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EPA Freezes Implementation of TSCA CBI Substantiation Interpretation

On February 21, 2017, EPA announced that implementation of its January 19, 2017 interpretation of the Toxic Substances Control Act (TSCA) requirements for confidential business information (CBI) substantiation was delayed pursuant to White House Chief of Staff Reince Priebus’s memorandum freezing all new and pending regulations. EPA’s announcement also stated that “EPA may consider delaying the effective date of this action beyond March 21, 2017.” Although EPA’s implementation is delayed by only one day, to March 21, 2017 from the original implementation date of March 20, 2017, EPA’s acknowledgement that the interpretation is subject to the memorandum at all, and the possibility that the implementation date may be delayed beyond March 21, 2017, suggest that modifications to the interpretation may be coming now that Scott Pruitt has been confirmed as the new EPA Administrator.

Mr. Priebus’s January 20, 2017 memorandum instructed federal agencies to cease sending any regulations to the Office of the Federal Register (OFR) until the newly appointed heads of those agencies review and approve them. The memorandum also instructed federal agencies to withdraw those regulations that had been sent to the OFR but had not yet been published. For those regulations that already had been published but had not yet taken effect, the memo instructed agencies to delay their effective date by 60 days “for the purpose of reviewing questions of fact, law and policy they raise.” Based on this memorandum, EPA froze 30 rules, including the agency’s Risk Management Program (RMP) facility safety rule and the 2017 Renewable Fuel Standard targets.

EPA’s statutory interpretation of TSCA’s requirements for CBI substantiation, published as a notice, is not a regulation per se. However, it appears to fall into the category of agency action covered by Mr. Priebus’s memorandum because it is an “agency statement of general applicability and future effect ‘that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.'”

In its original January 19, 2017 notice, EPA set forth its interpretation of amended TSCA Section 14’s requirements for CBI protection. A critical aspect of EPA’s interpretation is that the agency is not required to promulgate new rulemaking, with formal public notice and comment, in order to implement Section 14’s requirements. Under the interpretation, businesses must provide “upfront” substantiation of their CBI claims with their TSCA submissions beginning on March 20, 2017. EPA also established a procedure for substantiating CBI claims for submissions made between June 22, 2016 (when the TSCA amendments were enacted) and March 20, 2017.

EPA’s notice confirmed that pre-existing upfront substantiation requirements for certain submissions, like the Chemical Data Reporting Rule, would not be affected by the new interpretation. However, EPA was vague as to what information, exactly, was required to substantiate CBI claims for other submissions for which upfront substantiation was not previously required. The agency referred to 40 CFR part 2, section 2.204(e), to describe substantiation questions that “the Agency may specifically request answers to, pursuant to the procedures in those regulations.” (Emphasis added.) The agency went on:

EPA suggests that companies look to those questions for guidance as to how to fulfill the TSCA section 14(c)(3) substantiation requirement for information that is not currently subject to an existing regulatory up-front substantiation requirement. The answers to those questions typically form the basis of EPA final confidentiality determinations, and substantiations that do not address those questions might not provide sufficient information to uphold a determination, pursuant to TSCA section 14(g)(1), that information claimed as CBI is eligible for confidential protection.

These statements hardly establish definitive criteria which businesses can feel confident relying upon to protect business- and mission-critical CBI. A good outcome of the pending review of EPA’s interpretation would be a clearer set of criteria — and a formal rulemaking process by which all interested stakeholders may present their views on the subject.

Ann Grimaldi

About Ann Grimaldi

Ms. Grimaldi maintains a diverse environmental law practice focusing on chemical and product regulation and litigation defense. Her practice areas include Proposition 65, California's Safer Consumer Products Regulations, California's Rigid Plastic Packaging Container Act and the federal Toxic Substances Control Act. Ms. Grimaldi graduated from the University of California Hastings College of the Law magna cum laude and holds a Bachelor of Science Degree in Bacteriology from University of California, Davis. Prior to attending law school, she worked as a research assistant in laboratories at the University of California, San Francisco Cancer Research Institute and at the University of California, San Francisco School of Medicine.

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