Stephen Cobb:

Welcome to the third season of State AG Pulse. In this season, we’re selecting one story every week from the state AG news. Over the next 10 minutes, we’ll take a quick dive into that story to analyze the impact of state AGs as regulators and consumer protection guardians, and provide tips to help your business work successfully with state AGs.

Welcome back to a third season of State AG Pulse. My name is Stephen Cobb. I’m a partner here at Cozen O’Connor in our State AG Group. This season, as you’ve heard, we’re focusing on one news article ripped from the headlines, talking about it, talking about why it’s important. With me is my colleague Emily Yu. Emily, today we’re talking about PFAS. We’re talking about forever chemicals. This is an area that state AGs have been focused on for many years. We’re talking lots of litigation. We’re talking class actions. We’re talking billions of dollars at stake. Tell me the news that we’re working with today.

Emily Yu:

So today we’re covering state AGs filing an amicus letter in a district court where huge multi-district litigation is happening between a class action of private litigants and M, one of the biggest manufacturers of PFAS in the country or possibly in the world. What the AGs are bringing up here are really wide-reaching long-term concerns about how much are these companies who are responsible for PFAS going to pay to help remediate some of the issues they’ve caused all across the country, and can they do this fast enough to actually make a difference?

Stephen Cobb:

We keep saying PFAS in case other folks don’t know. PFAS is polyfluoroalkyl substances, otherwise known as forever chemicals. They are synthetic chemical compounds that have been used in an assortment of goods over the years. Oftentimes there’s chemical foam that’s been used by firefighters, but it comes in a whole bunch of different substances.

So one of the interesting things there, when you look at PFAS and you look at forever chemicals, and this isn’t necessarily something that people sitting around the coffee table are necessarily going to be discussing with their morning breakfast, but these are huge, huge settlements that AGs are getting involved in to the tune of billions of dollars. These are supposed to go to cleanup and remediation efforts.

I saw one report that was trying to estimate the number of PFAS contaminated sites in the US. It is, at least according to that one source, thousands of locations. So when we talk about PFAS and the potential cleanup and remediation efforts, you’re not talking about necessarily clustered in one state. This isn’t like you’ve heard of a specific chemical spill, but this is all over permeating within the environment. So with that, it’s no surprise that it’s an area that state AGs continue to focus on.

I know in , Maine became the first US state to ban PFAS compounds and all products by , except for some instances that they deemed currently unavoidable. So it’s a legislative issue, it is a regulatory issue, and state AGs are weighing in. So what we’ve ripped from the headlines today, talk to me about it, which AGs signed on and what was the significance here?

Emily Yu:

Sure. So the letter is led by AG Bonta in California. We have AG Mayes in Arizona. We have the AGs from Pennsylvania, Wisconsin, and DC as well, who have all signed on to an amicus letter to the district court in South Carolina that’s handling this multi-district litigation. The letter pertains to M, but a couple weeks ago, there were another group of AGs who submitted an amicus letter to the same court in regards to another defendant company in this litigation.

So what I found interesting, particularly about the procedural posture here is you don’t usually see AGs caring enough to submit amicus anything at the district court level, but obviously this is such a big issue in such a big piece of multi-district litigation that here you have multiple AGs filing multiple rounds of letters, this one being the latest one here, and it sounds like the AGs have been very involved specifically with this M settlement process for a while.

Stephen Cobb:

This is one of the interesting roles that AGs play, right? So sometimes AGs are an individual regulator. They’re focusing on those areas and the conduct within their state. Other times, like we’ve discussed on numerous podcasts, they work together in multi-state coalitions and they really flex that regulatory muscle together and are able to really pursue large scale regulatory efforts by becoming a team.

This looks to me like this is one of those areas. When a bunch of AGs join together in an amicus at the district level, that tells me that this is something that they’re continuing to look at, that they want a class settlement that meets their concerns from a regulatory perspective. Did you get any inkling from the letter whether or not they have indicated how they continue to follow up on this important issue or just focusing on the current resolution of this MDL class action?

Emily Yu:

Sure. So the beginning part of the letter references when the settlement was first proposed, there were actually a group of  AGs, a big group of bipartisan states that filed in opposition to it, and they talked about M engaging in negotiations with this bigger group of  AGs to revise the settlement. One of the important issues here is the fact that now the group is much smaller.

So most of the AGs have voiced that they’re okay with what the settlement looks like thus far, but this group of AGs who have filed this letter that we’re talking about today, they really voiced their concerns about two aspects of some of the still unresolved aspects of the settlement, mostly the dollar amount and how long payment is going to take.

So they have resolved a lot of issues that the AGs care about, mostly making sure that this settlement doesn’t affect the states’ abilities to file their own suits since the states are not actually parties here. So I think that might’ve been enough for the bigger chunk of the  AGs to say this is good enough for us, but these AGs who’ve written in here today are talking about just bigger issues of, even though the proposed settlement amount is between  and a half and  and a half billion right now, they don’t think that’s nearly enough.

Some of them have cited to references of that’s how much it might take to deal with the aftermath of PFAS in just one year in just one state. They also take issue with the fact that payment is supposed to be doled out over a  year period starting next year if the settlement gets approved soon and ending in . The AGs are concerned that M or other companies similar to this one might not even have the financial means at that point to make good on their payments for that long a time.

So the AGs are definitely thinking long-term. They’re thinking big scale, what are going to be the total costs of remediation, of building up water treatment facilities, and that whole process and whether or not it’s actually feasible to think that far out of a  year payment plan for a company like this that has faced so much scrutiny, and of course other companies like it that are also players in the PFAS world.

The AGs were also concerned – this point has already been resolved in the settlement – they were concerned about not being able to sue these manufacturers themselves. So one of the big points that they’ve already won on in the settlement negotiations so far is making sure that the states still have their right to bring their own claims in addition to this class settlement and other similar multi-district litigation happening across the country.

Stephen Cobb:

Class action MDL,  billion dollars on the table, state AGs have said it’s not enough. You can only assume that their reservation of rights is a harbinger of things to come. I think there’s two big takeaways from here, and they extend beyond PFAS. The first is AGs’ focus on environmental enforcement. This is an area that fits into almost every state AG’s power and authority to investigate and sue over.

I think this is going to be a continuing area of interest that expands beyond PFAS and forever chemicals. With that area of going concern, companies are going to want to be cognizant of what the AGs want. You could shorten the title of that article to, We Want More Money and We Want It Now. That is clearly going to be the mantra of at least this smaller group of AGs going forward.

As we look to see what those next steps can be in environmental enforcement, the one thing that we know for certain is that this is going to be a very busy area going forward with AGs on the front foot. I had our environmental division as one of the sections under me as a DAG, and I can tell you that it is a very active area. So I think when you look at AGs, whether that was the original  something to begin with, or going down to this lower number here in the amicus, what they’re saying is that environmental protection, clean air, clean water, are going to continue to be areas of focus for us going forward.

It is also reading tea leaves when they start talking about numbers and payment terms and speed. That’s going to inform the type of settlements, I think, for environmental regulatory action later. Emily, thanks so much for taking the time to chat. This has been another episode of State AG Pulse. Always wonderful to discuss the headlines of the day. Please tune in for our next podcast, and thanks so much for your time.

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