Humane Soc'y of U.S. v. Vilsack

19 F.Supp.3d 24

The Humane Society of the United States, et al., Plaintiffs

v.Tom Vilsack, Secretary of the U.S. Department of Agriculture, Defendant.

Civil Action No. 12–1582 ABJ

United States District Court, District of Columbia.

September 25, 2013

Matthew Eric Penzer, Peter A. Brandt, Humane Society of the United States, Washington, DC, for Plaintiffs.

Peter J. Phipps, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

Plaintiffs, the Humane Society of the United States (“Humane Society”), Harvey Dillenburg, and the Iowa Citizens for Community Improvement (“ICCI”), have brought this suit against Tom Vilsack, the Secretary of the United States Department of Agriculture (“USDA”) under the Administrative Procedure Act (“APA”), 5 U.S.C. § 706 (2012). Am. Compl. [Dkt. # 3] ¶¶ 1–2. They challenge the Secretary's approval of the National Pork Board's purchase of the slogan “Pork, The Other White Meat” from the National Pork Producers Council (“NPPC”), a trade association. Id. ¶ 1. They also challenge the Secretary's annual approval of the payments made to NPPC under the terms of the Purchase Agreement. Id. Plaintiffs allege that the Secretary's approval was arbitrary, capricious, an abuse of discretion, and contrary to law because the contract between the Board and NPPC results in the use of pork checkoff dollars to influence legislation, and the Board is prohibited from using pork producers' contributions for that purpose. Id. Specifically, plaintiffs allege that NPPC, endowed with funds from the Board, has opposed legislative efforts—that plaintiffs support—to mandate the more humane treatment of pigs and other animals.Id. ¶¶ 10–11.

Plaintiffs ask the Court to declare that the approvals and expenditures were unlawful, to set aside the allegedly unlawful approvals and expenditures, to order the Secretary to recover the prior payments from NPPC, and to enjoin further payments from the Board to NPPC under the purchase agreement. Am. Compl., Relief Requested ¶¶ A–C.

Defendant has moved to dismiss plaintiffs' complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Def.'s Mot. to Dismiss (“Def.'s Mot.”) [Dkt. # 10] at 1. Specifically, defendant asserts that: (1) plaintiffs lack standing; (2) their claims fall outside of the applicable waivers of sovereign immunity; and (3) their claim regarding the legality of the original trademark purchase agreement is time-barred. Def.'s Mem. in Supp. of Mot. to Dismiss (“Def.'s Mem.”) [Dkt. # 10] at 2–4. The Court will grant defendant's motion because plaintiffs have failed to allege that they have constitutional standing to bring this suit. The Humane Society and the ICCI do not have a stake in how the Board spends the checkoff funds, and there has been no showing that Mr. Dillenburg or the individual members of the associations have suffered an injury in fact that was caused by the Secretary's actions and can be redressed by this lawsuit.

BACKGROUND

I. The Pork Act, the Pork Order, and the Purchase of the “Pork, The Other White Meat” Trademarks

In 1985, Congress enacted the Pork Promotion, Research, and Consumer Information Act (“Pork Act”) “to authorize the establishment of an orderly procedure for financing, through adequate assessments, and carrying out an effective and coordinated program of promotion, research, and consumer information designed to (A) strengthen the position of the pork industry in the marketplace; and (B) maintain, develop, and expand markets for pork and pork products.” 7 U.S.C. § 4801(b)(1) (2012). To carry out the goals of the pork checkoff program, the Pork Act instructed the Secretary of Agriculture to issue a pork promotion, research, and consumer information order applicable to persons engaged in the production and sale of porcine animals, pork, and pork products in the United States and their importation into the United States. Id. § 4803. The Secretary issued this order in 1986. See Pork Promotion, Research, and Consumer Information Order (“Pork Order”), 7 C.F.R. pt. 1230(A) (2013).

The Pork Act also established a fifteen-member National Pork Board (“Pork Board” or “Board”) to develop proposals for promotion, research, and consumer information plans and projects; to submit the proposals to the Secretary for approval; to administer the Pork Order in accordance with the Act; and to receive, investigate, and report to the Secretary complaints of violations of the Pork Order. 7 U.S.C. § 4808. The Pork Order requires pork producers to pay assessments to the Pork Board. 7 C.F.R. § 1230.71(a)(1). The Board is then required to use those assessments for financing plans and projects, paying administrative expenses, and creating a reserve for the pork checkoff program. Id. § 1230.73(c).

The Pork Order requires the Secretary to review and approve each plan and project that the Board develops prior to its execution. 7 U.S.C. § 4808(b)(3) ; 7 C.F.R. § 1230.60(a). With the approval of the Secretary, the Board may enter into contracts for “the development and conduct of activities authorized under” the Pork Order. 7 U.S.C. § 4808(4)(A)(i). The Board must also periodically review each plan and project for effectiveness and terminate any projects that do not further the purposes of the Act. 7 C.F.R. § 1230.60(b). The Pork Act is one of several promotional programs established by Congress; the USDA is also involved in, for example, the marketing of eggs and milk. The Secretary has delegated responsibility for these checkoff programs to the USDA's Agricultural Marketing Service (“AMS”). Am. Compl. ¶ 36. AMS has published Guidelines for Oversight of Commodity Research and Promotion Programs. Id. This case arises out of a core principle governing the pork promotion program: the Pork Act, the Pork Order, and the AMS Guidelines all prohibit the Board from using funds collected through assessments “for the purpose of influencing legislation.” 7 U.S.C. § 4809(e) ; 7 C.F.R. § 1230.74 ; see Am. Compl. ¶ 42.

NPPC is a trade association that lobbied for the passage of Pork Act and submitted the proposed rule that was later adopted, with minor modifications, as the initial Pork Order. Am. Compl. ¶¶ 43–44. Under the Pork Act, NPPC was authorized to receive a portion of the mandatory checkoff assessments during the early implementation of the Pork Act and Order. 7 U.S.C. § 4809(c)(2). NPPC also acted as the Pork Board's primary contractor for implementing the checkoff program. Am. Compl. ¶¶ 50, 55. Between 1986 and 1988, NPPC developed and registered the trademarks for the Pork, the Other White Meat slogan. Id. ¶¶ 46–53. The Board adopted the slogan as its primary advertising campaign in 1987, and continued to use the slogan until March of 2011. Id. ¶¶ 52, 99–100. Between 2001 and 2006, the Board paid a licensing fee to NPPC for the exclusive use of the trademarks. Id. ¶¶ 59–65.¹

On February 14, 2006, the Board asked the Secretary for approval to purchase the Other White Meat trademarks from NPPC for $34.597 million. Am. Compl. ¶¶ 70–71. The USDA authorized the Board to proceed with its proposed acquisition on February 28, 2006. Id. ¶ 86. The trademark purchase agreement that the Board negotiated did not require it to pay the full purchase price for the slogan on the agreement's closing date; rather, under the financing terms of the agreement, the Board agreed to pay NPPC $3 million annually for twenty years. Id. ¶ 71 (explaining that the annual payments were based on an interest rate of 6.75%). The agreement also gave the Board the option to terminate the contract, with a year's notice, in which case, ownership of the Other White Meat trademarks would revert to NPPC. Id. ¶ 102.

On July 18, 2006, the Board requested the Secretary's approval of the terms of the Purchase Agreement. Ex. A to Def.'s Mot. to Dismiss [Dkt. # 10–1]. On September 13, 2006, the USDA sent a letter to the Board stating that it had “reviewed and approve[d] the terms of the Agreement.” Id. Plaintiffs allege that the Secretary approved the final version of the asset purchase agreement sometime between September 25 and October 3, 2006. Am. Compl. ¶ 96. On October 3, 2006, NPPC and the Board executed the agreement, and the Board gained ownership of the four trademarks related to the Other White Meat slogan and design. Id. ¶¶ 95, 97. To date, the Secretary has approved every annual payment under the agreement. Id. ¶ 98.

In March of 2011, the Board requested and received the Secretary's approval to launch a new brand identity for pork, centered around the slogan “Pork: Be Inspired.” Id. ¶¶ 99–100. Concurrently, the Board has designated the Other White Meat as a “heritage brand” and stated that the slogan would no longer be featured in its advertising. Id. ¶ 101. However, the Pork: Be Inspired advertising still uses the Other White Meat trademark logos and design.Compare Branding Guidelines and FPO Logos, Pork Be Inspired, http:// www.porkbeinspired.com/pork_promoBranding.aspx (last visited Sept. 20, 2013) with The Other White Meat Brand, Pork Be Inspired, http:// www.porkbeinspired.com/About_OurHeritageBrand.aspx (last visited Sep. 20, 2013).

II. Procedural History

On September 24, 2012, plaintiffs, the Humane Society of the United States (“Humane Society”) and Harvey Dillenburg brought this suit against the Secretary challenging his approval of the purchase agreement and of the subsequent payments. Compl. [Dkt. # 1] ¶ 1. Plaintiffs amended their complaint to add the Iowa Citizens for Community Improvement (“ICCI”) as a third plaintiff on October 2, 2012. See Am. Compl. ¶¶ 19–22.

Plaintiffs assert three causes of action against defendant under the APA, 5 U.S.C. § 706. Count I alleges that the Secretary's “approval of the Board's expenditure of $60 million ($60,000,000) in checkoff funds for the acquisition of PTOWM pursuant to the terms of the 2006 Asset Purchase Agreement, and each of the subsequent annually...