EPA Administrator Pruitt Establishes Policy Regarding “Regulation Through Litigation”

On October 16, 2017 EPA Administrator Scott Pruitt said in a directive and accompanying memorandum that he is ending a “sue-and-settle” practice that has resulted in closed-door agreements committing the agency to “regulation through litigation.”

Under the policy, the EPA will:

  1. Publish any notices of intent to sue the Agency within 15 days of receiving the notice;
  2. Publish any complaints or petitions for review in regard to an environmental law, regulation, or rule in which the Agency is a defendant or respondent in federal court within 15 days of receipt;
  3. Reach out to and including any states and/or regulated entities affected by potential settlements or consent decrees;
  4. Publish a list of consent decrees and settlement agreements that govern Agency actions within 30 days, along with any attorney fees paid, and update it within 15 days of any new consent decree or settlement agreement;
  5. Expressly forbid the practice of entering into any consent decrees that exceed the authority of the courts;
  6. Exclude attorney’s fees and litigation costs when settling with those suing the Agency;
  7. Provide sufficient time to issue or modify proposed and final rules, take and consider public comment; and
  8. Publish any proposed or modified consent decrees and settlements for 30-day public comment, and providing a public hearing on a proposed consent decree or settlement when requested.

This policy may lead to increased and longer litigation, with the courts exercising direct control of the outcome. For example, the court might set the schedule for publication of an overdue rule instead of the litigants. It may also lead to more influence for third party intervenors who generally are shut out of the consent order negotiations by the Department of Justice (DOJ).

One thing to keep in mind moving forward, however, is that while the DOJ does consult with the EPA on litigation strategy, technically the DOJ has the authority to settle cases. So, if DOJ wants to settle a case, it is unclear if and how Administrator Pruitt’s policy will deter DOJ’s decision-making process.

Separately, Attorney General Jeff Sessions has barred DOJ attorneys from negotiating settlements that result in payments from industry to third-party organizations, such as Supplemental Environmental Projects paid to environmental organizations.

EPA seeks input on ecolabels for paints, flooring, and furniture.

As part of its pilot project to test its “Draft Guidelines for Product Environmental Performance Standards and Ecolabels for Voluntary Use in Federal Procurement,” the Environmental Protection Agency (EPA) is seeking input on private sector environmental performance standards and ecolabels applicable to paints/coatings, flooring, and furniture. According to the Information Collection Request (ICR) submitted to the Office of Management and Budget (OMB), the Agency is expecting responses from standards development organizations, ecolabel programs, and certification entities with environmental performance standards for products. EPA is also asking these entities to participate in self-assessments, using checklists specific to each product category and based on the draft Guidelines, as well as in follow-up interviews with an independent assessor. The ICR was announced in a Federal Register notice published on Monday; public comments on the ICR must be received by May 25, 2016.

EPA developed the draft Guidelines in 2013 to help federal purchasers select appropriate private sector ecolabels and standards for environmentally preferable purchasing. In the ICR, EPA states: “While Federal purchasing policy is clear for the several standards and ecolabels that are listed in statute, regulation, or Executive Order, the lack of independently assessed information about and federal guidance on using other product environmental performance standards and ecolabels often results in an inconsistent approach by Federal purchasers and confusion and uncertainty for vendors and manufacturers.” With this ICR, EPA seeks to address this problem by testing an approach to determine which standards and ecolabels to support “in a fair, transparent, and consistent manner.” Ecolabels and standards will be assessed based on the criteria used in developing and managing the standards and ecolabels as well as “the effectiveness of the standards in ecolabels in protecting environmental and human health.”

EPA is contracting with two companies, Resolve and Industrial Economics, to conduct the pilot project to further refine the draft Guidelines and test how to assess standards and ecolabels. Resolve will “convene a coordinating Governance Committee, product category-specific multi-stakeholder panels,” while Industrial Economics will “develop and pilot test an approach” to assess standards and ecolabels in paints/coatings, flooring, and furniture.

Along with the ICR itself, the pilot project’s survey and assessment criteria are also available in the ICR’s docket (EPA-HQ-OPPT-2014-0838) on Regulations.gov.

EPA issues final Significant New Use Rule for HBCD in textiles.

EPA has released the prepublication version [PDF] of its final Significant New Use Rule (SNUR) for the brominated flame retardants hexabromocyclododecane or 1,2,5,6,9,10-hexabromocyclododecane (HBCD). HBCD is persistent, bioaccumulative, toxic, and poses potential human health concerns, including reproductive and developmental effects. This Final Rule designates the use of HBCD in consumer textiles as a significant new use which must be reported to EPA at least 90 days in advance. Under this SNUR, consumer textiles include “bolts of cloth and draperies, as well as textiles that are part of household furniture and mattresses.” The Rule does not apply to the use of HBCD in motor vehicles or other current uses, such as non-consumer textiles, like firefighters’ suits, and building insulation.

The SNUR partially revokes the usual articles exemption, 40 CFR 721.45(f), meaning that the rule’s notification requirements apply to importers and processors of HBCD as part of a “textile article,” like an upholstered chair. Notably, the SNUR applies to all importers and processors of HBCD as part of a textile article, regardless of whether it is a “consumer textile.” EPA’s rationale is that “if the inapplicability of the exemption was limited to consumer textiles, undifferentiated textiles (e.g., the type of textiles that could be for a consumer use or a non-consumer use), could be imported or processed and distributed in commerce for consumer use without notification to the Agency.”

The SNUR subjects exporters of HBCD in consumer textiles to the export notification requirements of Section 12(b) of the Toxic Substances Control Act (TSCA). However, EPA declined to require § 13 import certification for HBCD as part of articles.

EPA has made two changes to this SNUR since it was first proposed in 2012. First, the agency narrowed the inapplicability of the articles exemption to apply only to importers and processors of HBCD as part of a textile article. Thus, importers and processors of HBCD in non-textile articles are not subject to the SNUR. In addition, EPA made minor clarifying changes to its definition of “consumer textile,” which is now defined as follows:

Consumer textile means any cloth, fabric, or other item produced during a milling process for textiles (including spinning, weaving, knitting, felting, or finishing), that is sold or made available either as a product or as part of a product, to a private individual who uses it in or around a permanent or temporary household or residence, during recreation, or for any personal use or enjoyment. Consumer textiles can include, but are not limited to, bolts of cloth and draperies, as well as textiles that are part of upholstered household furniture and mattresses.

EPA also rejected commenters’ requests to establish a “policy framework by rule for the issuance of article SNURs.” The agency responded that a policy framework was not necessary to reach the conclusion that notification should be required for importing or processing HBCD in consumer textiles.

HBCD has recently been subject to significant scrutiny by EPA and others. Last month, EPA issued initial documents for its TSCA Work Plan risk assessment of HBCD in foam and polystyrene products. In 2014, EPA’s Design for Environment (DfE) program released an Alternatives Assessment for HBCD, identifying safer alternatives in foam insulation applications. The Consumer Product Safety Commission (CPSC) has been petitioned by a coalition of environmental, health, and consumer advocates to ban certain products containing HBCD and related flame retardants. Outside the U.S., HBCD was added as a prohibited substance to the Stockholm Convention on Persistent Organic Pollutants and is being withdrawn in Europe under REACH.

 

EPA releases interim guidance on data requirements for antimicrobial pesticides and food contact surfaces.

Last week, EPA released interim guidance on the agency’s toxicology data requirements for antimicrobial pesticides on food contact surfaces. The interim guidance clarifies that the 200 parts per billion (ppb) threshold that triggers different data requirements is based on “total estimated daily dietary intake” for an individual and not the total amount of residue on a food item, which interpretation is in line with the policy of the U.S. Food and Drug Administration (FDA). Generally, if pesticide residues from food contact services are found in food at 200 ppb or less, EPA requires the submission of certain toxicology data, and additional data may be required if residues are greater than 200 ppb.

The interim guidance was issued as part of a March 2, 2015 settlement reached between the EPA and the American Chemistry Council (ACC) resolving the trade group’s challenge of EPA’s 2013 Final Rule on “Data Requirements for Antimicrobial Pesticides.” The settlement also requires that EPA propose, by July 2, 2015, a guidance document called the “Antimicrobial Pesticide Use Site Index,” which will be subject to public comment. In addition, by September 2, 2017, the agency must propose a “correction” to 40 C.F.R. § 158.2230(d) clarifying that the 200 ppb level relates to total estimated daily dietary intake, consistent with the FDA policy.

EPA releases initial analysis for TSCA Work Plan assessment of 1,4-dioxane.

EPA today announced the release of its Problem Formulation and Initial Assessment for 1,4-dioxane, a widely used industrial solvent and ingredient in a variety of products, including cleaners, cosmetics, dyes and paint strippers, which the EPA has classified as “likely to be carcinogenic to humans.” The Problem Formulation and Initial Analysis, part of the agency’s Toxic Substances Control Act (TSCA) Work Plan risk assessment program, concludes that there is no concern for inhalation exposure of ambient air emissions by the general population. However, EPA plans to further assess potential risks to both workers exposed via inhalation during product formulation and use as a cleaning agent and to workers and consumers that use products containing 1,4-dioxane as a contaminant, such as paints, varnishes, adhesives, cleaners and detergents. EPA intends to use existing data and methods to conduct additional risk analysis, review previous health and exposure studies, and “develop margins of exposure and cancer risk estimates.” The Problem Formulation and Initial Assessment also concluded that assessing risk from drinking water exposure is not currently necessary due to ongoing monitoring by EPA’s Office of Water, so “decisions as to whether or not to regulate the contaminant in drinking water will be considered as part of the EPA’s Regulatory Determination process.” In addition, the agency announced that further environmental risk analysis would not be pursued because of the low hazard profile for 1,4-dioxane to aquatic organisms and the lack of hazard data for sediment and soil organisms.

Environmental Appeals Board interprets TSCA § 8(e).

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.

Proposed reporting requirements for nanomaterials released.

Companies that manufacture, import or process nanoscale materials would be subject to reporting requirements under a new proposed rule released today by EPA. EPA is proposing reporting obligations concerning use, exposure, and other factors under section 8(a) of the Toxic Substances Control Act (TSCA). The proposed rule would apply to nanoscale chemical substances in the marketplace that have unique properties related to their size. The agency intends to use this information to determine if any further action under TSCA is needed.

Under the proposed rule [pre-publication version, PDF], companies would be required to report if they manufactured or processed a “discrete form” of a reportable nanoscale substance during the three years preceding the rule’s final effective date. EPA also proposes a continuing reporting requirement for companies intending to manufacture or process a discrete form of a reportable chemical substance after the rule’s final effective date. These manufacturers or processors would be required to report to EPA 135 days before the commencement of manufacturing or processing.

To the extent that it is known or reasonably ascertainable to the reporter, companies would have to submit the following information:

  • Specific chemical identity;
  • Material characteristics like morphology and surface modifications;
  • Physical and chemical properties;
  • Maximum weight percentage of impurities and byproducts;
  • Production volumes;
  • Use information;
  • Detailed methods of manufacturing or processing;
  • Exposure information, including estimates of numbers of individuals exposed in the workplace or in other scenarios;
  • Release information, including estimates of amounts released;
  • Risk management practices, such as protective equipment or hazard warnings; and
  • Existing data concerning environmental and health effects.

Generally, nanoscale materials are chemical substances that have structures with dimensions “at the nanoscale,” meaning 1-100 nanometers (nm), and may have properties different from the same chemicals with structures at a larger scale, such as greater strength or lighter weight.  The proposed rule would apply to substances that are:

  • Solid at 25°C and atmospheric pressure; and are
  • Manufactured or processed in a form where the primary particles, aggregates, or agglomerates are in the size range of 1-100nm and exhibit unique and novel characteristics or properties because of their size.

The proposed reporting requirements apply to “discrete forms” of reportable chemical substances. In some cases, companies would be required to report separately for multiple nanoscale forms of the same chemical substance. The agency’s intent is to focus on “intentionally manufactured chemical substances at the nanoscale,” so unintended variations in particle sizes between production batches, for example, should not trigger § 8(a) reporting. EPA proposes to distinguish between these “discrete forms” based on a combination of the following three factors:

  1. a change in process to affect a change in size and/or a change in properties of the chemical substances manufactured at the nanoscale;
  2. a change in mean particle size of 10% or greater; and
  3. the measured change in at least one of the following properties, zeta potential, specific surface area, dispersion stability, or surface reactivity, is greater than 7 times the standard deviation of the measured values.

Other examples of discrete forms include nanomaterials with different morphologies (spheres vs. rods) and nanoscale forms of the same material but coated with different substances.

The proposed rule applies to mixtures, including when nanomaterials are manufactured or processed “solely as a component of a mixture, encapsulated material, or composite.” However, if a nanomaterial is incorporated into a mixture, encapsulated material, or composite by the nanomaterial’s manufacturer, the incorporation step does not have to be separately reported.

EPA proposes to apply a modified version of the existing small manufacturer/processor exemption to § 8(a) requirements. Because nanoscale materials are produced at much lower production volumes, EPA seeks to eliminate the 100,000 pound volume threshold for exempted small manufacturers or processors. Instead, a company could qualify as a small manufacturer/processor if it has “sales of less than $4 million” per year.

The proposed rule also excludes certain substances, including nanoclays, DNA, RNA, proteins, and chemical substances “which dissociate completely in water to form ions that are smaller than 1 nanometer.” Certain reporting which would be duplicative is also excepted; e.g., companies that submitted information under EPA’s voluntary Nanoscale Materials Stewardship Program do not need to re-submit, nor do submitters of Premanufacture Notices (PMNs) filed since January 1, 2005.

Information would be collected electronically, using a modified version of the reporting form used by the voluntary NMSP initiative, and compatible with EPA’s existing Central Data Exchange (CDX) and Chemical Information Submission System (CISS), both used for other TSCA reporting. EPA is not proposing an inventory for nanoscale materials, although non-confidential information collected through this proposed rule would be published in ChemView.

In addition to the above proposed reporting requirements, EPA is seeking input on various related issues, including “the possibility of a future rule that would require periodic reporting of chemical substances manufactured at the nanoscale, similar to reporting that occurs under the Chemical Data Reporting (CDR) rule.”

EPA is accepting comments on the proposed rule for 90 days following its publication in the Federal Register. The agency also anticipates holding a public meeting during the comment period.

EPA completes risk assessment for n-methylpyrrolidone (NMP).

EPA has made more progress with its Toxic Substances Control Act (TSCA) Work Plan with yesterday’s release of the agency’s final risk assessment for N-Methylpyrrolidone (NMP) or 1-methyl-2-pyrrolidinone, a chemical commonly used in paint and coating removal products. NMP is estimated to be used at over 184 million pounds per year, in paint strippers, agricultural chemicals, electronic cleaning, and petrochemical processing. The risk assessment identifies developmental toxicity risks for pregnant women and women of child-bearing age who have high exposure to NMP, as either consumers or workers. Risks were identified for both acute and chronic exposures, although acute exposure risks could be mitigated by using chemical-resistant gloves and using NMP products for less than four hours a day.

EPA is considering a range of voluntary and regulatory actions to reduce risks from NMP exposure. This is the fifth final risk assessment completed under the TSCA Work Plan.

EPA and FDA announce data sharing agreement for CBI.

Today, EPA and the Food and Drug Administration (FDA) announced a Memorandum of Understanding (MOU) to share data on pesticides and toxic substances. According to a notice published last month in the Federal Register, in response to the FDA’s spring 2014 request, EPA will grant FDA access to information collected under the Toxic Substances Control Act (TSCA) and Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), including information claimed by submitters as Confidential Business Information (CBI). This data-sharing initiative “is intended to maximize the utility of data collected under those statutes, and enhance the efficiency of the participants’ regulatory processes and facilitate better risk management activities.” The MOU applies specifically to EPA’s Office of Chemical Safety and Pollution Prevention and FDA’s Foods and Veterinary Medicine Program, Center for Food Safety and Applied Nutrition, and Center for Veterinary Medicine.

FDA and EPA “have complementary roles” regulating substances incorporated into food (including animal feed), animal drugs, and cosmetics. Antimicrobial food wash products, for example, must meet different standards for safety and non-adulteration of food (FDA), and no adverse environmental effects (EPA).

The MOU covers the sharing of non-public information exempt from public disclosure, including CBI and “confidential commercial information” (CCI). Information will be shared “on a reciprocal and as-needed basis” for substances that may be present in human food, animal food and feed, animal drugs, and cosmetics. The MOU provides that each agency will develop internal procedures and designate liaison officers for the information-sharing exchanges and to protect against unauthorized disclosure of CBI or CCI. Appendices to the MOU establish a framework process for information sharing, including specific language to be used in requesting information or responding to a request.

The MOU does not specify any limits as to programmatic uses for shared information. The disclosure of non-public information remains governed by applicable laws and regulations, and non-public information may not be disclosed further or shared with personnel at the other agency that have not been authorized to access non-public information. If EPA requests information from FDA identified as a trade secret, FDA will assess whether the information is in fact trade secret. TSCA/FIFRA-designated CBI requested by FDA will have to be returned to EPA or destroyed when no longer needed. Either agency may choose not to share requested information, or may choose to limit the scope of information provided in response to a request. The agencies may also protect information “in connection with research that has not been peer reviewed.”

EPA agrees to clarify data requirement rule for antimicrobial pesticides.

EPA and the American Chemistry Council (ACC) have reached a settlement regarding the ACC’s petition concerning data requirements for antimicrobial pesticides. This settlement addresses a Final Rule published by EPA on May 8, 2013, “Data Requirements for Antimicrobial Pesticides,” for which the ACC, the chemical industry trade group, sought judicial review in the U.S. Court of Appeals for the D.C. Circuit.

Under the settlement, EPA will within the next four months release for public comment a proposed guidance document, “Antimicrobial Pesticide Use Site Index.” This guidance will include “a compilation of existing antimicrobial pesticide use sites and identify how each use site fits within the 12 use patterns established in the regulation.” The Use Site Index will include the following descriptions, as set forth in the settlement:

  • Direct Food Use: a use is generally considered to be a direct food use if an antimicrobial pesticide is intended to be directly applied to food (defined for purposes of the Federal Food, Drug, and Cosmetic Act at 21 U.S.C. § 321(f)) or applied to a material or article for the purpose of treating food.
  • Indirect Food Use: a use is generally considered to be an indirect food use if the use involves application of the antimicrobial pesticide in or on a material or article that comes into contact with food and may result in residues in or on food, but the use is not intended for pesticidal treatment of food.
  • Nonfood Use: a use is generally considered to be a nonfood use when there is a reasonable certainty of no residues in or on food, for example because the antimicrobial pesticide is not expected to come into contact (directly or indirectly) with food as a result of its intended use.

In addition to the Site Index proposed guidance, the settlement agreement provides that EPA shall propose an interim guidance document and then a “correction to the Final Rule” regarding the 200 ppb level for antimicrobial residues in or on a food item, as established at 40 C.F.R. § 158.2230(d). Under the Final Rule, additional toxicology tests are required for indirect food uses with antimicrobial residue levels greater than 200 ppb. Within 60 days, EPA must issue an interim guidance document “explaining EPA’s interpretation of the 200 ppb level established in the Final Rule.” Within two and a half years, EPA must propose a “correction” to make “clear that the 200 ppb level established in the Final Rule is based on total estimated daily dietary intake, and is not based on the amount of residue present on only a single commodity.”