Date: April 30, 2024

U.S. Appeals Court Limits the EPA’s Ability to Regulate PFAS Chemicals

by Foley Mansfield
Date: April 30, 2024
by Foley Mansfield

U.S. Appeals Court Limits the EPA’s Ability to Regulate PFAS Chemicals

In a recent legal decision, the Fifth Circuit Court of Appeals addressed the application of Section 5 of the Toxic Substances Control Act (TSCA) to Inhance Technologies’ long-standing fluorination process, a process deployed for over four decades. The court ruled that Section 5 does not extend to Inhance Technology, LLC’s (Inhance) process, despite its recent finding of inadvertently generating per- and polyfluoroalkyl substances (PFAS).

Immediate Impact

The decision clarifies that the EPA cannot place restrictions on the Inhance’s PFAS-creating fluorination process under Section 5 of the TSCA. As such, this case essentially refines and limits the scope of the term “new use” under Section 5, a material change from the broader interpretation that the EPA has historically utilized. The ruling, however, did not dispute the underlying finding that the PFAS manufactured by Inhance presents an unreasonable risk of injury.

The Fifth Circuit majority noted that the EPA may instead regulate the fluorination process under Section 6, which grants the agency broader regulatory powers over all chemical substances. Section 6 requires a lengthier process to be undertaken by the EPA, which must include a cost-benefit analysis and provide for public notice and comment. The court stated that “the EPA is just not allowed to skirt the framework set by Congress by arbitrarily deeming Inhance’s decades-old fluorination process a ‘significant new use.’”

Background on the Law and Case

In 2020, amid increasing concerns over PFAS’ impact on health and the environment, the EPA introduced measures requiring companies to report significant new uses of certain PFAS. This meant that the manufacturer must denote and notify the EPA of any new manufacturing techniques or other processes resulting in the creation of certain PFAS. Two years after finalizing the “PFAS SNUR” (Significant New Use Rule), EPA learned that Inhance’s fluorination process resulted in the creation of PFAS.

Fast forwarding to December 2023, the EPA issued TSCA Sections 5 orders to Inhance indicating that Inhance’s fluorination process was a significant new use under the PFAS SNUR and directed Inhance not to create PFAS as a byproduct or, for a separate set of PFAS, stop manufacturing until additional testing was conducted on those PFAS. Inhance filed a lawsuit against the EPA in the Fifth Circuit in December of that year, arguing that PFAS SNUR requirements were not applicable to Inhance as its fluorination process had been used for decades prior.

The crux of the issue hung on the parties conflicting definitions of “new”, where Inhance argued that “significant new use” under TSCA referred to “not previously existing”. Alternatively, the EPA argued that “significant new use” intended to encapsulate the PFAS as “not previously known.”

The New Orleans-based court agreed with Inhance that the Agency overstepped its authority since Section 5 of the TSCA is reserved for regulating “new” chemicals or “new chemical uses”. The Court determined that the word “new” in Section 5 of the TSCA cannot be used on such a long-standing process, even if it was not previously known that the process creates PFAS.

Future Implications 

The Fifth Circuit’s ruling could increase the responsibilities of the EPA, particularly by burdening the agency with a duty to independently verify information of ongoing processes conducted by target manufacturers. Up to this point, the agency had placed an obligation on manufacturers to disclose their practices during the drafting and implementation of new SNURs

Other Circuits may continue to refine the definition of “new uses” under Section 5 of the TSCA in the future. In fact, there is another lawsuit over Inhance’s manufacturing process currently in federal court in Pennsylvania. The EPA, among other agencies, are plaintiffs in a suit in the Federal District Court for the Eastern District of Pennsylvania seeking to enforce TSCA requirements against Inhance. If this court rules in a manner inconsistent from the Fifth Circuit, the issue could be sent to the U.S. Supreme Court, resulting in continued litigation and near-term uncertainty as to the powers of the EPA, but longer-term could provide some definitive guidance to subjects.

 

Contacts:

Jessica Espinoza

Carol Tempesta

 

Related Practice Areas:

Toxic Tort / Mass Tort

Environmental Pollution Law

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