Over the last several weeks, appellate courts in two states have issued decisions with varying impacts on per- and polyfluoroalkyl substances (PFAS) regulations at the state level. In New Jersey, the New Jersey Appeals Court has upheld the strict PFAS drinking water standards promulgated by the New Jersey Department of Environmental Protection in an opinion issued Aug. 3, 2023. In contrast, just yesterday, a Michigan appeals court invalidated the PFAS drinking water standards issued by the Michigan Department of Environment, Great Lakes, and Energy (EGLE).
What are PFAS?
PFAS are a category of manufactured chemicals that can cause serious health problems, including cancer. PFAS have been used in the manufacturing of numerous common household and commercial products. As a result, PFAS can be found in makeup, medical supplies, and food containers. They have also been used in industrial settings due to their useful properties, like heat-resistance, stain-resistance, fire-resistance, and water-resistance, and many products marketed as stain-proof or water-proof have contained PFAS. As information confirming the health and environmental concerns posed by PFAS have been revealed, state and federal regulators have sought to limit exposure to the dangerous substance.
Federal Government Lags Behind States in Regulating PFAS
In March 2023, EPA issued a news release proposing the first-ever National Standard to Protect Communities from PFAS in Drinking Water. The proposal, if finalized, is expected to regulate PFOA and PFOS as individual contaminants and four other PFAS – PFNA, PFHxS, PFBS, and GenX Chemicals – as a mixture.
Though EPA has stepped up its efforts to begin regulating PFAS on a national level, it remains unclear when those regulations will go into effect. Many eager onlookers suspect the regulations may be issued later this year. States, in the meantime, have taken a myriad of approaches to understanding and regulating PFAS.
States' Approaches to Regulating PFAS Have Experienced Varying Levels of Success
Michigan
The recent invalidation of EGLE's PFAS drinking water standards by a 2-1 decision by the Michigan Court of Appeals boils down to a procedural issue raised by 3M, which is one of the largest manufacturers of PFAS. 3M is also currently defending litigation all over the world arising from its role in the production and distribution of PFAS for many decades.
Under Michigan's Administrative Procedure Act (APA), agencies like EGLE are required to do a "regulatory impact statement" (RIS), which, among other requirements, must estimate the actual statewide compliance costs of the proposed rule on individuals, businesses, and other groups. See MCL 24.245(3). 3M argued that EGLE failed to consider the estimated costs the proposed rule would automatically impose on groundwater cleanups based on the PFAS groundwater cleanup criteria.
EGLE's proposed rule would have set maximum contaminant levels (MCLs) for seven PFAS (units in parts per trillion, or "ppt"):
- perfluorooctanoic acid (PFOA) (MCL of 8 ppt);
- perfluorooctanesulfonic acid (PFOS) (MCL of 16 ppt);
- perfluorononanoate (PFNA) (MCL of 6 ppt);
- perfluorohexanoic acid (PFHxA) (MCL of 400,000 ppt);
- perfluorohexanesulfonic acid (PFHxS) (MCL of 51 ppt);
- perfluorobutane sulfonic acid (PFBS) (MCL of 420 ppt); and
- hexafluoropropylene oxide dimer acid (HFPO-DA) (MCL of 370 ppt)
According to the appellate court's decision, the adoption of the above MCLs for those seven PFAS is problematic. Firstly, the MCLs for PFOA and PFOS are lower than existing groundwater cleanup criteria, which means the MCLs for those two PFAS are automatically adopted as the new groundwater cleanup criteria for those two chemicals. And because there is no existing groundwater cleanup criteria for the other five PFAS, the appellate court determined EGLE had to undertake a separate rulemaking process under Michigan's environmental protection laws contained in Part 201 of the National Resources and Environmental Protection Act (NREPA).
The majority opinion's rationale was that the law "has to be read in its entirety, and what MCL 24.245(3)(n) requires is that EGLE provide an estimate 'of the actual statewide compliance costs of' the proposed rule." Since the proposed rule altered the groundwater cleanup criteria for two of the seven PFAS and created new criteria for the other five, it had a ripple effect that requires EGLE to provide an estimate of the actual statewide compliance costs, which included the costs associated with groundwater cleanup. EGLE's arguments that it could not provide such an estimate due to a lack of necessary information was unconvincing to the majority, which determined that Michigan law did not provide for such an exception.
The practical effect of the Michigan Court of Appeals decision is that unless EGLE successfully appeals the decision, it will be required to estimate costs under Part 201. Either way, this decision was a blow to Michigan's efforts to regulate PFAS.
New Jersey
The New Jersey Department of Environmental Protection (DEP) adopted a series of rule amendments setting MCLs for PFOA and PFOS in New Jersey's drinking water and groundwater. 3M and the Chemistry Council of New Jersey appealed DEP's adoption of the rule amendments, asserting procedural and substantive challenges. In their challenge, 3M and the Chemistry Council of New Jersey alleged that DEP's rule amendments were invalid because they were not compliant with New Jersey's version of the APA, N.J.S.A. 52:14B-4 and that DEP's decision to adopt the rule amendments should be reversed on the grounds it is arbitrary, capricious, and unreasonable.
One of the arguments made by 3M and the Chemistry Council of New Jersey was strikingly similar to the arguments made by 3M in the Michigan case. Namely, that DEP failed to sufficiently account for the economic impact of the rule under the requirements of New Jersey's version of the APA. However, the New Jersey appellate court rejected that argument, stating that they "are satisfied DEP substantially complied with the requirement that it provide a description of the socio-economic impact of the rule amendments." The appellate court also rejected arguments that DEP's decision to adopt the rule amendments was arbitrary, capricious, and unreasonable, finding that DEP based its decision on sound scientific grounds.
Why Did the Outcomes in Michigan and New Jersey Differ?
Although the laws at issue in Michigan and New Jersey are not exact parallels, the argument 3M made in both cases is similar – that the state failed to sufficiently account for the economic impact of the regulation of PFAS. Why the different outcomes, with New Jersey upholding the PFAS regulations and Michigan striking them down? Many variables exist between the two cases, but a growing trend in the legal community is the divergence from the doctrine commonly known as "Chevron Deference," aptly named after the U.S. Supreme Court's Decision in Chevron v. NRDC (1984).
In short, Chevron Deference is the concept that courts give deference to agencies when considering challenges to administrative actions. In the New Jersey case, the court gave deference to DEP's decisions. In the Michigan case, the court refused to give the same level of deference to EGLE. The growing trend in courts refusing to give agencies Chevron Deference was spurred by a 2022 decision by the U.S. Supreme Court in West Virginia v. EPA (2022), wherein the Supreme Court endorsed the "major questions doctrine" over Chevron Deference.
Whether the different outcomes in the Michigan and New Jersey cases can be attributed to courts abandoning Chevron Deference is unclear. However, what is clear is that until comprehensive federal regulations over PFAS are passed, states will continue their efforts to regulate the chemicals, and the legal challenges will likely continue, with differing results also likely to continue among the state courts.
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