Fifth Circuit TSCA Ruling: Established Process Not a “New Use”

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A decades-old manufacturing process cannot constitute a significant new use under TSCA, the US Court of Appeals for the Fifth Circuit ruled on March 21, 2024, in the case Inhance Techs. v. EPA.

Inhance Technologies LLC (“Inhance”) has strengthened plastic containers using the same fluorination process since 1983.  Unbeknownst to Inhance and EPA until March 2022, the fluorination process resulted in the creation of multiple PFAS chemicals that were included in a significant new use rule (SNUR) for long-chain perfluoroalkyl carboxylate substances, which took effect in September 2020.

When EPA detected PFAS in a container manufactured by Inhance, it issued the Texas-based company a notice of violation of the SNUR because Inhance had not filed significant new use notices (SNUNs) for the PFAS created during the fluorination process.  EPA instructed Inhance to stop or change the fluorination process so that it no longer created PFAS.  Inhance filed two SNUNs in December 2022 but continued fluorinating plastic containers using the same process.  Following review of the SNUNs, in December 2023, EPA issued two orders under TSCA sections 5(e) and 5(f) prohibiting Inhance from manufacturing or processing PFAS through their fluorination process.  In response, Inhance successfully petitioned the Fifth Circuit for expedited review and a stay pending appeal, stating that the company would be forced to shut down if the orders were put into effect.

Inhance argued that EPA’s orders were unlawful for three reasons.  First, Inhance argued that its fluorination technology could not be understood as a “new” use under TSCA because it had been ongoing for over thirty years before EPA finalized the SNUR.  Second, Inhance argued that the PFAS created during the fluorination process constituted impurities, which are exempted from the scope of the SNUR.  Finally, Inhance argued that EPA’s interpretation of the SNUR as applying to all industries is a “reinterpretation” for which Inhance had not received fair notice.

In the end, the court did not address Inhance’s second and third points, finding the first argument sufficient to vacate EPA’s orders.  Though the statute does not define “new,” the court found Inhance’s interpretation, “not previously existing,” more compelling than EPA’s interpretation, “not previously known to the EPA,” for multiple reasons.  But ultimately, the court just did not think EPA’s interpretation was sensible, stating that it “lacks intuitive force.”  Inhance could not have been expected to submit its fluorination process as an ongoing use during the rulemaking process for the SNUR because it did not know that it created PFAS at that time, the court said.

Writing on behalf of the three-judge panel, Judge Cory T. Wilson concluded by stating that EPA is not powerless to regulate Inhance’s fluorination process.  TSCA section 6 allows for regulation of all chemical substances, unlike section 5, which only applies to new substances and significant new uses.  However, unlike section 5 rulemaking, section 6 requires EPA to conduct a cost-benefit analysis, which takes into account the substance’s benefits and economic considerations.  The court stressed that this requirement indicates that Congress wanted EPA to give more thoughtful consideration to the impact of its regulations on preexisting manufacturing processes.

Judge Wilson was joined by Chief Judge Priscilla Richman and Judge James E. Graves Jr., who concurred in the judgment only.

EPA Issues SNUR to Keep Inactive PFAS Out of Commerce

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Inactive PFAS chemicals can no longer reenter commerce without EPA approval under a final significant new use rule (SNUR) issued by EPA on January 11, 2024.

The 329 PFAS subject to the SNUR are currently designated as inactive on the Toxic Substances Control Act (TSCA) Inventory and are not subject to an existing SNUR.  (An inactive designation indicates that a substance has not been manufactured, imported, or processed since 2006, with a handful of exceptions addressed below.)  To identify these chemicals, EPA applied the same definition of PFAS the Agency used in its TSCA section 8(a)(7) PFAS reporting rule issued in October 2023, discussed in a previous Verdant Law blog post.

The SNUR requires companies to notify EPA via a significant new use notification at least 90 days before commencing the manufacture, import, or processing of any of these substances.  Upon receiving notification, EPA will assess whether the new use may present an unreasonable risk to human health or the environment and take appropriate action, if necessary, as required under TSCA section 5.

Import and processing of inactive PFAS-containing articles are exempt from the SNUR.  Covered PFAS also fall outside the scope of the SNUR when they are manufactured, imported, or processed:

  • As impurities;
  • As byproducts not for commercial use purposes;
  • In small quantities solely for R&D;
  • For test marketing purposes;
  • For use as a non-isolated intermediate; or
  • Solely for export from the United States.

To establish a significant new use, EPA must determine that the use is not ongoing.  Because the above uses do not result in an active designation on the TSCA Inventory, EPA could not conclude that there are no ongoing uses for these activities.

EPA Proposes SNURs for Flame Retardants

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EPA has proposed significant new use rules (SNURs) for three flame retardants under the Toxic Substances Control Act (TSCA). The three flame retardants are tris(2-chloroethyl) phosphate (TCEP), tetrabromobisphenol A (TBBPA), and triphenyl phosphate (TPP).  All three substances are currently undergoing TSCA risk evaluations.  The proposed significant new uses are manufacture (including import) or processing for any use, except for those uses being considered in the risk evaluations.  In the Federal Register notice, EPA explained that significant new uses would encompass the following categories:

  • Manufacture and processing for uses that have ceased;
  • Manufacture and processing for uses that have not yet ceased but for which all manufacture and processing has ceased; and
  • Manufacture and processing for uses for which EPA has no information demonstrating that the use has previously commenced in the United States.

The Agency sought public comment on its description of the significant new uses for the chemicals identified, including specific documentation of ongoing uses not identified by the Agency in the risk evaluation scope documents.

EPA noted that “The issuance of a SNUR is not a risk determination itself, only a notification requirement for ‘‘significant new uses,’’ so that the Agency has the opportunity to review the [Significant New Use Notification] for the significant new use and make a TSCA section 5(a)(3) risk determination.”  In other words, “Once EPA receives a SNUN, EPA must either determine that the significant new use is not likely to present an unreasonable risk of injury or take such regulatory action as is associated with an alternative determination under TSCA section 5 before the manufacture (including import) or processing for the significant new use can commence.”

In its discussion of the significant new use determination, EPA explained that the Agency considered information about the toxicity or expected toxicity of these substances, likely human exposures and environmental releases associated with possible uses, and the four factors listed in TSCA section 5(a)(2):

  • The projected volume of manufacturing and processing of a chemical substance,
  • The extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance,
  • The extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance and
  • The reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.

According to the Federal Register Notice, current uses of TCEP are as follows:  TCEP is imported into the United States and processed for commercial use in paints and coatings, for industrial or commercial use in polymers for use in aerospace equipment and products, and for commercial use as a laboratory chemical.

EPA found that TBBPA is currently manufactured (including imported) in the United States. It is processed as a reactant or intermediate to create other flame retardants; incorporated into formulation, mixture, or reaction products; and incorporated into articles. The Agency noted that the predominant uses for TBBPA are as a reactive flame retardant in electrical and electronic products and as an additive flame retardant in electrical and electronic products. In addition, epoxy resin containing TBBPA can be used in adhesives, laminate for aviation and automobile interiors and building/ construction materials.

The Agency reported that TPP is manufactured (including imported) in the United States.  It is processed as a reactant; incorporated into formulation, mixture, or reaction products; and incorporated into articles.  Commercial uses include in plastic and rubber products and in paints and coatings. The chemical is also used in lubricants and greases.  In addition, consumer uses were reported in foam seating and bedding products.

Comments can be viewed in docket EPA–HQ–OPPT–2023–0012 at regulations.gov.

TSCA Enforcement Action Taken Over Failure to Comply with PFAS SNUR

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In December 2022, two separate lawsuits were filed against Inhance Technologies USA regarding its alleged production of certain PFAS substances in violation of the Toxic Substances Control Act (“TSCA”). These lawsuits are important as they raise novel questions of TSCA interpretation and enforcement.

The first lawsuit was filed by the U.S. Department of Justice, Environment and Natural Resources Division on behalf of the U.S. Environmental Protection Agency (“EPA”).  The second case is a citizen suit filed by the non-profit organizations Center for Environmental Health (“CEH”) and Public Employees for Environmental Responsibility (“PEER”). U.S. v. Inhance Technologies LLC, U.S. Eastern District of Pennsylvania, Case No. 2:22-cv-05055; Center for Environmental Health v. Inhance Technologies USA, U.S. District Court for the District of Columbia, Case No. 1:22-cv-03819. It is rare that EPA pursues TSCA enforcement actions in federal court. Similarly, the citizen suit provision of TSCA is exercised infrequently.

Defendant Inhance Technologies USA (“Inhance”) is a Texas-based corporation that treats plastic containers, including high-density polyethylene (HDPE), using a fluorination process. Inhance is the principal supplier of post-mold fluorination services in the United States.

According to the Complaints, Inhance has been in violation of the Long-Chain Perfluoroalkyl Carboxylate (“LCPFAC”)  Significant New Use Rule (“SNUR”) that requires manufacturers to file a Significant New Use Notice (“SNUN”) for any manufacturing (including importing) or processing of an LCPFAC for which there were no ongoing uses as of January 21, 2015. See 40 CFR 721.10536. This includes substances that are typically exempt byproducts under TSCA and LCPFACs that are imported as part of articles. Inhance allegedly violated two SNUR requirements.  The complaints assert that Inhance failed to submit a SNUN for LCPFAC substances formed during the fluorination of plastic containers at least 90 days prior to the manufacture of these substances. The second violation charged is the company’s manufacture of these substances before completion of the requisite 90-day SNUN review period.

Inhance received warning of its violation of the LCPFAC Rule by the Plaintiffs of each lawsuit months prior to litigation. The lawsuits follow a March 2022 letter EPA sent to the HDPE industry. EPA issued the letter, first “to remind industry of this issue to help prevent unintended PFAS formation and contamination,” and second, to “emphasize the requirement under TSCA as it related to PFAS and fluorinated polyolefins.” In its letter, EPA reminded the industry of the SNUR, highlighting that while LCPFAC chemical substances are byproducts of the fluorination process from the chemical and commercial standpoint, these substances are not eligible for the byproducts exemption in 40 CFR § 721.45(e). The Agency letter further encouraged the industry to pursue alternative fluorination processes which are less likely to foster unintentional PFAS creation. EPA’s lawsuit is its first enforcement matter against the HDPE industry following the Agency’s warnings.

In March 2022, EPA issued a Notice of Violation (NOV), requesting that Inhance provide the Agency with additional information on changes the company may have made to the HDPE fluorination process that would eliminate PFAS production. The NOV stated that if no changes to the manufacturing process had been made, Inhance would need to immediately cease manufacturing PFAS and submit a SNUN to the Agency for review. Agency review of the information submitted by the company confirmed that the company was producing substances that are subject to the LCPFAC Rule.

In September 2022, Inhance notified EPA that it intended to submit a SNUN for its fluorination processes, but that it was unwilling to cease its fluorination processes before or during the EPA SNUN review period. Inhance has consistently maintained that it believes its operations are in full regulatory compliance.

EPA’s lawsuit was filed on December 19, 2022, with the non-profit lawsuit following about a week behind. The Complaints allege a variety of TSCA violations, namely the following:

  • Section 5(a)(1) of TSCA, which states no person may manufacture or process a chemical substance for a significant new use unless (1) that person submits a Significant New Use Notice (“New Use Notice”) to the EPA; (2) the EPA reviews that notice; and (3) the EPA makes a determination on that use under Section 5(a)(3) of TSCA, 15 U.S.C. § 2604(a)(3). 15 U.S.C. § 2604(a)(1).
  • Title 40 C.F.R. § 721.25 prescribes similar requirements for any person seeking to engage in a significant new use of a chemical substance.
  • Section 15 of TSCA, which states that it is a prohibited act to fail or refuse to comply with any requirement of TSCA or any rule promulgated under TSCA. 15 U.S.C. § 2614.
  • Under 40 C.F.R. § 721.35, it is a violation of Section 15 of TSCA to fail to comply with any provision of Title 40, Part 721 of the regulations implementing TSCA.

Plaintiffs in both cases are seeking declaratory and injunctive relief under Section 15(a) of TSCA (15 U.S.C. § 2616(a)) and the Declaratory Judgment Act (28 U.S.C. § 2201) for Inhance to cease production of all products using the PFAS forming fluorination process. To resume production, Inhance must demonstrate to EPA that it has altered its production process to eliminate PFAS production.

Case Update

In April 2023, the U.S. District Court of the District of Columbia dismissed the lawsuit brought by CEH and PEER. Shortly after CEH and PEER filed their lawsuit, Inhance filed a motion to dismiss the case arguing that the lawsuit was inappropriate under TSCA’s diligent prosecution bar. DOJ filed an amicus brief supporting Inhance’s motion to dismiss. For the CEH and PEER lawsuit to proceed, the organizations would have needed to demonstrate that DOJ was not diligently prosecuting the case. The court granted Inhance’s motion stating that “[n]othing in the eight days between when DOJ filed its lawsuit and when the Plaintiffs filed theirs suggests that [DOJ] was not diligently prosecuting the case.”

On June 13, the court presiding over the DOJ lawsuit scheduled oral arguments for August 23, 2023.

EPA Proposes Non-Consent-Order SNURs for 13 Chemical Substances

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On October 16, 2018, the Environmental Protection Agency (EPA) issued a proposed rule that would establish Significant New Use Rules (SNURs) under the Toxic Substances Control Act (TSCA) for 13 chemical substances for which premanufacture notices (PMNs) have been approved during the two years since the statute was amended. A total of 6 SNURs were proposed for these 13 substances. Unlike other recent SNURs enacted after TSCA was amended, the 13 chemical substances are not also subject to consent orders. Indeed, all previously proposed and final SNURs for PMNs under amended TSCA were for substances for which EPA had previously negotiated orders under TSCA Section 5(e).

The proposed SNURs would require that persons who intend to manufacture (including import) or process any of the 13 chemical substances for an activity that is designated as a significant new use submit a “Significant New Use Notice” to EPA at least 90 days before commencing that activity. And, consistent with the SNUR regulations at 40 CFR § 721.25, the proposed rule states that persons may not commence the manufacture or processing for the significant new use until EPA has conducted a review of the notice and decided on the notice, and the person has taken any actions as are required as a result of that determination. Comments on the proposed SNURs are due November 15, 2018.

EPA Publishes Direct Final Rules for 29 Significant New Use Rules

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On August 27, 2018, the U.S. Environmental Protection Agency (EPA) issued two direct final rules promulgating significant new use rules (SNURs) under the Toxic Substances Control Act (TSCA). The first direct final rule promulgates SNURs for ten chemical substances that were the subject of premanufacture notices (PMN). 83 Fed. Reg. 43527. The second direct final rule promulgates SNURs for 19 chemical substances that were the subject of PMNs. 83 Fed. Reg. 43538. All 29 chemical substances are subject to consent orders issued by EPA pursuant to TSCA Section 5(e). The rules require persons who intend to manufacture (including import) or process any of these chemical substances for an activity that is designated as a significant new use to notify EPA at least 90 days before commencing that new use.

The covered chemicals vary, but include several substances intended for use as coatings additives. The requirements for each of the substances differ, but may include limitations on the uses of the substance, hazard communication, personal protective equipment use, and the submission of certain toxicity testing data. Both direct final rules will be effective on October 26, 2018.

EPA proposes updates to SNUR regulations on workplace protection and hazard communication.

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On July 28, EPA published a proposed rule updating the Significant New Use Rule (SNUR) regulations, which implement section 5(a)(2) of the Toxic Substances Control Act (TSCA). In announcing the proposal, EPA emphasized the need to harmonize regulations based on Occupational Safety and Health Administration (OSHA) standards for respiratory protection and hazard communication, which have both been updated since the SNUR regulations were last revised in 1989.

The proposed rule also contains several other changes meant to address “issues identified through EPA’s experience issuing and administering SNURs,” including changes to the bona fide intent to manufacture procedure. Additional, minor changes include correcting typographical errors, updating “material safety data sheet” or “MSDS” to “safety data sheet” or “SDS,” and revising language to “more accurately use the terms manufacture, manufacturer, and manufacturing.”

Notably, many of the proposed changes to the SNUR regulations will affect previously-issued SNURs.

EPA notes that, due to regulatory updates from both the National Institute for Occupational Safety and Health (NIOSH) and OSHA, the current regulatory language for protection in the workplace, concerning respiratory protection, is inconsistent with NIOSH and OSHA requirements. Thus, EPA proposes to replace outdated references to old OSHA standards with the current NIOSH regulations on the certification and testing of respirators, as well as adding specific types of NIOSH-certified respirators to the list of approved respirators. According to the proposed rule, companies subject to previously-issued SNURs containing respirator requirements can either follow the updated requirements or continue using the older respirators, if they are still available, without triggering a Significant New Use Notification (SNUN) requirement.

EPA also proposes to modify a subsection on airborne forms of chemicals by adding “particulate or aerosol,” “gas/vapor,” and combinations thereof.

The proposed rule further revises the workplace protection section by inserting the requirement that a hierarchy of controls – such as enclosure of operations, ventilation, and workplace policies and procedures – must be “considered and implemented to prevent exposure, where feasible” before using personal protective equipment (PPE) for worker protection. This change is reportedly in response to previous comments criticizing “EPA’s approach of exclusively identifying the absence of adequate personal protective equipment as a significant new use” as out of step with best practices in industrial hygiene. EPA notes that the new language has been incorporated in all new chemical SNURs issued since June 26, 2013 and is consistent with OSHA requirements.

The agency’s proposed updates on hazard communication are based on OSHA’s updates to its Hazard Communication Standard (HCS), which was itself modified, in 2012, to conform to the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). EPA also proposes adding a new requirement which could be used in new SNURs for a written hazard communication program in each workplace in accordance with the OSHA HCS. Another proposed addition provides specific statements and warnings that could be required under a SNUR and “would be based on EPA’s risk assessment of the chemical substance and would be consistent with the OSHA HCS and GHS recommendations.”

In addition to the changes to the workplace protection and hazard communication revisions, EPA proposes various other modifications, including:

  • Bona fide procedure: Currently, when EPA issues a SNUR in which the chemical identity is withheld as confidential business information (CBI), manufacturers and processors may submit information to EPA to “determine whether their substance is subject to the SNUR.” EPA now proposes to amend the process to apply to other kinds of CBI, such as production volume limits, so EPA may inform bona fide submitters whether and how the SNUR applies to them, including any confidential significant new use designations.
  • Notice submission requirements: EPA proposes that notification submissions such as premanufacture notifications or low volume exemptions, among others, must include any SDS that has already been developed for the relevant chemical.

EPA has specifically requested comments on the following issues:

  • the use of “next generation” respirators;
  • the incorporation of the hierarchy of controls approach to worker protection in the SNUR requirements; and
  • “any suggested methods for minimizing respondent burden, including revisions to the automated collection techniques being used for submissions to EPA under TSCA, …the Agency’s Central Data Exchange (CDX) portal.”

The deadline for comments on the proposed rule is September 26, 2016.

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

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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.

 

Comments period extended for proposed perfluorinated chemicals SNUR.

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EPA is extending the comment period for its proposed Significant New Use Rule (SNUR) for long-chain perfluoroalkyl carboxylate (LCPFAC) and perfluoroalkyl sulfonate (PFAS) chemical substances. The proposed SNUR, which was first released in January, designates as significant new uses the manufacturing or processing of certain LCPFACs for any use not ongoing after 2015, and any other LCPFACs for which there are currently no ongoing uses. The proposed SNUR also makes inapplicable the exemption for importing articles containing LCPFACs and carpets containing PFAS. EPA is extending the comment period because the agency received “several comments asserting that there may be significant implications for the supply chain.”

The comment period originally ran until March 23, 2015, but is now extended until June 26, 2015. The Federal Register notice of the extension is scheduled to be published on March 16, but is currently available in pre-publication form [PDF].

EPA promulgates Significant New Use Rules for 27 PMN substances.

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In yesterday’s Federal Register, the EPA published Significant New Use Rules (SNUR) under the Toxic Substances Control Act (TSCA) for 27 substances that were already the subject of Premanufacture Notices (PMNs). Two of the substances – Phosphoric acid, iron (2+) lithium salt (1:1:1) and Polymer of terephthalic acid and ethyl benzene with multi-walled carbon nanotube (generic) – are also subject to “risk-based” consent orders under TSCA section 5(e), requiring protective measures to limit exposures or otherwise mitigate the potential unreasonable risk to human health and the environment presented by the substances. For these substances, the SNURs designate the absence of those protective measures as a “significant new use.”

Under all of the SNURs, EPA must be notified at least 90 days before beginning to manufacture or process the specified chemicals in a “significant new use.” For the chemicals not subject to § 5(e) consent orders, any use deviating from the use scenario reported in the corresponding PMN is designated as a “significant new use.” Specific requirements for each chemical are specified in the regulatory text.

The SNUR was promulgated by Direct Final Rule, and will go into effect on April 3, 2015, unless adverse comments are submitted by March 4.