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December 21, 2015

Sweeping Chemical Safety Reform Legislation Afoot in Washington

2016 Could Bring Drastic Change In The Regulatory Landscape for Chemical Manufacturers.

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Last Thursday, the Senate passed the Frank R. Lautenberg Chemical Safety for the 21st Century Act (“Lautenberg Bill”), bipartisan legislation designed to modernize the 40-year-old Toxic Substances Control Act (“TSCA”). The Senate’s vote comes five months after the House of Representatives passed its own TSCA modernization legislation, the TSCA Modernization Act. The legislation will now go to conference for reconciliation, a process that could take months to complete, assuming the legislation survives at all. If it survives, several aspects of the legislation could prove a boon for plaintiff lawyers. 

The Lautenberg Bill would prohibit the EPA from considering costs and other non-risk factors when regulating chemical safety. Under current law, the EPA must undertake a cost-benefit analysis before promulgating chemical safety rules. The Lautenberg Bill potentially permits regulatory action without regard for whether costs of the action outweigh the benefits. As a result, the legislation could eviscerate the law established by cases such as Indus. Union Dept. of AFL-CIO v. Am. Petroleum Inst., 448 U.S. 607 (1980), in which the Court struck down the EPA’s benzene standard for lack of tenable cost-benefit analysis.  Prohibiting a cost-benefit analysis in the determination of safety will only embolden the plaintiff’s bar in arguing that manufacturers have been driven by profit, not the health and safety of their products.

The bill would require safety determinations for all existing chemicals, including those chemicals previously “grandfathered” in under current law, and a determination of safety for any new chemicals before they may enter commerce. In making its safety determinations, the EPA may require a manufacturer to conduct additional testing at the manufacturer’s cost, but permits that manufacturer to obtain reimbursement from other manufacturers benefited by the testing. Safety determinations by the EPA are subject to public notice and comment. These determinations will no doubt spawn litigation against manufacturers of products containing those chemicals.

The bill would require regulatory protections for “potentially exposed or susceptible populations.” Exposed or susceptible populations “may include such groups as infants, children, pregnant women, workers, and the elderly.” Current law does not draw such distinctions.

The bill would sharply restrict the confidentiality of business information concerning the health and safety of chemicals. It would give the public greater access to that information, and any confidential treatment would expire in 10 years without substantiation for continued confidential treatment. 

The bill would require the EPA to review the health and safety of all new and existing chemicals and authorize the EPA to require manufacturers to test their chemicals without the EPA first demonstrating risk or high exposure. At the same time, the EPA must base decisions on “the best available science” as established by scientifically reliable methods, including consideration of high-level studies and peer-reviewed literature. By requiring that regulatory actions rest upon a scientifically reliable foundation, this bill should prohibit agency action under the guise of health and safety when the best available scientific knowledge does not support the action, irrespective of the now obsolete cost-benefit analysis. After all, to qualify as “scientific knowledge,” an inference or assertion must be derived by the scientific method and supported by appropriate validation—i.e. good grounds, based on what is known. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 590 (1993). Manufacturers must be ever vigilant for attempts by the plaintiff’s bar to influence regulatory action based upon junk science.

The silver lining for manufacturers comes in the bill’s preemption provisions. Under the bill, the EPA determinations are final and have some preemptive effect. However, state prohibitions or restrictions on a chemical enacted before August 1, 2015, and any other state law enacted before August 21, 2003, will not be preempted. As a result, the bill could help avoid conflicts in standards manufacturers currently face. At the same time, the preemption provisions could face stiff opposition by legislators like Senator Boxer from California, which has perhaps the most burdensome and difficult state regulatory regime for manufacturers.

If this bill in its current form becomes law, it will have a significant impact on chemical manufacturers. Not only will it impose substantial compliance burdens on them, but it could also expose them to mass tort litigation.

We will continue to monitor the legislative process and report to you as developments unfold.