Managing Risks from PFAS in Construction and Demolition

Attorneys can help you minimize or allocate the risks from PFAS in contracting. Being proactive and well informed from professionals about the expanding PFAS regulations and lawsuits will help you navigate to safe harbors and away from liability related to PFAS.
By Robin L. Main

The risks from per- and polyfluoroalkyl substances—commonly referred to as “PFAS”—are widely reported on lately. The PFAS regulations at the federal and state levels are changing quickly and are increasing in scope and many states are moving to ban PFAS. PFAS are human-made chemicals that may be harmful to humans and other living things, and could lead to adverse reproductive effects, increased risks of cancer, and a weakened immune system. PFAS have been used in industry and consumer products for decades and are in countless building products like protective coatings for roofs, flashing, floor materials including carpeting, insulation, textiles, and firefighting foam. In construction and demolition, companies should be aware of PFAS in the built environment and take measures to reduce risk for the release of PFAS—particularly for cleanup costs associated with PFAS contamination.

The risk for cleanup costs related to PFAS increased tremendously on April 19, 2024, when the US EPA finalized a rule listing PFOS as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund. The new rule means more cleanup liability at the federal level and the states will not be far behind in regulating PFAS the same way under their so-called “mini-Superfunds”. EPA and the states have found PFAS throughout the environment—air, surface water, groundwater, and soils—requiring remediation from historical activities and even current ones.

EPA’s new rule also will affect due diligence in all types of transactions, including real estate development and construction projects. EPA’s non-binding guidance on enforcement that accompanied the new Superfund rule states clearly that EPA “will focus on holding accountable those parties that have played a significant role in releasing or accentuating the spread of PFAS in the environment.” This statement further emphasizes the “polluter pays” theme that has been part of Superfund and states’ “mini-Superfund” cases over the decades.
In addition, the new PFOA/PFAS rule under CERCLA means that PFOA and PFAS are now hazardous substances under the federal Hazardous Materials Transportation Act, which may also affect the industry in the way these substances are transported.

How to Manage the Risk in Construction and Demolition
The golden rule in managing risk in the environmental setting is to know what you are handling. The construction and demolition industry have been doing this for decades with asbestos, lead paint, and underground storage tanks, to name a few. Good due diligence in the industry now means adding PFAS to the list of items that you should proactively look for when identifying risks on a job. You need to consider whether materials used for construction contain PFAS and, if they do, whether there are adequate non-PFAS substitutes for those materials. There is a fast-growing industry developing PFAS substitutes, but adequate substitutes are still in their infancy and are not available for all types of textiles, as just one example. Material costs, which have increased significantly since COVID, are also on the rise because of the cost of PFAS substitutes.

On the demolition side of the industry, if you have PFAS in building materials to be demolished, you also need to consider where such materials or wastes will be taken and how they will be managed. You must know whether the acceptance criteria at your targeted disposal or recycling facility allows for PFAS and how that facility will manage such material. For example, if sending material to a landfill, ask yourself if there are good leachate collection systems. Leachate is liquid generated from rainfall and the decomposition of waste that is filtered to the landfill’s leachate collection system. You want to inquire about the proper handling of leachate when disposing at a landfill. This is because poor leachate control of PFAS-containing material and waste can allow the PFAS to get into drinking water, which is one of the quickly growing areas of lawsuits on PFAS contamination. Dealing with PFAS contaminated drinking water is very expensive.

To show the huge amounts at stake in PFAS litigation one only need to look at the cases against 3M that have been bundled into one piece of multi-district litigation in the US District Court in South Carolina. In that case, a federal district judge recently approved an agreement between 3M and public water utilities to settle thousands of contaminated groundwater cases in various states for about $10.3 billion.

Throughout the country, PFAS litigation is expanding targeting not only to manufacturers of PFAS, like 3M, but also others in the chain of commerce who have handled PFAS containing materials. For example, in one extraordinary case in the United States District Court for the District of Massachusetts, Ryan et al. v. Grief, Inc. et al., no. 4:22-cv-400089, many companies have been accused of contaminating groundwater with PFAS by using a composting operation that took in, among other things, landscaping waste and paper fiber sludge. Some of the companies in the Ryan case were accused of violating the Racketeer Influenced and Corrupt Organizations Act (RICO)—which is typically used for ongoing criminal organizations—based on that they conspired about the dumping and acceptance of alleged PFAS containing waste. The Massachusetts court denied the companies’ motions to dismiss the RICO claims, allowing them to proceed in the case.

Words to the Wise
Knowing where PFAS typically are found, how they can be dealt with under the federal and state regulations and whether there are adequate substitutes for PFAS containing materials must now be part of your business considerations. While managing the liability risks with PFAS handling should translate into less financial risk to your business, the financial considerations when handling PFAS or their substitutes also need to be considered when bidding construction and demolition jobs. Staying up to date about PFAS regulations and how they are developing at the federal and state levels are crucial steps for companies as they move forward with construction and demolition. Vigilance when bidding a job will require questions on potential PFAS containing materials. Seeking guidance from seasoned professionals like environmental consultants to help evaluate the handling of PFAS waste streams is important. Such consultants can help evaluate whether the materials you are dealing with contain PFAS and what are the best options for handling those materials under the regulations. similarly, attorneys can advise you on the applicable regulations at both the federal and state levels. Importantly, attorneys can let you know if certain PFAS containing materials are outright banned for use in certain states. Attorneys can also help you minimize or allocate the risks from PFAS in contracting. Being proactive and well informed from professionals about the expanding PFAS regulations and lawsuits will help you navigate to safe harbors and away from liability related to PFAS. | WA

Robin L. Main is a partner in the Litigation group, co-chair of the Environmental and Energy group, and serves on the Executive Committee at Hinckley Allen. She is a seasoned environmental and energy attorney with more than 30 years of experience handling complicated environmental and permitting complex projects throughout the country. Robin can be reached at (email protected) or visit www.hinckleyallen.com/people/robin-l-main.