467 U.S. 986 (1984)
Monsanto Company is an inventor, developer, and producer of chemical products including pesticides, with its headquarters in St. Louis County, Missouri.1 It sells in both domestic and foreign markets and is among a small group of companies that invent new active ingredients for pesticides and conduct most of the associated research and testing.2 Development of a potential commercial pesticide candidate typically requires annual expenditures of between five million and fifteen million dollars over a period of fourteen to twenty-two years.3 For every manufacturing-use pesticide the average company markets, it screens and tests twenty thousand others, although Monsanto markets one out of every ten thousand chemicals tested.4 Monsanto has incurred costs in excess of twenty-three point six million dollars in developing the health, safety, and environmental data it has submitted under FIFRA.5
The Federal Insecticide, Fungicide, and Rodenticide Act was first adopted in 1947 as a licensing and labeling statute requiring registration of pesticides with the Secretary of Agriculture.6 Responsibilities under the Act were transferred to the Environmental Protection Agency in 1970.7 Congress undertook comprehensive revisions through the Federal Environmental Pesticide Control Act of 1972, which transformed FIFRA into a comprehensive regulatory statute.8
In 1975, Congress amended section 3(c)(1)(D) to provide that the data-consideration and data-disclosure provisions applied only to data submitted on or after January 1, 1970.9 Congress enacted other amendments to FIFRA in 1978.10 These were effected by the Federal Pesticide Act of 1978, 92 Stat. 819.11 The new amendments included a series of revisions in the data-consideration and data-disclosure provisions of FIFRA's §§ 3 and 10.12
Monsanto brought suit in the United States District Court for the Eastern District of Missouri.13 It sought injunctive and declaratory relief from the operation of the data-consideration provisions of section 3(c)(1)(D) and the data-disclosure provisions of section 10 and related section 3(c)(2)(A) of FIFRA as amended in 1978. After a bench trial, the District Court entered judgment declaring sections 3(c)(1)(D), 3(c)(2)(A), 10(b), and 10(d) of FIFRA unconstitutional and permanently enjoining the Environmental Protection Agency from implementing or enforcing those sections.14 The Supreme Court noted probable jurisdiction.15
Whether Monsanto has a property interest protected by the Fifth Amendment's Taking Clause in the health, safety, and environmental data it has submitted to EPA?16
Property interests are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.17 Trade secrets recognized under Missouri law qualify as property protected by the Taking Clause of the Fifth Amendment.
Yes. Missouri law recognizes trade secrets as property, and the parties stipulated that much of the information Monsanto submitted under FIFRA contains or relates to trade secrets as defined by the Restatement of Torts.18 The Court has previously treated other intangible interests such as liens and contracts as property under the Taking Clause, confirming that Monsanto's data interest receives Fifth Amendment protection to the extent it qualifies as a trade secret.19
Monsanto possesses a property interest protected by the Fifth Amendment's Taking Clause in its health, safety, and environmental data to the extent the data constitute trade secrets under Missouri law.20
Whether EPA's use of the data to evaluate the applications of others or EPA's disclosure of the data to qualified members of the public effects a taking of that property interest?21
A taking occurs when governmental action deprives the owner of all or most of his interest in the subject matter.22 The inquiry into whether a taking has occurred is essentially an ad hoc, factual inquiry.23 The Court has identified several factors that should be taken into account when determining whether a governmental action has gone beyond regulation and effects a taking.24 Among those factors are the character of the governmental action, its economic impact, and its interference with reasonable investment-backed expectations.25
No. Monsanto lacked reasonable investment-backed expectations of confidentiality or exclusive use for data submitted before October 22, 1972, or after September 30, 1978, because the Trade Secrets Act provided no assurance against disclosure and the 1978 amendments expressly authorized EPA's use and disclosure.26 Yes for data submitted between October 22, 1972, and September 30, 1978, that Monsanto designated as trade secrets.27 During that window the statute gave explicit assurance of confidentiality and exclusive use, and EPA's later use or disclosure would destroy the competitive advantage that defines the property right.28
EPA's consideration or disclosure of data effects a taking only with respect to trade-secret data submitted by Monsanto between October 22, 1972, and September 30, 1978, where the use or disclosure conflicts with the statutory assurances then in force.29
Related opinions on this issue
Justice O'Connor joined all of the Court's opinion except for part IV-B and the conclusion that EPA's consideration or disclosure of data submitted by Monsanto prior to October 22, 1972, does not effect a taking.30 In her view public disclosure of pre-1972 data would effect a taking.31
As to consideration of this information within EPA in connection with other license applications not submitted by Monsanto, she believed the Court should remand to the District Court for further factual findings. Those findings would concern Monsanto's expectations regarding interagency uses of trade secret information prior to 1972.32 It is important to distinguish public disclosure of trade secrets from use of those secrets entirely within EPA. Internal use may undermine Monsanto's competitive position within the United States, but it leaves Monsanto's position in foreign markets undisturbed.33
Whether any taking is a taking for a public use?34
Yes. The data-consideration provisions eliminate costly duplication of research and streamline the registration process, making new end-use products available to consumers more quickly and allowing greater competition among producers.37 The data-disclosure provisions embody Congress's judgment on the optimum amount of public disclosure and provide an effective check on EPA decisionmaking.38 Both purposes lie well within Congress's police power.39
Any taking of private property that may occur in connection with EPA's use or disclosure of data submitted by Monsanto between October 22, 1972, and September 30, 1978, is a taking for a public use.40
Whether the statute adequately provides for just compensation?41
Equitable relief is not available to enjoin an alleged taking of private property for a public use when a suit for compensation can be brought against the sovereign subsequent to the taking.42 The Fifth Amendment does not require that compensation precede the taking.43 The Tucker Act supplies jurisdiction for claims founded upon the Constitution.44
Yes. FIFRA does not withdraw Tucker Act jurisdiction.45 The better reading of the statutory forfeiture provision is that it imposes an exhaustion requirement as a precondition to a Tucker Act claim rather than an exclusive remedy.46 Where the arbitration procedure yields just compensation, no taking claim against the Government remains; any shortfall is still remediable under the Tucker Act.47
The Tucker Act provides an adequate remedy for any taking that may occur, and the District Court therefore erred in enjoining the taking.48