Environmental Defense Fund v. Environmental Protection Agency

No. 75-2259 (D.C. Cir. January 6, 1976)

In a supplemental opinion issued in response to a petition for rehearing, the court reiterates its earlier holding, 7 ELR 20012, that § 7(c) of the Administrative Procedure Act does not preclude assignment of the burden of persuasion to the opponent of an Environmental Protection Agency order suspending the registrations of the pesticides heptachlor and chlordane under § 6(c)(2) of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). The court also rules this case is in any event excepted from § 7(c) because the location of the burden of proof is "otherwise provided by statute." Numerous FIFRA cases and the legislative history show that a 1964 amendment to the statute was specifically intended to shift the burden of proof to the registrant in suspension proceedings.

Counsel are listed at 7 ELR 20012.

Before: LEVENTHAL, ROBINSON and WILKEY, Circuit Judges.

[7 ELR 20114]

ORDER

On consideration of the petition of Velsicol Chemical Corporation for rehearing it is

ORDERED by the Court that the aforesaid petition for rehearing is denied.

SUPPLEMENTAL OPINION ON PETITION FOR REHEARING

LEVENTHAL, Circuit Judge: Velsicol argues in its petition for rehearing that in upholding the Administrator's allocation of the burden of proof to the registrant this Court misinterpreted § 7c of the Administrative Procedure Act. Velsicol points out that the interpretation adopted by this Court was not advanced by any of the parties and that, in fact, the problem of interpreting the APA — as opposed to section 6(c)(2) of FIFRA — was not briefed or argued in this proceeding.

In light of these contentions, we have reexamined our analysis of the APA and FIFRA. After further study, we are still of the view that the Administrative Procedure Act does not preclude the assignment of the burden of persuasion to the opponent of an order. So far as this case is concerned, however, Velsicol's position is undermined by still another doctrine, that in any event the controlling statute is FIFRA. We hold that in light of the legislative history of FIFRA, and the numerous cases holding that its 1964 amendment was specifically intended to shift the burden of proof from the Secretary to the registrant, this case is one where the location of the burden of proof is, in the language of the APA, "otherwise provided by statute." 5 U.S.C. § 556(d).

As to the APA, our opinion holds that the "burden of proof" it casts upon the "proponent" is the burden of coming forward with proof, and not the ultimate burden of persuasion.

Velsicol claims that the precedents of this Circuit¹ and case law in other circuits² establish that under the APA the proponent of an order bears the burden of persuasion.

We have examined the cited cases and find no support for that view. Time does not permit discussion of each case. We shall refer to a few as illustrations.

Velsicol calls attention to National Airlines, Inc. v. Civil Aeronautics Board, 112 U.S. App. D.C. 119, 300 F.2d 711 (D.C. Cir. 1962). There we affirmed an order that held that once a complaining City had demonstrated the inadequacy of existing airline service, the airline bore the burden of proving the economic infeasibility of expanding service. The court explained:

Petitioner argues that the Administrative Procedure Act, § 7(c), 69 Stat. 241 (1946), 5 U.S.C. A. § 1006 (c), which places the burden of proof upon the proponent of an order, prohibits the Board from placing the burden of proving economic infeasibility upon the carriers. We think that once the Board has established that existing service is inadequate to meet the needs of a community, it has discharged its burden of proof. Economic infeasibility is more like an affirmative defense than an element of the Board's case. Accordingly we think that the Board properly placed the burden of producing evidence of economic infeasibility upon petitioner.

112 U.S. App. D.C. at 123 n. 12, 300 F.2d at 715 n. 12. Far from indicating that the APA governs allocation of the burden of persuasion, this passage indicates that it was the burden of producing evidence that was the central [7 ELR 20115] concern of the APA.³

Our examination of the precedents cited from other Circuits has similarly failed to disclose a case holding that under the APA the proponent of an order bears the burden of persuasion. Most of the cases cited by Velsicol appear to think of "burden of proof" as the burden of producing evidence. See, e.g., N.L.R.B. v. Atlanta Coca-Cola Bottling Co., 293 F.2d 300 (5th Cir.) rehearing denied, 296 F.2d 896 (1961); United States v. Springer, 491 F.2d 239, 242 (9th Cir.) cert. denied, 419 U.S. 834 (1974); Kirby v. Shaw, 358 F.2d 446 (9th Cir. 1966).⁴ The one case cited by Velsicol that is explicitly concerned with the "burden of persuasion" is Kerner v. Flemming, 283 F.2d 916, 921-22 (2d Cir. 1960). Judge Friendly assumed arguendo ("We may agree") that under the APA and the Social Security Act "an applicant for a disability pension has the ultimate burden of persuasion." This did not govern the result, for the court did not affirm the denial of benefits but remanded for the taking of further evidence.⁵

As for American Trucking Associations v. United States, 344 U.S. 298, 319 (1953), in holding that § 7(c) of the APA did not apply to the proceedings in suit, the Court merely put it as an assumption for sake of discussion:

But even assuming that the Commission was a statutory "proponent" of the regulation and that it did not actively introduce the requisite degree of proof in support of its position, we think it plain that the requirement is inapplicable to the instant proceedings.

Our further research outside our circuit has yielded Old Ben Coal Corp. v. Interior Bd. of Mine Operations Appeals, 523 F.2d 25 (7th Cir. 1975), involving a situation and a ruling like ours. Appellants challenged a regulation that placed on the mine owner the burden of proving by a preponderance of the evidence the invalidity of the imminent danger withdrawal orders issued against him. The court held that in its view the Government bore the initial burden of going forward with the evidence, but that once it had presented a prima facie case, the mine owner would be required to bear the "ultimate burden of proof." 523 F.2d at 30.⁶ The Court explained:

In practice . . . the burden of proof is split, with the Government bearing the burden of going forward, and the mine operator bearing the ultimate burden of persuasion. We think that this accords with the intent of Congress as expressed in the . . . Committee comment on section 7(c) of the Administrative Procedure Act (now codified as 5 U.S.C. § 556(d)) [citations omitted]

The legislative history of § 7(c) of the APA confirms the Seventh Circuit's interpretation. We set out the whole of the pertinent paragraph of the Senate Committee Report:⁷

That the proponent of a rule or order has the burden of proof means not only that the party initiating the proceeding has the general burden of coming forward with a prima facie case but that other parties, who are proponents of some different result, also for that purpose have a burden to maintain. Similarly the requirement that no sanction be imposed or rule or order be issued except upon evidence of the kind specified means that the proponents of a denial of relief must sustain such denial by that kind of evidence. For example, credible and credited evidence submitted by the applicant for a license may not be ignored except upon the requisite kind and quality of contrary evidence. No agency is authorized to stand mute and arbitrarily disbelieve credible evidence. Except as applicants for a license or other privilege may be required to come forward with a prima facie showing, no agency is entitled to presume that the conduct of any person or status of any enterprise is unlawful or improper.

Plainly, this is all concerned with the proponents being required to show the burden of producing evidence.

The House Report⁸ fully confirms this view. It contains the language quoted above from the Senate Report and summarizes its effect:

In other words, this section means that every proponent of a rule or order or the denial thereof has the burden of coming forward with sufficient evidence therefor; and in determining applications for licenses or other relief any fact, conduct, or status so shown by credible and credited evidence must be accepted as true except as the contrary has been shown or such evidence has been rebutted or impeached by duly credited evidence or by facts officially noticed and stated. (Emphasis added).

Velsicol points out that an earlier version of S.7 had provided:

The proponent of a rule or order shall have the burden of proceeding except as statutes otherwise provide." (S.Doc. 248, 79th Cong., 2d Sess. 11, 158, 300 (1945)).

A Senate Judiciary Print comparing the earlier and later versions of the bill stated:

The provision relating to burden of proof is the standard rule. Senate Doc. 248 at page 31.

Velsicol contends that this change in language was intended to make clear that the proponent of an order would also bear the burden of persuasion.

[7 ELR 20116]

This argument is more revealing of the ingenuity of counsel than of the intent of Congress. If the language of the bill had been deliberately changed to govern placement of the burden of persuasion, the Committee reports accompanying the bill would have made that point.

Lastly, we note that our interpretation of § 7(c) is supported by the Attorney General's Manual on the Administrative Procedure Act, published in 1947 "primarily as a guide to the agencies in adjusting their procedures to the requirements of the Act." (Intro. by Att. Gen. Tom Clark, page 6). The Manual does not mention the change in language as bearing on location of the burden of persuasion. On the contrary, it states (at p. 75):

There is some indication that the term "burden of proof" was not employed in any strict sense, but rather as synonymous with the "burden of going forward". In either case, it is clear from the introductory clause that this general statement was not intended to repeal specific provisions of other statutes which, as by establishing presumptions alter what would otherwise be the "burden of proof" or the burden of going forward".

Section 7(c) of the APA provides that the proponent of a rule or order shall have the burden of proof "[e]xcept as otherwise provided by statute." Because we held in our panel opinion that § 7(c) was not intended to govern the allocation of the burden of persuasion, we found it unnecessary to decide whether suspension hearings held under FIFRA might not qualify as a situation where the location of the burden of proof was "otherwise provided by statute." Velsicol's challenge has led us to focus again on the problem. We have examined the relationship between FIFRA and the APA and conclude that suspension hearings do indeed fal within the exceptions to § 7(c).

This court has repeatedly held that the 1964 amendments to FIFRA were specifically intended to shift the burden of proof from the Secretary (now the Administrator) to the registrant. EDF v. Ruckelshaus, 142 U.S. App. D.C. 74, 93, 439 F.2d 584, 593 (D.C. Cir. 1971); EDF v. EPA [Aldrin and Dieldrin], 150 U.S. App. D.C. 348, 465 F.2d 528, 532 (D.C. Cir. 1972); EDF v. EPA [Shell Chemical Co.], 167 U.S. App. D.C. 71, 76, 510 F.2d 1292, 1297 (1975). In EDF v. Ruckelshaus, supra, the court explained:

Prior to 1964, the FIFRA required the Secretary to register "under protest" any pesticide or other item that failed to meet the statutory requirements. The product remained on the market, and the Secretary reported the violation to the United States Attorney for possible prosecution. In 1964 the statute was amended to eliminate the system of protest registration, and substitute the present administrative mechanism for cancelling registrations. The stated purpose of the amendment was to protect the public by removing from the market any product whose safety or effectiveness was doubted by the Secretary.

The House Committee Report accompanying the bill specifically stated:

The principal effect of registration under protest is to shift the burden of proof from the registrant to the Government. If the product is not registered, the penalty or seizure provisions can be applied on that ground. If it is registered under protest, the Government has the burden of proving that the product does not comply with the act.

Thus, at present, the Secretary can be required to register a product even though he is convinced that it is ineffective and dangerous to human life. He can proceed against it in such case only after it has moved in interstate commerce, and he then has the burden of proving that it violates the law. The bill would correct this situation and afford greater protection to the public by repealing the authority for registration under protest. In its place the bill provides that applicants dissatisfied with the Secretary's action in refusing or canceling registration may have recourse to advisory committee proceedings, public hearings, and eventually judicial review. Thus the bill affords adequate protection to the public, and protects applicants for registration from arbitrary or ill-advised action by the Department.

H.R. Rep. No. 1125, 88th Cong., 1st Sess. 2 (1964). Thus, we found that "[t]he legislative history supports the conclusion that Congress intended any substantial question of safety to trigger the issuance of cancellation notices, shifting to the manufacturer the burden of proving the safety of his product." 142 U.S. App. D.C. at 93, 439 F.2d at 593.⁹

Subsequent decisions reaffirmed this interpretation. In the 1972 EDF case, we said (150 U.S. App. D.C. at 352, 465 F.2d at 532):

The burden of establishing the safety of a product requisite for compliance with the labeling requirements, remains at all times on the applicant and registrant.

In the 1975 EDF case, 510 F.2d at 1297, we reiterated this principle in the context of a challenge to a suspension order. Other circuits have similarly concluded that the registrant bears the burden of proof. E.g., Dow Chemical Corp. v. Ruckelshaus, 477 F.2d 1317, 1324 (8th Cir. 1973); Southern National Mfg. Co. v. EPA, 470 F.2d 194, 196-97 (8th Cir. 1973); Continental Chemiste Corp. v. Ruckelshaus, 461 F.2d 331, 335 (7th Cir. 1972); Stearns Electric Paste Corp. v. EPA, 461 F.2d 293, 303 (7th Cir. 1972).

[7 ELR 20117]

Velsicol argues that the 1972 Amendments to FIFRA, which provided that a suspension hearing "shall be held in accordance with the provisions of subchapter II of Chapter 5 of Title 5", operated to shift the burden of proof to the agency. See FIFRA § 6(c)(2), 7 U.S.C. § 136d(c)(2) (Supp. V 1975). In light of the clarity with which Congress originally undertook to fix the burden of proof (persuasion) on the registrant, and the firmness of the courts' interpretation of the 1964 amendment,¹⁰ we cannot believe that the general incorporation of APA standards 1972 was intended to shift the burden of proof away from the registrant sub silentio.¹¹ As the ALJ pointed out, "It would be strange indeed, that the 1972 amendment to the act would change the cornerstone of the statute without mention." ALJ Recommended Decision at 73, n. 12. This conclusion would be sound even if the APA, by itself, indisputably put the burden of persuasion on the proponent of suspension. It is strengthened by our conclusion (Part I) that the APA does not have that consequence.

Lastly, we do not discern in the statute an allocation of burden of proof that is different for suspension hearings than for registration or cancellation proceedings. While the suspension proceeding is in progress, the public is subject to the same risks of injury that are present in the cancellation context, the very risks which caused Congress to shift the burden of proof to the registrant in the original registration. Information relevant to the safety issues is— or should be — in the possession of the manufacturer. Cf. Commonwealth of Puerto Rico v. Federal Maritime Comm'n, 152 U.S. App. D.C. 28, 468 F.2d 872 (D.C. Cir. 1972). We agree with Judge, now Justice, Stevens that: "If a presumption of proper use at the end of a 5-year period does not shift the burden of proof in the [re-registration situation], we think there is even less reason to shift the burden in the middle of a 5-year term if the Administrator should then become aware of previously unknown risks associated with the use of a product." Stearns Electric Paste Co. v. EPA, supra, 461 F.2d at 305 n. 38 (7th Cir. 1972). To place the burden of proof on the agency in suspension hearings would not be a reasonable construction of FIFRA.

Our view that this case is one in which the allocation of the burden of proof is controlled by the scheme of FIFRA rather than by the APA is firmly supported by, and interrelated with, the doctrine set forth in Commonwealth of Puerto Rico v. Federal Maritime Comm'n, supra, that the general rule imposing the burden of proof on the proponent of an order is "subject to reasonable construction and limitation." 152 U.S. App. D.C. at 37, 468 F.2d at 881. The governing statute in that case provided that the burden of proof was to be borne by the carrier in a proceeding in which the proposed rates had been suspended, but did not explicitly provide for the case where the Commission permitted the rates to go into effect. We held that even in the absence of explicit statutory guidance, the burden of proof was to be borne not by the shipper proposing a termination of the existing rate, but by the carrier defending that rate and the increases it wrought. In support of this conclusion we noted the general regulatory pattern and the fact that the carriers were the parties "naturally possessed of pertient evidence." Both of those considerations are relevant with respect to the burden of proof in FIFRA suspension hearings.

* * *

In summary, we find that in a suspension hearing conducted under FIFRA § 6(c)(2), the burden of persuasion rests ultimately on the registrant. In its 1964 amendment to the Act, Congress made clear that the public was not to bear the risk of uncertainty concerning the safety of a covered poison. In the absence of an equally explicit countermanding direction from Congress, we will not force the public to assume it.

1. Velsicol cites National Airlines, Inc. v. C.A.B., 112 U.S. App.D.C. 119, 123 n. 12, 300 F.2d 711, 715 n. 12 (1962); Schramm v. Physical Therapists Examining Board, 129 U.S. App.D.C. 347, 394 F.2d 972 (1967), cert. denied, 390 U.S. 987 (1968), aff'g 219 A.2d 846 (D.C.C.A. 19-6); Philadelphia Co. v. S.E.C., 84 U.S. App. D.C. 73, 175 F.2d 808 (1948), vacated as moot, 337 U.S. 901 (1949).

2. Velsicol cited United States v. Springer, 491 F.2d 239, 242 (9th Cir. 1974); Day v. National Trans. Safety Board, 414 F.2d 950 (5th Cir. 1969; N.L.R.B. v. Atlanta Coca-Cola Bottling Co., 293 F.2d 300 (5th Cir. 1961); Kerner v. Fleming, 283 F.2d 916, 921-22 (2d Cir. 1960); Kirby v. Shaw, 358 F.2d 446, 449 (9th Cir. 1960).

3. The other decisions of this Circuit do not detract from this conclusion. In Philadelphia Co. v. SEC, supra at note 1, the SEC had undertaken action with respect to the company by amending its Rules. It had not apprised the company of the facts upon which its action was based, "and it failed to introduce or receive evidence, to hear witnesses, to permit cross-examination, and to make a proper transcript of record." 175 F.2d at 818. It was in this context — in the total absence of an adjudicatory hearing — that we held that the Commission had "erroneously failed to assume the burden of proof in respect to the propriety of its proposed action." Id. In Schramm v. Physical Therapists Board, supra, at note 1, we upheld a decision of the D.C. Court of Appeals which found that an applicant had failed to meet her statutory duty of "present[ing] evidence" of her qualifications. 219 A.2d at 847.

4. In Atlanta Coca-Cola, for example, the court was concerned with the General Counsel's failure to produce evidence of discriminatory intent as to each of the individual employees, rather than with the placement of the burden of persuasion. See, e.g., 292 F.2d at 309 ("This is not a case where conflicting inferences of equal weight may be drawn from the record.")

5. That the court did not intend this passage to state doctrine with respect to the allocation of the burdens of proof or persuasion is indicated by its appended footnote 8, which stated "Congress has often spoken more clearly when it has desired to fix a burden of proof. [citing statutes]."

6. Judge Pell dissented.

7. S. Rep. No. 752, 79th Cong., 1st Sess. 22 (1945), reprinted in S. Doc. 248 at 208.

8. H.R. Rep. 1980, 79th Cong., 2d Sess. 34 (1946), reprinted in S. Doc. 248 at 270.

9. We quoted in a footnote from additional legislative history:

34. See 110 Cong.Rec. 2948-49 (1964) (remarks of Congresswoman Sullivan):

I am strongly in favor of the legislation now before you to require industry, rather than the Federal Government, to shoulder the burden of proof in connection with the marketing of pesticides which may be unsafe for use as intended.

* * *

The burden of proof should not rest on the Government, because great damage can be done during the period the Government is developing the data necessary to remove a product which should not be marketed.

See also H.R.Rep. No. 1125, supra; S.Rep. No. 573, 88th Cong., 2d Sess. (1964). Our construction of the FIFRA also finds strong support in a 1969 report of the House Committee on Government Operations, reviewing the administration of the statute. The Committee strongly criticized the administrators for failing to take "prompt or effective cancellation action in cases where it had reason to believe a registered product might be ineffective or potentially hazardous. * * * A mistaken belief that positive evidence of hazard — rather than simply a lack of adequate assurance of safety — is necessary to support a cancellation action appears to have been a factor in [the] failure to initiate such action in cases where it was obviously justified." H.R.Rep. No. 91-637, 91st Cong., 1st Sess. 15-16 (1969).

10. Significantly, our decisions had made clear that the registrant bore the burden of proof in suspension hearings even before the 1972 Amendments had been enacted. Our 1971 decision in EDF v. Rucklshaus noted:

Because the statute places on the manufacturer the burden of proving the continued safety of his products, see note 34 infra, administrative order of suspension is entitled to greater judicial deference than an order denying suspension.

142 U.S. App. D.C. at 92 n. 22, 439 F.2d at 592 n. 22.

Our statement in EDF v. EPA, 150 U.S. App. D.C. at 352, 465 F.2d at 532, that the burden of proof was "at all times on the applicant and registrant" came 6 months before the enactment of the amendments to FIFRA. The decision of the Seventh Circuit that the registrant bore the burden of proof in suspension proceedings similarly preceded the passage of the Act by 6 months. See Stearns Electric Paste Co. v. EPA, 461 F.2d 293 (7th Cir. 1972).

11. Velsicol has not cited nor have we found any statements in the legislative history suggesting that the incorporation of APA standards for suspension hearings was intended to shift the burden of proof.