Last month, the U.S. Environmental Appeals Board (EAB) issued a rare and much-anticipated opinion interpreting the continuing violations doctrine and section 8(e) of the Toxic Substances Control Act (TSCA) in In re Elementis Chromium, TSCA Appeal No. 13-03 (March 13, 2015). The EAB overturned the November 2013 ruling [PDF] by the Administrative Law Judge (ALJ), which found that Elementis Chromium, Inc., a manufacturer of chromium chemicals, had violated TSCA § 8(e) by failing to report to EPA an epidemiological study on hexavalent chromium. In its March 13 decision, the EAB affirmed the ALJ in finding that the “continuing violations” doctrine applies to § 8(e) violations, thus rejecting Elementis’ statute of limitations argument. However, the EAB also held that Elementis had not violated TSCA § 8(e) because the corroborative information reporting exemption applied, and vacated the $2.5 million penalty imposed by the ALJ.
TSCA § 8(e) requires the immediate reporting to EPA of “information which reasonably supports the conclusion” that a substance “presents a substantial risk of injury to health or the environment.” In this case, a trade group of which Elementis was a member commissioned an epidemiological study on exposure to hexavalent chromium and lung cancer. EPA conducted a similar study in 2000, based on data from one facility, while the Elementis study, which finished in 2002, involved multiple “modernized” manufacturing plants. Both studies concluded that there was a positive association between hexavalent chromium exposure and lung cancer. EPA learned of the Elementis study in a 2006 Washington Post article, subpoenaed the study in 2008, and filed an administrative complaint against Elementis in 2010.
The EAB rejected Elementis’ claim that the general five-year federal statute of limitations barred EPA’s enforcement action. Elementis argued that the alleged violation accrued in 2002, when the company obtained the study, so the statute of limitations expired in 2007. However, the EAB found that the continuing violations doctrine, a special rule of accrual meaning that the period of limitations runs anew each day, applies to TSCA § 8(e), meaning that the limitations period only begins to run once the contested information is finally reported. The EAB concluded that the plain language and substance of § 8(e) imposes a continuing obligation, and violations of such are also continuing in nature. In Elementis, the company’s “last act of non-compliance” occurred on November 17, 2008, when the study was submitted to EPA, so the agency’s 2010 administrative complaint was within the five-year period.
Next, the EAB affirmed that the entire study was presumptively reportable as information which reasonably supports the conclusion that a substance presents a substantial risk of injury, rejecting Elementis’ argument that the only reportable information was “the single sentence conclusion regarding an elevated risk of cancer.” Instead, the EAB adopted a broad interpretation of the terms “information” and “reasonably supports,” concluding that Congress intended to address “the underlying data, assumptions, methodology, and analyses that actually provide the verification, corroboration, and substantiation” of the conclusion that a chemical poses a substantial risk of injury.
Nevertheless, the EAB found that the contested study was ultimately exempt from the reporting obligation because EPA established via guidance an exemption for information that is “corroborative of well-established adverse effects.” The EAB diverged from the ALJ’s analysis in finding that the Elementis study addressed a well-established adverse effect, i.e., increased incidence in lung cancer is a well-established adverse effect of exposure to hexavalent chromium. In contrast, the ALJ focused on the dose-response relationship between chromium and cancer, which the EAB characterized as an inapposite description of the potency of the chemical or conclusion about risk.
The EAB further found that the study was “corroborative” of well-established adverse effects, based not on the ordinary meaning of “corroborative,” but on agency guidance documents. This guidance describes that information is non-corroborative when it shows “the effects of a chemical are of ‘a more serious degree or different kind’ than previously perceived.” Therefore, information would be corroborative “if it shows that effects are less severe, they occur only at higher doses, or they occur in a species or strain of test animal, or by a route of exposure, that has been previously documented.” In this case, the study “only revealed statistically significant lung cancer effects at a substantially higher level” than in EPA’s own study. Thus, the Elementis study qualified for the exemption, although the EAB noted that it would have affirmed the ALJ’s decision but for EPA’s self-imposed limitation on “the broad reach of the statute with its interpretation of what information EPA is ‘adequately informed of’ in its guidance documents.”
The Elementis decision raises several interesting issues under TSCA, especially concerning the breadth of information companies must report under § 8(e) and which other TSCA sections might be interpreted as imposing continuing obligations. How EPA reacts to the decision will be instructive, especially if it chooses to refine or redefine its guidance on the corroborative information reporting exemption. Alternatively, Elementis may be of interest to legislators and stakeholders currently involved in negotiating a new framework for TSCA.