On Friday, 19 April 2024, the US Environmental Protection Agency (EPA) issued a final rule to designate two common per- and polyfluoroalkyl (PFAS) chemicals, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund.¹ EPA can now require past and future potentially responsible sources of PFAS contamination, and facility owners and operators of contaminated property, to investigate and remediate PFAS contamination and require them to pay for remedial investigations and cleanups.² It also allows persons who incur response costs at PFAS contaminated sites to recover their costs as well. Given that PFAS compounds are alleged to be ubiquitous and the designation applies to closed Superfund sites where the remedy has been completed, the impact of this rule could be extraordinary.

EPA COULD REOPEN CLOSED SITES TO ADDRESS PFOA AND PFOS CONTAMINATION

In addition to the extended cost of investigating PFAS contamination, remediation technologies are still evolving. As a result, it will be difficult to conduct the type of remedial evaluation and decision making required under CERCLA. To date, remedial actions to address Superfund sites did not address PFOA and PFOS contamination. Now, formerly remediated sites that were closed could be reopened by EPA through five-year reviews. EPA could also seek to reopen sites that it previously deemed closed which do not require five-year reviews. Furthermore, because PFAS are so common in consumer and industrial products, the types and numbers of potentially responsible parties (PRPs) at a given site has the potential to increase broadly.

EPA OUTLINES WHERE IT WOULD FOCUS THROUGH ITS ENFORCEMENT DISCRETION POLICY

As actions to address PFOA and PFOS commence, litigation to cover response costs between the agencies and the PRPs and among the various PRPs to apportion liability is also likely to expand. CERCLA is a strict liability statute, meaning an owner of a contaminated facility can be liable for the cleanup costs whether or not they were responsible for causing the contamination in the first place.³ Since PFAS are known to be present in many landfills, wastewater discharges, and wastewater biosolids, this liability could extend to municipalities and private companies that handle these waste programs. This potential liability drove many comments on behalf of these “passive receivers” during the public comment process on the proposed rule, and led to efforts in Congress to limit CERCLA liability for these parties.⁴

In response to this concern, EPA also released a memorandum explaining how it will exercise its enforcement discretion with regards to PFAS.⁵ In this memorandum, EPA distinguishes between “major PRPs,” meaning the PRPs who manufactured PFAS or used PFAS in the manufacturing process and other industrial parties that used PFAS in an industrial process, and other PRPs that EPA believes should be equitably exempt from CERCLA liability.⁶ Examples of PRPs that would likely benefit from this discretion include community water systems, publicly owned treatment works, municipal separate storm sewer systems, publicly owned/operated municipal solid waste landfills, publicly owned airports, local fire departments, and farms where biosolids are applied to the land.⁷ To prevent major PRPs from seeking contribution from these other PRPs, EPA intends to seek settlement terms that require major PRPs to waive their right to sue other PRPs.⁸ Or in the alternative, EPA may enter into settlements with PRPs it wishes to insulate from CERCLA liability.⁹ Once liability for PRPs is resolved with the United States, they are not liable for claims for contribution on matters addressed in the settlement.¹⁰ It remains to be seen how this memorandum will be implemented and whether the equitable distinctions it intends to draw will stand up to scrutiny in practice.

While EPA’s determination that these chemicals meet the statutory definition of hazardous substances under CERCLA is not unexpected, the application of CERCLA’s extraordinarily broad liability scheme to resolve the issue of PFAS contamination is a completely different problem. While EPA maintains PFAS can be found all over, CERCLA was not designed to apply all over. EPA’s attempt to narrow the scope of that liability through administrative means addresses only one part of that impact. EPA itself has had trouble addressing the sites currently in the system without adding hundreds of PFAS sites, let alone reviewing all of the Superfund sites that have already been closed. Further, the parts per trillion health-based standards set in the rule may eliminate the use of risk-based tools, which have allowed EPA to resolve a number of sites. In short, addressing PFAS under CERCLA will create a number of difficult and expensive problems that will take years to sort out and resolve.

PFAS IN TRANSACTIONAL SETTINGS

Addressing PFAS in transactional settings will add significant burdens in the corporate and real estate worlds. Under the most recent iteration of ASTM’s Standard Practice for Environmental Site Assessments (ASTM E1527-21), EPA’s hazardous substance designation means that the specific PFAS substances designated should be evaluated in any Phase I report in order to provide potential defenses to CERCLA liability. While PFAS releases may be assumed with certain types of operations, the haphazard location of PFAS will make their presence difficult to predict. For the same reason, Phase II sampling may not be sufficient to document the presence or absence of PFAS impacts. Between the difficulty of performing this analysis and the need of consultants to protect against their own potential liability, the cost and uncertainty of this work is likely to escalate.

EPA IS ADDRESSING PFAS THROUGH MULTIPLE AVENUES

The final rule on CERCLA comes during a time where EPA has announced numerous rulemakings related to PFAS as part of EPA’s PFAS Strategic Roadmap, described further in our prior alert earlier this year.¹¹ Most recently, this includes a rule on PFAS in drinking water finalized 10 April 2024, as discussed in our separate alert found here.¹² Our Environment, Land and Natural Resources and Policy practice groups are well versed in federal and state PFAS laws and regulations and ready to help clients navigate these quickly evolving issues.

¹ Biden-Harris Administration Finalizes Critical Rule to Clean up PFAS Contamination to Protect Public Health, Env’t Prot. Agency (Apr. 19, 2024).

² Id.

³ CERCLA § 107(a), 42 U.S.C. § 9607(a).

⁴ See Comment from California Farm Bureau on Designation of Perfluorooctanoic (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances (Nov. 7, 2022); See also Comment from The City of Elyria, Ohio Wastewater Pollution Control Plant and Municipal Separate Storm Sewer System (MS4) Regarding the Proposed Regulations Published in the Federal Register: Comprehensive Environmental Response Compensation & Liability Act hazardous Substances: Designation of Perfluorooctanoic Acid and Perfluorooctanesulfonic Acid (Nov. 9, 2022).

⁵ Memorandum from D. Uhlmann, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance, on PFAS Enforcement Discretion and Settlement Policy under CERCLA (Apr. 19, 2024).

⁶ Id. at 2-3.

⁷ Id. at 3.

8 Id.

⁹ Id. at 9.

¹⁰ CERCLA section 113(f)(2), 42 U.S.C. § 9613(f)(2).

¹¹ See Toxic Substances Control Act Reporting and Recordkeeping Requirements for Perfluoroalkyl and Polyfluoroalkyl Substances, Final rule, 88 Fed. Reg. 70516 (Oct. 11, 2023) (to be codified 40 C.F.R. pt. 705); Significant New Use Rules on Certain Chemical Substances (23-2.5e), Proposed rule, 88 Fed. Reg. 39804 (Jun. 20, 2023) (to be codified 40 C.F.R. pt. 721); Per- and Polyfluoroalkyl Substances (PFAS) in Consumer Products, Notice of availability and request for information, 88 Fed. Reg. 64890 (Sep. 20, 2023); Changes to Reporting Requirements for Per- and Polyfluoroalkyl Substances and to Supplier Notifications for Chemicals of Special Concern; Community Right-to-Know Toxic Chemical Release Reporting, Final rule, 88 Fed. Reg. 74360 (Oct. 31, 2023) (to be codified 40 C.F.R. pt. 372); Revisions to the Air Emissions Reporting Requirements, Proposed rule, 88 Fed. Reg. 54118 (Aug. 9, 2023) (to be codified 40 C.F.R. pts. 2, 51); Clean Water Act Effluent Limitations Guidelines and Standards for the Organic Chemicals, Plastics and Synthetic Fibers Point Source Category, Advance notice of proposed rulemaking, 86 Fed. Reg. 14560 (Mar. 17, 2021) (to be codified 40 C.F.R. pt. 414).

¹² PFAS Strategic Roadmap: EPA’s Commitment to Action 2021-2024, Env’t Prot. Agency (Oct. 2021); Biden-Harris Administration Finalizes First-Ever National Drinking Water Standard to Protect 100M People from PFAS Pollution, Env’t Prot. Agency (Apr. 10, 2024).