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Legal Proceedings
9 Months Ended
Sep. 30, 2021
Commitments And Contingencies Disclosure [Abstract]  
Legal Proceedings

14. Legal Proceedings — During the reporting period, there have been no material developments in legal proceedings that were reported in the Company’s Form 10-K for the year ended December 31, 2020, except as described below.

EPA FIFRA/RCRA Matter. On November 10, 2016, the Company was served with a grand jury subpoena from the United States Attorney’s Office for the Southern District of Alabama, seeking documents regarding the importation, transportation, and management of a specific pesticide in substantially empty, closed containers. The Company retained defense counsel to assist in responding to the subpoena and otherwise defending the Company’s interests. AMVAC is co-operating in the investigation.

Since April 2018, the Department of Justice (“DOJ”) has conducted several interviews of AMVAC employees and issued supplemental document requests in connection with the investigation. In November 2020, DOJ issued a second grand jury subpoena seeking records and related communications with regard to a submission made by the Company to the Environmental Protection Agency (“EPA”) in connection with a request to amend a pesticide’s registration. Soon thereafter, DOJ also identified the Company and one of its non-executive employees as targets of the government’s investigation. In January 2021, DOJ and EPA informed the Company that it is investigating violations of two environmental statutes, the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) and the Resource Conservation and Recovery Act (“RCRA”), as well as obstruction of an agency proceeding and false statement statutes. DOJ also identified for the Company, as well as for the individual target, evidence that it contends supports alleged violations with respect to both the Company and the individual target. As part of discussions regarding possible resolution, in October 2021, the Company presented its evaluation of the legal and factual issues raised by the government (which do not include any allegations of harm to human health or the environment) to both DOJ and USEPA.

The governmental agencies involved in this investigation have a range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of FIFRA, RCRA and other federal statutes including, but not limited to, injunctive relief, fines, penalties and modifications to business practices and compliance programs, including the appointment of a monitor. If violations are established, the amount of any fines or monetary penalties which could be assessed and the scope of possible non-monetary relief would depend on, among other factors, findings regarding the amount, timing, nature and scope of the violations, and the level of cooperation provided to the governmental authorities during the investigation. As a result, the Company cannot yet anticipate the timing or predict the ultimate resolution of this investigation, financial or otherwise, which could have a material adverse effect on our business prospects, operations, financial condition, and cash flow. Accordingly, we have not recorded a loss contingency for this matter.

Risk Management Plan – Axis, Alabama. On July 30, 2018, inspectors from USEPA conducted a Risk Management Plan (“RMP”) audit of the Company’s facility in Axis, Alabama and, in January 2019, issued an order to show cause (“OSC”) why the Company should not be cited for nine potential infractions of the Clean Air Act, including failure to conduct inspection and testing on certain process equipment, inadequate training and documentation of such inspections and inadequate management of changes for process chemicals, equipment and the like. The Company sought a hearing date to contest the alleged violations and, on March 26, 2019, provided Region 4 of USEPA with a plan for effecting compliance relating to mechanical integrity inspections within 24 months. The Company met with USEPA officials in early January 2021 and outlined progress to date and its plans to complete, and to define the scope of, mechanical integrity inspections. After evaluation, USEPA proposed a settlement. On February 3, 2021, Company representatives met with USEPA, who, in light of the quality of the remediation plan, eliminated a number of alleged violations and reduced the penalty. On September 23, 2021, the Company entered into a consent agreement and final order under the terms of which all alleged infractions were resolved in consideration of payment by the Company of an amount that is not material to the Company’s Condensed Consolidated Financial Statements.