Final Decision on Economic Analysis Report of Organic Livestock and Poultry Practices Rule and Summary of Comments on the Economic Analysis Report; The Lawsuit Continues

Quite some time ago, we blogged on the organic livestock and poultry practice (OLPP) rule.  The rule established minimum indoor and outdoor space requirements for chickens based on the type of production and stage of life, as well as added new provisions for livestock handling and transport for slaughter.   After years of work, a final rule was published the day after President Trump’s inauguration, with an effective date two months later.  However, USDA delayed the effective date several times, and ultimately withdrew the rule because the agency concluded that it did not have the authority to issue the rule and it also determined that the costs outweighed the benefits.   The Organic Trade Association (OTA) sued USDA claiming that USDA’s basis for withdrawal was unfounded.

Fast forward to Oct. 31, 2019, when the OTA filed a motion for summary judgment.  In its motion for summary judgment, OTA argued, among other things, that the regulatory impact analysis (RIA) of the withdrawal rule contained serious flaws.  USDA had acknowledged that the RIA of the OLPP contained errors.  When it issued the withdrawal rule, it issued a revised (or withdrawal) RIA which corrected several main errors of the OLPP RIA and concluded that benefits of the OLPP had been overstated.

Rather than responding to the motion for summary judgment, USDA requested that the Court stay the proceedings and remand the case to USDA to allow USDA to correct the RIAs.  Upon review of OTA’s expert’s analysis, USDA had determined that the withdrawal RIA still contained errors and it requested remand to make sure that the impact of those errors would be addressed; it wanted to correct and clarify the record in a manner that would permit judicial review.

Recognizing the value of a complete and correct record, the Court granted the motion (over the opposition of OTA) and set a deadline of 180 days, or September 8, 2020, for USDA to publish a final rule fully explaining its updated cost/benefit analysis.

On April 23, 2020, USDA published the Economic Analysis Report (Report) reviewing and evaluating the OLPP RIA and the withdrawal RIA.  The Report identified several additional errors in the OLPP RIA which had been carried forward to the revised RIA.  USDA requested comments on the Report.

On September 17, 2020, USDA published its final decision, announcing that it had found nothing in the comments to the Report that  would cause it to reject or modify the findings of the Report, and affirming the findings of the Report which discredit both the OLPP RIA and the withdrawal RIA.

Based on the Report and comments to the Report USDA concluded that “the [flawed OLPP] RIA does not support promulgation of the OLPP Rule.”  It further concluded that “[i]mplementing the OLPP rule based on such a flawed economic analysis is not in the public interest.”  Because the parts of the final withdrawal rule that do not rely on the flawed revised RIA remain intact, USDA also concluded that no further action is needed for that RIA.  Now that the administrative record has been “corrected,” the lawsuit can proceed.