American Vanguard Corp.. v. Jackson

• Decision Date: 17 August 2011
• Docket Number: No. 10–cv–1459 (RCL).,10–cv–1459 (RCL).
• Citation: 803 F.Supp.2d 8
• Parties: AMERICAN VANGUARD CORPORATION, Plaintiff, v. Lisa JACKSON, Administrator, United States Environmental Protection Agency, et al., Defendants.
• Court: U.S. District Court — District of Columbia

803 F.Supp.2d 8

AMERICAN VANGUARD CORPORATION, Plaintiff,

v.Lisa JACKSON, Administrator, United States Environmental Protection Agency, et al., Defendants.

No. 10–cv–1459 (RCL).

United States District Court, District of Columbia.

Aug. 17, 2011.

Barry M. Hartman, K & L Gates LLP, Washington, DC, for Plaintiff.

Eileen T. McDonough, U.S. DOJ–Environmental Defense Section, Washington, DC, for Defendants.

MEMORANDUM OPINION

ROYCE C. LAMBERTH, Chief Judge.I. INTRODUCTION

Last Autumn, the U.S. Environmental Protection Agency (“EPA” or the “Agency”) issued a Stop Sale, Use or Removal Order (“SSURO”) to plaintiff American Vanguard Corporation (“AMVAC”). The SSURO instructed AMVAC to cease the manufacture and distribution of a pesticide marketed by the company to golf courses throughout the United States, and mandated that the company destroy all remaining stockpiles of the product. EPA insists that AMVAC was selling a pesticide that deviated from the formula registered with, and approved by, the Agency. AMVAC, however, protests that EPA has known about the full chemical composition of the pesticide since 1993, and has repeatedly approved the distribution of the product in its current state. Wherever the truth lies, one fact is beyond dispute: the SSURO was signed by Rosemarie A. Kelley, the Director of the Agency's Waste and Chemical Enforcement Division (“W & C Division”). AMVAC argues that Director Kelley lacks legal authority to issue the SSURO, rendering the Agency's action legally infirm. The Court agrees, and will therefore vacate the SSURO and remand this matter to EPA for additional proceedings.

II. BACKGROUND

The Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA” or the “Act”), 7 U.S.C. §§ 136 et seq., governs the manufacture and sale of various potentially toxic agricultural products by mandating that “no person ... may distribute or sell to any person any pesticide that is not registered.” Id. § 136a(a). Under the FIFRA, EPA is charged with maintaining and enforcing a licensing scheme for all products that meet the statutory definition of “pesticide” found in § 136(u) of the Act. Id. As part of this process, EPA regulations instruct that any entity wishing to register a pesticide must furnish the Agency with certain information, including the identification of any “[i]mpurities of toxicological significance associated with the active ingredient.” 40 C.F.R. § 158.320(c).

AMVAC, a manufacturer and distributor of various agricultural products, markets a pesticide product whose active ingredient is Technical Grade PCNB. ¹ The product-which has been a registered pesticide under the FIFRA since October 9, 1985, P's App. 108, Ex. 3 to Motion for Summary Judgment, Oct. 15, 2010 [17–3] ²—prevents the accumulation of “snow mold,” and is sold primarily to golf courses for use on fairways and greens during the winter months. Id. at 332. In 1993, AMVAC discovered that an impurity—referred to as Impurity X ³—is created during the manufacturing process for Technical Grade PCNB, and remains part of the product sold by the company. Id. at 83. Both sides agree that AMVAC immediately reported the presence of Impurity X to EPA, Answer ¶ 16, Oct. 26, 2010[18]; at this point, however, their stories diverge. According to AMVAC, EPA designated the information for a “routine non-expedited review,” P's App. 112, and—over the next fifteen years—repeatedly approved updates and amendments to the Technical Grade PCNB formula registered with the Agency without ever questioning the omission of Impurity X from AMVAC's submissions. Id. at 113–19. According to EPA, however, it was never aware that Impurity X was present in manufactured Technical Grade PCNB in all instances, and only became aware of potential problems with the composition of the product as marketed after the results of studies in both Australia and Canada were made public in late 2009. But in whatever manner the parties arrived at this point, the following is clear: On August 12, 2010, the Director of EPA's W & C Division sent an SSURO concerning Technical Grade PCNB to AMVAC. Id. at 68–74. The SSURO instructs AMVAC to “cease the distribution, sale, or use of Technical Grade PCNB” and all related products, and demands that the company “submit a written proposal for proper disposition of all violative pesticide products.” Id. at 73. According to the SSURO, the presence of Impurity X in tested samples of AMVAC's Technical Grade PCNB products alerted EPA to the possibility that the version of the pesticide sold publicly by AMVAC differs chemically from the formula registered with the Agency, in violation of the FIFRA. Id. at 72.

Shortly after EPA issued the SSURO, AMVAC brought suit in this Court seeking a temporary restraining order, preliminary injunction, and permanent injunction barring the Agency from blocking AMVAC's manufacture and distribution of Technical Grade PCNB.⁴ Motion for Preliminary Injunction and Temporary Restraining Order, Aug. 27, 2010[2]. At a hearing less than a week later, the Court denied AMVAC's request for a TRO, Minute Entry, Sep. 2, 2010, and the parties subsequently agreed to merge the preliminary injunction and merits portions of this dispute. Status Report, Sep. 7, 2010[11]. Following an agreed-upon schedule, AMVAC moved for summary judgment, Motion for Summary Judgment, Oct. 15, 2010[17] (“P's Mtn.”), arguing that EPA's decision to issue the SSURO was inconsistent with the FIFRA, contrary to various requirements set forth in the Administrative Procedure Act (“APA”), and in violation of AMVAC's Fifth Amendment due process rights. Id. EPA subsequently cross-moved for judgment, Cross–Motion for Summary Judgment, Nov. 10, 2010[23],⁵ and the competing motions were fully briefed by the end of 2010.⁶ For the reasons set forth below, the Court finds that EPA's issuance of the SSURO is contrary to law in violation of the APA, and therefore vacates the SSURO and remands this matter to the Agency.

III. DISCUSSION

A basic prerequisite to any act by a federal agency is that the agency possesses actual legal authority to undertake such action. FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132–33, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000). As a general matter, this authority often comes via a federal statute that delegates certain legislative and executive functions to the agency. But the requirement that the actor possess legal authority also trickles down to particular agency officials: “When a statute delegates authority to a federal officer or agency, subdelegation to a subordinate federal officer or agency is presumptively permissible.” U.S. Telecom Ass'n v. FCC, 359 F.3d 554, 565 (D.C.Cir.2004). A necessary corollary to this principle is that the particular official acting on behalf of the agency must have been delegated the authority to act; otherwise such agency action is invalid. Ctr. for Auto Safety & Pub. Citizen, Inc. v. Nat'l Highway Traffic Safety Admin., 452 F.3d 798, 810 (D.C.Cir.2006); Flav–O–Rich, Inc. v. NLRB, 531 F.2d 358, 363 (6th Cir.1976); Pa. Mun. Auths. Ass'n v. Horinko, 292 F.Supp.2d 95, 104 (D.D.C.2003); see also Hazardous Waste Treatment Council v. Reilly, 938 F.2d 1390, 1394 (D.C.Cir.1991) (holding that agency action is final—and thus has legal effect—only if taken by officials possessing properly delegated authority). Thus, a court may uphold agency action only where the record establishes that the official who took such action was authorized to do so. See, e.g., East Hartford v. Harris, 648 F.2d 4, 6 (D.C.Cir.1980); Globe, Inc. v. Fed. Home Loan Bank Bd., 471 F.Supp. 1103, 1104–06 (D.D.C.1979); Marimont v. Califano, 464 F.Supp. 1220, 1223 n. 5 (D.D.C.1979). And these principles hold true for any federal statute, including the FIFRA.⁷ See Pac. Constr. Co. v. Branch, 428 F.Supp. 727, 728 (D.Guam 1976) (denying local entity authority to enforce terms of FIFRA absent proper delegation by EPA Administrator under 7 U.S.C. § 136t).

AMVAC argues that the official who signed the SSURO—in this instance, the Director of the W & C Division—did not possess properly delegated authority, rendering the agency's action invalid. P's Mtn. 29 n.20. To support this contention, AMVAC submits an internal EPA memorandum in which the Assistant Administrator for Enforcement and Compliance Assurance delegates authority under the FIFRA—including the power to issue SSUROs—to the Director of the Toxics and Pesticides Enforcement Division (“T & P Division”). P's App. 132. Perhaps owing to the relegation of this argument to a brief footnote in a 44–page brief, EPA did not respond to AMVAC's position concerning Director Kelley's authority to issue the SSURO at issue—an omission that naturally led the company to expand the argument on reply, and to insist that EPA waived any objection to vacating the SSURO. Reply in Support of Motion for Summary Judgment 44–45, Nov. 29, 2010[27]. EPA—conceding that it may have “misjudged” the importance of this issue, Reply in Support of Cross–Motion for Summary Judgment 12–13, Dec. 17, 2010[31] (“Cross–Mtn. Reply”)—finally addresses the matter of delegation in its own reply brief, submitting three documents which, according to the Agency, permit the Court to trace the power to issue SSUROs from the EPA Administrator to the Director of the W & C Division. Id. at 13. In light of this new evidence, AMVAC submits—without objection from the Agency—a surreply on the delegation question. Surreply in Support of Motion for Summary Judgment 2–4, Feb. 23, 2011[37]. In its surreply, AMVAC makes three arguments: first, EPA waived any opportunity to respond to the delegation argument, id. at 2–4; second, two of the documents submitted by the Agency are not official agency materials and thus not subject to judicial notice, id. at 5–6; and third, the three documents submitted do not, as a factual matter, establish that the Director of the W & C Division properly possesses authority under the FIFRA to issue...