To: Honorable Mayor and Members of Town Council
From: Michael J. Hyman, Town Attorney
Title
Discussion/Direction: Multidistrict PFAS Litigation
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Background - What is PFAS and how does it impact the Town
Perfluoroalkyl and polyfluoroalkyl substances (“PFAS”) are long-lasting chemicals, components of which break down very slowly over time. They are used in the manufacture of a wide variety of stain-resistant, water-resistant, and non-stick consumer products, as well certain types of firefighting foam that were used by the U.S. military, airports, and local fire departments, including Castle Rock Fire and Rescue. Because of their widespread use and their persistence, many PFAS are present at low levels in the environment, including our drinking water supply. Scientific studies have shown that exposure to some PFAS in the environment may be linked to harmful health effects in humans and animals.
Castle Rock Water is committed to protecting our residents and our precious water resources. As concern grows over the presence of PFAS in the environment, Castle Rock Water has taken an active role in discussions at the Federal, State, and Regional levels regarding PFAS regulation, management and remediation. These discussions have addressed the need for water providers to hold those parties who introduced PFAS into the environment responsible for its clean-up and remediation, as well as the importance of prohibiting additional use of PFAS in the manufacture of goods. Indeed, Castle Rock Water has been sampling for PFAS in raw water supplies and treated water at our Plum Creek Water Purification Facility (PCWPF) for a number of years, with some of the earliest samples collected in August, 2016, and is actively treating the water at the Facility using an approved technique to reduce PFAS levels. Castle Rock Water has also created a webpage with information for our residents on PFAS, see Water Quality Report | Castle Rock, CO - Official Website (crgov.com).
PFAS litigation and proposed settlements
Recently, it has come to my attention that a number of Colorado local governments are actively pursuing claims for damages against companies who manufacture, market, and sell Aqueous Film-Forming Foam (“AFFF”) and other products containing PFAS in the multidistrict litigation, In Re: Aqueous Film-Forming Foams Products Liability Litigation, MDL No. 2873 (the “PFAS Litigation”). The primary allegation against these companies is that they manufactured and sold AFFF for decades, despite knowing that the specific PFAS chemicals they contained were toxic, persist indefinitely, and would contaminate the environment during their intended use. A key group of plaintiffs in the MDL are municipal water suppliers, who are seeking damages for PFAS affecting drinking water supplies.
By way of background, multi-district litigation (MDL) is a specialized type legal proceeding in federal civil litigation, aimed at reducing the burden on federal district courts, making litigation more convenient for parties, and promoting overall efficiency. in 1968, the U.S. Congress codified MDL’s in 28 U.S.C § 1407. When civil actions in different district courts involve common questions of fact, they may be temporarily consolidated and transferred to a single district court for pretrial proceedings, though they remain separate cases.
The majority of MDLs are antitrust and product liability cases and can sometimes involve several thousand individual lawsuits. Many cases reach global settlements or are disposed of via dismissal or summary judgment before they are transferred back to their original district for trial. If there are unsettled cases, however, a transferee judge also may select individual suits for a trial, called a “bellwether trial.” These trials serve as tests to see how juries will rule on the facts of a case and help the other parties to the MDL assess whether to continue with trial or settle.
As of this date, two proposed settlements on behalf of public water systems have been announced -- with the 3M Company and DuPont de Nemours, Inc. The 3M settlement is for a total amount of $10.5-12.5 billion to be paid over 13 years, and covers public water suppliers that have detected PFAS in their drinking water supply, or who either are required to test for PFAS or serve more than 3,300 people. The DuPont settlement is for a total amount of $1.185 billion and will cover all public water systems that have either detected PFAS or that are currently required to monitor for PFAS. The Town is eligible to seek recovery under the terms of both proposed settlements.
That is why the Director of Castle Rock Water and I have reached out to Keller Rohrback, L.L.P., a law firm based in Seattle that specializes in representing plaintiffs in multi-district litigation, to learn more about this effort. They currently represent a number of Colorado local governments in the PFAS litigation, including the City and County of Denver, the City of Aurora, Boulder County, and Jefferson County. As you can see from the two proposed settlements, the opportunity exists for the Town to help fund its ongoing efforts to reduce PFAS levels in its drinking water supply.
There is substantial cost associated with removing PFAS from drinking water supplies. The recent $650,000 replacement of the granular activated carbon (GAC) in our GAC filters at the PCWPF is a great example. This expense will likely be incurred every two years for at least a decade as a result of PFAS. In fact, the United States Environmental Protection Agency (USEPA) has established draft maximum contaminant levels (MCL) for some PFAS constituents that will become final soon. It is important for customers to understand that the PFAS contamination is an issue that was not created by the water providers. Our customers should understand that the Town is going after the parties responsible for creating this contamination to at least try and offset some of the costs associated with its remediation.
Keller Rohrback has offered to represent the Town on a flat rate contingency fee of 20% of sums recovered up to $100 million, and 15% of sums recovered over and above $100 million. Keller Rohrback will advance all costs associated with the litigation and will be paid only out of any PFAS/AFFF litigation recovery it collects. A copy of the proposed Professional Services and Contingency Fee Agreement is attached for your review and consideration.
Recommendation
Based upon our conversation with the attorneys from Keller Rohrback, both Castle Rock Water and the Town Attorney’s Office believe that it is a good idea to join the PFAS litigation as a plaintiff. Castle Rock Water has already compiled much of the information that Keller Rohrback will need to pursue a action for damages on our behalf against the PFAS manufacturers, as well as to make claims for a portion of the funds available in the proposed settlements with 3M and DuPont. In addition, no money will need to be advanced by the Town in order to participate.
Accordingly, we would ask the Town Council to vote in favor of the following motion:
“I move to authorize the Town Attorney to enter into a Professional Services and Contingency Fee Agreement with Keller Rohrback, L.L.P., to represent the Town of Castle Rock in multidistrict litigation against companies who manufacture, market, and sell products containing PFAS.”
Attachments
Attachment A: Professional Services and Contingency Fee Agreement