Beveridge & Diamond
 

D.C. Circuit Rules EPA Pesticide Registration Enforcement Approach Is Ripe for Challenge

Beveridge & Diamond, P.C., July 21, 2010

On July 16, 2010 the U.S. Court of Appeals for the D.C. Circuit issued a ruling in Reckitt Benckiser v. Jackson reversing the District Court’s dismissal of an action challenging EPA’s efforts to implement effective cancellation of pesticide registrations without initiating formal registration cancellation proceedings.  The case was remanded to the District Court for further proceedings regarding the lawfulness of EPA’s practice.  A copy of the opinion is available here.

Reckitt Benckiser involves the scope of EPA’s authority to seek effective cancellation of registrations for pesticide products issued under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. §§ 136-136y, without going through the formal registration cancellation process established by FIFRA § 6, 7 U.S.C. § 136d.  In particular, the decision calls into question EPA’s practice of pressing registrants to “voluntarily” cancel or modify existing registrations by declaring that the products will otherwise be considered “misbranded” and subject to misbranding enforcement actions by a date certain.

In May 2008, EPA issued its Risk Mitigation Decision for Ten Rodenticides (“RMD”) which ended the FIFRA Section 4 reregistration process for a group of rodenticides.  In the RMD, EPA concluded that certain product registrations did not meet statutory standards, and required substantial changes to these registrations, including a prohibition on sale of consumer-use products containing certain active ingredients.  EPA asked registrants to voluntarily comply with these new requirements, and stated that any products not in compliance would be considered “misbranded” and would be subject to misbranding enforcement action by EPA as of June 4, 2011.  Distribution or sale of “misbranded” pesticide products is illegal under FIFRA and is subject to civil and criminal enforcement and substantial penalties.  FIFRA §§ 2(q), 12(a)(1)(F), 14, 7 U.S.C. §§ 136(q), 136j(a)(1)(F), 136l.

Reckitt Benckiser, which held registrations for consumer-use products that were effectively banned by the new restrictions, informed EPA that it would not voluntarily comply and asked EPA to initiate formal cancellation proceedings for its registrations under FIFRA § 6.  The Section 6 process would, among other things, have given Reckitt Benckiser the right to a formal administrative hearing to challenge the substance and basis of EPA’s RMD.  After EPA failed to initiate cancellation and stood by its June 4, 2011 misbranding deadline, Reckitt Benckiser filed suit in March 2009 in District Court arguing that EPA had violated FIFRA by effectively canceling its existing registrations without providing the  Section 6 process.  In October 2009, the District Court dismissed the action for lack of jurisdiction, ruling on narrow grounds that the case was governed by FIFRA § 4(m), 7 U.S.C. § 136a-1(m), which places jurisdiction for EPA failure to take action required by the FIFRA Section 4 reregistration process in the Court of Appeals, not the District Court.

In the decision issued July 16th, the D.C. Circuit Court of Appeals reversed the District Court’s dismissal, finding that jurisdiction was properly in the District Court under FIFRA § 16(a), as a challenge to an EPA final action under FIFRA not following a hearing.  Although EPA argued that its actions were not final, and would not be unless and until EPA took enforcement action against Reckitt Benckiser for its failure to comply, the D.C. Circuit disagreed.  The panel held that EPA -- through the RMD, subsequent letters to Reckitt Benckiser, and its statements to the Court in oral argument -- had taken a final position that the Agency has the ability to proceed with misbranding threats and enforcement instead of or before initiating cancellation proceedings.  The opinion also noted the immediate hardships that Reckitt Benckiser faced as a result of EPA’s misbranding threats, including lost sales and a choice “between costly compliance” and “the risk of serious civil and criminal penalties for unlawful distribution of ‘misbranded’ products.”  In a decision closely following its 1986 ruling in Ciba-Geigy Corp. v. EPA, 801 F.2d 430 (D.C. Cir. 1986), the D.C. Circuit held that the lawfulness of EPA’s interpretation of its FIFRA obligations (“the pure legal question as to what procedures EPA [i]s obliged to follow”) was therefore subject to judicial review under FIFRA § 16(a), and remanded the case to the District Court.

To implement its jurisdictional ruling, the D.C. Circuit remanded the action to the District Court for further proceedings and thus did not itself decide whether EPA’s misbranding approach was lawful.  However, language in the opinion describing EPA’s actions as “in effect canceling the registrations without following the regulatory procedures provided in Section 6” and “bypassing cancellation proceedings for failure to comply with labeling changes” may suggest that the panel was skeptical of EPA’s interpretation of its authority under the statute. 

Unless EPA appeals or requests a rehearing, the action will return to the District Court to resolve the lawfulness of EPA’s approach.  In the meantime, EPA’s approach of implementing effective pesticide registration cancellation through misbranding enforcement threats is on uncertain legal ground.  In addition, the Reckitt Benckiser decision reinforces the holding in Ciba-Geigy that an agency refusal to provide procedural rights can be “final” and thus that in the right circumstances parties may be able to seek judicial review when an agency denies statutory and regulatory procedural rights before the agency has taken final action on the underlying substantive issue. 

For more information please contact Kathy Szmuszkovicz at (202) 789-6037, kes@bdlaw.com, or David Barker at (202) 789-6050, dbarker@bdlaw.com

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