A federal appeals court on Tuesday rejected an industry challenge to an Environmental Protection Agency rule that classifies two toxic “forever chemicals” as hazardous substances, clearing the way for the agency to compel polluters to pay for contamination cleanups under the Superfund law.

The unanimous three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled that the EPA acted within its authority when it designated perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous under the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as Superfund. The decision means the agency can investigate contaminated sites and force responsible parties to cover remediation costs.

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The rule, initially advanced during the Biden administration and later supported by the Trump administration, drew legal challenges from industry groups, including the U.S. Chamber of Commerce. They argued that the EPA failed to adequately consider the economic consequences of the designation, which could expose companies to billions of dollars in cleanup liability. The court, however, found that the agency had reasonably weighed the uncertainties and made a lawful decision.

“Having adequately considered and reasonably explained its decision to regulate at this initial stage even in the face of acknowledged uncertainties, EPA made a reasoned decision on the record before it,” wrote Judge Patricia Millet, an Obama appointee, in the opinion. She was joined by Trump appointees Gregory Katsas and Neomi Rao.

PFAS—short for per- and polyfluoroalkyl substances—are a large family of synthetic chemicals that have been widely used in consumer products and industrial processes. They are dubbed “forever chemicals” because they do not break down easily in the environment, persisting for hundreds or thousands of years. PFOA and PFOS are among the most extensively studied and have been linked to cancers, liver damage, and other health problems.

The Chamber of Commerce signaled it may pursue further legal options. “We respectfully disagree with today’s decision. EPA’s failure to consider costs and consequences, as required by law, produced a deeply flawed rule that is more likely to spawn unnecessary, costly litigation than to drive expeditious, effective cleanup focused on actual risk,” said Daryl Joseffer, president of the Chamber’s litigation center, in a statement. He added that the group is “currently reviewing the decision and considering options.”

Environmental and public health advocates, by contrast, celebrated the ruling as a victory for communities burdened by PFAS contamination. “For too long, industrial polluters have profited from the release of toxic PFAS while sticking taxpayers and communities with the bill when those releases need to be cleaned up. Today’s decision affirms EPA’s authority to hold those companies responsible for the harms they cause,” said Jonathan Kalmuss-Katz, a senior attorney at Earthjustice.

The ruling lands amid broader debates over federal power and environmental regulation, with courts increasingly scrutinizing agency actions. For a closer look at how judicial appointments shape such outcomes, see this analysis of the Supreme Court’s actual record. The decision also comes as the Trump administration pursues aggressive legal positions in other areas, including a citizenship order that defies a Supreme Court ruling and a $1 billion White House project testing executive power limits.

With the court’s backing, the EPA can now move forward with identifying and cleaning up sites contaminated with PFOA and PFOS, and it can seek reimbursement from companies deemed responsible. The decision is likely to have significant financial implications for industries that have used these chemicals, including manufacturers, firefighting foam producers, and waste management firms.

Legal experts say the ruling could also set a precedent for future EPA designations of other PFAS compounds, potentially expanding the scope of Superfund liability. For now, the focus remains on PFOA and PFOS, which have been the subject of extensive scientific study and regulatory attention.