Private: Toxic Ambiguity: The Dangerous Mixed Messages of the Udall-Vitter Bill to Reform TSCA

Most would agree that the Toxic Substances Control Act (TSCA) is one of our least effective federal environmental laws.  It is a welcome development, then, that Congress has begun seriously to consider legislation to reform this statute.  However, a prominent TSCA reform bill now circulating in Congress – the Frank R. Lautenberg Chemical Safety for the 21st Century Act, sponsored by Tom Udall and David Vitter – may stymie meaningful federal regulation of chemicals while preempting the state laws that have stepped into the breach opened by the failure of TSCA.  This would leave us even worse off than we are today.

It is common ground among experts in the law of toxic substances control that a major reason for the failure of TSCA is the paralyzing effect of a 1991 federal court decision – Corrosion Proof Fittings v. EPA – invalidating the Environmental Protection Agency’s ban on asbestos.  There, the court piled on stifling analytical requirements as prerequisites for regulatory action on toxic chemicals and applied strikingly strict scrutiny to EPA's evaluation of the costs and benefits of banning asbestos.  So large does this decision loom in the failed history of TSCA that any law aiming to reform TSCA will almost certainly be viewed with close attention to how the law purports to change the features of TSCA that spelled doom for EPA's ban on asbestos in Corrosion Proof Fittings.

Here is the rub: In two significant respects, the Udall-Vitter bill does not change the features of TSCA that undid EPA’s asbestos ban.  The bill retains the same overall formulation of the safety standard to be achieved (protection against “unreasonable risks”) and the same standard for judicial review (“substantial evidence”) that together brought down the ban on asbestos.  To retain these features of TSCA even though they proved so damaging in the litigation over asbestos is to signal that the Udall-Vitter formula for TSCA reform is not so reformative after all.

For the safety standard, the Udall-Vitter bill pairs a standard of "no unreasonable risk of harm to health or the environment" with an instruction to EPA not to consider "cost or other nonrisk factors" in determining whether a risk is “unreasonable.”  For many years, courts have interpreted “unreasonable,” when used in health, safety and environmental statutes, to permit a balancing of costs and benefits.  It is thus confusing to pair the term “unreasonable risk” with an injunction not to consider costs and other factors besides risk.  Yet the Udall-Vitter bill does not provide further clarity; it nowhere defines “unreasonable risk.”

Legal confusion has consequences.  When a statute is ambiguous, courts will defer to an agency's reasonable interpretation of that statute.  The juxtaposition of language signaling a desire for cost-benefit balancing and language signaling a hostility to such balancing may be unclear enough to allow the EPA ultimately to exercise its discretion to choose which approach – cost-benefit balancing or no cost-benefit balancing – to adopt.  Whatever EPA's present inclinations in this regard might be, there is no guarantee they will remain fixed in future administrations.

What is guaranteed, however, is that ambiguity will encourage time- and resource-consuming litigation, and the outcome of such litigation is not assured.  In Corrosion Proof Fittings, the court struck down EPA’s ban on asbestos largely in reliance on a difference of opinion between the EPA and the court about the “unreasonableness” of the risks posed by asbestos.  If, in the face of this infamous precedent, Congress again chooses to describe the safety standard in terms of “unreasonable risk,” a court may well conclude that Congress must not have meant wholly to reject the standard that helped scotch the ban on asbestos.

The reason why it is important not to inject cost-benefit analysis into chemical safety determinations is that this analysis skews systematically against protective chemical regulation.  The benefits of chemical safety – in better health, longer lives and a cleaner environment – are especially difficult to quantify and monetize.  The benefits of chemical safety, moreover, tend to surface years into the future when the long-latency diseases – such as cancer – that are toxic chemicals’ calling cards begin to appear.  As cost-benefit analysis is commonly conducted, however, regulatory benefits occurring in the future are discounted back to the date on which regulation producing those benefits is put in place.  Such discounting drastically shrinks future benefits, often to the point of triviality.  In failing clearly to rule out the restrictive cost-benefit metric, even in the initial determination of whether a chemical is unacceptably risky, the Udall-Vitter bill threatens to continue the federal government’s long incapacity on chemical safety.

Beyond cost-benefit analysis, there are many other ways to understand "unreasonableness" that would severely limit the regulation of chemical risks.  One could specify a high numerical level of risk (1 in 1,000, say) as the threshold for unreasonableness.  One could, alternatively, stipulate that a risk is unreasonable only if consumers already indicate a willingness to take steps to avoid the risk.  Or one could hold that a risk is not unreasonable if it is no greater than risks citizens often take in their daily lives, such as driving automobiles.  Even short of a cost-benefit standard, the language of "unreasonable risk," without further elaboration from Congress, could unduly hamper protective safety standards for toxic chemicals.

A second feature of the Udall-Vitter bill that bodes poorly for its effectiveness is the standard of review the courts would be directed to use in reviewing EPA’s rules under the law.  The standard of review is basically an instruction to courts about how forgiving or grudging they should be in evaluating agencies’ regulatory work.  The two predominant standards applied to contemporary agency rules are “arbitrary and capricious” and “substantial evidence.”  Mystifyingly, the Udall-Vitter bill opts to retain the latter standard – present in TSCA now – in the reform bill.  It was this very standard that helped to embolden the court of appeals to overturn EPA’s ban on asbestos.  Retention of the standard of review that was used to overturn the asbestos ban could easily be viewed as an endorsement of the beady-eyed scrutiny the court applied in Corrosion Proof Fittings.

In overturning the asbestos ban, the court explicitly called out the difference between the “arbitrary and capricious” and “substantial evidence” standards in supporting its ruling.  In the intervening years, the Supreme Court has done nothing to clear up confusion generated by differing approaches among the federal courts of appeal to the relationship between these standards of review.  In its one reference to the differing signals from the lower courts, in Dickinson v. Zurko, the Supreme Court pointedly declined to take a stand in the debate.  

To the extent these standards of review are different, it is widely understood that the substantial evidence standard gives courts a freer hand in challenging an agency’s judgments.  The license to second guess an agency’s judgments is especially threatening to rules on chemical safety, which almost inevitably take place in settings rife with scientific uncertainty.  In fact, the D.C. Circuit recently highlighted the challenges of applying the substantial evidence standard of review to regulations “rooted in inferences from complex scientific and factual data.”  For these reasons, the choice of a standard of review for a reformed TSCA, no matter how abstruse it might sound, is a policy choice of great significance.

The Udall-Vitter bill’s idiosyncratic use of the terminology of "unreasonable risk" (to indicate something other than cost-benefit balancing) and "substantial evidence" (to indicate, perhaps, arbitrary-and-capricious review) will sow needless confusion.  And the inevitable companions of confusion in the law are enlarged agency discretion, regulatory uncertainty and unpredictable litigation.  Combining an unpredictable safety standard and a strict standard of review with the preemption of state laws on chemical safety may well produce the worst of all possible worlds: "reform" that undoes the only meaningful chemical safety regimes now in place in this country and replaces them with a program that may well produce no progress at all.