Current Month (December 2025)
Antitrust Law
Labor Markets: FTC Takes Civil Action Against Vendor’s Customer No-Hire Agreements
By Barbara Sicalides, Daniel Anziska, and Julian Weiss, Troutman Pepper Locke
The latest Federal Trade Commission (“FTC”) action in furtherance of its avowed commitment to “restore fairness to the American labor market” involves a no-poach investigation, not a noncompete case. On December 19, 2025, the FTC announced that it and the New Jersey Attorney General’s Office reached settlements with a building services company barring it from using no-hire agreements.
The FTC’s complaint alleges that the no-hire provisions violate both Section 1 of the Sherman Act, which prohibits agreements that unreasonably restrain trade, and Section 5 of the FTC Act, which bars unfair methods of competition. The agency defines “no-hire agreements” in the complaint as an agreement between two or more companies that “restricts, imposes conditions on, or otherwise limits a company’s ability to solicit, recruit, or hire another company’s employee,” directly or indirectly, either during employment or for any period of time after, including by imposing fees.
The injury to competition alleged under Section 1 includes the elimination of “direct, horizontal, and significant forms of competition to attract labor in the U.S. building services industry,” thereby denying employees access to job opportunities, restricting their mobility, and depriving them of competitively significant information that they could have used to negotiate for better terms.
With respect to Section 5, the FTC claims that the no-hire agreements tend or are likely to harm competition, consumers, and employees in the building services industry. Restricting the ability of building owners and competing building service contractors to hire employees harms:
- Employees because it limits their ability to negotiate for higher wages, better benefits, and improved working conditions, and may lead to further hardship if the building where they work changes management, because the no-hire agreements force them to leave their jobs in some circumstances.
- Building owners and managers because they may be foreclosed from seeking or accepting bids from competitor vendors due to the prospect of losing long-serving workers with extensive, building-specific experience.
Neither the complaint nor the analysis in aid of public comment makes allegations related to market power or market share. Based on published information, the vendor told FTC staff that it did not enforce the no-hire provisions. During the course of the investigation, begun in the prior administration, however, the FTC learned that there had been at least one attempt to enforce compliance. An FTC statement also notes that any legitimate objectives of no-hire agreements could have been achieved through significantly less restrictive means. The agency specified that, among other terms, the scope and duration of the restrictions were not reasonably necessary to achieve the purported procompetitive purpose.
For more information, please see Business Law Today’s full-length article on this topic.
Business Crimes & Corporate Compliance
In Recent House Testimony, FinCEN Highlighted Aggressive Actions to Counter Illicit Financial Activities
By Joseph A. Rillotta, Esq., Partner, Meadows Collier LLP
Andrea Gacki, Director of the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), recently testified before members of the House Financial Services Committee, and her testimony warrants the business community’s attention. Director Gacki was due to update the Committee on implementation of the Corporate Transparency Act. But both Committee members and Director Gacki expounded on FinCEN’s broader work supporting the Trump administration’s law enforcement priorities related to financial transactions in higher-risk geographies.
Based on her testimony, FinCEN’s work executing these priorities will have notable implications for business.
Director Gacki explained that FinCEN is deploying its resources to “threat priorities,” first among them suspected drug cartel activity. Gacki noted that in June 2025, using the recently revised Fentanyl Sanctions Act as its authority, FinCEN listed three Mexico-based financial institutions as being of “primary money laundering concern” (“PMLC”). As a result, the banks were excluded from the U.S. banking system, and ultimately Mexican regulators took over those institutions and replaced their compliance personnel. Gacki touted the PMLC listings—the first actions of their kind under the revised statute—as a “powerful tool” that may be deployed against drug traffickers. She acknowledged, however, that innocent bank patrons may have had their accounts effectively frozen, and that Treasury had implemented mitigating measures to permit the extraction of lawful funds.
Director Gacki also noted that fraud remains the most common type of suspicious activity identified by U.S. banks. The array of fraud identified in recent years is “wide and diversified,” including elder financial exploitation, government benefits fraud, and digital asset investment scams. Gacki noted that perpetrators are often outside of the United States, and that some have used artificial intelligence to further their schemes. FinCEN described its novel use of Section 311 of the Patriot Act, another anti–money laundering provision, to prohibit U.S. bank transactions with Huione Group, a Cambodia-based financial institution. FinCEN predicated this action on, among other things, Huione’s apparent patronage by Southeast Asian criminal syndicates involved in “pig butchering” scams where fraudsters cultivate online relationships with victims to eventually pitch fraudulent investment opportunities, often involving cryptocurrency.
The broader business community should understand these law enforcement priorities, as well as FinCEN’s mandate and actions to aggressively respond through the financial system, because financial transactions may be impacted. As with the Mexican bank listings, these law enforcement actions are likely to inflict some degree of collateral damage, disrupting legitimate financial transactions and freezing clean funds. FinCEN has committed to working with local bank regulators to mitigate these burdens in the wake of its enforcement pushes. But in many instances, businesses will deem it prudent to proactively assess and manage legal and operational risks—including by reviewing their relationships with overseas financial institutions, particularly in geographies like Latin America and Southeast Asia that are likely to be in the crosshairs of U.S. law enforcement.
Eleventh Circuit Issues Ruling Upholding the Corporate Transparency Act in Its Entirety
By William E. H. Quick, Outside Inside Counsel, LLC
Visit Business Law Today’s December 2025 in Brief: Corporations, LLCs & Partnerships to read the full update on the Corporate Transparency Act.
FinCEN’s Year-End Announcement Regarding Money Service Businesses
By Thomas F. Morante and Barbara Efraim
On December 22, 2025, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) announced an operation to enhance the targeting of U.S. money services businesses (“MSBs”) located along the southwest border. MSBs are non-bank financial services institutions, including currency dealers or exchanges, check cashers, money transmitters, and issuers of traveler’s checks. 31 C.F.R. 1010.100(ff).
As noted in FinCEN’s announcement, MSBs in the southwest region are targeted given their proximity to the Mexican border where they “can face elevated exposure to illicit activity, including the laundering of proceeds from drug trafficking, smuggling of illegal aliens, and other serious crimes.” As part of this operation, FinCEN’s significant data processing capabilities will be utilized.
Treasury Secretary Scott Bessent stated that FinCEN’s operation furthers the Treasury Department’s objective to “root out potential cartel-related money laundering from the U.S. financial system.” It is anticipated that to detect money laundering and combat illicit finance, FinCEN will focus on potential violations of the Bank Secrecy Act by MSBs.
While MSBs have traditionally been subject to FinCEN’s enforcement authority, this new focused data-processing operation will facilitate FinCEN’s review of thousands of suspicious activity reports and millions of currency transaction reports. To date, this data processing has resulted in issuance of six notices of investigation, dozens of examination referrals to the IRS, and over fifty compliance outreach letters to MSBs.
FinCEN’s announcement is the latest action in a broader campaign to combat illicit activity and follows the June 2025 U.S. Department of Justice update of its guidelines for investigations and enforcement of the Foreign Corrupt Practices Act. In those guidelines, the DOJ emphasized it would shift the Department’s focus to “pursue the total elimination of Cartels and transnational criminal organizations.”
This FinCEN announcement also complements FinCEN’s June 2025 order under the FEND Off Fentanyl Act, imposing special measures against three relatively small Mexican financial firms it identified as being “of primary money laundering concern” regarding fentanyl trafficking by Mexican drug cartels. FinCEN’s order prohibited covered U.S. financial institutions from transmitting funds to or from the identified Mexican financial institutions. The Order’s effective date was extended until October 20, 2025, and it remains in effect. This extension allowed additional time for US financial institutions to implement measures associated with the three Mexican firms. The Mexican government has taken action to mitigate the impact on users of the financial system.
As a consequence of FinCEN’s new MSB operations with a focus on illicit activity, financial institutions, and MSBs in particular, need to ensure their compliance programs are current and robust.
Consumer Finance
Illinois Supreme Court Reverses FACTA Class Certification for Lack of Standing
By Ariel Hodges, Pilgrim Christakis LLP
On November 20, 2025, the Illinois Supreme Court in Fausett v. Walgreen Co., 2025 IL 131444, reversed a circuit court order granting class certification under the Fair and Accurate Credit Transactions Act of 2003 (“FACTA”) and remanded the case with instructions to dismiss, holding that the plaintiff lacked standing because she failed to allege a concrete injury.
The plaintiff filed a class-action complaint against Walgreens Company (“Walgreens”), alleging that Walgreens violated FACTA by printing the first six and the last four digits of her debit card number on her receipts, which purportedly created a “heightened risk of identity theft.” Walgreens challenged the plaintiff’s standing at both the motion-to-dismiss and class-certification stages. Although the circuit court granted class certification, Walgreens appealed.
In reviewing the standing issue, the Court applied the Illinois standing law, which requires “an injury in fact to a legally recognized interest.” The Court acknowledged that FACTA incorporates the liability provisions of the Fair Credit Reporting Act (“FCRA”), but noted that 15 U.S.C. §§ 1681n(a) and 1681p are silent as to who may bring a claim for damages. Because Congress did not expressly empower a consumer or an aggrieved person to sue to enforce their FACTA rights, the Court concluded that common-law standing principles apply, and the plaintiff is required to allege a concrete injury. Noting that the plaintiff had not suffered identity theft since the receipts were printed and that the first six digits disclosed only a bank identification number, the Court held that, at most, the plaintiff alleged “an increased risk of identity theft,” which is a “purely speculative future injury” and “insufficient to confer standing with a complaint for money damages.”
Significantly, the Court emphasized that Illinois standing law applies even when claims are brought under a federal statute. Although it did not address whether a concrete injury is required for statutory standing, the Court reaffirmed that a concrete injury is required to establish common-law standing in Illinois when a plaintiff seeks monetary relief.
FTC Commissioner Holyoak Appointed as Interim U.S. Attorney
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On November 17, 2025, U.S. Attorney General Pam Bondi nominated FTC Commissioner Melissa Holyoak to be interim U.S. attorney for the District of Utah. Holyoak has served as a commissioner at the Federal Trade Commission since March 2024, and her final day as commissioner was November 17, 2025. Before her term at the FTC, she served as solicitor general with the Utah Attorney General’s Office, where she oversaw the civil appeals, criminal appeals, constitutional defense and special litigation, and antitrust and data privacy divisions. The FTC currently only has two commissioners left, Chairman Andrew N. Ferguson and Commissioner Mark R. Meador, who are both Republicans.
CFPB Publishes FDCPA Annual Report
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
The Dodd Frank Act requires the Consumer Financial Protection Bureau (“CFPB”) to report annually to Congress on the CFPB’s activities to administer the Fair Debt Collection (“FDCPA”). On November 21, 2025, the CFPB published its 2025 report. According to the report, about seven percent of consumer complaints to the CFPB in 2024 were related to debt collection. The most common type of complaint (45 percent of debt collection complaints) involved attempts to collect debts that the consumer claimed not to owe, “the predominant issue selected by consumers since the CFPB began accepting debt collection complaints in 2013.” The next most common type of complaint involved written notification about debt. The FDCPA requires collectors, within five days after the initial communication with a consumer, to provide the consumer with a written notice informing them, among other things, of their right to dispute, unless this information is contained in the initial communication, or the consumer has paid the debt. Nearly half of consumers who complained about written notifications reported that the notification did not disclose that it was an attempt to collect a debt.
In 2024, the CFPB filed three amicus curiae briefs in cases involving the FDCPA, and one of those briefs has since been withdrawn. The CFPB did not bring any enforcement actions relating to the FDCPA. However, the FTC brought an enforcement action under the FDCPA, suing a Georgia-based debt collector and owner.
CFPB Sued over Refusal to Request Funding from the Fed
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On December 5, 2025, nonprofit groups announced that they had filed a lawsuit against the CFPB and Acting Director Vought over the efforts to shut down the agency. The groups filed the lawsuit in the U.S. District Court for the Northern District of California alleging that the administration erroneously reinterpreted the law establishing the CFPB, turning a statutory provision intended to create a stable funding source into one that will be exhausted shortly. The complaint alleged that federal law requires Acting Director Vought to determine the amount “reasonably necessary” to carry out the CFPB’s responsibilities so that the Federal Reserve can transfer that amount to the CFPB, and the statute does not give him discretion to refuse to make the request. The nonprofit groups argue that the CFPB’s refusal to request funding from the Federal Reserve was arbitrary and capricious. The complaint asks the court to declare the CFPB’s determination unlawful and to require the CFPB to request funding from the Federal Reserve in an amount reasonably necessary to carry out the authorities of the CFPB.
Previously, on November 20, 2025, CFPB Acting Director Vought wrote letters to President Trump and members of the Committees on Appropriations of the Senate and of the House of Representatives, notifying them that there are no funds legally available for the CFPB to request from the Federal Reserve. The letter explained that the determination was made based on the conclusion of the Office of Legal Counsel within the Department of Justice. The letters did not actually request funding, but merely informed the recipients of the money the CFPB needs. The letter explained that the CFPB estimates it will run out of funding at some point during the first quarter of Fiscal Year 2026 (possibly by January 15). The CFPB’s funding need for Fiscal Year 2026 is listed as $279.6 million, in order to maintain its activities that are required by law.
Leadership Changes at CFPB Amidst Potential Restart of Investigations
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
In mid-November, President Trump nominated Stuart Levenbach to become the CFPB Director. Levenbach is currently an associate director at the Office of Management and Budget and previously served senior roles at the National Oceanic and Atmospheric Administration (“NOAA”). The Vacancies Act generally allows someone to be in the acting temporary role for 210 days or while a nomination is pending with the Senate. Without this nomination, Acting Director Russell Vought could only serve for 210 days from May 12, 2025, the date that Jonathan McKernan’s nomination was officially withdrawn. This comes after the CFPB sent some signals suggesting the restart of investigations. Specifically, media outlets reported on November 25, 2025, that Acting Director Vought has greenlit “many investigations” to restart. The CPFB’s principal deputy enforcement director, Michael Salemi, sent an email to enforcement staff instructing them that their managers will inform them which investigations will restart in the coming days, and attorneys should take “appropriate measures to move these investigations forward.” Salemi confirmed that “several investigations” were closed in September following a review by Vought’s staff. Salemi did not indicate which investigations would be reopened or how many the CFPB plans to reopen. The CFPB is set to restart some investigations while the CFPB’s litigation is being moved to the Department of Justice.
Former CFPB Director to Lead Policy Group
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On December 2, 2025, media outlets reported that a group of Democratic Attorneys General have hired former CFPB Director Rohit Chopra to lead the Consumer Protection and Affordability Working Group within the Democratic Attorneys General Association (“DAGA”). Former Director Chopra will oversee a team of researchers and policymakers who will aim to formulate nationwide strategies for health care, technology, and financial services. The attorneys general will then be able to choose whether to implement the recommendations in their states. The move marks another step by Democratic states to fill a purported void created by the administration under President Trump. Sean Rankin, president of the DAGA, said the group has already been working with Rohit Chopra for years, coordinating with him on enforcement strategies when he was with the CFPB and in his previous role at the Federal Trade Commission.
FTC Receives Petition for Rulemaking on Negative Option Plans
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On December 3, 2025, the FTC published a petition for rulemaking that it received from the Consumer Federation of America and the American Economic Liberties Project. The petition requests to renew the FTC’s trade regulation rulemaking concerning the use of negative option plans known as the “Click to Cancel” rule. The U.S. Court of Appeals for the Eighth Circuit vacated the rule on July 8, 2025. The petition argues that the rule “falls comfortably within the FTC’s authority to regulate across industries, and is a thoughtful, reasonable, and carefully designed response to an urgent and growing problem.” The FTC invited written comments concerning the petition, and the comment period will run for thirty days from publication in the Federal Register. The FTC indicated that it will not consider the petition’s merits until after the comment period closes. It may grant or deny the petition in whole or in part, and it may deem the petition insufficient to warrant commencement of a rulemaking proceeding.
State AGs Seek Information from Largest BNPL Providers
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On December 1, 2025, the attorneys general from California, Colorado, Connecticut, Illinois, Minnesota, North Carolina, and Wisconsin sent a joint letter to the six largest buy now, pay later (“BNPL”) providers. The letter expressed concern that the BNPL companies might not be providing their customers with appropriate protections when they return their purchase, never receive what they ordered, or experience other billing errors. The letter also noted concern that BNPL providers may not adequately assess customer’s capacity to repay. The inquiry requests information about several topics, including: (1) pricing and repayment structure; (2) procedures for addressing disputes over purchases or billing; (3) customer service practices; (4) ability to repay assessment; (5) procedures related to credit reporting; (6) delinquencies and defaults; (7) disclosures; (8) relationships and contracts with merchants; and (9) efforts to comply with the federal Truth in Lending Act.
CFPB Requires Supervisors to Take “Humility Pledge”
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On November 21, 2025, media outlets reported that the CFPB is now requiring supervisory examiners to take a new “humility pledge,” which examiners are required to read out loud to examined institutions before conducting exams. The pledge states that the agency will “avoid, where possible, duplication of supervision, where States or other regulators are already doing that job.” The CFPB described supervision under the former CFPB Director Chopra as a “weaponized arm of the CFPB” and indicated that for 2026 examinations, the CFPB will focus its supervision resources on “pressing threats to consumers, particularly service members and their families, and veterans, and in the areas that are clearly within the CFPB’s statutory authority.” The CFPB also noted that there will be greater transparency regarding the supervisory process and expectations, including advance notice of scheduled examinations. Further, examination “matters requiring attention” will focus on pattern and practice violations of law where there is substantive and identifiable consumer harm or clear violations of the disclosure requirements.
CFPB Potentially Transferring Litigation Activities to DOJ, and Bureau’s Deputy Enforcement Director Resigns.
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On November 20, 2025, media outlets reported that the CFPB plans to transfer all of its litigation activities to the Department of Justice and expects to furlough all in-house enforcement attorneys, despite a preliminary injunction that prohibits mass firings. Michael Selemi, the CFPB’s principal deputy enforcement director, announced the change during an all-hands meeting and instructed enforcement staff that more than one hundred people would be furloughed because the CFPB is going to run out of money. Salemi told employees that the enforcement team will likely be furloughed by year-end and that a few top officials may have the opportunity to work for DOJ. All open cases in the enforcement division and work by the legal division will be transferred to the DOJ. CFPB Union President Cat Farman said this decision is the “latest illegal power grab” by CFPB Acting Director Russell Vought. She also noted that enforcement attorneys are concerned that the CFPB will dismiss the thirteen cases that are currently in litigation that are now being transferred. Farman also called for Congress to impeach Vought and remove him from the agency.
On December 4, 2025, media outlets reported that the CFPB’s principal deputy enforcement director, Michael Salemi, resigned over frustrations regarding the agency’s current direction. Salemi reportedly told his team that he hoped to be able to lead an enforcement division that would continue the agency’s work despite new priorities and reduced staff. The email said that in “the last several weeks, it’s become clear to me that, if things proceed as planned, there is no path to an effective future enforcement program at the [CFPB].” His resignation comes shortly after it was reported that some investigations would restart. Salemi raised several of the same concerns that his predecessor raised when she resigned in June 2025. Salemi’s last day with the CFPB was on December 12.
CFPB Moves to Amend Student Loan Trust Settlement
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On December 2, 2025, media outlets reported that the CFPB, along with a group of student loan trusts and their main servicer, filed a motion for the court to approve an amendment to a settlement the parties reached last year. The lawsuit alleged that the trusts brought improper debt collection lawsuits. The settlement agreement required the trusts and servicer to pay a combined $2.15 million in fines, adhere to compliance terms, and distribute nearly $2.9 million to affected borrowers. Under the proposed plan filed with the court, the CFPB would keep the fines it collected, but the compliance and redress terms would largely be removed from the settlement, leaving in place only certain redress for a subset of servicemember borrowers. The investment company that manages funds that hold notes in the trusts appealed the court’s order entering the judgements to the Third Circuit in late 2024. The court filings requesting the amended settlement describe the plan as a “fair compromise” that aligns with the CFPB’s “current enforcement priorities.” The proposal to amend the settlement also argues that the investment company holding the notes could win the appeal.
FTC Takes Action Against Education Technology Provider
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On December 1, 2025, the FTC announced a proposed settlement with a provider of cloud-based educational software over allegations that the company failed to implement reasonable security measures to protect personal information. According to the FTC, the company claimed that it protects “your data like it’s our own” and that it takes “security measures—physical, electronic, and procedural—to help defend against the unauthorized access and disclosure of your information.” The complaint alleges that the company stored unencrypted student data, failed to disable former employee credentials, and lacked effective monitoring and breach-response systems, resulting in the exposure of personal information for over 10 million students. According to the FTC, back in December 2021 a hacker used the credentials of a former employee (who had departed the company three and a half years earlier) to breach the company’s databases stored on a third-party cloud provider. The complaint alleges that the data breach exposed the personal information of more than 10 million students, and the company waited months to years to notify those impacted, despite contractual requirements to notify within seventy-two hours. The Commission voted 2–0 to accept the proposed complaint and order for public comment. The proposed order prohibits misrepresentations about privacy or data security, mandates deletion of unnecessary student information, requires a comprehensive information security program and third-party assessments, and imposes detailed reporting and recordkeeping obligations.
FTC Takes Action Against Business Financing Company
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On November 17, 2025, the FTC announced that a business financing company and its CEO agreed to a permanent industry ban. The parties settled a lawsuit in which the FTC alleged that the company misrepresented its financing products and terms and prevented consumers from posting negative reviews. The complaint alleged that the company promised to secure business loans or lines of credit for small businesses with 0 percent interest and without affecting the owners’ credit scores by leveraging special relationships with lenders. However, according to the FTC, the company was actually applying for credit cards on behalf of the business owners, often at rates in excess of 0 percent. The FTC also alleged that the company advertised that it would not charge upfront fees but levied hefty charges when consumers tried to cancel. The FTC claims that the company collected over $37 million in fees from over 5,000 consumers. The final order follows a summary judgment order issued against the company in September 2025 imposing a monetary judgment of $48.2 million on the company and its CEO, with all but $250,000 suspended due to an inability to pay. The company and CEO are permanently banned from, among other things, offering business financing, debt relief, and credit repair services.
FTC Takes Action Against Multifamily Rental Property Manager
By Justin B. Hosie, Eric L. Johnson, and Kristen Yarows, Hudson Cook, LLP
On December 2, 2025, the FTC and the state of Colorado settled a case with the nation’s largest multifamily rental property manager over allegedly deceptive advertising practices and hidden rental fees. The FTC and Colorado filed a lawsuit in January 2025, alleging that the company’s practices violated the FTC Act, the Gramm-Leach-Bliley Act, and the Colorado Consumer Protection Act. The company has agreed to pay $23 million to the FTC and $1 million to the state of Colorado. The settlement agreement also requires the company to refrain from misrepresenting the total monthly rental price, prominently disclose the total monthly leasing price, and clearly and conspicuously provide all fee details before taking any payment. Chairman Andrew N. Ferguson issued a concurring statement that applauded the Commission staff’s hard work in investigating and litigating this case, and noted that the work on this case revealed that the problem persists in the rental market industry. Chairman Ferguson directed Commission staff to begin the process of proposing a rule to address unfair or deceptive fees in rental housing.
Environmental Law
EPA Requires PFAS Liability Screening for Brownfield Grant Recipients
By Michael R. Blumenthal, McGlinchey Stafford
On December 11, 2025, the U.S. Environmental Protection Agency (“EPA”) issued new guidance clarifying that recipients of pending Brownfield grants must first demonstrate they are not potentially liable under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) section 107 for perfluorooctanoic acid (“PFOA”) or perfluorooctane sulfonic acid (“PFOS”) contamination at their sites before using federal funds for assessment or cleanup. This clarification follows EPA’s final designation of PFOA and PFOS as “hazardous substances” under CERCLA.
According to an EPA FAQ webpage updated on December 5, 2025, grant recipients must now prove liability protections are in place if they intend to use Brownfield funding at sites where PFOA or PFOS contamination may be present. While designation under CERCLA does not automatically assign liability to property owners, it does impose a new threshold for grant eligibility: recipients must establish that they are not “potentially responsible parties” (“PRPs”) for per- and polyfluoroalkyl substances (“PFAS”) contamination.
To meet this requirement, grant recipients will need to comply with EPA’s updated All Appropriate Inquiries (“AAI”) rule, which now includes procedures for evaluating potential PFAS liabilities. Specifically, Phase I Environmental Site Assessments (“ESAs”) must consider “conditions indicative of releases or threatened releases” of PFOA or PFOS in order to secure CERCLA liability protections.
This clarification comes as EPA is accepting applications for $225 million in Brownfield Multipurpose, Assessment, and Cleanup Grants for FY2026, with a deadline of January 28, 2026.
Background and Legal Context
- The 2024 CERCLA rule, issued under the Biden administration, designated PFOA and PFOS—two legacy PFAS—as hazardous substances under CERCLA section 102.
- Although subject to ongoing litigation, the 2024 rule remains in effect. Notably, the current EPA leadership, including Administrator Lee Zeldin, has chosen to defend the designation in court, continuing arguments originally advanced under prior EPA leadership.
- Final briefing in the legal challenge concluded on December 5, 2025, with oral arguments scheduled for January 20, 2026, before the U.S. Court of Appeals for the D.C. Circuit.
Implications for Brownfield Stakeholders
EPA’s clarification raises significant considerations for:
- Brownfield Grant Applicants: Must confirm they are not liable under CERCLA for PFAS contamination, including through due diligence conducted under AAI protocols.
- Site Owners and Developers: Must consider whether historical uses (e.g., biosolids application) may implicate PFAS liability and trigger Phase I assessment obligations.
- Environmental Professionals: Should ensure AAI-compliant assessments incorporate the latest ASTM E1527-21 standard, which now includes provisions for PFAS analysis.
- Real Estate and Transactional Counsel: May need to advise clients on PFAS-related CERCLA defenses and the availability of funding in light of potential liability.
EPA further notes that entities identified as potentially responsible for PFAS contamination or continuing releases are ineligible for Brownfield funding. Additionally, although PFOA and PFOS were previously considered “pollutants or contaminants” under CERCLA, their designation as “hazardous substances” now imposes stricter eligibility criteria tied to liability protections.
EPA emphasizes that this CERCLA designation does not alter PFAS screening or cleanup levels at Brownfield sites. Those remain under the authority of individual states and tribal governments.
