September 27, 2022

Volume XII, Number 270

Advertisement

September 26, 2022

Subscribe to Latest Legal News and Analysis

Liability Looms Large as EPA Seeks Naming Certain PFAS as CERCLA Hazardous Substances

On August 26, 2022, the US Environmental Protection Agency (EPA) released a pre-publication copy of its much-anticipated proposed rule adding perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) to the list of “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund). EPA asserts that this regulatory escalation of PFOA and PFOS will facilitate faster cleanup of contaminated sites and reduce exposures to these “forever chemicals.” If finalized, these hazardous substances designations will have significant and immediate impacts on many industries, from creating new reporting obligations to increased compliance, enforcement, and litigation risks related to site cleanup. EPA’s efforts involving PFOA and PFOS fall within the broader, whole-of-agency approach to addressing PFAS first announced in its PFAS Strategic Roadmap and represent its first ever exercise of its authority under CERCLA section 102(a) to designate a hazardous substance.

EPA’s Proposed Rule

EPA proposes amending Part 302 of the CERCLA regulations to add PFOA and PFOS, including their salts and structural isomers, to the list of hazardous substances, a change with significant impacts on cleanup of these compounds in the environment. The potentially affected industries include: PFOA/PFOS manufacturers, importers, and processors; manufacturers of products containing PFOA/PFOS; importers of articles containing PFOA/PFOS; downstream product makers and users of PFOA/PFOS products; and waste management and wastewater treatment facilities.

If finalized, EPA expects that the pace of site remediation for PFOA/PFOS contaminated sites should increase significantly for two primary reasons: 1) EPA will be able to require cleanup by issuing administrative orders at sites where PFOA/PFOS is the only contaminant, and 2) EPA, other federal agencies, and private parties will be able to recover site cleanup costs for PFOA and PFOS releases from potentially responsible parties. While EPA treats these as indirect effects of the rulemaking, they are undoubtedly the most impactful result of this action.

EPA identifies the immediate, direct effects of the rulemaking as: 1) new reporting requirements to the National Response Center (NRC) and other authorities within 24 hours of known releases of at least one pound of PFOA or PFOS by a vessel or facility, 2) entities selling or transferring federally-owned property must provide notice about on-site PFOA/PFOS storage, release, or disposal and warrant that remedial action has been or will be taken on any hazardous substances on the property, either before or after the transaction, and 3) a requirement that the US Department of Transportation (DOT) list PFOA and PFOS as hazardous materials under the Hazardous Materials Transportation Act.  

Scientific Basis for Listing PFOA/PFOS

In order to list a “hazardous substance,” CERCLA section 102(a) requires that EPA determine “when released into the environment [it] may present a substantial danger to the public health or welfare or the environment.” The proposal relies on the “totality of the evidence” for potential adverse effects from PFOA and PFOS exposures to make this finding. Human health effects cited by EPA include high cholesterol, changes in liver enzymes, decreased immune response to vaccination, thyroid disorders, testicular cancer, kidney cancer, liver cancer, and pregnancy-induced hypertension and preeclampsia. EPA anticipates long-lasting environmental contamination – and resulting human exposure leading to these health effects –will continue due to PFOA and PFOS’s “environmental persistence, formation from precursor compounds, continued production by international manufacturers and possible domestic production, and as a result of the large legacy production in the United States.”

Impacts of PFOA and PFOS Hazardous Substance Designations

If finalized, this proposed rule will open the floodgates to Superfund liability for actual or potential PFOA and PFOS releases and activate the full panoply of powerful CERCLA enforcement authorities. As previously reported, the significant implications of a hazardous substance designation for PFOA and PFOS designation could include the following:

  • The likely addition of more sites to the National Priorities List. As EPA and the regulated community have experienced, PFAS chemicals are being detected at a variety of sites, including sites with no history of PFAS use or disposal. EPA’s enforcement-first approach to Superfund sites will likely continue at sites with PFOA or PFOS if there are potentially responsible parties;

  • The potential disruption to ongoing remediation activities at thousands of sites that currently are, or may become, Superfund sites, as well as added complexity and costs if parties are required to utilize different treatment technologies to address PFOA and PFOS impacts;

  • The possible reopener of existing Superfund sites if EPA finds that previously undertaken remedial actions are no longer protective during its five-year reviews, with the potential to put even redeveloped sites back into the CERCLA cleanup process; and

  • The significant rise in expensive and disruptive Superfund litigation that would result from any associated EPA Section 106 cleanup orders or Section 107 cost recovery actions or private party Section 113 contribution actions. Given the draconian nature of CERCLA’s strict, and joint and several, liability scheme, even entities and industries that might have contributed minimally to PFOA or PFOS contamination at a particular site would be affected.

This proposed rule, coupled with EPA’s recently published near-zero health advisories that recommend levels below available detection or treatment methods, may further drive site-specific cleanup standards for PFOA and PFOS.

Economically Significant Rulemaking

 Cost estimates for this rulemaking provided by stakeholders ranged from $11 billion to $22 billion for private party compliance costs, and corresponding annualized private party PFOA/PFOS cleanup costs at non-federal sites between $700 and $800 million.

After some questions about EPA’s intent to assess the full costs and benefits of the rulemaking to the economy, the White House Office of Management and Budget (OMB) ultimately deemed the rule “economically significant,” which requires a full discussion of indirect costs and benefits in a not-yet-released Economic Assessment of the Potential Costs and Other Impacts of the Proposed Rulemaking to Designate Perfluorooctanoic Acid and Perfluorooctanesulfonic Acid as Hazardous Substances. “Economically significant” rules are those expected to impose costs of $100 million or more annually.

EPA’s proposed interpretation of CERCLA section 102(a) is that the Agency is precluded from considering costs when designating a hazardous substance. EPA distinguishes the proposed rule’s potential direct and indirect economic impact by only accounting for minimal increases in reporting costs in the proposal. EPA suggests the larger – presumably indirect – costs of additional cleanup are not being created but merely “shifted” from the public to potentially responsible parties. The proposal asserts, however, that site cleanup costs remain unquantifiable at this preliminary stage, as hazardous substance designations do not automatically compel either EPA or private parties to undertake contingent, discretionary, and site-specific response actions. This assertion ignores that EPA’s near-zero health advisories and heightened focus on PFAS, combined with the growing amount of data state regulators are collecting on levels of PFAS in the environment, will almost certainly result in EPA prioritizing sites with PFOA and PFOS releases for CERCLA response actions and enforcement.  

Opportunity for Stakeholder Input

Affected stakeholders must provide comments to EPA within 60 days of the proposed rule’s forthcoming publication in the Federal Register. Stakeholders may wish to consider providing input focusing on the following:

  • EPA’s interpretation of its CERCLA section 102(a) authority to designate as “hazardous” substances which, when released, “may present substantial danger” to the public health or welfare or the environment;

  • EPA’s reliance on supporting materials, such as the 2016 EPA Heath Effects Support Documents for PFOA/PFOS;

  • EPA’s conclusions as to the frequency, nature, and geographic scope of PFOA/PFOS releases into the environment, fate and transport of the substances once released, potential human exposure, or other technical matters;

  • EPA’s interpretation of CERCLA section 102(a) to preclude consideration of cost; and

  • Strategies to improve access to reporting data expected to be collected for communities with environmental justice concerns.

Future similar actions for other PFAS are also forthcoming, as EPA intends to issue an advanced notice of proposed rulemaking later this year that will consider designating additional PFAS as hazardous substances under CERCLA.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume XII, Number 241
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Matthew Z. Leopold Environmental & Energy Attorney Hunton Andrews Kurth Washington, DC
Partner

Matt advises and defends clients across industries with the strategic insights as former General Counsel for the US Environmental Protection Agency, former General Counsel for the Florida Department of Environmental Protection and a former environmental litigator at the US Department of Justice.

Matt provides his clients with in-depth experience and knowledge respecting the pivotal recent changes in environmental regulation. As EPA General Counsel, he counseled on the development and defense of virtually every significant regulation proposed by EPA since 2017 and was personally...

202-419-2041
Gregory R. Wall Environmental Litigation attorney Hunton Andrews Kurth Law Firm Richmond
Counsel

As a former US Environmental Protection Agency (EPA) senior attorney, Greg uses his deep agency, regulatory and enforcement knowledge to assist clients in solving complex environmental matters, with specialized expertise in CERCLA/Superfund, brownfields, RCRA, FIFRA and TSCA legal issues.

With over 15-years of experience in environmental law, Greg assists clients in regulatory counseling, enforcement defense, litigation, and transactional matters. His experience in both private and public practice, in particular at EPA, provides him the ability...

804 344 7801
Javaneh S. Tarter Environmental Attorney Hunton Andrews Kurth Law Firm
Senior Attorney

Javaneh draws on her experience as in-house counsel and in private practice to assist clients with chemical and environmental regulatory and compliance matters.

As part of the firm’s environmental practice, Javaneh advises clients on compliance issues and enforcement actions arising under myriad of chemical laws, including the Toxic Substances Control Act (TSCA); Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA); and California’s Proposition 65 and Cleaning Product Right to Know Act. She also navigates clients through the development...

202 419 2108
Nancy Beck Regulatory Science Professional Environmental Compliance Hunton Andrews Kurth
Director of Regulatory Science

Nancy provides industry leaders with advice related to the impact of environmental policy, including chemical regulations and compliance programs, applying her in-depth knowledge and applied public health experience as a PhD toxicologist.

Nancy has over twenty years of applied public health experience, sixteen of which were from her time in government, including senior leadership positions at the Environmental Protection Agency (EPA) and the White House. As a PhD toxicologist she has a deep scientific understanding of chemical risk assessment,...

202-419-2076
Lydia González Gromatzky, Andrews Kurth Law Firm, Environmental Attorney "
Of Counsel

Lydia has a broad-based regulatory, transactional and litigation practice involving domestic and Latin American environmental law. She has extensive experience advising clients on permitting, compliance, enforcement and remediation matters.

She has represented national and international clients in a wide range of industry sectors, including energy, chemical manufacturing and electronics companies, on waste, water and air regulatory issues. She has also counseled multi-national companies and trade associations on compliance and regulatory issues arising under Latin American domestic...

512-320-9231
Advertisement
Advertisement
Advertisement