He asked, litigation is the issue that won't go away. What is this legal fight about? Who is likely to win? And when will it play out? This is a votes in Verdicts Brief.
Welcome to this votes in Verdicts podcast hosted by Bloomberg Intelligence, part of Bloomberg's research department, with five hundred analysts strategists working across all major world markets. Our coverage includes over two thousand equities and credits, as well as outbooks on more than ninety industries and one hundred market industries, currencies and commodities. In this podcast series, we talk about the
intersection of business policy and law. My name is Justin Teresi and I'm a litigation analyst with Bloomberg Intelligence covering antitrust litigation, and.
I'm Holyly Frome and analysts covering US litigation and policy and industrial and consumer space.
Our votes in Verdicts Brief series highlights one of our research reports on the Bloomberg terminal, giving listeners a quick takeaway to help grasp a key litigation or policy topic. Today, my colleague colleague is going to talk a little bit about p fast litigation. So, Holly, we've been hearing a lot about this p fast litigation. It's been going on now since two thousand. The cases really seem like they
heated up in twenty eighteen. Can you talk a little bit about what p fasts, what are p fast, what's the history of these lawsuits, and what's this litigation all about?
Sure? Thanks, Justin. The p fasts are man made chemicals that were invented by scientists at three M in the nineteen forties and used by Threem and other manufacturers like DuPont, Wolverine and others. Because of their nonstick, waterproof, stain and fire resistant properties. P fasts don't break down in nature. They accumulate in people's wood and are very mobile in water.
That's why they're called forever chemicals. In the early two thousands, like you said, a litigation was started over DuPont's Washington Works facility. DuPont made Teffon. Remember those nonstick pain commercials or maybe not, because Justin you may be too young for those, but I remember them.
Maybe not that not that young.
Teflon used a type of p fass called PFOA. Residents around DuPont's facility claimed that they were getting sick because the drinking water was contaminated. About thirty five hundred personal injury lawsuits were filed, and as a result of the litigation, a science panel with epidemiologists chosen by duplant and the plaintiffs was commissioned to study the community near DuPont's factory. The science panel concluded that six different diseases, including kidney
and testicular cancer, linked to PFOA. Those cases settled for around six hundred and seventy million dollars, but more law seats cropped up at other manufacturing facilities, like at three MS manufacturing facility in Minnesota and DuPont's manufacturing plant.
In New Jersey.
To see various types of law suaits were filed, some by states alleging p FASS contamination damaged natural resources, some by water utilities alleging contaminated water required remediation, some by personal injury plaintiffs who say that they were injured from pfas contaminated drinking water, and some by property owners who alleged pfas diminish the value of their homes.
Got it so. One example of a state lawsuit for natural resources was Minnesota's back in twenty ten, and that case eventually settled in twenty eighteen. I remember were three M agreeing to pay the State of Minnesota about eight hundred and fifty million dollars to resolve claims that three m's manufacturing facility there are contaminated natural resources. But this case alone, that wasn't the end of the p FAST litigation, was it?
No, arguably that was the beginning. At first, litigation was filed primarily near manufacturing facilities that used p FAST, but then the litigation spread to sites where PFAS was used in products. So in twenty eighteen, a number of lawsuits were filed against three M, DuPont, Comores, and others over allegations that pfas in firefighting foam foam used to fight
fires at military and naval bases and airports. Can how many of the water hundreds of water authorities because water was you know, contaminating allegedly had to be remediated, sued and plaintiffs alledging personal injury sued. States also sued saying that the natural resources damage, that their natural resources were damaged. So many of those lossuits are still ongoing. But there have been a number of notable settlements.
Right, and I think really what's been on everybody's mind the last few months. Anyways. You know, we saw a multi billion dollar settlement recently involving DuPont and water authorities, and another settlement even larger involving three m in water authorities. So that was before there was even a full bell Weather trial that was held on these issues related to the water authorities alone. Why do you think the water authorities settled so quickly on those.
Well, for one thing, there's been regulatory developments, first at the state level and then at the federal level. Originally, the EPA had put out this health advisory. It was non binding and it said pfast and drinking water shouldn't exceed seventy parts per trillion. But then states like New Jersey and New Hampshire put out binding regulations requiring lower levels. So right away water authorities had to comply in those
districts cent and we're expending money to comply. So you really couldn't argue in those jurisdictions about the existence of damages. Maybe the extended damages, but not the existence of damages. So once the federal government put out so called maximum contaminalt levels, which is what it sounds like, it's the maximum amount of ypast that could be in drinking water. It was clear that absent a successful rule challenge, all
applicable US water authorities would have to comply. I should say, as a side note, those rules challenges are occurring now, but we don't know what the outcome of those are. But damages in a sense, you know, if those rules stick, damages in a sense are established or the existence of damages are established. The judge presiding over the multi district litigation where all these firefighting phone cases were consolidated to put water authority cases on the first track of litigation,
meaning he would try those first. And the reason he did that was because he said that if those can't those water authorities can't prove their case, then other types of litigants wouldn't be able to prove their case either.
The first trial of a by a water authority was supposed to be held in June twenty twenty three, but as you mentioned, at about the same time, the case settled and the lawyers representing water districts and three M propose a class action deal to resolve water authority claims for ten to twelve point five billion dollars and DuPont also settled water district cases for one point two billion dollars.
Got it, some really big numbers there, And how much of a surprise was that, Holly, Well, the only.
Thing surprising to me about it was the amount that they settled, and not a surprise because, like I said, we thought it was tough for manufacturers to dispute at least the existence of damages and even causation because according to court filings, the pfast in different types of firefighting FOLM could be traced back to specific manufacturers depending on the chemical makeup, and the experts who were to testify
about identification were allowed to testify by the childhood. You had these facts, you had water contamination, you had testimony concerning whose pface it was, and you had assumed to be issued regulation by the EPA setting maximum contaminant levels that basically made out the elements of the case. So
it wasn't a surprise they settled. What surprised me was the amount what are authorities agreed to take because trade groups for water authorities were saying it was going to be some astronomical number to treat water, and one estimate was three point eight billion dollars a year.
Got it, got it, So so many moving parts baked into all of that there. And I guess that leads me to the last question on the brief too, and what's left in this litigation as it moves forward.
So we still have state cases state suing over natural resource damages and other things. They weren't part of the water authority deal, nor were personal injury planists, so a pool of personal injury bell wethers are being worked up for trial. Now you have opt outs to the deal,
So about one thousand water districts opted out. And though that's a very small fraction of the total number of water authorities covered by the deal, about seven point five percent, that could have the potent to be very expensive depending on how large the water district is. So, for example, we saw in other class settlements of our contenments, like with PCBs, there was a class deal for six hundred and fifty million. They're supposed to cover about twenty five
hundred cities. That was approved and then several cities opted out. One city that opted out just stuck a deal for one hundred and sixty million dollars. So opt outs have the potential to substantially drive the final cost of resolution of water authority lawsuits up, but we don't know the identity of all the opt out yes, so that is something we will be watching.
Great Holly, thanks for that quick overview. The p fast issue is really interesting stuff. So that's today's Votes and Verdicts brief. For our full report on this topic and all of our research, please visit BI laws on the Bloomberg terminal. And thanks to the listener for tuning in this What's Roads and Verdicts all him to