Source: https://law.justia.com/cases/federal/appellate-courts/F2/682/419/278380/
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Matched Legal Cases: ['§ 136', '§ 3', '§ 10', '§ 136', '§ 136', '§ 136', '§ 136', '§ 3', '§ 136', '§ 136', '§ 136', '§ 3', '§ 136', '§ 3', '§ 136', '§ 162', '§ 136', '§ 136', '§ 136', '§ 553', '§ 706', '§ 553', '§ 553']

United States Court of Appeals,third Circuit, 682 F.2d 419 (3d Cir. 1982) :: Justia
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United States Court of Appeals,third Circuit, 682 F.2d 419 (3d Cir. 1982)
US Court of Appeals for the Third Circuit - 682 F.2d 419 (3d Cir. 1982) Argued April 28, 1982. Decided June 22, 1982
Three cases have been consolidated here. In the suit brought in the Eastern District of Pennsylvania, Pennwalt Corporation challenged the constitutionality of the 1978 amendments to FIFRA, 7 U.S.C. § 136 et seq., but the district court granted summary judgment in favor of the EPA. Mobay Chemical Corporation mounted a similar attack in the Western District of Pennsylvania, and questioned certain implementing regulations promulgated in 1979 by the EPA. After trial, the district court upheld the statute and regulations. Mobay Chemical Corp. v. Costle, 517 F. Supp. 254 (W.D. Pa. 1981). In a separate action, the court modified an injunction against the EPA entered in Mobay Chemical Corp. v. Costle, 447 F. Supp. 811 (W.D. Mo. 1978), before the 1978 amendments were enacted and before the case had been transferred to Pennsylvania. Because the 1978 legislation authorized what the Missouri court had enjoined, the injunction was modified to reflect the statutory changes. Mobay Chemical Corporation v. Costle, 517 F. Supp. 252 (W.D. Pa. 1981).
As amended by the Federal Environmental Pesticide Control Act of 1972, FIFRA permitted applicants to designate portions of their data as trade secrets and prohibited the EPA from disclosing this information. Section 10(a) & (b), Pub. L. No.92-516, 86 Stat. 973 (1972). In addition, the statute was changed so that data submitted in support of an application could not be considered by the agency in support of a subsequent application, unless two conditions were met. First, the later applicant had to compensate the original submitter for use of the data, and second, the original submitter did not designate the data as trade secrets. § 3(c) (1) (D). The 1975 amendments to this section further limited the protection against use of information to data submitted on or after January 1, 1970. Act of Nov. 28, 1975, Pub. L. No. 94-140, 89 Stat. 755 (1975).
The Federal Pesticide Act of 1978 removed the trade secret protection over test data provided by § 10(b) of the earlier legislation. Pub. L. No.95-396, 92 Stat. 819 (1978). Applicants were granted a 10-year period of exclusive use for information about new chemicals contained in pesticides registered after September 30, 1978. Section 3(c) (1) (D) (i), 7 U.S.C. § 136a(c) (1) (D) (i). But the EPA may, without the permission of the original applicant, use data presented after December 31, 1969, which is not entitled to exclusive use, in support of another application for 15 years following the original submission. In this event, the later applicant must offer to compensate the original submitter. Section 3(c) (1) (D) (ii), 7 U.S.C. § 136a(c) (1) (D) (ii). If the parties cannot agree on the amount of compensation, either may initiate binding arbitration proceedings. Id. No limitation exists on the EPA's use of data that does not qualify for either the 10-year period of exclusive use or the 15-year period of compensation. Section 3(c) (1) (D) (iii), 7 U.S.C. § 136a(c) (1) (D) (iii).
The 1978 amendments also provide for broader disclosure of test data. The EPA may make available to the public any information about the safety and efficacy of pesticides. Section 10(d), 7 U.S.C. § 136h(d). See also, § 3(c) (2) (A), 7 U.S.C. § 136a(c) (2) (A). If necessary, the agency also may disclose trade secret data to contractors with the United States, so long as adequate security measures are taken. Section 10(e), 7 U.S.C. § 136h(e). The EPA may not, however, disclose data to foreign or multinational pesticide producers, unless the original submitter consents. Section 10(g), 7 U.S.C. § 136h(g).
We have reviewed the statutory amendments only briefly because the challenges made to the constitutionality of the use provisions mirror the contentions advanced in Chevron Chemical Co. v. Costle, 641 F.2d 104 (3d Cir.), cert. denied, 452 U.S. 961, 101 S. Ct. 3110, 69 L. Ed. 2d 972 (1981). There, we reviewed at length the legislative history of the amendments and their predecessors, and analyzed the claims of property deprivation. We rejected the constitutional challenges, concluding that, in the "use" context, applicants do not have a property interest in data submitted to the EPA beyond that conferred by FIFRA itself.
In Corn Products Refining Co. v. Eddy, 249 U.S. 427, 39 S. Ct. 325, 63 L. Ed. 689 (1919), the Supreme Court had no difficulty in rejecting a taking challenge to a statute requiring disclosure of the confidential formula of a food product. After observing that the purpose of the law was to prevent adulteration and misbranding that might mislead purchasers as to the wholesomeness of the product, the Court said:
249 U.S. at 431-32, 39 S. Ct. at 327. See also National Fertilizer Association v. Bradley, 301 U.S. 178, 57 S. Ct. 748, 81 L. Ed. 990 (1937). The same principle requires us to reject Pennwalt's and Mobay's attacks on FIFRA's disclosure provision as well.
Mobay's final constitutional challenge is that FIFRA § 3(g), 7 U.S.C. § 136a(g), which directs the EPA to re-register all pesticides "in the most expeditious manner practicable," deprives the company of its right to compensation for data that other applicants relied on in obtaining twenty-three previous registrations. In Mobay Chemical Corp. v. Costle, 447 F. Supp. 811 (W.D. Mo. 1978), the Missouri district court decided that the EPA violated the data compensation requirements of the 1972 amendments by failing to require other companies to compensate Mobay for the use of its data. The court refused to declare the registrations invalid, however, because Mobay would be compensated upon re-registration. At the time the Missouri court decided the case, the statute provided that re-registration was to be completed by October 21, 1977. The 1978 amendments removed this deadline, and Mobay asserts that this change is an uncompensated taking.
The district court for Western Pennsylvania held that the delay caused by the 1978 amendment does not amount to a constitutional violation. We agree, and note that the Missouri court did not rely on a set date for the completion of re-registration. On the contrary, that court knew that the process was behind schedule, observing that the statutory deadline had already passed. 447 F. Supp. at 823 n.18.
As part of its program to implement the 1978 amendments, the EPA adopted a policy of generally granting only "conditional registrations" under FIFRA § 3(c) (7), 7 U.S.C. § 136a(c) (7). 40 C.F.R. § 162.7(d) and (e). The agency wanted to use a new approach, known as the "generic standards system," in considering registration and re-registration. 44 Fed.Reg. 76311-12 (Dec. 26, 1979). Under this system, the EPA intends to develop standards for each group of pesticide products containing the same active ingredient. Completion of the generic standards process is expected to take at least 10 years. In the meantime, only conditional registrations will be granted.
Mobay contends that FIFRA compels the EPA to review its data after receipt of an application and, as expeditiously as possible, either unconditionally register the pesticide, or deny the registration. Section 3(c) (3), (5), and (6), 7 U.S.C. § 136a(c) (3), (5), and (6). The district court held, however, that the EPA's conditional registration policy does not contravene the statute.
Mobay contends that the "cite all" regulations violate FIFRA because the statute allows an applicant a choice of three alternate methods of support. Section 3(c) (1) (D), 7 U.S.C. § 136a(c) (1) (D). He may (1) proffer his own test data, "or alternatively" (2) cite that appearing in the public literature, or (3) rely on information previously submitted to the EPA. Since Mobay believes that its own data is adequate to support its applications, it would not choose to cite that of, and pay compensation to, other manufacturers.
Mobay also complained that an EPA data compensation regulation misconstrues the "formulator's exemption" created by the Act. Section 3(c) (2) (D), 7 U.S.C. § 136a(c) (2) (D). This provision applies to an applicant who seeks to register an enduse product that incorporates a previously registered pesticide purchased from another manufacturer. The end-use applicant is not required to submit or cite data for the incorporated pesticide, nor to offer to pay compensation for the use of previously submitted data.
We need not decide whether the conditional registration and "cite all" regulations are an unreasonable interpretation of FIFRA because we accept Mobay's contention that the regulations were promulgated in violation of the notice-and-comment and effective date requirements of the Administrative Procedure Act. 5 U.S.C. § 553(b) and (d), and § 706(2) (D).
The EPA recognized that the data compensation regulations "differ significantly" from those proposed in June 1977. 44 Fed.Reg. 27950-51. Nevertheless, it invoked the "good cause" exception to the APA's notice-and-comment requirements on the grounds that reproposal would be "contrary to the public interest" because of the long delay it would cause in resuming the registration program. 5 U.S.C. § 553(b) (B). The EPA justified its action by noting that a working draft was circulated in October and public meetings were held in November 1978, and said it would revise the regulations to the extent appropriate, as judged by its experience and by comments received. Finally, the agency found that these same reasons constituted "good cause" for making the regulations effective immediately, instead of observing the 30-day period between publication and effective date that is otherwise required. 5 U.S.C. § 553(d) (3).
"42. Section 3(c) (1) (D) of the Act provides three distinct methods by which an applicant may satisfy the Act's requirements for data to support his application.
The option to support an application by any of the methods provided in Section 3(c) (1) (D) of the Act lies with the applicant