This week, AGC of America, in collaboration with the U.S. Chamber of Commerce and the National Waste Recycling Association, filed a lawsuit against the U.S. Environmental Protection Agency (EPA) challenging the agency’s new final rule that designates two widely used per- and polyfluoroalkyl substances (PFAS) as hazardous substances under the Superfund law (also known as Comprehensive Environmental Response, Compensation, and Liability Act (or CERCLA). This rule imposes significant financial and legal burdens on contractors and could lead to costly litigation and stricter waste disposal practices.
AGC supports a measured and science-based approach to cleaning up PFAS contamination, emphasizing that contractors will be on the front lines of cleanup efforts. However, AGC has serious concerns about the EPA’s decision to use a novel CERCLA hazardous-substance designation for this purpose – exposing contractors to significant risk and liability across their project portfolios. Contractors who have disposed of, transported, or handled materials with PFOA or PFOS may be liable for the cost of cleaning up PFAS-contaminated sites. This could result in prolonged and costly litigation. Many states include CERCLA hazardous substances under their cleanup statutes, meaning they can also require remediation of PFOA and PFOS under state law.
Moreover, AGC members report that municipal and industrial waste landfills are restricting or rejecting waste containing any amount of PFAS. This leaves hazardous waste disposal facilities as the only disposal option, which is the most expensive disposal method. The PFAS designation also requires the U.S. Department of Transportation to designate PFOA and PFOS as hazardous materials for purposes of transport under the Hazardous Materials Transportation Act, further increasing disposal costs. In addition, EPA’s final rule necessitates PFAS consideration in Phase I environmental due diligence assessments. This will likely trigger Phase II soil and groundwater testing under various circumstances, impacting contractors who seek to purchase property or manage their contractual risk for unknown hazardous waste.
In November 2022, AGC submitted comments highlighting liability concerns for contractors who may have encountered PFAS on jobsites during dewatering or earthmoving activities. Additionally, AGC sent a letter to the U.S. Senate Committee on Environment and Public Works outlining the rule's widespread implications for the construction industry.
Although the EPA released a new enforcement discretion policy focusing on parties significantly causing PFAS releases, this policy can be changed at any time. It does not protect against suits brought by other potentially responsible parties initiating cost recovery or contribution actions under CERCLA. Through this legal action, AGC is committed to protecting the construction industry from unfair and unlawful regulatory burdens and ensuring that new rules are implemented fairly and transparently.
AGC’s involvement in this case was made possible thanks to your contributions to the Construction Advocacy Fund. Keep up with the latest AGC Judicial Advocacy News. For additional information, contact AGC’s Leah Pilconis at leah.pilconis@agc.org.