961 F.3d 160
2d Cir.2020Background
- Congress amended TSCA in 2016 to require a triennial federal inventory of mercury supply, use, and trade and directed EPA to require periodic reports from persons who “manufacture (including import)” mercury or mercury-added products to support that inventory.
- In 2018 EPA issued the Mercury Reporting Rule (40 C.F.R. pt. 713) requiring reporting by manufacturers/importers of mercury and mercury-added products but creating several exemptions.
- Three contested exemptions: (1) §713.7(b)(2) — exemption from all reporting for importers of assembled products that contain a mercury-added component; (2) §713.7(b)(3) — exemption from all reporting for domestic manufacturers of such assembled products provided they did not make/import the mercury-containing component; (3) §713.9(a) — partial exemption for high-volume mercury manufacturers/importers (report only amounts stored and distributed).
- Petitioners NRDC and Vermont challenged those exemptions as unlawful agency action (substantive Chevron claims and procedural State Farm claims for §713.9(a)). EPA defended the exemptions as consistent with TSCA’s command to avoid unnecessary or duplicative reporting and as minimizing compliance burdens.
- The Second Circuit upheld §713.7(b)(3) and §713.9(a) but vacated §713.7(b)(2), finding EPA failed to provide a reasoned explanation for exempting importers of assembled products with mercury-containing components.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Lawfulness of exemption for importers of assembled products (§713.7(b)(2)) | NRDC/Vt: TSCA requires reporting by any person who “manufactures (including imports)” mercury-added products; this categorical exemption unlawfully omits importers who introduce mercury into U.S. market. | EPA: importers of assembled products are sufficiently attenuated from intentional mercury addition; exempting them avoids undue compliance burdens and redundant reporting. | Vacated §713.7(b)(2). Court: EPA lacked a reasoned explanation — reporting would not be duplicative or necessarily unnecessary and burden rationale unsupported. |
| Lawfulness of exemption for domestic manufacturers of assembled products (§713.7(b)(3)) | NRDC/Vt: Exemption unlawfully narrows reporting duty for manufacturers of mercury-added products. | EPA: where component-makers or importers already report the component, requiring assembled-product manufacturers to report would be duplicative; TSCA permits avoiding duplicative reporting. | Denied review of §713.7(b)(3). Court: exemption is a reasonable interpretation under TSCA’s instruction to avoid unnecessary/duplicative reporting. |
| Lawfulness and procedure for high-volume partial exemption (§713.9(a)) | NRDC/Vt: Partial exemption unlawful and procedurally flawed (arbitrary tradeoff of information for cost savings); asynchronous reporting schedules could distort inventories. | EPA: partial exemption avoids duplication with preexisting Chemical Data Reporting (CDR) rule; records show overlapping data; EPA did not rely on unsupported cost-benefit tradeoff. | Denied review of §713.9(a). Court: procedural record supports EPA’s reliance on duplicative-reporting avoidance; partial exemption is a reasonable construction under Chevron. |
Key Cases Cited
- Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (Chevron deference framework for agency statutory interpretation)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (arbitrary-and-capricious/State Farm standard for rulemaking procedure)
- Catskill Mountains Chapter of Trout Unlimited, Inc. v. EPA, 846 F.3d 492 (2d Cir.) (application of Chevron and State Farm in this Circuit)
- Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 (agency interpretations under Chevron need only be reasonable policy choices)
- Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (agency must give adequate, reasoned explanation for rule changes or interpretations)
- Util. Air Regulatory Grp. v. EPA, 573 U.S. 302 (an agency interpretation inconsistent with statute’s design/structure is not entitled to deference)