Court Opinion

ID: 4539367
Source: CourtListenerOpinion
Date Created: 2020-06-05 15:00:16.450394+00
Date Added: 2024-06-11T12:46:24.255992
License: Public Domain

18-2121-ag (L)
Natural Resources Defense Council, Inc. and State of Vermont v. United States Environmental Protection Agency

                                 UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                                     August Term, 2019

                        Argued: November 20, 2019                             Decided: June 5, 2020

                                       Docket Nos. 18-2121-ag; 18-2670-ag

              NATURAL RESOURCES DEFENSE COUNCIL, INC., STATE OF VERMONT,

                                                                                     Petitioners,
                                                               — v. —

          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ANDREW R.
          WHEELER, IN HIS CAPACITY AS ADMINISTRATOR OF THE U.S. ENVIRONMENTAL
          PROTECTION AGENCY,

                                                                                     Respondents.

B e f o r e:

                              WALKER, LYNCH, and SULLIVAN, Circuit Judges.

       Petitioners Natural Resources Defense Council, Inc., and the State of
Vermont seek review of certain provisions of a rule promulgated by the United
States Environmental Protection Agency, pursuant to the Toxic Substances
Control Act, 15 U.S.C. § 2607(b)(10), that requires manufacturers to report
information about their use of mercury. In particular, petitioners argue that three
exemptions for categories of manufacturers and importers are unlawful. We
agree with respect to the exemption from all reporting requirements for those
who import products containing a mercury-added component, but reject
petitioners’ challenges to the other exemptions. Accordingly, we GRANT
REVIEW of and VACATE 40 C.F.R. § 713.7(b)(2) but DENY REVIEW of 40 C.F.R.
§§ 713.7(b)(3) (exempting manufacturers of products containing mercury-added
components from all reporting requirements) and 713.9(a) (exempting
manufacturers or importers of large quantities of mercury from certain reporting
requirements).

                   GABRIEL DALY, Natural Resources Defense Council, New York,
                        NY (Katherine Desormeau, Natural Resources Defense
                        Council, San Francisco, CA; Sarah C. Tallman, Natural
                        Resources Defense Council, Chicago, IL, on the brief), for
                        Petitioner Natural Resources Defense Council, Inc.

                   Justin E. Kolber, Assistant Attorney General, for Thomas J.
                          Donovan, Jr., Attorney General for the State of Vermont,
                          Montpelier, VT, for Petitioner State of Vermont.

                   ANDREW S. COGHLAN, Trial Attorney, Environmental Defense
                       Section, Environment and Natural Resources Division,
                       United States Department of Justice, Washington, D.C.
                       (Jeffrey Bossert Clark, Assistant Attorney General,
                       Jonathan D. Brightbill, Deputy Assistant Attorney
                       General, Erin Koch, U.S. Environmental Protection
                       Agency, Washington, D.C. on the brief), for Respondents.

                   Ellen F. Rosenblum, Attorney General of Oregon, Benjamin
                         Gutman, Solicitor General, Oregon, Steven Novick,
                         Special Assistant Attorney General, Oregon, William
                         Tong, Attorney General of Connecticut, Clare E.
                         Connors, Attorney General of Hawaii, Aaron Frey,

                                         2
                         Attorney General of Maine, Brian E. Frosh, Attorney
                         General of Maryland, Maura Healey, Attorney General
                         of Massachusetts, Gurbir S. Grewal, Attorney General of
                         New Jersey, Josh Shapiro, Attorney General of
                         Pennsylvania, Peter F. Neronha, Attorney General of
                         Rhode Island, Robert W. Ferguson, Attorney General of
                         Washington, Max Kieley, Assistant Attorney General,
                         Minnesota, for Amici Curiae Oregon, Connecticut,
                         Hawaii, Massachusetts, Maine, Maryland, Minnesota
                         (by and through its Minnesota Pollution Control
                         Agency), New Jersey, Pennsylvania, Rhode Island, and
                         Washington.

GERARD E. LYNCH, Circuit Judge:

      In 2016, Congress amended the Toxic Substances Control Act of 1976

(“TSCA”) to require the U.S. Environmental Protection Agency (“EPA”) to “carry

out and publish” a triennial “inventory of mercury supply, use, and trade in the

United States.” 15 U.S.C. § 2607(b)(10)(B). In 2018, EPA promulgated the Mercury

Reporting Rule (“Reporting Rule”). As relevant here, the Reporting Rule requires

“[a]ny person who manufactures (including imports)” mercury or a “mercury-

added product” to report information on their products, see 40 C.F.R. §§ 713.7(a),

(b), 713.9; it also exempts certain categories of manufacturers and importers from

various reporting obligations. Three of those exemptions are at issue in this case.

                                         3
Under § 713.7(b)(2) and (b)(3), importers and manufacturers, respectively, of

products that contain a mercury-added product as a component are exempt from

all reporting requirements. Under § 713.9(a), persons who manufacture or import

elemental mercury or mercury compounds in significantly large amounts are

exempt from certain reporting requirements.

      Petitioners Natural Resources Defense Council, Inc., (“NRDC”) and the

State of Vermont (“Vermont”) (together, “petitioners”) challenge those three

exemptions from the Reporting Rule as unlawful agency action. As explained

below, we find that the exemption for importers of products containing mercury-

added components is an unlawful interpretation of the TSCA, because it lacks a

reasoned explanation. We find that the exemption for manufacturers of products

with mercury-added components and the exemption for high-volume

manufacturers are lawful in light of Congress’s directive to “not require

reporting which is unnecessary or duplicative.” 15 U.S.C. § 2607(a)(5)(A). We

therefore GRANT REVIEW of and VACATE the exemption codified at 40 C.F.R.

§ 713.7(b)(2) and DENY REVIEW of the exemptions codified at 40 C.F.R.

§§ 713.7(b)(3) and 713.9(a).

                                         4
                                BACKGROUND

      I.     Uses and Dangers of Mercury

      Mercury is a naturally occurring element. It is also a potent neurotoxin that

does not degrade over time, making it both a significant public health threat and

a danger to the environment. One way that mercury enters the environment is

through the manufacture, use, and disposal of products that contain mercury.

Mercury released through those processes converts biologically into

methylmercury, the element’s most toxic form, which bioaccumulates in wildlife.

Methylmercury exposure in wildlife can cause death, reduced fertility, slowed

development and growth, and abnormal behavior that affects survival. Human

exposure occurs primarily from the ingestion of mercury through the

consumption of fish and shellfish. Elevated methylmercury levels in the

bloodstreams of young children and fetuses have been found to adversely affect

cognitive development. Studies also suggest that mercury exposure may affect

humans’ reproductive, renal, cardiovascular, and hematologic health.

      Mercury has long been used in a wide range of industrial processes and as

an ingredient in many familiar products. Historically, mercury has been used in

products including batteries within watches, toys, and cameras; paint; pesticides;

                                        5
cosmetics and skin care products; pharmaceuticals; vaccines; dental amalgam;

fluorescent, neon, and ultraviolet lamps used in car headlights, street lights, neon

signs, commercial lighting, and tanning beds; thermometers, blood pressure

cuffs, and other medical devices; and switches and relays used in pumps,

appliances, and industrial machinery. Since 1980, largely due to increased

awareness of the environmental and health dangers of mercury, the use of

mercury-added products in the United States has decreased by over 97 percent.

Nevertheless, mercury-added products including batteries, lamps, dental

amalgam, and switches and relays continue to be sold extensively in the United

States.

      Since at least 2006, EPA has made the reduction of mercury-related risks an

agency priority. The United States is a party to the Minamata Convention, an

international agreement that seeks to protect human health and the environment

from the effects of mercury contamination. State governments have also been

instrumental to the reduction of mercury use nationwide, by enacting legislation

that restricts the production and sale of mercury-added products, regulates their

disposal, and implements labeling requirements. Thirteen states, including

Vermont, have formed a coalition of state environmental agencies, the Interstate

                                         6
Mercury Education and Reduction Clearinghouse (“IMERC”), which manages an

interstate reporting system for manufacturers and a related database of

information on mercury use.

      II.    Statutory Background

      The TSCA authorizes EPA to regulate the use of “chemical substances and

mixtures . . . whose manufacture, processing, distribution in commerce, use, or

disposal may present an unreasonable risk of injury to health or the

environment.” 15 U.S.C. § 2601(a)(2); see also id. § 2605(a). The statute directs EPA

to promulgate rules requiring manufacturers and processors of chemical

substances to maintain records of their use of such substances and report that

information to EPA. See id. § 2607(a)(1)(A), (B).

      In 2016, Congress enacted the Frank R. Lautenberg Chemical Safety for the

21st Century Act, which amended the TSCA by adding (among other things)

specific directives with respect to mercury. Section 8(b)(10) of the amended TSCA

provides that “[n]ot later than April 1, 2017, and every 3 years thereafter, the

Administrator shall carry out and publish in the Federal Register an inventory of

mercury supply, use, and trade in the United States.” 15 U.S.C. § 2607(b)(10)(B). It

directs EPA, in doing so, to “identify any manufacturing processes or products

                                          7
that intentionally add mercury” and to “recommend actions, including proposed

revisions of Federal law or regulations, to achieve further reductions in mercury

use.” Id. § 2607(b)(10)(C).

      The statute also includes a directive to manufacturers, calling on “any

person who manufactures mercury or mercury-added products or otherwise

intentionally uses mercury in a manufacturing process” to “make periodic

reports to the Administrator, at such time and including such information as the

Administrator shall determine by rule” in order “[t]o assist in the preparation of

the inventory under subparagraph (B).” Id. § 2607(b)(10)(D)(i). The TSCA’s

definitions provision makes clear that the “manufacture” of a chemical substance

includes manufacturing, producing, or “import[ing] [it] into the customs territory

of the United States.” Id. § 2602(9).

      The statute directs EPA to “avoid duplication” by “coordinat[ing] the

reporting under this subparagraph with [IMERC].” Id. § 2607(b)(10)(D)(ii). It

further provides that, in carrying out this section of the TSCA, EPA “shall, to the

extent feasible[,]” “not require reporting which is unnecessary or duplicative”

and “minimize the cost of compliance with this section and the rules issued

thereunder on small manufacturers and processors.” Id. § 2607(a)(5), (A), (B).

                                         8
      III.   Regulatory Background

      In accordance with the amended TSCA’s requirements, EPA published its

initial inventory of mercury supply, use, and trade in 2017. Because EPA had not

yet promulgated a rule that directed manufacturers to report mercury use for

inclusion in the triennial inventory, its 2017 inventory drew exclusively on

publicly available data, which EPA acknowledged was “notably limited in

applicability to certain aspects of supply, use, and trade” and “in some cases []

outdated.” J. App’x 440. For that reason, EPA concluded that it was “premature”

to “identify any manufacturing processes or products that intentionally add

mercury” or to “recommend actions . . . to achieve further reductions,” as

required by the TSCA. Id. (quoting 15 U.S.C. § 2607(b)(10)(C)).

      On June 27, 2018, EPA published the Mercury Reporting Rule (“Reporting

Rule”) in the Federal Register. See Mercury; Reporting Requirements for the

TSCA Mercury Inventory, 83 Fed. Reg. 30,054 (June 27, 2018); 40 C.F.R. pt. 713.

The Reporting Rule “specifies reporting and recordkeeping procedures . . . for

certain manufacturers (including importers) and processers of mercury” in order

to facilitate EPA’s statutorily mandated publication of a triennial mercury

inventory. 40 C.F.R. § 713.1(a). The reporting requirements apply to “[a]ctivities

                                         9
undertaken with the purpose of obtaining an immediate or eventual commercial

advantage” involving the “[i]mport” or “[m]anufacture (other than import)” of

either mercury or mercury-added products, or the “[i]ntentional use of mercury

in a manufacturing process,” as well as related activities such as the

“[d]istribution in commerce, including domestic sale or transfer,” “[s]torage,”

and “[e]xport” of mercury. Id. § 713.1(b). Information must be reported for both

“[e]lemental mercury” and “mercury compound[s].” Id. § 713.5.

      The Reporting Rule requires that “[a]ny person who manufactures

(including imports) mercury” or “a mercury-added product,” aside from

specified categories of exempted persons, “must report.” Id. § 713.7. Those who

are not required to report include, inter alia, manufacturers who do not seek a

commercial advantage and persons “engaged only in the generation, handling, or

management of mercury-containing waste.” Id. § 713.7(a)(1), (b)(1), (a)(3). Under

§ 713.7(b), the following categories of persons are also excused from all of the

rule’s reporting requirements:

             (2) A person engaged only in the import of a product that
             contains a component that is a mercury-added product; or

             (3) A person engaged only in the manufacture (other than
             import) of a product that contains a component that is a

                                         10
             mercury-added product who did not first manufacture
             (including import) the component that is a mercury-added
             product.

      Both of these provisions concern products that contain mercury only

within a component (“assembled products”). A watch that contains, as one

constituent part, or “component,” a mercury-added battery, is an assembled

product; so, too, is a car with a mercury-added lamp in its headlight. By contrast,

a mercury-added component – in the above examples, a battery or lamp that

contains mercury – is not itself an assembled product.1 Under § 713.7(b)(2), an

importer of an assembled product, manufactured abroad, is exempt from the

requirements of the Reporting Rule. Under § 713.7(b)(3), a domestic

manufacturer of an assembled product is also exempt, so long as it does not also

manufacture the mercury-added component. Thus, a domestic entity that either

manufactures or imports a watch with a mercury-added battery need not report

to EPA, so long as that entity does not also import or manufacture the mercury-

added battery itself.

      Manufacturers and importers who are subject to the Reporting Rule’s

1
 For purposes of this analysis, we assume that batteries contained within
watches and lamps contained within car headlights are not themselves
“assembled products” made up of multiple constituent parts.

                                        11
requirements generally must report the quantities of mercury, in pounds, that

they have manufactured, imported, exported, stored, and distributed in

commerce over relevant time periods. Id. § 713.9(b). But here, too, the Reporting

Rule makes exceptions for certain manufacturers and importers: “Persons who

manufacture (including import) mercury in amounts greater than or equal to

2,500 pounds (lbs.) for elemental mercury or greater than or equal to 25,000 lbs.

for mercury compounds for a specific reporting year must report” only the

quantities stored and distributed in commerce, and not the quantities

manufactured, imported, or exported. Id. § 713.9(a). Although it may seem

counterintuitive to exempt persons who manufacture or import the most mercury

from regulations designed to survey the extent of mercury usage, EPA already

requires that these same manufacturers and importers report under another EPA

regulation that predates the Mercury Reporting Rule.2

2
  That regulation, the Chemical Data Reporting Rule (“CDR Rule”), promulgated
in 2011, requires persons who export or manufacture mercury “in an amount of
25,000 lb . . . or more (or in an amount of 2,500 lb . . . or more for [elemental
mercury]) . . . at any one site during any calendar year” to report the amounts of
mercury they have manufactured and exported. 40 C.F.R. § 711.15(b), (b)(3)(iii),
(iv). The CDR Rule specifies that the category of “manufacturers” “includ[es]
importers.” See id. § 711.15(b).

                                        12
                                  DISCUSSION

      NRDC and Vermont timely petitioned this Court for review of the Mercury

Reporting Rule. See 15 U.S.C. § 2618(a). Specifically, petitioners seek review of

three provisions that excuse categories of manufacturers and importers from the

rule’s reporting requirements: (1) the exemption for manufacturers of assembled

products with mercury-added components, 40 C.F.R. § 713.7(b)(3); (2) the

exemption for importers of assembled products with mercury-added

components, 40 C.F.R. § 713.7(b)(2); and (3) the partial exemption (in the form of

curtailed reporting requirements) for high-volume manufacturers and importers,

40 C.F.R. § 713.9(a).

      As explained below, we conclude that the exemptions for assembled

product manufacturers and high-volume manufacturers are reasonable in light of

Congress’s directive to EPA to avoid requiring duplicative or unnecessary

reporting. We therefore deny review of §§ 713.7(b)(3) and 713.9(a). However, we

find that EPA has failed to provide a reasoned explanation for the exemption for

assembled product importers. For that reason, we grant review of § 713.7(b)(2)

and vacate that provision.

                                         13
      I.     Standing

      Before addressing the merits of petitioners’ arguments, we must first

consider the threshold question of their standing to challenge the lawfulness of

the Mercury Reporting Rule. EPA does not challenge petitioners’ standing to

bring this appeal. Nevertheless, “[t]he question of standing is not subject to

waiver: ‘We are required to address the issue . . . even if the parties fail to raise

the issue before us.’” Cooper v. U.S. Postal Serv., 577 F.3d 479, 489 (2d Cir. 2009)

(internal alterations omitted) (quoting United States v. Hays, 515 U.S. 737, 742

(1995)). The “irreducible constitutional minimum of standing contains three

elements. First, the plaintiff must have suffered an injury in fact. . . . Second, . . .

the injury has to be fairly traceable to the challenged action of the defendant. . . .

Third, it must be likely, as opposed to merely speculative, that the injury will be

redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61

(1992) (internal quotation marks and alterations omitted).

       Petitioners NRDC and Vermont both assert that they have Article III

standing on the basis of expected informational deficits. They contend that the

challenged exemptions from the Reporting Rule will create gaps in EPA’s

published mercury inventories, and that they will be injured by their lack of

                                            14
access to the information that would otherwise fill those gaps. “The law is settled

that a denial of access to information qualifies as an injury in fact where a statute

(on the claimants’ reading) requires that the information be publicly disclosed

and there is no reason to doubt [petitioners’] claim that the information would

help [petitioners].” Campaign Legal Ctr. & Democracy 21 v. Fed. Election Comm’n,

952 F.3d 352, 356 (D.C. Cir. 2020) (internal quotation marks omitted); see also Fed.

Election Comm’n v. Akins, 524 U.S. 11, 21-22 (1998); Pub. Citizen v. Dep’t of Justice,

491 U.S. 440, 449 (1989). Here, because “there is no reason to doubt” that (1)

“access to additional information about [mercury] manufactured or [imported] in

the United States will promote” NRDC’s advocacy efforts and Vermont’s law

enforcement efforts, and (2) “a decision by this [C]ourt to vacate or require

reconsideration of the rule would remedy th[e] asserted harm by requiring the

disclosure of additional information,” petitioners have established standing

under Article III. See Envtl. Def. Fund v. EPA, 922 F.3d 446, 452-53 (D.C. Cir. 2019).

      Both NRDC and Vermont allege a particularized interest in the information

captured by EPA’s mercury inventory, including the information that would be

collected from assembled product importers, assembled product manufacturers,

and high-volume manufacturers absent the challenged provisions. NRDC alleges

                                           15
that it relies on information about mercury use to support its practice of

advocating for mercury reductions, and that the exemptions pose an obstacle to

effective advocacy. Vermont alleges that the exemptions will affect its ability to

enforce state laws that restrict the sale and use, mandate notification and

labeling, and regulate the disposal of mercury-added products.

      Petitioners also allege that the challenged provisions unlawfully exempt

from reporting obligations groups of manufacturers and importers from whom

EPA is required to collect information under the amended TSCA. If that claim is

correct, the challenged provisions of the Reporting Rule will improperly omit

information that, under the statute, ought to be publicly disclosed in reports to

the agency and in the agency’s published inventory and that will help NRDC in

its advocacy efforts and Vermont in its law enforcement efforts. We are satisfied

that NRDC and Vermont have alleged an injury in fact. Petitioners’ asserted

injuries are further fairly traceable to the alleged omissions of information, in the

sense that they would not suffer from the asserted informational deficit absent

the challenged reductions in reporting and disclosure. The vacatur of the

challenged provisions would redress those injuries by requiring that exempted

groups of manufacturers and importers report under the Reporting Rule, so that

                                         16
information pertaining to their use of mercury would be reflected in EPA’s

published inventories. Petitioners have therefore established standing under

Article III.

       II.     Legal Standard

       “We evaluate challenges to an agency’s interpretation of a statute that it

administers within the two-step Chevron deference framework.” Catskill

Mountains Chapter of Trout Unlimited, Inc. v. EPA, 846 F.3d 492, 507 (2d Cir. 2017)

(citing Lawrence + Mem’l Hosp. v. Burwell, 812 F.3d 257, 264 (2d Cir. 2016)); see

Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984). At

Chevron Step One, we ask “whether Congress has directly spoken to the precise

question at issue.” Chevron, 467 U.S. at 842. If Congress’s directive is

unambiguous, both the agency and the courts are bound by that mandate. Id. at

842-43. If, instead, “the statute if silent or ambiguous with respect to the specific

issue,” the analysis proceeds to Chevron Step Two. Id. at 843; see also Catskill

Mountains, 846 F.3d at 507. At that step, “the question for the court is whether the

agency’s answer is based on a permissible construction of the statute.” Chevron,

467 U.S. at 843.

       In evaluating reasonableness at Chevron Step Two, “we will accord

                                          17
deference to the agency’s interpretation of the statute so long as it is supported by

a reasoned explanation, and ‘so long as the construction is a reasonable policy

choice for the agency to make.’” Catskill Mountains, 846 F.3d at 507 (quoting Nat’l

Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 986 (2005)).

Because “a statute’s ambiguity constitutes an implicit delegation from Congress

to the agency to fill in the statutory gaps,” the agency’s interpretation must only

be reasonable, and need not be the sole permissible or even most reasonable

interpretation of the statute. Id. at 520 (quoting FDA v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 159 (2000)); see also Entergy Corp. v. Riverkeeper, Inc.,

556 U.S. 208, 218 (2009).

      When a petitioner challenges the procedure by which an agency engaged

in rulemaking, rather than the substance of the rule, we assess whether the

agency’s “action, findings, and conclusions” are “arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law,” pursuant to the

Administrative Procedure Act. 5 U.S.C. § 706(2), (2)(A). Challenges to agency

procedure are evaluated under the standard set out in Motor Vehicle

Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile

Insurance Co., 463 U.S. 29, 43 (1983). Under that standard, we defer to an agency’s

                                           18
determinations so long as the agency “give[s] adequate reasons for its decisions,”

in the form of a “‘satisfactory explanation for its action including a rational

connection between the facts found and the choice made.’” Encino Motorcars, LLC

v. Navarro, 136 S. Ct. 2117, 2125 (2016) (quoting State Farm, 463 U.S. at 43).

      “State Farm and Chevron provide for related but distinct standards for

reviewing rules promulgated by administrative agencies.” Catskill Mountains, 846

F.3d at 521. “Much confusion” stems from the fact that “both standards purport

to provide a method by which to evaluate whether an agency action is ‘arbitrary’

or ‘capricious,’ and . . . often, though not always, take the same factors into

consideration.” Id. at 522. The Supreme Court and this Court have clarified that

the reasonableness of “[a]n agency’s initial interpretation of a statutory provision

should be evaluated only under the Chevron framework,” which looks to whether

the interpretation is substantively reasonable. Id. at 521; see also Verizon Commc’ns

Inc. v. FCC, 535 U.S. 467, 502 n.20 (2002). By contrast, “State Farm is used to

evaluate whether a rule is procedurally defective as a result of flaws in the

agency’s decisionmaking process” and applies, inter alia, “when an agency

changes its interpretation of a particular statutory provision.” Catskill Mountains,

846 F.3d at 521, 523.

                                          19
      The Mercury Reporting Rule is EPA’s initial interpretation of § 8(b)(10) of

the TSCA, as amended by Congress in 2016. See 15 U.S.C. § 2607(b)(10); see also

Frank R. Lautenberg Chemical Safety for the 21st Century Act, Pub. L. No. 114-

182, § 8(b), 130 Stat. 448, 475 (2016). Petitioners assert that the exemptions for

importers and manufacturers of assembled products contained in 40 C.F.R.

§ 713.7(b)(2) and (b)(3) contravene the TSCA and thus exceed EPA’s rulemaking

authority. These are substantive challenges to EPA’s initial act of statutory

interpretation through rulemaking. Accordingly, we review the reasonableness of

§ 713.7(b)(2) and (b)(3) under Chevron. Petitioners challenge the partial exemption

for high-volume manufacturers contained in 40 C.F.R. § 713.9(a) both as an

unreasonable interpretation of the TSCA and as the product of flawed

rulemaking procedures. Accordingly, we evaluate their substantive challenge to

§ 713.9(a) under Chevron and their procedural challenge to that provision under

State Farm.

      III.    Exemptions for Importers and Manufacturers of Assembled
              Products

      Petitioners contend that the reporting exemptions for importers and

manufacturers of assembled products, codified at 40 C.F.R. § 713.7(b)(2) and

                                          20
(b)(3), are unlawful because they contravene Congress’s clear statutory directive

that manufacturers of mercury or mercury-added products report to EPA. See 15

U.S.C. § 2607(b)(10)(D)(i). EPA argues that these exemptions are within the scope

of its broad authority, as delegated by Congress, to determine what reporting is

necessary to complete the statutorily required inventory, and that they are

consistent with the TSCA’s letter and purpose.

                A.    Chevron Step One

          Petitioners first assert that the TSCA unambiguously requires that EPA

mandate reporting from importers and domestic manufacturers of assembled

products that contain mercury only within a component, thereby rendering the

reporting exemptions for such persons irreconcilable with the statute’s plain

meaning. They rely principally on the TSCA’s language providing that “[t]o

assist in the preparation of the inventory . . . , any person who manufactures

mercury or mercury-added products . . . shall make periodic reports to the

Administrator.” 15 U.S.C. § 2607(b)(10)(D)(i). We conclude that this language

does not unambiguously foreclose the exemptions at 40 C.F.R. § 713.7(b)(2) and

(b)(3).

          Petitioners argue that the TSCA unambiguously requires all manufacturers

                                           21
of mercury or mercury-added products to report, and that importers and

manufacturers of assembled products with mercury-added components are

indisputably “person[s] who manufacture[] . . . mercury-added products.” 15

U.S.C. § 2607(b)(10)(D)(i). The TSCA expressly defines “[t]he term ‘manufacture’”

to include importation, see id. § 2602(9), and EPA concedes that the term

“mercury-added product” unambiguously includes assembled products in which

mercury exists solely in a component, such as a watch with a mercury-added

battery or a car with mercury-added lamps in its headlights. Thus, there is no

question that importers and domestic manufacturers of such assembled products

are encompassed within the category of “any person who manufactures mercury

or mercury-added products.” 15 U.S.C. § 2607(b)(10)(D)(i).

      We conclude, however, that the TSCA does not unambiguously direct EPA

to require reporting from every manufacturer of a mercury-added product.

Petitioners contend that “any person,” as used in the TSCA, clearly means “all

persons,” and that the verb “shall” underscores the mandatory nature of such

persons’ obligation to report — and thus, necessarily, the mandatory nature of

EPA’s obligation to require that such persons report. They therefore contend that

the plain meaning of the TSCA is that EPA must require reporting from all

                                        22
persons “who manufacture[] mercury or mercury-added products.” Id.

      But Congress also directs EPA, in the very same section of the TSCA (and

using the same mandatory “shall”) “not [to] require reporting which is

unnecessary or duplicative,” id. § 2607(a)(5)(A), “to the extent feasible,” id.

§ 2607(a)(5). That provision not only authorizes, but also requires, EPA to exempt

certain manufacturers from otherwise applicable reporting requirements, where

requiring the reporting would be “unnecessary or duplicative.” In short, the

TSCA requires all persons who manufacture mercury or mercury-added

products to “make periodic reports to the Administrator,” but such persons are

required to report only “such information as the Administrator shall determine

by rule.” 15 U.S.C. § 2607(b)(10)(D)(i). And the Administrator may determine

what needs to be reported, if anything, provided that the determination comports

with the statutory goal of facilitating the inventory while avoiding reports that

are unnecessary for that purpose or duplicative.

      Because the TSCA does not unambiguously mandate that EPA require

reporting from every manufacturer of a mercury-added product, EPA’s

exemptions in 40 C.F.R. § 713.7(b)(2) and (b)(3) for certain manufacturers of

mercury-added products — specifically, those who import into or manufacture

                                          23
within the United States assembled products with mercury added only to a

component — do not directly contravene the TSCA’s plain meaning.

      At the same time, however, the statutory language does not

unambiguously authorize or require those specific exemptions. It presumptively

mandates reporting by all manufacturers and importers, to the extent necessary

to accomplish the purposes of the statute, with the exception that EPA should not

require unnecessary or duplicative reporting. Because the statute does not

directly address the specific question of reporting by manufacturers or importers

of products with mercury-added components, whether the exemptions from

reporting such products are appropriately granted in light of the directive to

avoid the unnecessary or duplicative is not answerable based on the language of

the statute. Rather, the appropriateness of these exemptions must be addressed at

Chevron Step Two, based on the reasonableness of the agency’s rationale for

granting them.

      B. Chevron Step Two

      Because the TSCA is “silent or ambiguous” on the question of whether

EPA’s exemption of manufacturers and importers of assembled products

containing mercury-added components from its reporting requirements is

                                        24
appropriate in light of its obligation to avoid requiring “unnecessary or

duplicative” reports, we must determine whether the exemptions are “based on a

permissible construction of the statute.” Chevron, 467 U.S. at 843. In doing so,

“we ask whether the agency’s action is arbitrary, capricious, or manifestly

contrary to the statute.” Cooling Water Intake Structure Coal. v. EPA., 905 F.3d 49,

65 (2d Cir. 2018) (internal quotation marks omitted). “[W]e will accord deference

to the agency’s interpretation of the statute so long as it is supported by a

reasoned explanation . . . .” Catskill Mountains, 846 F.3d at 507. “Even under this

deferential standard, however, agencies must operate within the bounds of

reasonable interpretation.” Michigan v. EPA, 135 S. Ct. 2699, 2707 (2015) (internal

quotation marks omitted). “[A]n agency interpretation that is inconsistent with

the design and structure of the statute as a whole does not merit deference.” Util.

Air Regulatory Grp. v. EPA, 573 U.S. 302, 321 (2014) (internal citation, quotation

marks, and alteration omitted).

      1. Exemption for Manufacturers of Assembled Products

      40 C.F.R. § 713.7(b)(3) exempts from reporting requirements “[a] person

engaged only in the manufacture (other than import) of a product that contains a

component that is a mercury-added product who did not first manufacture

                                          25
(including import) the component that is a mercury-added product.” Under this

provision, a domestic manufacturer of assembled products is exempt from

reporting requirements if the only mercury in its product is within a component

that was imported or manufactured by another entity. A manufacturer who

produces or imports the component itself is not exempt. In other words, an

assembled product manufacturer is exempt from reporting on the mercury

present in a component of its product only if some other manufacturer or

importer previously introduced that mercury-added component into the U.S.

market. Significantly, in that situation, the person or entity that manufactured or

imported the component would be required to report that activity.

      Congress directed EPA both to collect reports from “any person who

manufactures . . . mercury-added products” and “not [to] require reporting

which is unnecessary or duplicative.” 15 U.S.C. § 2607(b)(10)(D)(i), (a)(5)(A).

Where two different manufacturers engage with the same mercury-added

component — because, for example, one produces the component and the other

adds it to an assembled product — it is reasonable for EPA to deem it

“unnecessary or duplicative” to require both manufacturers to report. No

provision of the Reporting Rule exempts either importers or domestic

                                         26
manufacturers of mercury-added components. Because the Reporting Rule

requires that any person who introduces a mercury-added component to the U.S.

market (either by importing or by producing it) is required to report on that

component, EPA will have information about the nature and extent of the use of

mercury in such component products. For example, once a manufacturer or

importer of batteries reports on the presence of mercury in its product, that

mercury is accounted for within EPA’s triennial inventory, and EPA may

reasonably decline to require additional reporting from the domestic watchmaker

who uses those batteries as a component in its watches.

      Petitioners argue that EPA exaggerates the administrative burden that

“double counting” imposes on the agency and that it elides meaningful

distinctions in the data that would be gathered from component-makers (or

component importers) and assembled product manufacturers who use those

components. But even if those arguments are meritorious, they speak only to

whether EPA’s interpretation is optimal from a policy perspective, and not to

whether this exemption is “within the bounds of reasonable [statutory]

interpretation.” Michigan, 135 S. Ct. at 2707 (internal quotation marks omitted).

Whether or not the exemption for certain assembled product manufacturers was

                                        27
the most reasonable way of interpreting EPA’s obligation to require reporting

insofar as it is not duplicative, it is certainly a reasonable interpretation. See

Entergy Corp., 556 U.S. at 218.3

      We therefore deny review of 40 C.F.R. § 713.7(b)(3).

      2. Exemption for Importers of Assembled Products

      40 C.F.R. § 713.7(b)(2) exempts from reporting requirements “[a] person

engaged only in the import of a product that contains a component that is a

mercury-added product.” Under this provision, an importer of assembled

products is exempt from reporting requirements if mercury is present only

within a “component” of the imported product. Thus, for example, the

exemption covers an importer of foreign-made watches that contain mercury

within their batteries (and nowhere else), but not a person who imports those

same batteries as a stand-alone product.

      Unlike § 713.7(b)(3), discussed above, the reporting that would occur

absent this exemption would not be duplicative. In the case of an assembled

3
 Thus, we do not suggest that EPA was required to adopt the exemption in 40
C.F.R. § 713.7(b)(3). If EPA had determined that the additional information that
would be captured by requiring reporting now exempted would further the
statutory goal and would not be duplicative, we would be presented with a
different question not at issue in this case, and on which we express no view.

                                           28
product made by a domestic manufacturer, the mercury-added component will

have been reported by the manufacturer or importer of the component. But with

respect to an assembled product manufactured abroad that contains mercury-

added components that are themselves produced outside the United States (as

opposed to components manufactured domestically, then exported and

integrated into assembled products abroad before being imported), no other

entity is required to report the mercury in the component, and no portion of the

Mercury Reporting Rule accounts for the mercury present in the components of

the assembled products manufactured abroad.4 The importers exempted by

§ 713.7(b)(2) are the very persons who introduce that mercury into the U.S.

market. Thus, EPA cannot (and does not try to) rationalize this exemption on the

theory that it eliminates redundant reporting. Nor does it argue, on the basis of

4
 EPA suggests that it will draw on information from the IMERC database to
ensure that its inventory accounts for mercury use that will not be reported
pursuant to the exemption for assembled product importers. But EPA does not
explain how information collected by IMERC, a coalition of only thirteen states,
sufficiently accounts for the presence of mercury in components of imported
assembled products nationwide. Indeed, in 2017, EPA itself acknowledged that it
could not rely on IMERC and other public data to “develop a complete
inventory,” J. App’x at 441, in part because “if a company sells products only in
states other than IMERC Notification states, then the company does not report to
IMERC.” J. App’x at 443.

                                        29
any data in the administrative record, that such reporting would be

“unnecessary” because the quantity of mercury introduced into the American

marketplace by such imports is de minimis – indeed, it is difficult to see how it

would be possible to know that without the very reporting that the exemption

eschews.

      Instead, EPA advances two other rationales for the reasonableness of this

exemption. It relies principally on the theory that Congress had no interest in

reporting from importers of assembled products with mercury-added

components, because such importers are too attenuated from the intentional

addition of mercury into the products.5 In the alternative, it argues that the

exemption is reasonable because it relieves importers of the undue burden of

complying with reporting obligations. For the reasons discussed below, we find

neither of these rationales persuasive and conclude that the importer exemption

is not a reasonable interpretation of the TSCA. We therefore grant review of 40

C.F.R. § 713.7(b)(2).

5
 EPA also asserts this rationale in support of § 713.7(b)(3), discussed above.
Because we find that provision reasonable in light of EPA’s obligation not to
require duplicative reporting, we discuss this rationale only in relation to
§ 713.7(b)(2).

                                         30
      a. Intentionality Rationale

      EPA argues that the exemption for importers of assembled products with

mercury-added components is reasonable because it is consistent with the

TSCA’s focus on manufacturers who use mercury intentionally. The TSCA calls

on EPA to “identify any manufacturing processes or products that intentionally

add mercury” and requires periodic reporting from “any person who

manufactures mercury or mercury-added products or otherwise intentionally uses

mercury in a manufacturing process.” 15 U.S.C. § 2607(b)(10)(C)(i), (D)(i)

(emphases added). EPA infers from that language that Congress intended for it

to require reporting only from manufacturers whose use of mercury in their

products or processes was deliberate. Because the persons exempted under 40

C.F.R. § 713.7(b)(2) import assembled products of which merely a component

contains mercury, EPA views such persons as categorically “unintentional” with

respect to the presence of mercury in their products.

      We are not persuaded. As a practical matter, the Reporting Rule

necessarily can generate reports only from individuals or entities who know that

their products contain mercury. An importer cannot report information about

mercury in its product if it is unaware of that mercury’s existence. So long as the

                                         31
importer knows that its product contains mercury, however, it acts intentionally

with respect to the presence of that mercury in its product, and the introduction

of that mercury into the United States market. As a categorical matter, an

importer of cars with mercury-added lamps in their headlights is no less

“intentional” about the presence of mercury in its product than an importer of

the lamps themselves: assuming that both importers are aware of the mercury’s

presence, the fact that one imports the component on its own and the other

imports it within an assembled product is irrelevant to question of their

comparative intentionality. And Congress clearly did not intend to exempt

importers altogether, given that it specifically defined the term “manufacture” to

include “import.” See 15 U.S.C. § 2602(9).

      Moreover, if EPA were correct that importers described in § 713.7(b)(2) are

categorically unintentional and therefore fall outside the universe of persons

from whom Congress intended EPA to collect reports, it would follow that EPA

lacks statutory authority to require such importers to report. As EPA’s counsel

clarified at oral argument, however, that is not EPA’s position. Rather, EPA

maintains that it could, if it chose to, require importers of assembled products

with mercury-added components to report. Its contention that Congress intended

                                        32
for it to exclude such importers is therefore untenable.

      To the contrary, Congress’s instruction to EPA to create and publish “an

inventory of mercury supply, use, and trade, in the United States,” 15 U.S.C.

§ 2607(b)(10)(B), evinces its affirmative interest in cataloguing both the nature

and extent of mercury use in the United States economy. Congress made clear

that it intends EPA to collect and publish information on mercury use in products

that are imported, as well as those that are manufactured domestically. See id.

§ 2602(9). To carry out its obligations under the TSCA, EPA must publish in its

inventory information regarding the types and quantities of imported products

that contain mercury; it must therefore require reports from all importers of such

products, absent an alternative source of information that renders such reporting

unnecessary or duplicative. EPA cannot accurately estimate the volume of

mercury introduced into the United States market within imported products if it

declines to catalogue a potentially significant swath of those products.

      Furthermore, if EPA does not collect data from all importers of assembled

products, its inventory may omit entire categories of imported products that

contain mercury-added components, if similar products either are not

manufactured in the United States or are manufactured here without the use of

                                         33
mercury. The record before us contains no information regarding the existence or

non-existence of any such categories of product. But that is exactly the point:

without a reporting requirement, one can only speculate about how significant or

insignificant the potential omissions may be. There is no reasonable basis for EPA

to conclude either that Congress did not care about imported assembled products

with mercury-added components, or that the quantity of such products or the

amount of mercury they contain is de minimis.

      b. Compliance Burden Rationale

      EPA also asserts that the exemption at § 713.7(b)(2) is based on a desire to

avoid imposing an undue burden on covered importers. EPA seems to invoke

three distinct kinds of costs related to compliance with the Reporting Rule: (1) the

cost of actual compliance, i.e., the costs to importers of filing reports; (2) the cost

of compliance determination, i.e., the burden of inquiring into the presence of

mercury in one’s products to determine if the reporting requirements apply; and

(3) the cost of inadvertent noncompliance, i.e., penalties for failing to file required

reports.

      None of these burdens is unique to importers of assembled products with

mercury-added components. EPA’s estimates of compliance costs distinguish

                                           34
only between the initial reporting cycle and subsequent reporting cycles; the

record contains no estimate that draws a distinction between the costs imposed

on different kinds of regulated persons to support its assertion of divergent

burdens. Beyond the bare assertion that compliance burdens weigh more heavily

in this context, EPA fails to establish that any of these burdens apply with special

force or are otherwise “undue” as applied to the importers subject to the

exemption.

      At oral argument, EPA alternatively framed its concern for the cost of

actual compliance as an effort to protect small “mom and pop” importers whose

limited financial means might make compliance with the Reporting Rule

particularly burdensome. Oral Argument at 33:38-36:00. Had EPA categorically

exempted small businesses on this theory, we might well find such an exemption

reasonable. Indeed, the TSCA instructs EPA that it “shall, to the extent feasible

. . . minimize the cost of compliance with this section and the rules issued

thereunder on small manufacturers and processors.” 15 U.S.C. § 2607(a)(5), (B).

But EPA expressly determined during its rulemaking process that “small

businesses are not exempt from reporting requirements.” Mercury; Reporting

Requirements for the TSCA Mercury Inventory, 83 Fed. Reg. at 30,069. It

                                         35
determined instead that it would fulfill its obligation to minimize compliance

burdens on small entities by developing tailored reporting instructions and

offering technical assistance and other specialized guidance. Furthermore,

nothing in the record suggests that assembled product importers subject to the

exemption in § 713.7(b)(2) are more likely to be small entities than any other class

of regulated manufacturers or importers. Accordingly, we can discern no basis in

the administrative record from which to conclude that the choice to excuse

importers, large and small, of products with mercury-added components from all

reporting requirements is rationally related to a desire to avoid imposing undue

burdens on small businesses.

      EPA also suggests that any compliance cost imposed on an importer of

assembled products is undue, because it interprets the TSCA “to only require the

identification of the types of products where mercury is intentionally added.” 83

Fed. Reg. at 30,065 (emphasis in original). EPA reasons that the reports collected

from manufacturers and importers of mercury-added components will provide it

with sufficient information on the types of assembled products (and components

included therein) that contain mercury. In other words, EPA knows that some

imported watches contain mercury in their batteries because it requires reporting

                                         36
from importers of the batteries themselves; therefore, on this theory, it is not

necessary for importers of watches that contain mercury-added batteries also to

report.

      Even if we assume (without accepting) that EPA may reasonably interpret

the TSCA to permit inventories that enumerate only “types” of mercury use, and

not quantities of mercury used,6 it does not follow that reporting from assembled

product importers would be unnecessary to such inventories. It is entirely

possible that foreign manufacturers might use mercury-added components in

“types” of assembled products that domestic manufacturers do not, and export

those assembled products to the United States. And if U.S. manufacturers do not

independently use the mercury-added components contained within those

imported assembled products, those foreign-made mercury-added components

6
 While we do not find it necessary to assess the reasonableness of this
interpretation of the meaning of “inventory,” we note that it appears to be
inconsistent with other aspects of EPA’s interpretation of the TSCA, such as the
Reporting Rule’s requirement that manufacturers report the “[a]mount of
mercury” used. See 40 C.F.R. § 713.9. If the task assigned to EPA were as limited
as its argument here suggests, the reporting requirements imposed on other
covered importers and manufacturers would be greatly reduced. As with the
desire to limit the burdens on small businesses, the purported authorization to
catalogue only the types of products that contain mercury has not been applied
by EPA across the board, but is brought out only in support of this particular
exemption.

                                         37
might not be imported separately, for use in products assembled in the United

States. An accurate inventory of “types” of mercury use would therefore need to

include information on imported assembled products with mercury-added

components. Without that information, the inventory might well omit “types” of

assembled products that contain mercury only in their imported forms and

“types” of mercury-added components that are not produced domestically and

are imported only when integrated into assembled products.7 We therefore reject

the premise that reporting by assembled product importers exempted under

§ 713.7(b)(2) is unnecessary to EPA’s fulfillment of Congress’s mandate and thus

unduly burdensome.

      EPA similarly fails to support its assertion that assembled product

importers would be unduly burdened by the cost of determining whether they

7
 Of course, the existence and number of any such products is speculative. Once
again, however, EPA cites no information that would support a conclusion that
such products do not exist, or that the amount of mercury that might be
introduced into the United States through such products is too small to justify a
reporting requirement. Its argument is entirely abstract, premised on the
proposition that Congress only wanted an inventory of types of products,
coupled with the conclusory assertion that reporting on imported products with
mercury-added components would not further such a limited inquiry. It is thus
EPA’s rationale that must be classified as speculative, and based purely on
assumptions not supported by the record.

                                        38
must report, because they are unlikely (at least as compared to other

manufacturers and importers) to know whether the products they import contain

mercury. EPA notes that its overall estimate of compliance costs includes the cost

of compliance determination, but it does not specifically identify how much of its

overall estimate is attributable to that aspect of compliance. Without record

evidence that supports EPA’s theory, we cannot see how the task of determining

whether one’s product contains mercury imposes anything more than a minor

burden. Some regulated persons may already know that their product contains

mercury, either because they added it to the product or because they were told;

other regulated persons may need to inquire of the manufacturer or supplier

from whom they acquire products, components, or materials whether those items

contain mercury. The latter group admittedly bears a “burden” that the former

group does not, but it is merely the burden of asking a question. And there is no

particular reason to assume that importers of products with multiple components

(say, automobiles) will find it any more difficult to ask their foreign supplier

whether those products include mercury-added components than importers of

products that will ultimately be used as components of larger or more

complicated products here in the United States (for example, lamps used in

                                         39
automobile headlights), who are not exempted from that burden.8

      Finally, EPA suggests that the cost of inadvertent noncompliance may

unduly burden importers of assembled products with mercury-added

components, because the TSCA provides for both civil and criminal penalties for

persons who fail to comply with reporting obligations.9 But the TSCA imposes

criminal penalties for noncompliance only on persons who “knowingly or

willfully violate[]” the statute, and it instructs EPA to take into account “the

nature, circumstances, extent, and gravity of the violation” and the violator’s

“ability to pay” and “degree of culpability,” among other factors, in

administering civil penalties. See 15 U.S.C. § 2615(b)(1), (a)(1), (a)(2)(B). Thus,

inadvertent violators are exempt from criminal penalties and exposed to civil

penalties only inasmuch as EPA determines them to be culpable. The specter of

undue penalties for inadvertent violators therefore amounts to a spurious

8
 We also see no reason to assume that importers exempted under § 713.7(b)(2)
are particularly unlikely to know that their products contain mercury. Many such
importers may be affiliates of the foreign manufacturers who produced the
mercury-added component; others may be sufficiently aware of the specifications
of the products they import to know the chemicals that those products contain.
9
 This rationale again assumes, without support, that importers who are
exempted under § 713.7(b)(2) are particularly unlikely to know that their
products contain mercury.

                                          40
concern that EPA will itself misapply the statutory standard and impose

unreasonable penalties on this particular category of importers.

      We cannot discern any reasoned basis for EPA to exempt importers of

assembled products with mercury-added components from the Reporting Rule’s

requirements. The reporting that would occur absent § 713.7(b)(2) would not be

contrary to congressional intent; nor would it be duplicative, unnecessary, or

unduly burdensome. We conclude that the importer exemption codified at

§ 713.7(b)(2) is not “supported by a reasoned explanation” and therefore does not

demand deference. See Catskill Mountains, 846 F.3d at 507. We therefore grant

review of this provision and set it aside.

      IV.    High-Volume Manufacturer Exemption

      Petitioners also contend that the partial exemption at 40 C.F.R. § 713.9(a)

for “[p]ersons who manufacture (including import) mercury in amounts greater

than or equal to 2,500 pounds (lbs.) for elemental mercury or greater than or

equal to 25,000 lbs. for mercury compounds” is unlawful. Section 713.9(a)

provides that persons who manufacture mercury in amounts at or above the

specified quantities must report only the amounts of mercury “stored” and

“distributed in commerce,” whereas all other manufacturers must also report the

                                         41
amounts manufactured, imported, and exported. Compare id. § 713.9(a), with id.

§ 713.9(b). EPA contends that it designed § 713.9(a) to avoid duplicating the

reports that it already requires and collects from high-volume manufacturers

under the CDR Rule. See 40 C.F.R. pt. 711.

      Petitioners argue that this partial exemption in § 713.9(a) is both the

product of a flawed decision-making process and contrary to the TSCA. For the

reasons explained below, we disagree and deny review of § 713.9(a).

      A. Adequacy of Rulemaking Procedure

      “[W]here a litigant brings both a State Farm challenge and a Chevron

challenge to a rule, and the State Farm challenge is successful, there is no need for

the reviewing court to engage in Chevron analysis. . . . In other words, if an

interpretive rule was promulgated in a procedurally defective manner, it will be

set aside regardless of whether its interpretation of the statute is reasonable. If the

rule is not defective under State Farm, though, that conclusion does not avoid the

need for a Chevron analysis . . . .” Catskill Mountains, 846 F.3d at 522. We therefore

begin by assessing petitioners’ challenge to EPA’s rulemaking procedures.

      Petitioners contend that EPA based § 713.9(a) on an irrational cost-benefit

analysis: it allegedly chose to forgo important informational benefits in order to

                                          42
save high-volume manufacturers from the minimal costs of complying with some

(but not all) reporting requirements. But EPA disclaims reliance on cost-benefit

analysis, arguing that the partial exemption is based entirely on its finding that

requiring full reporting under both the Reporting Rule and CDR Rule would be

duplicative.

      The record supports EPA’s assertion that it relied on a finding that the two

rules would yield comparable information, absent some exemption. The CDR

Rule requires that “any person who . . . manufactured (including imported) for

commercial purposes” at least 25,000 pounds of mercury compound or 2,500

pounds of elemental mercury must report the “total annual volume [of mercury]

. . . domestically manufactured or imported at each site,” as well as “the volume

used on site and the volume directly exported.” 40 C.F.R. § 711.15, (b)(3)(iii),

(b)(3)(iv); see id. § 711.8(a)(2), (b). The Reporting Rule provides that “[p]ersons

who manufacture (including import) mercury in amounts” of at least 25,000

pounds of mercury compound or 2,500 pounds of elemental mercury must report

the quantities “stored” and “distributed in commerce,” but not the total amounts

“manufactured,” “imported,” or “exported.” Id. § 713.9(a), (b).

      Petitioners argue that requiring high-volume manufacturers to report

                                          43
(without exemption) under both rules would not be duplicative, because the two

rules operate on different schedules for data collection.10 Because of the different

reporting timelines, three out of every four mercury inventories that EPA

publishes will include less recent data from high-volume manufacturers than

from other reporting entities. But discrepancies in the timing of reporting do not

undermine EPA’s conclusion that the content of the two sets of reports would be

sufficiently comparable to render the reports duplicative.

      The Reporting Rule’s exemption applies to exactly the same manufacturers

who are subject to the CDR Rule’s reporting requirement, and it exempts them

from reporting information that closely tracks that which the CDR Rule requires

them to report. Thus, EPA’s reliance on Congress’s mandate to avoid requiring

duplicative reporting, where feasible, see 15 U.S.C. § 2607(a)(5), is “a satisfactory

10
  The TSCA requires that EPA publish its mercury inventory every three years,
beginning in 2017. 15 U.S.C. § 2607(b)(10)(B). The Mercury Reporting Rule,
designed to facilitate that triennial inventory, sets out a reporting and publication
schedule under which the most recent data reflected in the inventory is data from
two calendar years prior. (In other words, the inventory published in 2020 will
include data through calendar year 2018; the inventory published in 2023 will
include data through calendar year 2021.) 40 C.F.R. § 713.17. The CDR Rule
requires that manufacturers report every four years, beginning in 2016, on
mercury use through the preceding calendar year. (Thus, in 2020 manufacturers
will report data from 2016-2019.) Id. § 711.20.

                                          44
explanation for its action” that includes “a rational connection between the facts

found and the choice made.” Encino Motorcars, 136 S. Ct. at 2125 (quoting State

Farm, 463 U.S. at 43). We therefore do not find § 713.9(a) to be arbitrary or

capricious as a result of defective rulemaking processes.

       B. Reasonableness of § 713.9(a)

       Petitioners also challenge § 713.9(a) as an unreasonable interpretation of

TSCA’s directions that “any person who manufactures mercury or mercury-

added products . . . shall make periodic reports” and that EPA “shall, to the

extent feasible . . . not require reporting which is unnecessary or duplicative.” 15

U.S.C. § 2607(b)(10)(D)(i), (a)(5), (A). Because this claim pertains to the

reasonableness of EPA’s initial interpretation of the amended TSCA, we evaluate

the provision under the Chevron framework. See Catskill Mountains, 846 F.3d at

521.

       Our analysis at the first step of the Chevron inquiry mirrors that which we

applied, above, to the assembled product provisions. Contrary to petitioners’

claims, the TSCA’s requirement that “any person who manufactures mercury or

mercury-added products . . . shall make periodic reports,” 15 U.S.C.

§ 2607(b)(10)(D)(i), does not preclude EPA from determining what information is

                                          45
required, id., or from creating exemptions for categories of manufacturers or

importers of mercury from making reports that it reasonably determines would

be unnecessary or duplicative, id. § 2607(a)(5)(A). Furthermore, the exemption for

high-volume manufacturers is partial rather than categorical: manufacturers

subject to the exemption are still obligated to report some information under the

Reporting Rule. See 40 C.F.R. § 713.9(a). Therefore, even if the TSCA did preclude

EPA from completely exempting manufacturers who meet its definition, it is far

from clear that it would also foreclose § 713.9(a). The provision is not

unambiguously contrary to the statute. Nor does the TSCA unambiguously

require this specific partial exemption for high-volume manufacturers: the TSCA

makes no mention of the CDR Rule, and EPA might have reasonably determined

that reports from manufacturers subject to the CDR Rule were necessary to its

inventory, notwithstanding those manufacturers’ preexisting reporting

obligations. Accordingly, we conclude at Chevron Step One that § 713.9(a) is

neither unambiguously precluded nor required by the statutory text.

      At Chevron Step Two, we examine whether § 713.9(a) is “based on a

permissible construction of the statute.” Kilgour v. SEC, 942 F.3d 113, 122 (2d Cir.

2019) (internal quotation marks omitted). Petitioners argue that the amounts of

                                         46
mercury manufactured, imported, and exported can vary considerably from year

to year. But notwithstanding this variance, petitioners do not establish that the

asynchrony between the reporting obligations under the Reporting Rule and the

CDR Rule will so significantly distort the results of the triennial inventory as to

make the Reporting Rule’s partial exemption for high-volume manufacturers

unreasonable.

      Considering the substantial overlap between the information that high-

volume manufacturers must report under the CDR Rule and the information that

the same manufacturers would be required to report under the Reporting Rule,

absent § 713.9(a), we find that the partial exemption for such reporters is a

reasonable interpretation of EPA’s obligation “not [to] require reporting which is

. . . duplicative,”15 U.S.C. § 2607(a)(5)(A), “to the extent feasible,”id. § 2607(a)(5).

Accordingly, we deny review of 40 C.F.R. § 713.9(a).

                                   CONCLUSION

      For the reasons stated above, we DENY REVIEW of the exemption for

manufacturers of assembled products with mercury-added components at 40

C.F.R. § 713.7(b)(3) and the partial exemption for high-volume manufacturers at

40 C.F.R. § 713.9(a), and we GRANT REVIEW of and VACATE the exemption for

                                           47
importers of assembled products with mercury-added components at 40 C.F.R.

§ 713.7(b)(2).

                                     48