A Defining PFAS Decision: D.C. Circuit Leaves EPA’s CERCLA Designation Intact

Here’s What Happened

On August 18, 2026, the U.S. Court of Appeals for the D.C. Circuit denied all petitions challenging EPA’s 2024 rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as “hazardous substances” under CERCLA. Chamber of Commerce of the U.S. v. EPA, No. 24-1193 (D.C. Cir. Aug. 18, 2026).

The decision leaves EPA’s designation fully intact, preserving EPA’s authority to pursue CERCLA cleanup and cost-recovery actions involving PFOA and PFOS while allowing contribution litigation among potentially responsible parties (PRPs) to proceed.

EPA’s CERCLA Rule

CERCLA Section 102(a) authorizes EPA to designate substances that, when released, “may present substantial danger to the public health or welfare or the environment” as hazardous substances. In May 2024, EPA designated PFOA and PFOS under this authority, triggering reporting requirements and potential CERCLA liability for a wide range of entities.

Industry petitioners challenged the rule, arguing EPA misinterpreted the statute, failed to provide adequate notice, and acted arbitrarily in its analysis. The court rejected each challenge.

Key Takeaways from the Decision

• EPA’s Designation Stands: PFOA and PFOS remain CERCLA hazardous substances.
• EPA Prevails Under Loper Bright Analysis: Conducting its own statutory analysis, the court held that “may present substantial danger” requires only a possibility of harm, not certainty.
• Constitutional Challenges Rejected: The court found Section 102(a) provides sufficient standards and notice to regulated parties.
• Rulemaking Process Upheld: EPA’s final Regulatory Impact Analysis was a permissible outgrowth of the proposed rule.
• Future Liability Questions Do Not Invalidate the Rule: Uncertainty regarding cleanup costs or site-specific liability does not make the designation arbitrary or capricious.

What Clients Should Be Thinking About Now

The decision shifts the focus from whether EPA’s designation will survive judicial review to how it will affect enforcement, transactions, insurance, and allocation of cleanup costs.

Reassess Potential CERCLA Exposure

With a major challenge to EPA’s authority removed, companies should evaluate facilities, disposal sites, landfills, wastewater relationships, and historical operations involving PFOA or PFOS that could become subjects of investigations or cost-recovery claims.

Prepare for Increased Cost-Recovery and Contribution Litigation

The ruling preserves the mechanisms allowing governmental entities and private parties to recover PFAS-related cleanup costs. Manufacturers, site owners, transporters, waste handlers, and other entities connected to PFAS contamination should review historical records, disposal practices, and contractual responsibility allocations before claims arise.

Evaluate PFAS Risk in Transactions

Buyers, lenders, developers, and investors should expect heightened PFAS scrutiny during environmental due diligence. Environmental assessments, disclosures, indemnities, escrow arrangements, and valuation assumptions may require additional attention where PFOA or PFOS contamination is possible.

Review Insurance and Contractual Protections

Organizations should revisit insurance coverage, indemnification provisions, supply agreements, and other contracts to assess how confirmed hazardous-substance status may affect PFAS-related liabilities and recovery rights.

Passive Receivers Should Focus on Legislative and Regulatory Solutions

The court emphasized CERCLA’s liability defenses, exemptions, settlement mechanisms, and EPA enforcement discretion. As a result, landfills, wastewater treatment systems, recyclers, airports, municipalities, and other passive receivers may find policy and legislative advocacy more productive than further challenges to EPA’s designation authority.

Monitor EPA’s Next PFAS Actions

Although the case involved only PFOA and PFOS, the court validated EPA’s interpretation of CERCLA Section 102(a). Companies should closely monitor whether EPA pursues additional PFAS designations, enforcement initiatives, or policy updates.

What Companies Should Do Now

• Reassess Liability Exposure: Review current and historical operations involving PFOA or PFOS.
• Review Contracts and Insurance: Confirm existing protections adequately address PFAS-related liabilities.
• Develop Legislative and Regulatory Strategies: Particularly for passive receivers seeking liability protections.
• Monitor Further Appeals: Watch for rehearing requests or Supreme Court review.

Bottom Line

The D.C. Circuit’s decision is significant not only because it preserves EPA’s PFOA/PFOS CERCLA designation, but because it validates much of the legal framework supporting that designation. For companies facing PFAS-related CERCLA exposure, particularly passive receivers, the decision increases the importance of proactive risk management and engagement on legislative and administrative solutions.

Our team is available to help assess the implications of this decision, evaluate potential PFAS-related exposure, and develop strategies for engaging with Congress, EPA, and other policymakers.

Contact Clark Hill

If you have questions regarding the content of this alert, please contact one of the authors from our Clark Hill Public Strategies Team:

• Colleen Jarrott (cjarrott@clarkhill.com; 202.640.6668)
• Kristina Aleksanyan(kaleksanyan@clarkhill.com; 202.640.6641)

Click here to find these and other Clark Hill Public Strategies Attorneys and Advisors.

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