UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


ORIGINAL HONEY BAKED

v.

GLICKMAN, DANIEL R.


98-5244a

D.C. Cir. 1999


*	*	*


Randolph, Circuit Judge: Thanksgiving, Christmas and  Easter are the
busiest times of year for The Original Honey  Baked Ham Company of
Georgia. To capture more of the  market during these periods, Honey
Baked decided to open  temporary "kiosks" in shopping malls near its
ninety-seven  retail stores. Two of the company's products--cooked
hams  and turkeys--attracted the attention of the Agriculture De-
partment's Food Safety and Inspection Service, which en- forces the
Federal Meat Inspection Act, 21 U.S.C. s 601 et  seq., and the Poultry
Products Inspection Act, 21 U.S.C.  s 451 et seq. The question in this
appeal from the judgment  of the district court is whether the retail
stores supplying the  kiosks are subject to certain federal inspection
requirements  imposed by those statutes.


The Honey Baked Ham Company purchases its hams and  turkeys from
federally-inspected meat and poultry pro- cessors; the products arrive
at the company's retail stores  fully cooked.1 The Agriculture
Department inspects the  hams and turkeys during slaughtering, and
again during the  cooking and curing processes. At Honey Baked's
retail  stores, the hams are sliced and glazed, the turkeys sliced,
and  both items are packaged for sale. Before the current dispute 
arose, the company's retail stores had never been subject to  the
inspection requirements of the Meat Inspection Act or the  Poultry
Inspection Act. But after Honey Baked revealed its  plan to open
kiosks in shopping malls during its peak sales  periods, the
Agriculture Department said that federal inspec- tion requirements




__________

n 1 The company also owns and operates a federally-inspected meat  and
poultry processing facility in Carrollton, Georgia, where its  hams
and turkeys are sliced, glazed, packaged and shipped by  common
carrier to mail order customers.


supplying the kiosks.2 (At the kiosks, which are booths with 
refrigeration units, no product preparation would occur.)


Given this official advice, the company understood that if it  went
forward with its marketing plan without permitting  federal inspection
of its retail stores, it could be subject to  product seizures,
criminal prosecutions and other regulatory  sanctions. The company
therefore sued for a declaratory  judgment and an injunction, which
the district court granted  on the company's motion for summary
judgment. See The  Original Honey Baked Ham Co. v. Glickman, C.A. No.
97- 440, mem. op. at 7 (D.D.C. Apr. 17, 1998). The Agriculture 
Department has now appealed. Reviewing the district court's  grant of
summary judgment de novo, see Troy Corp. v.  Browner, 120 F.3d 277,
281 (D.C. Cir. 1997), we affirm.


The Department derives its inspection authority, as far as  the
company's hams are concerned, from the following section  of the
Federal Meat Inspection Act:


[T]he Secretary shall cause to be made, by inspectors  appointed for
that purpose, an examination and inspec- tion of all meat food
products prepared for commerce in  any slaughtering, meat-canning,
salting, packing, render- ing, or similar establishment, and for the
purposes of any  examination and inspection said inspectors shall have
 access at all times, by day or night, whether the estab- lishment be
operated or not, to every part of said estab- lishment....


See 21 U.S.C. s 606. The Meat Inspection Act defines "pre- pared" as
"slaughtered, canned, salted, rendered, boned, cut  up, or otherwise
manufactured or processed." See 21 U.S.C.  s 601(l ). The parallel
section of the Poultry Products In- spection Act provides that "[t]he
Secretary, whenever pro- cessing operations are being conducted, shall
cause to be  made by inspectors post mortem inspection of the carcass
of  each bird processed...." See 21 U.S.C. s 455(b). The Poul- try
Inspection Act's definition of "processed" is almost identi-




__________

n 2 In the meantime, the company started operating some kiosks, 
supplying them directly from its Carrollton processing facility.


cal to the Meat Inspection Act's definition of "prepared."  The term
means "slaughtered, canned, salted, stuffed, ren- dered, boned, cut
up, or otherwise manufactured or pro- cessed." See 21 U.S.C. s
453(w).3 The Department's posi- tion is that the inspection provisions
generally apply to retail  establishments, unless those establishments
fall within the  Acts' express retail exemptions, of which more in a
moment.  In the Department's view, the company's stores cannot quali-
fy for the retail exemptions if products prepared there are  sold


Both parties believe, as do we, that the Meat Inspection  Act and the
Poultry Inspection Act should, so far as possible,  be construed to
have the same meaning. The company's  retail establishments supplying
kiosks should, in other words,  either be subject to federal
inspection or not, regardless  whether they handle hams or turkeys, or
both. We say this  not only because the Acts are parallel in most
respects, and  identical in others. See Kenney v. Glickman, 96 F.3d
1118,  1124 (8th Cir. 1996). We say it as well because the Acts  share
the common purpose of ensuring that meat and poultry  products are
"wholesome, [and] not adulterated," all to the  end of protecting the
"health and welfare of consumers" and  the market for wholesome and
unadulterated products. See  21 U.S.C. ss 451, 602.


That the inspection provisions of the Acts do not generally  apply to
meat and poultry products prepared in retail estab- lishments is
tolerably clear. So far as we can tell, this had  been settled for
some time as a result of a 1972 Opinion of the  Attorney General
regarding the Meat Inspection Act, an  opinion we find thoroughly
convincing. Compare Benavides  v. DEA, 968 F.2d 1243, 1248 (D.C. Cir.
1992). The Meat  Inspection Act lists the sorts of establishments
subject to  federal inspection: "any slaughtering, meat-canning,
salting,  packing, rendering, or similar establishment." See 21 U.S.C.
 s 606. Because the list does not include retail establish- ments, one
would suppose that meats prepared in retail 




__________

n 3 We will refer to these provisions of the two statutes as the 
"inspection provisions," or the "inspection requirements."


stores are not subject to the federal inspection requirements.  See,
e.g., Michigan Citizens for an Indep. Press v. Thorn- burgh, 868 F.2d
1285, 1292-93 (D.C. Cir. 1989). Retail stores  are not "similar" to
the types of wholesale businesses listed in  the statute. See 21
U.S.C. s 606. The functions of slaugh- tering and packing plants
differ considerably from those of  retail establishments. See
Applicability of the Federal Meat  Inspection Act to Retail
Establishments, 42 Op. Att'y Gen.  461 (1972). The Meat Inspection Act
thus strongly suggests  that retail establishments are exempt from the
federal inspec- tion requirements. See D & W Food Centers, Inc. v.
Block,  786 F.2d 751, 756-57 (6th Cir. 1986). That the statute does 
not contain an explicit exception for retail operations is not 
particularly significant. A statute listing the things it does  cover
exempts, by omission, the things it does not list. As to  the items
omitted, it is a mistake to say that Congress has  been silent.
Congress has spoken--these are matters outside  the scope of the
statute. See Engine Mfrs. Ass'n v. EPA, 88  F.3d 1075, 1088 (D.C. Cir.


Another provision in the Meat Inspection Act fortifies the  conclusion
that retail establishments are not subject to in- spection. The Act
applies when meat food products are  "prepared" in the types of
establishments listed. The Act  defines "prepared" to include cutting
up or boning meat, see  21 U.S.C. s 601(l ), activities routinely
performed in retail  stores. But the definition closes with the phrase
"or other- wise manufactured or processed," thus qualifying all the 
activities mentioned. See id. Slicing ham in a retail store is  not
"processing" or "manufacturing," as those terms are  generally
understood. See 42 Op. Att'y Gen. at 461-62.  Operations traditional
to retail stores therefore fall outside  the scope of the Meat


The language of the Poultry Inspection Act points in the  same
direction. This Act requires inspection "whenever pro- cessing
operations are being conducted ... of the carcass of  each bird
processed," a phrasing somewhat different than the  parallel section
of the Meat Inspection Act. See 21 U.S.C.  s 455(b), compare s 606. As
the Agriculture Department  points out, the Poultry Inspection Act
also does not contain a 


descriptive list of establishments subject to inspection, but  refers
generally to "processing operations." See 21 U.S.C.  s 455(b).
Although the Attorney General's opinion does not  discuss the Poultry
Inspection Act, some elements of his  analysis are nevertheless apt.
The Poultry Inspection Act's  definition of "processed," like the Meat
Inspection Act's defi- nition of "prepared," could be read to reach
routine retail  store activities such as slicing poultry. See 21
U.S.C.  ss 601(l ), 453(w). But slicing a chicken or turkey is not a 
"processing operation[ ]," as that term is generally under- stood,
just as slicing a ham at a retail store is not "manufac- turing" or
"processing," as those terms are generally under- stood. Compare 42
Op. Att'y Gen. at 461-62.4 Given the  desirability of reading these
two Acts in pari materia, we  therefore believe retail stores where
poultry is simply sliced  and packaged also fall outside the scope of
the inspection  provision in the Poultry Inspection Act.


Another feature common to both Acts tends to show that  the inspection
provisions do not reach retail establishments.  See 42 Op. Att'y Gen.
at 466-67. Provisions in both the Meat  and Poultry Inspection Acts
exempt retail establishments  located in "designated" States if their
products are distribut- ed intrastate. See 21 U.S.C. ss 454(c)(2),
661(c)(2).5 The 




__________

n 4 In addition, the Poultry Inspection Act directs the Secretary to 
"exempt from specific provisions of this chapter," by regulation, 
"retail dealers with respect to poultry products sold directly to 
consumers in individual retail stores, if the only processing opera-
tion performed by such retail dealers is the cutting up of poultry 
products on the premises where such sales to consumers are made."  See
21 U.S.C. s 464(a)(1); 9 C.F.R. s 381.10(a)(1) (exempting such  retail
dealers from "[t]he requirements of the Act and the regula- tions for
inspection"). The parties do not discuss the application of  this
provision to this case.


5 The exemptions, virtually identical in both Acts, state:


The provisions of this chapter requiring inspection of [the 
preparation of meat and meat food products or the processing  of
poultry products] shall not apply to operations of types 
traditionally and usually conducted at retail stores and restau-
rants, when conducted at any retail store or restaurant or 


Secretary of Agriculture may designate a State if it fails to  develop
or enforce inspection requirements equivalent to the  federal
inspection regime. The Secretary may then apply  those requirements to
the State's intrastate establishments,  except retail stores engaging
in intrastate sales. See 21  U.S.C. ss 454(c)(1),(2), 661(c)(1),(2).
One might argue that  the general inspection provisions apply to
retail stores, be- cause the special retail exemptions for designated
States  would be unnecessary if they did not. See Bennett v. Spear, 
520 U.S. 154, 173 (1997). Were that logic to prevail, however,  retail
stores located in States having inferior inspection sys- tems and
distributing their products intrastate would wind up  being exempt
from the federal requirements, while others  would not be. That would
be a very strange result and one  that Congress could not possibly
have intended, as legislative  history relating to the Meat Inspection
Act indicates. See 42  Op. Att'y Gen. at 462-66, 468; see also Public
Citizen v.  Department of Justice, 491 U.S. 440, 454-55 (1989); City
of  Cleveland v. U.S. Nuclear Regulatory Comm'n, 68 F.3d 1361,  1366


The more sensible explanation, and one the Attorney Gen- eral endorsed,
is that Congress added the exemption in  s 661(c)(2) of the Meat
Inspection Act to clarify that retail  stores were not the type of
establishment included within the  federal inspection requirements.
See 42 Op. Att'y Gen. at  467-68. We are led to the same conclusion
regarding the  Poultry Inspection Act's identical express exemption.
See 21  U.S.C. s 454(c)(2). Congress amended the Poultry Inspec- tion
Act to include Federal-State cooperation provisions (of  which the
exemption is one) similar to those in the Meat  Inspection Act. See
H.R. Rep. No. 90-1333, at 22 (1968),  reprinted in 1968 U.S.C.C.A.N.




__________

n similar retail-type establishment for sale in normal retail quan-
tities or service of such articles to consumers at such establish-
ments if such establishments are subject to such inspection 
provisions only under this paragraph (c)....


See 21 U.S.C. ss 454(c)(2), 661(c)(2) (emphasis added).


If Honey Baked Ham continued to operate its retail stores  as it had
in the past, the stores would not be subject to  federal inspection
for the reasons just given. That the com- pany's retail stores supply
temporary kiosks during holiday  seasons does not, in our view,
transform them into "hybrid  retail/wholesale" establishments to which
the federal inspec- tion requirements apply. A wholesaler does not
sell to the  ultimate consumer; a wholesaler is a middleman who sells
to  a retailer. To the extent that Honey Baked Ham's retail  stores
supply the company's kiosks, they still do not fit within  the
category of "wholesalers." The stores do not sell their  products to
the kiosks; the kiosks are simply an extension of  the stores' retail
operations. According to the Agriculture  Department's own
regulations, the company's stores fit within  the description of
retail establishments, kiosks or not. Their  operations, of the sort
"traditionally and usually conducted at  retail stores," will not
change when they supply kiosks. The  stores glaze, slice and package
products. See 9 C.F.R.  ss 303.1(d)(2)(i)(a),(c),(e), 381.10(d)(2)(i).
They sell to  consumers only, not to retailers. See 9 C.F.R.  ss
303.1(d)(2)(iii)(a), 381.10(d)(2)(iii)(a). They use meat and  poultry
products that are federally- or State-inspected and  passed. See 9
C.F.R. ss 303.1(d)(2)(iii)(c), 381.10(d)(2)(iii)(c).  Although Honey
Baked hopes to increase its business  through the kiosks, there is no
indication that its sales to  consumers will exceed normal retail
quantities. See 9 C.F.R.  ss 303.1(d)(2)(ii), 381.10(d)(2)(ii).
Because the company's re- tail stores will not lose their retail
character or become  "similar" to wholesale establishments when the
kiosk system  is fully implemented, the stores are not required to
submit to  federal inspection under the Meat and Poultry Inspection 


If we credited the Department's contention that the inspec- tion
provisions of the Acts reach retail establishments, and  that those
establishments may be exempt only if they fall  within the Acts'
express retail exemptions, we would still  come to the same
conclusion.6 The Department says the 




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n 6 It bears mention that the Department's contention must fail, 
because the Acts' retail establishment exemptions do not exempt 


express exemptions, and its own regulations, apply only when  meat and
poultry are sold to consumers from the place where  these products are
prepared. See 21 U.S.C. ss 661(c)(2),  454(c)(2); 9 C.F.R. ss
303.1(d)(1), 381.10(d)(1).7 When the  kiosks are up and running, the
preparation would be done in  the retail stores, so the Department
insists that federal  inspectors must occupy the premises. We find the
Depart- ment's interpretation of the express retail exemptions to be 
arbitrary and capricious. See 5 U.S.C. s 706(2)(A); see  George E.
Warren Corp. v. U.S. E.P.A., 159 F.3d 616, 622  (D.C. Cir. 1998). The
Meat and Poultry Inspection Acts seek  to protect the "health and
welfare of consumers ... by  assuring that [poultry products or meat
products] distributed  to them are wholesome, not adulterated...." See
21 U.S.C.  ss 451, 602. The Department's construction of the express 
retail exemptions bears no logical relationship to that goal.  The
traditional preparation processes that occur at retail  stores pose no
greater threat to the public health when the  fully prepared product
is later sold at another location. The  study of the risks of
contamination from simple retail store  processing, on which the
Department relies, does not suggest  otherwise. And if transporting
the prepared product creates  an additional risk of contamination,
inspection at the originat- ing retail stores is an utterly useless
measure of protection.  As the company points out, the transportation
would take  place out of the presence of a federal inspector.




__________

n retail establishments generally, but only those that are located in 
designated States and distribute their products intrastate. See 21 
U.S.C. ss 661(c)(2), 454(c)(2).


7 The Department provides two sets of regulations. The relevant 
portions are virtually identical. They state:


The requirements of the Act and the regulations ... for  inspection of
the [preparation of meat products or processing of  poultry products]
do not apply to operations of types tradition- ally and usually
conducted at retail stores and restaurants,  when conducted at any
retail store or restaurant or similar  retail-type establishment for
sale in normal retail quantities or  service of such articles to
consumers at such establishments.


See 9 C.F.R. ss 303.1(d)(1), 381.10(d)(1).


The Department's adherence to its so-called "two-store"  policy also
suggests that its interpretation of the retail ex- emptions is
arbitrary and unrelated to the purpose of the  Meat and Poultry
Inspection Acts. Under this policy, which  has not been published, a
retail store apparently is permitted  to prepare products on the
store's premises and to sell them  to customers there and at one other
location without trigger- ing the federal inspection requirements. The
policy applies  to single store operations only. Because Honey Baked
Ham  owns many retail stores, it falls outside of the "two-store" 
policy. Honey Baked Ham presumably could take advantage  of the policy
if, like some of its competitors, its retail outlets  were run as
franchise operations. If there were a health risk  posed by off-site
sales of products prepared at retail stores, it  is impossible to
understand why the form of corporate organi- zation ought to be
decisive. The short of the matter is that  the Department's
"two-store" policy further undermines its  claim that public health
concerns mandate federal inspection  of those Honey Baked retail
stores supplying hams and  turkeys to kiosks in nearby shopping


For the foregoing reasons the judgment of the district  court is
affirmed.


So ordered.