Mass litigation is every casualty insurer’s worst nightmare, conjuring up memories of the unending flow of asbestos litigation and the devastating effect it had on the industry. Today, though, we’re in what seems like the throes of another potentially unending mass litigation over the “forever chemicals,” per- and poly-fluoroalkyl substances (PFAS).
Executive SummaryBased on census of all state and federal complaints citing PFAS damage and filed in U.S. courts since the litigation began 22 years ago, Praedicat reports that the litigation has already reached epic proportions. Here, Praedicat’s Adam Grossman and David Loughran report the figures, the history of the litigation to date and the current state of PFAS-related water mitigation litigation that presents a forever problem for liability insurers.
PFAS chemicals have been used in familiar brands such as Teflon and Scotchgard, and their nickname of the “forever chemicals” refers to their persistence in the environment but could just as easily refer to the amount of time the exposure remains on the liability insurance occurrence form. Many insurers are aware of the problem, at least as it relates to recent litigation over firefighting foam but also from historical exposure to some of the manufacturers of PFAS over the last 75 years, including Dupont and 3M.
Praedicat recently completed a massive data collection for its PFAS litigation tracker, a census of all state and federal complaints citing PFAS damage and filed in U.S. courts since the litigation began. The litigation has already reached epic proportions—with 5,153 complaints filed in 40 courts, naming 193 companies that span 82 industries—and has been running for more than 22 years, since the first case was filed on June 11, 1999.
Despite this scale, the data show that PFAS litigation may only be in its earlier stages.
The first stage of PFAS litigation, initiated in 1999, was the result of DuPont’s contamination of the Ohio River from waste generated by its Washington Works plant near Parkersburg, West Va. The DuPont litigation (led by Leach v. DuPont) eventually led to the creation of the C8 Science Panel in a 2004 settlement. When, eight years later, the science panel declared “probable links” to eight diseases, lawsuits from the residents of Parkersburg quickly followed, with 26 cases filed in the subsequent few months. In April of 2013, these cases and all future cases on this matter were transferred to multidistrict litigation (MDL). As of the writing of this article, the total number of personal injury cases filed in the MDL has grown to 3,725—more than three-quarters of the total number of PFAS cases filed to date. The majority were settled in 2017, and another batch was settled in early 2021, leaving only a few dozen cases still active.
The litigation data also reveal that if the PFAS litigation had ended with Parkersburg, it would have simply been a very large loss to a single company over a case of dumping industrial waste into the environment. There were only 25 other cases filed between 1999 and 2012 when the C8 Science Panel completed its work. Most of these were of little consequence, but three of them foretold what we’re seeing today: massive water remediation litigation.
In 2009, water utilities in Ohio and Florida filed lawsuits to recover the costs of removing PFAS from their water. In 2010, the state of Minnesota filed a lawsuit seeking water remediation due to contamination from a 3M PFAS plant, and this case settled in 2018 for $850 million. These cases had the distinction of highlighting the two most common ways that PFAS are dumped into the environment in large amounts: aqueous film forming foam (AFFF) and dumping from specific industrial sites.
The inclusion of AFFF as the target of litigation was also a watershed moment. It was the first claim targeting a defective product since an unsuccessful and short-lived class action claiming that Teflon emitted dangerous fumes when used for cooking. Unlike the Teflon class action, however, the AFFF litigation has become the dominant form of PFAS litigation today and spawned its own MDL in 2017 that now houses approximately 1,250 cases involving claims for water remediation and bodily injury litigation from heavily exposed firefighters.
Tracking the early litigation for PFAS would have revealed the myriad ways that plaintiff attorneys would attempt to hold PFAS-related companies responsible for the various effects PFAS has on humans and the environment. PFAS water remediation litigation was not widely known until the flurry of cases that were filed in 2016-2017, but tracking the early litigation would have provided five years’ warning where insurers could have devised strategies to manage the eventual expansion of litigation.
The real power, though, of tracking litigation comes when combining that information with tracking the evolving scientific literature investigating how PFAS can cause bodily injury. When the first lawsuit was filed in 1999, there was virtually no support in the scientific literature for PFAS causing any bodily injury. By the time the C8 Science Panel finished its work in 2012, there was enough scientific evidence that PFAS could cause reproductive and developmental injuries to support general causation arguments, although not necessarily enough evidence to be able to link a specific case of, say, infertility to a particular PFAS exposure.
At Praedicat we’ve also observed that the presence of litigation about property damage increases the likelihood of related bodily injury litigation, and vice versa. The work of the C8 Science Panel combined with the increasing attention paid to PFAS by other scientists around the world rapidly advanced the science in the first half of the 2010s. These two phenomena combined to suggest that the early litigation based in Parkersburg and the subsequent individual water remediation lawsuits in Florida and Ohio were likely to be precursors of wide-ranging litigation.
What’s next for PFAS litigation?
Again, combining the evolving scientific literature with the litigation tracking data suggests that we will not see litigation limited to industrial sites and the military bases and airports where AFFF was used. Similarly, bodily injury litigation will likely not remain limited to firefighters exposed to PFAS via AFFF and their protective gear.
It is possible that PFAS water remediation litigation could expand to include defendants in industries from all the other ways PFAS get into the environment: food-contact paper, waterproof shoes and textiles, carpet protectant, cables and wiring, floor polish, semiconductor manufacturing, and more. We’ve already begun to see this expansion, with suits against both shoe and carpet manufacturers already filed.
Regulators and scientists are not finished identifying PFAS exposures yet, either. Just a couple months ago, PFAS were found in some pesticides despite not being a declared ingredient in them. Further investigation by EPA suggests that the process used to fluorinate high-density polyethylene pesticide containers created PFAS that ended up contaminating the pesticides. The result is that PFAS were spread directly into the environment via pesticide applicators.
Non-governmental organizations have done independent testing of several classes of consumer goods, including cosmetics and menstrual underwear, and found unexpectedly high levels of PFAS in them as well.
With a surfeit of ongoing litigation and more sure to come, what’s an insurer to do?
Casualty insurers today are adopting broad-based PFAS exclusions to protect against additional exposure. Many carriers probably wish they had adopted these exclusions years ago, and perhaps they would have had they been closely tracking both the science and litigation as they were developing.
The question now, though, is whether PFAS still presents an opportunity for risk transfer. Keeping close tabs on litigation and science, some carriers may find opportunity to write back PFAS coverage on a named-peril basis for downstream users of PFAS about which scientists have minimal concern.
And insurers with significant legacy exposure to PFAS may be in a position to quantify and, therefore, transfer future claims to the runoff market.
Finally, the growing crop of runoff insurers should be sure to investigate and price the exposure to the forever chemicals in their clients’ portfolios.