New Decision in Mega ESA Case Dismisses Most Consultation Claims with Prejudice, Although Certain Claims Survive Pending Further Submissions

In a wide-ranging decision issued on August 13, 2014, in Center for Biological Diversity v. EPA (N.D. Cal.) (often referred to as the “Mega ESA” case), Magistrate Judge Spero has dismissed most of the claims by the Plaintiffs that the U.S. Environmental Protection Agency (EPA) failed to consult or to reinitiate consultation under Endangered Species Act (ESA) Section 7(a)(2) in connection with EPA’s registration under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) of a variety of pesticides. This decision is significant not only for its findings concerning judicial review of consultations under the ESA, but also for the potential effect on challenges to generic reregistration decisions, and on individual product actions based on those EPA decisions. Registrants should carefully consider the impact of this decision on potential challenges to EPA actions involving their products. A copy of the decision is available online.

Discussion

The ESA claims that were dismissed fall in three principal categories: (1) claims concerning Reregistration Eligibility Decisions (RED) for which the general six-year statute of limitations has expired; (2) claims concerning REDs that are reviewable only in the Court of Appeals under FIFRA Section 16(b) and that were not brought in that court within the applicable 60-day period; and (3) claims based solely on Plaintiffs’ allegations that EPA retains ongoing discretionary control over pesticide registration. Claims by the Plaintiffs that currently survive this decision, at least pending further submissions by the Parties, include claims concerning EPA’s reregistration of specific pesticide products, and claims concerning EPA’s failure to reinitiate consultation for any pesticidal active ingredients that were subject to prior Biological Opinions issued by the Fish and Wildlife Service (FWS) for which the process of reregistration is not yet complete.

The Original Dismissal Decision

In the original Complaint in the Mega ESA case, the Plaintiffs made consultation claims under ESA Section 7(a)(2) for 382 separate pesticidal active ingredients. On April 22, 2013, Judge Spero issued a decision granting motions to dismiss filed by EPA and by various pesticide industry intervenors (the Intervenors). See Bergeson & Campbell, P.C.’s April 24, 2013, memorandum. A key element of that 2013 decision was a determination by the court based on Karuk Tribe of California v. U.S. Forest Service (9th Cir. 2012) that Plaintiffs could not base ESA claims alleging failure to consult only on EPA’s ongoing discretionary control over FIFRA registrations, but must instead identify a specific registration action concerning which EPA failed to consult. In that decision, the court noted that many claims by the Plaintiffs that EPA failed to consult for specific REDs cannot be timely because the decisions in question were issued by EPA more than six years prior to filing of the Complaint, thereby exceeding a general statute of limitations. In addition, the court stated that ESA consultation claims are reviewable only in the same court as the underlying agency action (construing American Bird Conservancy v. FCC (9th Cir. 2008)), that REDs are generally reviewable only in the Court of Appeals under FIFRA Section 16(b) because they are issued only after notice and an opportunity for public comment, and that actions seeking judicial review in the Court of Appeals under FIFRA Section 16(b) are time barred if not brought within 60 days. Rather than dismissing with prejudice the Plaintiffs’ ESA claims for all 382 pesticides, the court afforded the Plaintiffs an opportunity to refile an amended complaint consistent with the decision.

The Plaintiffs filed their First Amended Complaint on June 5, 2013, but the court determined that it was not sufficiently specific to satisfy the requirements of the court’s initial decision. Accordingly, the court partially granted motions by EPA and the Intervenors for a more definite statement. In their Second Amended Complaint filed on January 21, 2014, the Plaintiffs alleged 74 specific failures to consult or to reinitiate consultation for 50 pesticidal active ingredients. EPA has previously issued REDs for all 50 of these active ingredients. This second filing then triggered new motions to dismiss by EPA and by the Intervenors, which culminated in the new decision.

Claims Dismissed with Prejudice

In the August 13, 2014, dismissal decision, Judge Spero followed his prior ruling that claims concerning REDs issued before January 20, 2005 (six years before the original Complaint was filed) are barred by the general federal statute of limitations in 28 U.S.C. § 2401(a) and dismissed all such claims with prejudice. Judge Spero also reiterated his prior determination that claims concerning REDs issued on or after January 20, 2005, must be filed in the Court of Appeals whenever EPA has held a “public hearing” by publishing notice and inviting public comment. Because EPA demonstrated that it did in fact provide notice and solicit public comment concerning all of the remaining REDs, Judge Spero dismissed all claims concerning these REDs for lack of subject matter jurisdiction, without any further opportunity to amend.

Judge Spero also rejected Plaintiffs’ efforts to reassert their prior allegations based on EPA’s retention of “continued discretionary control” concerning pesticide registrations. He found these claims to be barred by his prior decision based on the Karuk Tribe decision, and did not reiterate the reasoning. Judge Spero also rejected the related notion suggested by Plaintiffs that additional affirmative acts by EPA could be used to demonstrate EPA’s continued discretionary control, although he also was careful to hold that a new affirmative action by EPA might itself be sufficient to provide a colorable basis for a new consultation claim.

Finally, Judge Spero dismissed all claims concerning failure to reinitiate consultation for pesticidal active ingredients covered by prior FWS Biological Opinions issued in 1989 and 1993 in each instance where the Plaintiffs asserted that the reregistration process for that active ingredient is complete. He rejected an argument by the Intervenors that the triggers for reinitiating consultation set forth in FWS regulations are not binding on EPA, finding that the ESA itself imposes a duty to reinitiate consultation and that the FWS regulation reflects a reasonable construction of that statutory provision. Nevertheless, he also found that final reregistration of all pesticides containing a specific active ingredient effectively supersedes any prior FIFRA registrations for that same active ingredient that were the subject of the prior Biological Opinions.

Claims That Currently Survive

In a carefully nuanced section of the decision, Judge Spero distinguished a RED that constitutes a generic determination concerning eligibility for reregistration for a pesticidal active ingredient from subsequent actions that implement the generic determination in the RED by reregistering particular affected pesticides. Judge Spero rejected EPA’s argument that these individual reregistration actions are only ministerial actions to implement the RED because a RED is “EPA’s final determination as to an active ingredient’s compliance with FIFRA § 3(c)(5)’s registration requirements.” Noting that FIFRA Section 4 specifically contemplates that the eligibility determination is just one step in the ongoing reregistration process, which is then followed by collection of product-specific data, he declined to hold as a matter of law that any attack on a specific reregistration action would be a collateral attack on the underlying RED.

Notwithstanding his refusal to dismiss separate reviewability of individual reregistration decisions out of hand, Judge Spero confirmed his view that no generic determination made by EPA in a RED can be revisited by a collateral challenge to a specific reregistration action in instances where claims based on the RED itself are not reviewable. Applying Pacific Gas and Electric v. FERC (9th Cir. 2006), Judge Spero decided that the critical question is whether the subsequent registration action is only a “clarification” of the RED, in which case it cannot be separately challenged, or whether it is a “modification” of the RED that would be susceptible to separate and collateral judicial review. Based on this analysis, Judge Spero decided to afford the Plaintiffs a new opportunity to cure deficiencies in their Second Amended Complaint by explaining how each individual reregistration action that they cite “substantially alter[ed] the meaning or scope” of the underlying RED. This may be difficult for the Plaintiffs to do, because they will need to assert both that the individual reregistration action deviated in some way from the generic eligibility determination in the RED and that this difference was sufficient to trigger a new obligation by EPA to consult under ESA Section 7(a)(2).

In addition to the ESA claims concerning certain individual reregistration actions, which currently survive pending further submissions by the Plaintiffs, there are also 11 pesticidal active ingredients for which the Plaintiffs asserted a failure to reinitiate consultation following the prior Biological Opinions but did not specifically assert that the reregistration process is complete. These claims survive dismissal only on a provisional basis, because EPA or the Intervenors are free to assert that the reregistration process for any of these 11 active ingredients is now complete. In the event that the court finds that this is correct, its holding that the completion of reregistration supersedes any duty to reinitiate consultation concerning prior registrations would likely lead to dismissal of these claims as well.

Commentary

This latest decision in the Mega ESA case is of particular significance for two reasons. First, it clearly follows prior decisions under which the vast majority of all claims concerning the failure of EPA to consult with FWS under ESA Section 7(a)(2) concerning pesticide registrations will now be time barred. Second, it addresses for the first time difficult jurisdictional issues concerning which FIFRA registration actions are reviewable and in what court.

It was not long ago that EPA was arguing that pesticide REDs are not even reviewable final agency action, because they are only one step in the reregistration process. Until recently, EPA also took the position that any judicial review of a RED should occur in District Court under FIFRA Section 16(a). In large measure due to the open-ended and burdensome nature of various judicial actions alleging failure by EPA to consult under the ESA, EPA and the pesticide industry have now converged on a joint position that REDs are both reviewable and reviewable only in the Court of Appeals under FIFRA Section 16(b). The recent success of these arguments is likely to limit the potential scope of ESA consultation actions. Nevertheless, this achievement will only be transient in character, because potential litigants are now on clear notice that they must act within the 60-day window provided by FIFRA Section 16(b) to challenge ESA compliance for any future registration action involving notice and comment, such as Registration Review decisions under FIFRA Section 3(g).

The emerging potential consensus that all generic registration decisions under FIFRA concerning which EPA has solicited public comment are reviewable, but only in the Court of Appeals and only for 60 days, has left unresolved the question of the separate reviewability of licensing actions for individual pesticide products that effectuate these generic registration decisions. Since each of these licensing actions is a separate adjudication involving facts specific to the product in question, it could be argued that each such decision must be separately reviewable. It could also be argued that any adjudicatory actions that effectuate a generic decision that is reviewable solely in the Court of Appeals should themselves be reviewable solely in the Court of Appeals.

The latest decision in the Mega ESA case represents the first real effort to grapple with these jurisdictional issues. Rather than providing for review of all individual licensing decisions, the court has adopted a principle that a specific pesticide licensing action must modify rather than merely clarify the generic registration decision that preceded it, or collateral judicial review of the implementing actions will not be available whenever review of the generic decision is not.

This new decision also appears to stand for the proposition that review of individual implementing actions may be available in appropriate circumstances in District Court under FIFRA Section 16(a). Some affected parties may question the practicality of bifurcating review between the Court of Appeals and District Court. Although this may be one of the first decisions to grapple with these difficult jurisdictional issues, it most assuredly will not be the last. Registrants will watch these decisions with great interest.