BREAKING: (will be) 4th Biggest settlement - mass tort deals ever; 3M Co. struck a tentative settlement US$10 billion over water pollution
3M Co. struck a tentative settlement of at least $10 billion over water pollution claims tied to “forever chemicals,” according to people familiar with the proposed accord, the largest PFAS pact in the US and one of the biggest mass tort deals ever. According to Abel & Annes PC, if 3M pay US$10 billion, will be 4th biggest settlement in the US ([1] The Tobacco Master Settlement Agreement settlement paid by Altria Group, Inc — previously known as Philip Morris Companies, Inc. worth US$206 billion; [2] BP Gulf of Mexico Oil Spill — $20 Billion; [3] Volkswagen Emissions Scandal — $14.7 Billion — and 3M settlement US$10 billion bigger than 5th biggest settlement - General Motors Auto Defect Case — $4.9 Billion)
3M, the No. 1 maker of per-and polyfluoroalkyl substances, is weighing the deal to head off its first federal trial over the waterproofing agent, set to start June 5 in Charleston, South Carolina, said the people, who asked not to be named discussing the matter because it is private. The judge in Charleston is overseeing the consolidation of about 4,000 PFAS-linked lawsuits.
On August 25th, 2022, a 3M website posted “A new port for 3M helps reduce shipping time to customers” about a new shipping site in Charleston, South Carolina.
PFAS have been used for decades in products ranging from nonstick pans to cosmetics, but they don’t break down naturally and can settle in soil, water or human bodies.
Stuart, Florida, the plaintiff in the trial, is suing 3M over a PFAS-containing foam used by firefighting crews across the US to suppress fuel fires. The city claims 3M failed to warn of PFAS’s risks and designed defective products. A verdict for Stuart could help determine what 3M must pay to settle other cases.
Lawyers for Stuart are seeking $105 million to cover the cost of removing PFAS and as much as $500 million in punitive damages, court filings show.
Financial research firm CreditSights estimates that 3M could ultimately be on the hook for nationwide PFAS cleanup costs of up to $142.7 billion. That’s almost triple the company’s $53 billion market capitalization, and that’s before any personal injury claims and other lawsuits.
US District Judge Richard Gergel, who’s overseeing the Stuart case and thousand of others, said at a 2019 hearing that the litigation poses an “existential threat” to 3M and other companies that manufactured PFAS, like DuPont de Nemours Inc., its spinoff Chemours Co., and Chemguard Inc. Gergel severed DuPont from the Stuart case, leaving 3M as the only defendant.
“They may not be able to settle their way out of this,” said Chuck Tatelbaum, a bankruptcy lawyer who has dealt with mass-tort cases. “Bankruptcy may be the only real alternative to deal with this kind of bet-the-company threat.”
St. Paul, Minnesota-based 3M maintains that PFAS are safe and that PFAS contamination poses no significant threat to public health and welfare. The EPA says PFAS are linked to developmental delays in children and increased cancer risks, and some researchers have linked PFAS to specific cancers, but 3M disputes those findings.
3M has said it will stop making the chemicals by 2025 because of “regulatory trends focused on reducing or eliminating the presence of PFAS in the environment.” The company started winding down production of some of the compounds in 2000, court filings show.
In a statement, a 3M spokesman said the company would contest claims by cities, states and individuals but also held out the possibility of settlement. “We are in active, ongoing and confidential mediation sessions regarding the resolution” of the Stuart case and “multiple other water supplier cases and claims,” he said.
The company settled another PFAS lawsuit on the eve of trial in 2018, agreeing to pay $850 million to resolve claims by Minnesota’s attorney general that the chemicals damaged drinking water and natural resources. 3M admitted no wrongdoing. Earlier this week, 3M, DuPont and other companies agreed to pay more than $100 million to settle a PFAS suit by the city of Rome, Georgia.
Gary Douglas and Wes Bowden, two lawyers for Stuart, declined to comment on the possibility of a settlement. “We look forward to presenting our case to the jury and seeking justice for our client,” they said in a statement.
Carl Tobias, a University of Richmond professor who teaches product-liability law, said a settlement would make sense for 3M. “I think any jury that actually gets to hear the case against the makers of PFAS is likely to come back with a huge verdict against them,” he said.
The firefighting foam at issue in the Stuart case often runs off into water sources during training exercises, according to court filings. According to court filings, tests on some Stuart wells in 2021 found PFAS levels at 1,600 parts per trillion. The US Environmental Protection Agency in March proposed a nationwide cap on two of the most widely used and studied PFAS compounds — PFOA and PFOS — at 4 parts per trillion.
Potential PFAS liability prompted Kidde-Fenwal Inc. — a distributor of firefighting foam that never made the substance – to file for Chapter 11 bankruptcy protection in May.
If 3M does file for bankruptcy to manage its legal exposure, it wouldn’t be the first time. A 3M unit is currently in bankruptcy protection while it tries to resolve more than 230,000 lawsuits by soldiers over allegedly faulty ear protection sold to the US military.
The litigation risks have already taken a toll with investors. Shares have declined by about 60% since their high in January 2018, in part due to liability concerns, erasing about $100 billion in market value.
“I get calls all the time asking ‘what inning are we in with this?’ We’re still in spring training,” RBC Capital Markets analyst Deane Dray said about the litigation. “It renders the stock uninvestible.”
The case is Aqueous Film-Forming Foams Products Liability Litigation, No. 18-mn-2873, US District Court, District of South Carolina (Charleston).
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