D.C. Circuit Upholds PFAS Hazardous Substance Designation While Keeping CERCLA Risk in Focus

On August 18, 2026, the U.S. Court of Appeals for the D.C. Circuit rejected industry challenges to the designation by U.S. Environmental Protection Agency (EPA) of perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). The decision upholds the 2024 rule, preserving EPA’s authority to investigate releases, direct certain cleanups, and pursue recovery of response costs involving these two per- and polyfluoroalkyl substances (PFAS) compounds, often called “forever chemicals.”

Key takeaways:

• The PFOA and PFOS hazardous-substance designation remains in effect.
• EPA need not prove certain harm from every release.
• Detection alone does not establish a cleanup obligation or CERCLA liability.
• Organizations should account for potential PFOA and PFOS sources in release planning, operational practices, waste and transportation arrangements, site diligence, and contracts.

The ruling has broad implications across the environmental, health, and safety landscape, including for energy, agriculture, transportation, manufacturing, construction, real estate, and waste management. By sustaining the designation, the decision preserves CERCLA mechanisms that can shift qualifying cleanup costs from public funds to responsible parties. However, the ruling recognized that not every detection of PFOA or PFOS triggers an automatic cleanup or liability event.

Why the Court Upheld the Rule

The petitioners challenged the designation on three principal grounds: that EPA misinterpreted CERCLA’s “may present substantial danger” standard, failed to provide adequate notice of its cost-benefit analysis, and acted arbitrarily in addressing costs and regulatory uncertainty. The court rejected each challenge.

On the statutory question, the court held that “may” refers to the possibility of substantial danger, not certainty that harm will follow every release. The court emphasized, however, that the phrase “substantial danger” still requires a serious and real risk, rather than a merely hypothetical one. EPA supported its determination with research addressing the health effects, environmental persistence, and bioaccumulation of PFOA and PFOS.

Applying Loper Bright, the court independently interpreted CERCLA rather than deferring to EPA’s statutory interpretation. That analysis led the court to conclude that EPA’s reading was the best one supported by the statute’s text and context. A more deferential arbitrary-and-capricious standard governed the separate review of EPA’s scientific, technical, and economic judgments.

The court failed to find any defect in EPA’s rulemaking process. Although EPA’s final Regulatory Impact Analysis expanded on the Economic Assessment accompanying the proposed rule, the additions, including quantitative analysis developed in response to public comments, were a logical outgrowth of the proposal. In the court’s view, those changes reflected notice-and-comment rulemaking working as intended, not new critical information requiring another comment period.

What the Designation Does Now

Several direct regulatory consequences remain in place. Parties responsible for releases of more than one pound of PFOA or PFOS must report those releases to federal authorities and, in some circumstances, to local authorities and the public. Federal agencies selling contaminated property generally must provide notice of the presence of hazardous substances, while shipments weighing more than one pound are subject to federal identification and marking requirements.

More broadly, hazardous-substance status makes additional CERCLA authorities available for PFOA and PFOS. After further regulatory steps, EPA may direct responsible parties to perform cleanup work. The federal government, states, and affected private parties may also seek recovery of qualifying response costs. That cost-recovery authority is an important consequence of designation as a hazardous substance.

How Cleanup and Liability May Develop

The designation does not determine whether a particular site will require cleanup or who will bear the cost. CERCLA response actions remain discretionary and site-specific, potentially involving years of investigation, risk and cost analysis, and public participation before liability is determined.

Liability also requires more than detection. A party must fall within a category covered by CERCLA, and statutory defenses and protections may apply. Focus remains on identifying potential sources and release pathways, preserving historical records, evaluating reporting obligations, and allocating investigation and response costs in agreements.

Bipartisan concerns have been expressed about passive receivers of PFAS compounds — entities that own or operate infrastructure (e.g., water systems, landfills, airports). This decision may trigger more emphasis by Congress on creating liability exemptions for certain entities under CERCLA.