Utilities Committee Votes Unanimously To Opt Out Of PFAS Class Action Settlement – Move Turns Down $2 Million Payout But Preserves Right Of Future Leadership To Pursue Lawsuit And Insurance Claims For Any Necessary Environmental Cleanup Costs

The Utilities Committee met 11/07/2023. The item which took up almost all of the roughly 40 minute meeting was a discussion regarding whether or not the City of Appleton should opt out of the PFAS contamination class action settlements against 3M and DuPont. If it remained part of the settlement it could potentially receive around $2 million; however, accepting the funds would mean that the city would give up any claim in the future to bring a lawsuit in the future should the city need to remove PFAS contaminants from the water supply. Not only would the city be prevented from suing in the future, they would additionally be prevented from making an insurance claim should the need arise.

For these reasons, City Attorney Christopher Behrens and Utilities Director Christopher Shaw recommended that the city opt out of the class action lawsuit settlement. The committee ended up voting 4-0 to approve the recommendation to opt out.

I’ve prepared a transcript of the discussion for download:

Although $2 million was, on its face a large amount of money, Director Shaw and Attorney Behrens noted that it would be a nominal amount of money where the city to ever need to conduct a PFAS cleanup. The utility’s current PFAS levels were low and the city did not currently need to conduct mitigation efforts; however, there were health risks associated with PFAS contaminant including developmental issues, cholesterol, obesity, some cancers, and autoimmune problems. There seemed to be the realistic possibility that the federal government would, in the future, reduce the levels of allowable PFAS in the water supply at which point the city would potentially be looking at cleanup requirements that cost magnitudes more than the $2 million is could potentially receive from this settlement. Additionally, it was possible that the $2 million settlement sum would not be paid out in a single lump sum but, rather, in smaller chunks over a 10-year period.

Direct Shaw could not say for certain what the federal government would do, but he felt that the trajectory of where the government was going was toward setting more and more limits on PFAS levels.

Beyond not being able to sue 3M or DuPont for the costs of cleaning up pollutants in the water, if the city accepted the settlement, it would also be giving up its ability to pursue insurance claims because when you settle a lawsuit you not only settle with the opposing party but you also settle with any insurance carriers that might be involved. And the point was made that even if 3M and DuPont went bankrupt in the future and could not be pursued for any possible damages should they come to light, by not accepting the settlement, the city would at a minimum be maintaining its right to pursue insurance claims.

Although there was no way to truly know what the better course of action was, city staff felt that by opting out of the class action settlement and the $2 million payout, they would be preserving options for city leadership and residents 20 or 30 years down the line who might face very different regulations regarding PFAS levels. Mayor Woodford offered the hypothetical of what would have happened to the City of Appleton had Mayor Sutherland back in the 1970s been offered a $100,000 payout from Appleton Coated to absolve them of all responsibility for PCB contamination. Such a payment would have been a sizeable chunk of money in the 70s, but it was a drop in the bucket compared to the $800 million it cost to clean up the Fox River.

The committee ended up voting 4-0 to approve the recommendation to have the City of Appleton opt out of the PFAS class action settlement with 3M and DuPont.

View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1120219&GUID=2739C14B-1635-4A89-BE62-FDBE73192B91