Federal Appeals Court Upholds EPA Rule Designating Certain PFAS Chemicals as Hazardous Substances
On August 18, 2026, the United States Court of Appeals for the District of Columbia Circuit unanimously denied a multi-industry challenge to a U.S. Environmental Protection Agency ("EPA") rule designating perfluorooctanoic acid ("PFOA") and perfluorooctanesulfonic acid ("PFOS") — two of the most widely studied "forever chemicals" — as "hazardous substances" under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA" or "Superfund"). Chamber of Commerce of the U.S. v. EPA, No. 24-1193 (D.C. Cir. Aug. 18, 2026). The decision leaves EPA's designation fully in place and confirms that Superfund's strict liability cleanup and cost recovery regime now applies to these two chemicals.
CERCLA Section 102(a) authorizes EPA to designate as a "hazardous substance" any element, compound, mixture, solution, or substance that, when released into the environment, "may present substantial danger to the public health or welfare or the environment." In May 2024, EPA finalized a rule designating PFOA and PFOS as hazardous substances under this authority — the first time EPA had used its discretionary Section 102 authority to add chemicals to the Superfund program (the “Rule”). The Rule took effect in July 2024. Although the Rule originated under the Biden administration, the Trump administration's EPA elected to defend it on appeal.
Seven industry trade groups — led by the U.S. Chamber of Commerce and joined by, among others, the American Chemistry Council and the National Waste & Recycling Association — petitioned for review. Their consolidated petitions argued that EPA (1) misinterpreted the "may present substantial danger" standard in Section 102(a); (2) failed to give adequate notice under the Administrative Procedure Act of the cost-benefit analysis underlying the Rule; and (3) acted arbitrarily and capriciously by regulating despite acknowledged uncertainties about future cleanup costs and liability exposure.
The court rejected each of these challenges. In interpreting Section 102(a), the court held that the word "may" refers to the possibility of substantial danger rather than a requirement that EPA prove substantial danger will certainly result from a release. The court cautioned, however, that "substantial danger" is not a nullity: the risk must be "serious and real, not hypothesized." It also rejected related nondelegation and void-for-vagueness arguments, finding that Section 102(a) supplies an intelligible, science-based standard that gives regulated parties a reasonable opportunity to predict whether a substance may be designated hazardous.
On the notice challenge, the court held that EPA's final Regulatory Impact Analysis was a "logical outgrowth" of its earlier Economic Assessment and the proposed rule, particularly because EPA had expressly solicited comment on whether to conduct a quantitative cost-benefit analysis and petitioners themselves had urged EPA to do so. On the arbitrary-and-capricious challenge, the court upheld EPA's cost-benefit analysis across multiple sub-arguments concerning cleanup cost estimates at National Priorities List and non-NPL sites, federal facilities, industry-specific impacts, benefit calculations, and treatment of small businesses. The court further held that EPA reasonably proceeded with the designation despite acknowledged uncertainties, emphasizing that CERCLA response actions are "discretionary, contingent, and site-specific determinations" and that the designation itself does not determine whether cleanup will be required at any particular site or whether any particular party will face liability.
Hodgson Russ Takeaways
The decision confirms that CERCLA's full liability regime now applies to PFOA and PFOS. The designation shifts these chemicals from "pollutants or contaminants," for which cleanup costs generally fall on public funds, to "hazardous substances," for which EPA can compel potentially responsible parties ("PRPs") to investigate and remediate contamination or perform the cleanup itself and recover costs afterward. Entities that manufactured, used, transported, stored, or disposed of PFOA or PFOS — including as an unintentional byproduct or trace contaminant — may face cost recovery actions under CERCLA Sections 107 and 113, unilateral abatement orders under Section 106, and contribution claims from other PRPs, including at legacy sites where PFAS contamination was not previously a driver of liability. Because CERCLA imposes strict liability, this exposure can arise without any showing of fault or negligence.
Liability, however, is not immediate, and the process affords meaningful opportunities to engage. The court cataloged the multi-step regulatory process that must occur before cleanup liability attaches at any given site — Hazard Ranking System scoring, NPL listing through notice-and-comment rulemaking, site investigation, feasibility studies, and cost-effectiveness analysis — as well as CERCLA's statutory defenses, including the acts of God and third-party defenses, de minimis and de micromis protections, and the innocent landowner defense. Entities with potential exposure should consider engaging at each of these procedural stages, including through comments on NPL listing proposals, participation in feasibility studies, and expedited de minimis settlements, rather than waiting for an enforcement action to mature.
The treatment of so-called "passive receivers" — landfills, wastewater treatment plants, and other entities that received PFOA/PFOS-containing waste without generating or manufacturing the chemicals themselves — remains a live policy issue. EPA has signaled that it intends to pursue enforcement discretion policies for these parties (2024 PFAS Enforcement Discretion and Settlement Policy Under CERCLA) and has called on Congress to legislate targeted liability relief, but no such relief exists today. The U.S. Chamber of Commerce has indicated it is reviewing the decision and considering next steps, which could include a petition for rehearing en banc or a petition for certiorari to the U.S. Supreme Court. We will continue to monitor developments and will update this alert as warranted.
Finally, for transactional and real estate practices, the decision reinforces that PFOA/PFOS exposure history should be treated as a standard diligence item going forward, on par with other CERCLA hazardous substances, in property acquisitions, financings, and brownfield redevelopment projects. Innocent landowner, bona fide prospective purchaser, and contiguous property owner defenses under CERCLA remain available in appropriate circumstances, but their availability depends on the diligence conducted before acquisition, underscoring the importance of updating Phase I protocols to specifically address PFAS where site history suggests possible use or disposal.
Related EPA Drinking Water Developments
This decision arrives alongside a separate, parallel track of EPA activity addressing PFOA and PFOS under the Safe Drinking Water Act ("SDWA"), which is worth reading together with the CERCLA ruling. On May 18, 2026, EPA proposed two related rules. The first would maintain the existing 4.0 parts per trillion ("ppt") Maximum Contaminant Levels ("MCLs") for PFOA and PFOS — EPA is not proposing to raise or otherwise weaken the numeric PFOA/PFOS drinking water standard — but would allow eligible public water systems to seek a two-year extension of the compliance deadline, from April 2029 to April 2031, along with interim monitoring and exposure-mitigation obligations for systems reporting results at or above 12 ppt. The second proposed rule would rescind, on procedural grounds under the SDWA, the separate MCLs and regulatory determinations finalized in 2024 for three other PFAS — PFHxS, PFNA, and HFPO-DA ("GenX") — and the Hazard Index standard covering mixtures of those three PFAS plus PFBS. Both proposals were subject to a public comment period that closed July 20, 2026, following a July 7, 2026, public hearing, and remain pending as of this writing.
Read together, the CERCLA decision and these SDWA proposals reflect two different, and in some respects opposing, currents in current PFAS regulation. The D.C. Circuit's ruling upholds the universe of parties who can be held liable for PFOA/PFOS contamination and the range of tools EPA and other parties can use to compel and fund cleanup under CERCLA. By contrast, EPA's SDWA proposals, while preserving the enforceable 4 ppt drinking water limit for PFOA and PFOS, provide water systems more time and flexibility to reach compliance, even as EPA moves to rescind the analogous standards for four other PFAS compounds on statutory-process grounds. For water utilities, this means the CERCLA cost recovery and cleanup exposure recognized in the D.C. Circuit's decision is not softened by the SDWA proposals with respect to PFOA and PFOS specifically, though utilities may gain additional compliance time if the extension rule is finalized as proposed. For manufacturers, waste handlers, and other potentially responsible parties, the practical takeaway is that CERCLA hazardous substance liability for PFOA and PFOS is now settled law in this circuit, regardless of how the SDWA rulemakings are ultimately resolved, and entities should not assume that EPA's more incremental approach to drinking water regulation signals any broader retreat from PFOA/PFOS enforcement under CERCLA.
The Hodgson Russ Environment & Energy team advises manufacturers, waste and water utility operators, property owners, and other clients on PFAS regulatory compliance, CERCLA liability, remediation strategy, and related transactional due diligence. If you have questions about how this decision, EPA's pending drinking water rulemakings, or PFAS regulation more generally may affect your operations or projects, please contact Thomas Berkman, Jeff Stravino, Daniel Spitzer, or any other member of our Environment & Energy Practice.
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