3M Co. has settled a lawsuit with Minnesota Attorney General Lori Swanson for $850 million, putting an end to eight years of litigation over a former Scotchgard ingredient that got into the state’s drinking water.
The funds will be used to finance projects that involve drinking water and water sustainability, according to statements from Maplewood-based 3M and the state, after Minnesota alleged that chemicals known as PFCs could cause harm to citizens.
The agreement materialized just as jury selection got underway Tuesday, and after Judge Kevin S. Burke urged the parties to compromise, saying that it wasn’t in the best interests of the state’s citizens or 3M’s shareholders for the case to drag on.
“While we have never believed there is a PFC-related health problem, this settlement allows us to move past the litigation,” John Banovetz, a 3M representative, said in the courtroom in Minneapolis after the agreement was announced.
What began in 2010 as a lawsuit over fish and waterways in Minnesota had turned into a battle over whether 3M had contributed to health problems in its home state. In November, Minnesota said it had found cancer and premature births outside Minneapolis and would seek punitive damages that would bring its total demand in the lawsuit to $5 billion. 3M and a state study released on the eve of trial said there is no health problem.
Controversy is growing over the main chemicals involved, PFOS and PFOA, as well as the entire class of perfluorinated compounds — or PFCs — which are still used in stainproof and waterproof treatments and food packaging. The situation tested a state’s ability to force a major employer to pay for pollution as the U.S. relaxes environmental rules. It also shows how liability can mushroom long after companies stop making chemicals like PFCs that don’t degrade, but accumulate in the food chain.
“These chemicals have been put into the ground for a long period of time,” said Swanson in an interview after the settlement. The state pursued funds to “relieve the burden on taxpayers who may otherwise have to pay for these problems,” she said. The first priority for the funds will be to improve water quality, she said.
3M has also been sued by people, towns and water districts across the U.S., with claims the chemicals got into drinking water from sites like air force bases where they were used in firefighting foams, and in one case, a tannery where they were used to treat leather.
3M, best known for Post-It notes, dumped chemicals at sites near St. Paul for more than 40 years — allowing them to get into wildlife and drinking water, Swanson claimed. The company knew the chemicals were harmful, but concealed the effects from regulators and distorted science on them, according to the lawsuit.
The $5 billion the state had sued for was one of the biggest amounts sought yet in growing lawsuits over PFCs, and Swanson called it the largest environmental suit in the state’s history.
3M denied the claims, and said it hasn’t found adverse effects among its employees, who are exposed at higher levels than the general population. The company announced a phase-out of PFOA and PFOS — chemicals commonly used in nonstick applications such as Teflon — in 2000, around the same time as reports emerged that they were being found in most humans, including babies, and remote animals like polar bears.
It’s unusual to see a natural-resources suit raise human health issues, said Karen Bradshaw, an associate professor at Arizona State University who tracks such litigation.
“States are becoming more aggressive on natural-resources claims,” Bradshaw said in a phone interview before the settlement.
As 3M’s case progressed — at one point taking a four-year detour when the company sought to disqualify Minnesota’s counsel Covington & Burling because it had once represented 3M on the chemicals’ use in microwave popcorn bags — science advanced. In 2012, the results of a massive study of 80,000 people who sought to sue DuPont over PFOA were released, establishing links to cancers, ulcerative colitis and other health issues.
New reports on the health of Minnesota-area residents were expected to be a centerpiece of the trial. Minnesota said its expert report shows higher rates of cancers, leukemia, premature births and lower fertility in the suburbs east of St. Paul prior to 2006, when there were particularly high amounts of the chemicals in municipal water. But a week before the trial, Minnesota’s Department of Health said it didn’t find unusual rates of cancers or adverse birth outcomes.
The settlement hasn’t resolved that rift. “We have our own problems in Minnesota with regulatory agencies captive to the industries they are supposed to regulate,” Swanson said in Tuesday’s statement, adding that she expects further action from the Health Department and that it will be up the Minnesota Pollution Control Agency to enforce remediation.
Minnesota’s Department of Health said in a statement that it based its information on the “best scientific information available without favor or prejudice.”
‘Abuse of power’
William A. Brewer III, a 3M lawyer, had called the suit an “abuse of power” by Swanson.
DuPont, which spun off the PFC business line as Chemours Co. and merged into DowDuPont Inc., has faced lawsuits and regulatory actions related to the chemicals, as well as a current Teflon agent. In February last year, the companies agreed to pay $670.7 million to settle about 3,550 personal-injury lawsuits.
While most major makers phased out PFOA and PFOS, many reformulated products with other PFCs. They say the new chemicals aren’t harmful, even as scientists and regulators express growing concern.
3M will take a first quarter charge of $1.10 to $1.15 per share in the first quarter of 2018 related to the settlement, said Thomas Claps, a litigation analyst at Susquehanna Financial Group. The stock fell 0.7 percent on Tuesday.
The case is Minnesota v. 3M, 27-cv-10-28862, County of Hennepin, District Court.