The Toxic Substances Control Act (TSCA) has been regulating new and existing chemicals for almost 50 years. Under the TSCA, the EPA was given broad authority to track the thousands of existing commercial chemicals and regulate any new chemicals before they enter the market.
The TSCA requires manufacturers that intend to use a chemical that is designated as a “significant new use” to notify the EPA at least 90 days before they manufacture, import or process the chemical for that use, i.e., the “significant new use rule” (SNUR). This pre-manufacture notice requirement gives the EPA the opportunity to evaluate the potential use and, if necessary, to place restrictions on the chemical or prohibit its use to manage any risks before they can occur.
The TSCA has been instrumental in the regulation of PFAS (per- and polyfluoroalkyl substances), and SNURs have contributed to the EPA’s more conservative policies. The EPA, not surprisingly, has issued SNURs for certain PFAS. In fact, in 2007, the EPA finalized a SNUR on 183 PFAS chemicals believed to no longer be manufactured or used in the United States. Then, in 2015, the EPA proposed a SNUR under the TSCA to require manufacturers of perfluorooctanoic acid (PFOA) and PFOA-related chemicals, to notify the EPA at least 90 days before starting or resuming new uses of these chemicals in any products. In 2022, the EPA raised concerns about the potential for PFAS to form and migrate from fluorinated high-density polyethylene containers and similar plastics (i.e., fluorinated polyolefins) and notified the manufacturers (including importers), processors, distributors, users, and those that dispose of these substances of these issues.
In December 2023, the EPA issued orders to Inhance Technologies LLC directing it not to produce per- and polyfluoroalkyl substances (PFAS), chemicals that are created in the production of its fluorinated high-density polyethylene plastic containers. According to the EPA, this action, taken under the authority of the TSCA, was intended to protect the public from exposure to dangerous PFAS chemicals in containers used for a variety of household consumer, pesticide, fuel, automotive and other industrial products. The remarkable issue with the orders was that they were directed at Inhance’s manufacturing processes that had existed for over four decades.
Inhance immediately petitioned the Fifth Circuit for expedited review, arguing that if the orders were allowed to take effect, Inhance’s forty-year-old fluorination process would be shut down and, consequently, the company would go bankrupt. In vacating the EPA’s orders, the Court analyzed that the EPA was attempting to use the TSCA to try to regulate Inhance’s decades-old fluorination process under the guise of a “significant new use.” As such, the Court reasoned that “new” should be interpreted to mean “having recently come into existence” or “not previously existing.” While the EPA tried to argue that “new” was supposed to mean “not previously known,” the Court rejected this theory because it would circumvent common sense by allowing the EPA to regulate any use under Section 5 anytime it “discovered” a use—essentially making it new only to them. Inhance Techs., L.L.C. v. United States EPA, 96 F.4th 888 (5th Cir. 2024).
The aftermath of the Fifth Circuit judgment looms in the background as another pivotal lawsuit is underway. This pending case is based on the same underlying facts but was filed a year prior (December 19, 2022) as an enforcement action in the U.S. District Court for the Eastern District of Pennsylvania (EDPA), because Inhance refused to comply with the EPA’s Notice of Violation. After confirming Inhance’s fluorination process resulted in the creation of PFAS, the EPA issued Inhance a Notice of Violation in March 2022. Inhance responded by submitting two Significant New Use Notices (SNUNs) to the EPA in December 2022, but did not change their process or stop fluorinating containers. United States v. Inhance Techs. LLC, 5:22-cv-05055, 2022 WL 17903769 (E.D. Pa. Dec. 19, 2022).
Judge Murphy, of the U.S. District Court for the EDPA, had initially slated a status conference for April 9 to address the approach to the TSCA’s enforcement action following the Fifth Circuit’s ruling. However, it was canceled for reasons that seemingly concurred with the EPA’s argument in a separate brief, wherein the agency advocated for maintaining the hold on the case until the Fifth Circuit issues its mandate. Additionally, the EPA indicated it was still exploring potential avenues for further review of the appellate case, such as petitioning for an en banc rehearing. In a succinct one-page order, Judge Murphy decreed that the case would remain stayed indefinitely and directed the plaintiffs to notify the Court upon the issuance of the mandate by the Fifth Circuit.
Environmentalist intervenor-plaintiffs filed a brief stating that the Court needs to proceed with its own decision because the Fifth Circuit has no binding effect on the enforcement case, since the case is in the Third Circuit. The intervenor-plaintiffs specifically argue that the Fifth Circuit misread the TSCA by holding that previously existing uses can never be subject to SNURs. Furthermore, as a result of the stay, environmental groups are urging the EPA to swiftly implement a rule under the TSCA to ban plastic-fluorination work—which is the crux of their legal dispute with Inhance. This petition offers a possible alternative route for the EPA to attempt to regulate Inhance’s plastic manufacturing, separate from ongoing litigation. The petition specifically targets perfluorinated chemicals formed during plastic fluorination, aligning with the now-vacated compliance orders.
Signed by various environmental organizations, including the Center for Environmental Health and Public Employees for Environmental Responsibility, the petition highlights the EPA’s previous determination that PFAS in Inhance’s plastics pose an “unreasonable risk.” Despite the Fifth Circuit’s ruling, the petition argues that the EPA still has authority under TSCA Section 6 to regulate Inhance’s fluorination process. The petition emphasizes that the TSCA allows the EPA to initiate a rulemaking based on previous risk findings, and it urges the EPA to act promptly to mitigate the risks associated with PFAS production and processing. The Fifth Circuit is apparently the first court to actually decide the meaning of that language in TSCA. Attorneys involved with the suit have said that “prior to the Inhance litigation, no court had considered it because in the years since Congress overhauled the law in 2016 no defendant in a SNUR enforcement action had opted to litigate its case rather than reach a settlement.”
In light of this, the outcome of the Pennsylvania case is eagerly awaited, as it could influence how PFAS, and other chemicals are regulated and enforced under the TSCA going forward. The decision on whether to align with the Fifth Circuit’s interpretation will be crucial, not just for Inhance but for the broader regulatory landscape surrounding the use of hazardous substances—especially for those corporations who may have assumed they were safe under SNUR. Should the EDPA opt for a conflicting approach, a circuit split could present a ripe opportunity for the Supreme Court’s consideration.
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