New Jersey using contingency fee lawyers to take lead in PFAS litigation

By Karen Kidd | Apr 9, 2019

New Jersey Attorney General Gurbir Grewal   nj.gov/oag

TRENTON, N.J. (Legal Newsline) – New Jersey is ahead of the rest of the country in using private lawyers to sue manufacturing companies over chemicals known as PFAS, whose toxicity levels are still being determined by federal regulators while lawsuits stack up.

In March, the state's Department of Environmental Protection filed four lawsuits, hiring the firm Kelley Drye & Warren to pursue the cases on contingency fees. The state has already enacted its own PFAS standards while the federal government contemplates doing the same, according to Robert P. Frank, a partner in Holland & Knight's Philadelphia office.

Could this lead to more alliances between private lawyers and state governments? Maybe, Frank says, but New Jersey is leading the way because it is the only state with those PFAS regulations.

"It's possible but I don't think it's going to happen as quickly as it may seem it might, based on the New Jersey actions," said Frank, an environmental and real estate attorney who recently wrote on the subject. 

Robert P. Frank, a partner in Holland & Knight's Philadelphia office   Photo courtesy of Holland & Knight

"New Jersey was, I believe, the first state in the country to adopt an actual drinking water quality standard for particular PFAS. They did that last year. No other state has actually adopted a standard yet for any of these substances."

That hasn't stopped trial lawyers from filing suit over the presence of PFAS, which can be found on nonstick cookware, waterproof clothing and firefighting foam, among other items. One recent class action attempts to represent everyone in the country exposed to PFAS but does not allege anyone has been made sick.

DuPont faced dozens of cases from the alleged release of PFOA around its western West Virginia plant, leading to an agreement that created a so-called "science panel." The residents around the plant won medical monitoring damages, and their health was analyzed by the science panel.

The panel believed there were links to six health issues, and litigation has continued. Other research projects on the effects of PFAS have been debated.

“My general feeling is this whole PFAS scare is way overblown,” Steve Milloy, a biostatistician who served on President Trump’s transition team for the Environmental Protection Agency and has made a career of resisting what he feels is “junk science," previously told Legal Newsline.

“It’s all basically running on the notion that detection is toxicity and if you can find it someplace and find people who were exposed to it, that’s bad.”

Others are far more concerned, including New Jersey Attorney General Gurbir Grewal.

"They decided to put profit above the safety of New Jersey’s residents, and we won't stand for it," Grewal said during a news conference the day the lawsuits were announced. "We’re holding polluters accountable for decades of misconduct."

The four lawsuits target DuPont, its affiliated company Chemours and Minnesota-based 3M.

In addition to Kelley Drye's Houston office, New Jersey hired Cohn Lifland of Saddle Brook, N.J., and John Dema of the U.S. Virgin Islands.

Their contract sets up a tier system for payment. If the case is resolved before trial, they would make 10% of any amount recovered more than $300 million.

From $100 million to $300 million, they'd make 15%. From $3 million to $100 million, they'd make 20%.

Now, those percentages increase slightly if the case is concluded after a trial begins. Lawyers would make $12.5% on recovery more than $300 million and 17.5% on recovery between $100 million and $300 million.

For a recovery from $3 million to $100 million, they'd make 22.5%.

Some PFAS standards have been proposed in other states but none have been adopted, Frank said.

"Most states are not necessarily even at that point," he said. "Most states are still looking to see about the extent of the problem in their states."

The lawsuits claim pollution to New Jersey's soil and groundwater by PFAS and seeks to force the defendants to pay to clean it up. The state used its own standards of PFAS toxicity, about which the federal government has not yet officially created "a floor" of minimum levels, Frank said.

"There's no need for them to wait for the federal government," he said. "As a matter of law, that's true. They have the ability to protect their residents without the federal government having necessarily acted in that particular area. 

"Once the federal government acts, they'll establish, arguably, a floor, a minimum, but there's no maxim in the sense that if the state wanted to act in an area that a federal government had not acted in, that they would be barred. They're not."

Last June, the U.S. Department of Health and Human Services issued a draft toxicolocal profile for PFAS that would have dropped PFAS safety limits into single digits.

In February, the U.S. Environmental Protection Agency announced it would this year begin setting limits on PFAS chemicals and kicked into motion a process that eventually will supposedly lead to adding listing perfluorinated chemicals, or PFOA, and perfluorooctane sulfonate, or PFOS, as hazardous substances under the federal Superfund law.

PFOA and PFOS are part of the larger class of PFAS chemicals.

PFAS in general, and PFOA and PFOS in particular, have been mostly unregulated in the U.S. to this point.

PFAS don't readily break down but do pass through soil and drinking water. Some say they threaten the health of humans and wildlife alike.

Aside from the draft profile and the EPA's promises that there will be established limits, there remains no federal determination about what levels of PFAS are actually toxic.

New Jersey didn't wait.

In late March, the New Jersey Department of Environmental Protection (NJDEP) issued a Statewide PFAS Directive, Information Request and Notice to Insurers to eight chemical companies, including two corporations long active in the state, Dupont and Chemours. The directive referred to PFAS chemicals as "ubiquitous in New Jersey" and called them "a statewide public nuisance" that have contaminated the state's drinking water.

The directive ordered the companies to spend what potentially could be hundreds of millions to determine how extensive any contamination is in New Jersey and prepare to clean it up.

The directive also included "particular levels" of PFAS that the state NJDEP would consider safe under the New Jersey Safe Drinking Water Act and for the purposes of the state's pollutant discharge elimination systems permits, Frank said.

"Those levels are very low but they have actually proposed those particular levels," he said, adding that the directive handed down those particular levels only for three types of PFAS.

"There's thousands of these substances but there's only three particular ones for which New Jersey has proposed ground water quality standards and Safe Drinking Water Act levels and the permit level," Frank said. "Again, they are extremely low, double digits part per trillion levels, but they have proposed those and I'm assuming they would tell you, if you asked them why, that they are looking at available toxicology on those levels."

On April 1, New Jersey also proposed "stringent" new drinking water limits to step up monitoring for PFOA and PFOS during the first quarter of 2021.

What will happen next in PFAS litigation in the U.S. could depend largely on how quickly state and federal governments move to develop environmental standards with regards to PFAS, Frank said.

"With a state like New Jersey, which actually has come up with one promulgated standard and proposed other standards, there's probably going to be more litigation, not less," he said. 

"But until the federal government or the states actually come up with specific numerical standards and list these substances as hazardous substances under state or federal laws - the federal Superfund law or state safe drinking water laws - until that happens, there may not be a lot of environmental litigation."

But it will eventually come, Frank said. New Mexico already sued the federal government over PFAS at an Air Force base on March 5.

"There will be PFAS lawsuits in the other 49 states, don't get me wrong," he said. "I just don't think they’re going to develop along the same lines as they have in New Jersey."

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