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

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

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

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

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

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

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

EPA will withdraw proposed rules for fourth set of High Production Volume chemicals.

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The EPA will withdraw a 2011 proposed rule requiring testing and other data for 23 High Production Volume (HPV) chemicals and imposing Significant New Use Rules (SNURs) on 22 other HPV chemicals. Last week, Bloomberg BNA reported that the agency had confirmed in an email that the rule will be formally withdrawn, although a timeline has not been established yet. Under the Toxic Substances Control Act (TSCA), HPV chemicals are those produced or imported into the U.S. at the rate of at least 1 million pounds per year. However, significant data gaps exist regarding the hazards associated with these substances.

The rules were part of the EPA’s HPV Challenge Program, which encouraged the voluntary submission of health and hazard data for approximately 1,400 HPV chemicals sponsored by companies. EPA previously issued three other test rules for “unsponsored chemicals.”

EPA justified the withdrawal of the fourth set of rules by alluding to higher priorities, such as the agency’s TSCA Work Plan, an initiative launched in 2012 that identified 83 substances on which to conduct risk assessments. When the regulatory package was proposed, industry groups commented that the proposal was duplicative in requesting data already developed for and collected by the European Chemicals Agency (ECHA), which implements REACH.

Data from over 860 chemicals was made publicly available to the HPV Challenge Program through international efforts. However, of the over 2,200 chemicals sponsored through the voluntary part of the HPV Challenge Program, data was received for only 82 percent of the substances – and not all of that data is complete.

Until the regulatory package is withdrawn, the substances subject to the SNURs remain subject to 12(b) export notification requirements.

EPA issues 35 SNURs.

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Yesterday, U.S. EPA issued Significant New Use Rules (SNURs) for 35 substances which were subject to Premanufacture Notices (PMNs) under the Toxic Substances Control Act (TSCA). The SNURs were promulgated as a Direct Final Rule, and take effect starting April 14, 2014.

Fourteen of the substances, including various polyfluorinated alkyl compounds and multi-walled carbon nanotubes, are subject to “risk-based” TSCA § 5(e) consent orders which require use of protective measures to limit exposure or otherwise mitigate risk; the SNURs for these substances designate as a significant new use the absence of these protective measures. The SNURs for the other 21 substances designate various significant new uses, including releases to water as well as certain industrial, commercial and consumer activities, and establish certain protection in the workplace requirements, such as the use of respirators.

Written adverse or critical comments, or notice of intent to submit such comments, must be received by E.P.A. by March 14, 2014.

House Subcommittee holds fifth and final hearing on TSCA reform.

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Yesterday, the House Energy and Commerce’s Subcommittee on Environment and the Economy held its fifth hearing on the Toxic Substances Control Act (TSCA). In its last hearing on the subject for the 113th Congress, Subcommittee members focused on TSCA sections 4 and 8, which govern chemical testing and information reporting and retention requirements. (We previously covered Subcommittee hearings on TSCA here and here.)

In his opening remarks, Subcommittee Chair John Shimkus (R-IL) expressed his interest in reconsidering EPA’s authority to “produce tailored, necessary and high quality test data and other information to carry out TSCA.” Rep. Shimkus also highlighted the need to reexamine section 8’s exemptions to reporting requirements and the definition of “processor.”

Both Republican and Democratic members emphasized the importance of sending TSCA modernization legislation to the President this year. Committee Ranking Member Henry Waxman (D-CA) offered to work with Rep. Shimkus, whose office has reportedly been developing TSCA reform legislation without input from any Democratic members. Rep. Waxman also pointed out that the public interest community is deeply concerned with the bipartisan Senate bill known as the Chemical Safety Improvement Act (CSIA) and noted that the American Chemistry Council and Safer Chemicals, Healthy Families coalition had in 2011 identified and documented areas of agreement in a mediated discussion. Rep. Waxman and Subcommittee Ranking Member Paul Tonko (R-NY) sent a letter to the two organizations requesting this documentation in the hope that it might “provide a blueprint for legislative success.”

Hearing witnesses from the private and public sectors all voiced their support for TSCA modernization. Industry members called for a flexible, prioritized risk-based approach to screening and assessing chemicals. Public sector witnesses advocated for significant reform of TSCA’s testing and reporting requirements, including making it easier for EPA to require testing from manufacturers, especially for vulnerable populations such as children and pregnant women, and increasing transparency for data currently protectable as Confidential Business Information (CBI).

The January 9 chemical spill in West Virginia prompted witnesses and Democratic members to question the adequacy of TSCA’s data collection, pointing out the lack of basic health and safety data on the contaminant in that spill. Also on Tuesday, the Senate Subcommittee on Water and Wildlife, part of the Environment and Public Works Committee, held a hearing on the safety and security of drinking water supplies. Senator Joe Manchin (D-WV) testified at that hearing, calling for stronger chemical storage standards and more frequent safety inspections, as well as TSCA reform.

Senators introduce chemical spill and water protection bill after West Virginia leak.

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On Monday, Senator Joe Manchin (D-WV) introduced a bill to prevent future chemical spills like the one that recently contaminated the Elk River and the drinking water for 300,000 West Virginians. The Chemical Safety and Drinking Water Protection Act of 2014 (S. 1961), cosponsored by Senators Barbara Boxer (D-CA) and Jay Rockefeller (D-WV), provides a framework for overseeing chemical storage facilities and equipping states and public water companies to respond to spills and other emergencies. The bill amends the Safe Drinking Water Act (SDWA) by adding a new Part G, “Protection of Surface Water from Contamination by Chemical Storage Facilities.”

According to a press release from Sen. Manchin’s office, the Act is premised on four key principles:

1. Requiring regular state inspections of above-ground chemical storage facilities,
2. Requiring industry to develop state-approved emergency response plans that meet at least minimum guidelines established in this bill, 
3. Allowing states to recoup costs incurred from responding to emergencies, and 
4. Ensuring drinking water systems have the tools and information to respond to emergencies.

The Act applies to chemical storage facilities for which the EPA or delegated state authority has determined “that a release of the chemical from the facility poses a risk of harm to a public water system.” It establishes state programs under SDWA to oversee and inspect the facilities, building on existing water protection plans. The bill sets federal minimum standards for chemical facilities regarding construction, leak detection and spill requirements, emergency response plans, and notification to EPA, state officials, and public water systems of stored chemicals. Inspections would be required on a regular basis, either every three of five years, depending on drinking water protection plans. The Act also ensures that EPA or the states can recover costs from facility owners and operators for emergency response activities.

The bill does not tackle the current framework’s deficit of health hazard information for the over 60,000 chemicals “grandfathered” in by the passage of the Toxic Substances Control Act (TSCA) – a gap which has received significant public criticism in the wake of the Elk River spill. There has been no indication whether the TSCA reform bills currently pending in the Senate Environment and Public Works (EPW) Committee might be amended in response to the West Virginia spill.

The text of the legislation [PDF] and a one-page fact sheet [PDF] are available on Sen. Manchin’s website. The bill has been referred to the Senate EPW Committee; the Subcommittee on Water and Wildlife has scheduled a hearing for February 4 entitled, “Examination of the Safety and Security of Drinking Water Supplies Following the Central West Virginia Drinking Water Crisis.”

Changes for TSCA CBI claims on the horizon.

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According to the OMB’s regulatory agenda, EPA is planning to issue a proposed rule on confidential business information (CBI) claims under TSCA.  The proposed rule, which is expected to be released in spring 2014, would require companies making CBI claims to reassert and re-substantiate those claims on a periodic basis. EPA’s intent in proposing the new regulation is to increase transparency and the availability of environmental and health effects information for existing chemicals in the marketplace.

Details about the proposed rule are not yet available, but ChemicalWatch identified two critical issues that will need to be addressed: (1) whether CBI claims will be evaluated immediately and (2) whether individual chemicals must be disclosed. According to ChemicalWatch, stakeholders expect that CBI claims would stand for five years before review and renewal is required.

The future of CBI claims may be further complicated by current legislative efforts to reform TSCA. The Chemical Safety Improvement Act (CSIA), the TSCA modernization bill currently before the Senate Environment and Public Works Committee, contains complex CBI provisions which have been criticized by NGOs as overly burdensome for EPA’s resources.

It is also unclear how the new CBI rule would affect EPA’s voluntary CBI Declassification Challenge. In December, Bloomberg discussed the state of the CBI Declassification Challenge with Jim Jones, EPA’s Assistant Administrator for chemical safety and pollution prevention. Through this initiative, EPA has determined that over half of the 22,000 CBI claims the agency had thought were submitted by chemical companies were in fact never made. The inflated number was due to a newly identified problem in EPA’s tracking system. Of the remaining claims, 909 cases have been declassified, 3,349 claims have been assessed as valid, and EPA is still investigating the last 7,000 claims.

Industry optimistic on passing TSCA reform; House bill in the works.

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Although there has been no reported progress on Senate attempts to amend the Chemical Safety Improvement Act (CSIA) since last month’s update, the American Chemistry Council (ACC) weighed in last week with confidence that legislation to reform the United States’ outdated Toxic Substances Control Act (TSCA) could pass before the 2014 elections. ACC President Cal Dooley told a press briefing: “There continues to build momentum that could result in enactment of CSIA or some version thereof prior to the November elections.”

The ACC, the major trade group representing chemical and plastics companies, has supported the CSIA since its introduction in May. Despite bipartisan support and backing from industry and some environmental groups, the CSIA has been strongly criticized by key Democrats, including Senate Environment and Public Works Chairwoman Barbara Boxer (D-CA), and a large coalition of environmental and public health groups. In response, the CSIA is quietly being reworked in the Senate to achieve broader support.

The Energy and Commerce Committee has held four hearings on TSCA, but similar legislation has yet to be introduced in the House. However, Chemical Watch reported last week that industry representatives, sharing Dooley’s optimism, said that a House version of the bill is being prepared in the office of Rep. John Shimkus (R-IL). The House bill is expected to address objections raised by critics of the CSIA such as preemption of state laws and protections for especially vulnerable populations.

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

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

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

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

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

Congressional subcommittee reviews CSIA, EPA reveals its views.

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As we reported last week, the House Subcommittee on Environment and the Economy held a hearing to review the Chemical Safety Improvement Act (S. 1009) (CSIA) on November 13, 2013. At the hearing, EPA for the first time revealed its views on a number of CSIA provisions, although it has not developed a formal position on the Act.

Jim Jones, EPA assistant administrator of the Office of Chemical Safety and Pollution Prevention, was among the ten witnesses who testified at the hearing. During the questioning period of the hearing, Jones identified areas of CSIA that were improvements over TSCA, such as the requirement under Section 5 for an affirmative finding of safety by EPA on new chemical notifications, the ability to use order authority under Section 4 to obtain testing, and the ability to share confidential business information (CBI) with states.

Jones also identified issues that warranted further discussion, such as whether the requirement under Section 6 for extensive analysis of alternatives could lead to “paralysis by analysis,” whether judicial review of “low priority” decisions should be barred, and whether consideration of vulnerable populations under safety assessments should be extended to safety determinations and risk management actions. In addition, Jones called for a better balance of preemption issues, stronger deadlines, and clearer testing requirements under Section 4.

At the hearing, Senator Tom Udall (D-NM) said that he and Senator David Vitter (R-LA) were focused on three main issues: making sure EPA has the tools it needs to protect citizens and review the existing chemicals in commerce, preserving private rights of action against companies, and protecting the ability of states to safeguard their citizens. A day earlier, Sen. Vitter had made a renewed push for the CSIA’s passage, following a National Research Council (NRC) report that recommended improvements in the EPA’s assessment of inorganic arsenic. Sen. Vitter cited the report as a “prime example of why EPA’s risks assessments are flawed,” and called it “embarrassing” that EPA needed supervision in one of its key roles.

However, the overall tone at the hearing was very courteous among the Committee members and between the Chair and the witnesses. Sen. Vitter stressed his and Sen. Udall’s willingness to work with anyone committed to meaningful bipartisan reform, and most of those present at the hearing promised continued attempts to reach a consensus bill.

Congress making progress on amending TSCA reform bill.

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Congress continues to make progress in addressing concerns about the Chemical Safety Improvement Act (CSIA), with one congressional aide close to the process telling ChemicalWatch last week that “all the concerns and issues are solvable.” However, industry and NGO sources say the remaining issues that need to be dealt with make it unlikely that the TSCA reform bill will pass before the end of this year.

The CSIA is currently before the Senate Environment and Public Works (EPW) Committee, chaired by Barbara Boxer (D-CA). In August, Sen. Boxer dropped her opposition to the CSIA and promoted “fast-tracking” the compromise bill. However, Sen. Boxer has said that the bipartisan bill can move forward only if the Toxic Substances Control Act (TSCA) is amended to incorporate some “basic principles” such as specific protection for vulnerable populations, more definite time frames for EPA action, and holding all responsible parties accountable in cases of harm.  Most importantly, Sen. Boxer wants the bill’s language to ensure that state laws such as California’s Proposition 65 are not preempted.

Staff from the offices of Senators David Vitter (R-LA) and Tom Udall (D-NM), who co-sponsor the CSIA, have been working together on revisions to address concerns raised by Sen. Boxer and NGOs. As we previously reported, Sen. Vitter has said that the CSIA is not intended to eliminate private rights of action under state tort law, or remove the authority of any state to protect their water, air, or citizens.

The Congressional aide that spoke to ChemicalWatch said that whether the bill will be marked up this year depends largely on the EPW Committee’s other agenda items. Both industry and NGO sources do not expect passage of a TSCA reform bill this year, although prospects seem better for passage during the second year of the 113th Congress. Meanwhile, the House Subcommittee on Environment and the Economy, which held three informational hearings on TSCA this year, plans to hold its first hearing on the CSIA on November 13.