Three U.S. chemical manufacturers have agreed to pay $1.19 billion to compensate water utilities and municipalities for drinking water contamination resulting from so-called “forever chemicals,” in the largest yet confirmed U.S. settlement of litigation over the toxic materials.

DuPont and its spinoff companies Corteva and The Chemours Co. will contribute proportional amounts to settle some of the hundreds of complaints filed against them and other chemical makers over the past five years for groundwater pollution caused by polyfluoroalkyl and perfluoroalkyl substances (PFAS). They are used in a variety of industrial, commercial and consumer products, including aqueous film-forming foam that is a major component in fire-fighting applications.

U.S. District Court Judge Richard Gergel in Charleston, S.C., who is presiding over numerous cases that have been consolidated in that court, must approve the settlement. Should it fall through, the three companies vow to fight any lawsuit that moves forward. According to a statement, they “deny the allegations in the underlying litigation and reserve all legal and factual defenses against such claims if they were litigated to conclusion.” 

The settlement comes as the judge agreed on June 5 to postpone for 21 days a trial that was set to start that day in the Charleston federal court in a lawsuit brought by Stuart, Fla., against chemical maker 3M and others manufacturing PFAS-containing foam. Stuart officials had sued the firms in 2018 for $115 million, seeking compensation for the cost of installing and operating a drinking water filtration system over the next 40 years and for contaminated soil cleanup, although DuPont and and the spinoffs were no longer defendants after their settlement. 

3M had said in court documents that PFAS was not related to drinking water health problems at levels being reported, but it has set a 2025 deadline to stop producing the chemicals.

But attorneys for 3M and Stuart filed a joint court motion on June 4 to delay the trial, claiming more time needed to negotiate a settlement that could possibly affect hundreds of other plaintiffs. "The parties are making material and significant progress toward a resolution, and believe that their time would be more productively spent attempting to resolve the matter,” said the filing.

A tentative $10 billion settlement of PFAS contamination claims is in the works, Bloomberg reported on June 2, citing sources familiar with the litigation. A 3M spokesperson did not confirm the report, which also said the deal only would cover municipal drinking water providers—not claims by state attorneys general over river and stream pollution, or for personal injury and property damage or class actions.

But in an earlier statement, 3M said it is "in active, ongoing and confidential mediation sessions" to settle the Stuart suit and “multiple other water supplier cases and claims.”  It agreed in 2018 to a $850-million settlement of drinking water and natural resource damage claims with the attorney general in Minnesota, the state where the firm is based, although admitting no wrongdoing. The company also settled for $100 million earlier this month with Rome, Ga., officials 

Judge Gergel said in his order that lawsuit parties "believe a final binding agreement is achievable in the near future," but said he could reinstate the trial if a deal is not made in 21 days.

An End of Costly Litigation?

"The confirmed settlement by DuPont and the rumored settlement by 3M related to water utility lawsuits provide the companies with a manageable way to put an end to one of the largest and costliest pending litigations" against them, says John Gardella, a partner at Boston-based law firm CMBG3, which is involved in other PFAS litigation. "At the same time, it provides a more accelerated form of relief for the water utilities themselves, as they no longer have to wait for their cases to go to trial, one by one ... with over 4,500 pending cases." He notes, however, that with state and individual claims exempted, "both companies still face considerable liability related to still pending lawsuits."

DuPont and its spinoffs had set up more than two years ago a $4-billion escrow account for 20 years, ENR reported, to support future legacy PFAS liabilities from manufacturing and disposal activity occurring before July 1, 2015 and another $1 billion to address future liabilities with possible replenishment in 2028. The Orange County, Calif., water district and 10 cities and local utilities filed suit in late 2020 in state court against chemical makers 3M, Dupont and others, facing what they claimed was a $1-billion-plus cleanup of surface water and groundwater PFAS sources.

The Santa Clarita Valley Water Agency in California also sued some of the firms—seeking compensation for millions spent in testing, removal and disposal of PFAS and in groundwater treatment.

The settlement "is the beginning of helping our utility members in the fight against PFAS," said John O'Connell, board president of the National Rural Water Association, in a statement. It includes 50 state associations representing more than 31,000 water and wastewater utility systems, and worked on lawsuits on behalf of members.

DuPont Settlement Fine Print

Meanwhile, related to the settlement by DuPont and its spinoffs, state- and federally-owned water systems are excluded, as are smaller water systems now exempt from PFAS monitoring and those in the lower Cape Fear River Basin in North Carolina. 

In a June 5 statement. the Cape Fear Public Utility Association said it "has not been provided with the terms of the agreement and we do not know what compensation [the agency] should expect if it were to participate. Litigation will continue until the polluter provides solutions that meet our community needs." The utility, which completed in 2022 a $43 million PFAS water treatment facility with an estimated $2.9 million annual operating cost, sued the firms in March to prevent financial restructuring impacts. 

According to a joint press release from the companies, Chemours will fund half of the settlement, contributing about $592 million. DuPont will provide approximately $400 million and Corteva will add an estimated $193 million. Chemours and Corteva were each formed over the past decade to manufacture performance and agricultural chemicals, respectively.

The proposed settlement also comes amid a spate of lawsuits filed by state attorneys general accusing PFAS manufacturers of contributing to soil and groundwater contamination while willfully concealing evidence of the substances’ toxicity. Due to their pervasiveness and slow degradation, the U.S. Environmental Protection Agency recently proposed new PFAS standards for drinking water

While the full extent of long-term exposure in humans has yet to be determined, the Centers for Disease Control cites animal studies that link PFAS with liver and immune system damage, low birth weight, birth defects and other detrimental effects on newborns.

"The settlement is a significant amount of money, but will not come close to covering treatment costs unless state environmental agencies get serious about stopping PFAS pollution at the source," says Geoff Gisler, program director at the Southern Environmental Law Center. "Drinking water utilities will likely have to spend millions of dollars each to treat river water contaminated by PFAS, meaning that even more than a billion dollars won’t go very far for the thousands of potentially eligible utilities and their customers."

A potential $11 billion funding award would help utilities using carbon filtration, which has been an effective treatment, attorney Allyson Cunningham, an environmental and toxic tort expert at Lathrop GPM LLP, told Bloomberg Law June 8. But those using reverse osmosis face higher costs, she said. 

Another EPA proposal to designate two PFAS chemicals—perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)—as hazardous substances under the Superfund law also would boost compliance costs for utilities, Gardella said. 

In comments filed to EPA in early June, the American Water Works Association estimated the annual cost of utility compliance with state and federal PFAS removal and treatment rules at between $2.5 billion and $3.2 billion.

The settlement status of other litigation defendants, such as BASF Corp., Honeywell International Inc. Phillips 66 Pipeline LLC, and Raytheon Technologies Corp. that are alleged to have produced PFAS or fire suppressants using the chemicals, is not clear, according to Bloomberg Law.