Key Takeaways

  • The D.C. Circuit recently held that EPA may designate certain chemicals as “hazardous substances” when they “may present substantial danger,” a standard requiring only a “substantial risk” that is “scientifically possible.”
  • The D.C. Circuit’s decision affirms EPA’s designation of PFOA and PFOS as hazardous substances and forecloses challenges that EPA did not adequately consider its costs.
  • The decision may result in increased CERCLA and tort litigation for companies that made, processed, or used these PFAS compounds.

In April 2024, EPA designated perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). As previously discussed in Re:Torts, industry groups challenged the designation, arguing that EPA misread the phrase “may present substantial danger” as requiring only a “possibility” of harm. The groups also argued EPA gave inadequate notice of its cost-benefit methodology and acted arbitrarily and capriciously. On August 18, 2026, the D.C. Circuit denied those petitions and upheld EPA’s designation. Chamber of Com. of U.S. v. Env’t Prot. Agency, No. 24-1193 (D.C. Cir. Aug. 18, 2026).

In the court’s view, Petitioners did “not dispute that PFOA and PFOS qualify as substances that may pose a substantial risk to public health, welfare, and the environment if released” and focused instead on how much risk must be found to allow for the designation. That relieved the court from needing to define the “precise boundaries” of the statutory phrase “substantial danger.” Id. at 16 (cleaned up). But the court rejected the argument that “may present substantial danger” requires proof that harm “will” occur and instead held that “may” denotes contingency. Requiring certainty would “legislatively paralyze CERCLA.” Id. at 12–18. The court found “substantial danger” nonetheless has “real bite,” since the risk “must be both serious and real, not hypothesized.” Id. at 15–16. The court also rejected nondelegation and vagueness challenges, holding the public health-based standard supplied an adequate “intelligible principle.” Id. at 20–22.

The panel was not persuaded by Petitioners’ additional cost-based arguments. According to the court, EPA’s Regulatory Impact Analysis was a “logical outgrowth” of its earlier Economic Assessment, even though it added detail supplied in response to the Chamber of Commerce’s comments. Id. at 23–29. The court held EPA acted within “a broad zone of reasonable estimation” when EPA rejected the Chamber’s competing cost model as based on “discussions with industry rather than empirical data” and “30-year-old data.” Id. at 35–36. The panel stressed that CERCLA liability remains contingent on further regulatory steps and defenses, so EPA’s designation alone does not create liability. Id. at 51–53.

Absent further appeal, the decision removes additional uncertainty about the durability of the EPA designation for PFOA and PFOS. Businesses should build PFOA/PFOS-related review into transactional due diligence, revisit insurance coverage for exclusions, and expect mass tort plaintiffs to invoke EPA’s designation in causation arguments notwithstanding the panel’s emphasis that the designation alone does not create liability. Companies should also watch for EPA’s potential designation of additional PFAS compounds, likely subject to similar review.