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Background
On August 18, 2026, the U.S. Court of Appeals for the D.C. Circuit denied all petitions for review challenging a final rule promulgated by the U.S. Environmental Protection Agency (“EPA”) that designated Perfluorooctanoic Acid (“PFOA”) and Perfluorooctanesulfonic Acid (“PFOS”) as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) (“Designation Rule”).1 In Chamber of Commerce of the United States of America, et al. v. EPA, No. 24-1193, a unanimous D.C. Circuit panel rejected all grounds advanced by industry petitioners, and held that: (1) EPA’s interpretation of CERCLA’s requirements for designating “hazardous substances” was correct, (2) EPA provided adequate notice of its cost-benefit analysis, and (3) EPA’s cost-benefit analysis and decision to regulate despite uncertainty were reasonable.
The survival of the PFOA and PFOS hazardous substances designation will likely have wide-reaching ramifications given the widespread presence of these compounds in the environment and the potential for CERCLA claims at many cleanup sites, including those that might otherwise be nearing completion. As a result of the hazardous substances designation, EPA may compel CERCLA potentially responsible parties to abate and clean up releases of PFOA and PFOS, and the federal government, States, and adversely affected private parties may pursue actions to recover cleanup costs under CERCLA from potentially responsible parties. PFOA and PFOS are two of the most prevalent species of per- and polyfluoroalkyl substances (“PFAS”) found in the environment, and the D.C. Circuit’s decision upholding this first PFAS designation could lead to additional PFAS species being designated in the future. As a result, industry should continue to prepare for potential CERCLA liability arising from PFAS contamination. The D.C. Circuit’s decision is also a notable example of a court siding with an agency’s statutory interpretation in the aftermath of the Supreme Court’s decision to jettison “Chevron deference” in Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2266 (2024).
The D.C. Circuit’s holding
The D.C. Circuit’s holding denied the petitions for review on three primary grounds, each of which is summarized below.
EPA’s interpretation of the definition of “hazardous substances”
The D.C. Circuit applied the standard for review announced in Loper Bright to independently determine the “best” reading of CERCLA’s text by “applying all relevant interpretive tools.” CERCLA authorizes EPA to designate additional “hazardous substances,” which include substances that, when released into the environment “may present substantial danger to the public health or welfare or the environment[.]”2 Challengers to the Designation Rule unsuccessfully argued that, to avoid overinclusion and to comply with the nondelegation and void-for-vagueness doctrines, in interpreting the phrase “may present substantial danger,” EPA was required to find that substantial danger “will” occur upon releases of PFOA and PFOS.
The D.C. Circuit rejected this contention, holding that EPA had correctly interpreted the phrase “may present substantial danger” to require only a scientifically supported possibility of substantial harm upon release—not certainty that harm “will” occur. The D.C. Circuit relied heavily on the plain meaning of “may,” and emphasized that requiring absolute scientific certainty to designate hazardous substances “would have been to legislatively paralyze CERCLA.”3 The court concluded that the “plain language of CERCLA allows EPA to designate as hazardous substances chemicals like PFOA and PFOS” where, the court observed, peer-reviewed studies have reported links between PFOA and PFOS and adverse health effects.4
The D.C. Circuit also rejected challengers’ nondelegation and void-for-vagueness arguments, finding that CERCLA’s “may present substantial danger” standard provides an “intelligible principle” because it ties EPA’s discretion to scientific findings and a public health standard.
Adequacy of notice regarding EPA cost-benefit analysis
The D.C. Circuit rejected the argument that EPA violated public notice requirements by not disclosing its final Regulatory Impact Analysis (“RIA”) until publication of the final rule. Although the RIA was not published until the final rule, the notice of proposed rulemaking had incorporated an Economic Assessment containing a preliminary cost-benefit analysis and expressly requested comment on whether and how to conduct a more detailed quantitative analysis. The panel found that notice was sufficient because the RIA was a “logical outgrowth” of EPA’s prior Economic Assessment and the associated notice and comment process.5
Arbitrary and capricious claims
The D.C. Circuit rejected petitioners’ arguments that EPA’s cost-benefit analysis, as well as its decision to regulate in the face of uncertainty, were arbitrary and capricious. The D.C. Circuit found EPA’s cost calculations and rationales to be reasonable under the deferential arbitrary and capricious standard.
The D.C. Circuit also concluded that EPA’s designation of PFOA and PFOS despite uncertainties was a reasoned decision based on the record.6 Petitioners had argued that EPA could not regulate due to uncertainties about the location and amount of contamination, future costs, and unintended consequences of designation, including on real estate transactions.7 However, the D.C. Circuit agreed with EPA that uncertainties were inherent at the initial “hazardous substances” designation stage because CERCLA response actions are discretionary and contingent and found that EPA’s action to regulate in the face of these uncertainties was not arbitrary and capricious.8
Implications
The Designation Rule had several immediate and direct regulatory impacts, including that (1) responsible parties must report releases of more than one pound of PFOA or PFOS to appropriate authorities; (2) federal agencies selling land contaminated with PFOA and PFOS must generally provide notice of the presence of these substances; and (3) shippers must identify and mark shipments of PFOA and PFOS weighing more than one pound pursuant to the Hazardous Materials Transportation Act. However, the most significant consequence of the designation is the unlocking of CERCLA cost-recovery and enforcement mechanisms. EPA had previously considered PFOA and PFOS to be “pollutants or contaminants” under CERCLA, which allowed EPA to conduct cleanup actions using public funds, but did not allow for cost-recovery actions against potentially responsible parties subject to CERCLA liability. With the survival of the hazardous substances designation, EPA may compel CERCLA potentially responsible parties to abate and clean up releases of PFOA and PFOS, and the federal government, States, and adversely affected private parties may pursue actions to recover cleanup costs under CERCLA from potentially responsible parties. In addition, state laws that incorporate the CERCLA list of hazardous substances now also cover PFOA and PFOS. Moreover, as a result of the Designation Rule, all Phase I environmental site assessments must evaluate the potential for PFOA and PFOS releases under the ASTM standard and EPA’s All Appropriate Inquiries Rule, which establishes the standards and practices a property purchaser must follow when investigating a property’s environmental condition before acquisition in order to qualify for certain CERCLA liability protections.9
EPA has noted concerns that, as a result of the Designation Rule, CERCLA liability could attach to entities that did not manufacture or generate PFOA or PFOS, but rather passively received the chemicals—such as water utilities and municipal landfills.10 When it issued the Designation Rule, EPA adopted an enforcement discretion policy related to passive receivers,11 but this policy is not a complete solution because the policy does not preclude non-EPA entities (e.g., private parties and state and local governments) from pursuing cost-recovery and contribution actions. The Trump Administration has maintained the Biden Administration policy in effect, but has cautioned that “[b]ecause enforcement discretion alone cannot shield passive receivers from third-party cleanup lawsuits and can be reversed by a future administration, a durable statutory fix from Congress is necessary.”12 As a result, the Trump Administration has announced its intent to work with Congress, explaining that “EPA intends to do what we can based on our existing authority, but we will need new statutory language from Congress to fully address our concerns with passive receiver liability.”13
Another big-picture implication of the D.C. Circuit’s decision is the potential for further PFAS “hazardous substances” designations. The D.C. Circuit’s broad reading of “may present substantial danger” creates a potential legal pathway for EPA to designate additional PFAS compounds as hazardous substances. The D.C. Circuit’s approach to this case indicates that the court may provide EPA with considerable latitude, based on the agency’s characterization of scientific evidence of substantial risk, if it chooses to pursue further designations. EPA has announced its intention to initiate a rulemaking to establish a uniform framework governing future hazardous substance designations under CERCLA, including how the agency will consider the costs of the proposed designations. This framework rulemaking—if undertaken and finalized—may provide increased certainty and clarity as to how future designations would proceed.14
Footnotes
1 Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances, 89 Fed. Reg. 39,124 (May 8, 2024) (“Designation Rule”).
2 42 U.S.C. § 9602(a).
3 Chamber of Commerce of the United States of America, et al. v. EPA, No. 24-1193, slip op. at 12-15 (D.C. Cir. Aug. 18, 2026).
4 Id. at 12.
5 Id. at 23-25.
6 Id. at 53.
7 Id. at 45.
8 Id. at 46, 53.
9 40 C.F.R. Part 312.
11 PFAS Enforcement Discretion and Settlement Policy Under CERCLA.
14 Id.
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