The Fifth Circuit issued a decision vacating two EPA orders directing Inhance Technologies (Inhance) to close its barrier technology facilities. As its basis for issuing the orders, EPA had identified Inhance’s fluorination process as a “significant new use” that presented an unreasonable risk of injury to human health and the environment due to its creation of PFAS.

On appeal of the orders, Inhance argued that its operations were exempt from the Significant New Use Rule (SNUR) because it had been operating since 1983.  In reviewing the plain language of Section 5 of the Toxic Substances Control Act (TSCA), the court agreed, finding that the EPA could not consider a forty-year-old ongoing manufacturing process a “significant new use.”

The court considered the parties’ conflicting definitions of “new,” which Inhance asserted meant “not previously existing” and EPA argued meant “not previously known.”  In support of its “not previously known” definition, EPA argued that because Inhance did not identify its fluorination process as an ongoing use during the Significant New Use Rule rulemaking process, it qualified as a significant new use under Section 5.  The court rejected EPA’s position, reasoning that Inhance’s definition more closely aligned with the text of Section 5, which requires a party to provide notice to EPA before a manufacturing or processing of a new chemical substance can begin. 

The court also raised due process concerns with imposing the Significant New Use Rule (“SNUR”) on Inhance who did not know at the time of rulemaking that its fluorination process was creating PFAS.  The court reasoned that Inhance could not have predicted at the time of the SNUR rulemaking that is fluorination process would be subject to the rule.       

Inhance’s fluorination process may still be subject to EPA’s regulation but under TSCA’s Section 6, a broader mandate which applies a cost-benefit analysis for ongoing uses.  Section 6 would require a weighing of the negative effects of the chemical substances against the benefits of the substance and the economic consequences of prohibiting or limiting the substance. 

The case is Inhance Technologies, L.L.C. v. U.S. Environmental Protection Agency, case number Case: 23-60620, in the U.S. Court of Appeals for the Fifth Circuit.

For more on this topic and related issues see our January Blog post: Recent Progress Report Issued by EPA Foreshadows Landmark Year for Federal Regulation of PFAS

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