3M lays out 'attack' on Commonwealth's $2 billion PFAS lawsuit

In short:

The Australian government is suing 3M, the manufacturer of a firefighting foam it claims contaminated 28 Defence Force bases across the nation.

The US chemical giant has detailed its planned defence to the $2 billion lawsuit.

What's next?

3M must file its defence by December 11.

US chemical giant 3M has shed light on its planned "attack" on the federal government's $2 billion lawsuit, which alleges the company withheld evidence that its firefighting products were toxic to humans and the environment.

The Commonwealth is seeking damages arising from per- and polyfluoroalkyl substances (PFAS) contamination at 28 Defence Force bases across Australia and the areas surrounding them.

The largest-ever court claim brought by the Australian government alleges the company continued to make and sell aqueous film-forming foam (AFFF) until 2003, despite knowing the dangers of its chemical make-up since 1979.

The 1,600-page statement of claim says the use of 3M's AFFF "resulted in significant contamination" of land and water, including drinking water, that posed risks to human and animal health and the environment.

Citing 310 internal company documents, the federal government's lawyers allege 3M falsely made assurances the product was safe despite having studies that proved variants of PFAS were toxic to animals, could cause birth defects and harmed the environment.

During a case management hearing in the Federal Court today, King's Counsel for 3M Phillip Solomon outlined what the defence's case would entail when it was filed to the court on December 11.

Mr Solomon KC said a "large team is working hard" and that it would "attack" the case.

He told the court that there were three courses of action it would plead to; public nuisance, a Victorian Environment Protection Authority claim, and a misleading and deceptive conduct claim.

Mr Solomon said the latter would need to be "delineated" between the overseas manufacturer and the local distributor of 3M products.

In its statement of claim, the Commonwealth alleges the company caused a public nuisance by interfering with the use and enjoyment of the environment and by hindering access to contaminant-free water.

Justice Catherine Button was told by the defence that the issue of public nuisance was not available in the matter.

"We will plead and ultimately contend that it doesn't contend a nuisance claim," Mr Solomon said.

"The allegation [is] that we had the means to abate the nuisance, that we caused the nuisance, that we were responsible for the special loss associated with the nuisance … and broadly had the ability to control the nuisance."

The 28 bases have been split into three categories, including steady state, expanding, and in exceedence of Australian Drinking Water Guidelines and Australian Recreational Guidelines.

The Commonwealth has proposed that 3M plead to six "representative bases" that have features across those categories, including Wagga (NSW), Tindal (NT), Townsville (Qld), Oakey (Qld), Edinburgh (SA) and East Sale (Vic).

Mr Solomon told Justice Button the defence would be seeking to focus on one of the 28 bases in question, rather than six.

In reply, counsel for the Commonwealth Fiona McLeod AO SC said the Crown was "seeking representative bases" that covered issues such as cross-contamination, topography and soil type.

Questions over liability and toxicity

The Commonwealth is seeking $2 billion to cover "substantial costs" incurred from contaminated land and water.

That includes $214 million for investigations, remediation and ongoing monitoring, and $367 million in settlements from five class actions brought against the government.

Mr Solomon told the court the case raised questions about allegations of toxicity and whether there was subsequent liability, particularly in instances where remediation had been carried out.

"When the Commonwealth cleans up bases … and sues us and seeks that sum of money … there are going to be questions [about] what, if any of that we would be liable for,"he said.

The court also heard discussion about the definition of the term "potentially toxic".

"[The phrase] "potentially toxic" isn't a legal concept," Mr Solomon told the court.

"If [the Crown] mean to tell us that their reliance isn't really on a collection of words but a particular concentration [or] type, they can tell us."

Ms McLeod told the court the term was taken from the defence's own documentation and that it was for them to provide a more precise definition.

"There's no particular magic in 'potentially toxic'," she said.

Another case management hearing has been set for December 1.

When Attorney-General Michelle Rowland announced the legal action in May, a 3M spokesperson said in a statement that it had never manufactured PFAS in Australia and ceased sales of the products at issue about two decades ago.

"Despite this, the Department of Defence continued to use PFAS-containing firefighting foams for nearly two decades longer," it said.

Documents show Defence did not fully replace the 3M foam until July 2012.