A qualified disqualification delays suit vs. 3M

It's been nearly 3½ years since the 3M Co. was targeted in what could be the largest environmental damages lawsuit in Minnesota history. But for two of those years, the case has been mired in a side dispute over whether the state's law firm should be disqualified because it once represented 3M.

That skirmish will continue, at least for several more months, following a ruling Wednesday by the Minnesota Supreme Court that further delays the start of a long-awaited trial over alleged damages caused by perfluorochemicals (PFCs) in the east metro.

The court affirmed some arguments that the state's law firm in the case should be disqualified — a potentially major blow that would force the state to restart legal proceedings from scratch — but sent the case back to Hennepin County District Court to reconsider other key questions.

How long it will take to address those questions is uncertain. And there's a possibility the case could return to the state Supreme Court. As of Wednesday, both sides claimed a partial victory in the ruling, despite its lack of clear resolution on the disqualification question.

"3M polluted the waters, and this case is about getting the company to make it right," said Ben Wogsland, spokesman for the state attorney general's office. The company's effort to stall the case has been frustrating, he said, and the state hopes the focus can soon return to the substance of the lawsuit.

Similarly, William A. Brewer III, 3M's lead counsel in the case, said he is eager to get to trial and show the state's environmental case lacks merit. "We look forward to continuing our defense of 3M based on sound science, the facts and a complete record of the company's environmental practices," he said.

At issue in Wednesday's ruling was whether Covington & Burling, a Washington, D.C., law firm with expertise in environmental matters, should be allowed to handle the state's lawsuit, filed in December 2010, against 3M over those PFC damage claims. Covington, which has a history of working with the state dating to 1995, took the case on a contingency basis, meaning its fee would be based on a potential settlement.

One problem: The law firm previously represented 3M on regulatory and other legal matters related to PFCs. Because that relationship could give the law firm an advantage in its new role as the company's legal nemesis, Covington was required by rules of legal procedure to get consent from 3M before it could be allowed to represent the state.

3M's consent was not formally requested — both sides agree on that.

In the ruling Wednesday, the justices directed the lower court to reconsider the question of whether 3M had waived its right to give that consent.

3M asserts that by failing to get consent, Covington broke the rules and breached both its legal and ethical responsibilities to a former client and violated the confidentiality of the lawyer-client relationship. In a separate case, the company has since sued the law firm on that issue.

The state, however, counters that 3M waived its right to consent by waiting to seek Covington's disqualification until well after — 1½ years and $2 million to $3 million in litigation costs — the suit was filed, then essentially pulling the trigger at a critical time when the case was closing in on trial.

Attorneys for the state also presumed that 3M was aware Covington was representing the state, and that since it had not objected, was giving consent. 3M said that was not the case and that it was unaware of the extent of Covington's involvement in 3M's PFC issues.

PFCs are a family of compounds made by 3M over 50 years, until 2002. They are still made by other companies, however, and used in a vast array of consumer and manufactured goods.

The lawsuit is potentially the largest of its kind brought by the state and the largest in Minnesota since the U.S. Department of Justice sued Reserve Mining Co. in 1972 over its disposal of taconite tailings into Lake Superior.

After PFC contamination was found in the Mississippi River near the company's Cottage Grove plant, and then in soil, surface water and groundwater around the company's four licensed disposal sites in Washington County, 3M agreed in 2007 to begin a massive cleanup effort. But while the state and the company reached accord on the cleanup, they were unable to settle the state's claim that it is entitled to compensation for damages to its natural resources caused by PFCs. That impasse triggered the state's lawsuit.

The case, initially scheduled for trial last summer, is expected to be a closely watched legal showdown over the issue of whether PFCs are harmful to human health.

Jim Anderson • 651-925-5039