The term “game changer” has been thrown around quite a bit with regard to EPA’s intention to list PFOS and PFOA as “hazardous substances” under CERCLA. The reason it is a game changer is that it will greatly simplify the evidence needed to support cleanup claims at any site where PFOS or PFOS contamination exists. Furthermore, as detailed on EPA’s webpage, CERCLA liability is:
- Retroactive – Parties may be held liable for acts that happened before Superfund’s enactment in 1980.
- Joint and Several – Any one potentially responsible party (PRP) may be held liable for the entire cleanup of the site (when the harm caused by multiple parties cannot be separated).
- Strict – A PRP cannot simply say that it was not negligent or that it was operating according to industry standards. If a PRP sent some amount of the hazardous waste found at the site, that party is liable.
Furthermore, CERCLA liability extends to all “potentially responsible parties” (PRPs). Under CERCLA, PRPs are broadly defined as the following groups:
- Any current owners of property where hazardous substances were released regardless of whether they released those substances
- Any past owners or operators of a facility that released hazardous substances
- Generators of hazardous substances
- Any transporter of hazardous substances
- Any person who arranged for the disposal of hazardous substances
Whereas most of the PFAS suits seeking cleanup that are being filed are being brought against manufacturers of PFOS and PFOA, CERCLA makes: 1) establishing liability much easier for Plaintiffs; and 2) casts a much wider net of potential liability. In addition, CERCLA allows one liable party to seek contribution from other PRPs, which will likely means many more defendants being named than have currently been targeted in suits seeking cleanup of PFOS and PFOA contamination.
Finally, PFOS/PFOA contamination is very widespread, including at most airports, many military bases, manufacturing sites and any landfills that accepted consumer products. Therefore, the potential number of sites that could be pulled into CERCLA or possibly CERCLA cleanups that could be reopened to address PFOS/PFOA contamination are numerous.
For these reasons, listing PFOS and PFOA as “hazardous substances” will clearly be a game changer.
What action is EPA taking?
On September 6th, EPA published its proposed rule to designate PFOS and PFOA (as well as related salts and structural isomers) as “hazardous substances” under CERCLA. As discussed below, EPA is basing its designation on a finding that the compounds pose a “substantial danger to public health or welfare or the environment” pursuant to its authority under CERCLA Section 102. This is the first time EPA has ever directly listed a compound as a hazardous substance using its authority under CERCLA Section 102.
What is the regulatory impact of EPA’s designation?
The designation has three primary regulatory impacts:
- Reportable Quantity (CERCLA 103(a))– EPA is proposing to establish a reportable quantity (RQ) of 1 lbs in 24 hours. The RQ designation requires any entity that releases PFOA or PFOS above the RQ threshold to report the spill to EPA and local emergency response officials. Under CERCLA, 1 lbs is the default RQ. EPA suggest it intends to issue a future rulemaking on the RQ which would presumably lower the RQ threshold.
- Federal Property Transfers (CERCLA 120(h))– Any time the federal government transfers property with PFOS and/or PFOA contamination it must notify the transferee of the contamination. Either the contamination must be addressed prior to the transfer or the federal government must continue to remediation post transfer.
- Hazardous Materials designation under the Hazardous Materials Transportation Act (CERCLA 306(a))– As designated as a hazardous materials certain requirements related to transportation of such chemicals. These include recordkeeping, placards on trucks as well as other requirements.
- Government Cleanups– U.S. EPA can require cleanup of sites with PFOA and PFOS contamination and seek recovery from potentially responsible parties (PRPs).
- Private Party Cleanups– Private parties that conduct cleanup consistent with the Nation Contingency Plan (NCP) can recover cleanup costs from potentially responsible parties (PRPs).
What parties are affected by the proposed rulemaking?
The rulemaking list various manufacturers or businesses that may be impacted by the rule. The categories include:
- PFOA and/or PFOS manufacturers (including importers and importers of articles)
- PFOA and/or PFOS processors
- Manufacturers of products containing PFOA and/or PFOS
- Downstream product manufacturers and users of PFOA and/or PFOS products
- Waste management and wastewater treatment facilities
It is important to note that the list of parties potentially affected by the rule is purely for information purposes. Any party that is a “potentially responsible party” or PRP under CERCLA, releases PFOS/PFOA above RQs or transports PFOS/PFOA will be covered by CERCLA.
What is the legal basis for designation of PFOS/PFOA?
There are two different ways a chemical or compound can be designated as a “hazardous substance” under CERLCA. There is automatic designation under CERLCA 101(14) if a compound is listed under the following environmental regulations:
- Clean Water Act section 311(b)(2)(A) hazardous substances;
- Resource Conservation and Recovery Act section 3001 hazardous wastes;
- Clean Water Act section 307(a) toxic pollutants;
- Clean Air Act section 112 hazardous air pollutants; and
- Toxic Substances Control Act section 7 imminently hazardous chemical.
Alternatively, EPA can designate a chemical or compound as a “hazardous substance” using its authority under CERCLA Section102 under the following criteria:
(1) “such elements, compounds, mixtures, solutions, and substances”
(2) “which, when released into the environment”
(3) “may present substantial danger”
(4) “to the public health or welfare or the environment.”
EPA has not designated compounds previously using its CERCLA Section102 authority. Therefore, outside of the major ramifications of listing PFOS/PFOA as hazardous substances, this action is also significant because it will be the first time EPA presents its interpretation of its legal authority under CERCLA Section 102 which can have significant consequences for listing of future compounds.
What was the basis EPA used to support its conclusion PFOS/PFOA “may present substantial danger to public health or welfare or the environment?”
EPA categorizes concerns related to PFOS/PFOA into the following categories and provides an overview of scientific evidence related to each category:
- Chemical/Physical Characteristics– EPA cites to studies showing the chemicals are persistent and bioaccumulate. The water solubility allows the chemicals to migrate readily from soil to groundwater.
- Toxicity and Toxic kinetics– EPA cites to its revised Health Advisory Level and its review of over 400 peer –reviewed studies regarding the toxicity of the compounds. EPA provides an overview of the conclusions from these studies in the draft proposed rulemaking.
- Environmental Prevalence– EPA discusses how widespread the contamination can be found. EPA discussing AFFF as a major source of contamination in soil and groundwater where AFFF was released.
Did EPA consider the costs associated with designating PFOA/PFOS as “hazardous substances?”
No. EPA determined that it does not need to consider costs when designating a hazardous substance using its CERCLA Section102 authority. Given the fact that this is the first designation of a chemical/compound under CERLCA Section 102(a), EPA’s interpretation that it should not consider costs when designating a compound as a “hazardous substance” under Section 102(a), will likely be an area that will be challenged by industry. There have been multiple cases that have gone up to the U.S. Supreme Court regarding the Clean Air Act and other environmental statutes as to whether EPA is required to consider costs when promulgating a rule. In some cases the Court ruled EPA cannot consider costs and in some cases the Court rule cost is a relevant consideration. It appears likely that EPA’s rejection of cost considerations through this designation will be challenged.
While EPA states it does not have any obligation to consider costs in designating PFOS/PFOA as “hazardous substances,” EPA states in its proposed rule that direct costs would be related to the RQ reporting requirement and would be minimal (estimated at $370,000 annually from reporting of releases). However, EPA states indirect costs associated with required cleanup is difficult to quantify.
What is Industry’s view of the proposed action to list PFOS/PFOA as “hazardous substances?”
When the proposed rule was under OMB review, the U.S. Chamber of Commerce sent a letter with a supporting study on the cleanup costs that will be imposed on industry stating costs should be considered. The Chamber commented:
- Private party compliance costs for this rulemaking are estimated to be between $11 billion and $22 billion.
- Corresponding annualized private party PFOS/ PFOA cleanup costs at non-federal sites are estimated to be between $700 million to $800 million
Why was a Regulatory Impact Analysis Required by OMB?
The U.S. Chambers’ cost estimates greatly exceed the $100 million threshold requiring EPA to prepare a full regulatory impact analysis (RIA) consistent with EO 12866 and the fulfillment of additional statutory requirements under the Congressional Review Act and Unfunded Mandates Reform Act. EPA is preparing a RIA analysis that will likely draw heavy scrutiny from industry. EPA’s forthcoming RIA will be called the Economic Assessment of the Potential Costs and Other Impacts of the Proposed Rulemaking to Designate PFOA and PFOS as Hazardous Substances. .
What are the next steps in the EPA process?
There is a 60 day public comment period which commenced on September 6th when the proposed rule was published in the Federal Register. Parties will have until November 7, 2022 to comment on the proposed rulemaking. It is anticipated EPA will receive a very large volume of comments on the proposed rule. EPA says it is targeting finalizing the rule in the Summer of 2023.