NC Attorney General’s Office argues that DuPont’s holding companies should also be on the hook for PFAS liabilities in NC

By: - September 19, 2022 1:46 pm

(Chart: Court records)

The historical DuPont corporation — known in court records as “Old DuPont” — has parked roughly $20 billion in two “paper companies” (which have no employees, offices or equipment) to shield those assets from legal liability, a lawyer for the North Carolina Attorney General argued before the state Supreme Court today.

And North Carolinians harmed by decades of PFAS exposure from Old DuPont should be able to sue those paper companies, said the state’s attorney Ryan Parks.

The paper companies, Corteva and what’s known as “New DuPont,” were established as part of a complex business transaction in 2019.

A state business court had found that the Corteva and New DuPont could be liable for legal claims in North Carolina. Those companies then appealed to the state Supreme Court.

This case doesn’t ask the Supreme Court to weigh in on the merits of the lawsuits themselves. Rather, the court’s decision will determine whether North Carolinians could sue not only Chemours and “Old DuPont” – already defendants in multiple lawsuits – but the paper companies, as well.

This is important because Chemours and Old DuPont are severely and intentionally undercapitalized, according to court documents, and could not possibly pay the claims arising from current and future lawsuits.  (Story continues after the box.)

Chemours plans to expand its Fayetteville Works plants; public meetings this week

Chemours is holding two public meetings about its plans to ramp up production of PFA, a type of perfluorinated compound. Policy Watch reported last week that it still unclear how the company will produce greater amounts of PFA and still comply with discharge and emissions limits that are laid out in the consent order with the state and Cape Fear River Watch.

The company will increase its production of PFA for use in the semiconductor industry, according to a press release. It is the only U.S. producer of PFA.

The meetings will take place:

Tuesday, Sept. 20, 5-7 p.m., Bladen Community College auditorium, 7418 Hwy 41 West, Dublin
Wednesday, Sept. 21, 5-7 p.m., Leland Cultural Arts Center, 1212 Magnolia Way


(Chart: Court records)

The State of North Carolina has already sued Chemours and Old DuPont, demanding that they pay “all past and future costs to assess, remediate, restore and remedy environmental harms” as a result of operations at the Fayetteville Works plant. 

If the assets of Corteva and New DuPont can be tapped into, the payouts could be larger.

Old DuPoint operated its Fayetteville Works plants for decades, knowingly discharging and emitting toxic PFAS – perfluorinated compounds – including GenX, into the drinking water and the air. 

In 2015, as DuPont was losing lawsuits in West Virginia and Ohio related to PFAS contamination, it spun off Chemours. That company now operates the Fayetteville Works plant and is also being sued by the state, local governments and individuals.

Parks told the state Supreme Court justices that PFAS liabilities “were enterprise- threatening” to Old DuPont. The company, Parks said, had to find a safe place to put its assets.

Those safe places, Corteva and New DuPont, were formed in 2019 as part of what Parks said was a “fraudulent transaction.” The “paper companies” should have assumed not just legal liabilities, but also “jurisdiction.” That means Corteva’s and New DuPont’s assets were no longer safe, because the companies could be sued in North Carolina.

Without a legal ruling to prevent these corporate maneuvers, “any company could immunize itself by making changes to its corporate form,” Parks argued. 

Policy Watch reported in 2019 that Chemours had sued DuPont, in Delaware, where all the companies are incorporated. In that case, Chemours alleged that DuPont spun it off in 2015 to avoid PFAS-related liabilities and that it was underfunded. That case was settled out of court.

John Ackerman, attorney for New DuPont and Corteva, rebutted the state’s claim, saying that those companies could not have reasonably anticipated they could be sued in North Carolina. “They don’t and never have operated in North Carolina. They don’t produce [PFAS],” he said.

He also disputed the Attorney General Office’s contention that Chemours and Old DuPont are too insolvent to pay legal claims.

Securities Exchange Commission documents detail that all of the spinoffs were aware of the liabilities. Court documents show that while Corteva never assumed responsibility for PFAS liabilities, the company also created a cost-sharing arrangement: Corteva and New DuPont would pay 50 percent of the first $300 million in Old DuPont liabilities.

The justices will now weigh the arguments. There is no timetable for a decision.

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Lisa Sorg
Lisa Sorg

Assistant Editor and Environmental Reporter Lisa Sorg helps manage newsroom operations while covering the environment, climate change, agriculture and energy.