United States Court of Appeals, District of Columbia Circuit
October 12, 2018
Petition for Review of Final Action of the United States
Environmental Protection Agency Robert P. Stockman
argued the cause and filed the briefs for petitioner.
Phillip R. Dupré, Attorney, United States Department
of Justice, argued the cause for respondents. With him on the
brief was Jeffrey H. Wood, then-Acting Assistant Attorney
P. Gallo, James W. Conrad, Jr., Richard S. Moskowitz, Peter
D. Keisler, Samuel B. Boxerman, Timothy K. Webster, C.
Frederick Beckner, III, Judah Prero, Samina M. Bharmal, David
B. Weinberg, Martha E. Marrapese, Roger H. Miksad, Linda E.
Kelly, Steven P. Lehotsky, and Michael B. Schon were on the
brief for intervenors in support of respondent United States
Environmental Protection Agency. Michael D. Boucher and
Warren U. Lehrenbaum entered appearances.
Before: Garland, Chief Judge, Millett, Circuit Judge, and
Edwards, Senior Circuit Judge.
MILLETT CIRCUIT JUDGE.
Toxic Substances Control Act, 15 U.S.C. § 2601 et
seq., requires the Environmental Protection Agency to
publish an inventory of chemicals manufactured or processed
in the United States. 15 U.S.C. § 2607(b)(1). The 2016
Amendments to the Act directed the EPA to issue a rule
establishing a process for updating the Inventory. The EPA
promulgated that rule the following year. See TSCA
Inventory Notification (Active-Inactive) Requirements, 82
Fed. Reg. 37, 520 (Aug. 11, 2017). As part of that rulemaking
process, the EPA abandoned questions that had required each
company seeking to keep the chemical identity of a substance
confidential to substantiate that the chemical identity
"is not readily discoverable through reverse
engineering." 15 U.S.C. § 2613(c)(1)(B)(iv).
Environmental Defense Fund challenges that 2017 rule on the
ground that it unlawfully shields information from public
disclosure. Environmental Defense is correct that the
EPA's elimination of questions pertaining to reverse
engineering was arbitrary and capricious, and so we grant the
petition in that respect. We otherwise deny the petition for
passed the Toxic Substances Control Act ("Control
Act") in 1976 to "assure that * * * innovation and
commerce in * * * chemical substances and mixtures do not
present an unreasonable risk of injury to health or the
environment." 15 U.S.C. § 2601(b)(3). Congress
charged the EPA with administering the Control Act, which
included the tasks of "compil[ing], keep[ing] current,
and publish[ing] a list of each chemical substance which is
manufactured or processed in the United States."
Id. § 2607(b)(1). That list, commonly referred
to as the "Inventory," contains a confidential
portion and a non-confidential portion. Id. §
2607(b)(4)(B)(i). Both portions are publicly accessible on
the EPA's website. But the confidential portion
identifies substances by "a structurally descriptive
generic name" rather than a "specific chemical
identity." 15 U.S.C. § 2613(c)(1)(C). The Inventory
currently lists approximately 86, 000 chemicals, roughly 18,
000 of which are classified as confidential.
about the pace of EPA's work" keeping the Inventory
up to date, H.R. Rep. No. 176, 114th Cong., 1st Sess. 12
(2015), Congress amended the Control Act in 2016.
See Frank R. Lautenberg Chemical Safety for the 21st
Century Act, Pub. L. No. 114-182, 130 Stat. 448 (2016)
(codified at 15 U.S.C. § 2601 et seq.). As
relevant here, the 2016 amendments directed the EPA to
promulgate a rule-known as the Inventory Rule-that would
impose new reporting requirements for chemical manufacturers
and processors ("chemical companies"). See
15 U.S.C. § 2607(b)(4)-(5). Specifically, the Inventory
Rule requires chemical companies to notify the EPA of each
chemical on the Inventory that they had "manufactured or
processed for a nonexempt commercial purpose" during the
ten-year period prior to June 22, 2016. Id. §
2607(b)(4)(A)(i). Each chemical for which the EPA receives
such a notification would be labeled "active,"
while all the rest would be labeled "inactive."
Id. § 2607(b)(4)(A)(ii)-(iii),
(b)(5)(B)(i)-(iii). Chemical companies also have to submit a
notification form identifying in advance any inactive
chemical substance for which they intend to resume
manufacturing or processing going forward. Id.
directed the EPA to update the confidential portion of the
Inventory as well. In particular, the 2016 amendments to the
Control Act instruct the EPA to (i) "require any
manufacturer or processor of a chemical substance on the
confidential portion of the [Inventory] that seeks to
maintain an existing claim for protection against disclosure
of the specific chemical identity of the chemical substance
as confidential" to notify the EPA of that request; (ii)
demand that chemical companies provide
"substantiation" for those claims of
confidentiality; and (iii) "move any active chemical
substance for which no [confidentiality] request [i]s
received" to the non-confidential portion of the list.
15 U.S.C. § 2607(b)(4)(B).
application to maintain confidential treatment is received,
the EPA must independently determine whether confidentiality
is warranted. To that end, Congress directed the EPA to
"promulgate a rule that establishes a plan to review all
claims to protect the specific chemical identities"
asserted as confidential. 15 U.S.C. § 2607(b)(4)(C).
the EPA compiles the initial list of active chemical
substances, the Control Act affords the agency up to seven
years to complete its review of which of those active
chemical substances should receive confidential treatment. 15
U.S.C. § 2607(b)(4)(E). For those chemicals that remain
on the confidential portion of the Inventory, the EPA must
"develop a system to assign a unique identifier to each
specific chemical identity" and must "apply that
identifier consistently to all information relevant to the
applicable chemical substance[.]" Id. §
promulgated the final Inventory Rule in August 2017. 82 Fed.
Reg. 37, 520 (codified at 40 C.F.R. §§ 710.23-
710.39). The Inventory Rule implements the retrospective and
prospective reporting requirements that Congress required.
Companies that manufactured and processed chemicals during
the ten years prior to June 22, 2016 must submit a
"Notice of Activity Form A." See id. at
37, 523, 37, 525. After the EPA designates substances as
active or inactive, those that intend to revive the
manufacture or processing of an inactive chemical must submit
a "Notice of Activity Form B." See id.
These Forms also allow a manufacturer or processor of a
chemical that was originally on the confidential portion of
the Inventory to seek to continue that confidential status
going forward. And it may do so regardless of whether that
manufacturer or processor was the one that had initially
requested that the chemical identity be shielded from public
disclosure. Id. at 37, 527.
assert a claim of confidentiality, the Control Act requires
the requesting company to certify that:
(i) My company has taken reasonable measures to protect the
confidentiality of the information;
(ii) I have determined that the information is not required
to be disclosed or otherwise made available to the public
under any other Federal law;
(iii) I have a reasonable basis to conclude that disclosure
of the information is likely to cause substantial harm to the
competitive position of my company; and
(iv) I have a reasonable basis to believe that the
information is not readily discoverable through reverse
82 Fed. Reg. at 37, 544 (codified at 40 C.F.R. §
710.37(e)); see also 15 U.S.C. § 2613(c)(1)(B)
(establishing these criteria).
Control Act does not stop there. The Act further mandates
that, once a claim of confidentiality is asserted, its
proponent must "substantiate" the need for secrecy.
15 U.S.C. § 2613(c)(3); see also id. §
2607(b)(4)(B)(iii) (instructing the EPA to "require the
substantiation of [confidentiality] claims"). To
implement that substantiation requirement, the Inventory Rule
requires applicants to answer the following questions:
• Do you believe that the information is exempt from
[the Act's] substantiation [requirement]?
• Will disclosure of the information likely result in
substantial harm to your business's competitive position?
• To the extent your business has disclosed the
information to others (both internally and externally), what
precautions has your business taken?
• Does the information appear in any public documents,
including (but not limited to) safety data sheets,
advertising or promotional material, professional or trade
publication, or any other media or ...