WASHINGTON, D.C. 20036-2220


May 26, 2000

FROM: Olsson, Frank and Weeda, P.C.

RE: District Court Opinion in Supreme Beef Lawsuit


Today, the Federal District Court for the Northern District of Texas issued a Memorandum Order in Supreme Beef Processors, Inc. v. UDSA, Civil Action No. 3:99-CV-2713-G. The District Court ruled that the Food Safety and Inspection Service (FSIS) lacked the statutory authority -- in this case -- to suspend inspection at Supreme's grinding facility due to the establishment's failure to comply with the Salmonella ground beef performance standard. Accordingly, FSIS is permanently enjoined from suspending inspection at Supreme due to any such failure.

This case was instituted after FSIS withdrew inspection from Supreme Beef Processors. The Court had previously granted Supreme a Temporary Restraining Order and a Preliminary Injunction forbidding FSIS from suspending inspection. This decision provides Supreme with permanent relief. FSIS can either accept the decision, appeal, or take some legislative/regulatory action. At this time, we could only speculate as to which option(s) the agency will select.

Implications of the Decision

As discussed in further detail below, this decision is based on the Court's ruling that FSIS cannot rely on finished product testing for Salmonella to determine an establishment's sanitation since such finished product test does not necessarily represent the sanitary conditions at the facility. In essence, this decision can be interpreted as preventing FSIS from taking action against a facility on the basis of a finished product test when compliance with the test is not based on the condition of the facility but on circumstances outside of the tested establishment's control. Obviously, FSIS is free to take action against product which is adulterated; it just cannot make a system determination in such cases.

This rationale raises questions as to the validity of the Salmonella performance standards for ground and processed products. Moreover, it could likely be applied to prevent the agency from deeming a positive E. coli O157:H7 finding as a systems failure for a grinding operation.

The decision does not resolve the issue of whether FSIS has the statutory authority to suspend inspection for a HACCP failure. Likewise, the decision does not have any implications for the FSIS HACCP regulations generally.

The Court's Opinion

The Court began its legal analysis with the statutory section cited by FSIS as its authority to suspend inspection -- 8 of the Federal Meat Inspection Act (FMIA), 21 U.S.C. 608. Under this section, FSIS can refuse to mark products as "inspected and passed" if the sanitary conditions are such that the products could be adulterated. The statute specifies that a product is adulterated, in part, if it was produced under insanitary conditions. Section 1(m)(4) of the FMIA, 21 U.S.C. 601(m)(4).

FSIS deemed that a failure to comply with the Salmonella standard represented insanitary conditions. However, the Court disagreed. The performance standards and the finished product tests "do not necessarily evaluate the conditions" of the facility. Slip Op. at 9 (emphasis in original). According to the Court, the flaw in the FSIS position is that the presence of Salmonella is not substantially dependent upon the sanitary conditions in a grinding establishment. To support this conclusion, the Court cited to:

In rejecting the agency's position that the facility could comply with the standard by imposing controls on incoming product, the Court ruled that such controls were not contemplated by the FMIA as part of an evaluation of the sanitary conditions in a plant. Moreover, the raw products accepted by Supreme were inspected and passed by the agency. Therefore, according to the Court, if the FMIA envisioned controls at the grinder, there would be no need for FSIS to test for Salmonella at the slaughter level. Finally, discounting such controls is consistent with all other cases involving insanitary conditions since no Court had ever found a plant insanitary in absence of unacceptable physically-observable conditions.

The Court was careful to state that it was not opposing the use of scientific technologies for FSIS inspection activities; merely the "agency's science-based testing of a processor's product to evaluate the conditions of its plant." Id. at 13. The Court also noted that FSIS could act against product if the product was otherwise adulterated under the Act.

As the Court summed up the matter, the FMIA "does not allow USDA to deem a sanitary plant, insanitary." Id. at 15.

We have telecopied the Memorandum Order to you earlier this afternoon. If you have any questions or desire further information, please contact us.