For the past few years, two Georgia PFAS lawsuits have quietly worked their way through the legal system, both of which center on PFAS water contamination issues in the Northern Georgia region (the “carpet capital of the world”). In short, the lawsuits allege that the numerous carpet manufacturers in the region have for years polluted waterways and drinking water sources with PFAS, which will cost tens of millions of dollars to remediate. Little has happened of note in these cases until last week, when a Georgia federal judge suggested at hearings for motions to dismiss that a PFAS chemical manufacturer may be able to escape liability because it is too far removed in the commerce chain and from the harms alleged in the case. This seemingly small legal nuance regarding liability under the law will have enormous impacts on the future of the PFAS litigation, as it presents the possibility that the PFAS chemical manufacturers (who have thus far born the brunt of legal liability for PFAS environmental pollution claims) may in some instances be off the hook, with downstream companies and water utilities left with legal liability.

PFAS In The Carpet Capital Of The World

Dalton, Georgia sits in the northern region of the state and since the 1990s, the area has produced almost 90% of the world’s carpet. The carpet industry utilizes PFAS in many carpet applications, in particular to make carpets that are stain resistant. The waste from the carpet manufacturing facilities was historically sent by way of effluent to Dalton Utilities, which ultimately feeds into the Conasauga River, about an hour and a half north of Atlanta. The Conasauga River flows south and supplies water to numerous waterways, including the Oostanaula River, which runs through the city of Rome. Rome once used up to ten million gallons of water a day from the Oostanaula, but it stopped using the river as its main drinking water source in 2016 due to PFAS concerns.

Georgia PFAS Lawsuits

In 2019, the city of Rome filed a lawsuit in Georgia state court seeking the reimbursement to the city for costs associated with remediating PFAS in the city’s drinking water. The city alleges that due to PFAS contamination, it had to install filtration technology at the cost of half a million dollars per year, with additional costs continuing to accrue for testing. Rome brought the lawsuit against approximately fifteen carpet manufacturers in the Dalton region, as well as 3M, one of the manufacturers and suppliers of PFAS to the carpet industry. The lawsuit filed by Rome was actually the third lawsuit brought by municipalities for PFAS contamination costs stemming from the Dalton carpet industrial region. The other two lawsuits were brought by cities in Alabama, both of which utilized water from tributaries that stemmed off of the Conasauga River.

Also in 2019, a class action lawsuit was filed in Georgia state court by citizens that obtain their drinking water from Rome, including adjacent cities that purchase drinking water from Rome. The lawsuit is styled as Jarrod Johnson v. 3M, et al., 19-CV-02448JFL003. In the lawsuit, the citizens allege that carpet manufacturers and 3M contaminated their drinking water with PFAS and caused the following damages: (1) pollution of drinking water constituting a nuisance, (2) increased costs for drinking water that municipalities passed on to consumers due to the necessity of installing PFAS filtration technology, (3) remediation costs to cleanup PFAS from the drinking water supplies, and (4) an injunction request to force the named defendants from any further PFAS discharge into the water supplies. The lawsuit was removed to federal court.

It was in the federal court case of Johnson that an extremely significant ruling was signaled by the presiding judge. In a hearing on motions to dismiss last week, U.S. District Court Judge Amy Totenberg suggested that chemical suppliers such as 3M may need to be dismissed from the lawsuit because their connection to the water pollution in the case is too far removed to hold them legally responsible for damages. While she seemed to agree that the carpet manufacturers are sufficiently connected to the citizens that brought suit and owed them a duty of care, she struggled to find such a connection and relationship between 3M and the citizens. She specifically pointed to the sophistication of the carpet manufacturers as a factor that suggested to her that the manufacturers should have “…know[n] what they’re dealing with….”  The statement hints at a quasi sophisticated user type of legal argument, which traditionally can (in states that adopt the defense) absolve suppliers of liability if their purchaser knew as much or more about the potential hazards of products that were supplied. No written ruling has been issued yet, but the final judgment on this issue will be one that industry, insurers, and legal professionals all need to pay close attention to.

Implications Of The Potential Ruling On PFAS Litigation

If the judge in the federal Georgia lawsuit rules that 3M stands too far removed from the environmental pollution issues at the heart of the lawsuit, it would allow 3M to escape legal liability and have enormous ripple effects on PFAS litigation nationally. To date, 3M and DuPont have born the brunt of the billions of dollars in settlements for PFAS environmental remediation claims nationally. Increasingly, downstream commerce companies are being brought into similar lawsuits; however, a ruling that a PFAS manufacturer and supplier is not legally responsible for PFAS that it supplied to sophisticated product manufacturers will cause litigants to shift their attention more towards product manufacturers when they seek remediation costs and monetary damages for PFAS pollution. The billions of dollars that PFAS manufacturers have spent thus far defending and settling PFAS contamination lawsuits will rapidly find itself spreading to companies, such as the Dalton area carpet manufacturers, that utilized PFAS in a consumer product and that emitted PFAS waste into the environment.

The implications for companies that have used PFAS in manufacturing processes are enormous. Not only are these companies rapidly becoming the targets of state level EPA enforcement action for PFAS pollution issues, but the companies will now also find themselves embroiled in costly civil litigation. We have previously predicted that downstream commerce companies will face this reality very soon, most recently in the context of lawsuits in Maine focusing on the paper industry.

Conclusion

It is of the utmost importance that businesses along the whole supply chain evaluate their PFAS risk. Public health and environmental groups urge legislators to regulate these compounds at an ever-increasing pace. Similarly, state-level EPA enforcement action is increasing at a several-fold rate every year. Companies that did not manufacture PFAS, but merely utilized PFAS in their manufacturing processes, are therefore becoming targets of costly enforcement actions at rates that continue to multiply year over year. Lawsuits are also filed monthly by citizens or municipalities against companies that are increasingly not PFAS chemical manufacturers.

Conducting regular self-audits for possible exposure to PFAS risk and potential regulatory violations can result in long-term savings for companies and should be commonplace in their own risk assessment.