By Lynn L. Bergeson and Carla N. Hutton
Earlier this month, David Fischer joined the U.S. Environmental Protection Agency’s (EPA) Office of Chemical Safety and Pollution Prevention (OCSPP) as a Deputy Assistant Administrator. Prior to joining EPA, Mr. Fischer was most recently a partner of legal and regulatory affairs at IBEX Partners LLC, a public affairs firm. Before his partnership at IBEX, Mr. Fischer held several senior positions at the American Chemistry Council in its Office of General Counsel and Chemical Products and Technology Division, providing legal and policy counsel on a broad range of industrial, specialty chemical, and product defense matters. Earlier in his career, Mr. Fischer was also the Director of Environmental Health at the Association of State and Territorial Health Officials, where he led the first national assessment of state activities in lead poisoning prevention.
By Lynn L. Bergeson and Carla N. Hutton
On July 5, 2019, the U.S. Court of Appeals for the District of Columbia Circuit rejected an “invitation” to recognize liability under the False Claims Act (FCA) based on a company’s failure to meet a Toxic Substances Control Act (TSCA) reporting requirement and failure to pay an unassessed TSCA penalty. Kasowitz Benson Torres LLP v. BASF Corp. (No. 1:16-cv-02269). The court states that the FCA imposes civil liability on anyone who defrauds the federal government of money or property. Under the FCA, a third party may file suit on behalf of the government and collect a “substantial” bounty if successful. The law firm Kasowitz Benson Torres LLP (Kasowitz) filed suit in 2016, claiming that several chemical manufacturers violated TSCA by “repeatedly failing to inform” the U.S. Environmental Protection Agency (EPA) of “information regarding the dangers of isocyanate chemicals.” Kasowitz argued that the manufacturers’ failure to disclose this information and their subsequent actions deprived the government of property (substantial risk information) and money (TSCA civil penalties and contract damages). The court noted that Kasowitz demanded “billions of dollars in damages, even though the government openly support[ed] the defendants.” The district court dismissed its lawsuit, and Kasowitz appealed, asking the court “to become the first court to recognize FCA liability based on the defendants’ failure to meet a TSCA reporting requirement and on their failure to pay an unassessed TSCA penalty. We decline the invitation and affirm the dismissal.”
Kasowitz claimed that the defendants -- BASF Corporation, Covestro LLC, Dow Chemical Company, and Huntsman International LLC -- “manufacture isocyanate chemicals, which are used to produce various polyurethane-based materials such as paint, adhesives, rigid foam for insulation, flexible foam for mattresses and cushions, and parts for automotive interiors.” According to Kasowitz, the defendants acquired information as early as the 1970s about the adverse health effects of isocyanate chemicals. The companies failed to disclose this information to EPA, however, despite participating in EPA’s Compliance Audit Program. Kasowitz argued that the companies’ TSCA violations and their failure to pay penalties for those violations deprived the government of its money and property.
In its analysis of Kasowitz’s claims, the court describes the allegation that the companies violated FCA’s reverse false claim provision by “knowingly conceal[ing] or . . . improperly avoid[ing] . . . an obligation to pay” money as a non-starter. The court notes that “[i]t is undisputed that the EPA did not assess TSCA penalties against the defendants for failing to report substantial risk information regarding isocyanate chemicals.” As a result, there was no FCA “obligation” for the companies to conceal or avoid. In its decision, the court states that once EPA has taken successful administrative action, it has discretion to impose an appropriate civil penalty, including no penalty. According to the court, two TSCA provisions make this conclusion “inescapable”: (1) TSCA expressly grants the EPA authority to remit or otherwise decline to impose a civil penalty; and (2) TSCA itself recognizes that not every violation results in a civil penalty. Under EPA’s Compliance Audit Program, the court states that a company that failed to report substantial risk information faced no additional penalty and was in the same position it would have been had it not participated in the Program at all. Kasowitz also argued that the companies violated the reverse false claim provision by “knowingly conceal[ing] or . . . improperly avoid[ing] . . . an obligation to pay or transmit” property in the form of substantial risk information. The court considered whether the TSCA obligation to inform the EPA of substantial risk information qualifies as an obligation to transmit property. The court “conclude[d] that TSCA does not require the transmission of a property interest. TSCA gives the EPA one -- and only one -- interest in substantial risk information: the right to be informed of it.”
By Lynn L. Bergeson and Emily A. Scherer
As reported in our June 28, 2019, memorandum, on June 24, 2019, Bergeson & Campbell, P.C.(B&C®), the Environmental Law Institute (ELI), and the George Washington University Milken Institute School of Public Health (GWU) presented “TSCA: Three Years Later,” a day-long conference with leading experts exploring the current impacts of the Toxic Substances Control Act (TSCA) on science policies, challenges faced by industry, and the impacts of TSCA on regulatory policies, especially those concerning ensuring compliance and enforcement. A recording of the full conference is available online. Our memorandum provides details regarding the session topics and presenters, including copies of the presentation where available.
By Lynn L. Bergeson and Carla N. Hutton
The Environmental Defense Fund (EDF) announced on June 17, 2019, a report entitled Toxic Consequences: Trump’s attacks on chemical safety put our health at risk. EDF notes that “[c]oncern over toxic exposures and a lack of confidence in the badly outdated chemical safety system” led to Congress passing the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act) to reform the Toxic Substances Control Act (TSCA). The bipartisan bill “finally” gave the U.S. Environmental Protection Agency (EPA) “the power to strengthen health protections for American families and the environment.” EDF claims that the Trump Administration “is seeking to dismantle the new authorities and mandates under the law with the goal of shifting policies to serve the chemical industry’s agenda,” however. According to EDF, EPA has taken the following actions that undermine the Lautenberg Act:
- Approving new chemicals without regard for the law or public health;
- Ignoring real-life exposures when evaluating risks of existing chemicals; and
- Blocking or weakening bans of toxic chemicals.
EDF concludes that “without a drastic change to EPA’s current direction on chemical safety, we will be forced to endure the toxic consequences of its mistakes for decades to come.”
By Lynn L. Bergeson and Margaret R. Graham, M.S.
On June 14, 2019, the U.S. Environmental Protection Agency (EPA) announced that on May 24, 2019, EPA received manufacturer requests for EPA to conduct risk evaluations of diisodecyl phthalate (DIDP) from ExxonMobil Chemical Company and diisononyl phthalate (DINP) from ExxonMobil Chemical Company, Evonik Corporation, and Teknor Apex, both through the American Chemistry Council’s High Phthalates Panel. EPA states that both DIDP and DINP belong to a family of chemicals commonly referred to as phthalates, which are used as plasticizers in the production of plastic and plastic coatings to increase flexibility and were identified in the 2014 Update to the Toxic Substances Control Act (TSCA) Work Plan.
Within 15 business days of receiving a facially complete request (i.e., submission appears to be consistent with rule requirements), EPA states that it must notify the public of receipt of this request under 40 C.F.R. Section 702.37(e)(2); and within 60 business days of receipt of a facially complete request, EPA will submit for publication the receipt of the request in the Federal Register, open a public docket for the request, and provide no less than 45 calendar days for public comment. After the comment period closes, EPA has up to 60 days to either grant or deny the request to conduct a risk evaluation under 40 C.F.R. Section 702.37(e)(6). More information on Manufacturer Requests is available on EPA’s website.
Please check out Bergeson & Campbell, P.C.'s (B&C®) new podcast "Inside OCSPP with EPA Assistant Administrator Alexandra Dapolito Dunn" on its All Things Chemical™ webpage. In this podcast, Lynn L. Bergeson, Managing Partner of B&C, presents a very special guest, the Assistant Administrator for EPA's Office of Chemical Safety and Pollution Prevention (OCSPP): Alexandra Dapolito Dunn.
As Assistant Administrator Dunn has spent just over five months in office, she and Lynn sit down and talk about what it’s been like to take over OCSPP at this crucial time when the amended Toxic Substances Control Act (TSCA), post-Lautenberg, is just coming into its maturity. They discuss the challenges OCSPP is currently facing, and how Alex and her team have kept morale up while managing to meet all of the many deadlines imposed on OCSPP thus far.
This is a fantastic opportunity to gain insight into what has been going on inside the OCSPP over the last few months, and what to expect from it in the next few months.
By Lynn L. Bergeson and Richard E. Engler, Ph.D.
On May 20, 2019, the U.S. Environmental Protection Agency (EPA) announced that on May 30, 2019, it will begin publishing Toxic Substances Control Act (TSCA) Section 5 notices including premanufacture notices (PMN), microbial commercial activity notices (MCAN), and significant new use notices (SNUN), their attachments, including any health and safety studies, any modifications thereto, and all other associated information in ChemView -- in the form they are received by EPA, without review by EPA. EPA states that it will not be reviewing confidential business information (CBI)-sanitized filings before publishing. EPA states that this announcement will be the first of several reminders that EPA sends and, in addition, EPA has incorporated a reminder to check accompanying sanitized submissions as part of the Central Data Exchange (CDX) reporting module for TSCA Section 5 notices.
EPA’s announcement states the following as guidance for submitters to take heed of before submitting their TSCA Section 5 notices:
- Verify the asserted CBI claims are correct and consistent; and
- Verify the sanitized versions of the form, attachments, and file names are checked for proper and consistent CBI redactions and that watermarks or stamps indicating CBI are removed.
EPA does not specify how long after submission the documents may be posted, but submitters should expect a very short turn-around. Bergeson & Campbell, P.C. (B&C®) has addressed the topic of CBI before, most recently on our podcast, All Things Chemical™. When completing a PMN, a submitter must take care to ensure that all information that must be protected as CBI is marked as such. A submitter cannot expect EPA to extrapolate a claim for CBI in one part of a form to the rest of the document and its attachments. B&C strongly suggests that a submitter review the sanitized form of an entire document (e.g., a PMN and its attachments) to ensure that all sensitive information is redacted before submitting the document to EPA.
Do not wait until May 30. Begin developing and practicing good CBI practices today.
By Lynn L. Bergeson and Carla N. Hutton
On May 1, 2019, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) sent a memorandum to Alexandria Dapolito Dunn, Assistant Administrator, Office of Chemical Safety and Pollution Prevention, announcing that it “plans to begin preliminary research on the Office of Pollution Prevention and Toxics processes to implement the work to meet statutory deadlines of the Lautenberg Act.” OIG’s objectives are to determine whether EPA has met the deadlines imposed by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act) and whether EPA has the staff, resources, and management controls in place to meet future statutory deadlines.
As reported in our March 6, 2019, memorandum, “GAO Reviews EPA’s IRIS Assessment Efforts and Implementation of TSCA Reforms,” the U.S. Government Accountability Office (GAO) recently assessed whether EPA has demonstrated progress implementing the Toxic Substances Control Act (TSCA) as amended by the Lautenberg Act. In its report, Chemical Assessments: Status of EPA’s Efforts to Produce Assessments and Implement the Toxic Substances Control Act, GAO found that while EPA has responded to the initial statutory deadlines in TSCA, as amended by the Lautenberg Act, challenges remain. As stated in our memorandum, the report draws attention to the challenges facing EPA, including:
- Pending litigation by environmental groups against many of the final rules;
- Ensuring appropriate resources and staffing to meet the increased workload required under amended TSCA;
- Need for development of internal guidance documents to ensure consistency in EPA’s approaches;
- Ensuring that new chemical review is efficient and predictable, and
- Attempting to move forward with a major reorganization of the Office of Pollution Prevention and Toxics.
More information is available in our memorandum.
By Lynn L. Bergeson and Margaret R. Graham, M.S.
On April 30, 2019, the U.S. Environmental Protection Agency (EPA) announced it would be hosting two webinars for companies, organizations, and individuals required to report under the Mercury Inventory Reporting Rule of the Toxic Substances Control Act (TSCA). The final rule applies to any person who manufactures (including imports) mercury or mercury-added products, or otherwise intentionally uses mercury in a manufacturing process (including processes traditionally not subject to TSCA, such as for the manufacture of pharmaceuticals and pesticides).
The first webinar, Mercury Inventory Reporting Rule, will provide background on reporting requirements under the final rule. It will take place on May 21, 2019, at 2:00 p.m. (EDT). The 2018 reporting year is from January 1, 2018, to December 31, 2018, and the submission deadline for the 2018 reporting year is coming up on July 1, 2019. Reporters are required to submit their information to EPA using the Mercury Electronic Reporting (MER) application for the first time on July 1, 2019, and then every three years thereafter. Based on the information collected, EPA will identify any manufacturing processes or products that intentionally add mercury and recommend actions to achieve further reductions in mercury use. Following EPA’s presentation, webinar participants will have an opportunity to ask questions on reporting requirements under the final rule. Registration is available online.
The second webinar, Mercury Electronic Reporting (MER) Application, will demonstrate how to use the online MER application through EPA’s Central Data Exchange (CDX), which is organized as a fill-in-the-blanks form with drop-down menus and lists of check-box options. It will take place on May 23, 2019, at 2:00 p.m. (EDT). Registration is available online.
More information on the Mercury Inventory Reporting Rule is available in our June 25, 2018, memorandum “EPA Publishes Final Reporting Requirements for TSCA Mercury Inventory,” and in our March 19, 2019, memorandum “EPA Releases New Tools to Help Companies Meet July 1 Mercury Reporting Requirements.”
By Lynn L. Bergeson, Kathleen M. Roberts, and Carla N. Hutton
On April 25, 2019, the U.S. Environmental Protection Agency (EPA) issued a proposed rule that would amend the Toxic Substances Control Act (TSCA) Section 8(a) Chemical Data Reporting (CDR) requirements and the TSCA Section 8(a) size standards for small manufacturers. 84 Fed. Reg. 17692. The current CDR rule requires manufacturers (including importers) of certain chemical substances listed on the TSCA Chemical Substance Inventory (TSCA Inventory) to report data on chemical manufacturing, processing, and use every four years. EPA is proposing several changes to the CDR rule to make regulatory updates to align with new statutory requirements of TSCA, improve the CDR data collected as necessary to support the implementation of TSCA, and potentially reduce the burden for certain CDR reporters. Proposed updates to the definition for small manufacturers, including a new definition for small governments, are being made in accordance with TSCA Section 8(a)(3)(C) and impact certain reporting and recordkeeping requirements for TSCA Section 8(a) rules, including CDR. EPA states that the definitions may reduce the burden on chemical manufacturers by increasing the number of manufacturers considered small. Overall, according to EPA, the regulatory modifications may better address EPA and public information needs by providing additional information that is currently not collected; improve the usability and reliability of the reported data; and ensure that data are available in a timely manner. Comments are due by June 24, 2019. More information on the proposed rule is available in our full memorandum.