DuPont 2010 Annual Report Download - page 87

E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
Asset Retirement Obligations
The company has recorded asset retirement obligations primarily associated with closure, reclamation and removal
costs for mining operations related to the production of titanium dioxide in Performance Chemicals. The company’s
asset retirement obligation liabilities were $59 and $56 at December 31, 2010 and 2009, respectively.
Litigation
PFOA
DuPont uses PFOA (collectively, perfluorooctanoic acids and its salts, including the ammonium salt), as a processing
aid to manufacture fluoropolymer resins and dispersions at various sites around the world including its Washington
Works plant in West Virginia. At December 31, 2010, DuPont has accruals of $18 related to the PFOA matters discussed
below.
Leach v DuPont
In August 2001, a class action, captioned Leach v DuPont, was filed in West Virginia state court against DuPont and the
Lubeck Public Service District. The complaint alleged that residents living near the Washington Works facility had
suffered, or may suffer, deleterious health effects from exposure to PFOA in drinking water. The relief sought included
damages for medical monitoring, diminution of property values and punitive damages plus injunctive relief to stop
releases of PFOA. DuPont and attorneys for the class reached a settlement agreement in 2004 and as a result, the
company established accruals of $108 in 2004. The settlement binds a class of approximately 80,000 residents. As
defined by the court, the class includes those individuals who have consumed, for at least one year, water containing
0.05 parts per billion (ppb) or greater of PFOA from any of six designated public water sources or from sole source
private wells.
In July 2005, the company paid the plaintiffs’ attorneys’ fees and expenses of $23 and made a payment of $70, which
class counsel has designated to fund a community health project. The company is also funding a series of health
studies by an independent science panel of experts in the communities exposed to PFOA to evaluate available
scientific evidence on whether any probable link exists between exposure to PFOA and human disease. The company
expects the independent science panel to complete these health studies between 2009 and year-end 2011 at a total
estimated cost of $32. In addition, the company is providing state-of-the art water treatment systems designed to
reduce the level of PFOA in water to six area water districts, including the Little Hocking Water Association (LHWA), until
the science panel determines that PFOA does not cause disease or until applicable water standards can be met without
such treatment. All of the water treatment systems are operating.
The settlement resulted in the dismissal of all claims asserted in the lawsuit except for personal injury claims. If the
independent science panel concludes that no probable link exists between exposure to PFOA and any diseases, then
the settlement would also resolve personal injury claims. If it concludes that a probable link does exist between
exposure to PFOA and any diseases, then DuPont would also fund up to $235 for a medical monitoring program to pay
for such medical testing. In this event, plaintiffs would retain their right to pursue personal injury claims. All other claims
in the lawsuit would remain dismissed by the settlement. DuPont believes that it is remote that the panel will find a
probable link. Therefore, at December 31, 2010, the company has not established any accruals related to medical
monitoring or personal injury claims. However, there can be no assurance as to what the independent science panel
will conclude.
Civil Actions: Drinking Water
At December 31, 2010, there were four additional actions pending brought by or on behalf of water district customers in
New Jersey, Ohio and West Virginia. The cases generally claim PFOA contamination of drinking water and seek a
variety of relief including compensatory and punitive damages, testing, treatment, remediation and monitoring. In
addition, the two New Jersey class actions and the Ohio action, brought by the LHWA, claim ‘‘imminent and substantial
endangerment to health and or the environment’’ under the Resource Conservation and Recovery Act (RCRA). In
December 2010, the company reached an agreement in principle to settle the two New Jersey class actions subject to
court approval. Approval was denied and the parties are considering revised settlement terms for potential
resubmission to the court. If a revised settlement is not reached and approved, litigation will resume. Discovery has just
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