Thomas v. Union Carbide Agricultural Products Company

RESPONDENT: Union Carbide Agricultural Products Company
LOCATION: United States Courthouse

DOCKET NO.: 84-497
DECIDED BY: Burger Court (1981-1986)

CITATION: 473 US 568 (1985)
ARGUED: Mar 26, 1985
DECIDED: Jul 01, 1985

Kenneth Ward Weinstein - on behalf of the Appellees
Lawrence G. Wallace - on behalf of the Appellant
Lawrence Gerald Wallace - on behalf of the appellant -- rebuttal

Facts of the case


Media for Thomas v. Union Carbide Agricultural Products Company

Audio Transcription for Oral Argument - March 26, 1985 in Thomas v. Union Carbide Agricultural Products Company

Warren E. Burger:

We will hear arguments next in Thomas against Union Carbide.

Mr. Wallace, you have lost your audience.

You may proceed whenever you are ready.

Lawrence Gerald Wallace:

Thank you, Mr. Chief Justice, and may it please the Court, this is a follow-up to last term's decision in Ruckelshaus against Monsanto Company in which this Court sustained the constitutionality of the data use and disclosure provisions of the federal statute regulating the marketing and sale of pesticides, known as FIFRA.

The Court will recall that the data involved are not formulas of pesticide products, but they are health and safety testing data, and those are used by EPA in granting registrations to subsequent applicants.

Under the statutory scheme they are not required to duplicate the testings, but are to share in the cost of generating the test data.

There is no issue in the present case with respect to public disclosure of the data.

That portion of FIFRA is not involved here, because the compensation scheme which is at issue does not relate to public disclosure.

It relates only to use of the data within EPA in support of the subsequent application.

The subsequent applicant is not given access to the data for that purpose.

He merely cites the existence of such data from an index.

This Court last term held that the District Court had acted prematurely in the Monsanto case in holding that the system for sharing the costs of generating the data, the system of compulsory arbitration that is provided for if the parties cannot reach agreement violated Article 3 of the Constitution.

The Court held that that issue was not ripe for review.

It then vacated and remanded the present case, and the District Court held that that issue was ripe in the present case, and that those provisions did violate Article 3, and enjoined the enforcement of the entire licensing, if one might call it that, and compensation system for registering subsequent applicants, and the case is on appeal from that holding.

Now, except for the Stauffer Chemical Company, the remaining appellees are in the identical situation that Monsanto was in last term.

None of them has been a party to any arbitration proceeding, and their situation is squarely controlled by the holding that the issue was not ripe with respect to Monsanto.

And our first contention is that here, too, the issue is not ripe for adjudication, but we also have contentions on the merits to follow through with.

The question as to whether it is ripe with respect to Stauffer Chemical Company is only a little more complicated, but we believe that the same result should follow.

Stauffer has been a party to one arbitration proceeding under the statute against PPG Industries, but Stauffer has not either in the present case or in a case that is pending between the two companies in the District Court for the District of Columbia contested the result of that arbitration award as not meeting the statutory standard.

The Court said in the Monsanto case that the operation of the arbitration procedure affects only in that case Monsanto's ability to vindicate its statutory right to obtain compensation.

It is PPG which claims that Monsanto has been overcompensated by the arbitrator's award, and while Monsanto is asking that the entire system of allowing a competitor a registration be struck down so that it can still market its no longer patented product free of competition, it is not asking that the award be set aside or augmented in any way.

Presumably this is a tactical decision to restrict the scope of review, and I think if one turns to the award itself, one can understand that it is really Stauffer that has won the award for all practical purposes, and at least is taking that stance in the proceedings.

I should point out that the District Court in this case on remand, and this is printed at Page 30 of the Joint Appendix, the appellees specifically said that plaintiffs do not in this case challenge the result of an arbitration, nor does the adjudication of plaintiff's claims depend in any manner on the outcome of an arbitration.

And in the case pending in the District Court for the District of Columbia, Stauffer is asking for enforcement of the award, or in the alternative, that PPG not be allowed to market the product at all, and that Stauffer be awarded damages in the amount of the arbitrator's award.

The award is set forth in the Joint Appendix, and if one turns to Page 54 of the Joint Appendix, one can see what was awarded to Stauffer by the arbitrators.

There are two elements to the award.

Paragraph A awards the sum of $1,465,000, which is explained two page earlier to be one-half the sum of $2,930,000, which was the cost generated in getting the data that were submitted to EPA.

And then there is the plus, Part B, running compensation for the calendar years 1983 through 1992 of 15 cents per pound, for every pound of product that PPG sells, and there is a fraction there which is intended to be an inflation adjustment, which so long as the Consumer Price Index continues to rise will have the effect of increasing the 15 cents slightly.

And on the preceding page, Page 53, the arbitrators estimated that during the first five years of that ten-year period, PPG would sell 47,250,000 pounds.

If one multiplies that by 15 cents, it comes to about $7 million, and that is only for the first five of the ten years.