The U.S. Court of Appeals for the Fifth Circuit has vacated EPA's entire methylene chloride risk management rule in a September 2026 decision that resets the legal standard for chemical regulation under the amended Toxic Substances Control Act (TSCA).

The stakes are material. U.S. production of methylene chloride ran between 100 million and 500 million pounds per year from 2016 to 2019, according to figures cited in the court's opinion, with uses spanning vapor degreasing, metal cleaning, refrigerant production, adhesive removers, paint strippers and laboratory solvents. Up to 35% of that volume served pharmaceutical applications, which TSCA does not regulate. The vacated 2024 rule had prohibited 40 of 53 assessed conditions of use, including every consumer product containing the solvent, and imposed a Workplace Chemical Protection Program on the remaining 13 uses, with exposure limits of 16 ppm for 15-minute acute exposure and 2 ppm for an eight-hour chronic exposure.

All of that regulatory architecture is now gone.

What the court held

The three-judge panel went beyond a narrow procedural ruling. It stated plainly that "Congress did not enact TSCA as a zero-risk statute" and that "unreasonable risk is not a factual finding but a prudential baseline set by the statute." The holding means EPA must set standards that permit some residual risk when it returns to the rulemaking table — the first substantial appellate guidance on what the 2016 TSCA amendments' central term actually requires.

The court found that "errors of law occurred and substantial evidence did not support EPA's decision," and it dismantled the rule's methodological foundations on three fronts.

First, it rejected EPA's "whole chemical" approach to risk determination. The amended TSCA requires risk findings for individual conditions of use — how a chemical is made, sold, used and disposed of. The whole-chemical method had led EPA to recharacterize six uses as presenting unreasonable risk after its own 2020 evaluation, conducted under the first Trump administration, had found no unreasonable risk for those uses. That 2020 evaluation had identified 47 of 53 conditions of use as presenting unreasonable risk.

Second, the court sharply criticized EPA's assumption that workers use no personal protective equipment. The Biden-era rule reversed the agency's prior position, which assumed PPE compliance under existing OSHA requirements. The court called EPA's "speculation that workers may not be using PPE" unsupported by evidence, contrary to TSCA's "particularly demanding" substantial-evidence standard. The no-PPE assumption had produced sharply higher exposure estimates and drove the final exposure limits well below OSHA's existing thresholds.

Third, the court rejected EPA's exposure estimates as overly conservative. In its acute estimate, EPA discounted several relevant human studies and relied exclusively on a study observing 12 people for four hours. Its chronic estimate rested on a single rat study rather than comprehensive human data. TSCA requires the agency to base decisions "on the entire record, taking into account whatever in the record detracts from the weight of the agency's decision," the court wrote, adding that EPA must recognize the "very limited usefulness of animal studies when confronted with questions of toxicity … for human beings."

The precautionary principle, rejected

The decision's most consequential passage may be its refusal to defer to EPA's technical expertise on what counts as "unreasonable." The court ruled the question is legal, not technical, because Congress set the baseline in the statute itself. It then went further:

"Unreasonable risk" does not incorporate any precautionary principle… and courts must not infer a precautionary principle from unclear statutory text. The precautionary principle, taken seriously, can multiply an agency's power over the economy. It allows an agency to regulate or veto activities even if it cannot be shown that those activities are likely to produce significant harms.

That language reaches well beyond methylene chloride. It supplies a doctrinal anchor for challenges to every risk management rule EPA has built or plans under the 2016 amendments.

The litigation record

Industry petitioners — including the American Chemistry Council, East Fork Enterprises and Epic Paint Company — argued EPA exceeded its authority and that its conclusions were arbitrary, capricious and unsupported by substantial evidence. The Sierra Club filed a separate petition claiming EPA did not go far enough, arguing its risk assessment ignored risks to vulnerable populations. The court denied the Sierra Club's petition, finding EPA had adequately considered vulnerable populations.

Notably, before oral argument, the Trump EPA informed the court it no longer defended either the whole-chemical approach or the no-PPE assumption. The court decided the issues anyway, leaving the vacatur on the books as precedent.

What happens next

EPA must now rewrite the methylene chloride rule under constraints the agency has never operated with before: condition-of-use-specific risk findings, record-wide evidence review, and exposure assumptions that account for PPE and human data. Any replacement rule will face the same substantial-evidence test this rule failed. The decision also hands challengers a ready framework against other TSCA risk management rules now in the pipeline — including the parallel rulemaking for the same class of chlorinated solvents. Whether EPA appeals to the Supreme Court or reopens rulemaking determines the timeline; either path, the next filing deadline is the milestone that decides whether the vacated limits stay dead or get rebuilt on narrower grounds.