The U.S. Court of Appeals for the District of Columbia Circuit ruled on Friday that an Environmental Protection Agency (EPA) rule aimed at increasing transparency about chemicals wrongly allowed the unlawful disclosure of manufacturers’ trade secrets. A three-judge panel vacated parts of the 2023 rule while rejecting a separate challenge to the rule brought by environmentalists.
Court Sides with Industry on Trade Secret Protections
Responding to concerns raised by the American Chemistry Council and the American Fuel and Petrochemical Manufacturers, the court determined that the EPA’s rule violated the confidentiality protections outlined in the Toxic Substances Control Act (TSCA). The industry groups argued that the rule failed to account for complex supply chains involving downstream manufacturers and importers.
Senior U.S. Circuit Judge Harry Edwards, writing for the court, noted that the EPA’s approach did not adequately address situations where companies might lack knowledge about the chemical composition of products they handled. “This regulatory scheme cannot be squared with the commands of the statute,” Edwards stated. The court, therefore, vacated parts of the rule allowing for the unlawful disclosure of confidential information.
Environmentalists’ Challenge Falls Short
While the court sided with industry groups on trade secret protections, it rejected a challenge from the Environmental Defense Fund (EDF), which argued that the rule overly restricted the disclosure of health and safety information. EDF attorney Samantha Liskow expressed disappointment, stating, “We are very disappointed that the court today upheld regulations that allow industry to withhold information about dangerous chemicals in our communities.”
The court, however, found the rule’s definitions consistent with TSCA’s text and rejected the argument that it favored secrecy over public safety.
EPA and Industry React
The EPA, which finalized the rule in June 2023, had promoted it as a step toward improving transparency in chemical safety regulations. Following the ruling, the agency announced it was reviewing the decision but did not provide further comment. The American Chemistry Council, one of the trade groups that sued over the rule, also declined to respond.
The now-vacated provisions of the rule had allowed the EPA to publish certain chemical data unless manufacturers successfully demonstrated that the information qualified as confidential under TSCA. However, industry groups contended that these provisions failed to protect trade secrets in scenarios involving complex supply chains, including foreign manufacturers and importers.
The case, titled Environmental Defense Fund v. United States Environmental Protection Agency, highlights the ongoing tension between public safety concerns and trade secret protections in the chemical industry.
