[00:00:01] Speaker 05: Good morning, Your Honors, and may it please the Court. [00:00:03] Speaker 05: George Kimbrell, on behalf of the appellants, with me at Council table is my colleague, Amy Vansant, and we have several of our clients here in the courtroom with us today. [00:00:12] Speaker 05: I'd like to reserve five minutes for rebuttal, and I'll watch my clock. [00:00:15] Speaker 00: All right. [00:00:15] Speaker 00: Thank you so much. [00:00:17] Speaker 05: This case is about food labeling standards and the consumer's right to know. [00:00:20] Speaker 05: But at its core, it's an administrative law case about whether an agency rulemaking complied with Congress's directive and the basic core standards of the Administrative Procedure Act. [00:00:30] Speaker 05: The district court correctly held that the agency erred in one way, but let the agency off the hook in two other important ways. [00:00:37] Speaker 05: There are three issues presented on appeal. [00:00:40] Speaker 05: First, the agency's treatment of highly refined bioengineered foods was arbitrary and capricious, contrary to both the Disclosure Act as well as the APA. [00:00:50] Speaker 05: Second, the agency's rationale for barring the similar common terms genetically engineered and genetically modified was unsupported by the record. [00:00:59] Speaker 05: And third, the district court erred in its remedy decision in failing to vacate the parts of the Disclosure Act rules that it held unlawful and remanded. [00:01:10] Speaker 05: I'd like to start first with the highly refined foods issue. [00:01:13] Speaker 05: Let's start with the text of the Disclosure Act itself and the definition of what bioengineered food is. [00:01:19] Speaker 05: Our argument here is very much based on the plain text. [00:01:21] Speaker 05: The definition at 7 USC 1639, subsection 1, is a bioengineered food is any food that, quote, contains genetic material that has been modified. [00:01:34] Speaker 05: Now, what the rules do is they tether whether a food is bioengineered to whether that modified DNA is detectable or not. [00:01:44] Speaker 05: Detectability is not the same thing as contains. [00:01:47] Speaker 05: Contains, not defined in the statute. [00:01:49] Speaker 05: We give it its common meaning. [00:01:50] Speaker 05: It means to have within. [00:01:53] Speaker 01: You know, from a common sense point of view, it seems odd to say that something's there when it's not detectable. [00:02:01] Speaker 05: Judge Collins, I think these detectability tests basically can never show absence, which is what the rules demand and what the plain text demands. [00:02:09] Speaker 05: They just show presence to a level of detection, which, and here, of course, another big issue we'll talk about, the agency didn't really set a level of detection. [00:02:16] Speaker 01: Well, why isn't that a reasonable reading? [00:02:18] Speaker 01: If the statute says that it contains something, [00:02:21] Speaker 01: And then through, you know, the best available tests, you can't detect it, you can't tell that it's there. [00:02:28] Speaker 01: In what sense does it contain it in a common sense, normal understanding of the word contain? [00:02:34] Speaker 01: If I can't tell it's there, [00:02:36] Speaker 01: How is it there? [00:02:38] Speaker 05: Two answers, Judge Collins. [00:02:39] Speaker 05: Number one, the tests can detect the material in highly refined foods. [00:02:42] Speaker 05: And we have several sites in the record that show that now current tests, not just future tests, can. [00:02:47] Speaker 05: There's varying sensitivity, everything from 1% to 0.05%, 20 times more sensitive. [00:02:54] Speaker 05: And second, again, that's just not what the scientific inquiry of these detectability tests is. [00:03:00] Speaker 05: We have a great quote in the further excerpts of record that I think is the best statement of this by a prominent committee of scientists. [00:03:07] Speaker 05: It's at FER 108. [00:03:10] Speaker 05: And they say, scientists know that it is not possible to declare a sample to be free of the analyte here bioengineered content. [00:03:18] Speaker 05: All one can do is declare the bioengineered content to be below a limit of detection. [00:03:23] Speaker 05: So that's not the same as absence, just because you can't see it. [00:03:26] Speaker 01: OK. [00:03:27] Speaker 01: So even if it is a level of detection, and that is a departure from the contain that's in the definition, then why isn't that covered by their authority to determine the amount of a [00:03:48] Speaker 01: engineered substance that may be present in food, in order for the food to be a bioengineered food. [00:03:53] Speaker 01: Congress seemed to give them the authority to say, here's a level, below that level, we don't care. [00:04:02] Speaker 01: It doesn't. [00:04:02] Speaker 01: Why does it have to be a number? [00:04:03] Speaker 01: Can't they just say detectability below that? [00:04:06] Speaker 01: We don't care. [00:04:06] Speaker 01: And that fits within that. [00:04:08] Speaker 01: Tell me why that's wrong. [00:04:09] Speaker 05: I'm glad you asked, Judge Collins, for reasons to that. [00:04:13] Speaker 05: So the first and most important legal one, I think, is that it's a post hoc rationale. [00:04:17] Speaker 05: In other words, if you look at the rulemaking, the agency nowhere relies on the provision that your honor mentions. [00:04:23] Speaker 05: to enact the regulation that we're discussing, which is 7 CFR 66.9. [00:04:29] Speaker 05: But more importantly, that provision goes to something else entirely. [00:04:32] Speaker 01: Does that mean we're not allowed to look at it as a question of law? [00:04:36] Speaker 05: I think the agency can't rely on it based on, you know, basic APA standards, as I said, under State Farm, you know, v-motor vehicles. [00:04:44] Speaker 05: It's a post-hoc rationale. [00:04:45] Speaker 05: It's not in the rulemaking. [00:04:47] Speaker 05: This court has to affirm based on what the agency says. [00:04:48] Speaker 01: It's not a very long statute. [00:04:50] Speaker 01: Oh, that's right. [00:04:51] Speaker 01: And that provision, just reading the statute, leaps out. [00:04:54] Speaker 01: Right, absolutely. [00:04:55] Speaker 01: As pertinent to this issue. [00:04:56] Speaker 01: It's kind of hard to ignore it. [00:04:58] Speaker 05: If I could give you a few more reasons, in our view. [00:05:01] Speaker 05: I think the most important one is that that's about accidental contamination and incidental contact. [00:05:06] Speaker 05: A lot of times in the food chain, you'll have cross-contamination. [00:05:09] Speaker 01: How do we know that? [00:05:10] Speaker 05: Well, that's how they applied it in the rules. [00:05:12] Speaker 05: There's a different rules section where they did it. [00:05:13] Speaker 01: But how do we know that from the text of it that it's about? [00:05:15] Speaker 05: I think it's the only way to marry the contains language and the intent of Congress there with, so you've got intentional use, right, and you have source traceability for that. [00:05:24] Speaker 05: This is how the private industry has done. [00:05:26] Speaker 05: absence labeling like non-GMO labeling for decades now as well as what they do internationally. [00:05:32] Speaker 05: And then you have accidental or incidental contamination that can't be avoided. [00:05:36] Speaker 05: And that setting of a threshold is for that second category. [00:05:39] Speaker 05: But more importantly, two more points if I might, is that [00:05:42] Speaker 05: even in 66.9 on detectability, they actually didn't set an amount, Judge Collins. [00:05:48] Speaker 05: I think if they had actually said, here's an amount, that'd be a very different rule, right? [00:05:52] Speaker 05: And we'd have this discussion and I'd say they could apply it or they can't, but they didn't set an amount. [00:05:56] Speaker 05: They said to the manufacturers, use the test that you think is sufficient. [00:06:00] Speaker 05: That's not an amount. [00:06:01] Speaker 05: And finally, and this is, I think, also critical, in the record, they actually expressly refused to apply that statutory provision to intentional use. [00:06:09] Speaker 05: And I have a site for you that it's in our reply brief, but it's 83 Federal Register 658-824. [00:06:21] Speaker 05: It's 83 Federal Register 65824. [00:06:25] Speaker 05: And there the agency said, allowing entities to avoid disclosure despite the intentional presence of B.E. [00:06:31] Speaker 05: substances in food does not provide consumers the information they desire. [00:06:34] Speaker 05: And so they're saying we're not setting the amount. [00:06:37] Speaker 05: We're not using that set amount provision for intentional use. [00:06:40] Speaker 05: It's only for accidental. [00:06:41] Speaker 05: So I think those are the key answers there, why that doesn't apply here. [00:06:46] Speaker 05: But going back to the statutory scheme, in addition to the definition, another really important part is the fact that this scheme is supposed to provide consumers information, not just about bioengineered food, but any food that may be bioengineered. [00:06:58] Speaker 05: Now, how can you square detectability with a scheme that's supposed to cover maybe bioengineered as well? [00:07:04] Speaker 05: It's much broader than detectability, so we have other evidence in the scheme. [00:07:08] Speaker 05: Again, there's no express exclusion or language. [00:07:11] Speaker 05: Nowhere does Congress say detectability. [00:07:13] Speaker 05: Instead, it says contains, and it says maybe bioengineered. [00:07:16] Speaker 05: And it did know how to write exclusions. [00:07:18] Speaker 05: As you know to Judge Collins, it's a short statute and there are some exclusions in it for restaurant food, for example, from feed from animals that are fed genetically engineered grains. [00:07:27] Speaker 05: So if it wanted to make this about detectability, it could have. [00:07:30] Speaker 05: And the reason it didn't is because the consumer interest here in this law has nothing to do with whether or not you can see the modified DNA in these products. [00:07:39] Speaker 05: Consumers are interested about this because they want to know more about how the crop is produced. [00:07:44] Speaker 05: That's the information they want, and that has nothing to do with whether you can see it in the final product or not. [00:07:49] Speaker 05: The last point I would make on the definition is that the definition itself uses past tense language. [00:07:54] Speaker 05: It says genetic material that has been modified, which again indicates this is not just about the final product. [00:08:00] Speaker 05: Undisputably, the wrong ingredients have been modified when they go into the product. [00:08:06] Speaker 05: The legislative history also supports us on this. [00:08:09] Speaker 05: USDA went, testified to Congress. [00:08:12] Speaker 05: The attorney general of the agency, the defendant agency, said to Congress, we're going to cover these foods. [00:08:17] Speaker 05: We have the authority. [00:08:18] Speaker 05: Now in the final rule, they're saying the exact opposite. [00:08:21] Speaker 05: We don't have the authority. [00:08:22] Speaker 05: We're gonna define them out of bioengineered foods. [00:08:25] Speaker 05: And finally, I would say, it's not just my clients that believe that this is the intent of the law and critical to it. [00:08:33] Speaker 05: If you look at volume two of the ERs here, [00:08:36] Speaker 05: It is a venerable who's who of the biggest food corporations in America that all supported the inclusion of refined bioengineered foods in this standard. [00:08:46] Speaker 05: Coca-Cola, presumably major food and beverage manufacturer, that's at ER 245. [00:08:52] Speaker 05: They say it's critical and essential that refined bioengineered foods be included in the standard. [00:08:58] Speaker 05: Mars, Hershey's, [00:09:00] Speaker 05: Campbell Soup, Kraft, Heinz, the Grocery Manufacturers Association, the Frozen Food Institute, the Snack Food Institute, and it goes on. [00:09:09] Speaker 05: And why did they say that? [00:09:11] Speaker 05: For the same reason I just gave. [00:09:12] Speaker 05: In their comments, when you read them, they say consumers want this information because they want information about how the food is produced, and they don't care whether or not you can see it in the DNA or not in the final product based on the refining. [00:09:26] Speaker 05: There is a way to do this, and I would say looking at 66.9 Section 1, the source tracing is the way to do this, as I mentioned before. [00:09:37] Speaker 05: That's records of what your ingredients are. [00:09:39] Speaker 05: So even if these two detectability sections are not proper under the statute, there is a way to do this. [00:09:46] Speaker 05: I will say our fallback argument on Claim 1 has to do with [00:09:50] Speaker 05: even if this is allowable, detectability is allowable under the statute, it's still arbitrary and capricious the way they did it here, for the reason I mentioned earlier. [00:10:00] Speaker 00: Because of the records? [00:10:01] Speaker 00: Because it's up to each company to keep the records of this? [00:10:05] Speaker 00: Absolutely, Judge. [00:10:07] Speaker 00: What's the enforcement mechanism that determines whether or not it contains [00:10:12] Speaker 00: bioengineered food. [00:10:14] Speaker 05: Absolutely, Judge Wardlaw. [00:10:15] Speaker 05: Even if detectability is allowable under the Disclosure Act, the way they did it, you can have the same product, two different companies, they used two different tests, two different levels of detection, because the agency didn't set a level of detection or a threshold here for detectability. [00:10:28] Speaker 05: and you're going to have two different results. [00:10:31] Speaker 05: Same product, two different results. [00:10:33] Speaker 05: Or think about two different sodas with the same genetically engineered corn syrup in it. [00:10:37] Speaker 05: One company uses a sensitive test, one company uses a not sensitive test, one company labels, the other doesn't. [00:10:43] Speaker 05: It's an uneven playing field and it's not the uniform standard for consumers that Congress envisioned. [00:10:50] Speaker 05: And finally, I would say the other reason it's arbitrary and capricious is what I said before, Judge Collins, is that the record evidence now shows you can see the DNA in these highly refined foods. [00:11:01] Speaker 05: And we have a number of sites for that in our reply brief, the best one being SER-235 and ER-803. [00:11:10] Speaker 05: Now, I want to move to the second argument with regards to similar terms. [00:11:15] Speaker 05: The key here is that Congress didn't legislate in a vacuum. [00:11:20] Speaker 05: If we were starting from scratch here, that would be one thing, if there were no known terms for this subject. [00:11:25] Speaker 05: But we're not, and Congress doesn't legislate in a vacuum. [00:11:28] Speaker 05: For two and a half decades, this controversy has been known in well-known terms that have permeated American culture, genetically engineered and genetically modified. [00:11:37] Speaker 05: And so the question before the court is simply whether the agency's given rationale in the record [00:11:42] Speaker 05: were supported by the record evidence. [00:11:43] Speaker 05: The two rationale that they gave for barring those terms and going only with bioengineered were it would lessen consumer confusion. [00:11:51] Speaker 01: Did they bar the term? [00:11:52] Speaker 01: I mean, they require that these terms be used, but did they bar somebody from putting something else on the product? [00:11:59] Speaker 05: Judge Collins, for the standard, the only way you can comply with the on-text or the symbol is bioengineered. [00:12:04] Speaker 05: So yes, like if you wanna use a symbol, and they did propose early in the rulemaking a symbol that would be GMO in a circle. [00:12:12] Speaker 05: We have that in the excerpts of record as well. [00:12:14] Speaker 05: So this is a new position for them. [00:12:16] Speaker 05: But yeah, the only way you can comply on-text, it says made with bioengineered ingredients or the circle with the BE in it. [00:12:22] Speaker 05: You can't use the other terms. [00:12:23] Speaker 01: You have those, but can you put elsewhere on the product, something else if you want? [00:12:27] Speaker 01: Voluntarily? [00:12:28] Speaker 01: I think so, sure. [00:12:29] Speaker 01: But that's... So it's not bored in that sense. [00:12:32] Speaker 01: Not like it's... You may not use that term. [00:12:34] Speaker 01: It cannot show up. [00:12:35] Speaker 01: I agree. [00:12:36] Speaker 01: It's not... It's bored in the sense that it's not adequate to comply. [00:12:40] Speaker 05: Fulfilled the standard. [00:12:41] Speaker 05: Absolutely. [00:12:42] Speaker 05: I will say, though, we had voluntary GMO labeling for several decades and nobody labeled. [00:12:46] Speaker 05: And manufacturers are very... That package space is precious. [00:12:50] Speaker 05: So I think it is unrealistic that there will be, and frankly more confusing for consumers, that they could put extra verbiage on there rather than just have one term. [00:12:58] Speaker 01: The problem is Congress used the term bioengineered. [00:13:02] Speaker 01: I mean, they do have references to other terms in the statute, but the primary term used is bioengineered. [00:13:10] Speaker 01: If they legislate against a background where everyone was using different language, why did they do it this way? [00:13:16] Speaker 05: Yeah, I mean, they included the term, and it's undisputable that's one of the options. [00:13:20] Speaker 05: There's no legislative history to answer your question. [00:13:23] Speaker 01: But it's kind of hard to fault them from just using the language Congress used. [00:13:28] Speaker 05: If you look at the legislative history, overwhelmingly, the legislators themselves, this is at page 51 of our opening brief, used genetically engineered and genetically modified. [00:13:36] Speaker 05: So yes, they put bioengineered in the statute. [00:13:38] Speaker 05: They also put similar terms in the statute. [00:13:40] Speaker 05: And this is important. [00:13:40] Speaker 05: They grouped them several times in the statute. [00:13:42] Speaker 05: using and called them similar terms. [00:13:45] Speaker 05: The most prominent one, the easiest one, is 7 USC 6524, where they say non-bioengineered, non-GMO, and quote, any other similar term, which strongly indicates Congress believed them to be similar terms. [00:13:58] Speaker 05: But I just want to say, with regards to the agency rationales that they gave, our fundamental claim is they're just unsupported by the record. [00:14:05] Speaker 05: Overwhelmingly, the record evidence shows that [00:14:08] Speaker 05: consumers don't understand bioengineered, and they know genetically engineered and genetically modified, contrary to the agency's decision. [00:14:16] Speaker 05: Under APA standards, the USDA has to address that data on use and that consumer confusion presented, and it has to offer an explanation of how the restriction complies with similar terms. [00:14:26] Speaker 05: If USDA had said in the rule [00:14:28] Speaker 05: Okay, they're not similar terms because we think bioengineered means this and genetically engineered means this. [00:14:34] Speaker 05: That would be a very different rule, but they didn't do that. [00:14:37] Speaker 05: They were expressly asked to do that, in fact, and we have those sites in our reply brief, and they said, no, we're not distinguishing them now. [00:14:43] Speaker 05: So a claim to try to distinguish them now is, again, post hoc and can't be made. [00:14:49] Speaker 05: I want to reserve five minutes, but I just on the remedy question. [00:14:53] Speaker 05: I think the core of it is all we're asking this court to do is send it back and ask the district court to look at disruptive consequences with a careful evidence based I the way it should have here. [00:15:04] Speaker 05: It can't be enough. [00:15:05] Speaker 05: for USDA to say, well, we think there's going to be disruption. [00:15:09] Speaker 05: Imagine if I came before you and I said for an injunction, I think there's going to be irreparable harm. [00:15:14] Speaker 05: You need to have evidence when it's your burden in these instances. [00:15:18] Speaker 05: And if you look at ER 21, the district court simply just deferred to their state statement. [00:15:23] Speaker 05: And we could have tailored a vodka to remedy if they needed to get through this inventory in a way that would have addressed that question. [00:15:29] Speaker 05: I'll reserve the rest of my time. [00:15:30] Speaker 00: Thank you. [00:15:39] Speaker 04: Good morning, Your Honors. [00:15:40] Speaker 04: Adam Jed on behalf of the United States. [00:15:42] Speaker 04: May I please the court? [00:15:43] Speaker 04: I'd like to start, if I may, with the colloquy that my friend had with Judge Collins about essentially this posited distinction between detectability and the actual presence of modified genetic material. [00:15:55] Speaker 04: Now, plaintiff's view is sweeping. [00:15:57] Speaker 04: They would have USDA require labeling foods as bioengineered even when testing establishes that the food is not bioengineered. [00:16:04] Speaker 04: Now, Congress easily could have written that statute. [00:16:07] Speaker 04: We know these were the very issues that were subject to debate before Congress. [00:16:11] Speaker 04: Interestingly, I think my friend maybe tipped his hand up at the podium when he said, look, there's a better way to go about this. [00:16:18] Speaker 04: You use source tracing. [00:16:20] Speaker 04: If you look to the preamble of the final rule, you can find this at 2SER37. [00:16:25] Speaker 04: The very same sort of genetic testing that my friend does not want to use to figure out whether something is present [00:16:31] Speaker 04: in an actual food is used for source tracing. [00:16:35] Speaker 04: In other words, you can have, one might call it contamination, you can have sort of mix-ups between genetically modified food and not genetically modified food during transport, during storage. [00:16:45] Speaker 04: And actually, as a case that my friend cites in his reply brief, Monsanto versus Geerson, points out, you can even potentially have cross-contamination in a field where you just have kind of pollination from a genetically modified plant to a non-genetically modified plant. [00:16:58] Speaker 04: What the administrative record points out is actually it's [00:17:01] Speaker 04: the very same sort of genetic testing that I think my friend is opposed to is what accomplishes the very source tracing that he's willing to embrace. [00:17:09] Speaker 01: And so, Judge Collins, I think... It was the answer that this is inevitable. [00:17:13] Speaker 01: You have to use some sort of detectability at some point in the chain. [00:17:19] Speaker 04: Well, it seems like all agree that some kind of detectability is going to be used. [00:17:24] Speaker 04: I mean, unless you somehow managed to grow and [00:17:29] Speaker 01: perfectly quarantine certain kinds of foods, which is just not how the... What I take their argument is that if you know that the input is genetically modified, and then it's refined into a final product, and then on the final product, it becomes undetectable, it still contains, because you know you put it in. [00:17:49] Speaker 04: I mean, you're right. [00:17:50] Speaker 04: I think that is their argument, and I think the point is just because at some point you used a kind of origin source that was genetically modified, it doesn't mean that you've ultimately produced actually, again, to sort of echo the statutory definition, actually contains the modified genetic material. [00:18:07] Speaker 00: Now, to be- To put it in, why doesn't it contain it? [00:18:09] Speaker 00: See, it seems to me, I don't know if the agency actually [00:18:13] Speaker 00: did what Congress told it to do because Congress wanted to have a national standard for disclosure of food that contains bioengineered material. [00:18:27] Speaker 00: And I'm not sure that that's what the agency actually did because it left it in the hands of all the companies to decide is this detectable or not in the final product and put in anything they want. [00:18:42] Speaker 04: Well, Judge Wardlaw, maybe if I could take those two points. [00:18:45] Speaker 00: The food. [00:18:45] Speaker 00: I mean, there's a reason Congress did this act. [00:18:51] Speaker 00: And the question I have is, did the agency actually do what Congress told it to do? [00:18:57] Speaker 04: So I think there are maybe two points nested in there, so if I could take those in order. [00:19:02] Speaker 04: So first, what does the statute actually say and require? [00:19:07] Speaker 04: I think maybe some of the premise of Your Honor's question very much sounds like. [00:19:11] Speaker 04: what was one side of the debate before Congress and is just kind of ultimately the debate that lost out. [00:19:17] Speaker 04: You know, for those members of the panel who are interested in the legislative history, obviously there were members of Congress who thought that it should kind of more categorically require labeling of any food that was made originally from a genetically modified plant. [00:19:29] Speaker 04: And instead, the statute that Congress ended up passing is one that looks at the sort of final food, the food being labeled, and whether that contains the modified genetic material. [00:19:38] Speaker 04: And I wonder if maybe some of this confusion is kind of tied up. [00:19:41] Speaker 04: I guess this is both an answer to Judge Wardley and Judge Collins, is a little bit tied up in this idea that if somehow there was some genetically modified material that went in in the beginning, as I think one of the questions phrased it, that somehow it must still be there. [00:19:53] Speaker 04: So maybe here's a kind of way to think about this. [00:19:57] Speaker 04: And I should, by the way, just sort of say up front, because this has gotten a little bit confused in the briefs. [00:20:02] Speaker 04: The final rule does not actually itself exempt highly refined foods. [00:20:06] Speaker 04: There was a request that USDA do so. [00:20:08] Speaker 04: That's not what USDA did. [00:20:10] Speaker 04: Instead, the final rule just says, look, you can use testing to determine whether genetically modified material is present. [00:20:16] Speaker 04: But intuitively, the agency said, there may be instances where it is not present. [00:20:21] Speaker 04: And the way that I've kind of wrapped my head around this question of basically like where does the DNA go is there are kind of two buckets of ways that you could start with a genetically modified plant, a soybean growing in a field or sugar beet growing in a field or something like that, and you could end up producing a final food item that does not contain DNA from the original plant. [00:20:40] Speaker 04: One kind of category of that is I think it's called isolation. [00:20:44] Speaker 04: It's basically physical removal. [00:20:46] Speaker 04: So if you've got a plant that's out there in the field, it's almost a chemical factory. [00:20:50] Speaker 04: It's going through photosynthesis. [00:20:51] Speaker 04: It's constantly giving off, for example, carbon dioxide, or excuse me, oxygen, just spewing oxygen into the air. [00:20:57] Speaker 04: And it's also manufacturing sugar. [00:20:58] Speaker 04: There's sort of sugar that's slowly accumulating in the plant as a product of that photosynthesis process. [00:21:04] Speaker 04: And there are kind of steps that can be taken basically to isolate the plant stuff, like the cells, the actual plant matter, [00:21:11] Speaker 04: from this chemical, the sugar, if you're talking about a sugar beet or a fat, if you're talking about soybean oil, that was being manufactured by the plant. [00:21:19] Speaker 04: And then kind of separate and aside from the physical isolation, there's also the term, if you're on our looks and the record, is it degrades DNA. [00:21:26] Speaker 04: Essentially, when you process foods at a high enough temperature and with extreme enough pH, it basically obliterates the DNA. [00:21:34] Speaker 04: It's like water could be separated into hydrogen and oxygen. [00:21:37] Speaker 04: And once you've done that, you've got hydrogen, you've got oxygen, you just don't have water left anymore. [00:21:41] Speaker 04: And so there are a number of studies that have said that these kind of extreme processing steps basically kind of in some combination, and it depends on the process, kind of physically get rid of the plant matter and just obliterate the DNA that's there. [00:21:53] Speaker 01: The agency is allowing different companies to use different detectability methods on the same product, resulting in exactly the same underlying physical thing being labeled or not labeled based on which test, which company uses? [00:22:11] Speaker 04: Yeah, so there's, I guess there's kind of a theoretical answer to that concern and a practical answer to that concern. [00:22:17] Speaker 04: It is always theoretically possible that if you used two different tests and somehow one test was a little more sensitive than another and somehow a food happened to fall kind of right in between, that you could end up with essentially that kind of philosopher's example that my friends offer. [00:22:33] Speaker 04: And to be very clear, this is spelled out in the regs, if someone knowingly did so, in other words, if a company kind of knew that there was modified genetic material in there and kind of tried to duck it, then they would still need to label it. [00:22:44] Speaker 04: But the practical answer, your honor, is threefold. [00:22:47] Speaker 04: One, I think just if you look at the standards that are actually set out in the rule for what kind of test you need to use, contrary to my friend's assertion, the standards aren't just kind of pick whatever test you want, watch on YouTube, had a test for DNA and use that. [00:23:01] Speaker 04: Instead, there are various criteria that are set up for the test. [00:23:03] Speaker 04: And I take my friends to complain, and particularly in some detail for the first time in the reply brief, that basically that the agency didn't set a specific parts per million threshold. [00:23:14] Speaker 04: And this is just kind of the classic rule standards debate in law. [00:23:18] Speaker 04: The agency laid out a bunch of standards. [00:23:19] Speaker 04: It needs to be lab quality. [00:23:21] Speaker 04: It needs to be fit for purpose. [00:23:22] Speaker 04: It needs to be consistent. [00:23:23] Speaker 04: It needs to be accurate. [00:23:24] Speaker 04: And as I understand it, the reason that the agency essentially chose the standard side of the rule standards debate is there are different sorts of criteria that you may need to use for different sorts of food. [00:23:35] Speaker 04: In other words, to have sort of some confidence that there is not any modified genetic material in some kinds of food, you might need something that's like a little more sensitive than others. [00:23:44] Speaker 04: And what the agency also said, you can find that at 2SER 20 to 21 and 2SER 47. [00:23:50] Speaker 04: that the agency would put out further guidance. [00:23:53] Speaker 04: And to the extent that the plaintiff's complaint just may reduce to the idea that either they think that the agency's guidance needs to be more detailed, or somehow they're unhappy with how this is playing out in the real world, if maybe they think the agency is not enforcing the rules in the way that they think the agency should be enforcing the rules, none of that would go to the validity of the rule itself. [00:24:13] Speaker 04: That would just be a separate quarrel with what the agency has subsequently done. [00:24:17] Speaker 04: And again, just to take this back to an earlier answer that I gave your Honors, [00:24:20] Speaker 04: the plaintiffs seem to be willing to accept all this because they seem to be willing to accept that they're going to rely on supply chain tracking, which itself makes use of some of these. [00:24:28] Speaker 01: But if we actually did have a situation where it became known, and it's not just a philosopher's example, that company A on basically the same underlying product is using one test and labeling it, and company B is using another test and is not labeling it, would the agency do anything with that situation, or would that just [00:24:49] Speaker 01: be allowed to go forward under this regulation. [00:24:51] Speaker 04: Look, you know, I obviously sort of can't get ahead on the agency of sort of how they would address this. [00:24:55] Speaker 04: I suspect, but this is just my speculation. [00:24:57] Speaker 00: The point is that if the regulations allow them to do what Judge Collins is saying, then the agency has not established a mandatory national standard. [00:25:11] Speaker 04: So I think that's mistaken, and I think maybe I'm starting to understand that this may all be sort of proceeding from a somewhat mistaken premise about the statute. [00:25:18] Speaker 04: So maybe if I could just explain that for a moment. [00:25:21] Speaker 04: And Judge Worley, I think this will maybe both answer your question and will also be responsive to the colloquy that Judge Collins had with my friend about the provision that says the agency can set kind of thresholds. [00:25:32] Speaker 04: So if Your Honors just look at the statutory command to the agency, Judge Worley, I think this is the one that you're referring to. [00:25:39] Speaker 04: It says that the agency should establish a standard for foods with respect to foods that are bioengineered or may be bioengineered. [00:25:48] Speaker 04: Now, I think my friends first are reading a standard with respect to foods that are bioengineered or may be bioengineered to mean must label any food that is bioengineered or may be bioengineered, rather than this is essentially the kind of field that the agency is meant to establish a standard for. [00:26:06] Speaker 01: And then they're further... But that would seem to suggest that [00:26:09] Speaker 01: We've decided not to have it. [00:26:11] Speaker 01: That's a standard with respect to. [00:26:13] Speaker 01: I mean, it's got to be more than that. [00:26:15] Speaker 04: Well, Judge Collins, if they just threw up their hands and said, we've just chosen to have no rule, that may very well be arbitrary and capricious. [00:26:21] Speaker 00: And I'm very happy to- But if they just deferred to corporate America and said, OK, you can just regulate yourselves, then the agency has not established a national standard itself. [00:26:33] Speaker 04: Well, again, Judge Werla, I think your question is almost a kind of perfect recitation of the arbitrary and capricious standard. [00:26:39] Speaker 04: If an agency just threw up its hands and said, we've just chosen not to regulate this scenario, do whatever you want to do, it seems like there'd be an extremely strong argument that that was arbitrary and capricious. [00:26:48] Speaker 04: If instead the agency does what it did here and said, look, there's a lot of accumulated science about this, there are international standards, we're already using genetic testing to track supply chains and to make a point that the district court honed in on [00:27:01] Speaker 04: We don't want to demand the impossible and, of course, to demand what the plaintiffs are asking for. [00:27:06] Speaker 04: It would essentially require implementing the statute in a way that Congress explicitly chose not to write the statute. [00:27:15] Speaker 04: And in fact, actually, it would read the statute to mean the very opposite of what my friends. [00:27:19] Speaker 00: Mr. Jed, I have to let you know we're under time constraints today. [00:27:21] Speaker 00: Oh, of course. [00:27:22] Speaker 00: I apologize. [00:27:22] Speaker 00: So we're not going to give extra time to your colleague. [00:27:24] Speaker 04: Of course, I apologize, Your Honor. [00:27:26] Speaker 00: If I could just- Okay, but remember we have- Yes, I know, but just one quick question. [00:27:30] Speaker 01: Can you respond to the objection that the agency waived the reliance on that threshold provision because it wasn't cited in the regulations? [00:27:42] Speaker 04: Yes, Judge Collins, I appreciate the opportunity to do that. [00:27:44] Speaker 00: We are not saying- Not giving extra time to your colleague. [00:27:48] Speaker 00: Go ahead. [00:27:49] Speaker 04: We are using it for a statute as a whole argument. [00:27:53] Speaker 04: What we're saying is that my friend should not read with respect to as requiring labeling of absolutely everything and should not read maybe bioengineered to be if there is any theoretical possibility that it's bioengineered. [00:28:05] Speaker 04: That would be an anomalous reading of the statute in a vacuum, but it's particularly anomalous to read those provisions. [00:28:10] Speaker 04: in such a highly demanding way where the statute elsewhere, including in the provision, Judge Collins, that you were just asking about, freely allows for having some modified genetic material in food. [00:28:19] Speaker 04: Thank you, Your Honors. [00:28:20] Speaker 00: Thank you, Mr. Jed. [00:28:21] Speaker 00: Okay, Ms. [00:28:22] Speaker 00: McCabe. [00:28:24] Speaker 03: Good morning, Your Honors. [00:28:25] Speaker 03: May it please the court, Bridget McCabe, on behalf of the intervener appellees, the two beet sugar organizations. [00:28:31] Speaker 03: Let me just start by adding that the statute contains an enforcement provision through which the agency can enforce these [00:28:39] Speaker 00: What provision is that? [00:28:41] Speaker 03: It's 7 USC, section 1639, subsection G. G, okay, I'm not sure. [00:28:51] Speaker 03: And it's through this provision that the agency can regulate the way that the companies are using the test to exempt themselves from the mandatory requirement. [00:29:00] Speaker 02: 1639 with a letter after it or not? [00:29:03] Speaker 02: Yes, subsection G. [00:29:05] Speaker 02: Is it 1639? [00:29:06] Speaker 02: Oh, I'm sorry. [00:29:08] Speaker 03: Yes, 1639B. [00:29:09] Speaker 03: B? [00:29:10] Speaker 03: B, as in boy, subsection G. All right. [00:29:15] Speaker 03: Thank you, Your Honor. [00:29:18] Speaker 03: It contains a definition of a prohibited act, record keeping, examination, audit, and audit results. [00:29:26] Speaker 03: I know my time is brief, so I'm just going to forge ahead. [00:29:28] Speaker 03: But please let me know if there's any questions. [00:29:31] Speaker 03: We wanted to appear today to highlight just a couple of brief points. [00:29:34] Speaker 03: And one is that the beet sugar product is a great example of how the final rule is rationally related to the science. [00:29:44] Speaker 03: And that is because the process by which we take a sugar beet crop and come up with sugar [00:29:52] Speaker 03: is such a harsh process, it removes all traces of genetic material. [00:29:57] Speaker 03: It converts the crop to refined white sugar, and at the end, the product contains no trace of genetic material. [00:30:04] Speaker 03: And so the agency had a record that was replete with science indicating this. [00:30:11] Speaker 03: They came up with a rule that's rationally related to that science, to the studies in the record, and they issued a final rule that accounts for this, that there are products [00:30:20] Speaker 03: that might begin with a crop, but you end up with a product that doesn't contain any genetic material. [00:30:27] Speaker 03: This isn't a derived-from standard. [00:30:29] Speaker 03: It's a contained standard. [00:30:30] Speaker 03: And the appellants were involved in the legislative process. [00:30:34] Speaker 03: They pushed for a derived-from standard that was considered and rejected. [00:30:39] Speaker 03: And the last point we wanted to raise is that AMS properly balanced the fact that this is a marketing standard. [00:30:47] Speaker 03: And they had to balance the impact to regulated entities [00:30:50] Speaker 03: with the consumer's demand for disclosure. [00:30:52] Speaker 03: The legislative history instructed the agency to minimize disruptions to the supply chain. [00:30:59] Speaker 03: And here when you have a resulting product, refined white sugar, that is identical on a molecular level, if one were forced to be labeled with a BE label and the other weren't, you would create a really stark price differential. [00:31:15] Speaker 03: for two identical products. [00:31:16] Speaker 03: And this price differential would disrupt the supply chain in really pretty enormous respects. [00:31:23] Speaker 03: So AMS did exactly what the law required. [00:31:26] Speaker 03: They examined relevant data, and they made a rational connection between the facts and the rule. [00:31:32] Speaker 00: And for that reason, the district court's opinion should be... So you said, you point to it shall be a prohibited act, but what are the consequences for someone who engages in a prohibited act? [00:31:41] Speaker 03: Well, that's up to the agency. [00:31:44] Speaker 03: Well, so that part is not in the statute. [00:31:46] Speaker 03: And as my colleague said, it's a matter of enforcement. [00:31:50] Speaker 03: There is a guidance document that was issued by the USDA on testing methods. [00:31:55] Speaker 03: It's on their website. [00:31:56] Speaker 03: It gives guidance to the entities who are using these tests. [00:32:00] Speaker 00: If there's no consequences for a prohibited act, then how? [00:32:05] Speaker 03: They're very well maybe. [00:32:07] Speaker 03: It's just not in the statute that I can see. [00:32:09] Speaker 03: There's a prohibited act, a record keeping requirement. [00:32:12] Speaker 03: There's an examination and an audit. [00:32:14] Speaker 03: There'll be a notice and a hearing, and the audit results will be published. [00:32:18] Speaker 01: Is there anything in the statute that preempts state laws from enforcing these provisions? [00:32:25] Speaker 03: I'm not aware of that, Your Honor. [00:32:31] Speaker 03: Not that I'm aware of. [00:32:33] Speaker 00: All right. [00:32:33] Speaker 00: Thank you, Counsel. [00:32:34] Speaker 00: Thank you. [00:32:36] Speaker 00: Mr. Kimbrough. [00:32:46] Speaker 05: Thank you, Your Honor. [00:32:46] Speaker 05: Just a few points. [00:32:48] Speaker 05: Starting where my colleague left off for the interveners, with regards to the costs overall for the rule, USDA did look at this and very clearly the rule itself is more costly than if they had include refined foods in the standard and required disclosure. [00:33:03] Speaker 05: So the sites for that are ER 284 and 286, and that's the regulatory impact analysis of USDA itself saying this is going to be more expensive actually to manufacturers to do all this testing and make this exclusion rather than if we had just included it. [00:33:19] Speaker 00: Do you want to address the QR code disclosure? [00:33:23] Speaker 05: Yes, Judge Wardlaw, with regards to Vocketer or... [00:33:27] Speaker 05: Just generally, yes, as I mentioned a little bit at the end of basically, you know, the district court was correct in finding that the QR codes were unlawful in terms of them going out on products without any other labeling and remanded that to the district court or to the agency, but didn't vacate it. [00:33:45] Speaker 05: And in our view, it should have vacated it right now. [00:33:47] Speaker 05: It's been two years since that decision. [00:33:48] Speaker 05: There's nothing that's happened on remand from the agency, no timeline for them to act. [00:33:52] Speaker 05: And in the interim, these QR code packages [00:33:54] Speaker 05: are out there, and it's very clear USDA's own assessment said consumers can't access them. [00:34:00] Speaker 05: And Congress was concerned about that risk and put a provision in the statute to address it, and it said you needed to have additional and comparable options to access the QR code, the smartphone labeling. [00:34:12] Speaker 05: I mean, the idea that we're going to walk around the grocery store scanning everything with our phones practically seems illusory to me. [00:34:20] Speaker 05: But anyway, they haven't done it, and it wasn't vacated, so they're out there. [00:34:23] Speaker 05: So we're asking that the district court should have vacated that provision. [00:34:27] Speaker 01: This is the text messaging provision. [00:34:30] Speaker 05: It's related to that, Judge Gilman. [00:34:31] Speaker 05: Yeah, it should have vacated both of them, because the text message was their purported solution to the problem that the district court correctly held it didn't solve, because you could still have the QR codes there out alone. [00:34:42] Speaker 05: It just gave manufacturers a fourth option to use instead of fixing the QR code packaging. [00:34:48] Speaker 05: If I could just make a few rebuttal points to my colleagues on the other side. [00:34:53] Speaker 05: Source tracing is not based on detectability. [00:34:56] Speaker 05: Source tracing is just looking at the raw ingredients. [00:34:58] Speaker 05: It's very simple. [00:34:59] Speaker 00: Did you use? [00:35:00] Speaker 00: Well, is it true, as your friend on the other side said, that the source tracing doesn't necessarily show that the ultimate food that the consumer is buying is bioengineered? [00:35:13] Speaker 05: It does, and then you have the accidental contamination provision we talked about before. [00:35:17] Speaker 05: So absent that, and the threshold that was set there, unlike for detectability, where they did actually set a threshold, it would prove that. [00:35:25] Speaker 05: And that's what you have for absence labeling like RMEKI, the non-GMO project, source tracing. [00:35:30] Speaker 05: There are 10,000 foods that are left out of this standard because highly refined foods are excluded. [00:35:35] Speaker 05: I wanted to note that. [00:35:36] Speaker 05: And my colleague mentioned there was a debate in Congress. [00:35:40] Speaker 05: I just want to highlight FER 146. [00:35:43] Speaker 05: That's USDA's general counsel telling Congress that refined bioengineered foods would be covered. [00:35:49] Speaker 05: He said the DNA goes somewhere. [00:35:51] Speaker 05: It doesn't go anywhere. [00:35:52] Speaker 05: It's in there. [00:35:53] Speaker 05: We can either see it or we can't. [00:35:54] Speaker 05: The way that without my readers I can't maybe see my words on my page, but with them I can see them. [00:35:59] Speaker 05: If you fragment and degrade the material, that's at FER 175, that's what happens in milling and refining and heating, but it doesn't go anywhere. [00:36:10] Speaker 05: It gets smaller and smaller bits and you need a more refined test to see it. [00:36:13] Speaker 05: That's it. [00:36:15] Speaker 05: limits on the manufacturer's discretion to use any test. [00:36:19] Speaker 05: This is the type of language USDA used. [00:36:22] Speaker 05: Pick something sufficient. [00:36:23] Speaker 05: Pick something fit. [00:36:24] Speaker 05: Pick something appropriate. [00:36:26] Speaker 05: They're very vague terms that beg questions like sufficient for what? [00:36:29] Speaker 05: Fit for what? [00:36:30] Speaker 05: Appropriate for what? [00:36:31] Speaker 05: And leave it all to the manufacturers to decide. [00:36:33] Speaker 05: And there is no, expressly, there is no burden on them to use a more sensitive test. [00:36:38] Speaker 05: In fact, it's the opposite. [00:36:39] Speaker 05: If you look at 7 CFR 66.9 B2, [00:36:43] Speaker 05: Once a refined process has been validated, there's, quote, no additional testing necessary. [00:36:49] Speaker 05: So that means once they have an insensitive test that they want to use for one product, they can keep running products through that as long as they want until they're done without any duty to increase it. [00:37:00] Speaker 05: Beet sugar. [00:37:01] Speaker 05: You can see the DNA in the beet sugar. [00:37:03] Speaker 05: That's an ER-297. [00:37:04] Speaker 05: That's refined beet sugar. [00:37:06] Speaker 05: It's not true that it doesn't exist or it's totally eliminated. [00:37:11] Speaker 05: I would say in closing, this case is arbitrary and capricious bingo. [00:37:17] Speaker 05: We got it all here. [00:37:18] Speaker 05: We got post hoc rationales. [00:37:20] Speaker 05: We have contrary to the evidence. [00:37:22] Speaker 05: We have extra statutory factors. [00:37:24] Speaker 05: We have failing to grapple with the evidence. [00:37:25] Speaker 05: And we have failure to further congressional intent with the statute's language and its policy. [00:37:30] Speaker 05: They all apply to the claims. [00:37:31] Speaker 05: For all these reasons, we ask this court reverse and remand. [00:37:35] Speaker 00: All right, thank you, Council. [00:37:36] Speaker 00: Natural Grocers versus BILSEC is submitted, and this session of the court is adjourned for today.