Watts v. Perdue Farms, Inc. (agency decision, March 5, 2019)

Plain-English summary

Craig Watts contracted with Perdue Farms to raise chickens and alleged retaliation after reporting that Perdue misled consumers about its farming practices and chicken health. The Board held that the Poultry Products Inspection Act exempts poultry and poultry products from the Federal Food, Drug, and Cosmetic Act to the relevant extent. The Food Safety Modernization Act did not change the Agriculture Secretary's authority over poultry, so the Department of Labor lacked authority over a whistleblower complaint based on that activity. Watts's reasonable but mistaken belief that poultry was covered could not expand statutory coverage beyond Congress's text. The Board affirmed dismissal.

Decision snapshot

• Cited authorities: 21 U.S.C. §§ 399d, 467f(a), and 2251; 29 C.F.R. § 1987.102(b)(1)
• Outcome: Dismissal of the FSMA complaint affirmed for lack of statutory coverage.
• Key point: A reasonable mistake may help establish protected activity within a statute, but it cannot extend the statute to poultry activity Congress placed under a different regulatory scheme.

Full text (DOL official public release)

U.S. Department of Labor Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210

  In the Matter of:


  CRAIG WATTS,                                       ARB CASE NO. 2017-0017

                  COMPLAINANT,                       ALJ CASE NO. 2016-FDA-00003

         v.                                          DATE: March 5, 2019

  PERDUE FARMS, INC.,

                  RESPONDENT.


  BEFORE: THE ADMINISTRATIVE REVIEW BOARD

  Appearances:

  For the Complainant:
         Thad M. Guyer, Esq.; T.M. Guyer & Friends, PC; Medford, Oregon; Karen Gray,
         Esq.; Government Accountability Project, Inc.; Washington, District of Columbia

  For the Respondent:
         Todd J. Horn, Esq.; and Michael J. Wilson, Esq.; Venable LLP; Baltimore, Maryland;
         John F. Cooney, Esq.; and Stephen R. Freeland, Esq.; Venable LLP, Washington,
         District of Columbia

  For the U.S. Poultry & Egg Association & National Chicken Council as Amicus Curiae:
         J. Larry Stine, Esq.; Wimberly, Lawson, Steckel, Schneider & Stine, PC; Atlanta,
         Georgia

  Before: William T. Barto, Chief Administrative Appeals Judge; James A. Haynes and Daniel
  T. Gresh, Administrative Appeals Judges



                             FINAL DECISION AND ORDER




          This case arises under the employee protection provisions of the Federal Food, Drug, and
  Cosmetic Act (FFDCA), 1 as amended by Section 402 of the Food Safety and Modernization Act
  of 2011 (FSMA), 2 and its implementing regulations at 29 C.F.R. § 1987 (2018). Section 402 of
  the FSMA protects an employee who has engaged in protected activity pertaining to a violation
  or alleged violation of the FFDCA, or any order, rule, regulation, standard, or ban under the
  FFDCA, from retaliation. Craig Watts, the owner of C&A Farms, filed a complaint with the
  Department of Labor’s Occupational Safety and Health Administration (OSHA) alleging that
  Perdue Farms, Inc. (Perdue) retaliated against him for engaging in FSMA-related protected
  activities. OSHA dismissed the complaint, and Watts asked for a hearing before an
  Administrative Law Judge (ALJ). Upon motion by Respondent, the ALJ also dismissed the
  complaint. For the reasons stated below, we affirm.


                                               BACKGROUND

          Craig Watts contracted with Perdue Farms, Inc., to raise chickens in North Carolina
  which he received from Perdue as chicks. 3 After a period of several weeks, Perdue would then
  collect them for processing. 4 In 2014, Watts made allegations that Perdue had misinformed
  consumers about the practices farmers used in raising its chickens and the health of its chickens
  in violation of the FSMA and the FFDCA. 5 On February 19, 2015, Watts filed a whistleblower
  complaint alleging that Perdue retaliated against him for making such allegations in violation of
  the employee protection provisions of the FSMA. 6

          On February 8, 2016, OSHA determined that, while Perdue was covered under the
  FSMA, Watts was not a covered employee of Perdue under the FSMA. 7 Watts requested a
  hearing before an ALJ. Before the ALJ, Perdue filed a motion to dismiss for lack of subject
  matter jurisdiction. The ALJ granted Perdue’s motion to dismiss pursuant to 29 C.F.R.
  § 18.70(a), concluding that she lacked jurisdiction to hear Watts’s claim. 8 Specifically, the ALJ

  1
          21 U.S.C. § 301 et seq. (1938).
  2
          21 U.S.C. § 399d (2016).
  3
           Decision and Order Granting Respondent’s Motion to Dismiss for Lack of Subject Matter
  Jurisdiction (D. & O.) at 1, 6.
  4
          Id.
  5
          Id. at 1.
  6
          Id. at 1-2.
  7
          Id. at 2.
  8
          20 C.F.R. § 18.70 encompasses the bases for dismissal announced in Rule 12(b) of the Federal
  Rules of Civil Procedure. We note that judges and parties often use the term “subject matter jurisdiction”



  reasoned that the raising of chickens is part of the poultry products industry, which is exempt
  from the FFDCA pursuant to the Poultry Products Inspection Act (PPIA), 21 U.S.C. § 467f
  (1979), and is therefore also exempt from the FSMA amendments adding the employee
  protection provisions to the FFDCA. Watts appealed this decision to the Administrative Review
  Board (ARB or Board).


                               JURISDICTION AND STANDARD OF REVIEW

         The Secretary of Labor has delegated authority to the Board to act on appeals from
  decisions by ALJs in cases brought under the FSMA and to issue final agency decisions in those
  matters for the Department of Labor (DOL). 9 In cases arising under the FSMA, “[t]he ARB will
  review the factual determinations of the ALJ under the substantial evidence standard.” 20 C.F.R.
  § 1987.110(b). The ARB reviews an ALJ’s conclusions of law de novo. 10


                                                DISCUSSION

       A. Statutory and Regulatory Background
         We must determine whether the ALJ erred in her conclusion of law that the U.S.
  Department of Labor does not have jurisdiction to adjudicate this complaint. The statutory
  framework is complex, involving four distinct statutes, and requires some explanation to fully
  understand the context of this case.

          The FFDCA authorizes the Food and Drug Administration (FDA) to regulate the safety
  of food in interstate commerce. 21 U.S.C. § 301 et seq. Chapter 9 of the FFDCA regulates food
  safety from the time it is imported, manufactured, or processed until it is packaged and
  distributed for public consumption. Id.

         On January 4, 2011, Congress enacted the FSMA to amend the FFDCA and add
  employee protections. 11 Section 402 of the FSMA, 21 U.S.C. § 399d(a), provides that the
  following:



  for what might more properly be denoted as a pleadings- or merits-based determination. See Arbaugh v.
  Y&H Corp., 546 U.S. 500, 510 (2006).
  9
         Secretary’s Order No. 2-2012 (Delegation of Authority and Assignment of Responsibility to the
  Administrative Review Board), 77 Fed. Reg. 69,378 (Nov. 16, 2012); 29 C.F.R. § 1987.110(a).
  10
        Brousil v. BNSF Railway Co., ARB Nos. 16-025, 16-031, ALJ No. 2014-FRS-163, slip op. at 3
  (ARB July 9, 2018).
  11
          Pub. L. 111-353, 124 Stat. 3885 (Jan. 4, 2011).




                  (a) In general
                  No entity engaged in the manufacture, processing, packing,
                  transporting, distribution, reception, holding, or importation of food
                  may discharge an employee or otherwise discriminate against an
                  employee with respect to compensation, terms, conditions, or
                  privileges of employment because the employee, whether at the
                  employee's initiative or in the ordinary course of the employee's
                  duties (or any person acting pursuant to a request of the employee)

                         (1) provided, caused to be provided, or is about to provide or
                         cause to be provided to the employer, the Federal
                         Government, or the attorney general of a State information
                         relating to any violation of, or any act or omission the
                         employee reasonably believes to be a violation of any
                         provision of this chapter or any order, rule, regulation,
                         standard, or ban under this chapter, or any order, rule,
                         regulation, standard, or ban under this chapter; . . .

  21 U.S.C. § 399d(a) (emphasis added). “Food” is the operative word that conveys the
  whistleblower provision’s coverage. “Food” is defined in the FFDCA as:

                  The term “food” means (1) articles used for food or drink for man
                  or other animals, (2) chewing gum, and (3) articles used for
                  components of any such article.

  21 U.S.C. § 321(f). Similarly, the FSMA’s implementing regulations restate the definition without
  substantive change:

                  Food means articles used for food or drink for man or other animals,
                  chewing gum, and articles used for components of any such article.

  29 C.F.R. § 1987.101(h).

          While “food” is a broad category of articles and things, Congress has chosen to limit the
  FFDCA’s coverage of food. It enacted the PPIA to protect the public from “unwholesome,
  adulterated, or misbranded” poultry products. 21 U.S.C. § 451 (1968). The PPIA generally
  exempts poultry and poultry products from the FFDCA:

                  Poultry and poultry products shall be exempt from the provisions of
                  the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 301 et seq.]
                  to the extent of the application or extension thereto of the provisions
                  of this chapter, except that the provisions of this chapter shall not
                  derogate from any authority conferred by the Federal Food, Drug,
                  and Cosmetic Act prior to August 18, 1968. . . .




  21 U.S.C. § 467f(a); see also 21 U.S.C. §§ 350c(d)(2), 381(m)(3)(B) (limiting poultry from the
  respective FFDCA obligations and duties). Furthermore, Section 403 of the FSMA, 21 U.S.C. §
  2251, specifically addresses the relationship between the two Acts:

                  Nothing in [the FSMA], or an amendment made by this Act, shall
                  be construed to—
                  …
                         (4) alter or limit the authority of the Secretary of Agriculture
                         under the laws administered by such Secretary, including---
                  …
                                  (B) the Poultry Products Inspection Act…

  21 U.S.C. § 2251. Accordingly, the FFDCA’s definition of “food” may be broad,
  but the PPIA and FSMA unequivocally establish that “poultry” is not “food” for the purposes of
  the FFDCA. There is no overlap of coverage in this particular regard, and the ALJ was correct as
  a matter of law to conclude that she had no authority to adjudicate a complaint arising under a
  statute, i.e., the PPIA, that is not administered by the Department of Labor.

     B. Watts’s Further Argument
          Watts also argues that even if the PPIA excludes “poultry” from coverage under the
  FFDCA, the DOL is still a proper forum for his complaint because Watts had a reasonable belief
  that he and his employer were covered under the FFDCA and the FSMA. The FSMA’s
  implementing regulations provide that the FSMA protects an employee who has done the
  following:

                  Provided, caused to be provided, or is about to provide or cause to
                  be provided to the employer, the Federal Government, or the
                  attorney general of a State information relating to any violation of,
                  or any act or omission the employee reasonably believes to be a
                  violation of any provision of the [FFDCA] or any order, rule,
                  regulation, standard, or ban under the [FFDCA];

  29 C.F.R. § 1987.102(b)(1). Watts cites Saporito v. Publix Super Markets, Inc., ARB No. 10-
  073, ALJ No. 2010-CPS-001 (ARB Mar. 28, 2012), for support. In Saporito, a panel of the
  Board held that it was error to dismiss a complaint of retaliation under the Consumer Product
  Safety Improvement Act (CPSIA), 15 U.S.C. § 2087 (2008), because the ALJ erroneously
  concluded that the actions complained of involved categories of products excluded from the
  coverage of the CPSIA. The Board noted that the employee protection provision of the CPSIA
  was not limited to acts or omissions that violated the CPSIA, but also extended to violations of
  “any Act regulated by the [Consumer Products Safety] Commission, or any order, rule,
  regulation, standard, or ban under such Acts.” The Board identified two such Acts that the
  Commission also regulated that may have been implicated by the actions Saporito complained
  of, and concluded that “[t]his factor alone is a sufficient basis to reverse and remand this matter
  to the ALJ.” Saporito, ARB No. 10-073, slip op. at 5. In subsequent dicta, the Board noted that
  the ALJ had also erroneously failed to consider the effect of Saporito’s potentially mistaken



  belief that the actions at issue were violations of the CPSIA. The Board observed that “[t]he
  CPSIA’s plain language allows the complainant to be wrong as long as he held a reasonable
  belief of a violation of the Act or other act enforced by the Commission.” Saporito, ARB No. 10-
  073, slip op. at 6.

     C. Analysis
           Watts’ reliance upon Saporito is misplaced for several reasons. As a threshold matter,
  the statutory framework in Saporito is distinguishable from that in the instant case. Whereas the
  CPSIA extended whistleblower protection to allegations of violations of any legislative act the
  Consumer Product Safety Commission regulated, in this matter the FFDCA and the FSMA
  extend such protection only to allegations of violations of the FFDCA. See 21 U.S.C. § 399d(a).
  And while the ALJ in Saporito erred by ignoring statutory language that resulted in a constrained
  reading of the reach of the Act’s coverage at issue in that case, in this case Watts would have the
  Board expand the reach of the FFDCA and the FSMA to an entity neither Act covers on the basis
  of Complainant’s mistake of law. By doing so, Watts conflates the standard of analysis for
  determining whether protected activity is established based on a complainant’s “reasonable
  belief” with the different analysis for determining whether a respondent’s activities are covered
  under the FSMA. A complainant’s reasonable but mistaken belief that a FFDCA violation has
  occurred may render certain of his whistleblowing activities as protected under the Act. But an
  employee’s reasonable albeit mistaken belief that poultry is regulated under the FFDCA and the
  FSMA cannot operate to extend coverage of those Acts over an entity whose activities the Acts
  do not otherwise regulate. Complainant’s reasonable mistake of law may expand the protections
  that his whistleblowing activities receive, but it cannot extend the coverage of an Act beyond that
  which Congress expressly provided for in the statutory text.

         In conclusion, Watts has failed to show that the ALJ erred in dismissing his complaint.
  Cf. Nortell v. North Central College, ARB No. 16-071, ALJ No. 2016-SOX-013, slip op. at 4-5
  (ARB Feb. 12, 2018); Fleszar v. Am. Med. Ass’n, ARB Nos. 07-091, 08-061, ALJ Nos. 2007-
  SOX-030, 2008-SOX-016, slip op. at 4 (ARB Mar. 31, 2009). For the reasons stated above, we
  hold that the ALJ’s decision was correct in law and fact. Accordingly, we AFFIRM the ALJ’s
  dismissal of this complaint.

         SO ORDERED.