On April 19, 2024, the U.S. Environmental Protection Agency (EPA) issued its final rule designating two of the most widely used per- and polyfluoroalkyl substances (PFAS) as hazardous substances under the primary federal environmental cleanup law.  This action has broad implications for any entity whose operations or property may be impacted by PFAS—which, given the ubiquity of the so-called “forever chemicals,” may include most businesses and property owners across the country. 

The two specific chemicals designated as hazardous are perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) (along with their structural salts and isomers).  Their designation as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, also known as Superfund), represents a significant step in the federal government’s regulation of PFAS, and the latest in a series of related actions referred to by EPA as the PFAS Strategic Roadmap. 

CERCLA creates strict liability for certain classes of parties associated with the release of hazardous substances into the environment, known as “potentially responsible parties” or PRPs.  These include—among others—generators and transporters of hazardous substances, as well as current and past owners and operators of properties where releases have occurred.  This can include entities that did not cause or contribute to the actual release of the substance into the environment, as well as entities with no knowledge of the existence of contamination on their properties.  

The “hazardous substance” designation has the following effects with respect to PFOS and PFOA:

• The EPA and delegated agencies are authorized to require PRPs to address PFOA or PFOS releases that pose an imminent and substantial endangerment to public health or welfare or the environment. EPA can also respond to PFOA and PFOS releases directly under certain circumstances, and then seek recovery of cleanup costs from the PRPs.
• Private parties that conduct cleanups that are consistent with the National Contingency Plan can also seek to recover PFOA and PFOS cleanup costs from PRPs.
• The release of a Reportable Quantity of PFOA or PFOS (1 pound or more in a 24 hour period) must be reported to the National Response Center, state, or Tribal emergency response commissions, and the local or Tribal emergency planning committees.
• Any federal entity that transfers or sells real property must provide a notice about the storage, release, or disposal of PFOA or PFOS on the property and a covenant warranting that it has cleaned up any resulting contamination or will do so in the future, if necessary, as required under CERCLA 120(h).
• The Department of Transportation (DOT) is obligated to list and regulate PFOA and PFOS as hazardous materials under the Hazardous Materials Transportation Act.

The designation also has significant implications for any business acquiring real estate, as it requires environmental professionals to now consider potential PFOA and PFOS releases or contamination in all Phase I Environmental Site Assessments.  This will undoubtedly expand the scope of environmental investigations associated with property transactions, but will be seen by many as providing some welcome certainty.  PFAS chemicals were previously identified as emerging contaminants under the ASTM 1527-21 standard but, because they had not been designated as hazardous substances, it was not clear how they should be handled in Phase Is.  Now that PFOA and PFOS have been designated as hazardous substances, they must be included in the environmental professional’s analysis of Recognized Environmental Conditions to comply with the “All Appropriate Inquiries” standard and qualify for certain defenses to liability under CERCLA.  The status of other PFAS chemicals remain unclear.

In an effort to allay concerns raised by numerous trade groups about the potentially calamitous financial impact of the designation on their industry, EPA issued a separate enforcement discretion policy simultaneously with the designation. This policy document, according to EPA “makes clear that EPA will focus enforcement on parties who significantly contributed to the release of PFAS chemicals into the environment, including parties that have manufactured PFAS or used PFAS in the manufacturing process, federal facilities, and other industrial parties.”  It provides that EPA does not intend to pursue the following for PFAS costs or response actions under CERCLA:

• Community Water Systems and POTWs;
• Municipal Separate Storm Sewer Systems (MS4s);
• Publicly Owned or Operated Municipal Solid Waste Landfills;
• Publicly Owned Airports and Local Fire Departments; and
• Farms that Apply Biosolids to Land. 

While this policy may provide some comfort with respect to regulatory or legal action from EPA, it does not preclude private parties from pursuing these entities for cost recovery or contribution. 

For further information or answers to questions regarding PFAS regulation and its impacts on your business, contact Dan Cory or Amy Romig at Plews Shadley Racher & Braun LLP.

Categorized: News

Tagged In: CERCLA, EPA, hazardous, PFAS