EPA Confirms Support for Regulation of PFAS as Hazardous Substances under Biden-Era CERCLA Rule

The US Environmental Protection Agency (EPA) recently announced its decision to continue fighting a petition in the US District Court of Appeals for the District of Columbia (DC Circuit) challenging a Biden-era rulemaking that designated two per- and polyfluoroalkyl substances (PFAS) as hazardous substances under Section 102(a) of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). The decision by EPA came after more than six months of stays in the litigation while EPA Administrator Lee Zeldin and the agency decided whether to abandon a rulemaking that used new statutory authority to designate two PFAS—perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)—as hazardous substances.

EPA’s decision to continue regulating PFOA and PFOS as hazardous substances under CERCLA could result in a surge of litigation involving parties that used and released, disposed, or passively received these chemicals onto their property in the United States. While the rule must still survive the ongoing litigation in the DC Circuit, the long-term regulation of PFOA and PFOS under CERCLA will provide EPA with significant authority and discretion over national PFAS cleanup policy and the scope (and potential cost) of individual cleanups involving these chemicals.

THE RULEMAKING

In September 2022, the Biden administration issued a notice of proposed rulemaking proposing the listing of PFOA) and PFOS) as hazardous substances under CERCLA Section 102(a). While the announcement was not surprising in light of general bipartisan support for further regulation of PFAS, the Biden administration’s decision to use new authority under Section 102(a) became a flash point for industry groups, EPA, and the public. EPA issued the draft rule without a regulatory impact analysis (RIA) and claimed that it had authority to designate the chemicals as hazardous substances without regard to cost considerations under a “substantial danger to public health or welfare” regulatory framework in Section 102(a) that had never been described by EPA, much less applied.

In April 2024, EPA announced the final rule designating PFOA and PFOS as hazardous substances. EPA responded to one of the most significant flaws in the rulemaking by issuing an RIA with the final rule. EPA also laid out a framework for its decision to designate PFOA and PFOS as hazardous substances based on the agency’s determination the chemicals pose “a substantial danger to public health or welfare.” In addition to the “substantial danger” analysis, EPA performed a discretionary analysis assessing the advantages and disadvantages of regulation of the chemicals under CERCLA.

Critically, EPA determined that there was sufficient information available to designate PFOA and PFOS as hazardous substances because, under its statutory authority, EPA only needed to determine “there is a possibility” the substances “present a substantial danger.” EPA noted that CERCLA Section 102(a) does not require the agency to “have certainty” that chemicals pose “a substantial danger” or require “proof of actual harm” before EPA makes a designation decision. In the final rulemaking, EPA remained non-committal as to whether it would consider costs in future designations of hazardous substances under Section 102(a).

LEGAL CHALLENGE TO DESIGNATIONS

In June 2024, several petitioners challenged the PFOA and PFOS rulemaking in the DC Circuit under the Administrative Procedure Act (APA). Among other challenges, the petitioners argue that EPA significantly underestimated the costs of the designations in the final rule, exceeded the scope of its statutory authority in applying Section 102(a), and violated notice and comment procedures under the APA in issuing the proposed and final rules.

Following initial briefing, the litigation was stayed following the change in administration. One stay of the litigation followed another as EPA debated the current administration’s approach to the regulation of PFAS. EPA has now made a final decision regarding the immediate future of the designations, but many questions remain regarding how PFOA and PFOS will be addressed at thousands of potential sites across the country.

ENFORCEMENT POLICY AND PASSIVE RECEIVERS

Coinciding with EPA’s April 2024 announcement of the final rule designating PFOA and PFOS as CERCLA hazardous substances, EPA published its PFAS Enforcement Discretion and Settlement Policy Under CERCLA (Enforcement Discretion Policy), which outlines how EPA intends to exercise enforcement discretion for matters involving PFAS under CERCLA. The Enforcement Discretion Policy made clear that EPA’s focus would be on holding “responsible entities who significantly contributed to the release of PFAS contamination into the environment”—including PFAS manufacturers, manufacturers that used PFAS in their processes, industrial parties, and federal facilities—while also explicitly stating that the agency does not intend to pursue response actions or costs against such “passive receivers” as farmers, municipal landfills, water utilities, municipal airports, and local fire departments.[1] Notably, the Enforcement Discretion Policy continues to remain in effect.

The sentiment about the potential impact on and need to address issues relating to these “passive receivers” has continued to be an issue of concern for the agency and current administration. In his April 28 PFAS Agenda, for example, Administrator Zeldin expressed his support for maintaining the law’s “polluter pays” model and plans to work with the US Congress on targeted liability carveouts for “passive receivers.”  And while EPA’s September 17 announcement of its plans to defend the designation does not explicitly reference the Enforcement Discretion Policy, the underlying principle of protecting passive receivers was made clear, as well as EPA’s acknowledgement that action from Congress is needed to fully address concerns with passive receiver liability. As Administrator Zeldin noted, “EPA intends to do what we can based on our existing authority, but we will need new statutory language from Congress to fully address our concerns with passive receiver liability,” and has offered EPA’s technical assistance to Congress on this issue.  

The issue of potential carveouts for passive receivers remains a thorny one, with many regulated parties expressing concerns about where the lines will be drawn and the ramifications of opening the door to such limitations to CERCLA’s otherwise strict joint-and-several regulatory scheme. Meanwhile, bills previously introduced in Congress by Senator Cynthia Lummis (R-WY) (such as S.2226, as amended, in the 118th Congress) and by Representatives Marie Gluesenkamp Perez (D-WA) and Celeste Maloy (R-UT) (H.R. 1267 in the 119th Congress) have not advanced.

IMPLICATIONS OF REGULATION UNDER CERCLA

Now that EPA has confirmed its support of the PFOA/PFOS hazardous substance designations, parties can expect to see an increase in litigation for cost recovery and contribution under CERCLA by government and private parties. Litigation that was paused while waiting to see which direction EPA would take has already begun moving forward (including potentially in the AFFF MDL), and other parties that may have been waiting in the wings may now begin advancing their claims.

Meanwhile, parties engaging in remediation of PFAS face laboratory capacity challenges as well as the absence of clear guidance from EPA as to how to dispose of the associated wastes, as EPA has issued only interim guidance on destruction and disposal of PFAS-contaminated wastes.

RELATED REGULATORY DECISIONS ON PFAS

EPA’s announcement to move forward with this rule comes against the backdrop of a large deregulatory push by EPA. And while EPA has taken steps to relax some PFAS-related regulations, including the announcement of its decision to pull back on the regulation of four PFAS under the Safe Drinking Water Act and extend the deadline for compliance with the PFOA and PFOS MCLs by two years, addressing PFAS contamination remains an issue with bipartisan support and a clearly stated priority for the administration.

It also remains to be seen whether the rule will withstand judicial review, as the litigation challenging the rule will still have to run its course. Notwithstanding the pending legal challenge, the rule will remain in effect through the course of the litigation, and potentially implicated parties should begin preparing for potential response and cost recovery actions (under CERCLA Sections 106 and 107) and other compliance requirements for PFOA and PFOS, including reportable release notifications (under CERCLA Section 103).

STAY INFORMED

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