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Monsanto Fined $700 Million for Poisoning People with PCBs

ANNISTON (Alabama)

Deal reached in PCB trials

By Jessica Centers
Star Staff Writer
08-21-2003

Lawyers for more than 20,000 plaintiffs in federal and state trials over PCB pollution in Anniston reached an agreement Wednesday with the companies accused of chemical contamination.

The $700 million settlement, announced in federal district court in Birmingham, would resolve all outstanding Anniston PCB litigation.

The terms of the global settlement were agreed to by attorneys in both the federal court case, Tolbert v. Monsanto Co. et al., and the state court case, Abernathy v. Monsanto Co. et al. The judges in both cases presided over the hearing together.

The terms are subject to the parties entering into a final agreement on Aug.. 26.

Plaintiffs in both cases accuse Monsanto, and its spinoff Solutia, of polluting their bodies and properties with polychlorinated biphenyls, or PCBs.

From the 1930s to 1970s Monsanto produced PCBs at its plant in western Anniston. The chemicals, now banned, have been linked to a range of health effects, from learning disorders to cancer.

The $700 million settlement would include $600 million in cash payments. Costs for cleanup, prescription drug and other programs would put the total past $700 million.

Of the $600 million cash settlement, Monsanto would pay $390 million within seven days of the court order while Solutia would pay $50 million over 10 years in equal annual installments. The remaining $160 million would be provided through Monsanto¹s, Solutia¹s and Pharmacia Corporation¹s commercial insurance, also within seven days of the court order.

The settlement was split in half between the two cases, meaning $300 million for the federal court case, which has about 17,000 named plaintiffs, and $300 million for the state court case with 3,500 plaintiffs.

The lawyers¹ fees for each case were set at $120 million.

In addition to cash compensation, Pfizer Corporation would create an environmental-medical clinic and research facility in Anniston that would provide some free prescription medicines, health screenings, and a Pfizer Share prescription drug program. According to Solutia, the programs are valued at $75 million over the next 20 years.

Funding for an education trust fund, community revitalization and business development and cleanup and remediation also are included in the settlement..

When Solutia was spun off from Monsanto in 1997, it took on the Anniston plant¹s environmental liabilities.

St. Louis-based Monsanto has gone through a series of corporate transitions in recent years, including a time as a subsidiary of Pharmacia Corp., but it is now a stand-alone firm. Pharmacia recently was acquired by Pfizer Inc.

Last week, verdicts in the state court case topped $100 million, and St. Louis based-Solutia said in a quarterly financial report that it was considering filing for bankruptcy, partly because of the costs of environmental lawsuits.

³We 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,² Solutia CEO John C. Hunter said in a prepared statement Wednesday.. ³This settlement puts the company in a better position in the coming months to refinance its bank facility and to address upcoming bond maturities, pension funding obligations and other legacy liabilities.²

The settlement was reached after mediation was conducted by U.S. District Court Judge U.W. Clemon and Calhoun County Circuit Judge Joel Laird.

At the hearing, the attorneys for both sides and representatives of the company rose to give the judges a standing ovation.

³The court is indeed grateful to all of you in reaching a settlement that will remedy problems that have so long plagued Anniston,² Clemon said to close the hearing

After the conditions were read, a partner from each law firm representing plaintiffs in the federal case told the court they accepted the terms on their clients¹ behalf.

For the state case, lead plaintiffs¹ attorney Donald Stewart was not ready to accept on his clients¹ behalf, but said he would recommend to them that they accept the terms and he expects that they will.

³I feel like it¹s a wonderful settlement for our plaintiffs,² Stewart said.

David Shelby, an attorney for plaintiffs in the federal case, said he was especially pleased with the oversight included in the terms.

³We look forward to this as a positive turning point in the history of Anniston,² he said.

After almost a century of contamination, Shelby said, the community would now be equipped to clean up polluted land, have access to specialized medical treatment that addresses exposure to toxins, and rebuild healthy businesses, educational systems and residencies.

Bob Roden, also a plaintiffs¹ attorney in the federal case, said individual awards would be based on factors such as level of PCBs found in the blood, property damage, personal injury and nuisance.

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