ELR Citation: ELR 20037
No(s). 89-4596 (5th Cir. Oct 18, 1991)

The court vacates the U.S. Environmental Protection Agency's (EPA's) 1989 final rule prohibiting the manufacture and sale of asbestos products, which represented the first time the Agency used it authority under §6 of the Toxic Substances Control Act (TSCA) to ban a dangerous substance. Applying TSCA's substantial evidence standard for reviewing agency findings, the court holds that EPA presented insufficient evidence to justify the asbestos ban. EPA promulgated a staged ban of most commercial uses of asbestos, based on a finding that asbestos constitutes an unreasonable risk to health and the environment and that the rule will save either 202 or 148 lives at a cost of approximately $450-800 million. The court initially holds that amici curiae briefs are properly before the court, except portions of two amici briefs that improperly raise arguments not mentioned by any petitioner. The court next holds that a Canadian mining company and mineworkers do not have standing to contest the rule. Foreign workers only incidentally affected by the regulation and a foreign vender allegedly affected by the loss of economic sales in the United States do not fall within the zone of interests TSCA protects. In support of its conclusion that TSCA's scope is national, the court also finds that EPA's decision to ignore the international effects of its decision was rational.

Addressing EPA rulemaking defects, the court first holds that EPA's denial of cross-examination of all its major witnesses, while not the proper way to conduct the informal hearing process, is not sufficient by itself to mandate overturning the rule. The court next holds, however, that EPA's failure to provide public notice of its use of analogous exposure estimates before closing the hearing record deprived the rule of the substantial evidence it needed to survive judicial scrutiny. The court observes in a footnote that EPA used the analogous exposure estimates, adopted after the hearings concluded, as substantial support, since they purportedly increased the benefits of the rule by more than one-third. The court thus holds that on recommendation, EPA should open the validity of its analogous exposure estimates to public comment.

Turning to the merits, the court first holds that the TSCA substantial evidence standard is more rigorous than the arbitrary and capricious standard normally applied to informal rulemaking. The court concludes that in undertaking its review of whether EPA has presented substantial evidence, it must compare the quantities of the regulated chemical entering the environment with the degree of human exposure to the chemical. Further, EPA bears a heavier burden for a total ban of a substance than for merely regulating a product, since TSCA instructs EPA to undertake the least burdensome regulation necessary to regulate a chemical risk. The court then holds that EPA failed to meet its burden of reducing risk in the congressionally mandated least burdensome way. Congress rejected a zero-risk policy, and instead provided EPA with a list of regulatory alternatives that range from labeling the least toxic chemicals and limiting the total amount of chemicals an industry may use, to total bans. The court holds that EPA's consideration of five ban options, which differed only with respect to their effective dates, and in cursory exploration of less burdensome alternatives to a total ban, do not satisfy the substantial evidence standard. Next, the court notes that EPA's reliance on unqualified benefits and population exposure in its costs and benefits methodology is unreasonable. Specifically, EPA failed to compute the costs and benefits of its proposed rule past the year 2000, categorized additional lives saved an unquantified benefits, and used high population exposure more than once to justify its actions. Further, EPA attempts to justify its ban by stating that the ban itself will cause the development of low-cost, adequate substitute products. The court concludes that EPA errs in asserting that if no substitutes materialize, companies will be able to continue using asbestos under a waiver provision that allows the Agency to extend a phaseout on a banned product. A party seeking a waiver bears a high burden, since EPA may grant the wavier only in very limited circumstances. Although a product ban can lead to great innovation, the court holds that EPA's failure to consider substitutes, including known carcinogenic substitutes, when formulating its guidelines deprives its rule of a reasonable basis. EPA cannot make the cost-benefit calculation TSCA requires or say with assurance that its regulation will improve workplace safety if it fails to consider the effects that substitutes will pose. In remanding the rule for evaluation of the toxicity of likely substitutes for asbestos, the court notes that EPA must make a formal finding on the record that its proposed action is reasonable and warranted under TSCA.

Next, the court holds that EPA improperly ignored the cost side of the balancing equation outlined in TSCA's requirement that EPA take steps to prevent unreasonable risks. The court concludes that EPA's willingness to argue that spending M.C.L.A. 23.7 million to save less than one-third of a life reveals that its economic analysis under TSCA was meaningless. Further, EPA's conclusion that it is reasonable to require a $200-$300 million expenditure to save approximately seven lives over 13 years violates Congress' intent in enacting TSCA. By comparison, the court notes that in the upcoming 13 years, about a dozen deaths will occur from ingested toothpicks—more than twice what EPA predicted would be prevented by the quarter billion dollar bans on asbestos pipe, shingles, and roof coatings. The court then turns specifically to each substance or application of a substance banned in the rule and holds that EPA's findings do not satisfy the substantial evidence standard, lack a reasonable basis, or fail to examine less burdensome alternatives to a complete ban. The court upholds EPA's decision to ban products that are no longer produced in or imported into the United States and its authority to promulgate a cleanup ban precluding future uses of asbestos, even in products not yet on the market.

Counsel for Petitioners
Robert E. Holden
Liskow & Lewis
1 Shell Sq., 50th Fl., New Orleans LA 70139
(504) 581-7979

Counsel for Respondents
Mary Elizabeth Ward
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before BROWN, SMITH, and WIENER, Circuit Judges.