Legal Terrain

When working with my colleagues on real estate and corporate business transactions, I feel like I can be a nay-sayer, bringing up the considerations of potential liability for PFAS-related releases during environmental due diligence. However, with the unsettled possibility of acquiring PFAS liability and the increase in class action lawsuits to address PFAS contamination, the risk of litigation amplifies the potential pitfalls associated with targets that have exposure to PFAS-liability.

This uncertainty persists partly because there are still open questions about the correlation between PFAS and negative health outcomes. There was some hope that the large multi-district litigation for PFOS in the United States District Court in South Carolina would address some of the difficult causation issues concerning PFAS and major health impacts; the global settlements with 3M and the Dupont-related entities dodged the formal resolution of causation questions. Some follow-on test-case trials are proceeding, which may provide strong findings and precedent on causation for future cases. For the time being, there is still a fair amount of uncertainty from these matters proceeding on an ad hoc basis.

In addition, though EPA has shown some leadership on this issue, the delay in a formal rulemaking that would make certain PFAS compounds listed as hazardous substances under CERLA adds to the unpredictability – which is, of course, a strain on transactional opportunities. EPA has issued interim health advisories for PFAS, but these measures do not have the same rigor as regulations.

With the lack of clarity on causation and continued ambiguity in federal regulations, and with many impacted private drinking water sources not covered by the PFOS manufacturers’ settlements out of the multi-district litigation, we are beginning to see more class action claims for impacted private water supplies. These self-help efforts combine environmental actions with traditional common law torts, allegations of ultrahazardous activity, failure to warn claims, and requests for ongoing medical monitoring.

The specter of these actions is a major concern in due diligence activity. In our experience, these actions are even worse for the existing businesses ensnared in the tentacles of a sprawling suit looking to draw in every entity that may have contributed a nanogram of PFAS to a release.

The Massachusetts Attorney General’s Office has a claim in the multi-district litigation regarding the impacts of PFAS from AFFF on water supplies. While the impacts from AFFF are significant, many other sources of PFAS are fouling public and private water supplies. The Commonwealth would benefit from a more aggressive and comprehensive approach to getting the major PFAS manufacturers and responsible parties to fund the remediation of drinking water resources in the State. Without a broader approach to financing and coordinating the restoration of clean drinking water supplies, numerous companies, and small businesses in the state without significant responsibility for PFAS contamination will be subjected to extensive litigation.

While a PFAS-litigation free-for-all may be good for lawyers’ billable hours, it is not likely to result in timely or meaningful remedial action to address and remove PFAS from our drinking water. A coordinated state-level initiative is much more likely to provide a positive and expeditious resolution to this man-made scourge. A comprehensive remedial solution would reduce PFAS concentrations in drinking water, and it would also remove the damper effect this looming environmental liability is having on business growth and development.