$700 million settlement reached in Alabama PCB case

posted on:
August 20, 2003

author:
Jay Reeves

category:
Environmental

BIRMINGHAM – Solutia, Inc. and Monsanto, Co. have agreed to pay $700 million to settle claims by more than 20,000 Anniston residents over PCB contamination, plaintiff’s attorneys said Wednesday. The agreement, which will end a long-running trial in state court over decades –old pollution from a chemical plant in the east Alabama city, includes payments to homeowners and cash to fund a PCB research laboratory, lawyers for the residents said in a statement. The two companies said the settlement calls for $600 million in cash. Monsanto will pay $390 million, Solutia will pay $50 million and the rest will be covered by insurance, according to a statement from Monsanto. Costs for clean-up, prescription drug and other programs detailed in the agreement will push the total amount past $700 million, said Stacy Smith, a spokeswoman for the plaintiff’s attorneys. Another plaintiff’s attorney, Jere Beasley, said the total would surpass $800 million. Monsanto spokeswoman Lori Fisher said the company did not expect the settlement to result in any job cuts. Jurors already had awarded more than $100 million in verdicts against the companies in the trial, which began more than 1 ½ years ago. Experts expected the judgments to go much higher in the trial, which was expected to last months more. The deal also avoided a federal trial set for this fall over contamination from polychlorinated biphenyls, a once-common electrical insulator banned in the 1970s amid health concerns. “We are glad to have this litigation behind us as it removes a burden for the company, its employees and stakeholders; and the community of Anniston, Alabama,” Solutia Chairman and CEO John C. Hunter said in a statement. St. Louis-based Solutia, in a quarterly financial report last week, said it was considering filing for bankruptcy partly because of the economic costs of environmental lawsuits. Solutia agreed to a $40 million settlement in a previous federal case over PCB contamination in Anniston, and another lawsuit over waterway pollution was settled for $43.7 million. The settlement should help the company bankruptcy because it “removes a burden from us and puts us in a better position to address upcoming liabilities we face,” solute spokesman Glenn Ruskin said. The Anniston plant mad PCBs near a neighborhood in west Anniston for decades while operating as Monsanto. Solutia later was spun off from Monsanto. Robert Roden, an attorney for homeowners, aid internal documents showed the company was aware of the health hazards related to PCBs for decades and did nothing to warn the public. The lawyers’ statement said that along with payments to homeowners, the companies had agreed to fund a medical clinic and research center that would provide some free prescription medicines, health exams and a prescription drug program from Pfizer. The clinic is a “very big deal” for Anniston residents, according to Brendan DeMelle, an analyst with the Environmental Working Group in Washington. “The community’s biggest request was for medical monitoring,” said DeMelle. “It should mark the beginning of the end of Monsanto’s toxic legacy in Anniston.” Monsanto invented PCBs in Anniston in 1929, lawyers for the homeowners said. A federal judge in Birmingham recently approved an agreement reached between Solutia and the Environmental Protection Agency for a cleanup and studies of the contamination.

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