Bonide Products, Inc. - Ruling 4, June 11, 2001
Ruling 4, June 11, 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.,
Ruling on Motion to Strike Affirmative Defenses
June 11, 2001
This ruling strikes five of the remaining six affirmative defenses asserted by the Respondent, Bonide Products, Inc. ("Bonide" or "Respondent") and stays the Respondent's discovery demands related to those affirmative defenses.
This matter was commenced by Staff of the Department of Environmental Conservation ("DEC Staff") by a Notice of Hearing, Pre-Hearing Conference and Verified Complaint dated April 21, 2000. The Respondent served an Answer on June 22, 2000. The Answer includes 8 affirmative defenses.
On June 23, 2000, DEC Staff filed a Motion for a More Definite Statement pursuant to Title 6 of the Official Compilation of New York Codes, Rules and Regulations ("6 NYCRR") 622.4(f) and 622.6(c). In its Affirmation in Support of NYSDEC's Motion for Clarification of Affirmative Defenses, DEC Staff asserted that the affirmative defenses put forth by the Respondent were so vague and ambiguous that DEC Staff was not placed on notice of the facts or legal theory upon which the Respondent's defenses are based. Respondent opposed the motion by Affirmation dated June 30, 2000. On October 4, 2000, I issued a ruling directing the Respondent to clarify its first, second, third, and sixth affirmative defenses. The other affirmative defenses were determined not to be vague or ambiguous, and that DEC Staff was placed on notice of the facts and legal theory upon which the Respondent's defenses were based. Respondent served an Amended Answer on October 12, 2000.
On March 14, 2001, I denied the Respondent's motion seeking: 1) dismissal of certain causes of action contained in the Complaint; 2) issuance of a protective order; and, 3) issuance of a case management order and allowing deposition of identified witnesses. The Respondent's request for leave to appeal this ruling was denied by Commissioner Crotty on June 5, 2001.
The Instant Motion
On April 4, 2001, DEC Staff moved to dismiss all of the affirmative defenses in Respondent's Amended Answer, and also sought to stay the DEC Staff's response to the discovery sought by Respondent related to the affirmative defenses. Respondent opposed the motion and withdrew its seventh and eighth affirmative defenses. Thus, this ruling addresses DEC Staff's motion only with respect to the first six affirmative defenses set forth in the Amended Answer.
Merits of the Motion
First Affirmative Defense
The Respondent's first affirmative defense is a rambling 20 paragraphs. With the clarifications provided in the Respondent's "Memorandum of Law in Opposition to DEC's Motion To Dismiss Respondent's Affirmative Defenses" (dated May 1, 2001) the shape and scope of this affirmative defense become clearer. It appears that this affirmative defense applies to five causes of action in DEC Staff's Complaint (specifically causes of action 69, 71, 96, 170 and 181).
The Respondent seems to be claiming that DEC Staff improperly delayed the approval of the label for Bonide's "Termite and Carpenter Ant Control". The delay was caused by DEC Staff's request that the label for this product be amended, allegedly in violation of the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. Section 136 et seq. During the discussions between DEC and Bonide regarding this label, an employee of Bonide released to the market an amount of this pesticide, in violation of New York State law. Bonide does not assert that the delay in approving the label in any way excuses this violation, but rather that these circumstances should be considered in determining the appropriate penalty for these violations.
DEC Staff seems to have not understood this affirmative defense in its motion (at the time it moved, DEC Staff did not have the benefit of the clarification of this affirmative defense in the Respondent's response to the motion). DEC Staff argues at length regarding whether it is appropriate in a DEC administrative hearing to adjudicate matters of federal preemption or whether such is precluded as a federal Constitutional question.
This question need not be reached. The Respondent asserts that the delay in approving a label while negotiations occurred between a registrant and DEC should mitigate any penalty if the product is illegally distributed, sold, or offered for sale. This is not so. The Respondent has a duty to keep its unregistered products out of the channels of commerce of New York. This is true whether it is negotiating the terms of registration or not. The length of time of the negotiations is irrelevant.
RULING #1: DEC Staff's motion to strike Bonide's first affirmative defense is granted. It is not relevant to the penalty calculation for alleged violations if there are ongoing negotiations regarding the proposed label for a pesticide product.
Second Affirmative Defense
The second affirmative defense alleges selective enforcement and asserts that DEC Staff's failure to timely disclose to Bonide the products that it was quarantining deprived Respondent of the opportunity to correct the alleged deficiencies and avoid additional penalties. DEC Staff addresses this affirmative defense in counsel's affidavit, but does not do so in its memorandum of law.
As an initial matter, consideration of a claim of selective enforcement goes beyond the bounds of an administrative proceeding, and thus, must be submitted to a court of competent jurisdiction. See DiMaggio v. Brown, 19 N.Y.2d 283, 291-292, 279 N.Y.S.2d 161, 225 N.E.2d 871 (1967); Bell v. N.Y.S. Liquor Auth., 367 N.Y.S.2d 875 (3rd Dept. 1975) ("[t]he proper manner in which to develop such a defense is to raise it initially in an Article 78 proceeding subsequent to the administrative hearing. If a triable issue of fact is thereby raised, the reviewing court may order it tried forthwith"). These matters are preserved for review, but based upon the submissions received, it is not necessary to inquire further.
However, nowhere in either the Amended Answer (paragraphs 281-302) or the Respondent's "Memorandum of Law in Opposition to DEC's Motion To Dismiss Respondent's Affirmative Defenses" (dated May 1, 2001)has the Respondent provided any articulation regarding which of the over 250 causes of action this affirmative defense addresses. Despite my October 4, 2000 Ruling which directed the Respondents to clarify this affirmative defense, this affirmative defense remains vague, containing unspecific allegations that DEC Staff contributed to or compounded the violations. 6 NYCRR 622.4(c) states that "[t]he respondent's answer must explicitly assert any affirmative defenses together with a statement of the facts which constitute the grounds of each affirmative defense asserted." In this case, the facts constituting the grounds of this affirmative defense are not stated nor does the affirmative defense identify which causes of action it addresses.
RULING #2: DEC Staff's motion to strike the Respondent's second affirmative defense is granted. It is vague and ambiguous and does not identify adequately the facts or legal theory it relies on.
Third Affirmative Defense
Respondent's third affirmative defense alleges that DEC Staff's claim of misbranding and unregistered product are unfounded. According to Respondent, Bonide's addition of the words "Ready-To-Use" to pesticide labels, as well as changing the words "earth friendly" on the labels to a logo depicting a photo of the earth with the word "friendly" inserted in the middle, is consistent with the New York State Pesticide Product Registration Procedures Manual. Respondent further alleges that upon learning of the Department's objection to the logo, it took steps to produce corrected labels to be used on its products.
In its motion to dismiss this affirmative defense, DEC Staff points out that my March 14, 2001 ruling in this case addressed this issue. Moreover, according to the affidavit of Maureen Serafini, Director of the Bureau of Pesticides Management, changes to the label such as those made by Bonide are impermissible because of the possibility of confusion on the part of pesticide inspectors in the field.
As noted in my March 14, 2001 ruling, 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)). . . . 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.
RULING #3: In light of the consideration of this issue in my March 14, 2001 ruling, DEC Staff's motion to dismiss the Respondent's third affirmative defense is granted.
Fourth Affirmative Defense
Respondent's fourth affirmative defense alleges that the Department failed to review Respondent's product application in accordance with the time frames set forth in ECL Section 33-0704 and 6 NYCRR Section 326.23. Specifically, the Respondent that DEC Staff has frequently taken more than 90 days, as required by law, to review Respondent's applications. However, this affirmative defense does not identify which applications were improperly delayed, which pesticide products were involved, or which causes of action this affirmative defense addresses.
In its Motion, DEC Staff asserts that Respondent's fourth affirmative defense is imprecise and confusing. Further, DEC Staff argues that it has not been provided with adequate notice of what specific causes of action this affirmative defense purports to negate and that it is therefore prejudiced.
In its response to DEC Staff's Motion, Bonide asserts that DEC has improperly delayed review of its applications. However, again, the Respondent does not identify which applications were improperly delayed, which pesticide products were involved, or which causes of action this affirmative defense addresses.
While my October 4, 2000 Ruling did not require Bonide to clarify this affirmative defense, based upon the present motion and response papers it is apparent that this affirmative defense is defective. Given the lack of specificity regarding the Respondent's fourth affirmative defense, it is impossible to ascertain the specifics of Bonide's allegations. This affirmative defense is vague and ambiguous and does not identify adequately the facts or legal theory it relies on. Consequently, it must be struck.
RULING #4: DEC Staff's motion to strike the Respondent's fourth affirmative defense is granted.
Fifth Affirmative Defense
Respondent's fifth affirmative defense alleges that "DEC's dilatory response in following up on its quarantines resulted in a deprivation of property, both to Bonide and its customers . . . without due process of law in violation of the state and federal constitutions." The October 4, 2000 ruling determined that this affirmative defense was sufficiently clear to place Staff on notice of the facts or legal theory on which the affirmative defense is based.
By its motion, DEC Staff argues that this affirmative defense should be dismissed, because it raises Constitutional issues that are not appropriate for consideration in this forum. DEC Staff argues further that there are no time limitations that apply to the Department's authority to quarantine adulterated, misbranded, improperly labeled or unregistered pesticide products. Respondent maintains that Constitutional issues may be heard to fully develop the record, and that raising such issues may be necessary for Respondent to exhaust its administrative remedies. I disagree. Takings claims based upon the federal and state Constitutions are appropriately heard in federal and state courts, not in an administrative proceeding.
RULING #5: DEC Staff's motion to strike the Respondent's fifth affirmative defense is granted. It raises Constitutional issues relating to takings that cannot be addressed in this forum.
Sixth Affirmative Defense
In its sixth affirmative defense, Respondent alleges that the Department violated §301(1) of the State Administrative Procedure Act ("SAPA") by failing to afford an opportunity for a hearing within a reasonable time. Specifically, the Respondent alleges that the time period from when DEC staff first seized and quarantined product until the time DEC served its Notice of Hearing was not a reasonable time in the circumstances of this case. Apparently, DEC Staff quarantined certain Bonide products between May 1997 and September 1999 and sent correspondence to Bonide beginning in June 1999, prior to serving the Complaint in this matter in April 2000.
In its motion to dismiss this affirmative defense, DEC Staff states that SAPA does not define any fixed time period for the commencement of a hearing. DEC Staff further asserts that the time intervals between the quarantine and the commencement of this enforcement action was reasonable and that this affirmative defense should be struck.
SAPA Section 301(1) provides that "[i]n an adjudicatory proceeding, all parties shall be afforded an opportunity for hearing within a reasonable time." The leading case interpreting what a reasonable time is Cortlandt Nursing Home v. Axelrod, 66 N.Y.2d 169, 177 (1985), cert. denied, 476 U.S. 1115 (1985). In Cortlandt, the Court of Appeals noted that "[t]he passage of time, standing alone, does not . . . serve as a basis for judicial intervention, with peremptory effect, into the administrative process." 66 N.Y.2d at 177. Instead, the court held that certain factors must be considered in determining whether a delay is unreasonable, including: the nature of the private interest allegedly compromised by the delay, the actual prejudice to the private party, the causal connection between the conduct of the parties and the delay, and the underlying public policy advanced by governmental regulation.
In its Memorandum of Law, the Respondent cited Cortlandt and asserts that it can meet the standard for proving and unreasonable delay. This is a factual matter that needs to be developed through an adjudicatory record. According, this affirmative defense is not struck. At the hearing, Respondent's burden of proof to establish the elements of each affirmative defense (6 NYCRR Section 622.11(b)(2)).
RULING #6: DEC Staff's motion to strike the Respondent's sixth affirmative defense is not granted.
DEC Staff's Motion to Stay Discovery
Since DEC Staff's motion to dismiss Respondent's first, second, third, fourth, and fifth affirmative defenses is granted, the Respondent is not entitled to discovery regarding the allegations set forth in these affirmative defenses.
RULING #7: DEC Staff's motion to stay the Department's response to the discovery demanded by the Respondent related to the affirmative defenses 1, 2, 3, 4 and 5 is granted. Discovery regarding affirmative defense #6 is not stayed.
By: P. Nicholas Garlick
Administrative Law Judge
Dated: June 11, 2001
Albany, New York