Chemical Prod. & Distributors v. Helliker

• Decision Date: 31 August 2006
• Docket Number: No. 04-56318.,04-56318.
• Citation: 463 F.3d 871
• Parties: CHEMICAL PRODUCERS AND DISTRIBUTORS ASSOCIATION, Plaintiff-Appellant, v. Paul E. HELLIKER, Director of the California Department of Pesticide Regulation, Defendant-Appellee, and Syngenta Crop Protection, Inc.; Dow Agrosciences LLC; BASF Corporation; Bayer Cropscience LP; Du Pont De Nemours and Company; Monsanto Company, Defendants-Intervenors-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

463 F.3d 871

CHEMICAL PRODUCERS AND DISTRIBUTORS ASSOCIATION, Plaintiff-Appellant, v. Paul E. HELLIKER, Director of the California Department of Pesticide Regulation, Defendant-Appellee, and Syngenta Crop Protection, Inc.; Dow Agrosciences LLC; BASF Corporation; Bayer Cropscience LP; Du Pont De Nemours and Company; Monsanto Company, Defendants-Intervenors-Appellees.

No. 04-56318.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 4, 2006.

Filed August 31, 2006.

COPYRIGHT MATERIAL OMITTED

David H. Bamberger, DLA Piper Rudnick Gray Cary U.S. LLP, Washington, D.C., for the plaintiff-appellant.

Stanley W. Landfair and Lawrence S. Ebner, McKenna Long & Aldridge LLP, Los Angeles, CA, for the defendants-intervenors-appellees.

Appeal from the United States District Court for the Central District of California; A. Howard Matz, District Judge, Presiding. D.C. No. CV-02-09781-AHM.

Before HAWKINS and PAEZ, Circuit Judges, and NEIL V. WAKE,^* District Judge.

WAKE, District Judge.

We must decide whether intervening amendments to California's pesticide registration laws, which were challenged and upheld below, render this appeal moot. We hold they do. Because the amendments cannot be attributed to the voluntary conduct of the party seeking relief from the judgment, we vacate the district court's judgment.

I. Federal and California Pesticide Regulation

Under the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§ 136 to 136y ("FIFRA"), all pesticides must be registered with the Environmental Protection Agency before being sold or distributed. 7 U.S.C. § 136a(a). Pesticides also must be registered with California's Department of Pesticide Regulation ("the Department") to be sold in California. Cal. Food & Agric. Code § 12811 (Deering 2006). Both the California and federal registration laws require prospective sellers to submit with their registration applications extensive data on the health and environmental effects of their pesticides. Because the testing required to produce such data is costly, applicants seeking to register pesticides with the same active ingredients as previously registered pesticides have incentive to acquire and use data submitted by prior registrants.

FIFRA's rules relating to re-use of data by secondary registration applicants fall into time periods beginning on the date the data were originally submitted. Original registrants are entitled to exclusive control over the data submitted with their application for ten years following their registration. 7 U.S.C. § 136a(c)(1)(F)(i). During the ten-year period, secondary registrants may use such data only if they obtain written consent from the original registrant, i.e., a "letter of authorization." The exclusive control afforded to original registrants during this period allows them to deny use of their data to others or to set their own prices for letters of authorization. After this ten-year period is a five-year "mandatory data-licensing" period. During the five years, secondary applicants may rely on previously filed data without permission from the original submitter but "only if the applicant has made an offer to compensate the original data submitter and submitted such offer to the Administrator [of the Environmental Protection Agency] accompanied by evidence of delivery to the original data submitter of the offer." Id. at 136a(c)(1)(F)(iii). If the original data submitter deems the offer unsatisfactory, the amount of compensation is fixed through binding arbitration. Id. Arbitrated pricing during this mandatory-licensing period replaces the original submitter's previous power unilaterally to dictate the price secondary applicants must pay to use the data. Disagreement between the original submitter and a new applicant, moreover, will not delay the new applicant's registration. Id. After expiration of the five-year mandatory data-licensing period, the data become freely available for use by secondary applicants. Id. at 136a(c)(1)(F)(iv).

When this case began, California required secondary applicants to obtain letters of authorization from original data submitters when federal law did not. While federal law provides only a ten-year period of exclusive use to original submitters, California law granted them exclusive use in perpetuity. Cal. Food & Agric. Code § 12811.5 (Deering 2004). Before its amendment, section 12811.5 read:

Except as provided in Section 13128, data, other than public literature, previously submitted to the director or the Administrator of the United States Environmental Protection Agency to support an application for the original registration of a pesticide, or to support an application for an amendment adding any new use to that registration and that pertains solely to that use, shall not, without the written permission of the original data submitter, or its assigns or successors in interest, be considered by the director to support an application by another person.

Id. (emphasis added); see also Cal.Code Regs. tit. 3, § 6170(c) (Barclay 2004). Thus, in California a secondary applicant could never use previously submitted data without permission from the original submitter, who could hold out for any price or refuse authorization altogether.

Chemical Producers and Distributors Association ("the Association"), a trade organization of manufacturers and sellers of generic pesticides, brought this action against Paul Helliker, Director of the Department, challenging California's longer exclusive use period. The complaint sought an injunction and a declaration that the California statute was preempted "to the extent that [it] purport[s] to grant data submitters in California exclusive use rights to data that were previously submitted to EPA and are subject to FIFRA's mandatory data-licensing scheme."

The Director declined to defend the law he was charged with enforcing. However, Syngenta Crop Protection, Inc., Dow Agrosciences L.L.C., B.A.S.F. Corporation, Bayer Cropscience L.P., E.I. Du Pont De Nemours and Company, and Monsanto Company ("Intervenors") intervened as defendants in support of the California statute and regulations. The district court granted summary judgment for the Intervenors and the Director, finding the state statute and regulations not preempted. Chem. Producers & Distrib. Ass'n v. Helliker, 319 F.Supp.2d 1116 (C.D.Cal.2004). The Association appealed.

While the appeal was pending, California enacted amendments to its pesticide registration law, effective January 1, 2006. The amended statute eliminates any state law period of exclusive use by the original data submitter. Instead, California now allows mandatory data-licensing at arbitrated prices from the outset for secondary users, although a new applicant may obtain a letter of authorization if the original data submitter is willing. Alternatively, a new applicant may (1) formulate or obtain its product from a source that has data authorization from the data owner or (2) formulate or obtain its product from a source that has irrevocably offered to pay the data owner a share of the cost of producing the data. Cal. Food & Agric. Code §§ 12811.5(a) & (c) (Deering 2006). Like FIFRA, the new law provides for arbitration where an irrevocable offer to pay is made but price is not agreed upon, and a secondary applicant's registration will not be delayed by the dispute. Id. at § 12811.5(d). As in FIFRA, data may be used by secondary registrants without compensation to the original submitter after a certain period. Id. at § 12811.5(a). In FIFRA that period is fifteen years, and under the amended California law it is fifteen years for data submitted after August 1, 2005, and seventeen years for data submitted before that date. Id. at § 12811.5(a)(3).

In summary, although the new California law does not replicate FIFRA's first ten-year period of original submitters' exclusive entitlement to their data, original submitters still have that exclusivity, even in California, by force of FIFRA's terms. The former California law's extension of the exclusive use period beyond FIFRA's ten years is abolished. In no circumstance does the California law now give original submitters exclusive right to their data for California registration purposes when FIFRA subjects those data to mandatory licensing at arbitrated prices.

In light of the amendments, the Association suggests its appeal is moot and moves for vacatur of the lower court's judgment. Intervenors contest both mootness and vacatur.

II. Mootness

"Where intervening legislation has settled a controversy involving only injunctive or declaratory relief, the controversy has become moot." Bunker Ltd. P'ship v. United States, 820 F.2d 308, 311 (9th Cir. 1987) (citations omitted). Here the Association sought only injunctive and declaratory relief. We therefore must decide whether California's amended statute has settled the Association's controversy.

A. Statutory Amendment as Settling the Controversy

The test for whether intervening legislation has settled a controversy involving only declaratory or injunctive relief is "whether the new [law] is sufficiently similar to the repealed [law] that it is permissible to say that the [government's] challenged conduct continues." Ne. Fla. Chapter of Associated Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656, 662 n. 3, 113 S.Ct. 2297, 124 L.Ed.2d 586 (1993) (citations omitted). Where the law has been "sufficiently altered so as to present a substantially different controversy from the one the District Court originally decided," there is "no basis for concluding that the challenged conduct [is] being repeated." Id. (citations and internal quotation marks omitted).

In evaluating whether the government's challenged conduct continues, the case or controversy giving rise to jurisdiction is the touchstone. See id. at 662, 113 S.Ct. 2297; Diffenderfer v. Cent. Baptist Church of Miami, Inc., 404 U.S. 412, 414, 92 S.Ct. 574, 30...