United States: Caveat Emptor: EPA Limits Hearing Rights For Some Conditional Registrants Under FIFRA

On April 25, 2016, Susan L. Biro, Chief Administrative Law Judge at the US Environmental Protection Agency (EPA), issued an order holding that a registrant of a conditionally registered pesticide product does not have a right to a full cancellation hearing under section 6(b) of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). Judge Biro held that a conditional registrant is instead limited to a narrow hearing under FIFRA §6(e), if the registrant wishes to challenge an EPA Notice of Intent to Cancel alleging that a pesticide product no longer meets a requirement of conditional registration, even a requirement to voluntarily cancel the product when the agency determines that continued registration of the product will result in unreasonable adverse effects.

A hearing under section 6(e) is truncated: It must be completed within 75 days after EPA receives a request for a hearing, and the only issues for resolution in the hearing are (i) whether the registrant has initiated appropriate action to comply with the conditions of the conditional registration and (ii) whether the agency's decision on existing stocks is appropriate. In contrast, the scope of a section 6(b) hearing is whether substantial evidence supports EPA's decision that the pesticide product no longer meets FIFRA's registration standard. Judge Biro held that a conditional registrant is not entitled to the more encompassing cancellation hearing under section 6(b): The conditional registrant may not challenge EPA's decision as to whether the registrant's product meets FIFRA's registration standard, only whether the registrant took all steps required by the conditional registration.

The lesson from Judge Biro's order is clear: Caveat emptor. Companies that accept conditional registrations must recognize that their due process rights are potentially far more limited in a truncated hearing under section 6(e) than in an extended and more encompassing hearing under section 6(b). Thus, an applicant should consider the possible implications and alternatives before agreeing to a conditional registration.

Judge Biro's order arose from the EPA's issuance to two applicants in 2008 of time-limited conditional registrations for pesticide products that contained a new active ingredient. The terms of the conditional registrations and an accompanying agreement required the registrants to submit additional environmental fate studies. The conditional registrations also required the registrants to request voluntary cancellation of their products within one week of EPA's determining, on the basis of the registrants' additional environmental fate studies, that continued registration of the products would cause unreasonable adverse effects on the environment. In January 2016, after reviewing the registrants' additional data, EPA notified the registrants that continued use of their products would result in unreasonable adverse effects on the environment and that the registrants were obligated to request voluntary cancellation of their products.

The registrants declined to request voluntary cancellation of their products, and EPA issued a notice of intent to cancel them under section 6(e), based on the registrants' failure to submit voluntary cancellation requests in accordance with the conditional product registrations. The registrants requested a hearing and filed a motion for accelerated decision, arguing that an abridged cancellation hearing under section 6(e) was unlawful and that cancellation of their conditional registrations required the full, unabridged hearing process under section 6(b). They also argued that the notice of intent to cancel was, in effect, premised upon EPA's adverse effects determination, not a mere violation of the conditional registrations.

Judge Biro disagreed. Contrasting unconditional and conditional pesticide product registrations under FIFRA, she explained that unconditional registrations are granted under FIFRA §3(c)(5) for an indefinite period, unless the agency lacks all of the information necessary to register a pesticide product under section 3(c)(5), in which case it grants a conditional registration under section 3(c)(7). Relying upon decisions in Woodstream Corp. v. Jackson, 845 F. Supp. 2d 174 (D.D.C. 2012) and 2011 U.S. Dist. LEXIS 151994 (D.D.C. June 3, 2011), Judge Biro held that EPA may grant a FIFRA §3(c)(7) registration upon a condition other than the submission of additional test data. For example, the agency may impose an expiration date or, as in the present case, require a conditional registrant to submit a request for voluntary cancellation, if the EPA determines that the conditionally registered product will cause an unreasonable adverse effect on the environment based upon the submission of the additional test data.

Quoting the Woodstream decisions, Judge Biro emphasized that limiting the conditional registrant to a truncated §6(e) hearing is not an "end run" around the lengthier and more encompassing section 6(b) hearing, because a registrant can choose to accept the conditions of the section 3(c)(7) registration and then apply for an amended registration that has no restrictions. EPA presumably would deny the amendment application, and the registrant could then invoke its right to a full section 6(b) hearing. In addition, the registrant can refuse conditions to registration at the outset, in which case EPA presumably would deny the registration application, and the registrant could again request a full hearing under section 6(b).

The registrants may appeal Judge Biro's decision to the EPA's Environmental Appeals Board. Alternatively, they may reapply for registration and appeal EPA's likely denial in a full hearing under section 6(b). Meanwhile, companies that accept conditional registrations—including any that require the registrant to voluntarily cancel its product when EPA determines that the product causes unreasonable adverse effects—must recognize that they will have only the very limited hearing rights of section 6(e) under Judge Biro's decision.

Order on Petitioner's Motion for Accelerated Decision, Bayer CropScience LP, Docket No. FIFRA-HQ-2016-0001 (U.S. Envtl. Prot. Agency ALJ Apr. 25, 2016).

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