In Landmark TSCA Decision, Fifth Circuit Vacates EPA’s Methylene Chloride Rule, Limits EPA’s Interpretation of “Unreasonable Risk”

On September 15, 2026, a unanimous panel of the U.S. Court of Appeals for the Fifth Circuit vacated the EPA’s 2024 risk management rule for methylene chloride and the unreasonable-risk determination underlying it. East Fork Enterprises, Inc. v. EPA, Nos. 24-60227 & 24-60256 (5th Cir. Sept. 15, 2026). The Court granted the industry petitioners’ petition for review, denied Sierra Club’s separate challenge seeking more stringent regulation, and remanded the matter to the EPA.

The decision has significance well beyond methylene chloride. In a 44-page opinion by Judge Edith Jones, joined by Judges Patrick Higginbotham and Leslie Southwick, the Court addressed several foundational questions concerning the EPA’s implementation of Section 6 of the Toxic Substances Control Act (TSCA), including how the EPA must determine whether a chemical presents an “unreasonable risk,” whether the agency may make that determination for a chemical as a whole rather than for particular conditions of use, how the EPA must account for personal protective equipment (PPE), and what constraints apply when the EPA selects measures to eliminate an unreasonable risk.

The EPA’s 2024 rule prohibited 40 of the 53 evaluated conditions of use for methylene chloride and subjected 13 continuing industrial and commercial uses to a Workplace Chemical Protection Program that included exposure limits, monitoring requirements, and respiratory and dermal protections. The rule rested on the EPA’s 2022 revised risk determination, in which the agency departed from its earlier condition-of-use-specific determinations and concluded that methylene chloride presented an unreasonable risk as a “whole chemical.” The EPA also ceased assuming that workers exposed to methylene chloride would use PPE when determining whether uses presented unreasonable risk.

The Court Rejects the EPA’s “Whole Chemical” Approach

The Fifth Circuit first held that the EPA lacked authority to make the “whole chemical” determination on which the rule was based. In the Court’s view, the TSCA requires the EPA to evaluate unreasonable risk in relation to the chemical’s particular “conditions of use.” The Court concluded that “TSCA required EPA to issue a separate risk determination for each condition of use that it considered,” and that the EPA therefore “lacked authority to issue a novel ‘whole-chemical’ revised risk determination” in 2022.

That holding could be important for the EPA’s broader Section 6 program. Under the approach the EPA adopted beginning in 2021, a whole-chemical unreasonable-risk determination could subject uses to risk management even where the agency’s underlying scientific analysis did not independently find unreasonable risk from that particular use. The Fifth Circuit rejected that approach and held that activities involving a chemical may present different levels of risk and must be evaluated accordingly.

Notably, the EPA informed the Court shortly before oral argument that it no longer defended its whole-chemical interpretation or its approach to PPE. The Fifth Circuit nevertheless decided the issues because they had been fully briefed and remained relevant to the challenged risk determination and rule.

“Unreasonable Risk” Is Not a Precautionary Standard

Perhaps the decision’s most consequential discussion concerns the meaning of “unreasonable risk” itself. The Court concluded that the EPA’s approach was “far more conservative than the statutory term connotes.” Relying in part on its 1991 decision in Corrosion Proof Fittings v. EPA, the panel emphasized that Congress “did not enact TSCA as a zero-risk statute.”

The panel went further, stating that “‘[u]nreasonable risk’ does not incorporate any precautionary principle.” In the Court’s view, Congress knows how to enact precautionary standards — such as statutory requirements for an “adequate margin of safety” — and did not do so in the TSCA. The statutory term “unreasonable,” the Court explained, necessarily permits some degree of risk; the legal question is how much risk crosses the line into “unreasonable” risk.

The Court also rejected the EPA’s contention that identifying unreasonable risk was principally a technical determination committed to agency experience. It characterized “unreasonable risk” as a legal standard informed by scientific findings, rather than simply the output of the EPA’s risk-assessment methodology. Citing Loper Bright Enterprises v. Raimondo, the panel emphasized the judiciary’s role in independently determining the meaning of that statutory standard.

The opinion then subjected the EPA’s underlying scientific analysis to substantial-evidence review and found significant deficiencies. Among other things, the Court criticized the EPA’s selection and treatment of human and animal studies, its application of uncertainty factors, its treatment of PPE, and the exposure limits that resulted. In summarizing its analysis, the Court stated that “[a]t every juncture of its scientific analysis, EPA has gone with the most extreme position.”

Risk Management Must Be Limited to What Is “Necessary”

The Court separately addressed what the EPA may do after identifying an unreasonable risk. Section 6(a) directs the EPA to regulate a chemical “to the extent necessary” so that it no longer presents that risk. Although costs and other nonrisk considerations do not enter into the initial unreasonable-risk determination, the Court emphasized that the TSCA expressly requires the EPA, when selecting risk-management measures, to consider the chemical’s benefits, the reasonably ascertainable economic consequences of regulation, and, where uses will be prohibited or substantially restricted, the availability of technically and economically feasible substitutes.

The Court concluded that the EPA had not satisfied those requirements. In particular, it rejected the EPA’s reliance on uncertainty about whether businesses could comply with stringent exposure limits as a justification for prohibiting uses. The EPA, the Court held, “cannot simply ban a chemical substance whenever it is ‘uncertain’ whether a risk will remain reasonable”; it may regulate only to eliminate “actual, identified ‘unreasonable risk.’” The Court also found the EPA’s consideration of economic consequences and available substitutes inadequate.

That portion of the opinion may be at least as important as its treatment of the EPA’s risk evaluation. It indicates that even where the EPA can establish an unreasonable risk, Section 6 does not automatically permit the agency to select the most protective regulatory option. The agency must separately justify the scope of the remedy under the statutory “to the extent necessary” standard and the factors Congress directed it to consider.

The EPA Must Account for PPE Where the Evidence Shows It Is Used

The Court also rejected the EPA’s decision to determine workplace risks on the assumption that workers do not use PPE. According to the Court, the TSCA requires the EPA to account for PPE as a “condition of use” where the evidence reflects that PPE is actually used. The Court emphasized that risk evaluation must account for real-world circumstances and “reasonably available information,” including applicable workplace-protection requirements and evidence of industry practices.

The Court did not hold that the EPA must invariably assume perfect PPE use. Rather, its reasoning focuses on the evidentiary record: the EPA may not disregard demonstrated or reasonably foreseeable worker protections based on speculation that some employers or workers might fail to comply. Here, the Court concluded that the EPA’s change in approach was contrary to law, arbitrary and capricious, and unsupported by the TSCA’s substantial-evidence standard.

What the Decision Means for Regulated Companies

The Court vacated both the methylene chloride rule and its associated risk determination. Regulated entities should nevertheless watch the next procedural steps, including issuance of the Court’s mandate and any petition by Sierra Club or another party for rehearing, rehearing en banc, or Supreme Court review, and the EPA’s response on remand, before changing compliance plans. Companies that have already reformulated products, qualified substitutes, or implemented workplace controls should also consider requirements and commitments independent of the vacated TSCA rule, including OSHA and state requirements, contracts, and existing environmental, health, and safety programs.

The decision’s effect on the EPA’s broader Section 6 program is more complicated. Vacatur removes the methylene chloride rule and risk determination at issue in this case, but the Fifth Circuit’s statutory interpretations are binding precedent only within that circuit. Other courts reviewing the EPA’s rules for other chemicals may adopt, distinguish, or disagree with the Fifth Circuit’s reasoning. The decision therefore creates substantial litigation risk for the EPA’s post-2016 approach without, by itself, establishing a nationally binding interpretation of the TSCA for every future rule.

At this stage, the decision does not appear to create a square circuit split on the principal holdings discussed above. The Fifth Circuit addressed the Ninth Circuit’s 2019 decision in Safer Chemicals, Healthy Families v. EPA, which held in a challenge to the EPA’s procedural rule that the EPA could not exclude conditions of use from a risk evaluation. The Fifth Circuit called that decision “inapposite” to Sierra Club’s separate fenceline-community argument because it involved the procedural rule rather than a particular risk evaluation, and expressly left for another day whether it agreed with the Ninth Circuit’s statutory reading. The opinion thus signals potential disagreement without squarely creating a conflict on that issue.

The decision also could affect petitions under TSCA Section 21, which allows any person to petition the EPA to initiate a proceeding for a Section 6 rule and, following the EPA’s denial of a petition, to seek de novo review in federal district court. Because East Fork addresses the meaning of “unreasonable risk,” conditions of use, and the evidence relevant to that determination, its reasoning may affect both how Section 21 petitions seeking Section 6 action are framed and how courts assess the EPA’s denial of those petitions.

For companies affected by other Section 6 rules, the practical question will be how the EPA responds on remand and whether other courts follow the Fifth Circuit on condition-of-use-specific determinations, the meaning of “unreasonable risk,” PPE, the substantial-evidence standard, and Section 6(a)’s “to the extent necessary” limitation.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.