US Court denies American Vanguards motion to lift stop sale order

Date:09-06-2010

American Vanguard Corporation announced that the United States District Court for the District of Columbia has denied the Companys motion for emergency and injunctive relief from a Stop Sale, Use or Removal Order that had been issued by the United States Environmental Protection Agency relating to the Companys US EPA-registered pentachloronitrobenzene (PCNB) product line. The Companys wholly-owned subsidiary, Amvac Chemical Corporation, manufactures, distributes and sells PCNB as a fungicide for use primarily on turf with the bulk of sales occurring in September and October.

The agency issued the stop sale order without warning on the ground that the company did not identify trace impurities in the product in a submission to the agency called a confidential statement of formula ("CSF"), despite the fact that the agency was otherwise made aware of these impurities nearly 20 years ago and that, in the Companys view, the agency never determined that the impurity had to be listed on the CSF. In its motion for relief and in oral argument, the Company argued that the law does not permit the agency to stop sales of an approved product before giving the registrant due process. Although temporary relief was denied, the Company remains free to seek a preliminary injunction against USEPA.

Eric Wintemute, President & Chief Executive Officer of the company, said, "We are very disappointed with the courts ruling. Not only does it put our domestic PCNB business at a standstill, but it lends credence to the issuance of a stop sale order that is inconsistent with USEPAs own policies on transparency, amounts to a denial of due process, and creates a bad precedent with responsible registrants. We will, of course, continue to work expeditiously with USEPA to get the stop sale order lifted as soon as possible. At the same time, we intend to seek relief from the court by way of a preliminary injunction." Mr. Wintemute added, "Given that the situation with USEPA remains fluid, we are still assessing what effect the stop sale might have on our financial performance for the balance of the year. We will report on those effects as we obtain greater clarity on the issue."