At the end of February, materials science conglomerate 3M (NYSE:MMM) announced it had reached an $850 million settlement with the state of Minnesota to end what could have been the largest environmental lawsuit in United States history. While shareholders will be forced to swallow a one-time charge of $1.15 per share in the first quarter of 2018 as a result of the settlement, it could have been a lot worse. The state sued for $5 billion in environmental damages, namely the contamination of public and private drinking supplies, caused by the release of chemicals the company phased out of production in 2002. 

The news was not lost on shares of Chemours Company (NYSE:CC). That's because the company has become embroiled in controversy from its historical and current release of related chemicals, called perfluorinated chemicals, or PFCs. But whether or not the settlement is good news, bad news, or no news may be a little more difficult for individual investors to determine. So, what should shareholders make of 3M's settlement?

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Big deal, or much ado about nothing?

The state of Minnesota and 3M announced the settlement the day the lawsuit was scheduled to begin. The compromise will see the company provide to the state an $850 million grant to establish the "3M Grant for Water Quality and Sustainability Fund." Monies will be used to cover reclamation costs at former manufacturing sites, invest in habitat and recreation improvements, and provide bottled water and in-home filtration systems for certain homeowners for at least the next five years.

While calling the settlement a "grant" may not sit well with everyone, the state of Minnesota didn't have anything to gain by running the company through the mud. After all, 3M was founded in Minnesota over 115 years ago and employs some 16,000 people there today. The important thing is that funding is being provided to help protect the long-term health of over 67,000 citizens in contaminated areas.

That said, throughout the process 3M repeatedly stated it did not believe PFCs caused any public health issue. A Minnesota Health Department report published just two weeks before the settlement was announced seemed to corroborate that, concluding that the affected communities did not see a significant increase in cancer rates or low-birth-weight babies, two common observations in communities with exposure. (The report has suspicious circumstances of its own, however.) 

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While recent events could be viewed as providing an optimistic outlook for Chemours Company shareholders, there are important differences between 3M's lawsuit and settlement and similar legal issues surrounding the DuPont spin-out.

Investors will remember that DuPont and Chemours Company reached a settlement in federal court in February 2017 over the historical release of PFCs from a manufacturing facility in West Virginia. That lawsuit was settled for $671 million -- less than 3M's recent "grant," and well below Wall Street expectations for a $1 billion charge. While the companies denied any wrongdoing, there was irrefutable evidence that PFCs caused a public health crisis in the affected communities. 

In other words, Chemours Company appeared to get off relatively easily, especially compared with 3M's $850 million settlement, and considering there's no observable link to public health issues (yet) from its historical disposal of PFC. That could come back to haunt shareholders.

That's because Chemours Company is facing a fresh slate of lawsuits in North Carolina (and other states) for a different set of PFCs. They're probably too new to be directly linked to human health issues in the near future, but the company hasn't exactly done itself any favors. It told state and federal regulators that it would stop releasing the PFCs into the environment, got caught red-handed doing just that, and then tried to blame another company it shares a manufacturing site with.

What it means for Chemours Company

Here's what shareholders might want to worry about: 3M agreed to settle a lawsuit for $850 million, which would help to remedy a situation for 67,000 citizens in Minnesota. The Cape Fear river in North Carolina in which Chemours Company has recently released PFCs provides drinking water for over 770,000 people.

So although it's far too early to determine exactly how Chemours Company and its shareholders will fare in the courts of North Carolina, the recent 3M settlement may have provided a worrisome legal precedent for future lawsuits involving potential environmental damage from PFC disposal. Investors can't say they weren't warned.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool recommends 3M. The Motley Fool has a disclosure policy.