Managing and Mitigating the U.S. PCB Litigation Risk

There are three categories of PCB-related litigation: environmental impairment cases, property damage cases, and personal injury cases. The company has strong legal defenses for all cases and will only consider settlements when it is in the best interests of the company to do so.

Monsanto has broad indemnification agreements with many former PCB customers under which these companies agreed to indemnify Monsanto for litigation-related costs as a condition of continuing to receive bulk industrial PCBs in the 1970s. Monsanto is actively seeking to enforce these contracts and recover these costs in a lawsuit it filed in Missouri. Six former Monsanto customers, accounting for approximately 93% of PCB sales, entered into these indemnity agreements. In July 2024, Monsanto announced that it has retained leading plaintiff lawyer Mark Lanier to represent the company in its PCB indemnity litigation.

This suit is at an early phase, but the company believes it has strong arguments to recover substantial litigation-related costs from this action.

In June 2020, Bayer announced a $650 million settlement agreement involving a class of approximately 2,500 municipal entities that allege PCB impairments of their stormwater treatment systems, resulting in impairment to local water bodies. The necessary court approval was granted on November 19^th, 2022. This settlement resolves most of the company’s exposure to municipal government PCB water litigation.

The majority of the local governments that opted out of this nationwide class action settlement are included in 7 pending municipal opt-out cases. These pending cases are largely grouped around a limited number of waterways and each has unique factual and legal circumstances. Monsanto remains committed to defending cases at trial and will only consider settlements when it is in the company’s best interest to do so. In July 2024, Monsanto reached a settlement agreement with the City of Seattle, and in September 2024, reached a settlement agreement with the City of Los Angeles.

Additionally, the company faces litigation brought by some State Attorneys General for alleged public nuisance caused by PCBs in the environment. Monsanto has entered into separate agreements with the Attorneys General of New Hampshire, New Mexico, Ohio, Oregon, Pennsylvania, Virginia, Washington, and Washington D.C. to resolve similar PCB cases brought by these governments. There are currently pending cases filed by the Attorneys General of Delaware, Illinois, Maine, Maryland, New Jersey, and Vermont. The suit brought by the state of Vermont also claims property damage to school buildings.

Based on data reported to EPA about impairments of waterways by PCBs and the fact that PCBs in the environment are generally declining almost 50 years after production ceased, the company believes that the scope of potential future environmental litigation is limited. While additional lawsuits are possible, this is far from a nationwide risk.

It is also notable that there is an effective regulatory mechanism outside of the court system that is managing remediation of many different environmental concerns. Where it has been determined that those cleanups are necessary, federal, and state authorities employ an effective system to identify dischargers and allocate clean-up responsibilities. Monsanto and Bayer participate in such clean-ups where it is found to be a responsible party, bearing its share of the cost to clean up the environment.

One use of PCBs through the early 1970s, when Monsanto stopped the sale of PCBs for use in building products . Monsanto is facing some litigation alleging that the mere presence of PCBs in these materials that were manufactured by third party companies is enough to constitute property damage or that state or local requirements mandating testing and/or remediation create damage for which Monsanto should be held responsible.

Many of these cases are pending in Vermont, where the State has set local requirements for PCB testing and remediation that are significantly more restrictive than EPA’s guidance in this area and are placing a burden on already taxed school districts. The Burlington School District (BSD) filed a lawsuit alleging that Monsanto should pay for a new high school after the old one was shut down for a number of reasons, including PCB concerns. The other school districts in Vermont, 90+ districts, jointly filed a lawsuit alleging PCB impairments to certain schools. In connection with her environmental impairment suit, the Attorney General of the State of Vermont makes also claims for recovery of damages to the same (and other) school districts. 

The company faces a number of personal injury cases in which plaintiffs claim that exposure to PCBs caused their health problems. Most of the current cases arise from claimed exposure to PCBs in the building products (capacitors in fluorescent light ballasts that date back before 1980) in one school, the Sky Valley Education Center (SVEC), in the Seattle area, where more than 200 plaintiffs have brought suits. There are also several personal injury lawsuits pending in Vermont related to caulk, paint and other building products used in Burlington High School and Twin Valley Elementary School, although several plaintiffs in these cases have either dropped their suits or have had their claims dismissed by courts. There is also a proposed class action in Vermont seeking medical monitoring for plaintiffs who claim to be exposed to such building products but who have no current claimed injury. 

In Massachusetts complaints were filed in August 2023 claiming personal injury due to PCB exposure from PCBs used and disposed of from an electrical equipment plan operated by General Electric. In Nevada, there is also a current suit alleging exposure to PCBs related to waste from a train depo not owned or operated by Monsanto.

The company has strong defenses in these cases including that the relevant products at issue, like fluorescent lighting fixtures and caulk, were manufactured, installed and maintained by other companies, not Monsanto, and were decades beyond their useful lives. The evidence also is not sufficient in these cases to support a causation and liability finding against the company. Exposure to PCBs in the air is typically in trace concentrations, not significant enough to cause increased risk to health. In addition, buildings with claimed PCB issues also are often dealing with other indoor air quality issues and air circulation issues. The U.S. Environmental Protection Agency and state agencies have provided more than 30 notices that date back decades advising owners and managers of pre-1980 buildings, including school districts and their maintenance personnel, about best management practices to address PCB-containing products that are beyond their useful lives.

Trial courts in Washington State have ruled against the company on these and other significant legal defenses in several trials to date. However, in the first of these cases to receive appellate review, Erickson, the Court of Appeals Division I in the State of Washington ruled in Monsanto’s favor, reversed the initial verdict in its entirety and remanded the case back to trial court for further proceedings. In October 2024 the Washington Supreme Court accepted the review of the Erickson case. Briefing is currently ongoing, and the Court will hear oral arguments in February of 2025. Notably, the Supreme Court will consider all three issues in the Erickson Court of Appeals decision, as well as the issue that is the subject of Monsanto’s cross appeal – whether any punitive damages can be awarded in these cases given that Washington’s Product Liability Act, which is the law of the case, prohibits them. More than 80% of the damages awarded in the cases that have gone to verdict are punitive damages.