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$12.5 Billion PFAS Settlement Revised to Extend 3M Liability

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Unquantifiable future PFAS harm at issue

Charleston, SC On August 29, the District Court for the District of South Carolina preliminarily approved a revision to the $12.5 billion proposed settlement in a class action perfluoroalkyl and polyfluoroalkyl lawsuit brought by a long list of water utilities. The settlement was reached after a five-year legal battle that involved 37.4 million pages of discovery documents and more than 160 depositions. The revision is specifically designed to protect the utilities from some future liabilities.

More specifically, the changes prevent 3M Company from giving water utilities money through the settlement and then, in the future, demanding the utilities give the money back if 3M is successfully sued by other parties for drinking water-related harm.

Monster MDL; staggering settlement numbers

The Aqueous Film-Forming Foams (AFFF) Products Liability Litigation, consolidated in in the District of South Carolina, is comprised of hundreds of claims that fire-fighting foams containing PFAS and PFOAs have contaminated groundwater and water supplies throughout the United States. An earlier settlement offered by 3M Company would have capped 3M’s total current and future financial liability at $12.5 billion.

However, it also required eligible public water systems to waive their legal claims against 3M without knowing what settlement funds they could receive. The settlement also contained provisions that would have required water providers to assume future liability, potentially leaving taxpayers to cover the costs of damages caused by the pollution.

Future liability uncertain

PFAS chemicals, known as “forever chemicals,” resist degradation in the environment and accumulate in the body. They have been used in an increasing number of products, for more than seventy years, and can now be found in soil samples, ground water and water supplies in all fifty states. There are several reasons that the future liability for this contamination is difficult to estimate.

The health effects associated with exposure to PFAS include kidney and testicular cancer, thyroid disease, liver damage, immune system effects and other conditions. Many of these diseases have very long latency periods. It is especially difficult to fix future liability for effects that may not yet have become apparent. People who are well today may get sick many years into the future because they drank contaminated water.

Because PFAS and PFOA contamination of soil and groundwater is so widespread, it is possible that these toxic chemicals will continue to leach into drinking water for years to come. Municipal, state, and regional water utilities that currently show little or no evidence of contamination may do so in the future. These utilities will be responsible for covering the cost of testing and remediation into the indefinite future.

To date, the Environmental Protection Agency has identified six PFAS compounds, which it deems toxic to human beings. For those six, the agency has set maximum safe limits, which water utilities must meet. But that is six out of 14,000 toxic PFAS compounds. Scientific research continues, and when the EPA determines safe levels for any of these, municipal water authorities will have to test and remediate to meet those new standards.

For most of us, $12.5 billion seems like a lot of money. But the utilities’ potential financial liability remains unquantifiable. Even that enormous sum may not be enough as expanded clean-up efforts must continue. The unknowable future burden that utilities may face is the proverbial elephant in the room.

Of course, 3M and other manufacturers face a variation of the same problem. In addition to trying to limit their potential liability to utilities, they must also find a way to deal with the possibility that future individual plaintiffs may succeed in lawsuits against them based on latent health harms. Hence, the proposed requirement that water utilities give back settlement money if other parties are successful in suing 3M for diseases caused by their inadvertent consumption toxic chemicals.

Revised settlement – half a loaf

The revised settlement seeks to address the problem of future individual health lawsuits in a way that is beneficial to the utilities. It is an attempt to re-balance the equitable situation between the parties. The new settlement provisions do not, however, address the utilities’ issue of unquantifiable costs for future testing, remediation, and clean-up of increasingly contaminated water.

As of September 29, 2023, 3M Company has an estimated market cap or net worth of $51.48 billion. Few would suggest that the company be dissolved, its assets liquidated and that the proceeds be held in trust for future claims. But that number does help put the $12.5 billion settlement offer in perspective. A final hearing on the order is scheduled for February 2024.


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