12 F.4th 234
2d Cir.2021Background
- Methylene chloride is a solvent used in commercial and consumer paint-stripping products and has been linked to serious acute and chronic health harms (including deaths and cancers). EPA’s 2014 risk assessment identified those risks.
- EPA proposed in 2017 to regulate consumer and many commercial paint/coat removal uses under TSCA §2605(a); it considered alternatives (labeling, respirators, container-size limits, training/certification) and solicited extensive public comment.
- In March 2019 EPA finalized a rule banning manufacture, processing, and distribution in commerce of methylene chloride for consumer paint/coat removal and prohibited distribution to and by retailers (the Final Rule); EPA issued an ANPRM the same day to study a training/certification/limited-access approach for commercial uses.
- HSIA (industry) challenged the Final Rule, arguing the retailer-distribution ban improperly and incidentally restricts commercial users (who often buy small quantities from retailers) and that EPA inadequately considered costs.
- Environmental Petitioners argued TSCA required EPA to regulate commercial uses too; EPA responded that regulation of commercial uses remained under consideration. The court denied HSIA’s challenge (substantial evidence supports the Final Rule) and held Environmental Petitioners’ challenge prudentially unripe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether retailer-distribution ban is arbitrary because it incidentally restricts commercial users | HSIA: Ban prevents small commercial buyers who purchase from retailers; conflicts with EPA’s stated intent to preserve commercial access | EPA: §2605(a) required eliminating consumer risk; retailer ban reasonably achieves that while commercial access can shift to wholesalers | Court: Ban was a reasonable, evidence-supported means to eliminate consumer risk; not inconsistent with EPA’s approach |
| Whether EPA gave adequate notice re: the Final Rule’s definition of “retailer” | HSIA: Definition and effect weren’t a logical outgrowth of the Proposed Rule; inadequate opportunity to comment | EPA: Proposed Rule warned broad distribution restrictions and described difficulty disentangling consumer/commercial channels; Final Rule was less restrictive than some proposed options | Court: Final Rule was a logical outgrowth; notice-and-comment obligations satisfied |
| Whether EPA adequately considered costs to formulators, retailers, and distributors | HSIA: EPA underestimated formulators’ costs and failed to quantify retailer/distributor impacts | EPA: Used best reasonably available data, found substitutes feasible and new marketspace likely; costs to retailers uncertain and qualitatively addressed | Court: EPA’s quantitative and qualitative cost analyses were reasonable and supported by the record |
| Whether EPA was required to determine and regulate commercial uses in the 2019 Final Rule | Environmental Petitioners: TSCA required EPA to determine that commercial uses present unreasonable risk and to regulate them too | EPA: Still studying commercial options; issued ANPRM and later completed a 2020 risk evaluation; judicial review is premature | Court: Challenge is prudentially unripe; EPA’s consideration of commercial uses was appropriately deferred and is subject to forthcoming rulemaking |
Key Cases Cited
- Universal Camera Corp. v. NLRB, 340 U.S. 474 (defines substantial-evidence review standard)
- Consolo v. Federal Maritime Comm’n, 383 U.S. 607 (discusses weight of evidence and review)
- Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5th Cir. 1991) (EPA cost/benefit and TSCA review context)
- Chem. Mfrs. Ass’n v. EPA, 859 F.2d 977 (D.C. Cir. 1988) (TSCA ‘‘substantial evidence’’ review is more demanding)
- Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (notice-and-comment logical outgrowth principle)
- Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (arbitrary-and-capricious review and reasoned explanation)
- Abbott Labs. v. Gardner, 387 U.S. 136 (ripeness and premature judicial intervention)
- Fla. Power & Light Co. v. EPA, 145 F.3d 1414 (D.C. Cir. 1998) (ripeness fitness consideration)
- Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726 (deference to agency reconsideration and ripeness)