Town of Westport v. Monsanto Co.

• Decision Date: 08 December 2017
• Docket Number: No. 17-1461,17-1461
• Citation: 877 F.3d 58
• Parties: TOWN OF WESTPORT, Plaintiff, Appellant, Westport Community Schools, Plaintiff, v. MONSANTO COMPANY; Solutia, Inc.; Pharmacia Corporation, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

877 F.3d 58

TOWN OF WESTPORT, Plaintiff, Appellant,Westport Community Schools, Plaintiff,

v.MONSANTO COMPANY; Solutia, Inc.; Pharmacia Corporation, Defendants, Appellees.

No. 17-1461

United States Court of Appeals, First Circuit.

December 8, 2017

Carla Burke Pickrel, Dallas, TX, with whom Richard M. Sandman, Baron & Budd, P.C., and Rodman, Rodman & Sandman, PC, were on brief for appellant.

Thomas M. Goutman, Philadelphia, PA, with whom Richard L. Campbell, Boston, MA, Kim Kocher, Philadelphia, PA, and White and Williams LLP were on brief, for appellees.

Before Lynch, Stahl, Barron, Circuit Judges.

LYNCH, Circuit Judge.

This is an appeal from the entry of judgment for the defendants in a products liability case brought by the plaintiff, Town of Westport ("Westport"). The defendants are Monsanto Company, Solutia, Inc., and Pharmacia Corporation (collectively "Pharmacia"). Westport filed suit under Massachusetts law against Pharmacia, seeking to recover the cost of remediating Westport Middle School ("WMS") after discovering polychlorinated biphenyls ("PCBs")—chemicals that are hazardous above certain concentrations—in the school building.

When WMS was built in 1969, the contractor, who is not a defendant in this suit, used caulk that contained PCBs. Although Monsanto did not make the caulk at issue, it sold plasticizers—a component of caulk—to the third-party manufacturer who did. Westport alleges that Pharmacia is liable for what it claims to be "property damage" caused by the "PCB contamination" at WMS.

The district court entered judgment against Westport on all alleged counts of tort liability. On appeal, Westport challenges only the entry of judgment against its (1) breach of warranty and (2) negligent marketing claims.

We affirm the district court's grant of summary judgment. Monsanto did not breach the implied warranty of merchantability because it was not reasonably foreseeable in 1969 that there was a risk PCBs would volatilize from caulk at levels requiring remediation—that is, levels dangerous to human health. And as a matter of state law, a negligent marketing claim cannot be maintained independent of a design defect claim on these facts.

I. Background

Because this case comes to us following Pharmacia's motion for summary judgment, we recite the facts in the light most favorable to Westport.¹

A. Overview of PCB-Containing Plasticizers

Monsanto began to manufacture and sell PCB mixtures, trademarked as Aroclors, in 1935. Aroclors were a popular plasticizer—an additive used in building materials to increase fluidity—because they were viscous, thermally stable, and non-flammable. By August of 1970, however, Monsanto pulled PCB-containing Aroclors from the market because of their environmental impact.

1. Supply Chain and Warnings

Before August 1970, Monsanto sold PCB-containing Aroclors to formulators of building materials, who then incorporated them into various end products. For "major customers" and "major applications," Monsanto likely sold Aroclors in bulk, in 55-gallon drums. Some of Monsanto's direct customers were companies that manufactured end products, such as paint and caulk, while others produced polymer components of end products.

Monsanto continually updated its direct customers with information about the chemical properties and health effects of its PCB mixtures. For instance, the record includes Monsanto's technical bulletins for Aroclor plasticizers from 1943, 1955, 1966, and 1970. These bulletins included information about the plasticizers' rate of vaporization, as well as warnings about their toxicity and environmental impact.

Beginning in 1937, Monsanto warned customers that experimental studies in animals showed that "prolonged exposure to Aroclor vapors evolved at high temperatures or by repeated oral ingestion" would "lead to systemic toxic effects." These warnings were present in all subsequent technical bulletins. The bulletins also prescribed precautions for industrial workers, such as ventilation and protective gear.

In addition, Monsanto warned its customers about the environmental hazards of PCBs. In its March 1970 bulletin, Monsanto explicitly advised against certain uses of Aroclors:

Some specific applications where the use of PCB should definitely be avoided are in paints and sealants for swimming pools, paints and waterproofing agents in silos and other buildings where food products for humans or animals are stored, and as a component of any container of wrapping used in packaging food products.

These warnings were only given to Monsanto's direct customers, and not to end users.

2. Studies of Health Effects

Between 1934 and 1972, Monsanto sponsored 300 studies on the health effects of PCB exposure through inhalation and skin contact. These included skin patch and inhalation tests, as well as studies of the long-term reproductive and toxicological effects of PCBs in lab animals. In 1938, one study showed that PCBs were linked to liver toxicity. However, a series of studies in the 1950s, sponsored by Monsanto, and conducted by Dr. Treon, demonstrated that "at ordinary temperatures," the hazard of inhaling PCBs from Aroclors "may well be slight or entirely absent." These studies concluded that the Aroclors tested only volatilized at levels sufficient to cause adverse health effects in animals when they were heated to 100 degrees Celsius (212 degrees Fahrenheit).

Although Monsanto was not legally required to test the volatilization of PCBs from consumer end products that it did not manufacture—such as paints and resins—it sometimes did so. These studies only showed elevated levels of volatilization at room temperature from latex paints and resins. Specifically, Monsanto's U.S.-based research division and U.K.-based medical department conducted at least three studies on the volatilization of PCBs from latex paints between 1952 and 1955. Around that time, one of Monsanto's clients, Dow Chemicals, had expressed interest in using Aroclors in its latex paints.

Monsanto's paint studies revealed that air samples collected from rooms covered in latex paint containing Aroclors, with temperatures between 70 and 100 degrees Fahrenheit, contained elevated PCB concentrations (above 0.15 mg per cubic meter) that persisted for one month (the duration of the study). Based on these findings, in 1953, Monsanto U.S. recommended against incorporating Aroclors into latex paints for indoor use. Monsanto U.K. later followed suit by recommending that the company continue to manufacture paints "based on chlorinated rubber" and "to sell Aroclors for production of paints intended for exterior application," but to "discontinue sale of Aroclors for use in the manufacture of all other paints."

However, neither Monsanto nor any other research entity studied the rate of PCB volatilization from caulk. According to Westport's own experts, even though Monsanto had conducted weight-loss tests to ascertain the amount of Aroclor vaporization from caulk, the first study on the rate of PCB volatilization did not take place until "the early 2000s"—more than three decades after WMS was constructed in 1969. And there are still no studies to date that establish PCBs volatilize from caulk at levels harmful to human health.

3. Legislative Response

Six years after Monsanto removed PCB-containing Aroclors from the market, Congress enacted the Toxic Substances Control Act ("TSCA"), 15 U.S.C. § 2601, et. seq., which prohibited (with limited exceptions) the manufacture and distribution of PCBs in commerce. Id. § 2605(e)(2). The TSCA authorized the Environmental Protection Agency ("EPA") to implement specific regulations regarding PCB use and disposal. See id.

Following this authorization in 1976, the EPA promulgated regulations which required entities to obtain an exemption for the continued use of PCBs in a non-enclosed manner at concentrations above 50 parts-per-million. See 40 C.F.R. § 761.20(c)(1). As justification for its decision, the agency pointed to, inter alia, "the well-documented human health and environmental hazard of PCB exposure, [and] the high probability of human and environmental exposure to PCBs and PCB Items from manufacturing, processing, or distribution activities." Id. § 761.20.

B. Construction and Remediation of WMS

When WMS was built in 1969, Congress had yet to pass the TSCA, the EPA did not exist, and Aroclors were still on the market. The builders of WMS used caulk—a construction material made up of plasticizers, resin, fillers, and other additives—that contained PCBs. Monsanto supplied the two PCB mixtures at issue—Aroclor 1248 and 1254—to Product Research & Chemical Corporation ("PRC"), which produced the caulk used at WMS.

Nearly four decades later, in 2010, Westport took part in the Massachusetts State Building Authority's Green Repair Program to renovate WMS's windows and roof. In preparation, Westport tested the building for hazardous substances, including PCBs. The tests indicated the presence of PCBs in the window glazing, exterior window caulking, and interior door caulking. Westport then embarked on a multi-million dollar remediation project to remove the PCBs and brought suit against Pharmacia for the costs.

C. District Court Proceedings

Westport filed this action on May 4, 2014, alleging seven counts of tort liability: (1) breach of the implied warranty of merchantability for defective design, (2) breach of the implied warranty of merchantability for failure to warn, (3) negligence, (4) public nuisance, (5) private nuisance, (6) trespass, and (7) violation of the Massachusetts Oil and Hazardous Material Release Prevention and Response Act. Westport sought, inter alia, "compensatory damages ... including, but not limited to" the "costs of investigating, sampling, testing, and assessing the extent of PCB contamination at Westport Middle School," and the costs of "removing PCBs and PCB-containing materials ... from school property."

Pharmacia filed a partial motion to dismiss counts 4 through 7. The...