3M said Thursday it will pay as much as $12.5 billion to settle drinking water claims by public water systems, in a deal that needs the approval of the federal court in Charleston.

The St. Paul, Minnesota, company said it has agreed to a proposed class-action settlement with U.S. public water systems over PFAS, the so-called forever chemicals, in drinking water. If the court approves the deal and all its conditions are met, 3M will pay $10.5 billion to $12.5 billion, in annual payments from 2024 through 2036, the company said in a filing with the Securities and Exchange Commission.

3M put the present value of the deal at up to $10.3 billion. It expects to take a pre-tax charge of about that amount in the second quarter.

3M said the agreement is not an admission of liability, and the settlement agreement says the company does not admit any liability or wrongdoing.

“This is an important step forward for 3M, which builds on our actions that include our announced exit of PFOA and PFOS manufacturing more than 20 years ago, our more recent investments in state-of-the-art water filtration technology in our chemical manufacturing operations, and our announcement that we will exit all PFAS manufacturing by the end of 2025,” said Mike Roman, 3M’s chairman and CEO.

What the deal covers

The money would pay for treatment technology at water systems that have detected PFAS, for testing, and for systems that detect the chemicals in the future, according to 3M. The final amount depends partly on how many systems without a positive test now get one by the end of 2025, the filing says.

In exchange, water systems in the class would release 3M from claims over PFAS in drinking water, including claims tied to aqueous film-forming foam, or AFFF, the firefighting foam at the center of the Charleston case.

3M can walk away if too many eligible water systems opt out, the filing says.

The proposed class counsel are Michael London of Douglas & London, Scott Summy of Baron & Budd, Paul Napoli of Napoli Shkolnik and Elizabeth Fegan of Fegan Scott, according to the settlement agreement.

Why Charleston

The settlement needs preliminary and final approval from the U.S. District Court for the District of South Carolina, which oversees the national AFFF litigation. 3M described that litigation as based in Charleston. In December 2018, a panel of federal judges sent AFFF cases from across the country to the court, where U.S. District Judge Richard Gergel has managed them.

As of March 31, about 4,150 lawsuits had been filed against 3M and other defendants over AFFF, most of them in the Charleston court, 3M said in its quarterly report in April. They include about 300 cases by public water systems. Individuals, states and others have cases there too.

The court had picked a suit by the city of Stuart, Florida, as the first water system case to go to trial, and the trial had been scheduled to begin June 5, according to 3M’s report. 3M’s total payment under the new agreement includes the full amount of a separate settlement 3M reached with Stuart, the settlement agreement says.

The court has repeatedly encouraged the parties to negotiate, and in October 2022 it appointed a retired federal judge as mediator, 3M said in the report.

Three weeks after DuPont deal

3M’s agreement follows a June 2 deal by Chemours, DuPont and Corteva to pay $1.185 billion to resolve PFAS drinking water claims of a similar class of public water systems, including systems in the South Carolina AFFF litigation.

Chemours will pay about $592 million of that, DuPont about $400 million and Corteva about $193 million, the companies said. That deal also needs approval from the court in South Carolina. The three companies said they deny the allegations in the underlying litigation.

3M made AFFF containing certain PFAS from about 1963 to 2002, it said in its report.

The company said it will keep fighting if the deal falls apart.

“If the agreement is not approved by the court or certain agreed terms are not fulfilled, 3M is prepared to continue to defend itself in the litigation,” the company said. It also said it will continue to address its other PFAS lawsuits by defending itself in court or through negotiated resolutions.