Ranchers-Cattlemen Legal Fund Challenges USDA Electronic Ear-Tag Rule

At a Glance

• In one of the latest post-Chevron regulation challenges, the Ranchers-Cattlemen Action Legal Fund’s (R-CALF) new lawsuit against USDA’s Animal and Plant Health Inspection Service seeks to overturn the 2024 promulgation of the livestock electronic identification ear-tag rule.
• The lawsuit is poised to provide new insight into whether a broad grant of statutory authority will be enough to uphold nuanced regulations on specific topics — in this case, the use of new technology to purportedly enhance animal disease traceability.
• R-CALF’s lawsuit may also provide insight on the limits of the Regulatory Flexibility Act for small operations.

Ranchers-Cattlemen Action Legal Fund v. USDA

On October 30, 2024, a group of plaintiffs headed by the Ranchers-Cattlemen Action Legal Fund (R-CALF), filed a complaint (Case No. 5:24-cv-5085 (D.S.D.)) against the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS), challenging a newly promulgated rule requiring electronically readable electronic identification (EID) ear tags for certain cattle and bison transported across state lines. This new version of the rule replaces a previous version that allowed both visual-only and electronically readable ear tags. 89 Fed. Reg. 39550.

R-CALF argues that APHIS’s promulgation of the 2024 Rule: (1) exceeded its statutory authority because the authorizing statute does not contemplate the mandatory use of EID ear tags under pain of administrative enforcement; (2) was arbitrary and capricious because mandatory EID ear tags are not necessary to trace disease as the statute requires; and (3) violated the Regulatory Flexibility Act (RFA) for small operations (the majority of operations) because APHIS’s Final Regulatory Flexibility Analysis did not show the true cost nor the true marginal benefit of the program.

The 2024 Rule finds its authority in 7 U.S.C. § 8305, which permits USDA to regulate interstate movement of livestock “if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction or dissemination of any pest or disease. . . .” (emphasis added). USDA has broad authority to “promulgate such regulations, as . . . necessary to carry out” its statutory mandate. 7 U.S.C. § 8315.

Invoking Loper Bright v. Raimondo and Relentless v. Dep’t of Commerce, the Supreme Court case that overturned the principle of Chevron deference, the plaintiffs argue that the 2024 Rule both exceeds the statutory authority and is arbitrary and capricious, because the elimination of visual-only tags is not “necessary” to trace diseases. The plaintiffs note that only 11% of cattle and bison are traced by APHIS, that there is no infrastructure to support the use of EID tags, and that errors in tracing are more likely because EID tags have 15-digit identification numbers whereas visual-only tags had 9 digits. Using all of these factors and more, the plaintiffs argue that mandatory EID tags do not increase the efficacy of animal disease traceability. Moreover, they argue that the six-month enforcement grace period is impossible to meet, because the lack of availability of EID tags is due to supply-chain delays. The plaintiffs also advance an interesting argument that APHIS cannot enforce any administrative penalties for violations of its regulations, because the authorizing statute for penalties (7 U.S.C. § 8313(a)) permits APHIS to seek “criminal penalties, including fines and imprisonment, for knowing violations of “this chapter” (i.e., the statute), but not the regulations it promulgates to enforce the chapter.

Finally, the complaint argues the regulation violates the RFA, which requires administrative agencies to consider the economic effect of their regulations on small entities and publish certain analyses before promulgating a rule. In support of that count, the plaintiffs offer that the cost of the program is potentially more than APHIS’s per-operation estimate and that APHIS failed to provide data showing that “most small producers” would not be affected by the 2024 Rule, since they do not engage in interstate commerce.

Analysis

This lawsuit is part of a larger trend of lawsuits contesting broad grants of statutory authority where the underlying statute does not specifically provide for the method of enforcement. (Association of Christian Schools International v. DOL is another example.)

It is unclear whether the plaintiffs will prevail, as Loper Bright did not announce a clear standard or test, only that a court “must exercise [its] independent judgment in deciding whether an agency has acted within its statutory authority.” Therefore, it is one of many post-Chevron lawsuits poised to determine exactly how far a court’s “independent” judgment can go.

We will watch this case for summary judgment and appeals.

Legal clerk Yusuf Qureshi contributed to this update.