"Forever" chemicals are proving to be extremely costly to the companies that produced them.
3M (MMM) and Dupont (DD) have agreed to pay more than $15 billion to settle claims that PFAS chemicals, or per- and polyfluoroalkyl substances, caused harm. The numbers could get a lot higher before it’s all over, according to legal experts.
"We should anticipate more litigation," said Cornell Law School professor Alexandra Lahav.
Thousands of plaintiffs from individuals to municipalities and states have already alleged these chemicals associated with cancers and other serious medical conditions contaminated air, water, and soil across the globe.
Some experts, in fact, say there is a chance that the "forever chemicals" could eventually compete with the largest-ever legal multi-case settlement in US history. That came in 1998 when the four largest US cigarette manufacturers, known collectively as "Big Tobacco," agreed to pay more than $206 billion to all 50 states.
Analysts at Capstone anticipate that PFAS claims could cost 3M alone another $30 billion.
"There is no doubt that PFAS claims will trump tobacco," said Scott M. Seaman, partner at Hinshaw & Culbertson LLP.
But Lahav and other legal experts say it’s hard, if not impossible, to accurately assess the risk because PFAS claims are still in their infancy and riddled with unknowns.
For one, they say, there’s no perfect analog for PFAS because of how difficult it is to prove exposure led to a particular disease due to the prevalence of the chemicals in everyday products that consumers use as well as in their environment.
The substances are dubbed "forever chemicals" for their inability or near inability to decompose and have been used for decades to fortify products from cookware to fabrics. The chemicals have been detected in the blood of nearly every American and have also been detected in marine and land animals.
Neither the tobacco cases, a long-running series of cases alleging harm from asbestos, nor major environmental cases — like the $20 billion BP (BP) Gulf of Mexico oil spill settlement in 2015 — are great proxies.
That's because fewer people, and fewer places, were exposed to cigarettes, asbestos, or an oil spill.
"The case for [environmental] liability is pretty strong," Lahav said. "I think the problem with these ‘forever chemicals’ is that they are bio-permanent and so the abatement is very, very expensive. And then you have potential personal injury claims as well, that basically don't have a sunset so could happen at any time."
'The first season in a long-running show'
As of August 2022, more than 6,400 cases alleging harm caused by PFAS had been filed in federal court. A majority of cases targeted Teflon manufacturer DuPont, though 3M has since emerged as a primary target. Other defendants like grocery chain Kroger (KR) and sportswear cooperative REI also are caught up in the litigation.
One early sign of costs to come for major PFAS targets like 3M became evident on Tuesday when a federal judge in South Carolina tentatively approved the company’s $12.5 billion settlement to put to bed claims consolidated into a multidistrict litigation from 19 public water suppliers and 22 states.
The multi-case agreement resolves claims concerning a fire-repelling PFAS called aqueous film forming foam, or AFFF, that polluted public drinking water sources. In 2018, 3M reached an $850 million settlement with Minnesota’s attorney general over groundwater contamination.
"The [multidistrict litigation] is the first season in a long-running show," Scott Faber, senior vice president for government affairs for The Environmental Working Group, which advocates for reductions in PFAS contamination, told Yahoo Finance.
Faber's organization updated its PFAS contamination map in August to include the US Environmental Protection Agency's 328 newly confirmed PFAS water contamination sites. In the US there are now 3,186 confirmed contamination locations across 50 states and the District of Columbia.
"It's bad news, and it's only going to get worse," Faber said, explaining that some of the communities that tested positive for PFAS have drinking water that serves hundreds of thousands of people.
Fresno, California, which provides water to more than 500,000 people, he said, detected nine different PFAS chemicals in the city's finished tap water at 194.3 parts per trillion.
In March, the EPA proposed a nationwide PFAS drinking water limit of four parts per trillion, along with mandatory and public reporting of PFAS levels. The agency expects to finalize any changes by the end of the year.
Another big "forever chemicals" settlement came in June when PFAS manufacturers DuPont de Nemours, Chemours Company, and Corteva ("DuPont") together announced a $1.2 billion settlement with a group of US water suppliers.
The funds are to be used for the remediation of aquifers. In 2017, DuPont and Chemours, which DuPont spun off, agreed to a $617 million settlement to resolve 3,550 cases. In 2021, DuPont reached an $83 million settlement to resolve about 100 personal injury claims and also established a $4 billion cost-sharing agreement with Chemours and former subsidiary Coteva to manage future claims.
'It's hard to come up with a number'
There is plenty of room for overall case numbers to swell. In 3M’s latest settlement, the states and the federal government retained a right to sue 3M if they discover future PFAS harms. Plus other PFAS chemicals PFOA and PFOS are additional targets of litigation.
Among the PFAS cases, water supply and land contamination are the easiest to handicap because damages are tied to the cost of removing the chemicals, University of Pennsylvania law professor Tom Baker said. Estimating the cost of claims for illness or disease, he said, is far more elusive.
That unpredictability is further complicated by scant scientific evidence proving exactly how PFAS leads to disease and the challenge of environmental forensics to link a particular PFAS exposure to bodily harm.
"For bodily injury, I feel like we're still early in that," Baker said. "It seems like there's just too many variables to come up with a number. There's just no way of knowing. It’s hard to come up with a number."
A series of bellwether trials that are meant to test how juries will react to personal injury and other PFAS claims, and the evidence to support them, are set to move forward starting in 2024.
Studies suggest PFAS exposure is associated with increased risk for kidney and testicular cancer, fertility complications, pregnancy-induced hypertension/preeclampsia, fetal and child development changes, liver damage, thyroid disease, asthma, heightened cholesterol, and immune system changes, according to the Agency for Toxic Substances and Disease Registry (ATSDR).
"As you get deeper into PFAS you realize the number of potential parties is quite large," Faber said.
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