Environmental Risk

The ‘Next Big Environmental Threat’ Is Already Here

PFAS have lingered in the water for decades, but regulators are just now realizing their potentially dire effects on human health. Litigators aren’t waiting to hold manufacturers responsible.
By: | September 28, 2018

The ‘Next Big Environmental Threat’ has been written about before. We were worried about the insidious risks of nanoparticles, for example, and about pharmaceuticals in our water and food supply. But neither of those concerns ever “took off” to the effect that they drew high-profile lawsuits, regulatory standards or reactions from environmental liability insurers.

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That is not the case with per- and polyfluoroalkyl substances, or “PFAS.”

“PFAS are a large family of man-made chemicals with unique physical properties. They are water- and oil-repellent, extremely heat-resistant and have surfactant properties. They’re also extremely stable,” said Chris DeCarlo, senior product manager, Environmental Risk Group, The Vertex Companies.

Those properties make PFAS applicable to a wide range of consumer goods.

“They’re used in grease-resistant food packaging like pizza boxes and hamburger wrappers, in nonstick cookware, in water-resistant materials like jackets, tents and tarps, in spray-on stain resistant solutions, and in aqueous firefighting foams,” DeCarlo said.

Manufacturers started using PFAS in these products around the 1950s, and while the goods themselves are safe, the chemicals have made their way into the atmosphere and into groundwater via factory emissions and waste disposal. Communities with prolonged exposure to environmental PFAS have experienced a number of adverse health impacts, including several forms of cancer.

This is what has attracted the attention of both the EPA and plaintiffs’ attorneys.

Regulation Review

On May 22 and 23 of 2018, the EPA hosted a National Leadership Summit in Washington, D.C., with these stated goals: To share information about the risks associated with PFAS; to develop monitoring and cleanup techniques; to outline short-term actions to address challenges currently facing affected communities; and to develop communication strategies. The agency also announced plans to develop a PFAS Management Plan for release later this year.

Chris DeCarlo, senior product manager, Environmental Risk Group, The Vertex Companies

The EPA has been studying the health impact of PFAS since the 1990s, when the chemicals were first found in the blood of U.S. populations. In 2000, manufacturers voluntarily agreed to phase out production. But, “this class of chemicals is very persistent and resistant to environmental degradation,” said Chris Carleo, technical director, The Vertex Companies.

“It’s unknown how long they last in the environment, but studies have shown that PFAS in the blood have a half-life of nine years.”

Though states are free to establish their own rules around testing and remediation, the EPA issued a non-enforceable Lifetime Health Advisory for PFAS in drinking water at 70 parts per trillion (ppt) only in 2016, revising it down from a 400 ppt standard set in 2009. So far, at least 15 states have used the revised guidance to set enforceable clean drinking water standards.

“State-by-state regulations vary for testing. Right now, there’s a very large patchwork of regulation. Some states are setting standards and telling people they have to do some type of remediation; others are waiting to see what happens,” said Greg Sampson, vice president, The Vertex Companies.

“In some cases, environmental regulatory agencies that are not state agencies are requiring remediation even though the state doesn’t. It depends on where you are and who’s in charge of your facility.”

A Web of Liability

On the top tier of liability are the manufacturers that actually produce PFAS and those that utilize the chemicals in the production of consumer goods.

“Some of these materials were utilized to assist in product manufacturing — i.e. non-stick cookware — then baked away, and they go into the smokestacks and into the atmosphere. Industrial emissions of this nature were historically not regulated,” Carleo of Vertex said.

“The chemicals can also be discharged directly into local sanitary sewers in liquid form when mixed in solution within the manufacturing waste product sanitary discharges. Since there was no regulation around PFAS, treatment plants didn’t treat it. When separated out into biosolids, they can also be dumped in a landfill or utilized as agricultural fertilizer. From there they can leech into the groundwater and get into the food supply,” he said.

Some disposal sites and nearby communities have been exposed to roughly 50 years’ worth of accumulated contamination.

Users of products containing PFAS can also face liability for failure to dispose of waste properly. This primarily applies to airports, which use aqueous firefighting foam to extinguish fuel fires, and military bases, and dispense it during training exercises.

“State-by-state regulations vary for testing. Right now, there’s a very large patchwork of regulation. Some states are setting standards and telling people they have to do some type of remediation; others are waiting to see what happens.”  — Greg Sampson, vice president, The Vertex Companies.

“A good number of emergency response organizations for municipal and federal airports have used these firefighting foams to train and whenever they had a fire that needed more than just water. Sites that store this material can also experience spills or leaks. It gets into the groundwater at these sites as well,” said Toby Smith, president, Ironshore Environmental.

Finally, water utilities, treatment plants and landfill operators could face legacy exposures for lack of appropriate testing and remediation. “Treatment plants that don’t get rid of PFAS allow those chemicals to get fed into rivers, streams and other bodies used for drinking water which can affect a large geographical area,” Smith said.

According to a report by the Environmental Working Group (EWG), published in July 2018, “there are 172 known PFAS contamination sites in 40 states.” Additionally, “an EWG analysis of unreleased data estimated that more than 1,500 drinking water systems, serving up to 110 million Americans, may be contaminated with PFOA, PFOS and similar fluorinated chemicals.”

Landmark Litigation

The web of accountability is expansive, but so far, landmark lawsuits have targeted the center of the web — PFAS manufacturers. In 2010, Minnesota’s state attorney general sued 3M for $5 billion, alleging the company ignored the health risks associated with PFAS and irresponsibly disposed of the chemicals by dumping them in a landfill near Minneapolis. The attorney general alleged the chemical caused health problems in nearby communities, including cancer and premature birth.

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The case eventually settled for $850 million, but more individual suits against 3M in other communities have since been filed. In July 2018, Michigan’s governor also asked that state’s attorney general to sue 3M for contaminating waterways in 15 communities.

In 2001, thousands of residents surrounding a Dupont plant in Parkersburg, W.Va., filed a class action against the company, claiming it leaked perfluorooctanoic acid (PFOA) into the drinking water, which was subsequently linked to six forms of cancer. That case settled in February 2017 for $671 million.

“Those are the two high watermarks so far, and those settlements appear to have already inspired a lot of PFAS-related litigation,” said Daniel Narvey, an attorney with Godfrey & Kahn S.C.

“The first wave of litigation is targeting the manufacturers actually producing the chemical, but the second wave could be more focused on the entities using them in consumer products,” said Ned Witte, attorney and shareholder in Godfrey &Kahn’s Environmental Strategies Practice Group.

“Another group that may find themselves entangled in this will be municipalities, because residuals of these products find their way into stormwater or waste water discharges, and that’s what treatment and sewage plants are processing,” he said.

The federal government and some state agencies are in the process of cataloging the most likely sites of PFAS releases — primarily but not exclusively focusing on airport and military installations that have discharged firefighting foams. The implications of being on this list — as far as being required to test, monitor or remediate lingering contamination, or be targeted by litigators — are not totally clear.

“That’s why it’s called an emerging contaminant. We’re trying to figure out an appropriate approach to address the issue,” Sampson said.

The Science Behind Health Claims

One reason for the uncertainty is that the scientific evidence linking PFAS to specific health impacts varies. In the Dupont case, the defendants put together a panel of scientists to study any associations between PFOA exposure and disease incidence. They determined that there was a “probable link” with kidney and testicular cancer, ulcerative colitis, thyroid disease, pregnancy-induced hypertension and high cholesterol.

Ned Witte, attorney and shareholder, Godfrey & Kahn’s Environmental Strategies Practice Group

However, more recent studies of communities with PFAS in their blood did not find a statistically significant difference in cancer rates

 

compared to national trends. In 3M’s case, the Minnesota Dept. of Health said it also did not find unusual rates of cancers.

“There is evidence that PFAS exposure may have adverse health impacts. There’s been some linkage to less scary stuff for the individual like obesity and high cholesterol. From an insurance standpoint, that opens you up to enormous classes. There are more limited findings with respect to more serious conditions such as cancer, but more research is being conducted,” Ironshore’s Smith said.

Clarity may be coming soon; the National Defense Authorization Act of 2017 allocated $7 million to study the health impact of PFAS released in firefighting foams on military bases.

Remediation Requirements

In states that have not set regulations around acceptable PFAS limits in drinking water, there are pros and cons to manufacturers’ decisions to test for it. Addressing elevated PFAS levels demands time, expense and a public acknowledgement of contamination. Choosing to ignore the issue could increase liability exposure in the future.

“In my opinion, those who mitigate the risk now will be in a much better position five to 10 years in the future,” Smith said. At sites where there’s been a known PFAS release, facilities may monitor the levels and watch for migration. Stagnant contaminated water poses no risk to local water supplies.

Manufacturers can collect soil samples and install test wells to collect groundwater samples and determine the direction of flow. “Many of these sites would already have monitoring wells for a variety of reasons,” DeCarlo said. “The relative complexities of cost will have to do with the concentrations in the groundwater to begin with, the size of the area impacted and to what extent the contaminant is [a threat].”

If concentrations are high or the groundwater links to a drinking water supply, facilities should install treatment systems, which can be as simple as activated carbon filters. However, most labs are not equipped to identify concentrations as low as 70 ppt, so the reliability of results may be murky. Finding a suitable lab adds time and expense to the testing process.

Insurance Recovery

Expenses related to PFAS claims can potentially be covered by a pollution policy unless there is a specific exclusion. For now, most buyers can still find adequate coverage despite potential PFAS exposure.

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“Once a class of contaminants hits regulators’ radar screens, then more attention is paid, studies are done and ultimately that results in regulations and limitations. Once that’s happened there’s no going back. And carriers will start to specifically exclude PFAS as a pollutant if they hadn’t already,” said Chris Smy, environmental practice leader, Marsh.

“We are starting to see carriers ask questions, particularly if sites have been involved in operations that would have a PFAS exposure or if they’re located in an area where PFAS is an issue. So it’s definitely on the radar of some carriers, but not all.”

Because pollution programs cover multiple years, if there is a regulatory change during the policy period that classifies something as a contaminant that was not considered one before, the policy will still respond to claims triggered by that new contaminant.

“A pollution program can be a very useful way to mitigate something that is not a problem now but could be in the medium-term. In some ways, it anticipates regulatory changes,” Smy said.

Smy said the increased level of attention is enough to spark more claims by residents, special interest groups or businesses. Ironshore’s Smith said the dollars are already piling up.

“Every week there’s a new area impacted by this issue and a new lawsuit,” he said, “but we may not know the full financial impact for another 10 years. It’s still too early to determine how long the tail is.” &

Katie Dwyer is a freelance editor and writer based out of Philadelphia. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]