In the first designation of its kind, the US Environmental Protection Agency (EPA) released a pre-publication proposed rule on August 26, 2022, designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), including their salts and structural isomers, as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
If enacted, the designation of PFOA and PFOS as hazardous substances will have both immediate and significant impacts across industries, and will provide EPA with new tools to wield in its efforts to address and clean up per- and polyfluoroalkyl substance (PFAS) contamination, collect additional data on PFOA and PFOS through increased reporting and information-gathering authorities under CERCLA, and hold those responsible for releases responsible through CERCLA’s strict joint and several liability scheme. EPA’s announced proposed rulemaking falls against the backdrop of its broader whole-of-agency approach to address PFAS, as set out in EPA’s October 2021 PFAS Strategic Roadmap.[1]
If this long-anticipated proposed rule is enacted, it would be the first time EPA has directly designated any substance as a hazardous substance under its CERCLA Section 102(a) authority. Historically, substances have been added to CERCLA’s list of hazardous substances through their designation in other statutes identified in CERCLA Section 101(14) (such as by designation as a hazardous waste under Resource Conservation and Recovery Act (RCRA) Section 3001, or a hazardous air pollutant under Section 112 of the Clean Air Act). Because this is the first direct designation of a hazardous substance under CERCLA, the proposed rule includes a discussion of the criteria used to determine whether a CERCLA 102(a) listing was appropriate, which could be applied to any future designations under Section 102(a).
The proposed designation will afford EPA the ability to seek to recover cleanup costs from a potentially responsible party or to require such a party to conduct the cleanup, as well as enable potentially responsible parties to seek contribution from one another for cleanup costs associated with releases of PFOA and PFOS.
More directly, EPA’s proposed rule would require reporting of releases of PFOA and PFOS, the two most studied PFAS. Specifically, upon designation, any person in charge of a vessel or facility (either onshore or offshore) that identifies a release at or above the Reportable Quantity (RQ) of one pound or more—a default reporting quantity—within a 24-hour period must immediately report such releases to the federal, state, tribal, and local authorities. Once EPA has collected more data on the size of releases and the resulting risks to human health and the environment, it may consider adjusting the RQs for PFOA and PFOS through a formal notice and comment rulemaking pursuant to Section 102(b) of CERCLA.
The proposed rule identifies “five broad categories of entities” as being “potentially affected” by the rulemaking:
(1) PFOA and/or PFOS manufacturers (including importers and importers of articles)
(2) PFOA and/or PFOS processors
(3) manufacturers of products containing PFOA and/or PFOS
(4) downstream product manufacturers and users of PFOA and/or PFOS products
(5) waste management and wastewater treatment facilities[2]
As a practical matter, the effects of this rule will be much farther reaching, impacting a broad range of companies and industries, not just those most commonly associated with the manufacture and use of PFAS. Owners of sites with PFOA and PFOS contamination from historical use, for example, could be held responsible for the cleanup of legacy contamination on their properties. In addition, PFOA and PFOS are often ubiquitous in environmental media because of their use in a large variety of industrial and consumer products and processes; thus, PFOA and PFOS could potentially be found at sites with no direct history of their manufacture or use.[3]
Federal agencies selling or transferring real property will also be required pursuant to CERCLA Section 120(h) to provide notice and, in some circumstances, covenant that any necessary remedial action to address PFOA and PFOS has been taken, and any future remedial action will be taken, by the United States.
While EPA has pledged to “use enforcement discretion and other approaches to ensure fairness for minor parties who may have been inadvertently impacted by the contamination,” EPA does not have the power to exempt entire industries from the scope of the statute outright, although individual sites may be able to qualify for defenses under CERCLA, such as de minimis or bona fide prospective purchaser protections.
Likely in anticipation of challenges to the proposed rule, EPA has defended its designation of PFOA and PFOS as based on significant evidence that those compounds may present a substantial danger to human health or welfare or the environment. EPA also cites to its recent (June 2022) interim updated health advisories for PFOA and PFOS in support of its action to designate PFOA and PFOS as a CERCLA hazardous substance.[4] Perhaps also mindful of the recent US Supreme Court decision in West Virginia v. EPA, 597 U.S. __ (2022), the agency expressly notes that CERCLA “confers considerable discretion upon the EPA in its exercise of [its authority under CERCLA to] respond to releases or threatened releases of hazardous substances, and pollutants and contaminants in order to protect public health, welfare, and the environment.”[5]
Costs associated with the proposed rule have been a focus for critics of the use of CERCLA to regulate PFOA and PFOS (as opposed to regulation through other statutes, such as RCRA). Of note, OMB has designated the proposed rule as “economically significant,” which means it is expected to have more than $100 million in economic impacts. This designation also requires EPA to conduct a regulatory impact analysis (RIA)—including consideration of the rule’s potential costs (both direct and indirect) and benefits—before the rule takes effect. Direct costs could include costs tied to reporting requirements; indirect costs would include costs associated with cleanup.
EPA has taken the position in the proposed rule that consideration of cost is not required in order to designate PFOA and PFOS as hazardous substances under CERCLA, although it is soliciting comments on this point.
Stakeholders will have 60 days from the date of publication of the proposed rule in the Federal Register to submit comments, although given the anticipated volume of comments, interested parties will likely seek to have the comment period extended. The proposed rule is projected to be published in the Federal Register by the second week of September, and EPA anticipates publishing a final rule by August 2023.
Finally, EPA also announced that it expects to issue an advanced notice of proposed rulemaking after the close of the comment period on the proposed rule for PFOA and PFOS in order to seek public comment on designating other PFAS chemicals as CERCLA hazardous substances.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following:
Princeton
John McGahren
Stephanie R. Feingold
Laurie Matthews
Boston
Julie Silva Palmer
Washington, DC
Duke K. McCall, III
Drew Cleary Jordan
Los Angeles
James R. Dragna
Rick R. Rothman
Yardena R. Zwang-Weissman
Jeremy Esterkin
Denise Fellers
San Francisco
Ella Foley Gannon
[1] This proposed rule was long awaited, having first been announced in EPA’s February 19, 2019, PFAS Action Plan, where “EPA reported that it was initiating the regulatory development process for designating PFOA and PFOS as hazardous substances.” In January 2021, however, EPA issued an advanced notice of proposed rulemaking seeking “comment on whether [EPA] should consider using authorities other than those we have already used . . . to address environmental contamination by [PFOA and PFOS].” Following the change in administration in January 2021, EPA renewed its efforts to advance the CERCLA listing, identifying it as one of its priorities in its October 18, 2021, PFAS Strategic Roadmap. The proposed rule was submitted to the Office of Management and Budget (OMB) on January 10, 2022, and was expected to be published in “spring 2022”; ultimately, however, OMB reviewed the rule for nearly twice the period authorized under Executive Order 12866, Section 6(b)(2) (which provides for a 90-day review period with one extension of up to no more than 30 calendar days).
[2] See Proposed Rule at 10.
[3] See Proposed Rule at 47-52.
[4] Proposed Rule at 12-13.
[5] See Proposed Rule at 22-23.