PFOA & PFOS: CERCLA Liability is Coming

On August 26, the EPA announced their long-anticipated proposed rule to designate two PFAS substances, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability (CERCLA) Act.

The announcement marks EPA’s first use of section 102(a) to designate a hazardous substance and therefore whatever action is taken will set precedent for future designations. CERCLA authorizes EPA to impose strict reporting requirements, regulate cleanups, and seek recovery from polluters for cleanup costs. It also allows private parties who have conducted their own remediation to sue other potentially responsible parties for their cleanup costs.

The announcement comes exactly two weeks after the Office of Information and Regulatory Affairs completed a lengthy seven-month review of the rule proposal. Upon completion the Office of Management and Budget classified the rule as “economically significant” which will require the EPA to conduct a regulatory impact analysis on the specific economic implications of the rule. Among other issues EPA is soliciting comment on is its interpretation that Section 102(a) prohibits the agency from considering cost in its decision making, though they do note that direct costs appear relatively minor. However, EPA claims indirect costs cannot reasonably be assessed because designation itself does not apply to any specific site. EPA asks for comments on whether 102(a) allows for consideration of costs, what costs and benefits should be considered, and other issues related to accounting of direct and indirect costs and benefits. 

The proposed rule will require federal facilities, water utilities, manufacturers and companies across various industries to report releases of PFOA and PFOS above the reportable quantity (RQ) of one pound. Under the CERCLA statute, the reportable quantity for all hazardous substances is one pound, however, the agency noted in the pre-publication notice that it could opt to adjust the RQ for PFOA and PFOS through a separate notice-and-comment rulemaking if deemed necessary. Regulated entities could also be required to disclose the location and extent of such releases. Releases of PFOA and PFOS above the RQ would be reported to the agency’s National Response Center or state and tribal emergency response commissions. The pre-publication notice indicates over 20 major industries that could likely be impacted and subject to the requirements under the rulemaking.

EPA also explicitly noted in its announcement that it will exercise enforcement discretion and “other approaches” to protect minor parties inadvertently impacted by contamination. Assurances from EPA that it will exercise enforcement discretion may not be enough, and Congress may be asked to speak to whether it will legislatively exempt certain industries from liability.

In accordance with the pre-publication notice, the agency announced they would be publishing the Notice of Proposed Rulemaking (NPRM) in the Federal Register in the next several weeks, at which point the proposed rule will be open to a 60-day comment period. In addition to assessing current compliance measures and regulatory exposure from the PFOA, PFOS designation, impacted stakeholders should be aware that following completion of this rulemaking the EPA intends to issue an Advanced Notice of Proposed Rulemaking (ANPRM) to seek public comment on designating other PFAS as hazardous substances under CERCLA as well.