786 F. Supp. 2d 177
D.D.C.2011Background
- Nalco sells OxiPRO, a system combining ammonia/urea stabilizers with sodium hypochlorite to control slime in pulp and paper mills.
- EPA concluded in December 2010 that Nalco's ammonia and urea additives are pesticides requiring FIFRA registration, but allowed continued sales to existing customers under the December 2010 Order.
- In December 2010 EPA issued a final Letter Determination and a December 29, 2010 Stop Sale Order limiting new sales but permitting existing customers to continue under registration review.
- Ashland and Buckman filed petitions challenging EPA's position; Nalco then faced an April 18, 2011 draft Stop Sale Order and final Stop Sale Order restricting urea sales and severely limiting ammonia sales.
- Nalco sued in district court seeking a preliminary injunction to enjoin the April 2011 Stop Sale Order while EPA reconsiders registration, arguing the Order is arbitrary and capricious.
- The court found a jurisdictional basis to review the April 2011 Order, held that EPA’s April action was arbitrary and capricious, granted Nalco’s preliminary injunction, preserved the December 2010 Order, and remanded to EPA for rational reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nalco has likelihood of success on the APA claim | Nalco contends EPA's April 2011 Order is arbitrary and capricious. | EPA asserts enforcement discretion and argues no review of enforcement posture is required. | Nalco has likelihood of success; Order deemed arbitrary and capricious. |
| Whether the Stop Sale Order is arbitrary and capricious under the APA | The April Order lacks a rational basis and relied on impermissible/irrational factors. | EPA decisions are within agency expertise and based on risk assessment and enforcement discretion. | Order found arbitrary and capricious; remand warranted. |
| Irreparable harm to Nalco if injunction denied | Nalco would suffer loss of longstanding customers, reputation, and market position with irreparable harm. | Alternative products exist and market disruption claims are contested by competitors. | Irreparable harm established; supports injunction. |
| Balance of equities and public interest | Maintaining the December 2010 order while re-evaluating is necessary to prevent harm absent injunctive relief. | Enforcement of FIFRA should reflect EPA's current enforcement posture to protect public interest. | Equities favor Nalco; public interest served by remand and injunction. |
Key Cases Cited
- Heckler v. Chaney, 470 U.S. 821 (1985) (agency discretion in enforcement generally reviewable only for final actions)
- Association of Irritated Residents v. EPA, 494 F.3d 1027 (D.C. Cir. 2007) ( Heckler applied; reviewing court not to review enforcement decisions lacking standards)
- Robbins v. Reagan, 780 F.2d 37 (D.C. Cir. 1985) (change in enforcement direction triggers scrutiny of rationale)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agency action reviewed for rationality and justification with deference to expertise)
- Bowen v. American Hosp. Ass'n, 476 U.S. 610 (1986) (requires rational connection between facts and agency choice)
- Winter v. NRDC, Inc., 555 U.S. 7 (2008) (preliminary injunction requires likelihood of success, irreparable harm, balance of equities, and public interest)
- Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288 (D.C. Cir. 2009) (four-factor test on preliminary injunction and sliding-scale considerations limited by Winter)
- CSI Aviation Servs., Inc. v. Dept. of Transp., 637 F.3d 408 (D.C. Cir. 2011) (final enforcement action subject to judicial review)
- Marsh v. Oregon Natural Res. Council, 490 U.S. 360 (1989) (scope of arbitrary-and-capricious review in agency decisions)