PAWS and the DDAL Litigation

Jim Holt
AKC federal legislative liaison

Several commentators, including Cindy Cooke in the July 1 issue of Dog News, have expressed the view that the Pet Animal Welfare Statute (PAWS) undermines or circumvents the U.S. Court of Appeals decision in Doris Day Animal League (DDAL) v. Venamen. This so-called "DDAL case" was a landmark court decision a few years ago which upheld the discretion of the USDA to broadly interpret the term "retail pet store" in the federal Animal Welfare Act (AWA). These commentators have created the impression that the Court's decision in the DDAL case protects hobby and show breeders from regulation under the AWA by precluding the USDA, or even future courts, from narrowing the current broad interpretation of the term "retail pet store". Nothing could be further from the truth. The USDA could decide to start regulating every person who sells dogs tomorrow, without Congress so much as raising its pen. The same court decision that upheld the USDA's discretion to make its current broad interpretation of the term "retail pet store" upholds any future USDA change in that interpretation if the change is well reasoned. Since legislation trumps regulation, PAWS actually protects hobby and show breeders from such reinterpretation by defining the term "retail pet store" and putting an exemption for hobby and show breeders into statute.

The DDAL case was an important case for dog breeders. As many of you will recall, the AKC played a very large role in securing the victory in that case. I was amused to see Cindy Cooke giving the UKC credit for this victory in her article on PAWS in Dog News, since it was the AKC, not the UKC, that spearheaded the opposition to the DDAL's effort to redefine the retail pet store exemption and participated in the litigation as an amicus on the side of the USDA. After all the time and money the AKC spent to prevail in the DDAL case, it would be bizarre indeed for the AKC to now support legislation that would undo that decision. And, of course, that is not what PAWS does.

For those who may not be familiar with the DDAL case, a little background is instructive, because it is indeed relevant to PAWS, but not in the way that Ms. Cooke and others suggest.

The DDAL matter began when the DDAL filed what is called a "petition for rulemaking" with the DDAL demanding that the USDA do two things. First, it sought to require the USDA to narrow its regulatory interpretation of the term "retail pet store" to include only actual storefront operations. The interpretation of the term "retail pet store" is important because the only entities that sell dogs that are currently exempt from the AWA are "retail pet stores". This term is not defined in the AWA. For 30 years the USDA has interpreted the term "retail pet store" to include everyone who sells dogs exclusively at retail to persons who purchase them for their own use and enjoyment. The USDA's broad interpretation of "retail pet store" is what now protects hobby and show breeders who sell at retail, persons who sell hunting dogs at retail, and others who sell dogs only at retail, from being regulated under the AWA. We are all exempt not because the law exempts us but because the USDA is willing to consider us all "retail pet stores". The DDAL petition challenged this interpretation and sought to bring under regulation everyone who sold dogs who did not maintain an actual storefront "retail pet store", including hobby and show breeders who bred and sold dogs directly from their own residential premises.

The second thing the DDAL petition sought was to have the USDA license and regulate every person who sells dogs for hunting, security or breeding purposes, regardless of the number of dogs sold and regardless of whether the dogs were sold for resale or were sold at retail directly to the final customer. This second prong of the petition was based on the DDAL's contention that the language of the AWA does not extend the retail pet store exemption to dogs which are not sold as pets. The language of the current law is far from clear on this point, and many observers were worried about vulnerability on this prong of the DDAL case.

When the USDA failed to respond to DDAL's petition in a timely manner, the DDAL filed a lawsuit seeking to compel a response. The USDA settled this first DDAL lawsuit out of court. In implementing the settlement, the USDA actually went so far as to publish a proposed regulation to begin regulating retail sellers of dogs. This is a piece of history conveniently overlooked by those who argue, in opposing PAWS, that the USDA is unalterably committed to the wholesale/retail distinction and would not consider changing its regulations to include retail sellers.

The AKC had no choice but to oppose the USDA's proposed rulemaking issued pursuant to the settlement agreement, because not to have done so could have resulted in regulating hobby and show breeders down to the same level as wholesale breeders are now regulated, i.e. everyone selling dogs who maintains more than three breeding females (regardless of whether they are actually bred). By preparing extensive, well argued and well documented comments opposing the proposed rule, mobilizing large numbers of fanciers to write comments, and political action that threatened the USDA with withholding appropriations for enforcement of such a rule change, the AKC succeeded in persuading the USDA not to go forward with its proposed rule to start regulating retail sellers of dogs. In announcing that it would continue to regulate only wholesale sellers of pet dogs, the USDA also stated that it was studying its position with respect to dogs sold for hunting, security and breeding purposes, and would undertake separate rulemaking on that issue at a later time. That turned out to be a critically important statement for breeders and dealers in hunting dogs.

Predictably, the DDAL was incensed when the USDA made no change in its interpretation exempting all retail sellers of pet dogs. The DDAL promptly filed a second lawsuit. This time, rather than seeking to compel the USDA's response to its petition, the lawsuit directly challenged the USDA's interpretation of the term "retail pet store" in the AWA. Like its earlier petition for rulemaking, the lawsuit had two prongs. One prong argued that the USDA's interpretation of the term "retail pet store" was overly broad, and an abuse of discretion, and sought to compel the USDA to narrow its interpretation to real storefront retail pet stores, thereby regulating all residential breeders and others who did not maintain actual retail pet stores. The second prong argued that the AWA compelled the USDA to license and regulate all persons who sold dogs for hunting, security or breeding purposes regardless of how they were sold.

The AKC filed an amicus or "friend of the court" brief with the District Court supporting the position of the USDA, but the District Court declined to consider the AKC's intervention brief. The District Court ruled in favor of the DDAL on the first prong of the lawsuit, holding that the USDA's interpretation of the term "retail pet store" was overly broad. In its decision the court held that not only must the USDA license sellers of pet dogs at retail, but that even a regulatory exemption for persons who received less than $500 per year in gross income from the sale of animals did not apply to sellers of dogs and cats. Had this ruling stood, it would have required the USDA to regulate all sellers of dogs who did not maintain retail pet stores.

In a part of its decision overlooked by critics of PAWS, the District Court declined to rule on the second prong of the lawsuit, which argued that all persons who sold dogs for hunting, security or breeding purposes should be regulated. The court determined that this count was not "ripe" for decision, because at the time of the decision the USDA was still in the process of considering a new regulation covering hunting, security and breeding dogs.

The District Court decision was a disaster for hobby and show breeders, and the AKC strongly urged the USDA to appeal the decision. The USDA did appeal, and this time the AKC was permitted to file an amicus brief, which it did. The appeal was successful, with the Appeals Court holding that the USDA had not abused its discretion in making a broad interpretation of the term retail pet store and quoting extensively from the AKC's amicus brief. The DDAL appealed this decision to the Supreme Court, which declined to accept the case, leaving the Appeals Court decision standing.

The appeal pertained only to the first prong of the original DDAL lawsuit, the issue of whether the USDA's regulatory interpretation of the term "retail pet store" was an abuse of its discretion. No court has ruled on the second prong of the original DDAL lawsuit, the contention that the AWA requires regulating all sellers of hunting, security and breeding dogs. Subsequent to the District Court's decision, the USDA published a "clarification" of its regulations which extended its unwritten policy of regulating sellers of hunting, security and breeding dogs on the same basis as sellers of dogs as pets, i.e. regulating wholesale sellers and not retail sellers. The publication of this clarification makes the issue of whether this action complies with the AWA "ripe" for litigation. So far, the DDAL has not chosen to reopen the matter, but either the DDAL or any other group could do so at any time. If PAWS is enacted, it will put that issue to rest once and for all. All sellers of dogs, for hunting, security, breeding and pet purposes will be treated the same. Retail pet stores and hobby and show breeders that meet the statutory criteria will be exempt from regulation, and only wholesale and large scale retail sellers will be regulated.

The Appeals Court decision in the DDAL case did not mandate that the USDA continue its current interpretation of the retail pet store exemption, it merely permits it to do so. The USDA can, at any time, change its interpretation simply by publishing the basis for a new interpretation in the Federal Register for public comment. The changing circumstances of the dog market are increasingly compelling such a change. The current interpretation is becoming more and more untenable, as large retail breeding operations and importers proliferate. These large breeding operations, which are in every respect similar to those selling at wholesale which are regulated by the Act, undermine the rationality of the USDA's broad interpretation of the retail pet store exemption. If public opinion or Congress do not compel the USDA to change first, it is entirely possible that a court may reexamine the situation and conclude that the USDA's interpretation is no longer reasonable.

In her July 1 Dog News article, Ms. Cooke acknowledges that the USDA has the discretion to change its regulatory definition, but dismisses that possibility out of hand. She states that "there is no logical reason why the USDA, already overburdened..., would suddenly be seized with the urge to add thousands of hobby breeders to its 'to do' list." It certainly is true that the USDA is not out hunting new jobs, and is very concerned about its ability to adequately enforce the AWA. However, the USDA is also aware of and is very concerned about its responsibilities under the AWA. Some of those concerns derive directly from the consequences of its broad interpretation of the term "retail pet store". The level of concern rises with each new "retail puppy mill" expose, and with each new imported dog problem. The USDA is not looking for more work, but they also cannot ignore the law, and the law was not intended to protect the kinds of operations now shielded by the USDA's current interpretation of the retail pet store exemption.

In dismissing the possibility that the USDA could change its regulations, Ms. Cooke clearly hasn't attended the meetings at the USDA or on Capitol Hill that I have, or she would realize that the days of the expansive interpretation of the retail pet store exemption are numbered. She obviously hasn't received e-mails like this one I received just the other day from a breeder and exhibitor who supports PAWS. This fancier wrote [with some editing to protect the writer's identity] "Currently we have a 'kennel' nearby that produces 30 litters of dogs a year and at least 20 litters of cats. The breeder sells entirely online, lies about everything under the sun, including the AKC pedigrees, - and absolutely will not allow people to visit the kennel in person, coming up with every excuse under the sun. No amount of complaints by the neighbors can force her to comply with responsible breeding practices set forth by the AKC. Often she sells dogs on line for $500 without papers, especially when she has those accidental breedings between underaged brothers and sisters. As she says on her web page, 'With the click of a mouse (and a PayPal account) one of our pups can be yours.' Under PAWS, that kind of breeder would be forced to participate in the USDA program."

Ms. Cooke also dismisses the import problem, claiming that there is no evidence for it. She obviously isn't aware of the experience of the Bernese Mountain Dog Club, which spent tens of thousands of dollars rescuing and nursing back to health imported Bernese puppies until they finally had to stop for fear of exhausting their treasury. She obviously isn't aware of the efforts of the trial lawyer and French Bulldog fancier in California who has been working for months to shut down an importer in Los Angeles who has imported hundreds of puppies for immediate resale, many of which took sick and died within days of arriving in their new homes. She obviously isn't aware of the experience of the Sealyham Terrier Club of America which has spent thousands of dollars rescuing sick, underage, poor quality imported Sealyham puppies from a Midwest auction. The club was able to track down the alleged "breeder" listed on the "registration papers" on one of the puppies from eastern Europe, only to learn that she was a 17 year old girl who had never bred a litter in her life. She obviously isn't aware of the investigation by a TV journalist doing a story on imported puppies who turned up an individual who imported 585 puppies through O'Hare airport last year alone, and the breeder from Russia who refuses to sell dogs to U.S. on-line customers unless they purchase entire litters and resell the rest of the puppies themselves. Obviously too she hasn't seen the photographs taken by USDA inspectors showing imported puppies being off-loaded from foreign aircraft at Kennedy airport in collapsed crates, crates completely enclosed with cellophane wrapping, multiple puppies crowded into one crate, and worse.

These are the conditions that created the need to modify the dealer definition in the AWA. These are real problems, not the creations of animal rights activists trying to expand federal regulation of breeders. These are problems of which many in the fancy are aware, the USDA is aware, the media is aware, and many in Congress are aware. That is why I say that the days of the expansive interpretation of the term "retail pet store", and the exclusion from regulation of all sellers of dogs at retail, are numbered. The AKC has embarked on a courageous course of recognizing and participating in addressing these problems in a responsible manner that continues to protect real hobby and show breeders from federal regulation. Would that those other registries that claim to have the welfare of dogs at heart would have the courage to support this effort, rather than seeking to whip up and profit from the disaffection of some fanciers from the AKC's courageous action.