Washington, D.C. (July 10, 2023) – Recently, the New Jersey Department of Environmental Protection (DEP) and Solvay Specialty Polymers USA LLC reached a $393 million settlement of claims that releases of per- or polyfluorinated alkyl substances (PFAS or so called "forever chemicals") from Solvay's manufacturing plant allegedly contaminated local drinking water supplies. Even more significantly, 3M Company and a number of water suppliers entered into a $10.6- to $12.5 billion settlement to resolve current and future claims by municipal drinking water authorities that PFAS chemicals manufactured by 3M contaminated drinking water and required remediation. The Solvay settlement is the largest remediation of any single site in New Jersey. Similarly, the 3M matter is the largest drinking water supplier settlement in the United States. These and other recent PFAS cases bring to mind one of the favorite phrases of the late Senator Everett Dirksen (minority leader in the Senate during the 1950s and 1960s), "a billion here, a billion there, after a while it adds up to 'real money.'" While PFAS settlement costs are still lower than the U.S. budget (and much lower than the deficit), the magnitude of legal risk requires close attention.
Solvay's case in New Jersey stems from a 2019 directive from the New Jersey DEP's ordering companies – including Solvay – to remedy damage caused by PFAS contamination. After Solvay failed in DEP's view to perform adequately, the state initiated legal action. The company suffered further legal challenges: first, when the New Jersey Appellate Division denied Solvay the ability to enter other businesses' properties to show they shared responsibility for an area's PFAS contamination, and second, when an appellate panel ruled that Solvay could not avoid direct oversight of its clean-up by the state. Ultimately, the settlement directs Solvay to pay for addressing contamination in areas for which it disputes responsibility, further highlighting the difficulties defendants can face in such cases.
3M's settlement arose in response to lawsuits by hundreds of municipalities and public water providers nationwide. The plaintiffs argued that PFAS chemicals manufactured by 3M contaminated drinking water supplies. By agreeing to the record settlement, 3M and the public water providers resolved all current and future claims relating to PFOA, PFOS, and all other PFAS. Unlike Solvay's case, which involves a lump sum payment, 3M's settlement stipulates that the funds will be paid over 13 years. Still, the sizeable settlement does not resolve all of 3M's exposure to PFAS litigation, as personal injury and property damage suits by individuals as well as suits by states for damage to natural resources, remain outside the scope of this agreement.
Both settlements are pending court approval, and neither company admits liability. Nevertheless, the settlement funds in both cases are primarily intended to fund public water authorities' efforts to address PFAS contamination. As described in a 2023 working paper by this alert's authors, PFAS litigation has increasingly broadened to target not just chemical manufacturers, but also downstream product manufacturers that used or disposed of PFAS in their production process or allegedly dispersed it through their products. PFAS litigation continues to grow in terms of the number of lawsuits, associated costs, and the specific PFAS chemicals involved. Regardless of where a business falls in the supply chain, if PFAS is in the picture, these recent cases are a reminder that PFAS litigation is a reason for concern.
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