Petition Asks D.C. Circuit Court to Review CBI Under TSCA Reporting

On November 9, 2023, the Environmental Defense Fund (EDF) filed a brief with the U.S. Court of Appeals for the District of Columbia against the EPA challenging federal regulations that will make it more difficult for the public to obtain information about chemicals the EPA reviews under the Toxic Substances Control Act (TSCA).

The court had a separate petition (Case No 23-1204) filed by the American Chemistry Council (ACC) and American Fuel & Petrochemical Manufacturers (AFPM) that it ordered consolidated with the EDF case. The U.S. Chamber of Commerce (CoC) and the National Association of Manufacturers (NAM) filed an amici curiae (friend of the court) brief in support of the ACC and AFPM petition.

Background

On May 12, 2022, the EPA published a proposed rule concerning the assertion and treatment of confidential business information (CBI) claims for information reported to or otherwise obtained by the EPA under TSCA. Amendments to TSCA in 2016 included many new provisions concerning the assertion, Agency review, and treatment of confidentiality claims. The proposed rules suggested procedures for submitting CBI claims in TSCA submissions and addressed “substantiation requirements, exemptions, electronic reporting enhancements (including expanding electronic reporting requirements), maintenance or withdrawal of confidentiality claims, and provisions in current rules that are inconsistent with amended TSCA.”

At that time, the AFPM submitted comments on the proposed rules that asserted:

1. The EPA should notify original CBI claimants of all disclosures and allow sufficient time to respond to inquiries or threats of disclosure.
2. The EPA should notify original CBI claimants of potential disclosures when information is obtained through another statute or program.
3. CBI from an original claimant should be protected from disclosure even if a chemical name or other confidential information has been submitted later without a CBI claim.
4. Information provided in patents shouldn’t affect any CBI claim.
5. The EPA should require a robust summary template only when a full health and safety study isn’t available.
6. The EPA should use normal communication methods in addition to the Central Data Exchange (CDX) to notify claimants of potential disclosures, clarifications, deficiencies, denials of protection, and disclosures.
7. The provisions of the final rule should take effect upon publication in the Federal Register and shouldn’t be retroactive.

The cornerstone of the AFPM’s comment is that failing to protect CBI could directly destroy “the competitive advantage enjoyed by many American manufacturing businesses.”

The CBI Rule

On June 7, 2023, the EPA final CBI Rule was published in the Federal Register. The rule became effective on August 7, 2023.

According to the EPA CBI website, the final rule includes:

• Changes to better ensure the scope of a CBI claim is clear and limited to information the submitter views as confidential. The final rule also narrows the type of information in health and safety studies that can be claimed as CBI.
• A provision to address overly broad CBI claims in public copies of TSCA submissions, especially health- and safety-related information, that specifies a process for the submitter to promptly correct those issues early in the CBI review. These changes are expected to remove ambiguity about the scope or validity of the claims.
• Expanded requirements for electronic reporting and uniform requirements to provide publicly releasable copies of certain documents like scientific studies, which would make more data available to the public more quickly.
• Requirements for electronic communication and maintaining accurate contact information to ensure required notices of CBI claims are delivered more quickly to the submitters.
• Clarifying language on how the EPA will handle information used in the TSCA program but obtained under other statutes that also have valid CBI claims under those statutes. This will ensure consistency with the Agency’s duty to make information publicly available when it’s legally able to do so.
• Clear, uniform guidance on requirements for asserting and maintaining CBI claims, including a standard set of substantiation questions used to support a CBI claim.
• Requirements for electronic reporting of nearly all CBI claims, with enhancements to reporting tools that will prevent or mitigate common procedural errors.
• A new section of the TSCA regulation to centralize and standardize how TSCA CBI claims must be asserted and substantiated.
• Requirement that submitters use an appropriate “Organisation for Economic Co-operation and Development” harmonized template, when available, when submitting health and safety information.

On August 10, 2023, the EPA temporarily waived some of the CBI reporting requirements because the Agency hasn’t yet completed the testing and development of some of the necessary electronic tools needed to submit certain required reports.

EDF’s petition

“EDF is challenging key aspects of the new regulations, including what constitutes [CBI] and thus may be kept secret, and the lengths to which companies are allowed to go to keep the public from knowing what is in the chemicals they produce and how those chemicals may threaten people’s health,” states an EDF press release.

“More transparency around the chemicals we’re exposed to is essential to protect our health,” said Samantha Liskow, lead counsel for Healthy Communities at the EDF, in the EDF press release. “That is why EDF has long advocated to maximize public access to information about chemicals. Congress wanted the public to play an important role in the evaluation and regulation of toxic chemicals. To do so, robust information about chemical risks must be accessible. We encourage EPA to carry out its responsibility under the law to ensure the public’s right to know about toxic chemicals is protected.”

The EDF’s brief asks the court to consider the following issues:

The EPA unlawfully narrowed the TSCA definition of “health and safety study.” The EDF petition states that Congress provided a broad definition of “health and safety study” under TSCA:

“The term ‘health and safety study’ means any study of any effect of a chemical substance or mixture on health or the environment or on both, including underlying information and epidemiological studies, studies of occupational exposure to a chemical substance or mixture, toxicological, clinical, and ecological studies of a chemical substance or mixture, and any test performed pursuant to this chapter.”

In creating the CBI Rule, the EDF argues that the “EPA narrowed Congress’ expansive definition by simply declaring multiple categories of information from a health and safety study ‘not part of a health and safety study,’ thereby shielding that information from public disclosure.”

In doing so, the EDF says the EPA:

1. Impermissibly rewrote TSCA, and
2. Failed to provide a reasoned basis for its redefinition and to address the value of the withheld information to the public.

The EPA unlawfully prevents access to chemical identities in documents submitted in new chemical applications. “EPA’s Rule violates TSCA because, after a chemical company brings a new chemical onto the market, the Rule does not require the company to substantiate or EPA to review the company’s earlier claims—made in documents including health and safety studies—that the chemical identity is confidential,” the petition states.

Specifically, the EDF argues this action is unlawful because:

1. The EPA violated TSCA by failing to require substantiation and review of confidentiality claims for chemical identity in documents submitted before the chemical’s commercialization.
2. The EPA reversed longstanding regulations requiring substantiation and review without acknowledging or adequately explaining the change.

The EPA’s Rule improperly treats as discretionary its mandatory duties under TSCA. “EPA’s Rule gives the Agency discretion to grant CBI claims even where they do not meet TSCA’s minimum requirements, and further gives EPA discretion to not publish information where TSCA requires publication,” adds the EDF petition. “In some cases, the Agency has replaced provisions mandating disclosure with provisions creating discretion—and it has not adequately explained these changes.”

Specifically, the petition argues:

1. The EPA’s Rule allows unwarranted approval of confidentiality claims and the withholding of information to which the public is entitled under TSCA.
2. The EPA replaced mandatory provisions requiring denial of improper claims and public disclosure of information with discretionary provisions without adequate explanation.

“The new regulations’ narrow definitions of key terms in the law, which invites companies to withhold information relevant to evaluating chemicals’ potential risks,” the EDF press release says in summary of its position.

Industry concerns about the CBI Rule

While the EDF wants more transparency, industry groups are pushing for more protection for CBI.

In comments submitted when the rule was proposed, the ACC wrote:

“There can be little doubt that the public has an important interest in access to information utilized by EPA in carrying out its responsibilities under TSCA, but this interest must be balanced against the need to protect commercially sensitive and confidential information. Congress, in enacting TSCA, declared that EPA’s exercise of authority under the statute must not ‘impede unduly or create unnecessary economic barriers to technological innovation.’ Without adequate protection of [CBI], innovation will be stifled. The reasons for this are clear: a company has little incentive to invest tens or hundreds of millions of dollars to develop innovative, sustainable chemistry if the confidential information needed to create that chemistry will be made public by EPA and freely available to global and domestic competitors. Thus, failing to provide adequate protection for [CBI] can lead to severe economic and societal costs.”

The gist of the CoC and NAM’s argument in its amici curia brief is concern about third-party disclosures of CBI.

“EPA’s Rule unlawfully and unnecessarily risks disclosure of a company’s [CBI] by a third party,” the brief states. “In the preamble, EPA states that ‘if any submitting entity chooses not to assert and/or substantiate a confidentiality claim for a chemical identity as required by [TSCA], the chemical identity is no longer entitled to confidential treatment and may be published on the public portion of the TSCA Inventory.’ This means that entities downstream from the original manufacturer of a chemical substance—like importers and processors that are also subject to TSCA’s reporting requirements—could inadvertently waive the confidentiality of a substance’s chemical identity over which a manufacturer has already asserted and substantiated a valid CBI claim.”

Specific arguments in the brief state:

1. The EPA itself recognizes that the Rule risks third-party waiver of a company’s CBI claims.
2. The Rule allows a company’s CBI claims to be waived in downstream third-party reporting.
3. The EPA acknowledged this problem but failed to address the issue before implementing the Rule.
4. The EPA’s promise to address this problem in future rules is contrary to TSCA Section 14.
   1. The EPA’s promise to address this problem in future rules is contrary to TSCA Section 14, which sets forth “precise and limited circumstances in which disclosure of a substance’s CBI is allowed, and third-party non-substantiation is not among them.”
   1. The EPA’s attempts to justify its decision under TSCA aren’t responsive.
5. The EPA’s promise of a future solution is also arbitrary and capricious.
6. The Rule’s creation of a risk of waiver is irrational and unreasonable.
7. The EPA fails to acknowledge or address the significant harms caused by its Rule.

Strange bedfellows

It’s clear that the EDF and the industry organizations have opposing goals regarding the CBI Rule, which makes them strange bedfellows in having their petitions joined in the D.C. Circuit Court of Appeals. However, it’s clear that both groups, for their own reasons, would like to see the Rule vacated.

The EDF petition requests that the court grant the petition for review and vacate the rule entirely or, at least, vacate “the challenged provisions and (instruct) the Agency to issue regulations consistent with the Court’s decision.”

With so much controversy regarding the CBI Rule, it’s obvious that future changes are necessary.