DuPont, Chemours agree to split $900M+ costs in Teflon cancer cases (Updates)
(Updates: shares rise; plaintiff advocate comments) Shares of Chemours Co. jumped more than 15%, rising $4 a share and topping $32 for the first time -- and DuPont Co., Chemours' former owner, also rose -- after the two chemical makers agreed to split the cost of settling about 3,500 lawsuits for cancer-causing contamination from DuPont's former Teflon production at the Washington Works plant on the Ohio River in Parkersburg, W. Virginia, and possible future cases.
"Under the terms of the agreement, DuPont and Chemours will each pay $335.35 million of the $670.70 million global settlement amount," plus up to $25 million a year each for the next five years (totalling another $250 million) for later claims, Chemours said in a statement.
The lawyers struck the deal five weeks after a federal jury in Columbus, Ohio, told DuPont Co. to pay truck driver Keith Vigneron $10.5 million in punitive damages for his testicular cancer, which Vigneron blamed on pollution from the Parkersburg plant. Uncertainty over total damages and who pays had depressed both companies' shares.
The jury earlier gave Vigneron, a truck driver, $2 million in compensation. Shares of both companies fell after that verdict, but Chemours has recently risen to historic highs on rising sales from its current DuPont legacy businesses.
The deal brings "a sound resolution" for the companies and their Ohio Valley neighbors, said David C. Shelton, who is general counsel, corporate secretary and a senior vice president for Chemours. “It settles all indemnification obligations between Chemours and DuPont for all of the approximately 3,500 claims" the companies faced, "and allows us to move forward.”
The deal will fund settlement of lawsuits against the companies for exposing workers and neighbors of its Ohio and West Virginia plants to perflourooctanoic acid (PFOA, C8), which DuPont formerly used in making the popular low-friction material Teflon.
"The settlement is not in any way an admission of liability or fault by DuPont or Chemours," according to Chemours. "Both companies denied any wrongdoing," DuPont agreed.
The settlement was a long time coming. It "arises from a 2001 class action lawsuit involving DuPont's contamination of the drinking water supplies" serving 70,000 people in Ohio and West Virginia with PFOA," said lawyers for the plaintiffs in a statement. "Under a 2004 settlement" of that lawsuit, "DuPont already has paid or has committed to pay ofer $350 million" for local water systems, blood and other health testing and medical monitoring. The additional $670.7 million "will address the individual personal injury claim" of the 3,500 or so people "who claim that PFOA in their drinking water led to one or more of six diseases."
"This is a tremendous positive step," added Rob Bilott of Taft Stettinius & Hollister LLP, one of the plaintiff lawyers. "We look forward to working with DuPont to finalize this settlement and get these injured class members paid as quickly as possible."
“As of this announcement, no checks have been written and no compensation has been paid. Folks who have already had their days in court, [including Vigneron and the cases of plaintiffs Carla Bartlett and David Freeman,] have had their awards bogged down in appeals," Bock added.
He blamed DuPont for having "dragged this crisis out for decades," and noted payments alone won't fix the damage. PFOA production began in Parkersburg in the early 1950s. According to testimony, DuPont was aware of PFOA dangers before it acted to protect the public.
What happens, after the initial $670.7 million is assigned for current claims, if there are new cases and damages?
"To address potential future PFOA costs not covered by the global settlement, during each of the five years following the effectiveness of the settlement, Chemours and DuPont have agreed that Chemours will annually pay the first $25 million of any potential future PFOA costs," and DuPont will pay up to $25 million more a year for those five years, DuPont said in its statement.
"After the five-year period, Chemours indemnification obligations under the Separation Agreement continue unchanged and DuPont has no commitment to fund PFOA costs," according to DuPont.
"Chemours has also agreed, that upon the settlement becoming effective, it will not contest its liability to DuPont" for punitive damages, fines, penalties or attorney expenses that are covered under the 2014 Separation Agreement that split the companies.
On the other hand, DuPont concluded, Chemours "has retained defenses as to whether any particular PFOA claim is within the scope of the indemnification provisions of the Separation Agreement."
The "settlement in principle," as DuPont calls it, is subject to approval by plaintiffs in their cases.
