What synthetic chemical family has the following in common?

• For more than 50 years, this chemical has been used in multiple applications, from firefighting foam, to Stainmaster carpet, Scotchguard fabric protection, Teflon coating on pans, dental floss, and the lining of microwave popcorn bags.


• This chemical is detectably present in the blood of 95 to 99 percent of humans.


• This chemical has been linked to conditions including high cholesterol, ulcerative colitis, thyroid disease, testicular and kidney cancers, and pregnancy-induced high blood pressure.


• The only federal standard for this chemical is a federal lifetime health advisory level of 70 nanograms per liter, or 70 parts per trillion – for context, 70 parts per trillion is the approximate equivalent of waiting thirty-two thousand years for one minute.


• This chemical has accounted for settlements by businesses with government agencies or plaintiffs of $670 million in West Virginia in 2017 and $850 million in Minnesota in 2018.


• This is a chemical for which the Wisconsin has not yet established NR 140 groundwater enforcement standards or preventative action levels, and may not, for another several years.

Either you already know, or you give up.

The five characteristics above are common to a family of chemicals known as Per- and Polyfluoroalkyl Substances, or PFAS.

The growing regulatory focus on PFAS, as “emerging contaminants” under the scrutiny of the U.S. Environmental Protection Agency (EPA) and state environmental agencies, poses new challenges for industries and owners or developers of properties currently or previously involved in the manufacture, distribution, or sale of PFAS or products containing PFAS.

This post provides a brief overview of what PFAS are, the recent and ongoing regulatory action related to PFAS, including a recent game-changing policy shift adopted by the Wisconsin Department of Natural Resources (WDNR) regarding the Wisconsin Voluntary Party Liability Exemption program, PFAS litigation developments, and due diligence concerns.

What Are PFAS and Why Are They Considered Harmful?

PFAS are a group of chemicals used in many industrial applications and consumer products, such as stain-proof or waterproof carpeting, clothing, leather treatment, upholstery, food paper wrappings, fire-fighting foams (commonly used at military bases, airports, fire stations, and refineries), car washing cleaners, and metal plating or cookware (such as Teflon).

Some research has suggested probable links between exposure to PFAS and diagnosed high cholesterol, ulcerative colitis, thyroid disease, testicular and kidney cancers, and pregnancy-induced high blood pressure. As a result, the family of PFAS chemicals have been classified by the EPA as an “emerging contaminant.”

PFAS are resistant to degradation, which means they do not break down in the environment. PFAS are also resistant to heat, water, and oil. They are water-soluble and bioaccumulative – meaning the amount builds up over time in the blood and organs. PFAS have been found at low levels both in the environment and in blood samples of nearly all of the general U.S. population.

The primary transport pathways for PFAS are groundwater migration and air deposition, and the primary exposure pathways for PFAS are through the ingestion of drinking water, fish-rich diets, and dust.

The EPA has set a lifetime health advisory (LTHA) level (below which no harm is expected) for two PFAS in drinking water:

• perfluorooctanoic acid (PFOA); and


• perfluorooctane sulfonate (PFOS).

The PFOA/PFOS LTHA level is 70 parts per trillion (ppt), equivalent to about three-and-a-half drops of water in an Olympic-sized swimming pool.

This unprecedentedly low threshold is a signal of the risk potential for this emerging contaminant, as well as the difficulty in confidently investigating and analyzing soil and groundwater samples for these substances, as well as in undertaking cost-effective remediation.

Based on EPA’s unregulated contaminant monitoring rule (UCMR) results, an estimated six million users of municipal water supplied by 66 large U.S. water providers were already receiving drinking water with PFAS concentrations above the 70 ppt LTHA.

Federal and State PFAS Regulatory Developments

Even though the EPA has established nonbinding drinking water health advisories for PFOA and PFOS at 70 ppt, there are currently no federal and few state numeric standards for cleaning up PFAS in soil and water.

The federal government has authority to regulate PFAS under the Safe Drinking Water Act, which requires water supply monitoring for two categories of PFAS, namely PFOS and PFOA; and the Toxic Substances Control Act, which sets manufacturing limits for PFAS.

Although there are signs that regulatory focus is increasing, earlier this year, after a hearing to consider development of a maximum contaminant level, or MCL, for PFAS, EPA decided to defer to the states for individual regulation of acceptable soil and groundwater tolerances for PFAS.

PFAS are not presently listed as a “hazardous substance” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). However, other provisions within CERCLA could potentially apply, especially those regarding “substantial danger” to public health or welfare or the environment, as well as those cross-referencing the broader definition of “hazardous wastes” under the Resource Conservation and Recovery Act.

Perhaps as a result of the increasing scientific and regulatory focus on the effects of PFAS, some states (such as Vermont, New Hampshire, Michigan, Alaska, and New Jersey) adopted standards stricter than the 70 ppt federal LTHA level. Some of these states established binding cleanup levels for PFOA and PFAS or finalized binding drinking water standards for certain PFAS chemicals.

Other states (such as California, New York, and Washington) adopted less strict standards, calling instead for warning labels on PFAS-containing products, restrictions on the sale and use of firefighting foam, and annual reporting for manufacturers.

PFAS in Wisconsin

In Wisconsin, the WDNR is communicating with the Wisconsin Department of Health Services to develop groundwater standards (Preventative Action Levels and Enforcement Standards) for PFAS. However, under 2011 Wis. Act 21 rulemaking standards, the timeframe for development of NR 140 numbers could be several years away.

In the interim, in a direct response to the growing impact of PFAS, WDNR has implemented a significant policy change in how it administers the Voluntary Party Liability Exemption, or VPLE (Wis. Stat. § 292.15).

In late October 2018, WDNR adopted the position that, unlike prior practice, it will no longer issue a VPLE “Certificate of Completion” or COC for all hazardous substance contamination that existed on the VPLE subject property as of the completion of the site investigation.

Up to this point, throughout the existence of the VPLE program, the State of Wisconsin had assumed responsibility for all contamination, known and unknown, on the a VPLE-completed property.

From this point forward, however, the COC will be effective only for the hazardous substances that were investigated and, as necessary, addressed. For most sites that are in the VPLE process, this means that PFAS will not be within the scope of the COC.

PFAS Litigation Developments

Following the EPA’s announcement of health advisory levels for PFOA and PFOS in 2016, improvements in water sampling technology, and public, political, and media attention have contributed to a surge in litigation against manufacturers of PFAS, as well as some secondary commercial users of PFAS.

Major class action and attorney-general lawsuits have been brought against PFAS manufacturers in Ohio, West Virginia, New York, North Carolina, Michigan, and Minnesota.

Most notably, in February 2018, 3M agreed to pay $850 million to the State of Minnesota in connection with contamination of drinking water, allegedly caused by its manufacture of the water repellent ScotchGard.

In February 2017, DuPont agreed to pay $670 million to settle over 3,000 personal injury lawsuits arising from its manufacture of a key ingredient in Teflon. And, recently, Chemours Co. committed to pay over $12 million, the largest penalty that a polluter has ever paid in North Carolina, related to a chemical known as “GenX” which was used as a nonstick application replacement for PFAS.

Municipalities have found themselves on both sides of the litigation: some have brought suit against PFAS and foam manufacturers, while others have been brought into litigation as the result of discharges from wastewater treatment plants, firefighting facilities, and landfills.

PFAS and Due Diligence

Due to the shifting regulatory landscape with differing state standards and emerging federal standards, there are numerous due diligence-related concerns that need to be addressed.

Some red flags for buyers acquiring operations are that the seller:

1) manufactured PFAS chemicals or firefighting foam;

2) supplied products containing PFAS to a third-party manufacturer;

3) processed, manufactured, or used oil or water resistant or repellant fabrics, furniture, carpets, leather goods, waxes, adhesives, or other products containing PFAS;

4) disposed of large volumes of consumer or industrial products containing PFAS;

5) created construction and demolition waste; or

6) maintained bio-solid or paper composting operations.

Some red flags for real estate transactions, including for municipalities and purchasers/developers of Brownfield properties are:

1) fire-training/suppression was conducted or a firefighting facility was on or near the property;

2) there was an industrial fire or major accident or near the property;

3) a manufacturer was/is located on or near the property or treated a product to make it water or oil resistant (or used products such as Scotchgard or similar materials in large volumes);

4) the property is located near a landfill, airport, or military base;

5) fill or composting material containing PFAS was used at the site; and<

6) there is known PFAS contamination on-site and located near municipal or private drinking water sources or surface water.

Takeaways

Because PFAS are:

• persistent (durable in the environment, even for decades after their release or disposal);


• pervasive (PFAS are mobile and have several potential exposure routes);


• come from a narrow but widely-used manufacturing base in the United States


• may have been included in products from overseas PFAS manufacturers and exporters; and


• are subject to different state sampling and cleanup standards;

clients and counsel should appreciate the need to consider PFAS during due diligence.

Increasing federal attention and state regulatory focus on PFAS have and will have the potential to impact the regulatory climate on PFAS compliance for years to come. The landscape in Wisconsin has already shifted with the WDNR’s change in its VPLE COC policy.

It is clear that parties who deal with PFAS and PFAS-related issues (especially with regard to municipalities, manufacturers, buyers acquiring operations, or real-estate transactions) will need to stay alert to changes in this area of the law.​​

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