By Lisa M. Campbell, Lisa R. Burchi, and Margaret R. Graham
On September 16, 2016, the U.S. Environmental Protection Agency (EPA) announced it settled an enforcement matter with Syngenta Crop Protection, LLC (Syngenta or Respondent) via a Consent Agreement and Final Order (CAFO) concerning EPA’s allegations that Syngenta violated the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and EPA’s Pesticide Container and Containment Rule (PCCR). The investigation took place over three years, starting in August 2012 and concluding in January 2015. The multi-regional investigation which took place over three years, from August 2012 to January 2015, was conducted by EPA Regions 4, 5, 7, and 8, and found violations in six states: Ohio, Colorado, Iowa, Kansas, Michigan and Missouri.
The CAFO listed the alleged violations in three parts:
- Failure to have repackaging agreements and failure to maintain records concerning the repackaging agreements: In the CAFO, EPA states that it identified numerous and separate occasions when Respondent distributed or sold approximately 19 registered pesticides to approximately 222 refillers “prior to having written repackaging agreements in place with such refillers,” “and/or failed to maintain records of the repackaging agreements with the refillers.” The requirements for such agreements and record keeping are set forth at 40 C.F.R. §§ 165.67(b)(3), 165.67(d), and 165.67(h).
- Distribution and sale of misbranded pesticides: In the CAFO, EPA states that at least seven inspections conducted at different facilities that were refillers of Respondent’s pesticides found pesticides affixed with outdated labels, as well as sales of such products with outdated labels. EPA states that Syngenta was the registrant of all the products at issue and had provided the refillers with the outdated labels for repackaging the pesticide products in refillable containers or bulk tanks on at least 19 separate occasions.
- Failure to maintain data submitted for pesticide registration: In the CAFO, EPA states it conducted an inspection at two laboratories to review compliance with Good Laboratory Practice requirements, and to audit the data for studies submitted by Respondent to EPA to support one of its pesticide registrations. In both cases, Respondent informed EPA that it did not maintain records or raw data associated with the studies and the laboratories confirmed they did not maintain the records at their facilities.
Syngenta neither admits nor denies these allegations, but has agreed to pay a civil penalty of $766,508, as well as to complete an environmental compliance promotion Supplemental Environmental Project (SEP) within four years at a cost of not less than $436,990. Specifically, the SEP will involve a four-year educational awareness training and campaign to educate the regulated community on FIFRA regulatory compliance requirements pertaining to the PCCR. The training will focus on the requirements relevant to bulk pesticide containers, containment, labels, storage, transportation, delivery, clean-out, repackaging agreements, and recordkeeping. The training is intended to increase awareness across a broad array of businesses that handle pesticides, including registrants, refillers, retailers, commercial applicators, and custom blenders of pesticides.
EPA states that the settlement sends “a strong message to pesticide companies to maintain compliance with all federal environmental laws.” Indeed, the breadth of EPA’s investigation and the ultimate size of the penalty signify EPA’s focus on pesticide violations and, particularly, misbranded pesticides. EPA in recent years has focused on labeling violations between registrant and supplemental distributor labels and the issues in this case have some similarities, particularly the need for written contacts between registrants and refillers or supplemental distributors, and also the need to ensure that current pesticide labels are provided before repackaging and relabeling take place.
More information concerning supplemental distributors and repackaging is available in our blog item Registrants Penalized for Actions of Third-Party Pesticide Distributor, our memorandum EPA’s Enforcement Efforts Regarding FIFRA Supplemental Distribution and How to Avoid Noncompliance and in the materials from our webinar EPA's Supplemental Distribution: Enforcement Actions Are Buzzing: How to Avoid Getting Stung.
By Lisa M. Campbell and Lisa R. Burchi
In an April 22 memorandum, the Office of Inspector General (OIG) for the U.S. Environmental Protection Agency (EPA) announced its intent to begin preliminary research to assess the EPA’s inspections of, and enforcement against, illegal pesticide imports.
OIG states that its objective with this project is to “determine whether the EPA’s Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) import inspection program is effectively deterring, identifying and confiscating illegal pesticide imports, to protect human health and the environment.” OIG’s efforts will include determining whether EPA is effectively identifying pesticide imports for inspection and sampling, as well as whether EPA is taking appropriate enforcement action against noncompliant imports.
OIG notes that this project is included in its fiscal year 2016 Annual Plan. The Annual Plan notes a project commencement date of June 2016 and describes its efforts as follows:
- The EPA’s enforcement program addresses the illegal importation of unregistered or otherwise noncompliant pesticide products into the United States. This project could result in reduced risks to human health and the environment due to Federal Insecticide, Fungicide and Rodenticide Act imports noncompliance, while assuring effective deterrence through inspections and enforcement actions. We will seek to determine whether the Federal Insecticide, Fungicide and Rodenticide Act Import Inspection program effectively deters or identifies and confiscates illegal pesticide imports to protect human health and the environment.
OIG’s review of EPA’s activities in this area should come as no surprise considering that the EPA Office of Enforcement and Compliance Assurance (OECA) has identified import border compliance as one of its three FIFRA focus areas for the past several years. For example, OECA’s FY 2016-2017 National Program Manager Guidance (NPMG), which sets forth OECA’s priority-setting strategies, has made EPA Regions aware of EPA’s strong interest in import compliance. The NPMG suggests that the Regional office efforts in this regard include monitoring import compliance through inspections; focusing on “high-risk” unregistered pesticides and importers with a history of noncompliance or significant importation activities from countries frequently associated with noncompliant shipments; and overseeing the transition of manual review of Notices of Arrival (NOA) to the Automated Commercial Environment in the International Trade Data System (ACE/ITDS). Indeed, there is a noticeable uptick in EPA Regional office review of NOAs and OECA enforcement of noncompliant pesticide imports.
Companies that import pesticides should carefully review their import policies and how they prepare their NOAs to ensure they do not invite EPA scrutiny and potential enforcement action.
By Lisa R. Burchi
On June 19, 2015, the United States District Court for the District of Columbia granted a motion for default judgment by the Non-Dietary Exposure Task Force (Task Force) and confirmed an arbitration award against an Indian pesticide manufacturer, Tagros Chemicals India, Ltd. (Tagros) (Non-Dietary Exposure Task Force v. Tagros Chems. India Ltd., 2015 BL 195490, D.D.C., 1:15-cv-00132, 6/19/15). The Task Force sued Tagros after Tagros refused to sign a $500,000 settlement agreement negotiated by the parties in the midst of a Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) arbitration proceeding, and continued its refusal to pay after the Task Force successfully moved the arbitrator to issue an award enforcing the settlement agreement. The Court determined it has jurisdiction because FIFRA “confers jurisdiction on the judiciary to enforce [such] arbitration awards” in federal court and Tagros’ participation in the arbitration allowed the court to exercise jurisdiction over Tagros. The Court found that the arbitration award must be confirmed in full absent evidence of fraud, misrepresentation, or other misconduct by one of the parties, and no such allegations were put forth. The Court also granted the Task Force’s motion seeking permission to register this judgment in other district courts based on information that Tagros’ assets were not in the District of Columbia and evidence of assets in other jurisdictions.
This decision adds to a growing number of recent cases where companies have sought judicial enforcement of a FIFRA arbitration award. Judicial judgments enforcing arbitration awards, in addition to judicial authority to register such judgments in districts where assets are available, are tools data owners are increasingly using to obtain the compensation owed.
By Lisa M. Campbell and Lisa R. Burchi
On June 10, 2015, and June 15, 2015, the U.S. Environmental Protection Agency (EPA) held a webinar entitled “eDisclosure: EPA's Plan to Modernize the Implementation of the Audit Policy and the Small Business Compliance Policy.” During the webinar, EPA set forth its plans to release in fall 2015 a centralized online portal called eDisclosure to allow companies to submit self-disclosures electronically under EPA’s Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations (Audit Policy) and Small Business Compliance Policy. EPA stated that it is developing eDisclosure in an effort to continue to promote the benefits of self-disclosures, while also saving time and resources by modernizing and streamlining the disclosure procedure.
Companies with potential Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) violations that can satisfy all nine conditions of self-disclosure under the Audit Policy (i.e., systematic discovery; voluntary discovery; prompt disclosure; independent discovery and disclosure; correction and remediation; prevent recurrence; repeat violations are ineligible; certain types of violations are ineligible; and cooperation) are eligible for 100 percent penalty mitigation, while companies that satisfy conditions 2-9 (i.e., all except systematic discovery) are eligible for 75 percent penalty mitigation. A related policy for small businesses (those with 100 or fewer employees) modifies the conditions as further incentives (e.g., 100 percent penalty mitigation even if the discovery is not systematic, with longer compliance timeframes).
FIFRA self-disclosures will fall into Tier 2, under which the eDisclosure system will automatically issue an electronic Acknowledgement Letter (AL) confirming EPA’s receipt of the disclosure, and promising that EPA will make a determination as to eligibility for penalty mitigation if and when it considers taking an enforcement action for environmental violations. There are timeframes set for the submission, and/or potential extension, of compliance reports certifying violations have been corrected.
If an extension is sought for more than 60 days (or within 90 days of submitting an online Small Business Compliance Policy disclosure) past the date of discovery of such violation(s), EPA states that eDisclosure will automatically grant the request, but that EPA could later determine, if and when it considers taking an enforcement action, that the correction was not made promptly and thus this Audit Policy condition is not satisfied.
Companies with potential FIFRA violations can benefit from EPA’s development of eDisclosure, as this is a positive step indicating EPA’s support for and interest in encouraging continued use of its Audit Policy There are several issues that companies will need to review carefully, including Central Data Exchange (CDX) registration, protection of confidential business information, special issues for “new” owners disclosing violations of recently acquired companies, and changing EPA policies regarding its potential disclosure of settled and unsettled Audit Policy cases.
EPA will issue in fall 2015 a Federal Register notice simultaneously with its launch of e-Disclosure to describe the new portal and how EPA plans to implement the Audit Policy and Small Business Compliance Policy. Although there is no formal comment period, stakeholders should consider providing input now while EPA is in the midst of developing eDisclosure.
By Lisa M. Campbell and Lisa R. Burchi
On April 20, 2015, the U.S. Environmental Protection Agency (EPA) announced it had reached settlements with three major pesticide registrants, for the actions of a third-party pesticide distributor, Harrell’s LLC (Harrell’s), a Florida-based lawn and turf care business that was distributing the registrants’ respective products. EPA alleged that Harrell’s sold improperly labeled products that contained the pesticides dithiopyr, chlorantra-niliprole, and imidacloprid.
Without admitting liability, each registrant agreed to pay a penalty with one agreeing, in addition to completing a supplemental environmental project (SEP), to create a $231,000 educational website for the pesticide industry that will feature information on complying with federal pesticide laws.
A 2012 EPA investigation found more than 350 instances of Harrell’s products having been sold without proper pesticide labels -- in some cases, labels were either illegible or were not on the products at all. The products at issue were registered and were sold and distributed by Harrell’s under supplemental distributor relationships. In late 2013, Harrell’s agreed to pay a $1,736,560 civil penalty to EPA, one of the largest ever for a pesticide case.
Under EPA regulations, supplemental distributors like Harrell’s are agents of the registrants, and those registrants are thus responsible and liable for the actions of their supplemental distributors. In its recent National Enforcement Program Managers Guidance (NPMG), EPA’s Office of Enforcement and Compliance Assurance identifies Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) supplemental distribution as a mandatory “focus area.” Specifically, EPA states:
Although required to be consistent with the labels of the basic registered products, distributor product labels frequently deviate substantially from the EPA accepted labels. Such unapproved product labeling can lead to misuse and misapplication as well as pose significant risks to the users who rely on product labels to inform them about proper and safe pesticide use. Due to the potential risk associated with the use of improperly labeled pesticides, it is important that the EPA aggressively pursue compliance for supplemental registrations.
Bergeson & Campbell, P.C. (B&C®) recently issued a memorandum discussing the enforcement actions, the regulatory requirements for supplemental distribution, and what issues companies should address to help avoid such an enforcement action. That memorandum, “EPA’s Enforcement Efforts Regarding FIFRA Supplemental Distribution and How to Avoid Noncompliance,” is available online.
B&C also presented a webinar, “EPA's Supplemental Distribution Enforcement Actions Are Buzzing: How to Avoid Getting Stung,” on July 23, 2014, highlighting the most important steps that both registrants and supplemental distributors can take to ensure compliance and avoid being stung in the current heightened enforcement environment. A recap of the webinar is available online.
By Lisa M. Campbell, James V. Aidala, and Susan Hunter Youngren, Ph.D.
On January 5, 2015, the Natural Resources Defense Council (NRDC) filed a petition for review in the U.S. Court of Appeals for the Ninth Circuit challenging the November 6, 2014, decision of the U.S. Environmental Protection Agency (EPA) to allow the continued use of tetrachlovinphos (TCVP) in flea control products used on pets. NRDC’s 2009 petition sought to cancel all pet uses of TCVP based on alleged potential health risks to children.
In February 2014, NRDC filed a petition for a writ of mandamus in the United States Court of Appeals for the District of Columbia Circuit seeking the court to compel EPA to respond to NRDC’s petitions to cancel all manufacturer registrations and uses of propoxur and TCVP, which are used in pet flea treatment products. Sergeant’s Pet Care Products, Inc., Wellmark International, and Hartz were among flea collar brands at issue.
In March 2014, EPA announced an agreement with Sergeant’s Pet Care Products, Inc. and Wellmark International, whereby the companies voluntarily cancelled the use of propoxur in flea collars. Related uses of other chemicals, including TCVP in pet collars, were not addressed in that agreement, and EPA denied, in November 2014, NRDC’s 2009 petition seeking to cancel all pet uses of TCVP.
NRDC first petitioned EPA to cancel propoxur uses in pet collars in 2007. NRDC filed a petition in April 2009 to cancel all pet uses of TCVP based on its Poison on Pets II report, which asserted that unsafe levels of pesticide residues are present on dogs and cats after a flea collar is used.
EPA conducted a risk assessment of multiple pet use products (e.g., shampoos, dips, powders, and flea collars) containing TCVP in 2006 during the reregistration process. The majority of the uses were assessed using registrant-submitted chemical-specific data. Potential post-application assessments for the majority of the uses included assessing dermal contact with the treated animal (e.g., a child hugging a dog) and hand-to-mouth contact by a toddler following contact with treated animals (e.g., touching the dog and then putting their hand in their mouth). These were considered to be worst-case assessments based on the amount of dermal and hand-to-mouth contact used by EPA. Potential post-application exposure to adults and children were not assessed for flea collars. In the case of flea collars, EPA concluded: “Post application exposure to residues from pet collars is considered to be insignificant when compared with exposure to other products. Because other, higher exposure uses were not of concern, an assessment for collars was not conducted.”
This last sentence is especially important, as EPA is likely to reiterate this conclusion, whether curtly or in detail, as its direct response to the petition. As this is a fairly predictable Agency response, NRDC appears to want this petition to signal its continuing concerns about organophosphate use generally, and be able to raise concerns about “children’s risks” in particular.