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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

expressed as relative risks. A relative risk is the ratio of the disease isscidence rate in the exposed group to the incidence rate in the unexposed group. A relative risk of 1.0 indicates that the observed disease incidence rate in the exposed group is the same as that in the unexposed group. A relative risk above 1.0 indicates that the disease incidence rate is greater in the exposed qzvup, while a relative risk less than 1.0 indicates that the disease incidence rate is smaller in the exposed group. 25. In recognition of tbe complexity of epidemiology and to ensure consistency in its methodology, EPA has adopted certain criteria by which it evaluates epidemiologic data. These criteria are set forth in EPA's own cancer risk assessment guidelines, "Guidelines for Carcinogen Risk Assessment," 51 Fed. .r Reg. 33992 (Sept. 24, 1986) (the "Risk Assessment Guidelines"). The Risk Assessment Guidelines provide that before a conclusion regarding whether an exposure causes a disease (a causal inference) cat, be based upon epidemiologic data, three criteria must be met: (i) the apparent statistical association must be unlikely to be produced by chance; (ii) the possibility of confounding (i.e. the role of other actual or potential factors in the apparent association) must have been considered and ruled out as an explanation for the association; and (iii) there must be no identified bias that could explain the apparent association. 31 FEd. Reg. 33999. In addition, EPA admits in its ETS Risk Assessment that epidemiologic data must also be assessed 11

against other criteria including: the consistency of the data, the stzength or'magnitude of the statistical association, and vhether the data exhibit a dose-response gradient. 26. As is set forth in the following paragraphs, the epidemiologic data relied upon by EPA do not satisfy these criteria and therefore are not sufficient to support a finding that -there is a causal relationship between ETS and lung cancer. According to EPA's own guidelines, such a finding must be made in order to classify a substance as a Group A carcinogen. Indeed the vast majority of the epidemiologic studies relied upon by EPA report no statistically significant overall association between spousal smoking and lung cancer. (a) The Epidc~:_Iocic Studies (i) sbaace 27. The test of statistical significance is crucial to the scientific analysis of epidemiologic data. Without this test, cause nrsd effect conclusions can be erroneously attributed to associations occurring by chance alone, simply due to random sampling variation. Because chance occurrences can never be completely excluded from a study, the likelihood or probability that an observed association could be due to chance is described through the use of tests for statistical significance. Statistical significarce tests can be expressed in terms of a confidence ir,terval which is a numerical range determined by applyirga so-=alled confidence level to the data. A confidence 12

interval calculated with a 95% confidence level, for example, is refert~i to as a 95% confidence interval. An apparent association or relative risk is said not to be statistically significant at the 95% confidence level unless the entire range of the 95% confidence interval for that risk is above or below 1.0. By generally accepted scientific convention, a 95% confidence level is required in epidemiclogic studies to judge an association as statistically significant. 28. EPA analyzed 30 published epidemiologic studies when classifying ETS as a Group A carcinogen. The studies primarily address whether a wow-an's risk of lung cancer may be statistically correlated with whether ber spouse smokes. The _ studies do not measure actual ETS exposure. Instead, they rely on questionnaire responses as to whether a woman's spouse smokes, thereby treating reports of spousal smoking as a surrogate for actual or measured ETS exposure. 29. Df the 30 published ETS studies EPA relied upon, 11 were conducted in the United States. As originally reported, none of the U.S. studies found an overall risk estimate for lung cancer that was statistically significant. 30. Of the remaining studies conducted in seven countries other than the United States, 13 found no overall statistically significant sssociation between spousal smoking and lung cancer as origiaally reported. Put another way, of the 30 studies reviewed by EPA, 24 -- a full 804 -- as originally reported do O Qi GO CD 0

not support the Agency's classification of ETS as a Group A carcirogen. 31. In an attempt to make otherwise non-statistically significant study results appear statistically significant, EPA "reanalyzed" the 30 epidemiologic studies. Specifically, EPA lowered the threshold for achieving statistical significance by lowering the standard 954 confidence level employed by all but three of the authors of the 30 studies to an unorthodox 90% confidence level. In altering the original analyses of the authors of the studies, EPA doubled the possibility that any statistically significant association is simply a random and meaningless event. Its use of the lower 90% confidence level contrasts with its use of the generally accepted 95` ..vel in the 1990 draft of the ETS Risk Assessment and its routine use of studies employing the standard level in other carcinogen risk assessments. 32. Even after zeanalyzing the studies using the lower confidence level, EPA failed to obtain a statistically significant overall association from over two-thirds of the studies. Of the 11 U.5. studies, only one yielded a statistically significant overall association after reanalysis. 33. Other data which EPA refused to account for in its analysis also demomstrate that any observed association between ETS and lung cancer may be due to chance. Nine of the 30 epidemiologic studies of female lung cancer and spousal smoking 14

also gathered data on male lung cancer risk and spousal smoking and, zf these, vnly cne, a Japanese study by Hirayama that is methodologically flawed on other grounds, is statistically significant even at the lower confidence level. Twelve of fourteen reported studies that have examined workplace ETS exposure and lung cancer risk have reported no statistically significant association at the lower confidence level. Similarly, 12 of 13 studies that have examined childhood ETS exposure and adult lung cancer risk fail to show a statistically significant association at that level. 34. The large number of studies, both those considered by EPA and those EPA refused to consider, which report no overall statistically significant association between ETS and lung cancer, overwhelm the few studies that EPA claims demonstrate an association and suggest that those few results may simply be the result of chance. Wben this evidence is coupled with EPA's choice of a confidence level which doubles the risk of an association due to chance being labeled statistically significant, chance becomes the likely explanation for any statistical association claimed by EPA between ETS and lung cancer. (ii) Coafoundiac 35. Confounding of data exists when an association between a disease and in exposure to one agent can be explained, in whole or in part, by an exposure to a second agent that is associated 15

with.batb (a) the disease and (b) the first exposure. The presence of such potential confounding factors undermines the reliability of epidemiologic data because of the difficulty in disentangling one potential risk factor from another. Because human disease causation, and especially chronic disease causation, is an extraordinarily complex issue, epidemioiogic data must be scrutinizsd closely for confounding before it can be relied upon to identify potential risks. 36. Sound science and the Risk Assessment Guidelines require that EPA may not infer causation unless "(t)he possibility of confounding has been considered and ruled = as explaining the associ'-W`ion." 51 Fed. Reg. 33999 (emphasis added). Here again, EPA violated accepted scientific standards and its own guidelines. 37. The scientific literature identifies the following elements, among others, as potential confounders: diet, personal r-edical history, family health history, lifestyle choices, occupational factors, and environmental factors. Some of these potential confounders are of such magnitude that they are large enough to account completely for any apparent association between spousal smoking and lung cancer elaimed by EPA. 38. EPA acknowledged the existence of some potential confounding factors but ignored the Risk Assessment Guidelines' requirement to rule out confounding as an explanation for an association prior to basing a causal inference on epidemiologic 16

data. Instead, EPA deemed the criterion satisfied largely because 3t claimed to be unable to identify any single confounding factor that in itself would explain the apparent association between ETS and lung cancer which appeared in EPA's analysis. EPA's methodology falls well short of the Guidelines' requirement to "rul[e3 out" the possibility of confounding. (iii) JW2 39. Bias in statistics refers to any trend in the design, collection, analysis, interpretation or publication of statistical data that causes or may tend to cause a systematic distortion of the true nature of the relationship studied. 40. Both the Risk Assessment Guidelines and accepted epidemiologic principles reguire that bias must be excluded as an explanation for an observed association before it can be concluded that a statistically significant association exists. Various sources of bias, including publication bias and respondent bias, could explain any association claimed by EPA between ETS and lung cancer. 41. EPA recognized only one source of bias in its Risk Assessment -- the tendency of smokers to misrepresent themselves as nonsmokers ("smoking status misclassification bias") -- and chose to adjust for it by using an unpublished scientific model that ccmtniri Tramerous mathematical and conceptual inconsistencies, including assumptions based on nonrepresentative data. Z t'EPA bad used representative data, EPA's own analysis ~ 17 tp - O V! Cn Cr .:a

would nct have resulted in a statistically significant association between ETS and lung cancer. (iv) atreactb 42. Strength refers to the magnitude of an apparent association. Associations of less than 3.0 are generally considered in the scientific community and by EPA to be weak and equivocaZ. Associations under 2.0 are considered to be extremely weak and are far more likely to be an artifact produced by chance, bias or confounding than are stronger associations. The weaker an association, the less reliable it is for evaluating a potential causal relationship. EPA admits as much in stating in its own Risk Assessment Guidelines that 'spidemiologic studies are inherently capable of detecting only comparatively large increases in risk." 51 Fed. Reg. 33996. 43. Of the 30 epideaiological studies analyzed by EPA in connection with its classification of ETS as a Group A carcinogen, 80$ did not report an overall statistically significant association of any magnitude between ETS and lung cancer. Even without consideration of the requirements of statistical significance, all of the studies reported overall relative risks under 3.0 and 21 reported overall relative risks under 2.0. Even when the 11 U.S. studies were pooled by EPA the adjusted relative risk estimate it constructed was only 1.19. 44. Dr. Morton Lippmann, chairman of the committee of the EPA's Science Advisory Board ("SAB") which reviewed the draft ETS 18

Risk Assessment, acknowledged the weakness of the association found by•EPA when he noted to reporters at a press conference called to publicize the draft that the risk of ETS was "probably much less than you took to get here through Washington traffic." 45. In other contexts, EPA has concluded that relative risks greater than the risks claimed by EPA for ETS were insufficisat to classify a potential carcinogen as a Group A carcinogen. For example, in a draft report on electromagnetic fields, the EPA concluded that, "(t]he association between cancer occurrence and exposure to either ELF or RF fields is not strong enough to constitute a proven causal relationship, largely because the relative risks in the published reports have seldom exceeded 3.0 in both childhood residential exposures and in occupational situations." U.S. EPA, Office of Health and Environmental Assessment, Evaluation of the Potential Carcino,genieity•mf E2ectronacnetic Fields, EPA/600/6-90/005A, Workshop Reviev-flraft, June, 1990. The 1.19 relative risk reported for ETS by EPA is less than one-tenth of the 3.0 relative risk found "not strong enough" by the SAB with regard to electromagnetic fields. 46. Because any statistical associations between ETS and lung cancer relied upon by EPA are so weak, it is very likely that they are produced by chance, bias, or confounding. 19 ~ I C7

(v) pose-Reiooase 47. a dose-response relationship mQans that as the extent of exposure, and hence dose, increases, the observed incidence of disease also increases. 48. EPA's Risk Assessment Guidelines note the importance of finding a dose-response relationship when trying to determine if an observad association is causal. 51 Fed. Reg. 33999. EPA attempted to satisfy this criterion by employing another unorthodox approach: the substitution of a test for "trend" for a true dose-response test. A trend test does not measure dose- response and is not an accepted substitute for a dose-response analysis. 49. None of the 30 epidemiologic studies relied upon by EPA shows a statistically significant dose-response relationship. 50. Several studies actually show a reverse dose-response, higher reported levels of spousal smoking are associated with an apparent decreased risk of lung cancer. One study reported a reverse dose-response that was statistically significant. (vi) consisteacv 51. EPA states in the ETS Risk Assessment that the presence of a consistent association across several independent studies in different populations may be evidence of a causal relationship. ConveTSely, a lack of consistency across studies undermines the reliability of any apparent associations and argues against 20

causal inferences. Inconsistency among studies suggests that chance, bias, or confounding has produced the associations reported, not exposure to the substance under assessment. 52. The epidemiologic studies of spousal smoking and ETS are remarkably inconsistent. The studies• results vary widely by geographic area and the magnitudes of ttie reported associations vary-by almost*300t: Without considering the requirement of statistical significance, six studies report associations above 2.0 while six studies report associations below 1.0. One study (wu-Williams) reports a statistically significant neaative association between ETS and lung cancer. (b) EpArs xeta-Analpsis of Zpidemiologic Studies Provides !to Basis for a Group A Classification 53. Recognizing that analysis of the individual epideaiologic studies could not support a Group A classification, EPA combined or pooled select portions of the data from the epidemiological studies using a controversial technique known as meta-analysis to create evidence of an association between lung cancer and ETS. This exercise not only did nothing to eliminate bias, confounding, and methodologic flaws in any of the individual epidemiologic studies, but it introduced mew and different errors and flaws into the analysis. 54. Fir=t, relying solely on data regarding U.S. women and e.mploying 1ts -ororthodox confidence level, EPA calculated a pooled relative risk estimate of 1.19 which is extremely weak. 21 ~ CD O U" ~ Cr C~

If EPA had used consistently its own data selection criteria and the accepted 93t -=mfidence level, its meta-analysis would have yielded no statistically significant association at all. 55. Second, EPA's pertorsance of the meta-analysis violated accepted scientific methodology. Keta-analyses can have utility only when (a) the studies that are to be combined are similarly designed and conducted, " (b) like data are pooled with like data. The epidemiologic studies of spousal smoking and lung cancer do not begin to meet these criteria. For example, some studies are case control studies, and others are cohort studies; some studies classify ex-smokers as smokers and others classify them as non-smokers; and some studies attempt to control for selected confounders and others 3o mct. 56. Third, EPA manipulated, ignored and cherry-picked data for inclusion in the meta-analysis. For example: a. EPA completely ignored two large studies published in the nniLed-States (Stockwell, 1992; Brownson, 1992) although these studies were brought to EPA•s attention prior to its release of the final ETS Risk Assessment. Srovnson is the largest study published on spousal smoking status and lung cancer and was spansored by the Kational Cancer Institute. It reportt To 3T,creased zisk for overall exposure to spoitsalisoking. 22

b. EPA included certain reported data from an incvmplete•-stndy (Pontham, 1991). Only the first three years of the five years scheduled have been completed and publication occurred before additional planned steps of verification had been undertaken. Although EPA included certain data from this incomplete study, •it failed to include data relating to confounding factors which had been collected by the study's authors. c. EPA violated its own criteria for determining what data to select with respect to one study (Janerich). Specifically, EPA used unadjusted risk estimates from bousehold exposure from Janerich while it used adjusted risk estimates from spousal exposure from all other studies from which adjusted risk estimates could be derived. 57. Tourth, TPA failed to adjust adequately for smoking status misclassification bias, which is known to inflate the apparent association observed in studies of spousal smoking and lung cancer. Although EPA acknowledged this one source of bias and purported to adjust for it, EPA used a=uethod of adjustment based on unrepresentative data instead of more representative data. FPA•s ose of these unrepresentative data resulted in an extr"e3y iow and unreal istic rate of ad justment that is not representative of the 4.S. population for this crucial variable. O O

More recent, reliable, and realistic data demonstrate that representative rates of misclassification are between 4 and 6 times larger than the rate used by EPA. 58. The weak apparent association produced by EPA's meta- analysis results from either failures to account for bias and confounding factors or from outcome-determinative choices EPA made vhen selecting metbodology, data and studies to empioy. When even small changes or corrections in the assumptions or methods employed by EPA are made, the results of the meta- analysis change from being statistically significant to being statistically non-significant. For example: a. . EPA could not hav- achieved its alleged statistically significant association between ETS and lung cancer without changing the confidence level. If it had used the correct Janerich data and employed the standard 95% confidence level, its meta-analysis would have resulted in no statistically sianificant association. b. Or, even accepting EPA's switch to the lower confidence level in the face of generally accepted scientific practice, if EPA had included data from the Stockwell and Brownson studies in its meta-analysis, there would similarly be no statistically sianificant association. e. DT, 3? EpA fiad used a realistic and supportable saokez ziaciessitication rate of 5%, no statistically sianificant association would have resulted. m ~ 2 4 OD 0 Cn ~ 0 ~

(2) ZpA Improperly Relisd Upon a Proxy 8ubsta.nce to Justify Its Group A classificatioa 59. EPA also attempted to support its decision to classify ETS as a Group A carcinogen on an independent ground: analysis of a proxy substance. Specifically, EPA claimed that similarities between ETS and mainstream smoke (tDe smoke inhaled by a smoker), coupled vith the assumption that Ay txposure to mainstream smoke poses a lung cancer risk, justified a Group A classification. EPA's classification on this basis is arbitrary and capricious. 60. First, EPA ignored the fact that ETS is not the equivalent of mainstream smoke. ETS is a highly dilute, complex and dynamic mixture of sidestream smoke ("SS"), exhaled mainstream smoke ("MS*) and some diffused tobacco smoke emanating from the tobacco rod. Very few of the chemical constituents identified in mainstream smoke have been identified in ETS in ambient air. The-general physical and chemical properties of the two smokes, includimg particle size, pH, constituent-phase distribution, and other physicochemical traits, differ significantly. 61. As recognized by the public health community, the multiple, pervasive and demonstrable differences between ETS and MS preclude any rational analysis of ETS using a proxy study of data on mainstreaa smoke. The Surgeon General concluded in 1986 that iatian4lzdge ol MS chemical composition is of limited assistance in evaluating ETS: "Comparison of the relative 00 ~ 25 (b 0 Clt LD O tJ

concentrations of various components of SS and MS smoke provides limitefl •insiglits concerning the toxicological potential of ETS in comparison with active smoking." (USPHS, 1986 at 24.) 62. Similarly, when requested in 1986 by the EPA and others to review ETS and health studies, the National Research Council concluded that data on MS do not provide a basis for predicting ETS exposure effects: -Bbecause the physicochemical nature of ETS, MS, and SS differ, the extrapolation of health effects from studies of MS or of active smokers to nonsmokers exposed to ETS may not be appropriate. . . ." (NRC, 1986 at 7-8.) 63. EPA itself concedes and relies upon the substantial physicochemical differences between MS and ETS elsewhere in the Risk Assessment. For example, in Chapter 6, wni"i purports to calculate a population risk of lung cancer from passive smoking, EPA states: This assumption icomparing MS and ETS to calculate lung cancer risks] may not be tenable, however, as MS and SS differ in the relative composition of carcinogens and other components identified in tobacco smoke and in their physico- chemical properties in general.... 64. Second, even if ETS and MS were nearly identical, the immense quantitative differences between ETS exposure and cigarettie smoking vould independently preclude reliance an proxy analysis. There is strong evidence aaainst EPA's assumption that any exposure to ETS, no matter bow small, poses a cancer risk. 26 ~ ~ GO O t!1 CD O W

a. Certain ETS constituents such as particulate mattez and ambient nicotine can be measured in the ambient air. Based on those data, scientists have consistently estimated that an E"TS exposed nonsmoker is exposed to the range of one to five cigarette equivalents per year. b. According to a recent published review, data from several epidemiologic studies on active smoking suggest that smoking four to five cigarettes per g,ay is not likely to be associated with a statistically significant increased risk of lung cancer. c. Differences in retention can further expand these dosimetric differences. For example, it is estimated that the average ETS exposed person appears to retain between 10,000 and 100,000 times less smoke particulate matter than a cigarette smoker. d. EPA's assunption, that no threshold exists for ETS exposure, Telies -solely on active smoking studies which have as their lowest exposure range 1-7, 1-9, 1-14 or <20 cigarettes smoked per day. All of these ranges are far in excess of the highest dose conceivably attributable to ETS. 65. Moreover, in the absence of a clear congressional mandate to the contrary, EPA is required to make a finding that a risk is Bignifiearrt ,before taking such action as classifying ETS as a Zrflup Acarcirogen. EPA•s "no-threshold" assumption is an insufficient basis vpon which to make such a finding. Indeed, if 27

the pressnca in any quantity of a chemical reported in mainstream smoke were a sufficient basis for declaring a substance to be a Group A carcinogen, EPA could similarly classify outdoor air, hamburgers, milk, peanut butter, and a host of other substances as Group A carcinogens. C. Zpa laiied to tollov 2ts ovm Ouidelimes f>6.' In classifying ETS as a human carcinogen, EPA followed neither its Risk Assessment Guidelines, developed specifically for classifying the carcinogenic potential of pollutants, nor its Guidelines for Exposure Assessment," 57 Fed. Reg. 22888 (May 29, 1992) ("Exposure Assessment Guidelines"). i. Risk Assessmemt Guideliaes 67. EPA issued the Risk Assessment Guidelines to ensure that the Agency follows uniform scientific standards and procedures in evaluating suspected carcinogens. The Risk Assessment Guidelines were designed to enhance the scientific quality and the public's understanding of EPA risk assessments: The purpose of these Guidelines is to promote quality and consistency of carcinogen risk assessment within the EPA and to inform those gutside the EPA about its atsmroach to parcinoaen zisk assessment. These Guidelines emphasize the broad but essential aspects of risk assessment that are needed by experts in the various disciplines required (e.g., toxicology, pathology, pharmacology, and statistics) for carcinogen risk assessment. 51 Fed. Reg. at 33993. (F.mphasis added.) The guidelines set forth the scies,tifiz principles and procedures that EPA has established as necessary for conducting a risk assessment and for 28

classifyirg potential carcinogens. Members of the general public, including plaintiffs, have a legitimate expectation that the guidelines will be followed and are justified in relying on them. 68. As set out above, EPA has violated the Risk Assessment Guidelines by failing to rule out the possibility that any association between spousal smoking and lung cancer is attributable to chance, confounders, or bias, and by failing to consider the absence of a strong association or a dose-response relationship. In addition, the EPA's classification of ETS as a Group A carcinogen violates the Risk Assessment Guidelines in at least six other respects. 69. First, the Risk Assessment Guidelines require EPA to ensure that "[s]tudies are evaluated according to sound biological and statistical considerations and procedures." 51 Z". $gg. at 33994. EPA violated accepted statistical principles by performing a meta-analysis on noncomparable data and by using an unorthodox confidence level in place of the scientifically accepted 95% level. Moreover, EPA engaged in unjustified biological assumptions in applying studies on mainstream smoke to ETS. 70. Second, the Risk Assessment Guidelines require that the EPA's evidence from epidemiologic studies be Ksufficient" before ETS can be classified as d Group A carcinogen. 51 Fed. Reg. at 34000. All of the epidemiologic studies conducted in the United (]o 29 .1 00 O . CP Cd O ~

States and 80% of all studies reviewed by the EPA report no overall statistically significant association between ETS and lung cancer using the standard confidence level. The few statistically significant associations that are reported are weak and inconsistent, and bias and confounding cannot be excluded as explanations for them. Nor does the EPA's meta-analysis yield a statistitaliy significant association (even using EPA's unjustifiable lower confidence level) when EPA's methodology is applied consistently, fairly and without computational error to the available data. If (1) the Brownson and Stockwell studies are added to the meta-analysis, (2) the appropriate figures are derived from the Janerich study, and (3) representative data are employed to imake the smoker misclassification adjustment, the meta-analysis does not produce any increase in risk from ETS exposure, much less a statistically significant one. The existing tpidemiologic evidence is not "sufficient" to support EPA's vronclusions. 71. Third, the Risk Assessment Guidelines require EPA to give full consideration to "all relevant scientific information." 51 Fed. Reg. at 33992. However, EPA refused to consider two published epidemiologic studies on spousal smoking status and lung cancer which, if included in EPA's meta-analysis, would, in and of tbEmselves, lhave altered EPA's conclusions. EPA also failed to tonsidez ti) the workplace exposure data reported in 11 of the 30 studies examined in the risk assessment, (ii) the data 30

on home exposure during childhood reported in 10 of the 30 studies, (iii) the data from numerous published studies which have measured ETS constituents in indoor air, (iv) the data on the physical and chemical distinctions between FTS and MS, and (v) data on identified sources of bias and confounding factors. 72. Fourth, the Risk Assessment Guidelines require the EPA to Mfully 'present" all relevant scientific information in the ETS Risk Assessment. 51 Fed. Reg. at 33992. The ETS Risk Assessment fails to "fully present" critical scientific information. For example, the EPA has not informed the public of the fragility of the meta-analysis. That analysis depends entirely, among other things, on (1) the determination to evaluate chance at a lower confidence level; (2) the exclusion of the largest U.S. study ever; and (3) the employment of a series of unjustified assumptions and unproven and unaccepted methods. . 73. Fifth, the Risk Assessment Guidelines require the EPA to "use tTie most scientifically appropriate interpretation to assess risk." 51 Fed. Reg. at 33992. EPA did not. Instead, EPA used an unconventional statistical significance level, combined noncomparable studies in a meta-analysis, relied upon inappropriate assumptions to manipulate the data, such as when adjusting for smoker misclassification, and inappropriately analogiiea 'M exposure to cigarette smoking. Had EPA employed "the most scientifically appropriate interpretation" of the available data, it could not have classified ETS as a Group A carcinoge 31

74. Sixth, the Risk Assessment Guidelines require EPA scientists to'"i'dentify the strengths and weaknesses of [the ETS Risk Assessment] by describing uncertainties, assumptions and limitations, as well as the scientific basis and rationale" for the assessment. 51 Fed. Reg. at 33992. EPA failed to acknowledge -- let alone describe - the numerous uncertainties, assumptions, and limitations demonstrated in the foregoing paragraphs, despite having received detailed, vritten comments relating to all of them well in advance of the release of the ETS Risk Assessment. 75. The Guidelines allow a Group A classification only when there is sufficient evidence from epidemiologic studies to support a causal relationship between exposure to the agent being classified (in this case ETS) and cancer. The Guidelines do not provide for classification of an agent as a Group A carcinogen based vpon epidemiology studies of exposure to some other agent (such as MS) . 76. No other substance has been classified by EPA as a Group A carcinogen based on (i) a clear majority of epidemiologic studies finding no statistically significant association or (ii) extrapolation of data from one substance to another. EPA's own Risk Assessment Guidelines prohibit EPA from classifying ETS as a human eaTtirogen. 3 2 0~ ~ m O Gr±. CD O CD

(2) ZXposure Ass.ssmsnt Cuideliaes 77. 'In Z992, tbe EPA issued its Exposure Assessment Guidelines, which govern EPA exposure assessments and their use in risk assessments. Like the Risk Assessment Guidelines, the purposes of the Exposure Assessment Guidelines are "to promote consistency and technical quality in risk assessment, and to ensure that the risk assessment process is maintained as a scientific effort separate from risk management." 57 Fed. Reg. at 22888. 78.. The ETS Risk Assessment violated the Exposure Assessment Guidelines in at least three respects. a. First, the Exposure Assessment Guidelines require that "exposure estimates along with supporting information . . . be fully presented in Agency risk assessment documents." 57 Fed. Reg. at 22688. Numerous studies providing ETS exposure estimates are omitted from the ;tisk Assessa:ent. b. Second, the Exposure Assessment Guidelines direct EPA to "identify the strengths and weaknesses of each assessment by describing uncertainties, assumptions, and limitations, as well as the scientific basis and rationale for each assessment." 57 Fed. Reg. at 22888. EPA made no ei'fort to identify the r=erous uncertainties, assumptions and 3imitations of its exposure assessment, including the 33

fundamental flaw that none of the epidemiologic studies actually,zeasttred ETS exposure. c. Third, the Exposure Guidelines sequire that «[e]xposure information must be clearly linked to the hazard identification and dose-response relationship." 57 Fed. Reg. at 22905. The ETS Risk Assessment is uniquely deficient in this regard. The exposure studies that are discussed in the Risk Assessment in Chapter 3 are never linked to the hazard identification in Chapter 5. EPA did not construct a dose-response gradient - one of the mandated steps in conducting a risk assessment. 79. irw's reliance on gross ETS exposure surrogate information is inconsistent with its treatment of exposure requirements in risk assessments for other alleged human carcinogens. For example, in rejecting a review draft on dioxin, EPA's Science Advisory Board concluded that "without good exposure data, the epidemiologic studies are meaningless." SAB ad hoc Panel on Dioxin, "Panel Report Review Draft on Dioxin," U.S. EPA, November, 1989. Similarly, the SAB criticized a review draft on diesel emissions, noting that "due to the lack of actual data on exposure to diesel exhaust . . . the evidence of carcinogenicity in humans is considered to be limited for diesel exhaust sxposure.` S?,8 Iftnel on Diesel Emissions, "Health Assessment Document for Diesel Emissions," Workshop Review Draft EPA/b0D/8-90/57A, July 1990. 34

D. Classification of ZTS as a Group A Careinocen Constitutes linal xcency gction 60. In classifying and publicizing ETS as a Group A carcinogen, EPA expected and intended its action to have a substantial regulatory impact resulting in the restriction of smoking in the workplace and in public. Then-EPA Administrator Reilly stated that classifying FTS as a buman carcinogen was "one of the biggest decisions I ever will make." He expressed the hope that the classification "will have profound reverberations in the country" and that no further action by any other government agency will be necessary for the EPA report to have an impact because "the liability question will drive it." Mr. Reilly concluded that "the government has spoken on the question." 81. EPA's decision to classify ETS as a Group A carcinogen has resulted in and continues to result in exactly the regulatory impact intended by EPA. By classifying ETS as a human carcinogen, EPA exertedtremendous pressure on both private and public entities to sestrict smoking in the workplace and in public -- pressure that the entities believed could not be ignored. Specifically, as a direct result of the EPA's classification of ETS as a Group A carcinogen, private entities, fearing liability, have felt compelled to institute restrictions or total bans an smolci.ng in their buildings. The ETS Risk Assessment also has prompted public agencies to institute or consider j.astituting similar smoking restrictions or bans. 35 (D .1 Gn 4 C~t , td N N

82. All these actions were taken and continue to be taken in express reliance on the soundness of EPA's science underlying its decision to classify ETS as a Group A carcinogen -- science that, as detailed above, was flawed and unsound. As a result of the release of the ETS Risk Assessment, plaintiffs suffered substantial and immediate bars, including false disparagement of their product and loss.of business and good will. 83. No other avenue of redress exists for plaintiffs to undo the harm that has been done other than review under the APA. Unless the classification of ETS as a Group A carcinogen is reviewable under the APA, EPA will be able to arrogate to itself enormous power over American industry by condemning products and substances, no matter bow flawed its actions, with no opportunity for judicial review. Neither the APA nor the Radon Act was intended to give EPA such authority over industry and society. 84. For all these reasons -- the regulatory purpose and effect.of the tlassification, tbe injury it caused to plaintiffs, and its nonreviewability in any other forum -- the classification of ETS as a Group A carcinogen is "equivalent" to "an agency rule, order, license, sanction, (or] relief" under Section 551(13) of the APA. 85. EPA's classification of ETS as a Group A carcinogen also constitutes agency action that is "final" within the meaning of Sett.i- _7La cf tAe APA: OD ~ 36 GO C C!ri Co N W

a. EPA intended that its January 7, 1993, •classificaticn•of ETS as a Group A carcinogen be a final and unequivocal agency conclusion and decision. As Administrator Reilly stated, "It]he government has spoken on the question." b. The ETS Risk Assessment embodying the -classification was formaily released by the EPA administrator. c. EPA is contemplating no further action regarding the classification of ETS as a Group A carcinogen. 2. 4laintiffs save Been Znjured Bv BPA,s Aetions 86. The classification of ETS as a Group A carcinogen was intended to and in fact did falsely disparage plaintiffs' products and their reputations and resulted in a loss of good will. The classification also was intended to and in fact did result in the imposition of greater smoking restrictions in the workplaoe -and public areas. These smoking restrictions, based on a classification of ETS as a Group A carcinogen without scientific foundation, have resulted and will continue to result in decreased sales and use of cigarettes and, concomitantly, decreased use and sales of tobacco. For example, plaintiff Gallins has removed cigarette vending machines from premises where they had been placed aat the request of the owners of the premises. -on information +end belief, it has also been precluded 3 7 0O 4 00 O c1'; CJ N 0

from placing machines in some new locations as a result of EPA's actions. 87. As a result of the labeling of ZTS as a Group A carcinogen, other private entities and governments throughout the country have already undertaken action or are actively considering taking action to restrict or prohibit smoking, as evidenced below: a. On June 3, 1993, Postmaster General Marvin Runyon, relying specifically on EPA's classification of ETS, ordered a nationwide ban on imoking in all 40,000 Postal Service facilities effective June 13, 1993. b. Numerous private employers, including Raytheon Co., Graco Inc., Abbott Laboratories, Virginia Power, Southern California Edison Co., Beltz Enterprises, Miles Inc., Public Service Electric and Gas (New Jersey), New £ngland Telephone and Greyhound Lines have instituted reviews of smoking policies, expanded workplace smoking restrictions or instituted total workplace smoking bans. For example, on March 1, 1993 Primerica Corporation banned smoking in all of its subsidiaries "in response to" EPA's actions. In addition, Fortune reported that Pepsico, Federal Express, 1)iPont, US West and Ralston Purina are ilinstrative of companies that are "getting tougher... Gt I Go 38 b t1t t0 N C11

aow that the [EPA) has declared that secondhand smoke causes cancer." c. Restaurants have also initiated smoking bans. For example, in specific reliance on EPA's classification, the California Restaurant Association, on January 7, 1993, endorsed legislation which would ban smoking in the workplace and all public places. d. The Board of Directors of the Building Owners and Managers Association International, representing more than 5 billion square feet of North American office space, passed a resolution supporting a federal ban on smoking in the workplace. e. The Governors of Kentucky and California have already issued executive orders that make those states' public smoking laws more restrictive. Other states, including Colorado, Delaware, Hawaii, Illinois, Iowa, Kansas, Maryland, Missouri, Minnesota, Montana, Nebraska, New York, Ohio, Texas, Utah, Vermont, and Virginia have proposed legislation to ban or restrict smoking in workplaces and other public areas. f. Legislation vas introduced in Congress that would prohibit smoking in all structures owned or leased for use by a federal agency, including the Executive and Judicial Branches, "Preventing Our Federal Building Workers and visitors Exposure to Deadly Smoke (PRO-FEDS) Act of 1993." 39

g. Organizations such as Smokenders have contacted major companies and, specifically citing EPA's Group A classification of ETS, urged them to initiate total smoking bans claiming that the EPA has determined that ETS "causes thousands of cancer deaths among nonsmokers each year." 88. Plaintiffs' pervasive, ongoing harm is the result of EPA•s .ualawful conduct, which has occurred and will continue to occur unless this Court qrants the relief plaintiffs seek in this complaint. COmrr I EPA I+AClCED AQTEORITY IINDER TEE RADON ACT TO CLASSIFY ET8 AS A GRODP A CARCIZIOGEN AND ILLEGALLY CO1+'DDCTED TIE FTB RI6R ASSESS?:ENT 89. Plaintiffs incorporate herein by reference paragraphs 1 through 88 of the complaint. 90. An administrative agency has no power to act unless and until Congress confers power upon it. To the extent EPA has any authority over ETS, it derives from the Radon Act. 91. Section 401 of the Radon Act provides EPA with authority restricted to conducting "research, development, and related reporting, information dissemination, and coordination activities." The Radon Act expressly bars the EPA from carrying out "any regulatory program." 92. EPA, purporting to rely on the Radon Act, has classified ETS as a•Group A" carcinogen and conducted and issued the ETS Risk Assessment. 40

93. Classification of ETS as a Group A carcinogen does not constitute research as authorized by the statute. EPA's classification of ETS as a Group A carcinogen serves no legitimate research purpose, but is designed and intended solely to achieve a substantial regulatory impact and effect. EPA's classification of ETS bas in fact had a substantial regulatory impact znd sffsct. - 94. EPA exceeded its statutory authority under Sections 403 and 404 of the Radon Act by classifying ETS as a Group A carcinogen. 95. EPA further exceeded its authority under the Radon Act by deciding to classify ETS as a Group A carcinogen without making a finding as to whether exposure to ETS poses a significant risk. 96. EPA also violated the Radon Act by not properly establishing the Radon Act Advisory Committee mandated by Section 403(c) of the Radon Act. Under the Radon Act, that Committee is to provide EPA with the input from industry and the public to assist the defendants in carrying out research programs. Because no such committee was ever formed, EPA's classification of ETS and the ETS Risk Assessment also violate the Radon Act and exceed EPA's statutory authority. 97. 'Under Section 403(c) of the Radon Act, the Administrator was also reguired to establish a Federal Agency Advisory Committee composed of individuals representing Federal 41 ~ GD C C11 (0 N 00

Agencies. Although the EPA Administrator has designated The Committee on Indoor Air Quality (CIAQ) as this Federal Agency Advisory Committee, the CIAQ has not assisted the Administrator in carrying out the research program. For this additional reason, EPA's classification of ETS and the ETS Risk Assessment further violate the Radon Act and exceed EPA's statutory authority. 98. EPA's action in conducting and issuing the ETS Risk Assessment is "in excess of statutory jurisdiction, authority, or limitations or short of statutory right" and, therefore, is in derogation of the public interest and should be held unlawful and set aside in accordance with Section 706(2) of the APA. 99. As a direct and proximate cause of EPA's unlawful acts, plaintiffs have been seriously injured as alleged herein. WHEREFORE, plaintiffs pray this Court grant plaintiffs the following relief: ZA) 3'o declare that EPA's classification of ETS as a Group A carcinogen and its performance and issuance of the ETS Risk Assessment exceeded EPA's authority prescribed by Sections 403 and 404 of the Radon Act, and thereby contravened Section 706(2)(C) of the APA; (B) To declare that any ETS research programs, including the Tesults thereof, zonducted pursuant to the authority of the Radon l,ct taithout the assistance of the Federal Agency Advisory Committee or the assistance of a properly constituted Radon Act 42

Advisory Committee are unlawful because they are in excess of the authosityof tbe defendants; (C) To declare that the classification of ETS as a Group A carcinogen and the issuance of the ZTS Risk Assessment were unlawful and in violation of statutory procedures; (D) To grant an injunction requiring EPA to withdraw Its classificatioa of STS as a Group A carcinogen and to withdraw its ETS Risk Assessment; and (E) To grant plaintiffs such additional relief that the Court may deem just and proper. COMM II T8E CI.ASSIPICATION OT LTS AS A 6ROIIp A CARCIliOGEN IS ARBITR7lRY, CAPRICIOIIBe M OTEERWISE NOT IN 1lCCORDIWCE WITH LAW 100. Plaintiffs incorporate berein by reference paragraphs 1 through 88 of the complaint. 101. EPA's decision #o classify ETS as a Group A carcinogen and the tinderlying ETS RiskAasessment was based on incomplete, irrelevant, and inconsistent data. 102. In classifying ETS and promulgating the ETS Risk Assessment, EPA ignored available, persuasive scientific data contrary to its conclusions. 103. The classification of ETS as a Group A carcinogen and the ETS Risk Assessmgnt nze ftsed on models, assumptions, and metbodo3cgies that are inaccurate, flawed, and not accepted by the scientific commzmity. 43

104. In classifying ETS and promulgating the ETS Risk Assessment, TPA violated its published guidelines and its standard procedures and methodologies when use of EPA's guidelines and standard procedures and methodologies would not support its predetermined classification. Zn classifying ETS as a group A carcinogen, EPA also violated the limits of its delegated power by failing to make a finding as to whether exposure to ETS poses a significant health risk. 105. The classification of ETS as a Group A carcinogen and the ETS Risk Assessment are not supported by the existing state of scientific or iaedical knowledge, and are therefore arbitrary and capricious. 10s. As a direct and proximate cause of defendants' arbitrary and capricious acts, plaintiffs have been seriously injured as set forth herein. iThIER£FGRE, plaintiffs pray this Court grant plaintiffs the follos.-ing -Telief: (A) To declare that the ETS Risk Assessment and the resulting EPA designation of ETS as a Group A carcinogen are unlawful, arbitrary and capricious; (B) To grant an injunction requiring EPA to withdraw its classification of ETS as a Group A carcinogen and to withdraw the ETS Risk lsses=merrt upon vhich that classification is based; and (C) To gzarlt plaintiffs such additional relief that the Court may deem Jmst and pTC7,per. 44

COQNT III ZPli VIOIJITED T8E 71PA BY lAZLING TO COMPLY RITH ITS O1PN GQIDELZNEB .107. Plaintiffs incorporate herein by reference the allegations contained in paragraphs l through 88 of this complaint. 108. In,classifying ETS as a human carcinogen, EPA violated the Risk Assessment Guidelines. 109. In classifying ETS as a human carcinogen, EPA violated the Exposure Assessnent Guidelines. 210. EPA violated its own guidelines as alleged above, individually and collectively, for the purpose of reaching a desired conclusion (that ETS Ss a Group A carcinogen) that could not have been reached but for such violations. 111. As a result of EPA's violations of its own guidelines, the classification of ETS as a Group A carcinogen was "without observativnzf prozedure required by law" and therefore violated Section 706(2)(D) of the APA. 112. As a direct and proximate cause of EPA's unlawful acts, plaintiffs have been seriously injured as alleged herein. QO ~ 45 (b d CJ1 ~

ti7HEREFCIRE, plaintiffs pray this Court grant plaintiffs the followirg -relief: • (A) To declare that EPA's classification of ETS as a Group A carcinogen and the ETS Risk Assessment are in violation of Section ?06(2)(D) of the APA; (8) To grant an injunction requiring EPA to withdraw its classification of FTS as a Group A carcinogen and to withdraw its ETS Risk assessment; and (C) To grant plaintiffs such additional relief that the Court may deem just and proper. COUNT t0 EPA VIOLATED DUE pROCESS BY TAILING TO COMPLY lITH BTATDTORY REBTRICTIONS. REQDIRED pROCEDIIRfB, hi+'D ITS OWN GUIDELINEB 113. Flaintiffs incorporate herein by reference the allegations contained in paragraphs 1 through 68 of this complaint. 11-0. Z*n classifying E4'S as a Group A carcinogen and conducting the ETS Risk Assessment, EPA violated its limited grant of authority under the Radon Act. 115. EPA further violated the Radon Act by failing to establish the Radon Act Advisory Committee and classifying ETS as a Group A carcinogen and performing the ETS Risk Assessment withont assistaree frvm the pederal Agency Advisory Committee. Go 01i ~ 46 ~ CD N Ca

116. In classifying E'TS as a Group A carcinogen and issuing the E"TS Risk'assessment, EPA also violated its Risk Assessment Guidelines, and its Exposure Assessment Guidelines. 117. Plaintiffs bad a legitimate expectation that EPA would comply with the Radon Act and with EPA's own guidelines. Plaintiffs relied on the provisions of the Radon Act and EPA's quidelines for protection from arbitrary and capricious actions, including classification of ETS as a Group A carcinogen and the underlying risk assessment. 118. EPA was only able to reach its desired conclusion by violating the Radon Act and the agency's guidelines. EPA could not have concluded that ETS was a Group A carcinogen but for such violations. 119. As a direct and proximate cause of EPA's violations of the Radon Act and the agency's guidelines, plaintiffs have been seriously injured and deprived of property interests, including but not limited to loss of good will and sales. WHEREFORE, plaintiffs pray this Court grant plaintiffs the following relief: (A) To declare that EPA's classification of ETS as a Group A carcinogen and the ETS Risk Assessment violate the guarantee of due process of law in the United States Constitvtion,'U.5. Const. tmend. V.; 47

(B) To grant an injunction requiring EPA to withdraw its-classificatian lof ETS as a Group A carcinogen and to withdraw its ETS Risk Assessment; and (C) To grant plaintiffs such additional relief that the Court may deem just and proper. Of Counsel: SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN Respectfully submitted, ewey W. JQells 2500 First Union Capital Center N.C. State Bar No. 4645 Post Office Box 2611 Keith W. Vaughan Raleigh, North Carolina 27602-2611 N.C. State Bar No. 6895 Attorneys for Flue-CurP1 Tobacco Jeffrey L. N.C. State Furr Bar No. 14107 Cooperative Stabilization WOMBLE CARLYLE SANDRIDGE Corporation & RICE BERRY & FLOYD, P. S. C. 4 07 North Ma in Street Post Office Box 245 New Castle, Kentucky 0050 1600 Southern National Financial Center 200 W. 2nd Street Winston-Salem NC 27102 (919) 721-3600 Attorne s for Plaintiffs Attorneys for The Council for Burley Tobacco, Inc. y Universal Leaf Tobacco Company, Inc., Phili Morris Incor orated p p WILLIAMS, MULLEN, CHRISTIAN AND 1021 East Cary Street Richmond, Virginia 23219 Attorneys for Universal Leaf Tobacco Company, Inc. ARNOLD & PORTER 1200 NEw 8Amprhire Avenue, ll.V. Washington, D.C. 20036-6885 BEVERIaGE i DIAMOND 1350 pI" Street, N.W. Washington, D.C. 20005 DOBBINS and R.J. Reynolds Tobacco 48 ompany ames K. Dorsett, Jr. N.C. State Bar No. 1212 James D. Blount N.C. State Bar No. 378 SMITH, ANDERSON, BIAU'NT, DORSETT, MITCHELL & JERNIGAN 2500 First Union Capital Center Post Office Box 2611 Raleigh, NC 27602-2611 (919) 821r1220 Attorneys for Plaintiffs Flue-Cured Tobacco Cooperative Stabilization Corporation and The Council for Burley Tobacco, Inc. 87805925

SHOOK, HARDY & BACON One Kansas ' City 3?lace 1200 Main Street Kansas City, Missouri 64105-2118 Attorneys for Philip Morris Sncorporated JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 WOMBLE CARLYLE SANDRIDGE & RICE 1600 Southern National Financial Center 200 W. 2nd St. Winston-Salem, North Carolina 27102 Attorneys for R. a. Reynolds Tobacco Company ALLMAN SPRY BUMPHREYS LEGGETT & HOWINGTON, P.A. Suite 700 380 Knollwood Street Winston-Salem, North Carolina 27113 Attorneys for Gallins Vending Company I Richard . Howing n N.C. State Bar No. 5159 ALIMAN SPRY HUMPHREYS LEGGETT & HOWINGTON, P.A. Suite 700 380 Knollwood Street Winston-Salem NC 27103 (919) 722-230d Attorneys for Gallins Vending Company 49