New Jersey Reaches Historic Settlement with Solvay Polymers over PFAS Contamination

On June 28, 2023, New Jersey’s Department of Environmental Protection (NJDEP) announced a proposed settlement with Solvay Specialty Polymers USA, LLC (“Solvay”) over the company’s discharge of PFAS and other hazardous substances from its West Deptford facility.  According to a press release from New Jersey’s Office of Attorney General (NJOAG), the $392.7 million proposed settlement is the “largest single-site natural resource damages and remediation case in New Jersey history.”

In the 2020 complaint that led to the proposed settlement, NJDEP alleged that PFAS discharges and emissions from Solvay’s West Deptford facility had caused “widespread soil, sediment, groundwater, and surface water contamination.”  In particular, NJDEP asserted that levels of PFNA­—a type of PFAS—detected in surface water and public drinking water near the facility were higher than levels reported “anywhere else in the world.”  According to NJDEP, Solvay and the facility’s previous owner knew or should have known about the dangers posed by PFAS but “failed to disclose the impact of their use and releases of PFAS into the environment to the Department and the surrounding community.”

Under the terms of the proposed settlement, Solvay would be required to reimburse NJDEP for previous remediation efforts, pay claims for natural resource damages, and fund additional remedial activities to be undertaken by NJDEP and the company.  Solvay would be responsible for identifying and remediating contaminated natural resources and wells and providing regular reports of its remedial activities to NJDEP.  Funds allocated to NJDEP would primarily be used to address PFAS in drinking water systems.

The settlement comes after a 2019 NJDEP directive for Solvay and four other chemical manufacturers responsible for “significant contamination of New Jersey’s natural resources” to provide financial compensation for PFAS-related contamination and information on their PFAS use and emissions.  NJDEP’s 2020 complaint argued that Solvay did not fully comply with the directive.  According to NJOAG, Solvay is the first company identified by the directive to reach a proposed settlement with NJDEP.

A formal notice of the proposed settlement was published in the New Jersey Register on August 7, 2023.  Public comments on the proposal will be accepted through October 6, 2023.

EPA Finds TCE as a Whole Chemical Substance an Unreasonable Risk to Human Health

Earlier this year, EPA announced the final revision to the risk determination for trichloroethylene (TCE) risk evaluation issued under the Toxic Substances Control Act (“TSCA”). EPA found that TCE presents unreasonable risks to the health of workers, occupational non-users, consumers, and bystanders. The risks identified include adverse human health effects unrelated to cancer, such as neurotoxicity and liver effects, from acute and chronic inhalation and dermal exposures to TCE and risks for cancer from chronic inhalation and dermal exposures to TCE. The revised risk determination supersedes the conditions of use (“COU”) specific “no unreasonable risk” determinations that the EPA previously issued in its 2020 TCE risk evaluation.

TCE is a volatile organic compound (“VOC”) used mostly in industrial and commercial processes. Consumer uses include cleaning and furniture care products, arts and crafts, spray coatings, and automotive care products like brake cleaners. EPA determined that 52 of the 54 COUs evaluated drive the unreasonable risk determination.

EPA states that it used the whole chemical risk determination approach for TCE because there are benchmark exceedances for multiple COUs spanning across most aspects of TCE’s life cycle, from manufacturing (including import), processing, commercial use, consumer use, and disposal for health of workers occupational non-users (workers nearby but not in direct contact with this chemical), consumers, and bystanders. EPA holds that this approach is appropriate because the health effects associated with TCE exposures are “severe and potentially irreversible,” including developmental toxicity, reproductive toxicity, liver toxicity, kidney toxicity, immunotoxicity, neurotoxicity, and cancer. EPA notes that the revised risk determination for TCE does not reflect an assumption that workers always and appropriately wear personal protective equipment (PPE). EPA states that as it moves forward with a risk management rulemaking for TCE, it will “strive for consistency with existing OSHA requirements or best industry practices when those measures would address the identified unreasonable risk.

Additionally, EPA stated it is conducting a screening-level approach to assess potential risks from the air and water pathways for several of the first 10 risk evaluation chemicals, including TCE. The goal of the screening approach is to evaluate the surface water, drinking water, and ambient air pathways for TCE that were excluded from the 2020 risk evaluation and to determine if there are risks that were unaccounted for in that risk evaluation. EPA expects to describe its findings regarding the chemical-specific application of this screening-level approach in its proposed risk management rule for TCE.

Hearing Announced on EPA’s Intent to Cancel Chlorpyrifos Pesticide Registrations

On June 21, 2023, EPA announced that a public hearing will be held in response to objections and hearing requests following EPA’s issuance of a Notice of Intent to Cancel (“NOIC”) pesticide registrations for three products containing chlorpyrifos. The hearing will begin at 9 a.m. on January 8, 2024, and will continue as necessary through January 11, 2024.

The objections and hearing requests following the NOIC came from a collection of grower groups and a producer of chlorpyrifos products. The petitioners are currently challenging EPA’s 2021 final rule, which revoked all tolerances for chlorpyrifos, in the Eighth Circuit case Red River Valley Sugarbeet Growers Association et al. v. Regan. The petitioners argue that EPA should stay or withdraw the NOIC until the pending case is decided.

EPA’s NOIC was the result of over a decade of efforts to ban chlorpyrifos use. In 2007, two non-profit organizations filed a petition requesting that EPA revoke all tolerances and cancel all registrations for chlorpyrifos, pointing to studies showing neurotoxic, developmental, endocrinal, and carcinogenic effects in humans and animals as a result of exposure. EPA did not take final action on the petition until it denied the petition in 2017, concluding that the science behind the effects of exposure remained unresolved.  In 2021, the Ninth Circuit vacated EPA’s decision in League of United Latin Am. Citizens v. Regan. The court held that EPA had abdicated its statutory duty under the Federal Food, Drug, and Cosmetic Act by failing to update the tolerances for chlorpyrifos despite its inability to conclude, to the statutory standard of reasonable certainty, that present tolerances caused no harm. The court ordered EPA to grant the 2007 petition and modify or revoke the tolerances accordingly. EPA opted to revoke all tolerances in the final rule.

In the ongoing case, Red River Valley Sugarbeet Growers Association et al. v. Regan, the grower groups and the chlorpyrifos producer argue that the final rule was arbitrary and capricious due to EPA’s disregard for safe chlorpyrifos uses. The petitioners observe that shortly before the final rule was published, EPA completed a human health assessment that found that chlorpyrifos use on eleven crops in select regions was safe. By refusing to act on its own evidence, the petitioners assert that EPA disregarded its statutory mandate to review the safety of tolerances using current science.

According to EPA, chlorpyrifos was registered for use in the U.S. beginning in 1965. At the time of the final rule, chlorpyrifos was registered for use on fruit and nut trees, many types of fruits and vegetables, and grain crops.

FTC Finalizes Made in the USA Enforcement Action Against Motocross Parts Maker

Last month the Federal Trade Commission (“FTC”) took enforcement action against an ATV and motocross parts maker, Cycra, and one of its officers for falsely claiming the company’s products were manufactured in the United States. FTC’s complaint alleged Cycra made false or misleading Made in the United States (MUSA”) advertising claims in violation of the Made in USA Labeling Rule. The rule strictly prohibits marketers from labeling products as “Made in USA” unless (1) the final assembly or processing of the product occurs in the United States; (2) all significant processing that goes into the product occurs in the United States; and (3) all or virtually all ingredients or components of the product are made and sourced in the United States.

Between 2019 and 2022, Cycra advertised and sold motocross and ATV products, which it claimed were all or virtually all made in the United States. More than 150 of the company’s products displayed labels containing the wording “Made in the USA” (what FTC refers to as a “MUSA Label”) along with images of American flags. Additionally, the company’s website and social media made numerous Made in the USA claims, including that products were “[p]roudly designed, developed and manufactured in Lexington, North Carolina” and “[p]roudly made in the USA.”

Cyrca products were, in actuality, not being produced in the United States. Cycra imported at least 30 shipments of parts or accessories from Asia and Europe and additionally imported shipments of finished products already packaged, some already including MUSA Labels.

FTC’s order details a variety of requirements limiting the claims Cycra can make regarding its products going forward. First, there will be restrictions on unqualified claims; the company will be prohibited from making unqualified MUSA claims for any product unless it can show that the final assembly and all significant processing of the product take place in the United States and that all, or virtually all, ingredients or components of the product are made and sourced in the United States. Additionally, FTC has ordered requirements for qualified claims, requiring that for any qualified MUSA claims, there must be clear disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing. Lastly, FTC has ordered requirements for assembly claims which require the company to ensure that when a product is claiming to be assembled in the United States, its principal assembly takes place in the United States and that those assembly operations are substantial.

The order also included a monetary judgment of $872,577. The monetary judgment has been partially suspended based on the company’s inability to pay.  However,  the company has been required to pay $221,358.66 of the penalty.

Microplastics and PPD Derivatives Proposed for Regulation in California

California state regulators recently announced plans to potentially regulate two additional groups of chemicals under the state’s Safer Consumer Products Program (“SCP”). The California Department of Toxic Substances Control (“DTSC”) has proposed adding microplastics and para-Phenylenediamine (“PPD”) derivatives to its Candidate Chemicals List (“CCL”) due to their reported impacts on human health and the environment. Regulators are beginning a public comment process in the hopes of gathering valuable input and feedback from stakeholders to help inform a potential regulatory proposal.

Scientific evidence has been growing regarding the harmful effects of microplastics on both human health and the environment. These minuscule plastic particles, released directly or through the breakdown of larger plastic items, persist and spread throughout the ecosystem. DTSC detailed this issue and identified products that release microplastics into the environment as one of their top five policy priorities in the 2021-2023 Priority Product Work Plan.

PPD derivatives, a family of chemicals widely used in various industrial applications, have also come under scrutiny. Specifically, 6PPD, a member of the PPD derivative family, is extensively used in motor vehicle tires to prevent degradation over time. DTSC is finalizing regulations to include motor vehicle tires containing 6PPD on its Priority Product List. This regulation will require tire manufacturers to identify and assess potential alternatives to 6PPD that ensure tire safety and performance. By adding the entire PPD derivative class to the CCL, manufacturers will be prompted to thoroughly evaluate the tradeoffs involved before switching from 6PPD to another PPD derivative.

Adding chemicals to the CCL does not automatically impose new requirements. Instead, it enables the SCP Program to select consumer products containing these chemicals for evaluation and potential regulation as Chemicals of Concern in Priority Products.

Public workshops are scheduled for June and July, providing an opportunity for interested parties to contribute to the discussion and share their expertise. Information on the upcoming workshops can be found here.

Oral Arguments in Monsanto “Roundup” Case

On June 13, 2023, the full Eleventh Circuit heard oral arguments in the case Carson v. Monsanto Co.  The case hinges on whether a Georgia law that requires Monsanto to warn consumers about risks the company knows about or has reason to know about is preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

The appellant, John D. Carson Sr., alleges that he developed cancer due to regular use of Roundup, a glyphosate-based pesticide manufactured by Monsanto. Carson claims that Monsanto “has known for decades” that Roundup use can cause cancer and failed to label their products in a way that notified consumers of this risk as required by Georgia law.

FIFRA requires pesticide manufacturers to include warning labels on products that adequately protect consumer health, but EPA has concluded that glyphosate is “not likely to be carcinogenic” to humans.  FIFRA prohibits state labelling laws that are “in addition to or different from” FIFRA requirements (7 U.S.C. § 136v(b)). Monsanto argues that this language expressly preempts the Georgia law, while Carson contends that the Georgia law merely “parallels” FIFRA’s provisions. Carson cites Bates v. Dow AgroSciences LLC, interpreting the ruling to mean that claims “equivalent to” or narrower than FIFRA provisions are not preempted (544 U.S. 431, 447 (2005)).

Also at issue in the case is the question of whether EPA’s actions with regard to Roundup constitute “force of law.” Carson asserts that EPA’s registration of Roundup does not have the force of law necessary to preempt Georgia law.  Monsanto argues that no force-of-law analysis is required because “EPA determinations define the scope of preemption as a matter of statutory construction,” but also argues that EPA’s actions constitute force of law even if such an analysis is undertaken.

During oral arguments the court posed questions to Carson’s attorney regarding whether a force-of-law analysis is necessary and questioned the attorney representing Monsanto on whether the grounds for an impossibility preemption were met. In addition, both attorneys were asked whether the appeal was “collusive” due to the type of settlement the parties reached in the case.

Carson’s suit was initially dismissed by a Georgia court, which held that FIFRA expressly preempted the Georgia law. In July 2022, it was reinstated by a three-judge Eleventh Circuit panel which ruled in favor of Carson. The panel reached the same result in a new opinion in October 2022. Last December, the full Eleventh Circuit vacated the opinion, ordering that the case be heard en banc.

Delta Airlines Sued for Greenwashing Making Carbon Neutral Claims

Delta Airlines is the latest company to face a greenwashing class action lawsuit. The complaint alleges that the company has misled its customers by making carbon neutral claims. According to the complaint, Delta advertises that it has been carbon-neutral since March 2020; however, because Delta is using carbon offsets to achieve this, the complaint alleges that the company is making representations that are “manifestly and provably false.”

While on paper the purchase of carbon offsets should account for Delta’s global emissions, the complaint claims that issues exist with the accuracy and reliability of offsets issued by a voluntary carbon offset market. The complaint alleges that the voluntary offset market is comprised of “a loose arrangement of companies and NGOs that facilitate investment in green projects such as renewable energy and prevention of deforestation,” but that these carbon neutral projects have foundational issues such as inaccurate and speculative accounting of true carbon offsets, and the fact that many of these projects were scheduled and would have occurred regardless of participating carbon offset programs. Therefore, Delta’s claims “hinge[] on an underlying set of representations” that Plaintiff asserts are “manifestly and provably false.”

The complaint purports that “both scientists and government regulators have specifically identified [Delta] as one of many companies who have grossly misstated the actual carbon reduction produced by their carbon offset portfolio.” If these allegations are true, this would mean that, in reality, Delta is not fully carbon neutral, as the offsets it purchases are not accurately measured.

The Plaintiff alleges the carbon neutral claims are false and misleading and that consumers would not have purchased tickets on Delta flights at all or would have paid substantially less for them had they been aware the claims were false. This assertion is consistent with the increasing trend of consumers paying market premiums for greener products and services, i.e., products and services that have a smaller carbon footprint than competitors or no carbon footprint.

This complaint was brought pursuant to California’s Consumers Legal Remedies Act and California’s False Advertising, Business and Professions Code, which prohibits improper representations regarding the sale and source, sponsorship, approval, or certification of the services sold.

TSCA Enforcement Action Taken Over Failure to Comply with PFAS SNUR

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

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

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

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

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

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

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

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

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

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

Case Update

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

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

Cosmetic Industry Increasing Supply Chain Ingredient Transparency

The United States Congress has introduced a bill (H.R. 3622, The Cosmetic Supply Chain Transparency Act of 2023) to amend the Federal Food, Drug, and Cosmetic Act to increase transparency regarding the ingredients used in cosmetic and personal care products. Currently, cosmetic brand owners are not entitled to reliable and accurate information from their suppliers, formulating laboratories,  or the companies that package their products. Access to composition information and cooperation in gaining such information from these parties varies. However, despite limited access to supply chain data, brand owners are ultimately liable for the safety of the final products. Subsequently, brand owners are open to FDA enforcement actions, civil lawsuits, and marketplace reputational damage if safety issues with their products arise.

If passed, the bill will require upstream providers — from fragrance houses and formulating laboratories to contract manufacturers and suppliers of  raw materials and finished products — to  provide cosmetic companies with the following information upon request:

  • Full ingredient disclosure, including ingredient names and chemical identity numbers (Chemical Abstract Service or CAS)
  • Toxicity and safety data for each chemical ingredient
  • Certificate of analysis for raw materials
  • Environmental exposure and fate information
  • Heavy metal testing results
  • Safety data sheets
  • Manufacturing flow charts
  • Composition statements
  • Fragrance allergen statements
  • International Fragrance Association (IFRA) Standards Conformity Certificates

The abovementioned parties must furnish this information to the requesting cosmetic company within 90 days of a data request, or they will be subject to penalties of up to $10,000 per day until the request is completed.

EPA Proposes Ban on Perchloroethylene

Using its authority under the Toxic Substances Control Act (TSCA), EPA has released a proposed rule to ban the use of perchloroethylene (“PCE”) for most commercial and industrial uses. (PCE is also referred to as perc and tetrachloroethylene.) PCE is used in a number of applications and industries, including petroleum manufacturing, aerosol degreasing, and dry cleaning.

The proposed rule follows the Agency’s assessment of the risk to human health presented by the substance. EPA conducted a risk evaluation of the substance under TSCA section 6(b). That assessment determined that PCE, as a whole chemical substance, presents an unreasonable risk of injury to human health as PCE exposure causes a variety of adverse health effects. PCE is a known carcinogen; it also causes neurotoxicity, including impaired visual and cognitive function. Various other health effects were noted by the risk evaluation, including central nervous system depression, kidney and liver effects, immune system toxicity, and developmental toxicity.

Under TSCA section 6(a), EPA is required to address, by rule, any unreasonable risk of injury to health or the environment found during a TSCA risk evaluation. Section 6(a) also requires the Agency to identify actions necessary to ensure the chemical does not continue presenting an unreasonable risk by either a) implementing “a requirement [either] prohibiting or otherwise restricting the manufacturing, processing, or distribution in commerce of such substance or mixture,” or b) “limiting the amount of such substance or mixture which may be manufactured, processed, or distributed in commerce.” To meet these requirements, EPA is proposing to prohibit the manufacture, import, processing, and distribution of PCE for a number of commercial and consumer uses, such as in dry cleaning, spot-cleaning operations and degreasing. The prohibition allows a 10-year phaseout period.

The Agency will still permit limited use of PCE for some uses, particularly those which help its efforts in addressing climate-damaging hydrofluorocarbons (an initiative happening under the American Innovation and Manufacturing Act of 2020). PCE will also be used in uses that are important for national security applications or to meet other critical national needs. In these cases, EPA would require the implementation of a PCE workplace chemical protection program. The chemical protection program would include requirements to meet an inhalation exposure concentration limit and prevent direct dermal contact. The Agency has also put forward prescriptive requirements for laboratory use, recordkeeping, and downstream notification.

EPA will permit certain time-limited exemptions from the ban for certain critical or essential emergency uses of PCE when no alternative is technically or economically feasible safer alternative is available.