United States: EPA Continues To Aggressively Target Distributors And Retailers Selling "Antimicrobial" Products

Last Updated: February 12 2014
Article by Andrew P. Foster and Brian C. Pickard

With each passing year, retail markets seem to become more and more inundated with products described in one fashion or another as having "antimicrobial," "antibacterial," "fungistatic," "germicidal" or similar properties. These so-called "antimicrobial" marketing claims now span a vast range of consumer products from pillows, cutting boards and pool supplies, to keyboards, shoes, toilet seats—even cat litter, to name just a few.

Careless use of these terms can expose distributors and retailers to potentially significant liability under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. §§ 136 et seq.

In relevant part, FIFRA prohibits any person from selling, distributing or using a pesticide in the United States unless it is properly registered with the EPA, or qualifies for one of the narrow regulatory exemptions. Because FIFRA and its implementing regulations define the foundation terms "pesticide" and "pest" very broadly, products making "antimicrobial" claims themselves constitute "pesticides" under the statute. See 7 U.S.C. § 136(t)-(u) and 40 C.F.R. §§ 152.3, 152.5(d) (providing definitions). Consequently, product distributors and retailers remain fully exposed to FIFRA liability even though an underlying antimicrobial additive incorporated into a "pesticidal" product is itself properly registered.

The "Treated Articles" Exemption

Many manufacturers, distributors and retailers look for liability protection in the so-called "treated articles" exemption contained in FIFRA's implementing regulations, 40 CFR §152.25(a). On its face, that provision exempts from all FIFRA requirements, including registration, any "article or substance treated with, or containing, a pesticide to protect the article or substance itself ... if the pesticide is registered for such use."

Applying the regulation literally, only two requirements must be satisfied for a product to qualify for the treated articles exemption: (1) it must be treated with or contain a pesticide to protect the product itself; and (2) the added pesticide must be properly registered for that use.

EPA, however, arguably does not apply the literal words of its own regulation. Instead, in a series of guidance and policy documents that culminated in a 2000 Pesticide Registration Notice (PR Notice 2000-1, Mar. 6, 2000), EPA espoused a number of hardline positions.

First, EPA maintains that the sole purpose of the pesticidal treatment must be to protect the article or substance itself. Second, use of "antimicrobial," or words of similar import in the name of the product is per se prohibited. Third, language on a product's label must expressly state that the antimicrobial properties are limited to protecting the product itself. Conversely, any "unqualified" use of antimicrobial language in connection with the distribution or sale of a product necessarily implies a public health claim, at least according to the Agency, thereby triggering a FIFRA violation.

Thus, in practice, EPA's narrow view of the regulatory "treated articles" exemption has so far limited its usefulness. The bottom line is that using the word "antimicrobial" (or similar language) without a clear accompanying qualification that the antimicrobial properties exist solely for the protection of the product itself will – at least as far as EPA is concerned – defeat any claimed protection under the treated articles exemption and create exposure to FIFRA liability. Whether EPA's less-than-strict interpretation of its own regulation will garner judicial approval has yet to be tested.

The "Guaranty" Safe Harbor

FIFRA affords distributors and sellers a potential second protection against statutory liability:

[A]ny person who establishes a guaranty signed by, and containing the name and address of, the registrant or person residing in the United States from whom the person purchased or received in good faith the pesticide in the same unbroken package, to the effect that the pesticide was lawfully registered at the time of sale and delivery to the person, and that it complies with the other requirements of this subchapter, and in such case the guarantor shall be subject to the penalties which would otherwise attach to the person holding the guaranty under the provisions of this subchapter. 7 U.S.C. § 137j(b)(1).

This section essentially creates a potential "safe harbor" from civil penalties for ultimate distributors and sellers of what turn out to be unregistered pesticides.

To date, only one federal court has directly analyzed this safe harbor provision of FIFRA. Sultan Chemists, Inc. v. USEPA, 281 F.3d 73, 78 (3d. Cir. 2002). Agreeing with EPA, the Third Circuit held that in order to qualify for the safe harbor, the guaranty at issue must satisfy six separate elements drawn from the statutory language. Two seemed particularly important to the Court: (1) the guaranty must contain specific language stating that the pesticidal product at issue is lawfully registered under FIFRA at the time of sale and delivery; and (2) the person seeking the safe harbor protection must have received the product in "good faith." Accord In the Matter of: 99 Cents Only Stores, FIFRA-09-2008-0027, 2010 WL 2787749 (EPA June 24, 2010).

FIFRA Penalties

It is unlawful to "distribute or sell" any pesticide that is not registered under FIFRA, or make any claims at variance with specific verbal (and sometimes visual) labeling approved the Agency in the registration process. 7 U.S.C. § 136j(a)(1)(A). Moreover, "FIFRA is a strict liability statute...Therefore, arguments based upon a lack of knowledge or intent to violate, or the intervening acts or omissions of third parties, do not provide a defense to liability." In the Matter of: Everyday Grp., LLC, FIFRA-02-2012-5201, 2013 WL 4648137 (EPA, Aug. 21, 2013).

Currently, FIFRA authorizes civil penalties of no more than $7,500 for each statutory "offense." It is well-established by FIFRA administrative and judicial decisions that each separate distribution or sale of a product in violation of the statute may be treated as a separate "offense." Thus, a single product making unqualified antimicrobial claims distributed or sold via multiple outlets and/or via e-commerce channels can quickly give rise to hundreds if not thousands of separate FIFRA offenses.

EPA regional staff and attorneys are constrained to follow the national FIFRA Enforcement Response Policy (ERP), which EPA's Office of Enforcement and Compliance Assurance re-issued in December, 2009. In classic EPA fashion, the ERP takes a formulaic, matrix-based approach to determining the "appropriate" amount of civil penalties to be sought from an alleged FIFRA violator.

There are a variety of ERP-based and equitable arguments that regulated entities can advance in an effort to soften the amount of civil penalties asserted by EPA. However, under the Agency's fairly regimented approach to calculating and asserting FIFRA civil penalties, regional program staff and legal counsel have little incentive to "buck" the national guidelines. Indeed, a recent report by EPA's internal Office of Inspector General upbraided the FIFRA program, and EPA's Regional offices in particular, for a lack of consistency in applying the ERP. Thus, negotiating with regional staff to obtain any substantial reduction in EPA's "matrix" calculated penalties typically presents an uphill battle.

Summary and Implications

If an "antimicrobial" product is not properly registered and does not meet one of FIFRA's narrow exemptions, anyone who manufactures, distributes or sells the product is exposed to the risk of stiff civil penalties. Retailers are particularly at risk, as the nearly ubiquitous use of websites for e-commerce has simultaneously raised the financial stakes and simplified the Agency's ability to investigate and prosecute FIFRA violations.

Indeed, ongoing high-dollar enforcement actions by EPA demonstrate that the Agency is actively trolling websites and brick-and-mortar retail locations looking for unqualified antimicrobial claims. There are a variety of proactive steps that retailers can take to review their product lines and marketing claims to identify and address potential FIFRA issues, thereby minimizing the company's exposure to FIFRA enforcement actions and liability.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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