Two PFAS Now Covered by Superfund, Boosting Liability Risk (2)

Two commonly detected and well-known PFAS are hazardous substances under the nation’s Superfund law, the EPA announced Friday, through a rule that’s intended to protect public health by cleaning up contaminated sites but expected to increase litigation.

The Environmental Protection Agency’s final rule (RIN: 2050-AH09) designates perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), or Superfund law. The designation means both per- and polyfluoroalkyl substances (PFAS) can present a substantial danger to people and the environment, according to the EPA.

Businesses, airports, government agencies, and military facilities with landfills, production equipment, or other operations that release one pound or more of either chemical within a 24-hour period are required to report the releases under the rule.

Such entities won’t automatically have to test or clean up their sites. But the rule opens the door to potentially responsible parties being ordered to take actions, including paying for multimillion-dollar cleanup costs. Parties forced to pay for cleanups can sue each other to attempt to recoup remediation costs.

The EPA also said in an enforcement discretion policy issued with the rule that it doesn’t intend to pursue facilities, such as airports, farms, fire departments, community water systems, and publicly owned treatment works, that may have released either chemical on a property.

“EPA can use CERCLA statutory authorities when appropriate to enter into settlements that provide contribution protection from third party claims for matters addressed in the settlement,” the agency said.

Lawsuits challenging the rule are expected because it breaks new ground. This is the first time that the EPA has directly designated hazardous substances under CERCLA. The other roughly 800 hazardous substances subject to CERCLA controls were listed, because they first qualified as hazards under other environmental laws.

“Designating these chemicals under our Superfund authority will allow EPA to address more contaminated sites, take earlier action, and expedite cleanups, all while ensuring polluters pay for the costs to clean up pollution threatening the health of communities,” EPA Administrator Michael Regan said in a statement announcing the rule.

Ubiquitous, Legal Uses

The 3M Co., BASF Corp., National Foam, and several plating companies are among a few of the PFAS producers, users, and industries that already have had measurable amounts of PFOA or PFOS on some sites, according to state and other data compiled by Northeastern University’s PFAS Project Lab. Military bases, especially those with aircraft, are known sources of PFOS contamination in particular, because that chemical was used for decades in foams that put out jet fuel and other liquid fires.

The liability risk triggered by the rule goes far beyond companies that have produced or heavily used either PFAS, Wayne D’Angelo, co-chair of Kelley Drye & Warren LLP’s environmental law practice, said prior to the release of the regulation.

That risk applies to two ubiquitous chemicals that “have been in widespread, perfectly legal use for decades,” he said. The persistence and waterborne mobility of both chemicals is “a recipe for incredibly expansive liability for entities that heretofore would not have considered themselves exposed to environmental policy matters,” D’Angelo said.

The rule makes it easier for property owners adjacent to sites releasing the chemicals to file damage, trespass, and other torts in state courts, said Robert Fox, a Superfund litigator and managing partner of Manko, Gold, Katcher & Fox LLP, before the EPA released the rule.

If the EPA or states, some of which automatically adopt the agency’s hazardous substances listings for their state-specific Superfund rules, determine that a site must be cleaned up, CERCLA’s potentially responsible parties include: past and present owners of a facility with hazardous substances; past and present operators of such a facility; companies that generated the chemicals disposed of at a facility; and companies that transport them.

This broad definition can include locally owned or state-run facilities such as wastewater utilities and landfills that don’t make or use PFOA or PFOS, but receive wastes, wastewater, leachate, or other materials containing the chemicals.

The rule’s sweeping effects combined with the agency’s incomplete economic impact analyses, which regulated parties commented on, will likely be a reason the regulation is challenged as an arbitrary and capricious burden on industry, said Reza Zarghamee, a partner with Pillsbury Winthrop Shaw Pittman LLP who specializes in allocating environmental liabilities from complex corporate and real estate transactions.

“The scope of liability is incredible,” both in who can forced to pay for CERCLA cleanups and its retrospective reach, D’Angelo said.

Parties that have to pay for cleanups often sue others to attempt to recoup some of the expense.

“If you contributed a molecule, you could be in,” D’Angelo said. “It’s not always the parties that are most liable, but the parties that are the most viable—anyone with pockets.”