Top 10 Things You Should Know About PFAS: Real Estate and Corporate Due Diligence

Holland & Knight LLP
Meaghan A Colligan, Amy L. Edwards, Paul C Sarahan, Nicholas William Targ and Dianne R. Phillips

May 1, 2020

Per- and polyfluoroalkyl substances (PFAS) present a new and potentially expensive environmental risk in real estate and corporate deals. Regulators are focused on developing standards for PFAS across the country. However, it is still uncertain at the federal level, and in many states, how PFAS will be regulated and to what levels. New risk-based research continues to be released showing that certain strands may pose risks to health and the environment. Additionally, many large-scale lawsuits have been advanced in the past several years seeking damages for personal injury, property damage and recovery of remediation costs under federal environmental statutes. At least nine federal enforcement actions and dozens of state enforcement actions have been advanced related to PFAS to date. As such, PFAS poses a major risk in transactions that, if not managed, can result in significant liabilities.

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PFAS Is Officially Subject to The “Toxic Release Inventory” – and Affected Facilities Should Get Their Ducks in a Row

Crowell & Moring LLP
Peter Gray and Amy Symonds

February 13, 2020

The federal government is imposing one of the first environmental requirements for per- and polyfluoroalkyl substances (PFAS), and industry must plan accordingly.

Under an obscure provision of the National Defense Authorization Act for Fiscal Year 2020 (NDAA), Congress directed the U.S. Environmental Protection Agency (EPA) to list certain PFAS under Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA). Specifically, Section 7321 of the NDAA mandated that 14 specific PFAS plus any additional PFAS that meet certain criteria be listed as “toxic chemicals” that are subject to the annual Section 313 reporting requirement. EPCRA Section 313 (also referred to as the Toxic Release Inventory or TRI) imposes reporting obligations on facilities involved in industries identified by certain SIC codes (largely covering facilities in the manufacturing, mining, and power sectors). Specifically, if a covered facility manufactures, processes or otherwise uses a listed toxic chemical above an applicable threshold quantity, the facility must annually report to EPA environmental releases of and other waste management activities relating to that toxic chemical.

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Chemical Industry Regulatory Update – January 2020: PFAS Regulation and Sampling Continue to Heat Up

Thompson Hine LLP
Joel D. Eagle

January 9, 2020

An update to this publication was released on January 21, 2020.

It is a question we’ve heard so much recently: Are per- and polyfluoroalkyl substances (PFAS) really everywhere? The answer is certainly “yes” if measured by the flurry of recent federal and state “action plans” and proposed statutory and regulatory changes (including the proposed federal “PFAS Action Act of 2019” discussed below); Hollywood movies (“Dark Waters”); streaming documentaries (Netflix’s “The Devil We Know”); and a nearly constant flood of media coverage about PFAS. If the metric is the confirmed presence of PFAS in the environment through sampling, then the jury is still out. But extensive ongoing and planned nationwide groundwater and drinking water supply system sampling and investigations at known or suspected contaminated sites, will help answer whether PFAS are really everywhere.

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Trump Track: Revision of NEPA Regulations to Speed Environmental Review

Davis Wright Tremaine LLP
Gerald George

January 10, 2020

On January 8, 2020, the Trump Administration proposed streamlining the National Environmental Policy Act (NEPA) regulations for evaluation of the environmental impacts of major projects, in part by removing the existing requirement to consider “indirect,” “direct,” and “cumulative effects.” Instead, the proposal narrows the definition of “effects” to be evaluated to include only those that are “reasonably foreseeable” and having “a reasonably close causal relationship to the proposed action or alternatives.”

After publication in the Federal Register, the proposed regulations will be open for public comment for sixty days. Given the expected scale of response, publication of the final regulations is unlikely before fall 2020, and the new regulations will almost inevitably face court challenges arguing that the narrowing is inconsistent with the statute itself.

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Insurance Coverage May Pay for PFAS Related Environmental Investigations

Loeb & Loeb LL
Albert M. Cohen

January 17. 2020

Over the past few years, PFAS (per- and polyfluoroalkyl substances) have come under increased scrutiny by a variety of regulatory agencies.

In March 2019, the California State Water Board (Water Board) initiated a statewide effort to assess the scope of contamination by PFAS in water systems and groundwater. It issued nearly 14,000 investigatory orders to various entities, including public water systems within two miles of airports and one mile of landfills. The Water Board also issued orders to hundreds of chrome-plating operations throughout the state, requiring them to conduct investigations to determine the presence of PFAS.

California also enacted AB 756, which authorizes the State Water Pollution Control Board to order public water systems to monitor for PFAS and to take specified actions in the event certain identified levels of PFAS are detected. As a result, additional water systems and purveyors are likely to receive orders requiring them to investigate for PFAS.

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PFAS Update: EPA Progress Under PFAS Action Plan

Robinson & Cole LLP
Megan E. Baroni

December 5, 2019

Earlier this year, we wrote about EPA’s PFAS Action Plan, the agency’s blueprint for addressing contamination and protecting public health from per- and polyfluoroalkyl substances (PFAS). The PFAS Action Plan, released in February 2019, details a number of actions EPA plans to take with regard to PFAS, including time frames for implementation. EPA has been making some progress towards implementation, albeit not always on the timeline set forth in the Plan. Below are a few updates since February:

Toxics Release Inventory (TRI) Listing for Certain PFAS Compounds

Yesterday, EPA published notice that it is considering a rule to add PFAS compounds to the list of toxic chemicals subject to reporting under section 313 of the Emergency Planning and Community Right-to-Know Act. This listing would require certain industry sectors to annually report releases of these chemicals. The purpose of the TRI program is to provide the public with information, or, as EPA puts it, “A Right to Know, A Basis to Act.”

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PFAS Solution IN (or OUT) of the NDAA?

Greenberg Traurig LLP
Steven Barringer and Katie P. Reed

November 1, 2019

As legislative days dwindle, Congress is in a full sprint to pass the National Defense Authorization Act (NDAA) (related blog post), among several other must-pass bills. Controversial issues, such as border wall funding, military actions related to Iran, PFAS, among others, have bedeviled congressional negotiators since the Senate (S. 1790) and House (H.R. 2500) passed their bills in early summer. As Greenberg Traurig reported in July, H.R. 2500 would designate all PFAS (over 5,000 chemicals) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but S. 1790 does not include similar language.

Both bills contain a variety of provisions addressing PFAS pollution, and there is common ground on most of them between the House and Senate packages, and more generally, broad agreement among Republicans and Democrats that legislation is necessary to address PFAS. However, the CERCLA listing is where consensus breaks down.

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EPA Seeks Public Input on Adding PFAS to the Toxic Release Inventory

Troutman Sanders LLP
Angela Levin, Randy E. Brogdon and Viktoriia De Las Casas

September 30, 2019

EPA’s first major action under its February 2019 comprehensive Per- and Polyfluoroalkyl Substances (PFAS) Action Plan (previously discussed in detail here) is out. On September 25, EPA sent a request for public input on whether EPA should add “certain PFAS chemicals” to the Toxics Release Inventory (TRI) to the Office of Management and Budget (OMB). EPA issues advance notices of proposed rulemaking to get a sense of public reaction before it initiates an important regulatory change, typically before it has conducted significant research or expended agency resources.

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States Ratcheting Down on PFAS Compounds, Moving Ahead of Federal Government

Cozen O’Connor
Peter J. Fontaine, Marcia Mulkey

July 31, 2019

New Hampshire has just become the first state to finalize drinking water maximum contaminant levels (MCLs) for PFOS and PFOA, two of the best known and studied PFAS (per- and poly-fluoroalkyl substances), setting levels for those compounds at 15 ppt (parts per trillion) and 12 ppt respectively, effective October 1, 2019. New Hampshire also adopted MCLs for PFHxS at 18 ppt and PFNA at 11 ppt. These actions, which were expeditiously moved through the New Hampshire decision-making processes, now predate final action on New Jersey’s proposed MCLs of 13 ppt for PFOS and 14 ppt for PFOA. New Jersey also already has the first formal PFAS MCL, for PFNA at 14 ppt.

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Impact of PFAS on Private Equity: Preparing for the Coming Wave of Regulation and Litigation

Akerman LLP
Ellen S. Robbins and Matthew J. Schroeder

July 11, 2019

Regulation of Per and Poly-Fluoroalkyl Substances (PFAS) is increasing at the state and federal level as costly PFAS-related litigation is on the rise throughout the United States. Found in everyday products such as food packaging, stain, water and grease-resistant materials, and nonstick cookware, as well as being present on virtually all military bases and airports, the prevalence of PFAS combined with the heightened awareness of the public and the plaintiffs’ bar, make private equity funds and their portfolio companies prime targets for litigation and regulation.

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