The next several months will tell us a good deal about how important the ongoing attention to the relationship between the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Endangered Species Act (ESA) will be to generic pesticide suppliers and distributors.

The ESA is a cross-cutting statute that supplements such program-specific statutes as FIFRA. It requires that every federal agency consider the effects of its actions on threatened and endangered species. Registration and re-registration of pesticides are considered “actions,” as may be a variety of other EPA activities.

Where an agency like EPA concludes that its “action” action may have an affect on such a species, it must “consult” the Department of Interior’s U.S. Fish and Wildlife Service (FWS) or the Department of Commerce’s National Marine Fisheries Service (NMFS), depending on the species at issue. Where the potential affect is negative, “formal” consultation may be required. The result of such a consultation is the Service’s issuance of a “biological opinion.” That “BiOp” states the Services’ view as to whether the proposed action will “jeopardize” the species and, if so, what the agency can do to avoid that jeopardy.

Since the early days of the Bush II administration, activists have brought suits against EPA seeking to compel ESA consultations regarding the registration of various pesticides. Winning has been easy—for years, EPA had not been doing a very good job in following the ESA’s mandates, for a variety of reasons—and the Agency is now under a number of court orders to hold consultations. It also has agreed to incorporate consultations into pesticide registration review as that process moves forward.

However, the consultations have been slow in coming. Most of this delay is attributable to the Services, which are terribly understaffed and initially ignored the court-ordered requests for consultation they received from the EPA. They finally began meaningfully to process them only in early 2008.

The first of this rash of consultations related to the impact of the OPs chlorpyrifos, diazinon and malathion on Northwest salmon and related species. EPA asked NMFS to begin the consultation in 2002. NMFS began its work in early 2008, and its final BiOp issued November 18, 2008.

The OP BiOp recommended that the EPA impose a number of restrictions on use of the three covered products and establish a massive new surface water monitoring program. Among the recommended label changes was establishment of a 500-foot application buffer around potential salmon breeding water for ground applications and a 1,000-foot buffer for aerial applications. NMFS also defined such waters to include drainage ditches and ephemeral streams. An analysis prepared for CropLife America indicates that the 500-foot buffer would block use of the products in about 25% of the arable land in the region, and the 1,000-foot buffer about 47%.

NMFS deferred the effectiveness of these recommendations for one year—until November 2009. The EPA’s response has been delayed by the leadership vacuum at the EPA that resulted from last year’s Presidential election, but some kind of public indication of what the EPA will be doing is expected any day.

The EPA is obliged by law to seriously consider NMFS’ recommendations, but is not compelled to adopt them. If the Agency does not do so, however, it must be prepared to defend its alternative actions and, if challenged, ultimately prove that its decision was appropriate. The fact that the ESA places individual Agency employees at potential risk for suit for “taking” endangered species—essentially, injuring or putting the species at risk—if the NMFS recommendations are not enacted, ups the ante substantially. (Farmers and growers who use the three products in the Northwest will also face risk of such suits, as may the product suppliers, distributors and manufacturers.)

The EPA does not face an all-or-none choice. It has some flexibility in implementing even NMFS’ most restrictive recommendations: the Agency could require that the new use limitations be put on labels, or simply require labels to cross-reference county bulletins of some sort, which in turn would identify the specific limitations. EPA staff seems inclined to move in this direction, if the EPA requires any changes at all, and it certainly would be the least disruptive approach.

Whatever the EPA does, there is likely to be more litigation. The registrants of the three products covered in the first consultation—MANA, Drexel and Dow AgroSciences—have told EPA that they will not voluntarily revise their labels to include the extreme NMFS recommendations. So, if the EPA seeks to impose them, suspension and cancellation hearings, or some other Agency enforcement approach, is likely.

In the meantime, the companies have challenged the NMFS recommendations in court. But the trial court with which the case originally was filed held in July that the matter should be heard in the Court of Appeals, and the companies therefore are now both appealing that order and pursuing a direct challenge in the appellate court. No decision is expected before the November deadline for EPA action, however.

So what are the potential impacts of all this on distributors and generic suppliers? Legal details aside, they fall into five categories:

1. There may be increased confusion in the marketplace and negative publicity about agricultural chemicals’ purported impact on endangered species. The EPA currently is under, or about to be put under, court order to conduct consultations with regard to over 1,848 pesticide-species/evolutionarily significant unit combinations. The results will be coming out on a much more routine basis beginning next Spring. There probably will be lots of publicity, and more litigation, arising from them.

And, of course, ESA evaluation and potential consultation is intended to be built into the registration review currently underway for all products.

2. Some product uses are almost certain to be limited. Here, the EPA response to the pending NMFS BiOp will be very instructive. There are serious flaws with NMFS’ analysis, but the EPA may not be prepared to take on that fellow agency. How the EPA chooses to act will send an important signal for future consultations. Older products—which of course are of greatest interest to generic suppliers—are at greatest risk.

3. If the EPA fails to adopt all of NMFS’ recommendations, more litigation is possible, and some of it may be directed against distributors or manufacturers. The activists would have two choices: to sue the EPA for allegedly inadequately responding to NMFS, or to sue some user of one of the products at issue for “taking” the species. But if the activists choose the second course, they might also seek to include among the “takers” the user’s suppliers. There is very little precedent to facially limit their creativity.

4. There is a real opportunity for commercial mischief as consultations proceed. Registrant access to Service decision-making has been very limited. As with FQPA implementation—remember the “risk cup”?—it is conceivable that marketers of one product could seek to discourage the continued use of others. That is, manufacturers of some products may point fingers at the comparative danger to endangered species of others. (Does metolachlor/S-metolachlor ring any bells?) Another set of challenges could arise as basics who have been defending products increasingly give up their efforts, either because defense costs have become too high and success too unlikely, or because they offer newer, patent-protected substitutes. This will leave generics to fight the battle in this very complex area.

5. Registration is going to get even more complicated, as different requirements are effective in different states and the pressure to cross-reference to state “endangered species bulletins” increases. There are about 1,100 active ingredients currently registered by the EPA, and about 1,200 listed endangered species. The ai/species/location combinations that must be evaluated over the coming years thus is mind boggling. Unless the law is changed by Congress, however, it eventually will occur. This will mean a new set of geographically-based use limitations, each of which must be implemented through a largely yet-to-be-developed bulletin or electronic label program.

In short, there is a lot more complexity to come in connection with the ESA.

At the time this article was written, EPA had not yet issued its response to the NMFS November 18, 2008 BiOp. However, on September 11, 2009, EPA announced its plans to implement measures calling for additional limitations on the use of chlorpyrifos, diazinon, and malathion to protect endangered and threatened Pacific salmon and steelhead in California, Idaho, Oregon, and Washington. Detailed information on EPA’s plans to implement the recommendations contained in the BiOp may be accessed here.

This article appeared in the CPDA Quarterly Report.