PCB News

SOLUTIA SAYS IT DOESN'T OWE MORE IN ALABAMA PCB CASE
CHEMICAL COMPANY ALREADY PAID $40 MILLION TO PLAINTIFFS

December 5, 2003
Rachel Melcer Of The St. Louis Post-Dispatch

Solutia Inc. said it doesn't owe more money to Anniston, Ala., residents, who settled with the company over the contamination of their community with polychlorinated biphenyls, or PCBs.

The 1,596 plaintiffs in Owens v. Monsanto, who received $40 million in a 2001 settlement, aren't entitled to an additional payment, Solutia said in a response filed Wednesday in U.S. District Court in Birmingham, Ala.

The plaintiffs are trying to invoke a clause in the settlement that said if any similar case should be settled for more than $20,677 per person, then the people represented by Owens are entitled to receive the difference. Their attorneys, led by Ralph Knowles Jr. of Atlanta, said the clause was triggered by the August global settlement of two cases invo lving more than 20,000 other Anniston residents, in which the total payout was $600 million in cash and health-care services.

In all of these cases, the plaintiffs claim their homes and health were damaged by PCBs produced by the old Monsanto Co. in Anniston before the 1970s. The chemical, once a popular lubricant for electrical devices, leaked into waterways and nearby properties.

Solutia, based in Town and Country, had been the chemical division of the old Monsanto Co. until 1997, when it spun out as an independent firm. In 2000, Monsanto merged into Pharmacia Corp., now a division of Pfizer Inc. A year later, a new Monsanto, based in Creve Coeur, spun out of Pharmacia as a biotech seeds and agrochemical company.

When Solutia spun out, it took on all PCB-related liabilities. It defended against and settled the Owens case.

Solutia argues that Owens plaintiffs shouldn't expect any additional payments, because those in Abernathy v. Monsanto and Tolbert v. Monsanto - who were covered by the global settlement - will receive $16,667 apiece, based on a formula set in the Owens case.

To compare settlements, the court must consider just $350 million of the global settlement and divide by 21,000 Tolbert and Abernathy plaintiffs, Solutia said. It cannot consider $250 million that will be used for property relocation and reimbursement, a health clinic and educational grants and programs.

What's more, Solutia said, the court cannot undo the intent of the judges in the global settlement. They said it should be a final settlement of all cases associated with the manufacture of PCBs in Anniston.

Solutia, which is suffering from poor performance and annual payments of about $100 million to service legacy liability issues since its spinoff, is running out of cash. It has said it is considering all options, including a bankruptcy reorganization, to resolve its financial issues.

Copyright 2003 St. Louis Post-Dispatch, Inc.
St. Louis Post-Dispatch (Missouri)