Asbestos Disease Awareness Organization v. Wheeler

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS DOCKET NO. 16

          EDWARD M. CHEN UNITED STATES DISTRICT JUDGE.

         Plaintiffs^[1] are a group of nonprofit public health and environmental organizations that promote awareness of the risks associated with asbestos in our environment. This suit against the Environmental Protection Agency (“EPA”) and its Acting Administrator, Andrew Wheeler, challenges the EPA's denial of their petition to initiate rulemaking. Docket No. 1. This action is brought under the Toxic Substance Control Act (“TSCA”) which provides under some circumstances de novo review of the EPA decision. The suit also asserts a claim under the Administrative Procedure Act (“APA”). Pending before the Court is the EPA's motion to dismiss the FAC's APA claim for lack of subject matter jurisdiction. The EPA's motion initially did not challenge Plaintiffs' TSCA claim, although the scope of the claim is now at issue.

         I. BACKGROUND

         A. Statutory Background

         Congress enacted the TSCA in 1976 to create a national program for assessing and managing the risks of chemicals to human health and the environment. Section 2(b)^[2] of the TSCA requires the following from the EPA: (1) “adequate information should be developed with respect to the effect of chemical substances and mixtures on health and the environment” and (2) “adequate authority should exist to regulate chemical substances and mixtures which present an unreasonable risk of injury to health or the environment.” 15 U.S.C. § 2601(b)(1)-(2). However, “authority over chemical substances and mixtures should be exercised in such a manner as not to impede unduly or create unnecessary economic barriers to technological innovation while fulfilling the primary purpose of this chapter to assure that such innovation and commerce in such chemical substances and mixtures do not present an unreasonable risk of injury to health or the environment.” Id. at § 2601(b)(3).

         Section 6(a) provides the EPA with authority to regulate substances that present “an unreasonable risk of injury” to human health or the environment. 15 U.S.C. § 2605(a). Section 6(a) also lists examples of chemical lifecycle phases (e.g., manufacturing, processing, usage, and disposal, etc.) which the EPA is authorized to regulate. Id. Moreover, Section 6(a) provides that “[i]f the [EPA] Administrator determines . . . that the . . . use . . . of a chemical substance presents an unreasonable risk of injury to health or the environment, the Administrator shall by rule” impose one or more authorized restrictions, which include limiting or banning the manufacture or distribution of the chemical for a particular use. Id.

         Section 8(a)(1) provides that the EPA “shall promulgate rules” that require each person who manufactures or processes a chemical substance to submit a report as the “Administrator may reasonably require.” 15 U.S.C. § 2607(a). The EPA is prohibited, however, by Section 8(a)(5)(A) from requiring reporting that is “unnecessary or duplicative” and must apply the reporting obligations under Section 8(a) only to those persons who are likely to have the relevant information. Id. at § 2607(a)(5)(A)-(C). In 2011, pursuant to its authority under Section 8(a)(1), the EPA promulgated the Chemical Data Reporting (“CDR”) rule that required reporting for all chemicals^[3] manufactured or imported at a site in the amount of 25, 000 pounds or more in a given reporting year from 2012 onward. See 40 C.F.R. § 711.8(a)(1).

         On June 22, 2016, Congress amended the TSCA with the Frank R. Lautenberg Chemical Safety for the 21st Century Act (“LCSA”). The amendment established a new integrated process under Section 6:

The Administrator shall designate as a high-priority substance a chemical substance that the Administrator concludes . . . may present an unreasonable risk of injury to health or the environment because of a potential hazard and a potential route of exposure under the conditions of use, including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant by the Administrator.

15 U.S.C. § 2605(b)(1)(B)(i).

         Section 6(b)(2)(A) required the EPA to initiate risk evaluations on ten chemical substances within six months after the enactment of the LCSA. The EPA designated asbestos as one of the ten chemicals to undergo risk evaluation. See 81 Federal Register 91927 (“As amended, the law requires that risk evaluation be initiated on 10 chemical substances drawn from the 2014 update of the TSCA Work Plan for Chemical Assessments”). According to the EPA, that evaluation is ongoing. After 2016, “any chemical substance that is the subject of a rule proposed or promulgated under TSCA [Section 6]” is subject to a 2, 500-pound volume threshold for reporting. 40 C.F.R. § 711.8(b).

         Section 21 contains a citizen-petition process under which the public can seek to compel the EPA to engage in its rulemaking authority. 15 U.S.C. § 2620(a). If unsuccessful at the agency level, Section 21 enables the petitioner to file a civil action in federal district court for review of the EPA's determination. The standard of review at the district court is dependent on the relief sought in the Petition.

         For petitions seeking the issuance of a new rule, Section 21(b)(4)(A) provides, “[i]f the Administrator denies a petition filed under this section . . . [, ] the petitioner may commence a civil action in a district court of the United States to compel the Administrator to initiate a rulemaking proceeding as requested in the petition.” 15 U.S.C. § 2620(b)(4)(A). The standard of review for new-rule petitions is further prescribed by Section 21(b)(4)(B), which provides, “[i]n an action under subparagraph (A) respecting a petition to initiate a proceeding to issue a rule [], the petitioner shall be provided an opportunity to have such petition considered by the court in a de novo proceeding.” (emphasis added).

         Section 21 does not offer guidance as to the standard of review for petitions seeking the amendment or repeal of existing rules. However, case law analyzing Section 21's legislative history in this regard is instructive. In Environmental Defense Fund v. Reilly, the plaintiffs petitioned the EPA under Section 21 to promulgate rules to prevent the release of dioxins and furans into the environment. 909 F.2d 1497, 1449 (D.C. Cir. 1990). Specifically, they sought record-keeping and reporting requirements so they could monitor results. Id. The EPA denied the petition. Id. As with Plaintiffs here, the plaintiffs in Reilly then filed suit in district court seeking de novo review under Section 21-but they also sought concurrent relief under the APA. The district court granted the EPA's motion for summary judgment with respect to the APA claims reasoning that there was “an inherent illogic to [plaintiffs'] contention that a petition denial is simultaneously subject to both de novo and APA review . . . .” Id. at 1500. The plaintiffs appealed, but they settled the underlying Section 21 claim with the EPA that remained in the district court. Id. at 1500-01. Still, the D.C. Circuit decided the issue of “not whether APA review is available singly in lieu of Section 21 review, but whether [plaintiffs] are entitled to both.” Id. at 1505.

         The Reilly court ultimately held that “Congress did not intend to authorize simultaneous utilization of two remedies.” Id. In so doing, the court went through an analysis of Section 21's legislative history to determine whether Congress intended to have two channels of judicial review. The court speculated that “[b]ut for the presence of Section 21, [plaintiffs] might have qualified for APA review of EPA's denial of their rulemaking petition by invoking the presumption of reviewability . . . .” Id. at 1505. In distinguishing Section 21 review and APA review, the court found that

Less hospitable treatment of petitions to amend or repeal is warranted, then, since “the [agency] already will have addressed the general subject matter in an existing rule or order and [its] determination will have been subject to review under section 19 of th[e] Act.” . . . the conferees do not intend that [EPA] be subjected to constant petitions challenging rules or orders for which adequate judicial review is provided under section 19. Therefore, if [EPA] denies a petition to amend or repeal an action under section 4, 5(e), 6, or 8, [Section 21] permits review of such denial only under the Administrative Procedure Act.

Id. (quoting S.Rep. No. 94-1302, 94th Cong., 2d Sess. 98 (1976); H.R.Conf.Rep. No. 1679, 94th Cong., 2d Sess. 98 (1976), reprinted in [1976] U.S.Code Cong. & Admin.News 4583) (emphasis added) (alterations in original).

         B. Factual Background

         On December 19, 2016, the EPA announced that asbestos would be one of ten chemicals selected for initial risk evaluations, as required by the LCSA. FAC ¶¶ 30, 31.

         In May 2017, Plaintiffs notified the EPA that a company called Occidental Chemical Corporation failed to report its asbestos imports that totaled several hundred tons, which violated its obligations to the CDR. In response to Plaintiffs' notice, the EPA penned a letter to Occidental Chemical Corporation on July 28, 2017, informing it that asbestos imports were not subject to reporting because such reporting is not required for “naturally occurring chemical substances” under 40 C.F.R. section 711.6(a)(3). Id. ¶ 35. This letter led to Plaintiffs' petition.

         C. Procedu ...