For the past three years, we have put forth the prediction that the PFAS litigation would evolve by expanding beyond lawsuits against PFAS manufacturers for personal injuries to lawsuits against manufacturing companies that utilize PFAS as a component of their products. This “next wave” of PFAS product liability cases would significantly impact business interests at an incredible financial magnitude and puts at risk corporate finances at levels that could cause significant business interruption. A signal that this “next wave” of products liability litigation may be here came late last week with the announcement that a product manufacturer settled a group of pending PFAS lawsuits – some of the damages going to environmental cleanup, but some of the damages going towards settlement with individuals for personal injury. This is an extremely significant PFAS development that deserves closer attention.

What Are PFAS and Why Are They a Concern?

Per- and poly-fluoroalkyl substances (“PFAS”) are a class of over 7,000 manmade compounds. Chemists at 3M and Dupont developed the initial PFAS chemicals by accident in the 1930s when researching carbon-based chemical reactions. During one such experiment, an unusual coating remained in the testing chamber, which upon further testing was completely resistant to any methods designed to break apart the atoms within the chemical. The material also had the incredible ability to repel oil and water. Dupont later called this substance PFOA (perfluorooctanoic acid), the first PFAS ever invented. After World War II, Dupont commercialized PFOA into the revolutionary product that the company branded “Teflon.”

Only a short while later, 3M invented its own PFAS chemical – perfluorooctane sulfonate (PFOS), which they also commercialized and branded “Scotchgard.”  Within a short period of time, various PFAS chemicals were used in hundreds of products – today, it numbers in the thousands.

The same physical characteristics that make PFAS useful in a plethora of commercial applications, though, also make them highly persistent and mobile in the environment and the human body – hence the nickname, “forever chemicals.” While the science is still developing regarding the extent of possible effects on human health, initial research has shown that PFOA and PFOS are capable of causing certain types of cancer, liver and kidney issues, immunological problems, and reproductive and developmental harm.

PFAS Litigation Landscape To Date

Thus far, the PFAS litigation has centered on lawsuits filed against PFAS manufacturers (primarily, Dupont and 3M) for environmental cleanup and remediation, with some lawsuits against these companies for personal injury claims. The settlements and damages awarded in these cases have been eye-opening to many, but few have considered that similar damages could ever be awarded to downstream companies that simply use PFAS in their products.

In 2010, Minnesota brought the first PFAS pollution claim against 3M for negligently discharging PFAS used in the manufacture of Scotchgard into sources of drinking water. The lawsuit resolved in 2018 for $850 million, which the state used to fund drinking water and water sustainability projects in the areas affected by contamination. Several states have since followed suit, including Michigan, whose Attorney General sued 17 companies that manufactured PFAS in January 2020 alleging causes of action under the Natural Resources and Environmental Protection Act, the Michigan Fraudulent Transfer Act, and Michigan’s laws of negligence, trespass, public nuisance, and unjust enrichment. This case will likely take years to resolve, but will shape the future of PFAS litigation, especially since the lawsuit involves a much broader list of defendants than the Minnesota case. The below chart shows the amounts of reported environmental pollution cases related to PFAS:

On the personal injury front, the most well-known personal injury PFAS lawsuit (featured in the blockbuster film Dark Waters) was brought by Attorney Rob Bilott against DuPont on behalf of citizens in Parkersburg, West Virginia. Ultimately, the case settled for $670 million in 2017. What is most notable about the lawsuit, however, is the precedent it set when the court permitted (and the parties agreed to) the convening of a three person independent science panel (the so-called C8 Science Panel, C8 being another name for PFOA) to investigate the potential links between PFOA exposure and the effects on human health.

The C8 science panel concluded that there were probable links between PFOA exposure and the development of kidney and testicular cancer, ulcerative colitis, thyroid disease, pregnancy-induced hypertension, and high cholesterol. The science panel and resulting medical monitoring agreement for the 70,000 citizens that participated in the lawsuit cost DuPont over $100 million in this case.

Shortly after the C8 science panel findings, Attorney Bilott and Dupont began litigating each person’s case one by one in West Virginia. Three cases went to verdict, each resulting in a plaintiffs’ verdict: (1) $1.6 million compensatory reward for a kidney cancer plaintiff; (2) $5.1 million compensatory and $500,000 punitive award to a testicular cancer plaintiff; and (3) $2.1 million compensatory and $10.5 million punitive reward for a testicular cancer plaintiff. It was shortly after the third verdict that Dupont settled all of the pending claims in the class action for the $670 million sum. Since then, two other cases went to verdict against Dupont in Ohio – one was a hung jury and will be retried, the second resulted in a $50 million award to a testicular cancer plaintiff.

In addition, a Multi District Litigation (MDL) was set up in South Carolina for claims of environmental pollution and personal injury related to aqueous film forming foam (AFFF). While the MDL does involve both Dupont and 3M, it also involves several manufacturers of AFFF that used PFAS as a component of their AFFF. It is from this docket that a recent settlement may signal the beginning of the next wave of PFAS personal injury lawsuits.

The Johnson Controls Settlement

For several years, the AFFF MDL has steadily moved along through various phases of discovery, yet no settlements were agreed to among parties until late last week for one group of plaintiffs that alleged that AFFF had contaminated their drinking water. The manufacturer of the AFFF, Tyco Fire Products, is a subsidiary of Johnson Controls. The company agreed to pay $17.5 million to settle the claims brought by approximately 300 home owners. $15 million of the proposed settlement (it still needs to be approved by the court) is allocated for property damage claims (i.e. – environmental cleanup); however, $2.5 million will go to a small subset of plaintiffs that also alleged personal injury, including kidney and testicular cancer.

While this resolves only a small group of the pending PFAS cases on the AFFF MDL, the settlement is not only significant because it is the first settlement arising out of the MDL, but also because it is the first time that a settlement has taken place for a PFAS personal injury lawsuit with a company that used PFAS as a component of its consumer product. The targeting of the AFFF product should not surprise anyone, as it is a product that, by its nature, has the potential for the highest dose of exposure to individuals. However, the settlement shows that companies are sufficiently concerned about PFAS product liability lawsuits that they are willing to resolve the cases without going to trial. This will embolden plaintiffs’ attorneys, who will seek other non-PFAS manufacturing companies to target for PFAS product liability lawsuits.

While this may seem farfetched, one need only look to the evolution of the asbestos litigation to see that plaintiffs’ attorneys will seek to hold liable an ever-expanding pool of manufacturing companies in tort cases that involve chemicals or substances that are ubiquitous and alleged to be harmful to human health.

Conclusion

Companies that manufacture products and that utilize PFAS in some aspect of the manufacturing process or the end product must heed the news of the AFF settlement and properly plan now to avoid significant and costly PFAS product liability lawsuits that we predict will come. Full compliance audits are a crucial first step in the process, with consideration for finding non-PFAS substitutes as an option.  Even companies without direct use or knowledge of PFAS use in products should consider a review of supplier materials, as those materials may have PFAS as a component, which could some day subject the company to legal liability issues