Pharmatia, Solutia Found Liable in Envirnmental Case

posted on:
February 22, 2002

author:
Jef Feeley

category:
Environmental

Pharmacia Corp. and its former chemical unit Solutia Inc. are liable for dumping toxic

chemicals known as PCBs on lands and waters near a northern Alabama town, jurors concluded.

The state court jury in Gadsden, Alabama, will start hearing evidence on damages in the case on Monday, plaintiffs’ lawyers said. The lawyers added that Phannacia and Solutia are facing hundreds of millions of dollars in damage claims from residents of nearby Anniston, Alabama. Solutia’s shares fell 34 percent after the verdict was announced.

"If Pharmacia and Solutia don’t seriously look into resolving all these claims, they are going to be dealing with these kinds of verdicts for a long time," said David Byrne, a

lawyer representing a group of Anniston residents suing in federal court over the dumping. That trial is set for March 2003.

Shares of S1. Louis-based Solutia fell $2.95, or 34 percent,to $5.80, while Peapack, New Jersey-based Pharmacia’s shares rose 50 cents to $40.40.

Pharmacia and Solutia officials said Solutia is prepared to handle any liability imposed on the companies in the environmental case.

"We understand that Anniston residents have concerns about PCBs in their community," Solutia officials said in a statement. "As we’ve said from the beginning, regardless of the result in this case, we’re committed to doing what’s fair to deal properly with the impacts of previous PCB production at our plant."

Dumping Allegations

The lawsuit centers on claims that Monsanto Co. workers dumped toxic waste into a creek and landfill near Anniston. The pesticide plant is now operated by Solutia, which was created when Monsanto spun off its chemicals division in 1997. Pharmacia and

Monsanto completed a $27 billion merger in 1999.

PCBs, or polychlorinated biphenyls, were used in industrial products, including flame retardants in electrical equipment. The chemicals were banned by the government in 1979 as a potential carcinogen.

Monsanto officials say they stopped using PCBs in pesticides made at the Anniston plant in 1972.

More than 3,500 Anniston residents contend in the lawsuit now on trial that PCBs seeped into the local groundwater and contaminated surrounding properties, including vegetable gardens.

Wave of Lawsuits

Over the last 10 years, Pharmacia and Solutia have faced a wave of lawsuits in Alabama over the PCB contamination. In 1999, Solutia agreed to pay $43.7 million to settle claims that it dumped PCB-laden chemicals in lake and stream near Anniston.

The next year, Solutia officials agreed to pay another $40 million to settle a suit by 1,600 Anniston residents over the dumping.

In the first phase of the current trial, jurors had to decide whether Pharmacia and Solutia were responsible for the contamination, said Mark Kasowitz, a lawyer for the residents.

Jurors now must weigh whether the dumping caused individual property owners and residents’ problems and assess damages, he added.

About 1,000 residents contend they suffer from a variety of illnesses, including liver disease and cancer, because of PCB exposure, Kasowitz said.

Property owners are seeking to have Solutia pay for cleaning up the contamination and compensate them for the loss in value of their homes, he added.

The damage phase of the trial may take another two months to complete, lawyers in the case say.

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