Birmingham News
August 21, 2003

State's PCB case settled

08/21/03
VAL WALTON
News staff writer

Solutia and Monsanto Co. agreed Wednesday to a $600 million cash settlement, health initiatives and community outreach programs to resolve claims in federal and state courts over PCB contamination in Anniston.

The tentative settlement, announced in Birmingham's federal court, is on behalf of 21,000 plaintiffs who began suing in 1996, blaming Monsanto - Solutia's corporate predecessor - for polluting their property and endangering their health with polychlorinated biphenyls, formerly used as an insulating fluid in transformers.

The agreement would end a long-running trial involving 3,500 plaintiffs in state court before Calhoun County Circuit Judge Joel Laird in which a jury has awarded more than $100 million in damages. The settlement also averts a separate federal trial that was to begin in October before U.S. District Judge U.W. Clemon, chief judge in Alabama's Northern District.

"It's a very fair and reasonable settlement, which will remedy the problems that have plagued the Anniston community," said Robert Roden, a plaintiffs lawyer.

Lawyers on both sides called the settlement "historic," noting it was secured by cooperation between state and federal courts. The agreement is subject to final approval by the court, which is expected by Tuesday.

The settlement, which includes no findings of wrongdoing, will be funded by Solutia, Monsanto and Pharmacia, a subsidiary of Pfizer, and the companies' commercial insurers, according to a statement by the St. Louis-based Solutia. In a quarterly financial report, Solutia said it was considering filing for bankruptcy partly because of the costs of litigation from the suits.

The cash settlement totals $600 million, with Solutia's portion to be $50 million paid in equal installments over 10 years. About $160 million of the settlement will be provided through the insurance, with the remaining $390 million to be provided by Monsanto. A court-appointed overseer will be appointed to structure payments to plaintiffs.

The settlement calls for Pfizer to provide community health initiatives valued at more than $75 million over the next 20 years for low-income residents of Calhoun County, including an environmental-medical clinic in Anniston through a partnership with the University of Alabama at Birmingham. The settlement also provides for an educational trust, health screenings and a prescription drug program from Pfizer.

`Toxic legacy':

Claims abound that PCBs brought about life-threatening illnesses and damaged property, contentions the companies deny. Monsanto manufactured PCBs in Anniston for nearly four decades. The company stopped production in 1971 as national health concerns mounted. Solutia was formed when Monsanto spun off its chemical business in 1997. Monsanto is now known as Pharmacia, which was acquired by Pfizer Inc.

J. Mark White, a defense attorney, outlined the settlement details before Laird and Clemon, who presided over the session. The lawyers gave the judges a standing ovation. The settlement results from mediation conducted by the judges.

"It was an unprecedented proceeding and settlement," White said. "These two judges went above and beyond the call of duty to get one of the most complex legal problems in the history of this company resolved."

Plaintiffs lawyers credited Anniston lawyer Donald Stewart, who tried the case in state court, as another factor in securing the settlement. So far, a jury has awarded $104 million in the case. Stewart, who with lawyer Daniel Benson represented the bulk of the state court plaintiffs, said he will talk to clients and recommend that they accept the settlement terms.

"It's been a long haul," Stewart said outside court.

David Shelby, of Shelby, Roden & Cartee, said the settlement came after "heated and tough negotiations" in which Boston University Law School professor Eric Green, appointed as a mediator, kept everyone at the table. The case involved high-profile lawyers such as O.J. Simpson attorney Johnnie Cochran and Alabama's Jere Beasley.

Clemon already has approved a settlement agreement reached between the companies and the federal government for a comprehensive study and removal of PCBs from Anniston and other affected areas.

"This should mark the beginning of the end of Monsanto's toxic legacy in Anniston," said Brendan DeMelle, an analyst with the Washington-based, Environmental Working Group.