If you pollute, you sometimes pay. Following the $1.185 million agreements announced earlier this month by Chemours, DuPont and Corteva, it was the manufacturing and chemical giant 3M this Thursday that settled out of court to pay up to $12.5 billion for water pollution with its perfluoroalkyls (PFAS), a group of chemical substances that do not decompose and can accumulate over time, which can have harmful effects on human health.
3M said in a statement that the payouts will be made over a 13-year period and the current value is $10.3 billion. This implies that the actual payouts will be a higher amount, which plaintiffs have estimated at $12.5 billion. 3M itself admits in filings with the Market and Stock Exchange Commission (SEC) that it expects the final figure to rise to that 12,500 million (about $12,000 million at current exchange rates).
The agreement provides that 3M will make annual payments from 2024 to 2036. The final amount may vary somewhat and depends on various factors, most notably which of the plaintiffs and like-minded individuals are entitled to compensation if they test positive for contamination.
The full text of the 45-page agreement has been filed with the SEC. The agreement gives 3M the option to terminate it if the number of plaintiffs and employees who qualify for awards but choose not to participate and sue alone exceeds certain thresholds. In the text, 3M expressly admits no fault or wrongdoing and does not waive a defense.
“This historic settlement is the highest amount ever paid by a single company to resolve a lawsuit related to contaminated drinking water and represents critical compensation to protect our nation’s drinking water supply and improve our water treatment infrastructure to address this new threat.” to face,” said Paul Napoli, a plaintiffs’ attorney who negotiated the compensation, said in a statement. “This agreement sends a clear signal that companies like 3M must take responsibility for the consequences of the chemicals they produce,” he added.
3M has avoided a lawsuit scheduled to begin this month in Charleston, South Carolina. By the time it was suspended, it was already revealed that it was because a multimillion-dollar out-of-court settlement had been reached, for which there was no confirmation as of this Thursday.
According to 3M, the agreement, subject to court approval, will provide funding for PFAS purification technologies to drinking water utilities across the country without the need for further litigation, including those that may prove PFAS in the future. The agreement provides funding for water utilities to test for PFAS.
Also resolves water film-forming foam (AFFF) pollution litigation in Charleston, South Carolina. This fire extinguishing agent contained pollutants and was used in numerous tests before it was found to permanently contaminate the water. According to the plaintiffs, 3M was the only company that manufactured and sold AFFF containing perfluorooctane sulfonic acid (PFOS), a particularly harmful type of PFAS that studies have linked to an increased risk of cancer and other serious diseases.
Impact on Results
“This is significant progress for 3M that builds on our actions, including our announced phase-out of PFOA and PFOS manufacturing more than 20 years ago and our recent investments in state-of-the-art water filtration technology in our chemical manufacturing operations, and our announcement, that we will cease all PFAS production by the end of 2025,” said Mike Roman, 3M chairman and chief executive officer, in a statement.
3M will record a pre-tax charge of approximately $10.3 billion for second quarter 2023 results. That means the company is going to lose not just for the quarter, but most likely for the year as a whole. In 2022, it made a profit of $5.777 million.
Researchers have found that PFAS, an industrial product used since the 1950s in products ranging from computer chips and non-stick pans to cosmetics and fire-fighting foam, never naturally degrades. They remain in the water or in the body unless removed or destroyed by incineration or new technologies. The US Environmental Protection Agency claims that PFAS are linked to developmental delays in children and an increased risk of cancer, although 3M denies this.
3M is the leading manufacturer of perfluoroalkyl and polyfluoroalkyl substances. The out-of-court settlement covers claims by local water utilities, but does not protect the company from claims by federal prosecutors for river and stream pollution, allegations by the federal government, claims for personal injury and property damage, or other class action lawsuits. Some analysts put the global liability 3M could face at tens of billions of dollars. The company said Thursday it “will continue to address other PFAS litigation, defending in court or through negotiated resolutions, as appropriate.”
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