## Facts

- Congress included a rider in the FY 2006 agriculture appropriations law barring the use of appropriated funds to pay for USDA ante-mortem inspections of horses at slaughter facilities.
- Under the Federal Meat Inspection Act (FMIA), ante-mortem inspection is required for horsemeat to be lawfully sold in commerce; the funding cut therefore functioned as a moratorium on inspected horse slaughter.
- Foreign-owned horse-slaughter operators petitioned USDA’s Food Safety and Inspection Service (FSIS) to create an alternative inspection arrangement funded by the plants rather than by appropriations.
- On February 8, 2006, FSIS issued an interim final rule amending 9 C.F.R. part 352 to establish a voluntary fee-for-service program allowing horse-slaughter establishments to apply for and pay for ante-mortem inspection.
- Plaintiffs (the Humane Society of the United States and others) alleged FSIS implemented the fee-for-service program without any environmental review under the National Environmental Policy Act (NEPA).
- Defendants were the Secretary of Agriculture (Mike Johanns) and USDA officials; horse-slaughter companies, including Cavel International, intervened to defend the rule.
- Plaintiffs moved for summary judgment on their NEPA/APA claim; defendants and intervenors sought dismissal or summary judgment in their favor.
- At the time of the merits ruling, the court noted that Cavel was the only remaining facility still operating to process horsemeat for human consumption.

## Issues

1. Whether FSIS’s interim final fee-for-service horse inspection rule was a “major Federal action” requiring NEPA compliance (at least an environmental assessment (EA), and an environmental impact statement (EIS) if significant impacts were likely).
2. Whether USDA/FSIS could rely on a categorical exclusion in its NEPA procedures to issue and implement the rule without preparing any NEPA document.
3. Whether promulgating the rule without NEPA review was arbitrary, capricious, or otherwise not in accordance with law under the Administrative Procedure Act (APA), 5 U.S.C. § 706(2).
4. What relief was proper if the rule violated NEPA and the APA.

## Decision

- The court held that the interim final rule was a major federal action within NEPA because it affirmatively authorized and enabled continued horse slaughter by providing a federal inspection mechanism required by the FMIA.
- The court rejected the argument that NEPA was inapplicable because environmental effects would stem from private slaughterhouse operations; the federal inspection decision had a sufficient connection to the activity continuing.
- The court held USDA/FSIS could not avoid NEPA based on its categorical exclusion, given the nature and potential effects of a nationwide inspection program allowing horse slaughter to proceed.
- The court concluded that issuing and implementing the rule without preparing an EA or EIS, and without a valid basis to proceed without NEPA review, violated NEPA and was arbitrary and capricious under the APA.
- The court granted plaintiffs’ summary judgment motion on the NEPA/APA claim, denied defendants’ and intervenors’ dispositive motions on that claim, vacated the interim final rule, and permanently enjoined FSIS from implementing it.

## Legal Principles

- NEPA’s procedural duties apply when an agency takes action that authorizes or allows environmentally consequential activity to occur where federal approval or oversight is a legal prerequisite.
- “Major Federal action” can include rulemaking that supplies an essential federal permission or service (such as inspection required for lawful commerce), even if private parties carry out the underlying operations.
- A categorical exclusion does not excuse NEPA review when the action may have significant environmental effects or when the agency lacks a reasoned basis for treating the action as falling within the exclusion.
- Failure to prepare an EA/EIS (or to justify proceeding without one under applicable NEPA procedures) is reviewable under the APA and can render the agency action unlawful.
- Vacatur and permanent injunctive relief are available remedies when a rule is implemented in violation of NEPA’s required process and cannot be justified on the administrative record.

## Conclusion

Humane Soc’y of U.S. v. Johanns held that USDA’s interim final fee-for-service horse inspection rule was subject to NEPA because it supplied the federal inspection mechanism necessary for horse slaughter to continue under the FMIA, and USDA’s failure to prepare an EA or EIS (without a valid categorical-exclusion basis) made the rule unlawful under the APA; the court therefore vacated the rule and permanently enjoined FSIS from implementing it.


Humane Soc’y of U.S. v. Johanns, 520 F. Supp. 2d 8 (D.D.C. 2007)