EPA’s Office of Enforcement and Compliance Assurance Announces That It Will Focus CERCLA Enforcement Efforts on Manufacturers

The U.S. Environmental Protection Agency’s enforcement arm intends to focus the Agency’s remediation and cost-recovery efforts under the federal Superfund law on manufacturers of poly- and perfluoroalkyl substances (PFAS) and other companies that use PFAS in production processes, according to an August 17th memorandum issued by David Uhlmann, the newly-confirmed Assistant Administrator of the Agency’s Office of Enforcement and Compliance Assurance (OECA). At the same time, the memo states that OECA will exercise its enforcement discretion to steer away from entities like drinking water providers, airports, fire departments, and farmers in actions brought under the Superfund law, also known as the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The PFAS-related enforcement goals were among six priorities set forth in the memo comprising the Agency’s National Enforcement and Compliance Initiatives (NECIs) for FY2024-2027. Other areas targeted for priority action included in the memo include compliance with climate change regulatory requirements, enforcement of coal combustion residual requirements under federal law, investigation of hazardous air pollutants emitted in overburdened communities, and compliance with state and federal drinking water standards.

The key goals of the PFAS NECI are to achieve site characterization, control ongoing releases that pose a threat to human health and the environment, ensure compliance with permits and other agreements…and address endangerment issues as they arise.” To accomplish these goals, OECA must put additional energy into ensuring compliance with existing state regulations and enforcing any federal law, including the proposed designation of PFOS and PFOA as hazardous substances under CERCLA. If and when PFOS and PFOA are so designated, OECA will have authority under CERCLA to identify and characterize the extent of PFAS contamination near PFAS manufacturing and use facilities. OECA will also be charged with performing oversight, characterization, and cleanup activities aimed at addressing PFAS contamination at and from federal facilities, as well as ensuring compliance with all environmental obligations under federal law.

Aiming to reduce and minimize human exposure to PFAS, the memo directs OECA to employ CERCLA’s liability-imposing provisions to chiefly pursue parties who significantly contribute to the release of PFAS, including major manufacturers and users of manufactured PFAS, federal facilities that are significant sources of PFAS, and other industrial parties.” Simultaneously, OECA offers reassurance that it has no intention of pursuing entities where equitable factors do not support CERCLA responsibility, such as farmers, water utilities, airports, or local fire departments.” While EPA has long used its enforcement discretion to steer CERCLA enforcement away from certain parties based on equitable considerations (e.g., its 5/24/95 Final Policy Toward Owners of Property Containing Contaminated Aquifers), some water suppliers and downstream industrial users reacted to the NECIs memo by noting that the Agency’s reliance on enforcement discretion alone, rather than a bright-line rule exempting such parties from liability, will not protect them from incurring significant costs under CERCLA in all cases.

Entities that represent certain water utilities, for example, have complained that the NECIs memo will not protect them from third-party claims by dischargers suing them for contribution in CERCLA actions. Likewise, industrial actors who did not know of the dangers of PFAS at the time of their use contend they should not be targeted for CERCLA liability due to PFAS-containing products that may have contributed to contamination at a Superfund site. While courts have recognized limits to the imposition of CERCLA liability for product manufacturers whose introduction of products into commerce lack an intent to arrange for” dispose of hazardous substances in the sense of Section 107(a)(3) of CERCLA, courts differ as to where in the distributive chain the liability cut-off kicks in, giving rise to case-by-case determinations where circumstances allow. And as seen in the case of asbestos claims, as the primary manufacturers of PFAS increasingly may be forced into bankruptcy (as already has occurred with Kiddie-Fenwal, Inc., which filed for Chapter 11 protection in May 2023) due to a rising tide of PFAS claims, claimants will no doubt increasingly to look to manufacturing entities more on the periphery to make up the balance.

In any event, OECA’s stated intention to use its enforcement discretion with respect to downstream users and water suppliers affected by PFAS is welcome news for those entities. Even while it may leave the ultimate scope of liability for contribution actions and direct liability for some product manufacturers an open question, the OECA policy at least appears fairly aimed at focusing the Agency’s scarce enforcement resources where it counts the most. Stay tuned, as more developments in this arena are sure to come.