Thomas v. Union Carbide Agricultural Products Co.
Thomas v. Union Carbide Agricultural Products Co.
Opinion of the Court
delivered the opinion of the Court.
This case requires the Court to revisit the data-consideration provision of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 61 Stat. 163, as amended, 7 U. S. C. §136 et seq., which was considered last Term in Ruckelshaus v. Monsanto Co., 467 U. S. 986 (1984). Monsanto examined whether FIFRA’s data-consideration provision effects an uncompensated taking in violation of the Fifth Amendment. In this case we address whether Article III of the Constitution prohibits Congress from selecting binding arbitration with only limited judicial review as the mechanism for resolving disputes among participants in FIFRA’s pesticide registration scheme. We conclude it does not and reverse the judgment below.
H-i
The Court’s opinion in Monsanto details the development of FIFRA from the licensing and labeling statute enacted in 1947 to the comprehensive regulatory statute of the present. This case, like Monsanto, concerns the most recent amendment to FIFRA, the Federal Pesticide Act of 1978, 92 Stat. 819 (1978 Act), which sought to correct problems created by the Federal Environmental Pesticide Control Act of 1972, 86 Stat. 973 (1972 Act), itself a major revision of prior law. See Ruckelshaus v. Monsanto Co., supra, at 991-992.
A
As a precondition for registration of a pesticide, manufacturers must submit research data to the Environmental Protection Agency (EPA) concerning the product’s health, safety, and environmental effects. The 1972 Act established data-sharing provisions intended to streamline pesticide registration procedures, increase competition, and avoid unnecessary duplication of data-generation costs. S. Rep. No. 92-838, pp. 72-73 (1972) (1972 S. Rep.). Some evidence suggests that before 1972 data submitted by one registrant
“In effect, the provision instituted a mandatory data-licensing scheme. The amount of compensation was to be negotiated by the parties, or, in the event negotiations failed, was to be determined by the EPA, subject to judicial review upon instigation of the original data submitter. The scope of the 1972 data-consideration provision, however, was limited, for any data designated as ‘trade secrets or commercial or financial information’ . . . could not be considered at all by EPA to support another registration unless the original submitter consented.” Ruckelshaus v. Monsanto Co., supra, at 992-993.
Congress enacted the original data-compensation provision in 1972 because it believed “recognizing a limited proprietary interest” in data submitted to support pesticide registrations would provide an added incentive beyond statutory patent protection for research and development of new pesticides. H. R. Rep. No. 95-663, pp. 17-18 (1977); S. Rep. No. 95-334, pp. 7, 34-40 (1977) (1977 S. Rep.). The data submitters, however, contended that basic health, safety, and environmental data essential to registration of a competing pesticide qualified for protection as a trade secret. With EPA bogged down in cataloging data and the pesticide industry embroiled in litigation over what types of data could legitimately be designated “trade secrets,’’ new pesticide registrations “ground to a virtual halt.” Id., at 3.
Against this background, Congress in 1978 amended § 3(c)(1)(D) and § 10(b) to clarify that the trade secret exemption from the data-consideration provision did not extend to health, safety, and environmental data. In addition, the 1978 amendments granted data submitters a 10-year period of exclusive use for data submitted after September 30,1978, during which time the data may not be cited without the original submitter’s permission. § 3(c)(l)(D)(i).
Regarding compensation for use of data not protected by the 10-year exclusive use provision, the amendment substituted for the EPA Administrator’s determination of the appropriate compensation a system of negotiation and binding arbitration to resolve compensation disputes among registrants. Section 3(c)(l)(D)(ii) authorizes EPA to consider data already in its files in support of a new registration, permit, or new use, but “only if the applicant has made an offer to compensate the original data submitter.” If the applicant and data submitter fail to agree, either may invoke binding arbitration. The arbitrator’s decision is subject to judicial review only for “fraud, misrepresentation, or other
The concept of retaining statutory compensation but substituting binding arbitration for valuation of data by EPA emerged as a compromise. This approach was developed by representatives of the major chemical manufacturers, who sought to retain the controversial compensation provision, in discussions with industry groups representing follow-on registrants, whose attempts to register pesticides had been roadblocked by litigation since 1972. Hearings on Extending and Amending FIFRA before the Subcommittee on Department Investigations, Oversight, and Research of the House Committee on Agriculture, 95th Cong., 1st Sess., 522-523 (1977) (testimony of Robert Alikonis, General Counsel to Pesticide Formulators Association).
B
Appellees are 13 large firms engaged in the development and marketing of chemicals used to manufacture pesticides.
The District Court granted appellees’ motion for summary judgment on their Article III claims. It found the issues ripe because the “statutory compulsion to seek relief through arbitration” raised a constitutionally sufficient case or contro
Appellant took a direct appeal to this Court pursuant to 28 U. S. C. § 1252. We vacated the judgment of the District Court and remanded for reconsideration in light of our supervening decision in Ruckelshaus v. Monsanto Co., 467 U. S. 986 (1984). Ruckelshaus v. Union Carbide Agricultural Products Co., 468 U. S. 1201 (1984). In Monsanto, we ruled that FIFRA’s data-consideration provisions may be deemed a “public use” even though the most direct beneficiaries of the regulatory scheme will be the later applicants. 467 U. S., at 1014. Insofar as FIFRA authorizes the Administrator to consider trade secrets submitted during the period between 1972 and 1978, a period during which the registrant entertained a reasonable, investment-backed expectation that its trade secret data would be held confidential, we held it effects a taking. But the data originator must complete arbitration and, in the event of a shortfall, exhaust its Tucker Act remedies against the United States before it can be ascertained whether it has been deprived of just compensation. The Court distinguished between the “ability to vindicate [the] constitutional right to just compensation” and the “ability to vindicate [the] statutory right to obtain compensation from a subsequent applicant.” Id., at 1019. But we declined to reach Monsanto’s Article III claim, explaining:
“Monsanto did not allege or establish that it had been injured by actual arbitration under the statute. While the District Court acknowledged that Monsanto had re*578 ceived several offers of compensation from applicants for registration, it did not find that EPA had considered Monsanto’s data in considering another application. Further, Monsanto and any subsequent applicant may negotiate and reach agreement concerning an outstanding offer. If they do not reach agreement, then the controversy must go to arbitration. Only after EPA has considered data submitted by Monsanto in evaluating another application and an arbitrator has made an award will Monsanto’s claims with respect to the constitutionality of the arbitration scheme become ripe.” Ibid, (citation omitted).
On remand in this case, appellees amended their complaint to reflect that EPA had, in fact, considered their data in support of other registration applications. The amended complaint also alleged that data submitted by appellee Stauffer Chemical Company (Stauffer), originator of the chemicals butylate and EPTC, had been used in connection with registrations by PPG Industries, Inc. (PPG), and Drexel Chemical Company of pesticides containing butylate and EPTC as active ingredients. App. 23. The complaint further alleged Stauffer had invoked the arbitration provisions of § 3(c)(l)(D)(ii) against PPG, and appellees entered in evidence the award of the arbitration panel, handed down on June 28, 1983. Id., at 42. Stauffer claimed the arbitrators’ award fell far short of the compensation to which it was entitled.
II
As a threshold matter, we must determine whether appel-lees’ Article III claims demonstrate sufficient ripeness to establish a concrete case or controversy. Regional Rail Reorganization Act Cases, 419 U. S. 102, 138-139 (1974). Appellant contends that the District Court erred in addressing these claims because the criteria established in Monsanto for ripeness remained unsatisfied. Appellant argues that only one firm, Stauffer, engaged in arbitration and it seeks to enforce rather than challenge the award. Appellees counter that they are aggrieved by the threat of an unconstitutional arbitration procedure which assigns the valuation of their data to civil arbitrators and prohibits judicial review of the amount of compensation. Stauffer in particular argues that it was doubly injured by the arbitration. Although it claimed a shortfall of some $50 million, it was precluded by § 3(c)(l)(D)(ii) from seeking judicial review of the award against PPG. While seeking to enforce the award should its Article III claim fail, Stauffer has consistently challenged the validity of the entire FIFRA data-consideration scheme both here and in litigation initiated by PPG. See n. 3, supra.
We agree that Stauffer has an independent right to adjudication in a constitutionally proper forum. See Glidden Co.
“[Rjipeness is peculiarly a question of timing.” Regional Rail Reorganization Act Cases, supra, at 140. “[I]ts basic rationale is to prevent the courts, through premature adjudication, from entangling themselves in abstract disagreements.” Abbott Laboratories v. Gardner, 387 U. S. 136, 148 (1967). The Article III challenge in Monsanto was, in this sense, premature. Monsanto had not alleged that its data had ever been considered in support of other registrations, much less that Monsanto had failed to reach a negotiated settlement or been forced to resort to an unconstitutional arbitration. In fact, no FIFRA arbitrations had as yet taken place when Monsanto brought its claim. Monsanto’s claim thus involved “contingent future events that may not
In addition, “the fitness of the issues for judicial decision” and “the hardship to the parties of withholding court consideration” must inform any analysis of ripeness. Id., at 149. The issue presented in this case is purely legal, and will not be clarified by further factual development. Cf. Pacific Gas & Electric Co. v. State Energy Resources Conservation and Development Comm’n, 461 U. S. 190, 201 (1983). Doubts about the validity of FIFRA’s data-consideration and compensation schemes have plagued the pesticide industry and seriously hampered the effectiveness of FIFRA’s reforms of the registration process. “To require the industry to proceed without knowing whether the [arbitration scheme] is valid would impose a palpable and considerable hardship.” Id., at 201-202. At a minimum Stauffer, and arguably each appellee whose data have been used pursuant to the challenged scheme, suffers the continuing uncertainty and expense of depending for compensation on a process whose authority is undermined because its constitutionality is in question. See ibid. “‘One does not have to await the consummation of threatened injury to obtain preventive relief. If the injury is certainly impending, that is enough.’ ” Regional Rail Reorganization Act Cases, 419 U. S., at 143,
Finally, appellees clearly have standing to contest EPA’s issuance of follow-on registrations pursuant to what they contend is an unconstitutional statutory provision. They allege an injury from EPA’s unlawful conduct — the injury of being forced to choose between relinquishing any right to compensation from a follow-on registrant or engaging in an unconstitutional adjudication. Allen v. Wright, 468 U. S. 737 (1984). Appellees also allege injury which is likely to be redressed by the relief they request. Ibid. The use, registration, and compensation scheme is integrated in a single subsection that explicitly ties the follow-on registration to the arbitration. See § 3(c)(l)(D)(ii) (EPA “shall deny” or “cancel” follow-on registration if arbitration section is not complied with). It is evident that Congress linked EPA’s authority to issue follow-on registrations to the original data submitter’s ability to obtain compensation. A decision against the provision’s constitutionality, therefore, would support remedies such as striking down the statutory restrictions on judicial review or enjoining EPA from issuing or retaining in force follow-on registrations pursuant to § 3(c)(l)(D)(ii).
Ill
Appellees contend that Article III bars Congress from requiring arbitration of disputes among registrants concerning compensation under FIFRA without also affording substantial review by tenured judges of the arbitrator’s decision. Article III, § 1, establishes a broad policy that federal judicial power shall be vested in courts whose judges enjoy life tenure and fixed compensation. These requirements protect
An absolute construction of Article III is not possible in this area of “frequently arcane distinctions and confusing precedents.” Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U. S., at 90 (opinion concurring in judgment). “[NJeither this Court nor Congress has read the Constitution as requiring every federal question arising under the federal law ... to be tried in an Art. Ill court before a judge enjoying life tenure and protection against salary reduction.” Palmore v. United States, 411 U. S. 389, 407 (1973). Instead, the Court has long recognized that Congress is not barred from acting pursuant to its powers under Article I to vest decisionmaking authority in tribunals that lack the attributes of Article III courts. See, e. g., Walters v. National Assn. of Radiation Survivors, ante, p. 305 (Board of Veterans’ Appeals); Palmore v. United States, supra (District of Columbia courts); Crowell v. Benson, 285 U. S. 22 (1932) (Deputy Commissioner of Employees’ Compensation Commission); Murray’s Lessee v. Hoboken Land & Improvement Co., 18 How. 272 (1856) (Treasury accounting officers). Many matters that involve the application of legal standards to facts and affect private interests are routinely decided by agency action with limited or no review by Article III courts. See, e. g., 5 U. S. C. §§ 701(a)(1), 701(a)(2); Heckler v. Chaney, 470 U. S. 821, 837-838 (1985); United States v. Erika, Inc., 456 U. S. 201, 206 (1982) (no review of Medicare reimbursements); Monaghan, Marbury and the Administrative State, 83 Colum. L. Rev. 1, 18 (1983) (administrative agencies can conclusively adjudicate claims created by the administrative state, by and against private persons); Redish, Legislative Courts, Administrative Agencies, and the Northern Pipeline Decision, 1983 Duke L. J. 197 (same).
A
Appellees contend that their claims to compensation under FIFRA are a matter of state law, and thus are encompassed by the holding of Northern Pipeline. We disagree. Any right to compensation from follow-on registrants under §3 (c)(l)(D)(ii) for EPA’s use of data results from FIFRA and does not depend on or replace a right to such compensation under state law. Cf. Northern Pipeline Construction Co., supra, at 84 (plurality opinion) (contract claims at issue were matter of state law); Crowell v. Benson, supra, at 39-40 (replacing traditional admiralty negligence action with administrative scheme of strict liability). As a matter of state law, property rights in a trade secret are extinguished when a company discloses its trade secret to persons not obligated to protect the confidentiality of the information. See Ruckelshaus v. Monsanto Co., 467 U. S., at 1002, citing R. Milgrim, Trade Secrets § 1.01[2] (1983). Therefore registrants who submit data with notice of the scheme established by the 1978 amendments, and its qualified protection of trade secrets as defined in §10, can claim no property interest under state law in data subject to § 3(c)(l)(D)(ii). Ruckelshaus v. Monsanto Co., supra, at 1005-1008. Cf. 21 U. S. C. §§ 348(a)(2), 376(a)(1); 21 CFR §71.15 (1985); 21 CFR § 171.1(b) (1984) (data submitted under Food, Drug,
Alternatively, appellees contend that FIFRA confers a . “private right” to compensation, requiring either Article III adjudication or review by an Article III court sufficient to retain “the essential attributes of the judicial power.” Northern Pipeline Construction Co., supra, at 77, 85-86 (plurality opinion). This “private right” argument rests on the distinction between public and private rights drawn by the plurality in Northern Pipeline. The Northern Pipeline plurality construed the Court’s prior opinions to permit only three clearly defined exceptions to the rule of Article III adjudication: military tribunals, territorial courts, and decisions involving “public” as opposed to “private” rights. Drawing upon language in Crowell v. Benson, supra, at 50, the plurality defined “public rights” as “matters arising between the Government and persons subject to its authority in connection with the performance of the constitutional functions of the executive or legislative departments.” 458 U. S., at 67-68. It identified “private rights” as “ ‘the liability of one individual to another under the law as defined.’” Id., at 69-70, quoting Crowell v. Benson, 285 U. S., at 51.
This theory that the public rights/private rights dichotomy of Crowell and Murray’s Lessee v. Hoboken Land & Im
B
Chief Justice Hughes, writing for the Court in Crowell, expressly rejected a formalistic or abstract Article III inquiry, stating:
“In deciding whether the Congress, in enacting the statute under review, has exceeded the limits of its authority to prescribe procedure . . . , regard must be had, as in other cases where constitutional limits are invoked, not to mere matters of form but to-the substance of what is required.” 285 U. S., at 53 (emphasis added).
Crowell held that Congress could replace a seaman’s traditional negligence action in admiralty with a statutory scheme of strict liability. In response to practical concerns, Congress rejected adjudication in Article III courts and instead provided that claims for compensation would be determined in an administrative proceeding by a deputy commissioner appointed by the United States Employees’ Compensation Commission. Id., at 43. “[T]he findings of the deputy commissioner, supported by evidence and within the scope of his authority” were final with respect to injuries to employees within the purview of the statute. Id., at 46. Although
The enduring lesson of Crowell is that practical attention to substance rather than doctrinaire reliance on formal categories should inform application of Article III. Cf. Glidden Co. v. Zdanok, 370 U. S., at 547-548. The extent of judicial review afforded by the legislation reviewed in Crowell does not constitute a minimal requirement of Article III without regard to the origin of the right at issue or the concerns guiding the selection by Congress of a particular method for resolving disputes. In assessing the degree of judicial involvement required by Article III in this case, we note that the statute considered in Crowell is different from FIFRA in significant respects. Most importantly, the statute in Crowell displaced a traditional cause of action and affected a pre-existing relationship based on a common-law contract for hire. Thus it clearly fell within the range of matters reserved to Article III courts under the holding of Northern Pipeline. See 458 U. S., at 70-71, and n. 25 (plurality opinion) (noting that matters subject to a “suit at common law or in equity or admiralty” are at “protected core” of Article III judicial powers); id., at 90 (opinion concurring in judgment) (noting that state law contract actions are “the stuff of the traditional actions at common law tried by the courts at Westminster in 1789”).
If the identity of the parties alone determined the requirements of Article III, under appellees’ theory the constitutionality of many quasi-adjudicative activities carried on by administrative agencies involving claims between individuals would be thrown into doubt. See 5 K. Davis, Administrative Law §29:23, p. 443 (2d ed. 1984) (concept described as
“The Act. . . writes into law the ‘right’ of the ‘majority of any craft or class of employees’ to ‘determine who shall be the representative of the craft or class for purposes of this Act.’ That ‘right’ is protected by [a provision] which gives the Mediation Board the power to resolve controversies concerning it... . A review by the federal district courts of the Board’s determination is not necessary to preserve or protect that ‘right.’ Congress for reasons of its own decided upon the method for protection of the ‘right’ which it created.” 320 U. S., at 300-301.
See also Union Pacific R. Co. v. Price, 360 U. S. 601, 608 (1959); NLRB v. Hearst Publications, Inc., 322 U. S. 111, 131, 135 (1944) (Board’s conclusions reviewable for rational basis and warrant in the record). Cf. Leedom v. Kyne, 358 U. S. 184, 199 (1958), (Brennan, J., dissenting) (discussing Switchmen).
The Court has treated as a matter of “public right” an essentially adversary proceeding to invoke tariff protections against a competitor, as well as an administrative proceeding to determine the rights of landlords and tenants. See Atlas
C
Looking beyond form to the substance of what FIFRA accomplishes, we note several aspects of FIFRA that persuade us the arbitration scheme adopted by Congress does not contravene Article III. First, the right created by FIFRA is not a purely “private” right, but bears many of the characteristics of a “public” right. Use of a registrant’s data to support a follow-on registration serves a public purpose as an integral part of a program safeguarding the public health. Congress has the power, under Article I, to authorize an agency administering a complex regulatory scheme to allocate costs and benefits among voluntary participants in the program without providing an Article III adjudication. It also has the power to condition issuance of registrations or licenses on compliance with agency procedures. Article III is not so inflexible that it bars Congress from shifting the task of data valuation from the agency to the interested parties. Cf. United States v. Erika, Inc., 456 U. S., at 203 (private insurance carrier assigned task of deciding Medicare claims); Crowell v. Benson, supra, at 50-51.
The near disaster of the FIFRA 1972 amendments and the danger to public health of further delay in pesticide registration led Congress to select arbitration as the appropriate method of dispute resolution. Given the nature of the right at issue and the concerns motivating the Legislature, we do not think this system threatens the independent role of the Judiciary in our constitutional scheme. “To hold otherwise would be to defeat the obvious purpose of the legislation to furnish a prompt, continuous, expert and inexpensive method for dealing with a class of questions of fact which are peculiarly suited to examination and determination by an administrative agency specially assigned to that task.” Crowell v. Benson, supra, at 46. Cf. Palmore v. United States, 411 U. S., at 407-408 (the requirements of Art. Ill must in proper circumstances give way to accommodate plenary
We note as well that the FIFRA arbitration scheme incorporates its own system of internal sanctions and relies only tangentially, if at all, on the Judicial Branch for enforcement. See supra, at 574-575. The danger of Congress or the Executive encroaching on the Article III judicial powers is at a minimum when no unwilling defendant is subjected to judicial enforcement power as a result of the agency “adjudication.” See, e. g., Hart, The Power of Congress to Limit the Jurisdiction of Federal Courts: An Exercise in Dialectic, 66 Harv. L. Rev. 1362 (1953), reprinted in P. Bator, P. Mishkin, D. Shapiro, & H. Wechsler, Hart and Wechsler’s The Federal Courts and the Federal System 330 (2d ed. 1973); Mona-ghan, Marbury and the Administrative State, 83 Colum. L. Rev. 1, 16 (1983); L. Jaffe, Judicial Control of Administrative Action 385 (1965) (historically judicial review of agency decisionmaking has been required only when it results in the use of judicial process to enforce an obligation upon an unwilling defendant).
We need not decide in this case whether a private party could initiate an action in court to enforce a FIFRA arbitration. But cf. 29 CFR pt. 1440, App. § 37(c) (1984) (under rules of American Arbitration Association, parties to arbitration are deemed to consent to entry of judgment). FIFRA contains no provision explicitly authorizing a party to invoke judicial process to compel arbitration or enforce an award. Compare § 3(c)(l)(D)(ii), 7 U. S. C. § 136a(c)(l)(D)(ii), with § 10(c), 7 U. S. C. § 136h(c) (authorizing applicant or registrant to institute action in district court to settle dispute with Administrator over trade secrets); 29 U. S. C. § 1401 (b)(2) (Employee Retirement Income Security Act provision authorizing parties to arbitration to bring enforcement action in district court); Union Pacific R. Co. v. Price, 360 U. S.,
Finally, we note that FIFRA limits but does not preclude review of the arbitration proceeding by an Article III court. We conclude that, in the circumstances, the review afforded preserves the “appropriate exercise of the judicial function.” Crowell v. Benson, supra, at 54. FIFRA at a minimum allows private parties to secure Article III review of the arbitrator’s “findings and determination” for fraud, misconduct, or misrepresentation. § 3(c)(l)(D)(ii). This provision protects against arbitrators who abuse or exceed their powers or willfully misconstrue their mandate under the governing law. Cf. Steelworkers v. Enterprise Wheel & Car Corp., 363 U. S. 593, 597 (1960) (arbitrator must be faithful to terms of mandate and does not sit to administer his “own brand of industrial justice”). Moreover, review of constitutional error is preserved, see Walters v. National Assn. of Radiation Survivors, ante, at 311, n. 3; Johnson v. Robison, 415 U. S. 361, 367-368 (1974), and FIFRA, therefore, does not obstruct whatever judicial review might by required by due process. Cf. Crowell v. Benson, 285 U. S., at 46; id., at 87 (Brandeis, J., dissenting). We need not identify the extent to which due process may require review of determinations by the arbitrator because the parties stipulated below to
IV
Appellees raise Article I as an alternative ground for sustaining the judgment of the District Court. Cf. Dandridge v. Williams, 397 U. S. 471, 475, n. 6 (1970). Appellees argued below that FIFRA’s standard for compensation is so vague as to be an unconstitutional delegation of legislative powers. See A. L. A. Schecter Poultry Corp. v. United States, 295 U. S. 495 (1935). A term that appears vague on its face “may derive much meaningful content from the purpose of the Act, its factual background, and the statutory context.” American Power & Light Co. v. SEC, 329 U. S. 90, 104 (1946). Although FIFRA’s language does not impose an explicit standard, the legislative history of the 1972 and 1978 amendments is far from silent. See, e. g., S. Conf. Rep. No. 95-1188, p. 29 (1978); 1977 S. Rep., at 4, 8, 31; 1972 S. Rep., pt. 2, pp. 69, 72-73; Hearings on Extending and Amending FIFRA before the Subcommittee on Department Investigations, Oversight, and Research of the House Committee on Agriculture, 95th Cong., 1st Sess., passim (1977). The Article I claim, however, was neither adequately briefed nor argued to this Court and was not fully litigated before the District Court. Without expressing any opinion on the merits, we leave the issue open for determination on remand.
V
Our holding is limited to the proposition that Congress, acting for a valid legislative purpose pursuant to its con
So ordered.
The full text of § 3(c)(l)(D)(ii) reads:
“(ii) except as otherwise provided in subparagraph (D)(i) of this paragraph, with respect to data submitted after December 31, 1969, by an applicant or registrant to support an application for registration, experimental use permit, or amendment adding a new use to an existing registration, to support or maintain in effect an existing registration, or for reregistration, the Administrator may, without the permission of the original data submitter consider any such item of data in support of an application by any other person (hereinafter in this chapter referred to as the ‘applicant’) within the fifteen year period following the date the data were originally submitted only if the applicant has made an offer to compensate the original data submitter and submitted such offer to the Administrator accompanied by evidence of delivery to the original data submitter of the offer. The terms and amount of compensation may be fixed by agreement between the original data submitter and the applicant, or, failing such an agreement, binding arbitration under this subparagraph. If, at the end of ninety days after the date of delivery to the original data submitter of the offer to compensate, the original data submitter and the applicant, have neither agreed on the amount and terms of compensation nor on a procedure for reaching an agreement on the amount and terms of compensation, either person may initiate binding arbitration proceedings by requesting the Federal Mediation and Conciliation Service to appoint an arbitrator from the roster of arbitrators maintained by such Service. The procedures and rules of the Service shall be applicable to the selection of such arbitrator and to such arbitration proceedings, and the findings and determination of the arbitrator shall be final and conclusive, and no official or court of the United States shall have power or jurisdiction to review any such findings and determination, except for fraud, misrepresentation, or other misconduct by one of the parties to the arbitration or the arbitrator where there is a verified complaint with supporting affidavits attesting to specific instances of such fraud, misrepresentation, or other misconduct. The parties to the arbitration shall share equally in the payment of the fee and expenses of the arbitrator. If the Administrator determines that an original data submitter has failed to participate in a procedure for reaching an agreement or in an arbitration proceeding as required by this sub-paragraph, or failed to comply with the terms of an agreement or arbitration decision concerning compensation under this subparagraph, the original data submitter shall forfeit the right to compensation for the use of*575 the data in support of the application. Notwithstanding any other provision of this subchapter, if the Administrator determines that an applicant has failed to participate in a procedure for reaching an agreement or in an arbitration proceeding as required by this subparagraph, or failed to comply with the terms of an agreement or arbitration decision concerning compensation under this subparagraph, the Administrator shall deny the application or cancel the registration of the pesticide in support of which the data were used without further hearing. Before the Administrator takes action under either of the preceding two sentences, the Administrator shall furnish to the affected person, by certified mail, notice of intent to take action and allow fifteen days from the date of delivery of the notice for the affected person to respond. If a registration is denied or canceled under this subparagraph, the Administrator may make such order as the Administrator deems appropriate concerning the continued sale and use of existing stocks of such pesticide. Registration action by the Administrator shall not be delayed pending the fixing of compensation.” 7 U. S. C. § 136a(e)(l)(D)(ii).
Following the 1978 amendments, appellees amended their complaints to allege that the data-consideration and disclosure provisions effected a taking of their property without just compensation and without due process of law. The District Court granted a preliminary injunction against use of data submitted prior to 1978, Amchem Products, Inc. v. Costle, 481 F. Supp. 195 (1979), but the Second Circuit reversed for want of a showing of likelihood of success and this Court denied appellees’ petition for a writ of certiorari. Union Carbide Agricultural Products Co. v. Costle, 632 F. 2d 1014 (1980), cert. denied, 450 U. S. 996 (1981). Appellees then amended their complaint to allege that the lack of valuation standards rendered the arbitration provision an unconstitutional delegation of legislative authority in violation of Article I. At the same time they stipulated to dismissal, without prejudice to a Court of Claims action, of their due process claims. Record, Doc. Nos. 1, 15, 19.
Shortly after the award was handed down, PPG filed an action against Stauffer and EPA in the District Court for the District of Columbia to set aside the award. Stauffer cross-claimed against EPA seeking to have the entire FIFRA data-compensation scheme invalidated as violative of Article III and counterclaimed against PPG seeking damages in the amount of the award should the statute be struck down or, in the alternative, enforcement of the award. PPG Industries, Inc. v. Stauffer Chemical Co., Civil Action No. 83-1941 (DC, filed July 7, 1983); Record, Doc. No. 35. Should the scheme be upheld, Stauffer argues it is entitled to the award as the only option possible under FIFRA absent fraud or misconduct.
As noted supra, at 585, appellees retain Tucker Act claims in the District Courts or in the United States Claims Court with review in the Court of Appeals for the Federal Circuit for any shortfall between the arbitration award and the value of trade secrets submitted between 1972 and 1978.
Concurring Opinion
with whom Justice Marshall and Justice Blackmun join, concurring in the judgment.
Our cases of both recent and ancient vintage have struggled to pierce through the language of Art. Ill of the Constitution to the full meaning of the deceptively simple requirement that “The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” Art. Ill, § 1. We know that those who framed our Constitution feared the tyranny of “accumulation of all powers, legislative, executive, and judiciary, in the same hands,” The Federalist No. 47, p. 300 (H. Lodge ed. 1888) (J. Madison), and sought to guard against it by dispersing federal power to three interdependent branches of Govérnment. Each branch of Government was intended to exercise a distinct but limited power and function as a check on any aggrandizing tendencies in the other branches. See Buckley v. Valeo, 424 U. S. 1, 122 (1976) (per curiam). The salary and tenure guarantees of Art. Ill — reflecting Hamilton’s observation that “a power over a man’s subsistence amounts
Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U. S. 50 (1982), is the Court’s most recent attempt at defining the limits Art. Ill places on the power of Congress to assign adjudicative authority to decisionmakers not protected by tenure and salary guarantees. We faced the question whether, under the federal Bankruptcy Act of 1978, 92 Stat. 2549, a federal bankruptcy court whose decisionmaker did not benefit from those guarantees could be empowered to render the entire initial adjudication of a state common-law cause of action. The issue was, in other words, whether Art. Ill permitted assignment of any essential attributes of the “judicial Power” to a non-Art. Ill federal decisionmaker when state law prescribed the rule of decision in a dispute between private parties. The Court invalidated the congressional action but a majority did not agree upon a common rationale. The plurality would have held that this allocation of decisional authority could not be justified as a proper exercise of either the congressional power to create Art. I legislative courts or the congressional power to create adjuncts to Art. Ill courts. 458 U. S., at 63-87. Justice Rehnquist, in a concurring opinion joined by Justice O’Connor, would simply have held that Congress may not assign the power to adjudicate a traditional state common-law action to a non-Art. Ill tribunal even given the “traditional appellate review” by an Art. Ill court afforded under the challenged bankruptcy statute. Id., at 90-91.
The plurality opinion concluded that public rights cases, as that concept had come to be understood, involved disputes arising from the Federal Government’s administration of its laws or programs.
I agree with the Court that the determinative factor with respect to the proper characterization of the nature of the dispute in this case should not be the presence or absence of the Government as a party. See ante, at 586. Despite the Court’s contrary suggestions, the plurality opinion in Northern Pipeline suggests neither that “the right to an Article III forum is absolute unless the Federal Government is a party of record” nor that “Article III has no force simply because a dispute is between the Government and an individual.”
Nor does the approach of the Northern Pipeline plurality opinion permit Congress to sap the Judiciary of all its checking power whenever the Government is a party. The opinion made clear that “the presence of the United States as a proper party to the proceeding is . . . not [a] sufficient means of distinguishing ‘private rights’ from ‘public rights.’” 458 U. S., at 69, n. 23. At a minimum, Art. Ill must bar Congress from assigning to an Art. I decisionmaker the ultimate disposition of challenges to the constitutionality of Government action, either legislative or executive. Cf. United States v. Raddatz, 447 U. S. 667, 708-712 (1980) (Marshall, J., dissenting). Also, the plurality opinion was careful to leave open the question whether and to what extent even the resolution of public rights disputes might require some eventual review in an Art. Ill court in the exercise of its responsibility to check an impermissible accumulation of power in the other branches of Government. 458 U. S., at 70, n. 23; see also id., at 115 (White, J., dissenting) (“[A] scheme of
Though the issue before us in this, case is not free of doubt, in my judgment the FIFRA compensation scheme challenged in this case should be viewed as involving a matter of public rights as that term is understood in the line of cases culminating in Northern Pipeline. In one sense the question of proper compensation for a follow-on registrant’s use of test data is, under the FIFRA scheme, a dispute about “the liability of one individual to another under the law as defined,” Crowell v. Benson, supra, at 51 (defining matters of private right). But the dispute arises in the context of a federal regulatory scheme that virtually occupies the field. Congress has decided that effectuation of the public policies of FIFRA demands not only a requirement of compensation from “follow-on” registrants in return for mandatory access to data but also an administrative process — mandatory negotiation followed by binding arbitration — to ensure that unresolved compensation disputes do not delay public distribution of needed products. This case, in other words, involves not only the congressional prescription of a federal rule of decision to govern a private dispute but also the active participation of a federal regulatory agency in resolving the dispute. Although a compensation dispute under FIFRA ultimately involves a determination of the duty owed one private party by another, at its heart the dispute involves the exercise of authority by a Federal Government arbitrator in the course of administration of FIFRA’s comprehensive regulatory
Given that this dispute is properly understood as one involving a matter in which Congress has substantial latitude to make use of Art. I decisionmakers, the question remains whether the Constitution nevertheless imposes some requirement of Art. Ill supervision of the arbitrator’s decisions under this scheme. In this case Congress has provided for review of arbitrators’ decisions to ensure against “fraud, misrepresentation, or other misconduct.” The Court therefore need not reach the difficult question whether Congress is always free to cut off all judicial review of decisions respecting such exercises of Art. I authority.
The review prescribed under FIFRA encompasses the authority to invalidate an arbitrator’s decision when that decision exceeds the arbitrator’s authority or exhibits a manifest disregard for the governing law. See Steelworkers v. Enterprise Wheel & Car Corp., 363 U. S. 593, 597 (1960); Wilko v. Swan, 346 U. S. 427, 436-437 (1953). Such review preserves the judicial authority over questions of law in the present context. Cf. Crowell v. Benson, supra, at 54. In essence, the FIFRA scheme delegates a significant case-
For these reasons, I agree with the Court that the FIFRA arbitration scheme does not violate the mandates of Art. Ill, and I would therefore reverse the judgment of the District Court and remand for further proceedings.
In Ex parte Bakelite Corp., 279 U. S. 438 (1929), public rights disputes were described as those “which may be . . . committed exclusively to executive officers.” Id., at 458. In this regard it is worth noting that early eases recognizing a public rights doctrine typically involved either challenges to Government action affecting private interests in which at the time no constitutional claim of entitlement was recognized, e. g., United States v. Babcock, 250 U. S. 328, 331 (1919); Decatur v. Paulding, 14 Pet. 497 (1840), or challenges by one private party seeking exercise of the Federal Government’s enforcement authority against another private party not before the court, e. g., Ex parte Bakelite Corp., supra. The original theory would seem to have been that because Congress had absolute power to dispose of such issues as it saw fit without resort to the Judiciary, it could assign decisionmaking authority to Art. I courts.
The underpinnings of the original theory, of course, have not survived intact. We now recognize an entitlement in certain forms of government assistance. Goldberg v. Kelly, 397 U. S. 254 (1970). And we have recently made clear that government is not free to dispose of individual claims of entitlement in any manner it deems fit. Cleveland Board of Education v. Loudermill, 470 U. S. 532 (1985). Also, such reasoning is not consistent with the doctrine of unconstitutional conditions. See Speiser v. Randall, 357 U. S. 513 (1958). The erosion of these underpinnings does not, however, mandate the conclusion that disputes arising in the administration of federal regulatory programs may not be resolved
“What clearly remains subject to Art. Ill are all private adjudications in federal courts within the States — matters from their nature subject to a ‘suit at common law or in equity or admiralty.’. . . There is no doubt that when the Framers assigned the ‘judicial Power’ to an independent Art. Ill Branch, these matters lay at what they perceived to be the protected core of that power.” Northern Pipeline Construction Co. v. Marathon Pipe Line Co., supra, at 70-71, n. 25.
As the Court correctly concludes, there is no tenable argument that ap-pellees in this case will be forced to undergo an Art. I adjudication of a state-law claim that arises between private parties, as was the case in Northern Pipeline. See ante, at 584-585.
Although the essential function of the Judiciary is to “say what the law is,” Marbury v. Madison, 1 Cranch 137, 177 (1803), the exercise of this power with respect to the interpretation of federal statutory law may not be the power that constrains the actions of the Legislative Branch. Congress is always free to reject this Court’s interpretation of a federal statute by passing a new law. It may rather be that the exercise of the Court’s power of judicial review to ensure constitutionality is what restrains the exercise of legislative power. The power to interpret federal statutory law could be seen as acting as a check on the exercise of the executive power — or the power of administrative agencies whether or not they are considered as under the head of executive authority — given that what courts do when they review agency action, both rulemaking and adjudication, is ensure that the reviewed action has not departed from congressional intent.
It is also important to note that the Due Process Clause of the Fifth Amendment imposes, as the Court correctly notes, independent constraints on the ability of Congress to establish particular forums for dispute resolution under Art. I. See ante, at 592. Cf. Crowell v. Benson, 285 U. S., at 87 (Brandeis, J., dissenting).
Concurring Opinion
concurring in the judgment.
This appeal presents a question under Article III, but one which differs from that addressed by the Court and whose answer prevents me from reaching the merits of appellees’ claims.
Appellees, plaintiffs in the District Court, challenge the constitutionality of an “arbitration procedure that [allegedly] violates their right to an adjudication that complies with” Article III insofar as it empowers civilian arbitrators to determine the amount of compensation they are entitled to receive for use of their research data. Amended Complaint for Declaratory Judgment and Injunction ¶¶ 20-21, App. 23-24. The relief they claim against the Environmental Protection Agency and its Administrator (collectively referred to as the agency, EPA, or the Administrator) is a declaration of unconstitutionality and an injunction against use of their data in the agency’s processing of applications filed by third parties. See id., at 24.
For a party to have standing to invoke the jurisdiction of a federal court “relief from the injury must be ‘likely’ to follow from a favorable decision.” Allen v. Wright, 468 U. S. 737, 751 (1984); accord, Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 472 (1982); Simon v. Eastern Kentucky Welfare Rights Organization, 426 U. S. 26, 38, 43-46 (1976); Warth v. Seldin, 422 U. S. 490, 507 (1975); Linda R. S. v. Richard D., 410 U. S. 614, 618-619 (1973). Because § 3(c)(l)(D)(ii) does not give appellees any legal basis for claiming that they have been harmed by anything EPA did or threatened to do, a decision that FIFRA’s arbitration provisions violate Article III could not support an injunction against the Administrator’s use of appellees’ data. Accordingly, appellees do not have standing to challenge the constitutionality of § 3(c)(l)(D)(ii) in this action.
The text of § 3(e)(l)(D)(ii) is quoted in full ante, at 574-575, n. 1.
Under appellees’ reading of § 3(c)(l)(D)(ii), compensation is a condition precedent to EPA’s use of their research data to evaluate applications by third parties. See Amended Complaint for Declaratory Judgment and Injunction ¶ 20, App. 23. Because the statutorily required arbitration procedure violates Article III, they reason, compensation cannot be awarded and the condition precedent to EPA’s use of data cannot be fulfilled. Ergo, an injunction must issue against the agency.
Appellees, however, misread the statute. Section 3(c)(l)(D)(ii) conditions the Administrator’s use of their data on a third party’s “offer to compensate,” not upon actual compensation. 92 Stat. 821, 7 U. S. C. § 136a(c)(l)(D)(ii) (emphasis added); accord, § 3(c)(1)(D)(iii), 92 Stat. 822, 7 U. S. C. § 136a(e)(l)(D)(iii). Indeed, the same section later provides that “[r]egistration action by the Administrator shall not be delayed pending the fixing of compensation.” 92 Stat. 822, 7 U. S. C. § 136a(c)(l)(D)(ii). A straightforward reading of this section demonstrates that EPA is not disabled from using research data to process “follow-on” registrations pending compensation of appellees. I find nothing in the legislative history that contradicts this interpretation, and it is consistent with Congress’ “vie[w] [of] data-sharing as essential to the registration scheme,” ante, at
The sentence the Court believes “ties the follow-on registration to the arbitration,” ante, at 582, is beside the point. Section 3(c)(l)(D)(ii) requires the Administrator to “deny the application or cancel the registration of the pesticide” if the third-party “follow-on” applicant “has failed to participate in a procedure for reaching an agreement or in an arbitration proceeding as required by this subparagraph, or failed to comply with the terms of an agreement or arbitration decision concerning compensation.” 92 Stat. 821, 7 U. S. C. § 136a(c)(l)(D)(ii). This sentence is obviously addressed to defaults by third-party “follow-on” applicants in the registration process and hardly suggests that Congress would have scrapped the entire data-use provision if the compensation component was found unconstitutional. To restate the obvious, Congress undoubtedly intended that EPA have use of original applicants’ research data and that such use be recompensed — the statute, after all, provides for both. But the Legislature’s unequivocal intention to facilitate pesticide registrations and the presence of an express severability provision (accompanied by the traditional duty “to save and not to destroy,” Tilton v. Richardson, 403 U. S. 672, 684 (1971)), makes it rather unlikely that Congress gambled the entire pesticide registration process on the constitutionality of a provision for arbi-trable compensation. I therefore conclude that even if we invalidated the compensation clauses appellees would have no right to an injunction against EPA’s use of appellees’ research data.
The District Court held that appellees had standing to challenge FIFRA’s arbitration provisions because “plaintiffs’ injuries here would be the direct product of the statutory plan.” Union Carbide Agricultural Products Co. v. Ruckelshaus, 571 F. Supp. 117, 123, n. 2 (SDNY 1983). This analysis is incomplete: “The injury must be ‘fairly’ traceable to the challenged action, and relief from the injury must be ‘likely’ to follow from a favorable decision.” Allen v. Wright, 468 U. S., at 751 (emphasis added); accord, Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S., at 472. These two components of the Article III causation requirement are distinct: The “fairly traceable” component “examines the causal connection between the assertedly unlawful conduct and the alleged injury”; the “redressability” component “examines the causal connection between the alleged injury and the judicial relief requested.” Allen v. Wright, supra, at 753, n. 19. “[I]t is important to keep the inquiries separate.” Ibid.
Reference
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