Type: Law Bulletins
Date: 05/04/2022

EPA Withdraws Direct Final Rule for Standards and Practices for All Appropriate Inquiries

The U.S. Environmental Protection Agency (EPA) has withdrawn a direct final rule which proposed the adoption of updated contaminated site assessment standards. The withdrawal of the rule was due to the EPA receiving adverse comments submitted by the environmental law community and the U.S. Chamber of Commerce.

The direct final rule, published on March 14, 2022, proposed an amendment to 40 CFR part 312. The rule proposed amending the Standards and Practices for All Appropriate Inquiries (AAI) to incorporate the updated American Society for Testing and Materials (ASTM) standards to include ASTM E1527-21, “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.”

The EPA stated it published a direct final rule without a prior proposal because it viewed the change as “noncontroversial” and did not anticipate adverse comments. However, this was not the case. The adoption of ASTM E1527-21 would have added per- and polyfluoroalkyl substances (collectively, “PFAS”) into its “due diligence” rule regarding contaminated properties (often referred to as “brownfields”). Since the EPA’s AAI Rule generally details the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA) requirements for obtaining the bona fide prospective purchaser defense — which shields eligible parties from liability under CERCLA — the implications of the EPA’s rule on parties interested in purchasing a contaminated property was significant.

The rule drew objections over two particular issues. Firstly, brownfield experts, including lawyers, financial service experts, and environmental consultants, along with the U.S. Chamber of Commerce, objected to the inclusion of references to past ASTM standards. They argued that the EPA should only recognize the new 2021 standard for adoption under its AAI Rule. This was, in part, to avoid the use of what experts deem outdated ASTM standards. Additionally, brownfield experts worried that having dual standards invited litigation, potential liability exposure, and confusion among those involved in redeveloping brownfields. Since the redevelopment of these contaminated properties already carries substantial risk, the environmental community is constantly seeking ways to minimize unknowns and decrease the risk of liability. Any increase in the risk of CERCLA liability would undoubtedly have a chilling effect on the purchase and redevelopment of contaminated properties, to the detriment of communities who benefit from brownfields being redeveloped and put to use.

The second issue raised with the rule was the inclusion of PFAS as a contaminant that property buyers and sellers could assess as part of their Phase I Environmental Site Assessment Work. Objectors to the rule, such as the U.S. Chamber of Commerce, argue that the inclusion of PFAS as a contaminant is premature, and would expose those parties to liability under CERCLA.

The classification of PFAS as a contaminant is an ongoing issue that has the environmental community watching closely to see what regulators will do with the “forever chemical.” The implications of PFAS’ classification as a CERCLA hazardous substance will have far-reaching effects on the environmental community.

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