Proposed Settlement Presents Opportunity For State And Local Officials

As part of an agreement announced in June, the chemical manufacturer 3M Co. will pay at least $10.3 billion to settle multiple class action lawsuits related to contamination of U.S. public drinking water systems.

“The deal would compensate water providers for pollution with per- and polyfluorinated substances, known collectively as PFAS — a broad class of chemicals used in nonstick, water- and grease-resistant products such as clothing and cookware,” the Associated Press reported on June 22.

PFAS chemicals have been an emerging target for legislators and regulators all over the country in recent months and years, which have seen proposals seeking to restrict or ban certain PFAS chemicals. Most recently, for example, officials at North Carolina’s Department of Environmental Quality (NCDEQ) announced they will propose legal limits for certain types of PFAS in surface and ground water.

“Our data will provide a rationale for statewide standards,” NCDEQ Assistant Secretary Sushma Masemore told NC Newsline. “As we embark on this journey, from concept to rulemaking to implementation, we’ll base it on scientific rigor and transparency for the affected parties — the sources, communities and public at-large.”

It’s not just state regulators who have been targeting PFAS. In March the Environmental Protection Agency proposed federal restrictions on PFOA and PFOS, two common types of PFAS, noting that it also seeks to regulate four other PFAS chemicals. The EPA’s proposed standards, however, have been met with some skepticism due to what many believe are artificially low detection levels to trigger action. New Hampshire Governor Governor Chris Sununu (R), an environmental engineer by trade who says his state “has been the Gold standard on this issue,” said in March that he is “concerned these proposed standards are impractical and unreasonable, and will place unbearable costs on local communities without the predicted results or health benefits.”

While the 3M settlement, if allowed to proceed, would put an end to pending lawsuits, it would not prevent state or federal regulators and legislators from pursuing new restrictions on PFAS. The proposed legal settlement is subject to court approval, with a decision expected later this summer. 3M’s participation in the settlement “is not an admission of liability,” the company announced in a statement, adding that should the settlement be rejected by the court, “3M is prepared to continue to defend itself.”

Should the court sign off on the pending settlement, state and local officials will then need to decide whether or not to participate. The settlement would pay participants over the course of 13 years.

In accordance with an EPA mandate, public water systems are required to test for PFAS at some point over the next three years. Since public water systems become eligible to participate in the settlement if PFAS contamination is detected, the results of those tests will dictate the total amount paid out under the proposed settlement.

“The result is that millions of Americans will have healthier lives without PFAS in their drinking water,” Scott Summy, one of the lead attorneys in the class action lawsuit against 3M, said about the proposed settlement. Summy notes that 3M funds distributed in accordance with the settlement could be used to pay for new filtering systems that can remove PFAS.

Settlement funds could also potentially be spent in a way that yields savings for taxpayers in the long-run. Payments issued under the settlement with 3M could be used to repair and improve water infrastructure in certain communities. Ensuring open competition for the materials that can be used in water infrastructure projects would help settlement funds provide more bang for the buck.

Locally-imposed restrictions on the types of piping materials that can be used in water infrastructure projects, which typically mandate the use of ductile iron, can be found all over the U.S. Such closed competition laws mandate the use of iron despite the fact that there are longer lasting, higher performing, and less expensive materials that could be used. Closed competition laws for water infrastructure have inflationary effects that are well documented.

Take Franklin County, Ohio, which has a closed competition system for water infrastructure. Franklin County’s per mile pipe costs are $97,680 higher on average compared to Delaware County, Ohio, which has no restrictions on what materials that can be used in water infrastructure.

A 2017 study from National Taxpayers Union found that, on average, open competition laws cut water infrastructure costs for local governments by nearly 25%. Ensuring open competition in water infrastructure materials could save federal taxpayers a projected $371 billion through lower water infrastructure maintenance and construction costs.

Congressman Brian Babin (R-Texas) has introduced legislation, H.R. 5310, that would ensure open competition in water infrastructure nationwide through federal preemption of locally-imposed restrictions on water infrastructure materials. Congressman Babin’s bill, the Municipal Infrastructure Savings and Transparency Act, was filed in 2018 but has yet to receive a committee hearing.

The prospective settlement offered by 3M presents a multi-billion dollar opportunity for public water systems across the U.S. and it will soon be up to affected state and local officials to decide whether to take advantage of it. Approval and execution of this settlement might also, after years of gathering dust, prompt some in Congress to pull Representative Babin’s bill off the shelf and give it the hearing many think it deserves.