ST. LOUIS — A federal judge has dismissed Monsanto’s lawsuit seeking to require six companies to pay the costs of defending and resolving lawsuits related to pollution allegedly caused by polychlorinated biphenyls, or PCBs, ruling that Monsanto failed to establish the required connection between the companies and the specific PCB-related claims it has faced.
U.S. District Judge Joshua M. Divine of the Eastern District of Missouri granted the defendants’ motion to dismiss and dismissed six counts of Monsanto’s First Amended Petition without prejudice.
Monsanto was ordered to inform the court by Oct. 22, whether it intends to amend its complaint. If it does, the company must consult with the purchaser defendants and propose a reasonable schedule for doing so.
The lawsuit involved six companies that signed agreements with Monsanto in 1972 to purchase PCBs. The defendants named in the order are Magnetek, General Electric, Paramount Global, KYOCERA AVX Components, Cornell Dubilier Electronics and Gillette.
Under substantially similar agreements, the companies agreed to defend, indemnify and hold harmless Monsanto from certain liabilities connected to PCBs sold or delivered to them after the agreements were signed.
Monsanto sought to use those agreements to require the six companies to cover defense costs associated with PCB litigation.
According to the court order, Monsanto has faced numerous lawsuits alleging that PCBs contaminated food and water sources, schools and workplaces, and the company has incurred liabilities of hundreds of millions of dollars or more in cases that have gone to judgment or settlement.
The order said many cases remained pending and Monsanto expected to continue incurring PCB-related litigation costs in the foreseeable future.
The companies covered by the 1972 agreements purchased more than 133 million pounds of PCBs from Monsanto. During the same period, Monsanto sold another 9.5 million pounds of PCBs to other customers that it did not sue in this case.
The court rejected Monsanto’s effort to impose what it described as a blanket-liability theory. Monsanto argued that the contracts required the purchasers to defend and indemnify it for every potentially related PCB lawsuit, even if the company could not identify a specific connection between a particular lawsuit and PCBs sold to a particular defendant after 1972.
The court characterized Monsanto’s position as a “one-drop” theory: if even a single drop of post-1972 PCBs sold to a purchaser ultimately reached a location involved in a lawsuit against Monsanto, the purchaser would have to defend and indemnify Monsanto for the entire underlying liability.
Divine ruled that the contracts did not support that interpretation. The agreements applied only to PCBs sold or delivered by Monsanto to the specific buyer after the contracts were signed in 1972.
The court said the contracts required a close relationship between Monsanto’s underlying liabilities and PCBs sold after 1972 to each particular purchaser. While the contractual language did not require direct, proximate or but-for causation, Monsanto still had to plausibly allege that PCBs sold to a particular defendant after 1972 reasonably led to the pollution underlying a particular lawsuit.
Monsanto had not made those allegations, the court said. Instead, its complaint asserted that each of the six defendants was individually, jointly or collectively liable for the full amount of defense costs associated with the PCB lawsuits, without connecting individual underlying lawsuits to PCBs sold to each purchaser after 1972. The court called that failure a “fatal pleading flaw.”
The court also rejected Monsanto’s argument that contract language covering PCBs used “alone or in combination with other substances” created liability whenever a purchaser’s PCBs became mixed with pollution from another source.
Applying the last-antecedent rule of contract interpretation, the court concluded that the provision addressed situations involving a purchaser’s own use, sale or disposition of PCBs in combination with its own use, sale or disposition of other substances.
Monsanto’s negligence claim was also dismissed. The court determined that the negligence claim was based on the same duties Monsanto relied upon for its breach-of-contract claims.
Under the independent-duty rule, a negligence claim accompanying a breach-of-contract claim requires a separate legal duty owed to the plaintiff. The court found that Monsanto had not established such an independent duty for the post-1972 conduct at issue.
The court likewise declined to exercise equitable jurisdiction over Monsanto’s alternative claim for equitable contribution.
Monsanto sought the defendants’ equitable shares of amounts it had paid or agreed to pay to settle or resolve PCB lawsuits, but the court noted that Monsanto had not identified a legal basis for the claim.
The court also questioned why Monsanto had pursued the purchaser defendants in a separate action rather than attempting to bring them into the underlying lawsuits through the federal impleader process.
The dismissal was without prejudice, meaning the court did not permanently bar Monsanto from attempting to amend its claims.
However, any amended complaint would have to address the deficiencies identified by the court, including connecting individual PCB-related liabilities to PCBs sold to specific defendants after 1972.
The court noted that doing so could require Monsanto to narrow its claims, file multiple lawsuits or pursue multidistrict litigation rather than rely on the blanket-liability approach presented in the current case.
The court did not rule on several other arguments raised by the defendants because its dismissal of Monsanto’s claims resolved the case as currently pleaded.
Those issues included personal jurisdiction, whether only Solutia had standing to enforce the contracts and whether a five-year or 10-year statute of limitations applied to Monsanto’s contract claims.
U.S. District Court for the Eastern District of Missouri case number: 4:23-cv-00204
