DuPont vs. Chemours: Yes, it’s ‘about money,’ pollution, Hollywood, and partisan Washington
Plaintiff lawyers are Democrats, chemical makers are Republicans, and Hollywood has piled on against the shrunken DuPont Co.
After two decades of automation, spinoffs, and consolidations to appease relentless investors, the DuPont Co. employs 32,000 people worldwide, down from 100,000. If it keeps selling assets, the chemical giant that used to be the most valuable company in America won’t have much left.
Another sign that times have changed since DuPont dominated General Motors and other giant American manufacturers, built vast product lines of military fuels, rocket gaskets, durable fabrics, new-car plastics and no-stick pan liners: Even Hollywood is piling on against it.
Two years after the filmmaker Stephanie Soechtig told the story of lawyer Robert Bilott and his long-running pollution lawsuits against DuPont, leading up to a $671 million settlement, in a documentary called The Devil We Know, Comcast’s Focus Features has given the tale a bigger-budget remake. Just in time for the holidays, the actor Mark Ruffalo plays Bilott, the lawyer who collected hundreds of millions for his clients and tens of millions for his big Ohio law firm by suing DuPont for dumping Teflon byproducts into a river as recently as the 1990s despite knowing some might cause cancer.
Dark Waters adds Hollywood touches: The opening tune is an old John Denver hit; the cast is padded with made-up characters, such as smoothly ferocious Phil Donnelly (played by Victor Garber), whom Variety’s admiring but confused reviewer called DuPont’s CEO though he’s only a fictional corporate lawyer.
The movie rolls images of black teeth, birth defects, hovering helicopters, and a fear of car bombs, none of which are among the conditions scientists have documented increase with heavy exposure to these chemicals — though the ones that are are plenty scary: high-blood-pressure, high cholesterol, kidney and testicular cancers, thyroid disease, ulcerative colitis.
Settled — yet the lawsuits keep coming. In its last quarterly report to the Securities and Exchange Commission, Chemours, a DuPont spin-off, lists a witches’ stew of claims against the plants it inherited: 1,300 lawsuits alleging asbestos exposure “between the 1950s and the 1990s;” 16 alleging “benzene-related illnesses;” 30 lawsuits over perfluorinated and polyfluorinated compounds (PFAS) sold for military firefighting foam at oil refineries, rug factories, a Maine dairy farm, an Indiana smelter, two Delaware electroplating companies, the water system serving the old DuPont Chambers Works in Salem County, N.J., and other locations; and more recent allegations that a Teflon-chemicals replacement, GenX, has gotten into water systems in North Carolina, among others.
Chemours estimates the cost of all these claims at nearly a quarter of a billion dollars but worries it could be more than double that — or even “substantially higher."
In May, Chemours sued DuPont and its pesticide spinoff, Corteva, alleging that DuPont “underestimated” its potential legal liabilities and calling on the mother companies to either agree to pay more or else give back the $4 billion DuPont took from Chemours when it split.
Both DuPont and Chemours, based three miles apart in Wilmington, called on ex-DuPont CEO and splitmaster Ellen Kullman to say who should pay most. But she hardly clarified, according to accounts by veteran Bloomberg News court reporter Jef Feeley: “Of course” Chemours’ obligation “was uncapped,” Kullman said in a Nov. 11 affidavit. But “unlimited exposure” for Chemours was never DuPont’s intent, she said in a separate filing Oct. 18.
Since trial lawyers, like Hollywood producers, are often Democratic Party donors — and chemical companies tend to back Republicans — it’s not surprising that this legal fight over corporate assets from long-ago chemical discharges that weren’t treated as crimes is meat for the partisan struggle in Congress.
On Sept. 10, the House oversight committee’s environmental subcommittee called Chemours and DuPont to testify. The Democrats in charge added lawyer Bilott as a witness — alongside Minnesota Attorney General Lori Swanson, who last year won an even larger settlement of $850 million from hometown giant 3M Corp. for old PFAS contamination.
Another witness, Virginia prosecutor Matthew Hardin, complained that Democratic politician-prosecutors like Swanson routinely gang up with Democratic activists, plaintiff’s lawyers, and other potential donors to squeeze big institutions with massive lawsuits for old civil offenses, even when voters prove reluctant to elect Democratic legislators or back tough liability laws.
Paul Kirsch, who ran the half of Chemours that included plants where PFAS were made, blamed DuPont for sticking Chemours with legal obligations — with “no cap on the time or money.”
“DuPont designed the separation of Chemours to create a company where it could dump its liabilities to protect itself from environmental cleanup,” Kirsch said.
DuPont sent executive Daryl Roberts to protect its reputation. “This is not about money,” Roberts insisted.
Kirsch shot back that it will cost Chemours “well north of $200 million” to fix the North Carolina wastewater mess, a cost DuPont had estimated at just $2 million.
But whose fault is that? DuPont’s Roberts pointed out that the people running the factories where the pollutants were made “are the same individuals that sit and run Chemours today.”
Mark Vergnano, "who was the executive vice president of the fluorochemicals business and has been so since 2008, is now the CEO of Chemours.” That makes it tough for Chemours leaders to say they didn’t like where DuPont was taking them.
“Mr. Vergnano was part of the DuPont Co.” at the time, Chemours’ Kirsch shot back.
Finally, Chairman Rep. Harley Rouda (D., Calif.) joined in against DuPont: “I’m quite certain that DuPont with its house attorneys and experts figured out the best way to reduce the liability here was to spin it out to Chemours.” DuPont’s denial is “patently false," he pronounced.
Just a month later, Kirsch resigned from Chemours and announced he was taking a job with his brother’s waste disposal business — collecting a million-dollar severance, reported Karl Baker in the Wilmington News Journal.
Kirsch, Baker noted, had said he wanted Chemours to become a “role model” for the chemical industry. Maybe it is, in one important sense: Chemours, the company that now operates the plants that are at the center of all that litigation, doesn’t get mentioned in the new movie, leaving DuPont and its brand to take the heat.
It all makes me wonder if the DuPont-style break up, spin off strategy, promoted by profit-squeezing hedge funds, has another purpose. You can expect the next wave of useful high-tech products later found to be poisoning America will be made by no-name outfits, not big firms with brands we all recognize.