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“EPA’s Supplemental Distribution
Enforcement Actions Are Buzzing:
How to Avoid Getting Stung”
Webinar
July 23, 2014
1:00 p.m. (EDT)
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E PA’ s E n f o r c e m e n t E f f o r t s R e g a r d i n g
FIFRA Supplemental Distribution and How
to Avoid Noncompliance
Webinar, July 23, 2014
1:00 p.m. – 1:45 p.m. Presentation
1:45 p.m. – 2:00 p.m. Q&A
Lisa M. Campbell, Lisa R. Burchi, Sheryl L. Dolan
Bergeson & Campbell, P.C.
Washington, D.C.
www.lawbc.com
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
Jon Jacobs
Jacobs Stotsky PLLC
Washington, D.C.
www.jacobsstotsky.com
SPEAKERS:
Lisa Burchi
B&C®
Lisa Campbell
B&C®
Sheryl Dolan
B&C®
Jon Jacobs
Jacobs Stotsky
Lisa M. Campbell, Lisa R. Burchi, Sheryl L. Dolan
Bergeson & Campbell, P.C.
Washington, D.C.
www.lawbc.com
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
Jon Jacobs
Jacobs Stotsky PLLC
Washington, D.C.
www.jacobsstotsky.com
E PA’ s E n f o r c e m e n t E f f o r t s R e g a r d i n g
FIFRA Supplemental Distribution and How
to Avoid Noncompliance
Background Information and Basic
Requirements
Lisa R. Burchi
Lisa M. Campbell, Lisa R. Burchi, Sheryl L. Dolan
Bergeson & Campbell, P.C.
Washington, D.C.
www.lawbc.com
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
Jon Jacobs
Jacobs Stotsky PLLC
Washington, D.C.
www.jacobsstotsky.com
Background

Authority: Federal Insecticide, Fungicide, and Rodenticide
Act (FIFRA) Section 3(e) and U.S. Environmental
Protection Agency (EPA) regulations at 40 C.F.R. §
152.132

Allows a registrant to distribute or sell its registered product
under another person’s name and address instead of (or in
addition to) its own without a separate FIFRA Section 3
registration

Terms

Distribution/sales arrangement is referred to as “supplemental
distribution” or “sub-registration”

Product is referred to as a “supplemental registration” or
“distributor product”

Non-registrant selling a registrant’s product is a “supplemental
distributor” or “sub-registrant”
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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N o t i f y i n g E PA o f a S u p p l e m e n t a l
Distribution Arrangement

Straightforward process -- Submit Notice of Supplemental
Distribution of a Registered Pesticide Product (EPA Form
8570-5)

Distributor products and labels not reviewed or approved
by EPA

Website of supplemental distributor products -- Pesticide
Product Information System -- available at
http://www.epa.gov/pesticides/PPISdata/
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Requirements for a Distributor
Product -- Production Overview

The distributor product must meet the following criteria
regarding production:

Same composition

Produced in registered establishment owned/operated by
registrant or under contract with registrant

Remain in registrant’s unbroken container
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Requirements for a Distributor
Product -- Labeling Overview

The distributor product must meet the following criteria
regarding labeling:

Bear proper registration number (example: 98765-010-4321)

Include distributor name and address if properly qualified

Allowed to have different product name

Bear final establishment number (example: 4321-CA-001)

Have same claims as registrant’s label (specific claims may be
deleted provided no other changes to the label are necessary)
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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State Registration of Distributor
Products

States can require registrations of supplemental distributor
products

Consider every state in which the product could be
distributed

Registrations can be required for different brand names
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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C a n c e l l a t i o n , Te r m i n a t i o n , a n d
Tr a n s f e r s

Cancellation of a registrant’s product applies equally to
distributor product

Registrant must notify EPA in writing if it terminates a
supplemental distributor relationship or if a supplemental
distributor product’s brand name is being removed or changed

If a registrant transfers its registered pesticide product to
another company, supplemental distributor products do not
transfer automatically -- new EPA Form 8570-5 needed

In these cases, burden on registrant to inform distributor of
cancellation, termination, and transfers
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’ s E n f o r c e m e n t E f f o r t s R e g a r d i n g
FIFRA Supplemental Distribution and How
to Avoid Noncompliance
Supplemental Registration: The
Development of an EPA Enforcement
Priority
Jon Jacobs
Lisa M. Campbell, Lisa R. Burchi, Sheryl L. Dolan
Bergeson & Campbell, P.C.
Washington, D.C.
www.lawbc.com
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
Jon Jacobs
Jacobs Stotsky PLLC
Washington, D.C.
www.jacobsstotsky.com
E PA’s E n f o r c e m e n t P r o g r a m
OECA’s organizational structure and major responsibilities
of each office
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Distinctions between Civil and
Criminal Enforcement



Administrative and civil judicial enforcement

Strict liability

Burden of proof: Preponderance of the evidence

Results: Civil penalties, injunctive relief, supplemental
environmental projects
Criminal enforcement

Knowing and intentional violations

Burden of proof: Beyond a reasonable doubt

Results: Incarceration, criminal fines, restitution, asset forfeiture,
suspension and debarment, and conditions of probation
EPA policy encourages “Parallel Proceedings”
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’s S t r a t e g i c P l a n n i n g P r o c e s s

The FY 2014 - 2018 Strategic Plan: Five Strategic
Goals

Goal 4: Ensuring the safety of chemicals and preventing pollution

Goal 5: Protecting human health and the environment by
enforcing laws and assuring compliance
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’s N a t i o n a l P r o g r a m M a n a g e r s
Guidance (NPMG)

FY 2014 OECA NPMG issued in June 2013; began in
October 2012

Followed extensive negotiations with program offices,
regions, states, local agencies, and tribal governments

Goals: Protect the Nation’s environmental and public health;
provide a level playing field for responsible businesses

Accomplished under EPA’s Strategic Plan Goal 5
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’s N a t i o n a l P r o g r a m M a n a g e r s
Guidance (NPMG) (cont’d)

Focus on where significant
environmental risk and
noncompliance patterns are known
to exist or where there are
important opportunities to improve
performance

One “National Area of Focus” is Next Generation
Compliance

Then there is “Program Specific Guidance” for specific
programs not addressed as a National Area of Focus,
including the FIFRA compliance and enforcement program
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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FY 2014 NPMG for FIFRA
Supplemental Registrations

NPMG states “EPA will generally prioritize its compliance
monitoring activities based on risk to human health and the
environment,” including:

Registration and labeling

Compositional integrity

Producing establishment registration and reporting

Imports
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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FY 2014 NPMG for FIFRA
Supplemental Registrations
(cont’d)

Regions, working with states and tribes, should participate
in “3 FIFRA Focus Areas,” including supplemental
registrations
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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FY 2014 NPMG for FIFRA
Supplemental Registrations
(cont’d)

EPA states:
“Supplemental pesticide registrations are a continued source
of concern for regulators across the country. States, which
conduct thousands of marketplace inspections each year,
have raised concerns over supplemental or distributor
products labels, citing them as a major source of
noncompliance.”
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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FY 2014 NPMG for FIFRA
Supplemental Registrations
(cont’d)

EPA will scrutinize registrants with a large number of
current supplemental registrations and registrants
marketing high-risk Tox 1 and Restricted Use Pesticide
(RUP) category distributor products, as well as
unregistered, cancelled, or suspended pesticide products

Not a National Enforcement Initiative for FY 2014-2016
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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H o w E PA Ta r g e t s A l l e g e d V i o l a t o r s

EPA determines distributor product
compliance by reviewing labeling,
product chemistry, and contract manufacturing
agreement(s) that should be in place

EPA regions will conduct inspections to monitor for
label/labeling compliance, product composition,
production, and packaging


Rely on personal experience, referrals, and database
searches

Example: Review agreements in jacket and then
compare production reported in the Section 7 database
by the registrant and the supplemental distributor
States are encouraged to participate by referring cases
involving noncompliant distributor products and sample
labels obtained as part of the state product registration
process
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’s E n f o r c e m e n t P r o c e s s
Encourages Proactive Compliance
Programs

The NPMG and 2009 Enforcement Response Policy
encourage EPA taking enforcement actions, as appropriate, to
ensure optimum deterrence

Office of Civil Enforcement’s Waste and Chemical
Enforcement Division and regions emphasize developing
corporate-wide cases

Enforcement options range from Notices of Warning to Stop
Sale, Use, or Removal Orders (SSURO) to civil
administrative penalties to criminal prosecutions

Most enforcement cases are civil in nature and the penalty is
determined by a seven-step process considering the
appropriateness of the penalty to the size of the business,
proposed penalty’s impact on ability to continue in business,
and gravity of the violations
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’s E n f o r c e m e n t P r o c e s s
Encourages Proactive Compliance
Programs (cont’d)
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’s E n f o r c e m e n t P r o c e s s
Encourages Proactive Compliance
Programs (cont’d)

EPA will pursue enforcement actions against registrants and
distributors for sale and distribution of unregistered, cancelled,
and/or misbranded pesticides, composition differs, production from
an unregistered establishment, and illegal importation

EPA’s 2000 Voluntary Disclosure Policy
encourages self-auditing, prompt
disclosure, and timely correcting violations

Benefits include reduction of the civil penalty
and not to recommend criminal prosecution
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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E PA’ s E n f o r c e m e n t E f f o r t s R e g a r d i n g
FIFRA Supplemental Distribution and How
to Avoid Noncompliance
Steps to Stay Compliant
Sheryl L. Dolan
Lisa M. Campbell, Lisa R. Burchi, Sheryl L. Dolan
Bergeson & Campbell, P.C.
Washington, D.C.
www.lawbc.com
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
Jon Jacobs
Jacobs Stotsky PLLC
Washington, D.C.
www.jacobsstotsky.com
Compliance Responsibilities and
Liabilities

Distributor is an agent of the registrant

Both the registrant and the distributor may be held
liable for violations

Both the registrant and the distributor must take steps
to ensure compliance
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Av o i d i n g N o n c o m p l i a n c e - - I s s u e s
Common to Registrants and
Distributors

Since registrants and supplemental distributors
are equally liable, both parties must actively take
steps regarding:

Compliance programs

Appropriate contracts addressing compliance and liability
issues

Reporting and
recordkeeping
“You haven’t said anything for ten years. Is everything O.K.?”
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Av o i d i n g N o n c o m p l i a n c e - Particular Issues for Registrants
 Registrants must:

Be aware of what supplemental distributors are
doing

Routinely inform supplemental distributors of
changes to product label

Ensure proper communication to supplemental
distributors regarding cancellations and transfers
“What we have here is a failure to communicate.”
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Av o i d i n g N o n c o m p l i a n c e - Particular Issues for Supplemental
Distributors

Supplemental distributors must:

Understand the applicable requirements, their responsibilities,
and particularly their limitations

Establish a program to ensure they are informed if the registrant
amends the EPA-approved label and that corresponding
changes are made to the supplemental distributor label

Implement training protocol or
program to ensure compliance
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Av o i d N o n c o m p l i a n c e - - M e e t i n g
Requirements Regarding Product
Name

Supplemental distributor may use the same product
name as the registered product

A distributor product can have multiple or alternate
brand names

Companies must inform EPA and states of all brand
names (and states can require separate registrations
for different brand names)
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Av o i d i n g N o n c o m p l i a n c e - A c c u r a c y o f E PA D a t a b a s e a n d
Recordkeeping
 Companies should review EPA database to
make sure that submissions to EPA are
properly reflected

Registrants and supplemental distributors
should keep copies of the following:

All correspondence, including e-mail, regarding the
supplemental distributor product

The Distribution Agreement

The completed EPA Form 8570-5 and delivery
receipt
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Av o i d i n g N o n c o m p l i a n c e - Understanding Difference between
S u p p l e m e n t a l D i s t r i b u t o r s a n d To l l
Manufacturers

Potential pitfall regarding where and how distributor
product is produced

There must be contractual privity between registrant
and formulator producing distributor product
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Av o i d i n g N o n c o m p l i a n c e - Contracts

Contracts are required between the registrant and the
producer for the supplemental distributor

Contracts are not required between registrants and
supplemental distributors, but such contracts can
cover important issues, for example:

Liability and indemnity

Review and approval of distributor product’s label

Existing stocks provisions
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
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Q&A -- The phone lines will now be opened for your
questions
Lisa Burchi
B&C®
Lisa Campbell
B&C ®
Sheryl Dolan
B&C ®
Jon Jacobs
Jacobs Stotsky
Lisa M. Campbell, Lisa R. Burchi, Sheryl L. Dolan
Bergeson & Campbell, P.C.
Washington, D.C.
www.lawbc.com
© 2014 Bergeson & Campbell, P.C. All Rights Reserved.
Jon Jacobs
Jacobs Stotsky PLLC
Washington, D.C.
www.jacobsstotsky.com
THANK YOU
For further information, please contact
Lisa Campbell
(202) 557-3802
[email protected]
B&C ® professionals have substantial experience
in the law, regulation, and policy
of products implicated under FIFRA.
We would be pleased to be of assistance.
www.lawbc.com
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