Order Code RL32414
CRS Report for Congress
Received through the CRS Web
The Private Testing of
Mad Cow Disease:
Legal Issues
June 1, 2004
Stephen R. Viña
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

The Private Testing of Mad Cow Disease: Legal Issues
Summary
The positive identification of bovine spongiform encephalopathy or BSE,
commonly known as “mad cow disease,” in a Washington State cow in December
of 2003 sparked a number of reactions from the federal government, the meat
industry, and close to forty countries world-wide. The U.S. Department of
Agriculture (USDA), for example, announced a one-time extensive BSE sampling
and surveillance program designed to test as many high-risk cattle as possible over
a 12 to 18-month period with the assistance of designated state and university
diagnostic laboratories across the country. USDA intends to implement the new
program by June 1, 2004, and will be using newly USDA-approved “rapid”
immunologic test kits.
However, most countries quickly banned the importation of United States beef
following the announcement. Furthermore, Japan now requires that all cattle killed
for its market be tested for BSE. In an effort to meet this new consumer demand,
some private slaughterers propose to test 100% of their cattle using USDA approved
“rapid test” kits. For example, Creekstone Farms Premium Beef, a private specialty
producer and processor of Black Angus Beef, sought approval from the USDA to
conduct voluntary BSE rapid testing for all the cattle it processes in order to promote
sales, especially exports. The USDA, however, rejected Creekstone’s request
primarily because the test had only been licensed for animal health “surveillance”
purposes and “the test as proposed by Creekstone would have implied a consumer
safety aspect that is not scientifically warranted.”
The USDA’s rejection of Creekstone’s request to privately test all of its cattle
for BSE has ignited a significant amount of debate among lawmakers and segments
of the beef industry. At issue is whether the USDA’s decision to reject Creekstone’s
request to test all of its animals for BSE was a valid agency action. This report
analyzes the legal authority of the USDA’s Animal and Plant Health Protection
Service to regulate all testing for BSE, particularly the voluntary testing of 100% of
a private company’s animals with rapid test kits. This analysis also discusses the
USDA’s recent rejection of Creekstone’s application to test all of the cattle it
processes for BSE.
This report does not discuss the possible role that the Food and Drug
Administration may play in the regulation of BSE testing and surveillance, nor does
it discuss the jurisdictional issues associated with the potential litigation that may
arise from the Creekstone decision. For information on USDA, FDA, and legislative
activities relating to BSE, please see CRS Issue Brief IB10127, Mad Cow Disease:
Agricultural Issues for Congress
. This report will be updated as warranted.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
USDA Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Rapid Test Kits
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Private Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Arguments for the Inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Arguments Against the Inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Creekstone Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

The Private Testing of Mad Cow Disease:
Legal Issues
Background
Historically, the federal government has assumed primary responsibility for the
management and testing for foreign animal diseases1 like bovine spongiform
encephalopathy or BSE, commonly known as “mad cow disease.” States and
veterinarians have played a role in animal disease testing but usually with significant
federal oversight. With respect to BSE, the U.S. Department of Agriculture (USDA)
has recently announced a one-time extensive BSE sampling and surveillance program
designed to test as many cattle in the targeted high-risk population as possible over
a 12 to 18-month period with the assistance of designated state and university
diagnostic laboratories across the country.2 The USDA’s surveillance plan will also
obtain a random sample of normal, but older animals at slaughter.3 USDA intends
to implement the new program by June 1, 2004, and will be using newly USDA-
approved “rapid” immunologic test kits.4 Rapid tests are designed to determine the
presence of abnormal BSE-related proteins within a few hours—a dramatic
difference from the international “gold standard” test for BSE: the
immunohistochemistry test, which can take up to two weeks.
Some countries, like Japan, see USDA’s proposed sampling as inadequate and
have insisted that the United States test all of its cattle for the fatal disease at
slaughter before it will allow the beef to enter its borders. Japan has placed a ban on
U.S. beef since the first case of BSE was diagnosed in Washington State in
1 Foreign animal disease are important transmissible livestock or poultry diseases believed
to be absent from the United States that can have potentially significant health or economic
impacts.
2 USDA estimates that 250,000 to 400,000 samples could be tested during a one-year
collection period. The targeted high-risk populations include cattle that are exhibiting
central nervous system disorders, nonambulatory cattle (downers), and those that die on the
farm of unknown causes. See USDA, Bovine Spongiform Encephalopathy (BSE)
S u r v e i l l a n c e P l a n
( M a r c h 1 5 , 2 0 0 4 ) a v a i l a b l e a t
[http://cofcs66.aphis.usda.gov/lpa/issues/bse/BSE_Surveil_Plan03-15-04.pdf].
3 Id. The BSE disease can take years to develop from exposure to clinical signs;
consequently, it is argued that only older animals (i.e., animals approximately 30 months
and older) are an appropriate population for BSE surveillance testing.
4 USDA anticipates reaching full testing capacity around the first part of July 2004.
Statement by Dr. Ron DeHaven, Administrator of APHIS, Technical Briefing, Release No.
0204.04, (May 21, 2004).

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December of 2003. Japan usually imports about $1 billion annually of U.S. beef.5
Creekstone Farms Premium Beef, a private specialty producer and processor of Black
Angus Beef, reportedly sought approval from the USDA to conduct voluntary BSE
rapid testing for all the cattle it processes under a “marketing” program. Japan
represents 20% of Creekstone’s sales.6
On April 8, 2004, the USDA rejected Creekstone’s request primarily because
the test had only been licensed for animal health “surveillance” purposes and “the test
as proposed by Creekstone would have implied a consumer safety aspect that is not
scientifically warranted.”7 The USDA’s rejection of Creekstone’s request to
privately test all of its cattle for BSE with rapid test kits has ignited a significant
amount of debate among lawmakers and segments of the beef industry. At issue is
whether the USDA’s decision to reject Creekstone’s request to test all of its animals
for BSE was a valid agency action. This necessarily calls into question USDA’s
general authority to regulate the voluntary private testing for BSE.
USDA Authority

The USDA cites the Viruses, Serums, Toxins, Antitoxins, and Analogous
Products Act (21 U.S.C. §§151-159) (hereinafter VSTA) and its applicable
regulations as the source of authority for its regulation of animal testing and, more
particularly, the licensing of rapid test kits.8 The VSTA was originally enacted in
1913 primarily in response to substantial losses being suffered by American hog
raisers from the unregulated manufacture and distribution of anti-hog cholera serum.9
The stated purpose of the VSTA in 1913 was to prevent:
the introduction into the United States of dangerous and worthless viruses,
serums and analogous products for use in the treatment of domestic animals,
some of which products may be the means of introducing disease not now known
in the United States, and also for the purpose of controlling the use, by
preventing the interstate shipment, of similar dangerous and worthless products
that may be manufactured within the United States.10
5 Scott Kilman, Beef Firm Plans Mad-Cow Tests in Challenge to U.S. Standards, THE WALL
STREET JOURNAL ONLINE, February 27, 2004. Japan also represents 20% of Creekstone’s
sales.
6 Sally Schuff, Creekstone Farms debate centers on issue of marketing versus food safety,
FEEDSTUFFS, April 19, 2004.
7 USDA Statement by Bill Hawks, Undersecretary for Marketing and Regulatory Programs
Regarding a Request by Creekstone for Private BSE Testing, Release No. 0141.04 (April
9, 2004).
8 Jon Ortiz, State looks to test beef: Lawmakers hope to soften foreign ban, SAC BEE (an
Online Division of THE SACRAMENTO BEE), March 12, 2004, available at
[http://www.sacbee.com/content/business/agriculture/story/8491741p-9420617c.html].
9 Hall v. State, 158 N.W. 362 (Neb. 1916).
10 S.Rept. 62-1288 (1913) (3rd Sess.).

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The USDA found this legislation necessary “in order to protect the farmer and
stock raiser from improperly made and prepared serums, toxins, and viruses.”11
Congress amended the VSTA in the Food Security Act of 1985 (P.L. 99-198, Tit.
XVII, §1768) to (1) authorize the USDA to license and regulate intrastate movement
of biological products, (2) broaden the Secretary’s authority to issue regulations “to
carry out the Act,” (3) grant the agency enhanced enforcement powers, and (4)
recognize a congressional finding that federal regulation was “necessary to prevent
and eliminate burdens on commerce and to effectively regulate such commerce.”12
The legislative history supporting the 1985 VSTA amendments reflects a
congressional understanding of the need for “national uniform standards” in the
preparation and sale of biological products.13
Except as permitted in the act, the VSTA makes it unlawful for any person to
prepare, sell, barter, or exchange anywhere in the U.S., or to ship or deliver in or
from the U.S., any dangerous or harmful virus, serum, toxin, or analogous product
intended for use in the treatment of domestic animals.14 The VSTA further requires
that a person who prepares, sells, barters, exchanges, or ships any virus, serum, toxin,
or analogous product do so in compliance with USDA regulations through an
establishment holding an unsuspended and unrevoked USDA license.15 The VSTA
authorizes the Secretary to issue, suspend, and revoke licenses for the maintenance
of establishments that prepare viruses, serums, toxins, or analogous products for use
in the treatment of domestic animals. Pursuant to 21 U.S.C. §152, the VSTA also
prohibits the importation of any virus, serum, toxin, or analogous product except
under a permit from the Secretary of Agriculture.
The Secretary of Agriculture is also authorized to make and promulgate rules
and regulations as may be necessary to prevent the preparation, sale, barter,
exchange, or shipment of a dangerous virus, serum, toxin, or analogous product for
use in the treatment of domestic animals or otherwise to carry out the VSTA.
Pursuant to this authority, the USDA, through the Animal and Plant Health
Protection Service (APHIS), has promulgated a comprehensive set of regulations
governing the licensing of viruses, serums, toxins, or analogous products (See 9
C.F.R. subchapter E, pts. 101 to 124). Regulations for the VSTA broadly catagorize
viruses, serums, toxins, or analogous products as “biological products” at any stage
of production intended for use in the treatment of animals and which act primarily
through the direct stimulation, supplementation, enhancement, or modulation of the
immune system or immune response. A “biological product” includes but is not
limited to:
11 Hearing before the Committee on Agriculture on the Estimates of Appropriations for the
Fiscal Year Ending June 30, 1914
, (H.R. 28283) 62nd Cong. 24 (1913) (statement of Dr. A.
M. Farrington, Asst. Chief Bureau of Animal Industry, Dept. of Agriculture).
12 See 21 U.S.C. §§151, 154, 159.
13 S.REPT. NO. 99-145 at (1985).
14 21 U.S.C. §151.
15 Id.

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vaccines, bacterins, allergens, antibodies, antitoxins, toxoids, immunostimulants,
certain cytokines, antigenic or immunizing components of live organisms, and
diagnostic components, that are of natural or synthetic origin, or that are derived
from synthesizing or altering various substances or components of substances
such as microorganisms, genes or genetic sequences, carbohydrates, proteins,
antigens, allergens, or antibodies.16 (italics added)
“Treatment” under the regulations means the prevention, diagnosis,
management, or cure of diseases of animals.17 “Prepare” or “preparation” is generally
referred to as the manufacture or production of a biological product and has been
defined as the steps and procedures used in the processing, testing, packaging,
labeling, and storing of a biological product. With respect to licensing, the
regulations require every person who “prepares” biological products subject to the
VSTA to have a valid U.S. Veterinary Biologics Establishment License and at least
one valid U.S. Veterinary Biological Product License.18 A USDA permit is also
required for every person importing a biological product.19
While the VSTA explicitly addresses the preparation, sale, barter, exchange and
shipment only, USDA regulations (discussed below) authorize “use” and
“distribution” restrictions in the public interest or for the protection of animals.
Analysis
The USDA’s rejection of Creekstone’s request to privately test all of its cattle
for BSE with rapid test kits has sparked a considerable amount of controversy. At
issue is whether the USDA’s decision to reject Creekstone’s request to test all of its
animals for BSE was a valid agency action. As such, we first examine how a rapid
test kit may fall within APHIS’s regulatory purview. Next, we address APHIS’s
purported authority over private companies intending to conduct voluntary rapid tests
for BSE. Finally, we discuss the validity of the USDA’s decision in the Creekstone
case.
Rapid Test Kits
In response to the need for an increase in BSE testing, the USDA and some
private beef producers have developed plans to use BSE rapid test kits. In order for
APHIS to regulate the proposed rapid test kits, however, it must be demonstrated that
such tests fall within the regulatory purview of the federal agency (i.e., they must be
a “biological product.”) Pursuant to APHIS regulations, rapid test kits may be
considered “biological products” if they are shown to be “diagnostic” tests
16 9 C.F.R. §101.2.
17 Id.
18 Id. at §102.2.
19 Id. at §104.1.

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“prepared” for and used in the “treatment” of cattle.20 In addition or in the
alternative, one could also argue that a rapid test kit, as a test prepared and intended
to detect an animal disease, may be an “analogous product.” “Analogous products”
are considered “biological products” when the item in question at any stage of
production or distribution resembles a biological product intended for use in the
treatment of animals through appearance or representations.
The applicability of the aforementioned regulations seem to make USDA’s
authority over the manufacture and distribution of rapid test kits reasonably clear.
Furthermore, these applications seem consistent with APHIS’s overarching mission
under the VSTA (and other laws) to protect U.S. public and agricultural health by
assuring that biologics used in the treatment of animals are pure, safe, potent, and
efficacious.21 As such, it would appear that any person wishing to manufacture,
distribute, or sell rapid test kits would need the appropriate USDA licenses or
demonstrate that they do not fall within the reach of the federal regulations. In fact,
the USDA has reportedly licensed at least four different companies’ rapid test kits.22
What is not entirely clear, however, is whether the USDA has the authority to
selectively license the rapid test kits for particular purposes and in essence, keep BSE
testing solely a federal responsibility.
Private Testing
As mentioned above, the USDA has reportedly only licensed rapid test kits for
“surveillance” purposes. This limitation has restricted the ability of private entities
to obtain kits. At the center of the debate is a proposal from Creekstone to privately
test for BSE 100% of the cattle it processes. The tests, however, would be for
reportedly “marketing” purposes rather than the USDA approved, “surveillance”
purpose. The USDA claimed that Creekstone’s proposal had an implied consumer
safety aspect that was not scientifically warranted and denied Creekstone’s request
to use rapid test kits. We could not determine exactly which licenses or permits a
private company intending to “use” BSE rapid test kits would need pursuant to
federal regulations (see Creekstone discussion).23 The authority under which APHIS
20 Moreover, USDA’s approval of the rapid test kits as “surveillance” tools appears
consistent with its regulatory definition of “treatment,” which includes the “diagnosis” and
“management” of animals.
21 Viruses, Serums, and Toxins and Analogous Products; Restrictions on Distribution and
Use, 57 Fed. Reg. 38758 (Aug. 27, 1992).
22 First BSE rapid tests approved for USDA surveillance plan, FEEDSTUFFS, March 29,
2004 (HerdCheck’s IDEXX BSE Antigen Test Kit & Bio-Rad’s TeSeE test); Prionics and
Roche Gain Approval of Rapid BSE Tests for USDA
, PR Newswire, April 8, 2004
(Prionics(R)-Check Western and Prionics(R)-Check LIA (distributed by Roche
Diagnostics)); Abbot Laboratories Receives Approval From U.S. Department of Agriculture
for Rapid Enfer BSE Test
, PR Newswire, April 7, 2004 (Abbot Laboratories’ Rapid Enfer
BSE test).
23 After discussions with Creekstone, however, it appears private laboratories may need to
become a “laboratory approved by State and Federal animal health officials” as per Notice
04-08. It is still unclear, nonetheless, the exact procedure for obtaining this type of
(continued...)

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can regulate the actual “use” of a licensed rapid test kit seems to be less clearly
defined than its authority over the actual preparation of such a biological product.
In determining whether an agency action is valid, a reviewing court examines
the bounds of authority granted to the agency by Congress.24 In Chevron v. Natural
Resources Defense Council
, the Supreme Court established a two part test to assess
the validity of an agency’s interpretation of an authorizing statute.25 First, the court
will look to the statute itself and determine whether Congress has directly spoken to
the question at issue. If it has so spoken and the intent of Congress is clear, both the
court and the agency must give effect to the expressed intent of Congress. In
instances where congressional intent is not clear and the statutory language is
ambiguous, the courts will likely defer to any reasonable agency interpretation, even
if another interpretation is more plausible. Generally, as long as the agency stays
within Congress’s delegation of authority, it is free to make policy choices in
interpreting a statute, and such interpretations are entitled to deference.26 Here, it
must be demonstrated that APHIS’s “use” and “distribution” restrictions are within
the bounds of Congress’s delegated authority in the VSTA.
The extensive reach of APHIS’s authority seems to stem from the VSTA’s
broad grant of authority to the USDA to “make and promulgate from time to time
such rules and regulations as may be necessary to prevent the preparation, sale,
barter, exchange, or shipment. . .” of any biological product in order to carry out the
VSTA. The VSTA also provides APHIS with broad authority to “issue, suspend, and
revoke licenses for the maintenance of establishments . . .” that “prepare” biological
products intended for use in the treatment of animals. Creating a regulatory and
licensing scheme governing the safety, efficacy, purity, and potency of biological
products seems to be well within this broad congressionally delegated authority. The
VSTA and its legislative history do not appear to explicitly address who may “use”
a biological product, the extent to which APHIS can deny a license, or the type of
restrictions that can be placed on the licenses. Indeed, with only ten short provisions,
23 (...continued)
approval.
24 See generally Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837 (1984). A reviewing court’s inquiry under Chevron is rooted in statutory analysis and
focuses on discerning the boundaries of Congress’ delegation of authority to the agency.
It should be mentioned that the Supreme Court recently revisited Chevron in FDA v. Brown
& Williamson Tobacco Corp.,
529 U.S. 120 (2000), declaring that the Food & Drug
Administration lacks jurisdictional authority to regulate tobacco products. In reaching this
determination, the Court discussed the first prong of Chevron, declaring that the proper
analysis is to focus not only on the statutory clause, but, rather, to consider the structure,
function, and history of all relevant provisions, interpreting a statute “as a symmetrical and
coherent regulatory scheme.” Id. at 1294. Upon concluding that Congress “squarely rejected
proposals to give the FDA jurisdiction over tobacco,” the Court stated that it was “obliged
to defer not to the agency’s expansive construction of the statute, but to Congress’ consistent
judgment to deny the FDA this power.” Id. at 1315.
25 Id.
26 Arent v. Shalala, 70 F.3d 610, 615 (D.C. Cir 1995), citing Chevron, 467 U.S. at 843-45,
865-66.

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it could be argued that Congress intended that the VSTA be implemented through a
comprehensive regulatory scheme.
The USDA regulates the use and distribution of a biological product in 9 C.F.R.
§102.5(d)—a provision pertaining to the Biological Product License. It states:
Where the Administrator determines that the protection of domestic animals or
the public health, interest, or safety, or both, necessitates restrictions on the use
of a product, the product shall be subject to such additional restrictions as are
prescribed on the license. Such restrictions may include, but are not limited to,
limits on the distribution of the product or provisions that the biological product
is restricted to use by veterinarians, or under the supervision of veterinarians, or
both.
On March 17, 2004, the USDA, through APHIS’s Veterinary Services, issued Notice
No. 04-08 and invoked this purported power. It placed use and distribution
restrictions on Veterinary Biological Product Licenses and Importation Permits for
diagnostic test kits (including rapid tests) intended as an aid in the diagnosis of BSE.
According to the Notice, such diagnostic test kits can only be sold and used by
laboratories approved by State and Federal (USDA) animal health officials.
Moreover, it requires that potency testing, distribution, and use of the BSE test kits
be under the supervision or control of APHIS’s Veterinary Services.
In light of the lack of explicit language on “use” restrictions in the VSTA, we
discuss arguments that would seem to suggest that §102.5(d) is supported by the
VSTA and congressional intent, as well as arguments against such support.
Arguments for the Inclusion. The USDA asserts that the VSTA provides
the authority for the Department to ensure that veterinary diagnostic test kits are safe
and accurate.27 Although the legislative history for the VSTA has been recognized
as “extremely sparse” by some courts,28 the authority for APHIS to regulate the
design, manufacture, importation, distribution, selling, testing, and labeling of
biological products still appears broad. The authority in the VSTA to issue licenses
and implement regulations for such things as the “sale,” “exchange,” and “shipment”
of biologics could arguably capture a restriction on “use” or “distribution.” Indeed,
a restriction on the “sale” of the rapid test kits is exactly what APHIS has done with
Notice No. 04-08. By placing a “sale” restriction on the license for test kits, APHIS
is also apparently controlling who can use such test kits (although the regulations
allow a restriction on use) and acting within its authority to issue regulations and
licenses.
27 Scott Kilman, USDA Prohibits Mad-Cow Tests by Outside Labs, Causing Outcry, WALL
STREET JOURNAL, March 10, 2004, at A-1. Arguably, the “accuracy” of these test kits can
only be assessed in the context of the purpose for which a diagnostic test is being used.
Thus, a test that might serve as a “surveillance” tool may be insufficiently accurate to assure
a farmer that all animals that test negative are free of BSE.
28 See, e.g., Animal Health Institute v. U.S. Dep’t of Agriculture, 487 F. Supp. 376, 378 (D.
Co 1980).

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Every regulated biological product prepared by a licensed establishment must
have a Biological Product License for the products it intends to prepare. USDA has
reportedly licensed the BSE rapid test kits for only “surveillance” purposes and as
mentioned above, restricts the sale and use of such kits to only those laboratories
approved by State and Federal (USDA) animal health officials. Arguably, using
rapid test kits for purposes other than surveillance purposes (i.e., a food safety or a
marketing reason) may provide results outside the federally-accepted performance
parameters for the test. For example, APHIS could argue that the tests which it
approved for BSE surveillance were not evaluated to determine if they were reliable
enough to support a claim that every individual animal that tests negative is actually
negative.29 Overseeing the performance of a diagnostic test kit to ensure that it
produces adequate and accurate test results every time for the stated purpose may be
compatible with APHIS’s regulation of the purity, potency, and efficacy of a
biological product.
The fact that the USDA intends to keep BSE testing within a Federal and State
regulatory scheme seems consistent with the congressional recognition in 1985 that
a “uniform national standard” would better serve livestock owners, veterinarians, and
the American public.30 For example, it could be quite difficult to impose a “uniform
national standard” if private parties were allowed to conduct BSE testing. A private
company’s economic interests, for one, could significantly influence a company’s
compliance with federal regulatory protocol. Along the lines of maintaining a
uniform standard, some courts have even determined that where safety, efficacy,
purity, and potency of biological products are concerned, APHIS, through its
comprehensive regulations, has preempted the field.31 While these cases generally
address the preemption of state common law tort claims, they arguably demonstrate
the breadth of APHIS’s oversight in the field of animal biologics. It is this expansive
field of authority that makes it plausible to argue that a regulation over the actual
“use” of a rapid test kit would not be manifestly contrary to the VSTA.
The restriction on “use” and “distribution” also seems consistent with APHIS’s
overarching mission under the VSTA to protect U.S. public and agricultural health
by assuring that biologics used in the treatment of animals are pure, safe, potent, and
29 With respect to the testing of Chronic Wasting Disease—the BSE analogue in deer and
elk—APHIS has argued that no test can be used reliably on individual animals to determine
whether that animal is free from CWD. Animal and Plant Health Inspection Service, USDA,
Position Paper: Official diagnosis of CWD should be performed exclusively by Federal and
State Regulatory agency laboratories
, February 2004, available at
[http://aphisweb.aphis.usda.gov/lpa/issues/cwd/positioncwdtest.doc].
30 See Lynnbrook Farms v. Smithkline Beecham Corp., 79 F.3d 620 (7th Cir. 1996), citing
S. REP. NO. 99-145 at 339.
31 See, e.g., Symens v. SmithKline Beecham Corp. 152 F.3d 1050 (8th Cir. 1998);
Lynnbrook Farms v. Smithkline Beecham Corp., 79 F.3d 620 (7th Cir. 1996); Cooper v.
United Vaccines, Inc., 117 F. Supp. 2d 864 (E. D. Wis. 2000); Brandt v. The Marshall
Animal Clinic and Smithkline Beecham Corp., 540 N.W. 2d 870 (Minn. Ct. App. 1995).
These cases basically hold that states are not free to impose requirements, whether through
positive enactments or common law tort claims, that are different from or in addition to
those requirements of the regulations that have been duly promulgated by APHIS.

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efficacious.32 For instance, a rapid test kit may be “efficacious” for a program in
which thousands of targeted cattle are tested to determine nationwide prevalence, but
not “efficacious” to support the certification of thousands of specific, individual
animals as BSE-free because the tests could have some false-negative or false-
positive results. The restriction on “use” and “distribution” could also be buttressed
by the USDA’s objective to preserve domestic and international market confidence
in U.S. agricultural commodities. For example, with respect to the testing of Chronic
Wasting Disease—the BSE analogue in deer and elk—APHIS has argued that such
testing must be performed exclusively by Federal and State regulatory agency
laboratories in order better maintain international credibility of the U.S. animal health
system.33
Arguments Against the Inclusion. While the VSTA and APHIS’s overall
mission broadly support its regulation of the “use” of a biological product, it appears
the VSTA, its regulations and some legislative history place much more emphasis
on the manufacture of a biological product, rather than its intended “use.” For
example, with respect to the VSTA regulations in subchapter E of title 9 of the
C.F.R., we located only one subpart of one section (§102.5(d)), which restricts the
actual “use” of a biological product (except maybe for import permits).34 The
regulatory control that APHIS is attempting to accomplish with this one subpart of
the licensing regulation could be called into question when viewed comparatively to
the developed legal and regulatory framework utilized by the Food and Drug
Administration (FDA) and two other agencies in the Department of Health and
Human Services (DHHS) to oversee similar activities.
The FDA not only regulates human drugs and biological products, but also
participates with the Centers for Medicare & Medicaid Services (CMS) and the
Centers for Disease Control and Prevention (CDC) to oversee the actual use of
certain tests in laboratories through an elaborate set of certifications and
accreditations.35 The FDA is authorized to conduct these activities pursuant to the
32 The USDA specifically included a provision for “potency” testing in Notice No. 04-08 for
BSE diagnostic test kits.
33 Animal and Plant Health Inspection Service, USDA, Position Paper: Official diagnosis
of CWD should be performed exclusively by Federal and State Regulatory agency
l a b o r a t o r i e s
, F e b r u a r y 2 0 0 4 , a v a i l a b l e a t
[http://aphisweb.aphis.usda.gov/lpa/issues/cwd/positioncwdtest.doc].
34 We did locate in 9 C.F.R. pt. 121 regulations that allow APHIS to monitor the actual
possession, use, and transfer of biological agents and toxins. These regulations, however,
find their authority in the Agricultural Bioterrorism Protection Act of 2002 (P.L. 107-188,
Tit. II, §211) not the VSTA. They were apparently implemented in light of the increased
threat of biological warfare and require the registration of any individual or entity that
possesses, uses, or transfers specified agents or toxins (including BSE). It is unclear why
Congress essentially had to reach outside the VSTA to support regulating the actual use and
possession of these biological agents and toxins.
35 See [http://www.cms.hhs.gov/clia/progdesc.asp]. The CMS is charged with the
implementation of the Clinical Laboratory Improvement Amendments of 1988 (CLIA),
including laboratory registration, fee collection, surveys, surveyor guidelines and training,
(continued...)

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Clinical Laboratory Improvement Amendments of 1988 (CLIA) (42 U.S.C. §263a).
Some may find that the regulatory control that APHIS is attempting to accomplish
with §102.5(d) is similar to that of the CLIA, but uses what appears to be a much less
developed legal and regulatory framework. Accordingly, there may be some doubt
as to the expansiveness of the USDA’s authority to implement a restriction on “use”
like §102.5(d) and the extent to which Congress intended APHIS to regulate who
actually “uses” a biological product.
Aside from the legislative history supporting the 1985 Amendments to the
VSTA, there appears to be some support in the early legislative history and language
of the VSTA that it was actually intended to regulate the manufacture of biological
products. VSTA regulations, for example, may be promulgated to prevent the
preparation and sale of worthless, contaminated, dangerous, or harmful biological
products. From this language, it may be reasonable to question the extent to which
the USDA can regulate the “use” of properly made and licensed biological products.36
Moreover, during a 1914 Agriculture hearing, Dr. A. M. Farrington, Assistant Chief
of the USDA’s Bureau of Animal Industry, stated that with the recent production of
hog cholera serums, it was “necessary to supervise the manufacture of these products
so that only serums of good quality shall be produced for sale to farmers.”37 He went
on to further note that the VSTA was intended to “protect the farmer and stock raiser
from improperly made and prepared serums, toxins, and viruses.”38 Indeed, the
abundant use of the word “prepare” (as defined in the regulations) in the VSTA and
regulations would seem to reiterate Dr. Farrington’s observations.
The use of the word “prepare” in licensing requirements and regulations may
limit the authority of the USDA over private companies wishing to “use” rapid test
kits. The regulations make clear that establishments qualified to “prepare” biological
products must have a valid establishment license and at least one valid biological
product license for every biologic to be “prepared” in the licensed establishment.
According to APHIS regulations, “prepare” means the manufacture or production of
a biological product and includes the steps and procedures used in the processing,
testing, packaging, labeling, and storing of a biological product. Aside from the
imposition of §102.5(d) on the Biological Product License and Importation Permit,
it could be argued that a private company wishing to “use” a rapid test kit would be
bound only to the extent it can be shown that it is actually selling, bartering,
35 (...continued)
enforcement, approvals of PT providers, accrediting organizations and exempt states. The
CDC is responsible for the CLIA studies, convening the CLIA Committee, and providing
scientific and technical support/consultation to DHHS/CMS. The FDA is responsible for test
categorization.
36 The USDA, however, could claim that a properly made rapid test kit used for an
unlicensed purpose may be harmful and dangerous to the national herd. For example, a false
positive could prompt the USDA to take drastic measures (i.e., eradication) involving a
number of cattle in order to resolve the purported problem.
37 Hearing before the Committee on Agriculture on the Estimates of Appropriations for the
Fiscal Year Ending June 30, 1914
, (H.R. 28283) 62nd Cong. 24 (1913) (statement of Dr. A.
M. Farrington, Asst. Chief Bureau of Animal Industry, Dept. of Agriculture).
38 Id.

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exchanging, shipping or more broadly, “preparing” a regulated rapid test kit.39 Here
however, except for perhaps storing the rapid test kits, it may be difficult to
demonstrate that a private company is actually “preparing” a biological product as
contemplated by the regulations.
Summary. The USDA appears to have broad regulatory authority when it
comes to the purity, safety, potency, and efficacy of biological products or more
generally, their preparation, manufacture, and sale. Indeed, the overall mission of
APHIS, the VSTA and its legislative history, and some case law all could be argued
to support the USDA’s extensive authority over the production of biological products
and could be more broadly interpreted to support USDA’s oversight over the actual
“use” of the rapid test kits. In the alternative, given that the VSTA and its legislative
history do not appear to explicitly address restrictions on the actual “use” or
“distribution” of a biological product, a court might find that the VSTA is ambiguous
and could give deference to a reasonable APHIS interpretation.40 Accordingly, a
valid argument could be made that the “use” and “distribution” restrictions on BSE
rapid test kits are apparently within the bounds of Congress’s broad delegations of
authority upon the USDA to issue licenses and promulgate regulations.
Nonetheless, the arguments discussed above also seem to suggest that APHIS
may not have the proper legal framework in place to support its restrictions on the
“use” and “distribution” of biological products. In addition, it could be argued that
the main thrust of the VSTA and its regulations still appears more applicable to the
preparation, manufacture, and production of biological products rather than
restricting their actual “use.” However, if it can be shown that the VSTA does not
explicitly make clear Congress’ intention with respect to restrictions on “use” and
“distribution,” (i.e., the statute is ambiguous) these arguments may not withstand the
deference usually accorded an agency’s reasonable interpretation of the authorizing
statute.
The Creekstone Decision
Assuming APHIS does have the authority to regulate who actually uses the rapid
test kits, the next inquiry a reviewing court is likely to address is whether the
agency’s discharge of that authority was reasonable. Such a question falls within the
province of traditional “arbitrary and capricious review” under 5 U.S.C.
§706(2)(A).41 Generally, the scope of review under the arbitrary and capricious
standard is narrow, and a court is unlikely to substitute its judgment for that of an
39 As previously discussed, anyone who imports a biological product must hold a valid
USDA permit. By requiring a permit, USDA is arguably restricting the “use” of the
biological product.
40 To determine if §102.5(d) is reasonable a court is likely to apply traditional “arbitrary and
capricious review” under 5 U.S.C. §706(2)(A) (See the analysis under the Creekstone
Decision section of the memo for a discussion on “arbitrary and capricious review.” ) We
assume for purposes of this analysis that a court would find §102.5(d) reasonable, provided
a court also finds that the USDA was acting within its congressionally delegated bounds.
41 See Motor Vehicle Mfg. Ass’n v. State Farm Mutual Automobile Ins. Co., 463 U.S. 26
(1983).

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agency.42 Nonetheless, an agency must articulate a satisfactory explanation for its
action, including a rational connection between the facts found and the choice made.
Normally, an agency rule would be arbitrary and capricious if the agency (1) has
relied on factors which Congress has not intended it to consider, (2) entirely failed
to consider an important aspect of the problem, (3) offered an explanation for its
decision that runs counter to the evidence before the agency, or (4) is so implausible
that it could not be ascribed to a difference in view or the product of agency
expertise.43
With respect to the Creekstone case, a reviewing court would likely attempt to
determine whether APHIS’s decision to deny Creekstone a license to privately test
for BSE was arbitrary and capricious in light of the evidence presented and
congressional intent. Although we could not confirm exactly which license
Creekstone applied for pursuant to federal regulations, we believe Creekstone was
attempting to become a “laboratory approved by State and Federal animal health
officials” as per Notice 04-08.44 As mentioned above, courts generally provide an
agency implementing an authorized regulation a considerable amount of deference;
thus, it may be difficult for Creekstone to overcome APHIS’s denial, provided it was
based on a rational and satisfactory explanation. Aside from a brief press release on
April 9, 2004 that articulates its general rationale for the denial, the USDA has not
made public any detailed explanation. Accordingly, we only provide a brief analysis
on conclusions that can be drawn from this press release and other supporting data.
APHIS seems primarily concerned with the implied consumer safety aspect that
100% testing may produce. It has determined, based on the findings of an
international panel of experts, that there is no scientific justification for 100% testing
because the disease does not appear in younger animals.45 APHIS also seems
concerned with the implied safety aspect since it believes that no test has been shown
to be reliable enough to support use as a food safety test.46 It has also claimed that
the chances of a “false positive” for BSE could have “devastating” effects on the U.S.
42 Id. at 43.
43 Id.
44 Telephone discussion with Mr. Bill Fielding, C.O.O., Creekstone Farms Premium Beef
(May 5, 2004); Telephone discussion with Mr. James Wilson, Quality Control Manager,
Creekstone Farms Premium Beef (May 6, 2004). According to Creekstone, it was seeking
guidance from the USDA as to which permit or license was necessary for it to conduct BSE
rapid tests. USDA apparently did not address which specific license or permit was required,
but rather more broadly rejected Creekstone’s request all together.
45 USDA Statement by Bill Hawks, Undersecretary for Marketing and Regulatory Programs
Regarding a Request by Creekstone for Private BSE Testing, Release No. 0141.04 (April
9, 2004).
46 Animal and Plant Health Inspection Service, USDA, Position Paper: Official diagnosis
of CWD should be performed exclusively by Federal and State Regulatory agency
l a b o r a t o r i e s
, F e b r u a r y 2 0 0 4 , a v a i l a b l e a t
[http://aphisweb.aphis.usda.gov/lpa/issues/cwd/positioncwdtest.doc].

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economy and international trade.47 Relatedly, for the testing of Chronic Wasting
Disease—the BSE analogue in deer and elk—APHIS has argued that such testing
must be performed exclusively by Federal and State regulatory agency laboratories.
It buttressed its decision with the claim that the international credibility of the U.S.
animal health system was largely predicated on having an established set of
government labs.48
It would appear that arguments centered around APHIS’s role in providing a
safe and reliable food supply both domestically and internationally are consistent
with APHIS’s and the USDA’s overall mission and expertise. The main thrusts of
the arguments may be centered around the scientific evidence that purportedly
supports USDA’s position. APHIS should be wary of evidence, however, that
demonstrates that its decision was counter to the evidence or did not consider an
important aspect of the problem. For example, APHIS has consistently argued that
the testing of all animals is not scientifically justified. However, in 2002 and 2003,
the USDA reportedly tested over 2,000 head of cattle younger than 30-months old for
BSE.49 There has also been some reported cases of cattle under the age of 30 months
testing positive for BSE in Europe and Japan.50 Creekstone has argued that the
testing of younger animals would actually provide a useful negotiating advantage
with foreign countries like Japan by disproving the theory that it is necessary to test
all animals.51 Evidence could also be introduced showing the extent to which APHIS
even considered alternatives or the need for business innovation to keep up with
consumer demand.
Creekstone may also try to demonstrate that its “marketing” BSE test program
enhances the “surveillance” aspect of the USDA’s program and does not have
“implied consumer safety aspects.” For example, depending on the scientific
evidence presented, it may be plausible to argue that the testing of animals under a
“marketing” program does not necessarily entail “treatment” as USDA regulations
contemplate or require the same level of scrutiny. Also, with respect to marketing,
the USDA apparently certifies many food items for quality assurances that arguably
may have little to do with food safety (e.g., National Organic Program, Meat Grading
and Certification, Beef Export Verification Program, and the Non-Hormone Treated
Cattle Program).
47 Id.
48 Id.
49 Steve Mitchell, Records contradict USDA’s mad cow decision, UNITED PRESS
I N T E R N A T I O N A L , A p r . 2 1 , 2 0 0 4 , a v a i l a b l e a t
[http://www.upi.com/view.cfm?StoryID=20040420-052613-8197r]. This report was based
on a UPI FOIA request.
50 Id. Others, however, believe that the number of cattle under 30 months that test positive
for BSE is “statistically insignificant,” and that two cases in Japan have question marks as
to whether they really were positives because both tested positive with rapid tests but
negative with the more sensitive IHC test. Testing Debate Misses the Point, CATTLE
BUYERS WEEKLY (Apr. 26, 2004).
51 Carole Sugarman, Creekstone completing BSE testing lab despite lack of USDA approval,
FOOD CHEMICAL NEWS, Vol. 46, No. 7 (March 29, 2004).

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Summary. With the multitude of factors that may affect this case, it is difficult
to predict all the possible resolutions. Creekstone, for example, has cited a number
of legal remedies that it may seek, including the approval of a “BSE tested” label, the
approval of Kansas State University as an official USDA lab, and an increase in the
total number of head tested under the USDA’s program. Nonetheless, courts are
generally unwilling to substitute their judgment for that of an agency, and a
government agency generally only has to show a rational connection to the evidence.
As such, provided APHIS can demonstrate that each of its reasons for keeping BSE
testing within the exclusive purview of Federal and State laboratories is rationally
justified by explanatory material, it appears reasonable to infer that a court would
uphold APHIS’s decision.