Statement on Settlement Agreements with West Virginia and Illinois
Monsanto released the following statement on its settlement agreements with West Virginia and Illinois to resolve litigation over environmental impairment claims allegedly due to PCBs. These mark the ninth and tenth settlement agreements the company has made with states over alleged PCB claims; there are five state cases remaining. The Illinois settlement also resolves the pending opt-out cases filed by the City of Chicago and Evanston along with eight other municipalities.
Monsanto has reached settlement agreements with West Virginia and Illinois to resolve all claims relating to polychlorinated biphenyls (PCBs), a legacy product the company voluntarily ceased producing in 1977 at values that are in the company’s best interest. The settlements contain no admission of liability or wrongdoing by the company. Under the terms of the agreements, Monsanto will make upfront payments of $12.5 million to West Virginia and $80 million to Illinois ($40 million of which will be paid in 2026). The settlements include additional contingency payments within five years that are tied to the outcome of Monsanto’s pending action in Missouri to enforce its indemnity rights against its largest former customers.
Both states agreed to cooperate with Monsanto in this action, having determined there is a substantial basis for the company’s pending indemnity case and a significant portion of the liability should be borne by Monsanto’s former customers. Under the terms of the agreement, West Virginia could be paid up to an additional $48 million while Illinois could be paid up to an additional $200 million. The settlements include smaller backstop payments if the indemnity litigation results in substantially less than the target recoveries set forth in the agreements.
During the time of manufacture, Monsanto conducted hundreds of studies on PCB safety, provided appropriate warnings to its sophisticated industrial customers based on state-of-the science at the time and cooperated with the U.S. government’s 1972 interdepartmental study. To recover a substantial portion of its PCB-related litigation costs, Monsanto filed a complaint in Missouri to enforce its rights under 1972 indemnity contracts with its six largest former PCB customers. Under these contracts, these sophisticated companies agreed to indemnify Monsanto for PCB-related litigation costs. The litigation against the former PCB customers remains pending.