By Lisa M. Campbell, James V. Aidala, and Margaret R. Graham
In a two-page order issued on April 10, 2017, the U.S. District Court for the Middle District of North Carolina granted in part a motion for summary judgment filed by “me-too” registrants, Willowood, LLC, Willowood USA, LLC, Willowood Azoxystrobin, LLC, and Willowood Limited (Defendants), regarding Syngenta Crop Protection, LLC’s (Plaintiff) claims of copyright infringement. Syngenta Crop Protection, LLC v. Willowood, LLC, Case No. 1:15-CV-00274. The claims at issue (Counts V and VI of Plaintiff’’s complaint) were based on the Defendants’ use of Syngenta’s label. The court stated that it was granting this part of Defendants’ motion “because the Federal Insecticide Fungicide and Rodenticide Act (FIFRA) precludes copyright protection for the required elements of pesticide labels . . . of me-too registrants.”
Counts V and VI of Plaintiff’s complaint stated that Defendant copied and used substantial portions of Syngenta’s copyrighted work, and that this infringement is “willful and knowing.” The Defendants’ motion for summary judgment stated with regard to the copyright infringement counts of the complaint:
- Counts V and VI fail as a matter of law because Defendants’ labels comply with applicable federal regulations and contain language that is mandated by federal law. Moreover, under settled law, the portions of Plaintiff’s labels that Plaintiff asserts Defendants have copied are not entitled to federal copyright protection. Finally, to the extent that any portions of Plaintiff’s labels are entitled to copyright protection, Defendants’ copying is permitted under the fair use doctrine.
The order states that “in enacting FIFRA, Congress intended narrow exception to copyright protection for the required elements of pesticide labels as against me-too registrants.” The court expressly rejects the lengthy 2005 decision issued by the District Court for the Eastern District of Pennsylvania, which reached a different conclusion in a similar case, stating that it finds the analysis in that decision “unconvincing.” FMC Corp. v. Control Solutions, Inc., 369 F. Supp. 2d 539, 555-71 (E.D. Pa. 2005). The court states: “FIFRA contemplates that a ‘me-too’ applicant will copy from the original pesticide label in ways that would otherwise infringe a copyright.”
Of interest, the court states that its grant of the summary judgment motion with respect to the copyright claims does not need to take into account an expert report or declarations by, among others, former EPA Office of Pesticide Programs (OPP) officials Debra Edwards and Lois Rossi, filed by Defendants because “the Court is granting the summary judgment motion on legal grounds unrelated to the proffered evidence.”
Plaintiff filed its complaint on March 27, 2015. The complaint included seven counts against Defendants: the infringement of four patents in violation of 35 U.S.C. § 271(a) (Counts I-IV), the two copyright infringement counts (Counts V-VI), and a violation of the Unfair and Deceptive Trade Practices Act (N.C. Gen. Stat § 75-1.1) (Count VII). Count VII of the complaint was dismissed on August 12, 2016, and on March 24, 2017, the court granted Plaintiff’s motion for summary judgment regarding the infringement of two of the four patents; a decision on the infringement of the remaining two patents is still pending.
This opinion, which squarely rejects the 2005 conclusion of another district court, is likely to be of controversy and is the most recent decision in a long-standing debate on this issue between basic registrants and me-too registrants. EPA in the past has appeared to side with the me-too registrants. For example, in an August 3, 2005, letter to the Chemical Producers and Distributors Association (CPDA), written in response to the FMC decision, EPA stated that it “has been the practice of [OPP] since the enactment of FIFRA section 3(c)(7)(a) in 1978 to strongly encourage ‘me-too’ product labels to be identical or substantially similar to the labels of the products on which their registrations are based.” In that letter, EPA stated further: “Conveying application instructions and safety messages for similar products in different ways increases the likelihood that the product will be misused.” EPA at the time noted that there were over 650 mostly “me-too” products for just one herbicide (2,4,-D) -- and that having 650 products each having to say some of the required use instructions differently would be impossible.
Nonetheless, some elements of the label might be viewed as proprietary -- the “look and feel” of a product label, perhaps certain fonts, and trademarked product name (as opposed to the active ingredient name). It remains to be seen whether the April 10, 2017, order is the last judicial word on this subject or whether the issue will continue to be litigated. It is an issue that all registrants should monitor closely.
By Lisa M. Campbell and James V. Aidala
On April 5, 2017, Petitioners Pesticide Action Network North America (PANNA) and the Natural Resources Defense Council (NRDC) (Petitioners) filed a Motion for Further Mandamus Relief in the Ninth Circuit Court of Appeals proceedings regarding the chlorpyrifos tolerances. In the motion, Petitioners respond to the U.S. Environmental Protection Agency’s (EPA) order signed on March 29, 2017, which denied the petition to revoke tolerances. Petitioners state that EPA’s response to the petition (the order) is “no response at all and not what this Court ordered EPA to do,” and asks the court to “grant further mandamus relief, giving EPA 30 days to act on its findings that chlorpyrifos exposures are unsafe and to establish deadlines for the next steps in the revocation and cancellation processes for chlorpyrifos.” Specifically, Petitioners request that the court order EPA to:
- Take regulatory action within 30 days on its finding that chlorpyrifos is unsafe and “make it abundantly clear that what is required within 30 days is final regulatory action based on the neuro-developmental and other risks posed by chlorpyrifos exposures”;
- Resolve objections to its final regulatory action within 60 days, as opposed to “as soon as practicable after receiving the arguments of the parties,” because, Petitioners assert, EPA otherwise may put off their response for a long period of time;
- Require EPA to issue a notice of intent to cancel all chlorpyrifos uses within 60 days, “consistent with its risk assessments and findings that chlorpyrifos is unsafe,” as it has “found drinking water contamination from all chlorpyrifos uses, including nonfood uses, and will need to take regulatory action to end such uses in addition to stopping food uses”; and
- File six-month status reports until the tolerance revocation process and the cancellation proceedings are complete.
It is no surprise that the Petitioners who were disappointed by EPA’s denial of the petition one week ago have now continued their advocacy against the use of chlorpyrifos. As we note in our previous blog item EPA Denies Petition to Ban Chlorpyrifos, EPA articulated its reason for the denial as of this time, but this in itself did not articulate its determination that the registration and associated tolerances met the requirements of the Food Quality Protection Act (FQPA). EPA’s response to this latest legal skirmish will be of interest, as will the court’s response to it. .
More information on the proceedings is available on our blog under key word chlorpyrifos.
By Lynn L. Bergeson, James V. Aidala, and Margaret R. Graham
On February 14, 2017, in the House of Representatives, Rep. Rodney Davis (R-IL) introduced H.R. 1029, the “Pesticide Registration Enhancement Act of 2017,” which reauthorizes the Pesticide Registration Improvement Act (PRIA). H.R. 1029 was immediately referred to the Agriculture Committee and to the Energy and Commerce Committee; it was passed by the Agriculture Committee on February 16, 2017. Per Agriculture Committee Chair Michael Conaway’s opening statement at the Business Meeting markup of H.R. 1029, changes to PRIA include “reasonable increases in registration fees, funding for Good Laboratory Practices, and a seven year reauthorization as opposed to the five-year reauthorizations of the past.” H.R. 1029 would allow the U.S. Environmental Protection Agency (EPA) to collect up to 31 million in registration fees (up from 27.8 million) per year from fiscal years (FY) 2017-2023. It also includes the following registration increases for FY2017 through FY2023:
- The maximum annual fee for registrants holding 50 pesticide registrations or less would be $129,400 (up from $115,500);
- The maximum annual fee for registrants holding over 50 pesticide registrations would be $207,000 (up from $184,800);
- The maximum annual fee payable for a small business registrant holding 50 pesticide registrations or less would be $79,100 (up from $70,600); and
- The maximum annual fee payable for a small business registrant holding over 50 pesticide registrations would be $136,800 (up from $122,100).
PRIA represents a commitment by the pesticide registrants to help with the continued resource issues of the pesticide regulatory program. This has become an issue of increased concern with the arrival of the Trump Administration after campaign rhetoric about eliminating EPA and cutting budgets. Fees are seldom a popular topic, but an essential program component. Without staff and resources to approve pesticide registrations, registrants would be left with new products destined to pile in EPA in-boxes. PRIA is designed to help maintain some certainty and predictability to the review process.
Of some note is that in recent years Congress has appropriated funds at a level below the statutory minimum that originally was a line in the sand which, if breeched, would de-authorize EPA’s authority to charge application fees. The regulated community has reluctantly supported Congressional action to lower this “minimum” level of funding to hold onto the programmatic progress which has been made since the first PRIA authorization. This appears to be an uneasy acceptance of the budget realities surrounding federal spending on discretionary, non-defense expenditures.
By Lynn L. Bergeson, Oscar Hernandez, Ph.D., Lara A. Hall, MS, RQAP-GLP, and Margaret R. Graham
On December 29, 2016, the U.S. Environmental Protection Agency (EPA) issued a notice regarding the availability of final test guidelines, OCSPP Series 850 Group A -- Ecological Effects, part of a series of test guidelines established by the Office of Chemical Safety and Pollution Prevention (OCSPP) for use in testing pesticides and chemical substances to develop data for submission to EPA under the Federal Food, Drug and Cosmetic Act (FFDCA), the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), and the Toxic Substances Control Act (TSCA). The notice states that these test guidelines “serve as a compendium of accepted scientific methodologies and protocols that are intended to provide data to inform regulatory decisions,” and they “provide guidance for conducting the test, and are also used by EPA, the public, and companies that submit data to EPA.” The test guidelines will be accessible through EPA Docket ID Numbers EPA-HQ-OPPT-2009-0150 through EPAHQ-OPPT-2009-0159, and EPA-HQ-OPPT-2009-0576 on www.regulations.gov.
The changes to test guidelines are varied. Some of the changes include:
- Simple cosmetic changes, e.g., presentation of test conditions, test validity criteria, and equations for calculating response measurements;
- Housekeeping changes, e.g., the addition of final versions of draft guidelines that had not been prepared in final yet;
- The addition of a limit test option to several acute invertebrate toxicity tests;
- Changes from “cut off” dosages in existing guidelines to limit concentrations and a change in the limit concentration for industrial chemicals from “1,000 milligrams/liter (mg/L)” to “100 mg/L” for acute toxicity tests and “10 mg/L” for chronic tests; and
- Changes to terminology, e.g., to clarify 10-day versus acute exposures for sediment-dwelling invertebrate toxicity tests and saltwater versus marine conditions.
The addition of a limit test option aligns well with the new TSCA mandate to reduce vertebrate testing as a matter of federal policy. EPA notes that certain guidelines were not issued in final, but remain available for reference as draft guidelines. In that certain ecological effects guidelines relate to guidelines already developed for the Endocrine Disruptor Screening Program (EDSP), EPA notes that it will consider test design elements from the relevant EDSP guidelines in the development of OSCPP 850 series guidelines.
By Lisa M. Campbell, Lisa R. Burchi, and Margaret R. Graham
The U.S. Environmental Protection Agency (EPA) has recently announced the availability of two proposed test methods and associated testing guidance for evaluating antimicrobial pesticides against two biofilm bacteria, Pseudomonas aeruginosa and Staphylococcus aureus, for comments. EPA states that registrants of antimicrobial products with public health claims are “required to submit efficacy data to EPA in support of the product’s registration” under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). EPA is soliciting comments on the clarity of the standard operating procedures and the regulatory guidance. The two test methods are:
The Draft Guidance to Assess the Efficacy of Antimicrobial Pesticide Products Intended to Control Public Health Biofilms on Hard, Non-Porous Surfaces describes biofilms and their public health significance; the two test procedures for developing efficacy data supporting biofilm claims; products that may be eligible for biofilm claims; test criteria; data submission procedures for efficacy data; and labeling guidance.
The draft guidance states that the term biofilm “is reserved for claims against biofilm that contain specific bacteria that are directly or indirectly infectious or pathogenic to humans,” and “biofilm claims are considered to be public health claims for which the agency must review and approve appropriate efficacy data.” EPA states: “Examples of use sites that may be supported by the biofilm test methodologies herein, and found acceptable, include restrooms, shower stalls, sink basins or drains (excluding the drain pipe) and nearby hard, non-porous surfaces of walls, countertops, and instrument trays in patient care areas of hospitals. In contrast, claims against non-public health slimicides must also be supported by appropriate efficacy data, however, submission of the data is only required when requested by the EPA.”
The Draft Guidance also sets forth examples of acceptable label claims against public health biofilms and acceptable non-public health claims. The examples of acceptable label claims against public health biofilms are:
- Kills 99.9999% of bacteria* in biofilm on a hard, non-porous surface;
- Kills a minimum of 99.9999% of bacteria* in biofilm;
- Reduces at least 99.9999% of bacteria* growing in biofilm;
- Formulated to kill 99.9999% of bacteria* in biofilm;
- Other related claims:
- Kills biofilm bacteria*; and
- Penetrates biofilm, killing the bacteria* living there.
*[List of bacteria “tested as a biofilm”; at a minimum, Pseudomonas aeruginosa and Staphylococcus aureus].
Examples of acceptable non-public health claims supported by appropriate efficacy data include:
- Cleans away microorganism slime/grunge;
- Maintains control of slime; and
- Controls slime-forming microorganisms.
Comments will be accepted until December 5, 2016.
By Lisa M. Campbell and Lisa R. Burchi
The following documents have been filed in the Anderson v. McCarthy proceedings in the U.S. District Court for the Northern District of California: (1) U.S. Environmental Protection Agency’s (EPA) Notice of Motion and Motion for Summary Judgment; (2) Defendant-Intervenors CropLife America, et al.’s Notice of Motion and Motion for Summary Judgment; and (3) Plaintiffs’ Memorandum of Points and Authorities in Support of Motion for Summary Judgment.
EPA’s documents are of particular interest to those who have been following this case and are concerned about the assertions in the case regarding the treated article exemption. In its motion, EPA argues that the Ninth Circuit lacks jurisdiction to hear Plaintiffs’ claims, as the “EPA guidance document they challenge is not a judicially reviewable agency action -- much less a final action -- regarding the regulatory status of treated seed,” and Plaintiffs “have not identified any discrete, mandatory duty or action that EPA has failed to perform under [the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)].”
EPA’s main arguments in support of its motion include:
- Plaintiffs have not identified any final agency actions. The Inspection Guidance is not an agency action, and even if the Inspection Guidance were an agency action, it is not final.
- Count II (Plaintiffs’ allegation of EPA’s failure to regulate and enforce FIFRA with respect to pesticide-treated seeds) must be dismissed because there is no nondiscretionary duty identified by Plaintiffs that is unreasonably delayed or unlawfully withheld.
- Enforcement of FIFRA is a discretionary action not subject to review.
In its motion, Defendant-Intervenors argue: “Each of Plaintiffs’ claims constitutes an impermissible programmatic attack on EPA’s existing pesticide regulatory program --specifically, the interplay between EPA’s regulation of pesticides registered to be applied as seed treatments and what Plaintiffs characterize as its categorical application of the treated article exemption to the treated seed. As a result, each of these claims is non-justiciable as a matter of law, entitling Defendants to summary judgment in their favor.” Defendant-Intervenors note that pesticides used for seed treatments are subject to “rigorous, scientifically robust review and approval under FIFRA,” making Plaintiffs’ attempt to impose a regulatory process “entirely duplicative of EPA’s existing exercise of its authority under FIFRA, while having no impact on human health or environmental safety.”
Plaintiffs’ memorandum sets forth its arguments for why the court should “find in favor of Plaintiffs on their four claims for relief: that EPA failed to enforce FIFRA against an entire class of pesticides; that EPA improperly amended the treated article exemption without following proper [Administrative Procedure Act (APA)] rulemaking procedures; that EPA’s exemption of neonicotinoid-coated seeds was ultra vires and/or arbitrary and capricious under the APA; and that EPA’s labeling requirements for unregistered pesticide-coated seed bags was arbitrary and capricious under the APA and FIFRA.” Specifically, Plaintiffs address why they believe EPA has failed to enforce FIFRA against neonicotinoid-coated seeds, why this asserted failure amounts to what they believe is “an unlawful abdication of [EPA’s] statutory responsibilities” and why they believe “EPA’s failure to enforce FIFRA against neonicotinoid-coated seeds and pesticidal dust-off is a ‘consciously and expressly adopted general policy,’ which ‘amounts to an abdication of its statutory responsibilities’ that this Court has the power to remedy.”
A hearing on EPA’s motion was set for October 27, 2016, but due to scheduling conflicts has been rescheduled for November 3, 2016. It will be important to monitor the court’s consideration of these important issues closely. More information on these proceedings can be found in our pesticide blog items District Court Declines to Rule on Jurisdictional Issues in Neonicotinoid Case until Summary Judgment and EPA Requests Dismissal of Complaint For Lack of Subject Matter Jurisdiction.
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 James V. Aidala
The threat of the Zika Virus grows every day, and the need for clear information is especially pressing if you are pregnant. How do you prevent getting infected with the Zika Virus, and what insect repellents are best? The first question is easy to answer: public health experts agree that women who are pregnant or who might be pregnant should use insect repellents. The answer to the second question is not so simple.
I am a former senior official at the U.S. Environmental Protection Agency (EPA), and familiar with how the U.S. evaluates and approves pesticides, which include insect repellents. It is not easy for the average consumer to know what works and what does not work. Unfortunately, EPA policies have made this question much more complicated, having made important distinctions between some “natural”-type repellents and other products available in the marketplace.
Years ago, EPA de-regulated a number of natural, non-toxic materials from being subject to the registration requirements of the federal pesticide law (the Federal Insecticide, Fungicide, and Rodenticide Act). This made sense at the time since garlic, pepper, rotten eggs, vinegar, and other common chemicals are sometimes used as pesticides. Before de-regulation, these products were also subject to the same requirements as synthetic chemical pesticides with long unpronounceable names (e.g., diethyltoluamide, better known as DEET) which EPA requires to have volumes of efficacy and safety test data. Being natural does not mean a substance is non-toxic; some natural ingredients are fully evaluated and widely used. But in the interest of efficient use of resources EPA issued a list of products that could be sold as pesticides, but would not be subject to EPA data requirements and review (EPA calls them “minimum risk pesticides”).
This list of pesticides which are not subject to EPA evaluation, and which are not required to have data which proves they are effective, includes a number of botanical ingredients, such as oil of citronella, geranium, rosemary, peppermint, and many others. Many of these products can be used as pesticides -- some may work better than others -- and many work for the intended use (example: rotten eggs, or as EPA refers to them -- “putrescent whole egg solids” -- are used as a deer repellent).
Many of these ingredients have been marketed as “natural” insect repellents, and labeled as “safe” or “non-toxic” using words that will not appear on products where EPA reviews and approves the instructions on the product label.
Here is the bureaucratic distinction which matters greatly to EPA, but will not be understood by consumers:
- If the repellant label includes “public health claims” -- that it repels mosquitoes that may cause a disease (like Zika Virus or West Nile Virus) -- then the product has to have data showing that it works;
- If the product just says “repels mosquitoes,” it is not required to have data that shows it is effective, and may very well be ineffective.
Few, if any, humans outside of EPA label experts realize this important distinction: if there is no health claim on the label, then it is, in effect, a situation of “buyer beware.”
What remains: EPA’s deregulation of these products means it is legal to sell products which do not work, as long as the ingredients appear on the EPA minimum risk pesticides list.
Consumer Reports (CR) recently reported in May of this year on studies conducted on repellents. Their results:
- Using a “natural” mosquito repellent, with active ingredients such as citronella or clove, lemongrass, or rosemary oils, might seem like a good idea, especially if you’re pregnant or planning to be.
- But five of the six plant-based repellents we tested…lasted one hour or less against Aedes mosquitoes, the kind that can spread Zika.
Not all repellents with the same ingredient are equally effective, and they found that some formulations of the chemical repellents also do not work for very long in their tests. Some botanical pesticides are effective and have the public health claims on the label (example: lemon eucalyptus, a botanical ingredient not on the exempt product list, and CR testing did find it to be effective).
To reduce confusion about what works, EPA for years has struggled to correct the situation by trying to impose changes to the requirements for insect repellents.
Unfortunately, to end the confusion about the difference between “repels mosquitoes” and “repels mosquitoes that can cause the Zika Virus,” EPA has to conduct a rulemaking which requires a long and bureaucratic process to complete. The good news is that EPA is working on such a solution. The bad news is that they have been working on it for almost ten years and they still have more work to do. There are details and petitions and proposals and reasons why it has taken so long, but it is the kind of story that gives bureaucracy a bad name.
With the onset and fears about the Zika Virus, however, EPA should make the needed changes immediately to ensure that consumers are not misled into using products which are not proven effective in repelling mosquitoes.
From a consumer’s point of view, it really is that simple. Legally, it is more complicated. In the meantime, EPA should be loud and clear in its communication about the distinction, even if they cannot take immediate action to reduce the confusion.
By Lisa M. Campbell, Timothy D. Backstrom, and Lisa R. Burchi
On August 12, 2016, a three-judge panel of the Ninth Circuit Court of Appeals issued an order denying the U.S. Environmental Protection Agency’s (EPA) request for an additional six months to decide whether to ban agricultural uses of chlorpyrifos. The court opted instead to afford EPA a three month extension, stating that “this is the final extension, and the court will not grant any further extensions."
EPA sought the six month extension on June 29, 2016, to allow time for EPA to complete two scientific analyses that may bear on EPA’s conclusions in the final rule, and to request further public comment before taking final action on a prior proposal to revoke all chlorpyrifos tolerances. The two analyses that EPA wanted to complete are: (1) a refined drinking water assessment that may allow EPA “to develop more tailored risk mitigation for some regions of the country,” and (2) an evaluation of the epidemiological data for chlorpyrifos to determine whether EPA should retain the point of departure based on acetylcholinesterase (AChE) inhibition in the proposed rule.
The court concluded that EPA’s request for a six month extension “is not justified in light of EPA’s history in this matter as well as the court’s previous extensions.” The court stated that EPA’s request was "another variation on a theme 'of partial reports, missed deadlines, and vague promises of future action' that has been repeated for the past nine years,” and that “nothing has changed that would justify EPA’s continued failure to respond to the pressing health concerns presented by chlorpyrifos."
The court ordered EPA to take final action on its proposal to revoke tolerances for chlorpyrifos by March 31, 2017. A further status report by EPA will be due in November 2016.
EPA’s updated analysis of the epidemiological data for chlorpyrifos will be a matter of considerable interest. After EPA issued a proposed rule utilizing a point of departure for chlorpyrifos based on AChE inhibition, EPA issued a blanket determination based on the epidemiological data for chlorpyrifos in which EPA decided to retain the Food Quality Protection Act (FQPA) safety factor for all organophosphate (OP) pesticides. This FQPA determination could cause EPA to conclude that the tolerances for chlorpyrifos must be revoked regardless of the outcome of the refined drinking water assessment.
EPA later proposed to use an alternative point of departure for chlorpyrifos based on biomonitoring data from one of the chlorpyrifos epidemiology studies, but the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Scientific Advisory Panel (SAP) met on April 19-21, 2016, and recommended against this new approach. In its request for an extension, EPA stated that the FIFRA SAP might recommend a “hybrid approach” to adjusting the point of departure for AChE inhibition. The FIFRA SAP meeting minutes do not appear to include such a hybrid recommendation.
In a related development, EPA has reached an agreement with the Columbia Center for Children’s Environmental Health (CCCEH) regarding the release of raw data from one of the chlorpyrifos epidemiology studies. During the FIFRA SAP meeting, concerns were raised regarding use of the CCCEH study without access to the underlying raw data. In an April 19, 2016, letter to Dr. Linda P. Fried, Dean of the Mailman School of Public Health at Columbia University, EPA requested that CCCEH provide access to the underlying data. In her response dated May 18, 2016, Dr. Fried offered to work with EPA “to determine if we can develop one or more data sets that can be properly de-identified, consistent with our obligation to protect the privacy of our research subjects, and that will also enable EPA to conduct its own analyses in order to address its transparency goals” or, in the alternative, offered to allow EPA staff to review the original data “in a secure data enclave onsite at Columbia.” In its June 27, 2016, response, EPA stated that the offer to allow EPA staff to review the underlying data at a secure site did not resolve issues concerning the transparency of EPA’s analysis. This correspondence is available in EPA Docket ID EPA-HQ-OPP-2008-0850. While EPA maintained it is “unnecessary” for CCCEH and EPA to develop redacted data sets, EPA accepted CCCEH’s offer to develop such data sets.
EPA’s request for a six month extension was filed on June 29, 2016, two days after it accepted the offer by CCCEH to develop redacted data sets for the CCCEH epidemiology study. Moreover, the FIFRA SAP meeting minutes issued on July 20, 2016, do not appear to provide the guidance that EPA had expected concerning a potential “hybrid” approach to adjusting EPA’s proposed point of departure for AChE inhibition.
Given the lesser extension granted by the court, it is questionable whether EPA will have sufficient time to review adequately the redacted underlying data sets offered by CCCEH, or even to determine whether those redacted data sets are adequate for this review, and to make any determination based on such data before EPA issues a supplementary proposal based on the refined drinking water assessment and the updated epidemiology assessment. The court has stated that it will entertain no further extension requests, so EPA must complete its work expeditiously to allow time for comment before final action is due on March 31, 2017.
By Lisa M. Campbell and Lisa R. Burchi
The comment deadline of August 15, 2016, is approaching on the June 14, 2016, notice of availability of the draft Pesticide Registration Notice (PRN) 2016-X issued by the U.S. Environmental Protection Agency (EPA), in consultation with the U.S. Department of Agriculture (USDA). Draft PRN 2016-X proposes to update Section 5 of PRN 97-2, and to clarify and update criteria by which EPA classifies crops as “minor use.”
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 2(ll) defines “minor use.” One of those definitions at Section 2(ll)(2) defines a minor use, in part, as one that does not provide “sufficient economic incentive.” Current guidance in PRN 97-2 defines a use as minor under FIFRA Section 2(ll)(2) if gross revenues at full market potential do not cover the costs of registration. EPA’s concern with this policy is, in part, that:
- [T]he method in PRN 97-2 does not accurately measure economic incentive to register pesticides. Gross revenue will overstate the registrant’s true return on the cost of registration while reliance on a single year of sales will understate the total stream of revenues. The direction of bias is unknown. Most importantly, it does not account for the difference in timing between costs of registration and future returns.
EPA states that the draft PRN is intended to clarify and update “its interpretation of how economic minor use status under FIFRA section 2(ll)(2) can be determined.” Under the proposed PRN, EPA would interpret a minor use as one that “does not provide sufficient economic incentive to support the … registration” when “the registrant would not obtain sufficient revenues from sales of the pesticide to justify the cost of registration.” Specifically, EPA states:
- This PRN describes the revised approach to interpreting economic minor use based on the concept of the registration of a pesticide as an investment. The registrant incurs costs associated with applying for a registration while the registration once granted allows the pesticide product to be sold, generating a stream of revenue in the future. This approach provides several measures by which EPA can assess whether there are sufficient incentives for the registration of a pesticide use. These measures include the net present value of returns, the benefit-cost ratio, and the internal rate of return, each of which provides insight into the magnitude of the incentive to register or maintain the registration of a pesticide.
With regard to calculating the net present value (NPV) of the investment (in registration), EPA provides the following formula:
In the draft PRN, EPA provides guidance on the four primary components to conduct a quantitative analysis to estimate NPV, the benefit-cost ration (B/C), and the internal rate of return (IRR). These components are: (1) costs of registration (e.g., cost to generate data necessary to show the product can be used safely for the proposed use, PRIA fees, cost to prepare and submit an application); (2) net revenues from sales of the pesticides; (3) the discount rate; and (4) the time of investment. EPA states that, in general, “if a use of a pesticide has a negative NPV, a B/C ratio < 1, and IRR that is lower than average for a particular sector, it will be considered to have insufficient economic incentives to pursue registration.” EPA is not setting a firm threshold, however, and will review minor use determinations on a case-by-case basis.
For a use that the applicant requests a designation of economic minor use under FIFRA Section 2(ll)(2), the applicant should include the following types of information in writing with the application:
- The type of registration action for the specific site/use;
- A list of the registration data requirements for the specific site/use;
- Information to inform future sales, which might include the target pest(s), the application rate, the extent of the pest problem;
- Information to inform the sales price of the pesticide, which might include the price of relevant competitors; and
- A narrative addressing at least one of the criteria described in FIFRA section, 2(ll)(2)(A-D). This summary should contain, at least, a brief description of how the pesticide will be used including the target pest(s) and alternatives.
Applicants may also wish to include the following to improve EPA’s understanding of the incentives they face in producing and/or registering a pesticide for the specific use:
- A narrative describing any relevant factors that influence the cost of manufacturing and, therefore, the net revenue from product sales;
- A narrative describing any relevant factors that influence the fixed costs of registering and marketing the pesticide;
- A narrative describing any aspects of the market that might limit or enhance sales; and
- A narrative describing any other factors which affect the economic incentive to register this use.
EPA states its intent in revising the method and criteria for determining when a potential minor use does not present a sufficient economic incentive is because the current “outdated approach could prevent applicants from obtaining the incentives for registration that should be available to them.” EPA further states that it is interested in developing an approach that is “simple and transparent” because a burdensome process would be “an added deterrent to registration.” The draft PRN would indeed seem to expand the ability of registrants to seek minor use status; since EPA will be making determinations under this revised approach on a case by case basis, how broadly EPA will apply these criteria and what minor use approvals it makes will only be seen over time, however.
It is important to note that EPA’s proposed policy has potential implications beyond minor use determinations. For example, EPA’s discussion of the elements of the costs of registration as well as how those costs for applying for a registration are a part of the registrant’s investment could have implications in FIFRA data compensation contexts:
- The cost of applying for registration can be viewed as an investment toward the eventual marketing of a registered product. Applying for registration is the final step in the process of developing and marketing a pesticide. The costs of applying for registration include the costs of generating data that EPA requires for registration, the registration fees, and the cost of paperwork burden from the registration process. In terms of “economic incentive,” the main question to answer is whether the investment in registration of a particular use is worthwhile to the registrant, that is, whether future returns from sales are sufficiently high to justify the cost of obtaining/maintaining a registration.
The proposal also is significant because it can be applied to conventional pesticides, biopesticides, and antimicrobial pesticides to determine whether they meet the definition of minor use.
Comments are due August 15, 2016.