D.C. Circuit Partially Denies Petition for Review of TSCA Inventory Rule; Holds that the Reverse Engineering Aspect of the Inventory Rule “Comes Up Short” and Remands Issue Back to EPA
On April 26, 2019, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) issued its order on petition for review of the U.S. Environmental Protection Agency’s (EPA) final rule on the Toxic Substances Control Act (TSCA) Inventory Notification (Active-Inactive) Requirements (82 Fed. Reg. 37520 (Aug. 11, 2017)), which denied the petition for review on all but one claim. Petitioner Environmental Defense Fund (EDF) challenged five distinct features of the Inventory final rule: (i) EPA’s exclusion of substantiation questions regarding reverse engineering; (ii) the final rule’s criteria for “maintaining” a confidentiality claim; (iii) EPA’s choice not to incorporate certain regulatory requirements into the final rule; (iv) EPA’s failure to implement the Act’s “unique identifier” requirements in this rulemaking; and (v) the final rule’s exemption of exported chemicals from its notification requirements.
The D.C. Circuit’s order states that only the first claim succeeds past the standard of review required under both the Administrative Procedure Act (APA) and TSCA, however; specifically, EPA acted arbitrarily and capriciously via its “omission of any inquiry into a chemical identity’s susceptibility to reverse engineering [which] effectively excised a statutorily required criterion from the substantiation process.” Even though EPA included several substantiation questions to address reverse engineering in the proposed rule, EPA did not include any “substantiation questions related to the requirement that a substance’s chemical identity not be susceptible to reverse engineering” and declined altogether to “‘secure answers’ substantiating a company’s ‘assertion’ that its chemical product cannot be reverse engineered” in the final rule. The court states that this error was “fatal” and remands this issue back to EPA for EPA to “address its arbitrary elimination of substantiation questions regarding reverse engineering.”
Regarding the other four claims that it denied, the court made the following statements:
- “EPA acted well within its discretion in concluding that, as part of the Inventory update, any manufacturer or processor of a chemical substance can file a claim to maintain the chemical substance’s confidentiality”;
- “There is nothing facially troubling about the failure to copy every relevant statutory obligation into the regulation”;
- “Agencies need not address all regulatory obligations ‘in one fell swoop’ … nothing in [TSCA] requires the EPA to develop and implement the unique identifier system alongside its Inventory review process”; and
- “EPA’s decision [to exclude export-only chemicals from the final rule’s requirement that chemical companies notify EPA of chemical substances being manufactured or processed] reflected a reasonable interpretation of [TSCA].”