Monsanto and Solutia Sign $700 million Settlement

In 2003, Monsanto Co. and Solutia, Inc. agreed to pay $700 million to settle two lawsuits that accused them of polluting Anniston, Alabama, over decades with polychlorinated biphenyls (PCB).

The global settlement established a $600 million fund to reimburse around 21,000 plaintiffs for damages caused by PCB contamination. Monsanto paid $390 million, Solutia paid $50 million, and the remaining $160 million was paid by the companies’ commercial insurance. Additionally, Monsanto and Solutia are required to perform court-supervised remediation of the PCB-contaminated areas of the community, according to Beasley Allen lawyer and founder Jere Beasley. He estimated the cost of such remediation was at least $51.3 million.

Moreover, Solutia and Pharmacia, a subsidiary of Pfizer, Inc., was required to participate in a series of community health initiatives, including setting up a medical clinic for low-income residents, health screenings, and a drug prescription benefit. According to a Solutia statement, these programs were valued at more than $75 million over 20 years. By the time the companies meet the different requirements, the settlement will total more than $700 million, Beasley said.

Solutia and its subsidiary, Pharmacia (owned by Pfizer, Inc.), were required to participate in several community health programs as part of a settlement. These initiatives included creating a healthcare center for individuals with low income, providing health screenings and offering a prescription drug benefit. Solutia estimated the value of these programs to be over $75 million over the course of two decades. Beasley said the total settlement would exceed $700 million once all requirements are met.

“I looked out and saw those folks, and they came up with tears in their eyes,” Beasley said. “I’ve seen good results, bad results, corporations that don’t care, and I felt good about this one.”

In signing the agreement, the involved companies admitted no fault. This settlement concludes two significant cases of personal harm, one in federal court and another in state court, filed against the companies for polluting the ground and water of Anniston with PCBs.

Monsanto owned and operated a PCB manufacturing plant in Anniston from 1935 to 1971. PCBs were widely produced and utilized as coolants, lubricants, and electrical insulators until the 1970s.

In 1977, the federal government prohibited the production of PCBs due to growing health concerns. The Environmental Protection Agency classified this substance as a likely carcinogen for humans. Internal documents, some several decades old, revealed that Monsanto executives were aware of the health risks associated with PCBs and the widespread contamination in the community. However, they chose not to disclose this information, according to Beasley.

“Monsanto knew as far back as 1937 that PCBs caused problems,” Beasley said.

The Anniston plant, producing PCBs, was owned by Monsanto. However, several companies participated in the settlement due to corporate mergers and spin-offs. Monsanto spun off its chemical business, which then became Solutia. Later, Monsanto, a subsidiary of Pharmacia, was also spun off as a separate company in 2000. Pharmacia merged with Pfizer in 2003 and became a subsidiary.

The settlement was reached during an August 20, 2003 court appearance before judges in both cases. The court finalized and approved it, with funds transferred less than two weeks later.

(Tolbert v Monsanto, N.C. Ala., No. CV-01-C-1407-W, 8/20/3003: Abernathy v Monsanto, Ala., Cir. Ct., No. CV-2001-832, 8/20/2003).