Federal Court Upholds PFAS 'Hazardous' Label, Polluters Now on Hook for Cleanup Costs

A federal appeals court has upheld the Environmental Protection Agency's 2024 decision to label two widely used industrial chemicals as hazardous substances, rejecting a challenge from seven business groups that argued the rule would saddle companies with enormous and improperly calculated cleanup costs. The ruling means polluters, rather than taxpayers, will remain on the hook for contamination tied to PFOA and PFOS, two chemicals within the sprawling PFAS family found in products ranging from nonstick pans to stain-resistant fabrics and firefighting foams.

The U.S. Court of Appeals for the District of Columbia Circuit, in a case captioned Chamber of Commerce v. U.S. Environmental Protection Agency and tracked under docket number 24-1193, ruled that the EPA acted reasonably and within its authority when it designated PFOA and PFOS as hazardous substances under the Superfund program in 2024, according to Reuters. The three-judge panel rejected arguments brought by the U.S. Chamber of Commerce and groups representing the waste management and chemical industries, according to the same Reuters report by reporter Dietrich Knauth. PFOA and PFOS had previously been designated as pollutants or contaminants rather than hazardous substances, a distinction that mattered enormously for who pays.

Why the Legal Label Matters

Before the 2024 rulemaking, PFOA and PFOS cleanups under the previous designation would have been paid for by public funds, since pollutant or contaminant status only allowed federal cleanups to be funded through public Superfund dollars, according to Earthjustice. Reclassifying the chemicals as hazardous substances gives the federal government and private parties legal authority to recover cleanup costs directly from the companies responsible for the contamination. Circuit Judge Patricia Millett wrote that the designation shifts the burden to private parties that deposit hazardous substances rather than taxpayers, the court noted, and the panel further stated that passing costs onto polluters is a core purpose of the Superfund law itself.

Earthjustice, which intervened in the lawsuit to support the EPA's rule, celebrated the outcome. Jonathan Kalmuss-Katz of the organization said industrial polluters have profited from toxic PFAS releases while taxpayers and communities pay cleanup costs, and Earthjustice separately called the decision a major win for communities contaminated by PFAS pollution. PFAS chemicals do not easily break down in the human body or the environment, and the broader chemical family has been linked to cancer and other health concerns.

Industry's Cost Argument Fell Flat

The seven business groups that brought the challenge argued the EPA failed to properly consider the rule's enormous costs for businesses and that the regulation encourages expensive cleanup efforts while passing those costs to private companies. In court filings, petitioners went further, arguing that the EPA's regulatory impact analysis fundamentally miscalculated the rule's burden by ignoring major indirect economic consequences and underestimating remediation costs across multiple industries, according to Dechert LLP. The D.C. Circuit rejected those arguments outright, siding with the agency's underlying reasoning.

Waste industry petitioners raised a more specific worry: that landfills, composters, and recycling facilities act as passive receivers of PFAS-containing consumer products, exposing them to strict liability despite having no control over how the chemicals were manufactured in the first place, as reported by Waste Dive. The National Waste & Recycling Association was among the co-petitioners raising that concern. To address it, the EPA had already issued an enforcement discretion policy in April 2024 signaling it will prioritize enforcement against major PFAS manufacturers and industrial dischargers rather than municipal water utilities, public landfills, or airports, according to Liskow & Lewis. Even so, statutory joint and several liability under CERCLA remains a live concern for these so-called non-manufacturers, since the enforcement policy is discretionary rather than a legal shield.

A Winding Path Through the Courts

The case took a detour before reaching resolution. The D.C. Circuit placed the legal challenge in abeyance in early 2025 to allow administrative review following the presidential transition, before the EPA requested in September 2025 that the stay be lifted and confirmed it would fully defend the PFOA and PFOS designations, per Dechert LLP's account of the proceedings. The court granted that request and resumed briefing later that month.

EPA Administrator Lee Zeldin has signaled the agency's approach won't stop at defending this one rule. In September 2025, Zeldin announced that while the EPA would defend the PFOA and PFOS hazardous substance designations, it also planned to initiate a uniform Framework Rule to establish clear criteria and cost-consideration standards for future CERCLA designations, according to the American Bar Association. That signals openness to working with Congress on statutory protections for passive receivers, even as the agency stands firm on the PFOA and PFOS designations already in place.

What This Means for Property Owners and Public Health

The ruling carries practical consequences well beyond the courtroom. Commercial real estate transactions now require evaluating PFOA and PFOS under the ASTM E1527-21 standard during Phase I Environmental Site Assessments, so buyers and lenders can qualify for statutory landowner liability protections, according to Pedersen & Houpt. Under the broader EPA rule, entities that experience a release of PFOA or PFOS equal to or exceeding one pound within a 24-hour period must immediately report it to the National Response Center, state emergency commissions, and local emergency responders.

On the public health side, biomonitoring by the Centers for Disease Control and Prevention has found measurable levels of PFAS in the blood of more than 95% of Americans, though average blood concentrations of PFOA and PFOS dropped by more than 70% and 85% respectively between 1999 and 2019 following voluntary U.S. manufacturing phase-outs, according to the Agency for Toxic Substances and Disease Registry. The designation itself marked a legal first: it was the first time in CERCLA's history that the EPA used its standalone authority under Section 102(a) to designate a new hazardous substance rather than cross-listing a chemical already regulated under other federal environmental statutes, per the St. Louis Law Journal.

The ruling arrives as PFAS regulation continues to move on multiple fronts nationally, including EPA's rollback of some drinking water limits and ongoing municipal litigation such as Pepperell's lawsuit against paper industry polluters. With the hazardous substance designation now affirmed on appeal, the legal foundation for shifting cleanup costs from public budgets to industrial polluters appears considerably more secure than it did when the case first landed in court.