- Substantive Review of NOP Appeals and the Resolution of Appeals
- December 8, 2014 | Author: Gene Summerlin
- Law Firm: Husch Blackwell LLP - Lincoln Office
In our last post, we discussed the procedural requirements necessary to pursue an appeal of an adverse action taken by the NOP, a State organic program, or an organic certification agency. To greatly over simplify, the procedural review of an appeal looks at two primary issues:
- Does the appeal itself satisfy the NOP’s regulatory process; and
- Was the adverse action appealed from taken in compliance with the NOP’s requirements.
Put another way, procedural review doesn’t consider whether the adverse action was right or wrong, but rather focuses on whether the action was taken in accordance with the proper steps, and whether the appellant followed the appropriate steps to appeal that action. The NOP’s substantive review of an appeal examines whether the rules were correctly applied; that is, whether the adverse action was an appropriate application of the NOP’s rules and regulations.
Not surprisingly, the NOP, a State organic program, or an organic certification agency can issue a notice of non-compliance, a proposed suspension or revocation, or a denial of certification for any number of reasons. So rather than discuss the specifics of whether X, Y, or Z can result in an adverse action, what we will look at in this post is how the NOP considers the merits of an appeal and how that effects what and how a certified entity may wish to pursue an appeal.
Burden of Proof. When an adverse action is taken, it must be substantiated by a preponderance of evidence. This standard means that it is more likely than not that the wrongful conduct occurred. Think of it as a 51% sure test. If the evidence would cause you to think that something probably happened, that satisfies the preponderance of the evidence standard.
What was the Wrongful Conduct? Often, a notice of non-compliance or a suspension, revocation or denial of certification may be based on a number of separate factors. In the NOP’s substantive review of an appeal, it will only consider those factors which are specifically raised in the appeal. Thus, if your certification entity issued a notice of non-compliance because of three separate findings and you only raise one of those findings in your appeal, the NOP will not consider the appropriateness of the two findings not specifically raised.
Knowing or Willfull Violations. Is there a finding of a knowing or willfull violation? Some adverse actions are taken solely on the basis of objective (provable) facts - you were required to take a specific action and you failed to do so. In that circumstance, simply proving by a preponderance of the evidence that you didn’t do what you were supposed to do is sufficient to establish the violation. But, the mere fact that you should have done something doesn’t necessarily imply that you knew you were required to take that action or that you intentionally failed to take the action knowing that it was a violation of the NOP’s regulations. Other times, adverse decisions are based on a determination that a person knowingly or willfully did something wrong. Here, the substantive review of an appeal will require an analysis of the finding of a specific state of mind - that you knew you were violating the regulations or that you intended to violate the regulations. Since it is impossible to know exactly what a person is thinking, these types of findings rely on circumstantial evidence of intent and whether the evidence presented reasonably leads to a finding of intent on the part of the alleged wrongdoer.
Regulatory Interpretation. Some adverse actions are based on interpretations of potentially ambiguous NOP rules, regulations or policies. It is long settled that a governmental agency’s interpretation of its own regulations is valid unless the interpretation is plainly erroneous. Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). However, the interpretation given to an NOP rule, regulation or policy by a certification entity is likely not subject to that same level of deference. Thus, it is ultimately up to the NOP to determine what its regulations mean and interpretations given to a regulation by a certification entity may be entitled to no more deference than the interpretation proposed by the certified producer, operator or processor. In this regard, it is particularly important to review NOP precedent in interpreting the regulation at issue in determining how to proceed on an appeal.
Resolution of NOP Appeals. There are three possible resolutions to an appeal:
- Dismissed/Closed without a Decision - If the appellant failed to follow the procedural requirements of the regulations, then the appeal will be dismissed or closed.
- Denied - If the preponderance of the evidence demonstrates non-compliance with the regulations, the appeal will be denied. However, even in this case the Administrator may elect to reduce or extend the scope of the proposed adverse action and indicate whether there are ground to pursue additional criminal or civil penalties.
- Sustained - If the proposed adverse action does not comply with the procedural requirements necessary to take adverse action or if the preponderance of evidence does not establish the alleged violation, the appeal will be sustained and the adverse action is reversed.
Action Following Appeal. Once an appeal has been either denied or sustained, the appellant will receive a transmittal letter informing him or her of the results of the appeal. Upon receipt of the letter, the appellant may:
- Sign the waiver of hearing and accept the Administrator’s decision;
- Fail to respond to the transmittal letter which will be deemed an acceptance of the Administrator’s decision; or
- Request a formal administrative hearing.
If a formal administrative hearing is requested, the proceedings will take place pursuant to U.S. Department of Agriculture’s Uniform Rules of Practice, 7 CFR part 1, Subpart H. Ultimately, an adverse NOP decision may be appealed to an Administrative Law Judge, then a Judicial Officer, and ultimately to the United States District Court for the district in which the appellant is located.
If you are faced with an appeal of an action taken under the NOP, the attorneys at Husch Blackwell can help you navigate through the procedural and substantive issues that you will face.