Thomas V Union Carbide Agricultural Products Co.

473 U.S. 568 (1985)

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Nature of the Case

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Facts

(This part is not in the Schwartz 9^th book) As a precondition for registration of a pesticide, manufacturers must submit research data to the EPA concerning the product's health, safety, and environmental effects. Section 3(c)(1)(D) of the 1972 Act provided statutory authority for the use of previously submitted data as well as a scheme for sharing the costs of data generation. 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 data submitters 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.' Congress viewed data-sharing as essential to the registration scheme, but concluded EPA must be relieved of the task of valuation because disputes regarding the compensation scheme had 'for all practical purposes, tied up their registration process' and 'EPA lacked the expertise necessary to establish the proper amount of compensation.' 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)(1)(D)(i). 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 misconduct.' Should an applicant or data submitter fail to comply with the scheme, the Administrator is required to cancel the new registration or to consider the data without compensation to the original submitter.

(Schwartz 9^th starts here.) Ps are 13 large firms engaged in the development and marketing of chemicals used to manufacture pesticides. Ps are 13 large firms engaged in the development and marketing of chemicals used to manufacture pesticides. When the 1978 amendments went into effect, Ps were engaged in litigation challenging the constitutionality under Article I and the Fifth Amendment of the provisions authorizing data-sharing and disclosure of data to the public. Ps amended their complaint to allege that the statutory mechanism of binding arbitration for determining the amount of compensation due them violates Article III of the Constitution. The lower court ruled against D, and the Supreme Court granted certiorari.