This is the second in a series of articles published by the Product Liability and Complex Torts group at Nilan Johnson Lewis, P.A., for product manufacturers as they prepare to respond to PFAS regulatory demands and mitigate their risk of PFAS litigation exposure.

Part 2. The “Business Case” to Mitigating PFAS Risk in 2024

PFAS have been described as the “new asbestos,” in terms of the scope of regulatory burden and litigation risk facing manufacturers whose products contain PFAS. This article will survey the current PFAS regulatory and litigation landscape and make the “business case” that manufacturers should take on the challenge of understanding and addressing the presence of PFAS in their products.

What Manufacturers Should Know

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 recent years, regulators and plaintiffs’ firms have started to think bigger and target the use of PFAS in consumer products.

Pursuant to its “PFAS Strategic Roadmap,” a whole-of-agency approach to research, reduction, and remediation of PFAS, the EPA will soon require all companies who manufacture or import products or parts containing PFAS to report copious data on their PFAS uses. Two states, Maine and Minnesota, also have promulgated reporting rules applying to all manufacturers who sell PFAS-containing products in those states. Manufacturers must take proactive steps immediately to gather PFAS-related data from internal sources, suppliers, or third-party laboratories. (Compliance with the EPA rule alone is estimated to cost over US $875 million.)  These reporting deadlines are just around the corner:

• January 1, 2025, for Maine;
• May 8, 2025, for the EPA; and
• January 1, 2026, for Minnesota.

Failure to report, or inaccurate reporting, exposes manufacturers to federal per-day penalties of $46,000, as well as state enforcement actions.

A patchwork of U.S. states have already banned PFAS in certain product categories—food packaging, cookware, children’s products, carpets and rugs, and textiles. Total bans of PFAS-containing products will follow in Maine (beginning in 2030) and Minnesota (in 2032), and the European Union is evaluating a continent-wide ban on PFAS in consumer products.

Manufacturers also are facing a wave of “greenwashing” class-action suits claiming false advertising of PFAS-containing products. Plaintiffs contend customers were deceived by these products’ characterization as “safe,” “healthy,” or “sustainable,” because the products contain PFAS which were not disclosed by the manufacturer. As of February 2024, 40-plus PFAS-related consumer-protection cases have been filed, according to one estimate. These cases have targeted products in the food and beverage, cosmetics and personal care, and apparel industries.

In these class actions, the “harm” alleged is the cost of the product, which multiplied by thousands or millions of customers is high enough. We suspect plaintiffs are proceeding on a consumer-fraud theory 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.”

What Manufacturers Should Do

As we explained in our first article in this series, manufacturers have relied on PFAS for years or decades to enhance the properties of their products. Asking manufacturers to divert their resources away from product innovation or market expansion toward evolving their supply chain and identifying PFAS alternatives is not easy. Nevertheless, regulators and litigation appear intent on driving PFAS out of consumer products. Additionally, modern jurors frequently expect manufacturers to go above and beyond government requirements to produce “safe” products. And the numbers placed on plaintiffs’ verdicts when jurors believe manufacturers have not done enough can be eye-popping. The “business case” can and should be made for manufacturers to devote attention to responding to PFAS regulatory burdens and mitigating PFAS litigation risks.

The next article in our series will report on the insurance industry’s modification and re-interpretation of business insurance policies to address PFAS risks and costs, and advise manufacturers on how to protect themselves.