The U.S. Court of Appeals for the Ninth Circuit on August 26 denied all petitions for review challenging the Environmental Protection Agency’s PBT exemption rule, the portion of the agency’s 2024 framework rule for new chemical reviews that determines how persistent, bioaccumulative, and toxic chemicals are evaluated for exemptions from premanufacture notice requirements under the Toxic Substances Control Act. By rejecting challenges from environmental groups and a union, the court left in place the EPA’s decision to assess PBT exemption requests case by case rather than imposing a categorical ban. The ruling also matters because it shows how courts will examine agency discretion under TSCA in the aftermath of Loper Bright, the Supreme Court decision that ended Chevron deference.
TSCA’s PMN Process and the Exemption Design Problem
Under TSCA, manufacturers of new chemical substances generally must file a premanufacture notice with the EPA before beginning manufacture. The statutory review window is 90 days, and the EPA is expected to complete an evaluation of a new chemical’s risks within that period. In practice, though, the process often takes considerably longer, particularly when a substance raises questions about persistence, bioaccumulation, or toxicity.
Because the PMN process can be slow and expensive, TSCA gives the EPA discretion to exempt manufacturers from all or part of the PMN process under certain conditions. The central statutory constraint is that an exemption may be granted only where the proposed use will not present an unreasonable risk. That standard is straightforward on paper but becomes complicated when applied to chemicals that are designed to last in the environment, accumulate in living organisms, and produce toxic effects.
Before the 2024 framework rule, the EPA had not written specific guidance addressing how PBTs should be considered under the statutory low-volume and low-exposure exemption provisions. The 2024 rule changed that. It added provisions specifying when PBTs may qualify for those exemptions and articulated a framework for making the case-by-case determinations that Congress left to the agency.
What Are PBTs and Why Do They Present a Unique Regulatory Problem?
PBTs are chemicals that combine three characteristics: persistence in the environment, bioaccumulation in organisms, and toxicity. These properties can compound serious hazards over time. A substance that degrades slowly may remain in soil, water, or sediment for years after a relatively small release. If it also bioaccumulates, it can move up the food chain and reach harmful concentrations in fish, wildlife, or humans. Add toxicity, and even a use that looks small in volume may still carry risks that are disproportionate to the amount manufactured.
This combination makes PBTs especially difficult to manage through traditional exposure assessments. A low-volume exemption might appear justified if the quantity of a chemical is small, but a PBT with a long half-life and strong bioaccumulation potential could still create meaningful environmental loading or human exposure. Likewise, a low-exposure exemption might seem appropriate at the manufacturing stage, but downstream consumer use could reintroduce exposure pathways that the initial evaluation failed to capture. The EPA’s 2024 rule was designed to confront these issues directly.
How Does the EPA’s PBT Exemption Rule Work?
Under the 2024 rule, the EPA evaluates PBT exemption requests on a case-by-case basis. A PBT can qualify for a statutory low-volume or low-exposure exemption only if the proposed use will not present an unreasonable risk. The EPA applies rigorous scrutiny and expects applicants to show that their proposed uses minimize or eliminate meaningful exposure pathways. The rule does not categorically exclude all PBTs from the exemption pathway, but the practical bar for obtaining an exemption remains high.
Rather than announcing a blanket ban, the EPA built its rule around the idea that each PBT and each use pattern is different. A sealed industrial process with no anticipated releases may have a very different risk profile than a PBT incorporated into a consumer product. The case-by-case framework allows the agency to consider the full context of manufacturing, processing, distribution, use, and disposal. It also gives the EPA enough flexibility to deny exemptions when the inputs or outputs of a proposed use are too uncertain to support a conclusion of no unreasonable risk.
Who Challenged the Rule and What They Argued
Two sets of petitioners brought their objections to the Ninth Circuit. The first group included Alaska Community Action on Toxics and the Environmental Defense Fund. They argued that the EPA lacked statutory authority to permit exemptions for PBTs and that the agency should have categorically barred PBTs from qualifying for low-volume or low-exposure exemptions. Their challenge rested on the view that PBTs are, by definition, too dangerous to ever meet the “no unreasonable risk” standard that governs exemptions under TSCA.
The environmental petitioners also made a procedural attack. They contended that even if the EPA had authority to create an exemption framework, the decision to adopt a case-by-case approach rather than a categorical ban was arbitrary and capricious. In their telling, the risks associated with PBTs were so well established that the EPA could not rationally allow any exemption pathway for them.
The second challenger was the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, commonly known as the UAW. The union raised a narrower administrative law argument. It claimed that the EPA failed to adequately respond to a rulemaking comment concerning TSCA Section 2604(e) consent orders. Those consent orders are an important part of the TSCA new chemical review system because they allow the EPA to impose protective conditions on a chemical that the agency believes may present an unreasonable risk. The UAW argued that the agency should have addressed how the exemption framework interacts with consent orders and that its failure to do so was a procedural error.
Why the Statutory Authority Challenge Failed
In evaluating the environmental petitioners’ statutory argument, the Ninth Circuit applied the independent-review framework that the Supreme Court established in Loper Bright. Before Loper Bright, courts often gave agencies the benefit of the doubt when a statute was ambiguous. The Chevron framework instructed judges to defer to reasonable agency interpretations of ambiguous provisions. Loper Bright changed that instruction. Courts must now independently determine what the statute means, even though agency expertise still matters when a statute leaves room for judgment.
The court concluded that TSCA gives the EPA discretion to evaluate exemption requests on a case-by-case basis. The statutory language does not require the EPA to treat PBTs as an automatic disqualification. Instead, it authorizes exemptions when the proposed use will not present an unreasonable risk, and it leaves the agency with meaningful room to decide how that standard should be applied. The environmental petitioners may have preferred a stricter policy, but the court found no statutory mandate forcing the EPA to adopt one.
This result is important for the broader regulatory community. Loper Bright eliminated Chevron deference, but it did not eliminate agency discretion. Courts will still step aside when Congress has intentionally delegated authority to an agency. The Ninth Circuit’s decision is a concrete demonstration that agencies can prevail in post-Loper Bright litigation when the underlying statute grants them real discretion and they exercise that discretion within recognized limits.
Why the Arbitrary and Capricious Challenge Failed
The environmental petitioners’ second line of attack was grounded in the Administrative Procedure Act’s arbitrary-and-capricious standard. They argued that the EPA’s choice of a case-by-case framework was irrational because the agency itself had identified PBTs as substances that present especially serious risks. Logic, they suggested, should have led the EPA to a categorical ban.
The Ninth Circuit disagreed. The court held that the EPA reasonably considered both a categorical ban and a case-by-case approach. The agency was not required to choose the most stringent option merely because PBTs are high-risk substances. It could lawfully conclude that a categorical ban would be overbroad and that a carefully structured case-by-case framework would better serve the goals of TSCA while still protecting public health and the environment.
The court’s reasoning reflects the reality of administrative decision-making. Agencies are entitled to balance competing considerations, and they do not act arbitrarily simply because they reject an absolute prohibition. The EPA’s judgment that some PBT uses may be contained tightly enough to avoid unreasonable risk was supported by the logic of the exemption statute itself, which assumes that exemptions are appropriate in at least some situations. The decision confirms that an agency’s policy choice will be upheld if it is reasonable, reasoned, and anchored in the statutory scheme.
Why the UAW’s Consent-Order Comment Argument Gained No Ground
The UAW’s challenge was narrower but still significant for administrative law. The union said the EPA failed to respond to a comment about TSCA Section 2604(e) consent orders during the rulemaking that produced the 2024 framework rule. Under the Administrative Procedure Act, agencies must respond to significant public comments that raise points within the scope of the proposed rule. But they are not required to engage with every comment, especially when the comment addresses a topic that is not actually presented by the rule under consideration.
The Ninth Circuit found that the consent-order comment did not address an issue presented in the proposed rule. Because the exemption framework and the consent-order process serve different functions under TSCA, the EPA was not obligated to provide a substantive response to the comment. The court therefore rejected the UAW’s challenge.
This part of the decision is a useful reminder for parties that participate in TSCA rulemakings. To trigger a response obligation, a comment must connect itself to the rule as proposed. A comment that raises a general concern about another part of the statutory framework, without showing how the proposed rule creates a conflict, may not be enough.
An Unpublished Decision With Practical Value
The Ninth Circuit issued the ruling as an unpublished memorandum disposition. Under Ninth Circuit Rule 36-3, an unpublished memorandum disposition is not precedent and cannot be used to bind future panels in the circuit. That means the decision will not create a formal legal rule that courts must follow in later cases. It is not a new cornerstone of TSCA jurisprudence in the same way that a precedential opinion would be.
Even so, the decision has practical value. It provides useful insight into how at least one appellate panel views the EPA’s authority under TSCA’s exemption provisions. That is especially valuable in the current legal environment, where TSCA litigation is still adapting to Loper Bright. Companies and trade groups that face compliance decisions under the 2024 rule can take some comfort from the fact that a panel of judges was unwilling to restrict the EPA’s ability to administer exemption requests for PBTs.
The decision also sends a moderate signal to future litigants. It shows that a challenge to the EPA’s PBT exemption framework faces a serious uphill climb, at least when the statutory language grants discretion and the agency has provided a rational explanation for its choices. While the unpublished nature of the decision limits its precedential weight, it may still influence the posture of future discussions between regulated parties and the EPA.
What the Ruling Means for Companies Seeking PBT Exemptions
The immediate consequence of the Ninth Circuit’s decision is straightforward: the EPA will continue reviewing PBT exemption requests on a case-by-case basis. For companies that manufacture new chemical substances that meet the PBT criteria, the exemption pathway remains available, but it is not a gentle alternative to full PMN review.
Several practical lessons follow from the court’s decision and from the EPA’s own approach in the 2024 rule:
- Expect most PBT exemption applications to be denied. The EPA has made clear that PBTS will receive rigorous scrutiny, and the case-by-case framework is designed to protect against financial and environmental risks rather than to greenlight marginal uses.
- Applicants should be prepared to demonstrate that their proposed uses minimize or eliminate meaningful exposure pathways. A successful exemption request will likely require detailed information about industrial controls, closed-system design, waste handling, downstream use, and disposal fate.
- The exemption pathway may provide a more efficient regulatory pathway than full PMN review in appropriate circumstances. For a well-defined use with genuinely contained exposure, an exemption can save time and resources. But that advantage depends on the quality and completeness of the applicant’s data package.
- Companies should monitor EPA’s evolving track record on granting or denying exemptions. The 2024 rule has created a body of agency decisions that will indicate where the EPA draws the line between acceptable and unacceptable uses. That track record will be more useful in practice than the court decision itself.
It may help to think in concrete terms. A sealed closed-loop semiconductor process, for example, may be viable under the case-by-case framework because the PBT is never intended to reach the environment and the applicant can document strong controls. A consumer-facing furniture application, by contrast, would likely not be viable because the EPA would probably conclude that the proposed use presents potentially unreasonable exposures. Those two examples illustrate the range of outcomes that the case-by-case framework is designed to produce.
How Companies Should Adjust Their TSCA Compliance Strategies
For regulated parties, the biggest strategic question is not whether the Ninth Circuit’s decision is precedential. It is how to build an exemption strategy that can survive the EPA’s scrutiny. The decision leaves the EPA’s framework in place, but it does not guarantee any particular outcome in an individual exemption request. Companies still need to carry the burden of showing safety.
An effective exemption strategy should begin with a clear characterization of the proposed use. That includes not only the amount of the PBT to be manufactured but also the full lifecycle of the substance. The EPA will want to know how the chemical will be handled, where releases might occur, who could be exposed, and what protective measures are in place. PBTs demand special attention to environmental fate and persistence. Even a small release can be problematic if the chemical accumulates.
Applicants should also consider whether the EPA’s existing decisions on similar PBTs point toward approval or denial. The agency’s evolving track record will create practical guidance. Companies that can show their proposed use closely resembles a prior exemption that the EPA granted will be in a stronger position. Companies that propose uses resembling the consumer-facing examples the EPA has treated cautiously should expect to prepare for a more demanding review.
What the Decision Signals for the Post-Loper Bright Landscape
The Ninth Circuit’s opinion is not a landmark decision, but it is consistent with the emerging shape of post-Loper Bright administrative law. Courts will no longer grant reflexive deference to agency interpretations. They will read statutes independently and determine whether Congress has actually given an agency discretion. When Congress has done so, the agency can still exercise that discretion without needing a Chevron safety net.
For TSCA in particular, the decision is a useful data point. The statute is full of provisions that give the EPA significant room to make scientific and policy judgments. The Loper Bright framework does not automatically invalidate those provisions. It simply requires the agency to ground its decisions in the text of the law and in a record that demonstrates reasoned decision-making. The EPA did that in the 2024 framework rule, and the court saw no reason to second-guess the agency’s choice.
The PBT exemption rule will remain in place for the foreseeable future. Companies developing or manufacturing PBT substances should build their compliance strategies around robust exposure-control documentation, monitor the EPA’s evolving approach in individual exemption determinations, and consider whether the exemption pathway offers meaningful timing advantages over the full PMN process. The Ninth Circuit has made clear that the agency’s framework is lawful, but the practical success of any exemption application will ultimately be determined by the quality of the evidence the applicant brings to the table.
