Tag: Comprehensive Environmental Response Compensation and Liability Act

U.S. EPA Finalizes Designation of Two PFAS Chemicals as Hazardous Substances Under CERCLA

On April 19, the U.S. Environmental Protection Agency (EPA) released its long-awaited final rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), including their salts and structural isomers, as “hazardous substances” under Section 102(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA” or “Superfund”) (the “Final Rule”). The designation, which takes effect 60 days after the final rule is published in the Federal Register, will provide expanded investigation and remediation authority to EPA, will provide a powerful tool for private actions under CERCLA, and will trigger additional release reporting requirements. It will also expand enforcement authority in states that regulate CERCLA-designated hazardous substances.

Hazardous Substance Designation of PFOA and PFOS Has Broad Implications for Cleanups and CERCLA Liability

PFOA and PFOS are two specific chemical compounds within a broad group of thousands of manmade chemicals known as per- and polyfluoroalkyl substances (PFAS). EPA focused its regulatory efforts on these two PFAS; however, the vast majority of PFAS remain unregulated under CERCLA even after issuance of the Final Rule.

Designating PFOA and PFOS as hazardous substances triggers numerous requirements. The primary impact of the Final Rule is that it incorporates PFOS and PFOA into CERCLA’s strict, joint and several liability framework. This change grants EPA the power to investigate releases of PFOA and PFOS and compel potentially responsible parties (PRPs), including owners and operators of a property or facility, to remediate releases of PFOA and PFOS through the specific CERCLA enforcement provisions. PRPs also now have a clear private right of action under CERCLA to pursue cost recovery and contribution actions. Additionally, when the Final Rule becomes effective, facilities will be required to immediately report releases of PFOA and PFOS above their designated “reportable quantities,” (currently one pound within a 24-hour period), to the National Response Center and relevant state or tribal authorities.

Furthermore, many states include CERCLA hazardous substances under their cleanup statutes, meaning these states will now be able to require remediation of PFOA and PFOS under state law.

Listing PFOA and PFOS as “hazardous substances” under CERCLA does not make PFOA or PFOS contaminated waste a “hazardous waste” or a “hazardous constituent” under the Resource Conservation and Recovery Act. However, this designation does require the U.S. Department of Transportation to designate PFOA and PFOS as “hazardous materials” for purposes of transport under the Hazardous Materials Regulations.

While the PFOA and PFOS CERCLA Listing is Final, Questions Remain

As noted in our prior article on the proposed rule, EPA’s designation of PFOA and PFOS as “hazardous substances” leaves several questions unanswered.

  • How will EPA’s CERCLA enforcement discretion policy really play out in practice? 

    Concurrently with the publication of the Final Rule, EPA also released a PFAS Enforcement Discretion and Settlement Policy under CERCLA. This enforcement policy captures EPA’s current position that it does not intend to pursue PRPs under circumstances where “equitable factors” do not support doing so. Enumerated circumstances in the policy include so-called “passive receivers” of PFAS, including community water systems and publicly-owned treatment works, publicly-owned municipal solid waste landfills, publicly-owned airports and local fire departments, and farms where PFAS-containing biosolids are applied to the land. However, EPA’s enforcement policy—which is not binding upon the agency and is subject to change at any time—should be viewed with a healthy dose of skepticism among regulated industries, considering the sheer breadth of potential CERCLA liability for these substances, as well as continued Congressional proposals to codify exemptions for passive receivers within the CERCLA statute itself. Notably, the agency’s enforcement position does not in any way prevent private parties from initiating cost recovery or contribution actions under CERCLA.

  • How will regulated industries manage the costs of PFOA and PFOS cleanup?PFAS contamination can be wide-ranging due to several factors unique to the chemicals themselves. Further, unlike remediation technologies for other well-studied contaminants, existing remediation technologies for PFOA and PFOS are nascent at best and are expensive at a large scale. It is therefore often difficult to even estimate accurate cost ranges for PFOA and PFOS cleanups, but costs can easily run into the millions of dollars at complex sites. Although EPA has published interim guidance on PFOA and PFOS disposal methods, and the recently passed Infrastructure Investment and Jobs Act provides $3.5 billion over five years for Superfund cleanups, the methods and money may not go as far as planned if cleanup costs for PFOA and PFOS sites end up exponentially higher.
  • How will EPA handle potential PFOA and PFOS contamination at closed Superfund sites?In response to comments seeking clarification on whether designating PFOA and PFOS will lead to the reopening of closed Superfund sites, EPA stated that the final rule “has no impact” on EPA’s authority to list PFOA and PFOS sites as Superfund sites. EPA’s question-and-answers page—which we note is not a binding statement from the agency—also states that “[d]esignation will not change EPA’s process for listing and/or deleting [National Priorities List (NPL)] sites or evaluating remedies’ protectiveness through five-year reviews, and it will not require PFOA and PFOS sampling at NPL (final or deleted) sites.” While the final rule does not require PFOA and PFOS sampling at closed sites, it does not prevent EPA from ordering sampling at these sites. PRPs who may have long ago stopped budgeting for remedial costs at existing or legacy locations that were remediated years and even decades ago, may find that they are required to revisit these sites where PFOA and PFOS may be present.
  • What cleanup standards will govern PFOA and PFOS remediation?There is a current patchwork of state regulatory standards relating to PFAS, ranging from binding cleanup levels, advisory guidance, or no PFAS standards at all, which may lead to similarly patchwork cleanup standards depending on which standards are applied as an appropriate “applicable or relevant and appropriate requirement” (ARAR) at a specific site. In addition, on April 10, 2024, EPA issued a final rule setting Maximum Contaminant Levels (MCL) for PFOA and PFOS in drinking water at 4.0 parts per trillion (ppt), individually. While these drinking water standards are separate from EPA’s final rule listing PFOA and PFOS as “hazardous substances” under CERCLA, the “hazardous substances” rule notes that the MCL may be an appropriate ARAR for cleanup efforts under CERCLA.
  • What other PFAS will EPA next target under CERCLA?As noted above, PFOA and PFOS are two specific PFAS among thousands of others currently and historically used. Much of the science on the potential health effects of PFAS (both individual chemical compounds and as a class) continues to evolve. In the meantime, EPA has moved to regulate additional types of PFAS under other statutes. For example, as we noted in a previous client alert, EPA recently published a proposed rule listing seven other PFAS compounds as hazardous constituents under RCRA. Some or all of these PFAS may eventually be targets of future CERCLA rulemaking efforts.

Next Steps

The Final Rule will take effect 60 days after it is published in the Federal Register. Affected parties should consider their portfolio of planned, active, and in some cases, closed remediation sites for potential implications, and companies may consider reviewing and updating their hazardous substance reporting and transportation protocols to address PFOA and PFOS as applicable.

© 2024 Foley & Lardner LLP
For more on PFAS, visit the NLR Environmental, Energy & Resources section.

Supreme Court Decides CTS Corp. v. Waldburger Evaluating Whether CERCLA Precludes State-Law Statutes of Repose

SchiffHardin-logo_4c_LLP_www

On June 9, 2014, the Supreme Court decided CTS Corp. v. Waldburger, holding that a North Carolina statute of repose was not preempted by Section 9658 of theComprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

From 1959 until 1985, CTS Corporation manufactured electronics on a piece of property in North Carolina.  CTS sold the property in 1987.  Owners of both the former CTS property and adjacent property filed state-law nuisance claims in 2011, alleging that they had learned from the United States Environmental Protection Agency (USEPA) in 2009 that their groundwater was contaminated.  A district court relied on N. C. Gen. Stat. §1-52(16), a North Carolina statute which bars property damage claims made “more than 10 years from the last act or omission of the defendant giving rise to the cause of action,” to dismiss the claims, finding that CTS’s last act occurred in 1987, when the property was sold.  Relying on CERCLA Section 9658, the Fourth Circuit re-instated the nuisance claims because it concluded that CERCLA pre-empted the North Carolina statute.

The Supreme Court reversed the Fourth Circuit, holding that the North Carolina statute was not pre-empted and that CERCLA Section 9658 was limited to “statutes of limitations.”  While noting that there is common ground between “statutes of limitations,” which create “time limit[s] for suing in a civil case, based on the date when the claim accrued,” and “statutes of repose,” which “put[] an outer limit on the right to bring a civil action,” “each has a distinct purpose and each is targeted at a different actor.”  The Court found that, when Congress passed Section 9658, the language it chose limited the provision to statutes of limitations.  Additionally, the Court found that CERCLA expressed neither any intent to provide “a general cause of action for all harm caused by toxic contamination” nor a clear intent to supersede traditional police powers of the states.

Two points are worth mention:

First, the CTS decision is not the “usual” CERCLA decision.  The decision does not alter the mechanism under which federal or state agencies investigate, characterize, and remediate properties.  Indeed, based on the case history, the groundwater contamination alleged in the CTS litigation was discovered by EPA in 2009, two years before CTS suit was filed.  In 2012, the involved property was added to EPA’s National Priorities List, a designation reserved for sites EPA has identified as being among its priorities.  Similarly, it does not alter the federal causes of action parties may use to recover costs related to their remediation activities.

Second, the CTS decision appears to be based on a straightforward reading of CERCLA.  The Court held that CERCLA does not preclude a state’s choice to have legislative statutes of repose which apply to certain categories of tort cases.  While a few states have these, the majority of states do not.[1]  Each of the federal environmental statutes – to a degree – seeks to shape state action.  There is no indication in CERCLA that it intended to “trump” state ability to form independent tort-related law for any situation related to contamination.  Had it been Congress’s intent to supersede all state statutes of repose related to actions related to contamination, Congress could have done so.  In the Court’s view anyway, the language Congress chose did not do so here.

Article By:

J. Michael Showalter
Of:
Schiff Hardin LLP

[1] States with statutes of repose which were identified in the course of the CTS litigation include Connecticut, see Conn. Gen. Stat. § 52-584; Kansas, see Kan. Stat. § 60-513(b); North Carolinia, see N.C. Gen. Stat. § 1-52(16); and Oregon, see Or. Rev. Stat. § 12.115(1).  Alabama has a 20-year common-law statute of repose.  See, e.g., Abrams v. Ciba Specialty Chems. Corp., 659 F. Supp. 2d 1225) (S.D. Ala. 2009).

Supreme Court Finds that CERCLA Does Not Preempt Statutes of Repose – Comprehensive Environmental Response, Compensation, and Liability Act

GT Law

On June 9th, the Supreme Court issued its opinion in CTS Corp. v. Waldburger et al., No.13-339 (June 9, 2014) (slip op.) [link], in which it held that CERCLA section 309, 42 U.S.C. § 9658, does not preempt statutes of repose, reversing the Fourth Circuit.  Section 9658(a) preempts state law statutes of limitation for personal injury and property damage claims related to the release of a hazardous substance.  Justice Kennedy, writing for the majority, reaffirmed the oft-repeated “presumption against preemption” in reasoning that Section 9658 does not preempt state statutes of repose.  Statutes of limitations bar claims after a specified period of time based on when the claim accrued, whereas statutes of repose bar suits brought after a specified time since the defendant acted, regardless of whether the plaintiff has discovered the resulting injury.

CTS Corporation (“CTS”) operated an electronics plant in Asheville, North Carolina from 1959 to 1985.  CTS, which manufactured and disposed of electronics and electronic parts, contaminated its property with chlorinated solvents.  CTS sold the facility in 1987, and portions of the property were sold off.  Owners of those parcels, and adjacent landowners, brought suit against CTS in 2011, alleging that they discovered contamination on their properties in 2009.

The District Court found that N.C. Gen. Stat. § 1-52(16), North Carolina’s statute of repose, barred the suit.  That section prohibits a “cause of action [from] . . . accru[ing] more than 10 years from the last act or omission of the defendant giving rise to the cause of action.”  The Fourth Circuit reversed on the basis of CERCLA preemption, finding that section 9658 was ambiguous because it did not explicitly list “statutes of repose.”

The main issue at oral argument before the Supreme Court was whether the distinction between statutes of repose and statutes of limitation actually existed when Congress enacted Section 9658.  As Justice Scalia said, “. . . I used to consider them when I was in law school and even as late as 1986 [when section 1958 was added by Congress], I would have considered that a statutes of limitations.  Now, you think Congress is smarter.  They know the law better.”  Although other justices seemed to agree—and the distinction had only begun to be made in the 1980s—a 1982 Senate Superfund Study Group Report made that distinction and recommended that the few states that have statutes of repose repeal them.  Despite the overlap between statutes of repose and statutes of limitation, the Court found the distinctions important—statutes of repose are not related to the accrual of any cause of action and  cannot be tolled.  Because the Study Report made the distinction between the two, and because section 9658 fails to mention “statute of repose” and is not written in a way to suggest that it is intended to include both, the Court reversed.

The Court cited, as additional support for its conclusion the “well-established ‘presumptions about the nature of pre-emption.’”  The presumption against preemption counsels courts, when interpreting the text of a preemption clause susceptible of more than one possible reading, to “ordinarily accept the reading that disfavors pre-emption.”   The Fourth Circuit failed to mention this presumption (although the dissent relied on it).

This opinion follows recent Superfund cases in the Supreme Court in two respects.  First, the Supreme Court attempts to apply the “natural reading” of the statutory text rather than to reach out to interpret the statute broadly to effectuate its “remedial purpose.”  Indeed, Justice Kennedy explicitly derides that rationale for interstitial lawmaking.  Second, the Supreme Court attempts to preserve ordinary state law principles to the greatest extent possible.  So, for example, United States v. Bestfoods, 524 U.S. 51 (1998), was very respectful of state corporation law, and so too Waldburger is respectful of state tort law.  In this way, one might consider today’s decision to be fairly unremarkable.

The majority does not even address Justice Ginsburg’s dissent in which she and Justice Breyer worry that personal injuries with long latencies—like cancers—will go uncompensated.  But some of the long latencies arise not from the progress of some disease but of slow migration of a hazardous substance, in a groundwater plume for example.  Indeed, to the extent that many environmental toxic tort claims rest on allegations of property damage or diminution in value, the cancer model may be misplaced.