Originally published in the July 2024 issue of Bench & Bar of Minnesota Environmental Law Update, Minnesota State Bar Association.
On March 21, 2024, the Fifth Circuit Court of Appeals held that the EPA exceeded its statutory authority under the Toxic Substances Control Act (TSCA) when it used a Significant New Use Rule to prohibit a fluorination process that had been used by Inhance Technologies L.L.C. (Inhance) for decades. Inhance Technologies, L.L.C, v. EPA, 96 F.4th 888 (5th Cir. 2024); 15 U.S.C. § 2604(a)(1)(A)(ii).
In Inhance Technologies, the court considered whether a significant new use can include a pre-existing industrial practice that was not previously known to the EPA. Because the practice did not recently come into existence, the court held that it could not be considered “new” and therefore could not be regulated under a Significant New Use Rule. Instead, the EPA would have to go through the more rigorous rulemaking process under TSCA that applies to all chemical substances.
In Inhance Technologies, Inhance challenged two EPA orders prohibiting the company from continuing to process and manufacture PFAS chemicals. For many years, Inhance fluorinated plastic containers to create a protective barrier on the containers. After an investigation, the EPA found that the fluorination process produced PFAS chemicals. PFAS chemicals have been widely used in industrial processes, but emerging evidence increasingly links PFAS to various types of risks to human health and the environmental. In 2015 the EPA published a Significant New Use Rule that prohibited the processing or manufacturing of a subset of PFAS chemicals, including those PFAS chemicals produced as part of Inhance’s fluorination process. Applying its authority under the Significant New Use Rule, the EPA ordered Inhance to cease the processing and manufacturing of PFAS chemicals.
Inhance challenged the EPA’s interpretation of “significant new use,” arguing that the decades-old fluorination practice was not a new use. Whether or not a chemical is “new” or has a “significant new use” determines how the EPA can make rules to regulate it. See 15 U.S.C. § 2605. Section 5 of the TSCA authorizes the regulation of new chemicals or a significant new use of a chemical. Id. § 2604(a)(1)(A)(ii). In contrast, Section 6 allows for the regulation of all chemical substances. See id. § 2605(a). However, Section 6 contains a more rigorous rulemaking process than Section 5. The EPA promulgated the Significant New Use Rule under Section 5, which only extends to new chemicals or significant new uses. Inhance argued that the “new” use of a chemical is one that has recently come into existence, and therefore their decades-old fluorination process could not be regulated under a Significant New Use Rule. However, the EPA argued for a broader definition of new, proposing that a new use is one that was not previously known to the EPA.
On appeal, the Fifth Circuit agreed with Inhance, finding that a “new” use is one that has recently come into existence. Because Inhance’s fluorination process had been used since the early 1980s, the Fifth Circuit determined that the process could not have recently come into existence and thus could not be regulated under the agency’s Section 5 authority. The Fifth Circuit determined this interpretation to be the most consistent with the text of Section 5, which includes anticipatory language like “before processing or manufacturing” and “projected volume” Id. § 2604(a)(1)(B). Because such language is forward looking, the Fifth Circuit determined Section 5 could not apply to a process that had been in use for years. Additionally, the Fifth Circuit warned that the EPA’s definition proved too expansive because, under EPA’s definition of “new,” Section 5 would swallow up Section 6 and allow the agency to take advantage of the more relaxed process in Section 5.
Ultimately, the Fifth Circuit’s narrow interpretation of what constitutes a “new” use under Section 5 of TSCA suggests that even if an existing use of a chemical was previously unknown to the EPA it may not be considered a “significant new use” under Section 5 and cannot be regulated under a Significant New Use Rule. In order to regulate existing practices, the agency will have to follow the more rigorous process outlined in Section 6 of TSCA.
Featured Professionals
Professionals
612.492.7175
612.492.7437
