EPA Announces One of Its Largest-Ever FIFRA Civil Settlements

Key Takeaways:

• What Happened: EPA settled with Electrolux for nearly $7 million in connection with the import of household appliances with antimicrobial-treated air filters that were not registered under the federal pesticides law.
• Who’s Impacted: Manufacturers, distributors, and importers of products that incorporate antimicrobial substances or make antimicrobial claims.
• What Should Companies Do in Response: Evaluate the regulatory status of any products that make antimicrobial claims to ensure compliance with federal registration, production, and recordkeeping requirements. Violations of these requirements may result in stop sale orders, product seizures, or civil penalties.
• By When: As soon as possible.

The U.S. Environmental Protection Agency (EPA) last month announced one of the largest civil penalties ever issued under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). In its October 6, 2020 Consent Agreement and Final Order (CAFO) with Electrolux Home Products, Inc. (Electrolux), EPA settled hundreds of alleged FIFRA violations in connection with Electrolux’s import and distribution of approximately 420,000 dehumidifiers and air conditioners that each contained a filter manufactured with nanosilver. With a $6,991,400 penalty, EPA’s action is consistent with the Agency’s continued enforcement focus on imported pesticides and also appears to reflect a trend toward significantly higher FIFRA civil penalty assessments in recent years.

Unless otherwise exempted under FIFRA, any pesticide product imported into the United States for distribution or sale first must be registered with EPA. In addition, imported pesticides must comply with specific production, labeling, and notification requirements under FIFRA. A “pesticide” is defined to mean “any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any pest,” and a “pesticide product” refers to the pesticide in the particular form (including composition, packaging, and labeling) in which the pesticide is distributed or sold. Under FIFRA, pests include microorganisms found on surfaces or in the air or water.

Significantly, the Electrolux products characterized by EPA as pesticides in this matter were not chemical products themselves. Instead, they were all household dehumidifiers and air conditioners, each of which contained a filter manufactured with nanosilver, which is an antimicrobial substance. As described in EPA’s CAFO, the products were marketed with claims such as “cleans air by removing harmful bacteria” and “reduces bacteria . . . for a healthier, more comfortable environment.” According to EPA, these appliances were intended to provide an antimicrobial benefit to users and, in light of the incorporated nanosilver, therefore required registration under FIFRA prior to their sale or distribution.

EPA’s penalty calculation was informed by its FIFRA Enforcement Response Policy, which includes detailed guidance for computing FIFRA penalties based on case-specific factors. In its CAFO, EPA specifically notes that the $6,991,400 penalty reflected a 20 percent “good faith” reduction of the gravity-based penalty amount, in acknowledgment of Electrolux’s efforts to bring the products into compliance with FIFRA after EPA’s discovery of the alleged violations. These efforts included an EPA-authorized “rework plan” that allowed Electrolux to consolidate its products at specified locations and, under the supervision of an independent monitor, systematically replace the products’ nanosilver filters with filters that do not contain any pesticidal substances, and remove any pesticidal claims on the labeling and in associated marketing materials.

Manufacturers, Distributors, and Importers Should Assess FIFRA Product Compliance

In light of this latest enforcement action, importers, manufacturers, and distributors of products that incorporate antimicrobial substances or make antimicrobial claims should closely evaluate their status under FIFRA and confirm full compliance with EPA’s requirements.

Determining FIFRA regulatory status requires careful assessment of each product’s composition and claims, which should be frequently revisited as product design and marketing strategies change over time. Some product manufacturers and suppliers may not be aware that they are subject to FIFRA in the first place. While certain products containing antimicrobial substances may be eligible for exemption under FIFRA as “treated articles,” those that do not meet all of EPA’s applicable criteria remain at enforcement risk. In addition, products that do not contain any antimicrobial substances at all may still be subject to regulation under FIFRA as “pesticidal devices” if they are intended to operate against pests by physical or mechanical means.

Visit Beveridge & Diamond’s COVID-19 Resource Center for more information on navigating the global pandemic. Beveridge & Diamond’s Pesticides practice has worked for forty years with U.S. and international clients who research, develop, obtain government approvals for, manufacture, promote, and use pesticidal products and devices. We represent large and small companies with an emphasis on entities that invest in research to discover, develop, and defend new technology. Our Pesticides practice helps clients identify business objectives and implement the most effective regulatory, commercial, litigation, and legislative strategies to achieve or exceed those objectives. If you have any questions, please contact the authors