New Jersey Reaches Historic Settlement with Solvay Polymers over PFAS Contamination

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On June 28, 2023, New Jersey’s Department of Environmental Protection (NJDEP) announced a proposed settlement with Solvay Specialty Polymers USA, LLC (“Solvay”) over the company’s discharge of PFAS and other hazardous substances from its West Deptford facility.  According to a press release from New Jersey’s Office of Attorney General (NJOAG), the $392.7 million proposed settlement is the “largest single-site natural resource damages and remediation case in New Jersey history.”

In the 2020 complaint that led to the proposed settlement, NJDEP alleged that PFAS discharges and emissions from Solvay’s West Deptford facility had caused “widespread soil, sediment, groundwater, and surface water contamination.”  In particular, NJDEP asserted that levels of PFNA­—a type of PFAS—detected in surface water and public drinking water near the facility were higher than levels reported “anywhere else in the world.”  According to NJDEP, Solvay and the facility’s previous owner knew or should have known about the dangers posed by PFAS but “failed to disclose the impact of their use and releases of PFAS into the environment to the Department and the surrounding community.”

Under the terms of the proposed settlement, Solvay would be required to reimburse NJDEP for previous remediation efforts, pay claims for natural resource damages, and fund additional remedial activities to be undertaken by NJDEP and the company.  Solvay would be responsible for identifying and remediating contaminated natural resources and wells and providing regular reports of its remedial activities to NJDEP.  Funds allocated to NJDEP would primarily be used to address PFAS in drinking water systems.

The settlement comes after a 2019 NJDEP directive for Solvay and four other chemical manufacturers responsible for “significant contamination of New Jersey’s natural resources” to provide financial compensation for PFAS-related contamination and information on their PFAS use and emissions.  NJDEP’s 2020 complaint argued that Solvay did not fully comply with the directive.  According to NJOAG, Solvay is the first company identified by the directive to reach a proposed settlement with NJDEP.

A formal notice of the proposed settlement was published in the New Jersey Register on August 7, 2023.  Public comments on the proposal will be accepted through October 6, 2023.

TSCA Enforcement Action Taken Over Failure to Comply with PFAS SNUR

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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.

EPA Takes Action Against Denka for Air Pollution

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On March 20, 2023, the Department of Justice (“DOJ”), on behalf of EPA, filed a motion for a preliminary injunction under the Clean Air Act (“CAA”), asking the federal district court for the eastern district of Louisiana to order Denka Performance Elastomer LLC (“Denka”) to immediately reduce chloroprene emissions from its neoprene manufacturing facility in LaPlace, Louisiana. The motion follows DOJ’s February complaint arguing that plant operations present an imminent and substantial endangerment to public health and welfare due to cancer risks posed by Denka’s chloroprene emissions.

The Denka facility is currently the only facility in the country producing neoprene, a flexible, synthetic rubber used to manufacture a variety of products, including wetsuits, automotive belts and hoses, and orthopedic braces. Chloroprene is a liquid raw material used to produce neoprene.  It is emitted into the air from various production processes at the facility.

In 2010, EPA Integrated Risk Information System (IRIS) found that chloroprene is “likely to be carcinogenic to humans.” In a separate civil proceeding, Denka has challenged the process by which the Environmental Protection Agency considered the scientific information supporting its understanding of the human health risks posed by chloroprene.

According to the complaint, air monitoring conducted by both the EPA and Denka over the past several years consistently shows chloroprene concentrations in the air near Denka’s LaPlace facility that are as high as 14 times the recommended levels.  In the complaint, DOJ expressed particular concern for students attending the 5th Ward Elementary School, located approximately 450 feet from Denka’s facility.

Associate Attorney General Vanita Gupta commented on the complaint stating, “We allege that Denka’s emissions have led to unsafe concentrations of carcinogenic chloroprene near homes and schools in St. John the Baptist Parish, Louisiana. The Justice Department’s environmental justice efforts require ensuring that every community, no matter its demographics, can breathe clean air and drink clean water. Our suit aims to stop Denka’s dangerous pollution.”

EPA Takes Enforcement Action Against Companies for Misbranded Pesticide

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On September 21, 2022, EPA announced settlements with two New Jersey companies for the sale and distribution of the pesticide Zoono Microbe Shield. The companies made false and misleading claims stating that the registered pesticide was suitable for use as a disinfectant or sanitizer against the virus which causes COVID-19. The companies’ claims were a violation of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) which prohibits false and misleading claims of registered pesticide products.

The two companies, Zoono USA and Zoono Holdings, advertised and sold the Zoono Micro Shield product on their own company websites as well as on Amazon. The product’s labeling contained public health claims that EPA stated differ substantially from statements submitted to the Agency in connection with its pesticide registration; in other words, the companies were committing misbranding under FIFRA, The product’s registration allows only for labeling claims related to effectiveness against odor-causing bacteria, bacteria that cause staining and discoloration, fungi, and algae. The product is not registered for use as a disinfectant or sanitizer, nor is it registered for any public health purpose. Therefore, it was a violation of the statute to make such claims. The settlements included civil penalties in the amounts of $205,000 and $120,000.

Environmental Appeals Board interprets TSCA § 8(e).

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Last month, the U.S. Environmental Appeals Board (EAB) issued a rare and much-anticipated opinion interpreting the continuing violations doctrine and section 8(e) of the Toxic Substances Control Act (TSCA) in In re Elementis Chromium, TSCA Appeal No. 13-03 (March 13, 2015). The EAB overturned the November 2013 ruling [PDF] by the Administrative Law Judge (ALJ), which found that Elementis Chromium, Inc., a manufacturer of chromium chemicals, had violated TSCA § 8(e) by failing to report to EPA an epidemiological study on hexavalent chromium. In its March 13 decision, the EAB affirmed the ALJ in finding that the “continuing violations” doctrine applies to § 8(e) violations, thus rejecting Elementis’ statute of limitations argument. However, the EAB also held that Elementis had not violated TSCA § 8(e) because the corroborative information reporting exemption applied, and vacated the $2.5 million penalty imposed by the ALJ.

TSCA § 8(e) requires the immediate reporting to EPA of “information which reasonably supports the conclusion” that a substance “presents a substantial risk of injury to health or the environment.” In this case, a trade group of which Elementis was a member commissioned an epidemiological study on exposure to hexavalent chromium and lung cancer. EPA conducted a similar study in 2000, based on data from one facility, while the Elementis study, which finished in 2002, involved multiple “modernized” manufacturing plants. Both studies concluded that there was a positive association between hexavalent chromium exposure and lung cancer. EPA learned of the Elementis study in a 2006 Washington Post article, subpoenaed the study in 2008, and filed an administrative complaint against Elementis in 2010.

The EAB rejected Elementis’ claim that the general five-year federal statute of limitations barred EPA’s enforcement action. Elementis argued that the alleged violation accrued in 2002, when the company obtained the study, so the statute of limitations expired in 2007. However, the EAB found that the continuing violations doctrine, a special rule of accrual meaning that the period of limitations runs anew each day, applies to TSCA § 8(e), meaning that the limitations period only begins to run once the contested information is finally reported. The EAB concluded that the plain language and substance of § 8(e) imposes a continuing obligation, and violations of such are also continuing in nature. In Elementis, the company’s “last act of non-compliance” occurred on November 17, 2008, when the study was submitted to EPA, so the agency’s 2010 administrative complaint was within the five-year period.

Next, the EAB affirmed that the entire study was presumptively reportable as information which reasonably supports the conclusion that a substance presents a substantial risk of injury, rejecting Elementis’ argument that the only reportable information was “the single sentence conclusion regarding an elevated risk of cancer.” Instead, the EAB adopted a broad interpretation of the terms “information” and “reasonably supports,” concluding that Congress intended to address “the underlying data, assumptions, methodology, and analyses that actually provide the verification, corroboration, and substantiation” of the conclusion that a chemical poses a substantial risk of injury.

Nevertheless, the EAB found that the contested study was ultimately exempt from the reporting obligation because EPA established via guidance an exemption for information that is “corroborative of well-established adverse effects.” The EAB diverged from the ALJ’s analysis in finding that the Elementis study addressed a well-established adverse effect, i.e., increased incidence in lung cancer is a well-established adverse effect of exposure to hexavalent chromium. In contrast, the ALJ focused on the dose-response relationship between chromium and cancer, which the EAB characterized as an inapposite description of the potency of the chemical or conclusion about risk.

The EAB further found that the study was “corroborative” of well-established adverse effects, based not on the ordinary meaning of “corroborative,” but on agency guidance documents. This guidance describes that information is non-corroborative when it shows “the effects of a chemical are of ‘a more serious degree or different kind’ than previously perceived.” Therefore, information would be corroborative “if it shows that effects are less severe, they occur only at higher doses, or they occur in a species or strain of test animal, or by a route of exposure, that has been previously documented.” In this case, the study “only revealed statistically significant lung cancer effects at a substantially higher level” than in EPA’s own study. Thus, the Elementis study qualified for the exemption, although the EAB noted that it would have affirmed the ALJ’s decision but for EPA’s self-imposed limitation on “the broad reach of the statute with its interpretation of what information EPA is ‘adequately informed of’ in its guidance documents.”

The Elementis decision raises several interesting issues under TSCA, especially concerning the breadth of information companies must report under § 8(e) and which other TSCA sections might be interpreted as imposing continuing obligations. How EPA reacts to the decision will be instructive, especially if it chooses to refine or redefine its guidance on the corroborative information reporting exemption. Alternatively, Elementis may be of interest to legislators and stakeholders currently involved in negotiating a new framework for TSCA.

EPA’s new Strategic Plan: continuity in chemicals while enforcement focuses on Next Generation Compliance.

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In April, EPA published its final Strategic Plan for FY 2014-2018, which includes ensuring chemical safety as a top-level goal and emphasizes the agency’s new paradigm of “Next Generation Compliance.” As proposed in the draft plan released in November, EPA plans to reduce the number of inspections and enforcement actions in order to focus instead on large, complex cases with the “highest impact on protecting public health and the environment.” In the final Plan, the agency clarifies that the advanced monitoring and electronic reporting entailed in its Next Generation Compliance approach will be used to supplement traditional enforcement techniques, rather than replace them.

The Strategic Plan is organized around the following five goals:

  • Goal 1: Addressing climate change and improving air quality
  • Goal 2: Protecting America’s waters
  • Goal 3: Cleaning up communities and advancing sustainable development
  • Goal 4: Ensuring the safety of chemicals and preventing pollution
  • Goal 5: Protecting human health and the environment by enforcing laws and assuring compliance

We will discuss goals 4 and 5 in this blog post.

Goal 4: Safe chemicals and pollution prevention

In pursuit of Goal 4, the Agency’s announced “Priority Goal” for the next year is to “[a]ssess and reduce risks posed by chemicals and promote the use of safer chemicals in commerce.” EPA plans to complete more than 250 assessments of pesticides and other commercially available chemicals by September 30, 2015. These assessments will include the evaluation of potential risks to endocrine system disruption. By 2018, EPA plans to make Endocrine Disruptor Screening Program (EDSP) decisions for all “chemicals for which complete EDSP data are expected to be available by the end of 2017,” as well as complete assessments of all currently identified TSCA Work Plan chemicals. In addition, one of EPA’s strategic measures for pollution prevention is to increase the number of safer chemicals and safer chemical products by 1,900 by 2018 – currently, EPA’s Design for the Environment program recognizes 600 safer chemicals and 2,500 safer chemical products.

The Plan also emphasizes the agency’s support for strengthening and modernizing the Toxic Substances Control Act (TSCA), arguing that EPA needs the “mechanisms and authorities to expeditiously target and promptly assess and regulate new and existing chemicals.” In particular, EPA points to “large, troubling gaps” in the data available and current knowledge on many widely used chemicals.

The Plan also emphasizes EPA’s continuing effort to increase public access to the agency’s chemical information and assessment tools, such as ChemView and the Chemical Information System (CIS). EPA is planning to enhance both of these tools, which are both part of the Next Generation Compliance initiative. CIS will be upgraded to allow electronic reporting for “nearly all required TSCA submissions” and to add tools and models related to chemical risk management. Planned improvements to ChemView will expand public access to TSCA chemical information and enable faster, automated posting of non-confidential data for the public.

EPA plans to complete several evaluations of its work in this area over the next four years, the results of which may direct future agency efforts. In FY 2014, EPA will begin reviewing key factors affecting TSCA Work Plan chemical assessments, followed by an evaluation of the effectiveness of new aspects of the pesticide registration review process, in FY 2015. In addition, biennial reviews are scheduled for 2015 and 2017 of the fee levels charged to submitters of New Chemical Pre-Manufacture Notices.

Goal 5: Enforcement and compliance assurance

The EPA’s main objective under Goal 5 is to target the most serious hazards for enforcement actions, particularly cases “where noncompliance is a significant contributing factor, and where federal enforcement attention can have a significant impact.” EPA’s intent here is not only to address the problems with the biggest impact, but to take on the largest and most complex cases that states might not be equipped to handle. Notably, this includes situations where “the patterns of noncompliance are broad in scope and scale such that EPA is best suited to take action.”

Under the Plan, the Next Generation Compliance approach not only relies on improvements in monitoring and reporting technology, but also entails “embracing new strategies for rule design and case targeting.” Of particular interest to regulated entities is the agency’s focus on expanding transparency and sharing data. The agency plans to build “compliance drivers” into rules and permits to make them more effective, such as improved monitoring, self- and third-party certifications, public disclosure, and “easily monitored product designs or physical structures in facilities.” Another part of Next Generation Compliance is EPA’s use of data analysis and targeting tools to improve identification, public notification, and responses to serious violations. EPA is currently considering new enforcement approaches, such as “electronic responses to electronically reported violations.”

Notably, in the Plan’s table of “Strategic Enforcement and Compliance Measures,” the Next Generation Compliance Measures are described as supplemental “examples” which are still under discussion with states and other parties. These measures include: the number of settlements resulting from or incorporating advanced monitoring technologies; use by regulated entities of advanced self-monitoring technologies; and public use of compliance technology tools (such as ECHO). In addition, the Plan notes that new ways of measuring effectiveness under Next Generation Compliance may emerge in the future, such as credit for avoiding violations.

Effects of the Strategic Plan

EPA’s goals in the realm of chemicals management likely come as no surprise to those in the sector. The agency’s support for TSCA modernization has been clear for years, and the Strategic Plan maintains EPA’s commitment to assessing TSCA Work Plan chemicals – of course, both of these efforts may be affected if Congress manages to successfully pass new TSCA legislation this session. Likewise, the Plan renews the agency’s commitment to increasing the number of safer chemicals and safer chemical products through its Design for the Environment program, and to the evaluation of endocrine disruptors. The Strategic Plan’s incorporation of various programs to improve information access and handling may be of more immediate significance to regulated entities as new electronic reporting processes are rolled out. Firms will also have to continue to manage the balance between protecting Confidential Business Information and EPA’s desired transparency goals.

Ultimately, EPA’s enforcement focus on targeting the largest and most complex cases will likely mean that fewer federal enforcement actions will be pursued in the case of less serious violations and hazards. At the same time, the agency’s commitment to the Next Generation Compliance initiative means that EPA may be able to use more sophisticated data analytics and targeting to recognize broad patterns of noncompliance. More speculatively, the enhanced focus on self-certification, public disclosure, transparency and data sharing, together with improved cooperation with states, may result in increased citizen suits, toxic tort litigation, and state-level enforcement actions along with pressure on companies to reduce or eliminate certain chemicals.

Elementis Chromium appeals $2.6 million penalty in TSCA 8(e) reportable data case.

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In a case that may have broad implications for chemical manufacturers, Elementis Chromium has appealed the $2.57 million penalty handed down by an EPA Administrative Law Judge (ALJ) in November 2013. The ALJ ruled that Elementis, one of the world’s largest chromium manufacturers, had violated section 8(e) of the Toxic Substances Control Act (TSCA), which requires reporting information about serious health risks to EPA. In addition to the hefty penalty at stake, the Elementis case is worth watching because it signals that EPA is continuing to pursue a very broad interpretation of what constitutes reportable data under TSCA § 8(e).

In its appeal [PDF] to the Environmental Appeals Board (EAB), Elementis makes two arguments: (1) EPA’s enforcement action was barred by the federal five-year statute of limitations; and (2) the epidemiological study at issue was not required to be submitted under TSCA § 8(e).

According to Elementis, the study’s findings were consistent with previous studies and merely confirmed and corroborated risk findings already known to EPA and the industrial health community. Elementis argues that the ALJ erred in interpreting new “substantial risk information” under TSCA to include “mere differences in scientific study methods or subjects between studies.” Instead, Elementis argues that EPA was already aware of the study’s information on substantial risk of injury to human health, “namely that high cumulative exposures to hexavalent chromium lead to an increased risk of lung cancer.”

Elementis’ appeal also argues that since § 8(e) requires the “immediate” reporting of certain information to EPA, violations of the provision are not “continuing” in nature. Thus, if the five-year statute of limitations began running upon the company’s receipt of the study in 2002, EPA’s 2010 Complaint was filed beyond the statute of limitations. According to Elementis, a violation of § 8(e) is not “continuing,” since there is no clear indication in the statute that Congress intended for the continuing violation exception to apply and, moreover, the statute establishes a definite timeframe for compliance by requiring “immediate” reporting. The company’s appeal criticizes the ALJ’s interpretation of the statute, which is described as establishing a “never-ending duty to inform that begins immediately.”

Furthermore, Elementis argues that the Supreme Court’s decision in SEC v. Gabelli, declining to apply the “discovery rule” in the case of an SEC civil enforcement action for an alleged fraud, means that the EPA’s enforcement action is time-barred here. In Gabelli, the Supreme Court relied on public policy reasoning in criticizing “grafting the discovery rule onto” the federal five-year statute of limitations in actions for penalties. Elementis argues that the continuing violation exception functions like the discovery rule in Gabelli, and thus was applied by the ALJ in error.

The Response Brief from EPA Region 8 to Elementis’ Appeal Brief has not yet been posted to the EAB docket, although it is expected soon.

Chromium manufacturer fined by EPA for failure to disclose health risks.

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Last month, an Administrative Law Judge (ALJ) ruled on a relatively rare Toxic Substances Control Act (TSCA) enforcement case, ordering Elementis Chromium to pay a $2.57 million penalty for violating TSCA § 8(e), a provision of the law that required the company to disclose information about serious health risks.  The ALJ found that Elementis Chromium, one of the world’s largest manufacturers of chromium chemicals, failed to notify EPA of a study finding substantial risk of injury to human health from exposure to hexavalent chromium.

The November 12, 2013 decision [PDF] is the latest development in an enforcement action that EPA initiated in 2010. At issue in the case was an industry-backed study documenting health impacts – including increased cancer risks – on workers in chromium processing plants: EPA contended that the study filled a “data gap” in the literature, while Elementis argued, among other defenses, that EPA was already adequately informed of the information. However, the ALJ interpreted “information” broadly, following EPA guidance, in concluding that the study in question presented new substantial risk information about occupational hexavalent chromium exposure. Chief ALJ Susan Biro also thoroughly discussed and ultimately rejected Elementis’ contention that the study fell under an exception to TSCA § 8(e) as merely “corroborative of well-established adverse effects.”

The decision is also notable for its discussion interpreting the EPA’s penalty policy on “attitude,” a sub-factor of “culpability.” ALJ Biro increased the penalty amount by 10% for attitude, citing Elementis’ “bad faith” and attempts to influence the Occupational Safety and Health Administration’s exposure limits for chromium while keeping the study information in its “back pocket.” The decision concluded: “Over time, …the frontier in risk assessment is always going to be studying lower and lower exposures…. This decision takes into account that Congress intended to place the onus for understanding that frontier on the industries whose workers may be at risk.”

The decision becomes final 45 days after its issuance unless Elementis chooses to appeal to the Environmental Appeals Board.

EPA agrees to update enforcement guidance for FIFRA and TSCA.

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The Environmental Protection Agency (EPA) has agreed to update its enforcement guidance for the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and Toxic Substances Control Act (TSCA) following a report [PDF] from the agency’s Office of Inspector General (OIG) released on September 27, 2013. The report contained findings and recommendations related to FIFRA and TSCA good faith reductions and “ability to pay” penalties, based on the OIG’s review of 23 FIFRA cases and 20 TSCA cases (13 lead disclosure and 7 PCB cases).

The OIG found that EPA regions differed in how they assessed FIFRA and TSCA enforcement penalty reductions; some appeared to justify reductions automatically, without considering the good faith compliance efforts of the violators. Because of the lack of adequate guidance and supporting documentation for determining and justifying good faith penalty reductions, there is a risk that EPA might treat violators inequitably and might be losing opportunities to fully collect all penalties due. Based on the OIG’s findings and recommendations, EPA has agreed to reissue the enforcement policy document GM-88, “Documenting Penalty Calculations and Justifications in EPA Enforcement Actions.”

The OIG also found that EPA’s enforcement response and penalty policy for lead-based paint disclosure rule to address violators who are unable to pay penalties is inadequate. Specifically, no guidance exists for applying non-monetary penalty alternatives (such as public service or delayed payment plans) when violators do not have the cash to pay the penalty. EPA has agreed to evaluate whether additional guidance is needed to clarify whether non-monetary alternatives must meet the agency’s existing Supplemental Environmental Projects policy.

In addition, the OIG report found that EPA’s “INDIPAY” economic model may be limited in its ability to help teams evaluate individuals’ claims of inability to afford penalties or clean-up costs. According to the OIG, the INDIPAY model does not assess an individual’s assets and should be updated to improve its accuracy. Furthermore, the report found that EPA does not provide adequate guidance or case development training to help regional teams evaluate ability to pay cases. In order to improve the agency’s consistency in handling the growing number of ability to pay cases, EPA has agreed to provide regional staff with updated training for case development of ability to pay claims. EPA also agreed to update its 1986 document “Guidance on Determining a Violator’s Ability to Pay a Civil Penalty” [PDF] to further improve guidance on evaluating ability to pay cases and address the inadequacies of the INDIPAY model.

EPA Announces FIFRA/TSCA Settlements with Finland-Based Kemira Group

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TSCA/FIFRA Enforcement:

EPA continues to steadily increase its enforcement of U.S. chemical control laws.  Last Thursday, the EPA announced settlements with two subsidiaries of the Finland-based Kemira Group to resolve alleged violations of Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and Toxic Substance Control Act (TSCA). Kemira Chemicals agreed to pay a civil penalty of over $300,000 to settle claims that the company sold and distributed unregistered and misbranded pesticides, and violated pesticide production reporting requirements. Kemira Chemicals also agreed to correct the alleged violations.

In addition, Kemira Water Solutions agreed to pay a civil penalty of over $500,000 regarding violations of TSCA’s Inventory Update Reporting (IUR) rule during the 2006 reporting period. Under the IUR rule, manufacturers and importers of substances included on the TSCA Chemical Substances Inventory must report the production volume and location of each facility processing such chemicals; this information is used to develop risk-screening and assessment. EPA discovered Kemira Water Solutions’ reporting violations following a January 2012 inspection and the company has since submitted the required information.