Appellate court questions EPA PFAS order for plastic containers

An Environmental Protection Agency rule limiting fluorination of plastic containers appeared to face skepticism from a federal appellate court panel on Feb. 5 as some judges questioned an EPA order against fluorination maker Inhance Technologies L.L.C.

While it's difficult to interpret how judges may rule based on their questions at oral arguments—which can often dive into nuanced legal issues—two of the three panel members at the U.S. Court of Appeals for the Fifth Circuit seemed to question the agency position.

"You get to eat your cake and have it too," said Judge Cory Wilson, when at one point he asked an EPA attorney about the agency's position in the 40-minute hearing where Inhance is challenging a Dec. 1 EPA order telling it to stop manufacturing by Feb. 28 or redesign its processes.

As well, Judge Priscilla Richman at another point questioned EPA's conclusions that the Inhance process, which it has used for several decades, should be classified as a "significant new use" under the federal Toxic Substances Control Act, and subject to tougher evaluation than if it was an ongoing use.

"This manufacturing process has been ongoing, so I'm not sure I understand your arguments," said Richman, who is the chief judge for the appeals court.

Daniel Martin, an attorney for the U.S. Department of Justice representing EPA, told the court Inhance should be regulated as a new use because the company did not come forward during the agency's rulemaking proceedings in 2020 and disclose that it was creating long-chain per- and polyfluoroalkyl substances, or PFAS, in its manufacturing.

If it had, he suggested, the agency would have considered it an ongoing use, as it did for other industries that disclosed their uses, including semiconductor manufacturing.

"Imagine two different companies that are both manufacturing long-chain PFAS, one conducts thorough testing of its chemical processes … [and] they come forward to the agency during the rulemaking," Martin said. "Then you take a different company that knows it makes long chain PFAS but hides that information from the EPA."

But Wilson pushed back on the government in his questioning.

"That's quaint, but what the agency did here was it didn't even list this industry as implicated by the rules when it was making the rules," Wilson said. "That goes right back to the fundamental problem here of notice of even whether the rule applied to Inhance."

But Martin said the burden of disclosure in the law is on companies.

He said when Congress rewrote the TSCA statutes in 2016, which was the first major revision of the law in over 40 years, it made it clear it was switching federal policy.

"Congress could not have had a more full-throated declaration of policy … explaining that the burden for testing, information sharing and understanding what chemicals are in an industry, the burden should be on the industry," he said. "They need to understand what they're doing."

But Inhance attorney Catherine Stetson, with Hogan Lovells US L.L.P. in Washington, said EPA did not give the company fair notice that the 2020 long chain PFAS rule applied to it.

She took issue with what she said was Martin's analogy of a "black hat" company that hides information from the EPA and a "white hat" company that comes forward and discloses it.

"Inhance was not wearing a hat, that was the problem," she said. "Inhance had no idea at the time that the rule came out that it manufactured PFAS and neither did EPA."

Inhance said the long chain PFAS chemicals created during its manufacturing were inadvertent.

Part of the regulatory and legal debate was whether those PFAS chemicals should be considered impurities, making them potentially exempt from some regulations, or if they instead were byproducts that face stricter regulation.

The company argued that EPA's order would force it to shut down and declare bankruptcy. But EPA said its order is appropriate given the public health danger from even tiny amounts of long chain PFAS.

Richman was appointed to the appellate court by President George W. Bush in 2005, while Wilson was appointed by President Donald Trump in 2020, and the third judge on the panel, James Graves, was appointed by President Barack Obama in 2011.