The U.S. EPA published its PFAS Strategic Roadmap booklet in October 2021 and, true to its word, has come very close to meeting most of its self-imposed deadlines to tackle the truly difficult environmental- and human-health challenges that PFAS has presented. The PFAS Roadmap booklet — although close to two years old now — is just that, a roadmap, and is a concise straightforward document of only 22 pages. It’s a must read for anyone interested in PFAS. One of the Roadmap’s goals proposes the designation of certain PFAS compounds as CERCLA hazardous substances by certain dates, along with a final rule. EPA has met most its self-imposed deadlines set forth in the Roadmap, and continues to do so. A hazardous substance designation for certain PFAS compounds will allow federal authorities to immediately begin to seek removal, cost recovery, or contribution for costs incurred at Superfund sites for certain PFAS compounds. One of the biggest concerns that’s on everyone’s radar, however, should be the looming reopener provisions in consent-decree agreements at sites previously considered by PRPs (and their respective insurers) as settled. A very brief recap of recent events will help to understand how this is all unfolding.
PFAS CERCLA Designation Gets Closer To Reality
In the fall of 2022, EPA submitted its proposal to designate as hazardous substances under CERCLA two of the big ticket and most studied PFAS compounds: PFOS and PFOA. The public comment period closed in November 2022 for that proposal. EPA is now reviewing public comments submitted to decide whether to make any modifications to the proposed rule before issuance of a final rule.
Recently, in February, the EPA also submitted a final proposal to the White House OMB stating it wishes to publish in the Federal Register a notice of proposed rulemaking requesting public input on whether the EPA should consider designating PFAS beyond just the two compounds, PFOA and PFOS, as hazardous substances, and whether to designate PFAS as a class or subclass under the statute. In March, the OMB cleared the proposal. On the heels of the February proposal and March clearance, in April, EPA in turn issued an Advance Notice of Proposed Rulemaking (ANPRM) asking the public for input regarding whether to propose to designate additional PFAS compounds, including GenX, as well as group designation of PFAS compounds. Currently, a Federal Register Notice has been published in the Federal Register and the ANPRM will be open for a 60-day comment period through June 12.
When Will Pandora’s Box Pop Open?
EPA’s Roadmap booklet states that EPA plans to finalize the rule naming certain PFAS as hazardous substances this summer. That timing will likely be delayed by a few months because EPA issued the proposed rulemaking several months later than anticipated. Realistically, a final rule will occur sometime in late 2023 or Q1 2024.
This brings us to the Pandora’s Box of “reopener” liability that is waiting to be opened and looms large before former PRPs (and their corresponding insurance carriers) at sites that have been remediated or are being remediated, and also involve actions long since settled under Consent Decrees, and likely long since forgotten.
Reopener Provisions in Consent Decrees Expected to Pop Out of Box – The 5 Year Review
When certain PFAS compounds are officially named as hazardous substances under CERCLA many new enforcement tools will be at the immediate disposal of EPA. One of these tools will be to “reopen’ sites. One of massive sleeping giants ready to wake and pop out of Pandora’s Box are reopener provisions contained in consent decrees where PRPs (and their insurers) may have incorrectly believed that their liability is fully settled and paid for at various sites throughout the country. We anticipate significant risk exposure to certain PRPs during five-year reviews at Superfund sites in the future. Specifically, for instance, if certain PFAS compounds are added to the suite of chemicals to be tested at such sites. The obvious risk is that EPA determines that previously undertaken remedial actions are no longer protective during its five-year reviews, and it then takes steps to put closed sites back into the CERCLA cleanup process. Although many CERCLA settlements with EPA contain covenants not to sue, those covenants are almost always subject to reopener provisions. One of these reopener provisions is the “new information” reopener. The EPA will most certainly invoke this clause to reopen settlements and cleanups to address situations where additional information about PFOA or PFOS (or other PFAS compounds mentioned in the April ANPRM) previously unknown now show that the current remedy is no longer protective of human health and the environment.
Notably, a five-year review at a site is required or appropriate when a remedial action leaves hazardous substances on the site at levels that do not allow for unlimited use and unrestricted exposure. Unlimited use and unrestricted exposure means that there are no restrictions placed on the potential use of land or other natural resources. In general, if the selected remedy relies on restrictions of land, ground or surface water, or if any physical or engineered barrier is part of the remedy, such as capping, then the use has been limited and a five-year Review is typically conducted.
Five-year reviews continue throughout the life of the site until hazardous substances, pollutants or contaminants no longer remain on site at levels that do not allow for unlimited use and unrestricted exposure, or there are engineered barriers. Thus, you can have scenarios where there a multitude of five-year reviews that seem to keep going in perpetuity despite the site being remediated decades ago. If you add PFAS to the list of contaminants tested, one can only imagine what the results will be at these sites, which will likely trigger sites to get reopened.
What to Do Now?
Pandora’s Box is starting to open and it can’t be shut. That said, taking immediate steps now can help your company get ready if it was involved in any CERCLA actions where it settled and entered into a consent decree. Former PRPs and their insurers can start reviewing old consent decrees with a focus on the “Reopener Provision” to gauge how narrow or broad the provision is — it’ll likely and unfortunately be broad, but not always. In-house counsel and risk managers need to don an Indiana Jones hat and become insurance archaeologists now — if not already — and locate all old insurance policies so that the company is ready should it receive a notice from EPA about potential reopener liability to avoid scrambling at the last minute. It’s also imperative to conduct internal historical PFAS audits of your company, including understanding your supply chain, to begin building a defense if you know you’re likely to be a target. In fact, EPA’s PFAS Roadmap booklet mentioned earlier literally lists its industry targets that are in its crosshairs. Are you a target? Just go to EPA’s site and click on the Roadmap to find out. There’s obviously a litany of actions that we envision EPA will take when certain PFAS compounds are designated as hazardous substances under CERCLA. The Reopener Provision in a Consent Decree settlement coupled with the five-year review is simply just one of them, albeit a BIG ONE. Stay tuned.