Court Finds EPA’s Position That It May Use Misbranding Actions to Enforce Reregistration Determinations to Be Final and Ripe for Review

On July 16, 2010, a three judge panel for the U.S. Court of Appeals for the District of Columbia Circuit issued a unanimous decision in Reckitt Benckiser v. EPA (No. 09-1314), finding that the U.S. Environmental Protection Agency’s (EPA) May 28, 2008, threat to implement its final risk mitigation decision for ten rodenticides (RMD) by enforcement actions for “misbranding” is “sufficiently final agency action ripe for review.” The court states that the U.S. District Court for the District of Columbia, where the case originated, has jurisdiction concerning the EPA misbranding threat pursuant to Section 16(a) of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), and reversed and remanded the lower court’s decision. Lynn L. Bergeson and Timothy D. Backstrom were on the brief for amici curiae in support of Reckitt Benckiser (Reckitt). The court’s decision is available online.

In the RMD, which EPA revised on June 24, 2008, EPA describes it as “represent[ing] the Agency’s final decision on the reregistration eligibility of rodenticide products containing brodifacoum, bromadiolone, bromethalin, chlorophacinone, cholecalciferol, difethialone, diphacinone (and its sodium salt), warfarin (and its sodium salt), and zinc phosphide,” as well as “the Agency’s final action in response to the remand order in West Harlem Environmental Action and Natural Resources Defense Council v. U.S. Environmental Protection Agency, 380 F.Supp.2d 289 (S.D.N.Y. 2005).” The RMD included the following final risk mitigation measures:

• Children’s Risk Mitigation — To minimize children’s exposure to rodenticide products used in homes, EPA required that all rodenticide bait products available for sale to consumers be sold only in bait stations. Loose bait such as pellets was prohibited as a bait form.
   
• Ecological Risk Mitigation — To reduce wildlife exposures and ecological risks, EPA required sales and distribution and packaging restrictions for products containing four of the ten rodenticides that EPA stated pose the greatest risk to wildlife — brodifacoum, bromadiolone, difenacoum, and difethialone — thereby preventing purchase on the consumer market.

More information regarding the RMD is available online.

In August 2008, EPA notified Reckitt that its registered products containing these rodenticides would be considered misbranded on June 14, 2011, unless Reckitt made certain changes to its products. Under the EPA determination, Reckitt would be prohibited from selling any products containing “second generation” anticoagulants directly to consumers. Reckitt contends that alternative active ingredients are ineffective and thus insufficient to control the hazards to public health resulting from rodent infestation. After receiving the RMD, Reckitt notified EPA that it did not intend to change its products, and requested that EPA “expeditiously commence” cancellation proceedings pursuant to FIFRA Section 6. When EPA failed to do so, Reckitt filed suit on March 3, 2009, seeking declaratory and injunctive relief on the ground that EPA could not bypass cancellation proceedings and treat its registered rodenticide products as misbranded for failure to comply with the RMD. The U.S. District Court for the District of Columbia dismissed the case for lack of subject matter jurisdiction, concluding that Reckitt’s claims arose under the reregistration provisions of FIFRA Section 4, and invoking the judicial review provision in FIFRA Section 4(m) which provides for initial review in the Court of Appeals. Reckitt appealed, and also filed a petition with the Court of Appeals seeking the same relief for EPA’s failure to act in conformity with FIFRA. The court consolidated the cases.

The Court of Appeals notes that Reckitt’s complaint in the District Court challenged neither the substance of the RMD nor EPA’s authority to bring certain misbranding actions instead of or before Section 6 cancellation in those instances where a product fails to bear a label consistent with the terms of that product’s registration. Instead, Reckitt challenged EPA’s interpretation that, under FIFRA, it has the authority to commence enforcement proceedings for misbranding against the company’s products that do not conform to the determinations in the RMD without first cancelling the registrations of these products pursuant to FIFRA Section 6, thereby achieving the equivalent of cancellation without following the regulatory procedures provided in Section 6. EPA maintained its misbranding threat was neither final agency action nor ripe for review.

The court determined that EPA’s interpretation of its FIFRA misbranding enforcement authority was ripe for judicial review under Ciba Geigy v. EPA, 801 F.2d 430 (D.C. Cir. 1986): (1) EPA’s interpretation raises “a pure legal question as to what procedures EPA s obliged to follow” under FIFRA when implementing the RMD; (2) although EPA has identified the specific FIFRA misbranding provisions it considers Reckitt’s registered products will be violating, the lack of factual development concerning the circumstances in which EPA may bring a misbranding action against Reckitt’s products does not make EPA’s interpretation unripe for review; and (3) for similar reasons, EPA’s interpretation of its misbranding authority under FIFRA is “sufficiently final” agency action.

Regarding jurisdiction, EPA argued that because the RMD is a FIFRA Section 4(g)(2)(A) determination of the reregistration eligibility of active ingredients, any challenge to EPA’s implementation of it necessarily arises under Section 4 as well. The court states that EPA’s interpretation of its FIFRA misbranding enforcement authority to implement the RMD cannot properly be viewed as a form of “appropriate regulatory action” under Section 4(g)(2)(D)(i), however. Rather, the District Court has jurisdiction over Reckitt’s challenge to EPA’s interpretation of its FIFRA misbranding authority. EPA’s interpretation is “other final action[] of the Administrator not committed to the discretion of the Administrator by law,” and is judicially reviewable in the District Court under FIFRA Section 16(a). Because the Court of Appeals finds that the District Court has jurisdiction over the legal interpretation underlying EPA’s enforcement threat, and resolution of this issue governs the actions EPA may lawfully take to implement the RMD, the court did not consider where jurisdiction might lie over Reckitt’s additional contention that EPA has improperly delayed initiating cancellation hearings concerning Reckitt’s products.

The Court of Appeals reversed the dismissal of Reckitt’s complaint, and remanded the case to the District Court to address the company’s challenge to EPA’s interpretation of its authority under FIFRA to bring enforcement proceedings for misbranding before, or rather than, cancellation proceedings under Section 6 against products not voluntarily complying with a reregistration decision. Although the court reversed the District Court’s determination on jurisdiction, and rejected EPA’s contention that the misbranding threat concerning Reckitt’s products is not final action ripe for review, the court did not address the merits of the EPA interpretation that it may utilize misbranding actions to implement its reregistration decisions. Because this decision clearly frames the legal issue concerning which Reckitt is entitled to immediate review, Reckitt will now be entitled to a judicial determination on this threshold legal question before facing potential enforcement action for its refusal to comply voluntarily with the RMD. Although the Court of Appeals previously found that the same EPA position concerning authority to utilize misbranding actions to implement reregistration determinations was ripe for review in Ciba Geigy, the District Court never reached the merits of the underlying legal dispute in that case because Ciba Geigy and EPA settled the case after remand to the District Court.

The resolution of this basic legal issue will have profound and far reaching implications for all pesticide registrants subject to substantive determinations made by EPA during the reregistration or registration review processes. If the District Court accepts EPA’s construction, EPA will no longer be required to afford registrants who disagree with EPA’s determinations a right to an adjudicatory hearing before compliance. Registrants (and their distributors and retailers) will be compelled to run the risk of civil and criminal penalties and seizure of affected products in order to obtain a hearing on the merits of the EPA determinations. On the other hand, if the District Court accepts Reckitt’s construction, EPA will have to issue a notice of intent to cancel and give Reckitt an adjudicatory hearing before its may remove Reckitt’s rodenticide products containing “second generation” anticoagulants from the consumer market.