No. 09-1318 (consolidated with No. 09-1335)

United States Court of Appeals for the D.C. Circuit

ARKEMA INC.,

Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

On Petitions for Review from the United States

Environmental Protection Agency

PETITIONERS’ JOINT RESPONSE TO RESPONDENT’S PETITION

FOR REHEARING EN BANC

David M. Williamson

Gia V. Cribbs

ANDREWS KURTH LLP

1350 I Street, N.W., Suite 1100

Washington, DC 20005

(202) 662-2700

Of Counsel:

Carlos R. Escobar

SOLVAY NORTH AMERICA, LLC

3333 Richmond Avenue

Houston, TX 77098

Counsel for Solvay Fluorides, LLC

and Solvay Solexis, Inc.

Dan Himmelfarb

John S. Hahn

Roger W. Patrick

Stephen E. Sachs

MAYER BROWN LLP

1999 K Street, N.W.

Washington, DC 20006

(202) 263-3000

Of Counsel:

William J. Hamel

ARKEMA INC.

2000 Market Street

Philadelphia, PA 19103

Counsel for Arkema Inc.
Pursuant to this Court’s Order of November 29, 2010, Petitioners Arkema

Inc. (“Arkema”), Solvay Fluorides, LLC, and Solvay Solexis, Inc. (collectively,

“Solvay”), hereby respond to and oppose the petition for rehearing en banc of

Respondent U.S. Environmental Protection Agency (“EPA” or “Agency”).

INTRODUCTION

In Spring 2008, EPA approved Petitioners’ applications to transfer their

allowances to produce and consume hydrochlorofluorocarbons (“HCFCs”) from

one chemical to another. In December 2009, based on a new interpretation of an

ambiguous statute, EPA announced that those past transfers were, and always had

been, invalid. The panel found that about-face to be impermissibly retroactive.

EPA seeks rehearing on the grounds that the panel’s decision (1) conflicts

with this Court’s prior decisions and (2) raises questions of exceptional

importance. Cf. Fed. R. App. P. 35(a). The Agency is mistaken on both points.

First, the panel relied on precisely the same retroactivity principles as the

prior cases with which its decision supposedly conflicts (such as DirecTV, Inc. v.

FCC, 110 F.3d 816 (D.C. Cir. 1997)). EPA argues that the panel erred in applying

those principles to a different regulatory regime and different circumstances. That

fact-bound argument does not merit en banc rehearing; in any case, it is incorrect.

Second, EPA’s claim of exceptional importance is belied by its own

submissions. The Agency obtained an extension of time for filing its petition so

that it could “conduct[] a time-consuming process of surveying other government
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programs to assess the full potential breadth of the Court’s decision.” EPA’s Mot.

for a 30-Day Extension 3. Having completed that process, the Agency is unable to

identify a single other program affected by the decision. That tacit concession, by

itself, would be sufficient reason to deny the petition.

EPA does argue that this program has been adversely affected, because

Arkema’s and Solvay’s competitors (which were allocated extra HCFC allowances

in Petitioners’ place) are now claiming that their allowances cannot be reduced.

But en banc review cannot be warranted just because the companies that benefited

from EPA’s error want to protect their windfall. In any event, those claims—like

much of EPA’s petition for rehearing—are based on an aggressive and implausible

overreading of the panel’s opinion. The panel did not grant Petitioners the right to

consume a certain amount of HCFCs for all time. It concluded only that EPA,

having chosen to continue in force the existing HCFC allowance system, could not

retroactively undo transfers the Agency previously had approved.

EPA offers no other reason to find exceptional importance here. There is no

circuit conflict (see Fed. R. App. 35(b)(1)(B))—nor could there be, as this Court

has exclusive jurisdiction over national emission rules under the Clean Air Act (see

42 U.S.C § 7607(b)(1)). There is also no public interest at stake, as the panel’s

decision leaves the total amount of ozone-depleting substances unchanged (and

under EPA’s control); redistributing the allowances has no environmental impact.

The panel decision affects, on a one-time basis, only the relative market shares of
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companies within a regulated industry. That kind of intramural dispute raises no

issue of exceptional importance, and the petition should be rejected.

STATEMENT

A. Statutory and Regulatory Framework

The Clean Air Act (“Act”) creates a cap-and-trade program to limit total

U.S. output of HCFCs. 42 U.S.C. §§ 7671c(d), 7671f. Under the Act, EPA must

issue allowances for HCFC production and consumption, and it must recognize

transfers of allowances between different companies or pollutants. § 7671f(a)-(c).

EPA issued implementing regulations in 2003. Protection of Stratospheric

Ozone: Allowance System for Controlling HCFC Production, Import and Export,

68 Fed. Reg. 2820 (Jan. 21, 2003) (“2003 Rule”). To avoid “uncertainty in the

industry,” the 2003 Rule assigned various companies “baseline” allowances “on a

one-time basis” representing their shares of the then-existing market. Id. at 2823-

24; see also 40 C.F.R. §§ 82.17, .19. To determine a company’s allowance for a

specific calendar year, EPA would multiply that company’s baseline allowance by

a fixed percentage stated in the Rule. § 82.16. Thus, EPA could reduce the total

output of HCFCs—and each company’s allocation pro rata—simply by decreasing

the percentages over time. EPA explained that each company’s allocation would

“remain the same from * * * one calendar year to the next,” unless “the percentage

of baseline allowances [were] reduced to ensure compliance with the [Montreal]
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Protocol cap,” or the baselines themselves were changed “through permanent

transfers of allowances.” 68 Fed. Reg. at 2823.

EPA permitted transfers of allowances between companies and between

HCFCs. § 82.23(a)-(c). (Because these transfers cannot increase total ozone

depletion, the relative distribution of allowances among companies has no

environmental consequence.) A company could transfer an allowance for a

specific calendar year, or a portion of its baseline allowance (e.g., the right to

produce 1 kg of HCFC-22 per year, as diminished by the percentages in § 82.16).

See § 82.23(d). While a company could not trade calendar-year allowances from

one year to another, EPA allowed “trades of annual and permanent allowances

between HCFCs and between companies” (Ex. 1, at 1 (emphasis added)), so as to

achieve “maximum flexibility” in the marketplace (68 Fed. Reg. at 2833). What

distinguished these baseline trades from calendar-year trades was “[t]he permanent

nature of the [baseline] transfer.” Id. at 2835 (emphasis added).

B. Petitioners’ Baseline Transfers

Petitioners hold substantial baseline allowances to produce and consume

HCFC-22 and HCFC-142b. In April 2008, Arkema applied to convert baseline

production and consumption allowances from HCFC-142b to HCFC-22. JA 26.

EPA responded with “non objection notices” approving Arkema’s “baseline”

transfers. Exs. 2-3. In two subsequent letters, EPA explicitly confirmed that

Arkema’s baseline (not just calendar-year) allocations reflected the 2008 transfers.
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Exs. 4-5. Solvay, too, chose to convert HCFC-142b baseline allowances to HCFC22; EPA approved those transfers in February and March 2008. JA 3, 11; Exs. 6-7.

C. The Proposed Rule and the Final Rule

On December 23, 2008, EPA initiated a rulemaking to reduce HCFC output.

Rather than abandon the existing baseline system (and distribute allowances by

auction or other means), EPA preferred to “apportion company-specific baselines

* * * equivalent to those currently published * * *, adjusted as necessary to reflect

permanent transfers of baseline allowances.” Protection of Stratospheric Ozone:

Allowance System for Controlling HCFC Production, Import and Export, 73 Fed.

Reg. 78,680, 78,686 (Dec. 23, 2008) (“Proposed Rule”). The Agency then would

“grant[] a certain percent of [each] baseline as necessary to achieve compliance

with the cap.” Id. EPA noted that “[b]oth inter-pollutant and inter-company

transfers of allowances are possible, either on a calendar-year or permanent basis”

(id. at 78,701 (emphasis added)); it therefore listed current baseline figures

“reflect[ing] adjustments resulting from approved inter-pollutant and/or intercompany transfers of baseline allowances (i.e., permanent rather than calendar-year

allowances)” (id. at 78,693). The figures printed in the Federal Register reflected

Petitioners’ baseline transfers. Id. at 78,694.

Some of Petitioners’ competitors objected to the recognition of these

transfers. They raised a novel argument: that the Clean Air Act prohibited interpollutant baseline transfers. See Ex. 8. On December 15, 2009, EPA reversed its
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prior stance and adopted this new interpretation of the Act. Protection of

Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC

Production, Import, and Export, 74 Fed. Reg. 66,412, 66,421 (Dec. 15, 2009)

(“Final Rule”). Rather than acknowledge the change, EPA claimed that its past

statements were all “consistent with this interpretation.” Id. at 66,422.

Interpreting the Act to require “that all inter-pollutant transfers * * * be conducted

on a yearly—and thus temporary—basis,” the Agency applied that interpretation to

Petitioners’ prior baseline transfers, effectively recharacterizing them as calendaryear transfers. Id. It prescribed a baseline allowance allocation “reflect[ing] the

changes * * * from inter-company transfers” only (id.), with fewer HCFC-22

allowances allocated to Petitioners and more given to their competitors.

D. The Panel’s Decision

Petitioners sought review, and the panel vacated the Final Rule in part.

First, construing the 2003 Rule and EPA’s statements, the panel concluded

that the Agency had permitted inter-pollutant baseline transfers before disallowing

them in the Final Rule. The panel found that EPA repeatedly had confirmed that

Petitioners’ allowance transfers were “baseline” transfers, both in the nonobjection notices and in two letters to Arkema. Arkema Inc. v. EPA, 618 F.3d 1, 7-

8 (D.C. Cir. 2010). EPA’s counsel’s interpretation, that the letters concerned mere

proposals, was “not an accurate reading of the letters, which purported to represent

the EPA’s assessment of the current status of Arkema’s allowances.” Id. at 8.
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Moreover, the Proposed Rule had explicitly “include[d] the inter-pollutant

transfers” to describe the existing baseline-allowance system. Id. “[E]ven

affording the EPA the deference it is due,” the panel concluded that “Petitioners

have clearly demonstrated from the record that the EPA’s interpretation of [the

Act] did change between the 2003 Rule and the Final Rule.” Id. at 9.

Second, the panel found that the Final Rule was impermissibly retroactive

because it applied this changed interpretation to past transactions. The panel

agreed that, to be retroactive, a regulation must not merely “unsettle[] Petitioners’

expectations” (id. at 10), but must “attach[] new legal consequences to events

completed before its enactment” and “‘alter[] the past legal consequences of past

actions’” (id. at 7 (second alteration in original; quoting Mobile Relay Assocs. v.

FCC, 457 F.3d 1, 11 (D.C. Cir. 2006))). It also agreed with EPA’s new position

that the Act was ambiguous and that “‘Congress [had] left it to the broad discretion

of EPA to determine how transfers of baselines are to be treated.’” Id. (quoting

Resp’s Br. 48). But the panel held that the Agency, having used its discretion to

“approve[] permanent changes to the baselines,” could not then “use its new

statutory interpretation to undo these completed transactions.” Id. at 9. The

Agency’s various policy rationales for the change might “shield the Agency’s

prospective application of the Final rule from an arbitrary and capricious

challenge”; but EPA’s “fundamental justification” for recharacterizing past

transactions was its revised interpretation of the Clean Air Act. Id. While the
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Agency could decide “to adjust its distribution of allowances” in the future, that

ability to change course “did not give the EPA an opportunity to revisit the

baseline transactions it previously approved.” Id. at 10.

ARGUMENT

The panel’s decision has two parts. It concluded that EPA initially approved

Petitioners’ inter-pollutant baseline transfers and that EPA’s later decision to

disapprove those transfers was impermissibly retroactive. The government

challenges both conclusions. But both are correct, and neither warrants rehearing.

First, whether the panel correctly read the record to find that EPA changed

its interpretation of the Act is a fact-bound question that cannot affect any other

case. The panel properly extended deference to EPA, but, based on the totality of

the record, found the Agency’s theory too implausible to credit. There is no error

in that holding.

Second, whether the panel correctly found that this agency action was

impermissibly retroactive is equally fact-bound and unsuitable for rehearing en

banc. The panel stated the traditional standards of retroactivity, applied them to

the facts of this case, and made no new law on the topic. Its decision has no

prospective significance, because, as the panel emphasized, EPA may change

course prospectively and adopt another lawful method of distributing allowances

for the future. The decision, moreover, does not affect any other government

program. Nor does it affect the public interest: the total output of HCFCs remains
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under EPA’s control, and the decision has no environmental impact on its own.

The only parties affected by the decision are the other companies in the allowance

system, whose complaints about losing a windfall do not raise any issue of

exceptional importance. Finally, the panel’s holding is not only consistent with the

decisions of this Court, narrowly limited, and without prospective significance to

the HCFC program or to any other regulatory regime; it is also correct.

A. The Panel’s Reading of the Record Does Not Merit En Banc

Rehearing

The panel found that EPA had approved Petitioners’ permanent interpollutant transfers before disapproving them later. That finding is entirely factbound, turning on the interpretation of forms, letters, and other documents in the

record. The only broader issue involved is whether EPA receives deference in

interpreting its own regulations; the panel agreed that it does. 618 F.3d at 9. But

“deference” does not mean that EPA must always prevail, particularly if a

document’s “meaning is clear on its face.” Howmet Corp. v. EPA, 614 F.3d 544,

549 (D.C. Cir. 2010) (internal quotation marks omitted). The panel found that

EPA’s statements in the 2003 Rule, the Proposed Rule, and its letters to Petitioners

“clearly demonstrated” that its position had changed. 618 F.3d at 9. There is no

need to convene the en banc Court to confirm whether that assessment is correct.

In any case, the panel got it right. As of the time of the Proposed Rule, EPA

still understood that “[b]oth inter-pollutant and inter-company transfers of
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allowances are possible, either on a calendar-year or permanent basis.” 73 Fed.

Reg. at 78,701. That is why it had approved and confirmed Petitioners’ permanent

inter-pollutant transfers, before recharacterizing them later. See Exs. 2-7.

B. The Panel’s Retroactivity Holding Does Not Merit En Banc

Rehearing

1. The holding is fact-bound

In invalidating the Final Rule, the panel applied settled retroactivity

principles to a unique regulatory regime and administrative record. It is telling, in

that connection, that the panel majority and the panel dissent relied on the very

same legal principles, disagreeing only on how they should be applied in this case.

Both the majority and the dissent agreed, for example, that a change in law is not

retroactive simply because it upsets prior expectations (see 618 F.3d at 10 (opinion

of the Court); id. at 12 (Randolph, J., dissenting)); rather, the change must impair

“rights acquired under existing laws” (Landgraf v. USI Film Prods., 511 U.S. 244,

269 (1994) (internal quotation marks omitted); see Arkema, 618 F.3d at 7

(majority); id. at 12 (dissent)), or “attach[] new legal consequences to events

completed before its enactment” (id. at 7 (majority); see also id. at 12 (dissent)).

These same principles are expressed in the prior decisions on which EPA

relies. In DirecTV, the FCC adopted a new method of allocating available satellite

channels, auctioning off the channels rather than distributing them pro rata to

existing licensees. The Court recognized that the change had upset expectations

(110 F.3d at 825), but found that it was not retroactive, because it did not alter the
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status of “‘transactions already completed’” (id. at 825-26 (quoting Landgraf, 511

U.S. at 280)). The same is true of (i) the station ownership limits at issue in

Sinclair Broadcast Group, Inc. v. FCC, 284 F.3d 148 (D.C. Cir. 2002), which

“alter[ed] the future effect” but not “the past legality” of local marketing

agreements (id. at 166); (ii) the restrictions on exclusivity contracts in National

Cable & Telecommunications Ass’n v. FCC, 567 F.3d 659 (D.C. Cir. 2009), which

“alter[ed] only the present situation, not the past legal consequences of past

actions” (id. at 670 (internal quotation marks omitted)); and (iii) the rules for

spectrum use in Mobile Relay Associates, which addressed a spectrum owner’s

“present range of options,” not his “past actions” (457 F.3d at 11 (internal

quotation marks omitted)). All of these decisions, like the panel decision, applied

similar standards phrased in similar ways. The different outcome here results only

from the fact that this case involves a different record and regulatory regime, in

which the past legality of previously approved action is at issue.

A retroactivity inquiry is not “a simple or mechanical task.” Landgraf, 511

U.S. at 268. Rather, it requires a “commonsense, functional judgment,” tightly

bound up with the facts of each case, “about ‘whether the new provision attaches

new legal consequences to events completed before its enactment.’” Martin v.

Hadix, 527 U.S. 343, 357-58 (1999) (quoting Landgraf, 511 U.S. at 270). The

panel here was compelled to make that judgment based on its reading of the

administrative record. It found that the Final Rule did more than upset
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expectations; the Rule altered the transfers’ past legal consequences, changing the

Agency’s position on what kind of transactions (baseline or calendar-year) the

transfers had been when they were approved. Even if the panel, in reaching that

judgment, mischaracterized the operation of the Final Rule (which it did not), that

kind of error would not create any lasting conflict in authority or otherwise merit

reconsideration en banc.

2. The holding lacks prospective significance

Apart from being fact-bound, the panel’s retroactivity holding is narrowly

limited. As the panel emphasized, the finding of retroactivity resulted “quite

simply” from EPA’s “attempt to undo” transfers it had “previously approved.” 618

F.3d at 10. That situation is unlikely to arise frequently. Indeed, because the panel

made clear that EPA “is certainly entitled” to “forbid[] baseline inter-pollutant

transfers in the future” (id. at 9)—as the Final Rule has done—it is nearly

impossible for another case of this sort to arise. So long as EPA does not try to

declare that previously approved transfers never occurred, it is free to manage the

HCFC program in any manner consistent with the Act.

EPA tries to make hay out of the panel’s reference to “vested rights.” E.g.,

EPA Reh’g Pet. 1. That term must be read in the context of a “successive iteration

in a long-running regulatory regime.” Arkema, 618 F.3d at 9. The panel did not

say that Petitioners have an inalienable right to use the same amount of HCFCs in

perpetuity. To meet its environmental goals, EPA can change total HCFC output
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simply by distributing a different industry-wide percentage of baseline allowances

in any given year (or no allowances at all, see 40 C.F.R. § 82.16 (HCFC-141b)).

EPA thus can “adjust its distribution of allowances” (Arkema, 618 F.3d at 10), or

even propose to adopt an alternative method such as DirecTV’s auction system,

without running afoul of the panel’s retroactivity holding—though such methods

well may be prohibited by Congress’s other directives in the Clean Air Act.

The Agency admits that under the panel decision, it is “entitled to revise its

plan for distributing allowances.” EPA Reh’g Pet. 11. But EPA persists in

characterizing the decision as unduly restricting the Agency’s freedom of action. It

does not: EPA retains all the authority that Congress gave it. The panel merely

determined that Congress, in mandating the use of a transfer program, did not

authorize EPA to rewrite the history of that program, “prescrib[ing] what the law

was at an earlier time.” Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 225 (1995).

3. The holding does not adversely affect the public interest

The panel’s decision does not handicap EPA’s management of the HCFC

allowance program. Nor does it affect other cap-and-trade programs operated by

other agencies. Despite a presumably exhaustive search, EPA has failed to identify

any other government program that might someday be affected. That alone proves

that the issues here are not of exceptional importance.

Nor does the decision affect the public interest in other ways. Regardless of

what happens to the baselines, EPA can alter the percentages to manage the total
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number of calendar-year allowances released into the market. The decision itself

will neither increase the total output of HCFCs, nor damage the environment, nor

complicate U.S. efforts to comply with the Montreal Protocol. The panel’s opinion

is zero-sum: it does not address the size of the pie, but only how it has been sliced.

Indeed, the only consequence of the decision EPA can identify is that two of

Petitioners’ competitors, whose market shares were wrongfully increased by

EPA’s action, have filed their own petitions for review in an effort to preserve their

advantage. A complaint by the losing side in a regulatory dispute does not

transform a case into one of exceptional importance. Moreover, the competitors’

complaint is meritless. Whatever rights the competitors might assert to their

windfall, it is black-letter law that “[a]n agency, like a court, can undo what was

wrongfully done by virtue of its order.” United Gas Improvement Co. v. Callery

Props., Inc., 382 U.S. 223, 229 (1965). On remand, EPA can do whatever is

necessary to “put[] the parties in the position they would have been in had the error

not been made.” AT&T Corp. v. FCC, 448 F.3d 426, 433 (D.C. Cir. 2006)

(internal quotation marks omitted); see also Verizon Tel. Cos. v. FCC, 269 F.3d

1098, 1111 (D.C. Cir. 2001).

4. The holding is correct

En banc rehearing is unwarranted for another reason: the panel’s decision is

correct. As EPA has admitted, the Clean Air Act is ambiguous on whether it

permits or forbids permanent inter-pollutant baseline transfers. EPA had discretion
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to read the Act either way, and it exercised that discretion when it approved these

transfers in 2008. When EPA chose to continue the baseline system, including

lawfully made baseline transfers, it could not pretend that Petitioners’ permanent

baseline transfers had in fact been temporary calendar-year transfers all along—at

least not without “alter[ing] the past legal consequences of past actions.” Mobile

Relay Assocs., 457 F.3d at 11 (internal quotation marks omitted).

EPA argues strenuously that its decision in the Final Rule had consequences

only for the period after 2010. See, e.g., EPA Reh’g Pet. 8-11. But “[a]t least until

we devise time machines, a change can have its effects only in the future.”

Bergerco Canada v. U.S. Treasury Dep’t, 129 F.3d 189, 192 (D.C. Cir. 1997). The

2003 Rule allocated baselines “on a one-time basis,” unless changed “through

permanent transfers of allowances.” 68 Fed. Reg. at 2823. EPA’s decision to

ignore past inter-pollutant transfers when it continued the baseline-allowance

system past 2010 rested for its “fundamental justification” on the ground that, at

the time they were approved, Petitioners’ baseline transfers had not really been

baseline transfers at all. Arkema, 618 F.3d at 9. (As the panel recognized, the

other rationales advanced by EPA could support only prospective restraints on

transfers. Id.) Because Congress had not authorized EPA to rewrite history, the

Final Rule was partially invalid, and the panel was correct to vacate it in part.

CONCLUSION

The petition for rehearing en banc should be denied.
Dated: December 14, 2010

/s/ David M. Williamson

(with permission)

David M. Williamson

Gia V. Cribbs

ANDREWS KURTH LLP

1350 I Street, N.W., Suite 1100

Washington, DC 20005

(202) 662-2700

Of Counsel:

Carlos R. Escobar

SOLVAY NORTH AMERICA, LLC

3333 Richmond Avenue

Houston, TX 77098

Counsel for Solvay Fluorides, LLC

and Solvay Solexis, Inc.

Respectfully submitted,

/s/ Dan Himmelfarb

Dan Himmelfarb

John S. Hahn

Roger W. Patrick

Stephen E. Sachs

MAYER BROWN LLP

1999 K Street, N.W.

Washington, DC 20006

(202) 263-3000

Of Counsel:

William J. Hamel

ARKEMA INC.

2000 Market Street

Philadelphia, PA 19103

Counsel for Arkema Inc.
CORPORATE DISCLOSURE STATEMENTS

Pursuant to Federal Rule of Appellate Procedure 26.1 and D.C. Circuit Rules

26.1 and 35(g), Petitioners Arkema Inc., Solvay Fluorides, LLC, and Solvay

Solexis, Inc., respectively certify as follows:

CORPORATE DISCLOSURE STATEMENT OF ARKEMA INC.

Arkema Inc. is a wholly owned subsidiary of Arkema Delaware, Inc. There

are no publicly held companies that own 10% or more of the stock of Arkema Inc.

However, Arkema Inc. is indirectly owned by Arkema, S.A., a French public

company.

Arkema Inc. is a world-class producer of industrial chemicals. Among its

products are hydrochlorofluorocarbons (“HCFCs”), which are regulated pursuant

to Title VI of the Clean Air Act, 42 U.S.C. §§ 7671-7671q. As relevant here,

Arkema Inc. is a recipient of baseline production and consumption allowances for

HCFC-22 and HCFC-142b from the U.S. Environmental Protection Agency.

CORPORATE DISCLOSURE STATEMENT OF SOLVAY FLUORIDES,

LLC

Solvay Fluorides, LLC, a Delaware limited liability company, is a

manufacturer and seller of a variety of fluorochemical products. Its headquarters

are located in Houston, Texas. Solvay Fluorides, LLC is a wholly owned

subsidiary of Solvay Chemicals, Inc., whose ultimate parent is Solvay S.A., a
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publicly traded company in Europe. There is no publicly held corporation that

owns ten percent (10%) or more of Solvay Fluorides, LLC membership interests.

CORPORATE DISCLOSURE STATEMENT OF SOLVAY SOLEXIS, INC.

Solvay Solexis, Inc., a Delaware corporation, is a manufacturer and seller of

a variety of fluoropolymer and fluoroelastomer products. Its headquarters are

located in Thorofare, New Jersey. Solvay Solexis, Inc. is a wholly owned

subsidiary of Ausimont Industries, Inc., whose ultimate parent is Solvay S.A., a

publicly traded company in Europe. There is no publicly held corporation that

owns ten percent (10%) or more of Solvay Solexis, Inc. stock.

Dated: December 14, 2010

/s/ David M. Williamson

(with permission)

David M. Williamson

Gia V. Cribbs

ANDREWS KURTH LLP

1350 I Street, N.W., Suite 1100

Washington, DC 20005

(202) 662-2700

Of Counsel:

Carlos R. Escobar

SOLVAY NORTH AMERICA, LLC

3333 Richmond Avenue

Houston, TX 77098

Counsel for Solvay Fluorides, LLC

and Solvay Solexis, Inc.

Respectfully submitted,

/s/ Dan Himmelfarb

Dan Himmelfarb

John S. Hahn

Roger W. Patrick

Stephen E. Sachs

MAYER BROWN LLP

1999 K Street, N.W.

Washington, DC 20006

(202) 263-3000

Of Counsel:

William J. Hamel

ARKEMA INC.

2000 Market Street

Philadelphia, PA 19103

Counsel for Arkema Inc.
CERTIFICATE OF SERVICE

I hereby certify, pursuant to Fed. R. App. P. 25(c), that on December 14,

2010, the foregoing was electronically filed with the Clerk of the Court using the

CM/ECF system, which will send a notification to the attorneys of record in this

matter, who are registered with the Court’s CM/ECF system.

I also certify that on December 14, 2010, the foregoing was served by U.S.

Mail, first-class delivery, on:

Richard E. Ayres

Ayres Law Group

1615 L Street, NW, Suite 650

Washington, DC 20036

Diane E. McConkey

U.S. Environmental Protection Agency

Office of General Counsel

Room 2344A, Ariel Rios Building

1200 Pennsylvania Avenue, NW

Washington, DC 20460

Dated: December 14, 2010 /s/ Dan Himmelfarb

Dan Himmelfarb