Monsanto Co. v. Acting Adm'r, United States EPA, 79-366C (1).

Citation564 F. Supp. 552
Decision Date12 April 1983
Docket NumberNo. 79-366C (1).,79-366C (1).
CourtUnited States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)

Gary Dyer, Kansas City, Mo., Kenneth Heineman, St. Louis, Mo., W. Wayne Withers, Monsanto Agricultural Prod. Co., St. Louis, Mo., for plaintiff.

Joseph B. Moore, Asst. U.S. Atty., St. Louis, Mo., Patrick J. Cafferty, Atty., Pollution Control Section, U.S. Dept. of Justice, Washington, D.C., for defendant.


WANGELIN, Chief Judge.

This matter is before the Court for a decision on the merits after a bench trial which spanned weeks and generated a 690 page transcript, numerous depositions, exhibits and affidavits. At issue is the constitutionality of Sections 3(c)(1)(D), 3(c)(2)(A) and Sections 10(b) and 10(d) of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), as amended in 1978, 7 U.S.C. § 136 et seq. Plaintiff seeks an injunction and declaratory judgment blocking operation of the Sections in question. Both parties have ably presented and briefed their respective positions and have provided the Court with a concise and thorough foundation for its decision.

Pursuant to Rule 52 of the Federal Rules of Civil Procedure, the Court hereby makes the following findings of fact and conclusions of law. Any finding of fact equally applicable as a conclusion of law is hereby adopted as such and, conversely, any conclusion of law applicable as a finding of fact is adopted as such.

Findings of Fact

1. Plaintiff, Monsanto Company, is incorporated in the State of Delaware and has its principal place of business in St. Louis County, Missouri. Plaintiff owns and operates its principal corporate and administrative offices, and its major research facilities in St. Louis County, Missouri. It is licensed to do business in the State of Missouri and resides in this judicial district.

2. Defendant is the Acting Administrator of the United States Environmental Protection Agency (hereinafter EPA), and is charged with the implementation, administration and enforcement of the Federal Insecticide, Fungicide and Rodenticide Act. Defendant is sometimes hereinafter referred to as the "Administrator".

3. Since FIFRA was first enacted in 1947, it has required the registration of all pesticides shipped in interstate commerce. In order to obtain the registration of a pesticide under FIFRA an applicant was required to support its application for registration with extensive research and test data demonstrating that the product would comply with FIFRA, that is, that the pesticide was effective for its recommended uses, and that it would perform its intended functions without unreasonable adverse effects on man, vertebrate animals and desirable vegetation. If use of the pesticide for which registration was sought could result in residues in or on raw agricultural commodities, the applicant was also required to submit in support of its application for registration extensive research and test data relating to the proposed application of the pesticide, its toxicity, the manner in which it was metabolized, its degradation, and its residues. This information was also required to be submitted in a petition for a tolerance for the pesticide for which registration was sought.

Until 1970, the Secretary of the United States Department of Agriculture (hereinafter USDA) administered FIFRA. Also, until 1970, the Secretary of Health, Education and Welfare, by and through the Food and Drug Administration (hereinafter FDA), was authorized to establish tolerances for pesticide chemicals in or on raw agricultural commodities under Section 408 of the Food, Drug and Cosmetic Act, 21 U.S.C. § 346a. These administrative functions of the USDA and FDA were transferred to EPA in December, 1970, by Reorganization Plan No. 3 of 1970, 35 Fed.Reg. 15623 (1970).

4. The term "pesticide" is defined in Section 2(u) of FIFRA to mean (1) any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any pest, and (2) any substance or mixture of substances intended for use as a plant regulator, defoliant, or dessicant." (FIFRA Section 2(u)).

The person holding the registration that permits the product to be sold or distributed is known as a "registrant."

5. One of the two basic kinds of pesticide products is an "end-use product" or "formulated product" designed to be used as sold or after dilution by the user against pests. An end use product contains at least one active ingredient which is defined in Section 2(a) of FIFRA as "an ingredient which will prevent, destroy, repel or mitigate any pest" or which will defoliate, dessicate or regulate the growth of plants. In order for an end use product to be used against pests and plants the active ingredient normally must be combined with "inert ingredients" which dissolve, dilute or stabilize the active ingredient or otherwise improve its pesticidal performance.

6. A second basic kind of pesticide product is a "manufacturing-use product" which is a product designed to be used to manufacture an end use product. A manufacturing use product generally is a relatively pure form of the active ingredient and is sometimes referred to as a technical product.

7. Approximately 40,000 pesticide products are currently registered under FIFRA. Most of these registered products are end use products (about 2,500 are registered for manufacturing use). Many of these end use products are very similar, containing the same active ingredient and closely similar inert ingredients.

8. A relatively few firms actually produce all the active ingredients. Of the more than 4,000 registrants, therefore, most are engaged in producing end-use products, using active ingredients they purchase (these firms are usually referred to as "formulators"). Some firms, such as Monsanto, produce both active ingredients and end-use products. A firm which produces an active ingredient may use it solely for incorporation into its own end-use products, may sell it (in the form of a manufacturing-use product) to formulators, or may do both.

9. Most of the research and testing on pesticides, and invention and development of new active ingredients, has been done by a few, relatively large companies of which Monsanto is one. Most, if not all, firms of this type, including Monsanto, are engaged in foreign or multinational pesticide sales.

10. Monsanto is involved in research and development activities to attempt to develop new pesticide products. These research and development efforts have resulted in the expenditure of millions of dollars by Monsanto and their efforts have resulted by the granting of patents for many of the new active ingredients which Monsanto has developed.

11. A company's decision to develop pesticides requires it to make major commitments long before it can anticipate developing a commercial pesticide and even longer before it can expect any return on its investment. First, the company must synthesize, test and evaluate candidate pesticides typically for 4 to 8 years before it will identify a commercial candidate. It must then conduct extensive research for at least 6 additional years, including 2 years to obtain registration, before it can anticipate first marketing a product. Generally, a further 4 to 8 years will elapse before that product reaches a point where its costs of discovery, development and commercialization have been recovered. Second, the company must commit to the employment of a large scientific research group representing many disciplines, and to the acquisition of the necessary physical facilities and sophisticated equipment to conduct the intensive research required to assure some reasonable probability of success in discovering and commercializing a candidate pesticide. Third, any such company must usually commit to the expenditure of $5 million to $15 million annually for several years before it will develop a potential commercial pesticide candidate. Even then, it will not know whether the candidate will become a commercial product until it has conducted further evaluation for an additional four or more years. This further evaluation could dictate that the candidate be rejected at any point during its development, even in the final year of its further evaluation. A key element in the above analysis is whether the chemical can be patented, thereby assuring Monsanto monopoly protection for the patented chemical, use or process during the period of the patent.

12. Once a target is selected, a company must devise extremely efficient, unique and technically sound ways of determining what compounds should be synthesized. The Company's chemists are not only concerned with synthesizing new chemicals, but equally important, are concerned with new chemical processes, techniques, and methods of synthesis to facilitate their invention of such new chemicals with commercial potential. Once a company decides that a new area of chemistry might be fruitful, these chemists then proceed to develop and synthesize new compounds in that area of chemistry. These new compounds are referred to biologists who determine whether they are biologically active and whether they are pesticide candidates. This biological information is crucial in making the difficult technical judgment whether a compound is worthy of further study. The biologists and the chemists then examine and discuss the results to determine which directions, if any, offer further leads. Using the knowledge obtained from these discussions, the chemists synthesize more new compounds in the directions in which leads are expected. This constant dialogue takes place between literally dozens of organic chemists and biologists and is what ultimately produces the lead which results in a new commercial pesticide.

Decisions on most of the thousands of chemicals synthesized by plaintiff are made after...

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