DuPont Story Archives - West Virginia Public Broadcasting

DuPont, Chemours Reach Agreement Over 'Forever Chemicals'

The Dupont Co. and its spinoff business Chemours have agreed to resolve legal disputes over environmental liabilities for pollution related to man-made chemicals associated with an increased risk of cancer and other health problems.

The binding memorandum of understanding announced Friday comes just over a month after Delaware’s Supreme Court upheld the dismissal of a lawsuit alleging that DuPont massively downplayed the cost of environmental liabilities imposed on Chemours when DuPont spun off its former performance chemicals unit in 2015.

The chemicals at issue are known as per- and polyfluoroalkyl substances, or PFAS. They include perfluorooctanoic acid, or PFOA, which was used in the production of Teflon, and have also been used in firefighting foam, water-repellent clothing and many other household and personal items. They sometimes are referred to as “forever chemicals” because of their longevity in the environment.

The memorandum resolves legal disputes originating from the spinoff and establishes a cost-sharing arrangement and escrow account for potential future legacy PFAS liabilities arising out of pre-July 1, 2015 conduct.

DuPont, Chemours and Corteva, an independent public company that was previously the agriculture division of DowDuPont, also have agreed to resolve about 95 pending cases, as well as other unfiled matters, in multidistrict PFOA litigation in Ohio. The $83 million settlement will be split roughly equally among the three companies. It does not include a case that resulted in a $50 million jury verdict in March that DuPont is appealing.

The Ohio verdict stemmed from a class action lawsuit involving about 80,000 residents of Ohio and West Virginia who drank water that was contaminated by chemical releases from DuPont’s Washington Works facility near Parkersburg, West Virginia.

More than 3,500 individual class members who suffered from any of six diseases linked to PFOA filed individual personal injury cases against DuPont. Those cases have been centralized in Ohio federal court.

After three trials in which juries returned verdicts in favor of the plaintiffs, DuPont agreed in 2017 to settle the remaining 3,500-plus cases.

Since that time, more than 100 post-settlement cases have been filed. The first trial in those cases resulted in a $50 million verdict for a man who developed testicular cancer, and a mistrial in a consolidated case involving a woman with kidney cancer.

“The agreement will provide a measure of security and certainty for each company and our respective shareholders using a transparent process to address and resolve any potential future legacy PFAS matters,” the CEOs of the three companies said in a joint statement.

Under the cost-sharing arrangement, DuPont and Corteva, on one hand, and Chemours, on the other, agree to a 50-50 split of certain expenses incurred over a term not to exceed 20 years, or an aggregate $4 billion of qualified expense and escrow contributions.

Under an existing agreement from 2019, DuPont and Corteva will each bear 50% of the first $300 million. After that, DuPont would be responsible for 71% and Corteva for the remaining 29%. That would bring DuPont’s share of the potential $2 billion contribution from DuPont and Corteva to about $1.36 billion. Corteva’s share would be about $640 million.

The companies also agreed to establish a $1 billion maximum escrow account to address potential future PFAS liabilities, with annual contributions over eight years.

After the expiration of the arrangement, Chemours’ indemnification obligations under the separation agreement would continue unchanged, subject to certain exceptions. Chemours will waive legal claims regarding the 2015 spinoff, and pending arbitration regarding those claims will be dismissed.

Chemours sued DuPont in 2019, alleging that DuPont deliberately lowballed the cost of environmental liabilities Chemours would face in reimbursing DuPont for pollution related to PFAS.

But a Delaware judge ruled that he had no jurisdiction to hear the case because the separation agreement between the companies clearly states that all disputes arising from the spinoff are subject to binding arbitration.

Chemours argued on appeal that the arbitration clause was unenforceable because the designated management team of Chemours did not give its consent but was instead forced to follow the dictates of DuPont as the parent company.

When it spun off Chemours in 2015, DuPont had pegged the maximum liability in the multidistrict litigation involving the 3,500-plus PFOA cases at $128 million. The company settled 19 months later for $671 million, agreeing to pay half the settlement amount, and up to $125 million more toward costs of other PFOA-related litigation. Chemours paid the other half.

Chemours argued in its lawsuit that DuPont had “a keen incentive” to downplay environmental liabilities while extracting a multibillion-dollar dividend from Chemours that would help fund a stock buyback.

A Chemours attorney told the judge, for example, that Chemours faced more than $200 million in costs to address environmental issues at a North Carolina manufacturing facility — 100 times more than DuPont’s estimated $2 million maximum liability. Chemours also said potential environmental liabilities in New Jersey far exceed the $337 million previously cited by DuPont.

Chemours asked the judge to limit DuPont’s indemnification rights to the maximum liabilities it certified, or for an order directing the return of the $3.9 billion dividend.

West Virginia Suit Filed Over Exposure To Firefighting Foam

Seven companies have been named in a lawsuit related to the contamination of a West Virginia city’s water supply from firefighting foam.

The lawsuit filed by Charles Town attorney Stephen Skinner seeks damages for exposing Martinsburg residents to chemicals known as per- and polyfluoroalkyl substances, or PFAs. Among the defendants in the lawsuit filed last month in federal court were 3M Co., DuPont Co. and Chemours.

Last year, the Air Force agreed to reimburse $4.9 million to Martinsburg for expenses related to the 2016 cleanup of hazardous chemicals from the city’s water supply. A statement at the time from U.S. Sen. Shelley Moore Capito of West Virginia said the source of the contamination was firefighting foam used by the Air National Guard at the Eastern Regional Airport to put out oil-based fires.

The Environmental Protection Agency identified high levels of contamination linked to PFAs and mandated that additional water filtration systems be installed at a treatment plant, Capito’s release said.

The lawsuit, which seeks unspecified damages and medical monitoring, alleges negligence, battery, failure to warn, and design defect. Skinner said the companies knew the materials were dangerous and that the contamination was preventable.

“Chemical companies have known for decades that PFA compounds don’t break down and that they accumulate in the human body,” Skinner said in a news release. “Those exposures can lead to illness.”

In a statement, 3M said it “acted responsibly” in the manufacture and sales of firefighting foam and “will vigorously defend its record of environmental stewardship.”

Messages left with DuPont and Chemours were not immediately returned Thursday.

An order filed Monday will transfer the lawsuit to federal court in South Carolina, where dozens of other similar lawsuits were sent, news outlets reported.

Dem. Lawmakers Advocate For Regulation And Research Of Water Contaminating Chemicals

Democratic lawmakers Thursday drummed up support for boosting water protections to address a handful of toxic, man-made chemicals.

Perfluoroalkyl and polyfluoroalkyl substances, more broadly known as PFAS chemicals, have been widely used in everything from food packaging to nonstick coatings. The class of chemicals includes C8, or PFOA, the chemical produced and dumped in the Parkersburg area for decades by chemical giant DuPont.

The effect of the chemical and related events were recently brought to the silver screen in the blockbuster film, “Dark Waters” starring Mark Ruffalo and Anne Hathaway.

The “Clean Drinking Water Act of 2020” has now been introduced in both the House of Delegates and Senate.

The bill would create an interagency taskforce to determine the extent of PFAS contamination across West Virginia. If passed, the bill would also require industrial sites that use or have used PFAS chemicals to report and monitor their use to state regulators. It would also require the Department of Environmental Protection to set drinking water standards for a handful of PFAS chemicals.

At a press conference Thursday afternoon at the Capitol, Evan Hansen, (D-Monongalia), sponsor of the House version, H.B. 4542, said it is time West Virginia takes action to address PFAS chemicals.

“They’re not effectively regulated at the state level or the federal level, and they’ve hurt people in West Virginia,” he said. “In an ideal world, the federal EPA would take the lead on this and come up with national standards, but unfortunately they’ve been dragging their feet and that’s forced state after state to matters into their own hands. So, that’s what we’re doing here today.”

Neither bill has been placed on a committee agenda yet, but supportive Democrats argued the legislation is largely aimed at collecting better science and not a heavy burden on industry.

Sen. William Ihlenfeld II (D – Ohio) is the lead sponsor of S.B. 679. He said that adopting strong science-based protections would boost business confidence across West Virginia.

“There’s a false narrative in the building that we can’t have a healthy environment and a strong economy,” he said. “We absolutely can have both and this type of legislation is not overly burdensome — it’s not a heavy lift for industry.”

That is a sentiment echoed by Charleston resident and former small business owner, Nancy Ward. Her shop, Cornucopia, closed in 2015, she said in part due to slumping sales following the 2014 water crisis.

“If you want to keep businesses here you have to keep the people here and you have to keep them healthy,” she said.

Hansen acknowledged that while many lawmakers support the sentiment of protecting water, for some, supporting the bill that places the spotlight on chemical users and producers will be an uphill battle.

Congress Hears Testimony From Chemical Company Executives On PFAS Contamination

Executives from three major chemical companies — DuPont de Nemours, Inc., The Chemours Company and The 3M Company — testified for the first time to Congress about widespread contamination from the group of nonstick, fluorinated chemicals broadly called PFAS.

The so-called “forever chemicals” persist in the environment, are linked to ill health effects, and have been found in numerous water systems in the Ohio Valley.

The hearing — the third on PFAS contamination by the House Committee on Oversight and Reform’s Subcommittee on Environment — explored the extent to which companies that make PFAS chemicals knew about its impacts on human health and the environment and how they should be held accountable.

“These companies with us here today have screwed up and we need to hold them accountable for doing so,” said Committee Chairman Rep. Harley Rouda from California. “I hope the people representing those companies here today will admit their mistakes so that we can all move forward and achieve what I believe is our common goal: to clean up contaminated sites, stop exposing innocent people to toxic chemicals and making sure that all Americans have clean water and clean air.”

Concern over PFAS contamination has grown nationwide. The Environmental Working Group estimates the drinking water systems of more than 700 communities are contaminated with PFAS. Perfluoroalkyl chemicals were used to make nonstick products and are found in some flame retardants including firefighting foam.

Company executives called to testify focused on internal efforts to address concerns over PFAS in the face of major high-profile lawsuits and settlements over contamination in West Virginia and Minnesota. All expressed support for the U.S. Environmental Protection Agency’s “action plan.” The agency in February proposed a series of regulatory steps to address PFAS contamination and cleanup.

Lawmakers in both parties criticized EPA for not moving swiftly enough. Congress is considering amendments to its 2020 defense spending bill that would speed up EPA’s timeline and regulate the entire class of PFAS chemicals.

Company executives were split over how PFAS chemicals should be regulated, although none supported broad legislative action to regulate all 5,000 PFAS chemicals.

A representative from DuPont went the farthest. Daryl Roberts, DuPont’s chief operating and engineering officer, told the House subcommittee the company welcomed specific regulatory actions, such as listing two PFAS chemicals, PFOA and PFOS, as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, also known as the Superfund law.

“We support legislation to list PFOA and PFOS, and only those two, as hazardous substances under CERCLA. That’s further than the other companies here are willing to go today, but that’s what we believe is correct,” he said. “What we know about those chemicals is that they’re bio-persistent. That’s enough to know that there’s a clear concern for those chemicals within society at this point in time, and we feel for that reason they should be regulated.”

DuPont no longer makes PFAS chemicals. It split off its fluorinated chemicals business in 2015 to Chemours. A representative from Chemours said that company did not support such regulation. Chemours and DuPont are engaged in litigation over the split. Chemours argues DuPont misrepresented the environmental liabilities associated with PFAS chemicals.

3M’s Senior Vice President of Corporate Affairs, Denise Rutherford, doubled down on her company’s claim that there are no negative health effects from PFAS exposure.

“When we look at that evidence there is no cause and effect for adverse human health effects at the levels we are exposed to as a general population,” she said.

That didn’t sit well with some Democrats, including New York Rep. Alexandria Ocasio-Cortez who said this position goes against findings from government agencies and 3M’s own scientists.

The federal government’s Agency for Toxic Substances and Disease Registry says some studies in humans with PFAS exposure have shown: effects on growth, learning, and behavior of infants; an increase cholesterol levels; effects on the immune system; and an increase in the risk of cancer.

The hearing began with testimony from two attorneys whose lawsuits against DuPont and 3M unearthed thousands of internal company documents that showed both companies knew the chemicals were dangerous to human health and the environment for decades, but didn’t tell its employees or federal regulators.

Rob Bilott, an Ohio-based attorney who successfully brought a class action lawsuit against DuPont for its dumping of PFOA, sometimes called C8, near its plant in Parkersburg, West Virginia, told lawmakers he and his team for 18 years have funneled scientific studies from within DuPont to EPA that enumerated the health risks associated with exposure.

In 2012, an independent panel of scientists — the C8 Science Panel — concluded drinking PFAS contaminated water was linked with six diseases, including kidney and testicular cancers.

The group looked at all existing studies and conducted new ones on 70,000 impacted community members from around the Parkersburg area.

“This independent scientific review has occurred. Unfortunately EPA has not acted,” Bilott testified. “We have more than enough evidence. We should move forward and protect the public.”

Chemours Says DuPont Lowballed Environmental Liabilities

The DuPont Co. massively downplayed the cost of environmental liabilities with which Chemours would be saddled when DuPont spun off its former performance chemicals unit in 2015, according to a lawsuit unsealed Friday.

The maximum liability exposure figures that DuPont certified prior to the spinoff have proven to be “systematically and spectacularly wrong,” Chemours alleges.

Chemours, for example, claims that it faces more than $200 million in costs to address environmental issues at a North Carolina manufacturing facility, 100 times DuPont’s estimated $2 million maximum liability. Potential environmental liabilities in New Jersey similarly far exceed the $337 million cited by DuPont at the time of the spinoff, Chemours contends.

DuPont has filed a motion to dismiss the lawsuit, saying any disputes arising from the separation of its former performance chemicals unit must be resolved through private arbitration.

“Chemours’ claims center on its hyperbolic allegations that the separation agreement was a one-sided ‘cram down.’ Far from it,” DuPont attorneys wrote in court filing Friday. “The spinoff of DuPont’s Performance Chemicals business into Chemours complied with all applicable legal requirements and followed standard practices relating to such transactions.”

Chemours said the filing of the lawsuit was in the best interest of its stakeholders.

Chemours is asking a judge to declare that it is not responsible for liabilities exceeding the maximums certified by DuPont. It also wants to be able to get DuPont to cover any historical DuPont liabilities that exceed the caps. Alternatively, it is asking that the $3.9 billion divided it paid DuPont at the time of the spinoff be returned.

The lawsuit was filed under seal last month, but Chemours failed to file a redacted, public version as required within three days. A redacted version — virtually entirely blacked out — was docketed shortly after The Associated Press pointed out the expiration of the deadline and asked the court to unseal the complaint. A judge ruled that the continued secrecy violated court rules and ordered the complaint unsealed. Delaware’s Supreme Court on Wednesday rejected an appeal by DuPont.

Chemours claims that DuPont had “a keen incentive” to downplay environmental liabilities while extracting a multibillion-dollar dividend from Chemours that would help fund a stock buyback to ward off activist investor Trian Fund Management.

At the time of the spinoff, DuPont was facing multidistrict litigation involving 3,500 personal injury claims related to PFOA, a chemical used in the production of Teflon, Chemours noted. DuPont pegged the maximum liability for those cases at $128 million. It settled 19 months later for $671 million, with DuPont agreeing to pay half the settlement amount, and up to $125 million more toward costs of other PFOA-related litigation.

DuPont similarly downplayed environmental liabilities at its Fayetteville Works plant in North Carolina, despite undertaking a study in 2010 to address chemical discharges into the Cape Fear River, which provides drinking water for tens of thousands of people, Chemours claims. DuPont’s options included investing $60 million to end the discharges, but the recommendation was to spend $20 million to reduce discharges by 70%. Instead, according to the lawsuit, DuPont spent $2.3 million on a system that eliminated only one waste stream.

“Coincidentally, this decision came right around the time DuPont conceived and announced its plan to spin off Chemours,” the lawsuit states. “… Why bother spending money to fix the problem, DuPont apparently reasoned, when it could be conveniently passed on to Chemours.”

In a consent order with the state of North Carolina, Chemours agreed last year to pay a $12 million penalty and $1 million for investigative costs, and to sharply reduce air emissions of compound known as GenX. The company says the total cost of the consent order will exceed $200 million.

New Jersey officials, meanwhile, filed several lawsuits against DuPont and Chemours earlier this year over DuPont’s legacy environmental liabilities. According to Chemours’ lawsuit, state officials warned that the cost of compensating the state could be “staggeringly expensive.”

April 1, 1926: Belle DuPont Plant Produces North America's First High-Pressure Processed Ammonia

On April 1, 1926, the DuPont plant at Belle produced North America’s first ammonia made from a high-pressure process. A few years before, chemical giant E. I. DuPont had decided to build an ammonia plant, using technology developed by Germany during World War I. The technology consisted of giant mechanical compressors, called ‘‘hypers,’’ which generated up to 15,000 pounds of pressure per square inch. In 1925, DuPont started construction of its new hyper-pressure plant in the eastern Kanawha County town of Belle.

The DuPont Belle Works went on to achieve many firsts. In 1927, it produced the first commercial synthetic wood alcohol, known as methanol. From 1937 to 1946, the plant generated rootstock chemicals for the world’s entire supply of nylon. All nylon used by the U.S. armed forces during World War II came from chemicals produced in Belle. By the early ’50s, more than 5,000 people worked at the DuPont Belle Works.

Production was reduced in the late 20^th century, with ammonia eliminated as a product in 1978. Today, the plant still produces specialty chemicals, but with automation and new technology, the workforce has fallen below 700.