On November 15, 2022, in response to a challenge by 3M, the Michigan Court of Claims invalidated the drinking water MCLs and attendant groundwater standards for several PFAS substances, including PFOA (8 parts per trillion, or ppt), PFOS (16 ppt), PFNA (6 ppt), PFHxA (400,000 ppt), PFHxS (51 ppt), PFBS (420 ppt) and the Gen-X chemical HFPO-DA (370 ppt), promulgated by the State of Michigan’s Department of Environment, Great Lakes, and Energy (the “Department”). The Court of Claims held that the state agency had failed to properly consider the cost impacts of the standards in its impact statement, thus fatally undermining the rulemaking.
The Department had promulgated its drinking water standards for PFOA and PFOS in an expedited manner, and the Court of Claims notes in its opinion that the Department had stated publicly: “WE ARE MOVING AT REGULATORY LIGHT SPEED. AWARE OF COMMENTS ON THE OTHER SIDE THAT WE ARE MOVING TOO QUICKLY.” Notwithstanding this “light speed” approach, the Department decided to use the regular rulemaking process, rather than a more streamlined process available under the state Administrative Procedures Act for emergent, uncertain environmental risks. Because it acted under regular rulemaking procedures, the Department was required to prepare a regulatory impact statement that included discussion of all costs and benefits of the proposed standards. The Court of Claims held that the Department had improperly failed to address in its regulatory impact statement the costs of groundwater cleanup and compliance for entities affected by the proposed rules.
The Court of Claims stayed its own order to allow the parties to appeal the ruling under the regulatory status quo, concluding that interests of public health weighed in favor of leaving the standards in place while the parties pursued available appellate relief. And indeed, the Department filed an appeal with the Michigan Court of Appeals on December 6, 2022.
We expect that 3M’s argument in the Michigan case will be a hot topic as the regulated community considers potential challenges to EPA’s anticipated final rulemaking on drinking water standards for PFOA and PFOS, which may be similarly susceptible to arguments under the federal Administrative Procedure Act that EPA did not satisfactorily perform a required cost-benefit analysis. We will be following the Michigan appeal and will provide updates here as developments warrant.