Litigation Watch: Ethylene Oxide, Formaldehyde, and the Risk of Risk Assessments

The chemical and health care industries know that more stringent EPA regulation of the manufacture and use of ethylene oxide (EtO) is coming. Questions remain, however, about whether and how EPA will revisit the 2016 Integrated Risk Information System (IRIS) value for EtO in assessing cancer risk. No matter what EPA does with its technical standards, failure to address the 2016 IRIS value may spur expanded private tort litigation, which has relied on that questioned value. Similar EPA actions—or failure to act—on formaldehyde and other chemicals currently subject to EPA review under the Toxic Substances and Control Act (TSCA) also create near-term regulatory and longer-term litigation risk.

Keeping Up with EtO

Regulatory Update

On June 17, EPA agreed to reconsider the August 2020 National Emission Standards for Hazardous Air Pollutants: Miscellaneous Organic Chemical Manufacturing Residual Risk and Technology Review (the “MON Rule”).^[1] The MON rule is the first EPA final rule to use the 2016 IRIS value. Responding to five petitions for reconsideration from environmental groups, industry groups, and the Texas Counsel on Environmental Quality (TCEQ), EPA granted reconsideration on two bases. First, the TCEQ risk value for EtO was finalized after the comment period on the proposed rule closed. Second, EPA now determined that more stringent standards are required for the MON sector.^[2] EPA will reconsider and invite public comment on two aspects of the final rule:

1. the use of EPA’s IRIS value for ethylene oxide in assessing cancer risk for the source category; and
2. the use of the TCEQ risk value for ethylene oxide as an alternative.

In the letter announcing the decision, EPA notes it is “continuing to review all issues raised in the petitions for reconsideration and may choose to initiate reconsideration of additional issues in the future.”^[3] This suggests EPA may later address other concerns with the MON Rule, including those raised by environmental groups.

EPA’s recent actions are rooted in the controversial December 2016 IRIS risk assessment for EtO.^[4] EtO is a flammable, colorless gas used to sterilize medical equipment. It is also used to make other chemicals and products like antifreeze, textiles, plastics, detergents, and adhesives.^[5] EPA utilizes the IRIS to identify and characterize the health hazards of chemicals like EtO found in the environment.^[6] The 2016 IRIS risk assessment for EtO characterized the chemical as a more potent “carcinogenic to humans” by the inhalation exposure route than previously understood. Critics, including industry and certain states, claim that EPA used unconventional statistical modeling to issue an assessment that overestimated the risk of EtO exposure. After the publication of the 2016 IRIS assessment, TCEQ conducted an in-depth review of the 2016 assessment and claimed scientific deficiencies.^[7] As a result, TCEQ issued its own EtO Dose Response Assessment in May 2020. This found EtO is a less potent carcinogen than EPA’s 2016 report.^[8]

The 2016 IRIS value was used in the 2014 National Air Toxics Assessment (NATA), issued in August 2018.^[9] The 2014 NATA similarly identifies EtO as a significant cancer risk in areas impacted by EtO emissions.^[10] Since publication of the 2014 NATA, EPA has advanced a rulemaking utilizing the 2016 IRIS value under a court-imposed deadline. In March 2017, the United States District Court for the District of Columbia ordered EPA to complete 20 source category residual risk and technology reviews (RTRs) within the next three years, including for the MON sector.^[11]

Accordingly, in December 2019, EPA proposed the MON Rule[12] and the Advance Notice of Proposed Rule Making: National Emission Standards for Hazardous Air Pollutants (NESHAP): Ethylene Oxide Commercial Sterilization and Fumigation Operations.^[13] The MON Rule was finalized in August 2020. EPA did not address comments regarding the validity of the use of the 2016 IRIS value.^[14] In May 2021, EPA submitted an information collection request (ICR) for a revised NESHAP for EtO Commercial Sterilization facilities. ^[15] On June 9, 2021, the public comment period also closed for EPA’s ICR.^[16]

Acting Assistant Administrator Joseph Goffman stated that one of the bases for reconsideration of the MON Rule is that “the risk posed by ethylene oxide is of central relevance to EPA’s determination that risks from sources in the Miscellaneous Organic Chemical Manufacturing source category are unacceptable and that more stringent standards are required.”^[17] This suggests EPA may reaffirm use of the 2016 IRIS value. Reconsideration of the MON Rule similarly signals a tightening of the NESHAP for the commercial sterilization source category.

EPA’s Inspector General

EtO has caused controversy within EPA. On March 31, 2020, the EPA Office of Inspector General (OIG) called on EPA’s Office of Air and Radiation (OAR) to take prompt action to inform residents living near 25 EtO-emitting facilities identified using the 2014 NATA about the health concerns of exposure to EtO.^[18] In response, EPA’s Office of Air and Radiation (OAR) stated that follow-up analysis was needed before community outreach should occur. OAR also suggested that states are best positioned to lead outreach efforts.^[19] After months of public back and forth,^[20] on January 4, 2021, Administrator Wheeler issued a letter stating that community outreach and notification regarding EtO risks need not be immediate. In late January 2021, EPA then published status reports describing the technical analysis and outreach conducted in each of the 25 communities NATA identified as potentially having the highest risk from EtO emissions.^[21]

Since then, OIG has continued to push OAR to take further action on EtO. In May 2021, OIG issued a report urging EPA to conduct new RTRs for EtO-emitting sources.^[22] OIG concluded that EPA has not incorporated the new risks from the 2016 risk assessment into the RTR for EtO, and thus “cannot provide assurance that its current NESHAPS are sufficiently protective.”^[23] Further, on June 25, 2021, OIG announced that it will be evaluating whether EPA is timely conducting residual RTRs of stationary sources emitting air toxics.^[24]

Formaldehyde – Is It Next?

EPA’s actions on EtO may suggest how EPA will proceed on other outstanding chemical and toxics issues.

For example, formaldehyde is a naturally occurring chemical. It is found in a variety of ubiquitous products, including construction materials and insulation; plywood and particleboard used in consumer products like cabinets, flooring, and furniture; insecticides; and in household glues, paints, and permanent press fabrics. Formaldehyde is also used as a preservative in medical laboratories and mortuaries, as well as in some cosmetic products.^[25]

In June 2010, the EPA issued a draft IRIS risk assessment for formaldehyde.^[26] The draft classified formaldehyde as a human carcinogen for the inhalation route. Like the EtO IRIS risk assessment, this draft received critical comment from the scientific community.^[27] One of the most notable was the National Academies of Science (NAS). In a peer review from 2011, NAS stated that the assessment was “not prepared in a logically consistent fashion” and needs “substantial revision.”^[28] NAS found that the draft assessment supported the conclusion that formaldehyde can cause cancers of the nose, nasal cavity, and upper throat. However, NAS concluded that it did not adequately support that formaldehyde causes other cancers of the respiratory tract, leukemia, or several other noncancer health outcomes like nervous system function and reproductive issues.

In 2014, EPA began working on a new draft IRIS assessment of formaldehyde that incorporates comments received in the 2011 NAS peer review.^[29] Although the initial draft assessment was issued over 10 years ago, the formaldehyde assessment remains in step one of the IRIS program. Nevertheless, EPA’s formaldehyde webpage states that an updated timeline will be posted in the June 2021 IRIS Program Outlook.^[30] That time is up.

Beyond EtO and formaldehyde, the Biden Administration is addressing additional chemicals under the TSCA framework. The 2016 amendments to TSCA require EPA to conduct risk evaluations for certain high-priority chemicals. A risk evaluation determines whether a chemical substance presents an unreasonable risk to health or the environment, under the conditions of use.^[31] In conducting a risk evaluation, EPA must evaluate both hazard and exposure, exclude consideration of costs, use the best available science, and ensure decisions are based on the weight-of-scientific-evidence.^[32]

Last year, the Trump Administration issued final TSCA risk evaluations for the first 10 high-priority chemicals. In February 2021, the Biden Administration announced that it is revisiting the final TSCA risk evaluations for these 10 chemicals.^[33] EPA has stated that the review is occurring “in light of statutory obligations and policy objectives related to use of the best available science and protection of human health and the environment.”^[34]

Government Regulation, Then Plaintiff Litigation

While EPA’s actions are likely to lead to more stringent technical standards relating to the manufacture and use of the chemicals under review, regulated entities should not underestimate the significance of the EPA risk assessments themselves. The risk assessments are, of course, central to justifying any technical standards EPA may set. And the risk assessments themselves may be a catalyst for private party litigation.

Following publication of the 2014 NATA, the 2016 IRIS value for EtO has been used by toxic tort plaintiffs and states against companies using and emitting EtO. For example, plaintiffs who lived and worked near the former Sterigenics medical sterilization facility in Willowbrook, Illinois filed a flurry of lawsuits.^[35] The Sterigenics Willowbrook facility was permanently shut down in September 2019, after Illinois EPA prohibited Sterigenics from using EtO in sterilization in February 2019.^[36]

Formaldehyde litigation is also developing. In September 2018, one environmental group sued EPA under the Freedom of Information Act to obtain a copy of the 2018 Version-Formaldehyde Assessment, a draft health assessment that is part of the IRIS process.^[37] EPA contended that it was not required to provide the report, given it is not final. Recently, the United States District Court for the District of Columbia ruled that EPA is justified in withholding the draft assessment under the deliberative process privilege exemption.^[38]

Nevertheless, class action lawsuits have been filed against companies using formaldehyde in their products, particularly laminate wood flooring.^[39] A revised EPA risk assessment for formaldehyde that asserts higher human health risks could—even without scientific consensus regarding such risks—result in additional private party lawsuits. Lawsuits regarding claimed “forever chemicals” like perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) are already common.^[40]

Key Takeaways

• EPA is reconsidering the MON Rule and continuing to gather data for a revised commercial sterilization NESHAP for ethylene oxide. Statements by EPA leadership reflect such standards will be more “stringent,” indicating the 2016 IRIS value will not be meaningfully reconsidered.
• The EPA is also continuing work on risk assessments for formaldehyde and revisiting the first 10 TSCA risk evaluations.
• Even where there is controversy and disputes relating to the accuracy of EPA and other governmental or regulatory risk assessments, these can be catalysts for toxic tort and class action litigation. Examples include risk assessments for EtO, formaldehyde, and glyphosate by the World Health Organization International Agency for Research on Cancer.
• When considering future compliance obligations and risks related to the regulation of chemicals and toxics, regulated entities should track, comment on, and be prepared to respond to more than just the technical standards and regulations. Agency risk assessments themselves are both the bases for technical standards and frequently generate collateral risk and liability through private party litigation.

For further information or questions about whether these or other regulatory actions on chemicals or toxics may impact your business, compliance obligations, and risk, please contact Jonathan D. Brightbill (Partner, White Collar, Regulatory Defense & Investigations/Environmental Litigation), Madalyn Brown (Associate, Environmental), or your Winston relationship attorney.

We note that government orders on the federal, state, and local level are changing every day, and the information contained herein is accurate only as of the date set forth above.

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^{[1] 85 Fed. Reg. 49,084 (Aug. 12, 2020).}

^{[2] Letter from Joseph Goffman, Acting Assistant Administrator, to Brendan Mascarenhas, Director Regulatory and Technical Affairs, American Chemistry Council (Jun. 17, 2021), available at https://insideepa.com/sites/insideepa.com/files/documents/2021/jun/epa2021_1233.pdf.}  

^{[3] Id.}

^{[4] Evaluation of Inhalation Carcinogenicity of Ethylene Oxide (CASRN 75-21-8): In Support of Summary Information on the Integrated Risk Information System (IRIS) (Dec. 2016), available at https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/1025tr.pdf.}

^{[5] Hazardous Air Pollutants: Ethylene Oxide, https://www.epa.gov/hazardous-air-pollutants-ethylene-oxide.} 

^{[6] Integrated Risk Information System, https://www.epa.gov/iris.}  

^{[7] Ethylene Oxide (EtO) Development Support Document (DSD), https://www.tceq.texas.gov/toxicology/ethylene-oxide.}

^{[8] Ethylene Oxide Carcinogenic Dose-Response Assessment (May 15, 2020), available at https://www.tceq.texas.gov/assets/public/implementation/tox/dsd/final/eto.pdf.}

^{[9] 2014 National Air Toxics Assessment, https://www.epa.gov/national-air-toxics-assessment/2014-national-air-toxics-assessment.}  

^{[10] Id.}

^{[11] See Cal. Communities Against Toxics, et al. v. Scott Pruitt, 241 F. Supp. 3d 199 (D.D.C 2017).} 

^{[12] 84 Fed. Reg. 69,182 (Dec. 17, 2019).}

^{[13] 84 Fed. Reg. 67, 889 (Dec. 12, 2019).}

^{[14] 85 Fed. Reg. 49,084 (Aug. 12, 2020).}

^{[15] 86 Fed. Reg. 24, 862 (May 10, 2021).}

^{[16] Id. See also EPA Docket EPA–HQ–OAR–2019–0178, available at https://www.regulations.gov/document/EPA-HQ-OAR-2019-0178-0144.}

^{[17] Letter from Joseph Goffman, Acting Assistant Administrator, to Brendan Mascarenhas, Director Regulatory and Technical Affairs, American Chemistry Council (Jun. 17, 2021), available at https://insideepa.com/sites/insideepa.com/files/documents/2021/jun/epa2021_1233.pdf.}  

^{[18] Management Alert – Prompt Action Needed to Inform Residents Living Near Ethylene Oxide-Emitting Facilities About Health Concerns and Actions to Address Those Concerns (Mar. 31, 2020), available at https://www.epa.gov/office-inspector-general/report-management-alert-prompt-action-needed-inform-residents-living-near.}

^{[19] Memorandum from Douglas Benevento, Associate Deputy Administrator, to Katie Butler, Acting Assistant Inspector General for Audit and Evaluation, Office of Inspector General, Response to Office of Inspector General Management Alert (May 15, 2020), available at https://www.epa.gov/sites/production/files/2020-08/documents/_epaoig_20-n-0128_agency_response.pdf.} 

^{[20] See Mem. from Sean W. O’Donnell to Douglas Benevento, Associate Deputy Administration USEPA, Response to Planned Corrective Actions for Office of Inspector General Report No. 20-N-0128, Prompt Action Needed to Inform Residents Living Near Ethylene Oxide-Emitting Facilities About Health Concerns and Actions to Address Those Concerns (Aug. 19, 2020), available at https://www.epa.gov/sites/production/files/2020-08/documents/_epaoig_20-n-0128_ig_comment_on_response.pdf.}

^{[21] Inspector General Follow-up: Ethylene Oxide, https://www.epa.gov/hazardous-air-pollutants-ethylene-oxide/inspector-general-follow-ethylene-oxide-0.}  

^{[22] EPA Should Conduct New Residual Risk and Technology Reviews for Chloroprene- and Ethylene Oxide-Emitting Source Categories to Protect Human Health (May 6, 2021), available at https://www.epa.gov/office-inspector-general/report-epa-should-conduct-new-residual-risk-and-technology-reviews.}  

^{[23] Id. at 14.}

^{[24] See Mem. from Renee McGhee-Lenart, Acting Director for Programs, Offices, and Centers Oversight Directorate Office of Special Review and Evaluation, to Joseph Goffman, Acting Assistant Administrator Office of Air and Radiation, Notification of Evaluation: Overdue Residual Risk and Technology Reviews (Jun. 25, 2021), available at https://www.epa.gov/sites/production/files/2021-06/documents/_epaoig_notificationmemo_6-25-21_technology.pdf.} 

^{[25]Facts About Formaldehyde, https://www.epa.gov/formaldehyde/facts-about-formaldehyde.}  

^{[26] IRIS Toxicological Review of Formaldehyde (Inhalation) (External Review Draft, 2010), available at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=223614.}  

^{[27] Jeremy P. Jacobs, NAS Reviewers Slam EPA's Formaldehyde Assessment, N.Y. Times, Apr. 8, 2011, available at https://archive.nytimes.com/www.nytimes.com/gwire/2011/04/08/08greenwire-nas-reviewers-slam-epas-formaldehyde-assessmen-83879.html.}  

^{[28] Press Release: EPA's Draft Health Assessment for Formaldehyde Needs Improvement (Apr. 8, 2011), available at https://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=13142.}

^{[29] IRIS Toxicological Review of Formaldehyde (Inhalation).} 

^{[30] IRIS Toxicological Review of Formaldehyde (Inhalation).} 

^{[31] Risk Evaluations for Existing Chemicals under TSCA, https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/risk-evaluations-existing-chemicals-under-tsca.}   

^{[32] Id.}

^{[33] Press Release: Updates on Chemical Safety Actions (Feb. 5, 2021), available at https://www.epa.gov/chemicals-under-tsca/updates-chemical-safety-actions.} 

^{[34] Id.}

^{[35] Toxic emissions lawsuits against Sterigenics skyrocket ten-fold from 75 cases to more than 700 (Aug. 21, 2020), available at https://www.willowbrookcancerlawsuit.com/toxic-emissions-lawsuits-against-sterigenics-skyrocket-ten-fold-from-75-cases-to-more-than-700.}

^{[36] Press Release: Illinois EPA Director Seals Portions of Sterigenics Due to Public Health Hazards from Ethylene Oxide Emissions. Order to Prevent Any New Sterilization Cycles Using Ethylene Oxide Friday, February 15, 2019 – Environmental Protection Agency (Feb. 15, 2019), available at https://www2.illinois.gov/Pages/news-item.aspx?ReleaseID=19717.}

^{[37] Public Employees for Environmental Responsibility v. U.S. Environmental Protection Agency, 1:18-cv-02219, D.D.C.}

^{[38] Michael Phillis, EPA’s Daft Formaldehyde Assessment Can Stay Private (Jun. 21, 2021), available at https://www.law360.com/articles/1395613.} 

^{[39] See Formaldehyde Flooring Class Action Lawsuit, https://formaldehydeflooringlawsuit.com/; Lumber Liquidator Class Action Lawsuit, https://www.classlawgroup.com/lumber-liquidators-formaldehyde-lawsuit/.}

^{[40] See, e.g., Michael Phillis, Firefighting Foam Maker Pays $17.5M in First MDL Settlement (Jan. 7, 2021), available at https://www.law360.com/articles/1342453/firefighting-foam-maker-pays-17-5m-in-first-mdl-settlement ; Kris Maher and Cameron McWhirter, DuPont Settlement of Chemical Exposure Case Seen as ‘Shot in the Arm’ for Other Suits, the Wall Street Journal, Feb. 13, 2017, available at https://www.wsj.com/articles/dupont-chemours-settle-teflon-chemical-exposure-case-for-671-million-1486987602?mod=article_inline.}