Another major settlement was announced this week in New Jersey in consolidated cases filed by the New Jersey Department of Environmental Protection and other state entities. (You can review the Judicial Consent Order here as well as previously PFAS settlements reported by our firm here and here, including in New Jersey for remediation costs.)
Settling plaintiffs, including the NJ DEP and its commissioner, and the administrator of the NJ Spill Compensation Fund, alleged that “3M designed, manufactured, marketed, and sold certain PFAS, as well as PFAS-Containing Products, that were transported, stored, handled, used, released, spilled, or disposed of in, and thus resulted in PFAS Contamination in, the State of New Jersey.”
In March 2019, plaintiffs filed two complaints against 3M and other defendants: one action was filed in the Superior Court of the State of New Jersey, Law Division, Salem County (the “Chambers Works Litigation”; No. SLM-L-000057-19) and the other was filed in Middlesex County (the “Parlin Litigation”; No. MID-L-002448-19). Each complaint was filed pursuant to the Spill Compensation and Control Act (“Spill Act”), N.J.S.A. 58:10- 23.11 to -23.24, the Brownfield and Contaminated Site Remediation Act (“BCSRA”), N.J.S.A. 58:10B-1 to -31, and New Jersey common law, including negligence/gross negligence and products-liability theories.
Through these litigations, plaintiffs sought, among other things, (i) costs to investigate, respond to, and remediate PFAS Contamination at and around the Chambers Works Site and the Parlin Site, (ii) damages due to injuries to Natural Resources, including the costs to restore those resources and to compensate for lost use and value, and (iii) Punitive Damages or other penalties. These cases were removed to federal court and consolidated, along with other cases.
On March 25, 2019, and as previously reported here, the NJ DEP issued a statewide PFAS Directive, Information Request, and Notice to Insurers regarding PFAS Contamination in the State to 3M and other respondents (the “Statewide PFAS Directive”). The statewide PFAS Directive was issued pursuant to the authority vested in the commissioner under the Spill Act, the Water Pollution Control Act (WPCA), N.J.S.A. 58:10A-1 to -20, the Air Pollution Control Act (APCA), N.J.S.A. 26:2C-1 to -68, and the Solid Waste Management Act (“SWMA”), N.J.S.A. 13-1E-1 to -230. The directive provided notice that the department believes the respondents to be responsible for “significant contamination of New Jersey’s natural resources, including the air and waters of the State, with [PFAS].”
The directive sought, among other things, to compel the respondents to provide information about their uses and discharges or potential discharges of certain PFAS into the state’s environment, to meet with the department to develop a good-faith estimate of costs to investigate, test, treat, clean up, and remove certain PFAS from the state’s environment, including damages for economic impacts of PFAS Contamination, and respondents’ financial condition and ability to pay for or perform the cleanup and removal of certain PFAS. On April 25, May 17, May 24, and October 2 of 2019, 3M submitted a series of letters denying liability and asserting various defenses to the statewide PFAS Directive.
Fast forward almost six years and, earlier this week, 3M agreed to a proposed Judicial Consent Order with the state of New Jersey (the “Settlement”) to resolve these claims regarding per- or poly-fluoroalkyl substances, subject to court approval. If approved, the settlement would resolve legacy claims related to the sites mentioned above (as well as other sites as defined by the settlement), and any PFAS-related claims that the State of New Jersey and its departments have, or may have, in the future against 3M. In addition, under the settlement, the State of New Jersey and its departments would agree to release 3M from claims arising out of, relating to, or involving PFAS statewide, including but not limited to (i) the design, manufacture, distribution, transportation, or disposal of PFAS; (ii) the presence of PFAS in the environment; (iii) compliance with any recordkeeping or disclosure obligation related to PFAS; (iv) any false or misleading statement made in connection with the sale or advertisement of PFAS or any product containing PFAS; (v) any treatment or remediation of PFAS (other than with respect to certain sites formerly owned and operated by 3M as specified in the settlement, subject to ongoing remediation efforts at three sites or otherwise meeting certain specified conditions); (vi) any natural resource damages for PFAS; or (vii) any costs incurred by New Jersey or its departments caused by PFAS in the environment or human exposure to PFAS, including medical or healthcare costs.
In connection with the settlement, 3M expects to record a pre-tax charge of approximately $285 million in the second quarter of 2025 and intends to reflect it as an adjustment in arriving at non-GAAP results. This pre-tax charge includes approximately $210 million for the settlement for Chamber Works and other elements of the settlement, representing the present value of payments beginning in 2026 over 8 years and approximately $75 million for existing and future PFAS-related claims by the State of New Jersey, representing the present value of payments starting in 2030 and running through 2050. The actual amounts that 3M will pay (which could be as much as $450 million) will be determined in part by the amount 3M is ultimately obligated to pay under the 2023 class-action settlement with public water suppliers in the United States. 3M may also receive certain credits towards its payment obligations under the settlement based on other contingencies. The settlement is subject to a public notice and comment period and is subject to court approval following that period.
Some $140 million of the settlement “shall be allocated for Natural Resource Damages.” The Natural Resource Damages payments derived from the Judicial Consent Order shall pay for costs incurred by the state to “repair, Restore, or replace damaged, impaired, injured, or lost Natural Resources of the State, pay for costs incurred by the State to permanently protect the Natural Resources of the State, or pay the legal or other costs incurred by the State to pursue settlements and judicial and administrative awards against Non-Released Entities relating to Natural Resource Damages, including attorneys’ fees, consultants’ and experts’ fees, other litigation costs, and interest.” Settling plaintiffs shall use the Natural Resource Damages payments derived from this JCO exclusively for “the restitution or remediation of a harm to the environment, wildlife, or natural resources,” within the meaning of Treas. Reg. section 1.162-21(e)(4)(1). Another $170 million of the Settlement is allocated for PFAS Contamination Abatement Projects as defined in the JCO.
The settlement provides that 3M does not admit any liability or wrongdoing and does not waive any defenses. 3M’s press release on this settlement can be found here.
Under the JCO, “PFAS” is defined as “any per- or poly-fluoroalkyl substance that contains at least one fully fluorinated methyl or methylene carbon atom (without any hydrogen, chlorine, bromine, or iodine atom attached to it).” “PFAS-Containing Product” means “any consumer, industrial, or other material, substance, article, or product (including AFFF) manufactured with or containing PFAS (including any material, substance, article, or product that intentionally or unintentionally contains PFAS as an ingredient, byproduct, or degradation product) that was sold, supplied, transported, treated, stored, disposed of, or arranged for transportation, treatment, storage, or disposal in the State. “For the avoidance of doubt, the term “PFAS-Containing Product” includes (1) a material, substance, article, or product made by a manufacturer that contains PFAS made by another manufacturer and (2) a material, substance, article, or product made by a manufacturer that contains a component that (a) was made by another manufacturer and (b) contains PFAS.””
In 2022, 3M announced that it will exit all PFAS manufacturing and will work to discontinue the use of PFAS across its product portfolio by the end of 2025. In the agreement, “3M represents and Settling Plaintiffs understand that after 2025 all newly manufactured PFAS that becomes present in New Jersey will be manufactured by sources other than 3M.” For details, see 3M Company, Form 10-Q, at 24, 58 (S.E.C. filed Apr. 22, 2025).