Judge halts arbitration in Chemours-DuPont dispute

A Delaware judge has temporarily halted arbitration between the DuPont Co. and Chemours as he weighs whether to dismiss a lawsuit

DOVER, Del. -- A Delaware judge has temporarily halted arbitration between the DuPont Co. and Chemours as he weighs DuPont's request to dismiss a lawsuit claiming that it massively downplayed the cost environmental liabilities imposed on Chemours.

The case centers on theliabilities Chemours was saddled with after DuPont spun off its former performance chemicals unit in 2015.

The judge's granted Chemours' request to pause the arbitration on Thursday, one day after he heard arguments on DuPont's dismissal motion.

Chemours sued DuPont earlier this year, alleging that DuPont deliberately lowballed the cost of environmental liabilities Chemours would face in indemnifying DuPont for pollution related to man-made chemicals known as per- and polyfluoroalkyl substances, or PFAS.

The chemicals have been used in firefighting foam, nonstick cookware, water-repellent clothing and many other household and personal items. They sometimes are referred to as "forever chemicals" because of their longevity in the environment.

The PFAS family of chemicals, which have been associated with increased risk of cancer and other health problems, includes perfluorooctanoic acid, or PFOA, which was used in the production of Teflon.

At the time of the Chemours spinoff, DuPont was facing multidistrict litigation involving 3,500 personal injury claims related to PFOA. DuPont pegged the maximum liability for those cases at $128 million. It settled 19 months later for $671 million, with DuPont agreeing to pay half the settlement amount, and up to $125 million more toward costs of other PFOA-related litigation.

DuPont has argued that the lawsuit must be dismissed because the separation agreement with Chemours mandates that any disputes arising from the 2015 spinoff must be resolved through private arbitration.

Chemours says it was never in the position to consent to arbitration and that the arbitration clause is therefore invalid.

The judge ruled Thursday that if Chemours is correct, allowing the arbitration to proceed would force Chemours to submit to an arbitration absent a contractual obligation to do so, which he said would amount to irreparable harm to Chemours.