Earlier this week, the NJ Senate and General Assembly passed the “Protecting Against Forever Chemicals Act” (the “PAFC Act”), following other state legislatures seeking to limit or eliminate the proliferation of forever chemicals in various products sold in the State of New Jersey. A copy of the FAFC Act can be found here https://www.njleg.state.nj.us/bill-search/2024/S1042/bill-text?f=S1500&n=1042_I1 The PAFC Act has been delivered to Governor Murphy who is expected to sign it in the next few days.
Commonly referred to as PFAS or PFOS (standing for perfluoroalkyl and polyfluoroalkyl substances) are man-made compounds that have multiple flouring atoms bonded to a chain of carbon atoms. The substances are often referred to as “forever chemicals” as the bonds between the carbon and fluorine atoms are extremely strong and very difficult to break.
Due to impacts of PFAS and PFOS on waste streams, water, soil and the air, various studies have shown, and the New Jersey legislative history indicates that these forever chemicals bio accumulate in human blood and do not leave our bodies resulting in PFAS having been detected in 98% of humans who have been tested for this substance.
The PAFC Act focuses on the following types of products:
– carpet
– cookware
– cosmetics
– fabric treatments; and
– food packaging
and bans for sale, and the making of an offer to sell and distribute any these products that contain PFAS/PFOS, 2 years from the effective date of the statute – meaning by 2028. The Act also restricts manufacturers and distributors from adding PFAS to consumer products other than in di minimis quantities. Yes, you read that correctly – the PAFC Act BANS the above products from being sold in New Jersey if they contain PFAS/PFOS!
Products are defined to include not only the item manufactured, assembled, packaged or otherwise prepared for sale to consumers, but also includes personal, residential as well as commercial and industrial uses and restricts the addition of PFAS into these products.
Consumer Products do NOT include drugs, dietary supplements, medical devices, cosmetics covered by the Federal Food, Drug and Cosmetics Act, medical equipment, products regulated under the Federal Insecticide, Fungicide and Rodenticide Act, and certain products made with fluoropolymers.
Where the Division of Consumer Affairs (DCA) finds a person has violated the PAFC Act, the PAFC Act provides DCA with broad enforcement powers including bringing a civil action, levying a civil penalty, bringing an action for a penalty, and directing the manufacturer to cease offering the product for sale. The PAFC Act allows for civil penalties of between $1,000 per day up to $25,000 per day depending on the violation.
The Department of Environmental Protection (DEP) is also directed to create and implement a source reduction program within one (1) year from the effective date of the PAFC Act focusing on air, water, soil and bio-solids and to begin research and information sharing on the above PFAS levels within NJ’s air, water, soil, and bio-solids and to report and publish such findings yearly beginning in year 2 from the effective date of the PAFC Act. These mandates have been funded from the General Fund to the tune of $4.5M.
Forever Thoughts: As the Federal government continues its significant regulatory scale back, in particular at the EPA on many environmental issues, including PFAS, various states like New Jersey have taken up the mantle and continue to pass ever stronger regulations focusing on PFAS in the air, water, soil and in consumer products. While some might say this is a “blue state” or a “red state” thing, in the PFAS arena both red and blue states remain very active and continue to focus efforts to limit PFAS’ and PFOS’ impact on their citizens by creating restrictions on adding PFAS to products like New Jersey’s PAFC Act, to seeking to force various manufacturers of PFAS to clean up and test for various levels of PFAS and PFOS impacts. Some commentators have even labeled forever chemicals and their trapping and eradication and removal from human blood as the “asbestos like” issue of the 2020s and beyond.
Duane Morris has an active Energy and Environmental Team to help organizations and individuals plan, respond to, and execute on your risk mitigation planning and initiatives. For more information, please contact Brad A. Molotsky, Alexander Judd, Sheila Rafferty-Wiggins, Jeff Hamera, Robert Montejo, or the attorney in the firm with whom you are regularly in contact.
EPA’s “Compliance First” Directive Creates Pathway for Preemption of Citizen Suits
On December 5, 2025, the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance (OECA) published an internal memorandum formally adopting a new “compliance first” enforcement approach for all OECA staff. The memorandum directs EPA personnel to prioritize compliance and the timely resolution of matters rather than engage in protracted investigations and disputes. Among the various directives contained in the memorandum is language specifically targeting “citizen suit litigation” or lawsuits initiated by private parties against potentially responsible parties for violations of environmental statutes. These private causes of action are established by federal statutes such as the Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, and Comprehensive Environmental Response, Compensation, and Liability Act, as well as state statutes such as New Jersey’s Environmental Rights Act.
In order to initiate suit under these statutes, the private party must first send to the responsible party a Notice of Intent to Sue, which, in most instances, provides the responsible party 60 days to become compliant or otherwise be faced with an enforcement lawsuit. Citizen suits can be barred if the government is “diligently prosecuting” the alleged violation, usually meaning the EPA has started its own case, judicial or administrative, for those specific issues.
The EPA’s new memorandum stipulates that EPA decision making “must consider stakeholder impacts” and that EPA “must act swiftly to limit actions from third parties who, through citizen suit litigation, unfairly impact policy through abusive litigation tactics.” Due to the preclusive nature of agency enforcement actions, industry professionals are reading this language to suggest that potentially responsible parties who receive notices of intent to sue from third party citizens should approach the administration to negotiate a deal thus preventing any subsequent filing of a legal action based on the notice of intent.
This reading dovetails with the language of the “compliance first” memorandum which offers various strategies to achieve early resolution of violations. Although EPA has long held that “compliance first” is the approach of the agency, the memorandum offers specific guidance to agency employees on how to better foster compliance first initiatives. Primarily, the memorandum encourages staff to leverage compliance assistance tools such as proactive outreach and voluntary self-compliance measures like self-audits and self-reporting. This initiative focuses on the early identification of potential violations by responsible parties rather than a reactionary approach once EPA has itself identified a potential violation. The memorandum additionally directs employees to coordinate with state partners to ensure consistency in enforcement activities and to foster channels of communication with all interested parties to create clarity with respect to required compliance. Historically, regulated entities have raised concerns regarding interpretation and application of environmental statutes. This memorandum attempts to remedy such inconsistencies through a “best reading” policy wherein EPA will base all findings of violation upon a clear and unambiguous reading of the relevant statute and regulation. In emphasizing these policies, the memorandum rejects traditional enforcement postures that employ lengthy negotiations or broad remedies in favor of early engagement and voluntary correction to achieve faster and more effective environmental outcomes.
Notably, the author of the memorandum, Acting Assistant Administrator of OECA, Craig Pritzlaff, had worked on similar initiatives while employed at the Texas Commission on Environmental Quality (TCEQ) as Director of the Office of Compliance and Enforcement. In 2020 TCEQ initiated a temporary “Find It and Fix It” program to facilitate air quality compliance for companies operating in the Permian Basin. The Find It and Fix It program allowed the TCEQ to exercise enforcement discretion to potentially responsible parties who voluntarily reported and timely addressed non-compliance with air quality and air permitting requirements. The Find It and Fix It program was a more targeted version of Texas’ preexisting Audit Act which is a statutory framework providing responsible parties immunity from administrative and civil enforcement penalties under any state environmental, health, and safety requirement if the participant meets the requirements of the Audit Act which include, similar to EPA’s memorandum, voluntary self-auditing and disclosure of environmental violations. The Audit Act, which has been in effect since 1995, has been described by proponents as a beneficial tool leading to the disclosure and remediation of what might otherwise be undetected environment issues. Conversely, detractors argue the Audit Act provides a get-out-of-jail-free card to violators by way of the limited immunity provided by the Act.
While the full effect of EPA’s new agency direction has yet to be felt, entities currently subject to enforcement and those anticipating new enforcement cases may wish to reevaluate how they approach EPA. Entities already in compliance with or unsure of their compliance status with applicable environmental laws may benefit from approaching EPA to discuss whether their current practices remain in compliance with such laws under EPA’s new “best reading” policy and subsequently self-report if applicable. Similarly, entities with pending enforcement cases or those with upcoming compliance deadlines, may seek to initiate contact with EPA in order to discuss early case resolution or otherwise attempt to more expediently resolve pending violations. For further insights into the regulatory impacts of this policy shift or assistance responding to a Notice of Intent Sue contact the environmental attorneys at Duane Morris LLP.
Data Centers – Take Aways from Episode 1 of Our What’s Watt Series
I had the pleasure of hosting our inaugural kick off webinar entitled “What’s Watt – Major Trends in Data Centers and Digital Infrastructure” yesterday. We will be hosting a series of discussions during 2026 focusing on the incredible evolution and proliferation of data centers in the US and beyond, and the unique issues and opportunities that they are.
I was joined yesterday by two fabulous panelists: #Jeffrey Ginsberg, Managing Director at #DigitalBridge and #Robert Montejo, Partner, #Duane Morris who focuses his practice in the data center arena.
Our discussion focused around defining where primary markets and secondary markets in the US are located, what rents and vacancy rates currently exist, what the drivers of development have been and currently are, and what the outlook for 2026 is from our panelists’ perspective.
Primary and Secondary Markets – Historically, the primary market areas for data center development have been Northern California (3,500 MW), Phoenix (680 MW), Chicago (690 MW), Northern Virginia (3,450 MW), Atlanta (1,270 MW) and Dallas (860 MW). Secondary markets have developed in Los Angeles, Hillsboro, Oregon, Salt Lake City, Denver, Austin, Houston, Minneapolis, Boston and the New York/Northern NJ/Connecticut markets.
Rental Rates; Vacancy Rates – Currently, but expanding daily, the primary markets accounted for approximately 8,160 Mega Watts (MW) in 2025, up 17.6% from the second half of 2024. Vacancy rates in these primary markets are under 2% with pricing of $250-$500 per kilowatt of power provided. 1 Note, these are NOT really real estate prices, rather, pricing is based on the amount of power one is able to provide to the data center, with larger scale developments of over 10 MW getting rental premiums of over 15% above the rates noted above.
By way of example of the increased pace of development, Northern Virginia saw an increase of 80% of its capacity in 2025 with over 2,000 MW coming online in 2025, together with another 538 MW currently under construction with a 2026 delivery date. Construction is estimated at approximately 5,300 MW in the primary markets, a bit down from 2024 construction.
As one would expect, the data center electric load usage has tripled over the last ten years and this usage is estimated to triple again by 2028 according to the US Department of Energy Lawrence Berkeley National Labs.
Historically, the initial growth in datacenters from 2016 through 2021 was driven by the desire/need for cloud computing facilities that were a bit geographically driven with facilities being on the smaller side. Given the relatively recent emergence of Artificial Intelligence, the location and sizing of data center deals has shifted radically to much larger, bigger, more intensive buildings and projects, with more and more over 100 MW hyper-scalers becoming more the rule than the exception.
Key Concerns/Risk: When asked about key concerns, Jeff and Rob indicated that power availability/grid capacity to deliver necessary power to run their operations, capital (given the immense cost of building some of these buildings – e.g., a 1 Giga Watt development potentially costing over $18 Billion to design, build and open) and NIMBYism were the top 3 on their list, followed by water for coolant, city and county desire to accommodate the use and local utility capability to delivery transmission lines when they say they will, being the next tier of concerns. States have begun to respond to citizen concerns about datacenters creating increased water and electric costs and are beginning to consider direct taxation via feed in tariffs on the data center users, requiring users to create their own power on site or requiring them to feed excess power back into the grid. Jeff reminded the audience that having a signed lease with an off taker/user is table stakes for these transactions given the immense size of the overall deal and that often the owners form joint ventures to de-risk their piece of the transaction.
Utilities: We discussed that while #Small Modular Nuclear Reactors (SMRs) are getting a lot of press, for the most part, current development of data centers have not utilized this technology yet. Most data centers are relying on a natural gas-powered energy source which is matched with a solar or wind renewable source with battery storage enabling the facility to have a redundant source of power, some of which can be put back on the regional grid if needed.
Locational Support or NIMBY: Various states and municipalities are becoming more anti-data center in their approach to resource management, permits and consumer costs, and, as such, it behooves the developers to find a way to stay on top of these shifts in desires (e.g., construction and permanent jobs vs. potential drain on resources and cost increases to other consumers). Others, like the federal government who just announced a $50B transaction to provide data centers for the federal government continue to seek ways to expand their involvement in the data center arena.
If this topic is of interest to you, please look for future datacenter discussions in 2026 where we will be focusing attention on financing for data centers – who is lending, where and what are the constraints; Technology that is going into datacenters – switchgear, Indoor Air Quality sensors, cooling devices that are avoiding water usage, etc.; Conversion of existing corporate data centers into newer facilities providing more capabilities; Private Equity Players in the space and what they are doing and looking for by way of returns; Hyper Scalers – who are they and do they own, lease, do both and why.
If you have additional topics you would like to see us explore, feel free to drop me a note at bamolotsky@duanemorris.com and we would be happy to add it to our growing list of things folks are asking for information about.
Duane Morris has a robust industry facing Energy and Environmental Group focused on incentives, regulatory, permitting, financing and development of energy projects and data center projects internationally including renewables, solar, wind, geothermal and power purchase agreements. The data center team has been working in the space for over 9 years on millions of SF on various deals, financings, developments and incentive arrangements. If you have any questions or follow ups, please do not hesitate to contact Brad A. Molotsky, Robert Montejo, Veronica Law, Ben Warden, Brad Thompson, Phil Cha, Shelton Vaughan or the lawyer in the firm whom you normally deal with on other matters.
- Note as there are 1,000 kilo watts in a mega watt (MW), if the facility was 10 MW, this would equal 10,000 kilo watts x on the lower end – $250/kw = $2,500,000. Using some rough math, the 10 MW datacenter would be considered rather modest and contain approximately 4,000 racks in such a facility. ↩︎