UPDATE 1-Johnson Controls unit to pay $750 mln to settle 'forever chemicals' lawsuit

(Adds context and background throughout)

By Clark Mindock and Aishwarya Jain

April 12 (Reuters) - Johnson Controls said on Friday its subsidiary Tyco Fire Products had agreed to a $750 million settlement with some U.S. public water systems that claimed toxic "forever chemicals" in firefighting foam made by the company had contaminated their water supplies.

The money provided by the settlement, which must be approved by a federal judge, will help cities, towns and other public water systems remediate contamination of per- and polyfluoralkyl substances, or PFAS.

The settlement does not constitute an admission of liability or wrongdoing by Tyco, Johnson Controls disclosed in a regulatory filing, adding that a charge for the amount was recorded in the second quarter ended March 31.

"This settlement resolves claims involving contaminated drinking water and provides compensation critical to protecting our nation’s drinking water supplies and upgrading our water treatment infrastructure to deal with this new emerging threat," said Paul Napoli, an attorney for the water systems.

PFAS are a class of chemicals used in thousands of consumer and commercial products, including firefighting foams, non-stick pans and stain-resistant fabrics. They have been tied to cancers and other diseases, and are often called forever chemicals because they do not easily break down in nature or the human body.

Tyco is among nearly two dozen chemical companies that have faced lawsuits brought by water systems over PFAS pollution in sprawling litigation that has been centralized in a South Carolina federal court. The lawsuits focus on PFAS that contaminated groundwater after being sprayed in firefighting foams at fire houses and airports across the country.

In 2023, those lawsuits led to more than $11 billion in settlements between major chemical companies and U.S. water systems.

The largest settlement, agreed to by 3M in June, will provide $10.3 billion to U.S. public water systems for testing and treating PFAS in American drinking water systems. A similar settlement involving Chemours, Corteva and DuPont de Nemours was also reached last year for $1.19 billion.

U.S. District Judge Richard Gergel in Charleston, who is overseeing the litigation, has warned the lawsuits could pose an “existential threat” to companies facing PFAS claims.

Friday's settlement is subject to Gergel's approval. Tyco expects to pay $250 million of the settlement by May, and the remaining $500 million six months after the court gives its preliminary approval.

In addition to the lawsuits brought by water systems, chemical companies also face thousands of personal injury lawsuits consolidated in the South Carolina court by people who claim exposure to PFAS caused their cancers and other diseases. Other lawsuits have been filed by states and property owners who claim PFAS damaged their lands as well.

On Thursday, the U.S. Environmental Protection Agency finalized the first federal regulations on forever chemicals in drinking water, setting tight limits on the amount of PFAS present in public water.

Those EPA regulations could make it easier for water systems to sue companies over PFAS contamination, but are likely to be challenged in court. (Reporting by Aishwarya Jain in Bengaluru and Clark Mindock in New York; Editing by Alexia Garamfalvi and David Holmes)