PFAS Litigation Update - Water Finance & Management
How Phase II Drinking Water Settlements Class Members, Wastewater Utilities and Airports Should Prepare
By Mike DiGiannantonio
The majority of U.S. drinking water systems affected by PFAS contamination are the beneficiaries of landmark settlements from 3M, DuPont, Tyco and BASF totaling more than $14 billion. The settlements came as a result of the Aqueous Film-Forming Foam (AFFF) multi-district litigation (MDL) efforts, which consolidated hundreds of PFAS product liability lawsuits nationwide.
While the settlements only benefit drinking water claims, the MDL also includes hundreds of lawsuits brought by wastewater operators, airports, private property owners, states, territories and tribes seeking to hold manufacturers accountable for PFAS contamination. As public utilities and other plaintiffs develop their funding strategy to pay for PFAS mitigation, filing a claim as part of the ongoing MDL can prove a substantial source of funding.
All qualifying public water systems are automatically included in the 3M and DuPont drinking water settlements, unless they successfully opted out before last year’s opt-out deadlines to reserve their right to file a suit against 3M, DuPont or other named defendants in the future.
The claims process for participating systems to secure the settlements funding is ongoing, with claims submission now closed for Phase I class members (the deadline was July 26, 2024) and claims submission underway for Phase II class members. Each Phase will be awarded their money at different times. Phase I systems are expected to begin receiving funds this year, while Phase II systems should start receiving their funds in 2027.
Upcoming Deadlines for Phase II Water Systems
A Phase II qualifying class member is an active public water system that clocked a PFAS detection after late June 2023 and is required to test for certain PFAS under UCMR-5. Again, water systems that successfully opted out of the settlements are not included.
For Phase II water systems, now is the time to take action to claim their portion of the settlements funds. While eligible water systems are automatically part of the settlements, they must submit the appropriate paperwork within the designated deadlines to receive the funds, and water systems that miss the deadlines will forfeit their ability to collect them. Systems that didn’t opt out of the settlements are precluded from pursuing litigation against both 3M and DuPont in the future, therefore timely participation in the settlements process is their ONLY chance to receive funding from these manufacturers.
The first deadline for Phase II class members is Jan. 1, 2026, the date by which they must submit a testing claims form. The testing step requires water systems to complete baseline testing for PFAS in every groundwater well and surface water treatment plant they own or operate. To qualify for an award, this testing data is mandatory in order to be assessed by the claims administrator. Testing results must be submitted within 45 days of receiving results, and no later than July 1, 2026. Following the testing data submission stage, Phase II class members have until June 30, 2026, to submit their final claims form for the DuPont settlement and July 31, 2026, for the 3M settlement.
A Special Needs Fund was created to help water systems make separate claims for immediate challenges during the remediation process, such as buying water from an alternative source if shutting down a well is required as part of mitigating high contamination levels. Special needs claims forms are due Aug. 1, 2026, for both 3M and DuPont settlements.
The other two recently proposed settlements for drinking water, from BASF and Tyco, follow a slightly different approach. Both settlements include any public water system that identified PFAS in their drinking water sources by May 15, 2024. Excluded from the class are water systems operated and owned by federal or state governments, systems without PFAS detections as of May 15, small-scale transient water systems, and privately owned water sources.
Next Up: Wastewater, Airports and Other Passive Receivers
Due to the monumental amount of PFAS in the uncountable number of consumer products that already exist in nearly every home in the U.S., PFAS (via household sewage and garbage) continue to be reintroduced into source water through municipal wastewater facilities, solid waste landfills and similar entities. At airports and fire departments, where AFFF may have been used regularly over decades in firefighting training (and actual firefighting), rinsate and storm runoff through contaminated soil may introduce new PFAS into a watershed for years, even if the airport or fire department has stopped using PFAS-laden foam. The same can be said at farms where biosolids from wastewater treatment plants contaminated with PFAS have been used as fertilizer. Without corrective action in at these and similar facilities, the PFAS problem will go on indefinitely.
While drinking water is the EPA’s highest priority, scrutiny on the waste stream – including passive receivers – is expected to be next. Effective July 8, 2024, PFOA and PFOS – two common PFAS – were designated as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA – also known as Superfund). This means that the EPA now has the authority to order investigations and cleanups in areas where elevated concentrations of the compounds have been detected in soil and/or water. Reporting mandates are up too, with entities now required to immediately report PFOA and PFOS releases – which could include AFFF leaks, spills or even emergency event use – of one pound or more within a 24-hour period to the National Response Center, State, Tribal and local emergency responders. Also, the EPA has proposed adding PFOA, PFOS and seven more PFAS compounds to the list of “hazardous constituents” under the Resource Conservation and Recovery Act (RCRA).
These designations could put these entities at risk of liability if their storm runoff or treated wastewater, sludge or biosolids contain PFAS, even though as passive receivers, they had no role in creating the PFAS. The EPA has indicated that its enforcement policy is meant to prioritize industrial wastewater and will not include pursuing municipal landfills, wastewater utilities, municipal airports, local fire departments or farms where biosolids are applied to the land; in fact, it released a PFAS Enforcement Discretion and Settlement Policy officially declaring this intent. However, this discretion policy might change at any point in time and, most importantly, it does not protect those entities from liability lawsuits filed by private citizens, state governments and other third parties. A bill introduced in April – the Water System PFAS Liability Protection Act – would provide statutory protection to entities affected by the CERCLA designation. However, until or unless the bill passes, entities can be held liable.
Costs to passive receivers may include effluent treatment, solids handling, runoff management, soil mitigation and hazardous substance disposal to halt the perpetuation of PFAS. Mitigating PFAS in wastewater is a complicated and expensive business, and treatment facilities are justified in looking to the original polluters to pay for clean-up costs.
How Passive Receivers Can Start Working on a Funding Strategy
While drinking water cases have dominated the focus of the MDL so far, PFAS legal activity for other entities is also underway. Many wastewater facilities and airports, for example, have already joined the MDL with the aim of securing funds for current or anticipated clean-up costs.
Part of this preparation includes testing effluent, solids and runoff for PFOA and PFOS. Testing data gives utilities, airports, fire departments, landfills and farms the information they need to identify PFAS sources in their community, work with regulators and local industry to strategize solutions and build a case against big-name polluters responsible for the contamination.
Early involvement is key to maximizing a payout. Claims brought forth by entities such as wastewater utilities, airports, fire departments, and landfills will continue to be litigated and can potentially be resolved by future settlement proposals from the defendants or taken to trial. There is no guarantee that any settlements will include entities who did not file their own lawsuits and, even if there were, there may be an opportunity to increase potential settlement payouts by bringing their own legal action. Using the drinking water settlements as an example, water systems that filed suit prior to the proposed 3M and DuPont settlements received an expected payout bump of up to 25% compared to the claimants that didn’t join until after the settlements were agreed upon. While this is not a guarantee, the recent events on the drinking water side strongly suggests benefits to taking legal action sooner rather than later.
Another argument for early action is that statutes of limitations – which by law define how much time a plaintiff can take to file suit – limit the window for recovering damages. They vary substantially from state to state and can be as short as two years. In some jurisdictions the clock starts ticking when the harm occurred and in others when the harm was discovered, such as when any contamination was detected or suspected. Waiting until detected PFAS levels exceed state or federal regulatory levels may prohibit utilities from seeking compensation through litigation.
Litigation As a Strategic Funding Option
President Joe Biden’s Infrastructure Investment and Jobs Act has earmarked $22 billion for clean water initiatives — a substantial sum that will nonetheless be insufficient for the looming PFAS treatment overhaul that will be required just by the new MCLs for drinking water systems alone. Other affected facilities – wastewater utilities, airports, landfills, fire stations, and farms – also exist in the service of the public, with public health as a core element of all their missions. As they work tirelessly to comply with evolving regulations for emerging contaminants, legal action against the responsible polluters presents itself as a strategic funding opportunity to cover PFAS remediation capital and operating expenses.
Mike DiGiannantonio is an attorney at SL Environmental Law Group, focusing on protecting the public and environment. He is a former senior enforcement counsel and a former federal law clerk and professor of legal writing.