WASHINGTON, D.C. 20460
                                      JUH   3  1996
                                                                            OFFICE OF
                                                                      PREVENTION. PESTICIDES AND
                                                                         TOXIC SUBSTANCES
                         Pesticide Regulation (PR) NOTICE 96-4

Persons Responsible for Federal Registration and Reregistration of Pesticide

Label Statements Involving Product Efficacy and Potential for Harm to

       This notice explains EPA procedures in approving pesticide labels that include claims
relating to the efficacy of agricultural pesticides and provides a warning to growers regarding
reliance on label statements regarding pesticide efficacy. EPA is issuing this notice at this time to
correct a misunderstanding regarding the FIFRA label approval process and efficacy claims that is
reflected in a series of court decisions concerning the preemptive effect of FIFRA.


       A.  Registration and the Label Approval Process

       EPA approves pesticide labels in the process of registering a pesticide Under FIFRA.
FIFRA specifies that EPA shall register a pesticide if:

       (1) its composition is such as to warrant the proposed claims for it;   ••••••.••>

       (2) its labeling and other material required to be submitted comply with the requirements of
       this Act;   '                                          .       '           .;  •'''-.'
       (3) it will perform its intended function without unreasonable adverse effects on the "•'
       environment; and

       (4) when used in accordance with widespread and commonly recognized practice it will not
       generally cause unreasonable adverse effects on the environment.
           Recyclsd/Rocyclabla .Printed with Vegetable Oil Based Inks on 100% Recycled Paper (40% Postconsumer)

7 U.S.C. § 136c(c)(5). Although the first registration requirement identified above mandates that
EPA consider efficacy of label claims, Congress, in 1978, explicitly gave EPA the authority to  .
waive that requirement.  FIFRA states:

       In considering an application for the registration of a pesticide, the Administrator may waive
       data requirements pertaining to efficacy, in which event the Administrator may register the
     1  pesticide without determining that the pesticide's composition is such as to warrant proposed
       claims of efficacy.

7 U.S.C. § 136c(c)(5). The legislative history explains that Congress believed that product
performance issues for agricultural pesticides were adequately addressed by information from
government and university sources and market forces:

       This authority [to waive efficacy data] will be used most commonly with respect to
       agricultural pesticides, due to the high level of knowledge concerning pesticidal efficacy
       that prevails in the agricultural community, the existence of means for communicating
       efficacy information to users, the organizational expertise of the Department of Agriculture,
       the extension services, and the universities in this area, and the stake the industry has in
       marketing products that are efficacious.

S. Rpt. 95-334, 95th Cong.,  1st Sess. 20 (July 6,  1977).

       EPA has acted under this authority to waive, by regulation, data requirements as to efficacy
issues for all agricultural pesticides.  44 Fed. Reg. 27932, 27938 (col. 3) (May  ; 1, 1979), 40. CFR
lS8.640(b)(l>rsee also 47 Fed. Reg. 57624 (December 27, 1982).  EPA concluded that agriculture
pesticides are "effectively regulated by the marketplace," 44 Fed. Reg. 27932, 27938 (col. 3) (May
11, 1979), and that waiving review of the efficacy of agricultural pesticides in the registration
process would enable the Agency to focus of its  "primary mandate under FIFRA":  investigating
"the health and safety aspects of pesticides."  47 Fed. Reg. 53192 (November 24, 1982); 47 Fed.
Reg. 40659, 40661  (col.l) (September 15, 1982). EPA pointed to private legal actions for damages
as one factor that would ensure that pesticide manufacturers sold an efficacious product: "pesticide
producers are aware that they are potentially subject to damage suits by the user community if their
products prove ineffective in actual use." 47 Fed. Reg. 40659, 40661  (col.2) (September  15, 1982).

       EPA has also, by regulation, promulgated various requirements pertaining to pesticide
labels. These regulations bar the registration of any pesticide with a misbranded label, 40 CFR. §
152.112(f), and contain specific examples of label statements that are considered  false or
misleading and thus render a label misbranded. 40 CFR. § 156.10(a)(5).  Additionally, the
regulations have requirements for warning statements and mandate that pesticide products have
adequate use directions. 40 CFR. § 156.10(h) and (i).

        B. .State Preemption Under FIFRA.       ••'                 '• • • •          -

        FIFRA permits states br,o,ad authority to regulate pesticides but makes it unlawful for states
 that undertake such regulation to "impose or continue in effect any requirements for labeling.or '
 packaging, in addition to or.different from those required under this Act." 7U.S.C. § 136v(b). A
 number of federal court decisions have held that this preemption of state authority as to pesticide
 labels bars damage claims in state court by growers against pesticide manufacturers: The courts
 have reasoned that allowing such a claim by a grower would be, in effect, permitting the state to
 impose label requirements "in addition to or different from" the federally-approved label.

 III. LABEL APPROVAL AND PESTICIDAL EFFICACY                         •    :

        There have been several recent preemption decisions involving claims by growers
 concerning pesticidal .efficacy or property damage caused by a pesticide.  For example,  in Taylor
 Ag Industries v. Pure-Gro. 54 F.3d 555 (9th Cir. 1995), several growers sued the manufacturers and
 distributor of a pesticide that the growers alleged had damaged their cotton crop even though they
 had applied the pesticide.according to.the label directions. The court denied the growers' claims on
 the ground that allowing recovery of damages would interfere indirectly with EPA's; "rigorous label-
 approval process." Id. at 560. In Welchert v. American Gvanamid. Inc:: 59 F.3d-69'(8th Cir. 1995),
. and Worm v. American Cyanamid. Inc. 5 F.3d 744 (4th Cir. 1993), growers sued a pesticide  ;  -
 manufacturer seeking recovery for harm to crops allegedly caused when the manufacturer's
 herbicide remained in, the soil ,and damaged rotated crops. •' Both courts dismissed the growers'
 claims noting, that EPA's labeling regulations required instructions on rotational crop •restrictions.
 The. courts reasoned that to permit .such lawsuits'"would be to allow state courts to'sit;  in effecf, as
 super-EPA review boards that could question the adequacy ofthe EPA's determination of whether a
 pesticide registrant successfully complied with the specific labeling requirements of its own •"•
 regulations:" .Welchert. 59 F.3d at-73: Worm. 5'F.3d at-749:1 .  "   - '>  •• v.:• .'
  f.   . '. Bother. .cases inyo lying, crop dam^gg ..that v Goy-rts-i. have =;at .;.-;
 least "part iaily dismissed, on ,'the grpund ,of, .FIFRA !p;reempti,p.n,.  ;. ...,,
 include:  ''Miller V; : E . I .'  bupbrit " De  JSTemours " &' Co .  ,_ '&80  F.' Sy.pp'.,, ,]',
                                                 "  ~      "                    ' '* "'
                                                              _                .
 47  ' {.S-.-lJ-y 'Miss i; l'9-9!^-) '•'• -(dartiage^ to crops)";  ~lh re" Pup6nt-Benia£e' ,
>B;3:tiaation;  859 F.'  S'lipp, -"619- ;(D.! Puerto" Rib'o : isg^O-'Xsame-) >  '   ' : '  "'
 Ail&-sta.te,--tlns.urance  Go:*.; -vj, P0o.lt itoei-Product's'-, • .Jnfa 'j ••/'•> 8 4'6  F- : Supp .' •  •'
 499  (E.D. La. 1994), •; (damage, caused' .by , fire1 aijd: .expl-osion). ;,; '"•',; .•<•'
 Trinity  Mountain Seed :1Co .  y..-. MSP. •Acryet ..-. ,844, F,..;.SfUpp>.- '597 . (Df    ;.
 Idaho ig'g^r^j damage, caused- 'tq seed .potatoes). ;'.  ,. Quad. . R, Farms , v;, ,.:,:
 Attterican :-Cv'a!natn'id 'Co i."J." '84:6' F^ 'Suppl  694'"' (D/ 'Mip.nA  J.993),. '.(damage V; .
 to rotated  crop); Casper v.  E.I,  du  Pont  de Nembu'fs  & Cof: JB'06  F.
 Supp.  903  (E.D.  Wash.   1992) (damage to crops) ;   Clubine v. American
 CVanamid. Co. , , .SS^.^N.W.^d. 385- ; (Iowa a-995') (s'stme)"-;  Wa'd'lin'crtdn'- v".
 Miles. Inc-.... 1995; .Te.nn...  .Ap.p.,,» ILEXIS;;(7.$a, •;(Gt.:' App .; '-.IS 95) ^(termite :•=  •
 infestation damage);  Goodwin v.  Bacon, 127  Wash. 2d  50,  896 P.2d
 673  (1995)  (damage  to  crops) .

        These court decisions are based on the premise that, in approving labels for agricultural
 pesticides, EPA examines, or at least has the obligation to examine, the efficacy of the pesticide and
 related issues such, as the potential for the pesticide to cause property damage. The courts, however,
 have not taken into account the plain language of the statute on this issue and have misinterpreted
 the thrust of EPA's regulations. As noted above, in actual fact, EPA, with Congress1 approval,
 stopped evaluating pesticide efficacy for routine label approvals almost two decades ago.  Further,
 as explained below, EPA's regulations do not require a review of efficacy of property damage issues
 for agricultural pesticides.

        EPA's labeling regulations must be interpreted in light of the statutory requirements for
 registration and EPA's waiver of the requirement for efficacy data on agricultural pesticides.
 Because efficacy data is not reviewed as  part of the registration of agricultural pesticides, it would
 be incorrect to contend that the label approval process involves an examination of the efficacy of
 the pesticide. Rather, the label approval  process is centered on the issue of the whether label,
 including the  specification of use sites and the directions for use on the label, meets the core
 requirement for registration: that the pesticide not cause "unreasonable adverse effects on the
 environment." That term is defined as "any unreasonable risk to man or the environment. . . ."  7
 U.S.C. §  136(bb).  Accordingly, the primary focus in the label approval process for agricultural
 pesticides involves assessing and regulating the potential risks to humans and the environment
 posed by  such pesticides.

       To this end, EPA applies the  requirements in its labeling regulations with an eye to risk not
 efficacy issues. This is illustrated by  how EPA applies label requirements regarding pesticide use
 sites and directions for the use of pesticides including directions concerning rotational crops. Label
 regulations require that pesticide use sites (e.g., specific crops, animals, etc.) be listed on the label
 because assessment of the dietary risk of pesticides is based on the foods that legally may. contain
 the pesticide,  and, under FIFRA, the  label establishes the legal limits on use of a pesticide.  7 U.S.C.
 § 136J(a)(2)(G)- Use sites are not reviewed as to the pesticide's efficacy for those crops. The label
 regulations address the directions for use of a pesticide for the purpose of insuring that pesticide
 applicators and farmworkers are adequately protected. Additionally, directions for use establish
 legal limits as to the amounts of pesticide that may be applied and thus allow EPA to control and
 estimate dietary exposure. EPA does not check to see whether application equipment mentioned in
 directions for use will be harmed or whether other property  damage might occur.  For example, the
 label regulations on directions for use specify that rotation crop restrictions are required when
 needed "to prevent unreasonable adverse  effects upon the environment."  40 CFR. § 156.10(i)(2)(x).
 Such restrictions are needed for certain pesticides to prevent uptake of residual pesticide residues
 from the soil into crops for which the pesticide is not registered. EPA's concern is that the
 consumption of the rotated crop would increase dietary exposure to the pesticide residue.
 Rotational crop restrictions are not reviewed to determine if the rotated crop would be injured by
 the residual pesticide residues.

       An additional requirement for registration, noted above, is that the pesticide's labeling
comply with the Act.  Separately, EPA, by regulation, has required that labeling not be misbranded.

 40 CFR. § 152.112(f). However, these registration requirements should not be read as
 reintroducing efficacy concerns into the label approval process. Having-directly given EPA the
 authority to disregard efficacy issues, Congress could not have intended that, once EPA exercised
 this authority, the same efficacy issues would come in through the back door of the label approval
 process. Under the statute and its regulations, EPA still must determine.in registering a pesticide if
 the pesticide's label complies with FIFRA or is misbranded but, unless EPA reinstates the
 requirement to submit efficacy data (either generally or with regard to a particular pesticide), that
 compliance and  misbranding inquiry will generally not extend to the evaluation of the efficacy of
 the pesticide.

       Efficacy and property damage issues are at times relevant to the continued registration of a'
 pesticide. FIFRA's "unreasonable adverse effects" standard requires EPA to take into account
 "economic, social, and environmental costs and benefits of the use of any pesticide." 7 U.S.C. §
 136(bb). A pesticide's efficacy  and its potential to cause property damage are factors to be
 considered in determining the economic benefit a pesticide provides to farmers.  However, in light
 of EP As waiver of the efficacy data requirement for initial registration, these issues would
 generally only arise following the registration of the pesticide,  including approval of the pesticide
 label.  For example, if a pesticide manufacturer were to learn that one its registered pesticides was
 causing property damage, the manufacturer would be obligated to report that information under
 section 6(a)(2) of the statute. 7 U.S.C. § 136c(a)(2).  Additionally,  if EPA discovers new risk
 concerns with an already-registered pesticide, it might examine efficacy data with regard to the
 pesticide in making an evaluation under the unreasonable adverse effects standard to determine if
•the product's registration should be cancelled or suspended.           -	-	-	-	.—..

       EPA hopes this Notice will be useful to courts, the regulated community, and pesticide
 users. EPA believes this Notice should be helpful to courts in preemption cases that involve EPA's
 labeling regulations. For example, some courts have mistakenly assumed that EPA's labeling
 regulations concerning the directions for use of a pesticide have an efficacy component. Further,
 other courts have erroneously concluded that because a pesticide label contained warnings
 regarding property .damage that EPA had necessarily evaluated such warnings and found them to be
 truthful and adequate.  As to registrants and applicants for registration, this Notice is intended to
 confirm that EPA has not altered its regulation relating to the waiver of efficacy data requirements
 for the registration of agricultural pesticides. Finally, as to pesticide users this Notice is intended to
 clarify that EPA's approval of a pesticide label does not reflect any determination on the part, of
 EPA that the pesticide will be efficacious or will not damage crops or cause other property damage.
                                                 Daniel M. Barolo, Director
                                                 Office of Pesticide Programs