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June 24, 2010

Supreme Court Sets Aside Injunction That Prohibited APHIS from Partially Deregulating Genetically Engineered Alfalfa

Bergeson & Campbell, P.C.

On June 21, 2010, the Supreme Court issued a decision in Monsanto, et al v. Geertson Seed Farms, et al. In the 7-1 decision, the Court reversed a decision by the 9th Circuit Court of Appeals. The Court held that the District Court that reviewed a decision by the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture abused its discretion when it issued an injunction precluding APHIS from allowing any sale or use of Roundup Ready Alfalfa (RRA), a variety of alfalfa genetically engineered to tolerate the herbicide glyphosate. The text of the full opinion can be viewed online.

APHIS has promulgated regulations which it interprets as classifying most genetically engineered plants as “plant pests” that are regulated articles under the Plant Protection Act. Any genetically engineered plant so classified can only be introduced into the environment if APHIS grants a permit or APHIS grants a petition to deregulate the plant in question. In making a determination to deregulate a genetically engineered plant, APHIS is required to comply with the provisions of the National Environmental Policy Act (NEPA). If granting a petition to deregulate a genetically engineered plant would have a significant effect on the environment, APHIS must first prepare an environmental impact statement (EIS), but APHIS need not prepare an EIS if it determines in an environmental assessment (EA) that granting the petition will not have a significant effect on the environment.

In this case, Monsanto submitted to APHIS a petition to deregulate completely RRA. After soliciting comment on the petition and on a draft EA, APHIS granted the petition. The decision by APHIS to deregulate RRA was then challenged in the District Court by two conventional alfalfa growers and environmental groups. In this review, the District Court found that the EA prepared by APHIS did not adequately address whether: (1) the gene conferring glyphosate tolerance might be transmitted from RRA to conventional varieties of alfalfa; and (2) the introduction of RRA would contribute to development of glyphosate resistant weeds. The District Court further found that APHIS must prepare an EIS before deregulating RRA.

The traditional four requirements for entry of a permanent injunction are: (1) irreparable injury will otherwise occur; (2) other remedies to address the injury are inadequate; (3) the balance of hardships between the parties favors the plaintiff; and (4) the public interest would not be disserved. In this case, the parties strongly disagreed concerning certain material facts and no evidentiary hearing was held, but the District Court still determined that the requirements for entry of an injunction were met. The District Court then issued an injunction that prohibited APHIS from doing anything to deregulate RRA and also prohibited planting of RRA after a specified date, pending preparation of a suitable EIS by APHIS. The 9th Circuit Court of Appeals affirmed the District Court action, and the Supreme Court granted certiorari.

The Supreme Court stated that the District Court appeared “to presume that an injunction is the proper remedy for a NEPA violation,” but that “[n]o such thumb on the scales is warranted.” The Court held that no injunction may be issued to address purported failures to satisfy NEPA requirements unless the normal four-part test has been fully satisfied. The Court further held that the District Court could not satisfy the applicable tests in these circumstances. The broad scope of the injunction issued by the District Court was a critical factor in this result. An injunction that did nothing more than prohibit APHIS from completely deregulating RRA until after preparation of an EIS might have been acceptable, but injunctive relief of this sort was unnecessary because the District Court’s order vacating the action by APHIS effectively achieved the same thing. The Supreme Court’s rejection of injunctive relief was directly based on the decision of the District Court to preclude APHIS from partially deregulating RRA, or from providing any other interim relief to Monsanto and the affected growers, while an EIS was being prepared.

The Supreme Court did not consider whether an evidentiary hearing would normally be required before injunctive relief may be ordered when material facts are in dispute. This issue was not reached in this case, however, because the Court’s decision severely limited the District Court’s discretion on remand. The Court took the somewhat unusual step of specifically declaring that the four requirements for an injunction could not be satisfied in this case because the District Court could not rationally find that every action that might be taken by APHIS to deregulate RRA prior to completion of an EIS would cause irreparable injury. The Court reasoned that APHIS might be able to establish precautions for use of RRA that would prevent any irreparable injury. Thus, APHIS should be allowed to deregulate partially RRA based on an EA rather than a full EIS, but the broad scope of the District Court’s injunction effectively precluded APHIS from considering such partial deregulation. The Court noted that any decision to deregulate partially RRA in the absence of an EIS would itself be subject to judicial review.

The Supreme Court’s decision in the Geertson case, in combination with an earlier decision in Winter v. NRDC, will significantly reduce the likelihood that courts will use injunctive relief to address NEPA violations, and it is likely also to affect the use of injunctive relief for other failures to do adequate environmental review under statutes like the Endangered Species Act (ESA). Nevertheless, we expect the effect of this precedent to be limited, because it does not constrain the ability of a reviewing court to simply vacate any agency action that it finds is procedurally defective. A sufficiently colorable procedural claim under either NEPA or the ESA may still succeed, but the courts will be less able to constrain those actions that administrative agencies take on remand to address the procedural error. Under NEPA, an agency will be free to devise a more limited administrative action that would avoid any significant impact on the environment and thus require only an EA rather than an EIS. Under the ESA, an agency that has failed to analyze whether an administrative action would be “likely to jeopardize” a listed species, has made a determination concerning potential jeopardy not supported by the administrative record, or has determined that there could be jeopardy without consulting with the Fish and Wildlife Service, will have flexibility to limit its action in a manner that would preclude any likelihood of jeopardy. Administrative actions that have been limited to reduce potential impacts may be used either in lieu of the original action vacated by the court, or as an interim remedy while additional analysis of environmental impacts and/or any required consultation are completed.