California's Data Reliance: Rules in Litigation

James P. Rathvon
Piper & Marbury

The boiling controversy over California’s data reliance rules for registration of generic pesticides just got more heated. Over the past year or so, two law suits have been filed by pesticide data owners in state court in Los Angeles, California, seeking, inter alia, to enjoin or rescind the issuance by the California Department of Pesticide Regulation (DPR) of registrations for generic pesticides. In these suits, Syngenta Crop Protection Inc. v. Helliker (Director of DPR) and Gustafson, LLC et al. (Real Parties in Interest), Case No. BC-253673, and Dow Agrosciences, LLC v. Helliker and Nations Ag II et al., Case No. BS-078342, the data owners have contended that DPR’s policies for granting generic registrations violate California law. In particular, whereas DPR currently requires generic applicants to satisfy a significant but still limited set of data requirements (e.g., residue chemistry, acute toxicity, and certain ecotoxicity studies), Syngenta and Dow Agrosciences contend that DPR must require generic applicants to satisfy all of the same data requirements as imposed for the original registration of the pesticide, either by obtaining a “letter of authorization” from the data owner permitting the generic applicant to rely on those data, or by duplicating the entire database. A motion to consolidate these two cases – which are still in the early stages of discovery – is currently pending before the court.

Into this fray has stepped the Chemical Producers and Distributors Association (CPDA), a national trade association representing the interests of generic pesticide producers and distributors, and Ensystex, Inc., a generic pesticide company. On Dec. 23, 2002, CPDA and Ensystex filed suit in federal district court in California (Case No. 02-9781 AHM (PLAx)) seeking a court declaration that California’s “letter of authorization” requirement is preempted by FIFRA’s “mandatory data licensing” scheme. The Complaint notes that, in order to encourage competition and discourage duplicative data generation, Congress provided in FIFRA § 3(c)(1)(F) that data submitted to EPA to support pesticide registration may be used by subsequent (generic) applicants without the permission of the original data submitter, provided that the generic applicant issue an “offer to compensate” to the data submitter with respect to any data originally submitted within the prior 15 years. The only exception to this so-called “mandatory data licensing scheme” is that data submitted in support of a pesticide active ingredient originally registered after Sept. 30, 1978, are entitled to exclusive use by the data submitter for ten years, measured from the date the pesticide is first registered with EPA (the ten-year “exclusive use” period may be extended up to three additional years in certain circumstances).

In contrast, Section 12811.5 of the California Food and Agricultural Code (FAC) and Section 6170(c) of Title 3 of the California Code of Regulations (3 CRR) provide that a generic applicant may rely on previously submitted data to support its application if it obtains the written permission of the data owner, regardless of when the study was originally submitted to DPR. The Complaint asserts that the “letter of authorization” requirement in FAC § 12811.5 and 3 CRR § 6170(c) is in direct conflict with FIFRA’s mandatory data-licensing scheme, inasmuch as applicants for generic pesticides have an unqualified statutory right under FIFRA § 3(c)(1)(F) to rely on data previously submitted to EPA, other than exclusive use data, to support their federal registrations (provided that the requisite offer to compensate), but must obtain the data submitter’s permission to rely on the very same data to support a registration of the same generic pesticide in California. The Complaint contends that California’s “letter of authorization” requirement has effectively prevented the registration of many generic pesticides in California; resulted in significant delays in the registration of many other generic pesticides in California; and has resulted in the costly and time-consuming duplication of test data, all in direct conflict with the goals of FIFRA’s mandatory data-licensing scheme.

If the federal court rules that California’s “letter of authorization” requirement is preempted by FIFRA, the ruling would effectively moot the pending California state court proceedings. It would also facilitate the registration of generic pesticides in California, since generic applicants would no longer be required either to obtain letters of authorization from the data owner or duplicate the required test data.