DuPont 2012 Annual Report Download - page 75

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(Dollars in millions, except per share)
PFOA
DuPont uses 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, 2012, DuPont has accruals of $15 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 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 higher cholesterol (hypocholesterolemia).
A panel of three medical experts will determine an appropriate medical monitoring protocol, if any, as a result of these findings. If a medical monitoring
protocol for any of these diseases is defined, DuPont is required to fund a medical monitoring program to pay for such medical testing. Plaintiffs may pursue
personal injury claims against DuPont only for those human diseases for which the C8 Science Panel determined a probable link exists. In January 2012, the
company put $1 in an escrow account as required by the settlement agreement. Under the settlement agreement, the company's total obligation to pay for
medical monitoring cannot exceed $235. In addition, 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.
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). DuPont denies these claims and is
defending itself vigorously.
At December 31, 2012, twenty-five lawsuits alleging personal injury and one lawsuit alleging wrongful death from exposure to PFOA in drinking water are
pending in federal court in Ohio and West Virginia. DuPont denies the allegations in these lawsuits and is defending itself vigorously.
While DuPont believes that it is reasonably possible that it could incur losses related to PFOA matters in addition to those matters discussed above for which it
has established accruals, a range of such losses, if any, cannot be reasonably estimated at this time.
Monsanto Patent Dispute
On August 1, 2012, a St. Louis, Missouri jury awarded $1,000 in damages to Monsanto on its claims that the company willfully infringed Monsanto's RE
39,247 patent directed to Roundup® Ready® soybean seed technology. On November 16, 2012, the court unsealed sanctions against the company for “fraud
against the court,” which precluded the company from presenting a license defense at trial and ordered the company to pay Monsanto's attorneys' fees
associated with the sanctions. The court has yet to decide several post-trial motions, including Monsanto's motion to enhance the damage award. The court has
discretion to enhance damages for willful infringement by up to three times the jury verdict. The company intends to appeal this verdict, the sanctions ruling
and damage enhancement, if any, when it is appropriate to do so. The company believes that it will prevail on appeal. Accordingly, as of December 31, 2012,
no amounts have been accrued related to this matter.
Monsanto alleged that by combining Pioneer's Optimum ® GAT® trait with Monsanto's patented Roundup® Ready® trait, Pioneer violated its 2002 Amended
and Restated Roundup® Ready® Soybean License Agreement and, in doing so, infringed Monsanto's
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