Tzumi Innovations, LLC v. Wheeler

Background

Tzumi Innovations LLC sued the Environmental Protection Agency (EPA) and Michael S. Regan, in his official capacity as EPA Administrator, over EPA’s treatment of Tzumi’s Wipe Out! sanitizing wipes. The complaint asserted claims under the Administrative Procedure Act, the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), Executive Order 13892, and the Fifth Amendment’s Due Process Clause.

The product’s physical label described it as cleaning and sanitizing and stated that it was safe on hands. A retailer’s website also described the wipes as usable on surfaces and effective against common allergens and germs. EPA sent Tzumi an advisory letter stating that the product was an unregistered pesticide or misbranded device and demanding information about a recall. EPA later requested a voluntary recall and said it would issue a Stop Sale, Use, or Removal Order if Tzumi did not provide a recall plan.

Motion to dismiss

The court held that EPA’s determination that the product was a pesticide and its recall demand were final agency actions. In the court’s view, those actions completed EPA’s decision-making process and created legal consequences, including the possibility of increased civil penalties or criminal penalties for knowing or willful FIFRA violations. The court also held that those issues were ripe for review because Tzumi faced an immediate business dilemma and had already spent resources responding to EPA’s position.

The court dismissed the portion of Tzumi’s arbitrary-and-capricious claim based on EPA’s threat to issue a future Stop Sale, Use, or Removal Order. That threat was not itself a final agency action because EPA had not completed its decision-making process and no rights or obligations had yet been determined by a possible future enforcement action.

The court dismissed Counts II and III, which alleged that EPA had unlawfully changed its regulatory position and engaged in unlawful rulemaking. The complaint did not adequately allege that EPA had changed its approach to products beyond Tzumi’s product and its specific labeling, and it did not allege a change to rules requiring public notice and comment. The court also dismissed Count IV because Executive Order 13892 did not create a private right to sue, and the order had been revoked.

The court held that the claims in Count I challenging EPA’s pesticide determination and recall demand survived. Counts V and VI—declaratory-judgment claims alleging FIFRA and due-process violations—also survived. The court therefore granted in part and denied in part Defendants’ motion to dismiss.

Preliminary injunction

The court denied Tzumi’s motion for a preliminary injunction. To obtain that relief against government action, Tzumi had to show irreparable harm, a likelihood of success on the merits, that the public interest favored an injunction, and that the balance of equities favored Tzumi. The court considered only the likelihood-of-success requirement because Tzumi had not satisfied it.

The court concluded that Tzumi was unlikely to prove that EPA acted arbitrarily and capriciously in treating the product as a pesticide. The website stated that the wipes could be used on surfaces to kill bacteria and viruses, and FIFRA and its implementing regulation treat a product as a pesticide when its labeling or advertising claims or implies that it can be used for that purpose. The court also rejected Tzumi’s argument that the product was regulated exclusively by the Food and Drug Administration, finding that the cited agreement between EPA and the FDA’s parent agency recognized overlapping regulatory authority rather than showing that EPA had given up jurisdiction.

Disposition

Judge Lorna G. Schofield’s order granted in part and denied in part Defendants’ motion to dismiss. Counts II, III, and IV were dismissed. Count I survived as to EPA’s finding that the product was a pesticide and EPA’s recall demand, and Counts V and VI survived. The portion of the claims based on the threatened future enforcement order was dismissed. Tzumi’s motion for a preliminary injunction was denied.