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.
By Lisa M. Campbell and Timothy D. Backstrom
Significant issues concerning the scope of the U.S. Environmental Protection Agency’s (EPA) authority to cancel conditional registrations are raised by recent events concerning flubendiamide products sold in the U.S. by BayerCrop Science LP (Bayer) under the trade name Belt. Bayer announced on February 5, 2016, that it will not comply with EPA’s request that Bayer “voluntarily” cancel its registered flubendiamide products. In a January 29, 2016, letter, EPA stated that flubendiamide and a degradate compound are “mobile, stable/persistent, accumulate in soils, water columns and sediments and are toxic to aquatic invertebrates.” Based primarily on EPA’s ecological risk assessment, EPA has determined “that the continued use of the currently registered flubendiamide products will result in unreasonable adverse effects on the environment.” Bayer disagrees strongly with the EPA risk assessment, because Bayer believes it is based on overly conservative modeling estimates that cannot be reconciled with actual monitoring and environmental fate data for this pesticide.
Conditional registrations for pesticides containing flubendiamide were first granted by EPA under Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 3(c)(7) in 2008. As one condition of registration, EPA required Bayer to conduct specific environmental fate studies, which have now been submitted and reviewed. EPA also adopted an initial expiration date for all registrations of flubendiamide products of July 31, 2013, which EPA later agreed to extend several times to allow time for further review and discussion of the submitted data. The current dispute with Bayer involves a specific condition that EPA included in its preliminary acceptance letter for this active ingredient, which EPA contends obligates Bayer to request voluntary cancellation of the registrations now that EPA has made a finding of unreasonable adverse effects. Bayer characterizes the condition in question as “unlawful,” and argues that EPA must afford Bayer a full adjudicatory hearing under FIFRA Section 6(b) before the registrations can be cancelled.
Because Bayer has not submitted the “voluntary” cancellation requests demanded by EPA, EPA has stated that it will initiate the cancellation process for conditional registrations established by FIFRA Section 6(e). Although this process affords Bayer an opportunity for an administrative hearing, the issues in a conditional registration hearing under FIFRA Section 6(e) are 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. Bayer argues that the condition as it was originally imposed by EPA was improper and denies statutory due process rights, and that EPA must afford Bayer a full adjudicatory hearing under FIFRA Section 6(b) rather than the limited hearing provided under FIFRA Section 6(e).
This dispute presents a variety of important legal questions, including what authority EPA has under FIFRA to impose time limitations or expiration dates for pesticide registrations, the rights a registrant has when it applies to amend or to renew a time-limited registration, and the nature of the conditions that EPA may lawfully impose for a conditional registration under FIFRA Section 3(c)(7). The entire pesticide industry will be watching this matter with great interest.
By Lisa M. Campbell and Timothy D. Backstrom
On December 17, 2015, in the U.S. Court of Appeals for the Ninth Circuit Case Nos. 14-73353, et al. (consolidated), the U.S. Environmental Protection Agency (EPA) filed a reply in support of its motion for voluntary vacatur and remand of its decision granting a registration to intervenor DowAgroSciences LLC (DowAgro) for Enlist Duo herbicide under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). DowAgro responded to the motion by agreeing that remand is appropriate but opposing vacatur as an effort to circumvent the normal cancellation process, while the petitioners Center for Food Safety, et al. (CFS) filed a response supporting the motion for vacatur. More information on the DowAgro and CFS responses is available in our blog entry DowAgro and Center for Food Safety File Responses to EPA’s Motion for Voluntary Vacatur and Remand.
In its reply, EPA rejects the argument by DowAgro that it is trying to “short-circuit” the normal cancellation procedures under FIFRA. Citing recent Ninth Circuit precedent on vacatur, EPA argues that “vacatur would be more protective of the environment during the time in which EPA evaluates the new information, and Dow has failed to demonstrate any disruptive consequences of vacatur.”
EPA also takes issue with certain statements by CFS that it characterizes as “erroneous or irrelevant.” EPA contradicts assertions by CFS that EPA overlooked important evidence concerning the synergistic effects of Enlist Duo’s principal ingredients, that EPA determined that Enlist Duo will not protect endangered non-target plants, that EPA has violated the ESA, and that EPA is approaching synergistic effects as a new issue. EPA also objects to the efforts of CFS to introduce an extra-record newspaper article.
This case will continue to be watched closely, as there is widespread industry concern about EPA’s effort to use a judicial process in lieu of normal adjudicatory procedures and about EPA’s substantive approach to evaluating synergistic efficacy data. In this regard, it is noteworthy that the issue of potential synergistic effects is relatively narrow and does not appear to be among the purported deficiencies in the EPA decision originally cited by the petitioners.
By Lisa M. Campbell, Lisa R. Burchi, James V. Aidala, and Timothy D. Backstrom
On December 7, 2015, in the U.S. Court of Appeals for the Ninth Circuit Case Nos. 14-73353, et al. (consolidated) Intervenor Dow AgroSciences, LLC (DowAgro) filed a response, and Petitioner the Center for Food Safety, et al. (CFS, et al.) filed joinder in and response to the U.S. Environmental Protection Agency’s (EPA) motion for voluntary vacatur and remand of EPA’s registration of DowAgro’s Enlist Duo herbicide under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as well as a response to DowAgro’s Fact Sheet, a public statement made by DowAgro after EPA’s motion was filed.
DowAgro’s response calls EPA’s motion a “Dr. Jekyll & Mr. Hyde” motion. The request for remand, DowAgro states, is “uncontroversial” and will allow the agency to review the new information that may bear on the pesticide registration. DowAgro thus does not object to the remand and believes ultimately that “the new information cited by respondents has no impact on the validity of the existing registration.”
On the other hand, DowAgro argues that EPA’s request to vacate the registration is “novel and unlawful.” DowAgro states that EPA is trying to “short-circuit [the FIFRA] regulatory scheme and abdicate the responsibilities Congress assigned to the agency.” Specifically, DowAgro argues this case is “closely analogous” to the Reckitt Benckiser case (762 F. Supp. 2d 34 (D.D.C. 2011), where the court did not allow EPA to circumvent the statutory cancellation regime, finding that FIFRA Section 6 “establishes a detailed, multistep process that EPA must follow when it wants to cancel or suspend a registration.” Id. at 42 (emphasis in original). DowAgro states that the court must “limit its relief to a remand for the agency to exercise primary jurisdiction to review the new information and decide what additional steps, if any, are warranted.” While EPA reviews the additional information, DowAgro has agreed to “stop sales of Enlist Duo, and to work out an appropriate agreement to that effect with the agency.”
CFS, et al.’s filing asserts that vacatur is the appropriate remedy. CFS, et al. states that EPA now “has an opportunity -- a mandate -- to meet its duties under FIFRA and the ESA, and ensure Enlist Duo’s safety.” CFS, et al. “not only agree, but believe EPA greatly downplays the potential for harm by focusing only on the buffers and terrestrial plants,” and states that the “potential for harm far outweighs any likely economic disruption to Intervenor Dow.”
The outcome of the issue raised by EPA’s motion, and DowAgro’s position that EPA should not be permitted to “bypass” regulatory cancellation procedures is of significant interest to all pesticide registrants. This case will be closely watched not only because Enlist Duo is a major new product for Dow and a new tool in the herbicide-tolerant crop world, but also because of the potentially precedential process that EPA’s motion seeks with regard to pesticide registrations.
More information on EPA’s motion is available in our blog entry EPA Files Motion for Voluntary Vacatur and Remand of Enlist Duo Registration.