PCB News

$700 Million Settlement in Alabama PCB Lawsuit

DATELINE: Birmingham, Ala.

Solutia Inc. and the Monsanto Company have agreed to pay $700 million to settle claims by more than 20,000 Anniston residents over PCB contamination, plaintiff's 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, includes payments to homeowners and cash to finance a PCB research laboratory, lawyers for the residents said in a statement.

The two companies said the settlement called 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 to more than $700 million, said Stacy Smith, a spokeswoman for the plaintiffs' lawyers. Another plaintiff's lawyer, Jere Beasley, said the total would surpass $800 million.

Jurors already had awarded more than $100 million in verdicts against the companies in the trial, which began more than a year 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 1970's amid health concerns.

Solutia, in a quarterly financial report last week, said it was considering filing for bankruptcy protection partly because of the economic costs of environmental lawsuits.

Solutia, based in St. Louis, 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," a Solutia spokesman, Glenn Ruskin, said.

The Anniston plant made PCB's near a neighborhood in west Anniston for decades while operating as Monsanto. Solutia later was spun off from Monsanto, which is also based in St. Louis.

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.

Copyright 2003 The New York Times Company