In a very significant case, the Chief Administrative Law Judge (ALJ) for U.S. EPA imposed a $2.5 million dollar penalty against a manufacturer, Elementis Chromium, Inc. ("Elementis") for failing to submit a health study to EPA pursuant to the requirements of TSCA. The EPA imposed the large penalty despite the fact,
- Many of the findings in the study were disclosed to EPA through other studies; and
- The violation occurred more than five years ago- past the applicable statute of limitations period
Elementis was part of a business coalition who undertook an epidemiological study of chromium-based products. The study was performed, in part, as an attempt to potentially provide support for modification of the permissible exposure limit (PEL) for hexavalent chromium adopted by OSHA.
The study was completed in 2002. Elementis didn't provide the study to U.S. EPA until six years later, in 2008, in response to a subpoena.
EPA filed a complaint against Elementis for failing to disclose the study in accordance with the requirement set forth in TSCA Section 8(e) which provides:
Any person who manufacturers, processes, or distributes in commerce a chemical substance or mixture and who obtains information which reasonably support the conclusion that such substance or mixture presents a substantial risk of injury to health or the environment shall immediately inform the Administrator of such information unless such person has actual knowledge that the Administrator has been adequately informed of such information.
Elementis argued the EPA was "adequately informed" regarding the impacts of chromium and the study did not need to be disclosed as a result. Also, the company asserted the failure to disclose occurred more than five years ago, past the applicable statute of limitation period.
Statute of Limitations
EPA admitted that the five-year statute of limitations is generally applicable to administrative penalty actions brought under TSCA. However, the EPA's ALJ ruled that violations of TSCA Section 8(e) are continuing in nature. Therefore, so long as the company failed to disclose, the statute of limitations did not begin to run.
The company also argued there was no violation of Section 8(e) because EPA was previously aware of the general conclusions of the study. The ALJ rejected the Company's argument and ruled it was required to disclose the report because there were significant distinctions between the study at issue and previous studies.
The ninety page decision includes a highly detailed analysis of the ALJ determination the study had distinguishing characteristics which triggered the mandatory duty to disclose under TSCA. Many of the differences noted by the ALJ were with regard to the test methodologies employed, not necessarily health impacts.
The opinion highlights the risks involved in the TSCA duty to disclose under 8(e). The company incurred a substantial penalty despite:
- Information and conclusions in the study had similarities to prior studies of chromium-based products;
- The violation, failure to disclose, occurred more than five years ago which was past the normal statute of limitations period.
It is worth noting that the ALJ felt the Company's failure to report, was so egregious in this instance, that it increased the penalty by 10%. The ALJ felt the Company made critical comments in regulatory proceedings regarding data gaps involving chromium health impacts while being aware of the study, which it helped complete, and did not disclose to regulators.