3M settles lawsuit for up to US$1 billion

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. Picture / AP

3M Co has settled a lawsuit with Minnesota's Attorney General Lori Swanson for between US$500 million ($682m) and US$1 billion, according to a person familiar with the matter. The state had sought US$5b for natural resources damage and human health problems it said were linked to a chemical formerly used in Scotchgard.

The person, speaking on condition of anonymity as the terms were not yet announced, said money will be allocated for various projects to deal with remediation. The jury trial, scheduled to run at least four weeks, came to an abrupt halt just as it was scheduled to begin.

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. 3M and a state study released on the eve of trial have 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 US relaxes environmental rules. It also shows how liability can mushroom long after companies stop making chemicals like PFCs that don't degrade and accumulate in the food chain.

3M has also been sued by people, towns and water districts nationwide, 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 Minneapolis 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. It was one of the biggest amounts sought yet in growing lawsuits over PFCs.

3M denied the claims, saying the chemicals aren't a health risk at current exposures. It hasn't found adverse effects among its employees, who are exposed at higher levels than the general population, 3M said.

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.

3M Co has settled a lawsuit with Minnesota's Attorney General Lori Swanson for between US$500 million ($682m) and US$1 billion, according to a person familiar with the matter. Picture / AP

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, adding that past results show they're often lenient when they actually settle such claims.

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.

William Brewer, a 3M lawyer, said in a past statement that the lawsuit is an "abuse of power" by Swanson. "The case is based on the mistaken belief that the mere presence of these chemicals presents harm to human health and the environment," he said.

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 US$670.7m 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.

- Bloomberg