N.J., I.F.R. 2001-2050 Issued May 1977
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF ENFORCEMENT
OFFICE OF GENERAL ENFORCEMENT
PESTICIDES AND TOXIC SUBSTANCES
ENFORCEMENT DIVISION
NOTICES OF JUDGMENT UNDER THE FEDERAL
INSECTICIDE, FUNGICIDE, AND RODENTICIDE ACT
Nos. 2001-2050
Notices of Judgment report cases involving seizure actions
taken against products alleged to be in violation, and criminal and
civil actions taken against firms or individuals charged to be
responsible for violations. The following Notices of Judgment are
approved for publication as provided in Section 16(d) of the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C
136n).
Stanley W. Legro
Assistant Administrator for
Enforcement
Washington, D.C.
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2001. In Re: Waltham Chemical Company, EPA Region I, July
28,1975. (I.F.&R.No. I-14C.)
This civil penalty proceeding was settled by hearing. The following is
Administrative Law Judge Frederick W. Denniston's Initial Decision.
Preliminary Statement
By Complaint, dated June 28, 1974, the Director, Enforcement
Division, Environmental Protection Agency, Region I (herein EPA or
Complainant) contends that Waltham Chemical Company, of
Waltham, Massachusetts, (herein Waltham or Respondent), violated
provisions of the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (86 Stat. 973; 7 U.S.C. 136) with respect to "Martins
Votol Residual Spray'1, samples of which were obtained on or about
November 26, 1973, and February 19, 1974.
Hearing was held in Waltham, Massachusetts, on February 6,
1975, at which Respondent was represented by Richard L. Keenan
and EPA by Wesley J. Marshall, Esq. Briefs and Proposed Findings
were filed by each and replies were filed on May 12, 1975.
The basic facts are not in dispute and Respondent agrees with
many of the Proposed Findings of Fact submitted by Complainant.
Accordingly, those Findings are in the main adopted with some
revisions as deemed required.
Stipulation of the Parties
There was presented at the outset of the hearing a "Stipulation
Between Parties", in which the factual allegations of the Complaint
were accepted, but to which was appended the following:
4. The only issues in dispute between the parties in this
matter are:
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A. Whether or not the Respondent committed on act
which caused (or potentially caused) unreasonable
C • \ adverse effects on man and the environment, as
defined at 7 U.S.C 136(bb).
B. Whether the proposed civil penalty is appropriate.
Unfortunately, Respondent and Counsel for Complainant place
differing interpretations on the intendment of Paragraph 4. On the
one hand. Respondent urges the view that the showing of
unreasonable adverse effects is a prerequisite to a civil penalty
proceeding under Section 14 of the Act, whereas Complainant
considers this to be a factor which is included in the factors embraced
in determining the gravity of the violation.
The use of stipulations by the parties is encouraged*. Section
168.36 (a)(ii) of the Rules for example, suggests simplification of the
issues and stipulations of facts as an item for consideration at
prehearing conferences. But efforts to restrict or limit issues is not
encouraged. Here the portion of the so-called Stipulation discussed
would limit, rather than simplify issues, and that portion is
unacceptable. At the hearing, Respondent was afforded the
opportunity to withdraw from the Stipulation in view of the
conflicting opinions as to the effect of Paragraph 4, but its
representative elected to adhere to Paragraphs 1 through 3.
Waltham Exhibit No. 5
Waltham submitted in evidence a bound booklet of material as
its Exhibit No. 5 to which Complainant objected due to its
containment of argument and ruling on its admissibility was reserved.
On brief, Complainant renews its objections.
The exhibit is largely argument but does contain some factual
allegations. As it is not possible to separate argument from fact in the
manner presented, the exhibit will be received, but only matters of
fact have been considered in this decision; the remainder has been
considered as part of Respondent's brief.
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Findings of Fact
1. The Respondent, Waltham Chemical Company, located
in Waltham, Massachusetts, is in the business of pest control.
Respondent was engaged in the manufacture and sale of Martin's
Votol Residual Spray, a "pesticide" within the meaning of the
Federal Insecticide, Fungicide, and Rodenticide Act, as amended
(FIFRA). It has discontinued this activity since the filing of this
Complaint.
2. Respondent has been in the exterminating business,
including the manufacture, sale and application of pesticides, for
many years, and is active in various related trade organizations.
Richard L. Keenan has been its principal stockholder since 1963.
3. Respondent offered for sale at Waltham, Massachusetts,
on or about November 26, 1973, and February 19, 1974, the
pesticide MARTIN'S VOTOL RESIDUAL SPRAY, registered under
EPA Reg. No. 1326-2.
4. The product is a substance or mixture of substances
intended for preventing, destroying, repelling or mitigating insects.
Prominently displayed on its label is the description: MARTIN'S
VOTOL RESIDUAL SPRAY Kills Roaches, Ants, Silverfish, Carpet
Beetles in Premises, When Applied to Surfaces. Included in the
directions for use are instructions as to treatment for roaches,
silverfish, and carpet beetles in premises, are to "Repeat as needed"
and as to ants "Repeat as often as necessary".
5. A Consumer Safety Officer (inspector) of the
Environmental Protection Agency (EPA) collected samples of the
product being offered for sale from Respondent's facility in Waltham,
Massachusetts, on November 26, 1973, and again on February 19,
1974.
6. The product's strength or purity fell below the professed
standard of quality under which it was sold and was registered. The
sample collected on November 26, 1973 (I.D. No. 88954) bore a
label which stated, in part, that the product contained 2 % technical
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chlordane. (Equivalent to 1.2% Octochloro - 4,7-methane-
tetrahydroindane and 0.8% related compounds).
7. When tested, the sample (I.D. No. 88954) was found to
contain .93% technical chlordane or less than half the claimed
amount of active ingredients.
8. The sample label (I.D. No. 88954) did not bear a
statement of net weight or measure of content as is required by FIFRA
[7U.S.C 136(q)(2)(C)(vii)].
9. The samples of the same product collected on February
19, 1974, (I.D. No. 119116) also bore labeling claiming 2% technical
chlordane whereas, when tested, the 4 one-quart containers were
found to contain 3.7%, 1.89%, 2.08%, and 1.65% technical
chlordane.
10. No adverse effects would have resulted from the use of
the samples numbered 119116, although the residual effectiveness of
chlordane products varies with its strength and purity within a
particular product.
11. Tests have shown that the residual killing effect of
chlordane on roaches declines with the percentage of chlordane in the
solution. For example, where treated test panels were tested, 4 weeks
after treatment, 100% kill was achieved after 48 hours with a 2%
solution; but at .5%, only 17% was achieved; and at .25%, only
7%. Accordingly, the .93% solution of sample I.D. No. 88954, was
reduced below its level of residual effectiveness.
12. The facts alleged in the Complaint as to samples I.D. Nos.
88954 and 119116 have been established and are undisputed by
Respondent.
13. Respondent's gross annual sales have been in excess of
$1,000,000, although Complainant has classified it as Category II,
having revenues between $200,000 and $1,000,000 annually for
purposes of determining the proposed penalty. Payment of the
proposed penalty would not effect its ability to continue in business.
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14. Complainant determined from the Civil Penalty
Assessment Schedule that the proposed penalties should be
determined as follows: I.D. Sample No. 88954, under the heading
"Analytical Test Results: Formulation Violations"— Chemical
Deficiencies - B. Partially ineffective for which a range of $1500-
$1900 is specified for a Category II company. Taking into account
the fact that Respondent's principal officer is very knowledgable in
the pesticides field, and that prior minor violations that had been
called to the attention of the company had not been corrected,
Complainant proposed the maximum of that range.
15. The proposed penalty for I.D. Sample No. 119116 was
determined by the same method described above, but subclassified
as "C. No adverse effects" for which a penalty range of $500-$900
is provided. Giving account to the cooperation and good faith
exhibited in connection with the taking of this sample, the minimum,
or $500 has been proposed.
CONCLUSIONS
Respondent, while acknowledging the violations requests
cancellation of any penalty, primarily on the grounds that it has not
been shown that these violations had an unreasonable adverse effect
on man or the environment, and secondarily because of adverse
effects upon the company and of its principal officer. It makes the
primary argument because of the reference to adverse effects in
Section 6 (7 U.S.C. 136d) of FIFRA, and the definition of that term in
Section 2(bb) (7 U.S.C. 136). Such argument is wholly irrelevant.
Respondent further contends that no harm has been
documented by the less than 1 % basic ingredient claimed by the
label to be 2 %, because for some purposes 1 % is considered
adequate and that, in any event, the label contained the instruction
"Repeat as necessary", thereby putting the judgment as to timing
and quantity of dosages in the user. Such argument is mere cavil. The
product here was clearly adulterated, whether intentionally or not,
and by its definition of that term in Section 2(c) of the Act [7 U.S.C.
136(c)], any reduction of the professed standard of quality as
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expressed on the label, is prohibited by Section 12(a)(l)(E). The
remainder of Respondent's argument are addressed primarily to
contending that EPA personnel are "belligerent" and have
unreasonably spent taxpayers' money by having enforced the statute
against it.
Section 12 of FIFRA (7 U.S.C. 136j) enumerates those acts which
are unlawful and those found herein clearly fall within this section.
Moreover, Section 14 (7 U.S.C. 1361) spells out those factors which
shall be considered in determining the amount of penalties and the
adverse effects on personal or company reputation, health or
convenience is not included.
While clear support for the proposed penalty is indicated under
the Assessment Schedule, the Presiding Officer is of the view that
under the circumstances of this case, the minimum of the range of
penalty in each instance would be appropriate, and will therefore fix
the amount at $2,000.
PROPOSED FINAL ORDElt
1. Pursuant to Section 14(a)(l) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended (86 Stat. 973; 7 U.S.C
1361(a)(l)), a civil penalty of $2,000 is assessed against Waltham
Chemical Company, for violations of the said Act which have been
established on the basis of the Complaint herein dated June 28,
1974.
2. Payment of the full amount of the civil penalty assessed
shall be made within sixty (60) days of the service of the final order
upon Respondent by forwarding to the Regional Hearing Clerk a
cashier's check or certified check payable to the United States of
America.
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Frederick W. Denniston
Administrative Law Judge
July 28,1975
Unless appeal is taken by the filing of exceptions pursuant to 40
CFR 168.51, or the Regional Administrator elects to review this initial
decision on his own motion, the order may become the final order of
the Regional Administrator.
2002. In Re; A-l Pest Control Service, EPA Region II, April 9,
1976. (I.F.&R. No. H-l 16C, I.D. No. 118473.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E}; 136(q)(l)(A); 136[c)(l) and 136(c)(3). The action
pertained to a product held for distribution or sale on January 15,
1975, at A-l Pest Control Service, Brooklyn, New York. The pesticide
involved was FORMULA A4 MOUSE AND RAT KILLER; charges
included adulteration and misbranding—strength or purity fell below
the professed standard of quality as expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $575.00.
2003. In Re: A-l Pest Control Service, EPA Region II, April 9,
1976. (I.F.&R. No. II-117C, I.D. NO. 118475.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(o)(l)(E); 136(q)(l)(A) and 136(q)(1)(Q(iii). The action pertained to
a product held for distribution or sale on January 15, 1975, at A-l
Pest Control Service, Brooklyn, New York. The pesticide involved was
BEACON FORMULA Al ROACH AND ANT KILLER; the charge
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was misbranding—lack of net weight statement and labels bore
misleading safety claims and graphic representations.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $200.00.
2004. In Re: Cook & Dunn Paint, EPA Region II, May 10, 1976.
(I.F.&R. No. II-97C, I.D. Nos. 112936 and 112937.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 135b.
The action pertained to a shipment made an February 26, 1975, from
Newark, New Jersey, to Bristol, Pennsylvania. The pesticides
involved were COOK & DUNN MARINE YACHT AND BOAT
ANTI-FOULING PAINTS 521-RED and 520-GREEN; the charge
was nonregistration.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $4,760.00.
2005. In Re: GAP Corp., EPA Region II, May 13, 1976. (I.F.&R.
No. 1I-119C,I.D. No. 119197.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(q)(2)(A); 136(q)(l)(G) and 136(q)(2)(C)(v). The action
pertained to a shipment made on December 23,1974, from Grasselli,
New Jersey, to Chelsea, Massachusetts. The pesticide involved was
PREVENTOL I; the charge was misbranding—lack of ingredient
statement, lack of warning or caution statement and lack of assigned
registration number on labels.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $5,000.00.
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2006. In Re: Cloroben Chemical Corporation, EPA Region II,
June 10,1976. (I.F.ftR. No. II-87C.)
This civil penalty proceeding was settled by hearing. The following is
Administrative Law Judge Edward B. Finch's Initial Decision.
Preliminary Statement
This is a proceeding under Sec. 14(a) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended [7 U.S.C. 136 l(a)],
1973 Supp., for the assessment of a civil penalty for violation of the
Act.
On July 14, 1975, the Director of the Environmental Programs
Division, United States Environmental Protection Agency, Region II
("complainant") issued a Complaint and Notice of Opportunity for
Hearing, charging the Cloroben Chemical Corporation
("respondent") with violations of the Act. An extension of time to
September 15, 1975, was granted for the filing of an answer and
said answer was duly filed by letter dated September 11,1975.
On November 6, 1975, complainant's Amended Complaint
and, Notice of Opportunity for Hearing was served upon respondent,
pursuant to 40 CFR Section 168.31(c) and consistent with my Order
of October 23, 1975, granting leave to file said Amended Comploint.
The original Complaint was amended by withdrawing one of the two
charges contained therein and adding two additional charges.
The Amended Complaint charged respondent with violation of
Section 12{a)(l)(E) [7 U.S.C. Section 136j(a)(l)(E)] by holding for sale
a pesticide called Blue Seal Root Raider on or about January 8, 1975,
in Kearney, New Jersey, which pesticide was not in compliance with
the provisions of FIFRA in that:
1. Said pesticide was misbranded in that the label borne by
the product failed to bear an ingredient statement giving
the name and percentage of each of the active
ingredients, together with the total percentage of the
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inert ingredients. (FlFRA, as amended. Section 72(a)(?)(E);
Section 2(q)(2)(A).) Specifically, said product did not bear
any ingredient statement.
2. Said pesticide was misbranded in that the label did not
bear on the front panel or the part of the label displayed
under customary conditions of purchase the warning
statement "Keep out of reach of children," and the
appropriate signal work ("Danger"). (FlFRA, as
amended, Section 12(a)(l)(E}; Section 2(q}(l)(G).)
Specifically, the statement "Keep out of reach of
children" appeared on a side panel of the product's
label, and the signal word "Danger" did not appear at
all.
3. Said pesticide was misbranded in that the precautionary
labeling was not so placed as to render it conspicuous
and likely to be read under customary conditions of
purchase. (FlFRA, as amended, Section 12(a)(l)(E);
Section 2(q)(l)(E}.} Specifically, the label of said product
did not bear the precautionary word "poison" on the
front panel as required in connection with the product's
approved registration, and by applicable regulations. (40
CFR 162.9(b}.)
4. Said pesticide was misbranded in that the label borne by
the product failed to bear the product's assigned
registration number. (FlFRA, as amended, Section
12(a)(lME); Section 2(q)(2}(C)(v).J
Although Complainant asserts that the Agency's Civil Penalty
Assessment Schedule (39 F.R. 27713) would have permitted
assessment under Section 14(a) of FlFRA 1972 of a total of
$11,800.00 for the four violations charged in the Amended
Complaint,1 an assessment of $5,000.00 for the four violations has
been proposed as follows:
Charge 1 (No ingredient statement): $3,000.
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Charge 2 (Legend "Keep out of reach of children" not on
front panel/Failure of label to bear signal word
"Danger"): $1,500.
ChargeS (Precautionary word "Poison11 not on front of
label): $500.
Charge 4 (Failure of label to bear registration number): No
monetary penalty.
It should be noted that neither the AU nor the Regional
Administrator is bound by the amount of proposed penalty in the
Complaint. See 40 CFR 168.4a(b) and 168.60 M3).
The Respondent, through counsel, filed an Answer which admits
that all technical violations alleged did exist. See also Tr. pp. 5 and
10. And further, the parlies stipulated, EPAX 1, to all other facts
relevant to this proceeding, such as the official visit by the Consumer
Safety Inspector, the obtaining of the samples, the label in question,
Res. Exh. 1, and to the fact that the product was properly registered
with EPA under No. 5819-2.
The question then to be decided here relates solely to the
assessment of a civil penalty.
Respondent does assert in its Answer that there are mitigating
circumstances as follows;
1. Respondent did not prepare the label in question, but
acquired it as the result of the purchase of all property of
the Blue Seal Chemical Co. approximately eight years
ago and continued to use it.
2. Only 32 50-lb. drums of the product were sold during the
most recent fiscal year with a sale value of approximately $650.00.
3. The product was immediately withdrawn from sale and
the remaining stock in 50-lb. drums was emptied from its containers
upon notification of label deficiency.
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4. The purchase and use of the product is limited to
professionals only (plumbing wholesalers) as is stated on the label.
5. The product was not available for retail purchase by the
general public and, in fact, the directions for use are appropriate for
a journeyman or master plumber.
6. While the information required on the label is in technical
violation of the Act, Respondent asserts it does set forth sufficient
information to accomplish the Act's purpose; including ingredients,
cautionary warnings, skull and crossbones and directions for use.
7. Even though the required information is not set forth on
the front panel, the drum being 12" in diameter affords the purchaser
or user a full view of the entire label.
The proceedings were conducted pursuant to the applicable
Rules of Practice, 40 CFR 168.01 ef seq. At my request, the parties,
pursuant to Section 168.36(e) of the Rules, corresponded with me for
the purpose of accomplishing some of the purposes of a prehearing
conference (see Section 168.36(a) of the Rules).
A prehearing conference and a hearing were held in New York
City on February 18, 1976. The Complainant was represented by
Steven A. Dvorkin, Esq., of the legal staff of EPA, Region II, and the
Respondent was represented by Bernard Furman, Esq.
The parties have filed briefs and reply briefs in suport of
proposed findings of facts, conclusions of law and order which I have
carefully considered.
Findings of Fact
1. The Respondent is a corporation with its place of business
located at 1035 Belleville Turnpike, Kearney, New Jersey. Its gross
sales are approximately $1,800,000 annually.
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2. On or about Janurary 8, 1975, the Respondent held for
sale a quantity of pesticide called Blue Seal Root Raider at its
establishment in Kearney, New Jersey.
3. A sample of the product (No. 117835) was collected in
accordance with legal procedures by an employee of the
Environmental Protection Agency on January 8, 1975.
4. The product was labeled in part "For sewers blocked or
partially blocked with tree roots or other organic matter." The
product is a "pesticide" within the meaning of Section 2(u) [7 U.S.C.
136(u)], and is a "plant regulator" within the meaning of Section 2(v)
[7 U.S.C. 136(vJ] of the Federal Insecticide, Fungicide, and
Rodentkide Act.
5. The product was registered as required by Section 4 of
the FIFRA, 7 U.S.C. 136[b), at the time it was held for sale.
6. The product's label did not contain an ingredient
statement as required by Section 2(q)(2)(A).
7. The statement "Keep out of reach of children" appeared
on the side panel of the product's label and not on the front panel as
required by Section 2(q)(l )(G).
8. The signal word "Danger" did not appear on the label as
required by Section 2{q)(l)(G).
9. The label did not bear the precautionary word "Poison"
on the front panel as required in connection with the products
registration. 40 CFR 162.9(b).
10. The label did not bear the product's assigned registration
number as required by Section 2(q)(2)(C).
11. For the above mentioned violations, the Respondent is
subject to a civil penalty under Section 14(a) of the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C.
1361 (a).
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12. Taking into consideration the size of Respondent's
business, the effect on Respondent's ability to continue in business,
and the gravity of the violation, it is determined that a penalty of
$1,000 is appropriate.
Discussion and Conclusions
Since the allegations and facts in this matter are undisputed, the
case is reduced to a determination as to the amount of the civil
penalty to be assessed.
In determining the appropriateness of the penalty the statute
and regulations require that the following factors be considered: Size
of Respondent's business; effect on Respondent's ability to continue
in business; and gravity of the violation. In evaluating the gravity of
the violation the regulations require that the following be considered:
history of Respondent's compliance with the Act; and good faith or
lack thereof.
The respondent's gross sales in 1974 were approximately
$1,800,000. As to size of company, it falls into category V (annual
gross sales exceeding a million dollars) as set forth in the Guidelines
for the Assessment of Civil Penalties under FIFRA. (39 F.R. 27711,
July 31,1974).
The Respondent does not argue that its annual gross sales are
not substantial (one million dollars or more) or that the imposition of a
penalty in the proposed amount will effect its ability to continue in
business. The Respondent argues, however, that the violation was
minor and that no penalty should be imposed.
It has been held in other cases under Section 14(a) that "gravity
of the violation" should be considered from two aspects—gravity of
harm and gravity of misconduct.
As to gravity of harm there should be considered the
actual or potential harm or damage, including severity, that
resulted or could result from the particular violation. . . .
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As to gravity of misconduct, matters which may be
properly considered include such elements as intention and
attitude of respondent; knowledge of statutory and regulatory
requirements; whether there was negligence and if so the
degree thereof; position and degree of responsibility of those
who performed the offending acts; mitigation and aggravating
circumstances; history of compliance with the Act; and good
faith or lack thereof.3
Respondent alleges that the marketing of the product with the
deficient label affixed thereto was not a deliberate or intentional
violation. That is was an oversight for which there is no explanation.
TR.p.48.
Approximately eight years ago Respondent purchased the
assets of Blue Seal Chemical Company including their stock of labels
to be used on the 50-lb. drums of Blue Seal Root Raider. Since sales
of this product in this size container are so small, the need had not
arisen to reorder a supply of these labels and hence, change the name
appearing thereon from Blue Seal Chemical Company to the name of
the Respondent and to also review any other deficiencies which might
have been apparent upon such a review. Having used these labels for
six years without incident Respondent erroneously assumed all was in
order.3
As a mitigating circumstance and to show good faith the
Respondent urges that immediately upon being notified that the label
used was in violation of the Act, sales of the product were
discontinued, all inventory of the product in 50-lb. drums was emptied
from its containers to avoid accidental sale thereof and a new label
was submiteed to EPA for approval. Such action, while
commendable, is not a mitigating factor since it was in the interest of
Respondent and served its purpose of avoiding further prosecution.
As to gravity of harm there should be considered the actual or
potential harm or damage, including severity, that resulted or could
result from the particular violation.
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Dr. Sandifer, one of two physicians who testified on behalf of
Complainant, testified that severe harm and even death could result
from a misuse of the product, the ingredient being 94% sodium
hydroxide (lye). This fact was not disputed and, in fact, was agreed to
by Respondent.
Thus, it is apparent that there is potential harm from the misuse
of the product.
One of the purposes of registration is to prevent the marketing
of pesticides that hove the potential of causing harm or injury and
proof of actual harm or injury is not necessary in considering gravity
of harm.
Neither of the two doctors testified as to any actual knowledge
of injury due to misuse of the product here in question.
As to gravity of misconduct one of the factors to be considered
is whether Respondent had knowledge of the requirements of the Act.
The Respondent has acknowledged that it was aware of all
registration requirements of the Act. TR. p. 62.
The Respondent may not have had any intention to violate the
requirements of the statute in this instance, but intent to violate is not
an element of the offense in a civil penalty proceeding. Cf. United
States v. Dotterweich, 320 U.S. 277 (1943]; United States v. Balint,
258 U.S. 250 0922).
Other alleged mitigating factors relating to degree of
misconduct, such as the fact that Respondent did not prepare the
label, only 32 drums with a value of $650.00 were sold and that some
cautionary information is set forth on the label even though not
properly placed da not, in my opinion, serve to mitigate the violations
charged.
Certain other factors do, however, in my opinion, serve to
mitigate the degree of misconduct. The Respondent has not in the
past been the subject of even a warning notice from EPA or its
predecessor and the product was not available for retail purchase by
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the general public and was sold only to plumbing wholesalers with
directions for use directed to journeymen or master plumbers.
While the visibility of the entire contents of the label when
placed on the 50-lfa. drum measuring 12 inches in diameter is quite
good, the regulations require the cautionary information and
ingredient statement to be placed on the front panel. These are
technical requirements which are, in my opinion, founded on solid
reasoning.
While Respondent urges that the violations were not intentional,
but mere oversight, I find that since it knew of the requirements of the
Act its failure to review and revise the label in question constitutes
negligence.
I have taken into account all of the factors that are required to
be considered in determining the appropriateness of the penalty. I am
of the view that the proposed penalty of $5,000.00 is inappropriate
and should be reduced to $1,000.
The proposed Findings of Fact and Conclusions submitted by the
parties have been considered. To the extent that they are consistent
with Findings of Fact, and Discussion and Conclusions herein, they are
granted, otherwise they are denied.
Having considered the entire record and based on the Findings
of Fact, and Discussion and Conclusions herein, it is proposed that the
following order be issued.
Final Order
Pursuant to Section 14(a)(l) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended (7 U.S.C. l361(a)(l)K a
civil penalty of $1,000.00 is assessed against Respondent, Cloroben
Chemical Corporation for the violation which has been established on
the basis of the amended complaint issued on November 6, 1975.
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Edward B. Finch
Administrative Law Judge
June 10, 1976
' Charge Code E5 (toxicity level: Danger): $5,000.
Charge Code E2 (toxicity level: Danger): $2,800.
Charge Code E14 (toxicity levell: Danger): $2,800.
Charge Code E9 (violation appearing in combination with more
than two additional charges): $1,200.
[Civil Penalty Assessment Schedule, 39 F.R. 27713 (July 31,
1974).]
2 Quoted from Initial Decision of AU In re Amvac Chemical
Corporation, published in Notices of Judgment under FIFRA No.
1499, issue of June, 1975.
3 When the 5— and 20-pound supply of lithographed cans for the
product was exhausted, Respondent submitted the labels with the
name change to EPA for approval.
2007. In Re: American Flouride, EPA Region II, June 18, 1976.
(I.F.&R. No. I1-124C, I.D. No. 107741.)
This was a civil action charging the respondent with violating
the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C,
136j(a)(l)(E}; 136(q)(l)(A) and 136(c)(l). The action pertained to a
product held for distribution or sale on April 10, 1976, at American
Flouride, New Rochelle, New York. The pesticide involved was PCE
SPACE SPRAY; charges included adulteration and misbranding—
strength or purity fell below the professed standard of quality as
expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $ 1,530.00.
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2008. In Re: The Alcatroz Co., Inc., EPA Region III, June 9,1976.
(I.F.&R. No. III-92C, I.D. Nos. 109104,109105 and 109107.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l) and 135b. The action pertained to products held for
distribution or sale, on April 14, 1975, at The Alcatraz Co., Inc.,
Richmond, Virginia. The pesticides involved were ALCATRAZ #100
COPPER NAPHTHENATE, CREOSOTE OIL and PRESERVATIVE;
the charge was nonregistration.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $3,000.00.
2009. In Re: Loco Corp., EPA Region III, June 22, 1976. (I.F.&R.
No. I1I-82C, I.D. No. 117577.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l HE). The action pertained to a product held for distribution or
sale on December 5, 1974, at Loco Corp., Baltimore, Maryland. The
pesticide involved was FLORA-FOG MALATHION; the charge was
adulteration.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $2,000.00.
2010. In Re: Lincoln Industrial Chem. Co., Inc., EPA Region III,
June 22r 1976. (I.F.&R. No. III-98C, I.D. Nos. 112956,
112957,112959,112960.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(q)(l)(D) and 136(c)(l}. The action pertained to
products held'for distribution or sale on July 24, 1975, at Lincoln
Industrial Chem. Co., Inc., Reading, Pennsylvania. The pesticides
involved were ALLI-CIDE DISINFECTANT & SANITIZER,
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STORALLI, IODINE ALLICIDE CONCENTRATED DETERGENT
SANITIZER and ALLI ALGICIDE & DISINFECTANT FOR
SWIMMING POOLS; charges included adulteration and
misbranding—strength or purity fell below the professed standard of
quality as expressed on its labeling and lack of establishment
registration number.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $2,100.00.
2011. In Re: Rush-Hamptom Industries, EPA Region IV, May 3,
1976. (I.F.&R. No. IV-166C, I.D. No. 114397.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(1); 135b; 136j(a)tl)(E); 136(q)jl)(G); 136(q)[2)(A) and
136(q)(l)(D). The action pertained to a shipment made on June 16,
1975, from Longwood, Florida, to Omaha, Nebraska. The pesticide
involved was CA/90 DUCTLESS FAN FILTER MODEL NUMBER
501; charges included nonregistration and misbranding—lack of
adequate warning or caution statement, lack of adequate ingredient
statement and lack of EPA establishment number.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $952.00.
2012. In Re: Chevron Chemical Company, EPA Region IV, June
8, 1976. (I.F.&R. No. IV-155C, I.D. Nos. 111024 and
111025.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenficide Act, 7 U.S.C.
136j(a)(2)(G). The action pertained to the sale and shipment of used,
resealed, polyethylene lined drums labeled ORTHO PARAQUAT CL
CONCENTRATE and ORTHO DIQUAT on October 29, 1974,
March 10, 1975, and April 22, 1975, from Orlando, Florida, to
Tampa, Florida. The firm was charged with using a registered
1383
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pesticide in a manner inconsistent with its label, since the labeling
stated that the containers were not for reuse.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $6,000.00.
2013. In Re: Dixie Agricultural Chemical Co., EPA Region IV,
June 16,1976. (I.F.&R. No. IV-181-C, I.D. No. 110198.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135(a)(l}; 135b; 136j(a)(2)(L); 136j(a)dHE); 136(q)(lJ[DJ and 40 CFR
167.4. The action pertained to a shipment made on May 26, 1975,
from Eustis, Florida, to Loxley, Alabama. The pesticide involved was
DIXIE AG/CHEM CYTHION 5-E; charges included nonregistration,
failure to submit a production report and misbranding—failure to
bear the assigned establishment registration number.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,235.00.
2014. In Re: White Laboratories, Inc., EPA Region IV, June 16,
1976. (I.F.&R. No. IV-174C, I.D. Nos. 110217 and 110761.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a){l)(E); 136(q)(l)(A); 136(c)(l); 136(qH2)(C](iv} and 136(q)(l)(D).
The action pertained to a shipment made on August 4, 1975, from
Orlando, Florida, to Florence, Alabama, and to a product held for
distribution or sale on October 7, 1975, at White Laboratories, Inc.,
Orlando, Florida. The pesticide involved was X-14 INSTANT
MILDEW REMOVER; charges included adulteration and
misbranding—strength or purity fell below the professed standard of
quality as expressed on its labeling, lack of EPA registration number
and lack of EPA establishment registration number.
1384
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The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $990.00.
2015. In Re: Vet-Aid Industries, Inc., EPA Region V, October 22,
1975. (I.F.&R. No. V-301-C, I.D. No. 116053.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l) and 135b. The action pertained to a shipment made on
March 15, 1974, from Minneapolis, Minnesota, to Vesper, Wisconsin.
The pesticide involved was HILLTOP K-M DISINFECTANT; the
charge was nonregistration.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $ 1,188.00.
2016. In Re: Black Leaf Products Company, EPA Region V,
November 13, 1975. (I.F.&R. No. V-305-C, I.D. Nos.
115903 and 119309.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(E); 136(c)(l) and 136(q)(l)(A). The action
pertained to a shipment made on March 26, 1974, from Elgin, Illinois,
to Winthrop, Maine, and to a product held for distribution or sale on
October 16, 1974, at Black Leaf Products Company, Elgin, Illionis.
The pesticides involved were BLACK LEAF ROSE FLORAL DUST
and BLACK LEAF 1% ROTENONE GARDEN DUST; charges
included nonregistration, adulteration and misbranding—strength or
purity of product fell below the professed standard of quality as
expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $4,400.00.
1385
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2017. In Re: United Textile Chemical, Inc., EPA Region V,
November 14, 1975. (I.F.&R. No. V-306-C, I.D. No.
114278.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a){l); 135b; 136jla)(l)(E); 136(q)(l)(G); 136(q)(l)[F); 136(q)(2)(A)
and 136(q)(2](C)(i). The action pertained to a shipment made on
November 21, 1974, from Janesville, Wisconsin, to Anamosa, Iowa.
The pesticide involved was BAG-SOFT Ml4; charges included
nonregistration and misbranding—failure to bear adequate warning
or caution statements, directions for use, ingredient statement and a
statement giving the name and address of the producer.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $500.00.
2018. In Re: Indiana Naval Stores Company, Inc., EPA Region
V, December 3, 1975. (I.F.&R. No. V-312-C, I.D. No.
114411.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(E); 136(q)(l)(G) and 136(q}(1)(F). The
action pertained to a shipment made on November 7, 1974, from
Indianapolis, Indiana, to Cape Girardeau, Missouri. The pesticide
involved was DARK CREOSOTE WOOD PRESERVATIVE; charges
included nonregistration and misbranding—inadequate caution
statements and directions for use.
The Final Order on Default assessed a civil penalty of $2,800.00.
1386
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2019. In Re: Zimmite Corporation, EPA Region V, December 5,
1975. (1.F.&R. No. V-303-C, I.D. No. 115686.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(q)(1)(A); 136(c)(l) and 136(q)(2)(D). The action
pertained to a product held for distribution or sale on November 22,
1974, at Zimmite Corporation, West Lake, Ohio. The pesticide
involved was CHEMTROL NO. 1-5 MICROORGANISM
CONTROL; charges included misbranding and adulteration—
strength or purity of the product fell below the professed standard of
quality and failure of the label to bear required symbols or
statements.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $2,550.00.
2020. In Re: Agricultural Chemical Division of International
Multifoods Corporation, EPA Region V, January 21,1976.
(I.F.&R. No. V-308-C, I.D. No. 115587.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(q)(l)(A) and 136(c)[l). The action pertained to a
product held for distribution or sale on October 23, 1974, at
Agricultural Chemicals Division of International Multifoods
Corporation, Madison, Wisconsin. The pesticide involved was
SUPERSWEET DRY INSECTICIDE II; charges included misbranding
and adulteration—strength or purity of product fell below the
professed standard of quality as expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $2,100.00.
1387
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2021. In Re: Grace-Lee Products, Incorporated, EPA Region V,
January 21, 1976. (I.F.&R. No. V-311-C, I.D. No. 109421.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E) and 136(q)(l}(F). The action pertained to a product held
for distribution or sale on February 7, 1975, at Grace-Lee Products,
Incorporated, Minneapolis, Minnesota. The pesticide involved was 3-
WAY PF "POWER FORMULATION"; the charge was
misbranding—inadequate directions for use.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,000.00.
2022. In Re: Sunnyside Products, Inc., EPA Region V, January
21r 1976. (l.F.&R. No. V-310-C, I.D. No. 109828.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(E) and 136(q)(2)(A). The action pertained
to a shipment made on August 7, 1974, from Chicago, Illinois, to
Philadelphia, Pennsylvania. The pesticide involved was SUNNYSIDE
TORCH GLOW; charges included nonregistration and
misbranding—label lacked a proper ingredient statement.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,320.00.
2023. In Re: The Brite House Company, EPA Region V, February
3,1976. (I.F.&R. No. V-313-C, I.D. No. 115587.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a](l)(E); 136(q)(l)(A); 136(q)(l)(F) and 136(q)(l)(G). The action
pertained to a product held for distribution or sale on February 27,
1975, at The Brite House Company, Medina, Ohio. The pesticide
involved was ARCADE PINE OIL DISINFECTANT; the charge was
1388
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misbronding—inadequate precautionary statements, inadequate
directions for use, false or misleading safety claims and product not
effective for purposes claimed.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $500.00.
2024. In Re: The Euclid Chemical Company, EPA Region V,
February 11,1976. (I.F.&R. No. V-309-C, I.D. No. 117084.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(E); 136(q)(l)(G) and 136(q)(2)(A). The
action pertained to a shipment made on August 22, 1974, from
Cleveland, Ohio, to Smithfield, North Carolina. The pesticide
involved was EUCO WOOD PRESERVATIVE; charges included
nonregistration and misbranding—lack of adequate warning or
caution statements and failure of the label to bear an ingredient
statement.
i
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $ 1,320.00.
2025. In Re: Western Tar Products Corporation, EPA Region V,
February 12,1976. (I.F.&R. No. V-318-C, I.D. No. 125728.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(2)(L); 136j(a)(2)(N) and 136e(c)(l). The action pertained to the
firm's failure to submit a pesticides annual report.
After consideration of all the facts involved, the Complaint was
withdrawn.
1389
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2026. In Re: Deisch-Benham, Inc., EPA Region V, February 24,
T976. (I.F.&R. No. V-316-C, I.D. No. 115712.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(E); 136(q)[l)(G); 136(q)0)(A) and
136(c)(l). The action pertained to a shipment made on December 5,
1974, from Hartford, Michigan, to Nappanee, Indiana. The pesticide
involved was DICKERSON'S MOUSE BAIT 2; charges included
nonregistration, misbranding and adulteration—inadequate
precautionary statements, product ineffective for purposes claimed
and strength or purity of the product fell below the professed
standard of quality.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,400.00.
2027. In Re: Famco, Inc., EPA Region V, February 24, 1976.
(I.F.&R. No. V-314-C, I.D. No. 115618.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(q)(l)(A) and 136(c)(l). The action pertained to a
product held for distribution or sale on February 12, 1975, at Famco,
Inc., Medina, Ohio. The pesticide involved was SYSTEMIC LAWN
WEED KILLER; charges included misbranding and adulteration—
product not effective for purposes claimed and strength or purity of
the product fell below the professed standard of quality.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $ 1,155.00.
1390
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2028. In Re: Stearns Chemical Corporation, EPA Region V,
February 24,1976. (I.F.&R. No. V-304-C, I.D. No. 116043.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(c)(1) and 136(q)(l)(A). The action pertained to a
product held for distribution or sale on January 14, 1975, at Stearns
Chemical Corporation, Madison, Wisconsin. The pesticide involved
was MILKHOUSE BRAND SANITERGENT MARK X PIPELINE
CLEANER; charges included adulteration and misbranding—its
strength or purity fell below the professed standard of quality under
which it was sold.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,350.00.
After the civil proceeding had been closed with a Final Order
dated February 24, 1976, the respondent requested a hearing. The
following is Administrative Law Judge Marvin E. Jones' Order
concerning this request.
Comes now the Complainant, United States Environmental
Protection Agency, by and through its attorney, and moves for
dismissal of the above-captioned case for the reason that the
Administrative Law Judge is without jurisdiction of the subject matter
for the reason that the parties herein, the Respondent Stearns
Chemical Corporation, by its President, George L. Everitt, and
Complainant U.S. Environmental Protection Agency, by its Director,
Enforcement Division, Region V, Chicago, Illinois, did, respectively,
on February 6, 1976, and February 24, 1976, execute a Consent
Agreement, wherein the violation of 7 U.S.C. Sections 136j(a)(l)(E),
136(c)(1), and 136(q)(1)(A) was admitted by said Respondent and
said Respondent agreed to the issuance of a Final Order in this Cause
whereby Respondent is required to pay a civil penalty in the sum of
$1,350.00. Pursuant to said Consent Agreement, said Final Order
was on February 24, 1976 entered and executed by Francis T. Mayo,
Regional Administrator of U.S. Environmental Protection Agency,
Region V.
1391
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A Hearing was scheduled by the undersigned after assignment
of this case to him on June 16, 1976, in accordance with the
applicable rules of practice (40 CFR 168.40(a)). On September 29,
1976, the Hearing so scheduled was conducted by the undersigned
and at that time the instant Motion was made on the record and
argued at the conclusion of said hearing. The Complainant was
ordered to submit a brief on said question within 10 days thereafter
and Respondent was given an additional 10 days to reply.
Complainant's brief has been filed herein, but no reply brief has been
received from the Respondent.
I find that the subject Complaint was filed on December 16,
1975, proposing a civil penalty in the sum of $1,800; and that
Respondent's answer accompanied by a request for an informal
settlement conference was mailed on or about January 5, 1976; and
that a Consent Agreement was entered into as hereinbefore stated
and that at all of said times respondent was represented by his
Attorney, Frank J. Pelisek of the law firm of Michael, Best and
Friedrich, 250 East Wisconsin Avenue, Milwaukee, Wisconsin. In the
instant proceeding, Respondent is represented by David J. Cannon,
Esq., of the same law firm.
Under 40 CFR 168.03(i) the term "FINAL ORDER" is defined as
an order issued by the Regional Administrator disposing of a matter
of controversy between any respondent and the Agency. (Emphasis
supplied).
Section 168.70 provides as follows:
"(a) Filing and Service. A motion to reopen a hearing to
take further evidence, to rehear or reargue any matter related to such
proceeding, or to reconsider any final order, must be made by Motion
to the Regional Administrator, in accordance with Section 168.32(a)
and filed with the Regional Hearing Clerk. Every such motion must
state the specific grounds upon which relief is sought."
"(b) Motion to rehear, reargue or reconsider. Motions
to rehear or reargue any matter related to a hearing or to reconsider
1392
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the Final Order shall be filed within ten (10) days after the date of
service of the Final Order."
On the basis of the foregoing, I conclude that the Final Order
issued by the Regional Administrator on February 24, 1976, disposed
of the matter of controversy between the Complainant and
Respondent herein. No motion to reconsider said final order was filed
within the time provided by applicable regulation; therefore, said
final order is determinative of and has already finally disposed of any
controversy relating to the subject matter of said hearing.
In the premises, the Administrative Law Judge has no jurisdiction
of said subject matter and said motion to dismiss on the ground of
lack of jurisdiction of the subject matter should be and is hereby
sustained. My ruling is made with full consideration of the fact that
the parties proceeded to hearing on September 29, 1976, after
extensive pre-trial exchange and pleadings before the fact of
Consent Agreement and Final Order were brought to the attention of
the undersigned. Lack of subject matter jurisdiction may not be
waived. A tribunal which initially lacks jurisdiction to hear a cause
before it cannot subsequently acquire jurisdiction through parties'
action or failure to act. Skidmore v. Syntex Laboratories, 529 F. 2d
1244, I.e. 1248, note 3 (1976); Eskra v. Morton, 380 F. Supp. 205,
I.e. 210 (6) (1974); 5 Wright and Miller. Federal Practice and
Procedure, Civil, Section 1350.
The instant proceeding is dismissed. It is so Ordered.
Marvin E. Jones
Administrative Law Judge
October 27, 1976
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2029. In Re: Dover Chemical Corporation, EPA Region V,
March 8,1976. (I.F.&R. No. V-325-C, I.D. No. 125751.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(a)(L); 136j(a)(2)(N) and 136e(c)(1). The action pertained to the
firm's failure to submit a pesticides annual report.
After consideration of all the facts involved, the Complaint was
withdrawn.
2030. In Re: Sentinel Pest Control Laboratory, EPA Region V,
March 10,1976. (I.F.&R. No. V-319-C, I.D. No. 119412.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(c)(2) and 136(q)(l)(A). The action pertained to a
product held for distribution or sale on April 21, 1975, at Sentinel
Pest Control Laboratory, Springfield, Illinois. The pesticide involved
was SENTINEL ROACH SPRAY; charges included misbranding and
adulteration—product contained an additional active ingredient not
claimed on the label.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $500.00.
2031. In Re: Midline Exterminating Co., EPA Region V, March
25,1976. (I.F.&R. No. V-321-C, I.D. No. 125726.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(2)(L); 136j(a)(2)(N) and 136e(c)(l). The action pertained to the
firm's failure to submit a pesticides annual report.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $480.00.
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2032. In Re: The Broadway Supply Company, EPA Region V,
March 30,1976. (I.F.&R. No. V-323-C, I.D. No. 125752.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(2)(L); 136j(a)(2)(N) and 136e(c)(l). The action pertained to the
firm's failure to submit a pesticides annual report.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $3,456.00.
2033. In Re: Velsicol Chemical Corporation, EPA Region V,
April 23,1976. (I.F.&R. No. V-327-C, I.D. No. 114619.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(E); 136{q)(l)(G); 136(q)(l)(F); 136(q)(2)(A)
and 136(q)(2)(C)(i). The action pertained to a shipment made on April
1, 1975, from New Orleans, Louisiana, to St. Joseph, Missouri. The
pesticide involved was 72 24D AMINE; charges included
nonregistration and misbranding—inadequate warning or caution
statement, inadequate directions for use, failure to bear a proper
ingredient statement and failure to bear a statement giving the name
and address of the producer, registrant or person for whom
manufactured.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $ 1,600.00.
2034. In Re: R. H. Shumway Seedsman, EPA Region V, May 3,
1976. (I.F.&R. No. V-328-C, I.D. No. 119371.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(E) and 136(q)(l)(G). The action pertained
to a shipment made on July 8, 1975, from Rockford, Illinois, to
Marietta, Ohio. The pesticide involved was EVER GREEN GARDEN
1395
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SPRAY; charges included nonregistration and misbranding—failure
of the label to bear adequate warning or caution statements.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,650.00.
2035. In Re: Akin/Alisonia International Corporation, EPA
Region V, May 21, 1976. (I.F.&R. No. V-322-C, I.D. No.
108916.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(c)(l) and 136(q)(l)(A). The action pertained to a
product held for distribution or sale on April 16, 1975, at Gerard-
Pellham, A division of Akin/Alisonia International Corporation,
Hinsdale, Illinois. The pesticide involved was AKTINOL FOUR-WAY
ACTION CLEANER; charges included adulteration and
misbranding—strength or purity fell below the professed standard of
quality as expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $180.00.
2036. In Re: Kirsto Company, EPA Region V, June 25, 1976.
(I.F.&R. No. V-330-C, I.D. No. 109070.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(c)(l) and 136(q)(l)(A). The action pertained to a
product held for distribution or sale on May 15, 1975, at E-Z Flo
Chemical Company, a Division of Kirsto Company, Lansing,
Michigan. The pesticide involved was E-Z FLO KOCIDE-THIODAN
DUST; charges included adulteration and misbranding—strength or
purity fell below the professed standard of quality as expressed on its
labeling.
1396
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The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,350.00.
2037. In Re: Applied Biochemists, Inc., EPA Region V,
November 9,1976. (I.F.&R. No. V-329C.)
This civil penalty proceeding was settled by hearing. The
following is Administrative Law Judge Marvin E. Jones' Initial
Decision.
On March 22, 1976, Complainant, the U.S. Environmental
Protection Agency, filed its Complaint and Notice of Opportunity for
Hearing against the Respondent, Applied Biochemists, Inc., via
certified mail, requesting imposition of a civil penalty totaling
$3,910.00 and alleging that Respondent had violated Section 12 of
the Federal Insecticide, Fungicide and Rodenticide Act, as amended
[7 U.S.C. 135a(a)(l), 135b, as continued in effect by Section 4(b) of
the FEPCA of 1972, and 7 U.S.C. 136j(a)(l)(E)], hereinafter FIFRA, in
that a certain product, Black Algaetrine, a pesticide, was shipped by
Respondent from its place of business, Mequon, Wisconsin, to Brewer
Chemical Corporation, Honolulu, Hawaii. On this record, it is
admitted that said shipment was made on or about January 13,
1975; that the product was not then registered under Section 4 of the
FIFRA, as continued in effect under Section 4(a) of the FEPCA of 1972
in that registration for the product was thereafter granted and
received by Respondent on April 17, 1975, and that the product was
misbranded in that the label stated, in part, that it was registered
under EPA Registration No. 8959-14AA, when in fact it was not so
registered.
A Request for Hearing and Answer with Affirmative Defenses
was filed by the Respondent on April 9, 1976. An Adjudicatory
Hearing was scheduled and a prehearing conference was conducted
by correspondence as provided by Section 168.36(d) and the parties
complied with all requirements within the mandated time limits.
1397
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On September 1, 1976, Complainant moved for judgement on
the pleadings which motion was taken under advisement for
consideration at the time scheduled for hearing.
On September 30, 1976, the hearing was convened at the
Federal Courthouse located in Milwaukee, Wisconsin, whereupon
Complainant renewed its motion for and was granted judgement on
the pleadings as regards liability and Respondent was allowed to
proceed with the presentation of evidence bearing on the
inappropriateness of and in mitigation of the proposed civil penalty.
The parties having thereafter filed briefs, Proposed Findings of Fact
and Conclusions of Law, and having fully considered the evidence
and arguments of counsel, the undersigned makes and finds the
following Findings of Fact and Conclusions of Law.
Findings of Fact
1. That the Respondent is a Wisconsin Corporation whose
principal place of business is located at Mequon, Ozaukee County,
Wisconsin, and is engaged in the manufacture and distribution of
various water treatment products and chemicals, with annual gross
sales, for the twelve months ending May 31, 1976, of approximately
$900,000.
2. That APPLIED BIOCHEMISTS, INC. filed and application
for registration with the Environmental Protection Agency in August
of 1973, for the product known as Black Algaetrine.
3. That on February 22, 1974, Respondent forwarded its
typewritten-corrected label to the Environmental Protection Agency,
together with all other necessary documentation for the registration
for the product known as Black Algaetrine.
4. That on June 4, 1974, the Environmental Protection
Agency forwarded a letter to APPLIED BIOCHEMISTS, INC. which
stated as follows:
1398
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"The product referred to above will be acceptable for
registration under the Federal Insecticide, Fungicide and
Rodenticide Act provided finished labeling is submitted.
'EPA Registration No. 8959-14' is being reserved for this
product. This must appear on the finished label. The
'Notice of Registration' will be issued when five (5) copies
of the accepted finished (printed) labeling are submitted.
Finished labeling is that which will be attached to or
accompany the product. Refer to the attached A-79
enclosure.
To expedite handling, please return the enclosed
duplicate copy of this letter with your finished labeling.
This letter does not constitute registration, and the
product may not be lawfully marketed in interstate
commerce until it is registered.
Sincerely,"
5. That in response thereto, Respondent caused
approximately ten thousand (10,000) labels to be produced and on
June 27, 1974, forwarded its finished labels to the Environmental
Protection Agency.
6. That the cost of production of the labels and affixation of
those labels to the containers used by APPLIED BIOCHEMISTS, INC.,
approximated $2,500 to $3,500.
7. That the verbiage used by APPLIED BIOCHEMISTS, INC.
in its printed label submitted on June 27, 1974, was verbatim from
the original typewritten-corrected label previously submitted to the
Environmental Protection Agency on February 22, 1974.
8. That the EPA letter of June 4, 1974, raised no question
with regard to the verbiage used by Respondent in its typewritten-
corrected label previously submitted on February 22, 1974.
1399
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9. That on July 25, 1974, the Environmental Protection
Agency forwarded a letter to APPLIED BIOCHEMISTS, INC. which
stated as follows:
"The labeling referred to above, submitted in connection
with registration under the Federal Insecticide, Fungicide
and Rodenticide Act, is not acceptable for the reasons
given below. It should be corrected or amended in
accordance with these comments and resubmitted in
quintuplicate.
Delete the phrase '...and in recommended pool dilutions
is nontoxic to humans.' This safety claim would misbrand
the product. Refer to section 362.14(a)(5) of the
Regulations for the enforcement of the Act. We regret
this point was not made during our previous review.
Revised, finished (printed) labels are required for
registration.
Sincerely,"
10. That in response thereto the Respondent, by letter dated
August 5, 1974, forwarded the necessary corrected labels which
deleted the questionable phrase and informed the Environmental
Protection Agency as follows:
"The phrase '...and in recommended pool dilutions is
nontoxic to humans.' will be deleted from our label as
requested. This deletion will occur in our next printing and
finished labels will be submitted at that time..(Emphasis
supplied)
Thank you.
Sincerely,"
11. That the Respondent had a history of dealing with the
Environmental Protection Agency which allowed, in at least one
1400
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instance, for subsequent amendment of labeling which would allow
for the use or erroneous labels on hand with revisions to appear on
subsequent printings.
12. That the Respondent received no communication from the
Environmental Protection Agency after said letter of August 5, 1974,
until March 24, 1975.
13. That the Respondent forwarded a letter dated December
6, 1974 to the Environmental Protection Agency which complied with
its agreement to amend subsequent labels when the original
consignment was expended. The content of that letter is as follows:
"Enclosed you will find five (5) copies of our revised Black
Algaetrine label with the required revision specified in
your letter of July 5, 1974.
These labels represent the text and graphics which will
appear on the marketed container.
Sincerely,"
14. That no response was received from the Environmental
Protection Agency following submission of the revised labels on
December 6, 1974, until March 24, 1975.
15. That between August 5, 1974, and March 24, 1975,
Respondent shipped Black Algaetrine in interstate commerce in
violation of the Act, using the said labels described above.
16. That the first communication from the Environmental
Protection Agency to Respondent with regard to Black Algaetrine
after July 25, 1974, was a telephone call on or about March 24,
1975, from the Agency to the Respondent at which time the Agency
informed the Respondent that registration had not been issued.
17. That, in the preceding three year period, Respondent has
experienced a decline in sales due to increased competition, and in
the past year has had its line of credit of $250,000 withdrawn; and
1401
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has received financial assistance in the sum of $36,000 from its
President.
18. In 1976 Respondent's earning decreased from 13 cents
per share to 6 cents per share.
19. Respondent's building was purchased in 1975 for
$ 132,000 and is mortgaged for $98,000.
20. That Respondent's violation was caused in part by the
failure of the Environmental Protection Agency to process the
application and/or to answer repeated inquiries and submissions by
the Respondent.
21. That the Respondent's only prior history of
noncompliance with the Act occurred in the fall of 1974 (Applied
Biochemists, Inc., IF&R-V-208C, ID # 115054, September 22, 1974).
22. That Respondent has taken the following steps to insure
compliance with the Act.
(a) Hired additional personnel in an effor to prevent
reoccurrences of the same problem.
(b) Resorted to the internal procedure of using
exclusively Certified Mail to insure response by the Environmental
Protection Agency to inquiries.
(c) Has instituted a tickler system to insure compliance
with the Act.
23. That there was no evidence of injury to any individual or
to the environment as a result of the subject violation.
1402
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Conclusions of Law
1. The Respondent violated the Act in shipping the product
known as Black Algaetrine in interstate commerce before receipt of
registration.
2. The violation is attributable to the mistaken theory by
Respondent that obtaining said registration was a "mere formality"
aggravated by its attendant unconcern for duties placed on it by
pertinent regulations; and to the unjustified inattention and delay on
the part of Complainant.
Disi jssion
In considering the issues of the instant case, it must be kept in
focus that the applicable laws and regulations promulgated pursuant
thereto are "regulatory" in nature, with the objective of controlling
and directing the use, shipment, distribution, and sale of "pesticides"
so that, where present, the danger of undesirable side effects on
human health and the environment can either be avoided or
completely alleviated.
Registration and labeling are two of the regulatory tools which
can be utilized effectively to avert such dangers and, in instances
where a safe use cannot be realized, to cancel registration of
undesirable products. It is clear that it is at the time of registration
that human health and enviornmental problems of pesticides, if any,
should be discerned.
Failure to apply appropriate sanctions where the Act is violated
will, in effect, invite violations in increasing numbers which could
ultimately frustrate and defeat the scheme of regulation
contemplated by the Act.
The violation with which Respondent is here charged does not,
standing alone, appear to have brought about grave consequences to
humanity or the environment; but, on principle, it can be seen that the
effect of this violation, in conjunction with the effect of many others,
1403
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is far from trivial, (cf Wickard v Filburn, 317 US 111, 635 ct. 82). For
this reason, adherence to and application of the letter of the statute
and the applicable regulations is essential to an equitable
consideration of the facts and the circumstances with which we are
here presented. While the factors enumerated in Section 168.60(b)(1)
can be considered in mitigation (as well as in aggravation) of the civil
penalty to be assessed, any single factor should not be considered as
a defense per se.
Civil Penalty
In determining the amount of penalty to be assessed, Section
14(a)(3) of the statute [7 U.S.C. 1361(a)(3)] requires that there shall
be considered the appropriateness of the penalty to the size of
respondent's business, the'effect on respondent's ability to continue
in business and the gravity of the violation. Section 168.60(b) of the
rules of practice provides that in evaluating the gravity of violation
there shall also be considered repondent's history of compliance with
the Act and any evidence of good faith or lack thereof.
Respondent is a relatively large company and though its
financial picture has been clouded by financial reversals of varying
extent I do not find that assessment of a penalty, even in the amount
proposed, will adversely affect its ability to continue in business.
I have considered evidence bearing on the gravity of the
violation from the standpoints of gravity of harm and gravity of
misconduct. I find some basis in this record for finding adverse to
Respondent from the gravity of harm aspect, considering the
character of the product sold and from the changes required and
which are now utilized; however, this aspect is greatly mitigated
under the facts and circumstances which indicate an absence of
concern on the part of Complainant, at least until after the date of
violation. There was misconduct on the part of Respondent in
shipping said product in interstate commerce without having formally
obtained the required registration. However, as hereinbefore
indicated, the Complainant, by its failures and omissions contributed
to some extent to the creation of the violation here complained of.
1404
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Respondent once before failed to fully comply with the regulations. In
that instance, as here, I do not discern that there existed an intent to
violate the law. In this regard it is worthy of mention that intent is not
an element of the offense charged under the civil penalty provision of
FIFRA as amended1, [cf United States v Dotterweich, 320 U.S. 277
(1943)]. Further, I do not find that Respondent's violation is
attributable to its failure to act in good faith.
Section 168.46(b) of the Rules of Practice provides that "the
Administrative Law Judge may at his discretion increase or decrease
the assessed penalty from the amount proposed to be assessed in the
Complaint."
I have considered the nature and gravity of the violation. I have
further considered the effect of the inattention and delays
attributable to Complainant in its handling of Respondent's
application and correspondence concerning same. Even though
Respondent is a relatively large company and able to pay the penalty
proposed, its financial well-being has been clouded to some extent by
recent financial reverses. Accordingly, I am of the view that a penalty
of $ 1,150.00 is appropriate.
Having considered the entire record and based on the Findings
of Fact'and Conclusions herein, it is proposed that the following
Order be issued:
Final Order
Pursuant to Section 14(a)(1) of the Federal Insecticide, Fungicide
and Rodenticide Act, as amended [7 U.S.C. 1361(o)(l}], a civil
penalty of $1,150.00 is assessed against Respondent Applied
Biochemists, Inc., Mequon, Ozaukee County, Wisconsin, for
violations of said Act which have been established on the basis of
Complaint issued on March 22, 1976, and Respondent is ordered to
pay the same by Cashier's or Certified Check, payable to the United
States Treasury, within sixty (60) days of the receipt of this order."
1405
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This Initial Decision is signed and filed this 9th da/ of November
1976, at Kansas City, Missouri.
Marvin E. Jones
Administrative Law Judge
1 The Criminal Penalty section of the Act, 14(b), requires that the
violation be "knowingly".
2 The Initial Decision and the proposed Final Order assessing a
civil penalty shall become the Final Order of the Regional
Administrator, unless appealed or reviewed by the Regional
Administrator as provided in 40 CFR 168.46(c).
2038. In Re: Industrial Chemical Laboratories, Inc., EPA Region
VII, June 16,1976. (I.F.&R. No. VIM81-C.)
This civil penalty proceeding was settled by hearing. The
following is Administrative Law Judge Marvin E. Jones' Initial
Decision.
By complaint dated February 26, 1976, the Chief, Pesticides
Branch, Environmental Protection Agency, Region VII (hereinafter
Complainant), charged Industrial Chemical Laboratories, Inc., of
Omaha, Nebraska (hereinafter Respondent), with a violation of
Section 12(a)(2)(L) of the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (FIFRA) in that it, as a pesticide
producer whose pesticide producing establishment is registered with
the Administrator (of EPA) pursuant to Section 7(a), failed to timely
submit to said Administrator the information required by Section 7(c)
of the Act and regulations thereunder. The Complaint, issued
pursuant to Section 14 of the Act proposed to assess a civil penalty of
$3,200. The Respondent filed its answer to the Complaint admitting
1406
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that it received the annual report (form), as alleged, and further that it
failed, through oversight, to complete and return the report to
Complainant by February 1, 1976, but denies that its failure to file
said report on time, as admitted, constitutes an independent violation
of the Act and regulations, subject to the imposition of the penalty
sought.
An Adjudicatory Hearing is requested in Respondent's said
answer on the following issues:
(1) The appropriateness of the proposed civil penalty.
(2) Whether Section 7(c), when read together with Section
12(a)(2)(L), is a proper basis for assessment of a civil penalty.
Said Cause was set for hearing in-Omaha, Nebraska, on May
27, 1976; however, said hearing was cancelled when, on May 21,
Daniel J. Shiel, Complainant's Attorney and Alex M. Clarke,
Respondent's Attorney, jointly requested an accelerated decision and
filed their Stipulation herein agreeing to material facts, as hereinafter
set forth.
The Stipulation so filed by the Complainant and Respondent
agreed to the following:
(1) The Responenf produces pesticides at an establishment
registered with the Administrator pursuant to Section 7 of the Act.
(2) Respondent's gross sales in 1975, for all business
activities, exceeded one million dollars. Its financial condition is as
presented in a balance sheet (Exhibit 1) attached to the Stipulation.
(3) The penalty proposed by Complainant ($3,200) was
developed by use of the Civil Penalty Assessment Scheduled (39 PR
27713, July 31, 1974, as modified by an Enforcement Division
memorandum dated April 22, 1975).
1407
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(4) The said annual pesticides report form was received by
Respondent on December 16, 1975, along with instructions that it be
completed and returned no later than February 1, 1976.
(5) Said report form was completed by Respondent and
received by Complainant on or about March 1, 1976.
(6) Respondent had filed similar pesticide reports in 1974
and 1975.
(7) The parties agree that the facts stipulated are all of the
facts material to the violation charged.
(8) Respondent agrees to waive its right to a hearing in this
matter.
That the material facts are not in dispute is enunciated in
Respondent's Brief. Respondent further admits that it, as a producer
of pesticides, is subject to Section 7 of the Act which is, in part, as
follows:
Section 7. REGISTRATION OF ESTABLISHMENTS
(a) Requirement. No person shall produce any pesticide
subject to his Act in any state unless \\\e establishment in which it
is produced is registered with the Administrator. The application
for registration of any establishment shall include the name and
address of the establishment and of the producer who operates
such establishment.
(b) Registration. Whenever the Administrator receives an
application under subsection (a), he shall register the
establishment and assign it an establishment number.
(c) Information Required.
(1) Any producer operating an establishment
registered under this section shall inform the Administrator
1408
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within 30 days after it is registered of the types and amounts of
pesticides
(A) which he is currently producing
(B) which he has produced during the past year;
and
(C) which he has sold or distributed during the
past year.
The information required by this paragraph shall be kept current
and submitted to the Administrator annually vs required under
such regulations as the Administrator may prescribe, (emphasis
added).
Section 12(A)(2)(L) provides as follows:
(2) It shall be unlawful for any person
(L) who is a producer to violate any of the
provisions of Section 7;
Respondent, in its brief as well as in its answer, requests
resolution of the Issues' above set forth, page 2. They are restated in
its brief, as follows:
'(!} Whether or not failure to file the annual report within the
time specified by Complainant constitutes a substantive offense
under the Act giving rise to imposition of penalties; and
(2) Whether or not the proposed penalties are excessive.
Respondent contends that failure to file its annual report within
the time prescribed by Complainant does not constitute a substantive
offense supporting the imposition of a penalty against it. While it
admits that the requirement of initial information regarding
production and sales of its registered product is substantive, it
questions the character of the information required to be provided
annually thereafter "under such regulations as the Administrator may
require". It suggests that the initial production information required
1409
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under the first sentence of said subsection accomplishes the
registration and establishes the character of the producer for
purposes of the Act; the second sentence, it characterizes as part of
"a vast host of procedural or technical requirements" which
"Complainant seeks to elevate to the level of substantive offenses".
Porter v Nowak, 157 F.2d 824 (1st Gr. 1946), cited by Respondent,
rules that resort to the policy of the law may be had to ameloriate its
seeming harshness or to qualify its apparent absolutes, and that such
rule is applicable to regulations as well as statutes. However, it is also
clear from said case that the exercise of that principle cannot be
unrestrained; courts are there called upon to exercise great caution
and circumspection in order to avoid usurpation of legislative power,
citing Crooks v Harrelson, 282 US 55, 60; 51 S. Ct. 49, 50; 75 L Ed.
156. In the Crooks case the court rules that to justify a departure from
the letter of a statute because of its spirit and policy, the absurdity
following from the literal application of its words must not only "be so
gross as to shock the general moral or common sense", but also
"there must be something to make plain the intent of Congress that
the letter of the statute is not to prevail".
Respondent's argument must be rejected. I find that Section 7 is
a "regulatory" as opposed to a "registration" provision. The
commonly accepted definition of "regulate" is to "control or direct";
further, the term connotes adjustment necessary to ensure accuracy of
operation. In this instance, not only the registration but also the
reports required thereafter, are the tools or instruments used in the
regulation of establishments producing pesticides. The
"Requirement" of Section 7(a] is clear. ''Noperson shall produce any
pesticide—unless the establishment in which it is produced is
registered—"; and Section 7(c)(l) evinces legislative intent that a
registrant shall be required to furnish information, not merely to
characterize the establishment registered, but to provide past,
present, and future information concerning the production, sale and
distribution of pesticides throughout the nation. From a regulatory
point of view, its equafly, if not more, Important to be informed, on a
current basis, as to the character and volume of pesticides produced,
as to know the identify of their producer. The provision concerning
the updating of said information is as much a part of the plan of
regulation contained in Section 7(c)(l) as is the furnishing of the initial
1410
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information. That the Administrator, under the Act, shall prescribe the
regulations for the furnishing of future information does not make
such requirement less substantive; rather a means is there provided
for making less cumbersome, to the extent practicable, a tool
essential for maintaining regulatory control in an area of enterprise
where the public health and welfare must be protected.
In summary, Section 7(c)(l) evidences an intention on the part of
Congress that the furnishing of past, present, and future information
by registrants will be required.2 That future updating was intended as
part of the statutory scheme of regulation then promulgated is
evidenced by Section 12(a)(2)(L]:
(2) It shall be unlawful for any person
(L) who is a producer to violate any of the
provisions of Secfion 7; (Emphasis supplied).
I conclude that the admitted violation of Respondent subjects it
to a civil penalty as provided in FIFRA Section 14(a) which provides in
pertinent part:
In determining the amount of the penalty the
Administrator shall consider the appropriateness of such penalty
to the size of the business of the person charged, the effect of
the person's ability to continue in business, and the gravity of
the violation.
Section 168.60(b)(l) of the Rules of Practice also enumerates
these three criteria and Section 168.60(b)(2) adds two other factors
to be considered in evaluating the gravity of the violation: (1}
Respondent's history of compliance with the Act, and (2) good faith or
lack thereof.
Said civil penalty assessment schedule was issued to provide
direction to Agency personnel assessing civil penalties. The Rufes of
Practice [Section 168.46(b)] provide that the Administrative Low
Judge may consult and may rely on the guidelines but that he "may,
1411
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at his discretion, increase or decrease the assessed penalty from the
amount proposed to be assessed in the Complaint".
Since the size of Respondent's business is one of the factors that
must be considered, the guidelines have utilized five size gradations
based on a respondent's annual sales. The parties have stipulated
that Respondent is a Category V firm, with annual sales of over
$1,000,000.
The guidelines, as published in the Federal Register, for the type
of violation here involved, proposes $5,000 for a Category V firm.
This amount was reduced, by a memorandum dated April 22, 1975,
from the Director, Pesticides Enforcement Division to the Regional
Enforcement Division Directors, to $3,200, which amount is the
penalty proposed in the instant complaint.
The agreed Statement of Facts (Stipulation, supra) states that
Respondent did not file its annual report on February 1, 1976, as
required, but filed said report on March 1, 1976, three days following
the issuance of the subject complaint. Respondent filed similar reports
in 1974 and 1975. On consideration of the violation involved and of
all of the factors hereinabove set forth, I find that Respondent's
failure to timely file its report was not a deliberate flouting of the law,
but was due to negligence. I interpret the guidelines applicable to
civil penalties as an effort to arrive at an amount in each case, which,
though painful, will not be crippling. I find that $1,500 is an
appropriate penalty and a penalty in said amount is hereby assessed.
Although the evidence shows that the Respondent sustained a
substantial operating loss in 1975, I find that the penalty herein
assessed will have no adverse effect on its ability to continue in
business.
The foregoing includes the Administrative Law Judge's Findings
of Fact, Conclusions and reasons therefor.
1412
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Proposed Final Order3
1. Pursuant to Section 14(o) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended, a civil penalty of
$1,500 is hereby assessed against Respondent, Industrial Chemical
Laboratories, Inc., for the violation of the Act found herein.
2. Payment of the full amount of the civil penalty assessed
shall be made within 60 days of the service of the final order upon
Respondent by forwarding to the Regional Hearing Clerk a cashier's
or certified check payable to the United States of America.
Marvin E. Jones
Administrative Law Judge
June 16, 1976
1 The Decision herein was reached on consideration of only those
arguments advanced by the Parties in their briefs. The parties did not
at any time suggest or urge that Respondent's position constituted an
attack on Regulations promulgated by rule making.
2 I find persuasive the statement of Complainant that "this
information is essential for EPA to effectively perform its regulatory
functions". It is apparent that a multitude of violations like the subject
violation can only have a serious negative effect on the entire
regulatory program, (see also Wickardv Filbum, 317 US 111 (1942).
3 Unless appeal is taken by the filing of exceptions pursuant to
Section 168.51 of the Rules of Practice, or the Regional Administrator
elects to review this decision on his own motion, the order shall
become the final order of the Regional Administrator [See Section
168.46(c)].
1413
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2039* In Re: The Parawox Company, EPA Region VII, June 25,
1976. (I.F.&R. No. VIM83-C.)
This civil penalty proceeding was settled by hearing. The following is
Administrative Law Judge Marvin E. Jones1 Initial Decision.
By Complaint filed February 26, 1976, the Chief, Pesticides
Branch, United States Environmental Protection Agency, Region VII
(hereinafter Complainant), charged The Parawax Company of
Council Bluffs, Iowa (hereinafter Respondent), with a violation of
Section 12(a)(2)(L) of the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (FIFRA), in that it, as a pesticide
producer failed to submit to the Administrator (of EPA) the
information required by Section 7{c) of the Act and regulations
thereunder. The Complaint, issued pursuant to Section 14 of the Act,
proposed to assess a civil penalty of $1,760. The Respondent filed its
Answer on March 16, 1976, admitting that the annual report was not
filed by February 1, 1976, but objected to the penalty proposed to be
assessed as excessive; and requested an Adjudicatory Hearing.
Hearing was held in Council Bluffs, Iowa, on May 26, 1976. The
Complainant was represented by Daniel J. Shiel, Legal Branch, US
EPA Region VII, and Respondent was represented by Joe Ranney, Jr.,
President of Respondent Company. The Complainant filed proposed
findings of fact, conclusions and order, and also a brief in support
thereof. The Respondent did not file documents of such nature. The
documents filed by Complainant have been duly considered.
Section 7(a) of the Act requires that establishments producing
pesticides be registered with the Administrator. Section 7(c) requires
the producer operating a registered establishment to submit certain
information within 30 days after its registration and thereafter to
keep the information current by submitting annual reports as the
Administrator may require by regulations.
The regulation issued under this section is found in 40 CFR Part
167, Section 167.5 (38 FR 36557, November 6, 1973). It requires
information as to the types of pesticides produced, the past year's
amount of production and the sales or distribution of each product.
1414
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and the amount of current production of each product. The reports
are required to be filed annually on or before February 1.
The Respondent freely admits the fact that it failed to file the
annual report as required by regulation. It further admits it received a
notice informing it of the requirement to file the annual report
accompanied by the report form and instructions for completing the
form. The notice stated that the form must be completed and returned
to the EPA Regional Office by February 1. Evidence shows that a
form letter accompanied the foregoing and stated (paragraph 2,
page 2 thereof} that "failure to file the Pesticide Report by February
1, 1976, will result in the initiation of civil or criminal proceedings."
The report form not having been completed and filed by
February 26, 1976, the Complaint in this case was issued. It is
undisputed that the completed report was mailed by Respondent on
March 5 and received by Complainant on March 8, 1976.
Respondent reported on February 28 that the form hod been lost and
requested another report form, which was supplied.
The proposed penalty of $1,760 was based on Guidelines for
Assessment of Civil Penalties as published in the Federal Register on
July 31, 1974, (39 FR 27711) as modified by an interim deviation
notice issued on April 22, 1975. The Guidelines utilize five "size of
business" gradations based on a respondent's annual gross sales for
the prior fiscal year, as follows: I - less than $100,000; II - between
$100,000 and $400,000; 111 - between $400,000 and $700,000; IV
- between $700,000 and $1,000,000; and V - over $ 1,000,000.
The said Guidelines for the type of violation here involved
proposes $5,000 for a Category V firm, $2,750 for a Category III
firm, and $1,250 for a Category II firm. These amounts were reduced
by a memorandum entitled "Interim Deviation from Civil Penalty
Assessment Schedule" dated April 22, 1975 from the Director,
Pesticides Enforcement Division to the Regional Enforcement Division
Directors. The reduction in the categories mentioned was to $3,200,
$1,750, and $800 respectively.
1415
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During the course of Preheoring Conference and exchange, it
was established that Respondent's gross annual sales for the
preceding fiscal year did not exceed $400,000 but were actually in
the amount of $372,348.76, as further evidenced by Respondents
Exhibit "C", and therefore, the penalty proposed has been by
Complainant lowered from $1,760 to $800, in accordance with said
Assessment Schedule.
Section 14(a)(3) of FIFRA states in pertinent part:
In determining the amount of the penalty the
Administrator shall consider the size of the business of the
person charged, the effect on the person's ability to
continue in business, and the gravity of the violation.
Section 168.60 (b)(l) of the Rules of Practice also enumerates
these same three criteria and Section 168.60 (b)(2) adds two other
factors to be considered in evaluating the gravity of the violation—
(1) Respondent's history of compliance with the Act, and (2) good
faith or lack thereof.
The Guidelines were issued to provide direction to Agency
personnel assessing penalties and are designed to facilitate, in the
different regions, a comparable penalty for similar violations. The
Rules of Practice (Section 168.46 (b)} provide that the Administrative
Law Judge may consult and may rely on the Guidelines but that he
"may at his discretion increase or decrease the assessed penalty
proposed to be assessed in the Complaint."
In arriving at an amount which I feel should be assessed as a civil
penalty to be paid by Respondent, I have considered that Respondent
has experienced business losses, in the eight years since the witness,
Mr. Ranney, took over management of the firm, in a total amount of
around $75,000. A loss of $4,163.77 last year (Respondent's Exhibit
"C"), and a projected loss of an even greater amount in 1976
(Respondent's Exhibit "B"), is undisputed. Though Respondent's gross
sales in 1975 approached $400,000, it is also undisputed that this
amount represents gross sales of hundreds of items. Five items,
registered as pesticides, but described by witness Ranney as
1416
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disinfectants, comprise but two to three percent of the total sales of
this firm, according to testimony that was not challenged or
contradicted. It is sufficient comment on Respondent's failure to file
its report by the date required, that same was not intentional or a lack
of good faith, but resulted from negligence on the part of
management and the employees given the responsibility for
completing and mailing the report to Complainant. In previous years
the filing of this report was timely as by regulation required. The
record reflects that steps have been taken to assure that such
negligent handling of Respondent's business will not be repeated in
the future. Respondent's witness also recounted the extreme difficulty
experienced with respect to illness, retirement, and indifference of
respective employees during the period after receipt of the form and
up to February 1, 1976, when it should have been mailed. This
furnishes some explanation for the negligent manner in which the
forwarding of the report was handled, but, legally, it does not lessen
the responsibility placed on Respondent to comply with the Act to
furnish current information respecting the pesticides presently and
prospectively manufactured, collected, and shipped from its
registered establishment.
Said Section 7 formulates a scheme of regulation which, when
properly implemented, provides the tools for protection against
products whose harmful effects, if uncontrolled, will seriously effect
the health and wellbeing of the public in general. It is readily
apparent that reports, such as the one required of Respondent, supply
a necessary tool for maintaining adequate control and supervision
over inherently dangerous products and their manufacture, shipment,
and use. Any failure to apply adequate sanctions in instances where
the Act is violated will, in effect, invite violations in increasing
numbers which will ultimately frustrate and defeat the scheme of
regulation required and contemplated by the Act. Respondent's
violation, by itself, may appear trivial; however, the instant violation
taken together with that of many others is far from trivial. [See
Wickard v. Filburn, 317 US 111, 63S. Ct. 82].
Although the evidence shows that the Respondent sustained an
operating loss in 1975, and its financial posture for the current year is
conditioned on improved sales during the summer months, I find the
1417
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penalty herein assessed will have no adverse effect on its ability to
continue in business.
In the premises, I find that the amount of $350 is appropriate as
a civil penalty under the facts and circumstances here presented, and
a penalty in said amount is hereby assessed against the Respondent.
The foregoing includes the Administrative Law Judge's Findings
of Fact, Conclusions and reasons therefor.
Proposed Final Order
1. Pursuant to Section 14(a) of the Federal Insecticide,
Fungicide and Rodenticide Act, as amended, a civil penalty of $350
is hereby assessed against Respondent, The Parawax Company, for
the violation of the Act found herein.
2. Payment of the full amount of the civil penalty assessed
shall be made within 60 days of the service of the final order upon
Respondent by forwarding to the Regional Hearing Clerk a cashier's
check or certified check payable to the United States of America.
Marvin E. Jones
Administrative Law Judge
June 25, 1976
Unless appeal is taken by the filing of exceptions pursuant to
Section 168.51 of the Rules of Practice, or the Regional Administrator
elects to review this decision on his own motion, the order shall
become the final order of the Regional Administrator [See Section
168.46(c)].
1418
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2040. In Re: Hopkins Agricultural Chemical Company, EPA
Region VII, July 5, 1976. (I.F.&R. No. VII-159C, I.D. No.
120881.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E) and 136(c)(l). The action pertained to a shipment made
on July 18, 1975, from St. Louis, Missouri, to Chattanooga,
Tennessee. The pesticide involved was MOSQUITO FOG-1; the
charge was adulteration—its strength or purity fell below the
professed standard of quality as expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,458.00.
2041. In Re: X-L Laboratories, EPA Region VII, July 8, 1976.
(I.F.&R. No. VIM67C, I.D. No. 113941.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 135b
and 135a(a)(l). The action pertained to a shipment made on March
25, 1974, from Des Moines, Iowa, to Ramona, South Dakota. The
Pesticide involved was PLASTIC PAIL (CALCIUM HYPOCHLORITE
(70%)); the charge was nonregistration.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $250.00.
2042. In Re: Chevron Chemical Company, EPA Region VII, July
30,1976. (I.F.&R. No. VII-193C, I.D. No. 120742.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(c)(l) and 136(q)(l)(a). The action pertained to a
shipment made on October 11, 1974 from Maryland Heights,
Missouri, to Madison, Georgia. The pesticide involved was
ORTHOCIDE 75 SEED PROTECTANT; charges included
1419
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adulteration and misbranding—strength or purity fell below the
professed standard of quality as expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,800.00.
2043. In Re: John L. Beaulieu, d/b/a Beauliau Chemical
Company, EPA Region IX, October 29, 1975. (I.F.&R. No.
IX-77C.)
This civil penalty proceeding was settled by hearing. The
following is Administrative Law Judge, Edward B. Finch's Accelerated
Decision.
Accelerated Decision
On November 27, 1974, Complaint and Notice of Opportunity
for Hearing was issued in the above matter by Director, Enforcement
Division, Region IX, alleging ten counts of violation of the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C,
Section 136-136z), by respondent holding for sale the pesticides
Beaulieu Concentrate B-San Powdered Bactericide (I.D. No. 113659),
Beaulieu Sani Jon (I.D. No. 113660), Beaulieu Triple Action (I.D. No.
113661) and Beaulieu Amicide (I.D. No. 113662), which pesticides
were not in compliance with the provisions of said Act and assessing a
proposed civil penalty.
By Answer to Complaint dated February 10, 1975, respondent
substantially denied each and every allegation of the Complaint and
as a separate, distinct and affirmative defense, respondent alleges
that the causes of action asserted by Complainant in this action have
been merged into a Final Order, dated October 30, 1974, in a
previous action involving the same parties and similar issues and that
said previous Final Order is res judicata of this action.3
Briefly stated, the prior action was based upon a complaint
involving these same parties and relating to the pesticide Beaulieu
1420
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Udder-Dyne Sanitizing Udder Wash. In substance it was alleged that
the composition of that product differed from its composition as
presented in connection with its registration with EPA and that the
product was misbranded in that its label was different from the label
submitted and approved in connection with the registration of the
product.
Hearing was held on May 21, 1974, and after proposed
findings of fact and conclusions were considered, in Initial Decision
and Final Order were issued wherein a civil penalty of $1,500 was
assessed.
It is alleged by respondent that the doctrine of res judicata
applies based upon the admission into evidence in the prior action,
over respondent's objection, the results and analysis relating to four
products of which samples were taken by an EPA inspector during an
inspection of respondent's plant on April 4, 1974.3 While complainant
offered this evidence to show "continuing violations and lack of good
faith by respondent," respondent contends the evidence was treated
during the proceeding as being "in dispute" and thereafter findings
and rulings were made thereon which act as a bar to the institution of
any subsequent action based thereon.
The pertinent part of Judge Levinson's Initial Decision relating to
the four products in question, reads as follows:
"Mr. Beaulieu testified in substance that the company
does not have stock on hand for products that are to be
shipped outside of California and that such products are
compounded in response to specific orders and that the
products from which samples were taken were not
intended for interstate shipment. However, records of
interstate shipments of these products were examined by
the EPA inspector and Mr. Beaulieu signed a statement to
the effect that such products from which samples were
taken had been shipped in interstate commerce. Further,
the samples of the products were taken from stock on
hand and the label of each product bore an EPA
registratio'n number. We find that products from which
1421
-------
the samples were taken were being held for sale for
interstate shipment. (Emphasis supplied)
"Two of the products were deficient in active ingredients
and one had an excess of active ingredients. The labels of
three of the products were not in accordance with the
labels as accepted at time of registration. (Emphasis
supplied)
"At the hearing on May 21, 1974, Mr. Beaulieu stated
that he had sent samples of the four products to an
independent chemical laboratory for analysis about a
week previously and that the results were expected in
about a week. We granted respondent 10 days within
which to submit results of these analyses. The respondent
submitted a copy of letter from a laboratory dated June
20, 1974, showing results of analyses of four named
products which the laboratory received on June 18,
1974. Although the names of the products were the same
as those taken during the plant inspection there is no
proof that they were from the same batch as the samples
that were taken on April 4. Further, it is obvious that the
samples tested were not the ones that Mr. Beaulieu said
he sent to the laboratory around the middle of May. The
complainant offered to furnish respondent with portions
of the samples taken on April 4 but it appears that
respondent did not accept the offer. We do not consider
the letter from the laboratory as reliable evidence for the
purpose of establishing the chemical content of the
products of which samples were taken on April 4."
And further, still quoting from the Initial Decision:
"The respondent's continued history of non-compliance
with the Act has defeated some of its prime purposes
which are to eliminate unregistered, adulterated, and
misbranded pesticides from the channels of commerce."
1422
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In any determination as to the application of either the doctrine of
"res judicata" or "collateral estoppel," it is essential that we look to
the prior proceeding and analyze the facts with regard to the extent
and in that manner the present proceeding includes the same
allegations, products and findings as would result if the present
proceeding proceeded to conclusion.
It so doing in this instance, we need only refer to the Initial
Decision of Judge Levinson where he refers to how he treated these
facts and the weight he gave to them in deciding the prior matter.
First, there is no question that the documents and results of
analysis relating to the four products which are the subject of this
proceeding were received in evidence in the prior matter, even
though over the objection of respondent. And that samples of these
four products were taken by an EPA inspector during an inspection of
respondent's plant on April 4, 1974. These exhibits were offered to
show continuing violations and lack of good faith.
The folders containing all original documents, including the
reports of analysis and all pertinent labels, relating to I.D. Nos.
113659, 113660, 113661 and 113662, which products are the
subject of the instant proceeding, were introduced by the
complainant into evidence as Exhibits 24, 25, 26, 27, respectively, in
the prior proceeding entitled In Re Beaulieu Chemical Company, I.F.
& R. No. IX-IOC (July 24, 1974), Reporter's Transcript, page 142,
Docket No. 141.12(P).
Secondly, Judge Levinson found "that products from which the
samples were taken were being held for sale for interstate shipment."
Respondent averred that the products from which the samples were
taken were not intended for interstate shipment, but complainant
showed that Mr. Beaulieu signed a statement for the EPA inspector to
the effect that such products from which samples were taken had
been shipped in interstate commerce.
Thirdly, Judge Levinson, in the prior proceeding, made the
following findings as to the four products which are the subject of this
proceeding:
1423
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1. "Two products were deficient in active ingredients."
A. I.D. No. 113659 - Beaulieu Concentrate B-San
B. I.D. No. 113662 - Beaulieu Amicide
2. "One had an excess of active ingredients."
A. I.D. No. 113660 - Beaulieu Sani Jon
3. "The labels of three of the products were not in
accordance with the labels as accepted at time of registration."
A. I.D. No. 113659 - Beaulieu Concentrate B-San
B. I.D. No. 113660 ~ Beaulieu Sani Jon
C. I.D. No. 113661 - Beaulieu Triple Action
These findings were not based solely on complainant's
allegations, but were actually the subject of considerable discussion
during the hearing which, taking into consideration the fact that this
evidence was admitted over respondent's objection, leads me to
conclude that all of the facts related to these four products,
particularly as to the chemical composition thereof, and interstate
shipment, were definitely "in dispute" in the prior proceeding.
An additional factor which leads me to conclude that the
violations which were found by Judge Levinson to exist in the prior
hearing were considered in aggravation of the penalty invoked is the
statement by him, "The respondent's continued history of non-
compliance with the Act has defeated some of its prime purposes
which are to eliminate unregistered, adulterated, and misbranded
pesticides from the channels of commerce."
In support of this conclusion and keeping in mind that the
evidence relating to the alleged violations involved in this proceeding
were introduced by Complaint Counsel in the prior proceeding to
1424
-------
show lack of good faith, I quote, in part, from Section 168.46(b) of
the Rules of Practice:
(b) Evaluation of Proposed Civil Penalty. In determining
the dollar amount of the recommended civil penalty
assessed in the initial decision, the Administrative Law
Judge shall consider all elements regarding the
appropriateness of civil penalty set forth in Section
168.60(b).
which reads in part as follows:
(b) Evaluation of Civil Penalty, The Final Order of the
Regional Administrator shall consider the
appropriateness of the penalty proposed to be assessed
in the...initial decision out of which the final order
originates.
(2) In evaluating the gravity of the violation, the Regional
Administrator shall also consider . . . (b) any evidence
of good faith or lack thereof. . .
Counsel for Complainant in his response to prehearing letter
dated April 10, 1975, and in his Memoranda of Points and
Authorities has presented a logical but incomplete argument in
opposition to the granting of respondent's motion for dismissal of the
complaint based on either the doctrine of "res judicata" or
"collateral estoppel."
Counsel admits only certain facts were conclusively decided in
the prior proceeding as evidenced by the following excepts from the
Initial Decision therein:
1) We find that products from which the samples were taken
were being held for sale for interstate shipment.
2) We do not consider the letter from the laboratory as
reliable evidence for the purpose of establishing the
1425
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chemical content of the products of which samples were
taken on April 4 ...
3) The respondent's continued history of non-compliance
with the Act has defeated some of its prime purposes
which are to eliminate unregistered, adulterated, and
misbranded pesticides from the channels of commerce.
And further avers that it is these facts which were placed in issue at
the hearing of May 21, 1974, and were adjudicated, that are
relevant to the instant case. That the parties are identical in both
instances is beyond dispute. These facts were subject to direct and
cross-examination before Judge Levinson at the hearing of May 21,
1974.
Counsel for Complainant has failed to fully reason out the
consequences of the statement in 2) above. The statement was made
by Judge Levinson only after respondent had attempted,
unsuccessfully, to dispute complainant's allegation that the four
products were either deficient in active ingredients, had an excess of
active ingredients and therefore the labels were in accordance with
the labels accepted at the time or registration.
While the mere mention of additional facts or evidence by
counsel during a hearing will not bar a new or later action on that
evidence, introduction of such evidence in the proceeding puts such
evidence in issue. And while new violations would have supported a
new proceeding where there is no indication of harassment by the
agency, a new proceeding is barred where those facts or evidence
were introduced into the record and were at issue in a prior hearing.
F. T.C v. Exposition Press, Inc., etal., 295F.2d869(1961).
I must therefore conclude that the parties and issues presented
in the instant matter are the same as those presented in the prior
proceeding which were considered and upon which a valid and final
judgment was made. This would supply the elements necessary to
apply the doctrine of "collateral estoppel." Ashe v. Swenson, 387
U.S. 336, 443(1970).
1426
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Complaint Counsel alleges that consideration of these four
exhibits in the prior proceeding was only incidental to the former
determination and does not constitute estoppel even though they
were litigated and decided therein.
This Court takes the position that these facts were not only
litigated and decided in the prior proceeding, but also that they were
considered in aggravation of the civil penalty which was incorporated
into a Final Order of the Regional Administrator. This finding,
therefore, places this matter directly within the requirements of the
general rule relating to the doctrine "res judicata," (a) there has been
a previous action between the same parties; (b) involving the same
matter; (c) a final judgment on the merits has been rendered with
respect to the same cause of action. Rhodes*. Jones, 351, F.2d884,
886(19651 cert. den. 383 U.S. 919.
The major purpose of the prior hearing was to determine if a
violation existed and if so to impose a penalty.
Since, prior to assessing the penalty, the court must consider all
evidence before it, I must conclude that Judge Levinson considered
the alleged violations which are the subject of the instant case in
aggravation of the penalty in the prior proceeding.
Therefor, it is ORDERED that for the reasons stated above, the
complaint herein be, and the same hereby is dismissed.
Edward B. Finch
Administrative Law Judge
October 29, 1975
Issued pursuant to Sec. 168.37 of the Rules of Practice, 40
C.F.R. 168.3.
1427
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2 In re beaulieu Chemical Co. (John L. Beaulieu, Owner), I.F. & R.
No. IX-10C, Docket No. 141.12(P).
3 Evidence which formed the basis for complaint in the prior
proceeding was obtained in November, 1972.
2044. In Re: Robert Hill, d/b/a F & H Chemical, EPA Region IX,
February 20, 1976. (I.F.&R. No. IX-84C, I.D. No. 111563.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E) and 136(c)(1). The action pertained to a product held for
distribution or sale on January 30, 1975, at F & H Chemicals, Visalia,
California. The pesticide involved was STERO SANITIZER
CLEANER; charges included adulteration and misbranding—
strength or purity fell below the professed standard of quality as
expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $500.00.
2045. In Re: O. E. Linck Company, a Division of Walco-Linck
Corporation, EPA Region IX, February 24, 1976. (I.F.&R.
No. IX-81CJ.D. No. 111375.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E); 136(q)(l)(A) and 136(c)(l). The action pertained to a
shipment made on November 9, 1973, from Los Angeles, California,
to Honolulu, Hawaii. The pesticide involved was TAT ROACH TRAP;
charges included adulteration and misbranding—strength or purity
fell below the professed standard of quality as expressed on its
labeling.
Complaint was dismissed since the pesticide sample was obtained as
a result of an invalid inspection.
1428
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2046. In Re: Fuller-O'Brien Corporation, EPA Region IX,
February 27, 1976. (I.F.&R. No. IX-86C, I.D. No. 111377.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l); 135b; 136j(a)(l)(e); 136(q)(l)(A) and 135(q)(2)(A). The
action pertained to a shipment made on or about April 23, 1974,
from South San Francisco, California, to Honolulu, Hawaii. The
pesticide involved was SHUR-OFF; charges included nonregistration
and misbranding.
Complaint was dismissed since the pesticide sample was obtained as
a result of an invalid inspection.
2047. In Re: Grant Laboratories, EPA Region IX, March 11,
1976. (I.F.&R. No. IX-102C, I.D. Nos. 111495, 111496,
111497,111131 and 111132.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
136j(a)(l)(E). The action pertained to products held for distribution or
sale on September 13 and November 1, 1974, at Grant Laboratories,
Oakland, California. The pesticides involved were GRANT'S
ROACH CONTROL, GRANT'S FLY KILL, and GRANT'S ANT
POWDER; charges included adulteration and misbranding—
strength or purity fell below the professed standard of quality as
expressed on its labeling.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $3,432.00.
2048. In Re: Phostoxin Sales, Inc., EPA Region IX, March 31,
1976. (I.F.&R. No. IX-107C, I.D. Nos. 114608 and 107211.)
This was a civil action charging the respondent with violating the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
135a(a)(l) and 135b. The action pertained to a shipment made on or
1429
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about March 25, 1975, from Alhambra, California, to St. Joseph,
Missouri. The pesticide involved was PHOSTOXIN NEW COATED
PELLETS; the charge was nonregistration.
The respondent signed a Consent Agreement. The Final Order
assessed a civil penalty of $1,680.00.
2049. In Re: Amvac Chemical Corporation, EPA Region IX,
September 2,1976. (I.F.&R. No. IX-98C.)
This civil penalty proceeding was settled by hearing. The
following is Administrative Law Judge William J. Sweeney's Initial
Decision, and Regional Judicial Officer David R. Andrews' Final
Decision and Order.
By complaint filed on June 30, 1975, the United States
Environmental Protection Agency, Region IX, alleged that the
respondent had violated Section 12(a)(l)(E) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended, in the manner
described in such complaint. The respondent requested a hearing. A
hearing on the complaint was held in Los Angeles, California on May
18, 1976. At the conclusion of the hearing the counsel for this
respondent, in lieu of filing a brief, argued for mitigation of the
proposed penalty. The complainant has filed a brief and respondent
has responded thereto in a reply brief.
The violations alleged in the complaint are that the pesticide
ALCO L-T STOCK SPRAY was: (1) Misbranded in that the label
showed that it contained 45 percent Toxaphene by weight whereas it
contained a lesser amount of Toxaphene, and contained also the
active ingredient technical chlordane which was not shown on the
label; (2) Adulteration in that technical chlordane had been
substituted in part for the ingredients shown on the label; (3)
Adulteration in that its strength or purity fell below the professed
standard or quality under which it was sold.
1430
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The ^pesticide tested by the agency was identified as Sample
No. 111602 and the label bore Lot. No. 31218. Such label also
stated in part:
ACTIVE INGREDIENTS % BY WT.
Toxaphene 45.0
Gamma I so me r of Benzene Hexachloride
from Undone 2.0
Petroleum Distillate 37.0
Aromatic Petroleum Derivative Solvents 10.0
INERT INGREDIENTS 6.0
100.0
Tests by the agency showed that Sample No. 111602 contained
18.1 to 19.8 percent by weight of chlordane, and that the stated
percentage of Toxaphene was deficient by 30 to 35 percent. A
duplicate of Sample No. 111602 was tested by the respondent and
found to contain 17.7 percent by weight of chlordane.
In proposing penalties herein the following provisions of the
GUIDELINES FOR THE ASSESSMENT OF CIVIL PENALTIES UNDER
SECTION 14(a) OF THE FEDERAL INSECTICIDE, FUNGICIDE, AND
RODENTICIDE ACT, are pertinent.
SECTION I: 8(2) What constitutes an independently assessable
charge. A separate civil penalty shall be assessed for each violation
of the Act which results from an independent act (or failure to act) of
the respondent and which is substantially distinguishable from any
other charge in the complaint for which a civil penalty is to be
assessed. In determining whether a given charge is independent of
and substantially distinguishable from any other charge for purposes
of assessing separate penalties, complainant must consider whether
each provision requires an element of proof not required by the other.
Thus, not every charge which may appear in the complaint shall be
separately assessed. Where a charge derives primarily from another
1431
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charge cited in the complaint for which a penalty is proposed to be
assessed, the subsequent charge may not warrant a separate
assessment. The complaint (sic) will propose to assess an appropriate
civil penalty for each independent and substantially distinguishable
charge.
SECTION I: C(l} Factors considered in determining the proposed civil
penalty, (a) Gravity of violation. One determinant of the amount of a
proposed civil penalty is the gravity of the violation. The gravity of
any violation is a function of (1) the potential that the act committed
has to injure man or the environment; (2) the severity of such potential
injury; (3) the scale and type of use anticipated; (4) the identity of the
persons exposed to a risk of injury; (5) the extent to which the
applicable provisions of the Act were in fact violated; (6) the
particular person's history of compliance and actual knowledge of the
Act; and (7) evidence of good faith in the instant circumstance.
SECTION I: C(2) Using the civil penalty assessment schedule to arrive
at the proposed civil penalty. Violations, ordered according to their
gravity, are listed along the vertical axis of the Civil Penalty
Assessment Schedule. The coded citation charges which correspond
to specific violations of the Act (as set forth in the Appendix to the
Case Proceedings Manual and published herein as Appendix II) are
also enumerated along the vertical axis. Each independently
assessible (sic) charge is translated into a dollar penalty assessment
by (1) locating the appropriate charge on the charge code of the
Assessment Schedule, and then (2) following that charge across the
row of business sizes until reaching the approximate business size
entry. Each celf in the Assessment Schedule corresponds to a given
size-of-business category.
Within each gravity/size-of-business cell, there is a dollar
amount representating the penalty base figure. In arriving at a civil
penalty proposed to be assessed for a given charge, complainant
may deviate as much as ten per cent (sic) (10%) above or below this
base figure. In determining whether to assess the proposed penalty
above or below the base figure, complainant shall consider those
criteria outlined in Section l(C)(1)(a) above. For example, if the
product involved is a highly toxic pesticide, or if the person charged
1432
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has actual knowledge of the Act, has a history of noncompliance (sic),
and has not evidenced good faith in his dealings with the Agency
arising out of the current alleged violation, the proposed civil penalty
should be assessed above the base figure.
The complainant proposes a civil penalty of $7,480 based on
the following increments:
for chemical deficiency $1980.00
for chemical contamination $5500.00
The indicated increments are derived from Section II of the guidelines;
they are the maximum penalties allowed for chemical deficiency,
adverse effects not probable, and chemical contamination,
significant level, respectively, by Category V firms, plus 10 percent
added penalty because respondent has a history of noncomptiance
with the Act. The respondent is designated a Category V firm
because its gross sales exceeded $1,000,000 in the prior fiscal year.
Under the provisions of footnote 2 to Section I(C)(2) the penalty
of 10 percent should not have been applied to the permissible
maximum penalty of $5,000 for chemical contamination at a
significant level caused by a Category V Firm; such footnote does not
bar application of a 10 percent increase in the otherwise maximum
penalty of $1,800 for chemical deficiency caused by a Category V
firm.
No penalty is proposed for the misbranding violation which
complainant deemed to be barred under the provisions of Section
I(B)(2). Such provisions are not regarded as having prohibited the
other two charges on the following grounds presented on brief. "For
the chlordone contamination charge, EPA is required to prove that
Sample No. 111602 contains chlordane not claimed on the label. This
is not proof that Sample No. 111602 contains less toxaphene than
claimed on the label. For the toxaphene deficiency charge, EPA is
required to prove that Sample No. 111602 contains less toxaphene
than claimed on the label. Therefore, each charge requires an element
1433
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of proof not required by the other and a separate civil penalty may
be assessed for each violation of the Act."
The foregoing reasoning is an evasion of the obvious intent of
the Acting Administrator in promulgating Section I(B)(2). That
subsection, quoted in full hereinbefore, provides for the assessment of
a separate civil penalty for each violation of the Act which results
from an "independent act" of the respondent. The facts herein show
only one independent act by the respondent, namely, the pouring of
chlordane into a container which does not list that substance on the
label; the amount of chlordane was 18.1 to 19.8 percent by weight as
tested by complainant, and 17.7 percent by weight as tested by
respondent. The latter independent act produced two effects: it
contaminated the products as labeled and it caused space to be
occupied in the container to the extent that there remained
insufficient room to accommodate the amount of toxaphene listed on
the label, thus resulting in a chemical deficiency. Since the two
violations flow from a single independent act by the respondent, only
the more serious violation, contamination, should be proposed for
penal assessment. As stated before the maximum penalty for that
violation is $5,000.
In addition to taking Sample No. 111602, the complainant also
took Sample No. 111241 from Lot No. 31218 on April 9, 1975. That
sample was found to contain 19.7 percent of chlordane by weight
and was 32 percent deficient in toxaphene. Sample No. 111240
taken from Lot No. 31208 on April 8, 1975 was tested by respondent
and found to contain no chlordane and the proper amount of
toxaphene.
The respondent referred to production work orders which
indicate that only one batch of the subject pesticide was mixed and
that Sample Nos. 111602 and 111241 should have been marked
with Lot No. 31208 rather than Lot No. 31218. It is the belief and
contention of the respondent that of the quart and gallon containers
filled from the one batch only Sample Nos. 111602 and 111241, and
perhaps two more bottles, contained chlordane. Such contention is
based on the fact that the bottling machine used in filing the bottles
has four nozzles and it is possible that the nozzles were not flushed
1434
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after having been used to bottle chlordane, thus ejecting chlordane
into the first bottles filled from the new batch. This theory of the
contaminating process is plausible, and offer the only explanation of
record for the freedom from contamination in Sample No. 111240.
Such theory also shows two acts of gross carelessness by respondent,
namely, assignment of an incorrect Lot number to at least two bottles,
and failure to exercise elementary product control by flushing the
bottling machine after using it for bottling chlordane, a toxic product.
The respondent admits that a violation occurred but contends
that assessment of any penalty in excess of $500 has the potential of
causing bankruptcy. Amvac Chemical Corporation is the wholly
owned subsidiary of American Vanguard Corporation. During 1975
the parent company had a net loss of $499,800 on gross sales of
$12,653,000 and respondent had a net loss of $480,000. In the same
year the respondent paid its president $50,000, and the president
increased his indebtedness to the respondent from $43,000 to
$52,700. The latter indebtedness is secured by three 8 percent
demand notes. At the close of 1975 American Vanguard Corporation
and its subsidiaries had inventories of finished products valued at
$1,711,000 and raw materials valued at $331,500. It does not
appear that assessment of a penalty in excess of $500 would cause
the respondent to be unable to continue in business.
It is argued by respondent that the penalty proposed should be
mitigated because none of the batch of pesticide was sold, and
because respondent has shown good faith in the instant circumstance
by installing quality controls consisting of an infrared system, two gas
chromatographs, colorimetry test equipment, and a wet laboratory.
These facts do not present good cause for mitigation. The fact that
none of the batch was sold does not change the fact that all of the
batch was being held for sale prior to the inspection. The installation
of quality controls by a company producing toxic materials was long
overdue, and in view of respondents history of compliance it has little
or no weight as a mitigating factor. That history includes assessment
of a civil penalty of $11,500 for nonregistration and misbranding, an
assessment of a criminal penalty of $500 for nonregistration, and the
issuance of two warning letters by complainant concerning
misbranding.
1435
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Findings and Conclusions
The respondent violated the Act as alleged in the complaint by
adulteration of a product held for sale in that technical chlordane was
substituted in part for the ingredients shown on the label. This
adulteration caused by addition of an unlabeled toxic substance is a
grave violation. Other facts of record do not warrant any mitigation
in the penalty proposed for such violation by a respondent with
knowledge of the Act and a history of other violations.
Based on the foregoing findings and'conclusions the following
order is entered.
Order
1. Pursuant to Section 14(a) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended [86 Stat. 973; 7 USC
1361 (a)], a civil penalty of $5,000 is hereby assessed against Amvac
Chemical Corporation.
2. Payment of the full amount of the civil penalty assessed
shall be made within sixty (60) days of the service of the final order
upon respondent by forwarding to the Regional Hearing Clerk,
Region IX, a cashier's check or certified check payable to the United
States of America in such amount.
Dated: September 2, 1976.
William J. Sweeney
Administrative Law Judge
In no cose may the proposed penalty for an independently
assessable charge exceed $5,000.
1436
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FINAL DECISION
This proceeding was initiated on June 30, 1975, by the issuance
of a Complaint and Notice of Opportunity for Hearing by the
Enforcement Division, United States Environmental Protection
Agency, Region IX (Complainant) against Amvac Chemical
Corporation (Respondent). The complaint alleged that the
Respondent had violated Section 12(a)(1)(E) of the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (FIFRA) (7
U.S.C. Sections 136-136y) by holding for sale the pesticide Alco L-T
Stock Spray which was: (1) Misbranded in that the label showed that
it contained 45 percent Toxaphene by weight when, in fact, it
contained a lesser amount of Toxaphene and contained the active
ingredient technical chlordane which was not shown on the label; (2)
Adulterated in that technical chlordane had been substituted in part
for the ingredients shown on the label; (3) Adulterated in that its
strength or purity fell below the professed standard or quality under
which it was sold.
The Complaint proposed to assess a civil penalty of $7,480.00
against the Respondent as follows: (1) Misbranding, no penalty
because the charge was deemed to be barred under the provisions of
Section I:B.(2) of the EPA Guidelines For The Assessment Of Civil
Penalties Under Section 14(a) Of The Federal Insecticide, Fungicide,
and Rodenticide Act, As Amended, 39 F.R. 27711 (Guidelines); (2)
Adulteration, Chlordane contamination, $5,000.00 plus a 10 percent
increase for a history of non-compliance, $500.00; (3) Adulteration,
Toxaphene deficiency, $1,800.00 plus o 10 percent increase for a
history of non-compliance, $180.00.
A hearing regarding the complaint was held before
Administrative Law Judge William J. Sweeney on May 18, 1976. The
Initial Decision of Administrative Law Judge Sweeney, dated
September 2, 1976 held that Respondent had violated FIFRA by
holding for sale Alco L-T Stock Spray which was adulterated in that
technical chlordane was substituted in part for the ingredients shown
on the label. The Initial Decision proposed a civil penalty of
$5,000.00 against the Respondent.
1437
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On September 24, 1976, Comploinont appealed the Initial
Decision of the Administrative Law Judge. In its appeal, the
Complainant took exception to the following language of the Initial
Decision:
The facts herein show only one independent act by the
respondent, namely, the pouring of chlordane into a container
which does not list that substance on the label . . . The later
independent act produced two effects: it contaminated the
product as labeled and it causes space to be occupied in the
container to the extent that there remained insufficient room to
accomodate the amount of toxaphene listed on the label, thus
resulting in a chemical deficiency. Since the two violations flow
from a single independent act by the respondent, only the more
serious violation, contamination, should be proposed for penal
assessment.
The Complainant narrowed its exception to the Initial Decision
when it stated:
The only issue raised by EPA's appeal is whether the
chlordane contamination and the toxaphene deficiency found in
the pesticide Alco-L-T Stock Spray (Sample No. 111602) are
"independently assessable charges'* of Section 12(a)(l)(E) of
the Act within the meaning of the Guidelines for the Assessment
of Civil Penalties (39 F.R. 27711).
In a letter to the Administrative Law Judge, dated September
29, 1976, Glenn A, Wintemute, President of Respondent Amvac
Chemical Corporation indicated that Respondent would not be
represented by legal counsel in the appeal. Additionally, the letter
pointed out the financial condition of Respondent and asked that the
$5,000.00 penalty be reduced.
On November 15, 1976, a Notice and Request For Briefing On
Additional Issues pursuant to 40 C.F.R. Section 168.51(c) was filed
and served on the parties. Complainant filed its response on
November 23, 1976. Respondent did not respond.
1438
-------
This decision is being issued pursuant to Section 14(a) of FIFRA
(7 U.S.C. Section 136(a)(2) and 40 C.F.R. Section 168.60 and is
based solely upon the record compiled in this proceeding. For the
reasons stated below, it is my determination that the exceptions
raised by the Complainant must be denied and the Initial Decision of
Administrative Law Judge Sweeney sustained.
Findings of Fact
1. Alco L-T Stock Spray (Sample No. Ill 602) claimed to
contain the following ingredients:
ACTIVE INGREDIENTS % BY WT.
Toxaphene 45.0
Gamma Isomer of Benzene Hexachloride
from Lindane
Petroleum Distillate
Aromatic Petroleum Derivative Solvents
Inert Ingredients
100.0
2. Alco L-T Stock Spray (Sample No. 111602) contained
18.1% to 19.8% chlordane.
3. Alco L-T Stock Spray (Sample No. 111602} was 30% to
35% deficient in toxaphene.
4. There was one physical act, the pouring of chlordane into
a container which did not list that substance on the label. This was the
independent act as that term is used in the Guidelines.
5. The independent act produced three effects: chlordane
contamination, toxaphene deficiency and misbranding of the
product.
1439
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6. Chlordane contamination is the primary charge.
7. Toxophene deficiency and misbranding are lesser
included charges and do not arise from an independent act.
Conclusion of Law
The chlordane contamination charge is the only independently
assessable charge within the meaning of the Guidelines For The
Assessment Of Civil Penalties Under Section 14(a) Of The Federal
Insecticide, Fungicide, and Rodenticide Act, As Amended.
Discussion
Complainant in its Appeal Brief states that:
The only issue raised by EPA's appeal is whether the
chlordane contamination and the toxaphene deficiency
found in the pesticide Alco L-T Stock Spray (Sample No.
111602) are "independently assessable" charges of
Section 12(a)(l)(E) of the Act within the meaning of the
Guidelines for the Assessment of Civil Penalties (39 F.R.
27711). (Complainant's Appeal Brief (Complainant's
Brief), p. 4).
In support of its position that the charges are "independently
assessable", Complainant asserts two arguments:
1) The Chlordane Contamination Resulted From An
Act Which is Independent From The Failure To Act Which
Caused The Toxaphene Deficiency.
2) The Chlordane Contamination Charge Requires An
Element Of Proof Not Required By The Toxaphene
Deficiency Charge.1
1440
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For the reasons discussed below, Complainant's arguments
cannot be accepted.
I
Complainant in making its first argument on "independent acts'1
appears to recognize that if the charges stem from the same
independent act, only one penalty may be assessed. The Guidelines
clearly provide for this result in Section I:B.(2) which states:
A separate civil penalty shall be assessed for each
violation of the Act which results from an independent act
(or failure to act) of the respondent . . .
Complainant argues from the Guidelines that the facts of this
case show that what appears to be one physical act is in fact two
legal "acts". The addition of chlordane, the first act, caused the
chlordane contamination; the failure to add toxaphene, the second
act, caused the toxaphene deficiency. It is alleged that both acts are
independent of each other, and, therefore, separate penalties may
be assessed.
The fallacy of this reasoning is that the alleged failure to act in
this case is not an independent act because the charge of toxaphene
deficiency constitutes a "lesser included charge" as defined in
Section IV:II.(3) of the Guidelines:
"Lesser included charges" are those charges which
appear in the complaint but which do not arise from
independent acts and/or which are not substantially
distinguishable from other previously cited charges. No
independent penalty shall be assessed for such a charge.
(Emphasis added).
Analysis of the Guidelines as well as the holdings and rationale
of Bhckburger v. United States, 284 U.S. 299 (1932) and Core v.
United States, 357 U.S. 386 (1958) both of which are cited by
Complainant as supportive of its position would have shown that in
1441
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this case there were not two independent acts. In Gore separate
federal statutes punished the sale of narcotics outside the original
stamped package,3 the sale of narcotics not pursuant to the
appropriate Treasury order forms,3 and the sale of narcotics known
by the seller to have been illegally imported.4 The Supreme Court held
that a court could sentence a seller to three consecutive terms of
imprisonment for violating all three statutes simultaneously in a single
sale. The opinion by Mr. Justice Frankfurter reasoned that since each
of the three offenses required proof of a fact not required by either of
the other two, none of the three could be said to be "necessarily
included" \r\ either of the other rwo.s It was possible, in other words,
to commit any one offense without committing either of the other two.
In the instant case it is clear that the facts will not withstand the
test of Gore. The facts indicate one physical act, that of pouring
chlordane into a container thereby causing chlordane contamination
and toxaphene deficiency. Under the facts of this case, it would be
impossible to commit the offense of toxaphene deficiency without
committing the offense of chlordane contamination as the former
offense is necessarily included in the latter,6 therefore both offenses
flow from one independent act. The Guidelines in Section IV:II.(3}
clearly provided that "lesser included charges" shall not be the
subject of an independent penalty because they are charges that do
not arise from independent acts.
The second argument which Complainant asserts in its Appeal
Brief concerns what it perceives as another test for determining
whether separate penalties may be assessed. Complainant states:
In determining whether a separate civil penalty will be
assessed for each violation of the Act, the following test
is applied: Whether each charge required an element of
proof not required by the other. (Complainant's Brief, p.
4)
1442
-------
Complainant cites the Guidelines as authority for this statement.
In actuality the Guidelines state:
In determining whether a given charge is independent of
and substantially distinguishable from any other charge
for purposes of assessing separate penalties,
complainant must consider whether each provision
requires an element of proof not required by the other.
Section I:B.(2) (Emphasis added).7
This test, therefore, is not a test for determining whether
separate civil penalties will be assessed, but rather, it is an
affirmative burden which is placed on Complainant as one of the
elements it must consider in determining whether a given charge is
independent of and substantially distinguishable from any other
charge."8
The actual test which must be applied to determine whether
separate civil penalties shall be assessed is a two pronged test: (1)
Each violation must result from an independent act (or failure to act)
of the respondent; and (2) Each violation must be substantially
distinguishable from any other charge.9 Complainant's showing that
each charge required an element of proof not required by the other
does not negate the fact that both charges resulted from one
independent act, that is, the addition of chlordone. Since
Complainant has failed to show that the charges resulted from
independent acts, merely showing that toxaphene deficiency and
chlordane contamination are substantially distinguishable is
insufficient to meet this test.
For all of the reasons stated above, it is my conclusion that rhe
findings of the Initial Decision must be sustained and that the
exceptions raised by the Complainant must be denied. After
reviewing the complete record, and taking into consideration the size
of Respondent's business, the effect on Respondent's ability to
continue in business, and the gravity of the violation, it is my further
1443
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determination that the civil penalty of $5,000.00 proposed by the
Initial Decision is appropriate. Therefore, I hereby adopt and
incorporate the findings made by Administrative Law Judge Sweeney
regarding the appropriateness of the proposed penalty.
Final Order
Persuant to Section 14(a)(2) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended (7 U.S.C. 136 l(a)(2)), a
civil penalty of $5,000.00 is assessed against Respondent, Amvac
Chemical Corporation, for the violation which has been established
on the basis of the Complaint filed on June 30, 1975.
Dated December 21,1976.
David R. Andrews
Regional Judicial Officer
The two arguments are set forth here in reverse order to that
contained in Complainant's Brief. Additionally, Complainant
cites as authority for its position, three additional points (See
Complainant's Brief, Paragraphs C-E, pp. 6-9), however, rather
than being additional positions they are merely extensions of
the points raised in the two arguments set forth above. The
support for these positions is as stated, drawn from the
Guidelines as well as a line of criminal cases which deal with
common law traditions and constitutional prohibition against
double jeopardy. Several Administrative decisions, In The
Matter of Pearson & Company and In The Matter of Chapman
Chemical Companyf in interpreting EPA's Guidelines, have used
the criminal law test that has developed as a protection against
double jeopardy. In large part Section I:B.(2) of the Guidelines
appears to be based on the "same evidence" test (See infra a\
1444
-------
note 7 and accompanying test). Likewise Section IV:II.(3) of the
Guidelines which defines "Lesser included charges" is based on
the rule of criminal law which prohibited convictions for
"necessarily included offenses" and is likewise a protection
against double jeopardy (See infraa\ note 5 and accompanying
text).
26 U.S.C. Section 4704 (1964).
Id. Section 4705.
21. U.S.C. Section 174 (1964). The citations are to the sections
as amended and codified presently. Gore was actually
convicted under earlier versions of these statutes.
The text describes the reasoning of Bhckburger v. United
States, 284 U.S. 299, 304 (1932), which was incorporated by
reference in the Core opinion. See Footnote 6 for a brief
example of the "necessarily included" rule.
Traditional criminal doctrine provided two very limited
protections against the multiplication of penalties, based upon
common law traditions and constitutional prohibitions against
double jeopardy. (U.S. Const. Amend. V). One rule is the
necessarily included offenses rule, which provides for example,
that a single homicide could not be punished both as
manslaughter and as murder, or a single physical attack as both
aggravated assault and simple assault.
The misbranding charge was dropped as being barred under the
provisions of Section I:B.(2), Initial Decision at p. 5. The logic
that Complainant used in making this decision would seem to
have also dictated that they not charge the included offense of
toxaphene deficiency.
The Guideline test is almost identical to the so-called "same
evidence test". The same evidence test is a useful tool of
criminal law used to determine whether a particular case falls
within the intended reach of the double jeopardy ban.
1445
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Aside from the point that Complainant has fundamentally
misconceived the purpose of the test provided in the Guidelines,
the Complainant has taken the same evidence test and applied
it without any serious effort to justify the result in terms of a
reasonable penalty assessment policy. In Sanches v. United
States, 341 F. 2d 225, 227 (9th Cir. 1965), the court in speaking
to this test stated:
The "same evidence" test is one of several (1 Wharton,
Criminal Law and Procedure Section 144-5 (1957)) which
may be useful in determining whether a particular case
falls within the intended reach of the double jeopardy
ban. It is no more than that. It has no coercive authority
of its own. It cannot control [sic] decision where the result
would be either to permit repeated trials for the same
criminal conduct contrary to the purpose of the
constitutional provision itself. (Emphasis added).
The same evidence test, therefore, is not a rigid technical rule
which is automatically applied without some awareness of its
purpose.
Section I:B.(2).
2050. In Re: Sim-Chem Minerals and Chemicals Division of
Simplot Soilbuilders, J. R. Simplot Company, EPA Region
X, September 13,1976. (I.F.&R. No. X-32C.)
This civil penalty proceeding was settled by hearing. The
following is Administrative Law Judge William J. Sweeney's Initial
Decision.
By complaint filed on December 31, 1975, the United States
Environmental Protection Agency, Region X, alleged that the
respondent had violated Section 3 and 12 of the Federal Insecticide,
Fungicide, and Rodenticide Act as specified in such complaint. The
respondent requested a hearing. A prehearing conference was held in
Boise, Idaho on March 16, 1976, and an adjudkatory hearing was
1446
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held in the same city on May 5, 1976. The parties have filed briefs
and a reply brief was filed by complainant.
The violations specified in the complaint are that on or about
September 14, 1974, the respondent held for sale a pesticide,
Parathion 4E, which was: 1) misbranded in that the labeling showed
the product to contain as active ingredients 47.3 percent of Parathion
whereas it contained a lesser amount; 2) adulterated in that another
substance, Methyl Parathion, had been substituted in whole or in part
for the article; 3) misbranded in that the label showed EPA Reg. No.
476-603-15154, whereas such registration number was not issued to
the respondent. No penalties were proposed for the cited
misbrandings and a penalty of $5,000 was proposed for the
adulteration violation. On brief the complainant noted that
respondent had not violated the Act prior to the violations charged in
the complaint, had cooperated in the discovery and correction of the
alleged violations, and had otherwise exhibited good faith efforts to
comply with the Act. Therefore, it was recommended by the
complainant that the proposed penalty be reduced by 60 percent,
namely, to $2,000.
The evidence shows, and the respondent admits, that at least
one 5-gallon can of a pesticide it had manufactured as Methyl
Parathion had been inadevertently labeled Ethyl Prathion. Counsel
for complainant explained that the proposed penalty was published
in Section II of the GUIDELINES FOR THE ASSESSMENT OF CIVIL
PENALTIES UNDER SECTION 14(A) OF THE FEDERAL INSECTICIDE,
FUNGICIDE, AND RODENTICIDE ACT, AS AMENDED. In that
Section, a table entitle ANALYTICAL TEST RESULTS:
FORMULATION VIOLATIONS has four categories. Number 3 is
entitled CHEMICAL CONTAMINATION and it was such category
that was applied to the aforesaid adulteration, namely presence of
Methyl Parathion instead of the labeled Ethyl Parathion. The
respondent is a so-called Category V firm because its gross annual
sales are in excess of a million dollars. The penalty provided for a firm
of that size charged with a significant level of chemical
contamination is as proposed in the complaint.
1447
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The respondent argues on brief that in order for it to be found
guilty of an adulteration violation the evidence must show an intent to
adulterate. Such argument is without merit and the intent or lack of
intent of a violator is not an issue in proving that a punishable
violation occurred.
Although intent is not an issue, the proposal to penalize
respondent for adulteration rather than misbranding is subject to
question on other grounds. It is possible to have misbranding without
concomitant adulteration, but every adulteration violation necessarily
is accompanied by misbranding. Normally, the adulteration, whether
consisting of chemical or weight deficiency, chemical contamination,
or overformulation, is the cause for the product to be other than as
described on the label, and hence the misbranding violation. In such
cases the violation to be charged is properly the root offense,
adulteration. Such is not true of the facts under consideration herein.
The pesticide Methyl Parathion was knowingly and intentionally
prepared by the respondent. It was not deficient, contaminated nor
overformulated. Then, through error, the label for a different
persticide was attached to the container. Presto, an unadulterated
product becomes adulterated. In the circumstances, the cause of the
resultant state of adulteration, namely the misbranding, is the proper
violation to be penalized.
The labeling violation herein consists of a defective ingredient
statement concerning the formulation of the subject pesticide. The
facts of record do not prove what adverse effects, if any, would be
caused by using Methyl Parathion in the belief that it was Ethyl
Parathion. The guidelines provide a penalty of $2,800 for the
labeling violation by respondent, when the adverse effects are
unknown. Accepting the complainant's recommendation of a 60
percent reduction in the guideline penalty produces a penalty of
$1,120. The careless handling of a label as shown herein is
inexuseoble and the assessment of the latter penalty is fully
warranted.
7448
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Order
1. Pursuant to Section 14(a) of the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended, [86 Stat. 973; 7 USC
1361 (a)], a civil penalty of $1,120 is hereby assessed against Sim-
Chem Minerals and Chemicals Division of Simplot Soilbuilders, J. R.
Simplot Company.
2. Payment of the full amount of the civil penalty assessed
shall be made within sixty (60) days of the service of the final order
upon respondent by forwarding to the Regional Hearing Clerk,
Region X, a cashier's check or certified check payable to the United
States of America in such amount.
Dated: September 13, 1976.
William J. Sweeney
Administrative Law Judge
1449
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Index to Notices of Judgement 2001-2050
NJ. No.
A-1 Pest Control Service (Civil) 2002
A-l Pest Control Service (Civil) 2003
Agricultural Chemicals Division of
International Multifoods Corporation
(Civil) 2020
Akin/Alisonia International Corporation
(Civil) 2035
Alcatraz Co., Inc., The (Civil) 2008
American Fluoride (Civil) 2007
Amvac Chemical Corporation (Civil Hearing) 2049
Applied Biochemists, Inc. (Civil Hearing) 2037
Black Leaf Products Company (Civil) 2016
Brite House Company, The (Civil) 2023
Broadway Supply Company, The (Civil) 2032
Chevron Chemical Company (Civil) 2012
Chevron Chemical Company (Civil) 2042
Cloroben Chemical Corporation (Civil
Hearing) 2006
Cook & Dunn Paint (Civil) 2004
Deisch-Benham, Inc. (Civil) 2026
Dixie Agricultural Chemical Co. (Civil) 2013
Dover Chemical Corporation (Civil) 2029
Euclid Chemical Company, The (Civil) 2024
Famco, Inc. (Civil) 2027
Fuller-O'Brien Corporation (Civil) 2046
GAF Corp. (Civil) 2005
Grace-Lee Products, Inc. (Civil) 2021
Grant Laboratories (Civil) 2047
Hopkins Agricultural Chemical
Company (Civil) 2040
Indiana Naval Stores Company, Inc.
(Civil) 2018
Industrial Chemical Laboratories, Inc.
(Civil Hearing) 2038
John L. Beaulieu, d/b/a Beaulteu Chemical
Company (Civil Hearing) 2043
Kirsto Company (Civil) 2036
1450
-------
Loco Corp. (Civil) 2009
Lincoln Industrial Chem. Co., Inc. (Civil) 2010
Midline Exterminating Co. (Civil) 2031
O.E. Linck Company (Civil) 2045
Parawax Company, The (Civil Hearing) 2039
Phostoxin Sales, Inc. (Civil) 2048
R. H. Shumway Seedsman (Civil) 2034
Robert Hill, d/b/a F&H Chemicals (Civil) 2044
Rush-Hampton Industries (Civil) 2011
Sentinel Pest Control Laboratory (Civil) 2030
Sim-Chem Minerals and Chemicals Division
of Simplot Soilbuilders, J. R. Simplot
Company (Civil Hearing) 2050
Stearns Chemicals Corporation (Civil) 2028
Sunnyside Products, Inc. (Civil) 2022
United Textile Chemical, Inc. (Civil) 2017
Velsicol Chemical Corporation (Civil) 2033
Vet-Aid Industries, Inc. (Civil) 2015
Waltham Chemical Company (Civil Hearing) 2001
Western Tar Products Corporation (Civil) 2025
White Laboratories, Inc. (Civil) 2014
X-L Laboratories (Civil) 2041
Zimmite Corporation (Civil) 2019
*US GOVERNMENT PRINTING OFFICE 1977 720-115/9743 1-3 ] 45 ]
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