Organic Rule Change Causes A Synthetics Scuffle

This article was originally published by Law 360 on October 12, 2016. Law 360 is available by subscription only.

Ongoing litigation in the U.S. District Court for Northern California could potentially upend the U.S. Department of Agriculture’s efforts to streamline the process by which synthetic substances are permitted for use in organic production in those limited circumstances in which no workable organic alternatives exist.

Fomented by considerations of surging consumer demand for “organic” products and the need to administer a regulatory framework that promotes efficiency and transparency governing this rapidly developing industry, the USDA’s National Organic Program (NOP) revised its regulatory process for authorizing synthetic materials for use in organic production in a Sept. 16, 2013, Federal Register notice. The revision effectively permits a given synthetic material to remain authorized for use in organic production absent a specific vote by the National Organic Standards Board (NOSB) to deauthorize the material. Prior to September 2013, synthetic materials were automatically deauthorized for use in organic production after a five-year period, absent a specific vote to reauthorize the material.

In response to the rule change, the Center for Food Safety (CFS) and other consumer advocacy groups filed a complaint on April 7, 2015, alleging that this change — which did not allow for public comment — amounts to a violation of the Administrative Procedure Act (APA) and the Organic Food Production Act (OFPA).[1] Early last month, a federal judge refused to dismiss the lawsuit.[2]

Regulatory Framework

The USDA’s NOP administers the Organic Foods Production Act of 1990 (OFPA) (Public Law 101-624, Nov. 28, 1990) which regulates organic production in the U.S. The NOP maintains a national list of allowed and prohibited substances permitted for use in organic production. The national list delineates “allowed synthetics” and “prohibited naturals.” If a synthetic material is not included on the national list, then it is prohibited from use in organic production. Although the use of synthetic substances is generally prohibited in organic production, certain synthetic materials have been evaluated and added to the national list as permitted substances in organic production in cases where no feasible organic alternatives exist.

The NOSB, a federal advisory board consisting of 15 dedicated public volunteers from across the organic community, reviews each substance on the national list every five years under a process known in USDA parlance as “sunset review.” During this review, which includes public meetings, the NOSB considers public comments and any new information concerning a given substance. The review typically considers any new information about the substance’s impact to human health or the environment, as well as any new proven and natural alternatives. If the NOSB confirms that the substance continues to meet required criteria for inclusion on the national list, then the review of the substance of interest is complete and the agency will publish a Federal Register notice announcing that the substance will remain authorized for use in organic production for another five years.

The OFPA sets forth specific requirements for the sunset review process, including a “decisive votes” provision under Section 6518(h) of the OFPA which, as originally drafted, required a two-thirds majority “yes” vote to add a material to the national list and to retain a material on the national list.[3]

Key Revisions to Sunset Notice

1. Voting

To further streamline the listing of synthetics, the USDA published a notice in the Federal Register on Sept. 16, 2013, indicating a change in its listing process for synthetic substances.[4] Prior to September 2013, synthetic materials were removed by default from the national list after a five-year “sunset” period, absent a specific two-thirds vote of the entire board to keep them on the list. Post-September 2013, the new process permits synthetic materials to remain by default on the national list, absent a specific vote by the board to remove them.

More specifically, under the old system, the OFPA authorized a subcommittee of the National Organic Standards Board to make a motion to relist a material on the national list. This process required a majority vote — 10 of 15 — to relist a material, thereby permitting a minority, i.e., six of the 15, to obstruct a given material from being relisted.

Under the revised system, a subcommittee of the National Organic Standards Board is now permitted to make a motion to remove a listed substance. Under this process, a majority of the board — 10 of 15 — is required to remove a given substance from the national list. This revised process effectively gives control back to the majority of the board and, importantly, facilitates a more predictable and streamlined process for organic stakeholders who rely upon the materials on the national list to produce a range of organic products.

2. Public Comment

Under the old system, written comments could only be submitted in a 30-day comment period prior to the NOSB meeting, and then again at the meeting. Oral testimony was only permitted at one meeting (with limits on the number of people testifying). Finally, a material was publicly discussed by the NOSB at just one meeting.

Under the revised system, a material is publicly discussed by the NOSB at two meetings with two corresponding 30-day periods for written comments. Importantly each of these two meetings affords the public an opportunity to provide oral testimony. Further, the NOP now hosts two webinar calls prior to an NOSB meeting which certainly saves commenters time and money in traveling to a live meeting, a potential barrier to participation for some commenters.

Litigation Challenging Revised Sunset Notice

The CFS’ April 2015 lawsuit against the USDA asserts that the change undermines the decision-making process on allowed synthetic materials in organic production and processing and, as such, should have been subject to notice and comment rulemaking per the APA. [5] The agency struck back on July 17, 2015, contending that it did provide ample opportunity for public comment and that that the sunset notice was not a final agency action subject to review by the court.

After a series of attempts by the USDA to dismiss the lawsuit, on Sept. 8, 2016, U.S. District Judge Haywood Gilliam for the Northern District of California issued a ruling denying the USDA’s motion to dismiss the lawsuit.[6] In denying the agency’s motion, Judge Haywood determined that the plaintiffs adequately established injury-in-fact, finding that the plaintiffs alleged a concrete and particularized harm resulting from the revised sunset procedure. More specifically, Judge Haywood noted that the plaintiffs cited specific substances that they allege remain used in organic production because of the revised procedures, and contend that as a result of the continued presence of these substances on the national list, the plaintiffs must use increased effort to advocate for changes to the national list due to the revised sunset notice procedure.

Advantages to the Revised Sunset Notice

According to the USDA’s Sept.16, 2013, Federal Register notice, the revised sunset process was designed to “improve public participation and transparency and ensure well-informed decision making about substances that are critical in organic production and handling”.[7]

In this rapidly developing industry, “organic” stakeholders expect certainty and efficiency in the USDA’s regulatory scheme to facilitate a streamlined production process. Likewise, consumers expect the USDA to implement regulations and procedures to support the integrity of the organic seal. The revised sunset process achieves both goals by: (1) increasing opportunities for public comment directly to the NOSB and (2) streamlining the NOSB’s voting approach and requirements for decisive votes as it pertains to synthetics.

On the latter point, critics of the new process contend that synthetic materials will not be removed as readily as they would have been had the original sunset review process still been in place. But the fact that synthetic materials have actually been removed under the revised sunset review process (during NOSB’s Fall 2014 and 2015 meetings) demonstrates that the revised process accomplishes what the law intended, and in a much more efficient manner.

Potential Implications

Should the court ultimately overturn the USDA’s revised sunset notice on grounds that it should have been subject to formal notice and comment rulemaking, authorization for use of certain substances relied upon by many in the production of organic products will automatically expire in the absence of NOSB review and approval. Thus, even if the court ultimately agrees with the plaintiffs’ contention that the revised sunset review process should be subject to formal notice and comment rulemaking, it would be prudent to allow for the implementation of a stop gap measure whereby the synthetic substances currently authorized for use in organic production under the revised sunset notice may continue to be used without leaving organic producers in a lurch.

Given increasing consumer demand for organic products, and the corresponding increasing market share for such products, the ultimate disposition of the ongoing litigation continues to be of great interest to industry and consumers alike.

—By Brian P. Sylvester, Keller and Heckman LLP

Brian Sylvester is an associate at Keller and Heckman in Washington, D.C. He previously served as a regulatory lawyer at the USDA from 2009 to 2014.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Complaint for Declaratory And Injunctive Relief, Center for Food Safety et al. v. Vilsack et al., No. 15-1590 (N.D. Cal. April 7, 2015).

[2] Order Denying Motion to Dismiss, Center for Food Safety et al. v. Vilsack et al., 2016 U.S. Dist. LEXIS 121629 (N.D. Cal. Sept. 8, 2016).

[3] 7 U.S.C. § 6518(h).

[4] 8 Fed. Reg. 56811, 56812 - 56815 (Sept. 16, 2013).

[5] Complaint for Declaratory And Injunctive Relief, Center for Food Safety et al. v. Vilsack et al., No. 15-1590 (N.D. Cal. April 7, 2015).

[6] Order Denying Motion to Dismiss, Center for Food Safety et al. v. Vilsack et al., 2016 U.S. Dist. LEXIS 121629 (N.D. Cal. Sept. 8, 2016).

[7] 8 Fed. Reg. 56811, 56815 (Sept. 16, 2013).