3M reaches revised agreement in PFAS lawsuits for public water suppliers

A U.S. district judge in Charleston, S.C., has given preliminary approval to a class action settlement between 3M Co. and public water suppliers after a group of attorneys general withdrew their opposition when a number of changes were made to the deal.

U.S. District Judge Richard Gergel issued the preliminary approval on Aug. 29, a day after the attorneys general withdrew their opposition to the agreement that will have 3M pay anywhere from $10.3 billion to $12.5 billion to help mitigate the costs associated with claims that 3M contaminated water sources with PFAS chemicals.

"The proposed settlement substantially fulfills its purposes and objectives, and provides benefits to class members, without the costs, risks and delays of further litigation at the trial and appellate levels, and does not require a finding or admission of liability for 3M," Gergel wrote in his preliminary approval order.

"The negotiations culminating in the proposed settlement occurred at arm's length, were the product of sufficient investigation and discovery, and involved counsel for plaintiffs who are experienced in similar litigation. Interim class counsel believe this is a fair, reasonable and adequate resolution of Class Members' Released Claims.

The proposed settlement now will be submitted to the class members for their consideration, prior to the holding of a final fairness hearing.

The original settlement in the multi-district litigation case was reached June 22. 3M said at the time that the $10.3 billion it would pay out over the next 13 years would assist public water suppliers with PFAS treatment technologies and support mitigation efforts for eligible PWS who detect PFAS in the future.

The firm added that the agreement would resolve current and future drinking water claims by PWS related to PFOA, PFOS and all other PFAS chemicals.

But on July 26 a coalition of 22 attorneys general — covering 19 states, Puerto Rico, the District of Columbia and Commonwealth of the Northern Mariana Islands — filed a motion to block the settlement, saying it didn't adequately hold 3M responsible.

After negotiations, however, they withdrew their opposition when a number of changes were made to the agreement, though 3M refused to increase the amount it agreed to pay or the timeframe in which the funds would be paid out.

An executive committee of attorneys appointed by Gergel to lead the litigation on behalf of the public water systems hailed the settlement as a "pivotal milestone" in their efforts to ensure clean and safe drinking water for the communities affected by contamination from PFAS "forever chemicals."

They said in an Aug. 29 news release that the settlement includes a fund of up to $12.5 billion to be distributed to any public water system that has detected PFAS in one or more of its water sources. Public water systems that have not yet detected PFAS but must test for contamination are also included in the settlement class. The attorneys said allocation estimates for what public water systems can expect from the settlement can be calculated with formulas available at PFASWaterProviderSettlement.com.

"The federal court's preliminary approval of 3M Co.'s settlement with the plaintiff public water systems brings us one step closer to allocating billions of dollars towards clean drinking water for countless Americans whose lives have been disrupted by this crisis," the attorneys said in the release. "We are grateful to the dozens of firms that came together and are optimistic that the court's final decision will mirror this initial approval, bringing long-awaited relief and justice to communities in need."

They added that the settlement, which averted a trial slated to begin back in June, was reached after a five-year legal battle that involved 37.4 million pages of discovery documents and more than 160 depositions. They said this settlement with 3M and one for $1.18 billion with DuPont and spinoff companies Chemours Co. and Corteva Inc. "are just the first efforts to hold polluters responsible for fouling our public water supplies."

3M said in a statement that it is pleased the court granted preliminary approval to move forward with the settlement process. "This agreement will benefit U.S.-based public water systems nationwide that provide drinking water to a vast majority of Americans without the need for further litigation by or on behalf of public water systems," the company said.

3M is a leading supplier of fluoroelastomers and fluoropolymers with its Dyneon line of products, but the firm said it will discontinue the manufacture and use of PFAS chemicals in all of its products by the end of 2025.

New York Attorney General Letitia James, one of the leaders seeking to block the original settlement, said negotiations between the coalition and 3M brought about a revised settlement that addressed a number of issues they felt were lacking, and "substantially increase the value of the settlement for participating water systems."

Their opposition had centered on such issues as requiring eligible public water systems to waive legal claims against 3M without knowing what settlement funds they could receive, as well as provisions they said would have required water providers to assume future liability, potentially leaving taxpayers to cover the costs of damages caused by 3M's pollution.

The new settlement that received preliminary approval in the U.S. District Court for the District of South Carolina included several critical changes, James said, including:

• The uncapped indemnity in favor of 3M, which could have left water systems liable for damages well beyond their expected recovery from the settlement, is removed, significantly increasing the value of the settlement to participating water systems;
• The deadline for eligible water systems to review the settlement and determine whether to opt-out is extended from 60 to 90 days;
• The establishment of a settlement-specific website with information that will allow water systems to derive a good-faith estimate of what they may receive under the 3M settlement agreement if they participate in it, although actual settlement awards will depend on data that is not yet available; and
• Claims by states and the federal government are expressly carved out of the agreement, allowing for future action and additional settlements against 3M.

"Corporate polluters like 3M should not be able to duck responsibility for contaminating our waters with toxic 'forever chemicals' that have caused devastating health problems," James said in a news release. "I am proud to have helped secure a better deal for the communities across New York and the nation affected by this pollution."

California Attorney General Rob Bonta led a coalition of five of the attorneys general who, despite withdrawing their objection to the revised agreement, filed an amicus letter with the court expressing concerns with the settlement. Joining Bonta in filing the letter were the attorneys general of Arizona, the District of Columbia, Pennsylvania, and Wisconsin.

Specifically, they objected to the fact that 3M declined to pay more than what was set forth in the original proposed settlement, which Bonta said falls short of the amount that will be needed to pay for the PFAS contamination by 3M to U.S. drinking water supplies. The company also will not pay out the funds more quickly, sticking to a 13-year repayment schedule.

They also said a recent study by the American Water Works Association predicted that the nationwide costs for PFAS regulatory compliance will dwarf the settlement amount. It added that the costs to public water systems in California alone to investigate, test, install treatment infrastructure, and operate and maintain that equipment for decades would be far more than what 3M has agreed to pay.

Bonta said 3M did agree to modify the original proposal in critical ways, including dropping language that would try to prevent states from pursuing their own PFAS lawsuits against 3M, and that California will continue to do just that.

PFAS is an umbrella term used to classify more than 10,000 per- and polyfluoroalkyl substances that are used in a wide variety of goods. While many of the PFAS chemicals have been found to be "chemicals of low concern," a restriction proposal now under comment period in the European Union conceivably could ban all use of PFAS.

In the U.S., the Environmental Protection Agency along with individual states are in varying stages of looking to put their own regulations on PFAS materials, some of which have been linked to causing harm to both humans and the environment.