Sustained Outrage

Chasing DuPont’s C8 liabilities


Controversy continues to swirl over DuPont’s legacy liabilities for C8 contamination.

The News-Journal reported this interesting story earlier this week:

Plaintiffs suing DuPont Co. over alleged exposure to the toxic chemical C8 want to know who is going to pay the $1 billion in damages they are seeking.

Who will be held ultimately responsible is unclear, they say, because DuPont plans to merge with the Dow Chemical Co. later this year and then split into three separate businesses by 2018.

The plaintiffs this week asked a federal judge for documents clarifying DuPont’s liabilities and obligations after the merger and subsequent split.

I’ve posted a copy of that legal filing here, and the News-Journal story continues:

In an April 18 legal filing, Julie Mazza, acting associate general counsel for DuPont, said the company has not made a decision on how the liability will be handled. Mazza also said it is unclear how the company will handle its obligations under Leach v. DuPont.

The Leach case, filed by Mid-Ohio Valley residents, was settled in 2005. Under the settlement, DuPont was mandated to pay for medical monitoring of those potentially exposed to C8 and install water filters to remove the chemical from area water supplies among other commitments. Thousands of Mid-Ohio Valley citizens had opted out of the Leach settlement to pursue their own claims. Those cases will move forward at the glacial pace of 40 cases a year starting in 2017.

“Currently, there has been no determination as to how the obligations of DuPont to the other parties under the Leach settlement agreement would be allocated as part of any post-merger separations,” Mazza wrote referring to Leach v. DuPont, which was filed in 2001.

Plaintiffs’ attorneys representing those who opted out of the Leach settlement responded to Mazza with a motion asking the court to release documents providing details on the C8 liabilities. In a separate court filing, the attorneys called Mazza’s declaration “troubling.”

“It failed to supply any meaningful information regarding where the liabilities relating to the C8 litigation will end up after the proposed DuPont/Dow merger,” wrote Michael London of Douglas & London, a New York firm. “Most importantly, the declaration failed to provide any information regarding whether DuPont will even exist after the merger transaction.”

At the same time, the growing concerns about C8 contamination continue to get picked up by the national media, this time with a report from the Wall Street Journal:

Officials in Vermont, New Hampshire and New York are expanding their efforts to find out how much of a potentially toxic chemical ended up in drinking water, from private wells to public water systems.

Public concern over PFOA has spread through upstate New York and New England since August 2014, when a resident of Hoosick Falls, N.Y., near the Vermont border, tested his drinking water and found high levels of the acid. The man was concerned because his father, a former employee of the town’s plastics plant that used PFOA, died of cancer.

And the group Keep Your Promises DuPont issued this report about their concerns regarding the company’s liabilities:

DuPont admits it is liable for C-8 obligations, yet the company does not have any accrual balance to pay for related C-8 costs. In its most recent 10-K, the company reports it has a $20 million accrual balance for PFOA costs, and a corresponding $20 million indemnification asset pursuant to its separation agreement with Chemours. Despite overwhelming evidence that DuPont’s C-8 issues are growing worldwide, the company has reported no change in accrual for C-8 liabilities and no additional disclosure. The overwhelming burden of C-8 liabilities, as well as those from Benzene, 171 undisclosed remediation sites, and other environmental issues threatens the success of DuPont’s Chemours spinoff. As these liabilities are realized, Chemours will quickly be overwhelmed and unable to fulfill these obligations, causing the liabilities to revert back to DuPont with profound consequences for DuPont, Chemours, and the companies’ stakeholders.