Scotts Miracle-Gro will pay largest criminal penalty under FIFRA
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WASHINGTON, September 10, 2012 - A federal district court in Columbus, Ohio, sentenced the Scotts Miracle-Gro Company, a producer of pesticides for commercial and consumer lawn and garden uses, to pay a $4 million fine and perform community service for eleven criminal violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which governs the manufacture, distribution, and sale of pesticides.
“As the world's largest marketer of residential use pesticides, Scotts has a special obligation to make certain that it observes the laws governing the sale and use of its products. For having failed to do so, Scotts has been sentenced to pay the largest fine in the history of FIFRA enforcement," said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice.
The federal judge finalized the company's misdemeanor plea involving the federal regulations that govern the registration of Scotts products on Friday. The company also finalized a separate civil administrative agreement with the U.S. Environmental Protection Agency (EPA). According to a letter from ScottsMiracle-Gro Chairman and CEO Jim Hagedorn, they reached the agreement after an investigation that lasted over four years with the company's full cooperation.
Scotts pleaded guilty in February 2012 to illegally applying insecticides to its wild bird food products that are toxic to birds, falsifying pesticide registration documents, distributing pesticides with misleading and unapproved labels, and distributing unregistered pesticides. This is the largest criminal penalty under FIFRA to date.
In the separate agreement with the EPA, which is the largest civil settlement under FIFRA to date, Scotts agreed to pay more than $6 million in penalties and spend $2 million on environmental projects to resolves additional civil pesticide violations. The violations include distributing or selling unregistered, canceled, or misbranded pesticides, including products with inadequate warnings or cautions.
“The misuse or mislabeling of pesticide products can cause serious illness in humans and be toxic to wildlife,” said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. “Today's sentence and unprecedented civil settlement hold Scotts accountable for widespread company noncompliance with pesticide laws, which put products into the hands of consumers without the proper authorization or warning labels.”
Hagedorn said the DOJ's investigation identified conduct that was not consistent with the company's core values, but ultimately resulted in improvements to the company's regulatory compliance programs.
"As we reach closure on these issues, it's important for all of our stakeholders to know that we have learned a lot from these events and that new people and processes have been put in place to prevent them from happening again," Hagedorn said. "Our consumers are at the heart of our business, and I hope they'll see our openness, cooperation, and acceptance of responsibility are all a part of our commitment to provide products they can trust and rely upon."
In the plea agreement, Scotts admitted that it applied the pesticides Actellic 5E and Storcide II to its bird food products even though EPA had prohibited this use. Scotts had done so to protect its bird foods from insect infestation during storage, according to the EPA announcement. Scotts admitted that it used these pesticides contrary to EPA directives and in spite of the warning label appearing on all Storicide II containers stating, “Storcide II is extremely toxic to fish and toxic to birds and other wildlife.” Scotts sold the treated bird food for two years after it began marketing its bird food line. According to EPA, by the time it voluntarily recalled these products in March 2008, Scotts had sold more than 70 million units of bird food illegally treated with pesticide that is toxic to birds.
In addition to the $4 million criminal fine, Scotts will contribute $500,000 to organizations that protect bird habitat, including $100,000 each to the Ohio Audubon's Important Bird Area Program, the Ohio Department of Natural Resources' Urban Forestry Program, the Columbus Metro-Parks Bird Habitat Enhancement Program, the Cornell University Ornithology Laboratory, and The Nature Conservancy of Ohio to support the protection of bird populations and habitats through conservation, research, and education.
While the company stressed that the agreement neither admits nor denies the allegations, it believes concluding the matter is in the best interest of the company, its shareholders and its associates.
"In both the civil and criminal cases we have fully cooperated with the government and have accepted responsibility for these events," Hagedorn said. "This has been a difficult time for us and we are glad to have put it behind us. I want to thank our associates who committed themselves to resolving this matter and I also want to thank both the EPA and DOJ for the professional way in which they handled it."
At the time the criminal violations were discovered, EPA also began a civil investigation that uncovered numerous civil violations spanning five years. Scotts' FIFRA civil violations included the nationwide distribution or sale of unregistered, canceled, or misbranded pesticides, including products with inadequate warnings or cautions. As a result, EPA issued more than 40 Stop Sale, Use or Removal Orders to Scotts to address more than 100 pesticide products.
In addition to the $6 million civil penalty, Scotts will complete environmental projects, valued at $2 million, to acquire, restore and protect 300 acres of land to prevent runoff of agricultural chemicals into nearby waterways.
ScottsMiracle-Gro posted an open letter from Mr. Hagedorn on its website regarding the criminal and civil matters.
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