debtor parties, such as the Sacklers, without the consent of those affected by the claims. The Supreme Court explained that the broader powers in § 1123(b)(6) must be interpreted in the context of the surrounding provisions, which focus on the debtor’s relationship with creditors. The Supreme Court held that this provision cannot be used to grant a discharge of claims against non-debtors. The Bankruptcy Code generally reserves discharge for debtors who place substantially all of their assets into the bankruptcy estate. Furthermore, the Code does not typically allow the discharge of claims based on fraud or willful injury. The Sacklers, however, had not filed for bankruptcy or placed their assets on the table for creditors, yet they sought a discharge of broad claims, including those for fraud and willful injury. The Supreme Court found that allowing such a discharge would violate the basic principles of bankruptcy law. The Supreme Court also looked to historical practice, noting that bankruptcy laws dating back to the 1800’s typically reserved discharge benefits to debtors who surrendered their property fairly and completely. There was no indication in the 1978 bankruptcy code that it was meant to radically change this tradition, particularly in regard to non-debtor releases. The Supreme Court opined that if Congress had intended to grant courts such broad powers over third-party claims, it would have explicitly stated so. Accordingly, the Supreme Court reversed the Second Circuit’s decision and remanded the case for further proceedings. The Supreme Court’s ruling made clear that bankruptcy courts cannot release claims against third parties like the Sacklers without the affected parties’ consent. II. PFAS Litigation Another recent hotbed of litigation involves PFAS (per- and polyfluoroalkyl substances). These chemicals are commonly known as “forever chemicals” due to the time it takes for them to break down. PFAS are widely used and found in many products. They exist in water supplies, fish, and soil locations across the globe, and based on some scientific studies, PFAS may be linked to harmful health effects in humans. Numbering in the thousands, PFAS are found in consumer, commercial, and industrial products, and due to their presence in so many products, it is challenging to assess the health impact of PFAS. In recent years, the EPA has issued a number of guidelines around PFAS in drinking water and shown commitment to better understanding ways to detect PFAS and the amount of human exposure. Moreover, the U.S. Environmental Protection Agency has undertaken efforts to understand how to remediate, manage, and dispose of PFAS present in drinking water supplies more efficiently.
Another six states enacted PFAS regulations that went into effect in 2024 and will continue in 2025, including Colorado, Maryland, Connecticut, Minnesota, Hawaii, and New York. The graphic outlines these regulations. The discovery of PFAS in drinking water has spurred states attorneys’ general to bring lawsuits on behalf of the constituents. These lawsuits seek to impose liability on the PFAS manufacturers related to drinking water contamination and assert claims under various products liability laws and negligence.
In April 2024, the EPA finalized a rule setting the first-ever limits for PFAS in drinking water and is already subject to multiple legal challenges. In October of 2024, the White House’s Office of Science and Technology Policy said in a report that it will continue to look for new technologies to remove so-called forever chemicals from the environment and find safe alternatives for the substances. Since 2018, more than 300 lawsuits have been filed over PFAS contamination, with many suits being
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© Duane Morris LLP 2025
Products Liability & Mass Torts Class Action Review – 2025
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