Nonprofit Group Wields Lawsuits to Spur Chemical Rule Compliance

Threatening chemical manufacturers with lawsuits is proving a successful strategy for one environmental group seeking to persuade companies to comply with an EPA chemical reporting requirement.

The nonprofit Center for Environmental Health (CEH) will notify Cornerstone Chemical Co. LLC Monday that the group is prepared to sue, because the company allegedly failed to report to the Environmental Protection Agency its importation of millions of pounds of chemicals into the US. If true, that would violate the EPA’s Chemical Data Reporting (CDR) rule.

The notice is the latest example of a strategy the group has used increasingly since last year. The center compares publicly available chemical data companies provide the EPA with chemical import data available from other sources. It uses discrepancies to assist the EPA by helping hold companies accountable for the potential harm of the chemicals they produce or import.

First issued in 1986 as the Inventory Update Rule, the CDR regulation requires chemical manufacturers to submit import and manufacture volume, worker exposure, and other information about their chemicals to the EPA every four years.

The data the EPA receives is the bedrock for decisions it makes that protect workers, consumers, and the general public from toxic chemicals, said Kizzy Charles-Guzman, CEH’s chief executive officer.

“It gives the EPA a complete picture of the chemicals being made and imported, their quantities, the companies that are engaged in these activities, and their location,” said Robert Sussman, an attorney in private practice who represents the center.

CDR information also helps the EPA know how chemicals are being used, said Sussman, who served as a senior chemical policy official during the Clinton and Obama administrations.

This data began to play a more important role in EPA’s implementation of the Toxic Substances Control Act (TSCA) in 2016. Congress amended the law and, for the first time, required the agency to routinely evaluate the safety of chemicals in commerce and restrict those posing too much risk to people’s health or the environment.

High production volumes, large numbers of potentially exposed workers, and the use of a chemical in products designed for consumers or children are factors that the agency considers as it evaluates risks.

Law Lets Citizens Sue

TSCA allows citizens to bring civil suits against chemical manufacturers or other parties alleged to be violating the law—provided they give the EPA and alleged violators 60 days notice.

Citizens bringing these lawsuits must file them in the US district court where the plaintiff resides or where the defendant’s principal place of business is located. Lawsuits can try to force compliance; they can’t seek civil penalties or damages for asserted personal injuries.

The center occasionally used TSCA’s citizens lawsuit authority years ago, but in 2024 it launched an initiative to help enforce the CDR, said Charles-Guzman.

The center carefully examines chemical import data before choosing possible companies to pursue, Sussman said. “We only file a notice of intent to sue when we feel we have a strong case.”

Criteria used to select specific companies includes the toxicity of the chemical that allegedly wasn’t reported, the volume, and the surrounding community into which the chemical was imported, said Charles-Guzman.

Since last year, 13 chemical manufacturers, importers, and distributors including Entegris Inc.; Gujarat Fluorochemicals Ltd.; Skyhawk Chemicals Inc., and the Wego Chemical Group have agreed to settle, according to documents and information the center shared with Bloomberg Law. The companies agreed to settle without admitting any wrongdoing.

That’s a success rate of 60% or higher, Sussman said.

Driving Change

Some other companies choose to submit mandated information to the EPA without settling with the center, said Charles-Guzman. That’s fine, she added.

“They don’t have to settle with us,” she said. “They just have to do the right thing.”

Yet, settlements benefit companies, because CEH typically requests they audit their production and import records and work with the center before providing the EPA required data, Sussman said.

The conversation with the center typically reveals a company didn’t have its house in order all the time, just like people, said Charles-Guzman. “It’s not maliciousness.”

The goal is to drive systemic change that will help the company improve future reports, she said. “If they implement a system that improves reporting, we see that as a big win.”

Companies do, however, typically agree to pay several thousand dollars to the center, according to language in settlements viewed by Bloomberg Law.

That’s not a “bounty,” Charles-Guzman said. CEH is funded largely through foundations and private donations, she said. The money from settlements helps cover the time, staff, and other costs spent investigating the alleged violation and working with the company to correct that, she said.

Millions of Pounds

Beyond hoping to improve companies’ reporting systems, CEH’s 13 settlements have resulted in an estimated 284 million pounds of chemicals being reported to the EPA, according to the center.

Hazards those chemicals present include being carcinogenic, corrosive, and otherwise toxic.

CEH’s Notice of Intent to sue Cornerstone states that the company in 2016 and 2019 imported a combined total of more than 64 million pounds of ammonia, melamine, and sulfuric acid into the US, but it failed to report those imports to the EPA. Those chemicals’ hazardous characteristics include being corrosive and harming the eyes, lungs, and kidneys.

“Cornerstone’s imports of these substances far exceed the 25,000-pound per year threshold for reporting under the CDR rule,” according to the intent to sue notice. “Compliance with the CDR rule is of utmost importance to ensure that the EPA can adequately assess the risk of, and mitigate exposures to, chemical substances.”

CEH’s notice invited negotiations prior to a lawsuit. But, the notice said, “CEH does not intend to delay the filing of a complaint in federal court if the discussions fail to resolve these matters within the notice period, and CEH intends to seek appropriate relief, including preliminary and permanent injunctive relief, and costs of litigation, including attorney fees.”