Reckitt Benckiser Inc. v. Envtl. Prot. Agency

Decision Date16 July 2010
Docket NumberNos. 09-1314, 09-5437.,s. 09-1314, 09-5437.
PartiesRECKITT BENCKISER INC., Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
CourtU.S. Court of Appeals — District of Columbia Circuit

OPINION TEXT STARTS HERE

On Petition for Review of a Final Action of the Environmental Protection Agency and Appeal from the United States District Court for the District of Columbia (1:09-cv-00445).

Lisa S. Blatt argued the cause for petitioner/appellant. With her on the briefs were Ronald A. Schechter, Lawrence E. Culleen, and Michael R. Hartman.

Lynn L. Bergeson, Timothy D. Backstrom, and Steven Schatzow were on the brief for amici curiae Liphatech, Inc. and Woodstream Corporation in support of petitioner/appellant.

Sambhav N. Sankar, Attorney, U.S. Department of Justice, argued the cause for respondent/appellee. With him on the brief were Lisa E. Jones, Robert P. Stockman, and Stephanie J. Talbert, Attorneys. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

Before ROGERS, TATEL and GRIFFITH, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge.

Reckitt Benckiser, Inc. manufactures pesticides that are subject to regulation under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. §§ 136-136y. On May 28, 2008, the Environmental Protection Agency issued a Risk Mitigation Decision for Ten Rodenticides (the “RMD,” revised June 24, 2008) 1 and notified the company in August 2008 that its registered products containing these rodenticides would be considered misbranded on June 14, 2011, unless certain product changes were made. The company notified EPA that it did not intend to make the changes and instead intended to challenge the RMD through the registration cancellation procedures of FIFRA Section 6, 7 U.S.C. § 136d. When EPA did not expeditiously commence cancellation proceedings, the company filed suit seeking declaratory and injunctive relief on the ground EPA could not bypass such proceedings and treat registered products as misbranded for failure to comply with the RMD. The district court dismissed the complaint for lack of subject matter jurisdiction. The company appeals, and we hold that there was sufficiently final agency action ripe for review, see Ciba-Geigy Corp. v. U.S. EPA, 801 F.2d 430 (D.C.Cir.1986), and also that the district court had jurisdiction pursuant to FIFRA Section 16(a), 7 U.S.C. § 136n(a). Accordingly, we reverse and remand.

I.

The statutory framework for EPA's issuance of the RMD is as follows. FIFRA provides that pesticides sold or distributed in the United States must be registered with EPA. Id. § 136a(a). A FIFRA registration is a product-specific license describing the terms and conditions under which the product can be legally distributed, sold, and used. See id. § 136a(a), (c)-(e). EPA can only register a pesticide upon determining that “it will perform its intended function without unreasonable adverse effects on the environment” and that “when used in accordance with widespread and commonly recognized practice it will not generally cause unreasonable adverse effects on the environment.” Id. § 136a(c)(5)(C), (D).

In 1978, Congress required EPA to “reregister” all pesticides “in the most expeditious manner practicable” and to give priority to food applications. Act of Sept. 30, 1978, Pub.L. 95-396, § 8, 92 Stat. 819, 827 (1978) (amending FIFRA). Congress enacted FIFRA Section 4 in 1988, setting out the detailed reregistration procedures for pesticides whose active ingredients were first registered in a pesticide before November 1, 1984. See 7 U.S.C. 136a-1(a). Reregistration under Section 4 involves five phases, and in phase five EPA determines whether a particular active ingredient is eligible for reregistration. See id. § 136a-1(g)(2)(A). If EPA determines not to reregister a pesticide, it “shall take appropriate regulatory action ... as expeditiously as possible.” Id. § 136a-1(g)(2)(D). “Any failure of the Administrator to take any action required by” Section 4 is subject to judicial review “under the procedures prescribed by section 136n(b) for review in a court of appeals. Id. § 136a-1(m) 2 ; see infra note 3.

A pesticide product remains registered until EPA or the registrant cancels it pursuant to Section 6, 7 U.S.C. § 136d. Under Section 6, when it appears to EPA that a registered pesticide or its labeling does not comply with FIFRA or “generally causes unreasonable adverse effects on the environment,” EPA “may” bring cancellation proceedings, id. § 136d(b), in which the registrant has the right to demand a hearing before an Administrative Law Judge (“ALJ”) and can present evidence and argue for continued registration of its product, id. § 136d(b), (d); see 40 C.F.R. § 164.80(b). Registrants can seek review of a cancellation decision by filing a petition for review in a court of appeals pursuant to Section 16, see 7 U.S.C. § 136n(b). 3 Subject to certain exceptions, Section 16 provides that parties may obtain district court review of EPA's refusal to cancel a registration. See id. § 136n(a).

FIFRA Section 12 prohibits the sale or distribution of registered but “misbranded” pesticides, id. § 136j(a)(1)(E), defined to include registered pesticides whose packaging does not adequately prevent against accidental ingestion, see id. § 136(q)(1)(B), or whose labels do not contain directions or warnings “adequate to protect health and the environment,” id. § 136(q)(1)(F), (G). EPA has several options for addressing pesticide products it concludes are misbranded: EPA can assess civil administrative penalties against anyone who distributes a misbranded pesticide, see id. § 136 l (a); the charged party has a right to hearing in which EPA must persuade an ALJ that the person violated FIFRA, see id. § 136 l (a)(3); 40 C.F.R. § 22.24. EPA can pursue a criminal misbranding action, in which it bears the burden to prove a violation beyond a reasonable doubt. See id. § 136 l (b). EPA also can issue, pursuant to FIFRA Section 13, “stop sale, use, or removal” orders and can commence court proceedings to seize the pesticide. See id. § 136k(a), (b). 4

EPA issued the RMD on May 28, 2010 (as revised June 24, 2008) as “the Agency's final decision on the reregistration eligibility of rodenticide products” that contained “one or more” of ten active ingredients, 5 and also “the Agency's final action in response to the remand order” in West Harlem Environmental Action v. EPA, 380 F.Supp.2d 289, 296 (S.D.N.Y.2005). RMD at 1. In seeking to minimize children's exposure to rodenticide products containing the ingredients, the RMD required such products to be marketed in bait stations, e.g., as solid bait in tamper-resistant containers, rather than as loose pellets or meal. See RMD at 1, 11. Seeking to minimize wildlife exposure to and ecological risks from the ingredients, the RMD prohibited marketing to general consumers for residential use any rodenticide containing the second-generation anticoagulants brodifacoum, bromadiolone, difenacoum, or difethialone. See id. at 2, 16. The RMD also set restrictions on the weight, labeling, and distribution of products containing one of the ten rodenticides. See, e.g., id. at 17-19. The RMD stated that affected products otherwise “would present unreasonable risks inconsistent with FIFRA.” Id. at 25. The RMD warned that EPA “may take regulatory action to address the risk concerns from the use of the affected products” if a registrant failed to comply with the RMD, and that while EPA “may initiate cancellation actions” against products whose manufacturers did not voluntarily comply with the RMD, [r]odenticide products that do not comply with this Risk Mitigation Decision that a registrant releases for shipment after June 4, 2011, would be considered misbranded.” Id. at 25-26 (emphasis added). In other words, EPA considered products covered by the RMD misbranded as of the date of the RMD, but provided a three-year “grace period” for compliance before registrants would be subject to misbranding actions. Oral Arg. 12:55-13:28; 25:35-52.

Reckitt Benckiser markets to consumers, under the brand name d-CON®, registered rodenticide products that contain ingredients prohibited by the RMD or contain ingredients allowed by the RMD but in a pellet form prohibited by the RMD. On June 18, 2008, by certified mail, EPA notified the company of the RMD, described procedures for responding, and repeated the RMD's warnings that [r]odenticide products that do not comply ... that a registrant releases for shipment after June 4, 2011, would be considered misbranded (emphasis added) and that EPA “will initiate cancellation actions against products for which it does not receive notification of the registrant's intent to comply.”

6 The company responded that it did not intend to comply with the RMD, 7 and requested that EPA “expeditiously commence” cancellation pursuant to Section 6 for Reckitt Benckiser's products affected by the RMD. 8 When EPA did not do so, the company filed suit on March 3, 2009, for injunctive and declaratory relief, seeking an order directing EPA to begin cancellation proceedings and enjoining EPA from beginning misbranding proceedings prior to their completion. The district court dismissed the complaint for lack of subject matter jurisdiction, concluding that the company's claims arose under the reregistration provisions of Section 4 and thus invoked the judicial review provisions of Section 4(m), 7 U.S.C. § 136a-1(m), which provides for initial review in the court of appeals.

The company appeals, and in the alternative filed a petition in this court seeking review of EPA's failure to act pursuant to FIFRA; this court consolidated the cases. Our review of the dismissal of the complaint is de novo. See Am. Fed'n of Gov't Employees v. Nicholson, 475 F.3d 341, 347 (D.C.Cir.2007).

II.

Reckitt Benckiser's lawsuit challenges neither the substance of the RMD nor EPA's...

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