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DuPont C-8 Contamination Litigation Moves Forward- Cancer Victims Get Day in Court

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Despite DuPont’s wishes to the contrary, during an in-person status conference today, Chief Judge Edmund Sargus directed the plaintiffs’ steering committee in the C-8 multidistrict litigation against DuPont to initially select the 40 cancer cases to be held as 2017 post-bellwether trials, specifying that the schedule should place those plaintiffs with “the greatest amount of injuries” first, based on a “benchmark on medical criteria.” DuPont will then have an ability to raise objections to the particular cases chosen by the steering committee. The parties also spoke today about specifying certain scheduling details within a joint proposal they submitted to Judge Sargus, which he summarized in his case management order filed on the docket today.

In addition, DuPont was earlier directed to report today on the status of its merger with Dow Chemical, but after the PSC said an as-yet-not-publicly-disclosed affidavit from DuPont was insufficient, Judge Sargus directed the plaintiffs to supplement their pending motion to compel with a request for DuPont to specifically identify where the multidistrict liabilities will lie in the case of a Dow-DuPont merger. He also told the PSC to note in their supplement that they would like an explanation on Chemours’ recent disclosure of a potential contractual dispute with its former parent.

Judge Sargus began today’s conference acknowledging that the parties had agreed to various scheduling matters in the case management order before directing the conversation toward what was not agreed to – which cancer cases would be tried first in 2017. “This case now for the plaintiffs has been pending for almost 15 years, so that’s why we have so many cases scheduled,” Judge Sargus stated, adding that he “would pick the sickest cases first” and further noting that “nobody” disputes that the cancer cases should be held first because they are “the most serious.”

Judge Sargus acknowledged that the plaintiffs will share a role in selecting the cases for which the plaintiffs are the “sickest,” with DuPont’s counsel countering that it is difficult to quantify which plaintiffs are “sickest,” and saying that they would prefer Judge Sargus select the cases based on his own benchmark on medical criteria. Judge Sargus resolved the matter quickly, directing the PSC to submit, within the next two weeks, a short summary for each case it would like to prioritize for the 2017 schedule and telling DuPont that if they have any specific objections, they can make them at that time. When asked to clarify the number of cancer cases, Jon Conlin of Cory Watson for the PSC said that there are about 259 cancer cases, and added that 60% of the plaintiffs have multiple injuries. One client was diagnosed with cancer last week, despite the fact that the same client was previously identified as a class member with a less severe injury, Conlin added.

On the Dow-DuPont merger, DuPont presented an affidavit today that the PSC said did not meet their request for clarification on where the litigation liabilities would lie following a merger. The affidavit came from DuPont’s general counsel and confirmed that the merger will not be finalized until the second half of next year, but the affidavit did not identify where the liabilities would lie within the proposed merged Dow-DuPont structure. For the PSC, Robert Bilott of Taft said, “DuPont was supposed to come to court and explain how actual allocation of obligations and liabilities under Leach would be handled once the merger is split off into three companies.”

In response to DuPont’s affidavit and the PSC’s response, Judge Sargus told the plaintiffs to, within the next ten days, supplement its motion to compel with an additional filing arguing for disclosure of where liabilities will fall in the event of a Dow-DuPont merger, adding that they can specify their concern about Chemours’ potential contractual disputes with DuPont. In its 10-K for fiscal 2015, Chemours included under its risk factors,

“in the event that DuPont seeks indemnification for adverse trial rulings or outcomes, these indemnification claims could materially adversely affect our financial condition. Disputes between Chemours and DuPont may also arise with respect to indemnification matters including disputes based on matters of law or contract interpretation. If and to the extent these disputes arise, they could materially adversely affect us.”

Judge Sargus’ CMO anticipates the first four post-bellwether trials to begin on May 1, 2017, and Judge Sargus scheduled the next in-person MDL status conference with the parties for May 17.

Article written by Chelsea R. Frankel with Reorg Research.

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