Hogan Lovells wins crucial APA appeal for Inhance Technologies over EPA at 5th Circuit
Washington, D.C., 25 March 2024 – A cross-practice team from global law firm Hogan Lovells has won a critical Administrative Procedure Act appeal for client Inhance Technologies at the 5th Circuit. The Court ruled that the Environmental Protection Agency (EPA) exceeded its statutory authority when it issued orders under the Toxic Substances Control Act (TSCA) directing Inhance Technologies to shut down its barrier technology facilities.
Inhance Technologies uses a fluorination process used to treat fluorinated barrier packaging, which protects the environment by preventing permeation of container contents through evaporative emissions.
The Court’s decision is a decisive victory for Inhance Technologies as it vacates EPA’s orders, securing the continued operations of its U.S.-based barrier technology facilities, and averting disruption to downstream industries and related supply chain impacts.
The EPA issued two orders under Section 5 of TSCA, prohibiting Inhance Technologies from inadvertently producing perfluoroalkyl and polyfluoroalkyl (PFAS) during its fluorination process. In its ruling invalidating the orders, the Court agreed with Inhance Technologies that EPA lacked the statutory authority to issue these orders.
The case hinged on EPA’s use of Section 5 of TSCA, which refers specifically to the regulation of chemical substances for a “significant new use.” EPA, which has increasingly turned its focus to PFAS in recent years, issued Inhance Technologies a Notice of Violation in 2022, requiring the company to change its fluorination process or halt the fluorination of any products that resulted in the creation of PFAS.
Inhance Technologies argued that EPA exceeded its statutory authority because the company’s 40-year-old fluorination process was not a “significant new use” under TSCA.
The Court agreed, concluding that EPA’s interpretation of Section 5 “distorts TSCA’s framework and defies common sense.”
“The EPA may not contort the plain language of TSCA’s Section 5 to deem a forty-year-old ongoing manufacturing process a ‘significant new use’ subject to accelerated regulatory process provided by that part of the statue,” the court concluded.
The Hogan Lovells team (all Washington, D.C. unless otherwise stated) was led by Co-Head of the firm Appellate practice Cate Stetson, alongside co-head of the APA group Susan Cook, head of the firm’s Environmental practice Adam Kushner, and Environmental partner Tom Boer (San Francisco). They were assisted by senior associates Marlan Golden and Alexander Woo, and associate Claire Rhodes.
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