No Ban, No Problem: Ninth Circuit Upholds EPA’s PBT Exemption Rule

The Rule at Issue

Under the TSCA, manufacturers of new chemical substances generally must file a PMN with EPA before manufacture. Although the statute gives EPA 90 days to complete PMN reviews, in practice, the process often takes much longer. TSCA also gives EPA discretion to exempt manufacturers from all or part of the PMN process under certain scenarios if the proposed use will not present an unreasonable risk.

In the 2024 rule, EPA added provisions specifying when PBTs may qualify for statutory low-volume or low-exposure exemptions. Rather than categorically barring PBTs, EPA adopted a case-by-case review framework.

Who Challenged the Rule

• Alaska Community Action on Toxics and Environmental Defense Fund argued EPA lacked authority and should have categorically barred exemptions. , and that the exemption provision was arbitrary and capricious. 
• The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) argued EPA failed to adequately respond to a rulemaking comment concerning TSCA Section 2604(e) consent orders.

Why the Court Rejected the Challenges

Environmental Petitioners’ Statutory Authority Claim: Applying the independent-review framework required by Loper Bright, the court concluded that TSCA gives EPA discretion to evaluate exemption requests on a case-by-case basis.

Arbitrary and Capricious Claim: The court held that EPA reasonably considered both a categorical ban and a case-by-case approach.

UAW’s Comment-Response Claim: The court found EPA was not required to substantively respond because the comment did not address an issue presented in the proposed rule.

A Note on the Decision: The court issued the ruling as an unpublished memorandum disposition, meaning it is not precedential under Ninth Circuit Rule 36-3. Even so, it provides useful insight into how at least one appellate panel views EPA’s authority under TSCA’s exemption provisions.

Practical Notes

• EPA will continue reviewing PBT exemption requests on a case-by-case basis.
• Applicants for exemptions for PBTs should expect that most applications will be denied. Applicants should anticipate rigorous scrutiny and be prepared to demonstrate that their proposed uses minimize or eliminate meaningful exposure pathways.
• The exemption pathway may provide a more efficient regulatory pathway than full PMN review in appropriate circumstances. Companies should therefore monitor EPA’s evolving track record on granting or denying exemptions.
• Illustrative scenarios: A sealed closed-loop semiconductor process may be viable. A consumer-facing furniture application likely would not because EPA would likely conclude the proposed use presents potentially unreasonable exposures.
• The decision illustrates that agencies can still prevail after Loper Bright where US Congress has granted meaningful discretion to the implementing agency. 

Conclusion

The Ninth Circuit’s decision confirms that EPA’s case-by-case approach to evaluating PBT exemption requests will remain in place for the foreseeable future. Companies developing or manufacturing PBT substances should build their exemption strategies around robust exposure-control documentation, monitor EPA’s evolving approach, and consider whether the exemption pathway offers meaningful timing advantages over the full PMN process. If you have questions or concerns about how this decision may affect your operations or TSCA compliance strategy, please contact a member of the group.