This article is based on presentations by Cliff Brinson and Addie Ries, attorneys at Smith Anderson.

Attorneys at Smith Anderson, Cliff Brinson and Addie Ries are co-chairs of the firm’s PFAS Team.

State Regulation and Litigation Pitfalls

Brinson kicked off a recent discussion with the NC Manufacturing Council by providing a quick overview of PFAS regulation at the state level, followed by a deep dive on the types of litigation around PFAS.

In addition to regulation at the federal level (learn more about that here), states are developing their own PFAS regulations.

• Some states have their own maximum contaminant levels for drinking water, which can potentially be more strict than federal EPA requirements.
• There are labeling and reporting requirements in some states regarding PFAS and how it’s used in the manufacturing process.
• Some states have also outright banned the sale of certain products containing “intentionally added” PFAS. While the products vary by state, some examples include food packaging, rugs, carpets, furniture, clothing, cosmetics, cookware, and children’s products.

While North Carolina does not currently have any major PFAS laws or regulations, the North Carolina Department of Environmental Quality has proposed surface water and groundwater regulations and there have also been numerous PFAS-related legislative proposals over the last few years.

Turning from regulation to litigation, there are various categories of PFAS litigation, including:

• Manufacturing cases, where the defendants are generally companies that manufacture PFAS or use PFAS to manufacture some other product. Claims are based on discharges into the environment, specifically the surrounding water and soil, and often brought by a state or, in some cases, by private individuals.
• Firefighting foam is currently the largest area of litigation with more than 9,500 cases filed in a multi-district litigation (“MDL”) related to Aqueous Film Forming Foam (“AFFF”). AFFF is used to put out certain types of oil and gas fires. Defendants in these cases include companies making the foam, those making the chemicals used in the foam, and those making the chemicals that are in the chemicals that make the foam. The cases are being brought by water providers (the municipalities and private companies that supply drinking water to the public and claim PFAS contamination of their water sources from AFFF), as well as individual firefighters who have used AFFF as part of their job and allege personal injury claims from occupational exposure, and people living near military bases or airports where AFFF was used frequently who allege personal injury claims from ingesting PFAS contaminated water . As with the manufacturing cases, states are getting involved (North Carolina is one of those states) and claiming damage to natural resources.
  • While we have seen major settlements in the water provider cases, right now the focus of the litigation is on personal injury claims. These are important cases for PFAS litigation more generally because they raise some challenging causation issues, including:
    • General causation (i.e., whether the type and amount of PFAS to which the plaintiff was exposed is generally capable of causing the alleged harm in humans),
    • Specific causation (i.e., whether plaintiff’s injury was caused by PFAS, as opposed to one of many other potential causes), and
    • Product identification (i.e., whether the PFAS that caused plaintiff’s injury came from the defendant’s product, as opposed to one of many other plausible sources).

These types of causation issues may affect other types of personal injury cases regarding PFAS so there is great interest in seeing how these issues are decided.

• Consumer protection cases are lawsuits against consumer-facing companies that allegedly have PFAS in their products. The claim in these cases is essentially that the defendant engaged in false advertising by not disclosing the presence of PFAS in its products. This is not a personal injury claim; instead the plaintiffs are saying that they would not have purchased or would have paid less for the product if they had known it contained PFAS. The dollar value of any individual claim is small, so many of these cases are brought as class actions. Thus far, many of the cases have been dismissed but it is too soon to tell whether these types of cases will ultimately be successful. Industries that have been hit with these types of claims include:
  • Packaging (McDonald’s, Burger King, Coca-Cola, Kerrygold, Colgate-Palmolive, Purina)
  • Clothing (Thinx, REI, The Children’s Place)
  • Makeup (L’Oreal, Cover Girl)
  • Other (BIC razors, Costco baby wipes)

Managing Your Risk

It has been said that PFAS is the “next asbestos” and while our presenters did not confirm that, they did agree that there are a lot of parallels and lessons learned on the benefits of acting early.

Ries outlined risk management strategies that businesses, especially manufacturers, should consider now to assess and mitigate risk. Ries emphasized that every business’s circumstances are different and reminded that these considerations do not apply to all PFAS at all levels and should not be construed to mean that all PFAS are hazardous.  With that in mind, these strategies are a non-exclusive list of considerations for PFAS planning.

• Develop a PFAS Plan: Even if current litigation and regulation does not apply to you directly, it is still likely it will impact your business. Your real estate purchases and supply chain may be affected and you may receive surveys from your customers asking whether your products contain PFAS.
• Connect With Your Industry Group: Ask your industry group what they are monitoring on this topic as it relates to your industry. Your collective voice, and sharing best practices, will be a force multiplier in your risk mitigation efforts. The NC Chamber is engaged on this issue on behalf of the collective business community and as the exclusive North Carolina affiliate for the National Association of Manufacturers.
• Consider Retaining Counsel: Gather your team and consider hiring counsel to advise you on federal and state regulatory obligations and help determine the potential impacts on your operation, products, real estate, contracts, and insurance. Counsel can help investigate risks, determine obligations, and advise on solutions.
• Inventory Your Products and Supply Chain: Assess whether PFAS is present in your operations or products — this may require surveying your suppliers to understand what is in the materials you are buying (e.g., components you are purchasing to make products, the chemicals you are using, and even the waterproof or stainproof personal protective equipment (PPE) you may have for employees).
• Outline Your Plan of Action: Once you know where PFAS is in your processes and supply chains, you can assess and plan to mitigate risk, including the following items.
  • Protect your employees with training and PPE if needed.
  • Ensure appropriate disposal. Ries recommended this EPA guidance, and noted that the chart on page 18 describes potential sources of PFAS waste for certain industries.
  • Mitigate air and water emissions if needed.
  • Assess impact on wastewater permit applications and renewals.
• Assess Reporting Requirements and Regulatory Compliance Obligations: Determine whether you are required to report PFAS uses, volumes, disposal, etc. under TSCA and/or state law. These reporting requirements can be fairly burdensome under TSCA and some states have reporting requirements that are broader than TSCA so make sure you are aware. Some states have other PFAS regulations which limit or prohibit the use of PFAS in some applications.
• Explore Potential Alternatives: Work to understand why the PFAS is there if possible. While PFAS provide properties that are unmatched and there may be good reasons for continued use of PFAS in many applications, depending on the circumstances, you may wish to consider if alternatives would be appropriate.
• Review Safety Data Sheets and Labels: Confirm you are clear on proper use and disposal of products you are buying and selling. Make sure your labeling is accurate as to presence of PFAS.
• Consider implications of PFAS in Real Estate and Business Contracts: If you are buying or selling products with PFAS, review your insurance coverage (if applicable) and your indemnity obligations. The real estate implications are very important due to CERCLA – learn more about that here. Know what risks you are assuming so you can make informed decisions about your supply contracts, real estate transactions, and business lines.

Now is the time to find out how much or how little your business is impacted by PFAS. There is not a one-size-fits-all approach to this and getting up to speed now will be critical as the liability continues to expand in this space.

To learn more about Brinson and Ries, or to contact them, click here.