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Wednesday, August 5, 2009

Determination that fabric finishing MACT applies upheld.(Legal Issues).

COPYRIGHT 2008 Aspen Publishers, Inc.
In an August 8, 2008 decision, the U.S. Court of Appeals for the Third Circuit upheld EPA's applicability determination regarding the maximum achievable control technology (MACT) standard for fabric finishing operations (TSGIncorporated u U.S. EPA, Number 071116 [3rd Cit. Aug. 8. 2008]). Although TSG, Inc. argued on appeal that it should be considered a fabric coating operation under 40 CFR Part 63, Subpart OOOO, the federal appeals court disagreed, and upheld EPA's determination that the company was a fabric finishing operation under the regulations.

Additional References

The following articles from the Air Pollution Consultant maybe helpful when reviewing the August 8, 2008 decision:

* "MACT Proposed for Textile Finishing Industry" (67FR46028; July 11, 2002), Volume 12, Issue 7, page 2.44;

* "Fabric and Textile Finishing Industry Subject to New MACT Standards" (68 FR 32172; May 29, 2003), Volume 13, Issue 5, page 2.56; and

* "Applicability of Fabric and Textile Finishing MACT Clarified" (69 FR 47001), Volume 14, Issue 6, page 2.37.

Background

TSG, Inc. has facilities in Pennsylvania and North Carolina, and is a "commission fabric coater." The company treats fabrics that it receives from other entities (i.e., jobbers, importers, interior decorators) to meet customer specifications and requirements, such as to enhance "water repellency, stain resistance, and fire repellency." Unlike large, vertically integrated mills that apply "aqueous-based stain repellant coating," TSG uses a solvent-based process.

TSG sprays stain-repellant chemicals that are diluted in trichloroethene (TCE) onto fabric as it passes through a machine. The solvent is usually gentler on a wide variety of fabrics than a water-based treatment process, allowing the company to treat different fabric widths, weights, colors, and constructions. The TCE solvent acts as a "carrier" for the stainrepellant chemicals, and evaporates from the fabric once the fabric is heated and dried. The TCE is recovered for reuse through a solvent-recovery system.

Textile Finishing MACT

On May 29, 2003 (68 FR 32172), EPA issued final MACT standards for the fabric and other textile finishing industry. The fabric and other textile finishing industry includes facilities that apply hazardous air pollutant (HAP) -containing materials, such as dyes, inks, deodorants, and other treatments, to fabrics and textiles for decorative or functional purposes. The Subpart OOOO MACT standards regulate new and existing sources that coat, print, slash, dye, or finish fabrics or other textiles. When the standards were issued, EPA expected that 135 facilities would be affected, and that HAP emissions from the industry would be reduced by about 4,100 tons per year (tpy).

The projected reduction in nationwide HAP emissions represents a 60% decrease from reported baseline emissions for the textile finishing industry, and includes reductions in toluene, methyl ethyl ketone (MEK), xylenes, methyl isobutyl ketone (MIBK), TCE, and other HAP emissions. The product suite affected by the Subpart OOOO MACT standards is very broad, and includes fabrics, as well as tents, sheets, outerwear, towels, yarn, fiber, cord, thread, soft baggage, marine fabric, drapery linings, flexible hoses, hot air balloons, and awnings.

Subpart OOOO organizes and regulates textile processing in three subcategories: 1) web coating and printing, 2) slashing, and 3) dyeing and finishing. The web coating and printing subcategory includes coating activities and equipment used to apply semi-liquid coating material to one or both sides of a textile web substrate. Once the coating is dried, it bonds with the substrate to form a continuous solid film. Pastes are also applied in web coating processes, and are subsequently treated with steam, heat, or chemicals to fix color or prints to a substrate.

Subpart OOOO Applicability

Subpart OOOO applies to fabric or other textile coating, printing, slashing, dyeing, or finishing operations that are, or are located at, major sources of HAPs. Major sources are those facilities with the potential to emit [greater than or equal to] 10 tpy of any single HAP, or [greater than or equal to] 25 tpy of any combination of HAPs. The coating, printing, slashing, dyeing, or finishing operations themselves are not required to be major sources of HAP emissions in order for them to be covered under the MACT standards.

Under Subpart OOOO, the definition of affected source is organized by subcategory. In Subpart OOOO (at [section]63.4371), coating is defined as:

"... [T]he application of a semi-liquid coating material to one or both sides of a textile web substrate. Once the coating material is dried (and cured, if necessary), it bonds with the textile to form a continuous solid film for decorative, protective, or functional purposes. Coating does not include finishing where the fiber is impregnated with a chemical or resin to impart certain properties, but a solid film is not formed."

Finishing is defined as:

"... [T] he chemical treatment of a textile (e.g., with resins, softeners, stain resist or soil release agents, water repellants, flame retardants, antistatic agents, or hand builders) that improves the appearance and/or usefulness of the textile substrate."

Subpart OOOO provides for a variety of exemptions and exclusions. Excluded sources include those that coat, print, slash, dye, or finish, and do not use materials that contain organic HAPs. The Subpart OOOO compliance date for existing sources was May 29, 2006 (three years after promulgation of the final rule).

TSG's Claim

During the notice and comment period on the proposed rulemaking for Subpart OOOO, TSG asked the agency to develop "... an alternative MACT standard for its textile operations." TSG claimed that the proposed finishing operation requirements would likely result in the company ceasing operation. While acknowledging that its process appeared to be a "finishing operation" under the regulations, TSG claimed that, because the company used a chemical solvent, instead of a water-based solution, it should not have to comply with finishing operation emission standards. Although EPA requested additional information in order to make a determination, the company did not respond until June 2006.

EPA issued an applicability determination on November 8, 2006 that concluded that TSG's operations were "finishing operations" under Subpart OOOO. The agency concluded that TSG impregnated the textile fibers with a stain repellant without forming a solid film, making the TSG process a "finishing," rather than a "coating," operation. The agency also found that the chemical solvent was itself a "finishing material," and not merely a "carrier" of materials. In the determination, the agency noted that TSG could petition EPA to develop a different standard.

TSG subsequently petitioned the Third Circuit Court to review of the agency's applicability determination.

The Court's Review

In the case, the Third Circuit Court determined that it had jurisdiction to consider the petition because EPA's action was the consummation of the decision-making process when the agency determined that TSG's process was a finishing, rather than a coating, operation, which meant that the company had to abide by the HAP control standard in Subpart OOOO. The federal appeals court noted that it could review an agency's interpretation of its own regulations for plain error. However, unless the agency's interpretation is "plainly erroneous or inconsistent with the regulation," the court must defer to the agency.

Finishing Operation and Finishing Material

TSG argued that its operation was not a finishing operation, and that TCE was not a finishing material under the regulations. The court noted that the plain language of the definition of "finishing" in Subpart OOOO did not allow the court to conclude that the agency had clearly erred in determining that TSG's operations could be considered "finishing." However, the company argued that TCE was not a "finishing material" under the regulations. Finishing materials are defined in Subpart OOOO as "... the purchased substances (including auxiliaries added to the finish to improve the finishing process or the characteristics of the finished textile) that are applied individually or as mixtures to textile substrates to impart desired properties."

While TSG claimed the TCE was a carrier, and was not "applied" to the fabric because it subsequently evaporates, the appeals court disagreed. The court deferred to EPA's determination that "[t]he solvent that TSG uses to dilute stain repellent finishes is a transfer agent that is added to the finish as an auxiliary to improve the finishing process, and therefore, is a finishing material." In the August 8, 2008 decision, the court noted that dictionary definitions of the word "apply" do not include a requirement that "... a substance must adhere permanently to the substance to which it has been applied."

The Third Circuit Court noted that the regulations define "finishing materials" to include auxiliaries, as long as they are "... added to the finish to improve the finishing process." In its letter to EPA, TSG had stated that the solvent mixtures it uses "... are used to improve the efficiency of the application process." The court concluded that the company had acknowledged that the TCE was used as a "carrier" to improve the process; therefore, the agency had not clearly erred in finding that the TCE met the criteria to be considered as an auxiliary. The court then concluded that the TCE was, by definition, a "finishing material."

Finishing vs. Coating Operation

TSG also argued that its operation should have been classified as a "coating operation," rather than as a "finishing operation." EPA had determined, based on information provided by the Pennsylvania Department of Environmental Protection (PDEP) and the company, that "... the TSG process impregnates textile fibers with a stain repellent to impart stain repellent properties, and does not result in the formation of a solid film." While the company argued that its process does result in a continuous solid film, the court found that the company had not supported this assertion. The court also noted that TSG referred to itself in correspondence with EPA as a "finishing operation," further undermining its argument that it operates as a "coating operation." Therefore, the court determined that EPA had not clearly erred when the agency determined that TSG's process was not a coating operation, but was instead a finishing operation.

Solvent-Based Process

In the case, TSG argued that its solvent-based process was not a finishing operation because EPA defined finishing operations as aqueous-based processes. In the summary of public comments issued as part of the final rulemaking for Subpart OOOO, EPA stated that "[s]lashing and dyeing and finishing operations are aqueous processes, and therefore, the cleaning materials and preparation activities used in these operations do not contain HAP" The company claimed that this and other agency statements showed that EPA had based the control standard for "finishing" and "coating" "operations on the assumption that finishing operations were generally aqueous-based, and that coating operations were generally solvent-based. The company speculated that EPA did not account for solvent-based finishing operations like TSG's. In the applicability determination, EPA acknowledged that TSG used a solvent-based system. However, the agency still found TSG to be a "finishing operation" under Subpart OOOO.

In its August 8, 2008 decision, the Third Circuit Court determined that TSG's arguments were "without merit," as the plain language of the regulations, as promulgated, did not mention aqueous- or solvent-based processes in the definitions of either "finishing" or "coating." The court found that the agency's interpretation of its own regulation was neither "plainly erroneous nor inconsistent with the regulation." The court stated that the application of the regulations, like the application of statutes, must be based on the actual language of the rule, and not what was, or might have been, intended.

The court noted that TSG could have submitted a comment to the agency during the notice and comment period asking for a recognition of the difference between solvent-based and aqueous-based operations in the regulations. EPA noted that TSG could still petition the agency's Office of Air Quality Planning and Standards with a request that different standards be developed for solvent-based processes.

Insufficient Information

TSG also argued that EPA possessed insufficient information to conclude that its process was a finishing operation. However, the court noted that EPA had declined to reach a decision when there was insufficient information available, and had requested more information from the company. When that information did not come from the company in a timely manner, the agency obtained information about TSG's process from the PDEP and reached an applicability determination based on that. Therefore, the court found that EPA did have sufficient information to make its determination.

Conclusion

In the August 8, 2008 decision, the Third Circuit Court determined that EPA did not clearly err when it determined that TSG's process was a finishing operation under Subpart OOOO. The court concluded that the agency's determination was consistent with the regulations. Therefore, the federal appeals court denied TSG's petition for review, and affirmed the agency's applicability decision.

Source Citation:"Determination that fabric finishing MACT applies upheld.(Legal Issues)." Air Pollution Consultant 18.6 (June 2008): 3.6(3). Academic OneFile. Gale. BROWARD COUNTY LIBRARY. 5 Aug. 2009
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Gale Document Number:A192352855




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