Monsanto Co. v. Ruckelshaus

• Decision Date: 24 January 1985
• Docket Number: No. 84-1024,84-1024
• Citation: 753 F.2d 649
• Parties: MONSANTO COMPANY, Appellee, v. William RUCKELSHAUS, Administrator, Environmental Protection Agency, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 649

753 F.2d 649

22 ERC 1169

MONSANTO COMPANY, Appellee, v. William RUCKELSHAUS, Administrator, Environmental Protection

Agency, Appellant.

No. 84-1024.

United States Court of Appeals,

Eighth Circuit.

Submitted June 12, 1984.

Decided Jan. 24, 1985.

John A. Bryson, Washington, D.C., for appellant.

Gary S. Dyer, Kansas City, Mo., for appellee.

Before BRIGHT, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, McMILLIAN, Circuit Judge.

McMILLIAN, Circuit Judge.

The Environmental Protection Agency (EPA) appeals from an order entered in the District Court for the Eastern District of Missouri granting permanent injunctive relief. The district court enjoined EPA and the Scientific Advisory Panel (SAP) from further consideration of a pesticide registration application submitted by an unidentified applicant until EPA discloses to Monsanto Co. the identity of the applicant and the active ingredient of the pesticide. Pursuant to a consent decree, EPA and Monsanto established the SAP and designated review by the SAP as a remedy to any competitive harm Monsanto may have suffered as a result of EPA's admittedly improper disclosure of certain information provided by Monsanto to EPA in connection with Monsanto's registration of its commercially successful herbicide Roundup. EPA argues that the district court improperly modified the terms of this consent decree in granting permanent injunctive relief because Monsanto had not met the heavy burden of showing the necessity of the modification. In addition, EPA argues that the district court misunderstood the nature of SAP review and ignored Monsanto's waiver of the information in the consent decree. Finally, EPA argues that the district court did not fully consider statutory provisions prohibiting disclosure by EPA of confidential information of registration applicants. For the reasons discussed below, we reverse the order of the district court.

This proceeding arose out of Monsanto's constitutional challenge ¹ of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), as amended, 7 U.S.C. Sec. 136 et seq. (1982). FIFRA authorized EPA to consider one company's submitted registration data in support of another company's registration application for a similar chemical, subject to certain restrictions. ² During the pendency of Monsanto's constitutional action, the district court entered a pretrial order to protect Monsanto's registration application information from disclosure by EPA to other applicants. The order required EPA to give Monsanto sixty days notice and to disclose to Monsanto the identity of the entity seeking disclosure before EPA could disclose the information. FIFRA prohibits the disclosure of information that "contains or relates to trade secrets or commercial or financial information." Id. Sec. 136h(b). Contrary to the district court's order and FIFRA, EPA disclosed confidential information submitted in connection with Monsanto's registration of its commercially successful herbicide Roundup to a Washington, D.C., attorney who had filed a request for the information under the Freedom of Information Act (FOIA), 5 U.S.C. Sec. 552(a) (1982). This disclosure was admittedly improper.

Monsanto then obtained an order from the district court requiring EPA to show cause why the court should not hold EPA in contempt. The district court ordered EPA to retrieve the improperly disclosed documents and also ordered the Washington attorney to return the documents and all copies of the documents. The attorney did so and submitted an affidavit attesting that neither he nor his client had retained any copies of the documents. In addition, the district court required the attorney to disclose the identity of his client. The attorney refused on the grounds of attorney-client privilege.

On August 31, 1982, after a period of negotiation, Monsanto and EPA entered into a consent decree, which the district court later approved and entered as a final judgment. The consent decree established a remedy for any competitive harm Monsanto may have suffered as a result of EPA's improper disclosure of the Roundup information. The purpose of the agreement was to prevent EPA approval of registration applications for any pesticide that a new applicant may have developed through the use of Monsanto's confidential information about Roundup. The consent decree provided that EPA would screen all registration applications received after May 7, 1982, for products that have the same or similar active ingredient as that in Roundup. EPA would then divert all such registration applications to the SAP to determine "whether the materials submitted with the covered applications have been developed independently of the disclosed information." Monsanto Co. v. Gorsuch, No. 79-0366-C(1), slip op. at 2 (E.D.Mo. Aug. 31, 1982) (consent decree). Although EPA notified Monsanto when it diverted registration applications to the SAP and although Monsanto had the right to "make presentations" to the SAP, the consent judgment did not give Monsanto the right to a full-scale adversarial proceeding at which Monsanto could challenge the independent development of products diverted to the SAP review.

Importantly, Monsanto waived access "to the other's [the applicant who EPA had referred to SAP review] data or formula information without the other's consent." Id. at 3. Moreover, the consent decree expressly recognized that "all deliberations of the [SAP] shall be in executive session." Id. In other words, the SAP review was not to be open to the public or to the parties. The consent decree relied upon the SAP's independent judgment and expertise to determine whether the applicant developed the product independent of Monsanto's data and did not rely upon the parties' presentations to sharpen the issues.

According to the consent decree, if a majority of the SAP determined that the registration application contained only information that the applicant had developed independently of the improperly disclosed information, then EPA would "formally accept" the registration application and the normal registration process would proceed. Id. If the SAP found that any of the information in the registration application had not been developed independently, EPA would refuse to accept the registration application unless EPA determined that the SAP did not have sufficient information before it to support its conclusion. Id.

On August 22, 1983, EPA notified Monsanto that it had received a pesticide registration application for a product containing an active ingredient similar to that in Roundup and that, pursuant to the terms of the consent decree, it had referred the application to the SAP. Monsanto then requested EPA to disclose the identity of the applicant and the active ingredient to aid it in the development of its presentation to the SAP. Both EPA and the SAP refused this request, asserting that nondisclosure was necessary to maintain the confidentiality of the applicant under the consent decree and FIFRA. Monsanto then obtained a temporary restraining order (TRO) that prevented further consideration of the registration application by the SAP until EPA provided Monsanto with a "more appropriate and complete submission." ³

Because the TRO did not specifically require EPA to disclose the identity of the applicant and the active ingredient and because the applicant asserted the confidentiality of such information, EPA determined that it would be premature to disclose the information. The district court then made the temporary order permanent, finding that EPA's refusal to disclose the requested information denied Monsanto due process. Monsanto Co. v. Ruckelshaus, No. 79-0366-C(1), slip op. at 6 (E.D.Mo. Nov. 2, 1983) (injunction). Although the district court's order did not specifically require EPA to disclose the applicant's identity and the active ingredient, the parties agree that in order to comply with the injunction EPA would have to disclose the registration application and supporting submission in a substantially unedited form.

Modification of the Consent Decree

The district court has inherent equitable powers to modify a consent decree, whether the parties entered into the decree after negotiation or litigation, upon a showing of changed circumstances which cause such extreme and unexpected hardship that the decree is oppressive. United States v. Swift & Co., 286 U.S. 106, 114, 52 S.Ct. 460, 462, 76 L.Ed. 999 (1932) (Swift ); Humble Oil & Refining Co. v. American Oil Co., 405 F.2d 803, 813 (8th Cir.), cert. denied, 395 U.S. 905, 89 S.Ct. 1745, 23 L.Ed.2d 218 (1969). A court may modify the parties' rights and obligations under a consent decree if it finds that the judgment has become "void" or that it is "no longer equitable." Fed.R.Civ.P. 60(b)(4), (5). See also United States v. Atlantic Refining Co., 360 U.S. 19, 23, 79 S.Ct. 944, 946, 3 L.Ed.2d 1054 (1959) (modification of consent decree); EEOC v. Safeway Stores, Inc., 611 F.2d 795, 798-99 (10th Cir.1979), cert. denied, 446 U.S. 952, 100 S.Ct. 2918, 64 L.Ed.2d 809 (1980). Modification of a consent decree involves the granting of extraordinary relief. See, e.g., Philadelphia Welfare Rights Organization v. Shapp, 602 F.2d 1114, 1120-21 (3d Cir.1979). In addition to the power to modify the consent decree, a court has the power to interpret vague or confusing language to implement the purposes of the decree. See Pasadena City Board of Education v. Spangler, 427 U.S. 424, 438, 96 S.Ct. 2697, 2705, 49 L.Ed.2d 599 (1976); Brown v. Neeb, 644 F.2d 551, 559-60 (6th Cir.1981).

The consent decree between Monsanto and EPA neither required EPA to disclose the identity of the applicant and the active ingredient to Monsanto nor prohibited such a disclosure. The consent decree does allow Monsanto to make a presentation to the SAP, but it does not allow Monsanto access to the applicant's data or formula information. Moreover, Monsanto and EPA agreed that the SAP...