Schoenhofer v. McClaskey

• Decision Date: 03 July 2017
• Docket Number: No. 16-3226,16-3226
• Citation: 861 F.3d 1170
• Parties: Mary Ann SCHOENHOFER; Autumn L. Johnson; Ralph Rogerson, Plaintiffs–Appellants, v. Jackie MCCLASKEY, in her official capacity as Secretary of the Department of Agriculture of the State of Kansas, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

861 F.3d 1170

Mary Ann SCHOENHOFER; Autumn L. Johnson; Ralph Rogerson, Plaintiffs–Appellants,

v.Jackie MCCLASKEY, in her official capacity as Secretary of the Department of Agriculture of the State of Kansas, Defendant–Appellee.

No. 16-3226

United States Court of Appeals, Tenth Circuit.

FILED July 3, 2017

James T. McIntyre, Law Offices of James T. McIntyre, Wichita, Kansas, for Plaintiffs–Appellants.

John Wesley Smith, Assistant Attorney General, Office of the Attorney General Derek Schmidt, Topeka, Kansas, for Defendant–Appellee.

Before HARTZ, MATHESON, and McHUGH, Circuit Judges.

HARTZ, Circuit Judge.

Plaintiff Ralph Rogerson, a licensed pest-control applicator in Kansas, challenges a regulation of the Kansas Department of Agriculture, Kan. Admin. Regs. § 4–13–26 (2003), on the ground that it requires excessive pesticide treatment in preconstruction applications.¹ He filed suit for declaratory and injunctive relief against the Secretary of the Department, claiming that the regulation (1) is preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. §§ 136 –136y, because it conflicts with pesticide labels approved by the Environmental Protection Agency (EPA), and (2) is preempted by the Sherman Antitrust Act, 15 U.S.C. § 1, because it limits consumer choice and competition through retail price maintenance. The United States District Court for the District of Kansas rejected both claims, and Plaintiff appeals. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm. The Kansas regulation is neither expressly nor impliedly preempted by FIFRA. And Plaintiff has conceded the absence of an essential element of his Sherman Act claim.

I. DISCUSSION

The Kansas regulation requires both horizontal and vertical application of termite pesticides in preconstruction areas. It states in full:

In addition to the requirements of the label, each preconstruction application of pesticide for the control of termites shall consist of establishing both horizontal and vertical chemical barriers, as specified in this regulation.

(a) Horizontal chemical barriers shall be established in areas intended to be covered, including the soil beneath slab floors and porches, footing trenches for monolithic slabs, and the soil beneath stairs.

(b) Vertical chemical barriers shall be established in the soil around the base of foundations, plumbing fixtures, foundation walls, support piers, and voids in masonry, and any other critical areas where structural components extend below grade.

Kan. Admin. Regs. § 4–13–26 (emphasis added). According to Plaintiff, however, pesticide labels approved by the EPA under FIFRA do not require both horizontal and vertical application, nor do they require application to as many areas as the regulation requires. For example, as Plaintiff put it, an approved "label for I Maxx Pro [a pesticide used by Plaintiff] ... gives the applicator discretion to ... conduct either vertical or horizontal or both treatments," and "states that only construction objects such as pipes which penetrate the slab need treatment." Aplt. Br. at 13–14.² Also, he points out that the label, in accordance with the command of 40 C.F.R. § 156.10(i)(2)(ii), states: "It is a violation of Federal law to use this product in a manner inconsistent with its labeling." Pls.' Resp. to Def.'s Mot. to Dismiss at Ex. 3, Aplt. App. at 71. He complains that the Kansas regulation (1) endangers humans and the environment because it requires unnecessary use of dangerous pesticides, and (2) stifles competition by requiring all applicators to apply too much pesticide when some applicators could reduce their prices by applying only necessary pesticide.

Plaintiff raises two legal challenges to the regulation. Under FIFRA he contends that the regulation is preempted by federally approved labels for pesticides because it imposes stricter use requirements on pesticide applicators. And under the Sherman Antitrust Act he contends that the regulation is preempted because it is a covert price regulation that forces consumers to pay for unnecessary treatments and prohibits applicators from competing against each other (since all are required to offer the same unnecessary services).

A. FIFRA Claims

FIFRA is a "comprehensive regulatory statute" that regulates the sale, labeling, and use of pesticides. Bates v. Dow Agrosciences LLC , 544 U.S. 431, 437, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005) (internal quotation marks omitted). When a manufacturer wants to register a pesticide, FIFRA requires that a proposed label and supporting information be submitted to the EPA. See id. at 438, 125 S.Ct. 1788 (citing 7 U.S.C. § 136a(c)(1)(C), (F) ). The EPA will register the pesticide if the manufacturer meets certain conditions, such as showing that the product is effective and "will not cause unreasonable adverse effects on humans and the environment." Id. (citing § 136a(c)(5)(A), (C), (D) ; § 136(bb) ). The States, within limits, can also play a role. See id. at 439, 125 S.Ct. 1788. "A State may regulate the sale or use of any federally registered pesticide or device in the State, but only if and to the extent the regulation does not permit any sale or use prohibited by this subchapter." 7 U.S.C. § 136v(a). Further, "A State [under certain circumstances] may provide registration for additional uses of federally registered pesticides...." 7 U.S.C. § 136v(c)(1). For labeling, however, the statute requires national uniformity: "[A] State shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter." 7 U.S.C. § 136v(b) ; see Indian Brand Farms, Inc. v. Novartis Crop Prot. Inc. , 617 F.3d 207, 214 (3d Cir. 2010) ("the states have joint control with the federal government in regulating the sale and use of pesticides with only the exception of the EPA's exclusive supervision of labeling"). The reason for requiring uniformity in labeling, but not in other subjects of regulation, is a pragmatic one. State-by-state variation in how a pesticide is sold or used does not create any significant inconvenience. But not so for labeling requirements. As the Supreme Court expressed the point, "[I]magine 50 different labeling regimes prescribing the color, font size, and wording of warnings—that would create significant inefficiencies for manufacturers." Bates , 544 U.S. at 452, 125 S.Ct. 1788.

Plaintiff appears to raise two preemption arguments. One is based on the prohibition in § 136v(b) against "any requirements for labeling or packaging in addition to or different from those required under [FIFRA]." Plaintiff contends that this prohibition applies to the Kansas regulation because it is a labeling requirement, see Aplt. Br. at 16 (the Kansas regulation "is in essence a labeling requirement, since it controls the areas and structures to be treated in a manner which is inconsistent with the labels approved by the EPA"), and requires variations from the federal requirements. We disagree. The prohibition in § 136v(b) does not apply here. The Supreme Court has described the limits on "labeling or packaging" preemption:

For a particular state rule to be pre-empted, it must satisfy two conditions. First, it must be a requirement "for labeling or packaging "; rules governing the design of a product, for example, are not pre-empted. Second, it must impose a labeling or packaging requirement that is "in addition to or different from those required under this subchapter."

Bates , 544 U.S. at 444, 125 S.Ct. 1788. Though Plaintiff devotes most of his attention to the second condition, the first is not satisfied.

FIFRA defines label as "the written, printed, or graphic matter on, or attached to, the pesticide or device or any of its containers or wrappers." 7 U.S.C. § 136(p). And it defines labeling as "all labels and all other written, printed, or graphic matter—(A) accompanying the pesticide or device at any time; or (B) to which reference is made on the label or in literature accompanying the pesticide or device, except to [various described] current official publications."Id.

Under these definitions—or common usage for that matter—the Kansas regulation does not govern labeling. It governs use. It instructs termite-pesticide applicators how and where to apply the pesticide. It does not say a word about what to put in any "written, printed, or graphic matter" connected with a pesticide. The Supreme Court in Bates provided examples of rules not affected by § 136v(b) :

Rules that require manufacturers to design reasonably safe products, to use due care in conducting appropriate testing of their products, to market products free of manufacturing defects, and to honor their express warranties or other contractual commitments plainly do not qualify as requirements for "labeling or packaging." None of these common-law rules requires that manufacturers label or package their products in any particular way.

Bates , 544 U.S. at 444, 125 S.Ct. 1788 (emphasis added). The Kansas regulation is even further removed from the mandate of § 136v(b) because the regulation is addressed to those who apply pesticides—not to the manufacturers who package or label them. Recall that the need for national uniformity in labels and labeling is to avoid the "significant inefficiencies" if a manufacturer had to produce a different label on its product for each State. Id. at 452, 125 S.Ct. 1788. There is no need for such stringent uniformity with respect to applicators, who can readily adjust their operations for each State.

Alternatively, Plaintiff appears to argue that, apart from the express preemption language in § 136v(b), the state regulation is impliedly preempted. State law can be impliedly preempted when it conflicts with federal law. See Arizona v. United States , 567 U.S. 387, 399, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012). "This includes cases where compliance with both federal and state regulations is a physical impossibility, and...