Chemical Mfrs. Ass'n v. E.P.A.

• Decision Date: 12 April 1990
• Docket Number: No. 88-4710,88-4710
• Citation: 899 F.2d 344
• Parties: , 20 Envtl. L. Rep. 20,837 CHEMICAL MANUFACTURERS ASSOCIATION, Allied Signal Incorporated, Ashland Oil Company, Georgia Gulf Corporation, Shell Chemical Company, and Texaco Chemical Company, Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 344

899 F.2d 344

31 ERC 1321, 20 Envtl. L. Rep. 20,837

CHEMICAL MANUFACTURERS ASSOCIATION, Allied Signal Incorporated, Ashland Oil Company, Georgia Gulf Corporation, Shell Chemical Company, and Texaco Chemical Company, Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.

No. 88-4710.

United States Court of Appeals Fifth Circuit.

April 12, 1990.

Julia A. Hatcher, Robert M. Sussman, Latham & Watkins, Washington, D.C., for petitioners.

Kaye A. Allison, U.S. Dept. of Justice, Land & Natural Resources Div., Washington, D.C., Mary Ellen Myers, Lee M. Thomas Administrator, E.P.A., Washington, D.C., for respondent.

Petition for Review of an Order of the Environmental Protection Agency.

Before KING, GARWOOD, and DAVIS, Circuit Judges.

GARWOOD, Circuit Judge:

Pursuant to the Toxic Substances Control Act (TSCA), 15 U.S.C. Secs. 2601-2629, respondent, the United States Environmental Protection Agency (EPA), promulgated a final rule, 53 Fed.Reg. 28,195 (1988), 40 C.F.R. Sec. 799.1285, requiring manufacturers and processors of the chemical cumene (isopropyl benzene) to perform certain toxicological testing of it to determine its health and environmental effects. Petitioners, the Chemical Manufacturers Association (CMA), a trade association representing the chemical industry, and five of its members engaged in cumene manufacturing or processing, bring the instant proceeding in this Court pursuant to TSCA Sec. 19, 15 U.S.C. Sec. 2618, to obtain judicial review of the rule and have it set aside.

Background

Statutory framework

The TSCA, enacted in 1976, P.L. 94-469, 90 Stat. 2003 et seq., provides, among other things, for the EPA to both substantively regulate the manufacturing and processing of chemicals, TSCA Sec. 6, 15 U.S.C. Sec. 2605, and to require health and environmental effects testing of chemicals by and at the expense of their manufacturers and processors. TSCA Sec. 4, 15 U.S.C. Sec. 2603. ¹ It is the latter authority--that to require testing--with which we are here concerned. In this connection, Congress declared, "It is the policy of the United States" that

"adequate data should be developed with respect to the effect of chemical substances and mixtures on health and the environment and that the development of such data should be the responsibility of those who manufacture and those who process such chemical substances and mixtures." TSCA Sec. 2(b)(1), 15 U.S.C. Sec. 2601(b)(1).

Implementing this policy, the EPA is authorized by TSCA Sec. 4(a), 15 U.S.C. Sec. 2603(a), to require testing under certain circumstances. ² It is required that the EPA find there to be "insufficient data and experience upon which the effects of" the manufacturing or processing of the chemical "on health or the environment can reasonably be determined or predicted," and that testing of the chemical "with respect to such effects is necessary to develop such data." It is also required that there be a finding either that the chemical's manufacturing or processing "may present an unreasonable risk of injury to health or the environment," TSCA Sec. 4(a)(1)(A)(i), or that, as stated in TSCA Sec. 4(a)(1)(B)(i):

"(B)(i) a chemical substance or mixture is or will be produced in substantial quantities, and (I) it enters or may reasonably be anticipated to enter the environment in substantial quantities or (II) there is or may be significant or substantial human exposure to such substance or mixture, ..."

Here the final rule was based entirely on TSCA Sec. 4(a)(1)(B). That section does not require, and the EPA did not here find, that manufacturing or processing of the chemical may present an unreasonable risk of health or environmental injury.

The testing ordered under TSCA Sec. 4 must be "to develop data" respecting those "health and environmental effects" as to which there is insufficient "data and experience and which are relevant to a determination" that the manufacturing or processing of the chemical "does or does not present an unreasonable risk of injury to health or the environment." TSCA Sec. 4(a).

TSCA Sec. 4(e) provides for the establishment of a committee of representatives from specified federal agencies and federally funded institutions--now known as the Interagency Testing Committee (ITC)--to recommend to the EPA those chemicals to which the EPA "should give priority consideration for promulgation of" a testing requirement under TSCA Sec. 4(a), and requires that the EPA, within a year from such a recommendation as to a given chemical, either initiate a rulemaking proceeding for testing under TSCA Sec. 4(a) or publish its reasons for not doing so. ³

Before requiring testing under TSCA Sec. 4, the EPA must follow the rulemaking standards of the Administrative Procedure Act, 5 U.S.C. Sec. 553, generally requiring publication of the proposed action and a minimum thirty-day period for participation in the rulemaking through comment, and also must allow for (and transcribe) oral, as well as written, presentation of "data, views, or argument," and make and publish "the findings described in Sec. 4(a)(1)(A) or 4(a)(1)(B)." TSCA Sec. 4(b)(5).

While the TSCA grants the EPA broader testing than regulatory authority, ⁴ Congress also plainly intended the EPA to consider the economic impact of any actions taken by it under the TSCA, ⁵ and expressly provided for judicial review of EPA testing (as well as regulatory) orders under the TSCA, with the review in each case to be under the substantial evidence rule. ⁶

Cumene

Cumene, a colorless liquid with a sharp odor, is produced or processed at a total of some sixteen plants in the United States, nearly all concentrated in the vicinity either of Houston or Philadelphia. Cumene is commercially manufactured by the reaction of benzene and propylene under elevated temperature and pressure in the presence of a catalyst, most often solid phosphoric acid. Production was approximately 3.3 billion pounds in 1984, with annual capacity estimated at about 4.4 billion pounds. Cumene is one of the top fifty chemicals produced in the United States. About five percent of cumene produced is exported, with some ninety-nine percent of the balance being used to make two other industrial chemicals, phenol and acetone, and in this processing cumene is chemically transformed and is present only in trace quantities in the acetone and phenol products distributed in commerce. Some of the plants produce the cumene they process, while others purchase it from producers.

Cumene occurs in the environment from a variety of sources apart from its commercial manufacturing and processing. Cumene is a natural product that is present in many foods, automobile and truck exhaust, and as a natural component of crude oil. It is also present in a variety of consumer products and in cigarette smoke. The major source of cumene in most urban environments is probably from hydrocarbon fuel combustion, primarily by land transportation vehicles such as cars and trucks.

Test rule proceedings

In November 1984, the ITC, in its fifteenth report to the EPA, recommended that cumene be considered for required testing for health effects--short-term genotoxicity, chronic effects including oncogenicity, and teratogenicity and reproductive toxicity--and for ecological effects, namely, acute and chronic toxicity to estuarine and freshwater fish and invertebrates. 49 Fed.Reg. 46,931, 46,939 (1984). In April 1985, the EPA held public meetings, participated in by CMA, in reference to the ITC recommendation concerning cumene testing.

In late November 1985, the EPA responded to the ITC recommendation by issuing its proposed test rule on cumene. 50 Fed.Reg. 46,105 (1985). The proposed rule includes these findings:

"EPA is basing the proposed testing requirements for cumene on sections 4(a)(1)(A) and (B) of TSCA.

"1. Under section 4(a)(1)(B), EPA finds that cumene is produced in substantial quantities and that there is substantial environmental release with the potential for substantial human exposure from manufacturing, processing, use, and disposal.... Workers potentially exposed to cumene range between 700 to 800. During manufacturing, processing, and use an estimated 3 million pounds of cumene are lost to the atmosphere per year in fugitive emissions. Although this amount is only approximately one fifth the estimated atmospheric release of cumene from land transportation vehicles, the industrial releases are localized and may result in more significant exposures to the general population living near these facilities than the more ubiquitous vehicle emissions. Over half of the cumene manufacturing and processing plants are located in two major metropolitan areas, thus increasing the potential human exposure to 15 to 16 million people. Airborne releases of cumene are not expected to substantially affect aquatic concentrations of the chemical; however, there is evidence of widespread release of cumene to the environment in industrial effluents.

"....

"2. Under section 4(a)(1)(A), EPA finds that cumene may present an unreasonable risk of mutagenic and oncogenic effects." 50 Fed.Reg. 46,110.

CMA submitted written comments on the proposed rule in February 1986, and in April 1986, the EPA held a one-day public hearing on the proposed cumene test rule at which CMA made a presentation in opposition to the proposed rule.

The EPA published its final rule requiring cumene testing on July 27, 1988, to be effective September 8, 1988. 53 Fed.Reg. 28,195 (1988), 40 C.F.R. Sec. 379.1285. The EPA considered the comments submitted by CMA in response to the proposed rule, and accepted some of them. The EPA recognized that CMA's presentation raised "some doubt" as to whether a study the EPA had relied on in connection with the proposed rule's findings concerning mutagenic and oncogenic effects was "positive or equivocal" and that other cumene test results submitted by CMA were negative in these respects, so that the EPA "has decided that...