KEY TAKEAWAYS
- The PFAS Safe Drinking Water Act regulations will have enormous financial impacts on companies that never manufactured PFAS
- The case is one to watch for legal professionals, as certain arguments challenge the scope of EPA’s discretionary power to promulgate new regulatory rules
- The likely result of the oral argument is that the regulations with respect to PFOA and PFOS will stand. The other regulated PFAS may will not survive judicial scrutiny, though
What Is the History of This Case?
We have previously detailed the EPA’s efforts under the Biden Administration to regulate certain types of PFAS under the Safe Drinking Water Act (SDWA). In short, PFOA and PFOS would have a Maximum Contaminant Level of 4 ppt, and PFHxS, PFNA, HFPO-DA and certain mixtures would either have a 10ppt limit or would be tested by using the EPA’s Hazard Index approach. Almost immediately, the PFAS drinking water rule was challenged in court and the case (American Water Works Association (AWWA), et al. v. EPA) has lingered in the D.C. Circuit Court for about 24 months.
The biggest reason for the delay, however, was due to the fact that a new Administration took over in January 2025, and the EPA requested several continuances to assess whether it wished to proceed with the full scope of the Biden EPA’s PFAS drinking water rule. After several months, the EPA moved the Court to vacate all but the PFOA and PFOS portion of the rule.
On January 21, 2026, the Court issued a very brief Order denying the EPA’s request to vacate any part of the PFAS drinking water rule. The Court’s reasoning for denying EPA’s request was simple and brief: “The merits of the parties’ positions are not so clear as to warrant summary action.” As such, the case was sent to a merits panel for ultimate decision on the fate of the PFAS drinking water rule.
What Will Happen At Oral Argument?
A three judge panel will listen to arguments from both sides, which are expected to focus on the AWWA arguments set forth in its briefing – i.e., that the EPA put politics before science and acted too quickly, that the science does not support the EPA’s drinking water limits, that the EPA did not consider studies counter to the ones that it cited as reliance material such that it acted arbitrarily and capriciously in putting forth its regulation, and that EPA overstepped the authority granted to it by Congress in promulgating the drinking water rule.
It is the last issue related to the extent of EPA’s rulemaking power and authority that is of perhaps the most interest, particularly to attorneys and other groups eyeing legal challenges to federal agency scope of authority. With the reshaping of the U.S. Supreme Court and federal court benches in recent years, numerous cases have challenged the contours of agency discretionary powers. This case is no different, and it is of interest that just this week, one of the three judges assigned to hear oral argument in this matter was replaced by a Trump-appointed judge. The other two judges were appointed by former President Obama.
What Will Result From the Oral Argument?
While a ruling is not likely to be made until at least a month after oral argument, the ruling from the court will be incredibly significant in determining the trajectory of PFAS enforcement action and litigation in the United States.
If the Court upholds the SDWA PFAS regulations, the financial implications to businesses will be enormous. While many believe that the chemical industry in particular will feel the brunt of the regulations, this view overlooks the significant downstream impact that will be felt in every state in the country by companies that used (not manufactured) PFAS.
Under the SDWA, the EPA has the authority to pursue any party that it feels contributed to pollution of drinking water such that levels of the pollutant exceed the regulatory limits. In states that already have drinking water standards (it should be noted that the EPA’s proposed 4ppt limit is lower than any state limit currently in effect, and so the federal PFAS drinking water standard would trump all state regulations already in effect), companies from many different verticals have already felt the financial impact of PFAS enforcement action. The state-level EPA arms target polluting companies, whether such pollution was intentional or not, and have the power to force the companies to pay for the full cost of remediation. Even relatively simple sites or sources of such PFAS contamination can cost companies hundreds of thousands of dollars in professional remediation costs, with more complex sites often costing several million dollars in remediation costs. While the EPA or state arms of the EPA can pursue as many responsible parties as it wishes, it often chooses to send enforcement notices to a small handful of companies. With strict liability the standard in most states for such actions and statutes supporting “joint and several liability” (i.e. – any responsible party can be pursued for 100% of costs), this often leads to civil lawsuits among parties to litigate shares of responsibility, which drives up costs even further.
Conversely, if the Court overturns the EPA’s SDWA PFAS limits (a result that I do not believe is likely), this does nothing to already existing PFAS drinking water standards at the state levels. Expect a few other states to join the nearly 30 states with existing drinking water standards and adopt PFAS drinking water regulatory limits. Further, I would expect EPA to go back to the drawing board, so to speak, on developing SDWA PFAS regulations that would withstand legal scrutiny. The PFOA and PFOS issues, in particular, are just too much of a powder keg for EPA to accept defeat and not make attempts under the new administration to put forth final rules.
How Does the Result of the Case Impact Companies?
The writing has been on the wall for the last over two years with respect to companies needing to ensure that they are prepared for the day when the EPA has final PFAS drinking water standards to use for enforcement action, and the clock is moving into the eleventh hour in terms of time remaining to prepare. Companies absolutely must take steps to ensure that they understand both their current and legacy PFAS pollution risks, they must take a hard look at steps that can be taken today to minimize such risks and get ahead of enforcement action through pro-active actions on properties owned by the company, and they must understand the temperature of the state-level EPA arms in which properties or facilities with risk are situated – i.e., is the local EPA arm an aggressive enforcer? Not aggressive? Is PFAS their top priority? Is their focus elsewhere at the moment?
These and many other complex questions must be addressed now while there is still time to do so.
CMBG³’S PERSPECTIVE — WHAT WE ARE SEEING
It is easy for companies to be lulled into a false sense of security with respect to PFAS drinking water regulations. After all, the final rule was issued in April 2024 and has still not been become enforceable. However, the ruling of the Court in American Water Works Association (AWWA), et al. v. EPA will be a turning point, and is likely to allow at least some portions of EPA’s final rule to survive. Companies must act now or continue to carry out risk assessments and diligence to protect themselves from the full impact of likely litigation and enforcement action once the rule goes into full effect.
Frequently Asked Questions
Q. What are the arguments at oral argument in the American Water Works Association (AWWA), et al. v. EPA case?
A. AWWA argues that the EPA put politics before science and acted too quickly, that the science does not support the EPA’s drinking water limits, that the EPA did not consider studies counter to the ones that it cited as reliance material such that it acted arbitrarily and capriciously in putting forth its regulation, and that EPA overstepped the authority granted to it by Congress in promulgating the drinking water rule.
Q. Is the Court likely to strike EPA’s PFAS drinking water rule entirely?
A. No. While the Court may strike the regulations involving PFAS other than PFOA and PFOS (i.e. – the ones regulated using a Hazard Index approach), the PFOA and PFOS regulations of 4ppt are likely to survive judicial scrutiny.
Q. What steps can companies take now to protect from future risk?
A. Companies absolutely must take steps to ensure that they understand both their current and legacy PFAS pollution risks, they must take a hard look at steps that can be taken today to minimize such risks and get ahead of enforcement action through pro-active actions on properties owned by the company, and they must understand the temperature of the state-level EPA arms in which properties or facilities with risk are situated – i.e., is the local EPA arm an aggressive enforcer? Not aggressive? Is PFAS their top priority? Is their focus elsewhere at the moment?
ABOUT THE AUTHOR
John P. Gardella — Shareholder, Chair of PFAS Practice
John has twenty years of environmental litigation and compliance experience and represents companies brought into PFAS litigation, looking for comprehensive PFAS risk assessments, and in need of PFAS compliance reporting. He was recognized by the National Law Review twice as the only national thought leader on PFAS. His opinions are sought by Wall Street Journal, Washington Post, Bloomberg, AM Best, and numerous industry-specific publications.
Contact John Gardella · CMBG³.com/pfas-litigation
