Chemical manufacturing giant 3M has reached a tentative $10.3 billion settlement with many of the nation’s water utilities as it seeks to resolve liability over “forever chemicals” contamination.
The agreement announced Thursday afternoon would be payable over 13 years and would funnel money to cities, counties and other entities as they seek to address PFAS pollution. The deal would affect water utilities that service the “vast majority of Americans,” per the company’s own estimates — marking a major development as the Biden administration cracks down on the family of thousands of chemicals.
The settlement would address “current and future drinking water claims” brought by water utilities, including those that make up a portion of the multidistrict litigation over aqueous film-forming foam that has been pending in Charleston, S.C. That trial has been among the most anticipated legal disputes around per- and polyfluoroalkyl substances.
In a statement, 3M Chair and CEO Mike Roman lauded the agreement as another milestone for the company as it seeks to move beyond PFAS. At the end of last year, 3M announced that it would exit manufacturing the chemicals within the next two years. The chemical corporation had ceased manufacturing the two most notorious compounds years ago, as backlash over their health risks first began to play out.
“This is an important step forward for 3M, which builds on our actions that include our announced exit of PFOA and PFOS manufacturing more than 20 years ago, our more recent investments in state-of-the-art water filtration technology in our chemical manufacturing operations, and our announcement that we will exit all PFAS manufacturing by the end of 2025,” said Roman.
The health impacts associated with PFAS have only been closely studied for a handful of compounds, while more than 10,000 make up the chemical family. But experts have widely voiced concerns that all of the compounds appear persistent in the environment and many accumulate in the body. Those that have been deeply scrutinized, particularly PFOA and PFOS, are linked to kidney and liver disease, reproductive issues and cancer.
Despite its movements to escape trial, 3M asserted that the settlement is “not an admission of liability.” Up next, the agreement must be approved by a judge. If it is not, the company stated, it “is prepared to continue to defend itself in the litigation.”
Big names pay up
While the company framed the payment as “up to” $10.3 billion in its announcement, a 3M filing with the U.S. Securities and Exchange Commission notably indicates that the chemical manufacturer put its possible contribution starting at $10.5 billion and up to $12.5 billion.
That number would far exceed a similar deal announced weeks ago.
Under that tentative settlement, DuPont de Nemours Inc. and two spinoff companies, Chemours Co. and Corteva Inc., agreed in principle to a $1.19 billion deal with around 88 percent of U.S. water systems. DuPont, tied forever to its manufacturing of PFOA and contamination in Parkersburg, W.Va., shifted its PFAS work to Chemours several years ago but has been unable to escape litigation targeting the chemicals.
Chemours is meanwhile on the hook for staggering pollution in North Carolina’s Cape Fear River, with an emphasis on HFPO-DA, a compound better known as GenX.
Unlike the other deal, 3M’s agreement has high-level immediate implications due to the long-awaited trial considered a bellwether for other PFAS cases. The company was set to square off against the town of Stuart, Fla., under Judge Richard Gergel of the U.S. District Court for the District of South Carolina. But three weeks ago, Gergel, an Obama appointee, agreed to postpone the showdown as the two sides sought to come to an agreement. At the time, media reports estimated the settlement could be around $10 billion.
If the Thursday deal meets with Gergel’s approval, as well as sign-off from plaintiffs, 3M may have dodged a bullet over some 4,000 water cases. But the resolution would not address broader PFAS litigation, including personal injury and property claims.
Attorneys for Stuart have expressed gratitude for the resolution. But not everyone is so pleased.
Ken Cook, president of the Environmental Working Group, said 3M had “got off cheap” and that the company was “a disgrace” for its legacy of global contamination. Other advocacy groups and impacted communities have similarly expressed a sense that the amount is nowhere near enough to address the sprawling damage wrought by the chemicals. In the aftermath of the announcement, many also underscored that broader measures still need to be taken to address the crisis.
“Until we stop using PFAS everywhere, these toxic chemicals will continue polluting our drinking water and harming our families,” said John Rumpler, program director for Environment America’s clean water work. “Both federal and state officials must act now to stop the flow of ‘forever chemicals’ into our environment.”
Regulatory crackdown
Major legal settlements like the kind struck by 3M have become the flavor of the day as companies grow increasingly nervous in the face of a mounting regulatory crackdown that has bolstered lawsuits throughout the country.
After pledging that he would make PFAS a “top priority,” EPA Administrator Michael Regan has targeted the chemicals through a range of statutes. That includes Superfund law, with the agency announcing last summer that it would seek to regulate both PFOA and PFOS as hazardous substances, allowing regulators to recoup major cleanup expenses.
But the onslaught reaches far beyond that one move. EPA is weighing whether to target additional compounds through its Superfund powers, in addition to teasing out an escalation under waste law through the Resource Conservation and Recovery Act. Most dramatically, the agency has used the Safe Drinking Water Act to single out six compounds in systems nationwide.
That move, announced this spring, would see PFOA and PFOS regulated in drinking water at 4 parts per trillion, the lowest levels a lab can reasonably measure. Another six compounds — PFBS, PFNA, PFHxS, and GenX — would be regulated as a mixture and put through a hazard index calculation to assess their risks.
Many communities have welcomed the crackdown as long overdue. But the trend has panicked “passive receiver” industries, with water utilities particularly concerned about facing liability and spiraling costs over a problem initiated by chemical companies. That in turn has accelerated litigation, placing giants like 3M and DuPont at the center of a legal avalanche as impacted parties aim to recover billions in expenses.
And the legal landscape for those companies has turned grim. In the lead-up to the South Carolina trial, Gergel determined that jurors would be permitted to consider EPA’s rock-bottom drinking water thresholds, due to the insight they offer around health impacts.
That draft regulation, he said at the time, “speaks to EPA’s position on PFOA and PFOS toxicity and ‘provides corroborative support for the reasonableness of Plaintiff’s actions to remove PFAS from its water supply.'”
3M had vehemently fought against consideration of those levels and Gergel’s decision may have played a role in encouraging the company to strike a settlement rather than proceed with trial.
