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November 26, 2012

EPA Issues Direct Final TSCA Section 8(d) Rule on Cadmium and Cadmium Compounds

The ACTA Group

On November 20, 2012, the U.S. Environmental Protection Agency (EPA) signed off on a direct final rule adding cadmium and cadmium compounds to the Toxic Substances Control Act (TSCA) Section 8(d) model rule thus requiring manufactures and importers of cadmium and cadmium compounds, including use as part of an article, that have been or are reasonably likely to be incorporated into consumer products, to report health and safety studies to EPA. The prepublication copy of the rule is available online. EPA also announced that it plans to propose, under a separate notice and comment rulemaking, to require the submission of TSCA Section 8(d) health and safety studies from processors and distributors of cadmium or cadmium compounds, including use as part of an article, that have been or are reasonably likely to be incorporated into a consumer product. This update summarizes this important rule and its precedent- setting implications.

Procedural Background

In August 2010, several non-governmental organizations (NGO), including the Sierra Club and the Empire State Consumer Project, petitioned EPA under TSCA Section 21 and the Consumer Product Safety Commission (CPSC) to address issues pertinent to cadmium in toy metal jewelry. CPSC was asked to address the presence of cadmium in children’s products and the potential for children’s exposure to cadmium from such products. EPA was asked to issue a TSCA Section 8(d) rule and a TSCA Section 6 rule to limit cadmium and cadmium compounds in toy metal jewelry. TSCA Section 8(d) authorizes EPA to promulgate rules that would require any person that manufactures, processes, or distributes in commerce any chemical substance or mixture to submit lists of health and safety studies pertinent to such substances or compounds. TSCA Section 6 authorizes EPA to ban or regulate chemical substances believed to pose unreasonable risks of injury to human health or the environment.

On August 30, 2010, EPA partially granted the petition and stated its intent to propose a rule under TSCA Section 8(d) to obtain information that would support CPSC’s regulatory initiatives pertinent to cadmium. EPA declined at that time to take action under TSCA Section 6 pending more information from CPSC. The federal agencies committed to work together to determine the most effective means of addressing cadmium in toy metal jewelry through their joint participation in the TSCA Interagency Testing Committee (ITC). These joint efforts yielded results and in May of this year, EPA issued its 69th Report of the ITC to the Administrator in which it recommended certain chemicals for priority testing under TSCA, including cadmium and cadmium compounds. Interestingly, EPA had added in the 68th Report of the ITC to the Administrator cadmium and 103 separately listed cadmium compounds. In the 69th Report, the ITC added the category of cadmium compounds and removed the 103 listed compounds “to provide a more comprehensive approach to assessing cadmium compounds’ safety” and to capture information on more than the 103 cadmium compounds listed in the 68th Report. In so removing the 103 listed substances and compiling them into one category, EPA was also able to amend the Priority Chemical List via direct final rulemaking because fewer than 50 chemical substances or categories of substances in a calendar year would be added to the list.

With respect to this last point, a bit of information on the procedural history of Section 8(d) is necessary to appreciate how nuanced this direct final rule is. In 1982, EPA issued a “model rule” pursuant to TSCA Section 8(d). EPA limited this reporting requirement to unpublished studies concerning those chemicals specifically listed by EPA. One of the principal ways that EPA uses the TSCA Section 8(d) rule is to collect unpublished information for substances that have been added to the TSCA Section 4(e) priority list by the ITC, and therefore, will likely be subject to a forthcoming test rule under TSCA Section 4(a). EPA can add individual substances to the list in the TSCA Section 8(d) rule by notice and comment rulemaking under 40 C.F.R. § 716.105(a), but substances are also added “automatically” to the list when the ITC adds them to TSCA Section 4(e) priority list under 40 C.F.R. § 716.105(a). In 1982, numerous parties objected to this automatic listing procedure when it was first promulgated. EPA nonetheless decided to adopt this automatic listing requirement to obtain unpublished studies sufficiently far in advance of promulgation of a TSCA Section 4(a) test rule.

As originally promulgated by EPA, the automatic listing provision for substances added to the priority list by the ITC did not contain any procedure by which a party could request that a particular substance be withdrawn from the listing. A 14-day comment provision in 40 C.F.R. § 716.105(c) was added by EPA without any discussion in a 1986 final rule that amended and re-promulgated the 1982 rule. The proposed rule for these amendments issued in 1985 did not contain this provision. Presumably, EPA thought that no one would object if it added an expedited procedure to allow affected parties to object to an automatic listing in the TSCA Section 8(d) rule.

What the Rule Requires

Under the final rule, EPA notes that it has broad authority to require the submission of health and safety studies, but that it has “limited the scope” of this rule to the chemical substances within the listed category, namely cadmium and cadmium compounds (any unique chemical substance that contains cadmium as part of that chemical’s structure), that have been, or are reasonably likely to be, incorporated into consumer products. Some might question the suggestion that EPA has “narrowed” its request under these circumstances. EPA’s concern with cadmium derives from its association with certain adverse health effects. EPA states in the rule that cadmium is a Group B1 probable human carcinogen, and causes acute effects including pulmonary irritation through the inhalation exposure route. Cadmium has also been associated with developmental effects. EPA states in the rule that it and CPSC are also concerned about the possible presence and bioavailability of cadmium or cadmium compounds in consumer products.

“Consumer product” is defined in Section 716.21(a)(9)(iii) of the rule to mean “any product that is sold or made available to consumers for their use in or around a permanent or temporary household or residence, in or around a school, or in or around recreational areas.” This definition is based on the definition of “consumer use” promulgated in 40 C.F.R. § 710.43 and the definition of “consumer product” promulgated in 40 C.F.R. § 721.3. Potentially affected entities, according to EPA, may include, but are not limited to: manufacturers of basic inorganic chemicals; manufacturers (including importers) of inorganic dyes and pigments; manufacturers of basic organic chemical products; establishments primarily engaged in the primary production of nonferrous metals by smelting ore and/or the primary refining of nonferrous metals by electrolytic methods or other processes; establishments engaging in secondary smelting, refining, and alloying of nonferrous metal; wholesalers of toy and hobby goods; discount department stores; and warehouse clubs and supercenters. EPA explicit listing is not intended to be exhaustive, but rather provides a “guide for readers” regarding entities likely to be affected by rule. Under the rule, the following types of persons need to report health and safety studies:

  • Persons that in the ten years preceding the date a chemical substance is listed at Section 716.120, either have proposed to manufacture or import or have manufactured or imported the listed substance must submit to EPA, during the 60-day reporting period specified in Section 716.65 and according to the reporting schedule set forth at Section 716.60, a copy of each health and safety study that is in their possession at the time the chemical substance is listed; and
  • Persons that at the time the chemical substance is listed propose to manufacture or import, or are manufacturing or importing the listed chemical substance, must submit relevant studies to EPA during the 60-day reporting period specified in Section 716.65 and according to the reporting schedule set forth at Section 716.60.

Persons must submit a copy of all unpublished health and safety studies generally reportable under Sections 716.10 and 716.20, as well as any studies showing “measurable content of cadmium or cadmium compounds in consumer products.” This last category reflects a significant broadening of the reporting requirement.

Because EPA is amending through the rule the TSCA Section 8(d) model rule by adding the recommended category of chemical substances to the TSCA priority testing list, EPA is required to provide a 14-day period within which persons may submit information showing why a chemical substance, mixture, or category should be withdrawn from the amendment. This 14-day period will begin when the rule is published in the Federal Register. Information submitted within this timeframe would need to satisfy the “good cause” standard under 5 U.S.C. § 553(b)(3)(B) of the Administrative Procedure Act (APA) to persuade EPA to reconsider the listing of cadmium and cadmium compounds to the TSCA Section 8(d) model rule.

Why This Rule Is Precedent-Setting

There are multiple aspects of this direct final rule that make it precedent-setting and worthy of careful consideration.

First, the scope of the rule is broad, despite EPA’s characterization to the contrary. Consumer products are broadly defined. Importantly, and as noted above, the rule applies to cadmium at “any measurable level.” This plainly sweeps in a broad variety of consumer products. Impurities are expressly not covered. Because “consumer product” is defined to include products used in and around homes, schools, recreational areas, and temporary residences, arguably products with little or no association with actual consumer use, and certainly little nexus between the NGO petitioners’ primary focus of concern (children’s products), will be covered by the rule.

Second, EPA has broadly defined health and safety studies. For example, the preamble to the rule states that EPA seeks “[a]ny data that bear on the effects of a chemical substance on health or the environment would be included.” Human and environmental exposure studies are also within the scope of reportable studies, as are monitoring data. And, as noted above, studies “showing any measurable content of cadmium or cadmium compounds” are reportable. Arguably, this includes information far beyond health and safety studies as these terms traditionally have been defined.

Third, it is unclear whether EPA will be easily, if at all, persuaded to reconsider the amendment to the TSCA Section 8(d) model rule if comment is submitted with the 14-day period following its promulgation. There is little prospect that an affected party could now successfully challenge now procedures for adding a substance to the list in the TSCA Section 8(d) rule that have been in place since 1982 and 1986. Moreover, and as a practical matter, those parties that might be subject to a forthcoming TSCA Section 4(a) testing rule would probably want all unpublished data that might satisfy testing needs to be submitted to EPA prior to promulgation of a rule establishing new test requirements. Under the APA, the “good cause” requirement is harder to meet than simply filing a notice of intent to submit adverse comments, which is the standard way to blow-up a direct final rule and force EPA to withdraw it and propose the measure. Here, it is by no means clear EPA will be persuaded to withdraw the direct final rule merely because commenters file objections to it. The “good cause” standard has not been invoked much in connection with a TSCA Section 8(d) rule so it is not clear how EPA will respond.

Fourth, as EPA has in connection with TSCA Significant New Use Rules (SNUR), the Section 8(d) rule applies to cadmium in articles, similar to EPA’s TSCA Section 8(d) rule for lead. In that rule, however, the nexus between the scope of the rule and children’s exposure to lead was clear. In this rule, the scope of the rule is much broader and brings in entities will little to no relationship to the reason why EPA was asked to address cadmium exposures in children’s products.

Finally, given all these precedent-setting implications, it is a bit of a wonder why EPA has not specifically requested comment on them, suggesting that a direct final rule is a poor choice of administrative platform on which to launch this direct final rule. EPA may be persuaded to reconsider how best to proceed if commenters raise these and related issues during the 14-day comment period after the rule is issued in the Federal Register.