WILLIAM D. RUCKELSHAUS, ADMINISTRATOR, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, APPELLANT v. MONSANTO COMPANY No. 83-196 In the Supreme Court of the United States October Term, 1983 On Appeal from the United States District Court for the Eastern District of Missouri Jurisdictional Statement TABLE OF CONTENTS Opinion below Jurisdiction Constitutional and statutory provisions involved Statement The questions presented are substantial Conclusion Appendix A Appendix B Appendix C Appendix D Appendix E OPINION BELOW The opinion of the district court (App. A, infra, 1a-37a) is not reported. JURISDICTION The judgment of the district court (App. B, infra, 39a-40a) was entered on April 12, 1983. An amended judgment (App. C, infra, 41a-43a) was entered on May 9, 1983. The Administrator of the Environmental Protection Agency filed a notice of appeal to this Court on May 10, 1983 (App. D, infra, 44a-46a). On July 1, 1983, Justice Blackmun extended the time for docketing the appeal to August 8, 1983. The jurisdiction of this Court is invoked under 28 U.S.C. 1252. CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The Fifth Amendment to the United States Constitution and the relevant portions of the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. (& Supp. V) 136 et seq. are reprinted in App. E, infra, 47a-57a. QUESTIONS PRESENTED 1. Whether Section 3(c)(1)(D) of the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. (& Supp. V) 136a(c)(1)(D) (which permits applicants to cite and EPA to consider in support of subsequent applications by other companies, health and safety data that were submitted to the government in support of initial applications for pesticide registration), works an unconstitutional taking of property requiring issuance of injunctive relief. 2. Whether 7 U.S.C. (Supp. V) 136a(c)(2)(A) and 7 U.S.C. (& Supp. V) 136h of FIFRA, which require EPA to disclose publicly health and safety data submitted to the agency in support of a pesticide registration application, are beyond Congress's power and constitute an unconstitutional taking of property warranting injunctive relief. 3. Whether the constitutionality of the arbitration scheme established in 7 U.S.C. (Supp. V) 136a(c)(1)(D)(ii) (which provides that an original data submitter or an applicant who cited that data may initiate binding arbitration if the parties fail to agree on the amount of compensation) is ripe for review, and, if so, whether the arbitration provision denies due process or amounts to an unconstitutional delegation of judicial power. STATEMENT 1. This appeal involves a challenge to the constitutionality of key provisions of the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. (& Supp. V) 136 et seq. These provisions govern the Environmental Protection Agency's ("EPA") use of health and safety information submitted to it by an applicant seeking to register a pesticide. The provisions at issue permit EPA to consider, in support of subsequent applications by other companies, health and safety data that were submitted to the government by the initial applicant (the "data consideration" provisions) and require EPA to disclose certain health and safety data to qualifying members of the public (the "data disclosure" provisions). Thus, the only data that are affected in this case relate to health and safety; the case does not involve product formulas or manufacturing processes, which are protected from disclosure by other statutory provisions. Pursuant to FIFRA, pesticide manufacturers normally must obtain a registration from EPA before any pesticide product may be sold in the United States. /1/ A pesticide may be registered if its use will not cause unreasonable adverse effects to the environment (7 U.S.C. (Supp. V) 136a(c)(5)), or, in the case of products similar to those already registered, will not significantly increase the risk of such effects (7 U.S.C. (Supp. V) 136a(c)(7)). EPA's decision whether to register a particular pesticide product depends upon its evaluation of both the usefulness of the product and the dangers presented by its use to human, animal, or plant life. See 7 U.S.C. 136(bb) and 7 U.S.C. (Supp. V) 136a(c)(5)(C)-(D). To carry out is regulatory responsibilities, EPA and its predecessors have required manufacturers to submit a variety of test data in support of applications for registrations. These data define the risks and benefits of the product for which registration is sought, and generally include data on the chemical nature and structure of the pesticide, as well as test data concerning the potential dangers of the product. /2/ As originally enacted in 1947, FIFRA was silent on the question of public disclosure of submitted health and safety data and on the authority to consider such data in support of subsequent applications for the same or similar pesticide by other companies. /3/ In 1972, Congress substantially revised FIFRA and the first time addressed the issue of consideration and disclosure of submitted data. Federal Environmental Pesticide Control Act of 1972 (Pub. L. No. 92-516, 86 Stat. 973 et seq.) ("1972 Amendments"). A new Section 10 (86 Stat. 989) was added governing public disclosure of data submitted in support of applications for registration. This provision allowed applicants to designate portions of submitted data as "trade secrets or commercial or financial information" and it prohibited EPA from publicly disclosing any such information. In addition, Congress added a new Section 3(c)(1)(D) (86 Stat. 979) which provided that any "trade secret" data that could not be publicly disclosed under Section 10 could not be considered in support of another registration application, without the data-submitter's permission. All other data could be considered by EPA, but only if the later applicant offered the original data submitter compensation for its use. The amount of compensation would be determined either through negotiation between the parties, or would be fixed by EPA, subject to judicial review (ibid.). The 1972 Amendments, however, failed to define "trade secrets," and failed to specify an effective date. The latter question was resolved in 1975 when Congress amended Section 3(c)(1)(D) to provide that the consideration provisions applied only to data submitted on or after January 1, 1970. Pub. L. No. 94-140, 89 Stat. 751. /4/ The definition of "trade secret" was left to the EPA Administrator and the courts. EPA maintained that in the 1972 and 1975 Amendments Congress had intended to give trade secret protection to only a narrow range of data -- principally statements of formulas and manufacturing processes. EPA thus concluded that the amendments did not protect health and safety data. Such data, therefore, could be disclosed to the public and could be considered by EPA in support of registration applications. In a series of lawsuits, data-submitting firms challenged EPA's interpretation and obtained several decisions holding that in 1972 Congress had intended the "trade secret" prohibition to apply to any data, including health and safety data, that met the expansive "trade secret" criteria specified in the Restatement of Torts Section 757 (1939). E.g., Chevron Chemical Co. v. Costle, 443 F. Supp. 1024 (N.D. Cal. 1978); Mobay Chemical Corp. v. Costle, 447 F. Supp. 811 (W.D. Mo. 1978). As a result of these decisions, the "trade secret" prohibition in Section 10 operated to bar public access to much of the data on which EPA based its decisions to register pesticides; and the corresponding prohibition in Section 3(c)(1)(D) allowed data-submitters to prevent any other firm from obtaining registrations for products that were the same or substantially the same as previously registered products unless the second firm duplicated the data supporting the first registration or it was determined, after perhaps years of litigation, that particular items of data were not trade secrets. In part because of such "trade secret" controversies, "the process of registering new pesticides simply ground to a halt." Chevron Chemical Co. v. Costle, 499 F. Supp. 732 (D. Del. 1980), aff'd on other grounds, 641 F.2d 104, 111 (3d Cir.), cert. denied, 452 U.S. 961 (1981). /5/ See H.R. Rep. No. 95-663, 95th Cong., 1st Sess. 18 (1977), S. Rep. No. 95-334, 95th Cong., 1st Sess. 3 (1977). Faced with this breakdown in the registration program, Congress, in the Federal Pesticide Act of 1978 ("1978 Amendments"), comprehensively revised the FIFRA data consideration and disclosure provisions, changing both Sections 3(c)(1)(D) and 10. The 1978 Amendments abolished the earlier prohibition (in Section 3(c)(1)(D)) on agency consideration of "trade secret" data because it had operated to discourage small potential competitors from entering the market by requiring them to duplicate health and safety tests for products already established as registrable by data that were contained in EPA's files but were rendered inaccessible by statute. /6/ Congress was concerned that the FIFRA data requirements, in practice, acted as a de facto extension of patents beyond the statutory period of protection. See, e.g., S. Rep. No. 95-334, 95th Cong., 1st Sess. 8, 30-31 (1977). In order to encourage competition and eliminate needless duplicative testing on pesticide chemicals already determined to be safe (see S. Rep. No. 95-334, supra, at 30, 31) Congress established a new and comprehensive registration scheme. The new scheme spreads the costs of developing health and safety data among all beneficiaries of the data while at the same time protecting innovation incentives through exclusive use and compensation provisions (ibid.). Under the 1978 Amendments, applicants are granted a 10-year period of exclusive use for data on new active ingredients contained in pesticides registered after September 30, 1978. Section 3(c)(1)(D)(i), 7 U.S.C. (Supp. V) 136a(c)(1)(D)(i). All other data submitted after December 31, 1969, may be cited and considered in support of another application for 15 years following the original submission, if the applicant offers to compensate the original submitter. Section 3(c)(1)(D)(ii), 7 U.S.C. (Supp. V) 136a(c)(1)(D)(ii). In these instances, the data are not disclosed to the later applicant but are viewed only by EPA personnel. The later applicant, in order to cite the data, must offer to compensate the original submitter; if the parties cannot agree on the amount of compensation, either may initiate binding arbitration proceedings. /7/ Data that do not qualify for either the 10-year period of exclusive use or the 15-year period of compensation may be considered by EPA without limitation. Section 3(c)(1)(D)(iii), 7 U.S.C. (Supp. V) 136a(c)(1)(D)(iii). The 1978 Amendments also added a new provision, Section 10(d) (7 U.S.C. (Supp. V) 136h(d)), that provides for public disclosure of all health and safety data. /8/ This provision was designed to enable members of the public to assess for themselves the hazards posed by pesticide products and to participate in and evaluate EPA's registration decisions. /9/ See, e.g., H.R. Rep. No. 95-663, 95th Cong., 1st Sess. 18 (1977); 123 Cong. Rec. 13097 (daily ed. July 29, 1977) (remarks of Sen. Kennedy). The same section, however, prohibits EPA from disclosing information that would reveal "manufacturing or quality control processes" or certain details pertaining to "deliberately added" inert ingredients unless "the Administrator has first determined that disclosure is necessary to protect against an unreasonable risk of injury to health or the environment." In addition, Section 10(g) generally prohibits EPA from disclosing data to foreign or multinational pesticide producers, unless the original submitter consents. Section 10(g), 7 U.S.C. (Supp. V) 136h(g). 2. In its complaint in the United States District Court for the Eastern District of Missouri, Monsanto sought injunctive and declaratory relief from the operation of the data consideration provision of Section 3(c)(1)(D), 7 U.S.C. (Supp. V) 136a(c)(1)(D), and the disclosure provision of Section 10, 7 U.S.C. (Supp. V) 136h and related Section 3(c)(2)(A), 7 U.S.C. (Supp. V) 136a(c)(2)(A). Monsanto alleged that (1) the data consideration provision, Section 3(c)(1)(D), constitutes a "taking" of property for a private purpose without just compensation, in violation of the Fifth Amendment and (2) the data disclosure provisions, Sections 3(c)(2)(A) and 10, are beyond Congress' Commerce Clause powers and effectuate a taking without just compensation in violation of the Fifth Amendment. Monsanto further contended that the compulsory and binding arbitration scheme provided in Section 3(c)(1)(D)(ii) violates the company's due process rights and constitutes an unconstitutional delegation of judicial power. Following a bench trial, the district court ruled in favor of Monsanto. The court concluded that the data consideration and disclosure provisions of FIFRA are beyond Congress' Commerce Clause powers and constitute an unconstitutional taking of property in violation of the Fifth Amendment. The court held that Monsanto has a state-protected property right (based on the trade secret definition in the Restatement of Torts Section 757 (1939) in the data it submits to EPA, which precludes EPA from considering Monsanto's data in support of another person's registration application or from disclosing the data publicly. Section 3(c)(1)(D), the court concluded, appropriates Monsanto's "fundamental right * * * to exclude" others from use of its property, furthers private rather than public purposes, and operates as an unconstitutional taking of Monsanto's property (App. A, infra, 31a-32a). The Court also found that FIFRA's disclosure provisions (Sections 3(c)(2)(A) and 10) "effectively destroy" Monsanto's property, adding that disclosure is "beyond Congress' regulatory powers" because the public interest is satisfied by EPA's analysis of the pesticide's safety and by the labeling requirements under FIFRA (App. A, infra, 32a-33a). The court further concluded that Congress had withdrawn the Tucker Act remedy to provide Monsanto with "just compensation," on the ground that the compensation and exclusive use provisions of Section 3 (7 U.S.C. (& Supp. V) 136a) "were intended to be the sole compensation for any taking" (App. A, infra, 35a). Finally, the court held that the data-compensation scheme established in Section 3 is unconstitutional because it does not provide "just compensation" and because it denies Monsanto "due process" and amounts to an unconstitutional delegation of judicial power (App. A, infra, 34a). The court recognized that every other court which had considered these issues had held FIFRA constitituional (see page 13, infra) but chose not to follow those decisions (App. A, infra, 36a-37a). The district court enjoined EPA from implementing "in any manner, directly or indirectly," FIFRA Sections 3(c)(1)(D) and 2(A), 10(b) and (d) (App. A, infra, 40a). In addition, it specifically enjoined "any use or consideration of or disclosure to any other person of any of Monsanto's information, research and test data, whenever submitted * * * unless (EPA) shall have first obtained Monsanto's express written permission" (ibid.). Both EPA and Monsanto moved to amend the judgment. EPA sought to clarify that the judgment did not preclude release of Monsanto's health and safety data to other agencies of the federal government or to Congress. EPA also moved for a stay pending appeal to this Court. Monsanto asked the court to add a new paragraph to the judgment specifying that EPA could process registrations for those manufacturers that can generate their own data or obtain the data from another manufacturer. On May 9, 1983, the district court issued an amended judgment that accommodated both EPA's and Monsanto's requests for amendment, but denied EPA's motion for a stay (App. B, infra, 39a-40a). On July 1, 1983. EPA moved in this Court for a stay pending appeal. On July 27, 1983, the stay was denied. Ruckelshaus v. Monsanto Co., No. A-1066 (Blackmun, Circuit Justice). THE QUESTIONS PRESENTED ARE SUBSTANTIAL The district court has declared unconstitutional several key provisions of FIFRA that effectuate Congress' express intent that the pesticide registration program be made more efficient, that competition in the industry be increased, and that the potential hazards of pesticide products be disclosed to the public. The comprehensive scheme created by Congress reflects a careful balance between the need for increased competition and the need for innovation in the pesticide industry. The scheme also accomodates private industry's interest in protecting information and the public's interest in understanding the potential risks and dangers of pesticide products. If the decision below is allowed to stand, numerous safe and effective pesticides (including new uses for pesticides) will not be registered and the public will be deprived of vital information necessary to evaluate properly a pesticide's hazards and EPA's registration decisions. The district court decision is erroneous for several reasons. First, the court all but ignored the well-established principle that "legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality * * * ." Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976). Second, the decision totally disregards Congress' findings concerning the need for more competition in the pesticide industry, greater efficiency in the registration program, and public disclosure. The decision is also inconsistent with the decisions of this Court construing the Commerce Clause and the Fifth Amendment, and conflicts with the prior judicial decisions involving similar challenges to the same statutory provisions. Prior to the decision below, all courts that had ruled on the constitutionality of the data consideration and disclosure provisions had upheld them as a rational means for effectuating Congress' intent. See Mobay Chemical Corp. v. Costle, 517 F. Supp. 252 (W.D. Pa. 1981), aff'd, 682 F.2d 419 (3d Cir.), cert. denied, No. 82-241 (Nov. 8, 1982); Pennwalt Corp. v. Gorsuch, No. 80-2400 (W.D. Pa. July 23, 1982), aff'd as a companion case in Mobay, supra, Chevron Chemical Co. v. Costle, 499 F. Supp. 732 (D. Del. 1980), aff'd on other grounds, 641 F.2d 104 (3d Cir.), cert. denied, 452 U.S. 961 (1981); Petrolite Corp. v. EPA, 519 F. Supp. 966 (D.D.C. 1981). See also Union Carbide Agricultural Products Co. v. Costle, 632 F.2d 1014 (2d Cir. 1980), cert. denied, 450 U.S. 996 (1981) (refusing to preliminarily enjoin operation of Sections 3(c)(1)(D) and 10 pending resolution of Union Carbide's constitutional challenge). /10/ This Court should note probable jurisdiction to review the district court's dubious constitutional rulings, to confirm the validity of Congress' careful scheme to regulate the pesticide industry in the public interest, and to resolve the conflicting decisions of the lower courts. 1. Congress clearly has the power under the Commerce Clause to regulate the pesticide industry in the manner that promotes the public health and welfare. Congress may properly act "to prevent the flow of commerce from working harm to the people of the nation," Mulford v. Smith, 307 U.S. 38, 48 (1939), and may enact broad provisions to aid the accomplishment of these goals. See, e.g., United States v. Darby, 312 U.S. 100, 121 (1941). Courts have consistently found the commerce power broad enough to permit congressional regulations of activities causing potential environmental hazards. Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 282 (1981). In addition, regulation of competition is a long-established and well-developed power of Congress under the Commerce Clause. Bowman Transp. v. Ark.- Best Freight System, 419 U.S. 281, 298 (1974); Northern Securities Co. v. United States, 193 U.S. 197, 337-338 (1904). The challenged provisions of FIFRA are a rational means for effectuating Congress' intent. Section 10 rationally effectuates Congress' interest in minimizing the hazards of pesticide use. Disclosure enables members of the public to assess for themselves the safety and efficacy of pesticide products, many of which are inherently dangerous. Disclosure also enables members of the public to participate in and evaluate EPA's pesticide registration decisions. /11/ The district court's conclusion that "the court cannot fairly say that Section 10's public disclosure provisions are a regulation of commerce" (App. A, infra, 33a) is patently incorrect, particularly in light of the Constitution's "necessary and proper clause." Section 3(c)(1)(D) also rationally effectuates Congress' desire to increase competition in the pesticide industry and to promote an efficient registration program. By removing needless barriers to market entry created by the data submission requirements of FIFRA, Section 3(c)(1)(D) promotes Congress' desire to advance competition. In addition, by reducing the burden of duplicating test data and spreading the cost of testing equitably throughout the industry, by means of the exclusive use and data compensation scheme, Section 3(c)(1)(D) enhances the efficient operation of the registration system. In holding that there is adequate competition in the pesticide industry and that the section therefore "unabashedly operates to further a private purpose" (App. A, infra, 32a), the district court improperly intruded upon the legislative domain. The legislative history fully supports Congress' determination that there is a need for more competition in the pesticide industry. See, e.g., S. Rep. No. 95-334, supra, at 3, 8, 31. Accordingly, the court was not free to substitute its judgment for Congress' finding of public need. Hodel v. Indiana, 452 U.S. 314, 326 (1981). Moreover, because the Act serves a valid public purpose, the fact that private persons may also derive benefit is irrelevant. Berman v. Parker, 348 U.S. 26, 32 (1954). 2. The district court's conclusion that Sections 3(c)(1)(D) and 10 of FIFRA constitute a taking of Monsanto's property without just compensation is also erroneous. These sections deal only with health and safety data. Thus, subsequent applicants relying on Section 3(c)(1)(D) to obtain a registration must still provide the agency with their own formulas and manufacturing processes. Section 10 prevents the disclosure of formulas and manufacturing processes in most instances. The district court correctly recognized that there is nothing in federal law that precludes the government from using the health and safety data voluntarily submitted by Monsanto to further the government's regulatory responsibilities (App. A, infra, 29a). The court determined, however, that Monsanto has a state-protected right based on the Restatement of Torts Section 757 (1939) (App. A, infra, 29a), which precludes government use. /12/ We do not dispute that while the data remained exclusively in Monsanto's hands any trade secrets contained in the data were protected by state law. Monsanto could have preserved any trade secret in its health and safety data by foregoing the opportunity to seek a registration. It could have decided to sell or license the health and safety data to others. Monsanto, however, chose to disclose that data to EPA in exchange for commercially valuable pesticide registrations. Once Monsanto made the decision to obtain a valuable registration, the company accepted the conditions for obtaining the registration. Cf. Almeida-Sanchez v. United States, 413 U.S. 266, 271 (1973) ("The businessman in a regulated industry in effect consents to the restrictions placed upon him."). It follows that Monsanto does not retain any state law right that interferes with Congress' authority to direct EPA to make internal use of data submitted to it or to disclose to the public health and safety data relevant to potential hazards posed by a pesticide. Any continuing right to confidentiality in the data submitted by Monsanto to EPA is solely a matter of federal law. /13/ Chevron Chemical Co. v. Costle, supra, 641 F.2d at 116; Mobay Chemical Corp. v. Gorsuch, supra, 682 F.2d at 423. Even if it were true that Monsanto retained a state property right in the data it voluntarily submitted to EPA, Monsanto failed to demonstrate any taking of its property by virtue of EPA's internal consideration and restricted disclosure of the health and safety data to achieve the public purposes described above. In deciding whether a particular governmental action has effected a taking, this Court focuses "both on the character of the action and on the nature and extent of the interference with rights in the (property) as a whole." Penn Central Transp. Co. v. New York City, 438 U.S. 104, 130-131 (1978). Among the factors to be considered are whether the "interference with property can be characterized as a physical invasion by government," and "the extent to which the regulation has interfered with distinct investment-backed expectations." 438 U.S. at 124. Under the principles established by this Court, a taking is "more readily * * * found when the interference with property can be characterized as a physical invasion by government * * * than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good." Ibid. In addition, a taking is more readily established where the government regulation destroys all property rights or renders the plaintiff unable to derive any economic benefit from the property. Andrus v. Allard, 444 U.S. 51, 65-67 (1979). "(T)he denial of one traditional property right does not always amount to a taking. * * * (W)here an owner possesses a full 'bundle' of property rights, the destruction of one 'strand' of the bundle is not a taking, because the aggregate must be viewed in its entirety." Id. at 65-66. Tested by these principles, Monsanto has failed to establish a taking. Here, of course, there is no "physical invasion" of Monsanto's property. In fact, the operation of Section 3(c)(1)(D) and 10 does not in any way restrain or preclude Monsanto from using its data. The district court specifically found that not only does Monsanto obtain a valuable registration for its data, but it may use the data to develop new products or new uses for old products, to advertise and market its products, to obtain additional domestic and foreign registrations, to defend claims against its products, and to enhance its reputation in the scientific community (App. A, infra, 18a, 21a, 23a). The district court erred in concluding that Section 3(c)(1)(D) causes a taking because it appropriates Monsanto's fundamental right "to exclude others" from its data. Interference with the right to exclude does not by itself constitute a taking. PruneYard Shopping Center v. Robins, 447 U.S. 74, 84 (1980). The "right to exclude" is merely one "strand" in Monsanto's "bundle" of rights. Since Monsanto retains significant rights in its data (App. A, infra, 18a, 21a, 23a), this limited interference does not constitute a taking. 447 U.S. at 84. At most, the data consideration provisions may result in competition and a concomitant reduction in profits. However, "loss of future profits -- unaccompanied by any physical property restriction -- provides a slender reed upon which to rest a takings claim." Andrus v. Allard, supra, 444 U.S. at 66. This is particularly true here, where Monsanto retains its primary sources of competitive advantage, including its product and use patents, its advertising and marketing techniques, and lead-time advantages not related to data development (App. A, infra, 18a-21a, 23a). Moreover, Congress did not eliminate all protection for Monsanto's data. Monsanto retains a 10-year exclusive use for data submitted on any new active ingredient registered after 1978 and is entitled to compensation for use of other data submitted after 1969 for a 15-year period. The provision of valuable replacement rights mitigates the burden of the government action and must also be taken into account in considering the impact of regulation. Penn Central, supra, 438 U.S. at 137. The present statutory scheme, designed to promote efficiency and competition while preserving innovation, is a reasonable legislative response for which the principles of "justice and fairness" embodied in the Fifth Amendment do not require compensation. See Agins v. City of Tiburon, 447 U.S. 255, 262-263 (1980); Andrus v. Allard, supra, 444 U.S. at 66. Similarly, the limited interference with Monsanto's property caused by Section 10, the public disclosure provision, does not constitute a taking. As demonstrated by the district court's findings, the data at issue were "generated primarily for registration purposes" without regard to disclosure (App. A, infra, 21a). In fact, Monsanto has continued and accelerated its research and development efforts despite the 1978 enactment of the disclosure requirements of FIFRA (ibid.). It is therefore clear that disclosure does not destroy Monsanto's ability to earn a reasonable return on its investment; nor does disclosure significantly impair Monsanto's "investment-backed expectations." Furthermore, this Court has upheld similar schemes providing for releases to the public of commercially valuable information to further a legitimate public purpose. Corn Products Refining Co. v. Eddy, 249 U.S. 427, 431 (1919); National Fertilizer Ass'n v. Bradley, 301 U.S. 178 (1937). The Court stated in Corn Products that a "manufacturer or vendor has no constitutional right to sell goods without giving to the purchaser fair information of what it is that is being sold." /14/ 249 U.S. at 431. Finally, the 1978 Amendments did not eliminate all protection from disclosure of Monsanto's data. Formulas and manufacturing processes are protected in most instances and EPA ordinarily may not disclose any data to multinational pesticide companies without the submitter's consent. Section 10(g), 7 U.S.C. (Supp. V) 136(g). These measures attenuate even further Monsanto's taking claim. In sum, Section 10 strikes a careful balance between industry's interest in proprietary information and the public's interest in evaluating the risks and dangers inherent in pesticide use. /15/ Although Section 10 may adjust Monsanto's rights in its property, it does not destroy the property. Monsanto retains significant rights in its data. Thus, while Monsanto may bear some burden by virtue of this regulation, it is a burden borne to secure "'the advantage of living and doing business in a civilized community.'" Andrus v. Allard, supra, 444 U.S. at 67, quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 422 (1922) (Brandeis, J., dissenting). 3. Finally, even if operation of Section 3(c)(1)(D) or Section 10 would cause a "taking" of Monsanto's property, Monsanto is not entitled to injunctive relief. A taking will be enjoined as unconstitutional only if it has not been duly authorized, if it serves no public purpose, or if the owner will be denied just compensation for the property taken. See, e.g., Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 94 n.39 (1978); Regional Rail Reorganization Act Cases, 419 U.S. 102, 126-127 & n.16 (1974). Under these standards, the district court erred in concluding that Sections 3(c)(1)(D) and 10 are unconstitutional as a violation of the Fifth Amendment. First, there can be no dispute that EPA's consideration and disclosure of Monsanto's data are duly authorized by Sections 3(c)(1)(D) and 10. Second, as demonstrated above, both sections serve important public purposes. Finally, even if the statute operated to effect a "taking," Monsanto would have an adequate remedy for seeking just compensation under the Tucker Act, 28 U.S.C. 1291. See Chevron Chemical Co. v. Costle, 499 F. Supp. 732, 742-743 (D. Del. 1980), aff'd on other grounds, 641 F.2d 104 (3d Cir.), cert. denied, 452 U.S. 961 (1981); Union Carbide, supra, 632 F.2d at 1019. The district court's conclusion that Sections 3 and 10 are unconstitutional because Congress withdrew the Tucker Act remedy in FIFRA is unsupported. The critical question in determining the applicability of the Tucker Act is "not whether the (challenged statute) expresses an affirmative showing of congressional intent to permit recourse to a Tucker Act remedy * * * ," but rather whether Congress had "withdrawn the Tucker Act grant of jurisdiction to the Court of Claims to hear a suit involving the (challenged statute) 'founded * * * upon the constitution.'" Regional Rail Reorganization Act Cases, supra, 419 U.S. at 126; emphasis in original. There is no indication in the language or legislative history of the 1978 Amendments to FIFRA that Congress intended to withdraw the Tucker Act remedy. Consequently, there is no basis for the district court's conclusion that the exclusive use and compensation provisions of Section 3(c)(1)(D) were intended to be "the sole compensation" for the operation of Sections 3 and 10. /16/ The exclusive use and compensation provisions were meant to provide incentive for innovation and to spread the costs of producing registration data among all the beneficiaries of such data. The mere provision of exclusive use periods and a compensation scheme does not alone support the conclusion that the Tucker Act remedy has been withdrawn. In the Regional Rail Reorganization Act Cases, this Court rejected a similar contention. 419 U.S. at 127-128. Thus, even if Sections 3(c)(1)(D) and 10 result in a taking of Monsanto's property, the district court erred in declaring them unconstitutional and enjoining their implementation. Regional Rail Reorganization Act Cases, supra, 419 U.S. at 102. 4. In addition to finding the data consideration and disclosure provisions unconstitutional, the district court found the data compensation scheme unconstitutional on the grounds that the binding arbitration scheme does not afford Monsanto just compensation and constitutes a denial of due process in violation of the Fifth Amendment. The court also held that the scheme impermissibly "delegates judicial power to determine property rights disputes without the necessary prerequisites of Article III of the Constitution" (App. A, infra, 34a-35a). These issues are not ripe for judicial review and should not have been reached by the district court because Monsanto has not been a party to any arbitration under the section. Babbitt v. United Farm Workers National Union, 442 U.S. 289 (1979). Moreover, these arguments are all without merit. First, as discussed above, the intra-industry compensation scheme was not meant to provide Monsanto "just compensation" within the meaning of the Fifth Amendment, since no taking requiring compensation has occurred. Second, this Court has consistently upheld, against due process claims, the constitutionality of statutes with mandatory arbitration provisions. See Andrews v. Louisville & Nashville R.R., 406 U.S. 320, 322 (1972); Walker v. Southern Ry., 385 U.S. 196, 198 (1966); Hardware Dealers Mutual Fire Insurance Co. v. Glidden Co., 284 U.S. 151 (1931). See also Country-Wide Insurance Co. v. Harnett, 426 F. Supp. 1030 (S.D.N.Y.) (three-judge court), aff'd without opinion, 431 U.S. 934 (1977). Courts regularly have upheld such arbitration requirements against claims that they provide for the determination of certain rights by nonjudicial bodies with only limited judicial review. See Crane v. Hahlo, 258 U.S. 142 (1922); Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123 (3d Cir. 1969); Edwards v. St. Louis-San Francisco R.R., 361 F.2d 946 (7th Cir. 1966). See also Switchmen's Union v. National Medication Bd., 320 U.S. 297, 300-301 (1943). Contrary to the district court's holding (App. A, infra, 34a-35a), the arbitration scheme in Section 3(c)(1)(D) does not amount to an unlawful delegation of judicial power without the prerequisites of Article III. The district court's reliance on Northern Pipeline Construction Co. v. Marathon Pipe Line Co., No. 81-150 (June 28, 1982), is misplaced. In contrast to the 1978 Bankruptcy Act, FIFRA does not vest arbitrators with the authority to adjudicate common law disputes or any rights other than those established solely by Section 3(c)(1)(D) itself. As the plurality opinion in Northern Pipeline states (slip op. 33; footnote omitted): (W)hen Congress creates a statutory right, it clearly has the discretion, in defining that right, to create presumptions, or assign burdens of proof, or prescribe remedies; it may also provide that persons seeking to vindicate that right must do so before particularized tribunals created to perform the specialized adjudicative tasks related to that right. Finally, even if this Court were to resolve the Article III issue in Monsanto's favor, that would not justify enjoining the entire Section 3(c)(1)(D), but only the limitation on judicial review in the fourth sentence of Section 3(c)(1)(D)(ii). See 2 C. Sands, Sutherland Statutory Construction Section 44.04 (4th ed. 1973); Section 30, 7 U.S.C. (Supp. V) 136x (severability). CONCLUSION Probable jurisdiction should be noted. Respectfully submitted REX E. LEE Solicitor General ANTHONY C. LIOTTA Acting Assistant Attorney General LAWRENCE G. WALLACE Deputy Solicitor General JERROLD J. GANZFRIED Assistant to the Solicitor General ANNE S. ALMY NANCY B. FIRESTONE Attorneys A. JAMES BARNES Acting General Counsel EDWARD C. GRAY MARCIA E. MULKEY ROBERT S. McLAUGHLIN Attorneys Environmental Protection Agency AUGUST 1983 /1/ When EPA registers a pesticide product under FIFRA, it approves the composition and labeling for that product and allows that product to be sold for the approved labeling use. A label must contain: (1) general information such as the name of the manufacturer, and type of product and the registration number; (2) hazard statements; (3) directions for use; and (4) limitations on use (App. A, infra, 7a). /2/ The health and safety data required for registration consist of the following major types of studies: (1) acute toxicity studies, which define how poisonous the pesticide is when ingested, inhaled, or applied to the skin or eyes; (2) chronic toxicity studies, which are used to determine if chronic exposure to the pesticide will have any long-term health effects such as causing cancer or birth defects; (3) residue studies, which define the level of the pesticide and its degradation products which remain in the food; (4) environmental chemistry studies, which are used to determine how much of the pesticide and its degradation products remain in the environment after application; and (5) fish and wildlife studies, which define how toxic the pesticide is to fish and wildlife which may be exposed to the pesticide after application in the environment (App. A, infra, 17a). See 47 Fed. Reg. 53192-53221 (1982). /3/ Under the original Act and until 1970, registration were granted by the United States Department of Agriculture ("USDA"). In 1970, EPA assumed responsibility for registrations. 7 U.S.C. 136a. The Federal Insecticide, Fungicide, and Rodenticide Act of 1947 did not prohibit USDA from considering relevant data supplied to it by one applicant to support the applications of other companies, and USDA did not require applicants to duplicate tests already in USDA's files. The Act also contained no prohibition against public disclosure of data submitted in support of a registration (including health and safety data). It did, however, specifically prohibit disclosure of product formulas (7 U.S.C. (1970 ed.) 135a(c)(4) and 135f(c)). /4/ Section 3(c)(1)(D), as amended in 1975, was challenged by an original data submitter on the ground that Section 3(c)(1)(D) caused an unconstitutional taking of its property rights in the data it had submitted prior to January 1, 1970. This claim was rejected by a three-judge court, which held that Section 3(c)(1)(D) did not "take" any property rights. Mobay Chemical Corp. v. Costle, 12 E.R.C. 1572 (W.D. Mo. 1978). A direct appeal to this Court under 28 U.S.C. 1253 was dismissed on the ground that the three-judge court had been improperly convened. 439 U.S. 320 (1979). /5/ See generally Schulberg, The Proposed FIFRA Amendments of 1977: Untangling the Knot of Pesticide Registration, 2 Harv. Envtl. L. Rev. 342 (1977). /6/ Most of the pesticide products for which registration is sought contain active ingredients that are also contained in previously registered products. Because the first registrant(s) of products containing a particular active ingredient normally will have supplied substantial amounts of health and safety data, EPA's files contain much data relevant to subsequent decisions whether to register other products containing the same ingredient. As the district court found, most of the testing and research is done by a few, relatively large firms, of which Monsanto is one (App. A, infra, 4a). /7/ The decision of the arbitrator may be overturned for "fraud, misrepresentation, or other misconduct." 7 U.S.C. (Supp. V) 136a(c)(1)(D)(ii). /8/ Under Section 10(d)(1), 7 U.S.C. (Supp. V) 136h(d)(1), EPA must, on request, disclose to qualified requestors "(a)ll information concerning the objectives, methodology, results, or significance of any test or experiment performed on or with a registered or previously registered pesticide or its separate ingredients, impurities, or degradation products, and any information concerning the effects of such pesticide on any organism or the behavior of such pesticide in the environment, including, but not limited to, data on safety to fish and wildlife, humans and other mammals, plants, animals, and soil, and studies on persistence, translocation, and fate in the environment, and metabolism." /9/ Because of the health and safety significance of the data submitted in support of an application for a pesticide registration, EPA often receives requests for access to this information from environmental organizations interested in protecting man and the environment from the adverse effects of these pesticide chemicals, from farm worker unions that serve to protect the interest of farmworkers who are directly exposed to the pesticides used in the fields where they work, and from union groups that represent the chemical workers who manufacture pesticides. Moreover, FIFRA specifically provides for public participation in EPA's decision-making process. Members of the public may petition EPA to take regulatory action. See 7 U.S.C. (& Supp. V) 136a. They may comment in rule-making proceedings and on other regulatory actions. See, e.g., 7 U.S.C. 136a(b). And, they may petition for the commencement of, and participate in, administrative hearings to cancel or deny a pesticide registration. See, e.g., 7 U.S.C. 136d(d); 40 C.F.R. 164.31. /10/ Subsequent to the decision in the present case, the district court in Union Carbide upheld the constitutionality of Section 10 and found the arbitration scheme to be an unconstitutional delegation of judicial authority. It did not otherwise rule on the data consideration provisions of Section 3 and has not yet entered a remedial order. Union Carbide Agricultural Products Co. v. Ruckelshaus, No. 76 Civ. 2913(RO) (S.D.N.Y. July 28, 1983). /11/ See generally McGarity & Shapiro, The Trade Secret Status of Health and Safety Testing Information: Reforming Agency Disclosure Policies, 93 Harv. L. Rev. 837 (1980). /12/ Significantly, under Missouri law a trade secret does not last into perpetuity. Missouri has adopted the "head start" rule which provides that a trade secret lasts for only "'(t)hat period of time which would have been required by defendants to reproduce plaintiff's products without wrongful appropriation.'" Carboline Co. v. Jarboe, 454 S.W.2d 540, 552-553 (Mo. 1970). The exclusive use period mechanism adopted in FIFRA is essentially a "head start" rule, and thus provides Monsanto with the same and perhaps even greater protection than it is entitled to under state law. /13/ Moreover, where, as here, Congress has specifically authorized EPA to consider and disclose health and safety data, the suggestion that the federal government's use of such data is limited by state law contravenes the Supremacy Clause. See Hancock v. Train, 426 U.S. 167, 179-180 (1976). /14/ The district court's conclusion that the public does not need disclosure because of FFFRA's labeling requirements is unsupported. First, the court itself noted that the labels do not contain complete information (App. A, infra, 24a). Second, the court may not ignore Congress' determination that full disclosure health and safety data is necessary to protect the public health and to enable full public participation in the registration process. Hodel v. Indiana, supra, 452 U.S. at 326. As noted above, many groups such as farm workers, chemical workers, and environmental groups request these data from EPA and retain scientists to review such data. This Court has recognized the propriety and, indeed, the desirability of obtaining public input by making information on regulatory decisions available to the public. See, e.g., FCC v. Schreiber, 381 U.S. 279 (1965); Utah Fuel Co. v. National Bituminous Coal Comm'n, 306 U.S. 56, 60-62 (1939). /15/ A similar balance has been struck in a great number of federal statutes that authorize or require public disclosure of information submitted by private firms to the government. In particular, many federal statutes provide for disclosure of allegedly "trade secret" information concerning potential hazards to public health. For example, notwithstanding trade secrecy claims, the Toxic Substances Control Act requires public disclosure of "health and safety data" concerning chemical substances and mixtures distributed in commerce (except for manufacturing processes and some formula information), 15 U.S.C. 2613(b); the Clean Air Act requires disclosure of "emission data," 42 U.S.C. (Supp. V) 7607(a)(1); the Federal Water Pollution Control Act requires disclosure of "effluent data," 33 U.S.C. 1319(b); and the Safe Drinking Water Act requires disclosure of all data concerning drinking water contaminants, 42 U.S.C. 300j-4(d). See also 42 U.S.C. 263g(d), requiring disclosure of trade secret data concerning radiation emissions from electronic products such as microwave ovens; 42 U.S.C. 5413(c)(5), requiring disclosure of trade secret data concerning safety-related defects in mobile homes; 46 U.S.C. 1464(d), authorizing disclosure of trade secret information regarding safety defects in boats and boating equipment; and 15 U.S.C. 2217, authorizing trade secret fire protection information to be disclosed when "necessary in order to protect health and safety." /16/ The district court further erred in suggesting that the Tucker Act remedy is not available because "(n)o monies were allocated by the government to insure that adequate compensation would occur" (App. A, infra, 36a). Such an appropriation is not customary and is in no way a prerequisite to jurisdiction of the Claims Court under the Tucker Act. As this Court stated in Yearsley v. W. A. Ross Construction Co., 309 U.S. 18, 21 (1940), "if the authorized action * * * does constitute a taking of property for which there must be just compensation under the Fifth Amendment, the Government has impliedly promised to pay that compensation and has afforded a remedy for its recovery by a suit in the Court of Claims." Finally, the district court's view (App. A, infra, 36a) that the Tucker Act is not an adequate remedy because FIFRA works an "immediate taking of Monsanto's property as of the passage of the amendments to FIFRA" is unfounded. Obviously, if any taking occurs it occurs only when EPA actually considers Monsanto's data or discloses the data publicly. FIFRA itself does not automatically confiscate Monsanto's data. FIFRA merely provides for EPA's consideration and disclosure of the data under specified circumstances. Moreover, to the extent the district court's holding rests on concern that compensation, if required, will not precede the alleged "taking," the holding has no merit. The Fifth Amendment does not require that compensation precede the taking. Hurley v. Kincaid, 285 U.S. 95, 104 (1932). Appendix Omitted