Unanimous Decision Upholds EPA Action Creating Superfund Liability for 2 Best-Known PFAS
Holland & Knight Alert
Matthew Z. Leopold | Dianne R. Phillips | Andy Emerson | Clarissa Howley Mills | Jeff Porter | Rafe Petersen | Evan Neustater
Highlights
- A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit unanimously denied petitions for review of the U.S. Environmental Protection Agency’s (EPA) designation of perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
- The court held that CERCLA’s “may present substantial danger” standard requires only a scientifically supported possibility of serious harm, not certainty that harm will result from every release.
- The court rejected arguments that EPA’s Regulatory Impact Analysis was arbitrary and capricious, finding that the agency reasonably estimated costs and properly accounted for CERCLA’s multistep enforcement framework.
- As a result, potentially responsible parties continue to face CERCLA liability for the release of PFOA and PFOS.
This Holland & Knight alert analyzes the U.S. Court of Appeals for the District of Columbia Circuit’s decision in Chamber of Commerce of the United States of America v. Environmental Protection Agency, No. 24-1193. On August 18, 2026, a three-judge panel comprising Judges Patricia Millett, Gregory Katsas and Neomi Rao denied petitions for review challenging the U.S. Environmental Protection Agency’s (EPA) designation of perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous substances under Section 102(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, commonly known as Superfund). (See Holland & Knight’s previous alert, “EPA Designates 2 PFAS Compounds as Hazardous Substances,” April 26, 2024.)
The decision resolves the legal challenge to EPA’s authority to bring PFOA and PFOS within CERCLA’s liability framework. Below is a summary of the case’s background, the court’s reasoning on each issue and practical implications for regulated entities.
Background
PFOA and PFOS are two compounds within the broader class of per- and polyfluoroalkyl substances (PFAS), a group of manmade chemicals used since the 1940s to create water- and oil-resistant products including cookware, rain-repellent clothing and firefighting foam.
CERCLA establishes a comprehensive framework for addressing releases of “hazardous substances” and “pollutants or contaminants,” and the statute regulates those categories differently, assigning varying legal consequences to each. CERCLA currently lists more than 800 hazardous substances. Section 102(a) authorizes EPA to designate additional hazardous substances, including substances that, when released into the environment, “may present substantial danger to the public health or welfare or the environment.” 42 U.S.C. § 9602(a).
The most significant result of the designation is that EPA can compel the cleanup of PFOA and PFOS releases and that federal and state governments and private parties can now bring actions to recover cleanup costs.
Seven industry groups petitioned the D.C. Circuit for review.
What the D.C. Circuit Held
The court addressed three principal challenges: 1) whether EPA misinterpreted the statutory standard for designating hazardous substances, 2) whether EPA provided adequate notice under the Administrative Procedure Act (APA), and 3) whether EPA’s cost-benefit analysis and decision to regulate under scientific uncertainty were arbitrary and capricious. The court rejected all three challenges.
Statutory Interpretation: The Meaning of “May Present Substantial Danger”
The central legal dispute concerned the statutory phrase “may present substantial danger” in 42 U.S.C. § 9602(a). Petitioners argued that “may” should be interpreted to require that harm “will” occur upon release, meaning that EPA must demonstrate certainty of danger before designating a substance. EPA interpreted “may” to mean “at a minimum, there is a possibility” that a released substance will present substantial danger.
The D.C. Circuit sided with EPA. Drawing on multiple dictionaries from the time of CERCLA’s enactment, the court found that the use of the word “may” primarily denotes the possibility of substantial harm, not certainty.
The court emphasized that “substantial danger” suggests that the risk must be “serious and real, not hypothesized.” The designation cited peer-reviewed studies supporting EPA’s view.
The court also rejected the petitioners’ argument that “hazardous substance” must be read more narrowly than “pollutant or contaminant.” Finally, the court rejected the nondelegation and void-for-vagueness challenges. It held that CERCLA’s “substantial danger” standard, informed by scientific evidence, satisfies the intelligible-principle requirement.
Adequacy of Notice Under the APA
Petitioners argued that EPA’s final Regulatory Impact Analysis (RIA) differed so significantly from the Economic Assessment accompanying the proposed rule that stakeholders lacked adequate notice of EPA’s ultimate methodology. Applying the APA’s “logical outgrowth” test, the court concluded that the RIA was a foreseeable development of the proposed rule.
Cost-Benefit Analysis and Scientific Uncertainty
The court also rejected a series of arbitrary-and-capricious challenges to EPA’s cost-benefit analysis. The court found that EPA reasonably estimated cleanup costs, addressed industry concerns and explained its assessment of the rule’s benefits in a manner consistent with CERCLA’s polluter-pays framework. More broadly, the court held that EPA adequately accounted for the uncertainty inherent in predicting future cleanup costs and liability exposure, recognizing that CERCLA response actions are highly fact-specific and depend on multiple future regulatory determinations. Because EPA acknowledged those uncertainties and reasonably explained its methodology, the court declined to disturb the agency’s analysis.
Implications and Key Takeaways
- CERCLA Liability at Existing Sites: Potentially responsible parties may be responsible for additional cleanup costs or face contribution claims and cost-recovery actions brought by federal and state governments or private parties.
- Reporting Obligations Are in Effect: Releases of more than 1 pound of PFOA or PFOS must be reported to the National Response Center within 24 hours. Shippers must identify and mark shipments exceeding this amount, and failure to comply exposes entities to penalties independent of any cleanup liability.
- Real Estate and Transactional Due Diligence Must Account for PFOA/PFOS: PFOA and PFOS must continue to be evaluated in environmental site assessments. Federal property transfers require disclosure of known contamination. Buyers, sellers and lenders should update their due diligence protocols accordingly.
- Ongoing Superfund and Remediation Sites Face Additional Complexity: Sites that are already undergoing cleanups may see PFOA and PFOS added as contaminants of concern, potentially expanding the scope and cost of remediation.
How Holland & Knight Can Help
Holland & Knight’s Environmental Team and its interdisciplinary Emerging Contaminants and PFAS Team regularly advise clients on CERCLA compliance, PFAS-related regulatory developments, Superfund site negotiations, environmental due diligence and environmental litigation.
For questions about how the recent D.C. Circuit decision may affect your organization, please contact the authors of this alert or any member of the Environmental Team.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.