3M 2014 Annual Report Download - page 114

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abated this case, putting it on hold pending the resolution of the class certification issues in the first case filed there. In
May 2013, the court stayed the case due to co-defendant Synagro’s bankruptcy filing. Pursuant to directions from the
Morgan County court, on December 31, 2014, the parties reported that the Synagro Chapter 11 bankruptcy case was
concluded and closed in September 2014. The parties will request a status conference with the Morgan County court in
the first half of 2015.
In December 2010, the State of Minnesota, by its Attorney General Lori Swanson, acting in its capacity as trustee of the
natural resources of the State of Minnesota, filed a lawsuit in Hennepin County District Court against 3M to recover
damages (including unspecified assessment costs and reasonable attorney’s fees) for alleged injury to, destruction of,
and loss of use of certain of the State’s natural resources under the Minnesota Environmental Response and Liability Act
(MERLA) and the Minnesota Water Pollution Control Act (MWPCA), as well as statutory nuisance and common law claims
of trespass, nuisance, and negligence with respect to the presence of PFCs in the groundwater, surface water, fish or
other aquatic life, and sediments (the “NRD Lawsuit”). The State also seeks declarations under MERLA that 3M is
responsible for all damages the State may suffer in the future for injuries to natural resources from releases of PFCs into
the environment, and under MWPCA that 3M is responsible for compensation for future loss or destruction of fish, aquatic
life, and other damages.
In November 2011, the Metropolitan Council filed a motion to intervene and a complaint in the NRD Lawsuit seeking
compensatory damages and other legal, declaratory and equitable relief, including reasonable attorneys' fees, for costs
and fees that the Metropolitan Council alleges it will be required to assess at some time in the future if the MPCA imposes
restrictions on Metropolitan Council's PFOS discharges to the Mississippi River, including the installation and
maintenance of a water treatment system. The Metropolitan Council's intervention motion was based on several theories,
including common law negligence, and statutory claims under MERLA for response costs, and under the Minnesota
Environmental Rights Act (MERA) for declaratory and equitable relief against 3M for PFOS and other PFC pollution of the
waters and sediments of the Mississippi River. 3M did not object to the motion to intervene. In January 2012, 3M
answered the Metropolitan Council's complaint and filed a counterclaim alleging that the Metropolitan Council discharges
PFCs to the Mississippi River and discharges PFC-containing sludge and bio solids from one or more of its wastewater
treatment plants onto agricultural lands and local area landfills. Accordingly, 3M requested that if the court finds that the
State is entitled to any of the damages the State seeks, 3M seeks contribution and apportionment from the Metropolitan
Council, including attorneys' fees, under MERLA, and contribution from and liability for the Metropolitan Council's
proportional share of damages awarded to the State under the MWPCA, as well as under statutory nuisance and common
law theories of trespass, nuisance, and negligence. 3M also seeks declaratory relief under MERA.
In April 2012, 3M filed a motion to disqualify the State of Minnesota’s counsel, Covington & Burling, LLP (Covington). In
October 2012, the court granted 3M's motion to disqualify Covington as counsel to the State and the State and Covington
appealed the court’s disqualification to the Minnesota Court of Appeals. In July 2013, the Minnesota Court of Appeals
affirmed the district court’s disqualification order. In October 2013, the Minnesota Supreme Court granted both the State’s
and Covington’s petition for review of the decision of the Minnesota Court of Appeals. In April 2014, the Minnesota
Supreme Court affirmed in part, reversed in part, and remanded the case to the district court for further proceedings. In a
separate but related action, the Company filed suit against Covington for breach of its fiduciary duties to the Company and
for breach of contract arising out of Covington’s representation of the State of Minnesota in the NRD Lawsuit.
The State of New Jersey filed suit in 2005 against Occidental Chemical Corporation, Tierra Solutions Inc., Maxus Energy
Corporation and five other companies seeking cleanup and removal costs and other damages associated with the
presence of dioxin and other hazardous substances in the sediment of a 17-mile stretch of the Passaic River in New
Jersey. In June 2009, the Company, along with more than 250 other companies, was served with a third-party complaint
by Tierra Solutions Inc. and Maxus Energy Corporation seeking contribution towards the cost and damages asserted or
incurred for investigation and remediation of discharges to the Passaic River. The third-party complaint seeks to spread
those costs among the third-party defendants, including 3M. Allegations asserted against 3M relate to its use of two
commercial drum conditioning facilities in New Jersey. In March 2013, 3M and other third party defendants entered into a
settlement agreement with the state of New Jersey for an amount that is not material to 3M. In December 2013, the court
approved the settlement and entered the Consent Judgment. The settlement resolves claims or potential claims by the
State of New Jersey regarding discharges or alleged discharges into the Passaic River by the settling parties, and
precludes certain cost recovery actions by the third-party plaintiffs. The settlement with the State of New Jersey does not
include release from potential federal claims yet to be asserted. Total costs for the remedy currently proposed by EPA
could easily exceed $1 billion. While the Company does not yet have a basis for estimating its potential exposure in the
yet to be asserted EPA claim, the Company currently believes its allocable share of the possible loss, if any, is likely to be
a fraction of one percent of the total costs because of the Company’s limited potential involvement at this site.
For environmental litigation matters described in this section for which a liability, if any, has been recorded, the Company
believes the amount recorded, as well as the possible loss or range of loss in excess of the established accrual is not
material to the Company’s consolidated results of operations or financial condition. For those matters for which a liability