The World Turned Upside Down? Whether the Designation of Two PFAS as Hazardous Substances Changes the World of CERCLA Liability and Due Diligence
The U.S. Environmental Protection Agency (EPA) has been laser-focused in 2024 regulating per- and polyfluoroalkyl substances (referred to generally as PFAS). Since the beginning of the year, the agency has promulgated rules updating the Toxic Release Inventory to include seven more PFAS subject to reporting; added those seven PFAS to the list of Lower Thresholds for Chemicals of Special Concern; subjected 329 PFAS to reporting requirements for significant new uses; established a National Primary Drinking Water Standard for PFAS and certain mixtures; and updated reporting requirements for consumer confidence reports, among numerous other rules, proposed rules, and guidance.
After years of mounting concern and scientific research on the potential health effects of PFAS, the EPA’s final rule on May 8, 2024, designating two PFAS — perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), including their salts and structural isomers — as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act[1] (CERCLA or Superfund) has finally arrived.[2] This article delves into the potential impacts of this long-awaited rule, posing the question by songwriter Lin-Manuel Miranda,[3] has the world turned upside down?
The answer is, “no.” Contrary to some expectations, the EPA’s final rule will not herald a wave of CERCLA cost-recovery actions. This is due to the ubiquitous nature of PFAS, the fact that only two out of thousands, if not millions, of PFAS are being regulated, the scope of the EPA’s new enforcement discretion policy, and the absence of maximum contaminant levels (MCLs). Importantly, the final rule does not alter the process of a CERCLA-compliant ASTM E1527/E2247[4] Phase I Environmental Site Assessment (ESA) for determining the presence or likely presence of hazardous substances, ensuring continuity in the work of environmental professionals.
Establishing CERCLA Liability
In the 1940s, DuPont chemists created PFAS, which is a group of highly durable and heat-resistant chemicals valued for their water-, heat-, stain-, and grease-resistant properties. PFAS are the key chemicals in DuPont’s Teflon nonstick cookware, 3M’s Scotchgard fabric protector, and fire suppressant foams, which are extensively used at airports and firefighter training facilities. PFAS compounds are also commonly used in industrial and manufacturing processes; stain and water-repellant clothing, carpets, furniture, cosmetics, and other consumer products; and food packaging (pizza boxes, fast food wrappers, microwave popcorn bags). Scientific research shows that these chemicals can be harmful to human health and are pervasive. The EPA has identified a variety of statutory authorities to address PFAS, including the Toxic Substances Control Act (TSCA), the Safe Drinking Water Act (SDWA), the Clean Water Act (CWA), and the Resource Conservation and Recovery Act (RCRA), in addition to CERCLA.
CERCLA’s two primary objectives are the timely cleanup of contaminated sites and holding polluters accountable for contamination they cause, which is referred to as the “polluter pays” principle.[5] There are circumstances when the EPA conducts cleanup work using Superfund money. When that happens, the EPA will try to recover those costs from the responsible parties through a cost recovery suit. The potentially responsible parties (PRPs) may bring contribution claims.[6]
In order to evaluate a property’s environmental conditions, particularly for purposes of assessing potential liability and defenses, a specific process called “all appropriate inquiries” (AAI) must be followed. The AAI process, which is a legal requirement under CERCLA, is codified at 42 U.S.C. §9601(35)(B), and states that ASTM International Standards E1527 and E2247 are consistent with the AAI requirements. Thus, a Phase 1 ESA must be conducted in compliance with the AAI process to be CERCLA-compliant.[7] The Phase 1 ESA is also intended to aid the recipient in determining whether, among other things, he or she meets the requirements to qualify for a defense to CERCLA liability, such as an innocent landowner or bona fide prospective purchaser.
Liability under CERCLA requires that a plaintiff prove four basic elements: 1) There has been a release or threatened release of hazardous substances from a site; 2) the site is a “facility”; 3) the release or threatened release has caused incurrence of response costs; and 4) the defendant is one of the kinds of persons who are responsible for the incurrence of those costs (current owner or operator, owner or operator at the time of a release, an arranger, or a transporter).[8]
What Is a CERCLA Facility and a CERCLA Release?
The ubiquitous nature of PFAS makes these substances different from other hazardous substances, so understanding the terms “facility” and “release” is critical. In the context of CERCLA, a facility can be a structure such as a building, equipment, pipe, or landfill, but it can also be “any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located.”[9]
A CERCLA release includes a variety of actions such as spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment.[10] CERCLA is agnostic as to whether a release is accidental or intentional.[11] The 11th Circuit has explained that a CERCLA release is not limited to instances in which a hazardous substance is initially introduced into the environment from a facility, such as a spill of PFAS from a vat onto the ground, but should be broadly interpreted to include the subsequent movement and dispersal of hazardous substances, such as moving or dispersing contaminated soils.[12] These terms are meant to be expansive and encompass the area of contamination, so a release from a facility may extend beyond property boundaries, such as when a groundwater plume migrates offsite.[13]
However, the caselaw suggests that diffused anthropogenic contamination,[14] whether PFAS or any other hazardous substance, would not constitute a CERCLA release unless a source of the release, such as a vessel or facility, can be identified.[15] Although seemingly obvious, a release must occur from a facility, otherwise the facility itself has no relevance as an element.[16] Furthermore, to be compliant with the AAI process, PFOA and PFOS should be considered only when a source has been identified on the subject property or adjoining property, or comment/opinion is requested by the recipient of the Phase 1 ESA, thus, the mere presence of PFAS on a property does not necessarily equate to a recognized environmental condition (REC), the identification of which is a fundamental purpose of the AAI process. There must be evidence of a release from a facility.
The EPA’s Enforcement Discretion Memo
While the EPA has broad discretion under CERCLA, on April 19, 2024, the agency issued a PFAS enforcement discretion and settlement policy under CERCLA. The memo was addressed to the regional administrators, deputy regional administrators, regional counsels, and deputy regional counsels, and provides that the EPA only intends to pursue entities that significantly contributed to the release of PFAS into the environment, such as entities that manufactured PFAS or used PFAS in the manufacturing process, federal facilities, and other industrial parties, rather than commercial parcels that have received PFAS through diffuse means such as atmospheric deposition. The EPA further provided that it does not intend to pursue otherwise potentially responsible parties where equitable factors do not support seeking response actions or costs under CERCLA, including, but not limited to: 1) community water systems and publicly owned treatment works; 2) municipal separate storm sewer systems; 3) publicly owned/operated municipal solid waste landfills; 4) publicly owned airports and local fire departments; and 5) farms where biosolids are applied to the land.[17]
This policy does not preclude action by the FDEP or third parties, but it does provide some comfort to certain entities that may otherwise satisfy the elements of CERCLA liability.
How are Response Costs Incurred?
To establish a cost-recovery claim under CERCLA, a plaintiff must also establish that the release or threatened release has caused the incurrence of response costs. There are two types of response actions for which costs may be incurred, and thereby recovered: 1) removal actions, which are typically short-term or temporary actions; and 2) remedial actions, which are typically long-term or permanent cleanups. Remember, however, that the EPA has not yet established MCLs for soil, groundwater, or surface water, and Florida only has provisional cleanup target levels as discussed in the next section.[18] This means there is no federal legal standard to incur cleanup costs in furtherance. Thus, it may be difficult for the EPA to establish this element without any MCLs.
As previously discussed, if and when MCLs are established, the EPA does not intend to pursue entities where “equitable factors do not support seeking response actions or costs under CERCLA,” unless the EPA changes its policy. If the EPA does not seek costs — on equitable grounds — from municipal services as previously discussed, then equitable grounds also preclude the EPA from seeking costs from a commercial property when there are no MCLs, no defined source, and without evidence of moving or dispersing hazardous substances, e.g., no release from a facility.
What Is Happening in Florida?
The FDEP established provisional cleanup target levels (P-CTLs) for groundwater and soil. Provisional CTLs are allowed under Ch. 62-777, and are enforceable.[19] Thus, assessment and remediation under these P-CTLs ensure compliance with remediation requirements of Fla. Admin. Code Ch. 62-780. Notably, the option for pursuing alternative cleanup target levels remains viable, even for PFOA and PFOS. The P-CTLs for groundwater are 70 ppt for PFOA and PFOS. The P-CTLs for soil are expressed in parts per million in chart 1.
F.S. §376.91 states that if the EPA has not finalized standards for PFAS in drinking water, groundwater, and soil by January 1, 2025, then the FDEP must adopt statewide cleanup target levels (CTLs) using risk-based corrective action criteria.[20] The EPA already established a National Drinking Water Standard of 4 ppt earlier this year, so the FDEP must begin rulemaking for groundwater and soil unless the EPA issues standards for those media before the new year.
The implications of liability for cleanup have caused consternation among PRPs and their legislative representatives in Florida, especially since there are currently no existing technologies that will remediate a PFAS source or plume to the FDEP’s P-CTLs. Current remedial responses consist of filtering PFAS from groundwater prior to human consumption (ex-situ) or the installation of filtering technologies designed to retard the advancement of a PFAS plume (in-situ). Still, no chemical or biological technology is currently available in-situ that will break down these compounds into their elemental components.
During the 2024 legislative session, C.S./S.B. 1692 (Brodeur) and H.B. 1665 (Gossett-Seidman) were submitted to establish a PFAS and 1,4-dioxane pretreatment initiative within the FDEP. The initiative would require wastewater facilities with industrial pretreatment programs to provide the FDEP an inventory of industrial users for the purpose of identifying probable sources of PFAS or dioxane. The bills failed. This signals that wholistic regulation of PFAS at the state level may be several years away.
Where Does the New CERCLA Rule Leave Parties Concerned About PFOS/PFOA?
Following a Phase I ESA, if a party seeks additional investigation, the effort should be based on a conceptual site model or representation of hypothesized current site conditions, which focus on the likely distribution of target analytes that might have resulted from a known or likely source. Unless there is a compelling reason for the investigation, such as a nearby source, there is no need to seek out PFOS/PFOA as part of a Phase II Assessment.
Consider benzo(a)pyrenes (BaPs) and benzo(a)pyrene-equivalents (BaP eqs) and the FDEP’s current enforcement approach if such substances are present onsite. It is not unusual to encounter BaP, which is a polycyclic aromatic hydrocarbon (PAH) and hazardous substance at many commercial properties. After all, it has both petrogenic (relating to the origin or formation of rocks) and pyrogenic (relating to byproducts of combustion and predominantly emitted to the atmosphere by burning fossil fuels) origins. Skilled environmental professionals can distinguish the difference through the analysis of the distribution of PAHs and the parent versus the alkylated PAH distributions. When such analysis confirms a pyrogenic release not attributed to the discharge of petroleum products, rather than representing diffuse anthropogenic pollution, the FDEP has been satisfied issuing a site rehabilitation completion order releasing the party (or parties) from any further obligation to conduct site rehabilitation at the facility.
FDEP’s enforcement approach with BaPs signals that, in the interim with no MCLs and in instances where comprehensive site assessment activities have not occurred but where there is no obvious indication of a source or release to the subject property, parties to a real estate transaction may consider obtaining a comfort/status letter from the FDEP regarding PFAS. The EPA also maintains a comfort/status letter policy that provides recommendations and model letters for the EPA regions to use when responding to parties interested in reusing and/or redeveloping contaminated, potentially contaminated, and formerly contaminated property.[21]
Takeaways
At the federal level, beyond the fact that PFOS/PFOA are now considered CERCLA hazardous substances, the world of litigation and due diligence has not turned upside down. CERCLA liability refers to the potential responsibility of parties for the cost of cleaning up hazardous substances that have been released into the environment. Based on the ubiquitous nature of PFAS, the fact that only two compounds are regulated, and that there are no MCLs, the EPA may have a challenging time establishing CERCLA liability for a cost-recovery action, particularly when a release from a facility cannot be identified. Even if the EPA can establish CERCLA liability, it will exercise discretion in doing so. Additionally, the EPA has a comfort/status letter policy for parties interested in reusing and/or redeveloping impacted properties.
At the state level, the FDEP may have an easier time establishing CERCLA liability because it is not bound by the EPA’s enforcement discretion policy, and it has enforceable provisional cleanup target levels. But FDEP faces the same challenge of identifying a release from a facility — a challenging task for diffused anthropogenic contamination. Thus, when comprehensive site assessment activities have not occurred and when there is no obvious indication of a CERCLA release from a facility, parties to a real estate transaction may consider obtaining a comfort/status letter from the FDEP. The FDEP can provide peace of mind when such is requested.[22]
[1] 42 U.S.C. §9601.
[2] Commonly used name, 89 Fed. Reg. 39124, 39125 (May 8, 2024) (to be codified at 40 C.F.R. pt. 302).
[3] Wikipedia, Lin Manuel Miranda, https://en.wikipedia.org/wiki/Lin-Manuel_Miranda.
[4] The acronym “ASTM” stands for American Society for Testing and Materials (now ASTM International). ASTM standards are followed by scientific and engineering professionals.
[5] Commonly used name, 89 Fed. Reg. 39124, 39125 (May 8, 2024) (to be codified at 40 C.F.R. pt. 302).
[6] See also Blasland, Bouck & Lee, Inc. v. City of N. Miami, 96 F. Supp. 2d 1375, 1380-81 (S.D. Fla. 2000) (explaining that cost recovery actions are most commonly brought by the government and that it is rare for a private party to incur response costs for which it would be entitled to seek recovery under §9607. Nonetheless, the statute does not seem to exclude situations where a response action contractor can sue a PRP under §9607(a)).
[7] Standards for conducting all appropriate inquiries, 40 C.F.R. pt. 312 (2005); see also EPA, All Appropriate Inquiries Final Rule, https://www.epa.gov/system/files/documents/2023-03/English%20AAI%20factsheet.pdf.
[8] Miami-Dade Cnty., Fla. v. United States, 345 F. Supp. 2d 1319, 1333 (S.D. Fla. 2004); 42 U.S.C. §9607(a); see also Blasland, Bouck & Lee, Inc. v. City of N. Miami, 283 F.3d 1286, 1302 (11th Cir. 2002).
[9] 42 U.S.C. §9601(9).
[10] Id.
[11] Chatham Steel Corp. v. Brown, 858 F. Supp. 1130, 1138 (N.D. Fla. 1994) (“The [11th] Circuit and other courts have repeatedly held §107(a) imposes strict liability on responsible parties.”).
[12] Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1510 (11th Cir. 1996) (“As noted earlier, however, the record lacks any evidence that either the repaving of the parking lot in 1986 or the gas line work in 1991 resulted in a movement of contaminated soil. As to the repaving of the parking lot, the record reveals only that this task was performed. Nothing suggests that during the course of the repaving any contaminated soil was moved or dispersed on the [s]ite.”); see also Reichhold Chems., Inc. v. Textron, Inc., 888 F. Supp. 1116 (N.D. Fla. 1995) (leakage or spillage of hazardous substances inside plant constitutes “disposal” under CERCLA).
[13] Reichhold Chems., Inc. v. Textron, Inc., 888 F. Supp. 1116, 1129 (N.D. Fla. 1995) (“While it may seem inequitable, the mere migration of contaminants from adjacent land constitutes disposal for the purposes of CERCLA, and passive downstream landowners are liable for the cleanup costs resulting from their neighbors’ activities. Quantum’s status as a passive landowner regarding the storm water runoff is not a defense to CERCLA.”) (internal citations omitted).
[14] American Society for Testing and Materials, E1903-19 §3.1.15, 2020 (The scientific term, “diffuse anthropogenic contamination,” means the presence of target analytes that result from broad-scale activities that cannot be discriminated as readily as single, site-specific discharges or releases. The most obvious of these activities are agriculture, but urban land runoff, forestry, the urine of mammals, wastewater treatment plant effluent discharges, and atmospheric deposition can also be important general sources.).
[15] See Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1510 (11th Cir. 1996).
[16] See Miami-Dade Cnty, 345 F. Supp. 2d at 1333 (listing elements of CERCLA liability); Jacksonville Elec. Auth. v. Eppinger & Russell Co., 2005 WL 3533163, at *4 (M.D. Fla. Dec. 21, 2005) (“Moreover, JEA is obligated to perform Corrective Measures Study (CMS). CMS is the investigation and evaluation of potential remedies which will protect human health and environment from the release of hazardous waste, or hazardous constituents, into the environment from the facility.” (emphasis added)).
[17] EPA, Memorandum on PFAS Enforcement Discretion and Settlement Policy Under CERCLA, https://www.epa.gov/enforcement/pfas-enforcement-discretion-and-settlement-policy-under-cercla.
[18] Florida Department of Environmental Protection Division of Waste Management, Per- and Polyfluoroalkyl Substances (PFAS) Dynamic Plan, https://floridadep.gov/waste/waste-cleanup/documents/dwm-pfas-dynamic-plan.
[19] Id. at 9-10.
[20] Fla. Stat. §376.91 (2022).
[21] Richard D. Green, Superfund Memorandum of Agreement Between the Florida Department of Environmental Protection and the U.S. Environmental Protection Agency, Region 4, EPA (Dec. 2, 1999), available at https://floridadep.gov/sites/default/files/Superfund_MOA_FL_Brownfields_Program11-19-99.pdf.
[22] Id.
Lauren Brooks is a senior attorney at the Tallahassee office of Lewis, Longman & Walker. Her practice focuses on environmental regulatory, litigation and enforcement issues, including the remediation of contaminated sites. Brooks earned her B.S. from Clemson University and her J.D. from the University of Florida Levin College of Law.
Nicholas Albergo is a senior advisor with a GHD and a faculty member in the Department of Civil and Environmental Engineering at the University of South Florida. He was one of several authors of the first ASTM E1527 Standard on Due Diligence in 1993, the former ASTM E50.02 Subcommittee vice chair on Real Estate and Management, and a contributor to every revision of the Standard since its inception.
This column is submitted on behalf of the Environmental and Land Use Law Section, Malcolm Noble Means, chair, and Susan Roeder Martin, editor.
