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United Source One, Inc. v. United States Department of Agriculture, Food Safety and Inspection Service

United States Court of Appeals, District of Columbia Circuit

August 4, 2017

United Source One, Inc., Petitioner
United States Department of Agriculture, Food Safety and Inspection Service, et al., Respondents

          Argued April 20, 2017

         On Petition for Review from a Decision of the Food Safety and Inspection Service of the United States Department of Agriculture

          Paul H. Gardner argued the cause for the petitioner. Andrew H. Baida and David M. Wyand were with him on brief.

          Joseph F. Busa, Attorney, United States Department of Justice, argued the cause for the respondents. Benjamin C. Mizer, Principal Deputy Assistant Attorney General at the time the brief was filed, and Mark B. Stern, Attorney, were with him on brief.

          Before: Henderson and Kavanaugh, Circuit Judges, and Sentelle, Senior Circuit Judge.


          Karen LeCraft Henderson, Circuit Judge.

         Under the Federal Meat Inspection Act of 1907 ("FMIA"), 21 U.S.C. §§ 601 et seq., and implementing regulations, the Food Safety and Inspection Service ("FSIS"), an agency of the United States Department of Agriculture ("USDA"), is charged with ensuring, inter alia, that certain commercial meat products are not misbranded. If the FSIS determines that a meat product's labeling is "false or misleading in any particular, " 21 U.S.C. § 607(e), it can prohibit its use. Pursuant to that authority, the FSIS determined that the packaging used by United Source One, Inc. ("US1"), a meat exporter, was misbranded because its label included the FSIS inspection identification number of its supplier without the latter's permission. For the reasons that follow, we deny US1's petition for review.

         I. Background

         Regulatory Landscape

         The Congress enacted the FMIA to protect "the health and welfare of consumers . . . by assuring that meat and meat food products distributed to them are wholesome, not adulterated, and properly marked, labeled, and packaged." 21 U.S.C. § 602. To that end, the FMIA mandates inspection of certain commercial meat products as well as the facilities-referred to as "official establishments"[1]-where those products are handled. Id. § 608. By regulation, the FSIS carries out that mandate. 9 C.F.R. § 300.2(b)(1). "[D]ay or night, " FSIS inspectors have access to an official establishment to ensure that it operates in sanitary conditions and that its meat is not "adulterated." 21 U.S.C. § 606(a). Commercial meat products that meet the FMIA's standards are marked as "[i]nspected and passed." Id. At 9 C.F.R. § 312.2, the following example of an "official mark" of inspection appears:

         (Image Omitted)

         Each FSIS inspection mark includes a unique establishment number[2] that identifies the product as having been "prepared" in the facility to which the establishment number belongs. 9 C.F.R. § 305.1(a) ("An official number shall be assigned to each establishment granted inspection . . . [and] shall be used to identify all inspected and passed products prepared in the establishment."). An authorized FSIS inspection mark ordinarily must appear both on the "immediate container" of a commercial meat product, for example, vacuum packaging, id. § 317.1, and on any external container, for example, a shipping box, see id. § 316.13.

         Ordinarily, an official establishment does not ship its products directly to the end-use consumer. Instead, an official establishment ships meat to a "re-boxing" facility, a middleman operation that repackages and resells meat, often under a different brand name. Because the re-boxer itself does not slaughter meat, it is not subject to the FMIA's mandatory inspection requirements. See 21 U.S.C. § 608 ("The Secretary shall cause to be made . . . such inspection of all . . . establishments in which amenable species are slaughtered and the meat and meat food products thereof are prepared for commerce . . . ."). Nonetheless, the Agricultural Marketing Act of 1946 ("AMA"), 7 U.S.C. §§ 1621 et seq., and implementing regulations provide that a re-boxing facility may voluntarily pay for and obtain FSIS identification services.[3] See 9 C.F.R. § 350.3. FSIS Directive 12, 600.1, adopted pursuant to the AMA, provides guidance on the implementation/enforcement of those services. See FSIS Directive 12, 600.1, Voluntary Reimbursable Inspection Services (U.S.D.A. 2007) (hereinafter "Directive 12, 600.1"). Once the re-boxer participates, the FSIS inspection works, inter alia, to "ensure that the identity of federally-inspected and passed meat . . . is maintained throughout the division of such meat . . . into smaller portions, its combination into larger units, or its repackaging and relabeling." Id. at 3. If the FSIS "determine[s] that the identity [of the repackaged meat] has been maintained, " that is, the meat has not been adulterated once it has passed its official establishment inspection, the FSIS "mark[s] such portions or units [of the repackaged meat] with the marks of Federal inspection." 9 C.F.R. § 350.3(a)(1).

         As with an official establishment, the FSIS assigns each re-boxing facility its own, unique establishment number that is included as part of the inspection mark on the re-boxer's label. See Directive 12, 600.1 at 6 ("If the [re-boxing] facility meets the requirements for the requested service(s), the [FSIS] will request the next available [establishment] number through the Resource Information System . . . [and] assign the number to the facility . . . ."). Unlike an official establishment's establishment number, however, which begins with "P" or "M, " etc., to designate that it is subject to poultry or meat inspections, respectively, see supra 4 n.2, a re-boxer's establishment number begins with "V" to indicate that the FSIS inspection conducted there is pursuant to the AMA inspection regime. See Food Safety Inspection Serv., FSIS Meat, Poultry and Egg Product Inspection Directory Legend for Establishment Numbers and Directory Search Guidance 1 (2017); accord JA 15, 69-70 (indicating US1's establishment number is "V21467"). Nevertheless, FSIS Directive 12, 600.1 provides that a re-boxer may use its supplier's establishment number on its label if certain conditions are met:

Whenever labeling with the originating official establishment number is used by [a re-boxing] facility (i.e., labeling depicting the official number of the establishment that produced the product), inspection program personnel will verify that the [re-boxing] facility code marks the product in a manner that will clearly indicate that the product was last handled and labeled at the [re-boxing] facility. The [re-boxing] facility must maintain records of label transfers and records of products labeled or relabeled at ...

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