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January 11, 2018

Legal Update
Dylan Sanders

First Circuit upholds dismissal of Westport case against Monsanto, agreeing there is insufficient evidence chemical company should have known PCBs in construction caulk might require remediation

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The First Circuit federal appellate court has affirmed a lower court’s dismissal of a lawsuit by the Town of Westport against the chemical giant Monsanto and related entities, ruling that the company could not have foreseen, in 1969, that PCBs it sold to manufacturers of caulk could volatilize at levels harmful to humans, in uses such as the construction of a town school in Westport.

The decision, in Town of Westport v. Monsanto Company, also is likely to lead to dismissal of a parallel lawsuit against Monsanto by the Town of Princeton, also pending in federal court. A third federal suit against Monsanto, brought by the Town of Lexington, was dismissed in 2015. All three towns were seeking to recover the costs of remediating the PCB-containing caulks in their school buildings.

The fate of the three school cases illustrates the multitude of challenges in seeking to hold Monsanto itself liable for PCB contamination that was caused, in the first instance, by others. Monsanto has long argued, with significant success, that PCBs were a lawfully sold product prior to 1978, that it cannot be responsible for particular ways that other parties—in this case, caulk manufacturers—may have used and handled the PCBs Monsanto sold them, or for the release of PCBs by others into the environment.

These significant challenges have not discouraged plaintiffs from trying new theories against Monsanto. Several west coast cities (including San Jose, Oakland, Berkeley, San Diego, Portland, Spokane, and Seattle) are now pursuing claims against the company based on “public nuisance” and other theories in an effort to redress PCB contamination of harbors, waterways, and bays.

PCBs, and PCBs in Schools

PCBs—short for polychlorinated biphenyls—are a class of synthetic chemical compounds that were manufactured in the United States exclusively by Monsanto from 1935 until 1978. PCBs are resistant to fire, provide electrical insulation, are highly stable, and do not readily break down, degrade or oxidize. As result of these qualities, PCBs were widely used in a variety of industrial applications, including electrical insulating fluids, hydraulic fluids, and carbonless paper.

In the late 1960’s, evidence began to accumulate that the very traits which made PCBs attractive to industry also rendered them highly persistent in the environment. Indeed, 35 years after they were banned, PCBs remain ubiquitous in soil, groundwater, and surface water, and in fish and other wildlife. The relative toxicity of particular PCBs—Monsanto manufactured many different formulations of PCBs under the brand name “Aroclor”—is a subject of debate, but some are suspected carcinogens, neurotoxins and endocrine disruptors. PCBs were largely banned in 1979, after the adoption of the federal Toxic Substances Control Act (TSCA).

One 2015 Harvard School of Public Health study estimated that between 12,000 and 26,000 school buildings across the country were constructed using PCB-containing caulk. Under TSCA, PCBs in caulk at concentrations above 50 parts per million (ppm) require affirmative remediation.

The Westport Middle School

The Westport Middle School was constructed in 1969, shortly before Monsanto stopped selling PCBs for any use other than in so-called “closed systems” (e.g., transformers and capacitors). In 2010, as part of a state “green building” program, Westport school officials tested for PCBs, and found them in the school’s window glazing and window and door caulking. These were not Monsanto products; rather, Monsanto sold PCBs that caulk manufacturers had used as a “plasticizer,” an additive to make the caulk flexible. The caulk manufacturers themselves had determined how the PCBs would be incorporated into their product formulations, and during construction of the school contractors had determined how to apply the caulk to the school’s windows and doors.

After a multi-million dollar remediation response, Westport sued Monsanto and two affiliated entities (Pharmacia Corp. and Solutia Inc.), seeking to recover the town’s remediation costs. A federal judge ruled against the town on all theories of liability. The primary issue on appeal was the town’s claim that Monsanto breached an “implied warranty of merchantability”—a warranty recognized under Massachusetts law that a product will reasonably conform to a buyer’s expectations.

To prove a breach of the implied warranty of merchantability, Westport was required to demonstrate that Monsanto’s product was “defective and unreasonably dangerous” for the ordinary purposes for which it was intended, either in terms of the product’s design or the manufacturer’s failure to provide warnings about the product’s “foreseeable risks of harm.”

Before the First Circuit, Westport argued that the relevant inquiry about “foreseeable risks of harm” in its case was whether, as of 1969, it was foreseeable that PCBs would volatilize—that is, become airborne—out of the caulk in which it was being used as an ingredient. Westport pointed to evidence in the record that Monsanto in fact knew, as of 1969, that this could occur.

But the First Circuit, suggesting that Westport’s formulation “misses the point,” held that the proper inquiry was, instead, whether Monsanto knew or should have known of a risk that PCBs would volatilize out of caulk at “a level harmful to human health”—and thus a level likely to require a user to incur the cost of remediation. Westport could point to no scientific studies suggesting that Monsanto knew or should have known in 1969 of a risk to human health from PCBs volatilizing from caulk. The town did cite evidence of knowledge in 1969 of a risk that PCBs could volatilize at harmful levels from paints and resins, but the First Circuit agreed with Monsanto that it would have been too conjectural at the time for a manufacturer in its position simply to assume that the same risk applied to caulk products; thus, this evidence could not provide a basis for Westport to meet its burden of proof as to foreseeable risks of harm. In the absence of such evidence, the First Circuit held, the case was properly dismissed.

The fate of the three Massachusetts PCB “school caulk cases” likely ends this particular effort to hold Monsanto liable for PCB-based caulk in Massachusetts. The three caulk cases each made it through discovery against Monsanto and its affiliates, meaning that the plaintiffs had the benefit of obtaining internal corporate documents and taking depositions of company witnesses. Yet they were still unable to support the claims they asserted against the company, or to develop a viable alternative theory.

However, as we have said, given the ubiquity of PCB contamination in the environment, and the enormous scope of the remediation costs at issue, the fate of these cases is unlikely to mean the end of attempts to hold Monsanto and its related entities liable for PCBs either in Massachusetts or elsewhere.