alerts & publications
Perfluorinated Chemicals: Litigation and Regulatory UpdateJanuary 10, 2017
On January 5, 2017, a jury awarded $10.5 million in punitive damages to an Ohio man who alleged that perfluorooctanoic acid (PFOA) released by E.I. du Pont de Nemours and Company (DuPont) from its Washington Works facility had contaminated groundwater and caused his testicular cancer. The punitive award brings the total amount awarded to the plaintiff to $12.5 million. The verdict is the third against DuPont, but one of the first in a series of 40 lead cases expected to be tried over the course of the next year. The lead cases are drawn from a class of over 3,500 area residents who have one or more of six diseases determined by a medical panel to be associated with consumption of drinking water contaminated with PFOA. The two earlier verdicts, which DuPont is appealing, were for $1.6 million and $5.6 million (including “emotional distress” damages).
In December of 2016, Saint-Gobain Performance Plastics Corp. and Honeywell International Inc. agreed to pay $850,000 to settle claims brought by the Village of Hoosick Falls relating to contamination of its water supply with PFOA. The settlement reimburses the Village for past costs, including those relating to water monitoring and analysis, flushing water lines, and repairs, and does not cover ongoing obligations to conduct investigations and remediation of PFOA or to fund the operation of a carbon treatment system at the Village’s water treatment facility.
While the Ohio contamination has long been the subject of remedial investigation, the discovery of contamination in Hoosick Falls and other towns has focused heightened attention on PFOA and a related chemical, perfluorooctane sulfonate (PFOS), which have been widely used in the manufacture of nonstick coatings, firefighting chemicals, and other industrial and consumer applications at locations around the US. PFOA and PFOS, which are part of a group of chemicals known as perfluorinated chemicals (PFCs), are not currently regulated by the United States Environmental Protection Agency (EPA), and both EPA and state agencies have since been scrambling to determine the appropriate regulatory response. In May 2016, EPA issued non-binding health advisories setting a lifetime exposure level of 0.07 micrograms per liter (or 70 parts per trillion [ppt]) for both substances, and recommended that, if found together, combined concentrations of PFOA and PFOS should not exceed that level. In addition, in November 2016, EPA stated that it had the information necessary to make a determination regarding whether to regulate the chemicals in drinking water. Data collected by EPA from 4,900 small water systems across the country under its Unregulated Contaminant Monitoring Rule (UCMR) indicated that the chemicals were present in 203 systemsand exceeded the 70 ppt level for individual chemicals in 59 systems (it is not clear how many exceedances there would be on a combined basis). Whether and to what extent the new administration will regulate the chemicals is unclear.
State and International Developments
In New York State, the Department of Environmental Conservation is investigating 40 additional sites for PFC contamination, including fire department and Department of Defense sites. Governor Cuomo has pledged that, if EPA does not expand the UCMR, which currently only applies to public water systems that serve fewer than 10,000 people, he will introduce legislation requiring that all public water systems in the state be monitored for unregulated contaminants. In addition, in July 2016, Governor Cuomo signed legislation allowing for an extension of the tolling of the statute of limitations in cases of exposure to substances from a state or federal Superfund site. The prior applicable limitations period was the general negligence period of three years from the time an injury is discovered or should have been discovered, and the new law allows for an alternative tolling period of three years from when the site was designated a state or federal cleanup site, if that is later than the traditional period. Three additional bills have been introduced in the New York State Legislature to address PFOA-related issues, one of which would require the state health commissioner to conduct bio-monitoring of residents of Hoosick Falls and neighboring Petersburgh every two years.
In New Jersey, an advisory board to the Department of Environmental Protection (NJDEP) recommended in September 2016 that the State set an enforceable drinking water standard for PFOA of 14 ppt, which would be the first in the nation if adopted. And in an effort to better understand the range of potential PFC sources across the state, NJDEP sent out 53 information request letters to facilities that regulators suspect manufactured or used the substances.
In California, in September 2016, the state Environmental Protection Agency (CalEPA) Office of Environmental Health Hazard Assessment proposed adding PFOA and PFOS to the “Proposition 65” list of chemicals known to cause cancer or reproductive toxicity. Once the listing is finalized, these substances and products containing them must have a warning label unless the exposure is low enough to pose no significant risk of cancer or is significantly below levels observed to cause birth defects or other reproductive harm.
In September 2016, a United Nations committee that assesses chemicals for possible inclusion in the Stockholm Convention on Persistent Organic Pollutants concluded that PFOA should be subject to global restrictions under the Convention. The committee determined that PFOA and related compounds are “likely to lead to adverse human and environmental effects.” While PFOA manufacturing has ceased in the US, the European Union, and Japan, the chemicals continue to be manufactured in large volumes in China.
PFC contamination is the focus of litigation in other jurisdictions as well. In 2016, a Northern Alabama water and sewer authority sued 3M Co. and Daikin America, Inc. alleging that PFCs from their facilities contaminated its Tennessee River drinking water supply. In September, Daikin paid $5 million to settle the allegations against it, although 3M (which owned the land where the Daikin facility was situated) continues to defend the litigation. In addition, in September 2016, residents near two former military bases outside of Philadelphia filed a class action in federal court alleging that 3M, a Tyco International unit, and other companies contaminated their water supply with PFCs contained in fire suppressant foams that the companies sold to the US Navy. The residents claim that the foam was washed down drains and mixed with ground and surface water, putting them at risk of PFC-related diseases. The residents seek coverage for medical monitoring and property damage.
The President-elect has stated that clean drinking water would be an EPA priority under his administration, suggesting the potential for further federal action on PFCs. Even in the absence of federal regulation, states like New Jersey and New York may well proceed to set their own standards. Regardless of whether regulatory standards are set, however, it seems clear that in light of the recent verdicts and broad prevalence of PFC contamination, litigation will pose a material risk for the regulated community.
This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Eric Rothenberg, an O’Melveny partner licensed to practice law in New York, and John Rousakis, an O’Melveny counsel licensed to practice law in New York, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
Portions of this communication may contain attorney advertising. Prior results do not guarantee a similar outcome. Please direct all inquiries regarding New York's Rules of Professional Conduct to O’Melveny & Myers LLP, Times Square Tower, 7 Times Square, New York, NY, 10036, Phone:+1-212-326-2000. © 2017 O'Melveny & Myers LLP. All Rights Reserved.
Thank you for your interest. Before you communicate with one of our attorneys, please note: Any comments our attorneys share with you are general information and not legal advice. No attorney-client relationship will exist between you or your business and O’Melveny or any of its attorneys unless conflicts have been cleared, our management has given its approval, and an engagement letter has been signed. Meanwhile, you agree: we have no duty to advise you or provide you with legal assistance; you will not divulge any confidences or send any confidential or sensitive information to our attorneys (we are not in a position to keep it confidential and might be required to convey it to our clients); and, you may not use this contact to attempt to disqualify O’Melveny from representing other clients adverse to you or your business. By clicking "accept" you acknowledge receipt and agree to all of the terms of this paragraph and our Disclaimer.