CERCLA Liability for PFAS Discharges May Be on The Horizon

CERCLA Liability for PFAS Discharges May Be on The Horizon

In September 2022, the United States Environmental Protection Agency (“EPA”) issued a notice of proposed rulemaking, which would designate two PFAS compounds – PFOA and PFOS – as “hazardous substances” under the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), commonly referred to as the Superfund Law. Although the public comment period for that particular rulemaking closed in November 2022, EPA more recently issued an Advance Notice of Proposed Rulemaking (“ANPRM”), in which it has requested public comment as to whether additional PFAS compounds – such as HFPO-DA (marketed under the trade name GenX) – should also be included in the proposed designation. The comment period for the ANPRM was scheduled to close June 12, 2023, but has been extended to August 11, 2023.


What is CERCLA?


Enacted in 1980, CERCLA is a cornerstone of the various pieces of legislation that make up the body of federal environmental law. Simply put, CERCLA, among other things, (1) provided a mechanism for EPA to track certain pollutant spills and hold Potentially Responsible Parties (“PRPs”) accountable by bringing enforcement actions by forcing PRPs to either perform the necessary investigation and cleanup or to reimburse EPA its costs for an EPA-led investigation and cleanup; and (2) created private rights of recovery for contribution and cost recovery for costs incurred by those parties in remediating contaminated sites.


But CERCLA does not necessarily apply to all new discharges. By its terms, CERCLA is limited in applicability to discharges of “Hazardous Substances,” as that term is defined. According to EPA, “[t]here are currently about 800 CERCLA hazardous substances,” the list of which is developed by reference to several other major pieces of federal environmental law as well as by EPA’s own rulemaking authority.


Putting all of this together, CERCLA provides EPA enforcement capabilities to force PRPs to investigate and cleanup discharges of hazardous substances or face legal action. It also gives private persons and entities – as well as states and municipalities – the right to bring cost recovery actions against other such persons and entities to recoup their costs in cleaning up a discharge that they allege was caused by someone else.


What is PFAS?


There has been quite a bit of buzz over the last several years over PFAS compounds – the so-called “forever chemicals.” Per- and polyfluoroalkyl substances (“PFAS”) are a cluster of thousands of man-made chemical compounds that have been in large-scale industrial and consumer use for roughly 70 years. These compounds are most famously used in textiles, non-stick cookware, and Aqueous Film Forming Foam (“AFFF”) – a fire suppressant used to extinguish flammable liquid fires. These compounds (1) do not naturally break down in the environment; (2) can easily move through soils and into groundwater and drinking water; and (3) bioaccumulate.


What is the Regulatory Status of PFAS Compounds?


PFAS compounds are part of a larger group of Contaminants of Emerging Concern (“CECs”), which, by definition, are contaminants characterized by a perceived, potential, or real threat to human health or the environment or by a lack of published regulatory health standards. In other words, CECs are contaminants that as yet lack clear regulatory guidelines, and which may pose threats to human health and safety. There has been significant attention paid in recent years to CECs, especially PFAS compounds, including significant state-level regulation and federal regulatory investigation. New York, for example, has since 2017 considered PFOS and PFOA a hazardous substance under its own superfund law, thereby providing NYSDEC regulatory and enforcement authority with respect to PFOA and PFOS storage and releases – including the authority to require cleanups. Indeed, Newburgh’s own Stewart Air National Guard Base was declared a state superfund site as a source of PFAS contamination in Newburgh’s drinking water.


Similarly, New Jersey has taken significant steps toward regulating CECs. In recent years, the New Jersey Department of Environmental Protection has: (1) added Maximum Contaminant Levels (“MCLs”) for PFNA (0.013 ppb), PFOA (0.01 ppb), and PFOS (0.01 ppb) to the Ground Water Quality Standards (“GWQS”); issued Interim Soil Remediation Standards in effect as of October 13, 2022 for PFNA, PFOA, PFOS, and GenX; and (3) issued drinking water standards for PFOA and PFOS. NJDEP has also required post-RAO sites to certify as to whether PFAS compounds may be present at sites that have already been cleaned up in biennial certifications. Additionally, NJDEP has the regulatory authority to compel PRPs to perform an order-of-magnitude analysis to evaluate the continuing effectiveness for in-process and completed cleanups in light of developing PFAS regulations, raising the specter of potential reopeners on post-cleanup sites in New Jersey.


Why Does Designation of PFAS Compounds as CERCLA Hazardous Substances Matter?


In the event that EPA promulgates a final rule designating PFOS, PFOA, and GenX as CERCLA Hazardous Substances, it will represent a sea-change in how discharges of those compounds are managed nationwide. In the most immediate sense, it will require that any new discharges of those compounds exceeding certain minimum thresholds be reported to the EPA. This will trigger EPA oversight of investigations and cleanups of certain discharges, though it remains to be seen how aggressive EPA will be in pursuing PRPs and listing the sites of new discharges to the National Priorities List. As such, we can expect significant litigation to allocate liability for monitoring and remediation over the coming years. Note, however, that nothing in the proposed rulemaking would require reporting of discharges occurring prior to issuance of the final rule. Therefore, presently existing PFAS contamination would likely not trigger CERCLA liability, absent a change in EPA’s proposed rule on PFOA/PFOS or a change in approach in any GenX rule proposal that may emerge from the recent ANPRM.


Either way, the growing attention to CECs and, in particular PFAS compounds, has significant impacts on the regulated community. Purchasers of industrial and commercial properties – and entities entering into M&A transactions – will want to carefully consider their environmental due diligence and incorporate these CEC’s into their risk assessments. Commercial and industrial operators will also want to carefully scrutinize their Pollution Legal Liability policies determine if indemnities are available in the event PFAS compounds are or may be present on their sites. Moreover, prospective purchasers should be aware that given recent regulatory developments in New York and New Jersey – and given the imminent listing of certain PFAS compounds as CERCLA hazardous substances – new PLL policies may be difficult (and expensive) to find. Finally, facility owners and operators will want to make sure that they – or their environmental consultant – fully understand the testing methodologies and criteria employed at sites to ensure that, in the event of a PFAS discharge, you are actually dealing with a reportable quantity.


About the Author: James is an Associate with Catania Mahon & Rider, focusing his practice on all aspects of environmental law under Federal, New York, and New Jersey environmental laws. James has significant experience in complex environmental litigations, environmental aspects of commercial and corporate transactions, and environmental regulation and remediation.

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