United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 9, 1999 Decided April 9, 1999
No. 98-5244
The Original Honey Baked Ham Company
of Georgia, Inc., Appellee
v.
Daniel R. Glickman, Secretary,
United States Department of Agriculture, et al.,
Appellants
Appeal from the United States District Court
for the District of Columbia
(97cv00440)
Constance A. Wynn, Attorney, U.S. Department of Justice,
argued the cause for appellants. With her on the briefs were
Frank W. Hunger, Assistant Attorney General, Wilma A.
Lewis, U.S. Attorney, and Barbara C. Biddle, Assistant Di-
rector, U.S. Department of Justice.
Robert G. Hibbert argued the cause and filed the brief for
appellee.
Before: Wald, Henderson, and Randolph, Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge: Thanksgiving, Christmas and
Easter are the busiest times of year for The Original Honey
Baked Ham Company of Georgia. To capture more of the
market during these periods, Honey Baked decided to open
temporary "kiosks" in shopping malls near its ninety-seven
retail stores. Two of the company's products--cooked hams
and turkeys--attracted the attention of the Agriculture De-
partment's Food Safety and Inspection Service, which en-
forces the Federal Meat Inspection Act, 21 U.S.C. s 601 et
seq., and the Poultry Products Inspection Act, 21 U.S.C.
s 451 et seq. The question in this appeal from the judgment
of the district court is whether the retail stores supplying the
kiosks are subject to certain federal inspection requirements
imposed by those statutes.
The Honey Baked Ham Company purchases its hams and
turkeys from federally-inspected meat and poultry pro-
cessors; the products arrive at the company's retail stores
fully cooked.1 The Agriculture Department inspects the
hams and turkeys during slaughtering, and again during the
cooking and curing processes. At Honey Baked's retail
stores, the hams are sliced and glazed, the turkeys sliced, and
both items are packaged for sale. Before the current dispute
arose, the company's retail stores had never been subject to
the inspection requirements of the Meat Inspection Act or the
Poultry Inspection Act. But after Honey Baked revealed its
plan to open kiosks in shopping malls during its peak sales
periods, the Agriculture Department said that federal inspec-
tion requirements would apply to the company's retail stores
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1 The company also owns and operates a federally-inspected meat
and poultry processing facility in Carrollton, Georgia, where its
hams and turkeys are sliced, glazed, packaged and shipped by
common carrier to mail order customers.
supplying the kiosks.2 (At the kiosks, which are booths with
refrigeration units, no product preparation would occur.)
Given this official advice, the company understood that if it
went forward with its marketing plan without permitting
federal inspection of its retail stores, it could be subject to
product seizures, criminal prosecutions and other regulatory
sanctions. The company therefore sued for a declaratory
judgment and an injunction, which the district court granted
on the company's motion for summary judgment. See The
Original Honey Baked Ham Co. v. Glickman, C.A. No. 97-
440, mem. op. at 7 (D.D.C. Apr. 17, 1998). The Agriculture
Department has now appealed. Reviewing the district court's
grant of summary judgment de novo, see Troy Corp. v.
Browner, 120 F.3d 277, 281 (D.C. Cir. 1997), we affirm.
The Department derives its inspection authority, as far as
the company's hams are concerned, from the following section
of the Federal Meat Inspection Act:
[T]he Secretary shall cause to be made, by inspectors
appointed for that purpose, an examination and inspec-
tion of all meat food products prepared for commerce in
any slaughtering, meat-canning, salting, packing, render-
ing, or similar establishment, and for the purposes of any
examination and inspection said inspectors shall have
access at all times, by day or night, whether the estab-
lishment be operated or not, to every part of said estab-
lishment....
See 21 U.S.C. s 606. The Meat Inspection Act defines "pre-
pared" as "slaughtered, canned, salted, rendered, boned, cut
up, or otherwise manufactured or processed." See 21 U.S.C.
s 601(l ). The parallel section of the Poultry Products In-
spection Act provides that "[t]he Secretary, whenever pro-
cessing operations are being conducted, shall cause to be
made by inspectors post mortem inspection of the carcass of
each bird processed...." See 21 U.S.C. s 455(b). The Poul-
try Inspection Act's definition of "processed" is almost identi-
__________
2 In the meantime, the company started operating some kiosks,
supplying them directly from its Carrollton processing facility.
cal to the Meat Inspection Act's definition of "prepared."
The term means "slaughtered, canned, salted, stuffed, ren-
dered, boned, cut up, or otherwise manufactured or pro-
cessed." See 21 U.S.C. s 453(w).3 The Department's posi-
tion is that the inspection provisions generally apply to retail
establishments, unless those establishments fall within the
Acts' express retail exemptions, of which more in a moment.
In the Department's view, the company's stores cannot quali-
fy for the retail exemptions if products prepared there are
sold elsewhere.
Both parties believe, as do we, that the Meat Inspection
Act and the Poultry Inspection Act should, so far as possible,
be construed to have the same meaning. The company's
retail establishments supplying kiosks should, in other words,
either be subject to federal inspection or not, regardless
whether they handle hams or turkeys, or both. We say this
not only because the Acts are parallel in most respects, and
identical in others. See Kenney v. Glickman, 96 F.3d 1118,
1124 (8th Cir. 1996). We say it as well because the Acts
share the common purpose of ensuring that meat and poultry
products are "wholesome, [and] not adulterated," all to the
end of protecting the "health and welfare of consumers" and
the market for wholesome and unadulterated products. See
21 U.S.C. ss 451, 602.
That the inspection provisions of the Acts do not generally
apply to meat and poultry products prepared in retail estab-
lishments is tolerably clear. So far as we can tell, this had
been settled for some time as a result of a 1972 Opinion of the
Attorney General regarding the Meat Inspection Act, an
opinion we find thoroughly convincing. Compare Benavides
v. DEA, 968 F.2d 1243, 1248 (D.C. Cir. 1992). The Meat
Inspection Act lists the sorts of establishments subject to
federal inspection: "any slaughtering, meat-canning, salting,
packing, rendering, or similar establishment." See 21 U.S.C.
s 606. Because the list does not include retail establish-
ments, one would suppose that meats prepared in retail
__________
3 We will refer to these provisions of the two statutes as the
"inspection provisions," or the "inspection requirements."
stores are not subject to the federal inspection requirements.
See, e.g., Michigan Citizens for an Indep. Press v. Thorn-
burgh, 868 F.2d 1285, 1292-93 (D.C. Cir. 1989). Retail stores
are not "similar" to the types of wholesale businesses listed in
the statute. See 21 U.S.C. s 606. The functions of slaugh-
tering and packing plants differ considerably from those of
retail establishments. See Applicability of the Federal Meat
Inspection Act to Retail Establishments, 42 Op. Att'y Gen.
461 (1972). The Meat Inspection Act thus strongly suggests
that retail establishments are exempt from the federal inspec-
tion requirements. See D & W Food Centers, Inc. v. Block,
786 F.2d 751, 756-57 (6th Cir. 1986). That the statute does
not contain an explicit exception for retail operations is not
particularly significant. A statute listing the things it does
cover exempts, by omission, the things it does not list. As to
the items omitted, it is a mistake to say that Congress has
been silent. Congress has spoken--these are matters outside
the scope of the statute. See Engine Mfrs. Ass'n v. EPA, 88
F.3d 1075, 1088 (D.C. Cir. 1996).
Another provision in the Meat Inspection Act fortifies the
conclusion that retail establishments are not subject to in-
spection. The Act applies when meat food products are
"prepared" in the types of establishments listed. The Act
defines "prepared" to include cutting up or boning meat, see
21 U.S.C. s 601(l ), activities routinely performed in retail
stores. But the definition closes with the phrase "or other-
wise manufactured or processed," thus qualifying all the
activities mentioned. See id. Slicing ham in a retail store is
not "processing" or "manufacturing," as those terms are
generally understood. See 42 Op. Att'y Gen. at 461-62.
Operations traditional to retail stores therefore fall outside
the scope of the Meat Inspection Act.
The language of the Poultry Inspection Act points in the
same direction. This Act requires inspection "whenever pro-
cessing operations are being conducted ... of the carcass of
each bird processed," a phrasing somewhat different than the
parallel section of the Meat Inspection Act. See 21 U.S.C.
s 455(b), compare s 606. As the Agriculture Department
points out, the Poultry Inspection Act also does not contain a
descriptive list of establishments subject to inspection, but
refers generally to "processing operations." See 21 U.S.C.
s 455(b). Although the Attorney General's opinion does not
discuss the Poultry Inspection Act, some elements of his
analysis are nevertheless apt. The Poultry Inspection Act's
definition of "processed," like the Meat Inspection Act's defi-
nition of "prepared," could be read to reach routine retail
store activities such as slicing poultry. See 21 U.S.C.
ss 601(l ), 453(w). But slicing a chicken or turkey is not a
"processing operation[ ]," as that term is generally under-
stood, just as slicing a ham at a retail store is not "manufac-
turing" or "processing," as those terms are generally under-
stood. Compare 42 Op. Att'y Gen. at 461-62.4 Given the
desirability of reading these two Acts in pari materia, we
therefore believe retail stores where poultry is simply sliced
and packaged also fall outside the scope of the inspection
provision in the Poultry Inspection Act.
Another feature common to both Acts tends to show that
the inspection provisions do not reach retail establishments.
See 42 Op. Att'y Gen. at 466-67. Provisions in both the Meat
and Poultry Inspection Acts exempt retail establishments
located in "designated" States if their products are distribut-
ed intrastate. See 21 U.S.C. ss 454(c)(2), 661(c)(2).5 The
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4 In addition, the Poultry Inspection Act directs the Secretary to
"exempt from specific provisions of this chapter," by regulation,
"retail dealers with respect to poultry products sold directly to
consumers in individual retail stores, if the only processing opera-
tion performed by such retail dealers is the cutting up of poultry
products on the premises where such sales to consumers are made."
See 21 U.S.C. s 464(a)(1); 9 C.F.R. s 381.10(a)(1) (exempting such
retail dealers from "[t]he requirements of the Act and the regula-
tions for inspection"). The parties do not discuss the application of
this provision to this case.
5 The exemptions, virtually identical in both Acts, state:
The provisions of this chapter requiring inspection of [the
preparation of meat and meat food products or the processing
of poultry products] shall not apply to operations of types
traditionally and usually conducted at retail stores and restau-
rants, when conducted at any retail store or restaurant or
Secretary of Agriculture may designate a State if it fails to
develop or enforce inspection requirements equivalent to the
federal inspection regime. The Secretary may then apply
those requirements to the State's intrastate establishments,
except retail stores engaging in intrastate sales. See 21
U.S.C. ss 454(c)(1),(2), 661(c)(1),(2). One might argue that
the general inspection provisions apply to retail stores, be-
cause the special retail exemptions for designated States
would be unnecessary if they did not. See Bennett v. Spear,
520 U.S. 154, 173 (1997). Were that logic to prevail, however,
retail stores located in States having inferior inspection sys-
tems and distributing their products intrastate would wind up
being exempt from the federal requirements, while others
would not be. That would be a very strange result and one
that Congress could not possibly have intended, as legislative
history relating to the Meat Inspection Act indicates. See 42
Op. Att'y Gen. at 462-66, 468; see also Public Citizen v.
Department of Justice, 491 U.S. 440, 454-55 (1989); City of
Cleveland v. U.S. Nuclear Regulatory Comm'n, 68 F.3d 1361,
1366 n.4 (D.C. Cir. 1995).
The more sensible explanation, and one the Attorney Gen-
eral endorsed, is that Congress added the exemption in
s 661(c)(2) of the Meat Inspection Act to clarify that retail
stores were not the type of establishment included within the
federal inspection requirements. See 42 Op. Att'y Gen. at
467-68. We are led to the same conclusion regarding the
Poultry Inspection Act's identical express exemption. See 21
U.S.C. s 454(c)(2). Congress amended the Poultry Inspec-
tion Act to include Federal-State cooperation provisions (of
which the exemption is one) similar to those in the Meat
Inspection Act. See H.R. Rep. No. 90-1333, at 22 (1968),
reprinted in 1968 U.S.C.C.A.N. 3445-46.
__________
similar retail-type establishment for sale in normal retail quan-
tities or service of such articles to consumers at such establish-
ments if such establishments are subject to such inspection
provisions only under this paragraph (c)....
See 21 U.S.C. ss 454(c)(2), 661(c)(2) (emphasis added).
If Honey Baked Ham continued to operate its retail stores
as it had in the past, the stores would not be subject to
federal inspection for the reasons just given. That the com-
pany's retail stores supply temporary kiosks during holiday
seasons does not, in our view, transform them into "hybrid
retail/wholesale" establishments to which the federal inspec-
tion requirements apply. A wholesaler does not sell to the
ultimate consumer; a wholesaler is a middleman who sells to
a retailer. To the extent that Honey Baked Ham's retail
stores supply the company's kiosks, they still do not fit within
the category of "wholesalers." The stores do not sell their
products to the kiosks; the kiosks are simply an extension of
the stores' retail operations. According to the Agriculture
Department's own regulations, the company's stores fit within
the description of retail establishments, kiosks or not. Their
operations, of the sort "traditionally and usually conducted at
retail stores," will not change when they supply kiosks. The
stores glaze, slice and package products. See 9 C.F.R.
ss 303.1(d)(2)(i)(a),(c),(e), 381.10(d)(2)(i). They sell to
consumers only, not to retailers. See 9 C.F.R.
ss 303.1(d)(2)(iii)(a), 381.10(d)(2)(iii)(a). They use meat and
poultry products that are federally- or State-inspected and
passed. See 9 C.F.R. ss 303.1(d)(2)(iii)(c), 381.10(d)(2)(iii)(c).
Although Honey Baked hopes to increase its business
through the kiosks, there is no indication that its sales to
consumers will exceed normal retail quantities. See 9 C.F.R.
ss 303.1(d)(2)(ii), 381.10(d)(2)(ii). Because the company's re-
tail stores will not lose their retail character or become
"similar" to wholesale establishments when the kiosk system
is fully implemented, the stores are not required to submit to
federal inspection under the Meat and Poultry Inspection
Acts.
If we credited the Department's contention that the inspec-
tion provisions of the Acts reach retail establishments, and
that those establishments may be exempt only if they fall
within the Acts' express retail exemptions, we would still
come to the same conclusion.6 The Department says the
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6 It bears mention that the Department's contention must fail,
because the Acts' retail establishment exemptions do not exempt
express exemptions, and its own regulations, apply only when
meat and poultry are sold to consumers from the place where
these products are prepared. See 21 U.S.C. ss 661(c)(2),
454(c)(2); 9 C.F.R. ss 303.1(d)(1), 381.10(d)(1).7 When the
kiosks are up and running, the preparation would be done in
the retail stores, so the Department insists that federal
inspectors must occupy the premises. We find the Depart-
ment's interpretation of the express retail exemptions to be
arbitrary and capricious. See 5 U.S.C. s 706(2)(A); see
George E. Warren Corp. v. U.S. E.P.A., 159 F.3d 616, 622
(D.C. Cir. 1998). The Meat and Poultry Inspection Acts seek
to protect the "health and welfare of consumers ... by
assuring that [poultry products or meat products] distributed
to them are wholesome, not adulterated...." See 21 U.S.C.
ss 451, 602. The Department's construction of the express
retail exemptions bears no logical relationship to that goal.
The traditional preparation processes that occur at retail
stores pose no greater threat to the public health when the
fully prepared product is later sold at another location. The
study of the risks of contamination from simple retail store
processing, on which the Department relies, does not suggest
otherwise. And if transporting the prepared product creates
an additional risk of contamination, inspection at the originat-
ing retail stores is an utterly useless measure of protection.
As the company points out, the transportation would take
place out of the presence of a federal inspector.
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retail establishments generally, but only those that are located in
designated States and distribute their products intrastate. See 21
U.S.C. ss 661(c)(2), 454(c)(2).
7 The Department provides two sets of regulations. The relevant
portions are virtually identical. They state:
The requirements of the Act and the regulations ... for
inspection of the [preparation of meat products or processing of
poultry products] do not apply to operations of types tradition-
ally and usually conducted at retail stores and restaurants,
when conducted at any retail store or restaurant or similar
retail-type establishment for sale in normal retail quantities or
service of such articles to consumers at such establishments.
See 9 C.F.R. ss 303.1(d)(1), 381.10(d)(1).
The Department's adherence to its so-called "two-store"
policy also suggests that its interpretation of the retail ex-
emptions is arbitrary and unrelated to the purpose of the
Meat and Poultry Inspection Acts. Under this policy, which
has not been published, a retail store apparently is permitted
to prepare products on the store's premises and to sell them
to customers there and at one other location without trigger-
ing the federal inspection requirements. The policy applies
to single store operations only. Because Honey Baked Ham
owns many retail stores, it falls outside of the "two-store"
policy. Honey Baked Ham presumably could take advantage
of the policy if, like some of its competitors, its retail outlets
were run as franchise operations. If there were a health risk
posed by off-site sales of products prepared at retail stores, it
is impossible to understand why the form of corporate organi-
zation ought to be decisive. The short of the matter is that
the Department's "two-store" policy further undermines its
claim that public health concerns mandate federal inspection
of those Honey Baked retail stores supplying hams and
turkeys to kiosks in nearby shopping malls.
For the foregoing reasons the judgment of the district
court is affirmed.
So ordered.