Anderson et al v. McCarthy et al

Filing 62


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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 11 For the Northern District of California United States District Court 10 12 13 JEFF ANDERSON; BRET ADEE; DAVID HACKENBERG; LUCAS CRISWELL; GAIL FULLER; CENTER FOR FOOD SAFETY; AMERICAN BIRD CONSERVANCY; PESTICIDE ACTION NETWORK NORTH AMERICA; POLLINATOR STEWARDSHIP COUNCIL, 14 15 16 17 18 No. C 16-00068 WHA ORDER RE MOTION TO DISMISS AND MOTION TO INTERVENE Plaintiffs, v. GINA MCCARTHY; ENVIRONMENTAL PROTECTION AGENCY, Defendants. / 19 20 INTRODUCTION 21 In this challenge to federal agency action, defendants move to dismiss for lack of 22 subject-matter jurisdiction under Rule 12(b)(1). In addition, several trade associations that 23 would be affected by the outcome of this case move to intervene. To the extent stated below, 24 the motion to dismiss is DENIED. The motion to intervene is GRANTED. STATEMENT 25 26 This case challenges the United States Environmental Protection Agency’s regulation of 27 pesticides. Plaintiffs are several bee keepers, farmers, and organizations concerned about the 28 effect of pesticides on honey bees and other pollinators. Defendants are the EPA and its Administrator, Gina McCarthy. 1 According to plaintiffs’ complaint, many crop seeds, like corn and soybean seeds, are 2 coated with pesticides called neonicotinoids. After the coating is applied, the seeds absorb a 3 small portion of the chemical coating. The rest of the coating, however, “is either scraped off 4 the seeds and blown away as dust during machine planting, or sloughed off into the surrounding 5 soil and groundwater” (Compl. ¶ 34). The effects of the chemical “dust off” extend beyond the 6 full-grown plants, the seeds themselves, and result in the death of honey bees, catastrophic 7 hazard to aquatic systems, and “destruction of rural invertebrate life across a vast portion of the 8 United States” (id. at ¶ 37). 9 The EPA regulates pesticide use via the Federal Insecticide, Fungicide, and Rodenticide Act. Under FIFRA, a pesticide is defined as a “mixture of substances that are intended to 11 For the Northern District of California United States District Court 10 prevent, destroy, repel or mitigate a pest.” 7 U.S.C. 136(u)(1). Pesticides must be registered 12 with the EPA before they can be used, meaning that the EPA must grant a license that 13 establishes the terms and conditions under which the pesticide may be lawfully sold, 14 distributed, and used. FIFRA allows the EPA to exempt by regulation any pesticide which the 15 Administrator determines will not have “unreasonable adverse affects on the environment.” 7 16 U.S.C. 136w(b); 7 U.S.C. 136a(c)(5). 17 In 1988, the EPA exempted from FIFRA certain “treated articles.” If an article were 18 treated with a pesticide that had already been registered, and the treatment was for the 19 protection of the article itself, then that new use of the pesticide to treat that article would be 20 exempt from new registration under FIFRA. For example, “paint treated with a pesticide to 21 protect the paint coating, or wood products treated to protect the wood against insect or fungus 22 infestation” are exempt if the specific pesticide has already been registered for such use. 40 23 C.F.R. 152.25(a). 24 In 2003, the EPA clarified the “treated article” exemption as it related to coated seeds, 25 as set forth in a release titled “Harmonization of Regulation of Pesticide Seed Treatment in 26 Canada and the United States” (Compl. ¶ 36). Through this action, the EPA stated that 27 pesticide-coated seeds were pesticides under FIFRA, but would be exempt as “treated articles” 28 2 1 if they had been treated with an already-registered pesticide and their effects did not “extend 2 beyond the seed itself” (ibid) (emphasis added). 3 In 2013, the EPA issued a “Guidance for Inspecting Alleged Cases of Pesticide Related 4 Bee Incidents,” which announced that a “[t]reated seed (and any resulting dust-off from a 5 treated seed) may be exempted from registration under FIFRA as a treated article and as such its 6 planting is not considered a pesticide use” (id. at ¶¶ 39–40). This new policy was never 7 promulgated in a formal regulation and did not undergo the typical process that would 8 accompany a formal regulation. “The 2013 Guidance directly affects beekeepers and other 9 Plaintiffs in that it states there will not be investigation or enforcement against any of their bee kills or other harm caused by neonicotinoid-coated seeds or resulting contaminated dust because 11 For the Northern District of California United States District Court 10 the kills and other harm incidents are not considered a ‘pesticide use’” (id. at ¶ 41). 12 In January 2016, plaintiffs brought this lawsuit, alleging that the 2013 Guidance 13 constituted a final agency action reviewable under the Administrative Procedure Act. In Claims 14 I, III, and IV, plaintiffs assert that the 2013 Guidance is (1) in excess of the EPA’s statutory 15 authority, (2) is arbitrary and capricious, and (3) failed to comply with the rulemaking 16 requirements set forth in the APA. Claim II alleges the EPA failed to regulate and enforce 17 FIFRA by neglecting to enforce pesticide regulations in regards to treated seeds. Now, 18 defendants move to dismiss under Rule 12(b)(1) for lack of subject-matter jurisdiction, asserting 19 that the 2013 Guidance did not constitute final agency action and is thus unreviewable under the 20 APA. Furthermore, several trade associations that would be affected by the outcome of this 21 case move to intervene. This order follows full briefing and oral argument. 22 ANALYSIS MOTION TO DISMISS. 23 1. 24 The issue presented by the instant motion to dismiss is whether the 2013 Guidance and 25 the EPA’s actions constituted final agency action, such that subject-matter jurisdiction is proper 26 under the APA. Dismissal is appropriate under Rule 12(b)(1) when the district court lacks 27 subject-matter jurisdiction over the claim. There are two permissible jurisdictional attacks 28 under Rule 12(b)(1): a facial attack, where the court’s inquiry is limited to the allegations in the 3 1 complaint; or a factual attack, which permits the court to look beyond the complaint at 2 affidavits or other evidence. Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n. 2 3 (9th Cir. 2003). If the moving party asserts a facial challenge, the court must assume that the 4 factual allegations asserted in the complaint are true and construe those allegations in the light 5 most favorable to the plaintiff. Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 6 (9th Cir. 2003). If the moving party asserts a factual attack, a court may resolve the factual 7 disputes by “look[ing] beyond the complaint to matters of public record, without having to 8 convert the motion into one for summary judgment.” White v. Lee, 227 F.3d 1214, 1242 (9th 9 Cir. 2000). Importantly, however, “jurisdictional finding of genuinely disputed facts is 11 For the Northern District of California United States District Court 10 inappropriate when the jurisdictional issue and the substantive issues are so intertwined that the 12 question of jurisdiction is dependent on the resolution of factual issues going to the ‘merits’ of 13 an action.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (internal 14 citations and quotations omitted). The question of jurisdiction and the merits of an action are 15 intertwined where “a statute provides the basis for both the subject-matter jurisdiction of the 16 federal court and the plaintiff’s substantive claim for relief.” Ibid. 17 As stated above, the issue raised by this motion is whether the 2013 Guidance 18 constituted final agency action. “As a general matter, two conditions must be satisfied for 19 agency action to be final: First, the action must mark the consummation of the agency’s 20 decisionmaking process — it must not be of a merely tentative or interlocutory nature. And 21 second, the action must be one by which rights or obligations have been determined, or from 22 which legal consequences will flow.” Fairbanks N. Star Borough v. U.S. Army Corps of 23 Engineers, 543 F.3d 586, 591 (9th Cir. 2008) (internal quotation omitted). 24 Here, this order finds that the factual dispute between the parties — whether the 2013 25 Guidance constituted final agency action — is “so intertwined” with the merits that a 26 “jurisdictional finding of genuinely disputed facts is inappropriate.” If the 2013 Guidance did 27 consummate a new rule, and thus a final agency action, then defendants clearly violated federal 28 law by failing to comply with rulemaking requirements. If the 2013 Guidance did not constitute 4 1 final agency action, then subject-matter jurisdiction is lacking, and the case must be dismissed. 2 Plaintiffs allege that the 2013 Guidance qualifies as a final agency action because it extended 3 the 2003 rule from exempting treated seeds whose effects did not “extend beyond the seed 4 itself,” to something much broader, namely exempting all coated seeds, whether or not their 5 environmental affects were contained to the seeds themselves or extended far beyond (such as 6 affecting honey bees and other wildlife). 7 In our circuit, essentially all environmental cases concerning subject-matter jurisdiction stage. See, e.g. High Sierra Hikers Ass’n v. Blackwell, 390 F.3d 630 (9th Cir. 2004); River 10 Runners for Wilderness v. Martin, 593 F.3d 1064 (9th Cir. 2010); Northcoast Envtl. Ctr. v. 11 For the Northern District of California are decided only after reviewing the administrative record, typically at the summary judgment 9 United States District Court 8 Glickman, 136 F.3d 660 (9th Cir. 1998); Or. Natural Desert Ass’n v. U.S. Forest Service, 465 12 F.3d 977 (9th Cir. 2006). So too here. At this stage, without the benefit of the entire 13 administrative record, this order cannot find as a matter of law that the 2013 Guidance did not 14 constitute final agency action. 15 Defendants argue that the 2013 Guidance is not an agency action because it is not “the 16 whole or part of an agency rule, order, license, sanction, relief, or the equivalent or denial 17 thereof, or a failure to act.” 5 U.S.C. 551(13). Instead, defendants contend the 2013 Guidance, 18 at least in regards to coated seeds, merely constituted a recommendation. An agency action, 19 however, “is meant to cover comprehensively every manner in which an agency may exercise 20 its power.” Whitman v. American Trucking Ass’ns, 531 U.S. 457, 478 (2001). Based on the 21 current record, without resolving factual disputes, it is plausible that defendants’ decision to 22 exempt coated seeds from FIFRA, without regard to their effects beyond the seeds themselves, 23 constituted agency action. 24 Next, defendants argue that even if the 2013 Guidance constituted agency action, it was 25 not final within the meaning of the APA. Specifically, the sentence in the 2013 Guidance 26 which states “[t]reated seed (and any resulting dust-off from treated seed) may be exempted 27 from registration under FIFRA and as such its planting is not considered a pesticide use” (Mann 28 Decl. Exh. 1 at 7), does not amount to a “definitive statement of the agency’s position.” Or. 5 may ultimately prevail on this issue, the current record does not support this conclusion as a 3 matter of law. Plaintiffs allege that defendants’ action determined rights and obligations, and 4 due to changing the policy regarding the coated seeds exemption, “legal consequences will 5 flow.” Bennett v. Spear, 520 U.S. 154, 178 (1997). Specifically, plaintiffs allege and assert in 6 declarations that the EPA’s action will result in use of neonicotinoid-coated seeds on 150 7 million agricultural acres, which will introduce millions of pounds of insecticides into 8 agricultural areas, leading to devastating effects on the business of the bee-keeper plaintiffs 9 (Opp. at 18). Without resolving genuine factual disputes, and without the benefit of the full 10 administrative record, this order cannot determine, as a matter of law, that defendants’ action 11 For the Northern District of California Nat. Desert Ass’n v. U.S. Forest Serv., 465 F.3d 977, 982 (9th Cir. 2006). While defendants 2 United States District Court 1 was insufficiently final. 12 This motion presents a close call, as defendants put forth a strong argument in support of 13 dismissal of the lawsuit at the Rule 12 stage, even without the benefit of the full administrative 14 record. Defendants, however, do not cite one decision from our court of appeals affirming a 15 Rule 12 dismissal in a case similar to ours. In the most analogous case to ours, Oregon Natural 16 Desert Association, 465 F.3d at 979, our court of appeals reversed the district court’s dismissal 17 under Rule 12(b)(1) and remanded for a determination on the full administrative record. This 18 precedent is in line with other decisions from our court of appeals, in which essentially all 19 environmental/administrative cases concerning subject-matter jurisdiction are decided only after 20 reviewing the administrative record, typically at the summary judgment stage. Accordingly, 21 this order finds the matter better suited for adjudication at the summary judgment stage and thus 22 defendants’ motion to dismiss for lack of subject-matter jurisdiction is DENIED. 23 2. MOTION TO INTERVENE. 24 Separate from defendants’ motion to dismiss, several not-for-profit trade associations 25 move to intervene in our case as a matter of right. They include CropLife America, the 26 American Seed Trade Association, the Agricultural Retailers Association, the American 27 Soybean Association, the National Cotton Council of America, the National Association of 28 Wheat Growers, and the National Corn Growers Association. All are represented by the same 6 1 counsel. These proposed intervenors seek to “protect their members’ vital interests in the 2 development, distribution, sale, and use of the seed treatments and treated seed that are at issue 3 in this case and in an effective, efficient regulatory process for these products” (Br. at 1). 4 Under Rule 24(a)(2), a party is entitled to intervene as a matter of right if (1) the motion 5 is timely, (2) the movant claims a significantly protectable interest relating to the property or 6 transaction which is the subject of the action, (3) the disposition of the action may as a practical 7 matter impair or impede the movant’s ability to protect that interest, and (4) the movant’s 8 interest is inadequately represented by the parties to the action. Wilderness Soc’y v. U.S. Forest 9 Serv., 630 F.3d 1173, 1177 (9th Cir. 2011) (en banc). “A liberal policy in favor of intervention serves both efficient resolution of issues and broadened access to the courts. By allowing 11 For the Northern District of California United States District Court 10 parties with a practical interest in the outcome of a particular case to intervene, we often prevent 12 or simplify future litigation involving related issues; at the same time, we allow an additional 13 interested party to express its views before the court.” United States v. City of Los Angeles, 288 14 F.3d 391, 397–98 (9th Cir. 2002) (internal quotation omitted). 15 Defendants do not oppose intervention by proposed intervenors. Plantiffs do oppose, 16 solely on the basis that proposed intervenors have failed to demonstrate a protectable interest 17 sufficient to warrant intervention. Plaintiffs assert, in essentially conclusory fashion, that the 18 economic harm alleged is insufficient to warrant intervention. For the reasons stated below, 19 however, the proposed intervenors, whose interests can be broken down into three separate 20 groups, all satisfy Rule 24(a)(2)’s test for intervention. 21 Each intervenor has demonstrated a protectable interest. First, as demonstrated by the 22 voluminous declarations accompanying the motion, CropLife members own more than two 23 dozen neonicotinoid seed treatment registrations issued by the EPA through FIFRA (Lattimore 24 Decl. at ¶ 4). If plaintiffs obtain the relief they seek, seeds treated with these registered 25 products will likely be removed from the market. Furthermore, CropLife asserts that many of 26 its members have seed treatment registrations pending, which could become null if plaintiffs 27 win this lawsuit, thus affecting CropLife members’ development work. 28 7 1 Second, the grower intervenors (the National Corn Growers Association, the National 2 Association of Wheat Growers, the National Cotton Council of America, and the American 3 Soybean Association) have demonstrated a sufficient interest in our case. The declarations aver 4 that “over 95 percent of corn seed planted in the United States is treated with a neonicotinoid 5 pesticide” (Novak Decl. at ¶ 3). Large portions of soybean, cotton, and wheat are also grown 6 using treated seeds. Accordingly, as sworn to in the declarations accompanying the motions, 7 the availability of these treated seeds is critical to the growers’ farming operations (Wilkens 8 Decl. at ¶ 5; Adamas Decl.. at ¶ 5; Stoner Decl. at ¶ 4). 9 Third, the American Seed Trade Association and the Agricultural Retailers Association have a sufficient protectable interest in our case. The ASTA represents approximately 740 11 For the Northern District of California United States District Court 10 companies that develop, produce, and distribute seeds in the Untied States and abroad (LaVigne 12 Decl. at ¶ 2). Of the seeds sold by these companies, 75% are treated with pesticides (id. at ¶ 3). 13 The ARA represents over 300 agricultural retailers and distributors who supply farmers and 14 ranchers with products, including the sale of seed, nutrients, and crop protection products. 15 ARA members also apply registered pesticides to the seeds themselves (Coppock Decl. at ¶¶ 16 3–5). As sworn to in the declarations, these organizations’ members will face economic harm if 17 plaintiffs obtain the relief they seek and the organizations will also confront enhanced 18 regulatory burdens. 19 Our court of appeals favors a “liberal policy in favor of intervention.” City of Los 20 Angeles, 288 F.3d at 397. Here, proposed intervenors have satisfied the elements set forth in 21 Rule 24(b)(2). Accordingly, the motion to intervene is GRANTED. 22 CONCLUSION 23 For the reasons stated above, defendants’ motion to dismiss under Rule 12(b)(1) is 24 DENIED. To the extent stated herein, the motion to intervene is GRANTED. As stated in a previous 25 order (Dkt. No. 54), defendants shall lodge the administrative record by JUNE 30, 2016. The 26 administrative record shall include all emails and memoranda discussing whether the agency 27 should proceed by guidance versus some other procedure and/or discussing whether the guidance 28 8 1 would constitute final agency action. The deadline for any party to file a summary judgment 2 motion shall be AUGUST 11, 2016, to be heard on the normal 35-day track. 3 4 5 IT IS SO ORDERED. Dated: May 13, 2016. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 6 7 8 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9

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