As the end of the year nears to a close, the Chemical Currents team continues to monitor the world of PFAS. We hope you’ll savor this end-of-year treat before we head into what promises to be an active 2023 in the world of PFAS. Chemical Currents provides real-time updates, legal observations, and actionable tips to navigate the constantly evolving legal challenges involving PFAS. In this edition, we discuss a potentially significant Sixth Circuit decision applying collateral estoppel in a mass tort PFAS matter, several updates on PFAS consumer class action cases, a rundown of recent EPA activity, and finally a note on Maine’s upcoming PFAS reporting rules and imminent prohibition dates in New York and California.
Look for new editions every few weeks and please feel free to reach out to the King & Spalding team if you have any questions regarding PFAS issues.
Focus on Litigation
Sixth Circuit Issues Decision Affirming Use of Collateral Estoppel in PFAS Mass Tort Matter
On December 6, 2022, the Sixth Circuit affirmed a $40 million jury award against a manufacturer Defendant, holding that a district court trial judge correctly applied collateral estoppel to preclude the manufacturing Defendant from relitigating several issues that just three prior juries had found in Plaintiffs’ favor.
- Background: In the 2000s and 2010s, this manufacturer Defendant faced sprawling litigation involving more than 3,000 claims related to alleged health effects from PFOA water contamination in Ohio and West Virginia. Those claims were consolidated into an MDL, with three trials (two non-binding bellwether cases and one non-bellwether case) all resulting in plaintiff jury verdicts. The remaining cases were resolved in 2017.
- This Case – District Court: Plaintiffs in this case brought their claims against the manufacturer Defendant in late 2017, after the MDL cases had been resolved. Before trial, the district court granted Plaintiffs’ motion for partial summary judgment on duty, breach, and foreseeability elements of Plaintiffs’ negligence claims, among other issues. The juries in the three prior MDL trials had each found unanimously in plaintiffs’ favor on those three elements. This case then proceeded to trial and the jury found for Plaintiffs.
- This Case – Sixth Circuit Majority: The Sixth Circuit majority affirmed the district court’s application of collateral estoppel preventing the manufacturer Defendants’ from contesting the duty, breach, and foreseeability elements of Plaintiffs’ negligence claims. The majority noted that courts are afforded broad discretion in determining whether to apply nonmutual offensive collateral estoppel, and should weigh four factors—
- Avoid application of the doctrine when it would encourage a “wait and see” attitude among potential plaintiffs hoping that a result in the first action will result in a favorable judgment;
- Do not apply the doctrine if the defendant did not have a reason to defend the initial suit vigorously, particularly if future suits are not foreseeable;
- The doctrine should not apply if it conflicts with one or more previous judgments in favor of the defendant; and
- Avoid the doctrine if the later action would give the defendant procedural opportunities unavailable in the first action that could readily cause a different result.
The majority reviewed these issues de novo and found that—on the basis of just three prior jury verdicts—the application of collateral estoppel on these elements was appropriate.
The majority also considered and rejected the manufacturer Defendant’s argument that nonmutual collateral estoppel cannot apply to mass tort claims (based on a footnote stating just that in a 1984 Sixth Circuit decision). District courts must simply review and apply the four factors above, according to the majority.
- Partial Dissenting Opinion: Circuit Judge Alice M. Batchelder disagreed with the majority and argued that due process requires an inquiry into the representativeness of the plaintiffs (which was not done) before a court can issue a collateral estoppel order against a defendant based upon a small number of cases. Judge Batchelder also raised concerns that the majority’s application of non-mutual collateral estoppel against MDL defendants essentially guts the benefits of informational bellwether trials as there is now nothing parties can do to prevent such trial from becoming binding on defendants.
This newsletter will continue to monitor any next steps with respect to this case as the collateral estoppel holding could have significant implications for a variety of mass actions—not just PFAS—moving forward.
Consumer Class Actions Update
In prior newsletters, we covered the continued trend of consumer class actions related to the purported presence of PFAS in various consumer products. Below is an update on some additional recent activity:
- Kraft Heinz’s Strawberry Kiwi Capri Sun®: Several weeks ago, a plaintiffs’ firm that has filed several similar actions decided to launch another consumer class action complaint in the Northern District of Illinois targeting every kid’s favorite school lunch beverage: Strawberry Kiwi Capri Sun. The firm claims that its independent third-party testing of this particular flavor of the tasty beverage contained PFOA in amounts allegedly exceeding EPA’s recommended levels. The firm proposes a national class of all persons in the U.S. who purchased the drink and asserts now-familiar breach of warranty, consumer fraud, and unjust enrichment claims.
- Recreational Equipment Inc. (“REI”) Clothing: Also earlier this quarter, a plaintiffs’ firm that had filed a claim against REI in federal court in California has now decided to file another consumer class action claim against the clothing company in the Western District of Washington. The complaint alleges that testing conducted at the behest of the plaintiffs’ firm identified several thousand ppm of organic fluorine in several waterproof apparel items. The firm proposes a nationwide class and, like the case above, asserts various breach of warranty, consumer fraud, and unjust enrichment claims.
- Car Seat Proposed Class Action Dismissed: The Chicco lawsuit we discussed in August is no more. On November 30, 2022, the Eastern District of Pennsylvania dismissed plaintiffs’ complaint for failure to state a claim. The court began its analysis by noting that the law does not recognize a duty to disclose chemicals used to treat car seats: “[t]o put it simply, the law does not place any obligation on [manufacturers] to proactively disclose to consumers what, if any, chemicals it uses to treat its car seats.” Then, considering whether the company engaged in active misrepresentation, the court identified pleading failures for each claim that would preclude recovery and dismissed the complaint in its entirety. Similar results could follow in several of the other consumer class actions filed recently given the similarities between the allegations.
Focus on EPA
Over the past several weeks, there has been a significant level of EPA activity regarding PFAS, including:
- Proposed Rule on Enhanced PFAS Reporting Requirements for Toxics Release Inventory (“TRI”): On December 5, 2022 EPA proposed a new rule to add PFAS to the list of Lower Thresholds for Chemicals of Special Concern. This rule would effectively eliminate a currently available exemption that allows facilities to forgo TRI reporting when PFAS chemicals are used in de minimis EPA’s proposal would also limit the ability of facilities to use of range reporting for PFAS chemicals.
This proposed rule has the potential to have broad impacts across industries because PFAS are often used at low concentrations that fall within the current exemption. Even if they do not ultimately have to report, the rule will now likely require numerous users to undertake investigations to determine whether their operations are now reportable. More information of this rule and timing regarding comments is available on EPA’s webpage.
- EPA Soliciting Comments on Proposed Toxic Substances Control Act (“TSCA”) PFAS Reporting Rule: Back on June 28, 2021, EPA announced a proposed rule that would require all manufacturers of PFAS in any year since 2011 to report extensive information related to chemical identity, categories of use, volumes manufactured and processed, byproducts, environmental and health effects, worker exposure, and disposal, as well as imposing a required document retention period related to such materials. The economic information accompanying the proposed rule suggested that very few small businesses would be impacted, but did not include an estimate of costs for small entity importers of articles because it was “unable” to do so. This spurred extensive commentary—including over 110 unique comments—primarily expressing concerns that the burden and cost of complying outweighed the potential benefits of the proposed rule. These comments led EPA to convene a Small Business Advocacy Review Panel, prepare an Initial Regulatory Flexibility Analysis, and update the Economic Analysis of the proposed rule—resulting in a significant increase in estimated regulatory and compliance costs than initially reported. The new estimate for small businesses exceeds $860 million. On November 25, 2022, EPA solicited additional public comment following the release of these new analyses. It is important to note that EPA has asked for comment on whether to add a range of exemptions, including R&D, byproducts, impurities, recycling, intermediates, as well as business size and volume thresholds. Incorporation of many of these exemptions could significantly narrow the scope of the rule. Companies who might benefit from a more tailored rule may want to submit supporting comments by the December 27, 2022 deadline.
We will continue to monitor the public comments regarding each of these reporting rules and include notable updates in future issues.
- EPA Publishes Final Rule Incorporating ASTM Standard for Phase I Environmental Site Assessments: Back in May we discussed the ongoing saga regarding EPA’s incorporation by reference of ASTM International’s 2021 version of its Standard Practice for Phase I Environmental Site Assessments, in which ASTM added PFAS as a “non-scope” consideration. Those “non-scope” considerations include issues that an environmental investigator is not explicitly required to investigate in a standard Phase I assessment, but that could give rise to business environmental risk and can be investigated as part of the Phase I assessment if desired. EPA had published a rule in March that would formally recognize the new Phase I standard as satisfying EPA’s “all appropriate inquiries” (AAI) requirements under CERCLA, but that rule reverted to a proposal status given receipt of several adverse comments. We can now report that this chapter has come to an end, with EPA adopting the final rule that incorporates by reference the (now not so) new ASTM Phase I standard, effective as of February 13, 2023. In the final rule, EPA accepted recommendations to sunset use of the 2013 version of the ASTM standard – that version will no longer satisfy the AAI rule as of February 13, 2024. However, EPA declined to limit the scope of the new standard, noting that “[i]ndustry standards may include elements that are not within the scope of the [AAI] Rule. Therefore, EPA does not consider these additional elements as a reason to avoid recognition of the revised [ASTM] standard as compliant with the [AAI] Rule.”
- EPA Identifies More than 10,000 PFAS as Potential Drinking Water Risks: EPA issued the final version of its Drinking Water Contaminant Candidate List 5, in which EPA included all PFAS fitting a structural definition described below. Under the Safe Drinking Water act, EPA must publish every five years a list of currently unregulated substances that “may pose risks for drinking water” and are known or anticipated in public drinking water systems. EPA must then make regulatory determinations on at least five of the listed substances as to whether they warrant primary drinking water standards. The group of PFAS listed includes those that have at least one of the following structures:
- R-(CF2)-CF(R')R'', where both the CF2 and CF moieties are saturated carbons, and none of the R groups can be hydrogen.
- R-CF2OCF2-R', where both the CF2 moieties are saturated carbons, and none of the R groups can be hydrogen.
- CF3C(CF3)RR', where all the carbons are saturated, and one of the R groups can be hydrogen.
As if the structural definitions were not daunting enough, the linked list of PFAS EPA considers within the structural criteria has 10,239 entries. Based on this list, EPA gave itself plenty of options to consider for drinking water regulations.
- EPA Publishes “A Year in Review” on its PFAS Initiatives: EPA released a “A Year in Review” report wherein the Agency detailed what it viewed as its significant milestones in advancing the objectives described in the PFAS Strategic Roadmap, highlighting seven “key actions” in 2022:
- Proposed designating two PFAS as CERCLA hazardous substances;
- Released drinking water health advisories;
- Laid the foundation for enhancing data on PFAS;
- Began distributing $10 billion in funding to address emerging contaminants under the Bipartisan Infrastructure Law (BIL);
- Expanded the scientific understanding of PFAS;
- Translated the latest science into EPA’s cross-agency PFAS efforts; and
- Engaged with the public.
EPA also previewed some of its PFAS priorities in 2023, including:
- Taking the final step to designate PFOA and PFOS as hazardous substances under CERCLA;
- Completing additional CERCLA designations;
- Proposing additional reporting and data collection rules to enhance publicly available data and information concerning the use of PFAS;
- Releasing guidelines on PFAS discharges, including monitoring and reporting obligations;
- Finishing a full risk assessment on PFOA and PFOS in biosolids for publication in 2024; and
- Enhancing tools like EJSCREEN and other similar publicly available analytical tools.
This newsletter will be sure to follow these events as they unfold over the course of 2023.
Focus on State Action
The transition from 2022 to 2023 will also be eventful at the state level in key states active on PFAS issues, including Maine, New York and California.
Maine PFAS in Products Reporting Rules and Submission Platform Will Lag Statutory Deadline
As discussed in a recent Client Alert, companies doing business in Maine are facing a fast-approaching January 1, 2023 deadline to begin reporting the use of PFAS. Maine’s Department of Environmental Protection (“MDEP”) is also facing the pressure of the impending deadline, reporting to companies that it does not expect to implement rules or the submission platform for reporting PFAS until early in the second quarter of 2023. While MDEP’s difficulties launching its reporting platform will not obviate companies’ need to begin reporting on January 1, the agency has indicated that it will issue extensions but can only do so on an individual-company basis (as opposed to blanket requests). So while substantial uncertainty exists, the PFAS Task Force here at King & Spalding has been helping clients prepare extension requests and evaluate reporting obligations. We are happy to counsel our readers further—just reach out!
Prohibition Dates for PFAS in Food Packaging Imminent in New York and California
To round out our year-end edition, we want to remind our readers that after December 31 in New York and January 1 in California, food packaging that is made of paper, paperboard, or other materials originally derived from plant fibers is prohibited if it contains intentionally added PFAS. In California, the prohibition also applies to food packaging that contains 100 parts per million or more of PFAS, measured as total organic fluorine. The prohibition in both states applies to distribution, sale or offer for sale. And according to California, this includes food or beverage containers, take-out food containers, unit product boxes, liners, wrappers, serving vessels, eating utensils, straws, food boxes, and disposable plates, bowls, or trays.