Monsanto, Solutia Settle PCB Claims, Ala. Residents to Get $600 Million for Decades of Toxic Dumping

posted on:
August 21, 2003

author:
Joshua Partlow

category:
Environmental

Monsanto Co., and its former chemicals unit, Solutia, Inc., have agreed to pay $600 million in cash to settle claims brought by thousands of Anniston, Alabama residents over the dumping of toxic PCBs in the area until the 1970s, the companies said yesterday. The settlement concludes lengthy litigation involving two court cases and more than 20,000 residents who sued over severer ground and water contamination by tons of industrial coolant chemicals discharged from a manufacturing plant from the 1930s to 1970s. In addition to the $600 million, the companies will fun community-based programs such as a PCB research laboratory and a special prescription-drug program and cover additional cleanup costs. Those expenses could bring the settlementâe(TM)s value to about $800 million, lawyers for the plaintiffs said. âeoeItâe(TM)s a monumental settlement, without question. It has great benefits to the community. Our objective as to rid the community of the PCBs, to have a total cleanup, and that will happen now,âe said Jere Beasley, a lawyer for the plaintiffs. âeoeI think itâe(TM)s a good lesson for corporate America that when they cause problems theyâe(TM)ve got to deal with it.âe St. Louis-based Monsanto, which no focuses on agricultural biotechnology, spun off its chemical division in 1997, creating Solutia, before being purchased by Pharmacia Corp., now a subsidiary of Pfizer, Inc. Monsanto agreed to pay $390 million in cash and Solutia will pay $50 million over 10 years, with the rest covered by insurance, according to company statements. Solutia and Pharmacia will contribute to the community initiatives, which will include a grant to the University of Alabama at Birmingham to create a community health clinic and discount prescription-drug programs for low-income residents in the Anniston area. For several decades the old Monsanto dumped the now-banned PCBs, or polychlorinated biphenyls, near the working-class community of Anniston, but residents didnâe(TM)t learn about the pollution until 1996. Court documents showed that Monsanto was aware of the pollution decades earlier, having dissected hogs that were contaminated at PCB levels more than 90,000 times the maximum safe concentration as defined by some states today. Scientists have linked PCBs to developmental disabilities, immune-system problems and liver diseases. They are considered âeoeprobably carcinogensâe by the Environmental Protection Agency and have been banned in the United States since 1979. Last year, and Alabama jury found that Monsanto had engaged in âeoeoutrageousâe conduct in Anniston, finding it and its corporate successors liable for the PCB contamination. Jurors had already awarded more than $100 million in damages against eh companies in one phase of a state civil trial that began more than a year ago. The award covered only property-damage claims for some of the plaintiffs. Personal-injury and punitive damage claims had not yet been tried. The settlement concludes that trial and also avoids a federal civil trial involving thousands of plaintiffs scheduled for the fall. When it spun off Solutia, Monsanto agreed to cover Solutiaâe(TM)s liabilities in the PCB matter if Solutia was unable to pay. Last week, Solutia told the Securities and Exchange Commission that it might have to file for bankruptcy protection if it could not contain the cost of the PCB legal cases and cleanups. Monsanto said in a statement that bearing the bulk of the settlement helps in âeoemitigating the longer-term risk associates with Solutia.âe For Solutia and Monsanto, the case has been a public relations disaster that they hope will end with the settlement. âeoeWeâe(TM)re very pleased to resolve this,âe said Glenn Ruskin, a spokesman for Solutia. âeoeItâe(TM)s been a real drain on the company and our employees. I think by putting this behind us it is a new beginning. We are committed to doing a cleanup in that community.âe

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