Appendix — C.P. Chemical Co. v. Commissioner of Public Health

83-333

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1983 ©

©)

C.P. CHEMICAL COMPANY, INC., Appellant, ake

V. 7

COMMISSIONER OF PUBLIC HEALTH, Appellee. Gq?

ON APPEAL FROM THE MASSACHUSETTS SUPREME JUDICIAL COURT

APPELLANT'S PARTIAL APPENDIX

7 Joseph Semo *

$ Glenn M.

Clifford J. Zatz

Jeffrey K. Sherwood

SEIFMAN, SEMO & SLEVIN, P.C.

1000 Potomac Street, N.W.

Suite 204

INDEX TO PARTIAL APPENDIX

Tab

Findings, Rulings, and Order of the

Superior Court for the County of

Suffolk, Massachusetts D

The Summary of the Evidence and Findings

and Conclusions Concerning Formaldehyde

and UFFI of the Massachusetts Commissioner ©

of Public Health

C.P. Chemical Company, Inc.'s Petition for

Rehearing before the Massachusetts Supreme

Judicial Court F

The Supreme Judicial Court's Denial of C.P. Chemical

Company, Inc.'s Petition for Rehearing G

Memorandum to Local Board of Health from

David Kinloch, M.D., Deputy Commissioner,

Mass. State Dept. of Public Health H

Letter to David Kinloch and Lawrence Buxbaum I

Superior Court Trial Exhibit 52 J

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COMMONWEALTH OF MASSACHUSETTS

SUFFOLK, ss. SUPERIOR COURT

Nes. 38,508-38,473

41840,49725, 46687

BORDEN, ET ALS

VS.

COMMISSIONER OF PUBLIC HEALTH

FINDINGS, "PULINGS +} ORDER

STATEMENT OF THE CASE

These cases were previously consolidated and’ were the subject of a

protracted viaL Each case involves the common issue, i.e. the validity of

certain regulations promulgated by the Commissioner of Public Health. The

first set of regulations is entitied "Regulations Concerning Hazardous

Substances" and was issued on November 14, 1979. The second set is entitled

"Regulations Concerning Repurchase of Banned Hazardous Substances” and that set

of regulations was issued on November 20, 1930.

Briefly stated, the Commissioner bans all residential future sales of urea

icomaldenyde toamed- in- place insulation (hereinafter UFFI); and creates an

acministrative procedure whereby homeowners who have suffered any of certain

symptoms may secure an order from the Department of Public Health requiring the

installer, distributor, or manufacturer to remove it, refund the purchase price and

restore the heme. The cost of removal and restoration is very significant.

In Suffolk numbers 38508 and 38673, Borden and C.P. Chemical, two

manufacturers, many contentions are made. First, regulation invalidity because of

failure to afford an adjudicatory hearing. This contention is grounded in statutory

construction as well as constitutional principles. Second, if che plaintiffs were not

snuitled to a prior gadjudicatory hearing, then, as a matter of right, they are

entitled to a judicial review-not limited to any agency record.

In this argument they are joined by the Formaldehyde Institute in Suffolk $1340.

The focus of Berkshire Gas (49725) as well es the Anderson case (46647) is

solely upon the repurciase regulations and upon the significant [abilities that they

will sustain if these regulations are upheld. However, these plaintiffs share with

the manufacturers, at least as to repurchase, the contention that an adjudicatory

hearing prior to the regulation is required and they also share the contention of

constitutional due process deprivation. All and each of the plaintitts have

advanced numerous other contentions.

Discussion

Certain initial observations seem appropriate. 5ecause of the factual

complexity, the findings of fact have been divided under particular headings to

permit an easier understanding by the parties and examination by an appellate

reviewer. With respect to the rulings of law I have attempted to avoid any

extended discussion but this was not always possible.

FINDINGS OF FACT

I

PARTIES

L Plaintiff, Formaldehyde Institute, is a voluntary association comprised of

some 62 companies who manufacture or use formaldehyde or formaldehyde-based

materials. The Formaldehyde Institute operates through several committees,

inciuding a Medical C:, mittee and a Technical Committee. The principal. offices

of the Formaldehyde Institute are located in Scarsdale, New York.

2. Plaintiff Dodge Chemical Company ("Dodge Chemical"), is a corporation

duly organized under the laws of the Commonweaith of Massachusetts with its

principal place of business located in Cambridge, Middlesex County, Massachusetss.

Dedge Chernical is engaged in the manufacturing, sale and distribution of

embalming chemicals. Dodge Chemical is a user of formaldehyde and is a member

of the Formaldehyde Institute.

3. Plaintiff, Hardwood Plywood Manufacturers Association ("HPMA"), is a

corperation duly organized under the laws of the State of Illinois with principal

offices in Reston, Virginia. HPMA is a national trade association composed of

some 170 companies manufacturing building supplies such as hardwood plywood and

suppiiers té6 mat incustry. The products manufactured, such as plywood, contain

formaldehyde and formaidehyde-besed resins. Members of HPMA do business in

Massachusetts. HPMA is a member of the Formaldehyde Institute.

&. Plaintiff, E.L du Pont, de Nemours and Company ("DU PONT"), is a

corporation duly organized under the laws of the State of Delaware with principal

effices in Wilmington, Delaware. DU PONT manuéactures and seils formaidehyde

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and formaldehyde-besed products such as paint and plastics. DU PONT does

business in the Commonwealth of Massachusetts and has offices in the

Commonwealth. OU PONT is a member.of the Formaldehyde Institute.

_5. Plaintiff, Celanese Chemical Conpeny, Inc. ("Celanese"), is a

corporation duly organized under the laws of the State of Texas with principal

offices in Dallas, Texas. Celanese manufactures formaldehyde. Celanese does

business in the Commonwealth and has offices in the Commonwealth. Celanese is

a member of the Formaldehyde Institute.

. 6. Champion International Corporation ("Champion") is a corporation duly

organized under the laws of the State of New York with principal offices in

Stamford, Connecticut. Champion manufactures and sells building materials.and

paper products, many of which contain formaldehyde and formaldehyde-based

resins. Champion does business in the Commonwealth and has offices here.

Champion is a member of the Formaldehyde Institute.

7. The Manufactured Housing Institute, Inc. ("MHI") is a non-profit

corporation duly organized under the laws of the State of Ilinois with principal

offices in Arlington, Virginia. MHI is a national trade association of manufacturers

of mobile homes and suppliers to that industry... Formaldehyde and urea

formaldehyde-based resins are used to manufacture products, such as

particleboard, used in the manufacture of mobile homies a well as in site-duilt

x yt nial Memoers iil Gy Lualvess er Massachusetts. MST is e member af the Batre

Formaldehyde Institute.

3 Plaintiff, Georgia-Pacific Corporation (“Georgia-Pacific”), is a

corporation duly organized under the laws of the State of Georgia with principal

offices in Portiand, Oregon. Georgia-Pacific manufactures building materials and i

paper products, many ef which contain formaidehyde-based resins.

;

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Georgia-Pacific is a member of the Formaldehyde Institute.

9. Plaintiff, Weyerhaeuser Company ("Weyerhaeuser"), is a corporation duly

organized under the laws of the State of Washington with. principal offices in

Tacoma, Washington. Weyerhaeuser manufactures building materials and paper

products including building materials containing urea formaldehyde resins.

Weyerhaeuser does business in Massachusetts and has offices. in Massachusetts.

Weyerhaeuser is a member of the Formaldehyde Institute.

10. Plaintiff, Borden, Ine. ("Borden"), is a corporation duly organized under

che laws of the State of New Jersey with principal offices in Columbus, Ohio.

Serden manufactures formaldehyde. In addition, Borden manufactured the

components for a urea formaldehyde foamed-in-place insulation ("UFFI") sold in

‘Aassachusetts under the registered trademark, Insulspray. Borden ceased

manicacturing UFFI in the United States on December 31, 1978.

i. C. P. Chemical Company ("C.P. Checmical") is a family-owned and

conwollied small business enterprise, located in White Plains, New York, which

maenutaccures, among cther items, the resin and foaming agent for a series of foam

imsulaticn products marketed under the name of Tripolymer.

12 Plaintiff Anderson Foam Distributors is a Massachusetts Corporation

having an usual place of business in Abington, and has been in the business of

S-sualling insulation in both residential and commercial structures.

13. Plaintiff Berkshire Gas Company is a Massachusetts Corporation, a

pubic udlity serving the western portion of the state and which purchased UFFI

and contracted with many of its customers, and others, to install the insulation in

Tes hemes.

jt, The sole defendant Alfred L, Prechetts is the duly. appointed

Ssxmidsioner ef the Department of Public Hedith ‘fer the Cammonwealtr of .

‘A assachusetts. > | re fe

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THE NATURE AND- PRESENCE OF FORMALDEHYDE

Formaldehyde, a colorless, gaseous compound of carbon,

hydrogen and oxygen (HCHO), {s omni-present. It is found in

the atmosphere, where it is continuously introduced through a

variety-‘of natural processes. When sunlight strikes plant life,

there {is a photochemical generation, and formaldehydes and other

aldehydes are directly released into the air. These are rapidly

reacting molecular products. Because of a high water solubility,

formaldehyde is transferred in rain, surface water and oceans.

This. reactivity is, however, indicative of a short life span in

an irradiated lower atmosphere. It is biodegradable.

Man also injects formaldehyde directly into the atmosphere.

Approximately six pounds of formaldehyde is produced during the

combustion of 1,000 pounds of automobile gasoline, and the exhausts

of automobiles measured during operation have registered discharge

_ Of twenty-nine to forty-three parts formaldehyde per million parts

of air. Also, formaldehyde is emitted from many manufacturing,

industrial and power plants. Indeed, it is a by-product of any

machine or other burning in which hydrocarbon fuels or substances

,. are incompletely burned. Therefore, even the home gas stove or

the use of cooking oils will produce free formaldehyde. In sum,

aldehydes are introduced into the ambient air as a result of

photoxidation.. of both naturally occurring and anthropogenic

hydrocarbons.

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: alcehyde usually consisting of between a third and three-fourths

: @tmosphere, formaldehyde hes been measured at levels ranging

| from .005 to .008 in rural ambient air, to levels ranging up

' $0 .2 parts per million in urban outdoor air.

i of formaldehydes and other aldehydes (formaldehyde is the sail

Formaldehyde is present in certain fruits and vegetables;

Zor example, apples and potatoes.

Additionally, formaldehyce 4s found in all mammals, and

specifically within the human body. It is-one of the substances

produced by the human system during metabolism, although it does

act accumulate, but is rapidly metabolized. Persons who smoke

introduce significant levels of formaldehyde, up te forty parts

per million, in their immediate environment.

Therefore, in any environment, there are ambient concentrati

of the aggregate present) and these concentrations depend on

Sscch their rates of formation and the-:subsequent penevel

seactions that occur, Obviously, urban atmosphere concentrations

arte generail appreciably greater than rural areas. These

concentrations are usually measured on @ part per million parts

of ambient air basis. In most in-door environments, twenty-four

hour average formaldehyde concentrations of 0,05 to 0.2 per

million parts are not uncommon today. With respect to the

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THE NATURE OF AND PRESENT COMMERCIAL

SIGNIFICANCE OF UREA FORMALDEHYDE RESIN

Commercially, aldehydes are produced at a rate of several

billion pounds a year in the United States. Formaldehyde is

the most commercially significant and is prepared in a thirty-

seven to fifty percent aqueous solution at a rate of over

eight (8) billion pounds a year. About half of that production

ts used in the preparation of wrea formaldehyde and phenol

the condensation reaction between urea and formaldehyde was

reported tefore the year 1900.

These resins are used in the production of plywood, perticle-

board, foam insulation, and a wide variety of molded or extruded

plastic ati. Another twenty-five percent of the formaldehyde

produced is used in other resins or polymers, end is used in

disinfectants, textile treatment agents, and in leather

processing and dye manufacture. A partial list of presently

manufactured products in common use in, which a formaldehyde”

polymer is utilized includes Se fungicides, clothing,

cleansers, textiles, waterproofing, fur, wood and leather

preservers, lacquers, varnishes, papers, film, glues and

adhesives, dyes, drugs, ladies' cosmetics and deodorants.

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; cséeed, it is the formation of resinous products on reaction

S with other chemicals which is the most useful characteristic of

t formaldehyde. It is the reason for its immense importance in

the synthetic resin industry. |

Under suitable conditions, the molecules of many different

ccopounds may be linked together by methylene groups when

subjected to the action of formaldehyde. Phenol and ures

Pcomaidehyde resins are polymethylene compounds of this type.

| trea formaldehyde resin is a mixture of products from the

condensation between the two, The resultant structure -beyond

sane 2irst stages of condensation is complex. Probably two

CisSinct processes are involved in this polymerizatian. The

s<suctwe of the resin beyond the first stages is not well known. ,

Formaldehyde is present in a variety of forms. Three types of

conbined formaldehyde are methylol end groups (ECE, -W/CH,0H )

¢imethylene ether bridges (WH-/ CH, OCH, / NE) and methylene tridges

(x= /Ce, wz). Methylol end groups are the most reactive of the |

cocbined forms of formaldehyde. Dimethylene ether tridges are

Less reartive than mathylo} and ermps. Methylene bridge

cleavages are the most stable and are split only when heated

_ Wich @ very strong mineral acid.

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THE NATURE OF UFFI AND OTHER FINDINGS

CONCERNING THIS INSULATION

The original use of polymerized urea and formaldehyde to

generate a plastic foam was developed .in Germany in 1933. These

foams were introduced as insulation materials in 1958, and have

been used exténsively in northern Europe since the early 1960s.

It was only after the Arab oil embargo in 1974 that urea

formaldehyde foam insulatton was energetically marketed in the

reliable compilations which set forth the number cf installations

either within tits Commonwealth or within these United States.

However, it can factually be safely stated that; 1.) UFFI was

marketed with increasing success in 1975, 1976 and 1977, and

the sales nationally increased in each of those years, and in

1978, there was a significant falling off; and 2.) that at least ,

approximately four hundred thousand residences within the United

States have been insulated with UFFI. |

In the production of urea formaldehyde foam insulation (UFFI

@ ures furmslieliyde resin is used, This is the sous type of

resin used as adhesives {n such products as plywood and

particleboards and many paper products. The foam has three

components, the polymerized urea formaldehyde resin, @ foaming

; @gen= which is usually calied a surfactant, and air. The product

. £s generated on the job site, using portable equipment. It

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requires an air compressor and a mixing or foaming gun. The

Sceming agent, which usually contains an acid catalyst, is pumped

imo the gun, where air mixes with it to form smail bubbles.

These bubbles shen are ccated with he tesin, which is introduced

into the gun by @ separate line. Thereafter, the resin coated

bubbles are forced out of the gun or tube, an@ the resin, having

mises with the foaming agent, begins to polymerize or cure.

Polymerization rates are dependent upon tompereture af the

inssecients, and temperature and humidity in the atmosphere.

The quality of the resultant product is dependent on the

quziasy of the ingredients, the correctness of the ratio and

mizing, she age or shelf age cf the resin and its viscosity, 2s

weil eas she temperature at which the foaming occurs. The product

watch enters the wall cavity nas initially the appearance of

whis sed iste or shaving cream, and as it cures, becomes stire

anc self-supporting.

Te advantage of UFFI is oboe mendes, transpart, and ease

cf installation. It is particularly suitable insulation for |

ci¢e> homes, since the foam can enter through a small opening

' and be delivered to the entize area of any given cavity. It is

relatively inexpensive, with the everage cost for the average

seven-room house being $1,200 to $1,400, and has excellent

insulating qualities. It is relatively nonflammable. The

National Aeronautic. and Space Administration (NASA) selected

Tripolymer, a foamed insulation, in a prototype solar house and

found it to be nonflammable, nontoxic, rodent resistant and odor

free with a 30 to 45 percent less heat loss than fiberglass

insulation. A fuel cost saving of 47 percent was demonstrated

after another Tripolymer insulation by a Housing and Urban

Development (HUD) study.

There are, however, certain disadvantages. The amount of

formaldehyde added to the mixturets:ctttical. “First, “the: more

formaldehyde the faster polymerization, which in turn increases’,

stability of the product and lowers its manufacturing costs.

Adequate formaldehyde is vital to provide sufficient cross-linking

sO @s to cause satisfactory stabilizing properties in the Final

product. However, any excess in formaldehyde results in unreacted

formaldehyde in the final product. This free formaldehyde tends

. to slowly diffuse from the insulation foam and may result in in-

creasing the indoor air formaldehyde concentration. Most urea

formaldehyde resins used in the manufacture of UFFI‘s contain

only less than .5 percent formaldehyde by weight, and contains

less than .01 percent formaldehyde by volume.

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In addition to unreacted formaldehyde, urea formaldehyde

foam is subject to hydrolysis. Essentially, the hydrolysis

reaction is a reversal process. When the insulation of resins

are exposed to water or a humid atmosphere, the UFFI may absorb

moisture, and consequently, a process of degradation which

releases formaldehyde follows. For example a methylol end group

(NHCH, -N-CH#) subjected to moisture (+H50) by hydrolysis result-

ing ( =NHCH5+CH,0) a release of formaldehyde. Since urea formaldehyde

resins are utilized in chipboards, particleboard and plywood, these

products also are subject to hydrolysis, and may also emit

formaldehyde. Indeed, the same is true of many formaldehyde

polymers. However, focusing on UFFI, it is obvious that the in-

stallation must be proper in al) respects of mix and formulation.

If excessive foaming agent is used, or if there is excessive

acid catalyst fn the surfactant, the result is as bad as use of

excessive resin. The process by which excessive acidity contri-

Dutes to the potential for formaldehyde emission is by breaking

she bonds attaching the single end formaldehyde molecule to the

chemical chain of the compound. Another common factar which

contributes to the potential for emission of formaldehyde from

UFFI is the addition of excessive acid foaming agent hardener

Sy the installer. At least a substantial portion of the emission

problem can be attributed to poor instaliation techniques or

improper use of materials.

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Foaming with cold chemicals, or foaming during a period of

high humidity also are factors which may constitute contributing

causes to formaldehyde release. |

Of course, any free formaldehyde that is present in UFFI

is not necessarily emitted from UFFI into the interior of the

house because it may remain in the interior of the foam, it may

be “trapped” within the air bubbles or captured by various

ingredients with the potential for minimizing formaldehyde

emissions which:'are added to the UFFI for that reason and,

because, lastly, if emitted from the foam, it may be emitted

into the outdoor ambient air.

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FINDINGS CONCERNING TWO PARTICULAR UFFI

PRODUCTS, INSULSPRAY AND TRIPOLYMER

Two particular foam insulations were the subject of

evidentiary focus in the present proceedings. This was not

the case at the time of the Administrative Hearings which

preceded the ban.

“Insulspray", so-called, is the trade name for Borden's

patented UFFI. This product was developed in a joint venture

between a Sorden affiliate and the Canadian Government.

_ Insulspray added a eerteia number of ingredients, including ;

resorcinol, dicyandiarmide and ethylene glycol to reduce the.

potential for formaldehyde emission or “off-sgasing".

Resorcinol, in particular, acts as a scavenger to react with

free oz freed formaldehyde. Insulspray was distributed in

Massachusetts by cne independent distributer to approximately

twenty to thirty installers. Some 1,260 Massachusetts homes

have been insulated with Insulspray. That Insulspray was

withdrawn ¢rom the American Market in 1978 or 1979.

"Tripolymer", so-called, is the trade name for C. P.

Chemical's patented phenol urea foam. The resin and foaming -

agent are manufactured in White Plains, New York. C. P. Chemical

Z is not a UFFI. The combining of phenol

contends that its produ

with methylol urea significantly increases the stability of

Tripolymer becausa many more methylene bonds are formed and

significantly less hydroxyl methylol bonds are produced.

Therefore, the potential for formaldehyde emission by hydrolysis

is much lessened. This inewedemien of phenol, however, does not

sc drastically alter the resultant structcre, physical properties

and characteristics so as to take it outside of the UFFl family

in the generic sense. This is- so because the formaldehyde release

mechanisms are the same, even though it must be conceced that

; Tripolymer is a more stable compound than certain other UFFI

products. The ‘free formaldehyde content in Tripolymer 102 is

0.08 percent and in the 105 resin less than .0001, the lcwest

sensitivity range of the accepted HUD test measuring procedure.

Tripolymer was distributed within this Commonwealth by shipping

to.Cc. P. of New England in New Hampshire, which in turn distribute

to the five installers that it had certified in Massachusetts.

Some 863 homes in Massachusetts were Tripclymer insulated. There

was one complaint ‘made.

Both Borden and C. P. Chemical have certain quality controls

which are utilized in connection with their vuapeetion products.

Bcth have quali ty control procedures soverning the manufacture

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an independent inspection program by which Factory Mutual Research

. Special nezzles end certain pressure gauges guarentes consistency)

| makes random monitorings of both resin and foaming agent, checking

i wiscosity, acidity and solubility, while Borden manufacturing

includes tests by two independent laboratories. Insulspray

installers are selected and trained by its-distributors. This

craining encompasses a five-day pericd involving beth classroom

and hands on trainings, as well as ieicehe aot experience. All

Borden installers are instructed to conduct periodic Gensity

tests of both the flow rate of resin and foeming agent and

cesting fcr quality of fcam. Borden representatives conduct

sporatic jot site spot checks. C. FP. Chemical euetns each

installer itself and requires its certification as a prerequisite

to selling its product to any installer. Its training program.

is four to five days at its plant (or over four or five weeks at

various job sites). Each prospective installer must pass a

written examination and foaming test prior to certification. All

installers are directed to undertake wet density quality control

checks every twenty to thirty minutes during actual installation

eof the fcan.

Both Sorden end C. P. Chemical have patented foam mixing

"guns" so-called. It is in these devises that the resin fceming

agent, end air are combined end the foam expelled under pressure.

of mix and flow. Additionally, C. 2. Chemical hes in line

heaters to maintain correct fcaming temperatures for its

, ingredients. C. P,, which leases its gun and pumping system,

provides 2 scheduled maintenance for these systems as well.

Pricr to the tan in Massachusetts, Tripolymer 102 had been

talled in 50,000 homes over these United States with a complain

rate of twenty-six hundredths of one percent. Tripolymer 105,

which is the product C. P. Chemical currently markets, has been

installed in 5,330 homes with no complaints to date.

The administrative hearings did not consider any specific

product, but rather treated all the foam products generically; —

alluding generally to the "Chemical Composition of UFFI" on

pases 5 and 6 of the Commiss:.oner's finding, and declaring 2

banned hazardous substance “Urea-formaldehyde fondle place

insulation" without ever attempting to define tt, See 105 CYR

650.020.

From the evidence produced at trial, I find,insofar as it

is a question of fact, that Tripvolymer insulation, if subjected

to proper regulations has the capacity to be installed so as to

eliminate or ctre any vapor problem that has been experienced in

derance 7f that

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evidence that regulations regarding quality product control, li-

: censure, ané standards for installation may be’reasonably ‘ash-

' tened which would permit a urea formaidehyde of the Insulspray

type to be safely used.

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MEASUREMENT OF FORMALDEHYDE

AND WITHIN UFFI HOMES

The measurement of formaldehyde levels within any particular

environment is best established by what is ‘called the chromotropic

acid test which records the parts of formaldehyde per militen

pasts of air sdmple. The Department of Public Health in this

particular matter undertook 198 chromotropic acid tests of the

formaldehyde level in houses in which urea formaldehyde based fcan

(hereinafter called UFFI) had been installed. The tests were not

tandomly representative, but were selected from those consumers .

who had sities tints made complaints to some state agency. There

were no tests of formaldehyde level made ty the Department in any

non UFFI homes. Additionally, there were no tests made by the

Department to determine any representative or random outdoor

ambient levels. Therefore, no comparison tetween UFFI and

non Urrl houses has ever been hed, ner is such a comparison

presently possible fram the Department's data. Lastly,

saundeendesia desi sests measwre the concentration of formaldehyde

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ang co Not in any way ettempt to disiinguish w iueutity source,

In 21 percent of the 198 UFFI homes the Department tested, no

level of formaldehyde was found. Additionally, in 156 out of

198 UrFI homes, or seventy-eight percent of the ‘entize test

sample, the level of formaldehyde was found to be .09 om iess pez

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million parts of ambient air. Lastly, the Department's testing

' pevealed all 198 houses to have a level less than .5 parts per

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million parts of air.

Although the Department never undertook such @ study, there

has" been research without the Commonwealth. A University of

Iowa Group measured 31 randomly chesen non UFFI homes with the

chromotropic seis test and found an average level of .06

formaldehyde per million parts as against an average level of .05

formaldehyde per million parts for 116 randomly chosen UFFL

houses, At the present state of the technical knowledge and

expertise, there has been no showing that the ambient level of

formaldehyde concentration in houses in which UFFI has been

properly installed is skint Pouathe more appreciable or differer: :

than the level of formaldehyde in stwitar houses without UFFI.

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FINDINGS REGARDING HEALTH EFFECTS OF

EXPOSURE TO FORMALDEHYDE AND

PRESENT SCIENTIFIC INABILITY TO DRAW

TOXICITY STANDARDS WITH REASONABLE

_ SCIENTIFIC CERTITUDE

Relatively low airborne concentrations of formaldehyde will

produce adverse health effects upon persons so exposed. As

exposure levels increase. from zero man's tolerance decreases

and at some point of concentration level, «he border between

tolezance and toxicity is crossed. There is a wide disparity

Of opinion as to the level of exposure below which adverse |

‘ Realth effects will not be experienced. In all 198 homes (or

100%) with OFFI which were tested for ambient formaldehyde by

<ne Massachusetts Department of Public Health, the Department

Zornd a level of formaldehyde which was less than 0.5 ppm

which is the level that the former Deputy Commissioner had

publicly stated is “usually act preblen causing” and "“wnich is

<ne level that adequately protects the general population."

Within the scientific cosintin ees opinion as to the acceptable

level of human exposure tc formaldehyde varies from .03 to .5

pasts per million parts of air. Moreover, it has been the

cbservation of that group that most verscns will not experience

any conscious irritation from exposures at levels below 0.5

pou concentrations. Of course, degrees of irritation vary

sicnificantly from individual to individual. The human system

is capable of metabolizing small quantities of formaldehyde with

no difficulty. As the dose or the level of expostre increases,

the body cannot handle this increase, and at some point, the

human detcxizication mechanism becomes overloaded. Formaldehyde,

therefore, at some level of concentration, becomes an irritant.

I find further that as this abrasive level of exposure is

increased, the exposure level becomes toxic. Usually the

sensory nerve system of the eve first becomes affectec. Upon

a sufficient dosage, discomfort and/or tearing will result.

At varying appropriate levels, a person's respiratory system is

subject to irritaticn ranging initially from mild discomfort to

extreme difficulties and finally to fatal results as concentration

levels increase. Symptoms which are typical of overexposure |

. include not only such eye lacrimations and respiratory irritations,

but nose irritation, coughing, dry throat, headaches, nausea and .

érowsiness. Also typical is the fact that such symptoms usually

promptly disappear once expcsure to the offending level of

formaldehyde ceases. I find as a fact that all of <ne twelve

symptoms enumerated in the Repurchase Regulations at 105 CMR

650.222(E) (4) (£) are in fact symptoms commonly associated with

overexposure to formaldehyde, excepting "ear irritation” (listed

as number 11) which I find is not a symptom commonly associated

with such exposure. However, I also find as a fact that each of

the eleven symptoms have many other common causes, both bacterial

anc viral in nature, or result from other pollutants. Therefore,

each of these symptoms, and many combinations or tnem, wnetner

of the respiratory or other septemic system, can be caused by

numerous irritants, infections, or allergies. Diet, disease

and depression are also causes for these symptoms.

Given the enormity of industrial, commercial and residential

usage of urea formaldehyde resins, the paucity cf research on

the question of possible ronic consequences of exposure at

various levels of formaldehyde is somewhat surprising. There is

a significant need acknowledged by those within this particular

field of eupadeial for additional toxicity studies which concern

themselves with chronic effects, if any, of minimum long term

-exposure, the evaluation of primary irritant effects on the

repair mechanisms of the body, particularly respiratory tissue,

the effect of age in the response to exposure dosage, the chronic

effects, if any, and the concentration-respense relationship in

selected persons involved in the chemical and manufacturing

industries concerned with formaldehyde. Simply stated, I find

as a fact that the present data bank on the toxicology of

formaldehyde is too deficient to permit the fixing of exact

toxicolegical standards for formaléehyde exposure based upon

reasonable scientific certitude for either the many various

industrial or residential environments. I find further that’ there

is in fact a population threshold for the irritant efiects of

exsosure to formaldehyde in homes. Moreover, from the toxicologic

“evidence produced at trial, I find and conclude factually that

dential exposure to formaldehvde at lewal« helow 0.1 parts

per million is an exposure beneath this undetermined population

threshold. I further conclude, insofar as it is a question of

fact, that from the data made available to the Commissioner

and presently found within its administrative record there is

ne evidence upon which an agency fact finder would. be warranted

in concluding that the population threshold for irritant or

toxic effects of exposure to formaldehyde is zero.

However, these findings of fact are not dispositive of the

underlying issue of this litigation, which is, does OFFI cause

health problems. Epidemiology is the study of patterns of ©

illnesses within communities, work forces, and other selected

population groupings. An epidemiclogical study would permit a

scientific analysis as to the likelihood or improbability of

UFFI causing health problems. Such a study compares a selected

or subject group (i.e., residents in UFFI homes) with a second

or so-called “control” group (i.e., residents in non OFFI

- insulated homes),moniters certain health symptoms as they appear

and are examined by particular members of each group, collects

the same and compares the incidence of symptoms between the

two. The Commissioner could have caused an epidemiological

study to have been had with the information that he possessed,

but he elected not to compare the alleged health effec¢s

experienced by UFFI residents with the incidence rates for the

general public. He did not rely upon any epidemiological

evidence whatsoever. Indeed, not only did he not compare any

such rates with incident rates in the general population, he

simply 4ai2@ aot know che incidene ratee within the FFI group.

He, also was without any knowledge as to how many people experienced

or with what frequency they experienced adverse health effects

as a result of UFFI emitted formaldehyde. Similarly, at trial,

just as the Commissioner in promulgating his regulations did

not rely upon epidemiological evidence, the Commonwealth aia not

advance the same as grounds in the court for upholding the

- ¢ c DIF,

—— cine ~

pu

regulations. However, the Commissioner did introduce an

epidemiological study conducted by the New Jersey State

Zealth Department (after the Commissioner promulgated the

Ban Regulations). This study compared symptoms experienced

Sy members of households living in 400 homes insulated with

UFFTI with symptoms experienced by members of households living

in 400 control homes without UFFI. This study shows that

many symptoms are more prevalent in individuals living in houses

without OFFI than in individuals living in houses with UFFI,

all as more fully appears in Exhibit 72 at 12, at Table 39.

saterestingly, the prevalence data obtained by the New Jersey

State Health Department show a greater overall frequency of

health complaints in the control population than in the OFFI

population.

Therefore from the epidemiological evidence produced at

che trial, insofar as the same is a question of fact, = find

there has been no showing that the symptoms focused upon are

moze prevalent among incividuals living in UFFI houses than °

any other group of residents.

ee ee eee

oon ae een eee ee cae. oo

Vit

FINDINGS OF FACTS MADE REGARDING

THE CIRCUMSTANCES LEADING UP TO

THE PUBLIC HEARING

Sometime in the spring of 1978, certain Massachusetts

residents who had UFFI inserted within their homes made some

complaints. Some made SRS 8 ah to the Executive Office of

Consumer Affairs, Others made their grievance known to the

Consumer Protection Bureati within the Department of the Attorney

General.

in June and July, members of the Department of Public

Eealth collected air samples from some approximately seventy of

these homes, Urea formaldehyde foam insulation and the extent

of its “off-gassing" and the consequences upon human beings

became a matter of considerable public discussion, all as more

fully appears from Opponents! Exhibit 40 and Exhibit 1, Volume I

pages 87 to 155. Therefore, a "task force” so-called, of various

1 - te Zecueath: chaired by the Secretary of Consuner Affairs, was

organized. The National Association of Urea Formaldehyde |

Insulation Manufacturers (hereinafter called NAUFIM) was formed,

In early August, the state released the survey result of the homes

which were the subject of consumer complaints. Seventy-three

homes had been tested for formaldehyde emission, with sixteen

having been found to have “abrasive levels emitted",

Deputy Commissioner David Kinloch was primarily responsitle

for the Department of Public Health's investigetion of UFFI ‘i

ee a, Sey Se

‘ wntil he left the Department in the summer of 1979. In August,

ee — ea + ae

1$78, the then Deputy Commissioner Kinloch stated that levels of

Zcomaldehyde "less than 0.1 ppm would generally not be

associated with heaith problems. Levels tetween 0.1 and 0.5 ppm

could, tut are usually not problem causing.” On August 10, 1978,

Deputy Commissioner Kinloch wrote a memorandum to local boards

of health indicating that the Department considered that

fermaldehyde at levels less than 0.1 opm would not be associated

with any symptoms.

Sy August 11, 1978, NAUFIM was given a list of twenty-nine

specific: complaints. On Ausust 18th, 1978, the Department

announced 2a $10,000.00 srant to conduct further air quality tests

So measure formaldehyde vapor in UFFI mak: other homes, and

various outdoor sites, with the testing to te completed as of

. September. In fact, there was no such grant ever made, end

consequently, no such testing ever undertaken.

The task force met with the industry task force, NAUFIM, on

| July 26, 1978, and it was agreed that NAUFIM, one, would measure

Scrmalcehyde and see that any appropriate remedial action was

caken, and two, that the state would fdllow up with the

homeowner, and three, if the state investigation showed the need

fox further work, NAUFIM was to te advised.

Both the Department of Public Health ent the Executive Office

of Consumer Affdirs were not satisfied with the responses from the

industry. These agencies issued a joint letter, dated November

17th, 1978, which was’ entitled “Important Notice Concerning

Distribution and Installation of Urea Formaldehyde Foam". In

this document, the two agency combine sought, one, a complete

list of Massachusetts customers with the date of the UFFI

installation; two, the test results and methodology of the same

‘regarding air or foam taken from homes in Massachusetts; three,

a statement of industry opinion as to the safe level of

formaldehyde; four, an industry appraisal of the accuracy of the

Commonwealth's testing; five, a Tist of the industry's proposed

remedies in the event a problem is found; six, a complete list.

of Massachusetts installers and retailers; and seven, the

chemical composition of each “remedy". (This Court does not know

whether the use of the term remedy was intentional or whether

what was meant was in fact the chemical composition of the

various foam products.) The agencies also wanted any industry

analysis which demonstrated that the chemicals used in these

“remedies” are safe for consumer use. More importantly, this

November 17, 1978 communication urged the industry to

“voluntarily, suspend the distribution and installation of UFFI"

until the industry could demonstrate "adequately" to these agencies

shat any and all foams in use were safe and that there was an

industry ability to rectify “promptly and completely” any

problems that had been identified in past installations.

Then, at a time more than three months before any hearings,

the Commissioner of Public Health and the Secretary for Consumer

4 Affairs, on peetahed 5, 1978, issued a public statement regarding

| She dangers that they perceived to te associated with UFFI, and

; Warning Massachusetts inhabitants against its use. At abdout

cHe same time, the Attorney General issued a PEE ES and

3 pussuant. to the provisions of Chapter $3A, save a statutory

; Pévecdey notice of his intention to institute proceedings. This

: notice to the industry ‘hat proceedings under the Consumer

| Protecscion Law were about to begin resulted in representatives

, from industry thereafter meeting in negotiations with the

Atcorney General on a continuing, but sporadic basis until

' February, 1979.

On February 29, 1979, the present Commissioner of Public

Health, whose term had commenced in January, announced that his

Gepastnent would hold late March hearings "on a proposal to ten

the sale of urea formaldehyde foam insulation in the Commonwealth].

The Commissioner stated that three sources; available in? tion,

°- _—_— —es «©

OS oe ee ee ee ee ee

+ te meee

-

with the Executive Office of Consumer Affairs had led to the

rrr le

_ Million parts of air and no testing ever compared the..formatdehyde

the Department's analysis of its own testing, end a consultation

belief "that the insulation foam precipitates too many health

problems suggestive of formaldehyde irritation to families".

This public statement deserves closer examination. First,

che Department's own testing has been the subject of this Court's

finding early in the decision wherein it was found that the 198

tests all revealed formaldehyde levels of less than .5 parts pez

levels of indoor ambient air of UFFI and non UFFI homes. Second,

what repository of knowledge was within the Executive Office of

Consumer Affairs led the Commissioner to his stated belier? From)

abocut<mid 1978, the Wesuttve Office of Consumer Affairs had

publicized its "Office of Self Help" es a willing repository for

consumer ompleints dealing with this subject. Thereafter,

there were a total of five hundred end eighteen cells regarding

UrFI, of which this office designated over three hundred anc fifty

es complaints, notwithstanding thet some of these callers had

merely sought a formaldehyde level test. Later on, the Office

of Cviliiamest Affairs sent cut a four-page questionaire to some of

these consumers and received certain replies. Neither the

percentage replying nor the content and comments, or lack

thereof, were ever fully disclosed pricr to or at ‘the time of the

sublic hearings. (See Proponent's Exhibit 64; Volume V, p.192

of Exhibit 1.) However, what is clear is thet the number of

questionaizes is not near 400, that the mumber of questionaires

does not approximate 358, which was the number of complaints later

' asserted ty the Executive Office of Consumer Affairs, and that

ome .

the numbers are not presently kmown. In eny event, these

Guestionaizres were deemed by the Commissioner in his findings

to be lacking in probative value and content.

Therefore, the third ground or source which the Commissioner

cited publi ‘ely, , “available information", essumes considerable

tsportence. This is an enumerated ground for his belief thet

"4+nswlation foam precipitates too many health problems", I find

as a fact thet when the Commissioner stated the same és @ vasis

of his belief that he meant that information within public

availasility which he anticipated would te forthcoming in she

' hearings he wes then scheduling. More particularily, this

finding is strengthened ty. the very next sentence in this public

~

stterance: "I believe these hearings will serve as an excellent

forum to discover the wide spevad Leaiti, effects of foam

insulation.” It is impertant to note that he did not describe

she information upon which he tased his telief ether than to

a> it was “available”, It is also important to emphasize ‘hat

=3l-

- he considered the hearings es an appropriate way to "discover"

these widespread poor effects. Therefore, the evidence supports

and I draw the inference that on February 22, 1979, prior to

the scheduling of any public hearing, the case against UFFI -had

been prejudged.

- 32 -

--

. ome ©. sss ae? te ** . .

Se ee

x

FINDINGS REGARDING THE PUBLIC HEARINGS OF

MARCE 29 AND MARCH 30, 1979

On March 7, 1979, the Commissioner of the Department of

Public Health gave notice of the public hearing “on proposed

regulations concerning the banning of urea formaldehyde based,

‘ Scamed-in-place insulation from commerce within Massachusetts ...

The purpose of the hearing was", . . to receive written and

oral testimony ..." on these proposed regulations. This

public hearing was scheduled to de held on Thursday, March 29,

1979, at 10:00 A.M. A second day wes conditionally further

provided, eS ee ee and, 4f necessary, Friday, March 30,

1979." Written testimonial submissions could te made pricr to

the nearing ty delivery to e named employee of the department,

ané aiso, copies of the proposed regulations would likewise te

fonished by that sextdeutar empleyvee., However, it was

expressly stated "all written testimony must be submitted no

| latex then March 30, 1979, unless such time for submission was

/ expressly extended."

1a rrr Tew dane e “ Pe mmet awe 4‘ aman

BOW antsy aowe wweeg V8 8 6 eer Ze Ce -——<—<—- socom

cbiected so this procedure, and there was @ series of comminicat

from these persons both tefore and after 2 March 14th meeting

' Setween NAUFIM end the Department. Principally, the

'

7 oem + eee

. .

ee

| areas relating to the proposed regulations, and who eculd query

representatives of industry and some particuler makers objected |

to the short time tetween the hearing notice and the hearing dete,

As a factual matter, this period of time is the shortest permissive

time period that is articulated in Chapter 30A, Section 2. The

Department settled on a procedure for this hearing wherein the

proponents ef the regulation would have the morning sessions,

while the opponents would have the afternoons of the 29th and 30th.

The public hearings would run from 10:00 to §:00, with a shart

lunch treak. However, there was’ to be no autematic fifty-vifty

split of the time.. This discussed organizational format also

was to include a panel of persons: who had expertise in the

those who appeared to offer testimony.

The industry representatives were not given copies of the

consumer complaints, nor were they given any opportunity to

discuss the test methodology utilized by the Department of

Public Health in essessing the levels of formaldehyde in the

198 homes which had been surveyed. No meaningful discovery

permitted. More particularly, the industry, Borden, C. ?.

Chemical, and others requested an adjudicatory hearing, end

further argued that there had to be some consideration of

environmental impact. These contentions were reduced to written

motions, as, for example, a motion to withdraw the proposed

'

| regulations, @ motion for adjudicatory hearing, 2a motion for

certain procedural rights.

At the hearing of the March 29th, 1979 hearing, ‘she

presiding officer, one Rodman, commenced the public hearing with

| the following statement:

"The purpose of this morning's hearing is to take

written end oral testimony pursuant to Department of

' Public Health proposed regulations concerning the tanning

of urea formaldehyde foamed-in-place insulation.

"We have a number of pecple who have already simged

up this morning. If you were here this morning and wish to

ive oral or written testimony, please place your name on

| the ¢ which is found in the very back of the room on

| the middle table, Due to the large number of people who

|

have signed up, we might not have an opportunity to call

everybody today or even tomorrow, ;

"For that reason, the department will resezve the right

i to extend the time for this hearing to next week and further)

if necessary, If the hearing is extended until next week,

y * will probably take place on either Wednesday or Thursday,

| When you do sign up, please put down your name, address,

affiliation, and telephone number, so that the department

can call you and arrange for specific times for you to

testify, if you're not to testify either today or tomorrow.

"The department intends to keep the record open for

this hearing for 14 days following the closing of the hear-

ings, which is now scheduled for tomorrow. Unless the

department rules otherwise during the course of the

procesdings, the record will slang 14 days from tomorrow.

"All people who are to speek this morning will te

timed. You will be given approximately @ one minute

warning when your time is about up. We will have a timer,

When the bell rings, your opportunity to testify is finished

and please do not testify past that point. Utilize the

minute that you have for completing your testimony.

- . - -

SE ee eee ee ee

—_—— — a «a

-———— ee

"We have here this morning a panel of people who are

prepared to ask questions of witnesses which will assist

the department in understanding the parameters of the problems

r involved; and'on the hearing panel this morning are Mr. Harolé

Bavley, seated in the middle, director of the Division of

| Occupational Hygiene, Department of Labor end Incustries.

‘} Mr. Gerald Billow, general counsel for the Department of

i Public Health seated at the far right. And to my immediate

right is Dr. Devid Kinloch, deputy Commissioner of the

Department of Public Health. I'm Gerald Rodman, hearing

a officer of the Department of Public Health.

the purpose of taking corel end written testimony. This

proceeding is not an adjudicatory proceeding. We are not

here this morning to engage in debate or to answer questi

| We are simply here for the purpose of receiving testimony

and asking certain questions of people which will essist

us in making our determinations."

|

|

|

: "The purpose of this morning's hearing is solely tor

The first order of business was. the motions of NAUFIM anc

{ Borden. The disposition of these motions was rapid.

; "We have a number of formal motions which have been

made by representatives of the urea formaldehyde foam

industry. I'd like to take just a few minutes to respond

i to these perticular motions, The department does not

! consider these motions to be apprepriate in the context of

this public hearing, but for informational purposes anc to

assure that all parties are clear as ‘to the conduct of ‘chis

proceeding, we will rule on the motions es follows.

"The industry has moved that the cepertment withdrew

dts propesed regulations, That motion is denied. The

industry has moved far certain adjudicatory hearings with

respect to the subject matter of this hearing. Those

fhotions are uncer acvisement, «nis does not «eliect ine

conduct of this hearing today or tomorrow or on any

extended day, and it should be made clear that these

hearings today and tomorrow are not adjudicatory in nature,

"The industry hes mede some further motions for

' certain procedural rights. Those rights are es follows.

ee ee ee

One, the right to cross examine witnesses, That motion is

Genied. Two, motion to file supplementary material for 30

days after the closing of this hearing. That motion is

dented, As previously noted, the record will be left open

14 days from tomorrow, unless the department ctherwise

notes during the course of this proceeding.

"“Trree, the industry has made a motion to inspect and

copy certain documents. The department does not rule upon

this, but rether states that the department has and will

make availatle to all members of the public all documents

which are matter of public record. Four, the industry hes

made a motion to compel an interview with a certain member

of the Department of Public Health. That motion is denied,

"Tis morning additional motions were filed ty Borden,

Inc. They seem to parallel the motions which were filed

yesterday on behalf of NAUFIM, which we just responded ‘to.

Those motions are motion of Borden for certain procedural

rights. Motion ef Borden that department withdraw certain

propesed regulations. Motion cf Borden to have a certain

adjudicatory hearing.

"ro the extent they are duplicative of the rulings we

made, the same ruling shall stand for those motions. To

the extent we have not ruled upon motions or our rulings

are in any way inconsistent with the rights of any parties

here this morning, then all rights are reserved for those

parties. Your objections are duly noted and recorded."

The proponents of the regulation then went forward with

the Secretary of Consumer Affairs, who first offered tes*tinony

and exhicits, and chen turned over the presentment of this cause

to the Coordinator of Consumer Activities, one Barbara Neuman.

| Thereafter, Sarbara Neuman offered testimony and introcuced the

oreponent's witnesses, All testimony was unsworn and not the

subject of any cross-examination. it was subject to tine

- 37 «-

ee ee eee

a ; . i

SE ES No

limitaticns, and witnesses were werned when time was running out,

These who were not trief enough to avoid a time cutoff could

submit a more detailed written statement. To the extent

permitted, Borden and others pertisipeted in the hearing.

During the afternoon proceedings on the second and

concluding Cay of the public hearing, counsel for Borden protested

an attempt ty the Secretary of Consumer Affairs to impeach the

emedibility of a pricr industry witness, one French. She had

—

assezted that 2 lunch treak check of an undisclosed ccaplaint

file to which she dented industry access vevealed French as

inaccurate and, inferentially, untruthful.

"MR. CURTIN: Good efternoon. My name is John Curtin.

I'm with the firm of Bingham, Dana & Gould, and we represent

Borden's in this proceeding. Zoerden's would like to present

three witnesses this afternoon, but tefore I do so introduce

our first witness, I would iixe to make one comment for the

recoré,

"As you are aware, we have filed a motion for an

acéjudicatory hearing. Thet motion es I understand it is

undes advisement. I would lixe to echo the camment of

Attorney Rosenbers, but also I would like to specii“cally

point out thet there has been an effort made’ in just the

lest few minutes to impeach a witness specifically by

reference to an undisclosed complaint file, which is

clearly a matter for the adjudicatory neering.

"And I would also point out that there has teen an

effort made in the opening statement of the Secretary of

Consumer Affairs to single Borden's out ty reference to

cestimeny of one witness referz to notes of some other

umnemed and apparently deliserately excised person

a

referring to comments ty two other witnesses. Sc you have

@ triple hearsay situation in which one company is singled

out.

; "I submit to you ty any standerds of due process that

requires the right of cress examination and the right of

an adjudicatory hearing."

. Tne hearings closed shortly after six o'clock on the

evening of March 30, 1579, with the hearing officer reminding

‘ those present that they had fourteen days within which to submit

! any further writings to the agency.

ee Se ee ee ee ee

x

FINDINGS CONCERNING THE SCOPE AND CONTENT

OF THE ADMINISTRATIVE RECORD

First there wes evidence from which the Commissioner would

heve been warranted end from which he did conclude that formaldehyd

— =——e .

————— Le it it ee ~-

vapor is emitted from UFFI. Certainly improper installation may

: be a cause of such emission,. and indeed the Commissioner

concluded that "the evidence suggests" the same, However,

though somewhat scanty, there was evicence from which the

Commissioner could and apparently did conclude that properly

a

‘nstalled UFFI emits formaldehyde. The Commissionez éidg not

éiscinguish as to whether the emission was of free formaldehyde

om as a result of hydrolysis, or whether he 4ntended to inciude

‘coth. The word apparently is used ty this Court because what

the Commissioner did was to shift the curden from the proponent

to the defendant industry on this issue, as witness his

| gonelusion as found on page 98.

"Opponents have claimed that proper installation will

eliminate formaldehyde... (but) .. . have not

7 substantiated these claims with scientific tests or

r otnezr evicence ... (mor)... demousiveted Gers cai

il be properly installed... Nor do I have evidence

| showing what installation procedwe will control vapor

problems or whether these procedures will elininate

- vapor emissions from the insulation. I therefore cannot

: conclude that improper installation mecessarily accounts

for the formaldehyde problems experienced in UFrFrz." ;

In any event, his finding on this issue is found on page 37 of

his summary, and it is:

‘i "Overall the evidence submitted indicates that UFFI

rc releases formaldehyde. The amount of formaldehyde vepor

7 that this emission may cause in ambient air in UFFI homes

1 Gepends upon a number of factors and is not quantifiable

based on the evidence available."

Since the Commissioner did not quality that ‘finding, neither

Goes this Court, and it is treated as such; to wit, all UFrrit

releases formaldehyde, Although the Massachusetts CAT tests

‘of his department do not support such a conclusion, there is

within the recerd cther evidence which would.

Second, there is no evidence in the administr tive record

wwhich could support a finding as to how much such vapor is

| :

2 gased from the foam to any indoor environment. Not only, as

|

|

lees

‘mentioned earlier, are the quality, age, handling of the products,

‘nathod of installation and temperatures importent, so too is

a. vapor barriers and other physical characteristics of

che home. Urea formaldehyde resin contained in a multiple series

(of home products may also be emitting vapor, the Commissioner

"ie lack tests controlling other factors that affect che

" vapor emission properties of the foam such as temperature

and humidity conditions, portion of home insulated,

installation technique, ete. We also iack tests isolating

UFFiI-caused vapor from vapor present due to other sources

of formaldehyde within the house,"

From these two given propositions, the Commissioner justified

she ban. He simply concluded any emission of formaldehyde is

too much. He reasoned in two ways.’ The first involves shifting

she burden away from the proponents of the ban and depositing it

upon the industry without notice at the time of the hearing, but

Sy announcing it in the summary of his findings as unsatisfied.

The burden {s upon those who would be regulated to demonstrate

seme “level of formaldehyde vapor that has been proven safe up

to twenty-four hours per day, seven days weekly, over an

individual lifetime" and the Commissioner concludes that no

such isvel whatsoever had been so proved.

The second reasoning method used by the Commissioner was to

ceview certain data to draw certain conclusions. He reviewed three

leboratory tests of UFFI and concluded UFFI emits formaldehyde. He

shen reviews some nine tests showing the amount of aldehydes or

“craaidehydes in UFFI homes (although he concedes they offer neo

“ercof that the formaldehyde detected in fact issued from UFFI"

25 cistinguished from any other one of the multiple possible

scurces of emission) and concluded UFFI emitted into homes

ferzaidenyde vapors in an amount "not quantifiable", Next he

ceviewad animal studies, aceunational standards. and expert

spinions. He concluded that the "full extent of the danger

scsed by long term low-level exposure to formaldehyde in homes

~4ia-

remains unkmown.," Next he reviewed the testimony offered by the

nineteen consumers and concluded that the majority of them had

. symptoms caused by formaldehyde exposure; that this majority was

. symptom free until their houses were insulated; that these symptoms

Gisappear when the environment was changed; therefore, the

Commissioner's inference that UFFI either "caused or significantly

contributed to "these particuler symptons". Ee also found that

i this "majority" is "a substantial number in and of itself", At

| Chis point in the Commissioner's conclusions; he had to make 2

large supposition, and he did. "In all likelthood, substantial

mumbers of other persons are similariy affected,"

It should first be noted that this Court found above in

t ;

part Vit hereof that while the present state of the toxicological

and epidemiologic data is not sufficient to fix with 2 reasonable

ow oo ome

scientific certitude a population threshold or level for the

isritant effects of residential exposure to airborne

formaldehyde, shat nevertheless, shere is factually an

acceptable level for human exposure with presently a wide

Gisparity ef opinion within the scientific community as to where

this level-should te drawn. It is important to point out that

these two findinss were made by this Court upon ail of the

oe ee me oe oe ee woe

evidence preduced at the trial. Finally, from the evidence

|

ee ee ee ne

1 en eee

| f20m finding that the population threshold oz the level of public

presented, this Court concluded that exposure to formaldehyde at

levels below 0.1 parts per million from the evidence at trial

ts beneath this still undetermined population threshold.

This Part X is concerned with findings concerning the scose

and content of the administrative secord. Therefore, with

respect to that recard, chis Cot now finds that trom all of

the data collected and testimony offered on the administrative

record, there is no evidence which would warrant the Ccmmissiones

tolerance to exposure to residential formaldehyde is 2 zero tasis.

No one opined that each, every and all exposwes are irritating

| 1/

or are coxic.

The Commissioner classified fermaidenhyde as an isritant end

Sexic without reference to any concentration level. The

I/ I find that the strongest support fer the Commissioner's

uitimate conclusions within the administrative record is

the statement made ty a certain Dr. Alarie, a physiologist,

who has published extensively on the results. of enimal

sesearch, developed methods for measuring sensory irritation

in redents and who found that mice exposed over time So

= 2 ppm formaldehyde eee respiratory decreases up

o fifty percent of normal. Ee-therefcre postulates that

be should take safely only one-tenth or prererac.ly

one-hundredth of that level. In accordance with his thesis,

Alasie stated during the public administrative hearing,

recommending a level which should dictate the highest

concentration of formaldehyde to be existing in homes,

.03 parts per million is the highest concentration of

formaldehyde to which inhebditants of homes in any state

in the U. S. should be exposed and preferably a level of

.003 parts per millicn should te observed."

. Commissioner found that the aged, the very young, the allergic,

the asthma orcne, and those suffering chronic respiretary disease

; may be mere susceptible than the general population. Howeves,

| this does not alter or change the two basic facts; to wit, there.

is a dose-response curve for formaldehyde; and there are

concentrations of airborne formaldehyde et which people ceneraliy,

| dmeluding the elderly and young, will not experience any irritation

: as a result of exposure. In fact, there was no scientific evidence

|| produced at the administrative hearing that children or the

elderly are more susceptible than the general population to

ai>borne formaldehyde. Moreover, 211 of the evidence collected

in the administrative hearing showed there is a general

eS 66++0 eee eee ++ ont Se o «

population tolerance threshold that exists.

The Commissioner not only lacked any factuat basis for his

conclusion that "in all likelihood sutstantiel numbers" are

eee @ +s .

— — —enene = +e

affected, he admitted the same many times in his summary. See,

for example: "We lack epidemiologic and clinical studies of

the long serm effects of formaldehyde vapor on humans .. . The

. mumper or stuczes is rew.” (see p.45 of Tad 4, Exbivdii i.)

"In toto, this evidence does not permit us to determine with

amy degree of accuracy the contribution made by non-UFFI products

to the formaldehyde problems." (See p.72 of Tato 4, Exhibit 1.)

’

!

'

.

'

.

‘

;

om SO Oe ee ene Ome at eee ee

+ would not allow me to determine the frequency of the occurrence

"Knowledge cf the precise mumber of persons affected by UFFI

problems caused by UFFI unless I also knew the number of

tallations of UFFI in Massechusetts ... I have no reliable

estimate of that number. . ." (See p.62, Tab 4, Exhibit 1.) _

in sum, there was no evidence upon which the Commissioner

would have been warranted in finding,1) the ambient levels of

formaldehyde in houses with UFFI to be materially different

from houses without UFFI, 2) what-percentage of incident rate

of complaints is attributable to faulty installation, 3) what

was the incident rate in UFFI homes; moreover, what was the

incident rate in UFFI homes as compared So non-UFrril hemes,

insofar as the same omar Question. of fact, I find the Commissionez

had no basis for concluding that a significant number of

individuals may incur significant harm as 2 proximate result of

exposure to Urrl.

Tne Commissioner defended his lack of knowledge ty blaming

ch ‘UFFI ‘industry. The Commissioner stated, "The Commonwealth

has attempted to secure complete lists of Massachusetts

installations of UFFI without success . .. The absence of a

Teasonably complete list has thwarted the Commanetetite te attempts

to perform an epidemiologic study."

a, ee

I find as a fact that this specific representation within

; the summary regarding thwarting any attempt to perform

i epidemiologic studies is not credible, and I give this

justification neither reliance nor weight, The administrative

record assembled would easily have permitted the gathering of a

sufficient UFFI sroup (for example, the 300 UFFI homes suggested

| by Dr. Landrigan and referred to by the Commissioner in his

| summary), As factually found by this Court earlier; the

Commissionex could have causeian epidemiological stucy to have

been done with the information he possessed, tut he elected not

to compare the elleged health effects experienced oy UFFI

resicgents with the incident rates for the general public. The

Commissioner testified, end I find, that the stucy publicly

announced in 1978 to do just such a comparison was not done

because it wes never funded by 2 sufficient appropriation or

grant. More particularly, the administrative record of this heaziz

contains no request by the egency co any int@rested party to

oresent such specific data for consideration either 2t che

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public nearing, during it, om thereafter, during the period

of time that the record was left open; or at any time thereafter

until the regulations were promulgated in November. (The

general public demand made by the joint agencies of Consumer

Affairs and Public Health in November 17, 1978 for, among many

other items, a complete customer list, was made in connection

with a suggested voluntary industry wide tan that was then being

urged. I assume it was this demand the then Commissioner referred

to in his summary, Given the possibility of legal action under

Chapter 93A, and there were no then contemplated hearings under

Chapter S43 and that the list was to be furnished to Consumer

Affairs as was all the other information demanded generally,

<t cannot be contended that the November 17, 1978 public

Ponouncement is the substantial equivalent to a vequest by an

esency for information in connection with a public hearing

corcerning 2 disputed matter which was to be resolved by that

agency.)

It should also be pointed out that after these hearings

cerminated, the Commissioner, in his first public announcement

of. the ban, announced,"The Department of Public Health estimates

that some 4,000 homes in the Commonwealth heave deen insulated

with UFFI insulation."

FINDINGS CONCERNING THE

DECEMBER 1979 AND AUGUST 1980

PUBLIC HEARINGS 3

On November 1, 1979, the Commi ss{oner issued regulations

effective November 14, 1979, 105 C.M.R. Sec. 650.000, which

banned the sale of .UFFI, required its “repurchase” in certain

circumstances and declared formaldehyde to be an “irritant”

and a toxt{e and hazardous substance without regard to any ;

concentration level of formaldehyde. When he announced the

Ban Reguiations, Commissioner Frechette issued a press release

dated November 1, 1979, in which he stated that the problem

with UFFI was one of “excess formaldehyde vapor in homes

insulated with UFF." In referring to “excess formaldehyde

vapor", Commissioner Frechette in fact was making a reference

to the federal occupational standard promulgated by OSHA,

3.0 ppm eight-hour time weighted average. About two weeks

later, Movember 16, 1979, the Commissioner stayed the

effective date of those provisions of the San Regulations

which governed the “repurchase” and removal of UFFI until February

14, 1980. Then, on November 20, 1979, he scheduled a further

hearing to consider the “reourchase” and removal orovisions.

Once again, Borden, C. P. Chemical and others moved for

adjucicatory rights, for certain procedural rights and

safecuards, requested the Commissioner to disclose all ex parte

contacts since the March, 1979 hearings; and, moved that the

propesed regulation be br chebtie. Borden also urged withdrawal,

inter alia, that there was no basis for finding that its product

Insulspray had caused amy adverse health efforts or that I[nsulspray

enits appreciable quantities of formaldehyde. These motions

were al) denied and the hearing was held on December 19 and 20,

1379. * borden participated in that hearing to the extent permitted.

Osher manufacturers also took part to the extent permitted.

C. ?. Chemical joined with Aerolite, Celsius, Cennco, Rapeo and

ochers and sought to have the repurchase regulations withdrawn,

or in She alternative, to postpone their effectiveness until }

Shere was a final judicial determination as to the propriety of

tne ikni C. P. Chemical also filed for an adjudicatory procedure

_ defore the hearings. There was no transcription taken of the

public hearings on December 19 and 20, 1979. Although the public

notice asserted written comments had to be received by December

13, 1379 “unless the deadline is expressly extended" it is

chvicus from Exhibit 19C that writings were later accepted.

(See, for example, p.178 of Exhibit 19C.)

- 49 -

<6 eee ee ee ee

Nothing happened for six months, excepting only that the

_ effective date for the repurchase regulations were extended on :

: four separate occasions.

On July 3, 1980, the Commissioner gave notice of a hearing

' e be held on August 1, 1980, regarding the "segutations concerning

re-purchase of urea formaldehyde foamed in place insulation”.

| He also directed any interested party to a named employee who

| would furnish a copy of the regulations or accept ccmments

received before July 31, 1980. Comments were in fact later

received. |

! The August 1, 1980 hearing was not transcribed in any

} manner. C. P. Chemical, Borden, and others renewed their previous

if

motions, and Borden filed a lengthy document in an attempt to

: preserve 2 record, Once again, no adjudicatory rights were

' accorded in the August 1, 1960 hearing.

i ’ After the August 1, 1980 hearing, the Commissioner

4 continued the effective date of the "repurchase" and removal

provisions on two further occasions and then, on November 6,

eo" and removal provisions with 7n

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effective date of November 20, 1980, 105 C.M.R. Sections 650.200,

§50,222 (the "Repurchase Regulations" and, with the San

| Regulations, the "Regulations").

-50-

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>

subaitved have been examined.

_ #ithout knowlecge 2s to quantifying the contribution of UFFI

XII

FINDINGS CONCERNING THE SCOPE AND EXTENT

OF THE ADMINISTRATIVE RECORD

RE DECEMBER 1 AND AUGUST 1980 HEARINGS

A judicial review of the administrative data collected by

way of the statements given at the public hearingsand matters

submitted in connection therein cannot be accomplished, since

the administrative recerd is not complete. The public

proceedings were not preserved nor transcribed or recorded, and

therefore are not retrievable. However, the written materials

In promulgating the repurchase regulations, the

Commissioner continued to be without any kmowledge of the

numer of UFFI homes within the Commonwealth, and ignorant of

frequency of or incident rate with which the occupants of Urrl

hemes experienced symptoms. Once again, there was no information

furnished which would permit, end no attempt made to make

comparisons of incident rates between UFFI end non UFFI residents.

Yo epidemiologic study was done. Indeed, formalidehyce

concentrations within UFFI nomes were still not compared with

ferraldehyde levels in the outside ambient air. The

aéméinistrative record reveals no additional information was

susplied regurding potential emission sources, Therefore, in

oremulgeting the repurchese regulation, the Commissioner was

_ emicted formaldehyde to the total emission level within any

OFFI home.

Since she Commissioner remained unable to draw certain

necessary conclusions which would be grounded or warranted from

the administrative data collected (as, for example, 1) the

extent of UFFI emission, 2) as to the contribution of other

urea formaldehyde resin products commonly found in 211 residents

and 3) the mumber of persons affected, to name —_ three) the

approach taken in promulgating these repurchase regulations

remained the same 2s utilized in the ban regulations; to wit,

the burden was upon industry to prove formaldehyde safe up to

twenty-four hows a day over an individual lifetime. This wes

2 burden which the Commissioner hed already found industry cculc

not meet.

‘It 4s important to point out at this point, in promulgating

mis regulations (ban and repurchase) the Commissioner zequized

industry to rebut his inference thet the health symptons

allegedly suffered by nineteen persons were caused by exposwre

to UFFI emitted formaldehyde. The complaints upon which ‘he

Commissioner relied were only those in which there was either 2

statement made at the public hearing or submitted 2s a writting

and mace a part of the administrative record. Of these

nineteen, it is obvious that some of these lived in homes in

which the UFFI had not been correctly installed. Two of the

cszplaints involved Sorden's product tasutsorer. and one of

thes complaints clearly was an improper installation. None

cf these complaints involved C. P. Chemical's product Tripolymer.

Attention is now called to the Commissioner's “Comments Con-

cerning Repurchase of Urea-Formaldehyde Foam Insulation” at page

+ thereof under paragraph entitled "hb". This statement appears:

“The long term effects of formaldehyde exposure remain unknown

anc were not relied upon ow the Commissioner in banning UFFI."

This statement is of considerable importance and deserves closer

examination.

"As a prerequisite to such examination, three factual findings

2re cade at this point. (1) I find as a fact from the evidence

sreduced at trial before me that the effects of exposure to

formeldenyde at levels of 0.5 parts per miliion or less are

< cumulative. I find further, insofar as it is a question

cf fact, that chere is nothing in the administrative record

wich would warrant the Commissioner from concluding that

exscsure to formaldehyde ata ievel of 0.5 parts per million is

cumuiative. (2) Next, I find as a fact from the evidence produced

at trial before me that the threshold to formaldehyde irritation

does net vary according to the duration of exposure. I find further,

inscfar as it is a question of fact, that there is nothing in

the administrative record which would warrant the Commissioner

—

from concluding that, whatever the threshold tolerance to

' formaldehyde may te, that level would vary sccording to the

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Guretion of exposure. Simply put, it is the dosage not the

lengch of time which has significance to the tolerance level.

(3) Lastly, I find that the human body has within it an —

immunological System. Suffice to say that upon sufficient

exposure to formaldehyde or any number of other substances, this

bedily system may activate itself. Most experts agree, and f

find, that formaldehyde has sensitizing properties. When 2

person has such an immuholagital response, it is called

sensitization. The effect of this sensitivity is not only to

increase the severity of the symptoms experienced, but upon

Sudsequent exposure, to induce such symptoms even when such a

subsequent exposire is only cof minute or even of trace dosages

of the compound involved. I also find that there was evidence

in the administrative record which supports the finding that the

Commissioner made that "Formaldehyde therefore is not a ‘strong

sensitizer! within the meaning of the statute."

Having in mind the above three factual conclusions, the

Commissioner's "Comments Concerning Short Term Health Effects"

(Page 2, Exhibit 1, Tab &) might be expected to reveal a simple

selationship between those twelve symptoms later enumerated in

“he regulations as characteristic of formaldenyde exposure and

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those symptoms representitive of "the ‘majority’ of the

complaints” earlier set forth in the bar regulations as caused

by the “toxic" and “irritant” characteristics of UFFI-emitted

formaldehyde. Sear in mind, all of the *agjority* Symptoms

are dose related, and, being under 0.5 parts per million, not

cumulative in effect.

However, when the Commissioner in-his summary on page 4

discussed "Short Term Health Effects" the Commissioner states

uncer that paragraph headfng the following:

"The original regulation was intended to

provect those people who were suffering and

these who perceived themselves to be at risk due

to UFFI . .. The Commissioner noted in... (his

earlier ban) .. . summary for example that there

is mo known safe level of exoosure in homes;

once sensitized, some individuals may react to

minute or trace doses. r

This Court finds, insofar as the same is a question of fact,

tnat the Commissioner's conclusion as set forth above from his

repurchase summary is inconsistent with the Commissioner's

eariter concius1on set tortn as tound tn mis Dan Summary ang

gucted below.

" . . . The Massachusetts statute mandates

a finding that formaldehyde has a significant

potential for causing hypersensitivity based

on the frequency of sensitive reactions as

well as severity of the response. Lacking

evidence of the number of individuals”

experiencing hypersensitive reactions, there

is no basis for coming to a conclusion about

the frequency of hypersensitivity.”

I find therefore insofar as it is a question of fact, in

assessing health effacts generally or in assessing what the

Commissioner calls “short term health effects” any considera-

tion of sensitization in déaneerion with the repurchase

regulations was and is improper.

Next in summarizing “Short-Term Health Effects" the

Commissioner merely states that since “ambient air tests of

levels of formaldehyde will vary", as they surely will from time

to time, from place to place, depending on weather, temperature;

humidity, anthropogenic activity, reaction reduction rate,

tests are not necessary, the Commissioner contends, since any

given tests “may not sccurately reflect the amount of

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data in the administrative record to support such a finding.

Such a finding is arbitrary, and capricious. Perhaps what

the Commissioner meant to say in such tests

may not accurately reflect the levels of formaldehyde day after

day; in other words, the cumulative effects of exposure,

Insofar as itis a Question of fact, I find that this is what

the Commissioner meant.

Lastly, in discussing “Short Term Health Effects" the

Commissioner falis back to his Original basis. He refers to

his original summary and "notes" that “there is no known safe

level of exposure." The standard therefore is no known safe

level of expostre for twenty-four hours over an individual lifetime.

Therefore, although the Commissioner avoids expressing the same

in explicit language, his phrase, "Short Term Health Effects"

obviously ineludesmuch more than the twelve enumerated symptoms

(which are dose related and not Cumulative) and encompasses al}

long term presently unknown risk sessibilities.

Consequently, I find the statement which was placed in the

reourchase statement that “the long term effects of formaldehyde

remain unknown and were not relied upon by the Commissioner in

canning UFFI" to be a misleading sentence. It is true the

effects are unknown,-and it is true that therefore it is

ispossibie for the Commissioner to place reliance upon such

unknowns; yet the Commissioner did include these unknown

possibilities, in fact, within the scope of his contemplations

and fashioned both the ban and repurchase regulations so as to

include 211 known possibilities.

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' (3) that UFFI was installed in the building, stating the date

xtit

FINDINGS OF FACT REGARDING

REPURCHASE REGULATIONS

To initiate the repurchase procedure, an owner of a Urri-

insulated building sends two documents to the Department of

Public Health (hereinafter D.P.H.). The first is a statement

Signed under the pains and penalties of perjury stating (1) that

he requests repurchase of UFFI from a building located at a

specific address; (2) that he is an owner of the building;

of installation, if known, and, if the person requesting

repurchase is not the person who purchased the Urri, the name of

the person who purchased the UFFI, if known; (4) the present

address of the consumer; and (5) the neme(s) and address(es),

if known, of the installer, distributor and manufacturer of the

UFFI installed in the building. The second statement, ala&o to be

signed under the pains and penalties of perjury, must be provided

by an occupant of the UrFI-insulated building, 2 former occupant,

er @ person legally zesponsible for an occupant or former occupant

Thst ctctcmcnt mast state that the sconpant ar farmar necunant

= ow _ ——— -

has suffered adverse health symptoms which cccurred, or were

agsravated, after the occupant or former occupant was exposed

to UFFI as an occupant of the UFFI-insulated building; and that

fF

the symptoms occurred while the occupant was present in the

ee Se: ee

UrFiI-insulated tuilding. The coansumer must also furnish copies

of any written contracts or communications in his possession

between himself and ‘the installer, distributor or manufacturer

of the UFFI product which wie installed in the building.

With respect to the period of time in which repurchase may

be sought, requests based upon tne health syuptens of a person

who was an occupant of the building pricr to November 20, 1980

(the effective date of the regulations) must be made within |

eighteen months after the date (that is, by May 20, 1982).

Requests for repurchase teased upon che health symptoms of any

person who becomes an occupant af a building after November 20,

1S60, must be made no later shan eighteen months from she date

thet the person becomes such an occupant. Any request for

tesuchese must be made. in all events, tefore November 20, 20005

Once &@ repurchase request has been initiated, any incustry

member identified ty the owner receives from the D.P.H. copies

of the owner's documentation and notice of his right to claim

seview, This installer or manufacturer is given fifteen

musiness days from the date of D.P.H. mailing in which to

exercise his right of review. In any event, any industry

member who receives notice from the D.P.3. of an owner's request

for resuschase must, no later than ten tusiness days after the

mailing date of that notice, send to the D.?.z. a list of names

. and addresses of any other installer(s), distrituter(s) or _

manufacture: (s) whom he knows or hes reason to believe were

involved in manufacturing, distributing, taliling or selling

of the UFFI in question. When the D.P.#. receives such @ list,

it then notifies each identidelinstalier, distributor, or

manufacturer ef the consumer's request for repurchase and each

such industry member then has the right to request review. In

this wey, all industry members involved in a particular instalia-

tion of UFFI can be identified and may request review.

Once review is requested, the owner must obtain 2 medical

report concern: the occupant om former occupant who hes

suffered these allegedly adverse health symptoms. The medical

teport must be from a physician licensed within this Commonweaith

but need not be furnished by the treating doctor. It is act

submitted under oath. It shall contain a brief description of

the relevant medical history and a list of symptoms, if any, It

may contain 2 diagnosis, but there is no requirement chat it

include the same. Also the report may contain the founcation for

any such diagnosis; nowever, tnere is mo requirement that any

mecical opinions be expressed as to the causal relationship

setween the symptoms alleged and exposure to formaldehyde emitted

from UFFI (cor to any other source of formaldehyde emission).

ore re.) — “-—

" In sum, the medical report does not, in fact, require the occupant

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or the person requesting repurchase to specifically allege

(let alone prove) that UFFI caused the symptoms complained of

by the occupant. With respect to the twelve symptoms

ennumereted as characteristic of exposure to formaldehyde, this

Court has already found that such symptoms have many ¢iverse ané

possible causes. 7

This medical report must be furnished within six months,

@iong with 2 medical authorization to permit the reporting

Coctor to release any written medical records which he possessed

o> used in making any diagnesis. The purpose of this

authorization is somewhat unclear. This is so because the

industry member is neither permitted to examine the occupant

mor question the homeowner. The industry member cannot obtain

a complete set of medical records regarding the occupant from

any physicians recently visited. Resuits of past or present

mecical tests undertaken by the occupant and that patient's

past medical and family history are berred by these regulations

and withheld fram the industry member as beyond the scope of

the review afforded, :

Likewise, the industry member is prohibited access to the

building to test the formaldehyde level within the home, to

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test for the presence of other sources of formaldehyde within

the home. Indeed, the incustry member is prohibited from

introducing evicence as to the formaldehyde level in the outside

ambient air next to the building, should such tests have teen

made within nearty areas to which the industry member was able

to gain eccess, In sum, the issue of causation has, oy chis

regulation, been effectively excluded as a defense to the

industry member, since shinai to establish or prove any

alternative cause for the symptoms alleged is not permitted.

What is open to the industry member is that within twenty

Gays of receipt of the medical report and authorization, evidences).

may be forwarded to the D.?.H. which has a tendency to show any

of the following: (2) that the person requesting repurchase

is not an owner of a UFFI-insulated building; (b) that UFFT

was not installed in the building; (c) that UFFI was not

installed in the building on the date(s) specified; (4) thet an

occupant or former occupant of the building did not experience

the symptoms in the time or manner claimed; (e) that the request

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experienced are not characteristic of exposure to formaldehyde

because they are not among the twelve enumerated symptoms listed

in these regulations; (zg) that the physician's signature is not

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: genuine; (1) that the medical report was fraudulently procured;

and (j) that she industry member who requested review ¢id not

in fact manufacture, distribute, or install the UFFI in questicn.

Eowever, she industry member is denied access to inspect the

building at issue to determine whether the UFFI insulation

sherein is his product. There have been occasions where

contractors may have used two different UFFI insulations in

the sane home.

Thereafter, the owner has a further twenty days to submit

secuttal to the evidence offered by the industry member.

Thereupon, the D.P.=. forwards the "evidence" to 2 medical and

legal referee cesignated ty the Commissioner.

Tne regulations specify with clarity the duties cf the

two referees, The medical referee shall find the occusant 1) to

have in fact experienced adverse health symptoms, 2) that these

symptoms were aggravated after exposure to UFFI, 3) thet these

symptoms occurred, but not necessarily exclusively while the

oceupent was in a UFFI building, and 4) the symptoms are

cnartacteristic or rermaicenyae exposure, srne Legal reieree

shall find the owner is 1) the owner of a UrFI insulated

suilding, 2) that UFFI was installed in the building, 3) that

she repurchase request wes timely, 4) that the otcupent or former

-63-

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occupant was in fact an occupier, and &) that the industry member

who is a party to the review manufactured, distributed -er

instalied the UFFI in question. The referees conduct no

physical examination, hold no hearing, ask no questions, hear

no testimony, admit no additional evidence on behalf cf the

iadustry member, and permit no cross-examinat tion. Rather, they

are required to make the above findings which mandate "repurchase!

of the UFFI unless the Seduntes member (notwithstanding his

inaoility to obtain or introduce the relevant evidence under

Shese regulations) can produce such oviseine as demonstrates

"clearly and convincingly” thet the occupant's statement or the

phrsician's resort is untrue.

Any industry member requesting review must pay any costs

incurred ty the person requesting repurchase. These costs

include, but are not limited to, mailing costs, copying costs,

end the cost of preparing the physician's report. In addition,

this industry member must pay the euite <2 the legal and

mecical referees chosen ty the Commissioner. If they fail to

bill for - these costs, they forfeit the right of review, Further,

the regulations contain no provision for recouping these fees

enc expenses in the event that the industry member bce

successful in this administrative review,

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In the event the owner is successful (either without or

‘ after a review) he receives a "Certificate" entitling him to

she forced repurchase of his UFFI by any one of the industry

members identified in this Certificate. The-owner is free to

choose to which responsible industry member he shall: direct his

Certificate. Along with the Certificate, the owner must send

to thet responsible party a listing of three persons engaged in

the censtiactien business in Massachusetts whom he, the owner,

Geems competent and qualified to remove the UFTI and restore

his tuilding. No later than ten business days after mailing

She list, the responsible party must 1) enter into negotiations

with the contractors concerning a contract for removal of UFFi

and restoration of the ouilding; and 2) must notify the owner

in writing that these negotiations have cegun. No later than

thisty days after mailing the list, the responsible party must

enter a contract with one of three persons for the zsemovel of

fri and restoration of the building. The responsible perty

Cc

must pay the cost of removal and restoration @s providec in the

contract.

Certain minimum contract terms aré specified in the

vocdiebhcus:. including removal of all UFFI, treatment of wall

cavities with a neutralizing solution if the consumer requests

-¢5-

—_— me)

it, protecticn of the premises from damage, and replacement of

altered or damaged portions of the home with materials of

equivalent kind, quality and appearance.

The regulations also attempted to cover any number of

possible situations that either had already risen or which

might arise in the future. These speak for themselves, and

there is no need to discuss them herein.

I find that the average cost to the distributer installer

or manufacturer of a re-purchase pursuant to these regulations

is somewhere between $12,000 and $14,000. Additionally in

some of the larger older homes the re-purchase cost in some

instances will exceed $20,000.

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. Observation that the installing procedure was "complicated,

xIV

FINDINGS REGARDING REASONABLENESS

OF AN ALTERNATIVE TO THE BAN

The Commissioner found that "the installer plays a unique

tole in UFFI production... (in that) .. , the installer must

manufacture! the insulation on site..." Obviously that

finding was warranted from the administrative record.

With respect to installation, the Commissioner made no

specific findings, tut rather concluded with a general

pessibly prohibitively complex..." and one which "requires

often exquisite attention to detail." This Court, from the

idence produced at trial, has earlier in Part IV hereof made

2

>

indings regarding installation of UFFI and the multiple factors

which must te considered, and there is no need toa repeat chen

here. While it must be conceded that there are many products

in this modern technological world whose creation, manufacture,

or even maintenance involve such ‘aieiie and diverse skills

coth cerebral and acquired as to be teyond the easy understending

4 atl anmm

= -~7

—— weecawwen 3

Of sliues eu cUumimisiwatus vl au Gacincy OF & jucics

the urea formaldehyde foaming of a residential structure is not

one of them. Therefore, a finding thet this process is so

difficult as to be a "possibly prohibitively complex" procedure

eee Ce ee me we

— a er: ct, a it til ae 8 te

<<<

- complaint rate of 0.00026 percent (one complaint); in 2,623 homes

+ Of O.1 percent (three complaints); in 1,584 homes and buildings

is simply not warranted ty the administrative record and such 2

conclusion is arbitrasy and capricious.

Prior to the Massachusetts ban, Tripolymer 102 had been

installed in 4,549 homes and buildings in the state of New York,

with a.complaint sate of 0.1 percent (four complaints); in

3,843 homes and buildings in the state of Minnescta, with a

and buildings in the state of New Jersey, with a complaint rate

in the state of Ohio, with a complaint rate of 0.06 percent

(one complaint); and in 760 homes and buildings in the state of

Connecticut, with a complaint rate of 0.5 percent (four complaints

The product is marketed and instalied in appreximately twenty

states. It had been installed in approximately fifty thousand

homes and buildings with a national complaint rate of .025

percent, Prior to the ban, there was one Massachusetts complaint;

The Department of Public Health had not prior to the ban, or to

this date has not itself tested Tripolymer regerding its

- Fed a et aoomanew TAH 424 2

we oe ay Wey wwe -“—— —-~ ow

longer marketed, having teen replaced by Tripolymer 105, an

even more stable product.

C. P. Chemical Company, Tripolymer's maker,: has proposed

offers to enter into 2 censent judgment with the Commonwealth of

4

-68-

ee ee

Massachusetts as part of these proceedings, by which it would

" agree to the following conditions for marketing Tripolymer |

within the Commonwealth of Massachusetts: (2) mandatory

licensing of its iuaShasas (vo) mandatory certification by the

Commonwealth of Massachusetts of its installation techniques and

written instructions given to its installers; (¢) adoption of

the Department of bias tnd Canadian standards tor installation.

in the event of a conflict between the requirements of such

standards, the more stringent staniasd would become applicable;

(d) mandatory testing of Tripolymer and subsequent certification

So ensure: (1) that the free formaldehyde content of Tripolymes

does not exceed 0.1%; end (2) that the emission rate of

formaldehyde in living space is less than 0.1 ppm; (e) require

shat a written contract be presented to all cust omers ané that

shere be a seven-day waiting period prior to execution of the

centract; (f) ierttttl % Suarantee in the written contract to the

customer that the level of formaldehyde within the living space

will not exceed 0.1 ppm, plus known ambient ‘level; (gs) provide

@ muaerantee in the written contract to the consumer that if it

should be cetermined by e¢ppropriate testing that the level of

formaldehyde does exceed 0,1 ppm, plus known dgmbient level, in

she living space, C. >. Chemical Company, at its own expense,

-69-

. Will take the necessary steps to reduce the level of formaldehyce

, within the living space to 0.1 pom, plus known anbient level,

| Giseases, lung diseases and cardiovascular @iseases, should not

- 2O@ +ee 6 a ae @cocsees

A EE ea + a

SF eS oe ow

or if unsuccessful, remove the insulation from the home;

(h) require that the written contract contain a warning that

persons who are generally hypersensitive, sensitive to

formaldehyde, generally allergic, and those with respiratory

purchase Tripolymer insulation unless advised by their physician

to the contrary; (1) require in the written contract a statement

thet families with children under six months of age, women

pregnant at the time of installation and extreme elderly

comsult their physician prior to executing the camtract;

(J) require a statement in the written contract that if 2 pungent

oder persists more than fourteen days after tallation, the

customer should immediately call C. BP. Chemical Company, and

further require that C. P, Chemical Company have available a

qualified individual to respond to such celis; (kK) require the

installer of Tripolymer to assure, prior to installation, that

saS pIrsspostivs Noes ecssesses scequete ventiietim.,

Bor¢en, the other manufacturer actively participating in

this litigation, and the Formaldehyde Institute, urge that

licensure of installers and the promulgation of regulations

—- ~~

. which would edequately protect the public interest.

' estatlishing installation standards are feasible alternatives

‘ Department of Housing and Urban Development (HUD) and the

Cecadien seguietivu) Vecause thes

. which regulations are intended to control vapor emission o> how

- @laims with scientific tests cr other evidence... Opponents

Once again in rejecting toth and either of two alternatives,

licensure of installers, and creation of installation regulations;

cne Commissioner reasoned in two ways.

First he again placed the burden upon industry. "Opponents

have claimed that proper installation will eliminate formaldehyde

problems in UFFI homes. Opponents have not substantiated these

have not demonstrated that UFFI can be installed properly .. .

Tne evidence suggests that improper installation may contribute

- « « DUS does not support a finding that licensure of installers

co svegulation of installations procedures will eliminate the ;

problems experienced,"

Secondly, he relied upon the absence of knowledge. He

rejected the three governmental Seaubicsitah submitted within she

administrative record (the Department of Energy (DOE),

" ne ake ee et O41 Te

~~

Fe me

wwe 44 wee HYP eee eww wmy

she standard adopted will result in vapor control." Moreover,

,

ne found that "This lack of information is particularly

—— ee eee me ee

-_—- -

ne ee res

SS SE! + ES HS + oF er ++ ae Semmes

Fe Se ee ee ee

. comeluded as follows:

troubling.” With regard to industry submissions, he likewise

commented, "Nor do I have evidence showing precisely what

installation procedures will control vaper problems or whether

these procedures have the capacity to eliminate vapor emissions,"

The Commissioner elected in this instance, aiso, not to

open the hearings to secure additional evidence, but to proceed

without that knowledge, He simply utilized both reasonings,

1) the burden is on industry, and 2) nis lack of kmowledge, and

"I therefore cannot conclude that improper installation

necessarily eccounts for the fermaldehyde problems experienced

in UFFI-insulated homes."

in light of the language in his explicit findings, this

Court now finds, insofar as it is a question of fact, shat the

Commissioner concluded that the administrative data wes

inadequate to support a finding either way as ‘to whether or not

proper tallation criterion would eliminate or cure all

experienced vapor protlems. I also have made certain findings

iu Fett V euuve scopesdiug Chic suivebiiiiy vf diveudings aut

regulating installation from the trial evidence (2s distinguished

from the administrative record) and there is no need to repeat

-72-

; Shose findings here. it is enough to point out that the

ww oes . oe

et He es +

mm

‘ee «© . —- — eee .

re erro eee ee ee 6 eee ee eee: eee

Commissioner declined to consider regulation as an alternative

to banning because of a lack of knowledge.

_—-—-- =

ste

XV

FINDINGS REGARDING OTHER PLAINTIFFS

Anderson Insulation Company has an usual place of business

in Abington, Massachusetts, It is a family owned business whose

business is as 2 supplier and installer of ell types of

imsulating materials for a vast variety of structures. Its mjor

market is the metropolitan area of Boston, but it also has had

business in the New England States and in New York. It begen

using Urri in November of 1976, and has fcamed about 300 structure

including churches, YMCA facilities, daycare centers, college

Gormitories, state tuildings, scahiaieell and commercial

structures, manufacturing plants, and the like. It has instalied

UFFI in @ppreximately 265 residences. It ceased use of UFFI et

the time of the tanning.

The Massachusetts Installers Contractors Association is 2

voluntary unincorporeted organization of installers of insulating

einais There were between 100 and 150 individual

Massachusetts installers who used. UFFI to insulate resicences

within this Commonwealth.

Berkshire Gas Company ("Berkshire") began promoting UFFI

in 1975 for residential customers in the western part of

Massachusetts, From 1975 until March 1979, approximately 518

oe

customers of Berkshire had their homes insulated with UrFi.

Initially, Berkshire would refer customers to 8 specific private |

i individual installer, not affiliated with Berkshire, end

approximately i22 homes were installed under such arrangements,

Berkshire received a fee for each of these referrals from the

———

private insulation contractc,

© some point in late 1976 or early 1977, Berkshire

Terminated that errangement with the installer. Thereafter,

. Berkshire would kegotiate and enter into a contract with the

SF EE Ss Se eS Came = . mee.

individual customer for the installation of UFFI and bill the

| customer teased upon the negotiated orice. Berkshire errenged to

| have a shire party install the UFFI in the home. in turn,

Serkshire paid the installer a portion of its contrect price,

i! maintaining the talence of the contract. Approximately 150 homes

: were insulated under these arrangements witil approximately

| June, i977.

i In approximately June, 1977, Berkshire terminated this

arrangement with the private insulation contractor, in part,

~- -—-—- «az awe Tadamtam ww nee ee

~Soueeusw we

= ~—-ae ~

L tegen to purchese quantities of UFFI ingredients from Celsius

Resources, Inc., and maintained a supply of UFFI ingredients at

its warehouse. From June, 1977, Berkshire continued to promote

or oer

+ eee. «

UFFI among its residential customers and others and negotiated

and entered into contracts with residential customers, and billed

and received payment from residential customers for the

installation of Urri. At that time, Berkshire arranged to have |

@ single installer, approved by Celsius, insulate each home

for which a contract was made between Berkshire and e customer,

The approved Celsius installer would utilize the supply of UFFI

which Berkshire maintained in its warehouse to complete the

Berkshire contracts with customers, Berkshire paid the instalier

for each job completed and maintained for its own use the

difference between the customer contract price and what it paid

thet installer, Approximately 160 homes were insulated with

UFFI under the arrangement between Berkshire and the approved

Celsius installer,

After March, 1979, Berkshire did not contract for the

installation of UFFI.

RULINGS OF LAW

below its.conclusions thereon.

: =. ‘=e.

ee es

@-Ao-

CHAPTER S4B REQUIRES AN

ADJUDICATORY HEARING

Pursuant to the provisions of Chapter $45, the hazardous

substance labeling law, the Commissioner of Public Health

promulgates the regulations at issue herein. His power to

regulate is found within Section 2 of the Act. A banned

hazardous substance is defined in Section 1. In the event an

exticle is banned, the statute clearly provides that the

manufacturer or distributor ", . . shall repurchase it from the

person to whom he sold it... and reimburse such person for

any reasonable and necessary expenses ine:rred in returning it

to the manufacturer.” Such repurchase, the statute declares,

shall te eccomplished ", . . in accordance with regulations

of the Commissioner." See General Laws, Chapter 943, Section 8.

The hazardous sutctance labeling law grants to the Commissioner

power to make factual findings, both as to the existence of

any hazard thet a specific product may pose, and, if factually

found to possess hazardous characteristics, then to determine

the particular degree of hazard that that substance possesses.

Further, this legislative scheme mandates that. in the event

sne Commissioner concludes a product to be a hazardous substance,

then he shell consider whether the labeling and packeging of

© + 82 semrcese om uss om

Oe ee: ee ee Sere

the hazardous substance ere in a form which suitatly addresses

che re@sonable requirements of public health and safety; c=

whether given the scope of the risk as perceived by him, that

the preduct is "misbranded", Misbranded hezardous substances

are by this statute effectively >semoved from the stream of

commerce by Section 3, and a violation of these provisions

ase made criminal by Section 4. If, however, the Commissioner

finds that certain additicnal label requirements ere necessary

' for the protection of public health, then he may ty regulation

"establish such reasonable variations . .." However, if the

Commissioner finds as a fact that an article cannot be

adequately lateled so as to protect public health, om.that the

azticle presents an imminent danger to public health, he may

Geclare that article to ce a tanned hazardous substance and

recuize its removal from commerce. To accomplish the statutory

purpose, the legislature has granted to the Commissioner the

power to declare "ty reasonable rules and regulations ... 4a

hazardous substance ... any... . which he ?inds meets the

ius =o & Th aw tet ZaFtimad amt wboutia 231% s4@ ear fant

wae as - _- -- «- -- *-“

** = mee _—_ =

& SY et Se Gssw « . . we veer Ne mt we oe 2

Section 1. Other than the above adjective "reasonable" this

grant of rule and regulation authority is not otherwise defined

in those first paragraphs of Section 2. However, after reciting

dosed ——

che statutory schemes in those paragraphs alphabetically

subdivided "a" through "6", the last paragraph appears to focus

on the parameters of this grant of rule making pewer, "The

Commissioner shall cause the regulations promulgated under this

chapter to conform, insofar as practicable, with the regulations

established pursuant to the federal hazardous substances act,"

This sentence in Chapter S4B, Section 2, does not set forth a

guide for statutory interpretation; rather, that phrase is

| Gescriptive of the grant of power given therein, and is directed

So the Commissioner. The legislature has mandated that in

making his "reasonatle" regulations, the Commissioner "shall

cause" his regulations "to conform". Conform is a verb which

simply denotes any undertaking to tring two objects into

harmony; or, more literally, to shape or form one object in the

imase, outline or contour of a second object. The vers conform

is directed to the promulgation by the Commissioner, and he is

to shape his promulgation to conform to thet ‘sinahaine of

sromulgation “established pursuant to the Federal Act."

This statute charges the Commissioner to conform his regulations

"tnsofar as practicable” with regulations estatlishec pursuant

to the Federal Act, The word "practicable" connotes the

a... a ——_ ——-

© +@ee

——— — : te te i aay sy

a ore see

Se eee

possidility of performance and hes es its outer limits of

performance, the lack of feasibility. In sum, therefore, the

legislative requirement could be restated: The Commissioner

must ebtes his regulations to conform to federal standards, in

ali cases in which it may be feasible so to do.

AS this point, it would appear prudent te look at the

Bederal Hazardous Site teuie Act (15 USCA $.1261). The

Massachusetts Act tracks this federal legislation in its

from 2 comparison of 15 USCA s.1252 with Chapter $43, s.2._

Procedurally, the federal model provides specifically shat the

issuance of regulations shall be undertaken pursuant to the

Administrative Procedures found in 21 USCA s.371 (the Food, Drug

and Cosmetic Act) and outlines the judicial remedies for review.

The Massachusetts statute gives the regulation power to the

Commissioner of Public Health (whose responsibilities include

Food and Drugs) direct him to conform to federal regulations,

anc is silent on judicial review.

either by a "proposal" made by the Secretary (car interested

party upon 2 showing of reasonable grounds). The Secretary

i substantive definitions and purposes, ali as more fully appears |

>

9 be heard orally and in writing, After a thirty-dey ‘objection

eOee ce ee

_— “1— eo owmseee sees

ee . er ne |

—— 0g a ee tae Oo ee eet meee 8

, WAAsRh the Federal Act provides is of some interest, since not

fact™ on which the ordez is grounded. (The judicial review

puslishes the proposal and gives al. interested an opportunity

pesiod, the Secretary may then effectively act. However, if with:

thisty days any person adversely affected ty such an order may

object, specifying with particularity and request a public

Rearing, upon such objection, the regulations are stayed. In

that event, the Secretary shall give due notice and hold a

hearing to receive ethene relevant and material on the issues

raised by the objections. Any interested person may be heard,

ez

after, the Secretary shall act thereupon by public order,

Tne arcer must be based "only on substantial evidence of recard

a2 such a hearing” and he "shall set forth detailed findings of

only may she Court affirm or set aside in whole or in part,

ssxperarily cr permanently, the regulation in question; but a

citioner may apply to Court for leave to adduce additional

ei

iL}

t

eviécence upon a showing that it is material and there were

seeseratle qoowmds for fadiwe to essiier sroiuee, and the

Couct may order the same; the Secretary having power upon such

sresentment to meke findings and/or modifications. )

LZ

—— at ac a: a, te. ae

——————

There is atsolutely no question thet under she Federal

Hazasdous Substance Act,nhere a regulation is proposed which

would tan a product and require tepurchase, therety creating

retroactive liability and significant manufacturing or merketing

ampact, he act would “require a notice of hearing, a right of the cbjecting

party to cross-examine witnesses presented by the. . . (Consumer

Product Safety). . . Commission, and to present evidence in

opposition thereto, and other evidence which-may be relevant or

material to the issues ..." Spring Mills, Inc. v. Consumer

Product Safety Commission, 434 F. Supp. 416, 431 (1977). In 1977,

the Conmission banned 211 self pressurized products containing

vinyl chloride by following the administrative procedure in

proposing 2 regulation banning the same, During the thirty-day

period for objections, nine comments, including three critical

ones, were received, A request for public hearing was denied

because the objections were "void of reference to factual

information", The case is particularly interesting, since in

support of its ban, the Commission head stated "no safe level

of human eaposure to vinyl chicride has teen estebiiches", end

concluded "the potential hezard ... is sufficiently serious

and immediate to warrant repurchase." The protester sought

Sucicial review, and the regulating agency agreed that the

cojections were in effect a nullity and did not aacess (tate a

hearing because the objections were legally insufficient to-change

the result. The Ninth Circuit reviewed the legislative history

az length and concluded that where such 2a broad grant of power

had been given both the original drafters, and subsequently

those who had amended the sane from time to time, Congress clearl

intended that the rigid statutory requirement of a formal

nearing should continue in every case where a prcoposed regulation

w2$ controversial and opposed by persong who were adversely

a*fecced Sy the agency's action. Pactra Industries, Inc. vy.

scnsume> Product Safety Commission, §55 z°° 677 (1977). The

racionaie of Pactra is applicable here. The Court said that

she recuirement

"serves to impose a discipline on the

agency's decision-making process, forcing

it to present ordered proof to support its

position. These procedures permit affected

parties to express in a direct and participa-

sory manner their opposition and criticism of

governmental action before it becomes final.

The public, and the regulated industries,

as well as the agency, develop a better

understanding of the problem at hand by

following these procedures, and the resulting

regulation may be a more refined and precise

statement of agency policy. The procedural

restrictions imposed on the agency by

section 371(e) are admittediy severe, but

they are stated with particularity in the

rule-making statute, sad we can find no reason

to. dispense with these procedures in this

case. If the Commission believes that a

substance should not be used where it has

been shown to be potentially carcinogenic

under intensive exposure conditions, its

determination deserves thorough public

examination. To implement that determination

the agency must therefore follow the procedures

Congress has prescribed." Pactra Industries

v. CPSC, suora, at 685.

Tn 1972, Massachusetts completely rewrote the Hazardous

. Substance Labelling Act by striking out sections one through nine

of Chapter $48 and substituting the present version. It is

inconceivable that the legislature, in mandating that the

Commissioner shall make specific findings of fact regarding the

inherent character(sties of a particular product or other specific

@tvicie Offered in Commerce wes unaware of the fact that the

-84-

federal drafters cf the model that they were tracking

considered public evidentiary hearings on rule proposals which

adversely affected interested persons to be an essential

procedure to check the broad grant of administrative power.

It fs obvious to make such findings about such an article

which requires the Commissioner to hold hearings concerned

with the particular product. Certainly just such hearings were

within the contemplation of the legislature.

21 USCA s. 371 from its initial enactment in 1938

through 1954 and 1956 amendments (making the process less

cumbersome) to its present form, mandates a formal

ro

ae

-_—_ +. -~« _— . ee

ee SS Ree nee ee ee

; evicentiery hearing whenever 2 proposal is opposed ty te

adversely affected, (See 1968 Duke L.J. 1) The case of

i Pha maceutical Manufacturers ‘Association v. Gardner, 381 fF, 2d 271,

was decided five years tefore the redrafting of the Massachusetts

statute, |

in the case at tar, the representatives of industry

registered theirobjections to the March 7, 1979 eecbesal, Since

Shey were interested vadben who would have teen adversely affectec

Shey were entitled to an evidentiary hearing, including the right

So cross-examine, and the right to present relevant and material

evidence regarding the issues raised by the proposed regulation.

Trey were entitled to such a hearing pursuant to the provisions

of Chapter S&B, Section 2. |

“The Commissioner shall cause the regulations orcaulgeted

under this chapter to conform insofar as practicatle

with the regulations established pursuant to the

Federal Eazardous Substances Act."

Any claim in this case that the Commissioner may be

excused for his failure to conform predicated upon the phrase

"4nsofar as practicable" is doomed to failure on the most

-/

a /

fundamental grounds, to wit, factually, Feasibility is

L/ Although not in connection with the language of Chapter ola,

Section 2, “insofar es practicable” » the Commonvealth, in

‘

. +

. . , . oS

‘

7 Ne

~~ x ? i

(footnote continued)

essentially a question of fact. Here the facts are that such a

hearing was clearly feasible. The Commissioner, the Executive

Office of Consumer Affairs, and the Attorney General all

considered the industry representatives an easily identifiable

group o* common interest and purpose. The Commissioner thought

it practicable to deal industry wide until March 7, 1979. So

did the Office of Consumer Affiars. Further, the Attorney

General had no difficulty in identifying interested persons

when contemplating his Chapter 93A action; and factually, there

was an immediate and uniform industry response to this anticipated

litigation and the commencement of negotiations and discussions.

Simply put, if it is feasible, and it was, to bring a court case

against a group of defendants, then that group has sufficient

common indicia to be identified for an adjudicative agency.

proceeding. After all a 948 hearing deals with the examination

of some particular product. NAUFIM was the industry's spokesman

and the product's advocate.

(Tootnote continued)

arguing that an adjudicatory hearing under the Administrative

Procedure Act is not required, observed as follows: “in

order to carry out his statutory duty under the statute,

the Commissioner had to consider the interests and concerns

of the plaintiffs, other manufacturers, distributors,’

installers, consumers and even casual visitors to homes,

* an ahvinusly larae numher which it would he

impracticable to include in an adjudicatory proceeding."

This argument is interesting because it presumes the Commissioner

has a policy making discretion to avoid making findings of

fact concerning the existence of hazardous characteristics

within the particular product being examined and to avoid

making the statutory findings as to the particular degree

of hazard possessed by that specific product.

-87- : 7" - 4 7 in? wae

CHAPTER 30 A REQUIRES All ADJUDICATORY HEARING

If this court be in error and ic is subsequently.

¢erersined chat the provisions of Chapcer 94 B, Sec. 2, ate

moc to be construed as this courc has done in Part A above,

nevertheless I find and rule chac che plainciffs were entitled

So an ageccy adjudicatory proceeding under Chapter 30 A,

Sec. 101), whereis an agency is mandated to conduct adjudicatory .

proceedings when "che legal rights, duties, or privileges of

specifically named persons are required by consticucional right

er Sy any provision of che Saseent Laws."

First, I fied chae Sis adjudicacory proceedings are

sasdated by a fair reading of Chapter 94 3B, Section 2, as applied

to the facts of chis case. The ban and repurchase regulation

act issue seek to impose huge financial Liabilicies ulcimacely

spon a small selecc group of sanufacturers of a target product.

The regulations are soc only prospective but are retroactive

anc ispose severe liabilicies for pase accivity which was, ac

the cise done, lawful and proper conduct. The Massachusetts

Tepurchase power copied in essential decail from the federal

statute, and che legislature enacted that Section 8 at the sane

cise as ict enacted Section 2. Ic is imporcance to distinguish a

Chapter 94 B proceeding from other types of agency hearings. A

Chapter 94 B hearing is a proceeding againse a ching, an object,

or other article of commerce. The issues to be resolved ac the

hearing all concern che qualicies and propensities of thac

pazrcicular res. The act sandates that specific findings. by che

Consissiocer be sade on the only relevant issue; to wit, the

Cegree of hazard, if any, the res presents, Therefore, the

tearing is soc lLegislacive in nacure dealing with any policy

question; racher the hearing's sole object is to factually

Cecersine the attributes of che specific res.

Therefore, ic is certainly a reasonable interpretation .:

of chat requiremenc "conform....insofar as practicable” in

Section 2 which. meant that when the Commissioner was proposing

bans and seeking to invoke the repurchase power of Section 8

that he should afford those interested persons adversely to be

affected by che imposition of retroactive liabilicies the

type. of hearing to which they would be entitled under the federal

act, and that this statutory phrase "conform...insofar as practicable’

therefore is a statutory requirement vhich is cognizable withia

the phrase "when required...by any provision of the General

Laws... " as Chose terms are found in Chapter 30 A. Sec. 1(1).

Therefore, an adjudicatory hearing is required.

2

Secondly, in any event, I find that Chapter 30 A, Sec. 1(1)

necessitaces an adjudicatory hearing upon the facts of the cases

at bar since these proceedings involve "... the legal righes,’

duties, ot privileges of spécifically nased persons...".

Obviously the proceedings questioned herein involve legal rights

and ducies. The more difficulc question is whether che proceedings

were focused upon or directed to “specifically samed persons”.

The argument of the Commonwealth is that the proceedings were

of general applicacion throughout the industry. “Indeed the line

between adjudication and rule making is noe always easy to draw.

Sometimes it is necessary to examine the interess of the parcicular

parties, to look at the nature of the subject matter soughe

to be regulated, and to compare the proposed regulation with

the sctacute authorizing its promulgation so as to weigh the

relationship, if any, between the regulation and the underlying

basic statutory scheme.

‘ Te auppost iis Gouteutivu shed ed judicatosz Uddtings

were noc required, che Commissioner relies upon the six cases

discussed below. For the reasons stated, I find reliance upon

these cases is sisplaced. Cambridge Electric Light Co. v.

Department of Public Ucilicies, 363 Mass. 474, dealt with a

’

Bi 5° -

-839<

7

regulacion regarding certain billing and collection practices,

The regulacion was prospective and of general application to

all public ucilicy companies. Ic was issued by the agency who is

charged with the overall supervision and regilation of public

scilicy companies, to whom the state has granted certain

nosopolistic privilege’ and protections but from which the state

sas chosen to withhold the right to fix the rates of return on

doch its investment and equity. For the same reason Massachusects

Electric Company v. Department of Public Ucilicies, 1981 AS }277,

is noc coo helpful. Public Ucilities are particularly unique

statutory creatures and do not share many traits usually found by

she profit making encities comucnly encountered in America's

sazket place. The Tegulacions in those cases are siuply an

adsisiscracive articulation of that public policy. Ic is also

somevhat easy to brush aside Purity Supreme v. Attorney General

anc Greenleaf Finance Co. v. Saall Loans Regulatory Board,

1975 AS 356. Purity involved a prospective regulation of

vaiversal application to the garkec. place issued by the Attorney

Geceral co flush owt the statutory scheme of public proceccions

and remedies cto be afforded to Massachusetts consumers under

Chapter 93 A. The ragulacion’ set a forward looking standard

t>2 be observed by all sellers of all goods and did not adversely

alfecc asy significance interest of any particular group. Ia

Greeslea‘! che parties in thac case stipulated thac che regulaticas

was sot adjudicatory in nature. In any event the regulation

was prospective, of general fucure effecc to the permitted saxinua

tate structure to be used by lenders involved in the business of

lencing $3000 or less. There is such a long standing well grounded

sblic policy in this Commonwealth regarding small loan interesc

ates Legislatively articulated over the years by both criminal

azd civil statutes, the relationship between the regulation and

=:

2

>

the underlying statutory scheme seems basic.

-90-

Grocery Manufacturers cf Anerica v. Departsent of

Public Heaith,1979,AS 2291, is an interesting case but I ‘do noe

tegard it as supportive of the Commissiocer's position. Grocery

presented a challenge to the open date labeling requirement for

certain food products. It was mandated by a regulation promulgated

under the authority of Chapter 94. As that case is applicable to

this issue, Grocery seeus to suggest that one might not be encicled

to an adjwdicatory hearing in connection with a proposed regulation

focused upon requiring all within the food market place to affiz

certain labels to certain products siaply because one wight be

the subjece of a criminal prosecution. Such a possidility is

not such a significant interest when prosecution is “unlikely”

Csee P. 2308) withoue a prior administrative review and dosteites

which was provided for withia the regulation.

Cast Tron Seil Pipe v. Board of State Examiners and,

Gas Ficters, 1979 AS 2161, 396 NE2d 457, is the sost supportive

case for che Commissioner's contention that adjudicatory hearings

were soc required in che instant case. In that case the plaiaciff

was seeking to protect what ic considered a valuable property

sight, a patented clamp device ucilized ian connecting hubless

sewer or drain pipe installations. The defendant Board is the

regulatory Board generally charged undes Chapcer 142, Section 13,

with che saking of those regulations which shall constitute che

Massachusetts Plumbisg Code, and Chapter 142, Section 13, contains

no statutory requirement for a hearing. However, as a result of

some complaists about the reliabilicy of hubless systems, the

Board did hold a public hearing of a “Legislative” type. The

Board cecided to restrict the use of the hubless system Co

above-ground inscallacions and made that position known. However,

before taking dispositive action, the Board heid.a second hearing

buc denied Cast Iron's request that this later hearing be

adjudicatory in nature. The propriety of thac denial was usheld

by the Appeals Court. The regulation had a strong and an obvious

“ -91- * aw =~ , , apes

relationship with the underlying statutory scheme wherein the

Board should adope uniform reasonable standards based on generally

accepted standards of plumbing practice such as promote the public

health and safety. The Appeals Court seems to have given the

nature of the regulation itself controlling weight in determining

that adjudicacory hearings were not required. The standards set

dy the regulation were of materials by generic type withous

¢ifferentiation among the products of different manufacturers,

and Cast Iron, who had the burden of proof on the issue of the

tegulacion's neutrality, did not introduce the underlying standard

to which che questioned regulation had reference. The regulation

itself was noc only strongly related to the basic statutory schese,

-t was eatirely prospective not to become effective until expected

"existing inventories" are depleted. With respect to the question

cf whac "significance interesc” Cast Iron asserted, the case presexnts

an obscure picture. The exact nature of the patent was not disclose

The plaiacif! was not the only cast iron clamp maker. The effece

on other manufacturers was not presented. The specific effece

upon Cast Iron was not demonstrated.

The consolidated case at bar does not involve an obviously

large and indeterminate grouping of interest as did Cass Iron and

therefore should not be decided, as Cast Iron was, upon the |

"fuactional suitability” concepce. (see Cast iron supra, at p. 2162)

The issues addressed by the administrative hearings were Cwo:

1) Does a particular product have such dangerous characteristics

2s to be such a "hazardous substance” 45..that cerm is used in Section 1

mlianaani Bin

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hazardous substance", As such the question focuses directly upon

the asacure and characteristics of the product and its canufacturing

formulas, the standards, if any, utilized in its sanufacture,

storage, handling and shipping, che standards and customs of its

¢discribucion, ics shelf life, che installation practices and

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procedures, licensing feasibilicy, its labeling and warning

suicabilicies. Therefore, although broad in scope, the scrutiay

is nazrow ian its application, being limiced to a particular

icen and the inquiry to determine and find the facts regarding

its degree of hazard, if any, that the article possesses.

2) Should a specifically samed group (UFFI° home owners) be

granted a right to "repurchase" under Chapter 94 3B (constituting

a complece rezcval and sescoration) from the targeted group of

Y,

makers of that particular article

This target group obvfsusly was the wellspring for

the entire range of trade practices and uses and other activicies

which constituced the subjece of the inquiry; a source of

cousiderable significance as to the propriety of those practices,

and easily a primary source as to the feasibility cof those Cand

other proposed) practices. To argue that it would be seither

feasible nor practical to tap that source for the intended inquiry ©

would be Ludicrous; and of course the Commissioner does sot directly

so contend. The thrust of th Commissioner's argument is a sore

subtle boot-strapping. The Commissioner would cloak the Chapter

94 B hearing fact-finding function with an additional policy

making power predicated upon agency expertise and to be exercised

in a discretionary manner to implement the statuory scheme of

Crapter 94 B. Having so postured the Chapter 94 3 hearing, he

then argues that the indeterminate public has 4 right ecual

to the owners of the questioned res, to be heard on whether this

policy making power should be exercised. Therefore, an adjudicacory

hearing, given suck groupings, would not be feasible.

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1/ Ice was this relacively szall group of sanufacturers that

were singled ost. “Installers and discribetors wiro tighe

a

However, I rule chat the "functional suicabilicy” cese

of Cast Iron is not applicable here. This ruling is made because

of the nature of a Chapter 94°B hearing and also in reliance upon

the findings of fact in part above, that the industry sembers

were an easily identifiable and non-diverse group. The res

iavolved had an obvious spokesman, NAUFIM.

Ie seems self-evident that the makers of the res have

a significant substantial interest that is to be adversely affected

dy the regulations in question. With respect to the repurchase

regulations, it is enough to point to the huge retroactive Liability

potential imposed therein and the extraordinarily long duration of

that imposition. With respect to the ban regulation, it is obvious

thas vhen a produce is denied access to the market place, the

owner-maker-direccly sustains all of the effects and consequences

cf that prohibicion. In sum, the tmpace of rbese regulations

spon Le sakers wee direcc, tocal and complete. The effect upon

the makers was the prinary effect of those regulations.

I conciude chat the Massachusetts rule is that where

1) a@ person has a business property right of significance or

possesses a substantial business right; and 2) where chat righe

ct interest is act issue or at stake or in jeopardy by a proposed

agency action that will both adversely and directly affect such

a significance property interest or subdstanctisl right; chen such

snterested parties have a right to 1) know and to meet unfavorable

evidence of facts regarding their businesses and their dbusiness

practices and activicies. This right includes sot only cross-

examination and rebuttal offerings but includes che right to

offer the agency, affirmative favorable evidence of facts regarding

the business and its related activities. This. is’so because,

usually, decermisations regarding business and business activities

ace essenctiaily adjudicatory in nature. I¢ has also- deen observed

that as persons having such a significant interest, thosé persons

knew more about the facts concerning themselves and their

activicies chan anyone else is likely to know.. In any event,

2 conclude that the plaintiffs have the type and kind of interest

which required an adjudicatory hearing in Milligan v. Board of

Registration in Pharmacy.348 Mass. 491, 496.

Ta sum, even if it be decided that Chapter 94 8B is

silent on the question, having examined the nature of the regulation

iavolved, the type of hearing mandated by the statutory scheme “i

underlying the Hazardous Substance Labeling Act, and applying

che same cto this case, I find an adjudicatory hearing under

Chapter 30 Al is required.

2

I find and cule that the principle of statutory

conscruction which favors an interpretation of a questioned

statute so as to give it validity avoiding serious constitutional

issues is applicable and therefore even if Chapter 94 3B is

deezed silence on the necessity for an adjudicatory hearing, it

is co be implied as mandated by Chapter 30 A.

c

IF THIS COURT ERRED IN RULING THAT

ADJUDICATORY HEARINGS ARE REQUESTED,

THEN THE DECLARATORY JUDGMENT ACT

PROVIDES FOR JUDICIAL REVIEW OF

THESE REGULATIONS NOT LIMITED TO

THE ADMINISTRATIVE RECORD, ANO THE

BURDEN OF PROOF TO ESTABLISH THAT

THE REGULATION AS FACTUALLY APPLIED

IO PLAINTIFFS IS ARBITRARY AND CAPRICIOUS.

ri.

First, both the ban and the re-purchase reguation

considered together and considered separately and independent of

ezch other constitute a deprivation of a property right accompanied

oy state action, and I so rule. Ordinarily, therefore, a hearing.

should precede such a deprivation. Fuentis v. Shevin, $07 U.S. 67, 88.

Hcwever, where the deprivation is only of property rights, if there

is opportunity .for ultimate judicial review, then at least in certain

instances this does not constitute a denial. of procedural due

process. Haverhill Manor, Inc. v. Comm. of Public Welfare,

3€8 Mass. 15, 28.

The Commissioner contends that the administrative hearing

given fs all that due process requires. Although I have ruled to

she contrary, even if I am in error, this is not disoositive of

what type of judicial review becomes available to these plaintiffs.

The Commissicner contends that the standard of review is narrow

2nd the plaintiffs must show that the regulation is arbitrary or

sepricious. The Commissioner argues that the regulation is to be

sustained uniess the plaintiffs can show the absence of any

sonceivable ground upon which the regulation may be upheld. However

sn2 Commissioner goes further and states that the "sole" question

sere which is dispositive of the olaintiffs' claims is whether

-96- Bs 5 « py: LSS ees

- Soi

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specifically thac that parcicular group constituted "a significance

sumber in and of itself", when the Commissioner sade neither a

finding as to the number of complaints sor any findings as to the

complaine ratio to the number of installations, is an arbitrary

finding. Certainly.“a smajoricy of nineteen” is very significance

if the whole is nineteen, less significant if ninety, discernable

if nineteen hundred, siniscule if nineteen thousand. The aumber

of persons suffering adverse health symptoms by itself is only

a sumber; what gives the number its significance is its relation- .

ship to the extire group under study. To give a fraction a

determining significance independent and irrespective of the

quantity of the whole is not reasonable or rational. Perhaps the

Commissioner sensed the same when he thereafter found "In all.

Likelibood, substancial numbers of other persons were similarly

affected". However, that finding was noc footed in fact, but

rather was grounded upon an unsupportdd supposition. To proceed

to utilize the police power of the Commonwealth by ispoging a ban

wpon @ product based upon such supposition is arbitracsy and

capricious action.

6) That the ban is arbicrary and capricious since there

has been no showing that less restrictive alternatives, such as

Licensing installers or establishing installation standards, would

not property effectuate an adequate solution. The failure to

concuct a less burdensome remedy vas arbitrary.

7) That the repurchase regulations ace arbitrary and

capricious in segquircing an industry member co expend substantial

funds without ever affording it an opportunity to question the

claimant, cross-examine witnesses, contest causation, or otherWise

exercise minizsal procedural rights to which ic is entitled as

a sactter of due process of law. They are arbitrary and capricious

in the refusal to allow the industry member to determine whether.

the UFFI ac issue is its UFFI or even to allow an industry senber

-97-

"given che voluminous record ... sow filed with chis Court and

the detailed findings and conclusions...is there any basis to

find chat the regulations représent a reasonable exercise of

the Commissioner's discretionary authoricy...". That is as

inaccurate statement. For purposes of this part, we have assumed

that an adjudicatory proceeding was sot required. Therefore the

“voluminous record" is not a "cartified copy of the record of

the proceedicgs under review" as that phrase is used in Chapter

304, $.14; and that statute is not applicable co the judicial

teview in this case which is found in Chapter 30a, S. 7? The

agency record in this case is a huge gratuitous collection of

GBasvera writcen submissions and oral statements and urgings.

Indeed, ac least with respect to the re-purchase hearings ict

is not complete.

The plaintiffs actack che regulations under che clais

of substantive due process. They seek a declaration of their

rights pursuant to Chapter 231A. If the plaintiffs had so

constitutional or statutory right to an adjudicatory hearing,

certainly to insure a fair and meaningful judicial review, chen

Chapter 30A, $.7, which sakes available a declaratory judgment

procedure, is to be construed is a manner which persnits the

plainciffs fair and reasonable opportunity to present their claics.

In this-case the plainciffs have the burden to go forward at

trial and present their proofs. tic is incumbent upon the plaiaciféis

in order to prevail to demonstrate by a fair preponderance of all of

the evidence produced to a fact finder that these regulations, ot

either of them, as applied to che plaintiffs upon che totality of

the circumstances found are either unconsticucional or are irrational

ia, their operation.

- 98.

THE BAN AND REPURCHASE

ARE ARBITRARY AND CAPRICIOUS

I find that the plaintiffs have sustained their

Durden and have established by a fair preponderance of the

evidence that the imposition of both the ban and the re-

purchase regulations are without rational basis in fact.

Specifically I rule, 1) thae ic was arbitrary and

Capricious to classify exposure to formaldehyde as an irritant

ot as toxic at any level of concentration. Consequently the

Sisdisg chat formaldehyde is "hazardous" independent and

Szrespective of any given level of exposure vas, likewise,

wisthouc a rational basis in fact.

2) Thac, since the Commissioner was unable to fiad as

2 fact the amoust of formaidehyde UFFI contributes to the

isdoor environment and since sany other potential sources are

prese=c within the ordinary hose, the selection of UFFI insulatios

Sor separace and different treatment was capricious. As found

Sy the facets above, the swany industrial uses of formaldehyde are

because of ics characteristics as a chemical bonding agenc.

Urea Sormaldehyde resins are used in the production of plywood,

particle boards and ceiling materials. In any given. home, the

sudflooriang, the carpet, its bonding agent, the incterioz walls,

she ceilisg, the cabinetry are all urea formaldehyde resis

products. These products have the same propensities cegardiag

c £f-gasing and hydrolysis. Each, any, and all such products say

asd probably do contribute to the lewel of formaldehyde concentration

feund wicthia a home (with er without UFFI iasulacion). Sisce the

Censissiones did act know the contribution ef UFFI insulation to

the indoor atmosphere and could set even find whether the indoor

atsosphere of a UFFI home had a concentration level equal to or

. a

-$o- - !

2 ey at

in excess of a non-UFFI home, the banning of the UFFI insulation

was arbitrary.

3) That siice the Commissioner could have easily

undertaken « comparison study of the smbient levels of UFFI and

non-UFFI homes and could have undertaken an epidemiological

study and fixed an incident rate for symptoms allegedly caused

by UFFI, che promulgation of the regulations without such knowledge

was arbitrary and capricious. Even if this Court's ruling on che

necessity for such adjudicatory hearings is deemed to be im error,

certainl’ ‘or an agency to promulgate adssinistracive regulacions

rooted in ignorance, Leaving the importance issues of causal

connection and contribucion and incident rates unanswered and,

indeed, even unexplored, is to perform its agency function is as

irresponsible and totally arbitrary amanner.

4) That the Commissioner's finding that UFFI creates an

appreciable risk of harm to a significance sumber of persons vas

a findiag not based upon any rational basis. The evidence establishe

and I conclude chat ic is highly unlikely that any individual will

experience any “substantial personal injury or substantial illaess"

as that phrase is used in Chapter 943, Sec..1, the proximate cause

of which is an exposure to an unacceptable level of forzaldehyde

caused by a properly installed Tripolymer installation. Likewise,

since the evidesce warrants, I find for the Formaldehyde Tasticute -

and Sorden in thac there is no rational basis upon which one aay

conclude chat ic is likely thac significant numbers of persons vill

experience such a “substantial” injury or {itnene as the nrovimare

result of formaldehyde exposure ‘rom UFFI insulation when it is

properly iatalled.

S$) That the agency finding that UFFI either “caused or

significantly contribuced” to cercaia adverse health syuptous

experienced by che sajority of ainetees bensusers, ‘and more

to verify che existence of UFFI in the building at issue.

8) The tepurchase regulations are arbitrary and

capricious in requiring an industry member to repurchase UFFI -

as a resulc of the existence of certain health symptoms while

precluding the introduction of any evidence tending to show that

the symptoms in question are not caused by UFFI oz formaldehyde

while prohibdicing che introduction of evidence om causation

and not requiring any finding by che administrative ceviewer

that those symptoms aré\caused by UFFI.

9) The repurchase regulations are arbitrary aad

capricious in requiring an industry member to repurchase UFFI

as a resulc of an occupant’s having experienced one health

symptom on one occasion only since che installation of. UFFI aad

never having experienced thac symptom again, and in denying the

industry member any opportunity co be heard upon chat issue,

10) A finding for Borden and the Institute is required

because che repurchase regulations are arbitrary and capricious

in precluding che introduction of any evidence as to the formaldehyde

level in che indoor or oucdoor ambient air and isn failing co condicion

“tepurchase”™ on a showing that there is any formaldehyde inside

the home. In precluding the introduction of any evidence as tc

the presence of ather sources of formaldehyde. and particularly

by excluding the introduction of any evidence a» to the presence of

aay indoor air pollutants, the regulations are arbitrary and

capricious.

‘1t) =«The Rea regulations are arbicrary and capricious

in imposing an improper burden of proof upon the industry menber

because chey obligate ce referee to find that the statements of

the individual claimant are true unless the record “clearly and

convincingly demonstrates chat...(chose allegationg)...are untrue”,

ae a -101-

12) A finding for Borden and the Institute is required

because the repurchase regulations do not provide for any actual

asd meaningful adjudicatory rights before a “Certificate of Right

to Repurchase” is issued.

THERE ARE SEVERAL ISSUES OF LAW THAT HAVE NOT BEEN

PREVIOUSLY ADORESSED SUT WHICH SHOULD BRIEFLY BE DESCUSSED:

1.

Are the repurchase regulations repugnant to consticucional

due process? The answer is hedged. If the plainciffs have a right

to an adjudicatory hearing before the product is banned, the agency

has considered che issue of hazard, Many of the questions that

plaincifs might seek to raise in a repurchase hearing would have

previously been considered. The Hazardous Substance Labeling Act

tepurchase concept never conteuplaced a cumbersome, individual,

tepecicive, adversary proceeding. If one looks only act the repurchase

tTegulacions and from che view chat no prior adjudicatory hearing

is to be had, then che regulations are certaisly suspect. The

fundamental poinc is simply chac the plaintiffs cannot de denied

access to all forums. If, as was attempted herein, che plainsifis

arte not allowed co seaningfully contest the Commissioner's proposed

finding of hazardous, and then are silenced at the repurchase bearing |

on the theory chac the issue of hazard has been decided, due process

has been abused. However, in this case the plaintiffs have sow had

a judicial review (even if it is held they are noc entitled to a

prior adjudicatory hearing) is which they have had a full opportunity

to present proofs and confront the evidence offered against Chea.

Deferzal is not always denial and is somecizes permitted. Consequently,

the issue need noc be further examined.

s

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Are the repurchase regulacions in conflict with Section &

of the Hazardous Substance Act? Once again, the facts as found -and

the rulings sade herein have diminished the importance of this issue.

However, it should be stated that the remedy of repurchase set forth

in the regulation dees sot exceed its statutory basis. Siaply put,

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the legislacure entrusted che implemensacion of its policy to the

agency; acd this agency had the power to fashion a repurchase

scheme This courc's rulings are that although such a repurchase

plan would be authorized by law, in this case there should have

been a prior adjudicatory hearing; or, if deemed an administrative

tegulacion, that it lacks a rational basis.

However, the ruling should be carefully stated since, if

Spon appellate review, ic is determined chat neither a prior

adjuiicatory hearing, is necessary and that this administrative regulation does

have a rational basis, then'such a referee-type tribunal as created

hereunder would be extremely troublesome. This is not because

of Chapter 943. I rejece the contentions of the plainciff thac

Chapter 948 limits the purchaser to pursue solely his installer

oz Limits che amount of recovery to the purchase price. The

scheme vould be trcublesome for two reasons, the first being

the constitutional due process considerations nentioned immediacely

above. If this referee-cribunal created by these regulations

is to be construed as an adjudicatery body, it is importaat to

note the heavy burden of proof thac is upon those who would avoid

Liability, and chac ail issues of causation are barred. No hearings

aze co be held, no questions asked, so evidence taken. Second,

Chapcer 9438 does sot authorize the Commissioner to create such-

an adjudicacory tribusal. Ic is only if che referee review is

considered as a reasonable administrative appendage of stated :

policy implementation (che parties having hdd previously \opportunity i

to contest thac policy) that suéb a repurchase scheme is torbe .

considered as properly authorized, ) y, ’ 3

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3.

The pre-emption claims raised have no application to

any of che cases at bar. Suffice co state there is so basis for

the contention that federal law has pre-enpted the field plowed

by Chapter 943. Certainly there is se irreconcilable: conflict,

and the Comncnvesith's assettion ef power ts plainly withia the

scope of its police power. There is nothing withia the Commerce

Clause which aids the plaintiffs. The issue is se clear ne

extended discussion would be helpful.

4.

The Anderson foam case has been brought as a class action

on behalf of all urea-formaldehyde foam insulacion contractors

or installers. There are approximately one hundred fifty

contractors who have made retail sales of UFFI to be used by

residents and who are adversely affected by the repurchase

regulation. However, certificacion of the class has never been

actively sought, and in light of the findings of fact and rulings

made herein, it does not seen prudent co act upos the question

of certificacion at this juncture.

S$.

% The motion for Summary Judgement on behalf of the r

Commissioner previously taken under advisement is sow to be ecdorsed

"Denied for reasons set forth in a memorandum filed this date”,

a

Conclusion

Chbviocusly individual homeowners who seek compensatory

damases from manufacturers, distributors and installers are

uneffected by this case. Those private zemedies for breach cf an

implied warranty of fitness or merchantability and or for negli- ;

gent manufacture or installation remain fully available to those who

have been agcrieved by either such necligence or breach of

warranty.

_ The scope of the present ruling is limited solely to the

issue presented and should net be misconstrued as creating anv

obstacle to any homeowner seeking relief from either a negligent

installation or from unfit insulation oroduct.

Simply put this court rules that before the Commissioner

can ban all future use of UFFI’ insulation, he must hold an

adjudicatory’hearing. (And in the alternative, if the legislative

type hearing was sufficient, then there does not exist in the ,

evidence presented at trial a sufficient hasis which would

warrant the conclusions which the Commissioner reached). Nothing

contained herein prevents the Commissioner from. undertaking

such an adjudicatory hearing.

Order for Judcment !

The prevailing parties are to prepare a suggested form .

of judgment. All parties shall be heard on that issue on Friday,

January 29, 1992 11:30 A.M. Suffolk Motion Session.

Justice o the Suserior Court

Entered: : oy PPP OY Wek eae J, an

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SUMMARY OF THE EVIDENCE

AND FINDINGS AND CONCLUSIONS

CONCERNING FORMALDEHYDE

AND UFFI

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Iatroduct ion . . . . . . . * . * . . . . . . . . * . >.

za. Chemical Compesition of UFFI..

Izz. Description of Health Protless te amigo cy UFFI

Consumers . . * . * . . . . * . . . . * . . . . <

A. Test isony of Massachusetts Eome-Dwellers.

3. Repurts of Health Problecs by Non-Consimers.

C. Conclusions Concerning Reported Sy=ptcers.

“Iv. Tee Eeission of Formaidehyde From UFFI. .. 1... +--+ +s 2

A. Explanasvion cf the Relezse of Formaicehyce Fron Uri.

Release Due to Eeat cr Eusidicy.

Vapor Release Because of the Chemical Cexposition of UFFI.

Faulty Installation es a Cause cf Vapor Release.

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Scientific Tests Reflecting Formaldehyde Release from UFTI.

w

» Laboratory Tests.

2. Asbiest Air Tests Showing Forzaldehyde Leveis in Ecses

Insulated with UFT=z.

Cc. Coznelusions Concerning Formaldehyde Emissions frc= UFFi.

Y. Health Effects of-Forsaldehyde .... 525s ce cevrevee 8B

. A. Asisal Studies.

3. Workplace Studies and Occupational Standards.

c. Clisical and Epidemicicgical Studies.

Dd. Specific Health Effects cn Children.

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- Expert Cpinicns Concerning the crritating, Sensitizing ané Toxic

Propercies of Formaldehyde.

“Formaldehyde as an Irritant.

Formaldehyde as a “Strong Sensitizer.”

Toxicity of Formaldenyde.

wr

Exper= Opinions and Regulator; Standerds Concerning Safe Levels

of Forzaldehyde Vapors in Zones. .

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G. Conclusion Concerning Health Effects cf Formaldenyde.

Appendix: Charts #1 and #2

‘i

Caus az ion . . . *. * . > . . > . . . * . . > . . . . . . * . Se

A. Inferezces Drawn from the Evidence.

B. ments’ Arguments Concerning Causatior.

~~

.

Formaldehyde Esissions from Sources Other than: UFFI ané in

Bchtevir. Homes.

(a) Formaldehyde Emissions from Products Other than UFFI.

(>) Formaldehyde Levels in Non-UFFI Homes.

(ec) Conclusion.

s

2. Amount of Formaldehyée in Outside Ambient Air and in Nese

UFrri Scenes. ;

3. The "Therzally Efficient House” Effect.

C: Overall Conclusions Concerning Causaticn.

Vo. Characterizaticn of the Frequency of Occurrence of Adverse

Bealth Effects Due to UFFI. . . » se ec wveseveeawee 6 OT

A. Number of People Whose Eeaith is Adversely Affected by UFFt.

‘ 2. tumber of UFFi-Iastaliecions in Massachusetts.

i. iscussion.

2. Conclusicns.

C. Conclusion Concerning Frequency of Health Effects. r

a

:3

Vizz. . Advereptives. toe Ban ef OFFS. 6 0 wb kc 6 Sy oe oe Oe

A. Recedies for Individual Consumers.

1. ‘Remedies Porpesed ty the UFFI Industz;.

2. Otservations by Jor-industry Fecple other chan Consumers

Concerning the Efficacy of Remedies Prorosed sy Iadustr;.

3. Constmer Experience with Renedies Proposeé ty the indust=.

(a) Consumer Experience as Reported by NAUFIM, for which

: ' there was no Consumer Testizony.

(>) Consumer Experience which was Reperced by NAUFIM and by

the Consumer ia his or her Testiscny.

(ec) Consumer Experience Which was Reported ty the Consumer

Only.

4. Conmelusions Concerning Remedies.

3. Licensure of Installers andReguletion of Installation Standards.

i. Discussion.

2. caclusions Concerning Licensure of Installers and Regulevion

of Isstaliation Standards.

Cc. Latellins.

ee Zecoemse Tapact| of a 3en eof UFFI. «cue o's 8 es ete 6 ee aoe

,

A: impact of Saznsing USTI.

a. ispact on Masufacturers.

e. s=apact on Distributcrs and ins<allers.

3. ispact on the Public.

(2) Health Cost Inpect.

(>) Esergy Cost Impact.

3. mpact of Keeping Urri in Commerce.

Ce Cosclusions Concernisg Econemic Ispact of Sansiss UFFI.

yi Temetineet. Demeer 3 6° 66 oe 2 0 Htc ete we oe he g

.'

4

Xi. Findngs and Declarations Concerning Formaldehyde and UFFI . 107

>

\

x

a ‘ f - ~ +

: “ - + = = . * .

rs St, Sa okie : oe op. 1 ee 4 ~ ,

BP Se Se Roe pet eee hte i Pe mai x

a

AYMARY OF TRE EVIDENCE AD

FIUDINGS AND CcuCLusrons

CONCERNING FORMALDEHYDE AND UFFi

-

Introduction:

This summary reviews she extensive evidence sresented by interested >eorl

pursuant to the March, 1979 public hearings concerning urea-formaidehyce foax

insulation (UFFI). It also provides certain findings and conclusions. in

order to provide an overview of the contents of the summary, this introductics

will consist of az annotated outline of each of the topics reviewed in the

summary itself ia the order in which they appear:

I. introduction.

Chemical Cosmsosition of UFFl.

? er

_ Tais section provides a brief backgroune on the chemical compenen<s cf UTI

anc how those ccmponents"are installed in consumers’ homes.

TII. Descrivticn of Eealth Problers Excerienced by UFTI Consumers.

Subsection A of this section reviews testimony of Massachusetts hese-

éwellers who ba

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