On Wednesday afternoon the Ninth Circuit released a groundbreaking opinion regarding German industrial giant, Bayer. The three-judge panel vacated the United States Environmental Protection Agency’s (EPA) 2018 approval for conditional registrations for three of Bayer’s dicamba-based herbicides for an additional two years. The herbicides—XtendiMax, Engenia, and FeXapan—are used on dicamba-tolerant (DT) soybean and cotton.
After the EPA issued conditional two-year amended registrations to Bayer for those three weed killers, the National Family Farm Coalition, Center for Food Safety, Center for Biological Diversity, and Pesticide Action Network North America sought review of the EPA’s action. The petitioners argued the EPA’s decision violated the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. §§ 136 et seq., and the Endangered Species Act, 16 U.S.C. § 1536(a)(2). The court held their decision under FIFRA and did not need to reach the question of whether the registration decision violated the Endangered Species Act.
Monsanto filed several pleadings in support of the EPA’s decision and was being represented by Latham & Watkins. Bayer bought Monsanto in 2018 for $63 billion, and inherited all its legal liabilities. Monsanto has been sued for both its Roundup weed killer and dicamba-based weed killers. This decision is yet another legal blow to the two companies. Barron’s reported, in an email Bayer said, “We strongly disagree with the ruling and are assessing our next steps. Depending upon actions by the EPA and whether the ruling is successfully challenged, we will work quickly to minimize any impact on our customers this season.”
In the opinion, the court stated several reasons for blocking Bayer’s permit to sell weed killer. First, “[t]he EPA substantially understated three risks that it acknowledged. The EPA substantially understated the amount of DT seed acreage that had been planted in 2018, and, correspondingly, the amount of dicamba herbicide that had been sprayed on post-emergent crops.” Additionally, the EPA was “agnostic” to whether formal complaints of dicamba damage were either under or over reporting the actual damage, “when record evidence clearly showed that dicamba damage was substantially under-reported.” Finally, the EPA’s refusal to estimate the amount of dicamba damage was wrong, and “characterizing such damage as “potential” and “alleged,” when record evidence showed that dicamba had caused substantial and undisputed damage.” Furthermore, the court noted “FIFRA requires the EPA to consider, as part of a cost-benefit analysis, “any unreasonable risk to man or the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide.” 7 U.S.C. § 136(bb) (emphasis added).”
As for the social cost analysis, the court said “[t]he EPA also entirely failed to acknowledge a social cost…the severe strain on social relations in farming communities where the new dicamba herbicides are being applied is a clear social cost.” The court pointed out a man in Arkansas was “shot and killed in an argument over dicamba damage” in 2016. In regards to the economic cost, the court stated conditional registrations for “XtendiMax, Engenia, and FeXapan creates a substantial the risk that DT soybeans, and possibly DT 50 cotton, will achieve a monopoly or near-monopoly. The likely anti-competitive effect of the registrations would impose a clear economic cost, but the EPA at no point identified or took into account this cost.”
The court noted at the end of the opinion they “are aware of the practical effects of our decision.” Specifically, recognizing the effects this ruling will have on America’s farmers, “[w]e acknowledge the difficulties these growers may have in finding effective and legal herbicides to protect their DT crops if we grant vacatur. They have been placed in this situation through no fault of their own. However, the absence of substantial evidence to support the EPA’s decision compels us to vacate the registrations.” (emphasis added).
The panel consisted of Circuit Judges Michael Daly Hawkins, M. Margaret McKeown, and William A. Fletcher. The opinion was by Judge Fletcher.
