As our readers are likely familiar from our past blog posts here, here and here, in September 2022, EPA proposed to designate PFOA and PFOS as hazardous substances under section 102(a) of Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
Now, EPA has made it final: the agency has designated perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), including their salts and structural isomers, as hazardous substances (See Pre-Publication Notice).
EPA concluded that designation of those two substances is warranted “because both PFOA and PFOS, and their salts and isomers, may present substantial danger to public health or welfare or the environment.” In addition to that finding, EPA performed an analysis that weighed the advantages and disadvantages of designation, including quantitative and qualitative benefits and costs – EPA determined that the advantages of designation outweigh the disadvantages. These designations now allow the EPA to use the full strength of CERCLA to address PFAS contamination.
Although EPA has the authority under CERCLA to require parties to perform response actions and seek response costs incurred by the United States, the EPA has discretion on how to exercise its authority, which EPA has utilized since CERCLA was enacted in 1980. To that end, the EPA has issued to its regional administrators and counsels (i.e., its enforcement and compliance staff) a memorandum entitled PFAS Enforcement Discretion and Settlement Policy Under CERCLA that discusses how EPA will seek to use its enforcement power under these new designations and against which types of potentially responsible parties it will target (referred to herein as the Policy).
According to EPA, it will focus on holding responsible entities that 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 (EPA refers to these entities as major PRPs). (Emphasis added). On the other hand, EPA’s guidance explains that it does not intend to pursue entities “where equitable factors do not support seeking response actions or costs under CERCLA,” including, but not limited to the following:
- Community water systems and publicly owned treatment works (through their operation processes, these parties may discharge effluents; dispose or manage sewage sludge, biosolids, and drinking water treatment residuals; and arrange for the disposal of spent treatment media and/or the discharge of leachate, permeate, or regeneration brines.)
- Municipal separate storm sewer systems (these entities implement programs to prevent or reduce pollutant runoff from municipal operations into the storm sewer system, which helps to control pollutant discharges by minimizing the potential pathways for contaminants carried in runoff.)
- Publicly owned/operated municipal solid waste landfills (In addition to receiving waste from communities and other residential entities, these landfills may accept solid waste from POTWs that may be contaminated with PFAS, particularly sewage sludge and solid residues that result from treatment processes and filtration media such as granular activated carbon filters.)
- Publicly owned airports and local fire departments (Many airports have been required by Federal Aviation Administration regulations to maintain adequate amounts of fire-fighting foam–AFFF–to address fire emergencies, and State and municipal airports and local fire departments have also used AFFF during fire emergencies and training exercises.)
- Farms where biosolids are applied to the land (Farms routinely apply biosolids from POTWs to the land, and by doing so, provide for a beneficial application of a product from the wastewater treatment process. EPA recognizes that such land application can result in both economic and resource management benefits, including conservation of landfill space, reduction in methane gas from landfills, reduction of releases from incinerators, and a reduced demand for synthetic fertilizers.)
EPA notes that with the exception of farms, each of these categories of entities “perform a public service,” and all of these categories of entities “do not manufacture PFAS nor use PFAS as part of an industrial process.” However, EPA also states that this Policy “in no way affects EPA’s ability to pursue any responsible party,” including those entities listed here, “whose actions or inactions significantly contribute to, or exacerbate the spread of significant quantities of PFAS contamination, thereby requiring a CERCLA response action.”
In addition, EPA advises that it may extend enforcement discretion under this Policy to additional parties even if they do not fall within these listed categories. EPA states that it will exercise its enforcement discretion to not pursue other entities based on the “totality” of a number of factors, to wit:
- (1) Whether the entity is a state, local, or Tribal government, or works on behalf of or conducts a service that otherwise would be performed by one of those entities;
- (2) Whether the entity performs a public service (e.g., providing safe drinking water, handling municipal solid waste, or performing emergency fire suppression services);
- (3) Whether the entity manufactured PFAS or used PFAS as part of an industrial process;
- (4) Whether, and to what degree, the entity is actively involved in the use, storage, treatment, transport, or disposal of PFAS. EPA further states that these factors will also help to ensure equitable outcomes in addressing PFAS contamination, and determining whether an entity’s CERCLA responsibility should be limited.
In addition to potential EPA action, EPA’s Policy states that it understands that entities are concerned about being sued by other PRPs for PFAS cleanup costs under CERCLA. In CERCLA settlements with major PRPs, EPA can seek to require those settling parties to waive their rights to sue parties that satisfy the equitable factors (including the categories of entities expressly listed in the Policy). The major PRPs would then not be able to sue those non-settling parties for matters addressed under the settlement. In addition, EPA may enter into settlement agreements with parties where factors do not support enforcement against them because by resolving those parties’ liability with the United States, those entities will not be liable for third-party contribution claims related to the matters addressed in the settlement. As a result, non-settling PRPs will not be able to pursue these settling parties for contribution costs, likely minimizing litigation costs and discouraging third-party litigation.
We expect that a significant amount of new litigation to arise from these designations, including a deluge of reopened cases. Reviewing and understanding the EPA’s enforcement Policy can prepare potentially relevant and/or liable parties in evaluating the best strategy – both before and after litigation is commenced.