Bayer's Monsanto wins reversal of $185 million PCBs verdict in Washington court

By Clark Mindock

(Reuters) -A Washington state appeals court overturned on Wednesday a $185 million verdict against Bayer's Monsanto unit over chemical contamination at a Seattle-area school, marking the second big legal win for the company in as many weeks.

Monsanto spinoff Pharmacia, which sold now-banned chemicals called polychlorinated biphenyls (PCBs), was found liable in 2021. Three teachers claimed they suffered brain damage from PCBs that leaked from light fixtures at the Sky Valley Education Center (SVEC) in Monroe, Washington.

On Wednesday, the state Court of Appeals agreed with Bayer that the lower court improperly applied the laws of Missouri, where Monsanto is based, which allowed the claims to be filed decades after the company stopped producing PCBs in 1977.

The U.S. government outlawed the chemicals in 1979 after discovering links to cancer.

U.S. litigation over PCBs, and more importantly over an alleged cancer-causing effect of weedkiller glyphosate, have weighed heavily on Bayer's shares.

The stock was up 4.5% at 0706 GMT, reaching a four-week high.

Bayer argued Washington law limits liability if exposure occurs outside a product's useful lifespan, which generally means 12 years.

The case will go back to the lower court to determine whether a new trial is warranted. Plaintiffs' attorney Richard Friedman said in a statement they will retry the case if necessary but hope the state Supreme Court "simply reinstates the verdict" on appeal.

Bayer faces about 200 similar claims from the school, where people allege PCBs caused cancer, thyroid conditions and other health problems.

Bayer said the ruling was very significant because the appeals court identified multiple errors.

"The company will consider its legal options regarding the application of this ruling to other SVEC verdicts that are in conflict with it, as well as how this ruling could affect future trials," said a spokesperson.

Juries in some of those cases have awarded more than $1.7 billion in compensatory and punitive damages. But another Washington judge nearly halved an $857 million verdict against the company last week in a small group of those claims.

The company has denied responsibility for the alleged harms and says the school failed to heed repeated warnings to replace the lights. It is appealing the verdicts.

Monsanto said Wednesday's ruling, which also found the lower court wrongfully allowed punitive damages on some claims and erroneously allowed certain expert testimony, is "significant," and many or all of the other trials from the school may have had the same errors. The company said it will evaluate how to proceed in those cases and others yet to be tried.

PCBs were once widely used to insulate electrical equipment and found in other common products like caulking and paint.

(Reporting by Clark Mindock, additional reporting by Ludwig Burger; Editing by Alexia Garamfalvi, Cynthia Osterman and Emelia Sithole-Matarise)