As our Earth Week blogging event continues with our theme of Planet versus Plastics, today we will cover the U.S. Court of Appeals for the Fifth Circuit's recent decision in Inhance Technologies, L.L.C. v. U.S. Environmental Protection Agency, which relates to EPA's ability to regulate the fluorination of plastic containers under the Toxic Substances Control Act ("TSCA").
Since 1983, Inhance has been fluorinating plastic containers using the same process, which involves the creation of a barrier to prevent substances from leaching out of the containers and to keep outside substances from permeating in. EPA issued a Notice of Violation to Inhance in March 2022, alleging that Inhance's fluorination process resulted in the creation of per- and polyfluoroalkyl substances ("PFAS") in violation of TSCA. EPA's Notice of Violation offered Inhance two options: (1) change its fluorination process so that it no longer manufactured PFAS, or (2) temporarily halt the fluorination of any products that resulted in the creation of PFAS.
Rather than undertake either option, in December 2022, Inhance submitted two Significant New Use Notices ("SNUNs") for nine long-chain PFAS to EPA pursuant to EPA's July 2020 Significant New Use Rule ("SNUR") for certain PFAS. When EPA proposed the SNUR in January 2015, EPA did not identify the fluorination industry as one that was potentially subject to the rule. Thus, when Inhance submitted SNUNs for its products, Inhance maintained that its fluorination process was not covered by the SNUR and that Inhance's SNUNs were not "admission[s] of fact" or a concession that the SNUR was "legally applicable to the Company's fluorination."
In response, EPA issued two unilateral orders on December 1, 2023 pursuant to Section 5 of TSCA. In its first order pursuant to Section 5(f) of TSCA, EPA ordered Inhance not to produce three PFAS that EPA alleged were created in Inhance's production of fluorinated plastic containers. In its second order pursuant to Section 5(e) of TSCA, EPA determined that six PFAS manufactured by Inhance may present an unreasonable risk of injury to health or the environment and, as a result, ordered Inhance to cease manufacture of those chemicals and not to restart without performing additional testing.
Inhance appealed EPA's orders to the Fifth Circuit on an expedited basis, arguing that EPA had exceeded its authority by issuing the orders because Inhance's 40-year-old fluorination process is not a significant new use under TSCA. On December 12, 2023, in response to Inhance's assertion that the orders would shut down its fluorination process and bankrupt the company, the court granted Inhance's request for a stay of EPA's orders pending consideration of Inhance's appeal. In a decision issued on March 21, 2024, the court agreed with Inhance that EPA had exceeded its authority in issuing the orders because Inhance's fluorination process was not a significant new use within the purview of TSCA Section 5. The court vacated EPA's orders, allowing Inhance to continue with its fluorination process. The court concluded its decision with a statement that EPA has authority to regulate Inhance's fluorination process under Section 6 of TSCA, which applies to all chemical substances, not just new chemical substances or significant use uses of a chemical substance. Follow our blog for further updates as EPA considers its options going forward, including potentially seeking to regulate under Section 6 of TSCA or proceeding with its pending enforcement action against Inhance related to the 2022 Notice of Violation (United States v. Inhance Technologies LLC, 5:22-cv-05055, (E.D. Pa.)).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.