(Reuters) - Tyco Fire Products LP agreed in Charleston, South Carolina federal court on Thursday to settle a putative class action lawsuit by some 200 households in northern Wisconsin who claim a nearby site that tests firefighting foam contaminated their drinking water with a toxic chemical.

Tyco and another subsidiary of Johnson Controls International PLC said that together with chemical company ChemDesign Products Incorporated, they will pay $17.5 million to end the claims of residents of the town of Peshtigo that per- and polyfluoroalkyl (PFAS) contained in the fire-suppressant foam tested at the nearby Tyco Fire Technology Center in Marinette, dangerously leaked into their private drinking-water wells.

The defendants do not admit wrongdoing in the agreement, which is subject to approval by Judge Richard Gergel of the U.S. District Court for the District of South Carolina. Tyco and Chemguard are represented by Williams & Connolly. An attorney at Gordon Rees Scully Mansukhani who represents ChemDesign did not immediately respond to a request for comment.

The case is among about 500 cases that make up a pending multi-district litigation (MDL) in which plaintiffs allege being injured through drinking water by film-forming foams (AFFFs) at industrial and military sites as well as airports. The MDL is at the discovery stage to narrow down the pool of bellwether cases.

Tyco spokeswoman Katie McGinty said in a statement: "This settlement agreement is part of Tyco's efforts to address the disruption this issue has caused our neighbors."

Paul Napoli of Napoli Shkolnik, who represents the plaintiffs and is also co-lead counsel in the MDL, told Reuters that the agreement is the "first settlement of any AFFF case in the country involving personal injury, property damage and medical exposure damages."

"It is tacit recognition that this is a major problem that will have to be dealt with community by community. Extrapolating these numbers out from a community of 200 homes to the rest of those communities affected by AFFF means this is a $300 billion dollar problem for the AFFF, fluorosurfactant and telomer markets," he added.

Under the terms of the deal, $15 million will compensate members of the putative class for property damage and personal harm suffered, and $2.5 million will be allocated individually to those who have been diagnosed with one of five diseases, including testicular and kidney cancers.

The complaint, filed in 2018 in state court in Wisconsin, says the chemicals that contaminated their wells through groundwater include perfluorooctanoic acid (PFOA), part of the wider PFAS family.

PFOA is associated with various illnesses including cancer. PFAS, nicknamed "forever chemicals" because they don't break down easily, have been used for decades in household and industrial products.

Tyco and Chemguard are also parties to other cases involving the use of AFFFs on military bases and airfields, according to an SEC filing. The companies "believe that they have a government contractor defense available to them" in these cases, they said in the filing.

Tyco says it wants to fund a new water line to permanently provide clean drinking water to impacted residents of Peshtigo. It currently provides them with bottled water.

The case is Campbell et al v. Tyco Fire Products LP et al, U.S. District Court for the District of South Carolina, No. 2:19-cv-00422.

For Campbell et al: Paul Napoli of Napoli Shkolnik

For Tyco Fire Products LP et al: Joseph Petrosinelli of Williams & Connolly