Trade secrets and information access in environmental law

The Law and Theory of Trade Secrecy: A Handbook of Contemporary Research

Volumn , Issue , 2011, Pages 442-466

  Lyndon, Mary L ^a  

^a ST JOHN'S UNIVERSITY   (United States)

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EID: 84881970572     PISSN: None     EISSN: None     Source Type: Book    
DOI: None     Document Type: Chapter

References (84)

1. I use 'EHS' and 'environmental' as synonyms, but my focus will be on the environment. Occupational health and safety and consumer product and food and drug management face similar problems in managing and distributing information. David Levine has analysed related issues in public infrastructure and other non- EHS settings. See David S. Levine, Chapter 16.
2. U.S. companies produced or imported 15 trillion pounds of chemical substances in 2002 (42 billion pounds per day) and 27 trillion pounds in 2005 (74 billion pounds per day), not including fuels, pesticide products, pharmaceuticals or food products. Michael P. Wilson and Megan R. Schwarzman, Toward a New U.S. Chemicals Policy: Rebuilding the Foundation to Advance New Science, Green Chemistry, and Environmental Health, 117 Envtl. Health Persp. 1202 (2009).
3. Richard Judson et al.,The Toxicity Data Landscape for Environmental Chemicals, 117 Envtl. Health Persp. 685 (2009).
4. There is a large literature on this topic. For general overviews, see David C. Vladeck, Information Access: Surveying the Current Legal Landscape of Federal Right- to- Know Laws, 86 Tex. L. Rev. 1787 (2008).
5. Mary L. Lyndon, Secrecy and Access in an Innovation Intensive Economy: Reordering Information Privileges in Environmental, Health and Safety Law, 78 U. Colo. L. Rev. 465 (2007) (hereinafter Lyndon, Secrecy and Access). For more detailed analyses, see Wendy E. Wagner, Commons Ignorance: The Failure of Environmental Law to Produce Needed Information on Health and the Environment, 53 Duke L.J. 1619 (2004).
6. Mary L. Lyndon, Secrecy and Innovation in Tort Law and Regulation, 23 N.M.L. Rev. 1 (1993) (hereinafter Lyndon, Secrecy and Innovation).
7. The 'moonshot' space program and the establishment of the Environmental Protection Agency (EPA) emerged from a common paradigm. See Richard J. Lazarus, The Greening of America and the Graying of the United States, 20 Va. Envtl. L.J. 75, 81 (2001).
8. Mark Sagoff , The Principles of Federal Pollution Control Law, 71 Minn. L. Rev. 19, 44 (1986).
9. James E. Krier and Clayton P. Gillette, The Uneasy Case for Technological Optimism, 84 Mich. L. Rev. 405 (1985).
10. 5 U.S.C. § 552 (2006).
11. Toxic Substances Control Act §§ 4-6 (codifi ed as amended at 15 U.S.C. § 2603- 26- 5). Sections 2 and 6 create a 'Catch 22' situation in which the EPA must prove that a chemical 'may present an unreasonable risk of injury to health or the environment' before the agency may require testing by the manufacturer.
12. 15 U.S. C. § 2613(b). EPA's disclosure regulations are consolidated at 40 C.F.R. §§ 2.105-2.311 (2008). Pursuant to their separate authorizing statutes, the regulations provide for public availability of air emissions data, 40 C.F.R. § 2.301; water effl uent information, 40 C.F.R. § 2.302; contaminants in drinking water, 40 C.F.R. § 2.304; and chemical health and safety information, 40 C.F.R. § 2.306, whether or not the data is claimed as proprietary.
13. For useful overviews, see generally John Applegate and Katherine Baer, Strategies for Closing the Chemical Data Gap (April 2006), www.progressivereform. org/articles/Closing_Data_Gaps_602.pdf.
14. Rena Steinzor and Matthew Shudtz, Sequestered Science: Secrets Threatening Public Health, (April 2007), www.progressivereform.org/articles/Secrecy_703.pdf.
15. Recent research on the eff ects of low- level chemical exposures is particularly relevant. See, e.g., Carl F. Cranor, Legally Poisoned: How the Law Puts Us at Risk from Toxicants (forthcoming 2011), which is discussed infra.
16. Kenneth Arrow et al., Economic Growth, Carrying Capacity, and the Environment, 268 Sci. 520, 520-1 (1995).
17. Frank Ackerman, Poisoned for Pennies: The Economics of Toxics and Precaution (2008).
18. Allen L. White, Why We Need Global Standards for Corporate Disclosure,
19. Law &Contemp. Probs. 167 (2006) (describing development of information function in EHS risk management).
20. Paul R. Kleindorfer and Eric W. Orts, Informational Regulation of Environmental Risks, 18 Risk Analysis 155 (1998);
21. Peter S. Menell, Structuring a Market- Oriented Federal Eco- Information Policy, 54 Md. L. Rev. 1435 (1995).
22. Council Regulation (EC) 1907/2006, on the Registration, Evaluation, Authorization and Restriction of Chemical Substances (REACH) [2006] O.J. L396 establishes a comprehensive set of requirements for chemicals and their safe use. It requires and supports collaborative research by all companies using the same chemical and will then publicly rank chemicals based on their toxicity.
23. See Mark Schapiro, Exposed: The Toxic Chemistry of Everyday Products and What's at Stake for Americana Power (2007). Countries that do not follow the EU's lead will fall behind and become dumping grounds for low quality and hazardous chemicals.
24. See, e.g., Richard A. Denison, Ten Essential Elements in TSCA Reform, 39 Envtl. L. Rep. 10,020 (2009).
25. Terry Collins, Toward Sustainable Chemistry, 291 Sci. 48 (2001).
26. 'Persistence' refers to the length of time the chemical can exist in the environment before being destroyed (i.e., transformed) by natural processes and 'bioaccumulation' refers to the process by which organisms may accumulate chemical substances in their bodies. See 64 Fed. Reg. 58,666 (October 29, 1999) (lowering reporting thresholds for certain persistent bioaccumulative toxic chemicals).
27. See Current Water Issues in Oil and Gas Development and Production: Will Water Control What Energy We Have?, 49 Washburn L.J. 423 (2010) (explaining that energy production consumes great amounts of water, an increasingly scarce resource).
28. Despite the risks that fracking poses to water, it was exempted from the Safe Drinking Water Act (SDWA) in 2005. See Energy Policy Act of 2005, Pub. L. No. 109- 58, § 1(a), 119 Stat. 594 (2005) (codifi ed as amended at 42 U.S.C. § 300h(d) (2006)).
29. See New York City Comments on: Draft Supplemental Generic Environmental Impact Statement (DSGEIS) on the Oil, Gas and Solution Mining Regulatory Program: Well Permit Issuance for Horizontal Drilling and High- Volume Hydraulic Fracturing to Develop the Marcellus Shale and Other Low- Permeability Gas Reservoirs, available at www.nyc.gov/html/dep/pdf/ natural_gas_drilling/nycdep_comments_fi nal_12- 22- 09.pdf.
30. The EPA has begun to study fracking and its eff ects. See Abrahm Lustgarten, EPA Launches National Study of Hydraulic Fracturing, Propublica, March 18, 2010, available at www.propublica.org/article/epa- launches- national- study- ofhydraulic-fracturing. Episodes of water contamination have sparked interest in Congress and at the EPA in re- examining the special confi dentiality provisions. See Editorial, The Halliburton Loophole, New York Times, November 3, 2009, at A28, available at www.nytimes.com/2009/11/03/opinion/03tue3.html (explaining that proposed Fracturing Responsibility and Awareness of Chemicals Act would remove exemption from Safe Drinking Water Act and require oil and gas fi rms to disclose chemicals used).
31. See Caroline Cox and Michael Surgan, Unidentifi ed Inert Ingredients in Pesticides: Implications for Human and Environmental Health, 114 Envtl. Health Persp. 1803 (2006).
32. In December 2009, the EPA opened a rule- making proceeding to consider requiring disclosure of inert ingredients. See 74 Fed. Reg. 68,215 (December 23, 2009).
33. Rachael Rawlins, Teething on Toxins: In Search of Regulatory Solutions for Toys and Cosmetics, 20 Fordham Envtl. L. Rev. 1 (2009).
34. Sarah E. Schaff er, Reading Our Lips: The History of Lipstick Regulation in Western Seats of Power, 62 Food &Drug L.J. 165, 202-25 (2007).
35. See, e.g., Anne C. Steinemann, Fragranced Consumer Products and Undisclosed Ingredients, 29 Envtl. Impact Assessment Rev. 32, 32-8 (2009) (discussing chemical analysis of six best- selling products which identifi ed nearly 100 volatile organic compounds (VOCs), none of which were listed on any product label, one of which was listed on one notice form, ten of which are regulated as toxic or hazardous under federal laws, and three of which are classifi ed as hazardous air pollutants).
36. Delia Gervin, You Can Stand Under My Umbrella: Weighing Trade Secret Protection Against the Need for Greater Transparency in Perfume and Fragranced Product Labeling, 15 J. Intell. Prop. L. 315 (2008).
37. Skin Deep, a safe cosmetics campaign associated with the Environmental Working Group, rates cosmetics for toxicity based on information that is publicly available; its website demonstrates the dearth of information available for most products. See www.cosmeticsdatabase.com/.
38. John S. Applegate, Bridging the Data Gap: Balancing the Supply and Demand for Chemical Information, 86 Tex. L. Rev. 1365, 1380-5 (2008).
39. Mary L. Lyndon, Information Economics and Chemical Toxicity: Designing Laws to Produce and Use Data, 87 Mich. L. Rev. 1795, 1810-16 (1989) (hereinafter Lyndon, Information).
40. See Hymowitz v. Eli Lilly &Co., 539 N.E.2d 1069 (1989) (articulating 'public risk' version of market share liability).
41. See Hymowitz v. Eli Lilly &Co., 539 N.E.2d 1069 (1989) (articulating 'public risk' version of market share liability).
42. See John S. Applegate, The Temporal Dimension of Land Pollution: Another Perspective on Applying the Breaking the Logjam Principles to Waste Management,
43. N.Y.U. Envtl. L.J. 757 (2008).
44. Daniel A. Farber, Probabilities Behaving Badly: Complexity Theory and Environmental Uncertainty, 37 U.C. Davis L. Rev. 145 (2003) (explaining that complex systems require careful monitoring and repeated interventions as they evolve).
45. Daniel A. Farber, Probabilities Behaving Badly: Complexity Theory and Environmental Uncertainty, 37 U.C. Davis L. Rev. 145 (2003) (explaining that complex systems require careful monitoring and repeated interventions as they evolve).
46. See Thomas O. McGarity, Sidney Shapiro and David Bollier, Sophisticated Sabotage: The Intellectual Games Used to Subvert Responsible Regulation 34-65 (2004).
47. David Michaels, Doubt is Their Product,
48. Scientific American 96, 96-101 (2005). Firms also withhold information. In 2005, the EPA fi ned DuPont U.S.$16.5 million for violating TSCA § 8(e) by not reporting data on the health risks posed by a chemical ingredient in Tefl on. See Thomas O. McGarity, The Complementary Roles of Common Law Courts and Federal Agencies in Producing and Using Policy- Relevant Scientifi c Information, 37 Envtl. L. Rev. 1027, 1035-49 (2007) (describing the interplay between courts and agencies in this case).
49. see also Marianne Lavelle, E.P.A.'s Amnesty Has Become a Mixed Blessing: Be Careful What You Wish For, Nat'l L.J., March 3, 1997, at A1 (explaining that, under an amnesty program in place from 1991 to 1996, manufacturers handed in 11,000 old, unpublished studies and adverse reaction reports).
50. See U.S. Gov't Accountability Office, Chemical Regulation: Options Exist to Improve EPA's Ability to Assess Health Risks and Manage its Chemical Review Program 32 (2005).
51. See U.S. Gov't Accountability Office, Chemical Regulation: Options Exist to Improve EPA's Ability to Assess Health Risks and Manage its Chemical Review Program 32 (2005).
52. TSCA § 14(d) (codifi ed as amended at 15 U.S.C. § 2613(d) (2006)) imposes a penalty of U.S.$5,000, one year in prison, or both for knowing willful disclosure of protected information. The 1996 Economic Espionage Act, 18 U.S.C. § 1832(a)(5), extended the 1918 Trade Secrets Act, 18 U.S.C.A. § 1905 (2006), to expand criminal liability for disclosures. However, in Chrysler Corp. v. Brown, 441 U.S. 281 (1979), the Supreme Court found that agencies with general rule- making authority may disclose information claimed to be protected by the Trade Secrets Act.
53. See, e.g., Andrew Vickers, Cancer Data? Sorry, Can't Have It, New York Times, January 22, 2008, at F8; Barry Meier, Contracts Keep Drug Research Out of Reach, New York Times, November 29, 2004 (describing eff ects on data availability of contracts between drug companies and academic researchers); Eric. G. Campbell and Eran Bendavid, Data Sharing and Data Withholding in Genetics and the Life Sciences: Results of a National Survey of Technology Transfer Offi cers, 6 J. Health Care L. &Pol'y 241 (2003)
54. Sheila Jasanoff , Transparency in Public Science: Purposes, Reasons, Limits, 69 Law &. Contemp. Probs. 21 (2006).
55. Robert K. Klee, Enabling Environmental Sustainability in the United States: The Case for a Comprehensive Material Flow Inventory, 23 Stan. Envtl. L.J. 131,
56. (2004) (arguing that material fl ow/mass balance information would enable transition to more effi cient system); Uwe M. Erling, Approaches to Integrated Pollution Control in the United States and the European Union, 15 Tul. Envtl. L.J. 1, 19 (2001) (explaining that lack of mass balance data for model facility blocked EPA experiment with a multimedia permit that would integrate and simplify permit requirements).
57. Lyndsey Layton, Use of Potentially Harmful Chemicals Kept Secret Under Law, Washington Post, January 4, 2010, at A1.
58. See George Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. Econ. 488 (1970).
59. Warranty law requires that information about latent risks be transmitted to buyers. 9 William R. Ginsberg and Philip Weinberg, Environmental Law and Regulation in New York § 2:9 (2d ed. 2009) (explaining that breach of implied warranty is closely related to the 'duty to warn' cause of action in negligence and strict product liability).
60. See, e.g., Restatement (First) of Torts § 529 cmt. a (1939) (pointing out that a statement containing a half- truth may be as misleading as a statement wholly false; the recipient of the statement is entitled to know the undisclosed facts insofar as they are material).
61. Margaret A. Berger and Aaron D. Twersky, Uncertainty and Informed Choice: Unmasking Daubert, 104 Mich. L. Rev. 257 (2005).
62. Access to knowledge may be seen as a human right. See Lea Bishop Shaver, Defi ning and Measuring A2K: A Blueprint for an Index of Access to Knowledge, 4 I/S: J.L. &Pol'y for Info. Soc. 235 (2008).
63. Guido Calabresi, Torts: The Law of the Mixed Society, 56 Tex. L. Rev. 519,
64. (1978) (emphasis in original).
65. Wesley Newcomb Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning, 26 Yale L.J. 710 (1917).
66. For instance, trade secret law balances the rights of employers to control the use of information and employees' right to work and use their skills and knowledge. Steven Wilf, Trade Secrets, Property, and Social Relations, 34 Conn. L. Rev.
67. Restatement (Third) of Unfair Competition § 40 cmt. c (1995) (discussing improper use of disclosure).
68. Pamela Samuelson and Suzanne Scotchmer, The Law and Economics of Reverse Engineering, 111 Yale L.J. 1575 (2002).
69. 'I own the bat' is irrelevant to the battery charge; 'it's my land', likewise, is not a defense to negligently caused harm. One owes a duty of reasonable care even to intruders on one's property. Katko v. Briney, 183 N.W.2d 657 (Iowa 1971). For an overview of the environment- property rights debate, see David M. Driesen, What's Property Got to Do with It?, 30 Ecol. L.Q. 1003 (2003).
70. Since exposures often aff ect resources that are already owned and ostensibly protected by conventional property rules, it seems that a battery, trespass or nuisance model is apposite, with the secrecy claimant as the defendant. Consideration of this topic is beyond the scope of this chapter.
71. Ruckelshaus v. Monsanto, 467 U.S. 986 (1984).
72. Thus, trade secrecy is particularly available in the agency context. The ability to fi ll in the blanks on an agency form produces the privilege.
73. Martin E. Halstuk, When Secrecy Trumps Transparency: Why the Open Government Act of 2007 Falls Short, 16 Comm. L. Conspectus 427 (2008).
74. Patricia M. Wald, The Freedom of Information Act: A Short Case Study in the Perils and Paybacks of Legislating Democratic Values, 33 Emory L.J. 649 (1984).
75. Nat'l Parks Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974). Under this ruling, agencies can negotiate for information and reach agreements to take custody of proprietary information.
76. Critical Mass Energy Project v. Nuclear Regulatory Comm'n, 975 F.2d 871,
77. (D.C. Cir. 1992) (en banc) (confi ning the reach of National Parks to information that is furnished to the government under legal obligation and categorically protecting voluntarily submitted information, provided that it is not customarily disclosed to the public by the submitter). Critical Mass intensifi es disincentives to disclose EHS data: it pays to stop revealing things now, as your practice will determine later FOIA outcomes.
78. Removing commercial secrecy from EHS risk management has been recognized as desirable by many legal scholars, including those cited in this chapter. See, e.g., Thomas O. McGarity and Sidney A. Shapiro, The Trade Secret Status of Health and Safety Testing Information: Reforming Agency Disclosure Policies, 93 Harv. L. Rev. 837 (1980).
79. 7 U.S.C. § 136a(c)(1)(F)(iii) (2006).
80. See 21 U.S.C. § 346a(i)(1) (2000).
81. Notice of Availability, Pesticides, 68 Fed. Reg. 18,977 (April 17, 2003). Arbitration is initiated by fi ling a request with the Federal Mediation and Conciliation Service (FMCS), but because FMCS has delegated its authority to the American Arbitration Association (AAA), requests are fi led with AAA and conducted pursuant to its rules. See 3 Law of Environmental Protection § 18:38 (Sheldon M. Novick et al. eds., 2004).
82. Proof of safety need not be as arduous as the struggles that have occurred over proof of harm; perhaps the arbitration model could be adapted to broader purposes. See Wendy Wagner, Using Competition- Based Regulation to Bridge the Toxics Data Gap, 83 Ind. L.J. 629 (2008).
83. See David S. Levine, Chapter 16.
84. Jerome H. Reichman, Rethinking the Role of Clinical Trial Data in International Intellectual Property Law: The Case for a Public Goods Approach, 13 Marq. Intell. Prop. L. Rev. 1, 32-3 (2009).