CERCLA

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On April 19, 2024, the U.S. Environmental Protection Agency (EPA) announced the pending publication of a final rule designating two widely used per-and polyfluoroalkyl substances (PFAS) chemicals—perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS)—as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

This announcement comes approximately a year and a half after EPA initially proposed the designation of PFOA and PFOS as CERCLA hazardous substances via EPA’s publication of its proposed rule in late 2022.

For several years, many in the legal and environmental communities have wondered what the reach of enforcement by the EPA might be if the agency were to determine that per- and polyfluoroalkyl substances (PFAS) were hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, or, more informally known as Superfund). EPA proposed Superfund designations in 2022 for two PFAS (perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS)). Superfund provides a mechanism for the EPA to force the parties responsible for the contamination at a designated Superfund site to either perform the cleanups with EPA oversight or reimburse the EPA if the EPA leads the cleanup activities. To date, EPA has identified nearly 200 Superfund sites where PFAS are present.

In October, as reported by Inside EPA, EPA’s chief of the Resource Conservation and Recovery Office’s cleanup programs branch, Charlotte Mooney, spoke about PFAS at Superfund sites at the Association of State and Territorial Solid Waste Management Officials’ annual conference. During that session, Mooney confirmed that the EPA’s proposed designation of PFAS as a hazardous substance could lead the agency to reopen sites where cleanup had previously been considered complete. Mooney stated the analysis would be done on a “case-by-case basis” but the criteria for that analysis has not been disclosed to date.

On October 18, 2021, EPA issued its “PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024.” This roadmap sets out EPA’s action plan for minimizing the release of PFAS into the environment. On September 6, 2022, EPA proposed to designate Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS), two PFAS compounds, as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Recently, EPA announced it was pushing back its target for this hazardous substance designation to February 2024. This designation could result in sellers being strictly liable for costs associated with onsite and offsite contamination from PFAS, regardless of whether the risk of contamination is known at the time of purchase. But doing so could raise major concerns for the real estate market, which, until recently, had turned a blind eye to PFAS related issues.
Before entering a business transaction involving real estate with potential environmental concerns related to PFAS, parties should consider the following to protect their interests.

Following the EPA’s proposed designation of PFOA, PFOS, and their salts and structural isomers, as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, otherwise known as Superfund) on Sept. 6, 2022, EPA has just published an advanced notice of proposed rulemaking…