Monsanto Agrees to Pay Victims of Dioxin in West Virginia…But Not Much

Monday, February 27, 2012

Giant chemical corporation Monsanto has agreed to a tentative settlement requiring it to pay nearly $100 million to settle claims that its factory in Nitro, West Virginia, contaminated the small town and its residents with the toxic chemical dioxin, a cancer-causing waste byproduct of the manufacture of the herbicide 2,4,5-T.

For about 75 years, between 1929 and 2004, the Monsanto plant churned out herbicides, rubber products and other chemicals, although it made 2,4,5-T only from 1949 to 1971. Monsanto sold 2,4,5-T (later found to be contaminated with dioxin) to the Army for use in making Agent Orange, which it sprayed on Vietnamese jungles and farms. The dioxin is estimated to have killed and maimed an estimated 400,000 people and caused 500,000 birth defects in Vietnam, but federal courts dismissed a case brought by Vietnamese victims of Agent Orange.

Shortly after the Monsanto plant closed in 2004, a class-action lawsuit was filed on behalf of tens of thousands of people who lived, worked and went to school in Nitro after 1949. The suit alleged that Monsanto spread toxic substances, including dioxins, all over the town, exposing residents to dioxin levels 100,000 times higher than acceptable. The lawsuit demands medical monitoring for at least 5,000—and as many as 80,000—current and former Nitro residents. Under the tentative agreement announced on February 24, 2012, Monsanto will pay for a 30-year medical monitoring program with a primary fund of $21 million for testing, and up to $63 million in additional funding, if needed; $9 million to clean the homes of class members of dioxin; and court-approved legal fees incurred during seven years of litigation.

Before the agreement is finalized, however, a fairness hearing must be held to give class members a chance to object to its terms. That hearing is scheduled for June 18, when expert testimony must be presented to prove the settlement is appropriate. Already Charleston, West Virginia, lawyer Thomas Urban, who represents some Nitro residents, has filed a motion objecting to the $9 million cap on cleanup costs, (an expert for the residents estimated the cost at between $945 million and $3.8 billion), and also the fact that only 3,000 to 5,000 class members would receive any medical monitoring, when there are potentially 80,000 class members.

Despite the seemingly large dollar amount of the settlement, Monsanto, which in 2010 earned a profit of $1.1 billion on revenues of $10.5 billion, announced that the settlement would not affect ongoing earnings per share, but that the one-time expense would reduce previously reported earnings per share by .05 percent.

SOURCE: Matt Bewig - AllGov.Com