View: Significant ruling in PFAS lawsuits could affect insurance coverage


Per- and polyfluoroalkyls, commonly known as PFAS, have served as a key component in many industrial and consumer products for decades. Linked to environmental pollution and adverse health effects, these ‘forever chemicals’ have received steadily growing attention from regulatory authorities, the plaintiffs’ counter and, by extension, the insurance industry.

The current “case to watch” regarding PFAS is the multidistrict lawsuit (“MDL”) in the United States District Court for the District of South Carolina, with Judge Gergel presiding. The MDL consists of more than 2,000 cases brought by individual plaintiffs as well as state and local governments arising out of the production and/or use of aqueous film-forming foam, also known as AFFF. The use of AFFF, traditionally used in firefighting operations, including those of the US military, is believed to cause the release of two types of PFAS into the environment: PFOS and PFOA.

On September 16, 2022, Judge Gergel denied a motion for a partial injunction filed by defendant 3M Company and other AFFF-defendant manufacturers over the immunity defense of government contractors. While not an insurance coverage decision, the ruling is important in the context of PFAS litigation and could affect insurance coverage.

Immunity Defense of Government Contractors

Government contractor immunity defenses are designed to protect the interest of the federal government in obtaining products it needs at reasonable prices, despite possible defects in those products. Under the defense, a government contractor may assert immunity in respect of an allegedly defective product if the following three criteria — or “protrusions” — are met: (i) the government has approved reasonably accurate specifications for the product; (ii) the product conforms to those specifications; and (iii) the contractor has warned the government about the hazards of the product that were known to the contractor but not the government. A doctrine known as the doctrine of “continuous use” allows a contractor to satisfy the defense – including the first pile – where the government continued to use the product after full knowledge of the risks of the product.

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In 1969, the Navy issued a military specification (“MilSpec”) for AFFF. 3M initially supplied MilSpec-compliant AFFF containing PFOS. In 2000, 3M ceased production of PFOS and other contractors using another AFFF manufacturing process known as telomerization stepped in to fill the void left by 3M’s exit from the market. Although AFFF on telomeres does not contain PFOS, it can be broken down into PFOA in the environment. Telomere-based AFFF moving manufacturers were Tyco Fire Products LP, Chemguard Inc., Kidde-Fenwal, Inc., National Foam, Inc. and Buckeye Fire Equipment Company.

Decision to reject a partial summary judgment

In its order denying a partial summary judgment on the government contractor’s immunity defense, the MDL court ruled that: (i) the MilSpec did not constitute a reasonably accurate specification under the first degree of defense; and (ii) there are factual issues as to whether the AFFF manufacturers provided timely warnings to the government of the dangers of their AFFF products that were known to them but not to the government and whether the doctrine of “continuous use” applies is.

The court ruled that the MilSpec was not a reasonably accurate specification because it was only a “performance specification”, meaning “any manufacturer with [its] own magical witch’s brew” made up from “at least hundreds of different species [PFAS]’, rather than a ‘design specification’ that would require the use of certain chemicals.

With regard to the third point and the doctrine of “continuous use,” the court ruled that all AFFF manufacturers “knew significantly more than the government about the properties and risks of their products and deliberately withheld very material information from the government.” The court described a laundry list of evidence that 3M, in particular, not only failed to disclose critical information to the government in a timely manner, but also “actively tried to discredit unfavorable information that was made public.”

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Similarly, the court identified evidence that the telomere-based AFFF manufacturers, primarily through the Fire Fighting Foam Coalition (“FFFC”), misled the government into believing that their AFFF products would not degrade to PFOA, even though they learned that their products or in fact would do. In addition, the court ruled that the government’s frenetic regulatory activity immediately following 3M’s alleged late disclosures, and the subsequent government decision to limit the use of telomere-based AFFF to only “mission-critical activities,” the applicability of the ” continued use”. further question doctrine.

Potential impact on insurance coverage

The court’s ruling and judgment, while not made in the context of insurance coverage, can have major implications for coverage. General liability policies generally require that any injury or damage for which an insured seeks liability coverage arises from an ‘event’, which policies generally define as an ‘accident’. To the extent that an Insured knowingly or intentionally causes or should have known that it would cause injury or damage, liability for such injury or damage may be excluded from cover. Courts usually place the burden on the insured to prove that injury or damage was caused by an accidental “event”.

In addition, most general liability policies contain an “anticipated or intended” exclusion that excludes coverage related to liability for injury or damage that an insured expects or intends to do. Accordingly, if an insured expects or plans to incur injury or damage, coverage may not be available. Courts typically place the burden on the insurer to determine that an “anticipated or intended” exclusion applies.

The MDL court decision cites evidence advanced by the plaintiffs that 3M and the telomere-based AFFF manufacturers deliberately concealed information about the known hazards of their products. Depending on how a court interprets a policy’s definition of an “incident” and/or “expected/intended” exclusion, the decision and evidence to which it refers (if substantiated) may support a coverage defense based on either or both. those policies.

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However, the law of the applicable jurisdiction may provide additional parameters. For example, whether there was an “incident” or whether injury or damage was “expected or intended” may depend on whether only the act that caused the injury or damage was foreseen or intended, or whether the injury or damage itself was foreseen or intended. Likewise, contrary to what the insured should have known objectively, proof of the insured’s actual subjective awareness or intent may or may not be required.

In addition, the warrant and advice may have implications as to what policies, if any, are caused by allegations of PFOS and PFOA-related harm. Many general liability policies do not cover any injury or damage of which the insured was aware prior to the term of the insurance. Therefore, policies issued after an insured discovered that PFOS or PFOA caused damage may not provide coverage in connection with such damage. Likewise, insurers may argue that they should not be responsible for damages that an insured did not mitigate by failing to disclose risks once they became aware of those risks (even if the insured discovered the risks after the policy period). Again, the court ruling discusses in detail what the AFFF manufacturers may have known about the dangers of PFOS and PFOA, and when they may have known.

Of course, the court dismissed a partial summary judgment only involving 3M and five other AFFF manufacturers. The evidence cited may apply to other insureds to varying degrees or not at all. The parties should evaluate whether and to what extent the evidence in the MDL relates to them and should consider other evidence that may influence the types of coverage issues discussed above.

If you have any questions or need more information, please contact Sara C. Tilitz ([email protected]; 215.864.7150), or Lynndon K. Groff ([email protected]; 215.864.7033).



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