Fifth Circuit Decision on Methylene Chloride Reshapes EPA’s Approach to Chemical Regulation Under TSCA

The ruling rejects several key aspects of EPA’s approach to chemical risk evaluations and could have broader implications for future TSCA rulemakings and enforcement.

Key Takeaways

• The Fifth Circuit vacated EPA’s near-total ban on methylene chloride and remanded the rule to EPA, finding multiple legal errors in the agency’s evaluation and regulation of the chemical under TSCA.

• The court held that “unreasonable risk” under the 2016 Lautenberg Chemical Safety Act amendments is neither a zero-risk nor a precautionary standard. EPA must tolerate some risk and balance it against economic consequences, benefits, and feasible alternatives.

• EPA must determine risk use by use — it may not issue a general finding of “unreasonable risk” across all uses. The court rejected EPA’s “whole chemical” approach as contrary to the statute.

• EPA must account for real-world workplace protections, including personal protective equipment (PPE), when evaluating risk. The court held unlawful EPA’s assumption that workers do not use PPE despite Occupational Safety and Health Administration (OSHA) requirements and EPA’s own prior findings. EPA therefore cannot ignore existing regulatory protections when assessing chemical risk under TSCA.

• EPA’s exposure limits — roughly 10 times more restrictive than longstanding OSHA standards — lacked substantial evidence. The court faulted EPA for relying on single studies while ignoring contrary data.

• While the decision is one of the most significant judicial interpretations of the Lautenberg Act to date, related issues remain the subject of ongoing litigation and rulemaking. As a result, the ultimate impact of the decision on EPA’s TSCA program may continue to evolve.

Background

Methylene chloride is a widely used industrial solvent found in adhesives, automotive supplies, paint removers, and air-conditioner coolant. The chemical has important industrial applications, but overexposure can potentially lead to serious health risks, including acute injury, death, and potential carcinogenic effects.

In 2016, US Congress enacted the Frank R. Lautenberg Chemical Safety for the 21st Century Act, significantly amending TSCA. The Act directed EPA to conduct risk evaluations and, when a chemical poses an “unreasonable risk of injury to health or the environment,” regulate it “to the extent necessary” to eliminate that risk, considering its benefits, economic consequences, and feasible alternatives.

In 2019, EPA issued a narrower ban on methylene chloride for consumer paint removal. In May 2024, it went further, prohibiting 40 of 53 identified uses and imposing strict exposure limits on the remaining 13 — roughly 10 times more restrictive than OSHA standards in place for 25 years. Industry petitioners challenged the rule in the Fifth Circuit.

The Court’s Decision

In East Fork Enterprises, Inc. v. EPA, a three-judge Fifth Circuit panel granted the industry petitioners’ challenge, vacated EPA’s methylene chloride rule and underlying risk determination, and remanded to the agency. The court also denied the Sierra Club’s separate petition seeking more aggressive regulation. The decision rests on six holdings.

1. EPA Must Determine Risk Use-by-Use, not by the Chemical as a Whole

TSCA requires EPA to determine risk for each “condition of use”— a phrase appearing more than a dozen times in the statute. EPA’s own procedural rules at the time required use-by-use risk determinations. Yet EPA abandoned that approach, making a single “whole chemical” determination that methylene chloride generally posed unreasonable risk — even though its own science had previously found that six uses posed no unreasonable risk. The court held the approach unlawful and inconsistent with the Lautenberg Act’s structure.

2. EPA Must Consider Real-World Conditions, Including PPE Use

EPA reversed its prior assumption that workers use PPE when handling methylene chloride, despite OSHA requirements and its own prior findings that PPE is widely used. The court held PPE use is a real-world “condition of use” EPA must consider. The reversal lacked a reasoned explanation and contradicted EPA’s record evidence.

3. “Unreasonable Risk” Is Not a Zero-Risk Standard

The court emphasized that “unreasonable risk” is a prudential legal standard — not a blank check to eliminate all risk. Citing the Corrosion Proof Fittings decision on TSCA regulation of asbestos, the court found that EPA had effectively applied a precautionary principle, treating any risk as unreasonable. The Lautenberg Act does not authorize that approach. Regulating to prevent “unreasonable risk” requires tolerance of some risk, and EPA must balance risk against regulatory benefits and economic consequences.

4. EPA’s Acute Exposure Limit Lacked Substantial Evidence

EPA set an acute (short-term) exposure limit of 16 parts per million (ppm) — nearly eight times more restrictive than OSHA’s longstanding 125-ppm limit. The court found that EPA relied exclusively on a single study of 12 human subjects showing only a temporary 7% decrease in peripheral vision. EPA discounted another study showing minimal effects at much higher concentrations and applied compounding uncertainty factors that drove the limit dramatically lower. The court held this one-study approach failed TSCA’s “substantial evidence” standard.

5. EPA’s Chronic Exposure Limit Also Lacked Substantial Evidence

Similarly, EPA’s chronic (long-term) exposure limit of 2 ppm was roughly 12 times more restrictive than OSHA’s 25-ppm standard. EPA relied exclusively on a single rat study while disregarding three acceptable human epidemiological studies showing no adverse liver effects at exposures 240 times higher than its proposed limit. EPA also failed to address expert analysis submitted during the comment period. Citing Gulf South Insulation, the court held that exclusive reliance on a single animal study while ignoring credible human data is impermissible under the substantial-evidence standard.

6. The Near-Total Ban Exceeded “To the Extent Necessary”

Finally, the court found that prohibiting 40 of 53 uses exceeded TSCA’s requirement that regulation go only “to the extent necessary” to address unreasonable risk. EPA justified the prohibitions by citing “uncertainty” about whether regulated entities could comply with exposure limits, effectively shifting the burden to industry to demonstrate it could comply. EPA also admitted it had not found it “practicable” to consider alternative processes or substitutes, ignoring comments that feasible alternatives were unavailable and that available substitutes carried higher costs and environmental consequences.

Sierra Club’s Petition Denied

The Sierra Club separately argued that the rule did not go far enough, urging EPA to consider exposure to fenceline communities, genetically susceptible populations, and ozone depletion. The court rejected all three arguments.

• Fenceline Communities: The court held that EPA may reasonably exclude exposure pathways for which it lacks a reliable methodology, particularly under statutory deadlines. It noted that “elevated” risk is not the same as “unreasonable” risk under TSCA.

• Genetically Susceptible Populations: EPA adequately accounted for genetic susceptibility using 95th-percentile cancer-risk estimates. TSCA does not incorporate the Clean Air Act’s more restrictive 1-in-1-million risk standard.

• Ozone Depletion: The Sierra Club lacked standing because the causal chain was too speculative. Since 1994, EPA has consistently found that methylene chloride is not an ozone-depleting substance.

What This Means for Your Business

• The broader legal and regulatory landscape remains unsettled. While East Fork provides important guidance on the interpretation of the Lautenberg Act, it is unlikely to be the final word on many of these issues. Similar questions concerning EPA’s use of “whole chemical” risk determinations, treatment of workplace controls such as PPE, and the scope of risk evaluations remain the subject of ongoing litigation and rulemaking. Companies should view East Fork as a significant development, but not necessarily as the definitive resolution of all key TSCA interpretive questions.

• Expect scrutiny of EPA risk evaluations and risk management rules. The court’s opinion signals that reviewing courts may take a closer look at EPA’s scientific record, treatment of contrary evidence, and interpretation of key statutory terms. Companies affected by ongoing and future TSCA actions should closely monitor developments and assess opportunities to participate in EPA proceedings.

• Continue building the administrative record. The decision highlights the importance of developing a robust record during the rulemaking process. Companies that submit exposure data, information on existing workplace controls, evidence regarding feasible alternatives, and expert scientific analyses will be better positioned both to influence EPA’s decisions and to preserve issues for potential judicial review. The Fifth Circuit repeatedly emphasized EPA’s failure to grapple with contrary evidence in the record, underscoring the value of active participation during TSCA proceedings.

If you have questions about the decision or would like guidance regarding its implications for your business, please contact any attorney in the Environmental group.