Source: http://www.lexology.com, April 15, 2015
By: Jeanine L.G. Grachuk, Beveridge & Diamond PC
Two Massachusetts municipalities are down but not out in their attempts to hold manufacturers of PCBs responsible for the environmental effects of PCB-containing products decades later.  In March, the Federal court in Boston issued several opinions involving claims bought by towns against Monsanto and its successors Pharmacia Corporation and Solutia, Inc. alleging that they are responsible for harm caused by the release of polychlorinated biphenyls (PCBs) at schools because they manufactured the PCBs. These cases raise interesting issues as to whether a manufacturer should bear responsibility for harm caused by its products, long after those products enter the stream of commerce.
In the first case, Town of Westport v. Monsanto Co., the Town of Westport alleged Monsanto and its successors produced PCBs for use in transformers, light ballasts, caulks, paints and sealants when it knew that PCBs had harmful effects on humans. Congress banned the manufacture of PCBs in 1979 as part of the Toxic Substances Control Act, but the products that contained PCBs manufactured during this period live on. Westport alleged that it has identified PCBs in the buildings of its school system. Based on theories of breach of implied warranty of merchantability (design defect and failure to warn), negligence, public and private nuisance, trespass, and the Massachusetts contamination remediation statute, M.G.L. c. 21E, Westport claimed that Monsanto and its successors must address the PCB contamination found in the schools.
In March, the U.S. District Court addressed Monsanto’s motion to dismiss some of Westport’s causes of action:  public nuisance, trespass, and M.G.L. c. 21E. First, the court determined that the defendants were not liable for public nuisance, based on lead and asbestos cases involving similar claims, because Monsanto had no power to abate the nuisance once the PCBs were sold.  Second, the court determined that, the fact, if true, that Monsanto sold PCBs with the knowledge that they would be made into building materials was not analogous to negligent entry on the town’s land causing injury. Finally, under M.G.L. c. 21E, the town alleged that the Defendants were liable as arrangers, transporters, or as persons who “otherwise caused” a release of hazardous materials.  The court dismissed the arranger and transporter claims because no specific allegations were made supporting these claims. The court also dismissed the “otherwise caused” claim because there was no allegation Monsanto caused the release other otherwise interacted with the property where the release occurred, other than through manufacture and sale of PCBs. Westport’s claims of implied warranty of merchantability, negligence, and private nuisance remain.
Also in March, the U.S. District Court ruled in the second case, Town of Lexington v. Pharmacia Corp., in which Lexington attempted to bring a class action against the same defendants as the Westport case on behalf of all similarly situated towns for recovery of environmental remediation costs due to presence of PCBs in indoor air of schools. Lexington included claims for breach of the implied warranty of merchantability (design defect and failure to warn) and violation of the Massachusetts consumer protection act, M.G.L. c. 93A. In the first of two opinions in the case, the court denied Lexington’s motion to certify the class because, among other reasons, the class was overbroad; i.e., it was not likely limited to school districts impacted by PCBs manufactured by Monsanto. In the second opinion, Solutia and Monsanto moved for summary judgment on the basis that they do no bear liabilities associated with the manufacture of PCBs due to various contracts between the defendants. The court denied Solutia’s motion for summary judgment, determining that Solutia retained liability via contract. The court reserved its decision on Monsanto’s motion and requested additional briefing.