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THE OTHER SIDE: Monsanto v. General Electric — Round One

It is remarkable what emerges when billions of dollars are at stake, and once colluding polluters decide they need to fight one another.

This is a story I never imagined telling. Unbeknownst to most Americans, there is a war being waged in the courts between the PCB behemoths: Monsanto and General Electric. You can add some other companies who used Monsanto’s polychlorinated biphenyls (PCBs) and their insurance companies caught in the crossfire. But the heavy-weight battle I am focused on involves the sole American producer of PCBs, Monsanto, and GE, the company based in our own Berkshire County neighborhood that used massive amounts of Monsanto’s PCBs in the electrical equipment, the transformers and capacitors, it sold to power the grid.

I have learned over the years that it is often a thankless task when an environmental activist warns the state and federal regulators about the presence of PCBs and the need for a complete cleanup—or tries to get the press to tell the story. But what happens when one professional-grade polluter blows the whistle on another and, in the process, reveals some of their previously hidden secrets? Well, you tell me. Here is round one of Monsanto v. GE.

It took the world more than 30 years to fully appreciate what Monsanto and GE knew almost from the beginning: There was a dark side to the magical utility of man-made PCBs. This 1979 press release from the Environmental Protection Agency (EPA) captures the best and worst of what these companies wrought:

EPA press release from April 19, 1979. Highlighting added.

We in Berkshire County have an extraordinary interest in doing everything in our power to hold GE, Monsanto, and the EPA fully accountable. It is also in our best interest to make sure that we promptly and as completely as possible remove the ongoing threats to the environment and public health that this “toxic and very persistent man-made chemical” presents.

Not too long ago I highlighted a Monsanto document entitled “Special Undertaking By Purchasers of Polychlorinated Biphenyls.” Monsanto insisted that it was signed by those who needed Monsanto PCBs to continue doing business. And so Magnetek’s predecessor, Universal Manufacturing Corporation, signed a Special Undertaking Agreement (SUA) with Monsanto in 1972 to continue manufacturing its fluorescent lighting fixtures and ballasts. Little did I know when I offered this document that it would be at the very heart of this incredibly significant court battle:

Monsanto’s Jan. 21, 1972 Special Undertaking Agreement. Highlighting added.

And here, courtesy of Monsanto’s First Amended Petition against Magnetek Inc., General Electric Co., and others, is the January 21, 1971 letter from GE acknowledging its execution of its agreement with Monsanto:

Exhibit 2, Monsanto’s first amended petition against Magnetek Inc. and General Electric Co. Highlighting added.

I haven’t yet found a free copy of Monsanto’s amended complaint on the Internet, and so I had to subscribe to Pacer to download it. But, luckily, anyone who wants to study these issues can find numerous internal Monsanto and GE documents, as well as medical studies from the 1930s on up at Toxic Docs. Many memos show that corporations like Monsanto and GE increasingly learned over the years how dangerous PCBs were. Considering how all parties had learned over the years how extraordinarily toxic their PCBs were, it was quite the ask to “Hold Monsanto Harmless.” So here is just one: Monsanto’s own “Salesman’s Manual” for its Aroclors from 1944:

Monsanto’s 1944 “Salesman’s Manual” on Aroclors. Highlighting added.

But let’s jump ahead in time to the late 1960s as independent science overtook corporate deception. Several damning articles in scientific journals in Europe and here at home definitively pinpointed PCBs as the cause of drastic damage to wildlife. Suddenly, the world was waking up to the reality that PCBs were ubiquitous and could be found everywhere in the environment: in many of our rivers; in fish and birds; and, as one Swedish scientist discovered, in mothers’ breast milk and human hair.

For the first time, with widespread publicity, Monsanto’s extraordinarily profitable market for their PCBs was in grave danger. And you can add the embarrassing reality that Monsanto had recently learned that PCB leaks from one of its own plants had traveled via sediment along the Escambia River Basin and were killing young shrimp. All this, not surprisingly, brought the question of legal liability to the forefront.

In July 1969, a shocking report in a Japanese newspaper acknowledged a mass poisoning incident in Yusho the year before. Rice bran oil had been contaminated by a leak of heat-transfer fluid and was consumed at PCB levels estimated at 2,000 parts per million (ppm). About 1,800 people were made sick, and a 14-year-old boy died.

On October 15, 1969, the ad hoc committee convened to discuss Monsanto’s PCB pollution problem and crafted their PCB Environmental Pollution Abatement Plan. Monsanto officials acknowledged several realities: their acute awareness of the likelihood of legal liability and lawsuits; that the company hadn’t, in fact, officially notified their customers of the dangers of their PCBs, nor had their labels made that clear; and that the presence and persistence of their PCBs in the environment “is beyond questioning.”

An October 11, 1969 rough draft of Monsanto’s PCB Environmental Pollution Abatement Plan.

The now-widespread public spotlight on the threat of PCBs meant there was a clear need to reassure its customers and maintain sales and profits until they could figure out a long-term strategy. Monsanto met with GE on January 21 and 22, 1970 in St. Louis to discuss their mutual PCB problem.

Both companies were increasingly focused on future liability issues, and the jockeying had already begun to see who might avoid the most legal responsibility. Both knew that their PCBs had migrated from their facilities into the environment, and yet both had a great financial incentive to continue what they were doing manufacturing and using PCBs as long as they could get away with it. And so, both corporations engaged in a challenging balancing act: While they internally acknowledged the extent of the damage they had done, both were fully committed to publicly denying that reality. Here are notes from that January 1970 meeting:

Notes from the June 21-22, 1979 meeting between Monsanto and GE to discuss the problem of PCBs. Highlighting added.

While GE was clearly dependent on Monsanto to continue to supply the Aroclor it needed for its Pyranol formula for electrical transformers, it nevertheless had no desire to assume complete responsibility and/or relieve Monsanto of its potential responsibility and liability for PCB contamination of the environment and any impacts on human health. Initially resisting signing Monsanto’s SUA, GE’s need for Monsanto’s Aroclors for its transformers eventually overcame caution and GE gave in.

Meanwhile, Monsanto was working out how best to balance informing its customers to take better care of its PCBs without causing the loss of their business or properly acknowledging responsibility for any damages caused by the chemical. Monsanto began to very carefully contact its customers. Here is an excerpt from their February 18, 1970 letter:

Monsanto’s Feb. 18, 1970 letter to its customers. Highlighting added.

In August 1970, Monsanto discontinued sales of PCBs for a variety of plasticizers, including swimming pool paints, hot melt adhesives, solvents, wax modifications, protective coatings, and numerous other products. On January 14, 1972, the company wrote to its managers to guide their communications with those customers who used PCBs for heat-transfer applications:

It will come as no surprise to any of you that the Monsanto Board has approved MICC’s discontinuance of sales of polychlorinated biphenyls and terphenyls for certain end uses in the domestic market …

Use the wording of the attached form letter. It was carefully composed and cleared by the Law Department …

… [C]ertainly avoid committing us to any action or expense without first clearing with the product group.

While the letter of notification must be standard, each customer’s conversion and disposal problem must be handled on a case-by-case basis. He is naturally going to feel that he is being put to a lot of expense and trouble by our decision. In your personal contacts, you must convince him that we sold him material in good faith, and that only the most compelling reasons have forced us to this decision. But ultimately conversion and disposal are his problems. You should be helpful but avoid accepting any direct responsibility for successful conversion and safe disposal. The stakes are simply too high for us to accept any such risks. (Emphasis added.)

On December 6, 1971 William A. Blasé shared a confidential memo entitled “PCB Legal Review”:

Monsanto’s 1971 “PCB Legal Review.” Highlighting added.

As Blasé noted, they were already being hit with legal claims:

Monsanto’s 1971 “PCB Legal Review.” Highlighting added.

William A. Blasé addressed possible charges:

Monsanto’s 1971 “PCB Legal Review.” Highlighting added.
Monsanto’s 1971 “PCB Legal Review.” Highlighting added.

Now, of course, when it came time for lawsuits, some parties had trouble with statute of limitation concerns, but it is remarkable to see how when it came to its internal communications, Monsanto so readily expressed its vulnerability.

As the world gathered more information about the widespread effects of PCBs, Monsanto was learning exactly how high those legal stakes could be for the company. Still, they were hoping they could somehow prove to the public, the regulators, and their customers that the recent scientific studies and press accounts had exaggerated the PCB problem. Monsanto hired the experts at Biological Consultants to study PCB levels in fish above and below its Anniston, Ala. plant. Here are excerpts from their 1972 report:

The 1972 report from Biological Consultants to Monsanto Plant Chief Chemist J. T. Bell, Plant Chief Chemist. Highlighting added.

Closer to us, the fish weren’t doing any better. On September 16, 1975, The New York Times reported that the New York State Environmental Conservation Department stated that several species of fish in the Hudson River and Lake Ontario had been contaminated by PCBs and possibly were unfit for human consumption.

The EPA was finally catching up. In November 1975, the EPA held a three-day conference with state and local officials and environmental organizations. As Rosner and Markowitz tell us:

“Monsanto, PCBs, and the creation of a ‘world‑wide ecological problem’,” by Gerald Markowitz and David Rosner, in the Journal of Public Health Policy, November 2018. Highlighting added.

As states and American cities began to realize the extent of the contamination they were facing, living with the impacts on their local environment and public health, and the costs incurred trying to clean up, they began to take legal action against Monsanto. While production of PCBs in its Anniston, Ala., plant was halted in 1971, it is estimated that Monsanto buried more than 5.5 million pounds of PCBs in landfills around the city. And the community had continuously suffered. You can learn more about the severe impact of PCB contamination on people of Anniston here and here. And here is the result of the Anniston lawsuit:

The Associated Press reports on Aug. 21, 2003 on a $700 million settlement reached in the Alabama PCB lawsuit against Monsanto. Highlighting added.

Here are some of the successful legal actions against Monsanto. As I wrote about recently in “Our alarming airborne PCBs,” Dr. David Carpenter, who testified in the Anniston trial, has shown that volatilization, or vaporization, is a significant source of exposure. According to the Associated Press, “Three schoolteachers in Washington state who sued the chemical company Monsanto over exposure to materials in fluorescent lights have been awarded $185m.”

In June 2020, the state of Washington, having claimed that Monsanto’s PCB contamination constituted injury to the state’s public natural resources and its waters, won a judgment of $95 million.

The state of Oregon sued Monsanto in January 2018 for damages related to PCB contamination of Oregon’s land, waters, fish, and wildlife. The state won a $698 million settlement.

Pennsylvania charged that despite knowing “’that PCBs bio-accumulate and bio-magnify in animal tissue, including in fish tissue and human tissue, and [pose] an increasingly hazardous threat to the health of the Commonwealth’s residents’ … Monsanto nevertheless continued to market and sell its products containing PCBs.” On December 30, 2021, Pennsylvania secured $100 million through a consent agreement with the Monsanto Company, Solutia INC., and Pharmacia LLC.

I want to highlight some aspects of Delaware’s suit with Monsanto. Like other parties, Delaware claimed that Monsanto knew its PCBs would eventually make their way into the environment. Delaware Superior Court sided with Monsanto, as Chief Justice Seitz explained in his subsequent Supreme Court ruling:

The trial court reasoned that, even though the State alleged that Monsanto knew for decades that PCBs were toxic and would contaminate the environment for generations, the State could not assert a public nuisance claim or trespass claim because Monsanto manufactured PCB products, which entered the environment after sale to third parties. The court also found that the State did not have standing to bring a trespass claim because it held public lands in trust rather than outright and therefore did not have the exclusive possession of land needed to assert a trespass claim …

According to the State, it is enough to allege that Monsanto substantially contributed to causing the public nuisance and trespass by selling PCBs to others knowing their end use would cause widespread and lasting environmental contamination. (Emphasis added.)

On June 22, 2023, the Supreme Court of Delaware supported the state’s claims in significant ways. I was particularly taken with the court’s recognition that even though Monsanto had sold its PCBs to others, it substantially contributed to the contamination and that their PCBs that still remain in Delaware’s water present a continuing and ongoing threat:

State of Delaware v. Monsanto Company, Solutia INC., and Pharmacia LLC.
State of Delaware v. Monsanto Company, Solutia INC., and Pharmacia LLC.

As you have seen, Monsanto has suffered some enormous financial losses and is probably anticipating some more. As a result, we have round one: Monsanto decided to go to court to recoup some of those damages and ensure their main customers would share in any future liability.

Monsanto’s first amended petition against Magnetek Inc. and General Electric Company. Highlighting added.

Monsanto alleges:

This is an action to enforce Defendants’ written agreements to defend, indemnify, and hold harmless Pharmacia, LLC f/k/a Old Monsanto Company a/k/a Monsanto Chemical Co. (‘Old Monsanto’) relating to Polychlorinated Biphenyls (‘PCBs’) that Old Monsanto manufactured and sold to Defendants or their predecessors-in-interest. Defendants have failed and refused to honor their agreements despite multiple demands from Plaintiffs. As a result, Plaintiffs have incurred defense costs, agreed to and/or paid settlements, and have had judgments entered against them in PCB Lawsuits. Plaintiffs continue to incur substantial costs to defend against certain PCB Lawsuits that should be borne by Defendants. This lawsuit seeks to recover all of these amounts from Defendants. It also seeks a declaration from the Court that Defendants are required to honor the terms of their agreements and defend, indemnify, and hold harmless Old Monsanto in all currently pending and future PCB Lawsuits …

The Special Undertaking Agreements are substantially similar and contractually obligate each Defendant to defend, indemnify, and hold Old Monsanto harmless from ‘any and all liabilities, claims, damages, penalties, actions, suits, losses, costs and expenses . . . arising out of or in connection with the receipt, purchase, possession, handling, use, sale or disposition of such PCB’s by, through, or under [Defendants], whether alone or in combination with other substances, including, without implied limitation, any contamination of or adverse effect on humans, marine and wildlife, food, animal feed or the environment by reason of such PCB’s.’ Defendants further acknowledged in the Special Undertaking Agreements that they were aware and had been advised by Old Monsanto that PCBs tend to persist in the environment and that care was required in the handling, possession, use, and disposition of PCBs.

Between 1972 and 1977, Old Monsanto manufactured and sold approximately 143 million pounds of PCBs to customers who entered into Special Undertaking Agreements which remain viable today … Defendants and/or their predecessors-in-interest also released into the environment or permitted the release into the environment some of the 133 million pounds of PCBs that they purchased from Old Monsanto between 1972 and 1977 … (Emphasis added.)

Then, befitting a heavy-weight fight, Monsanto goes after GE:

In March 1970, General Electric held a full-scale internal review of the PCB situation and concluded that PCBs were a problem for General Electric and that General Electric was on notice from Old Monsanto to work on the problem and to work with its transformer and capacitor customers. General Electric sent a letter notifying its Pyranol customers about the PCB situation in May 1970. Despite these actions, General Electric strongly objected to ending the use of Aroclors 1254 and 1260 in electrical equipment and recommended that Old Monsanto continue to manufacture those products. (Emphasis added.)

It is remarkable what emerges when billions of dollars are at stake, and once colluding polluters decide they need to fight one another. In the following chart, Monsanto provides a sense of what we are actually talking about when we talk about PCB contamination:

Monsanto’s first amended petition against Magnetek Inc. and General Electric Company. Highlighting added.

It is now clearer than ever that the public—and most especially the EPA—have significantly underestimated the extent of PCB contamination in the Housatonic River, and in all the known and yet-to-be-known PCB landfills in the county—that 59.9 million pounds of PCBs encompass Monsanto sales to GE from just 1972 to 1977. Imagine what the total is after adding sales from the 40 years beforehand. I can only laugh at the fact that, for so many years, GE had convinced us all that there were only 33,000 to 39,000 pounds of PCBs in the entire river system. And still all these years later, as far as I know, the EPA has yet to provide us with a reliable estimate of the total extent of PCBs remaining in the Housatonic River and its floodplain.

Then just to turn the knife, Monsanto tells us. “The EPA reported in 1976 that General Electric used more PCBs than any other company in the U.S. capacitor manufacturing industry.”

And, for added irony, here is where Monsanto acknowledges what Region One of the EPA has been so hesitant to fully accept: the clear threat of the dangers of volatilization of PCBs:

Monsanto’s first amended petition against Magnetek Inc. and General Electric Company. Highlighting added.

Finally, it is one of the great ironies that Monsanto succinctly makes the case that local environmentalists have been arguing for decades now, that GE knowingly contaminated the environment:

III. Defendants Released PCBs into the Environment.

Defendants were aware of the potential for PCBs to persist in the environment and of the need to use care in the use and handling of PCBs. Nevertheless, Defendants and their products have been a major source of environmental PCB contamination, and Defendants have released PCBs purchased both before and after signing the Special Undertaking Agreements into the environment.

PCBs have been released into the environment by Defendants and/or their predecessors-in-interest through their release from products they manufactured, disposal of PCB-containing products, leaks, accidental spills, dumping and disposal of industrial wastes, and through other means.

Some PCBs, once released into the environment, do not break down readily and may persist for long periods of time.

For now, let’s sound the bell on round one and send GE to its corner to rest a bit. In round two, we will explore more of what Monsanto admits to and see how Magnetek and GE respond.

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