Flame Retardant Rule Do-Over Sought By EPA Granted in Federal Case

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On June 23, 2022, the Ninth Circuit Court of Appeals granted EPA a request for voluntary remand on a risk management rule for decabromodiphenyl ether (decaBDE).  This allows EPA to reconsider the rule at issue and make changes they deem necessary.  DecaBDE is a flame retardant added to the plastics used in many products on the market, such as televisions, computers, and upholstered articles. The January 2021 risk management rule prohibits manufacturing or importing decaBDE for all products after February 28, 2022, 60 days after the publication of the final rule.  The rule gives the hospital curtain industry 18 months to come into compliance, and 3 years for new aerospace vehicles. Replacement parts for motor and aerospace vehicles were granted an exclusion from the prohibition of manufacturing, processing, and distribution of decaBDE.

Petitioners opposing EPA in this matter are a coalition consisting of the Alaska Community Action on Toxics, Yurok Tribe, the Consumer Federation of America, Learning Disabilities Association of America, and the Center for Environmental Transformation.  the coalition, argues that EPA has had more than a year to review unidentified provisions of the final rule.  The coalition also asserts that EPA’s Final Rule is inadequate because it lacks 1) risk management measure to reduce exposure of decaBDE generally, 2) an exclusion for unrestricted recycling of plastics containing decaBDE, and 3) restrictions on releases of the chemical to the air, water, or land.

In 2021, the Ninth Circuit Court of Appeals had also granted EPA’s request to revisit two other chemical risk evaluations, including the one for hexabromocyclododecane (HBCD which is also a flame retardant).  Along with granting EPA’s request to reconsider the rule, the Ninth Circuit denied the petitioners request to impose deadlines on the reconsideration and potential amendment of the rule.

EPA orders e-commerce platform Wish to stop selling illegal disinfectants

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On July 5, 2022, EPA ordered the e-commerce platform Wish (ContextLogic Inc.) to stop selling a variety of unregistered disinfectants on its website, including disinfectant sprays, tablets, and air sterilization cards. EPA’s “Stop Sale” order prevents the company from selling unregistered disinfectants, which is a violation of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

Under FIFRA, all disinfectants must be registered with the Environmental Protection Agency which requires testing and determination that the product will not pose an unreasonable risk to human health when used according to the label directions. Violations of this nature have increased during the Covid-19 pandemic. Allowing products like this to stay on the market is particularly concerning as unregistered products make be harmful to human health and may not be effective against the spread of germs. The EPA Pacific Southwest Regional Administrator Martha Guzman commented on the Stop Sale order and the overall issue stating, “As our nation continues to grapple with Covid-19, today’s stop sale order is critical to protecting Americans from misleading and harmful claims from a large e-commerce platform. EPA remains vigilant and will keep removing these illegal disinfectants from circulation.”

Biological Opinion Proposes Malathion Mitigation Measures

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The U.S. Fish and Wildlife Service’s (FWS) nationwide final biological opinion (BiOp) for Malathion has prompted EPA to take steps to protect a number of endangered species that were identified as being threatened by the insecticide.  Malathion is an organophosphate insecticide use on a wide variety of food and non-food crops to kill insects systemically and on contact.  It is also used as a mosquito adulticide.  The BiOp was prompted after EPA released a biological evaluation on malathion in January 2017EPA’s evaluation found the insecticide was likely to affect both aquatic and terrestrial animals by inhibiting and enzyme necessary for synapse and neuromuscular function, leading to sublethal effects and mortality.

FWS collaborated with EPA and the malathion technical registrants to create the BiOp.  The BiOp also includes information provided by stakeholders, non-governmental organization, and members of the public who commented on EPA’s initial evaluation.  The BiOp states that malathion is likely to jeopardize 78 different species and destroy or adversely affect 23 habitats.  FWS proposed mitigation measures that would reduce the application rates, create no spray zones, and apply label changes for the pesticide users to follow.  One proposed mitigation measure for reducing the application rates would restrict application when rain is predicted and when certain types of crops are in bloom. The purpose of these mitigation measures is to minimize the likelihood of exposure to different species and reduce the affects to their development and habitats.

The BiOp states specific measures and mandatory label instructions will be available through EPA’s Bulletins Live! Two website, which provides information on endangered species, along with other relevant information.  Registrants were asked to submit amended labels to EPA by June 29, 2022.

State of Washington Regulates PFAS In Lieu of Cosmetics Ban

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A proposal in Washington state has stalled in the state House, after passing their Senate, that would have banned cosmetics that contain phthalates, formaldehyde, and PFAS.   The proposal, Senate Bill 5703, states that legislature finds certain chemicals in cosmetic products to be linked with various negative health effects, such as cancer, birth defects, and damage to the reproductive system. It further states that if enacted, it would have prohibited the sale and distribution of any cosmetics containing these and an additional 31 different substances such as ortho-phthalates, phenolic compounds, parabens, and lead compounds beginning January 1, 2025.

Although Senate Bill 5703 did not progress, the governor did sign into law House Bill 1694, which allows the state department of ecology to recognize and regulate consumer products containing PFAS.  The bill gives the ecology depart the authority to restrict PFAS product to any limit.   The state’s department of ecology is directed to determine an initial set of regulatory actions regarding PFAS consumer products by June 1, 2024 and must adopt rules to implement the initial set of determinations of regulatory actions by December 1, 2025.  Washington has also created a $266,00 fund for identifying and testing cosmetics for the purpose of determining which cosmetics present harmful effects.

Washington is not the first state to ban hazardous substances from cosmetics.  In 2020, California passed a ban on cosmetics containing harmful substances, identifying some PFAS chemicals.  Maryland took the same course of action in 2021.  In addition, several other states, such as New Hampshire, Minnesota, Michigan, and Maine have begun drafting legislature to restrict PFAS in cosmetics.

EPA Takes Steps to Regulate PFAS in Commerce

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On March 16, 2022, EPA announced that the Agency would be taking two steps to further regulate PFAS in commerce. First, EPA notified manufactures of high-density polyethylene (HDPE) that they are obligated to comply with existing TSCA requirements to prevent unintentional PFAS contamination. Second, EPA stated that the Agency will remove two types of PFAS from the Safer Chemical Ingredients List (SCIL).

EPA provided notice that manufacturers, importers, processors, distributors, users, and other entities who engage in the disposal of HDPE containers and other plastics containing fluorinated polyolefins must adhere to the significant new use notice requirement under TSCA. This notice was provided via an open letter to the HDPE industry that was initially posted on March 16, 2022, and then reissued with minor revisions on March 24, 2022.  Here, EPA reminded the HDPE industry that the process of fluorination can lead to the unintentional manufacture of PFAS (e.g., byproducts).  Furthermore, EPA stated that the manufacture of certain PFAS, including long-chain perfluoroalkyl carboxylates, via fluorination of polyolefins is considered a significant new use under TSCA because the byproducts exemption provided at 40 CFR § 721.45(e) does not apply. Specifically, this exemption does not apply because these PFAS are not “used only by public or private organizations that (1) burn it as a fuel, (2) dispose of it as a waste, including in a landfill or for enriching soil, or (3) extract component chemical substances from it for commercial purposes.” Therefore, a significant new use notification (SNUN) must be submitted to EPA at least 90 days before initiating such use so that the Agency can review the potential risks of this new use before industry can place the product into the stream of commerce.

The two PFAS that EPA will be removing from the SCIL, CASRN 449177-94-0 and 452080-67-0, were initially placed on the list in 2012.  In October of 2021, EPA began revisiting its previous PFAS endorsements pursuant the PFAS Strategic Roadmap. These two chemicals were subsequently removed from the list based on “a growing understanding of the toxicological profiles for certain PFAS, and incomplete information on the potential health and environmental effects of these substances.” Henceforth, these products that contain these PFAS will not be eligible Safer Choice certification. In addition, existing products containing these substances, that have received the Safer Choice certification, must be reformulated to maintain said certification.

EPA Releases Draft Revised Risk Determination for PV29

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On March 7, 2022, EPA released a draft revision to the risk determination for C.I. Pigment Violet 29 (PV29).  Manufacturers and commercial clients use PV 29 as a weather fast and heat stable pigment in paints and coatings.  These paints and coatings are primarily used in automobiles and industrial carpeting.  The draft revision comes as part of the path forward EPA released in June 2021 for the first 10 risk evaluations under TSCA.

Risk evaluations are conducted under TSCA section 6.  TSCA requires the Agency to conduct risk evaluations to determine whether high priority substances present an unreasonable risk of injury to health or the environment.  EPA has determined that PV29, presents an unreasonable risk of injury to health.  This determination regarding PV29, evaluated the substance as a “whole chemical,” replaces previous determinations which were based on evaluations of individual conditions of use.

The draft revision risk determination for PV29 does not include an assumption of personal protective equipment (PPE) for workers. Instead, EPA stated that the Agency would consider the use of PPE, and any other potential mitigating factors, during its determination of risk management measures.  Note that the January 2021 risk evaluation for PV29found an unreasonable risk to workers, even when proper use of PPE is assumed.  The January 2021 risk evaluation identified 14 categories of use and found unreasonable risk exists in 10 of those categories including:

  • manufacture,
  • processing,
  • paints/coatings and merchant ink for commercial printing categories of Industrial/commercial use, and
  • disposal.

The draft revision states these same conditions of use will continue to drive EPA’s determination of unreasonable risk for PV 29.  The categories of use that were not found to present an unreasonable risk are: distribution in commerce, industrial/commercial use in plastic and rubber products, and consumer uses.

EPA Releases Final Scope Document for Manufacturer-Requested Risk Evaluation of D4

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On March 7, 2022, EPA published the final scope of the risk evaluation for octamethylcyclotetra-siloxane (D4). This risk evaluation may affect producers of goods comprised of and/or utilizing the following: adhesives, sealants, synthetic rubber, electrical equipment, appliances, paint, ink/toner, aircraft maintenance components, automotive care components, cleaning products, fabrics/textile products. This is not intended to serve as an exhaustive list. The publication of this risk evaluation originated from a request made by the American Chemistry Council’s Silicones Environmental, Health, and Safety Center (SEHSC). The scoping document addresses conditions of use, exposures, hazards, and potentially exposed or susceptible subpopulations.

Conditions of Use

Conditions of use for D4 risk evaluation can be sub-divided into the following life cycle stages: manufacturing, processing, distribution in commerce, industrial use, commercial uses, consumer uses, and disposal. EPA’s evaluation will address each of the aforementioned life cycle stages. Notably, processing is the most nuanced of these stages. Specifically, the processing stage is comprised of three subcategories: processing as a reactant; incorporation into formulation, mixture, or reaction product; and repackaging.

Exposures

In the forthcoming risk evaluation, EPA will evaluate human and environmental exposures as well as releases into the environment resulting from these conditions of use identified in the scoping document. The evaluation will contemplate the physical and chemical properties of D4; environmental fate and transport processes, exposure pathways, and potential human and environmental receptors; releases to the environment; environmental exposures (both aquatic and terrestrial); occupational exposures; consumer exposures; and general population exposures.

Hazards

Regarding environmental hazards, EPA will assess the following potential hazard effects of D4 to aquatic and terrestrial organisms including: absorption, distribution, metabolism, and excretion (collectively referred to as “ADME”), developmental, gastrointestinal, mortality, neurological, nutritional, metabolic, reproductive, and respiratory. The scoping document notes that D4 can degrade into dimethylsilanediol (DMSD) under certain environmental conditions. Accordingly, EPA has indicated that it may factor toxicity information regarding DMSD into its risk evaluation.

With respect to human health hazards, EPA intends to examine the relation of D4 exposure to the following: ADME, cancer, endocrine, gastrointestinal, hematological, immunology, hepatic, mortality, neurological, nutritional/metabolic, ocular/sensory, renal, reproductive, developmental, respiratory, and skin/connective tissue. The scope of EPA’s assessment of the human health hazards of D4 may also contemplate hazards associated with exposure to DMSD as mentioned above.

Potentially Exposed or Susceptible Subpopulations (PESS)

In accordance with the requirement of TSCA section 6, the following groups will be considered potentially exposed or susceptible subpopulations in the D4 risk evaluation: children, women who may become pregnant, workers, occupational non-users (ONU), consumers, bystanders, fence line communities, and indigenous and native populations. Environmental justice considerations will also be factored into the PESS analysis. These considerations will follow the best practices discussed within EPA’s Technical Guidance for Assessing Environmental Justice in Regulatory Analysis.

EPA Releases 2020 TRI National Analysis

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In March 2022, EPA released the 2020 Toxics Release Inventory (TRI) National Analysis, showing a decline of 10% for environmental releases of TRI chemicals from the previous year.  EPA states that part of the reason for making the information public is to incentivize companies to reduce pollution.  EPA is also offering $23 million in grants to states and Tribes for developing and providing businesses with aid in adopting pollution prevention practices.

The National Analysis now includes a map information for individuals to display international transfers of chemical waste by different facilities. This information includes the facility that shipped the waste, country of destination, and how the country managed the waste.  Along with these data, users can view greenhouse gas emissions for electric utilities, chemical manufacturing, cement manufacturing, and other industrial sectors.  The mapping tool also provides data for local communities within each state.

Facilities in the 2020 TRI National Analysis used recycling, energy recovery, and treatment as methods to prevent the release of more than 89 percent of the chemical-containing waste that they created and managed. Air pollution was also decreased by 52 million pounds from YEAR.  EPA encourages facilities to use the Agency’s Pollution Prevention Search Tool to discover additional methods of reducing pollution.

The 2020 National Defense Authorization Act added 172 PFAS to the list of TRI reportable substances.  The 2020 National Analysis was the first to cover reporting of these chemicals.  Nine thousand pounds of the 800,000 pounds of PFAS that were produced in 2020 were reported as releases, with most of the releases coming from the chemical manufacturing sector.  EPA continues to focus on PFAS by contacting facilities that may have reporting errors and those that did not report but were expected to. EPA plans to propose a rulemaking in the summer of 2022 to remove the de minimis exemption for PFAS, which allows facilities to disregard certain minimal concentrations of chemicals. EPA expects the removal of the de minimis exemption will result in more data on releases in future TRI reporting for an expanded perspective on the releases these substances.

PIP (3:1) Compliance Date Extended to October 31, 2024

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On January 6, 2021, EPA issued a rule limiting manufacturing, importing, processing, and distribution of products containing phenol, isopropylated phosphate (3:1) (PIP (3:1)).  That rule was scheduled to take effect on February 5, 2021, with a March 8, 2021, compliance date.  After this date, companies would be prohibited from processing and distributing PIP (3:1) and PIP (3:1)-containing products unless there was an applicable exclusion.  Furthermore, after the compliance date, the rule prohibited the release of PIP (3:1) into water during manufacturing, processing, and distribution.  This final rule also required commercial users to follow existing regulations and best practices to prevent the release of PIP (3:1) and products containing PIP (3:1) into water.  On March 8, 2022, the effective compliance date of the rule was extended to October 3, 2024.

The March 2022 extension applies to the following consumer and commercial goods: cellular telephones, laptop computers, electronic devices, and industrial and commercial equipment used in various sectors including transportation, life sciences, and semiconductor production.  Notably, this is not an exhaustive list of the goods affected by the rule.  This extension follows the publication of the initial rule in January 2021, no action assurance issued in March 2021, and the September 2021 extension which expired on March 8, 2022.  These milestones are discussed in greater detail below.

In January 2021, EPA released risk management rules under the Toxic Substances Control Act (TSCA) intended to mitigate exposure to five chemicals that are persistent, bioaccumulative and toxic (PBT).  The five chemicals listed under this rule are decabromodiphenyl ether (DecaBDE); phenol, isopropylated phosphate (3:1) (PIP (3:1)); 2,4,6-tris (tert-butyl) phenol (2, 4, 6-TTBP); hexachlorobutadiene (HCBD); and pentachlorothiophenol (PCTP).  The rules were designed to either limit or prohibit manufacturing, importing, processing, and distributing the aforementioned chemicals.  Following the publication of these rules, EPA received numerous comments from manufacturers and processors of PIP (3:1) asserting that the March 8, 2021, compliance date did not provide stakeholders with enough time to find viable chemical substitutes.  Consequently, on March 8, 2021, EPA provided a no action assurance letter on enforcement of the rule.  The no action assurance expired on September 4, 2021.  Subsequently, on September 17, 2021, EPA issued a short-term extension of specific compliance deadlines for the processing and distribution of PIP (3:1) and articles containing PIP (3:1) to March 8, 2022. On March 8, 2022, a further extension was granted, which moved the compliance deadline to October 31, 2024.

Chemours Securities Fraud Litigation to Continue

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The New York State Teachers’ Retirement System and others (Teachers) will be able to continue pursuing claims that Chemours kept investors in the dark about the billions in potential environmental liabilities.  On February 24th, a federal judge in Delaware ruled that Teachers’ claims of securities fraud plead sufficient facts to survive Chemours’ motion to dismiss.  Specifically, plaintiffs allege that Chemours financial statements “dramatically mischaracterized Chemours’ true financial condition and vastly understated Chemours’ liabilities from decades of environmental pollution.”

The court found that starting in February 2017, Chemours disclosed that “higher clean-up costs that might result ‘under adverse changes in circumstances, although deemed remote.’ … once Chemours chose to make that disclosure-even if not required by [Generally Accepted Accounting Practices] GAAP or otherwise-it had to speak truthfully … [and that] a reasonable investor could have plausibly inferred from the language Defendants used to ‘provide’ in the challenged SEC reports Chemours’ ‘higher clean-up costs’ that Chemours was disclosing its maximum potential remediation liabilities.”  The court explained that “the question then is whether Plaintiff has alleged in the Complaint facts sufficient to plausibly imply that Defendants did not in fact believe that Chemours’ s environmental remediation liabilities were capped at the sums disclosed in the SEC reports.”

Teachers drew on two sources to supports their claim that Chemours did not in fact believe that its environmental remediation liabilities were capped at the sums disclosed in the SEC reports.  First, Teachers argued that Chemours “specifically itemized” $2.5 billion of inherited liabilities as of the time it was spun-off from DuPont, in a complaint against DuPont in a 2019 Delaware Chancery Court Complaint – in that unrelated case, Chemours asserted that “DuPont violated New Jersey law by spinning off Chemours on the basis of underestimated environmental liabilities without providing the State with the ‘financial assurance necessary to ensure’ that the necessary clean-up can be done.”  Second, Teachers asserted that a 2018 internal evaluation of total environmental remediation costs company-wide identified costs of more than $2 billion.  The court held that Chemours’s allegations in the Chancery Court Complaint do not plausibly imply that the company made false representations about its maximum potential environmental remediation liabilities in the challenged SEC reports.  However, it also found that “a rational juror could plausibly infer from the [internal evaluation] that … Defendants believed that Chemours’ s environmental remediation liabilities were approximately two billion dollars,” a significantly greater amount than Chemours had said its liabilities were; that is, that Chemours had made false statements about liability.

Chemours argued that “even if Plaintiff had identified any error in Chemours’ environmental liability disclosures, they would nevertheless be inactionable because they were accurate statements of opinion.” However, the court held that “statements of opinion … are ‘actionable under the securities laws if they are not honestly believed and lack a reasonable basis.’”  In addition, the court explained that Teachers’ allegations plausibly implied that Chemours did not consider the maximum remediation liability disclosures accurate, and therefore, those disclosures could be actionable opinions.

The court also held the Teachers had adequately pleaded its claims against Chemours’ President and CEO and the company’s Senior Vice President and COO (previously its CFO) for the two to continue as defendants in the case.