DuPont 2014 Annual Report Download - page 80

E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-27
PFOA
DuPont used PFOA (collectively, perfluorooctanoic acids and its salts, including the ammonium salt), as a processing aid to
manufacture some fluoropolymer resins at various sites around the world including its Washington Works plant in West Virginia.
At December 31, 2014, DuPont has accruals of $14 related to the PFOA matters discussed below.
The accrual includes charges related to DuPont's obligations under agreements with the U.S. Environmental Protection Agency
and voluntary commitments to the New Jersey Department of Environmental Protection. These obligations and voluntary
commitments include surveying, sampling and testing drinking water in and around certain company sites and offering treatment
or an alternative supply of drinking water if tests indicate the presence of PFOA in drinking water at or greater than the national
Provisional Health Advisory.
Drinking Water Actions
In August 2001, a class action, captioned Leach v DuPont, was filed in West Virginia state court alleging that residents living near
the Washington Works facility had suffered, or may suffer, deleterious health effects from exposure to PFOA in drinking water.
DuPont and attorneys for the class reached a settlement in 2004 that binds about 80,000 residents. In 2005, DuPont paid the
plaintiffs’ attorneys’ fees and expenses of $23 and made a payment of $70, which class counsel designated to fund a community
health project. The company funded a series of health studies which were completed in October 2012 by an independent science
panel of experts (the C8 Science Panel). The studies were conducted in communities exposed to PFOA to evaluate available
scientific evidence on whether any probable link exists, as defined in the settlement agreement, between exposure to PFOA and
human disease.
The C8 Science Panel found probable links, as defined in the settlement agreement, between exposure to PFOA and pregnancy-
induced hypertension, including preeclampsia; kidney cancer; testicular cancer; thyroid disease; ulcerative colitis; and diagnosed
high cholesterol.
In May 2013, a panel of three independent medical doctors released its initial recommendations for screening and diagnostic
testing of eligible class members. In September 2014, the medical panel recommended follow-up screening and diagnostic testing
three years after initial testing, based on individual results. The medical panel has not communicated its anticipated schedule for
completion of its protocol. The company is obligated to fund up to $235 for a medical monitoring program for eligible class
members and, in addition, administrative costs associated with the program, including class counsel fees. In January 2012, the
company put $1 in an escrow account to fund medical monitoring as required by the settlement agreement. The court appointed
Director of Medical Monitoring has established the program to implement the medical panel's recommendations and the registration
process, as well as eligibility screening, is ongoing. Diagnostic screening and testing has begun and associated payments to service
providers are being disbursed from the escrow account.
In addition, under the settlement agreement, the company must continue to provide water treatment designed to reduce the level
of PFOA in water to six area water districts, including the Little Hocking Water Association (LHWA), and private well users.
Class members may pursue personal injury claims against DuPont only for those human diseases for which the C8 Science Panel
determined a probable link exists. At December 31, 2014, there were approximately 2,900 lawsuits filed in various federal and
state courts in Ohio and West Virginia, an increase of about 2,800 over year end 2013. In accordance with a stipulation reached
in the third quarter 2014 and other court procedures, these lawsuits have been or will be served and consolidated in multi-district
litigation in Ohio federal court (“MDL”). Based on information currently available to the company the majority of the lawsuits
allege personal injury claims associated with high cholesterol and thyroid disease from exposure to PFOA in drinking water. There
are 27 lawsuits alleging wrongful death. Based on comments from attorneys for the plaintiffs, DuPont expects additional lawsuits
may be filed. In 2014, six plaintiffs from the MDL were selected for the individual trial. The first trial is scheduled to begin in
September 2015, and the second in November 2015. DuPont denies the allegations in these lawsuits and is defending itself
vigorously.
Additional Actions
An Ohio action brought by the LHWA is ongoing. In addition to general claims of PFOA contamination of drinking water, the
action claims “imminent and substantial endangerment to health and or the environment” under the Resource Conservation and
Recovery Act (RCRA). In the second quarter 2014, DuPont filed a motion for summary judgment which if granted, will be
dispositive of this matter. The LHWA has moved for partial summary judgment. DuPont denies these claims and is defending
itself vigorously.