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SOLUTIA FACES PCB CLAIMS
Decades-old pollution at Alabama site haunts Monsanto successor
In order to "set the record straight," John C. Hunter, chairman, president, and CEO of Solutia, called a conference with investors last week to respond to a recent Washington Post article that charged Solutia with hiding decades of pollution from Anniston, Ala., residents. Hunter addressed both the safety of polychlorinated biphenyls (PCBs) and Solutia's responsibility for their remediation.
Hunter called the conference as the firm went on trial in an Alabama state court. He said the Post article was intended to coincide with interest in the Alabama trial, where the company is facing 3,500 plaintiffs--about 10% of Anniston's population.
||DREAD Residents of Anniston, Ala., scared of the damage PCBs may have done to their health, marched in protest on Aug. 19, 2001, and are now in court seeking compensation.
Plaintiffs made 700 personal injury claims related to PCBs, 2,800 claims based on fear of future personal injury, and 700 property damage claims. They are likely to seek millions of dollars in awards, but so far no dollar amount has been set in the case that is now in the Circuit Court of Etowah County.
"There is no consistent, convincing evidence that PCBs are associated with serious long-term health effects," Hunter said. However, he admitted that temporary cases of acne and elevated liver enzymes are related to PCB exposure.
Hunter said Solutia will fight the claims and he expected the Etowah court to throw out the 2,800 claims. The judge did just that a few days later, based on a recent Alabama Supreme Court ruling that, he said, requires a person to show he or she is currently suffering or has suffered a personal physical injury to make a valid claim.
The Toxic Substances Control Act of 1976 mandated the phaseout of PCBs, viscous liquids widely used as a nonflammable insulation fluid in electrical transformers. In 1979, the government permanently banned manufacture and use of PCBs, which are also suspected endocrine disrupters and carcinogens.
Solutia continues to manufacture synthetic heat-transfer fluids in Anniston, though the factory where they are made stopped producing PCBs in 1971. Monsanto transferred the factory and its liabilities to Solutia when it spun the company off in 1997.
In the conference, Hunter assured investors that Solutia has adequate insurance and reserves to cover its litigation and environmental cleanup obligations. And Solutia hopes to put a tourniquet on its stock price, which plunged 28% to $9.00 the day after stories appeared about the Anniston trial. It has since risen to over $10.
Citing documents provided by plaintiff attorneys and the Washington, D.C.-based Environmental Working Group, the Post said Monsanto routinely dumped toxic waste into an Anniston creek and dumped millions of pounds of PCBs into open-pit landfills. It also charged that Monsanto, the only U.S. producer of PCBs, tried to protect its business by working in cahoots with the Alabama Water Improvement Commission, beginning in 1970, to hide details of the PCB releases.
Though Solutia cooperated with the Post, Hunter said the newspaper did not "adequately represent the history" of Monsanto's actions. Hunter claimed that Monsanto, and now Solutia, spent $40 million on remediation in Anniston and responded to PCB issues based on sound science and its understanding of appropriate cleanup measures, in cooperation with regulatory agencies.
Hunter expects final remediation costs in Anniston to be much lower than the $460 million that EPA ordered General Electric to pay to clean up PCBs in New York's Hudson River (C&EN, Aug. 6, 2001, page 8).
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