Fifth Circuit vacates TSCA methylene chloride rule in landmark ruling

© William A. Morgan stock.adobe.com

The US Court of Appeals for the Fifth Circuit has vacated the EPA's TSCA risk management rule for methylene chloride, granting industry petitioners a comprehensive victory in a case that tested the limits of the agency's authority to restrict existing chemicals under the statute. 

The landmark ruling directly addresses how the EPA must evaluate and regulate existing chemicals under the 2016 amendments to TSCA, delivering legal interpretations on questions that regulated parties, environmental groups and different presidential administrations have debated for years. 

For the regulated community, the immediate consequence of the court’s decision is that the risk management rule and underlying risk determination for methylene chloride no longer stand. The agency will need to reconsider both, within the statutory constraints imposed by the Fifth Circuit, pending any potential appeal of the ruling. 

More broadly, the ruling's statutory interpretations may reverberate through the EPA's broader existing chemicals programme, where risk evaluations and rulemakings for dozens of other priority chemicals remain in progress.

The decision could also influence legal challenges over additional TSCA rules pending in other appellate courts. 

Ruling at a glance 

In its ruling, the Fifth Circuit said that TSCA section 6 requires the EPA to: 

• make risk determinations on a use-by-use, rather than ‘whole chemical’, basis; 
• account for personal protective equipment (PPE) use in making risk determinations; 
• apply an 'unreasonable risk' threshold that allows for some risk; and 
• bear the burden of demonstrating that any regulatory measures it imposes are necessary to eliminate "actual, identified" unreasonable risk. 

Finding "that errors of law occurred, and substantial evidence did not support EPA’s decision", the Fifth Circuit vacated the 2024 TSCA section 6(a) rule for methylene chloride. Adopted in the last year of the Biden administration, the rule banned 40 of the solvent’s 53 conditions of use (COUs) and imposed stringent workplace requirements on the remaining 13. 

The court also threw out a revised risk determination that the EPA issued in November 2022 to amend a 2020 final risk evaluation completed at the end of President Trump’s first term. In doing so, the court rejected Biden-era policies that excluded consideration of PPE when evaluating substances and that mandated 'whole chemical' risk determinations.

A separate petition filed by the Sierra Club, which argued the rule did not go far enough, was denied on all three grounds it advanced. 

‘Whole chemical’ considerations 

The court held that the EPA violated TSCA when it determined in November 2022 that methylene chloride posed an unreasonable risk as ‘a whole chemical substance’, rather than issuing separate risk determinations for each COU, as the EPA had done during the first Trump administration. 

The term "conditions of use" appears in no fewer than 13 subsections of TSCA section 6, repeatedly tying a chemical’s uses to the agency’s regulatory determinations, the court said. "There is no getting around the conclusion that the TSCA focuses on both determining and regulating risk according to the actual, separate ‘conditions of use' for a given chemical or substance," the court said. 

Looking at the EPA’s own regulatory history, the court noted that the agency's 2017 risk evaluation framework rule expressly called for use-by-use determinations. Despite following that requirement for several years, the Biden administration reversed course in 2022 without adequate legal basis, the court said. 

"The agency lacked legal authority under the TSCA to determine that a chemical or substance poses unreasonable risk 'as a whole' rather than to evaluate each of its conditions of use," the court said. 

PPE assumptions 

The court also found the EPA's decision to assume workers do not wear PPE was contrary to the law. 

TSCA defines 'conditions of use' as the circumstances under which a chemical substance is "intended, known, or reasonably foreseen to be manufactured, processed, distributed in commerce, used, or disposed of". PPE use falls squarely within that definition, the court held. 

"According to the TSCA, EPA must account for PPE in its risk evaluations as a 'condition of use' if evidence reflects that PPE is actually used," the court said. "The use of PPE is plainly a critical 'condition' or 'circumstance'." 

The court noted that the US Occupational Safety and Health Administration (OSHA) has required employers to control occupational exposure to methylene chloride for decades, and that the EPA's own 2020 risk evaluation found no reason to presume non-compliance with existing federal requirements.

The agency's 2022 reversal of that assumption came without the reasoned explanation the law requires and was contradicted by the agency's simultaneous insistence that it did not believe there was widespread non-compliance with OSHA standards, the court said. 

The court concluded that the EPA's speculation that workers may not use PPE "lacked evidence, contrary to the TSCA's 'particularly demanding' standard of substantial evidence". 

Unreasonable risk threshold 

The Fifth Circuit also rejected the EPA's position that ‘unreasonable risk' is a technical determination within the agency's own discretion. 

"'Unreasonable risk' is not a factual finding but a prudential baseline set by the statute," and courts should make that interpretation, the court said, invoking the Supreme Court's 2024 Loper Bright decision, which ended judicial deference to agency interpretations of ambiguous federal statutes. 

The Fifth Circuit said ‘unreasonable risk’ under TSCA must allow for some risk, and that the relevant question is how much risk crosses that threshold. TSCA’s text, it said, "does not authorise anything like a precautionary or lowest possible risk principle". 

Citing its own 1991 Corrosion Proof Fittings decision, which overturned a TSCA ban on asbestos and effectively halted the EPA’s existing chemical programme until the 2016 Lautenberg amendments, the court reiterated that "Congress did not enact TSCA as a zero-risk statute". 

For the methylene chloride evaluation, the court found that the EPA's approach fell short. 

The methodology for determining the solvent’s risk was "rife with estimates and uncertainties" that were not supported by substantial evidence, it said (see box).

In summary, the court said the EPA’s risk analysis "did not accord with the best available science as the TSCA requires, and the results more closely approximate the precautionary principle than the statute's 'unreasonable risk' standard". 

Risk management authorities 

Despite having already identified sufficient grounds to vacate the rule, the court went on to address the EPA's approach to regulating methylene chloride in its TSCA section 6(a) risk management rule. Here, too, the court said the agency exceeded its statutory authority. 

The agency improperly justified its sweeping prohibitions for methylene chloride on the grounds that there was "a high degree of uncertainty as to whether most industrial and commercial users will be able to comply" with stringent exposure limits, the court said.

"EPA cannot simply ban a chemical substance whenever it is 'uncertain' whether a risk will remain reasonable," it said. "Instead, EPA is authorised to regulate 'to the extent necessary' to eliminate actual, identified 'unreasonable risk'."

The court also faulted the agency for banning some uses of methylene chloride on the basis that regulated industries had not demonstrated they could meet its exposure limits. 

TSCA, it said, "plainly requires EPA itself to bear the burden of showing a risk is unreasonable or a remedial measure 'to the extent necessary' eliminates unreasonable risk". Allowing an absence of public comments to support a prohibition "improperly shifted the burden to the regulated entities to prove that they could comply", the court said. 

The Fifth Circuit also found the EPA failed to meet its statutory obligation to consider whether technically and economically feasible alternatives to methylene chloride would be reasonably available before imposing prohibitions. 

The court found it was practicable – and required – for the EPA to engage seriously with the numerous comments explaining that no feasible alternatives exist for many COUs. 

But the EPA "repeatedly ignored tackling the economic feasibility of alternative chemicals or processes", the court said. 

Sierra Club challenge

The Sierra Club's petition, which argued the rule did not go far enough, was denied on all three grounds raised by the environmental group. 

The court upheld the EPA's decision to exclude fenceline community exposures from the formal scope of its risk evaluation, finding the agency had adequate basis to defer assessment of air and water exposure pathways for which it lacked a sufficiently developed methodology.

The court similarly rejected the Sierra Club's argument that the EPA had failed to adequately address risks to people with genetic susceptibility to cancer, finding the agency's use of a conservative 95th-percentile estimate for the general population was a reasonable approach. 

The court also found that the Sierra Club lacked standing on its third claim – that the underlying risk evaluation failed to consider the effects of methylene chloride on ozone depletion. The chain of causation regarding methylene chloride’s potential impacts on the ozone layer was too attenuated to establish the concrete, particularised injury the US Constitution requires, the court found. 

The case is East Fork Enterprises et al v EPA.