Constitutional Challenges to FIFRA's Use and Disclosure Safeguards Yield Mixed Results

Pesticides are used worldwide to control destructive plants and animals and are partially responsible for greater crop production, a decreased incidence of debilitating diseases such as malaria, and generally improved standards of living. Over 1.4 billion pounds of pesticides are produced annually, with approximately 1,400 active ingredients formulated into some 40,000 end-use products.¹ Development of these products and the necessary support data often requires many years of effort and an investment of millions of dollars. Information on formulas and processes can allow a company to enter the market at substantially lower costs and to gain an overhelming competitive advantage in a given market. Thus, companies generally consider the data they develop to be trade secrets and go to great lengths to maintain their confidentiality.²

This desire for secrecy, however, runs afoul of the disclosure and use requirements of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA),³ which provides that certain data must be submitted to the Environmental Protection Agency (EPA) before the product can be marketed.⁴ EPA can use this information in one of two ways to which industry objects. Public disclosure of the data, often in response to a request under the Freedom of Information Act,⁵ is understandably a major concern of the submitters. In addition, internal use of one submitter's data by EPA in order to process another's registration application gives a windfall to the latecomer that tends to deter the filing of new applications.

In four recent cases, pesticide manufacturers have gone to court seeking to prevent EPA from using their data to support another company's application. In three of these cases, the plaintiffs have also sought to enjoin EPA from disclosing these data to the public. Early efforts in both the "internal use" and "disclosure" areas met with some success. Recently, however, a trend to deny such protection has emerged. Chevron Chemical Co. v. Costle,⁶ the most authoritative case to date, holds that EPA's use of data in a "me too" registration under FIFRA does not amount to a taking in violation of the Fifth Amendment. Subsequent cases have followed the Chevron court's lead.

Though generally agreed on the propriety of EPA's use of the data, the courts have split in their treatment of FIFRA's disclosure provision. In Amchem Products, Inc. v. Costle⁷ and Pennwalt Corp. v. Costle,⁸ the courts enjoined EPA's disclosure of such data to forestall an unconstitutional taking of plaintiffs' property. In Petrolite Corp. v. EPA,⁹ however, the court held exactly the opposite: plaintiff was not entitled to injunctive relief because EPA's disclosure of its data did not amount to a taking.

Statutory Background

Since the passage of FIFRA in 1947, the federal government has required pesticide manufacturers, before marketing them in interstate commerce, to register pesticides with a regulatory agency.¹⁰ Before the agency (currently EPA) can register the pesticide, the manufacturer must submit data demonstrating the product's safety and efficacy.¹¹ In order to meet the burden of proving the safety and efficacy of the pesticide, an applicant for registration may have to spend millions of dollars on tests for a new pesticide, not to mention the research and development costs. Such information is of obvious value to competitors involved in research in other related areas as well as companies that wish to register a similar pesticide without conducting extensive testing.¹²

Prior to 1972, neither as a matter of federal law nor Agency policy was recognition given to any right of an applicant for protection against the government's subsequent internal use of submitted data.¹³ Formulas for products and other data submitted in certain circumstances, however, such as in administrative hearings to review the proposed denial of an application, were expressly protected from unauthorized disclosure.¹⁴

[11 ELR 10158]

Because of the concern over the effects on competition in the pesticide manufacturing industry of keeping much of the support data confidential, and partly in response to the growing concern for public access to information upon which government decisions were based, Congress enacted the Federal Environmental Pesticide Control Act (FEPCA),¹⁵ the first of three amendments to FIFRA which have gradually diminished the protection given to trade secret data.

FEPCA expanded EPA's regulatory authority over the pesticide industry and for the first time legislated both the use and disclosure of data.¹⁶ With respect to disclosure, EPA was required to make pesticide registration data available to the public¹⁷ unless the data were otherwise protected by FIFRA or had been designated as "trade secrets" by the submitter.¹⁸

FEPCA also authorized EPA to rely on data and information submitted by one applicant to determine whether a subsequent applicant had made the necessary showings of safety and efficacy.¹⁹ EPA's authority to use these data in these "me too" registrations, however, was limited: the Agency could not use any data protected by the newly enacted trade secret provision and could use non-trade secret data only if the subsequent applicant for registration offered to pay the original applicant "reasonable compensation," the amount to be settled by EPA if necessary.²⁰

However well-intentioned Congress' actions were, FEPCA left many problems unresolved. For example, the term "trade secrets" was defined ambiguously as anything so designated by the applicant unless EPA could obtain a judgment overturning the designation.²¹ FEPCA also left major doubt as to its retroactive impact, e.g., whether firms could designate data submitted prior to 1972 as trade secrets, whether companies were entitled to compensation for such previously submitted data, and whether the use provision applied to new applications filed before FEPCA's effective date.²² Moreover, many members of the industry, particularly new applicants, were uncomfortable with EPA's possession of authority to determine how much compensation was reasonable, a judgment subject to judicial review only at the behest of the original submitter.²³

Because of these uncertainties, Congress again revised FIFRA in 1975.²⁴ As amended, FIFRA provided that the two provisions regarding use of data (i.e., exclusive use for trade secret data and compensated use for all other data) applied only to data submitted after January 1, 1970.²⁵ Data submitted prior to this date could be used in "me too" registrations without compensation regardless of trade secret status. The disclosure provisions were unchanged: only data specifically protected by FIFRA or designated by the submitter as trade secrets were immune from disclosure.

Though the 1975 amendments purported to deal comprehensively with the retroactivity question,²⁶ many problems with the 1972 version remained and in fact some were exacerbated. Particularly troublesome was the combination of the exemption in the use provision for trade secrets as defined in FIFRA with the provision of giving EPA the responsibility of establishing reasonable compensation in the first instance. As every EPAdecision to disclose, not to disclose, or to establish reasonable compensation was challenged in court by the affected parties, this scheme created such an administrative nightmare that the process of registering new pesticides simply ground to a halt.²⁷

Because of almost universal dissatisfaction with the existing framework, Congress amended FIFRA again in 1978.²⁸ In the "use" area, the amendments divided data into three categories: (1) data submitted after September 30, 1978 in support of a registration application were granted a period of exclusive use for 10 years from the date of registration; (2) data submitted after December 31, 1969 were protected by 15 years of compensated use from the date of submittal; and (3) data for which the use and compensation periods had expired were made available for unlimited use.²⁹ The 1978 amendments also eliminated from the use and compensation provision any exemption for trade secret or proprietary data.

Congress also revised the disclosure requirements of the Act. The exemption from disclosure was narrowed from the 1972 version (which had been interpreted by some courts to cover all trade secrets as defined in the RESTATEMENT OF TORTS³⁰) to prohibit for 10 years the disclosure of any data protected under the exclusive-use [11 ELR 10159] provision. The Act also was amended to prohibit, on a permanent basis, the disclosure of three specific types of information: details of the manufacturing process, inert ingredients, and methods for testing for such ingredients.³¹ Even for these categories of information, the statute provided for disclosure when necessary to protect public health or the environment.³² The result was that FIFRA now allowed disclosure of safety and efficacy data without respect to its status as trade secrets under the RESTATEMENT OF TORTS.³³

Thus, for all future registrations, original data are entitled to 10 years of exclusive use from the date of registration and up to 15 years of compensated use from the date of submittal, followed by unlimited use.³⁴ Data submitted between 1970 and 1978 qualify for future compensation to the extent necessary to provide a total compensation period of 15 years from the date of submittal. Finally, data submitted before 1970 remain available for unlimited use without compensation. All data may be disclosed unless subject to exclusive use or falling into specified categories.

In summary, while the 10-year exclusive-use provision for post-1978 data and the compensation requirements for post-1969 data place significant restraints on the use and disclosure of this information, the 1978 amendments nonetheless fall far short of enabling producers to maintain absolute protection of the submitted data.

The Cases

EPA Use of Data

The first case to address the FIFRA use provision as it stood following the 1978 amendments arose in Amchem Products, Inc. v. Costle,³⁵ where the plaintiff claimed that the Act's lack of data safeguards violated the Fifth Amendment because EPA's internal use constituted a taking of private property for public purpose without compensation. In granting the preliminary injunction against the use of the disputed data, the court noted that data generated as a result of plaintiff's research and development activities have immense value.³⁶ Further, if plaintiff's competitors were to obtain access to the research data, plaintiff would lose a substantial advantage earned through its research efforts. The court also found that such data may be considered property under the Fifth Amendment and under certain circumstances unauthorized appropriation of such data has been held a taking, thus making injunctive relief appropriate.³⁷

A short time later, in Chevron Chemical Corp. v. Costle,³⁸ the original submitter of data under FIFRA sought to enjoin EPA's use of pre-1970 data in a "me too" registration. In expressly refusing to reach the takings issue, the court found that the threshold question was whether the statute authorized consideration of the pre-1970 data in a "met too" registration. The court concluded that although neither the Act nor the legislative history was entirely clear as to the status of pre-1970 data, a detailed examination of the legislative scheme demonstrated that the use of pre-1970 data was governed by FIFRA and that EPA had unfettered discretion to use these data.³⁹ Since EPA's policy of using such data without the original submitter's consent and without compensation was well established, Congress implicitly ratified it in the 1978 amendments. In addition, a reasonable reading of § 3(c)(1)(D), which provided that after expiration of the exclusive and compensated use period EPA has unlimited authority to use submitted data, demonstrated, in the court's view, that such authority should apply equally to pre-1970 data.Moreover, plaintiff's interpretation would result in a perpetual period of "de facto exclusive use" for pre-1970 data and foster decreased competitiveness in the industry, contrary to expressed congressional intent.⁴⁰

[11 ELR 10160]

On appeal, the Third Circuit Court of Appeals affirmed the denial of the preliminary injunction, but on different grounds.⁴¹ Before tackling appellant's takings claim, the court asked whether the company's interest in the data it had submitted could be construed as a "property" interest protected by the Fifth Amendment. It answered the question in the negative. The court conceded that the data had been fairly considered by appellant as trade secret data,⁴² and thus, under the Trade Secret Act,⁴³ had been submitted with a legitimate expectation that the data would not be published or disclosed.⁴⁴ The Trade Secret Act, however, deals solely with the matter of disclosure, not with the dispositive issue in the case: the propriety of internal Agency use of submitted data. It thus offered no basis on which to expect that submitted data would not be used in-house. Nor was § 3(c)(1)(D) of avail to appellant because it conferred protection on post-1969 data only. Therefore, neither the two statutory provisions nor Agency policy could reasonably have been the source of a reasonable expectation of Agency nonuse. Without such an expectation, there was no property interest and thus there could be no taking.⁴⁵

Subsequently, the district court in Pennwalt Corp. v. EPA,⁴⁶ similarly refused to restrain EPA from using trade secret data submitted by plaintiff to support a "me too" registration. Relying on the Third Circuit's opinion in Chevron, the district court summarily found that there can be no common-law property interest in agency nonuse of materials voluntarily submitted to a federal agency in order to obtain a license to sell a product in interstate commerce.⁴⁷ Thus, plaintiff's claims that (1) the Act did not authorize EPA's use of pre-1970 data, (2) the use was for a private purpose, (3) the compensation scheme unconstitutionally precluded judicial determination of just compensation, (4) other remedies to protect plaintiff's interests were inadequate, and (5) the Act unconstitutionally violated due process in its retroactive application could not be sustained.⁴⁸

In the most recent case involving EPA's use of previously submitted data in a "me too" registration, a federal district court in Petrolite Corp. v. EPA⁴⁹ held that the use provision of FIFRA did not constitute a taking of property in violation of the Fifth Amendment. In contrast to the Chevron court, which had held that the submitter did not have a property interest in pre-1970 data, the Petrolite court assumed that plaintiff had such an interest.⁵⁰ The court then considered the issue of whether there was a taking of this property interest, and more specifically, whether the statute had interfered with a distinct investment-backed expectation.

The court focused on the three categories of data created by the statute: post-1978 data, pre-1970 data, and data submitted between 1970 and 1978. Over a period of years, plaintiff had submitted various information falling into each category. The court concluded that the protection given post-1978 data, being entirely prospective in nature, clearly could not support an expectation of exclusive use beyond the specified 10-year period. Plaintiff's voluntary submission of data after passage of the 1978 amendments to FIFRA precluded plaintiff's claim of a government taking.⁵¹

As to pre-1970 data, the court ruled that the use provision of the 1978 amendments did nothing more than ratify the prior Agency practice of using such data freely.⁵² In the absence of even a colorable allegation that plaintiff's reasonable "investment-backed expectations" were disrupted by Congress' statutory ratification of long-standing Agency practice, plaintiff's arguments had to be rejected.

As to data submitted between 1970 and 1978, the court agreed with the plaintiff that § 3(c)(1)(D) had retroactively decreased the protection accorded these data from perpetual compensation for use of any data and exclusive use of trade secret data to limited periods of exclusive and compensated use of all data, including trade secrets. Thus plaintiff could legitimately claim frustration of its settled expectation with at least some deleterious economic consequences. The question thus became whether such an economic injury must be compensated by the government, or whether it was trivial enough to be borne by the submitter on the rationale that "government could hardly go on if to some extent values incident to property could not be diminished without paying for every such change in the general law."⁵³

In finding that the situation better fit into the latter category, the court observed that the use of plaintiff's data amounted to only a partial loss of but one component of the data's value and represented only a small diminution in the overall value of the data.⁵⁴ Furthermore, [11 ELR 10161] it was uncontrovertible that plaintiff's primary "investment-backed expectations" concerned the use of data in support of its own applications.⁵⁵

In short, the court thought that the interference with plaintiff's property interest, considered as a whole, was insignificant relative to those intrusions for which the U.S. Supreme Court had in the past found no taking.⁵⁶ Thus the government's action, like others before it, had to be chalked up to the costs individuals must bear to secure "the advantages of living and doing business in a civilized society."⁵⁷

EPA Disclosure of Data

The plaintiff in Amchem Products, Inc. v. Costle also challenged the disclosure provision of FIFRA on grounds that to allow the disclosure of its data constituted an unconstitutional taking of private property. The court rejected the government's assertions that plaintiff retained the ability to make reasonable beneficial use of this property. In addition, disclosure of the data to the public was deemed an inappropriate means to lessen the likelihood that commerce in pesticides would harm the public or to educate the public as to how these registration decisions are reached. Finally, the court ignored the argument that competition was served by disclosure.⁵⁸

The court pointed out that trade secret data had often been found to be property, and its unauthorized appropriation had been found to be a taking. Further, plaintiff would lose a significant competitive advantage if the data were disciosed. To prevent such a loss the court enjoined EPA's disclosure of the data.

In Pennwalt Corp. v. Costle the court rejected EPA's arguments that Congress may freely disclose information that educates the public about a pesticide's chemical ingredients, emphasizing instead that the data had taken many years of effort and millions of dollars to generate and that it would remain valuable only if kept confidential.⁵⁹ Since plaintiff had made the necessary showing of irreparable injury, reasonable likelihood of success on the merits, and a favorable balance of harm, its motion for a preliminary injunction was granted.⁶⁰

In contrast, the court in Petrolite Corp. v. EPA declined to enjoin EPA's disclosure of data.⁶¹ As it had with respect to the use provision, the court examined the disclosure provision category by category.⁶² Data submitted after 1978, the court opined, were not accompanied by reasonable investment-backed expectations of nondisclosure and thus plaintiff's taking argument could not be sustained.

The retroactive features of the law gave the court greater difficulty since prior to 1972 the government had refrained from disclosing trade secret data and thereby given rise to a reasonable expectation of nondisclosure. The court nonetheless concluded that there was no taking even in the retroactive application. In the first place, plaintiff had not refuted the "natural assumption" that it generated and submitted data primarily for the development and registration of its own products. Having reaped that benefit, plaintiff had not shown that disclosure of the data destroyed its ability to earn a reasonable profit from its investment. At most, plaintiff would suffer a future loss of profits which in these circumstances did not amount to a taking. It was also significant to the court that the 1978 amendments to FIFRA did not eliminate protection. Rather, the amendments narrowed the category of privileged data; thus mitigating the retroactive impact.⁶³

Discussion

Use

The change from Amchem to Petrolite, in both the result reached and the courts' treatment of the issues, is striking indeed. Rather than examining the statute or its history in much detail, the Amchem court enjoined the use of pre-1970 data on the basis of the competitive advantage the submitter retained by preventing EPA from using the data to review another application, the "incalculable" damage it would suffer from such use, and the amount of time, money, and resources the submitter had invested in the data.

The district court in Chevron took a different route in arriving at the opposite result. In refusing to enjoin EPA's use of the data, the court held that the use provision of FIFRA, as applied to pre-1970 data, did not represent a taking since the legislative scheme on the whole indicated that Congress did not intend to protect pre-1970 data and that EPA had unfettered discretion to use it. The obvious question of whether EPA's use and Congress' acquiescence therein nonetheless constituted a taking was addressed for the first time not by the district court but by the Third Circuit. In affirming the district court's refusal to enjoin EPA's use of the data, the court focused not on whether FIFRA covered pre-1970 data but rather on whether the submitter had a property interest in these data. Specifically, the court found that there was no statute or Agency policy which could have created an expectation of Agency nonuse of submitted data, and that without such an expectation, there was no property interest and thus no taking. The Pennwalt court was sensitive to these same concerns and summarily accepted the Third Circuit's conclusions.

The Petrolite court, though it assumed that there was a property interest in the disputed data, also refused to enjoin EPA's use of the data. In evaluating the challenge in terms of the three chronological categories of data, the court disposed of the post-1978 data because there could be no expectation of Agency nonuse when the statute specified that EPA could use it in certain circumstances. Similarly, there could be no expectation of Agency nonuse [11 ELR 10162] for pre-1970 data because when the data was submitted, the Agency was in fact using the data and the FIFRA amendments had not changed that procedure.

As to data submitted between 1970 and 1978, a balancing test indicated that plaintiff's loss was insignificant relative to the public interest in increasing competition and illuminating the pesticide registration process. Specifically, the court erected a tough standard and found that (1) there was only a partial loss of use protection (i.e., the original submitter retained 15 years of compensated use) and only one use among many had been affected, (2) the plaintiff failed to prove that the provision destroyed the ability to earn a reasonable return on its investment in the data, and (3) plaintiff failed to rebut the presumption that the primary use of the data was to support plaintiff's own registration.⁶⁴ Thus, plaintiff's loss had to be chalked up to the costs of "the advantages of living in a civilized society."

Disclosure

As with the challenge to the use provision, the Amchem court enjoined EPA's disclosure of pre-1970 data as an unconstitutional taking. In that court's opinion, the inherent value of the trade secrets and the competitive advantage associated with their confidentiality simply outweighed Congress' goals of public disclosure of safety and efficacy data and the promotion of competition in the pesticide industry.While the Third Circuit in Chevron did not hold that disclosure of trade secret data was unconstitutional, it strongly suggested in dicta that if the issue were presented directly, it would so hold. Pennwalt was presented directly with the issue of disclosure and arrived at the same conclusion as that reached in Amchem and suggested in Chevron. In rejecting EPA's argument that Congress could make available information that educates the public about the nature of pesticides, the court emphasized the costs associated with the generation of the data and the importance of confidentiality.

Petrolite, on the other hand, represents a significant departure from the earlier opinions. Again using the "expectation" theory employed in Chevron, Pennwalt, and its own treatment of the challenge to the use provision, the court held that data submitted after 1978 could not have carried an expectation of nondisclosure since the statute expressly provided otherwise. Moreover, even in the retroactive context, there was no taking since the plaintiff had failed to rebut the presumption that it submitted the data to support its own registration or to produce evidence of its inability to earn a reasonable return on the investment in the data. Once again, this test makes it very difficult to protect data beyond that provided in the statute. In particular, submitters will have a difficult time demonstrating that they have not developed such data primarily to support their own registration applications.

Conclusion

From the relatively recent challenges to FIFRA's use and disclosure provisions, certain trends have become apparent. In the "use" area, it appears that the Agency can use pre-1970 data in a "me too" registration. Petrolite goes a significant step further and holds that FIFRA's use provision does not represent a taking for any data submitted. Whether this extension will be followed remains to be seen.

The "disclosure" issue is not nearly as clear. Two district courts have held, albeit without sophisticated and cogent analysis, that disclosure, even of pre-1970 data, is a taking. The Third Circuit has yet to issue a definitive holding but has suggested in dicta that it is leaning the same way. The Petrolite decision, however, is a clear break from this pattern in terms of both result and analysis. The court's examination of the statute, its history, and the competing interests is more thorough and detailed than the two other district courts and appears to illuminate the issues and Congress' intent much better. Unlike several other courts, the Petrolite court resisted the temptation to wade into the economic and public policy debate between the parties and instead applied a traditional Fifth Amendment analysis. Takings law, of course, has never favored plaintiffs, and the Petrolite test for determining whether the use and disclosure provisions are unconstitutional seems to make it nearly impossible for data submitters to challenge FIFRA's use and disclosure provisions on constitutional grounds successfully.

While these cases have in some ways been unfavorable to pesticide manufacturers, industry may find Congress more receptive to their complaints. Various congressional committees are now discussing these and related issues in the context of amending FIFRA and the Freedom of Information Act. While the Reagan Administration does not support efforts to amend FIFRA at the present time,⁶⁵ it is clear that Congress is very interested in the issues, and amendments regarding use and disclosure of trade secret data are certainly possible. Until these efforts are finalized, however, industry, EPA, and the public must look to these recent cases as the latest word regarding the use and disclosure of data submitted under FIFRA.

1. Gannon, FIFRA and the "Taking" of Trade Secrets, 8 B.C. ENVT'L AFF. L. REV. 593 (1980), quoting from S. REP. NO. 334, 95th Cong., 1st Sess. 27, 28, 34 (1977) [hereinafter cited as Trade Secrets].

2. Trade Secrets, supra note 1, at 593.

3. Act of June 25, 1947, ch. 125, 61 Stat. 163 (codified at 7 U.S.C. §§ 135-135k, ELR STAT. & REG. 42301).

4. See 7 U.S.C. § 136a, ELR STAT. & REG. 42309.

5. 5 U.S.C. § 552, ELR STAT. & REG. 41015. See 40 C.F.R. pt. 2 (1980) for EPA's regulations regarding public disclosure of information.

6. 641 F.2d 104, 11 ELR 20156 (3d Cir. 1981), cert. denied, 48 U.S.L.W. 3950 (June 22, 1981).

7. 481 F. Supp. 195, 10 ELR 20262 (S.D.N.Y. 1979).

8. No. 80-2400, 11 ELR 20762 (E.D. Pa. Apr. 10, 1981).

9. No. 80-0798, 11 ELR 20751 (D.D.C. June 25, 1981).

10. See 7 U.S.C. §§ 135a(a), 136a(a), ELR STAT. & REG. 42304, 42309.

11. Trade Secrets, supra note 1, at 594.

12. Id. at 599. See Chevron Chemical Co. v. Costle, 443 F. Supp. 1024, 1026, 8 ELR 20362, 20363 (N.D. Cal. 1978).

13. Mobay Chemical Corp. v. Costle, 447 F. Supp. 811 (W.D. Mo. 1978) (three judge panel), appeal dismissed for lack of jurisdiction, 439 U.S. 320 (1979), rehearing denied, 440 U.S. 940 (1979) (plaintiff challenged FIFRA as amended in 1975 on grounds that the use provision, § 3(c)(1)(D), violated the Takings Clause of the Fifth Amendment. On review of a three-judge panel's dismissal of the complaint, the U.S. Supreme Court dismissed the appeal, reasoning that § 3(c)(1)(D) did not address pre-1970 data and thus the challenge was to agency policy rather than the constitutionality of the statute. The panel, therefore, had been without jurisdiction to hear such a challenge). EPA's policy was to use any information in its files, without disclosure, in the review of "me too" applications. Petrolite Corp. v. Costle, 11 ELR at 20752 n.2.

14. Trade Secrets, supra note 1, at 598. See also Act of June 25, 1947, 7 U.S.C. §§ 135-135k; Trade Secrets Act, 18 U.S.C. § 1905 (prohibiting unauthorized disclosure of trade secrets and other confidential information by federal employees).

15. Pub. L. No. 92-516, 86 Stat. 973 (1972).

16. While preserving the registration process, the amendments made further requirements for data submission. Dow Chemical Co. v. Train, 423 F. Supp. 1359, 1362, 7 ELR 20262, 20263 (E.D. Mich. 1976). The amendments also required reregistration of pesticides previously registered under FIFRA in order to ensure that the more stringent data requirements were met for older products as well as for newer ones. 423 F. Supp. at 1362, 7 ELR at 20263. See Trade Secrets, supra note 1, at 597.

17. 86 Stat. 979 (1972).

18. 7 U.S.C. § 136h(a) & (b), ELR STAT. & REG. 42315.

19. 7 U.S.C. § 136a(c)(1)(D), ELR STAT. & REG. 42309.

20. Id.

21. See Chevron Chemical Co. v. Costle, 641 F.2d at 109, 11 ELR at 20158.

22. Id. Nor did FEPCA address the issue of whether the initial submitter had a common-law property right in the test data in agency files, no matter when submitted, which the government could not use without compensation being offered to the initial submitter. Id. at 109-10, 11 ELR at 20158.

23. Id. See 86 Stat. 975 (1972) (amending § 3(c)(1)(D) of FIFRA).

24. Act of November 28, 1975, Pub. L. No. 94-140, 89 Stat. 751.

25. Id., § 12, 89 Stat. 855 (amending § 3(c)(1)(D) of FIFRA).

26. Chevron Chemical Co. v. Costle, 641 F.2d at 110, 11 ELR at 20159.

27. Id. at 111, 11 ELR at 20159. See Letter from EPA Administrator Douglas M. Costle to Rep. Foley, Chairman, House Agriculture Committee, reprinted in H.R. REP. NO. 95-663, 95th Cong., 1st Sess. 53 (1977), reprinted in [1978] U.S. CODE CONG. & AD. NEWS at 2026.

28. Federal Pesticide Act of 1978, Pub. L. No. 95-396, 92 Stat. 819 (codified at 7 U.S.C. § 136-136y, ELR STAT. & REG. 42301).

29. 7 U.S.C. § 136a(c)(1)(D), ELR STAT. & REG. 42309.

30. See, e.g., Mobay Chemical Corp. v. Costle, 447 F. Supp. at 824.

31. 7 U.S.C. § 136h(d), ELR STAT. & REG. 42315.

32. 7 U.S.C. § 136h(d)(1), ELR STAT. & REG. 42315.

33. Petrolite Corp. v. EPA, 11 ELR at 20752 n.7. Any data disclosed remain subject to applicable compensation and exclusive use limitations when used for registration purposes. 7 U.S.C. § 136h(d)(1), ELR STAT. & REG. 42315. See Trade Secrets, supra note 1, at 602-03. The statute also prohibits EPA from disclosing any "information which in [its] judgment contains or relates to trade secrets or commercial or financial information obtained from a person and privileged or confidential …" except in limited circumstances. 7 U.S.C. § 136h(b), ELR STAT. & REG. 42315. If EPA proposes to disclose information that the submitter believes to be a trade secret, EPA must provide thirty days written notice of the Agency's judgment that the data are not trade secrets. Id. at § 136h(c), ELR STAT. & REG. 42315.

34. Trade Secrets, supra note 1, at 604-05. After 10 years of exclusive use, the subsequent registrant must compensate the data producer for 15 years from the date of submission of the data. McGarity & Shapiro, The Trade Secret Status of Health and Safety Information: Reforming Agency Disclosure Policy, 93 HARV. L. REV. 837, 875 (1980). Thus, a data submitter could receive 10 years of exclusive use and up to an additional five years of compensated use for the data.

35. 481 F. Supp. 195, 10 ELR 20262 (S.D.N.Y. 1979).

36. 481 F. Supp. at 198, 10 ELR at 20263.

37. Id. at 199, 10 ELR at 20264. The Second Circuit Court of Appeals cast some doubt on the validity of this decision in Union Carbide Agricultural Products Co. v. Costle, 10 ELR 20846 (2d Cir. Sept. 24, 1980), cert. denied, 49 U.S.L.W. 3710 (Mar. 24, 1981), rehearing denied, 49 U.S.L.W. 3825 (May 4, 1981), in which the same district court had issued a preliminary injunction prohibiting EPA from using and disclosing trade secret research and test data submitted on or before September 30, 1978. 10 ELR at 20847. The court of appeals reversed, holding that there was a serious question whether appellees would succeed in proving that all of their datacould have been characterized as a trade secret prior to the 1978 FIFRA amendments. The court chided the district court for failing to distinguish between the use and disclosure of data and erroneously treating them alike for purposes of the temporary injunction, and questioned whether appellees were entitled to rely on a vested right of confidentiality in their data, most of which were filed before any statutory provision for confidentiality existed.

38. 499 F. Supp. at 737, 11 ELR at 20150.

39. 499 F. Supp. at 738, 11 ELR at 20150-51. The court noted that if the 1978 amendments had followed the U.S. Supreme Court's holding in Mobay Chemical Corp. v. Costle, see supra note 13, that FIFRA did not address pre-1970 data, the absence of express reference to pre-1970 data might well have proved fatal to EPA's case. 499 F. Supp. at 738-39, 11 ELR at 20151. Congress' failure to address the issue and to treat pre-1970 data as it had been in the past was more understandable, however, since it occured before the opinion was rendered. Id.

40. 499 F. Supp. at 740, 11 ELR at 20151. Despite its expressed intent not to render an opinion on the takings issue, the court stated that since plaintiff had a remedy under the Tucker Act, EPA's actions could not be enjoined as an unconstitutional taking without just compensation. 499 F. Supp. at 742-43, 11 ELR at 20152-53. Whether the court was suggesting that an injunction was not a proper remedy or whether there simply was not a taking to be enjoined is not entirely clear.

Two months after the opinion was issued, plaintiff petitioned the court for an injunction against EPA pending plaintiff's appeal to the Third Circuit. Chevron Chemical Co. v. Costle, 499 F. Supp. 745, 11 ELR 20154 (D. Del. 1980). The court denied the motion and rejected plaintiff's contention that the 1978 amendments to FIFRA violated due process by retroactively divesting plaintiff of its property right of exclusive use. According to the court, the salient issue was whether plaintiff had a legitimate expectation of exclusive use and whether it could be defeated in the manner prescribed by Congress. After balancing the relative harm to plaintiff, the interests of the federal government, and the probability of plaintiff succeeding on the merits, the court answered the issue negatively and concluded that injunctive relief was inappropriate. 499 F. Supp. at 748, 11 ELR at 20155.

41. Chevron Chemical Co. v. Costle, 641 F.2d at 105-06, 11 ELR at 20156.

42. 641 F.2d at 106, 11 ELR at 20156.

43. 18 U.S.C. § 1905.

44. 641 F.2d at 106-07, 11 ELR 20156-57.

45. 641 F.2d at 117, 11 ELR at 20162.

46. 11 ELR 20762 (E.D. Pa. Apr. 10, 1981).

47. 11 ELR at 20762.

48. Id.

49. 11 ELR at 20751 (D.D.C. June 25, 1981).

50. Id. at 20752.

51. Id. at 20753.

52. Id.

53. Id., quoting from Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922).

54. 11 ELR at 20753. The court felt that it was significant that plaintiff failed to claim that the provision destroyed its ability to earn a reasonable return on its investment in the disputed hazard and efficacy data. Id. Moreover, the court was impressed by the fact that the protection accorded the data was not entirely eliminated; plaintiff was still entitled to 15 years of compenstated use. Id.

55. Id.

56. Id. (citing authorities).

57. Id., quoting from Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 422 (1922) (Brandeis, J., dissenting).

58. 481 F. Supp. 195, 10 ELR 20263 (S.D.N.Y. 1979). The court's analysis is difficult to follow because it does not differentiate clearly between use and disclosure.

59. 11 ELR 20762, 20763 (E.D. Pa. Apr. 10, 1981).

60. Id. at 20763.

61. 11 ELR 20751, 20754 (D.D.C. June 25, 1981).

62. 11 ELR at 20753.

63. Id. at 20754.

64. Id. at 20753.

65. 8 TOXIC MATERIALS NEWS 233 (July 19, 1981).