Consent Agreement Reached in Ultium Cells and General Motors TSCA Enforcement Action

The U.S. EPA Environmental Appeals Board ratified a consent agreement for EPA’s TSCA enforcement action against Ultium Cells and General Motors Company on November 20, 2023. In February 2023, Ultium Cells and General Motors Company (collectively referred to as Respondents), voluntarily disclosed potential TSCA violations to the Agency under EPA’s Incentives for Self-Policing: Discover, Disclosure, Correction and Prevention of Violations (Audit Policy).  In their disclosure, the companies reported that they may have imported three substances that were not listed on the TSCA Inventory.

The consent agreement identifies the following TSCA violations:

  • Section 5(a)(1). Failure to submit a PMN at least 90 days before manufacturing (importing) new chemical substances for non-exempt commercial purposes.
  • Section 13(a)(1)(B). Failure to submit proper [import] certifications under section 13 of TSCA prior to importing new chemical substances.
  • Section 15(2). Processing and use of new chemical substances that Respondents knew or had reason to know were manufactured, imported, processed, or distributed in commerce in violation of TSCA Section 5.

Following their disclosure, in March 2023, Respondents filed premanufactures notices (PMNs) on the three substances at issue.

EPA assessed civil penalties of more than $650,000.  The companies received Audit Policy credit for the PMN and Import Certification violations, and a substantial portion of the 15(2) counts.  However, penalties were assessed for continued processing and use of the chemical substances during the time after the companies submitted PMNs for the substances, but before the PMNs cleared EPA review.

Under the terms of the consent agreement, the companies were allowed to import, process, use, and distribute the chemical substances at issue while EPA finalizes a TSCA section 5(e) Consent Order for the substances under the condition that they follow the requirements of the Compliance Plan specified by the agreement.  Requirements of the Compliance Plan include no release to water and respiratory protection with an APF of at least 1000.

Irene Hantman Presents on EPA’s Audit Policy and TSCA Audits at PSX 2023

Verdant Law is pleased to report that Irene Hantman gave a presentation on EPA’s Audit Policy and Toxic Substances Control Act (TSCA) audits on October 18 in Boston at PSX 2023.  PSX is the Product Stewardship Society’s annual conference, and its website can be found here.  Ms. Hantman serves on the Conference Planning Committee for PSX and looks forward to next year’s conference in Denver.

The presentation covered the incentives for the self-disclosure of violations provided by EPA’s audit policy, the conditions that must be met to qualify for audit policy penalty mitigation, and the benefits and risks of TSCA audits.  Ms. Hantman discussed important considerations for companies conducting audits, such as compliance with the 21-day self-disclosure deadline and understanding the 5-year statute of limitations that applies to most TSCA violations.  Ms. Hantman also highlighted the role of negotiations with EPA during an audit, for example, to avoid triggering penalties for repeat violations.

Particular attention was given to the New Owner Audit Policy, which allows new owners to get a clean baseline following the purchase of a facility.  Ms. Hantman covered the additional benefits to new owners of conducting TSCA audits, which include the opportunity to seek indemnification from the seller for breach of reps and warranties, the opportunity to submit an insurance claim if the new owner purchased deal insurance, and further reduced economic penalties under the New Owner Audit Policy.

Also presenting was Ashish P. Deshmukh, PhD, Principal at Ramboll, who spoke about the particulars of audit processes and how product stewards can prepare for TSCA audits.  The presentation was moderated by Robert DeMott, PhD, Principal Toxicologist at Ramboll.

If you have questions about the topics of the presentation, please contact Ms. Hantman.

TSCA Enforcement Action Taken Over Failure to Comply with PFAS SNUR

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’s First PFAS Clean Water Act Enforcement

On April 26, 2023, EPA announced that the Agency has taken the first federal Clean Water Act enforcement action for PFAS discharges.  The Agency ordered Chemours Company to follow corrective measures relating to exceedances of the limits set for per and polyfluoroalkyl substances (PFAS) in stormwater and wastewater discharges from the Washington Works facility in Parkersburg, WV.  The PFAS limits were set by in the company’s National Pollution Discharge Elimination System (NPDES) permits.

EPA issued an administrative order on consent (AOC) for the facility for exceeding permit limits on PFOA and HFPO Dimer Acid on more than 20 dates from September 2018 to March 2023.  The exceedances were documented in the discharge monitoring reports submitted by the company to the West Virginia Department of Environmental Protection – a permit requirement.  EPA also stated that Chemours was in violation of requirements for properly operating and maintaining all facilities and systems for permit compliance.  The AOC requires that Chemours take the following actions:

1) Implement a sampling plan to analyze PFAS and conduct analysis on the presence of PFAS in the stormwater and wastewater discharges.  The plan must be submitted to EPA for approval.

2) Submit and implement a PFAS treatment plan or minimizing plan to EPA for compliance with the permit limits.

3) Submit its existing Standard Operating Procedures for their management of wastewater for various systems and their revised Storm Water Pollution Prevention Plan.

In its press release, EPA noted that “Administrator Regan has directed EPA staff to use every enforcement tool at our disposal to compel manufacturers of PFAS to characterize, control, and clean up ongoing and past PFAS contamination,”

The AOC can be accessed here.

Community Sues EPA Over Terms for Production of Petrochemical Fuel

Cherokee Concerned Citizens, on behalf of the Cherokee Forest neighborhood  a fenceline community in Pascagoula, Mississippi, has filed a petition in the U.S. Court of Appeals for the District of Columbia Circuit for review of a TSCA section 5(e) consent order. The consent order covers 18 chemicals that were the subject of premanufacture notifications submitted by Chevron in 2021. In its press release announcing the litigation, Earthjustice asserted that the production of these chemicals would result in air pollution that would pose a 1 in 4 cancer risk (25 % of the residents living nearby could develop cancer over their lifetime), 250,000 times greater than what the Agency typically considers unreasonable.

TSCA requires EPA to regulate the manufacturing, processing, and distribution of substances that present an unreasonable risk of injury to health or the environment without consideration of costs or other non-risk factors. The Statute states that the Administrator shall issue consent orders and significant new use rules “to the extent necessary to protect against such risk.”

EPA identified skin and eye irritation; acute toxicity; systemic toxicity (neurotoxicity, body weight effects, and liver, kidney, blood, spleen, and other organ effects); reproductive and developmental toxicity; oral and inhalation portal of entry effects; genetic toxicity; and carcinogenicity as hazards of these New Chemical Substances. These hazards were identified based on the substance’s estimated physical/chemical properties by comparing them to compositionally analogous mixtures for which there is information on human health hazard, using available human hazard information on representative constituents of these New Chemical Substances, and other structural information. As is often the case with PMNs, there were no experimentally derived hazard data for these New Chemical Substances.  For a number of the substances, risks were identified for the general population (infants) for systemic and/or oral portal-of-entry effects via drinking water. Risks to adults for this exposure route were also identified. In addition, risks were identified for the general population for systemic and/or inhalation portal-of-entry effects via fugitive air inhalation for some of the substances at issue.

The consent order imposes worker protection and limitations on the distribution of the new chemical substances. It does not restrict air emissions or wastewater discharges of the substances. The Chevron facility called out by Earthjustice is permitted under the Clean Air and the Clean Water Acts.

EPA Improves ChemView

EPA uses ChemView as a means for the public to access information about chemicals under the Toxic Substances Control Act (TSCA).  The web application allows searches for information such as volumes reported to the Chemical Data Reporting Rule, Premanufacture Notification determinations, section 5(e) consent orders, health and safety studies submitted under section 8(d) and section 8(e) substantial risk reports.  Only non-confidential business information is accessible.  EPA announced they have also been working to improve ChemView to reduce the delay between when the Agency receives information and when it publishes that information – EPA is trying to achieve near real-time publication.  The Agency is also working to enhance transparency in its processes for evaluating potential risks posed by different chemicals.

EPA is required to publish certain information under TSCA section 5(d), such as the list of new chemical submissions received, microbial commercial activity notices, premanufacture notices, and significant new-use notices. Throughout 2022, EPA used ChemView to make available more than 25,000 new chemical notice records that EPA has received under TSCA section 5.  The 25,000 new chemical notice records include previously unpublished records from 2014 through 2019. EPA plans to continue publishing previously unpublished records into the future and is currently publishing new records within five days of receiving them.

As noted above, EPA also uses ChemView to publish records received under TSCA section 8, including substantial risk reports.  Throughout 2022, EPA published 3,900 substantial risk reports, including over 3,300 reports received from the beginning of 2019 through the end of 2021; all of which were previously unpublished.

EPA Receipt of Pesticide Petitions Files for Residues

Late last year, EPA published receipt of initial pesticide petitions filed regarding residues of pesticide chemicals in or on various commodities by representatives of RRStewart Consulting, LLC, Delta Analytical Corporation on behalf of Borchers Americas, Inc., Crop Enhancement, Columbia River Carbonates, BASF Corporation, American Spice Trade Association, and Interregional Research Project Number 4.  EPA intends to review the data from the petitions filed under the Federal Food, Drug, and Cosmetic Act (FFDCA) to determine whether such actions are warranted.  As specified by FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), EPA is required to publish notices regarding petitions received so that the public has an opportunity to comment on requests for the establishment or modification of regulations for residues of pesticides in or on food commodities.  The comment period for these particular petitions has closed.

The petitions include five different requests for tolerance exemptions for various chemicals. All of the exemptions requests were made under 40 CFR §180, which details the requirements for food tolerances and exemptions for pesticide chemicals in food.

RRStewart Consulting, LLC, on behalf of Aicello America Corporation, requested a tolerance exemption for residues of diglycerol.  This request is for use of the chemical as a plasticizer inert ingredient in pesticide formulations used on crops.

Delta Analytical Corporation on behalf of Borchers Americas, Inc., requested that EPA establish an exemption for .alpha.-D-Glucopyranoside, .beta.-D-fructofuranosyl, polymer with 2-methyloxirane and oxirane.  The exemption would be for use of the chemical as a pesticide inert ingredient in various pesticide formulations. The petition also requested that EPA treat the chemical as an inert ingredient in a pesticide chemical formulation for which tolerance requirements are exempted under FFDCA section 408 if the chemical use follows good agricultural or manufacturing practices.

Crop Enhancement requested a tolerance exemption for residues of the insecticide/miticide linseed oil for when use in or on all raw agricultural commodities.

Columbia River Carbonates requested a tolerance exemption for residues of the biochemical active ingredient calcium carbonate for use in or on all agricultural food commodities.

BASF Corporation, Agricultural Products requested a tolerance exemption for residues of the herbicide imazapic for use in or on rice grains at 0.05 parts per million (ppm) and in or on rice bran at 0.2 ppm.  The company also requested a tolerance exemption for the herbicide imazapyr for use in or on rice grains at 0.06 ppm and in or on rice bran at 0.2 ppm.

American Spice Trade Association requested a tolerance exemption for residues of the pesticide cypermethrin in or on raw agricultural spice commodities.  American Spice Trade Association specifically named dozens of different types of spices in its request, including anise pepper, ashwagandha fruit, batavia-cassia fruit, belleric myrobalan, and caper buds.

Interregional Research Project Number 4 requested a tolerance exemption for residues of the fungicide cyprodinil 4-cyclopropyl-6-methyl-N-phenyl-2-pyrimidinamine in or on cranberries at 0.4 ppm.

 

Vinyl Institute Seeks Judicial Review of EPA Test Order

Congress granted EPA new test order authority through the 2016 Lautenberg Amendments to the Toxic Substances Control Act (TSCA).  In May 2022, EPA received its first legal challenge to this new authority from the Vinyl Institute.  The Vinyl Institute is a coalition of seven companies which manufacture a solvent, 1,1,2-trichloroethane, that EPA listed as a priority chemical in December 2019 and that is currently undergoing risk evaluation.  The Vinyl Institute is seeking judicial review of a test order for 1,1,2-trichloroethane, for an avian reproduction test.  Specifically, the petition to the DC Circuit Court argues that EPA has not adequately explained the need for the data.  1,1,2-trichloroethane is used as a solvent and an intermediate in the production of 1,1-dichloroethane.  During the risk prioritization process, the Agency determined that it had insufficient data on the substance to understand if it has the potential to harm wildlife and issued the test order.

The Vinyl Institute stated in their petition that the Test Rule is arbitrary, capricious, and an abuse of discretion.  It alleges that EPA failed to:

  • Adequately explain why the avian reproduction test is necessary,
  • Consider all available information and data for the substance,
  • Cite reliable and representative information and data in support of the Test Order,
  • Adequately justify the need for the test without first requiring screening level testing, and
  • Consider the relative costs of the Test protocols, along with availability of facilities and personnel to perform the testing.

As of this date, the parties have filed motions regarding whether additional submission may be made to the record.

EPA Evaluation of PFAS Leaching in Fluorinated Containers

On September 8, 2022, EPA announced findings of the Agency’s evaluation of PFAS leaching in fluorinated containers.  Specifically, the evaluation assessed the extent to which PFAS that are present in the packaging leach into the contents of the containers.  The study tested the leaching potential of PFAS over a 20-week test period into water, methanol and similar solutions that were packaged in different brands of HDPE fluorinated containers.  EPA undertook this evaluation after learning of PFAS contamination in some mosquitocide products, and after conducting a study of other pesticides stored in fluorinated high-density polyethylene containers.   In both cases the Agency found varying levels of PFAS in the contents of the containers.

The announcement reported that EPA has determined that any liquid products packaged in HDPE containers that have been treated with fluorination technology could be contaminated with PFAS, including water-based products.  The Agency also reported that the amount of PFAS that leach into the products could increase over time.   EPA noted that the Agency does not know if all fluorinated containers will leach PFAS because the Agency’s analysis did not test all the different fluorination technologies.

The announcement included a reminder that pesticide registrants must notify the Agency if they discover PFAS in any of their products.  Under FIFRA §6(a)(2) and 40 CFR §159.179, “additional factual information on unreasonable adverse effects, including metabolites, degradates and impurities (such as PFAS)” must be reported to EPA within 30 days after the registrant “first possesses or knows of the information.”  Note that the Agency considers any level of PFAS to be potentially toxicologically significant and therefore reportable.

The announcement also noted that in many cases, the manufacture of PFAS from the fluorination of polyolefins is subject to the Agency’s significant new use rule  for long-chain perfluoroalkyl carboxylates (LCPFACs) under the Toxic Substances Control Act (TSCA).  Companies must notify EPA at least 90 days before starting manufacturing or processing of these chemical substances for this significant new use.  TSCA requires significant new use notification in these situations to allow EPA review any associated risks and impose any needed protections.

Implementing Statutory Addition of Certain PFAS Substances to the Toxics Release Inventory Reporting

In July 2022, EPA released a final rule adding five PFAS to the list of chemicals required to be reported to the Toxics Release Inventory (TRI) under the Emergency Planning and Community Right-to-Know Act (EPCRA) and the Pollution Prevention Act (PPA). TRI tracks the management of certain toxic chemicals that may pose a threat to human health or the environment and provides this information to the public. Pursuant to the National Defense Authorization Act (NDAA), EPA is required to automatically add PFAS to the TRI whenever it takes one of the following actions:

  • EPA finalizes a toxicity value for a PFAS or class of PFAS;
  • EPA determines that a PFAS or a class of PFAS is covered by a TSCA Significant New Use Rule (SNUR);
  • EPA adds PFAS or a class of PFAS to an existing SNUR; or
  • EPA finds that a PFAS or class of PFAS is active in commerce (under TSCA Section 8).

Under this rule, facilities in specific industry sectors that manufacture, process, distribute, or use any of the five PFAS added to the TRI, must submit a TRI report if they exceed the PFAS reporting threshold of 100 pounds. Four of the substances are added to the list effective January 1, 2022, and the remaining substance is effective January 1, 2021, meaning TRI reporting due in 2023 must account for these substances.