Contaminants Compass: July 2026 Edition

Contaminants Compass is a monthly newsletter that provides updates, legal observations and actionable tips to navigate the evolving legal challenges of per- and polyfluoroalkyl substances (PFAS) and similar chemicals and products.

This edition highlights significant regulatory and litigation developments including:

• Coverage implications of Texas Attorney General’s Lululemon PFAS investigation;
• California’s Recyclability Law SB 343;
• Challenges to New Mexico’s PFAS regulation;
• Recent Chemours, DuPont and 3M PFAS settlements;
• EPA’s approval of new pesticides;
• EPA’s Sixth Unregulated Contaminant Monitoring Rule; and
• FDA’s regulation of PFAS in bottled water and denial to limit PFAS in food.

Look for new editions every month, and feel free to reach out to the McGuireWoods PFAS & Emerging Contaminants Practice Area with questions regarding PFAS issues.

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I. Insurance Coverage Implications of Texas Attorney General’s Lululemon PFAS Investigation

On April 13, 2026, Texas Attorney General Ken Paxton announced that his office had issued a civil investigative demand (“CID”) to Lululemon USA Inc. as part of an investigation into whether the company misled consumers about the safety, quality and health impacts of its products. The investigation focuses on whether Lululemon’s athletic apparel contains PFAS, or “forever chemicals,” that health-conscious customers allegedly would not expect based on the company’s wellness, sustainability and performance-focused marketing. The attorney ’general’s office also stated that it will review Lululemon’s restricted substances list, testing protocols and supply chain practices to determine whether the company’s products comply with its stated safety standards. Notably, these claims are premised on scientific studies indicating that exposure to some PFAS may be linked to harmful health effects. Lululemon publicly denied that it currently uses PFAS in its products.

This investigation into Lululemon’s marketing practices shows that PFAS litigation and enforcement have expanded beyond environmental remediation and bodily injury claims into unfair and deceptive trade practices, false advertising, consumer protection and negligent or fraudulent misrepresentation theories. Companies that market products as safe, sustainable, health-oriented, “clean,” PFAS-free or otherwise environmentally preferable may face scrutiny not only over whether PFAS are present, but also over whether their testing, supplier controls, disclosures and advertising are consistent with those claims.

PFAS are widely used, long-lasting chemicals whose components break down very slowly over time, and EPA has stated that many PFAS chemicals are found in people, animals, food products, common household goods and the environment in general because of their persistence and widespread use. In light of the prevalence of PFAS in the environment, this is a risk that could impact almost any company that sells products to consumers.

Potential Insurance Coverage Issues for PFAS Investigations

General Liability. Standard commercial general liability (CGL) policies provide coverage for “bodily injury” and “property damage” caused by an “occurrence” as well as “personal and advertising injury.” Therefore, physical harm from exposure to the harmful substances may trigger Coverage A as bodily injury caused by an occurrence — i.e., an accident or continuous exposure to the same or similar harmful conditions. In the context of a claim such as the Lululemon investigation, insurers may contest that Coverage A for bodily injury is triggered by a lawsuit seeking economic damages rather than bodily injury damages. However, given that the core allegation giving rise to these claims is that the PFAS allegedly found in Lululemon’s products are harmful and cause bodily injury to consumers, policyholders can argue that the damages alleged — even if based on economic injury — are for bodily injury. 

D&O Coverage. A regulatory demand such as the CID issued to Lululemon may trigger coverage under D&O, management liability, or E&O policies, depending on the policy language. A CID can require a company to incur substantial legal, document collection, e-discovery, consultant and internal investigation costs before any lawsuit is filed. Whether those investigation costs are covered often turns on the policy’s definition of “claim,” including civil investigative demands, subpoenas, demands for nonmonetary relief, administrative or regulatory proceedings, or investigations alleging wrongful acts. Even if the D&O policy does not contain separate coverage for investigation costs, many courts have held that subpoenas and CIDs can constitute demands for nonmonetary relief that trigger coverage. Policyholders should give prompt notice because D&O policies are typically claims-made policies, and delayed notice of a CID may jeopardize coverage for both the investigation and later related litigation or enforcement proceedings.

PFAS Exclusions. Another potential barrier has emerged in recent years with the proliferation of PFAS exclusions. As insurers became increasingly aware of the widespread litigation surrounding PFAS, many insurers introduced endorsements that exclude coverage for any claim arising out of or related to PFAS contamination. PFAS exclusions are not uniform, and the scope of the exclusion will depend on the specific language utilized in each policy. Insurers are likely to contend that the exclusion is broadly worded to exclude coverage for all PFAS-related claims under Coverage A and Coverage B, even when the underlying claims would otherwise satisfy the policy’s insuring agreements. In response, policyholders should emphasize the specific policy language used in the exclusion as well as the existence of other potentially covered (and non-excluded) causes of loss in the causal chain in arguing that the exclusion does not apply.

Policyholders should review their policies carefully for such endorsements, particularly given that PFAS exclusions have become increasingly common in renewals since approximately 2023. Policyholders should further consider whether legacy CGL policies without such exclusions may provide coverage for long-tail PFAS claims arising from bodily injuries during those prior policy periods.

Key Takeaways for Policyholders

Policyholders facing PFAS-related scrutiny should treat a subpoena, CID, demand letter or informal regulatory inquiry as a potential insurance event. Coverage may be available for investigation costs, defense costs, settlements or judgments depending on the policy language and the allegations. Prompt notice is critical, particularly under claims-made D&O, management liability, E&O, media liability and cyber policies.

Policyholders should also conduct a broad insurance review rather than focus only on current policies. PFAS claims can implicate historical occurrence-based CGL policies and excess and umbrella towers, as well as pollution legal liability policies, product liability coverage, D&O and management liability policies, media liability policies, and additional insured coverage. Historical policies may be especially important because older policies may have different pollution exclusions, no PFAS-specific exclusions and/or occurrence-based language that can respond to long-tail exposure allegations.

Finally, policyholders should preserve coverage by documenting notice, seeking insurer consent when required, resisting overbroad reservations of rights, reviewing renewal exclusions carefully and coordinating insurance strategy before responding substantively to PFAS-related regulatory or litigation demands.

II. California Recycling Law Takes Effect Oct. 4

California’s SB 343 will take effect on Oct. 4, 2026. Under the law, producers are prohibited from displaying the “chasing arrows” symbol or making other recyclability representations unless they can affirmatively demonstrate that their products satisfy specified recyclability standards. The legislation reaches beyond the traditional chasing arrows to encompass variant symbols — such as arrows in circular patterns or around a globe — that the state considers false or misleading because consumers may interpret them as indicating recyclability.

To qualify as recyclable, a product or its packaging must satisfy four core requirements: (1) recycling collection programs serving at least 60% of California’s population must accept the material; (2) large-volume sorting facilities collectively covering at least 60% of statewide recycling programs must sort the material into defined streams consistent with the Basel Convention; (3) the item must conform to specific composition and design standards that do not impair recyclability; and (4) the item must comply with restrictions on certain chemical substances. SB 343 places the responsibility for recyclability labeling on the producer. The producer of the product is also responsible for substantiating that recyclability criteria are met.

Notably for PFAS-regulated industries, SB 343’s chemical criterion expressly bars recyclability claims for products or packaging made from plastic or fiber containing intentionally added PFAS or containing PFAS at concentrations of 100 parts per million or above. Products must also be free of intentionally added chemicals identified by the FDA and the California Office of Environmental Health Hazard Assessment in regulations governing the manufacture of food service packaging. A private citizen is entitled to request substantiation on SB 343 compliance if a consumer product has a recyclability claim or chasing arrow symbol. Failure to comply with SB 343 may expose companies not only to enforcement actions by the attorney general but also to private citizen suits under California’s false advertising and unfair competition statutes.

In March 2026, several trade associations brought suit challenging SB 343, alleging that it is unconstitutionally vague and restricts commercial speech in violation of the First Amendment. On July 14, 2026, the U.S. District Court for the Southern District of California issued a preliminary injunction preventing California from enforcing SB 343 while the litigation proceeds.

III. Constitutional Challenges to New Mexico’s PFAS Rule

New Mexico’s PFAS consumer products rule is now facing legal challenges on two fronts. The New Mexico Environment Department published the final rule on May 5, 2026, implementing the state’s PFAS Protection Act, which phases out consumer products containing intentionally added PFAS and imposes labeling and reporting obligations on manufacturers. The rule requires labeling on covered products manufactured after Jan. 1, 2027, mandates reporting of detailed product information by that same date and establishes a broad prohibition on products with intentionally added PFAS by 2032 unless a currently unavoidable use designation is obtained.

The first challenge came on May 22, 2026, when Diamond Vogel, Inc., a paint manufacturer, filed a Notice of Appeal in the New Mexico Court of Appeals, contesting the rule’s labeling and fee provisions as exceeding the state board’s statutory authority and violating constitutional protections. Then, on July 1, 2026, a broad coalition of nine industry trade associations led by the American Chemistry Council filed suit in the U.S. District Court for the District of New Mexico (ACC v. Kenney, Case No. 1:26-cv-02130). The coalition’s complaint argues that the rule’s labeling mandate, which compels manufacturers to affix a pictograph of an Erlenmeyer flask stamped with the word “PFAS” on products and packaging, violates both the First Amendment and the dormant Commerce Clause. On the speech claim, plaintiffs contend the flask symbol is not a neutral factual disclosure but rather conveys an implied message of chemical danger that is scientifically unsupported as to many substances classified as PFAS. On the commerce claim, they assert the mandate impermissibly regulates manufacturers operating entirely outside New Mexico’s borders and imposes a burden on interstate commerce that far exceeds any local benefit. The plaintiffs asked the court for preliminary and permanent injunctive relief blocking enforcement of the labeling requirement.

On July 8, 2026, the U.S. Chamber of Commerce filed an amicus brief in support of the plaintiffs’ motion for a preliminary injunction. The Chamber’s brief argues that the PFAS disclosure mandate is content- and viewpoint-based compelled speech subject to strict scrutiny because the Erlenmeyer flask functions as a visual shorthand for hazardous chemicals rather than a neutral identifier. The brief further contends that the more deferential Zauderer standard for government-mandated commercial disclosures does not apply here, as the label is neither purely factual nor uncontroversial given the acknowledged scientific uncertainty about the risks posed by many PFAS substances. The brief maintains that New Mexico has failed to identify a sufficient governmental interest justifying the mandate, and that the regulation is unjustified and unduly burdensome because it sweeps across all products containing any form of PFAS — regardless of actual risk — and imposes nationwide compliance costs without a corresponding benefit to consumers.

For additional information, see the October 2025 and April 2026 Contaminants Compass editions.

IV. Chemours Recent $450 Million Settlement

On June 24, 2026, DOJ, EPA and the West Virginia Department of Environmental Protection announced a landmark $450 million settlement with The Chemours Company. The agreement resolves claims that Chemours released PFAS into the Ohio River, Cape Fear River and Delaware River from facilities in West Virginia, North Carolina and New Jersey for over a decade, in violation of the Clean Water Act, Resource Conservation and Recovery Act, Toxic Substances Control Act, and West Virginia Water Pollution Control Act. Those facilities are alleged to have discharged PFAS without required permits and in excess of permit limits, affecting the drinking water of nearby residents.

Under the consent decree, Chemours will pay a $22.5 million civil penalty and invest an additional estimated $337 million in injunctive relief measures. These include a multi-year, $90 million government-supervised program to mitigate PFAS discharges; approximately $60 million in pollution controls for surface water and air emissions at its West Virginia facility; and roughly $280 million to supply clean drinking water for over a decade to communities surrounding the West Virginia and New Jersey facilities. Notably, the settlement permits Chemours to continue manufacturing PFAS for critical commercial and military applications when substitutes are not readily available.

The proposed consent decree was lodged in the U.S. District Court for the Southern District of West Virginia and is subject to a 30-day public comment period before final court approval. The settlement does not resolve any potential liability of DuPont, which owned the facilities prior to 2015.

V. Judge Signals Intent to Support New Jersey’s $3 Billion PFAS Settlements

On June 24, 2026, U.S. District Judge Renée M. Bumb signaled her intent to approve proposed settlements worth a combined $3 billion among New Jersey, 3M and various DuPont entities, resolving the state’s claims of PFAS contamination. Judge Bumb found the agreements to be fair and reasonable, concluding that the remaining objections did not justify rejecting the deals. Before entering a final order, however, the judge asked the parties to submit supplemental briefing identifying where in the record the evidence supports New Jersey’s estimate that remediation would cost approximately $5.5 billion absent the litigation.

The settlements stem from litigation the New Jersey Department of Environmental Protection filed in 2019, alleging that DuPont discharged chemicals, including PFAS, at the Chambers Works facility in Salem County and other sites across the state. The DuPont deal, valued at $2.5 billion, includes $875 million in natural resource damages and abatement payments over 25 years, a $1.2 billion remediation funding source and a $475 million reserve to protect taxpayers if any defendant becomes insolvent. The 3M agreement provides up to $285 million with $210 million for the Chambers Works litigation and an additional $75 million to resolve current and future statewide PFAS claims through 2050.

Only two objectors remained at the hearing after the state resolved prior objections from 18 counties and several sewerage and utility authorities through stipulations that included $90 million for PFAS remediation at county-owned fire training facilities and airports and a minimum of $150 million for projects reducing PFAS in wastewater effluent. The remaining objectors argued the agreements lacked sufficient detail on the timing and allocation of payments over the 25-year disbursement period.

VI. EPA Approves Pesticides for Agricultural Use

On June 30 and July 1, 2026, EPA finalized approvals for several fluorinated pesticides for agricultural use, including three new active ingredients — trifludimoxazin, diflufenican and epyrifenacil — and expanded uses for a fourth, bifenthrin. Trifludimoxazin was registered for use on cereal grain, citrus, pome fruits, tree nuts, legumes and soybeans, while diflufenican and epyrifenacil received approvals for corn and soybeans. These pesticides contain single fluorinated carbon atoms, which most states and scientists classify as PFAS. EPA, however, applies a narrower regulatory definition that limits PFAS to compounds with two or more fluorinated carbons. Environmental groups criticized the approvals, characterizing these single-fluorinated pesticides as forever chemicals that will persist in the environment and break down into multiple smaller PFAS compounds.

EPA defended its actions, stating that it followed a comprehensive rulemaking process in 2023 when it adopted its PFAS definition, and that the exclusion of single-fluorinated-carbon molecules was grounded in scientific evidence showing they lack the persistence and bioaccumulation characteristics that define the broader PFAS class. The agency determined under FIFRA that the registered pesticides would not cause unreasonable adverse effects on human health or the environment when used in accordance with label directions.

VII. FDA Moves to Regulate PFAS in Bottled Water

The FDA has announced that it is developing a regulation to set allowable levels of certain PFAS in bottled water. This action is driven by a statutory requirement under the Federal Food, Drug, and Cosmetic Act that when EPA establishes maximum contaminant levels for a substance in public drinking water, the FDA must set corresponding standards for bottled water unless it determines the contaminant is not present. In 2024, EPA finalized drinking water limits for six PFAS compounds, with thresholds ranging from four to 10 parts per trillion, triggering the FDA’s obligation to act.

The agency has until late 2028 to finalize bottled water standards. If EPA misses that deadline, EPA’s limits will automatically apply to bottled water. However, the regulatory landscape remains uncertain because EPA proposed in May 2026 to rescind its drinking water limits for four of the six regulated PFAS, retaining only the standards for PFOA and PFOS, and the FDA has not yet clarified how this proposed rescission may affect its own rulemaking.

VIII. FDA Denies Citizen Petition to Set PFAS Limits in Food

In a letter dated June 17, 2026, the FDA denied a citizen petition filed by the Tucson Environmental Justice Task Force that requested the agency establish binding tolerances — or, alternatively, action levels — for up to 30 PFAS compounds in various foods, including produce, dairy, seafood, eggs, bread and animal feed commodities. The petition sought limits set at the method detection limit, the lowest concentration at which PFAS can be reliably measured. The FDA concluded that the petition did not supply sufficient scientific evidence to support the requested action, noting it lacked toxicological reference values for some of the cited PFAS, adequate exposure data and feasibility analyses needed to justify setting enforceable limits.

The FDA also rejected the argument that it should apply a zero-tolerance standard under the Delaney Clause, explaining that environmental contaminants such as PFAS are not regulated as food additives and therefore are not subject to a zero-tolerance framework. The agency emphasized that it retains enforcement discretion to act against any food containing PFAS at levels that may render it injurious to health, even without formal thresholds in place.

Despite the denial, the FDA stressed that PFAS in the food supply remains an agency priority. The agency outlined ongoing and planned activities, including food testing through the Total Diet Study, increased laboratory capacity, targeted surveillance of seafood and infant formula, and the development of cumulative exposure assessment methodologies. The FDA indicated that action levels for certain PFAS in specific foods may be forthcoming as more toxicological and exposure data are developed, but it emphasized that regulatory limits require a stable evidentiary record before being formalized.

IX. EPA Establishes Sixth Unregulated Contaminant Monitoring Rule

On July 1, 2026, EPA proposed the Sixth Unregulated Contaminant Monitoring Rule (UCMR 6), which would require public water systems to collect nationally representative occurrence data for 30 unregulated contaminants not currently subject to national primary drinking water regulations under the Safe Drinking Water Act. The proposed contaminants fall into four groups: seven ultrashort organofluorine compounds (including certain PFAS), three pesticide metabolites, 13 semivolatile organic compounds and seven purgeable organic compounds. Sample collection would take place from January 2028 through December 2030, with monitoring required of all large community water systems and nontransient noncommunity water systems serving more than 3,300 people, and a representative sample of smaller systems. EPA estimates the program’s total annualized national cost at approximately $33.7 million, with the agency covering analytical costs for systems serving 10,000 or fewer people.

PFAS remain a central focus of the monitoring effort. EPA’s newly developed Method 563 will be used to measure the seven ultrashort organofluorine compounds, several of which qualify as PFAS under the agency’s structural definition. The agency framed this monitoring as consistent with its long-standing priority of addressing PFAS in drinking water, dating back to the 2019 PFAS Action Plan, and the occurrence data collected under UCMR 6 could inform future regulatory determinations.

Notably, EPA declined to include microplastics in UCMR 6 despite a petition from the governors of seven states — Connecticut, Delaware, Illinois, Maryland, Michigan, New Jersey and Wisconsin. The agency cited the absence of a validated drinking water test method as the basis for exclusion, though it noted that microplastics have been added to the draft Sixth Contaminant Candidate List (CCL 6) and remain a focus of ongoing federal research under the Make America Healthy Again initiative. Public comments on the proposed UCMR 6 are due by Aug. 31, 2026, and EPA has scheduled two virtual public meetings in mid-August to discuss the proposal.

McGuireWoods supports clients as they assess and mitigate their PFAS risk, develop and apply business operational responses to changing PFAS laws and regulations at federal and state levels and defend litigation as it arises, including navigating and coordinating national scientific defenses in novel contexts. For questions, contact the authors or a member of the PFAS & Emerging Contaminants Practice Area.