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By Steven M. Siros
On March 13, 2015, the Environmental Appeals Board ("EAB") struck down a landmark $2,751,800 penalty that had been imposed on Elementis Chromium for its alleged failure to comply with the Toxic Substances Control Act's ("TSCA") reporting obligations under Section 8(e). Under TSCA Section 8(e), companies are obligated to report information showing that chemicals and/or mixtures that they manufacture pose substantial health or environmental risks unless it can be demonstrated that U.S. EPA has been "adequately informed" of the health and/or environmental risks.
In November 2013, an Administrative Law Judge ("ALJ") ruled that Elementis had violated Section 8(e) by failing to report to U.S. EPA a 2002 study that allegedly showed an increased risk of lung cancers for workers exposed to hexavalent chromium and upheld a $2.5 million penalty that had been imposed by U.S. EPA. On appeal, Elementis argued that U.S. EPA's guidance on what needed to be reported under TSCA Section 8(e) was ambiguous and that Elementis could not have known that the 2002 study needed to reported, especially in light of the fact that OSHA had concluded that the study lacked any new risk information. Elementis also argued that the five-year statute of limitations provided for in 28 U.S.C. 2462, [enhanced version available to lexis.com subscribers], rendered U.S. EPA's claims time-barred (more than five years had lapsed between the time that Elementis had received the study in 2002 and U.S. EPA's 2010 enforcement proceeding).
The EAB agreed that Elementis was not required to provide the 2002 study to U.S. EPA. The link between hexavalent chromium and lung cancer has been known for decades and none of the information in the 2002 epidemiological study showed that hexavalent chromium exposure results in a more severe effect than lung cancer or a shorter time to the onset of lung cancer than was already documented in prior studies. The EAB noted that U.S. EPA's long-standing interpretive guidance provides that information is exempt from TSCA Section 8(e) reporting if it is corroborative of information U.S. EPA already is aware of. Per U.S. EPA, information is "corroborative" if it does not show that well-established adverse effect is of a more serious degree or different kind than previously known. Information may very well be new, different, and valuable without showing an adverse effect to be substantially more serious. However, unless such new information shows a more serious or different risk, per the EAB ruling, it does not need to be reported under TSCA Section 8(e).
Although the EAB reversed the ALJ's penalty determination, it did give U.S. EPA a victory on the statute of limitations issue. The EAB rejected Elementis' statute of limitations argument, finding that TSCA Section 8(e) imposed a continuing duty to report health and safety information. As such, a Section 8(e) violation constitutes a "continuing violation" for statute of limitations purposes. Thus, the period of limitations for a Section 8(e) violation commences anew each day that the information is not reported to U.S. EPA.
Please click here to read a copy of the EAB's March 13, 2015 decision.
Steven M. Siros, Partner, Jenner & Block
Read more at Corporate Environmental Lawyer Blog by Jenner & Block LLP.
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