The Chemical Compound—April 2018

This quarterly newsletter provides updates to business on litigation, regulatory, legislative, and other notable developments involving chemicals of concern. Our present focus is on certain emerging contaminants, including perfluorinated chemicals (PFCs), hexavalent chromium, trichloroethylene (TCE), 1,2,3-Trichloropropane (TCP), and 1,4-dioxane. We hope you find this publication informative, and we welcome your feedback on chemicals of interest to your organization.

Table of Contents

Litigation Update

• 1,4 Dioxane »»
• TSCA Litigation »»

Federal Regulatory & Legislative Action

• EPA Issues Proposed Rule Establishing User Fees for the Administration of TSCA »»
• EPA Announces National Summit on Per- and Polyfluoroalkyl Substances »»
• Reporting Deadline for Nanoscale Materials Approaching »»
• Federal Budget Includes Funding for PFAS Health Study, Cleanups at Military Sites »»
• EPA Focuses on Vapor Intrusion Risk in NPL Listing »»

State Regulatory & Legislative Action

• California »»
• Washington »»
• Florida »»

Litigation Update

1,4 Dioxane

Environmental Groups Issue Notice of Intent to Sue Casella Waste Systems, Inc.

Toxics Action Center and Conservation Law Foundation have issued a notice of intent to sue Casella Waste Systems, Inc. (Casella) under the Clean Water Act.¹   The organizations allege that contaminated groundwater and leachate from Casella's landfill in Bethlehem, New Hampshire have discharged into the Ammonoosuc River in New Hampshire.  They further allege that the groundwater and leachate contain contaminants including 1,4 dioxane.  The notice of intent to sue was issued just a few days before residents of the Town of Bethlehem were set to vote on the expansion of Casella's landfill² —a vote which ultimately failed.³ The organizations state that they are seeking to require Casella to cease discharging contaminated water and leachate into the Ammonoosuc River, or to require Casella to obtain a Clean Water Act permit to govern these discharges.⁴  Pursuant to the Clean Water Act, the organizations must wait 60 days after the issuance of the notice of intent to file suit against Casella.⁵

TSCA Litigation

Envtl. Def. Fund v. EPA (D.C. Cir.)

The Environmental Defense Fund (EDF) has filed its brief in its challenge to EPA's TSCA Inventory Notification (Active-Inactive) Requirements Rule (TSCA Inventory Reset Rule).⁶ The final TSCA Inventory Reset Rule was published on August 11, 2017.⁷ This rule requires manufacturers, importers, and processors of chemical substances to retroactively report any substance which was active in US commerce between June 21, 2006 and June 21, 2016, and requires manufacturers, importers, and processors of chemical substances to file a report with EPA going forward if they plan to manufacture, import, or process a chemical substance that has been placed on the "inactive" portion of the TSCA inventory.⁸  Despite EDF's lawsuit, manufacturers of chemical substances were required to submit information to EPA by February 7, 2018.

EDF's brief raises several of the points that the organization identified as defects in the rule in its November 2017 statement of issues, including challenging the manner in which confidential business information (CBI) claims can be asserted or sustained for information, including chemical identities, reported to EPA, and contesting EPA's exemption of chemicals manufactured or produced solely for export from the requirements of the rule.⁹ Notably, EDF appears to have abandoned its argument that the rule impermissibly allows processors 420 days to submit "active substances" notifications to EPA, instead of the 180 days that the organization initially alleged was mandated by TSCA.

EDF's brief raises three principal arguments. First, EDF alleges that the rule impermissibly allows an entity submitting an active substance notification to seek to sustain a confidentiality claim for a chemical substance's specific identity as long as any company has previously asserted a confidentiality claim for the identity of the substance.  The organization argues that companies may only re-assert their own past claims for confidentiality.  Second, EDF claims that the rule does not meet the requirements of TSCA Section 14 governing CBI.  The organization claims that the rule does not require companies to submit sufficient substantiation information in support of their CBI claims.  Specifically, EDF alleges that the rule improperly fails to require organizations submitting CBI claims to demonstrate "a reasonable basis to believe that the information is not readily discoverable through reverse engineering."¹⁰  The organization also alleges that the CBI provisions violate the Administrative Procedure Act because (1) the rule failed entirely to address substantiation of claims that information claimed as CBI is not "readily discoverable through reverse engineering;" and (2) EPA failed to respond to public comments relating to substantiation.

Finally, EDF argues that EPA impermissibly exempted from the requirements of the rule manufacturers and processors of chemical substances intended solely for export.  EDF points to language in Section 12 of TSCA, relating to exports, which states that TSCA "(other than [Section 8]) shall not apply" to chemical substances solely intended for export.¹¹ The organization argues that because TSCA Section 12 specifically applies the requirements of TSCA Section 8—the section authorizing the TSCA Inventory Reset Rule (as well as the Chemical Data Reporting Rule and the Active/Inactive Designation Rule)—to chemical substances manufactured solely for export, EPA's exemption was improper.

In its brief, EDF indicates that it is seeking only partial vacatur of the TSCA Inventory Reset Rule, noting that it does not want EPA to start over with the entire rulemaking.  EPA's response brief is due to the DC Circuit in May 2018.  The deadline for processors to submit active substances designations is October 5, 2018.  Whether and how EDF's lawsuit will affect the processors' reporting deadline and entities that have already submitted information to EPA remains to be seen.

Return to Table of Contents »»

Regulatory & Legislative Action

Federal Regulatory & Legislative Action

EPA Issues Proposed Rule Establishing User Fees for the Administration of TSCA

In February 2018, EPA issued a proposed rule to establish "User Fees for the Administration of the Toxic Substances Control Act" (the TSCA Fees Rule).¹²  Companies subject to Sections 4, 5, and 6 of the amended TSCA may soon be required to pay EPA significant new fees.  EPA projects that, through the proposed rule, it will increase revenue derived from TSCA fees by almost twentyfold, from $1.1 million to $20.05 million annually.  These fees will be used by EPA to cover approximately 25% of EPA's costs of administering Sections 4, 5, 6, and 16 of TSCA.  EPA plans to begin imposing the new fees on October 1 of this year.

Although Section 26 of TSCA authorizes EPA to collect fees from manufacturers and processors of chemical substances, EPA announced in the proposed rule that it intends to focus its fee collection efforts on manufacturers (including importers) of chemical substances rather than processors.  Manufacturers and importers of chemical substances will be required to pay fees associated with (1) test orders, test rules, and enforceable testing consent agreements issued pursuant to TSCA Section 4; (2) TSCA Section 5 premanufacture notices, significant new use notices (SNUNs), and exemption notices and applications; and (3) EPA- and manufacturer-initiated risk evaluations of chemical substances under TSCA Section 6.  Processors will only be required to pay fees if they submit a TSCA Section 5 SNUN or if there is TSCA Section 4 activity relating to a SNUN submitted by a chemical substance processor.

Manufacturers and importers of chemical substances should pay particular attention to EPA's proposed fee for EPA-initiated risk evaluations.  The Agency has proposed to assess the $1.35 million risk evaluation fee by dividing it evenly among manufacturers and importers of the chemical substance under evaluation (though small businesses will pay a smaller share than other manufacturers or importers).  EPA intends to rely on information reported to EPA under the Chemical Data Reporting rule to determine which companies should be assessed a portion of the fee.  Notably, the market share or volume of a chemical substance manufactured or imported by a company will not be considered by EPA when determining its share.  Shareholders interested in providing feedback on EPA's proposed rule must submit comments to the agency by April 27, 2018.

EPA Announces National Summit on Per- and Polyfluoroalkyl Substances

EPA Administrator Scott Pruitt announced in March that EPA will convene a "National Leadership Summit" to discuss actions that may be taken to address per- and polyfluoroalkyl substances (PFAS) contamination across the country.¹³  The summit will be held May 22-23, 2018 in Washington DC.  The stated goal of the summit is to give leaders from states and US territories the opportunity to (1) discuss the characterization of potential risks from PFAS contamination and the development of monitoring and remediation techniques to address these potential risks; (2) identify short-term actions that may be taken to address PFAS contamination; and (3) develop strategies to discuss PFAS contamination with the public.  EPA's announcement of the National Leadership Summit also states that the agency intends to release a "PFAS Management Plan" later this year.  EPA first announced its intention to coordinate its efforts with state and local efforts to address PFAS contamination in December 2017.¹⁴ The announcement of the summit seems to be in furtherance of EPA's stated goal to enhance coordination with "states, tribes, and federal partners."

Reporting Deadline for Nanoscale Materials Approaching

Manufacturers and processors of nanoscale materials—chemical substances that, among other criteria, are in the size range of 1–100 nanometers in at least one dimension and which are manufactured or processed to exhibit one or more unique or novel properties as a result of their size—are facing an upcoming deadline to comply with an EPA reporting rule.  The Nanoscale Materials Reporting Rule, which became effective in August 2017, requires manufacturers, processors, and importers of nanoscale materials to submit information to EPA regarding chemical identity, production volume, and manners of production or processing for these materials by August 14, 2018.¹⁵

In August 2017, EPA issued guidance clarifying some portions of the final Nanoscale Materials Reporting Rule.¹⁶ The guidance primarily addressed three areas of uncertainty: (1) who is required to report; (2) what substances are reportable; and (3) what information is required to be reported.  Manufacturers, including importers, and processors of nanoscale materials are required to comply with the Rule.  Manufacturers are required to comply with the Rule even if they are manufacturing a reportable substance solely for export.  The guidance also confirmed that reporting is required at multiple stages in the supply chain.  Manufacturers and processors of nanoscale materials are required to "report reasonably ascertainable information on the reportable chemical substance." In order to comply with the Nanoscale Materials Reporting Rule, processors must seek and report information from their suppliers about the specific properties of nanoscale materials.  Processors are not, however, required to conduct testing to determine the specific properties of nanoscale materials.

The guidance also provides additional clarity on the substances that are reportable under the rule.  The guidance confirmed that in order for a substance to be manufactured or processed to exhibit one or more unique or novel properties as a result of its size (and thus be reportable under the Rule), a manufacturer or processor must be manufacturing or processing the substance because of its unique size. This suggests that substances that otherwise could be within the scope of the rule would be excluded from reporting if the substance's small size is incidental, rather than intentional.  Finally, entities are required to provide EPA with information that is "reasonably ascertainable" relating to the chemical identity, manufacturing or processing volume, and environmental and health effects of a nanoscale substance.  The guidance noted that EPA "expects in most cases" that the information needed for an entity to comply with this rule will be known or reasonably ascertainable to the entity.  This indicates EPA expects that the rule imposes only a minimal burden on entities that are required to submit notifications to timely comply with the Rule before the August 14, 2018 deadline. 

Federal Budget Includes Funding for PFAS Health Study, Cleanups at Military Sites

The Fiscal Year 2018 budget, signed into law by President Trump on March 23, 2018, includes almost $100 million for activities related to PFAS chemicals.¹⁷  The budget includes $10 million for a health study of the impacts of PFAS exposure. This appropriation is more than the $7 million that was requested by 11 members of Congress from Michigan in late February 2018.¹⁸  The budget also includes an additional $84.47 million for "[e]nvironmental [r]estoration" at Navy facilities.¹⁹  Of this amount, $42.2 million has been designated as a "general program increase," and $42.2 million has been designated specifically for cleanup of PFAS contamination.

This appropriation comes after an October 2017 US Government Accountability Office report criticized the Department of Defense's handling of drinking water issues.²⁰  The report stated that the Department of Defense had taken action to address PFC contamination at over 260 current and former military bases across the country, but that the Department of Defense had identified a total of over 400 military bases with suspected PFC contamination.²¹ The report also expressed concern that the Department of Defense had thus far failed to provide estimates of the cost of addressing contamination at all of these potentially contaminated sites.

EPA Focuses on Vapor Intrusion Risk in NPL Listing

The Hazard Ranking System (HRS)—used to identify sites to be included on the Superfund National Priorities List (NPL)—was revised in January 2017 to add subsurface intrusion of contaminants, including vapor intrusion.²² The final rule went into effect in May 2017.²³ The addition of vapor intrusion to the HRS allows EPA to propose sites to the NPL based on vapor intrusion risks, even if the site would not otherwise qualify for the NPL.²⁴ EPA exercised its authority to propose sites for the NPL based on vapor intrusion risk in January 2018, when it nominated Rockwell International Wheel & Trim site (Rockwell International Site) in Grenada, Mississippi for the NPL.²⁵ The Rockwell International Site was formerly used as a "wheel cover manufacturing and chrome plating facility" and currently operates as a metal plant.²⁶  As a result of historical operations at the site, TCE and related compounds contaminated soil and groundwater at the site.  TCE vapors from soil and groundwater have entered the building through cracks in the foundation of the building currently on the site.  To address this vapor intrusion, EPA undertook an emergency response action at the Rockwell International Site in December 2017.  EPA's proposal to add the Rockwell International Site to the NPL will allow the Agency to access Comprehensive Environmental Response, Compensation, and Liability Act resources for a more comprehensive clean-up at the site.  

Return to Table of Contents »»

State Regulatory & Legislative Action

California

1. California Issues Product-Chemical Profile for PFAS in Carpets and Rugs

In February 2018, the California Department of Toxic Substances Control (DTSC) announced that it was seeking comment on a "Product-Chemical Profile for Perfluoroalkyl and Polyfluoroalkyl (PFAS) in Carpets and Rugs."²⁷  The publication of a Product-Chemical Profile is a precursor to the initiation of a Priority Product rulemaking.  In the Profile, DTSC explains that it is proposing to list PFAS in Carpets and Rugs as a Priority Product because it alleges that there is a potential for human exposure to PFAS through carpets and rugs, and because this exposure could have adverse effects.  

DTSC is seeking public comment on the Profile, and specifically requests comments regarding additional research being done by the industry to determine the potential impacts of PFAS and regarding alternatives to PFAS for this purpose.  Interested stakeholders must submit comments by April 16, 2018.  DTSC has only designated one Priority Product since the adoption of regulations allowing designation of Priority Products in 2014.  The single Priority Product—children's foam-padded sleeping products containing Tris(1,3-dichloro-2-propyl) phosphate or TDCPP—was proposed for listing as a Priority Product in 2014,²⁸ and was not finalized as a Priority Product until July 2017.²⁹ Therefore, short-term action by DTSC to finalize a listing of PFAS in Carpets and Rugs is unlikely.  

2. Draft Priority Product Work Plan Targets Food Packaging Chemicals

In February 2018, DTSC issued its "Draft Three Year Priority Product Work Plan (2018-2020)" (2018-2020 Work Plan), outlining categories of consumer products that may be regulated under California's Safer Consumer Products (SCP) Program in the next few years.³⁰ The report also includes an explanation of why DTSC has identified particular categories of products to be designated as Priority Products.³¹  The initial Priority Product Work Plan in 2015 identified six categories of products that may be designated as Priority Products: (1) beauty and personal care products; (2) building products and furnishings; (3) cleaning products; (4) clothing; (5) fishing equipment; and (6) office machinery.³²  DTSC identified PFCs as contaminants that may be present as water or stain repellents on products in two categories: clothing and building products and furnishings.

The 2018-2020 Work Plan identifies seven categories of products to potentially be designated as Priority Products: (1) beauty and personal care products; (2) cleaning products; (3) furnishing and décor; (4) building products; (5) consumable office, school, and business supplies; (6) food packaging; and (7) lead-acid batteries. In the 2018-2020 Work Plan, DTSC eliminated the clothing and fishing equipment categories present in the initial Priority Product Work Plan, without explanation of this decision.  DTSC also divided the building products and furnishings category used in the initial Priority Product Work Plan into separate categories.  In the 2018-2020 Work Plan, PFCs are identified as contaminants that may be present in furnishing and décor, building products, and food packaging.  Stakeholders should monitor the issuance of the final 2018-2020 Work Plan later this year, and should remain up-to-date on products that may be subject to regulations under California's SCP Program.  

Washington

The State of Washington has moved closer to banning the use of PFAS in food packaging materials. In late February 2018, the state legislature passed ESHB 2658.³³ Washington Governor Jay Inslee signed the legislation in late March.³⁴ This bill could prohibit the use of PFAS in food packaging as early as January 2022. However, before a prohibition on the use of PFAS in food packaging could go into effect, the Washington Department of Ecology must first conduct an alternatives assessment for PFAS in food packaging, and determine that there is a "safer alternative" available. The Department of Ecology is required to publish the alternatives assessment by January 2020.  If the Department of Ecology determines that a safer alternative is available, the prohibition on PFAS in food packaging would go into effect on January 1, 2022.  However, if the Department of Ecology determines that a safer alternative is not available, the Department is required to issue a revised version of its alternatives assessment annually until a safer alternative is identified.  Once a safer alternative is identified, the prohibition will go into effect two years following the issuance of the alternatives assessment identifying the safer alternative.

Florida

The Florida Department of Environmental Protection has withdrawn water quality standards initially issued by the governor-appointed Environmental Regulation Commission in July 2016.³⁵ The proposed standards would have applied to 82 chemical substances, including trichloroethylene.³⁶ The regulations were criticized for allowing higher levels of some chemical substances, and were challenged in court by the City of Miami and the Seminole Tribe of Florida.³⁷  Florida's water quality standards have not been updated since 1992.³⁸ The Florida Department of Environmental Protection has promised to work with Native American tribes to develop the new standards.³⁹ Florida Senator Bill Nelson and Florida Congressman Ted Deutch have requested EPA oversight of the Department of Environmental Protection's development of new water quality standards, alleging that the Department previously failed to adequately consider potential health risks.⁴⁰The Department of Environmental Protection has not announced a timeline for developing the revised standards.⁴¹

Return to Table of Contents »»

© Arnold & Porter Kaye Scholer LLP 2018 All Rights Reserved. This newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.