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Bonide Products, Inc. - Ruling 3, March 14, 2001

Ruling 3, March 14, 2001

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of

the Alleged Violations of Articles 33 and 71 of
the New York State Environmental Conservation Law (ECL),
and Parts 325 and 326 of Title 6 of
the Official compilation of Codes, Rules and Regulations of the State of New York (NYCRR)

- by -

BONIDE PRODUCTS, INC.

Respondents

RULINGS ON

  1. MOTION TO DISMISS;
  2. MOTION FOR A PROTECTIVE ORDER; and,
  3. MOTION FOR A CASE MANAGEMENT ORDER AND
    TO ALLOW DEPOSITION OF IDENTIFIED WITNESSES.

Case Nos.
CO 1-19990622-770
CO 3-19990662-771
CO 4-19990662-772
CO 5-19990662-773
CO 6-19990662-774
CO 7-19990662-777
CO 8-19990662-775
CO 9-19990662-776

SUMMARY

This Ruling denies Respondent's Motion to Dismiss in all aspects (except regarding causes of action 168 and 175 for which further clarification is required). This Ruling also denies Respondent's Motion for a Protective Order, denies Respondent's Motion for a Case Management Order, denies Respondent's request to depose current and former DEC employees, and denies Respondent's request for pre-filed testimony. This Ruling also lifts the stay of discovery in this matter and directs that discovery recommence immediately.

PROCEEDINGS

This enforcement action was commenced by Staff of the New York State Department of Conservation ("DEC Staff") by a Notice of Hearing, Pre-Hearing Conference and Verified Complaint dated April 21, 2000. This complaint alleged 253 separate violations of the Environmental Conservation Law (ECL) involving pesticides manufactured, distributed and sold by Bonide Products, Inc. ("Bonide" or "Respondent"). The Respondent's Answer was served upon DEC Staff on June 22, 2000. The Answer included eight affirmative defenses.

DEC Staff responded with a Motion, dated June 23, 2000, requesting clarification of the affirmative defenses asserted by the Respondent in its Answer. The Respondent responded to DEC Staff's Motion with an Affirmation in Opposition to DEC Staff's Motion for Clarification of Affirmative Defenses dated June 30, 2000. DEC Staff replied to this Affirmation with a Reply Affirmation in Support of DEC Staff's Motion for Clarification of Affirmative Defenses dated July 10, 2000. Oral arguments on the issues raised in the DEC Staff's Motion, Respondent's Affirmation, and DEC Staff's Reply Affirmation were held at DEC Headquarters, Albany, New York on July 31, 2000. A ruling granting DEC Staff's motion was issued on October 4, 2000. Bonide provided an Amended Answer dated October 12, 2000.

By papers dated October 30, 2000 DEC Staff served upon the Respondent a 165-page document entitled "NYSDEC's First Combined Discovery Demands." Respondent then filed a Motion for a Protective Order dated November 9, 2000. This matter was held in abeyance pending resolution of the Motion to Dismiss.

On November 7, 2000, Respondent filed a Motion for a Case Management Order and to Allow Deposition of Identified Witnesses. DEC Staff opposed this Motion by Affirmation dated November 22, 2000. Because case management orders are generally not utilized of in DEC's administrative hearing proceedings and the deposition of witnesses is also extremely rare, this motion was discussed on a conference call among the parties and the ALJ on November 10, 2000. During that call a schedule was established for the filing of the instant motion and response papers. It was agreed that a Ruling on the Motion to Dismiss should be sought first since it could affect whether a Ruling on this Motion was even necessary.

The Respondent then filed a Motion to Dismiss multiple causes of action on December 7, 2000. Specifically, Respondent sought to have 165 causes of action dismissed for a variety of reasons. DEC Staff opposed this motion by papers dated January 12, 2001.

INTRODUCTION

This Ruling addresses three motions made by the Respondent. First, the Respondent's December 7, 2000 Motion to Dismiss most of the causes of action found the DEC Staff's Complaint; second, the Respondent's November 9, 2000 Motion for a Protective Order regarding DEC Staff's initial discovery demands; and, third, the Respondent's November 7, 2000 Motion for a Case Management Order and to Allow Deposition of Identified Witnesses.

RESPONDENT'S DECEMBER 7, 2000 MOTION TO DISMISS

Pursuant to the schedule established via conference call on November 10, 2000, the Respondent filed a Motion to Dismiss 165 of the 256 causes of action in the Complaint. This motion was presented in three parts. First, the Motion sought to dismiss eighty (80) causes of action because DEC Staff erred in its legal interpretation of the phrase "misbranded" and therefore brought these causes of action in error. Second, the Respondent sought to have fifty (50) causes of action dismissed under the so-called "ancient product defense." The "ancient product defense" is a phrase coined by the Respondent to describe a circumstance of when at the time the violation occurred (i.e., an unregistered pesticide was sold by a retailer) the Respondent (manufacturer/registrant) was no longer selling the unregistered pesticides to the retailers. Thus, Respondent argues that it cannot be held liable for the action of the independent, third-party retailers. In the alternative, Respondent argues that state law allows the "sale through" by retailers of existing stocks of pesticides for which the New York State registration has expired. Third, the Respondent sought to dismiss thirty-five (35) causes of action because at the time the alleged violation involving the sale of unregistered pesticide occurred, the pesticides were, in fact, registered in New York State.

Following two extensions to the schedule granted by the ALJ, DEC Staff timely filed response papers on January 12, 2001. In these papers DEC Staff asserted that the eighty (80) causes of action involving alleged misbranding were based upon a correct legal interpretation of that term. DEC Staff also asserted that the fifty (50) causes of action that Respondents sought to dismiss under the ancient products defense were in fact valid since no such defense exists. Finally, DEC Staff did withdraw either 28 or 29 causes of action because at the time the alleged violation occurred, the pesticides were registered.

STANDARD FOR A MOTION TO DISMISS

A Motion to Dismiss is essentially a motion for summary judgment and will be granted when no issue of fact remains in dispute. ALJs do not have the authority to dismiss causes of action because only the Commissioner is empowered to make final determinations in enforcement actions (6 NYCRR 622.18). However, ALJs do routinely decide such motions and if dismissal is warranted, recommend such to the Commissioner.

DISCUSSION AND RULINGS

Bonide asserts that ECL §33-0303(4) in some way limits the authority of DEC Staff to implement and enforce state rules regarding pesticides at variance from federal law. This section reads:

4. In order to avoid confusion endangering the public health, or the life or health of any other non-target organisms, resulting from diverse requirements, particularly as to labeling and coloring of pesticides, and to avoid increased costs to the people of this state due to the necessity of complying with diverse requirements in the manufacture and sale of pesticides, it is desirable that there should be uniformity between the requirements of the several states and the federal government relating to pesticides. To this end the commissioner is authorized, after due public hearing, to adopt by regulations such regulations, applicable to and in conformity with the primary standards established by this article, as have been or may be prescribed with respect to pesticides by departments of agencies of the United States government. (ECL §33-0303(4)).

To support this contention, Bonide relies on the sentence that reads in part that "it is desirable that there should be uniformity between the requirements of the several states and the federal government relating to pesticides." (Brickwedde, Memo of Law, page 1). DEC Staff contests this assertion and argues that the plain meaning of the statute is that this language is permissive and not mandatory (Khosrova Affirmation, paragraphs 8-12).

Surely, if the Legislature had intended that state law should follow federal law in lockstep, it easily could have replaced the word "desirable" with the word "mandated." Since it didn't, I find that the Legislature intended that there could be some variance between state and federal law.

RULING 1: The Respondent's argument that state law regarding pesticides cannot vary from federal law is without merit and must be rejected.

Part 1: Bonide's Motion to Dismiss causes of action based upon alleged misbranding.

Bonide asserts that DEC Staff has misinterpreted state law regarding misbranding(1) and thus the eighty (80) causes of action alleging misbranding should be dismissed. The causes of action Bonide seeks to dismiss under this theory are numbered as follows in the complaint: 2, 7, 8, 9, 10, 12, 14, 16, 17, 20, 23, 27, 30, 31, 32, 42, 44, 45, 50, 52, 54, 56, 58, 62, 68, 73, 75, 76, 79, 80, 84, 85, 86, 88, 89, 91, 93, 94, 95, 101, 103, 104, 106, 112, 117, 121, 123, 125, 127, 129, 130, 132, 134, 136, 137, 138, 141, 143, 145, 147, 149, 151, 154, 156, 163, 166, 169, 174, 176, 177, 179, 191, 192, 244, 246, 247, 248, 249, 250, and 251.

The allegations of misbranding can be divided into the following categories. The first category consists of causes of action based upon the addition by Bonide of the phrase "ready to use" on labels that had previously been approved by DEC Staff. The second category consists of causes of action based upon the deletion of the word "organic" and the insertion of the word "friendly" over a symbol of the earth. The third category consists of causes of action based upon the deletion of the words "earth friendly brand" from the approved DEC label and the addition of a graphic symbol of a small globe with the word "friendly" over the symbol of the earth.

The United States Environmental Protection Agency ("USEPA") regulates pesticides nationally and requires the federal registration of pesticides, pursuant to the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"). In addition, all pesticides distributed or sold in New York must be registered with DEC (ECL §33-0701). Each of these three amendments to labels of products produced by Bonide is a "minor registration amendment" as that term is defined in 6 NYCRR 326.1(p). All amendments to any pesticide product registered with NYSDEC involving minor registration amendments must be filed with and approved by NYSDEC prior to the product being distributed and sold (6 NYCRR 326.18(a)). An exception to this exists where the format of a pesticide's label is redesigned that does not modify approved label text and which is consistent with federal and state requirements (6 NYCRR 326.19(c)(4)). Since "text" means the exact wording, any change to the text of the label approved by NYSDEC must be approved by the department prior to the distribution and sale of such pesticide. Failure by a registrant to include on its label any word, statement, or other information required by DEC Staff, then such pesticide is "misbranded" as defined in ECL §33-0101(32). It is an unlawful act for any person to distribute, sell, offer for sale any pesticide which is misbranded (ECL §33-1301(e)).

Thus, the simple rule regarding the labels of pesticides registered by DEC is that any change to any word on an approved pesticide label must be re-approved by DEC prior to sale, except for changes to the label specifically allowed by regulation. These exceptions are extremely limited and only include changes that add metric units, correct typographical and printing errors, changes in net contents, the inclusion of batch numbers and date of manufacture, and language required by state law (6 NYCRR 326.19(c)).

All eighty causes of action at issue here involve allegations that Bonide altered words on its labels without the approval of DEC and that the alterations do not fall into one of the narrow exceptions. Bonide's argument that the inclusion of certain new words or the deletion of others is somehow permissible without the prior approval of DEC Staff is without merit. Given that there seems little factual dispute regarding these causes of action, DEC Staff may want to consider filing a motion for order without hearing pursuant to 6 NYCRR 622.12 regarding some or all of these causes of action.

RULING 2: For the above stated reasons, Bonide's motion to dismiss the above listed eighty causes of action is denied.

Part 2: Bonide's Motion to Dismiss causes of action based upon the so-called "ancient product defense."

Bonide has moved to dismiss fifty causes of action because of the so-called "ancient product defense" (causes of action 1, 4, 5, 29, 35, 59, 60, 109, 116, 139, 159, 164, 195, 197, 198, 200, 202, 203, 204, 205, 206, 207, 209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221,223, 225, 227, 229, 230, 231, 233, 236, 237, 238, 239, 240, 242, 245 and 253). Bonide uses the phrase "ancient product defense" to refer to circumstances where Bonide alleges, at the time it sold the pesticide to independent retailers all pesticides were duly registered, but when these independent retailers sold the pesticides, the registration had expired. Bonide argues since it never sold an unregistered pesticide, it should not be charged with a violation for the sale of an unregistered pesticide by an independent third party (Brickwedde Memo of Law, p.9).

Bonide asserts that in every one of the fifty referenced causes of action, that at the time Bonide sold the product (to the retailer or wholesaler) the product was in fact registered. To support its claim, Bonide provides a four-page document dated December 4, 2000 entitled "Ancient Product" (Exhibit L to Wurz Affidavit) which purports to detail the last date Bonide shipped various pesticides.

DEC Staff disputes the factual assertion that Bonide never distributed or sold an unregistered pesticide (a pesticide becomes unregistered after the registration expires). DEC Staff asserts that little evidentiary weight should be given to Exhibit L because no invoices or other original documents were provided by Bonide to support its motion. In addition, DEC Staff encloses documents purporting to show that Bonide did in fact distribute unregistered pesticides for one of these causes of action (Serafini Affidavit, paragraphs 54-58).

Based upon the papers filed by the parties, a factual dispute exists regarding whether Bonide distributed and sold pesticides that were unregistered at the time of distribution and sale.

RULING 3: Bonide has failed to establish that there are no disputes of fact regarding these causes of action nor, as discussed below, has it demonstrated that these causes of action should be dismissed as a matter of law. Therefore, Bonide's Motion to Dismiss these 50 causes of action is denied.

Bonide asserts that as a matter of law, it cannot be held liable for subsequent sales by independent retailers if at the time Bonide sold and distributed the pesticides they were registered in New York State. DEC Staff disagrees and asserts that Bonide may indeed be held liable for distribution of its products by independent third parties if a pesticide is sold after the registration has expired (Serafini Affidavit paragraph 44). DEC Staff asserts that it advises applicants that when the registration for pesticides expires, that the applicant must either re-register the product or recall the product from the shelves.

However, DEC Staff fails to cite any provision of state or federal law to support its contention that sales by independent retailers after registration has expired can be attributed to Bonide when at the time Bonide sold and distributed the product it was registered. Indeed, state law explicitly states it shall be unlawful for any person to distribute, sell, offer for sale or use within this state any which has not been registered (ECL §33-1301). I can find no authority for DEC Staff's assertion that Bonide can be liable in these circumstances. Obviously, the wholesaler or retailer in these instances could be charged with a violation for the sale of an unregistered pesticide (see In the matter of Charles Green and Jade Chemicals, Order of the Commissioner September 8, 1992).

RULING 4: So long as Bonide did not distribute, sell, offer for sale or use a pesticide that was unregistered in New York State at the time it distributed, sold, offered for sale or used it, Bonide cannot be held liable for violations committed by independent third parties. The independent third parties can be held liable for violations if at the time of their distribution, sale or use the pesticide was not registered in New York State.

Bonide also asserts that federal law allows pesticides for which registration has expired to be sold. Specifically, Bonide cites section 136d of FIFRA that allegedly allows the continued sale of existing stocks of pesticides even when its registration is suspended or canceled. Bonide further argues that ECL §33-0303(4) mandates that state law regarding pesticides conform in all aspects to federal law. However, as discussed in Ruling 1, above, this reasoning is flawed.

DEC Staff disputes Bonide's position and asserts and that state law requires all pesticides to be registered before being distributed and sold. Therefore, DEC Staff's interpretation is correct. ECL §33-0701 states that every pesticide used, distributed, sold or offered for sale within the state must be registered. There is no exception to allow for the continued sale of pesticides for which registration has expired. Sale of an unregistered pesticide is a violation of state law (ECL §33-1301).

RULING 5: Bonide's assertion that pesticides may be legally sold by anyone in New York State after registration has expired is without merit.

Finally, Bonide asserts that the language in ECL §33-1301 which reads: it shall be unlawful to sell a pesticide "which has not been registered" means that once a pesticide has been registered it can always be sold because it once was registered. This argument is so meritless that it hardly deserves to be addressed. ECL §33-0701 states that all pesticides sold in New York must be registered and establishes a biennial renewal process. To read §33-1301 in the fashion Bonide asserts would completely gut New York State's system of managing the registration of pesticides.

RULING 6: Bonide's assertion that once a pesticide is registered it can be legally sold forever after its registration has expired is without merit.

PART 3: Bonide's Motion to Dismiss causes of action because the pesticides alleged to be unregistered were in fact registered.

Bonide has moved to dismiss 35 causes of action involving pesticides alleged to be unregistered at the time of sale on the grounds that the pesticides were in fact registered (causes of action 6, 13, 15, 38, 39, 40, 49, 53, 72, 90, 92, 105, 108, 111, 120, 124, 126, 128, 131, 135, 140, 144, 146, 148, 153, 158, 160, 161, 162, 168, 173, 175, 178, 184, and 185).

In response DEC Staff has withdrawn all of these causes of action with the exception of 108, 158, 160, 168, 173, possibly 175, and 184. The reason for the withdrawal of these causes of action is because DEC Staff now admits that no violation exists for these 28 or 29 causes of action.

Regarding causes of action 108 and 158 involving the pesticides "Bonide Rose & Garden Insect Spray" and "Bonide Tomato & Vegetable" respectively, DEC Staff asserts that these pesticides never were registered, but Bonide asserts they were. Neither side has presented adequate evidence of their assertion. This is a dispute of fact to be resolved at the adjudicatory hearing in this matter.

Regarding cause of action 160 involving the pesticide "Bonide Total Release Room Fogger Ready-to-Use" (this is the name of the pesticide in the Complaint, in DEC Staff's papers in opposition the pesticide is referred to as "Bonide Total Release Room Fogger"), DEC Staff asserts that the pesticide was not registered until nearly two months after the alleged violation. Bonide asserts that the pesticide was registered when it was offered for sale. This is a dispute of fact to be resolved at the adjudicatory hearing in this matter. Also, the parties should confirm they are discussing the same product.

Regarding causes of action 168 and 173 involving the pesticide "Bonide Fruit & Vegetable Dust", Bonide asserts that at the time of the alleged violation that the pesticide was registered. In response, DEC Staff asserts that the label on this product was not approved. This is a dispute of fact to be resolved at the adjudicatory hearing in this matter.

RULING 7: Bonide's Motion to Dismiss causes of action 108, 158, 160, 168 and 173 is denied for the reasons stated above.

Regarding cause of action 175 involving "Bonide Garden Dust for Fruits, Vegetables and Flowers", Bonide asserts that this pesticide was registered at the time of the alleged violation.

DEC Staff's papers are inconsistent on whether the 175th cause of action is withdrawn. In the Affirmation in Opposition, cause of action 175 is withdrawn as well as paragraph 61 of the Serafini Affidavit. However, in paragraph 81 of the Serafini Affidavit, DEC Staff requests that Bonide's motion regarding 175 be denied and paragraphs 73 and 74 set forth the reasons for such denial. DEC Staff must clarify their intention regarding this cause of action by March 31, 2001.

Regarding cause of action 184 involving the pesticide "Bonide Lawn Weed Killer" (as named in the Complaint), Bonide asserts that this pesticide was registered at the time of the alleged violation. In response, DEC Staff asserts that Bonide sold and shipped "Bonide Lawn Weed Killer Trimec" (same EPA registration # as in the Complaint) and that this product was not registered. DEC Staff further asserts that Bonide does have a registered product with the name found in the Complaint, but this product has a different EPA registration # and different active ingredients. In addition, DEC Staff seems to make reference to two other pesticides in their response: "Lawn Weed Killer Concentrate Trimec" (with the same EPA registration # as found in the Complaint) and "Trimec Lawn Weed Killer". It is unclear what DEC Staff is asserting here.

RULING 8: I reserve ruling on Bonide's motion to dismiss causes of action 175 and 184 until DEC Staff provides clarification described above. DEC Staff is directed to provide such clarification by March 31, 2001.

RESPONDENT'S NOVEMBER 9, 2000 MOTION FOR A PROTECTIVE ORDER

In response to DEC Staff's 166 page Discovery Demands dated October 30, 2000, Bonide filed a Motion for a Protective Order dated November 9, 2000. Pursuant to a letter from the ALJ dated November 10, 2000, DEC Staff was directed to provide a written response to this Motion by November 22, 2000. DEC Staff timely filed an Affirmation in Opposition on November 22, 2000. A ruling on this motion was deferred until consideration of Bonide's Motion to Dismiss.

A protective order may be sought by Bonide in response to DEC Staff's discovery demands to deny, limit, condition or regulate the use of any disclosure device in order to prevent unreasonable annoyance, expense, embarrassment, disadvantage or other prejudice. Such motion must be accompanied by an affirmation reciting good faith efforts to resolve the dispute without resort to a motion (6 NYCRR 622.7(c)(1)). This standard is essentially the same as that found in New York's Civil Practice Law and Rules (CPLR) §3103.

In their papers, both Bonide and DEC Staff indicate that good faith efforts to resolve the dispute have occurred, but failed. In Moving for a Protective Order, the burden is on the moving party to show good cause why the other parties right to prepare itself thoroughly for trial should be curtailed. Bonide asserts several arguments in support of its motion. First, Bonide asserts that it would be inconvenient due to medical reasons (Brickwedde Affirmation, paragraphs 5 and 6). This is not a valid reason to grant a protective order. Second, Bonide asserts that DEC Staff is asking for items not in Bonide's possession, such as empty pesticide containers. Bonide asserts that it should not be forced to manufacture containers for discovery. DEC Staff asserts that it is not requesting new containers with labels be produced, rather only if such empty containers are in the possession of Bonide, that they be produced. Bonide's second grounds for a protective order is also invalid. Third, Bonide asserts that the discovery demand is onerous and burdensome and intended to harass Bonide and the information requested is duplicative. DEC Staff disputes this assertion and argues that the requested information is not duplicative, is material and necessary, and relevant to this case. Upon review of the parties papers and the discovery request I find that DEC Staff's discovery demands are not unreasonable and that Bonide's unsupported allegations of harassment are unfounded. Finally, Bonide asserts that DEC Staff has demanded interrogatories. DEC Staff states this claim is inaccurate. I concur with DEC Staff and find no demand for interrogatories.

RULING 9: For the above stated reasons, Bonide's motion for a protective order is denied. The stay on discovery is lifted. All parties are directed to comply with all outstanding discovery demands.

RESPONDENT'S NOVEMBER 7, 2000 MOTION FOR A CASE MANAGEMENT ORDER AND TO ALLOW DEPOSITION OF IDENTIFIED WITNESSES

By Notice of Motion and supporting papers dated November 7, 2000, Respondent moved for a Case Management Order and an Order permitting the deposition of certain witnesses. Bonide asserts that a Case Management Order is necessary because this matter is complicated and includes novel legal arguments. DEC Staff opposed this motion by papers dated November 22, 2000.

Such an order is sometimes used by state and federal judges as a tool to manage complex, multiparty litigation. However, the underlying request for scheduling has been addressed by my schedule for motion practice and by this ruling. The use of case management order is not necessary here. While the Complaint asserts more than 200 separate causes of action, it is a relatively routine enforcement matter that can be managed through normal administrative means. Now that Respondent's Motion to Dismiss and Motion for a Protective Order have been denied, discovery will commence in its usual fashion and the case can proceed either toward settlement or adjudication.

RULING 10: Respondent's Motion for a Case Management Order is denied.

The Respondent has also asked for a Ruling permitting the deposition of Mitchell Khosrova, Maureen Serafini, and Kathleen Martens all current or former members of DEC Staff. DEC Staff opposes this motion.

Depositions may only be taken in DEC administrative enforcement hearings with the permission of the ALJ upon a finding that such depositions are likely to expedite the proceeding (6 NYCRR 622.7). Respondent argues that the use of depositions would shorten the time necessary for an adjudicatory hearing. The Respondent's argument is unconvincing. Depositions are seldom allowed in DEC administrative hearings because the examination of witnesses is most properly and most efficiently taken during the hearing itself. Bonide has failed to show that the use of depositions in this matter would expedite the proceeding.

RULING 11: Respondent's Motion seeking to depose specified current and former members of DEC Staff is denied.

Also contained within this motion, is a request from Bonide that DEC Staff is directed to file pre-filed testimony. Bonide cites no legal authority for this request. DEC Staff opposes this request. The use of pre-filed testimony in DEC administrative enforcement cases is within the ALJs discretion (6 NYCRR 622.7). However, Bonide has failed to provide a compelling reason why such pre-filed testimony would be useful in this matter.

RULING 12: Respondent's Motion seeking pre-filed testimony is denied.

CONCLUSION

These Rulings address all outstanding Motions in this matter. The stay of discovery is lifted effective immediately.

For the New York State Department
of Environmental Conservation

_____________/s/_____________
By: P. Nicholas Garlick
Administrative Law Judge

Dated: March 14, 2001
Albany, New York

To: Richard J. Brickwedde, Esq.
Greene & Seifter Attorneys, P.C.
One Lincoln Center
Syracuse, NY 13202-1387

Mitchell Khosrova, Esq.
Associate Counsel
NYSDEC
50 Wolf Road
Albany, NY 12233-1500

1 "Misbranded" is defined at §33-0101(32).

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