LYSTN, LLC, d/b/a Answers Pet Food v. Food

UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
_________________________________
LYSTN, LLC, d/b/a Answers Pet Food,
Plaintiff - Appellant,
v.
FOOD AND DRUG ADMINISTRATION;
ASSOCIATION OF AMERICAN FEED
CONTROL OFFICIALS; COLORADO
DEPARTMENT OF AGRICULTURE;
KATE GREENBERG, individually and
officially in her capacity as Commissioner
of the Colorado Department of Agriculture;
LAUREL HAMLING, individually and
officially in her capacity as Feed Program
Administrator for the Colorado Department
of Agriculture; SCOTT ZIEHR,
individually and officially in his capacity
as Feed Program Regulatory Administrator
for the Colorado Department of
Agriculture; UNITED STATES
DEPARTMENT OF HEALTH &
HUMAN SERVICES,
Defendants - Appellees.
No. 20-1369
(D.C. No. 1:19-CV-01943-PAB-KLM)
(D. Colo.)
_________________________________
ORDER AND JUDGMENT*
* After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
FILED
United States Court of Appeals
Tenth Circuit
September 3, 2021
Christopher M. Wolpert
Clerk of Court
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_________________________________
Before TYMKOVICH, Chief Judge, KELLY, and HOLMES, Circuit Judges.
_________________________________
Lystn, LLC, filed an action seeking review under the Administrative Procedure
Act (APA). The district court dismissed the action for lack of subject matter
jurisdiction, holding it lacked jurisdiction under 5 U.S.C. § 704 because Lystn’s
complaint failed to allege final agency action. The court subsequently denied in part
and granted in part Lystn’s motion to alter or amend the judgment and dismissed the
action without prejudice. On appeal, Lystn challenges the district court’s holding
regarding final agency action and argues the court abused its discretion in denying
jurisdictional discovery and in failing to allow Lystn to amend its complaint.
Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
I. Background
A. Lystn’s Complaint1
Lystn manufactures and sells raw pet food that may contain certain
microorganisms, including salmonella, that Lystn claims are naturally occurring and
not harmful to humans. Lystn filed this action against the Food and Drug
Administration and the Department of Health and Human Services (hereafter, the
Federal Defendants); the Colorado Department of Agriculture (CDA) and several
CDA employees (hereafter, the State Defendants); and the Association of American
Feed Control Officials (AAFCO), which Lystn described as “a voluntary membership
1 Our factual summary is derived from the allegations in Lystn’s complaint.
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association of local, state and federal agencies charged by law to regulate the sale and
distribution of animal feeds,” Aplt. App., Vol. 3 at 662 (internal quotation marks
omitted). Lystn sought to challenge the FDA’s alleged “nationwide zero-tolerance
standard for Salmonella presence in pet food that is unsupported by science and ultra
vires of powers properly delegated to it by Congress.” Id.
Lystn based its claims on an FDA Compliance Policy Guide (CPG) titled
“Salmonella in Food for Animals” issued in July 2013. Id. at 672; see id., Vol. 2 at
409-15. The stated purpose of the CPG “is to provide guidance for FDA staff on the
presence of Salmonella in food for animals.” Id., Vol. 2 at 411. The CPG states that
the “FDA considers an animal feed or pet food that may be injurious to health
because it is contaminated with Salmonella to be adulterated under section 402(a)(1)
of the [Food, Drug, and Cosmetic Act (“FDCA”)] (21 U.S.C. 342(a)(1)).” Id. at 413.
A food is “adulterated” under the FDCA “[i]f it bears or contains any poisonous or
deleterious substance which may render it injurious to health,” but is not considered
adulterated if “the substance is not an added substance” and “if the quantity of such
substance in such food does not ordinarily render it injurious to health.” 21 U.S.C.
§ 342(a)(1). The CPG recommends that FDA staff should consider the following
risk-based criteria in deciding whether to recommend seizure or import refusal of a
pet food or pet food ingredients on the basis of adulteration:
1. Salmonella is present in one or more subsamples of the pet food or
pet food ingredient; and
2. The pet food or pet food ingredient will not be, or information is not
available to determine whether the pet food or pet food ingredient
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will be, further processed with a heat treatment or other method
during the commercial manufacturing or processing to eliminate
Salmonella.
3. The Salmonella is of any serotype.
Aplt. App., Vol. 2 at 414.
As acknowledged in Lystn’s complaint, the CPG specifies that it contains only
nonbinding recommendations. See, e.g., id. at 411 (stating that “guidance documents
. . . do not establish legally enforceable responsibilities” and “should be viewed only
as recommendations, unless specific regulatory or statutory requirements are cited”).
The CPG also advises that “[y]ou can use an alternative approach if the approach
satisfies the requirements of the applicable statutes and regulations. If you want to
discuss an alternative approach, contact the FDA staff responsible for implementing
this guidance.” Id. Lystn alleged that it “uses both a science and time proven
alternative approach through fermentation[, technology,] and proprietary processes
for protection of [its] products to a level that would not ordinarily render it injurious
to health.” Id., Vol. 3 at 672.
Lystn further alleged that the CDA has adopted the CPG’s definition of
“adulteration,” which is also similar to the definition in the AAFCO’s Model Bill and
Regulations. It contended that these definitions are at odds with 21 U.S.C. § 342’s
provision that a naturally occurring substance will not render a product adulterated
unless the quantity of the substance is injurious to health.
In April 2018, a CDA inspector collected a sample of Lystn’s pet food from a
store in Colorado. Lystn alleged that the CDA mishandled this sample, which it then
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tested for adulterants according to the CPG/AAFCO definition. The CDA concluded
the sample contained an unspecified quantity of salmonella. The CDA is prosecuting
Lystn in state proceedings based on this sample.
In January 2019, after Lystn refused to conduct a voluntary recall, the FDA
issued a public warning notice stating that one of Lystn’s products was adulterated
under the FDCA and represented a serious threat to human and animal health. This
public warning notice was based upon a product sample taken by the State of
Nebraska, allegedly at the behest of the FDA. Lystn alleged that the public warning
notice falsely stated that federal law requires all pet food to be free of pathogens,
including salmonella.
B. Motions to Dismiss Lystn’s Complaint
All defendants moved to dismiss Lystn’s complaint on various grounds. As
relevant to Lystn’s appeal, the Federal Defendants moved to dismiss under Federal
Rule of Civil Procedure 12(b)(1), arguing the complaint failed to allege final agency
action subject to review under § 704 of the APA. Lystn asserted various theories in
opposition, all of which the district court rejected. The court first held the FDA had
not taken final agency action by promulgating the CPG, noting that “the substance of
the CPG provides guidance only and does not create any legal right,” and “[t]he FDA
. . . derives no enforcement authority from the CPG.” Aplt. App., Vol. 5 at 1142-43.
The court also held Lystn’s reliance on the FDA’s public warning notice was
misplaced, noting that cases have consistently held the issuance of a warning letter by
the FDA does not constitute final agency action ripe for judicial review.
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Lystn also asserted that the CPG constitutes final agency action because the
FDA is enforcing it through a shadow regulation scheme involving the other
defendant entities. The district court noted that Lystn had alleged that, through the
AAFCO, the FDA compels states to enforce the CPG in exchange for federal
funding; if a manufacturer denies a request by the FDA based upon its zero-tolerance
salmonella policy, the FDA causes a state to threaten punitive action; the CDA has an
interagency agreement with the FDA under which the FDA asked the CDA to sample
Lystn’s raw pet food products; and the CDA’s prosecution of Lystn is a thinly veiled
enforcement attempt by the FDA.
The district court held that Lystyn’s “shadow regulation” allegations were
conclusory and unsupported by facts. Id. at 1144. In particular, it concluded that
Lystn “fail[ed] to allege in its complaint any facts supporting its claim that the
CDA’s state prosecution of plaintiff was at the behest of the FDA or was a condition
to the CDA receiving federal funding.” Id. at 1145. Moreover, even assuming Lystn
had plausibly pleaded that the FDA had induced another entity to collect samples of
Lystn’s products, the court held an alleged initiation of an investigation by the FDA
was insufficient to constitute final agency action. The court therefore granted the
Federal Defendants’ motion to dismiss for lack of subject matter jurisdiction. 2
2 The district court also dismissed Lystn’s claims against the State Defendants
and AAFCO for lack of jurisdiction because the APA does not apply to state agencies
or private parties. We do not address these rulings because Lystn does not challenge
them in its opening brief. See Tran v. Trs. of State Colls. in Colo., 355 F.3d 1263,
1266 (10th Cir. 2004) (“Issues not raised in the opening brief are deemed abandoned
or waived.” (internal quotation marks omitted)).
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C. Lystn’s Motions for Jurisdictional Discovery
The district court also denied Lystn’s two motions for jurisdictional discovery.
Its first motion sought leave to require the defendants to identify and produce “ALL
documents reflecting in any way communication by and among the Defendants, their
agents, employees, or the like – or any combination thereof, regarding Plaintiff, its
products, and/or any officer, employee, or agent thereof.” Id. at 1152-53 (ellipsis and
internal quotation marks omitted). The district court denied this request because (1)
Lystn “raise[d] no allegations of facts or evidence that it believes its wide-reaching
discovery request would reveal,” and (2) Lystn “ha[d] not argued . . . that it is
prejudiced by the denial of jurisdictional discovery,” and instead had stated that it
possessed “2,600 documents that firmly establish the proof of a final agency action.”
Id. at 1153 (brackets and internal quotation marks omitted).
Lystn’s second motion sought to depose defendant Scott Ziehr, a CDA
employee, about the defendants working in concert to enforce the CPG. The district
court denied this motion because Lystn failed to confer with defendants per the local
court rules, and alternatively because Lystn “provide[d] no support, beyond its bare
allegations, that Mr. Ziehr’s directive to the CDA inspector to sample plaintiff’s pet
food was at the behest of the FDA.” Id. at 1155. 3
3 The district court also denied Lystn’s motion to amend its complaint to add a
new claim, once again for failure to confer with defendants, and alternatively because
Lystn’s proposed additional claim was unrelated to its pending action. Lystn does
not challenge this ruling on appeal.
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D. Lystn’s Rule 59(e) Motion
Lystn filed a motion to alter or amend the judgment under Federal Rule of
Civil Procedure 59(e). The district court first addressed Lystn’s failure, once again,
to confer with the defendants before filing this motion. It rejected Lystn’s contention
that the duty to confer did not apply in this instance; it found that Lystn had
misrepresented to the court its attempts to confer with defendants; and it credited the
defendants’ representations that Lystn had not, in fact, attempted to confer. The
court noted that Lystn’s violation of the local rule requiring conferral was a sufficient
basis to deny the Rule 59(e) motion.
The court also held that Lystn’s motion failed on the merits. Observing that
Lystn had not identified the bases of its motion, the court construed it as raising four
contentions. First, Lystn contended that two executive orders issued in October 2019
demonstrated that AAFCO’s Animal Feed Regulatory Program Standards (AFRPS)
“constitute a final agency action.” Id. at 1124. 4 The court first held the executive
orders were not unavailable when it issued its prior order and therefore were not new
evidence. It also held the executive orders had no bearing on the court’s prior order
because Lystn “did not challenge the AFRPS as final agency action in its complaint.”
4 The AFRPS figure prominently in Lystn’s arguments on appeal. In its
opening brief, Lystn asserts that, in partnership with the AAFCO, the FDA
“developed” the AFRPS, which are “designed to transform the animal feed regulatory
programs of participating state agencies to be ‘equivalent in effect’ to the Federal
animal feed regulations by paying AFRPS participating states to enact Federal
guidelines (which are supposed to be non-binding and create no legal effect) as state
regulations and then prosecute companies for violating those state regulations.” Aplt.
Opening Br. at 15.
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Id. at 1124-25. Rather, Lystn “argued that the final agency action at issue was the
FDA’s [CPG] . . . [a]nd because the complaint focused solely on the CPG, so did the
Court’s order.” Id. at 1125. The district court declined to allow Lystn to “make its
complaint a moving target to salvage a lost case by untimely suggestion of new
theories of recovery.” Id. (internal quotation marks omitted).
Second, Lystn argued the district court had misapprehended certain facts it
alleged regarding the FDA’s enlistment of states to pull and test product samples.
Lystn asserted that “this all started with the FDA’s 2016 Warning Letter based on
Plaintiff’s product pulled off the shelf in Colorado in 2015.” Id. (brackets and
internal quotation marks omitted). But the district court held that, like the AFRPS,
Lystn’s “complaint makes no mention of a warning letter,” id., and given that the
cited letter was issued in 2016, before Lystn filed its complaint, it could not be
grounds for reconsideration based on new evidence.
Third, Lystn argued the district court erred in ruling its allegations of final
agency action were conclusory without considering the “numerous documents” Lystn
attached to its opposition to the motions to dismiss, which Lystn asserted
“demonstrate[d], unquestionably, the allegations’ actual truth.” Id. at 1127 (brackets
and internal quotation marks omitted). The court rejected this contention because the
additional facts that Lystn asserted the court failed to consider related to Lystn’s
theory regarding “the FDA’s enforcement of AFRPS,” which, as the court had
explained, “was not at issue in plaintiff’s complaint, was not a subject of the Court’s
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order, and cannot be a basis to revisit the Court’s order.” Id. at 1127 (internal
quotation marks omitted).
Finally, Lystn argued that the district court erred by dismissing the action with
prejudice. The court agreed with that contention, granted the Rule 59(e) motion in
part, and amended its final order to dismiss without prejudice.
II. Discussion
Under § 704 of the APA:
Agency action made reviewable by statute and final agency action for
which there is no other adequate remedy in a court are subject to judicial
review. A preliminary, procedural, or intermediate agency action or ruling
not directly reviewable is subject to review on the review of the final
agency action.
5 U.S.C. § 704.
As a general matter, two conditions must be satisfied for agency action to
be final: First, the action must mark the consummation of the agency’s
decisionmaking process—it must not be of a merely tentative or
interlocutory nature. And second, the action must be one by which rights
or obligations have been determined, or from which legal consequences
will flow.
Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (citation and internal quotation marks
omitted). Under the APA, courts have jurisdiction to review only final agency
actions. Farrell-Cooper Mining Co. v. U.S. Dep’t of Interior, 864 F.3d 1105, 1109
(10th Cir. 2017).
Lystn raises the following issues on appeal:
(1) The FDA took final agency action when it partnered with AAFCO to
create the AFRPS to implement an unlawful policy preference for
zero-tolerance for salmonella in raw pet food and paid participating states to
enforce that unlawful policy through AFRPS with a goal of making state
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regulations equivalent in effect to Federal guidance, which resulted in a state
prosecution of Lystn.
(2) The FDA took final agency action when it sent a warning letter to Lystn
where it found that Lystn violated the law, demanded corrective action, and
then threatened Lystn with penalties for failing to take corrective action.
(3) The district court abused its discretion by denying Lystn’s request for
jurisdictional discovery or a jurisdictional hearing when Lystn requested
factual discovery to rebut the Defendants’ factual allegations regarding
jurisdiction.
(4) The district court abused its discretion by denying Lystn’s request for
leave to amend its complaint to more fully allege final agency action.
Lystn does not “cite the precise references in the record where [these] issue[s]
[were] raised and ruled on” by the district court, as required by Tenth Circuit Rule
28.1(A). 5 We construe Lystn’s first two appeal issues as challenging the district
court’s denial of its Rule 59(e) motion. Its third issue asserts error in the district
court’s denial of its motions for jurisdictional discovery. Finally, Lystn’s fourth
contention addresses an issue that was not raised in or ruled on by the district court.
A. Denial of Rule 59(e) Motion
In its first two appeal issues, Lystn argues the FDA took final agency action by
either (1) paying states to enforce its zero-tolerance policy on salmonella through the
AFRPS, or (2) issuing a warning letter in 2016. The district court construed Lystn’s
5 In fact, Lystn includes no citation to the Appellant’s Appendix in its opening
brief. Much of Lystn’s factual assertions are supported by no citations at all. And its
frequent citations to a declaration by its attorney and exhibits thereto, as well as its
(apparent) citations to exhibits to its opening brief—exhibits it failed to file with the
court—do not satisfy the requirement to cite the appendix “by volume and page
number.” See 10th Cir. R. 28.1(A)(1).
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Rule 59(e) motion as making these same arguments. Lystn now asks this court to
rule on the merits of these issues in the first instance without acknowledging that the
district court declined to do so in denying its motion.
We review the district court’s denial of a Rule 59(e) motion for an abuse of
discretion. See Nelson v. City of Albuquerque, 921 F.3d 925, 929 (10th Cir. 2019).
Lystn fails to demonstrate any abuse of discretion. First, Lystn ignores the district
court’s initial finding that its violation of the local rule requiring conferral was a
sufficient basis to deny its Rule 59(e) motion. Lystn also entirely fails to address the
district court’s holding that neither the AFRPS nor the FDA’s 2016 warning letter
provided a basis to revisit the court’s prior order because Lystn did not assert the
AFRPS or that warning letter as final agency action in its complaint.
As it did in its Rule 59(e) motion, Lystn argues that, in deciding whether its
allegations were conclusory, the district court erred by failing to consider the
documents it attached to its opposition to the motions to dismiss. See Aplt. Opening
Br. at 30-32. The district court rejected this contention, holding these documents
related to the FDA’s alleged enforcement of AFRPS and were therefore untethered to
the allegations in Lystn’s complaint. Lystn’s bald contentions of error on appeal fail
to address the district court’s reasoning.
To the extent Lystn argues its documents were relevant to the district court’s
jurisdictional analysis because the Federal Defendants’ motion to dismiss “made
factual challenges to jurisdiction,” id. at 44, the record does not support that
assertion. As the district court observed, a motion to dismiss for lack of jurisdiction
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under Rule 12(b)(1) can either “(1) facially attack the complaint’s allegations as to
the existence of subject matter jurisdiction, or (2) go beyond allegations contained in
the complaint by presenting evidence to challenge the factual basis upon which
subject matter jurisdiction rests.” Merrill Lynch Bus. Fin. Servs., Inc. v. Nudell,
363 F.3d 1072, 1074 (10th Cir. 2004) (internal quotation marks omitted). Contrary to
Lystn’s unsupported assertion, the Federal Defendants’ motion raised a facial attack
on Lystn’s complaint. It did not present any evidence; rather, it referenced the
complaint’s allegations, see Aplt. App., Vol. 4 at 959-73, and attached as an exhibit
only a copy of the CPG, which the complaint cited at length. 6 The district court
construed the Federal Defendants’ motion as a facial attack and limited its analysis to
the allegations in Lystn’s complaint. Lystn does not demonstrate any error in that
treatment.
Lystn raised its first two appeal issues in its Rule 59(e) motion. On appeal, it
fails to show the district court abused its discretion in denying that motion.
B. Denial of Motions for Jurisdictional Discovery
We “review the district court’s handling of jurisdictional discovery under an
abuse-of-discretion standard.” Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold
Casino & Resort, 629 F.3d 1173, 1189 (10th Cir. 2010). Lystn argues the district
6 Lystn failed to include Exhibit A to the Federal Defendants’ motion to
dismiss in the Appellant’s Appendix.
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court’s failure to allow jurisdictional discovery prejudiced it. See id. (“We have held
that a refusal to grant jurisdictional discovery constitutes an abuse of discretion
if the denial results in prejudice to a litigant . . . .” (brackets and internal quotation
marks omitted)). 7 But Lystn does not address the district court’s bases for denying
its discovery motions. It simply ignores the district court’s finding that, not only had
Lystn not argued prejudice in its first discovery motion, its stated possession of 2,600
documents firmly establishing final agency action demonstrated that Lystn would not
be prejudiced. Lystn also makes no attempt to demonstrate the court abused its
discretion in denying Lystn’s request to depose a CDA employee because Lystn did
not confer with defendants before filing the motion. Lystn has not shown any abuse
of discretion in the district court’s denial of jurisdictional discovery.
C. Failure to Allow Amendment of Lystn’s Complaint
Lastly, Lystn argues the district court should have allowed it to amend its
complaint to cure any jurisdictional defects. But it did not file a written motion
asking for leave to do so, as required by Federal Rule of Civil Procedure 7(b)(1)(A).
See Garman v. Campbell Cnty. Sch. Dist. No. 1, 630 F.3d 977, 986 (10th Cir. 2010)
(applying Rule 7(b)(1)(A) to amendment of pleadings under Federal Rule of Civil
Procedure 15(a)). 8 Lystn does not indicate how it believes it raised this issue in the
7 Lystn also asserts the district court’s failure to allow a jurisdictional hearing
was prejudicial. But it fails to cite where in the record it sought such a hearing, and
we conclude it made no such request.
8 As previously noted, Lystn did move to amend its complaint to add a new
claim—a motion the district court denied and an issue not pertinent to this appeal.
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district court. Clearly, its statement at the conclusion of its Rule 59(e) motion asking
the district court to “allow[] Plaintiff to amend its complaint consistent herewith,”
Aplt. App., Vol. 1 at 31, was insufficient to preserve the issue, see Calderon v. Kan.
Dep’t of Soc. & Rehab. Servs., 181 F.3d 1180, 1185-87 (10th Cir. 1999). A court
need not “address a motion never placed before it.” Calderon, 181 F.3d at 1187.
Accordingly, Lystn identifies no error by the district court.
III. Conclusion
We affirm the district court’s judgment.
Entered for the Court
Timothy M. Tymkovich
Chief Judge
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