In December 2022, two separate lawsuits were filed against Inhance Technologies USA regarding its alleged production of certain PFAS substances in violation of the Toxic Substances Control Act (“TSCA”). These lawsuits are important as they raise novel questions of TSCA interpretation and enforcement.
The first lawsuit was filed by the U.S. Department of Justice, Environment and Natural Resources Division on behalf of the U.S. Environmental Protection Agency (“EPA”). The second case is a citizen suit filed by the non-profit organizations Center for Environmental Health (“CEH”) and Public Employees for Environmental Responsibility (“PEER”). U.S. v. Inhance Technologies LLC, U.S. Eastern District of Pennsylvania, Case No. 2:22-cv-05055; Center for Environmental Health v. Inhance Technologies USA, U.S. District Court for the District of Columbia, Case No. 1:22-cv-03819. It is rare that EPA pursues TSCA enforcement actions in federal court. Similarly, the citizen suit provision of TSCA is exercised infrequently.
Defendant Inhance Technologies USA (“Inhance”) is a Texas-based corporation that treats plastic containers, including high-density polyethylene (HDPE), using a fluorination process. Inhance is the principal supplier of post-mold fluorination services in the United States.
According to the Complaints, Inhance has been in violation of the Long-Chain Perfluoroalkyl Carboxylate (“LCPFAC”) Significant New Use Rule (“SNUR”) that requires manufacturers to file a Significant New Use Notice (“SNUN”) for any manufacturing (including importing) or processing of an LCPFAC for which there were no ongoing uses as of January 21, 2015. See 40 CFR 721.10536. This includes substances that are typically exempt byproducts under TSCA and LCPFACs that are imported as part of articles. Inhance allegedly violated two SNUR requirements. The complaints assert that Inhance failed to submit a SNUN for LCPFAC substances formed during the fluorination of plastic containers at least 90 days prior to the manufacture of these substances. The second violation charged is the company’s manufacture of these substances before completion of the requisite 90-day SNUN review period.
Inhance received warning of its violation of the LCPFAC Rule by the Plaintiffs of each lawsuit months prior to litigation. The lawsuits follow a March 2022 letter EPA sent to the HDPE industry. EPA issued the letter, first “to remind industry of this issue to help prevent unintended PFAS formation and contamination,” and second, to “emphasize the requirement under TSCA as it related to PFAS and fluorinated polyolefins.” In its letter, EPA reminded the industry of the SNUR, highlighting that while LCPFAC chemical substances are byproducts of the fluorination process from the chemical and commercial standpoint, these substances are not eligible for the byproducts exemption in 40 CFR § 721.45(e). The Agency letter further encouraged the industry to pursue alternative fluorination processes which are less likely to foster unintentional PFAS creation. EPA’s lawsuit is its first enforcement matter against the HDPE industry following the Agency’s warnings.
In March 2022, EPA issued a Notice of Violation (NOV), requesting that Inhance provide the Agency with additional information on changes the company may have made to the HDPE fluorination process that would eliminate PFAS production. The NOV stated that if no changes to the manufacturing process had been made, Inhance would need to immediately cease manufacturing PFAS and submit a SNUN to the Agency for review. Agency review of the information submitted by the company confirmed that the company was producing substances that are subject to the LCPFAC Rule.
In September 2022, Inhance notified EPA that it intended to submit a SNUN for its fluorination processes, but that it was unwilling to cease its fluorination processes before or during the EPA SNUN review period. Inhance has consistently maintained that it believes its operations are in full regulatory compliance.
EPA’s lawsuit was filed on December 19, 2022, with the non-profit lawsuit following about a week behind. The Complaints allege a variety of TSCA violations, namely the following:
- Section 5(a)(1) of TSCA, which states no person may manufacture or process a chemical substance for a significant new use unless (1) that person submits a Significant New Use Notice (“New Use Notice”) to the EPA; (2) the EPA reviews that notice; and (3) the EPA makes a determination on that use under Section 5(a)(3) of TSCA, 15 U.S.C. § 2604(a)(3). 15 U.S.C. § 2604(a)(1).
- Title 40 C.F.R. § 721.25 prescribes similar requirements for any person seeking to engage in a significant new use of a chemical substance.
- Section 15 of TSCA, which states that it is a prohibited act to fail or refuse to comply with any requirement of TSCA or any rule promulgated under TSCA. 15 U.S.C. § 2614.
- Under 40 C.F.R. § 721.35, it is a violation of Section 15 of TSCA to fail to comply with any provision of Title 40, Part 721 of the regulations implementing TSCA.
Plaintiffs in both cases are seeking declaratory and injunctive relief under Section 15(a) of TSCA (15 U.S.C. § 2616(a)) and the Declaratory Judgment Act (28 U.S.C. § 2201) for Inhance to cease production of all products using the PFAS forming fluorination process. To resume production, Inhance must demonstrate to EPA that it has altered its production process to eliminate PFAS production.
Case Update
In April 2023, the U.S. District Court of the District of Columbia dismissed the lawsuit brought by CEH and PEER. Shortly after CEH and PEER filed their lawsuit, Inhance filed a motion to dismiss the case arguing that the lawsuit was inappropriate under TSCA’s diligent prosecution bar. DOJ filed an amicus brief supporting Inhance’s motion to dismiss. For the CEH and PEER lawsuit to proceed, the organizations would have needed to demonstrate that DOJ was not diligently prosecuting the case. The court granted Inhance’s motion stating that “[n]othing in the eight days between when DOJ filed its lawsuit and when the Plaintiffs filed theirs suggests that [DOJ] was not diligently prosecuting the case.”
On June 13, the court presiding over the DOJ lawsuit scheduled oral arguments for August 23, 2023.