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Three Lawsuits Aim to Shape EPA’s Use of Chemical Test Orders

July 22, 2022, 9:30 AM

Rulings in three lawsuits that challenge the EPA’s use of its burgeoning authority to order chemical manufacturers to generate information on their products are poised to offer insights into the agency’s implementation of power that it’s only begun to use the last few years, attorneys say.

The Environmental Protection Agency was granted new power in 2016 to require companies to test a chemical already in commerce and in 2020 issued its first test order.

As the agency increasingly exerts the new authority, it faces dueling claims that it failed to justify ordered tests and that it isn’t wielding the full force of its power.

Two cases filed this year challenge additional tests the Biden administration ordered companies to carry out in April 2022 for two chemicals the Trump administration already had required them to test.

Lanxess Corp. v. EPA challenges aquatic toxicity and consumer exposure tests for o-dichlorobenzene, which helps produce soaps, inks, and lubricants. Vinyl Institute, Inc. v. EPA challenges environmental hazard tests of 1,1,2-trichloroethane, a solvent.

First in a While

The two lawsuits that directly challenge the EPA’s test orders are of interest, because the lawsuits involving EPA actions under Section 4 of the Toxic Substances Control Act of 1976 have been virtually nonexistent since the 1980s and 1990s, said Mark Duvall, a principal attorney at Beveridge & Diamond PC, who specializes in chemical law and regulation.

That’s because the amount of data the original law required the EPA to have before it could issue rules requiring company tests proved too high, and the agency largely abandoned rulemaking efforts. Congress eased that burden in 2016, by allowing the agency to obtain data through orders instead of rules.

A third case, Center for Environmental Health v. Nishida, could shape the extent to which citizens can petition the EPA to order tests, and it raises questions about whether the administration is walking its talk on environmental justice and per- and polyfluoroalkyl substances, or PFAS, according to North Carolina residents that filed the lawsuit and their attorney.

The EPA doesn’t comment on pending litigation, it said in response to questions. But the agency described various actions it’s taking to order companies to provide PFAS data and protect historically underrepresented communities.

Increasing Orders, Costs

“There has presumably been no litigation under amended Section 4 until now because EPA is only now imposing testing requirements,” Duvall said.

The Lautenberg Chemical Safety Act, which amended TSCA in 2016, authorized the agency to order companies test chemicals in commerce when it needs the information to determine whether the chemicals have so much potential to injure people or the environment that they must be regulated.

Depending on the tests ordered, companies can spend anywhere from thousands to more than a million dollars generating the information.

Former President Donald Trump’s EPA issued test orders for 10 chemicals before his term ended in January 2021. None of those orders were challenged in court.

Companies that received orders include Bell Laboratories, Inc. Dow Inc., Olin Chemical Corp., Sabic Innovative Plastics US LLC, and Willert Home Products.

President Joe Biden’s administration has ordered additional tests for eight of the chemicals, and it ordered tests for one more compound. Lanxess and the Vinyl Institute are challenging the additional tests for two chemicals.

‘Only Effective’ Option

“The Lanxess and Vinyl Institute cases are, to me, a predictable result of a chaotic rollout of EPA Section 4 Test Order efforts,” said Lynn L. Bergeson, managing partner with Bergeson & Campbell PC, which specializes in chemical regulations implemented by multiple agencies.

TSCA attorneys cited a critical difference between the initial, Trump-era test orders and the additional ones the Biden administration required. Before the agency issued the new tests, it didn’t discuss practical problems that could have been worked through. For example, certain tests that require a chemical to be dispersed in a liquid solution can’t be done if the chemical is insoluble, they said.

A top agency official said in June that the EPA has learned that discussing details about study protocols is useful prior to issuing orders.

“EPA’s lack of resources to respond to concerns about the adequacy of existing data, coupled with the disconnect we are seeing between the requested data and the protocols to develop them, and EPA’s reluctance to engage in substantive discussions” has made litigation the only effective way to challenge the agency, Bergeson said.

Litigation also can get the EPA to the negotiating table in time for companies to meet the aggressive deadlines by which its orders compel them to generate the data, she said.

Legal questions that TSCA’s new authority raises include: What are the triggers for ordering testing, and what must the agency do to justify using an order, she said. Reasonable people also can disagree on the specific tests and methodologies the agency requires, she said.

The third case involving six North Carolina community groups that demand the EPA issue test orders partly fits into the pattern of litigants probing the extent of and interpretations of EPA’s authority under the Lautenberg Chemical Safety Act, which amended TSCA in 2016, said Bergeson and Duvall.

The case, however, involves a different section of the law that allows citizens to petition the agency for regulations and other actions.

‘Tactical Advantage’

The statute’s citizens petition section offers a potentially significant tactical advantage, Bergeson said. If the EPA rejects a petition seeking chemical test orders, the amended law allows the petitioner to seek a de novo proceeding. When courts hear a case de novo, they decide the issues without referencing an agency’s previous conclusion.

That “tactically is a preferable standard of review” than parties get when they directly challenge an EPA order, Bergeson said. For direct challenges, courts use a standard of “substantial evidence in the record taken as a whole,” she said.

The North Carolina case is the second involving citizens asking the EPA to issue test orders, said Robert M. Sussman, an attorney with Sussman & Associates, who has represented petitioners in both cases.

The petitioners won the first case, Asbestos Disease Awareness Org. v. EPA, which resulted in the EPA proposing a rule in May that would require companies to report their production and importation of asbestos and products containing it.

Fighting Two Administrations

The North Carolina citizens petition case differs in another way from the Lanxess and Vinyl Institute cases, said state residents that petitioned the agency.

The petition shows that neither the Trump nor Biden administration used powers the chemicals law authorizes to obtain information on PFAS that could help communities understand how years of exposures to those chemicals has affected their health, said Jovita Lee, program and policy director with the North Carolina Black Alliance, and Sanja Whittington, executive director of Democracy Green, which focuses on environmental justice.

The case shows that, despite the Biden administration’s talk about supporting marginalized communities, it’s not listening to the communities of color in North Carolina that are seeking its help, they said.

Both organizations are part of a coalition of six North Carolina groups that petitioned the EPA in October 2020 to order the Chemours Co. to test 54 PFAS that the groups say it released into the Cape Fear River watershed.

The Trump administration denied the petition in January 2021.

The Biden administration reconsidered that denial, and in December 2021 said it would compel PFAS manufacturers to develop information on 39 chemicals as part of a National Testing Strategy.

But, as of July 14, the agency has ordered Chemours and other companies to test only one PFAS, 6:2 fluorotelomer sulfonamide betaine, and it’s not among the 54 that the petitioners say needs information.

“Developing Section 4 test orders is a complex and resource-intensive process involving many scientific and regulatory considerations,” an agency spokesperson said. Chemical manufacturers will be ordered to test more PFAS to “provide the agency with critical information on more than 2,000 similar PFAS” that fall within categories the EPA has developed for the thousands of chemicals in the group, the spokesperson said.

The administration’s decision and later actions, including the EPA’s June 23 motion asking the US District Court for the Eastern District of North Carolina to dismiss the case, have been disheartening, Lee said.

But the fight continues over getting information that residents and their doctors need to understand how the chemicals have affected their health, Whittington said.

“If we don’t stand up and demand change, it will continue to happen,” she said.

The coalition is scheduled to respond on July 25 to the EPA’s motion.

To contact the reporter on this story: Pat Rizzuto in Washington at prizzuto@bloombergindustry.com

To contact the editor responsible for this story: Zachary Sherwood at zsherwood@bloombergindustry.com