St. Louis-based Monsanto, which has shifted from a concentration in the chemical business to agricultural seeds, said it would commit to more than $90 million in clean-up, remediation and medical monitoring to resolve a series of class action lawsuits involving a plant once located in Nitro, West Virginia.
The settlement will result in a one-time charge to 2012 earnings of about 5 cents a share, the company said. Analysts were expecting the company to earn $3.50 a share.
An initial fund of $21 million will be established for the medical testing, with up to $63 million in additional funding available.
Monsanto also agreed to pay an undisclosed amount of legal fees owed the plaintiffs' attorneys for the seven-year court battle.
Monsanto said it welcomed the settlement so that it could maintain its focus on the global agricultural seeds business.
"These settlements ensure that both individual and community concerns are addressed, and services are made available for the people of Nitro," said Monsanto Vice President Scott Partridge.
Nitro residents who sued Monsanto alleged the company disposed of dangerous dioxin waste by burning the materials in open pits. They said the dioxin also contaminated soils.
The company had tried to argue that it was working as a government contractor and therefore protected from certain claims related to its waste disposal at that facility. But a judge dismissed that argument earlier this year.
(Reporting by Carey Gillam; Editing by Lisa Shumaker)
Monsanto Settles West Virginia Lawsuits Over Nitro Plant
By Jack Kaskey - Feb 25, 2012 7:31 AM ET
Monsanto Co. (MON), the world’s biggest seed company, agreed to settle all pending litigation relating to dioxin contamination from a plant in Nitro, West Virginia, that produced Agent Orange herbicide decades ago.
The settlements to the litigation, which include class- action lawsuits filed in the state, provide as much as $9 million to have 4,500 homes professionally cleaned, St. Louis- based Monsanto said today in a statement. Monsanto also will provide as much as $84 million over 30 years for medical monitoring of current and former residents, workers and students, and it will pay the community’s legal fees and court costs over the past seven years.
The plant, which operated from 1929 to 2004 under various owners, produced Agent Orange, used during the Vietnam War to defoliate jungle vegetation. The process to make Agent Orange was found to produce dioxins, which are linked to cancer and other ailments. Monsanto hasn’t made Agent Orange since 1969.
“We are please to resolve this matter and end any concerns about historic operations at the Nitro plant,” Scott Partridge, Monsanto counsel, said in the statement.
The settlements will reduce net income in fiscal 2012 by about 5 cents a share, Monsanto said. Kelli Powers, a company spokeswoman, declined to quantify any costs in subsequent years.
“The settlements provide needed medical benefits and remediation services to the people of Nitro and broader community,” Stuart Caldwell, class counsel, said in the statement.
An official at the Putnam County Circuit Court said that there wasn’t a court filing about a settlement.
To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net
To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net
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