A recent Supreme Court ruling could further jeopardize EPA’s PFAS hazardous substance designation, as the agency is attempting to advance a novel use of delegated legislative authority to further regulate PFAS chemicals.
On June 28, the Supreme Court issued its opinion in Loper Bright Enterprises v. Raimondo, 603 U.S. ____ (2024), overturning the longstanding doctrine known as “Chevron deference.” Loper Bright substantially expands the ability of federal courts to review and reject federal agencies’ interpretation of statutes.
Not two months before the Court issued its decision in Loper Bright, the U.S. Environmental Protection Agency (EPA) published its long-awaited rule designating two PFAS compounds, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), as “hazardous substances” under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) on May 8, 2024. The Final Rule has significant immediate impacts, which Pillsbury has described in greater depth here, but is also novel in a legal sense: The Final Rule marks the first time that the agency has designated a hazardous substance using its authority under Section 102(a) of CERCLA.
Chevron Deference and Loper Bright, Explained
The principle of agency deference overturned by Loper Bright originated 40 years ago in Chevron USA, Inc. v. Natural Resource Defense Council, 467 U.S. 839 (1984). In attempting to resolve statutory ambiguity concerning the meaning of a regulated “source” under the Clean Air Act, the Supreme Court created a simple, two-step test for federal courts reviewing agency interpretations of statutes.
First, courts should assess whether the text of the statute reveals that Congress has explicitly and unambiguously addressed the question at issue. If not, and the statute is ambiguous, courts must defer to the agency’s interpretation so long as the agency’s interpretation is reasonable. The Supreme Court reasoned that federal judges are not experts in the technical regulatory matters that face administrative agencies, nor are judges as accountable to the public as agencies that are part of the executive branch.
Since the Supreme Court issued this opinion in 1984, Chevron deference has allowed administrative agencies to consider the scope of their delegated powers from Congress with greater flexibility. Chevron has been cited by federal courts more than and has served as a basis for upholding countless federal regulatory efforts, ranging from cases involving the Social Security Administration, to the Immigration and Naturalization Service, to, of course, EPA.
Writing for the majority in Loper Bright, Chief Justice Roberts characterized Chevron as “fundamentally misguided” and “unworkable,” primarily because federal courts have long struggled to assess what exactly constitutes “ambiguity” and thus preventing the judiciary from adequately interpreting federal law. The Court also rejected the idea that the technical expertise of agencies requires deference in interpreting ambiguous statutes, finding instead that federal courts are best suited to this task because it is the fundamental job of the courts to decide legal questions by applying their own independent judgment.
The Court also instructed federal courts to return pre-Chevron framework: Skidmore respect. Based on Skidmore v. Swift & Co., 323 U. S. 134 (1944), Skidmore instructs federal courts to give weight and consideration to the reasoned, technical judgments of agencies. Federal courts, however, are still free to reject an agency’s interpretation if, in the court’s view, that interpretation is not the best interpretation of the statute at issue.
Implications for PFAS Regulations
EPA’s designation of PFOA and PFOS as hazardous substances under CERCLA is already facing a challenge from industry trade associations at the U.S. Court of Appeals for the District of Columbia Circuit. (See Chamber of Com. et al. v. EPA, D.C. Cir., No. 24-01193 (Filed Jun. 10, 2024).) In a non-binding statement of issues for the Court to consider, Petitioners indicated their intent to press the statutory interpretation question of “[w]hether EPA erroneously interpreted CERCLA when designating PFOA and PFOS as hazardous substances.”
Comments to EPA’s proposed rule indicate the precise subjects of these rulemaking challenges. For example, a conglomeration of oil and gas trade groups contested EPA’s interpretation of Section 102(a) which authorizes EPA to “promulgate and revise as may be appropriate, regulations designating as hazardous substances … elements, compounds, mixtures, solutions, and substances which, when released into the environment may present substantial danger to the public health or welfare or the environment.” Specifically, commenters argued that EPA’s criteria for evaluating whether a chemical or substance poses a “substantial danger to public health or welfare” was vague and not adequately defined in the Final Rule.
EPA’s response to these comments reveal that the agency believes it is entitled to a degree of deference in making hazardous substance designations. In the preamble to the Final Rule, the agency defended its interpretation by noting that “EPA is taking final action…after considering the available scientific and technical information and after considering comments on the proposed determination. Available information indicates that human exposure to PFOA and/or PFOS is linked to a broad range of adverse health effects” (89 Fed. Reg. 39125). The groups challenging the rule will likely argue in response that EPA is making the same error that the Supreme Court observed from federal agencies in Loper Bright; EPA has not promulgated judicially manageable or anything resembling a firm standard to support its interpretation of the phrase “may present substantial danger to public health or welfare of the environment.” A court reviewing the Final Rule could very well still defer to EPA’s understanding of the scientific and public health literature on the impacts of PFAS chemicals and uphold the rule. But in a post-Chevron landscape, the reviewing court is also more likely to invalidate EPA’s approach and vacate the Final Rule.
It remains to be seen how the D.C. Circuit, or other reviewing Courts, will review EPA’s interpretation of CERCLA and other environmental statutes in light of Loper Bright. Regardless, EPA stands to continue its push to further regulate PFAS chemicals, in keeping with the Biden Administration’s PFAS Strategic Roadmap.
Pillsbury attorneys will continue to monitor the consequences of this decision both in the environmental law arena and as they spread to other agencies and subject matters.
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