On April 19, 2024, the United States Environmental Protection Agency (EPA) issued a pre-publication notice regarding its designation of two per- and polyfluoroalkyl substance (“PFAS”) compounds, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund. EPA’s rule, for the first time, will subject a broad range of industries to potential liability for releases of PFOA and PFOS and impose the entire suite of CERCLA compliance obligations onto entities whose operations involve PFOA and PFOS. CERCLA establishes liability for current and former owners and operators of facilities where hazardous wastes were released or disposed, generators and arrangers of disposal or transportation of hazardous substances, and transporters of hazardous substances. Under the new rule, entities that handle PFOA and/or PFOS, including manufacturers, could face direct liability for the recovery and remediation costs of PFOA and/or PFOS. According to the pre-publication notice, the final rule will also impose stricter reporting requirements for releases and require compliance with federal law on transportation and disposal of PFOA and PFOS. The rule will become effective 60 days after it is published in the Federal Register. In addition, EPA issued a policy document that explains how and when EPA will exercise its discretion not to pursue potentially responsible parties (PRPs) that it deems did not play a significant role in releasing or exacerbating the spread of PFAS into the environment.
Background
PFAS generally, and PFOA and PFOS specifically, are sometimes referred to as “forever” chemicals because their strong carbon-fluorine bonds cause PFOA and PFOS to be extremely resistant to degradation in the environment. Since the 1940s, PFAS have been used in a variety of products due to their resistance to degradation, their stability/non-reactivity, and the barrier they provide against water, oil, grease, and staining. PFOA and PFOS have historically been used in a wide range of consumer products including carpets, clothing, fabrics for furniture, and packaging for food and cookware that are resistant to water, grease, or stains. They are also used for firefighting at airfields and in a number of industrial processes. The principal worldwide manufacturers of PFOA and PFOS and related chemicals phased out their production in the early 2000s, although PFOA and PFOS may still be produced domestically for certain uses and by international companies that export treated products to the United States.
Under CERCLA section 102(a), the EPA Administrator has the authority to promulgate regulations designating as hazardous substances such elements, compounds, mixtures, solutions, and substances which, when released into the environment, may present substantial danger to public health or welfare or the environment. Once a federal agency learns of a release or potential threat of a release of a hazardous substance, pollutant, and/or contaminant, CERCLA authorizes a response in one of three ways: by determining no action at the federal level is warranted; by undertaking a removal action (if the situation presents a more immediate threat); or by assessing the relative risk of the release to other releases via the National Priorities List listing process that is the first step towards a longer-term remedial action.
In September 2022, EPA issued a proposed rule designating PFOA and PFOS, and their salts and structural isomers, as “hazardous substances” under CERCLA. Citing to studies used in EPA’s 2022 interim updated health advisories for PFOA and PFOS, EPA in the proposed rule stated that the listing is appropriate because “the totality of evidence about PFOA and PFOS described here demonstrates that they can pose substantial danger to public health or welfare or the environment.” Importantly, this rule marks EPA’s first use of its authority under CERCLA section 102(a) to designate new hazardous substances.
Summary of CERCLA Designation and the Rule’s Requirements
Reporting
As discussed above, the final rule will create stricter reporting requirements related to releases of PFOA and PFOS. Under the rule, any release of PFOA and PFOS of one pound or more into the environment within a 24-hour period must be immediately reported to the National Response Center as well as state, tribal and local authorities under CERCLA and EPCRA.
Cleanup Site Designation
Federal and state cleanup actions are also implicated by the final rule. Previously, the federal government was only authorized to cleanup PFOA/PFOS contamination under certain circumstances, primarily when it found that a release may present an imminent and substantial danger to public health or welfare. The designation lowers the cleanup threshold so that EPA may designate an area as a cleanup site if it determines an area with known PFOA or PFOS contamination poses a threat to public health or welfare of the United States or the environment.
Cleanup Site Liability
Entities that handle PFOA and/or PFOS, including manufacturers, could face liability for the recovery and remediation costs of releases or threatened releases, and would need to comply with federal law on transportation and disposal of hazardous waste. Owners of land contaminated with a hazardous substance are considered PRPs and are jointly and severally liable for response costs. CERCLA also imposes retroactive liability; prior owners of contaminated land may be held liable under the statute.
CERCLA Enforcement Discretion Policy
In addition to the pre-publication notice, EPA issued a separate CERCLA enforcement discretion policy in which EPA states that it “will focus on holding responsible entities who significantly contributed to the release of PFAS into the environment, including parties that manufactured PFAS or used PFAS in the manufacturing process, federal facilities, and other industrial parties.” In doing so, EPA sought to assuage concerns from certain “passive receivers” that they could be held liable alongside those parties that have played a more significant role in releasing or exacerbating the spread of PFAS into the environment, such as those that have manufactured PFAS or used PFAS in the manufacturing process and other industrial operations. The policy explains that “EPA does not intend to pursue entities where equitable factors do not support seeking response actions or costs under CERCLA, including, but not limited to, community water systems and publicly owned treatment works, municipal separate storm sewer systems, publicly owned/operated municipal solid waste landfills, publicly owned airports and local fire departments, and farms where biosolids are applied to the land.” EPA’s enforcement discretion may be extended to additional parties outside of these categories based on the following equitable factors:
- Whether the entity is a state, local, or tribal government, or works on behalf of or conducts a service that otherwise would be performed by a state, local, or tribal government.
- Whether the entity performs a public service role in:
- Providing safe drinking water;
- Handling of municipal solid waste;
- Treating or managing stormwater or wastewater;
- Disposing of, arranging for the disposal of, or reactivating pollution control residuals (e.g., municipal biosolids and activated carbon filters);
- Ensuring beneficial application of products from the wastewater treatment process as a fertilizer substitute or soil conditioner; or
- Performing emergency fire suppression services.
- Whether the entity manufactured PFAS or used PFAS as part of an industrial process.
- Whether, and to what degree, the entity is actively involved in the use, storage, treatment, transport, or disposal of PFAS.
In addition to exercising its discretion not to pursue these parties, EPA can provide further litigation and liability protection to parties that satisfy the equitable factors in two ways. First, in its CERCLA settlement agreements with major PRPs, EPA can require the settling parties to waive their rights to bring contribution claims against non-settling parties that satisfy the equitable factors. Second, EPA can enter into settlement agreements with the parties that satisfy the equitable factors. Parties that resolve their liability through these settlement agreements are not liable for contribution claims related to the matters addressed in the settlement. Therefore, non-settling PRPs are precluded from pursuing the settling parties for contribution costs related to the settlement.
Transportation and Disposal
In addition, entities that handle PFOA and/or PFOS will have to comply with federal transportation and disposal requirements. In its enforcement discretion policy, discussed above, EPA stated its focus will center on holding accountable major PRPs as well as other industrial parties. Compliance with hazardous substance disposal and transportation requirements under CERCLA is often fraught with uncertainty. EPA’s addition of two PFAS compounds to the “hazardous substance” list may add to that uncertainty for regulated entities and industry stakeholders that transport or dispose of PFOA and/or PFOS. EPA has also stated that it intends to pursue federal agencies or federal facilities when they are responsible for PFAS contamination. Accordingly, it is likely that EPA will hold accountable federal agencies or federal facilities involved in the transportation or disposal of PFOA and/or PFOS as well.
State Cleanup Programs
Many states have adopted hazardous waste cleanup laws, some of which incorporate the federal definition and listing of hazardous substances by reference to CERCLA. In those states, the final rule effectively adds PFOA and PFOS to the umbrella of hazardous substances subject to state oversight. However, in most cases, there is not complete overlap between state and federal cleanup laws. Therefore, entities affected by the final rule should be mindful of differences in scope, defenses, statutes of limitation, or other cleanup program provisions that may have consequences for cleanup actions involving PFOA or PFOS.
Looking Ahead
The far-reaching consequences of this rule highlight the importance of evaluating potential new regulatory compliance obligations and/or exposure to CERCLA cost recovery or contribution claims. The Stoel Rives team will continue to track developments related to the rule and is available to assist companies with analyzing the implications for their businesses. Reach out to any of the attorneys listed below to get started.
