Lawyers say a U.S. Environmental Protection Agency drive to collect scientific data from companies using nanotechnology materials has their clients concerned about confidentiality and possible disclosure of unwitting violations of federal law.

Also, attorneys note that a weak response to the EPA program — which is voluntary — could open the door to a patchwork of confusing local laws that could vex companies across the nation. In fact, some local governments are already launching their own ordinances seeking information on the use of "nanomaterials."

But attorneys add that the EPA's Nanoscale Materials Stewardship Program, which started on Jan. 28, could provide a positive benefit for business by arming them against future products liability lawsuits. Companies can use their adherence to government safety standards and use of warning labels as a defense, lawyers note.

The program is asking companies to voluntarily submit within six months basic information about nanoscale materials they use, including their chemical and physical properties, hazard information, worker and other human exposure, whether the company releases the materials to the environment and the company's risk-management measures.

Nanoscale materials, or nanoscale chemical substances, are microscopic and can have properties that are different from full-size counterparts. Those differences offer the potential for product improvement but can also involve unknown risks. Nanomaterials are currently used in a wide range of products, from cosmetics to paint additives.

The EPA also hopes to collect more detailed information, including testing data, over two years.

DuPont on board

Chemical manufacturer E.I. du Pont de Nemours & Co. jumped on board early with a Jan. 29 stewardship program submission about a product that offers sun protection for plastics and contains nanoscale particles. The company is "fully supportive" of the program, said DuPont global regulatory affairs director Terry Medley.

Nanotechnology issues are also starting to surface in congressional hearings. Representative Albert R. Wynn, D-Md., chairman of the Energy and Commerce Committee's subcommittee on the Environment and Hazardous Materials, announced last December that he plans to hold a hearing this year on the "serious gaps in the current statutory and regulatory framework" for nanomaterials.

The EPA's stewardship program is a kind of announcement of upcoming regulation, said Lee A. DeHihns III, a partner in the environmental and land-use group at Atlanta-based Alston & Bird and chair of the American Bar Association's Section of Environment, Energy and Resources.

"Once they start down this path, most people think it's going to lead to regulation," DeHihns said.

Alston & Bird is talking to clients about the possibility of participating, which can help the EPA make responsible regulatory decisions, DeHihns said.

Nixon Peabody is telling clients that regulation of nanomaterials is "in the cards" and is advising companies on how to take part in the EPA program without giving away business secrets, said Boston energy and environmental partner Don Cooper.

"Companies that are developing new materials have business confidentiality concerns," Cooper said. The stewardship program has outlined provisions for submitting confidential business information, but companies that have invested significant time and effort into developing nanosubstances are protective of their information and want to make careful submissions, Cooper said.

The EPA has made it clear that it will use its authority under the Toxic Substances Control Act to keep information confidential, said John DiLoreto, director of the Nanotechnology Small and Medium Enterprise Coalition at Washington-based Synthetic Organic Chemical Manufacturers Association.

"Companies feel very confident they can work this through because [the agency] has been forthright," DiLoreto said.

Fears about disclosing information that could trigger EPA penalties are higher on the concern list than confidentiality.

John Monica Jr., a Washington attorney and nanotechnology expert at Columbus, Ohio-based Porter Wright Morris & Arthur, said that his clients are less focused on the stewardship program and more focused on filing premanufacture notification for nanomaterials not on the recently revised Toxic Substances Control Act chemical substances inventory list.

Chemical substances not on the list are considered new chemical substances, and companies that have been using those substances for a while need to quickly make filings, Monica said.

"If you voluntarily submit data [for the stewardship program] you may find yourself getting notices that the substance you've submitted is not on the inventory," Monica said.

That's a problem because the EPA has indicated that there's no safe harbor, or release from liability, for violations revealed during the stewardship program. The agency will look at situations on a case-by-case basis, Monica said.

"There is concern, but it's not black and white," Monica said.

In an e-mailed statement, the EPA said it would conclude whether new regulations are needed both during the two-year stewardship program period and at the end.

Technology watchdog groups such as Washington-based International Center for Technology Assessment said that asking for data isn't enough because there is "no impetus for industry to participate," said staff attorney George Kimbrell.

"Our view of voluntary programs is that they have a very dismal track record of working and forestall or delay necessary, mandatory regulation," Kimbrell said.

The EPA countered that it expects a strong response because several trade groups back the program, including the American Chemistry Council Inc. and the NanoBusiness Alliance.

It plans to evaluate responses at the six-month mark to decide whether the agency "needs to use its information-gathering authority" to "fill any data gaps," according to an agency spokeswoman.

The agency also said it's already regulating new chemical nanoscale materials under Toxic Substances Control Act rules governing the use of new chemical substances. More than 30 new chemical notices for nanoscale materials have been filed with the EPA since 2005.

The technology center has waged a similar battle against the U.S. Food and Drug Administration (FDA) since 2006, when it led a coalition that filed a legal petition demanding nano-specific regulation. [NLJ, 8-27-07.]

Desire for certainty

Foley & Lardner's Michael Pontrelli believes that EPA regulations are far from imminent, but the Boston litigator and environmental regulation practices lawyer said that companies' desire for certainty will propel them to get involved with the EPA's program.

"Some companies pursuing nanotechnology may prefer to plan knowing sooner rather than later what any future regulatory regime might look like," Pontrelli said.

Government regulations can also help companies fight lawsuits, said Peter Hsiao, who heads Morrison & Foerster's land use and environmental law group in Los Angeles.

"There will be potential product liability civil actions brought for any new product that hits the market," Hsiao said. "Demonstrating that you've complied with a government standard [can help] in mitigating the risk of civil action."

Yet Wilmer Cutler Pickering Hale and Dorr's James Votaw, a Washington-based counsel to the firm's environmental department, conceded that the EPA's decision to seek voluntary information is somewhat risky because low industry participation would open the door to piecemeal and "overbroad" local and state oversight.

"It would be difficult for localities to tailor an ordinance to areas were there really are concerns, and to have the information to know which ones those are," Votaw said.

The city of Berkeley, Calif., adopted a manufactured nanoscale materials disclosure ordinance requiring companies that make or use such materials to submit information by June 2007 on the materials' toxicity, the company's worker and environmental protection, and how the company's control measures align with the particular nanoscale material's potential for toxicity and exposure.

So far, two private companies and two university-related entities have submitted information, said Berkeley's hazardous materials manager, Nabil Al-Hadithy.

Bayer Laboratories in Berkeley confirmed that it submitted confidential paperwork to comply with the city's regulations, said Bryan Iams, a spokesman with parent company Bayer Corp., a Pittsburgh maker of pharmaceuticals, agricultural crop products and manufacturing materials.

"Nanotechnology is a part of all of our businesses, but I can't give any details," said Iams.

In the wake of Berkeley's move, the city of Cambridge, Mass., formed a Nanomaterials Advisory Committee to examine Berkeley's ordinance "and recommend an appropriate ordinance for Cambridge," according to a January 2007 City Council order.

Cambridge is considering whether it needs an ordinance for nanotechnology similar to a 1977 Cambridge Recombinant DNA Technology Ordinance, said Monica, a member of the nanotechnology committee. The DNA ordinance, which Cambridge touts as the first city ordinance to provide for oversight of research of recombinant DNA, or a type of artificial DNA, now covers 64 institutions or companies with permits.

Monica said the committee, which includes industry representatives, consultants, lawyers, academics and citizens, plans to make a recommendation to the city manger next month.

In Wisconsin, state Assemblywoman Terese Berceau, a Democrat, wants a nanomaterials registry with information about the materials' toxicological properties, how entities will monitor, contain, dispose of and track manufactured nanoparticles and the companies and organizations' prevention and mitigation plans for accidental releases.

Berceau said the registry is important because the EPA has been "very slow" to regulate nanomaterials. "If the national government isn't going to do something, I think the states should," Berceau said. "I think we need to have some idea of what's going on. We have to be ready for adverse consequences of research or manufacturing using nanoparticles."