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Chocolate Manufacturers Association v. Block

United States Court of Appeals for the Fourth Circuit
755 F.2d 1098 (1985)
ELI5:

Rule of Law:

Under the Administrative Procedure Act, an agency fails to provide adequate notice of a proposed rulemaking if the final rule is not a "logical outgrowth" of the proposed rule, meaning the final rule substantially departs from the proposal and fails to fairly apprise interested parties of the issues the agency is considering.


Facts:

  • The Department of Agriculture (USDA) administers the Special Supplemental Food Program for Women, Infants and Children (WIC), which historically permitted flavored milk.
  • In 1978, Congress directed the USDA to review WIC food packages, instructing the Secretary to ensure the fat, sugar, and salt content of prescribed foods is appropriate.
  • The USDA conducted an extensive investigation, including public hearings and expert panels, before publishing a proposed rule.
  • In November 1979, the USDA published its proposed rule which explicitly stated that milk for women and children could be "flavored or unflavored."
  • The preamble to the proposed rule discussed the agency's concerns about high sugar content in other foods like cereals and juice, but made no mention of the sugar content of flavored milk.
  • During the sixty-day public comment period, 78 commenters, mostly local WIC administrators, recommended that flavored milk be removed from the list of approved foods due to its sugar content and cost.
  • In its final rule, the USDA reversed its proposed position and prohibited the use of flavored milk in the WIC program, citing the public comments as the reason for the change.

Procedural Posture:

  • After the final rule was issued, Chocolate Manufacturers Association (CMA) petitioned the Department of Agriculture to reopen the rulemaking, but the Department ultimately declined.
  • CMA filed a lawsuit in federal district court, seeking relief from the rule.
  • The district court denied CMA's request for relief and entered a decision in favor of the Department of Agriculture.
  • CMA, as the appellant, appealed the district court's decision to the United States Court of Appeals for the Fourth Circuit.

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Issue:

Does a federal agency provide adequate notice under the Administrative Procedure Act when its proposed rule explicitly permits an item, the preamble discusses related issues without mentioning that item, and the final rule then prohibits the item based on public comments?


Opinions:

Majority - Sprouse, Circuit Judge

No. A federal agency fails to provide adequate notice when its final rule is not a 'logical outgrowth' of the proposed rule. The purpose of the notice-and-comment procedure is to provide interested parties a fair opportunity to participate in the rulemaking process. Here, the USDA's final rule eliminating flavored milk was not a logical outgrowth of its proposal, which explicitly permitted it. The history of the WIC program's allowance of flavored milk, combined with the proposed rule's specificity in discussing sugar in other products while remaining silent on milk, would lead an interested party like the Chocolate Manufacturers Association (CMA) to believe that the inclusion of flavored milk was not at issue. Because the final rule was a complete reversal of the proposal and the notice was misleading, it deprived the CMA of a fair opportunity to comment on the potential deletion of flavored milk, violating the procedural requirements of the Administrative Procedure Act.



Analysis:

This case is a significant interpretation of the Administrative Procedure Act's notice requirement, particularly in scenarios where an agency reverses its position between the proposed and final rule. It solidifies the 'logical outgrowth' test as the standard for determining the adequacy of notice for changes made after public comment. The decision serves as a caution to agencies that they cannot rely solely on comments to justify a final rule that is the antithesis of its proposal, especially when the original notice gave no warning that such a change was under consideration. This precedent requires agencies to be more transparent about the potential scope of a final rule, ensuring that all interested parties are fairly alerted to the issues on the table.

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