Modesto to receive $20 million in settlement of chemical lawsuit

An Alabama construction materials company this week agreed to pay Modesto $20 million to settle its part of a lawsuit the city filed in 1998 against businesses that supplied and used dry cleaning solvents that leaked into groundwater.

The settlement removes Vulcan Materials Co. from two parts of the lawsuit.

It concludes the company's portion of the first part of the trial, which resulted in a judge ordering Vulcan to pay $7.25 million in punitive damages for one round of dry cleaning sites.

The settlement also means Vulcan will not have to go to trial in January to defend a second round of claims.

City leaders said they were pleased with the settlement.

"Anything that'll help pay for the impact of that chemical is going to be helpful, and it means the taxpayers are not going to have to pay for that part of the cleanup," City Manager George Britton said.

Two more companies, R.R. Street & Co. and Dow Chemical Co., are part of the second trial. Neither has settled.

Assistant City Attorney Roland Stevens expects the case to go to trial at least with Dow.

The three companies were ordered to pay Modesto $175 million by a San Francisco jury in June as a punitive award, in addition to more than $3 million in compensatory damages.

In August, Judge John E. Munter trimmed the $75 million punitive damage award against Dow to $5.44 million and pared a $100 million penalty against Vulcan Materials Co. to $7.25 million. The companies have appealed, though Vulcan dropped its appeal with the settlement.

In a news release, Vulcan said it intends to seek reimbursement for its legal and settlement costs from its insurers.

Vulcan no longer produces perchloroethylene, or PCE, one of the dry cleaning chemicals that Modesto and Stanislaus County started identifying in soil and groundwater in the 1980s.

Experts testifying in the trial's first round told the jury it cost Modesto as much as $100 million to clean the contaminated areas.

One of the contaminated sites, Halford's on McHenry Avenue, is on the U.S. Environmental Protection Agency's Superfund list. Cleanup work continues there, and the agency is seeking $9 million from the property's former owners, operators and chemical suppliers.

Bee staff writer Adam Ashton can be reached at aashton@modbee.com or 578-2366.