District Court Declines to Rule on Jurisdictional Issues in Neonicotinoid Case until Summary Judgment

In two recent orders issued in the neonicotinoid seed treatment case Anderson v. McCarthy, the U.S. District Court for the Northern District of California declined to take immediate action in response to a motion by the U.S. Environmental Protection Agency (EPA) requesting that the Court dismiss the case for lack of subject matter jurisdiction.  This case involves allegations by a coalition of beekeepers, farmers, and non-governmental organizations (Petitioners) that EPA has incorrectly applied the treated article exemption to seeds coated with neonicotinoid pesticides.

The Court issued an order denying the EPA motion to dismiss on May 13, 2016.  In that order, the Court concluded that factual issues to be resolved in deciding whether a 2013 EPA guidance document constitutes a final reviewable action are so “intertwined” with the substantive issues in the case that it would be inappropriate to try to resolve the jurisdictional issues until after the filing of summary judgment motions.  The Court stated:

• If the 2013 Guidance did consummate a new rule, and thus a final agency action, then defendants clearly violated federal law by failing to comply with rulemaking requirements.  If the 2013 Guidance did not constitute final agency action, then subject-matter jurisdiction is lacking, and the case must be dismissed.

In the May 13, 2016, order, the Court also stated that the decision to defer action on the jurisdictional issues was a “close call,” because “defendants put forth a strong argument in support of dismissal of the lawsuit at the Rule 12 stage.”

On May 23, 2016, EPA filed another motion requesting that the Court clarify the May 13, 2016, order.  In its clarification motion, EPA pointed out that the May 13, 2016, order addressed only three of the counts in the complaint challenging the 2013 Guidance, but did not address Count II, which alleged a general “failure to act” because EPA has not regulated neonicotinoid coated seeds as pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).  According to EPA, resolution of this count involves a “pure issue of law,” because the Petitioners “failed to identify any discrete, legally-required action that EPA has failed to perform.”

The EPA motion for clarification was scheduled to be heard on July 21, 2016, but the Court issued an order on July 14, 2016, vacating that hearing.  The new order stated that “defendants raised a fair point,” because “the Court’s order on the motion to dismiss failed to expressly come to grips with that part of the motion directed at the ‘failure to act’ claim for relief.”  Nevertheless, the Court concluded that “no harm will be done in postponing resolution of that issue until summary judgment.”

Commentary

Although the Court has declined to rule on any jurisdictional question concerning the Petitioners’ complaint posed by EPA until after the parties have filed their respective motions for summary judgment, this case may still be dismissed once the Court engages in the requisite fact-finding.  When the Court stated that EPA made a “strong argument” in support of immediate dismissal, it appeared to be a clear signal that this case may yet be resolved on jurisdictional issues.  The Court may decide based on the record whether the 2013 Guidance was intended to change or to modify the existing policy on applicability of the treated article exemption to coated seeds.  The Court may also consider whether or not EPA intended the policy set forth in the 2013 Guidance to be binding in deciding whether or not to bring subsequent enforcement actions.  In addition, the Court will need to consider whether it can review a general “failure to act” in the absence of any allegation that EPA was required to take some specific action.