EPA’s PFOS, PFOA Hazardous Substances Designations Upheld

This week, the U.S. Court of Appeals for the D.C. Circuit upheld EPA’s 2024 rule designating PFOS and PFOA as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), rejecting a challenge by industry trade groups who had argued that EPA failed to sufficiently analyze, among other things, the costs and potential liability imposed by the rule. 

If it becomes final, the decision will mean that PFOS and PFOA will become drivers of new CERCLA and state cleanups and private cost-recovery actions nationwide, costing private and public clients billions of dollars. For example, EPA and the Department of Defense are already overseeing remedial investigations at hundreds of current and former military bases, many of which are the targets of pending cost-recovery claims in multi-district litigation.[1] In addition, there are dozens of ongoing cases against users of PFOS and PFOA like fire districts and product manufacturers.[2]

Even before the hazardous substances designation, issues relating to PFOS and PFOA had already appeared in renewals of NPDES permits, product liability cases against manufacturers, real estate transactions, mergers and acquisitions, and insurance coverage cases. Efforts to put the genie back in the bottle (for certain entities like passive receivers) have been made in Congress, to no avail. Given the D.C. Circuit’s decision, a strategy to minimize PFAS liability has never been more important. 

EPA’s Hazardous Substances Designation and Industry Challenge

On April 19, 2024, the Biden Administration’s EPA issued a final rule designating PFOA and PFOS as hazardous substances under CERCLA, finding that the substances were hazardous to human health and persisted for a long time in the environment and human bodies.[3] The rule marked EPA’s first ever use of its authority under CERCLA § 102(a), which allows EPA to designate hazardous substances that, “when released into the environment may present substantial danger to the public health or welfare.”[4] The landmark rule established joint and several strict liability for four classes of potentially responsible parties: (1) owners and operators of facilities from which PFOS or PFOA were discharged; (2) former owners and operators of facilities at the time PFOS or PFOA were disposed of; (3) any person who for the treatment, storage, or disposal of PFOS or PFOA; and (4) any person who transported PFOS or PFOA to a disposal or treatment facility.[5]

Shortly after the final rule’s publication, several industry groups led by the U.S. Chamber of Commerce swiftly petitioned the U.S. Court of Appeals for the D.C. Circuit for review of the rule,^[6] on three main grounds. First, the industry groups argued that EPA’s interpretation of the statutory language “may present substantial danger” in § 102(a)—a precondition for designating a new hazardous substance—was too broad and inconsistent with statutory structure and a prior agency interpretation.^[7] Second, the industry groups claimed EPA failed to adequately account for the economic costs of the rule.^[8] And third, the industry groups asserted that EPA’s decision to move forward with the rule despite significant uncertainty as to the consequences of the designation was arbitrary and capricious.

After the President Biden’s departure from office, there was uncertainty for a time whether the Trump Administration would defend the rule from the industry challenge. For seven months, the case was held in abeyance as the Department of Justice deliberated.^[9] And reportedly, some high-level EPA officials favored rescission of the rule.^[10] But ultimately, on September 17, 2025, the Department of Justice committed to defending the rule.[11]

The D.C. Circuit’s Decision

On August 18, 2026, a unanimous three-judge panel of the D.C. Circuit denied the industry groups’ petitions for review.[12] Judge Millett delivered the opinion of the court and was joined by Judge Rao and Judge Katsas. The court rejected each of the three main arguments asserted by the industry groups.

First, the court rejected the industry groups’ argument that EPA misread its statutory authority to designate new hazardous substances under CERCLA § 102(a).[13] Pointing first and foremost to the statutory text, which provides that EPA “shall” “designat[e] as hazardous substances” those substances that “when released into the environment may present substantial danger to the public health or welfare or the environment,”[14] the court rejected the industry groups’ argument that EPA had to find a certainty of harm from PFOS and PFOA being released before issuing the designation. Applying this criteria, the court determined that the record contained ample scientific evidence of the risk of substantial harm associated with PFOS and PFOA. Consulting CERCLA’s scheme, the court also rejected the argument that hazardous substances must be comparatively more harmful than other pollutants and contaminants. And it rejected out of hand the argument that allowing the designation upon a finding of a risk of substantial harm, rather than a certainty, rendered CERCLA § 102(a) unconstitutionally vague or violative of the nondelegation doctrine.

Second, the court rejected the petitioners’ argument that EPA failed to adequately account for the costs of the designation, procedurally and substantively.[15] The industry groups complained that EPA’s final cost-benefit analysis, which was more robust and contained new quantitative cost estimates (including $10.3–51.7 million in annualized marginal costs for potentially responsible parties at National Priorities List sites[16]), differed too much from the initial assessment in the notice of proposed rulemaking and failed to adequately explain underlying assumptions. But the court determined that the more detailed analysis in the final rule grew out of comments received on the proposed rule and methodologies used in the proposed rule that continued to be refined, showing the notice and comment process worked exactly as it should have. The court also rejected the petitioners’ many different arguments that EPA miscalculated a variety of costs, failed to engage in certain speculative cost analyses, and miscalculated or mischaracterized benefits to the public.

Finally, the court rejected the industry groups’ argument that EPA failed to adequately assess all the potential “severe” consequences flowing from the designation—chiefly, the potential liability to businesses as potentially responsible parties.[17] The court explained that a forecast of potential liability was virtually impossible given the many variables associated with CERCLA cleanups, including whether or not (1) a site will be listed on the National Priorities List; (2) a removal action will be taken instead of a remedial action, whether various statutory defenses apply; and (3) EPA’s future enforcement priorities and practices. The court wrote:

All of those uncertainties and contingencies make forecasting liability costs exceptionally difficult upfront. But those same steps also ensure that remedial and recovery actions are undertaken only upon thoroughgoing site-specific consideration and review by EPA, a weighing of the relative harms and benefits of action, and consideration of the statutory limitations on liability. Given all that, Petitioners’ worry that listing PFOA and PFOS as hazardous substances will lead ineluctably to significant liability is misplaced.[18]

Looking Forward

The industry groups led by the Chamber of Commerce have not yet indicated whether or not they will petition for rehearing, rehearing en banc, or certiorari. But if the D.C. Circuit’s decision becomes final, the survival of the rule designating PFOS and PFOA as hazardous substances under CERCLA will have critically important implications for businesses and individuals. 

For one, the designation is likely to increase costs at sites currently undergoing investigation or cleanup, result in new CERCLA sites, and potentially reopen cleanup remedies at sites where parties long ago may have resolved their liability in settlements with EPA.[19] It may also open or reopen a path for natural resource damage claims, given the propensity of forever chemicals to migrate and impact groundwater and surface water.

Moreover, state governments may come to play a significant role in enforcement. Almost every state has a statutory equivalent to CERCLA under state law, which typically incorporate as hazardous substances all federally recognized hazardous substances.[20] Cleanups and cost-recovery claims driven by PFOS and PFOA may therefore be as likely to be initiated under state law as under federal law. Some states go even further than the federal government. In Washington, all PFAS, not just PFOS and PFOA, are considered hazardous substances under the state’s Model Toxics Control Act.[21] Oregon designated not only PFOS and PFOA as hazardous substances, but also PFHxS, PFNA, HFPO-DA, and PFBS.[22] In states like these, potential remediation liability may be even more far-ranging.

A continuing question is how EPA and state regulators will address PFAS contamination associated with passive receivers. As the D.C. Circuit recognized, CERCLA does not contain any express exemption for passive receivers like those in the waste management sector or recycle materials industry, even if certain provisions of CERCLA might otherwise limit their liability.[23] During the Biden Administration, then EPA Assistant Administrator (and now Marten Law partner) David M. Uhlmann issued a PFAS Enforcement Discretion and Settlement Policy Under CERCLA that states that the agency does not intend to enforce against, and may use its settlement authority to protect, “community water systems and publicly owned treatment works, municipal separate storm sewer systems, publicly owned/operated municipal solid waste landfills, publicly owned airports and local fire departments, and farms where biosolids are applied to the land.”[24] The policy has remained in effect through the change in administrations. Administrator Zeldin has further committed EPA to “do what [it] can based on [] existing authority” but called on Congress to amend CERCLA to protect passive receivers. Bipartisan bills to that effect have failed so far, however.[25]

Conclusion

To discuss the applicability of the rule designating PFOS and PFOA as hazardous substances to you, the litigation challenging the rule in the D.C. Circuit, or questions about PFAS liability under CERCLA or state law, please contact Victor Xu, David Uhlmann, Jeff Kray, Jessica Ferrell or Brad Marten.

[1] In re Aqueous Film-Forming Foams Products Liability Litigation, No. 2:18-mn-02873 (D.S.C.).

[2] See, e.g., Weirton Area Water Bd. v. Heritage Thermal Servs., Inc., No. 5:25-cv-00126 (N.D. W. Va.); S. Adams Cnty. Water & Sanitation Dist. v. City & Cnty. of Denver, No. 1:26-cv-00218-NRN (D. Colo.); Vill. Of Endicott v. IBM, No. 7:24-cv-09242 (S.D.N.Y.); DePaul v. Kimberly-Clark Corp., No. 3:24-CV-271 (KAD) (D. Conn.).

[3] Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances, 89 Fed. Reg. 39124, https://www.govinfo.gov/content/pkg/FR-2024-05-08/pdf/2024-08547.pdf.

[4] 42 U.S.C. § 9602(a). Before the PFOS and PFOA designations, other substances had become new CERCLA hazardous substances solely via identification as “hazardous” or “toxic” under the Clean Water Act, Clean Air Act, Safe Drinking Water Act, and Toxic Substances Control Act. 42 U.S.C. § 9601(14) (defining the term “hazardous substance” to include substances designated as hazardous or toxic under other federal environmental laws). 

[5] 42 U.S.C. § 9607(a).

[6] Petition for Review, U.S. Env’t Prot. Agency, U.S Chamber of Com. v. EPA, No 24-1193 (DC Cir. June 10, 2024), No. 2059398.

[7] Petitioner’s Opening Brief, U.S. Env’t Prot. Agency, U.S Chamber of Com. v. EPA, No 24-1193 (DC Cir. Nov. 4, 2024).

[8] Petitioner’s Opening Brief at 51–71, U.S. Env’t Prot. Agency, U.S Chamber of Com. v. EPA, No 24-1193 (DC Cir. Nov. 4, 2024).

[9] Motion to Hold Case in Abeyance, U.S. Env’t Prot. Agency, U.S Chamber of Com. v. EPA, No 24-1193 (DC Cir. Feb. 11, 2025), Doc. No. 2100170.

[10] Hiroko Tabuchi, An Industry Insider’s Changes at the EPA Could Cost Taxpayers Billions, NY Times (Aug. 28, 2025), https://www.nytimes.com/2025/08/28/climate/steven-cook-epa-pfas-forever-chemicals.html.

[11] Motion to Govern, U.S. Env’t Prot. Agency, U.S Chamber of Com. v. EPA, No 24-1193 (D.C. Cir. Sept. 17, 2025), No. 2135418.

[12] U.S. Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir. Aug. 18, 2026) (slip op.). 

[13] Id. at 13–22.

[14] 42 U.S.C. § 9602(a) (emphasis added).

[15] U.S. Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir. Aug. 18, 2026) (slip op. at 23–45).

[16] EPA, Regulatory Impact Analysis (Ria) of the Final Rulemaking to Designate Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances 8 (2024).

[17] U.S. Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir. Aug. 18, 2026) (slip op. at 45–53).

[18] Id. at 51.

[19] Jessica Ferrell, Jeff Kray & Shannon Nelson, EPA Backs PFAS Hazardous Substance Designation Under CERCLA, Marten Law (Sep. 29, 2025), https://martenlaw.com/news/epa-backs-pfas-hazardous-substance-designation-under-cercla.

[20] See, e.g., RCW 70A.305.010–70A.305.900; ORS 465.200–465.545; Cal. Health & Safety Code §§ 25300–25395.15; N.J. Stat. Ann. § 58:10-23.11; Tex. Health & Safety Code ch. 361.

[21] Washington State Department of Ecology, PFAS at Cleanup Sites, https://ecology.wa.gov/waste-toxics/reducing-toxic-chemicals/reducing-toxic-chemicals-washington/pfas/regulating-pfas-cleanup.

[22] ORS 340-122-0115(3)(e).

[23] U.S. Chamber of Commerce v. EPA, No. 24-1193 (D.C. Cir. Aug. 18, 2026) (slip op. at 40–41).

[24] David M. Uhlmann, Env’t Prot. Agency, PFAS Enforcement Discretion and Settlement Policy under CERCLA 2 (Apr. 19, 2024), https://www.epa.gov/system/files/documents/2024-04/pfas-enforcement-discretion-settlement-policy-cercla.pdf. 

[25] Water Systems PFAS Liability Protection Act, H.R. 1267, 119th Cong. (2025); Agriculture PFAS Liability Protection Act of 2023, S. 1427, 118th Cong. (2023), https://www.congress.gov/bill/118th-congress/senate-bill/1427?s=1&r=67; Resource Management PFAS Liability Protection Act of 2023, S. 1429, 118th Cong. (2023), https://www.congress.gov/bill/118th-congress/senate-bill/1429?s=1&r=84; Water Systems PFAS Liability Protection Act, S. 1430, 118th Cong. (2023), https://www.congress.gov/bill/118th-congress/senate-bill/1430/text?s=1&r=12S; Fire Suppression PFAS Liability Protection Act, S. 1432, 118th Cong. (2023),  https://www.congress.gov/bill/118th-congress/senate-bill/1432?s=1&r=95; Airports PFAS Liability Protection Act, S.1433, 118th Cong. (2023),  https://www.congress.gov/bill/118th-congress/senate-bill/1433?s=1&r=56.