Environmental

This edition of the Ag Law Harvest is heavily focused on recent environmental case law at the federal level.  Read on to find out how habitats, migratory birds, environmental and administrative laws, and Trump’s new Waters of the United States rule have fared in recent decisions. 

What does “habitat” mean to you? Think about it carefully, because now is your chance to provide your input to the U.S. Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS).  Readers of the blog may remember we reported on a Supreme Court case dealing with critical habitat under the Endangered Species Act (ESA) a few years ago.  The Supreme Court remanded the case back to the Fifth Circuit Court of Appeals.  The Court of Appeals was charged with interpreting the word “habitat.” The Court of appeals then punted the interpretation to the U.S. District Court for the Eastern District of Louisiana, where the parties settled the case.  Even with a settlement, the question of what “habitat” means remains.  To remedy this omission, the FWS and NMFS published a proposed rule on August 5^th to define “habitat” under the ESA.  In this proposal, FWS and NMFS put forward two possible definitions of “habitat”:

• The physical places that individuals of a species depend upon to carry out one or more life processes. Habitat includes areas with existing attributes that have the capacity to support individuals of the species; or
• The physical places that individuals of a species use to carry out one or more life processes. Habitat includes areas where individuals of the species do not presently exist but have the capacity to support such individuals, only where the necessary attributes to support the species presently exist.

The agencies are asking for public comment on the two definitions, and “on whether either definition is too broad or too narrow or is otherwise proper or improper, and on whether other formulations of a definition of ‘habitat’ would be preferable to either of the two definitions, including formulations that incorporate various aspects of these two definitions.” The comment period is open until September 4, 2020. 

Will a lawsuit stop planned changes to NEPA? At the end of July, a number of environmental groups banded together and filed a 180-page complaint against the U.S. Council on Environmental Quality (CEQ).  The complaint challenges the Council’s update to rules under the National Environmental Protection Act (NEPA).  The groups’ basic argument is that the CEQ, under the direction of the Trump administration, published a new administrative rule under NEPA, but did not follow the Administrative Procedure Act (APA), which governs agency actions, when doing so.  The lawsuit alleges: “[r]ather than make this drastic change deliberately and with the careful process the APA requires, CEQ cut every corner. The agency disregarded clear evidence from over 40 years of past implementation; ignored the reliance interests of the citizens, businesses, and industries that depend on full and complete NEPA analyses; and turned the mandatory public engagement process into a paper exercise, rather than the meaningful inquiry the law requires.” Basically, the groups argue that the administration ignored the APA all together.  Why is this important? The environmental groups argue that the new rule essentially makes it possible for the federal government to push through projects that might have impacts on citizens and the environment, such as pipelines and roadways, much more quickly, and without much input from the public.  You can read the final NEPA rule here.  We will have to wait and see whether the court agrees that the APA was violated in the creation of this rule. 

Ruling on Migratory Bird Act clips the administration’s wings. Another lawsuit against the federal government was decided on August 11, 2020.  The U.S. District Court for the Southern District of New York sided with a number states as well as environmental groups, including the Natural Resources Defense Fund and the National Wildlife Federation. The Court found that the U.S. Department of the Interior (DOI) and FWS (at the direction of the administration) could not overturn 50 years of DOI interpretations of what “killings” and “takings” of birds meant under the Migratory Bird Treaty Act of 1918 with a single memo. Traditionally, the killing or taking any migratory bird, even accidentally or incidentally, has been interpreted as a violation of the Act.  DOI’s memo sought to change this, only making the Act only apply to intentional hunting, killing, or taking.  Essentially, if a business or person had a pond full of wastewater, and migratory birds swam in it, eventually killing the birds, it would only be “incidental” taking and not intentional under DOI’s logic in the memo.  Ultimately, Judge Valerie Caproni channeled Atticus Finch by stating “It is not only a sin to kill a mockingbird, it is also a crime,” meaning that one memorandum could not overturn the fact that incidental and accidental takings of birds are still takings punishable by the Act. 

  Another WOTUS lawsuit bites the dust.  There’s always something going on with the Waters of the United States (WOTUS) rule.  In April, the Trump administration published its final rule on WOTUS, which replaced the Obama administration’s beleaguered rule from 2015.  Almost immediately, the rule was challenged in court by those who thought it went too far in protecting waters, as well as those who felt it didn’t go far enough.  The Oregon Cattlemen’s Association, which falls into the latter camp, filed suit against the EPA and the U.S. Army Corps of Engineers over the 2015 rule, later amending their complaint to address the 2020 rule.  The Association claimed that both the old and new rules went too far, and that EPA did not have the authority to carry them out under the Clean Water Act.  The judge dismissed the Association’s case without prejudice for lack of standing, meaning that the issue may be litigated again, but the Oregon Cattlemen’s Association could not show that its members are being negatively affected by the 2020 rule at this time. 

In a decision that turns largely on scientific methodology and reliable data, the Ninth Circuit Court of Appeals yesterday allowed continued registration of the Enlist Duo herbicide developed by Dow AgroScience (Corteva).  Unlike last month’s decision that vacated registrations of three dicamba herbicides, the two-judge majority on the court held that substantial evidence supported the EPA’s decision to register the herbicide.  Even so, the court sent one petition back to the EPA to further consider the impact of Enlist Duo on monarch butterflies in application areas. One dissenting judge would have held that the science used to support the Enlist Duo registration violates the Endangered Species Act.

The case began in 2014, when the same organizations that challenged the dicamba registrations (National Family Farm Coalition, Family Farm Defenders, Beyond Pesticides, Center for Biological Diversity, Center for Food Safety and Pesticide Action Network North America) and the Natural Resources Defense Council each filed petitions challenging the EPA’s registration of Enlist Duo.  The EPA later amended the registration in 2015 and 2017, eventually allowing use of the herbicide on corn, soybeans and cotton in 34 states.  The petitioners challenged the 2015 and 2017 registrations as well, and the Ninth Circuit consolidated the challenges into the case at hand.

The court’s opinion begins with an explanation of why it agreed with the parties who brought the challenges that they had the legal right to do so, or had “associational standing.”   Likely of higher interest to our readers is how the court answered the questions of whether the EPA adequately examined the potential impacts of Enlist Duo under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the federal Endangered Species Act (ESA).  Here’s what the court had to say about the petitioners’ claims under each law:

The FIFRA claims.  The monarch butterfly issue was the only successful FIFRA claim advanced by the petitioners.  The court agreed that the EPA didn’t properly assess adverse harm to monarch butterflies that would result from increased 2,4-D use on milkweed in application fields, despite evidence suggesting that the butterflies might be adversely affected.  The EPA stated that it didn’t do so because the approval of Enlist Duo would not change the amount of milkweed being controlled by herbicides—those milkweeds would still be controlled with or without Enlist Duo.  The court disagreed, stating that FIFRA required the agency to determine whether any effect was “adverse” before then determining whether the effect on the environment was unreasonable, which EPA didn’t do in regard to the monarch butterfly.

The court rejected all of the petitioners’ other arguments under FIFRA:

Applicable standards.  Several claims that the EPA applied the wrong FIFRA registration standards failed.  The agency correctly used the broader and more stringent standard, which was to determine whether the registration would cause any unreasonable adverse effects on the environment.   

Increased glyphosate use.  Petitioners also argued that the EPA erred in determining that approval of Enlist Duo would not cause unreasonable adverse effects on environment because glyphosate was already being used.  The registration would only impact which glyphosate was being used but not how much glyphosate was in use.  The court agreed with EPA’s assertion that due to the “nearly ubiquitous use” of glyphosate across the country before the approval of Enlist Duo registration, there would not be an increase in overall glyphosate use and no increased risks.   Interestingly, the court distinguished increased use from new data about glyphosate use, stating that “this does not mean, of course, that new data about glyphosate will go unconsidered….”

Volatility risk.  The court also rejected volatility risk arguments, one of the science-heavy parts of the opinion (begin at page 37 for a good read).  The EPA had concluded the type of 2,4-D in Enlist Duo exhibits lower volatility and off-site vapor drift than other forms of 2,4-D.  EPA reached this conclusion based several studies and data points:  a laboratory study that examined degree of visual damage, six publicly available studies assessing plant growth and survival damage, data from a vapor flux study used to perform computer modeling to determine dose level and air concentration in order to predict adverse damages to plants off-field, a second type of modeling that assesses drift of wet and dry depositions, and atmospheric monitoring data.  Petitioners claimed limitations to the studies and methodology used, contradictions between EPA scientists, failure to follow regulatory guidelines and to consider large enough field sizes in its modeling.  The court commented that the evaluation of volatility “probably could have been better,” but found no evidence showing that EPA’s conclusion was wrong or that volatility fears had materialized since approval of the herbicide.  The court explained that the agency may apply its expertise to draw conclusions from probative preliminary data and “it is not our role to second-guess EPA’s conclusion.” 

Mixing risks.  Petitioners also argued that Dow intended to mix Enlist Duo with glufosinate and EPA failed to account for the synergistic effect of such mixing.  With no evidence other than an abandoned patent application for a mixed product by Dow, the court held that FIFRA doesn’t require an analysis of theoretical tank mixing but only that which is contemplated on the label. 

Nearly all of the EPA’s FIFRA decisions were supported by substantial evidence, the court concluded, with the exception of the monarch butterfly analysis. 

The ESA claims.   Science is a recurring theme in the court’s analysis of the petitioners’ ESA arguments, and also the source of sharp disagreement on the court.  ESA’s section 7 requires a determination of the biological impacts of a proposed action.  ESA consultation among the agencies is required if determined that an agency’s action “may affect” a listed species or critical habitat in an “action area.”   The petitioners claimed that EPA failed in its determination on several grounds, requiring the court to review whether the EPA’s determination was arbitrary, capricious, an abuse of discretion, or contrary to law.  Here are the arguments, and the court’s responses:

“No effect” finding.  The petitioners argued that the EPA erred in determining that Enlist Duo approval would have “no effect” on plant and animal species and the court responded with another lengthy science-heavy discussion of “risk quotient” methodology and legal requirements  to use the “best scientific and commercial data available.”  The EPA employed a risk quotient methodology to conclude that there would be exposure to the herbicide but that such exposure would not lead to an effect on plants and animals.  The two judges in the majority were willing to defer to the agency on this conclusion and its dependence on the risk quotient methodology, but Judge Watford strongly disagreed.  Pointing out that the National Academy of Sciences had advised the EPA that the risk quotient method was “scientifically unsound,” the dissent concluded that the data derived from the methodology did not qualify as “scientific data” and therefore violated the ESA.   The majority stated that the risk quotient methodology doesn’t violate the duty to use the best scientific and commercial data available, which means that the EPA must not disregard available scientific evidence that is better and does not require the agency to conduct new tests or make decisions on data that doesn’t exist.   Deference to the agency was warranted, said the majority, and restraint against second guessing or using the court’s judgment.

Action area.   For its ESA determination, the EPA limited the “action area” to treated fields, while petitioners argued that the herbicide would drift beyond treated fields.  Again turning to the EPA’s science, the court held that the agency had science-based reasons for limiting the target area.  The EPA had appropriately accounted for drift through empirical data, mitigation measures, and label restrictions and no evidence in the record supported that the agency had made an error.

Critical habitat.  The final argument advanced by petitioners was that EPA did not meet its duty to insure that there would be no “adverse modification” of critical habitat from the registration.  Although there were 154 species with critical habitats in the states where Enlist Duo would be approved, EPA concluded that 176 of the species would not be in corn, cotton or soybean fields.  Of the eight species remaining, the agency determined that there would be no modification to their critical habitats as a result of Enlist Duo registration because none of the species’ essential features or “primary constituent elements” were related to agriculture.  Petitioners challenged the methodology EPA employed to reach this conclusion, but the court once again disagreed and deferred to the agency.

What remedy?

With only the monarch butterfly impact analysis in need of further study, the Ninth Circuit declined the petitioners’ request to vacate the Enlist Duo registration.   The court chose instead to remand the petition without vacating the registration, stating that the EPA’s failure to consider harm to monarch butterflies was technical and not a “serious” error.  Pointing also to the “disruptive” consequences of removing a pesticide that has been in use for over five years, the court stated that vacatur was not warranted when the EPA had substantially complied with FIFRA and fully complied with the ESA.

What’s next?

Enlist Duo registration will continue.  The EPA must address evidence that its destruction of milkweed in fields harms monarch butterflies, however.  The court advised the agency to “move promptly” in doing so.

Further action by the petitioners is likely.  According to correspondence with DTN, the petitioners are disappointed and will fight the decision.  They will likely also follow the EPA’s science quite closely as it reexamines the monarch butterfly issue.

Read the Ninth Circuit's decision National Family Farm Coalition et al v. U.S. EPA and Natural Resources Defense Council v. Wheeler, here.

Dicamba, Roundup, WOTUS, and ag-gag: although there are important updates, this week’s Harvest topics could be considered some of the Ag Law Blog’s “greatest hits.”   In addition to these ongoing issues, a bill that is meant to encourage farmers to participate in carbon markets was recently introduced in the Senate. June has certainly been a busy month. 

Decisions on dicamba. If you’ve been following along with our blog posts over the past few weeks, you know that the Ninth Circuit Court of Appeals vacated the registration of several over-the-top dicamba products, and in response, the EPA announced that all such products in farmers’ possession must be used before July 31, 2020 (our last post on the topic is available here).  The Ohio Department of Agriculture went a step further, making the final date for dicamba use in the state June 30, 2020, due to the state registrations expiring on that day.  Since the Ninth Circuit decision, the companies that produce dicamba products such as Engenia and, FXapan, and XtendiMax have filed numerous motions with the Ninth Circuit.  On June 25, the court declined a motion from the BASF Corporation, which makes Engenia, asking the court to pause and withdraw their decision from the beginning of the month.  What does this mean?  Basically, at this moment, the court’s ruling still stands, and use of certain over-the-top products will have to cease on the dates mentioned above.  That’s the latest on this “volatile” issue. 

Bayer settles Roundup lawsuits, but this probably isn’t the end. Bayer, the German company that purchased Monsanto and now owns rights to many of the former company’s famous products, has been fighting lawsuits on multiple fronts.  Not only is the company involved in the dicamba battle mentioned above, but over the past few years it has had a slew of lawsuits concerning Roundup. On June 24, Bayer, the German company that now owns the rights to Roundup, announced that it would settle around 9,500 lawsuits.  The lawsuits were from people who claimed that Roundup’s main ingredient, glyphosate, had caused health problems including non-Hodgkin’s lymphoma.  The amount of the settlement will be between 8.8 and 9.6 billion dollars.  Some of that money will be saved for future Roundup claims.  Although many are involved in this settlement, there are still thousands of claims against Bayer for litigants who did not want to join the settlement. 

Updated WOTUS still not perfect. As always, there is an update on the continuing saga of the waters of the United States (WOTUS) rule.  If you recall, back in April, the Trump administration’s “final” WOTUS rule was published.  Next, of course, came challenges of the rule from both sides, as we discussed in a previous Harvest post.  Well, the rule officially took effect (in most places, we’ll get to that) June 22, despite the efforts of a group of attorneys general from Democratically-controlled states attempting to halt the implementation of the rule.  The attorneys general asked the U.S. District Court for the Northern District of California a nationwide preliminary injunction, or pause on implementation of the rule until it could be sorted out in the courts.  The district court judge denied that injunction on June 19. On the very same day, a federal judge in Colorado granted the state’s request to pause the implementation of the rule within the state’s territory.  Remember that the 2015 rule was implemented in some states and not others for similar reasons.  The same trend seemingly continues with Trump’s replacement rule.  In fact, numerous lawsuits challenging the rule are ongoing across the country.  A number of the suits argue that rule does not go far enough to protect waters.  For instance, just this week environmental groups asked for an injunction against the rule in the U.S. District Court for the District of Columbia.  Environmental organizations have also challenged the rule in Maryland, Massachusetts, and South Carolina district courts.  On the other hand, agricultural groups like the New Mexico Cattle Growers Association have filed lawsuits arguing that the rule is too strict.

  No more ag-gag in NC?  We have mentioned a few times before on the blog that North Carolina’s ag-gag law has been embroiled in a lawsuit for several years (posts are available here).  North Carolina’s version of “ag-gag” was somewhat different from other states, because the statute applied to other property owners, not just those involved in agriculture. The basic gist of the law was that an unauthorized person entering into the nonpublic area of a business was liable to the owner or operator if any damages occurred.  This included entering recording or surveilling conditions in the nonpublic area, which is a tool the plaintiffs use to further their cause. In a ruling, the U.S. District Court for the Middle District of North Carolina was decided largely in the plaintiffs’ (PETA, Animal Legal Defense Fund, etc.) favor. In order to not get into the nitty gritty details of the 73-page ruling, suffice it to say that the judge found that that law did violate the plaintiffs’ freedom of speech rights under the First Amendment to the U.S. Constitution. Another ag-gag law bites the dust. 

Carbon markets for farmers?  And, now for something completely different. In the beginning of June, a bipartisan group of four U.S. senators introduced the “Growing Climate Solutions Act.”  On June 24, the Senate Committee on Agriculture, Nutrition, and Forestry held its first hearing on the new bill, numbered 3894.  The text of SB 3894 is not currently available online, but it would create “a certification program at USDA to help solve technical entry barriers that prevent farmer and forest landowner participation in carbon credit markets.”  The barriers “include[] access to reliable information about markets and access to qualified technical assistance providers and credit protocol verifiers” and “have limited both landowner participation and the adoption of practices that help reduce the costs of developing carbon credits.” You can read the Committee’s full press release about the bill here. It is backed by several notable businesses and groups, including the American Farm Bureau Federation, the National Corn Growers Association, the Environmental Defense Fund, and McDonalds and Microsoft. 

When we explained in our last blog post the recent Court of Appeals decision that vacated the registration of three dicamba-based products, we mentioned that one possibility for answering the “what happens now” question was for the EPA to issue a cancellation order that would allow end users to use existing stocks of the products.  That’s exactly what happened yesterday, when the US EPA made a final order that cancels the registrations of XtendiMax, Engenia, and FeXapan but allows for movement and use of the products.  Here’s a summary of the agency’s order.

Authority to issue the cancellation order

After reviewing the background of the dicamba product registrations vacated by the Ninth Circuit Court of Appeals last week for lack of “substantial evidence” supporting the registrations, the EPA stated that it was relying upon the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) to establish provisions for the disposition of existing stocks of registrations that are found to be invalid.   “The Administrator may permit the continued sale and use of existing stocks of a pesticide whose registration is suspended or canceled under [sections 3, 4 or 6 of FIFRA] to such extent, under such conditions, and for such uses as the Administrator determines that such sale or use is not inconsistent with the purposes of [FIFRA]” stated the agency. 

The EPA noted that FIFRA does not prohibit the use of unregistered pesticides, but only prohibits the sale and distribution of unregistered pesticides.  The agency noted that without its action, end users holding stocks of the products aren’t prevented from using the stocks without following the now voided label directions and restrictions.  And the agency pointed to a similar action it took after a 2015 court order that vacated the registration of sulfoxaflor and a 2010 court decision that vacated the registration of spirotetramat.  In both cases, the EPA utilized a cancellation order to establish terms and conditions for the disposition of existing stocks of the products.

Existing Stocks Determination

Back in 1991, the EPA established an “existing stocks policy” to help the agency assess how to treat existing stocks of cancelled pesticides, both when no significant risk concerns have been identified and when there are significant risk concerns for a cancelled product.  The agency noted that it considered the six factors outlined in the policy for considering significant risk concerns associated with a cancelled pesticide and reached the conclusion that “distribution and use in certain narrow circumstances is supported.”  The six factors the agency considered in determining what to do with the existing stocks of dicamba products are:

1.  Quantities of existing stocks at each level of the channels of trade

The agency noted that due to the current timing of the growing season, significant existing stocks are present in the possession of end users and throughout the channels of trade.  Stating that it couldn’t determine the exact quantities of existing stocks at each level of the channels of trade, the EPA estimates that “approximately 4 million gallons could be in the channels of trade.”

2.  Risks resulting from the use of the existing stocks

Again concluding that because the product registrations were vacated and the labels therefore voided, end users were not legally bound to follow label restrictions if using the dicamba products.  The agency concluded that such non-label uses would have greater potential for adverse effects than if the agency issued an order allowing and regulating the use of the existing stocks.  Such an order is imperative, said the agency, to ensure that any use of the products would be consistent with previously approved labeling and could be enforced in order to prevent unreasonable adverse effects on the environment.  Surprisingly, the EPA gave little attention to the volatility concerns raised by the Ninth Circuit in its decision last week, and evidence the court pointed to in that case that suggested that even applications by those who carefully followed the label restrictions were subject to drift and damage.

3. The benefits resulting from the use of existing stocks

Capitalizing on the unfortunate timing of the Ninth Circuit’s vacation of the pesticide in regards to immediate needs for the current growing season, the agency concluded that “the benefits resulting from the use of the products are considerable and well established, particularly for this growing season.”  The EPA reiterated many of the numerous communications it had received stating how essential the over-the-top products are, especially with the growing season underway. It also concluded that allowing non-over-the-top uses would result in substantially greater benefits to users and society than would disposal of the products.

4. The financial expenditures users and others have already spent on existing stocks

Echoing the concerns of many farmers and again pointing to the current growing season, the agency concluded that “the costs to farmers are not limited to their existing stocks of these dicamba products, but include other sunk costs made in expectation of the availability of these products (seed purchase, tilling, planting, etc.) as well as the lost opportunity to switch to a different crop or to another herbicide or weed management method.”

5. The risks and costs of disposal or alternative disposition of the stocks

The EPA concluded that disposal of the existing stocks of dicamba products would incur substantial costs for all and for stock already in the hands of end users, “may be neither feasible nor advisable.”  Additionally, the agency pointed to disposal or return of opened containers which would have high risks of spillage and increased expenses for proper disposal.

6. The practicality of implementing restrictions on distribution, sale, or use of the existing stocks

Another option available to the agency under FIFRA would be to issue individual stop sale, use and removal orders to all end users holding dicamba products, but the EPA concluded that such an action would be unwarranted under the present facts because tracking the existing stocks would be burdensome, inaccurate and impractical and that “hard-pressed farmers who have made large investments in their existing stocks may be uncooperative with a cancellation order that requires disposal.” 

Final Order

After weighing the six factors above, the EPA concluded that the six factors weigh heavily in support of allowing end users to use existing stocks of the dicamba products in their possession.   However, the agency imposed a July 31 , 2020 cut-off date for use of existing stocks in order to “further reduce the potential for adverse effects.”  Here are the final orders the agency made for distributed, sale and use of the products:

1. Distribution or sale by the registrant.  Distribution or sale by the registrant of all existing stocks of the products listed below is prohibited effective as of the time of the order on June 3, except for distribution for the purposes of proper disposal.
2. Distribution or sale by persons other than the registrant.  Distribution or sale of existing stocks of the products listed below that are already in the possession of persons other than the registrant is permitted only for the purposes of proper disposal or to facilitate return to the registrant or a registered establishment under contract with the registrant, unless otherwise allowed below.
3. Distribution or sale by commercial applicators.  For the purpose of facilitating use no later than July 31, 2020, distribution or sale of existing stocks of products listed below that are in the possession of commercial applicators is permitted.
4. Use.  Use of existing stocks of products inconsistent in any respect with the previously-approved labeling accompanying the product is prohibited.  All use is prohibited after July 31, 2020.

Now what? 

While the manufacturers of XtendiMax, Engenia, and FeXapan are prohibited from selling and distributing their products effective as of June 3, 2020, the EPA’s cancellation order allows others to return, dispose of, or use the products according to the previous label restrictions and no later than July 31, 2020.  But a few other factors come into play:

• Some states have already taken actions to restrict the use of the dicamba products within their states, which is within a state’s authority.  Ohio has not done so, and instead has stated that it has been awaiting US EPA guidance on the legal status of the products and will communicate options for farmers afterwards.  This means that users in Ohio should keep a close eye on the Ohio Department of Agriculture to see if it will go along with the US EPA’s guidance or direct otherwise.
• A cancellation order issued by the EPA is a final agency action that is subject to appeal, so we might see an immediate of the cancellation order and a request to stay the order pending appeal.  Such an appeal could challenge whether the EPA has the authority to regulate existing stocks of the products and whether the agency’s analysis sufficiently addressed the risks of adverse impacts from continued use.

As seems often to be the case with dicamba, there’s a mixed sense of drama and dread with what lies ahead.  We’ll be sure to keep you posted on the next legal news for dicamba.

Read the US EPA’s cancellation order for XtendiMax, Engenia, and FeXapan here.