By Lisa M. Campbell, Timothy D. Backstrom, and James V. Aidala
On February 6, 2020, Corteva Agriscience (Corteva), announced it will discontinue all production of the organophosphate (OP) insecticide chlorpyrifos by the end of the year. Corteva and its corporate predecessor, Dow AgroSciences, have been the principal global manufacturers of chlorpyrifos. Corteva announced that its decision to stop selling chlorpyrifos was based entirely on financial considerations. This announcement came on the same day that Corteva had previously agreed it would end further sales of chlorpyrifos in California, and less than a week after the date the European Union (EU) ended all sales of chlorpyrifos in member states. These actions followed a number of prior actions taken by other national and state governments to ban or severely restrict chlorpyrifos. Corteva emphasized in its public statements that the science demonstrates that chlorpyrifos can be safely used, but that the company made a business decision based on the declining markets for the product. In an interview reported by the Washington Post, Susanne Wasson, Corteva's President for Crop Protection said, “It’s a tough decision for us to make, but we don’t feel like it’s viable going forward.” In other statements, Corteva noted that in the last ten years their share of the global chlorpyrifos market had declined from 75% to less than 20%.
Chlorpyrifos has been registered for use in the U.S. for over 50 years, but has become increasingly controversial in the dozen years since the Pesticide Action Network of North America and the Natural Resources Defense Council filed a petition in 2007 to cancel all registrations and revoke all tolerances for chlorpyrifos. Following a protracted court battle and a decision by the Ninth Circuit Court of Appeals to force the U.S. Environmental Protection Agency (EPA) to take final administrative action concerning the 2007 petition, EPA proposed near the end of the Obama Administration to revoke all existing tolerances for chlorpyrifos. A significant basis for this proposal was a controversial decision by a panel of EPA scientists that the default tenfold safety factor established by the Food Quality Protection Act (FQPA) for infants and children, which EPA had previously waived based on studies establishing a threshold for acetylcholinesterase (AChE) inhibition, should be reinstated.
The new EPA safety factor determination was based in large measure on epidemiology studies that reported an association between exposure to chlorpyrifos at levels below the presumed threshold for AChE inhibition and adverse neurodevelopmental effects in children. Many industry scientists disputed the scientific basis for this EPA determination because confounding exposures and methodological biases in the epidemiology studies may have influenced the reported association with neurodevelopmental effects and because the EPA determination made unprecedented use of epidemiology data. Beyond the effect on chlorpyrifos, the EPA decision will likely continue to be controversial because EPA included a similar safety factor determination for all OP pesticides, even though the mechanism responsible for the reported neurodevelopmental effects attributed to chlorpyrifos has not been identified and the other OP products were not studied in the epidemiology studies.
In the first year of the Trump Administration, EPA Administrator Scott Pruitt decided not to adopt EPA’s previously proposed tolerance revocation and instead to deny formally the 2007 petition, citing unresolved scientific issues. This reversal of course, however, was not accompanied by any new scientific assessment or by any explicit revision of the prior FQPA safety factor determination. Later, the California Department of Pesticide Regulation (DPR) decided to designate chlorpyrifos as a Toxic Air Contaminant, a decision that was noteworthy because it was based primarily on new toxicology studies that DPR stated reported neurodevelopmental effects well below the threshold for AChE inhibition. DPR deemphasized the epidemiology data relied on in the EPA safety factor determination in its decision. Although EPA later stated that it would address these new toxicology studies as part of an accelerated registration review process, there were intervening decisions by the EU and by California to ban new sales, which may have contributed to Corteva’s February 6, 2020, decision to cease chlorpyrifos production.
The decision by Corteva to cease manufacturing chlorpyrifos reminds us that the decision to continue marketing any chemical substance cannot be based solely on the scientific data, but must also consider the regulatory climate and the economic viability of the product. For those of us with a long memory, the decision by Corteva is reminiscent of the decision nearly 40 years ago by the Dow Chemical Company to pull the plug on 2,4,5-T and silvex, after Dow had expended millions of dollars and many years of effort to contest an emergency suspension and subsequent cancellation of these herbicides. Dow made this decision even though it believed that the available data demonstrated the safety of those products.
By Timothy D. Backstrom and Kelly N. Garson
On December 6, 2019, the European Union (EU) announced that it will no longer permit sales of chlorpyrifos after January 31, 2020. The Standing Committee on Plants, Animals, Food and Feed (PAFF Committee) voted in favor of two draft Implementing Regulations that denied the renewal of approvals for chlorpyrifos and chlorpyrifos-methyl. The European Commission is expected to formally adopt the regulations in January 2020. At that time, Member States will need to withdraw authorizations for products containing chlorpyrifos and chlorpyrifos-methyl as active substances and may implement a grace period, at a maximum of three months, for final storage, disposal, and use of the substances.
The ban in the EU follows increased concerns over the human health effects of the substances. On August 2, 2019, the European Food Safety Authority (EFSA) published a report concluding that no safe exposure level could be determined for chlorpyrifos and that based upon available data, the approval criteria under Article 4 of Regulation (EC) No 1107/2009 for human health were not met. EFSA also published an updated statement reiterating the same conclusion for chlorpyrifos-methyl on November 26, 2019. EFSA’s primary health concerns were potential developmental neurotoxicity based on the available animal data and epidemiological evidence, and unresolved concerns regarding potential genotoxicity. EFSA also concluded that toxicological reference values could not be established for either of these effects, thereby precluding a valid risk assessment for consumers, workers, or bystanders.
Prior to the PAFF Committee meeting, eight EU states had already banned or never approved the use of chlorpyrifos. Canada proposed a ban of chlorpyrifos on May 31, 2019. (More information on this proposal is available in our blog post).
Within the United States, state governments have taken steps to regulate chlorpyrifos. On June 13, 2018, Hawaii passed an act that banned the use of pesticides containing chlorpyrifos as an active ingredient beginning January 1, 2019.
Several recent actions in California culminated in a ban on chlorpyrifos. First, the California Department of Pesticide Regulation (DPR) decided that chlorpyrifos should be designated as a Toxic Air Contaminant. This action was based primarily on a point of departure derived from new animal studies that report neurodevelopmental effects well below the level that inhibits cholinesterase. On August 14, 2019, DPR issued cancellation notices for chlorpyrifos products based primarily on the same new animal data. DPR subsequently announced on October 9, 2019, an agreement with pesticide manufacturers to end the sale of chlorpyrifos by February 6, 2020. Growers will not be able to possess or use chlorpyrifos products in the state after December 31, 2020.
In New York State (NYS), recent efforts to ban the substance through legislation were unsuccessful. On December 10, 2019, NYS Governor Andrew Cuomo vetoed a bill passed by the NYS Legislature (A.2477/S.5343) to phase out chlorpyrifos from use by December 1, 2021. Governor Cuomo stated that the NYS Department of Environmental Conservation is responsible for taking regulatory action on the issue, but recommended that the agency implement its own phased-in ban of chlorpyrifos.
On the federal level, chlorpyrifos products remain registered and have been since 1965. The U.S. Environmental Protection Agency (EPA) has taken measures to restrict the use of chlorpyrifos within households and on particular crops, but some non-governmental organizations (NGO) have long advocated that chlorpyrifos should be banned in its entirety. On September 12, 2007, the Pesticide Action Network North America (PANNA) and the Natural Resources Defense Council (NRDC) filed a petition requesting that EPA revoke all tolerances and cancel all registrations for chlorpyrifos. EPA’s failure to respond fully to this petition was the subject of several decisions in the 9th Circuit Court of Appeals, and the Court ultimately issued a writ of mandamus requiring that EPA take final action concerning the petition.
At one point, EPA proposed to revoke all tolerances for chlorpyrifos. This action was based in part on a controversial determination that EPA should reinstate the default safety factor for tolerance assessments under the Food Quality Protection Act (FQPA) for all organophosphate (OP) pesticides. This determination was based on developmental neurotoxicity associated with chlorpyrifos exposure in certain epidemiology studies. After further deliberation and a change of administrations, EPA issued an order denying the 2007 petition in its entirety on March 29, 2017, based in part on a conclusion stating that further evaluation was needed to properly assess potential neurodevelopmental effects of chlorpyrifos. EPA later issued a final order that denied all objections to the March 2017 petition denial order. A number of NGOs (including the original petitioners) and several states have challenged this decision, filing petitions on August 8 and August 9, 2019, respectively for judicial review of EPA’s final order retaining tolerances and registrations for chlorpyrifos. EPA has stated that it intends to complete its evaluation of the epidemiology studies for chlorpyrifos, as well as the new animal data relied on by California, in the context of the pending registration review of chlorpyrifos under Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 3(g). A final registration review decision concerning chlorpyrifos is due by October 1, 2022, although EPA has stated that it intends to accelerate that process. More information on the petitions and chlorpyrifos is available on our blog.
At this juncture, the long-term impact of the gradual accumulation of adverse decisions on chlorpyrifos from EFSA and various other governmental agencies is uncertain. Most user groups in the United States continue to describe chlorpyrifos as an essential agricultural tool. Some commodities treated with chlorpyrifos are destined for export markets where chlorpyrifos has been banned, however, and the impacts of this change will need to be monitored closely.
EPA’s interpretation of the epidemiology studies for chlorpyrifos remains controversial in the scientific community. Indeed, although the EFSA conclusion is predicated in part on these epidemiology studies that are the basis of the controversial EPA interpretation, the wording of the EFSA report indicates that there were some dissenters. Moreover, the extension of EPA’s FQPA determination for chlorpyrifos to other organophosphate (OP) pesticides has never been satisfactorily explained.
The NGOs and states that have challenged EPA’s final order refusing to revoke the tolerances and cancel the registrations for chlorpyrifos will argue that the final order cannot be reconciled with EPA’s prior scientific determinations. Even if EPA can successfully rebut those arguments, there is also a possibility that EPA’s own review of the new animal chlorpyrifos studies may obviate that controversy. On balance, the remaining manufacturers and registrations for chlorpyrifos are likely to confront a variety of challenges in the coming months.
By Lisa M. Campbell and Timothy D. Backstrom
On August 14, 2019, the California Department of Pesticide Regulation (DPR) issued cancellation notices to thirteen California registrants of pesticide products containing chlorpyrifos, including Dow Agrosciences LLC (now Corteva). Each of these notices is referred to as an "Accusation," and each affected registrant has 15 days to request a hearing concerning the proposed cancellation. DPR's issuance of these notices followed a final decision by the U.S. Environmental Protection Agency (EPA) to deny an administrative petition to revoke the tolerances and cancel the U.S. registrations for chlorpyrifos. DPR states: "Despite the Trump administration's reversal of a decision to ban the pesticide at the federal level, California continues to move forward to protect public health, workers, and the environment." Although it is unusual for a State to act unilaterally to cancel a State registration for a pesticide that is still registered under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), FIFRA Section 24(a) provides that States may separately regulate Federally registered pesticides so long as they do not purport to authorize any sale or use that is otherwise prohibited under FIFRA.
The risk assessment that supports DPR's proposal to cancel chlorpyrifos products is based on five animal studies published in 2016, 2017, and 2018, that report neurotoxicity from chlorpyrifos at exposure levels that are considerably lower than the levels that cause acetylcholinesterase inhibition. Based on its evaluation these studies, DPR has concluded that developmental neurotoxicity is the critical endpoint for chlorpyrifos and has derived a point of departure for chlorpyrifos risk assessment. Based on this assessment, DPR previously concluded that chlorpyrifos should be designated as a Toxic Air Contaminant (TAC). DPR presented its TAC findings to California's Scientific Review Panel at a meeting on July 30, 2018, and the Panel subsequently concluded that the DPR assessment of the developmental neurotoxicity of chlorpyrifos was "based on sound scientific knowledge, and represents a balanced assessment of our current scientific understanding."
On the same day DPR issued its cancellation notices for chlorpyrifos, DPR also announced it has established an Alternatives to Chlorpyrifos Work Group with experts from "agriculture, California universities, environmental justice groups, farmworker health and safety organizations, and pesticide manufacturers…" DPR has asked this Work Group to develop short-term practical alternatives to chlorpyrifos, along with a five-year action plan. The Work Group is supposed to conclude its work by the spring of 2020. The budget for 2019-2020 approved by the California Legislature also includes $5 million in grant funding to develop sustainable alternatives to chlorpyrifos.
The DPR decision to cancel chlorpyrifos relies primarily on new animal studies that report that chlorpyrifos causes neurodevelopmental effects at levels that are well below those that inhibit cholinesterase. DPR refers in passing to the epidemiology studies for chlorpyrifos that EPA used to make its Food Quality Protection Act (FQPA) determination for all organophosphate (OP) pesticides, but these data were not used by DPR to derive its point of departure for chlorpyrifos risk assessment.
EPA scientists have not yet prepared a formal evaluation of the new animal studies for chlorpyrifos, but EPA's decision to deny the petition to revoke tolerances and cancel registrations for chlorpyrifos states that EPA intends to evaluate the new animal studies as part of its registration review deliberations for chlorpyrifos. The FIFRA registrations for chlorpyrifos may also be affected by pending judicial actions challenging EPA's decision to deny the petition to revoke the tolerances and cancel the registrations for chlorpyrifos. In this complicated environment, it will be important to monitor the registrants’ and industry’s response to DPR's cancellation actions, as well as their efforts on the pending Federal court litigation and EPA's registration review process for chlorpyrifos.
By Lisa M. Campbell and Lisa R. Burchi
On May 31, 2019, Health Canada’s Pest Management Regulatory Agency (PMRA) issued its Proposed Re-evaluation Decision PRVD2019-05, Chlorpyrifos and Its Associated End-use Products: Updated Environmental Risk Assessment (Updated Environmental Risk Assessment). PMRA states that this re-evaluation “considers data and information from pesticide manufacturers, published scientific reports, and other regulatory agencies” and that “Health Canada applies internationally accepted risk assessment methods as well as current risk management approaches and policies.”
PMRA is proposing the cancellation of most uses of chlorpyrifos, including almost all agricultural uses, due to PMRA’s belief that they pose unacceptable risks to the environment. The proposal would allow a small number of uses to continue if certain label changes are made. More specifically, PMRA states that its evaluation of available scientific information “has not found acceptable risks to beneficial arthropods, birds, mammals and all aquatic biota in the environment for most current chlorpyrifos uses” but “[g]reenhouse ornamental, outdoor ornamentals (container stock only) for control of Japanese beetle larvae, indoor and outdoor structural, adult and larval mosquito uses of chlorpyrifos have been shown to be acceptable from the environmental perspective.” The label changes that PMRA states would be required for these uses to continue include the following: (1) standard environmental hazard statements to inform users of the potential toxic effects to non-target species; and (2) standard environmental advisory statements for prevention of contamination of aquatic systems and to reduce volatilization.
There is a 90-day public consultation period on the proposal, which began on May 31, 2019, during which the public may submit written comments and additional information to PMRA. PMRA states that the public may submit additional information that could be used to refine risk assessments and that the final re-evaluation decision will take into consideration the comments and information received during the comment period, which could result in revised risk mitigation measures. The re-evaluation decision document will include the final re-evaluation decision, the reasons for it, and a summary of comments received on the proposed re-evaluation decision with Health Canada’s responses.
More information on chlorpyrifos issues, including California’s recent announcement that it would be initiating cancellation proceedings of chlorpyrifos, can be found on our blog.
By Lisa M. Campbell and Lisa R. Burchi
On May 8, 2019, the California Environmental Protection Agency (CalEPA) announced that the California Department of Pesticide Regulation (DPR) will be initiating cancellation proceedings of chlorpyrifos. In its press release, CalEPA states that the decision to commence cancellation proceedings “follows mounting evidence, including recent findings by the state’s independent Scientific Review Panel on Toxic Air Contaminants, that the pesticide causes serious health effects in children and other sensitive populations at lower levels of exposure than previously understood.”
DPR’s decision, following years of review in California of chlorpyrifos, is sure to garner significant controversy, comments, and, potentially, litigation.
Chlorpyrifos first entered the comprehensive risk assessment process after being designated by DPR with a “high” priority status in 2011, and some of the DPR documents supporting the current action were issued in 2011.
In December 2015, DPR released a draft risk assessment for public comment. Since the risk assessment identified potential human exposure to spray drift (via inhalation or deposition) as a concern, DPR entered chlorpyrifos in its formal evaluation process to determine the scientific evidence for listing it as a pesticide Toxic Air Contaminant (TAC) (CA Food & Agric. Code §§ 14021-14027).
DPR’s assessments were intended to evaluate chlorpyrifos as a pesticide TAC as defined in California regulations (Title 3, Section 6864). The determination of a pesticide TAC is based on whether the air concentrations, either measured or modeled, exceed the reference concentration (RfC) divided by ten. Under the applicable California statutory provisions, designation of an active ingredient as a TAC is based on an evaluation that assesses the following:
- The availability and quality of data on health effects;
- The potency, mode of action, and other relevant biological factors;
- An estimate of the levels of exposure that may cause or contribute to adverse health effects; and
- The range of risks to humans resulting from current or anticipated exposure (CA Food & Agric. Code § 14023(a)).
DPR published its draft revised report entitled "Evaluation of Chlorpyrifos as a Toxic Air Contaminant" in December 2017 and an addendum to that report in June 2018. DPR issued its final TAC evaluation in July 2018. The July 2018 evaluation concludes that “chlorpyrifos meets the criteria of TAC designation by using either the developmental neurotoxicity endpoint or the [acetylcholinesterase (AChE)] inhibition endpoint, even without the additional 10x uncertainty factor necessary to account for the fact that the developmental neurotoxicity effects occur at a lower level than AChE inhibition.”
DPR’s findings, public comments, and responses to those comments were reviewed by the Scientific Review Panel (SRP) on TACs. SRP’s findings on chlorpyrifos issued in August 2018 “unanimously concluded that the report, with the revisions requested by the Panel, is based on sound scientific knowledge, and represents a balanced assessment of our current scientific understanding.”
In April 2019, chlorpyrifos was listed in California as a TAC, which triggered a DPR requirement to “develop control measures to protect the health of farm workers and others living and working near where the pesticide is used.” In its press release announcing the cancellation proceedings, CalEPA states that “DPR has determined, in consultation with CDFA, the Office of Environmental Health Hazard Assessment (OEHHA), and the California Air Resources Board (CARB), that sufficient additional control measures are not feasible.”
DPR’s announcement is the beginning of what DPR estimates could be a two-year cancellation proceeding, although in reality the process may take even longer. Other actions proposed in conjunction with the cancellation proceeding include:
- DPR to consult with county agricultural commissioners and local air pollution control districts before filing for cancellation.
- DPR to support “aggressive” enforcement of existing restrictions on the use of chlorpyrifos, including a ban on aerial spraying, quarter-mile buffer zones, and limiting use to crop-pest combinations that lack alternatives.
- DPR and CDFA to convene a cross-sector working group to identify, evaluate, and recommend safer and more practical and sustainable alternative pest management solutions to chlorpyrifos.
- California Governor Gavin Newsom to propose $5.7 million in new budget funding “to support the transition to safer, more sustainable alternatives.
DPR’s action must also be viewed in conjunction with various federal and state reviews and resulting litigation regarding chlorpyrifos’ continued registration and use. The U.S. Environmental Protection Agency (EPA) for example, is conducting its own registration review of chlorpyrifos, and was ordered by the U.S. Court of Appeals for the Ninth Circuit to issue, within 90 days of the April 19, 2019, order, its final decision regarding the continued registration of chlorpyrifos.
Other states are also taking action to ban chlorpyrifos, notably Hawaii, which enacted legislation in 2018 to ban the use of chlorpyrifos in Hawaii by 2022; and New York, whose legislature approved bills in April 2019 to ban chlorpyrifos use in New York by 2021.
Stakeholders should review all these issues closely, as these unprecedented decisions are likely to provide multiple opportunities to comment or otherwise participate to ensure that regulatory requirements are indeed being met for cancellation.
More information concerning chlorpyrifos is available on our blog.
By Lisa M. Campbell and Lisa R. Burchi
On February 6, 2019, the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit) issued an order granting the U.S. Environmental Protection Agency’s (EPA) and Acting EPA Administrator Andrew Wheeler’s (collectively EPA or Respondents) September 24, 2018, petition for an en banc rehearing concerning the Ninth Circuit’s August 9, 2018, decision that vacated an EPA order maintaining chlorpyrifos registrations and remanded the case to EPA with directions to revoke all tolerances and cancel all registrations for chlorpyrifos within 60 days.
The Ninth Circuit’s order granting the Respondent’s petition that the case be re-heard en banc does not provide an explanation for its decision. The Ninth Circuit evidently found the arguments offered by Respondents and other interested parties that filed amicus curiae briefs more persuasive than Petitioners’ brief (including the Pesticide Action Network North America (PANNA) and the Natural Resources Defense Council (NRDC)), who argued against submission of certain amicus curiae briefs and also that, with limited exception, Respondent’s petition for rehearing lacked merit and should be denied.
The en banc oral argument will be held March 26, 2019, at 2:30 p.m. (PST).
Arguments for Rehearing
Prior to the February 6, 2019, order, on October 15, 2018, three amicus curiae briefs were filed in support of EPA’s petition by CropLife America (CLA), Agribusiness Council of Indiana (Agribusiness), and Dow Agrosciences LLC (DAS). Despite Petitioners’ objection to the motions of Agribusiness and CLA for leave to file amicus curiae briefs in support of Respondent’s petition for rehearing, on November 13, 2018, the Ninth Circuit granted the motions for leave to file amicus curiae briefs.
EPA’s petition for rehearing made multiple arguments as to why an en banc and panel rehearing should be granted, including the Panel’s lack of jurisdiction, the Panel’s order conflicting with applicable Supreme Court precedent, and specific modifications to be addressed to the order to comply with Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) requirements. More information regarding EPA’s petition is available in our blog item “EPA Petitions for En Banc and Panel Rehearing in Ninth Circuit Chlorpyrifos Case.”
The amicus curiae briefs supported EPA’s arguments and also made arguments supporting rehearing in addition to those previously set forth by EPA. CLA’s brief focused on the fact that the Panel’s decision disregarded FIFRA’s cancellation process, stating: “if EPA ultimately were to determine that any chlorpyrifos registration would need to be cancelled, such an action could not be accomplished in the way the panel majority prescribed: by circumventing the procedures Congress required to ensure that pesticide cancellation decisions are not made unless and until these harms and the best science available are properly vetted.” DAS’ brief addressed in detail the Panel’s violation of administrative law in dictating how EPA must act (i.e., cancel the chlorpyrifos registrations) and the potential violation of FIFRA by EPA if forced to comply with the Panel’s order regarding the timing for cancelling such registrations. The amicus curiae briefs also sought to provide information on the practical consequences that chlorpyrifos registrants and users would face if the panel opinion is not revised. For example, DAS discussed its proprietary interest in protecting its registrations and defending its product, while Agribusiness in its brief provided some background on the use and benefits of chlorpyrifos, the lack of viable alternatives, and the ramifications of the order on insect pest resistance and the ability to combat new invasive pests.
Petitioners’ response to the petition for rehearing and rehearing en banc argued that there was no basis for rehearing. Petitioners noted that en banc review is “disfavored” and appropriate in limited “extraordinary circumstances” and in the face of “an irreconcilable conflict between the holdings of controlling prior decisions of this court.” Petitioners argued that the Panel decision was in accord with precedent and that a request for rehearing “would only result in further delay.” Petitioners did concede on two points: (1) modifying the order to direct EPA to cancel the registrations under the FIFRA cancellation process, which necessitates more time than the 60 days set forth in the order; and (2) clarifying that the order is limited to cancelling registrations that can result in residues on food.
EPA, chlorpyrifos registrants and users, and industry generally should be encouraged by the decision to grant an en banc rehearing in this case, but the outcome is far from certain. Given the issues at stake, registrants should monitor this hearing closely.
By Lisa M. Campbell and Lisa R. Burchi
On July 29, 2016, the Environmental Appeals Board (EAB or Board) issued its Final Decision and Order (Order) upholding the Administrative Law Judge (ALJ) Initial Decision and an earlier order denying Bayer CropScience LP and Nichino America, Inc.’s (BCS/NAI) Motion for Accelerated Decision that held that the U.S. Environmental Protection Agency (EPA) was authorized to cancel the conditional flubendiamide registrations under Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 6(e) and did not need to provide BCS/NAI the full Section 6(b) cancellation process. The Board also upheld EPA’s determination prohibiting BCS/NAI from the continued sale, distribution, and use of existing stocks of flubendiamide products, but found that EPA’s determination to prohibit the continued sale and distribution of existing stocks of flubendiamide end-use products by distributors and retailers other than BCS/NAI was not supported by the record.
Additional information regarding this case is available in our blog items EPA ALJ Issues Initial Decision in Bayer Flubendiamide Cancellation Proceeding, EPA ALJ Denies Bayer’s Motion for Accelerated Decision and Flubendiamide Registrants and EPA File Post-Oral Argument Briefs.
The EAB summarized BCS/NAI’s arguments concerning the overall proceeding with two questions: (1) whether EPA has properly initiated this cancellation action under Section 6(e) rather than Section 6(b); and (2) if the proceeding is properly initiated under Section 6(e), whether BCS/NAI can nonetheless challenge the lawfulness of a condition in their registrations in a Section 6(e) proceeding.
With regard to the first issue, the Board found that EPA appropriately commenced the proceeding under the expedited cancellation procedures set forth in FIFRA Section 6(e) because two criteria were satisfied: (1) the registration must have been issued as a conditional registration under FIFRA Section 3(c)(7); and (2) EPA must have determined that BCS/NAI failed to satisfy a condition of that registration. The Board found that “neither the plain language of the statute, its structure, nor legislative history” supported BCS/NAI’s argument that if EPA “has made an unreasonable adverse effects finding, FIFRA’s general cancellation provision in section 6(b) trumps section 6(e) and bars the Program from initiating a 6(e) cancellation proceeding, even where the elements for a section 6(e) cancellation are met.” The Board further stated: “Bayer and Nichino’s argument that section 6(b) takes priority over section 6(e) is inconsistent with the structure and environmental protection goals of FIFRA.” Instead, EAB states:
- Given Congress’ decision to add an expedited cancellation provision to FIFRA -- separate and independent from section 6(b) -- it is difficult to square FIFRA’s environmental protection goals with Bayer and Nichino’s argument that the Pesticide Program must use the more time-consuming and resource-intensive section 6(b) procedures to cancel a pesticide in circumstances where section 6(e)’s expedited procedures are applicable. That is particularly the case when one considers that, unless the Program issues an “emergency order,” a registrant is allowed to sell and distribute the pesticide during the course of section 6 cancellation proceedings. See FIFRA § 6(b)-(c), 7 U.S.C. § 136d(b)-(c). If the Program were required to initiate cancellation proceedings under section 6(b) instead of under section 6(e), registrants would, in effect, be rewarded with additional time to sell and distribute their pesticides. Had Congress intended such a result, it could have subordinated section 6(e) to section 6(b) when it added the new conditional registration authority (including section 6(e)) to the existing statutory structure in 1978. See S. Rep. No. 95-1188, at 11 (1978) (Conf. Rep.). But Congress did not take such a step. Rather, in creating the possibility of allowing pesticides to be introduced to the market conditionally when they could not meet all the requirements for a general registration, Congress took steps to assure that such pesticide registrations could be promptly canceled when the terms of the conditional registrations were not met.
The Board also found that BCS/NAI could not demand a Section 6(b) cancellation proceeding because they “willingly accepted the termination condition in 2008 and 2009, knowing that it required them to submit a request for voluntary cancellation if the Program were to issue a determination that flubendiamide causes unreasonable adverse effects.” EAB stated: “Given the language of the conditional registrations, Bayer and Nichino’s affirmative concurrence on that language, and the record of negotiations, we find that Bayer and Nichino willingly agreed to the termination condition, knowing that they were agreeing to an approach that could remove the flubendiamide products from the market rapidly. Having knowingly agreed to this procedure, they cannot contest it now.”
With regard to the second issue as to whether BCS/NAI can nonetheless challenge the lawfulness of a condition in their registrations in a Section 6(e) proceeding, EAB found that the scope of a Section 6(e) cancellation is “narrowly limited to the following issues: (1) whether the condition was satisfied, and (2) whether the Pesticide Program’s determination on the appropriate disposition of the existing stocks of the canceled pesticide is consistent with FIFRA.” The Board found that the facts in this particular case demonstrated that BCS/NAI “had ample opportunity to challenge the lawfulness of the termination condition in a timely and permissible way but failed to do so.” EAB noted, for example, that BCS/NAI could have declined to accept the registration terms and challenged EPA’s refusal to grant a conditional registration with terms acceptable to BCS/NAI. The Board further found that BCS/NAI understood the consequences of agreeing to the condition at issue and thus “knew, or should have known given the clarity of section 6(e), that any objection they had to the condition giving the Pesticide Program the option to effectively require cancellation without instituting a section 6(b) proceeding could not be raised in a section 6(e) cancellation for failure to comply with the termination condition.”
As for the specific issues that the Board stated were properly before it in this appeal, it found BCS/NAI did not comply with their obligation to submit voluntary cancellation requests. The Board rejected arguments that BCS/NAI’s failure to request cancellation is excused because EPA did not meet an important pre-condition to the termination condition by “engaging in dialogue” with BCS/NAI regarding the data and EPA’s conclusions related to that data. Specifically, the Board found that this objection was not timely raised and thus was precluded, but that even if it had not been precluded, BCS/NAI had failed to establish by a preponderance of the evidence that EPA did not engage in such dialogue.
One aspect of the EPA’s determination that was overturned relates to whether existing stocks can continue to be sold or distributed. Although the Board upheld as reasonable EPA’s denial of the sale and distribution of existing stocks by BCS/NAI because they violated the termination condition, EAB amended EPA’s existing stocks determination described in the Notice of Intent to Cancel “to allow distributors and retailers other than Bayer and Nichino to sell and distribute end-use flubendiamide products that have been formulated, packaged, and labeled for use and [that] have been shipped or released into commerce to distributors on or before the date of this Final Decision and Order, until those stocks are exhausted.” EAB instead stated that EPA’s “rationale for denying the sale and distribution of existing stocks by Bayer and Nichino -- because they violated the terms of their conditional registrations -- has limited, if any, applicability to non-registrants.” Distributors and retailers other than BCS/NAI can continue to sell and distribute end-use flubendiamide products that were formulated, packaged, and labeled for use and shipped or released into commerce to distributors on or before the date of this Final Decision and Order, until those stocks are exhausted.
Although the resolution of this case has potential implications for current and future registrations, EPA has acknowledged the unique circumstances of this case, and indicated that it is unlikely that a conditional registration like that issued for flubendiamide will be issued again. If a registrant ever finds itself in a similar position to BCS/NAI, or facing a situation, as EPA has indicated, that seeks a condition of registration that would allow a registration to simply expire, such companies should carefully consider how to proceed, including considering options to challenge the lawfulness of the condition proposed by EPA or to demonstrate that the applicant/registrant is entitled to a general, not conditional, registration.
By Lisa M. Campbell, Timothy D. Backstrom, and Lisa R. Burchi
On July 1, 2016, in an administrative appeal of the June 1, 2016, Administrative Law Judge (ALJ) Initial Decision and an earlier order denying Bayer CropScience LP and Nichino America, Inc.’s (BCS/NAI) Motion for Accelerated Decision that held that the U.S. Environmental Protection Agency (EPA) was authorized to cancel the conditional flubendiamide registrations under Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 6(e) and did not need to provide BCS/NAI the full Section 6(b) cancellation process, the parties in the case filed post-oral argument briefs. The briefs were ordered by the Environmental Appeals Board (EAB or Board) following oral arguments held on June 22, 2016, by BCS/NAI and EPA.
Additional information regarding this case is available in our blog items EPA ALJ Issues Initial Decision in Bayer Flubendiamide Cancellation Proceeding and EPA ALJ Denies Bayer’s Motion for Accelerated Decision.
The EAB requested that the parties submit post-order briefs responding to questions raised by the Board during oral argument, and the responses filed by the parties demonstrate their divergent views on issues related to this conditional registration and the process by which EPA sought to cancel such registration.
The specific questions asked by the Board and BCS/NAI and EPA’s responses are as follows:
1(a). What authority does the Board have in a FIFRA section 6(e) proceeding to consider the lawfulness of a condition of registration, given that section 6(e) proceedings are statutorily limited to two issues: (1) whether a condition of registration has been violated; and (2) whether EPA's determination with respect to disposition of existing stocks is consistent with FIFRA?
BCS/NAI argues that the EAB must resolve questions about the lawfulness of a condition of registration in determining whether the condition has been violated and to ensure that it has jurisdiction over this proceeding. BCS/NAI states: “For the EAB to determine ‘whether the … conditions have been satisfied within the time provided’ under FIFRA § 6(e)(2), the Board must necessarily first consider whether the conditions are valid.” BCS/NAI further argues that its “challenge to the lawfulness of the voluntary cancellation provisions is a challenge to the ALJ’s and EAB’s subject matter jurisdiction over this proceeding, the resolution of which is part of the Board’s inherent authority.” BCS/NAI argues that the EAB should find that it lacks subject matter jurisdiction to administer this dispute and remand to the Office of Pesticide Programs (OPP).
EPA, in contrast, stated that EAB “lacks the authority to rule on an issue clearly beyond the well-defined and narrow scope of section 6(e).” If the EAB disagrees with EPA’s position, EPA states that for all the reasons it set forth in its previous motions, “the challenged condition was clearly lawful.”
1(b). If the Board does possess the authority in a section 6(e) proceeding to consider the lawfulness of a condition of registration, may a third party also challenge the lawfulness of either that condition or any other aspect of the registration?
BCS/NAI argued that the Board’s authority to consider the lawfulness of a condition of registration does not give third parties broad rights to challenge the lawfulness of the condition or all aspects of the registration. On this point EPA seemingly agrees, stating “While EPA would want to do a more thorough study of relevant case law and legislative history before answering this question definitively, EPA has significant doubts that any third party could challenge any condition of registration in a FIFRA section 6(e) proceeding.”
1(c). Finally, if the Board were to conclude that the voluntary cancellation condition in the flubendiamide registrations is unlawful, what effect would such a holding have on the registration itself?
BCS/NAI argues that striking the voluntary cancellation provisions would not invalidate the registrations. Instead, “If the Board concludes that the voluntary cancellation provisions are unlawful, they can be stricken from the registrations and the registrations may continue without consequence other than ensuring that EPA cannot pursue an unlawful process.” BCS/NAI states that if EPA still wishes to proceed with cancellation, it must do so under FIFRA Sections 6(b) and (c).
EPA takes the position that if the EAB “decides it has the authority under section 6(e) to review the lawfulness of the cancellation condition, and finds it unlawful, the EAB should void the flubendiamide registrations.” Specifically, EPA states: “If the condition is found to be unlawful, the whole registration must be voided because it has never been found to meet the standard for registration under FIFRA without the cancellation condition. Although the EAB can rule on the legality of EPA’s actions that are within the scope of this proceeding, the authority to issue a registration on different terms is reserved to OPP.”
2. FIFRA section 6(e) provides that any hearing on a notice of intent to cancel issued under section 6(e) shall be conducted under FIFRA section 6(d). An order issued after a section 6(d) hearing "shall be based only on substantial evidence of record of such hearing." 7 U.S.C. § 136d(d). What standard of proof does this provision require? In answering this question, take into account that FIFRA section 16 requires that a substantial evidence standard be applied by a court in reviewing EPA decisions following a hearing, and the Supreme Court's decision in Steadman v. SEC, 450 U.S. 91 (1981).
BCS/NAI argues that the preponderance of the evidence standard of proof applies to orders issued by the EAB after a Section 6(e) hearing. EPA’s position is that a hearing to address the scope of FIFRA Section 6(e) must be conducted in accordance with FIFRA Section 6(d), which states that an order issued after such a hearing “shall be based only on substantial evidence of record of such hearing.”
3. What "conclusions" are covered by the requirement in the flubendiamide conditional registration that EPA "shall engage in dialogue about the data and the Agency's conclusions?" Does EPA's determination on the toxic endpoint level constitute a "conclusion" within the meaning of the registration?
BCS/NAI argues that EPA was required “to not only engage in general dialogue about the data, but also to disclose and engage in dialogue about the Agency’s final decisions and judgments about the data and whether they support continued registration,” including EPA’s unreasonable adverse effects determination and decisions on toxicological endpoints. Specifically, BCS/NAI states: “It makes sense that a condition requiring good-faith dialogue before demanding cancellation based on an unreasonable adverse effects determination would include dialogue about the final determination. In this case, EPA precluded any opportunity for such dialogue by issuing its determination on the same day as its cancellation demand.”
EPA argues in the first instance that, as the ALJ determined, BCS/NAI did not timely raise the sufficiency of dialogue issue. If EAB considers this issue timely, EPA provides a summary of EPA’s risk assessment process and argues that “the endpoint selection was one of many components that support the conclusions in the risk assessment, but the endpoint selections were not themselves identified as conclusions in the flubendiamide risk assessments.”
4. Appellants argue on appeal that EPA presented "new conclusions in the January 29, 2016 Decision and supporting documents that were not discussed with Registrants." Appeal Brief of Bayer CropScience LP and Nichino America, Inc. at 22. If there were new conclusions presented in these documents, what were they, and where in the record are these conclusions detailed?
BCS/NAI argues that EPA presented at least three new conclusions in the January 29, 2016, documents that were not discussed with registrants: (1) EPA disclosed for the first time on January 29, 2016 its determination that “continued use of flubendiamide as currently registered … will result in unreasonable adverse effects to the environment;” (2) “Second, throughout the Decision Memorandum, EPA refers to its conclusions that exposure concentrations based on EPA’s theoretical modeling exceed or will exceed ‘Agency LOCs [levels of concern]’ within certain time periods based on unspecified toxicological endpoints”; and (3) “Third, and perhaps most critically, the Decision Memorandum and supporting documents contain buried within them EPA’s decision to adopt the 0.28 ppb sediment pore water endpoint from the spiked water study, which had been superseded by an endpoint from the scientifically more relevant and sound spiked sediment study, as the sole basis for its cancellation determination.”
EPA rejects Appellants’ argument that there were any new conclusions in its January 29, 2016, decision and supporting documents. EPA continues to contend that the toxicity endpoint is not a “conclusion” or “new,” instead arguing that risk assessment documents indicate EPA has been relying on the .28 ppb concentration since 2008.
5. EPA relied upon a toxic endpoint level from the Des-iodo Spiked Water 28-Day Study (MRID 46817023), among other evidence, in its January 29, 2016 unreasonable adverse effects determination for flubendiamide. What does the record show as to whether Appellants were notified of EPA's intent to use this toxic endpoint level prior to January 29, 2016?
BCS/NAI argued that EPA deliberately thwarted dialogue on the use of the 0.28 ppb endpoint and did not disclose its final decision until January 29, 2016. While acknowledging that the 0.28 ppb sediment pore water endpoint was calculated back in 2008, BCS/NAI notes that they submitted a spiked sediment study in 2010 based on comments from EPA for its preference for such a study, and that EPA reviewed the spiked sediment study in July 2011 and concluded that it supported a TWA pore water sediment endpoint of 19.5 ppb. After that, BCS/NAI states:
- [T]he record shows that OPP chose not to notify Registrants at a putative final meeting on December 15, 2015 that it had decided to revert to the 0.28 ppb endpoint; briefed the Assistant Administrator on the case for cancellation using analysis employing that endpoint the very next day; precluded meaningful discussion of the use of the lower endpoint by denying the Agency had made that decision at the January 6, 2016 meeting and presenting the lower endpoint as one endpoint among a “suite” of available endpoints; and deliberately obscured its reliance on the unsound endpoint in its final decision documents issued on the same day as the cancellation demand -- which do not even mention the choice, let alone provide the scientific basis for it.
EPA, in contrast, states that the record shows that EPA “openly and consistently treated the chronic toxicity endpoint from the Des-iodo Spiked Water 28-Day Study (MRID 46817023) as the appropriate regulatory endpoint, and neither withheld information regarding the endpoint, or changed its endpoint selection at any time between 2008 and the issuance of the [Notice of Intent to Cancel].”
6. FIFRA section 6(f) mandates that voluntary cancellation requests may not be acted upon by EPA until a notice-and-comment procedure has been completed. If Appellants had requested voluntary cancellation of the flubendiamide registrations under section 6(f), could they have challenged EPA's unreasonable adverse effects determination during the notice-and-comment period?
BCS/NAI argued that if registrants had requested voluntary cancellation under Section 6(f), they could not have effectively challenged EPA’s unreasonable adverse effects determination during the notice-and-comment period. BCS/NAI argues that “in exchange for the opportunity to submit public comments criticizing the lack of scientific support for EPA’s unreasonable adverse effects determination, Registrants would have had to cancel products that they believe should properly remain registered, forgo their statutory rights to a cancellation decision that is subject to interagency review by the Secretary of Agriculture and scientific peer review by the Scientific Advisory Panel and that can be challenged in an administrative proceeding, and, in doing so, potentially jeopardize their ability to seek and obtain judicial review of that decision.” BCS/NAI states further: “No registrant should be forced to sacrifice its statutory and due process rights in order to raise scientific concerns that EPA is free to ignore. Nor should registrants be held to have lost their rights to challenge the conditions by failing to pursue such an unfavorable path, particularly when the conditions of registration at issue themselves point to the right to invoke and seek relief through the § 6(e) process.”
EPA’s position is that “comments submitted during the section 6(f) comment period would become part of the Agency’s records and, to the extent relevant to EPA’s cancellation decision, could be expected to be part of the administrative record if someone appealed EPA’s decision to approve or deny the voluntary cancellation request to the federal courts.”
7. Is the doctrine of laches legally applicable to this proceeding? If so, explain how the record supports this conclusion.
A claim can be barred by laches when “the delay in filing the claim (1) is unreasonable and inexcusable and (2) materially prejudices the defendant.” BCS/NAI argued that the doctrine of laches does not apply here, as there was no unreasonable delay by registrants, and there is no prejudice to EPA. BCS/NAI states that they were justified in not pursuing any of the purported options for an earlier challenge that EPA’s claims were available. Instead, BCS/NAI chose “to generate the required data and satisfy the substantive conditions of registration, trusting that if the data did not show evidence of accumulation to levels of concern (which they did not), EPA would follow the science and the terms of the PAL and grant unconditional flubendiamide registrations.”
While EPA agrees that if the proceeding is limited to the scope set forth by Section 6(e), the laches doctrine would not be applicable. EPA also argues that “if EPA were to determine that the appropriateness of the cancellation condition is an appropriate issue for resolution,” then laches would apply. To support its position, EPA states that there is “substantial evidence in the record” that BCS/NAI waited almost eight years to challenge the condition of their registration that is now at issue. EPA further argues that it would be prejudiced because key negotiators of the cancellation condition and the initial registrations are no longer available and “this lack of available witness testimony could materially prejudice the Agency.”
The questions posed by the EAB, and the respective responses by BCS/NAI and EPA, indicate fundamental differences regarding the facts and application of the law to this case. Although the resolution of this case has potential implications for current and future registrations, EPA has acknowledged the unique circumstances of this case, and indicates that it is unlikely that a conditional registration like that issued for flubendiamide will be issued again.
EPA states: “the structure of the flubendiamide cancellation condition was unprecedented, and the flubendiamide experience shows that a condition requiring a registrant to request cancellation pursuant to section 6(f) is significantly less reliable than a condition that would allow a registration to simply expire. EPA is unlikely to grant in the future a registration with conditions that depend on a registrant requesting cancellation pursuant to section 6(f).” The statement by EPA that it is more likely in the future to impose a condition that would allow affected registrations “to simply expire” leaves unresolved the question of the rights a registrant would have to contest cancellation based on such an expiration date.
By Lisa M. Campbell, Lisa R. Burchi, and Timothy D. Backstrom
On Wednesday, June 1, 2016, Administrative Law Judge (ALJ) Susan L. Biro issued an Initial Decision in the matter of Bayer CropScience LP and Nichino America, Inc. (BCS/NAI), U.S. Environmental Protection Agency (EPA) Docket No. FIFRA-HQ-2016-0001.
This decision was issued following BCS/NAI’s request for a hearing to contest EPA’s Notice of Intent to Cancel Pesticide Registrations (NOIC). BCS/NAI challenged EPA’s position that a conditional registration term in the relevant registrations required BCS/NAI to cancel voluntarily their flubendiamide registrations within one week of notification by EPA that the currently registered flubendiamide products will result in unreasonable adverse effects on the environment, and EPA’s issuance of a NOIC for all BCS/NAI flubendiamide products as a result of BCS/NAI’s decision declining EPA’s request to cancel voluntarily all flubendiamide registrations.
In an earlier order, Biro denied BCS/NAI’s Motion for Accelerated Decision and ruled that as a matter of law EPA was authorized to cancel the conditional registrations under Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 6(e) and did not need to provide BCS/NAI the full Section 6(b) cancellation process. More information regarding that decision is available in our blog item EPA ALJ Denies Bayer’s Motion for Accelerated Decision.
Without the ability to review the bases underlying EPA’s determination that the continued registration of flubendiamide does not meet the Registration Standard under Section 6(b), the only two issues for consideration under Section 6(e) were: (1) whether BCS/NAI “initiated and pursued appropriate action to comply” with the voluntary cancellation provision of their conditional flubendiamide registration; and (2) whether EPA’s existing stocks determination was consistent with FIFRA.
With regard to the first issue, the ALJ found that new arguments offered by BSC/NAI were not timely raised, and even if they had been, the ALJ was “not persuaded by the merits of these objections.” Specifically, in response to the objection that BCS/NAI’s voluntary cancellation condition was excused because “EPA was required to engage in open, measured scientific dialogue before demanding cancellation” but did not do so, the ALJ found instead that “while it is clear from the record that Petitioners were not in agreement with EPA as to the toxicity end-points chosen or the Agency’s ultimate determination, they clearly were aware of them, and the rationale behind them, and had an opportunity to respond to EPA and engage in dialogue with Agency officials about these issues.” The ALJ concluded that BCS/NAI was not excused from the voluntary cancellation provision that was a condition of BSC/NAI’s registrations and did not submit a voluntary cancellation request, thus triggering the Section 6(e) cancellation proceedings.
With regard to the second issue concerning existing stocks, BCS/NAI had challenged EPA’s determination that the use of the flubendiamide technical registration product or the further distribution and sales of the end-use products would be prohibited, but use of the end-use products by end-users would be allowed. BCS/NAI argued that FIFRA is a risk-based statute and the facts supported an existing stocks policy that allows for sale, distribution, and use of the limited existing stocks available at the time of cancellation. The ALJ found, however, that EPA’s decision was consistent with FIFRA since FIFRA grants EPA the discretion to allow the continued sale and use of a cancelled pesticide but does not require that EPA make any “determination” that continued use and sale is consistent with FIFRA’s purposes.
BCS/NAI have indicated they will appeal the matter to the Environmental Appeals Board. A key issue in this forthcoming appeal will be whether EPA had discretion to adopt a condition of registration so restrictive in nature that it deprived BCS/NAI of any meaningful right to contest EPA’s subsequent scientific determinations. Most conditional registrations do not include a comparable condition, but it is common for EPA to issue conditional registrations under FIFRA Section 3(c)(7) that remain in effect only for a limited period during the pendency of data development.
This case illustrates the difficulty that a registrant may encounter subsequently contesting any condition that it has nominally accepted. Applicants should be wary and should carefully scrutinize any conditions that EPA may propose. It may be worthwhile in some instances to consider contesting a particularly onerous condition. FIFRA Section 3(c)(6) affords every applicant the right to contest a decision by EPA to deny an application for a less restrictive registration.
By Lisa M. Campbell and Lisa R. Burchi
On April 25, 2016, the U.S. Environmental Protection Agency’s (EPA) Administrative Law Judge (ALJ) Susan L. Biro issued an order denying Petitioners Bayer CropScience LP and Nichino America, Inc.’s (BCS/NAI or Petitioners) motion for accelerated decision and deciding that the abbreviated Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 6(e) cancellation hearing, rather than the full Section 6(b) process, was appropriate (Order). This decision is significant and, if it stands, could have far-reaching impact on easing EPA’s potential ability to cancel conditionally registered pesticide products.
Background information regarding Bayer’s decision to challenge EPA’s position that a conditional registration term in the relevant registrations required BCS/NAI to cancel voluntarily their flubendiamide registrations within one week of notification by EPA that the currently registered flubendiamide products will result in unreasonable adverse effects on the environment, and EPA’s notice of intent to cancel all BCS/NAI flubendiamide products as a result of BCS/NAI’s decision declining EPA’s request to cancel voluntarily all flubendiamide registrations, is available in our blog items: Bayer Announces That It Will Not Submit Voluntary Cancellation Requests for Flubendiamide and EPA Issues Notice to Cancel Flubendiamide Registrations.
BCS/NAI’s Motion for Accelerated Decision (Motion) requested that the ALJ “issue an accelerated decision finding that EPA’s forced ‘voluntary’ cancellation provision is unlawful, denying the proposed cancellation of the registrations under [FIFRA] § 6(e), and requiring EPA to follow the process required under § 6(b) if it wishes to cancel the flubendiamide registrations for failure to meet the FIFRA registration standard.” Petitioners argued that the more abbreviated procedure under FIFRA Section 6(e) was the wrong procedure to apply for a cancellation procedure, and that it is unlawful for EPA to “bypass cancellation process and due process rights guaranteed by statute and to shield its cancellation decision from review and challenge by Bayer, Nichino, and all other affected stakeholders.” Petitioners further argued that case law supported its position, since “[i]n the only other FIFRA cancellation proceeding to have been conducted in at least two decades, EPA drew a sharp distinction between FIFRA§§ 6(b) and 6(e) and confirmed that when EPA makes a cancellation decision based on a Registration Standard determination, the proper process is for EPA to proceed with cancellation under § 6(b).”
EPA’s opposition to the Motion argued in part that when Petitioners agreed to cancel voluntarily their flubendiamide registrations within one week of notification by EPA that the currently registered flubendiamide products will result in unreasonable adverse effects on the environment, Petitioners “waived or reduced their due process rights from a fuller FIFRA section 6(b) hearing to the more limited FIFRA sections 6(e) and 6(f) rights to get their products to market quicker.” EPA further argued that in seeking other relief, Petitioners are “in effect, asking this Tribunal to rewrite the terms and conditions of their registrations,” which would exceed its authority.
In its Order, the ALJ concludes that FIFRA’s “text, structure, and legislative history and federal court opinions allow for this Section 6(e) proceeding.” The ALJ states that “Petitioners have cited nothing in the statute or legislative history to suggest that EPA is obliged to use the pre-existing general registration cancellation process under FIFRA Section 6(b) for cancelling general registrations, to cancel conditional registrations.” The ALJ further notes: “The few cases that Petitioners cite to support their claim that EPA is required to go through a Section 6(b) proceeding to cancel pesticide registrations are all clearly distinguishable from the facts of this case because they involve general registrations, not conditional registrations.” Instead, the ALJ compared a “conditional registration” to a learner’s permit not entitled to Section 6(b) cancellation proceedings, while unconditional registrations are “entitled to an extended process because EPA previously determined their use, on an indefinite basis, would not cause unreasonable adverse effects on the environment.”
- [A] “conditional registration” is not equivalent to a full registration; it is a stop-gap status that gives the registrant time to gather data to prove it is entitled to general registration. This situation is analogous to obtaining a learner’s permit to obtain the requisite skill to demonstrate competence on the practical driving skills test in order to obtain a driver’s license. As such, conditional registrations are not entitled to the same lengthy procedures for cancellation under Section 6(b).
The ALJ further dismissed Petitioners’ argument that the “forced” voluntary cancellation condition in their conditional registrations is unlawful, finding instead that Petitioners had options and “made a business decision, likely for excellent economic reasons, and accepted the conditions and put their products on the market under conditional registrations.” In addition, the ALJ found that “the record in this case indicates that Petitioners played an active part in drafting the conditions in the [Preliminary Acceptance Letter] PAL containing the voluntary cancellation provisions and were well aware of their significance.” The Order states:
- As such, this Tribunal sees no reason to allow Petitioners out of the 2008 legal agreement they knowingly made for a “fast death” cancellation arrangement. This is especially true because Petitioners only sought to challenge the voluntary cancellation arrangement as “unlawful” seven years after entering into it and only when EPA sought to trigger the cancellation and make Petitioners live up to their end of the bargain. In the interim, Petitioners financially benefited from the conditional registration, which allowed them to sell their products while pursuing data to remove the “uncertainty” as to their adverse effects on the environment.
If the case proceeds under the FIFRA Section 6(e) hearing process, the only issues to be determined will be limited to “whether the registrant has initiated and pursued appropriate action to comply with the condition,” and the EPA determination concerning disposition of existing stocks. This means that BCS/NAI’s significant issues as to whether EPA’s determination that the continued registration of flubendiamide does not meet the Registration Standard cannot be reviewed since, as BCS/NAI discuss in their motion, that the ALJ under a Section 6(e) hearing process cannot conduct “an independent scientific review to gauge the strength of EPA’s scientific conclusions in support of its proposed cancellation.”
Many in industry agree with BSC/NAI’s argument in their Motion that EPA’s decision to proceed in this way has shown “an apparent unwillingness to subject its positions to peer review and public scrutiny in compliance with FIFRA.” It is unclear how many other conditional registrations have conditional registration provisions that would require voluntary cancellation in the manner that the one at issue in this proceeding does. Even if that provision is not a typical provision, the potential implications for abbreviated cancellation proceedings for other conditional registrations are significant and should be carefully considered by registrants with regard to both their existing and future registrations. A condition of registration could result in a de facto waiver of rights otherwise afforded to challenge a cancellation determination that is not supported by the science and/or not consistent with the FIFRA Registration Standard. This may be easier said than done, as many in the registrant community find there is often not much “voluntary” about accepting an EPA proposed condition of registration.