D.C. Circuit Upholds EPA Designation of PFOA and PFOS Under CERCLA
The U.S. Court of Appeals for the D.C. Circuit has upheld the Environmental Protection Agency's ("EPA") 2024 designation of perfluorooctanoic acid ("PFOA") and perfluorooctanesulfonic acid ("PFOS") as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA").
On August 18, 2026, the U.S. Court of Appeals for the D.C. Circuit (the "D.C. Circuit") denied petitions for review filed by industry groups challenging EPA's May 2024 designation of PFOA and PFOS—two broadly distributed per- and polyfluoroalkyl substances ("PFAS")—as hazardous substances under CERCLA. The May 2024 designation—the first time EPA made a designation under CERCLA section 102(a)—permits CERCLA claims against parties deemed potentially responsible for contamination involving PFOA or PFOS.
The D.C. Circuit rejected the petitioners' argument that the PFAS were improperly designated as hazardous substances under CERCLA section 102(a). It noted that the phrase "may present substantial danger" in section 102(a) requires EPA to find that a scientifically possible risk exists, but there need not be an absolute certainty of such danger. To limit the extent of EPA's power to label substances as "hazardous," the D.C. Circuit interpreted the "substantial danger" requirement as having "real bite" (i.e., the risk must be "serious and real, not hypothesized").
Without deciding whether EPA had to perform a cost-benefit analysis, the D.C. Circuit upheld the analysis, finding the final Regulatory Impact Analysis was a logical outgrowth of the rulemaking process. Because it was not an arbitrary and capricious method of cost-benefit analysis, the D.C. Circuit sustained EPA's cost estimates and its treatment of shifting cleanup costs from taxpayers to responsible parties as an “advantage” consistent with CERCLA's objectives.
Finally, the D.C. Circuit held that EPA reasonably regulated PFOA and PFOS despite uncertainties regarding contamination locations, cleanup costs, and industry impacts. CERCLA response actions are discretionary, contingent, and site-specific. Multiple steps precede any cleanup obligation.
The designation remains in effect nationwide, increasing potential CERCLA exposure for companies that currently or historically manufactured, used, transported, disposed of, or handled PFOA or PFOS. Companies should assess their potential exposure to liability under CERCLA, as well as the risk of PFAS in ongoing operations and business and real estate transactions. While the ruling does not impose automatic cleanup liability, proactive compliance planning and environmental due diligence will be crucial for industries where PFOA and PFOS have been, or currently are, used.
