N.C. Supreme Court affirms business court’s jurisdiction over DuPont, allowing Attorney General’s case to move forward

The Supreme Court of North Carolina has struck down an attempt by DuPont to dismiss the lawsuit filed by Attorney General Josh Stein on jurisdictional grounds.
Published: Nov. 4, 2022 at 4:43 PM EDT
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BLADEN COUNTY, N.C. (WECT) - The Supreme Court of North Carolina has struck down an attempt by DuPont to dismiss the lawsuit filed by Attorney General Josh Stein on jurisdictional grounds, according to a release from the AG’s office.

“People have to be able to trust that the water they drink is safe. We allege that DuPont and Chemours have dumped forever chemicals into the Cape Fear River – and we intend to hold them accountable for the damage that they’ve caused to the State’s resources. I appreciate and applaud the Court’s decision to let this case move forward,” Stein’s office said in a release.

In brief, the court says that DuPont deliberately attempted to restructure their company in a way that reduces their liability. The court didn’t buy this, writing that though personal jurisdiction “protects against the threat of litigation in arbitrary jurisdictions, it is not a tool to be weaponized against claimants by enabling defendants to evade accountability for potentially tortious conduct.”

“But according to the State, that is precisely what E.I. DuPont de Nemours and Company (“Old DuPont”) sought to do.”

Per the court’s opinion, the state brought an action against DuPont de Nemours and Company in 2020 for their use of PFAS in their facilities. With a $300 million class action settlement in West Virginia related to PFOA discharges and a $670 million settlement in multidistrict litigation, the state says DuPont restructured to reduce further liability.

DuPont as it exists pre-restructuring will be called “Old DuPont.” Old DuPont’s Performance Chemicals Business, including the present-day Chemours Fayetteville Works facility, was transferred to a fully-owned subsidiary called Chemours. Chemours was turned into a separate public company, but the state says it was intentionally left without enough resources to satisfy Old DuPont’s liabilities. Once it was made a separate company, Chemours was reported to have assets totaling $6.3 billion and liabilities totaling $6.2 billion.

Old DuPont and the Dow Chemical Company reorganized under the holding company DuPont de Nemours, making Old DuPont and the Dow Chemical Company subsidiaries.

This top-level holding company received a “substantial portion” of Old DuPont’s assets.

DuPont de Nemours created new business lines and two new companies: Dow, Inc. to hold the old Dow Chemical Company as a subsidiary, and Corteva to hold Old DuPont. Then, the court says that Old DuPont transferred their lines of business to other parts of DuPont de Nemours for less than those lines were worth. The court says that Old DuPont’s value has dropped ever since, once falling to negative $1.1 billion.

Then, the State says, DuPont de Nemours spins off Corteva, which holds Old DuPont and Dow, Inc. into their own public companies.

DuPont de Nemours and Corteva, in their motion to dismiss, argue that the liability shouldn’t fall on them because they are “just holding companies” and outside of North Carolina. The Business Court disagreed, so DuPont and Corteva appealed.

The State Supreme Court affirmed the business court’s decision.