Tobacco Documents Online

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA GREE ~+188o+RO DIVISION W/rdSTGN-SfT 4EM FLUE-CURED TOBACCO COOPERATIVE ) STABILIZATION CORPORATION ) 1304 Annapolis Drive ) Raleigh, North Carolina 27608 j ) and j ) THE COUNCIL FOR BIJRSEY TOBACCO, ) INC. ) 3070 Harrodsburg Road ) Lexington, Kentucky 40503 ) ) and ) ) UNIVERSAL LEAF TOBACCO COMPANY, ) INCORPORATED ) 1501 North Hamilton Street ) Richmond, Virginia 23230 ) ) and ) ) PHILIP MORRIS INCORPORATED ) 120 Park Avenue ) New York, New York 10017 ) ) and ) ~ R.J. REYNflLDS TOBACCO ZOIIPANY ) 401 ?;ain Street ) Winston-Salem North Carolina ) 27102 ) Civil Action No. s,` ''-31' l 3`'~ and ) ) GALLINS VENDING COMPANY ) 715 Stadium Drive ) Winston-Salem, North Carolina ) 27101 Plaintiffs, ) ) ) ) vs . ) UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 401 M Street, S.W. ) Washington, D.C. 20460 ) ~ ) m O Ct; Gb ISSUE 50 %IT 00 APPENDIX B

and ) ) CAROL $RaWNER ) Administrator, Environmental ) Protection Agency ) 401 M Street, S.W. ) Washington, D.C. 20460, ) ) Defendants. ) 2OKPLAINT TOR DECLARATCRY AND INJDNCT RLLIZF Plaintiffs, for their Complaint, allege as follows: NATIIRE OF THE ACTION 1. This is an action against defendant Environmental Protection Agency ("EPA" or "Agency") and defendant Administrator Carol Browner seeking review of EPA's January 7, 1993, decision to classify environmental tobacco smoke ("ETS") as a"Gre+•" A" ("known human") carcinogen and the risk assessment on which that classification is based. EPA's actions violate the Radon Gas and Indoor Air Quality Research Act of 1986 ("Radon Act"), 42 U.S.C. ; 7401, note, the Adninistrative Procedure Act ("APA"), 5 U.S.C. J§ 701 et seq., and the guarantee of due process of law in the United States Constitution, U.S. Const. amend. V. Plaintiffs seek a declaration that EPA's classification of ETS as a Group A carcinogen and the underlying risk assessment are arbitrary, capricious, violative of the procedures required by law, and unconstitutional. As further relief, plaintiffs seek a permanent injnnct.ion xequiring EPA to withdraw its decision of January 7, 1993, ard the accompanying risk assessment. 2

2. EPA's risk assessment of ETS, entitled "Respiratory Health 'Effects of Passive Smoking: Lung Cancer and Other Disorders" ("ETS Risk Assessment"), formally designates ETS as a Group A carcinogen, the highest carcinogenic designation under EPA's scheme for classifying suspect carcinogens. The classification of ETS as a Group A carcinogen was intended to and in fact did have a substantial impact throughout the country, including but not limited to compelling increased restrictions on smoking by private entities and all levels of government. EPA's actions with regard to ETS violated express statutory restrictions on its authority in the Radon Act and violated statutory commands to convene and consult with specific advisory committees. 3. EPA's classification of ETS as a Group A carcinogen is wrong as a matter of law and science and, as such, is arbitrary and capricious. As demonstrated in this Complaint EPA was able to reach its conclusion only by manipulating and "cherry-picking" data, ignoring critical statistical studies and chemical analyses, failing to account for confounding factors and sources of bias, violating basic statistical principles designed to minimize the possibility that an apparent association is due to chance, and generally altering EPA's models, assumptions, and methodologies when use of the Agency's usual models, assumptions, and methodologies wculd not have supported its conclusions. The classification of ETS ard the underlying risk assessment violated 3

EPA's own guidelines on how risk assessments should be performed, were the product of agency bias and violated plaintiffs' rights to due process of law. 4. The failure of EPA to base its classification of ETS on sound scientific principles and methodologies is exactly the type of agency action that an Expert Panel convened by former EPA Administrator Reilly recently criticized. That Panel found that too often EPA science "lacks credible quality assurance, quality control, or peer review," and "does not give sufficient attention to validating the models, scientific assumptions, and databases it uses." It also concluded that "(t]he interpretation and use of science is uneven and hrZhazard across programs and issues at EPA." More critically, the Panel found that EPA improperly ignores science entirely in its early decision making and is perceived as "adjusting" science to fit its predetermined policy. gafeauardinq the Futures Credible Science. Credible Decisions. The Re2ort of the Exflert Panel on the Role of Science at EPA (March 1992). Nowhere are these criticisms more justified than in the Agency's actions regarding ETS. OUTLINE OF COKPLAINT gaae 1 . THE PARTIES . . . . . . . . . .. . . . . . . . .. . 6 2. JTJRISDICTION AND i1ENLTE. . . . . . . . . . . . . . 8 3. FACTOAL ALILEGATIONS . . . . . . . . . . . . . . . 8 A. EPA's Actions are in Derogation of the Express Terms of the Radon Act . . . . . . . 8 4

B. The classification of ETS as a Group A Carcinogen is Arbitrary and Capricious . . . 10 1. EPA's Analysis of ETS Epidemiology Does Not Support a Group A Class if ication . . . . . . . . . . . . 10 a. The Epidemiologic Studies . . . . . 12 (i) Chance . . . . . . . . . . . 12 (ii) Confounding . . . . . . . . 15 (iii) Bias . . . . . . . . . . . . 17 ( iv ) Strength . . . . . . . . . . 18 (v) Dose-Response . . . . . . . 20 (vi) Consistency . . . . . . . . 20 b. EPA's Meta-Analysis of Epidemiologic Studies Provides No Basis for a Group A Classification . . . . . . . . . . 21 2. EPA Improperly `:tlied Upon a Proxy Substance to Justify Its Group A Classification . . . . . . . . . . . . 25 C. EPA Failed to Follow Itt Own Guidelines . . 28 1. Risk Assessment Guidelines . 2. Exposure Assessment Guidelines . . . . 33 D. Classification of ETS as a Group A Carcinogen Constitutes Final Agency Action . 35 E. Plaintiffs Have Been Injured By EPA's Actions . . . . . . . . . . . . . . . . . . 37 4. CLAIMS FOR RELIEF A. COUNT I - EPA Lacked Authority Under The Radon Act To Classify ETS As a Group A Carcinogen And Illegally Conducted The ETS Risk Assessment . . . . . . . . . . . . 40 B. COUNT II - The Classification Of ETS As a Group A Carcinogen Is Arbitrary, Capricious, And Otherwise Not In Accordance With Law . . . . . . . . . . . . 43 Gb ~ 5 Gl7 O Gt 0D Go ?J

C. COUNT III - EPA Violated The APA By Failing To Comply With Its Own Guidelines . . . . . . . . . . . . . . . . 45 D. COUNT ZV - EPA Violated Due Process By Failing To Comply With Statutory Restrictions, Required Procedures, And Its own Guidelines . . . . . . . • . • . . 46 '1M pARTiEB 5. Plaintiff Flue-Cured Tobacco Cooperative Stabilization Corporation ("Flue-Cured Co-op") is a North Carolina corporation with its principal place of business in Raleigh, North Carolina. Flue-Cured Co-op, which is a cooperative marketing association, is owned by and serves approximately 180,000 growers and workers in Florida, Alabama, Georgia, South Carolina, North Carolina and Virginia, purchasing flue-cured tobacco from growers and selling it to cigarette manufacturers. Flue-Cured Co-op administers the statutory price support program for flue-cured tobacco under contractual agreement with the U.S. Department of Agriculture's Commodity Credit Corporation. 6. Plaintiff The Council for Burley Tobacco, Inc. ("The Burley Council") is a Kentucky corporation with its principal place of business in Lexington, Kentucky. The Burley Council represents growers, dealers, marketing cooperatives and auction warehouses ongaged in the production of burley tobacco and its sale to cigarette manufacturers. 7. Plaintiff Universal Leaf Tobacco Company, Incorporated ("Universal Leaf") is a Virginia Corporation with its principal 6

place of bLisiness-in Richmond, Virginia. Universal Leaf purchases leaf tobacco from growers, processes it and sells it to cigarette manufacturers. 8. Plaintiff Philip Morris Incorporated ("Philip Morris") is a Virginia corporation with its principal place of business in New York, Kav York. 9. Plaintiff R.1. Reynolds Tobacco Company ("Reynolds") is a New Jersey corporation with its principal place of business in Winston-Salem, North Carolina. 10. Plaintiffs Philip Morris and Reynolds at all times relevant to this action, were and continue to be engaged in the manufacture and distribution of cigarettes. 11. 'Plaintiff Gallins Vending Company ("Gallins") is a North Carolina corporation with its principal place of business in Winston-Salem, North Carolina. Gallins is engaged in the distritmtitin af cigarettes through its placement and servicing of vending machines containing cigarettes in various retail and other establishments throughout the Winston-Salem, North Carolina area. 12. Plaintiffs have been and will continue to be directly affected and injured by defendants' unauthorized and unlawful decision to classify ETS as a human carcinogen. 13. Defendant EPA is an independent agency of the Executive Branch established by Congress to coordinate and implement 7

federal governmental policy regarding the environment. EPA is subject to the Radon Act and the APA. 14. Defendant Carol Browner is the Administrator of EPA. This action is maintained against her in her official capacity. Administrator Browner ("the Administrator") is responsible for ensuring that the EPA complies vith the terms of the Radon Act, the APA, and EPA policies and quidelines. JIIR2sDICTroN AND VENUE 15. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331. Declaratory relief is authorized by 28 U.S.C. 3§ 2201-2202 and Fed. R. Civ. P. 57. Judicial review is aL6,iorized by 5 U.S.C. ;§ 701, g& sec. 16. Venue is proper pursuant to 28 U.S.C. § 1391(e). TACTUAL ALLEGATZONB A. EPAIs Actions are in Derogation of the ZXpress Terms of the Radon Act 17. The Radon Act, which is the sole source of EPA's authority over ETS, authorizes EPA only to establish a research program relating to indoor air quality. Section 404 of the Act states: "Nothing in this title shall be construed to authorize the Administrator to carry out any regulatory program or any activity arber than research, development, and related reporting, information dissemination, and coordination activities specified in this title." dD .1 c~D8 O ~ ~ cn

18. EPA thus has no authority either (i) to regulate indoor air quality, or (ii) to take any action, other than research, in preparation for such regulation. For this reason, the final regulatory classification of ETS as a Group A carcinogen is beyond EPA's authority. Such classification serves only impermissible regulatory purposes and therefore is activity expressly prohibited by the Radon Act. 19. The Radon Act required EPA to establish two new committees "to assist [it] in carrying out the research program~ for radon gas and indoor air quality." The first committee, the "Federal Agency Advisory Committee," was to be composed of representatives from various federal agencies concerned with indoor air. The second committee, the "Radon Act Advisory Committee," was to be composed of representatives from the states, the scientific co=nmunity, industry, and public interest organizations. In violation of the Radon Act, EPA has never estab2ished the Radon Act Advisory Committee. 20. Contrary to the requirements of the Radon Act, EPA initiated, prepared, and reviewed the ETS Risk Assessment without consulting with the Federal Agency Advisory Committee or, obviously, the Radon Act Advisory Committee. 21. As a result of EPA's violation of the requirements of the Radon act, Tspresentatives Trom industry, the states, the scientific commvnity,'amid public interest organizations were precluded from assistirg'EPA in the manner required by Congress. 9

8. TDe Classificatioa of ZT8 as a oroup A Careiaogen is l,rbitrarv aAd CApricious 22. To arrive at its classification of ETS as a Group A carcinogen, EPA deviated from accepted scientific principles of chemistry, epidemiology and toxicology as well as its own quidelines for conducting cancer risk assessments. EPA manipulated and «cberry pickedw scientific data, ignored contrary studies, and employed scientific models, assumptions, and methodologies not accepted by the scientific community, including EPA in other contexts. 23. In particular, EPA based its classification of ETS as a Group A carcinogen on (a) epidemiologic studies on ETS and (b) the purported similarities between mainstream smoke and ETS. Neither basis provides a scientific foundation for EPA's conclusion. l. EPA's Analysis of LTB Epidemiology Does Yat EMDOrt a Group A Classification _ 24. Epidemiology is the study of the occurrence of disease in human populations. Investigators observe patterns of disease occurrence and attempt to statistically correlate disease with potential causes of disease by comparing the incidence or rate of disease in one group (exposed to the factor being studied) to the incidence or rate in a second group (unexposed to the factor being studied). 3he results of the studies are reported as statistical correlations-or sssociations which are commonly 10