On March 13, 2015, the EPA's Environmental Appeals Board (EAB) issued an important ruling in a Toxic Substances Control Act (TSCA) enforcement matter. The case is In re: Elementis Chromium, Inc., TSCA Appeal 13-03.
The Chief Administrative Law Judge imposed a fine of $2,571,800 against Elementis Chromium, a manufacturer and distributor of chromium chemicals, finding that the company violated Section 8(e) of the TSCA by failing to submit to EPA its occupational epidemiology study of hexavalent chromium (its "report"). On appeal, Elementis Chromium argued that the EPA's complaint should be dismissed as it was untimely because the five year federal statute of limitations (28 U.S.C. Section 2462) had expired, and moreover, that it was exempt from the TSCA reporting requirement on the basis of long-standing EPA guidelines interpreting Section 8(e).
The EAB held that the statute of limitations did not expire because the "continuing violation" doctrine applied to this matter and to the failure of Elementis Chromium to submit the report to EPA. Nevertheless, the EAB concluded that the decision to fine Elementis Chromium must be reversed because Elementis Chromium was correct in asserting that agency guidance exempted Elementis Chromium's report from Section 8(e) because EPA was already adequately informed of the corroborative information contained in the study.
With respect to the statute of limitations (which applies in administrative enforcement matters), the EAB noted that Elementis Chromium's last date of alleged non-compliance took place on November 17, 2008 -- based on the continuing violations doctrine -- and, accordingly, the filing of the complaint in September 2012 was well within the operative five-year period. The EAB disregarded Elementis Chromium's argument that the limitations period began to run when Elementis Chromium received the report -- in 2002 -- because a Section 8 (e) violation is always an ongoing violation because each day the study is withheld is itself a new day of violation. This reading of the statute is confirmed, the EAB holds, by a review of the statutory language and a number of applicable court rulings reviewing the failure of a regulated party to provide a required notice or information to the agency. The Supreme Court's recent decision in Gabelli v. S.E.C., 133 S. Ct. 1216 (2013), was distinguished because it resulted from an SEC enforcement action.
With regard to the impact of EPA's TSCA guidance, the EAB notes that in 1978 EPA published a Policy Statement on Section 8(e) which provides an exemption for "presumptively reportable information" that was corroborative of a well-established adverse effect, and this policy was reiterated in 1991 and 2006. The EAB was persuaded that the Elementis Chromium study fit within this administrative exemption. Of course, EPA can always change its administrative guidance, and perhaps could do so without adhering to the notice and comment provisions of the Administrative Procedures Act (APA) based on the recent Supreme Court APA ruling in Perez v. Mortgage Bankers Association.