EPA’s Designation of PFOA and PFOS as Hazardous Substances Under CERCLA

On April 19, 2024, the U.S. Environmental Protection Agency (EPA) designated two per and polyfluoroalkyl substances (PFAS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Specifically, EPA designated perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), including their salts and structural isomers, as hazardous substances under section 102(a) of CERCLA, also known as Superfund. EPA’s action creates new reporting requirements while also allowing the agency to shift responsibility for cleaning up sites listed on the National Priorities List (NPL) to potentially responsible parties (PRPs) and compel PRPs to investigate and remediate contaminated sites. This marks the first time that EPA has used section 102(a) of CERCLA to designate hazardous substances, rather than using CERCLA’s “automatic” designation process under section 101(14). EPA based its designation on its finding that PFOA and PFOS “may present a substantial danger to the public health or welfare or the environment when released into the environment . . . .”¹

Who does this action affect?

Entities face CERCLA liability only if they fall within one of four categories of PRPs: (1) current owners or operators of a contaminated “facility”; (2) owners or operators of the “facility” at the time of disposal; (3) persons that arranged for disposal or treatment of hazardous substances at a “facility”; or (4) transporters of hazardous substances to a “facility”, provided the transporter selected the disposal location.²

As a companion to the designation, EPA simultaneously released an enforcement discretion policy that aims to reassure certain groups of PRPs that they will not be significantly impacted by the designation. EPA stated that it intends to “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.”³ EPA specifically identified “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”⁴ as entities it does not intend to pursue for response actions or costs under CERCLA.

What will this mean for affected entities?

The direct effects of the rule include: (1) reporting requirements for any release to the environment of one pound or more of PFOA or PFOS within a 24-hour period; and (2) notice requirements for transfers of real property by federal agencies. The most significant effects, however, arise from potential liability for clean up actions and costs.

In the near term, we expect that EPA will actively use its information request authority under CERCLA Section 104(e) to demand information about historic manufacturing, processing and use PFAS, including PFOA and PFOS.

With time, the presence of PFOA and PFOS in many locations will contribute to an increased and significant risk of CERCLA response actions and claims for costs and natural resource damages. Current and former PFOA and PFOS manufacturers, processors, and users will be likely targets of regulators and private PRPs at a wide assortment of sites, including:

• Facilities they have currently or formerly owned or operated at which PFOA/PFOS is detected;
• Third party disposal sites, such as landfills, with multiple sources of PFOA/PFOS; and
• Third-party owned and operated facilities where parties claim that PFOA/PFOS contamination resulted from products they allegedly provided.

Potential CERCLA liability differs in material ways from many state and common law claims for contamination because CERCLA is a strict liability statute and, absent divisibility or successful contribution, parties are jointly and severally liable for costs of cleanup. For this reason, CERCLA can expose liable parties to significant risk.

Open Questions:

While some of the consequences of EPA’s action are reasonably predictable, it raises some open questions as well:

What will this mean for the number of sites on the NPL and overall cleanup costs?

In response to public comments received on the proposed rule, EPA stated that it does not expect this designation to “substantially increase” the number of sites on the NPL, noting that EPA has already listed sites on the NPL due, in part, to PFOA and PFOS releases. EPA also noted that “more often than not, PFOA and PFOS are likely to be co-located with or commingled with other substances.”⁵ EPA reasons that, since the response and cleanup methods used for PFOA and PFOS are often the same as those used for other hazardous substances, the increase in costs will be “incremental.”

Nonetheless, it is certain that the designation of PFOS/PFOA as hazardous substances will result in new sites being added to the NPL. In addition, any sites that were already on the NPL are all subject to CERCLA’s mandatory five-year review process which periodically evaluates whether human health and the environment are protected by the remedial action being implemented. Depending upon the conclusions reached in the five-year review process, further remediation may be required by EPA.

What will this mean for resolved CERCLA liability?

EPA’s designation of PFOA and PFOS as hazardous substances under CERCLA will likely trigger “reopeners” for sites already under consent decrees, administrative orders, or other settlements. The 1986 amendments to CERCLA require “reopeners” for “unknown conditions” in all but a few limited circumstances.⁶ As a result, parties that have settled CERCLA claims with EPA run the risk that EPA will later require new cleanup efforts arising from previously unknown site conditions or regulatory changes. This could present a risk at sites where parties have already entered in a settlement (e.g., a Consent Decree) with the government to address the remediation of other hazardous substances, but where PFOA or PFOS contamination is subsequently identified. Because reopener language site and settlement-specific, parties will need to evaluate their specific settlement terms.

What is the import of EPA’s Enforcement Discretion Policy?

EPA’s companion Enforcement Discretion Policy makes statements about the agency’s intentions with regard to both enforcement under CERCLA and potential protection from private party contribution claims for certain PRPs.

EPA says it will exercise its enforcement discretion to not pursue response actions or costs under CERCLA against certain entities, based on a number of identified “fairness and equitable factors.”⁷

In addition to exercising discretion in its enforcement decisions, EPA also intends to provide protection against third party liability by requiring PRPs to waive their contribution claims against certain non-settling parties to that settlement and by entering into direct settlements and granting contribution protection to parties as to whom it concludes enforcement is not warranted.

While this policy is aimed at reassuring certain PRPs, it is not without limits. EPA makes clear that this policy is “not a regulation and does not create new legal obligations or limit or expand obligations,” or “create any substantive or procedural rights for any persons”. In other words, it is a policy, not a guarantee. This leaves both the PRPs EPA intends to reassure and the "major" PRPs it intends to pursue in an uncertain position with regard to contribution rights and exposure.