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Tackling PFAS With Superfund Law Risks Shifting Costs to Public

Nov. 30, 2022, 10:30 AM

The EPA’s plan to speed Superfund cleanups of two “forever chemicals” to make polluters rather than taxpayers foot the bill raises concerns that the law’s limited flexibility will shift the burden of costs back to communities, attorneys and groups representing public services say.

The Comprehensive Environmental Response, Compensation, and Liability Act can force companies that have dumped the chemicals on land or in water to pay to remediate the sites, said Amanda E. Aspatore, general counsel for the National Association of Clean Water Agencies representing publicly owned wastewater treatment facilities.

But CERCLA’s sweeping liability provisions, few exemptions, and opportunities for one potentially responsible party to sue others in an attempt to share cleanup costs means “companies who didn’t cause problems” can be impacted, Aspatore said.

EPA’s regulation “would put every [water] utility in the country at risk of liability” for the two per- and polyfluoroalkyl substances (PFAS) substances discharged to the plant from upstream industries, landfills, and even toilets, she said.

The Environmental Protection Agency in September proposed to designate perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)—used for decades in thousands of products—as hazardous substances.

The chemicals don’t break down naturally. They’re also in the bodies of most US residents, who shed the chemicals in sewage, which flows to treatment plants, Aspatore said. Cancer, heart problems, weakened immune systems, and other health issues are associated with the substances.

That could mean increased cleanup costs of sewage treatment, landfills, and other municipal services, leaving taxpayers and ratepayers—rather than industries that created or profited from the products made with the chemicals—footing the bill, said Aspatore, echoing views of dozens of water utility groups, the US Conference of Mayors, and the National Association of Counties.

The EPA said it had other tools at its disposal. “Although EPA does not have authority to exempt particular entities from liability, the agency is considering ways to address these types of concerns with various enforcement tools based on equitable considerations,” it said in a statement.

The agency “may also use enforcement tools to minimize financial burdens on such parties, such as by entering into settlement agreements that provide contribution protection from claims by other responsible parties.”

Broad Liability

Municipalities and treatment agencies fear wrapping the chemicals into CERCLA’s broad liability provisions will raise costs and trigger endless court battles to divide the cleanup bill or argue that it doesn’t apply to the facility being sued.

Another challenge is the pervasive use of the materials for decades before impacts were well understood.

The Superfund law stemmed from one of the nation’s worst environmental disasters.

Hooker Chemical Co. dumped 22,000 tons of hazardous waste into New York’s Love Canal beginning in the 1940s, and homes and a school were built on top of the chemicals. Waste oozed onto the ground, choking residents with fumes, causing birth defects, and forcing families to relocate, an EPA memoir recalls. A clause in the property sale contract meant Hooker wasn’t liable.

CERCLA’s passage was essentially the nation saying never again, by making escaping liability very difficult. A single polluter can be held liable for a site’s entire cleanup when blame can’t be apportioned, and a party can be held liable for actions it took even before the law’s enactment.

Significant Discretion?

Backers of the EPA’s proposal agree CERCLA didn’t provide the agency broad flexibility to exempt industry sectors.

But Melanie Benesh, the Environmental Working Group’s vice president of government affairs, says wastewater agencies, farm groups, and other critics overstate the degree to which the regulation could trigger runaway liability costs. EPA can wield enforcement discretion where appropriate, she said, to avoid unintended consequences.

EPA’s proposal repeatedly references its existing enforcement discretion, and adds that there are many steps along the way between designating something a hazardous substance and a site being added to the Superfund priority list for cleanup.

The Colorado, Georgia, Oklahoma, and Wyoming Farm Bureaus are among those arguing that EPA’s proposal could put farmers on the hook when they were unaware contaminants were spread on their land as fertilizer.

Enforcement discretion could be used, along with an existing CERCLA exemption, to address concerns from water utilities and farmers that EPA’s rule could create new liabilities for spreading biosolids—the end result of sewage treatment—as farm fertilizer. EPA should publicize CERCLA’s exemption for fertilizer applications, said the Environmental Protection Network, representing more than 550 former EPA staff.

But CERCLA’s fertilizer exemption has its limits, said EPN’s Elizabeth Southerland, a former science and technology office director for the EPA’s water office. The EPA should distinguish between wastewater agencies making efforts to mitigate environmental impacts and those turning a blind eye to the contents of such material or using farm applications to dump huge volumes of it, she said.

There’s also debate about whether the fertilizer exemption would apply under the rule if the biosolids contained PFOA or PFOS substances, said Alexandra Dapolito Dunn, who previously served as a top EPA regional and headquarters official.

The exemption would likely be challenged in court, because biosolids containing PFAS already have put some Maine farmers out of business, said Dunn, now a partner at Baker Botts LLP.

Another defense that manufacturers of PFOA and PFOS—or products made with them—might qualify for to avoid liability is called the “useful product” defense, Aspatore said.

In the 2009 Burlington Northern and Santa Fe Railway Co. v. U.S. case, the Supreme Court held that a company that makes, but doesn’t dispose of, a product isn’t liable for disposal. Use of that defense could increase the potential of wastewater treatment facilities and municipal waste sites to be held liable for wastes they manage, but didn’t create, she said.

The EPA in its statement added that it “is committed” to further engagement with affected groups and devoting “resources to address equity concerns related to PFOA and PFOS.”

‘Innocent Parties,’ Ratepayers

Some water and waste associations back the EPA’s proposal, including the Little Hocking Water Association, a non-profit water company in rural Southeast Ohio. Little Hocking became the epicenter of a PFOA contamination crisis 20 years ago after learning its well field was laden with PFOA. The crisis was the focus of the film “Dark Waters.”

But cleanup costs “should be borne by the generators, manufacturers, and ‘disposers’ who benefited and continue to benefit from the decades of illicit disposal,” Little Hocking wrote.

Otherwise ratepayers who are least able to pay might have to, said the City of Weatherford, Texas, in comments to the EPA. Nearly 10% of the city’s retail customer base is low income, it said.

Paths Forward

Consumers would likely bear much of the cleanup, litigation, and other costs that airports, water utilities, waste handlers, and others will be paying either directly or resulting from court disputes over liability, said Jeffrey Longsworth, a partner with Barnes & Thornburg LLP.

If the EPA and Congress understand those costs and recognize they’ll be paid by people already struggling with inflation, there will be pressure on the agency to drop this regulatory choice, said Longsworth, who counsels the PFAS Regulatory Coalition, representing industrial companies, municipal services, and other groups.

Longworth said there are other ways to address those concerns: Congress could step in to add new CERCLA exemptions or use its expedited authority under the Congressional Review Act to kill the final rule.

Another approach: a remedy akin to the 1997 National Settlement Proposal, he said.

Congress proposed that settlement after more than 40 states filed lawsuits against tobacco companies seeking to recover Medicare and other costs. Ultimately, the nation’s four largest tobacco companies agreed to a court-negotiated Master Settlement Agreement.

But few expect that a divided Congress can find common ground, and EPA has pledged to issue a final regulation next year.

The EPA also could combine regulatory authorities including CERCLA to target polluters and exempt public services “that we might, as a matter of public policy, desire to exclude,” said Dunn from Baker Botts.

Regulating the chemicals under particular provisions of the Resource Conservation and Recovery Act would automatically make them hazardous substances under CERCLA, yet give the agency the ability to exclude some wastes, she said. The EPA is working on a rule to designate PFOA, PFOS, and two other PFAS hazardous RCRA wastes, but that could take years, Dunn said.

To contact the reporters on this story: Dean Scott in Washington at dscott@bloombergindustry.com; Pat Rizzuto in Washington at prizzuto@bloombergindustry.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bloombergindustry.com; Renee Schoof at rschoof@bloombergindustry.com