Animal Legal Defense Fund v. Sonny Perdue

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 4, 2017 Decided September 29, 2017

No. 16-5073

ANIMAL LEGAL DEFENSE FUND, INC., ET AL.,

APPELLANTS

v.

SONNY PERDUE, SECRETARY, UNITED STATES DEPARTMENT

OF AGRICULTURE AND ROBERT GIBBENS, WESTERN REGIONAL

DIRECTOR, ANIMAL AND PLANT HEALTH INSPECTION SERVICE,

UNITED STATES DEPARTMENT OF AGRICULTURE,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:14-cv-01462)

Stefanie Wilson argued the cause and filed the briefs for

appellants. Katherine A. Meyer entered an appearance.

Delcianna J. Winders was on the brief for amicus curiae

Delcianna J. Winders in support of plaintiffs-appellants.

Anna E. Frostic was on the brief for amici curiae The

Humane Society of the United States and The Fund for

Animals in support of plaintiffs-appellants.

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Jeremy S. Simon, Assistant U.S. Attorney, argued the

cause for appellees. With him on the brief was R. Craig

Lawrence, Assistant U.S. Attorney.

Before: GARLAND, Chief Judge, GRIFFITH, Circuit Judge,

and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

Opinion concurring in part and concurring in the judgment

filed by Circuit Judge GRIFFITH.

EDWARDS, Senior Circuit Judge: The Animal Welfare Act

(“AWA” or “Act”) charges the United States Department of

Agriculture (“USDA”) with administering a licensing scheme

for animal exhibitors, including zoos. 7 U.S.C. § 2133 (2012).

The Act directs the Secretary of Agriculture (“Secretary”) to

promulgate regulations governing minimum animal housing

and care standards, id. § 2143, and also to issue licenses to

entities and individuals seeking to engage in exhibition

activities, id. § 2133. Although the Act leaves many regulatory

details to the agency’s discretion, it specifies that “no license

shall be issued until the dealer or exhibitor shall have

demonstrated that his facilities comply with the standards

promulgated by the Secretary.” Id.

USDA has bifurcated its approach to licensing: For initial

license applications, an applicant must agree to comply with

the agency’s prescribed standards and regulations, pay an

application fee, keep its facilities available for agency

inspection, and pass an agency compliance inspection of its

facilities before the license may be issued. 9 C.F.R. §§ 2.1-

2.12. For license renewals, an applicant must submit an annual

report, pay the appropriate application fee, certify compliance

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and agree to continue to comply with agency standards and

regulations, id., and agree to keep its facilities available for

inspection by the agency “to ascertain the applicant’s

compliance with the standards and regulations,” id. § 2.3(a).

The agency treats the renewal procedure as administrative –

that is, if the requirements are met, the agency will issue a

license renewal. Id. § 2.2(b). Separately, USDA conducts

random inspections of licensed facilities as part of its

enforcement regime. See id. § 2.126. Violations discovered

during these inspections may lead to license revocation or

suspension, following notice and an opportunity for a hearing.

Id. § 2.12; 7 U.S.C. § 2149.

Tom and Pamela Sellner own and operate the Cricket

Hollow Zoo in Manchester, Iowa. USDA granted their initial

license application in 1994, and it has renewed their license

each year since. Appellants Tracey and Lisa Kuehl, along with

the Animal Legal Defense Fund (“ALDF”), a non-profit animal

rights organization, brought suit against the agency challenging

its most recent renewal of the Sellners’ license. Appellants

alleged that, at the time of the renewal, the agency was aware

that Cricket Hollow was in violation of numerous animal

welfare requirements under the Act and its implementing

regulations. Accordingly, they argued, the agency’s decision to

renew the Sellners’ license was contrary to AWA’s

requirement that “no . . . license shall be issued until the . . .

exhibitor shall have demonstrated that his facilities comply

with the standards promulgated by the Secretary.” 7 U.S.C.

§ 2133. They also asserted that the agency’s reliance on the

Sellners’ self-certification of compliance as part of its renewal

determination, despite having knowledge that the certification

was false, was arbitrary and capricious in violation of the

Administrative Procedure Act (“APA”).

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The District Court dismissed the case, concluding that

USDA’s license renewal regulations constituted a permissible

interpretation of the Act. ALDF v. Vilsack, 169 F. Supp. 3d 6

(D.D.C. 2016). Finding that the challenged license renewal was

issued in accordance with those regulations, the court held that

none of the challenges in the complaint could succeed. Id. at

20. The Kuehls and ALDF appealed the District Court’s

decision to this court. We find that AWA’s compliance

demonstration requirement does not unambiguously preclude

USDA’s license renewal scheme and that the scheme is not

facially unreasonable. Accordingly, for the reasons set forth

below, we affirm the judgment of the District Court on the

statutory claim. However, we vacate the District Court’s order

granting the Government’s motion to dismiss Appellants’

arbitrary and capricious claim, and remand the case to the

District Court with instructions to remand the record to the

agency for further proceedings consistent with this opinion.

I. BACKGROUND

A. Statutory and Regulatory Background

Congress enacted the Animal Welfare Act in 1966 to

ensure the humane treatment of animals used in medical

research. Pub. L. 89-544, 80 Stat. 350 (Aug. 24, 1966); see also

7 U.S.C. § 2131. In 1970, Congress amended the Act to cover

animal “exhibitors,” a category that includes zoos. Pub. L. 91-

579, 84 Stat. 1560-61 (Dec. 24, 1970); see also 7 U.S.C.

§ 2132(h). The Act authorizes the Secretary of Agriculture to

“promulgate standards to govern the humane handling, care,

treatment, and transportation of animals by . . . exhibitors,”

including minimum standards addressing the animals’

“handling, housing, feeding, watering, sanitation, ventilation,

shelter . . . , adequate veterinary care, . . . [and] for a physical

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environment adequate to promote the psychological well-being

of primates.” 7 U.S.C. § 2143(a).

In order to ensure compliance with those standards, the Act

prohibits an individual from exhibiting animals “unless and

until” he or she has “obtained a license from the Secretary and

such license shall not have been suspended or revoked.” Id.

§ 2134. The Act delegates to the Secretary authority to

prescribe the “form and manner” by which an exhibitor must

apply for a license, “[p]rovided[] [t]hat no such license shall be

issued until the . . . exhibitor shall have demonstrated that his

facilities comply with the standards promulgated by the

Secretary pursuant to section 2143 of [the AWA].” Id. § 2133

(emphasis omitted).

The Act also grants the agency enforcement authority. “If

the Secretary has reason to believe that any person licensed as

a[n] . . . exhibitor . . . has violated or is violating any provision

of [the Act], or any of the rules or regulations or standards

promulgated by the Secretary [t]hereunder, he may suspend

such person’s license temporarily . . . .” Id. § 2149(a). “[A]fter

notice and opportunity for hearing,” the Secretary “may

suspend for such additional period as he may specify, or revoke

such license, if such violation is determined to have occurred.”

Id. The Secretary may also impose civil and criminal penalties.

Id. § 2149(b), (d).

Finally, the Secretary may “promulgate such rules,

regulations, and orders as he may deem necessary in order to

effectuate the purposes of [the statute].” Id. § 2151.

The Secretary has delegated his responsibilities under the

Act to the Administrator of the Animal and Plant Health

Inspection Service (“APHIS”). See Animal Welfare;

Inspection, Licensing, and Procurement of Animals, 69 Fed.

6

Reg. 42089, 42089 (July 14, 2004) (to be codified at 9 C.F.R.

pts. 1, 2). Pursuant to that authority, APHIS has adopted a

comprehensive scheme of animal welfare requirements

applicable to licensees. See 9 C.F.R. §§ 3.1-3.142 (2017).

These include general and species-specific requirements, such

as providing potable water daily, id. § 3.55, keeping enclosures

reasonably free of waste and regularly sanitized, id. § 3.1,

removing feces and food waste daily, id. § 3.11, and addressing

social needs of primates to “promote [their] psychological

well-being,” id. § 3.81.

The agency has also promulgated a series of regulations

governing the granting, renewal, and revocation of animal

exhibition licenses. Since 1989, the implementing regulations

have distinguished between applications for an initial license

and those for annual license renewal. In their present form, the

regulations direct that an applicant for an initial license must

(1) “acknowledge receipt of the regulations and standards and

agree to comply with them by signing the application form,”

id. § 2.2(a); (2) submit the appropriate fee, id. § 2.6; and (3) “be

inspected by APHIS and demonstrate compliance with the

regulations and standards . . . before APHIS will issue a

license,” id. § 2.3(b). By contrast, an applicant for a license

renewal must (1) pay the annual fee before expiration of the

license, id. § 2.1(d)(1); (2) self-certify “by signing the

application form that to the best of the applicant’s knowledge

and belief, he or she is in compliance with the regulations and

standards and agrees to continue to comply with [the same],”

id. § 2.2(b); and (3) submit an annual report detailing the

number of animals owned, held, or exhibited at his or her

facility, id. § 2.7. Both types of applicants “must make his or

her animals, premises, facilities, vehicles, equipment, other

premises, and records available for inspection during business

hours and at other times mutually agreeable to the applicant and

APHIS.” Id. § 2.3(a). “A license will be issued to any

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applicant” that has met the relevant regulatory requirements

and has paid the application and license fees. Id. § 2.1(c).

B. Factual and Procedural Background

Tom and Pamela Sellner first applied for an animal

exhibition license over twenty years ago. At the time, the

couple operated a small “mobile zoo” that included only a few

animals. See Kuehl v. Sellner, 161 F. Supp. 3d 678, 690 (N.D.

Iowa 2016). USDA granted the application and issued a license

for Cricket Hollow Zoo on May 27, 1994. Appellees’ Br. 16.

The Sellners have since complied with the administrative

license renewal requirements at every anniversary of the

license’s issuance. USDA has, in turn, granted their renewal

applications each year. Id. The Sellners’ 2015 license renewal

application indicates that the Zoo now houses approximately

193 animals. 2015 License Renewal Application, reprinted in

Appendix (“App.”) 384.

Sisters Tracey and Lisa Kuehl are Iowa residents.

Supplemental Complaint (“Supp. Compl.”) ¶¶ 13-14, 24,

reprinted in App. 46, 50. They allege that they visited Cricket

Hollow Zoo on several occasions between 2012 and 2013. Id.

¶¶ 13-30, App. 46-51. Both sisters claim that they experienced

distress and anguish as a result of witnessing animals in what

they felt were inhumane and harmful conditions. Id. Tracey

Kuehl asserts that she observed animals in enclosures that had

“standing water and accumulating excrement,” and that “a lion

was repeatedly ramming itself against the cage wall,” which

she interpreted as a sign of obvious psychological distress. Id.

¶ 15, App. 47. She later learned that three Meishan piglets had

died in their enclosure and that their bodies had not been

removed before the facility was opened to the public. Id. ¶¶ 18-

19, App. 48. Lisa Kuehl similarly alleges that she witnessed

animals in isolated confinement and in cages that lacked

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drinking water. Id. ¶¶ 25-28, App. 50-51. She asserts that she

observed “lions and wolves covered with flies . . . [which] filled

up the interior of the animals’ ears,” as well as a baby baboon

who was “separated from the other animals and being

continuously handled by humans.” Id. ¶¶ 25, 27, App. 50.

The Kuehls met with several state public officials and

organizations to share their concerns about the Zoo. Id. ¶¶ 19-

20, 26, App. 48-50. Tracey Kuehl repeatedly wrote to USDA

about the conditions of the animals’ enclosures. Id. In 2014,

she wrote a letter asking that the agency “carefully review the

consistent poor record of compliance [with AWA standards]

and not renew [the Zoo’s] license to exhibit the animals to the

public.” Id. ¶ 20, App. 49.

The Kuehls also assert that USDA officials had knowledge,

apart from their letters, of Cricket Hollow’s failure to comply

with certain AWA regulations and standards. Appellants’ Br.

3-5; see also Appellees’ Br. 16-17. Appellants allege that

agency inspectors have repeatedly reported that the animals

lacked adequate veterinary care, and that “[t]here are not

enough employees to clean [the Zoo] to meet appropriate

husbandry standards . . . [or] provide for the health and well-

being of the animals.” Supp. Compl. ¶¶ 99-129, App. 63-68.

They assert that USDA has sent official warnings to the

Sellners for these “numerous non-compliances,” id. ¶ 117,

App. 66, and the USDA regional director has concluded that “it

is clear that there is a chronic management problem” at the Zoo,

id. ¶ 108, App. 64. Nonetheless, the agency granted the

Sellners’ license renewal application in May of 2014. Id. ¶ 81,

App. 59.

Upon learning of the agency’s 2014 renewal decision, the

Kuehls and ALDF filed this action against the Secretary in the

District Court on August 25, 2014. The original complaint

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alleged that USDA’s decision to renew the Zoo’s license in

2014 violated the Act because the Sellners had not

“demonstrated that [their] facilities comply” with the requisite

animal welfare provisions of the Act or its regulations, which

Appellants claim AWA § 2133 requires before a renewal may

be issued. Complaint ¶¶ 123-28, ALDF, 169 F. Supp. 3d 6

(D.D.C. 2016) (Dkt. No. 1). In the alternative, the complaint

asserted that the agency’s reliance on the Sellners’ self-

certification of compliance in connection with the renewal

decision was arbitrary and capricious in violation of the

Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2)(A).

Id.

In 2015, USDA again renewed the Zoo’s license, and

Appellants filed a supplemental complaint on July 17, 2015,

challenging the 2015 renewal and the Zoo’s “pattern and

practice” of renewing Cricket Hollow Zoo’s license despite

knowing that the Zoo is not in compliance with AWA

regulations and standards. Supp. Compl. ¶¶ 131-36, App. 68-

69.

On July 28, 2015, USDA moved to dismiss the suit under

Federal Rule of Civil Procedure 12(b)(6) for failure to state a

claim. Appellants opposed that motion.

When USDA produced its administrative record to the

District Court, it included only the Sellners’ renewal

application, annual report, and evidence of payment of the

renewal fee. While the Government’s motion to dismiss was

pending, Appellants moved for the court to compel inclusion

of additional administrative documents related to the Cricket

Hollow Zoo which they alleged were in the agency’s records,

including inspection reports indicating that the Zoo was out of

compliance with AWA standards. The agency opposed the

motion, claiming that it did not rely on those records in making

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its renewal decision and that they were properly excluded from

the record on review. On June 23, 2015, the District Court

denied Appellants’ motion. ALDF v. Vilsack, 110 F. Supp. 3d

157, 161-62 (D.D.C. 2015).

On March 24, 2016, the District Court granted USDA’s

motion to dismiss the complaint. ALDF, 169 F. Supp. 3d at 20.

The court first concluded that the AWA is ambiguous as to

whether “issu[ance of] a license” encompassed renewals. Id. at

13-15. It then accepted the interpretation put forth by

Government counsel that § 2133 applies only to initial license

applications. Id. at 16-19. Determining that the agency had

“exercised its expertise to craft a reasonable license renewal

scheme,” id. at 19 (quoting ALDF v. USDA, 789 F.3d 1206,

1225 (11th Cir. 2015)), the court concluded that “under the

Chevron doctrine, the Court need not say any more in order to

conclude that the 2015 renewal of the Cricket Hollow Zoo’s

license was not unlawful” under the AWA. Id.

The District Court also rejected Appellants’ arbitrary and

capricious claim. It held that there was “no basis . . . to conclude

that the licensing decision was arbitrary and capricious or an

abuse of discretion” because it was undisputed that the Sellners

satisfied the administrative criteria for license renewal, and the

regulatory framework afforded no discretion to the agency in

implementing the renewal process. Id. Finally, the court held

that Appellants’ “pattern and practice” claim necessarily failed

as a result of its determination that the regulatory scheme was

consistent with both the AWA and APA. Id. This appeal

followed.

As of July 30, 2015, USDA had filed an administrative

complaint against the Zoo and commenced a formal

investigation into its substantive violations of the Act.

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Appellees’ Br. 17. That investigation is pending before the

agency. Id.

II. ANALYSIS

A. Standard of Review

We review de novo the District Court’s dismissal for failure

to state a claim upon which relief may be granted under Federal

Rule of Civil Procedure 12(b)(6). See Gilvin v. Fire, 259 F.3d

749, 756 (D.C. Cir. 2001). In doing so, “we must treat the

complaint’s factual allegations as true, must grant plaintiff the

benefit of all reasonable inferences from the facts alleged, and

may uphold the dismissal only if it appears beyond doubt that

the plaintiff can prove no set of facts in support of his claim

which would entitle him to relief.” Id. (internal quotation marks

omitted).

The APA requires that we “hold unlawful and set aside

agency action” that is “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” 5 U.S.C.

§ 706(2)(A). We review USDA’s interpretation of the AWA

under the familiar standard established in Chevron U.S.A. Inc.

v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). See ALDF

v. Glickman, 204 F.3d 229, 233 (D.C. Cir. 2000). Under the

Chevron framework,

an agency’s power to regulate “is limited to the

scope of the authority Congress has delegated to

it.” Am. Library Ass’n v. FCC, 406 F.3d 689, 698

(D.C. Cir. 2005). Pursuant to Chevron Step One,

if the intent of Congress is clear, the reviewing

court must give effect to that unambiguously

expressed intent. If Congress has not directly

addressed the precise question at issue, the

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reviewing court proceeds to Chevron Step Two.

Under Step Two, “[i]f Congress has explicitly

left a gap for the agency to fill, there is an express

delegation of authority to the agency to elucidate

a specific provision of the statute by regulation.

Such legislative regulations are given controlling

weight unless they are . . . manifestly contrary to

the statute.” Chevron, 467 U.S. at 843-44. Where

a “legislative delegation to an agency on a

particular question is implicit rather than

explicit,” the reviewing court must uphold any

“reasonable interpretation made by the

administrator of [that] agency.” Id. at 844. But

deference to an agency’s interpretation of its

enabling statute “is due only when the agency

acts pursuant to delegated authority.” Am.

Library Ass’n, 406 F.3d at 699.

EDWARDS, ELLIOT, & LEVY, FEDERAL STANDARDS OF REVIEW

166-67 (2d ed. 2013).

We also review the agency’s exercise of its delegated

authority under the traditional “arbitrary and capricious”

standard. Agency action is arbitrary and capricious “if the

agency has relied on factors which Congress has not intended

it to consider, entirely failed to consider an important aspect of

the problem, [or] offered an explanation for its decision that

runs counter to the evidence before the agency.” Motor Vehicle

Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43

(1983). The court’s task in evaluating agency action under this

standard is to ensure that “the process by which [the agency]

reache[d] [its] result [was] logical and rational.” Michigan v.

EPA, 135 S. Ct. 2699, 2706 (2015) (quoting Allentown Mack

Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998)). In

doing so, however, the court must “not . . . substitute its [own]

13

judgment for that of the agency.” State Farm, 463 U.S. at 43.

The court will ordinarily uphold an agency’s decision so long

as the agency “examine[d] the relevant data and articulate[d] a

satisfactory explanation for its action[,] including a rational

connection between the facts found and the choice made.” Id.

(internal quotation marks omitted).

Finally, we review the “[D]istrict [C]ourt’s refusal to

supplement the administrative record for abuse of discretion.”

Am. Wildlands v. Kempthorne, 530 F.3d 991, 1002 (D.C. Cir.

2008). “When reviewing agency action under the APA, we

review ‘the whole record or those parts of it cited by a party.’”

Id. (quoting 5 U.S.C. § 706). The administrative record

typically consists of “the order involved; any findings or

reports on which it is based; and the pleadings, evidence, and

other parts of the proceedings before the agency.” FED. R. APP.

P. 16(a). We allow parties to supplement the record only when

they are able to “demonstrate unusual circumstances justifying

a departure from this general rule.” Am. Wildlands, 530 F.3d at

1002 (internal quotation marks omitted). “We have recognized

such circumstances in at least three instances: (1) ‘[T]he

agency deliberately or negligently excluded documents that

may have been adverse to its decision’; (2) ‘the [D]istrict

[C]ourt needed to supplement the record with ‘background

information’ in order to determine whether the agency

considered all of the relevant factors’; or (3) ‘the agency failed

to explain administrative action so as to frustrate judicial

review.’” Id. (quoting James Madison Ltd. by Hecht v. Ludwig,

82 F.3d 1085, 1095 (D.C. Cir. 1996)).

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B. The Statutory Claim

1. USDA’s Interpretation of the Statute

The central question presented in this appeal is whether

APHIS’ renewal of the Sellners’ license was contrary to § 2133

of the Act. That provision states, in relevant part, that:

The Secretary shall issue licenses to dealers and

exhibitors upon application therefor in such form

and manner as he may prescribe and upon

payment of such fee established pursuant to 2153

of this title: Provided, That no such license shall

be issued until the dealer or exhibitor shall have

demonstrated that his facilities comply with the

standards promulgated by the Secretary pursuant

to section 2143 of this title.

7 U.S.C. § 2133. Appellants argue that, because the renewal of

a license involves issuance of a license, an exhibitor must have

“demonstrated that his facilities comply” with AWA standards

in order to be eligible for a license renewal. Because USDA’s

regulations do not require an on-site “inspection” (and the

agency did not conduct one) to determine that Cricket Hollow

Zoo had returned to compliance before renewing its license in

2015, Appellants claim that the renewal violated the statute.

The parties consequently spent much time in their briefs and at

oral argument debating whether a license is “issued” when it is

renewed.

On this point, Appellants argue that “issue” unambiguously

encompasses license renewal. Appellants’ Br. 32. In their view,

a renewal is merely a “form and manner” of application for a

license. Id. at 33. It thus falls under § 2133 and is subject to the

same restrictions that apply to initial license grants under that

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provision. Id. at 32. In particular, Appellants argue that § 2133

mandates that the agency withhold a license’s renewal until the

applicant affirmatively demonstrates compliance with the

regulations and standards. Id. at 26-27. The fact that the agency

was aware at the time it granted the 2015 renewal that the

Sellners were not in compliance, Appellants claim, indicates

that the decision to grant the renewal necessarily violated the

Act. Id. They further contend that the agency’s automatic

renewal scheme violates both the statutory text and the intent

behind the AWA. Id. at 27.

In addition, Appellants contend that the agency should not

prevail even if the court considers “issue” to be ambiguous. Id.

at 39. They note that the Secretary has never issued a regulation

through notice-and-comment rulemaking stating that renewal

of a license does not involve the issuance of a license and so is

not governed by § 2133. Id. at 40. Rather, they argue that this

position was first articulated in a declaration the Government

submitted in the course of unrelated litigation in 2013. Id.

(citing Dr. Elizabeth Goldentyer Declaration (March 24, 2013),

Ray v. Vilsack, No. 5:12-CV-212-BO, 2014 WL 3721357

(E.D.N.C. July 24, 2014)), reprinted in App. 258. Appellants

point to earlier iterations of USDA’s regulations that they claim

“explicitly disavowed” the position that license renewal

applicants need not demonstrate compliance with the

regulations and standards. Id. at 41-42 (quoting Notice of

Proposed Rulemaking, Animal Welfare Regulations, 54 Fed.

Reg. 10835, 10840 (March 15, 1989); Animal Welfare;

Licensing and Records, 60 Fed. Reg. 13893, 13894 (March 15,

1995)). Therefore, according to Appellants, this interpretation

of the statute is merely a “post hoc litigation position” that is

not entitled to Chevron deference. Id. at 39, 44-45 (quoting

Gerber v. Norton, 294 F.3d 173, 184 (D.C. Cir. 2002)).

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In response, USDA argues that the statute “is silent as to

the need for license renewal and any requirements for

renewal.” Appellees’ Br. 24 (capitalization and emphasis

omitted). As a result, the agency asserts, the court should defer

to its reasonable interpretation that no “demonstration”

requirement is applicable to renewal applications. Id. at 22.

The Government relies on the Eleventh Circuit’s analysis of

the definition of “issue” in a similar case, arguing that its plain

meaning “does not necessarily include ‘renew.’” Id. at 26

(quoting ALDF, 789 F.3d at 1216). It urges the court to adopt

the Eleventh Circuit’s position that “[n]o license is given out

during the renewal process” and that “Congress has [not]

spoken to the precise question” of whether § 2133 governs

renewals. Id.; see also People for the Ethical Treatment

of Animals v. USDA, 861 F.3d 502, 509 (4th Cir. 2017).

Yet, neither in its briefs nor at oral argument was agency

counsel able to identify anything in the agency’s regulations to

support this position. Indeed, at oral argument, counsel

appeared to concede that the Government developed its

interpretation of “issue” in response to Appellants’ briefing,

rather than through rulemaking or any other agency

proceeding. See Tr. of Oral Argument at 35-36.

The “issue” debate thus confuses the question before the

court. The AWA implementing regulations make it clear that

the agency interprets the statute not to require an existing

licensee to satisfy the same requirements that an applicant for

an initial license must satisfy in order to have its license

renewed. See 9 C.F.R. §§ 2.1-2.3. Nothing in the agency’s

regulations suggests that USDA interprets § 2133 as not

applying to renewals, or even that it believes renewal

applicants need not demonstrate compliance with the

regulations and standards in order to qualify for a renewal

license. Rather, USDA’s position since at least 1989 has been

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that it has broad authority, conferred under the AWA, to fill

any gaps in the statute by implementing an administrative

renewal scheme that imposes different requirements on

existing licensees than apply to initial license applicants.

In support of this view, the agency’s regulations state:

Application for license renewal. APHIS will

renew a license after the applicant certifies by

signing the application form that, to the best of

the applicant’s knowledge and belief, he or she is

in compliance with the regulations and standards

and agrees to continue to comply with the

regulations and standards. APHIS will supply a

copy of the applicable regulations and standards

to the applicant upon request.

9 C.F.R. § 2.2(b).

Each applicant must demonstrate that his or her

premises and any animals, facilities, vehicles,

equipment, or other premises used or intended

for use in the business comply with the

regulations and standards set forth in parts 2 and

3 of this subchapter. Each applicant for an initial

license or license renewal must make his or her

animals, premises, facilities, vehicles,

equipment, other premises, and records available

for inspection during business hours and at other

times mutually agreeable to the applicant and

APHIS, to ascertain the applicant’s compliance

with the standards and regulations.

Id. § 2.3(a).

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Each applicant for an initial license must be

inspected by APHIS and demonstrate

compliance with the regulations and standards, as

required in paragraph (a) of this section, before

APHIS will issue a license. . . .

Id. § 2.3(b). See Appellees’ Br. 11-12, 37-39. It is clear from

the foregoing provisions that the agency treats applicants for

initial licenses and applicants for license renewals differently.

It is also noteworthy that neither these regulatory provisions

nor any others to which the parties point purport to define

“issue” in § 2133 of the Act.

The Government’s attention to the “issue” debate is thus

merely a tangent. Rather, the heart of the Government’s

argument is that “the statute is silent as to whether an existing

licensee must satisfy the same requirements, or any

requirements at all, to have its license renewed.” Appellees’

Br. 3. The Government is explicit in contending that “the

USDA’s administrative regulatory renewal scheme is based

upon a permissible construction of the AWA.” Id. at 31

(capitalization and emphasis omitted). This entire argument

rests on the cited agency regulations, which themselves focus

on what an applicant must “demonstrate” in order to qualify for

either an initial license or a renewal. Id. at 31-38. A careful

review of the regulatory history of the licensing scheme makes

this clear.

In 1987, USDA published in the Federal Register a

proposal to amend its licensing regulations. Notice of Proposed

Rulemaking, Animal Welfare Regulations, 52 Fed. Reg.

10,298 (Mar. 31, 1987). In 1989, the agency issued a second

notice of proposed rulemaking, in which it proposed a revision

that would “require that each applicant for a license or renewal

of a license must demonstrate compliance with the regulations

19

and standards.” 54 Fed. Reg. 10,840 (emphasis added). The

notice also clarified “that licenses are valid and effective if

renewed each year and have not been terminated, suspended,

or revoked” in order to “avoid any misconception that every

license automatically terminates at the end of its 1-year term

and that each year an applicant must follow the procedure

applicable to obtaining an initial license.” Id. at 10,841.

Pursuant to this regulatory initiative, the agency proposed

several revisions to clarify that different requirements for

demonstrating compliance apply to license renewals and initial

license applications. See, e.g., id. at 10,838 (“We have made

conforming changes throughout Subpart A to differentiate

between new license applications and license renewals.”); id.

at 10,842 (revising proposed annual reporting requirement to

apply only to license renewal applications).

The Final Rule promulgated in 1989 was consistent with

the proposal. See Animal Welfare, 54 Fed. Reg. 36,123, 36,149

(Aug. 31, 1989). The subsection of the regulation entitled

“Demonstration of compliance with standards and regulations”

addressed and distinguished between the requirements for both

initial license and renewal applicants. Id. Section 2.3 stated that

“[e]ach applicant” – whether for an initial license or a license

renewal – “must demonstrate that his or her premises and any

animals, facilities, vehicles, equipment, or other premises used

or intended for use in the business comply” with the Act and

regulations. Id. The hurdles each type of applicant was required

to overcome in order to make this statutorily required showing

were not identical, however. Both types of applicants were

required to “make his or her animals, premises, facilities,

vehicles, equipment, other premises, and records available for

inspection,” but only applicants for an initial license had to

demonstrate compliance through an actual inspection before a

license could be granted. Id.

20

In 1995, USDA promulgated a Final Rule amending the

regulations to impose an additional self-certification

requirement on applicants for license renewal. See 60 Fed. Reg.

13,893. The stated purpose of this amendment was to “help

ensure that applicants for license renewal are in compliance

with the regulations . . . , thus promoting compliance with the

Animal Welfare Act.” Id.

Finally, in 2004, the agency expressly rejected commenter

suggestions to “add[] criteria for renewal of licenses” such that

“no license should be renewed unless the facility was inspected

and found compliant just prior to the renewal date.” 69 Fed.

Reg. 42,094. The agency determined that “[i]t is unrealistic and

counterproductive to make license renewal contingent on not

having any citations.” Id. The Final Rule also clarified that so

long as a license renewal applicant met the requirements set

forth in sections 2.2, 2.3, and 2.7, the agency would reissue the

license. Id. In other words, if the applicant submitted an annual

report, paid the appropriate application fee, certified

compliance and agreed to continue to comply with agency

standards and regulations, and agreed to keep the facility

available for inspection by the agency, the applicant would be

deemed to have complied with the requirements for issuing a

renewal license – including the compliance demonstration

requirement.

There is no language in any proposed or final rule, or in the

regulations themselves, to suggest either that license renewal

applicants are not required to make any demonstration of

compliance, or that license renewal applicants must

demonstrate compliance above and beyond the stated

requirements of self-certification and availability for

inspection as a condition precedent to renewing a license.

21

The regulations say nothing about the meaning of the term

“issue” under 7 U.S.C. § 2133 and do not suggest that USDA

has ever interpreted that section not to encompass license

renewal. We accordingly need not consider that interpretation.

Courts do not apply Chevron deference “to agency litigating

positions that are wholly unsupported by regulations, rulings,

or administrative practice.” Bowen v. Georgetown Univ. Hosp.,

488 U.S. 204, 212 (1988); see also City of Kansas City v. Dep’t

of Housing & Urban Dev., 923 F.2d 188, 192 (D.C. Cir. 1991)

(“That counsel advances a particular statutory interpretation

during the course of trial does not confer upon that

interpretation any special legitimacy. Deference under

Chevron . . . can be accorded only to a judgment of the agency

itself.”); Church of Scientology of Cal. v. I.R.S., 792 F.2d 153,

165 (D.C. Cir. 1986) (en banc) (Silberman, J., concurring)

(“Courts have rejected as inadequate agency counsel’s

articulation of a statutory interpretation when that

interpretation has been inconsistent with a prior administrative

construction[,] when the record evidence before the court

demonstrates no link between counsel’s interpretation and

administrative practice[,] or when agency counsel’s

interpretation is revealed as no more than a current litigating

position.” (internal citations and quotation marks omitted)).

We will instead focus our analysis on the agency’s

consistent interpretation, clearly evidenced by the regulatory

history, that the AWA leaves to the Secretary’s discretion how

to handle license renewals, and that as part of that discretion,

the Secretary may determine the appropriate means of

demonstrating compliance with the regulations and standards

applicable to licensed entities. This is consistent with USDA’s

core contention on appeal that its administrative renewal

scheme is a permissible interpretation of the Act, necessary to

fill the gaps left open by Congress’ decision not to address

renewal specifically. See Appellees’ Br. 31. The Government

22

confirmed at oral argument that its renewal scheme embodies

a permissible interpretation of § 2133’s “demonstrate”

requirement. See Tr. of Oral Argument at 36. And the

Government has previously defended its renewal scheme on

exactly this basis, explicitly arguing that “demonstrate” is

ambiguous and that its interpretation survives scrutiny under

Chevron. See USDA Reply Br. at 4, Ray v. Vilsack, 5:12-CV-

212-BO (E.D.N.C. Jan. 22, 2013) (No. 24) (“[S]tep one of

Chevron weighs in favor of the agency’s authority to construe

this statute and determine the means of demonstrating

compliance with the AWA. The renewal approval process . . .

satisfies step two of Chevron.”). It is this interpretation – which

is consistent with the agency’s established regulations and

administrative practice – that the court must evaluate to

determine whether the renewal scheme is permissible under the

statute. After all, “an agency’s action must be upheld, if at all,

on the basis articulated by the agency itself.” State Farm, 463

U.S. at 50 (citing SEC v. Chenery Corp., 332 U.S. 194, 196

(1947)).

2. Chevron Analysis

Appellants contend that USDA’s renewal of Cricket

Hollow Zoo’s license “even when the agency kn[ew] the

facility [was] operating in violation of the AWA and regulatory

standards, violates the plain language of” the statutory

requirement that no license may be issued until the exhibitor

“shall have demonstrated that his facilities comply with the

standards promulgated by the Secretary.” Appellants’ Br. 26-

27 (quoting 7 U.S.C. § 2133). Appellants appear to concede

that the agency granted the renewal only after the Sellners

complied with the renewal requirements set forth in the agency

regulations. Because the decision to renew the Cricket Hollow

Zoo license was consistent with the regulations, Appellants’

challenge to this specific renewal, and to the agency’s alleged

23

“pattern and practice of rubber-stamping license renewal

applications,” is a challenge to the legality of the regulations

themselves. We thus must determine whether the agency’s

administrative renewal scheme is “unambiguously foreclosed”

by the statute. Village of Barrington v. Surface Transp. Bd.,

636 F.3d 650, 659 (D.C. Cir. 2011) (quotation mark omitted).

We begin, of course, with the statutory text. Maslenjak v.

United States, 137 S. Ct. 1918, 1924 (2017). The word

“renewal” never appears in the AWA. Instead, the statute

provides that “[t]he Secretary shall issue licenses to dealers and

exhibitors upon application therefor in such form and manner

as he may prescribe . . . .” 7 U.S.C. § 2133. The statute limits

this explicit grant of discretion: issuance of a license must be

conditioned “upon payment of such fee” as the Secretary shall

establish, and on the exhibitor’s “hav[ing] demonstrated that

his facilities comply with the standards promulgated by the

Secretary.” Id. As the Government has emphasized, the statute

does not set forth any length of time that a license should

remain valid. Its only discussion of a license ending pertains to

the possibility of revocation or suspension. See id. § 2149. The

statute thus neither provides expressly for a renewal process,

nor expressly sets forth standards that must govern the renewal

process specifically.

Appellants contend, however, that a renewal plainly

constitutes “issuance of a license” under § 2133 and that the

process for granting renewals therefore must comply with the

standards set out above. They assert that USDA’s

administrative renewal scheme is unlawful because, by

permitting renewal even when the agency has reason to know

the facility is operating in violation of the AWA and regulatory

standards, it flouts the compliance demonstration requirement.

The Act does not define “demonstrate,” and Appellants have

not pointed us to any statutory provision that would appear to

24

give additional content to the term. Appellants nonetheless

assert that a demonstration of compliance cannot possibly be

accomplished when the entity to whom the demonstration must

be made is already aware of non-compliance, whether due to

prior inspections or public reports. See Appellants’ Br. 26-27.

Had Congress required that before issuing a license, the

agency must find that the applicant is actually in compliance,

Appellants’ interpretation would be on strong footing. But

Congress required merely a demonstration. And “demonstrate”

may mean “to show,” not “to be.” See BLACK’S LAW

DICTIONARY 432 (6th ed. 1990) (“[t]o show . . . by operation,

reasoning, or evidence”). This definition comports with the

ordinary usage of the term. It is common for a teacher to say

that a student has demonstrated proficiency on an English

exam, regardless of whether the student has actually mastered

the rules of grammar. Similarly, one might be designated as

having demonstrated compliance with applicable guidelines

because he or she has met some minimum standard that an

evaluating entity has set.

This latter meaning is consistent with the common legal use

of “demonstrate.” Statutes and regulations frequently require

an entity to demonstrate something by meeting certain criteria

or going through a process that either Congress or an agency

has deemed indicative. See, e.g., Clean Air Act, 42 U.S.C.

§ 7511d(e) (2012) (exempting from sanctions those ozone

nonattainment areas that “can demonstrate, consistent with

guidance issued by the Administrator, that attainment in the

area is prevented because of ozone . . . transported from other

areas”); EPA National Emission Standards for Hazardous Air

Pollutant Emissions for Polyvinyl Chloride & Copolymers

Production, 40 C.F.R. § 63.11896(c) (2012) (directing that

sources wishing to make process changes “must demonstrate

continuous compliance” with emissions and work practice

25

standards “according to the procedures and frequency” set out

in separate regulations).

So too with § 2133. It is difficult to imagine how the agency

could administer the provision’s compliance demonstration

requirement without establishing some procedure that license

applicants must follow to make an appropriate showing. By

declining to set forth the requirements of that demonstration

procedure, Congress effectively delegated this authority to

USDA. This is precisely the type of statutory gap-filling that

“involves difficult policy choices that agencies are better

equipped to make than courts,” and to which federal courts

must defer, so long as the agency’s construction is reasonable.

Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs.,

545 U.S. 967, 980 (2005) (citing Chevron, 467 U.S. at 865-66).

Having concluded that Congress has implicitly delegated

the authority to establish the procedure for demonstrating

compliance to USDA, we must next ask, at Chevron Step Two,

whether the process the agency developed to fill the statutory

gap is consistent with the statute. That is, we may uphold the

renewal scheme only if the agency reasonably determined that

the renewal procedures fulfill the statutory demonstration

requirement. See id.

USDA asserts that its renewal scheme balances the AWA’s

“dual, but sometimes competing, goals of protecting both the

animals and the businesses that exhibit them.” Appellees’ Br.

33. The agency has explained that it would be too burdensome

to require more from applicants in the context of license

renewals than the regulations currently demand. See 69 Fed.

Reg. 42,094. Specifically, USDA contends it would be

“unrealistic” to make renewal contingent on licensees having

no citations whatsoever. Id.

26

In other words, the agency has concluded that self-

certification and availability for inspection are sufficient to

demonstrate compliance in a license renewal. The agency has

never said that self-certification alone is positive proof of

compliance. Rather, the agency’s regulations and the

regulatory history make clear that self-certification and

availability for inspection are enough, in the context of

renewal, to satisfy the demonstration requirement because a

renewal involves an applicant who has already survived a

compliance inspection when the agency initially granted its

license. To put it simply, the agency has concluded that (1) the

initial inspection that was necessary to secure the initial license,

plus (2) the self-certification of continued compliance, plus

(3) availability for inspection at and beyond the time of renewal

are enough to satisfy the statute. Considered in the context of

the enforcement authority provided for elsewhere in the statute,

and the attendant procedural protections afforded to license-

holders in revocation and suspension proceedings under

§ 2149, we find that the agency’s administrative renewal

scheme embodies a reasonable interpretation of the statutory

demonstration requirement.

In light of our determination that the agency’s renewal

scheme is consistent with the demonstration requirement in

§ 2133, we need not reach the “issue” issue. Regardless of

whether “issue” encompasses renewal, the agency’s scheme

complies with the statute. As the Government has argued

before us and before the District Court, the Secretary has

consistently said that what an applicant must demonstrate when

seeking the issuance of an initial license is different from what

an applicant must demonstrate in order to qualify for the

issuance of a renewal; and for a renewal, all that is required is

that the applicant self-certify and make his or her premises

available for inspection. The Government asserts that this

scheme is consistent with the Act, and we agree. Because the

27

agency’s decision to renew the Cricket Hollow Zoo license was

made in compliance with that regulatory scheme, it was not

inconsistent with the Act.

C. The Arbitrary and Capricious Claim

Appellants also contend that, even if USDA’s regulatory

renewal scheme is generally consistent with the statute, the

District Court erred in rejecting their claim that the agency’s

reliance on the Sellners’ self-certification of compliance was

arbitrary and capricious in violation of the APA. See

Appellants’ Br. 48.

To support this claim, they assert, inter alia, that “[f]rom

December 16, 2013 to August 15, 2016, APHIS documented

77 violations at [Cricket Hollow Zoo] over the course of 14

inspections.” Appellants’ Br. 22 (citing APHIS, Inspection

Reports, available at https://acis.aphis.edc.usda.gov

/ords/f?p=116:203:0::NO (search Certificate Number 42-C-

0084)). They allege that one such inspection occurred on the

same day in 2015 that APHIS renewed Cricket Hollow Zoo’s

license, and resulted in eleven violations, including one

“direct” violation and numerous repeat violations. Id. (citing

APHIS Inspection Report 147151639230365 (May 27, 2015),

reprinted in App. 387-92). Appellants also detail their own

first-hand accounts in the record in order to highlight the

deplorable conditions in which Cricket Hollow Zoo’s animals

must live and the “chronic noncompliance recognized by

APHIS’s own officials.” Id. at 22-23 (citing Compl. ¶ 112,

reprinted in App. 65).

Appellants also allege that Tracey Kuehl sent a letter to

USDA on April 28, 2014, expressing concerns about the Zoo’s

noncompliance and requesting that the agency not renew the

Zoo’s license. The Administrator of APHIS, Kevin Shea,

28

responded on May 23, 2014, indicating that the agency would

continue to renew the Zoo’s license, although APHIS had

recently opened an official investigation into the Zoo’s

mistreatment of animals. Id. at 24.

In Appellants view, these allegations demonstrate that the

agency had reason to know at the time it renewed the Cricket

Hollow Zoo license that the Sellners were out of compliance

with the regulations and standards. They argue that the

agency’s action in renewing the license was therefore arbitrary

and capricious because the agency had information showing

that the Sellners’ practices violated the regulations. In other

words, Appellants assert that we are facing a “smoking gun”

case in which the agency actually knows with certainty that the

exhibitor’s self-certification that it is “in compliance with all

regulations and standards in 9 CFR, Subpart A, Parts 1, 2, and

3,” APHIS Application for License Form 7003, reprinted in

App. 384, is false. They claim it is arbitrary and capricious to

nonetheless rely on the form as a demonstration of compliance

in these circumstances.

USDA first responds that Appellants’ arbitrary and

capricious claim must fail because the reliance on the self-

certification was consistent with the regulations, and the

regulations are consistent with the statute. See Appellees’ Br.

42-43. The District Court relied on a similar line of analysis

when it dismissed Appellants’ claim. ALDF, 169 F. Supp. 3d

at 19 (concluding that the licensing decision cannot be arbitrary

and capricious because the regulatory framework was

consistent with the Act and affords the agency no discretion to

refuse to rely on a self-certification form). The agency next

argues that its reliance on the self-certification process,

regardless of whether it knows that the licensee is failing to

comply with AWA standards, is reasonable because the agency

retains discretionary enforcement authority to suspend or

29

revoke the licensee’s license under § 2149. Appellees’ Br. at

43.

As an initial matter, both USDA and the District Court are

incorrect that the arbitrary and capricious claim must fail solely

because the agency prevailed on the AWA claim. Agency

action may be consistent with the agency’s authorizing statute

and yet arbitrary and capricious under the APA. See, e.g.,

Humane Soc’y of the U.S. v. Zinke, No. 15-5041, 2017 WL

3254932, at *10 (D.C. Cir. Aug. 1, 2017). The court’s inquiry

on the latter point depends not solely on the agency’s legal

authority, but instead on the agency’s ability to demonstrate

that it engaged in reasoned decisionmaking. See State Farm,

463 U.S. at 52. The mere fact that a regulatory scheme is

generally consistent with the agency’s authorizing statute does

not shield each agency action taken under the scheme from

arbitrary and capricious review.

The agency’s second argument, at least as currently

articulated, is insufficient as well. USDA explained its decision

to renew the Sellners’ license as being based on the Sellners’

compliance with the regulatory renewal requirements: filing an

annual report, the application fee, availability for inspection,

and the self-certification of compliance. But, as explained

above, an agency’s decision is arbitrary and capricious when

its “explanation for its decision . . . runs counter to the

evidence before the agency.” Id. at 43. According to

Appellants’ allegations, USDA knew that the Sellners were

grossly and consistently out of compliance with AWA

standards. In basing its explanation for the renewal decision in

part on the basis of the Sellners’ self-certification, the agency’s

explanation for its decision runs counter to the evidence

allegedly before it. “Reliance on facts that an agency knows are

false at the time it relies on them is the essence of arbitrary and

capricious decisionmaking.” Mo. Pub. Serv. Comm’n v. FERC,

30

337 F.3d 1066, 1075 (D.C. Cir. 2003). The agency has not

explained how its retention of authority to enforce the

standards through an enforcement proceeding on its own

indicates that the agency acted rationally when relying on the

self-certification form.

Neither does the agency’s assertion that withholding

renewals for any citation would be unrealistic provide an

adequate justification in the “smoking gun” case. According to

Appellants’ allegations, Cricket Hollow Zoo did not merely

have a few citations. They allege that USDA had a consistent

record of the Zoo’s chronic noncompliance, and that the agency

had no reason to suspect that anything had changed at the time

of the renewal. In fact, Appellants claim that an inspection that

took place on the same day that the 2015 renewal issued

resulted in the agency finding a number of serious violations.

See Appellants’ Br. 22 (citing APHIS Inspection Report

147151639230365 (May 27, 2015), reprinted in App. 387-92).

Finally, the fact that the agency has now taken enforcement

action against the Sellners does not moot Appellants’ arbitrary

and capricious claim. The Cricket Hollow Zoo continues to

operate as a USDA-licensed animal exhibition. A decision that

the agency’s renewal scheme or its grant of the Sellners’ 2015

license renewal application is invalid under the APA would

alter that state of affairs in a manner likely to remedy, at least

in part, Appellants’ injuries. So long as that is the case, the

controversy before the court remains live. See Knox v. Serv.

Emps. Int’l Union, Local 1000, 132 S. Ct. 2277, 2287 (2012)

(“A case becomes moot only when it is impossible for a court

to grant any effectual relief whatever to the prevailing party.”

(internal quotation marks omitted)).

We hold that, on this record, the District Court erred in

granting the Government’s motion to dismiss Appellants’

31

arbitrary and capricious claim. We therefore vacate that

judgment and remand the case to the District Court with

instructions to remand the record to the agency. “Where we

‘cannot evaluate the challenged agency action on the basis of

the record before [us], the proper course . . . is to remand to the

agency for additional investigation or explanation.’” CSI

Aviation Servs., Inc. v. U.S. Dep’t of Transp., 637 F.3d 408,

416 (D.C. Cir. 2011) (quoting Fla. Power & Light Co. v.

Lorion, 470 U.S. 729, 744 (1985)). On remand, the agency

must, at a minimum, explain how its reliance on the self-

certification scheme in this allegedly “smoking gun” case did

not constitute arbitrary and capricious action. The agency may

revisit its decision to renew the disputed license. And, of

course, the agency may opt to take appropriate action to amend

its regulatory scheme.

Should the agency choose to reissue its license renewal

decision or to maintain its position that it may rely on a license

renewal applicant’s self-certification to demonstrate

compliance, even when it has concrete evidence that the

applicant is routinely and currently out of compliance with

AWA standards, the District Court may not uphold that action

unless it finds that USDA acted rationally and engaged in

reasoned decisionmaking. As part of this inquiry, the District

Court should reconsider its decision denying Appellants’

motion to supplement the administrative record. In order to

analyze the agency’s rationale for relying on the self-

certification scheme in an allegedly “smoking gun” case such

as this, the court must have access to other records the agency

had in its possession at the time of its decision. The court may

compel the agency to include such “background information”

if it finds it necessary to review those documents “in order to

determine whether the agency considered all of the relevant

factors” when making its decision. Am. Wildlands, 530 F.3d at

1002 (internal quotation marks omitted).

32

III. CONCLUSION

For the reasons set forth above, we affirm the judgment of

the District Court on the statutory claim. We vacate the District

Court’s order granting the Government’s motion to dismiss

Appellants’ arbitrary and capricious claim, and remand the

case to the District Court with instructions to remand the record

to the agency for further proceedings consistent with this

opinion.

So ordered.

GRIFFITH, Circuit Judge, concurring in part and concurring

in the judgment: I concur in the opinion of the majority except

as to the reasoning in Section II.B. The analysis of the district

court and the arguments of the parties focused almost entirely

on whether a license renewal by the agency is “issued” under

7 U.S.C. § 2133. Although I agree with the majority that the

agency’s scheme for renewing licenses is permissible under the

Animal Welfare Act, 7 U.S.C. § 2131 et seq., I am more

comfortable resting that determination upon the question that

has driven this litigation.

The Act is silent, or at least ambiguous, as to what process

(if any) is required for license renewals. As other courts have

recognized, the plain meaning of “issue” does not necessarily

include renewals. See People for the Ethical Treatment of

Animals v. USDA, 861 F.3d 502, 509 (4th Cir. 2017); Animal

Legal Def. Fund v. USDA, 789 F.3d 1206, 1216 (11th Cir.

2015). Nothing in the statute instructs the agency to require a

renewal process at all. Even so, USDA has established a

regulatory scheme for license renewals, but that scheme

requires only the filing of an application, the payment of a fee,

and self-certification of compliance with agency standards. See

9 C.F.R. §§ 2.1(d), 2.2(b), 2.5-2.7. We typically defer to an

agency’s interpretation of the statute it administers so long as

the statute is “silent or ambiguous with respect to the specific

issue” and the interpretation is “reasonable.” Chevron, U.S.A.,

Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-45

(1984).

USDA argues that “issue” is ambiguous and the agency

has interpreted the term to exclude renewals. As it explains, a

license is “issued” only when first granted. After that, the same

license is continued through an annual administrative process.

The agency actually added language to its licensing regulations

“necessary to avoid any misconception that every license

automatically terminates at the end of its 1-year term.” Animal

2

Welfare Regulations, 54 Fed. Reg. 10,835, 10,841 (Mar. 15,

1989).

In my view, it is perfectly reasonable for the agency to

establish an administrative renewal scheme and allocate its

limited resources elsewhere. Massachusetts v. EPA, 549 U.S.

497, 527 (2007) (“[A]n agency has broad discretion to choose

how best to marshal its limited resources and personnel to carry

out its delegated responsibilities.”). This allows the agency to

focus on initial license applications and unannounced

inspections. Animal Welfare; Inspection, Licensing, and

Procurement of Animals, 69 Fed. Reg. 42,089, 42,094 (July 14,

2004); see also Animal Legal Def. Fund, 789 F.3d at 1224

(finding that the renewal scheme reasonably balanced

Congress’s “conflicting policy interests” of licensee due

process rights and animal health and welfare). We should defer

to the agency’s judgment. See Chevron, 467 U.S. at 844

(“[C]onsiderable weight should be accorded to an executive

department’s construction of a statutory scheme it is entrusted

to administer, and the principle of deference to administrative

interpretations.”).

The majority sidesteps the meaning of “issue” because, in

its view, the explanation the agency has advanced in this case

is nothing more than a post-hoc litigation strategy. According

to the majority, the agency has never actually interpreted the

term and therefore is not entitled to deference. “The regulations

say nothing about the meaning of the term ‘issue’ under 7

U.S.C. § 2133 and do not suggest that USDA has ever

interpreted that section not to encompass license renewal.”

Maj. Op. at 21.

I read the agency regulations differently. When the Act

first became law, the renewal process the agency created

required only the paying of a fee and the filing of revenue

3

receipts. Laboratory Animal Welfare, 32 Fed. Reg. 3270, 3271

(Feb. 24, 1967). No demonstration of compliance was required.

That was called for in an entirely separate section of the

regulations related to the “[i]ssuance of licenses.” Id. The

regulation of renewals came four sections later. See id.

The majority notes a later revision to the regulations

requiring that “each applicant for a license or renewal of a

license must demonstrate compliance with the regulations and

standards.” Maj. Op. at 18-19 (emphasis in majority opinion)

(quoting 54 Fed. Reg. at 10,840). But this revision also

removed “before a license will be issued” from the same

provision on the ground that it was incongruent with renewals.

54 Fed. Reg. at 10,840; see Animal Welfare, 54 Fed. Reg.

36,123, 36,149 (Aug. 31, 1989). The clear implication is that

the agency never understood “issue” to include renewals.

I would join our sister circuits and defer to USDA’s

considered judgment that a renewal is not “issued” under

§ 2133, and that its renewal scheme is therefore a permissible

interpretation of the Act. See People for the Ethical Treatment

of Animals, 861 F.3d at 508-12; Animal Legal Def. Fund, 789

F.3d at 1215-25. Because the majority is clear that its analysis

does not “reach the ‘issue’ issue,” Maj. Op. at 26, there is

nothing in the opinion that prevents the agency from

interpreting “issue” as it has in its arguments to us.