The Osteen Decision

The Osteen Decision

July 17, 1998
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scientists on IAQC's final review panel identify the criteria used to determine similarity. 30 EPA's citations reveal only summaries of findings on MS-SS similarities and ETS biomarkers. 31


29 ( continued) of the action, "[t]here is an overwhelming institutional bias in favor of justifying the result in any way possible'")

30 The data in Chapter 3 "do not . . . adequately support the conclusion that the two are chemically similar. . . . [T]he data that are in there, speaking as a chemist, they simply don't make the case." 1992 IAQC Re I view at 11-41 (Dr Daisey) (JA 11,969). "That also brings you to an issue sue of what you mean by 'chemically similar,, which is not so simple to discuss . . . . [P]erhaps we don't have to consider it. But in a broader sense, the chapter often talks about sort of vague quantitative terms . . . . id. at 11-43 (JA 111,971). "What does it ;mean? What is the test for chemical similarity?" Id. at 11-51 (Dr. Hammond) (JA 11,979). "[T]he data . . . simply do not demonstrate that they are similar. There are simply not enough data . . . . [Y]ou're not going to have that data, and ever if you did, you'd: have to decide on criteria for what constitutes similarity and what does not constitute similarity." Id. at 11-77 (Dr. Daisey) (JA 12,005).

31 Instead of explaining the criteria used to make findings, EPA's citations re I veal more uncertainty. "Standardized testing protocols for assessing the physical End chemical: nature of SS emissions . . . do not! exist, and data on SS :are not as extensive as those for MS emissions." ETS Risk Assessment at 3-2.

Although ETS is a major sou emissions." ETS Risk Assessment at 3-2.

ETS Risk Assessment at 3-2.

Although ETS is a major source of indoor air contaminants, the actual contribution of ETS to indoor air is difficult to assess due to the background levels of many contaminants contribute from a variety of other indoor and outdoor sources. Relatively few of the individual constituents of the ETS mix have been identified and characterized. In addition, little is known about the role of individual ETS constituents in

(continued...) 62

The record does not support EPA's arguments that EPA took MS- ETS differences into account and, despite them, concluded ETS is a known human carcinogen because nonsmokers are exposed to and absorb carcinogens. EPA conceded that dilution, aging, and exposure characteristics fundamentally distinguish ETS from mainstream smoke, and "raise . . . questions about the carcinogenic potential of ETS." ETS Risk Assessment at 2-7 thru 2-8, 4-29, 6-6. See also Draft Responses at 14-16 (JA 6,455-57). The record does not explain how, after raising these questions, EPA could classify ETS a known human carcinogen based on similarities between SS and MS. The record also fails to explain whether or how EPA determined that, because some components of ETS may be absorbed, questions raised in other areas of the assessment about the carcinogenic potential of ETS were no longer relevant. Finally, both sides cite to independent studies on ETS, done by third parties, to support their arguments. Both sides often lay claim to the same studies. The studies predominantly contain


31 ( ... continued) eliciting the adverse health and nuisance effects observed.

Id. at 3-18.


information useful to both sides, and often conflict with one another. The court finds one review particularly relevant, a review conducted within EPA on the ETS Risk Assessment. EPA's Risk Criteria Office, a group of EPA risk assessment experts, concluded that EPA failed to reasonably explain how all relevant data on ETS, evaluated according to EPA Risk Assessment Guidelines, causality criteria, can support a Group A classification. Acting Director Chris DeRosa advised EPA that the evidence "support[ed] the conclusion that ETS be classified as a Group B1 carcinogen." 32 EPA Toxicologist Larry Glass concluded, "it is recommended that the [epidemiological] evidence be summarized as being limited . . . . This would classify ETS into a weight-of-the-evidence Group Bl." 33 Office Director Terry Harvey also concluded that the ETS Classification's analysis violated EPA's Risk Assessment Guidelines: ,[l]ike it or not,


32 EPA Memorandum from Chris DeRosa, Acting Director Environmental Criteria and Assessment Office, to William H. Farland, Director, Office of Health and Environmental Assessment (OHEA) 1 (April 27, 1990) (JA 6,651).

33 Id. at 4-5 (JA 6,654-55). The same author recognizes "tremendous scientific, regulatory, and political ramifications of categorizing a substance as a Group A carcinogen. . . . [G]iven the inherent limitations of the data, and the comparative novelty of the approach used to interpret the data I would recommend that this approach not be used as the basis of a Group A classification." Id. at 4 (JA 6,654).


EPA should live within its own categorization framework or clearly explain why we chose not to do so." 34

In summary, Plaintiffs raise legitimate questions not addressed in the record regarding EPA's bioplausibility theory. If confronted by a representative committee that voiced industry concerns, EPA would likely have had to resolve these issues in the record. It is not clear whether EPA could have or can do so. These issues are more than periphery. If EPA's a priori hypothesis fails, EPA has no justification for manipulating the Agency's standard scientific methodology.

C. EPA's Choice of Epidemiological Studies

By the time EPA released the ETS Risk Assessment in 1993, 33 studies had analyzed the lung cancer risk of nonsmoking females married to smoking spouses, 12 studies had analyzed the risk of females exposed to ETS in the workplace, and 13 studies had analyzed the risk of females exposed to ETS in childhood. Six of the 58 analyses (10.3%) reported a statistically significant association between ETS exposure and lung cancer for


34 EPA Memorandum from Terry Harvey, Director, Environmental Criteria and Assessment Office, to Linda Bailey, Technical Information Staff, OHEA 2 (March 24, 1992) (emphasis added) (JA 6,661).


nonsmoking females; two of 13 analyses for male nonsmokers were significant. EPA chose 31 of the 33 studies done on nonsmoking females married to smoking spouses. Of the 33 studies completed in 1993, three large U.S. studies were not completed at the time EPA conducted its second IAQC review. EPA used interim results from one of the three, the Fontham study, and did not include the other two in its overall assessment. EPA did not draw its conclusions directly from the 31 studies it chose. Instead, EPA pooled the results of the studies and arranged the data into categories by geographic region and exposure level. EPA then organized and analyzed the studies by the quality of their methodology. This technique of synthesizing findings across related studies is known as meta-analysis.

The Risk Assessment gives short notice to why the childhood or workplace studies were not evaluated. The assessment states,

[t]he use of a more homogenous group allows more confidence in the results of combined study analyses . . . . Some [studies] also provide information on childhood and/or workplace exposure, but there is far less information on these exposures; therefore, in order to develop one large database for analysis, only the female exposures from spousal smoking are considered.

ETS Risk Assessment at 5-1. The Assessment's overview explains only that childhood and workplace studies are fewer, represent


fewer cases, and are generally excluded from EPA's analysis. Id. at 1-8. The Addendum mentions the two large U.S. female nonsmoker studies but does not explain why the two were excluded but the Fontham study included. In its first review, IAQC stated that one of four criteria necessary to conduct a meta-analysis is a "precise definition of criteria used to include (or exclude) studies." EPA, An Report: Review of Draft Environmental Tobacco Smoke Health Effects Document, EPA/SAB/IAQC/91/007 at 32-33 (1991) (SAB 1991 Review) (JA 9,497-98). Regarding the studies chosen for the ETS Risk Assessment, IAQC stated,

[s]pecific criteria for including studies was not provided. The importance of this was reinforced at the Committee meeting when a reanalysis was presented on a different set of studies than those in the report. This resulted in a change in the overall risk estimate. Decisions as to study inclusion should be made prior to analysis, based on clearly stated criteria. It is also desirable to evaluate the impact on conclusions of closely related, but excluded, studies.

Id. at 33 (first emphasis added) (JA 9,498). In its 1992 review, neither EPA or IAQC addressed again the criteria used to determine which studies were included in the meta-analysis. IAQC stated that the combination of studies used provided a scientifically defensible basis for estimating the relative risk


of lung cancer associated with ETS among American women who have never smoked cigarettes. IAQC also supported EPA's general metaanalysis categorization of the studies which EPA had chosen. EPA, An SAB Report: Review of Draft Passive Smoking Health Effects Document, EPA/SAB/IAQC/93/003 at 3-4, 22 (1992) (IAQC review which EPA now misrepresents as a full explanation of EPA's database choice with express IAQC support) (JA 12,207-08, 12,226).

Plaintiffs contest that EPA exculded studies and data on workplace and childhood exposure to ETS, as well as the "two largest and most recent" U.S. spousal smoking studies, because inclusion would have undermined EPA's claim of a causal association between ETS exposure and lung cancer.
35 (Conformed Mem. Supp. >Pls.' Mot. Summ. J. at 66.) In its memorandum before this court, EPA offers four reasons for excluding the workplace and childhood data.

"First, such data are less extensive and therefore less reliable." (Conformed Mem. Supp. EPA's Cross Mot. Part. Summ. J. at 88.) EPA's three citations to the record do not support this


35 Plaintiffs also argue EPA included workplace data that affirmed the Agency's a priori hypothesis. The court does not find it necessary to reach the merits of this assertion.


All three citations state there is less information in the disputed studies. One of Dr. Brown's draft responses also calls the disputed studies inadequate, without reason or explanation. IAQC also recognized the disputed studies contained less information, however, IAQC concluded "the report should review and comment on the data that do exist . . . ." SAB 1991
Review at 5 (JA 9,470). The court has also found no record support or reason for the assertion that smaller studies are less reliable for purposes of meta-analysis. The purpose of meta-analysis is utilization of smaller studies.

Similarly, EPA's second assertion that workplace studies were excluded because of potential confounders is without record support. As evidence explaining why EPA excluded workplace studies from the meta-analysis, EPA cites IAQC's 1991 Review discussing limitations on EPA's reliance on spousal smoking as an indicator of ETS exposure. IAQC discussed that the structure of peoples, homes, where they live and work, the climate, and even parental influences impact spousal assessments. SAB 1991 Review at 30. The report cited by EPA does not state workplace data should be disregarded. If at all relevant, the discussion now cited by EPA supports the opposite conclusion.


EPA also claims that workplace exposure data were disregarded because only two studies made an attempt to classify by amount of exposure. Again, EPA's explanation appears nowhere in that portion of the Risk Assessment cited by the Agency. Further, EPA's explanation appears targeted only at workplace data contained within the spousal smoking studies and does not address the Agency's decision to disregard workplace and childhood exposure data reported outside spousal studies.

EPA's final proffer is that childhood studies rely upon distant memories and more limited lifetime exposure. Again, the record does not reveal that EPA used this as a selection criteria. Rather, an assessment on ETS and lung cancer on which EPA now relies states, "No consistent association has been reported for lung cancer and exposure to ETS in childhood, which might be expected to exert a greater effect . . . . of course, recall of ETS exposure in childhood is more difficult than recall of such exposure in adulthood.,' E.L. Wynder & G.C. Kabat, Environmental Tobacco Smoke and Lung-Cancer: A Critical Assessment, ORD.C.1 S59- 1 (JA 5,020). Nowhere in the Assessment is there a suggestion that childhood exposure data should be ignored.


EPA claims it excluded the latest two U.S. spousal smoking studies because they were submitted after the close of the comment period, and EPA already had a considerable database. EPA claims the Fontham study was used because it published interim results, was the largest U.S. ETS study, and its methodology was superior to any other study. The record contains discussion of the Fontham study, even testimony by Dr. Fontham. However, the evidence is not relevant to Plaintiffs' assertion. There being no indication of study criteria, it is not possible to determine whether or why the Fontham study was "superior." Even if EPA provided criteria, comparison would not be possible since EPA provides no discussion on the two U.S. spousal studies excluded. In summary, EPA's claim of having clearly established criteria is without merit. See Bowen v. Georgetown University Hosp., 488 U.S. 204, 212, 109 S. Ct. 468, 474, 102 L. Ed. 2d 493 (1988) ("The courts may not accept appellate counsel's post hoc rationalizations for agency [orders]."); American Trucking Ass'n v. Federal Highway Admin., 51 F.3d 405, 411 (4th Cir. 1995) (If agency action is to withstand judicial review, the agency's "actual reasoning . . . must prove reasonable, not the post hoc rationalization devised during litigation.").


EPA's study selection is disturbing. First, there is evidence in the record supporting the accusation that EPA "cherry picked" its data. Without criteria for pooling studies into a meta- analysis, the court cannot determine whether the exclusion of studies likely to disprove EPA's a priori hypothesis was coincidence or intentional. Second, EPA's excluding nearly half of the available studies directly conflicts with EPA's purported purpose for analyzing the epidemiological studies and conflicts with EPA's Risk Assessment Guidelines. See ETS Risk Assessment at 4-29 ("These data should also be examined in the interest of weighing all the available evidence, as recommended by EPA's carcinogen risk assessment guidelines (U.S. EPA, 1986a) (emphasis added)). Third, EPA's selective use of data conflicts with the Radon Research Act. The Act states EPA's program shall "gather data and information on all aspects of indoor air quality

Radon Research Act 403(a)(1) (emphasis added). In conducting a risk assessment under the Act, EPA deliberately refused to assess information on all aspects of indoor air quality.

At the outset, the court concluded risk assessments were incidental to collecting information and making findings. EPA steps outside the court's analysis when information collection


becomes incidental to conducting a risk assessment. In making a study choice, consultation with an advisory committee voicing these concerns would have resulted, at a minimum, in a record that explained EPA's selective use of available information. From such record, a reviewing court could then determine whether EPA "cherry picked" its data, and whether EPA exceeded its statutory authority.

D. EPA's Epidemiologic Methodology

Plaintiffs raise a list of objections asserting that EPA deviated from accepted scientific procedure and its own Risk Assessment Guidelines in a manner designed to ensure a preordained outcome. Given the ETS Risk Assessment shortcomings already discussed, it is neither necessary or desirable to delve further into EPA's epidemiological web. However, two of Plaintiffs, arguments require mention." The first contention is


36 The court finds it unnecessary to resolve Plaintiffs, remaining methodological contentions: (1) EPA inexplicably departed from its stated procedure for selecting risk estimates from the spousal smoking studies when that allowed the Agency to increase its summary risk estimate for particular studies; (2) EPA did not include certain studies and data in its meta-analysis in order to exclude the possibility that confounders explain the association between ETS and cancer; (3) EPA adopted statistical testing methods rejected by epidemiologists, ignored the



EPA switched, without explanation, from using standard 95% confidence intervals to 90% confidence intervals to enhance the likelihood that its meta-analysis would appear statistically significant. This shift assisted EPA in obtaining statistically significant results. Studies that are not statistically significant are "null studies"; they cannot support a Group A classification. See Brock v. Merrell Dow Pharm., Inc., 874 F.2d 307, 312 (5th Cir. 1989) ("If the confidence interval is so great that it includes the number 1.0, then the study will be said to show no statistically significant 'association between the factor and the disease.").

EPA used a 95% confidence interval in the 1990 Draft ETS Risk Assessment, but later switched to a 90% confidence interval. Most prominently, this drew criticism from IAQC's epidemiologist, who was also a contributor to the ETS Risk Assessment:


36 ( ... continued) possibility that more than one confounder interacting jointly could explain the claimed association, and inconsistently interpreted the results of confounding analysis to promote finding an association; (4) EPA switched from a peer- reviewed methodology to an unpublished one in excluding study bias as an explanation for the claimed association; and (5) to create critical ETS dose-response evidence, EPA inexplicably used a trend analysis that included unexposed (i.e., control) subjects, in violation of EPA's Risk Assessment Guidelines and standard epidemiologic practice.


The use of 90% confidence intervals, instead of the conventionally used 95% confidence intervals, is to be discouraged. It looks like a[n] attempt to achieve statistical significance for a result which otherwise would not achieve significance.

Geoffrey Kabat,
Comments on EPA's Draft Report: "Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders", II.SAB.9.15 at 6 (July 28, 1992) (JA 12,185). Plaintiffs argue that established epidemiologic practice is to use 95% confidence intervals. As evidence, Plaintiffs point out EPA's prior risk assessments, including the 1990 ETS draft, consistently used 95% confidence intervals, as did previous ETS analyses by IARC, NRC, and the Surgeon General.
ETS Risk Assessment Chapter 5 states:

Throughout this chapter, one-tailed tests of significance (p=0.05) are used, which increases the statistical ability (power) to detect an effect. The 90% confidence intervals used for the analyses performed are consistent with the use of the one-tailed test. The justification for this usage is based on the a priori hypothesis . . . that a positive association exists between exposure to ETS and lung cancer.

ETS Risk Assessment at 5-2. Before this court, EPA explains the "use of the 95 percent confidence interval with the one-tailed test . . . would have produced an apparent discrepancy: study results that were statistically significant using the standard p-value of .05 might nevertheless have a 95 percent confidence


interval that included a relative risk of 1." (Conformed Mem. Supp. EPA's Cross Mot. Part. Summ. J. at 96.)

Plaintiffs, second methodological argument requiring comment states, EPA based ETS' Group A classification in large part on a resulting relative risk of only 1.19, without adequately explaining why the Agency had required every other Group A carcinogen to exhibit a much higher relative risk, or why it had recently found relative risks of 2.6 and 3.0 insufficient to classify other agents in Group A. All of the 15 chemicals or mixtures previously classified by 'EPA as Group A carcinogens have higher relative risks than ETS. See, e.g., ETS Risk Assessment at 4-15, 16 & 22 (Risk assessments on cigarette smoking demonstrate relative risks between 7 and 14.9 for lung cancer, and relative risks between 26 and 60 for undifferentiated carcinoma.); see also EPA Review Draft, Evaluation of the Potential Carcinogenicity of Electromagnetic Fields, EPA/600/6901/005B at 6-2 (October 1990) (JA 1,562) (declining classifying EMF as carcinogenic for lack of strong association with cancer where relative risks in studies seldom exceeded 3.0). IAQC epidemiologist Dr. Kabat observed, "An association is generally considered weak if the odds ratio [relative risk] is under 3.0 and particularly when it is under 2.0, as is the case in the


relationship of ETS and lung cancer." E.L. Wynder & G.C. Kabat, Environmental Tobacco Smoke and Lung Cancer: A Critical Assessment, I.SAB.7.1 at 6 (JA 7,216).

EPA responds that the most impressive evidence from the epidemiologic studies is the consistent results of many studies showing increased risk, and the dose-response relationships showing the most risk to the most exposed nonsmokers. EPA explains that ETS' diluted concentration in the atmosphere accounts for the low strength of association.

The record and EPA's explanations to the court make it clear that using standard methodology, EPA could not produce statistically significant results with its selected studies. Analysis conducted with a .05 significance level and 95% confidence level included relative risks of 1. Accordingly, these results did not confirm EPA's controversial a priori hypothesis. In order to confirm its hypothesis, EPA maintained its standard significance level but lowered the confidence interval to 90%. This allowed EPA to confirm its hypothesis by finding a relative risk of 1.19, albeit a very weak association.

EPA's conduct raises several concerns besides whether a relative risk of 1.19 is credible evidence supporting a Group A classification. First, with such a weak showing, if even a


fraction of Plaintiffs' allegations regarding study selection or methodology is true, EPA cannot show a statistically significant association between ETS and lung cancer.

Second, the court's conclusions regarding EPA's motive for reducing the confidence level are based upon EPA's litigation explanations and circumstantial evidence from the record. EPA does not provide explanation in the ETS Risk Assessment or administrative record. When an agency changes its methodology mid- stream, as EPA did here, it has an obligation to explain why. See Western States -Petroleum Ass'n v. EPA, 87 F.3d 280, 284 (9th Cir. 1996) ("EPA -may not depart, sub silento, from its usual rules of decision to reach a different, unexplained result in a single case.'"); Natural Resources Defense Council, Inc. v. EPA, 859 F.2d 156, 205-11 (D.C. Cir. 1988) (invalidating an EPA rule because EPA failed to explain its mid-proceeding switch on the utility of an upset defense); see also Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. EPA, 768 F.2d 385, 399 (D.C. Cir. 1985) (EPA failed to explain why it departed from "established specific statistical criteria for determining whether a fuel will cause a vehicle to exceed emission standards . . . .").

Finally, when an agency conducts activities under an act authorizing information collection and dissemination of findings,


the agency has a duty to disseminate the findings made. EPA did not disclose in the record or in the Assessment: its inability to demonstrate a statistically significant relationship under normal methodology; the reasoning behind adopting a one-tailed test, or that only after adjusting the Agency's methodology could a weak relative risk be demonstrated. Instead of disclosing information, the Agency withheld significant portions of its findings and reasoning in striving to confirm its a priori hypothesis.

E. Summary of the Assessment and Record

In reviewing the parties' arguments, the court has given the benefit of many doubts to EPA by allowing the Agency to adopt third party statements, such as IAQC reviews, as Agency reasoning. EPA, the decision maker, not IAQC, the independent advisor, has the duty to demonstrate reasoned decision making on the record. See SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S. Ct. 1575, 1577, 91 L. Ed. 1995 (1947) ("(A] reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency."); Motor Vehicle Mfr. Ass'n of the United States v. State Farm Mut. Auto.


Ins. Co., 463 U.S. 29, 50, 103 S. Ct. 2856, 2870, 77 L. Ed. 2d 443 (1993) ([A]n "agency's action must be upheld, if at all, on the basis articulated by the agency itself."); see also H.R. Rep. No. 95-722, 95th Cong., 1st Sess., 16 (1977), reprinted in 1977 U.S.C.C.A.N. 3283, 3295 (JA 652-53) (The SAB "is intended to be advisory only. The Administrator will still have the responsibility for making the decisions required of him by law."). If EPA's appendages speak on behalf of the Administrator, the opposing conclusions reached between IAQC and the EPA Risk Criteria Office would demonstrate schizophrenia. Even allowing EPA the benefit of now adopting IAQC reasoning, the record does not provide answers to Plaintiffs' questions.

EPA determined it was biologically plausible that ETS causes lung cancer. In doing so, EPA recognized problems with its theory, namely the dissimilarities between MS and ETS. In other areas of the Assessment, EPA relied on these dissimilarities in justifying its methodology. EPA did not explain much of the criteria and assertions upon which EPA's theory relies. EPA claimed selected epidemiologic studies would affirm its plausibility theory. The studies EPA selected did not include a significant number of studies and data which demonstrated no association between ETS and cancer. EPA did not explain its


criteria for study selection, thus leaving itself open to allegations of "cherry picking."

Using its normal methodology and its selected studies, EPA did not demonstrate a statistically significant association between ETS and lung cancer. This should have caused EPA to reevaluate the inference options used in establishing its plausibility theory. A risk assessment is supposed to entail the best judgment possible based upon the available evidence. See Ethyl, 541 F.2d at 24. Instead, EPA changed its methodology to find a statistically significant association. EPA claimed, but did not explain how, its theory justified changing the Agency's methodology. with the changed methodology and selected studies, EPA established evidence of a weak statistically significant association between ETS and lung cancer.


Plaintiffs have moved to supplement the pleadings pursuant to Fed. R. Civ. P. 15(d). Plaintiffs, Supplemental Pleading seeks declaratory and injunctive relief against EPA relating to the Agency's alleged unlawful efforts to regulate indoor air,


tobacco products, and smoking, as documented in August 1996 by EPA's Inspector General."

The Supplemental Pleading contains two counts. Supplemental Count I alleges EPA illegally funds and controls a private entity that drafts indoor air ventilation standards that are adopted in state and local building codes. Count I also alleges additional ultra vires regulatory activities by EPA in regard to indoor air and smoking through the Agency's regional offices and third parties. Supplemental Count II seeks relief from these alleged activities pursuant to the Administrative Procedure Act's bar on agency actions "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." 5 U.S.C. 706(2)(C). Plaintiffs' proposed supplemental pleading does not affect briefing or the court's consideration of summary judgment on Counts I, II, and III. EPA responds that the proposed supplemental pleading is untimely and unrelated to the Complaint and will delay the conclusion of the case.

Fed. R. Civ. P. 15(d) allows a party with leave of court to file a supplemental pleading "setting forth transactions or

37 EPA Office of Inspector General, EPA's Relation hip with the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), Audit Report No. E1FAF513-0075-6100228 (August 14, 1996).


occurrences or events which have happened since the date of the pleadings sought to be supplemented." Courts apply the rule liberally to allow new claims and allegations to be added to a suit. See, e.g., Quaratino v. Tiffany & Co., 71 F.3d 58, 66 (2d Cir. 1995); Gillihan v. Shillinger, 872 F.2d 935, 941 (10th Cir. 1989); Keith v. Volpe, 858 F.2d 467, 474 (9th Cir. 1988). In reversing a district court's decision that refused leave to file a supplemental pleading, the Fourth Circuit found that supplemental pleadings so enhanced efficient administration of justice that they should be allowed as a matter of course:

(Supplemental pleadings are] a useful device, enabling a court to award complete relief, or more nearly complete relief, in one action, and to avoid the cost, delay and waste of separate actions which must be separately tried and prosecuted. So useful they are and of such service in the efficient administration of justice that they ought to be allowed as of course, unless some particular reason for disallowing them appears, though the court has the unquestioned right to impose terms upon their allowance when fairness appears to require them.

New Amsterdam Casualty Co. v. Waller, 323 F.2d 20, 28-29 (4th Cir. 1963). "While some relationship must exist between the newly alleged matters and the subject of the original action, they need not all arise out of the same transaction." Keith, 858 F.2d at 474. A supplemental pleading may state a new cause of


action so long as the matters have some relation to the claim set forth in the original pleading. Rowe v. United States Fidelity and Guaranty Co., 421 F.2d 937, 943 (4th Cir. 1970). A court may in its discretion deny leave to file a supplemental pleading where it finds undue delay, bad faith, dilatory tactics, undue prejudice to the opposing party, or futility. Quaratino, 71 F.3d at 66.

EPA first asserts Plaintiffs' proposed supplementation is untimely because the events relevant to the new allegations occurred prior to Plaintiffs' agreeing to the joint motion to establish a briefing schedule for summary judgment. The new allegations do not, however, affect the disposition or scheduling of the court's summary judgment analysis or decision. Further, the court notes EPA's Inspector General's report was not announced or otherwise disseminated by EPA. Approximately seven months after the report was issued, Plaintiffs sought permission to file the Supplemental Pleading. Seven months is not an unreasonable amount of time for multiple plaintiffs to learn of EPA's alleged activities, investigate, develop, and agree upon a complex legal claim.

EPA next argues Plaintiffs, new allegations are not sufficiently related to the Complaint. EPA states the Complaint


challenges EPA's ETS Risk Assessment, whereas the proposed Supplemental Pleading challenges EPA's involvement with a private entity. There are several reasons why the Complaint and proposed Supplemental Pleading are sufficiently related. First, both involve EPA's authority under the Radon Research Act. Specifically, both the Complaint and Supplemental Pleading involve EPA's authority to conduct regulatory activities under the Act. In deciding the parties, motions for summary judgment, the court has become familiar with the outer limits of EPA's authority under the Radon Research, Act. Second, ETS is the object of EPA's alleged regulatory attention in each set of allegations. As a result, EPA's conduct as alleged in the Supplemental Pleading causes the very harm for which Plaintiffs seek a remedy in the Complaint. Third, the court finds probable that EPA premises its involvement with private organizations, as alleged in the Supplemental Pleading, on the Agency's conclusions in the ETS Risk Assessment. Fourth, the court, in resolving this case, has become familiar with many organizations EPA has worked with in conducting the ETS Risk Assessment and in establishing de facto regulatory activities under the Radon Research Act. Clearly, the Supplemental Pleading has some relation to the Complaint.


The impact supplementing the pleadings would have in concluding the case concerns the court. EPA has spent years formulating and litigating the ETS Risk Assessment. Since EPA has been aggressively coordinating with and assisting regulatory programs based upon its ETS Risk Assessment, the court believes EPA desires a final resolution to Plaintiffs, original claims. EPA indicates such, stating "EPA wishes to conclude this case challenging its ETS Risk Assessment." (Defs.' Resp. Pls.' Mot. Supplemental Pleading at 5.) Supplementing the pleadings with new causes of action would significantly delay final judgment being entered in this case. As a general rule, such delay would prevent the parties from exercising their rights to appeal.

For nearly five years, the parties have disputed the validity of EPA's ETS Risk Assessment. Based upon the Assessment's conclusions, EPA is involved with other government and private entities. Resolving Plaintiffs' new allegations may entail pretrial motions and discovery, possibly prolonging the case for years. There is no just reason for so delaying final judgment regarding EPA's ETS Risk Assessment. However, Plaintiffs' new allegations are significantly related to the Complaint. Precedent as well as principles of judicial economy and justice urge the court to allow Plaintiffs' motion. To cure


this dilemma, the court will allow Plaintiffs to serve their supplemental pleading and will sua sponte make an express direction for the entry of judgment regarding the parties, motions for summary judgment. Accordingly, the court's judgment will be certified for review pursuant to Fed. R. Civ. P. 54(b). Though the court creates the possibility of the parties, appealing separately under the Complaint and Supplemental Pleading, there is little risk an appellate court would be faced with redundant issues. Plaintiffs, Supplemental Pleading, although related to the issues raised in the Complaint, is factually and legally independent from the issues raised in the Complaint. EPA will have 20 days after service of the Supplemental Pleading to respond.


In 1988, EPA initiated drafting policy-based recommendations about controlling ETS exposure because EPA believed ETS is a Group A carcinogen. See, e.g., EPA Memorandum from William K. Reilly, Administrator, to Congressman Thomas J. Bliley, Jr., U.S. House of Representatives 1 (March 24, 1992) (JA 6,374; 6,380-82) (Reilly Mem. II) (EPA began drafting a policy guide recommending workplace smoking bans before drafting the ETS Risk Assessment.)


Rather than reach a conclusion after collecting information, researching, and making findings, EPA categorized ETS as a "known cause of cancer" in 1989. EPA, Indoor Air Facts No. 5 Environmental Tobacco-Smoke, ANR-445 (June 1989) (JA 9,409-11). EPA's Administrator admitted that EPA "managed to confuse and anger all parties to the smoking ETS debate . . . . EPA Memorandum from William K. Reilly, Administrator, to Secretary Louis W. Sullivan 2 (July 1991) (JA 6,754). The Administrator also conceded, "[B]eginning the development of an Agency risk assessment after the commencement of work on the draft policy guide gave the appearance of . . . policy leading science . . . ." Reilly Mem. II at 1 (JA 6,391).

In conducting the Assessment, EPA deemed it biologically plausible that ETS was a carcinoqen. EPA's theory was premised on the similarities between MS, SS, and ETS. In other chapters, the Agency used MS and ETS dissimilarities to justify methodology. Recognizing problems, EPA attempted to confirm the theory with epidemiologic studies. After choosing a portion of the studies, EPA did not find a statistically significant association. EPA then claimed the bioplausibility theory, renominated the a priori hypothesis, justified a more lenient methodology. With a new methodology, EPA demonstrated from the 88

selected studies a very low relative risk for lung cancer based on ETS exposure. Based on its original theory and the weak evidence of association, EPA concluded the evidence showed a causal relationship between cancer and ETS. The administrative record contains glaring deficiencies.

The Radon Research Act authorizes information collection, research, industry inclusion, and dissemination of findings. Whether these actions authorize risk assessments is a matter of general and interstitial statutory construction. So long as information collection on all relevant aspects of indoor air quality, research, and dissemination are the lodestars, the general language of the Radon Research Act authorizes risk assessments as they are defined by NRC and explained in EPA's Risk Assessment Guidelines.

It is clear that Congress intended EPA to disseminate findings from the information researched and gathered. In this case, EPA publicly committed to a conclusion before research had begun; excluded industry by violating the Act's procedural requirements; adjusted established procedure and scientific norms to validate the Agency's public conclusion, and aggressively utilized the Act's authority to disseminate findings to establish a de facto regulatory scheme intended to restrict Plaintiffs,


products and to influence public opinion." In conducting the ETS Risk Assessment, disregarded information and made findings on selective information; did not disseminate significant epidemiologic information; deviated from its Risk Assessment Guidelines; failed to disclose important findings and reasoning; and left significant questions without answers. EPA's conduct left substantial holes in the administrative record. While so doing, produced limited evidence, then claimed the weight of the Agency's research evidence demonstrated ETS causes cancer.


Gathering all relevant information, researching, and disseminating findings were subordinate to EPA's demonstrating ETS a Group A carcinogen. EPA's conduct transgressed the general meaning of the Radon Research Act's operative language. Further, to the extent EPA's conduct in this matter entailed interstitial


38 Given the holdings in United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624 (1995) and United States v. Hartsell, 127 F.3d 343 (4th Cir. 1997), an argument may exist concerning where the federal government derives the authority to regulate indoor air quality, a patently intrastate environmental concern. Being neither interstate or commercial, it is unclear where indoor air finds a nexus with the instrumentalities of interstate commerce or how it substantially affects interstate commercial transactions. The Complaint does not raise these concerns. Since the court is granting Plaintiffs the complete relief requested, it is unnecessary to reach these issues.


construction of the Act, the court affords no deference to EPA. Congress did not delegate rule making or regulatory authority to EPA under the Act. EPA's conduct of the ETS Risk Assessment frustrated the clear Congressional policy underlying the Radon Research Act. See 131 Cong. Rec. S7035 (May 23, 1985) (purpose of the Act is to provide clear, objective information about indoor air quality).

EPA also failed the Act's procedural requirements. In the Radon Research Act, Congress granted EPA limited research authority along with an obligation to seek advice from a representative committee during such research. Congress intended industry representatives to be at the table and their voices heard during the research process. EPA's authority under the act is contingent upon the Agency hearing and responding to the represented constituents, concerns. The record evidence is overwhelming that IAQC was not the representative body required under the Act. Had EPA reconciled industry objections voiced from a representative body during the research process, the ETS Risk Assessment would very possibly not have been conducted in the same manner nor reached the same conclusions.

Because EPA exceeded its authority under the Radon Research Act and also failed the Act's procedural requirements, the court


will direct the entry of judgment in favor of Plaintiffs' motion for summary judgment and vacate Chapters 1 thru 6 of and the Appendices to EPA's Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders, EPA/600/6-90/006F (December 1992). To ripen its judgment for purposes of appellate review pursuant to Fed. R. Civ. P. 54(b), the court will make an express determination that there is no just reason for delay. Accordingly, the court need not address Plaintiffs, remaining arguments, Counts II, III, and IV of the Complaint. The court will also grant Plaintiffs' Motion to Supplement the Pleading.

An order and judgment in accordance with this memorandum opinion will be filed contemporaneously herewith.

This the 17th day July 1998.

[Signed] William L. Osteen
United States District Judge

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Gene Borio, Tobacco BBS (212-982-4645). WebPage: Tobacco BBS material may be reprinted in any non-commercial venue if accompanied by this credit


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