A Fifth Circuit Reset for TSCA?
What happens when a court challenges the foundation of EPA’s chemical regulatory framework? In this candid TSCA Roundtable, Keller and Heckman attorneys Herb Estreicher, David Fischer, Tom Berger, Eric Gotting, Greg Clark, Lauren Gates, and Allison Payne discuss via an interview style the industry implications of East Fork Enterprises v. EPA. This dynamic group with decades of TSCA experience, including significant EPA insider perspectives, dives into what happens when a court challenges the foundation of EPA’s chemical regulatory framework and explores how the Fifth Circuit’s decision could reshape chemical risk evaluations, and EPA’s regulatory approach. They also explain why companies should place credible scientific and legal evidence into the administrative record long before litigation begins.
“This is not just a methylene chloride case”
Herb Estreicher: Let’s start with the significance of the decision. The Fifth Circuit vacated EPA’s methylene chloride risk management rule under Section 6 of the Toxic Substances Control Act and remanded the matter to EPA. The rule had prohibited numerous commercial, professional, and industrial uses of methylene chloride while allowing certain other uses to continue under stringent worker-protection requirements.
Herb Estreicher: The decision rests on four especially important propositions: EPA may not determine unreasonable risk using a “whole chemical” approach; EPA must take actual use of personal protective equipment into account; unreasonable risk does not mean zero risk; and banning a use should be a last resort rather than EPA’s opening position. Those holdings have implications extending well beyond methylene chloride.
David, should the decision be understood as a narrow ruling about one chemical, or as a broader reinterpretation of TSCA Section 6?
David Fischer: It is unquestionably broader. The opinion represents a fundamental reinterpretation of Section 6 as amended by the Lautenberg Chemical Safety Act. The court endorsed two positions EPA had taken during the first Trump administration: evaluating each condition of use separately and accounting for PPE in determining risk.
David Fischer: The consequences potentially reach every risk evaluation and risk management rule proposed or finalized using the contrary approaches. Revising the “whole chemical” and PPE portions may be manageable because EPA has already performed some condition-specific analysis. The more difficult task will be reconsidering what qualifies as “unreasonable risk.” Existing evaluations and rules were built on an understanding of that term that the court has now called into question.
From the “whole chemical” to individual conditions of use
Allison, what does rejection of the whole-chemical approach mean in practice?
Allison Payne: EPA will have to make an individual risk determination for each condition of use. Conditions that EPA determines present an unreasonable risk may proceed to risk management. For conditions found not to present unreasonable risk, EPA will need to issue orders under TSCA Section 6(i).
Allison Payne: Those Section 6(i) determinations are final agency actions and can be challenged immediately. We saw challenges involving such determinations during the first round of risk evaluations, including challenges involving 1,4-dioxane and methylene chloride. Those cases did not fully play out because the change in administrations brought a corresponding change in policy. Going forward, however, EPA should anticipate litigation over individual determinations that particular conditions of use do not present unreasonable risk.
Herb Estreicher: A no-unreasonable-risk determination can also have significant preemption consequences for state regulation. For a company whose use receives such a determination, defending the determination against a legal challenge may therefore be particularly important.
PPE belongs in the risk evaluation
Tom, how did the court address workers’ use of respirators, gloves, and other protective equipment?
Tom Berger: EPA’s initial methylene chloride assessment considered 53 conditions of use. It determined that 47 presented risks to health, while six did not require risk-management rulemaking. In later work, EPA reversed the assumption that workers used PPE and instead evaluated exposure on the assumption that they did not. Not surprisingly, the later analysis produced substantially higher estimated workplace exposures.
Tom Berger: The Fifth Circuit held that when reasonably available evidence shows PPE is actually used, EPA must account for that use during the risk-evaluation phase. PPE is not simply a control to be imposed after EPA has already determined that a use presents unreasonable risk. It is part of the circumstances under which the chemical is used and therefore belongs in the underlying assessment.
Tom Berger: EPA had also suggested that some workers may fall outside OSHA coverage and that some employers may fail to comply with applicable requirements. The court rejected an approach founded on unsupported assumptions. The earlier EPA position had been that, absent case-specific evidence to the contrary, the agency should not presume noncompliance with existing regulatory programs and worker-protection standards.
What makes the comparison with OSHA especially important?
Tom Berger: OSHA has a methylene chloride-specific standard at 29 C.F.R. § 1910.1052. In our discussion, we compared OSHA’s 25-parts-per-million eight-hour time-weighted average and 125-ppm short-term exposure limit with the substantially lower exposure limits in EPA’s rule: 2 ppm for the eight-hour average and 16 ppm for the short-term limit. That difference raises an important institutional question about EPA’s and OSHA’s respective roles in addressing workplace exposure.
Tom Berger: TSCA Section 9 provides a mechanism under which EPA may refer a workplace risk to OSHA when OSHA is positioned to address it. The agencies also have a 2024 memorandum of understanding addressing coordination at a general level. The larger policy question is whether workplace risks involving long-regulated chemicals should be managed principally under OSHA’s occupational-safety framework or through TSCA risk-management rules.
What does “unreasonable risk” actually mean?
David, the court devoted substantial attention to “unreasonable risk.” What guidance does the opinion provide?
David Fischer: The court rejected the idea that any risk is necessarily an unreasonable risk. In its view, EPA’s approach had come too close to a precautionary principle associated with statutes that expressly adopt such a standard. TSCA does not expressly do so.
David Fischer: At a minimum, unreasonable risk cannot mean zero risk. EPA must support a determination of unreasonable risk with substantial evidence. The question is not simply whether a hazard or some increment of risk exists, but whether the record demonstrates a risk that is legally unreasonable under TSCA.
David Fischer: The court criticized EPA’s treatment of the scientific record, including its discounting of relevant human studies and reliance on a rat study involving extreme exposures, disputed results, and substantial extrapolation. The opinion signals that EPA cannot select one study while disregarding a broader body of evidence without adequately explaining its reasoning. It also distinguished significant adverse effects from temporary or transient impacts.
David Fischer: The court was also skeptical of inflated margins of exposure or uncertainty factors. That scrutiny may require EPA to explain more rigorously why a particular benchmark is scientifically and legally appropriate rather than treating conservatism itself as sufficient justification.
Did the court establish a numerical cancer-risk threshold?
David Fischer: No. The opinion discussed EPA’s use of cancer-risk levels, including one-in-one-million risk for the general population and one-in-ten-thousand for occupational exposure, but it did not identify a numerical threshold that categorically constitutes unreasonable risk. My own view is that the opinion casts doubt on rigidly applying highly precautionary numerical benchmarks under TSCA without additional justification. But the court did not supply a replacement number.
Herb Estreicher: The Supreme Court has discussed a one-in-one-thousand level as “significant risk” in the OSHA context. My view is that “unreasonable risk” under TSCA should require something more than merely identifying a significant risk, although the application of that principle will have to be developed through agency action and future cases.
A “hard look” at EPA’s evidence
Eric, how searching was the Fifth Circuit’s review of EPA’s scientific judgments?
Eric Gotting: Courts traditionally defer to agencies on complex scientific and technical issues, but the degree of deference varies. At one end is highly deferential review. At the other is the “hard look” doctrine, under which a court examines whether an agency relied on unsupported assumptions, failed to consider relevant evidence, inadequately explained its treatment of studies, reached conclusions contrary to important evidence, or ignored common sense.
Eric Gotting: TSCA’s judicial-review provision applies a substantial-evidence standard. Courts have interpreted that requirement to call for a more rigorous examination of the agency’s reasoning and the entire administrative record, including evidence that cuts against the agency’s conclusion.
Eric Gotting: That is what happened here. The court criticized EPA for relying on a single study for both acute and chronic issues, failing to explain its treatment of relevant human studies, applying assumptions and uncertainty factors that advanced a precautionary approach, and not adequately responding to material comments filed during the rulemaking. For the most part, the court focused on flaws in EPA’s decision-making process rather than independently resolving the underlying science.
Eric Gotting: The opinion may provide judges in future Section 6(a) cases with a roadmap for reviewing EPA’s work. Other judges may afford the agency somewhat more deference, but the decision reinforces the importance of a complete administrative record.
What does that mean for companies participating in EPA rulemakings?
Eric Gotting: Companies need to participate early. Judicial review normally proceeds on the administrative record, meaning the material that was before EPA when it acted. A company should submit its studies, workplace-exposure information, PPE data, and legal and scientific analyses during the comment period. If the material is not in the record, a reviewing court may have no basis to consider it later.
Greg Clark: The hard-look standard also complicates any effort by EPA to repair existing evaluations quickly. EPA has continued calculating risk benchmarks for individual conditions of use, so converting a whole-chemical conclusion into condition-specific determinations might initially appear straightforward. But the court did more than reject the format of EPA’s final determination. It examined the scientific record and addressed the meaning of unreasonable risk. EPA may therefore need substantial additional work before an existing evaluation can withstand judicial review.
What can EPA do next?
Lauren, EPA is also operating under judicially supervised deadlines for completing risk evaluations. What procedural options does it have?
Lauren Gates: EPA can attempt to negotiate revised deadlines with Earthjustice and ask the court to approve them. If negotiations fail, the agency can independently ask the court for additional time and rely on the Fifth Circuit’s decision as part of its justification.
Lauren Gates: EPA otherwise must decide whether to proceed under the existing deadlines and modify its ongoing evaluations to account for the opinion. Reconsidering the agency’s use of scientific studies could delay current work. EPA must continue applying the existing TSCA framework rule until a replacement framework rule is finalized, and implementing a new framework would itself require procedural adjustments.
Is the methylene chloride rule gone nationwide?
Eric, the Fifth Circuit encompasses Texas, Louisiana, and Mississippi. Does vacatur necessarily have nationwide effect?
Eric Gotting: Vacatur of a nationwide rule is generally understood to eliminate the rule nationally, rather than simply enjoin enforcement against particular parties. There is, however, a doctrine known as agency non-acquiescence. Under that theory, an agency may argue that it can continue applying its rule outside the circuit that rejected it, at least until another circuit or the Supreme Court resolves the question.
Eric Gotting: Within the Fifth Circuit, the rule could not be enforced once the judgment becomes final and the mandate issues. Whether EPA would attempt enforcement elsewhere under a non-acquiescence theory is a separate policy question.
What should companies do in the meantime?
Tom Berger: Companies subject to OSHA’s methylene chloride standard should continue complying with that standard. Whether a company should continue following the separate requirements of EPA’s vacated rule presents a more complicated question that depends on finality, the mandate, location, the nature of the use, and EPA’s response.
Eric Gotting: Other TSCA Section 6(a) rules remain on the books unless they have been withdrawn or vacated. Within the Fifth Circuit, EPA may face serious barriers to enforcing another rule based on the same whole-chemical reasoning. Elsewhere, the Fifth Circuit’s decision is persuasive rather than controlling authority. A company defending an enforcement action may be able to challenge the underlying rule and cite the decision, but the scope of that challenge would have to be resolved in the particular case.
The implications for enforcement
Suppose EPA brings a major enforcement action under another Section 6(a) rule. Can the defendant rely on the Fifth Circuit’s reasoning?
Eric Gotting: Yes. An enforcement action would likely begin in federal district court. A defendant could argue that EPA is attempting to enforce a rule built on reasoning another circuit has found unlawful. The threshold fight may concern whether the defendant can challenge the rule as a whole or only the provisions being enforced against it. That question would have to be resolved before any trial on the remaining issues.
Lauren, how might an EPA administrative law judge approach the same argument?
Lauren Gates: I believe an administrative law judge would find the Fifth Circuit’s analysis highly persuasive, particularly where the challenged rule relied on the same approaches criticized in the methylene chloride case.
What should EPA, Congress, industry, and environmental groups do?
Herb, how do you expect the principal stakeholders to respond?
Herb Estreicher: EPA’s most logical course would be to seek additional time for pending evaluations, finalize a legally defensible risk-evaluation framework, and reconsider final rules that rely on approaches the Fifth Circuit rejected. Any such action would almost certainly be challenged, but continuing to build new decisions on a legally vulnerable foundation creates its own litigation risk.
Herb Estreicher: I do not expect near-term legislation. Over a longer horizon, however, Congress may revisit Section 6 if the existing process continues to produce years of evaluations, rules, and litigation without a durable regulatory outcome. Reopening Section 6 could also create an opportunity to address persistent concerns about the new-chemicals program under Section 5. Those are predictions, not statements of settled congressional plans.
Herb Estreicher: For industry, the lesson is vigilance. A company should not dismiss the decision merely because it does not use methylene chloride. Section 6 is intended to provide a framework for evaluating existing chemicals generally. Companies should treat risk evaluations and rulemakings as proceedings that may ultimately be reviewed in court. Comments should contain strong science, relevant exposure information, legal analysis, and supporting studies, not simply a list of objections.
Herb Estreicher: Environmental organizations are likely to challenge deregulatory steps and may ultimately press Congress to strengthen Section 6. Any legislative negotiation could involve a tradeoff between a more stringent existing-chemicals program and reforms to Section 5. Again, that is our assessment of possible future dynamics, not an account of announced legislation.
Does the opinion also affect new chemicals under Section 5?
David, the case arose under Section 6. Why might it matter under Section 5?
David Fischer: Because both provisions use the concept of unreasonable risk. EPA should not apply one conception under Section 5 and a fundamentally different conception under Section 6. The opinion’s rejection of an effectively precautionary definition may therefore influence evaluation of new chemicals as well as existing chemicals.
David Fischer: The court’s skepticism toward treating precursors or inconclusive indicators as adverse effects may also be relevant. In both Section 5 and Section 6 reviews, EPA has sometimes interpreted toxicity studies more conservatively than the study authors, including in identifying observed-effect and no-observed-effect levels. The decision may support closer scrutiny of that practice when the agency’s conclusion is not adequately supported by the study.
Herb Estreicher: The practical barrier is that companies often accept Section 5 consent orders rather than litigate. A judicial principle cannot reshape agency practice unless a regulated party is prepared to preserve and pursue the issue. Industry engagement with EPA’s political leadership may therefore be more immediately effective than waiting for a test case.
What happens in the other circuits?
Will the Third Circuit’s review of the trichloroethylene rule provide an immediate answer?
Eric Gotting: Not necessarily. The TCE litigation involves more specific questions, including application of the Section 6(g) exemption and the extent to which EPA may regulate a condition of use it did not adequately assess. Those issues overlap with the substantial-evidence concerns in the Fifth Circuit opinion, but they do not necessarily present the same whole-chemical and unreasonable-risk questions.
Herb Estreicher: EPA can seek panel rehearing or rehearing en banc in the Fifth Circuit. Supreme Court review is less likely without a conflict among the circuits. Because the pending cases may involve different issues, a direct circuit split may not arise quickly.
The practical takeaway
If companies remember only one lesson from this decision, what should it be?
Eric Gotting: Build the record. Submit the evidence EPA needs to confront: actual workplace practices, reliable exposure information, PPE use, scientific studies, and a clear explanation of their significance. Courts can take a hard look only at material properly placed before the agency.
Herb Estreicher: The decision demonstrates that judicial review can provide meaningful relief. Companies should take EPA proceedings seriously, preserve their legal and scientific arguments, and recognize that a well-developed challenge can succeed.
David Fischer: Regulatory and guidance reform need not wait for Congress. Industry participants can use the decision to advocate for a consistent definition of unreasonable risk, condition-specific analysis, adequate consideration of PPE, and scientifically supportable decision-making under both Sections 5 and 6.
Key Actions for Industry Stakeholders
As EPA considers its next steps, industry stakeholders should closely monitor developments and evaluate how current and future TSCA actions could affect their operations. A well-developed administrative record, supported by sound science and legal analysis, may prove critical in both agency proceedings and potential litigation. For guidance on navigating these evolving regulatory issues, please reach out to the following participants of this discussion from Keller and Heckman LLP’s TSCA Practice: Herb Estreicher, Partner, 202.434.4334, estreicher@khlaw.com; David Fischer, Partner, 202.434.4224, fischer@khlaw.com; Tom Berger, Partner, 202.434.4285, berger@khlaw.com; Eric Gotting, Partner, 202.434.4269, gotting@khlaw.com; Greg Clark, Partner, 202.434.430, clarkg@khlaw.com; Lauren Gates, Counsel, 202.434.4476, gates@khlaw.com; and Allison Payne, Associate, 202.434.4484, payne@khlaw.com.