## Facts

- Animal-protection organizations and individual consumers petitioned FDA, FTC, USDA’s AMS, and USDA’s FSIS to require shell-egg cartons to disclose hen-housing conditions (e.g., “caged,” “cage-free,” “free-range”).
- Petitioners asserted consumers were misled by existing carton labels and that eggs from caged hens were less nutritious and more likely to be contaminated with Salmonella.
- FSIS denied the petition, concluding the requested labeling concerned shell eggs and fell outside its labeling jurisdiction under the Egg Products Inspection Act.
- AMS denied the petition, concluding it lacked statutory authority to impose mandatory shell-egg labeling.
- FTC denied the petition, finding the record did not show the challenged practices were “prevalent” and stating it preferred case-by-case enforcement.
- FDA denied the petition in a brief letter, citing competing priorities, limited resources, and a view that the evidence did not warrant initiating rulemaking.

## Issues

1. Whether FSIS acted arbitrarily and capriciously in denying rulemaking based on its conclusion that it lacked statutory authority over shell-egg carton labeling.
2. Whether AMS acted arbitrarily and capriciously in denying rulemaking based on its conclusion that it lacked authority to impose mandatory shell-egg labeling.
3. Whether FTC acted arbitrarily and capriciously in denying rulemaking for lack of evidence of “prevalent” deceptive practices and opting for ad hoc enforcement.
4. Whether FDA’s terse denial nonetheless satisfied the APA requirement that an agency consider the identified problem and reasonably explain declining to initiate rulemaking.

## Decision

- The Ninth Circuit affirmed summary judgment for all agencies.
- FSIS’s denial was upheld because its conclusion that the EPIA does not authorize mandatory labeling rules for shell eggs was reasonable.
- AMS’s denial was upheld because it reasonably concluded its statutory role permits voluntary programs but not a mandatory national shell-egg labeling regime of the requested type.
- FTC’s denial was upheld because the record did not compel a finding of “prevalent” deceptive practices and the agency could reasonably choose enforcement over rulemaking.
- FDA’s denial was upheld because, although minimal, it sufficiently indicated consideration of the petition and provided a rational explanation for declining rulemaking.

## Legal Principles

- Judicial review of an agency’s refusal to initiate rulemaking is “highly deferential” under APA arbitrary-and-capricious review.
- When denying a rulemaking petition, an agency bears a low burden: it must indicate it considered the identified problem and provide a reasonable explanation for not initiating rulemaking.
- An agency may deny rulemaking where it reasonably concludes it lacks statutory authority to adopt the requested regulation.
- Agencies have discretion to choose between rulemaking and case-by-case enforcement; courts generally will not second-guess that choice absent arbitrary or irrational reasoning.
- Resource constraints and prioritization of regulatory efforts can be legitimate grounds for declining to initiate rulemaking if connected to the agency’s stated rationale.

## Conclusion

The Ninth Circuit held that the FDA, FTC, AMS, and FSIS permissibly denied petitions seeking mandatory hen-housing disclosures on shell-egg cartons because each agency offered a legally sufficient, non-arbitrary explanation grounded in statutory limits, evidentiary assessments, and enforcement and resource discretion under deferential APA review.


Compassion Over Killing v. U.S. Food & Drug Admin., 849 F.3d 849 (9th Cir. 2017)