A unanimous federal appeals court March 21 tossed out an Environmental Protection Agency order that would have shut down the plastic container fluorination process of Inhance Technologies LLC.
The decision from the U.S. Court of Appeals for the Fifth Circuit said EPA exceeded its authority under the federal Toxic Substances Control Act when, on Dec. 1, it told Houston-based Inhance to shut down or change its process.
EPA said the high density polyethylene containers coated by the company's manufacturing were leaking toxic per- and polyfluoroalkyl substances, or PFAS "forever chemicals," into the environment.
The court, however, said the agency overstepped in declaring Inhance's process a "significant new use" under TSCA, when it had been using it for several decades.
"The EPA may not contort the plain language of TSCA's Section 5 to deem a 40-year-old ongoing manufacturing process a 'significant new use' subject to the accelerated regulatory process provided by that part of the statute," the court said. "In other contexts, 'new' may have nuanced meanings, but its meaning in the statute before us is plain, and plainly prohibits the EPA's December 2023 orders aimed at Inhance."
The court had previously appeared skeptical of the EPA position.
In a Feb. 5 hearing, two of the three judges on the panel questioned the agency, with Chief Judge Priscilla Richman asking EPA lawyers how they could consider a manufacturing process that was four decades old a new use.
Richman agreed with the full opinion from Judge Cory Wilson, while the third jurist, Judge James Graves, said he concurred only with the decision.
An EPA spokesman said the agency was reviewing the decision.
At the hearing, EPA lawyers said the agency considered Inhance a "new use" because the company did not disclose the presence of PFAS to EPA when the agency updated its TSCA regulations in 2020. If Inhance had disclosed that, it would have been considered an ongoing use, they said.
Inhance called the court's ruling a "decisive victory" and said it secured operations for its 11 U.S. factories and customers that rely on its technology. It had previously said it would have had to consider bankruptcy if the EPA's Dec. 1 order had remained in place.
"I am exceedingly pleased with the ruling and grateful to our customers and employees for their resilience, dedication, and support," said Andrew Thompson, Inhance president and CEO.
The ruling said the EPA could still regulate Inhance's process using other parts of TSCA.
"The agency can properly proceed … under TSCA's Section 6 by conducting inter alia the appropriate cost-benefit analysis required for ongoing uses — a proposition even Inhance concedes," the court said. "The EPA is just not allowed to skirt the framework set by Congress by arbitrarily deeming Inhance's decades-old fluorination process a 'significant new use.'"