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$90 Billion Whistleblower Suit Filed Against Four of the Nation's Largest Chemical Companies
Four of the country's largest chemical companies have been accused of selling billions of dollars worth of harmful isocyanate chemicals but intentionally concealing their dangers to consumers and the U.S. Environmental Protection Agency (EPA) over the past several decades.
BASF Corporation, Bayer Material Science LLC, Dow Chemical Company and Huntsman International LLC have been named in a False Claims Act (FCA) lawsuit brought by New York law firm Kasowitz, Benson, Torres & Friedman LLP on behalf of the U.S. government.
EcoWatch learned that the recently unsealed whistleblower lawsuit was served on the chemical companies on Wednesday. The lawsuit was originally filed under seal in federal court in Northern California.
Kasowitz brought this action on behalf of itself and the federal government to recover more than $90 billion in damages and penalties under the FCA, which imposes penalties for concealing obligations to the government.
According to a copy of the lawsuit seen by EcoWatch, "Each of these companies is separately liable to the United States Government for billions of dollars in civil reporting penalties, which continue to accumulate by tens of thousands of dollars daily, and for billions of dollars in similarly increasing breach of contract damages."
In the suit, the law firm said that the defendants manufacture and sell isocyanate chemicals such as methylene diphenyl diisocyanate (MDI), polymeric MDI (PMDI) and toluene diisocyanate (TDI). These raw materials make up polyurethane products such as liquid coatings, paints and adhesives; flexible foam used in mattresses and cushions; rigid foam used as insulation; and elastomers used to make automotive interiors.
Occupational Safety and Health Administration (OSHA) states that exposure to isocyanate can irritate the skin and mucous membranes, cause chest tightness and difficult breathing. Isocyanates also include compounds classified as potential human carcinogens and is known to cause cancer in animals.
As alleged in the complaint, the defendants, the isocyanate industry and the EPA have long known that inhalation of isocyanates, including MDI, PMDI and TDI, can cause harm to human health.
Kasowitz believes that the chemical giants obtained scientific evidence that their widely used isocyanate chemicals can cause serious health injuries in ways not known to the EPA or the public, but failed to disclose this information to the EPA, thereby breaching their obligations under the Toxic Substances Control Act.
"Between at least 1979 and 2003, each defendant obtained and developed discrete and separate items of scientific and medical information that TDI, MDI and PMDI can cause and had caused permanent respiratory injury in humans when inhaled at levels below applicable inhalation exposure limits (low-level inhalation)," the lawsuit states.
The lawsuit further states that "Each defendant also knew during this time period that a very small quantity of TDI, MDI or PMDI on the skin—as little as one drop or 50 microliters—could cause respiratory injury in humans.
"Defendants knew that this information reasonably supported the conclusion that TDI, MDI and PMDI presented a substantial risk of injury to health, that the EPA was not adequately informed of that information, and that TSCA therefore required that they (each defendant) immediately report the substantial risk information to the EPA."
According to Andy Davenport of Kasowitz, "The defendants' cover-up implicates major human health concerns. Thankfully, the whistleblower law allows us to assist the federal government in holding these companies responsible for their actions while we alert regulators and the public to the serious undisclosed hazards of these chemicals."
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