Speaker 1: He asked, litigation is the issue that won't go away.
Speaker 1: What is this legal fight about? Who is likely to win?
Speaker 1: And when will it play out? This is a votes
Speaker 1: in Verdicts Brief.
Speaker 2: Welcome to this votes in Verdicts podcast hosted by Bloomberg Intelligence,
Speaker 2: part of Bloomberg's research department, with five hundred analysts strategists
Speaker 2: working across all major world markets. Our coverage includes over
Speaker 2: two thousand equities and credits, as well as outbooks on
Speaker 2: more than ninety industries and one hundred market industries, currencies
Speaker 2: and commodities. In this podcast series, we talk about the
Speaker 2: intersection of business policy and law. My name is Justin
Speaker 2: Teresi and I'm a litigation analyst with Bloomberg Intelligence covering
Speaker 2: antitrust litigation, and.
Speaker 1: I'm Holyly Frome and analysts covering US litigation and policy
Speaker 1: and industrial and consumer space.
Speaker 2: Our votes in Verdicts Brief series highlights one of our
Speaker 2: research reports on the Bloomberg terminal, giving listeners a quick
Speaker 2: takeaway to help grasp a key litigation or policy topic. Today,
Speaker 2: my colleague colleague is going to talk a little bit
Speaker 2: about p fast litigation. So, Holly, we've been hearing a
Speaker 2: lot about this p fast litigation. It's been going on
Speaker 2: now since two thousand. The cases really seem like they
Speaker 2: heated up in twenty eighteen. Can you talk a little
Speaker 2: bit about what p fasts, what are p fast, what's
Speaker 2: the history of these lawsuits, and what's this litigation all about?
Speaker 1: Sure? Thanks, Justin. The p fasts are man made chemicals
Speaker 1: that were invented by scientists at three M in the
Speaker 1: nineteen forties and used by Threem and other manufacturers like DuPont,
Speaker 1: Wolverine and others. Because of their nonstick, waterproof, stain and
Speaker 1: fire resistant properties. P fasts don't break down in nature.
Speaker 1: They accumulate in people's wood and are very mobile in water.
Speaker 1: That's why they're called forever chemicals. In the early two thousands,
Speaker 1: like you said, a litigation was started over DuPont's Washington
Speaker 1: Works facility. DuPont made Teffon. Remember those nonstick pain commercials
Speaker 1: or maybe not, because Justin you may be too young
Speaker 1: for those, but I remember them.
Speaker 2: Maybe not that not that young.
Speaker 1: Teflon used a type of p fass called PFOA. Residents
Speaker 1: around DuPont's facility claimed that they were getting sick because
Speaker 1: the drinking water was contaminated. About thirty five hundred personal
Speaker 1: injury lawsuits were filed, and as a result of the litigation,
Speaker 1: a science panel with epidemiologists chosen by duplant and the
Speaker 1: plaintiffs was commissioned to study the community near DuPont's factory.
Speaker 1: The science panel concluded that six different diseases, including kidney
Speaker 1: and testicular cancer, linked to PFOA. Those cases settled for
Speaker 1: around six hundred and seventy million dollars, but more law
Speaker 1: seats cropped up at other manufacturing facilities, like at three
Speaker 1: MS manufacturing facility in Minnesota and DuPont's manufacturing plant.
Speaker 2: In New Jersey.
Speaker 1: To see various types of law suaits were filed, some
Speaker 1: by states alleging p FASS contamination damaged natural resources, some
Speaker 1: by water utilities alleging contaminated water required remediation, some by
Speaker 1: personal injury plaintiffs who say that they were injured from
Speaker 1: pfas contaminated drinking water, and some by property owners who
Speaker 1: alleged pfas diminish the value of their homes.
Speaker 2: Got it so. One example of a state lawsuit for
Speaker 2: natural resources was Minnesota's back in twenty ten, and that
Speaker 2: case eventually settled in twenty eighteen. I remember were three
Speaker 2: M agreeing to pay the State of Minnesota about eight
Speaker 2: hundred and fifty million dollars to resolve claims that three
Speaker 2: m's manufacturing facility there are contaminated natural resources. But this
Speaker 2: case alone, that wasn't the end of the p FAST litigation,
Speaker 2: was it?
Speaker 1: No, arguably that was the beginning. At first, litigation was
Speaker 1: filed primarily near manufacturing facilities that used p FAST, but
Speaker 1: then the litigation spread to sites where PFAS was used
Speaker 1: in products. So in twenty eighteen, a number of lawsuits
Speaker 1: were filed against three M, DuPont, Comores, and others over
Speaker 1: allegations that pfas in firefighting foam foam used to fight
Speaker 1: fires at military and naval bases and airports. Can how
Speaker 1: many of the water hundreds of water authorities because water
Speaker 1: was you know, contaminating allegedly had to be remediated, sued
Speaker 1: and plaintiffs alledging personal injury sued. States also sued saying
Speaker 1: that the natural resources damage, that their natural resources were damaged.
Speaker 1: So many of those lossuits are still ongoing. But there
Speaker 1: have been a number of notable settlements.
Speaker 2: Right, and I think really what's been on everybody's mind
Speaker 2: the last few months. Anyways. You know, we saw a
Speaker 2: multi billion dollar settlement recently involving DuPont and water authorities,
Speaker 2: and another settlement even larger involving three m in water authorities.
Speaker 2: So that was before there was even a full bell
Speaker 2: Weather trial that was held on these issues related to
Speaker 2: the water authorities alone. Why do you think the water
Speaker 2: authorities settled so quickly on those.
Speaker 1: Well, for one thing, there's been regulatory developments, first at
Speaker 1: the state level and then at the federal level. Originally,
Speaker 1: the EPA had put out this health advisory. It was
Speaker 1: non binding and it said pfast and drinking water shouldn't
Speaker 1: exceed seventy parts per trillion. But then states like New
Speaker 1: Jersey and New Hampshire put out binding regulations requiring lower levels.
Speaker 1: So right away water authorities had to comply in those
Speaker 1: districts cent and we're expending money to comply. So you
Speaker 1: really couldn't argue in those jurisdictions about the existence of damages.
Speaker 1: Maybe the extended damages, but not the existence of damages.
Speaker 1: So once the federal government put out so called maximum
Speaker 1: contaminalt levels, which is what it sounds like, it's the
Speaker 1: maximum amount of ypast that could be in drinking water.
Speaker 1: It was clear that absent a successful rule challenge, all
Speaker 1: applicable US water authorities would have to comply. I should say,
Speaker 1: as a side note, those rules challenges are occurring now,
Speaker 1: but we don't know what the outcome of those are.
Speaker 1: But damages in a sense, you know, if those rules stick,
Speaker 1: damages in a sense are established or the existence of
Speaker 1: damages are established. The judge presiding over the multi district
Speaker 1: litigation where all these firefighting phone cases were consolidated to
Speaker 1: put water authority cases on the first track of litigation,
Speaker 1: meaning he would try those first. And the reason he
Speaker 1: did that was because he said that if those can't
Speaker 1: those water authorities can't prove their case, then other types
Speaker 1: of litigants wouldn't be able to prove their case either.
Speaker 1: The first trial of a by a water authority was
Speaker 1: supposed to be held in June twenty twenty three, but
Speaker 1: as you mentioned, at about the same time, the case
Speaker 1: settled and the lawyers representing water districts and three M
Speaker 1: propose a class action deal to resolve water authority claims
Speaker 1: for ten to twelve point five billion dollars and DuPont
Speaker 1: also settled water district cases for one point two billion dollars.
Speaker 2: Got it, some really big numbers there, And how much
Speaker 2: of a surprise was that, Holly, Well, the only.
Speaker 1: Thing surprising to me about it was the amount that
Speaker 1: they settled, and not a surprise because, like I said,
Speaker 1: we thought it was tough for manufacturers to dispute at
Speaker 1: least the existence of damages and even causation because according
Speaker 1: to court filings, the pfast in different types of firefighting
Speaker 1: FOLM could be traced back to specific manufacturers depending on
Speaker 1: the chemical makeup, and the experts who were to testify
Speaker 1: about identification were allowed to testify by the childhood. You
Speaker 1: had these facts, you had water contamination, you had testimony
Speaker 1: concerning whose pface it was, and you had assumed to
Speaker 1: be issued regulation by the EPA setting maximum contaminant levels
Speaker 1: that basically made out the elements of the case. So
Speaker 1: it wasn't a surprise they settled. What surprised me was
Speaker 1: the amount what are authorities agreed to take because trade
Speaker 1: groups for water authorities were saying it was going to
Speaker 1: be some astronomical number to treat water, and one estimate
Speaker 1: was three point eight billion dollars a year.
Speaker 2: Got it, got it, So so many moving parts baked
Speaker 2: into all of that there. And I guess that leads
Speaker 2: me to the last question on the brief too, and
Speaker 2: what's left in this litigation as it moves forward.
Speaker 1: So we still have state cases state suing over natural
Speaker 1: resource damages and other things. They weren't part of the
Speaker 1: water authority deal, nor were personal injury planists, so a
Speaker 1: pool of personal injury bell wethers are being worked up
Speaker 1: for trial. Now you have opt outs to the deal,
Speaker 1: So about one thousand water districts opted out. And though
Speaker 1: that's a very small fraction of the total number of
Speaker 1: water authorities covered by the deal, about seven point five percent,
Speaker 1: that could have the potent to be very expensive depending
Speaker 1: on how large the water district is. So, for example,
Speaker 1: we saw in other class settlements of our contenments, like
Speaker 1: with PCBs, there was a class deal for six hundred
Speaker 1: and fifty million. They're supposed to cover about twenty five
Speaker 1: hundred cities. That was approved and then several cities opted out.
Speaker 1: One city that opted out just stuck a deal for
Speaker 1: one hundred and sixty million dollars. So opt outs have
Speaker 1: the potential to substantially drive the final cost of resolution
Speaker 1: of water authority lawsuits up, but we don't know the
Speaker 1: identity of all the opt out yes, so that is
Speaker 1: something we will be watching.
Speaker 2: Great Holly, thanks for that quick overview. The p fast
Speaker 2: issue is really interesting stuff. So that's today's Votes and
Speaker 2: Verdicts brief. For our full report on this topic and
Speaker 2: all of our research, please visit BI laws on the
Speaker 2: Bloomberg terminal. And thanks to the listener for tuning in
Speaker 2: this What's Roads and Verdicts all him to