Teflon Litigation: Can It Stick?
September 14, 2006
Since its inception in the 1980s, asbestos litigation has cost corporate defendants an estimated $70 billion and forced more than 50 companies into bankruptcy. Over 20 years later and far from slowing, asbestos claims are on the rise. Meanwhile, in July 2006, several plaintiffs’ attorneys announced their plan to file lawsuits against DuPont in eight different states based on their clients’ exposure to an allegedly harmful chemical known as perfluorooctanoic acid (PFOA). What is the difference between these cases and prior limited PFOA litigation? These plaintiffs are consumers whose “exposure” resulted from their use of common non-stick cookware. With this vast pool of potential claimants, could PFOA litigation rival asbestos?
The Chemical
PFOA has the lowest coefficient of friction of any known solid material and is an essential processing aid in the manufacture of fluoropolymers. Fluoropolymers are high-performance plastic and synthetic rubber materials used to make wire insulation for computer networks, semiconductor manufacturing equipment and automotive fuel hoses. About 95 percent of fluoropolymers are used in these types of industrial applications. The remaining 5 percent is used to make consumer products such as fast-food packaging, weather/chemical-protective fabrics, and a wide-range of non-stick and stain-resistant surfaces and products, such as Teflon, Scotchguard, Stainmaster and Gore-Tex.
The Problem
Fifty years after companies such as DuPont and 3M began manufacturing PFOA, the chemical is present in the blood of the majority of the general population of the United States. With a half-life of over four years in humans (most chemicals are expelled from the body in a few hours), PFOA accumulates in the body. Research suggests that occupational exposure to PFOA is harmful. Exposure to PFOA at high levels has been shown to cause death, cancer and other health problems in animals, and has been linked to high blood pressure and an increased risk of strokes in factory workers. The EPA recently categorized PFOA as a “likely carcinogen” in humans. There is also some suggestion of a link to birth defects. Several of the women working in DuPont’s West Virginia plant gave birth to children with rare facial deformities.
Whether non-occupational exposure, such as drinking water containing PFOA or using products like Teflon, poses a threat is up for debate. DuPont scientists admit that the gases released during cooking can cause death in pet birds and “polymer flu” in humans. They maintain, however, that this only occurs when temperatures far exceed the “normal range” (about 500 degrees). However, a study conducted by ABC’s 20/20 and the Environmental Working Group (EWG) showed that bacon is “just getting crispy” at this temperature. Recent EPA initiatives focus on reducing PFOA emissions released by manufacturing facilities in the United States and throughout the world. DuPont is the only company still manufacturing PFOA in the United States. The EPA maintains that there is no data to suggest consumers using household products made with PFOA, such as non-stick cookware, are in any danger.
The Dupont PFOA Litigation
The first PFOA litigation began in 1999 when the Tennants, a family of farmers in West Virginia, went searching for answers after losing an entire herd of cattle over 10 years to a mysterious wasting disease. After finding PFOA in their cistern, the Tennants sued DuPont whose Dry Run landfill was just a short distance away. Alleging sickness in their cattle and their workers, the Tennants settled with DuPont in 2001 but the controversy sparked local officials to conduct broader testing. PFOA was discovered in the general water supply and in August 2001, individuals from the area surrounding DuPont’s West Virginia facility initiated the first class action suit against the company based on PFOA exposure.
During discovery, a series of studies and internal memoranda surfaced that suggested DuPont knew about the contamination and the potential heath effects of PFOA for over two decades. Unlike the cattle case, this class action received significant media attention and also prompted questions about the safety of products made with PFOA. Again, in February 2005, DuPont settled by paying at least $107.6 million. The settlement includes blood testing, new water treatment equipment and funding for independent studies to determine whether PFOA poses a risk to human health. The February settlement was in addition to $22.5 million in residents’ legal fees and a potential $235 million for a medical monitoring program DuPont was required to fund.
Organizing and expanding on the discovery produced in this class action, the EPA filed a complaint against DuPont on July 4, 2004, alleging violations of federal environmental laws. The complaint hinged on DuPont’s failure to disclose test results showing that PFOA is a potential health risk. A year later, DuPont settled for $16.5 million in what the EPA hailed as “the largest civil administrative penalty EPA has ever obtained under any environmental statute.” Environmental groups balked that the damages were far too low. The fact remains, DuPont has paid hundreds of millions of dollars in settlement over the last five years for a chemical that has never conclusively been proven harmful to human health or the environment.
The Aftermath
Predictions that these “industrial exposure” cases were mere precursors to litigation based on exposure to consumer products were substantiated in July 2005, when two Florida law firms filed lawsuits on behalf of consumers who bought and used cookware with Teflon. Since then, 16 consumer cases have been consolidated as multidistrict litigation in the Southern District of Iowa (due to its central geographic location and judicial resources). The plaintiffs seek a collective $5 billion from DuPont to impose a Teflon warning label, to create funds for medical monitoring and scientific research, and to replace the Teflon pots and pans of every person in America.
To obviate the need for clear scientific proof of harm, these plaintiffs’ attorneys have turned to consumer protection laws, utilizing the same evidence from the EPA complaint. As one of the plaintiffs’ attorneys commented, “I don’t have to prove that it causes cancer. I only have to prove that DuPont lied in a massive attempt to continue selling their product.”
Representative of these consumer protection laws and used by the Florida plaintiffs in this case, the Florida Unfair and Deceptive Trade Practices Act prohibits “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Plaintiffs’ attorneys are using these laws, which were intended to supplement contract suits based on breach of warranty-type claims (think automobile lemon laws), to ground their claims in tort. Of course, without proof of physical injury, plaintiffs are left with their economic damages – i.e., the price of the Teflon pan. The bulk of any potential award may come from alternative damages such as those for medical monitoring or research.
Given the widespread use of Teflon and other PFOA-related products, the possibility of occupational as well as consumer exposure, the alleged effects on human health and the known presence of PFOA in nearly every human body, could PFOA be the next asbestos? Are PFOA manufacturers and distributors destined to suffer the same fate? To the extent there are similarities between PFOA and asbestos, what can we learn from the rich history of asbestos litigation?
The Future
First, assessing future liability is impossible. Asbestos litigation began in the 1980s and is still going strong. Current estimates put the total amount paid by corporate defendants at $70 billion. Over 50 corporations have been forced into bankruptcy as a result of defending asbestos claims. When John-Manville, a major asbestos manufacturer, was approved for bankruptcy in 1988, it established a trust to pay all future claimants 100 percent of their settlement values or 100 percent of their compensatory damages if they chose litigation. After two depletions, claimants now receive five cents on the dollar.
Second, the statute of limitation may play a role in encouraging early filing and limiting ultimate recovery. Under most state statutes of limitation dealing with latent injuries, the clock begins to run when the claimants knew or should have known they were injured. Arguably, for asbestos, this means when the dangers became widely publicized. Given the bioaccumulative nature of PFOA and the uncertainty surrounding its long-term effects, when will a potential claimant be deemed to have known he was injured? May a claimant sue again for a different injury? These are questions we may face if PFOA enters the mass tort arena.
Third, all past and present PFOA manufacturers are potentially liable. Most asbestos claimants sue not one, but a multitude of corporations. The struggle to identify the appropriate defendant is common to many mass tort product liability and pharmaceutical cases. Since PFOA has been used to make so many products over multiple years, this struggle could play out in potential PFOA litigation.
To the extent it is impossible to assign liability among multiple defendants, plaintiffs must rely on collective liability theories. For example, defendants could be liable relative to their pro rata share of the market. This doctrine, known as market share liability, was first used in litigation over the pregnancy drug Diethylstilboestrol (DES). However, the doctrine has not been widely applied in other cases. In order for a manufacturer to exculpate itself completely under this theory, it must prove that its product could not have caused the plaintiff’s injuries. Other collective liability theories include concert of action and enterprise liability.
The fourth lesson we can learn from asbestos litigation is that the defendant should be prepared for a series of settlements. Multidistrict litigation (provided for in 28 U.S.C. § 1407) and class action settlements are two common methods of mass tort resolution. Defendants in the asbestos litigation attempted to negotiate class action settlements of all future claims against them in the MDL courts but the U.S. Supreme Court struck them down. It now appears that the only way to effect this type of “global” settlement is in bankruptcy. For everyone else, there is litigation and successive individualized settlement agreements.
Medical monitoring, a theory of damages hotly contested in the asbestos realm, has already arisen in PFOA litigation. The American Tort Reform Association (ATRA) is opposed to allowing damages for medical monitoring as they impose liability without injury and deplete resources needed to compensate truly injured plaintiffs. Plaintiffs’ attorneys argue that fear of injury is itself an injury worthy of compensation and that defendants, not plaintiffs, should bear the cost of testing for potential diseases caused by their products.
Thus far, damages for medical monitoring are strictly a judicial creation and not officially recognized or codified in any statute. At least one state, Louisiana, has come down on the side of the ATRA and enacted laws expressly prohibiting judges and juries from awarding damages for medical monitoring. Other states’ highest courts, including those in Michigan, Nevada, Kentucky and Alabama, have struck down these damages. West Virginia (home of DuPont’s PFOA facility) is one of the few states where the state’s highest court has upheld damages for medical monitoring. It is too soon to tell whether the plaintiffs in the existing multi-district litigation will prevail in their request for medical monitoring.
It is also unclear under what theory they may seek damages for generalized research. Damages for research could be seen as an offshoot of medical monitoring – a more generalized method of determining health risks. Alternatively, they could be a type of punitive damage – an attempt to correct a societal, not necessarily an individual, harm. If the plaintiffs in the existing multi-district litigation prevail, it will undoubtedly spawn a slew of PFOA claims by consumers across the country. It will also establish a dangerous precedent allowing plaintiffs to use consumer protection statutes to bring what are, in effect, products liability claims without the necessity of proving that PFOA is harmful or that the defendant corporation caused the plaintiff’s injury.
This is an area that any company engaged in the manufacture or distribution of PFOA or other chemicals for consumer use will want to watch. The Product Liability Team at Holland & Knight will continue to follow and report on the developments.
For more information, e-mail Jane E. Warring at jane.warring@hklaw.com or call toll free, 1-888-688-8500.