State of California v. United States Environmental Protection Agency

Background

The opinion addresses two cases brought against the Environmental Protection Agency (EPA) and its Administrator, Andrew Wheeler. The plaintiffs in the first case were nonprofit public health and environmental organizations, led by the Asbestos Disease Awareness Organization. The plaintiffs in the second case were 10 states, led by California, and the District of Columbia.

The plaintiffs challenged the EPA’s denial of petitions asking it to begin rulemaking under Section 21 of the Toxic Substances Control Act (TSCA). The petitions sought changes to the Chemical Data Reporting rule, including elimination or limitation of exemptions for asbestos-containing articles, impurities, naturally occurring substances, and processors; a lower reporting threshold; additional reporting about asbestos imports and uses; earlier reporting; and treatment of asbestos reports as not protected by confidential-business-information rules.

The EPA denied the petitions, stating in part that it already possessed the relevant information, that additional reporting would be duplicative or unnecessary, that the requested changes could not inform the ongoing risk evaluation in time, and that disclosure of confidential business information was not appropriate through the petition process.

The court had previously held that the plaintiffs’ claims were properly reviewed under Section 706 of the Administrative Procedure Act (APA), rather than under the de novo review provision in TSCA Section 21. The court then considered the parties’ cross-motions for summary judgment.

Standing

The court held that the organizational plaintiffs had standing. The EPA stipulated to the standing of the Asbestos Disease Awareness Organization but disputed the standing of the other organizations. The court found that the organizations showed informational harm from lacking asbestos data and organizational harm because inadequate information diverted resources from their public-health, education, and advocacy missions. The court also found causation and concluded that a favorable decision could redress those injuries.

The court also held that the plaintiff states had standing. State agencies used EPA reporting data for workplace-hazard information, environmental-health programs, exposure assessments, and other public-health efforts. The court found that incomplete asbestos information could impair those activities and could hinder the states’ ability to show a priority need for certain TSCA-related grants.

EPA’s information-gathering duties

TSCA requires the EPA to consider “reasonably available information” when conducting chemical risk evaluations. The court explained that this includes information the EPA possesses or can reasonably generate, obtain, and synthesize, taking into account the deadlines for completing the evaluation. Companies subject to the Chemical Data Reporting rule must report information known to them or reasonably ascertainable by them.

The court emphasized that the EPA has substantial authority to enforce reporting requirements, including the ability to seek information, inspect facilities, issue subpoenas, compel submissions, and pursue civil or criminal penalties for violations. The court concluded that complete and adequate information was important to the EPA’s asbestos risk evaluation and later regulatory decisions.

Information gaps

The court identified three significant reporting gaps. First, the rule exempted chemicals imported as part of an article. The EPA had identified some asbestos-containing articles, including sheet gaskets, automotive brakes and linings, vehicle-friction products, and brake blocks. But materials identified in United States Geological Survey reports included many additional products, and the EPA acknowledged that the import volume of asbestos-containing products was unknown. The court found that the EPA had not adequately captured the quantity of imported articles or their downstream uses and exposures.

Second, the rule exempted certain impurities and byproducts not used for commercial purposes. The plaintiffs cited studies reporting asbestos contamination in makeup, crayons, and other talc-based consumer products. The EPA argued that the available testing came from independent laboratories rather than companies subject to reporting. The court found that the EPA could not determine what information was reasonably ascertainable to reporting companies without requiring them to provide the information or investigating whether they had access to third-party testing.

Third, the court found that the EPA’s treatment of processors was inadequate. TSCA requires reporting rules for persons who process chemical substances, but the EPA had not required processors to report asbestos information since 2011. Instead, it relied substantially on importers’ descriptions and voluntary communications from companies. The court concluded that importers might not know the details of downstream processing and that the EPA had not rationally explained why it had not required more complete processor reporting.

The court also found that the EPA’s modeling could not cure the missing information. Although the EPA could use models and professional judgment to address uncertainty, the models depended on reliable and sufficiently comprehensive raw data. The court relied in part on the EPA’s Science Advisory Committee on Chemicals report, which identified inadequate information about consumer and occupational exposures and recommended additional mandatory reporting.

APA analysis

Under the APA, a court may set aside agency action that is arbitrary and capricious. An agency must examine relevant data and provide a satisfactory explanation for its decision. The court found that the EPA had not taken the required “hard look” at the value and availability of the additional asbestos information sought by the plaintiffs.

The court held that the EPA’s conclusion that additional reporting would be duplicative was not rational. TSCA directs the EPA, to the extent feasible, not to require unnecessary or duplicative reporting, but the court found no categorical prohibition on collecting information that might overlap with existing data. Because the EPA did not know the full range of information available to reporting companies, it could not reasonably conclude that further reporting would provide nothing useful.

Disposition

Judge Edward M. Chen granted the plaintiffs’ motions for summary judgment and denied the EPA’s cross-motions for summary judgment. The court remanded the matter to the EPA with instructions to proceed consistently with the order. It directed the EPA to amend its Chemical Data Reporting rule under TSCA Section 8(a) to address the information-gathering deficiencies identified in the opinion. The court retained jurisdiction to ensure compliance and stated that the order disposed of Docket Nos. 49 and 52 in Case No. 19-cv-00871 and Docket Nos. 60 and 63 in Case No. 19-cv-03807.