California's Data Call-ins on Nanomaterials Raise Legal Issues

Date: Apr 16, 2009

    California's Department of Toxic Substances Control appears to be preparing for a data call-in on nanometal oxides, which would be the second data call-in on nanomaterials to come from the state. With nanotechnology on the rise, all signs point to more nanotech data call-ins. As potential targets of these data call-ins, manufacturers of nanomaterials should be aware that providing information in response to a data call-in may result in disclosure of trade secret information.

First nanotech data call-in focuses on carbon nanotubes.

    The first nanotech data call-in began on January 22 of this year, when DTSC mailed a formal request letter to select manufacturers of carbon nanotubes (CNTs). According to the letter (available here), DTSC is interested in CNTs because they are in use commercially, and because there are data gaps on analytical methods, toxicity, physiochemical properties, and fate and transport of CNTs. DTSC is requiring manufacturers to submit a variety of information, including:

· The products in which the manufacturers' CNTs are used.

· The sampling, detection, and measurement methods manufacturers use to monitor the presence of CNTs in the workplace and the environment.

· Methods used by the manufacturer to protect workers during the research, development, and manufacturing of CNTs.

· The safety of CNTs, in terms of occupational safety, public health, and the environment.

(A list of manufacturers who received the letter is available here.)

    The legal basis for DTSC's data call-in is Assembly Bill 289, which was enacted in 2006. (Cal. Health & Safety Code § 57018-57020.) The law allows a state agency to require reporting of certain information by chemical manufacturers. A state agency can request a broad range of information, including analytical test methods for a chemical, and "other relevant information" on the fate and transport of that chemical in the environment.

    Although the data call-in is authorized by California state law, chemical manufacturers outside of California could be affected by a data call-in as well. The law defines a "manufacturer" as "a person who produces a chemical in this state or who imports a chemical into this state for sale in this state." With the data call-in on CNTs, the majority of companies are based in California, but several are not.

    Only manufacturers that receive a letter and are subject to jurisdiction under the law must submit information under the program.

Data call-ins threaten trade secret information.

    A potentially thorny aspect of the data call-in law is its treatment of trade secret information. The law does allow manufacturers to claim that certain information, like chemical composition, is a trade secret. To do so, the manufacturer must notify the state agency of its claim to trade secrecy, identify the portion of information submitted that it contends is a trade secret, and provide documentation supporting its claim.

    However, the law allows a state agency to release trade secret information under certain conditions. If the agency receives a request from the public to release trade secret information, it will first mail a notice of the request to the manufacturer. To preserve the confidentiality of the trade secret, the manufacturer must act within 30 days from the mailing of the letter (not 30 days from the receipt of the letter). The agency will not release the trade secret information if, within 30 days from the mailing of the agency's letter, "the manufacturer obtains an action in an appropriate court for a declaratory judgment that the information is subject to protection under this section or for a preliminary injunction prohibiting disclosure of the information to the public and promptly notifies the state agency of that action." The manufacturer must then receive a declaratory judgment or preliminary injunction within 30 days of requesting it from the court.

    Manufacturers have an extremely narrow window to ensure that their trade secrets remain confidential. If you submitted trade secret information in response to a data call-in, and later receive a letter from a California about releasing your information to the public, you should consult legal counsel immediately. Acting quickly is crucial if you are to preserve your trade secret confidentiality.

Nanometal oxides are likely to be the focus for next data call-in.

    Recently DTSC announced that it was interested in requesting information on reactive nanometal oxides, such as aluminum oxide, silicon dioxide, titanium dioxide, and zinc oxide. At this point, DTSC is seeking to engage manufacturers in shaping the policy on these substances. DTSC wants to know more about manufacturing of these materials, as well as their use in products. Although this request for voluntary submission of information does not yet constitute a data call-in, a formal request for information is likely to follow, so manufacturers should be on the lookout for a letter from DTSC.

What are the next steps for nanotech in California?

    On March 19, DTSC held its third Nanotechnology Symposium, which addressed the data call-in program and other relevant topics. The symposium brought together speakers from the public and private sectors, including DTSC Acting Director Maziar Movassaghi. (The symposium agenda, with links to speaker presentations, is available here.)

    Mr. Movassaghi affirmed the agency's desire to include stakeholders in the decision-making process towards regulating nanotechnology. Some speakers felt that nano-specific regulations were appropriate for nanotechnology, while others discouraged treating nanotechnology as a separate class of materials. Speakers did agree that even though the use of nanotechnology is on the rise, there remain large data gaps in information on nanotechnology.

    If the symposium is any indication, we will see more nanotech data call-ins from California in the near future. In fact, DTSC has already identified the next targets for data call-ins: nanosilver and zero-valent iron. Moving forward, DTSC is looking to engage manufacturers in determining how to regulate nanomaterials, and the private sector should keep an eye out for opportunities to contribute to the discussion on nanotech in California.