When I last posted about nanomaterials—in connection with the Environmental Protection Agency’s March 19, 2015 response to a petition for rulemaking on nanosilver—I predicted that more “nano-disputes” would soon make their way into court. Sure enough, the Ninth Circuit recently revoked the EPA’s conditional registration of the second registered nanosilver-based materials preservative on the market, NSPW-LS0SS (“NSPW”). National Resources Defense Council v. U.S. Environmental Protection Agency, No. 15-72308 (9th Cir. May 30, 2017).

In its 2015 response discussed in my prior post, the EPA agreed to treat as pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) products containing nanoscale silver if intended for “pesticidal purposes.” FIFRA governs the sale, use, and distribution of pesticides and generally requires that they be registered with the EPA before being sold or distributed. To register a pesticide, an applicant must submit to the EPA sufficient data “concerning the product’s health, safety, and environmental effects.” Opinion at 4 (quoting Pollinator Stewardship Council v. EPA, 806 F.3d 520, 523 (9th Circ. 2015)). In cases where data regarding a pesticde’s long-term use is not available because not enough time has elapsed since the EPA imposed the data requirement, the EPA may grant a temporary, conditional registration based on short-term use data if it first determines that “use of the pesticide is in the public interest.” Id. at 5.

In 2009, Nanosilva LLC applied for conditional registration of NSPW, an antimicrobial materials preservative that is incorporated into plastic and textile products. NSPW’s active ingredient is nanosilver. Petitioners—the Natural Resources Defense Council, the Center for Food Safety, and the International Center for Technology Assessment—opposed the conditional registration during the open comment period and argued that the EPA failed to support its findings that (1) use of NPSW is in the public interest, and (2) Nanosilva LLC had insufficient time to submit the required data. In May 2015, the EPA granted Nanosilva LLC’s request for a conditional, four-year registration. Petitioners filed a timely petition for review.

The Ninth Circuit panel reviewed the agency’s action to determine whether the conditional registration was supported by “substantial evidence,” and agreed with Petitioners that the EPA failed to support its finding that NSPW is in the public interest. Based on that conclusion, the court did not reach Petitioners’ second argument.

As summarized in the opinion, the EPA relied on three premises to make its public interest finding: (1) NSPW has a lower application rate (i.e., it uses less silver) when compared to conventional-silver pesticides; (2) NSPW has a lower mobility rate (i.e., it is less likely to release silver into the environment in detectable quantities) when compared to conventional-silver pesticides; and (3) current users of conventional-silver pesticides would switch to NSPW and/or that NSPW would not be incorporated into new products. The EPA therefore reasoned that using NSPW had the potential to reduce “environmental loading” and risk caused by silver release. While Petitioners agreed that reducing silver in the environment would be in the public’s best interest, they argued that the EPA’s conclusion that NSPW would achieve that result lacked support.

The court found that the EPA’s first two premises were supported by substantial evidence, but agreed with Petitioners that the third premise impermissibly relied on unsubstantiated assumptions. Id. at 15. Specifically, the third premise assumed that the current users of conventional-silver pesticides would replace those pesticides with NSPW, and that the NSPW would not be incorporated into new products to the extent that such incorporation would increase the amount of silver released into the environment. The court found this dual assumption to be problematic on its face: “On the one hand, the EPA assumes that current users of conventional-silver pesticides will switch to NSPW. On the other hand, however, it assumes that the benefits of NSPW will not also invite manufacturers to incorporate NSPW into new products.” Id. at 19. The EPA’s argument that it used “worst case scenarios” to assess how much nanosilver from NSPW would leach from products and end up in the environment did not, in the court’s view, cure the remaining assumptions that a new product would have used a conventional-silver pesticide if NSPW was not available or that there would be an offsetting switch from conventional-silver pesticides to NSPW in other products. The court allowed for the possibility that the EPA “could have proved these assumptions,” but “could have” was not enough to carry the day without any supporting evidence in the record. Id. at 20.

As the first case to consider the public-interest requirement under 7 U.S.C. § 136a(c)(7)(C), the Ninth Circuit’s revocation of NSPW’s registration represents noteworthy judicial action given the deference typically afforded by the reviewing court to an agency operating within its special area of expertise. As the opinion noted, nanomaterials such as nanosilver can have significantly different properties from their macroscale counterparts, providing industry with new benefits and opportunities while simultaneously introducing new risks and potential hazards. Players like the National Resources Defense Council and Center for Food Safety, which have been petitioning for more expansive regulation in the “nanosphere” for years, show no signs of slowing down. Simultaneously, research efforts centered on nanomaterials continue vigorously both inside and outside of the government (see, e.g., https://www.epa.gov/chemical-research/research-nanomaterials; http://nano.materials.drexel.edu/). This case provides industry with a glimpse into the way product data provided for regulatory purposes may ultimately be scrutinized, at least for certain nanomaterial applications. We will continue to follow developments in this area.