N.J. town files $1 billion lawsuit against DuPont

A New Jersey town has filed a $1.1 billion lawsuit against DuPont, alleging the company spun off the Chambers Works facility to avoid environmental cleanup costs that could exceed a billion dollars.

That facility is now owned and operated by Wilmington-based Chemours, which could end up footing remediation costs if DuPont seeks indemnification.

Carneys Point, a town in Salem County, New Jersey, filed the lawsuit in New Jersey Superior Court. It alleges the Chambers Works site, where Teflon was manufactured, is polluted because of a toxic chemical used in the product's manufacturing. That chemical, C-8, also known as perfluorooctanoic acid, has been linked to kidney and testicular cancers, among other illnesses.

Teflon was invented at Chambers Works in 1938.

DuPont is currently facing 3,500 lawsuits over C-8 exposure in the mid-Ohio Valley between Ohio and West Virginia. The company's Parkersburg, West Virginia, facility was also a top production facility for Teflon. In a series of articles, The News Journal has documented DuPont's role in the pollution.

Carneys Point sits about five miles south of Chambers Works, a 1,445-acre site, just across the Delaware Memorial Bridge in Deepwater, New Jersey. In its lawsuit, the town alleges DuPont released over 100 million pounds of toxic chemicals into the water and ground from the late 19th century to the mid-1970s. In addition to Teflon, synthetic plastic and rubber as well as lead for no-knock gasoline were produced at the site. The lawsuit claims toxins from these products, which generated billions of dollars in sales for DuPont, impacted residents as far as two miles away from the plant.

Hazardous substances including mercury, benzene and ethyl chloride were all used at the plant.

BACKGROUND: DuPont: Toxic Legacy

STORY: Jury orders DuPont to pay $8M in C-8 case

The lawsuit claims DuPont has dumped over 100 million pounds of toxic chemicals into the water and ground since the plant opened in 1892.

"The Chambers Works site is a disaster worse than the Exxon Valdez, which spilled 88 million pounds of crude oil in Alaska resulting in over $1 billion in civil and criminal penalties," said the township's attorneys in the lawsuit.

In addition to DuPont, the town sued Sheryl Telford, director of DuPont's corporate remediation group.

The town is asking the court to calculate the penalties due under the Industrial Site Recovery Act, which requires companies to clean up a site before it is sold or transferred. It has asked the court to award tens of thousands of dollars per day multiplied by the number of years the site produced toxic chemicals. Plaintiff attorneys calculated the total cost to be around $1.126 billion.

Carneys Point has also asked the court to compel DuPont to establish a remediation trust.

DuPont no longer owns the plant, having transferred the Chambers Works deed to Chemours, a former DuPont unit that was spun off as an independent company in 2015. Chemours, a Wilmington chemical company, operates Chambers Works as an active plant. The company was said to have considered relocating its headquarters there before it decided to remain in Wilmington.

Under the spinoff agreement, DuPont can seek indemnification from Chemours for environmental remediation costs.

Dan Turner, a DuPont spokesman, said the company is reviewing the lawsuit's allegations, but he could not comment further because of pending litigation.

"Chemours is currently operating under a U.S. EPA environmental permit, with New Jersey Department of Environmental Protection to remediate the Chambers Works site," Turner said. "This is a long-standing project to which DuPont, and now Chemours, along with the federal and state agencies have invested considerable time and effort."

A Chemours spokeswoman declined to comment.

The lawsuit alleges DuPont failed to clean up the property before the transfer to Chemours, a violation of the Industrial Site Recovery Act. Attorneys at Meyner and Landis, a Newark, New Jersey law firm, contend the transfer of Chambers Works was an attempt to escape liability for the remediation, "making it a more attractive merger partner." DuPont and The Dow Chemical Co. announced last December they will merge into a $130 billion company before splitting into three separate businesses. Two of the three new businesses will be based in Delaware.

The merger is expected to be approved in early 2017.

"In order to finalize its merger with Dow, DuPont needed to shed 100 years of accumulated environmental liability to become a more attractive merger partner," the lawsuit charges.

Carneys Point's lawsuit contends Chemours, which is much smaller than DuPont, would go bankrupt under the massive cleanup costs, leaving Chambers Works a "rusting industrial nightmare the residents of New Jersey will be left to clean up without the funds to do so."

Lawrence A. Hamermesh teaches corporate law at Widener University Delaware Law School. He said DuPont cannot escape the environmental liability for Chambers Works simply by transferring it to another company. Under federal law, a company cannot escape remediation responsibilities by transferring or selling a contaminated site.

"It is hard for me to see how the spinoff has any bearing on the plaintiffs," he said. "It's not the kind of stuff DuPont can simply walk away from by virtue of the spinoff."

F. Michael Parkowski, a Dover attorney who has represented both public and private clients in environmental litigation, said in similar lawsuits, the action is usually initiated by the state. He said Carneys Point will have to prove the lack of remediation has caused health issues among its residents

"The town has to prove they have some ailment or injury," Parkowski said. "All the town is claiming is that there needs to be an environmental cleanup. Typically, in these cases, the penalty's to the state."

Thousands of New Jersey residents have sued DuPont over drinking water contamination at Chambers Works. One case settled in 1993 for $40 million and two more class-action suits were settled in 2011 with DuPont paying $800 to each household or installing an in-home water filtration system. Multiple remediation attempts have occurred at the site, including a major one involving the Department of Energy in 1996.

Jeff Tittle, president of The New Jersey Sierra Club, praised the lawsuit, saying Chambers Works has a "long history of polluting the environment."

"We need to make sure polluters pay all the costs to adequately clean up this pollution," he said. "We cannot allow DuPont to walk away from their mess and leave polluters on the hook for millions of dollars at the expense of the community and the environment. The people nearby this facility are already suffering from DuPont's pollution and they deserve a real cleanup that protects public health."

Earlier this week, an Ohio jury ordered DuPont to pay $2 million to a Washington County, Ohio, resident who claimed his testicular cancer was caused by C-8 exposure from the company's Washington Works plant, which since has been transferred to Chemours. It was the third straight lawsuit DuPont has lost over mid-Ohio Valley residents who have pursued litigation against the company alleging C-8 exposure is responsible for their illnesses.

DuPont has appealed two of those cases, including a $5.6 million verdict to David Freeman, an Ohio resident who alleged C-8 released from the Washington Works plant into the region's ground, water and air led to his cancer. A jury ordered both punitive and compensatory damages for his suffering.

Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or jmordock@delawareonline.com.