PFAS Regulation - Litigation Wisconsin Dry Cleaners Face


PFAS Update and Litigation

By Delanie M. Breuer


The Wisconsin Fabricare Association (WFI) is battling the WI Department of Natural Resources over PFAS contamination (a man-made chemical found in thousands of products like non-stick cook wear, waterproof clothing, food wrappers, and cosmetics). WI Dry Cleaners are being targeted since they may have cleaned items that have the chemical and has washed into the nearby environment. SDA wants to make its members aware of the issue in Wisconsin since PFAS/PFOS is not specific to that state. Below is an update WFI shared with SDA.

Litigation

Two cases related to PFAS regulation continue to work through the courts, both spearheaded by Wisconsin Manufacturers and Commerce (“WMC”).


The first case involves a remediation case at a dry-cleaning facility where DNR has denied approval to begin remediating dry-cleaning related substances unless and until the facility tests for PFAS. The case was brought by plaintiffs WMC and Leather Rich, Inc., and argues that DNR cannot regulate PFAS (or any substance) as hazardous unless DNR has properly promulgated and published the regulation. Under DNR’s interpretation of the law, the agency can determine what is or is not a hazardous substance requiring cleanup, and to what level it must be cleaned up, on a case-by-case basis. For example, the agency asserts that milk and beer could be hazardous substances, depending on when and where it is released into the environment.


A person is required to report a “spill” of a hazardous substance to DNR when it occurs or face hefty fines. However, without knowing what DNR considers hazardous at any given time, it is impossible to know when reporting is required. The concern with this approach is that the regulated community is not on notice of what or how DNR will regulate, but can still be held liable for violating those unknown regulations. The case is currently pending in Waukesha County Circuit Court.


The second case brought by WMC challenges DNR’s attempt to test discharge water from several large industrial facilities for PFAS, despite there being no enforcement standard or requirement for testing in law. Approximately 40 industrial facilities were targeted by DNR’s new program for testing, which WMC argues is beyond DNR’s authority.


The case is pending in Jefferson County Circuit Court, and there is currently a temporary restraining order in place that allows DNR to collect the samples, but does not allow DNR to release information related to the testing results in a manner that identifies the facility from which the sample was taken.


If DNR prevails in the case, they will be allowed to sample water from any permit holder, and could use that information to potentially open a remediation case (subject to the outcome of the Waukesha County Case discussed above), bring an enforcement action, and/or publicly release the information connecting PFAS to the business sampled.


PFAS continues to be a very high-priority topic at DNR and other state agencies, as well as among legislators. Federal agencies, such as the EPA, are also moving quickly moving toward PFAS regulation, all of which could affect the fabricare industry. Staying engaged with local representatives and regulators could help make sure the voice of the industry is heard while these developments are occurring.


Legislation

The Governor introduced the “CLEAR Act” aimed at fast tracking tasting and regulation of PFAS compounds in air and water. The CLEAR Act is sponsored by representatives from Madison and La Crosse areas, and would require testing and reporting of PFAS compounds in air and water. The Act would also allow regulators to enforce standards without vetting them through the public rulemaking process, and would require testing and reporting of any PFAS emissions in air and water. Grant funding would be available for some public entities, though the amount is miniscule compared to the actual costs of remediation and treatment. The Act also addresses PFAS-containing firefighting foam and PFAs in food packaging, and would fund at least 11 additional positions at DNR to administer the PFAS regulations.


Most applicable to the fabricare industry is the requirement that an entity determined to be a responsible party for PFAS be required to provide proof of financial responsibility for remediation and long-term care to address the potential future environmental pollution. This means anyone with an open remediation case would be required to test for PFAS, and then could be required to provide insurance, funding, bonds, or some other financial surety to cover the potential future costs of remediation.


The CLEAR Act was introduced last legislative session but did not move forward to a hearing.


Regulation

The DNR released its first proposed rule related to PFAS regulation, along with the required economic impact statement that estimates the cost of the proposed rule, as required by Wisconsin law. The rule proposes a groundwater quality standard for PFOA and PFOS, the two most studied PFAS compounds, of 20 parts per trillion (ppt) with a preventive action limit of 2 ppt. Under the rule, those levels would become enforceable effluent limits in wastewater permits and would also make PFOA and PFOS hazardous substances subject to the remediation law, which means any entity with an open remediation case would be expected to test for and remediation these substances. It will also force permit-holders to test for the substances, and if found, would allow DNR to potentially open new remediation cases in those locations. Considering the ubiquitous nature of PFAS, it is likely to be found at these low levels on many properties historically used for industrial purposes.


According to DNR’s economic impact analysis, the rule is anticipated to cost between $175,000 and $5 million annually. However, this cost does not include compliance costs, such as remediation and treatment equipment. According to DNR, those costs are “site-specific and highly variable.” If the rule is estimated to cost over $10 million statewide over any two-year period, the legislature is required to take additional action to move the rule forward. According to DNR’s estimate, this rule would fall just under that $10 million limit. DNR does not expect that the rule will have a significant economic impact on small businesses, but provides limited support for that assertion, claiming that the cost of treatment and remediation is too difficult to estimate accurately.


The public can comment on the economic impact analyses until June 13, 2021. Instructions for submitting comments can be found here.


Delanie Breuer is a shareholder at Reinhart Boerner Van Deuren. Her practice focuses on energy and environmental regulation, and administrative law.