Argued and Submitted January 16, 2013 —San Francisco, California
On Petition for Review of an Order of the Environmental Protection Agency
Catherine Marlantes Rahm (argued) and Nancy S. Marks, Natural Resources Defense Council, New York, New York; Mae C Wu, Natural Resources Defense Council, Washington, D.C., for Petitioner.
Matthew B. Henjum (argued), United States Department of Justice, Environment and Natural Resources Division, Environmental Defense Section, Washington, D.C.; Ignacia S. Moreno, Assistant Attorney General, Environment and Natural Resources Division, Washington, D.C.; Amber Aranda, Of Counsel, United States Environmental Protection Agency, Office of General Counsel, Washington, D.C., for Respondent.
Benjamin G. Shatz (argued) and Benjamin M. Kleinman, Manatt, Phelps & Phillips, LLP, Los Angeles, California; James G. Votaw, Manatt, Phelps & Phillips, LLP, Washington, D.C., for Intervenor.
Before: Jerome Farris and Jay S. Bybee, Circuit Judges, and Lynn S. Adelman, District Judge. [*]
Federal Insecticide, Fungicide, and Rodenticide Act
The panel granted in part and denied in part a petition for review of a decision of the Environmental Protection Agency granting an application for conditional registration of two pesticides, AGS-20 and AGS-20 U, that applicant HeiQ Materials sought to apply to manufactured textiles such as clothing, blankets, and carpet.
The Federal Insecticide, Fungicide, and Rodenticide Act prohibits the sale of any pesticide that has not been "registered" with the Environmental Protection Agency. AGS-20 and AGS-29U (collectively, "AGS-20) uses nanosilver to suppress the growth of microbes that cause odors, stains, discoloration, and degradation. The EPA conducted a risk assessment of AGS-20 that was published in its decision granting HeiQ's application for conditional registration.
The panel first held that petitioner Natural Resources Defense Council, Inc. had Article III standing to challenge the EPA's conditional registration of AGS-20. Second, the panel held that substantial evidence supported the EPA's decision to use the characteristics of toddlers rather than infants in determining whether AGS-20 placed consumers at risk. Third, the panel vacated the EPA's decision insofar as it concluded that there was no risk concern requiring mitigation for short- and intermediate-term aggregate oral and dermal exposure to textiles that are surface-coated with AGS-20. Fourth, the panel held that substantial evidence supported the EPA's decision not to consider additional sources of exposure to nanosilver other than AGS-20 in concluding that the product would not have adverse effects on consumers.
District Judge Adelman concurred in the judgment insofar as it granted the petition in part and remanded to the EPA, and dissented from the judgment insofar as it denies the petition in part. Judge Adelman would grant the petition for review in full.
BYBEE, Circuit Judge
The Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA") prohibits the sale of any pesticide that has not been "registered" with the Environmental Protection Agency ("EPA"). 7 U.S.C. § 136a(a). Through the registration requirement, EPA ensures that no pesticides that will cause "unreasonable adverse effects" on human health or the environment are sold in the United States. See id. This case involves EPA's conditional registration of two pesticides, AGS-20 and AGS-20 U (collectively "AGS-20"), that applicant-intervenor HeiQ Materials AG seeks to apply to manufactured textiles such as clothing, blankets, and carpet. AGS-20 uses nanosilver—that is, extremely small particles of silver—to suppress the growth of microbes that cause odors, stains, discoloration, and degradation. After receiving comments from the public, EPA conducted a risk assessment of AGS-20 that it published in its decision document, where it granted HeiQ's application for conditional registration. Natural Resources Defense Council, Inc. ("NRDC") petitions us to vacate EPA's decision to conditionally register AGS-20. We have jurisdiction under 7 U.S.C. § 136n(b).
This case presents four issues. First, we must determine whether NRDC has Article III standing. We hold that it does. Second, NRDC contends that EPA erred in deciding not to use the body weight and other characteristics of infants in determining whether AGS-20 places consumers at risk. In its risk assessment, EPA used the characteristics of a three-year-old toddler rather than an infant because it concluded that toddlers are the subpopulation that is most vulnerable to exposure to AGS-20. We deny NRDC's petition with respect to this claim because EPA's decision is supported by substantial evidence. Third, EPA's risk assessment sets out a rule whereby there is a risk concern requiring mitigation if the "margin of exposure" to AGS-20 in the short- or intermediate-term is less than or equal to 1, 000. EPA analyzed the possible level of exposure to AGS-20 under a number of different circumstances. One of the scenarios involves a consumer who experiences both dermal and oral contact with AGS-20 applied to a textile as a surface coating. In this single scenario, EPA calculated a "margin of exposure" of 1, 000. Based on EPA's own rule, this finding presents a risk concern. We vacate EPA's decision insofar as it concludes that there is no risk concern requiring mitigation for short- and intermediate-term aggregate oral and dermal exposure to textiles that are surface coated with AGS-20. Fourth, NRDC faults EPA for deciding not to consider additional sources of exposure to nanosilver other than AGS-20 in concluding that the product will not have unreasonable adverse effects on consumers. We deny NRDC's petition on this point because EPA's decision is supported by substantial evidence.
FIFRA permits EPA to conditionally register a pesticide like AGS-20 that contains a new active ingredient until the agency receives sufficient data from an applicant such as HeiQ to decide whether to issue an unconditional registration. See 7 U.S.C. § 136a(c)(7)(C). Under FIFRA's conditional registration provision:
The Administrator may conditionally register a pesticide containing an active ingredient not contained in any currently registered pesticide for a period reasonably sufficient for the generation and submission of required data (which are lacking because a period reasonably sufficient for generation of the data has not elapsed since the Administrator first imposed the data requirement) on the condition that by the end of such period the Administrator receives such data and the data do not meet or exceed risk criteria enumerated in regulations issued under this subchapter, and on such other conditions as the Administrator may prescribe. A conditional registration under this subparagraph shall be granted only if the Administrator determines that use of the pesticide during such period will not cause any unreasonable adverse effect on the environment, and that use of the pesticide is in the public interest.
Id. In this case, NRDC contends that EPA erred in determining that "use of the pesticide . . . will not cause any unreasonable adverse effect on the environment" while HeiQ collects the data requested by EPA. Id. Notably, the phrase "unreasonable adverse effects on the environment" includes "any unreasonable risk to man or the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide." 7 U.S.C. § 136(bb) (emphasis added).
Pursuant to this statutory framework, EPA conditionally registered AGS-20. The product is an antimicrobial powder that includes nanosilver particles measuring between one and ten nanometers in diameter. The particles slowly release silver ions that suppress the growth of bacteria that cause odors, stains, and similar damage to textiles such as clothing. AGS-20 can either be incorporated into textile fibers prior to the textile manufacturing process or applied as a surface coating to finished textiles.
Before conditionally registering AGS-20, EPA assessed the risks that the product might pose to workers who apply it to textiles, consumers who use goods treated with AGS-20, and the environment. NRDC's challenges focus on the effects on consumers. EPA's assessment assumes that the consumer is a three-year old because it deemed toddlers to be the subpopulation that is most vulnerable to the possible harmful effects of the product. Among other things, EPA examined a hypothetical toddler's potential (1) dermal, (2) oral, and (3) aggregate dermal and oral exposure to AGS-20. The measure of aggregate exposure analyzed the possible effects of AGS-20 on a three-year old who was both wearing and mouthing (i.e., chewing or sucking on) clothing or another item treated with AGS-20. The resolution of this case turns on the assumptions used and the calculations performed by EPA in determining that the aggregate exposure measure does not indicate that AGS-20 poses an unreasonable risk to consumers.
EPA's conditional registration of AGS-20 "shall be sustained if it is supported by substantial evidence when considered on the record as a whole." 7 U.S.C. § 136n(b). "Substantial evidence means more than a mere scintilla but less than a preponderance; it is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Vasquez v. Astrue, 572 F.3d 586, 591 (9th Cir. 2008) (quoting Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995)) (internal quotation marks omitted). "Under the substantial evidence standard, we must affirm the Administrator's finding 'where there is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion" even if it is possible to draw two inconsistent conclusions from the evidence.'" Nw. Food Processors Ass'n v. Reilly, 886 F.2d 1075, 1079–80 (9th Cir. 1989) (quoting St. Elizabeth Cmty. Hosp. v. Heckler, 745 F.2d 587, 592 (9th Cir. 1984)). When, as in this case, the agency "is making predictions, within its area of special expertise, at the frontiers of science . . . a reviewing court must generally be at its most deferential." Baltimore Gas & Elec. Co. v. NRDC, 462 U.S. 87, 103 (1983).
Although we must give due deference to EPA's findings, "It is well-established that an agency's action must be upheld, if at all, on the basis articulated by the agency itself." Motor Vehicle Mfrs. Ass'n of the U.S., Inc. v. State Farm Mut. Auto.Ins. Co., 463 U.S. 29, 50 (1983) (citations omitted); see also Safe Air for Everyone v. EPA, 488 F.3d 1088, 1091 (9th Cir. 2007) ("[O]ur review of an administrative agency's decision ...