONAL LIST PROVISIONS OF OFPA DO NOT AUTHORIZE THE USE OF SYNTHETICS
IN HANDLING (COUNT 3)

OFPA generally prohibits the use of synthetics, “except as otherwise provided in this chapter,”
3030 and specifically prohibits adding any synthetics in handling.3131 USDA nevertheless claims
that the National List provision of OFPA3232 permits the listing of synthetics for use in
handling. Harvey’s opening brief, at 31-33, demonstrates that the National List provision
permits the listing of synthetics for use in production, i.e., growing food or raising livestock, but
not in handling, i.e., processing or packaging.

USDA relies on the statute’s general descriptions of the National List as covering both
production and handling, specifically, §6517(a), providing for the establishment of a National
List of approved and prohibited substances to be included in the standards for organic
production and handling, and §6517(c)(1)(A), which states that the National List may provide
for the use of otherwise prohibited substances in an organic farming or handling operation only
if the Secretary makes certain determinations in consultation with HHS and EPA. What USDA
neglects to acknowledge is that §6517 then moves beyond these general provisions to put very
precise limitations on the types of substances which can be listed. A particular substance may
be listed “only if” it

(i) is used in production and contains an active synthetic ingredient in the following categories:
copper and sulfur compounds, toxins derived from bacteria; pheromones, soaps, horticultural
oils, fish emulsions, treated seed, vitamins and minerals; livestock parasiticides and medicines
and production aids including netting, row corners, and equipment cleansers;

(ii) is used in production and contains synthetic inert ingredients that are not classified by the
Administrator of the Environmental Protection Agency as inerts of toxicological concern; or

(iii) is used in handling and is non-synthetic but is not organically produced . . .

§6517(c)(1)(B) (emphasis supplied).

USDA has not and could not claim that it could list synthetic substances for use in production
that do not fall within the categories specifically listed in §6517(c)(1)(B)(i) and (ii), simply
because the National List provision has general language about listing synthetics. Yet, it claims
that §6517(c)(1)(B)(iii)’s limitation of substances used in handling to non-synthetic substances
is somehow negated by the general descriptions of the National List as covering both
production and handling. This is not a logical or reasonable reading of the plain language of the
statute.

USDA also argues that it makes no sense to prohibit synthetics in handling when they can be
used upstream in production.3333 Such a contention cannot overcome the plain language of
the statute. In any event, the statutory distinction makes perfect sense, because the use of
synthetics in production involves entirely different substances and considerations. The
synthetics used in production generally do not end up as ingredients in the food, but are used
to treat the soil, repel pests, as production aids and for livestock health. One cannot imagine
them being used in processing: e.g., toxins derived from bacteria; pheromones, soaps,
horticultural oils, fish emulsions, treated seed, livestock parasiticides and medicines and
production aids including netting, row corners, and equipment cleansers.3434 Adding synthetic
substances in the course of processing raw agricultural products is another matter entirely, and
is a practice which Congress has chosen to prohibit for organic foods.

Harvey’s opening brief discusses the fact that USDA has allowed additional synthetics, not
listed in the regulation, to be used in organic foods by means of an NOP Guidance Document
stating that substances classified by FDA as food contact substances may be used without being
on the National List.3535 USDA contends that this “argument should be rejected out of hand”
because it was not made until Harvey’s opposition to summary judgment.3636 However, this
information was not presented to raise a new or separate claim, but merely as an illustration of
USDA’s allowance of synthetics which could not even be identified on the labels of the products.
3737 The fact that USDA has permitted the use of these synthetics via a notice on its web site
adopting an FDA list, rather than by a regulatory process, certainly should not shield the
synthetics so allowed from judicial scrutiny.3838 If this Court rules that OFPA does not permit
synthetic substances to be used in processing organically-labeled foods, that ruling will apply to
all synthetic substances that USDA is permitting, whether by regulation or otherwise.



V. THE WHOLESALERS AND DISTRIBUTORS EXCLUDED BY USDA’S     REGULATION ARE
EXPLICITLY MADE SUBJECT TO OFPA’S      REQUIREMENTS (COUNT 5)

OFPA imposes many requirements on “producers” and “handlers” of organic products in order
to insure organic integrity, including the creation of an organic plan agreed to by a certifier,7 U.
S.C. §6504(3), 6506(a)(2), annual certifications of compliance to the Secretary, §6506(a)(4),
and annual on-site inspections. §6506(a)(5). The question of to whom these requirements
apply is answered in the definitions section of the Act. “Handlers” are all those “engaged in the
business of handling agricultural products,” excluding only “final retailers of agricultural
products that do not process agricultural products.” 7 U.S.C. §6502(9). “Handle,” in turn is
defined as “to sell, process or package agricultural products.” §6502(8). A “handling
operation” is one which “(A) receives or otherwise acquires agricultural products; and (B)
processes, packages, or stores such products,” excluding only “final retailers of agricultural
products that do not process agricultural products.” §6502(10).

In other words, Congress has set out requirements for those that the Act covers, and has
precisely defined who those persons or entities are. The statutory definitions cover those who
receive and store or sell organic products, exempting only final retailers who do not process.
Yet, USDA still insists that the Act “is at least ambiguous, if not silent, with respect to the issue
of wholesalers and distributors,” and contains alleged but not identified “interstices” which
“permit the agency’s interpretation to exclude wholesalers and distributors who only resell
previously packaged products.”3939 To the contrary, the statute speaks directly and
unambiguously to this question, and USDA’s regulation contravenes its requirements.

USDA implies that the prohibition on contaminating and commingling organic products and the
enforcement provisions of OFPA are sufficient to insure organic integrity.4040 However, there
is little likelihood that violations of those provisions will come to light when operations are not
subject to certification and inspection. Congress did not agree with USDA’s appraisal, and made
these entities subject to all of the Act’s provisions applicable to “handlers.”4141 USDA may not
override this congressional determination.4242

VI. OFPA DOES NOT AUTHORIZE USDA TO PROHIBIT CERTIFIERS FROM      PROVIDING FREE
ADVICE (COUNT 6)

USDA claims that its regulation prohibiting organic certifiers and their inspectors from
providing free advice on overcoming barriers to certification4343 is an “elaboration” of 7 U.S.C.
§6515(h). The statute, however, forbids “provid[ing] advice concerning organic practices or
techniques for a fee. . . . ” §6515(h)(3) (emphasis supplied). Congress directly addressed the
precise issue of advice concerning organic practices, and determined that only advice given for
a fee should be prohibited in order to avoid conflicts of interest. USDA’s prohibition of free
advice is not an elaboration of what Congress provided, it is in direct contradiction to it.

USDA claims that the Act expresses a general “concern for certifying agents’ integrity and
conflicts of interest” and “provides some guidance with respect to that concern.” USDA Br. at
31. That is not how the statute reads. Rather, it lists three very specific practices forbidden to
certifying agents.4444 While it is titled “Conflict of interest,” it does not contain any language
suggesting that the three prohibitions are merely “guidance,” or that USDA could prohibit
activities other than those listed. In accordance with traditional tools of statutory construction,
when a statute specifies or enumerates the situations to which it applies, coverage of other
situations is not to be implied. See, Opening Brief at 41-44.

As explained in Harvey’s Opening Brief at 45, the Court need not reach the First Amendment
challenge to this regulation, because the statute unambiguously precludes USDA’s regulatory
prohibition. However, even if the Court were to find that the statute is ambiguous, deference to
USDA’s interpretation would nevertheless be inappropriate because the regulation raises a
serious constitutional question. The court need not find that USDA’s interpretation is
conclusively unconstitutional to construe the statute to avoid constitutional problems. U.S.
West, Inc. v. FCC, 182 F.3d 1224, 1231 (10th Cir. 1999), cert. denied, 530 U.S. 1213 (2000)
(collecting cases).

Contrary to USDA’s implication, USDA Br. at 33, Harvey’s speech as an inspector is not
commercial speech. It does not attempt to sell anything. Rather, it seeks to further the effective
performance of his job and a cooperative, rather than adversarial, relationship with those he
inspects, and to promote the success of organic agriculture.4545 In order to restrict speech,
whether of employees or others, the government must “demonstrate that the recited harms are
real, not merely conjectural, and that the regulation will in fact alleviate these harms in a direct
and material way.” United States v. Nat’l Treasury Employees Union, 513 U.S. 454, 475 (1995).
USDA has not done so here. Even with regard to commercial speech, a court must determine
“whether the regulation directly advances the governmental interest asserted, and whether it is
not more extensive than is necessary to serve that interest.” Rubin v. Coors Brewing, 514 U.S.
476, 482 (1995) (internal quotation marks and citation omitted).

USDA expresses concern over inspectors “coaching” those they inspect, and the potential for a
conflict between free advice that was given to overcome a barrier to certification and the
obligation to report a non-compliance to USDA if that advice fails to resolve the problem. USDA
Br. at 31. Even crediting the “merely conjectural” assumption that inspectors would lose their
objectivity merely because they had given some advice, the regulation is far more extensive
than needed to meet that concern. Inspectors could easily be required to provide a disclaimer,
informing organic operations that any advice they give is not guaranteed to resolve certification
issues. The inspectors could also be required to provide more than one option for overcoming a
barrier to certification where more than one remedy exists.4646 Moreover, as amici have
pointed out, the regulation has a chilling effect on any advice regarding organic practices, even
if not directly related to “overcoming barriers to certification,” as inspectors fear they may run
afoul of a broad interpretation of the regulation by USDA.4747

In sum, the prohibition on free advice is not authorized by the statute. Even if the statute were
ambiguous, USDA’s interpretation should not be accepted because it raises serious
constitutional problems.

VII. USDA LACKS AUTHORITY TO CREATE A “WHOLE HERD CONVERSION”  EXCEPTION TO
THE ORGANIC FEED REQUIREMENTS OF THE ACT        (COUNT 7)

OFPA provides generally that organic livestock must to be managed organically from before
birth. 7 U.S.C. §6509 provides:

(a) In general

Any livestock that is to be slaughtered and sold or labeled as organically produced shall be
raised in accordance with this chapter.

(b) Breeder stock

Breeder stock may be purchased from any source if such stock is not in the last third of
gestation.

One of the requirements for being “raised in accordance with this chapter” is that livestock be
fed “organically produced feed that meets the requirements of this chapter.” §6509(c)(1).

The Act also contains two “additional guidelines” which modify these basic requirements.
Poultry need not be raised and handled organically until the second day of life, §6509(e)(1),
and dairy animals need to be raised and handled organically for only twelve months prior to
sale of dairy products as organic. §6509(e)(2).

Section 6509(e)(2) does not explicitly mention conversion to organic. However, it is obviously
addressed to that issue, since it allows dairy products to be sold as organic when the cows
were conventionally raised until one year prior to the sale. Without the exception provided
here, dairy animals could never be converted to organic, but would have to be managed
organically from the last third of gestation like other livestock.4848

USDA fully understood the scheme of the Act in relation to organic livestock, but added an
unauthorized third exception to the two provided in the Act. That exception applies when an
entire, distinct dairy herd is converted to organic production, and serves to relax the organic
feed requirements during the first nine months of the year prior to the sale of organic products.
4949 As USDA stated in the preamble to the final rule:

Any livestock product to be sold, labeled, or represented as organic must be maintained under
continuous organic management from the last third of gestation or hatching with three
exceptions. Poultry or edible poultry products must be from animals that have been under
continuous organic management beginning no later than the second day of life. Milk or milk
products must be from animals that have been under continuous organic management
beginning no later than 1 year prior to the production of such products, except for the
conversion of an entire, distinct herd to organic production.

65 Fed. Reg. 80548, 80560 (Dec. 21, 2000).

In the District Court, USDA frankly admitted that the challenged provision “is avowedly an
exception to the Act and the rest of the Rule in this respect.” App. at 80. USDA admits here that
it reasonably interpreted the statute to mean that “organic livestock be fed ‘a total feed ration
composed of agricultural products . . . that are organically produced and if applicable,
organically handled . . . ’.” USDA then “went on to create an exception to this rule for whole
herd conversion . . . .”5050 At the same time, USDA attempts to back away from this admission
and claim that OFPA is

at least ambiguous, if not silent, with respect to what exactly it is that organic dairy animals
should be fed in general and what non-organic dairy animals should be fed during the 12
months before their products are sold as organic in particular.

Id. USDA further claims that “[t]he Secretary could have required some other standard organic
and conversion diet.” Id. at 40. These statements are disingenuous in light of USDA’s
recognition that the statute requires that dairy animals be fed 100% organic feed for 12
months prior to the sale of dairy products as organic.

VIII. THE REGULATION CHALLENGED IN COUNT 8 PROHIBITS PRIVATE   CERTIFIERS FROM
REQUIRING ADDITIONAL STANDARDS, THEREBY   SUPPRESSING COMPETITION AND
PREVENTING THE DISSEMINATION   OF TRUTHFUL MARKETING INFORMATION

USDA makes confusing and contradictory statements about the meaning of the regulation
challenged in Count 8.5151 USDA states that “[t]he Rule allows certifiers to certify to additional
standards; it just prohibits them from making additional standards a requirement of certification
. . . ”. USDA Br. at 42. USDA also claims that Harvey’s certifier may certify additional standards
with its seal, such as production without the use of herbicides. Id. at 43. However, the
challenged regulation prohibits requiring additional standards as a condition of using a USDA-
accredited private certifier’s seal. A private certifier can certify to additional standards, but then
it may not be accredited by USDA or present its standards as “organic” standards. A product
can make additional claims, such as “produced without herbicides,” but such a claim cannot be
certified by a USDA-accredited certifier.

Because the USDA standards are now the generally recognized national standards for organic,
certifications that are not USDA-accredited have little value in the marketplace.5252 Therefore,
some certifiers who had higher standards are diluting them in order to receive USDA
accreditation.5353 Other certifiers, who insist on maintaining higher standards, are establishing
certifications outside the NOP. As a practical matter, they must also offer a USDA-accredited
certification to enable the producers to successfully market their products. Thus, the products
bear two certifications. Most consumers are unlikely to understand why or what they mean.
This system, purportedly justified by the Act’s purpose to create a “consistent standard,”
actually undermines that purpose and creates a great deal of confusion for consumers. Allowing
private certifiers to have stricter standards that are consistent with the USDA standards, and a
uniform standard for the USDA seal, would better implement that purpose of the Act.

The regulation suppresses competition and restricts organic labeling from containing truthful
information about the organic practices used, as reflected in a private certification and seal
requiring those practices.5454  It is not authorized by OFPA.5555

CONCLUSION

USDA has not refuted Harvey’s showings that the challenged regulatory provisions are
inconsistent with OFPA. The Court should issue a judgment declaring that the challenged
regulations are inconsistent with the Act, vacate the regulations, and remand to the Secretary
with instructions to repromulgate the regulations in a form that is consistent with OFPA and the
Court’s opinion.

            Respectfully submitted,

            _________________________________

Paula Dinerstein (First Circuit Bar. No. 97079)

            Lobel, Novins & Lamont

            1275 K Street, N.W., Suite 770

            Washington, D.C. 20005

            (202) 371-6626

            Counsel for Plaintiff-Appellant, Arthur Harvey



CERTIFICATE OF COMPLIANCE WITH RULE 32(a)

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                                    ________________________

                                    Paula Dinerstein

Attorney for Plaintiff-Appellant Arthur Harvey

Dated: __________________



UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

ARTHUR HARVEY,

Plaintiff-Appellant
                        

5. No. 04-1379

ANN VENEMAN,

Secretary of Agriculture,

Defendant-Appellee

CERTIFICATE OF SERVICE

I hereby certify that I caused the foregoing Reply Brief of Plaintiff-Appellant Arthur Harvey to
be served by first class mail this 19th day of July, 2004 on:

Halsey B. Frank

Margaret D. McGaughey

United States Attorney’s Office

P.O. Box 9718

100 Middle St. Plaza, East Twr., 6th Floor

Portland, ME 04104-5018

Jill Elizabeth Krueger

Susan Elayne Stokes

Farmer’s Legal Action Group, Inc.

46 E. 4th St., Suite 1301

St. Paul, MN 55101

James Handley

Handley Environmental Law

1707 Bay Street, S.E.

Washington, D.C. 20003

                                    ___________________________

                                    Paula Dinerstein

                                    Attorney for Appellant Harvey


1 1 USDA Br. at 9. It is difficult to understand how challenges to specific regulatory provisions
as inconsistent with the authorizing statute could be difficult to define, respond to or decide.


2 2 Docket (hereinafter “D.”) No. 31 at 1-2 (“Plaintiff lacks standing to raise some of his
claims”); 16-18 (Count 1); 25, n. 11 (Count 4); and 38 (Count 8). Count 4 has not been
appealed. In response, Harvey elaborated the basis for his standing on each Count. D. 35 at 7-
10, 15, 17, 19-20, 22, 25, 28, 30-31, 32.


3 3 7 CFR 205.606, second sentence.


4 4 See, Harvey Affidavit, App. 73, averring that he produces certified organic blueberry jam
products.


5 5 7 CFR 205.304(a)(3) and (b)(2).


6 6 App. 73.


7 7 7 CFR 205.600(b) and 605(b).


8 8 7 CFR 205.101(b)(1).


9 9 7 CFR 205.501(a)(11)(iv).


10 10 See, App. 72 at ¶B).


11 11 7 CFR 205.236(a)(2).


12 12 7 CFR 205.501(b)(2).


13 13 App.72 at ¶W); App. 74, at ¶4; Opening Br. at 52-3.


14 14 USDA Br. at 12.


15 15 USDA Br. at 12, n.6; see, Harvey Opening Br. at 24, quoting USDA’s guidance.


16 16 .606, second sentence; Opening Br. at 24-26.


17 17 After these labels were submitted, USDA added carrageenan to the National List in 7 CFR
205.605. 68 Fed. Reg. 61987 (Oct. 31, 2003).


18 18 USDA Br. at 15-16.


19 19 USDA claims that by not pursuing these avenues, Harvey has failed to exhaust
administrative remedies. Id. The remedies suggested are not remedies at all. While certifiers can
bring non-compliance actions, Harvey is not a certifier. More basically, Harvey’s complaint is not
that handlers are out of compliance with the regulation, but that they are in compliance with the
regulation and thereby out of compliance with the Act. Such a challenge to the regulation
should be encompassed by 7 U.S.C. § 6520(a), providing for administrative appeals when an
action by the Secretary or a certifying agent “ . . . is inconsistent with the organic certification
program established under this chapter.” However, USDA has failed to implement this provision,
providing for appeals only of a proposed denial, suspension, or revocation of one’s own
certification or accreditation. 7 CFR 205.680 and 205.681.


20 20 Likewise, the remedies as to the other Counts should be fashioned so as not to apply
retroactively or disrupt commerce in organic products.


21 21 USDA now defends the “commercially available” standard as requiring that a nonorganic
product be used only if it is individually listed on the National List and determined by the
certifying agent to be commercially unavailable in organic form. USDA Br. at 13-15. Harvey’s
challenge was to the use of the “commercially available” standard instead of the National List
procedures. Opening Br. at 22-3, 25. Harvey believes that adding a localized commercial
availability criterion on top of the National List procedures (which could include a consideration
of commercial availability) is not in accord with the Act’s intention to create a National List, and
unnecessary in light of the national market for nearly all organic processed products and their
ingredients. However, the issue of having a commercial availability requirement in addition to
the National List procedures was not squarely raised before now, and need not be decided by
the Court.


22 22 USDA Br. at 17-20; see also, id. at viii.


23 23 Section 6505(c), however does not govern all organic labeling, but describes limited
exceptions to the overall labeling principles in §6505(a).


24 24 7 CFR 205.304(a)(3) and (b)(2).


25 25 USDA Br. at 18; see also, id. at 17 quoting the Recommended Decision.


26 26 Senate Report No. 101-357 (Agriculture, Nutrition, and Forestry Committee) 101st
Cong., 2nd Sess. at 302, reprinted in, 1990 U.S.C.C.A.A.N. at 4956. See also, id. S. Rep at 567,
1990 U.S.C.C.A.A.N. 5221 (“no USDA label is allowed.”) (Emphasis in original).


27 27 Count 8 challenges this regulation insofar as it suppresses stricter standards by
accredited private certifiers. However, the regulation does properly implement the Act insofar as
it requires products bearing accredited private certification seals to meet the standards of the
Act.


28 28 USDA claims that 7 U.S.C. 6510(a)(4), forbidding certified handlers from adding more
than 5% nonorganic ingredients, has no bearing on the labeling of processed products. USDA
Br. at 19, n. 8. It is unclear how this contention supports the challenged portions of the
regulation. In any event, it makes no sense. If OFPA prohibits certified handlers from adding
more than 5% nonorganic ingredients, then, of necessity, products with more than 5%
nonorganic ingredients cannot be certified. Contradicting its own argument, USDA cites 6510(a)
(4) as authority for its statement that products with at least 95% organic ingredients qualify
for “first tier” labeling. Id. at 18.


29 29 USDA could rewrite its regulation to allow labeling which indicates, for example, the
percentage of organic ingredients and, on the ingredient listing panel, that specified organic
ingredients are certified by a particular certifier. Such labeling would not violate the Act or
mislead consumers as long as the notice of certification does not wrongly imply that the entire
product is certified, and no certification seal or logo is permitted.


30 30 7 U.S.C. §6504(1).


31 31 7 U.S.C. § 6510(a)(1).


32 32 7 U.S.C. § 6517.


33 33 USDA Br. at 23.


34 34 7 U.S.C. §6517(c)(1)(B)(i).


35 35 Harvey Opening Br. at 34-35; App. 83-88.


36 36 USDA Br. at 23, n. 11.


37 37 In any event, the Guidance permitting the use of these substances was posted in
January, 2003, well after the complaint was filed in October, 2002. It was introduced to refute
a claim by USDA that Harvey should have identified particular organic products containing
synthetic ingredients to support his standing. Harvey noted that the substances on the FDA list
do not have to be listed on the label. D. 35 at 7-9.


38 38 USDA claims that the document was posted on the NOP website for discussion, and that
therefore there is no final agency action. USDA Br. at 24, n.11. However, in response to the
question of when synthetic substances can be used as ingredients in organic processed foods,
the document states unequivocally that the food contact substances listed by FDA need not be
on the National List. App. 87-88. USDA also claims that 7 U.S.C. § 6519(f), which preserves the
authority of HHS under the Food, Drug and Cosmetic Act, prevents USDA from altering FDA’s
authority to regulate food additives. Id. Of course, Harvey does not suggest that OFPA alters
the FDA’s authority to permit food additives in nonorganic foods. Hopefully, USDA is not
suggesting that any food additive permitted by FDA in nonorganic foods must be permitted in
organic foods, or by extension, that any pesticide permitted by EPA under the Federal
Insecticide, Fungicide, and Rodenticide Act (see 7 U.S.C. § 6519(f)) for nonorganic production
can also be used in organic production. If so, there would be no point in having an Organic
Foods Production Act at all, as its purpose is to set separate and different standards for organic
foods.


39 39 USDA Br. at 25; 7 CFR 205.101(b)(1).


40 40 USDA Br. at 27.


41 41 See, 1990 U.S.C.C.A.A.N. at 4943-44 (“There is also growing evidence that some
conventionally grown food is deliberately mislabeled as ‘organic’ by dishonest traders looking
to cash in on the premium prices organic food commands”).


42 42 USDA’s argument heading for Count 5 states that the regulation “temporarily” excludes
these entities from certification and inspection. USDA Br. at 24; see also, id. at viii. While USDA
later states that the regulation of retailers who process was “deferred,” id. at 28, USDA does
not make any reference to possible future regulation of the wholesalers and distributors who
are the subject of Harvey’s remaining challenge. (The challenge to the portion of the regulation
exempting retailers who process was dropped in the District Court). USDA’s argument that it
may fill in “interstices” in the statute with this exemption would apply to a permanent
exemption, and the Court should rule that such an exemption violates the statute.


43 43 7 CFR 205.501(a)(11)(iv).


44 44 The other two prohibitions involve the certifier having a “commercial interest” in the
inspected operation, §6515(h)(1), and compensation in some form beyond the usual
certification fees, i.e., “payments, gifts, or favors.” §6515(h)(2).


45 45 Contrary to USDA’s statements, USDA Br. at 36, certifiers are not employed, but only
accredited, by USDA. Inspectors are either employed by or independent contractors of the
certifiers. Certifiers and inspectors are not funded by the government, but by the certified
operations, making cases such as Rust v. Sullivan, 500 U.S. 173 (1991), relied upon by USDA,
inapposite.


46 46 In some cases only one remedy does exist, yet there is no legitimate governmental
interest in suppressing the advice. For example, many farmers are not aware of all of the
recordkeeping requirements of the NOP. If the inspector merely reports the farmer’s failure to
keep required records without telling him how to comply, it simply wastes everyone’s time until
the farmer gets the necessary information.


47 47 Brief of Amici Curiae Organic Consumers Association (“OCA”), et al., at 24, n. 34.


48 48 See the Brief of Amici Curiae Rural Advancement Foundation International, et al., at 16-
19 for a discussion of the dairy animal exception and its rationale.


49 49 7 CFR 205.236(a)(2).


50 50 USDA Br. at 39, quoting 7 CFR 205.237(a).


51 51 7 CFR 205.501(b)(2).


52 52 See, OCA Amicus Brief at 30, n.47.


53 53 Opening Brief at 52-53.


54 54 USDA argues that Harvey waived the commercial speech argument because it was not
raised below. USDA Br. at 44, n 18. Exceptions to this general rule may be appropriate 1)
where the issue is purely legal; 2) where it raises a constitutional issue; 3) where the argument
is “highly persuasive,” particularly when failing to reach the issue threatens a miscarriage of
justice; 4) where there is no special prejudice or inequity to the other side; 5) where the
omission is inadvertent rather than deliberate, or 6) where the issue is of public concern.
National Ass’n of Social Workers v. Harwood, 69 F.3d 622, 627-29 (1st Cir. 1995). Here, the
issue is purely legal, raises a constitutional question, is persuasive, is of public concern, and was
omitted by a pro se plaintiff who is now represented by counsel. USDA had a chance to respond
to it and thus is not specially prejudiced. In any event, the regulation may be invalidated as
inconsistent with the statute without reaching the constitutional question.


55 55 See, Opening Br. at 53-57.

USDA Brief---my reply