BIRMINGHAM, Ala. (October 15, 2007) — Vulcan Materials Co. announced Friday that it has reached a settlement with the City of Modesto, Calif., to resolve all claims of alleged perchloroethylene groundwater contamination.
Vulcan will pay Modesto $20 million to remove itself from a lawsuit filed by the city in 1998 against providers and users of perc. A judge ordered the company to pay $7.25 million in punitive damages for one phase of cleanup in the first part of the trial, decided last year.
Vulcan will not go to trial early next year to appeal the verdict or defend against a second round of claims. Two other major perc suppliers, Naperville, Ill.-based R.R. Street & Co. and Midland, Mich.-based Dow Chemical Co., have not yet settled and said last year that they would appeal the decision.
The suppliers were originally ordered by jury verdict to pay Modesto $175 million in punitive damages, but damages were cut to about $13 million by a Superior Court judge. Damages against Vulcan Materials Co. were reduced from $100 million to $7.25 million, and Dow’s went from $75 million to $5.5 million. R.R. Street & Co. was assessed $75,000.
Friday’s settlement agreement must be approved by the Modesto City Council and the San Francisco Superior Court to become effective. City leaders told the Modesto Bee they were pleased with the terms.
As a result of the settlement, the company will take a charge of about 9 cents per share in the third quarter of fiscal 2007. Vulcan will seek reimbursement for its legal and settlement costs from its insurers.
Vulcan Materials Co. is the nation’s largest producer of construction aggregates and a major producer of asphalt and concrete. It divested its chlorinated solvents unit in 2005.
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