The U.S. Court of Appeals for the Fifth Circuit vacated the U.S. Environmental Protection Agency’s risk management rule for methylene chloride and the associated risk determination in a significant victory for Squire Patton Boggs clients East Fork Enterprises, Inc. and Epic Paint Company.
In East Fork Enterprises, Inc. et al. v. U.S. Environmental Protection Agency, the Fifth Circuit found that EPA’s rule was based on “errors of law and conclusions that were not supported by substantial evidence.” The court granted the petition for review filed by East Fork and Epic Paint, vacated the rule and associated risk determination, and remanded the matter to EPA for further proceedings. The court also denied a separate petition brought by the Sierra Club challenging the rule as insufficiently protective.
Methylene chloride is a widely used solvent found in a range of commercial and industrial applications, including adhesives and sealants, automotive products, and paint and coating removers. EPA’s rule prohibited 40 of the 53 conditions of use addressed by the agency and subjected 13 remaining commercial and industrial uses to stringent workplace requirements, including exposure limits, monitoring, reporting and respiratory and dermal protections.
The Fifth Circuit identified several significant deficiencies in EPA’s approach. Among other things, the court held that EPA lacked authority under the Toxic Substances Control Act (TSCA) to make a “whole chemical” unreasonable-risk determination rather than evaluating risk under individual conditions of use. The court also held that EPA acted contrary to law and without substantial evidence when it changed its prior assumption that workers use personal protective equipment (PPE) when exposed to methylene chloride.
The court’s ruling also addressed the Sierra Club’s separate challenges, which argued that EPA had failed to adequately consider risks to fenceline communities, individuals with genetic susceptibility to cancer, and people living at high elevations. The court rejected those claims.
“We are pleased that the court saw the flaws in the EPA’s approach,” said co-chair of the Appellate & Supreme Court Practice Keith Bradley. “The Fifth Circuit’s decision reinforces the importance of agencies adhering to the statutory requirements governing risk assessment and risk management, including that regulatory decisions be grounded in substantial evidence and tailored to the risks identified under the law.”
East Fork Enterprises and Epic Paint Company challenged EPA’s rule on the grounds that the agency had exceeded its statutory authority and that its conclusions were arbitrary and capricious and unsupported by substantial evidence.
The Squire Patton Boggs team representing East Fork Enterprises and Epic Paint Company included Keith Bradley, Allen Kacenjar, Sam Ballingrud and Kayla Mendez.
The decision is notable in the broader context of TSCA regulation because it marks a detailed appellate examination of EPA’s authority and methodology in developing risk management rules for existing chemicals. The Fifth Circuit emphasized that TSCA requires EPA to evaluate risk under the specific conditions of use and to regulate only to the extent necessary to address unreasonable risk.
