As the EPA nears finalizing recently proposed environmental regulations related to per- and polyfluoroalky substances ("PFAS"), corporate America waits with bated breath.
Businesses involved in the manufacturing and sale of PFAS or PFAS-containing products are closely monitoring the legal landscape surrounding PFAS litigation. With the pending multibillion-dollar settlements between 3M, DuPont-related entities, and U.S. public water providers, the public is finally becoming more aware of PFAS. Public sentiment is now turning towards holding companies traditionally associated with making PFAS (such as 3M and DuPont) responsible for addressing the environmental and public health concerns related to PFAS.
There is increasing concern, however, toward keeping a clear line between the manufacturers of PFAS, who understood the damage their products would cause, and the downstream businesses who purchased and used PFAS in their products. Often, these downstream businesses were unaware that their products contained PFAS, or they failed to fully appreciate all the risks associated with using PFAS in their products, because the makers of the PFAS historically withheld or covered up that information. Thus, over the last 70 years, PFAS made its way into thousands of products throughout the stream of commerce, including cosmetics, carpets, food packaging, and clothing, with many of the companies involved in making those products not realizing that PFAS might be involved.
Now, there are concerns that these downstream customers who received PFAS (often unknowingly) for use in their products might be pulled into the ever-expanding scope of PFAS litigation. Many of these companies are now concerned that the scope and scale of this litigation could expose them to potential bankruptcy issues. They point to the recent Chapter 11 filing by Kidde-Fenwal Inc., which filed for Chapter 11 in the face of over 4,400 lawsuits related to its PFAS-laden firefighting foam. Yet, unlike many downstream companies who had no idea the products they were purchasing or making contained PFAS, Kidde-Fenwal Inc. specialized in making fire detection and suppression products known to contain PFAS.
As more PFAS litigation and corporate bankruptcies hit news headlines, public awareness of which products contain PFAS is likely to continue increasing. A September 20, 2023 Notice of Availability and Request for Information filed by the U.S. Consumer Product Safety Commission ("CPSC") seeks to increase public awareness regarding PFAS. CPSC is seeking data on the usage of PFAS in consumer products, the exposure risks from products containing PFAS, and the potential human health impacts of those exposures. This sort of information will lead consumers to question whether they have been exposed to PFAS via consumer products, and if so, who they can hold responsible. A Consumer Reports investigation found PFAS in packaging from every retailer they investigated, including internationally-known fast-food chains and even companies that promote healthier products.
The dividing line between the manufacturers of PFAS (such as 3M and DuPont) and the downstream users of PFAS (such as fast food retailers) should be easy to define, although no single universally accepted legal test has been agreed upon to make that distinction. However, where that dividing line is drawn will undoubtedly impact the legal liabilities of the companies involved in manufacturing and selling PFAS and PFAS-laden products all up and down the supply chain, which in turn, will impact the likelihood of which companies could face potential bankruptcy threats from PFAS liabilities. Regulations promulgated by EPA, and the evolution of PFAS litigation, will continue to transform the legal landscape surrounding PFAS.
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