WEBVTT - Forever Chemicals, the Forever Litigation?

0:00:11.840 --> 0:00:14.319
<v Speaker 1>He asked, litigation is the issue that won't go away.

0:00:14.480 --> 0:00:16.840
<v Speaker 1>What is this legal fight about? Who is likely to win?

0:00:16.960 --> 0:00:19.040
<v Speaker 1>And when will it play out? This is a votes

0:00:19.079 --> 0:00:19.960
<v Speaker 1>in Verdicts Brief.

0:00:20.640 --> 0:00:24.640
<v Speaker 2>Welcome to this votes in Verdicts podcast hosted by Bloomberg Intelligence,

0:00:24.760 --> 0:00:28.360
<v Speaker 2>part of Bloomberg's research department, with five hundred analysts strategists

0:00:28.400 --> 0:00:32.159
<v Speaker 2>working across all major world markets. Our coverage includes over

0:00:32.240 --> 0:00:35.040
<v Speaker 2>two thousand equities and credits, as well as outbooks on

0:00:35.120 --> 0:00:38.600
<v Speaker 2>more than ninety industries and one hundred market industries, currencies

0:00:38.640 --> 0:00:41.720
<v Speaker 2>and commodities. In this podcast series, we talk about the

0:00:41.720 --> 0:00:45.639
<v Speaker 2>intersection of business policy and law. My name is Justin

0:00:45.720 --> 0:00:48.880
<v Speaker 2>Teresi and I'm a litigation analyst with Bloomberg Intelligence covering

0:00:48.920 --> 0:00:51.199
<v Speaker 2>antitrust litigation, and.

0:00:51.200 --> 0:00:54.120
<v Speaker 1>I'm Holyly Frome and analysts covering US litigation and policy

0:00:54.160 --> 0:00:55.760
<v Speaker 1>and industrial and consumer space.

0:00:55.920 --> 0:00:58.880
<v Speaker 2>Our votes in Verdicts Brief series highlights one of our

0:00:58.920 --> 0:01:02.480
<v Speaker 2>research reports on the Bloomberg terminal, giving listeners a quick

0:01:02.520 --> 0:01:06.480
<v Speaker 2>takeaway to help grasp a key litigation or policy topic. Today,

0:01:06.640 --> 0:01:08.720
<v Speaker 2>my colleague colleague is going to talk a little bit

0:01:08.760 --> 0:01:12.520
<v Speaker 2>about p fast litigation. So, Holly, we've been hearing a

0:01:12.560 --> 0:01:15.200
<v Speaker 2>lot about this p fast litigation. It's been going on

0:01:15.240 --> 0:01:18.120
<v Speaker 2>now since two thousand. The cases really seem like they

0:01:18.120 --> 0:01:20.880
<v Speaker 2>heated up in twenty eighteen. Can you talk a little

0:01:20.880 --> 0:01:23.920
<v Speaker 2>bit about what p fasts, what are p fast, what's

0:01:23.920 --> 0:01:27.160
<v Speaker 2>the history of these lawsuits, and what's this litigation all about?

0:01:27.959 --> 0:01:31.839
<v Speaker 1>Sure? Thanks, Justin. The p fasts are man made chemicals

0:01:31.880 --> 0:01:35.160
<v Speaker 1>that were invented by scientists at three M in the

0:01:35.240 --> 0:01:39.400
<v Speaker 1>nineteen forties and used by Threem and other manufacturers like DuPont,

0:01:39.440 --> 0:01:43.000
<v Speaker 1>Wolverine and others. Because of their nonstick, waterproof, stain and

0:01:43.080 --> 0:01:46.559
<v Speaker 1>fire resistant properties. P fasts don't break down in nature.

0:01:46.560 --> 0:01:50.160
<v Speaker 1>They accumulate in people's wood and are very mobile in water.

0:01:50.360 --> 0:01:54.320
<v Speaker 1>That's why they're called forever chemicals. In the early two thousands,

0:01:54.320 --> 0:01:56.880
<v Speaker 1>like you said, a litigation was started over DuPont's Washington

0:01:56.920 --> 0:02:02.000
<v Speaker 1>Works facility. DuPont made Teffon. Remember those nonstick pain commercials

0:02:02.280 --> 0:02:04.360
<v Speaker 1>or maybe not, because Justin you may be too young

0:02:04.400 --> 0:02:05.600
<v Speaker 1>for those, but I remember them.

0:02:06.400 --> 0:02:08.560
<v Speaker 2>Maybe not that not that young.

0:02:10.960 --> 0:02:15.040
<v Speaker 1>Teflon used a type of p fass called PFOA. Residents

0:02:15.080 --> 0:02:18.200
<v Speaker 1>around DuPont's facility claimed that they were getting sick because

0:02:18.200 --> 0:02:21.560
<v Speaker 1>the drinking water was contaminated. About thirty five hundred personal

0:02:21.560 --> 0:02:24.639
<v Speaker 1>injury lawsuits were filed, and as a result of the litigation,

0:02:24.880 --> 0:02:27.840
<v Speaker 1>a science panel with epidemiologists chosen by duplant and the

0:02:27.840 --> 0:02:31.919
<v Speaker 1>plaintiffs was commissioned to study the community near DuPont's factory.

0:02:32.440 --> 0:02:36.079
<v Speaker 1>The science panel concluded that six different diseases, including kidney

0:02:36.120 --> 0:02:39.720
<v Speaker 1>and testicular cancer, linked to PFOA. Those cases settled for

0:02:39.760 --> 0:02:42.720
<v Speaker 1>around six hundred and seventy million dollars, but more law

0:02:42.760 --> 0:02:46.240
<v Speaker 1>seats cropped up at other manufacturing facilities, like at three

0:02:46.320 --> 0:02:50.399
<v Speaker 1>MS manufacturing facility in Minnesota and DuPont's manufacturing plant.

0:02:50.200 --> 0:02:50.800
<v Speaker 2>In New Jersey.

0:02:51.120 --> 0:02:53.600
<v Speaker 1>To see various types of law suaits were filed, some

0:02:53.639 --> 0:02:58.320
<v Speaker 1>by states alleging p FASS contamination damaged natural resources, some

0:02:58.480 --> 0:03:02.799
<v Speaker 1>by water utilities alleging contaminated water required remediation, some by

0:03:02.840 --> 0:03:05.160
<v Speaker 1>personal injury plaintiffs who say that they were injured from

0:03:05.160 --> 0:03:08.680
<v Speaker 1>pfas contaminated drinking water, and some by property owners who

0:03:08.680 --> 0:03:11.640
<v Speaker 1>alleged pfas diminish the value of their homes.

0:03:12.080 --> 0:03:15.000
<v Speaker 2>Got it so. One example of a state lawsuit for

0:03:15.080 --> 0:03:18.920
<v Speaker 2>natural resources was Minnesota's back in twenty ten, and that

0:03:19.000 --> 0:03:21.720
<v Speaker 2>case eventually settled in twenty eighteen. I remember were three

0:03:21.800 --> 0:03:23.840
<v Speaker 2>M agreeing to pay the State of Minnesota about eight

0:03:23.919 --> 0:03:27.160
<v Speaker 2>hundred and fifty million dollars to resolve claims that three

0:03:27.280 --> 0:03:31.960
<v Speaker 2>m's manufacturing facility there are contaminated natural resources. But this

0:03:32.080 --> 0:03:34.520
<v Speaker 2>case alone, that wasn't the end of the p FAST litigation,

0:03:34.760 --> 0:03:35.000
<v Speaker 2>was it?

0:03:35.920 --> 0:03:38.760
<v Speaker 1>No, arguably that was the beginning. At first, litigation was

0:03:38.800 --> 0:03:42.560
<v Speaker 1>filed primarily near manufacturing facilities that used p FAST, but

0:03:42.640 --> 0:03:46.040
<v Speaker 1>then the litigation spread to sites where PFAS was used

0:03:46.080 --> 0:03:49.400
<v Speaker 1>in products. So in twenty eighteen, a number of lawsuits

0:03:49.400 --> 0:03:52.240
<v Speaker 1>were filed against three M, DuPont, Comores, and others over

0:03:52.320 --> 0:03:56.400
<v Speaker 1>allegations that pfas in firefighting foam foam used to fight

0:03:56.400 --> 0:04:00.160
<v Speaker 1>fires at military and naval bases and airports. Can how

0:04:00.200 --> 0:04:03.360
<v Speaker 1>many of the water hundreds of water authorities because water

0:04:03.720 --> 0:04:06.840
<v Speaker 1>was you know, contaminating allegedly had to be remediated, sued

0:04:07.400 --> 0:04:12.360
<v Speaker 1>and plaintiffs alledging personal injury sued. States also sued saying

0:04:12.360 --> 0:04:16.480
<v Speaker 1>that the natural resources damage, that their natural resources were damaged.

0:04:16.520 --> 0:04:19.440
<v Speaker 1>So many of those lossuits are still ongoing. But there

0:04:19.440 --> 0:04:23.080
<v Speaker 1>have been a number of notable settlements.

0:04:22.320 --> 0:04:24.880
<v Speaker 2>Right, and I think really what's been on everybody's mind

0:04:24.920 --> 0:04:27.000
<v Speaker 2>the last few months. Anyways. You know, we saw a

0:04:27.080 --> 0:04:31.280
<v Speaker 2>multi billion dollar settlement recently involving DuPont and water authorities,

0:04:31.560 --> 0:04:35.520
<v Speaker 2>and another settlement even larger involving three m in water authorities.

0:04:35.920 --> 0:04:38.160
<v Speaker 2>So that was before there was even a full bell

0:04:38.279 --> 0:04:40.640
<v Speaker 2>Weather trial that was held on these issues related to

0:04:40.680 --> 0:04:42.920
<v Speaker 2>the water authorities alone. Why do you think the water

0:04:42.920 --> 0:04:44.960
<v Speaker 2>authorities settled so quickly on those.

0:04:45.960 --> 0:04:48.800
<v Speaker 1>Well, for one thing, there's been regulatory developments, first at

0:04:48.800 --> 0:04:52.160
<v Speaker 1>the state level and then at the federal level. Originally,

0:04:52.200 --> 0:04:54.760
<v Speaker 1>the EPA had put out this health advisory. It was

0:04:54.839 --> 0:04:58.159
<v Speaker 1>non binding and it said pfast and drinking water shouldn't

0:04:58.160 --> 0:05:01.440
<v Speaker 1>exceed seventy parts per trillion. But then states like New

0:05:01.520 --> 0:05:05.120
<v Speaker 1>Jersey and New Hampshire put out binding regulations requiring lower levels.

0:05:05.240 --> 0:05:08.000
<v Speaker 1>So right away water authorities had to comply in those

0:05:08.000 --> 0:05:10.599
<v Speaker 1>districts cent and we're expending money to comply. So you

0:05:10.640 --> 0:05:14.160
<v Speaker 1>really couldn't argue in those jurisdictions about the existence of damages.

0:05:14.200 --> 0:05:16.960
<v Speaker 1>Maybe the extended damages, but not the existence of damages.

0:05:17.400 --> 0:05:20.719
<v Speaker 1>So once the federal government put out so called maximum

0:05:20.720 --> 0:05:23.000
<v Speaker 1>contaminalt levels, which is what it sounds like, it's the

0:05:23.040 --> 0:05:25.400
<v Speaker 1>maximum amount of ypast that could be in drinking water.

0:05:25.720 --> 0:05:29.200
<v Speaker 1>It was clear that absent a successful rule challenge, all

0:05:29.279 --> 0:05:33.720
<v Speaker 1>applicable US water authorities would have to comply. I should say,

0:05:33.720 --> 0:05:36.279
<v Speaker 1>as a side note, those rules challenges are occurring now,

0:05:36.360 --> 0:05:38.000
<v Speaker 1>but we don't know what the outcome of those are.

0:05:38.360 --> 0:05:42.880
<v Speaker 1>But damages in a sense, you know, if those rules stick,

0:05:43.080 --> 0:05:46.680
<v Speaker 1>damages in a sense are established or the existence of

0:05:46.760 --> 0:05:50.120
<v Speaker 1>damages are established. The judge presiding over the multi district

0:05:50.200 --> 0:05:53.839
<v Speaker 1>litigation where all these firefighting phone cases were consolidated to

0:05:53.839 --> 0:05:56.440
<v Speaker 1>put water authority cases on the first track of litigation,

0:05:57.040 --> 0:05:58.839
<v Speaker 1>meaning he would try those first. And the reason he

0:05:58.880 --> 0:06:01.559
<v Speaker 1>did that was because he said that if those can't

0:06:01.880 --> 0:06:05.080
<v Speaker 1>those water authorities can't prove their case, then other types

0:06:05.120 --> 0:06:07.200
<v Speaker 1>of litigants wouldn't be able to prove their case either.

0:06:08.040 --> 0:06:10.600
<v Speaker 1>The first trial of a by a water authority was

0:06:10.600 --> 0:06:12.920
<v Speaker 1>supposed to be held in June twenty twenty three, but

0:06:13.000 --> 0:06:15.000
<v Speaker 1>as you mentioned, at about the same time, the case

0:06:15.040 --> 0:06:18.640
<v Speaker 1>settled and the lawyers representing water districts and three M

0:06:18.760 --> 0:06:21.839
<v Speaker 1>propose a class action deal to resolve water authority claims

0:06:21.839 --> 0:06:25.040
<v Speaker 1>for ten to twelve point five billion dollars and DuPont

0:06:25.120 --> 0:06:28.919
<v Speaker 1>also settled water district cases for one point two billion dollars.

0:06:29.360 --> 0:06:31.560
<v Speaker 2>Got it, some really big numbers there, And how much

0:06:31.600 --> 0:06:34.920
<v Speaker 2>of a surprise was that, Holly, Well, the only.

0:06:34.720 --> 0:06:37.120
<v Speaker 1>Thing surprising to me about it was the amount that

0:06:37.160 --> 0:06:39.320
<v Speaker 1>they settled, and not a surprise because, like I said,

0:06:39.320 --> 0:06:42.120
<v Speaker 1>we thought it was tough for manufacturers to dispute at

0:06:42.200 --> 0:06:46.600
<v Speaker 1>least the existence of damages and even causation because according

0:06:46.600 --> 0:06:49.640
<v Speaker 1>to court filings, the pfast in different types of firefighting

0:06:49.640 --> 0:06:53.480
<v Speaker 1>FOLM could be traced back to specific manufacturers depending on

0:06:53.520 --> 0:06:56.440
<v Speaker 1>the chemical makeup, and the experts who were to testify

0:06:56.520 --> 0:07:00.120
<v Speaker 1>about identification were allowed to testify by the childhood. You

0:07:00.200 --> 0:07:03.279
<v Speaker 1>had these facts, you had water contamination, you had testimony

0:07:03.279 --> 0:07:05.520
<v Speaker 1>concerning whose pface it was, and you had assumed to

0:07:05.520 --> 0:07:09.240
<v Speaker 1>be issued regulation by the EPA setting maximum contaminant levels

0:07:09.440 --> 0:07:11.680
<v Speaker 1>that basically made out the elements of the case. So

0:07:11.720 --> 0:07:14.320
<v Speaker 1>it wasn't a surprise they settled. What surprised me was

0:07:14.360 --> 0:07:16.800
<v Speaker 1>the amount what are authorities agreed to take because trade

0:07:16.840 --> 0:07:18.680
<v Speaker 1>groups for water authorities were saying it was going to

0:07:18.680 --> 0:07:22.480
<v Speaker 1>be some astronomical number to treat water, and one estimate

0:07:22.600 --> 0:07:24.480
<v Speaker 1>was three point eight billion dollars a year.

0:07:25.360 --> 0:07:28.160
<v Speaker 2>Got it, got it, So so many moving parts baked

0:07:28.200 --> 0:07:30.040
<v Speaker 2>into all of that there. And I guess that leads

0:07:30.120 --> 0:07:31.760
<v Speaker 2>me to the last question on the brief too, and

0:07:31.800 --> 0:07:33.920
<v Speaker 2>what's left in this litigation as it moves forward.

0:07:34.200 --> 0:07:37.240
<v Speaker 1>So we still have state cases state suing over natural

0:07:37.280 --> 0:07:40.160
<v Speaker 1>resource damages and other things. They weren't part of the

0:07:40.200 --> 0:07:44.000
<v Speaker 1>water authority deal, nor were personal injury planists, so a

0:07:44.040 --> 0:07:46.680
<v Speaker 1>pool of personal injury bell wethers are being worked up

0:07:46.680 --> 0:07:49.960
<v Speaker 1>for trial. Now you have opt outs to the deal,

0:07:50.080 --> 0:07:52.800
<v Speaker 1>So about one thousand water districts opted out. And though

0:07:52.800 --> 0:07:55.760
<v Speaker 1>that's a very small fraction of the total number of

0:07:55.800 --> 0:07:58.720
<v Speaker 1>water authorities covered by the deal, about seven point five percent,

0:07:59.000 --> 0:08:02.600
<v Speaker 1>that could have the potent to be very expensive depending

0:08:02.720 --> 0:08:05.720
<v Speaker 1>on how large the water district is. So, for example,

0:08:05.760 --> 0:08:08.080
<v Speaker 1>we saw in other class settlements of our contenments, like

0:08:08.120 --> 0:08:10.480
<v Speaker 1>with PCBs, there was a class deal for six hundred

0:08:10.480 --> 0:08:13.000
<v Speaker 1>and fifty million. They're supposed to cover about twenty five

0:08:13.080 --> 0:08:17.640
<v Speaker 1>hundred cities. That was approved and then several cities opted out.

0:08:17.760 --> 0:08:20.120
<v Speaker 1>One city that opted out just stuck a deal for

0:08:20.160 --> 0:08:22.680
<v Speaker 1>one hundred and sixty million dollars. So opt outs have

0:08:22.800 --> 0:08:26.320
<v Speaker 1>the potential to substantially drive the final cost of resolution

0:08:26.720 --> 0:08:29.800
<v Speaker 1>of water authority lawsuits up, but we don't know the

0:08:29.840 --> 0:08:32.680
<v Speaker 1>identity of all the opt out yes, so that is

0:08:32.720 --> 0:08:33.960
<v Speaker 1>something we will be watching.

0:08:34.360 --> 0:08:36.760
<v Speaker 2>Great Holly, thanks for that quick overview. The p fast

0:08:36.800 --> 0:08:40.000
<v Speaker 2>issue is really interesting stuff. So that's today's Votes and

0:08:40.120 --> 0:08:42.640
<v Speaker 2>Verdicts brief. For our full report on this topic and

0:08:42.760 --> 0:08:45.800
<v Speaker 2>all of our research, please visit BI laws on the

0:08:45.840 --> 0:08:48.880
<v Speaker 2>Bloomberg terminal. And thanks to the listener for tuning in

0:08:49.240 --> 0:09:03.600
<v Speaker 2>this What's Roads and Verdicts all him to