Regulatory Analysis

PFAS Superfund and the Municipal Passive-Receiver Gap: Liability Without Exemption

By Law Gaps Research — — 9 min read

EPA's 2024 designation of PFOA and PFOS as CERCLA hazardous substances means that any entity that released or arranged for disposal of these chemicals can face strict, joint and several Superfund liability. That includes municipalities, publicly owned treatment works (POTWs), airports, and fire departments that received PFAS-contaminated waste from industrial sources — as passive receivers, not generators. EPA has issued an enforcement discretion policy for these entities. But enforcement discretion is not a statutory exemption, and it can be withdrawn by any future administration without notice-and-comment rulemaking.

The gap here is the distance between legal liability and enforcement policy. Under 42 U.S.C. § 9607(a), CERCLA imposes liability on four categories of potentially responsible parties (PRPs): current owners and operators, past owners and operators at the time of disposal, persons who arranged for disposal or treatment of hazardous substances, and transporters who selected the disposal site. A municipality that operated a POTW faces potential liability under the owner/operator categories — § 9607(a)(1)–(2) — as a matter of strict liability. Arranger liability under § 9607(a)(3) is more fact-dependent: in Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (2009), the Supreme Court held that arranger liability requires proof that an entity took intentional steps to dispose of a hazardous substance. A POTW that passively received PFAS-contaminated industrial influent may contest arranger status on that basis, but the owner/operator exposure under § 9607(a)(1)–(2) may still apply, and the overall liability picture requires fact-specific analysis.

The CERCLA Designation: What Changed in 2024

EPA published the final rule designating PFOA and PFOS as CERCLA hazardous substances on May 8, 2024, with an effective date of July 8, 2024. The rule is codified at 40 CFR Part 302, Table 302.4, which lists designated hazardous substances and their reportable quantities. PFOA and PFOS each carry a reportable quantity of one pound under the final rule — meaning a release of one pound or more triggers the CERCLA notification obligations under Section 103, 42 U.S.C. § 9603.

What CERCLA liability means in practice

CERCLA liability is strict — no showing of negligence or intent is required. It is also joint and several, meaning any one PRP can be held responsible for the full cost of cleanup even if other parties also contributed. CERCLA contribution claims (under 42 U.S.C. § 9613(f)) allow parties that have paid cleanup costs to recover from other PRPs, but that backstop requires litigation and does not prevent initial liability. For municipalities with limited budgets, the prospect of Superfund liability for PFAS they received from industrial customers is a direct financial exposure regardless of fault.

What the MSW Exclusion Does and Does Not Cover

CERCLA contains a municipal solid waste (MSW) exclusion at 42 U.S.C. § 9607(p)(1). This provision excludes from arranger liability "any person who arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of municipal solid waste." The MSW exclusion is specifically designed to protect municipalities, households, and small businesses that contribute to mixed solid waste streams from being swept up in industrial Superfund liability.

Why the MSW exclusion does not solve the PFAS problem for POTWs

The MSW exclusion applies to "municipal solid waste" — not to wastewater treatment. POTWs receive industrial wastewater that does not qualify as municipal solid waste. The industrial effluent that carries PFAS into a POTW comes from manufacturing facilities, not households. A POTW that received PFAS-laden industrial discharge is not an "arranger for disposal of municipal solid waste" — it is a wastewater treatment operator that happened to process contaminated influent. The MSW exclusion text does not reach that situation, and EPA's 2024 rulemaking did not create a new statutory exclusion for POTWs.

EPA's Enforcement Discretion Policy: What It Says and What It Is Not

Concurrently with the final designation rule, EPA issued a policy memorandum describing its intent to exercise enforcement discretion for certain categories of entities. The enforcement discretion policy identifies publicly owned treatment works (POTWs), publicly owned or operated municipal solid waste landfills, publicly owned airports, and fire departments that used aqueous film-forming foam (AFFF) for training or emergency response as entities that EPA does not currently intend to pursue as PRPs for PFAS cleanup costs in most circumstances.

Non-binding character of enforcement discretion

An enforcement discretion policy is an internal agency guidance document. It is not a statutory exemption. It does not appear in the Code of Federal Regulations. It does not bind the agency in individual enforcement proceedings, and it does not bind third-party plaintiffs in citizen suit or private cost-recovery litigation. Under CERCLA, a private party that has incurred cleanup costs at a contaminated site can bring a Section 107(a) cost-recovery action against any PRP — including a POTW that EPA has chosen not to pursue — without being constrained by EPA's enforcement policy.

Administration change risk

Because the enforcement discretion policy is not codified in regulation, it can be withdrawn, modified, or superseded by a future EPA administration without notice-and-comment rulemaking under the APA. CERCLA's strict liability scheme would remain intact regardless of whether the policy is in effect. Municipal entities that have structured their financial planning around enforcement discretion — rather than around the underlying statutory liability — are exposed to the risk that the policy shifts.

The Congressional Gap and the Path to a Real Exemption

The only durable solution for municipalities facing PFAS CERCLA exposure as passive receivers is a statutory exemption enacted by Congress. EPA acknowledged this in its 2024 rulemaking, noting that the agency lacks authority to write a statutory exemption — only Congress can do that. Several bills have been introduced in Congress that would create exemptions for passive receivers, POTWs, and municipal landfills in PFAS Superfund cases, but as of the date of this post, no such legislation has been enacted. The gap between the agency's enforcement policy and binding statutory protection remains open.

For legal and government affairs teams at municipal utilities, airports, and fire departments, the practical implication is that current liability exposure under CERCLA must be assessed against the statute — not against the enforcement policy. That means evaluating: whether the entity received or disposed of PFAS-containing materials; whether the entity qualifies as a PRP under any of CERCLA's four categories; what the volume and nature of any PFAS-related releases were relative to the one-pound reportable quantity; and whether contribution claims from other PRPs are possible under § 9613(f). The enforcement discretion policy can be a factor in risk prioritization, but it cannot substitute for that statutory analysis.

Law Gaps maps the gap between what the law says and what the current enforcement posture says, because those two things can diverge at any point in the policy cycle. The PFAS CERCLA municipal situation is a canonical case: the statutory exposure is clear, the enforcement policy is protective but fragile, and the gap closes only with legislation that hasn't yet arrived.

References & Sources

  1. EPA, Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances, 89 Fed. Reg. 39124 (May 8, 2024), effective July 8, 2024. Source: epa.gov/pfas/pfas-laws-and-regulations. Used for effective date, reportable quantity (1 pound), and codification at 40 CFR Part 302.
  2. CERCLA Section 107(a), 42 U.S.C. § 9607(a) (liability of covered persons). Source: law.cornell.edu/uscode/text/42/9607. Used for the four categories of PRPs, strict liability standard, and joint and several liability doctrine.
  3. CERCLA Section 107(p), 42 U.S.C. § 9607(p) (municipal solid waste exclusion). Source: law.cornell.edu/uscode/text/42/9607. Used for the scope and text of the MSW arranger exclusion and explanation of why it does not extend to POTW industrial influent.
  4. CERCLA Section 113(f), 42 U.S.C. § 9613(f) (contribution rights). Source: law.cornell.edu/uscode/text/42/9613. Used for the contribution mechanism available to parties who have paid cleanup costs and seek to recover from other PRPs.
  5. CERCLA Section 103, 42 U.S.C. § 9603 (notification requirements). Source: law.cornell.edu/uscode/text/42/9603. Used for the notification trigger activated by releases at or above the one-pound reportable quantity for PFOA and PFOS.
  6. EPA, PFAS Enforcement Discretion and Settlement Policy Under CERCLA (Apr. 2024). Source: epa.gov/enforcement/pfas-enforcement-discretion-and-settlement-policy-under-cercla. Used for the scope of the non-binding enforcement policy covering POTWs, municipal landfills, airports, and fire departments, and its non-regulatory character.