DuPont 2007 Annual Report Download - page 87

Consumer Products Class Actions
Number
of Cases
Balance at January 1, 2005 -
Filed 15
Resolved -
Balance at December 31, 2005 15
Filed 7
Resolved -
Balance at December 31, 2006 22
Filed 1
Resolved -
Balance at December 31, 2007 23
As of December 31, 2007, twenty-three intrastate class actions have been filed on behalf of consumers who have
purchased cookware with Teflon»non-stick coating in federal district courts against DuPont. The actions were filed
on behalf of consumers in Colorado, Connecticut, Delaware, the District of Columbia, Florida, Illinois, Indiana, Iowa,
Kentucky, Massachusetts, Michigan, Missouri, New Jersey, New Mexico, New York, Ohio, Oklahoma, Pennsylvania,
South Carolina, Texas and West Virginia. Two of the 23 actions were filed in California. By order of the Judicial Panel
on Multidistrict Litigation, all of these actions have been combined for coordinated and consolidated pre-trial
proceedings in federal district court for the Southern District of Iowa. Under the court’s latest case management
order, a ruling on whether these cases can proceed as class actions is expected in 2008.
The actions allege that DuPont violated state laws by engaging in deceptive and unfair trade practices by failing “to
disclose to consumers that products containing Teflon»were or are potentially harmful to consumers” and that
DuPont has liability based on state law theories of negligence and strict liability. The actions allege that Teflon»
contained or released harmful and dangerous substances; including a chemical (PFOA) alleged to have been
determined to be “likely” to cause cancer in humans. The actions seek unspecified monetary damages for
consumers who purchased cooking products containing Teflon», as well as the creation of funds for medical
monitoring and independent scientific research, attorneys’ fees and other relief. In December 2005, a motion was
filed by a single named plaintiff in the Superior Court for the Province of Quebec, Canada seeking authorization to
institute a class action on behalf of all Quebec consumers who have purchased or used kitchen items, household
appliances or food-packaging containing Teflon»or Zonyl»non-stick coatings. A ruling on this motion is expected
from the Court in 2008. Damages are not quantified, but are alleged to include the cost of replacement products as
well as one hundred dollars per class member as exemplary damages.
The company believes that the twenty-three class actions and the motion filed in Quebec are without merit and,
therefore, believes it is remote that it will incur losses related to these actions. At December 31, 2007, the company
had not established any accruals related to these matters.
Elastomers Antitrust Matters
Since 2002, the U.S., European Union (EU) and Canadian antitrust authorities have investigated the synthetic rubber
markets for possible violations. These investigations included DuPont Dow Elastomers, LLC (DDE), as a result of its
participation in the polychloroprene (PCP) and ethylene propylene diene monomer (EPDM) markets. DDE was a
joint venture between The Dow Chemical Company (Dow) and DuPont.
In April 2004, DuPont and Dow entered into a series of agreements under which DuPont obtained complete control
over directing DDE’s response to these investigations and the related litigation and DuPont agreed to a
disproportionate share of the venture’s liabilities and costs related to these matters. Consequently, DuPont
bears any potential liabilities and costs up to the initial $150. Dow is obligated to indemnify DuPont for up to
$72.5 by paying 15 to 30 percent toward liabilities and costs in excess of $150. On June 30, 2005, DDE became a
F-30
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)