Solutia, Monsanto Settle Case: Contamination Suit Wins Alabama Residents $700 Million

posted on:
August 21, 2003

author:
Jay Reeves

category:
Environmental

BIRMINGHAM, Aug. 20 – Solutia, Inc. and Monsanto Co. have agreed to pay more than $700 million to settle claims by more than 20,000 Anniston, Alabama residents concerning PCB contamination, the companies’ and plaintiffs’ lawyers said today. 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, 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 cleanup, prescription-drug and other programs detailed in the agreement will push the total amount past $700 million, said Stacy Smith, a spokeswoman for the plaintiffs’ lawyers. Another plaintiffs’ lawyer, Jere Beasley, said the total would surpass $800 million. Jurors already 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 because of 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 chief executive 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 avoid bankruptcy because it “removes a burden from us and puts us in a better position to address upcoming liabilities we face,” Solutia spokesman Glenn Ruskin said. The plant, near a neighborhood in west Anniston, made PCBs for decades while operating as Monsanto. St. Louis-based Monsanto has also gone through a series of corporate transitions in recent years, including a time as a subsidiary of Pharmacia Corp., but is now a stand-alone firm. Solutia, also now an independent company, formerly was the chemical unit of Monsanto. Pharmacia was recently acquired by Pfizer, Inc. Robert Roden, a lawyer for homeowners, said internal documents showed the company was aware of 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,” DeMelle said. “It should mark the beginning of the end of Monsanto’s toxic legacy in Anniston.” 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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