You mean like – FOREVER-forever?
If you have looked at the news recently, you have probably seen headlines of all shapes and sizes about PFAS and “forever” chemicals—those man-made substances lasting thousands of years that are in most of the consumer products we use and have been detected in the bloodstream of every American who has been tested. This panel will present a brief description of what PFAS chemicals are and where they are found, as well as the potential health risks. The panel will then provide information on the issues already appearing in PFAS litigation, projections of where PFAS litigation may be going in the future, insurance coverage challenges raised by PFAS litigation, and how you can manage this risk now. Is this the next asbestos litigation?
Introduction
Per- and polyfluoroalkyl substances, known by the acronym PFAS and better known by the moniker “forever chemicals,” are the focus of rapidly evolving regulatory regimes at the U.S. federal and state levels, which in turn are driving class-action litigation asserting novel theories of liability against manufacturers whose products contain PFAS. Given the ubiquity of the PFAS chemical group and its usefulness to industry, this increased attention impacts manufacturers in nearly every industry: textiles, machinery, automotive, food and beverage, technology, and life sciences. Manufacturers should carefully evaluate their PFAS risk exposure in consultation with outside counsel and develop a plan to investigate the sources of PFAS in their products, respond to regulatory requirements, protect their brand, and evolve their product line.
A Science Primer on PFAS
PFAS are a large class of synthetic chemical compounds that were first developed in the 1940s. Depending on how PFAS are defined, they number in the thousands or tens of thousands of compounds.
PFAS offer such useful manufacturing properties as oil, water, stain, and soil resistance and chemical and thermal stability. Consequently, PFAS are used to manufacture a wide variety of consumer products: cookware, textiles, carpets, cosmetics and personal hygiene products, and cleaners. The aerospace, semiconductor, automotive, electronics, and construction industries and the military all rely heavily on PFAS in product components. Certain PFAS (such as PTFE) are approved by the U.S. Food and Drug Administration for use in medical equipment including surgical implants.
Some PFAS have been found to persist in the environment, due to the strength of their chemical bonds. PFAS are found in the soil, groundwater, wildlife, and humans. Some PFAS “bioaccumulate,” meaning they build up in the body and do not go away (hence the moniker “forever chemicals”). Additionally, scientific studies of a few compounds in the PFAS group have shown a possible (though not proven) link between exposure to high concentrations of those compounds and adverse human health effects. For these reasons, PFAS are a topic of concern for regulators and other stakeholders.
Increased Regulation of Manufacturers and PFAS-Containing Product
Regulatory and public interest in PFAS is not a new phenomenon. In previous decades, the focus was on chemical manufacturers that generated PFAS. In 2021, a certain Minnesota-based manufacturer was sued in a PFAS action an average of three times per day. In 2023, lawsuits over PFAS drinking water contamination led to over $11 billion in settlements.
In more recent years, the regulatory focus has shifted to target manufacturers of products containing PFAS.
Regulation of PFAS at the federal level is driven by the U.S. Environmental Protection Agency (EPA). In 2021 the Biden Administration instituted a “PFAS Strategic Roadmap,” a whole-of-agency effort to “research” the effects of PFAS on health and the environment; “restrict” the manufacture and use of PFAS; and “remediate” existing PFAS contamination. Many of the EPA’s actions directly impact product manufacturers, including:
- In August 2023, the EPA included PFAS as one of six National Enforcement and Compliance initiatives (“NECIs”) for fiscal years 2024-2027. NECIs represent the most serious environmental violations for which the EPA intends to focus its enforcement resources.
- US EPA modified its Toxics Release Inventory (TRI) rule to eliminate the de minimis exemption in supplier notifications for all Chemicals of Special Concern. Notifications typically must contain the name and CAS number, as well as the percentage by weight of each covered chemical. Notifications must be made with the first shipment of the calendar year.
- In October 2023, the EPA finalized a rule under the Toxic Substances Control Act (TSCA) to require any entity that has manufactured or imported PFAS or PFAS-containing articles since January 1, 2011, to report a wide variety of data to the EPA about its PFAS uses, production volumes, disposal efforts, worker exposures, and more. All required information must be reported to the EPA by May 8, 2025. There is no exception for de minimis use of PFAS or for small businesses. While entities need only report the information that is “known or reasonably ascertainable” to them, the effort to gather and organize such information is gargantuan. By the EPA’s own estimate, compliance with the TSCA PFAS reporting rule will cost $843 million.
- In April 2024, the EPA finalized a rule under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund, to designate two specific PFAS (PFOS and PFOA) as “hazardous substances.” The EPA also has proposed a rule to designate nine specific PFAS (PFOS, PFOA, GenX, and others) as “hazardous constituents” under the Resource Conservation and Recovery Act (RCRA). These rules would empower the EPA to investigate and remediate contamination by these PFAS and impose corrective action on manufacturers and property owners.
Additionally, a patchwork of regulation has emerged among U.S. states to ban PFAS in certain types of products, impose labeling requirements, or demand reporting on manufacturers’ use of PFAS.
Dozens of states have banned the use of “intentionally added” PFAS in product categories such as food packaging, cookware, children’s products, cosmetics and personal hygiene products, dental floss, ski wax, textiles, and furniture. The term “intentionally added” is usually defined by states’ statutes to mean, “PFAS added to a product or one of its product components to provide a specific characteristic, appearance or quality or to perform a specific function. (See, e.g., 38 Maine Rev. Stat. Ann. § 1614.1.D.) More such bans by more states come into effect every year.
On January 1, 2026, the State of Minnesota will require all manufacturers who sell products into that state containing “intentionally added” PFAS to report copious information about such products to the Minnesota Pollution Control Agency (MPCA). Unfortunately, this reporting requirement does not align neatly with the EPA’s PFAS reporting requirement under TSCA, such that manufacturers must gather different data sets to report to each regulatory body. Moreover, protection of confidential business information, available under TSCA, has not been finalized by the MPCA.
Finally, in 2032, two states—Minnesota and Maine—will ban the sale of all PFAS-containing products in their state, unless the state has determined that the use of PFAS in a product constitutes a “currently unavoidable use.” While a similar legislative effort failed in California’s senate this term, it is likely other states will pass similar global PFAS bans.
Product Manufacturers Face Litigation Risk on Novel Theories of Consumer-Based Liability
The steep rise in PFAS regulation against product manufacturers has coincided with a second “wave” of PFAS-related litigation.
Historically, the focus of PFAS litigation was chemical manufacturers, who were sued by governments to clean up PFAS contamination in soil or water. A large multi-district litigation is pending over these claims as well as claims alleging personal injuries suffered by individual plaintiffs arising out of the use of aqueous fire-fighting foam, which contains relatively high concentrations of PFAS.
The second “wave” targets manufacturers of products containing PFAS. Plaintiffs are bringing class-action lawsuits asserting claims of consumer fraud and deceptive business practices. Such actions have been asserted against manufacturers in the food, beverage, cosmetics, textiles, personal hygiene, baby-products, and apparel industries.
In these actions, plaintiffs tend to claim that a defendant company’s advertisements of a product as “healthy,” “natural,” “safe,” or “sustainable” are false and misleading because the product in question contains PFAS. Or plaintiffs claim the defendant company violated a general “duty to warn” by not including PFAS in the product’s list of ingredients. Plaintiffs claim economic harm, alleging they would not have bought the product if they’d known about the presence of PFAS. The proposed FTC Green Guide changes appear to be friendly to these claims as the proposed revisions have moved from “de minimis” amounts to “trace amount” when marketing products that are “free of” a specific chemical substance. These classes, if certified, could encompass every consumer who bought products from the manufacturer.
The science underlying such claims is specious: plaintiffs sometimes cannot demonstrate that any PFAS was actually in the complained-about product, or that PFAS is found in all such products to justify class certification, or that the specific PFAS is actually toxic or environmentally unsafe. Further, PFAS exposure is ubiquitous in the environment, further complicating causation theories. While motions to dismiss at the pleading stage are often granted, just as often the plaintiff will file an amended complaint that survives a follow-up challenge, leading to discovery and (typically) settlement.
We suspect plaintiffs are proceeding on a consumer-fraud theory in these cases in order to avoid proving an actual causative relationship between PFAS exposure and adverse health effects, which is speculative under the current science. If (some would say when) the day comes that scientific research establishes this causative link, manufacturers may become inundated with claims that their PFAS-containing product caused a customer to suffer cancer, organ damage, developmental disorders, or other disease. The untold amount of personal-injury or wrongful-death damages that may attend this litigation is what makes PFAS start to look like the “new asbestos.”
PFAS Insurance Coverage Considerations
Insured manufacturers and distributors of PFAS chemicals, and others in the supply chain with PFAS-related products have tendered lawsuits filed by claimants against them to their insurance companies. Depending on the insured, products, facts and claims, coverage may be sought under a variety of different insurance policies, although most commonly commercial general liability policies. While coverage is widely sought, insurance coverage is often limited or may not be available at all for alleged injuries and/or damages arising out of PFAS-containing products. As such, PFAS-related insurance coverage actions are becoming more prevalent and we can expect it to continue. Numerous coverage issues have been identified by insureds and insurers and many of these issues are currently being litigated around the country.
PFAS-related products have been produced and used for, in some cases, over 70 years. As such, claims for insurance coverage could potentially implicate many years of coverage issued by many different insurers. While long-tail insurance coverage claims, especially in the environmental context, have been heavily litigated and can provide some insight into how courts might handle certain PFAS-related coverage issues, PFAS presents some unique facts and issues given the lack of understanding and science available regarding its potential impact on people and the environment.
Coverage issues involving PFAS include, but are not limited to, trigger of coverage, occurrence and number of occurrences, whether the allegations constitute “bodily injury” or “property damage” as defined by the policies, allocation across multiple policies, fortuity and known loss, and application of the pollution exclusion, PFAS exclusion and owned property exclusion. An example of decisions by Courts relating to the application of various pollution exclusions to PFAS-related liability can be found in the below:
- Wolverine World Wide, Inc. v. The American Insurance Co., 2021 U.S. Dist. LEXIS 199675 (W.D. Mich. Oct. 18, 2021) (addressing the “qualified” pollution exclusion).
- Tonoga, Inc. v. New Hampshire Insurance Co., 201 A.D.3d 1091 (3d Dep’t 2022) (addressing the “sudden and accidental” exception to the pollution exclusion, as well as the “total” pollution exclusion).
- Grange Ins. Co. v. Cycle-Tex Inc., et al., Order, Cov. A. No. 4:21-cv-00147-AT (N.D. Ga. Dec. 5, 2022) (addressing the “total” pollution exclusion).
Toward a PFAS Strategy: How Manufacturers and Their Counsel Can Manage Their Compliance Requirements and Litigation Risks
Manufacturers must take proactive steps to respond to federal and state PFAS regulatory demands, mitigate their risk of litigation exposure, and plan for the day—not so far in the future—when they will need to use alternatives to PFAS in their products. First and foremost, manufacturers should engage outside counsel to support their PFAS action efforts under the protection of the attorney-client privilege. Companies, their counsel, and an outside scientific expert can work together to investigate the presence and extent of PFAS in their products, whether through a review of their internal records, communications with suppliers, or in-house or third-party testing. To the extent the results of this investigation include trade secrets or confidential business information, companies will want to take proactive steps to protect same from inadvertent disclosure. Organizations should monitor PFAS-related regulatory developments and plan for compliance with federal and state PFAS reporting requirements and either product-specific or global PFAS bans. Additionally, manufacturers should consider how to harmonize their PFAS messaging in their marketing and advertising statements, public disclosures and shareholder communications, and PFAS-related customer audits and consumer or media inquiries. In sum, in-house and outside counsel will play an integral role in advising manufacturers how to respond to the current PFAS climate.