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Scotts Company (The) - Ruling, February 16, 2001

Ruling, February 16, 2001


In the Matter
- of -
Alleged Violations of the New York State Environmental Conservation Law Articles 33 and 71, and Part 326 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York,

- by -

The Scotts Company,

Motions of Respondent to Dismiss and Staff's Cross-Motion to Strike Defense

DEC Case No. R4-20000306-1


On April 26, 2000, Nathaniel H. Barber, the Pesticide Compliance Counsel for the New York State Department of Environmental Conservation (DEC or Department) caused to be served upon respondent, The Scotts Company (Scotts), a notice of hearing and complaint relating to the alleged illegal sale, offering for sale, distribution, transportation and delivery for transportation of Grubex (United States Environmental Protection Agency [EPA] Reg. No. 538-266) at various locations in New York State. DEC staff served this complaint shortly after The Scotts Company, by its attorneys Arnold & Porter, petitioned the Department pursuant to Environmental Conservation Law (ECL) § 33-0711 with respect to the February 18, 2000 decision of Maureen P. Serafini, Chief of DEC's Pesticide Product Registration Section, to deny Scotts' application to register Grubex in New York. By its counsel, the respondent served an answer to the complaint dated May 15, 2000. With the consent of Scotts, DEC staff served an amended complaint dated July 6, 2000 and the respondent served an answer to the amended complaint dated August 2, 2000. In the amended complaint, staff alleges, in addition to the matters concerning Grubex, that the respondent illegally sold and distributed in New York State another unregistered pesticide - Ortho RosePride Systemic Triple Action Spray (EPA Reg. No. 239-2476) (RosePride).

Administrative Law Judge (ALJ) Nick Garlick had previously presided over this enforcement proceeding; however, due to scheduling issues, the matter was transferred to ALJ Helene G. Goldberger. The parties agreed to a schedule for the exchange of motions and supporting papers as to the dismissal of thirteen of the fourteen causes of action in staff's amended complaint and the dismissal of Scotts' second affirmative defense. Scotts submitted a motion to dismiss dated December 20, 2000 with affidavits of Paula Bodey, Gary Rosenstein and Kerry A. Dziubek and supporting exhibits; staff submitted a cross-motion to strike the respondent's second affirmative defense dated January 19, 2001, the affidavit of Maureen Serafini in opposition to respondent's motion and in support of staff's motion, an attorney's affirmation in opposition to respondent's motion and in support of staff's motion to strike and a memorandum of law; Scotts submitted a reply memorandum in support of its motion and in opposition to staff's motion dated February 5, 2001. With the February 12, 2001 submission of staff's reply memorandum of law in support of its cross-motion to strike Scotts' second affirmative defense, the motions are fully submitted and are ready to be decided.

Factual Background to Motions

These facts do not appear to be in dispute between the parties. In October 1999, Scotts applied to DEC for registration of Grubex due to a change in formulation of this product. In its denial letter of March 14, 2000, DEC staff stated concerns regarding the name of the product due to potential confusion with other Scotts' products (Grubex - EPA Reg. No. 3125-463-538 and Grubex with Fertilizer [EPA Reg. No. 3125-471-538]) and also the size and placement of a label indicating the prohibition of its sale on Long Island. The active ingredient in Grubex - halofenizide - is of concern to DEC due to its potential to leach into and contaminate groundwater. Because Long Island has a sole source aquifer, DEC determined that it could not be sold in Nassau and Suffolk counties. The Department was not convinced, based upon prior history concerning a different product, of Scotts' ability to prevent this pesticide from entering the Long Island market with the proposed marketing plan.(1)

With respect to RosePride, Scotts represents that when it purchased The Solaris Group of the Monsanto Company in January 1999 and all of the pesticide registrations belonging to that company, among these was Ortho Systemic Rose & Flower Spray (EPA Reg. No. 239-2476). EPA had approved the transfer of ownership of the product registrations belonging to The Solaris Group in August 1999. Scotts notified EPA of an additional brand name for RosePride - RosePride Systemic Triple Action Spray and a modification to the label indicating that RosePride gave lasting protection that will not wash off with rain or watering. Based upon EPA's review, Scotts agreed to remove the modified claim at the next label printing. By letter dated January 5, Ms. Serafini notified Scotts that its RosePride registration was unacceptable because the modified label provided no time limit for its protection claim and because of the additional brand name for the product. After the respondent agreed to some modifications of the label, DEC approved the registration in July 2000.

Respondent's Position on its Motion to Dismiss

In essence, respondent's position is that DEC's failure to register Grubex and to timely register RosePride relate to the Department's actions that are within the sole province of EPA because they are preempted by the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), 7 U.S.C. § 136v(b). Scotts characterizes the Department staff's rationale for declining to register Grubex and for delaying the registration of RosePride as one related to labeling requirements. Accordingly, because FIFRA (7 U.S.C. § 136v[b]) provides that the states shall not impose requirements for labeling or packaging in addition to or different from those required under the its provisions, Scotts maintains that the Department acted without authority in its registration decisions on these products. See also, New York State Pesticide Coalition v. Jorling, 874 F.2d 115, 118-19 (2d Cir. 1989); Babalola v. Crystal Chemical, Inc., 225 AD2d 370 (1st Dep't 1996); Little v. Dow Chemical Co., Inc., 148 Misc.2d 11 (Sup. Ct. Eric Co. 1990).

Staff's Position on Scotts' Motion and Staff's Cross-Motion to Strike Respondent's Second Affirmative Defense

Staff maintains that ECL §§ 33-1301(1), 33-0701 and § 326.14(a) of Title 6 of the New York Compilation of Codes, Rules and Regulations (6 NYCRR) are unequivocal in their mandate that unregistered pesticides may not be sold or distributed in this State. Staff provides that there is no dispute that at the time that the pesticides were found on the shelves of stores in New York State they were not registered with DEC. Accordingly, staff argues that the reasoning related to the Department staff's decision not to approve Scotts' application to register Grubex and its decision to obtain some changes in the respondent's marketing of RosePride prior to approval are not relevant here. Staff also maintains that pursuant to ECL § 33-0704, there exists an administrative remedy for the company to contest the registration denial and that this forum is not appropriate for that purpose.(2) With respect to the preemption arguments made by Scotts, staff provides that this constitutional claim is not an appropriate subject of an administrative proceeding. Staff also argues that New York is not obligated to register every product approved for registration by EPA and that even if the decision not to register was found to be incorrect, pesticide manufacturers and distributors cannot, on their own, decide to market an unregistered product in the state.


This is an enforcement proceeding brought pursuant to the provisions of Article 33 of the ECL that prohibit the sale and distribution of unregistered pesticides in New York State. Based upon Department staff inspections performed during 2000 at a variety of retail establishments in the state, staff reported that they had discovered the availability for sale of two then-unregistered pesticide products - Grubex and RosePride - that are sold by the respondent. Based upon the Department's determination to deny registration to Grubex in March 2000, this product is not registered for sale in New York State. The Department did determine to register RosePride in July 2000 after it became satisfied that its concerns regarding the company's representations of the products' durability and its ownership were clarified.

Based upon the language in 7 U.S.C. § 136v(b) and the case law that has interpreted this section of law, there cannot be much question that FIFRA preempts states from placing their own labeling requirements on pesticide products. And, it does appear from the various correspondence sent by staff to the respondent that in some respects, Department staff had concerns that related to the labels that appeared on these products in making its registration determinations. However, I do not find that the alleged preemption by FIFRA can be an appropriate subject of an administrative adjudication before this Department. In arguing that preemption is a proper subject, respondent attempts to make a fine distinction between the actions of the staff versus the legitimacy of the applicable regulation and law, claiming that it is only challenging the former. However, I do not find that this delineation holds up.

The staff's review of the registration applications of Scotts were based upon law and regulation. For example, 6 NYCRR § 326.14(e) contains requirements regarding the Department's notification and review of changes in labeling. Section 33-0709 of the ECL includes "labeling" as one of the matters for Department review prior to approval of registration. Sections 33-0704(2), (4), (5) include labeling as one of the criteria in making determinations regarding registration. ECL § 33-0711 specifically includes labeling as one of the criteria which the Department can use to decide of the registration complies with Article 33. See also, ECL § 33-0711. Because an administrative law judge is not empowered to address the constitutionality of the regulations and law that govern the agency, I cannot make a determination regarding whether there is preemption here or not.

In the DEC administrative cases cited by respondent in support of such review, there were no bases for the claims of preemption and thus, the ALJ was not called upon to make such interpretations of constitutional law. In re J & C Marketing, Inc., 1999 WL 1474543 (December 21, 1999); In re Consolidated Rail Corp., 1992 WL 406382 (December 8, 1992); In re Envirotech of America, Inc., 1992 WL 289984 (July 14, 1992). As for the judicial cases cited in support, these did not support respondent's thesis. These cases merely state that where there is a constitutional claim that rests on facts before an administrative tribunal, those facts should be heard. In this matter and at this juncture, the issue is whether staff had the authority to find the respondent in violation based upon its alleged actions in distributing unregistered products in this state. Thus, the facts related to the staff's registration determination are not relevant.

It is also clear from the information provided by Ms. Serafini that labeling matters were not the sole concerns of the Department staff in making its registration determination. Specifically, with respect to Grubex, staff had concerns regarding the ability of Scotts to limit the distribution of this product so that it would not enter the Long Island market and potentially contaminate groundwater there. And, as noted by staff, despite the company's marketing plan to prevent this occurrence, the unregistered product did become available in Suffolk County. These facts are more appropriately the subject of a hearing concerning the registration denial pursuant to ECL § 33-0704 rather than in this enforcement context.

Finally, I agree with staff that if companies were to become the arbiters of whether the Department has properly denied a registration, the intent of Article 33 - to regulate the registration, use, purchase and application of pesticides in the public interest - would be undermined. In Title 7 of Article 33, the Legislature set forth a different scheme - that requires a pesticide manufacturer/distributor to obtain registration of any pesticide that it wishes to sell or distribute in this state. ECL § 33-0701. This title provides for a registration procedure as well as a process to challenge a registration decision of the Department staff. ECL §§ 33-0704, 0711; In the Matter of Chemical Specialties Manufacturers Association v. Jorling, 85 NY2d 382 (1995). The respondent failed to exhaust that remedy prior to going ahead with the distribution of the unregistered products in New York and cannot use this enforcement proceeding to collaterally attack the staff's registration determinations.

In denying the plaintiff's claim in New York State Pesticide Coalition v. Jorling, id, regarding the alleged preemption of the State's pesticide notification requirements, the Second Circuit affirmed that while FIFRA precluded states from imposing labeling requirements, "it expressly permitted states to impose regulations on the "sale and use" of these substances in addition to federal statutory requirements, so long as there was no conflict. FIFRA § 24(a), 7 U.S.C. § 136v(a)."


I deny respondent's motion to dismiss thirteen of the fourteen claims brought by DEC staff and I grant staff's motion to dismiss Scotts' second affirmative defense contained in its answer to the amended complaint. The parties are directed to contact the Office of Hearings and Mediation Services as to further proceedings in this matter including the setting of a hearing date.

Helene G. Goldberger
Administrative Law Judge
Albany, New York

Dated: February 16, 2001

TO: Michael Gerrard, Esq.
Arnold & Porter
399 Park Avenue
New York, New York 10022-4690

Nathaniel H. Barber,
Pesticide Compliance Counsel
NYSDEC - Division of Environmental Enforcement
50 Wolf Road
Albany, New York 12233

1 Effective September 30, 2000, the Department reclassified all products containing this substance as restricted thus limiting their use to professionals. ECL § 33-0303.3(d); 6 NYCRR §§ 325.7(a), 326.2.

2 The respondent commenced this process with its petition dated April 13, 2000 on the Grubex registration denial but there is no indication in the parties' motion papers as to the status of this proceeding.

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