3M’s $10 Billion PFAS Deal Approved by Court as Rule Looms (2)

A federal court approved the 3M Co.'s offer of at least $10 billion to settle PFAS claims of roughly 12,000 public water systems across the US.

3M’s settlement of between $10.5 billion and $12.5 billion to help water utilities recoup their costs of removing “forever chemicals” from drinking water comes as the Environmental Protection Agency is expected any day to issue the nation’s first-ever national standards limiting as many as six of those chemicals.

“If not approved, settlement class members would be years—if not a decade—away from litigating and reaching finality in their own cases” despite the likely need to comply with the EPA’s pending maximum contaminant limits for per- and polyfluoroalkyl substances (PFAS) very soon, wrote Judge Richard M. Gergel, of the US District Court for the District of South Carolina, in his March 29 order approving the accord.

Only a small portion—approximately 897 water systems or 7.5% of the class—opted out of the settlement, Gergel wrote. And “only seven parties filed objections,” he said, dismissing those protests.

The settlement relieves 3M of years of court battles with utilities that maintain it’s liable for the damage they have and will incur due to its signature PFAS that were used for decades in specialized fire suppressants, called aqueous film-forming foams (AFFF), that were sprayed directly into the environment and reached drinking water.

3M’s stock rose about 3% as news of the court’s approval became public on Monday, Bloomberg News reported.

Imminent Actions

The settlement class consists of active US public water systems that serve more than 3,300 people and have PFAS in their water sources, and are broken into two groups. Phase One recipients had detected PFAS in their water sources as of June 22, 2023. Phase Two recipients have or will detect PFAS as they comply with monitoring the EPA’s unregulated contaminant monitoring rule 5 (UCMR-5), which required utilities monitor their water for 29 PFAS.

Phase one recipients generally must file their claims within 60 days of the court order’s effective date. Payments under the agreement are scheduled to begin in the third quarter of 2024, provided the final approval order isn’t appealed, 3M said on Monday in a statement about the court’s order.

Phase Two recipients have until Jan. 1, 2026, because the UCMR-5 monitoring continues until 2025.

Utilities will soon find out what limits the EPA has set for up to six PFAS, because the White House approved on March 27 the agency’s final rule setting those standards.

The EPA proposed a 4 parts per trillion (ppt) limit on the two most well-known PFAS: perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) in drinking water. It also proposed to limit four additional PFAS that also persist for decades in the environment and are associated with thyroid problems, weakened immune systems, and cancer.

Court Battles Ahead

3M’s settlement doesn’t end the PFAS litigation it faces nor does it end water utilities’ efforts to secure funds to help them remove PFAS from drinking water.

The company also is a defendant in thousands of personal injury lawsuits and dozens of state lawsuits making natural resource and other damage claims, which are part of multidistrict litigation, In Re Aqueous Film-Forming Foams Products Liability Litigation MDL 2873.

Attorneys representing water utilities are now focused on a second group of cases involving telomer-based fire fighting foams. Companies began to make newer types of PFAS and new formulations of AFFF after the 3M company stopped manufacturing PFOS, which had been the firefighting foam’s primary ingredient for decades.

The first bellwether trial date involving telomer-based AFFF is provisionally scheduled for September.

3M, which was the sole US producer of PFOS, voluntarily stopped manufacturing that chemical domestically in 2000, and phased out a larger group of PFOS-related chemicals globally by the end of 2002. By then, company research had found the chemical in North American Bald Eagles and other birds and animals globally. The company announced in 2022 that it will stop making all PFAS as of 2025.

The case is In Re Aqueous Film-Forming Foams Prod. Liab. Litig. MDL 2873, D.S.C., No. 18-mn-02873, 3/29/24.