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Monsanto fighting 'super tort' brought by West Coast cities and trial lawyers

By John O'Brien | Jun 23, 2016

SAN JOSE, Calif. (Legal Newsline) - Federal judges are being asked to reject the latest efforts by California cities that have partnered with trial lawyers to possibly impose millions of dollars of liability on corporations over products they haven’t made since the 1970s.

On Monday, defendants in lawsuits brought by the cities of San Jose, Berkeley and Oakland filed a motion to dismiss those complaints, which allege they are liable for the presence of a chemical known as PCB in San Francisco Bay.

Four other cities have filed similar cases, including San Diego (March 2015), Spokane, Wash. (July), Seattle (January) and Long Beach, Calif. (May). All seven cities have hired the Dallas firm Baron & Budd and the San Diego firm Gomez Trial Attorneys.

The defendants – Monsanto, Solutia and Pharmacia – call the cases a “super tort.”

“In general, the municipalities are attempting to pursue public nuisance and equitable indemnity claims regarding water bodies outside their jurisdictional control and which they do not own, but into which they discharge storm water,” the motion says.

The product, polychlorinated biphenyl, was used to insulate electrical products, including wiring. On its website, Monsanto says it stopped making PCBs in 1977 because they weren’t readily biodegradable and is committed to resolving its liabilities regarding PCBs.

The public nuisance claim, which carries no statute of limitations, was used in several lawsuits brought by states, counties and cities against the former makers of lead paint. Though the government entities and their private firms, including Motley Rice, found little success around the country, that possibly changed in California in 2014.

It was then that Santa Clara Superior Court Judge James Kleinberg ordered ConAgra, NL Industries and Sherwin-Williams to pay $1.15 billion to replace or maintain lead paint in millions of California homes.

Seven counties and three cities – Oakland, San Diego and San Francisco - are the plaintiffs in that case. That decision is currently before the state’s Sixth Appellate District.

The cities’ PCB complaints blame Monsanto for being the sole manufacturer of that compound for four decades, trademarking the name “Aroclor” for some of them. It claims the company concealed that PCBs were contaminating all natural resources and living organisms.

Quoting the Environmental Protection Agency, the cities say PCBs are “probably human carcinogens.” They are seeking punitive damages and attorneys fees.

“PCBs are man-made chemical compounds that have become notorious as global environmental contaminants – found in bays, oceans, rivers, streams, soil and air,” the complaints say.

“As a result, PCBs have been detected in the tissues of all living beings on earth, including all forms of marine life, various animals and birds, plants and trees, and humans. The extent of PCB contamination is troubling because PCBs cause a variety of adverse health effects.”

The cities allege their storm sewer systems are subject to certain Clean Water Act permit requirements that include limits on PCB discharges. In the case of the San Francisco Bay plaintiffs, they say the standards were made stricter in May 2015.

Because of this, they say they are required to spend money to comply with the PCB limit. The maker of PCBs, therefore, should be liable for that money, the cities say.

Monsanto’s creation of the public nuisance contributed as a substantial factor in causing Plaintiff’s injury and damages,” San Jose’s complaint says.

“The conduct of Plaintiff did not contribute in any way to the creation of the public nuisance.”

The maker of PCBs is identified in the complaint as “Old Monsanto,” which was spun off into three different corporations in a series of transactions beginning in 1997 – the three defendants.

In 1979, the manufacture of PCBs was outlawed. A year earlier, the same had occurred to lead paint.

The PCB defendants are attempting to pick apart the cities’ public nuisance claim.

“Public nuisance damage claims require municipalities to have a property interest in the property injuriously affected by the nuisance (here, the Bay),” the motion to dismiss says.

“The Cities do not, and cannot, allege a property interest to the entire Bay… The Cities do not own San Francisco Bay and, in fact, they have never taken the position in litigation that they have standing to bring a public nuisance claim regarding the Bay.”

Authority of the bay belongs to the state of California, the motion says.

Another argument made in the motion is that the cities can’t show these three defendants caused a public nuisance in the bay – “Liability cannot attach based on Old Monsanto’s mere manufacture of PCBs,” it says.

“Instead of alleging facts showing Old Monsanto actively caused the alleged public nuisance in San Francisco Bay (which the Cities cannot do here), the Cities rely on bare and circular conclusions that ‘(Old) Monsanto’s conduct was a substantial factor in causing the harm to the Plaintiff,’ (i.e. increased permit costs) because four to eight decades ago Old Monsanto ‘manufactured, distributed, marketed and promoted PCBs in a manner that created or participated in creating a public nuisance,’” the motion says.

“In doing so, the Cities promote a theory of causation-free public nuisance grossly out of step with the governing authorities that, if accepted, threatens to create a ‘super tort’ never before recognized in California or elsewhere.”

The defendants make several other arguments, including:

-Placing a useful product in the stream of commerce does not trigger public nuisance liability under California law;

-The lead paint decision actually favors the PCB defendants because certain claims made by the counties and municipalities that are relevant to the PCB case were dismissed;

-The cities are seeking to improperly expand the public nuisance doctrine to circumvent products liability laws; and

-Permit-related compliance costs are not recoverable under public nuisance.

“Shifting a municipality’s cost of implementing pollution controls from the actual dischargers to product manufacturers is a nonsensical form of ‘back door’ regulation that runs contrary to existing statutory and common law frameworks, and would require an extraordinary expansion of public nuisance law,” the motion says.

Judge Edward J. Davila, of the federal court in San Jose, is handling the consolidated cases of San Jose, Oakland and Berkeley. His colleague in San Diego, Judge William Hayes, recently held oral arguments concerning the motion to dismiss in the City of San Diego’s case.

In that case, San Diego and co-plaintiff San Diego Unified Port District responded to the motion to dismiss by insisting that they had adequately alleged public nuisance.

“In California, the law of public nuisance is not so narrow – for good reason – and the Court need not and should not allow Monsanto to duck its responsibility,” their response says. “In California, manufacturers like Monsanto, which promote a product and uses knowing they will result in a public nuisance, are held liable.

“Under California precedent, the Port District has asserted viable claims for public nuisance because Monsanto marketed its products for use in a manner that Monsanto knew would create a public nuisance. Moreover, Monsanto’s own testimony indicates that it directed at least some of its customers to discard PCBs in a way that Monsanto knew would cause contamination.”

The Houston firm Jackson Gilmour & Dobbs submitted that response brief for the Port District. Baron & Budd and Gomez Trial Attorneys appear as attorneys for both plaintiffs.

The Baron and Gomez firms are also representing the Town of Westport, Mass., in a similar case. An amended complaint was filed in May. The court dismissed some of Westport’s claims in a March 2015 order, including the public nuisance claim.

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