United States: EPA Takes Action Against Inhance Technologies LLC On Fluorinated HDPE Containers

Highlights

• Continuing its focus on per- and polyfluoroalkyl substances (PFAS), the U.S. Environmental Protection Agency (EPA) issued two orders regarding production of nine long-chain perfluoroalkyl carboxylates (LCPFACs) by Inhance Technologies LLC (Inhance), a company that fluorinates plastic high-density polyethylene (HDPE) containers used to store pesticides, food ingredients, cosmetics and other consumer products.
• One EPA order required Inhance "not to produce" three LCPFACs that EPA says are created by Inhance's fluorination of HDPE containers and present unreasonable risks. The second EPA order followed the agency's determination that the remaining six LCPFACs in question could present an unreasonable risk of injury to health or the environment and barred Inhance from restarting its fluorination process as long as the three LCPFACs that EPA said presented unreasonable risks were produced along with the six LCPFACs that could produce a risk.
• Inhance has appealed EPA's orders to the U.S. Court of Appeals for the Fifth Circuit. This Holland & Knight alert examines the litigation between EPA and Inhance and the potential for precedent.

Since publishing an alert on U.S. Food and Drug Administration (FDA) efforts surrounding per- and polyfluoroalkyl substances (PFAS) in food packaging, Holland & Knight has monitored developments related to fluorinated and nonfluorinated high-density polyethylene (HDPE) containers. As of the end of 2023, FDA had not taken any further action concerning the possible migration of certain PFAS from fluorinated HDPE containers into any food that may be stored in such containers. But the U.S. Environmental Protection Agency (EPA), which first identified the risk of PFAS leaching from such containers, has been active, with several new developments unfolding.

EPA Issues Orders

On Dec. 1, 2023, noting that it had received in December 2022 significant new use notices (SNUNs) from Inhance Technologies LLC for PFAS, EPA issued two separate but related unilateral orders related to Inhance's production of nine long-chain perfluoroalkyl carboxylates (LCPFACs).

In its first order, purporting to act as authorized by Section 5(f) of the Toxic Substances Control Act (TSCA), 15 U.S.C. § 2604(f), EPA ordered Inhance "not to produce" three of the LCPFACs – specifically, PFOA, PFNA and PFDA, which EPA claimed were "created in the production" of fluorinated HDPE containers by Inhance. EPA determined that these three PFAS are highly toxic and present unreasonable risks. These risks, EPA asserted, could be prevented only by "prohibiting the continued manufacture of PFOA, PFNA and PFDA that are produced from the fluorination of HDPE."

In its second order, purporting to act under TSCA Section 5(e), 15 U.S.C. § 2604(e), EPA determined that the other six LCPFACs for which Inhance had submitted SNUNs "may present an unreasonable risk of injury to health or the environment...." Because "Inhance's current fluorination process for plastics produces all nine of the PFAS chemicals subject to these orders simultaneously," EPA ordered the production of the six LCPFACs not to restart "so long as the fluorination process continues to produce PFOA, PFNA and PFDA."

EPA stated that both orders, which were issued to Inhance on Dec. 1, 2023, "are effective 02/28/2024."

Inhance Appeals EPA's Orders to the Fifth Circuit

In response to EPA's actions, Inhance announced it asked the U.S. Court of Appeals for the Fifth Circuit to review both EPA orders. Inhance petitioned for review without stating in its petition the reasons why it objected to EPA's actions. But in a public statement it released on Dec. 8, 2023, Inhance stated that EPA's actions would force the company "to shut down its 11 barrier technology facilities across the U.S., disrupting downstream industries and related supply chains that rely on the company's environmentally critical technology." To prevent these shutdowns and disruptions, Inhance said on Dec. 12, 2023, that it was seeking expedited review from the Fifth Circuit and a stay of the EPA's two orders pending the court's consideration of its appeal.

The Fifth Circuit on Dec. 12, 2023, granted Inhance's request for a stay of EPA's two orders pending consideration of Inhance's appeal and its request for expedited review of EPA's orders.

On Dec. 22, 2023, Inhance filed with the Fifth Circuit a brief in support of its Dec. 7, 2023, petition. Five trade associations filed an amicus curiae brief on Dec. 29, 2023, in support of Inhance.

When it announced the two orders issued to Inhance on Dec. 1, 2023, EPA stated, without elaboration, that Inhance had submitted SNUNS for nine long-chain PFAS. EPA's announcement did not acknowledge the fact that, as noted by both Inhance and the trade associations supporting Inhance in their respective briefs, when Inhance filed the SNUNs to which EPA referred, Inhance did so under protest. Inhance maintains that it has always argued that the Significant New Use Rule (SNUR) for LCPFACs, which EPA finalized at 85 Fed. Reg. 45,109 (July 27, 2020), does not and could not apply to its fluorination process because that process is – and has been for 40 years – an ongoing use not subject to EPA's SNUR. Inhance contends that even if the 40-year-old fluorination process that creates the LCPFACs EPA seeks to regulate through the SNUR could "somehow be interpreted as new," the LCPFACs in question are impurities exempt from EPA's regulation. These arguments are not the only ones Inhance makes against EPA – and they may prove not to be Inhance's strongest arguments. The litigation is ongoing and may yield interesting precedent in 2024.

Additional Litigation

The litigation before the Fifth Circuit has already had an effect on another pending case between EPA and Inhance involving TSCA. On Dec. 19, 2022, the United States sued Inhance in the U.S. District Court for the Eastern District of Pennsylvania, seeking a ruling that Inhance had violated TSCA by manufacturing LCPFACs as it fluorinated HDPE containers. On Dec. 4, 2023, the federal court hearing that particular action in Pennsylvania ordered the various parties (including intervenors) before it to submit briefs on the effects, if any, that EPA's Dec. 1, 2023, orders may have on the ripeness or mootness of the case before it.

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