January 27, 2023

Risky Business: Deciding Whether Chemicals Pose Risk Is Getting Really Confusing

Posted on January 27, 2023 by Lynn L. Bergeson

Chemicals are the foundational origin of just about everything we enjoy and cannot live without. The federal law that authorizes the U.S. Environmental Protection Agency (EPA) to regulate industrial chemical substances is the Toxic Substances Control Act (TSCA), an almost 47-year-old law significantly amended in 2016 by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg). Lautenberg’s passage was a bipartisan triumph marking the do-over of a law that many believed did not ensure chemical safety.

The past seven years are no cause for celebration, however, as the three different administrations that have occupied the White House since 2016 have made a mess of Lautenberg’s implementation. EPA’s recent move from a “conditions of use” approach in evaluating existing chemical risk to a “whole chemical” approach is one of many abrupt EPA policy shifts frustrating lawyers and confusing the public.  TSCA litigation is plainly in our future.

Lautenberg directs EPA to evaluate chemical risks. Under TSCA, EPA must assess available information on hazards and exposures for “the conditions of use of the chemical substance.” EPA’s risk evaluation final rule states “EPA will determine whether the chemical substance presents an unreasonable risk of injury … under each condition of uses [sic] within the scope of the risk evaluation.”

EPA issued final risk evaluations through 2020 for the first ten chemical substances as required under TSCA Section 6(b)(2). EPA determined which conditions of use posed unreasonable risks or, alternatively, that a condition of use posed “no unreasonable risk” and did not require the issuance of an unreasonable risk order. For example, EPA may have found that workers handling a substance with appropriate personal protective equipment (PPE) was not an unreasonable risk, but the absence of such PPE is an unreasonable risk.

EPA shifted course in 2021 and decided to issue a single risk determination for each chemical undergoing evaluation pursuant to its “whole chemical” approach. EPA then issued revised draft and final risk determinations for the original ten chemicals it had previously reviewed. Unsurprisingly, EPA found each chemical, as a “whole chemical substance,” presents unreasonable risk of injury when evaluated for all conditions of use, and it withdrew all earlier issued “no unreasonable risk” orders.

Why does this matter? If EPA determines that a condition of use for a chemical undergoing risk evaluation poses an “unreasonable risk,” EPA must mitigate that risk. EPA is authorized to impose, through rulemaking, such measures as risk mitigation measures, including banning a chemical, requiring warning and labeling measures, requiring the use of personal protective clothing and equipment, establishing exposure limits, and/or imposing discharge limitations.

If you are a chemical producer, your employees and neighbors might well be alarmed by news that the chemical to which they may be exposed poses “unreasonable risk” as a whole chemical. Consumer product companies are especially concerned, as a whole chemical finding of unreasonable risk can present legal and commercial challenges, including enhanced tort liability, breach of contract claims, and product sourcing uncertainty, as some chemical producers will exit the market even if EPA concludes that the specific conditions of use are not an unreasonable risk.

Legal issues raised by EPA’s approach include the Agency’s potential violation of TSCA science standards since TSCA subsections 26(h) and (i) require EPA to consider “best available science” based on the “weight of evidence” and “reasonably available information”. Moreover, under the Administrative Procedure Act’s notice and comment rulemaking requirements, EPA cannot lawfully “reevaluate” risk determinations and change them without amending the risk evaluation rule, and without modifying the underlying administrative record. Indeed, many believe the whole chemical approach makes TSCA a hazard-based law, even though TSCA is a risk-based statute.

EPA’s policy pivots have made counseling chemical stakeholders immeasurably more challenging. TSCA disallows judicial review of unreasonable risk determinations as such determinations are not final Agency action. Stakeholders must wait to appeal final risk management standards derivative of the risk determinations that are issued years after the risk findings. That is a long time to straddle the inferences that flow from the almost inevitable finding of “unreasonable risk” of injury under EPA’s whole chemical approach.