Spray Foam Producer Challenges California’s Compelled Research Funding

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A producer of spray polyurethane foam is mounting a constitutional challenge to a California Department of Toxic Substances Control (DTSC) action requiring the company to fund research into replacement technology.

At issue is a DTSC determination requiring producers of spray foam to pay two cents for every pound sold in California into a fund supporting a green research grant. According to the plaintiff, Quadrant Performance Materials, the grant may be used either to develop spray foam containing less unreacted methylene diphenyl diisocyanates (MDI) or to reengineer the tools used to apply spray foam to reduce MDI exposures.

In a complaint filed September 21, 2026, Quadrant says it cannot conduct its own research with the grant money, is ineligible to receive a grant, has no say in what or how the recipient conducts its research, and has no right to use or profit from any resulting innovation.

“DTSC has left Quadrant with a Hobson’s choice: fund research aimed at replacing its own product—using methods and assumptions it has no control over, and that could put it out of business—or stop selling spray foam in California,” the complaint states.

Quadrant alleges that the requirement violates the First Amendment because it compels the company to subsidize speech and research with which it disagrees. It also alleges violations of the dormant Commerce Clause and Import-Export Clause, contending that the requirement unlawfully burdens interstate commerce and imposes a duty on goods brought into California from other states.

Regulatory Background

The lawsuit arises under California’s Safer Consumer Products Program (SCP), which allows DTSC to regulate “priority products” containing “candidate chemicals.”

MDI is one such candidate chemical. In 2014, DTSC identified spray foam products containing MDI as a priority product based on concerns that unreacted MDI in spray foam might cause workplace asthma. Quadrant, however, states that “DTSC has never identified a single person” harmed by spray foam products in the state.

According to the complaint, Quadrant submitted an abridged alternatives analysis to DTSC in 2025 that did not identify any feasible alternatives. In May 2026, DTSC issued a final determination imposing requirements on the continued sale of spray foam containing MDI in California. In addition to the green research fund fees, those requirements include labeling and training provisions that Quadrant does not challenge in the lawsuit.

The two-cent-per-pound fee is required from all spray foam producers for five years or until DTSC collectively receives $4 million, whichever occurs later. Based on its sales, Quadrant expects to pay approximately $10,000 into the fund each quarter.

Constitutional Claims

Quadrant seeks declaratory and injunctive relief based on three constitutional claims.

First, Quadrant argues that the fee violates the First Amendment because it forces the company to subsidize speech to which it objects. Quadrant contends that the research funded by the fees is not “neutral, disinterested science” because DTSC “has predetermined its premises and its objective.”

“DTSC, without substantiation, asserts that Quadrant’s product is harmful; the research being funded is attempting to find a replacement for MDI which Quadrant maintains does not exist or is not feasible; and California requires that this research uses green chemistry and/or green engineering principles,” the complaint states.

Quadrant further argues that the fee does not fall within exceptions for compelled funding of government speech or comprehensive regulatory schemes. Among other things, it points to the fact that the research fund is administered by a third party rather than DTSC.

Second, Quadrant argues that the requirement violates the dormant Commerce Clause by placing an excessive burden on interstate commerce. Citing Pike v. Bruce Church, Inc., Quadrant asserts that the scheme’s burdens on interstate commerce exceed its putative local benefits. Quadrant and “virtually all” other spray foam manufacturers operate outside California, the complaint states, meaning the requirement’s practical effects fall “almost entirely on interstate commerce.”

By contrast, the lawsuit alleges that the requirement’s asserted benefits are speculative because there is no guarantee that any funded project will succeed, become commercially viable, or ultimately be made available to manufacturers. “California has therefore imposed present burdens on interstate commerce in exchange for uncertain future benefits that will likely never materialize,” Quadrant states.

Third, Quadrant alleges that the scheme violates the Import-Export Clause because it imposes duties on goods imported from other states without congressional consent. The complaint acknowledges that the Supreme Court has held that the clause applies only to imports from foreign countries, but argues that it should be interpreted more broadly.

The case is Quadrant Performance Materials, LLC v. Butler, No. 2:26-cv-10704 (C.D. Cal.), filed September 21, 2026.

NAW Appeals Oregon Packaging EPR Decision to Ninth Circuit

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The National Association of Wholesaler-Distributors (NAW) has appealed the first-ever merits ruling on extended producer responsibility (EPR) program for packaging, the trade association announced on September 24, 2026.

The appeal, before the Ninth Circuit, challenges the District of Oregon’s decision upholding Oregon’s Plastic Pollution and Recycling Modernization Act. The outcome could have major ramifications for packaging EPR programs enacted by other states.

The appeal will focus on the dormant Commerce Clause and Due Process Clause claims NAW raised before the district court. In a 71-page ruling issued August 27, 2026, the court rejected those claims and upheld Oregon’s EPR program. The court’s analysis is discussed in detail in a previous post.

In the press release, NAW argues that the program imposes fees on wholesaler-distributors who do not control the packaging or final destination of their products. NAW also contends that Oregon regulators “anticipated producers would recover program costs from customers in other states, and cited that as a way to reduce price impacts on Oregonians.”

NAW further alleges that the producer responsibility organization (PRO) charged with implementing the program has “its own business interests,” calculated fees using a confidential methodology, and collected millions of dollars in excess funds.

“The Ninth Circuit reviews questions of law without deference to the district court,” NAW adds.

Before issuing its final decision, the district court granted a preliminary injunction enjoining enforcement of the scheme against NAW’s members and conducted a five-day bench trial.

The appeal is National Association of Wholesaler-Distributors v. Feldon, No. 26-6404 (9th Cir.), docketed September 30, 2026. The originating case is No. 3:25-cv-1334 (D. Or.). NAW’s opening brief is due December 17, 2026, and Oregon’s response is due January 18, 2027.

Fifth Circuit Vacates EPA’s Methylene Chloride Risk Management Rule

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In a groundbreaking decision with significant implications for the regulation of existing chemicals under the Toxic Substances Control Act (TSCA), the Fifth Circuit vacated EPA’s risk management rule for the solvent methylene chloride (“MC”) on September 15, 2026.

“At every juncture of its scientific analysis, EPA has gone with the most extreme position,” the decision states. “EPA cannot justify the MC Rule in light of the TSCA’s requirements, the more demanding substantial-evidence standard that the TSCA requires, and the arbitrary and capricious standard.”

The ruling rejects policy positions developed under the Biden administration that were not defended by the Trump EPA. These include “whole chemical” risk determinations and the assumption that workers do not wear personal protective equipment (PPE)—policies EPA proposed to reverse in September 2025.

The ruling also addresses the meaning of “unreasonable risk,” the threshold for regulation under TSCA, by emphasizing that TSCA is not a zero-risk statute.

In addition to siding with industry-aligned petitioners, including the American Chemistry Council, the decision rejects a challenge from the Sierra Club that the MC rule is insufficiently protective.

The decision may implicate numerous previously conducted risk evaluations, which are already mired by delays. It also calls into question elements of EPA’s other risk management rules, including rules for carbon tetrachloride, perchloroethylene, and trichloroethylene, which are currently being litigated. EPA is reconsidering at least part of all three rules.

Finalized in 2024, the MC rule prohibits MC’s distribution for consumer use and most commercial uses. Uses not banned are subject to stringent workplace exposure limits. As discussed in a previous post, the Fifth Circuit appeared skeptical of EPA’s justifications for these restrictions during oral argument in June 2025.

“Whole Chemical” Approach and Assumption Workers do not Wear PPE

EPA completed its initial risk evaluation for MC in 2020 under the first Trump administration. The Biden EPA issued a revised risk evaluation in 2022. The revised evaluation replaced the initial evaluation’s condition-of-use-specific risk determinations with a determination that MC presents unreasonable risk “as a whole chemical substance.” Unlike the initial evaluation, the revision also assumed that exposed workers do not wear PPE. The panel held that both policy reversals were unlawful.

The court first examined the “whole chemical” approach. Emphasizing TSCA’s repeated use of the phrase “conditions of use” when describing how risk evaluations must be conducted, the court held that a whole-chemical determination exceeds EPA’s authority under the statute.

“There is no getting around the conclusion that the TSCA focuses on both determining and regulating risk according to the actual, separate ‘conditions of use’ for a given chemical or substance,” the decision states.

The court also found that EPA erred when issuing whole-chemical determinations under the Trump EPA’s regulations for risk evaluations, which the court held expressly require use-by-use determinations. Those regulations were replaced by the Biden EPA in 2024.

Turning to PPE, the court held that PPE use is encompassed by the definition of “conditions of use.” EPA justified its reversal on assumed usage by arguing that some workplaces may not be covered by OSHA standards or comply with OSHA requirements. But the court found that this position was undermined by the initial MC risk evaluation. There, EPA found some evidence of PPE use and concluded that PPE use was reasonably foreseeable because EPA had no basis to assume noncompliance with OSHA requirements.

The court also pointed to statements in EPA’s revised risk evaluation indicating that the policy change was not an indication of widespread OSHA noncompliance and that MC is subject to numerous regulations. Combined with EPA’s decision not to alter the exposure assessments in the revised risk evaluation, the court found that EPA’s explanations “are remarkably self-contradictory.”

EPA’s reversal was therefore contrary to law, arbitrary and capricious, and lacked substantial evidence, the court concluded.

The Fifth Circuit’s ruling aligns with changes EPA proposed in 2025. EPA’s proposed rule would require use-by-use risk determinations and eliminate language prohibiting the assumption of PPE use.

“Unreasonable Risk” and Exposure Limits

The industry petitioners’ central argument is that EPA treated any MC risk as unreasonable and regulated beyond what was required to remove unreasonable risk. The panel agreed, concluding that “EPA’s approach to ‘unreasonable risk’ was far more conservative than the statutory term connotes.”

TSCA is not a zero-risk statute, the court held, emphasizing that the word “unreasonable” “must allow for some risk.” Moreover, unlike other environmental statutes, TSCA does not incorporate a precautionary principle, the court noted.

The court also rejected EPA’s argument that unreasonable risk is a factual finding deserving judicial deference, describing it instead as a “legal conclusion” drawn from scientific findings.

The court then turned to the MC rule’s exposure limits, including a 16 ppm limit for acute exposures and a 2 ppm limit for chronic exposures. These limits “lack epidemiological support, reflect selective use of data and failures to consider alternative acceptable data, and were based on unrealistic benchmark margins of error,” the decision states.

“In sum, the risk analysis did not accord with the best available science as the TSCA requires, and the results more closely approximate the precautionary principle than the statute’s ‘unreasonable risk’ standard,” the court held.

According to the court, EPA calculated the acute exposure limit by taking a human study finding peripheral vision impairment at 478 ppm and dividing by thirty, in part to account for variability among humans. But EPA’s exclusive reliance on the study was problematic, the court held, because EPA did not show that another human study with less concerning results should be disregarded entirely. The court also noted the gap between the 16 ppm limit and the 2,300 ppm concentration EPA rated as “immediately dangerous,” as well as OSHA’s 125 ppm standard.

The court’s analysis of the 2 ppm chronic exposure limit was similar. EPA exclusively relied on a single imperfect animal study, improperly excluded results from human studies, and reached a chronic exposure limit less than one-tenth of OSHA’s, the court held.

Regulatory Response and Alternatives

Even if the exposure limits had been correctly derived, the court concluded that the rule would still regulate more than necessary to remove the unreasonable risk.

First, the panel rejected EPA’s decision to prohibit MC uses when it was unsure whether industrial and commercial users would be able to satisfy “dramatically reduced” limits. “EPA cannot simply ban a chemical substance whenever it is ‘uncertain’ whether a risk will remain reasonable,” the decision states.

Second, the court concluded that the rule did not meet TSCA’s command that EPA consider the availability of alternatives. The court held that EPA did not seriously consider numerous comments explaining the unavailability of alternatives. In addition, EPA repeatedly failed to consider economic, productivity, and environmental losses associated with the adoption of alternatives, the court held.

Excluding Exposures

A final key holding arose from the Sierra Club’s challenge. Among other arguments, the environmental group contends that EPA did not adequately consider air and drinking-water exposures. Those exposures were excluded from the scope of EPA’s risk evaluation, although EPA considered them in a subsequent, truncated analysis.

The panel was not persuaded, pointing to uncertainties EPA identified in the supplemental analysis. “We cannot say that EPA is prohibited from excluding exposure pathways and exposure types that it does not have a methodology to accurately assess,” the decision states. “A fair reading of the TSCA leaves ample latitude for EPA to exclude certain exposure pathways when the science or methodology is not developed.”

The Ninth Circuit has held that TSCA’s directive requiring EPA to publish risk evaluation scoping documents based on the conditions of use it “expects to consider” does not authorize EPA to exclude conditions of use. But the Fifth Circuit found that precedent inapposite because that case concerned EPA’s regulations governing the conduct of risk evaluations rather than a specific risk evaluation.

In a footnote, the court added that it did not necessarily agree with the Ninth Circuit’s reasoning, pointing to a separate provision of TSCA that might provide EPA with discretion.

That issue, too, is the subject of EPA’s proposed regulatory changes. EPA’s proposed revisions to the risk evaluation framework regulations would grant EPA discretion to exclude conditions of use and exposure pathways from risk evaluations.

The case is East Fork Enterprises v. Zeldin, No. 24-60227 (5th Cir.), filed May 10, 2024. Unless expedited, the court will issue its mandate November 7, 2026.

Federal Court Blocks New Mexico PFAS Labeling Rule

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A federal judge has issued a preliminary injunction against New Mexico’s far-reaching PFAS labeling requirements for consumer products, finding that the trade associations challenging the rules are likely to prevail on their First Amendment claim. The court’s order turns on its determination that the labeling mandate is not a “reasonable fit” for the state’s asserted interests.

Issued September 16, 2026, the injunction bars enforcement of the labeling mandate in its entirety while the litigation proceeds—less than four months before the requirements were set to take effect.

Regulatory and Legal Background

New Mexico promulgated the PFAS labeling mandate in May 2026. If allowed to take effect, the rules would require all consumer products manufactured for sale or distribution in the state that contain intentionally added PFAS to bear a PFAS label after January 1, 2027. The required label consists of the term “PFAS” within an Erlenmeyer flask pictogram. Only used products and certain products subject to federal regulation, like pesticides and drugs, are exempt.

In July, the plaintiffs—which include the American Chemistry Council, Alliance for Automotive Innovation, American Coatings Association, National Association of Manufacturers, and several other industry groups—filed suit in the District of New Mexico. Their arguments revolve around which type of First Amendment scrutiny should apply to the labeling mandate.

While government-compelled speech is generally subject to heightened scrutiny, a lesser form of scrutiny applies to certain types of compelled commercial disclosures under Zauderer v. Office of Disciplinary Counsel. As discussed in a previous post, the plaintiffs argue that Zauderer does not apply and that the labeling mandate should therefore be subject to heightened scrutiny.

The Preliminary Injunction

Analyzing the label under Zauderer, the court first found that the required disclosure was likely to be purely factual and uncontroversial. However, the court then preliminarily determined that there was no reasonable connection between the labeling requirement and New Mexico’s asserted interests, making Zauderer inapplicable.

New Mexico asserted interests in protecting consumer health and safety, protecting the environment, and providing relevant information about the manufacturing process to consumers. In response to the plaintiffs’ argument that the label is not purely factual because it misleadingly communicates hazard, New Mexico stressed that the label is not a warning. Instead, the state argued, the label merely promotes consumer awareness of PFAS.

This proved to be the state’s undoing. “In characterizing the required label as a ‘consumer awareness label,’ and not a ‘warning label,’ Defendants destroy the connection between the purpose of the required disclosure – to promote consumer and environmental health – and the means employed to realize that purpose, which in other instances is achieved with a warning,” the order states.

“A label that conveys no information cannot, be ‘inextricably intertwined’ with the goal of reducing the health and environmental impact of PFAS for the label does not provide any advice or information about PFAS,” the order continues.

In the court’s view, New Mexico’s characterization of the label makes its goal more akin to addressing “consumer curiosity.” The court noted that other courts have found consumer curiosity to be an insufficient basis for compelled labeling.

The court also observed that New Mexico appears to want the label to operate as a warning, pointing to statements in the state’s expert declarations and on its website characterizing the label as a warning. “However, the Regulation cannot simultaneously, as Schrödinger would have it, be merely a consumer awareness label and not a warning label, and if it is a consumer awareness label it serves to promote consumer curiosity about the contents of various products,” the order states.

Because the court found no reasonable fit between the disclosure requirement and the state’s asserted interests, it concluded that the mandate could not survive heightened scrutiny either.

The case is Am. Chemistry Council v. Kenney, No. 1:26-cv-2130 (D.N.M.), filed July 1, 2026.

Oregon Packaging EPR Program Survives Constitutional Challenge

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In a lengthy ruling with significant implications for similar schemes across the country, a federal judge has upheld Oregon’s extended producer responsibility (EPR) program for packaging, printing, and food serviceware, holding that it does not violate the U.S. Constitution’s dormant Commerce Clause or Due Process Clause.

Oregon is one of seven states to have enacted a packaging EPR program, which require manufacturers to pay volume- and material type-based fees to cover the costs of managing packaging waste. Litigation challenging California’s and Colorado’s programs is also ongoing. Those cases involve the same plaintiff, the National Association of Wholesaler-Distributors (NAW), as well as other plaintiffs.

Prior to issuing its August 27, 2026, decision, the court granted a preliminary injunction enjoining enforcement against NAW’s members and conducted a five-day bench trial. NAW has issued a statement saying that the trade association is “consider[ing] its next steps.”

Dormant Commerce Clause

NAW advanced three theories under the dormant Commerce Clause, arguing that that Oregon’s Recycling Modernization Act (RMA) (1) discriminates against interstate commerce, (2) imposes an unreasonable “user fee,” and (3) places an undue burden on interstate commerce.

Discrimination. Finding insufficient evidence of purposeful discrimination, the court considered whether the RMA is facially discriminatory. NAW argued that the scheme grants preferential “small producer” status to certain in-state governmental entities like the University of Oregon but not to similar out-of-state institutions. As a result, NAW alleged, obligated producers must pay more than their fair share of the program’s costs.

The court rejected this “free riding” argument for several reasons. Among them, the court found that NAW’s alleged injury would be the same regardless of which entity received the exemption. The court also held that in-state public entities “are not ‘similarly situated’ to out-of-state public entities, which do not support Oregon’s infrastructure.”

NAW separately argued that other small-producer criteria discriminate in effect. For example, an interstate business with global revenues above $5 million—but Oregon revenues below $5 million—would not qualify as a small producer, whereas a company solely doing business in Oregon with revenues under that threshold would. However, even if costs are borne primarily by out-of-state consumers, that does not make a scheme discriminatory in effect, the court held.

Unreasonable user fee. NAW’s “free rider” theory was also central to its unreasonable fees claim. The court, however, found the evidentiary record insufficient to establish that the exemptions resulted in an unreasonable fee. Because “no one” “has attempted to quantify the effects of any exemptions,” the court cannot determine whether these exemptions apply “with significant frequency,” the decision states.

A separate line of attack focused on the fees collected by the Circular Action Alliance (CAA), the nonprofit producer responsibility organization (PRO) that is implementing the program. While CAA collected $90 million more than it spent in 2025, the court held that is not “clearly excessive” because the excess was due to uncertainties and may reduce future fees.

Undue burden. NAW argued that the court should employ the balancing test established in Pike v. Bruce Church, Inc., which assesses whether a law’s burdens on interstate commerce are “clearly excessive in relation to [its] putative local benefits.” However, the court found the test inapplicable, noting that it is generally not applied unless a statute is discriminatory or is shown to impose a substantial or significant burden on interstate commerce. Anecdotal evidence that NAW’s members will face substantial costs is not enough, the court held, emphasizing that Pike protects the market as a whole—and not specific interstate firms—from burdensome regulations.

In any event, the court concluded that the RMA would survive Pike balancing even if the test applied. Oregon, the court found, “has a great and longstanding interest in protecting its citizens from the externalities created by waste and products at the end of their life, including plastics and other hard-to-recycle materials.”

Due Process Clause

NAW’s due process claims focused primarily on CAA’s role in administering the regulatory scheme. Although the RMA permits multiple PROs, CAA is currently the only PRO approved to implement the program.

Assuming without deciding that the RMA implicates a property interest protected by the Due Process Clause, the court first addressed NAW’s argument that the statute improperly delegates regulatory authority to CAA, including the power to regulate competitors.

That argument stems from allegations that CAA is controlled by certain large manufacturers who influence producer fees. But “because the RMA does not obligate NAW’s members to join CAA, CAA’s self-interestedness, [Oregon’s] review of CAA’s fee-setting methodology, and CAA’s contracts are not relevant to NAW’s due process challenge,” the decision states.

The court emphasized that producers are free to form their own PRO, even if doing so presents “practical difficulties.” Producers may also take advantage of the RMA’s “private recycling rule,” which exempts products recycled outside the comingled recycling stream and therefore provides an alternative to joining a PRO. Even with respect to CAA, the court found that Oregon retained sufficient decision-making authority because the state ultimately approved CAA’s fee-setting methodology.

The court also rejected arguments that the RMA fails to provide procedural safeguards against unlawful assessments and exactions of membership fees, holding that NAW’s members voluntarily relinquished their rights by joining CAA. The court further concluded that the RMA provides sufficient safeguards, noting in part that evidence presented at trial showed that CAA, Oregon, and individual producers “have been able successfully to resolve fee disputes informally.”

The case is National Association of Wholesaler-Distributors v. Feldon, No. 3:25-cv-1334 (D. Or.), filed July 30, 2025.

Ninth Circuit Upholds EPA’s 2024 New Chemicals Rule

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Less than two weeks after oral argument, a Ninth Circuit panel has denied consolidated challenges to EPA’s 2024 rule governing reviews of new chemicals under the Toxic Substances Control Act (TSCA).  The ruling upholds EPA’s case-by-case evaluations of persistent, bioaccumulative, and toxic substances (PBTs) for streamlined new-chemical reviews.  It also upholds the Agency’s decision not to address a comment from workers’ unions advocating greater transparency around the substances to which workers are exposed.

The 2024 New Chemicals Rule

On December 18, 2024, EPA published a rule revising its new chemical review regulations for the first time since Congress substantively amended TSCA in 2016.  Some revisions were designed to align the regulatory text with the 2016 amendments, while others addressed EPA’s procedures for reviewing new chemical applications.

At issue in the case, the rule narrowed eligibility for the Low Volume Exemption (LVE) and Low Releases and Low Exposures (LoREX) exemption.  These exemptions are streamlined alternatives to the lengthy premanufacture notice (PMN) process typically required before a TSCA-regulated substance may be introduced into commerce.  Under 40 CFR § 723.50(d)(2), PFAS are categorically ineligible for both exemptions, and PBTs are ineligible if they have “anticipated environmental releases and potentially unreasonable exposures to humans or environmental organisms.”

In the rule, EPA characterized the eligibility restrictions for PBTs as consistent with existing policy and stated that it “expects that most exemptions for PBT chemical substances will not be granted.”  The Agency also noted that it had denied all LVE notices for PFAS submitted since 2021.

Environmental and Workers’ Union Challenges

The rule was separately challenged by environmental groups and a workers’ union.

The environmental groups—Alaska Community Action on Toxics and the Environmental Defense Fund—argued that the rule did not go far enough, contending that PBTs should be categorically ineligible for the LVE and LoREX exemptions.  In their opening brief, they argued that TSCA Section 5(h) only allows EPA to create exemptions if its terms ensure that the substance “will not present an unreasonable risk.”  Because EPA “recognize[s] that new PBTs are inherently risky,” they alleged that EPA acted arbitrarily and exceeded its authority by declining to make all PBTs ineligible.  The groups further argued that the regulatory scheme “turns the statute on its head” by making PBTs presumptively eligible unless EPA affirmatively determines that the substance could result in potentially unreasonable exposure.

By contrast, the union—United Automobile, Aerospace and Agricultural Implement Workers of America (UAW)—challenged the rule for what it failed to address.  During the rulemaking, UAW and other unions jointly filed a comment describing the difficulties workers and unions face in determining the substances workers are exposed to, arguing it means that unions cannot weigh in on appropriate worker protections or confirm that employers are complying with restrictions.  In its lawsuit, UAW argued that EPA failed to consider the comment in violation of the Administrative Procedure Act (APA) and contrary to Congress’s intent that “the new chemical review process be transparent.”

The challenges were filed shortly before the presidential transition.  After obtaining a stay to consider the rule, the incoming Trump administration decided to defend it.

The Ninth Circuit’s Ruling

The Ninth Circuit denied both petitions in its seven-page, not-for-publication disposition issued August 26, 2026.

Addressing the environmental groups’ arguments first, the court held that TSCA delegates discretionary authority to EPA.  Section 5(h) allows EPA to consider exemptions “upon application,” the court explained, so case-by-case evaluations of PBTs are permissible.  The panel also concluded that EPA’s decision is not arbitrary and capricious because EPA considered and rejected the environmental groups’ preferred approach.  “Because the PBT Regulation governs new chemical substances, including those not yet developed, it was reasonable for EPA to reject a categorical ban,” the disposition states, noting heightened deference to agencies making predictive or scientific judgements.

As for UAW, the court held that the unions’ comment was only “tangential” to the proposed rule.  “The only aspect of EPA’s proposed rule that UAW cited was EPA’s proposal to change how certain scientific information would be made public,” but “UAW’s comment did not discuss the relative benefits of publication through either medium or address any matter germane to EPA’s proposed rule,” so EPA could lawfully decline to address the comment, the court held.

The case is Alaska Community Action on Toxics v. EPA, No. 25-158 (9th Cir.), docketed January 10, 2025.

D.C. Circuit Upholds EPA’s CERCLA Designation of PFOA and PFOS

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The D.C. Circuit has upheld EPA’s designation of two PFAS, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  In Chamber of Commerce v. EPA, decided August 18, 2026, the court denied every petition challenging the designation, leaving the 2024 rule in place.

What the Court Decided

Industry petitioners, led by the U.S. Chamber of Commerce and joined by chemical, fuel, waste, recycling, construction, and paper trade associations, raised three lines of attack: (1) that EPA misread CERCLA’s “may present substantial danger” standard; (2) that its cost-benefit analysis violated the Administrative Procedure Act’s notice requirement and was arbitrary and capricious; and (3) that regulating amid scientific and economic uncertainty was itself unreasonable.  The panel rejected all three.

Starting with the standard for designation, 42 U.S.C. § 9602(a) directs EPA to designate as hazardous those substances that, when released into the environment, “may present substantial danger to the public health or welfare or the environment.”  Petitioners read that phrase to require a finding that harm will occur on release.  Interpreting the statute de novo and without deference to EPA under Loper Bright Enterprises v. Raimondo, the court disagreed.  “May” denotes possibility, not certainty, and the statute directs EPA to forecast the risk of harm at the time a substance is released, the court held.  The phrase “substantial danger” means that the risk of harm must be serious and real, not hypothesized, which the court said answers the worry that EPA’s reading would let the agency reach something as innocuous as table salt.  Requiring absolute certainty about every release, the court added, would paralyze a statute Congress designed to act on scientific probabilities.

The court rejected two related theories within the same challenge.  First, it declined to read an inflexible hierarchy into CERCLA under which “hazardous substances” must clear a higher bar than “pollutants or contaminants.”  The two are separate designation regimes, the court held, and a substance may begin as a pollutant or contaminant and later be designated a hazardous substance as the science develops.  Second, the court found no nondelegation or void-for-vagueness problem.  Tying EPA’s authority to scientific findings under a public-health standard supplies the “intelligible principle” the nondelegation doctrine requires, the decision states, and the prior regulation of PFOA and PFOS under CERCLA gave regulated parties fair notice that they could be listed.

On the notice challenge, the court held that EPA’s Regulatory Impact Analysis was a “logical outgrowth” of the earlier Economic Assessment, so the additional cost data introduced in the final rule required no fresh comment round.  Notably, the court did not decide whether CERCLA requires EPA to weigh costs in a designation at all.  EPA assumed it must, and the panel assumed the same without deciding, which leaves that question open for a future challenge.

As for regulating amid uncertainty, the court held that EPA acted reasonably in designating PFOA and PFOS despite acknowledged gaps in what it knows about where the chemicals are, what cleanup will cost, and the rule’s downstream effects.  The decisive point was that designation is only the first of many steps before liability attaches.  A long sequence of contingent regulatory actions, together with CERCLA’s statutory limits on liability, stands between listing a substance and any party actually bearing cleanup costs.  Accordingly, the court concluded that EPA’s choice to regulate now rather than wait for certainty was not arbitrary and capricious.

Why It Matters

The designation, effective July 8, 2024, was EPA’s first use of 42 U.S.C. § 9602(a) to list a substance directly, rather than by reference to another environmental statute.  Its practical consequences are now in force: releases of one pound or more of PFOA or PFOS in a 24-hour period trigger reporting obligations, federal property transfers carry notice duties, and most significantly, responsible parties face CERCLA’s strict, joint-and-several liability and cost-recovery regime.

The ruling reaches well beyond PFAS manufacturers.  Waste management, recycling, construction, and other “passive receivers” that handled PFOA- and PFOS-containing materials without making them may now sit within the liability chain.  As the court stressed in rejecting the uncertainty challenge, though, listing is not the same as liability: CERCLA’s defenses, including its act-of-God, third-party, de minimis, de micromis, and innocent-landowner provisions, continue to limit who ultimately pays.

What to Watch

The decision is recent, and the deadlines for a petition for rehearing en banc or a petition for certiorari have not yet run, so the litigation may not be over.

Several aspects of the ruling bear on future CERCLA designations.  Because the court reviewed EPA’s reading de novo and still upheld it, the agency’s designation authority now rests on the statute’s best reading rather than on judicial deference, a firmer footing in the wake of Loper Bright.  EPA committed to notice-and-comment rulemaking before updating this designation, and it has said it intends to develop a broader framework for § 9602(a) designations generally, though the scope and timing of any such rulemaking remain to be seen.  And because the court left open whether cost must be weighed in a designation at all, that question is likely to return as EPA considers additional substances.

For background on the agency’s decision to defend the rule, see our previous post on the litigation.

The case is Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir.), filed June 10, 2024.

Federal Court Blocks California’s “Truth in Recycling” Law on First Amendment Grounds

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A federal court has preliminarily blocked California’s “Truth in Recycling” law, ruling that its restrictions on recyclability claims are likely unconstitutional under the First Amendment and finding that several of its key provisions are impermissibly vague under the Fourteenth Amendment.

In a July 14, 2026, order, the Southern District of California concluded that although the provisions likely to be unconstitutionally vague could be severed from the statute, the plaintiffs were likely to succeed on their broader First Amendment challenge.  As a result, the court enjoined enforcement of the law in its entirety pending further litigation.

What California’s “Truth in Recycling” Law Requires

California enacted SB 343, often referred to as the “Truth in Recycling” or “Truth in Labeling” law, in October 2021.  The law declares recyclability claims—including the chasing arrows symbol—deceptive or misleading unless certain criteria are met.  Chief among them is the “60/60 requirement,” which mandates that the labeled product or packaging be:

  1. Collected for recycling by jurisdictions serving at least 60% of Californians; and
  2. Processed by facilities serving at least 60% of recycling programs statewide, with the collected material sent to and reclaimed at a facility consistent with the Basel Convention (a 1989 treaty governing the transnational movement of hazardous waste).

The law also requires that:

  • The labeled product or packaging “routinely” become feedstock used to produce new products or packaging;
  • Plastic packaging not include any components, inks, adhesives, or labels that prevent recyclability, according to guidance published by a plastics trade association; and
  • Plastic products and non-plastic products and packaging be “designed to ensure recyclability” and not include any components, inks, adhesives, or labels that prevent recyclability.

These restrictions were set to take effect on October 4, 2026.  The plaintiffs—a coalition of roughly twenty trade associations spanning food, packaging, grocery, and retail industries—sued Attorney General Rob Bonta in March 2026, arguing the law is unconstitutional on its face.

Key Provisions Likely Unconstitutionally Vague

The plaintiffs argue that four of the law’s requirements are unconstitutionally vague under the Fourteenth Amendment.  For the purposes of a preliminary injunction, the court found that they are likely to succeed on each challenge:

  1. The “routinely becomes feedstock” provision, because the meaning of “routinely” is unclear.
  2. The Basel Convention requirement, because manufacturers were given no guidance on how compliance with the provision will be determined, which elements of the convention will be considered in reaching a determination, and which facilities are currently in compliance.
  3. The reference to industry guidance, because it is ambiguous whether materials categorized as “Detrimental to Recycling” or “Tolerated But Needs Improvement” are permissible, and because SB 343 does not address what happens when the guidance changes.
  4. The ensures or prevents recyclability provision, because the law provides no guidance on what those terms mean.

The court found all four requirements severable from the remaining text of the law, including the 60/60 requirement—meaning that the rest of the law could still theoretically be allowed to take effect even if the four vague provisions were enjoined.

First Amendment Analysis

The remainder of the law could not withstand scrutiny under the First Amendment, however.

As a threshold matter, the court first determined that the speech at issue is only “potentially” misleading, and not “inherently” misleading, and therefore within the scope of the First Amendment.  The court then applied the remaining prongs of Central Hudson Gas & Electric Corp. v. Public Service Commission, the framework applicable to many regulations of commercial speech.

While finding that California has substantial interests in (1) improving recycling rates and (2) reducing consumer confusion, the court concluded that neither interest was directly advanced by the law.  Addressing recycling rates first, the court held that California failed to adequately support its assertion that businesses would redesign products and packaging to make them recyclable under the law instead of simply removing their recyclability claims.  Gains in efficiency at recycling facilities from removing contaminants “may be substantially outweighed by the decreased rate at which recyclable materials reach those facilities,” the order states.

As to consumer confusion, the court held that the reduced number of recyclability claims would leave customers “with less information than they would receive in the absence of SB 343’s regulatory scheme.”  For example, a product only recyclable in one part of California could not be labeled with that information because the 60/60 requirement would not be satisfied, the court observed.

Finally, the court also held that the law is more extensive than necessary to serve its interests, observing that less extensive regulations, such as required disclosure of materials that may limit recycling, would also advance the state’s goal.

The case is California League of Food Producers v. Bonta, No. 3:26-cv-1675 (S.D. Cal.), filed March 17, 2026.

New Mexico PFAS Labeling Mandate Faces First Amendment Challenge in Federal Court

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A collection of trade associations has sued in federal court to block New Mexico’s PFAS labeling requirement for consumer products, arguing that the regulation violates the First Amendment and the dormant Commerce Clause.

The plaintiffs—including the American Chemistry Council, Alliance for Automotive Innovation, American Coatings Association, National Association of Manufacturers, and several other industry groups—filed their complaint on July 1, 2026, along with a motion for a preliminary injunction based solely on their First Amendment claim.  As it stands, the labeling requirement applies to nearly all products manufactured for sale in New Mexico on or after January 1, 2027.  While several other states have adopted PFAS labeling rules, none apply so broadly.

The federal suit follows a state-court challenge to the labeling requirement, which also alleges First Amendment violations.  That case, filed by a paint manufacturer in May, separately argues that the regulation violates state law because it exceeds statutory authority and imposes an impracticable labeling deadline.

Regulatory Background

New Mexico’s PFAS Protection Act, enacted in 2025, phases in prohibitions on products containing intentionally added PFAS and requires manufacturers to report their use of PFAS to the state.  The law defines PFAS broadly but exempts certain products from its requirements, including fluoropolymers.

In April 2026, following a rulemaking hearing, the New Mexico Environmental Improvement Board (EIB) approved regulations proposed by the New Mexico Environmental Department (NMED) to implement the Act, including a labeling requirement.  The mandated label consists of the term “PFAS” inside an Erlenmeyer flask symbol.  Notably, the statutory exemptions to the prohibitions and reporting requirements do not extend to the labeling mandate.

The First Amendment Claims

The plaintiffs’ First Amendment arguments center on which level of scrutiny applies.  Compelled commercial speech is ordinarily subject to heightened scrutiny, which the plaintiffs argue the labeling requirement cannot survive.  A lesser standard applies only to disclosures that are purely factual and uncontroversial, relate to the terms under which a product or service is offered, and are not unduly burdensome—the test established in Zauderer v. Office of Disciplinary Counsel.  In the preliminary injunction motion, the plaintiffs contend the label fails on every count.

Not purely factual.  The plaintiffs argue the Erlenmeyer flask symbol doesn’t convey factual information so much as a warning.  Commercial manufacturing doesn’t actually use Erlenmeyer flasks, they note, and there is ongoing scientific debate over which substances even qualify as PFAS.  Like a skull-and-crossbones for poison or a flame symbol for flammability, the flask is designed to signal danger, the filing argues.  While NMED testified that the flask tells costumers that the product contains a chemical “they might want to know about,” that interpretation “does not pass the straight face test,” since the state “does not require the Erlenmeyer flask graphic for any other chemical on the neutral theory that consumers ‘might want to know about’ it.”

Not uncontroversial.  The filing next argues that this warning is controversial because the risks associated with PFAS as a class are “at best unsettled.”  For example, the plaintiffs point to fluoropolymers, which they say are understood to present little to no risk when used in products.  To the extent that uncertainty exists on this point, they argue it does not help New Mexico, because it only suggests that the question is controversial.  “If the government wants to present its position concerning an unsettled scientific topic to consumers, then it must do so itself,” the filing states.

Not related to the consumer transaction.  The plaintiffs argue that any upstream or downstream harms associated with PFAS—including releases from manufacturing or disposal—fall outside Zauderer‘s scope because they don’t relate to the terms of the transaction with the consumer.

Unduly burdensome.  Finally, the plaintiffs assert that compliance will be extraordinarily costly and disruptive, potentially running into the hundreds of millions of dollars, in part because manufacturers with global distribution chains may need to relabel their entire product lines.

The motion for a preliminary injunction ends by requesting that the court, at a minimum, enjoin enforcement of the labeling mandate as applied to products only containing fluoropolymers or PFAS to which consumers will not be exposed.

The Dormant Commerce Clause Claims

The complaint also raises two Commerce Clause claims not included in the preliminary injunction motion.

The first argues that the regulation improperly reaches conduct entirely outside New Mexico.  No products containing intentionally added PFAS are manufactured in the state, the complaint notes, yet the mandate applies even when a manufacturer never directly transacts in New Mexico—for instance, when it sells to a third-party wholesaler that independently distributes there.  The plaintiffs argue this amounts to direct regulation of interstate commerce.

The second claims that the regulation’s burdens on interstate commerce exceed its local benefits.  In part because no products are manufactured with intentionally added PFAS in New Mexico, the complaint argues, the costs of compliance will fall almost entirely on out-of-state commerce.  New Mexico had less burdensome alternatives—like carving out fluoropolymers or eliminating the flask symbol—that would have a lesser impact, evidencing that the requirement is excessive, the complaint concludes.

The case is American Chemistry Council v. Kenney, No. 1:26-cv-2130 (D.N.M.), filed July 1, 2026.  A hearing on the preliminary injunction motion has been set for August 27, 2026, at 8:30 AM MT.

California Barred from Enforcing Prop 65 DEA Warning After First Amendment Challenge

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On June 24, 2026, the U.S. District Court for the Eastern District of California entered a final judgment and permanent injunction barring the Attorney General from enforcing Proposition 65’s cancer-warning requirement for diethanolamine (DEA) in cosmetics.  The judgment adopts a stipulation that the Personal Care Products Council (PCPC) and Attorney General Rob Bonta filed the day before, resolving PCPC’s First Amendment challenge to the DEA warning.

First Amendment Arguments

As discussed in a previous post, DEA was automatically added to the Prop 65 list after the International Agency for Research on Cancer (IARC) concluded that the substance is “possibly carcinogenic to humans.”  However, in its complaint, PCPC argued that IARC did not identify any studies establishing a link between DEA and cancer in humans, relying instead on a study of “questionable relevance” in a highly susceptible strain of mice.  As a result, PCPC contended, applying the DEA Prop 65 cancer warning “in cosmetic and personal products is false, misleading, and factually controversial,” in violation of the First Amendment.

What the Parties Agreed

The Attorney General did not concede the constitutional question.  He continues to dispute that the DEA warning violates the First Amendment, but agreed to resolve the case in light of, as the stipulation puts it, “the current state of the relevant science” and three recent decisions rejecting compelled Prop 65 cancer warnings: a Ninth Circuit ruling on glyphosate, and two district court rulings on acrylamide and titanium dioxide. Under the stipulation, the Attorney General reserves the right to move to dissolve the injunction under Federal Rule of Civil Procedure 60(b) if the facts or law change.

What the Order Provides

The order declares that, based on the current state of the science, the DEA cancer warning cannot be constitutionally enforced.  It permanently enjoins the Attorney General, his officers, employees, and agents, and “all those acting in privity or concert with” them from filing or prosecuting new lawsuits to enforce the DEA warning requirement for cosmetic and personal care products.  For companies that make or sell DEA-containing cosmetics—shampoos, liquid soaps, and body washes—the order removes the Attorney General as a source of new DEA warning suits.

Because the judgment was entered on the parties’ stipulation rather than after a merits ruling, no court weighed the DEA science or held the warning unconstitutional in adversarial litigation.  Its declaratory language is tied to the current state of the science, and the Rule 60(b) reservation leaves room to revisit the injunction if that science or the law changes.

The case is The Personal Care Products Council v. Bonta, No. 2:26-cv-00682 (E.D. Cal.), complaint filed March 2, 2026.