DOCUMENT BANK
CERCLA BRANCH
OFFICE OF REGIONAL COUNSEL
REGION IV
U.S. ENVIRONMENTAL PROTECTION AGENCY
VOLUME II
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TABLE OF
CONTENTS
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Issk I&tas
WcalTOBTOlSt
PRE-REFERRALS
P. Mlnllit (PRH) Report - RD/RA Negotiations
• Bypass 601 Groundwater
• Helena Chemical
• Kalama specialty Chemicals
• Rochester Property Superfund Site
• Stauffer Chemical Cold Creek and LeMoyne
• South Marble Top Road
• t H Agriculture & Nutrition Company
REFERRALS
Q. Consent Decree Enforcement
1. Stipulated Penalties Letter
•Golden Strip Septic Tank
R. Consent Decree Transmittal letters
1. Indirect Referral - OE Concurrence
• Ciba-Geigy Corporation - Costs > $60 mil
2. Direct Referral to DOJ - Cost Recovery
• Basket Creek
• Shaver's Farm
3. Amendment to Consent Decree
• Sherwood Medical Company
S. 10 Point Settlement Analyses
1. Standard RD/RA - 100% Recovery
• Ciba-Geigy - Costs > $60 mil
• Hercules
2. Large Number of PRPs - Cashout
• Bluff Road
3. Partial/Interim
• Lees Lane Landfill
• Divisibility of Harm (JMC Site)
4. Inability to Pay
a. Compromise - No Reopeners
• Coleman Evans Wood Preserving
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• Potter's Pits
b. Bankruptcy
• Hollingsworth Solderless Terminal Co.
5. De Minimis (See under SETTLEMENTS)
• Wilson Concepts
6. De Hicromis (See under SETTLEMENTS)
7. Prospective Purchaser (See under SETTLEMENTS)
• Bumper's Distribution site
• Florida Steel
8. Small Cost Recovery Settlement Ten-Point Analysis
• Carrier Air Conditioning'
MTSCKT.T.ANEOUS
T. Routing Slip - Model Example
U. Letter Authenticating EPA Documents
V. Briefing Papers
• Peak Oil/Bay Drums - Begin RD/RA Negotiations
w. Closeout nemo — Statute Of Limitations
• Sonford Products Site #J5
X. Paperwork to Assert Deliberative Process Privileges (See
under ADMINISTRATIVE DISCOVERT)
Y. FOIA (See under ADMINISTRATIVE DISCOVERT)
Z. Lien Notices (Federal)
1. Pre-Perfection Notice Letter to Landowner
2. Post-Perfection Notice Letter to Landowner
3. Notice of Federal Lien
AA. EPA Employees as Witnesses in Private Litigation:
1. Letters by EPA Denying Private Litigant's Request to
Depose EPA employee
• Burnett v. Myriad Properties
• In Re Fitzgerald v. City of Mount Dora
2. Motions to Quash Subpoena, Protective Order, and
Memo in Support of Motion
• U.S. v. Amtreco, Inc. v. AT&T
• Broderick Investment Co. v. Hartford Ins.
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PRE-REFFERALS
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MINILIT(PRN) REPORT
RD/RA NEGOTIATIONS
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V ,tcT REGION IV
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345 COURTLAND STREET. N.ff.
_ ATLANTA. GEORGIA 30365
ENFORCEMENT CONFIDENTIAL
ATTORNEY/CLIENT PRIVILEGE
DO NOT RELEASE
PRE-REFERRAL LITIGATION REPORT
BYPASS 601 GROUNDWATER CONTAMINATION SITE
Cabarrus County, North Carolina
I. BACKGROUND
A. Site History
The Bypass 601 Groundwater Contamination Site (the Site).is
defined as an area located on the western edge of Concord, North
Carolina, in which groundwater is contaminated by multiple
sources. The City of Concord is the county seat for Cabarrus
County. U.S. Highway 29/Route 601 Bypass provides access to the
cities of Kannapolis, approximately six (6) miles north, and
Charlotte, approximately twenty-one (21) miles southwest of the
Site.
The Site consists of the Martin Scrap Recycling (MSR) facility,
an inactive battery salvage and recycling operation, as well as
ten (10) additional source areas which have contributed to
groundwater contamination (Exhibit A). These ten additional
source areas include private residences, as well as private
operating and non-operating small businesses.
The MSR facility began battery recycling operations in 1967 under
the ownership and operation of Oliver Martin (although the
property was co-owned by Oliver's wife, Carrie Martin). From
1955-1966, Oliver Martin operated a similar enterprise under the
name of Oliver Martin Battery Salvage. Oliver Martin Battery
Salvage was located on a piece of property just across the street
from the present MSR facility. Oliver Martin closed the business
in 1966, and sold the property, which is now one of the ten (10)
additional source areas included in the Site description (See
Source area 2, Site Features Map, Exhibit A).
Oliver Martin operated the current MSR facility from 1967 to
1979. In 1979, Oliver sold the assets and operation of MSR to
his son, Bill Martin, who operated the facility as a scrap metal
and lead battery recycling facility until it closed in 1986. At
the time of its closing, MSR filed for bankruptcy.
B. MSR's Operations
The MSR facility (as well as the old Oliver Martin Battery
Salvage Company), derived revenue from the recovery of several
Printed on Recycled Paper
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types of scrap metal, most notably lead, wfiich was recovered from
scrap vehicle batteries. The batteries were "cracked" by sawing
off the tops with an electric saw. The acid from the batteries
was drained, and lead plates were then removed for sale as scrap
metal. The wastes from the batteries and battery casings
included sulfuric acid and lead.
C. Releases of Hazardous Substances
During the period of 1966 through 1979, when Oliver Martin owned
and operated the MSR facility, hazardous substances were released
through the battery recycling process. A surface impoundment on
the property received the waste sulfuric acid from the batteries,
which was neutralized with soda ash. Overflow from the surface
impoundment would runoff into the Irish Buffalo Creek, which
flows along the eastern boundary of the MSR property (Exhibit A).
To divert this waste discharge from the creek, a subsurface drain
was installed downgradient from the surface impoundment. After
the drain was installed, overflow percolated into the ground.
The used battery casings were crushed, mixed with gravel, and
deposited on MSR's property as fill material. Additional
evidence indicates that these casings were also used as fill
material (as a regular practice) at several of the other ten (10)
source areas during this period.
In 1979, Oliver Martin sold the assets of the MSR facility to his
son, Bill Martin. Bill Martin continued the lead reclamation
operations, but no longer buried the battery casings on-site.
Instead, Bill Martin disposed of the chipped battery casings at
the Cabarrus County Sanitary Landfill until 1982. The Cabarrus
County Sanitary Landfill is not one of the ten (10) other source
areas which make up the Site.
In 1982, MSR discontinued use of the on-site surface impoundment.
Hazardous wastes, including sulfuric acid and lead from
batteries, was gravity-fed to two stainless steel holding tanks.
Lead particles settled out and the sulfuric acid was pumped to
tanker trucks and shipped to a buyer for resale. In 1982, Bill
Martin began to rinse the chipped plastic casings with water to
remove the lead residue, store the chips temporarily on-site, and
then sell the chips for off-site recycling.
D. Associated Cleanup Activities
During the 1970's, contamination problems at the MSR facility
came to the attention of the State of North Carolina (North
Carolina). When North Carolina discovered heavy metals in
surface water on MSR's property and found the water to be highly
acidic, North Carolina instructed MSR to dispose of spent battery
casings at the Cabarrus County Sanitary Landfill in 1979. North
Carolina also required MSR to cover, compact, seed, and properly
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neutralize the area of MSR property where the battery casings had
been disposed.
In early 1981, MSR was fined $13,000 for various Occupational
Safety and Health Act (OSHA) violations, the most serious of
which involved employee exposure to lead in the workplace.
In late 1981, MSR was inspected by the North Carolina Division of
Environmental Management (NCDEM), and the North Carolina Division
of Health Services (NCDHS). In February, 1982, NCDHS conducted a
follow-up inspection and found that the MSR facility was selling
all hazardous by-products of the battery recycling operation.
NCDHS also discovered that the MSR facility had discontinued
disposal of battery acid into the surface impoundment, which was
filled with sediment and sludge, and was storing battery acid in
steel holding tanks until the acid was recycled or sold.
Additionally, two (2) to six (6) inches of topsoil from around
the plant operations buildings were removed and sold.
E. Past CERCLA-Related Activities
Throughout 1983 and 1984, NCDEM and NCDHS continued sampling
surface water and sediment from areas surrounding the MSR
facility. These samples indicated the presence of lead and other
heavy metals in excess of Federal standards for drinking water.
North Carolina referred the Site to EPA, and as a result, EPA
completed an extensive site investigation report for the MSR
facility in 1984. EPA sampling of monitoring wells, private
wells, surface water, and sediment, both on and off-site,
detected elevated concentrations of lead, arsenic, cadmium, and
chromium contamination in both the soils and the groundwater.
On October 1, 1984, EPA formally proposed the Site for listing on
the National Priorities List (NPL) (40 C.F.R., Part 300, Appendix
B). The Site was finalized on the NPL by publication in the
Federal Register on June 10, 1986, 51 Fed. Reg. 21070, with a
Hazard Ranking System (HRS) score of 37.93.
In July 1985, EPA conducted an interim potentially responsible
party (PRP) search, a title search, and industrial survey
(Exhibit B). The PRP search identified current and former
property owners of the MSR facility and also identified
industries located within a one-half mile radius of the MSR
facility that could be potential contributors to Site
contamination. Based on property ownership information, EPA
issued general notice letters and information requests under
CERCLA Section 104(e), 42 U.S.C. § 9604(e) to three (3) PRPs on
October 28, 1985.
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EPA conducted a fund-lead remedial investigation (RI) in 1989,
and the final RI report was completed on April 1, 1990. During
the investigation, several locations where battery casings had
been dumped were discovered within 1.5 miles of the MSR facility.
Due to the complexity of the Site contamination problem, the Site
was divided into three (3) operable units (OU). 0U#1 addressed
soil contamination on the MSR facility, 0U#2 addresses soil
contamination at the additional source areas, and OU#3 addresses
the groundwater contamination at the entire Site.
On August 31, 1990, EPA issued a Record of Decision (ROD) for
OU#l (Exhibit C). The ROD presented an interim remedial action
for addressing an estimated 57,000 cubic yards of contaminated
soil at the MSR facility. A temporary cap was proposed for the
facility to prevent human and environmental exposure to the
contaminants and to minimize the generation and transport of
leachate to the groundwater. This interim remedy, however, was
never implemented due to the fact that the State has no approved
Capacity Assurance Plan (CAP). In the absence of an approved
CAP, EPA is unable to undertake fund-lead remedial actions.
On November 27, 1990, EPA sent additional general notice letters
under CERCLA Section 104, 42 U.S.C. § 9604 to the three (3)
identified PRPs notifying them of their potential liability and
requesting their participation in the remedial design/remedial
action (RD/RA) phase at the Site. The PRPs declined to
participate.
In early 1992, EPA conducted a removal action on source areas 1,
2, 9, and 10 (Exhibit A). This action removed approximately
9,500 tons of battery casings and soil heavily contaminated with
lead. All of the excavated material was transported to the MSR
facility and covered to prevent human and environmental exposure.
The Proposed Plan (the Plan) for the Site was issued on December
17, 1992 (Exhibit D), as required by CERCLA Section 117(a), 42
U.S.C. § 9617. The Plan proposed to combine the contaminated
soils from the MSR facility with the contaminated soils from the
additional source areas. The combined soils will be treated on-
site by solidification/stabilization, then removed off-site for
disposal. In addition, the Plan proposed a scheme for
groundwater remediation across the entire Site through complete
groundwater extraction, on-site treatment, and discharge to a
Publicly Owned Treatment Works (POTW).
II. THE PRPs AND THE EVIDENCE
On December 15, 1991, PRC Environmental Management, Inc., (PRC)
began a second PRP search based on business records collected
from the MSR facility. The final PRP search document is expected
to be released in early February, 1993, and a copy will be
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forwarded when received. The business records consisted of
invoices for scrap material (including batteries) made by the MSR
facility for the years 1980 through 1986. Due to the MSR
facility record retention policy/ no documents exist prior to
1980.
The second PRP search uncovered approximately 1,500 entities who
sent batteries and lead to the Site from 1980 to 1986. Out of
the possible 1,500 entities identified, only 251 have been
located to date. EPA does not anticipate locating the remaining
identified PRPs, however, the PRPs that have been located have
indicated a willingness to assist in locating other PRPs.
On August 28, 1992, general notice letters and information
requests issued under CERCLA Section 107(a), 42 U.S.C. § 9607(a),
and CERCLA Section 104(e), 42 U.S.C. § 9604(e), were sent to all
251 entities who were located by PRC (Exhibit E). A brief
description of the PRP groups is set out below.
A. Property Owners
1. Oliver and Carrie Martin
Oliver and Carrie Martin are liable as current joint owners of
the MSR facility, where there has been a release of a hazardous
substance. A financial statement (as of December 11, 1990)
provided by Oliver and* Carrie Martin in response to the November
27, 1990 notice letter sent by EPA, shows the couple to be
financially viable (Exhibit F). Oliver Martin, however, has
recently undergone surgery, and has been diagnosed with terminal
cancer. He is not expected to live much longer. As a result,
Oliver Martin should probably not be named as a PRP. Due to the
discovery of Oliver Martin's business records, it may be
unnecessary to pursue Carrie Martin as a PRP either.
2. Property Owners of the Additional Source Areas
The owners of the property at which contamination was discovered
(batteries were buried) are liable as owners of a facility at
which there has been a release of a hazardous substance.
Due to the fact that these property owners would be unable to
finance the necessary cleanup, as well as the fact that Oliver
Martin's business records have yielded many viable PRPs who seem
willing to do the cleanup, it is unlikely that these property
owners should be named as PRPs.
B. Parties Who Operated the MSR Facility
Both Oliver and Bill Martin are liable as operators of the MSR
facility, where hazardous substances have been released. For the
reasons stated above, Oliver Martin should probably not be named
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as a PRP. Due to Bill Martin's poor financial standing, as
evidenced by his recent bankruptcy, it is unlikely that Bill
Martin should be pursued as a PRP either.
C. Parties Who Sold Batteries to the MSR Facility Between 1980-
1986
Based on 1980-1986 business receipts of the MSR facility, all
parties who sent batteries to the MSR facility are liable as
persons who generated waste for disposal at the Site. None of
the parties dispute the business records which link them to the
Site.
These parties have begun the process of forming a steering
committee, and have expressed an early intention to work with EPA
in carrying out the remedial action phase at the Site.
Accordingly, these parties should be named as PRPs.
III. LEGAL DEFENSES AND EQUITABLE CONSIDERATIONS
A. Legal Defenses
1. Oliver and Carrie Martin
The liability of both Oliver and Carrie Martin is
straightforward. Evidence exists showing Oliver and Carrie
Martin as owners of the MSR facility at the time the battery
casings were "cracked" and buried at the additional source areas.
As a result, neither Oliver nor Carrie Martin have a viable
defense to CERCLA liability.
2. Property Owners of the Additional Source Areas
The liability of those landowners who requested that battery
casings be used as fill material on their property is
uncontested. For those property owners who were unaware, or took
possession with no knowledge, of the contamination, the "innocent
landowner" defense may be available, as set out in Section 107(b)
of CERCLA, 42 U.S.C. § 9607(b). Responses to CERCLA Section
104(e), 42 U.S.C. § 9604(e), letters show that several of the
property owners took possession of their property without
knowledge of the buried battery casings located on their land.
However, it is unlikely that these landowners would prevail under
this defense, as they failed to make proper inquiry or conduct
environmental audits, as caselaw currently seems to require. At
this time no property owner has raised this affirmative defense.
3. Parties Who Operated the MSR Facility
The liability of both Oliver and Bill Martin is straightforward.
Evidence exists showing Oliver and Bill Martin as operators of
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the MSR facility at the time the battery cdsings were "cracked"
and buried at the additional source areas. As a result, neither
Oliver nor Bill Martin have a viable defense to CERCLA liability.
4. Parties Who Sold Batteries to the MSR Facility Between 1980-
1986
The liability of those parties who sold batteries to the MSR
facility is fairly straightforward. MSR's business receipts show
these PRPs generated lead batteries and lead for disposal at the
MSR facility. As a result, these PRPs have no viable defense to
CERCLA liability, subject to the equitable considerations below.
B. Equitable Considerations
Requiring those parties who sold batteries to the MSR facility
during the period of 1980 to 1986 to finance the entire Site
cleanup may present some difficulty, as divisibility may be
raised. These parties may argue that the only evidence linking
them to contamination at the Site are the receipts of the MSR
facility, which are dated 1960 to 1986. Because the evidence
could point to the conclusion that the contamination of the ten
additional source areas occurred prior to 1980 (due to the fact
that in 1980, the MSR facility stopped burying their battery
casings of£•?site, and began dumping them at the Cabarrus County
Sanitary Landfill), these parties may argue that their
responsibility for the ten additional source areas is divisible
from their liability regarding the actual MSR facility (where
contamination was ongoing until operations ceased in 1986). The
vast majority of these parties (through responses to Information
Requests) claim that the transactions memorialized in the 1980 to
1986 business receipts are the only transactions that took place
between the parties and the MSR facility.
One possible argument against this theory is that the business
records from 1980 to 1986 only provide a "snap-shot" of the
transactions that took place during the period of time that the
MSR facility was in operation (1956 to 1986). It seems unlikely
that all of these parties, who represent most of the businesses
that would require battery disposal within the geographical area,
would suddenly start to do business with the MSR facility, the
only such facility in the area, in 1980. Business records prior
to 1980 do not exist, however, and Oliver Martin seems to have no
recollection as to which of the parties from after 1980
transacted business with the MSR facility before 1980. As a
result, the only evidence linking these parties to the Site after
1980 is an assumption that these parties had to be disposing of
their batteries someplace prior to 1980, and the most likely
place would be the only facility in the area, MSR.
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At this time, however¦, divisibility has not been raised by these
parties. A steering committee has been formed, representing a
large group of viable parties who have indicated a strong
interest early in the proceedings to participate in the cleanup
at the Site. As a result, further communications regarding the
liability of the Martins and the owners of the ten additional
source areas have not been pursued at this point.
IV. STATUTE OF LIMITATIONS
The statute of limitations is not an issue in this case, as
response actions are currently ongoing.
V. RESPONSE COSTS
A preliminary Itemized Cost Summary Report has been prepared,
which shows past costs at the Site to be at least $2,912,167.52,
as of December 21, 1992. (Exhibit G). The Region IV Cost
Recovery Division estimates that this figure is not static, and
will probably be much higher. A full cost documentation has been
requested, and will be forwarded when received.
VI. THE ADMINISTRATIVE RECORD
EPA compiled an Administrative Record (the Record) for this Site,
and released it for public review and comment on December 17,
1992. The Record is located in EPA-Region IV's Library in
Atlanta, Georgia, and a copy was sent to the Charles A. Cannon
Memorial Library on Union Street in Concord, North Carolina. Due
to the length of the Record, it is not being made an exhibit to
this litigation package; however, the index to the Record is
attached as Exhibit H.
VII. THE REMEDIAL ACTION
EPA plans to negotiate a consent decree with the parties who sold
batteries to the MSR facility to finance and perform the RD/RA
portion of the response action. The Record of Decision (ROD),
which the Region anticipates to be final by the second quarter of
fiscal year 1993, will most likely provide for the treatment of
contaminated soil and contaminated groundwater (See Proposed
Flan, Exhibit D). The contaminated soil from all source areas
will be excavated and contaminated sediment from stream locations
will be dredged. This material will be consolidated and staged
at a central location at the MSR facility. Solidification and
stabilization may be used to treat the contaminated material,
with off-site disposal of the fixed material at an industrial
landfill.
Contaminated groundwater will be contained and treated using
extraction wells at all of the source areas of contamination.
The contaminated water from these extraction wells will be
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treated with air strippers to remove the volatile organic
compounds. The treated water will be discharged to a Publicly
Owned Treatment Works.
The remedy selected will most likely include the demolition and
o££-site disposal of the abandoned flea market at source area #4
I See Exhibit A), as well as any standing buildings at the MSR
facility. In addition, one (1) trailer home at source area #3
will probably be relocated (See exhibit A) . Testing will also be
required to assess the effectiveness of the remedy, and
administrative requirements for air emission limitations, water
quality discharge requirements, and requirements for off-site
disposal of hazardous waste must be met.
EPA anticipates that the preferred remedial action for this Site
may be controversial. Though the preferred remedy is strongly
supported by the Feasibility Study prepared for the Site, the
cost of the remedy is estimated to exceed $50 million. As the
comment period for the Proposed Plan has not been closed, it is
hard to predict the tone of the comments EPA might receive. The
seemingly high cost of the cleanup may cause active opposition to
the proposed remedy by the many PRPs who may be required to
finance the cleanup.
A copy of the Final ROD will be forwarded to EPA Headquarters
(HQ) and the United States Department of Justice (DOJ) as soon as
it becomes available.
VIII. NATURAL RESOURCE TRUSTEES
Both the United States Department of the Interior (DOI) and the
State of North Carolina were contacted prior to the beginning of
any remedial action at the Site. Both the State and DOI will be
notified of negotiations with potentially responsible parties
(PRPs) regarding the implementation of the remedial design and
remedial action for the Site.
IX. RELATED CRIMINAL INVESTIGATIONS, PROSECUTIONS, OR CIVIL
ACTIONS
There are no other related proceedings relevant to this Site.
X. PRE-REFERRAL SETTLEMENT STRATEGY
A. Timetable
The following schedule details the proposed milestones for the
negotiation of a consent decree for this Site:
Event Date
Proposed Plan released
December 17, 1992
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Pre-referral Litigation Report to DOJ/HQ Early January, 1993
ROD finalized and signed by Region IV March, 1993
RD/RA Notice Letters issued April/May, 1993
RD/RA good faith offer due June/July, 1993
RD/RA negotiations conclude, August, 1993
Decree lodged
B. Alternative Types of Settlements
Due to the large number of PRPs identified for this Site, the
PRPs may request EPA to enter into an early de minimis
settlement. EPA does not anticipate accepting such a proposal
due to the data contained in the most current volumetric ranking
(Exhibit I). The volumetric data ranks all 1,500 PRPs according
to the amount (in pounds) of batteries delivered to the MSR
facility. According to the data, only the top fourteen (14)
contributors out of 1,500 have contributed more than one-percent
(1%) of the total volume of batteries delivered to the Site.
Additionally, only ten (10) of these fourteen (14) contributors
have been located. All ten (10) of these contributors are small
local businesses who will not be capable of raising the funds
necessary to conduct the estimated $50 million remedy.
EPA has already decided not to name the truly small generators to
this Site when it decided to rank only the 1,500 parties who sent
more than ten (10) batteries (or 320 pounds at the conversion
ratio of thirty-two (32) pounds per battery, as stated by The
Handhnok of Batteries and Fuel Cells. McGraw-Hill, Inc., 1984),
instead of all parties who might have sent one (1) or two (2)
batteries to the Site.
The group of approximately 250 identified generators collectively
appears to have sufficient funds to undertake the RD/RA and pay
for past costs, and has indicated a willingness to enter into
negotiations. Only the Martins and the owners of the ten (10)
additional source areas have made claims regarding inability to
pay for cleanup actions.
C. Proposed Draft Consent Decree
The Region intends to issue Special Notice Letters under CERCLA
Section 107, 42 U.S.C. § 9607 and use the national Model CERCLA
RD/RA Consent Decree (OSWER Directive #9835.17) to initiate
negotiations. A draft Consent Decree, modified as much as
possible for this Site, is included as Exhibit J. A copy of the
regional draft model SOW that will be the basis for the draft SOW
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for this Site is included as Exhibit K. A* site-specific draft
SOW will be forwarded to HQ and DOJ as soon as it is available.
XI. LEGAL, POLICY, AND STRATEGIC CONSIDERATIONS
As discussed above, the PRF group that is being most actively
pursued is the large group of parties who contributed batteries
to the Site from 1980 to 1986. Because this group is financially
viable, and because the group has already expressed a willingness
to undertake or finance activities at the Site, it is possible
that the issue of divisibility (as discussed above in the
Equitable Consideration Section) will never arise. This group
has also expressed an interest in helping EPA locate other
parties ranked on the volumetric that EPA couldn't locate. If
these PRPs finance the entire response action, EPA derives no
benefit from pursuing the Martins or the additional source area
property owners as responsible parties.
One issue that EPA expects the PRPs to raise is that EPA has
proposed the demolition of the buildings on the MSR facility and
a building on one (1) of the source areas. This action may
result in a taking without just compensation. HQ has been
notified of this possibility, and believes that this argument
will fail, as the value of the property free from contaminants
far outweighs the burden of demolishing these structures.
XII. EPA HEADQUARTERS AND REGIONAL SUPPORT
Since the Region does not anticipate any issues of national
significance to arise in this case, Region IV will take the lead
in negotiating this Consent Decree. The DOJ's resources should
not be necessary beyond those normally expended when assisting a
Region during negotiations. According to the memorandum
"Revision of CERCLA Civil Judicial Settlement Authorities Under
Delegations 14-13-B and i4-14-E," OSWER Directive No. 9012.10-a,
June 17, 1988, the Region anticipates that this settlement will
not require HQ concurrence pursuant to Waiver of Concurrence
Requirements A.l. The Region requests HQ consultation, if
necessary, during the negotiations.
XIII. REGIONAL CONTACTS
The Regional Attorney assigned to the Site is Seth Bruckner (404)
347-2641, ext. 2268. The Remedial Project Manager for the Site
is Giez.elle Bennett (404) 347-7791.
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LIST OF EXHIBITS
A. Site Features Map
B. Interim PRP Search and Title Search
C. Record of Decision, Operable Unit #1, dated August 31, 1990
D. Proposed Plan, Operable Units #2 and #3, dated December 17,
1992
E. General Notice Letter and Information Request, dated
August 28, 1992
F. Financial Statement of Oliver and Carrie Martin, dated
December 11, 1990
G. Itemized Cost Summary Report, dated December 21, 1992
H. Index to Administrative Record, Operable Units #2 and #3
I. Draft Volumetric Ranking of Waste Contributors, as of
November 14, 1992
J. Draft CERCLA RD/RA Consent Decree to be enclosed with notice
letters
K. Draft Statement of Work to be enclosed with notice letters
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f\\_E
S UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
'\«JP REGION. IV
345 COURTLAND STREET. N.E.
ATLANTA. GEORGIA 30365
JUN ] 4 1993
John C. Cruden, Chief
Environmental Enforcement Section
United States Department of Justice
Environment and Natural Resources Division
1425 New York Avenue
Room 13037
Washington, D.C. 20005
Re: Helena Chemical Company Site
Fairfax, Allendale County, South Carolina
Dear Mr. Cruden:
The purpose of this letter is to transmit to you the RD/RA pre-
referral litigation report and draft consent decree for the
above-referenced site, in accordance with the "Pre-Referral
Negotiation Procedures for Superfund Enforcement Cases"
memorandum, dated October 12, 1990. EPA intends to have a signed
Record of Decision by August 30, 1993. If you need any further
information at this time, please contact Rich Glaze, Assistant
Regional Counsel, at 404-347-2641, ext. 2274, or Bernie Hayes,
Remedial Project Manager, at 404-347-7791.
Sincerely,
^DVknj
John R. Barker
Waste Management Division
Enclosure
cc: William A. White, Enforcement Counsel (w/encl.)
Superfund Division, OE
Sally S. Mansbach, Director (w/encl.)
CERCLA Enforcement Division, OWPE
Robert R. Homiak (w/encl.)
Environmental Enforcement Section, DOJ
Printed on Recycled Paper
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ATTORNEY WORK PRODUCT
ENFORCEMENT CONFIDENTIAL
DO NOT RELEASE
PRE-REFERRAL LITI<3ATI0N REPORT
HELENA CHEMICAL SITE
I. SITE DESCRIPTION AND GENERAL SITE HISTORY
The Helena Chemical Company Site (the "Site") is located on
Highway 321 South, approximately one mile south of Fairfax, South
Carolina (Pop. 2247) in Allendale County. The Site is a 13.5
acre tract owned by Helena Chemical Company, bordered on the
north by a wooded wetland, on the east by a railroad track, on
the south by a plywood veneer plant and on the west by property
containing a municipal water supply well.
The Site is currently used as a distribution center for
prepackaged pesticides. Between 1971 and 1978, Helena used the
Site for formulating and distributing liquid and dry agricultural
insecticides. Blue Chemical Company owned and operated the Site
for the formulation and sale of pesticides from the mid 1960 's
until 1971. From the mid-1950's until the mid 1960's, Atlas
Chemical Company owned and operated the Site as a pesticide sale
and formulation business. Before the 1950's the Site property
was undeveloped.
The Site contains three standing buildings, a burned out
house, open land and an area once used as a landfill for wastes
disposed of on-Site. The northernmost building, currently used
as a warehouse, was once used to formulate liquid insecticides.'
It is currently used to store various prepackaged pesticides and
fertilizers that are sold to farmers. The southernmost building
was used to mix dry insecticides and is no longer being used.
The center building is a sales office and has historically been
used as such.
The Site formerly contained two 20,000 gallon solvent tanks
and several other tanks that were used to store pesticide
compounds. The solvent tanks were filled by pumping the solvents
through lines running under the northern formulation building to
the tanks.
Before 1978, the following chemicals were formulated at the
facility at various times: DDT, aldrin, dieldrin, chlordane,
benzene hexachloride (BHC), ethoprop (Mocap), toxaphene, methyl
parathion, ethyl p-nitrophenyl thionobenzene-phosphonate (EPN),
and disulfoton. To produce the insecticides, raw chemicals were
mixed with other ingredients, including diesel fuel, solvents,
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and clays. On-Site formulation ceased in 1978.
Pesticides, chlorinated solvents and 'other contaminants have
been found in on-Site soils and in the ground water beneath the
Site. The highest levels of contamination were found in the
vicinity of the building now used as a warehouse, near the old
landfill, and near the southernmost building in an area where
materials were formerly off-loaded from railroad cars. Pesticides
and other contaminants have also been found in on-Site surface
waters and in a wooded wetland area north of the landfill. A
more detailed description of the Site is set forth in the
Proposed Plan Fact Sheet dated May 1993 ("Proposed Plan"). See
Exhibit 1, p. 2.
II. PAST AND PROJECTED RESPONSE ACTION
In November 1980, the South Carolina Department of Health
and Environmental Control (DHEC) investigated the Site. DHEC
collected and analyzed soil samples that were found to contain
high levels of various pesticides. DHEC issued a Notice of
Violation to Helena in July 1981 for operating a waste disposal
facility in violation of South Carolina law. Helena and DHEC
entered into Administrative Consent Order No. 81-05-SW on October
1, 1981 (hereinafter, "DHEC Consent Order"), which required
Helena to submit a plan for the environmental evaluation and
remediation of the Site. The DHEC Consent Order and amendments
are attached as Exhibit 2.
Studies Helena conducted in compliance with the Consent
Order indicated that surface soils were heavily contaminated with
pesticides. Ground water analyses conducted as part of this
investigation did not confirm contamination discovered in earlier
sampling. Surface water samples, taken from water standing in
the wetland areas in the northern portion of the Site, showed
that the wetland was contaminated by Site-related pesticides.
Under the terms of an amendment to the Consent Order dated
March 12, 1984, Helena performed further remediation, which
consisted primarily of removing contaminated soil and disposing
of it in a permitted hazardous waste landfill. See Exhibit 2.
EPA completed a Hazard Ranking System analysis for the Site
in June 1987. Based on an aggregate HRS score of 50.2, EPA
listed the Site on the NPL. See 55 Fed. Reg. 6161 (February 21,
1990).
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In December 1988, EPA sent special notice letters to five
PRPs, inviting offers to participate in performing the RI/FS.1
See Exhibit 3. Of the PRPs to whom EPA seYit special notice
letters, only Helena offered to negotiate concerning performance
of the RI/FS.
In April 1989, EPA and Helena entered into an Administrative
Order by Consent (AOC), under which Helena agreed to conduct a
Remedial Investigation (RI) and Feasibility Study (FS) under EPA
oversight and to pay EPA oversight costs. See Exhibit 4. RI
field activity began in Hay 1989 and was completed in April 1992.
The FS was completed in December 1992. Summaries of the RI and
FS are set forth in the Executive Summaries of the RI and the FS,
See Exhibit 5, and in the Proposed Plan. See Exhibit 1, pp. 3-
15.
In April 1992, Helena removed approximately one thousand
cubic yards of contaminated soil from the Site. The removal was
not ordered by EPA, but was done at Helena's initiative in order
to avoid RCRA land disposal restrictions, which were to become
effective the following May.
The RI/FS documented the need for remedial action to be
taken to address contamination in soils and ground water and in
sediments found in an on-Site wetland. As described in the
Proposed Plan, EPA's preferred remedial alternative consists of
i) demolition of formulation buildings, ii) excavation of
contaminated soils iii) treatment on-Site of soils with a
combination of hydrolytic/photolytic dechlorination and
biological treatment, iv) ground water extraction, treatment and
disposal, and v) mitigation for damage to the wetland. See
Exhibit 1, p. 15.
Wetland mitigation will be undertaken in accordance with
Section 404 of the Clean Water Act, 42 U.S.C. § 1344 ("CWA"), and
the regulations promulgated under the statute.2 The statute and
1 These included Helena and corporations identified in the PRP
search as either current or former parent corporations of Helena
and their affiliates. Several individuals identified in the PRP
search as former owners and operators did not receive special
notice letters because they were not able to be found, not
considered liable, or were otherwise considered nonviable. See the
"The PRPs," below.
3 Fill material is a "pollutant" under Section 502(6) of the
CWA, 33 U.S.C. S 1362(6). Section 404 of the CWA requires a permit
for the discharge of fill material into waters of the United
States, which include wetlands. See 40 C.F.R. 230.3(8). Subpart
fi of 40 C.F.R. § 230 requires, as a prerequisite to issuing a
permit, that appropriate and practicable mitigation measures be
3
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regulations have been determined by Region IV to be relevant and
appropriate for the Site. Region IV made,this determination
because of the existence of a landfill on the Site that had been
placed in the wetland and subsequently abandoned in the 1960s.
Although Section 404 did not exist at the time of the fill, the
statute was determined to be "well suited" to the conditions
created by the fill, as required by the NCP.* Because it is
possible that landfill soils in the wetland must be removed to
achieve soil cleanup levels, the resultant disturbance of the
soil may create new fill in the wetland during performance of the
remedy. Because of this possibility, Section 404 requirements
are, arguably, applicable.4 See Exhibit 1, p. 9.
Shortly after issuance of the proposed plan, EPA intends
either to negotiate an Administrative Order on Consent with
Helena or to issue a Unilateral Administrative Order to the
company for further soil removal in specific highly contaminated
areas. The removal is needed to address the threat the soil
poses to Helena employees currently working on-Site. Although
such soils would ultimately be removed in the remedial action,
EPA believes the risks posed to workers on the Site justifies the
immediate removal of the contaminated media. The removal order
will be consistent with the remedial alternative selected in the
Proposed Plan, as required by the NCP. See 40 C.F.R. §
300.415(c).
undertaken to minimize potential adverse effects on the aquatic
ecosystem. 40 C.F.R. § 230.10(d). Subpart H, 40 C.F.R. § 230.70
et sea.. sets forth optional, nonexclusive mitigation options for
the harm caused by dredge and fill activities. These mitigation
requirements are also triggered for "after-the-fact" permits, which
are required when unpermitted fill has already been discharged into
a wetland at the time the permit is sought.
3 "Relevant and appropriate" requirements are defined in the
NCP as those that "while not 'applicable' to a . . . remedial
action . . . or other circumstance at a site, address problems or
situations sufficiently similar- to those encountered at the CERCLA.
site that their use is well suited to the particular site." 40
C.F.R. S 300.5
4 The NCP defines "applicable requirements" as "substantive
requirements . . . that specifically address a hazardous substance,
pollutant, contaminant, remedial action ... or other circumstance
found at a CERCLA site." 40 C.F.R. § 300.5. Thus, since fill may
be placed in the Site wetland during the implementation of the
remedy, the mitigation requirements of Section 404 are triggered.
4
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III. THE PRPs
The PRP search conducted for EPA by 60M Federal Programs
Corporation identified Helena as the current owner and operator
of the Site. Therefore, Helena is a liable party under Section
107(a)(1) of CERCLA, 42 U.S.C. 9607(a)(1). It also named as
possible PRPs i) the current and former parent corporations of
Helena and their affiliates,9 ii) former corporate owners and
operators of the Site,' and iii) non-corporate former owners of
Site property. See Exhibit 6, pp. 15-22.
Evidence collected in the PRP search and in 104(e) responses
shows that most of the remaining initially identified PRPs aire
either financially nonviable, not liable, or no longer exist.
For example, evidence shows that i) Atlas Chemical Company no
longer exists, ii) the affiliates and former affiliates of Helena
are not liable under current rules regarding parent/subsidiary
liability, (see "Defenses and other Considerations," below), and
iii) prior owners Bertha and W.F. Barnes owned the Site before
pesticides were formulated there. See, generally, Exhibit 6.
EPA currently intends to pursue only Helena in enforcing
remediation at the Site because the evidence strongly supports
Helena's liability for all response costs as the current owner
and operator of the Site. See CERCLA Section 107(a)(1), 42
U.S.C. § 9607(a)(1). Evidence supporting Helena's liability
includes: investigations conducted at the Site by DHEC, EPA and
Helena (see "Past and Projected Response Action," above);
Helena's response to EPA's 104(e) information request (see
Exhibit 7, in which the Company admitted ownership and operation
of the Company from 1970 to the present and admitted that it
manufactured pesticides using hazardous substances); and evidence
collected for the PRP search, such as records of real property
ownership and corporate status. See, generally, Exhibit 6. This
evidence confirms Helena's status as owner of the Site and
operator of the business conducted at the Site since 1971.
Region IV believes, based on past experience, that Helena
will be willing to perform the entire RD/RA and to pay past costs
and oversight costs. If it becomes evident that EPA will be
unable to fully recover response costs from Helena, the Region
will attempt to involve other PRPs, if possible.
sThese included Marubeni American Corporation and its parent
and Bayer USA Corporation and two affiliates. See Exhibit 6, pp.
17-18.
'Mitchell Insecticide Company, Atlas Chemical Company and Blue
Chemical Company.
5
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IV. DEFENSES AMD OTHER CONSIDERATIONS
There is no evidence in the record th'at the current or
former corporate affiliates of Helena and their affiliates
exercised control over the management and operations of Helena to
the extent necessary to make them owners or operators under
CERCLA. Absent evidence of such control, EPA would be unable to
establish a prima facie case against these PRPs. See, e.g., O.S.
v. Kavser-Roth Corporation. 724 P. Supp. 15 (D.R.I. 1989).
V. STATUTES OF LIMITATION/BANKRUPTCY COURT DEADLINES
These considerations do not apply in this case.
VI. RESPONSE COSTS
Total costs incurred at the Site as of February 28, 1993
were $303,253.65. Of this amount, Helena has paid $74,498 in
response to EPA demands for reimbursement of costs of overseeing
removal activities at the Site. The most recent EPA computer
generated cost summaries for the Site are attached as Exhibit 8.
EPA is currently reviewing the supporting cost documentation.
VII. ADMINISTRATIVE RECORD
EPA has compiled an Administrative Record file for this
Site. The record is located in EPA Region IV's library in
Atlanta, Georgia and at City Hall in Fairfax, South Carolina. An
index of the Administrative Record is attached as Exhibit 9.
VIII. DESIRED SCOPE OF RELIEF
EPA intends to negotiate a consent decree with the PRPs that
will provide for them to perform the RD/RA for the Site and to
pay all of EPA's past and future response costs for the Site.
IX. NATURAL RESOURCE DAMAGE TRUSTEES
EPA has contacted the trustees for the U.S. Department of
the Interior (DOI), the U.S. Department of Commerce/NOAA, DHEC,
and the South Carolina Wildlife and Marine Resources Department
(SCWMRD). DOI, DHEC and SCWMRD have expressed concern regarding
a wetland area on the Site. EPA has considered the comments of
the trustees in the preparation of the RI/FS and has invited
their participation in negotiation of an RD/RA consent decree
with Helena.
X. RELATED CRIMINAL INVESTIGATION. PROSECUTIONS OR CIVIL ACTIONS
There are no other actions or investigations involving this
Site.
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XI. PROPOSED PREREFERRAL STRATEGY
Region IV anticipates that the ROD will be completed and
signed by August 30, 1993. Following signing of the ROD,
negotiations will begin with the PRPs. The following schedule
shows proposed milestones for the negotiation of a consent decree
for RD/RA:
Public Meeting May 27, 1993
End of Public Comment Period June 3, 1993
Pre-Referral Litigation Report to HQ and DOJ June 4, 1993
Draft Statement of Work Completed July 15, 1993
ROD finalized and signed by Region IV August 30, 1993
Special notice letters issued September 7, 1993
Good faith offer due November 6, 1993
RD/RA Negotiation period concludes January 5, 1993
A draft consent decree (including a draft Statement of Work)
(hereinafter, "Consent Decree") is attached for review by EPA
Headquarters and the Department of Justice. See Exhibit 10.
This draft is based on the national "Model RD/RA Consent Decree."
Region IV requests that any comments be sent to the regional
attorney in sufficient time for Region IV to send the Consent
Decree to the PRPs with the Special Notice Letters.
XII. HO AND DOJ SUPPORT
The Region requests that DOJ and EPA Headquarters
participate in the negotiation of the Consent Decree. Since the
Region does not anticipate issues of national significance, the
Region requests Headquarters' concurrence with this pre-referral
litigation strategy. The Region is prepared to take the lead in
negotiating the Consent Decree.
7
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For Exkibf-Hj
SWT OP RKHTbtts -ta^A-h. Ji5eKte.
Exhibit
1.
Proposed Flan Fact Sheet
Exhibit
2.
DHEC consent decree
Exhibit
3.
Special notice letter for RI/FS
Exhibit
4.
Administrative order on consent for RI/FS
Exhibit
5.
Executive summaries of RI and FS
Exhibit
6.
PRP search report
Exhibit
7.
EPA 104(e) request and Helena's reply
Exhibit
8.
Cost Summaries
Exhibit
9.
Administrative record index
Exhibit
10.
Draft RD/RA consent decree
8
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^ JgjgJ $ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\ REGION
«< PROl*
mi o ] m 3A5 COURTUA.ND STREET. N.E
„ _ ATLANTA. GEORGIA 30(365
4RC
John C. Cruden, Chief
Environmental Enforcement Section
United States Department of Justice
Environment and Natural Resources Division
1425 New York Avenue
Room 13073
Washington, D.C. 20005
Re: Kalama Specialty Chemicals, Inc., Superfund Site
Beaufort, Beaufort County, South Carolina
Pre-Referral Litigation Report
Dear Mr. Cruden:
The purpose of this letter is to transmit to you the RD/RA pre-
referral litigation report for the above-referenced Site, in
accordance with the "Pre-Referral Negotiation Procedures for
Superfund Enforcement Cases" memorandum, dated October 12, 1990.
EPA is expected to sign a Record of Decision for this Site in
August, 1993. If there is any additional information you need at
this time, please contact Seth Bruckner, Assistant Regional
Counsel, at 404-347-2641, ext. 2268, or Steve Sandler, Remedial
Project Manager, at 404-347-7791.
Sincerely,
John R. Barker
Regional Counsel
ft,
Joseph R. Franzmathes
Director
Waste Management Division
Enclosure
cc: William A. White, Enforcement Counsel (w/encl.)
Superfund Division, OE
Sally S. Mansbach, Director (w/encl.)
CERCLA Enforcement Division, OWPE
Karen Dworkin (w/encl.)
Environmental Enforcement Section, DOJ
Printed on Recycled Paper
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ENFORCEMENT CONFIDENTIAL
ATTORNEY/CLIENT PRIVILEGE
DO NOT RELEASE
PRE-REFERRAL LITIGATION REPORT
KALAMA SPECIALTY CHEMICALS, INC.*, SITE
Beaufort County, South Carolina
I. BACKGROUND
A. Site History
The Kalama Specialty Chemicals, Inc., Site (the Site) is located
on Port Royal Island in the Low Country area o£ South Carolina,
approximately four miles north of the city of Beaufort, South
Carolina, where groundwater is contaminated by surface soils and
sediments. The western edge of the Site is bordered by US
Highway 21, and the eastern edge is bordered by the Seaboard
Coast Line Railroad. Across US Highway 21 from the Site is the
U.S. Marine Corps Air Station (HCAS) Beaufort.
The Site consists of two parcels of property, both currently
owned by Kalama Specialty Chemicals, Inc., (KSCI), which is owned
by it8 parent company, Kalama Chemical, Inc. (KCI). The first
parcel of property is a sixteen (16) acre tract of land that was
used for chemical manufacturing and repackaging activities. The
second parcel of property is a vacant thirty-four (34) acre tract
of land, adjacent to the first tract, previously operated as a
mobile home park known as the Benton Trailer Park, but later
purchased by KSCI in 1980 when contamination was discovered
there.
Operations began at the Site in 1973 by a chemical company known
as Vega Chemicals (Vega), who leased the sixteen (16) acre tract
from the Beaufort County Development Corporation. Vega spent
approximately two years constructing its operating facilities at
the Site, and began full scale operations in 1975.
In 1976, KSCI purchased a financial interest in Vega, and later
purchased the balance of the company in 1978. KSCI purchased the
sixteen (16) acre tract in 1979 from the Beaufort County
Development Corporation. KSCI continued to operate at the Site
until 1983, when it closed its operations. The Site remained
inactive until 1986, when KSCI leased the sixteen (16) acre tract
to a local contractor, Floyd Sears Construction, who used the
Site for the storage and staging of heavy equipment, as well as a
variety of materials, such as preserved timbers (telephone
poles), old oil tanks, construction debris, and concrete from the
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MCAS Beaufort. Floyd Sears Construction leased the property
until 1989, at which point the Site was abandoned.
The former operations area of the Site has been fenced, with "No
Trespassing" signs posted identifying the property as a Superfund
site. The fencing is currently inspected regularly by a local
security company.
B. Operations at the Site
The Site was operated by both Vega, and later KSCI, primarily in
the production of specialty chemicals (a wide range of chemicals
produced in small, special-order batches that manufacturing firms
or larger chemical producers utilize in their own production
systems). The principal product manufactured at the Site was
known as Krenite, an herbicide made under contract from the
DuPont Company. The wastes from the Site included wastewater,
comprised of cooling water, runoff, boiler blowdown, and pump
seal leakage and spillage, which was disposed of on-site, and
other non-aqueous and organic wastes, which were disposed of at
approved off-site incineration or disposal facilities.
C. Releases of Hazardous Substances
During the period of 1973 through 1975, wastewater from the
facility was discharged from the production area of the facility
to a small depression in the land, where the wastewater then
percolated into the ground. Between 1976 and 1979, the
wastewater was treated on-site by a land application system
consisting of an aerated, bentonite-lined, thirty-three (33) foot
holding pond and tile field (Exhibit A). A lift station pumped
this wastewater from the operations area to the holding pond via
an underground six (6) inch diameter FVC pipe. The wastewater
was stabilized in the pond and discharged to a large tile field,
in an attempt to percolate stabilized wastewater to the water
table aquifer in order to prevent its migration to surface waters
off-site.
In addition to release of wastewater at the Site, other releases
may have occurred because of on-site incineration which took
place at the Site during the 1970s. Non-chemical solid waste
material (cardboard, pallets, and fiber containers) was
periodically burned in a depressed location beyond the fence line
west of the operations area. Additionally, a methanol/ethanol
waste stream, possibly containing trace amounts of ethyl chloride
from the Krenite manufacturing process, was burned in a
bentonite-lined pit on-site. The pit was also later used by
Kalama for fire-fighting training during this period. The
location of the pit, which was reportedly filled in January,
1979, has not been precisely determined.
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In January 1979, there was an explosion and fire at the Site
which resulted from a laboratory experiment (Exhibit B). The
explosion and fire damaged a number of reactors and vessels
containing raw materials/ intermediates and products associated
with other processes, which ran off the reactor pad principally
to the west and northwest (See Exhibit A). It was estimated that
over 200,000 gallons of water and fire control foam were used to
fight the fire on the pad, and this fire water, contaminated with
organics from the ruptured vessels, also ran off the operations
area and pooled in low areas west and northwest of the reactor
pad (See Exhibit A). The majority of the pooled fire water
(contained by an earthen dam) was recovered, and pending off-site
disposal, was held in tanks, pools, and tankers. An effort was
made to hold some of the material in the wastewater holding pond,
but due to a plug failure, this material seeped into the tile
field.
Following the explosion and fire, use of the wastewater treatment
system was curtailed during plant rebuilding and start-up. Any
washdown or wastewater sent to the pond was held and pumped into
tankers for off-site disposal. In 1980, following abandonment of
the original bentonite-lined pond and tile field, KSCI
constructed a larger, plastic-lined holding lagoon. This pond
had no discharge; wastewater was held for off-site disposal.
This pond waB utilized until 1983, when KSCI closed its
operations.
Soils at the Site were analyzed by the State of South Carolina,
and were found to be contaminated with benzene, toluene,
ethylbenzene and xylenes, 1,2-dichloroethane, acetone, methylene
chloride, lead, nickel, and mercury, with especially high
concentrations detected in areas which received substantial
runoff from the fire and explosion in January 1979. Groundwater
contamination at the Site, which has the potential of affecting
the Floridan aquifer, consists of ethylbenzene and xylenes, 1,2-
dichloroethane, acetone, and methylene chloride.
D. Associated Cleanup Activities
During the 1970s, contamination problems at the Site came to the
attention of the State of South Carolina (the State), and were
investigated by the South Carolina Department of Health and
Environmental Controls (SCDHEC), which ordered KSCI to install a
wastewater treatment system. Early inspections at the Site led
to the initiation of a groundwater monitoring program in 1976,
and the ^ discovery of buried drums at the Site in 1979. Further
inspections led to the decommission of the inadequate pond and
tile field system in 1980 (all sludge and contaminant structures
from these areas were sampled and disposed of in an approved
landfill, and are no longer evident), and the decommission of the
larger wastewater lagoon in 1983.
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In 1980, a Consent Order issued by SCDHEC as a result of frequent
releases of wastewater into the soils, required the
characterization of soil and groundwater quality at the Site, and
called for a cleanup of all identified contaminated areas. This
Consent Order was later amended to require KSCI to perform
studies on the extent to which soil and groundwater contamination
had occurred and to design plans to clean up the contamination.
Due to the presence of contaminants in soils and shallow
groundwater, and the potential impact of these contaminants on an
important primary aquifer, EPA formally; proposed the Site for
listing on the National Priorities List (NPL) (40 C.F.R., Part
300, Appendix B), on September 8, 1983. The Site was finalized
on the NPL by publication in the Federal Register on September
21, 1984, 49 Fed. Reg. 37083, Vith a Hazard Ranking System (HRS)
score of 59.9.
EPA and the State agreed that SCDHEC would have lead
responsibility for the disposition of the Site. From 1983 to
1986, SCDHEC pursued the necessary studies and remedial
activities with KSCI under the SCDHEC Consent Order. Overall,
however, KSCI experienced difficulty in meeting schedules and
completing work assignments. In an attempt to resolve these
difficulties, the State turned the lead for the Site over to
EPA's Super fund Enforcement Branch in late 1986.
After reviewing the work done previously by KSCI under the SCDHEC
Consent Order, EPA determined that further study was needed to
determine the nature and volume of the waste, pathways by which
contaminants would move or present the risk of exposure to human
health and the environment, and the hydrologic relationship
between the upper shallow layer of groundwater and the deeper
aquifer. As a result of this determination, EPA entered into an
Administrative Order on Consent (AOC) (Exhibit C) with KSCI to
perform a Remedial Investigation/Feasibility Study (RI/FS) at the
Site under EPA's oversight on January 13, 1988. KSCI provided
EPA with its final RI report in January, 1993.
During the entire RI/FS process (a span of approximately five (5)
years), EPA has experienced difficulties in receiving approvable
documents from KSCI's contractor Post, Buckley, Schuh and
Jernigan, Inc., (PBS&J). Numerous submissions arrived late, or
arrived in piecemeal fashion. Additionally, in all reports
received prior to the final submission, PBS&J had claimed the
existence of a continuous clay confining layer between the soils
and deeper aquifer, the existence of which was disputed by both
the State and EPA. As a result, each revision submitted during
this long period, though somewhat more improved than the
previous, suffered from a fatal flaw due to the characterization
of the supposed clay layer.
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On December 14, 1992, EPA sent KSCI a letter informing it that
EPA would be taking back the Site, pursuant to the AOC, to
complete the RI/FS process due to the failure of KSCI to address
comments and concerns of both EPA and the State (Exhibit D).
Concurrently with the letter, KSCI was informed that, as part of
"Dispute Resolutions" section of the AOC, KSCI would be given the
opportunity to submit one final revised set of RI/FS documents
for EPA review within the twenty-eight (28) day period set forth
in the AOC. If this final set of documents was not approvable,
EPA would immediately begin work at the Site.'
Because KSCI did not wish for EPA to take over Site activities,
it retained an additional consultant and new counsel in order to
address any State or EPA concerns. KSCI was able submit its
final revision of the documents on schedule, and has removed or
reworded the language regarding a confining clay layer to EPA and
State satisfaction. As a result, EPA afid the State have finally
approved the documents, and are working toward the issuance of a
Record of Decision (ROD).
The Proposed Plan (the Plan) for the Site is expected to be
issued in June, 1993, as required by CERCLA Section 117(a),
42 U.S.C. S 9617. A copy of the Proposed Plan will be forwarded
as soon as it becomes available. The Plan will propose to
cleanup Site soils contaminated with volatile organic
contaminants (VOCs) and metals by excavation, volatilization, and
solidification, followed by replacement of the soils into the
excavation. In addition, the Plan will propose a scheme for
groundwater remediation through complete groundwater extraction
and treatment to Maximum Contaminant Levels (MCLs).
II. THE PRP AND THE EVIDENCE
The primary PRP at the Site is Kalama Specialty Chemicals, Inc.,
(KSCI), which is wholly owned by Kalama Chemicals, Inc., (KCI).
Pursuant to Section 107(a)(1) of CERCLA, 42 U.S.C. § 9607(a)(1),
KSCI is liable as the owner of a facility at which there has been
a release of a hazardous substance, and under CERCLA Section
107(a)(2), 42 U.S.C. S 9607(a)(2), KSCI is liable as an operator
of a facility at the time of disposal of hazardous substances.
KSCI'a willingness to conduct the RI/FS, general cooperation
(notwithstanding the actions of their contractors), and
indications signalling its intention to carry out the remedial
action phase suggest that there will not be a dispute regarding
CERCLA liability.
A consolidated financial statement (as of June 30, 1991) provided
by KCI shows the company to be viable, and capable of financing
the entire cleanup (Exhibit E).
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III. LEGAL DEFENSES AND EQUITABLE CONSIDERATIONS
A. Legal Defenses
The liability of KSCI (and KCI) is straightforward. Evidence
exists showing KSCI as an operator at the Site at the time of the
release of hazardous substances (not simply through the
facilities operation, but also because of the fire and
explosions, and the resulting releases), and as the present owner
of the Site from which there have been documented releases of
hazardous substances. Neither KSCI nor KCI have ever contested
their CERLGA liability.
B. Equitable Considerations
There are no significant equitable considerations for this Site.
IV. STATUTE OF LIMITATIONS
The statute of limitations is not an issue in this case, due to
the ongoing enforcement actions at the Site. EPA has not
expended any resources in addition to the oversight costs
included in the January 13, 1988, Administrative Order on
Consent, therefore, even if the Statute were tolling, all past
costs have been addressed through the AOC.
V. RESPONSE COSTS
According to the most recent cost documentation, EPA has expended
a total of $539,251.89 through April 30, 1993 (Exhibit F) at the
Site. Pursuant to the Administrative Order on Consent (AOC) for
RI/FS entered into in this case, KSCI agreed to pay EPA and EPA
contractor oversight costs incurred prior to, and in connection
with, the AOC. The Region has repeatedly billed KSCI, and has
had some difficulty in receiving payment in a timely manner. To
date, EPA has recovered $224,245.20, plus an additional $4,695.60
in interest, leaving an outstanding balance of $315,006.69. The
Region will either bill KSCI for this amount after the end of the
fiscal year, or reimbursement will be addressed during the RD/RA
negotiations.
VI. THE ADMINISTRATIVE RECORD
EPA has compiled an Administrative Record (the Record) for the
Site, and will release it for public comment and review
concurrently with the Proposed Plan. The Record will be located
in EPA-Region IV's Library in Atlanta, Georgia, and a copy will
be sent to Beaufort County Library, 710 Craven Street, Beaufort,
South Carolina, 29902. Due to the length of the Record, it is
not being made an exhibit to this litigation package; however the
index to the Record is attached (Exhibit G).
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VII. THE REMEDIAL ACTION
EPA plans to negotiate a consent decree with KSCI to finance and
perform the RD/RA portion of the response action. The Record of
Decision (ROD), which the Region anticipates to be final by the
fourth quarter of fiscal year 1993, will most likely provide for
the treatment of soils contaminated with VOCs and metals by
excavation/ volatization, and solidification, followed by
replacement of the soils into the excavation.-
Contaminated groundwater will be contained and treated using
extraction wells across the source areas of contamination. The
contaminated water from these extraction wells will be treated
with a combination of chemical, precipitation/filtration, air
stripping, and activated carbon technology, and the treated water
will be discharged to either an on-site,,sprayfield, an
infiltration gallery, or to a ditch on-site.
EPA anticipates that the preferred remedial action for this Site
will not be controversial. The preferred remedy is strongly
supported by the Feasibility Study, and is of moderate cost
compared to the other alternatives. Based on the comments
received to date, EPA also does not anticipate any opposition to
the remedy by the residents of the community or the general
public.
A copy of the Final ROD will be forwarded to EPA Headquarters
(HQ) and the United States Department of Justice (DOJ) as soon as
it becomes available.
VIII. NATURAL RESOURCE TRUSTEES
Both the United States Department of the Interior (DOI) and the
State of South Carolina were contacted prior to the beginning of
any remedial action at the Site. Both the State and DOI will be
notified of negotiations with potentially responsible parties
(PRPs) regarding the implementation of the remedial design and
remedial action for the Site.
IX. RELATED CRIMINAL INVESTIGATIONS, PROSECUTIONS, OR CIVIL
ACTIONS
There are no other related proceedings relevant to this Site.
X. PRE-REFERRAL SETTLEMENT STRATEGY
A. Timetable
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The following schedule details the proposed milestones for the
negotiation of a consent decree for this Sites
Event Date
Proposed Plan released June 18, 1993
Pre-referral Litigation Report to DOJ/HQ Mid-June, 1993
ROD finalized and signed by Region IV September, 1993
RD/RA Notice Letters issued September, 1993
RD/RA good faith offer due November, 1993
RD/RA negotiations conclude, January, 1994
Decree lodged
B. Alternative Types of Settlements
Because only one PRP has been identified with the Site, a de
minimis settlement is not anticipated. EPA also does not
anticipate entering into any discussions with the PRPs regarding
a mixed funding type of settlement. KSCI, and their parent
company KCI, appears to have sufficient funds to undertake the
RD/RA and, to date, has made no claims regarding inability to pay
for the cleanup action.
C. Proposed Draft Consent Decree
The Region intends to issue Special Notice Letters under CERCLA
Section 107, 42 U.S.C. § 9607, and use the national Model CERCLA
RD/RA Consent Decree (OSWER DIRECTIVE #9835.17) to initiate
negotiations. A draft Consent Decree, modified as much as
possible for this Site, is included in this package (Exhibit H).
A copy of the regional draft Model Statement of Work (SOW) that
will be the basis for the draft SOW for this Site, is also
attached (Exhibit I). A site-specific draft SOW will be
forwarded to HQ and DOJ as soon as it is available.
XI. LEGAL, POLICY, AND STRATEGIC CONSIDERATIONS
As mentioned above, the Region has had some past difficulty in
working with the contractors hired by the PRP, and to some
degree, with the PRP itself. These difficulties have ranged from
failure to timely and adequately submit documents and payments,
to failure to adequately address EPA and State concerns and
comments. It should be noted, however, that the PRP, when faced
with a strong enforcement threat to take the Site back,
reaffirmed its commitment to cleaning up the Site by retaining
additional consultants and counsel, and UBed these new resources
to address all EPA'a concerns.
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As a result, it is important to stress the requirement of stiff
stipulated penalties in any proposed settlement, in order to
prevent any future needless delays, which have plagued this Site
in the past. The AOC governing the RI/FS failed to include stiff
penalties, and therefore only the threat of taking the Site back
was adequate to insure compliance.
Additionally, it may be necessary to require the PRP to retain a
different contracting group for any RD/RA work, because of
PBS&J's prior performance.
XII. EPA HEADQUARTERS AND REGIONAL SUPPORT
Since the Region does not anticipate any issues of national
significance to arise in this case, Region IV will take the lead
in negotiating this Consent Decree. The DOJ's resources should
not be necessary beyond those normally expended when assisting a
Region during negotiations. According to the memorandum
"Revision of CERCLA Civil Judicial Settlement Authorities Under
Delegations 14-13-3 and 14-14-E," OSWER Directive No. 9012.10-a,
June 17, 1988, the Region anticipates that thiB settlement will
not require HQ concurrence pursuant to Waiver of Concurrence
Requirements A.l. The Region requests HQ consultation, if
necessary, during the negotiations.
XIII. REGIONAL CONTACTS
The Regional Attorney assigned to the Site is Seth Bruckner (404)
347-2641, ext. 2268. The Remedial Project Manager for the Site
is Steve Sandler (404) 347-7791.
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LIST OF EXHIBITS
A. Study Area Hap Showing Operational Features of Kalama
Specialty Chemical, Inc., while the facility was in
operation (1979).
B. Reproduction of photograph showing efforts to extinguish
the fire and explosions which took place at Kalama Specialty
Chemicals, Inc., (January, 1979).
C. Administrative Order On Consent entered into between U.S.
EPA and Kalama Specialty Chemicals, Inc., regarding the
performance of the Remedial Investigation and Feasibility
Study (January 13, 1988).
0. Letter from Joseph Franzmathes, Director, Haste Management
Division, U.S. EPA Region IV, informing Kalama Specialty
Chemicals, Inc., of EPA's intention to complete RI/FS work
at the Site (December 14, 1992).
E. Consolidated Financial Statements for Kalama Chemical, Inc.,
(June 30, 1991).
F. Superfund Cost Documentation for the Kalama Specialty
Chemical Inc., Site (May 16, 1993).
G. Administrative Record Index for the Kalama Specialty
Chemical Inc., Site (June 9, 1993).
H. Draft RD/RA Consent Decree without appendices.
1. Draft Statement of Work.
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Sr4>
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
4RC
REGION IV
345 COURTLAND STREET. N.t.
ATLANTA. GEORGIA 30365
w. o 2 m
John C.-Cruden, Chief
Environmental Enforcement Section
Environment and Natural Resources Division
United States Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044
Re: Rochester Property Superfund Site. Travelers Rest.
Greenville County, South Carolina, Pre-Litigation Report
Dear Mr. Crudfen:
The purpose of this letter is to transmit the enclosed RD/RA pre-
referral litigation report for the above-referenced Site, in
accordance with the memorandum "Pre-Referral Negotiation
Procedures for Superfund Enforcement Cases," dated October 12,
1990. A draft Consent Decree, based upon the June 21, 1991,
National Model RD/RA Consent Decree, is included. Also, the
Model Regional Statement of Work (SOW) is included.
If any additional information is needed at this time, please
contact Mark M. Davis, Assistant Regional Counsel, at (404) 347-
2641, extension 2271, and/or Sheri Panabaker, Remedial Project
Manager, at (404) 347-7791.
Sincerely,
Joseph R. Franzmathes
Director
Waste Management Division
Enclosures
cc: William A. White, Enforcement Counsel (w/encl.)
Superfund Division, OE
Sally S. Mansbach, Director (w/encl.)
CERCLA Enforcement Division, OWPE
John R. Barker
Regional Counsel
^ a.
Printed on Recycled Paper
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- 2 -
Karen Dworkin (w/encl.)
Environmental Enforcement Section, DOJ
"t
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURfLAND STREET.fN.E.
ATLANTA. GEORGIA 30365
W 2 8 1993
John C. Cruden, Chief
Environmental Enforcement Section
United States Department of Justice
Environment and Natural Resources Division
1425 New York Avenue
Room 13037
Washington, D.C. 20005
Re: Stauffer Chemical Cold Creek and LeMoyne NPL Sites
Operable Unit 3, Cold Creek Swamp
Mobile County, Alabama
Dear Mr. Cruden:
The purpose of this letter is to transmit to you the RD/RA pre-
referral litigation report and draft consent decree for the
above-referenced sites, in accordance with the "Fre-Referral
Negotiation Procedures for Superfund Enforcement Cases"
memorandum, dated October 12, 1990. EPA intends to have a signed
Record of Decision by August 15, 1993. If you need any further
information at this time, please contact Andrew J. Harrison, Jr.,
Assistant Regional Counsel, at (404) 347-2641, extension 2264, or
Joanne fienante, Remedial Project Manager, at (404) 347-2643.
Sincerely,
John R. Barker
Regional Counsel
C^-c- fl ,
Joseph R. Franzmathes
Director
Waste Management Division
Enclosure
cc: William A. White, Enforcement Counsel (w/encl.)
Superfund Division, Office of Enforcement
Sally S. Mansbach, Director (w/encl.)
CERCLA Enforcement Division, OWPE
Robert R. Homiak (w/encl.)
Environmental Enforcement Section, DOJ
(sszz)
Printed on Recycled Paper
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ENFORCEMENT CONFIDENTIAL
ATTORNEY/CLIENT PRIVILEGED
DO NOT RELEASE
PRE-REFERRAL LITIGATION REPORT
ROCHESTER PROPERTY SOPERFDND SITE
Travelers Rest:, Greenville County, South Carolina
I. BACKGROUND
A. Description
The Rochester Property Superfund Site (the Site), is located on a
piece of residential property in Travelers Rest, Greenville
County, South Carolina, a small town approximately ten (10) miles
northwest of the city of Greenville, South Carolina.
The Site is approximately 300 feet north of County Road 268 (also
known as Ledbetter Road) and approximately one-quarter mile east
of County Road 102. The Site property itself is approximately
4.5 acres within which, waste was disposed into four (4) separate
trenches located inside a 0.6 acre fenced area. The northern
portion of the Site is a pine and deciduous forest, while the
southern portion of the Site is a former open field that has been
planted with pine trees (Exhibit A, Figure 1-1).
The Site is located on a hill between two (2) small streams. An
unnamed tributary that flows eastward and leads to Armstrong
Creek borders the Site to the north and east (Exhibit A,
Figure 1-1).
Another small stream borders the Site to the south. This small
stream flows eastward and discharges into the unnamed tributary
that leads to Armstrong Creek approximately 400 feet east of the
Site (Exhibit A, Figure 1-1). Site surface elevations range from
1010 feet above mean sea level (MSL) at the east end of the Site,
to 1047 feet above MSL at the west end of the Site (Exhibit A,
page 3).
B. Site History
In September 1971, Thomas J. Rochester, the original owner of the
Site (now deceased), underwent a back operation that left him in
poor health and unable to work for an extended period of time.
During this period, Steve Blackwell, an occasional truck
repairman for Polymer Industries, Inc. (Polymer Industries), was
approached by Polymer Industries employees regarding wastes the
company needed to dispose of. Polymer Industries, an adhesive
manufacturing company, was owned by Philip Morris Industrial,
Inc. (Philip Morris), through its subsidiary Colonial Heights
Packaging Inc. (Colonial Heights).
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Mr. Blackwell had no land on which to bury the wastes, but
through his brother-in-law, Joe Ledbetter, Mr. Blackwell
discovered that Thomas J. Rochester had land he was not using.
At the time, Joe Ledbetter was starting a backhoe business, and,
as a neighbor of Thomas J. Rochester, knew that Mr. Rochester was
in need of money due to his inability to work. Thomas J.
Rochester reached an agreement with Polymer Industries to allow
the waste to be buried on his land (Exhibit F, page 8).
In March 1972, Mr. Ledbetter dug four (4) trenches on the
Rochester property with his bacldioe into which Polymer Industries
disposed of wood glue, print binders, powder materials, natural
guar gums, adhesive for food packages, and adhesive restick for
envelopes. Each of the four (4) trenches had dimensions of
approximately forty (40) feet long, by three (3) feet wide, by
ten (10) feet deep. After Polymer Industries concluded its one-
time disposal, Mr. Ledbetter covered the four (4) trenches with
dirt using his backhoe (Exhibit F, page 8).
C. Releases of Hazardous Substances
The South Carolina Department of Health and Environmental Control
(SCDHEC) began site investigations on June 12, 1984, with initial
sampling on the Rochester Property (Exhibit F, Appendix A-3) . On
November 9, 1984, SCDHEC performed a site inspection that
included sampling of the waste, the surface and subsurface soils,
the surface water, and the groundwater in the area (Exhibit F,
Appendix A-4). Additional investigations were performed in
August 1987, and February 1988, by Colonial Height's consultant,
RMT, Inc., and by EPA'a contractor, NUS Corporation, in June 1988
(Exhibit A, page 3).
Based on the analysis of the waste collected by SCDHEC, EPA
ranked the Site and included it on the National Priorities List
Proposed Update in the Federal Register, Vol. 51, No. Ill, on
Tuesday, June 10, 1986. The Site was added to the National
Priorities List, pursuant to Section 105 of CERCLA, 42 U.S.C.
§ 9605, on October 4, 1989, with a Hazard Ranking Score of 41.34
(Exhibit C, page 5).
Pursuant to an Administrative Order on Consent for a Removal
Action signed by EPA and Colonial Heights, the parent company of
Polymer Industries, Docket Number 89-09-C, on June 5, 1989,
Colonial Heights excavated the buried waste and disposed of it
off-site at a secure hazardous waste landfill in January 1990
(Exhibit D).
Other than Polymer Industries' one-time waste disposal into the
four (4) trenches on the Rochester Property, no other wastes are
known to have been disposed at the Site (Exhibit E).
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- 3 -
O. Associated Cleanup Activities
An Administrative Order on Consent for a Remedial Investigation
and Feasibility Study (RI/FS) between EPA and Colonial Heights,
Docket Number 92-04-C, was signed by the Waste Management
Division Director on February 19, 1992 (Exhibit C).
The RI investigated the nature and extent of contamination on and
near the Site, and defined the potential risKs to human health
and the environment posed by the Site. A total of forty-three
(43) soil, twenty-nine (29) groundwater, eleven (11) surface
water, and five (5) sediment samples were collected at the Site
(Exhibit A, page 5).
Three (3) contaminants of concern, trichloroethene (TCE)
manganese, and bis(2-ethylhexyl) phthalate, were detected in the
groundwater in the shallow portion of the aquifer. TCE levels
ranged from the detection limit (normally 0.010 mg/1), to 0.180
mg/1. Manganese levels ranged from the detection limit, to 1.39
mg/1. TCE concentrations detected during all the sampling events
in three (3) of the thirteen (13) wells, violated the Maximum
Contaminant Levels (MCLs)' for this contaminant. The manganese
levels in five (5) out of thirteen (13) wells, exceeded the risk
number that was established in the Baseline Risk Assessment
(Appendix A, page 5).
Bis(2-ethylhexyl) phthalate was detected in two (2) wells during
the first sampling event; 0.033 mg/1 (though the duplicate was
0.013 mg/1) in one well, and 0.013 mg/1 in the other well.
During the second sampling event, bis(2-ethylhexyl) phthalate was
detected in only one well at 0.009 mg/1. It was not detected in
any wells during the third sampling event, and was detected in
the blanks for all the sampling events. The MCL for bis(2-
ethylhexyl) phthalate is 0.005 mg/1.
Groundwater flows toward the northeast and the unnamed creek
located north of the Site. It is believed that the surficial
groundwater discharges to the unnamed creek (Exhibit A, page 5).
Surface water samples from the unnamed creek, located northeast
of the Site, showed TCE levels at 0.016 mg/1 at one location, and
0.005 mg/1 at a second, location. Extremely low levels of two (2)
other volatile organic compounds, below 0.005 mg/1, were detected
in one location each. The TCE level is below the Federal Surface
Water Criteria of 21.9 mg/1. No other types of contaminants were
detected in the creeks (Exhibit A, page 5).
Insignificant levels of various substances were detected in the
surface soil and sediment samples. The Baseline Risk Assessment
determined that there was no current or future risk from the
compounds detected in these media, because the levels did not
exceed background levels for the inorganics, and were primarily
below 0.5 mg/1 for the organics (Exhibit A, page 5).
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- 4 -
The Baseline Risk Assessment described the risks to human health
and the environment which wouid result if the contamination
present at the Site is not cleaned up. The Baseline Risk
Assessment considered the present and future population living on
the Site (in this case, there are no current residents living on-
site)/ plus visitors to the Site (nonresidents). The Baseline
Risk Assessment determined that the only pathway present at the
Site, from the likely future use scenario, consists of exposure
through 'ingestion of the contaminated groundwater (Exhibit A,
page 6).
Carcinogenic risk and noncarcinogenic Hazard Index (HI) values
were calculated for both the current land use scenario, with
residents on and near the Site, and the anticipated future land
use scenario, which is residential use. The Baseline Risk
Assessment determined that the total cancer risk (using
Reasonable Maximum Exposure) for the current residential scenario
was less than 1 x 10~6. Therefore, the Site does not pose an
unacceptable cancer risk under the current exposure scenario.
The total HI for the current resident was 0.038. This HI is well
below the 1 value level of concern for noncarcinogens and
demonstrates that the Site does not pose an unacceptable non-
carcinogenic risk under the current exposure scenario evaluated
in the Baseline Risk Assessment (Exhibit A, page 6).
The Baseline Risk Assessment also determined that the total
cancer risk for the future residential scenario was 6.8 x 10~5.
This risk level is within the EPA acceptable risk range (1 x 10 "4
to 1 x 10~6). However, EPA determined that a baseline risk level
less than 10"4 ( i.e., a risk between 10~4 and 10~6) is
unacceptable due to Site-specific conditions, and that remedial
action is warranted (Exhibit A, page 6).
EPA determined that Remedial Action was warranted because the
future land use will probably be residential, and because MCLs
were exceeded for two (2) organic contaminants. The HI for the
future residential scenario was 8.9 for an adult. This level
exceeds the acceptable HI of 1.0. The majority of the non-
carcinogenic risk is attributable to the ingestion of manganese
in the groundwater (Exhibit A, page 7).
II. IDENTITY AMD LIABILITY OF THE POTENTIALLY RESPONSIBLE
PARTIES (PRPs)
Liability under the Comprehensive Environmental Response
Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C.
§ 9601 et seq., as amended, is based upon the establishment of
the following elements: (!) a release or threatened release of a
hazardous substance has occurred; (2) the release or threatened
release was from a facility; and (3) the defendants are
potentially responsible parties (PRPs) as defined by CERCLA
Section 107(a), 42 U.S.C. § 9607(a).
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Studies have documented the release of hazardous substances at
the Site. The RI/FS indicated the presence of trichloroethene
(TCE), bis(2-ethylhexyl) phthalate, and manganese in the
groundwater at the Site (Exhibit A, page 5). Each of these
contaminants is a hazardous substance as that term is defined in
Section 101(14) of CERCLA, 42 U.S.C. § 9601(14).
Section 101(9) of CERCLA defines a "facility" as, "... any site
or area where a hazardous substance has been deposited, stored,
disposed of, or placed, or otherwise come to be located . . . .n
42 U.S.C. § 9601(9). In March 1972, Thomas J. Rochester, now
deceased, gave permission to Polymer Industries to dispose of the
adhesive wastes into the four (4) trenches on his property.
Therefore, the Rochester Property Site is a facility as that term
is defined in CERCLA Section 101(9), 42 U.S.C. § 9601(9).
Pursuant to Section 107(a) of CERCLA, 42 U.S.C. § 9607(a),
potentially responsible parties include: (1) current owners or
operators of a facility; (2) past owners or operators who owned
or operated the facility at the time hazardous substance were
disposed at the facility; (3) persons who arranged for the
disposal of hazardous substances (usually known as generators);
and (4) persons who transported hazardous substances and selected
the site for disposal.
The following discussion addresses the identity and liability of
the PRPs.
A. Current Owner
1. Colonial Heights Packaging, Inc., a subsidiary of
Philip Morris Industrial, Inc.
Contacts Ms. Nancy K. Peterson
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-4497
(414) 277-5517
At the time of the adhesive waste disposal in 1972, Colonial
Heights, a subsidiary of Philip Morris Industrial, Inc. (Philip
Morris), owned Polymer Industries. On August 2, 1982, Colonial
Heights sold Polymer Industries to Morton Thiokol, Inc. (Morton
Thiokol).
Colonial Heights, acquired the Site property on March 19, 1991,
when Frederick and Reta Richards sold the property to its
subsidiary, Carolina Properties, Inc., of Greenville, South
Carolina, for $13,000.00 (Exhibit E, page 2).
According to the attorney for Colonial Heights, who was contacted
by Region IV attorney Wayne Lee, Carolina Properties, Inc-. , was
set up by Colonial Heights as a subsidiary for the sole purpose
of purchasing the Site property (Exhibit E, page 2). Carolina
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- 6 -
Properties, Inc., was incorporated on October 19, 1990, however,
there is no telephone listing for Carolina Properties in
Greenville, South Carolina (Exhibit E, pag^ 2).
Colonial Heights, as the parent company of Carolina Properties,
is the current owner of the Site property, and under CERCLA
Section 107(a)(1), 42 U.S.C. § 9607(a)(1), is jointly and
severally liable for all the response costs at the Site.
In addition. Colonial Heights, owned Polymer Industries in March
1972, when Polymer Industries arranged for the disposal of its
adhesive waste into the four (4) separate trenches on the
Rochester Property. Polymer Industries is a generator under
CERCLA Section 107(a)(3), 42 U.S.C. § 9607(a)(3), therefore.
Colonial Heights, as the parent company of Polymer Industries, is
liable for the waste that Polymer Industries dumped into the four
trenches on the Rochester Property,as a generator of hazardous
waste pursuant to CERCLA Section 107(a)(3), 42 U.S.C.
§ 9607(a)(3).
For these reasons, Region IV recommends that a CERCLA Section
122(e), 42 U.S.C. § 9622(e), special notice letter be issued to
Colonial Heights, a subsidiary of Philip Morris, requesting that
Colonial Heights participate in negotiating a Consent Decree with
EPA and DOJ to perform or finance RD/RA activities, and pay EPA
for all past and future response costs at the Site. Colonial
Heights has not previously contested its liability and has
indicated that it will submit a good faith offer to participate
in RD/RA Consent Decree negotiations.
B. Past Owners
1. Thomas J. and Mary Lou Rochester
Keeler Mill Road, Route 2
Marietta, South Carolina
(803) 834-8760
Thomas J. and Mary Lou Rochester are the past owners of the land
on which the Site is located. Mr. Rochester, an industrial
laborer, died on January 12, 1990 (Exhibit E, page 1). According
to the PRP search report dated June 1986, Thomas J. Rochester had
a back operation in late 1971 that left him unable to work and
without any source of income (Exhibit F, page 10). For this
reason, he entered into the waste burial transaction with the
unidentified representatives from Polymer Industries.
According to the PRP search report, it is estimated that Mr.
Rochester received approximately three hundred dollars in
exchange for allowing Polymer Industries to bury the wastes on
his property (Exhibit F, pages 11 and 12).
Region IV does not recommend that CERCLA Section 122(e),
42 U.S.C. § 9622(e), special notice letters be issued to Mary Lou
Rochester, the surviving spouse of Thomas J. Rochester and the
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joint owner of the Site property at the time of the waste
disposal in 1972, because from current evidence, it appears that
Mary Lou Rochester is not viable to perform or finance the RD/RA
activities at the Site.
2. Thomas L. "Larry" Rochester
(Address unknown)
On June 18, 1981, Thomas J. Rochester, the owner of the property
when Polymer Industries disposed of its adhesives waste at the
Site, transferred the property to his son, Thomas L. Rochester.
On June 3, 1982, Thomas L. Rochester transferred the property to
his sister and brother-in-law, Reta and Frederick Richards
(Exhibit F, page 5). EPA has no evidence that hazardous waste
was disposed at the Site at any time during Thomas L. Rochester's
ownership.
Region IV does not recommend issuing special notice letters for
the RD/RA pursuant to CERCLA Section 122(e), 42 U.S.C. § 9622(e),
to Thomas L. Rochester because it has not found any evidence that
hazardous waste was disposed while Thomas L. Rochester owned the
property.
3. Frederick and Reta Richards
3IB Pinecroft Drive
Taylors, South Carolina 29687
(803) 268-0798
On June 3, 1982, Thomas L. Rochester, sold the Site property to
Frederick and Reta Richards, his brother-in-law and sister
(Exhibit F, Appendix E-2). On March 19, 1991, Frederick and Reta
Richards sold the property to Carolina Properties, Inc., of
Greenville, South Carolina, for $13,000.00 (Exhibit E, page 2).
EPA has no evidence that hazardous waste was disposed at the Site
at any time during Frederick and Reta Richards ownership.
Region IV does not recommend issuing special notice letters for
the RD/RA pursuant to CERCLA Section 122(e), 42 U.S.C. § 9622(e),
to Frederick and Reta Richards because it has not found any
evidence that hazardous waste was disposed while Frederick and
Reta Richards owned the property.
C. Generator
1. Polymer Industries, Inc.
A subsidiary of Morton Thiokol, Inc.
2 North Riverside Plaza
Chicago, Illinois 60606
(312) 621-5350
In March 1972, Polymer Industries, a former subsidiary of
Colonial Heights and a current subsidiary of Morton Thiokol,
disposed of wood glue, print binders, powder materials, natural
guar gums, adhesive for food packages, and adhesive restick for
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envelopes wastes, into four (4) separate trenches on the
Rochester property (Exhibit F, page 8) .
Pursuant to CERCLA Section 107(a)(3), 42 U.S.C. 9607(a)(3),
Polymer Industries is liable as the generator o£ the hazardous
wastes currently present at the Site. At the time of the waste
disposal, however, Polymer Industries was owned by Phillip
Morris, through its subsidiary Colonial Heights. In all of itB
dealings' with EPA regarding the Site, Colonial Heights has
accepted responsibility for its former subsidiary Polymer
Industries and has not requested that EPA name Polymer Industries
or its parent company, Morton Thiokol, as a potentially
responsible party.
Region IV does not recommend that a CERCLA Section 122(e),
42 U.S.C. § 9622(e), special notice letter be issued to Polymer
Industries due to the fact that it was owned by Colonial Heights
at the time of disposal. Colonial Heights has accepted the
responsibility for Polymer Industries' disposal of the hazardous
waste currently present at the Site.
D. Parties Associated with the Site
1. Morton Thiokol, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
(312) 621-5200
On August 2, 1982, Philip Morris, through its subsidiary Colonial
Heights, sold Polymer Industries, to Morton Thiokol, Inc. (Morton
Thiokol).
In a letter from Jack Axelrood, Vice President of Legal Affairs
for Morton Thiokol, to James R. Kieckhefer, an employee of Philip
Morris Industrial, Incorporated, dated September 5, 1984, Morton
Thiokol stated that pursuant to the "Purchase and Sale Agreement"
between Morton Thiokol and Philip Morris, Philip Morris retained
the liability for all past actions of Polymer Industries, and
therefore, Morton Thiokol was not liable for the contamination at
the Site (Exhibit F, Appendix B-8).
Region IV has not reviewed the Purchase and Sale Agreement
between Philip Morris and Morton Thiokol with respect to the
transfer of Polymer Industries from Philip Morris to Morton
Thiokol, and has not presently made a determination as to whether
or not Morton Thiokol assumed any liabilities when it purchased
Polymer Industries from Philip Morris.
Region IV is continuing to seek further information pertaining to
Morton Thiokol's potential liability for the Site. However,
Colonial Heights, has in the past, and continues to date, to
fully fund and undertake all response activities at the Site.
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In addition, Colonial Heights has never contested its liability
for the release of hazardous waste at the Site, has not initiated
any contribution action against Morton Thiakol, and has not
requested EPA to name Morton Thiokol as a potentially responsible
party. Morton Thiokol did not own Polymer Industries at the time
of the hazardous waste disposal and has denied liability for the
contamination at the Site. For these reasons, Region IV does not
recommend that CERCLA Section 122(e), 42 U.S.C. § 9622(e),
special notice letters be issued to Morton Thiokol at this time.
2. Steven C. Blackwell
Ledbetter Road
Travelers Rest, South Carolina 29690
(803) 834-8640
Steven C. Blackwell was an occasional truck repairman for
Polymer, Industries. In late 1971 or early 1972, Mr. Blackwell
became aware that Polymer Industries had some wastes that it
wanted to bury. Mr. Blackwell had no land to bury the waste, but
through his brother-in-law, Joe Ledbetter, a neighbor of the
Rochesters, notified Thomas J. Rochester that Polymer Industries
had some waste that it wanted to bury.
Due to Mr. Blackwell's limited involvement in the disposal of
Polymer Industries' waste at the Rochester Site, Region IV does
not recommend that CERCLA Section 122(e), 42 U.S.C. § 9622(e),
special notice letters be issued to Mr. Blackwell. Region IV has
not found any evidence that Mr. Blackwell did anything other than
contact Thomas J. Rochester through his brother-in-law, Joe
Ledbetter.
3. Joe Ledbetter
963 Tubbs Mountain Road
Travelers Rest, South Carolina 29690
(803) 834-7380
Joe Ledbetter, brother-in-law of Steve Blackwell and neighbor of
Thomas J. Rochester at the time of disposal, was starting a
backhoe business when he was approached by Steve Blackwell in
1971. Mr. Blackwell told Mr. Ledbetter that Polymer Industries
had some dried up glue that it wanted to dispose on someone' s
property.
Mr. Ledbetter knew that Thomas J. Rochester was out of work, that
Mr. Rochester needed money, and that Mr. Rochester had extra
land. The evidence is unclear as to who approached Thomas J.
Rochester with Polymer Industries' desire to dispose of its
waste, but Thomas J. Rochester and Polymer Industries made an
oral agreement allowing Polymer Industries to dispose of its
waste onto Thomas J. Rochester's property.
Mr. Ledbetter dug the trenches for the waste with his backhoe and
covered the trenches with dirt after the wastes were deposited
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into the four (4) trenches by Polymer Industries (Exhibit F,
Appendix D).
Region IV has not found any evidence that Mr. Blaclewell did
anything more than dig the four (4) trenches with his backhoe and
cover the trenches with his backhoe after Polymer Industries had
dump its waste into the four (4) trenches.
Due to Mr. Ledbetter's lima ted involvement in the disposal of
Polymer Industries' waste at the Rochester Site, Region IV does
not recommend that CERCLA Section 122(e), 42 U.S.C. § 9622(e),
special notice letters be issued Mr. Ledbetter.
III. SIGNIFICANT LEGAL DEFENSES AND EQUITABLE CONSIDERATIONS
CERCLA Section 107(b), 42 U.S.C. § 9607(b), sets forth the only
defenses to liability available to potentially responsible
parties. These defenses include: (1) an act of God; (2) an act
of war; or (3) an act of a third party (under certain
conditions). Region IV is not aware of any information which
would establish a defense on behalf of Colonial Heights, the only
potentially responsible party that Region IV recommends be issued
a CERCLA Section 122(e), 42 U.S.C. § 9622(e), special notice
letter.
A. Legal Defenses
As the current owner of the Site (through its subsidiary Carolina
Properties, Inc.), the former operator of the Site, and the
former owner of Polymer Industries, the sole generator of the
hazardous waste that was disposed into the four (4) trenches at
the Site, Colonial Heights, is liable for all EPA response
activities at the Site.
Region IV is not aware of any defenses which would establish a
defense on behalf of Colonial Heights. In addition, Colonial
Heights has funded all of the cleanup activities at the Site to
date and Region IV does not anticipate that Colonial Heights will
raise any legal defenses as to its liability during the RD/RA
Consent Decree negotiations.
B. Equitable Considerations
Region IV does not recommend that CERCLA Section 122(e),
42 U.S.C. § 9622(e), special notice letters be issued to Mary Lou
Rochester, the surviving spouse of Thomas J. Rochester pnd the
joint owner of the Site property at the time of the waste
disposal in 1972, because from current evidence, it appears that
Mary Lou Rochester is not viable to perform or finance the RD/RA
activities at the Site.
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IV. STATUTE OF LIMITATIONS
There is no statute of limitations problem, in this case due to
the fact that, pursuant to CERCLA Section 113 (g)(2)(B)/
42 U.S.C. § 9613(g)(2)(B), physical on-site construction of the
remedial action has not been initiated at this Site.
V. RESPONSE COSTS
According to the most recent cost documentation, BPA has expended
a total of $313,753.64 through April -30, 1993, at the Site
(Exhibit B). A certain amount of these costs represents
oversight costs for the removal action performed by Colonial
Heights pursuant to a Removal Action Administrative Order by
Consent (AOC), Docket Number 89-09-C, dated June 5, 1989
(Exhibit D). The Region IV cost recovery staff will provide the
cost documentation for each action and will supplement this
report accordingly.
These oversight costs will be addressed, initially, during the
RD/RA negotiations. However, if negotiations are not fruitful,
the PRP will be billed for these costs separately from the
negotiation process.
The response cost figure will be updated before negotiations are
concluded.
VI. THE ADMINISTRATIVE RECORD
EPA has compiled an Administrative Record for the Site, and
released it for public comment and review concurrently with the
June 14, 1993, Proposed Plan for this Site (Exhibit A). The
Administrative Record is available at EPA, Region IV, Records
Center and the Travelers Rest Library, 315 South Main Street,
Travelers Rest, South Carolina 29690. In that the Administrative
Record is over 300 pages long, EPA did not make an exhibit to
this litigation package. However, the index to the
Administrative Record is attached (Exhibit G).
VII. THE REMEDIAL ACTION
EPA plans to negotiate a consent decree with the PRP, Colonial
Heights, to finance and perform the RD/RA activities. The Record
of Decision (ROD), which the Region anticipates will be final by
the fourth quarter of fiscal year 1993, will most likely provide
for in-situ air sparging which, would be accomplished by,pumping
air or nitrogen through wells or trenches in the saturated zone,
creating a steady flow of gas, or bubbles, that rise through the
aquifer. Air sparging creates a crude air stripper in the
subsurface. The rising bubbles contact the dissolved contaminant
and allow the TCE to volatilize. In addition to stripping the
TCE, the addition of oxygen to the groundwater should promote
biodegradation of bis(2-ethylhexyl) phthalate and oxidation of
soluble manganese to its insoluble form. The insoluble manganese
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- 12 -
should then precipitate and be re-deposited in the soils, where
it is already naturally occurring.*
All TCE contamination detected at the Site has been found in the
shallow water table wells. Therefore, horizontal air sparging
well(s) (or trench(es)) would be installed at a depth below the
water table. The trench would be dug, perforated pipe would be
placed, and the trench would be backfilled with gravel. The air
would b€ spaxged below the water table, volatilizing the TCE.
The vapors would travel through the gravel and through the
topsoil layer on top of the gravel (Exhibit A, page 11)«
Alternately, vent pipes could be placed through the top soil to
facilitate vapor discharge. The estimated amount of TCE that
would volatilize to the atmosphere is extremely low, about 1.5
pounds per year. The air sparging trench would be supplemented
with bedrock air sparging wells, if necessary, to c>XY9enate the
groundwater near observed high concentrations of manganese
(Exhibit A, page 11).
In addition to the extraction wells and treatment processes
described above, this alternative would include implementation of
institutional controls and groundwater monitoring to monitor the
effectiveness of the alternative and limiting future use of
groundwater until clean-up goals are achieved (Exhibit A, page
11).
The present worth cost of the preferred remedial action for this
Site is estimated to be $2.7 million and is estimated to take
four (4) to five (5) years to complete. However, this cost
estimate includes thirty (JO) years of groundwater monitoring at
an estimated present worth cost of $1.9 million (Exhibit A, page
11).
EPA anticipates that the preferred remedial action for this Site
will not be controversial. The preferred remedy is strongly
supported by the Feasibility Study, and is of moderate cost
compared to the other alternatives discussed in the FS and
Proposed Plan. Based on the comments received to date, EPA does
not anticipate any opposition to the preferred remedy by the
residents of the community or the general public.
A copy of the final ROD will be forwarded to EPA Beadguarters
(HQ) and the United States Department of Justice (DOJ) as soon as
it becomes available.
VIII. NATURAL RESOURCE TRUSTEES
Both the United States Department of the Interior (DOI) and the
State of South Carolina were contacted prior to EPA's
distribution of the Proposed Plan to the public on June 14, 1993
(Exhibit A). Both the State of South Carolina and DOI will be
notified prior to the RD/RA Consent Decree negotiations with
Colonial Heights.
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IX. RELAXED CRIMINAL INVESTIGATIONS, PROSECUTIONS, OR CIVIL
ACTIONS
There are no other related proceedings relevant to this Site.
X. PRE-REFERRAL SETTLEMENT STRATEGY
A. Timetable
The following schedule details the proposed milestones for the
negotiation of an RD/RA Consent Decree for this Site:
EVENT DATE
ROD Finalized and signed by Region IV August, 1993
RD/RA Special Notice Letter issued August, 1993
RD/RA Good Faith Offer deadline October, 1993
RD/RA Consent Decree lodged December, 1993
B. Alternative Types of Settlements
Because only one PRP has been identified with the Site, a de
minimis settlement is not anticipated. Region IV does not
anticipate entering into any discussion with Colonial Heights
regarding a mixed funding type of settlement. Colonial Heights
appears to have sufficient funds to undertake the RD/RA and, to
date, has made no claims regarding inability to pay for the
cleanup action.
C. Proposed Draft Consent Decree
Region IV intends to utilize the Section 122(e), 42 U.S.C.
§ 9622(e), moratorium procedures to negotiate the RD/RA Consent
Decree with Colonial Heights for the Site.
Region IV plans to issue a Section 122(e), 42 U.S.C. § 9622(e),
notice letter with a draft Consent Decree and a draft Scope of
Work to Colonial Heights after the Regional Administrator has
signed the ROD. The notice letter will express the schedule for
negotiations as a strict one to which adherence is expected, and
the negotiating team will work diligently to achieve settlement
within the 120-day time frame, if at all possible. If
negotiations fail, Region IV may issue a Unilateral
Administrative Order for the RD/RA to Colonial Heights.
Region IV will use the national Model CERCLA RD/RA Consent Decree
(OSWER Directive Number 9835.17) to initiate negotiations. A
draft Consent Decree tailored, as much as is possible at this
time, to the Site is attached to this document (Attachment 1).
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- 14 -
Attached to the Consent Decree is a site-specific Scope of Work
developed in accordance with the Model Statement of Work agreed
to between Region IV and DO J.
The goal of negotiations is for EPA to obtain reimbursement of
EPA's past costs and an agreement by Colonial Heights to perform
or finance the RD/RA for the Site.
XI. LEGAL, POLICY, AND STRATEGIC CONSIDERATIONS
There are no unique legal, policy, or strategic considerations to
report at this time.
XII. EPA HEADQUARTERS AND DEPARTMENT OF JUSTICE SUPPORT
Region IV does not anticipate any issues of national significance
to arise in this case, and therefore, will take the lead in
negotiating the Consent Decree. The DOJ's resources should not
be necessary beyond those normally expended when assisting a
Region during negotiations. According to the memorandum
entitled, "Revision of CERCLA Civil Judicial Settlement
Authorities Under Delegations 14-13-B and 14-14-E," OSWER
Directive Number 9012.10-a, dated June 17, 1988, Region IV
anticipates that this settlement will, not require headquarter
concurrence pursuant to Waiver of Concurrence Requirements A.l.
Region IV, however, requests that headquarters be available for
consultation, during the RD/RA Consent Decree negotiations.
XIII. REGIONAL CONTACTS
The regional attorney assigned to this matter is Mark M. Davis
(404) 347-2641, extension 2271. The Remedial Project Manager for
the Site is Sheri Panabaker (404) 347-7791. The cost recovery
section contact at this time is Ron Wilson (404) 347-5059.
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IiIST OF EXHIBITS
Exhibit A.
Exhibit B.
Exhibit C.
Exhibit D.
Exhibit E.
Exhibit F.
Exhibit G.
Superfund Proposed Plan Fact Sheet For The Rochester
Property Site in Travelers Rest, Greenville County,
South Carolina, dated June 1993.
EPA Response Cost Documentation from October 1,
1969, through April 30, 1993.
Administrative Order By Consent For Remedial Action
and Feasibility Study For the Rochester Property
Site, dated February 19, 1992.
Administrative Order On Consent For Removal at the
Rochester Property Site, dated June 5, 1989.
Memo To File by Carolyn Thompson, Cost Recovery
Section, dated June 19, 1991, entitled, "Updated PRP
List for Rochester Property Site, Travelers Rest,
Greenville County, South Carolina.
Draft PRP Search, Title Search, and Financial
Assessment for the Rochester Property Site,
Travelers Rest, Greenville County, South Carolina.
Index to the Administrative Record for the Rochester
Property Site in Travelers Rest, Greenville County,
South Carolina.
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Rochester Property Superfund Site
Pre-referral Litigation Report
RECOMMENDED NEGOTIATION SCHEDULE
1) Thirty-seven (37) days from the date of the Special Notice
Letter, the PRP will send EPA its written initial comments on the
draft consent decree.
2) EPA will respond in writing to the PRP's initial comments
within ten (10) days of receipt of said comments.
3) The PRP will consider the above responses by EPA in providing
a response to the draft consent order, which is required as part
of the PRP's good faith offer.
4) Within two (2) weeks of EPA's receipt of the PRP's good faith
offer, a meeting will be held between the PRP and EPA to
negotiate the terms of the Consent Decree, with further
negotiations to be held as necessary.
5) Within ninety-seven (97) days of the date of the Special
Notice Letter, the PRP will sign the negotiated Consent Decree or
advise EPA of its decision not to sign.
€) Notwithstanding the above recommended schedule for
negotiations, EPA is amenable to suggestions of other similar
scheduling that is mutually convenient to the PRP and EPA,
including earlier meetings.
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PRE-REFERRAL LITIGATION REPORT
FOR THE
STAUFFER CHEMICAL COLO CREEK AND
LEMOYNE NPL SITES, OPERABLE UNIT 3,
COLD CREEK SHAMP
MOBILE COUNTY, ALABAMA
ENFORCEMENT CONFIDENTIAL
REGION XV
Regional Contacts
Andrew J. Harrison, Jr. Joanne Benante
Assistant Regional Counsel Remedial Project Manager
Office of Regional Counsel South Superfund
Superfund Branch Remedial Branch
GA/AL/MS Section EPA, Region IV
EPA, Region IV (404) 347-2643
(404) 347-2641, extension 2264
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ENFORCEMENT CONFIDENTIAL
PRE-REFERRAL LITIGATION REPORT
STAUFFER CHEMICAL COLD CREEK AND LBMOYNB NPL SITES
OPERABLE UNIT 3. COLD CREEK SWAMP
I. SITE DESCRIPTION AND GENERAL SITE HISTORY
A. Site Location and Description
The Stauffer Chemical Cold Creek and LeMoyne National Priority
List (NPL) Sites (hereinafter referred to collectively as the
Sites) are located approximately twenty-five (25) miles north of
Mobile, Alabama, on U.S. Highway 43, near the towns of Axis and
Bucks, in Mobile County. (See. Exhibit 1, Figure 1). The Sites
consist of two active manufacturing complexes (the Cold Creek and
LeMoyne plants), the adjoining wetlands, and that portion of the
Mobile/Tombigbee Rivers which extends from just north of the
Ciba-Geigy Site in Mcintosh, Alabama, to just south of the Sites
in Bucks, Alabama. The land area of the Sites is bounded on the
north and northeast by the Alabama Power Barry Steam Generating
Plant and its Discharge Canal, on the east by the east bank of
the Mobile River, on the south by the Courtaulds of North America
Plant, and on the west by the Hoechst Celanese Corporation Plant
and U.S. Highway 43. The Stauffer Chemical Cold Creek Site
consists of the Cold Creek plant, the wetlands, and the Mobile
River. The Stauffer Chemical LeMoyne Site comprises the LeMoyne
plant, the wetlands, and the Mobile River.
The remedial activities to be conducted in the wetlands (Cold
Creek Swamp or the swamp) are the subject of this report. Cold
Creek Swamp is designated as Operable Unit 3 (0U3) for both Sites
and comprises some 650 acres of wetlands, including bottomland
hardwoods, located in the northeast section of the land area at
the Sites. (See Exhibit 1, Figure 2). Cold Creek Swamp is
located approximately ten (10) miles south of the confluence of
the^Tombigbee and Alabama rivers and twenty (20) miles north of
Mobile Bay. The boundaries of the swamp include the Alabama
Power Company Barry Steam Generating Plant Discharge Canal on the
northeast, the Mobile River on the east, and the manufacturing
plants to the south and west. (See Exhibit 1, Figure 2). Cold
Creek drains the swamp and ultimately discharges into the Mobile
River. The area surrounding the swamp is sparsely populated and
is comprised primarily of bottomland hardwoods and other
wetlands. Land use in the immediate vicinity, especially to the
south and west, is predominately industrial, including chemical
manufacturing and electric power generation. However, some small
residential communities are located within a three mile radius.
The proposed remedial action will be conducted in a twenty-five
(25) acre area in the uppermost portion of the Upper Swamp and in
a twenty-five (25) acre area in the Middle/Lower Swamp. EPA
designated these areas as the Upper Arm Swamp Zone and the
Transition Zone, respectively. {See Exhibit 1, Figure 3).
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The Upper Swamp which includes the Upper Arm. Swamp Zone is
located on the Cold Creek plant properties and is owned by
Zeneca, Inc. (previously, ICI Americas, Inc.)* The area is
drained by an unnamed tributary of Cold Creek. It is
characterized by nearly level to undulating topography with
several pools and minimal stream flow through most of the year.
The Upper Arm Swamp Zone contains open water, emergent
vegetation, and forested wetlands.
The Transition Zone is located on property owned by Alabama Power
Company and is drained by Cold Creek. This area receives surface
water flow and sediment deposition from the Upper Swamp. A
portion of the Transition Zone is a powerline right-of-way and is
composed of an emergent marsh typical of disturbed habitats.
Beyond the powerline right-of-way, the Transition Zone becomes a
wooded wetland dominated by deciduous hardwoods, particularly red
maple and water tupelo. Within the Transition Zone, Cold Creek
exists primarily as a series of interconnected areas of standing
water.
B. Site History
Stauffer Chemical Company (Stauffer) previously owned and
operated a multi-product chemical manufacturing plant (at the
Stauffer Chemical LeMoyne Site) and an agricultural chemical
facility (at the Stauffer Chemical Cold Creek Site), each of
which are adjacent to the Cold Creek Swamp.
Stauffer began operations at the Cold Creek plant in 1966. ICI
Americas, Inc., purchased both the Cold Creek and LeMoyne plants
from Stauffer in 1987 and shortly thereafter sold the LeMoyne
plant to Akzo Chemie America. ICI Americas, Inc.., has since been
renamed Zeneca, Inc. (Zeneca). Over the past twenty (20) years,
the Cold Creek plant produced a variety of agricultural
chemicals, including thiocarbamates. This production process
continues today.
Stauffer commenced operations at the LeMoyne plant in 1953 with a
retort carbon disulfide (CS2) plant followed by a reactor CS2
plant in 1956. Other production facilities were subsequently
added, including a sulfuric acid plant in 1957, a carbon
tetrachloride plant in 1963, a caustic/chlorine plant in 1964,
and a Crystex (a proprietary sulfur compound) plant in 1974.
Akzo Chemie America, presently Akzo Chemicals, Inc. (Akzo),
acquired the LeMoyne plant in 1987 and continued to operate it as
a chemical manufacturing plant. The caustic/chlorine process has
since been discontinued and the plant is now dismantled; however,
Akzo continues to operate all of the other manufacturing
processes as stated above.
Halby Chemical Company (HCC) also operated a facility on a leased
portion of the Stauffer Chemical LeMoyne Site from approximately
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1965 to 1974. Argus Chemical Corporation (Argus), a subsidiary
of Witco Chemical Corporation and successor by merger to HC£,
purchased the HCC facility in 1974 and continued to operate the
plant until approximately 1979 when the buildings were razed.
Haste products and effluents, including thiocyanates, were
reported to have been discharged to a pond (the Halby Pond) on
the property. The Halby Pond has since been closed and filled.
Previously, wastewaters from the Stauffer processes were
temporarily held in clay-lined lagoons and discharged to Cold
Creek Swamp which received wastewaters from the LeMoyne and Cold
Creek plants and from HCC/Argus until approximately 1975. As
part of the caustic/chlorine process, the LeMoyne plant
discharged wastewaters which contained mercury. Neutralized
waste brine was discharged from the Cold Creek plant into the
swamp during the late 1960's. Discharges of waste products and
effluents from the Halby Chemical plant may have included
thiocyanates and metal-contaminated wastewater. The discharges
to the swamp ceased in 1975 as the result of the construction of
a pipeline designed to discharge wastewater directly into the
Mobile River in accordance with National Pollutant Discharge
Elimination System (NPDES) permits held by Akzo and Zeneca.
C. Enforcement History
Stauffer and ADEM discovered groundwater contamination in both
on-site and off-site wells in the early 1970's. To monitor
contamination in groundwater, Stauffer installed twenty-one
monitoring wells in 1973. By 1977, water quality had
deteriorated substantially and seven observation wells were
placed at the southern property line of the LeMoyne plant. The
Alabama Water Improvement Commission (AW1C), predecessor to
today's Alabama Department of Environmental Management (ADEM),
approved the installation of three interceptor wells accompanied
by an air stripper on the LeMoyne property in late 1980.
Over the years, several improvements and waste-handling
modifications were made including the construction of lined
wastewater ponds and the closure of some old unlined ponds. In
1975, the unlined landfill located one mile east of the LeMoyne
plant containing 11,000 to 12,000 tons of brine muds, plant
refuse, used samples, and absorption oil was closed using an
impermeable membrane cap and side-wall liner under the direction
of AWIC. Improvements made at the Cold Creek plant in 1974
included closure of the Cold Creek North and South Landfills with
geomembrane caps and side-wall liners. These landfills contained
a variety of herbicides and pesticides.
Several wastewater ponds were closed under the direction of AWIC,
and the use of clay-lined ponds has ceased. Several membrane-
lined ponds which are currently active were installed during the
1970's to replace the clay-lined ponds.
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At present, the Sites contain ten (10) closed or inactive
wastewater ponds and four active ponds near the swamp. The four
(4) active ponds are membrane-lined and monitored regularly. Of
the ten (10) inactive ponds, six (6) are closed and covered. A
wastewater treatment pond associated with the old carbon
tetrachloride plant is lined and contains approximately 1900 yd3
of sulfur sludge. A brine mud pond associated with the chlorine
plant was originally a RCRA facility, but the contents have since
been delisted from status as a hazardous waste and the pond has
been closed. A newer brine mud pond which was permitted in
conformance with RCRA standards was recently closed and closure
documentation has been submitted to ADEM for approval.
The Alabama Department of Public Health conducted an assessment
of the Site in 1982 in response to submissions made by Stauffer
to the House Committee on Interstate Commerce (the Eckhardt
Study). Additional monitoring wells were installed around the
LeMoyne Landfill based on the advice of ADPH. Data obtained from
these wells formed the basis for the NPL listing of both Sites in
September of 1983. The Hazard Ranking Score (HRS) for the
Stauffer Chemical Cold Creek Site was 46.77. (Exhibit 2).
Application of EPA's HRS to the Stauffer Chemical LeMoyne Site
yielded a score of 32.34. (Exhibit 3).
On November 21, 1984, EPA issued a Notice Letter and Information
Request to Stauffer for the execution of a Remedial
Investigation/Feasibility Study (RI/FS) at the Stauffer Chemical
Cold Creek Site. (Exhibit 4). On November 23, 1984, EPA issued
to Stauffer a Notice Letter and Information Request for the
preparation of a RI/FS at the Stauffer Chemical LeMoyne Site.
(Exhibit 4). Stauffer expressed its interest in conducting the
RI/FS in a letter dated December 21, 1984. (Exhibit 5). Under a
contract with EPA, Camp, Dresser; and McKee, Inc., performed
preliminary sampling in May 1985 to assist in preparing a work
plan for the RI/FS. Stauffer and EPA entered into an
Administrative Order on Consent (AOC), Docket No. 86-04-C, on
January 21, 1986. (Exhibit 6). Pursuant to the AOC, Stauffer
agreed to conduct the RI/FS at both Sites and to reimburse EPA
for all costs of response and oversight incurred by the United
States. Subsequent to the effective date of the AOC, ICI
Americas, Inc. (presently, Zeneca), purchased the LeMoyne and
Cold Creek plants. Shortly thereafter, Akzo Chemie America
(presently, Akzo) purchased the LeMoyne plant from ICI Americas,
Inc. Akzo and ICI Americas, Inc., continued the RI/FS to
completion. These potentially responsible parties (PRPs)
completed the RI in July 1988 and the FS in January 1989.
On July 11, 1989, EPA issued a Proposed Plan for remedial
activities which would address groundwater contamination at the
Sites. (Exhibit 7). EPA then issued Special Notice Letters to
Akzo and ICI Americas, Inc., on July 20, 1989, relating to the
Remedial Design/Remedial Action (RD/RA) for groundwater
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remediation. (Exhibit: 8). EPA executed a Record of Decision
(ROD) on September 27, 1989. (Exhibit 9). Under the provisions
of the ROD, EPA established three Operable' Units. Operable Unit
1 (OU1) addresses groundwater and contaminant sources. Operable
Unit 2 (0U2) addresses source units, and Operable Unit 3 (0U3)
refers to the Cold Creek Swamp. The Consent Decree (CD) for the
conduct of the RD/RA for 0U1 was lodged on April 25, 1990.
(Exhibit 10). At present, the PRPs are operating a groundwater
recovery and treatment system which includes interceptor wells
with flow rates from 325 to 420 gallons per minute (gpm).
The on-site sources of contamination at both Sites are designated
as 0U2. The September 27, 1989, ROD for 0U2 identified nine
(9) Solid Waste Management Unit Areas. These Solid Waste
Management Areas include twelve (12) separate Solid Waste
Management Units (SWMUs). Subsequently, in March 1991, Region
IV's RCRA Branch conducted a RCRA Facility Assessment at the Akzo
facility (the LeMoyne plant) and identified a total of 139 SWMUs
and fourteen (14) Areas of Concern (AOCs). Of the 139 SWMUs, EPA
only identified eight (8) as requiring a full investigation.
(Exhibit 11). During a meeting on March 13, 1992, and in a
letter dated May 1, 1992, EPA informed the PRPs that a RI/FS must
be conducted for OU2 (on-site sources). (Exhibit 12). EPA's
authority to require this RI/FS was based on Section VI,
Paragraph 1 of the AOC. Akzo and ICI Americas, Inc. (Zeneca),
requested that EPA include less than the entire 139 SWMUs in OU2
and that EPA handle the remaining SWMUs under the Corrective
Action portion of Akzo's RCRA permit. (Exhibit 13). Based on
an agreement between the CERCLA and RCRA branches. Region IV
included six (6) additional SWMUs in OU2. The addition of these
six (6) SWMUs to the twelve (12) SWMUs identified in the ROD for
OU2 brings the total number of SWMUs in OU2 to be handled under
CERCLA to eighteen (18). (Exhibits 11, 16).
An August 6, 1992, EPA letter documents a concensus reached
between EPA and the PRPs for a three-phased approach which has
been implemented for the RI/FS Work Plan for 0U2. (Exhibit 14).
On Deciember 29, 1992, EPA conditionally approved a Decision
Document which was prepared to assess available information on
eighteen (18) SWMUs in OU2, to determine the appropriate course
of action at these SWMUs, and to make recommendations for
addressing source contamination. (Exhibit 15).
In a letter dated May 4, 1990, EPA notified the PRPs that a
determination had been made that pursuant to Section VI,
Paragraph I of the AOC, supplemental investigatory work and/or
engineering evaluation was necessary for OU3. (Exhibit 16).
Akzo and Zeneca responded in a May 22, 1990, letter stating that
the PRPs were willing to conduct the supplementary work.
(Exhibit 17). The additional study (RI/FS) was conducted to
better define the nature and extent of contamination and
potential human health and ecological risk existing in the swamp.
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In addition to identification of the hazardous substances present
in sediments and surface water and the characterization of risk
posed by the presence of these contaminants/ the additional study
also included extensive biological sampling, including finfish,
herptiles, and invertebrates, from the swamp and other locations
determined to represent background, and an analysis of these
organisms for whole-body mercury tissue concentration*
On Hay 25, 1993, EPA issued a "Notice of Decision Not To Use
Special Notice Procedures" to the potentially responsible parties
(PRPs) for the Stauffer Sites, Akzo and Zeneca, to the PRP for
the Ciba-Geigy Site, Ciba-Geigy Corporation, and to the PRP for
the Olin Corporation Site, Olin Corporation. (Exhibit 18). The
notice letter informed the PRPs, including those for the Stauffer
Sites, of the designation of a length of the Mobile/Tombigbee
river system from just north of the Ciba-Geigy Site to just south
of the Stauffer Chemical LeMoyne Site as Operable Unit 4 for the
Stauffer Sites, Operable Unit 5 for the Ciba-Geigy Site, and
Operable Unit 3 for the Olin Corporation Site. EPA intends to
conduct an initial, yet comprehensive, RI to determine the areal
extent of contamination in the river system due to the release of
hazardous substances and pollutants or contaminants from the four
NPL Sites. EPA Region IV's Environmental Services Division is
preparing a draft Work Plan which is due in several weeks.
D. Present Site Conditions/Proposed Plan/Stauffer Chemical
Cold Creek Site, Operable Unit 3, Cold Creek Swamp
The RI for 0U3 was approved with caveat on July 15, 1992.
(Exhibit 19). EPA required the preparation of a FS which was
approved with caveat on June 3, 1993, and is summarized in the
Proposed Plan. (Exhibit 20). The only critical contaminant of
concern found in the swamp was mercury. Other potential
contaminants of concern which were identified included
thiocarbamates, aluminum, cadmium, copper, and zinc.
The Baseline Ecological Risk Evaluation indicated that levels of
mercury in Cold Creek Swamp sediments pose a potential risk to
receptor organisms.1 Mercury levels found in sediments were
well above Regional ecological screening values of 0.15 parts per
million (ppm) for potential effects and 1.3 ppm for probable
ecological effects. Mercury concentrations in receptor
organisms, including carnivorous fish and predatory herptiles,
displayed elevated levels above the recommended safe limit of
1Although the Baseline Human Health Risk Assessment
indicated that human health exposure did not present unacceptable
health risks based on the anticipated exposure pathways, the
Mobile County Department of Health nevertheless issued a "Fish
Consumption Advisory" on Cold Creek Swamp on May 7, 1992, based
on the findings of the RI.
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0.1 ppm for ingestion by sensitive species of birds. Mercury was
previously detected in. all four of the finfish samples within the
Swamp during the initial round of biota sampling. Mercury
concentrations ranged from 0.59 mg/kg to 3.1 mg/kg. Mercury was
detected in sixteen (16) of twenty-three (23) finfish samples,
five (5) of seven (7) crayfish samples, and four (4) of seven
(7) worm samples. Highest mercury levels observed in predatory
type fish were 1.9 mg/kg, 1.2 mg/kg. in crayfish, and 2.5 mg/kg in
worms. Sampling also demonstrated mercury levels in other
finfish as high as 2.8 mg/kg, in reptiles as high as 1.9 mg/kg,
and in Amphibians as high as 1.6 mg/kg. The Proposed Plan
concludes that based on these findings, mercury contaminated
sediments in Cold Creek Swamp present an unacceptable ecological
risk.
The two areas of greatest concern wherein sediments exhibit
elevated levels of mercury axe the Upper Arm Swamp Zone and the
Transition Zone. (Exhibit 1, Figure 3). Mercury concentrations
in sediments and soil ranged as high as 1600 ppm in the top
twelve (12) inches of sediments and up to 7560 ppm at depths of
twelve (12) to twenty-four (24) inches in the Upper Arm Swamp
Zone. Mercury was present at levels as high as 632 ppm in the
top twelve (12) inches of sediment in the Transition Zone.
The purposes of the proposed remedial action are (1) to
reduce/eliminate exposure of organisms to bioavailable mercury
which in turn would reduce mercury levels in biota and (2) to
reduce the migration of contaminants within and from Cold Creek
Swamp. EPA's preferred alternative chosen to achieve these goals
includes multi-layer capping and containment of contaminated
soils in the Upper Arm Swamp Zone accompanied by surface water
diversion and creation of wetlands along the new waterway. The
preferred alternative for the Transition Zone is excavation of
contaminated soils to a depth of two (2) feet and placement of
these soils in the Upper Arm Swamp Zone for tapping followed by
backfilling of the Transition Zone with clean fill. The
Transition Zone will be revegetated with identical plant species
which are presently found in the wetland. In addition, the
levees presently existing along the Mobile River bank would be
raised to limit the exchange of contaminants from Cold Creek
Swamp to the Mobile River. Institutional controls will.include a
prohibition on fishing and hunting in Cold Creek and prevention
of trespass. The estimated cost of the entire project is
$17,740,000.
II. IDENTITY AND LIABILITY OF POTENTIALLY RESPONSIBLE PARTIES
(PRPs)
The hazardous substances present in the Cold Creek Swamp were
discharged from manufacturing operations at the Cold Creek and
LeMoyne plants. Three entities owned the Sites upon which these
plants are located during the relevant time period. The
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owner/operators included Stauffer Chemical Company, Akzo
Chemicals, Inc., and Zeneca, inc.- Additionally, Halby Chemical
Company and Argus Chemical Corporation axe known to have operated
a portion of the Stauffer LeMoyne Site. An analysis o£ the
liability of each entity is presented below.
CERCLA liability is based upon the establishment of the following
elements: (1) a release or threatened release of a hazardous
substance has occurred; (2) the release or threatened release was
from a facility; and (3) the defendants are potentially
responsible parties as defined by CERCLA § 107(a). 42 U.S.C.
§ 9607(a).
Studies have documented the release of hazardous substances at
the Sites. The RI/FS for 0U3 indicated the presence of mercury,
aluminum, cadmium, copper, and zinc in sediments. Each of these
is a hazardous substance as that term is defined in Section
101(14). 42 U.S.C. § 9601(14). Thiocarbamates, which are
pollutants or contaminants as defined in § 101(33), were also
found in the sediments. 42 U.S.C. § 9601(33). A "facility"
includes "any Site or area where a hazardous substance has been
deposited, stored, disposed of, or placed, or otherwise come to
be located ..." 42 U.S.C. $ 9601(9). The Stauffer Cold Creek
and LeMoyne Plant Sites which include OU3 are "facilities" as
that term is defined in Section 101(9). 42 U.S.C. § 9601(9).
Potentially responsible parties include current owners or
operators of a facility, past owners or operators who owned the
facility at the time of disposal, persons who arranged for the
disposal of hazardous substances, and persons who transported
hazardous substances and selected the Site for disposal.
42 U.S.C. § 9607(a)(l)-(4). The following discussion addresses
the classification of the identified persons as PRPs.
A. Current Owner/Operators
1. Akzo Chemicals. Inc.
Akzo Chemie America, the predecessor to Akzo Chemicals, Inc.,
purchased the LeMoyne plant, a portion of the Stauffer Chemical
LeMoyne Site, in 1987 and continues to own and operate the plant
today.
Present owners and operators of a facility are potentially liable
parties under CERCLA § 107(a)(1). 42 U.S.C. § 9607(a)(1). The
term "owner or operator" is defined in Section 101(20)(A) to
include any person owning or operating a "facility." "Person" is
defined to include corporations. 42 U.S.C. § 9601(21). Akzo is
a person and although it does not own the swamp area comprising
OU3, this operable unit is a portion of the Stauffer Chemical
LeMoyne Site, a part of which Akzo owns and operates. Further,
the presence of mercury in the swamp is believed to be primarily
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the result of discharges from the. LeMoyne plant. Having
established that the LeMoyne. plant is a facility, Akzo is a;
potentially responsible party as a person irho owns/operates 'a
facility at which there has been i release or threatened release
of hazardous substances.
2. Zeneca. Inc.
Zeneca (previously 1CI Americas, Inc.) owns and operates the Cold
Creek plant which is located on the Stauffer Chemical Cold Creek
Site. Zeneca also owns a portion of the swamp area comprising
0U3 which is a portion of the Stauffer Chemical Cold Creek Site
at which a release or threatened release of hazardous substances
has occurred. Therefore, Zeneca is also a person who owns and
operates a facility, and as a result, it is a liable party under
Section 107(a)(1). 42 U.S.C. § 9607(a)(1).
Zeneca previously owned the LeMoyne plant also. Zeneca purchased
the LeMoyne plant from Stauffer in 1987 and later sold it to
Akzo. Thus, Zeneca is also a past owner/operator of the Stauffer
Chemical LeMoyne Site. It is believed that Zeneca owned the
plant during the period of time when hazardous substances were
released. As a result, Zeneca also fits the classification of a
past owner/operator. 42 U.S.C. § 9607(a)(2).
B. Other Persons
Stauffer Chemical Company owned and operated both the Cold Creek
and LeMoyne plants during the time of disposal of hazardous
substances. Region IV has limited information at present
pertaining to Stauffer. Stauffer is believed to have entered
bankruptcy proceedings followed by distribution of the assets
which included the sale of these two plants for the purpose of
recouping funds owed by Stauffer. Region IV will seek further
information pertaining to Stauffer's status; however, the
presently named PRPs have in the past and continue today to fund
the Superfund activities at the Sites. Based on these facts,
further discussion pertaining to Stauffer is unwarranted.
Halby Chemical Company (HCC) operated a portion of the LeMoyne
plant during the years beginning in 1965 and ending in 1974.
Argus Chemical Corporation (Argus), a subsidiary of Witco
Chemical Corporation and successor by merger to HCC, purchased
the Halby Chemical Company operation in 1974 and continued to
manufacture dye chemicals, including sodium hydrosulfide, until
1979. Thiocyanate contamination is believed to be the result of
the operations of Halby Chemical Company and Argus. The Region
is preparing an Information Request to be issued to Argus. The
response should assist the Region in determining whether the
thiocyanate contamination is the result of these operations and
whether Witco should be designated as a PRP and asked to
participate in the negotiations for the RD/RA for 0U3.
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Alabama Power Company owns a substantial portion of the swamp
area comprising 0U3, including the Transition Zone, wherein
remedial activities will be conducted. Aef an owner, Alabama
Power Company falls within one of the classes of persons which
are potentially liable for response costs. 42 U.S.C. § 9607(a).
However, based on the information presently in EPA's possession,
Alabama Power Company may be in a good position to assert the
third-party defense. Alabama Power Company's potential defense
is discussed below.
III. DEFENSES
CERCLA Section 107(b) sets forth the only defenses to liability
available to owners or operators. These defenses include (1) an
act of God, (2) an act of war, or (3) the act of a third party
(under certain conditions). 42 U.S.C. § 9607(b)(1)—(3). The
Region is not aware of any information which would establish a
defense on behalf of Akzo or Zeneca.
Alabama Power Company, if named as a PRP, certainly would assert
that the statutory third-party defense of CERCLA Section
107(b)(3) provides a shield from liability for response costs in
OU3. The defense requires that the release of hazardous
substances and the damages resulting therefrom be caused solely
by "an act or omission of a third party other than an employee or
agent of the defendant, or than one whose act or omission occurs
in connection with a contractual relationship . . . with the
defendant ..." 42 U.S.C. § 9607(b)(3). Clearly, the release
of hazardous substances associated with OU3 did not occur as the
result of an act or omission of Alabama Power Company or its
employees or agents. Further, Region IV does not possess any
information which indicates that the releases occurred as the
result of a "contractual relationship," as that term is defined
in Section 101(35)(A), 42 U.S.C. § 9601(35)(A), with Akzo,
Zeneca, Stauffer, Argus, or HCC. Thus, it appears that there was
not an association between Alabama Power Company and the
releases.
In addition to the above requirement, to prevail upon the third-
party defense, a defendant generally must also demonstrate that
(a) it exercised due care with respect to the hazardous substance
concerned and (b) it took precautions against the foreseeable
acts of the third-party. 42 U.S.C. § 9607(b)(3)(a) and (b).
Whether Alabama Power Company can establish by a preponderance of
the evidence that it complied with these two elements is
questionable. To fully evaluate this question, additional
information must be obtained. For the present, however, the two
"polluters" who caused the releases are funding the Superfund
activities at the Site; therefore, based on Alabama Power
Company's potential defense and because the cleanup activities
are continuing, Region IV does not intend to pursue the question
of potential liability further.
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IV. STATUTE OF LIMITATIONS /BANKRUPTCY COURT DEADLINES
These considerations do not apply in this base.
V. SUMMARY OF RESPONSE COSTS INCURRED/OPERABLE UNIT 3
EPA has incurred response costs for 0U3 totalling $107,268.56
through June 10, 1993. (Exhibit 21). On November 4, 1991, EPA
demanded payment of oversight costs incurred at OU3 during fiscal
year 1990 from Akzo and ICI Americas, Inc., in the amount of
$1,880.60. Remittance of the entire sum was complete in December
1991. (Exhibit 22)
EPA later demanded payment of oversight costs for OU3 incurred
during fiscal year 1991 in the amount of $31,847.72. The same
parties shared payment of the outstanding costs and remittance
reached the full sum due during December 1992. (Exhibit 23).
Costs which remain outstanding total $69,817.26. (Exhibit 21).
Region IV intends to demand payment of the outstanding balance as
a component of the Special Notice Letters to be mailed August 15,
1993.
VI. ADMINISTRATIVE RECORD
The administrative record, through the Proposed Plan, was
compiled and sent to the Saraland Public Library, 111 Saraland
Loop, Saraland, Alabama 36571. The administrative record is also
located in EPA Region IV's library in Atlanta, Georgia. An index
to the administrative is attached as Exhibit 24.
VII. DESIRED SCOPE OF RELIEF
EPA intends to negotiate a consent decree with the PRPs that will
require them to perform the RD/RA for 0U3 and to pay all past and
future response costs for 0U3.
VIII. NATURAL RESOURCE DAMAGE TRUSTEES
EPA contacted the trustees for the U.S., Department of Interior
(DOI), the U.S. Department of Commerce/National Oceanic and
Atmospheric Administration (NOAA), ADEM, the Alabama Department
of Conservation and Natural Resources, and the Alabama Oil and
Gas Board. The following paragraphs exemplify the level of
participation and interest of the Natural Resource Trustees*
NOAA initially provided a Preliminary Natural Resource Survey
(PNRS) on August 29, 1990. (Exhibit 25). In a memorandum dated
February 2, 1992, NOAA expressed its concerns about the potential
for unremediated mercury to accumulate in resident biota and
about potential migration of mercury into the Mobile River.
(Exhibit 26). On October 23, 1992, NOAA expressed a number of
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concerns primarily related to the threat of contaminated
sediments in Cold Creek and the potential for migration of these
sediments into the Mobile River. (Exhibit: 27). NOAA and the
United States Fish and Wildlife Service (FWS) reviewed the draft
Work Plan for the upcoming Mobile River Study and provided input
on the plan.
The DOI provided a PNRS for the Stauffer Chemical Cold Creek Site
on January 16, 1987. (Exhibit 28). A PNRS for the Stauffer
Chemical LeMoyne Site was mailed to EPA on January 27, 1987.
(Exhibit 29). In a letter dated February 12, 1988, the FWS
contested Stauffer'e position that mercury is not bioavailable in
the swamp. (Exhibit 30). On May 3, 1990, the FWS provided
further comment and stated again that the data indicates mercury
is bioavailable in the swamp. In the same letter, the FWS set
forth several recommendations, one of which included conducting a
study of the Mobile River. (Exhibit 31). The Office of the
Secretary, DOI, reviewed the RI, but provided no comments.
(Exhibit 32). On July 8, 1992, the FWS stated that insufficient
data existed to make a determination of the damages to trust
resources and that it is working with the industries to obtain
such information. However, the FWS strongly encouraged execution
of a comprehensive study to evaluate the impacts of the entire
industrial corridor adjacent to the river system and the
downstream Mobile Bay estuary. (Exhibit 33). On November 6,
1992, the same office presented general comments pertaining to
the high levels of mercury found in the soil and to the levels of
mercury found in the biota of Cold Creek Swamp based on the draft
FS. (Exhibit 34).
On May 7, 1992, an Environmental Toxicologist employed by the
Mobile County Department of Health (MCDH) recommended placement
of a fish advisory on the Cold Creek Swamp based on the RI
supplied to MCDH by ADEM. (Exhibit 35). A fish advisory was
later issued.
The Alabama Department of Conservation and Natural Resources,
Game and Fish Division (ADCNR/GFD) recommended that a study be
conducted of the effects of the Stauffer Sites on the Mobile
River. (Exhibit 36). On April 13, 1992, ADCNR/GFD also
expressed concerns about risk to humans based on consumption of
contaminated fish, contamination of off-site biota, and the
potential for migration of contaminated sediments. Finally, the
ADCNR/GFD again recommended a separate investigation of the
Mobile River based on the exchange between the swamp and the
river. (Exhibit 37).
IX. RELATED CRIMINAL INVESTIGATION. PROSECUTIONS OR CIVIL
ACTIONS
No actions or investigations are involved at this Site. Only the
Consent Decree related to RD/RA for OU1 and the associated
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Complaint have been submitted to the United States District Court
for the Southern District of Alabama.
X. PROPOSED PRE-REFEKRAIi STRATEGY
Region IV anticipates that the ROD will be finalized and signed
by August 15, 1993. Special notice letters should be issued
shortly thereafter. Although EPA anticipates submission of a
good faith offer by the PRPs, some past and recent discussions
between the RPM and PRP technical personnel serve to present the
possibility that a good faith offer may hot be forthcoming. If
the offer is not made, Region IV will have to determine whether
to issue a Unilateral Administrative Order or to conduct a fund-
lead RD/RA.
EPA will use the model RD/RA Consent Decree (Exhibit 38) and
model Scope of Work (Exhibit 39) as a basis for attaining an
agreement for the performance of the RD/RA, for payment of past
costs, and for payment of future costs. There are no plans for
mixed funding or de minimis settlements in this case.
The following schedule details the proposed milestones for the
negotiation of a Consent Decree for this Site:
Proposed Plan Completed and Issued by Region IV
Beginning of Public Comment Period
Pre-Referral Litigation Report to HQ and DOJ
Public Meeting
ROD Finalized and Signed by Region IV
RD/RA Special Notice Letters Issued
Good Faith Offer Due
RD/RA Negotiations Conclude
June 15, 1993
June 15, 1993
June 24, 1993
June 29, 1993
August 15, 1993
August 23, 1993
Oct. 29, 1993
Dec. 29, 1993
XI. LEGAL. POLICY. OR OTHER ISSUES OF PRIMARY IMPORTANCE
The remedial activities to be conducted in 0U3 will require the
discharge of dredged and fill material. Activities which include
the discharge of fill material into waters of the United States,
including most wetlands, are typically regulated by Clean Hater
Act Section 404. 33 U.S.C. § 1344. Thus, CWA Section 404 is
applicable to the proposed remedy and has been designated as an
applicable or relevant and appropriate requirement (ARAR).
Although a CWA § 404 permit is not required to conduct the
remedy, EPA is nonetheless obligated to fulfill the substantive
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requirements of CWA § 404 and the § 404(b)(1) guidelines which
are included in 40 C.F.R. § 230.4. Although no discharge in a
wetland shall be allowed when there is a practicable alternative,
the necessity to address contamination in the Cold Creek Swamp
leaves no practicable alternative. 40 C.F.R. § 230.10(a).
Since a discharge is to be undertaken, all appropriate and
practicable steps must be taken to minimize potential adverse
impacts of the discharge on the aquatic ecosystem. 40 C.F.R.
§ 230.10(d). Subpart H of 40 C.F.R. Part 230 sets forth the
steps which can be taken to minimize the effects of fill
activities. Section 230.75(d) states that he&itat development
and restoration techniques may be used to minimize adverse
impacts and to compensate for destroyed habitat. These
techniques include wetland restoration, enhancement, and/or
creation.
Since fill activities are unavoidable in order to conduct the
remedial actions in Cold Creek Swamp, mitigation will be
required. The "Memorandum of Agreement between the U.S. Army
Corps of Engineers and the EPA Concerning the Determination of
Mitigation Under the 404(b)(1) Guidelines" (MOA) states that
mitigation includes wetland restoration (the favored
alternative), enhancement, and/or creation. The evaluation of
the appropriate level of mitigation requires a case-specific
determination and is based solely on the values and functions of
the aquatic resource that will be impacted. According to the
MOA, mitigation should provide at a minimum one for one
functional replacement with an adequate margin of safety to
reflect the expected degree of success associated with the
mitigation plan. The MOA considers as a reasonable surrogate a
mini mum of one to one acreage replacement for no net loss of
functions and values. However, the ratio may be greater when the
functional values of the area impacted are demonstrably high and
the replacement wetlands are of lower functional values or the
likelihood of success is low. Conversely, the ratio may be less
than one to one when functional values associated with the
impacted area are demonstrably low and the likelihood of success
of the mitigation project is high.
The Proposed Plan sets forth restoration as the mitigation
methodology to be undertaken in the Transition Zone and creation
of wetlands adjacent to the diverted waterway as the mitigation
methodology in the Upper Arm Swamp Zone. The determination of
the appropriate level of mitigation will be made in the Record of
Decision. One comment provided by the Alabama Department of
Conservation and Natural Resources, Game and Fish Division
(ADCNR/GFD) has already been submitted pertaining to the level of
mitigation necessary to compensate for the loss of wetlands due
to the remedial activities. The ADCNR/FGD requested mitigation
be required at a minimum replacement ratio of 2:1. (Exhibit 37).
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EPA may also be required to mitigate the loss of wetlands under
40 C.F.R. Part 6, Appendix A, implementing Executive Orders. 11988
("Floodplain Management") and 11990 ("Protection of Wetlands").
Executive Order 11988 requires federal agencies to reduce the
risk of flood loss, to minimize the impact of floods on human
safety, health and welfare, and to restore and preserve the
natural and beneficial values served by floodplains. Executive
Order 11990 mandates that federal agencies minimize the
destruction, loss, or degradation of wetlands, and preserve and
enhance the natural and beneficial values of wetlands. Appendix
A to 40 C.F.R. Part 6 sets forth Agency policy and guidance for
carrying out the provisions of the Executive Orders. The
Executive Orders apply to activities of federal agencies
"providing Federally . . . assisted construction and improvements
... and federal activities and programs affecting land use,
including but not limited to water and related land resources
planning, regulating, and licensing activities." 40 C.F.R. Part
6, Appx. A, Section 5a.
Pursuant to Appendix A and EPA policy issued on August 6, 1985,
Superfund actions must meet the substantive requirements of the
Executive Orders. Memorandum, "Policy on Floodplains and
Wetland Assessments for CERCLA Actions," from William N. Hedeman,
Director, OSHER, and Gene Lucero, Director, OWPE, to Toxic and
Waste Management Division Directors, Regions I-X, August 6, 1985.
The memorandum states that "[f]or remedial actions, a
floodplain/wetlands assessment must be incorporated into the
analysis conducted during the planning of the remedial action."
Hedeman at p. 1. A Region IV memorandum dated June 8, 1993,
lists the four components of a Floodplain/Wetland Assessment and
indicates which documents in the Administrative Record serve to
fulfill the substantive requirements of 40 C.F.R. Part 6,
Appendix A. (Exhibit 40).
An additional subject which warrants attention is the Corrective
Action Management Unit (CAMU) Rule, 58 Fed. Reg. 8657 (Feb. 16,
1993), which is an ARAR at these Sites. Region IV intends for
the Regional Administrator to designate a CAMU for OU3 pursuant
to his authority under 40 C.F.R. § 264.552(a). Designation of a
CAMU at these Sites achieves the policy objectives of EPA in
promulgating the CAMU Rule, most notably, "providing remedial
decisionmakers with an added measure of flexibility in order to
expedite and improve remedial decisions" which result in
effective, protective, and cost-effective remedies and to
"override any regulatory disincentive against a given remedy" as
the result of Resource Conservation and Recovery Act (RCRA)
Subtitle C requirements. 58 Fed. Reg. 8659-60 (Feb. 16, 1993).
Pursuant to the CAMU Rule, placement of remediation wastes within
a CAMU is not land disposal under Section 3004(k) of RCRA.
42 U.S.C. § 6924(k); 40 C.F.R. § 264.552(a)(1). Therefore,
placement of remediation wastes within a CAMU does not trigger
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either the Land Disposal Requirements (LDRs) or the Minimum
Technology Requirements (MTRs). 40 C.F.R. § 264.552(a)(1)
and (2).
"Remediation wastes" are defined as "all solid and hazardous
wastes, and all media (including ground water, surface water,
soils and sediments) and debris that contain listed hazardous
wastes, or which themselves exhibit a hazardous waste
characteristic, that are managed at a facility ..." 40 C.F.R.
§ 260*10. The term refers to wastes which originate from
remedial activities at the facility or wastes originally located
at the facility, but which were associated with a release that
migrated beyond the facility boundary. 58 Fed. Reg. 8664 (Feb.
16, 1993). Sediments to be excavated in the Transition Zone and
which exhibit a hazardous waste characteristic constitute
"remediation wastes."
Thus, placement of the contaminated sediments to be excavated
from the Transition Zone into the Upper Arm Swamp Zone, also a
contaminated area, does not trigger the LDRs or MTRs because
placement of remediation wastes into a CAMU is not land disposal
under RCRA Section 3004(k). 42 U.S.C. § 6924(k). The Regional
Administrator will establish the CAMU and its requirements in the
Record of Decision.
It is important to note that two challenges to the CAMU Rule have
been filed in the United States Court of Appeals for the District
of Columbia Circuit. The actions are. styled Environmental
Defense Fund v. EPA. No. 93-1316, and Sharon Steel Co. v. EPA.
No. 93-1322. Judgments have not yet been rendered. However, the
outcome of this litigation may be important to the upcoming
negotiations as the PRPs may be less willing to conduct the
remedy if the challenge to the CAMU Rule is upheld.
XII. HO AND DOJ SUPPORT
The Region requests that DOJ and EPA Headquarters participate in
the negotiation of the Consent Decree. The Region further
requests Headquarter's comments on this pre-referral litigation
strategy. The Region intends to take the lead in negotiating a
Consent Decree.
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APPENDIX A
LIST OF EXHIBITS
1. Superfund Proposed Plan Fact Sheet, Stauffer Chemical
Superfund Sites, Cold Creek Swamp, June 15, 1993
2. Hazardous Ranking Scoring Package for Stauffer Chemical Cold
Creek Site, July 19, 1983.
3. Hazardous Ranking Scoring Package for Stauffer Chemical
LeMoyne Site, June 3, 1983.
4. Notice Letters to Stauffer Chemical Company, November 21 and
23, 1984
5. Stauffer Chemical Company's Response to EPA's Notice
Letters, December 21, 1984
6. Administrative Order on Consent for the RI/FS at the
Stauffer Chemical Cold Creek and LeMoyne Sites, January 21,
1986
7. EPA's Proposed Plan for Operable Unit 1 at the Stauffer
Chemical Cold Creek and LeMoyne Sites
8. Special Notice Letters issued to Akzo Chemicals, Inc., and
Zeneca, Inc., for RD/RA for Operable Unit 1, July 20, 1989
9. Record of Decision, Operable Unit 1, September 27, 1989
10. Consent Decree, United States v. Akzo Chemicals, Inc.. and
ICI Americas. Inc.. for RD/RA for Operable Unit 1, April 25,
1990 (excluding Exhibit A which is included herein as
Exhibit 7)
11. EPA letter to Mariam Tehrani, Akzo Chemicals, Inc., and Lee
Erickson, ICI Americas, Inc., indicating Solid Waste
Management Units (SWMUs) to be handled under CERCLA in 0U2.
12. Notice Letters for RI/FS for Operable Unit 2, May 1, 1992
13. Letter from Mariam Tehrani, Akzo Chemicals, Inc., and Lee
Erickson, ICI Americas, Inc., to EPA requesting that EPA
handle SWMUs under Akzo Chemical, Inc.'s, RCRA permit
14. EPA Letter Documenting Three-Phase Approach for the RI/FS
for Operable Unit 2, August 6, 1992
15. EPA's Approval of the Decision Document for Operable Unit 2,
December 29, 1992
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16. EPA letter notifying the PRPs of the need for a RI/FS at
Stauffer Cold Creek Site 0U3, May 4, 1990
17. Notification of the PRPs' Willingness to Conduct RI/FS for
Operable Unit 3, Cold Creek Swamp, May 22, 1990
18. Notice Letters for Mobile River Study, Initial Phase
Remedial Investigation, May 25, 1993
19. Approval of RI for Operable Unit 3 with Caveat, July 15,
1992
20. Approval of FS for Operable Unit 3 with Caveat, June 3, 1993
21. Summary of EPA Response Costs for Operable Unit 3 Incurred
Through June 10, 1993
22. Demand for Payment of Past Costs Incurred During Fiscal Year
1990, November 4, 1991, and Letters Remitting Payment,
November 21, 1991 (Akzo Chemicals, Inc.) and December 3,
1991 (ICI Americas, Inc.)
23. Demand for Payment of Past Costs Incurred During Fiscal Year
1991, October 22, 1992, and Copies of Payment
24. Administrative Record Index for Stauffer Chemical Cold Creek
Site, Operable Unit 3, June 9, 1993
25. Comments of National Oceanic and Atmospheric Administration
(NOAA), August 29, 1990
26. Comments of NOAA, February 2, 1992
27. Comments of NOAA, October 23, 1992
28. Preliminary Natural Resources Survey for the Stauffer Cold
Creek Site of United States Department of Interior (DOI),
January 16, 1987
29. Preliminary Natural Resources Survey for the Stauffer
LeMoyne Site of DOI, January 27, 1987
30. Comments of United States DOI, Fish and Wildlife Service
(FWS), February 12, 1988
31. Comments of FWS, May 3, 1990
32. Comments of DOI, March 27, 1992
33. Comments of FWS, July 8, 1992
34. Comments of DOI, November 6, 1992
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35. Comments of Alabama Department of Health, May 7, 1992
36. Comments of Alabama Department of Conservation and Natural
Resources, Game and Fish Division (ADCNR/GFD), October 7,
1992
37. Comments of ADCNR/GFD, April 13, 1992
38. Draft Consent Decree for Operable Unit 3, United States v.
Akzo Chemicalwp inc.. and Zeneca. Inc.
39. Draft Scope of Work for Operable Unit 3
40. Region IV Memorandum listing four components of
Floodplain/Wetland Assessment, June 8, 1993
-3-
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I ^S!2^ * UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
amp 1 7 1992 345 COUPTLAND STREET. N.E.
«Uu -»¦ ATLANTA. GEORGIA 30365
4RC
BY FEDERAL EXPRESS
John C. Cruden
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
10th and Pennsylvania Avenue, N.W.
Washington, D.C. 20530'
Re: South Marble Top Road Landfill Superfund Site
Walker County, Georgia
Pre-referral Litigation Report
Dear Mr. Cruden:
The purpose of this letter is to transmit to you the RD/RA pre-
referral litigation report for the above-referenced Site, in
accordance with the draft "Pre-Referral Negotiation Procedures
for Superfund Enforcement Cases" memorandum, dated October 12,
1990. EPA issued a Proposed Plan for this Site on July 30, 1992.
EPA anticipates that the Record of Decision will be signed- for
this Site by September 30, 1992. If there is any additional
information you need at th£s time, please contact Paul Schwartz,
Assistant Regional Counsel, at (404) 347-2641, ext. 2282, or Jane
Spann, Remedial Project Manager, at (404) 347-2643.
Sincerely,
t Regional Counsel
iseph R. Franzmathes
director
Waste Management Division
Enclosure
cc: William A. White (w/encl.)
Enforcement Counsel for Superfund Enforcement, OE
Sally Mansbach, Director (w/encl.)
CERCLA Enforcement Division
Karen Dworkin (w/encl.)
Environmental Enforcement Section, DOJ
Printed on RecvC'ea ".ice-
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Pre-Referral Litigation Report
SOUTH MARBLE TOP ROAD LANDFILL SITE
I. Site Description and Summary of Site History
The South Marble Top Road Landfill NFL Site (the "Site") is
located about 0.6 miles south of Highway 136 and 0.2 miles east
of South Marble Top Road in Walker County, Georgia. The general
Site area consists of about 10 acres of undeveloped, forested
land and is situated on a topographic knoll at an elevation of
about 976 feet above sea level. Drainage valleyb are present to
the north and south of the Site, each containing an intermittent
stream during prolonged rainfall events. Vegetation is present
over the once-cleared portions of the Site and includes various
grasses and pine trees. Approximately 1.25 acres of the Site
were once cleared for landfill operations. The Site includes
three distinct disposal areas within the formerly cleared 1.25
acres, comprising approximately 56,000 square feet with an
estimated volume of waste and cover soils of approximately 25,000
cubic yards. An estimated 3,000 drums of dicamba and 5,000 drums
of benzonitrile, both CERCLA hazardous substances, have been
disposed of at the Site. The former disposal areas include two
trenched disposal areas and one remnant disposal pit. The
remnant pit is now partially filled with water. The general land
use of the surrounding vicinity consists primarily of sparse
residential dwellings with ^associated small-scale farming and
livestock raising. (See Bxhibit G for Map of Area and Site.)
Mose and Sidney Mathis, the owner/operators of the Site (the
"Mathis Brothers"), began operating the Site as a landfill in
early 1974. The Mathis Brothers were required to halt operations
at the Shavers' Farm Landfill site1, also in Walker County, at
the end of 1973, due to the proximity of the Shavers' Farm
Landfill to a sinkhole. The Mathis Brothers then shifted their
landfilling operations to the Site. The Mathis Brothers disposed
of latex wastes from ALC, Inc. ("ALC") and GAF Corporation
("GAF"), dry carpet wastes from E. T. Barwick Industries, Inc.,
and benzonitrille waste and dicamba waste from Velsicol Chemical
Corporation ("Velsicol") at the Site. The benzonitrile waste is
a black thermo-plastic polymer and tar generated from the
distillation of benzonitrile. Dicamba is a herbicide. A
significant number of drums of 1,4-dichlorobenzene from an
unknown generator have also been disposed of at the Site.'
*The Shavers' Farm site has been the subject of a CERCLA
removal action, and is presently being evaluated for inclusion on
the NFL.
2The RI indicates that seven drums were opened in "Area C" of
the Site. Area C contains approximately 4,000 drums, based on
visual inspection and estimate. The seven drums opened appeared to
contain the same material. One of the drums was sampled and it
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2
The Mathis Brothers applied for a Solid Waste Disposal Permit for
the Site on January 28, 1974. The Environmental Protection
Division of the Georgia Department of Natural Resources (EPD) had
already inspected the Site and given verbal approval to the
disposal of all types of solid wastes at the Site. In a letter
to the Mathis Brothers dated February 26, 1974, EPD ordered the
Mathis Brothers to discontinue the disposal of latex wastes at
the Site because a milky fluid was observed leaching from the
Site into a nearby stream. The letter also authorized the Mathis
Brothers to continue placing dry carpet wastes at the Site.
In a letter of the same date to Velsicol, a copy of which was
sent to the Mathis brothers, EPD ordered Velsicol to discontinue
disposing of its solid wastes in Georgia until EPD finalized its
revised guidelines for disposal of hazardous wastes, and until
Velsicol made arrangements for the disposal of its solid wastes
at an official State-approved hazardous waste site. In April
1974, EPD authorized the disposal of non-hazardous waste at the
Site. On November 26, 1974, EPD issued a letter approving the
disposal of benzonitrile wastes from Velsicol at the Site. On
September 15, 1975, EPD issued a Solid Waste Handling Permit to
the Mathis brothers for the Site. Landfill operations continued
at the Site until 1980, when the state required closure after
concluding that the Site did not conform to more stringent waste
disposal regulations about to take effect pursuant to the
Resource Conservation and Recovery Act of 1976 (RCRA) and
Georgia's Hazardous Waste Management Act.
During a Site visit in January of 1980, EPD officials noted an
area of distressed vegetation downslope from the northwest
section of the landfill. EPD then notified the Mathis Brothers
and Velsicol that dumping at the Site would have to be stopped
immediately until an analysis could be run on the waste. On
March 11, 1980, EPD officials met with Mr. Mose Mathis at the
Site and reviewed closure requirements with him.
The Mathis Brothers and Velsicol entered into negotiations for
financing the proper closure of the Site. These negotiations
apparently were unsuccessful, and the Site was not properly
closed. EPD conducted periodic Site inspections. After one
inspection, in April 1983, EPD noted wastes, including some
drums, remaining in a man-made pond (remnant disposal pit)
approximately 75 feet in diameter. EPD also noted household
garbage in the pond and on the bank, and cardboard tubes and
pieces of latex on the ground. All of these wastes were without
contained relatively pure 1,4-dichlorobenzene. The RI seems to
iirtply that all 4,000 drums in Area C are likely to contain 1,4-
dichlorobenzene, but this inference does not appear to be
justified, except as speculation. The Mathis Brothers' do not
recall this waste or its source.
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3
the soil cover required by the Mathis Brothers' permit. EPD sent
a letter to Mr. Mose Mathis on April 7, 1983, requiring that
improvements be made to bring the Site into compliance with the
requirements o£ the Permit. In subsequent inspections/ EPD found
the Site to be abandoned. In response to an additional letter
from EPD, the Mathis brothers placed a 10 inch to 2 feet layer of
soil over the landfill. The pond (remnant pit) remained
unfilled.
In January 1984, the EPD requested that the Site be included on
the Georgia State Superfund Program listing. In June 1984, EPA
conducted a preliminary assessment at the Site. A Hazard Ranking
System (HRS) evaluation was also performed at the Site, which
resulted in a score of 30.78. The Site was proposed to the NPL
on January 22, 1987, and its listing on the NPL became final in
February of 1989.
EPA Region IV issued an Adminstrative Order on Consent (the
"Consent Order") to Velsicol Chemical Corporation on November 2,
1988, requiring Velsicol to conduct the Remedial
Investigation/Feasibility Study (RI/FS) for the Site. A copy of
the Consent Order is attached hereto as Exhibit H. During the
conduct of the RI/FS, Velsicol failed to address adequately EPA
comments on the draft Remedial Investigation Report submitted to
EPA for review, in violation of the Consent Order. In addition,
a lab retained by Velsicol failed to comply with EPA quality
control requirements established in the Consent Order. EPA
assessed stipulated penalties for both of these violations of the
RI/FS Consent Order and accepted partial payment of assessed
stipulated penalties as settlement during the dispute resolution
process, which was invoked by Velsicol. The final RI Report
submitted by Velsicol was accepted by EPA on February 4, 1992,
but EPA issued a Memorandum indicating that EPA disagreed with
certain conclusions in the RI Report relating to vertical
migration of the groundwater from the upper water bearing zone
towards the underlying Knox bedrock aquifer'. This memorandum
is attached hereto as Exhibit I. Velsicol then failed to address
adequately EPA comments on the draft Feasibility Study Report,
and EPA assumed responsibility for completion of the Feasibility
Study, in accordance with its authority under the Consent Order.
The Feasibility Study was completed on July 27, 1992. On July
30, 1992, a Proposed Plan, outlining EPA's preferred plan for
Site remediation, was issued, a copy of which is attached hereto
as Exhibit A. A 30-day public comment period on the Proposed
Plan began on July 30, 1992. Velsicol has requested a 30-day
3Velsicol's consultant concluded in the RI Report that
groundwater contamination migrates primarily horizontally beneath
the Site. EPA contends, based on data in the RI Report, that there
is at least equal, or possibly greater, potential for vertical
migration of groundwater contamination.
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4
extension. Therefore, the public comment period will run until
September 28, 1992. A public meeting was held on August 6, 1992.
II. The PRPs; Liability Issues
Five Potentially Responsible Parties (PRPs) have been identified
at this Site. The owner/operators at the time of disposal and
the current owners of the South Marble Top Road Landfill (and a
number of other Walker County landfills) are Mr. Mose Mathis,
Route 4, Box 70, Chickamauga, Georgia 30707, and his brother, Mr.
Sidney Mathis, Route 4, Box 4OA, Kensington, Georgia 30727. The
Mathis Brothers also acted as transporters, hauling wastes to the
landfills they owned and/or operated. Three generators have been
identified as PRPs: Velsicol Chemical Corporation, 4902 Central
Avenue, Chattanooga, Tennessee; GAF Corporation, 1361 Alps Road,
Wayne, New Jersey 07470; and Mydrin, Inc. (successor by merger to
ALC), 129 Nance Road, NE, P.O. Box 128, Calhoun, Georgia 30703-
0128. All of these PRPs have been sent notice letters regarding
their potential liablility. Copies of the notice letters will be
provided to OE or DOJ upon request.
According to the Mathis Brothers, most of the wastes at the Site
are from Velsicol. An unspecified quantity of latex wastes from
GAF and ALC was disposed of at the Site during the Site's first
year of operation as a landfill. A significant number of drums
of 1,4-dichlorobenzene from an unknown source were also disposed
of at the Site (See footnote 1 above). In addition, dry carpet
wastes from E. T. Barwick, a bankrupt carpet manufacturer, were
also disposed of at the Site. All of the PRPs and the liability
issues relating to the individual PRPs are discussed separately
below.
A. The Mathis Brothers
With respect to the Mathis Brothers, there are no legal or
equitable defenses or difficulties in establishing liability.
The Mathis Brothers have been adjudicated liable parties at the
Site under CERCLA in a private party lawsuit relating to the
Site, Mathis v. Velsicol Ch«wn4r?«l Corporation. Civ. Action 4t91-
cv-24-HLM (N.D. Ga. Dec. 30, 1991). Collateral estoppel should
apply so that EPA will not be required to prove the Mathis
Brothers' liability in court. Even if EPA were required to prove
the Mathis Brothers are liable parties under CERCLA, their
liability could be established without difficulty based on their
status a? former owner/operators of the Site at the time of
disposal operations and as the current owners of the Site.
However, the Mathis Brothers' resources appear to be limited.
Financial information for the Mathis Brothers has been requested
pu'rsuant to EPA's authority under Section 104(e) of CERCLA, but
has not yet been received.
The Mathis Brothers have been deposed in the private litigation
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5
between Velsicol and the Hathis Brothers. Copies of the
deposition transcripts will be provided upon request. The Hathis
Brothers have been interviewed informally by various EPA
personnel, including Mary Hut son* Region. IV Cost Recovery
Section, and Paul Schwartz and Chuck Mikalian, both from the
Office of Regional Counsel, ORC. The Hathis Brothers'
recollections are muddled, and they have tended to stress that
everything they did was pursuant to permits, which they believe
is the only relevant fact. Sidney Hathis in particular has
tended to lose his temper when the issue of the Hathis Brothers'
liability under CERCLA is explained to him.
B. Generators
1. Velsicol Chemical Corporation
With respect to Velsicol, there are no legal or equitable
defenses or difficulties in establishing liability. Documentary
evidence from EPD's files, Velsicol's response to EPA's Section
104(e) Information Request, and deposition testimony clearly
establishes that Velsicol sent a large volume of benzonitrile and
dicamba wastes to the Site during a period from 1974 to 1980.
These documents can be provided upon request. Benzonitrile and
dicamba are both CERCLA hazardous substances. Velsicol's wastes
constitute the bulk of wastes at the Site. Velsicol may raise an
argument that the latex aittf cazpet wastes at the Site are
divisible from Velsicol's wastes so that joint and several
liability does not apply to the Site as a whole, and therefore
that Velsicol cannot be compelled to address those wastes. EPA's
response to this argument is that, even if the latex wastes were
buried in different trenches than the trenches used for Velsicol
wastes, the hazardous constituents of both wastes have been
released into the environment so that the environmental problem
is not divisible.
Velsicol executed an Administrative Order by Consent for
conducting the RI/FS, but has stated in the past that its
corporate position is to refuse to sign the Agency's new national
model Consent Decree. At another site in Region IV where
Velsicol is a PRP (Hardemann County), Velsicol is conducting the
RD/RA pursuant to a UAO. In an effort to avoid wasting resources
on negotiations which could not succeed, EPA Region IV inquired
whether Velsicol had already decided that it would not sign a
Consent Decree consistent with the EPA national model. Velsicol
denied that it would in all circumstances refuse to sign the
model Consent Decree. Velsicol expressed a preference for
participating in CERCLA Section 122(e) special notice negotiation
procedures in the hope that other PRPs would also participate,
reducing Velsicol's ultimate costs for cleaning up the Site.
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6
2. Latex Generators
The two other generator PRPs identified for the Site, Mydrin and
GAF, have both argued that the latex wastes they sent to the Site
were not "hazardous", and therefore that they have not "arranged
for the disposal of-hazardous substances" within the meaning of
CERCLA Section 107* The latex wastes are not classified as
hazardous under RCRA. Both Mydrin and GAF sent latex wastes to
the Site, reportedly in both solid and liquid form. Hazardous
constituents of latex wastes have been found in the environment
at the Site, including styrene (in surface water and
groundwater), vinyl chloride (in soil and sediments) and Bis(2-
ethylhexyl)phthalate (in soil, sediments, groundwater and surface
water). These constituents are CERCLA hazardous substances and
are contaminants of concern at the Site.
Caselaw addressing whether the disposal of wastes which are
composed of hazardous constituents but are claimed to be not
hazardous in the compound form in which they are disposed holds
that arranging for disposal of such wastes constitutes arranging
for the disposal of hazardous substances under CERCLA only if the
waste materials will, under normal Site conditions, release their
hazardous constituents into the environment. This case law
appears to apply to latex wastes. To make the liability case
with respect to the latex wastes disposed of at the Site, it
would be necessary to introduce expert testimony (or results from
TCLP tests) demonstrating that the latex wastes would release
their hazardous constituents into the environment under normal
site conditions. See U. S. v. Mew Castle County. 33 E.R.C. 1746
(D. Del. 1991); United States v^ Serafini. 750 F.Supp. 168, 170-
71 (M.D.Pa. 1990).
The New Castle County case distinguishes between "mixtures"
containing hazardous constituents, which can be presumed to
release their hazardous constituents (e.g., lead based paints are
mixtures cpntaining lead, and the lead is easily released from
such mixtures), and "compounds" containing hazardous
constituents, which must be shown to release their hazardous
constituents under normal Site conditions (e.g., polyvinyl
chloride is a compound that would release the hazardous
constituent vinyl^chloride only in the event of a chemical
reaction; therefore, expert testimony would be required to
establish that this would occur under normal site conditions in a
particular case). The fact that hazardous constituents of the
latex have been found in the environment at the Site suggests
that the latex wastes have released and will continue to release
their hazardous constituents under normal conditions, and this
will bolster any expert testimony offered. However, expert
testimony will- still likely be necessary, because the latex
generators can argue that the constituents in the environment are
attributable to some other source, or that they are attributable
to the other latex generator's waste (which may have different
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7
properties), or that the release of latex constituents is
attributable to a reaction caused by abnormal, unforseeable Site
conditions.
It seems probable that latex in liquid form would more easily
release its hazardous constituents, and both latex generators at
the Site reportedly sent wastes in liquid form (rinse-out from
tanks and trucks). However, expert testimony and/or TCLP results
would be required to establish that the liquid latex wastes will
leach their hazardous constituents.
The Proposed Plan for the Site provides for latex and dry carpet
wastes to be stockpiled upon excavation, and sampled to determine
whether they contain CERCLA hazardous substances, pollutants or
contaminants and to determine appropriate disposal options. If
these wastes do not contain hazardous substances, pollutants or
contaminants, they will remain at the Site, covered by a cap.
Otherwise they will be incinerated, or disposed of off-site. It
may be necessary to retain an expert to assess whether the
various latex wastes and the carpet wastes will release their
hazardous constituents under normal site conditions. Thus, a
conclusive determination of the liability of latex generators
cannot be made until the RD/RA is in process, when the actual
wastes have been excavated and analyzed. At this time, in light
of the presence of hazardous constituents of latex in the
environment, EPA's position is that the latex wastes contain
CERLCA hazardous substances. Accordingly, EPA intends to include
the latex generators on the list of special notice recipients.
a. Mydrin, Inc.
According to the Mathis Brothers, latex wastes from ALC, Inc.
were disposed of at the Site. Mydrin, Inc. ("Mydrin") is the
successor, through a series of mergers described in Mydrin's
response to an EPA Information Request, to the liabilities of
ALC, Inc. In its response to the Information Request, Mydrin,
Inc. acknowledged that ALC, Inc. sent latex wastes to the Mathis
Brothers from July 1973 until August 1974 (as with other
Information Request responses referenced in this report, copies
will be provided upon request). Although Mydrin's Information
Request response did not specify which Mathis Brothers7 landfill
its wastes were sent to, the time span includes the period after
the Mathis Brothers stopped sending wastes to Shavers' Farm
4The recollections of the Mathis Brothers are generally
muddled. The Mathis Brothers sometimes recall disposing of wastes
fzfom ALC, Inc. and GAF Corporation (the latex generators) at the
Site, but at other times they will leave these generators out of a
recital of generators whose wastes are at the Site. They tend to
ramble and be confused when recounting the Site history.
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8
Landfill (12/73) and started using the South Marble Top Landfill
(1/74). In addition, the state file on South Marble Top
documents the disposal of latex wastes at the Site during this
period. Accordingly, EPA has a substantial basis for believing
the Mydrin/ALC wastes were disposed of at the Site. Mydrin has
argued that, notwithstanding disposal at the Site, its wastes are
not hazardous and therefore it did not incur CERCLA liability.
Mydrin's Information Request response indicates that it generated
approximately 10 drums of waste water per month from rinsing of
mixing tanks; the waste water contained up to 8% suspended
solids. The solids consisted of latex (natural, neoprene, and
styrene-butadiene), calcium carbonate and clay (Kaolin), and
trace amounts of other materials. As noted above, styrene is one
of the hazardous substances that has been found in the
environment at the Site. Mydrin manufactures latex foam compound
for carpet backings, and water-based adhesives.
b. GAF Corporation
According to the Mathis Brothers, latex wastes from GAF
Corporation were also disposed of at the Site. GAF has
acknowledged that it sent a "non-hazardous rubber latex scrap"
from its former Chattanooga plant to the Mathis Brothers from
1970 until mid-1974. This would include a period (1974) that the
Mathis Brothers were disposing of latex wastes at the Site.
There is a reference in a GAF document submitted in response to
th<3 Information Request to a decision by the State of Georgia in
March 1974 to halt the landfilling of GAF's wastes at the Mathis
Brothers landfill. This is consistent with action taken by EPD
at the Site in early 1974 to halt latex disposal at the Site
because a milky fluid had been observed leaching into a nearby
stream. In other GAF documents, the GAF waste is referred to
variously as "solid and semi-solid" and "coagulated latex waste",
and as drums containing a "fluid/solid mixture" that could be
dumped from the drum. There are documents reflecting a dispute
between the Mathis Brothers and GAF when the Mathis Brothers were
upset because GAF was not honoring a "commitment" to continue to
use the Mathis Brothers disposal services in 1975. Waste
disposal questionaires completed by GAF for an industry survey
indicate "Mathis Landfill, Walker County, Georgia" as the
destination for disposal of 800 tons of waste disposed of from
1970 to 1974. A handwritten note on one copy of the form
indicates "handled in drums and dumped & drums returned to GAF".
GAF's Information Request response lists styrene as one of the
components of its latex waste. Styrene, as noted above, is one
of the hazardous substances that has been found in the
environment at the Site. Other elements contained in the waste,
in trace amounts, include phthalate esters "at less than 1%"
(phthalate esters are a listed CERCLA hazardous substance) and
PVC. GAF indicates that its waste streams included solid rubber
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9
particles which contaminated a latex emulsion and were filtered
out to produce a waste called "crum." Also, solid latex rubber
which coated the piping, filters and storage tanks was frequently
required to by scraped from the equipment and disposed. The
drums picked up by the Mathis Brothers contained a fluid/solid
mixture because they would be filled with "carom" and, upon
standing, an inch or so of liquid latex emulsion would come to
the top of the solid "crum.^ in addition, GAF, like ALC/Mydrin
generated a waste when it rinsed out storage tanks, pumps and
piping with water. GAF does not indicate, however, that the
rinseout was picked up by the Mathis Brothers. Latex
manufactured by GAF was, like Mydrin's), for use as a carpet
backing material.
3. Carpet Wastes (E. T. Barvick Industries, Inc.)
The generator of .carpet wastes at the Site, E.T. Barwick
Industries, Inc., is a defunct, bankrupt corporation. At present
EPA has no basis for claiming that the carpet wastes contain
CERCLA hazardous substances, pollutants or contaminants. These
wastes will be analyzed during the remedial action to determine
their status under CERLCA and to determine disposal options. In
particular, EPA will conduct further inquiries to determine if
hazardous metals found in carpet dyes are being released from the
carpet wastes. The carpet wastes are carpet trimmings, which
were generated when manufactured carpet was cut, and scraps and
strips of carpet resulted which were picked up by the Mathis
Brothers.
4. 1,4-Dichlorobenzene
There are a significant number of drums of 1,4-dichlorobenzene
that have been disposed of at the Site by an unknown generator
(see footnote 2, above). Velsicol has denied disposing of this
material. The material is almost pure product, so it may be off-
spec product that has been disposed, rather than a process waste.
This substance is reportedly used in carpet dyeing processes, so
it is may be attributable to a carpet industry .manufacturer in
the area, but no generator has been identified at this time.
C. Projected Remedial Action
EPA has taken Velsicol's final Feasibility Study (FS), which was
not approved, and EPA completed the FS and submitted proposed
remedies for the environmental problem at the Site. Notice of
the Feasibility Study and the Proposed Plan for the Record of
Decision was published in a Walker County newspaper on July 30,
1992. These two documents have been placed in the Administrative
Rejcord at Region IV and in an information repository in the
Chickamauga Public Library, at 100 Gordon Street, Chickamauga,
Georgia. These repositories also include the RI Reports and
other appropriate documents relating to selection of a remedy at
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10
the Site, The public comment period, aa extended pursuant to a
request by Velsicol, runs through September 26, 1992. The EPA
held a public meeting on August 6, 1992, to present thiB
information to the public and answer any questions. EPA will
place a transcript or tape of the public meeting in the
administrative record for the Site, in accordance with the
requirements of the HCP.
EPA's preferred remedial alternative, as identified in the
Proposed Plan, provides for:
• surface water diversion;
• excavation of landfill wastes;
• analysis of latex and carpet wastes to determine if they
contain CERCLA hazardous substances, pollutants or contaminants;
• incineration of landfill wastes found to contain CERCLA
hazardous substances, pollutants or contaminants (if the carpet
wastes are determined to contain unacceptable levels of metals,
the carpet wastes will be disposed of off-site in a RCRA Subtitle
C landfill instead of incinerated);
• incineration of soils which can not be separated from the
incinerated landfill waste*, including approximately 4,000 cubic
yards of landfill soil associated with the drums and spillage
during drum removal;
• bioremediation of approximately 140,000 cubic yards of
subsurface soils (with incineration of these soils to occur if
bioremediation is not successful);
• installation of interceptor trench for groundwater
collection with on-site storage and either onsite discharge (if
clean-up levels met) or off-site treatment and disposal; and
• institutional controls.
The estimated total cost of the Preferred Alternative outlined
above is $17,500,000.
After peer review of the Draft ROD, and consideration of comments
to the Proposed Plan, EPA Region IV will select a remedy and
issue a final ROD for the Site. The draft ROD is attached hereto
as Exhibt J. The final version of the ROD for the Site will
address contamination of soils and groundwater at the Site and is
intended to constitute a final clean-up for the Site.
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D. Statute of Limitations and Bankruptcy Court Deadlines
At present, there are no statute of limitation considerations
that apply to the past or present actions at this Site. No PRPs
identified for the Site are presently petitioners in any
bankruptcy proceeding. E. T. Barwick Industries, Inc. sent dry
carpet wastes to the Site and declared bankruptcy years ago. The
bankruptcy proceeding is apparently closed and the company
liquidated. However, no determination has been made that the dry
carpet wastes sent by this company contain CERCLA hazardous
substances, pollutants or contaminants.
E. Summary of Response Costs
The Region estimates that total unrecovered past costs
(contracts, travel, payroll, indirects) incurred by the
government as of July 31, 1992, are $263,652.66, which includes
$87,439.90 in as yet unbilled RI/FS oversight costs, and
176^212.76 in other past response costs. Attached hereto as
Exhibit D is the most recent cost summary for the Site. Pursuant
to the Consent Order, Velsicol agreed to pay oversight costs
incurred in connection with the RI/FS. Velsicol has been billed
annually for RI/FS oversight costs, but the 1992 oversight costs
have not yet been billed.
F. Administrative Record
The Administrative Record for this Site has been compiled and
indexed. The Administrative Record will be updated periodically
as additional documents are available. The Administrative Record
has been placed in the repository at Region IV, in Atlanta,
Georgia and in the Chickamauga Public Library, at 100 Gordon
Street, Chickamauga, Walker County, Georgia. A copy of the
Administrative Record Index for this Site is included as
Appendix E.
H. Contact with Natural Resource Trustees
Pursuant to CERCLA S122(j)(l), EPA will notify the Federal
Natural Resource Trustee, the United States Department of the
Interior, of upcoming negotiations with the PRPs regarding^the
release of hazardous substances that may have resulted in injury
to the natural resources under the trusteeship of the Federal
Trustee. EPA will also notify the State of Georgia Natural
Resource Trustee, the Georgia Department of Natural Resources.
I. Related Civil Actions
The Mathis Brothers and Velsicol have been involved in a private
party civil action related to the Site. The Mathis Brothers sued
Velsicol for a variety of tort and contract claims (alleging that
Velsicol misrepresented to the Mathis Brothers that its wastes
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were nonhazardous) and Velsicol counter-claimed with a private-
party CERCLA cost recovery action. The Court has granted
Velsicol's motion for partial summary judgment/ holding that the
Mathis Brothers are liable parties for response costs at the Site
under Section 107 of CERCLA.
J. Proposed Pre-referral Strategy
The following schedule details the proposed milestones for the
negotiations of a Consent Decree for this Site.
Pre-referral Litigation Report to HQ and DOJ 8-17-92
§122(e) Notice Letters issued ....9-30-92
Good Faith Offer Due .11-30-92
RO/RA Negotiation Period Concludes 1-30-93
The Region anticipates issuing notice letters pursuant to Section
122(e) whereby the Region will inform the PRPs that the standard
120-day moratorium period will be used for negotiating a Consent
Decree.
EPA 's goal in negotiations will be to obtain 100% reimbursement
of past costs and an agreement to perform or finance the RD/RA,
and pay EPA's oversight costs. The draft Consent Decree, which
is based on the national model/ without any significant
deviations, is attached hereto as Exhibit F« A draft Statement
of Work, based on a Regional Model, is attached hereto as Exhibit
Ei
Based on Velsicol's prior record in RD/RA negotiations using the
new national model, the Region believes it is unlikely that
Velsicol will sign a Consent Decree. At another site in Region
IV (Hardemann County)/ Velsicol refused to sign a Consent Decree
consistent with the national model and is instead conducting the
RD/RA pursuant to a Unilateral Administrative Order. Velsicol
hais stated in the past that its corporate position is to refuse
to sign the model Consent Decree. However, in response to an
inquiry from the Region, Velsicol has indicated its desire to
follow Section 122(e) special notice procedures in an attempt to
negotiate a Consent Decree which would include other PRPs.
K. Legal. Policy or Other Issues or Strategic
Considerations
Based on the facts of this case, one significant legal/policy
issue is the status of latex wastes under CERCLA. Although
different latex wastes probably vary substantially in their
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13
properties, EPA should develop a consistent approach for
determining whether to treat generators of latex wastes at
¦Superfund sites as liable parties.
A significant strategic consideration in this case is the fact
that Velsicol has previously demonstrated its unwillingness to
sign the new Model Consent Decree. Accordingly, EPA must develop
a strategy for motivating settlement by Velsicol arid for making a
Unilateral Adminstrative Order for RD/RA seem unattractive. EPA
should also be on guard to prevent RD/RA. negotiations from
becoming simply a mechanism for Velsicol to delay the clean-up of
the Site. Delay has seemed at times to be Velsicol's strategy
for minimizing its own costs. Any "good faith offer" submitted
by Velsicol should be scrutinized carefully, and commitments on
certain basic issues that EPA would require in any settlement
should be obtained before going forward with negotiations.
L. Special Heeds for Headquarters and DOJ support
At present, there are no special needs for support beyond what is
normally reguired under Pre-referral Negotiation procedures.
M. Regional Contacts
The Regional attorney assigned to the Site is Paul Schwartz
(404)347-2641, ext. 2282. The Remedial Project Manager for the
Site is Jane Spann, {404} 347-2643.
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LIST OF EXHIBITS
Exhibit A Proposed Plan. Fact Sheet dated July 1992.
Exhibit B Executive Summary for the Remedial
Investigation Report.
Exhibit C Executive Summary for the Feasibility Study.
Exhibit D Cost Summary
Exhibit E .......... Administrative Record Index
Exhibt F Draft CERCLA RD/RA Consent Decree to be
enclosed with notice letters.
Exhibit G Map of Site
Exhibit H Administrative Order on Consent for RI/FS
Exhibit I EPA Memorandum of Feb. 4, 1992 re: RI Report
Exhibit J Draft Record of Decision
Exhibit K DraffStatement of Work to be enclosed with
notice letters.
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yt05T'>,
i
3 UNITEO STATES ENVIRONMENTAL PROTECTION AGENCY
/
I SEP Ifi 1QM 345 COURTLAND street, n.e.
4RC l,U MW ATLANTA. GEORGIA 3036S
S. .(f REGION IV
• »«o;t
BY FEDERAL EXPRESS
John C. Cruden
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
10th and Pennsylvania Avenue, N.W.
Washington, D.C. 20530
Re: T H Agriculture & Nutrition Co. Superfund Site
Albany, Dougherty County, Georgia
Operable Unit 1
Pre-referral Litigation Report
Dear Mr. Cruden:
The purpose of this letter is to transmit to you the RD/RA pre-
referral litigation report for the above-referenced Site, in
accordance with the draft "Pre-Referral Negotiation Procedures
for Superfund Enforcement Cases" Memorandum, dated October 12,
1990. EPA issued a Proposed Plan for this Site on September 14,
1992. EPA expects to sign a Record of Decision for the Site in
November of 1992. If there is any additional information you
need at this time, please contact Paul Schwartz, Asisistant
Regional Counsel, at (404) 347-2641, ext. 2282 or Alan Yarbrough,
Remedial Project Manager, at (404) 347-2643.
Sincerely,
John R. Barker
Regional Counsel
i ^ * - .
Joseph R. Franzmathes, Director
Waste Management Division
Enclosure
cc: William A. White (w/encl.)
Enforcement Counsel for Superfund Enforcement, OB
Sally Mansbach, Director (w/encl.)
CERCLA Enforcement Division, OWPE
Karen Dworkin (w/encl.)
Environmental Enforcement Section, DOJ
Printed on Recycled Paper
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Pre-Referral Litigation Report
T H AGRICULTURE & NUTRITION CO. SITE
Operable Unit 1
I. Site Description and Summary of Site Hiatorv
The T H Agriculture & Nutrition Site (hereinafter, the "Site") is
located at 1401 and 1359 Schley Avenue in Albany, Georgia. For
an area location map and general Site map, see Exhibit G. The
Site consists of two adjacent former agricultural chemical
formulation facilities where various liquid and dry pesticides
and other agricultural chemical compounds were forumulated and
handled for a period of approximately thirty years. The Site
includes property currently owned by T H Agriculture & Nutrition
Company, Inc. ("THAN") at 1401 Schley Avenue (the "THAN
Property") and property currently owned by Mr. Larry Jones at
1359 Schley Avenue (the "Jones Property"). The THAN Property,
the western portion of the Site, consists of approximately seven
acres. There are presently no active business operations on the
THAN Property. The Jones Property, the eastern portion of the
Site, consists of approximately five acres, and contains an
active welding supply store.
The Site is bordered on the east by residences, on the south by
Schley Avenue, on the west by a Seaboard Coastline Railway line,
and on the north by a construction company (Spillman Brick
Company). To the west and northwest are lightly populated
residential area!s. Several motels are within a one mile radius
of the Site. Located approximately 300 feet south of the Site is
an elevated expressway and further south, a large commercial
section of Albany.
The THAN Property was used as a formulation and packaging plant
for agricultural chemicals from the 1950's until 1982. It
appears that the handling of agricultural chemicals commenced at
the THAN Property while it was owned by Walker Fertilizer
Company, from 1956 to 1958. Pesticide formulation operations
were then conducted by a succession of owners until business
operations at the THAN Property ceased in 1982. The various
owners of the THAN Property are listed below:
Owner Dates
Walker Fertilizer 1956-58
Company
Albany Chemical Co./ 1958-63
Taylor Chemical Co.
Current Status
Unknown
Changed name to Taylor
Chemical Co., dissolved
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Planters Chemical
Co.
Thompson Hayward
Chemical Co.
THAN
1963-67
1967-81
merged into Thompson-
Hayward Chemical Co.
in 1967
merged into THAN
1981-present current owner
Pesticides handled at the THAN Property include lindane, DDT,
toxaphene, methyl parathion, malathion, and parathion.
All of these pesticides are CERCLA hazardous substances. Dry
pesticides were formulated on the THAN Property during the 1960s
and 1970s (and possibly during the 1950s). Liquid pesticides
were formulated on the THAN Property from approximately 1973
until approximately 1978. During liquid formulation operations,
the blending tank was rinsed between batches with xylene, which
was then discharged into a drainage ditch on the property.
Wettable powder began replacing liquid pesticides in
approximately 1976. Very little pesticide formulating took place
after 1978. Business operations on the THAN Property ceased in
1982.
The Jones Property has a similar history. The Jones Property was
used, as a formulation and packaging plant for agricultural
chemicals from 1964 until 1981. It appears that the handling of
agricultural chemicals commenced at the Jones Property when it
was purchased by Southeastern Liquid Fertilizer Company, Inc., in
1964. Pesticide formulation operations (dry and liquid) were
then conducted by a succession of owners until 1973. In 1973,
the Jones Property was purchased by Gold Kist, Inc., which
discontinued pesticide formulation activities on the property,
but continued fertilizer, blending and fertilizer and pesticide
retail sales until 1981. The various owners of the Jones
Property are listed below:
Owner Dates
Southeastern Liquid 1964-?
Fertilizer Co.
Escambia Chemical Co. ?-April 1969
Eschemco Corporation
April 1969-
Dec. 1969
Current Status
Merged into Escambia
Chemical Co.
?-was owned by EBASCO,
which merged into Boise
Cascade Co.
changed name to Escambia
Chemical Co., merged into
Air Products and Chemicals,
Inc.
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3
Custom Farm
Services, Inc.
Gold Kist, Inc.
Larry Jones
1969-73
1973-85
1985-present
dissolved, was owned by
Cities Service, Inc., which
changed name to CanadianOXY
Offshore Production Co.
ongoing concern
current owner, owns
welding supply business
THAN conducted a removal on the THAN Property in 1984 to remove
surficial soils in accordance with a cleanup plan approved by the
Environmental Protection Division of the Georgia Department of
Natural Resources (EPD). The EPD-approved clean-up plan provided
for the removal of identified areas of soil contamination
exceeding clean-up criteria established by EPD. Removal
activities conducted with EPD oversight included demolition of
several buildings, excavation of selected surface soils and
subsurface disposal areas, installation of a perimeter fence, and
establishment of a vegetative cover. Excavated soils and debris
were disposed off-site in a permitted hazardous waste landfill.
The Site was listed on the NPL on March 31, 1989. The original
listing was based solely on the release of hazardous substances
from the THAN Property. THAN agreed to conduct the RI/FS
pursuant to an Administrative Order By Consent dated July 6,
1990. A copy of the Administrative Order is attached as Exhibit
f|. In the course of the Remedial Investigation, sampling on the
Jones Property established that the groundwater contamination
plume extends underneath the Jones Property and that there is
significant source contamination on the Jones Property.
Accordingly, EPA noticed the former and current owner/operators
of the Jones Property as PRPs at the Site. In addition, EPA
divided the Site into Operable Units: Operable Unit 1 addresses
soil contamination on the THAN Property and groundwater
contamination for the entire Site. Operable Unit 2 addresses
soil contamination on the Jones Property, which was not fully
characterized in the RI/FS for Operable Unit 1. This mini-lit
relates to the RD/RA for Operable Unit 1 only. Special notice
letters have been sent to the PRPs connected with the Jones
Property (Larry Jones, Boise Cascade Corporation, Air Products
and Chemicals, Inc., Hercules Incorporated, CanadianOXY Offshore
Production Company and Gold Kist, Inc.) to commence RI/FS
negotiations for Operable Unit 2, and a good faiith offer to
conduct that RI/FS was due on September 16, 1992. No good faith
offer was received before the deadline, and the Region is
planning to initiate a fund-led RI/FS for Operable Unit 2 in 1st
quarter, 1993. The Executive Summaries for the Final RI Report
for Operable Unit 1 and for the Final Feasibility Study for
Operable Unit 1 are attached as Exhibits B and C. respectively.
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A second removal was conducted at the THAN Property pursuant to a
Unilateral Adminstrative Order (UAO) Issued to THAN by EPA in
March of 1992. A copy of the UAO is attached as Exhibit J. That
removal action is currently ongoing. The second removal was
intitially proposed to EPA by THAN while THAN was conducting the
RI/FS for Operable Unit 1 at the Site. THAN sought EPA's
approval to conduct a removal so that THAN could minimize clean-
up costs by removing contaminated soil and disposing of it in a
permitted hazardous waste landfill before a national capacity
variance allowing land disposal of "Third Third wastes" expired
on May 8, 1992. EPA'a Emergency Response Branch evaluated THAN'a
proposal and determined that a removal was necessary in light of
the discovery during the RI/FS of a disposal pit containing pure
product and high concentrations of contamination under the former
wet mix building on the THAN Property. THAN then refused to sign
a removal consent order because THAN did not agree with EPA's
subsurface soil action levels. Accordingly, EPA issued a UAO for
a removal on the THAN Property.
Pursuant to the UAO, THAN has demolished and removed several on-
site structures, excavated and removed the first foot of soil in
areas of contamination, and excavated and removed contaminated
subsurface soil and debris to an action level for subsurface
soils of 100 ppm for total pesticides. Over 24,700 tons of soil
have been removed and shipped to a permitted hazardous waste
landfill. The UAO also requires THAN to backfill excavated areas
and place a uniform engineered clay cover over the removal area.
THAN has proposed to conduct on-site thermal desorption of
approximately 3,000 tons of excavated soil which contains greater
than 1,000 ppm of total pesticides. Ttiese soils have been
stockpiled and were not landfilled because they were not covered
by the national capacity variance noted above due to the high
concentrations of pesticides. The removal branch is reviewing
THAN's proposal.
Post-removal confirmation samples show that levels of
contamination in the soil on the THAN Property have been reduced
from greater than 1,000 ppm total pesticides in some locations to
levels of less than 25 ppm total pesticides. The top foot of
soil has been removed at approximately six of the seven acres on
the THAN Property, with specific areias being excavated to seven
feet below the surface.
II. The PRPs and the Evidence; Liability Issues
All of the PRPs for the Site are potentially liable because of
their status as current or former owner/operators. The PRPs
generally can be broken down into those who are owner/operators
in connection with the THAN Property and those who are
owner/operators in connection with the Jones Property*
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5
Except as otherwise indicated below, those PRPs who are
potentially liable in connection with the THAN Property can not
be held liable for the source contamination on the Jones
Property, and vice versa. The two source areas are divisible,
with soil contamination decreasing to nondetect approaching the
property line in either direction, and increasing again beyond
the property line.
All of the PRPs can be held- jointly and severally liable for the
groundwater contamination underlying the entire Site, however,
because there is a commingled plume underlying both properties,
and there is no way to divide the contamination attributable to
the source areas on the two properties. However, groundwater
flow is from the THAN to the Jones Property, and the majority of
the contamination in the groundwater plume appears to be
attributable to the THAN Property as a source. In addition, a
non-aqueous phase liquid (NAPL) of pure product, consisting of
xylene and various pesticides, floats above the groundwater at
the Site and constitutes the Site's most serious environemental
problem. The NAPL will be addressed by the same means as the
groundwater remedy and is attributable solely to operations on
the THAN Property. The strategy implications of these
circumstances are discussed in Section X, below. A discussion of
each PRP individually follows:
A. THAN Property
1. T.HVAgriculture & Nutrition Co., Inc.
THAN is potentially responsible as the current owner of the THAN
Property and as the owner/operator at the time of the disposal of
hazardous substances on the THAN Property. Hazardous substances
handled by THAN and its corporate predecessors on the THAN
Property include, among others, lindane, toxaphene, DDT and
xylene, all of which have been found in soil and groundwater at
the Site. There are no legal issues or known defenses affecting
THAN's status as a liable party.
2. North American Phillips Corporation (NAPC)
NAPC is the parent company of THAN. NAPC was also the parent
company of Planters Chemical Co. and Thompson-Hayward Chemical
Co., former owner/operators and predecessors by merger to THAN.
Although THAN (and its predecessors) was at one time a viable
business entity/ THAN at present is essentially a shell
corporation which exists only to own contaminated property and
carry out clean-up activities on property at which THAN or NAPC
has environmental Liability. THAN's assets appear to be limited;
therefore it is important to evaluate NAPC's possible parent
corporation liability at the Site. NAPC has previously indicated
that it had no involvement in the day to day operations of THAN
while operations were active at the Site. However, NAPC
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6
apparently exercises substantial control over and finances THAN's
current operations, and therefore may be liable as a current
owner. In connection with another site owned by THAN in Region
IV, EPA has issued a CERCLA Section 104(e) Information Request to
NAPC to develop: information relevent to NAPC's "parent"
liability. This information will be evaluated when received. In
the meantime, the Region intends to send special notice to NAPC
when RD/RA negotiations are commenced for Operable Unit 1 at the
Site.
3. Mr. J. M. Taylor
Mr. Taylor is potentially liable as a former owner/operator based
on his former status as majority owner and President of Taylor
Chemical Co., a now-dissolved former owner/operator of the THAN
Property. Mr. Taylor's status as a liable party would depend on
the extent of his involvement and control in the operations of
Taylor Chemical Co. at the THAN Property. Mr. Taylor has denied
having significant involvement in those operations; however, EPA
suspects that Mr. Taylor's involvement in operations at the THAN
Property may have been greater than he has admitted. Mr. Taylor
is a PRP at the Aberdeen NPL site in North Carolina in connection
with a former North Carolina pesticide company that was
affiliated with the plant on the THAN Property. Mr. Taylor is
elderly (about 90), has no assets (as determined in depositions
in connection with the Aberdeen site), and is in poor health.
Accordingly, the Region does not anticipate pursuing enforcement
against Mr. Taylor.
4. Hercules Incorporated ("Hercules")
Herucules owned toxaphene tanks on both the THAN and Jones
Properties. In response to a CERCLA Section 104(e) Information
Request, Hercules has confirmed that it sold toxaphene to
owner/operators of the THAN Property during the 1960s and 1970s.
Under Hercules' standard consignment agreement, which was entered
into with respect to the tanks on the Jones and THAN Properties,
Hercules maintained ownership of tanks on both properties and
maintained ownership of toxaphene in the tanks until the
customers withdrew the toxaphene from the tanks. Accordingly,
Hercules was the owner/operator of a "facility" (the tanks) from
which releases occurred at the Site. Significant toxaphene
contamination is present in the soils on both properties in the
areas where the toxaphene tanks were located. Attorneys for
Hercules have represented that former employees at the Site have
stated that Hercules delivered toxaphene to these tanks in bulk
tank trucks, transferring the toxaphene to the tanks through a
hose. When the hose was disconnected, the truck operator
reportedly drained the slough onto the ground. . This arguably
constitutes arranging for disposal so as to make Hercules liable
under a generator theory as well as an owner/operator theory.
Toxaphene has been found in both soil and groundwater at the
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Site. Copies of consignment agreements entered into by Hercules
with respect to the THAN and Jones Properties are attached as
Exhibit I.
The Hercules standard consignment agreement also contains
indemnification provisions making the consignee/purchaser liable
for damages resulting from loading or unloading of toxaphene.
This provision would be effective against THAN but would not
effect EPA's ability to treat Hercules as a PRP.
5. Other PRPs Connected to the THAN Property
Other former owner/operators include Walker Fertilizer Company,
and Albany Chemical Company, but it appears that these companies
no longer exist. Mr. Harry Blanton, a former plant manager, may
be liable as a former owner/operator in light of his involvement
in Site operations during Taylor Chemical Co.'a operation of the
THAN Property, but his current status is unknown. THAN has
represented that it can document that certain pesticides were
custom fbrmulated on the THAN Property for larger companies (e.g.
Mobil Chemical Co., U.S.S. Agriculture Co., Swift Agricultural
Chemicals and Estech Corporation.), such that those companies
could have incurred generator liability under ah Aceto theory.
See United States v. Aceto Agricultural Chemical Corp., 872 F2d
1373 (8th Cir. 1989). The Region indicated that it would be
willing to review documentation of such arrangements, but THAN
has not yet provided such documentation.
B. Jones Property
1. Larry Jones
Mr. Jones is the current owner of the Jones Property. EPA
anticipates that Mr. Jones will raise an innocent landowner
defense. Mr. Jones has stated that he did not know that
hazardous substances were disposed of at the Site when he bought
his property. There will be an issue as to whether Mr. Jones
"had reason to know of the disposal of hazardous substances on
his property" at the time he purchased it. Under $101(35)(B) of
CERCLA, Mr. Jones would have to demonstrate that he undertook, at
the time of purchase, "all appropriate inquiry into the previous
ownership and uses of the property consistent with good
commercial or customary practice in an effort to minimize
liability." THAN had already conducted removal activities on the
adjacent THAN Property when Mr. Jones purchased his property, and
there reportedly were monitoring wells visible on the adjacent
THAN Property. An inquiry into the prior owners activities on
the Jones Property would have revealed that pesticide formulation
operations had taken place. There is some question whether, in
1985, it would have been customary to determine the environmental
and operations history of the property. The immediately
preceding owner, Gold Kist, Inc., did not formulate pesticides on
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the Jones Property. Mr. Jones did obtain from Gold Kist a
promise to indemnify Mr. Jones against environmental liabilities
attributable to Gold Kist'a operations (most of the contamination
at the Jones Property is attributable to owner/operators that
preceded Gold Kist).
In addition to his possible status as an innocent landowner, it
also appears likely that Mr. Jones's resources are limited. Mr.
Jones's potential status as an innocent landowner, together with
his financial status, may justify treating him as a candidate for
de minimis landowner settlement. Any m-i nimi« or other
settlement with Mr. Jones should include provisions obligating
Mr. Jones to provide access to the Jones Property as necessary to
effectuate future CERCLA response actions.
2. Gold Kist, Inc. ("Gold Kist")
Gold Kist owned the Jones Property from April of 1973 until 1985.
Pesticide formulation operations were discontinued before Gold
Kist bought the property; however; fertilizer blending, and
retail sales of pesticides and fertilizers continued until 1981,
while Gold Kist operated a farm supply store. According to
interviews conducted by THAN and THAN's attorneys with a former
employee, Gold Kist sold dry, wettable powders and liquid
pesticides from the store, and also herbicides and fungicides.
According to the former employee, John Albritten, the liquid
pesticides were stored in metal containers which, on occasion,
were damaged or punctured during loading or unloading, and minor
spills resulted, which were contained. Also, bags containing dry
pesticides occasionally broke and spilled product. In addition,
a fish kill reportedly occurred when washout from fertilizer
tanks migrated from ditches on the property into a nearby creek.
Gold Kist has indicated in its response to a §104{e) Information
Request that in some instances spilled pesticides may have been
swept off of a loading dock. While these occurences have not
contributed greatly to the environmental problem at the property,
they do constitute the "disposal" of hazardous substances, and
they create a basis for imposing CERCLA joint and several
liability. According to John Albritten, the specific pesticides
and herbicides handled by Gold Kist included toxaphene, a
hazardous substance which has been found in soil and groundwater
at. the Site, and methyl parathion, malathion, ethyl parathion,
and diazinon, all of which are hazardous substances that have
been found in soil at the Site. Gold Kist indicated in its
$104(e) response that it had "no records identifying the specific
pre-packaged pesticides" it sold, but that it never handled DDT.
Gold Kist has requested consideration for resolving its liability
in a Tninimig settlement, min'im-i« treatment of Gold Kist
would increase the difficulty of obtaining a 100% settlement, as
there are liability problems affecting EPA's ability to recover
from some of the other PRPs, as discussed below, and all of the
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9
PRPs connected to the Jones Property have, like Gold Kist,
downplayed their respective contributions to Site contamination.
In addition, the de minimis authority seems to apply to small
generators and innocent landowners, not owner/operators. The de
minimis statute language, however, does not preclude
consideration of owner/operators under the mlnimifl generator
alternative. The relevant requirements for minimi a generator
treatment are as follows:
Both of the following are minimal in comparison to other
hazardous substances at the facility:
(i) The amount of the hazardous substances contributed
by that party to the facility.
(ii) The toxic or other hazardous effects of the
substances contributed by that party to the facility.
CERCLA §122(g)(1)(A).
The farm supply store was closed by Gold Kist in 1981, and Gold
Kist tried without success to sell the property for two years.
In 1983 Gold Kist opened a garden supply store on the property
("Golden Bell"), which served residential customers. In 1985,
Gold Kist sold the property to Larry Jones.
3. CanadianOXY Offshore Production Company
("CanadianOXY")
CanadianOXY iis potentially liable in connection with its former
ownership (under the name Cities Service Co.) of Custom Farm
Services, Inc. Custom Farm Services, Inc., owned the Jones
Property from December 1969 until April 1973, and, according to
former employees of Custom Farm Services interviewed by THAN,
pesticide formulation operations were active during this period,
but discontinued sometime before the property was sold to Gold
Kist in 1973. These employees have Indicated specifically what
pesticides were formulated during Custom Farm Service's ownership
of the Jones Property. The employees have indicated that washout
from formulation equipment was released into a "wash ditch" on
the property, and that spills occurred from time time.
Custom Farm Services, Inc. dissolved in 1977. CanadianOXY, which
did not own the Jones Property directly, is potentially liable
only under a parent corporation liability theory. Parent
liability attaches under CERCLA only if the. parent is so involved
in the activities of the subsidiary as to qualify as an
"owner/operator", or if a "piercing the corporate veil" case can
be made. At present, BPA does not have information to support a
parent liability case. Information provided by CanadianOXY in
response to an Information Request generally negates a parent
liability case, but is sketchy due to the lack of records and/or
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10
lack of recollection. However, interviews with former employees
might lead to information that would support a parent liability
casef if such employees can be located. Notwithstanding the
limited information presently available, EPA recommends that
CanadianOXY be included among special notice recipients. One of
the other PRPs, Boise Cascade Corporation, has expressed interest
in helping to develop a parent liability case against
CanadianOXY/ and the Region has indicated its willingness to work
cooperatively with the PRP in that effort (e.g. by issuing
additional Information Requests).
4. Air Products and Chemicals, Inc. ("Air Products")
. ¦ »
Air Products is potentially liable in connection with its former
ownership of Eschemco Corporation/Escambia Chemical Co.
("Escambia 2"). Escambia 2 acquired the Jones Property from
Escambia Chemical Co. ("Escambia 1") Ln April of 1969 and
immediately changed its name to Escambia Chemical Corporation.
Escambia 2 operated the facility until December 1969 when it sold
the property to Custom Farm Services, Inc. According to former
employees of Escambia 2 who were interviewed by THAN, pesticide
formulation operations were active during this, period (April to
December of 1969). These employees have not specifically
identified which pesticides were formulated on the Jones Property
during the period that Escambia 2 owned the property.
After Escambia 2 sold the property to Custom Farm Services, Inc.,
Escambia 2 merged into Air Products in June of 1971.
Accordingly, Air Products acquired the liabilities of Escambia 2
in the merger, and can be held directly liable as a former
owner/operator of the Jones Property. Air Products has stressed
the brief ownership period of only eight months as a
justification for keeping its participation in a settlement to a
small percentage.
There exists some basis for seeking to impose successor liability
on Air Products for the liability of Escambia 1, the immediately
preceding owner of the Jones P>ropeirty. When Escambia 2 acquired
the property, it kept the same name and the same employees, and
continued substantially the same operations as Escambia 1.
Successor liability can sometimes be imposed when a company holds
itself out as merely continuing the preexisting operations under
the "mere continuation" or "continuing business enterprise"
theory that has been applied by some courts. See United States
v. Distler. 31 B.R.C. 1092 (BNA) (W.D.Ky. 1990). Air Products
has voiced strong objections to this approach, arguing that it
should not apply because Air Products intended to sell this
business even before it was purchased and because of the brief
ownership period involved.
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11
5. Boiae Cascade Corporation ("Boise Cascade")
Boise Cascade is potentially liable in connection with its former
ownership (through its predecessor by merger, Electric Bond and
Share Company ("Ebasco")) of Escambia Chemical Corporation
("Escambia 1'*), which owned the Jones Property from May 18, 1964,
when the property was acquired by Escambia l's predecessor by
merger, Southeastern Liquid Fertilizer Company, Inc. ("SELFCO"),
until April 11, 1969, when the property was sold by Escambia 1 to
Escambia 2. According to former employees of Escambia 1 who were
interviewed by THAN, pesticide formulation operations were active
during this period (1964-69). These employees have identified
ethylene dibromide ("EDB"), endrin, toxaphene and DDT as
pesticides formulated, and xylene as a "carrier" for the
pesticide formulations. All of these are CERCLA hazardous
substances that have been found in soil and groundwater at the
Site.
As explained below, Escambia 1 eventually dissolved. Boise
Cascade, which did not own the Jones Property directly, is
potentially liable only under a parent corporation liability
theory. Parent liability attaches under CERCLA only if the
parent is so involved in the activities of the subsidiary as to
qualify as an "owner/operator", or if a "piercing the corporate
veil" case can be made. EPA does not have any information
indicating that Boise Cascade or its predecessor by mierger,
Ebasco, were involved in the operations of Escambia 2. Ebasco
functioned as a holding company, so it is unlikely that it was
involved in Escambia's operations to an extent that
owner/operator liability could be imposed. However, the
corporate history of Escambia 1 after the sale of assets to
Escambia 2 may provide a basis for "piercing the corporate veil"
and imposing liability on Boise Cascade.
In response to an informal inquiry from EPA, Boise Cascade has
indicated that Escambia 1 changed its name to Esca Rosa
Development Corporation ("Esca Rosa") immediately following the
sale of its assetB to Escambia 2 in April of 1969. As Esca Rosa,
Escambia 1 changed its business to that of a real estate holding
and development company. After Ebasco, the direct parent of
Escambia 1, merged into Boise Cascade on August 31, 1969, Esca
Rosa continued to exist as a direct subsidiary of Boise Cascade,
operating as a real estate development company. Esca Rosa then
liquidated its assets on December 31, 1972, but did not dissolve
until December 26, 1973. Accordingly, there was a one year
period from December 31, 1972 to December 26, 1973 when Esca Rosa
was a shell corporation, having a corporate existence but no
assets or business. This one-year shell period arguably
justifies the imposition of parent liability against Boise
Cascade under a "piercing the corporate veil" theory. Under
corporate law, factors which support piercing the corporate veil
include (1) when the parent completely dominates the subsidiary's
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12
activities/ (2) when the subsidiary is inadequately capitalized/
e.g./ when liabilities grossly exceed assets, (3) when the parent
disregards the corporate separateness of the subsidiary, e.g., by
failing to follow corporate formalities, etc. These factors
apparently were present during the year when Esca Rosa existed as
a shell corporation. A chart reflecting the corporate history of
Escambia 1 is attached as Exhibit K.
Boise Cascade has been the most cooperative PRP connected with
th? Jones Property and has demonstrated a desire to contribute
substantially to a PRP-led RI/FS and clean-up. It appears,
therefore, that Boise Cascade has recognized the viable "veil
piercing" case that could be made with respect to its ownership
of Escambia 1.
6. Hercules Incorporated
As noted above, Herucules owned toxaphene tanks on both the THAN
and Jones Properties. In response to a CERCLA Section 104(e)
Information Request, Hercules has confirmed that it sold
Toxaphene and. various herbicides to Escambia Chemical Corporation
from 1964 to 1968. Under Hercules' standard consignment
agreement, which was entered into with respect to the tanks on
the Jones and THAN Properties, Hercules maintained ownership of
tanks on both properties, and maintained ownership of toxaphene
in the tanks until the customers withdrew the toxaphene from the
tanks. Accordingly, Hercules was the owner/operator of a
"facility" (the tanks) from which releases occurred at the Site.
Significant toxaphene contamination is present in the soils on
both properties in the areas where the toxaphene tanks were
located. Toxaphene has also been found at low levels in the
groundwater under the Site. Attorneys for Hercules have
represented the former employees at the Site have stated that
Hercules toxaphene to these tanks in bulk tank trucks,
transferring the toxaphene to the tanks through a hose. When the
hose was disconnected, the truck operator reportedly drained the
slough onto the ground. This arguably constitutes arranging for
disposal so as to make Hercules liable under a generator theory
as well as an owner/operator theory. Copies of Hercules'
consignment agreements relating to the THAN and Jones properties
are attached as Exhibit I.
The Hercules standard consignment agreement also contains
indemnification provisions making the consignee/purchaser liable
for damages resulting from loading or unloading of toxaphene.
This provision would be effective against customers of Hercules
but would not effect EPA's ability to treat Hercules as a PRP.
III. Statute of Limitations/Bankruptcy Proceedings
There is no statute of limitations problem in this case. EPA has
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13
not received notice that any of the identified PRPs have filed
for bankruptcy.
IV. Reaconae Costa
The Region has estimated that total past costs (contracts/
payroll, travel and indirects) incurred by the government in
connection with Operable Unit 1 at the Site as of June 30, 1992,
were $202,846.62. Attached hereto as Exhibit D is the most
recent cost summary for Operable Unit 1 at the Site. This amount
includes RI/FS oversight costs that THAN has already agreed to
pay pursuant to the Administrative Order By Consent for RI/FS
entered into by and EPA. THAN has not yet been billed for RI/FS
oversight costs.
V. Administrative Record
EPA has compiled the Administrative Record for this Site. The
record is located in EPA-Region IV's library in Atlanta, Georgia
and in, the Dougherty Public Library at 300 Pine Avenue, in
Albany, Georgia 31701-2533. A copy of the Administrative Record
Index is attached as Exhibit B.
VI. The Remedial Action
The major components of the remedy identified as the preferred
alternative in the Proposed Plan are:
(1) Fencing of the Site and treatment facility;
(2) Extraction and on-site treatment of groundwater. If
proven effective during treatability studies, treatment of
contaminated groundwater will be by ultraviolet/oxidation
treatment with granulated carbon adsorption as a polishing
step if needed;
(3) Extraction and off-site incineration o£ NAPL;
(4) Vegetative cover over contaminated area and drainage
contraols to devert runoff from site; and
(5) Institutional controls, such aB deed and land-use
restrictions.
The present worth cost of this alternative is estimated at
$4,100,000. No action is proposed with respect to soils present
on the THAN Property because the removal has reduced
contamination in the soil to acceptable levels. A copy of the
Proposed Plan for Operable Unit 1 at the Site is attached as
Exhibit A.
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14
VII. Natural Resour-ee Damage Trustees
The Region will notify the Department of Interior/ National
Oceanic and Atmospheric Administration/ and the Georgia
Department of Natural Resources of the anticipated RD/RA
negotiations and activities. The Region will invite the trustees
to participate in negotiations pursuant to §122(j) at the time
notice letters are issued.
VIII. Related Criminal Investigations or Civil Actions
EPA is not aware of any.criminal investigations or criminal or
civil actions relating to the Site.
IX. Proposed Pre-Referral Strategy
The following schedule details the proposed milestones for the
negotiation of a Consent Decree for Operable Unit 1 at the Site.
Pre-Referral Litigation Report to HQ and DOJ: 9-25-92
Sl22(e) Special Notice Letter to PRPs 11-25-92
Good Faith Offer Due 1-25-92
RD/RA Negotiation Period Concludes 3-25-93
The Region anticipates following the standard Special Notice
procedures established in $122(e), providing for a 120-day
moratorium period for negotiations.
The goal of negotiations will be for EPA to obtain 100%
reimbursement of past costs and an agreement to perform or
finance the RD/RA. A copy of the draft Consent Decree to be
mailed with special notice letters is attached as Exhibit F. The
Consent Decree is based on the National Model. A draft Statement
of Work/ based on a Regional Model/ will be forwarded when
completed by the Remedial Project Manager for the Site.
The PRPs will be expected to engage in negotiations to reach an
acceptable allocation. However/ there is a significant
possibility that the PRPs will request that EPA assume a role in
allocating responsibility/ both within the Jones Group PRPs and
between the Jones Group and THAN.
A de min*nH« landowner settlement may be justified with respect
to Larry Jones, the current owner of the Jones Property/ who
claims he is entitled to an innocent landowner defense. Larry
Jones is currently unrepresented by counsel. He was represented
by Arnall, Golden and Gregory/ but was unable to afford continued
representation.
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15
X. Legal. Policy and Strategic Considerations
In addition to the liability issues noted in Section II above, a
number of allocation issues are anticipated by EPA. THAN is
likely to seek a significant contribution toward the groundwater
clean-up from the PRPs connected with the Jones Property because
the Jones Property is a significant source to groundwater
contamination. The PRPs connected to the Jones Property (the
"Jones Group"), however, argue that the groundwater contamination
is almost completely due to source contamination on the THAN
Property, and has been migrating towards the Jones Property. It
is true that the groundwater flow ia from the THAN to the Jones
Property, but the plume for certain contaminants appears to be
centered under, and attributable to source areas on, the Jones
Property. In particular, the DDT plume is centered underneath
the Jones Property, where high concentrations of DDT are present
in the subsurface soil at deep levels.1 The NAPL, however,
which is located almost; entirely on the THAN Property, appears to
be solely attributable to THAN Property sources, and is the most
serious environmental problem at the Site. The NAPL will be the
most costly aspect of the groundwater pump and treat program
called for in the Proposed Plan and draft ROD, because
treatability studies have indicated that only a very slow
recovery of the NAPL is possible. The Region estimates that 90%
of the groundwater remediation costs could fairly be allocated to
THAN.
If may be difficult to obtain a fair Jones Group contribution to
the costs of the groundwater remedy, not only because the Jones
Group has downplayed the Jones Property as a source to
groundwater, but also because the Jones Group has had difficulty
in coming up with an allocation internally among the Jones Group
PRPs for costs borne by the Jones Group alone (e.g. Jones
Property RI/FS costs). The Issues outlined in SII(B) above
(difficulty of establishing parent liability cases, brief
ownership periods of certain PRPs, differences in uses of the
property among PRPs, etc.) have complicated Jones Group
negotiations * Without equitable participation by the Jones Group
in the groundwater remedy, THAN may be reluctant to settle.
Another legal issue which may arise during RD/RA negotiations is
the objection of some of the Jones Group PRPs to EPA's decision
to address the Jones Property as part of the T H Agriculture and
Nutrition Co. NPL Site. The Jones Property was in the Pre-
remedial site assessment stage before the Jones Group was noticed
xThe Jones Group has also argued that the subsurface soil
contamination on the Jones Property resulted when contaminated
groundwater migrated to the Jones Property and deposited
contamination in soil when the groundwater table rose and fell.
EPA does not agree.
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16
aa PRPs for the THAN Site, but no HRS score had been developed.
The Jones Group PRPs have contended that aggregation of the sites
is inappropriate because they are in different stages of
investigation and remediation, and combining them will make
remediation less efficient (the opposite is probably true).
These PRPs claim that the different operations and histories on
the two properties justifies keeping them separate for
investigation and remediation purposes. The PRPs also argued
that there is no evidence that the Jones Property soil
contamination has contributed to the groundwater contamination.
EPA disagrees with these comments. It is EPA's position that no
"aggregation" of sites has occured. EPA has simply identified
the areal extent of contamination from the THAN Site during the
RI/FS. When an NPL site is listed, the listing does not
establish geographical boundaries. Geographical boundaries are
developed during the investigation of the Site. The CERCLA
definition of a "facility" includes any area where a hazardous
substance release "has come to be located." Here, the RI/FS
revealed that the groundwater plume extends from the THAN
Property, under the Jones Property. In addition, the soil
contamination on the Jones Property is a source to this
groundwater plume. Therefore the Jones Property is part of the
Site. No "aggregation" has occured; the Site boundaries have
simply been developed through investigation.
An additional legal issue that will arise during negotiations is
the scope of the covenant not to sue to be provided to THAN, on
one hand, and those PRPs connected with the Jones Property, on
the other. Paragraph 79 of the draft Consent Decree attached as
Exhibit F grants to THAN the full Covenant Not to Sue that is
applicable to final remedial actions at sites; the PRPs who have
liability in connection with contamination on the Jones Property,
however, are granted only the Operable Unit Covenant Not to Sue.
This is appropriate because Operable Unit 2, which will be
addressed in a later consent decree, addresses contamination for
which the Jones Property PRPs bear full responsibility, and THAN
has no responsibility. Accordingly, a full Covenant Not to Sue
is appropriate for THAN but not for the Jones Property PRPs.
XI. HO and DOJ Support
The Region does not anticipate any extraordinary needs for HQ or
DOJ support beyond those normally provided pursuant to Pre-
referral negotiation procedures.
XII. Regional Contacts
The Regional staff attorney assigned to the Site is Paul
Schwartz, (404) 347-2641, ext. 2282. The Remedial Project
Manager for the Site is Alan Yarbrough, (404) 347-2643.
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LIST OF EXHIBITS
Exhibit A Proposed Plan
Exhibit B Executive Summary for the
Final Remedial Investigation
Report
Exhibit C Executive Summary for the
Final Feasibility Study
Exhibit D Cost Summary
Exhibit E Adminstrative Record Index
Exhibit F .. Proposed Consent Decree
Exhibit 6 .... Map of Site and Site Area
Exhibit H RI/FS Administrative Order
By Consent
Exhibit I Hercules' Consignment
Agreements for Toxaphene
Exhibit J Removal UAO
Exhibit K Corporate History of
Escambia 1
Exhibit L Draft Record of Decision
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REFERRALS
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Q
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YELLOW FILE COPY
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLANO STREET N.E.
ATLANTA. GEORGIA 30365
MAR 3 1393
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Douglas E. Martin
Legal Department
BASF Corporation
100 Cherry Hill Road
Parsippany, Mew Jersey 07054
Re: Golden Strip Septic Tank Superfund Site,
Simpsonville, South Carolina
Dear Mr. Martin:
The purpose of this letter is to inform you, as the Chairman of
the Golden Strip Septic Tank Steering Committee, (the
"Committee") that BASF Corporation, Carolina Plating and Stamping
Corporation, Colonial Heights Packaging Inc., E-Systems, Inc.,
Metal Products Corp., and Sterling Winthrop Inc., (the "Settling
Defendants") are in violation of the terms of the Remedial Design
and Remedial Action Consent Decree for the Golden Strip Septic
Tank Superfund Site, C.A. No. 6:92-3056-20 ("Consent Decree").
Accordingly, stipulated and statutory penalties are accruing
against the Settling Defendants.
Pursuant to Section XVII (Reimbursement of Response Costs), the
Settling Defendants are required to remit payment to the United
States for Past Response Costs in the sum of $71,569.41, within
thirty (30) days of the effective date of the Consent Decree.
Pursuant to Section XXVIII (Effective Date), the effective date
of the Consent Decree is the date upon which the Consent Decree
is entered by the Court. The Consent Decree was entered on
January 5, 1993. Thus, the Settling Defendants payment of the
Past Response Costs was due to the United States on or before
February 4, 1993. Pursuant to Section XXI, stipulated penalties
began to accrue on February 5, 1993. As of March 1, 1993, the
stipulated penalties total $53,000.
Pursuant to Section XXI, the United States may also seek
statutory penalties under Section 109 of the Comprehensive
Environmental Response, Compensation, and Liability Act
("CERCLA"), 42 U.S.C. § 9609. Pursuant to Section 109(a)(1)(E)
of CERCLA, a civil penalty of not more than $25,000 per violation
may be assessed for the failure of the Settling Defendants to
comply with the terms of the Consent Decree. In addition, the
Printed on Recycled Paper
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2
United States may seek any other remedies or sanctions available
by virtue of the Settling Defendants' violation of the Consent
Decree.
Penalties will continue to accrue as set forth in Section XXI of
the Consent Decree until the Settling Defendants remit payment
for the Fast Response Costs in full compliance with Section XVII
and all other terms of the Consent Decree.
The United States considers the Settling Defendants' failure to
remit payment for the Past Response Costs as a flagrant disregard
of the terms of the Consent Decree. If the United States does
not receive payment from the Settling Defendants for the Past
Response Costs within ten days of your receipt of this letter,
EPA will consider initiating an enforcement action against the
Settling Defendants to recover the Past Response Costs and seek
the maximum penalties and sanctions allowed by law.
If you should have any questions, please contact Teresa Harris
Atkins in the Office of Regional Counsel at (404) 347-2641,
extension 2281. Your prompt attention to this matter is
appreciated.
Sincerely yours,
cc: Craig Zeller, EPA
Teresa Harris Atkins, EPA
Robert A. DeHoll
Leatherwood, Walker, Todd & Mann
100 East Coffee Street
P.O. Box 87
Greenville, South Carolina 29602
Arthur A. Vogel Jr.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 5302-4497
James W. Crowley
Vice President, Secretary and General Counsel
P.O. Box 660248
Dallas, Texas 75266-0248
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R
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CONSENT DECREE
TRANSMITTAL LETTERS
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^^5 *
s UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
R EG ION IV ,
iMAR 3 1 1993 345 COURTLAND STREET. N.E. \P\J r , rs A qJ , , ~~
0 1 ATLANTA. GEORGIA 30365 I KS-
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attached Consent Decree and Amendment. Once the concurrence has
been granted, please refer the Consent Decree and Amendment to
the Department of Justice for the filing of a civil action, the
lodging of the Consent Decree and the filing of the Amendment in
the U.S. District Court for the Southern District of Alabama,
Southern Division. Any inquiry related to this case may be
addressed to Mr. Paul Schwartz, staff attorney in the Office of
the Regional Counsel, FTS 347-2641, extension 2282.
Your prompt consideration of this matter is appreciated.
Attachments
cc: Myles E. Flint, Acting Assistant
Attorney General (w/o enclosures)
Karen Dworkin, Senior Attorney, DOJ (w/o enclosures)
Lawrence Puckett, Staff Attorney, DOJ
Bruce Diamond, OWPE (w/o enclosures)
William White, OE (w/o enclosures)
Karen Harrison, OE
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* Cardinal"
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.««0 SK,,
*
* £* Ti
| 5 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
34S COURTLAND STREET. N.E.
ATLANTA. GEORGIA 30365
[AUG 2'i 1994.
MEMORANDUM
SUBJECT: Revised CERCLA Referral Document Distribution
FROM: Phyllis P. Harris, Chief yjf,.// T\J/,AA tt/\
CERCLA Branch WOA/UjQ^
TO: All ORC Employees
The purpose of this memorandum is to provide a reference for
ORC attorneys who have CERCLA cases that require direct or
indirect referrals to the U.S. Department of Justice and the
Office of Enforcement and Compliance Assurance (OECA). It has
been revised to reflect OECA reorganization, and supersedes the
original memorandum on this subject dated May 5r 1994. Included
are instructions on which document to copy to whom, along with
necessary titles and addresses. Additionally, model letters are
provided for each of the four principal categories of referrals.
/ A reference copy of this listing has been placed in the
library. Please see Tom Hernandez regarding any changes that may
occur in the future.
Attachment
Printed C
^ecyc'-.v r2do¦¦
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t. n-i rgct Civil Referrals for Coat Recovery
A. BY REGULAR MAIL TO DO J (We get credit when this leaves Region
IV)
Original Letter from Regional Administrator to:
Lois Schiffer
Acting Assistant Attorney General
U.S. Department of Justice
Environment and Natural Resources Division
10th & Pennsylvania Ave., NW
Room 2143
Washington, DC 20530
cc(v/enclosures): DOJ Senior Attorney
[Robert Homiak for MS, NC, SC, FL; Karen Dworkin for TN, KY,
AL, GA]
U.S. Department of Justice
Environmental Enforcement Section
Environment and Natural Resources Division
P.O. Box 7611
Ben Franklin Station
Washington, DC 20044
B. BY PRIORITY POUCH MAIL TO HQ
cc(w/o enclosures):
Bruce M. Diamond, Director (5501)
Office of Site Remediation Enforcement
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
cc(w/enclosures):
Bruce R. Kulpan, Chief (2244)
Regions 3, 4 & 8 Branch, Regional Support Division
Office of Site Remediation Enforcement
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
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II. Pre-Referrals (PRN's or "Minl-Lits") for RD/RA
A. BY REGULAR MAIL TO DOJ (We get credit when this leaves Region
IV)
Original Letter and Original PRN from Regional Counsel and
Director, Waste Mgt. Division to:
Joel M. Gross, Chief
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, DC 20044-7611
cc(w/enclosures): DOJ Senior Attorney (See Section 1(A))
B. BY PRIORITY POUCH MAIL TO HQ
Same instructions as in Section 1(B)
III. Transmittal of Signed CD's with "Ten-Points" (RD/RA or Cost
Recovery) for Cases Directly Referred to DOJ
A. BY REGULAR MAIL TO DOJ (We get credit when this leaves Region
IV)
Original Letter from Regional Administrator with copies of
(l) "Ten-Point"; (2) Draft Complaint; and (3) CD to:
Lois J. Schiffer
Assistant Attorney General
Environment and Natural Resources Division
U.S. Department of Justice
10th & Pennsylvania Ave., NW
Room 2143
Washington, DC 20530
cc: letter & original of all documents to:
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, DC 20044
Attention: George J. Schubert
Case Management Unit
Room 13077
cc(w/o enclosures): DOJ Senior Attorney (See Section 1(A))
-------
cc(w/o enclosures): DOJ Staff Attorney
B. BY PRIORITY PODCH MAIL TO HQ
Same instructions as in Section 1(B), with one addition:
cc(w/o enclosures): OSRE Staff Attorney
IV. Indi rant Referrals of Cost Recovery Actions Tr-anwiwi -Ht-.al
of CD'a with "Ten-Pointa" IRD/RA or Coat Recovery) Where
Concurrence Authority Is Bpf-ainwj by HO PnranaTif <-.n Delegation
A. BY PRIORITY POUCH MAIL TO HQ
Original Memorandum from Regional Administrator, with original
of "Ten-Point", plus copies of CD and draft Complaint to:
Steven A. Herman (2211)
Assistant Administrator for Enforcement
and Compliance Assurance
Office of Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
cc(w/attachments; receives original of CD): OSRE Staff
Attorney
cc(w/o attachments):
Bruce M. Diamond, Director (5501)
Office of Site Remediation Enforcement
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
cc(w/o attachments):
Bruce R. Kulpan, Chief (2244)
Regions 3, 4 & 8 Branch, Regional Support Division
Office of Site Remediation Enforcement
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
B. COURTESY COPIES BY REGULAR MAIL TO DOJ (We get credit when
this leaves HQ)
cc(w/o attachments): DOJ Staff Attorney
cc(w/o attachments): DOJ Senior Attorney (see Section 1(A))
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cc (w/o attachments):
Lois Schiffer
Acting Assistant Attorney General
Environment and Natural Resources Division
U.S. Department of Justice
10th & Pennsylvania Ave., NW
Room 2143
Washington, DC 20530
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
34S COURT LAND STREET. N.E.
ATLANTA. GEORGIA 30365
sep c 1 m
4RC
Lois Schiffer
Acting Assistant Attorney General
U.S. Department of Justice
Environment and Natural Resources Division
10th & Pennsylvania Ave., NW
Room 2143
Washington, DC 20530
SUBJ: Civil Referral - Cost Recovery
XYZ Superfund Site
XYZ, XYZ County, Georgia
Dear Ms. Schiffer:
The purpose of the enclosed referral is to request that the
Department of Justice file a civil action pursuant to Section 107
of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. § 9601 et
sea.. to obtain reimbursement for removal expenditures incurred
by the Environmental Protection Agency at the XYZ Site near XYZ,
Georgia. [This referral also requests that the Department of
Justice seek punitive damages under Section 107(c)(3) of CERCLA,
42 U.S.C. § 9607(c)(3).]
The Region IV attorney assigned to this case is ,
(404) 347-2641, ext. , and the Region IV enforcement officer
assigned to this case is , (404) 347-5059.
Sincerely
John H. Hankinson, Jr.
Regional Administrator
Enclosures (Need to List)
cc: Bruce R. Kulpan, EPA/OSRE (w/enclosures)
Bruce M. Diamond, EPA/OSRE (w/o enclosures)
[DOJ Senior Attorney], DOJ/EES (w/enclosures)
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£ £5 T*
I5SZZ/
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 4
XS COURTLAND STREET. N.£.
ATLANTA. GEORGIA 30365
4RC
Joel M. Gross, Chief
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, DC 20044-7611
SUBJ: Pre-Referral Litigation Report
[XYZ] Superfund Site
[City], [ ] County, [Stake]
Dear Mr. Gross:
The purpose of this letter is to transmit to you the RD/RA
Pre-Referral Litigation Report for the above-referenced Site, in
accordance with the "Pre-Referral Negotiation Procedures for
Superfund Cases" memorandum, dated October 12, 1990. EPA-Region
4 expects to sign a Record of Decision for this Site by
--, 1996.
If there is any additional information you need at this
time, please contact Assistant Regional Counsel, at
(404) 347-[xxxx], ext. , or the Remedial Project Manager,
, at (404) 347-[aocxxl .
Sincerely,
William D. Anderson
Acting Regional Counsel
Richard D. Green
Acting Director
Waste Management Division
Enclosure
cc: Gerald M. Clifford, EPA/OSRE (w/o enclosure)
Bruce R. Kulpan, EPA/OSRE (w/enclosure)
[DOJ Senior Attorney], DOJ/EES (w/enclosure)
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLANO STREET. N.E.
ATLANTA. GEORGIA 30365
HR !»
4RC
Lois Schiffer
Acting Assistant Attorney General
U.S. Department of Justice
Environment and Natural Resources Division
10th & Pennsylvania Ave., NW
Room 2143
Washington, DC 20530
SUBJ: CERCLA §§ 106 and 107 Consent Decree for RD/RA
XYZ Superfund Site
XYZ, XYZ County, Georgia
Dear Ms. Schiffer:
The purpose of this letter is to refer the above-referenced
matter for the filing of a Complaint and the lodging of the
Consent Decree for entry in the District of the State of
The Decree has been executed by the Defendants and by
Region IV.
Enclosed for your review are copies of: (1) the Consent
Decree; (2) the "Ten-Point" Settlement Analysis assessing the
proposed settlement; and (3) the draft Complaint. The originals
of these documents have been sent to Mr. George Schubert of your
staff to be logged into the EES Tracking System and delivered to
the DOJ Trial Attorney.
of the Environmental Enforcement Section, is the
DOJ Trial Attorney assigned to this case. The Region IV attorney
assigned to this case is . He/she can be
contacted at (404) 347-2641, ext. .
Sincerely,
John H. Hankinson, Jr.
Regional Administrator
Enclosures
cc: Bruce R. Kulpan, EPA/OSRE (w/enclosures)
Bruce M. Diamond, EPA/OSRE (w/o enclosures)
[OSRE Staff Attorney), EPA/OSRE (w/o enclosures)
[DOJ Senior Attorney], DOJ/EES (w/o enclosures)
fDOJ Staff Attorney], DOJ/EES (w/o enclosures)
George J. Schubert, DOJ/CMU (w/original CD)
-------
%
ISEZj
4,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLANO STREET. N
ATLANTA. GEORGIA 30365
m It"*
4RC
MEMORANDUM
SUBJECT: Consent Decree for Remedial Design/Remedial Action
(RD/RA) - Operable Unit —
The purpose of this memorandum is to formally request
Headquarter's concurrence on the above-referenced matter. The
Record of Decision issued by Region IV on —f 1994,
selected a remedy for Operable Unit — at the Site that is
expected to cost $— million. In combination with the cost of
other Operable Units at the Site, the cost of remedial work at
the Site will exceed the amount of $60 million in response costs.
Pursuant to the June 17, 1988, memorandum entitled "Revision of
CERCLA Civil Judicial Settlement Authorities Under Delegation 14-
13-B and 14-14-E", OSWER Directive 9012.10-A, Headquarters'
concurrence is required for all RD/RA Consent Decrees at Sites
that require response activities exceeding $60 million.
Attached you will find the original of the "Ten-Point"
Settlement Analysis required by the Agency's procedures, and
copies of the Consent Decree and the draft Complaint that will be
used to file the civil action required to lodge the Consent
Decree in Court. The original of the Consent Decree, including
the signature pages, has been sent to f the Office of
Enforcement's staff attorney that participated in the RD/RA
negotiations related to this case.
For the reasons provided in the "Ten-Point" Settlement
Analysis, the Region requests Headquarters' concurrence and
approval of the attached Consent Decree. Once the concurrence
has been granted, please refer the Consent Decree to the
Department of Justice for the filing of a civil action, and the
lodging of the Consent Decree in the U.S. District Court for
the District of the State of , Division.
XYZ Superfund Site
XYZ, XYZ County, Georgia
FROM: John H. Hankinson, Jr.
Regional Administrator
TO:
Steven A. Herman
Assistant Administrator for Enforcement
and Compliance Assurance
-------
Any inquiry related to this case may be addressed to
, staff attorney in the Office of the Regional Counsel.
He/she can be contacted at (404) 347-2641, ext. .
Your prompt consideration of this matter is appreciated.
Attachments
cc: Lois Schiffer, DOJ/ENR (w/o attachments)
[DOJ Senior Attorney], DOJ/EES (w/o attachments)
[DOJ Staff Attorney], DOJ/EES (w/o attachments)
Bruce M. Diamond, EPA/OSRE (w/o attachments)
Bruce R. Kulpan, EPA/OSRE (w/o attachments)
[OSRE Staff Attorney], EPA/OSRE (w/attachments)
-------
sr<>
0 A. J
i ^
i
| £ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
,0^ REGION IV
bbOu
345 COURTLAND STREET. N.E.
lMM ATLANTA. GEORGIA 30365
SEP 1 9 1991
4RC
Honorable Barry M. Hartman
Acting Assistant Attorney General
United States Department of Justice
Environment and Natural Resources Division
10th and Constitution, N.W.
Room 2603
Washington, D.C. 20530
Re: Civil Referral
Basket Creek Drum Disposal Site
Douglas County, Georgia
Dear Mr. Hartman:
The purpose of this letter is to request that the Department of
Justice file a civil action pursuant to Sections 106 and 107 of
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. §9601, et
se'q., to obtain reimbursement for removal expenditures incurred
by EPA at the Basket Creek Drum Disposal Site in Douglas County,
Georgia, and to recover penalties and punitive damages for
refusal to comply with an Order issued pursuant to Section 106
of CERCLA. This case is referred pursuant to EPA's
Non-Complier/Non-Settlor Initiative.
The Regional Attorney assigned to this case is Paul Schwartz,
(FTS) 257-2641 and the Regional technical person assigned to
this case is Tex Ann Reid, (FTS) 257-5059.
Sincerely,
Qk&u*k> JnrTMuA fn
Greer C. Tidwell
Regional Administrator
Enclosures
cc: William White
Bruce M. Diamond
Robert Homiak
^ SdKir 4
Printnrl nn
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CIVIL LITIGATION REPORT
Region IV
Basket Creek Drum Disposal Site
Douglas County, Georgia
EPA ID Number GAD-980843833
Action: CERCLA Sections 106 and 107
42 U.S.C. Sections 9606 and 9607
Jurisdiction: Northern District of Georgia
Atlanta Division
Defendant:
1. Young Refining Corporation
7982 Huey Road
Douglasville, Georgia 30134
Regional Contacts:
Paul Schwartz
Office of Regional Counsel
Hazardous Waste Law Branch
EPA, Region IV
FTS 257-2641, ext. 2269
Tex Ann Reid
Waste Programs Branch
South Cost Recovery Unit
EPA, Region IV
FTS 257-5059
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DATA SHEET
I. Statutory Basis
Section 107 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, CERCLA, 42 U.S.C.
§9607, as amended, is the statutory authority upon which
the recovery of costs and punitive damages in this matter
is based. Section 106(b) of CERCLA, 42 U.S.C. § 9606(b)
is the statutory authority upon which the recovery of
penalties in this matter is based.
II. Defendants
The Region issued a Section 106 removal order to four (4)
potentially responsible parties (PRPs), of which one is
proposed as a defendant in this action. The proposed
defendant is Young Refining Corporation (a generator),
which arranged for the disposal of hazardous substances
that were disposed at the Site. Two of the PRPs named in
the Order, Chem-Nuclear Services, Inc., and Continental
Trading Company (both generators) indicated that they
would comply with the Order. Chem-Nuclear Services, Inc.
is conducting the removal as ordered, without contribution
from any other PRPs. Continental Trading Company is
apparently willing to contribute a small portion of
clean-up costs, but has not reached an agreement with
Chem-Nuclear. Two PRPs refused to comply with the Order:
Young Refining Corporation (the proposed defendant) and
Bartlett B. Hulsey (a transporter). Hulsey does not
appear to have significant assets. The Site owner, Mrs.
Harriet Foster, is a residential landowner who did not
contribute to the release or threat of release at the
Site. Therefore, the Region has not taken enforcement
action against her pursuant to EPA's "Policy Towards
Owners of Residential Property at Superfund Sites."
III. Basis of Action
The proposed defendant, Young Refining Corporation ("Young
Refining"), refused without sufficient cause to comply
with a Unilateral Administrative Order which directed it
to conduct a removal action at the Site. The Defendant
is therefore subject to penalties of up to $25,000 for
each day of noncompliance, pursuant to CERCLA Section
106(b). The Defendant may also be subject to punitive
damages in an amount at least equal to, and not more than
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three times, the amount of any costs incurred by the Fund
as a result of such refusal to comply with the Order,
pursuant to CERCLA Section 107(c)(3). This may apply to
EPA's enforcement costs, which arguably resulted from the
Defendant's refusal to comply. In addition, the United
States has incurred oversight and other response costs as
a result of the release or threatened release of hazardous
substances at the Site. The Defendant is liable for these
costs under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a).
IV. Relief Sought
This referral requests that a civil action be initiated to
recover penalties under CERCLA Section 106(b) against
Young Refining for its failure to comply with the CERCLA
Section 106 Administrative Order issued by EPA on
April 11, 1991. This referral also requests that the
civil action seek treble damages under CERCLA Section
107(c)(3) for the failure to comply with the Section 106
Order. In addition, this referral requests that the civil
action seek to recover oversight and other response costs
incurred by EPA in response to the release of hazardous
substances at the Site. As of September 11, 1991, such
costs plus interest totalled $47,357.98, and such costs
are increasing as EPA continues to oversee removal work at
the Site (removal work commenced on September 9, 1991) and
as the enforcement costs of this referral accrue.
V. Contacts with Proposed Defendant
In early 1991, EPA identified Young Refining as a PRP and
began informal discussions with Young Refining. In a
meeting at EPA on February 1, 1991, and in a written
response to an informal information request,
representatives of Young Refining acknowledged that it
arranged for the disposal of hazardous substances which
were dumped at the Site.
On April 11, 1991, EPA Region IV issued a Unilateral
Administrative Order under Section 106 of CERCLA to Young
Refining and three other PRP's for the removal of
hazardous substances located at the Site. Young Refining
submitted a written response to the Order, raising various
objections to the Order and indicating that it did not
intend to comply. One of the PRP's, Chem-Nuclear Systems,
Inc. (a subsidiary of Chemical Waste Management, Inc),
agreed to conduct the removal in compliance with the
Order, under the direction of EPA. Removal work commenced
on September 9, 1991.
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On May 15/ 1991, EPA issued an Information Request to the
Young Refining pursuant to Section 104(e) of CERCLA. On
June 22, 1991/ EPA received Young Refining's response to
EPA's May 15 Information Request. In its response, the
Defendant stated/ inter alia, that its "previous alleged
admissions of responsiblity, if any, regarding the alleged
incident of disposal were made in error." A follow-up
Information Request was mailed by EPA in August 1991
seeking supplemental financial information.
On May 29, 1991, EPA sent a letter to the Defendant
addressing the various objections raised by the Defendant
in its response to the Unilateral Administrative Order.
EPA informed Young Refining that it did not find any of
its objections to the Order to have merit, or to
constitute "sufficient cause" for noncompliance with the
Order. EPA further informed Young Refining that its
noncompliance could therefore subject the Defendant to
penalties and treble damages. On September 13, 1991, EPA
received a supplemental response to the Order from Young
Refining restating its objections to the Order.
National or Precedential Issues
This case presents the issue whether EPA can jointly order
multiple PRPs to perform a response action under CERCLA
without specifying the acts to be performed individually
by each PRP. In its response to the Unilateral
Administrative Order, Young Refining raised, as one of the
grounds for noncompliance, the ground that the Order was
invalid because PRPs cannot be jointly and severally
ordered to perform a response action. Young Refining
cited as support for this position United States v.
Strinafellow. 20 E.R.C. 1905, 1910 (BNA) (C.D. Cal. 1984),
which does support the Defendant's position. Strinafellow
held that CERCLA joint and several liability does not
apply in Section 106 injunctive actions. Rather, under
Strinafellow. when more than one respondent is named in a
Section 106 order, the order must specify the individual
actions to be taken by each respondent; the respondents
cannot be ordered as a group to perform a response
action. No other cases directly addressing this issue
have been identified, although Section 106 orders are
regularly issued to multiple PRPs by EPA and have been
enforced in the courts. It would benefit the Agency to
have a court opinion directly overruling the Strinafellow
holding so that PRP's wishing to avoid compliance cannot
assert this ground in the future.
In addition to the correctness of the Strinafellow
holding, this case also raises the issue whether Youna
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Refining's reliance on the Strinqfellow decision as a
basis for non-compliance with the Order constitutes
"sufficient cause" so as to defeat a penalty or treble
damage action. Young Refining could argue that, even if
Strinqfellow is wrong, Young Refining's reliance on what
it perceived to be sound authority was a reasonable ground
for not complying.
This case also presents the issue whether EPA can recover
penalties under Section 106(b) of CERCLA based on
non-compliance with a Section 106(a) order when it is not
also seeking in the court action to compel compliance with
the terms of the order. Section 106(b) authorizes
penalties "in an action ... to enforce such order." This
language could be read in two ways: (1) that an action "to
enforce" the order only includes actions seeking to compel
performance, or (2) that an action "to enforce" the order
also includes actions seeking solely to penalize a
respondent for noncompliance. EPA Draft Enforcement
Guidance contemplates "penalties alone" actions under
Section 106(b), but there is little precedent on this
issue. In a recent case, penalties were awarded to EPA in
a "penalties alone" action under Section 106(b) where the
work the defendant had been ordered to perform was
performed by other, cooperative PRPs which had also been
named in the order. See United States v. Lecarreaux, Civ.
No. 90-1672 (HLS) (D.N.J. July 30, 1991).
This case also presents the issue of what costs may be
trebled in a treble damage claim under Section 107(c)(3)
of CERCLA. Section 107(c)(3) provides for punitive
damages of up to three times "the amount of any costs
incurred by the Fund as a result of such failure to take
proper action" when a PRP fails to comply with a Section
106 order. In this case, another PRP carried out the
removal in compliance with the Order, and EPA's oversight
costs cannot be trebled because they would have been
incurred even if Young Refining had complied with the
order. EPA can argue, however, that its enforcement costs
may be trebled because EPA would not have had to bring the
penalty action if Young Refining had complied with the
Order.
VII. Date of Receipt of Evidence
On March 18, 1976, Douglas Daniell, a Douglas County
Health Department official reported to the Georgia
Department of Natural Resources, Environmental Protection
Division (EPD) the illegal dumping of 80 drums into a
ravine at the Site. Mr. Daniell had discovered the
dumping in progress on the night of March 17, 1976. When
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Mr. Daniell arrived in response to'a citizen's complaint,
there were two tractor-trailers at the Site . One trailer
contained 80 drums which persons were preparing to dump
into the ravine; Mr. Daniell prevented the dumping of
these drums. The other trailer had been emptied of its
contents (approximately 80 drums). A bulldozer was
covering the dumped drums with dirt. The next day EPD
officials sampled two of the drums remaining on the
trailer, and one sample contained 50% orthochlorophenol.
Acetone, isopropanol, chloroform, tetrachloroethane,
phenol and dichlorophenol were also present in these
samples. Soupy conditions prevented sampling of the drums
in the ravine. The two EPD officials who did the sampling
suffered clinical effects from exposure to the liquid
wastes in the disposal area. One of the men, Dan Hull,
suffered respiratory distress the evening of the sampling,
while swimming. Mr. Hull's shoes were saturated with the
liquid waste and were still emitting strong vapors one
week later, and he was advised to discard the shoes. The
other EPD official, James Benson.felt ill for two or three
days, and the odor of the vapors was still being emitted
from his skin twenty-four hours after the sampling.
State records from the EPD investigation of the dumping,
together with records and information provided to EPA in
early 1991 by Young Refining and Continental Trading
Company, form the basis for EPA's identification of Young
Refining as a PRP. In addition, an affadavit obtained
from Mr. Daniell identifies Young Refining as a PRP.
Based on records identifying substances shipped to Young
Refining prior to the illegal dumping, and based on EPD
sampling of drums which persons were preparing to dump at
the Site when Douglas Daniell interrupted them, there is
evidence that the buried drums may contain the following
hazardous substances:
2,4-dinitrophenol
sulfuric acid
dodecylbenzenesulfonic acid
1,1,1-trichloroethane
orthochlorophenol
tetrachloroethane
A Sampling Investigation was conducted in March of 1990
for EPA Region IV by Roy F. Weston, Inc., Technical
Assistance Team. The consistent presence of drums
prevented the taking of subsurface soil samples in the
Drum Disposal Area. Trichloroethene was detected in the
landowner's well at 5 ug/kg, which is the Maximum
Contaminant Level (MCL) under drinking water standards.
Additional sampling of the landowner's well in 1991
confirmed the presence of trichloroethene at a level of 5
ug/kg, and also noted the presence of 1,2-dichloroethene
at a level of 2 ug/kg.
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Additional sampling is being conducted during removal
activities by Chemical Waste Management, Inc. Such
removal activities commenced on September 9, 1991, and
results should be available shortly.
VIII. Date Support Documents Received
Intermediate cost documentation has been ordered for costs
incurred through July 31, 1991, and will be forwarded when
it is received by the Region. A summary of costs incurred
through September 11, 1991, is included as Exhibit 29 to
this referral. Cost documentation will be updated and
forwarded as costs continue to accrue.
IX. Referral Date
September 19, 1991
X. Other Significant Case Aspects
This case is referred as part of the Agency's
Non-complier/Non-settlor Initiative. The proposed
defendant admitted facts establishing its liability until,
in response to a Unilateral Administrative Order, it
denied that it was a PRP and refused to comply with the
Order. Another PRP, Chem-Nuclear Services, Inc., has
conducted the removal as directed, and is not proposed as
a defendant. Accordingly, EPA's costs are relatively low,
and the primary monetary recovery sought is in penalties.
There has been a lot of media and community attention
focused on this case, and it is therefore a good vehicle
for EPA to send the message to the general public and PRP
community that non-compliers will be aggressively pursued.
XI. Lead Regional Personnel
Paul Schwartz
Office of Regional Counsel
Hazardous Waste Law Branch
FTS/257-2641, ext. 2269
Tex Ann Reid
Waste Management Division
Waste Programs Branch
FTS/257-5059
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TABLE OF CONTENTS
Page
I. SYNOPSIS OF THE CASE 1
II. SIGNIFICANCE OF THE REFERRAL 4
III. STATUTORY BASIS OF REFERRAL 4
A. Applicable Statutes 4
B. Jurisdiction arid Venue 8
C. Cross-Media Coordination 8
IV. DESCRIPTION AND HISTORY OF THE SITE 8
A. Site Location 8
B. Site Historv/Facilitv Processes 8
C. Ranking of the Site on the NPL 11
D. Environmental Problem Posed bv the Site 11
V. STATUS OF CLEANUP PROCESS 12
A. Cleanup Activites bv Parties other than EPA 12
1. Description of the Removal Action 12
2. Community Relations 13
3. ATSDR Evaluation 13
4. Status of the Administrative Record 14
VI. NATIONAL RESOURCE DAMAGE CLAIMS 14
VII. PRIMA FACIE CASE. LIABILITY AND
DESCRIPTION OF PROPOSED DEFENDANT
AND MISCELLANEOUS ISSUES REGARDING
LIABILITY AND COST RECOVERY 14
A. Prima Facie Case 14
B. Liability and Description
of Proposed Defendant 15
VIII. ENFORCEMENT HISTORY
AND CONTACTS WITH POTENTIAL DEFENDANT 24
IX. COST RECOVERY 27
X. PENALTIES AND PUNITIVE DAMAGES 28
-i-
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Page
XI. OTHER LEGAL ISSUES 29
XII. LITIGATION/SETTLEMENT STRATEGY 29
A. Settlement Negotiations/Cost Recovery
Strategy 29
B. Discovery 29
XIII. WITNESSES/LITIGATION SUPPORT 30
XIV. APPENDICES
A. Exhibits List
Draft Complaint
C. Exhibits
-ii-
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-1-
I. SYNOPSIS OF THE CASE
This referral requests that a civil action be filed pursuant
to Sections 106 and 107 of the Comprehensive Environmental
Response, Compensation/ and Liability Act (CERCLA),
42 U.S.C. §§ 9506 and 9607/ as amended, in order to recover
penalties and trebled damages from the Defendant for failure to
comply with a CERCLA Section 106 removal order. This referral
also requests that the civil action seek reimbursement of
approximately $47,358.88 ('subject to increase) in oversight and
other costs incurred by the United States Environmental
Protection Agency (EPA) in responding to the release and
threatened release of hazardous substances at the Basket Creek
Drum Disposal Site (hereinafter "the Site") in Douglas County,
Georgia.
On March 17, 1976, Douglas Daniell, a Douglas County Health
Department official responding to a citizen's complaint,
discovered the illegal dumping of approximately eighty (80)
drums containing industrial wastes in a ravine along Basket
Creek Road, in a rural area of Douglas County, Georgia. When
Mr. Daniell arrived at the Site, he observed two tractor
trailers; one had been emptied of approximately eighty (80)
drums, which a bulldozer was covering with dirt. The other
trailer still held approximately eighty (80) drums which persons
were preparing to unload. Mr. Daniell prevented the dumping of
these additional eighty (80) drums. {Exhibit 23).
Mr. Daniell reported the illegal dumping to the Georgia
Environmental Protection Division (EPD). EPD officials
inspected the Site and sampled drums remaining on the trailer.
One of the samples contained 50% orthochlorophenol, and acetone,
isopropanol, chloroform, tetrachloroethane, phenol, and
dichlorophenol were also present in these samples. (Exhibit 2,
pages 111, 114-23).
Mr. Daniell recorded the tag numbers of the tractor
trailers, which he later determined were registered to Bartlet
B. Hulseyf a transporter and general contractor. Mr. Daniell
had observed Mr. Hulsey at the Site during the dumping (Mr.
Hulsey gave Mr. Daniell his business card). The day after the
dumping, Dr. C. B. F. Young, President of the proposed
defendant, Young Refining Corporation ("Young Refining"), called
Mr. Daniell and informed him that the drums dumped at the Site
had come from Young Refining. Dr. Young told Mr. Daniell that
he had contracted with Bartlett B. Hulsey to haul and dispose of
the drums, but did not know where Mr. Hulsey was going to take
them. (Exhibit 23).
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-2-
Records and information provided to the Region by Young
Refining and Continental Trading Company, a chemicals broker,
("Continental"), show that Young Refining and Continental
participated during the early 1970s in a waste recycling venture
which obtained industrial wastes from a variety of sources. The
joint venture intended to either recondition and sell the wastes
as usable product or burn the wastes as supplementary fuels in
Young Refining's burner. The joint venture accumulated a
substantial number of drums containing wastes that could not be
reconditioned or bfcrned, and the joint venture arranged for
disposal of these drums, which were stored at the Young Refining
facility in Douglasville, Georgia. (Exhibit 3).
A substantial portion of the wastes handled by the joint
venture were obtained from Chem-Nuclear Systems, Inc., a waste
disposal firm ("Chem-Nuclear"). Shipping records indicate that
Chem-Nuclear shipped approximately 1,880 drums to the joint
venture in approximately 32 shipments during 1973 and 1974.
Records identifying substances shipped from Chem-Nuclear to the
joint venture indicate that the drums buried at the Site may
include chlorinated phenols, chlorinated solvents, acids, and
pesticides. Hazardous substances documented as being shipped
from Chem-Nuclear to the Defendant's facility include
2,4-dinitrophenol, sulfuric acid, dodecylbenzenesulfonic acid,
1,1,1-trichloroethane and tetrachloroethane. (Exhibit 3, pages
1-21,46,53-64 of Attachment; Exhibit 15, pages 14-19).
At the time of the Section 106 removal Order, the Site
presented an imminent and substantial endangerment to public
health and the environment due principally to the possibility
that the contents of the drums would be released and migrate
through soil to contaminate the groundwater. In the area of the
Site, groundwater is the sole source of drinking water for
residents. Ten drinking water wells are located within a
one-half mile radius of the Site. A residence is located at the
Site, only 250 feet from the drum disposal area, and a drinking
water well serving this home is located at the Site (the
residents are presently drinking bottled water). Additionally,
groundwater discharges to surface water are common in this
area. The Site also presented a threat that contaminants
migrating from the drum disposal area would impact a small
stream adjacent to the Site. That stream flows into the
Chattahoochee River less than a mile downstream from the Site.
(Exhibit 2, pages 1-8; Exhibit 4, Exhibit 32).
A Sampling Investigation was conducted in March of 1990 for
EPA Region IV by Roy F- Weston, Inc., Technical Assistance
Team. The consistent presence of drums prevented the sampling
of subsurface soil in the Drum Disposal Area. Trichloroethene
was detected in the landowner's well at 5 ug/kg, which is the
Maximum Contaminant Level (MCL) under drinking water standards.
(Exhibit 2, pages 1-8, 169-239).
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-3-
On April 11, 1991, EPA issued a Section 106 Unilateral
Administrative Order to four PRPs, requiring them to remove the
buried drums and contaminated soil at the Site. The four PRP's
included Young Refining, its joint venture partner, Continental,
Chem-Nuclear, and the transporter who was identified at the Site
at the time of the dumping, Bartlett B. Hulsey. (Exhibit 4).
In their responses to the Order, Chem-Nuclear and
Continental indicated that they intended to comply. (Exhibits 9
and 11). Young Refining and Hulsey both denied responsibility
and indicated that they did not intend to comply. (Exhibits 8
and 10.) Chem-Nuclear is conducting the removal as directed in
the Order, without assistance or contribution from any other
PRP. Continental is apparently willing to contribute a small
portion of clean-up costs, but has not reached an agreement with
Chem-Nuclear as to amount. The status of negotiations between
Chem-Nuclear and Continental will be monitored and Continental
may be added as a defendant if it does not appear that
Continental is complying with the Order in good faith.
Removal work was commenced by Chem-Nuclear on September 9,
1991. The approved Removal Action Plan calls for the excavation
of overlying soil and removal of buried drums. The drums and
contaminated soil will then be sampled. The samples are to be
analyzed and proper disposal of drums and proper treatment
and/or removal and disposal of contaminated soil is to be
arranged. Treatment and/or removal of contaminated soil will be
conducted to meet clean-up levels set by EPA in consultation
with ATSDR, in light of drum and soil sampling results. The
Site will then be restored by backfilling, grading, and
seeding. (Exhibit 28). The removal is expected to be completed
in late October or early November, 1991. Total EPA costs to
date are approximately $47,358.88. (Exhibit 29). No further
removal or remedial action is contemplated by EPA after
completion of the present removal. The State EPD has expressed
interest in directing the PRPs to assess groundwater at the Site
at the close of the removal.
A surface impoundment located 1,000 feet north of the drum
disposal area has been the subject of an on-going fund-led
removal. EPA has been unable to obtain evidence establishing
the liability of Young Refining or any other PRPs for that site;
however, given the proximity to the Site it seems likely that
some of the same parties may be involved with both Sites.
The Site is owned by Ms. Harriet Foster. She did not own
the Site at the time of the drum burial. There is evidence that
drums were visible at the Site at the time Ms. Foster purchased
the property (Exhibit 24); however, consistent with EPA's
"Policy Towards Owners of Residential Property at Superfund
Sites," EPA has not initiated any enforcement action against Ms.
Foster because she is a residential landowner who did not
contribute to the release or threat of release at the Site. At
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the time of the drum dumping, the Site was owned by Mr. Lee
Wallace, now deceased, who apparently permitted the dumping.
(Exhibit 2, pages 109-144).
II. SIGNIFICANCE OF THE REFERRAL
This referral is submitted as part of the Superfund
Non-Settlor/Non-Complier Enforcement Initiative. The facts and
equities that exist in this case, along with the media attention
generated by the case, make it a good vehicle for demonstrating
EPA's commitment to a fair and aggressive CERCLA enforcement
program. The proposed Defendant, Young Refining, is a PRP who
is responsible for the illegal dumping of drums containing
hazardous substances at a removal site and refused to comply
with a Section 106 removal order. Chem-Nuclear Systems, Inc., a
less culpable PRP, is conducting the removal in compliance with
the Order. Because the removal has been conducted by another
PRP, costs are limited primarily to Site investigation and
inspection, removal oversight and enforcement costs, and
probably will be less than $100,000. Therefore, the primary
significance of the referral will be the recovery of penalties
and trebled enforcement costs, and as a vehicle for sending the
message that noncompliers will be aggressively pursued.
There are several significant precedential issues presented
in this case. The case presents the precedential issue of
whether multiple PRP's can be ordered jointly and severally to
conduct a response action. In addition, this case presents the
issue of what constitutes "sufficient cause" for noncompliance
with Section 106 orders. Also presented is the issue whether
Section 106(b) authorizes an action for penalties for
noncompliance with a Section 106 order when the penalty claim is
not brought in the context of an action to compel performance of
the requirements of the order. In addition, this case presents
the issue of what costs can be trebled in an action under
Section 107(c)(3). All of these issues are discussed fully in
Section VII of this Litigation Report.
III. STATUTORY BASIS OF REFERRAL/LEGAL THEORY OF CASE
A. Applicable Statutes
1. Authority to Conduct Site Investigation
Section 104(b) of CERCLA, 42 U.S.C. Section 9604(b), as
amended, authorizes the President to conduct site investigations
whenever cause exists to believe that a release of a hazardous
substance occurred or may be occurring. Section 104(b) provides
as follows:
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...whenever the President has reason to believe that a
release has occurred or is about to occur,... he may
undertake such investigations, monitoring, surveys,
testing and other information gathering as he may deem
necessary or appropriate to identify the existence and
extent of the release or threat thereof, the source and
nature of the hazardous substances, pollutants or
contaminants involved, and the extent of danger to the
public health or welfare or to the environment. In
addition, the President may undertake such planning,
legal, fiscal, economic, engineering, architectural and
other studies or investigations as he may deem necessary
or appropriate to plan and direct response actions, to
recover the costs thereof, and to enforce the provisions
of this chapater.
2. Removal Authority
Section 104(a)(1) of CERCLA, 42 U.S.C. § 9604(a)(1), as
amended, which gives the President the authority to respond to
the release or threatened release of hazardous substances,
provides:
Whenever (A) any hazardous substance is released or
there is a substantial threat of such a release into the
environment, or (B) there is a release or substantial
threat of release into the environment of any pollutant
or contaminant which may present an imminent and
substantial danger to the public health or welfare, the
President is authorized to act, consistent with the
national contingency plan, to remove or arrange for the
removal of, and provide for remedial action relating to
such hazardous substance, pollutant, or contaminant at
any time (including its removal from any contaminated
natural resource), or take any other response measure
consistent with the national contingency plan which the
President deems necessary to protect the public health
or welfare or the environment. ...
3. Authority to Issue Order
The removal order which EPA issued to Young Refining and
three other PRP's is authorized by Section 106(a) of CERCLA, 42
U.S.C. § 9606(a), as amended, which provides:
In addition to any other action taken by a State or
local government, when the President detemines that
there may be an imminent and substantial endangerment to
the public health or welfare or the environment because
of an actual or threatened release of a Hazardous
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substance from a facility, he may require the Attorney
General of the United States to secure such relief as
may be necessary to abate such danger or threat.... The
President may also, after notice to the affected State,
take other action under this section including, but not
limited to, issuing such orders as may be necessary to
protect public health and welfare and the environment.
4. Authority for Penalty
Civil penalties in this action are authorized by Section
106(b)(1) of CERCLA, which provides:
Any person who, without sufficient cause, willfully
violates, or fails or refuses to comply with, any order
of the President under subsection (a) of this section
may, in an action brought in the appropriate United
States district court to enforce such order, be fined
not more that $25,000 for each day in which such
violation occurs or such failure to comply continues.
5. Liability
Section 107(a) of CERCLA, as amended, establishes liability
for funds expended pursuant to Section 104(a)(1) of the Act.
This section provides as follows:
Notwithstanding any other provision or rule of law, and
subject only to the defenses set forth in subsection (b)
of this section-
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of disposal of any
hazardous substance owned or operated any facility at
which such hazardous substances were disposed of,
(3) any person who by contract, agreement or otherwise
arranged for disposal or treatment, or arranged with a
transporter for transport for disposal or treatment, of
hazardous substances owned or possessed by such person,
by any other party or entity, at any facility or
incineration vessel owned or operated by another party
or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous
substances for transport to disposal or treatment
facilities, incineration vessels or sites selected by
such person, from which there is a release, or a
threatened release which causes the incurrence of
response costs, of a hazardous substance, shall be
liable for-
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(A) all costs of removal or remedial action incurred
by the United States Government or a State or an
Indian tribe not inconsistent with the national
contingency plan;
(B) any other necessary costs of response incurred by
any other person consistent with the national
contingency plan;
(C) damages for injury to, or destruction of, or a
loss of natural resources, including the reasonable
costs of assessing such injury, destruction, or loss
resulting from such a release; and
(D) the costs of any health assessment or health
effects study carried out under section 9604(i) of
this title.
The amounts recoverable in an action under this section
shall include interest on the amounts recoverable under
subparagraphs (A) through (D). Such interest shall
accrue from the later of (i) the date payment of a
specified amount is demanded in writing, or (ii) the
date of the expenditure concerned. The rate of interest
on the outstanding unpaid balance of the amounts
recoverable under this section shall be the same rate as
is specified for interest on investments of the
Hazardous Substance Superfund established under
subchapter A of chapter 98 of Title 26.
6. Punitive Damages
Punitive damages are authorized in this referral pursuant
to Section 107(c)(3) of CERCLA, 42 U.S.C. § 9607(c)(3), as
amended, which provides:
If any person who is liable for a release or threat of
release of a hazardous substance fails without
sufficient cause to properly provide removal or remedial
action upon order of the President pursuant to section
9604 or 9606 of this title, such person may be liable to
the United States for punitive damages in an amount at
least equal to, and not more than three times, the
amount of any costs incurred by the Fund as a result of
such failure to take proper action. The President is
authorized to commence a civil action against any such
person to recover the punitive damages, which shall be
in addition to any costs recovered from such person
pursuant to section 9612(c) of this title. Any moneys
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received by the United States pursuant to this
subsection shall be deposited in the Fund.
Section VII of this referral reviews the prima facie case
elements and describes the proposed defendant.
B. Jurisdiction and Venue
Section 113(b) of CERCLA, 42 U.S.C. § 9613(b) provides that
the United States District Court shall have exclusive original
jurisdiction over all controversies arising under the Act.
Venue shall be in any district in which the release or damages
occurred or in which the defendant resides, may be found, or has
his principal office. In this case, the release and damages
occurred in Douglas County, Georgia, and that is also where the
proposed defendant has its principal office. Douglas County is
located in the Northern District of Georgia, Atlanta Division.
C. Cross-media Coordination
Coordination across media has not occurred in the instant
case. There do not appear to be any cross-media claims.
VI. DESCRIPTION AND HISTORY OF THE SITE
A. Site Location
The Basket Creek Drum Disposal Site (EPA ID Number:
GAD-980843833) is located east of Basket Creek Road,
approximately 0.4 miles from the intersection of Capps Ferry
Road and Basket Creek Road, in a rural area of Douglas County,
Georgia. (Exhibit 2, page 90). The drum disposal site is
located about 250 feet east of the home of Mrs. Harriet Foster
at 7840 Basket Creek Road. The Site consists of an open ravine
of scrub vegetation and briar patches along Basket Creek Road,
bordered on the north and south by hardwood trees. The
approximate dimensions of the drum burial area, based on
geophysical survey data, are 45 feet by 330 feet. (Exhibit 28).
B. Site History/Facility Processes
On the night of March 17, 1976, approximately 80 55-gallon
drums of industrial wastes were illegally dumped at the Site. A
Douglas County Health Department official responding to a
citizen's complaint discovered the dumping in progress. When
the county official, Douglas Daniell, arrived on the scene he
noted two tractor trailers pulled up next to a ravine adjacent
to Basket Creek Road. One of the trailers had dumped 80 drums
into the ravine and a bulldozer was covering them with fill.
Mr. Daniell prevented the persons at the Site from dumping
additional drums (approximately 80) remaining on the second
trailer. (Exhibit 23).
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Mr. Daniell reported the illegal dumping to the Georgia
EPD. Two Georgia EPD officials visited the Site the day after
the dumping and collected half gallon samples from two of the
drums remaining on the tractor trailer. One of the samples
contained 50% orthochlorophenol. Acetone, isopropanol,
chloroform, tetrachloroethane, phenol and dichlorophenol were
also present in these samples. The EPD officials were prevented
by soupy conditions from sampling the dumped drums in the
ravine. Both of the EPD officials suffered clinical effects
from exposure to the liquid wastes in the disposal area. One of
the men, Dan Hull, suffered respiratory distress the evening of
the sampling, while swimming. Mr. Hull's shoes were saturated
with the liquid waste and were still emitting strong vapors one
week later, and he was advised to discard the shoes. The other
EPD official, James Benson, felt ill for two or three days, and
the odor of the vapors was still being emitted from his skin
twenty-four hours after the sampling. (Exhibit 2, pages 111,
114-23).
Mr. Daniell obtained a business card from one of the persons
at the Site: Bartlet B. Hulsey. Mr. Daniell also recorded the
tag numbers of the two trailers, which were registered to
Hulsey. On March 18, 1976, the day after the dumping, Dr. C. B.
F. Young, President of Young Refining, called Mr. Daniell and
informed him that the dumped drums had come from Young Refining
Corporation. Dr. Young indicated that he had contracted with
Hulsey to haul and dispose of the drums, but had not known where
Hulsey was going to take them. (Exhibit 23).
The buried drums had been held at the Young Refining
facility pursuant to a joint venture in which Youncj Refining
participated with Continental Trading Company. The joint
venture sought to make money by accepting industrial wastes from
a variety of sources, and either burning the wastes as
supplementary fuels in the Young Refining burner or
reconditioning and selling the wastes as usable product.
(Exhibit 3; Exhibit 15, pages 18-19). The materials in the
buried drums were not suitable for burning or resale, and
therefore were buried at the Site. (Exhibit 3, pages 1-4 of
cover letter, 52-60 and 96-101 of Attachment; Exhibit 6; Exhibit
15, page 22).
A substantial portion of the drums acquired by the joint
venture were obtained from the Chem-Nuclear Systems, Inc.
facility in Barnwell, South Carolina. Approximately 1,880 drums
were shipped from Chem-Nuclear in 32 shipments during 1973 and
1974. Materials shipped by Chem-Nuclear to'the joint venture
included chlorinated phenols, chlorinated solvents, acids, and
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pesticides. Specific hazardous substances documented as being
shipped from Chem-Nuclear to Young Refining include the
following:
2,4-dinitrophenol
sulfuric acid
dodecylbenzenesulfonic acid
1,1,1-trichloroethane
tetrachloroethane
(Exhibit 3, pages 1-21,46,53-64 of Attachment; Exhibit 15, pages
14-22).
At the time of the drum burial, the Site was owned by Mr.
Lee Wallace, now deceased, who permitted the drum burial.
(Exhibit 2, pages 109-42). The current owner, Ms. Harriet
Foster, bought the property in 1987 from Lee Wallace's widow.
Mrs. Foster states that she did not know that drums were buried
on the Site when she purchased it. (Exhibit 2, pages 27-28).
Ms. Foster built her home approximately 225 feet from the drum
burial area. (Exhibit 1, page 3).
In the area of the Site, groundwater is the source of
drinking water for residents. (Exhibit 2, page 150).
Approximately thirteen private wells are located within a one
mile radius of the Site. (Exhibit 32, page 2).
A geophysical survey of the drum disposal area was conducted
in March, 1990 by the Roy Weston, Inc., Technical Assistance
Team (TAT). The results of the magnetic survey indicated two
large positive magnetic anomalies that probably represent buried
materials. The approximate dimensions of the drum burial area
are 45 feet by 330 feet. (Exhibit 2, pages 4-5, 33-35; Exhibit
28) .
A Sampling Investigation was conducted in March of 1990 for
EPA by TAT. The consistent presence of drums prevented the
taking of subsurface soil samples in the Drum Disposal Area.
Trichloroethene was detected in the landowner's well at 5 ug/kg,
which is the Maximum Contaminant Level (MCL) under drinking
water standards. Mercury was also detected in the well at a
concentration of 1.54 ug/kg, which is just below the MCL. Low
levels of mercury were also detected in the sediment and surface
water samples collected downgradient of the drum disposal area.
A number of other metals were also detected in the downgradient
sediment sample as well as trace amounts of several solvents.
(Exhibit 2, page 5; Exhibit 32).
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C. Ranking of the Site on the NPL
Presently, the Site is not ranked on the National Priorities
List (NPL). In May of 1989, NUS Corporation conducted Phase I
of a Screening Site Inspection at the Site. This inspection was
limited to a review of existing file material, completion of a
target survey and an offsite reconaissance of the Site. The
Site did not score high enough using the hazard ranking system
to merit sampling, and the Site was given a NFRAP (no further
remedial action planned) designation. (Exhibit 1). The offsite
reconnaisance revealed that a home had been built next to the
drum disposal area and that the resident was obtaining drinking
water from a private well. Due to the waste characteristics and
the proximity of the residence to the disposal area, it was
recommended that the Emergency Response and Removal Branch of
EPA evaluate this Site. (Exhibit 2, page 3).
D. Environmental Problem Posed bv the Site
On April 11, 1991, EPA ordered Young Refining and three
other PRPs to conduct an emergency removal action.
(Exhibit 4). EPA determined that the Site presented an
immediate threat to human health and the environment. At the
time of the Order, the Site presented an imminent and
substantial endangerment to public health and the environment
due principally to the possibility that the contents of the
drums would be released and migrate through soil to contaminate
the groundwater. In the area of the Site, groundwater is the
sole source of drinking water for residents. Ten drinking water
wells are located within a one-half mile radius of the Site. A
residence is located at the Site only 250 feet from the drum
burial area, which residence is served by a drinking water well
at the Site (presently the residents are drinking bottled
water). Additionally, groundwater discharges to surface water
are common in this area. Contaminants migrating from the drum
disposal area also could impact a small stream adjacent to the
Site. That stream flows into the Chattahoochee River less than
a mile downstream from the Site. (Exhibit 1; Exhibit 2, pages
1-8) .
Records identifying substances shipped from Chem-Nuclear to
the joint venture which handled the drums dumped at the Site
indicate that the drums buried at the Site may include
chlorinated phenols, chlorinated solvents, acids, and
pesticides. Hazardous substances documented as being shipped
from Chem-Nuclear to Young Refining's facility include
2,4-dinitrophenol, sulfuric acid, dodecylbenzenesulfonic acid,
1,1,1-trichloroethane and tetrachloroethane. (Exhibit 3, pages
1-21 and 61-63 of Attachment). In addition, sampling
established that orthochlorophenol, acetone, isopropanol,
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chloroform, tetrachloroethane, phenol and dichlorophenol were
contained in drums that persons had been preparing to dump at
the Site when the Douglas County Health Department official
arrived. (Exhibit 2, pages 111/ 114-17).
V. STATUS OF THE CLEANUP PROCESS
A. Cleanup Activities bv Parties Other than EPA
On April 11, 1991, EPA issued a Unilateral Section 106
Administrative Order to Young Refining and three other PRP's,
requiring that they conduct a removal action at the Site.
(Exhibit 4). Young Refining refused to comply with the Order.
(Exhibit 8). One of the PRPs, Chem-Nuclear Systems, Inc., is
presently conducting the removal in compliance with the Order,
without participation from any other PRPs. Removal work is
being performed by Chem-Nuclear's affiliate, Chemical Waste
Management, Inc. ("Chem-Waste").
1. Description of the Removal Action
In response to the Section 106 Order, Chem-Nuclear agreed to
conduct the removal, and submitted a Removal Action Plan on May
16, 1991, which was approved by EPA on May 21, 1991. Amendments
to the Removal Action Plan made to accomodate the Site owner
were also approved by EPA. The final approved work plan is
attached as Exhibit 28.
On-site work commenced on September 9, 1991. This date
reflects a delay attributable to negotiations between
Chem-Nuclear and the Site owner for an access agreement.
Removal work is being overseen by On-Scene Coordinator Don
Rigger. The approved Removal Action Plan calls for Chem-Waste
to clear and improve the Site work area. The area of suspected
buried materials is to be located and staked out. Temporary
run-on control structures will be constructed to divert storm
water away from the excavation area. After completion of
site-preparation activities, excavation and waste material
removal will commence. Contaminated materials will be staged at
accessible loading locations and loaded into transport vehicles
or containers. Drums will be staged, sampled, identified and
labled. Leaking drums or drums in poor condition will be
overpacked. Soil will be sampled and contaminated soil will be
staged in roll-off containers. Excavation and removal will
continue until clean-up levels established by EPA in
consultation with ATSDR are met. Proper off-site disposal of
wastes will be arranged in accordance with sample analysis.
Chem-Waste will use its own network of disposal facilities to
dispose of wastes. At the close of the removal, the excavation
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area will be backfilled, topsoil will be spread and vegetation
will be restored. (Exhibit 28). Removal activities are
scheduled to be completed in late October 1991. EPA is
currently planning no further removal or remedial work at the
Site.
2. Community Relations
EPA participated in two public meetings relating to the Site
and other sites in Douglas County. EPA representatives attended
a Douglas County Commission meeting pursuant to an invitation
from the County Commision. At the meeting, EPA representatives
provided information about the Site and answered question from
Douglas County residents. At another public meeting organized
by Congressman Newt Gingrich, EPA representatives attended and
again provided information about the Site and answered questions
from Douglas County residents. EPA representatives met
individually with residents in the area of the Site on
September 5, 1991, and held an informal availability session on
September 9, 1991. No other community relations activities
occurred for this Site. However, the Region has compiled the
administrative record for the Site, and it was mailed to a local
repository on May 15, 1991.
3. ATSDR Evaluation
On May 15, 1990, EPA requested that ATSDR review data on
well water and soil samples from the Foster residence at the
Site. ATSDR was asked to determine the public health threat
posed by levels of contamination present in the Foster's well.
In a memo dated May 15, 1990, ATSDR indicated that the levels of
trichloroethene and mercury found in the well "in themselves do
not constitute a serious public health threat." However, this
memo assumed, as was stated in the request from EPA, that "the
residents were not utilizing the water for drinking purposes,
but were relying on bottled water." ATSDR "recommended that the
owners of this well continue to utilize bottled water until
additional samples are obtained and analyzed." (Exhibit 5).
ATSDR also conducted a health consultation at the Site in
response to requests from Douglas County citizens, EPA, and
Representative Newt Gingrich. After reviewing sampling data and
other information from the Site file, ATSDR concluded that the
current levels of contamination did not pose a public health
threat, but that the potential future threat posed by
contaminant migration and possible human exposure could not be
determined without a better characterization of area
groundwater, and that a potential threat to human health may
exist from direct dermal exposure to contaminated soils and from
inhalation of contaminants. ATSDR recommended, among other
steps, that the source of groundwater contamination be
mitigated. (Exhibit 32).
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4. Status of the Administrative Record
The Region has recently compiled the administrative record
for this Site. A list of the contents of the the administrative
record is included as Exhibit 31 to this referral. The Region
mailed the administrative record to a local repository on May
15, 1991.
VI. NATURAL RESOURCE DAMAGE CLAIMS
The OSC identified no natural resource damages at this Site.
VII. PRIMA FACIE CASE. LIABILITY AND DESCRIPTION OF PROPOSED
DEFENDANT. AND MISCELLANEOUS ISSUES REGARDING LIABILITY AND COST
RECOVERY
A. Prima Facie Case
1. Release or Threatened Release of Hazardous Substances
There was a release, as defined in § 101(22) of CERCLA,
and/or threatened release at the Site. Douglas Daniell, a
Douglas County Health Department official, observed the dumping
of approximately 80 55-gallon drums at the Site in 1976.
(Exhibit 23, page 1). Georgia EPD officials sampled the
contents of two of the drums which persons at the Site had been
preparing to dump when Mr. Daniell arrived. Sampling
established that one of the drums contained 50%
orthochlorophenol, a hazardous substance. Other hazardous
substances contained in these samples included acetone,
isopropanol, chloroform, tetrachloroethane, phenol and
dichlorophenol (Exhibit 2, page 114). Records document that
other wastes handled by the Young Refining/Continental joint
venture before Young Refining arranged for disposal of the drums
at the Site included the following hazardous substances:
2,4-dinitrophenol, sulfuric acid, dodecylbenzenesulfonic acid,
1,1,1-trichloroethane and tetrachloroethane. (Exhibit 3, pages
1-21, 46, 53-64 of Attachment; Exhibit 15, pages 14-19). A
Sampling Investigation was conducted in March of 1990 for EPA by
TAT. The consistent presence of drums prevented the taking of
subsurface soil samples in the Drum. Disposal Area.
Trichloroethene was detected in the landowner's well at 5 ug/kg,
which is the Maximum Contaminant Level (MCL) under drinking
water standards. (Exhibit 2, pages 1-8).
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The leaking or escaping of hazardous substances from drums
at the Site and the past, present and/or potential migration of
hazardous substances from the Site constitutes an actual or
threatened release as defined in Section 101(22) of CERCLA.
Liquid wastes released from the drums may have migrated, and
potentially could migrate, downward through soil to reach the
groundwater. Groundwater discharges to surface water are common
in the area of the Site. Additionally, migrating wastes could
impact a small stream adjacent to the Site. This stream flows
into the Chattahoochee River less than a mile downstream from
the Site. (Exhibit 1; Exhibit 2, pages 1-8).
2. From a Facility
The Site is a facility, as defined in Section 101(9) of
CERCLA. The definition of facility in Section 101(9)
specifically includes "any area where a hazardous substance has
been deposited, stored, disposed of, or placed, or otherwise
come to be located."
B. Liability and Description of Proposed Defendant
1. Young Refining Corporation
a. Description/Basis for Liability
Young Refining Corporation ("Young Refining") is liable
pursuant to Section 107(a)(3) of CERCLA, for having arranged for
disposal of hazardous substances which were dumped at the Site.
Young Refining Corporation is a petroleum refining facility
in Douglasville, Georgia. From 1973 to 1976 Young Refining
participated in a waste recycling venture with Continental
Trading Company, a chemicals broker in Atlanta, Georgia. The
joint venture obtained industrial wastes from a number of
sources and sought to make a profit by either reconditioning and
selling the wastes as usable product to customers of Continental
Trading Company, or burning the wastes as supplementary fuels in
the Young Refining burner. (Exhibit 3, pages 1-4 of cover
letter, pages 53-55 of Attachment; Exhibit 15, pages 10-25). An
area at the Young Refining facility was graded for storage of
drums handled by the joint venture. (Exhibit 3, page 23 of
Attachment). Over time, a substantial quantity of drums were
accumulated at the Young Refining facility which presented a
disposal problem because they were not suitable for resale or
burning. (Exhibit 3, pages 46-60 of Attachment). In part, this
problem was created by the shipment of approximately 160 drums
identified as containing "unknowns" from Chem-Nuclear Systems,
Inc., to the joint venture. (Exhibit 3, page 57 of
Attachment). On September 26, 1974, Continental Trading Company
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made a payment of $10,000.00 to Young Refining as an advance to
cover expenses for the disposal of waste chemicals accumulated
by the joint venture. (Exhibit 3, page 101 of Attachment).
Young Refining intended to dispose of the waste chemicals at
Metals Recycling, Inc., a facility owned by Young Refining in
Borden Springs, Alabama. (Exhibit 3, page 100 of Attachment).
In February of 1976, a substantial number of drums were
shipped from Metals Recycling, inc. to Young Refining, in
Douglasville, Georgia. Young Refining had been prohibited from
disposing of the drums as planned in Alabama, and Alabama
officials directed Young Refining to remove the drums from the
Alabama facility. (Exhibit 2, pages 109,112; Exhibit 3, pages
100-101, 113).
On March 17, 1976, Douglas Daniell, a Douglas County Health
Department official responding to a citizen's complaint,
discovered the illegal dumping of approximately eighty (80)
drums containing industrial wastes in a ravine along Basket
Creek Road, in a rural area of Douglas County, Georgia. When
Mr. Daniell arrived at the Site, he observed two tractor
trailers; one had been emptied of approximately eighty (80)
drums, which a bulldozer was covering with dirt. The other
trailer still held approximately eighty (80) drums which persons
were preparing to unload. Mr. Daniell prevented the dumping of
the additional eighty (80) drums. (Exhibit 23).
Mr. Daniell reported the illegal dumping to the Georgia
Environmental Protection Division (EPD). EPD officials
inspected the Site the day after the dumping and sampled drums
remaining on the trailer. One of the samples contained 50%
orthochlorophenol. (Exhibit 2, pages 109-120).
Mr. Daniell recorded the tag numbers of the trailers, which
he later determined were registered to Bartlett B. Hulsey, a
transporter and general contractor. Mr. Daniell also observed
Mr. Hulsey at the Site during the dumping; Mr. Hulsey had given
Mr. Daniell his business card. The day after the dumping, Dr.
C. B. F. Young, President of the Defendant, Young Refining
Corporation, called Mr. Daniell and informed him that the drums
dumped at the Site had come from Young Refining Corporation.
Dr. Young told Mr. Daniell that he had contracted with Bartlett
B. Hulsey to haul and dispose of the drums, but did not know
where Mr. Hulsey was going to take them. (Exhibit 23).
Dr. C. B. F. Young, President of Young Refining, has stated
to EPA in the person of Assistant Regional Counsel David Harbin,
On-Scene Coordinator Don Rigger, and Bill Steiner that he
received a call and went to the Site the night of the dumping
where he observed Hulsey and Mr. Lee Wallace, owner of the Site,
burying the drums. (Exhibit 3, page 3 of cover letter; Exhibit
6, page 1).
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b. State of Incorporation/Principal Place of Business
Young Refining Corporation is a Delaware corporation. Its
principal place of business is at 7982 Huey Road, Douglasville,
Georgia 30133.
c. Agent for Service of Process
Young Refining Corporation's registered agent in Georgia is
David L. Smallwood, 6624 E. Broad St. Douglasville, Georgia
30134.
d. Legal Counsel
Young Refining is represented by Stephen E. O'Day and Mark
W. Kinzer of the law firm Smith, Gambrell & Russell, First
Atlanta Tower, Suite 2400, 2 Peachtree St., N.W., Atlanta,
Georgia 30383-2501, telephone # (404) 656-1800.
e. Ownership/Parent Corporation
All of the Common Stock of Young Refining Corporation is
owned by Bass Pecan Company. (Exhibit 15, page 8). Bass Pecan
Co. also holds $2,500,000 in long term debt of Young Refining
Corporation. (Exhibit 15c). Bass Pecan Company is a
Mississippi corporation which is not qualified to do business in
Georgia. Bass Pecan Company has sold crude oil to Young
Refining for a number of years. 6,050 shares of non-voting
preferred stock of Young Refining are held in varying amounts by
eight individuals and one company. Five hundred of these shares
are held by Dr. Young and his wife. (Exhibit 15, page 8).
Common stock accounts for $11,666.00 of paid in stockholder
equity; preferred stock accounts for $605,000.00 of paid in
equity. (Exhibit 15c).
f. Financial Viability
Pursuant to a Section 104(e) information request, Young
Refining has submitted federal tax returns for the years
1984-1988 and balance sheets prepared from May 31, 1989 through
April 30, 1991. (Exhibit 15c and 15d). A follow-up letter
requests 1989 and 1990 tax returns, which would have been
responsive to EPA's initial request. (Exhibit 19). Young
Refining's balance sheet for April 30, 1991 reflects total
assets of over ten million dollars. Young Refining's balance
sheets (unaudited) and consolidated tax returns (without
schedules) reflect losses year after year. (Exhibit 15c). In
its response to the Section 106 Order, Young Refining indicated
that it lacked the financial resources to comply with the
Order. Copies of insurance policies held by Young Refining
Corporation are attached as Exhibit 15e.
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Financial information provided to EPA by Young Refining was
forwarded to NEIC for financial analysis on August 14, 1991, and
NEIC's evaluation will be forwarded to DOJ upon receipt. John
Mahan at NEIC {FTS 776-2396) has verbally indicated that the
losses reflected in Young Refining's unaudited balance sheet and
tax returns do not mesh with Dun & Bradstreet reports which
reflect that Young Refining is making its payments under loans
and continues to receive credit. John Mahan has indicated that
audited balance sheets and credit applications, as well as
complete tax returns (including schedules and attachments from
all related entities) would be necessary to fully assess Young
Refining's financial status. He indicated that in the unaudited
balance sheets and consolidated tax returns it would be easy to
hide where the corporate revenues are going, particulary in this
case, which involves a number of related and closely held
corporations. Mr. Mahan indicated that he would discount the
unaudited financials, and would require more complete financial
information (which he felt would disclose significant
resources). The Region intends to send another 104(e)
Information Request seeking such information.
g. Personal Liability Issues
Federal courts have established that a corporate officer who
participates in, or is responsible for, the disposal of
hazardous substances can be individually liable under CERCLA.
U.S. v. Northeastern Pharmaceutical and Chemical Company.
fNEPACCOV. 810 F.2d 726 (8th Cir. 1986). Dr. C. B. F. Young is
the President and Chairman of the Board of Young Refining
Corporation, and Dr. Young personally arranged for the disposal
of the hazardous substances that were dumped at the Site. The
Section 106 Order, however, was not issued to Dr. Young
individually. Therefore, Dr. Young has liability only for
costs, and not for noncompliance with the Section 106 Order.
Dr. Young is not proposed as a defendant because the focus of
this case is as part of the Non-complier/ Non-settlor
Initiative, and the monetary focus of the case is penalties and
punitive damages for noncompliance, rather than costs. EPA will
consult with DOJ concerning the possibility of naming Dr. Young
individually as a defendant.
h. Transporter
The person who transported the drums to the Site is Bartlett
B. Hulsey. Hulsey was identified at the Site by Douglas
Daniell, the Douglas County Health Department official who
interrupted the dumping. Mr. Daniell also recorded the tag
numbers of the trailers from which drums were being dumped; both
were registered to Hulsey. (Exhibit 23, page 2). EPA does not
know who owned the trucks that transported the trailers to the
Site. Dr. Young has stated to EPA that he was called the night
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of the dumping and went to the Site, where he saw Hulsey and the
former Site owner, Mr. Lee Wallace, burying drums. Dr. Young
has also stated that the dumped drums came from his facility.
Shortly before the drums were dumped, Hulsey had approached Dr.
Young offering to dispose of the drums for Young Refining
Corporation, and Dr. Young accepted Hulsey's offer. However,
Dr. Young has stated that he did not know where Hulsey was going
to take them. (Exhibit 3, cover letter; Exhibit 6; Exhibit 23).
Hulsey was named as a Respondent in the Section 106 order.
In his response, Hulsey denied any responsiblity for dumping
drums at the Site. Hulsey stated that he transported drums to
the Site for Young Refining Corporation, but that a government
official prevented him from dumping any drums. Hulsey's
response to the order also alleges that Lee Wallace had told him
he could bring drums from Young Refining to the Site. (Exhibit
10). In a subsequent response to a Section 104(e) information
request, Hulsey changed his story. In the 104(e) response,
Hulsey denied that he even transported any drums to the Site.
Hulsey's 104(e) response states that he was at the Site covering
tires for Lee Wallace when a shipment of drums arrived. The
104(e) responsie further states that Hulsey then sent the
shipment of drums away because he "did not want the drums dumped
where I was working to cover the tires." (Exhibit 18).
Hulsey's inconsistent statements lack credibility. However,
they are the basis for Dr. Young's conclusion that his prior
admissions of responsibility were erroneous. See Exhibit 8,
page 1; Exhibit 15, page 27-28.
Hulsey is not proposed as a defendant because he is old, has
cancer and apparently lacks resources. His culpability is high,
however, and his 104(e) response is incomplete and inconsistent
with his response to the Section 106 order. A follow-up 104(e)
request has been sent to Hulsey to confirm his financial
status. (Exhibit 21).
i. Potential CERCLA S 107fb^ Defenses
There are no known CERCLA Section 107(b) defenses available
to Young Refining. Initially, Dr. Young stated that Hulsey
selected the Site without the knowledge of Young Refining.
However, Hulsey was disposing of the drums pursuant to a
contractual relationship (verbal) with Young Refining, and
therefore Section 107(b)(3) is not applicable. Moreover, Young
Refining did not exercise due care with respect to disposition
of the drums, or take reasonable precautions against forseeable
acts of Hulsey. Additionally, Dr. Young visited the Site the
night of the dumping and did nothing to remove the drums.
Therefore, even if there were no contractual relationship with
Hulsey, Section 107(b)(3) would not apply.
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j. Ability to Recover Costs/NCP Issues
Young Refining raised a number of objections to the order as
justification for its noncompliance. First, Young Refining
stated that there is insufficient evidence that it is a PRP.
(Exhibit 8). Young Refining bases its evidentiary argument
primarily on Hulsey's statement that he did not bury any drums
at the Site. Hulsey's statement, however, has no credibility:
he has made inconsistent statements which are at odds with
eyewitness accounts. These eyewitness accounts include the
account of Douglas Daniell, the Douglas County Health Department
official who discovered the dumping and witnessed Hulsey helping
to bury the drums (Exhibit 23); and the account of Dr. Young
himself, who has stated that he went to the Site on the night of
the dumping where he saw Hulsey and Lee Wallace burying drums.
(Exhibit 3, cover letter; Exhibit 6). Evidence against Young
Refining Corporation is summarized in Section VII(B)(1)(a),
above.
Young Refining also argued in its response to the order that
EPA failed to establish an imminent and substantial
endangerment. (Exhibit 8). The basis for finding an imminent
and substantial endangerment to justify the Section 106 order is
summarized in Sections I and IV(D), above.
Young Refining alleged in its response to the Order that the
Section 106 Order was inconsistent with the NCP in two
respects. (Exhibit 8). First, Young Refining argued that EPA
acted improperly in failing to conduct an engineering
evaluation/cost analysis (EE/CA), as called for under 40 C.F.R.
300.415(b)(4). An EE/CA is only required "when a planning
period of at least six months exists before on-site activities
must be initiated." EPA considered the Basket Creek removal to
be time-critical, and therefore an EE/CA was not appropritate.
Under 40 C.F.R. 300.415(b)(3), "removal actions shall, as
appropriate, begin as soon as possible to abate, prevent,
minimize, stabilize, mitigate, or eliminate the threat to public
health or welfare or the environment." Prompt removal action
was required to address an imminent and substantial
endangerment.
Young Refining also argued that the Order was inconsistent
with the NCP in that all known PRP's were not included as
Respondents in the Order, as required by 40 C.F.R. 300.415(2).
That section, however, only provides that "where the responsible
parties are known, an effort initially shall be made, to the
extent practicable, to determine whether they can and will
perform the necessary removal action promptly and properly."
Here, EPA issued an Order to four PRP's against whom EPA
determined the evidence was strong enough to justify
proceeding. It was not practicable to delay a time-critical
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removal while attempting to identify and assemble evidence
against other potential PRP's, and EPA properly exercised its
enforcement discretion in issuing the Order to the four
Respondents.
k. Ability to Recover Penalties/Punitive Damages
Young Refining also asserted that the Section 106 Order was
invalid because it attempted to impose on each Respondent a
joint and several obligation to conduct a clean-up action.
Young Refining relied on United States v. Stringfellow. 20
E.R.C. 1905 (BNA) (C.D. Cal 1984). Stringfellow does hold that
Section 106 orders issued to multiple PRPs must precribe with
specificity the participation of each Respondent or they are
unenforceable in court. However, no other case has followed
Stringfellow. and Section 106 orders are regularly enforced
against multiple PRPs. No case has been identified which
directly overrules Stringfellow. however, and it would be
helpful to EPA to obtain a court opinion overruling this aspect
of Stringfellow. This argument, even if successful, would not
have any impact on Young Refining's liability for costs.
Even if a court overrules the holding in Stringfellow. Young
Refining could argue that penalties and punitive damages should
not be imposed because it was relying on what it considered
sound authority, and upon the advice of counsel, in not
complying with the Order. In other words, Young Refining could
argue that its reliance on Stringfellow in not complying with
the Order was reasonable and constituted "sufficient cause" so
as to defeat any attempt to recover penalties or punitive
damages. EPA's position would be that Stringfellow is not
controlling authority in the Eleventh Circuit and that it was
unreasonable for Young Refining to rely on it because the
enforceability of Section 106 orders issued jointly to multiple
PRPs is widely accepted. Moreover, because a Stringfellow
argument has no relationship to liability, it is not a very
sympathetic one. EPA could have issued the Order to Young
Refining alone and mooted the Stringfellow argument. It seems
unlikely that a court would reward noncompliance, arguably from
the most culpable PRP, when based on such an unsympathetic
argument.
Young Refining also stated in its reponse to the Order that
it was financially unable to pay for the ordered clean-up, and
that inability to pay constituted "sufficient cause" for
non-compliance. Young Refining could argue that penalties and
punitive damages should not be applicable on this ground.
However, Young Refining's financial inability claim has not been
established with the incomplete financial information submitted
by Young Refining to EPA. In addition, United States v.
Parsons. 723 F.-2d 757 , 763-64 (N.D.Ga. 1989 ), held that
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financial inability to pay for a clean-up is not "sufficient
cause" for noncompliance. In Parsons. EPA obtained a treble
damage award from a PRP who had argued that financial inability
to pay was "sufficient cause" for noncompliance. The Region is
planning to obtain more complete financial information from
Young Refining with a supplemental Information Request.
This case also presents the issue whether EPA can recover
penalties under Section 106(b) of CERCLA based on non-compliance
with a Section 106(a) order when it is not also seeking in the
court action to compel compliance with the terms of the order.
Section 106(b) authorizes penalties "in an action ... to enforce
such order." This language could be read in two ways: (1) that
an action "to enforce" the order only includes actions seeking
to compel performance, or (2) that an action "to enforce" the
order also includes actions seeking solely to penalize a
respondent for noncompliance. Young Refining is likely to argue
that penalties are only recoverable in an action to compel
performance of the requirements of the Order, and therefore that
no penalties are recoverable in this action. EPA Enforcement
Guidance contemplates "penalties alone" actions under Section
106(b), but there is little precedent on this issue. In a
recent case penalties were awarded to EPA under Section 106(b)
in a "penalties alone" case where other PRPs performed the
response action which the defendant had been ordered to
perform. See United States v. Lecarreaux. Civ. No. 90-1672
(HLS) (D.N.J. July 30, 1991).
From a policy perspective, EPA's interpretation of Section
106(b) is more reasonable because if penalties are only
recoverable in an injunctive setting, noncooperative PRPs would
have no incentive to comply with an order and contribute to the
performance of a response action whenever another PRP will
comply with the order and perform the ordered response action.
Section 113(h) of CERCLA provides additional support to
EPA's interpretation of Section 106(b). Section 113(h)
enumerates the types of actions in which a federal court can
review a challenge to a response action. The list includes "an
action to enforce an order issued under Section 9606(a) or to
recover a penalty for violation of such order." (Emphasis
added). This language suggests that an action can be brought
solely to recover penalties for the.violation of a Section 106
order. EPA's interpretation is further supported by the
principle that an Agency's interpretation of the statute it is
charged with enforcing will be upheld if it represents a
reasonable accomodation of conflicting policies. Bethlehem
Steel v. Bush. 736 F. Supp. 945 (N.D. Ind. 1989).
This case also presents the issue of what costs may be
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trebled in a treble damage claim under Section 107(c)(3) of
CERCLA. Section 107(c)(3) provides for punitive damages of up
to three times "the amount of any costs incurred by the Fund as
a result of such failure to take proper action" when a PRP fails
to comply with a Section 106 order. In this case, another PRP
carried out the removal in compliance with the Order, and EPA'b
oversight costs cannot be trebled because they would have been
incurred even if Young Refining had complied with the Order.
EPA can argue, however, that its enforcement costs may be
trebled because EPA would not have had to bring the penalty
action if Young Refining had complied with the Order.
2. PRP's EPA Does Hot Propose to Sue
Chem-Nuclear is not proposed as a defendant because
Chem-Nuclear has complied with the Order and is carrying out the
removal as ordered. This case is referred pursuant to EPA's
Non-complier/Non-settlor Initiative, a purpose of which is to
penalize non-compliers and reward cooperative PRPs, and improve
the Agency's reputation for aggressively and equitably enforcing
CERCLA. Therefore, the focus of the case is on penalties rather
than cost-recovery, and Young Refining, a non-complier, has been
singled out for enforcement action.
Continental is not proposed as a defendant because it also
has indicated its intention to comply with the Order. However,
to date Chem-Nuclear has conducted the response action without
contribution from Continental. Continental has not yet reached
agreement with Chem-Nuclear (whom it agreed to indemnify when
the hazardous materials were accepted) as to the amount of its
contribution to response costs. The status of Continental's
cooperation and participation will be monitored, and Continental
may be included as a defendant if it appears that it is not
complying with the Order in good faith.
Bartlett B. Hulsey is not proposed as a defendant solely
because it does not appear that he has assets. In response to
the Order Hulsey denied responsibility and stated that he is
disabled and lacks money. (Exhibit 10). According to his
104(e) response, his only asset is his residence which is in his
wife's name. (Exhibit 18). In reponse to a request for his tax
returns as part of the 104(e) request, Hulsey responded "n/a."
The Region sent a follow up 104(e) to obtain additional
financial information to confirm his financial status. (Exhibit
21). At a September 18 interview at Mr. Hulsey's residence by
EPA investigator Herb Miller, Mr. Hulsey refused to provide
supplemental financial information. (Exhibit 22) However, it
did not appear to Mr. Miller that Hulsey had significant
assets. EPA will consult with DOJ about the possibility of
including Mr. Hulsey as a defendant.
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There is evidence against certain other PRPs who are not
proposed as defendants because of evidentiary weaknesses and/or
because these defendants were not named in the Order and the
focus of this case is penalties and punitive damages for
noncompliance. Costs are relatively small. Those potential
PRPs include:
(i) Arivec Chemicals. Inc. A former (disgruntled)
employee of Arivec Chemicals has stated that he transported and
dumped a substantial number of drums containing "paint bottoms"
at the Site for Arivec over a several year period before the
Young Refining drums were dumped at the Site. (Exhibit 25).
According to the employee (Bobby Nunnaly), Lee Wallace, the
owner of the Site at the time (now deceased), permitted the
dumping. In response to a 104(e) request, Arivec denied ever
dumping any materials at the Site. (Exhibit 27). EPA's
investigation of Arivec will continue. Materials discovered
during the removal may provide additional evidence against
Arivec.
(ii) Jennat Corporation Shipping records show that the
Young Refining/Continental joint venture accepted hundreds of
drums containing industrial wastes from Jennat Corporation (a
subsidiary of Union Carbide), of Tucker, Georgia. Substances
shipped by Jennat include 6 drums of styrene monomer, 5 drums of
ethyl acrylate, 3 drums of acrylonitrile, 2 drums of vinyl
acetate, 22 drums of ethyl acrylate mixture, 90 drums of
amine-glycol mixture & ethyl acrylate mixtures, 82 drums of
glycol amine water mixture and ethyl acrylate mixture and 67
drums of ethyl acrylate mixture and glycol amine water mixture.
(Exhibit 3, pages 78-84 of Attachment). The volume of drums
shipped by Chem-Nuclear was much greater (approximately 1,880
drums) and EPA lacked evidence that any of the' substances
shipped by Jennat were present at the Site. Accordingly, EPA
did not include Jennat as a Respondent in the Section 106
Order. At present, EPA is proposing only Young Refining as a
Defendant because the primary basis for this referral is to
penalize Young Refining for non-compliance as part of the
Agency's Non-complier/Non-settlor Initiative.
(iii) Monsanto Corporation Shipping records reflect
that Monsanto Textiles Company, in Greenwood, South Carolina,
shipped approximately 78 drums to the Young Refining/Continental
joint venture in August and September of 1973: 8 drums of acid,
phenol, methanol plus dissolved nylon; 28 drums
1,1,1-trichloroethane and 36 drums of "wax"? [waste solvent?].
(Exhibit 3, pages 31-38 of Attachment). Monsanto was not named
in the Order because of the relatively small number of drums
shipped. Monsanto is not proposed as a defendant for that
reason and because the focus of this case is as part of the
Non-complier/Non-settlor Initiative.
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(iv) Ms. Harriet Foster Ms. Harriet Foster is the
current owner of the Site. Some witnesses have indicated that
drums were visible on the property when she purchased it.
(Exhibit 24). However, Mrs. Foster is a residential landowner
and no enforcement action is contemplated against her pursuant
to the Agency's "Policy Towards Owners of Residential Property
at Superflind Sites."
VIII. Enforcement Histoxrv: Contacts with the Potential
Defendants
Approximately 80 drums containing industrial wastes were
dumped at the Site on the night of March 17, 1976. Douglas
Daniell, a Douglas County Health Department official responding
to a citizen's complaint, discovered the dumping in progress and
prevented the dumping of an additional 80 drums. (Exhibit 23).
One PRP, the transporter, Bartlett B. Hulsey, was identified at
the Site by Mr. Daniell. The next day, Dr. C. B. F. Young,
President of Young Refining, called Mr. Daniell and said the
drums had come from Young Refining's facility in Douglasville,
Georgia. He said that he had contracted with Hulsey to dispose
of the drums but had not known where he was going to take them.
(Exhibit 23). Mr. Daniell reported the dumping to the Georgia
EPD. The EPD fined Hulsey and the property owner who permitted
the dumping, Lee Wallace, $750.00 each, but did not require them
to remove the drums. (Exhibit 2, pages 130-42). The EPD issued
an Emergency Order to Young Refining requiring it to provide
information as to the source and nature of the substances dumped
at the Site, and ordering Young Refining not to remove any more
wastes from its facility. Young Refining did not comply with
the EPD Order, which was referred for legal action to the
Georgia Department of Law. (Exhibit 2, pages 133-34).
In early 1991, EPA verbally notified the four PRP's that
were ultimately named as Respondents in the Section 106 Order
that EPA was planning to conduct a removal action at the Site,
and that they were considered to be PRPs. On February 1, 1991,
Young Refining's President and Chairman of the Board, Dr. C. B.
¦F. Young, and attorneys for Young Refining, came to EPA's
offices in Atlanta and discussed the case. Dr. Young gave a
factual account of the dumping and events leading up to the
dumping (this factual account confirmed the liability of the
PRPs named in the order). (Exhibit 6). On February 12, 1991,
Young Refining submitted a written response to an informal
request for information .by EPA. Young Refining's response
included numerous joint venture records that had been saved by
Continental Trading Company, and a factual admission of
liability. (Exhibit 3). Also in early 1991, Mr. Fred Liu,
owner of Continental Trading Company, came to EPA's offices and
gave a factual account of the waste recycling joint venture
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involving Young Refining and Continental. {Exhibit 7). Mr. Liu
submitted to EPA a large volume of records documenting wastes
received and handled by the joint venture. During the same
period, EPA made verbal contact with B. B. Hulsey, who denied
knowledge about and responsibilty for the Site. On February 27,
1991, Assistant Regional Counsel David Harbin discussed the case
on the telephone with in-house counsel for Chem-Nuclear,
including the basis for identifying Chem-Nuclear as a PRP.
Except for Hulsey, all of the PRPs named in the Order were at
some point provided documents in EPA's file in response to FOIA
requests.
On April 11, 1991, EPA Region IV issued a Unilateral
Administrative Order under Section 106 of CERCLA to Young
Refining, Hulsey, Continental, and Chem-Nuclear for the removal
of hazardous substances located at the Site. (Exhibit 4).
Yoking Refining submitted a written response to the Order
indicating that it did not intend to comply, and asserting
various objections to the order. (Exhibit 8). Chem-Nuclear
submitted a response indicating that it would comply with the
Order (Exhibit 9). Chem-Nuclear is now conducting the removal
in compliance with the Order, under the direction of EPA, and
without assistance or contribution from any other PRPs.
Continental indicated that it intended to comply, (Exhibit 11),
and is apparently willing to contribute a portion of clean-up
costs, but has not reached agreement with Chem-Nuclear as to
amount. Hulsey denied responsibilty and indicated that he does
not have assets to pay for the clean-up. (Exhibit 10). On-site
removal work commenced on September 9, 1991, and is expected to
be completed in late October 1991.
On May 15, 1991, EPA issued Information Requests to Young
Refining and Hulsey pursuant to Section 104(e) of CERCLA.
(Exhibits 14 and 17). On June 22, 1991, EPA received Young
Refining's response to EPA's May 15 Information Request.
(Exhibit 15). In its response, the Defendant stated, inter
alia, that its "previous alleged admissions of responsiblity, if
any, regarding the alleged incident of disposal were made in
error." Young Refining's basis for concluding that its previous
admissions were in error was the denial by Hulsey that he buried
any drums at the Site. (Exhibit 15, pages 27-28). EPA also
received a response to the 104(e) request issued to Hulsey.
Hulsey denied responsibility and denied that he had any assets.
(Exhibit 18). Hulsey's 104(e) response, however, was evasive
and inconsistent with his response to the Order. In response to
the Order, Hulsey had said that he transported drums to the Site
for Young Refining but was prevented from dumping them by a
government official. (Exhibit 10). In his 104(e) response,
Hulsey denied transporting any drums to the Site; rather, he
states that he was at the Site only to cover tires with dirt for
the Site owner, and when drums from an unknown source arrived
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Hulsey sent the trucks away. (Exhibit 18). Neither of Hulsey's
accounts are credible because Douglas Daniell observed him
dumping the drums. (Exhibit 23). In addition, Dr. Young's
prior statements include a statement that he observed Hulsey and
Lee Wallace burying the drums. (Exhibit 3, cover letter;
Exhibit 6).
On May 29, 1991, EPA sent a letter to Young Refining
addressing the various objections raised by Young Refining in
its response to the Unilateral Administrative Order. EPA
informed Young Refining that it did not find any of its
objections to the Order to have merit, or to constitute
"sufficient cause" for noncompliance with the Order. EPA
further informed Young Refining that its noncompliance could
therefore subject the Defendant to penalties and treble
damages. (Exhibit 16). Young Refining responded to this letter
with a letter dated September 11; 1991, in which Young Refining
restated its objections to the Order. (Exhibit 34).
On June 14, 1991, EPA issued a 104(e) information request to
Arivec Chemicals, Inc. (Exhibit 26), based on a statement from a
former (disgruntled) employee of Arivec that he had dumped drums
containing "paint bottoms" at the Site for Arivec during a
several year period. (Exhibit 25). Arivec, in its response,
denied ever dumping anything at the Site. (Exhibit 27).
In August 1991, EPA sent a follow-up 104(e) Request to Young
Refining (seeking 1989 and 1990 tax returns, which had been
sought but not obtained in the prior request), and to Hulsey
(seeking additional financial information). (Exhibits 19 and
21). Also in August 1991, financial information received from
Young Refining was sent to NEIC in Denver for evaluation of
Young Refining's ability to pay substantial penalties.
IX. COST RECOVERY
EPA's past costs at the Site are estimated to be
approximately $47,358.88 as of September 11, 1991. (Exhibit
29). These costs will increase as further EPA time is devoted
to removal oversight and cost recovery efforts at the Site. In
addition, interest should be added to past costs, interest to
run from the date a demand letter is issued. Complete cost
documentation has been ordered for costs incurred through August
31, 1991. Updated documentation will be provided as soon as it
is available.
Chem-Nuclear is presently conducting the removal at the
Site, and EPA anticipates taking no further response actions at
the Site after the removal is completed.
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EPA can recover punitive damages in this case of up to three
times the amount of any costs incurred by the Fund as a result
of Young Refining's failure without sufficient cause to take the
ordered removal action, pursuant to Section 107(c)(3) of
CERCLA. Costs attributable to Young Refining's failure to
comply with the Order would be limited to enforcement/cost
recovery costs because Chem-Nuclear carried out the requirements
of the Order. Oversight and other response costs would have
been incurred even if Young Refining had complied with the
Order. EPA will segregate enforcement costs to support a treble
damage claim. All of DOJ's costs will fit into this
"enforcement" category.
EPA anticipates no problems with the costs incurred or the
documentation of those costs.
X, PENALTIES AND PUNITIVE DAMAGES
Section 106(b)(1) of CERCLA provides that:
any person who, without sufficient cause, willfully
violates, or fails or refuses to comply with, any order
of the President under subsection (a) of this section
may, in an action brought in the appropriate United
States district court to enforce such order, be fined
not more than $25,000 for each day in which such
violation occurs or such failure to comply continues.
In addition, Section 107(c) of CERCLA provides that:
If any person who is liable for a release or threat of
release of a hazardous substance fails without
sufficient cause to properly provide removal or remedial
action upon order of the President pursuant to section
9604 or 9606 of this title, such person may be liable to
the United States for punitive damages in an amount at
least equal to, and not more than three times, the
amount of any costs incurred by the Fund as a result of
such failure to take proper action.
As discussed previously in this referral, EPA issued a
Unilateral Administrative Order to Young Refining and three
other PRPs under CERCLA Section 106(a) on April 11, 1991.
Young Refining failed to comply with the Order. One of the
other PRPs, Chem-Nuclear, is completing the removal in
compliance with the Order. EPA believes that Young Refining's
failure to comply with the Order was without sufficient cause
and that treble damages, and penalties of up to $25,000 per day
of non-compliance, are both authorized and appropriate. Treble
damgages would apply to EPA's enforcement costs only; EPA's
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other costs (e.g., oversight costs) are not attributable to
Young Refining's non-compliance. Penalties are authorized from
April;25, 1991 until removal work is completed (removal work is
expected to be completed in late October, 1991). At a rate of
$25,000 per day, penalties of up to $4,500,000 may be sought in
the Complaint (based on 180 days of noncompliance).
Young Refining could argue that penalties should not accrue
beyond the date that Chem-Nuclear's work plan was approved, or
the date that work actually commenced, because at that time
performance by Young Refining became impossible. EPA's position
would be that penalties continue until work is completed,
because Young Refining could have complied at any time simply by
indicating its intent to comply and entering into and
consummating negotiations with Chem-Nuclear for contribution to
the clean-up effort.
Young Refining raised a number of objections to the Order as
justification for its noncompliance. It does not appear that
any of them constitute "sufficient cause" for noncompliance.
However, Young Refining is likely to make a "sufficient cause"
argument. Young Refining's objections to the Order, and various
other legal issues that may affect EPA's ability to recover
penalties and punitive damages are fully discussed in Section
VlI(B)(l)(j) and (k) of this referral, supra pages 19-22.
Note that under Tull v. United States, 481 U.S. 412 (1987),
Young Refining has a right to a jury trial to determine
liability for penalties, although once liability is determined
the amount of penalties is fixed by the judge. Note also that
penalties and trebled damages would be recoverable against
Hulsey, who also refused to comply with the Order. It appears
that Hulsey is without resources, however, and therefore he is
not proposed as a defendant.
XI. OTHER LEGAL ISSUES
Except for those legal issues discussed above, the Region
does not expect other legal issues to arise in this matter.
XII. LITIGATION/SETTLEMENT STRATEGY
A. Settlement Negotiations and Cost Recovery Strategy
To date, no settlement negotiations have been conducted
concerning cost recovery or penalties/punitive damages.
The focus of this case, as part of the Agency's
Non-complier/Non-settlor Initiative, is on penalties and
punitive damages. Therefore, any settlement should include a
substantial penalty in addition to all of EPA's outstanding
costs.
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No groundwater monitoring or treatment was ordered as part
of the removal. The Site did not score high enough to be placed
on the NPL, and EPA anticipates no further EPA-directed response
activity at the Site. The state has expressed interest,
however, in ordering the PRP's to assess and, possibly,
remediate groundwater. This possible response action should be
kept in mind because settlement could be conditioned on Young
Refining's agreement to comply with orders issued by the state
with respect to groundwater monitoring and remediation.
B. Discovery
The proposed defendant has based its refusal to comply with
the Section 106 Order in part on "insufficient evidence that
Young Refining is a PRP". Even though current evidence is
substantial, discovery may be helpful to further develop the
case for liability.
In order to further develop EPA's case for liability, it may
be worthwhile to depose Hulsey (who thus far has been an
uncooperative witness and has given inconsistent accounts of the
dumping incident), Dr. Young, and a number of Young Refining
employees who may have some knowledge of the dumping. It may
also be worthwhile to depose Douglas Daniell to flesh out his
account of the dumping. Additionally, Georgia EPD officials who
investigated the dumping in 1976 could be deposed. The names of
EPD officials who participated in the investigation are in EPA*s
Site file. (Exhibit 2, pages 109-144). Fred Liu, the owner of
Continental, could be deposed to obtain information about the
Young Refining/Continental joint venture, and the accumulation
of wastes which presented a disposal problem. Further
discovery may also be necessary to assess the financial ability
of Young Refining to pay substantial penalties.
XIII. WITNESSES
The following witnesses would be expected to testify if this
matter went to trial:
1. Don Rigger
On-Scene Coordinator
U. S. EPA Region IV
345 Courtland Street, N.E.
Atlanta, Georgia 30365
(FTS) 257-3931
Mr. Rigger would testify as to the conditions at the Site prior
to the removal conducted by Chem-Nuclear, the release or
threatened release of hazardous substances at the Site, and the
removal action conducted by Chem-Nuclear and overseen by EPA.
In addition, Mr. Rigger will testify as to the conditions at the
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Site which led to the issuance of the § 106 order in April,
1991, and the consistency of actions taken at the Site with the
National Contingency Plan. Mr. Rigger could also testify as to
Dr. Young's in-person statement made at EPA's offices on
February 1, 1991. In the factual account related by Dr. Young
at that meeting, Dr. Young acknowledged that the drums dumped at
the Site came from Young Refining.
2. Douglas Daniel!
Supervisor, Environmental Health
Douglas County Board of Health
6704 E. Church Street
Douglasville, Georgia 30134
(404) 920-7311
Mr. Daniell would testify as to the dumping of eighty 55-gallon
drums at the Site in 1976, which he observed after going to the
Site in response to a citizen's complaint. Mr. Daniell will
testify that when he went to the Site he saw the transporter,
Bartlett B. Hulsey, engaged in dumping the drums; that Dr.
Young, President of Young Refining, called Mr. Daniell the next
day and stated that the drums had come from Young Refining and
that Dr. Young had arranged with Hulsey to dispose of the
drums. Mr. Daniell's affadavit is on file. (Exhibit 23).
3. Tex Ann Reid
Waste Programs Branch
South Cost Recovery Unit
U.S. EPA Region IV
345 Courtland Street, N.E.
Atlanta, Georgia 30365
(FTS) 257-5059
4. Financial Management Office
U.S. EPA Region IV
345 Courtland Street, N.E.
Atlanta, Georgia 30365
(FTS) 257-3278
Ms. Reid and the appropriate official from the Financial
Management Office would testify in support of EPA's past costs,
including payroll, travel and contract costs as well as indirect
costs, enforcement costs and interest.
5. Fred Liu
Continental Trading Company
792 Windsor Street, S.W.
Atlanta, Georgia 30315
(404) 524-6744
Mr. Liu would testify about a waste recycling joint venture in
which Mr. Liu's business, Continental Trading Company, and Young
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Refining participated in the early 1970's. Mr. Liu will
describe the activities of the joint venture and how the joint
venture accumulated a substantial number of 55-gallon drums
containing industrial wastes on Young Refining's property, which
drums presented a disposal problem to the joint venture. Mr.
Liu will also testify as to his payment of $10,000 to Young
Refining to pay for the costs of disposing of accumulated
drums. No statement of Mr. Liu's is on file, although Assistant
Regional Counsel David Harbin's notes of an interview with Liu
are in the file. (Exhibit 7).
6. Dr. C. B. F. Young
Young Refining Corporation
7982 Huey Road
Douglasville, Georgia 30134
Dr. Young would be an adverse witness, but much of his testimony
would be helpful to EPA. Dr. Young would testify as to the
activities of the joint venture described above, the
accumulation of drums which presented a disposal problem, and
his arrangement with Bartlett B. Hulsey to dispose of drums.
Until recently, Dr. Young has admitted that the drums at the
Site were from Young Refining. However, based on Hulsey's
recent statement that he did not dump any drums at the Site, Dr.
Young no longer admits that Young Refining's drums were dumped
at the Site. A written account submitted by Young Refining's
attorneys, which purports to be a summary of Dr. Young's
recollection of the dumping incident, is in the file. (Exhibit
3, cover letter). Also, Assistant Regional Counsel David
Harbin's notes of an interview with Dr. Young are in the file
(Exhibit 6). Both the notes and the written summary admit that
the drums buried at the Site came from Young Refining.
7. David Harbin
Assistant Regional Counsel
U. S. EPA Region IV
345 Courtland Street, N.E.
Atlanta, Georgia 30365
(FTS) 257-2335
Mr. Harbin attended the February 1, 1991 meeting at EPA's
offices at which Dr. Young gave a factual account of the dumping
at the Site. Dr. Young admitted that the drums dumped at the
Site came from Young Refining in that account. Mr. Harbin's
notes of this meeting are in the file, and are attached as
Exhibit 6 to this referral.
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8. Bartlett B. Hulsey
1970 Britt Road
Douglasville, Georgia 30134
Mr. Hulsey is an adverse witness whose credibility will be so
easily attacked that his testimony will be helpful to EPA. Mr.
Hulsey transported drums to the Site. Douglas Daniell observed
Hulsey at the Site burying drums, and according to Dr. Young's
previous statement, Dr. Young observed him burying drums at the
Site also. Dr. Young, by his own admission, arranged with
Hulsey to dispose of drums. In a written response to the Order,
Hulsey stated that he took drums to the Site for Young Refining
but was prevented from dumping any drums by a government
official. In response to a subsequent 104(e) reguest, Hulsey
stated that he did. not take any drums to the Site. Instead, he
stated that he was at the Site covering tires with dirt for the
property owner when trucks carrying drums to the Site arrived
from some unknown location, and Hulsey sent them away because he
did not want drums dumped where he was engaged in covering tires
with dirt. EPA cannot predict what Hulsey would say on the
stand. A thorough deposition will be needed if we are to use
Hulsey as a witness.
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APPENDIX A - LIST OF EXHIBITS
Exhibit
1. Site Screening Inspection Report
2. Technical Assistance Team, Final
Report, Basket Creek Drum Disposal
Site
3. Response of Young Refining to
Informal Information Request
4. EPA Section 106 Administrative Order
5. Memo from ATSDR,
6. Meeting Notes, Statement of Dr. Young
7. Meeting Notes, Statement of Fred Liu
8. Young Refining Response to § 106 order
9. Chem-Nuclear Response to § 106 order
10. B. B. Hulsey Response .to § 106 order
11. Continental Response to § 106 order
12. Supplemental Continental Response
to § 106 order
13. Letter from Continental's counsel
to EPA
14. Request for Information to Young
Refining
15. Response of Young Refining to
Information Request
16. EPA Letter to Young Refining re:
Objections to Order
17. Request;for Information to B. B. Hulsey
18. Response of B. B. Hulsey to
Information Request
19.. Follow-up Information Request to
Young Refining
20. Young Refining Response to
Follow-up Information Request
21. Follow-up Information Request to
B. B. Hulsey
22. Memo of interview with B. B. Hulsey
23. Affadavit of Douglas W. Daniell
24. EPA Interim Investigative Report,
Interview Summaries
25. Statement of Bobby Nunnaly, Former
Arivec Chemicals, Inc. Employee
26. Request for Information to Arivec
Chemicals, Inc.
27. Response of Arivec Chemicals to
Information Request
28. Removal Action Plan
29. Cost Summary
30. Cost Documentation
31. List of Administrative Record Contents
32. ATSDR Memorandum (Health Consultation)
33. EPA letter to Ms. Harriet Foster
(transmitting results of well sampling)
34. Supplemental Response to' Order from
Young Refining
Date
May 24, 1989
May 2, 1990
February 12, 1991
April 11, 1991
May 15, 1990
undated
undated
April 25, 1991
April 26, 1991
April 17, 1991
April 22, 1991
April 24, 1991
May 10, 1991
May 15, 1991
June 21, 1991
May 29, 1991
May 15, 1991
June 18, 1991
Undated
Sept. 11, 1991
August 28,1991
Sept. 19, 1991
May 30, 1991
May 3, 1991
April 23, 1991
June 14, 1991
Undated
July 12, 1991
Sept. 11, 1991
to be forwarded
undated
August 8, 1991
undated
Sept. 11, 1991
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I. SYNOPSIS OF THE CASE
This referral requests that a civil action be filed pursuant to
Section 107 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C.
§ 9607, as amended, for the reimbursement of removal response
costs incurred by EPA in responding to the release or threatened
release of hazardous substances at the Shaver's Farm site (the
"Site") near Kensington, Georgia. This referral also requests
that the civil action seek punitive damages under Section
107(c)(3) of CERCLA, 42 U.S.C. S 9607(c)(3), for Velsicol's
failure to comply with the Adminstrative Order on Consent (AOC)
in effect for this Site.
The Site is located on rural property in Walker County, Georgia.
When hazardous substances were disposed at the Site, the Site was
owned by Nancy Shaver Nation. In 1972, her father, Harold
Shaver, entered into an agreement with Hose and Sidney Ma this,
commonly referred to as the Mathis brothers, to allow the
disposal of industrial waste on the property. Between 1972 and
1974 the Mathis brothers arranged for companies to dispose of
waste at the Site and transported the wastes from the companies
to the Site. Companies disposing of waste at the Site included
Velsicol Chemical Corporation ("Velsicol"), GAF, Inc. ("GAF")
and American Latex Company ("ALC"). Velsicol sent herbicide
wastes and benzonitrile to the Site. GAF sent solidified and
liquid latex wastes, and ALC sent rinsewaters from its latex
manufacturing process.
The U.S. Environmental Protection Agency ("EPA") first conducted
sampling at the Site in 1984 after learning of the Site from the
Georgia Department of Natural Resources. Based on conditions at
the Site, and focusing on wastes sent to the Site by Velsicol,
EPA determined that a removal action was necessary and issued
notice letters and unilateral adminstrative orders to potentially
responsible parties ("PRPs") in 1987. These PRPs included
Velsicol, Hose and Sidney Mathis, and Harold and Eretta Shaver.
In 1988, EPA entered into an administrative order on consent
("AOC") under Section 106 of CERCLA, 42 U.S.C. § 9606, with
Velsicol to perform the removal. The parties amended this AOC in
1989.
The AOC, as amended, required the excavation of contaminated
soils at the Site and the treatment or off-site disposal of the
contaminated soils. Velsicol began excavating soils and drums at
the Site. Velsicol staged these soils and drums in a manner
which did not comply with the AOC or workplans approved
thereunder. In the excavation of the contaminated soils,
Velsicol opened numerous trenches which flooded in the fall and
winter of 1989. In conducting these activities, Velsicol
committed numerous violations of worker health and safety
regulations, in violation of the National Contingency Plan and
the AOC. These conditions resulted in the release of hazardous
substances or increased the likelihood of a release of hazardous
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2
substances. For these reasons, EPA took the Site back from
Velsicol in February 1990.
In April 1990, EPA executed an action memorandum authorizing the
expenditure of $5,782,150 for removal activities at the Site.
This action memorandum contained an exemption under Section
104(c) of CERCLA, 42 U.S.C. § 9604(c), from the $2,000,000
spending limitation on removals found in Section 104* In the
removal, EPA-excavated and placed into on-site storage cells
approximately 60,000 cubic yards of contaminated soils. Pursuant
to the action memorandum, EPA also constructed a wastewater
treatment system to treat contaminated water in the excavation
trenches. In October 1990, EPA completed the removal action.
EPA's reported costs, as of August 8, 1992, total $5,474,266.95.
EPA issued a cost recovery demand letter to Velsicol on
June 26, 1992, in the amount of $5,460,836.71 and issued an
updated cost recovery demand letter to Velsicol on
March 17, 1993, for the amount of past costs and accrued interest
sought in this referral. EPA has attempted to negotiate a
settlement'of this matter with Velsicol. To date, these
negotiations have been unsuccessful. EPA issued cost recovery
demand letters to the Mathis brothers on July 17, 1992, and
issued updated cost recovery demand letters to them on
March 17, 1993, but they have simply denied liability and no
negotiations have occurred with-them. EPA issued cost recovery
demand letters to GAF and Mydrin on February 23, 1993. Both of
those parties have responded by indicating that they will review
the matter prior to issuing a reply. EPA has not yet received
those replies.
Running from the date of the initial cost recovery demand letter
to Velsicol, interest has accrued in the amount of $142,410.58 as
of January 22/ 1993. Because the demand letters to the Mathis
brothers, GAF and Mydrin were issued at later dates, interest
accrued on those demand letters is lower. EPA will update the
interest calculations prior to the filing of the complaint.
The primary defendant in this case is Velsicol, as a generator of
hazardous substances disposed of at the Site. ALC, whose
successor in interest is Mydrin, and GAF are also generators of
hazardous substances disposed of at the Site. The Mathis
brothers are potentially liable as operators of the Site and as
tranporters of hazardous substances to the Site, but may be
financially unable to reimburse EPA's past costs. fcretta Shaver
and Nancy Shaver Nation are potentially liable as the current and
past owners of the Site, but have potential defenses to
liability. Nancy Shaver Nation is financially unable to
reimburse any substantial portion of EPA's past costs or
performing further work at the Site. Harold Shaver is deceased.
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II. SIGNIFICANCE OF TEE REFERRAL
A. This referral seeks recovery of $5,474,266.95 in past
costs incurred through October 7, 1992, plus interest in the
amount of $142,410.58, and a declaratory judgment for future
costs. Additionally, this referral seeks the imposition of
$13,906,876.86 in punitive damages under Section 107(c)(3) of
CERCLA, 42 U.S.C. § 9607(c)(3), for Velsicol's failure to comply
with the AOC.
B. This referral is not part of a special EPA initiative.
III. STATUTORY BASIS OF REFERRAL/LEGAL BASIS OF CASE
A. Applicable Statutes
1. Removal Authority
Section 104(a)(1) of CERCLA, 42 U.S.C. § 9604(a)(1), as amended,
which gives the President authority to respond to the release or
threatened release of hazardous substances, provides:
whenever (A) any hazardous substance is released or
there is a substantial threat of such a release into
the environment, or (B) there is a release or
substantial threat of release into the environment of
any pollutant or contaminant which may present an
imminent and substantial danger to the public health or
welfare, the President is authorized to act, consistent
with the national contingency plan, to remove or
arrange for the removal of, and provide for remedial
action relating to such hazardous substance, pollutant
or contaminant at any time (including its removal from
any contaminated natural resource), or take any other
response measure consistent with the national
contingency plan which the President deems necessary to
protect the public health or welfare or the
environment...
2. Liability for Past Costs
Section 107(a), of CERCLA, 42 U.S.C. § 9607(a), as amended,
establishes liability for reimbursement of funds expended
pursuant.to Section 104(a)(1) of CERCLA. This Section provides
as follows:
Section. 107(a). Notwithstanding any other provision or
rule of law, and subject only to the defenses set forth
in subsection (b) of this section -
(1) the owner and operator of a vessel or facility,
(2) any person who at the time of disposal of any
hazardous substance owned or operated any facility at
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which Buch hazardous substance? were disposed of,
(3) any person who by contract, agreement or otherwise
arranged for disposal or treatment, or arranged with a
transporter for transport for disposal or treatment, of
hazardous substances owned or possessed by such person,
by any other party or entity, at any facility or
incineration vessel owned or operated by another party
or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous
substances for transport to disposal or treatment
facilities, incineration vessels or sites selected by
such person, from which there is a release, or a
threatened release which causes the incurrence of
response costs, of a hazardous substance, shall be
liable for -
(A) all costs of removal or remedial action
incurred by the United States Government or a State or
Indian tribe not inconsistent with the national
contingency plan;
(B) any other necessary costs of response incurred by
any other person consistent with the national
contingency plan;
(C) damageb for injury to, destruction of or loss of
natural resources, including the reasonable costs of
assessing such injury, destruction or loss resulting
from such a release; and
(D) the costs of any health assessment or health
effects study carried out under section 9604(i) of this
title.
The amounts recoverable in an action under this section
shall include interest on the amounts recoverable under
Subparagraphs (A} through (D). Such interest shall
accrue from the later of (i) the date payment of a
specified amount is demanded in writing, or (ii) the
date of the expenditure concerned. The rate of
interest on the outstanding balance of the amounts
recoverable under this section shall be the same rate
as is specified for interest on investments of the
Hazardous Substance Superfund established under
subchapter A of Chapter 98 of Title 26.
3. Liability for Punitive Damages
Section 107(c)(3) of CERCLA, 42 U.S.C. § 9607(c)(3), provides:
If any person who is liable for a release or threat of
a release of a hazardous substance fails without
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5
sufficient cause to properly provide removal or
remedial action upon order of the President pursuant to
Section 9604 or 9606 of this title, such person may be
liable to the United States for punitive damages in an
amount at least equal to, and not more than three
times, the amount of any costs incurred by the Fund as
a result of such failure to take proper action.
B. Jurisdiction and Venue
Section 113(b) of CERCLA, 42 U.S.C. § 9613(b), provides that the
United States district courts shall have exclusive^jurisdiction
over all controversies arising under CERCLA. Section 113(b)
further provides that venue shall in any district in which the
release or damages occurred, or in which the defendant resides,
may be found, or has its principal office. In this case, the
release or threatened release occurred at the Site in Walker
County, Georgia, which is located in the Rome Division of the
Northern District of Georgia. Eretta Shaver and the Mathis
brothers are residents of Walker County. Both Velsicol and GAF
are corporations incorporated in the State of Delaware, located
in the District of Delaware. Mydrin is a corporation
incorporated in the State of Georgia. Because the Site is
located in Walker County, and because Mrs. Shaver and the Mathis
brothers reside there, venue most appropriately lies in the Rome
Division of the Northern District of Georgia.
IV. DESCRIPTION AND HISTORY OF THE SITE
A. Site Location and Description
The Site is located in Walker County, Georgia on property which
is generally referred to as "Shaver's Farm". This property
actually consists of three separate disposal areas which EPA
refers to as "Shaver's I", "Shaver's II", and the "Chickamauga
Road Landfill." The response costs for which EPA seeks
reimbursement in this referral were expended solely on the area
referred to as "Shaver's I", and for purposes of this referral,
"Site" shall refer solely to Shaver's I. References to Shaver's
II and the Chickamauga Road Landfill are included as necessary
for purposes of clarification.
The Site lies on approximately 120 acres of relatively flat land
located 5 miles north of LaFayette, Georgia and approximately one
quarter mile east of Chickamauga Road. The land is mixed open
fields and woodland. The geology at the Site is primarily highly
fractured karst terrain. A stream runs through the Site and
several springs and sinkholes are located near the Site. The
population within one mile of the Site is 83 people, and the
population within 4 miles of the Site is 3,786 people. The
Kensington Water Service is the only public water supply in the
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6
area, having 1,300 connections. Another 95 public wells are in
use within four (4) miles of the Site.
Disposal at the Site occurred on approximately five (5) acres,
much of which was subject to soil excavation during the removal.
The excavated areas have been backfilled, and the Site now
contains the two soil containment cells constructed by EPA, as
well as a leachate storage, treatment and disposal system, a drum
storage area and miscellaneous structures.
B. Site History
1. Ownership
At the time of disposal of hazardous substances at the Site
between 1972 and 1974, the Site was owned by Nancy Shaver Nation
(Ex. 81). She obtained title to the property in 1944, when her
father, Harold Shaver, purportedly purchased the property in her
name. (Ex. 41, 43, 44). Ms. Nation sold the property to William
F. and Shelva Jean Morrisette in 1989. However, after learning
of the Site contamination, the Morriset^es sued for rescission of
the sale. In a consent judgment dated November 13, 1989, Harold
Shaver and his wife Eretta took title to the Site. (Ex. 1).
Apparently, they took title to the Site voluntarily and only out
of a sense of familial responsibility, rather than because of any
legal obligation. (Ex. 44). Mr. Shaver died on November 3, 1990,
and Eretta Shaver remains the current owner of the Site.
(Ex. 81). The current location of the Horrissettes is unknown.
2. Operation
Prior to 1973, Shaver's Farm had served as an unpermitted
community dump. As early as 1972, the Mathis brothers were
disposing of GAF and ALC waste at the Site. (Ex. 86). Pursuant
to a 1973 agreement between Mr. Shaver and the Mathis brothers,
the Mathis brothers transported wastes to the Site for disposal,
and in return, the Mathis brothers paid Mr. Shaver $150 per
month. From 1973 to January 1974, the Mathis brothers
transported wastes generated by Velsicol, GAF and ALC to the Site
for disposal (Ex. 63). Purportedly, neither Nancy Shaver Nation
nor Eretta Shaver had any involvement whatsoever with the waste
disposal arrangements. (Ex. 41, 43, 44). In addition to
transporting the wastes to the Site, the Mathis brothers,
assisted by their family members, conducted the actual waste
disposal operations at the Site.
During and after the time that the Mathis brothers operated the
Site, Mr. Shaver was also allowing the Standard Brands Chemical
Company to dispose of waste in the Shaver's II area of Shaver's
Farm. That waste included latex waste. The Mathis brothers were
not involved with that operation, but documents from that time
period often mention both facilities. In December 1973, the
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State instructed the Mathia brothers to cease operations at the
Site because the Kathis brothers' operations waB coming too near
a sinkhole on the Site. (Ex. 82, 85). By January 1974, the
Hathis brothers had ceased operations at the Site. (Ex. 83).
3. Initial Response Activities
EPA first learned of the Site from the Georgia Department of
Natural Resources 1984. Initial sampling performed by EPA
between 1984 and 1987 confirmed the presence of hazardous
substances in the eoil and the springs at the Site.
(Ex. 3, 4, 5, 6, 7). Based on this information, in 1987 Region
IV issued a unilateral administrative order ("UAO"} to Velsicol,
Kr. and Mrs. Shaver, and the Mathis brothers requiring
performance of a soil removal at the Site. (Ex. 9). However,
because of apparently unworkable deadlines in the UAO, EPA agreed
to forego enforcement of the UAO. (Ex. 52, 53, 54).
On March 30, 1988, Region IV and Velsicol entered into an
administrative order on consent ("AOC") under which Velsicol
would perform the removal. (Ex. 10). In January 1989, EPA began
negotiations with Velsicol on amendments to the AOC. (Ex. 55).
EPA later formally notified Velsicol that aditional work was
necessary under the AOC. (Ex. 56). On November 8, 1989, the
parties modified the AOC. (Ex. 11). This AOC, as modified, was
the operative document under which Velsicol attempted to perform
removal response actions at the Site.
C. NPL Status
Shaver's Farm is not currently on the National Priorities List
(NPL). However, the Region IV Site Assessment Section is
currently examining the entire Shaver's Farm property, including
Shaver's I, Shaver's II and the Chickamauga Road Landfill, for
purposes of inclusion on the NPL.
D. Environmental Problems at the Site
Numerous sampling events have occurred at this Site. The
following is a summary of those sampling results, as well as a
discussion of the environmental threats posed by the Site.
1. Sample Results Prior to Action Memo
By the time EPA signed the final action memorandum and Section
104(c) exemption, repeated sampling events had occurred at the
Site. EPA's final action memorandum summarized the maximum
concentrations which had been detected to date. (Ex. 21).
Results of sampling conducted prior to EPA's issuance of its
final action memorandum are included with this referral.
(Ex. 3, 4, 6, 105, 108, 109, 111, 112, 114, 115).
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2. Sample Results After Action Memorandum
After EPA took the Site over in February 1990, EPA conducted
extensive sampling. For example, EPA's contractors took numerous
samples during the excavation of the contaminated soil* For
convenience, these results have been summarized (Ex. 8).
However, the sampling results and supporting documentation are
voluminous and are therefore not included with this referral.
Those results are available at EPA's offices in Atlanta. Other
post-action memorandum samplin results are also included with
this referral. (Ex. 110, 113).
3. Human Health and Environmental Threat
EPA's action memorandum summarizes the threat which this Site
poses to human health and the environment. (Ex. 21). The primary
threats were exposure to hazardous substances at or near the
surface and a threat to groundwater.
V. DESCRIPTION OF RESPONSE ACTION
A. Response Activities Conducted bv Defendants
The AOC, as modified, required Velsicol to excavate and stage
bulk wastes and contaminated soils, to be followed by the
treatment or disposal of those materials. While the AOC
modification was being negotiated, Velsicol conducted certain
sampling and geophysical surveys. EPA also conducted geophysical
surveys. Beginning on November 7, 1989, Velsicol began
excavating areas of the Site which the geophysical surveys had
identified as likely past disposal areas.
Pursuant to the AOC modification, Velsicol was only responsible
for the removal of hazardous substances attributable to Velsicol.
As set forth in the AOC modification, these hazardous substances
were:
benzonitrile
benzoic acid
dicamba
3,6 dichlorosalicyclic acid
Of these four hazardous substances, EPA focused primarily on
dicamba and benzonitrile.
The AOC modification set forth the following clean-up criteria
for those hazardous substances:
- combined soil concentrations of benzonitrile and
benzoic acid equal to or less than 25 parts per
million by weight (ppm)
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9.
- combined soil concentrations of dicamba and
3,6 dichlorosalicyclic acid equal to or less than
25 ppm
EPA documentation concerning these clean-up levels are included
in the. administrative record and as exhibits to this referral.
(Ex. 12, 13). Velsicol agreed to the appropriateness of these
clean-up levels. (Ex. 14).
Soil failing the clean-up criteria described above was staged at
the Site. Velsicol excavated approximately 7,500 to 10,000 cubic
yards of contaminated soil. Velsicol staged approximately 4,000
cubic yards of these soils without proper liners, without covers/
and on or in close proximity to a nearby floodplain. Velsicol
also excavated between 600 and 650 drums from the trenches.
Velsicol overpacked these drums, but failed to adequately
characterize the wastes in those drumB. Velsicol also staged
these drums on or in close proximity to the floodplain.
Unusually heavy rainfall occurred between November 1989 and
February 1990. This precipitation, in conjunction with
Velsicol's site management practices, resulted in the flooding of
the numerous excavation trenches opened by Velsicol. This
flooding, in conjunction with Velsicol's soil and waste staging
activities, resulted in the Site posing an increased threat.
Pursuant to the AOC, as modified, EPA agreed to accept
responsibility for wastes at the Site which were not attributable
to Velsicol. These other wastes, primarily the latex wastes,
were placed into a separate waste pile for which EPA took
responsibility. EPA executed an action memorandum authorizing
$692,000 to pay for the anticipated costs of handling these
wastes. {Ex. 18).
B. Response Activities Conducted by EPA
1. Description of the Removal Action
a. General Description
On February 2, 1990, EPA mobilized to the Site in response to a
release of a gas from an uncharacterized drum. After this event,
EPA did not relinquish control of the Site. Because of the
deterioration in Site conditions caused by Velsicol's mismanaged
removal activities, EPA notified Velsicol that EPA was taking
control of the Site by letter dated February 14, 1990. (Ex. 15).
EPA and Velsicol met soon thereafter to discuss the Site. At
that meeting,<£PA presented Velsicol with a list of the reasons
that EPA was assuming control of the Site. (Ex. 16). Although
Velsicol did respond in writing to EPA's decision and comments,
Velsicol did not invoke dispute resolution under the AOC or
otherwise dispute EPA's decision. (Ex. 17).
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EPA signed an action memorandum on February 21, 1990, authorizing
the expenditure of $1,978,000 at the Site. (Ex. 19). It soon
became apparent this amount would be insufficient to complete the
work at the Site* By memorandum dated April 3, 1990, Region IV
requested approval of a $5,782,150 action memorandum and
exemption from the 12 month/$2,000,000 limitations on response
actions contained in Section 104(c) of CERCLA, 42 U.S.C.
S 9604(c). (Ex. 20). By memorandum dated April 12, 1990, EPA'b
Office of Solid Waste and Emergency Response approved the
exemption and the action memorandum. (Ex. 21).
The removal primarily consisted of the excavation of contaminated
soil and the placement of that soil into two on-site containment
cells which EPA constructed. Oicamba and benzonitrile wastes
were found loose in the soil as well as in deteriorated drums.
EPA excavated and stored approximately 60,000 cubic yards of soil
and waste in the cells. The cells have a synthetic liner and
leachate collection system on the bottom. The cells are covered
by another synthetic liner as well as a layer of dirt, and are
seeded with grass.
During the Boil excavation, bulk latex waste and drums of latex
waste were excavated along with the dicamba and benzonitrile
wastes. The bulk latex waste was usually solidified, while the
drummed latex wastes included both solids and liquids. Bulk
latex waste which did not appear to be commingled with the
Velsicol wastes was generally placed back in the ground. If
sampling indicated that latex wastes were contaminated with
hazardous substances attributable to Velsicol at concentrations
above clean-up levels set in the AOC, EPA placed those wastes
into the storage vaults. If sampling indicated that drummed
latex waste was not contaminated at levels above the clean-up
criteria set forth in the AOC as modified, EPA overpacked the
drums of latex waste, and stored the overpacks on Site. The
overpacks of latex waste totalled 280 drums, all of which are
still located at the drum storage area at the Site.
Material excavated by EPA consisted primarily of contaminated
soils and buik wastes, including trash. EPA conducted extensive
sampling during the course of the removal to document the levels
of contamination in the wastes and soils. The results of this
sampling have been summarized for convenience (Ex. 8) and are
available at EPA's offices in Atlanta.
EPA's removal also contained and treated the rainwater and
surfacewater which had collected in the excavated trenches. The
action memorandum estimated that, prior to EPA resuming control
of the removal activities, the trenches contained 1,000,000
gallons of water.
EPA contractors designed the storage vaults to include leachate
collection systems and a vent system. Leachate from the cells is
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treated in the on-site treatment system and is then disposed of
on the contaminated portion of the Shaver's II area.
After EPA assumed control of the removal, EPA's contractors
prepared weekly summaries of site activities referred to as
pollution reports. (Ex. 64). EPA also took aerial photographs
during this time (Ex. 66). In addition, EPA's On-Scene
Coordinators and Technical Assistance Team ("TAT") contractor
kept daily log books throughout the entire removal (Ex. 65). EPA
also made extensive photographic documention during the entire
removal. (Ex. 67). This documentation provides the best detailed
description available of response actions at the Site.
EPA concluded its work at the Site on or about October 4, 1990.
Immediately thereafter, EPA allowed Velsicol to return to the
Site to take over site operation and maintenance activities.
Pursuant to a plan approved by the On-Scene Coordinator, these
activities include periodic inspections, operation of the
leachate collection and treatment system, and erosion control of
the vault.
2. Community Relations
Because of low community interest, community relation activities
have been limited to the issuance of press releases.
3. ATSDR Evaluation
On four occasions, ATSDR reviewed Site information and provided a
written opinion to EPA. These written opinions are briefly
summarized here.
By memorandum dated February 6r 1986, ATSDER stated that, based
on data provided by EPA, dicamba was not present at levels of
public health concern or in exposure pathways of concern.
(Ex. 25).
By memorandum dated November 14, 1986, ATSDR stated that it did
not have enough information to make an assessment. "Unless you
can document high concentrations, or that drums are buried on
Site, an assessment can not be made." (Ex. 26).
By memorandum dated April 29, 1988, ATSDR again stated that it
did not have enough information to properly assess the threat
which the Site posed. However, based on the presence of buried
drums, ATSDR did recommend the implementation of source control
measures to prohibit the migration of contaminants into the
groundwater. (Ex. 27).
By memorandum dated April 6, 1990, ATSDR concluded that the Site
did pose a threat to public health. ATSDR, noted, however, that
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it could not assess the degree of threat with the data then
available to it. (Ex. 28).
4. Status of the Administrative Record
The notice of availability of the administrative record file was
published on January 31, 1992. (Ex. 22). The local repository is
located at:
Lafayette Walker County Public Library
P.O. Box 707
Lafayette, Georgia 30728
Velsicol was the only person to file comments on the
administrative record file. (Ex. 23). Those comments have been
added to the administrative record file. Prior to certification
of the administrative record, EPA will also generate a
responsiveness summary for those comments. An index to the
administrative record file is included as Exhibit 24 to this
referral. The entire eleven (11) volume administrative record
file will be forwarded upon request.
This removal did not fully comply with the community relation
requirements of the NCP because the administrative record file
was not made available within sixty days of initiation of on-site
activities, as required by 40 C.F.R. § 300.415(m)(2)(i).
However, this error does not serve to prejudice the defendants.
Initially, it should be noted that public comment periods on
removal administrative record files is discretionaly with the
Agency. 40 C.F.R. 300.820(b)(2). Additionally, as stated above,
a public comment period was provided and Velsicol did submit
comments. Velsicol's comments will be part of the administrative
record when it is certified to the court, and Velsicol therefore
has the benefit of submitting those comments. Finally, even had
the administrative record file been made available in a timely
fashion, EPA's removal was already in full progress by the time
that administrative record file would have been made public.
Nothing that would have been submitted by commenters at that time
would have altered EPA's response actions.
GAF and Mydrin and not been specifically notified of the removal
action. Moreover, Mydrin had never received any notification of
liability at the Site prior to the removal. Rather than face
potential challenges to EPA's remedy selection based on
inadequate opportunity to comment, the United States could grant
a opportunity for public comment to GAF and Mydrin. In light of
the fact that a public comment period was discretionary in this
case, however, such a public comment period should be
unnecessary.
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VI. NATURAL RESOURCE DAMAGE CLAIMS
No assessment of natural resource damages has been made at this
Site.
VII. PRIMA FACIE CASE. LIABILITY AND DESCRIPTION OF
POTENTIAL DEFENDANTS
A. Prima Facie Case
1. Introduction
To establish a prima facie liability in a CERCLA cost recovery
suit/ a plaintiff must prove:
(1) that the site in question is a "facility" as defined in
Section 101(9) of CERCLA, 42 U.S.C. §9601(19);
(2) that a release or threatened release of hazardous
substances has occurred;
(3) that the release or threatened release has caused
the plaintiff to incur response costs; and
(4) that the defendant is a responsible person under Section
107(a) of CERCLA, 42 U.S.C. §9607(a).
This subsection will discuss the first three elements identified
above. The fourth element will be discussed in the portions of
subsection B of this Section pertaining to each defendant.
1. The Site is a facility
Section 101(9) of CERCLA, 42 U.S.C. § 9601(19), defines
"facility" to include landfills or "any site or area where a
hazardous substance has been deposited, stored, disposed of, or
placed, or otherwise come to be located." As described
throughout this referral, hazardous substances are located at
this Site. The Site is therefore a facility as that term is
defined by CERCLA.
2. A Release or Threatened Release of Hazardous
Substances has Occurred at the Facility
At the time EPA issued the final action memorandum and Section
104(c) exemption, there was a release, as defined in Section
101(22) of CERCLA, 42 U.S.C. § 9601(22), or threatened release of
hazardous substances at the Site. This release or threatened
release is evidenced by the soil piles, hundreds of improperly
staged drums, drums and wastes in the ground, and the
contaminated water in the open trenches. Sampling results
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confirming the presence and level of hazardous substances are
described in Section IV(D) of this referral.
3. The Release or Threatened Release of Hazardous
Substances has Caused the Plaintiff to Incur
Response Costs
As set forth in EPA's action memorandum, EPA conducted the
removal at the site as a result of the release or threatened
release of hazardous substances at the Site. As indicated in the
action memorandum, EPA's action was taken particularly in
response to the release or threatened release of the hazardous
substances attributable to Velsicol. (Ex. 21).
B. Liability and Description of Potential Defendants
1. Velsicol Chemical Company
a. Description.
Velsicol arranged for the disposal of hazardous substances at the
Site. Velsicol is therefore potentially liable as a "generator"
under Section 107(a)(3) of CERCLA, 42 U.S.C. §9607(a)(3).
Courts have held that in order to hold a defendant liable under
Section 107(a)(3) of CERCLA, a plaintiff must establish that the
defendant:
(1) disposed of its hazardous substances;
(2) at a facility which now contains hazardous substances of
the sort disposed of by the generator; [and]
(3) that there is a release or threatened release of that or
some other type of hazardous substance;
(4) which causes the incurrence of response costs.
New York v. Exxon Corporation, et al.. 766 F.Supp. 177 (S.D.N.Y.
1991). Each of these four elements is satisfied with respect to
Velsicol.
(i) Hazardous Substances
(aa) Hazardous Substances
Velsicol manufactured an herbicide known as Banvel at its plant
in Chattanooga, Tennessee. In an October 9, 1984, response to a
Section 104(e) information request, Velsicol provided an
analytical description for the Banvel waste. (Ex. 31). In a
letter to Tennessee authorities in 1974, Velsicol identified the
active ingredient in BANVEL as 3,6 dichloro-O-anieic acid.
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(Ex. 29). That compound is also referred to as dicamba and is a
listed hazardous substance under CERCLA.
At its Chattanooga plant, Velsicol also generated a waste
generally referred to as benzonitrile residue. This waste
consisted of still bottoms from a benzene distillation unit. In
letters to Georgia authorities in 1974 and 1977 regarding another
Site, Velsicol provided an analytical description for the
benzonitrile residue. (Ex. 30, 94). In the October 9, 1984,
Section 104(e) response, Velsicol provided an analytical
description of the benzonitrile waste consistent with the one
above. (Ex. 31). Benzonitrile is a listed hazardous substance
under CERCLA.
(bb) Disposal of Velsicol Waste at Site
The Mathis brothers transported the Banvel and benzonitrile
wastes from Velsicol's Chattanooga plant to the Site for disposal
from August 1973 until January 1974. In the October 9, 1984,
Section 104(e) response, Velsicol indicated that it' had disposed
of 5,268 55-galIon metal drums of benzonitrile residue at Mathis
brothers disposal facilities in Walker County. In that response,
Velsicol indicated that it disposed of 3,073 41-gallon fiber
drums of dicamba wastes at those disposal facilities. (Ex. 31).
Disposal facilities operated by the Mathis brothers included the
Site, the Chickamauga Road Landfill, and a nearby facility known
as the South Marble Top Road Landfill, a current NPL Site. They
owned and operated those other sites, and transported waste from
VelBicol, GAF and ALC to these sites for disposal. After ceasing
operations at the Shaver's I area, the Mathis brothers received a
permit to operate the Sbuth Marble Top site in April 1974.
(Ex. 84). The Mathis brothers are currently suing Velsicol in
regard to that Site. In 1974, after ceasing operations at the
Site, the Mathis brothers also operated the Chickamauga Road
Landfill.
Velsicol never clearly admitted that its wastes were disposed of
at the Site. In a Section 104(e) response, Velsicol stated that
the Mathis brothers disposed of Velsicol waste beginning in
November 1973. (Ex. 96). In another Section 104(e) response,
Velsicol only admitted' that the Mathis brothers removed the
wastes from the Chattanooga plant for disposal. (Ex. 43).
Accounting documents provided by Velsicol in another Section
104(e) response confirm this. (Ex. 95). Statements made by the
Mathis brothers to EPA personnel confirm that in late 1973 and
early 1974, the Velsicol wastes went to the Site, as opposed to
the other disposal areas. (Ex. 63). In a deposition for the
private South Marble Top Road lawsuit, Sidney Mathis stated that
the Mathis brothers took Velsicol waste to Shaver's Farm. (Ex.
98, p. 96, 116). This admission by Velsicol and these statements
by the Mathis brothers are the primary evidence establishing that
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the Ve'lsicol waste went to this Site, as opposed to the other
disposal sites operated by the Mathis brothers.
(ii) Presence of Velsicol Hazardous
Substances at the Site
As described above, numerous sampling results confirm the
presence of Velsicol's hazardous substances (dicamba and
benzonitrile) at the Site. These included results of sampling
taken prior to EPA assuming control of the removal (Ex. 6, 108),
as well as results of sampling taken after EPA assumed control of
the removal. (Ex. 8, 114, 115).
(iii) Release of Hazardous Substances
As described earlier in this referral, there was a release or
threatened release of hazardous substances at the Site,
satisfying this element of liability.
(iv) Which Causes the Incurrence of Response Costs
As described earlier in this referral, the release or threatened
release of hazardous substances caused EPA to incur response
costs, satisfying this element of liability. EPA's action
memorandum explains the causal link between the release or
threatened release and the incurrence of response costs.
(Ex. 21).
b. Corporate History
This information indicated that Velsicol was a Delaware
corporation in 1973. In 1976, Velsicol merged with Michigan
Chemical Corporation, which was also a Delaware corporation.
Michigan Chemical Corporation was the surviving corporation, and
changed its nam& to Velsicol Chemical Corporation. (Ex. 100).
Velsicol is still organized under the laws of the State of
Delaware. (Ex. 99).
For much of the course of this project, Velsicol's technical
representative on this Site has been Memphis Environmental Center
("MEC"). MEC is a corporate affiliate of Velsicol and performs
consulting work for both Velsicol and other companies.
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c. Contacts and Addressee
Velsicol is currently represented in this matter by:
Les Oakes
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Phone: (404) 572-3314
Fax: (404) 572-5141
d. Financial Viability
According to a Dun & Bradstreet report obtained by EPA, Velsicol
had assets of over $50,000,000. (Ex. 49). Based on these
figures, it would appear that Velsicol is financially able to
reimburse EPA for the past costs at this Site.
To date, Velsicol has not raised inability to pay as an issue.
e. Defenses
(i) Statutory Defenses
Velsicol has not asserted any of the statutory defenses contained
in Section 107(b) of CERCLA, 42 U.S.C. § 9607(b). EPA is not
aware that any of those defenses are available to Velsicol.
(ii) Inconsistency with the NCP
The only issue in the nature of a defense which Velsicol has
raised pertains to whether EPA's costs were incurred in a manner
not inconsistent with the NCP. Generally, Velsicol argues that
EPA spent too much money on the containment vaults, which is only
a temporary measure prior to final disposition of the
contaminated materials. Because the containment vaults are much
more sophisticated than the usual method in which wastes are
"staged" pending final disposition, Velsicol hopes to incorporate
those containment vaults into a permanent remedy, hopefully at a
much lower cost than any other potential remedy which EPA may
eventually select for the Site.
This "inconsistency" argument actually translates into an
argument that EPA's costs were not reasonable. However, to be
recoverable in a cost recovery action, EPA's costs need not be
"reasonable". Under Section 107(a)(4)(A) of CERCLA, EPA may
recover "all costs of removal or remedial action . . . not
inconsistent with the national contingency plan." Costs which
are not inconsistent with the national contingency plan are
presumed to be reasonable. The defendant has the burden of
proving that costs were incurred in a manner inconsistent with
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the NCP. U.S. v. Northeastern Pharmaceutical & Chemical Co.,
Inc.. 810 P.2d 726 (8th Cir. 1986). In any judicial review of
EPA's response actions, Section 113(j)(2) of CERCLA, 42 U.S.C. §
9613(j)(2), mandates that EPA's selection shall be upheld unless
it is arbitrary and capricious or otherwise not in accordance
with law.
To date, Velsicol has yet to identify any costs incurred in
manner inconsistent with the NCP. Specific criticisms by
Velsicol of EPA's response activities are contained in Velsicol's
comments on the administrative record and in negotiation
correspondence (Ex. 23, 97). To the extent these criticisms
allege inconsistency, or tha:t EPA's response action was arbitrary
and capricious, they are without merit.
For example, Velsicol alleges in its comments that EPA designed
the containment cells because of a concern over, but that little
or no dioxin was found at the Site. Therefore, Velsicol alleges,
EPA's design and construction of the cells was arbitrary and
capricious and EPA can not recover any costs incurred as a result
of designing for dioxin. However, EPA designed and built the
sophisticated cells because of the vast amount of material being
excavated. This volume, in conjunction with the great
anticipated cost of arranging for final disposition, justified
the storage of the material in such cells until such time and
permanent disposition could be arranged.
(iii) Divisibility of Harm
In settlement negotiations, Velsicol has argued that certain of
EPA's response costs were incurred solely because of the latex
wastes, that the harm is therefore divisible and that Velsicol is
therefore not responsible for those costs. In particular,
Velsicol has argued that the size of the containment cells was
increased by the presence of the latex wastes, and that some
fraction of the costs of designing and constructing the cells is
therefore attributable to the latex wastes.
Liability under CERCLA is joint and several. U.S. v. R.W. Meyer,
Inc.. 889 P.2d i497 (6th Cir. 1989), fR.W. Meyer"l. To the
extent that damages may be apportioned among multiple defendants,
courts have typically held that a contribution action is the
appropriate forum for such a determination. R.W. Mever. supra.
However, in at least one recent case, a court has held that a
generator PRP is entitled to a determination on the issue of
divisibility prior to judgment being entered in favor of the
United States. U.S. v. Alcan Aluminum Corp.. 964 F. 2d 252
(3rd Cir. 1992), I"Alcan"). That court held that if the harm at
the Site is capable of reasonable apportionment, then a defendant
should be held liable only for costs relating to the portion of
the harm to which it contributed. Alcan. at 271. This decision
in effect moves the divisibility determination to the initial
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liability phase of a cost recovery action rather than a later
contribution phase or a separate contribution action.
Under CERCLA, the defendants have the burden of proving the
divisibility of harm and therefore damages. O'Neil v. Picillo.
683 P.2d 176 (1st Cir. 1989). As part of establishing
divisibility, the defendants must offer a reasonable basis for
the apportioning of harm. Kramer. 757 P. Supp. 397. The Alcan
court did not shift this burden, continuing to place the burden
of proof on the defendant rather than the plaintiff. Alcan, at
271. In making this determination, the Alcan court noted that
the analysis will require an assessment of the relative toxicity,
migratory potential, and synergistic capacity of the hazardous
waste at issue. Alcan. at 269.
As described above, EPA did place latex wastes into the
containment cells. However, it is impossible to determine the
amount of latex waste put into the cells, or the fraction of
total cell volume attributable to the latex waste. The latex
waste, as well as the Velsicol wastes, were generally commingled
at the Site, and it was impossible to excavate the Velsicol
wastes and contaminated soil without also, excavating the latex
wastes. Moreover, the. overwhelming fraction of the material
placed into the cells was contaminated soil, not bulk latex
waste. For these reasons, EPA does not believe that costs can
reasonably be apportioned based on proportional volume as
suggested by Velsicol.
On a toxicity basis, apportionment would probably result in most
or all costs being apportioned to Velsicol. As set forth in
EPA's final action memorandum, EPA incurred.response costs at the
Site because of hazardous substances in Velsicol's wastes. If
Velcisol wastes had not been present at the Site, EPA would not
have conducted a removal. In addition, a great deal, although
not all, of the GAF waste sent to the Site was solid latex, much
of which EPA EPA left in the ground. Therefore, it iB doubtful
whether Velsicol can establish divisibility on a toxicity basis.
Velsicol may attempt to rely on the language of the AOC to
support its claim that it is not liable for costs incurred
because of the latex wastes. Paragraph 8 of the modification to
the AOC states:
8. EPA shall assume responsibility for the
transportation and disposal of all drums, related
wastes, and contaminated soils which are not the
responsibility of the Respondent pursuant to Sections
4, 5, 6, and 7 of this Modification. EPA agrees not to
seek cost recovery from Respondent for the removal,
transportation, and disposal of wastes which are not
attributable to Respondent.
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As described above, the Velsicol wastes and the latex wastes were
generally commmingled at the Site. This provision of the AOC
therefore has little application. Arguably, this provision would
apply to the drums of latex which were found and stored
separately at the Site, and the bulk latex which was uncovered,
found to be uncbntaminated, and placed back into the ground. EPA
will make a final determination as to whether Velsicol is
responsible for the drummed latex waste only after performing
additional sampling to .confirm that the drummed latex waste is
not contaminated with dieamba or benzotrile. If and until such
sampling is performed, even the drummed waste is the
responsibility of Velsicol. In addition, the AOC is arguably is
no longer operative due to Velsicol's violations, and Velsicol
should not receive any benefit of the AOC.
2. Eretta Shaver
a. Description
Mrs. Shaver owned the Site during the time that EPA incurred most
of its response costs and is the current owner of the Site. She
is therefore potentially liable under Sections 107(a)(1) of
CERCLA, 42 U.S.C. § 9607(a)(1).
Nancy Shaver Nation, the daughter of Mrs. Shaver, had owned the
property since 1944. (Ex. 81). At that time, her parents, Harold
and Eretta Shaver, purportedly purchased the property and put it
in her name. On March 17, 1988, Nancy Shaver Nation sold the
property to William F. Morrisette and Shelva Jean Morrisette. As
a result of the Site contamination, the Morrisettes sued Nancy
Shaver Nation for rescission of the sale. The parties entered
into a consent judgment in which Eretta Shaver and her husband,
Harold Shaver, took title to the property on November 13, 1989.
(Ex. 1). Harold Shaver died on November 3, 1990.
To date, Mrs. Shaver has been cooperative, entering into an
access agreement with EPA in 1990. On May 21, 1992, EPA sent a
Section 104(e) information request to Eretta Shaver. (Ex. 42).
She responded on July 8, 1992 and on September 2, 1992.
(Ex. 43, 44).
b. Contact and Address
Mrs. Shaver is elderly and infirm. Her affairs are managed by
her daughter, Vivian A. Compton. Mrs. Shaver can currently be
contacted through Ms. Compton at:
Ms. Vivian A. Compton
Rt. 4 Box 80
Shaver Road
Chickamauga, Georgia 30707
(404) 375-4706
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Eretta Shaver is currently represented in this matter by:
Brian Humphrey, Esq.
Miller & Martin
1000 Volunteer Building
832 Georgia Avenue
Chattanooga, Tennessee 37402
(615) 756-6600
c. Financial Viability
Based on her Section 104(e) response, Mrs. Shaver's annual income
has averaged $47,800 over the past five years. The Section
104(e) response also indicates that Mrs. Shaver owns assets worth
approximately $454,000. Of this amount, approximately $201,000
is in cash, certificates of deposits, and money market funds.
This total also includes real estate appraised at $135,000.
d. Defenses
Eretta Shaver certainly knew of the contamination at the Site
when she and Mr. Shaver acquired the Site in 1987. Therefore,
she would not qualify for the "innocent landowner" defense,
pursuant to Section 107(b)(3) and Section 101(35) of CERCLA,
42 U.S.Cr § 9607(b)(3) and 9601(35). However, based on her lack
of involvement at the Site, she may be able to establish a
"third-party" defense solely under Section 107(b)(3) of CERCLA,
42 U.S.C. § 9607(b)(3).
Under Section 107(b)(3). of CERCLA, 42 U.S.C. § 9607(b)(3), a PRP
is not liable for response costs if the PRP can establish that:
(1) the release was solely caused by the acts or omissions of
a third party;
(2) the third party was not an employee or agent of the PRP;
(3) the acts of omissions of the third party did not occur in
connection with a contractual relationship existing
directly or indirectly with the PRP;
(4) the PRP exercised due care with respect to the hazardous
substances, and.took precautions against the acts or
omissions of the third party and consequences resulting
from those acts or omissions.
Eretta Shaver had no involvement in the waste disposal activities
which her husband arranged for on the property. In her Section
104(e) response, Mrs. Shaver stated that her husband handled the
waste disposal matters himself and did not discuss those matters
with her. (Ex. 43, 44). Therefore, she may be able to establish
that the release was caused solely by a third party. There is
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also no evidence that her husband was her employee or agent.
Moreover, the waste disposal operations ceased long before she
took title to the property, she apparently did nothing to
aggravate the contamination at the Site, the U.S. had already
begun its response activities when she took title to the
property, and she was cooperative in granting access to the U.S.
In light of these circumstances, she may be able to establish
that she exercised the due care and took the precautions required
to establish the defense.
Section 101(35) defines contractual relationship to include deeds
or other instruments transferring title or possession. As Eretta
and Harold Shaver voluntarily took title to the property as part
of the settlement of the rescission suit, that transfer of title
arguably constitutes a contractual relationship. However,
assuming this to be true, Section 107(b)(3) states that only
those contractual relationships of the PRP existing in connection
with the acts or omissions of a third party which caused the
release will defeat the defense (emphasis added).
At least one recent decision has addressed the "in connection
with" language. Westwood Pharmaceuticals Inc. v. National Fuel
Gas Corp., 964 F.2d 85, (2nd Cir. 1992) ("Westwood"\. In
Westwood. the Court interpreted the "in connection with" language
to mean that only those contractual relationships bearing a
relationship between the disposal or release activities and the
defendant seeking to raise the defense will preclude use of the
defense. In Westwood. the court found thiat a deed transferring
title was a contractual relationship. The Westwood court held
that a party seeking the defense was entitled to attempt to show
that the deed was not a contractual relationship in connection
with the disposal activities, and that the existence of the
contractual relationship by itself did not entitle the plaintiff
to summary judgment on the availability of the defense.
In Westwood. the defense was sought by the transferor of the
property. Therefore, that factual situation is different from
this case. In addition, no final liability decision has been
issued in Westwood, so it remains to be seen what impact that
decision will have. That decision appears to be inconsistent
with EPA's position that taking title with knowledge of
contamination precludes use of the defense. However, as the only
contractual relationship at issue in this case is the transfer of
title to Mrs. Shaver, a court could apply the same analysis as
the Westwood court and find that the acts or omissions which
caused the contamination were not performed in connection with a
contractual relationship with Eretta Shaver, and that the defense
is therefore available to her.
In light of the potential defense available to Mrs. Shaver, her
apparent lack of culpability for conditions at the Site, the
relatively small amount of consideration her husband.received
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from the Mathis brothers, and her relatively limited financial
resources, Region IV does not recommend pursuing her for past
costs.
3. Nancy Shaver Nation
a. Description
Nancy Shaver Nation owned the Site at the time of disposal of
hazardous substances. She is therefore potentially liable under
Section 107(a)(2) of CERCLA.
Ms. Nation is the daughter of Harold and Eretta Shaver. They
purchased the property in her name in 1944. (Ex. 81). She owned
the property until March 17, 1988, at which time she sold it to
William F. Morrisette and Shelva Jean Morrisette. After the
Morrisettes learned of the contamination on the property, they
sued Nancy Shaver Nation for rescission of the sale. As part of
the settlement of the matter, Eretta Shaver and Harold Shaver
took title to the Site on November 13, 1989. (Ex. 1).
On May 21, 1992, EPA sent a Section 104(e) Information Request to
Ms. Nation. (Ex. 40). She responded on June 11, 1992. (Ex. 41).
In that response, Ms. Nation asserted that she never had any
involvement with the Site.
b. Address and Contact
Ms. Nation can be contacted at:
Nancy Shaver Nation
33487 Perkins Road
Denham Springs, LA 70724
c. Financial Viability
Based on her June 11, 1992, response to the Section 104(e)
Information Request, Ms. Nation is not financially viable as a
defendant. (Ex. 41). Because she is not a financially viable
defendants, Region IV does not recommend pursuing her for past
costs.
d. Defenses
Ms. Nation has no statutory defenses available to her. Because
she acquired title to the property prior to the disposal of
hazardous substances, she does not qualify for the "innocent
purchaser" defense under Sections 107(b)(3) and 101(35) of
CERCLA, 42 U.S.C. §§ 9607(b)(3) and 9601(35).
In addition, it is unlikely that she can establish a "third-
party" defense solely under Section 107(b)(3) of CERCLA,
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42 U.S.C. 59607(b)(3). The elements of the third-party defense
are discussed in the section of this referral pertaining to Mrs.
Shaver. In light of the fact that Ms. Nation owned the property
as an adult at the time the disposal occurred, it is doubtful
whether she can establish that she took the requisite precautions
and exercised the requisite due care to establish the defense.
Further discovery would be necessary to ascertain the extent of
knowledge and involvement which Ms. tiation had with regard to the
Site.
4. Mose & Sidney Mathis
a. Description
The Mathis brothers transported hazardous substances from
Velsicol, GAF and ALC to the Site. The Mathis brothers also
operated the Site, arranging for the actual waste burial
activities at the Site. They are therefore potentially liable
under Sections 107(a)(1) and 107(a)(4), 42 U.S.C. §§ 9607(a)(1)
and 9607(a)(4).
The Mathis brothers had selected this area for the disposal of
those wastes, having entered into an agreement with Mr. Shaver.
Under this agreement, the Mathis brothers paid Mr. Shaver $150
per month to dispose on the property between 1972 and 1974.
(Ex. 63).
b. Addresses and Contacts
The Mathis brothers may be contacted at:
Mose Mathis Sidney Mathis
Route 3, Box 15 Route 4, Box 495
Chickamauga, 6a. 30707 Chickamauga, 6a. 30707
In their suit against Velsicol over the South Marble Top Road
Site, the Mathis brothers are currently represented by:
Charles Wright, Esq.
253 E. 11th Street
Chattanooga, Tennessee 37402
(615) 266-7074
For purposes of gathering information from the Mathis brothers,
Region IV had recently worked through Mr. Wright. Mr. Wright has
recently informed the Region, however, that he will no longer be
representing the Mathis brothers for any matter other than the
South Marble Top Road suit.
Region IV issued cost recovery demand letters to the Mathis
brothers on July 17, 1992. (Ex. 71, 72). They replied
individually on August 6, 1992. (Ex. 73, 74). In those replies,
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both individuals denied liability. On March 17, 1993, EPA issued
updated cost recovery demand letters to the Mathis brothers
(Ex. 75, 76).
c. Financial Viability
On June 19, 1992, Region IV sent separate Section 104(e)
Information Requests seeking financial information to Hose and
Sidney Mathis. (Ex. 45, 46). By letter dated July 11, 1992,
Sidney Mathis replied (Ex. 47). His reply, however, amounted
only to a denial of liability and provided no financial
information. Mose Mathis has not replied to the Information
Request.
EPA investigators have determined that the Mathis brothers own
three parcels of real property with a total value of $131,469.
(Ex. 107). These properties include their private residences and
the South Marble Top Road Landfill. In addition, it should also
be noted that the property owned by Sidney Mathis is the location
of an industrial waste dump. Therefore, the estimated value of
those properties probably overstates their actual potential for
generating funds available to EPA for reimbursment. Although
this.suggests an inability to pay past costs, EPA has yet to
receive complete financial documentation. Until such information
is obtained, EPA recommends pursuing the Mathis brothers in this
action.
d. Defenses
The Mathis brothers have no known defenses available to them.
5. GAF. Inc.
a. Description
GAF arranged for the disposal of hazardous substances at the
Site. GAF is therefore potentially liable as a "generator" under
Section 107(a)(3) of CERCLA, 42 U.S.C. S 9607(a)(3).
Courts have held that in order to hold a defendant liable under
Section 107(a)(3) of CERCIiA, a plaintiff must establish that the
defendant:
(1) disposed of its hazardous substances;
(2) at a facility which now contains hazardous substances of
the sort disposed of by the generator; [and]
(3) that there is a release or threatened release of that or
some other type of hazardous substance;
(4) which causes the incurrence of response costs.
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New York v. Exxon Corporation, et al.. 766 F.Supp. 177 (S.D.N.Y.
1991). Each of these elements is satisfied with respect to GAF.
(i) Disposal of GAF Hazardous Substances
(aa) Hazardous Substances
GAF manufactured latex at its plant at 2120 Polymer Drive in
Chattanooga, Tennessee for use in the local carpet industry. As
part of the manufacturing process, GAF generated various latex
wastes. Documents submitted by GAF as part of its Section 104(e)
responses indicate that the Mathis brothers disposed of at least
800 tons of GAF wastes and variously describe the latex as solid
or solid and/or liquid. (Ex. 36, 37). In their statements to EPA
personnel, the Mathis brothers indicated that the latex wastes
included liquids, sludges, and solids. (Ex. 63). GAF identified
the waste as styrene-butadiene copolymer latex. (Ex. 35).
The GAF Section 104(e) responses do not provide any detailed
chemical analysis of the GAF latex waste and do not therefore
definitively identify any hazardous substances attributable to
that waste. "Latex" is not itself a hazardous substance under
40 C.F.R. § 302.4. However, documents included in GAF's Section
104(e) responses do indicate that the latex contains hazardous
substances.
In its Section 104(e) responses, GAF included a waste survey it
prepared in 1979. (Ex. 37). This survey covered wastes produced
at the Chattanooga Plant and the disposal sites which GAF used
for that waste. The survey identifies the "Mathis Landfill" as a
disposal site for GAF waste. In the portion of the survey
pertaining to the Mathis Landfill, GAF describes its waste as
consisting "... entirely of coagulated latex polymer from latex
manufacturing and latex compounding. As indicated, traces of
fillers, plasticizers, etc. may be present." The survey states
that the latex waste contains various metals, including the
hazardous substances antimony, arsenic, cadmium, copper,
chromium, selenium and zinc. The survey also indicates that the
latex waste contains certain classes of organic compounds, but
does not specifically identify any of those compounds.
Therefore, although the concentrations of these hazardous
substances are not defined, these Section 104(e) responses
indicate that the latex wastes contain hazardous substances.
In an attempt to better characterize the latex wastes at the
Site, Region IV sampled five drums at the drum storage area at
the Site. This sampling occurred on August 11, 1992. Each
sampled drum contained a milky liquid, consistent with previous
descriptions by the Mathis brothers of liquid latex wastes. The
results of this sampling are included as Exhibit 61 to this
referral. These hazardous substances include zinc, antimony and
chromium, all of which GAF identified as components of its latex.
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It is impossible to definitively attribute the wastes in the
drums sampled by EPA to GAF. However, the material in the drums
appears substantially different from the wastes attributable to
Velsicol, and are consistent with the descriptions of the latex
waste provided by the Mathis brothers. This, combined with the
MathiB brothers' statement that only Velsicol/ GAF and ALC waste
went to the Site, create a strong inference that these wastes,
and the hazardous substances contained therein, are attributable
to GAF and/or ALC.
Because Hydrin asserts that its wastes were rinsewaters,
(Ex. 39), any solid latex waste can be attributed to GAF*
However, both ALC and GAF wastes included liquid. Therefore, it
1b impossible to definitively attribute any liquid latex wastes
to GAF rather than ALC.
These results indicate that the latex waste contains hazardous
substances, albeit in very low quantities. In should also be
noted that the sampling results are not necessarily consistent
with each other, as they each identify different hazardous
substances attributable to the latex waste.
(bb) Disposal of GAF Hazardous Substances
at the Site
In responses to Section 104(e) information requests, GAF admitted
employing the Mathis brothers to transport latex wastes for
disposal (Ex. 33, 34, 35). The GAF documents do not admit that
GAF waste was disposed of at the Site. However, in statements
which the Mathis brothers made to EPA personnel, the Mathis
brothers indicated that they disposed of solid and liquid GAF
latex wastes at the Site, rather than some other disposal
facility, in 1973 and 1974. (Ex. 63). In addition, in its
comments on the administrative record, Velsicol has presented to
EPA documents which Velsicol contends it found at the Site.
(Ex. 23). These documents are on GAF letterhead and confirm that
at least some GAF materials were found at the Site, making it
even more likely that GAF latex waste went to the Site.
(ii) Presence at Site of GAF Hazardous Substances
at the Site
The GAF Section 104(e) responses identify hazardous substances in
the GAF latex waste. (Ex. 37). As explained above, sampling
results indicate that the drummed latex waste at the Site
contained some of the same hazardous substances as identified by
GAF. (Ex. 61). Other sampling of soil and surface water
performed by EPA at the Site also indicate the presence of the
same type of hazardous substances identified by GAF. These other
sampling results are included with this referral. (Ex. 113).
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(iii) Release of Hazardous Substances
As described earlier in this referral, there was a release or
threatened release of hazardous substances at the Site,
satisfying this element of liability.
(iv) Which Causes the Incurrence of Response Costa
As described earlier in this referral, the release or threatened
release of hazardous substances caused EPA to incur response
costs, satisfying this element of liability. EPA'a action
memorandum explains the causal link between the release or
threatened release and the incurrence of response costs.
(Ex. 21).
Admittedly, had Velsicol wastes not been present at the Site, EPA
would not have required a removal at the Site and would not have
incurred response costs at the Site. However, the Exxon court
held that a plaintiff need not prove that a particular
defendant's waste caused the incurrence of response costs in
order to establish that defendant's liability under Section
107(a). Specifically, the court stated:
The plain statutory language does not require a CERCLA
plaintiff to establish that a particular defendant's waste
caused the plaintiff to incur response costs. The statute
requires only that there be "a" release of "a" hazardous
substance. 42 U.S.C. §9607(a). It does not even require
that there be a release of the defendant's waste. Thus, it
is sufficient for the [plaintiff] to establish that there
was a release of any hazardous substance at [the facility],
causing the [plaintiff] to incur response costs.
Exxon, at 37. Citing approvingly to Exxon. the wlcan court noted
that the "... Government must simply prove that the defendant's
hazardous substances were deposited at the site from which there
was a release and that the release caused the incurrence of
response costs." Alcan. at 266. EPA incurred response costs as a
result of the release or threatened release of other hazardous
substances at the Site. Consistent with Exxon and Alcan, these
conditions establish GAF's liability under Section 107(a).
EPA responded at the Site because of the Velsicol hazardous
substances. However, the presence of the latex wastes, with the
hazardous subptances contained therein, did contribute to an
increase in EPA's costs. EPA placed latex waste in the
containment cells when that latex waste appeared to be
contaminated with Velsicol wastes above clean-up levels. The
presence of the latex wastes in the containment cells increased,
by some unknown amount, the size and therefore the cost of the
containment cells. Therefore, the latex wastes did, to some
degree, cause EPA to incur response costs.
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The Exxon and Alcan cases involved liability at facilities to
which many generators sent waBte and contributed to the "soup" of
hazardous substances present. In recognition of the virtual
impossibility of linking any specific generator with specific
hazardous substances at a multi-generator, multi-hazardous
substance site, the Exxon court and other courts have adopted the
standard set forth in Exxon. Other courts, however, have adopted
a more stringent standard of liability and have held that a
defendant's waste must contain some threshhold amount of
hazardous substances, for example, in excess of some promulgated
standard, in order to cause the incurrence of response costs and
in order for that defendant to be liable as a generator. Amoco
v. Borden. 889 F. 2d 664 (5th Cir. 1969), I"Amoco"\: Louisiana-
Pacific Corp. v. Asarco. 735 P. Supp. 358 (ff.D. Hash. 1990),
("Asarco").
The Amoco case did not involve multiple generators, and the
"soup" problems inherent in such cases were not of concern there.
Moreover, the Amoco court explicitly recognized the unique
problems arising in the multiple-generator cases. The Exxon
court noted the distinction and noted that the Amoco reasoning
might merit more consideration if only a single generator were
involved. As the Exxon case involved multiple generators, the
Exxon court declined to follow the more stringent liability test.
As described in Exxon. Asarco was a multiple-generator case in
whidh the court apparently overlooked distinction between single-
and multi-generator sites noted iri the Amoco line of cases. The
Alcan court respectfully disgreed with Asarco.
This case involves only three generators, one of which (Velsicol)
contributed hazardous substances uniquely different from the
other two generators. Under these conditions, a court could
airgiiably find that the Amoco/Asarco rulings are controlling,
rather than the Exxon line of cases.
b. Corporate History
According to a Dun & Bradstreet Report, GAF was purchased,
effective March 29, 1989, in a management buyout effectuated
through a purchasing corporation, "Newco Holdings, Inc."
(Ex. 50). EPA was unable to obtain corporate information prior
to that date. After the transaction, Newco Holdings Inc.,
changed its name to GAF Corporation. (Ex. 102). The structure
and detail of this transaction are unclear. The predecessor GAF
corporation was liquidated, and its assets and liabilities
distributed to its subdivisions. (Ex. 50). GAF is currently
incorporated in the State of Delaware. (Ex. 101).
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c. Contacts and Addresses
EPA'a most recent contact with GAF on this matter has been:
Leonard P. PaBCulli
Senior Counsel
GAF Corporation
1361 Alps Road
Wayne, New Jersey 07470-3687
(201) 628-3546
EPA issued a cost recovery demand letter to GAF on February 23,
1993. (Ex. 77). Prior to that date, EPA had issued numerous
Section 104(e) Information Requests to GAF, both prior to and
after EPA's response actions. In a Section 104(e) Information
Request dated August 14, 1984, EPA notified GAF of its potential
liability at the Site. (Ex. 32).
d. Financial Viability
EPA obtained a Dun & Bradstreet report which indicates that GAF
had total assets of $1,829,225,000 as of December 31, 1989.
(Ex. 50 ). The report also indicates that GAF had sales of
$771,647,000 in 1989. EPA therefore anticipates that GAF is
financially able to particpate in the reimbursement of EPA's
costs.
e. Defenses
(i) Statutory Defenses
EPA is not aware that GAF can establish any of the statutory
defenses available in Section 107(b) of CERCLA, 42 U.S.C.
§9607(b).
(ii) Divisibility
Based on the Alcan decision, GAF may attempt to argue that EPA's
removal focused solely on the hazardous substances generated by
Velsicol and that GAF hazardous substances therefore caused only
a portion of the response costs incurred by EPA. As discussed in
the Velsicol section of this referral, there is little or no
basis to apportion the harm on a volumetric basis. On a toxicity
basis, however, GAF may be able to argue successfully that the
costs at the Site are attributable to the Velsicol wastes.
(iii) Third-Party
The Exxon court stated that an attempt to impose a causation
requirement for cost recovery liability should more appropriately
be treated a6 an attempt to establish an affirmative defense
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under Section 107(b) of CERCLA, 42 U*S.C. §9607(b). These
defenses incorporate the concept of causation. In particular,
such an argument would be an attempt to establish a "third-party"
defense under Section 107(b)(3). At this Site, GAF would be
arguing that the only released substances that caused the
incurrence of response costs were hazardous substances generated
by a third party, i.e., Velsicol. In Exxon, the court assessed
whether the defendant could establish a Section 107(b)(3) "third-
party" defense to show that the response costs were caused only
by other generators.
Section 107(b)(3) of CERCLA, 42 U.S.C. § 9607(b)(3), provides
that there shall be no cost recovery liability for a person who
can establish by a preponderance of the evidence that the release
or threat of release and damages resulting therefrom were caused
solely by
an act or omission of a third party other than an
employee or agent of the defendant, or than one whose
act or omission occurs in connection with a contractual
relationship, existing directly or indirectly, with the
defendant (except where the sole contractual
relationship arises from a published tariff and
acceptance for carriage by a common carrier by rail), if
the defendant establishes by the preponderance of the
evidence that (a) he exercised due care with respect to
the hazardous substance concerned, taking into
consideration the characteristics of such hazardous
substance, in light of all relevant facts and
circumstances, and (b) he took precautions against
foreseeable acts or omissions of any such third party
and the consequences that could foreseeably result from
such acts or omissions.
In Exxon, the defendant claiming the third-party defense was a
generator whose substances were disposed at the Site. That
generator had a contractual arrangement with the hauler which
transported the wastes to the Site and which was also a PRP. The
Court held that the existence of that contractual arrangement was
sufficient to preclude that defendant from successfully asserting
the third-party defense.
At Shaver's Farm, GAF had an arrangement for the Mathis brothers
for the disposal of GAF's latex wastes. The Mathis brothers are
also PRPs at the Site, because they operated the Site and
transported the Velsicol, GAF and ALC wastes to the Site.
Therefore, as held in a similar situation in the Exxon case, GAF
can not establish that the release or damages were caused solely
by a third party other than one whose act occurred in connection
with a contractual relationship with the defendant.
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To establish the third-party defense, the defendant must also
establish by a preponderance of the evidence that it took due
care with respect to the hazardous substances and that it took
precautions against foreseeable acts or omissions of third
parties. As GAF arranged with the Hathis brothers for the
disposal of the latex wastes, it is unlikely that GAF can
establish that it took the appropriate precautions.
6. Mvdrin. Inc.
a. Description
ALC arranged for the disposal of hazardous substances at the
Site. Mydrin, Inc., ("Mydrin") is the successor in interest to
ALC and is therefore potentially liable as a "generator" under
Section 107(a)(3) of CERCLA, 42 U.S.C. § 9607(a)(3).
Courts have held that in order to hold a defendant liable under
Section 107(a)(3) of CERCLA, a plaintiff must establish that the
defendant:
(1) disposed of its hazardous substances;
(2) at a facility which now contains hazardous substances of
the sort disposed of by the generator; [and]
(3) that there is a release or threatened release of that or
some other type of hazardous substance;
(4) which causes the incurrence of response costs.
Mew York v. Exxon Corporation, et al.. 766 F. Supp. 177
(S.D.N.Y 1991). Each of these elements is satisfied with respect
to Mydrin.
(i) Disposal of ALC Hazardous Substances
(aa) Hazardous Substances
Mydrin is the successor to the American Latex Corporation, Inc.
("ALC"). ALC generated wastewaters at its plant at
129 Nance Road in Calhoun, Georgia. At this facility, ALC used a
batch process to produce latex products and adheBives. (Ex. 87).
In a 104(e) response, Mydrin describes the ALC wastes as being
wastewaters, generated when rinsing product mixing tanks.
(Ex. 39). Both Mydrin and a former ALC officer describe the
wastes as containing latex (natural, neoprene and styrene-
butadiene), calcium carbonate and Kaolin clay, as well as trace
amounts of surfactants, polyacrylate thickeners, methyl-cellulos
and catalysts. (Ex. 39, 87).
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Kydrin provided no detailed analytical description of its waste
of its products. However, in a Section 104(e) response, Mydrin
provided a Material Safety Data Sheet ("USDS") for its current
latex product. (Ex. 38). That MSDS describes the current Mydrin
Product as a "natural latex/butadiene/styrena", and indicates
that the product contains ammonia and zinc, both of which are
CERCLA hazardous Bubstances.
According to statements made by a former ALC officer, the
production process at the facility had,not changed in 20 years.
(Ex. 87). Therefore, there is a high likelihood that the MSDS
sheet provided by Mydrin in its Section 104(e) response
accurately reflects the composition of the ALC wastes from 1972
to 1974. This would establish that the ALC wastes contained, at
a minimum, ammonia and zinc.
(bb) Disposal of ALC Hazardous Substances
at the Site .
As early as 1972, the Mathis brothers were disposing of ALC
wastes at the Site. (Ex. 86). In responses to a Section 104(e)
information request, Mydrin admits that Mose Mathis disposed of
approximately 52,000 pounds of ALC wastewaters; from July 1973 to
August 1974. (Ex. 39). However, in this Section 104(e) response,
Mydrin does not identify the disposal facility (Ex. 38, 39). In
statements which the Mathis brothers made to EPA personnel, the
Mathis brothers indicated that they disposed of the ALC wastes at
the Site, rather than some other facility (Ex. 63).
(ii) Presence of ALC Hazardous Substances
at the Site
Various sampling results indicate the presence at the Site of the
zinc, which was a hazardous substances identified by Mydrin in
its Section 104(e) responses. Those sampling results are
included with this referral. (Ex. 61, 113).
Exhibit 113 is results of leachate from the soil containment
cells. Exhibit 61 iB the result of drum sampling on August 11,
1991. Each sampled drum contained a milky liquid, consistent
with previous descriptions by the Mathis brothers of liquid latex
wastes.
The material in the drums appears substantially different from
the wastes attributable to Velsicol, and are consistent with the
descriptions of the latex waste provided by the Mathis brothers.
This, combined with the Mathis brothers' statement that only
Velsicol, GAF and ALC waste went to the Site, create a strong
inference that these wastes, and the hazardous substances
contained therein, are attributable to GAF and/or ALC. Because
Mydrin asserts that its wastes were rinsewaters, (Ex. 39), any
solid latex waste can be attributed to GAF with a fair degree of
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certainty. However, both ALC and GAF wastes included liquid.
Therefore, it is impossible to definitively attribute any liquid
latex wastes to ALC rather than GAF.
(iii) Release of Hazardous Substances
As described earlier in this referral, there was a release or
threatened release of hazardous substances at the Site,
satisfying this element of liability.
(iv) Which Causes the Incurrence of Response Costs
As described elsewhere in this referral, this element is
satisfied at this Site.
b. Corporate History
ALC, Inc., was a Tennessee corporation at the time of the
disposal of the wastes at the Site. In 1982, ALC, Inc. merged
into ALC Inc. of Georgia, a corporation organized under the laws
of Georgia, with ALC Inc. of Georgia being the surviving
corporation. (Ex. 103, pp. 10 - 15). ALC Inc. of Georgia later
changed its name to AI£, Incorporated. (Ex. 103, pp. 6-9).
Effective August 1, 1990, ALC, Incorporated was merged with
Backings, Inc., another Georgia corporation, with the surviving
corporation renamed Mydrin, Inc. (Ex. 104, pp. 7 - 12). Mydrin,
Inc., is currently organized under the laws of the State of
Georgia. (Ex. 104, p. 1).
c. Contacts and Addresses
EPA's most recent contact with Mydrin, successor to ALC, has
been:
Martin B. WaBser
Phillips, Nizer, Benjamin, Krim & Ballon
31 West 52nd Street
New York, New York 10019-6167
Telephone: (212) 977-9700
Telecopier: (212) 262-5152
EPA issued a cost recovery demand letter to Mydrin on February
23, 1993. (Ex. 78). Prior to that date, Mydrin had received
Section 104(e) Information Requests but had never been notified
of potential liability at the Site.
d. Financial Viability
On November 14, 1991, EPA obtained a Dun & Bradstreet financial
report on Mydrin. (Ex. 51). The report indicates the company has
sales in the $40,000,000 to $50,000,000 range but provides no
other information. Based on this information, it appears that
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Mydrin is financially able to participate in the reimbursement of
EPA's past costs.
e. Defenses
This defendant has no known statutory defenses. Because the
removal at the Site focussed solely on Velsicol's wastes, Mydrin
might raise the same "diviBiblity, and "third-party" defenses as
GAF.
VIII. ENFORCEMENT HISTORY AND CONTACTS WITH POTENTIAL DEFENDANTS
A. Administrative Orders
EPA issued a UAO to Velsicol, Harold and Eretta Shaver and the
Mathis brothers on October 2, 1987. (Ex. 9). Because of
apparently unworkable deadlines in the UAO, and after a meeting
between EPA and Velsicol on October 15, 1987, EPA apparently
agreed to forego enforcement of that UAO and entered into
negotiations with Velsicol for an AOC. (Ex. 52, 53, 54). As a
result of negotiations, EPA and Velsicol signed an AOC which
became effective on March.30, 1988. (Ex. 10). EPA later formally
notified Velsicol that additional work was needed at the Site.
(Ex. 56). In January 1989, EPA and Velsicol began negotiations to
modify the AOC. (Ex. 55). The parties modified the AOC effective
November 8, 1989. (Ex. 11).
After responding to the gaseous release from a drum in early
February, 1990, EPA decided to take the Site back. As described
above, EPA notified Velsicol by letter dated February 14, 1990,
that EPA was taking the Site back from Velsicol. (Ex* 15).
B. Other Contacts and Settlement Efforts
1. Velsicol
EPA approached Velsicol in mid-1991, concerning the actual
treatment or disposal of the wastes in the containment cells. At
that time, the parties discussed modifying the AOC to reflect the
current Site conditions. This modification would have allowed
Velsicol to attempt to implement Velsicol's proposed
bioremediation plan for the Site. Negotiations were unsuccessful
and were quickly dropped.
EPA has issued numerous Section 104(e) information requests to
Velsicol. Velsicol has responded to these requests on the
following dates: October 9, 1984 (Ex. 31); October 6, 1987
(Ex. 95); and January 15, 1991 (Ex. 96).
Region IV issued a cost recovery demand letter to Velsicol on
June 26, 1992. (Ex. 69). EPA issued an updated cost recovery
demand letter on March 17, 1993. (Ex. 70).
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Region IV met with Velsicol on August 4, 1992. In that meeting,
Velsicol indicated that it intended to argue that some fraction
of EPA's costB were incurred becauBe of the presence of the latex
wastes and that Velsicol's settlement offer would exclude such
costs. Additional information has Bince been exchanged by the
parties. For example, EPA has provided Velsicol with a narrative
description of the services provided by EPA's contractors.
(Ex. 93). EPA has also shared the results of its August 1992,
latex sampling with Velsicol. (Ex. 92).
Despite the continued exchange of information, Velsicol has yet
to make a settlement offer to EPA. By letter dated
February 19, 1993, Velsicol presented a list of issues regarding
various aspects of EPA's removal. (Ex. 97). The parties met on
March 17, 1993, to discuss the contents of that letter.
2. GAF
EPA issued Section 104(e) information requests to GAF on
August 14, 1984 and January 15, 1991. (Ex. 32, 34). The first
information request contained notified GAF that it may be a PRP
at the Site. GAF responded to the 104(e) requests on
October 1, 1984, and February 12, 1991. (Ex. 33, 35). EPA
issued cost recovery demand letter to GAF on February 23, 1993.
(Ex. 77). In its initial response, GAF has done nothing except
deny liability and state that it will be in further contact.
3. Mydrin
EPA issued a Section 104(e) information request to Mydrin in
Janaury, 1991. Hydrin responded on January 21, 1991, and
January 22, 1991. (Ex. 38, 39). EPA issued a cost recovery
demand letter to Mydrin on February 23, 1993. (Ex. 78).
In its initial response, Mydrin has indicated that it intends to
provide additional information pertaining to its manufacturing
process.
Until the demand letters were issued, EPA had never notified
Mydrin of potential liability at the Site.
4. Mathis Brothers
EPA issued Section 104(e) information requests to Mose and Sidney
Mathis on June 19, 1992. (Ex. 45, 46). Sidney Mathis replied on
July 11, 1992. (Ex. 47). EPA issued a follow-up Section 104(e)
information request to Sidney Mathis on
July 17, 1992. (Ex. 48).
EPA issued cost recovery demand letters to Mose and Sidney Mathis
on July 17, 1992. (Ex. 71, 72). They responded, denying
liability, on August 6, 1992. (Ex. 73, 74). EPA issued follow-up
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cost recovery demand letters to the Mathis brothers on March 17,
1993. (Ex. 75, 76).
5. Eretta Shaver
EPA issued a Section 104(e) information request to Eretta Shaver
on Hay 21, 1992. (Ex. 42). She responded on July 8, 1992, and
provided a follow-up response on September 2, 1992.
(Ex. 43, 44).
Eretta Shaver granted access to the site for purposes of the
removal, and EPA has filed a CERCLA lien on the property
(Ex. 57).
6. Nancy Shaver Nation
EPA issued a Section 104(e) information request to Nancy Shaver
Nation on May 21, 1992. (Ex. 40). She responded on
June 11, 1992. (Ex. 41).
IX. COST RECOVERY
A. EPA's Past Costs
Based on a set of EPA's normal cost accounting summaries dated
August 8, 1992, EPA's past costs at Shaver's Farm total
$5,567,236.33. These costs break down as follows:
EPA'8 standard cost documentation package is included as Exhibit
58 and Exhibit 106 to thiB referral. By letter dated
November 16, 1992, DOJ requested that EPA include "work
performed" documentation with cost recovery litigation referrals.
In accordance with that request, EPA has included that
documentation with this referral. (Ex. 59).
If even more detail is needed, EPA's contractors generated daily
cost summary forms referred to as "1900-55's". These forms
provide a breakdown of certain contractor time spent and costs
incurred on a daily basis. The contractors began generating
these forms in January, 1990, shortly before EPA took over work
at the Site. EPA has a complete set of these documents at the
1. Cost Totals
Regional Payroll
Headquarters Payroll
Indirect Cost
Regional Travel
Headquarter's Travel
Contracts Total
ATSDR
$135,367.13
26,799.51
293,302.50
14,207.73
8,138.22
5,077,869.40
11.551.84
$5,567,236.33
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Region IV offices. Because of their bulk, these documents have
not been included with this referral.
Region IV filed a CERCLA lien on the Site on May 4, 1990. This
amount claimed on the lien was for "costs in excess of $2,000,000
plus interest and administrative expenses". (Ex. 57).
2. Costs Mot Sought
By this referral, EPA is not seeking recovery of all costs
identified in the cost documentation package. The costs for
which EPA seeks recovery in this referral do not include costs
incurred by EPA for purposes of including the Shaver's Farm
(Shaver's I, II and Chickamauga Road Landfill) on the NPL.
Recovery of those costs would require that other persons who are
PRPs for purposes of the Shaver's II area and the Chickamauga
Road Landfill, but not for the Site, be included in this cost
recovery action. Because the Site is not yet even proposed for
the NPL, and in light of the additional resources needed to
collect these costs, EPA believes that it is more appropriate to
attempt to recover these costs when the Site is included on the
NPL. These costs total approximately $92,969.38. Exhibit 119
identifies the the specific costs excluded. After subtracting
this amount from the total past cost figure identified in the
cost documentation package, the total past costs sought in this
referral are $5,474,266.95.
It should also be noted that EPA's files reference a 1987 removal
at the Chickamauga Road Landfill. In this removal, EPA spent
$39,574.88 to dispose of 40 drums containing lead wastes. These
costs were tabulated separately and are not included in the cost
documentation for this Site. Because Velsicol did not generate
these wastes, EPA is not attempting to recover these drum removal
costs. The costs for thiB removal are arguably unrecoverable as
the three year removal statute of limitation contained in Section
113(g)(2)(A) of CERCLA, 42 U.S.C. § 9613(g)(2)(A), expired in
1990.
3. Contractor Description
The following is a description of the contractor costs which EPA
is seeking to recover through this referral.
1. W80100 Westinghouse Haztech, Inc. $4,393,635.29
Westinghouse-Haztech ("Haztech") was EPA's Emergency Response
Clean-up Services ("ERCS") contractor for this Site. Haztech
provided the personnel and heavy equipment to excavate the buried
drums, remove the contaminated soils, construct the soil
containment cells, and transport the soil to the cells. Haztech
constructed and operated a water treatment system to treat the
rainwater that collected the trenches excavated by Velsicol.
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Haztech also subcontracted to other companies to provide
specialized services, such as surveyors to detail the size of the
storage cells, engineers to develop a line for the cells, and an
aerial isurveying service to photograph the entire site.
2. 0068017456 ICF 3,151.96
ICF provided sample preparation and analysis services
to EPA.
3. 68010135 ICF 1,329.12
4. 0068016864 UBTL 465.30
UBTL provided laboratory analysis of soil, waste and water
samples taken at the Site.
5. 0068017367 Roy F. Weston 282,472.84
6. 0068W0036 Roy F. Weston 45,536.01
Roy F. Heston ("Weston") was EPA's technical assistance team
contractor at this Site. Weston provided contractor oversight,
documentation of Site activities, health and safety plans,
sampling support and cost tracking. Weston conducted geophysical
monitoring which helped identify likely areas of excavation.
Weston compiled the weekly pollution reports on Site activities
which are included as Exhibit 77 to this referral.
7. 0068D90135 Viar 52,082.50
Viar performed laboratory analysis of soil, waste, and water
samples taken at the Site.
8. 0068033482 Roy F. Weston 237,826.75
Roy F. Weston was the Emergency Response Unit {"ERU") contractor
at this Site for EPA'b Emergency Response Team. In its role as
ERU contractor, Weston performed analytical support services at
the Site. These services included operation of the mobil
laboratory which EPA used at the Site.
9. 1R0874NASA AAA Reporting Co. 90.00
This amount was paid to a court reported for the transcription of
interview notes.
10. 9004DX0110 Walker County Clerk 13.00
This amount was paid to file the CERCLA lien on the Site.
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B. Statute of Limitations
On October 4, 1990, EPA concluded the activities authorized by
the April 12, .1990, action memorandum. EPA believes that
additional work is required at the Site, namely for the ultimated
disposition of the wastes interred in the cells. EPA does not
therefore consider this removal complete. However, for purposes
of determining when the statute of limitations (SOL) may expire,
a conservative view requires that the removal be considered
completed, in October 1990 . The three year SOL contained at
Section 113(g)(2)(A) would therefore expire in October 1993.
C. Statutory Interest
EPA issued a cost recovery demand letter to Velsicol on June 26,
1992. In accordance with Section 107 of CERCLA, statutory
interest began to accrue, at least in relation to Velsicol, on
that date. As of January 22, 1993, that interest totals
appoximately $142,410.58. Because EPA issued demand letters to
the other PRPs at a later date, the total interest due from them
is smaller. EPA will update the interest calculations prior to
the filing of the complaint.
Velsicol disputes the accrual of interest. EPA initially
provided an updated cost figure, including interest, to Velsicol
on January 26, 1993. (Ex. 89). Upon receipt of this information,
Velsicol asserted that EPA agreed, in the parties' August 4,
1992, meeting to toll the accrual of interest until such time
that EPA provided an updated demand letter and updated cost
documentation package. (Ex. 88). EPA replied, specifically
denying Velsicol's assertion. (Ex. 90). Velsicol responded,
merely reiterating its position. (91). EPA then issued the
updated cost recovery demand letter. (Ex. 70). In the updated
cost recovery demand letter, EPA. identified the interest that had
accrued since the issuance of the initial cost recovery demand
letter as well as newly incurred costs.
None of the EPA personnel at the August 4, 1992, meeting remember
the issue of pre-judgment interest arising, much less a statement
by EPA personnel that the prejudgment interest would cease to
accrue. None of the EPA personnel at that meeting had the
authority to make such a statement.
X. TREBLE DAMAGES
A. Liability
To establish Velsicol's liability for punitive damages under
Section 107(c)(3) of CERCLA, 42 U.S.C. § 9607(c)(3), EPA must
show that Velsicol failed, without sufficient cause, to provide
response actions required by the AOC, as modified.
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1. Velsicol Failed to Properly Provide Removal Action
EPA assumed control of the removal in February 1990 because
Velsicol committed numerous violations of it approved workplan
(Ex. 79) and created an imminent and substantial endangezment at
the Site. Velsicol's conduct prior to EPA's assuming control of
the removal, and the performance of response actions by EPA
rather than Velsicol, amount to a failure by Velsicol to properly
provide the response actions required by the AOC. In a letter
dated February 14, 1990, Region IV formally notified Velsicol
that EPA was taking the Site back. (Ex. 15). This letter
summarizes the reason EPA took control of the Site. The parties
then met to discuss EPA's decision. At this meeting, EPA
provided Velsicol with approximately thirty pages of notes which
documented the various workplan violations which Velsicol
committed and the environmental problems which Velsicol had
created or aggravated at the Site. (Ex. 16). Velsicol responded
in writing to EPA's comments, but did not invoke dispute
resolution or otherwise challenge EPA's decision to take the Site
back. (Ex. 17).
The specific reasons leading to EPA assuming control of the Site
are contained in the comments provided to Velsicol. (Ex. 16).
Further detail on the daily events at the Site leading to this
decision are contained in the OSC log books (Ex. 65) and reports
generated by EPA's contractors at the Site. (Ex. 67). For
example, Velsicol committed violations of health and safety
requirements by having workers without personal protectice
equipment and working in trenches that were not properly shored
up. Velsicol also committed violations of its workplan by
improperly staging soils and using improper equipment.
In the typical Section 107(c)(3) case, EPA seeks treble damages
because of a PRP's blatant refusal to perform response actions
required by an order. This case, however, involves the
inadequate performance of response actions rather than a refusal
to perform. While it appears that no judicial decision addresses
such a case of inadequate performance, the wording of Section
107(c)(3) seems applicable in either situation. EPA has recently
circulated a draft interim guidance entitled "Interim Guidance on
Enforcement of CERCLA Section 106fal Administrative Orders
through Section 107(c) (3) Treble Damages and Section 106/bWl>
Penalty Actions" ("Interim Guidance"). (Ex. 85). In the Interim
Guidance, EPA promotes the use of Section 107(c)(3) damages in
cases of inadequate performance of response actions.
Specifically, the Interim Guidance states:
Treble damages may be available to EPA if the PRP does
not "properly provide removal or remedial action"
pursuant to a Section 104 or 106(a) order. The Agency
interprets this clause to require the PRP to perform
the response activities in the manner required by and
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in full accordance with the terms of the EPA-issued
order. Performance must be timely, according to the
schedules and technical specifications contained in the
order, and any deviation from any technical or time
requirement of the 106(a) order, without prior approval
by EPA pursuant to the terms of the order, gives rise
to a "failure to properly provide" a removal or
remedial action.
Treble damages may also be sought in instances of
partial noncompliance, i.e., where a PRP fails to
comply with some, but not all, of the terms and
conditions of an AO. In these situations of partial
noncompliance, EPA will calculate its potential
punitive damage claim by trebling the costs EPA
incurred to perform any response action necessitated as
a result of the PRP's failure to fully comply with the
order.
Lastly, under Section 107(c)(3), and assessment of
punitive damages need not be predicated on any degree
of PRP willingness to violate the order. Mere failure
to "properly provide removal or remedial action" is
sufficient to give rise to liability for the assessment
of the punitive damages.
Interim Guidance, pp. 11-12. Region IV believes that this draft
Interim Guidance document supports its position that Velsicol
failed to properly provide the response actions required by the
ROD and that Velsicol is subject it to Section 107(c)(3) damages.
2. Velsicol/s Failure was without Sufficient Cause
In EPA's opinion, Velsicol's failure to properly provide the
response actions required by the AOC was without "sufficient
cause." Section 107(c)(3) does not define "sufficient cause.*
In the context of a refusal to perform response actions, Courts
have defined "sufficient cause" to mean an objectively
reasonable, good faith belief that one has a defense to complying
with an order. U.S. v. Parsons, et. al. ("Parsons"), 723 F.Supp.
757 (N.D. Ga. 1989). Because no courts have dealt with the issue
in the context of inadequate performance of response actions, the
term has not been interpreted in that context. However, by
drawing by analogy to the Parsons standard, "sufficient cause"
could be interpreted to mean an objectively reasonable, good
faith reason to have failed to properly provided the required
response action.
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In this case, EPA does not believe that Velsicol had an
objectively reasonable, good faith reason to have failed to
properly provided the response actions. EPA's letter to Velsicol
summarizes the problems leading to EPA's assumption of control of
the removal (Ex. 15). The OSC log books and the pollution
reports prepared by EPA contractors document in greater detail
the repeated warnings and advice provided by EPA to Velsicol of
violations and of problems at the Site. (Ex. 65, 64). Rather
than be the result solely of inclement weather, the act of a
third party, or some other force maieuere event, the problems at
the site were caused primarily by Velsicol's mismanagement of the
response activities.
B. Amount of Puni^^w hawiacfPB
Section 107(c)(3) of CERCLA, 42 U.S.C. § 9607(c)(3), provides
that punitive damages may be up to three times the costs incurred
by EPA because of a Respondent's failure to provide those
response actions. In this case, not all of EPA's costs were
incurred because of Velsicol's failure.
In general, only those costs incurred at and after the time EPA
assumed control of the Site will be considered for purposes of
Section 107(c)(3) damages. By letter dated February 14, 1990,
EPA assumed control of the Site. (Ex. 15). By October 4, 1990,
EPA had completed its removal and allowed Velsicol to return to
the Site for purposes of maintenance activities. Therefore,
those costs which are trebled should, at a minimum, included
those costs incurred between February 14, 1990, and
October 4, 1990.
Arguably, costs incurred after October 4, 1990, should also be
trebled. In large part, these costs consisted of EPA's attempts
to investigate this matter,. negotiate a settlement and prepare
this referral. However, EPA would have incurred many if not all
of these costs even had EPA not performed Fund-lead activities.
For example, EPA would still have had past costs to recover.
Therefore, it may not be appropriate to seek costs incurred after
October 4, 1990. Those costs are therefore not included in the
calculation of treble damages set forth below.
EPA incurred costs for its TAT contractor both prior to and after
EPA assumed control of the removal. After February 14, 1990, EPA
would have incurred costs for this contractor regardless of
whether EPA assumed control of the removal. Velsicol may argue
that the TAT costs should therefore not be trebled. Because Any
attempt to define the increase in TAT costs incurred as a result
of the removal being performed Fund-lead will be imprecise, the
entire TAT costs are included in the calculation of treble
damages set forth below.
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Based on those assumptions, EPA's costs to be trebled are
$4,635,625.62. TheBe costs break down as follows:
Regional Payroll
Headquarters Payroll
Regional Travel
Headquarters Travel
Indirect CostB
Westinghouse Haztech
$45,029.59
24,813.29
8,611.29
7,722.59
95,245.50
(ERCS Contract)
Roy F. Weston (TAT Contract)
Roy F. Weston (ERU Contract)
VIAR
3,917,891.98
280,465.55
203,763.33
52,082.50
Based on these costs, the amount of treble damages sought is
$13,906,876.86.
A more detailed breakdown of the contractor costs is provided in
Exhibit 15 to this referral. This exhibit lists, by date of work
performance, each invoice on which the contractors billed for
work performed at the Site. For purposes of calculating the
contractor costs to be trebled, EPA considered the costs on
those invoices which bill only for work performed after
February 14, 1990, but prior to October 4, 1990. For each
contractor, Exhibit 105 identifies this total. Those invoices
are contained in the portions of the cost documentation package
pertaining to each contractor. (Ex. 58).
Any invoice for work performed prior to February 14, 1990, or
after October 4, 1990, was not considered. Similarly, invoices
which billed for work performed both within and outside that
period were not considered for purposes of calculating costs to
be trebled. For such "overlapping" invoices, it is impossible to
identify and separate, from the face of the invoice, the amount
billed for work performed within, as opposed to outside, that
period. Rather than use those invoices, EPA referred to the
1900-55 cost reports which cover the portions of the same time
periods covered by those invoices. Because these 1900-55 reports
identify costs incurred on a daily basis, EPA has used these
1900-55 reports to identify only those costs included on the
"overlapping" invoices which were incurred on after February 14,
1990, or prior to October 4, 1990. These 1900-55 reports are
included as Exhibit 60 to this referral.
A summary of payroll, travel and indirect costs incurred during
this period is included as Exhibit 106 to this referral. For
convenience, cost documentation material for these costs have
been excerpted from the cost documentation package (Ex. 58) and
have been reproduced in Exhibit 7.
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XI. OTHER LEGAL ISSUES
Potential legal issues related to each PRP are discussed in
Section VII of this referral.
XII. LITIGATION/SETTLEMENT STRATEGY
A. Settlement Negotiations and Cost Recovery Strategy
The three generator defendants have all received cost recovery
demand letters. EPA has already begun negotiations with
Velsicol, and is expecting to begin negotiations with GAF and
Mydrin in the near future* Velsicol has indicated that these
three defendants have also initiated discussions between
themselves.
Velsicol is the primary defendant in this matter* VelBicol has
taken the position that EPA's costs were at least in part caused
by latex wastes. (Ex. 97). Velsicol has also stated that it is
seeking contribution by GAF and Mydrin. In the absence of that
contribution, Velsicol has indicated that it will make a
settlement offer based on the purported divisibility of costs
incurred in response to the latex waste.
It is EPA's position that Velsicol's wastes were commingled with
virtually all other wastes and that Velsicol's wastes were the
primary cause for the removal. Therefore, it is EPA's position
that Velsicol is liable for all of EPA's costs at the Site.
Therefore, it would be appropriate for the U.S. to seek 100% of
the past Costs from Velsicol and to not compromise costs against
Velsicol based on the presence of non-Velsicol wastes.
One set of costs which the U.S. might consider compromising
against Velsicol would be those costs related to the latex wastes
which are drummed on Site. Under the AOC modification, EPA did
agree to take responsibility for wastes not attributable to
Velsicol. Costs attributable solely to those wastes, such as the
costs of the drums, is relatively minimal.
During negotiations, Velsicol has also attempted to link the cost
recovery to the future remediation of the site. Ideally,
Velsicol would prefer that the containment cells be converted
into a permanent remedy. This would obviously save much of the
expense of any further soil remediation. It is EPA's position,
however, that the cost recovery and the future remediation
activities are unrelated. Moreover, the containment cells are
designed to have only a 10-15 year life span. While this design
was used to ensure that the Site would be stable until final
remediation occurs# this design is not sufficient for turning the
containment cells into a permanent remedy.
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Velsicol has recently expressed interest in attempting
bioremediation of the contaminated soils. Obviously, this would
not allow the containment cells to be incorporated into a
permanent remedy. However, if the soils were successfully
bioremediated, Velsicol would then have the financial comfort of
knowing that ho more expensive remedy, such as incineration, was
forthcoming. EPA expects to receive further inquiry from
Velsicol on this issue in the near future. While EPA'8 position
remains that cost recovery is not linked to future remediation
activities, EPA is willing to continue to explore any action
which would result in the final disposition of the contaminated
soil.
GAF and Mydrin appear to be capable of making substantial
financial contributions. However, the case against these
generators poses different problems than the case against
Velsicol. Proving that these generators sent hazardous
substances to the Site will be difficult. The issue of
divisibility of costs will likely be time consuming and difficult
to overcome, with the likely result being a relatively small
judgment against the latex generators. In light of these
additional burdens, the United States may be best served by not
including them in this cost recovery referral. In the event EPA
does not sue the latex generators, Velsicol will, in all
likelihood, file a third-party, complaint against them. Because
of the likely third-party complaint, it is unclear whether the
suing only Velsicol will simplify the United States' case
management burden.
Based on her Section 104(e) response, Nancy Shaver Nation lacks
the resources to reimburse EPA's costs. Therefore, regardless of
any possible third-party defense that may be available to her
under Section 107(b)(3) of CERCLA, 42 U.S.C. S 9607(b)(3),
pursuit of Ms. Nation would likely require expenditure of more
resources then could be recovered from her. Therefore, EPA does
not recommend including her in this cost recovery action.
Eretta Shaver has approximately $454,000 in assets. This is
obviously far in excess of any amounts she or her husband
received from the Mathis brothers for disposal rights at the
Site. In light of her possible "third-party" defense under
Section 107(b)(3) of CERCLA, 42 U.S.C. § 9607(b)(3), her
liability is,not certain. In view of her lack of culpability and
advanced age, suing her would appear inequitable. Moreover, even
if the United States declines to sue her, the CERCLA lien is
already filed against her property. The United States may
therefore want to consider offering to release the lien in
exchange for some payment by her. Alternatively, as further work
will eventually be performed at the Site, the United States may
decline to act on the lien, reserving that issue to be dealt with
after final remediation of the Site.
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The Mathis brothers are clearly liable under Section 107 of
CERCLA, 42 U.S.C. S 607, and EPA recommends including them in
this lawsuit. However, EPA does not anticipate that they have
significant resources with which to reimburse the past costs.
EPA's investigation to date has only identified a total of
$131,469 in real property .holdings,. However, as explained
elsewhere in this referral, those properties include their
private residences, a NPL site, and another industrial waste
disposal site. Therefore, it does not appear that this real
property could be the source of fund with which to reimburse the
United States.
The Mathis brothers have refused to respond to Section 104(e)
information requests pertaining to their financial status. Until
the United States obtains complete financial information from the
Mathis brothers, EPA recommends including them in this law suit.
If they demonstrate an inability to pay, the United States should
be willing to settle based on that inability to pay.
B. Discovery
The United States should depose Mose and Sidney Mathis concerning
the waste disposal operations and the identity of the waste
generators. These depositions should confirm that the Mathis
brothers disposed of Velsicol, GAF and ALC wastes at the Site.
If the United States does decide to pursue its past costs against
Mydrin and GAF, additional discovery will be necessary to attempt
to identify the hazardous substances in the latex wastes. Martin
Hendricks, a long time former officer of ALC, should be deposed
to elicit information on that company's waste streams and
disposal practices.
Discovery may also be need to clarify the effect of the 1989 and
1990 corporate structural transactions concerning GAF. In
particular, documentation of the merger between the predecessor
GAF and Newco Holdings, Inc., will have to be obtained. In
addition, the reference in the Dun & Bradstreet Report to the
distribution of liabilities to corporate subsidiaries will have
to be explored.
C. Summary Judgment
The United States should move for partial summary judgment
against the generators on the issue of liability as soon as
possible. However, in light of the Alean decision, it may be
difficult if not impossible to avoid a trial on the issue of
divisibility.
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XIII. WITNESSES
The following witnesses would be expected to testify if this
matter went to trials
1. Charles K. Eger
Mr. Eger was the OSC for the removal at this Site. Mr. Eger was
responsible for the oversight of Velsicol while that company was
performing removal activities. He was also responsible for
leading the removal activities which EPA conducted after resuming
control at the. Site. Mr. Eger will testify as to the necessity
of the removal action, the oversight of Velsicol's actions, EPA's
decision to resume control of the Site, EPA's conduct of removal
activities, and the consistency of those costs with the National
Contingency Plan.
Mr. Eger can be contacted by telephone at the Region IV office in
Atlanta at (404) 347-3931.
2. Willard L. Waisner
Mr. Waisner will testify regarding the cost documentation package
which supports EPA's past costs in this case. He will also
testify concerning EPA's calculation of pre-judgment interest.
Mr. Waisner can be contacted by telephone at EPA's offices in
Atlanta at (404) 347-3278.
3. William Cooke
Mr. Cooke is the Chief of the Cost Accounting and Reporting
Section, Superfund Accounting Branch, Financial Management
Division, Office of the Comptroller, Office of Administration and
Public Resources, at EPA headquarters in Washington. Mr. Cooke
will testify concerning the calculation of EPA's Indirect cost
rates.
4. Mose and Sidney Mathis
Mose and Sidney Mathis can testify regarding the disposal
operations at the Site. As the defendants who operated the Site
and transported the wastes to the Site, the Mathis brothers can
identify the generators of the wastes they transported. The
Mathis brothers can generally describe the wastes, the types of
container those wastes were in, and can identify the approximate
time periods during which they hauled those wastes. They will be
unable to testify regarding the specific nature of the wastes.
In addition, they can confirm that those wastes were in fact
disposed of at the Site, rather than some other disposal
facility. They will be able to testify in regard to the
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49
contracts or other arrangements they had with Shaver and the
generators.
It should be noted that the Mathis brothers read and write
poorly, if at all. Moreover, they have no documentation of any
of the relevant transactions or events. Their testimony is based
on personal recollection. To date, they have been cooperative in
providing information to EPA concerning their waste disposal
operations.
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APPENDIX A
LIST OF EXHIBITS
Exhibit
1. Consent Judgment
2. Site Inspection Report
3. QA/QC Sample Results from 6/1B/85
Site Inspection Report (Organics)
4. QA/QC Sample Results from 6/18/85
Site Inspection Report (Inorganics)
5. Treble Damages Contractual Costs
6. Investigation and Sampling Report
7. Treble Damages
(Payroll, Travel)
8. Summaries of EPA Post-Action
Memorandum Sampling
9. Unilateral Administrative Order
10. Administrative Order on Consent
11. Modification to Administrative
Order on Consent
12. Rutherford Hayes Memo on Clean-Up
Criteria
13. Elmer Akins Memo on Clean-Up Criteria
14. Velsicol Correspondence Concerning
Clean-Up Levels
15. Letter Notifying Velsicol that EPA
was Assuming Control of Site
16. EPA Reasons for Assuming Control of Site
17. Velsicol Response to EPA
taking Site Back
18. Action Memorandum ($692,000)
19. Action Memorandum ($1,978,000)
Date
November 13, 1989
November 12, 1984
July 16, 1986
September, 1986
February 5, 1987
May 1, 1990
October 2, 1987
March 30, 1988
November 8, 1989
February 15, 1989
May 25, 1989
August 24, 1989
February 14, 1990
February 14, 1990
February 28, 1990
October 30, 1989
February 21, 1990
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20. EPA Request for Section 104(c)
Exemption ($5,782,150)
21. Final Action Memorandum and Section
104(c) Exemption
22. Notice of Availability of
Administrative Record
23. Velsicol's Comments on
Administrative Record
24. Index to Administrative Record
25. ATSDR Report
26. ATSDR Report
27. ATSDR Report
28. ATSDR Report
29. Letter from Velsicol to State
of Tennessee
30. Letter from Velsicol to State
of Georgia
31. Velsicol Section 104(e) Response
32. Notice Letter and Section 104(e)
Request to GAF
33. GAF Section 104(e) Response
34. Section 104(e) Request to GAF
35. GAF Section 104(e) Response
36. GAF Memo from Siegmann to Files
37. GAF Memo Re: Waste Survey
38. Mydrin Section 104(e) Response
(Section 104(e) Request not Located)
39. Mydrin Section 104(e) Response
40. Section 104(e) Request to
Nancy Shaver Nation
41. Nancy Shaver Nation Section 104(e)
Response
April 3, 1990
April 10
January 31
March 20
December 19
February 6
November 14
April 29
April 6
March 22
June 2
October 9
August 14
October 1
January 15
February 12
October 1
August 3
January 21
January 22
May 21
June 11
1990
1992
1992
1991
1986
1986
1988
1990
1974
1977
1984
1984
1984
1991
1991
1975
1979
1991
1991
1992
1992
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42. Section 104(e) Request to Eretta Shaver
43. Eretta Shaver Section 104(e) Response
44. Eretta Shaver Follow-up 104(e)
Response
45. Section 104(e) Request to Moses Mathis
46. Section 104(e) Request to Sidney Mathis
47. 104(e) Response from Sidney Mathis
48. Follow-Up Section 104(e) Request to
Sidney Mathis
49. Dun & Bradstreet Report on Velsicol
50. Dun & Bradstreet Report on GAP
51. Dun & Bradstreet Report on Mydrin
52. Letter from Reis to EPA
53. Letter from Reis to EPA
54. Letter from Reis to EPA
55. Letter from EPA to Velsicol
56. EPA Letter to Velsicol
57. CERCLA Lien
58. Financial Cost Documentation Package
59. Work Performed Documentation
60. 1900-55 Cost Reports
61. Latex Drum Sample ResultB
62. Velsicol Transmittal of Latex
Analysis to EPA
63. Interview Notes with Mathis Brothers
64. Pollution Reports (1-45)
65. OSC Log Books
66. Aerial Photographs
67. Photo Books
May 21, 1992
July 8, 1992
September 2, 1992
June 19, 1992
June 19, 1992
July 11, 1992
July 17, 1992
April 29, 1991
October 12, 1990
November 14, 1991
October 8, 1987
October 26, 1987
November 3, 1987
February 21, 1989
March 23, 1989
May 4, 1990
October 6, 1992
April 11, 1992
July 11, 1989
April 14, 1992
1989 - 1990
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68. Summary of Past Cost not Sought
in Referral
69. Cost Recovery Demand Letter to Velsicol
70. Updated Cost Recovery Demand Letter to
Velsicol
71. Cost Recovery Demand Letter to
Sidney Mathis
72. Cost Recovery Demand Letter to
Moses Mathis
73. Response of Sidney Mathis to
Cost Recovery Demand Letter
74. Response of Moses Mathis to
Cost Recovery Demand Letter
75. Follow-up Cost Recovery Demand
Letter to Sidney Mathis
76. Follow-up Cost Recovery Demand
Letter to Moses Mathis
77. Cost Recovery Demand Letter to GAF
78. Cost Recovery Demand Letter to Mydrin
79. Approved Velsicol Removal Workplan
80. Draft Interim Section 107(c)(3)
Guidance
81. Title Search Report
82. GaEPD Memo from Fehn to Taylor
83. GaEPD Memo from Fehn to Taylor
84. Permit for South Marble Top
Road Landfill
85. GaEPD Letter to Mathis Brothers
86. GaEPD Inspection Memo
87. Affidavit of Martin Hendricks
88. Velsicol Letter to EPA
concerning accrual of Interest
June 26, 1992
March 17, 1993
July 17, 1992
July 17, 1992
August 6, 1992
August 6, 1992
March 17, 1993
March 17, 1993
February 23, 1993
February 23, 1993
October, 1989
January 26, 1993
December, 1992
January 18, 1974
January 21, 1974
April 11, 1974
December 13, 1973
December 27, 1972
February 5, 1986
January 28, 1993
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89. EPA Letter to Velsicol
concerning accrual of Interest
90. EPA Letter to Velsicol
concerning accrual of Interest
91. Velsicol Letter to Mikalian
concerning accrual of Interest
92. Transmittal of Latex Samples Results
to Velsicol
93. EPA Letter to Velsicol
94. Velsicol Letter to Georgia
95. Velsicol Section 104(e) Response
96. Velsicol Section 104(e) Response
97. Velsicol Letter to EPA
98. Sidney Mathis Deposition
99. Velsicol - Certificate of Corporate
Existence in Delaware
100. Michigan Chemical Corporation -
Certificate of Merger with Velsicol
and Name Change
101. GAF - Certificate of Corporate
Existence in Delaware
102. Newco Holdings, Inc. - Name Change
103. ALC, Incorporated - Corporate
Documents
104. Mydrin, Inc. - Corporate
Documents
105. Chain of Custody
106. Explanation of Calculation of Indirect
Cost
107. Investigative Report
108. Sampling Results
109. Sampling Results
110. Sampling Results
Janaury 26, 1993
January 29, 1993
February 5, 1993
October 27, 1992
August 27, 1992
November 12, 1974
October 6, 1987
February 20, 1991
February 19, 1993
July 26, 1991
February 22, 1993
December 27, 1976
February 22, 1993
April 11, 1989
February 22, 1993
February 22, 1993
March 24, 1992
November 22, 1989
March 5, 1990
April 19, 1991
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111. Sampling Results July 15, 1986
112. Sampling Results November 24, 1986
113. Sampling Results March 5-18/ 1991
114. Sampling Results March 5, 1990
115. Sampling Results March 5, 1990
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UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
CIVIL ACTION NO.:
UNITED STATES OF AMERICA
Plaintiff
v.
GAF, INC., MOSES MATHIS,
SIDNEY MATBIS, MYDRIN, INC.,
VELSICOL CHEMICAL
CORPORATION
Defendants
COMPLAINT
Plaintiff, United States of America, for and at the request of
the Administrator of the United States Environmental Protection
Agency ("EPA") alleges the following:
PRELIMINARY STATEMENT
1. This is a civil action brought pursuant to Sections
104(a), 106(a), 107(a) and 107(c)(3) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(hereinafter CERCLA), 42 U.S.C. §§ 9604(a), 9606(a), 9607(a) and
9607(c)(3), as amended by the Superfund Amendments and
Reauthorization Act of 1986 (hereinafter "SARA"),
Pub.L. No. 99-499, for recovery of response costs incurred by
Plaintiff in response to the release and threatened release of
hazardous substances from a facility located near Kensington, in
Walker County, Georgia, for a declaratory judgment and for treble
damages.
2. This Court has jurisdiction of this action pursuant
to 28 U.S.C. § 1345 and 42 U.S.C. §§ 9607 and 9613(b).
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3. This action involves a release and threatened
release of hazardous substances from the Shaver's Farm site
(hereinafter Site) located near Kensington, in Walker County,
Georgia, within the Northern District of Georgia. Venue is propoer
in this Court pursuant to 42 U.S.C. § 9613(b) and 28 U.S.C.
S 1391(b).
DEFENDANTS
4. Velsicol Chemical Corporation ("Velsicol") is a
corporation established and existing under the lase of the State of
Delaware. Velsicol arranged for the disposal of hazardous
substances at the Site, or arranged for a transporter to transport
the hazardous substances to the Site for disposal.
5. Moses Mathis transported hazardous substances to the
Site for disposal and was the operator of the Site at the time of
disposal of hazardous substances at the Site.
6. Sidney Mathis transported hazardous substances to
the Site for disposal and was the operator of the Site at the time
of disposal of hazardous substances at the Site.
7. GAF, Inc. ("GAF"), is a corporation established and
existing under the laws of the State of Delaware. GAF arranged for
the disposal of hazardous substances at the Site, or arranged with
a transporter to transport the hazardous substances to the Site for
disposal.
9. Mydrin, Inc. ("Mydrin"), is a corporation
established under the laws of the State of Georgia. Mydrin is the
corporate successor to a corporation which arranged for the
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3
disposal of hazardous substances at the Site, or arranged with a
transporter to transport the hazardous substances to the Site for
disposal.
GENERAL ALLEGATIONS
10. The Site consists of approximately five (5) acres of
open farmland which is owned by Eretta Shaver. In 1973, Ms.
Shaver's husband entered into an agreement with Moses and Sidney
Mathis. Under that agreement, her husband allowed Moses and Sidney
Mathis to transport industrial waste to the Site and dispose of
that waste on the Site.
11. Between 1972 and 1974, Moses and Sidney Mathis
brought industrial wastes to the Site and disposed of those wastes
in and on the ground at the Site.
12. At its plant in Chattanooga, Tennessee, Velsicol
utilized and produced pesticides and other chemicals, including
dicainba and benzonitrile.
13. Dicamba and benzonitrile are hazardous substances as
defined in Section 101(14) of CERCLA, 42 U.S.C. § 9601(14).
14. Moses and Sidney Mathis transported wastes from the
Velsicol plant and disposed of those wastes at the Site. Those
wastes contained the hazardous substances dicainba and benzonitrile.
15. At its plant in Chattanooga, Tennessee, GAF produced
latex for use in the carpet industry. Components of wastes from
the latex production process included included antimony, arsenic,
cadmium, chromium, selenium and zinc.
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16. Antimony, arsenic, cadmium, chromium, selenium and
zinc are hazardous substances as defined in Section 101(14) of
CERCLA, 42 U.S.C. § 9601(14).
17. Moses and Sidney Mathis transported wastes from the
GAF plant and disposed of those wastes at the Site. Those wastes
included latex wastes and the hazardous substances antimony,
aresenic, cadmium, chromium, selenium and zinc.
18. At its plant in Dalton, Georgia, the American Latex
Company ("ALC") used and produced latex materials and adhesives.
Components of wastes from the production of these materials
included zinc and ammonia.
19. Zinc and ammonia are hazardous substances as defined
in Section 101(14) of CERCLA, 42 U.S.C. § 9601(14).
20. Moses and Sidney MathiB transported wastes from the
ALC plant to the Site and disposed of those wastes there. Those
wastes included the hazardous substances zinc and ammonia.
21. Mydrin is the corporate successor to ALC.
22. As a result of those disposal of wastes by Velsicol,
GAF and ALC at the Site, hazardous substances including dicamba,
benzonitrile, zinc, antimony and chromium came to be located at the
Site.
23. EPA and Velsicol entered into an Administrative
Order on. Consent effective on March 30, 1988.
24. Effective November 8, 1989, EPA and Velsicol
entered into a modification to the Administrative Order on Consent.
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5
25. By letter dated February 14, 1990, EPA notified
Velsicol that EPA was retaking control of the Site and would
conduct response activities. EPA's response consisted primarily of
the containment and treatment of the contaminated water, the
excavation of the remaining soils and wastes, the construction of
two on-site temporary containment cells, and the placement of those
excavated soils and wastes into the containment cells.
26. As of August 6, 1992, EPA had incurred
$5,474,266.95 in response costs at the Site. EPA continues to
incur adminstrative and enforcement expenses with regard to the
Site.
27. EPA sent a demand letter to Velsicol on
June 26, 1992. In that letter, EPA informed Velsicol of its
liability for response costs at the Site and demanded that Velsicol
reimburse EPA for $5,460,836.71. Velsicol has not paid these past
costs o date.
28. EPA sent a demand letter to Moses Mathis on
July 17, 1992. In that letter, EPA informed Moses Mathis of his
liability for response costs at the Site and demanded that Moses
Mathis reimburse EPA for $5,460,836.71. Moses Mathis has not paid
these past costs to date.
29. EPA sent a demand letter to Sidney Mathis on
July 17, 1992. In that letter, EPA informed Sidney Mathis of his
liability for response costs at the Site and demanded that Sidney
Mathis reimburse EPA for $5,460,836.71. Sidney Mathis has not paid
these past costs to date.
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6
30. EPA sent a demand letter to GAF on
February 23, 1993. In that letter, EPA informed GAF of its
liability for response costs at the Site and demanded that GAF
reimburse EPA for $5,500,352.71. GAF has not paid these past costs
to date.
31. EPA sent a demand letter to Mydrin on
February 23, 1993. In that letter, EPA informed Mydrin of its
liability for response costs at the Site and demanded that Mydrin
reimburse EPA for $5,500,352.71. Mydrin has not paid these past
costs
to date.
32. Pre-judgment interest calculated on the base amount
of past costs of $5,474,266.95 from June 26, 1992, to date, 1993,
is $
33. Pre-judgment interest calculated on the base amount
of past costs of $5,474,266.95 from July 17, 1992, to date. 1993,
is $ .
34. Pre-judgment interest calculated on the base amount of
past costs of $5,474,266.95 from February 23, 1993, to date, 1993,
is $ '.
FIRST CLAIM FOR RELIEF
CERCLA SS 104 f a 1 and 107(a)
35. Pursuant to Section 104(a) and (b) of CERCLA, 42
U.S.C. §§ 9604(a) and (b), the President may arrange for the
cleanup of hazardous substances or conduct whatever investigations
and studies are necessary to determine the need for, and extent of,
such a cleanup.
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36. The President delegated his authority under Section
104 of CERCLA to the Administrator of the EPA pursuant to Executive
Order, 46 Fed. Reg. 42238 (August 10r 1981).
37. Section 107(a) of CERCLA, 42 U.S.C. § 9607(a),
authorizes the President to recover from responsible parties "all
costs of removal and remedial action incurred by the United States
government ... not inconsistent with the National contingency Plan.
38. Persons liable under Section 107(a) of CERCLA, 42
U.S.C. § 9607(a), for costs incurred by the United States in
cleaning up contaminated Site include, but are not limited to:
(1) the current owner or operator of a facility (Section 107(a) (1),
42 U.S.C. § 9607(a)(1)), and (2) any person who owned or operated
a facility at the time a hazardous substance was disposed of at
such facility Section 107(a)(2), 42 U.S.C. § 9607(a)(2)), and (3)
any person who arranged for disposal, or arranged with a
transporter for transport for disposal, of hazardous substances
owned or possessed by such person, by any other party or entity, at
any facility owned or operated by another party or entity and
containing such hazardous substances Section 107(a)(3), 42 U.S.C.
§ 9607(a)(3)), and (4) any person who accepts or accepted any
hazardous substances for transport to disposal facilities selected
by such person Section 107(a)(4), 42 U.S.C. S 9607(a)(4)).
39. The Shaver's Farm site is a "facility" as that term
is defined in Section 101(9) of CERCLA, 42 U.S.C. § 9601(9).
40. There were releases and threatened releases of
hazardous substances into the environment at and from the Site
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8
within the meaning of of Section 101(22) of CERCLA, 42 U.S.C. §
9601(22).
41. Defendant Moses Mathis operated the Site at the
time hazardous substances were disposed of at the Site, selected
the Site for the disposal of those hazardous substances, and
accepted hazardous substances for transport to the Site.
42. Defendant Sidney Mathis operated the Site at the
time hazardous substances were disposed of at the Site, selected
the Site for the disposal of those hazardous substances, and
accepted hazardous substances for transport to the Site.
43. Defendant Velsicol arranged for the disposal, or
arranged with a transporter for transport for disposal, of
hazardous Substances owned or possessed by Velsicol, at the Site,
which contains such hazardous substances.
44. Defendant GAF arranged for the disposal, or
arranged with a transporter for transport for disposal, of
hazardous substances owned or possessed by GAF, at the Site, which
contains such hazardous substances.
45. Defendant Mydrin arranged for the disposal, or
arranged with a transporter for transport for disposal, of
hazardous substances owned or possessed by Mydrin, at the Site,
which contains such hazardous substances.
46. The response action undertaken at the Site was not
inconsistent with the National Contingency Plan, 40 C.F.R. Part
300.
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9
47. The United States has satisfied all conditions
precedent to a response action and to recovery of response costs
under Section 107 of CERCLA, 42 U.S.C. § 9607.
48. The Defendants are jointly and severally liable for
all of the response costs incurred by the United States at the
Site, pursuant to Section 107(a)(1), (2), (3) and (4) of CERCLA, 42
U.S.C. S 9607(a)(1), (2), (3), and (4).
SECOND CLAIM FOR RELIEF
CERCLA S 107fcH31
49. The allegations in Paragraphs 1-40, 43, and 46-48
are realleged and incorporated herein by reference.
50. Under Section 107(c)(3) of CERCLA, 42 U.S.C. §
9607(c)(3), any person who is liable for a release or threat of a
release of a hazardous substance and who fails without sufficient
cause to properly provide response actions upon order of the
President pursuant to Section 106 of CERCLA, 42 U.S.C. § 9606, may
be held liable to the United States for punitive damages in an
amount at least equal to, and not more than three times, the amount
of any costs incurred by the United States as a result of such
failure to take proper action. Under Section 107 (c)(3), the
President, and his delagatee the Adminstrator of the EPA, are
authorized to commence a civil action against any such person to
recover punitive damages.
51. EPA and Velsicol entered into Administrative Order
on Consent No. 88-10-C, with an effective date of March 30, 1988.
EPA and Velsicol entered into this AOC pursuant to Section 106(a)
of CERLCA, 42 U.S.C. § 9606(a).
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10
52. Effective November 8, 1989, EPA and Velsicol
entered into a modification of Adminstrative Order on Consent Mo.
88-10-C.
53. The Administrative Order on Consent (AOC)as
modified, required Deena to undertake certain actions to protect
public health, welfare and the environment.
54. The AOC was based on the imminent and substantial
endangerment to the public health, welfare and the environment
because of the release or threatened release of hazardous
substances at the Site.
55. Paragraphs 4 and 5 of the modification to the AOC
required Velsicol to perform certain activities, including the
excavation and staging of all drums, related waste, and
contaminated soils from an area referred to as the Suspected Drum
Disposal Area until combined soil concentrations of benzonitrile
and benzoic acid are equal to or less than 25 parts per million by
weight (PPM) and the combined soil concentrations of dicamba and
3,6 dichlorosalicyclic acid are equal to or less than 25 PPM.
56. In attempting to comply with Paragraphs 4 and 5 of
the modification to the AOC, Velsicol committed numerous violations
of the AOC, as modified, and caused a imminent and substantial
endangerment to public health, welfare and the environment.
Because of these activities, EPA notified Velsicol in writing on
February 14, 1990, that EPA was taking the Site back from Velsicol
and that EPA would perform response activities.
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11-
57. Defendant Velsicol failed to comply with the AOC, as
modified, and to properly provide the removal action required by
that AOC, as modified. Pursuant to Section 107(c)(3), Defendant
Velsicol is liable for punitive damages based on the response costs
incurred by EPA.
58. Defendant Velsicol's failure to properly provide the
response actions required by the AOC, as modified, was without
sufficient cause.
59. As a result of Velsicol's failure to properly provide
the response actions required by the AOC, as modified, EPA incurred
costs totalling $4,635,625.62. For this amount, punitive damages
under Section 107(c)(3) total $13,906,876.86.
PRAYER FOR RELIEF
WEEREFORE, Plaintiff, United States of America prays that
this Court:
a) Enter judgment against the Defendants, jointly and
severally, for all response costs which have been and will be
incurred' by the United States at and in conjunction with the
Shaver's Farm Site, plus interest;
b) Enter judgment against Defendant VelBicol, for punitive
damages in the amount of three times the costs incurred by the
United States in conducting the response action at the Site;
c) Award Plaintiff attorney's fees and costs; and
d) Grant such further relief as the Court may deem
appropriate.
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12
Respectfully submitted/
MyleB E. Flint
Assistant Attorney General
Environment and Natural
Resources Division
United States Department of Justice
name
Environmental Enforcement Section
Environment and Natural
Resources Division
United States Department of Justice
P.O. Box 761.1
Ben Franklin Station
Washington, D.C. 20044
OF COUNSEL:
Charles V. Mikalian, Esq.
Assistant Regional Counsel
U.S. Environmental Protection Agency
Region IV
345 Courtland Street, N.E.
Atlantaf Georgia 30365
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Cardinal8
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVI8ION
UNITED STATES OF AMERICA,
Plaintiff
v.
SHERWOOD MEDICAL COMPANY,
Defendant.
CIVIL ACTION
NO. 91-802-CIV-ORL-20
AMENDMENT TO CONSENT DECREE
I. BACKGROUND
A. The United States of America ("United States"), on
behalf of the Administrator of the United States Environmental
Protection Agency ("EPA"), previously filed a Complaint in this
matter pursuant to the Cpmprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et sea.. as
amended (hereinafter "CERCLA").
B. On February 3, 1992, a Consent Decree was entered, in
this matter, by the court.
C. The Consent Decree was intended to and did constitute
the agreement for interim action at the Site, the implementation
of which would e>qpedite the remedial work, avoid prolonged and
complicated litigation between the Parties and be in the public
interest.
D. EPA and the Settling Defendant (hereinafter jointly
referred to as "the Parties") agreed that the Settling Defendant
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2
should perforin an interim action prior to a final remedy
determination to expedite remediation in the surficial aquifer.
E. Under the interim action, embodied in a Record of
Decision executed on March 27, 1991 ("Interim Action ROD") the
Settling Defendant agreed to design and construct a pump and
treat system for the surficial aquifer.
F. In accordance with Section 12.1(d) of CERCLA, the
parties agreed that the interim action plan adopted by EPA and
embodied in the Consent Decree would attain a degree of cleanup
which at a minimum would assure protection of human health and
the environment at the Site.
G. The pump and treat remedy implemented under the Interim
Action ROD continues to remediate the surficial aquifer. The
Interim Action ROD, however, did not establish final performance
standards for the surficial aquifer because the Remedial
Investigation and Feasibility Study ("RI/FS") being conducted by
the Settling Defendant was not complete at the time that the
Interim Action ROD was issued.
H. The Settling Defendant has since completed the RI/FS
and EPA has established the performance standards for the
groundwater in the surficial aquifer, which standards are
embodied in the final remedial action which EPA chose for the
first operable unit at the site.
I. EPA divided the response actions at the Site into three
operable units. The first operable unit ("0U1") is the final
remedy for the entire Site except for Lake Miller sediments. EPA
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3
has delineated the response actions conducted under the Interim
Action ROD as the second operable unit ("0U2"). At a later date,
EPA will determine the final remedy, if any, for the sediments in
Lake Miller, and that response action will be the third operable
unit ("0U3").
J. On July 23, 1992, pursuant to Section 117 of CERCLA,
42 U.S.C. § 9617, EPA published a notice and brief analysis of
the proposed final remedial action for OU1, embodied in a
remedial plan, made the plan available to the public, and
provided opportunity for public comment.
K. The final remedial action for the groundwater and soils
in 0U1 is embodied in a Record of Decision executed October 8,
1992, ("0U1 ROD") which was published and made available to the
public on October 8, 1992. The State had a reasonable
opportunity to review and comment on-the 0U1 ROD, and the State
verbally concurred on October 6, 1992.
L. The OU1 ROD remedy is identical to the Interim Action
ROD remedy in that it requires the Settling Defendant to continue
operation of the pump and treat system constructed under the
Interim Action ROD. However, the 0U1 ROD also establishes the
performance standards for the groundwater in the surficial
aquifer.
M. The Settling Defendant has also been pumping and
treating the water from its on-site Floridan Aquifer production
wells, as that water is part of its industrial water supply.
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4
EPA has determined that the Settling Defendant should continue to
operate these water supply wells and treat the water from the
Floridan Aquifer. EPA has included this requirement in the 0U1
ROD, wherein EPA also requires the Settling Defendant to continue
monitoring the groundwater from the Floridan Aquifer, as well as
from the surficial aquifer.
N. The sampling analyses conducted during the RI indicated
that exposed site soils required no additional remediation.
However, if soils are excavated after Site remediation, EPA
wanted to ensure proper disposal and that all environmental
standards are met. The 0U1 ROD, therefore, contains
institutional controls which require the Settling Defendant to
notify EPA and the State in the future of any plans to excavate
soils and demolish buildings. The Settling Defendant must ensure
either that the excavated soils are properly disposed off-site
or, if the soils are to remain on-site, that such exposed soils
meet Toxicity Characteristic criteria or contain less than 520
mg/kg of chromium.
0. While the OU1 ROD does not require additional remedial
design or remedial construction, an amendment to the Consent
Decree and the SOW is appropriate in order to incorporate the
performance standards for groundwater, the institutional
controls, and other requirements of the OU1 ROD, into the Consent
Decree as enforceable requirements.
P. The parties acknowledge that the Consent Decree
entered, including all terms, conditions, definitions and other
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matters set forth therein, shall continue to be binding on the
parties.
Q. In accordance with Section 121(d)(1) of CERCLA, EPA and
Settling Defendant agree that the remedial action under the 0U1
ROD embodied herein will attain a degree of cleanup which at a
minimum assures protection of human health and the environment at
0U1.
R. The parties recognize, and the Court by entering the
Amendment to Consent Decree finds, that the implementation of
this Amendment will further expedite the remedial work at 0U1,
will avoid prolonged litigation between the Parties, and that
entry of this Amendment to Consent Decree is in the public
interest.
NOW, THEREFORE, it is hereby ORDERED, ADJUDGED, and DECREED:
II. AMENDMENTS TO PROVISIONS OF CONSENT DECREE
Except as provided below, all provisions, terms and
conditions of the Consent Decree shall remain unchanged. The
Consent Decree is amended as follows:
1. Subsection G. of Section IV. (Definitions) is
amended to include the 0U1 ROD and the Amended SOW and shall read
as follows:
"'Operation and Maintenance' shall mean all operation
and maintenance activities required by the Interim
Action ROD, the OU1. ROD, the Interim. Action SOW and the
Amended SOW and the Final Operation' and Maintenance
Plan developed by Settling Defendant and approved by
EPA."
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2. Subsection L of Section IV. (Definitions) is
amended to distinguish the Interim Action ROD from the 0U1 ROD
and shall read as follows:
"'Interim Action ROD' shall mean the EPA Record of
Decision relating to the Site which was signed on March
27, 1991, by the Regional Administrator, EPA Region IV,
and all attachments thereto. '0U1 ROD' shall mean the
Record of Decision for the final remedy for Operable
Unit #1, which Record of Decision was signed on October
8, 1992,. by the Regional Administrator, EPA Region IV,
and all attachments thereto. Both the Interim Action;
ROD and the OU1 ROD are attached as Appendix 1 to the
Amendment to Consent Decree."
3. Subsection M. of Section IV. (Definitions) is
amended to include the Amendment to Consent Decree, and the
Amended SOW, and shall read as follows:
Remedial Action' shall mean all property acquisition,
excavation, transportation, construction, treatment or
other similar activities required by the Interim Action
SOW, the Amended SOW, and the Remedial Action Work
Plans developed by Settling Defendant and approved
by EPA pursuant to this Consent Decree, and the
Amendment To Consent Decree, including any additional
activities required by Sections VIII and IX of this
Decree."
4. Subsection P. of Section IV. (Definitions) is
amended to distinguish the Interim Action SOW from the Amended
SOW and sha\l read as follows:
'"Interim Action SOW' shall mean the scope of work for
implementation of the interim action remedial design,
remedial action, and operation and maintenance work at
the Site. 'Amended SOW' shall mean the amendment to
the Interim Action SOW1 for the implementation of the
0U1 ROD. Both the Interim Action SOW and the Amended
SOW are attached as Appendix 2 to the Amendment to
Consent Decree."
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5. Subsection S. of Section IV. (Definitions) is
amended to distinguish Operable Unit #1 from Operable Unit #2 and
shall read as follows:
"'Site' shall mean the Sherwood Medical Company
superfund Site, encompassing approximately 42 acres,
located approximately three miles northeast of Deland,
Volusia County, Florida, as described in the Interim
Action ROD. and depicted on the map attached as Appendix
3 to the Consent Decree. The Site is. divided into
three operable units for the purpose of remediation.
Operable Unit #1 is the final remedy addressing the
contamination of the entire site, with the exception of
Lake Millei: sediments ("0U1"). Operable Unit #2 is all
response actions conducted pursuant to the Interim
Adtion ROD ("0U2"). Operable Unit #3 will be the final
remedy, if any, chosen for the sediments in Lake Miller
("OU3").
6. Subsection E of Section VII. (Performance
Standards) is amended to include the Amendment to Consent Decree
and the 0U1 ROD and shall read as follows
"E. Performance Standards The Work performed by
Settling Defendant pursuant to the Consent Decree and
the Amendment to Consent Decree shall achieve the
Performance Standards set forth in Section 10 of the
OU1 ROD, which Performance Standards attain the ARARs
set forth in the Interim Action ROD in Section 11.2."
7. Subsection A of Section VIII. (U.S. EPA Periodic
Review To assure Protection Of Human Health and the Environment)
shall be amended to require EPA to review the remedial action at
the Site at least every five (5) years after the entry of the
Amendment to Consent Decree.
8. Unless otherwise specified, all references in the
consent Decree to "ROD" or "SOW" shall be deemed a reference to
both the "Interim Action ROD" and "0U1 ROD" and the "Interim
Action SOW" and the "Amended SOW" where appropriate.
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9. Unless otherwise specified, all references in the
Consent Decree to "Consent Decree" shall be deemed a reference to
both the "Consent Decree" and the "Amendment to Consent Decree"
where appropriate.
10. Unless otherwise specified, all references in the
Consent Decree to "Site" shall be deemed a reference to "OU1"
unless otherwise appropriate.
III. AMENDMENT TO INTERIM ACTION SOW
This Amendment to Consent Decree provides an Amendment
to the Interim Action SOW ("Amended SOW") for the completion of
remedial action and operation and maintenance work at the Site.
The Amended SOW shall supplement, further define and be an
addition to the Interim Action SOW which was incorporated into
and made a part of the Consent Decree. The Interim Action SOW is
specifically incorporated herein by reference. The Amended SOW
is attached as Appendix 2 to the Amendment to Consent Decree and
is incorporated into and made an enforceable part of the
Amendment to Consent Decree.
IV. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT
The Amendment to Consent Decree shall be lodged with the
Court for a period of not less than thirty (30) days for public
notice and announcement in accordance with Section 122(d)(2) of
CERCLA, 42 U.S.C. §9622(d}(2), and 28 C.F.R. §50.7. The United
States reserves the right to withdraw or withhold its consent if
the comments regarding the Amendment to Consent Decree disclose
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facts or considerations which indicate that the Amendment to
Consent Decree is inappropriate, improper, or inadequate.
SO ORDERED THIS* day Of , 1993.
united States District Judge
THE UNDERSIGNED PARTIES enter into this Consent Decree relating
to the Sherwood Medical Company Superfund site.
FOR THE UNITED STATES OF AMERICA
MYLES E. FLINT
Assistant Attorney General
Envirpnment and Natural Resources
Division
U.S. Department of Justice
RYL L./£MOUT
Environmental Enforcement Section
Land and Natural Resources
Division
U.S. Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044
(202) 514-5466
U.S. Environmental Protection
Agency
345 Cpurtland Street, N.E.
Atlanta, Georgia 30365
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10-POINT SETTLEMENT ANALYSES
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ENFORCEMENT CONFIDENTIAL
ATTORNEY WORK PRODUCT
TEN POINT SETTLEMENT ANALYSIS
Ciba-Geigy Corporation Superfund Site
Mcintosh, Alabama
I. OVERVIEW
Region IV proposes to enter into a CERCLA Section 106, 42 U.S.C.
§ 9606, Consent Decree with Ciba-Geigy Corporation ("Ciba-Geigy")
for the performance and funding of a complete
Remedial Design/Remedial Action (RD/RA) for Operable Unit 4 at
the Ciba-Geigy Corporation Superfund Site, Mcintosh, Washington
County, Alabama (the "Site"). Ciba-Geigy is the sole responsible
party for the contamination at the Site, and has executed the
attached judicial Consent Decree, which provides for Ciba-Geigy
to conduct the RD/RA for Operable Unit 4 at the Site ("0U4"),
which has a present value of approximately $25,000,000, and to
reimburse the United States for future response' costs related to
the Consent Decree, including but not limited to oversight costs.
Ciba-Geigy has already entered into a Consent Decree for Operable
Unit 2 at the Site ("0U2"). Past costs are not included in the
OU4 Consent Decree because they have already been paid pursuant
to the 0U2 Decree. The 0U2 Consent Decree was entered on
November 18/1992.
The OU2 remedy was originally estimated to cost a maximum of
$120,000,000, assuming that all excavated material is treated Jay
incineration, and the OU4 remedy was originally estimated to cost
a maximum of $50,000,000, also assuming incineration as the only
treatment for excavated material. The original cost estimates
were based on an action level of 1000 ppm total organics that was
set forth in the Feasibility Study for the Site several years'
ago. However, during the comment period for the 0U2 ROD, soil
cleanup levels for indicator contaminants were developed based on
the protection of groundwater, resulting in a decrease in the
volume of contaminated material to be excavated and treated for
both Operable Units. In addition, the costs per cubic yard for
incineration have gone down since the publication of the FS.
Accordingly, in addition to the Consent Decree for OU4, Region IV
proposes, to enter into an amendment to the Consent Decree for 0U2
which reduces the amount of the financial assurances Ciba-Geigy
is required to provide. The amendment reduces the amount of
financial assurances for OU2 to $70,000', 000.. The OU4 Decree
reflects the reduced cost estimate for that Operable Unit of
$25,000,000.
Headquarters consultation and concurrence is required for this
Section 106/107 RD/RA settlement given that the response costs
and total claims for the Site exceed $60 million.
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II. TERMS
Under the terms of settlement embodied in the Consent Decree,
Ciba-Geigy will perform and fund the entire RD/RA, and reimburse
the United States for costs incurred by the United States under
the terms of the Consent Decree, including, but not limited to
oversight costs. The estimated cost of implementing the selected
remedy is $25,000,000. EPA's recently received Ciba-Geigy's
payment of past costs, equal $322,313.52, pursuant to the 0U2
Decree. This Consent Decree, like the OU2 Decree, constitutes a
100 % settlement.
Under the terms of the amendment to the 0U2 Consent Decree, the
financial assurances provision would be changed to reflect that
the tqtal estimated cost of the Work for Operable Unit 2 is
70,000,000. In addition, Ciba-Geigy will be allowed to reduce
its financial assurances amount in future years to reflect
amounts already expended. Finally, Ciba-Geigy will be required
to submit an additional demonstration of the total estimated cost
of the Work at the completion of the Remedial Design ("RD") to
reflect information developed during the RD. The amount of
financial assurances will then be adjusted accordingly. The
amendment to the OU2 Decree also provides for certain changes to
the 0U2 SOW, which mirror certain negotiated provisions from the
OU4 SOW, as described on page 6, below.
III. BACKGROUND
A. General Description of the Site
The Ciba-Geigy Mcintosh plant property encompasses 1,468 acres
adjacent to the Tombigbee River near Mcintosh, Alabama. The
Ciba-Geigy plant is an operating facility and currently
manufactures over 100 specialty chemicals, making it Ciba-Geigy's
largest manufacturing facility in the United States.
The Ciba-Geigy Mcintosh facility began operations in October
1952, as the Geigy Chemical Corporation, manufacturing
dichlordiphenyl-trichloroethane (DDT). Over the next eighteen
years the operation expanded to include the production of
fluorescent brighteners for laundry products, herbicides,
insecticides, agricultural chelating agents and chemical
sequestering agents for industrial use.
In 1970, Geigy Chemical Corporation merged with Ciba, the
Chemical Industry in Basel, Switzerland, forming the Ciba-Geigy
Corporation. The operations expanded to produce resins and
additives used in the plastics industry, anti-oxidants and small
volume specialty chemical products such as water treatment
chemicals and fire fighting foams.
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In August 1982, the EPA Region IV Environmental Services Division
(BSD), conducted an investigation of the neighboring Olin
Chemical Company which included taking samples from a drinking
water well on the Ciba-Geigy property. The sample results
indicated the presence of hazardous substances at concentrations
in the shallow aquifer that warranted further investigation of
the Ciba-Geigy property. The investigation resulted in a June
1983, Hazardous Ranking System (HRS) survey. The HRS score for
the Site was 53.42 and in September 1983, the Site was included
on the National Priorities List.
Previous sampling reported by BCM Engineers Inc. (1988) in the
vicinity of the production facility has documented groundwater
contaminated by benzene, chlorobenzene, carbon tetrachloride, and
chloroform. Surface water samples indicate the presence of as
many as 29 analytes, mostly metals, volatile organics, and 17
manufactured pesticides. Soil samples also indicate the presence
of as many as. 43 analytes at the Site, mostly manufactured
pesticides, metals, DDT, DDD, DDE, and volatile organics.
The Ciba-Geigy plant is a permitted facility under the Solid
Waste Disposal Act (SWDA), 42 U.S.Cr §§ 6901 to 6991(i).
B. Response Actions at the Site
A condition of Ciba-Geigy's 1985 RCRA operating permit required
Ciba-Geigy to develop a Work Plan to conduct a Remedial
Investigation/Feasibility Study (RI/FS) to investigate the source
of groundwater contamination. Subsequent to EPA's approval of
the Work Plan, Ciba-Geigy conducted the RI/FS to identify areas
of contamination and develop the remedial strategies to address
the areas identified.
The planned remediation of the Site has been divided into four
Operable Units. The first Operable Unit addresses contamination
of the shallow (alluvial) groundwater aquifer. Ciba-Geigy is
conducting the clean-up of groundwater pursuant to the corrective,
action portion of its RCRA permit. Accordingly, as described
below,. EPA issued a no-action ROD with respect to OUl. The
second Operable Unit at the Site addresses soil contamination at
ten of eleven former waste management areas of the Site. Ciba
Geigy is currently conducting the OU2 RD/RA pursuant to a Consent
Decree which was entered on November 18, 1992. Operable Unit 3
addresses contamination within the floodplain area of the Site,
including contamination in an effluent ditch running through the
floodplain area. A ROD has not yet been issued for Operable Unit
3. Operable Unit 4 addresses contamination of soils in one
former waste management area of the Site and in the upland
portion of the effluent ditch. The RD/RA for Operable Unit 4 is
the subject of the settlement embodied in the attached Consent
Decree»
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Ciba-Geigy installed pump and treat groundwater intercept wells
at the facility near the southern boundary of the facility
property in 1987, pursuant to the corrective action portion of
the present RCRA operating permit. In addition, a Record of
Decision (ROD) for Operable Unit One (groundwater) was signed in
September 1989. This ROD identified "No Further Action" as the
EPA selected remedy, recognizing that the pump and treat system
was already being implemented pursuant to the operating permit.
The pump and treat system has successfully intercepted the
contaminant plume, preventing the off-site migration of the
contaminants, and the concentrations of contaminants detected in
the wells have stabilized at reduced concentrations.
In a Record of Decision (ROD) issued by EPA on September 30,
1991, the Regional Administrator, Region IV, EPA, selected a
remedial action for Operable Unit 2 at the Site. EPA's preferred
alternative for remediation of Operable Unit 2 at the Site, as
set forth in the ROD consists of (1) The excavation of
contaminated soils and sludges until established cleanup levels
are reached or until excavation becomes technically impracticable
(i.e., depths in excess of 20 feet), whichever is reached first;
(2) On-site thermal treatment of approximately 65,000 cubic yards
of highly contaminated soils and sludge; (3) Disposal of treated
soil and residual ash from the thermal treatment process in an
on-site RCRA Minimum Technology Subtitle C landvault(s); (4)
Stabilization-solidification (or the utilization of an innovative
technology proven effective during the remedial design), of
approximately 62,300 cubic yards of moderately contaminated soils
and sludge; (5) In-situ soil flushing (or an innovative
technology proven effective during remedial design) combined with
isolation walls and extraction wells to remediate areas where the
risk based cleanup levels are not achieved before an excavation
depth of 20 feet is reached; (6) Backfilling excavated areas with
common fill and vegetating the areas with a suitable vegetative
cover; (7.) Operation and maintenance of the landvault(s) for a
minimum of thirty years, with continued maintenance of the
landvault(s) to occur under the authority of RCRA; and (8)
Institutional controls restricting land use and groundwater use
until both direct contact soil cleanup levels and subsurface soil
cleanup levels are permanently achieved* Ciba-Geigy is
conducting the RD/RA for Operable Unit 2 pursuant to a Consent
Decree entered on November IB, 1992.
In a Record of Decision (ROD) issued by EPA on July 14, 1992, the
Regional Administrator, Region IV, EPA, selected a remedial
action for Operable Unit 4 at the Site. EPA's preferred
alternative for remediation of Operable Unit 4 at the Site, as
set forth in the ROD consists of: (1) The excavation of
approximately 63,000 cubic yards of contaminated soils and
sludges until established cleanup levels are reached or until
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excavation limits are reached ; (2) On-site treatment of
excavated soils and sludges through thermal treatment or one or
more of several innovative technologies that will be tested
during Remedial Design, including solidification/stabilization,
dechlorination, innovative thermal technologies and biotreatment;
{3) disposal of stabilized/solidified material in an on-site RCRA
Minimum Technology Subtitle C landvault(s); (4) Disposal of other
treated soil and residual ash in excavated areas; (5) In-situ
soil flushing (or an innovative technology proven effective
during remedial design) combined with isolation barriers and
extraction wells to remediate areas where the risk based cleanup
levels are not achieved before excavation limits are reached; (6)
In-situ stabilization/fixation treatment of approximately 46,000
cubic yards of iron slurry waste; (7) Backfilling excavated areas
with common fill and vegetating the areas with a suitable
vegetative cover; (8) Operation and maintenance of the
landvault(s) for a minimum, of thirty years, with continued
maintenance of the landvault(s) to occur under the authority of
RCRA; and (9) Institutional controls restricting land use and
groundwater use until both direct contact soil cleanup levels and
subsurface soil cleanup levels are permanently achieved. Ciba-
Geigy will implement the ROD for 0U4 pursuant to the attached
Consent Decree.
C. RD/RA Negotiations History
EPA issued Ciba-Geigy a CERCLA Section 122(a) letter on September
18, 1992, providing Ciba-Geigy an opportunity to conduct the
RD/RA pursuant to a Consent Decree with EPA oversight. The
Section 122(a) letter provided for a 60 day negotiation period.
However, at the time the letter was sent, it was determined by
EPA that additional dioxin sampling needed to be done at 0U4
pursuant to a Headquarters directive calling for dioxin sampling
at all NPL sites where open burning of pesticides was known to
have occurred. The.negotiation period was extended pending the
results of the dioxin sampling, which Ciba-Geigy agreed to
conduct with EPA oversight. RD/RA negotiations were conducted
concurrently with the dioxin sampling. Recently, Ciba-Geigy
completed the dioxin sampling and data presented to EPA shows
that the results will not impact the 0U4 remedy. Accordingly,
Ciba-Geigy executed the attached Consent Decree on March 23,
1993.
Excavation limits established in the ROD allow excavation to
be halted because of technical impractibility in the following four
situations: (1) When large concrete structures are encountered,
such as building foundations, reinforced concrete slabs and
concrete roadway sections connected with reinforcing steel; (2)
When the water table is encountered; (3) When a depth of 20 feet
below land surface is reached; and (4) When the iron-slurry waste
is encountered.
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During RD/RA negotiations, Ciba-Geigy sought to amend the
financial assurances provisions of the attached Consent Decree
and the 0U2 Decree. Ciba-Geigy argued that the cost estimates
contained in the 0U2 and 0U4 RODs were based on Feasibility Study
data developed years ago when action levels were more stringent
and incineration costs were higher. Upon review, Region IV found
Ciba-Geigy's contentions to be correct. Ciba-Geigy demonstrated
to Region IV's satisfaction that the cost estimates were
excessive, and that updated cost estimates prepared by Ciba-Geigy
should be used instead as the basis for setting the amount of
financial assurance to be provided by Ciba-Geigy. Instead of the
original estimates of $120,000,000 for OU2 and $50,000,000 for
OU4, Region IV has approved revised estimates of $70,000,000 for
OU2 and $25,000,000 for OU4. Those estimates are reflected in
the attached 0U4 Consent Decree and the attached Amendment to the
OU2 Consent Decree.
Some negotiated items in the SOW will result in minor changes to
the ROD that will be addressed in an ESD. These include: (1)
placement of treated material which meets LDR standards in
excavated areas instead of in a RCRA landvault (the material will
not be a RCRA hazardous waste and will have contamination levels
far lower than action levels for excavation); (2) use of
isolation barriers instead of or in addition to isolation walls
in areas where deep soil will be treated in-situ; and (3)
permitting Ciba-Geigy to conduct bioremediation treatability
studies ex-situ in addition to in-situ. EPA has agreed to make
parallel changes to the 0U2 SOW, and those changes are provided
for in the attached amendment to the 0U2 Decree. Accordingly,
when the ESD is prepared for the OU4 ROD, an ESD will also be
prepared for the OU2 ROD.
D. PRP Analysis
Ciba-Geigy Corporation, as the owner and operator of the
facility, as well as the generator of the hazardous substances
released into the environment at the Site, is the only CERCLA
Section 107(a) liable party.
IV. TEN-POINT SETTLEMENT ANALYSIS
A. Volume of Waste Attributable to Each PRP
Ciba-Geigy (with its predecessor, Geigy Chemical Corporation, the
liabilities of which Ciba-Geigy assumed by merger) contributed
100% of the contaminants found at the Site.
B. Nature of Wastes Contributed.
As indicated above, all of the wastes at the Site were generated
by Ciba-Geigy Corporation. The majority of the wastes and
residues generated by production operations at the Ciba-Geigy
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facility have been managed, treated, and disposed of on-site
throughout the Site's history. Contaminants of concern are
numerous, and include high molecular weight chlorinated pesticides
(e.g., DDT, gamma-BHC), site-manufactured pesticides (e.g.,
atrazine, simazine), and volatile solvents (e.g., chloroform,
xylenes). Ciba-Geigy caused the release of these contaminants
into the environment.
C. Strength of Evidence Tracing the Wastes at the Site to the
Settling Parties
Liable parties under Section 107 of CERCLA include the current
owners or operators of a Site and persons who at the time of
disposal of hazardous substances at the Site, owned or operated
the facility. Ciba-Geigy is the current owner/operator of the
facility. In addition, Ciba-Geigy, or its predecessor, Geigy
Chemical Corporation (the liabilities of which Ciba-Geigy assumed
by merger), has been the owner/operator of the facility since
operations began at the Site in 1952. Therefore, Ciba-Geigy is
liable under Section 107(a) of CERCLA. In addition, Ciba-Geigy
has admitted through various submissions to EPA that it caused
the release of the contaminants at the Site.
Investigations at the Site have revealed contamination of both
soil and shallow groundwater. Over the years* various
impoundments and landfill areas have been used by Ciba-Geigy for
treatment and disposal of the wastes generated by Site
operations. The RI/FS conducted by Ciba-Geigy as a condition of
its RCRA operating permit identified eleven former waste
management areas at which hazardous substances have been
released. In light of Ciba-Geigy's long period of ownership and
operation of the facility, together with information about the
treatment and disposal of wastes over the course of operations at
the facility, and the documented release of hazardous substances
at the Site, Ciba-Geigy's liability under CERCLA appears clear.
D. Ability of the Settling Parties to Pay
Ciba-Geigy is a large, financially secure multi-national company.
Further, Ciba-Geigy has a substantial investment in the operating
facility at the Site and intends to keep this operation
functioning. For these reasons.it appears that Ciba-Geigy will
be able to meet its obligations under the Decree. Further, the
Decree requires Ciba-Geigy to provide financial assurances
establishing its ability to fund the remedy. Ciba-Geigy
satisfied its financial assurance obiliation under the 0U2
Consent Decree through a guarantee from its parent borporation,
CIBA-GEIGY Limited, Basel, Switzerland. Through submissions to
EPA, this parent corporation tuis demonstrated that it meets the
requirements of 40 C.F.R. § 264,143(f), and has adequate assets
to meet the obligations under the attached Consent Decree and the
0U2 Consent Decree. The parent company's equity exceeds
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$12 billion in US dollars.
E. Litiaative Risks in Proceeding to Trial
There are no obvious litigative risks that might preclude EPA
from recovering all of its costs at trial. However, the remedy
selected is complex, and the combined expense of the various
Operable Units makes the remediation of this Site one of the most
expensive clean-ups in Superfund history. As such there is the
potential for an elevated level of scrutiny in the case.
The Region is not aware of any procedural or substantive problems
affecting the admissibility of the government's evidence. Nor
does their appear to be any question as to the adequacy of the
government's evidence. There do not appear to be any defenses
available to Ciba-Geigy. Ciba-Geigy has been fully cooperative
in developing an effective remedy for the Site. Ciba-Geigy
appears committed to implementing the remedy, and has not
challenged the Agency's action to date. Due to the complexity of
the Site and the selected remedy, the ROD has been the subject of
considerable review during its development, both in the Region
and in Headquarters. Headquarters and the State of Alabama have
both concurred with the ROD.
While the litigative risks appear to be minimal, the settlement
embodied in the attached Consent Decree requires Ciba-Geigy to
fund 100% of the RD/RA for Operable Unit 4. The Consent Decree
also requires Ciba-Geigy to reimburse EPA for all of its future
costs to be incurred in overseeing the implementation of the
RD/RA (Past costs have already been paid pursuant to the Consent
Decree for OU2). Therefore, a combined cost recovery/RD/RA
settlement is the optimum resolution of this case.
F. Public Interest Considerations
The public interest in this case lies in conservation and
reimbursement of the Superfund, and in the prompt commencement of
the RD/RA, as provided for in the Consent Decree.
G. Precedential Value
This case does not have significant precedential value, as the
Consent Decree does not deviate from EPA's policies on issues of
national significance, and the factual situation does not raise
any novel issues.
H. Value of Obtaining a Present Sum Certain
EPA is recovering 100% of its future costs to be incurred under
the terms of. the Consent Decree. Past costs have already been
reimbursed. Ciba-Geigy has agreed to fund all of the response
costs for Operable Unit 4, which are estimated to exceed $25
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million. Thus the benefit of settlement is substantially
equivalent to what the government could obtain by proceeding to
trial, only without the necessity of incurring litigation costs.
I. Inequities and Aggravating Factors
The Region is not aware of any inequities or aggravating factors
which should be considered in assessing this settlement.
J. Nature of Case that Remains After Settlement
As this is a full Section 106 RD/RA settlement in combination
with a 100% settlement of future costs, and past costs have
already been reimbursed, no case remains with respect to Operable
Unit 4 after entry of the Consent Decree. EPA will retain all of
its claims against Ciba-Geigy relating to Operable Units 3, which
will be addressed in future negotiations after a remedy has been
selected. In addition, the Consent Decree contains standard
reopeners in the event of remedy failure or discovery of
previously unknown conditions.
V. CONCLUSION
The Ciba-Geigy Consent Decree for Operable Unit 4 is a favorable
settlement for the United States. If the Consent Decree iB
accepted, the United States will achieve the goals of protecting
human health and the environment, replenishing the Superfund, and
conserving its limited resources, which may be used to address
other environmental problems. Moreover, the settlement is
consistent with the-Agency's settlement policy and is embodied in
a Consent Decree which adheres to Agency policy and guidance.
For these reasons and other reasons stated in the foregoing
discussion, the Region recommends that the Complaint and the
Consent Decree be signed and then filed in the appropriate court.
The attached amendment to the Consent Decree for Operable Unit 2
is reasonable in light of Region IV's determination that the cost
estimates contained in the ROD are outdated and should be reduced
to the amount- in the amendment ($70,000,000). The Amendments
only effects are to make minor adjustments to the SOW and to
allow Ciba-*Geigy to adjust the financial assurance amount to the
demonstrated estimated total cost of the Work. Ciba-Geigy will
be able to reduce its financial assurance submission in
succeeding years to reflect amounts that have already been
expended. At the completion of the RD, Ciba-Geigy will be
required to again submit for EPA's approval a demonstration of
the total estimated cost of the Work in light of information
developed during the RD, and adjust its financial assurance
amount accordingly. The Consent Decree remains unchanged in all
other respects. Accordingly, Region IV recommends that the
Amendment to Consent Decree for OU2 be signed and filed in the
appropriate court.
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ENFORCEMENT CONFIDENTIAL
ATTORNEY WORK PRODUCT
TEN POINT SETTLEMENT ANALYSIS
FOR THE
HERCULES 009 LANDFILL SITE
(OPERABLE UNIT ttl)
CONSENT DECREE
OVERVIEW
The CERCLA Section 106/107 settlement embodied in this Consent
Decree for RD/RA accomplishes two objectives. First, it provides
a vehicle for total remediation, under the oversight of the U.S.
Environmental Protection Agency ("EPA" or "the Agency"), of the
Hercules 009 Landfill Site ("the Site") by Hercules Incorporated
("Hercules"), the party identified by the EPA as the sole
Potentially Responsible Party ("PRP") at the Site. Second,
because Hercules, as the Settling Defendant ("the Settlor"), has
agreed to reimburse the Agency for 100 percent of past and future
response and oversight costs, the settlement will eliminate any
need to compromise costs or pursue cost recovery litigation.
Pursuant to Delegation 14-13-B, Concurrence in Settlement of
Civil Judicial Action {September 13, 1987), Regional
Administrators are authorized to exercise Agency concurrence in
the settlement of CERCLA Section 104/107 recovery actions,
subject to certain limitations. Exercise of authority pursuant
to Delegation 14-13-B is specifically limited to cost recovery
actions seeking $500,000 or less, and generally limited by OE and
OSWER periodic review. Under OSWER Directive No. 9012.10-a,
Revision of CERCLA Civil Judicial Settlement Authorities Under
Delegations 14-13-B and 14-14-E (June 17, 1988), as modified by
OSWER Directive No. 9012.10-b, Redelecratlon of Civil Judicial
Settlement Authorities Under Delegation 14-13-B and 14-13-E
(August 18, 1988), certain of the concurrence and consultation
requirements of Delegation 14-13-B were modified and revised by
the OE and OSWER. Thereafter, and except in two specific
circumstances, Headquarters consultation or concurrence is
required for neither CERCLA Section 106 RD/RA settlements where
response costs do not exceed $30 million, nor for CERCLA Section
107 settlements where total claims do not exceed $30 million.
Specifically, the two exceptions to the delegation arise if the
settlement compromises between 25 and 50 percent of the total
past and future costs (whereby Headquarters consultation was
retained), or if the settlement compromises greater than 50
percent of the total past and future costs (whereby Headquarters
concurrence was retained).
The present worth of the remedial action selected in the Record
of Decision ("ROD") for the Site is projected to be about $9.9
million. Additionally, in the proposed settlement the Agency
will be repaid 100% of its direct and indirect past response
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costs of $544,199.22, and 100% of any future response and
oversight costs. In this instance, therefore, any Headquarters
consultation or concurrence authorities that may have been
conditionally retained as described above are not applicable, and
the Regional Administrator is therefore authorized to exercise
Agency concurrence in the settlement.
Further, the proposed settlement is in accordance with the terms
of the June 21, 1991, Memorandum from Ludwiszewski, Clay, and
Stewart to Regional Administrators transmitting the interim final
Model CERCLA RD/RA Consent Decree. During the negotiations with
the Settlor, the Region did not offer or agree to any offers that
would change any of the provisions of the Model Consent Decree
that embody issues of national significance. As a consequence,
the proposed settlement is not expected to result in any
significant deviations from national policy.
HIGHLIGHTS OF THE REMEDIAL ACTION
The remedial action, as contained in the Record of Decision
("ROD") for Operable Unit #1 (OU #1) and contemplated in the
proposed Consent Decree ("CD") and associated Statement of Work
("SOW"), is intended to be the final remedy at this Site. The
remedial action addresses source areas, surface water, and
groundwater at the Site; it emphasizes source control as the key_
component toward the prevention of future surface or groundwater
contaminat ion.
A prior remedial action at the Site was undertaken as Operable
Unit #2 ("OU #2"), and enumerated in an interim action ROD
("IROD") signed by EPA on,June 27, 1991. Under the remedial
action selected for OU #2, use of seven (7) private wells
immediately downgradient of the Site was to be replaced by access
to the municipal water system. On September 23, 1991, Hercules
agreed to carry out the interim action remedy in a CD entered on
May 8, 1992, and on March 10, 1993, EPA issued a Certification of
Completion of the Work signifying that Hercules had completed the
remedial activities under the IROD. No other operable units have
been identified for the Site.
The major components of the selected remedy for OU #1 include:
• Conducting a field-scale treatability study and
implementation of in-situ stabilization of subsurface
soils and consolidated surface soils.
• Implementation of an ex-situ chemical extraction
technology on the soils and sludges at the Site if the
treatability study fails to meet the required
standards.
• Construction of a cover over the treated soils to
reduce rainwater infiltration and direct contact with
the treated soil.
• Long-term monitoring of groundwater, surface water, and
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sediment in an onsite pond and adjacent drainage ditch,
with the contingency implementation of a pump and treat
system.
• Operation and maintenance of the cover for no less than
thirty years.
• Institutional controls for restrictions on land and
groundwater use.
RD/RA NEGOTIATIONS
In accordance with CERCLA Section 122(a) authority, on
April 28, 1993, a discretionary thirty (30) day negotiation
moratorium on response actions was initiated when the Region
issued a Notice Letter to the PRP. (A CERCLA Section 122(e)
Special Notice Letter was not issued because only a single PRP,
Hercules, is associated with the Site.) Before the expiration
date of the Region's 30 day moratorium, Hercules submitted a
response deemed by the Region to constitute a good faith offer to
conduct or finance the RD/RA. Accordingly, the Agency extended
the moratorium a further sixty (60) days, during which time
Agency and Department of Justice ("DOJ") personnel met with-
representatives of Hercules to negotiate an acceptable Consent
Decree. Following several conference calls, and on the final day
of the moratorium, the participants reached a settlement in
principle on August 6, 1993, when the Region received a signed
signature page from Hercules.
Negotiations focused principally on technical issues concerning
implementation of the SOW and how Hercules might conduct the
treatability study. In addition, Hercules challenged the
accuracy of the Region's cost documentation, as well as the
government's statutory authority to collect prejudgment interest
calculated from the latter of the date of the expenditures or the
date of the first of two demand letters. The technical issues
were fully resolved by agreement, and Hercules acceded to the
government's position on costs and prejudgment interest.
TERMS OF THE SETTLEMENT
The proposed settlement requires reimbursement of costs incurred
by the government for response actions at the Site, together with
accrued interest and performance of studies and response work by
the Defendants at the Site consistent with the National
Contingency Plan ("NCP"). There will be no pollution prevention
or mitigation projects. Within 30 days of the effective date of
the Consent Decree, Hercules will pay $544,199.22 to the
Government in reimbursement of pre-January 6, 1993, response
costs and prejudgment interest associated therewith. Hercules
will also pay costs incurred in connection with the Site between
January 6, 1993, and the date of entry of the Consent Decree,
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plus interest on response costs from January 6, 1993, to the date
of payment of the past response costs. Finally, Hercules will
reimburse the Government for all future response costs incurred
by the United States that are not inconsistent with the NCP.
Within ten (10) days of lodging of the Consent Decree, Hercules
must notify EPA of the contractor it proposes to be the
Supervising Contractor. Within forty five (45) days after
lodging of the Consent Decree, the Settlor will submit to EPA a
Treatability Study Work Plan to determine if the selected remedy
will attain all Performance Standards. This Work Plan will
include a schedule for the submittal of the Treatability Study
Final Report and the other Remedial Design deliverables. The
Remedial Design Work Plan will provide for design of the remedy
set forth in the ROD in accordance with the Statement of Work
and, upon its approval by EPA, shall be incorporated into and
become enforceable under the Consent Decree.
The total present worth for the entire remedial action is
expected to be $9.9 million. The remedial activity for the Site
consists of the treatment of affected surface soil and sludge in
place by in-situ stabilization. Subsurface solids and
consolidated surface soil will be treated in place within the
landfill. To reduce infiltration by rainwater and direct contact
with the treated soil, a multimedia cap will be placed over the
consolidated, stabilized soil. Treatment involves the use of
hollow-stem augers to drill into the affected solids. By this
means solidification reagents are delivered to the affected
solids during a mixing operation. A solidification/stabilization
of manufactured pesticides represents an innovative application
of this technology, and will therefore be evaluated during the
treatability studies for these wastes. If the stabilization
process fails, under the ROD, ex-situ chemical extraction will
then be used to treat the wastes.
Currently, only a monitoring of onsite groundwater and surface
water is proposed for the longterm. This is because only a
single onsite well currently indicates toxaphene contamination
above MCLs. However, a pump and treat system is to be
implemented if the levels of the contaminants of concern appear
to be migrating offsite, or if onsite levels do not diminish over
time to a point below MCLs.
SITE HISTORY
Located within the northern seven (7) acres of the Site are six
(6) disposal cells containing an estimated thirty-three thousand
(33,000) cubic yards of toxaphene sludge. A drainage ditch runs
along the northeastern edge of the Site. About midway through
the Site the drainage ditch curves away from the Site, and then
travels past an elementary school eventually emptying into a
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tidal marsh. The Site is fenced and has an entrance through a
locked gate.
The Site was constructed in what had been a gravel "borrow pit."
This borrow pit had been formed during local construction of
Georgia Highway 25. Reportedly, the bottoms and sides of the
disposal cells were lined by a one foot bentonite clay and soil
mixture when the Site was constructed. The landfill was
primarily filled with toxaphene sludge, but contaminated soil,
empty toxaphene product drums, other process sludges, glass,
rubble, and trash are also believed to be contained in the
landfill.
The Site is solely owned by Hercules. The disposal and release
of hazardous substances occurred after Hercules purchased the
property. As it has since 1920, Hercules operates a
manufacturing facility located about three (3) miles from the
Site in Brunswick, Georgia. One of the industrial chemicals
manufactured by Hercules was-the pesticide toxaphene. As a
result of the texaphene-manufacturing process, Hercules generated
a wastewater sludge containing toxaphene ("toxaphene sludge").
In January, 1974, Hercules began negotiations with the Georgia
Department of Natural Resources, Environmental Protection
Division ("GaEPD") for a solid waste permit to dispose of
toxaphene sludge. The Site was permitted by the GaEPD in 1975 to
receive the toxaphene sludge for disposal, and in that year
Hercules began operating the Site for the disposal of toxaphene
sludge.
In 1979, as a result of a routine GaEPD inspection, elevated
levels of toxaphene were detected in sediment and surface water
samples collected in the drainage ditch adjacent to the Site.
Hercules' operating permit was revoked in July 1980. All of the
cells at the Site were closed by Hercules in accordance with a
GaEPD Solid Waste Permit. The closed cells were covered with
"stump dirt" and seeded with grass.
In 1983, the GaEPD requested that Hercules install a groundwater
monitoring system at the Site. One (1) deep well and five (5)
shallow wells were installed to assess groundwater contamination
originating at the Site, and to determine the direction and rate
of groundwater flow in the surficial aquifer. Because toxaphene
was found in the deep well, four (4) additional deep wells were
installed in 1984 to further characterize groundwater
contamination at the Site. Toxaphene concentrations in excess of
the drinking water standard were identified in one well cluster
comprising both deep and shallow wells penetrating the aquifer
beneath the Site. Sampling indicated toxaphene contamination
above MCL in only one shallow well at the Site.
The Site was proposed for inclusion on the National Priorities
List ("NPL") in September 1983, and finalized for inclusion in
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September 1984. Initial remedial activities were performed by
GaEPD; EPA assumed the role of lead agency in 1987. In an
Administrative Order by Consent dated July 15, 1988, Hercules
consented to conduct, under the oversight of EPA, a Remedial
Investigation/Feasibility Study CRI/FS"). Because contaminated
groundwater posed an immediate threat, EPA decided to organize
the work at the Site into two (2) operable units.
SETTLEMENT CRITERIA
TEN POINT ANALYSIS
1. Volume of Waste Contributed to the Site bv each PRP
There is only a single PRP, and no volumetric analysis was
conducted- The waste at the Site consists primarily of toxaphene
sludge deposited only by Hercules under State permit, but
Hercules may also have deposited other wastes associated with its
toxaphene manufacturing process. In any event, 100% of the
wastes at the Site (which is owned by Hercules) was contributed
by Hercules.
2. Nature of Waste Contributed
The waste at the Site is a toxaphene wastewater sludge, and other
associated wastes, that resulted from the toxaphene manufacturing
process conducted by Hercules at it Brunswick, Georgia facility.
3. Strength of Evidence Tracing the Waste at the Site to the
Settling Party
There is no question that the waste at the Site is attributable
to Hercules; Hercules has never denied liability or
responsibility as the owner/operator of the landfill. Shortly
after Hercules submitted an application, on August 4, 1975, the
Georgia Department of Natural Resources ("GaDNR") issued Permit
No. 063-003D(SL)H to Hercules for the operation of a "Sanitary
Landfill (Hazardous Wastes - Toxaphene)." After GaDNR required
closure of the landfill, on September 15, 1980, Hercules
submitted to GaDNR a report detailing the "closure, monitoring
and contingency plans for the now-closed toxaphene landfill."
4. Ability of the Settling Party to Pay
The estimated amount of the remedial action is $9.9 million. If
the ex-situ remedy is necessary, the remedial action might amount
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to $30 million. The Settlor is a major industrial conglomerate,
with sales of roughly $4.0 billion per year. As a consequence,
it is likely that Hercules has sufficient unencumbered assets to
pay for the cleanup, if indeed it does not also have the capacity
to finance the ongoing remedial activity from current earnings.
5. Litigation Risks in Proceeding to Trial
The proposed settlement provides 100 percent relief to be
obtained from Hercules as the sole PRP at the Site. As a
consequence, there are neither any nonsettlors to pursue, nor any
reason to proceed to trial. Nevertheless, if trial is deemed
necessary to establish liability, the evidence against Hercules
appears sufficient, in terms of both adequacy and admissibility,
for summary judgment.
6. Public Interest Considerations
Although found principally at the local community level, public
interest in the remedy and its selection process has been intense
and vocal. Over a period of years, several individuals, their
families living near the Site, and community organizers, have
vigorously asserted that many of the ailments suffered by
Brunswick residents are the direct consequence of exposure to
toxaphene. The remedial alternatives contained in the Proposed
Plan for the Site were closely scrutinized by various community
organizations, with large turnouts at public meetings, a well
orchestrated letter-writing campaign, and liberal utilization of
congressional contacts. There appears to be at least two broad
objectives of the organized efforts: One goal is EPA involvement
in the elimination of any vestige of toxaphene exposure in the
Brunswick area that may have been produced by the Site, or
produced by the Hercules manufacturing plant located in
Brunswick. The second objective appears to be Government
sponsorship of medical research to identify a causal relationship
of various individuals' medical ailments to the production and/or
disposal of toxaphene in Brunswick by Hercules. To date,
however, no assertions of environmental inequity have been noted
in published articles or documents submitted to the Agency.
This breadth and level of public interest has caused Hercules to
express a private concern for the likelihood of a toxic tort suit
by various citizens of Brunswick, and may have been an important
factor in Hercules' willingness to enter into the proposed
settlement. However, during the remedy selection process the
most vocal community activists were not entirely consistent in
their apparent objectives. As a consequence, there is a
possibility that these individuals or groups may utilize the
CERCLA Section 122(d)(2)(B) public participation provisions for a
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proposed judgment to advance certain private objections to the
scope and extent of the remedy selected by EPA.
7. Precedential Value
The facta of this case do not present any issues of precedential
value. The case does not present a factual scenario for the
establishment of a favorable precedent for future government
action, and the structure and nature of the proposed settlement
are consistent with all established national and regional
policies. The basis for the proposed Consent Decree was the
Model RD/RA Consent Decree, and no substantive changes were made
to those provisions of the Model Consent Decree that embody
issues of national significance.
8. Value of Obtaining a Present Sum Certain
This settlement obtains a full recovery of past costs, both
direct and indirect, and Hercules has agreed to pay for all
future costs associated with the Site not inconsistent with-the
NCP. Any judgment of liability in the future could achieve no
better results, and would be accomplished only after expending
considerable time and Fund resources.
9. Inequities and Aggravating Factors
None.
10. Nature of the Case After Settlement
This settlement will resolve all matters concerning the Site
relating to the remedial action, as well as all past and future
response and oversight costs associated with the Site. The
Region has identified no PRP at the Site other than Hercules, and
there is no work to be performed at the Site currently
foreseeable other than that covered by the Consent Decree and the
associated Statement of Work.
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Cardinal'
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ENFORCEMENT CONFIDENTIAL
ATTORNEY WORK PRODUCT
TEN POINT SETTLEMENT ANALYSIS
BLUFF ROAD SUPERFUND SITE
COLUMBIA. RICHLAND COUNTY. SOUTH CAROLINA
I. OVERVIEW
Region IV proposes to enter into a consent decree under
Sections 106 and 107 of CERCLA for the Bluff Road Superfund Site,
Columbia, Richland County, South Carolina {the "Site"), which
provides for (1) the performance and funding of a complete
remedial design/remedial action ("RD/RA") of the remedy selected
in the Record of Decision (the "ROD"); (2) the payment of 99.30%
of past costs incurred by the United States Environmental
Protection Agency. ("EPA"); and (3) the payment of 100% of future
costs to be incurred by EPA in implementing the remedy selected
in the ROD. The total settlement value is $8,505,084.78, which
includes a present value of $5,574,984 for the estimated costs of
the RD/RA; $625,475 for the estimated costs for EPA future
oversight; $1,348,934.34 for the Orphans' Share of the
unreimbursed past response costs and RD/RA costs; and $955,694.33
for unreimbursed past costs incurred by EPA, and interest
thereon. This Consent Decree is referred to as Consent Decree
Number 1.
The Region is presently negotiating a second consent decree
for the Site (Consent Decree Number 2), to memorialize the terms
of an Administrative Order On Consent dated April 21, 1988,
("AOC") under which forty four (44) Potentially Responsible
Parties ("PRPs") known as the "Bluff Road Group" are obligated to
pay 51.96% of the costs of the RD/RA, less their approved credit
for the Remedial Investigation and Feasibility Study ("RI/FS").
While this ten-point settlement analysis only addresses Consent
Decree Number 1, to present the complete settlement for the Site,
the terms of the AOC are discussed in this analysis where
relevant.
The issues of national significance in Consent Decree
Number 1 are in Sections V (General Provisions), IX (U.S. EPA
Periodic Review To Assure Protection Of Human Health And
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2
Environment), X (Additional Work) and XXIV (Covenants Not To Sue
By plaintiff). Following several telephone conferences with
Bruce Diamond,, Director of the Office of Waste Programs
Enforcement, and with Scott Fulton and William White of the
Office of Enforcement concerning this settlement, EPA
Headquarters concurred with the language in Sections V, IX, X and
XXIV of Consent Decree Number 1. For a more detailed explanation
of the issues of national significance, please refer to the
memorandum from John R. Barker to Bruce M. Diamond and Raymond B.
Ludwiszewski attached hereto as Appendix 2.
This memorandum recommends EPA's acceptance of the Consent
Decree. Because this settlement has issues of national
significance, this memorandum sets forth the terms of the
settlement, background of the Site, and assesses the ten point
criteria in the Interim CERCLA Settlement Policy announced as
part of EPA's Hazardous Waste Enforcement Policy, 50 Fed. Reg.
5034 (Feb. 5, 1985).
II. TERMS
A. Settlement Costs
Under the terms of this settlement, EPA will recover
past costs and future costs totaling approximately $8,505,084.78.
This total represents the following costst
Total Unreimbursed Past Response Costs...... $955,694.44
This total represents 99.30% of the past costs incurred
by EPA from 1986 through February 28, 1991. This total
includes interest that has been calculated from
September 26, 1990, the date on which EPA demanded
payment, through February 28, 1991.
Estimated RD/RA Cost $6,200,456.00
This total represents the estimated costs to perform
the remedy set out in the ROD, which are $5,574,984.00,
plus the estimated future oversight costs, which are
$625,472.00.
Orphans * share of the Unreimbursed. $1,348,934.34
Past Response Costs and Estimated RD/BA CPPM
This total represents 18.85% of the estimated RD/RA
costs and the unreimbursed past cost. The 18.85%
figure represents the percentage of PRPs who were sent
special notice letters, but are ho longer in business,
bankrupt or who are no longer considered PRPs for the
Site.
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B. Settling Defendants
The PRPa participating in the settlement in Consent Decree
Number 1 are divided into two groups, the Cash-Out Settlors and
the Performing Settlors. The payment for the PRPs within each of
these groups is as follows*
1. Cash-Out Settlors
The Cash-Out Settlors, consisting of twenty-seven (27) PRPs,
including the Federal Settling Agencies, will pay EPA a share of
the above costs based on the volumetric share of waste that each
contributed to the Site. Their volumetric share is based on a
volumetric ranking prepared by EPA in 1981.
EPA will receive a total of $617,632.71 from the Cash-Out
Settlors. Of that amount, the Cash-Out Settlors will pay
$136,634.87 of the past costs, $53,070.39 of the Orphans' Share
of past costs, and $427,927.45 of the RD/RA costs. Attached
hereto as Appendix 3 is the Statement and Calculation of Cash-Out
Payments explaining how each Cash-Out Settlor's payment was
calculated.
The Region applied a premium of 100% to each Cash-Out
Settlors volumetric share of estimated RD/RA Costs to ensure
coverage of contingent future costs. The premium added to the
Cash-Out Settlor'8 share of the estimated RD/RA costs doubles the
Cash-Out Settlor's payment towards estimated RD/RA costs.
The Region chose the 100% premium because the Region
believes that the cost estimates for the RD/RA, and EPA oversight
(which are included in the estimated RD/RA) are reliable and the
coats are unlikely to increase. Prior to proposing the
settlement the Region discussed the premium with the Office of
Enforcement and its appropriateness under the Guidance on Premium
Payments in CERCLA Settlements.
2. Performing Settlors
The Performing Settlors (Allied-Signal Inc., EM Industries
Inc. and Monsanto Company) will perform the RD/RA. The total
value of the Performing Settlors' settlement is $7,887,452.07.
This total represents $765,988.74 of the past costs,
$1,295,863.95 of the Orphans' Share of past costs and
$5,772,528.55 of the estimated RD/RA coats. In addition, the
Performing Settlors will pay costs for the performance of the
RD/RA for the remedy in the ROD that may exceed the costs that
EPA estimated as the RD/RA costs.
The Cash-Out Settlors' share combined with the Performing
Settlors' share will give EPA 100% recovery of the RD/RA costs
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4
and 99.30% recovery of past coats. The parties to Consent Decree
Number 1 and the parties to the AOC will pay their respective
shares of the past and future cost into a trust fund established
by the Performing Settlors.
III. BACKGROUND
A. General Description of the Site
The Bluff Road Superfund Site is located on a four acre
parcel in Columbia, Richland County, South Carolina. The Site is
bordered on the east side by Bluff Road(Highway 48), and is
located 10 miles south of the City of Columbia. The Congaree
River is approximately four miles south of the Site. The
surrounding and adjacent properties are Wooded rural areas. The
nearest residences are approximately one mile from the Site. Host
of the nearby property and rear portions of the Site have been
classified by the Corps of Engineers as wetlands. A map of the
Site is attached hereto as Appendix 4.
The Site was first reportedly used as an acetylene gas
manufacturing facility. Specific dates and details regarding the
facility's operations are not available. Two lagoons were
constructed at the north end of the Site to support the acetylene
manufacture. In 1973 Columbia Organic Chemical Company ("COCC")
began using the Site as a storage facility for solid and
hazardous wastes, without a State permit "-for chemical waste
storage and treatment. In 1976, COCC, while continuing to store
hazardous waste on the Site, began a recycling facility on the
Site under the name of South Carolina Recycling and Disposal,
Inc. ("SCRDI"). COCC and SCRDI were essentially;the same
operation. Between 1976 and 1980 SCRDI deposited more than 7,500
fifty-five gallon drums and other containers of chemical waste on
the Site. The chemical wastes included 1,1,1-Trichloroethane,
acetone, phenol, cresol (methyl phenol), chlorophenol, and
2,4-dichlorophenol. The deterioration of many of the drums
resulted in chemical wastes leaking into the soil and groundwater
as well as the generation of noxious fumes, fires and explosions.
B. Response Actions at the Site
SCRDI continued to operate the Site, without a State permit,
until 1980. In 1980 the Site was closed after a groundwater
investigation conducted by SCDHBC and EPA revealed^ that the soils
and groundwaterwas contaminated. The Site was subsequently
listed on the National Priorities List, in October 1981, with a
ranking of 83. The State of South Carolina listed the Site as a
top priority.
On July 7, 1980, the United States filed a complaint against
SCRDI, COCC and Oscar Sidenberg, who was the owner of the
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property on which the Site is located, pursuant to Section 7003
of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
S 6973, seeking injunctive relief to abate an imminent and
substantial endangerment resulting from the handling, storage,
and disposal of hazardous wastes at the Site and seeking
reimbursement of costs.
EPA subsequently identified 25 PRP generators who were
responsible for 90% o£ waste at the Site by volume. On
August 4, 1982, the United States filed an Amended and
Supplemental Complaint pursuant to Section 106 and 107 of CERCLA,
42 U.S.C. SS 9606 and 9607, seeking the same relief and naming
the 25 additional PRPs as defendants. Thirteen of the 25 PRP
generators agreed to perform and/or fund 75% of surface cleanup
at the Site under a consent decree.
A second amended complaint was filed in 1982 to limit the
removal action to the surface cleanup, and to name five PRP
generators who were not parties to the consent decree as
defendants. SCHDEC completed the remaining 25% of the removal
under a State Cooperative Agreement whereby SCDHEC was awarded a
federal grant by the United States to complete the removal,. Over
7,500 drums were removed from the Site for disposal, visibly
contaminated soil and all above ground structures were removed
from the Site.
In 1984, SCDHEC began a Remedial Investigation/Feasibility
Study (RI/FS) to determine the type, extent, and degree of soil
and groundwater contamination on and around the Site. The RI/FS
became a federal fund lead when SCDHEC utilized all of their
funding. EPA then ordered certain PRPs to perform the RI/FS. On
April 21, 1988, the United States entered into the AOC with the
Bluff Road Group under which the Bluff Road. Group performed the
RI/FS and became obligated to pay 51.96% of the RD/RA costs, less
their approved RI/FS costs.
The RI/FS was completed in June 1989. The findings of the
RI are set forth in detail in the Super fund Remedial
Investigation Fact Sheet attached hereto as Appendix 5 (Pg. 2).
A summary of the FS is set forth in detail in the Superfund
Proposed Plan Fact Sheet attached hereto as Appendix 6 (pga.
3-7).
EPA issued its Record of Decision ("ROD") for the Site in
September 1990. The selected remedv for the Site consists of the
following activities!
1. Extraction and on-site treatment by air stripping of
contaminated groundwater;
2. In-situ soil vacuum extraction of contaminated soils;
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3. Monitoring; and
4. Subsurface injection of treated water.
Specifically, the present worth of the Air Stripping
alternative is approximately $4,339,500. This cost includes a
capital cost of $1,012,000 for construction of the groundwater
extraction system, the treatment units, a treated water discharge
system, and all associated piping. This cost also includes
annual expenditures for operation and upkeep of the system of
$306,875. The total of the annual costs over 16 years, using a
5% discount rate is $3,326,500.
The present worth cost of the infiltration gallery/
reinjection discharge alternative is approximately $165,484. The
estimated total cost for the soil vacuum extraction system with
vapor phase carbon adsorption is approximately $1,070,000. This
capital cost includes the anticipated O&M expenditures since this
remedial action is not expected to last over two years. Capital
cost include construction of the soil vapor extraction system,
vapor treatment system, and all associated piping/mechanical
facilities.
C. Enforcement History
In May 1987, the Region issued special notice letters to all
PRPs listed on Appendix 7, offering them the opportunity to
perform, finance or otherwise participate in the RI/FS. The PRPs
named in the AQC, attached hereto as Appendix 8, performed the
RI/FS.
In 1987 the United States filed suit against Allied-Signal
Inc., EM industries Inc. and Monsanto Company and other PRPs for
the Site in the United States District Court for the District of
South Carolina (Case Number 3:80-1247-6), to recover the past
costs incurred by EPA in conducting the 1982-83 removal at the
Site. SCDHEC intervened in the suit to recover the costs that
the State incurred in performing the- removal. On September 23,
1986, a judgment was entered in favor of the United States and
SCDHEC whereby the PRPs named in the complaint were found liable
for the surficial cleanup and all past cost incurred by EPA prior
to June 1986. Presently the District Court is determining if the
United States will be awarded prejudgment interest.
On September 21/ 1990, the Region issued special notice
letters to all PRPs listed on Appendix 9, offering them the
opportunity to perform, finance or otherwise participate in the
RD/RA. The Region received good faith offers from all of the
PRPs listed on Appendix 9 except for the PRPs identified by an
"R," Due to the number of PRPs identified for this Site and the
complexity of the issues regarding this Site, the Region formally
requested an extension of time from EPA Headquarters to complete
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the RD/RA negotiations. As of September 10/ 1991, all PRPs to
the settlement have executed the attached consent decree.
D. PRP Analysis
1. Owners/Operators
The property on which the Site is located is presently owned
by Fred Sidenberg and Horace Hutchinson. COCC and SCRDI are the
only operators a:t the Site that EPA considers PRPs. COCC is no
longer in business. SCRDI is in the process of filing
bankruptcy. Neither the owners or operators of the Site have
ever expressed any serious interest in performing the RD/RA or
shown that they have the ability to perform or finance the RD/RA.
2. Generators
The remaining PRPs for this Site are generators from the
Columbia/ South Carolina area. Region IV identified
approximately 113 PRPs after analyzing the invoices and receipts
obtained from SCROI's and COCC's files, and taking testimony from
Max Gergel/ James McClure and other employees of SCROI and COCC.
Many of the COCC and SCROI receipts and invoices name the"
generator who sent the waste to the Site; state the amount of
waste that the generator sent to the Site; and describe the waste
that SCROI received. Based on the information in the receipts,
invoices, and the testimony of employees of COCC and SCROI, the
Region sent 104(e) Information Request letters to the PRPs, and
accumulated additional evidence linking the PRPs to the Site.
3. Transporter
The Region has not identified any transporters that are
PRPs.
4. PRPs Not Party To The Consent Decree
Appendix 9 hereto identifies all of the PRPs for the Site
according to the following groups:
1. B - The Bluff Road Group;
2. D - The Cash-Out Settlors;
3. P ¦ The Federal Settlors;
4. M » The Performing Settlors;
5. O = Orphans;
6. R » Recalcitrant;
7. X » Companies that have been released as PRPs.
8. * • Company that filed bankruptcy and paid EPA
a sum as settlement of its liability.
9. - = These PRPs contributed such a small amount
of waste to the Site that the computer was
unable to give the PRPs a percentage number for
the amount of waste that they contributed.
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8
Region XV rounded the percentage to 0.01% Both
PRPs participated as Cash-Out Settlors.
The groups identified with an 0, R, X, B, and * represent
the PRPs who did not participate in this settlement. The PRPs
listed in groups identified with a or "B" have already
settled their liability to the United States. Group "X"
represents the ten companies that the Region released as PRPs for
this Site after the companies presented evidence proving to the
Region that the companies should not be considered PRPs. The
Region discussed releasing the PRPs with the Office of
Enforcement and the Department of Justice prior to releasing the
companies as PRPs.
Group "R" represents the 19 PRPs that the Region identified
as recalcitrant. These PRPs are considered recalcitrant as
opposed to orphans because the Region believes that these PRPs
are in business and received specialsnotice letters, but these
PRPs did not send EPA good faith offers to participate in RD/RA
settlement negotiations.
IV. Ten-Point Settlement Analysis
A. Volume of Wastes Attributable to Each PRE
The volumetric ranking prepared by Region IV in 1981 states
the amount of waste that each of the PRPs contributed at the
Site, with the exception of SCDHEC. EPA was not aware that
SCDHEC was a PRP until after the ranking was prepared and
subsequently ranked SCDHEC's share of waste contributed to the
Site. A copy of the volumetric ranking is attached as
Appendix 10. The liability of each Cash-Out Settlor, including
SCDHEC is based on the volumetric ranking prepared by EPA.
B. Nature of the Wastes Contributed
The principle threat posed by the Site are volatile and
semi-volatile organic compounds in the groundwater and the soil,
contaminating the surficial aquifer.
C. Strength of Evidence Tracing the Wastes at the Site to
the Settling Parties
Proving the Cash-Out Settlor's liability for the Site is
problematic. The primary evidence that the Region will rely upon
to prove each PRP'8 liability for the Site are receipts and
invoices that the Region obtained from COCC and SCRDI in.the
early 1980s. These receipts are old and many are illegible. Few
of the receipts and. invoices contain all of the details about the
business transactions between the PRPs and COCC and/or SCRDI that
are needed to prove that the PRP's liability (i.e. the type of
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9
waste that the PRP sent to the Site; if the waste was actually
received by COCC or SCRDI; names of transporters).
The owners of COCC and SCRDI were unable to independently
recall the names of the generators of the waste or the types of
waste disposed of by there customers at the Site when asked by
the Department of Justice in past depositions. Consequently,
there is little corroborative testimony to prove that many of the
Cash-Out Settlors are PRPs. The Region is not aware of any other
individuals who would have knowledge of the companies that
generated and/or transported the waste to the Site. Due to the
age of the Site, it would be difficult, if not impossible, to
locate additional witnesses at this time who the United States
could rely upon to provide additional evidence of the PRP's
liability. During RD/RA negotiations, the Region was forced to
release ten PRPs who challenged EPA's evidence proving that they
are PRPs for the Site because the evidence as to each PRP was
weak (See Appendix 9, group X).
D. Ability of the Settling Parties to Pav
The Region has no reason to question the Performing,
Settlor's ability to pay their 3hare of the costs or perform the
RD/RA based on Dun and Bradstreet Reports. Due to the small
amount of money that each Cash-Out Settlor is obligated to pay
the United States, the Region has not evaluated each Cash-Out
Settlor's individual ability to pay; however, the Region has no
reason to question the Cash-Out Settlor's ability to pay their
share. Since the PRPs are jointly and severally liable, the
Region would look to the Performing Settlors to pay the share of
any Cash-Out Settlor that did not make its payment to the United
States.
E. Litigation Risks in Proceeding to Trial
The evidence that the Government would rely upon at trial to
prove the Performing Settlors' and the Cash-Out Settlors'
liability presents significant litigation risks. As stated in
Section IV C of this memorandum, the evidence proving that each
Cash-Out Settlor is liable for the Site is weak. The Region also
would need to compile additional evidence to be sure that EPA
could prove the Performing Settlor's liability for the RD/RA.
Due to the limited records on this Site and the age of the Site,
EPA would have a difficult time compiling additional evidence to
prove that the Cash-Out Settlors and the Performing Settlors are
liable for the cleanup of the Site.
F. Public Interest Considerations
This Consent Decree serves the public interest because it
will conserve Government resources and reimburse the fund for
most of the past and future costs.
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10
G. Precedential Value
Although this settlement is consistent with the national
policy of encouraging voluntary action by PRPs, achieving
effective and expedited clean-up, and recovering 99.30% of the
past costs incurred by EPA at this Site, Sections V (General
Provisions), IX (Periodic Review), X (Additional Work), and XXIV
(Covenants Not To Sue By Plaintiffs) of the Consent Oecree
deviate from the National Model RD/RA Consent Oecree. In
Section V, the Performing Settlors have agreed not to contest
future liability as to EPA, for the cleanup of this Site. In
Section X, the Consent Decree provides that the Performing
Settlors are not obligated under this Consent Oecree to perform
additional work if that additional work is required by an
Amendment to the ROD. For further details on the precedential
value see Appendix 2 attached hereto.
H. Value of Obtaining a Present Sum Certain
The settlement value proposed in the Consent Decree
outweighs any benefit that EPA could recover by litigating this
case to recover the additional .70% or $102,463 of past costs hot
recovered in the settlement. Litigation costs would well exceed
$100,000. Further, as stated in sections IV C and E of this
memorandum, the evidence connecting the PRP's to the Site is
weak.
I. Inequities and Aggravating Factors
An aggravating factor in this settlement is the issue of the
nonrecovery of $102,463 or .70% of past costs. This sum
represents the amount that the Region awarded SCQKEC on
June 28, 1991, for costs that SCDHEC incurred during the 1982
surface cleanup under the terms of a State Cooperative Agreement.
Based on a previous audit, EPA had disallowed certain project
costs that SCDHEC sought to recover under the State Cooperative
Agreement; and therefore, the United States did not owe SCDHEC
any sum of money. On July 26, 1990, SCDHEC requested the Region
to reconsider certain disallowed project costs totaling $373,196.
During this review the Region unexpectedly found that
project costs exceeding $373,196 had been incorrectly disallowed
by the Region in a previous audit. The Region determined that
the United States actually owes SCDHEC $102,463. A copy pf the
letter to SCDHEC from Region IV explaining the Region's decision
is attached hereto as Appendix 1.
Before the Region's review was complete, the Region and the
PRPs had entered into an agreement whereby the. PRPs agreed to pay
the United States unreimbursed past costs totaling $955,694.33,
which included the $373,196 of the State Cooperative Agreement
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11
that was in dispute. The Region informed the PRPs that the total
of the past costs would not increase. EPA agreed to decrease the
total of past costs if any of the project costs in dispute were
not approved by the Region in its final review. The Region does
not intend to recover the additional costs since this agreement
was made and the PRPs signed the signature pages before the
Region was aware of the additional costs. Nevertheless, the
Region is recovering a premium from the Cash-Out Settlors for the
RD/RA costs, totaling $265,864.54, which actually gives the
United States a settlement value in excess of 100%.
J. Nature of Case that Remains After Settlement
As this is a settlement which recovers 100% of future costs
and 99.30% of past costs, no case remains after entry of Consent
Decree Number 1 with regard to the remedy outlined in the ROD.
If the ROD is amended, and additional work is required, the
Performing Settlors are not required „to perform the Amended ROD
under Consent Decree Number 1, and EPA may be required to
negotiate a new Consent Decree with the Performing Settlors.
However, the issue of the Performing Settlor's liability for the
Site has been resolved in this Consent Decree.
The Region is presently embodying the terms of the AOC into
a judicial consent decree to be filed with the United States
District Court. The only other issue to be resolved is obtaining
long term access to three properties surrounding the Site in
order to perform the remedy.
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INDEX OP APPENDICES
APPENDIX DOCUMENT
1 State Cooperative Agreement
2 Memorandum to Bruce M. Diamond and Raymond Ludwiszewski
3 Statement And Calculation Of Cash-Out Payments
4 Hap
5 Fact Sheet
6 Proposed Plan
7 List of PRPs who received RI/FS Special Notice 1987
8 Administrative Order By Consent dated April 21, 1988
9 List of PRPs according to Groups
10 volumetric Ranking
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a Cardinal9
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^tDsr'>,
^22^ £ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
l«f I #1W'
345 COURTLAND STREET. N.E.
ATLANTA. GEORGIA 30365
Honorable Myles E. Flint
Acting Assistant Attorney General
Environment and Natural Resources Division
U.S. Department of Justice
P.O. Box 7611, Ben Franklin Station
Washington, D.C. 20044
Re: Cost Recovery Consent Decree and Ten Point Settlement
Analysis for the Lees Lane Landfill Site, Louisville, Ky.
United States v. Ben Hardy, et al.. Civil Action No. C-90
0695-L(J)
Dear Mr. Flint:
The purpose of this letter is to transmit the enclosed CERCLA
Section 107 cost recovery consent decree and Ten Point
Settlement Analysis for the Lees Lane Landfill Site in
Louisville, Kentucky. The consent decree has been signed by
Ford Motor Company, Dow Corning Corporation and EPA. Ford and
Dow have each agreed to reimburse EPA $321,000 in settlement of
EPA's complaint against them. This consent decree follows the
1989 consent decree signed by EPA, DOJ and 23 PRPs in which the
PM»s agreed to reimburse EPA a total of $2.4 million. After DOJ
lodged the first Consent Decree in 1990, Ford and Dow filed
motions to intervene. DOJ added Ford and Dow to the complaint
as defendants, and filed a motion to enter the consent decree.
In September 1992, the court issued an Order which denied the
motion to enter and stated that the consent decree would not be
entered unless the government offered to settle with Ford and
Dow using the same cost basis {$3.2 million) used in the first
settlement with the 23 PRPs. Subsequently, the government
reached agreement with Dow and Ford in accordance with the
court's Order. That agreement is reflected in the enclosed
consent decree. James Farrell has been DOJ's lead counsel and
Robert Caplan (404/347-2641, ext. 2239) has represented EPA.
Mr. Farrell has prepared the government's renewed motion to
enter the first decree which will be filed along with the
enclosed consent decree.
Sinc«n§ly yours,
Tobxn
ional A
istrator
Enclosures
Printed on Recycled Paper
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cc: Ray Ludwiszewski, OE
William White, OE
Bruce Diamond, OWPE
Sally Mansbach, OWPE
James Farrell, DOJ
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ENFORCEMENT CONFIDENTIAL
ATTORNEY WORK PRODUCT
ATTORNEY-CLIENT PRIVILEGE
LEES LANE LANDFILL SITE
LOUISVILLE, KENTUCKY
TEN POINT SETTLEMENT ANALYSIS FOR SETTLEMENT
WITH FORD MOTOR COMPANY AND DOW CORNING CORPORATION
Background
The Lees Lane Landfill Site (the Site) sits astride the Ohio
River in Louisville, Kentucky. The Site was operated as a
municipal landfill until it was closed in 1975. Commercial,
industrial and residential waste were disposed in the 53 acre
unlined landfill. The Site was listed on the NPL in 1983. EPA
conducted an RI/FS from 1984 until 1985. In 1986, EPA issued an
Enforcement Decision Document (EDD, the equivalent of a ROD)
requiring capping of hot spot areas, installation of rip-rap
along the river bank, installation of a monitoring well system,
and upgrading of an existing gas venting system. In 1987, after
negotiations with the PRPs for implementation of RD/RA failed,
EPA implemented the remedy selected in the EDD by conducting a
removal action (this was one of Region IV's "removial"
actions.) EPA's response action costs totalled approximately
$3.2 million.
In 1988, EPA issued demand letters to approximately 30 PRPs,
including the owners/operators of the Site, seeking recovery of
its costs. EPA also referred the case to Headquarters and
requested that Headquarters request the Department of Justice to
file a Section 107 cost recovery action. After filing suit, EPA
and DOJ conducted negotiations with the PRPs. In early 1989,
EPA and 23 PRPs signed a consent decree. Unddr the proposed
consent decree, the PRPs were obligated to reimburse EPA a total
of $2.4 million dollars. Because the owners/operators refused
to settle, thei government planned to litigate against them to
recover the remaining $800,000.
However, DOJ-refused to lodge the consent decree because of its
concern that Region IV had exceeded the $2 million limit on
removal actions without having obtained a proper waiver. DOJ
advised the Region that it would.not lodge the decree until
Region IV obtained a retroactive waiver. It took over a year
for this isqjie to be resolved. Finally, Region IV did obtain
the waiver and *D0J lodged the decree. In the interim, EPA
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received evidence that Ford Motor Company ^ and Dow Corning
Corporation were PRPs at the Site. Both companies were notified
about this new evidence and given an opportunity to settle with
EPA. However, the terms of settlement were different than those
offered to the original PRPs due to. the increased costs.
Although DOJ/EPA agreed to settle on the same percentage basis
as it did with the other large volume generators (10 %), the
cost basis was increased due to additional costs which had
accrued after the first settlement was reached. Ford and Dow
insisted that they be offered the exact settlement terms offered
to the original PRPs. The government did not agree to these
terms. Next, DOJ lodged the decree and filed the complaint
against the 23 settling PRPs. Ford and Dow filed a motion to
intervene in order to challenge the consent decree on the
grounds that it did not treat them fairly and that it would
eliminate their contractual indemnification rights against Haste
Management, Inc. (a settling PRP). DOJ amended the complaint
and added Ford and Dow as defendants.
On September 9, 1992, the court issued an Order holding, among
other things, that it would not enter the consent decree with
the 23 PRPs unless and until the government offered Ford and Dow
the same settlement terms offered to the other 23 PRPs. After
several months of additional negotiations, the government agreed
to settle with Ford and Dow on the same basis as it did with the
other PRPs. As a result, Ford and Dow have signed a consent
decree under which each has agreed to pay $321,000. DOJ elected
to use a separate consent decree for Ford and Dow with
essentially the identical terms as the first consent decree,
because it was far easier to proceed this way than to get 23
corporations to sign an amended consent decree. Additionally,
because these consent decrees are for cost recovery only and
require no work, there should be no enforcement problems (i.e.,
no work plains are being submitted, so it is unlikely that
stipulated penalties would be sought).
As a result of these settlements, the total amount recovered by
EPA will be $3.2 million, which covers the costs incurred by EPA
in performing the removal action. However, there are additional
costs (enforcement, interest, indirect costs) totalling
approximately $1 million which have not been recovered. DOJ and
EPA intend to continue the litigation against the three
remaining defendants, owners/operators Ben Hardy, J.H. Realty,
Ford had been identified during EPA's initial PRP search
and was issued.*a demand letter along with the other 29 PRPs.
However, Ford claimed that it had not sent hazardous substances
to the Site. As a result, Ford did not participate in
settlement discussions nor did it sign the original consent
decree. Subsequently, fePA located a truck driver who stated
that he had hauled Ford paint sludge to the Site.
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and the Hofgesang Foundation. Financial records indicate that
Mr. Hardy and Hofgesang Foundation have sufficient assets to
satisfy a $1 million judgment. The evidence against all three
defendants is strong.
Recently, DOJ and EPA have conducted settlement discussions with
the attorney for these three defendants. Based on those
discussions, DOJ/EPA believe that the defendants will submit a
settlement offer in the next few weeks. In the event the offer
is rejected/ the government will vigorously pursue judgment.
These defendants never participated in any settlement
conferences and did not indicate an interest in settling or
discussing the case until they learned that a settlement had
been reached with Ford and Dow. Knowing that the government had
settled with 25 PRPs, the defendants apparently have realized
that they could be held liable for $1 million.
The original consent decree was signed by the 23 PRPs, EPA and
DOJ and was lodged with the court nearly four years ago. As
soon as EPA and DOJ sign the consent decree with Ford and Dow,
DOJ will file a renewed motion to enter the original decree and
the decree with Ford and Dow. The motion also will request the
court to vacate that portion of its September 9, 1992, Order,
which held that EPA was required to settle with Ford and Dow on
the same terms offered to the 23 PRPs.
An analysis of the ten point criteria set forth in the Interim
CERCLA Settlement Policy, announced as part of EPA's Hazardous
Waste Enforcement Policy (50 Fed. Reg. 5034, Feb. 5, 1985), is
presented below.
1. Volume of Waste Contributed bv Ford and Dow
Dow: EPA learned about Dow's involvement at the Lees Lane Site
after Dow had filed a response to a Section 104(e) Information
Request Letter regarding the Tri City Superfund Site in Brooks,
Kentucky. In its response, Dow stated that between 1964 and
1968, waste from Dow's plant in Elizabethtown, Kentucky, were
disposed at the Lees Lane Landfill. Dow stated that it was
unable to furnish any information about the volume of wastes,
but also stated that all of its wastes were sent to Lees Lane.
Dow also stated that its wastes contained various hazardous
substances such as toluene and other solvents. Solvent type
compounds were detected at the Site.
Ford: Although EPA had obtained Site records indicating that
Ford may have sent waste to the Site, Ford contested the
evidence through affidavits. After settlement negotiations had
begun with the 23 PRPs, EPA located a former truck driver who
remembered hauling Ford's paint sludges to the Site. Although
he could not recall the exact quantity of Ford's paint sludge he
had hauled from Ford, reference to the information previously
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submitted by Ford enabled EPA to estimate the volumes of waste
-which may have been generated and sent to the Site.
Based on the estimated volume sent by Ford and Dow, EPA and DOJ
decided to place them in the 10 percent generator category. The
court was concerned not with the volume percentage assigned to
Ford and Dow, but the cost basis the government was using to
calculate Ford and Dow's respective shares. Accordingly, the
government calculated Ford and Dow's share as 10 percent of the
same cost basis used for the 23 PRPs, or $3.21 million. Ford
and Dow have each agreed to the 10 percent designation and to
pay $321,000.
2. Mature of the Waste Contributed
Ford: Ford's paint sludges were generated at its Louisville
plant and typically contained metals (hazardous substances) many
of which were' detected at the Site.
Dow: Dow's plant waste contained hazardous substances including
toluene and other solvents.
3. Strength of Evidence Connecting Ford and Dow and Their Wastes
to the Site
Ford: Ford's plant was located within the general vicinity of
the Site and most industries located near Ford also sent waste
to the Site. The truck driver indicated that he specifically
recalled hauling Ford's paint sludge to the Site. He remembered
how the sludge was stored by Ford, what it looked like and how
it was transferred to his truck. He did have trouble
pinpointing the exact dates, but this is understandable since it
occurred about 20 years ago.
Dow: Dow has admitted sending its wastes to the Site.
4. Ability of Ford and Dow to Pay
Both Ford and Dow are large financially viable companies and can
easily pay their allocated share of $321,000.
5. Litigation Risks in Proceeding to Trial
If the government does not settle now with Ford and Dow, the
court will not enter the consent decree with the other 23 PRPs
meaning that we would have to try the case against all 28 PRPs
in order to recover any of our costs. This would be a lengthy,
costly trial not without litigation risks, i.e., the government
could have evidentiary problems regarding some of the 23
settling PRPs; also, the PRPs might argue that EPA's actions
(performing,a "removial" - implementing the remedy by conducting
a removal action instead of RD/RA) were inconsistent with the
NCP. Aside from the factors listed above, there would be little
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risk from an evidentiary standpoint in proceeding to trial with
respect to Dow. There might be some risk with respect to Ford,
due to the truck driver's inability to pinpoint more details
about Ford's paint sludge. Another "risk" in proceeding to
trial would be the likelihood of invoking the ire of the court
since it has basically told the government that any settlement
must be on the same cost basis offered to the first settlors.
6. Public Interest Considerations
There are probably no tangible public interest considerations
because no one other than the government and the PRPs have shown
any interest in this litigation. Since the cleanup has already
been performed, the main benefit to the public is that the
Super fund will be reimbursed $3.2 million and the government
does not have to spend additional resources in litigation.
7. Precedential Value
The Court's Order could be considered to represent an adverse
precedent in that it could be construed as holding that EPA must
settle with subsequent settlors on the same basis as earlier
settlors. This is contrary to EPA policy and other case law.
For that reason, DO J will move the court to vacate the
objectionable portion of the Order.
8. Value of Obtaining a Present Sum Certain
EPA completed the response action at the Site in 1987. The 23
PRPs agreed to. reimburse EPA $2.4 million in 1989. With Dow and
Ford's agreement to pay a total of $642,000, the total recovery
is approximately $3.2. The government does not intend to reopen
the case against the 23 PRPs since the decree was signed four
years ago. By entering into a settlement with Ford and Dow and
the original 23 PRPs, the government will recover almost 100
percent of its actual response costs. This represents an
excellent settlement at this Site. Most of the remaining costs
are not actual cleanup costs but transactional, legal,
enforcement, indirect and interest costs. The government team
is confident that it will recover a significant portion of these
remaining costs from the non-settling defendants.
9. Inequities and Aggravating Factors
EPA knows of no such factors present in this case.
10. Nature of Case Remaining After Settlement
As explained4previously in this document, after this settlement
is entered, the government will continue to pursue a settlement
and/or judgment against the remaining three owner/operator
defendants for costs not recovered from the 25 settlors. If
settlement is not reached within the next few months, the
government will proceed with additional discovery and the filing
of a motion for summary judgment.
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
UNITED STATES OF AMERICA,
Plaintiff,
v.
BEN HARDY, et al.,
Defendants.
CIVIL ACTION NO.
C-90-0695-L(J)
CONSENT DECREE
I.
BACKGROUND
WHEREAS, the United States of America {"United
States") on behalf of the Administrator of the United States
Environmental Protection Agency ("EPA") filed on January 4, 1991,
an Amended Complaint in this matter pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act, 42
U.S.C. § 9601 et seq.. as amended by the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613
(1986) (hereinafter "CERCLA");
WHEREAS, in response to a release or a substantial
threat of a release of a hazardous substance at or from the Lee's
Lane Landfill ("the Site") in Jefferson County, Kentucky, the EPA
conducted a response action pursuant to Section 104 of CERCLA;
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WHEREAS, EPA haa incurred costs in conducting response
actions at the Site and will continue to incur response costs
with respect to the Site;
WHEREAS, the united States and certain Defendants named
in the Amended Complaint desire to settle this matter;
WHEREAS, the Settling Defendants deny liability for
those matters alleged in the Amended Complaint, and the entry of
this Consent Decree shall not be construed as an admission of
liability by Settling Defendants;
WHEREAS, the Parties recognize, and. the Court by
entering this Consent Decree finds, that implementation of this
Consent Decree vill avoid prolonged and complicated litigation
among the Parties, that entry of this Consent Decree is in the
public interest, and that the past response costs incurred by the
Plaintiff in connection with the Site are consistent with the
National Contingency Plan;
NOW, THEREFORE, it is hereby Ordered, Adjudged, and
Decreed:
II.
JURISDICTION
This Court has jurisdiction over the subject natter of
these actions pursuant to 28 U.S.C. §S 1331 and 1345, 42 U.S.C.
SS 9607 and 9613(b). This Court also has personal- jurisdiction
over the settling Defendants who, for purposes of this Consent
Decree, waive all objections and defenses that they may have to
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jurisdiction of the Court or to venue in this District. Settling
Defendants shall not challenge this Court's jurisdiction to enter
and enforce this Consent De&ree.
III.
PARTIES BOUND
The Consent Decree applies to and is binding upon the
United States and upon the Settling Defendants, their employees
and officers and their successors, assigns, contractors, and
agents. Any change in ownership or corporate status of a
Settling Defendant shall in no way alter such Settling
Defendant's responsibility under this Decree.
Iv-
DEFINITIONS
Unless noted to the contrary, the terms of this Consent
Decree shall have the same meaning as terms defined in CERCLA.
Whenever the following terms are used in this Consent Decree and
the Appendices attached hereto, the following definitions
specified in this Paragraph shall apply:
A. "CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. §§ 9601 et seq.
Br "EPA" means the United States Environmental
Protection Agency.
C. "Future Response Costs" means any Response Costs
which may be incurred by the Plaintiff in relation to the Site
following lodging of this Consent Decree.
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D. "MSD" means the Louisville and Jefferson County
Metropolitan Sewer District.
E. "National Contingency Plan" or "NCP" means the
National Contingency Plan promulgated pursuant to Section 105 of
CERCLA, 42 U.S.C. § 9605, codified at 40 C.F.R. Part 300,
including any amendments thereto.
F. "Parties" means the United States of America and
the Settling Defendants.
G. "Past Response costs" means all Response Costs
incurred by the Plaintiff in connection with the Site prior to
lodging of this Consent Decree.
H. "Plaintiff" means the United States of America.
I. "Response Costs" means any costs incurred by
Plaintiff pursuant to Section 104 of CERCLA, 42 U.S.C. § 9604.
J. "Settling Defendants" means those Defendants who
sign this Consent Decree, and their successors and assigns.
K. "Site" means the "facility" as that term is
defined in Section 101(9) of CERCLA, 42 U.S.C. § 9601(9),
encompassing the property commonly know as Lee's Lane Landfill,
where hazardous substances have been disposed of and otherwise
have come to be located. The Site is located approximately 4.4
miles southwest of Louisville, Kentucky, in Jefferson County, and
is adjacent to the Ohio River.
L. "United States" means the United States of America
and its departments and agencies, including the United States
Environmental Protection Agency.
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REIMBURSEMENT OF RESPONSE COSTS
1. Settling Defendants agree to reimburse the Plaintiff as
provided herein for Past Response costs, within thirty (30) days
of the entry of this Consent Decree, Settling Defendants shall
pay to EPA the dollar amounts specified below in the form of a
certified check or checks made payable to "EPA Hazardous
Substance Superfund," and marked as relating to the Site, the
civil action number of this matter, and the Department of Justice
File No. 90-11-3-215, in reimbursement of Response Costs incurred
by the United States:
Settling Defendant Amount Due
Ford Motor Company $321,000
Dow Corning Corporation $321,000
The certified check(s) shall be forwarded to EPA-Region IV,
Attention: Superfund Accounting, P.O. Box 100142, Atlanta,
Georgia, 30384. Copies of the check(s) and any transmittal
letter(s) shall be sent to the United States.
VI ~
STIPULATED PENALTIES AND INTEREST
2. If any Settling Defendant fails to comply with any
requirement applicable to it in this Consent Decree, such
Settling Defendant shall pay to EPA stipulated penalties in the
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following amounts for each day of each and every violation of
said requirements:
Period of Delay Penalty Per Violation Per Dav
1st through 14th day $ 3,000
15th through 30th day $ 6,000
Beyond 30 days $10,000
3. Except as otherwise provided in this Paragraph 3,
stipulated penalties shall begin to accrue on the day that
noncompliance occurs or on the day following the date that
payment is due pursuant to Paragraph 1, and shall continue to
accrue through the final day of correction of the noncompliance
or the day that payment is received by EPA. With respect to any
violation of Paragraph 14, stipulated penalties shall begin to
accrue upon notification by the United States or EPA of
noncompliance. Separate penalties shall accrue for each separate
violation of this Consent Decree.
4.a. All penalties due to EPA under this Section shall be
payable within thirty (30) days of receipt by the Settling
Defendant of notification of noncompliance. Interest shall begin
to accrue on the unpaid penalty balance at the end of the thirty-
day period, at the rate specified in Subparagraph 4(c) below. A
handling charge shall be assessed at the end of each thirty-day
late period, and a six (6) percent per annum penalty charge shall
be assessed if the penalty is not paid within ninety (90) days
after it is due.
b. With respect to any outstanding payment obligation
under Paragraph 1, Section V, except as otherwise specified
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therein, interest shall accrue on the outstanding obligation
beginning oh the day after payment is due at the rate specified
in Subparagraph 4(c) below. The interest due under this
Subparagraph shall be in addition to any interest or charges
assessed under Subparagraph 4(a).
c. All interest payable pursuant to this Consent
Decree shall accrue at the rate equal to the yield fixed in the
52-week U.S. Treasury MK Bills purchased by the U.S. Treasury
Department for investment of Superfund monies in September for
the applicable fiscal year. For fiscal year 1989 (October 1,
1988, to September 20, 1989), the interest rate shall be 8.39%.
Interest shall be compounded annually on October 1.
5. Stipulated penalties due to EPA shall be paid by
certified check made payable to "EPA Hazardous Substance
Superfund" and shall be mailed to EPA-Region IV, Attention:
Superfund Accounting, P.O. Box 100142, Atlanta, Georgia, 30384.
6. The stipulated penalties set forth above shall be in
addition to any other remedies or sanctions which may be
available to the Plaintiff by reason or any Settling Defendant's
failure to comply with the requirements of this Consent Decree.
VII.
COVENANTS NOT TO SUE BY PLAINTIFF
7. Past Response Costs. Subject to the reservations of
rights in Paragraph 9 of this Section, the Plaintiff covenants
not to sue Settling Defendants in any civil or administrative
proceeding for reimbursement of Plaintiff's Past Response Costs.
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Thls covenant not to sue shall take effect upon the receipt by
Plaintiff of the payments required by Paragraph 1, Section v.
This covenant not to sue ie conditioned upon complete and
satisfactory performance by Settling Defendants of their payment
obligations under Paragraph 1, Section V, of this Consent Decree.
This covenant not to sue extends only to the Settling Defendants
and does not extend to any other person.
6. Monitoring Activities and Operation and Maintenance.
a. Plaintiff has entered into an enforceable
agreement with USD for the performance of monitoring, operation,
and maintenance work related to the Site. Plaintiff covenants
not to sue Settling Defendants for the performance by HSD
pursuant to said agreement and further covenants not to sue
Settling Defendants for oversight costs which may be incurred by
EPA in overseeing the work required pursuant to said agreement.
b. The covenants not to sue set forth in this
Paragraph 8 shall take effect upon the receipt by Plaintiff of
the payments required by Paragraph 1, Section V. These covenants
not to sue are conditioned upon complete and satisfactory
performance by Settling Defendants of their payment obligations
under Paragraph 1, Section V, of this Consent Decree. These
covenants not to sue extend only to the Settling Defendants and
do not extend to any other person.
9. Reservation of rights. The Plaintiff reserves, and
this consent Decree is without prejudice to, all rights against
each settling Defendant with respect to all matters other than
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those expressly specified in the covenants not to sue set forth
in Paragraphs 7 and 8 of this Section, including but not limited
to:
(1) claims based on a failure by such Settling
Defendant to meet a requirement of this Consent
Decree;
(2) claims for reimbursement of Future Response Costs,
except as expressly provided in Paragraph 8 of
this Section;
(3) claims for injunctive relief for the performance
of response actions except as expressly provided
by Paragraph 8 of this Section;
(4) claims for damages for injury to, destruction of,
or loss of natural resources; and
(5) any criminal liability.
10. Any claim or defense which any Settling Defendant may
have against any person or entity, not a party to this Consent
Decree, including, but not limited to, claims for indemnity or
contribution, is expressly reserved. Except as expressly
provided in Paragraph 8(a), nothing in this Consent Decree shall
in any way limit the rights and defenses which may be available
to any Settling Defendant in any action other than an action to
enforce the provisions of this Consent Decree.
11. Notwithstanding any other provision of this Consent
Decree, the Plaintiff retains all authority and reserves all
rights to take any and all response actions authorized by law.
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vin.
CONTRIBUTION PROTECTION
12. Subject to the reservations of rights in Section VII,
Paragraph 9, the Plaintiff agrees that by entering into and
carrying out the terms of this Consent Decree, the Settling
Defendants will have resolved their liability to the Plaintiff
for those matters set forth in the covenants not to sue in
Section VII, Paragraphs 7 and 8, pursuant to Section 113(f) of
CERCLA, and shall not be liable for claims for contribution for
those matters.
IX.
COVENANTS BY SETTLING DEFENDANTS
13. Settling Defendants hereby covenant not to sue the
Plaintiff or its representatives for any claims related to or
arising from this Consent Decree, including any direct or
indirect claim for reimbursement from the Hazardous Substances
Superfund established pursuant to Section 221 of CERCLA, 42
U.S.C. § 9631.
X.
COOPERATION AND RETENTION OF RECORDS
14. Settling Defendants agree to cooperate and assist the
Plaintiff in the prosecution of this or any other actions
relating to the Site against all persons or entities who are not
parties to this Consent Decree. Settling Defendants' obligations
of cooperation4and assistance include, but are not limited to,
naming and producing fact witnesses with knowledge relating to
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the Site for interviews, depositions, and trial; waiving the
subpoena requirements for the depositions and trial testimony of
such witnesses; producing documents requested; and promptly
responding to requests for information regarding those matters
specified in Section 104(e)(2) of CERCLA. The benefit of said
agreement by settling Defendants shall extend only to Plaintiff
and not to any other person. Nothing in this Paragraph shall be
construed to limit or otherwise affect the exercise of
Plaintiff's prosecutorial discretion or any of Plaintiff's
authorities under Section 104(e) of CERCLA. Further, nothing in
this Paragraph shall be construed to alter the scope of the
covenants not to sue and reservations of rights set forth in
Paragraphs 7 through 9, section VII of this Consent Decree.
15. Until ten years after the entry of this Consent Decree,
each Settling Defendant shall preserve and retain all records and
documents now in its possession or control that relate in any
manner to the Site. After this document retention period,
Settling Defendants shall notify the United States at least
ninety (90) calendar days prior to the destruction of any such
records or documents, and, upon request by the United States,
Settling Defendants shall relinquish custody of the records or
documents to the United States.
16. Nothing in this Section X shall be construed as a
waiver of the attorney-client privilege or work product doctrine
•*
by any of the "Parties to this Consent Decree.
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XI.
NOTICES AND SUBMISSIONS
17. Whenever, under the terms of this Consent Decree,
notice is required to be given or a document is required to be
sent by one party to another, it shall be directed to the
individuals and the addresses specified below, unless those
individuals or their successors give notice of a change to the
other parties in writing. Written notice as specified herein
shall constitute complete satisfaction of any notice requirement
of the Consent Decree with respect to the Parties hereto.
As to the United States:
Chief, Environmental Enforcement Section
Environment and Natural Resources Division
Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044
Re: DOJ # 90-11-3-215
and
Director, Waste Management Division
United States Environmental Protection Agency,
Region IV
345 Courtland Street
Atlanta, GA 30365
As to the Settling Defendants:
Ford Motor company:
John R. Phillips, Esq.
Ford Motor Company
728 Parklane Towers East
One Parklane Boulevard
Dearborn, Michigan 48126-2493
Dow Cornifng Corporation:
David E. Dearing, Esq.
Cromer, Eaglesfie^ld & Maher, P.A.
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1500 Market Tower
10 West Market Street
Indianapolis, IN 46204-2968
XII.
EFFECTIVE AND TERMINATION DATES
18. The effective date of this Consent Decree shall be the
date upon which this Consent Decree is entered by the Court.
19. This Consent Decree shall terminate upon expiration of
the ten-year document retention period specified in Section X.
Termination of this Consent Decree shall not affect the covenants
not to sue or the reservations of rights set forth in Section VII
or the continuing obligations of Settling Defendants set forth in
Section X.
XIII.
RETENTION OF JURISDICTION
20. This court will retain jurisdiction for the purpose of
enabling any of the Parties to apply to the Court at any time for
such further order, direction, and relief as may be necessary or
appropriate for the modification of this Consent Decree or to
effectuate or enforce compliance with its terms.
XIV.
MODIFICATION
21. No modification shall be made to this Consent Decree
without written notification to and written approval of the
Parties and the Court. The notification required by this Section
shall set for€h the nature of and reasons for the requested
modification. No oral modification of this Consent Decree shall
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be effective. Nothing in this paragraph shall be deemed to alter
the Court's power to supervise or modify this Consent Decree.
XV.
SIGNATORIES
22. Each undersigned representative of a Settling Defendant
to this Consent Decree and the Assistant Attorney General for
Environment and Natural Resources Division of the Department of
Justice certifies that he or she is fully authorized to enter
into the terms and conditions of this Consent Decree and to
execute and legally bind such Party to this document.
23. Each Settling Defendant shall identify, on the attached
signature page, the name and address of an agent who is
authorized to accept service of process by mail on behalf of that
party with respect to all matters arising under or relating to
this Consent Decree. Settling Defendants hereby agree to accept
service in that manner and to waive the formal service
requirements set forth in Rule 4 of the Federal Rules of Civil
Procedure, including service of a summons, and any applicable
local rules of this Court.
SO ORDERED THIS DAY OF , 19 .
United States District Judge
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THE UNDERSIGNED PARTIES enter into this Consent Decree relating
to the Lee's Lane Superfund Site.
FOR THE UNITED STATES OF AMERICA
Myles E. Flint
Acting Assistant Attorney General
Environment and Natural Resources
Division
U.S. Department of Justice
Washington, D.C. 20530
James D.P. Farrell
Environmental Enforcement Section
Environment and Natural Resources
Division
U.S. Department of Justice
Washington, D.C. 20530
rator
ction
Agency, Region IV
345 Courtland Street
Atlanta, Georgia 30365
Date:
Date
PatricXJi. fcobin \
OF COUNSEL
Robert Caplan, Esq.
U.S. Environmental Protection
Agency, Region IV
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-16-
THE UNDERSIGNED PARTY enters into this Consent Decree relating to
the Lee's Lane Superfund Site.
FOR THE FORD—MOTOR X MPANY:
Date; 3/22/93
"^anjEfJCi
int Secretary
Agent Authorized to accept service on Behalf of Ford Motor
Company:
Name: J- Courter
Title: Secretary
Address: Ford Motor Company
The.American Road
Dearborn, MI 48121-1899
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THE UNDERSIGNED PARTY enters into this Consent Decree relating to
the Lee's Lane Superfund Site.
FOR THE DOW CORNING CORPORATION:
Date: /?/a, }&, 19 9 ^ ¦. •'—-/ <—*• >
Agent Authorized to accept service on Behalf of Dow Corning
Corporation:
nav-iri F.. figuring. Esq.
Crrmer. Eaglesfield & Maher
1500 Market Tower
10 West Market- street
Indianapolis. IN 46204-2968
Name:
Title:
Address:
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V'r- 1 'A £ 0^'vL€C (/
ENFORCEMENT CONFIDENTIAL
ATTORNEY WORK-PRODUCT
TEN POINT SETTLEMENT ANALYSIS
JMC- SUPERFUND SITE
LEXINGTON. NORTH CAROLINA
I. OVERVIEW
The purpose of this Memorandum is to set forth the basis for
EPA Region IV'a recommendation that the Partial Consent Decree
(the Decree) for the JMC Site (the Site), located in Lexington,
North Carolina', entered by EPA, Region IV, and co-defendants:
Gaither S. Walser, Executor of the Estate of Nancy P. Miller,
Edwin Goldstein, and Herbert K1ion (the Settling Defendants) be
executed and approved by EPA Headquarters and the Department of
Justice. This Memorandum sets forth the background of this case,
the terms of the settlement, and an analysis of the agreement
pursuant to the ten point criteria outlined in the Interim CERCLA
Settlement Policy announced as part of EPA's Hazardous Waste
Enforcement Policy, 50 Fed. Reg. 5034 (Feb. 5, i985).
The Decree provides for an approximately thirty-eight
percent (38%) settlement of total past costs for this Site.
Approval of the proposed Decree will result in the United States
recovering nearly forty percent, (40%) of the total costs incurred
in connection with a removal action (the Removal) performed by
EPA at the Site in 1988.1 The United States' litigation team
recommends approval of this settlement because of the inherent
litigation risks in this case.
First, each of the Settling Defendants has a strong
"divisibility of harm defense.™ Although EPA's costs are for the
removal of liquids and soils at the Site, based on the particular
facts of this case, each Settling Defendant could argue
persuasively that its responsibility is limited to soil removal
only. Because our strongest argument against these defendants is
that they are liable for removal of contaminated soils only, and
soil removal accounts for approximately fifty percent (50%) of
total costs, tfie costs recovered pursuant to this settlement
constitute a recovery of approximately seventy-five (75%) percent
of the defendants' potential liability. Second, there are
litigation risks with regard to establishing each Settling
Defendant's liability in a complex, fluctuating, corporate
ownership scenario where EPA's liability evidence presents
certain problems.
1 As set out more fully below, a partial removal, supervised
by the State of North Carolina which removed contaminated liquids
only, was conducted at the Site-in 1984. EPA did not participate
in this removal.
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Litigation for the recovery of the remaining costs will
continue against the non-settling defendants. The United States'
litigation team is considering a further settlement with some of
the non-settling defendants. However, this possible settlement
will not cover all of the remaining costs incurred at*the Site.
This case presents issues concerning "divisibility of harm," a
developing,area of Superfund law.
This cost recovery action was referred to the Department of
Justice (DOJ) in 1989, and the case was filed that same year.
The tota.1 past costs incurred by EPA at the Site as of October 5,
1992, exclusive of interest, is $1,011,056.54. Pre-judgment
interest through October 5, 1992, totals $169,632. Approximately
half of these costs were for soil cleanup at the Site, while the
remainder was spent on removal of hazardous substances in liquid
form. EPA does not iexpect to incur significant future costs in
connection with the Site, since the removal has been completed,
the Site did not rank on the National Priorities List (NPL), and
no future action is contemplated. There will probably be future
litigation costs with respect to the remaining defendants.
II. TERMS OF THE SETTLEMENT
Attached for your concurrence3 is a proposed partial consent
Decree with defendants the Estate of Nancy Miller (the "Estate"),
Herbert Klion ("Klion"), and Edward Goldstein ("Goldstein")
providing for reimbursement of $446,000 for past costs incurred
at the Site.
The proposed Decree seeks to resolve the Settling
Defendants'1 alleged liability under Section 107 of the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, {"CERCLA"), 42 U.S.C. § 9607, for past costs
incurred in connection with EPA's removal action at the Site in
exchange for their payment to the United-States of $446,000. The
payment will be made in one lump sum within thirty days of entry
of the Decree by the three Settling Defendants.
Approval of the proposed Decree will result in the United
States recovering $446,000, ^approximately thirty-eight percent
(38%) of the total costs of $1,180,688.54, incurred in connection
with the Removal performed at the Site in 1988. Litigation for
recovery of the remaining costs will continue against defendants
Linda and Steven Pitchersky (the Pitcherskys) and Miroslav
Arandjelovic (Miro) former owner/operators of the Site. However,
1 As set out in OSWER Directive No. 9012 10-b, "Redelegation
of Civil Judicial Settlement Authorities Under Delegation 14-13-B
and 14-14-E."
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as noted above, the United States litigation team is entertaining
settlement negotiations with the Pitcherskys.
The key provisions of the Decree include: Section V,
Covenant Not to Sue; Section IX, Contribution Protection; and
Section VI, Reservation of Rights. While the Decree does not
contain reopener language, the. Reservation of Rights Clause
explicitly reserves the government's rights to maintain an action
for cost recovery of future costs, injunctive relief, and natural
resources damages.
The Decree contains the standard provisions related to the
settlement of a CERCLA Section 107 action. The Decree does not
address performance of work, by Settling Defendants. As noted
above, the Decree provides a standard Covenant Not To Sue
Settling Defendants for past response costs incurred at the Site.
The Settling Defendants had originally demanded that the covenant
be broadened to include any future costs that may be incurred at
the Site; however, EPA refused to include such language in the
Decree. The Decree does not provide for any environmental
projects.
The Contributipn Protection provision included in the Decree
applies only to costs incurred by the United States. Therefore,
this provision will not preclude the State of North Carolina from
filing an action against the Settling Defendants for
reimbursement of response costs incurred by the State during the
1984 removal. However, the contribution protection shields the
Settling Defendants against any action that the non-Settling
Defendants may file against them for reimbursement of costs that
these parties could pay to the United States as a consequence of
any future judgment for past costs that may be entered in the
case against the npn-Settling Defendants.
The JMC litigatipn team and Region IV recommend acceptance
of the proposed settlement. An assessment of the ten point
criteria is set forth in Section IV below.
III. BACKGROUND
A. Site Description
The JMC Furniture Site consisted of a metal plating facility
located in Lexington, North Carolina. The facility was known by
several names and was owned and operated by a series of corporate
entities over the years, all of which are now defunct. The
facility operated from the early 1960's until it was closed in
1987, plating zinc, cadmium, chrome, nickel, and brass during the
years of its operations. Large quantities of acids, caustics,
and solvents were also used at the Site.
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B. Enforcement History
Several state RCRA inspections conducted in the early 1980'g
identified numerous waste management violations. During this
time, the facility remained out of compliance with interim status
requirements and the State of North Carolina assessed several
administrative penalties; In 1984, the Site was cleaned up by
the Pitcherskys under the supervision of the State of North
Carolina. Prior to 1984, hazardous substances in liquid form had
been stored at the facility in.drums, vats, and containers.
Also, soil contamination had occurred.as a consequence of the
facility's operation. Pursuant to the. 1984 cleanup, all drums,
vats, and open containers of.hazardous substances were removed
from the Site; however, no contaminated soils were removed from
the Site, in 1987, EPA participated in a RCRA inspection at the
request of the North Carolina Division of. Health Services (NCDH).
A 1987 EPA Preliminary Site Assessment noted neWly filled vats
and drums of hazardous substances and areas of stressed
vegetation on-site.
Pursuant to Section 104 of CERCLA, 42 U.S.C. § 9604, EPA
conducted a removal action at.the Site during the spring and
summer of 1988. Contaminated soils on and'adjacent to the Site
were excavated and removed. Vats and drums of wastes stored on-
site and in a building adjacent to the facility were stabilized,
and disposed of off-site. To date, EPA has incurred costs
amounting to $1,180,688.54 in connection with the Removal at the
JMC Site.
On December 5, 1989, EPA filed a Civil Complaint (the
Complaint) pursuant to Section 107 of CERCLA, 42 U.S.C. § 9607,
Civil Action No. C-89-886-S, for cost recovery against past
owner/operator, the Estate of Nancy P. Miller. On June 20, 1990,
EPA amended the Complaint naming four additional defendants:
past owners/operators Steven arid Linda Pitchersky (the
Pitcherskys), Carolin Corporation (Carolin) and Benz Holding
Company (Benz):. On May 13, 1991/- a second amended complaint was
filed naming three additional defendants: past owner/operator
Miroslav Aranjdelovic (Miro) and past operators Herbert Klion
(Klion) and Edward Goldstein (Goldstein).
C. Analysis of Settling PRPS
1. The Estate of Nancy P. Miller - As a past owner/operator of
the Site during the time of disposal, Nancy P. Miller is liable
under CERCLA § 107(a)(2). Miller was a principal in several of
the corporations which owned and operated the plating facility at
the Site between 19 8l' and 1983. Miller died in 1988, and her
estate is currently in the Probate Court of Davidson County,
North Carolina. Although ample evidence indicates that Nancy
Miller actively managed the Site until 1983, when the facility
was sold to Linda and Steven Pit'chersky, establishing Miller's
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liability at trial might present some problems which are more
fully explained below in Section IV 3 B.
2-3. Herbert Klion and Edwin Goldstein As past operators at
the time of disposal, Klion and Goldstein, were added as
defendants for their role in operating both Carolin Corporation,
the holding company that owned the Site property from 1985-1989,
and JMC Furniture Company, the last known company to operate a
plating facility at the Site for the period between 1985 and
1986. (In 1986, JMC was sold to the final operator, Miro, who
continued to operate the facility under the JMC name until a time
immediately prior to EPA'a 1988 removal.)
EPA has alleged that Klion and Goldstein are liable under
CERCLA § 107(a)(2) as past operators at the Site at the time of
hazardous waste disposal. However, Klion.'s liability is not
well-established based on the evidence available to EPA. With
regard to Goldstein, EPA's evidence indicates he played a much
more active role in operating the Site, however, establishing his
liability at trial might also present problems. Section IV 3 B
of this report provides a detailed explanation of Klion's and
Goldstein's involvement at the Site.
D. Analysis of Non-Settling PRPg
1. Steven and Linda Pitcheraky (the Pitcherskys)- The
Pitcherskys, past owners and operators at the time of disposal,
were added as defendants for their role in owning and operating
the Site during a two-year period of time (1983-85). The
Pitcherskys are liable parties under CERCLA § 107(a)(2).
2-3. Carolin Corporation: Benz Corporations (Carolin; Benz)
Carolin and Benz, past owners at the time of disposal, are also
liable under CERCLA § 107(a}(2). These real estate holding
companies were added as defendants due to their ownership of the
Site property between 1985 and 1989.3 Carolin and Benz are both
defunct corporations without assets.
4. Miroslav Arandlelovic (Miro)- Miro whose liability is based
on CERCLA § 107(a)(2), was added as a defendant due to his
extensive involvement in running the operations of the Site
during the late 1980's and his ownership of the now defunct JMC
Furniture Company between 1986 and 1988. Miro is probably the
most culpable individual associated with the Site. He was the
3 The Pitcherskys have acted variously as officers and
stockholders of Benz and Carolin and may have some additional
liability as operators for conditions at the Site based on their
accivities during the Carolin/Benz periods of Site ownership.
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last owner/operator at the Site, and apparently allowed
conditions to deteriorate badly. Miro fled to Canada in the late
1980's, and on July 23, 1992, EPA was finally able to serve him'
with process- On September 3, 1992, the United States submitted
a Request to Enter Default against Miro in the United States
District Court for-the Middle District of North Carolina,
Greensboro Division, which recently entered default against him.
IV. ANALYSIS OF THE TEN POINT SETTLEMENT CRITERIA
The Ten Point settlement Criteria are set out below:
1. Volume of Wastes Attributable to Each Settling Defendant
There is no effective method by which EPA can determine the
volume of wastes contributed to the Site by each PRP. EPA does
not have records indicating the amount of wastes contributed by
each PRP to the Site. This criterion is thus inapplicable.
2. Nature of Wastes Contributed
Soil samples taken both by NCDH and EPA showed high levels
of chromium, nickel, cadmium, copper, and lead at the Site.
These substances were released from,plating wastes which were
spilled in and around treatment and storage areas and spilled or
dumped down a slope located just behind the facility. In
addition, the Site contained numerous vats and drums of cyanides,
acids, caustics, solvents, and spent plating wastes.
3. Strength of Evidence Tracing the Wastes at the Site to
the Settling Defendants
While the United States has fairly convincing evidence
linking the Estate to the Site based on Nancy Miller's status as
operator of the facility, the evidence against Goldstein is not
quite as strong, and the evidence against Klion is weak. In
addition, the available evidence also indicates that each
Settling Defendant is probably responsible for only a portion of
the costs, since all of them were involved with the Site at a
time prior to the 1988 EPA cleanup, but none was likely
responsible for the conditions that caused EPA to take immediate
removal action at the Site.
As detailed more fully below, because of the 1984 cleanup
of liquids, the Estate may have valid grounds to limit its
liability only for soils excavated during the removal. Like the
Estate, Klion and Goldstein are also primarily liable for-soil
contamination. EPA does not have conclusive evidence indicating
that any liquid contamination occurred during the Klion and
Gpldstein operation of the site. Instead, the evidence strongly
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indicates that Miro bears primary responsibility for the majority
of this portion of the costs. "
A. The Estate of Nancy PMiller- The majority of the
evidence indicates that Miller operated the Site from 1981-1983.
She was a corporate principal in the two defunct corporations
operating the Site during this time.4 Deposition testimony given
by Roger Spach, Superintendent for the City of Lexington Water
Resources, indicates that Miller was the person of highest
authority at the Site,-was usually present during his numerous
visits during1 the early 1980's, and appeared to be the person in
charge of all environmental matters. Deposition testimony by
Ronnie Arnette, plant manager, indicates Miller's complete
control over the Site. Finally, in 1981, Miller filed a RCRA
application wherein she stated that she was the facility's
owner/operator.
With regard to releases during her tenure, Spach's
deposition substantiates sloppy waste handling practices, a
poorly functional wastewater treatment system, and overrunning
tanks. A 1982 North Carolina RCRA inspection report notes
problems with the wastewater treatment system and deteriorating
drums and basins filled with plating wastes. Finally, one of the
former plating managers at the Site, Jack Parker, reported in a
witness interview that there were spills and leaks from time-to-
time throughout the facility's entire operation.
While the above evidence strongly implicates Miller as an
operator, establishing her liability at trial could present
certain problems. First, the State of North Carolina RCRA
inspector, Steve Phibbs, recalled during an interview with
Steve Silverman, attorney for DOJ that when Phibbs visited .the
Site on several infrequent occasions, he found Nancy Miller a
"very uninformed person" with regard to facility operations at
the site. Second, in light of the fact that over ten years have
elapsed since Nancy Miller operated the Site, Spach's testimony
as to her involvement might not be as convincing as it might have
been earlier.
Finally, of all the Settling Defendants, Miller has the
strongest divisibility of harm argument. Specifically, the
Estate's liability as an owner, is limited to conditions'
prevailing before 1983, when Nancy Miller sold the Site property
to the Pitcherskys, who continued to own and operate the Site.
Approximately one year after Miller sold the JMC property, the
Site was cleaned*up under the supervision of the State of North
Carolina. During this cleanup, any drums, vats and open
containers containing hazardous substances were removed'from the
4 These defunct corporations were not included as defendants
in this lawsuit.
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Site. However, no contaminated soil was excavated as part of the
1984 cleanup. When EPA conducted the 1988 removal, it cleaned up
contaminated soils, and vats and drums of hazardous substances
presumably placed there by Miro and JMC.3 Thus, it is arguable
that the government cannot establish joint and several liability
for the entire cost of EPA's cleanup against the Estate. Rather,
our strongest case against this past owner/operator is that it is
jointly and severally liable only for contaminated soils removed
by EPA in i988 which account for approximately one-half of the
total cost of the cleanup.4
B. Herbert klion and Edwin Goldstein- In terms of
establishing operator liability, for Klion and Goldstein, there
is little evidence that Klion ever operated the Site. While the
evidence does indicate that Goldstein played- a much more active
management role during JMC's operation'of the Site, his liability
as an operator-is riot completely clear. Klion's Section 104(e)
responses claim that he was a "passive investor" in the plating
operation with no,.actual responsibilities at the Site or
knowledge of waste handling practices. EPA has no evidence to
the contrary. In addition, although EPA deposed other witnesses
at the Site, including his co-defendants, none Of them ever
implicated Klion.
With regard to Goldstein's liability as an operator, the
picture that emerges from the evidence shows he played a much
more active role at the Site than Klion, yet evidence showing he
ope;rated the Site on a day-to-day basis is not completely
definitive. In Goldstein's Section 104(e) response he admits
that he was involved in the marketing aspects of JMC and that he
had contact with city and governmental officials regarding health,
and environmental problems. However, Goldstein denies that he
had day-to-day knowledge of or involvement in the plating
operations or waste management practices at the Site. Deposition
testimony paints a conflicting view of Goldstein's role-at JMC..
Most witnesses testified^;that'Goldstein "called the shots" at the
facility; however, one witness saw his role as less active.
Thus, if this' case were to proceed to trial, it is not entirely
certain whether the government could prevail against Goldstein,
and it is unlikely that the government would bb successful in
establishing operator liability against Klion.
5 As noted earlier, the available evidence indicates that-a
t:his time Herbert Klipn and Edwin Goldstein had sold JMC to Mirr
and were no longer involved in its.operations.
6 See the discussion of the "divisibility of harm" issue i
point 5 of this section below.
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Even if the United States was able to establish operator
liability against both Klion and Goldstein, we would be faced
with the same evidentiary difficulties, regarding the
divisibility of harm defense as we would with the Estate.
Although Klion and Goldstein became involved with the Site
between 1984 and 1986, after the Estate (Nancy P. Miller) and the
Pitcherskys had operated the Site (and therefore closer in time
to the date of the, EPA cleanup), there is no specific evidence
indicating that the drums, vats, and open containers found at the
Site and removed in 1988 were placed there during the
K1ion/Goldstein era.7 Rather, the evidence indicates the drums,
vats, and containers were"placed there by the subsequent
operator, Miro. With regard to liability for soil contamination,
during the Klion/Goldstein era, Roger Spach stated in his
deposition that the facility's wastewater treatment system never
functioned properly throughout its entire history, discharging
wastewater, onto the ground. In addition, Spach noted the
facility's continuous history of sloppy housekeeping practices.
The theory of liability against these two defendants is
similar to the Estate's: namely, that during the Klion/Goldstein
era of operation, there was incremental soil contamination for
which the two defendants are jointly and severally liable. As
noted above, these costs are approximately one-half of the total
cleanup costs.
4. Ability of Settling Party to Pay
EPA has no reason to question the Settling Defendants'
ability to pay the amount of the past costs in the attached
Decree. (Of the $446,000.00 the Settling Defendants have agreed
to pay, EPA does not. know how much each of them is contributing
other than that the Estate is paying the largest share followed
by Goldstein and then Klion). However, unfortunately, there are
no defendants with both clear liability and sufficient assets to
provide, full reimbursement Df the government's costs in this
case. While some of the defendants are clearly liable for all or
most of thet costs of the cleanup, they are either defunct
corporations: Carol in and Benz, or as in the case of Miro they
present the dilemma of limited viability in addition to the
problems inherent in.locating and attaching assets in a foreign
country. Other defendants, as noted earlier, may have greater
ability to pay, but may have limited liability for the costs of
the cleanup, specifically: the Estate, Klion, Goldstein, and the
Pitcherskys. In addition, EPA's evidence indicates that
Goldstein is not a man of means.
7 The Pitcherskys are non-settling defendants whose
involvement at the Site is described in Section III D l above.
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A. The B9tate of Nancy P. Miller- In June of 1989, when
Region IV referred this case to the Department of Justice, the
Assets of the Estate were over $1,482,000. EPA filed a complaint
in December of that year in order to prevent dispersal of Estate
assets. Although the actual financial situation of the Estate is
unknown, it is likely its assets have diminished in defense of
this litigation.
B. Edwin Goldstein and Herbert Klion- Financial information
about Edward Goldstein and Herbert Klion indicates that Klion
has sufficient assets to pay his agreed upon share.
With regard to Goldstein, the Region has no evidence
indicating he is able to pay the entire amount of EPA costs. The
Region's initial assessment of Goldstein's property holdings,
conducted by a civil investigator, did not indicate substantial
assets. In addition, we were informed on several occasions by
attorneys for the Estate of Nancy Miller that despite their
efforts, they were unable to locate any significant assets
belonging to Goldstein. Finally, during settlement negotiations,
Herbert Klion informed Regional Counsel and counsel for DOJ that
he initially became involved as an investor in JMC because
Goldstein was financially unable to make the investment on his
own.
5. Litigative Risks in Proceeding to Trial
Region IV believes that there are no litigative risks
regarding the admissibility of the government's evidence, but
there are some litigative risks regarding the adequacy of the
government's evidence against the Settling Defendants both in
terms of each Settling Defendant's joint and several liability
for the entire cleanup, and Herbert Klion's liability as an
operator.
First, with regard to joint and several liability for the
entire cost of the cleanup, as noted in Section IV (3) above, the
government may only be able to establish joint and several
liability among the Settling Defendants for contaminated soils
excavated during the 1988 removal and not for the entire cost of
EPA's cleanup. EPA believes that it is likely the Settling
Defendants will not be found liable for costs incurred in
connection with the 1988 removal of vats, drums and containers of
hazardous substances. Because all the drums, vats, and open
containers of hazardous substances linked to the Estate were
removed from the property during the 1984 cleanup (in which EPA
was not involved) and there is no evidence of liquid disposal
during the Klion/Goldstein era, the Settling Defendants could
argue that their harm, the incremental soil contamination, is
properly divisible from the contaminated liquid harm caused by
more recent owner/operators such as Miro.
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CERCLA does not expressly provide for joint and severable
liability among potentially responsible parties, rather the
doctrine was intentionally omitted "in order to have the scope of
liability determined under common law principles". U.S. v. Alcan
Aluminum Corp.. 964 P.2d 252, 268 (3rd Cir. 1992). In
determining these common law principles, courts have looked to
the Restatement (Second) of Torts for guidance. See Alcan. Id.;
U.S. v. Chem-Dyne Corp.. 572 F. Supp. 802, 810 (S.D. Ohio 1983);
U.S. v. Monsanto Co.. 858 F.2d, 161, 171; U.S. v. R.W. Meyer.
Inc. . 889 F.2d 1497, 1507 (6th Cir. 1989). Section 875 of the
Restatement explains the concept of joint and several liability
as follows:
Each of two or more persons whose tortious conduct is a
legal cause of a single and indivisible harm to the injured
party is- subject to liability to the injured party for the
entire harm.
However, this principle is balanced by the doctrine of
"divisibility of harm" provided by Section 433A of the
Restatement:
If two or more persons, acting independently, tortiously
cause distinct harms or a single harm for which there is a
reasonable basis for division according to the contribution
of each, each is subject to liability only for the portion
of the total harm that he himself caused.
Thus, in determining the nature and extent of liability
under CERCLA, courts have consistently held that PRPs may limit
their liability if they can establish that the environmental harm
at the site is divisible and that the damages are capable of some
reasonable apportionment. See . eg.. Alcan. Id.: Monsanto. Id.;
U.S. v. Kramer.. 757 F. Supp. 397, 422 {D.N.J. 1991); Purolator
Products Corp. v. Allied-Sicmal. Inc.. 772 F. Supp. 124, 133
(W.D.N.Y. 1991); O'Neill V. Picillo. 883 F.2d 176 (1st. Cir.
1989) . 8
8 Although factually different, O'Neill v. Picillo. supra,
might be used by the Settling Defendants to establish that they
are only liable for the soil cleanup and not for the disposal of
the vats and.drums containing hazardous substances that were
stored and disposed of at the Site after 1984.
In Picillo. supra, a generator (defendant) argued that its
liability should be separated from other generators where a state
official overseeing a cleanup of a large dump site identified
only a few dozen barrels, out of a total of over 10,000
excavated, as belonging to the defendant. The court refused to
find the harm caused by the defendant divisible because said
party could not prove that any specific percentage of costs wer<
attributable solely to that defendant. However, the court did
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.In the present case, the Estate and Klion/Goldstein should
be expected to argue that the drums and vats of liquid waste
removed from the site created a harm separate from the soil
contamination. While the outcome of this argument is difficult
to predict, there is a significant risk that the settling
defendants will succeed in establishing separate harms. Clearly,
the remediation necessitated by the drums is separate from the
soil remediation conducted at the Site, and the costs can also be
separated. Likewise, it would be scientifically difficult for
the United States to argue that the soil which was remediated in
1988 contributed to the contamination of the liquids which were
removed.
If the divisibility argument is decided in favor of the
settling defendants, the United States must independently link
each defendant to both the liquids and the soils to prevail at
trial. This burden would be most difficult to satisfy against
the Estate. The Estate has the clearest factual support for a
claim that its liability should be limited to soils. The Estate
ceased operation and ownership of the site in 1983, after which,
in 1984, all liquids were removed from the site under the
.supervision of the state. Thus, arguably, the Estate could not
have contributed the liquids removed by U.S. EPA in 1988.
Similarly, it would be difficult for the United States^ to link
either Klion or Goldstein to the drums and vats of liquid, removed
by EPA in 1988. The United States has not uncovered any evidence
which ties Klion or Goldstein to the-drums and vats of liquid.
Rather, the evidence tends to establish that the vats and drums
were disposed of at the Site during the time when Miro, operated
the facility. Furthermore, even if the United States were able
agree that had the defendant been able to prove definitively the
specific cost, expended in disposing of the discrete number of
barrels attributed to it, the defendant would have been liable
only for that limited cost. In other words, the defendant would
not be liable for those costs traceable to other defendants.
Unlike Picillo. supra, in this, case the Estate, in particular,
should be able to prove that all of its drums and vats were,
removed from the Site in i9&4. Since the cost incurred by EPA in
1988 for removing the new drums and containers has already been
separated from the cost of excavating the soil (approximately 50%
of the cost for the removal of the containers and 50% for the
excavation of the soil), the court should be able to apportion
costs handily in this case between the Settling Defendants and
other owners and operators.
The State of North Carolina may have a valid claim against
Settling Defendants for the 1984 removal of the vats and drums.
As we have said before, this settlement does not preclude the
State from pursuing recovery of costs from Settling Defendants.
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to establish that the drums and vats removed by EPA were left on
Site by Klion and Goldstein, and not Miro, the United States
would also be obligated to establish that these vats and drums
contained actual waste and -not useful products which were
transferred as part of the sale to Miro.
in addition,, to. the "divisibility of harm" problem, while'
existing evidence generally indicates the Estate's liability,
further discovery might be necessary in order to fully establish
Goldstein's liability as an operator. Also, as previously noted,
discovery indicates that Klion was only a passive investor in JMC
and Carolin and hot actively involved in the day-to-day business
operations of either entity. Thus, if this case were to proceed
to trial, it is unlikely that we would be successful in
establishing operator liability against Klion, Goldstein's
liability is not totally clear, and even establishing liability
against the1Estate might present some problems.
These,factors, taken together, indicate that the United
States would: face serious evidentiary and legal obstacles were
the case to proceed to trial. The litigation risks presented by
these obstacles favor settlement of the case as proposed by this
memorandum.
6. Public Interest Considerations
This Consent Decree serves the public interest because it
will conserve government resources and reimburse the fund for
almost thirty-eight percent (38%) of the past costs.
7. Precedential Value
Given the fact that further discovery is necessary to fully,
establish Goldstein's liability as an operator, the weak evidence
against Klion, the possible problems with the Estate, the
potential "divisibility of harm" argument, and the particular
facts of this case, the litigation of this action may produce a
decision adverse to EPA. Therefore, the best alternative is to
settle the case. The proposal set forth in the attached Consent
Decree is justified by these considerations.
8. Value of Settlement
A. Value of Obtaining a Present Sum Certain
As discussed above, EPA's 1988 removal action included the
removal of soil and liquid hazardous substances contained in
vats, drums and containers. The $446,000 that the Settling
Defendants have agreed to pay is approximately thirty-eight
percent (38%) of the total amount of Site costs. However, this
amount is approximately seventy-five percent (75%) of the costs
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incurred by EPA to deal with the soil contamination.9 Since our
strongest argument against these defendants is that they are
jointly and severally liable only for the contaminated soils
removed during the 1988 cleanup, then payment of the amount of
$446,000.00 constitutes approximately seventy-five percent (75%)
of their potential liability. In addition, obtaining a present
sum certain is preferable to expending additional Agency
resources to litigate these costs.
By entering into this agreement, EPA would not recover from
the Settling Defendants approximately $144,000 of past costs that
they may be liable for, taking into account the potential
divisible harms in this case.
Although EPA would not recover the amount of $144,000.00 from
Settling Defendants, Region IV still believes it is in the
Agency's best interest to accept the present sum certain
($446,000) because: a) protracted litigation would be avoided; b)
the possibility of an adverse precedent regarding the
"divisibility of harm" is averted; c) the liability of one of the
Settling Defendants (Klion) is questionable, that of^another
(Goldstein) is not entirely clear, and establishing liability
against the Estate might present some, albeit minor, problems;
d) the financial ability of Goldstein to pay for fifty percent
(50%) of the total costs is questionable; and e) the $446,000
amount would begin to earn interest immediately.
B. Special Environmental Projects'/Value of Injunctive Relief
The settlement does not provide for any special
environmental projects or other injunctive relief, as all cleanup
activities have been completed.
9. Inequities and Aggravating Factors
The Region is aware of no inequities or aggravating factors
relating to the proposed settlement.
9 The1 total current costs of EPA's removal action are
$1,180,688.54. The soils cleanup constitutes approximately half
of the costs linked to the 1988 removal. If Settling Defendants'
liability is limited to the soil costs, then $590,000
(approximately one-half of the total current costs of
$1,180,688.54) would constitute 100% of their liability.
10 When the settlement was agreed upon, in principle, the
settlement amount of $446,000 constituted approximately one
hundred percent ' (100%) of the costs linked to the soils cleanup.
The costs to continue to litigate this case however, would be
more than the $144,000 incurred in the interim.
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The Region is aware of no inequities or aggravating factors
relating to the proposed settlement.
10. Nature of the Case Remaining After Settlement
Region IV and the Department of Justice plan to continue the
litigation against the remaining PRPs, Miro, and the Pitcherskys.
Although Miro is arguably the most culpable individual associated
with contaminating the Site, he fied to Canada and the Agency has
only recently been able to serve him with process. In addition,
any financial recovery from Miro is speculative at this point.
In terms of Miro's viability, only one asset, a piece of Canadian
property worth about $200,000, has been located. This piece of
property is currently up for sale. In order for the United
States to attach the property, it must first get the default
judgment entered in a Canadian Court in order to initiate
collection.11
As for the Pitcherskys, their alleged liability stems only
from being owner/operators of the Site prior to 1985. Although
at present,; EPA is involved in settlement negotiations with the
Pitcherskys, the maximum amount the United States believes it can
recover is $145,000 based on the limited financial resources of
these defendants.
Attachment
11 Canada and the United States have a reciprocal agreement
whereby individuals in one country can initiate collection
actions against those in the other. However, Canadian procedures
for attachment are more stringent than those in the United States
and there is a possibility that the property could be sold while
the United States was in the process of meeting the required
jurisdictional hurdles.
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APPENDIX TO
TEH POINT SETTLEMENT ANALYSIS
JFD ELECTRONICS/CHANNEL MASTER SUPERFUND SITE,
OXFORD, GRANVILLE COUNTY, NORTH CAROLINA
1. December 9, 1992 RD/RA Pre-Referral Litigation Report for
JFD Electronics/Channel Master Superfund Site, Oxford,
Granville County, North Carolina
2. April 26, 1993 U.S. District Court ruling on Channel Master
Satellite "Systems# Inc. v. JFD Electronics Corp., Harvey
Finkel. and The Unimax Corporation. Civil No. 88-605-CIV-5-F,
U.S. District Court (E.D.N.C.)
3. April 27, 1993 U.S. District Court ruling on Channel Master
Satellite Systems. Inc.. supra.
4. August 25, 1993 Dun & Bradstreet Report for Avnet, Inc.,
(Channel Master's parent company)
5. August 25, 1993 Dun & Bradstreet Report for Unimax, Inc.,
(JFD's parent company)
6. Consent Decree filed on May 14, 1993 on Channel Master Satellite
Systems. Inc.. supra.
7. SCORE Report of Response Costs incurred as of May 31, 1993, for
JFD Electronics/Channel Master Superfund Site, N.C.
8. Summary of DOJ costs as of June 12, 1993, (including prejudgment
interest on DOJ and EPA's costs).
9. April 29, 1993 Granville Industrial Developers, Inc., response
to EPA Special Notice Letter.
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Cardinals
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XnaWf^ "ft> PoLKj
^ocUf^&STh
DATE:
SUBJECT:
FROM:
TO:
Proposed Settlement of the Coleman Evans
Wood Preserving Site
Greer C. Tidwell
Regional Administrator
Region IV
Richard B. Stewart
Assistant Attorney General
Land and Natural Resources
BACKGROUND
The Coleman Evans Wood Preserving Company ("Coleman Evans"
or the "Site") is located on Celery Avenue in Whitehouse, Duval
County, Florida. Coleman Evans operated a wood preserving
facility on eleven acres from 1954 until 1988. The preservative
used in the process and the primary contaminant at the Site is
pentachlorophenol (PCP). The environmental problems at the
Coleman Evans Site consist of soil and groundwater
contamination. The Site was proposed for the NPL in 1981 and
finalized in March 1983 with a score of 46.18.
In 1985, EPA performed an immediate removal of contaminated
soil at the Site. The removal was undertaken pursuant to a
federal court order for access. The Remedial Investigation for
the Site was completed in April 1986; the Feasibility Study
became final in September 1986. The Record of Decision (ROD)
was signed in September 1986 and was primarily concerned with
soil and groundwater contamination. Accordingly, the remedy
selected for the Site recommends the excavation of all PCP
contaminated soils in excess of 10 mg/kg and destruction of
contaminated soils through on-site incineration. Further
Remedial Action will consist of groundwater recovery and
treatment. According to the ROD, the remedy was estimated to
cost between $4 million and $5.8 million dollars. However, due
to continued wood preserving operations at the Site by Coleman
Evans and Jack Coleman, the soil contamination tripled and
increased the costs for the remedy to an estimated $17 million
to $25 million dollars.
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Enforcement activities to date include the issuance of a
Section 106 removal order in 1985 for the immediate removal,
issuance of a Section 106 unilateral order in 1988 for the
remedial action, issuance of notice letters, issuance of
information request letters, and issuance of demand letters.
Coleman Evans did not comply with the 1985 or the 1988
unilateral orders.
On June 13, 1988, the Region requested the Department of
Justice to file a civil action against Coleman Evans Wood
Preserving Company and Jack Coleman pursuant to Section 107 of
CERCLA for the recovery of $400,768 in past removal costs and
punitive damages. On July 11, 1988 the complaint was filed in
the Middle District of Florida, Jacksonville Division, seeking
the recovery of $400,7€8 in past removal costs, costs to be
incurred, and punitive damages. To date, the United States has
incurred approximately $2,591,489 in past costs.
The United States and the Defendants have been negotiating
the terms of a settlement since July 1988. Pursuant to these
settlement discussions, the United States required and obtained
from the Defendants an audit of the Coleman Evans Wood
Preserving Company and Jack Coleman to fully ascertain their
financial positions, and an unrestricted access agreement.
After these audits were completed, the United States and the
Defendants began settlement negotiations under the direction of
Magistrate Howard T. Snyder. After two months of negotiations
with Magistrate Snyder, the Defendants offered $350,000 to the
United States in payment for past and future response costs at
the Site and in consideration for an immediate release from
future liability.
This memorandum recommends EPA's acceptance of the
settlement offer tendered by Coleman Evans and Jack Coleman.
However, because this memorandum proposes settlement for less
than 100 percent of EPA's past costs and proposes an
"extraordinary circumstances" exception to reopeners pursuant to
Section 122(f)(6) of CERCLA effective upon entry of the
settlement, what follows is the Region's assessment of the ten
point criteria set forth in the Interim CERCLA Settlement Policy
announced as part of EPA's Hazardous Waste Enforcement Policy,
50 Federal Register 5034 (February 5, 1985).
1. Volume of Waste Contributed to the Site by the Defendants
The Site is a former wood preserving facility that was
owned by Coleman Evans and operated by both Defendants. All of
the waste at the Site was generated by the Defendants.
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2. Nature of the Wastes Contributed
The Site operated as a wood treating facility from 1954
until 1988. The wood treating process used pentachlorophenol
(PCP) dissolved in number two diesel fuel oil as a wood
preservative. The treatment process included the steaming,
drying, and pressure soaking of wood with PCP and diesel fuel.
After the wood is placed in the chamber and pressurized, PCP,
fuel oil, wood sugar, and water are discharged as process
effluent. In addition, phenol, lead, and cadmium were
by-products of the wood treating prodess. From 1959 to 1970,
the discharged process effluent was precipitated with caustic
soda and aluminum sulfate, passed through a sand filter, and
discharged into an on-site drainage ditch. The recovered sludge
was then deposited into two unlined pits on-site. At the time
the plant was in operation, 500 gallons of heavily contaminated
process effluent containing phenols, heavy metals, and PCP were
processed. PCP, phenol, lead and. cadmium are toxic pollutants
pursuant to Section 307(a) of the Clean Water Act. PCP and
phenol have also been designated as "hazardous wastes" pursuant
to Section 3001 of RCRA. Accordingly, these wastes are
hazardous substances pursuant to Section 101(14) of CERCLA.
3. Strength of Evidence Tracing the Wastes at the Site
to the Settling Parties
As the operator of the Site from 1954 to 1988, and the owner
of the Site from 1954 to the present, Coleman Evans Wood
Preserving Company is a responsible party. Likewise, as
president and majority shareholder of Coleman Evans from 1972 to
the present, Jack Coleman actively participated in the
management and direction of the company and is liable as a
operator of the Site. Substantial discovery has been taken on
the issue of liability and has established that the Defendants
are responsible parties.
4. Ability of the Settling Parties to Pay
At the time that this matter was referred, past costs for
the 1985 removal action totalled approximately $400,768. At the
writing of this memorandum, past costs— including costs for the
1985 removal, the/Remedial. Investigation/Feasibility Study, and
the Remedial Design-- total $2,591,489. The Region anticipates
the the remedial action will cost from $17 million to $25
million dollars.
Throughout discussions with the Defendants, they have
maintained that they did not have the financial means to fully
reimburse the Uhited States for past costs or for future costs.
Since past and future costs at the Site are substantial, the
Defendants were audited by the United States during August and
September 1988. These audits revealed two significant factors
to be taken into account in assessing the Defendants' ability to
pay; (1) the fair market value and liquidity of
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stocks held in closely held corporations by Jack Coleman; and
(2) lawful exemptions from execution by judgment creditors under
Florida law of Jack Coleman's assets. The statements of
financial condition of Coleman Evans Wood Preserving Company and
Jack Coleman are as follows:
Coleman Evans Wood Preserving Company
As of May 31. 1988
Assets
Cash $ 12,492
Accounts Receivable 13,852
Inventory 89,457
Prepaid taxes 1,366
Deposits 75
Cash surrender value of life insurance 10,995
Loans to employees
Accrued interest income -
Total Current Assets $128,237
Depreciable fixed assets 197,074
Accumulated depreciation (190,518)
Land 10,000
Incorporation expense 273
Prepaid insurance 6.814
Total Assets $ 151.880
Liabilities
Current Liabilities $
Accounts payable 13,373
Taxes payable 2.939
Total Liabilities 16.312
Total Value of Coleman Evans $135,568
Stockholders' Eouitv $135,568
Jack Coleman
Cash
Florida Federal Savings Bank
Johnson Lane, Space Smith and Co., Inc.
$ 2,895.00
$ 25,548.12
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-5-
Securities
American Celcure Wood
Preserving Co.
Coleman Evans Wood
Preserving Co.
American Cross-Arm Co., Inc.
45 West Duval Inc.
Gamma Associates, Ltd.
Partnership
Insurance (Exempt under Florida Law)
Massachusetts Mutual
No Value
No Value
$238,573.72
25,742.98
No Value
Cash Value
43,211.34
Government Issue Insurance
Jewelry
None
Approximate
Market Value
$ 1500.00
Total Assets of Jack Coleman
$293,259.82
Total Assets of Coleman Evans and Jack Coleman
(Less Exempt Insurance) $446.139.82
Coleman Evans ceased operating as a business in September
1988 and is in the process of liquidating. There will never be
any additional revenues forthcoming from Coleman Evans. Thus in
'many respects, ¦ Coleman Evans is de facto bankrupt.
Approximately $264,316.70 of the assets held by Jack Coleman
represent the cash value of stock in two closely held
corporations in which J^ck Coleman is the majority shareholder.
According to Jack Coleman, the value of this stock is
$221,298.00 which is $17,275.72 less than the stock was valued
by the audit. Therefore, in assessing the Defendants' ability
to pay, the liquidity and fluctuating value of stocks in Coleman
Evans, American Cross Arm, arid 45 West Duval were taken into
account.
Under Florida law, annuities, life insurance policies, and
the home are exempt from execution by a judgment creditor.
Moreover# assets held jointly with a .spouse not subject to
judgment are exempt from execution. Jack Coleman and his wife
own various annuities, proceeds of life insurance policies, and
a home. However, since these assets are held jointly with his
wife and in any event are exempt from execution, Jack Coleman's
ability to pay was primarily based on the value of non-exempt
assets that were not held with his wife.
While ability to pay for a CERCLA claim is not a.defense to
liability, ability to pay is. an issue that was reconciled with
the value of obtaining a sum certain through settlement and the
value of obtaining a judgment and receiving an uncertain amount
through execution. It is evident frbm the audit that Coleman
Evans and Jack Coleman are unable to pay for 100% of past and
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-6-
future costs. Nevertheless, the United Stfates received most, if
not all, of the liquid assets of Jack Coleman and Coleman Evans.
5. Litiqative Risks in Proceeding to Trial
a. Admissibility of the Government's Evidence
There appear to be no procedural or substantive problems in
the admissibility of the government's evidence.
b. Adequacy of the Government's Evidence
The government's sampling and analytical data is adequate.
However, the Defendants would have challenged the adequacy of
the evidence concerning Jack Coleman's individual liability.
Discovery demonstrated that Jack Coleman had actively
participated in the management of the company and.had directed,
in his capacity as president and majority shareholder of the
company, the disposal of hazardous substances at the site.
Nevertheless, Jack Coleman alleged that he was not an operator
under Section 107 of CERCLA. The United States would have
likely prevailed in this instance.
Jack Coleman and Coleman would also have challenged the
adequacy of the government's cost documentation. The government
had not begun to reconcile costs incurred with the cost
documentation package. The process probably would have detected
some irregularities in the documentation. However, most of the
costs would have been appropriately documented.
c. Availability of Defenses
In the answer to the United States' Complaint, Coleman Evans
asserted five affirmative defenses. All of these defenses are
without merit.
Jack Coleman asserted nine affirmative defenses. Likewise,
many of these defenses were without merit. However, two of
these defenses are worthy of discussion. Jack Coleman asserted
pursuant to Section 107(b)(3) of CERCLA that: (1) the releases
at the Site were caused solely by acts or omissions of third
parties who are not employees or agents and whose acts or
omissions did not occur in connection with a contractual
relationship existing directly or.indirectly with him; and (2)
the majority interest of Coleman Evans was acquired by Jack
Coleman through inheritance.
While Jack Coleman may be able to prove the threshold
requirements of these defenses, he must additionally demonstrate
by a preponderance of the evidence that he took precautions
against foreseeable acts or omissions of third parties and the
consequences that could foreseeably result from such acts or
omissions. Discovery demonstrated that after Jack Coleman
acquired the Site through inheritance and during his tenure as
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-7-
president of the corporation, he continued to contribute to the
contamination at the Site by failing to cease wood treating
operations and disposal practices. Thus, in light of the
Defendant's failure to take precautions, the United States would
prevail on a motion to dismiss on all of the affirmative
defenses asserted by Jack Coleman.
6. Public Interest Considerations
Entering into the proposed settlement will demonstrate to
the public that inability to pay is not a defense to CERCLA.
Moreover, this settlement shows the public that the United
States will aggressively seek to collect all available monies
from responsible parties.
7. Precedential Value
This settlement is of significant precedential value for two
reasons: (1) the granting of an "extraordinary circumstances"
exception to reop.eners pursuant to Section 122(f) (6) of CERCLA;
and (2) the effective date of the release.
The Agency's policy on "Covenants Not To Sue Under SARA,"
July 10, 1987, states that EPA may grant a covenant not to sue
without.reopeners upon a showing pursuant to Section 122(f)(6)
of CERCLA that "extraordinary circumstances" exist and "other
terms, conditions, or requirements of the agreement ... are
sufficient to provide all reasonable assurances that public
health and the environment will be protected from any future
releases at or from the facility."
In determining whether extraordinary circumstances exist,
the President may assess "the volume, toxicity, mobility,
strength of evidence, ability to pav (emphasis added),
litigative risks, public interest considerations, precedential
value, and inequities and aggravating factors." This guidance
also requires prior approval of the waiver of reopener by the
Assistant Administrators for OECM and OSWER and the Assistant
Attorney General. Representatives from these respective offices
have been briefed and approval for this provision has been
obtained.
In this settlement, the most prevalent factor which supports
an extraordinary circumstances release is the ability to pay by
the Defendants. As discussed earlier in this memorandum, the
United States contracted a CPA to conduct a financial audit of
the Defendants. The United States also received copies of tax
returns for the past five years, and where necessary, requested
the Defendants to supply additional information in the form of
an affidavit.
After the financial positions of the Defendants were
verified by the audits and other information, the Defendants
offered to settle for $350,000; however, this offer was
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-8-
conditioned upon the granting of a covenant not to sue without
reopeners under the "extraordinary circumstances" exception to
reopeners under Section 122(f)(6) of CERCLA. Upon a showing of
extraordinary factors, such as those factors listed above, the
"extraordinary circumstances" exception would release the
Defendants from future liability for unknown conditions at the
time the remedial action has been certifiied as complete. In
this instance, negotiators for the government believed that the
Defendants' ability to pay sufficed for a showing of
n extraordinary circumstances. "
Notwithstanding the requirement of certification of the
remedy prior to the granting of an "extraordinary circumstances"
release, the Defendants requested the release prior to the
certification of the remedy. This kind of release contradicts
the Agency's general policy position that no release for future
liability can be granted prior to the certification of the
remedial action. According to Agency guidance, certification of
a remedy prior to a release for future liability ensures that
viable parties remain responsible for the remedy if the remedy
at the site is not working. However, in this instance, the
financial information analyzed by the government showed that the
Defendants will never be in a position to implement any type of
remedy. Coleman Evans Wood Preserving Company is no longer an
operating entity and Jack Coleman is of advanced age and unless
he wins a lottery, his financial position is unlikely to change.
Therefore, the certification policy would not be effectuated by
pursuing these Defendants since their resources are limited.
Thus, the granting of an extraordinary circumstance release with
an immediate effective date will reserve valuable EPA resources
that can be expended in litigating sites with viable responsible
parties. Moreover, the interests of the government are
protectied since the covenant not to sue is conditioned upon the
accuracy of the information received in the audits and
affidavits.
In sum, this settlement has precedential value inasmuch as
the United States is granting an immediate release from future
liability. This type of settlement is the exception, not the
rule, a!nd is recommended by the Region only after careful
analysis of of all relevant facts.
8. Value of Obtaining a Present Sum Certain
The value of obtaining a present sum for the Fund in the
amount of $350,000 outweighs the possibility of receiving a far
less amount by obtaining a judgment and executing on the
judgment. In fact, if the case were fully litigated, the
possibility of a declaration of bankruptcy by the Defendants
increases substantially. Thus, the value of obtaining a present
sum certain is of substantial benefit to the government.
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-9-
9. Inequities and Aggravating Factors
This settlement presents no apparent inequities to the
settling parties. However, the "extraordinary circumstances"
release is an inherent inequity for the government as well as
other responsible parties seeking full releases at other
Superfund sites. In spite of this inherent inequity, this
settlement is a result of an extensive analysis of the financial
position of the Defendants and it is hot the type of settlement
which should be followed at other Superfund sites. Moreover,
the government is receiving substantially all of the Defendants
liquid assets. Therefore, in light of all the facts surrounding
this type of a settlement and with the knowledge that this is a
"one of a kind" settlement, the inequities are minimal.
10. Mature of the Case Remaining After Settlement
The settlement contains an immediate release from future
liability; therefore, after entry of the consent decree, the
government's enforcement actions against the Defendants will be
concluded. Moreover, there are no other responsible parties to
proceed against for any remaining past costs or future costs.
Nevertheless, in light of the Defendants' ability to pay, this
settlement represents everything that the government could
expect to receive in litigation or in settlement at the site.
By settling this case in this manner, the government could close
the books on a site that has been the subject of environmental
enforcement activities since 1980 and use its resources at other
Superfund sites with viable responsible parties. In sum, while
the Defendants will not be reimbursing the Fund for 100% of past
and future costs, there is no realistic expectation that this
could ever be realized. Therefore, in consideration of all the
factors surrounding this settlement, the Region recommends
Headquarters and Department of Justice concurrence.
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ENFORCEMENT;GGNFr-"NTIAL
ATTORNEY WORK PRC jCT
TEN POINT SETTLEMENT ANALYSIS
CONSENT DECREE FOR REMOVAL COSTS
POTTER'S PITS SITE. BRUNSWICK/ NORTH CAROLINA
I. INTRODUCTION
Region IV proposes to enter into a consent decree, pursuant to
Section 107 of CERCLA, for the Potter's Pits Site, Brunswick,
North Carolina (the "Site"). This document sets forth the terms
of the settlement, the site background, and assesses the ten
point settlement criteria set forth in the Interim CERCLA
Settlement Policy announced as part of EPA's Hazardous Waste
Enforcement Policy, 50 Fed. Reg. 5034 (Feb. 5, 1985). Since
this settlement compromises more than 50% of the total past and
future costs, the Region must obtain Headquarters'
concurrence, pursuant to the June 17, 1988, memorandum entitled
"Revision of CERCLA Civil Judicial Settlement Authorities Under
Delegations 14-13-B' and 14-14-E",OSWER Directive 9012.,10-a.
Additionally, since this settlement contains an "extraordinary
circumstances" exception, Headquarters' concurrence is required,
pursuant to the July iO, 1987, memorandum entitled "Covenants
Not to Sue Under SARA." Region IV recommends EPA's approval of
the consent decree.
II. TERMS OF SETTLEMENT
Pursuant to Sections 107 and 122 of the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act of
1986, Pub. L. 99-499 (CERCLA), 42 U.S.C. SS 9607 and 9622, the
United States Environmental Protection Agency, Region IV, (EPA)
and Jimmy and Peiggy Cain and Ada Anderson, and the Estate of
Hubert Anderson (Settling Defendants) propose to enter into a
Consent Decree for settlement of Defendants' past and future
liability with regard to cleanup of the Potter's Pits Site.
The key provisions of the Consent Decree include Section IX.,
Covenant Not to Sue, Section XIII., Contribution Protection,
Section X., Reservation of Rights, and Section VI., Payment. In
Section IX., it is agreed that the United States will not take
any other civil or administrative action related to or arising
from existing contamination'at the Site against the settling
defendants. Therefore, the settling defendants are being
released from both past and future liability. In consideration
for this release, the settling defendants agree not to sue the
government for any liability arising out of its activities at
the site and not to assert any claims for reimbursement from
Aepa's past costs total $1,822,477 as of March 21, 1992,
and the Agency is recovering $10,000, which represents a 99.5%
compromise of the claim for past costs. Projected future costs
total $10,000,000, 100% of which is compromised by this
settlement.
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the Superfund. In Section XIII., it is agreed that settling
defendants are entitled to protection from contribution claims,
for matters addressed in the Consent Dedree, as provided by
CERCLA Section 113(f)(2), 42 U.S.C. S 9613(f)(2). In Section
X., the government reserves the right to pursue the settling
defendants for failure to comply with the Consent Decree,
natural resource damage, or any criminal liability. There are
no provisions for reopener for unknown conditions in light of
the extraordinary circumstance of inability to pay. Therefore,
this settlement: grants an extraordinary circumstances exception
to reopeners pursuant to Section 122(f)(6) of CERCLA. The
settling defendants have already agreed to the terms of
settlement and based on a review of the record, pre-approval
does not appear to have been obtained. Concurrence in the
extraordinary circumstances exception to reopeners is being
sought herewith.
In developing the provisions of Section VI., the United States
considered certain financial information provided by the
Settling Defendants and determined that they are unable to pay
all past costs and any future costs incurred by EPA in
responding to the release or threat of release of hazardous
substances at the Site. The Cains are financially able to pay
the amount of $4,000 within 15 days of entry of the Consent
Decree. Mrs. Anderson and the estate of Hubert Anderson can
commit to paying a total of $6,000 over a period of twelve
months as followst $2,000 within twenty-five days of the entry
of the Consent Decree; $1,000 within three months of the entry;
$1,000 within six months of entry; $1,000 within nine months of
entry; and $1,000 within twelve months of entry. The proposed
Consent Decree is attached.
Pursuant to the June 17, 1988, memorandum entitled "Revision of
CERCLA Civil Judicial Settlement Authorities Under Delegation
14-13-B and 14-14-E" OSWER Directive 9012.10-A, Headquarters'
concurrence is necessary since the settlement compromises more
than 50% of the total past and future costs and provides for an
extraordinary circumstances covenant not to sue.
III. BACKGROUND
A. Site Description
The Potter's Pits Site consists of a five-acre area located in
the Sandy Creek Acres Subdivision, Brunswick County, North
Carolina. From 1969 to 1976, the Skipper family used the
property to dispose of septic tank sludge, oil sludge, creosote
and other waste materials. These wastes were hauled from local
businesses, and possibly from other locations, and placed in
low, unlined pits or directly on the land surface during these
years.
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B. Response Actions and Enforcement History
In 1976, the Coast Guard responded to ari oil spill into nearby
waterways resulting from a release from one of the unlined
pits. All oil in the pits was pumped out and the sludge on the
bottom was removed. Two pits still contained a non-recoverable
sludge which was mixed with sand and buried on the site.
In the early 1980s, the Potter's Pits Site was developed into a
residential community known as Sandy Creek Acres and eventually
the Town of Sandy Creek. An emergency removal was conducted in
1984 following a resident's discovery of creosote, spill
residue, tank bottom sludge, and septic tank sludges on his
property. Contaminants associated with these materials were
also found in well water. In March 1984, a Fund-lead removal
action was commenced which resulted in the relocation of three
families and the installation of a nine well groundwater
monitoring system. On March 31, 1989, the site was placed on
the NPL with a hazardous ranking score of 29.14.
Between 1969 and 1976, the Skipper brothers, Otto, Wade and
Albert, were engaged in the septic tank business in the
Wilmington area, each owning and operating his own company.
Although it is generally assumed that all three brothers
contributed to waste disposal at the Site, evidence obtained
definitively links only Otto Skipper's operations with the
Site. In 1979, Otto Skipper purchased the property from his
mother by securing a loan from Wachovia Bank and Trust Company.
After he failed to make payments, Wachovia foreclosed on the
property in January 1980.
In October 1980, Wachovia sold the property to Wilbur and
Barbara McLamb and Jimmy and Peggy Cain. In early 1981, the
Cains sold their interest to Willard and Kathleen Buffkin only
to repurchase it several months later. Within a couple of days,
they sold their interest to the McLambs. The McLambs then sold
a one-half interest to Hubert and Ada Anderson.
In May 1982, the McLambs and the Andersons formed Investors
Management Corporation (IMC), each owning 1,000 of the 2,000
shares of stock. Wilbur McLamb was the director and Hubert
Anderson was the president of IMC. Ada Anderson served as
vice-president and Barbara McLamb held the position of assistant
secretary. In June 1982, the McLambs and Andersons sold the
property to IMC for development of a residential subdivision to
be known as Sanely Creek Acres. The Site, identified as lots 85
and 86, was purchased from IMC by Earl and Dixie Gurkin on
July 29, 1982, and March 25, 1983, respectively.
On July 11, 1983, Earl Gurkin reported to the State that he had
uncovered creosote, oil and septic sludge in his fronit yard. An
investigation conducted by EPA documented the presence of
various organic contaminants in groundwater and soil on Site.
-3-
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Response actions at the Site totalled $1,496,016.31 as of
March 21, 1992. Of this amount, $365,208.24 is attributable to
the 1984-1990 removal action. It is projected that future
response costs will total an estimated 10 million dollars.
On September 30, 1989, the government filed a complaint,
pursuant to Section 107(a) of CERCLA, against Otto Skipper, the
McLambs, the Cains, the Andersons and Investors Management
Corporation in the Eastern District of North Carolina. Since
that date, Hubert Anderson has died, and the Court has entered a
default judgment against Otto Skipper. An analysis of the Cains
and Andersons financial standing revealed that they are not able
to pay more than the offer contained herein. The financial
analyses, performed by JWF Associates at the request of DOJ, is
attached hereto.
IV. ANALYSIS OF THE TEN POINT SETTLEMENT CRITERIA
An analysis of the settlement under the ten point criteria
included in the Interim CERCLA Settlement Policy announced as
part of EPA's Hazardous Waste Enforcement Policy, 50 Fed. Reg.
5034 (Feb. 5, 1985) is set forth below.
1. Volume of Wastes Contributed
The Cains and the Andersons did not contribute any of the wastes
to the Site. Available evidence indicates that all of the
wastes at the Site were transported there by the Skipper
brothers.
2. Nature of Wastes at the Site
The most prevalent chemicals at the Site include toluene,
xylene, benzene, chlorobenzene, naphthalene, ethyl benzene, and
creosote. These chemicals are associated with septic tank and
oil sludge.
3. Strength of Evidence Linking Wastes at the Site to the
Settling Defendants
According to deeds recorded in Brunswick County, Wachovia Bank
and Trust Company had foreclosed on the Site property on
January 3, 1980, and sold it to Wilbur and Barbara McLamb and
Jimmy and Peggy Cain on October 8, 1980. The McLambs and Cains
surveyed and subdivided the property into lots known as the
Sandy Creek Acres Subdivision. On April 16, 1981, the Cains
sold their interest in the property to the McLambs. On
April 30, 1981, the McLambs sold an undivided one-half interest
in the property to H.J. and Ada B. Anderson. On May 18, 1982,
Investors Management Corporation (IMC) filed its papers of
incorporation in South Carolina. On June 28, 1982, the McLambs
and the Andersons sold the subject Site property to IMC. IMC
then sold the property to Earl B. and Dixie Gurkin.
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The innocent landowner defense is not available to the Cains,
McLambs, Andersons and IMC, since the evidence indicates that
they must have had actual or constructive knowledge of the
previous disposal at the Site prior to their purchase of the
property. Local residents have indicated that the pits were
obvious to anyone walking the property at the tine these
Defendants purchased and developed it. Finally/, the grading and
other subdivision development activities conducted while the
Andersons owned the property, may constitute active "disposal"
of the hazardous substances.
4. Ability of the Settling Parties to Pay
Hubert Anderson had a cash flow problem prior to his death on
July 17, 1991. The real estate that he owned, now in his wife's
name, is located in an economically depressed area. The total
appraised value of the. property, which includes Mrs. Anderson's
home, is $205,215.50. The property is heavily mortgaged, and,
if liquidated, would probably not sell for more than the
outstanding mortgages. Hubert Anderson's estate does not have
the cash flow at this tim^to pay his final medical and funeral
expenses. Mrs. Anderson only owns what she inherited from her
husband. She has also been hospitalized and has been unable to
pay her medical expenses. In Hubert Anderson's retirement
program, there were no benefits to be received by his widow, and
she is not old enough to receive Social Security benefits. Her
source of income for living expenses is a part-time job. Jimmy
Cain is a sole proprietor, operating a surveying business.
Business income has ranged from $4,000 to $8,000 over the last
several years. Mrs. Cain is not employed and has no earned
income. The Cains have not had sufficient income to pay any
federal or state taxes for the last three years, other than
self-employment tax on the sole proprietorship. They reported a
net worth of approximately $18,000 in June of 1990. Half of
their assets are automobiles and a mobile home. The only liquid
asset available is approximately $800 in a checking account.
The CainB have substantial outstanding debt, securing virtually
all of their assets, and have little or no income to support
additional debt.
Reference for the preceding statements is made to the financial
documents found in the Appendix to this document.
5. Litigation Risks in Proceeding to Trial
a. Admissibility of the Government's Evidence
There are no problems associated with this factor.
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b. Adequacy of the Government's Evidence
The Government's strongest argument for .asserting liability
against the Andersons is based on the redistribution theory
asserted in Tanolewood East Homeowners v. Charles-Thomas. Inc..
849 F.2d 1568 (5th Cir. 1988). In that case, it was held that
activities which cause the contaminated soil to be moved, around
amount to redistribution of hazardous waste. The Andersons
owned the property when it was being developed, that is, when
soil was being moved around. Therefore, they are liable for
redistributing or redisposing of hazardous waste. This theory
is novel and may not be accepted by the Court. Evidence of the
pits being covered over is circumstantial in that it amounts to
the pits being there before the Andersons purchased and not
being there when they sold the property to the Gurkins. The
redistribution theory does not apply to the Cains, since they
owned the property before any landscaping activities began.
Evidence of liability on the part of the Cains is very weak as
it will be difficult to prove that they had any knowledge of the
pits at the time of their ownership.
c. Availability of Defenses
There are four identified litigation risks relative to this
factor. First, there is a question as to the liability of the
Coast Guard resulting from possible improper disposal. In 1976,
the Coast Guard buried what may have been fuel oil sludge on the
Site during the 1976 cleanup, thereby arguably acting as an
operator. Second, in an interview with TechLaw, Wade Skipper
indicated that the Coast Guard had given his brother. Otto,
permission to dig the pits and to dispose of oil in them.
Presumably, Wade was implying that Otto acted as a contractor
for the Coast Guard in some of its oil spill cleanup activities
in the area, but this was never clearly stated. Wade is now
deceased and cannot clarify his statement. The Coast Guard
informed TechLaw that it does not maintain records related to
cleanup activities for more than 5 years and has no records
related to the Site. Third, there is an issue regarding the
liability of Wachovia Bank and Trust. The Bank has not been
named as a PRP in view of the following facts t its former
ownership by foreclosure began and ended prior to the enactment
of CERCLA; no profit was made on the transaction; the Bank sold
to purchasers who had knowledge of the former use of the
property; no disposal occurred during the time the Bank held the
property. However, the other PRPs. feel that Wachovia should be
named since its relationship to the property is also one of
former ownership. Finally, the Cains and Andersons will be able
to show that they are financially incapable of paying any
significant amount of the cleanup costs being sought.
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6. Public Interest Considerations
The public Interest Is best served through this settlement since
It would eliminate further expenditure of money In pursuing PRPs
who are unable to make a significant contribution to the
defrayal of past or future costs and it demonstrates to the
public that inability to pay is not a defense to. CERCLA., It is
anticipated that the future costs of remediating this Site could
total a minimum of 10 million dollars. The small sum of money
the government could posisibly recover from these defendants,
beyond the settlement amount herein, would be outweighed by the
cost of pursuing them. Additionally, both parties could be
forced into bankruptcy if compelled to pay more. Yet, this
settlement shows that the United States will aggressively seek
to collect all available monies from responsible parties.
7. Precedential Value
This settlement is of significant precedential value in that it
grants an "extraordinary circumstances" exception to reopeners
pursuant to Section 122(f)(6) of CERCLA.
The Agency's policy on "Covenants Not to Sue Under SARA,"
July 10, 1987, states that EPA may grant a covenant not to sue
without reopeners (emphasis added) upon a showing pursuant to
Section 122(f)(6) of CERCLA that "extraordinary circumstances"
exist and "other terms, conditions, or requirements of the
agreement ... are sufficient to provide all reasonable
assurances that public health and the environment will be
protected from any future releases at or from the facility."
In determining whether extraordinary circumstances exist, the
President may assess "the volume, toxicity, mobility, strength
of evidence, ability to pav (emphasis added), litigative risks,
public interest considerations, precedential value, and
inequities and aggravating factors."
In this settlement, the most prevalent factor which supports an
extraordinary circumstances release is the ability to pay of the
settling defendants. The United States hired an accounting firm
to assess the financial conditions of the settling defendants.
After the financial posititons of the settling defendants were
verified, the Cains offered to settle for $4,000 and the
Andersons for $6,000. However, this offer was conditioned upon
the granting of a covenant not to sue without reopeners for
unknown conditions. Upon a showing of extraordinary factors,
such as those factors listed above, the "extraordinary
circumstances" exception would release the settling defendants
from future liability for unknown conditions at the time the
remedial action has been certified as complete. In this
-7-
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instance, negotiators for the government believed that the
defendants' inability to pay sufficed for a showing of
"extraordinary circumstances."
8. Value of Obtaining a Present Sum Certain
In this case, partial reimbursement is preferable to attempting
to collect from a bankruptcy estate or not collecting at all.
Due to the financial status of the Cains and Mrs. Anderson's
inability to even pay medical expenses, the likelihood of
obtaining a larger sum in the future is virtually nonexistent.
Thus, the value of obtaining a present sum certain is of
substantial benefit to the government.
9. Inequities and Aggravating Factors
There are no apparent inequities associated with this
settlement.
10. Nature of Case Remaining After Settlement
The settlement contains an immediate release from future
liability, therefore, after entry of the consent decree, the
United States' enforcement actions against the Cains and the
Andersons will be concluded. There are no specific reopeners in
the Consent Decree, but Section X., Reservation of Rights,
reserves the government's right to pursue the settling
defendants for failure to comply with the consent decree,
natural resource damages or any criminal liability. The
settlement does not provide for any environmental projects since
EPA is undertaking the entire cleanup and the settling
defendants could not afford to undertake such a project. There
are no provisions for injunctive relief in this settlement.
There is still a cost recovery action pending against Wilbur
McLamb, who may be able to pay about $300,000 of past removal
costs. Additionally, investigation is being done to uncover
generator PRPs. As of April 1991, one possible generator PRP
had been found. If the company under investigation is
determined to be a PRP, then some of the future costs may be
recoverable.
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ENFORCEMENT CONFI"-,NTIAL
ATTORNEY WORK PRC. jCT
TEN POINT SETTLEMENT ANALYSIS
CONSENT DECREE FOR REMOVAL COSTS
POTTER'S PITS SITE. BRUNSWICK. NORTH CAROLINA
I. INTRODUCTION
Region IV proposes to enter into a consent decree, pursuant to
Section 107 of CERCLA, for the Potter's Pits Site, Brunswick,
North Carolina (the "Site"). This document sets forth the terms
of the settlement, the site background, and assesses the ten
point settlement criteria set forth in the Interim CERCLA
Settlement Policy announced as part of EPA's Hazardous Waste
Enforcement Policy, 50 Fed. Reg. 5034 (Feb. 5, 1985). Since
this settlement compromises more than 50% of the total past and
future costs,1 the Region must obtain Headquarters'
concurrence, pursuant to the June 17, 1988, memorandum entitled
"Revision of CERCLA Civil Judicial Settlement Authorities Under
Delegations 14-13-B and 14-14-E", OSWER Directive 9012.10-a.
Additionally, since this settlement contains an "extraordinary
circumstances" exception, Headquarters' concurrence is required,
pursuant to the July 10, 1987, memorandum entitled "Covenants
Not to Sue Under SARA." Region IV recommends EPA's approval of
the consent decree.
II. TERMS OF SETTLEMENT
Pursuant to Sections 107 and 122 of the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act of
1986, Pub. L. 99-499 (CERCLA), 42 U.S.C. SS 9607 and 9622, the
United States Environmental Protection Agency, Region IV, (EPA)
and Jimmy and Peggy Cain and Ada Anderson and the Estate of
Hubert Anderson (Settling Defendants) propose to enter into a
Consent Decree for settlement of Defendants' past and future
liability with regard to cleanup of the Potter's Pits Site.
The key provisions of the Consent Decree include Section IX.,
Covenant Not to Sue, Section XIII., Contribution Protection,
Section X., Reservation of Rights, and Section VI., Payment. In
Section IX., it is agreed that the United States will not take
any other civil or administrative action related to or arising
from existing contamination at the Site against the settling
defendants. Therefore, the settling defendants are being
released from both past and future liability. In consideration
for this release, the settling defendants agree not to sue the
government for any liability arising out of its activities at
the site and not to assert any claims for reimbursement from
EPA's past costs total $1,822,477 as of March 21, 1992,
and the Agency is recovering $10,000, which represents a 99.5%
compromise of the claim for past costs. Projected future costs
total $10,000,000, 100% of which is compromised by this
settlement.
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the Superfund. In Section XIII., it is agreed that settling
defendants are entitled to protection from contribution claims,
for natters addressed in the Consent Decree, as provided by
CERCLA Section 113(f)(2), 42 U.S.C. S 9613(f)(2). In Section
X., the government reserves the right to pursue the settling
defendants for failure to comply with the Consent Decree,
natural resource damage, or any criminal liability. There are
no provisions for reopener for unknown conditions in light of
the extraordinary circumstance of inability to pay. Therefore,
this settlement grants an extraordinary circumstances exception
to reopeners pursuant to Section 122(f)(6) of CERCLA. The
settling defendants have already agreed to the terms of
settlement and based on a review of the record, pre-approval
does not appear to have been obtained. Concurrence in the
extraordinary circumstances exception to reopeners is being
sought herewith.
In developing the provisions of Section VI., the United States
considered certain financial information provided by the
Settling Defendants and determined that they are unable to pay
all past costs and any future costs incurred by EPA in
responding to the release or threat of release of hazardous
substances at the Site. The Cains are financially able to pay
the amount of $4,000 within 15 days of entry of the Consent
Decree. Mrs. Anderson and the estate of Hubert Anderson can
commit to paying a total of $6,000 over a period of twelve
months as followss $2,000 within twenty-five days of the entry
of the Consent Decree; $1,000 within three months of the entry;
$1,000 within six months of entry; $1,000 within nine months of
entry; and $1,000 within twelve months of entry. The proposed
Consent Decree is attached.
Pursuant to the June 17, 1988, memorandum entitled "Revision of
CERCLA Civil Judicial Settlement Authorities Under Delegation
14-13-B and 14-14-E" OSWER Directive 9012.10-A, Headquarters
concurrence is necessary since the settlement compromises more
than 50% of the total past and future costs and provides for an
extraordinary circumstances covenant not to sue.
III. BACKGROUND
A. Site Description
The Potter'3 Pits Site consists of a five-acre area located in
the Sandy Creek Acres Subdivision, Brunswick County, North
Carolina. Prom 1969 to 1976, the Skipper family used the
property to dispose of septic tank sludge, oil sludge, creosote
and other waste materials. These wastes were hauled from local
businesses, and possibly from other locations, and placed in
low, unlined pits or directly on the land surface during these
years.
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B. Response Actions and Enforcement History
In 1976, the Coast Guard responded to an oil spill into nearby
waterways resulting from a release from one of the unlined
pits. All oil in the pits was pumped out and the sludge on the
bottom was removed. Two pits still contained a non-recoverable
sludge which was mixed with sand and buried on the site.
In the early 1980s, the Potter's Pits Site was developed into a
residential community known as Sandy Creek Acres and eventually
the Town of Sandy Creek. An emergency removal was conducted in
1984 following a resident's discovery of creosote, spill
residue, tank bottom sludge, and septic tank sludges on his
property. Contaminants associated with these materials were
also found in well water. In March 1964, a Fund-lead removal
action was commenced which resulted in the relocation of three
families and the installation of a nine well groundwater
monitoring system. On March 31, 1989, the site was placed on
the NPL with a hazardous ranking score, of 29.14.
Between 1969 and 1976, the Skipper brothers, Otto, Wade and
Albert, were engaged in the septic tank business in the
Wilmington area, each owning and operating his own company.
Although it is generally assumed that all three brothers
contributed to waste disposal at the Site, evidence obtained
definitively links only Otto Skipper's operations with the
Site. In 1979, Otto Skipper purchased the property from his
mother by securing a loan from Wachovia Bank and Trust Company.
After he failed to make payments, Wachovia foreclosed on the
property in January 1980.
In October 1980, Wachovia sold the property to Wilbur and
Barbara McLamb and Jimmy and Peggy Cain. In early 1981, the
Cains sold their interest to Willard and Kathleen Buffkin only
to repurchase it several months later. Within a couple of days,
they sold their interest to the McLambs. The McLambs then sold
a one-half interest to Hubert and Ada Anderson.
In May 1982, the McLambs and the Andersons formed Investors
Management Corporation (IMC), each owning 1,000 of the 2,000
shares of stock. Wilbur McLamb was the director and Hubert
Anderson was the president of IMC. Ada Anderson served as
vice-president and Barbara McLamb held the position of assistant
secretary. In June 1982, the McLambs and Andersons sold the
property to IMC for development of a residential subdivision to
be known as Sandy Creek Acres. The Site, identified as lots 85
and 86, was purchased from IMC by Earl and Dixie Gurkin on
July 29, 1982, and March 25, 1983, respectively.
On July 11, 1983, Earl Gurkin reported to the State that he had
uncovered creosote, oil and septic sludge in his front yard. An
investigation conducted by EPA documented the presence of
various organic contaminants in groundwater and soil on Site.
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Response actions at the Site totalled $1,496,016.31 as of
March 21, 1992. Of this amount, $365,208.24 is attributable to
the 1964-1990 removal action. It is projected that future
response costB will total an estimated 10 million dollars.
On September 30, 1989, the government filed a complaint,
pursuant to Section 107(a) of CERCLA, against Otto Skipper, the
McLambs, the Cains, the Andersons and Investors Management
Corporation in the Eastern District of North Carolina. Since
that date, Hubert Anderson has died, and the Court has entered a
default judgment against Otto Skipper. An analysis of the Cains
and Andersons financial standing revealed that they are not able
to pay more than the offer contained herein. The financial
analyses, performed by JWF Associates at the request of DOJ, is
attached hereto.
IV. ANALYSIS OF THE TEN POINT SETTLEMENT CRITERIA
An analysis of the settlement under the ten point criteria
included in the Interim CERCLA Settlement Policy announced as
part of EPA's Hazardous Waste Enforcement Policy, 50 Fed. Reg.
5034 (Feb. 5, 1985) is set forth below.
1. Volume of Wastes Contributed
The Cains and the Andersons did not contribute any of the wastes
to the Site. Available evidence indicates that all of the
wastes at the Site were transported there by the Skipper
brothers.
2. Nature of Wastes at the Site
The most prevalent chemicals at the Site include toluene,
xylene, benzene, chlorobenzene, naphthalene, ethyl benzene, and
creosote. These chemicals are associated with septic tank and
oil sludge.
3. Strength of Evidence Linking Wastes at the Site to the
Settling Defendants
According to deeds recorded in Brunswick County, Wachovia Bank
and Trust Company had foreclosed on the Site property on
January 3, 1960, and sold it to Wilbur and Barbara KcLamb and
Jimmy and Peggy Cain on October 8, 1980. The McLambs and Cains
surveyed and subdivided the property into lots known as the
Sandy Creek Acres Subdivision. On April 16, 1981, the Cains
sold their interest in the property to the McLambs. On
April 30, 1981, the McLambs sold an undivided one-half interest
in the property to H.J. and Ada B. Anderson. On May 18, 1982,
Investors Management Corporation (IMC) filed its papers of
incorporation in South Carolina. On June 28, 1982, the McLambs
and the Andersons sold the subject Site property to IMC. IMC
then sold the property to Earl B. and Dixie Gurkin.
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The innocent landowner defense is not available to the Cains,
McLamba, Andersons and IMC, since the evidence indicates that
they must have had actual or constructive knowledge of the
previous disposal at the Site prior to their purchase of the
property. Local residents have indicated that the pits were
obvious to anyone walking the property at the time these
Defendants purchased and developed it. Finally/, the grading and
other subdivision development activities conducted while the
Andersons owned the property, may constitute active "disposal"
of the hazardous substances.
4. Ability of the Settling Parties to Pay
Hubert Anderson had a cash flow problem prior to. his death on
July 17, 1991. The real estate that he owned, now in his wife's
name, is located, in an economically depressed area. The total
appraised value of the property, which includes Mrs. Anderson's
home, is $205,215.50. The property is heavily mortgaged, and,
if liquidated, would probably not sell for more than the
outstanding mortgages. Hubert Anderson's estate does not have
the cash flow at this timyto pay his final medical and funeral
expenses. Mrs. Anderson only owns what she inherited from her
husband. She has also been hospitalized and has been unable to
pay her medical expenses. In Hubert Anderson's retirement
program, there were no benefits to be received by his widow, and
she is not old enough to receive Social Security benefits. Her
source of income for living expenses is a part-time job. Jimmy
Cain is a sole proprietor, operating a surveying business.
Business income has ranged from $4,000 to $8,000 over the last
several years. Mrs. Cain is not employed and has no earned
income. The Cains have not had sufficient income to pay any
federal or state taxes for the last three years, other than
self-employment tax on the sole proprietorship. They reported a
net worth of approximately $18,000 in June, of 1990. Half of
their assets are automobiles and a mobile home. The only liquid
asset available is approximately $800 in a checking account.
The Cains have. substantial outstanding debt, securing virtually
all of their assets, and have little or no income to support
additional debt.
Reference for the preceding statements is made to the financial
documents found in the Appendix to this document.
5. Litigation Risks In Proceeding to Trial
a. ftHipi«^fbllltv of the Government's Evidence
There are no problems associated with this factor.
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b. Adequacy of the Government's Evidence
The Government's strongest argument for asserting liability
against the Andersons is based on the redistribution theory
asserted in Tanolewood East Homeowners v. Charles-Thomas. Inc..
849 F.2d 1568 (5th Cir. 1988)i In that case; it was held that
activities which cause the contaminated soil to be moved, around
amount to redistribution of hazardous waste. The Andersons
owned the property when it was being developed/ that is, when
soil was being moved around. Therefore, they are liable for
redistributing or redisposing of hazardous waste. This theory
is novel and may not be accepted by the Court. Evidence of the
pits being covered over is circumstantial in that it amounts to
the pits being there beforer the Andersons purchased and not
being there when they sold the property to the Gurkins. The
redistribution theory does not apply to the Cains, since they
owned the property before any landscaping activities began.
Evidence of liability on the part of the Cains is very weak as
it will be difficult to prove that they had any knowledge of the
pits at the time of their ownership.
c. Availability of Defenses
There are four identified litigation risks relative to this
factor. First, there is a question as to the liability of the
Coast Guard resulting from possible improper disposal. In 1976,
this Coast Guard buried what may have been fuel oil sludge on the
Site during the 1976 cleanup, thereby arguably acting as an
operator. Second, in an interview with TechLaw, Wade Skipper
indicated that the Coast Guard had given his brother, Otto,
permission to dig the pits and to dispose of oil in them.
Presumably, Wade was implying that Otto acted as a contractor
for the Coast Guard in some of its oil spill cleanup activities
in the area, but this was never clearly stated. Wade is now
deceased and cannot clarify his, statement. The Coast Guard
informed TechLaw that it does not maintain records related to
cleanup activities for more than 5 years: and has no records
related to the Site. Third, there is an issue regarding the
liability of Wachovia Bank and Trust. The Bank has not been
named as a PRP in view of the following facts t its former
ownership by foreclosure began and ended prior to the enactment
of CERCLA; no profit was made on the transaction; the Bank sold
to purchasers who had knowledge of the former use of the
property; no disposal occurred during the time the Bank held the
property. However, the other PRPs feel that Wachovia should be
named since its relationship to the property is also one of
former ownership. Finally, the Cains and Andersons will be able
to show that they are financially incapable of paying any
significant amount of the cleanup costs being sought.
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6. Public Interest Consideratlona
The public interest is best served through this settlement since
it would eliminate further expenditure of money in pursuing prps
who are unable to make a significant contribution to the
defrayal of past or future costs and it demonstrates to the
public that inability to pay is not a defense to. CERCLA. It is
anticipated that the future costs of remediating this Site could
total a minimum of 10 million dollars. The small sum of money
the government could possibly recover from these defendants,
beyond the settlement amount herein, would be outweighed by the
cost of pursuing them. Additionally, both parties could be
forced into bankruptcy if compelled to pay more. Yet, this
settlement shows that the United States will aggressively seek
to collect all available monies from responsible parties.
7. Precedential Value
This settlement is of significant precedential value in that it
grants an "extraordinary circumstances" exception to reopeners
pursuant to Section 122(f)(6) of CERCLA..
The Agency's policy on "Covenants Not to Sue Under SARA,"
July 10, 1987, states that EPA may grant a covenant not to sue
without reopeners (emphasis added) upon a showing pursuant to
Section 122(f)(6) of CERCLA that "extraordinary circumstances'1
exist and "other terms, conditions, or requirements of the
agreement ... are sufficient to provide all reasonable
assurances that public health and the environment will be
protected from any future releases at or from the facility."
In determining whether extraordinary circumstances exist, the
President may assess "the volume, toxicity, mobility, strength
of evidence, ability to pav (emphasis added), litigative risks,
public interest considerations, precedential value, and
inequities and aggravating factors."
In this settlement, the most prevalent factor which supports an
extraordinary circumstances release is the ability to pay of the
settling defendants. The United States hired an accounting firm
to assess the financial conditions of the settling defendants.
After the financial posititons of the settling defendants were
verified, the Cains offered to settle for $4,000 and the
Andersons for $6,000. However, this offer was conditioned upon
the granting of a covenant not to sue without reopeners for
unknown conditions. Upon a showing of extraordinary factors,
such as those factors listed above, the "extraordinary
circumstances" exception would release the settling defendants
from future liability for unknown conditions at the time the
remedial action has been certified as complete. In this
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instance, negotiators Cor the government believed that the
defendants' inability to pay sufficed for a showing of
"extraordinary circumstances."
8. Value of Obtaining a Present Sum Certain
In this case, partial reimbursement is preferable to attempting
to collect from a bankruptcy estate or not collecting at all.
Due to the financial status of the Cains and Mrs. Anderson's
inability to even pay medical expenses, the likelihood of
obtaining a larger sum in the future is virtually nonexistent.
Thus, the value of obtaining a present sum certain is of
substantial benefit to the government.
9. Inequities and Aggravating Factors
There are no apparent inequities associated with this
settlement.
10. Nature of Case Remaining After Settlement
The settlement contains an immediate release from future
liability, therefore, after entry of the consent decree, the
United States' enforcement actions against the Cains and the
Andersons will be concluded. There are no specific reopeners in
the Consent Decree, but Section X., Reservation of Rights,
reserves the government's right to pursue the settling
defendants for failure to comply with the consent decree,
natural resource damages or any criminal liability. The
settlement does not provide for any environmental projects since
EPA is undertaking the entire cleanup and the settling
defendants could not afford to undertake such a project. There
are no provisions for injunctive relief in this settlement.
There is still a cost recovery action pending against Wilbur
McLamb, who may be able to pay about $300,000 of past removal
costs. Additionally/ investigation is being done to uncover
generator PRPs. As of April 1991, one possible generator PRP
had been found. If the company under investigation is
determined to be a PRP, then some of the future costs may be
recoverable.
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draft
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WILMINGTON DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
OTTO SKIPPER; WILBUR AND BARBARA
MCLAMB; JIMMY F. AND PEGGY CAIN;
HUBERT J. AND ADA ANDERSON; AND
INVESTORS MANAGEMENT CORPORATION,
Defendants.
WILBUR AND BARBARA MCLAMB; JIMMY
F. AND PEGGY CAIN; HUBERT J. AND
ADA ANDERSON; AND INVESTORS
MANAGEMENT CORPORATION,
Counter-Claimants,
v.
UNITED STATES OF AMERICA,
Defendant on the
Counterclaim.
WILBUR AND BARBARA MCLAMB; JIMMY
F. AND PEGGY CAIN; HUBERT J. AND
ADA ANDERSON; AND INVESTORS
MANAGEMENT CORPORATION,
Third-Party Plaintiffs,
v.
WACHOVIA BANK AND TRUST, N.A.;
Third-Party Defendant.
CIVIL ACTION NO.
89—L02-CIV-7-F
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2
CONSENT DECREE
I. BACKGROUND
Plaintiff, the United States of America (United States), by
the authority of the Attorney General of the United States and at
the request of the United States Environmental Protection Agency
(EPA), filed a complaint herein against Otto Skipper; Wilbur and
Barbara McLamb; Jimmy F. and Peggy Cain; Hubert J. and Ada
Anderson; and Investors Management Corporation under Section
107(a) of the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq«. as
amended by the Superfund Amendments and Reauthorization Act of
1986 (SARA), Pub. L. No. 99-499, 100 Stat, 1613 (1986), seeking
to recover costs incurred in responding to the release and
threatened release of hazardous substances on the site known as
"Potter's Pits Waste Disposal Site", which is located in the town
of Sandy Creek, in Brunswick County, North Carolina (the Site).
This Decree is made and entered into by and between
plaintiff, the United States of America, and the persons defined
in this Decree as the Settling Defendants.
By entering into this Decree, Settling Defendants do not
admit any legal or equitable liability under any federal, state
or local law, and reserve all defenses to any claims asserted in
connection with this action. Entry of this Decree shall not be
construed to be an acknowledgement by Settling Defendants that
any release or threatened release has occurred or that an
imminent and substantial endangerment to the public health or
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3
welfare or the environment exists at the Site. Settling
Defendants have stipulated to the entry of this Decree in
recognition of their status as potentially responsible parties
(PRPs) at the Site in order to compromise a disputed claim.
The Parties to this Decree have entered into this Decree as
a good faith settlement to avoid expensive and protracted
litigation and to settle certain claims of the United States
raised against the Settling Defendants in this action.
The Parties to this Decree agree that settlement of this
matter is in the public interest and embodies a fair and
reasonable settlement, and that entry of this Decree without
further litigation is the most appropriate means of resolving
this matter.
The United States has considered certain financial
information provided by the Settling Defendants and has
determined/ based upon this information, that Settling Defendants
are unable to pay all past costs incurred by plaintiff in
responding to the release or threat of release of hazardous
substances at the Site.
Now, therefore, before the taking of any testimony, before
adjudication of the merits of this case, and with the consent of
the parties to this Decree, it is ORDERED AND DECREED as.follows:
II. JURISDICTION
The complaint states a claim upon which relief may be
granted. This Court has jurisdiction over the subject matter of
this action and over the parties, and venue is properly in this
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4
Court pursuant to Section 113(b) and (e) of CERCLA, 42 U.S.C.
§ 9613(b) and (e) and 28 U.S.C. § 1345.
III. DEFINITIONS
The following definitions shall apply to this Consent
Decree:
A. "CERCLA" refers to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C.
§ 9601 et sea.. as amended by the Superfund Amendments and
Reauthorization Act of 1986, Public law 99-499.
B. "EPA" meanB the United States Environmental Protection
Agency.
C. The "Potter's Pits Waste Disposal Site" or the "Site"
refers to the site located in Brunswick County, North Carolina,
in the town of Sandy Creek near Highway 74-76.
D. "Parties" mean the United States and the Settling
Defendants in this action.
E. The "Entry" or "Effective" date shall be the date when
this Consent Decree is signed by the Court.
F. "Response costs" refers to all costs of response,
removal and remedial action undertaken at the Potter's Pits Waste
Disposal Site, including but not limited to, administrative,
investigative, removal, remedial, access, enforcement (including
attorney's fees) and oversight costs, prejudgment interest on any
or all such costs, and all other direct or indirect costs,
however denominated, incurred, or incurred hereafter, by any
person, including the United States, in connection with the Site.
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5
G. "Settling Defendants" mean Jimmy F. and Peggy Cain; Ada
Anderson and the estate of Hubert Anderson.
H. Terms not otherwise defined herein shall have their
ordinary meaning unless defined in Section 101 of CERCLA, 42
U.S.C. § 9601, or the National Contingency Plan (NCP), 40 C.F.R.
Part 300, in which case the definition in CERCLA or the NCP shall
control.
IV. PARTIES BOUND
The provisions of this Consent Decree shall apply to and be
binding upon the Parties and their respective officers,
directors, agents, trustees, servants, employees, successors,
assigns, attorneys, and all persons, firms and corporations
acting under the control or direction of the parties.
V. EFFECT OF THIS SETTLEMENT
A. The Parties have negotiated and executed this Decree in
good faith and agree that it represents a fair and reasonable
settlement.
B. By his/her signature to this Decree, each Settling
Defendant certifies to the best of his/her knowledge and belief
that the information he/she has given the United States regarding
his/her income and financial status is true, correct and
complete. The United States reserves all rights it may have to
bring any action against each Settling Defendant and the covenant
not to sue in Section IX shall become null and void if the
information provided by or on behalf of that Settling Defendant
is not true, correct and complete.
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VI. PAYMENT
A. The settling Defendants shall pay to the United States
as follows:
1. Jimmy F. and Peggy Cain shall pay the amount of
$500 within 15 days of the entry of this Decree.
2. Ada Anderson and the estate of Hubert Anderson
shall pay the amount of $1,000 within 15 days of the entry of
this Decree.
B. The above-referenced payments shall be by Electronic
Funds Transfer ("EFT" or "wire transfer") to the U.S.. Department
of Justice Lockbox Bank, referencing CERCLA Number TJB04D504 and
the U.S. Attorney's Office File Number 89V0434. Payment shall be
made in accordance with the instructions provided by the
plaintiff to the Defendants upon execution of the Consent Decree.
Any EFTs received at the U.S. Department of Justice Lockbox Bank
after 11 a.m. (Eastern Time) will be credited on the next
business day.
C. The amounts specified in paragraph A above are being
paid by Settling Defendants to resolve their liability to the
United States at the Site. Pursuant to 42 U.S.C. § 9613(f)(2),
this Consent Decree does not discharge the liability of any other
potentially responsible party which is not a party to this
Consent Decree.
VIII. CIVIL PENALTIES
In addition to any other remedies or sanctions available to
the United States, if Settling Defendants fail or refuse to
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7
comply with any term or condition of this Decree, each settling
Defendant may be subject to a civil penalty of up to $25,000 per
day of such failure or refusal, pursuant to Section 122(1) of
CERCLA, 42 U.S.C. § 9622(1).
IX. COVENANT NOT TO SUE
A. Subject to the reservation of rights under Sections V.
B and X of this Consent Decree, upon certification of the
remedial action by Plaintiff and payment by Settling Defendants
of the full amount required by this Consent Decree in Section VI,
the United States covenants not to sue or take any other civil or
administrative action pursuant to CERCLA against Settling
Defendants related to or arising from, existing contamination or
hazardous substances at the Site. This covenant not to sue shall
include all claims for response costs incurred in connection with
any response action taken at the Potter's Pits Site, pursuant to
CERCLA, including claims based upon conditions at the Site that
were previously and presently may be unknown to the United
States.
B. In consideration of the foregoing covenant not to sue
and the other agreements contained in this Consent Decree,
Settling Defendants covenant not to sue the United States for any
liability arising out of any activity or expenditure by the
United States in responding to the release or threatened release
of hazardous substances at the Site, including, but not limited
to, any claims for contribution or indemnification.
C. Settling Defendants hereby remise and covenant not to
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8
sue the United States for any liability for action taken and
expenditures made by the United States, its agents and employees
prior to the Effective Date in responding to the release or
threatened release of hazardous substances into the environment
from the Site. Further, Settling Defendants agree not to assert
any causes of action, claims, or demands against the United
States for reimbursement from the Hazardous Substance Superfund,
26 U.S.C. S 9507, including claims pursuant to Sections
106(b)(2), 111, 112 and 113 of CERCLA, 42 U.S.C. §§ 9606(b)(2),
9611, 9612, 9613, or assert any other claims or demands for sums
paid in settlement of claims which arise prior to the Effective
Date. This paragraph shall not be construed as precluding, in
any subsequent action other than enforcement of this Consent
Decree, the assertion of (1) any defense available to Settling
Defendants or (2) any release or covenant not to sue obtained in
this paragraph.
D. These covenants not to sue shall not extend to any
person or legal entity other than Settling Defendants.
E. Nothing in this Consent Decree shall be deemed to
constitute preauthorization of a CERCLA claim within the meaning
of Section 111 of CERCLA, 42 U.S.C. § 9611 or 40 C.F.R.
§ 300.700(d).
X. RESERVATION OF RIGHTS
A. Nothing in this Consent Decree is intended to be nor
shall it be construed as a release or covenant not to sue for any
claim or cause of action, administrative or judicial, at law or
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9
in equity, which the United States may have against Settling
Defendants for: (1) any liability as a result of failure to
comply with the terms of this Consent Decree; (2) natural
resource damages; or (3) any and all criminal liability.
B. Nothing in this Consent Decree shall constitute or be
construed as a release or a covenant not to sue regarding any
claim or cause of action against any person, firm, trust, joint
venture, partnership, corporation, or other entity not a
signatory to this Consent Decree for any liability it may have
arising out of or relating to the Site. Settling Defendants and
the United States expressly reserve the right to sue or take any
other action against any person or entity other than the
signatories to this Consent Decree with respect to any matter,
including claims relating to the Site.
XII. DISMISSAL OF CLAIMS
All counterclaims by the Settling Defendants shall be
dismissed with prejudice upon entry of the Decree.
XIII. CONTRIBUTION PROTECTION
With regard to claim for contribution against Settling
Defendants for matters addressed in this Consent Decree, the
Parties hereto agree that Settling Defendants are entitled to
such protection from contribution actions or claims as is
provided by CERCLA Section 113(f)(2), 42 U.S.C. § 9613(f)(2).
XIV. MODIFICATIONS
There shall be no modification of this Consent Decree,
including modifications deemed necessary by the United States or
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10
the Court as a result of public notice and comment, without
written agreement of all parties to the Consent Decree and the
Court.
XV. PUBLIC COMMENT
The parties agree and acknowledge that final approval by the
United States and entry of this Consent Decree is subject to the
requirements of Section 122(d) of CERCLA, 42 U.S.C. § 9622(d),
and 28 C.F.R. § 50.7, which provides for notice of the lodging of
this Consent Decree in the Federal Register, an opportunity for
public comment, and consideration of any comments. Having
executed this Consent Decree, Settling Defendants are bound by
this Consent Decree unless and until final approval is denied by
the United States or the Court.
XVI. CONTINUING JURISDICTION OF THE COURT
The Court shall retain jurisdiction to enforce the terms and
conditions of the Consent Decree and to resolve disputes arising
hereunder as may be necessary or appropriate for the construction
or execution of this Consent Decree.
XVII. TERMINATION
The Court shall retain jurisdiction of this matter for the
purpose of enforcing the terms of this Decree. This Decree shall
terminate upon confirmation by the United States that all
payments required by this Decree have been made and the remedial
action has been certified. Except as provided by this Consent
Decree, each party shall be required to bear the costs incurred
by it in connection with this action.
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ENTERED this
11
day of
, 199
United States District Judge
The parties whose signatures appear below hereby consent to
the terms of this Consent Decree. The consent of the United
States is subject to the public notice and comments requirements
of 28 C.F.R. § 50.7.
FOR THE UNITED STATES OF AMERICA:
Date VICKI A. O'MEARA
Acting Assistant Attorney General
Environment and Natural Resources
Division
U.S. Department of Justice
Washington, D.C. 20530
Date JAMES A. LOFTON
Environmental Enforcement Section
Environment and Natural Resources
Division
U.S. Department of Justice
Washington, D.C. 20530
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12
MARGARET PERSON CURRIN
United States Attorney
Eastern District of North Carolina
Raleigh, North Carolina 27611
By:
Date
STEPHEN A. WEST
Assistant United States Attorney
Eastern District of North Carolina
Raleigh, North Carolina 27611
Date PATRICK M. TOBIN
Acting Regional Administrator
U.S. Environmental Protection
Agency - Region IV
345 Courtland Street, N.E.
Atlanta, Georgia 30365
Date ZYLPHA K. PRYOR
Associate Regional Counsel
U.S. Environmental Protection
Agency - Region IV
345 Courtland Street, N.E.
Atlanta, Georgia' 30365
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13
The undersigned Settling Defendants hereby consent to the
foregoing Consent Decree in United States v. Otto Skipper et al*
Date ADA ANDERSON
Address
Telephone Number
The Estate of Hubert Anderson
By:
Date
ALBERT E. WHELESS
Wheless & Mclnnis
457 Main Street
Ocean Drive Beach Section
North Myrtle Beach, S.C. 29582
(803) 249-1441
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14
The undersigned Settling Defendants hereby consent to the
foregoing Consent Decree in United States v. Otto Skipper et al.
Date JAMES F. CAIN
Address
Telephone Number
Date PEGGY CAIN
Address
Telephone Number
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fSlte:.
[Break: tojf)
* 2 * (other:
? UNITED STATES ENVIRONMENTAL PROTECTIO^GLHH
REGION IV
343 COURTLAND STREET
ATLANTA. GEORGIA 3036S
MEMORANDUM
DATE:
SUBJECT!
FROM:
TO:
NOV 2 5 igg7
Proposed Settlement of the Hollingsworth
Solderless Terminal Company Matter
Lee A. DeHihns, III
Acting Regional Administrator, Region IV
Thomas L. Adams, Jr* (LE-133)
Assistant Administrator
Office of Enforcement and Compliance Monitoring
From 1968 through 1982, Hollingsworth Solderless Terminal
Company (HSTC) manufactured electrical solderless terminals in
Fort Lauderdale, Florida. As part of its manufacturing process,
metal parts were heated in molten salt baths, degreaswd in trich-
loroethe.ie (TCE) and electroplated. TCE was also used to scrub
the flocrs of the facility. Sludge, heavy-metal-contaminated
waste waters and waste chemicals were discharged, contaminating
on-site soils and ground water.
In June 1981, the Broward County Environmental Quality
Control Board (BCEQCB) requested assistance in its investigation
of HSTC's disposal practices from the U.S. Environmental Protec-
tion Agency (EPA) under the Superfund Program. The HSTC site was
proposed for inclusion on the National Priorities List (NPL) in
October 1981 and it was included on the first official NPL
published in December 1982. In November 1981, HSTC filed for
bankruptcy pursuant to 11 U.S.C. S 1101 et seq.
In 1981 and 1982, under the direction of EPA, HSTC installed
groundwater monitoring wells on the HSTC property. In 1982, EPA
set forth a Remedial Action Master Plan (RAMP) as a first step in
preparation for cleaning up the Hollingsworth site.^
In early 1985, EPA installed nine additional monitoring wells
around the HSTC site. Data gathered from the new wells again con-
firmed the presence of VOCs in groundwater samples taken from the
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original monitoring wells. Another contaminant, vinyl chlolride,
a known carcinogen, also was detected in the new samples.
Between 1981 and 1985, under guidance from Florida's Depart-
ment of Environmental Regulation (OER) and the BCEQCB, HSTC
incurred expenses totalling $702,719 (exclusive of attorneys' fees)
to address environmental concerns. See letter from R. Pettigrew
of Morgan, Lewis, and Bcckius to J. Ravan, former EPA Regional
Administrator, and J. Orban, former EPA remedial Project Manager,
Region IV (September 26, 1985). HSTC also commissioned several
investigations by environmental consultants who prepared a remedial
investigation and feasibility study for site clean up.
Because EPA had conducted thorough investigations at the HSTC
site since 1981, and due.to the large amount of data collected, a
formal Remedial Investigation was not necessary, instead, EPA
conducted a Focused Feasibility Study (FFS) and carried out addi-
tional studies as needed to complete the analysis of remedial
alternatives. On August 23, 1985, EPA presented the draft FFS
report to the public and provided a five week public comment
period.
On September 23, 1987, the Final Remedial Design Report (FRDR)
on the HSTC site was issued. According to the FRDR, the remedia-
tion of the site should be accomplished by December 1988. It is
expected that the remedial action will begin in December 1987.
The estimated maximum cost of the clean up is $543,000. FRDR,
Table 6-2, "Cost Estimate for Remedial Action, Remediation of
Maximum Area of Contamination." This figure reflects the costs
of both Phase I and Phase II of the remediation. The maximum cost
of only Phase I is estimated at $394,000. FRDR, Table 6-1, "Cost
Estimate for Remedial Action, Remediation of Primary Area of
Contamination." It is anticipated that only Phase I will be
required. Expenses incurred by EPA to date relative to the HSTC
site total approximately $416,000. SCAP Site Summary, August 21,
1987.
HSTC has proposed an administrative settlement of this matter
under Section 122(h)(1) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA). It has proposed
to settle its recovery costs obligation by paying $50,000 at the
time of the settlement agreement and $150,000 at the time the
remediation is accomplished. Under HSTC's proposal, EPA would
provide HSTC with a complete release for all past and future
costs at the site, as well as for damages to natural'' resources
under the trusteeship of the United States. The Department of
Interior (DOI) has completed an assessment of natural resources
damages. According to the person at DOI responsible for such
assessments in Florida, a release under S 107(a)(4)(C) for damages
to natural resources under the trusteeship of the United States
is forthcoming.
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This memorandum recommends EPA's acceptance of HSTC's settle-
ment offer. There are two primary reasons for that recommendation:
1) HSTC is in bankruptcy; and 2} the risk of contamination, of
Fort Lauderdale's primary water supply by HSTC is not significant.
The public interest is best served by settling with HSTC
rather than pursuing what is certain to be protracted and expensive
litigation with virtually no possibility of recovering more than
a fraction of EPA's clean up costs because of 1) HSTC's financial
status, 2) HSTCs being in bankruptcy and 3) vagueness in the
law as to whether EPA's claim will be characterized as a pre-
petition claim, a post-petition claim or an administrative cost
of the bankruptcy.
Moreover, although the HSTC site is only two miles from
Fort Lauderdale's primary water supply, the Prospect Well Fields,
it is not and has never been a source of contamination of those
well fields. In addition, contamination at the HSTC site at
this time is minimal and decreasing. The maximum concentrations of
volatile organic compounds (VOCs) found anywhere at the site for
the years 1981/82, 1985 and 1987 are Indicated below.
1981/82 1985 1987
TCE 4300 ug/1 789 ug/1 1.0 ug/1
DCE 2160 ug/1 6700 ug/1 107 ug/1
vinyl chloride 6000 ug/1 138 ug/1
(It should be noted that DCE is a decomposition compound of TCE.
Thus the increase in DCE would correspond to a decrease in TCE.)
Because this memorandum proposes settlement for less than
100% of clean up costs, what follows is an assessment of each of
the ten criteria set forth in the Interim CERCLA Settlement
Policy announced as'part of EPA's Hazardous Waste Enforcement
Policy, 50 Federal Reg. 5034 (February 5, 1985). Attached to this
memorandum is a Cost Recovery Agreement drafted in accordance
with EPA's Draft Procedures for Administrative Settlements under
Sections 122(h)(1) and (g)(4) of CERCLA (July 2, 1987).
1. Volume of Wastes Contributed to Site by Each PRP
There is only one potentially responsible party contributing
to the contaminantion at the HSTC site - the Hollingsworth Solderless
Terminal Company.
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2. Nature of the Wastes Contributed
The principal wastes of concern are the VOCs, trichloroethene
(TCE) which has a maximum contaminant level (MCL) of 3.2 ug/1,
dichloroethene (DCE) which has a MCL of 70 ug/1, and vinyl chloride
which has a MCL of 1 ug/1. Other wastes contaminating the site
are heavy metals involved in HSTC's manufacturing business
copper, nickel and tin - and some liquid dyes and caustics.
The contaminants discharged at the HSTC site potentially pol-
lute the Biscayne Aquifer, a sole source aquifer under the Safe
Drinking Water Act. Indeed, the HSTC site is located only two
miles east of the primary well fields serving Port Lauderdale,
the Prospect Well Fields. However, because of the relatively low
solubility of TCE and. the low hydraiilicgradient of the area (due
to the flatness of the area) the extent of migration of VOCs to
the drainfields has been minimal and it appears that the HSTC
site is not a source of cpntamination of the Prospect Well Fields-.
The VOCs appear to contaminate only the ground water and soil at
the site.
The February 1985 sampling done as part of the Focused Feasi-
bility Study (FFS) also revealed that while concentrations of the
contaminants at the 50-foot depth were similar to or greater than
those reported in 1981 and 1982, the concentrations at 25, 75/
and 100 foot depths were significantly lower than previously
reported. The increase at the 50-foot depth has been attributed
to entrapment of VOCs associated with oil and grease wastes in
the zone of formation change that occurs at approximately 50 feet
below the land's surface^ The increase in contaminants at the
50 foot depth, however, does not pose an immediate threat to the
drinking aquifer. Moreover, the FFS revealed a plume 200-400 feet
in diameter moving to the southeast - away from the well fields.
FFS Section 1.2.1, pp. 1-17 thru 1-20.
The same decreasing trend was observed in the volume of con-
taminated water. The'volume of contaminated ground water was
estimated at between 400 and 800 million gallons in 1985. However
in 1987, after redefining the plume, that.volume was reduced to
between 76 and 180 million gallons*
Of the contaminants found in the soil at the 6ite, lead is
the only heavy metal for which there is a RCRA E.P. ^toxicity
standard. That standard is .5 mg/1. The surface and subsurface
soil sampling done in December 1984 revealed that in the areas of
the highest concentrations of metals - the west drain field and
the area between the two buildings at ;Plant #2 - the toxicity
rating was less than 0.2 mg/1.
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Where VOCs were found in the soil, they were found at very
low levels of concentration. The highest concentration of any of
them was of TCE. TCE was recorded at 1.2 ug/g in a soil sample
from the east drainfield. In that same drainfield, DCE was
detected at between .05 u'g/g and 1.0 ug/g. Vinyl chloride was
not detectable in any of the soil samples.
3. Strength of Evidence Tracing the wastes
at the Site to the Settling Parties
At the time of disposal of the hazardous substances, HSTC
owned and operated the manufacturing facility at which those
substances were disposed ;of. HSTC arranged for and actually
conducted the disposal of the hazardous substances. Neither the
release of the substances nor the damages resulting therefrom
were caused by an act of God or war, or by the actions or omissions
of a third party other than an employee or agent of HSTC.
4. Ability of the Settling Parties to Pay
The legislative history of CERCLA is scant. And since CERCLA
is a relatively recent statute attempting to regulate in what
heretofore has been foreign territory, there is little judicial
illumination to guide us in deciding the ability of a potentially
responsible party who is in bankruptcy to pay recovery costs.
Moreover, there is no easy definition of the term, "ability to
pay." How that term is defined depends at least in part upon how
far EPA wants to push potentially responsible parties, e.g., to
what extent EPA wants to jeopardize a firm's viability. For
example, although a potentially responsible party may not have
cash-on-hand to pay recovery costs, it may be able to pay those
costs if it borrows money, postpones payment of other creditors,
or sacrifices future profits, etc. Such actions, however, may
jeopardize the firms* viability.
Of course, there also are important quantitative factors
measuring a firm's ablity to pay: liquidity, solvency and equity.
The February 1986 Financial Analysis of HSTC prepared by Putnam,
Hayes & Bartlett, Inc. with input from HSTC's attorneys evaluates
those quantitative factors. It concludes that if the HSTC matter
is not settled and instead is litigated, it is likely that HSTC
will be in an even weaker financial position than it is now and
it is less likely that EPA will be able to recover any of its
clean up costs.
Of even more importance in deciding HSTC's ability to pay is
the fact that HSTC is in bankruptcy. While providing bankruptcy
as an option for polluters is certainly something to be avoided,
a firm's bankruptcy status not only goes to whether the firm has
the financial resources*with which to pay, but whether what'ever
financial resources it has can be reached to pay recovery costs.
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There are several possible approaches to enforcing CERCLA
against bankrupt parties, some of which are outlined in EPA's
Revised Hazardous Waste Bankruptcy Guidance (May 23, 1986).
First, the Guidance suggests that EPA take advantage of the
exceptions to the automatic stay provision of the Bankruptcy
Code. 11 U.S.C. §362(a) provides that enforcement actions which
were or which could have been initiated prior to the filing of a
petition in bankruptcy are automatically stayed. However, 11
U.S.C. §§362(b)(4) and (5) provide exceptions to the automatic
stay. 11 U.S.C. § 362(b)(5) states that "the enforcement of a
judgment, other than a money judgment, obtained in an action or
proceeding by a governmental unit to enforce such governmental
units's. police or regulatory power" is not automatically stayed.
11 U.S.C. S 362(b)(4) states that "the commencement or continua-
tion of an action or proceeding by a governmental unit to enforce
such governmental unit's.police or regulatory power" is not auto-
matically stayed.
It is clear that the automatic stay provision was not intended
as a shield against all enforcement actions. Indeed, the legisla-
tive history is plain: among the specific examples of actions
which are not automatically stayed is listed actions by the govern-
ment to enforce "environmental protection, consumer protection,
safety or similar policy or regulatory laws." H.R. Rep. No.
595, 95th Cong., 1st Sess. 343, reprinted in 1978 U.S. Code
Cong. & Ad. News. 6299, S. Rep No. 989, 95th Cong. 2d. Sess. 52,
reprinted in 1978 U.S. Code.Cong. & Ad. News 5838. However, it
is equally plain that the exceptions to the automatic stay provi-
sion "extend to permit an injunction and enforcement of an
injunction, and to permit the entry of a money judgment, but
[they do] not extend to permit enforcement of a money judgment."
Id. The drafters of the exceptions to the automatic stay were
sensitive to the fact that enforcement by a governmental unit of
a money judgment would give it preferential treatment to the
detriment of all other creditors." Id. This was not their intent.
Thus, if by recovering costs under CERCLA, EPA is enforcing
a money judgment, EPA is stayed. But, if recovery of costs is
not the enforcement of a money judgment, EPA is not stayed and in
the HSTC case, it may be able to place a claim against the
other assets of HSTC's shareholder (the Hollingsworth Trust), the
firm which purchased HSTC's equipment and. inventory with financing
from HSTC (Midland-Ross Company), proceeds from the future sale of
HSTC's plants or the personal assets of HSTC's trustees, the
value of which are unknown. That is not to suggest that any of
those claims would be successful. In fact, it is not likely that
any of them would be successful.
The answers to the question whether by recovering costs, EPA
is enforcing a money judgment have varied. In Ohio v. Kovacs,
469 U.S. 274 (1985), the defendant and the state had agreed that,
among other things, the defendant would clean up its facility.
Defendant breached its agreement; and at the state's request and in
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accordance with state law, the court appointed a receiver'whose
charge it was to conduct the clean up. Defendant then filed for
bankruptcy under Chapter 11.
The state sought a declaration by the bankruptcy court that
defendant's obligation to cleanup was not dischargeable, it was
not a debt within the meaning of §362(b). Reasoning that the
state at this point was only interested in the payment of money
by defendant to effectuate the clean up, the court disagreed with
the state and concluded that clean up costs are a money judgment
and that the state is stayed from collecting those costs from
defendant because defendant was in bankruptcy.
The result reached by the Third Circuit Court of Appeals
just the year before on substantially the same facts was entirely
different. In Penn Terra Ltd. v. Department of Environmental
Resources, 733 F.2d" 267 (3rd Cir. 1984), the court cautioned that
"federal supremacy [should] be invoked only where it is clear
that Congress so intended. Statutes should therefore be construed
to avoid preemption, absent an unmistakable indication to the
contrary." 733 F.2d 267, 273. Thus, in order to avoid preemption
by the Bankruptcy Code, the court characterized the state's
injunction compelling a firm to correct its violations of various
state environmental laws as an effort to enforce the state's
police.powers, not an effort to enforce a money judgment - even
though as in Ohio v. Kovacs, the result of the states' efforts
would be a a money payment by a firm in bankruptcy to effectuate
the clean up.
The Court in Ohio v. Kovacs distinguished Penn Terra Ltd.
pointing out that "in [Penn Terra Ltd^] there had been no appoint-
ment of a receiver who had the duty to comply with the state law
and who was seeking money from the bankrupt. The automatic stay
provision does not apply to suits to enforce the regulatory
statutes of the State, but [to] the enforcement of such a judgment
by seeking money from the bankrupt... " 469 U.S. 274, 278 note 11.
See also, United States v. ILCO 48 Bankr. 1016 (N.D. Ala., 1985)
where the court did.not bother even to make that distinction. In
ILCO, the governments complaint was for an order compelling ILCO
to remedy environmental harm. The court characterized that action
as an equitable action to prevent future harm, not an action to
enforce a money judgment - even though the firm was in bankruptcy
and would have to expend funds to satisfy the requested order.
Interestingly, the court in ILCO cited both Penn Terra and U.S.
v. Kovacs for support.
The -court in Thomas Solvent Company v. Kelley, 44 Bankr. 83
(W.D. Mich., 1984) made an important distinction between how the
automatic stay provision will be applied in Chapter 11 proceedings
and in Chapter 7 (liquidation) proceedings. In that case, the
polluting firm was successful in arguing that by seeking to require
the firm to comply with a clean up order, the state was seeking
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to enforce a money judgment. The court also pointed out, however,
that "a debtor cannot avoid its responsibility to society simply
by filing a Chapter 11 petition." 44 Bankr. 83, 88. If the firm
had not converted from a Chapter 11 to a Chapter 7 (liquidation)
proceeding, "an order may (have been] entered granting relief
from the automatic stay." Id.
As a second possible approach to enforcing CERCLA against
bankrupt parties, the Guidance suggests that EPA get a confession
of liability, a judgment, and a specific provision for enforcement
of the judgement in the confirmed plan or reorganization. This
can be done even though the debt will not have arisen prior to
the bankruptcy. 11 U.&.C. 1141(d)(1) provides that "unless other-
wise provided in the plan of reorganization", the confirmation of
the plan discharges the debtor from debts arising before the
date of confirmation.
As a third possible approach, the Guidance suggests that CPA
agree with the trustee-in-bankruptcy on a prorata distribution of
the firm's assets.
Fourth, the payment of recovery costs to EPA may be a part of
the firm's reorganization plan.
Fifth, EPA and the firm's creditors may agree to share in
the amount available for distribution to creditors.
Sixth, EPA may be able to convince the bankruptcy court that
its response costs are an "actual, necessary cost and expense of
preserving the estate" under 11 U.S.C. 503(b)(A) and, therefore,
should be accorded the priority allowed for administrative expenses.
After all, it will be difficult - if not impossible - to dispose
of the property of a firm which is on the NPL and, under Midatlantic
Bank v. New Jersey Department of Environmental Protection, 474
U.S. 494 (1936) such property cannot be abandoned to avoid CERCLA
liabilities. (A similar argument was successful in T.P. Long
Chemical Inc., 45 Bankr. 278 (N.D. Ohio, 1985))
Seventh# the firm's obligation to EPA for recovery costs may
be said to have arisen post-petition, when EPA expended funds -
not when HSTC harmed the environment or was put on the NPL - in
which case EPA's claim is not discharged in bankruptcy and EPA
may seek to have the firm fulfill its obligation. Only pre-
petition obligations are discharged. A pre-petiti'on obligation is
one for which a claim or potential claim existed prior to the
filing of the bankruptcy petition.
Of these approaches, most "fail* in the HSTC matter for want
of timelinesss: HSTC's Second Revised Plan of Reorganization was
confirmed in 1982. EPA had notice of the plan and did not object
to it. Neither did EPA file a claim in the bankruptcy proceeding.
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The only approaches which are appropriate to the HSTC matter
at this point are preserving EPA's ability to seek recovery by
either (i) taking advantage of the -exceptions to the automatic
stay provisions, or (2). characterizing HSTC's obligation to EPA
as a post-petition obligation.
Characterizing EPA's recovery costs as an administrative
expense probably is not a viable route for EPA to take to reach
whatever assets HSTC may have since it did not object to its
being listed as a Class III creditor under HSTC's reorganization
plan. The bankruptcy court is not likely to upset that plan five
years after its confirmation. Indeed it would be preferable not
to even broach this possibility since it has only been recently
that bankruptcy courts have begun to accomodate EPA by giving, its
recovery costs the status of administrative expenses. The bank-
ruptcy court may disallow EPA's claim for administrative expenses
on the poor facts of this case and that may set a precedent for
future such disallowances.
The obvious difficulty with the two appropriate approaches
however, is that their effectiveness depends upon HSTC having
resources out of which recovery costs can be paid. Unfortunately,
it does not appear that HSTC has such resources.
According to the 1986 Financial Analysis of HSTC. HSTC will
likely have cash-flow problems beginning in 1988 if by December
1987 cleanup of the site and the sale of Plant #2 are not accomp-
lished. Specifically, it would not be able to meet its creditor
payments and might need to liquidate its remaining assets. Interim
financing would be needed to avoid liquidation. And of course,
each year of delay in completing clean up requires HSTC to make
additional payments to its unsecured creditors, thus reducing its
asset base.
HSTC owns Plant #1 clear of any liens. In 1986 this plant
had an estimated market value of approximately $1.3 million if
the site were clean, Plant #2 has been dedicated by the bankruptcy
court to HSTC's creditors. According to the plant manager, that
plant is currently rented at $10,000 per month and it has a current
fair market value of $94,000.
HSTC receives payments until 1991 from the Midland-Ross
Company for the sale of equipment/ inventory and manufacturing
technology. According to the Financial Analysis, those payments
totaled $735,000 in present value in 1986; but, attaching a claim
against those payments would likely force HSTC to liquidate
unless bank financing could be arranged.
HSTC's sole shareholder, the Hollingsworth Trust, xioes not
provide much in the way of resources either. According to the
Financial Analysis, in 1986, the trust's other assets were valued
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only at between $250,000 and $500,000. Moreover, those assets
probably could not be reached unless EPA were successful in
piercing HSTC's corporate veil.
The thing most incongruous about HSTC's resources, bankruptcy
status and obligation to EPA are that Plant #1 once cleaned-up
has a value of $1.3 million and the reorganization plan seems to
anticipate that EPA will clean up the site. If EPA accepts
HSTC's $200,000 settlement offer and cleans up the site, HSTC may
gain $1.28 million in the subsequent sale of the plant. As
incongruous as this sequence of events may seem, EPA probably
cannot avoid it.
Section 107(f) of the Superfund Amendments and Reauthoriza-
tion Act of 1986 (SARA) provides for a lien in favor of the
United States upon property which is the subject of a removal or
remedial action. Although this lien provision probably applies
to costs incurred both prior to and after the passage of SARA and
indeed the situation presented in the HSTC matter is just the
sort to which that provision was intended to apply, EPA cannot
avail itself of it in this matter. See EPA's Guidance on Federal
Superfund Liens (September 22, 1987). As the Guidance points
out, a "lien unperfected as of the time of the filing of the
bankruptcy petition, will be invalidated by the bankruptcy
trustee." HSTC's bankruptcy petition was filed in 1981; its
reorganization plan was confirmed in 1982. The Superfund lien
provision was not available at that time. And, EPA did not file
a lien prior to that time.
If EPA somehow were successful in an attempt to require HSTC
to sell Plant #1 and give EPA proceeds from that sale to pay its
recovery costs, it would be upsetting the reorganization plan.
At 5.02 of the plan, it is stated that funding for the annual
payments through 2003 to Class VII creditprs "shall be provided
primarily from rental income from Plant #2 and Plant #1." And,
for the reasons cited above, the HSTC matter does not provide the
best set of facts on which to seek an amendment to the reorgani-
zation plan.
5. Litigation Risks in Proceeding to Trial
a. Admissibility of the Government's Evidence
There appear to be no procedural or substantive problems in
the acquisition or creation of evidence to support EPA's cost
recovery claim.
b. Adequacy of the Government's Evidence
In an October 20, 1986 letter to Patrick Tobin, Director, EPA
Waste Management Division from D. Beavers of Stradley, Ronon,
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Stevens & Young, HSTC disputes the conclusions in the Record of
Decision (ROD) because, it says, those conclusions are based upon
an "inaccurate summary of the available data." (emphasis added)
However, in that letter, HSTC does not dispute the accuracy
of the data themselves - much of which was generated by HSTC's
own environmental consultants or by them in conjunction with EPA.
Neither does HSTC, in that letter, suggest that the data are in any
way inadequate. Indeed, in its comments on the FFS, HSTC states
that "the FFS comports with the conclusions reached by Hollings-
worth's experts three years ago." See letter from R. Pettigrew
of Morgan, Lewis and Bockius to J. Ravan, former EPA Regional
Administrator, and J. Orban, former EPA Remedial Project Manager,
Region IV, (September 26, 1985). (But see same letter at p. 27:
"The FFS raises serious doubts about the validity of the data
collected and the conclusions drawn in it.")
HSTC's only "complaints" are (1) that EPA has violated its
regulations and guidance in that it has not considered all avail-
able remedies and (2) that it appears that the risk which at one
time seemed to have been presented by the site exists no longer.
Regarding the latter "complaint," HSTC has concluded - and EPA
does not disagree with its conclusion - that the level of toxicity
and the concentration of VOCs are diminishing.
Regarding the former "complaint", HSTC suggests that the "no
action" alternative is required by the regulations and guidance
accompanying the National Contingency Plan (NCP), CERCLA § 105,
42 U.S.C. 9605 et seq., and that a less expensive course of
remedial action is possible. As discussed below however, in
conducting its FFS and deciding on appropriate remedial action,
EPA adhered to the regulations and guidance accompanying the NCP.
c. Availability of Defenses
HSTC will argue in defense that in developing its FFS, EPA
did not adhere to the NCP, it did not consider all remedies as
required by CERCLA S 105, 42 U.S.C. 9605, and its accompanying
regulations and guidance. In addition, it will argue that the
remedy recommended by the FFS does not meet the cost-effectiveness
standards of the NCP regulations, 40 C.F.R. 300.6B(j).
If these allegations were true, EPA would be found to have
acted arbitrarily and capriciously in seeking to recover costs
from HSTC. However, these allegations are not true.
NCP regulations, 40 C.F.R. 300.68, require that EPA enploy
the following procedure in considering alternative remedial actions:
(g) A limited number of alternatives should
be developed for remedial actions. One alterna-
tive may_be a no-action alternative. No-action
alternatives are appropriate, for example, when
response action may cause a greater environmental
ot health darfger than no action ...
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(h) The alternatives developed under subparagraph (g)
... will be subject to an initial screening to narrow
the list of potential remedial actions...
(i)(l) A more detailed evaluation will be conducted
of the limited number of alternatives that remain
after the initial screening in subparagraph (h)
EPA's Guidance on Feasibility Studies under CERCLA (April
1985) recommends an approach to developing alternative remedial
actions. At chapter 2.1, it recommends that "possible technolo-
gies be screened to eliminate inapplicable and infeasible tech-
nologies based on site conditions and to eliminate those that are
an order of magnitude higner in cost than other alternatives but
do not provide significantly greater environmental or public
health benefits or technical reliability."
The cost-effectiveness standards of the NCP, 40 C.F.R.
300.68(j), require that EPA select the remedial alternative which
is the "lowest cost alternative that is technologically feasible
and reliable and which effectively mitigates and minimizes damage
to and provides adequate protection of public health, welfare or
the environment." EPA adhered to these regulations and guidance
in conducting its FFS.
EPA developed and considered six alternatives, including a
no-action alternative. After an initial screening and subsequent
mure detailed evaluation of the alternatives, it was determined
that two alternatives would be effective and are equally acceptable.
EPA has decided upon the less expensive of those two alternatives,
thus, satisfying the cost-effectiveness standards of the NCP.
6. Public Interest Considerations
The hydrogeology of the Fort Lauderdale area is such that
contaminants go right into the groundwater. Groundwater is the
major source of drinking water in the area. However, there is no
evidence to suggest that the HSTC site was ever a source of
contamination of the Prospect Well Fields, as initially presumed.
Indeed, because of the low solubility of TCE and the low hydraulic
gradient of the area, the extent of migration of VOCs from the
drainfields has been minimal. Also, the plume has decreased in
size and is moving away from the Prospect Well Fieldfe. Thus, there
appears not to be a need for a quick remedy to protect health or
the environment.
There is another public interest "consideration however.
That is that because of three factors - 1) HSTC's financial
status 2) HSTC's being in bankruptcy and 3) vagueness in the
law as to whether EPA's claim against HSTC will be characterized
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- 13 -
as a pre-petition claim, a post-petition claim or an administra-
tive cost of bankruptcy - EPA's claim against HSTC is doomed to
result in protracted and expensive litigation with virtually no
possibility of recovering more than a fraction of EPA's clean up
costs. Thus, if conserving federal resources for clean ups under
CERCLA is a public interest consideration., then those three
factors may be used to justify EPA's acceptance of HSTC's settle-
ment offer.
7. Precedential Value
The issue presented in this matter is the result of two very
important federal policies coming into conflict. On one hand is
the policy underlying CERCLA which requires that those who release
hazardous wastes into the environment be responsible for the often-
times very expensive clean up of those wastes. On the other hand
is the policy underlying the Bankruptcy Code. That policy is to
give debtors a temporary respite from creditors, to ensure that
all creditors are treated equally and fairly under the circum-
stances, and to help rehabilitate failing businesses. Those
policies come into conflict where, as in this matter, the EPA
seeks to recover from a firm which is in bankruptcy the cost of
cleaning up the firm's hazardous waste site.
In a nutshell, the issue is whether a firm which is in bank-
ruptcy wil' be allowed to escape liability under CERCLA, and if
so, when. No case has addressed that increasingly important
issue. The court in In re Johns-Manville Corporation et al.,
57 Bankr. 680 (S.D. N.Y., 1986) recognized that that was the
issue and that the resolution of that issue required "substantial
and material consideration" of federal environmental statutes*
However, it did not resolve the issue. It decided instead that
because substantial and material consideration of non-bankruptcy
statutes was required, withdrawal of the bankruptcy proceeding
was mandatory. Ironically, In re Johns - Manvllle Corporation
et al. provides us with the most substantial guidance available:
whether a firm which is in bankruptcy will be allowed to escape
liability under CERCLA is an issue to be decided based on CERCLA
and other federal environmental statutes, .not based on the Bank-
ruptcy Code. Unfortunately# however, most of the litigation to
date involves state, not federal, environmental laws. So, while
In re Johns-Manville Corporation has taken the important step of
posing the issue, there is no precedent for an answer to that
issue. Moreover, where the issue has been presented in the
context of state environmental laws, although the clear trend is
away from providing bankruptcy as an option for polluters, the
courts have not been consistent in th^ir answers to the issue.
The settlement of the HSTC matter can give EPA an opportunity
to set forth the factors it will consider in deciding to settle
with potentially responsible parties who are in bankruptcy and to
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- 14 -
suggest the limited circumstances in which the EPA will settle,
with potentially responsible parties. While a settlement agree-
ment is not tantamount to regulations or guidance* it does provide
precedent for the EPA's Settlement Decision Committee and, therefore,
may be used as a guide by other potentially responsible parties.
Thus, the settlement of this matter may have some important,
precedential value.
8. Value of obtaining a Present Sum Certain
The possibility of obtaining a larger sum than that offered
by HSTC to settle this.matter is almost nil. As pointed out in
the 1986 Financial Analysis, if forced to go to litigation, HSTC's
already meager financial resources will only be further depleted.
Moreover, because HSTC is operating under a reorganization plan
which has been in effect for more than five years and pursuant to
which (according to the 1986 Financial Analysis) over $1.2 million
already has been paid to unsecured creditors, it is improbable
that more substantial resources would be available in the future*
9. Inequities and Aggravating Factors
The HSTC site was proposed for inclusion on the NPL in
October 1981 because it was presumed to contaminate the Prospect
Well Fields, Fort Lauderdale's primary source of drinking water.
Subsequent research has indicated that although the HSTC site
potentially contaminates the Biscayne Aquifer, it does not and
has never contaminated the well fields. Moreover, as previously
discussed, the risk of contamination today is substantially less
than that at the time HSTC was put on the NPL. Indeed, it is
unlikely that the HSTC would qualify for the NPL today. HSTC's
current Mitre Model score of less than 8 does not warrant
Superfund's attention.
That is not to suggest that remedial action is not necessary
or that cost recovery is not appropriate, however. Because the
primary source of drinking water in the. Fort Lauderdale area is
groundwater# the fact that the ground water at the HSTC site
does not meet the standards of the Clean Water Act means that
remedial action is necessary. Nonetheless, there may be some
inequity in - in essence - holding HSTC to a "higher standard"
than similarly situated firms.
On the other hand, there may be some inequity in allowing
HSTC to settle for so substantially less than the 100% of recovery
costs to which EPA is entitled. There are some facts in addition
to those discussed elsewhere in this memorandum which mitigate in
favor of EPA settling for so substantially less than 100% however,
including the following: (1) HSTC has cooperated with EPA's
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- 15 -
investigation in good faith as evidenced by its expending some
$702,719 to address environmental concerns; (2) the contamination
of the Prospect Well Fields with which EPA is concerned could
have been caused by a number of other companies (ROD, p. 13); and
(3) contaminants from the HSTC site could not have migrated and
contaminated the Prospect Well Fields (ROD, p. 13).
10. Nature of the Case that Remains After Settlement
No case remains after settlement of this matter with HSTC.
HSTC is the only potentially responsible party; and under the
terms of its proposed settlement, HSTC would receive a complete
release for all past and future costs at the site as well as for
damages to natural resources under the trusteeship of the United
States.
cc: Gene A. Lucero (WH-527)
Director
Office of Waste Program Enforcemtent
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
IN THE MATTER OF: )
HOLLINGSWORTH SOLDERLESS TERMINAL )
COMPANY SITE )
FORT LAUDERDALE, FLORIDA )
)
PROCEEDING UNDER SECTION,122(h)(1) )
OF THE COMPREHENSIVE ENVIRONMENTAL )
RESPONSE, COMPENSATION, AND LIABILITY )
ACT OF 1980, 42 U.S.C. 59622(h)(1), AS )
AMENDED BY THE SUPERFUND AMENDMENTS )
AND REAUTHORIZATION ACT OF 1986, PUB. L.)
NO. 99-499. )
COST RECOVERY AGREEMENT
This Agreement is made and entered into by the U.S.
Environmental Protection Agency ("EPA"), and the Hollingsworth
Solderless Terminal Company ("Settling Party"). The purpose of
this Agreement is for EPA to recover response costs incurred and
to be incurred at or in connection with the Hollingsworth Solderless
Terminal Company site ("Site") in Fort Lauderdale, Florida and to
resolve the liability of the Settling Party for such response
costs. EPA la authorized to enter into this Agreement pursuant
to the authority vested in the Administrator of the EPA by Section
122(h)(1) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, Pub. 'L. No. 99-499 ("CERCLA"),
which authority has been delegated to the Regional Administrators
of the EPA by EPA Delegation No. 14-14-D (Feb. 26, 1987).
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- 2 -
This Agreement shall be binding upon EPA and shall be
binding upon the Settling Party, its directors, officers, employees,
agents, successors and assigns. Each signatory to this Agreement
represents that he or she is fully authorized to enter into the
terms and conditions of this Agreement and to legally bind the
party represented by him or her. The Settling Party agrees to
undertake all actions required by this Agreement. The Settling
Party consents to and will not contest EPA's authority to enter
into this Agreement or td implement or enforce its terms.
WHEREAS, EPA alleges that hazardous substances, pollu-
tants and contaminants as defined in Sections 101(14} and 104(a)(2)
of CERCLA, 42 U.S.C. §§9601(14) and 9604(a)(2) have been or are
threatened to be released into the environment from the Site;
WHEREAS, EPA alleges that such releases or threatened
releases required response action to be undertaken at the Site
pursuant to Section 104 of CERCLA, 42 U.S.C. §9604, and will
reauire further response action to be undertaken in the future;
WHEREAS, EBA alleges that in performing this response
action, response coses have been incurred at or in connection
with the Site and that further response costs will be incurred in
the future;
WHEREAS, EPA alleges that the Settling Party is a
responsible party pursuant to Section 107(a) .of CERCLA, 42 U.S.C.
§9607(a), and is liable for response costs incurred and to be
incurred at or in connection with the Site;
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- 3 -
WHEREAS, the Settling Party does not admit any-of EPA's
allegations; and
WHEREAS, EPA and the Settling Party desire to settle
certain claims arising from the Settling Party's alleged involvement
with the Site without litigation and without the admission or
adjudication of any issue of fact or law;
NOW, THEREFORE, EPA and the Settling Party, in
consideration of the promises and convenants herein, and intending
to be legally bound hereby, agree as follows:
1. The Settling Party agrees to pay to the Hazardous
Substance Superfund $50,000 at the time this Agreement is entered
into and additional $150,000 at the time response action is
completed.
2. Each payment shall be made by certified or cashier's
check made payable to "EPA-Hazardous Substance Superfund." Each
check shall reference the name of the Settling Party and the site
and shall be sent to:
EPA Superfund
P.O. Box 371003H
Pittsburgh, Pennsylvania 15251
3. The Settl-ing Party shall simultaneously send a copy of
its check to:
Chief, Hazardous Waste Branch
Office of Regional Counsel
U.S. Environmental Protection Agency - Region IV
345 Courtlatnd Street -
Atlanta, Georgia 30365
4. In addition to any other remedies.; or sanctions available
to EPA, if the Settling Party fails or refuses to comply with any
term or condition of this Agreement it shall be subject to
enforcement action pursuant to Section 122(h)(3) of CERCLA.
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- 4 -
5. Subject to Paragraph 6 of this Agreement, upon payment
of the amounts specified in Paragraph 1 of this Agreement. EPA
covenants not to sue or to take any other civil or administrative
action against the Settling Party for "Covered Matters." "Covered
Matters" include the costs of removal or remedial action incurred
by the United States Government consistent with the National
Contingency Plan and damages for injury to, destruction of or
loss of natural resources under the trusteeship of the United
States resulting form the release or threatened release of the
hazardous substances which are the subject of this agreement.
6. Nothing in this Agreement is intended to be nor shall
it be construed to be a release or covenant not to sue for any
clair or cause of action, administrative or judicial, civil or
criminal, past or future, in law or in equity, which EPA may have
against the Settling Party for:
(a) any continuing liability as a result of failure to
make the payments required by Paragraph 1 of this Agreement;
(b) any matters not expressly included in Covered Matters.
7. Nothing in this Agreement is intended to be nor shall
it be construed to be a release or covenant not to sue for any claim
or cause of^action, administrative or judicial, civil or criminal,
past or future, in law or in equity, which EPA may have against
any person, firm, corporation or other entity not a signatory to
this Agreement.
8. In consideration of EPA's covenant not to sue in
Paragraph 5 of this Agreement, the Settling Party agrees not to
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- 5 -
assert any claims or causes of action against the United States
or the Hazardous Substance Superfund arising out of response
activities undertaken at the Site, or to seek any other costs,
damages, or attorneys fees from the United States, its agencies,
employees or contractors arising out of response activities
undertaken at the Site.
9. Subject to Paragraph 6 of this Agreement, EPA agrees
that by entering into and carrying out the terms of this Agreement,
the Settling Party will have resolved its liability to the United
States for "Covered Matters" pursuant to Section 113(f)(2) of
CERCLA and shall not be liable for claims for "Covered Matters."
10. This Agreement shall be subject to a thirty-day public
comment period pursuant to Section 122(i) of CERCLA. In accordance
with Section 122(i)(3) of CERCLA, EPA may withdraw its consent to
this Agreement if comments received disclose facts or considera-
tions which indicate that this Agreement is inappropriate,
improper or inadequate.
11. The Attorney General or his designee has issued prior
written approval of the settlement embodied in this Agreement
pursuant to Section 122(h)(1) of CERCLA.
12. Th« effective date of this Agreement shall be the date
upon which EPA issues written notice to the Settling Party that
the public comment period pursuant to Paragraph 10 of this
Agreement has closed and that comments received, if any, do not
require either modification of this agreement or EPA withdrawal
from this Agreement.
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- 6 -
IT IS SO AGREED:
[Settling Parties]
By:
[Name] [Date]
U.S. Environmental Protection Agency
By:
[Date]
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Supplement to Ten Point Settlement Document
The purpose of this Supplement to the Ten Point Settlement
Document is to explain the circumstances giving rise to the
revised Consent Decree. Since the original Consent Decree was
signed by Hollingsworth Solderless Terminal Company, Inc. ("HST")
in 1990, HST has suffered financial difficulties such that HST no
longer is able to comply with its financial obligations under the
original Consent Decree. HST, however, is able to meet the
general financial terms of the original Consent Decree under a
different timetable. The new timetable for payments owing to EPA
ia reflected in the revised Consent Decree and affects only
Paragraphs Four, Five, Six, and Eight (4, 5, 6, and 8) of the Ten
Point Settlement Document. The following paragraphs will
supplement the original paragraphs in the Ten Point Settlement
Document. The other paragraphs in the Ten Point Settlement
Document remain in full force and effect.
4. Ability of the Settling Parties to Pav
HST is unable to perform its financial obligations under the
original Consent Decree because HST has not received rental
income owed to it. The original CD as signed, stated in
paragraph IX: "Maintaining the rental income under each of these
leases is essential to the financial viability of HST and
therefore, to its ability to perform its obligations hereunder."
In the one year interval between HST signing the CD and the
actual lodging of the CD, HST's various tenants had financial
difficulty and did not meet all of their rental payments. For
example, one tenant, Lance Enterprises, Inc. ("Lance"), filed for
bankruptcy; HST was prepared to prove over $200,000 in claims,
but the Bankruptcy Court only recognized $165,000. Of this
$165,000 judgment, HST will receive $31,000 oyer 4 years after
the secured creditors have been paid.
Since HST is no longer able to comply with the financial
terms of the original CD, HST proposed a modification. Instead
of EPA being paid $150,000 within thirty (30) days of the
Effective Date (when the CD is entered into Bankruptcy Court) and
EPA receiving the rest of its funds as 55% of the net proceeds
upon the sale of Plant 1, EPA is to receive all of its monies at
the time Plant 1 is sold. The terms are as follows: At the time
Plant 1 is sold, EPA will receive $150,000, plus interest
compounded annually at the rate of 7% per annum from the
Effective Date, and 55% of the net proceeds of the Plant 1 sale.
In sum, the modification is better for EPA. HST will not
have to finance the $150,000 with a $200,000 loan/mortgage. If
HST had obtained a $200,000 loan/mortgage, that loan/mortgage
would have to be repaid out of the sale proceeds before EPA would
receive its 55% share of the net proceeds. Accordingly, the
Region recommends the acceptance of the revised CD.
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-2-
5. Litigation Risks in Proceeding to Trial
If the revised CD is not be accepted, EPA will have to
litigate against HST to receive monies owing to EPA by HST. Such
litigation would force HST into Chapter 7 bankruptcy. As an
unsecured creditor, EPA is unlikely to receive any of its
response costs in a Chapter 7 bankruptcy liquidation.
6. Public Interest Considerations
The revised CD benefits the public interest because EPA will
receive a sum certain without litigation and EPA will receive
more of its response costs in a forum outside of Chapter 7
liquidation bankruptcy. In addition, the revised Consent Decree
does not affect the response action chosen by EPA.
8. Value of Obtaining a Present Sum Certain
EPA stands to gain the same amount as originally negotiated
in the first CD providing the Site's value has not dramatically
dropped since 1990. The value of the sum certain is represented
by EPA's ability to be reimbursed for past response costs without
expending Superfund costs in litigation.
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De Minimis
under SETTLEMENTS)
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De Micromis
(see under SETTLEMENTS)
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Cardinal*
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Prospective Purchaser
(see under SETTLEMENTS)
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Cardinal®
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TEN-POINT SETTLEMENT ANALYSIS
ADMINISTRATIVE COST RECOVERY SETTLEMENT
CARRIER AIR CONDITIONING SUPERFUND SITE
The purpose of this memorandum is to set forth the basis for EPA
Region IV's decision that the Cost Recovery Agreement for the
Carrier Air Conditioning Superfund Site, Collierville, Tennessee,
be entered into between EPA and Respondent/PRP Carrier
Corporation. Pursuant to CERCLA section 122(h)(1), 42 U.S.C.
9622(h)(1), because the total response costs at this Site are
expected to exceed $500,000, the prior written approval of the
Department of Justice is being sought. This memorandum sets
forth the background of this case and the ten-point analysis used
by EPA Region IV to determine the appropriateness of this
settlement of past response costs.
I. BACKGROUND
The Carrier Air Conditioning Site (hereinafter "the Site") is
located on the western edge of the Town of Collierville, Shelby
County, Tennessee, southwest of the intersection of Poplar Avenue
(Highway 57) and Byhalia Road. The Town of Collierville
(hereinafter "the Town" or "Collierville") is approximately 21
miles east of downtown Memphis, Tennessee.
The Site includes 135 acres of property (hereinafter "the
property") currently owned by the Carrier Corporation
(hereinafter "Carrier"), a subsidiary of United Technologies
Corporation. Since the late 1960s, Carrier has operated a
manufacturing facility of residential heating and air
conditioning units on the property.
From 1967 until 1987, the Town of Collierville owned the property
and leased it to Carrier. The Town of Collierville's ownership
coincided with releases of hazardous substances (discussed
below). This formed the basis for EPA's decision to name
Collierville as a PRP.
There were three discernible releases of hazardous substances at
the Site which are now being addressed under CERCLA. On June 21,
1979, as a result of a failed filter cover on one of the
degreaser units, approximately three thousand gallons of
trichloroethylene (TCE) were spilled near the southwest corner of
the main manufacturing plant. The solvent was released in the
form of liquid and vapor due to the high internal pressure in the
unit. The liquid material spilled onto and flowed across the
adjacent parking lot. Some of the liquid evaporated, while a
substantial quantity was absorbed by the asphalt surface.
On January 23, 1985, as a result of a failed underground portion
of an above-ground storage tank pipe, approximately five hundred
gallons of TCE leaked from the southeastern corner of the
manufacturing plant. Carrier employees discovered the solvent
-------
leaking through the surrounding soil into an adjacent storm
sewer. The leaking material saturated approximately 1500 square
feet of the surrounding soil. Reports from both the U.S. Coast
Guard and the Memphis Shelby County Health Department state that
approximately 80 gallons of the material were released into the
Nonconnah Creek via a storm sewer and runoff ditch.
In addition to the two discrete releases of solvent, Carrier
operated an unlined clarifier sludge surface impoundment on the
northwest portion of the property. The impoundment, which was
approximately 50 feet by 48 feet, was utilized from 1972 until
1980 for the storage of alkaline zinc phosphate washer sludge
produced during the washing of sheet metal prior to its painting.
Representatives from Carrier dispute that TCE-contaminated
materials were placed in the impoundment, but, after a 1980
removal of the material, a waste profile from the disposal
facility indicated that the shipped material contained 75 percent
TCE-contaminated soil.
In 1989, EPA proposed the Site for listing on the National
Priorities List (NPL) (40 C.F.R. § 300, Appendix A); the Site was
listed in 1990 and is currently no. 221 on the NPL.
In 1989, the Region sent general notice letters and information
requests under CERCLA Section 104(e), 42 U.S.C. § 9604(e), to
Carrier and Collierville. In 1989, the Region sent a special
notice letter pursuant to CERCLA Section 122(e), 42 U.S.C.
§ 9622(e), to Carrier for the conducting of the Remedial
Investigation (RI) and Feasibility Study (FS) phases of the
cleanup process.
On September 29, 1989, Carrier and EPA entered into an
Administrative Order on Consent for performance of the RI/FS
phase of the response action. The RI and FS reports were
finalized in April, 1992. A Proposed Plan, outlining EPA's
preferred remedial action plan for the Site, was also issued in
April, 1992. A 30-day public comment period on the Proposed Plan
which began on April 21, 1992, and ended on May 21, 1992, did not
result in any significant comments. On April 30, 1992, a public
meeting was held at the Memphis/Shelby County Public Library.
The Record of Decision was signed by the Regional Administrator
on September 3, 1992.
As set forth in the Record of Decision, the remedy selected for
the Site consists of soil vapor extraction and groundwater pump
and treat. Treatment of the groundwater will be conducted
through the use of air stripping technology.
On August 29, 1992, the Region forwarded a prereferral litigation
package to the Department of Justice in anticipation of Consent
Decree negotiations. On October 9, 1992, the Region sent notice
letters for the conduct of remedial design (RD) and remedial
2
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action (RA) to the Carrier Corporation and the Town of
Collierville. Negotiations were concluded unsuccessfully on
January 11, 1993, and on February 11, 1993, EPA issued an
unilateral administrative order (UAO) for RD/RA to the Carrier
Corporation. Presently, Carrier is proceeding with the work
required by the Order.
II. SETTLEMENT ANALYSIS
This settlement encompasses payment of 100% of outstanding past
costs for the Site. These costs are $298,692.01 and include
expenditures for RI/FS oversight and RD/RA preparation. However,
total response costs are expected to exceed $500,000 after
oversight of the RD/RA is completed. Therefore, prior written
approval from DOJ is necessary before the Cost Recovery Agreement
Coin be executed. This memorandum outlines the basis for EPA's
recommendation that DOJ concur in this settlement.
Pursuant to the Administrative Order on Consent entered into by
EPA and Carrier in 1989, Carrier agreed to pay oversight costs
for the duration of RI/FS. To date, Carrier has paid the costs
incurred in through fiscal year 1991. The costs for fiscal year
1992 and the internal EPA costs incurred since the issuance of
the Record of Decision constitute the outstanding past costs
covered in this CRA.
1. Volume of Wastes Contributed to Site bv Each PRP
The Carrier Corporation is responsible for all hazardous
substances released at the Site. As discussed in the Region's
prereferral litigation Report, dated August 29, 1992, Carrier
was the operator of the facility during the relevant time
periods. The Town of Collierville was an owner of the property
until 1987; however, there is no evidence that it contributed any
of the wastes to the Site. Furthermore, Carrier has in the past
and continues to be willing to assume 100% liability.
2. Nature of the Wastes Contributed
As discussed above, the primary substance released at the Site
was trichloroethylene. This substance has been detected in both
the soils and the groundwater. Other contaminants of concern
include 1,2-dichloroethene, 1,2-dichloroethane, vinyl chloride,
lead, zinc, and tetrachloroethene.
3. Strength of Evidence Tracing the Wastes at the Site to the
Settling Party
Strong evidence exists linking the Carrier Corporation with the
releases of TCE (see Background section relating to prior
releases) . The contaminants of concern can be linked to either
the direct releases, degradation products of the materials
3
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released, or materials found in the surface impoundment.
Morever, Carrier has never disputed liability.
4. Ability of Settling Party to Pav
The settling party is a wholly-owned subsidiary of United
Technologies Corp., a Fortune 50 company. The settling party has
submitted substantial documentation demonstrating its ability to
pay.
5. Litigation Risks in Proceeding to Trial
There are no litigation risks associated, with this case beyond
those risks normally associated with proving all costs in a cost
recovery suit.
6. Public Interest Considerations
The only minor public interest consideration is that, because
Carrier is a major employer in the area and because anti-EPA
sentiment has been expressed ih the past, a settlement between
Carrier and EPA may be perceived as another positive step in the
cleanup process.
7. Precedential Value
There are no issues in this settlement that have precedential
value.
8. Value of Obtaining a Present Sum Certain
EPA will recover 100% of outstanding past costs. Therefore, this
is not a significant factor in this settlement.
9. Inequities and Aggravating Factors
There are no inequities or aggravating factors in this
settlement.
10. Nature of Case that Remains After Settlement
All past costs will be recovered. Future costs, specifically
RD/RA oversight costs, will be demanded as they accrue. The CRA
does not include, any covenant not to sue relating to future
costs.
4
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MISCELLANEOUS
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T
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ROUTING SLIP - MODEL EXAMPLE
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August 18, 1993
ROUTING AND TRANSMITTAL SLIP
TO:
1. LUETSCHER - ORC
Date
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3. P.HARRIS
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4. YARBROUGH-WMD
5. COLLINS
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6. MUNDRICK
7. -eSREEff
8. VkAN ZM ATHbS
9.$^XRKER - ORC
10. TOBIN (2 signatures)
%j(ir
w
ACTION REQUESTED: Concurrence/Signature
The ENCLOSED documents pertain to a proposed CERCLA Consent Decree for RD/RA with the sole
Potentially Responsible Party ("PRP"), Hercules Incorporated, at the Hercules 009 Landfill Site in
Brunswick, Glynn County, Georgia (the "Site"). Specifically, the enclosed documents for signature consist of
a transmittal letter and a signature page from the proposed Consent Decree. Enclosed with these documents is
a " 10 Point" Settlement Analysis of the proposed settlement and a draft Complaint. Enclosed separately is the
complete Consent Decree executed by the Settling Defendant, including the Record of Decision ("ROD"),
Statement of Work ("SOW"), and Map of the Site as Appendices "A", "B", and "C", respectively.
The proposed Consent Decree is SIGNIFICANT because it embodies an entirely favorable fonclusinn to
negotiations with Hercules Incorporated ('Hercules"), the sole PRP at the Site. Hercules had designed and
used the Site to land-fill toxaphene sludge. The proposed Consent Decree requires Hercules to perform, under
EPA oversight, the remediation of the Site required by the March 25, 1993, ROD. The remedial action will
consist of a treatability study, followed by in-situ stabilization of toxaphene-contaminated soils, and
emphasizes source control to prevent future surface or groundwater contamination. The proposed settlement
also requires Hercules to reimburse the government for 100% of the past and future response and oversight
costs associated with the Site.
The Model Consent Decree for RD/RA ("the Model CD") formed the basis for the proposed Consent Decree.
No significant deviations or modifications were made to the language of those Sections of the Model CD
deemed to embody issues of national significance, hence no EPA HQ "Cluster Group" authorization was
necessary or sought. EPA/OE was, however, regularly apprised of the negotiations and provided valuable
advice.
Please refer to the enclosed "10 Point" Settlement Analysis for a more thorough review of the significance and
details of the proposed settlement.
FROM: Gregoiy Luetscher, ORC (2641, VMX 2275)
Region IV Routing and Transmittal Slip Form (March 1992, kbs)
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u
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LETTER AUTHENTICATING
EPA DOCUMENTS
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLAND STREET. N.E.
ATLANTA. GEORGIA 3036S
MEMORANDUM
DATE: December 12, 1991
SUBJECT: Authentication of Copies of EPA Documents
FROM: Andrew Harrison
Assistant Regional Counsel
TO: Anne L. Asbell
Chief, Southern Section
Hazardous Waste Law Branch
The purpose of this memorandum is to enunciate the appropriate
procedures for certifying and authenticating copies of EPA
documents.
Federal Rule of Civil Procedure (FRCP) 44 establishes a mechanism
for authenticating copies of official records.1 An official
record may be evidenced by a copy attested by the officer (or his
deputy) having custody of the original. For purposes of FRCP 44,
the legal custodian is the cognizant Assistant Administrator,
Regional Administrator, Staff Office Director or Office Director
or his designee.1
A copy of an official record must be accompanied by a certificate
that such officer has custody of the record.1 The certificate
may be made by the appropriate federal district court judge with
authentication established by application of the court's seal. A
certificate may also be made by a public officer having an
official seal and duties within the district. The public officer
must authenticate the document with his seal.4
1 The method of authenticating documents described herein
also applies to requests for documents for admissibility under 28
U.S.C. § 1733.
2 40 C.F.F. § 2.406 (1991).
3 Fed. R. Civ. P. 44.
4 Fed. R. Civ. P. 44.
Printed on Recycled Paper
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EPA Order 1200.4s of March 4, 1975, designated the following
officials as authorized to use the Agency seal to authenticate
documents:
a. the General Counsel;
b. the Deputy Assistant Administrator for
Administration;
c. the Executive Officer, Office of the Administrator;
and
d. the Regional Counsels.
Procedures for preparing a package of documents have also been
established. Provided below are instructions on how to properly
bind EPA documents using the "blue ribbon and gold seal
method."s Note that in a September 26, 1989, memorandum from
James Sargent, he indicated that the embossing EPA seal alone
should suffice at the place indicated for the location of the EPA
seal.7 However, according to Don Nantkes (OGC), the following
method of binding documents (the purpose of which is to prevent
substitution or forgery) has never failed to get documents
admitted in Federal Court:8
1. Punch two holes at the top of the "authentication" and
the documents to be attached;
2. Bind the "authentication" and the documents together with
a strong ribbon (blue is traditional—also, 1/4" "woven-
edge" single-face satin ribbon from a notions store is
best), tying a tight knot at the underside of the left
hole and leaving enough ribbon at both sides of the knot
for the next step;
3. Cut a 1/2" horizontal slit in the "authentication" to the
left of the "certification" signature, and push both ends
of the ribbon back up through the left hole, bringing
them out of the hole under the "authentication";
4. Push the ends of the ribbon up through the slit in the
"authentication" and cut off the ends of the ribbon just
above the bottom of the document;
5. Impress the EPA seal on a round seal patch with serrated
3 This Order was referenced by Mr. Nantkes in his memorandum.
Memorandum from Don Nantkes on Certification Under Rule 44 and 40
C.F.R. § 2.406 at 3 (October 24, 1988).
s I£. at 2.
7 Memorandum from James Sargent on Authentication of EPA
Documents (September 26, 1989).
8 Nantkes, supra note 5, at 3.
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edges and backed with glue (available from drugstores and
office supply stores gold is traditional) and stick the
seal over the spot where the ribbon ends emerge from the
document, leaving the ends of the ribbon dangling at the
bottom.9
A specific format for both the authentication and certification
has been specified by t^e Office of General Counsel. An
"authentication" appears as follows:
AUTHENTICATION
I, (name of official haying custody) attest that I
am the,(title) of the U.S. Environmental Protection
Agency and that the attached document is a true,
correct and compared copy of official documents in my
legal custody, consisting of:
(Briefly describe the documents and state the
number of pages
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as witnessed by my signature and the official seal of
the Environmental Protection Agency which appear below.
(EPA Seal}
(Signatured
(Typed name & title of
official)
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V
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BRIEFING PAPERS
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OUTLINE OF BRIEFING ON PEAK OIL/BAY DRUMS/REEVES
SOUTHEASTERN SUPERFUND SITES MIN3t-LITIGATION REFERRAL
REPORT, APRIL 19/ 1993
BACKGROUND:
-Region IV plans to send a Mini-Litigation Report on the
above-referenced Sites to DOJ later this week. The Report
indicates that the Region expects to enter into RD/RA
Consent Decrees for each Site. The Report is being routed
through the program. A cover letter accompanying the Report
should be signed by Joe Franzmatlies and John Barker.
-The Peak Oil, Bay Drums and Reeves Southeastern Sites are
three adjacent NPL sites located in Tampa, Florida. Peak
Oil is a defunct waste oil re-refinery and is contaminated
with metals and organic chemicals. EPA conducted a removal
action between 1985 and 1987 to incinerate oily acidic PCB
contaminated sludge. Bay Drums is a defunct drum
reconditioning facility and is contaminated with metals,
organics and pesticides. EPA conducted a removal in 1989-90
to remove contaminated soils and drums of hazardous wastes
and pesticides. Reeves Southeastern is an operating wire
fencing manufacturer and is contaminated with metals.
-An Rl/FS was conducted for the soils and sediments at each
Site. An area-wide ground water RI/FS was conducted at all
three Sites. An area-wide wetlands impact study is being
conducted. A total of six RODs will be issued for these
Sites: three separate soil/sediments RODS for (1) Peak Oil,
(2) Bay Drums and (3) Reeves; two separate ground water RODS
for (4) Reeves, and (5) Peak Oil and Bay Drums; and (6) a
Wetlands ROD. To date, EPA has issued the soil /sediment
RODs for Bay and Reeves. Reeves is conducting Remedial
Design under an amendment to the RI/FS Consent Order.
-Presently, 1400 Peak Oil PRPs have received Notice Letters
and EPA expects to issue Special Notice to a total of 1600
PRPs. At Bay Drums, 391 PRPs have been noticed and EPA
expects to issue Special Notice to 200 or more PRPs. Reeves
Southeastern is the only PRP at the Reeves Site.
STATUS
-Public comment on EPA's proposed plans for ground water
cleanup for Peak and Bay, and for Reeves, set to expire
this week. EPA plans to sign ground water RODs as soon
thereafter as possible.
-EPA is working closely with Peak and Bay PRP steering
committees to finalize PRP lists, volumetric rankings and
de minimis proposals. Special Notice will be issued as soon
as the lists are finalized, probably in early June 1993.
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BRIEFING OUTLINE FOR PEAK OIL/BAY DRUMS/REEVES SOUTHEASTERN
SITES, Page 2
-At Region IV and OE's request, OGC is reviewing the
Inspector General's Audit Report on the Peak Oil removal
action to determine if OGC disagrees with the iG's opinion
that the removal was inconsistent with the NCP. DOJ has
indicated, that it will not allow EPA to file suit or to
agree to settle EPA's potential $5 million CERCLA Section
107 cost recovery claim against the PRPs unless OGC
repudiates the IG's finding of inconsistency. OGC should
issue its opinion in the next few weeks.
POTENTIAL ISSUES AFFECTING SETTLEMENT
-Peak Oil: The main impediment to settlement will be issues
surrounding EPA's $5 million removal cost recovery claim.
The PRPs will be reluctant to enter into settlement
negotiations
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w
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CLOSEOUT MEMO--STATUTE OF
LIMITATIONS
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(sk *
H.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLAND STREET. N.E.
ATLANTA. GEORGIA 30365
EfSPfftRCEIEEHT
MEMORANDUM
DATE: JAN 1 2 19iJj
SUBJECT: DECISION NOT TO PURSUE COST RECOVERY ACTION AT THE
SONFORD PRODUCTS SITE #J5, JACKSON, MISSISSIPPI
A. SITE DESCRIPTION
The Sonford Products Site (the Site) located at 3506 Payne Drive,
Flowood, Mississippi, is approximately 2.8 acres in size and is
located several miles east of Jackson, Mississippi. Two (2)
companies, Sonford Products Corporation (Sonford), which operated
on the Site from,1970 to 1985, and Sonford International Co.,
Inc. (Sonford international), which operated on the Site from
1974 to 1980, formulated pentachlorophenol (PCP) for wood
preserving and saw mill operations. Sonford International ceased
operations, in 1980 after a new employee allegedly died from PCP
poisoning (Attachment A).
On June 15, 1983, a fire broke out at the Site. A memorandum,
dated June 15, 1983, written by the Flowood, Mississippi, Fire
Chief, stated that Sonford employees had added caustic soda to a
PCP solution and the heat generated by the chemical reaction
caused the solution to catch fire. The fire caused a release of
air contaminants which were not permitted by EPA or the State of
Mississippi (Mississippi) (Attachment A).
Mississippi issued an Order on September 1, 1983, requiring
Sonford to immediately cease producing all products, except for
Penta-Care Concentrate, and also required Sonford to discontinue
the remaining operations by March 1, 1985 (Attachment ^).
In April 1985, a rainwater pump from diked PCP storage tanks was
ieft on too long, causing two thousand (2,000) gallons of PCP to
be spilled out into the diked area. The PCP eventually
overflowed the dikes around the tanks and spilled; onto the parcel
on the Site's southern border. The Mississippi Bureau of
Pollution Control (Mississippi BPC) responded to the spill and
discovered that, in addition to the; PCP spill, there were other
hazardous substances on the Site (Attachment A).
FROM: MARY B. HUTSON, ENFORCEMENT PROJECT MANAGER
WASTE PROGRAMS BRANCH, SOUTH COST RECOVERY UNIT
TO
JOSEPH R. FRANZMATHES, DIRECTOR
WASTE MANAGEMENT DIVISION
Printed on Recycled Paper
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- 2 -
B. WORK AUTHORIZED AMD CONDUCTED. ASSOCIATED COSTS
*
The owners of Sonford, Mr. William T. Burford and Mr. Harold Cox,
stated that Sonford could not finance a cleanup of the Site.
This prompted Mr. Bob Rogers of the Mississippi BPC to request
EPA's assistance in the entire cleanup operation. Hazardous
substances identified at the Site include: PCP, Naphtha (mineral
spirits), alcohol bottoms, hexalene glycol, ethylene glycol,
caustic soda, sodium pentachlorophenate, buanol, cellosolve
acetate, borax, and sodium metaborate.
Cleanup activities included removing tanks, removing contaminated
soil, pumping contaminated water through filters, and removing
twenty-eight thousand (28,000) gallons of pure PCP for
incineration.
According to a memorandum written by Mr. Mike Norman, an EPA On-
Scene Coordinator, cleanup activities were completed at the Site
on May 12, 1985 (Attachment B). As of August 31, 1992, the
United States has incurred expenses totaling $488,537.55
(Attachment C).
C. BASIS NOT TO PURSUE COST RECOVERY
Financial Status of Potentially Responsible Parties
William T. Burford (Owner)
Mr. Burford is listed as a potentially responsible party (PRP)
due to his ownership of the Site between October 1969, and
December 1970 (Attachment A).
Document review and interviews with individuals knowledgeable
about the Site indicate that Mr. Burford also owns all of the
stock of Sonford and had day to day control of Sonford which
operated at the Site between 1970 and 1985. In addition, Mr.
Burford was vice president of Sonford International Co., Inc., .
which operated at the Site between 1974 and 1980 (Attachment A).
Mr. Burford owns no real, business or personal property in Rankin
County (Attachment A). He is 75 years old and is living on his
Social Security Administration income (Attachment F). Therefore,
Mr. Burford is not a viable PRP.
Sonford Products Corporation (Owner and Operator)
Sonford is listed as a potentially responsible party due to its
operations conducted at the Site between 1970 and 1985 and its
ownership of the Site from 1970 to the present. The Rankin
County Tax Assessor's office has assessed the Site as follows:
buildings and improvements, $86,260.00; land $8,400.00; for a
total assessed value of $94,660.00. According to Ms. Mary E.
McAlister, attorney for Sonford, the only other assets owned by
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- 3 -
Sonford are miscellaneous pieces of equipment and some accounts
receivable (Attachment A). The value of the equipment and the
accounts are not known.
On August 30, 1985, Chapman Chemical Company obtained a
judgement, in Circuit Court of Rankin County against Sonford in
the amount of $70,262.68 (Attachment A).
On February 10, 1986, Bunt Oil Company obtained a judgment in
Rankin County Circuit Court against Sonford in the amount of
$8,398.99 (Attachment A).
The two (2) judgements obtained by Chapman Chemical Company and
Hunt Oil Company against Sonford total $78,661.67. Subtracting
these judgements from Sonford's known assets, the balance
remaining on Sonford's known assets is $15,998.33. EPA has not
determined whether there are any other secured or unsecured
creditors or whether the $15,998.33 in known assets is still
available. Therefore, it would appear that Sonford is not a
viable PRP.
Sonford International Co., Inc. (Operator)
Sonford International Co., Inc. (Sonford International), is
listed as a potentially responsible party due to its production
of PCP and its operations at the Site between 1974 and 1980.
Ms. Mary E. McAlister, attorney for Sonford International, stated
in an interview with Techlaw, Inc., an EPA contractor, that when
the company ceased operations in 1980, all of its assets were
liquidated. Ms. McAlister went on to state that due to the
liquidation of the assets there were no assets in the company
(Attachment A).
Sonford International ceased operations prior to the date of the
release that resulted in EPA conducting a fund lead removal and
incurring response costs.
EPA has determined that since it appears Sonford International
has no assets and there are litigation risks involved in suing an
operator that ceased operations prior to the date of the release
to which EPA responded, the possibility of recovering any money
from Sonford International is minimal.
Insurance Coverage
EPA explored the possibility of recovering costs from the
insurance policies held by Sonford and Sonford International.
However, only one insurance policy provides for environmental
loss. The Hartford Company policy has a provision entitled,
"Hazardous Substance Limit" which states:
"As a result of an Accident to an 'Object' property may be
damaged, contaminated or polluted by a substance declared to be
hazardous to health by an authorized governmental agency. We
-------
will pay up to $25,000 for any additional expenses incurred by
you for clean up, repair or replacement or disposal of that
damaged, contaminated or polluted property. As used here,
additional expenses - mean expenses incurred beyond those for which
we would be liable if no substance hazardous to health had been
involved." (Attachment D).
In attempting to determine whether to pursue the Hartford Company
policy, EPA took into account the following concerns which the
United States Department of Justice (DOJ) expressed as
contributing to a general reluctance on its part to pursue
Superfund costs from insurers:
1) Resolution of insurance companies' disputes is a matter of
State, not Federal law, and any precedents that may be set go
no further than that one State.
2) Litigation of insurance contracts can be quite complicated and
cumbersome because of the interpretation of contracts. Many
issues in a contract have to be litigated and won before the suit
is won.
3) Insurance companies are fearful of suffering bad precedent in
their States, and therefore, they fight extremely hard, even to
the point of gathering resources from other insurance companies
who have a lot at stake to prevent a precedent from being set.
4) State laws are not clear as to who should prevail in pollution
liability cases, the United States or the insurance companies,
therefore, DOJ is hesitant to file suit.
5) Many insurance policies written in the mid-70's have specific
pollution exclusion clauses as a result of new environmental
legislation. The earlier the date of the policy, the less
likely a pollution exclusion clause will be included in it.
(This Item does not pertain to the Sonford Products insurance
policies although its effective dates were 1972-1985).
6) Many insurance policies have clauses which prevent third
parties from suing the insurance company itself. EPA would
have to sue the PRP who in turn would have to sue the insurance
company.
EPA has determined that the costs that it would incur as a result
of suing the Hartford Company would far exceed the $25,000.00
recoverable under this policy, particularly in light of the
above-mentioned difficulties in pursuing insurers. Therefore,
EPA has determined that filing a suit against the Hartford
Company is not a viable option.
Statute of Limitations on pre-SARA Removals
CERCLA Section 113, 42 U.S.C. § 9613, establishes a statute of
limitations for the recovery of response costs. CERCLA Section
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- 5 -
113(g)(2), 42 U.S.C. § 9613(g)(2), states:
"An initial action for recovery of the costs referred to Section
9607 [107] of this title must be commenced—
(A) for a removal action, within three (3) years after completion
of the removal action, except that such cost recovery action must
be brought within 6 years after a determination to grant a waiver
under Section 9604(c)(1)(C) of this title for continued response
action; ..."
The CERCLA Section 113(g)(2) statute of limitations provision,
which was added by the Superfund Amendments and Reauthorization
Act of 1986 (SARA), applies only to those response actions
initiated after the effective date of SARA.
In 1988, Thomas L. Adams, Jr., Assistant Administrator, issued a
draft Memorandum entitled "Guidance on Statute of Limitations for
CERCLA Section 107 Cost Recovery Actions" in which he sets forth
EPA policy regarding the timing of cost recovery actions in light
of SARA. It is stated in paragraph 6 that, "Section 113(g) cost
recovery time limits do not apply to recovery of pre-SARA costs.
We are advised by the Department of Justice ("DOJ") that the most
likely statute of limitations on recovery of pre-SARA response
costs is a six (6) year statute of limitations accruing on the
date of completion of all response actions at a site. There are
strong arguments that the CERCLA Section 113(g) statute of
limitations was intended by Congress to apply prospectively only
because to apply the statute retroactively would cut off the
United States' right to bring many cost recovery actions."
(Attachment E).
Response actions at the Site were completed on May 12, 1985, more
than seven (7) years ago, so that EPA would not likely recover
its response costs due to CERCLA Section 113, 42 U.S.C. § 9613,
statute of limitations.
CONCLUSION
EPA completed a fund lead removal at the Sonford Products Site in
Flowood, Mississippi, on May 10, 1985, and incurred expenses
totalling $488,537.55. EPA has not found any viable PRPs in
which to recover its response costs. Only one of Sonford and
Sonford International's insurance policies provides for
environmental loss. However, the policy will only provide
$25,000.00. The Department of Justice expressed its reluctance
to pursue response costs against insurers especially where, as in
this case, the costs to litigate would exceed the amount
recoverable under the policy.
In addition, due to the fact that the removal at the Site was
completed over seven (7) years ago, on May 12, 1985, with no
other response actions performed at the Site, EPA would not
likely recover the removal costs even if the PRPs were viable due
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- 6 -
to the statute of limitations.
"71/1 ua.a €> iLh^~
' • y !• " '
Mary
//a/'
Hutson, Enforcement Project Manager
South Cost Recovery Unit
Concurrence:
Uhtjr ^
rles Swan, Chief
Cost Recovery U:
'Lucius, Chief
Waste Programs Branch
» l\ V<*
Richard Green, Deputy Division Director
Division of Waste Management
Joseph R. Franzmathes, Director
Waste Management Division
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ATTACHMENT A
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pre
PRC Engineering Planning Research Corporation
Suite 600
303 East Wacker Drive
Chicago. IL 60601
312-938-0300
TWX 910-2215112
Cable CONTOWENG
SONFORD PRODUCTS
RESPONSIBLE PARTY SEARCH
FINAL REPORT
Prepared For
US. ENVIRONMENTAL PROTECTION AGENCY
Office Of Waste Programs Enforcement
Washington, D.C. 20460
Work Assignment No.
EPA Region
Site No.
Date Prepared
Contract No.
PRC No.
Prepared By
Telephone No.
EPA Primary Contact
Telephone No.
476
4
45J5 (C)
June 26, 1986
68-01-7037
15-4764-67
TechLaw, Inc.
(Kathleen Vivian)
(703) 476-1100
Gena Towosend
(404) 347-2930
Ff^LSD ffiSK F809WT PSPWtED
ft AOTATiSN OF LiilSftrati
enforcement
confidential
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pre
PRC Engineering Planning Research Corporation
Suite 600
303 East Wacker Drive
Chicago. IL 60601
312-938-0300
TWX 910-2215112
Cable CONTOWENG
June 26, 1986
Ms. Gena D. Townsend
U.S. EPA Region 4
345 Courtland St.
Atlanta, GA 30365
Dear Ms. Townsend:
PRC Environmental Management, Inc. and its subcontractor, TeehLaw, Inc. are
pleased to submit the Final Report entitled "Sonford Products." Attachments I-II1
for the report were submitted to you with the draft report on April 4, 1986.
Attachment IV is enclosed with your copy of the report only. The delivery of this
report should complete the work required under Work Assignment No. 476.
Please close-out the Work Assignment by completing the Work Assignment Action
Form and forwarding the form through Ron Joyner. The enclosed Performance Appraisal
Form should be returned to PRC.
Should you have any questions concerning this Work Assignment, please contact
Bakul Kbara (PRC Technical Monitor for TeehLaw) at (312) 938-0300.
Sincerely,
PRC Environmental Management, Inc
Thomas D. Brisbin
Deputy Program Manager
TDB/jy
Enclosures
cc: Nancy Deck (w/copy of report)
Bruce Bakaysa (letter only)
William Heglund (w/copy of report)
Ron Joyner (letter only)
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TABLE OF CONTENTS
PRC ENVIRONMENTAL
MANAGEMENT. INC.
MN 2R 1or
Page
Section
I. INTRODUCTION
A. Project Background.......
B. Project Approach
II. SITE HISTORY
III. POTENTIALLY RESPONSIBLE PARTIES 1
IV. CONCLUSIONS AND RECOMMENDATIONS . 18
APPENDIX A:
APPENDIX B:
APPENDIX. C,:
APPENDIX D:
APPENDIX E;
APPENDIX F:
APPENDICES
DOCUMENT REFERENCES
PROPERTY OWNERSHIP NARRATIVE
INTERVIEW SUMMARIES
FIGURES
LAWSUITS FILED AGAINST SONFORD PRODUCTS CORPORATION,
SONFORD INTERNATIONAL CO.r INC., OR MR. WILLIAM T.
BURFORD
COMPANIES THAT PROVIDED INSURANCE COVERAGE
FOR SONFORD PRODUCTS CORPORATION OR SONFORD
INTERNATIONAL CO., INC.
ATTACHMENTS
ATTACHMENT I: DOCUMENTS PROVIDED BY U.S. EPA
ATTACHMENT II: DOCUMENTS PROVIDED BY BUREAU OF POLLUTION
CONTROL, MISSISSIPPI DEPARTMENT OF NATURAL
RESOURCES AND MISSISSIPPI SECRETARY OF STATE'S
OFFICE
ATTACHMENT III:
ATTACHMENT IVJ
TITLE DOCUMENTS
ADDITIONAL DOCUMENTS OBTAINED AFTER DELIVERY OF
THE DRAFT REPORT
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I. INTRODUCTION
A. Project Background
The Sonford Products site consists of a 2.8 acre parcel
located in Flowood, Mississippi. After a 2,000 gallon spill of
pentachlorophenol (PCP) in April of 1985, the Bureau of Pollution
Control (BPC), Mississippi Department of Natural Resources (MDNR),
collected soil samples from the site and discovered contamination
by PCP, lindane, and mercury.
Two companies, Sonford Products Corporation and Sonford
International Co., Inc., operated on the Sonford Products site
formulating PCP for wood preserving and saw mill operations between
1970 and 1985. The companies purchased solid PCP in bulk from Dow
Chemical and Reichold Chemical, shipped the PCP to the site,
formulated a liquid wood preservative product by blending solvents
with the solid PCP, and shipped the finished product to their
customers.
In Work Assignment 476, the U.S. EPA has requested assistance
in the identification of potentially responsible parties (PRP's)
for the Sonford Products site.
B. Project Approach
TechLaw consulted with Region IV contact, Ms. Giezelle Bennett
for specific direction regarding the information to be developed in
this report. As a result of these discussions, TechLaw proposed in
its Work Plan that federal, state, and local officials be contacted
for information and records regarding the Sonford Products site.
In addition, TechLaw's Work Plan proposed to conduct research into
the financial status of identified responsible parties.
TechLaw also proposed to have a title search conducted for the
Sonford Products site. Although documents initially reviewed by
TechLaw refer to the site as six acres, the property owned by
Sonford Products Corporation is only 2.8 acres in size. Ms.
Bennett directed TechLaw to conduct the title search from I960 to
the present for the 2.8. acre parcel, and include certified copies
of all deeds and leases and regular copies of all other recorded
documents.
There is a 3.5 acre parcel on the southern border of the
Sonford Products site which was contaminated in 1985 by a 2,000
gallon spill of PCP from Sonford Products Corporation operations.
However, Ms. Giezelle Bennett directed TechLaw not to conduct a
title search on the 3.5 acre parcel. Subsequently, Ms. Gena
Townsend, who succeeded Ms. Bennett as Region IV contact, directed
1
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TechLaw to determine the current owner of the 3.5 acre parcel on
the southern border of the Sonford Products site. This information
has been included in the Site History section of this report.
TechLaw was directed to focus on operations at the site from
1970 to the present by Ms. Bennett and Ms. Townsend. However,
TechLaw identified two companies, Woodflo Corporation and W.G.
Avery Body Company, during its research, that had operated on the
Sonford Products site prior to 1970. Techlaw was instructed by Ms.
Townsend to determine the nature of these companies' operations on
the site. TechLaw contacted the Jackson Public Library and the
Jackson, Mississippi, Research and Development Center but was
unable to determine the extent or the nature of the companies'
operations at the site. Subsequently, U.S. EPA directed TechLaw to
list both companies as potentially responsible parties.
Techlaw's Work Plan also proposed that contact be made with
citizens', groups and other private individuals for information
regarding the site. However, Mr. Bob Rogers, BPC, advised TechLaw
that there had been a number of lawsuits filed by local residents
against Sonford Products Corporation and contact with private
individuals in the area was likely to result in TechLaw 6taff being
subpoenaed to testify in these lawsuits. When informed of Mr.
Rogers' advice, Ms. Townsend directed TechLaw to confine its
contacts to federal, 6tate, and local officials.
During its research Ms. Townsend directed TechLaw to seek
information regarding insurance coverage for Sonford Products
Corporation and Sonford International Co., Inc. Subsequently,
TechLaw discovered that Ms. Mary E. McAlister (attorney for Sonford
Products Company, Sonford International Co., Inc. and Mr. William
T.. Burford, president of Sonford Products Company) had researched
insurance coverage for these companies. With the permission of Ms.
Townsend, TechLaw contacted Ms. McAlister for this information but
she could not provide it in time for inclusion in the Draft Report
which was submitted on March 27, 1986. Rather than delay the
delivery of the report, Ms. Townsend directed TechLaw to provide
the insurance information in a separate addendum to the Draft
Report.
The addendum was transmitted to the U.S. EPA on April 15,
1986. The addendum has been incorporated into this Final Report in
the form of Appendix F: Insurance Companies That Provided Coverage
for Sonford Products Corporation and Sonford International Co.,
Inc.
After review of the Draft Report, Ms. Gena Townsend, U.S. EPA,
sent a letter to PRC Engineering, dated May 5, 1986, enumerating
additional research tasks to be performed. Once these comments
were received by TechLaw, Ms. Townsend was contacted and a date for
2
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delivery of the Final Report was scheduled. The additional
research requested has been completed and is included at
appropriate points in this Final Report.
The following agencies and individuals were contacted for
information and documents concerning the Sonford Products .pite:
Region IV. U.S. EPA
Mr. Mike Norman
404/347-3931
Mr. Norman was the On Scene Coordinator (OSC) for the U.S. EPA
when the MDNR and the U.S. EPA conducted-cleanup activities on the
Sonford Products 6ite in 1985. Mr. Norman provided TechLaw with
maps, log books, correspondence! reports, and aerial photographs of
the site. Copies of these documents are included in Attachment I.
Bureau of Pollution Control (BPC\. Mississippi Department of
Natural Resources. fMDNRl
Mr. Bob Rogers, Emergency Response Officer
601/961-5171
Mr. Rogers is BPC's Emergency Response Officer for the State
of Mississippi. When contacted by TechLaw Mr. Rogers expressed the
desire to be BPC's sole contact for Techlaw. Mr. Rogers gathered
documents from the BPC's Divisions of Enforcement, Air Quality/
Hazardous Waste, and Water Quality for TechLaw to review. These
documents included Inspection reports, internal memoranda,
correspondence, maps, and judgments. Copies of these documents are
included in Attachment II.
Mr. John Harper, Chief of Law Enforcement
601/961-5171
Mr. Harper was interviewed on March 4, 1986 regarding
operations and MDNR involvement with the Sonford Products site.
His .comments have been incorporated into the Site History section
of this report.
Mississippi Secretary of State's Office
601/359-1350
Staff members of the Mississippi Secretary of State's office
were contacted regarding the current status of corporations
involved with the Sonford Products site. The Mississippi Secretary
3
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of State's office also provided TechLav vith copies of articles of
incorporation, amendments, and annual reports for these
corporations. The copies are included in Attachment II.
Reference Desk. Public Library
Jackson, Mississippi
601/968-5803
The Reference Desk of the Jackson Public Library was contacted
for information regarding companies that TechLav had identified as.
operating at the Sonford Products site. The library was unable to
provide information about these companies.
Jackson Research and Development Center
Jackson, Mississippi
601/982-6313
The Jackson Research and Development Center was
information regarding the companies that. Techlav had
operating on the Sonford Products site. The Jackson
Development Center was unable to provide information
companies.
Rankin County Tax Assessor's Office
601/825-2217
The Rankin County Tax Assessor's office was contacted for
information about assets held by companies or individuals
identified by TechLav as potentially responsible parties during
research for this report. This information is included in Section
III, Potentially Responsible Parties.
Hines County Tax Assessor's Office
601/968-6617
The Hines County Tax Assessor's office was contacted for
information about assets held by companies or individuals
identified by TechLaw as potentially responsible parties during
research for this report. This information is included in Section
III, Potentially Responsible Parties.
contacted for
identified as
Research and
about these
4
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The following firms and individuals were contacted for
information regarding the Sonford Products'*site:
Bennett. Lotterhos. Sulser. & Geno
Ms. Mary E. McAlister, Esquire
601/944-0466
Ms. McAlister, of Bennett, Lotterhos, Sulser, & Geno
represents Sonford Products Corporation, Sonford International Co.,
Inc., and Mr. William Troy Burford, an officer of both
corporations. Techlav contacted Ks. McAlister to request
permission to interview Mr. William T. Burford regarding his
personal knowledge of operations and ownership of the Sonford
Products site. Ms. McAlister granted permission for this interview
and subsequently arranged for a meeting between TechLaw staff and
Mr. William Troy Burford at the offices of Bennett, Lotterhos,
Sulser & Geno.
Ms. McAlister also provided information regarding the current
status of Sonford Products Corporation and Sonford International
Co., Inc. A summary of her comments is provided in Appendix C,
Interview Summaries. Her comments have been incorporated in the
Site History section of this report as well.
The information in Appendix F regarding insurance companies
that provided coverage for Sonford Products Corporation and Sonford
International Co., Inc. was also provided by Ms. McAlister. This
information was obtained from her during a telephone interview on
April 1, 1986 with TechLaw staff.
Mr. William T, Burford
Mr. Burford is the president of Sonford Products Corporation
and vice president of Sonford International Co., Inc. He was
interviewed by TechLaw staff, on March 3, 1986, at the offices of
Bennett, Lotterhos, Sulser & Geno in the presence of Ms. Mary E.
McAlister, Bennett, Lotterhos, Sulser & Geno, and Mr. John Burford,
Mr.- Burford's son.
Mr. Burford provided information on the operations at the
Sonford Products site, companies that operated on the site,
companies that operated at the site prior to 1970, materials
brought into the site, products produced, and waste streams. His
comments are summarized in Appendix C, Interview Summaries, and are
included at appropriate points in the Site History section of this
report.
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Mr. William Walsh Sr.. Esquire
901/685-0922
Ms. Mary E. McAlister, Esquire, informed TechLav that Mr.
Walsh is Mr. Morris E. Weeks attorney. TechLav contacted Mr. Walsh
for permission to interview Mr. Weeks regarding his involvement
with the Sonford Products site. Mr. Walsh granted permission for
this interview.
Mr. Morris E.Weeks
153 Perkins Extended
Memphis, Tennessee 38117
901/685-6774
Mr. Weeks is president of Sonford International Co., Inc., and
TechLav*s research indicates that he had day to day control of the
operations of the company. TechLav attempted to contact Mr. Weeks
by telephone but was unable to speak with him prior to the delivery
of the Draft Report. TechLav was able to contact Mr. Weeks.by
phone on June 16, 1986. Mr. Weeks stated that he declined to Bake
any comments regarding the site because of his friendship with Mr.
William T. Burford.
Mr. Charles (Chuck) Penn
L.A. Penn and Sons
304 Yandell Ave.
Canton, Mississippi 39046
601/859-1861
TechLav originally attempted to contact Mr. L.A. Penn, the
Registered Agent for Woodflo Corporation, by phone. Hovever, as Mr.
L.A. Penn was unavailable Mr. Chuck Penn, his son and a director of
Woodflo Corporation agreed to ansver TechLav's questions about
operations at the site. Mr. Perm's remarks are summarized in
Appendix C: Interviev Summaries and have been included in this
report.
Northbrook Insurance Company
Ms. Kathleen Fairbairn
312/551-2907
Mr. Larry Coffee
312/551-2911
Northbrook Insurance Company provided insurance coverage for
Sonford Products Corporation between 1981 and 1983. Ms. Fairbairn
and Mr. Coffee were requested to provide information about other
6
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companies that night have written.insurance policies for Sonford
Products Corporation. Ms. Fairbairn deferred to Mr. Coffee in
these requests for information and Mr. Coffee ignored TechLav's
repeated telephone calls on this subject.
The remainder of this report is organized as follows:
Section II: site History - this section describes ownership of
the site from approximately 1960 to the present, operators at the
site, site operations, and generators and haulers of materials to
the site.
Section III: Potentially Responsible Parties - this section
lists the owners, operators, generators, and haulers identified in
the Site History and includes corporate status Information
regarding these identified responsible parties.
Section IV: Conclusions and Recommendations - this section
presents conclusions and recommendations based on research
conducted.
Documents from federal and state agencies referenced in this
Final Report, are included in Attachments I, II, and IV. They are
stamped with a document reference number in the lower right hand
corner of each page. Statements in the body of the report which
are supported by these documents are noted by the use of the
reference number stamped oh the first page of the document i.e.
(001). Title documents, included in Attachment III, are referenced
in this Final Report by, the Book and Page number where they are
recorded in the Rankin County Chancery Land Office.
II. SITE HISTORY
This section presents the ownership and operational history of
the Sonford Products site (or hereinafter "site"). It focuses on
the operations of Sonford Products Corporation which operated on
the site from 1970 to 1985 and Sonford International Co., Inc.
which operated on the site from 1974 to 1980. This section is
organized in a chronological manner to introduce companies or
individuals involved with the Sonford Products site at appropriate
points in this site history.
The Sonford Products site consists of a 2.8 acre parcel
located at 3506 Payne Drive, Flowood, Mississippi. It is located
several miles east of Jackson, Mississippi (Figure 1).
7
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J
Sonford Products Corporation was incorporated on March 25,
1960 in the State of Mississippi^ The -Incorporators were Mr.
William T. Burford anj^Tlr. Harold Cox (18?Jv * newspaper article
dated, June 24, 1985, states that this Mississippi Corporation was
known as "Sonford Products Corporation, Southern Division*1 (176).
According to Ms. Mary E. McAlister, attorney for Sonford Products
Corporation and Mr. William T. Burford, a Sonford Products
Corporation known as the "Northern Division" was incorporated in
Minnesota by a friend of Mr. Burford's, Mr. Howard E. Olson. Ms.
McAlister stated that the only connection between the two
corporations was that they had the sane name, which was to make it
appear that the Company was larger than it really was. Hence the
Mississippi corporation was designated as the "Southern Division"
and the Minnesota corporation as the "Northern Division" when each
"Division" was in fact a separate corporation with no connections.
Neither man had a financial interest in the other's corporation.
Little information about operations on the site prior to 1970
was discovered by TechLav during its research. However/ Mr.
William T. Burford, Sonford Products Corporation, stated during an
interview vith TechLaw staff, that he knew of three companies that
had operations on the Sonford Products site prior to 1970: l)an
ammunition box manufacturer during World War II (Mr. Burford could
not remember the company's name), 2)W.G. Avery Body Company (a
sawmill operator), and 3)Woodflo Corporation (a pulpwood
concentrator). The Jackson Public Library and the Jackson Research
and Development Center could not provide additional information
about Woodflo Corporation's or W.G. Avery Body company's activities
on the site.
In an telephone interview with TechLaw, Mr. Chuck Penn, listed
as a director on Woodflo Coi^poration's 1983 Annual Report, stated
that Woodflo Corporation was a pulpwood dealer for International
Paper and an independent pulpwood broker. The company operated the
Sonford Products site between 1959 and 1969 as a pulpwood yard and
the site was chosen because it was adjacent to a railroad spur.
According to Mr. Penn, farmers and landowners in the area
would cut pulpwood and truck it to the Sonford Products site.
Woodflo Corporation would buy the wood and transfer it from the
trucks to railroad cars. Mr. Penn stated that there was no
treating of the wood while it was on the site; company operations
consisted strictly of purchasing and loading the pulpwood onto
railroad cars*.
On October 15, 1969, Woodflo Corporation granted t^e Sonford
Products site to William Troy Burford (Book 255, Page 10). On
December 29, 1970, William Troy Burford granted the Sonford
Products site to Sonford Products Corporation (Book 288, Page 538).
8
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Sonford Products Corporation's operations consisted of
blending solid PCP with various solvents irt order to create liquid
wood preservatives. The primary solvent used in the blending
operation was petroleum based. Two other forms of PCP were
manufactured at the Sonford Products site: l)a water repellant form
with a mineral spirits base and 2)a PCP emulsifiable concentrate
(144). According to Mr. Burford, Sonford Products also produced a
liquid sapstain material that contained sodium salt
tetrachlorophenol and mercury during its last years of operation.
This product was packaged in 55 gallon drums and vas produced in
550 gallon lots.
Mr. Burford stated that Sonford Products Corporation would
blend PCP approximately 2 or 3 times per month and store the
blended PCP in tanks on the Sonford Products 6ite. When the
company received an order for the wood preservative, Sonford
Products Corporation would ship the material to its customers in
its own tanker trucks.
According to Mr. Burford, when Sonford Products Corporation
began operations, the company purchased PCP in 50 pound bags.
Later the PCP was purchased in 2,000 pound blocks. The PCP was
initially obtained from Dow Chemical but was later purchased from
Reichold Chemical. Mr. Burford also stated that the PCP was hauled
in Sonford Products Corporation trucks from Dow Chemical and
Reichold Chemical.
Mr. Burford also stated that aside from the PCP, the following
materials were purchased for use in the production of wood
preservatives by Sonford Products Corporation:
tetra PCP
lindane
mercury
solvents:
alcohol
ketones
methyl oxide bottoms
On March 7, 1974, Sonford International Co., Inc. was
incorporated in Mississippi. The Articles of Incorporation list
the incorporators as Mr. William T. Burford, Mr. Morris E. Weeks,
and Mr. James L. Martin (191). Mr. Burford stated that Mr. Weeks
was president while Mr. Burford was vice president. Thite
information was confirmed by the 1985 Annual Report for Sonford
International Cc,, Inc. (190). According to Mr. Burford, his
connection with Sonford International Co., Inc. was limited to a
"financial interest only*1. In a subsequent telephone interview
9
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V^"li
with TechLav staff, Ks. McAlister, attorney for Sonford Products 'v
Corporation, Sonford International Co., Inc., and Mr. Burford, <
stated that Mr. Burford owned a 49% interest in Sonford
International Co., inc.
Mr. Burford also said that sonford International Co.,, Inc. was
a separate operation from Sonford Products Corporation although
both companies were located on the Sonford Products site. Mr.
Burford claimed that Mr. Weeks handled all the operations, orders,
and management for Sonford International Co., Inc. Mr. Burford
indicated that Mr. Wesks worked at the Sonford Products site
approximately three days per week directly supervising operations
at the site.
A memorandum from Mr. Jim Hardage, MDNR, stated that Sonford
International Co., Inc.'s operations consisted of converting PCP to
sodium pentachlorophenate (169). According to Mr. Burford, Sonford
International Co., Inc. purchased solid PCP from Dov Chemical and
Reichold Chemical as did Sonford Products Corporation. Mr. Burford
also stated that Mr. Weeks was familiar with the sapstain business
and this was the market that Sonford International Co., Inc.
concentrated on especially in South America.
On May 15, 1975, Mr. Randy Davis, Mississippi Air & Water
Pollution Control Commission, inspected the Sonford Products site
after receiving a complaint from a neighbor that material from the
Sonford Products site was killing trees on her property, Mr. Davis
discovered that two discharges from Sonford Products Corporation
boilers had drained onto Parcel 1 (Figure 2) to the south of the
Sonford Products site and killed trees and other vegetation (096).
According to Mr. Burford and his attorney, Ms. McAlister,
Sonford International Co., Inc. operations were shut down in March
of 1980.
Mr. Bill Bamett, MDNR, inspected the Sonford Products site on
June 23, 1980. Mr. Bamett noted that solvent had been spilled on
the ground around the tank used for blending PCP with solvents
(103).
According to Mr. Bob Rogers and Mr. John Harper, of BPC, on
June 15, 1983, there was a fire at the Sonford Products site. A
memorandum written by the Flowood Fire Chief, on June 15, 1983,
stated that the company had added caustic soda to a PCP^solution
and the heat generated by the chemical reaction caused the solution
to catch fire. The Flowood Fire Department responded and
extinguished the fire (129). According to Mr. Harper, the fire
caused a release of air contaminants although he did not elaborate
as to the nature of these contaminants.
10
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On July 25, 1983, a complaint was issued in the natter of
Mississippi Commission on Natural Resources v. Sonford Products
Corporation. The complaint alleged that Sonford Products
Corporation had utilized manufacturing processes that caused the
release of air contaminants, between January 1, 1982 and June 14,
1983, which were not permitted by the Mississippi Permit Board.
Subsequently, Sonford Products entered a plea of "nolo cohtendre"
to the complaint, meaning that, while it did not admit guilt, the
company would not contest the complaint (002).
On September 1, 1983, an Order vas issued in the matter of
Mississippi Commission on Natural Resources V. Sonford Products
Corporation that required Sonford Products Corporation to cease
production of all products except Penta-Care Concentrate
immediately. The company was also ordered to cease all operations
at the Sonford Products site before March 1, 1985 (002).
On February 26, 1985, Mr. Burford, Sonford Products
corporation, wrote to Mr. Charlie L. Blalock, MDNR, to request an
extension of the March 1, 1985 deadline for closing the Sonford
Products Corporation facility (165). On March 20, 1985, the
Mississippi Commission on Natural Resources denied the request for
an extension from Sonford Products Corporation (010).
Mr. Burford told TechLaw staff that Sonford Products
Corporation stopped production in March 1985 but continued to sell
products that had been formulated and were stored on the site.
Mr. Mike Norman, U.S. EPA, stated in an interview with TechLaw
staff that there had been a PCP spill in April of 1985. He also
stated that the spill had occurred because, in the process of
pumping rainwater out of several of the diked PCP storage tanks, a
pump was left on resulting in PCP being pumped out into the diked
area. The PCP eventually overflowed the dikes around the tanks and
spilled onto the parcel on the Sonford Products site southern
border (Figure 2). Mr. Norman provided a logbook containing his
notes on cleanup activities regarding the PCP spill. The logbook
indicates that the BPC responded to the spill and discovered that
in addition to the spill there was soil contamination on the
Sonford Products site which was not caused by the spill. Mr.
Norman's notes indicate that Mr. Burford claimed that Sonford
Products Corporation could not afford to pay for the cleanup of
both the PCP spill and soil contamination on the site. Therefore,
Mr. Bob Rogers, BPC, called Mr. Norman to request U.S. EPA
assistance in the entire cleanup operation (016).
^ "f
In spite of Mr. Burford's claim that Sonford Products
Corporation could not afford to pay for cleanup of the PCP spill
and soil contamination at the Sonford Products site, Ms. Mary E.
McAlister, attorney for Sonford Products Corporation, has stated
that the company has not filed for bankruptcy as of March, 1986.
11
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Cleanup at the site consisted of the removal of tanks, removal
of contaminated soil, pumping contaminated water through filters,
and removal of 28,000 gallons of pure PCP for incineration.
According to a memorandum written by Mr. Norman, U.S. EPA, cleanup
activities were completed at the site on May 10, 1985 (05.4).
A U.S. EPA Site Inspection Report, dated September 10, 1985,
stated that the following Hazardous substances had been or were
currently at the Sonford Products site:
PCP
Solvents:
Naptha (mineral spirits)
alcohol bottoms
hexalene glycol
ethylene glycol
caustic soda
sodium pentachlorophenate
buanol
cellosolve acetate
borax
sodium metaborate (060)
Mr. Burford stated, during the March 3, 1986, interview with
TechLav, that neither Sonford Products Corporation nor Sonford
International Co., Inc. are currently operating.
During 1984, 1985, and 1986 numerous civil suits have been
filed in Chancery and Circuit Courts of Rankin County against
Sonford Products, Sonford International Co., Inc. and Mr. William
T. Burford personally. These lawsuits may represent outside
financial interests in this site and, therefore, are listed in
Appendix E to this Final Report.
At the direction of Ms. Townsend, U.S. EPA, TechLaw conducted
additional research on two civil suits against Sonford. Products
Corporation which were filed in the Rankin County Circuit court.
The first, filed by Chapman Chemical Company on.March 21, 1985,
sought payment for materials sold to Sonford Products Corporation
during 1984 and 1985 which totaled $58,891.50. Invoices that
accompanied the complaint indicate that the materials sold were
(219-224):
Sta-brite
SP-60
Tetrachlorophenol
On August 30, 1985, a Final Consent Judgment was entered in
favor of Chapman Chemical Company, in the case in response to a
joint motion by Chapman Chemical Company and Sonford Products
12
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Corporation. This judgment stated that Chapman was entitled to
recover $58,891.50 for the materials sold, late charges, attorney's
fees and expenses for a total of $70,262.68.
The second case was filed by Hunt Oil Company on October 9,
1985 and sought payment for mineral spirits sold to Sonford
Products Corporation. The complaint stated that Sonford Products
Corporation owed Hunt Oil Company $7,398.72, which had accumulated
on an open account basis for goods and materials sold to Sonford by
Hunt (214).
On February 10, 1986, a Default Judgment was entered against
Sonford Products Corporation because it had not responded to the
suit. The judgment stated that Hunt was entitled to recover
$7,398.72 and attorney's fees for a total of 8,398.72.
On September 13, 1985, Mr. George Anderson, Northbrook
Insurance Company, wrote to Mr. Charley L. Blalock, MDNR, stating
that Northbrook Insurance Company had been one of the insurers of
Sonford Products Company from approximately May, 1981, to May,
1983. This coverage was written under Northbrook Insurance Company
policy number 22-02465. In spite of indicating that Northbrook
Insurance Company was only one of Sonford Products Corporation's
insurers, Mr. Anderson did not identify any other insurance
companies in his letter (180).
TechLaw contacted Ms. Kathleen Fairbaim, Northbrook Insurance
Company, for information regarding insurers of Sonford Products
Corporation other than Northbrook Insurance Company. Ms. Fairbairn
stated that Northbrook Insurance Company provided environmental
insurance. Her records did not contain any reference to Northbrook
Insurance Company's policy. Therefore, Ms. Fairbaim referred
TechLaw to Mr. Larry Coffee, Northbrook Insurance Company, for more
information about this policy.
When TechLav contacted Mr. Coffee, he stated that Crump,
London Underwriters had underwritten the environmental insurance
policy; which Northbrook Insurance Company had been part of, for
Sonford,Products Corporation. Mr. Coffee was requested to provide
an address and telephone number for Crump, London Underwriters.
However,;Mr. Coffee had not provided TechLaw with this information
at the time of delivery of this Final Report.
TechLaw discovered that Ms. Mary E. McAlister, attorney for
Sonford Products Corporations, Sonford International Co, !lnc. and
Mr. William T. Burford had already researched insurance coverage
for the Sonford Products site. She provided TechLaw with a list of
companies that had provided coverage to Sonford Products
Corporation and Sonford International Co, Inc. This list along
with addresses, policy numbers, and dates of coverage is Appendix F
to this report.
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According to the Rankin County Tax Assessor's office, Parcel 1
(Figure 2), the property to the south of the Sonford Products site,
vhich was contaminated by the 2,000 gallon spill of PCP, is
currently owned by:
Kr. Calvin Wixson
1116 Flowood Drive
Flovood, Mississippi 39208
III. POTENTIALLY RESPONSIBLE PARTIES
This section lists the owners and operators identified in the
Site History and includes corporate status information regarding
these identified potentially responsible parties. The rationale
for including each individual or company in this section is stated
as veil.
This section also includes financial information for Sonford
Products Corporation and Sonford International, Co., Inc.
William Trov Burford (Owner)
322 North Point Parkway
Jackson, Mississippi
601/957-0874
Kr. Burford is listed as a potentially responsible party due
to his ownership of the Sonford Products site., between October,
1969, and December, 1970.
Document review and interviews with individuals knowledgeable
about the Sonford Products site indicate that Mr. Burford had day
to day control of Sonford Products Corporation which operated at
the Sonford Products site between 1970 and 1985. In addition, Kr.
Burford was vice president of Sonford International Co., Inc. which
operated at the site between 1974 and 1980.
Financial Information:
According to the Rankin County Tax Assessor's office Mr.
Burford is not currently listed as owning any real, business, or
personal property in Rankin County.
14
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Sonford Products Corporation (Owner and Operator)
3506 Payne Drive
Pearl, Mississippi 39208 (from Dun and Bradstreet's Market
Identifiers - could not be
confirmed by long distance
operator)
Registered agent: W.T. Burford
P.O. Box 8474
Jackson, Mississippi 39208
Sonford Products Corporation is listed as a potentially
responsible party due to its operations conducted at the Sonford
Products site between 1970 and 1985 and its ownership of the
Sonford Products site fros December 1970, to the present.
According to the Mississippi Secretary of State's office,
Sonford Products Corporation is a Mississippi corporation in good
standing that was incorporated on March 28, i960. Sonford Products
Corporation's 1985 Annual Report listed Mr. W.T. Burford as
president, Mr. John Burford (Mr. Burford*s son) as vice-president,
and Ms. Ethel Burford as secretary and treasurer (185).
Financial Information:
Sonford Products Corporation is the current owner of the
Sonford Products site. The Rankin County Tax Assessor's office ha&
assessed the Sonford Products site as follows:
Buildings and $86,260
improvements
Land B,400
Total $94,660
According to Ms. Mary E. McAlister, attorney for Sonford
Products; Corporation, the only other assets owned by the company
are miscellaneous pieces of equipment still on the site and some
accounts receivable. Ms. McAlister stated that Mr. William T.
Burford was of the opinion that the accounts receivable were not
collectible.
On August 30, 1985, Chapman Chemical Company obtained a
judgment, in Circuit Court of Rankin County, against Sonford
Products Corporation in the amount of $70,262.68 (Book 19, Page
21). This judgment was entered in the case of Chapman Chemical
Company v. Sonford Products Corporation (Case # 14,759).
15
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On February 10, 1986, Hunt oil Company obtained a judgment, in
Circuit Court of Rankin County, against S cm ford Products
Corporation in the amount of $8,398 (Book 19, Page 71). This
judgment was entered in the case of Hunt Oil Company V Sonford
Products Corporation (Case # 14,871).
In addition, there are numerous civil lawsuits that have been
filed against Sonford Products Corporation vhich are listed in
Appendix £• However, Ms. McAlister stated in an interview with
TechLaw that Sonford Products Corporation has not filed for
bankruptcy at the time of this report.
According to Ks. McAlister, Mr. William T. Burford owns all of
the stock of Sonford Products Corporation.
Sonford International Co.. Inc. (Operator)
P.O. BOX 5570
Jackson, Mississippi 39208 (from 1985 Annual Report - could
not be confirmed by the long
distance operator)
Registered agent: Mr. Morris E. Keeks
P.O. Box 5570
3506 Payne Drive
Jackson, Mississippi 39208
Sonford International Co., Inc. is listed as a potentially
responsible party due to its operations at the Sonford Products
site between 1974 and 1980.
According to the Mississippi Secretary of State's office,
Sonford International Co., Inc. is a Mississippi corporation, in
good standing, that was incorporated on March 1, 1974. Sonford
International Co., Inc.'s 1985 Annual Report listed Mr. Morris E.
Weeks as president and Mr. W.T. Burford as vice-president (190).
In addition, Mr. William T. Burford, Sonford Products Corporation,
stated that Mr. Morris E. Weeks exercised day to day control over
the.operations of Sonford International Co., Inc.
Ms. Mary E? McAlister, attorney for Sonford International Co-,
Inc., stated in an interview with TechLaw that when the company
ceased operations in 1980 all of its assets were liquidated. Ms.
McAlister went on to state that due to the liquidation of the
assets there were no assets in the company presently., Presumably
then the proceeds of the asset liquidation were distributed to the
creditors and shareholders of Sonford International Co. Inc.
However, Ms. McAlister also stated that the company had not filed
for bankruptcy at the time of this report.
16
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Ms. McAlister also stated that Mr. Burford held a 49% interest
in Sonford International Co.* Inc. while Mi*. Morris £. Weeks owned
the other 51% of the company's stock.
Woodflo Corporation (owner and operator)
(the long distance operator had no listing for Woodflo
Corporation) w r
X w
Registered agent: Mr. Lester Penn, Jr. . r
P.O. Box 169 -
Canton, Mississippi 39046
Woodflo Corporation is listed as a potentially responsible
party at U.S. EPA's direction. According to title documents,
Woodflo Corporation owned the Sonford Products site between 1964
and 1969 but the nature and extent of its operations on the site
are not )cnown at this time. Zh addition, Mr. William T. Burford
stated that Woodflo Corporation had operated on the site prior to
Sonford Products Corporation.
According to the Mississippi Secretary of State*s office
Woodflo Corporation is a Mississippi corporation, in good standing,
that was incorporated on June 26, 1959.
According to Mr* Chuck Penn, listed as a director of the
company on it? 1983 Annual Report, Woodflo Corporation has been
inactive, for the past two to three years. He stated that the
company had become inactive after his father, Mr. L.A. Penn, had
bought out the other partners in the business (basically Mr. L.A.
Penn's brother). Kr. Penn stated that the company currently owns
some equipment and, although it is still a current Mississippi
corporation, does not carry out any operations. In addition,
Woodflo Corporation only owns one pulpwood yard similar to the
Sonford Products site at this time. Kr. Penn did not indicate
whether this lot is currently active.
W.G. Averv Body Company (operator)
Box 4270 Fondren Station
Jackson, Mississippi 39216
Registered agents W.G. Avery 11
3002 N. Mill Street
Jackson, Mississippi '
The W.G. Avery Body Company is listed as a potentially
responsible party at the direction of U.S. EPA. According to Mr.
William T.; Burford, W.G. Avery Body Company operated on the site
prior to Sonford Products Corporation's operations but the nature
and extent of its operations are not known at this time.
17
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According to the Mississippi Secretary of State's office w.g.
Avery Body Company is a Mississippi corporation, in good standing,
and was incorporated on August 21, 1939.
IV. CONCLUSIONS.AND RECOMMENDATIONS
The Sonford Products site was operated by tvo companies making
wood preservative products that contained PCP as the primary
ingredient. These companies and their dates of operation were:
1)Sonford Products Corporation, 1970 to 1985, and 2)Sonford
International Co., Inc., 1974 to 1980.
TechLav also discovered, during its research, that Woodflo
Corporation and W.G. Avery Body Company had operated on the Sonford
Products site. TechLav did not discover the nature of these
companies1 operations.
On the basis of the results of its research, summarized in
Section II, Site History, TechLav makes the folloving
recommendations:
Obtain Copies of Policies from Insurers and Sonford Products
Corporation
The U.S. EPA may wish to send letters under CERCLA Section
104(e) to request copies of insurance policies regarding the
Sonford Products site, Sonford Products Corporation, and Sonford
International Co., Inc. These letters could be sent to Sonford
Products Corporation, Sonford International Co., Inc. and/or the
insurance companies listed above. Obtaining copies of these
policies vould allov the U.S. EPA to determine vhether each policy
covers environmental liability, vhether it provides continuing
coverage for claims arising during the policy term, and the payout
limits for claims against the coverage.
The U.S. EPA may vish to also ask for information regarding
undervriters vho initially undervrote the policies and other
insurance companies that had policies regarding the Sonford
Products site.
Contact Potentially Responsible Parties
To obtain more details on the site activities of thte
potentially responsible parties identified in this report, the U.S.
EPA could request, under CERLA Section 104(e), that the parties
identified provide specific information and documentation
concerning years of operation on the site, type of operations on
the site, areas of the site utilized, manufacturing and treatment
processes employed, chemical substances used, vastes generated,
18
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wastes known to be disposed of at the site, substances transported
to and from the site, and other subjects related to the
contamination at the site.
Initiate Financial Assessments
The U.S. EPA should request that its National Enforcement
Investigation Center (NEIC) prepare a Superfund Financial
Assessment report for the potentially responsible parties
identified in this report to determine each party's ability to
assume the cost of clean-up measures at the site.
19
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002
010
016
054
060
096
103
129
144
165
169
176-
180
185
1B6
APPENDIX A
DOCUMENT REFERENCES
ORDER in the natter of Mississippi Commission on Natural
Resources v. Sonford Products corporation, September 1, 1983.
order No. 843 85 in the natter of Mississippi Commission on
Natural Resources VS. Sonford Products Corporation, March 20,
1985.
Logbook for the Sonford Products site written by Mr. Mike
Norman, U.S. EPA, beginning April 20, 1985.
POLREP #9 from Mr. Mike Norman, U.S. EPA, to Ms. Joanne
Williams, U.S. EPA. April 14, 1985.
Potential Hazardous Waste Site, Site Inspection Report, U.S.
EPA, September 10, 1985.
Report of Field Investigation from Mr. Randy Davis, Air &
Water Pollution Control Commission, May 15, 1975.
Memorandum fron Mr. Bill Bamett, MDNR, to file, June 23,
1980.
Report on Fire at Sonford Products site by Mr. Bill E. Bush,
Fire Chief of Flovood, June 15, 1983.
Air Polution Study and Recommendations for Sonford Products
Corporation, September 28, 1983.
Letter from Mr. Troy Burford, Sonford Products Corporation, to
Mr. Chalie L. Blalock, MDNR, February 26, 1985.
Memorandum from Mr. Jim Hardage, MDNR, to file, March 15,
1985.
Newspaper article, "Ex-Sonford Site in Minnesota May Make
Superfund List Too", June 24, 1985.
Letter from Mr. George Anderson, Northbrook Insurance Company,
to Mr Charley L. Blalock, MDNR, September 13, 1985.
1985 Annual Report to Mississippi Secretary of State for
Sonford Products Corporation.
Articles of Incorporation for Sonford Products Corporation,
March 28, I960.
1
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190 1985 Annual Report to Mississippi Secretary of State's office
for Sonford International Co., Inc.
191 Articles of Incorporation for Sonford International Co., Inc.,
March 7, 1974.
214 Complaint filed by Hunt Oil Company, October 9, 1985.
219 Invoices from Chapman Chemical Company to Sonford Products
224 Corporation, 11/20/84 - 2/7/85.
2
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APPENDIX B
PROPERTY OWNERSHIP NARRATIVE
TechLaw was requested in Work Assignment 476 to have.,a title
search conducted for the Sonford Products site located at 3506
Payne Drive, Flowood, Mississippi, which is in Rankin County
(Figure l). TechLaw contracted with Hone-Land Title & Abstract
Co.; Inc. to provide a title search on the Sonford Products site
from 1950 to the present. Subsequently, Hone-Land Title & Abstract
Co., Inc. provided title documents from 1939 to the present. All
documents supporting this Property Ownership Narrative are recorded
in the Chancery Clerk's office of Rankin County.
On December 14, 1950, X.W.G. Avery granted the Sonford
Products site, and property unrelated to the site, to Belton
Johnson shannon. This Warranty Deed was recorded on February 14,
1951 in Book 131, Page 05.
On June 10, 1959, Mrs. Belton J. Shannon granted the Sonford
Products site/ and property unrelated to the site, to John H.
Squires. This Warranty Deed was recorded on June 11, 1959 in Book
166, Page 484.
On February 20, 1963, Mrs. Shannon executed a Correction Deed
which Mr. Squires joined. The Correction Deed made the Warranty
Deed, dated June 10, 1959, subject to a Gas Storage Agreement
between Mrs. Shannon and United Gas Pipe Line which was executed on
August 19, 1955. Any oil, gas, and other minerals in, on or under
the Sonford Products site was subject to the Correction Deed. This
Correction Deed was recorded on March 13, 1963 in Book 192, Page
609.
On March 23, 1964, John Squires granted the Sonford Products
site, and property unrelated to the site, to Woodflo Corporation.
This Warranty Deed states that Mr. Squires acquisition of the
Sonford Products site, and property unrelated to the site, was a
convenience and that the purchase price was paid by Woodflo
Corporation. This Warranty Deed was recorded on November 17, 1964
in Book 208, Page 287.
The Deed between Mr. Squires and Woodflo Corporation was
subject to a lease between Woodflo Corporation, lessor, and Mr.
Benny Garner, lessee. The lease was dated January 14, 1964 and was
to last for one year beginning on January 1, 1964.
1
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On March 5, 1969, the Chancery Court of Rankin County,
Mississippi, granted the Town of Flowood's petition for
confirmation of the extension of its boundaries to include the
Sonford Products site. This Final Decree was recorded on March 7,
1969 in Book 248, Page 406.
On October 15, 1969* Woodflo Corporation granted the Sonford
Products site, and property unrelated to the site, to William Troy
Burford. This Warranty Deed was recorded on October 24, 1969 in
Book 255, Page 10.
On December 29, 1970, William Troy Burford granted the Sonford
Products site to Sonford Products Corporation. This Warranty Deed
was recorded on August 28, 1972 in Book 288, Page 538.
On November 23, 1977, Sonford Products Corporation (grantor)
executed a Deed of Trust with Robert G. Barnett (trustee), with the
Sonford Products site, and property unrelated to the site, being
used as security for the indebtedness involved in this transaction.
Contained within this deed was Sonford Products corporation's grant
of a beneficial interest in the property to Deposit Guaranty
National Bank. This Deed of Trust secured an indebtedness of
$100,000. This deed was recorded on November 28, 1977 in Book 329,
Page 36.
On August 25, 1983, Sonford Products Corporation (grantor)
executed a Deed of Trust vith Robert G. Barnett (trustee), with the
Sonford Products site, and property unrelated to the site, being
used as security for the indebtedness involved in this transaction.
Contained within this deed was Sonford Products Corporation's grant
of a beneficial interest in the property to Deposit Guaranty
National Bank. This Deed of Trust secured an indebtedness of
$350,000. This deed was recorded on August 31, 1983 in Book 470,
Page 351.
On May 14, 1984, Sonford Products Corporation granted an
easement over the Sonford Products site to the Town of Flowood,
Mississippi. This easement allowed the Town of Flowood to install
and maintain a sewer main on part of the property. This easement
was recorded on Julv 11* 1984 in Book 466, Page 509.
The following lawsuits have been filed in Chancery Court
regarding the Sonford Products site:
2
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TITLE
CASE NUMBER DATE FILED
Roy Anderson, Jr., et al. 24,502 5/21/85
VS
Sonford International Co., Inc.,
et al., Sonford Products Corporation
William Troy Burford, and the Dow
Chemical Company
James Grant Wixon 24, 646 S/1/B5
VS
Sonford Products Corp., et al.
Calvin Wixon, et al. 24,847 /15/85
VS
Sonford Products Corp, et al.
On August 7, 1985, the U.S. District Court ordered that all
three of the above cases be remanded to the respective state
courts. This Order was recorded ill Book 4, Page 562.
On August 30, 1985, Chapman Chemical Company obtained a
judgment against Sonford Products Corporation in the amount of
$70,262.68. This judgment was recorded on August 30, 1985 in Book
56, Page 9.
On February 10, 1986, Hunt Oil Company obtained a judgment
against Sonford Products Corporation in the amount of $8,398. This
judgment was recorded in Book 57, Page 6221.
3
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appendix c
INTERVIEW SUMMARIES
Mr. William Trov Burford
Mr. William Troy Burford (hereinafter "Mr. Burford") was the
incorporator and president of Sonford Products Corporation and vas
vice president of Sonford International Company, Inc. Both
operated on the Sonford Products Site. Mr. Burford vas interviewed
by TechLav staff in the offices of his attorneys, Bennett,
Lotterhos, Sulser & Geno, in the presence of Ms. Mary C. McAlister,
Esquire, and Mr. Burford's son, Mr. John Burford on March 3, 1986.
Mr. Burford stated that he purchased the Sonford Products site
in 1970 from. Mr. Lester Penn. Mr. Penn had operated a pulpvood
concentration business on the site called Woodflo prior to Mr.
Burford's purchase of the site.
Tvo prior operations on the site mentioned by Mr. Burford were
an ammunition box manufacturer during World War II and a saw mill
operated by Avery Body Company.
Site operations conduced by Sonford Products Corporation
consisted of formulating wood preservatives to sell to wood
preserving or saw mill operations. The bulk of Sonford Products
Corporation's production vas pentachlorophenol (PCP) which was
produced in two forms 1) water based and 2) oil based. Sonford
Products Corporation also produced a dry PCP and PCP containing
lindane.
In the last years the company vas in operation Sonford
Products Corporation began producing a liquid sapstain material
that contained sodium salt tetrachlorophenol and mercury. This
product vas packaged in 55 gallon drums and vas produced in 550
gallon lots.
Sonford Products initially purchased solid PCP from Dow and
later from Reichold Chemical. The sold PCP was shipped to the
Sonford Products site by Sonford Products Corporation trucks.
The solid PCP was converted into a liquid form by spraying
warm solvent over it. Sonford Products Corporation formulated the
PCP liquid approximately three times per month and then stored the
PCP in tanks on the site until it could be shipped out in tank
truck quantities to wood treating plants.
1
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Mr. Burford also said that Sonford International Company, inc.
was a separate operation from Sonford Products Corporation although
both companies occupied the sane site. According to Mr. Burford,
Mr. Weeks, who was president of Sonford International Company, inc.
ran the operation on his own. Mr. Burford*s connection with
Sonford International Company, Inc. was- limited to financial
involvement. Mr. Weeks handled all the operations, orders, and
management of the company.
Mr. Burford informed TechLaw that Mr. Weeks had worked at
Chapman Chemical Company of Memphis, Tennessee before he and Mr.
Burford formed Sonford International Company, Inc. According to
Mr. Burford, Mr. Weeks was familiar with the sap stain business and
this was the market that Sonford International Company, Inc.
concentrated on especially in South America.
In addition, Mr. Burford pointed out that Mr. Weeks, although
living in Memphis, Tennessee, worked at the Sonford Products site
approximately three days per weex directly supervising operations
at the site. When not present he kept in constant contact with the
site by phone. Sonford International Co., Inc. produced sodium
pentachlorophenol.
According to Mr. Burford, Sonford International Company, Inc.
shut down in March of 1980. This was the direct result of the
death of one of Sonford International Company, Inc's employees.
Mr. Burford informed TechLaw that Mr. Weeks had worked at
Chapman Chemical Company of Memphis, Tennessee before he and Mr.
Burford formed Sonford International Company/ Inc. According to
Mr. Burford, Mr. Weeks was familiar with the sap stain business and
this was the market that Sonford International Company, inc.
concentrated on especially in South America.
Mr. Burford stated that the materials brought into the site
were:
pentachlorophenol
tetrachlorophenol
lindane
mercury
solvents - alcohol, ketones, or methyl oxide bottoms
Sonford Products Corporation stopped production in March 1985
but continued to sell off product that had been formulated and was
stored on the site. Sonford Products Corporation and Sonford
International Co., Inc. no longer operate at the site. However,
neither corporation has filed for bankruptcy. According to Mr.
Burford, both companies are still Mississippi corporations in good
standing.
2
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According to Mr. Burford a 2,000 gallon spill of PCP in April,
1985, flowed onto the parcel to the south of the Sonford Products
site.
Mr. BurXord stated that neither he nor Sonford Produpts
Corporation or Sonford International Co., Inc. leased any of the
property adjacent to the Sonford Products site.
In addition, the only business that Mr. Burford knew of that
was on the parcel to the south of the sonford Products site was a
glass bead manufacturer. Mr. Burford believes that the current
occupant of the southern parcel is a sign shop.
Marv E. McAllster. Esoulre
Ms. McAllster is an attorney with the firm of Bennett,
Lotterhos, Sulsa & Geno which represents Mr. William Troy Burford,
Sonford Products Corporation, and Sonford International Company,
Inc. Ms. McAlister was contacted by telephone on February 13,
1986.
According to Ms. McAlister, Sonford Products Corporation
operated at the Sonford Products site from 1970 to April of 1985.
Sonford International Company; Inc. operated at the Sonford
Products site between 1974 and 1980.
Ms. McAlister also stated that both Sonford Products
Corporation and Sonford International Co., Inc. are both
Mississippi corporations in good standing with the Secretary of
State's office. Neither company is in bankruptcy at this time.
Ms. McAlister was interviewed by phone twice more: on April 1,
1986 and June 19, 1986. The information obtained from Ms.
McAlister on April 1 has been included in this report as Appendix F
and therefore will not be repeated here. What follows is a summary
of Ms. McAlister's comments during the June 19 interview.
Ms. McAlister stated that there was no connection between
Sonford Products Corporation, the Mississippi corporation known as
the "Southern Division", and Sonford Products Corporation, the
Minnesota^corporation known as the "Northern Division." Mr.
Burford, founder of the "Southern Division" and Mr. Howard E.
Olson, founder of the "Northern Division" had worked together at
the same company prior to starting their own companies. They
started their companies the same year and agreed to ;use the same
name for the corporations, ^Sonford Products Corporation", so that
it would appear that the company was larger than it actually was.
3
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According to Ms. McAlister neither Sonford Products
Corporation or Sonford International Co.,''Inc. are doing business
at this time. Sonford Products Corporation stopped producing on
March 1, 1985,.in accordance with an agreement with the MDNR, and
stopped operations on April 18, 1985, when a PCP spill occurred.
Sonford International Co., Inc. has not done business since 1980.
However, neither company has filed for bankruptcy at this timed.
Sonford Products Corporation possesses the following assets
according to Ms. McAlister:
-the site property
-miscellaneous equipment on the site
-some accounts receivable (uncollectable in Mr. Burford's
opinion according to Ms. McAlister)
Sonford International Co., Inc. has no assets of any kind at
this time. Ms. McAlister stated that when it stopped operating all
of its assets were "liquidated."
Ms. McAlister stated that Mr. Burford was the sole stockholder
in Sonford Products Corporation. However, Ms. McAlister understood
that Mr. Burford held a 49% interest in Sonford international Co.,
Inc. while Mr. Morris E. Weeks holds a 51% interest.
Ms. McAlister also stated that she was instructed by the
insurance companies that wrote the policies for Sonford Products
Corporation and Sonford International Co., Inc. not to respond to
TechLaw's request for copies of the insurance policies that she has
in her possession.
Mr. Charles (Chuck) Penn
Mr. Penn is a director of Woodflo Corporation. TechLaw
originally attempted to contact Mr. Perm's father, Mr. L.A. Penn,
who is listed by the Mississippi Secretary of State's office as the
Registered Agent for Woodflo Corporation. However, since Mr^ L.A.
Penn was unavailable, Mr. Chuck Penn agreed to answer TechLaw's
questions about Woodflo Corporation and its operations at the site.
Mr. Penn was interviewed by phone on June 18, 1986.
Mr. Penn stated that Woodflo Corporation had operated the site
as a pulpwood yard during the years that it owned the site. These
operations consisted strictly of purchasing wood from lbcal farmers
and landowners that they trucked to the site. Then unloading the
4
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trucks and loading the pulpvood onto railroad cars. According to
Mr. Penn there was no treating of the vood at all on the site while
Woodflo Corporation operated there.
Mr. Penn also 6tated that Woodflo Corporation acted as an
independent broker of pulpvood and as a dealer for International
Paper. .The site was chosen largely because of the railroad spur
adjacent to the property.
According to Hr. Penn, Woodflo Corporation is currently
inactive and has been for two or three years since Mr. L.A. Penn
bought out his partners (mainly his brother). Mr. Penn also stated
that although Woodflo Corporation is a Mississippi corporation it
was operated as a division of L.A. Penn and Sons when active. L.A.
Penn and Sons carries out the same activities as Woodflo
Corporation but is completely owned by the immediate family of Mr.
L.A. Penn.
At this time, according to Mr. Penn, Woodflo Corporation owns
some equipment and only one pulpwood yard.
5
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APPENDIX D
FIGURES
-------
*1*
Figure I
Sonford Products Site
Tech Law, Inc.
SOURCE Rankin County Tax Map D0H9
-------
Figure II
LEGEND
Sonford Products Site
Parcel I
Tech Law, Inc.
SOURCE: Rankin County Tax Map D0H9
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APPENDIX E
LAWSUITS FILED AGAINST SONFORD PRODUCTS CORPORATION,
SONFORD INTERNATIONAL CO., INC., OR MR. WILLIAM T. BURFORD
CHANCERY CQVRT
££g£ Case Number Date Filed
James Grant Wixon 24,846 5/1/85
v
Sonford Products Corp. et al.
Calvin Wixon et al. 24,847 5/15/85
v
Sonford Products Corp. et al.
Roy Anderson, Jr., et al. 24,502 5/21/85
v
Sonford International Co., Inc.
et al.
Case Title
Evelyn Freebs, Morris O'Neal,
and Marva Yvonne Lovelady
v
The Dow Chemical Company,
Sonford Products Corp, and
W.T. Burford
Leon Moore, Jr.
v
Sonford Products Corp., et al.
Samuel Lee Davis
v
Sonford Products Corp., et al.
Jerry McBride
v
Sonford Products Corp., et al.
CIRCUIT COURT
Wrnnher
14963
14964
14965
14966
Date Filed
2/19/86
2/19/86
2/19/86
2/19/86
1
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Jimmy Lee Calender X4967
v
Sonford Products Corp., et al.
Howard L. King 14968
v
Sonford Products Corp., et al.
Larry Calender 14969
v
Sonford Products Corp., et al.
Carolyn A. Earles 14970
v
Sonford Products Corp., et al.
Raymond Hall 14976
v
Sonford Products Corp., et al.
Bruce Calender 14977
v
Sonford Products Corp., et al.
Johnny Settlemeire 14976
v
Sonford Products Corp., et al.
Danny W. Watkins 14979
v
Sonford Products Corp., et al.
Joe E. Tucker 14980
v
Sonford Products Corp., et al.
Roy Hall 14981
v
Sonford Products Corp., et al.
Douglas A. Parkman 14982
v
Sonford Products Corp., et al.
Douglas Edvard Parkman 14983
v
Sonford Products Corp., et al.
2/19/86
2/.19/8 6
2/19/86
2/19/86
2/28/86
2/28/66
2/28/86
2/28/a86
2/28/86
2/28/86
2/28/86
2/28/86
2
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Billy Breuer 14984 2/20/B6
v
Sonford Products Corp., et al.
3
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APPENDIX F:
COMPANIES THAT PROVIDED INSURANCE COVERAGE
FOR SONFORD PRODUCTS CORPORATION
OR SONFORD INTERNATIONAL CO., INC.
At the direction of U.S. EPA contact, Ms. Gena Tovnsend,
TechLav sought information regarding insurance coverage for Sonford
Products Corporation and Sonford International Co., Inc. Ms.
Tovnsend authorized TechLav to contact Ms. Mary E. McAlister
(attorney for Sonford Products Corporation) in this regard. The
insurance information provided by Ms. McAlister is listed belov by
insurance company. Ms McAlister also provided addresses, policy
numbers, and dates of coverage.
TechLav requested copies of insurance policies in Ms.
McAlister's possession. Hovever, Ms. McAlister stated that without
a vritten request from Techlav detailing the reason the U.S. EPA
vanted the documents, she would be unable to provide copies of
these insurance policies. TechLav consulted Ms. Tovnsend.and it
was decided that TechLav vould transmit the insurance information
it had been able to obtain over the phone in this Appendix and also
make a vritten request for Ms. McAlister to provide copies of any
policies that she had in her possession.
TechLav requested the terms under which it might obtain copies
of insurance policies in her possession in a letter to Ms.
McAlister on April 11, 1986. Subsequently, in a telephone
interviev vith TechLav Staff, Ms. McAlister stated that she had
been instructed by the insurance companies not to respond to
TechLav*s request.
The table belov lists the company name, address (as provided
by -Ms McAlister), contact person that Ms. McAlister has been
dealing vith, policy numbers, and effective dates for each policy.
Ms. McAlister stated that many of these policies may have lapsed in
March 1985 due to nonpayment of premiums. Unless othervise noted
all of the policies listed belov cover only Sonford Products
Corporation.
l
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Lexington Insurance Company
100 Summer Street
Boston, Massachusetts 02110
Policy Number: MP86322703
Effective Dates: 12/27/84 - 85
According to Ms. McAlister this policy precludes pollution
claims.
Western Employers Insurance Company
P.O. Box 1978
Santa Ana, California 92702
Policy Number: BL10-0584-06355
Effective Dates: 5/21/84 « 85
According to Ms. McAlister this policy is an excess coverage
policy.
Hartford Insurance Company
Rolf Salepger
Hartford Plaza
Hartford, Connecticut 06115
Policy Number: 43SMP-WY5408
Effective Dates: 5/20/84 - 10/16/84
According to Ms. McAlister this company was Sonford Products
Corporation's primary insurer.
Hartford Steam Boiler Inspection and Insurance Company
Ms. McAlister has contacted this company's Jackson,
Mississippi attorney. His name and address are:
K. Hayes Callicutt
P.O. Box 157
Jackson, Mississippi 39205
Policy Number: 951071403
Effective Dates: 5/23/79 -80
2
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Policy Number:
Effective Dates:
951071410
5/23/83 - 86
Policy Number: 951071408
Effective Dates: 5/23/82 - 83
Nationwide Insurance Company
Virgil Bowles
2600 Nonconnah Boulevard
Memphis, Tennessee 38132
Policy Number; 22-0265B
Effective Dates: 5/22/81 - 84
According to Ms. McAlister this policy covers product
liability and completed operations.
Wausau Insurance Company
William Cormack
7411 Lake Street
River Forest, Illinois 60305
Policy Number: GA26194
Effective Dates: 2/17/81 - 5/22/81
Commercial Union Insurance Company
Michael Rosier
1 Beacon Street
Boston, Massachusetts 02108
Policy Number: CEE763853
Effective Dates: 9/30/80 - 81
Home Insurance Company
James Moran
59 Maiden Lane
New York, New York 10038
Policy Number: GA9734258
Effective Dates: 9/30/78 - 79
3
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Policy Number:
Effective Dates:
Policy Number:
Effective Dates:
Policy Numbers
Effective Dates:
GA9739986
9/30/78 - 79
GA9955870
9/30/78 - 79
GA9955868
9/30/78 - 80
Policy Number: GA9962186
Effective Dates: 3/1/80 - 81
According to Ks. McAlister Hone Insurance Company may have
insured Sonford International Co., Inc. in addition to Sonford
Products Corporation.
Aetna Life and Casualty
David Byrd
P.O. BOX 1993
Jackson, Mississippi 39205
Policy Number:
Effective Dates:
Policy Number:
Effective Dates:
87AL800920
9/1S/76 - 77
87XS800920
9/15/76 - 77
Gulf Insurance Croup
Gene W. Golembievski
P.O. Box 1771
Dallas, Texas 75221
Policy Number: 567-02-97
Effective Dates: 10/17/72 - 73
4
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Republic Insurance Company
Sherry Sanders
P.O. Box 1660
Houston, Texas 77251
Policy Number: CDUO-162
Effective Dates: 6/9/75 - 76
According to Ms. McAlister this is an excess coverage policy.
Travelers Insurance Company
1 Tower Square
Hartford, Connecticut 06115
Ms. McAlister stated that she has never been able to determine
if Travelers Insurance Company ever provided coverage on more than
just Sonford Products Corporation vehicles.
5
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ATTACHMENT B
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^eeee6e VIEW seSSSeeSSeeE EVENT SUMMARY feSSSSe SCREEN 1 OF 1 6§S§£
&gg§§e€eeee§3§eee§eee§eee§§§@¥ n
REF NO.: 02405 EPA ID: MSD086556368 °n
OPUNIT: 00 SITE NAME: SONFORD PRODUCTS "n
-# EVENT: RV1 EVENT NAME: REMOVAL ACTION *n
?$&&&&££&&&£&££&£&&£££&&&£&&&&&&& EVENT DATA
EVENT LEAD: F PLANNING STATUS: an
SCAP NOTE: EVENT QUALIFIER: C °n
TAKEOVER: APPROVAL AUTHORITY: OC °n
EVENT CATEGORY: °n
START COMPLETE °n
PLANNED: / / / / °n
ACTUAL: 04/21/85 05/12/85 #n
°n
FIRST START INDICATOR: A FIRST COMPLETE INDICATOR: A °n
°n
CONTACT NAME: CONTACT NO.: ( ) - °n
Menu options Edit Leave Quit [M]
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ATTACHMENT C
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FINAL IFMS RECONCILIATION PENDING
ition 1 - Page 1
mnized Cost Summary
09/02/92
SONFORD PRODUCTS, MS
(SSID — 4 J5)
COSTS FROM 10/01/69 THROUGH 08/31/92
EPA Expenditures
REGIONAL PERSONNEL COST 7030.95
HEADQUARTER PERSONNEL COST 137.88
EPA INDIRECT COST 19437.50
REGIONAL TRAVEL COST 2771.51
HEADQUARTERS TRAVEL COST 0.00
EMERGENCY REMOVAL CLEANUP (ERC) CONTRACT
HAZARDOUS WASTE TECHNOLOGY SERVICES (68-01-6859 ) 420314.22
ENVIRONMENTAL SERVICES ASSISTANCE TEAMS (ESAT)
ICF (68-01-7456 ) 925.32
ICF TECHNOLOGY INCORPORATED (68-D1-0135 ) 674.47
TECHNICAL ASSISTANCE TEAM (TAT) CONTRACT
ROY F. WESTON (68-01-6669 ) 23420.23
TECHNICAL ENFORCEMENT SUPPORT (TES) CONTRACT
ALLIANCE/GCA (68-01-6769 ) 80.55
PLANNING RESEARCH CORPORATION (68-01-7037 ) 13744.92
TOTAL EPA EXPENDITURES: 488537.55
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FINAL IEMS RECONCILIATION PENDING
jction 2 - Page 1
V9/02/92
SONFORD PRODUCTS, MS (SSID = 4 J5)
1. The United States Environmental Protection Agency has incurred
COStS Of at least $ 420314.22 for EMERGENCY REMOVAL CLEANUP (ERC)
CONTRACT contract expenditures. The total represents the
amount spent under the HAZARDOUS WASTE TECHNOLOGY SERVICES Contract.
2. The United States Environmental Protection Agency has incurred
costs Of at least $ 925.32 for ENVIRONMENTAL SERVICES ASSISTANCE
TEAMS (ESAT) contract expenditures. The total represents the
amount spent under the ICF Contract.
3. The United States Environmental Protection Agency has incurred
costs Of at least $ 674.47 for ENVIRONMENTAL SERVICES ASSISTANCE
TEAMS (ESAT) contract expenditures. The total represents the
amount spent under the ICF TECHNOLOGY INCORPORATED Contract.
4. The United States Environmental Protection Agency has incurred
costs of at least § 23420.23 for TECHNICAL ASSISTANCE TEAM (TAT)
CONTRACT contract expenditures. The total represents the
amount spent under the ROY F. WESTON Contract.
5. The United States Environmental Protection Agency has incurred
costs of at least $ 80.55 for TECHNICAL ENFORCEMENT SUPPORT
(TES) CONTRACT contract expenditures. The total represents the
amount spent under the ALLIANCE/GCA Contract.
6. The United States Environmental Protection Agency has incurred
costs of at least $ 13744.92 for TECHNICAL ENFORCEMENT SUPPORT
(TES) CONTRACT contract expenditures. The total represents the
amount spent under the PLANNING RESEARCH CORPORATION Contract.
7. The United States Environmental Protection Agency has incurred at
least $ 137.88 for headquarters payroll expenses.
8. The United States Environmental Protection Agency has incurred at
least $ 7030.95 for regional payroll expenses.
9. The United States Environmental Protection Agency has incurred at
least $ 2771.51 for regional travel expenses.
10. The United States Environmental Protection Agency has incurred at
least $ 19437.50 for indirect expenses.
Total EPA Expenditures on this site are at least $
488537.55
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ATTACHMENT D
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THE HARTFORD 5TEAM BOILER INSPECT I On AND INSURANCE COMPANY
COMPREHENSIVE
DECLARAT IONS
POLICY \UM8ER . . .
\AME or INSURED . .
DATE ISSUED 06/08/84
EFFECTIVE DATE THIS CHANGE. -05/23/84
• • N0-9510714-10
* ' SONFORD PRODUCTS CORP
ADDRESS OF INSURED
POLICY PERIOD . . .
ANNUAL PREMIUM . .
PREMIUM THIS CHANGE
LOCATION (00001} .
PROPERTY DAMAGE
LIMIT
PO BOX 5570
JACKSON MS 39208
5/23/83 TO 5/23/86
$830.00
S830.00
P/I 3506 PAYNE DR
FLOWOOD MS 39708
$750,000.00
DEDUCTIBLE S250.00
JUSTNESS INTERRUPTION/EXTRA EXPENSE
LIMIT $187,500.00
COMMENCEMENT OF LIABILITY 12 HOURS
SPOILAGE INSURANCE
LIMIT $5,000.00
DEDUCTIBLE $250.00
PLEASE ATTACH THIS DECLARATIONS TO YOUR POLICY
PAGE 1
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THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
COMPREHENSIVE
DECLARATIONS
DATE ISSUEO 06/08/84
EFFECTIVE DATE THIS CHANGE. -05/23/84
POLICY NUMBER NO-9510714-10
NAME OF INSURED ....
SONFORD PRODUCTS CORP
ADDRESS OF INSURED . . pg ggx 5570
JACKSON MS 39208
POLICY PERIOD 5/23/83 TO 5/23/86
ANNUAL PREMIUM .... <330 00
PREMIUM THIS CHANGE . . $330!00
LOCATION (00001) • - • p/i 3506 PAYNE DR
FLOWOOD MS 39708
PROPERTY DAMAGE
LIMIT $750,000.00
DEDUCTIBLE $250.00
BUSINESS INTERRUPTION/EXTRA EXPENSE
^MIT $187,500.00
COMMENCEMENT OF LIABILITY 12 HOURS
SPOILAGE INSURANCE
LIMIT 55,000.00
DEDUCTIBLE $250.00
PLEASE- ATTACH THIS DECLARATIONS'^ YOURiPOLlCY
PAGE 1
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-ijuvi JJ^[P(Vir* rrtJ ^ T'",r, ^ '™v *"ir* *" ','^lir"1 * ^™T>^~^rx>x. rr V>\t>*
!> • "•*"£,
im
coverage
&
EXPEDITING EXPENSES/WATER
. . -. substantially expanded. The policy sublimics have be
ered Accident for expenses of this type. . ; Y ! >
.. . ; .¦ .' '>>:•
¦•; • AVAILABLE LIMJTOF LIABILITY — Higher limits of liability (up to $5,000,000 perboilerand
machinery Accident)are now available to you.' : .•* •".* v-r^" '.
¦¦' x *•'•'•' *'V 'iV'*; ' • -¦ '*'¦ "¦' if
• ADDITIONAL, EXPENSES — A new coverage has been added which modifies the pdicy/exdimon-; jv-A. ;
- ; for increases in your loss^resulting from the operation of governmental laws, ordinances, orlregula-; .'G.
tions..This p'rovision^g'ranre'eoverage for additional expenses associated wich the clean up,: repair or 'V. *¦ •
replacement, ' or disposal of property contami nated by a subscance declared hazardous to health by any ¦ ' ''
authorized governmental agency. TTiis coverage is provided with a sublimit of $25,OOO.Vv^fei. •;
,MC.. '- v- :! 1:.^-r,v!'
• EARTH MOVEMENT.'— Coverage for boiler and machinery Accidents resulting from earth move-
ment (e.g., earthquake? landslide, mudslide, subsidence, volcanic eruption, etc.) is no longer.. .
included with your policy^. This coverage is available to you under other forms of property insurance.
.v. f \ : ft''.I.?- ' • ¦ ¦¦ c•
. ¦¦ , • ' ¦ <- _ ... ' ' ' ' ¦" u • '
SPOILAGE INSURANCE;.-1?-, You may now purchase <
• or $25,000) for!(Mverage;of the spoilage of your{'perishable goods"
_ ; 'machinety^Acddent'.f (NOTE:' Spoilage is an optional coverage''arid is "riot auromatfcally:
• f '••••' ' — ' *—
- -•-.k.Some classes of business are not eligible for !
esuons.vronta
IliERaNSFEGTI
MS .62
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PROPERTY DAMAGE INSURANCE
Coverage A Loss to Your Property. We will pay
you the amount you spend to repair or replace your
property directly damaged by the "Accident". The
amount of our payment, subicct to the Property
Damage Limit, shall be the smaller of:
1 the cost at the time of the "Accident" to repair
the damaged property; or.
2. the cost at the time of the "Accident" to replace
the damaged property, ai the same location,
with property of like kind, capacity and quality.
We will not pay for loss or damage to property which
was useless or obsolete to you before the "Accident".
Also, we will not pay for the cost of repairing or
replacing any pan or parts of an "Object" in excess of
the cost of repairing or replacing the entire "Object"
You may replace the damaged property with better
kind or quality or larger capacity if you pav the extra
cost of doing so.
The damaged property must be repaired or replaced
within eighteen months after the "Accident". This
time period may be extended only with our written
consent.
If the damaged property is
1. not repaired or replaced within the time al-
lowed, or
2. not repaired or replaced ai all,
then we will pay only the actual cash value of the
damaged part of the propertv.
The term "actual cash value" wherever it is used in
this policy, means the amount which it would cost to
repair or replace damaged property with material of
like kind, capacity, size, and quality, less allowance
for physical deterioration and depreciation.
Coverage B - Expediting Expenses. We will pay
the reasonable extra cost to
1. make temporary repairs to,
2. expedite permanent repairs to, and
3. expedite permanent replacement of your dam-
aged property.
However, our payment will be limited to what is left
of die Property Damage Limit after we pay your loss
under Coverage A, or $25,000, whichever is less.
Coverage C - Liability for Loss to Property of
Others. An Accident" may directly damage proper-
ly offcthers that is in your care, custody or control If
you have a legal obligation to pay for that damage, we
will make thai paymeni for you. However, our pay-
ment will be limited to what is left of the Propertv
Damage Limn after we pay your loss under Coverages
A and B.
If the other party brings a claim or suit against you,
stating that you have a legal obligation to pay for the
damaged property, then, at our choice, we will either
1 settle the claim or suit, or
2 defend you against the claim or suit, but keep
for ourselves the right to settle it at any point
The Property Damage Limit shall apply only to the
amounts paid under this coverage for the payment of
claims, judgments or awards. Wc will pay the entire
cost to defend you without regard to the Property
Damage Limit
Property Damage Limit. The limit of your in-
surance agninsi loss under Property Damage coverage
from any One Accident will be the amount shown as
Property Damage Limit in ihe Declarations for the
location where the "Accident" occurs. If an initial Ac-
cident causes other Accidents, all will be considered
"One Accident". All Accidents at any one location
which manifesi themselves at ihc same time and are
the result of the same cause will be considered "One
Accident". Our payment will not increase "if more
than one insured is named in the policy.
Ammonia Contamination Limit. Our total pay-
ment for damage caused by ammonia contacting or
permeating property under refrigeration as a result of
One Accident 10 one or more refrigerating systems
will not exceed S25.000. This Ammonia Contamina-
tion Limit
1. includes salvage expenses and
2. is part of the Property Damage Limit in the
Declarations for the location, and is not an addi-
tional amount of insurance.
2
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BL VESS INTERRUPTION/
EXTRA EXPENSE INSURANCE
M ater Damage Limit. Our total payment for water
damage to property as a result of One Accident to one
or more air conditioning units or refrigerating
systems will not exceed 125,000. This Water Damage
l.imii
1 includes salvage expenses and
'Z is pan of the Property Damage Limit in the
Declarations for the location, and is not an addi-
tional amount of insurance.
Hazardous Substances Limit. As a result of an Ac-
cident to an "Object" property may be damaged,
contaminated or polluted by a substance declared to
be hazardous to health by an authorized governmerv
tal agency We will pay up to S25,000 for any addi-
tiona) expenses incurred by you for clean up, repair
or replacement or disposal ol that damaged, corv*
TarrflraTeS or polluted property, as used here, addi-
tional expenses mean expenses incurred bevorTd
Those for which we would be liable if no substance
hazardous m health had been involved.
Property Damage Deductible. We will first
deduct 1250 from the total amount of loss and ex-
pense from any One Accident that we would pay for
under Coverages A, B and C.
Coverage D. We will pay
1 your actual loss from a total or panial inierrup-
, tion of business, but no: the charges and ex
penses which do not necessarily continue dur
tng the interruption of business, and
2 the reasonable extra expense to continue your
normal business operations during the interrup-
tion,
caused solely by an "Accident" to
(a) a defined "Object", or
(b) any transformer or electrical apparatus
which is
(1) located on or within 500 feet of your
premises; and,
(2) owned by a public utility company
and,
(3) used to supply electrical power solely
to your premises.
The "Accident' must occur during the Policy Period
hui e xpiration of the policy does not limit our liability
under this coverage.
The term "normal business opera",ons" means the
condition of your business that would have existed
had no "Accident" occurred. The term "extra ex-
pense' means the additional cost you incur to run
your business during the interruption, over and
above the cost that normally would have been incur-
red to run the business during the same period had no
"Accident" occurred.
Exclusions Applying to Business Interrup-
tion/Extra Expense Insurance. This coverage
tli us not appiy
l during the time when business would not or
could not have been carried on if the
"Accident" had not occurred, or.
2. if you fail to use all reasonable means to resume
business as soon as possible, or
v for that part of any loss or expense which is due
solely to suspension, lapse or cancellation of a
contract, lease, license or order.
Business Interruption/Extra Expense Limit. The
Business Interruption/Extra Expense Limit under this
coverage for any One Accident is equal to 2 5 % of the
Property Damage Limit for the location where the
4
5
-------
Accident' occurs. This limit is in addition to the Pro-
perty Damage Limit for that location.
Notice of Accident. At our expense, you must im-
mediately give notice of "Accident" 10 any of our of-
fices. You must confirm that notice in writing.
Commencement of Liability. Our liability under
this coverage starts
1. twelve hours after the lime of the "Accident",
or
2. twelve hours before wt1 receive notice of Acci-
dent" .
whichever is later.
Reducing Your Loss. You must reduce your loss, if
possible, by
I. resuming business, in p:irt or completely.
2 using merchandise or other property available
io you,
3 using the property or services of others.
We may. at our option, take any action that may
reduce your loss.
Coverage E - Spoilage Insurance. Spoilage in-
surance applies at any location for which a Spoilage
Ltnfli is shown in the Declarations. At each location
where coverage is provided, we will pay for your loss
of perishable goods due to spoilage resulting from
lack of power, light, heat, steam or refrigeration caus-
ed solely by an "Accident" tot: •
I an "Object", or
2. any transformer or electrical apparatus which is
(a) located on or within 500 feci of that loca-
tion; and,
(b) owned by a public utility company; and,
(c) used to supply electrical power solely to
thai location,
provided thai the "Accident" occurs during the
policy period.
The amount of our payment, which shall be deter-
mined on the basis of the actual cash value of the
damaged goods at the time of the "Accident", shall
not exceed the Spoilage Limit specified for the loca-
tion where the "Accident" occurs.
Exclusion Applying to Spoilage Insurance. This
coverage does not apply it you tail to use due
diligence and dispatch and all reasonable means to
proiect the perishable goods from damage following
an "Accident".
Spoilage Limit. The limit of your insurance against
loss under Spoilage coverage from any One Accident
is the amount shown as Spoilage Limit in the Declara-
tions for the location where the "Accident" occurs.
This limit is in addition to the limits that apply to the
Property Damage and Business Interruption/ Extra
Expense coverages. If an initial Accident causes other
Accidents, all will be considered "One AccidentAll
Accidents at any one location which manifest
themselves at the same time and arc the result of the
same cause will be considered "One Accident". Our
payment will not increase if more than one insured is
named in the policy.
Spoilage Deductible. This coverage does not apply
unless your loss of insured goods is J250 or more. If
your loss is less than $250, we will not pay any pan of
6
7
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DEI tfTIONS
it If your loss is 1250 or more, we will pay all of the
loss, bui not more than the Spoilage Limit
Reducing Your Loss. You must reduce your loss, if
possible, by:
I using oiher property or services that vou own
or control, or
2. using the property or services of others
\X'e may, at our option, take any action that may
reduce your loss.
You/We
The words "you" and "your" refer co the insured
sho^\fi in the Declarations. The words "we", "us",
and "our" refer to The Hartford Steam Boiler Inspec-
tion and Insurance Company.
Object
"Object" means any of the ."following equipment
owned or leased by you or operated under your con-
trol:
I. any boiler or fired vessel;
2 any unfired vessel subject to vacuum or internal
pressure other than weight-of contents;
V any refrigerating or air conditioning system, in-
cluding all vessels, coils and piping that contain
refrjgerant or other medium for cooling,
humidifying or space heating;
4. any piping and its accessory equipment, but not
including
(a) sewer piping
(b) underground gas piping
(c) piping forming par of a sprinkler system,
or
(d) water piping other than boiler feedwater
piping, boiler condensate return piping or
water piping forming pan of a refrigerating
or air conditioning system;
5. any compressor, pump, engine, turbine, motor,
generator, gear, gear set, fan or blower, in-
cluding any shaft forming a part of the
"Object", together with any coupling, clutch,
wheel or bearing on that shaft;
6. any transformer or electrical distribution equip-
ment; and
7. any oihcr mechanical or electrical equipment
used for maintenance or service of the
premises, but not used for processing or
manufacturing.
However, "Object" does not include
(a) any oven, stove or furnace;
(b) any boiler setting;
(c) any insulating or refractory material;
(d) any equipment used for computing, data
processing, communication, lighting,
advertising, display, testing, experimental,
research, diagnostic, therapeutic, surgical,
denul, or pathological purposes;
e
9
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(c) any "Object" which is being, or has been.
manufactured Tor sale; nor.
(f) any vehicle, elevator, escalator, conveyor,
hoist or crane.
Accident.
"Accideni" means a sudden and accidental
breakdown of ihe "Object" or parr of the "Object".
At the time
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EXCLUSIONS
A. FIRE. This policy does not apply to loss from
fire
(1) that occurs at the same time as an "Acci-
dent",
(2) that follows an "Accident",
or the use of water or other means to extinguish
fire.
Also, this policy docs not apply to loss from an
"Accident" caused directly or indirectly by fire
or the use of water or other means to extinguish
fire.
B. Combustion Explosion. This policy does not
apply to loss from a combustion explosion out-
side the "Object"
(1) that occurs at the same time as an "Acci-
dent". or
(2) that follows an "Accident".
Also, this policy does not apply to loss from an
"Accident" caused directly or indirectly by a
combustion explosion outside the "Object"
C. Flood. This policy does not apply to loss from
flood unless an "Accident" ensues, in which
case we pay only for loss resulting from that
"Accident".
D. Earth Movement. This policy does not apply
to an Accident caused directly or indirectly by
earth movement, including but not limited to
earthquake, landslide, mudslide, subsidence or
volcanic eruption.
E. Ordinance or Law. This policy does not apply
to any increase in the loss necessitated by com-
pliance with any ordinance, law, regulation,
rule or ruling regulating or restricting repair,
alteration, use. operation, construction or in-
stallation.
F. Indirect Losses. Under Property Damage In-
• surance, this policy does not apply to loss from:
(1) a delay in or interruption of any business,
manufacturing or process,
(2) lack of power, light, heat, steam or
refrigeration, or
(3) any other indirect result of an "Accident".
G. War Damage. This policy does not apply to
loss from an "Accident" caused directly or in-
* directly by
1. hostile or warlike action, including action
in hindering, combating or defending
against an actual, impending or expected
attack, by '
(a) any government or sovereign power
(de jure or de facto) or any authority
maintaining or using military, naval or
air forces.
(b) military, naval or air forces, or
(c) an agent of any such government,
power, authority or forces;
2. insurrection, rebellion, revolution, civil
war or usurped power, including any ac-
tion in hindering, combating or defending
against such an occurrence, or by confisca-
tion by order of any government or public
authority.
H. Nuclear Energy. This policy does not apply to
loss, whether it be direct or indirect, proximate
or remote
I from an "Accideni" caused directly or in-
directly by nuclear reaction, nuclear radia-
tion ot radioactive contamination, all
whether controlled or uncontrolled: or
2. from nuclear reaction, nuclear rad.iation or
radioactive contamination, all whether con-
trolled or uncontrolled, caused directly or
indirectly by, contributed to or aggravated
by an "Accident'
nor shall we be liable for any loss covered in
whole or in pan by any contract of insurance
which you carry and which also covers any
hazard or peril of nuclear reaction or nuclear
radiation.
12
13
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CONDITIONS
1. Additional insured, as respects any location
stated in the Declarations, any person or
organization designated as an Additional In
sured will be considered an insured with
respect only to loss from an "Accident" at that
location.
2. Cancellation. You may cancel this policy by
rcturrucg it to us or our authorized agent, or by
mailing us advance notice of the date cancella-
tion is to take effect. We may cancel the policy
bv sending you a notice of our intent to cancel.
The notice will state the effective date of
cancellation which ends the policy. If we cancel
for nonpayment of premium, we will send you
at least ten days notice. If we cancel for any
other reason, we will send you at least thirty
days notice. If the policy is cancelled, you may
be entitled to a premium refund. If we cancel,
the refund will be pro rata. If you cancel, the re-
fund will be 75% of pro rata. But the cancella-
tion will be effective even if we have not yet
made or offered a re/lind.
A notice of cancellation may be mailed or
delivered. If mailed, proof of mailing wilt be suf-
ficient proof of notice. In either case, we will
send the notice to the mailing address shown in
this policy.
3. Changes. This policy contains all the
agreements between you and us. It can be
amended only by a policy change issued by us.
4. Concealment or Misrepresentation. This
insurance is void if you intentionally conceal or
misrepresent any material fact or circumstance
rciuun# ;o ihis insurance at any time.
5- Death, Bankruptcy or Insolvency. If you
die, or arc adjudged bankrupt or become insol-
vent. your rights and duties will be transferred
to your legal representative if we arc notified in
writing within 60 days.
6. Duties After an "Accident". You have the
following duties after an "Accident":
(a) You, or someone acting on your behalf,
must immediately notify us in writing.
(b) You must not allow repairs to be made or
physical evidence of the "Accident" to be
removed until we have had time to ex-
amine the property and premises. But you
may take whatever measures are necessarv
for protection from further damage.
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Under Coverage C. no one has a right 10 bring
legal action against us unless the amouni you
are required to pay has first been determined.
The amount may be determined either by
(a) final judgment against you after trial, or
(b) written agreement between the claimant,
you and us.
Any person or organization entitled to such a
judgment or written agreement to recover
under this policy will have the right to do so, up
to the amouni of insurance available for pay-
ment oT Coverage C loss. No one has the right
under this policy to bring us into an action to
determine your liability. Your bankruptcy or in-
solvency. or that of your estate, shall not relieve
us of any obligations under Coverage C of this
policy.
9. Loss Payee. Coverages A and B Only. If a per-
son or organization is stated in the policy as a
Loss Payee, we will adjust with and make pay-
ment to that Loss Payee.
10. Mortgagee Interest. This Condition applies
only if a Mortgagee is shown in the Declarations
for the location where the "Accident" occurs.
Loss to your property shall be adjusted with and
payable to you and the Mortgagee as interests
may appear. Cancellation as respects the Mor-
tgagee shall be effective at the time specified in
the notice to you, but in no event earlier than
ten days after the date of mailing of the copy of
notice to the Mortgagee. We will mail a copy of
the cancellation notice to the Mortgagee at the
Mortgagee's address shown in the Declarations.
Suspension of insurance on an "Object" under
the Suspension Condition of the policy will ap-
ply to any interest of the Mortgagee. We will
mail the Mortgagee a copy of the suspension
notice.
11. Other Insurance • Coverage A and B. If you
have other insurance that applies to loss insured
against by this policy, we call that loss a joint
loss.
We will determine
{«) the amouni thai this policy alone would
pay for the joint loss, and
(h) the total amount that would have been paid
b\ all of the policies, separately, for the
joint loss.
\X'c will pay no more'&f the joint loss than
the fraction determined by dividing item (a)
by item (b).
If the other policy or policies do not have a
provision similar to the above, the follow-
ing procedure will be used:
We will determine
(c) the limits for all coverages that apply to the
joint loss under this policy, and
(d) the limits for all coverages that apply to the
joint loss under all policies.
We will pay no more of the joint loss than
the fraction determined by dividing item (c)
by item (d).
12. Other Insurance - Coverage C. We will pay
only that pan of a loss under Coverage C that re-
mains after you have used up all other valid and
collectible insurance. Other valid and collectible
insurance includes any applicable deductibles
and self-insurance retentions.
13. Our Right to Recover Payment from
Others. Any persons or organizations to or for
whom we make a payment under this policy
must transfer to us their rights of recovery
against any other party for what we paid. They
must do everything necessary after loss to
.secure, and nothing to harm, these rights.
14. Policy Period. The dates shown in the
Declarations indicate the Policy Period. The ef-
fective time for each of the dates is 12:01 a.m.,
Standard Time, at the location where the "Acci-
dent" occurs.
15. Premium Payment. The policy premium is
payable annually. If the Policy Period is one
year or less, the premium is due as of the effec-
tive date of the policy.
16
17
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If the Policy Period is longer than one year, the
premium for the first year is due as of the effec-
tive date of the policy. At each anniversary, the
premium for the next year becomes due. it will
be computed on the basis of the rules, raies and
forms then in effect.
16. Special State Requirement. Any and ill pro-
vision! of this policy which conflict with the
statutes of the state in whic* this policy his
been issued arc understood by us to conform to
such statutes.
17. Suspension. Whene'er an "Object" is found
to be in. or exposed to, a dangerous condition,
any of our representatives may immediately sus-
pend the insurance against loss from an "Acci-
dent" to that "Object" We can do this hy
delivering or mailing a written notice of suspen-
sion to
(a) your address as shown in the Declarations,
or
(b) the address where the "Object" is located.
Once suspended in this way, your insurance
can be reinstated only by written notice from
us.
If we suspend your insurance, you will gci a pro
rata refund of premium. But the suspension will
be effective even if we have not yet made or of-
fered a refund,
18. Titles of Paragraphs and Pages. The title of
various paragraphs ana pages are included only
to help you locate information within this
policv. They are not intended to limit or other-
wise affect the provisions to which they relate.
19. Transfer of Your Rights and Duties. Your
rights and duties under this policy may not be
transferred without our written consent.
18
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&TTAP-HMBNT E
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
O
JAN 1 0 1938
DRAFT
0*
C*«* r>Ai.i r.:
cowiiAirt mo*svo«*sc
MEMORANDUM
SUBJECT:
Guidance on Statute of Limitations, for CERCLA Section
107 Cost Recovery Actions
Thomas L. Adams, Jr., Assistant Administrator
FROM:
TO:
Regional Counsel
Regions I-X
The purpose of this memorandum is to further delineate EPA
policy regarding the timing of CERCLA Section 107 cost recovery
actions in light of the new CERCLA statute of limitations. This
memorandum expands upon and updates guidance entitled, "Cost
Recovery Actions/Statute of Limitations" (OWPE, June 12, 1987).
This memorandum also interprets key language in CERCLA Section
113(g)(2) regarding the period of time in which cost recovery
actions may be brought.
BACKGROUND
CERCLA Section 113(g)(2) states:
An initial action for recovery of the costs
referred to in section 107 must be commenced —
(A) for a removal action, within 3 years after
completion of the removal action, except that
such cost recovery action must be brought within
6 years after a determination to grant a waiver
under section 104(c)(1)(C) for continued response
action; and (B) for a remedial action, vithin
6 years after initiation of physical on-site
construction of the remedial action, except
that, if the remedial action is initiated within
3 years after the completion of thejremoval
action, costs incurred in the removal action
may be recovered in the cost recovery action
brought under this subparagraph.
In any such action described in this subsection, the
court shall enter a declaratory judgement on liability
for response costs or damages that win be binding
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DRAFT
on any subsequent action or actions to recover
further response cost or damages. A subsequent
action or actions under section 107 for further
response costs at the vessel or facility may be
maintained at any time during the response action,
but must be commenced no later than 3 years
after the date of completion of all response
action. Except as otherwise provided in. this
paragraph, an action may be commenced under
section 107 for recovery of costs at any time
after such costs have been incurred.
E3SVES
The general EPA policy is to file cost recovery actions well
in advance of deadlines. However, implementing this policy in
light of the new statutory language raises several policy issues
as well as issues of statutory interpretation. Included among
those issues are:
1. What is the meaning of the word, "commenced?"
2. When is a removal action "completed?"
3. What is the deadline for removal cost recovery when
104(c)(1)(C) waivers are used?
4. When is a remedial action "initiated?"
5. What is the deadline for RI/FS cost recovery — removal or
remedial time limits?
6. Do section 113(g) cost recovery time limits apply to
recovery of pre-SARA costs?
7. what are the other time limits under cercla tor tiling
removal cost recovery actions?
8. What are the time limits for filing "subsequent" cost
recovery actions after entry of a declaratory judgment?
9. Should each operable unit have its own time limit?
. i
10. What marks the completion of remedial action?
11. Can new defendants be added after the statute of
limitations has tolled?
Each of these issues is discussed below.
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t'V^A'CT
L/ivZ-.l l
DTSCUSSION
1. Meaning of the word, "commenced"
Section 113(g) requires that cost recovery actions be
''commenced" within certain periods of time — the deadline for
commencing a cost recovery action varies depending uppn the response
action taken. As used, the word "commenced" means the filing of
a CERGLA Section 107 cost recovery action in court.
2. Completion of a removal action
Section 113(g)(2)(A) requires initial cost recovery actions
for removals to be commenced within 3 years of the completion of
the removal action. As stated in the June 12, 1987 guidance,
EPA, as a matter of policy, considers a removal action to be
complete on the day that the cleanup contractor demobilizes at
the site and completes the scope of work identified in the original
or modified Action Memorandum- The final Pollution Report (POLREP)
submitted by the OSC normally contains this information. (See
Superfund Removal Procedures, Revision #2, August 20, 1984.)
3. Timing for removal cost recovery when section 104(c)(1)(C)
waivers are used
The language of section 104(c)(1)(C) allows a waiver to be
granted to the statutory removal time and cost limits (i.e., 12
months and $2 million, respectively) if "continued response action
is otherwise appropriate and consistent with the remedial action
to be taken."
In calculating when to bring an initial cost recovery action
for a removal site in which this waiver was granted, the granting
of the waiver is deemed to occur only when the Regional
Administrator, or some other duly delegated representative of the
President, has signed a written determination to grant this waiver.
A statute of limitations that is different than the ordinary
three year time limit on initial cost recovery for removal actions,
applies to any removal site in which a section 104(c)(1)(C) waiver
has been granted. Section 113(g)(2)(A) allows a removal cost
recovery action to be commenced within a six year statute of
limitations when such a waiver has been granted. The six year
period begins on the day that the written determination to grant
the waiver is signed by the duly delegated representative of the
President.
A section 104(c)(1)(C) waiver determination must be made within
12 months of the date when the Action Memo initiating the action
is signed. If there is no section 104(c)(1)(C) waiver aetermina~i.cn
within the 12 months after one removal action commences, and
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subsequent removal actions are done after the 12 month limit, an
initial cost recovery action must be brought for the first removal
action within three years after pnysical on-site work toward
completing the first removal action ended
4. "Initiation" of remedial action
Section 113(g)(2)(B) requires that initial cost recovery actions
for-remedial actions be commenced within six years of the initiation
of physical on-site construction of the remedial action. 4 This
means that the beginning of physical cCtivities involving on-site
construction of the remedy selected in the ROD Starts' the six
year statute of limitations clock. However,
because the evidence of when physical onsite activity actually
begins is sometimes tenuous, a more conservative approach may be
used in which the calculation of the statute of limitations is
begun on the date that the construction contract is signed.
A word of caution is in order. The term, "remedial action,"
does not include remedial design. Thus, "initiation of physical
on-site construction of the remedial action," is the date that
marks the beginning of the on-site physical activity which
implements the selected remedy after design has been completed.
5. RI/FS cost recovery -- removal or remedial time limits
A remedial investigation and feasibility study
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more preferable than filing for RI/FS cost recovery during
negotiations just to file within the statute of limitations.
6. Section 113(g) cost recovery time'limits do not apply to recovery
of pre-SARA costs
We are advised by the Department of Justice (DOJ) that the
most likely statute of limitations on recovery of pre-SARA response
costs is a six year statute of limitations accruing on the date
of completion all response actions at a site.1
There are strong arguments that the CERCLA section 113(g) statute
of limitations was intended by Congress to appi/ prospectively
only because to apply the statute retroactively would cut-off the
United States' right to bring many cost recovery actions. This
would create an inequitable result — one which could limit
achievement of the purposes of the statutory scheme, courts are
unlikely to find that Congress intended such a result.
7. Different time limits for filing removal cost recovery actions
Section 113(g)(2)(B) allows a alternate statute of limitations
from the ordinary three year limit for filing removal cost recovery
actions. If 3 remedial action is initiated within three years
after a removal is completed, the Agency may defer bringing a
cost recovery action for that removal (even if it is an RI/FS)
and coordinate it with a cost recovery action for a subsequent
remedial action.
In other words, if onsite physical construction activities are
begun within three years of the completion of a previous removal
action at the same site, the costs of that previous removal action
can be recovered in the same action as the remedial cost/recovery,
and within the same time limits — six years after initiation of
physical on-site construction.
a. Entry of Declaratory Judgment regarding liability in an initial
cost recovery action; different statute of limitations for
subsequent cost recovery actions
Section 113(g)(2) states that when an initial cost recovery
action is brought, "the court shall enter a declaratory judgment
on liability for response costs or damages that will be bindinc
on any subsequent action or actions to recover further response
costs or damages." Once liability has been determined, subsequent,
cost recovery actions "for further response costs ... may be
maintained at any time daring the-response action,i but must be
commenced no later than three years after the date of completion
of all response action."
1 See DOJ Memorandum enti-tled, "PAS Complaint," October 2i,
1986, from Joyce A. Rechtschaffen and Anna \s'oigast.
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4-3-' U w*
-6-
The Agency notes that the words, "maintained" and "commenced,"
while not synonymous, are nonetheless overlapping; the word,
"maintained" is broader than the word, "commenced." An action
must be commenced (or filed) to be maintained, but once filed,
the action*s maintenance (or duration) will depend upon the case.
For instance, because of court docket pressures, a judge may not
want to allow a commenced action to be maintained for a long period
of time without progress towards resolution.
Using the above construction of "maintained" and "corimenced,"
the paragraph allows the Agency to commence an initial CERCLA
Section 107 cost recovery action within the three or six year
time limits for removal and remedial responses delineated in section
113(g)(2) paragraphs (A) and (B). When an initial cost recovery
action is filed within the appropriate statute of limitations,
the court shall decide liability for that action and for any future
(i.e., un-filed) cost recovery actions against the same responsible
party for the same site. Subsequently, any and all cost recovery
actions brought against the same responsible party for the same
site will be bound by the declaratory judgment regarding liability.
These subsequent cost recovery actions must be filed within a
different statute of limitations; for cost recovery actions filed
subsecuent to a declaratory judgment regarding liability, the
statute of limitations is three years after the date of completion
of all response action.
One alternative to the above interpretation of the CERCLA
Section 113(g)(2) declaratory judgment language would permit the
Agency to file an initial law suit within the appropriate statute
of limitations, and then wait a number of years and make demands
for future costs within three years of the completion of all
response actions. The Agency has rejected this interpretation
for two reasons: 1) such an interpretation would not be accepted
by many courts because, unless the case is stayed, it would entail
keeping a case on a court's docket for possibly many years until
all costs become known, and 2) such an interpretation is
contradictory to EPA's policy of treating each operable unit as
having a separate statute of limitations. See the discussion of
issue 9, below.
9. Each operable unit should have its own time limit
Each operable unit is a separate remedial action with a.separate
Record of Decision (ROD). Merely because a number of operable
units may constitute the final remedy at a particular site does
not mean that each operable unit is not a separate!remedial action.
Each operable unit ROD has a well defined scope of activity, and
each ROD has a date certain when onsite physical activity begins
and ends. Therefore, each operable unit should have its own
remedial action time limit — six years after the initiation of
onsite physical activity for an initial cost recovery, and after
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DLiAT i
a declaratory judgment the time limit changes to a three year
period after the completion of a remedial action operable unit.
10. Completion of remedial action — varies with the type of remedy
constructed
Because subsequent cost recovery actions may be hrought within
three years of the completion of all response action, it is
necess-ary to identify an endpoint for remedial action (as mentioned
above, for removals the endpoint is the date that the clean-up
contractor demobilizes at the site).
For remedial actions, neither the five year periodic review
required by CERCLA section 121(b) for sites at which hazardous
wastes remain, nor the operations and maintenance periods should
be considered a part of the response actions for calculating the
statute of limitations. Instead, the completion of remedial action
generally depends upon the type of remedial action.
Type of Remedial Action Date of Completion
landfill/s.i. construction
1 yr after construction
complete and contractor
demobilizes (includes 1 yr.
shakedown)
gw pump Sr treat for
aauifer restoration
10 yrs after constructio,n
complete and contractor
demobilizes, or until
cleanup targets are met;
whichever comes first
cw pump & treat for
plume containment or
drinking water supply
treatment remedies (thermal,
biological, other)
1 yr. after construction
complete and contractor
demobilizes
date treatment completed,
site stabilized, and
contractor demobilizes
(certified by RPM or OSC)
11. Adding new defendants after the statute of limitations has
ran
Joinder of new parties after the statute of limitations has
run is permitted by federal courts if the amendment to the complaint
(changing or adding a party against whom a claim is asserted)
relates back to,the date of the original pleading. In order for
an amendment adding another party as a defendant to relate back
to the date of the original filing of the complaint so as to remove
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DRAFT
a statute of limitations bar, the party to be added must meet all
three requirements of Rule 15(c) of the Federal Rules of Civil
Procedure.2 The three requirements t-hat must be met by the party
to be added are as follows:
1) the claim asserted in the amended pleading
arose out of the conduct, transaction, or
occurrence set forth or attempted to be set forth
in the original pleading;
2) the party to be brought in by amendment has
received such notice of the institution- of tJ\e
action that he or she will not be prejudiced in
maintaining a defense on the merits; and
3) the party knew, or should have known that, but
for a mistake concerning the identity of the
proper party, the action would have been brought
against him. or her.
Use of this exception may be possible in CERCLA Section 107
cost recovery actions where PRPs who are not named as defendants
have nonetheless received notice or demand letters before the
statute of limitations has run. A word of caution is in order.
The decision on whether to permit the addition of a new party
defendant to relate back to the fixing of the original complaint
involves a factual determination and a complete factual record is
required on the issues of the party's notice of the institution
of the action and the manner, if any, which it was prejudiced by
not being named in the original complaint. Furthermore,, if the
amended complaint alleges claims for damages that, although arising
out of the same occurrence as the original claims, was not asserted
by the original plaintiff in the original complaint, the new party
can not be added after the statute of .limitations has run.3
EPA policy on when to file cost recovery actions
This guidance notwithstanding, it remains the Agency policy to
begin cost recovery activity within one year after completion of
the removal. For remedial actions, Agency policy requires that
cost recovery activity.be initiated within 18 months of the signing
of the ROD, or during £he later phase of construction of the
remedial action, if the construction is expected to take more
that two years after the ROD is signed. Adherence to these time
frames will ensure that current, not stale, evidence and
2 See Johnson v. Bechtel Associates Professional Corp.. 717
F.2d 574 , (D.C. Cir. , 1983)
3 See Leachman v. Beech Aircraft Corp. . 694 F.2d 1301 (D.C.
Cir. . 1982)
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DRAFT
knowledgeable witnesses win be available to support the prosecution
of the action and that the Agency will not be faced with statute
of limitations risks.
CAVEftT
This guidance document has suggested conservative legal
interpretations of the new statute of limitations language in
order to avoid even the possibility of a timing problem in
prospective cost recovery filings. Nevertheless, this guidance
is not intended to limit the arguments that may be made to support
actions that already suffer from cost recovery timing problems.
For instance, this guidance suggests that the safest legal
interpretation of when a removal action is complete is the point
in time that the cleanup contractor demobilizes at the site. If
this safe interpretation will cause a specific case with
questionable cost recovery timing to appear to be outside of the
CERCLA statute of limitations, there is no reason why a more liberal
interpretation cannot be argued in court. In the example above,
for instance, it may be critical to winning cost recovery to argue
that the removal was not complete until the OSC submitted the
Pollution Report. In no event should cases already encountering
timing problems be limited by the conservative interpretations in
this prospective guidance document.
DISCLAIMER
The policies and procedures established in this document are
intended solely for the guidance of Government personnel. They
are not intended and can not be relied upon to create any rights,
substantive or procedural, enforceable by any party in litigation
with the United States. The Agency reserves the right to act at
variance with these policies and procedures and to change them at
any time without public notice.
cc: Directors, Waste Management Division,
Regions I, IV, V, VII, VIII
Directors, Hazardous Waste Management Division,
Regions III, VI
Director, Emergency and Remedial Response Division, Regien
II
Director, Toxic and Waste Management Division, Region IX
Director, Hazardous Waste Division, Region X
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Regional Counsel Branch Chiefs, Regions¦ I-X
David Buente, Chief, Environmental Enforcement Section,
Department of Justice
Gene Lucero, Director, Office of Waste Programs
Enforcement
Dr. Win Porter, Assistant Administrator, Office of Solid
Waste and Emergency Response
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ircptncQfol of Juiticr
tv.
Sol
*'«AD C. J03SO
October 17, 1966
Welter Muf.dan
Deputy Regional Counsel
Region II
Environmental Protection Agency
26 Federal Plaza
New York, NY 10278
Dear Walter,
Subsequent to our conversation severe! weeks ago, we
looked again at the statute of limitations issues that Day
arise under current law and the proposed reauthorized statute.
While we do net believe it is likely that the Agency's action
(or part of the action) will be time-barred if we delay
filing, we have prepared the attached memorandum to advise
you of the potential risks.
In light of the issues raised in the memorandum, we
recommend that the litigation team obtain an agreement from
the de£emlants that th^yr-ui^lnot interpose any defense based
on they statute of limitations"^ any similar defense concerning
timelinVs^TL'.g. la.uhea) and-rffat they agree that the limitations
period for all claims of the United States does not run until
at least 1992. Absent this agreement, we advise either 1)
file promptly or 2) a decision by the Agency to delay filing
based on the settlement prospects, despite the litigation
risks.
At the present time, we do not have a hold letter.
As we discussed several weeks ago, 1 am not in a position to
delay filing a complaint without this letter. Please advise
me how the Agency plans to proceed.
Sincerely,
F. Henry Habicht II
Assistant Attorney General
Land and Natural Resources Division
By:
Kevin Gaynor
Assistant Chief
Environmental Enforceaenc
Sec t ion
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Memorandum
DTB:JR:plh
90-11-2-2
Sub/ccf
Otic
PAS Complaint
October 21, 1 986
ho«i
Walter Mugdan
Deputy Regional Counsel
U.S. Environmental Protection
Agency, Region II
Eric Schaaf
Office of Regional Counsel
U.S. Environmental Protection
Agency, Region II
Andrea Pearl
Office of Enforcement and
Compliance Monitoring
Headquarters, U.S. Environmental
Protection Agency
Joyce A. Rechtschaffen Q &D
Anna Wolgast V *
Attorneys
Environmental Enforcement
Section
Land and Natural Resources
Division
U.S. Department of Justice
INTRODUCTION
Subsequent to our recent discussion regarding the PAS
complaint, 'we have taken a closer look at the statute of limita-
tions issues, both under the current law and the proposed re-
authorized statute. The purpose of this memorandum is to advise
you of the litigation risks which may arise if we do not file the
complaint by December 1986.
RECOMMENDATION
Based on our analysis of current case law and the
proposed reauthorized statute, we believe that the most likely
statute of limitations is a six year period accruing at the
completion of cleanup. At the PaS site, the statute would not
run until at least 1992 since cleanup i6 not yet completed.
You should be aware, however, that there is signifi-
cant concern that a court say apply a statute of limitations
which would run on December 11, 1986. Consequently, we rec-
commend that if a decision is made not to file the case before
December 1986 because of settlement progress, the litigation
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team obtain an agreement from all potential defendant* to toll
the statute of limitations for the period of settlement
discussIons. */
DISCUSSION
A. Facts
In brief, the following, response actions have b,een taken
at the PAS site:
1. In 197b, the Coast Guard under tts Clean Water Act
authority, undertook response actions Including the construction
of lagoon to receive runoff from the site.
2. In 1977, EPA constructed an additional lagoon co
receive surface runoff from the site and constructed a dike to
prevent lagoon overtopping.
3. In 1977, EPA undertook the removal and disposal of
materials from lagoons and a pit on the site. Additionally, in
1977, EPA took response actions involving closing, capping and/or
grading all lagoons on the site, the installation of a leachate
filter system, drainage and disposal of contents of fuel storage
tanks and the overpacking of deteriorating drums.
4. In 1978, EPA in conjunction with the State of New
York, removed 4,000 drums from the site. Additional drun! removal
occurred during 1978-1982.
5. In 1982, EPA entered into a cooperative agreement
with the State of New York. In accordance with that agreement,
the State undertook a RI/FS at the site which was completed in
January 1984.. In June 1984, a record of decision was finalized
that recommended the following on-site remedial activities:
limited excavation and removal of contaminated soil, tanks, and
drums to a landfill approved under RCRA, construction of a perimeter
slurry wall, site grading followed by installation of an impermeable
cap and groundwater recovery and treatment. To date, all remedial
activity described above has been completed with the exception of
a groundwater recovery and treatment system.
B. Legal Analysis
1 . Current Law
The United States has argued that no statute of limita-
tions applies under CERCLA.- Three district courts have adopted
this position. See, United States v. Mottolo,, 605 F. Supp. 898 ,
909 (D.N.H. 1985TT"United States v. Dickerson, No. .Y-85-3249,
slip op. at 11, 12 (D. Md. May 28, 1986); United States v. Hiasi
Drum Services, Inc.. No. 85-0038 (S.D. Fla*,.July 17, 1985).
V This agreement may be difficult to obtain because of the lar.se
number of generators involved. We cusc decer-.ine if we would
need the agreemenc of ail generators or only chose companies we
have determined to name as defendants.
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Alternatively, the United States has argued that the
applicable statute of llmitatlona la the tlx year period appli-
cable to aulta brought by the United "Statec for restitution
established under 28 U.S.C. f 2415(a). Section 2415(a) provides
chat actions brought by the United States founded on contracts
Implied In law, e.g.. restitution, are barred unless brought
within six yeara of the accrual of cause of action. •'See. United
Stares.v. Miami Drum, supra (as an alternative basis for Its
decision, the court held that the 6ix-year statute provided by 28
U.S.C. S 24.15(a) governs cost recovery actions); see United
States v. P/B STCO 213. On 527/979. 756 F.2d 364 ^Tth Clr. 1985)
(six year contract limitations governs actions brought by the
United States under the Federal Water Pollution Control Act).
It should be noted, however, that two courts have In-
dicated that the period 6tatute of limitations found in CERCLA
S 112 (d) applies by analogy to CERCLA $ 107 cases. See Mola
Development Corp. v. United States, No. 820819-RUT, slip op. at
2-3 (C.D. Cal. April 25 , 198.6) (the court held that the three year
statute of limitations in CERCLA S 112 (d) should be applied
by analogy to Section 107 actions. However, Mola was not an action
by the United States or State acting in its sovereign capacity);
see also. Colorado v. ASARCP. 616 F. Supp. 822, 825 (D. Col. 19€5)
(agreeing, in .dicta, with Mola).
Under either a three or six-year statute of limitations,
an additional issue is when Che statute of limitations begins to
run. It is the United States* position that the date from which
any applicable statute of limitations runs is the date of com-
pletion of the response action at the site. See United States v.
Miami Drum, slip op. at 2; see also .Caldwell v. Curley Refining
Co.. 755 F.2d 645, 651 (8th Ci,r. 1985) ("ttjhe government's cause
of action accrues on completion of the oil removal action");
United States v. Barge Shamrock, 635 F.2d 1108 (4th Clr. 1980),
cert, denied, 454 U.S.,830 (1981)(government's cause of action
for costs expended in removing oil spills under the Federal
Water Pollution Control Act accrued on date oil removal was
complete); United States v. C&R Trucking Co.-, 537 F. Supp. 1080
(N.D. VJ. Va. 1982) (government's cause of action to recover removal
costs under Section 311(f)(2) of the Clean Water Act accrued on
date oil removal was completed).
Defendants in Superfund cases have raised different
arguments regarding both the applicable period of limitations and
when the statute of limitations accrues. First, defendants have
contended that a three year statute applies. Second, defendants
have contended the statute of limitations runs from the time the
United States begins to spend money at the site, from the date
that defendants ceased shipping hazardous substances to the site
and a variety of other time periods. The'most viable theories
for this case are: (1) the statute of limitations would run fro=
the date that the United States first incurred response costs at
the site or (2) each particular response action at the site
shouLd have a separate statute of limitations (i * e.. . the accions
taken in 1977 would be governed by a separate statute of limi-
tations than the ongoing accions). The defendants might argue
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- 4 -
that the response actions between the period 1976 and 1978 con-
stitute discrete actions which were completed In 1976 - 1978.
Assuming a six year statute of limitations, under defendants1
theory, the statute of limitations for actions undertaken prior
to 1980 would run in December 1986 (six years after the enactment
of CEKCLA). •/
' - It is our conclusion that the most likely result under
applicable legal principles is that a six year statute o£l limi-
tations applies which accrues on the date of completion of all
response actions (a date which ha6 not yet occurred)/ The courts
have not adopted the positions advanced by defendants and we do
not believe it is likely that defendants will prevail here.
Nevertheless, you should be aware of the possibility that one or
more of defendants' arguments will succeed.
2. Reauthorization
The statute of limitations section in the reauthorized
bill provides as follows:
a. For a removal action, an initial action for recovery
of costs under Section 107 oust be commenced within three
years after completion of the removal.action, except thac
this period is-extended fro oix ycarj^if the Administrator
had made a determination that further response action is
consistent with che&rereedial action to be undertaken (the
action then must^be brought within six years of the
determinatioji)-.'
,b. For remedial actions, an initial action for cost
recovery must be commenced within six years after initiation
of physical on-site construction of the remedial action.
c. If remedial action is initiated within three years
after the completion of the removal action, costs incurred
in the removal action may be recovered in the remedial
action cost recovery action.
d. Subsequent action or actions for further response cos.is
under Section 107 may be maintained at any time during the
response action, but must be commenced no later than three
years after Che date of completion of all response actionsv
The statute of limitations set forth in reauthorization is.
subject to at least several interpretations.
*/ The statute of limitations cannot begin to run until enaccaenc
of CERCLA since no cause of action existed prior to that dace.
**/ Neither the conference commi. ctee nor House and Senate reports
provide guidance on this issue.
0 ,eit * r t
i.^v® * ,
t
fj /
r-">- j
Vfi
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a. Prospective Application Co Cleanups Commenced after
Enactment
We believe the best interpretation Is that the amendment
applies only to future cleanup actions. I.e.. removal or remedial
actions commenced after the. date of enactment. V Under this
Interpretation, the amendment has no application to t*he PAS site
becaus.e response action has been commenced prior to reauthorization.
Consequently, legal principles under current case law would apply
(i.e.. the court probably will apply a nix year statute commencing
at the completion of response actions).
V All provisions of the reauthorized statute are effective im-
~ mediately, with the exception of the cleanup standards.
We believe, however, there are strong arguments that the statute
of limitations will be effective prospectively only. Ue would
argue that Congress did not intend to require the United States to
bring cost recovery actions by December 1986 (two months after
enactment) in all those cases where on-site construction of remedial
work commenced pre-CERCLA. In shore, to apply the statute retro-
actively would cut-off the United States' right to bring many cost
recovery actions. See. Chevron Oil Co. v. Huson. 404 U.S. 97 (1971).
(In determining whether a statute of limitations will be applied
retroactively, the courts should weigh three factors: 1) whether
a new principle of law is established by overruling clear past
precedent on which the litigants may have relied; 2) whether
retrospective operation will further or retard the purposes of the
statutory scheme; and 3) whether retroactive application would
produce inequitable results); James v. Home Const. Co. of Mobile,
621 F.2d 727 (5th Cir. 1980) (whether a statute of limitations will
be applied prospectively or retroactively depends on Congress*
intent in passing the legislation. In enacting amendments to the
Truth-in-Lending Act (a broad remedial statute), including statute of
limitations amendments. Congress did not intend to limit substantive
rights under the Act); Kotval v. Crldle. 698 F.2d 344, 347, n.s
<8th Cir.1983) (retroactive application of a statute of limitations
is constitutional so long as the plaintiff is not suddenly cut-off
from bringing an action, but is given a reasonable opportunity
after the effective date of the statute to bring suit before his
claim Is absolutely barred by the new enactment); Acfcord, Fust v.
Arnar-Stone Laboratories. 736 F.2d 1098. (5th Cir. 1984)
-------
However, even If the amendment does not apply, a court
night look to Congress* intent in the new bill as guidance for
determining the applicable statute of limitations. Because of
Che absence of clear authority, the court ralghc view the provisions
of the new bill as particularly persuasive. Thus, a court might
conclude that a cost recovery action must be commented within si*
years of Initiation of on-site construction, potentially December
1986 (see discussion below).
b. Retroactive Application
Another interpretation might be that the amendment applies
retroactively to all remedial and removal actions, i.e... ail cost
recovery actions must be commenced within six years after initiation
of on-site const rue tiorj^of^ the remedial action or within three years
after completion of a rcmecnal action. In Lit* event initiation of
on-site construction occurred prior to 1980, we would have to
commence the action by December 11, 1986, a date six years after
the passage of CERCLA.
This interpretation poses difficult problems for ongoing
enforcement actions because, in many cases, the Agency assumed a six-
year statute of limitations commencing at the completion of cleanup.
For example, the Agency may not yet have referred a co6t recovery
case where interim remedial construction occurred in 1981 but final
cleanup is not completed.
Applied to the PAS site, retroactive application could
lead to several results.
i. The response actions commenced in 1976-78 and con-
tinuing until 1982 (capping, closing and grading lagoons, instal-
lation of a leachate filter system) might be viewed as initiation
of on-site construction of remedial action. The cost recovery
action, therefore, z~zz be commenced by December 1986.
ii. The response actions prior to 1982 may be. categorized
as removal actions. */ CERCLA and the new NCP provides a broad
definition of removal actions (see .40 C.F.R. S 300.65) and some.of
the actions at the PAS fit within the examples set forth in the NCP
(e.g., capping of contaminated soils, soli removal, drum removal).
Remedial action at the site would be defined as those activities
commenced after the Record of Decision. Initiation «f physical
on-site construction of the remedy, therefore, commenced in 1984.
Under this scenario, with respect to the remedial action,
we would have until 1990 (six years after initiation of construction)
to commence our action. Additionally, we would argue that we should
be able to recover our costs of the removal action as part of the
remedial action cost recovery, under the provision allowing costs
* i Because these activities were commenced pre-CIP.CLA, they were
~~ noc clearly classified as reooval or remedial actions.
-------
Incurred in a removal action Co be recovered In che remedial action
coat recovery If che remedial action la commenced three years after
completion of the removal. Here, we would contend chat removal
actions were not completed until 1982 and remedial action commenced
In 1982 (che atart of the RI/FS).
CONCLUSION
Wc believe chat the 6tatute of limitations will not be
a bar to recovery of cogcg Incurred at the PAS aite if wc file
within six years from completion of response actions.
Nevertheless, we believe chere is some possibility, as outlined
above, chat a court might rule that the scatute of limitations runs
on ,December 11, 1986. **/
Attachment
**/ Attached for your information is an excerpt from an EPA
— Inspector General's Report discussing the statute of
limitations issue.
-------
„ ¦«...«/ tot upholding Ate principle of • brwd-b*»*d ux. despite kuing on the w«jte-«nd Ux.
Ho»r«r«, at preu tla>< U wai unclear whether the Senate would accept (he Home plan — with (he
wutc-end tix a particular!/ ideiy iuue. Oil companies In particular feu that • waste-end Us would
roult (a dliproportlonate Lmpactj on their high-volume, kjw-toildty wastewater*. Others worry thai It
w(U Intmfcrt with the working of the RaoureeConservaiioo A Recovery Act and promote U!e|al dump-
lot- While at SX&miUion the waste-end tax has been reduced frocn ordinal House numbers to "flea
tlu," for many pro and con It hu become an Issue of principle. However, »everal sources |ue>sed that
the fundi could simply be snitched frcm the general revenues pot. or even the broad-based tax fa the
event that a waste-end tax were disavowed. Another Issue unresolved ii whether the food-producing In-
dustry will receive an exemption from the broad-based tax. In fact. i?me Hill aides have speculated that
the food Industry supporters ~ reportedly including Reps. Charles Rangel (D-KY) and Howrfrd Wolpe
(D MI. whose district includes the cereal producer Kelloggs) — might be coerced into iigning off on a
waste-end uu in exchange for an exemption, despite the waste-end tax's impact on the food industry.
tn EPA Inspector General itudy
EPA'S LOW SUPERFUND COST RECOVERY RECORO THREATENS FUTURE PROGRAM
EPA has recovered from polluting parlies only I.I cent out of every dollar spent from the Superfund
trust fund — an enforcement trend which if continued could dangerously impede the agency's ability to
clean up the nation's hazardous waste sites, according to a new study by the EPA Office of the Inspector
General. The review by the agency's.internal oversight arm covers the eipenditures of EPA's enforcement
program from Superfund's inception in 1980 through Sept. 30. 1985. The 1G report finds that only
Sl4-million of the Si.3-billion in trust fund monies expended hu been reimbursed from 84 negotiated ef-
forts with those responsible for pollution at the sites.
This is only a cost recovery ratio of 1.1%, says the IG, not including monies derived from EPA "ef-
forts in negotiating cleanup actions to beperformed by responsible parties" or "cash outs" by responsi-
ble parties not technically capable of performing cleanup. EPA's IG blames the poor recovery rate on
lack of "aggressive cost recovery actions" and various other problems "outside of EPA's control" which
-{nay require coua or congressional resolution.
IG found EPA was particularly lax la trying to recover monies from rtlatUely small Super fund
cleanup expenditures — some 182 completed removal actions which individually cost leu than 5200.000,
but toul.more than S6.1-million. Extending these figures over 20 years, IG calculated that EPA could
potentially lose more than S60-million from failure to pursue reimbursemeni at these small cost recovery
sites. IG notes, however, that EPA attributes this failing to "resource constraints, and the fact that the
expenditures required'to recover costs may approach the costs of the cleanup itself."
An issue IG states is "somewhat outside" EPA control involves potentially responsible parties-
(PRPs) filing, for bankruptcy — but which is compounded when EPA fails to take "aggressive and timely
action in filing for cost recovery." The latter, the report argues, is "especially important" as EPA
forgoes its right as a creditor and the courts "have been leaning towards giving [gjovernment units first
priority after secured creditors." As of last September, reporu IG, EPA recovered only S27,|65 of more
than $65-rrulIion in bankruptcy claims.
To speed negotiations — which despite EPA's 60-day cutoff policy were found to last an average of
2?9 days IG recommended EPA require regional offices to maintain an information system which
tracks milestone dates, with EPA informing responsible parties of the negotiation deadlines. "Thus, if a
reasonable settlement did not appear feasible, negotiations can be broken off and cost recovery pursued
through civil anion after EPA cleans up the site." The review found that in 15 cases whert site negotia-
tions lasted longer 60 days — with cleanup costs adding up to S3.6-milLon — the negotiations were
cut off without a settlement or cost recovery agreement reached with PRPs.
Confusion ovct whether a statute of limitations applies to Superfund cases presents another potential
risk for EPA — until the matter is resolved by Congress or the courts. IG identified 65 completed
removal actions, totalling nearly J3-million, which may violate tort laws if not filed by the end of this
year.
The report strongly ur?— EPA to upgrade Its preseot Information system for managing the Super-
fund enforcement program by consolidating data from several systems, and by including statute of limita-
tion and negotiation milestone dates which are not now being collected. Stepping up entorcemeni anion
will become "increajingly more important" in future cleanup projerts as EPA prcdic:s about half of
4,000 of the worst haia/dous waste sites will be cleared up or financed by responsible panics over the
neit 30 years, the report notes, with costs estimated to total up io S80-billion.
-------
Attachment F
-------
12/31/1992 11:12 S019821177
buiydiiii??
VW BARR
PAGE 01
VINCI W. BARR. Ill
SERTIFICO PUBLIC ACCOUNTANT
P.O. BOX 10825, JACKSON. MIS8I8IPPI 30234-092*
•01 • 842*1177
FACSIMILE TRANSMITTAL SHEET
DATE
FAX NUMBER: 31/1" 78/7 TIME:
No* of Pages to follow this page S
from: /jJttlias*- Tfiw SarfiptfCi
FAX HUMBER; //77
MESSAGE:
If you do not receive all pages, please call us at 982-1177 as soon as possible.
-------
12/31/1992 11:12 6019821177
VW BARR
PAGE 02
V1NCE W. BARN, 111
ITIFIEO PUBLIC ACCOUNTANT
P.O. BOX 16025. JACKSON. MI8SI8IPPI 39230482$
601 • 882-1177
December 31. 1992
Ms. Mary B. Hutson
Enforcement Project Manager
U.S. Environmental Protection Agency
Cost Recovery Section
345 Court!and Street, NE
Atlanta, Georgia 30365
Dear Ms. Hutson:
Mr. W. T. Burford (SSN 438-18-3534) has requested that we furnish you with
copies of his 1939. 1990, and ,1991 individual Federal income tax returns. We
have enclosed copies of his 1989 and 1990 tax returns. Mr. Burford is a
75 year old retired person. He was not required to file a 1991 income tax
return because of insufficient income.
If you need any additional information, please let me know.
Sincerely
Vince W. Barr, III
Enclosures
-------
12/31/1992 11:12 6019821177
VW BARR
PAGE 03
1040
Department S( th« Tramuiy—InUmal Rtvonoo 8*&.
Apt.no.
Cty. town or pact offict, ttt*andBPeod*.(n*te*<(ntddmt,Mopa|r7.)
hr>A&tZ**J. mi. 39*/o
~ Do you want $1 to go to this fund?
If lolnt rttum. doti your ipouse w»nt $1 to go to th!» fund?
Filing Status
Chtcfconly
on* box.
1
t
S
4
IS.
YowwcWMcafttjr
fir ¦¦ /» i
tsin
lyMNtof
!
For Privacy Act M4
PoporwoffclUtfuctlon
Act Notlca, mo
(Mtructtom.
No
No
NOMfOMCttV'TtC'lHI
nal&my/i pot* Oucr
mtuctrturiafund.
MiitM flVnt Joint rotum (tvwi If only on* hid Inoorw)
MarrMlffln| ttparit* rotxrn. Eattr ipeuM'i toclil nevrtty to. wid Ml mom lure.-
Hoad of houaahoM (wtth'quallfylng panon). (Saa pap 7 of Inttructlons.) M Uw qualifying panon b your child but not
your dapandant, antar cMM'i nam hart.,
Quallfylni widowrtr) with dapondant child bitar iooum dtod ~ 19 )¦ f8aa Ma* 7 of Inttnjctfcxn.)
ExtmpttoRt
(Sm
Inttructtoni
on pap 8.)
If mora than 6
dap«ndantt.*oa
InitnjetJonton
pas* a.
Ineomt
PUaia attach
CopyBofyour
Form* W-2. WM,
and W-2Phar*.
®» 6^ Youraalt Waomaone(»ueha»yourpr»nt)eanclilmyoua*adipandarttonhl»orhaTtax
raturn, do not chock box 6a. But ba •ur*tochackthab«onlna33bonpap2.
> ~
c Dapandofite
*r
(fllfWttrol*,
•cWMnrtt}
(DWitaily
(Dmc
Mtftamri
him
55*
,w ate
•• /
k
• MiMih
tfc
wnpiN
Wl -
¦ale
d If your child didnl Uvt ftttli you but li dalmad n jrar dtpondwti undar a pr»-1988 igraamint. cftadi hart
a Total numby of aumptloitfclalmod.
ES
idonot haw
?, aaa
6 of
ruction*.
1 Wf»,u\«i*,tif»,«c.(&ttachFormWW*) ........
la ftxtbk Mami Incur* (also attach SchadukB If ovarUOO) . . .
fc Ta>-aunp*(tt$o attach Schadula B If o*ar$4GQ)
0
1
Mifin 1 I
cas ~Ld
h
Pl0«M
•ttoch chock
ormonoy
ordorharv.
Taubla rafundi of itita and local Incoma tent, If any, from wortohaat on pap 11 of Induction*.
Alimony racatvod
Buslnoaa Ineoma or (laai) (attach Schaduta C)
Capital pin or Qcm) (attach SchaOulaD)
Capital pin distribution* not rtportod on Una 19 (we pap 11)
Otiwga\m or Qoam) (attach form 4797) ,
•a Total IRA flWrttutlort* . . | I I p«p ii)
7t TOtll pamJOftttfldannuItt** I *7* I T lThTmhU.maiintrMap.p1fr
S Rants, reyaWaa, partnariMpa, aetata*, tniata, ate. (attach Schaduk t)
9 Farmlncom#or(l0MK#ff9CftSeMMP?.
tO Unamptoyiwtcomp«naatlen(lniurBnc«)(»Mpapl3)
la SocialMcurttybanaftta. . I
4
B
6
7
a
M
Your IRA daduction, from appUcaMo wortwhaot on pap 14 or 13
Spoum'i IRA doductton, from appBcabl* vwlohoal on pap if or 15
Salf-amptoytd haaSti imuranca daduction. fiom wsiluhoat on pi(* 15
Kacgti ratlramant plan and aatf-«mploy«d SEP daduction . .
PanaltyonNrfywtthdnwalofiffrfnp
Alimony paid, a Raclptort'i last
andbaociaiaacurttynumbar. . . • !
JS71
»M0 24 throygt 2y.-THwa «* wur total adlwtmawta
Subtract Una 30 from lino 23. Thl* l« your adjultad |TOM I
Adjustrt
Gfoti Incomo
suMnct una 30 from lino 23. Tht* i« your MJutttd tro«« NKvma. H thl* Una it Ian than
119.340 and a child Ihfd with you. w "Earnad Interna Cndlt" (Una $8) on paga 20 at
ttw Int (ructions. H you wantlPS to flgvrw your tax. i 6 of th* Instruction* . . . .~
SI
-------
12/31/1992 11:12 6019B21177
VW BARR
PAGE 64
tamlOtO
Tai
S«R>H*
HtlM
jwgL
UcQ
}¦
SI Amount from Hrw 31 (wfjuatftlgrQea Income)
33* Check*. ®Yo«iwere65ers»def OstM;- ~ lpeuaewee65orolder« D Mnd.
Add the number of bow checked end enter the.total here . ....... > W»l
k Haomeone(wchasy«irperert)ceflcIatftiyoimadependeftteheckhere . . ~ HkO
e Kywtrt married Win® * topwte return and your tpouaa Nemim dedoeUona,
oryauareidutl-«talui*rfefi.SMpa|»]6efldcheclih«rt ~
14 Enter the r • Your etanderddeduettM (from page 17 of the Inatructlone), OR
tore*' < ~ YourKemteed4e38«nd 19.CnterthQtotal . . . • ¦ ¦ ¦ . . '¦
sjm.
We
*PfQ
o -
Credits
(Sat
^ an*
fnnrucwnt
on page 11.)
41
41
41
44
It
48
47
Credit for ehW and dependent care t*pe rises {attach Form 2441)
Credit for the eldeHy or the dlwHed (ttticti ScfcedUM ft) .
Foralgn tax credit ftttec/i Form JJJ6J .........
General business credit. Check It from:
• ~ Form 3900 or »~ Form (specify) .
Credit for prior yur minimum tax (attach Form8301) ....
Add llnae 41 through 4S. Enter the total.
41
42
41
44
JL
Subtract line 46 from line 40. Enter the remit aeevrltytnontlplncomenetreportedtBemptoyerf*R>chFerm4jJ7; ....
•2 Tax on an IRA or a auelrtled retirement ptin (tttact) Form 5339)
83 Add lines 47 throuah 52. Enter the tote! .... . . . ¦ .
84 Supplement*! Medicare premium (tttteh fprni &806)
PijmiBt3
Attech Forma
W-2.W2Q,
andTOTQU »
U AmnmitotttneSAtaha APMJIIITOYQtlRlMOtfTllHTIflTAl I it I 1
•7 H tine 58 Is larger than line 63. entor AMOUNT YOU OWL Attach check or money order for full
amount payable to "Interne! Revenue SetVlee." Write your eodai'seew%nuffl6er, deytime phone-
number, end "1989 Form 1040" on It . ... . . .
81 Penetty for underpayment pfeetlmetedlax (see ooae2iy. . . I g| | - |
Undar mruftfrf of ptrfury, I d*cW met I Im nirlned tnu ntum kMuIm and and to Hm beat of my ,
Mt*t. (har *r* triM, «an^ and e«rnpim. OadanUM sf pr»Mr*f (MMf than t«xp*y«r) tt bMd *1 IrHtannttlon oT vMefi prapra hat wv HvmMm
~
~
Vouralpeture fHt^AhtD BY
V1NCE W. BARR. Ill
YOu^i uWPf
J
Ou*
rar
Vflur oecupatlan
SpauM'iMtupatlon
mpartf*!
UaaOtlj
Prwpttri
i^irun
(MM
Flrm'inwn*(or
ywtjfsrtf-emploved)
ended# bsx
~
Cfwcklf
~
pra«*nr< iocw Mnr«r no.
CI. NO.
&P«ede
-------
n/dl/iaa* 11:12 6019821177
VWBARR
PAGE 05
SCHEDULE C
(Form 1040)
Oepertmt* of the Treasury
Mat net Revenue Stivtet
Profit or Loss From Business
(Sols Proprietorship)
Partnership!, Joint Ventum, Ctc., Must File Form 10C9.
~ Attach to Form 1040 er Form 1041- ~ See Instructions for Schedule C (Form 1040).
OUa No 1MM074
111)89
UlacSunent .
Sequence Ho. 09
KameefprgprlMtr
Uj*T. nSo/zFa-^o
•octal security BumW (SIN)
V** \/f i 3S*U
k Principal business or profession, Including product or service (sea Instructions)
0 Sal-* i
S Principal bualnett coda
(»rompa«e5)V|2|fc|Tl5l
C Business name and td
drew ^ .
0 tmployai 10 euwhev (Met W)
i 1 1 1
K Method(t) inert to (I) ~ Coat (2) Q lovrerofcost (I) ~ Other (attach (4)/0 Does not apply (if
value doting Inventory: or market eiplanatlon) checked, skip tine 0)
f Accounting method: (1) Of Cash (2)0 Accrual (S) D Other (specify) ~ .
ft Wat there any change In determining quantities, costs. or valuations between opening and dosing Inventory? (H "Ves," attach etplanatlon.)
H Art you deducting expenses (or business use of your home? (If "it*' see I nitr action* for limitation!.)
t Did you "materially participate* In the operation of this butineas during 19897 (If 'No.* aae Instructions for.Umltationt on losses.) ¦ . ¦
tee
J If this schedule includes a loss, credit, deduction, Income, or other tax benefit relating to a tax thenar requited to be registered, check Iter*.
H you checked this boi. you MUST attach Form §271
mm ineom*
/•Qt /T), if,
Gnu receipts or talet . .
Returns and allowance* . .
Subtract line 2 from line 1. Enter the mult here
Coat of goods mW and/or operation! (from line 39 on page 2)
Subtract One 4 from line 3 and enter the groie profit hare
Other Income, Including Federal end state gasoline or fuel tan credit or refund (tee Instructions)
Add lines 5 and 6. This ii your grass toccma
Exptniu
0
10
11
12
1)
Advertising
Bad debts from silai or services
(see Instructions)......
Carand truck expenses . . . .
Commlttlena
Depletion
10
11
12
13
14
19
IS
Depreciation and taction 179
deduction from Form 4992 (not
included In Part III)
14 Employee benefit programs (other
than on line 20)
15 freight (net Included In Part III) ,
IS Insurance (other than health) . .
17 Interest:
• Mortgage (paid to banks, etc.) .
ft Other
IS Legal and professional services .
IV Off Ice expense
20 Pension and profit-sharing plans .
II Rentprlease:
a Msehlntry end equipment .
b Other business property. . . . 21b
1Z1
17b
IS
22 Repairs
23 SuppHts(notindudedlnPartlll) .
24 Taxes
25 Travel, meals, and entertainment:
a Travel • •
b Meals and
entertainment
c Emtr20* of Una
29b subject to
limitations '
instructions) .
4 Subtract line 25c from line 25b
2S Utilities (see Instructions) . .
27 Wages (lets jobs credit) . . .
2S Otfier expenses (list type and emount):
f»r -
.3x&y.
t
wy...
2> Add emounta In columns for lines 8 through 28. These are your total expenaes
SO Net profH er (toss). Subtract line 29 from line 7. II a profit, enter here and on Form 1040, line 12, and on
| Schedule SE. Una 2. If a loss.you MUST flo on to line 31. f Fiduciaries. »ee Instructions)
¦rso*)
'if you have a loss, pou MUST check the box that describes your investment in this activity (tee Instructions).
If you checked 31a, enter the lots on Form 1040, line 12, end Schedule SE, line 2.
II youchecked 31b, you MUST sttachform SitS.
For Paperwork Seduction Act Notice, tea Form 1040 Instructions.
31a 3) All Investment Is at riik.
31bQ Sons ifi«
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12/31/1992 11:12 6019821177
VW BARR
PAGE 06
SCHEDULESE
(Form 1040)
OaiMitnwnl of th* Tnwury
Inttmil Amiim Stntct
Social Security Self-Employment Tax
~ See Instructions for Schedufe SC (Fowl 1040).
I* Attach to Form 1040.
OMI Ho. 1M-Q074
Hi89
mouwimMb.Ib
Name of person with seW-empteynmit Income (»»shown on tocUl wcuflty card)
LL-» A-*/\ 7&\J
Social tecurtty number of person
with MtfomployinMt Income *
V3J
Who Mutt File Schedule SE
You must file Schedule SE If:
• Your net earnings from self-employment were $400 or more (or you had wages of $100 or more from an electing church or
church-controlled organization); AND
• Your wages (subjectto social security or railroad retirement tax) were less than $48,000.
Eicaptlon. If your only self-employment income was from earnings as a minister, member of a religious order, or Christian
Science practitioner, AND you filed Form 4361 and received IRS approval not to be taxed on those earnings, DO
NOT file Schedule SE. instead/write "Exempt-Form 4361" on Form 1040, line 48.
For more information about Schedule SE, see the Instructions.
Note: Most people can use the short Schedule SE on this page. But, you may have to use the longer Schedule SE
that is on the back
Who MUST Um the Long Schedule SE (Section B)
You must use Section B if ANY of the following applies:
• You choose the "optional method" to figure your self employment tax (see Section B, Part II);
• You are a minister, member of a religious order, or Christian Science practitioner and you received IRS approval (from
Form 4361) not to be taxed on your earnings from these sources, but you owe self-employment tax on other earnings;
• You were an employee of a church or church-controlled organization that chose by law not to pay employer social security
taxes;
e You had tip income that is subject to social security tax, but you did not report those tips to your employer; OR
• You were a government employee with wages subject ONLY to the 1.45% Medicare part of the social security tax.
Section A—Short Schedule SE
(Read above to see H you mutt use the lorn Schedule SE on the back (Section B).)
1 Net (arm profit or (loss) from Schedule F (Form 1040), line 36, and farm partnerships, Schedule K-l
(Form 1065), Une 14a
2 Net profit or (loss) from Schedule C (Form 1040), line 30, and Schedule K-l (Form 1065), Une 14a
(otter than farming). Seethe Instructions for other income to reoort
3 Add lines 1 and 2. Enter the total. If the total is less than $400, do not file this schedule; you do not
owe self-employment tax ....... .~
4 The largest amount of combined wages and self-employment earnings subject to social security or
railroad retirement tax (tier 1) for 1989 Is
6 Total social security wages and Hps (from Form(s)W-2) end railroad retirement compensation (tier 1) . . .
e Subtract line 3 from line 4. Enter the result. If the result is zero or less, stop here; you do net owe
setfEmployment tax . . . ; >
7 EntertheameUerof line 3 or line 6
e Rate of tax
9 Self-employment tax. If Une 7 is $48,000, enter $6,249.60. Otherwise, multiply the amount on line 7
by the decimal amount on line 8 and enter the result. Also enter this amount on Form 1040, line 48
U.
>48.000
1^00 0
»¦
£S23_
00
X.130B
12b
lor Paperwork Reduction Act Notice, ~m« Farm 1040 Inst rue Hon.
SefieAflaSC (Fern 1040) IMS
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12/31/1992 11:12 6019821177
VW BARR
PAGE 07
Fom
1040A
W' r-tiw
w
1900 »¦=:<
stopl
UM
(0MP«pU.)
Uttta
Otknkii
plMM prist
ortypa.
i
i
TMrlMMMtadMUtl __ LtttMM
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-------
12/31/1992 11:12 6019821177
VW BARR
PAGE 00
1990
Form 1040A
Step 6
Figure your
17 Eater the amount from line 16.
17 z 13M
18« Check £0^You were 65 or older CJ Blind 1 Enter number of / I
if: TlH flpouae wu 66 or older 0 Blind I bom checked . ~ 18a
b If your parent (or someone else) can claim you as a dependent, _
check here • »18bP
o If you are married filing separately and your spouse files Form _
standard
deduction,
19
Enter your standard deduction. Sen pace 38 for the chart (or worksheet)
that applies to you. Be sure to entei your standard deduction here..
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_ o-
Step 7
Figure your
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credit*,
and
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Ifynuwant IRS
to figure your
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23 — O -
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Compute and attach Schedule 2.
_24a_
b Credit for the elderly or the disabled.
Complete and attach Schedule 3.
24b
e Add lines 24a and 24b. These are your total credita.
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28 Advance earned income credit payments from Form W-2. 26
27 Add lines 25 and 26. This is your total tax.
~ 27 — O -
28a Total Federal income tax withheld. (If any is
from Form(s) 1099, check here ~ D •)
28a
337
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29
If line 28d is more than tine 27, subtract line 27 from line 28d.
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29
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Amount of line 29 you want refunded to you.
30
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31
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32
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32
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33
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-------
12/31/1992 11:12 6019821177 VW BARR
PAGE 09
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-------
XYZ
-------
PAPERWORK TO ASSERT
DELIBERATIVE PROCESS PRIVILEGES
(see under ADMINISTRATIVE DISCOVERY)
-------
FOIA
(SEE UNDER ADMINISTRATIVE DISCOVERY)
-------
LIEN NOTICES (FEDERAL)
-------
. Cardinal
-------
ATTACHMENT 1
MODEL: PRE—PERFECTION l?OTICB
[REGIONAL LETTERHEAD]
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION [ ]
[ADDRESS]
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
[Date]
[Name and address of owner of property]
RE: [Name and location of the site]
Dear [Name of property owner]:
This letter informs you that the United States Environmental
Protection Agency ("EPA") intends to perfect a lien upon property
located at [street address], the exact legal description of which
is contained in Attachment 1 to this letter. The Property is
part of the [ ] Superfund Site. EPA has determined that you
are the owner of this property (the "Property"). The lien which
EPA intends to perfect against the Property arises under Section
107(2) of the Comprehensive Environmental Response, Compensation*
and Liability Act ("CERCLA"), commonly known as the "Superfund/1
42 U.S.C. § 9607(2). The lien is intended to secure payment to
the United States of costs and damages for which you, as the
owner of the Property, would be liable to the United States under
Section 107(a) of CERCLA, 42 U.S.C. §9607(a).
Under CERCLA Sections 107(a) and 101(9), 42 U.S.C. §§9607(a)
and 9701(a), liable persons include persons who own-any
"facility," including a site or area where a hazardous substance
has been deposited, stored, disposed of, or placed, or otherwise
come to be located. EPA has determined that a release or threat
of release of hazardous substances pursuant to CERCLA Section
101(22) has occurred at or from the Property. The Property is
part of the [ ] Superfund Site, at which [hazardous substances]
came to be located, and is subject to or affected by a removal or
remedial action. As the owner of a facility, you are a person
liable for all costs of removal or remedial action at/ the site.
Costs and damages include the costs incurred by the United States
in responding to a release or threat of release at the [ ]
Superfund Site.
The lien arising in favor of the United States on the
Property continues until the liability for the costs is satisfied
or until the liability for the costs becomes unenforceable
through operation of the statute of limitations in CERCLA Section
113.
-------
2
On [date], EPA notified you by certified or registered nail
of your potential liability under CERCLA [or EPA hereby furnishes
notice, if notice has not already been furnished.] You may avoid
the perfection of a lien upon your property by paying all costs
and damages for which you are liable.
EPA has assembled a Lien Filing Record consisting of
documents relating to its decision to perfect the lien. This
record is kept at the following address, and may be reviewed and
copied at reasonable times by arrangement with:
[Regionax Attorney]
(Address and Telephone Number]
EPA has reviewed the information in the Lien Filing Record
and believes that the Agency has a reasonable basis to believe
that the statutory elements for perfecting a lien are satisfied.
After [14 calendar days or other period, set by the Region] from
the date of this letter, EPA intends to transmit a notice of lien
to [the appropriate office within the state (or county or other
governmental subdivision), as designated by State law, where the
real property is located, or with the District Court of the
United States for the district in which the real property is
located]. The effect of this filing is to perfect the lien upon
your property.
You may notify EPA within (14 calendar days or other period,
set by the Region] from the date of mailing of this letter in
writing if you believe EPA's information or determination is in
error. You may also request to appear before a neutral EPA
official to present any information that you have indicating that
EPA does not have a reasonable basis to perfect allien. You
should describe in your letter or written request your reasons
for believing that EPA does not have a reasonable basis to
perfect its lien, because EPA may, as described below, agree with
your reasons and reconsider its intention to perfect a lien
without further review or a meeting. Any written submissions or
requests for a meeting should reference the Superfund Site, be
addressed to the above referenced Regional Attorney, and may
include documents or information which support your contentions.
If EPA receives a written submission or a request for a
meeting from you within [14 calendar days or other period, set by
the Region] from the date of mailing of this letter, Agency staff
will review your submission or request for a meeting. If, after
review and consultation, EPA agrees that the Agency does not have
a reasonable basis upon which to perfect a lien, EPA will not
perfect its lien, and will so notify you. If EPA disagrees, the
written submission or request will be referred to a neutral EPA
official selected for the purpose of reviewing the submission or
for conducting the meeting, along with the Lien Filing Record.
-------
3
If you have requested an opportunity to appear, a meeting
will be scheduled. You nay choose to attend this meeting via
teleconference. The Agency will be represented by its
enforcement staff, including a representative from the Office of
Regional Counsel. You may be represented by counsel at this
meeting.
The meeting will be an informal hearing in which you may
provide EPA with information as to why the Agency's assumptions
require reconsideration. The meeting will not be conducted using
rules of evidence or formal administrative or judicial
procedures. The sole issue at the meeting would be whether EPA
has a reasonable basis to perfect a lien based upon CERCLA
Section 107(1).
After reviewing your written submissions, or conducting a
meeting, if one is requested, the neutral EPA official will issue
a recommended decision based on the Lien Filing Record. The
recommended decision will state whether EPA has a reasonable
basis to perfect the lien and will be forwarded to the Agency
official delegated to execute liens for action. You will be
notified of the Agency's action (whether perfection or the
decision not to perfect) and furnished a copy of the recommended
decision.
Keither you nor EPA waives or is prohibited from asserting
any claims or defenses in any subsequent legal or administrative
proceeding by the submission of information, a request for and
participation at a meeting, or recommended decision by the
neutral EPA official that EPA has a reasonable basis to perfect a
l-ien.
If you have any questions pertaining to this letter, please
contact [ORC attorney] at [ ].
Sincerely,
Waste Management Division Director/Regional Counsel/Regional
Administrator
-------
f
-------
ATTACHMENT 2
MODELS POST-PERFECTION NOTICE
[REGIONAL LETTERHEAD]
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION [ ]
[ADDRESS]
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
[Date]
[Name and address of owner of property]
RE: [Name and location of the site]
Dear [Name of property owner]:
This letter informs you that the United States Environmental
Protection Agency (nEPAn) has perfected a lien upon property
located at [street address], the exact legal description of which
is contained in Attachment .1 to this letter. The Property is
part of the [ ] Super fund Site. EPA has determined that you
are the owner of this property (the "Property"). The lien which
EPA has perfected against the Property arises under Section
107(i) of the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA"), commonly known as the "Superfund,"
42 U.S.C. § 9607(1). The lien is intended to secure payment to
the United States of costs and damages for which you, as the
owner of the Property, would be liable to the United States under
Section 107(a) of CERCLA, 42 U.S.C. §9607(a).
Under CERCLA Sections 107(a) and 101(9), 42 U.S.C. §§9607(a)
and 9701(a), liable persons include persons who own any
"facility," including a site or area where a hazardous substance
has been deposited, stored, disposed of, or placed, or otherwise
come to be located. EPA has determined that a release or threat
of release of hazardous substances pursuant to CERCLA Section
101(22) has occurred at or from the Property. The Property is
part of the [ ] Superfund Site, at which [hazardous substances]
came to be located, and is subject to or affected by a removal or
remedial action- As the owner of a facility, you are a person
liable for all costs of removal or remedial action at the site.
Costs and damages include the costs incurred by the United States
in responding to a release or threat of release at the [ ]
Superfund Site.
The lien arising in favor of the United States on the
Property continues until the liability for the costs is satisfied
or until the liability for the costs becomes unenforceable
through operation of the statute of limitations in CERCLA Section
113.
-------
2
On [date}, EPA notified you by certified mail of your
potential liability under CERCLA. You nay satisfy the lien
placed upon your property by paying all costs and damages for
which you are liable.
.EPA has assembled a Lien Filing Record consisting of
documents relating to its decision to perfect the lien. This
record is kept at the following address, and may be reviewed and
copied at reasonable times by arrangement with:
[Regional Attorney]
[Address and Telephone Number]
EPA has reviewed the information in the Lien Filing Record
and believes that the Agency has a reasonable basis to believe
that the statutory elements for perfecting a lien are satisfied.
EPA has perfected its lien by filing a notice of lien with [the
appropriate office within the state (or county or other
governmental subdivision), as designated by State law, where the
real property is located, or with the District Court of the
United States for the district in which the real property is
located]. EPA perfected its lien prior to notifying you of its
intention because [ ].
You may notify EPA within [14 calendar days or other period,
set by the Region] from the date of mailing of this letter in
writing if you believe EPA's information or determination is in
error. You may also request to appear before a neutral EPA
official to present any information that you have indicating that
EPA did not have a reasonable basis to perfect a lien. You .
should describe in your letter or written request your reasons
for believing that EPA did not have a reasonable basis to perfect ~
its lien, because EPA may, as described below, agree with your
reasons and release its lien without further review or a meeting.
Any written submissions or requests for a meeting should
reference the Superfund Site, be addressed to the above
referenced Regional Attorney, and may include documents or
information which support your contentions.
If EPA receives a written submission or a request for a
meeting from you within [14 calendar days or other period, set by
the Region] from the date of mailing of this letter, Agency staff
will review your submission or request for a meetina. If, after
review and consultation, EPA agrees that the Agency'did not have
a reasonable basis upon which to perfect a lien, EPA will release
its lien, and will so notify you. If EPA disagrees, the written
submission or request will be referred to a neutral EPA official
selected for the purpose of reviewing the submission or for
conducting the meeting, alonq with the Lien Filing Record.
If you have requested an opportunity to appear, a meeting
will be scheduled. You may choose to attend this meeting via
-------
3
teleconference. The Agency will be represented by its
enforcement staff, including a representative from the Office of
Regional Counsel. You may be represented by counsel at this
meeting.
The meeting will be an informal hearing in which you may
provide EPA with information as to why the Agency's assumptions
require reconsideration. The meeting wiil not be conducted using
rules of evidence or formal administrative or judicial
procedures. The sole issue at the meeting would be whether EPA
had a reasonable basis to perfect its lien based upon CERCLA
Section 107(i).
After the reviewing your written submissions, or conducting
a meeting, if one is requested, the neutral EPA official will
issue a recommended decision based on the Lien Filing Record.
The recommended decision will state whether EPA had a reasonable
basis to perfect the lien and will be forwarded to the Agency
official delegated to execute liens for action. You will be
notified of the Agency's action (whether the lien will stay in
placie or be released) and furnished a copy of the recommended
decision.
Neither you nor EPA waives or is prohibited from asserting
any claims or defenses in any subsequent legal or administrative
proceeding by the submission of information, a request for and
participation at a meeting, or recommended decision by the
neutral EPA official that EPA has a reasonable basis to file a
lien.
If you have any questions pertaining to this letter, please
contact [ORC attorney] at [ ].
Sincerely,
Waste Management Division Director/Regional Counsel/Regional
Administrator
-------
Cardinal*
-------
NOTICE OF FEDEKAL LI EM
NOTICE IS HEREBY GIVEN by ?he Ihited States of America chat ic holds a lien on
Che lands and premises described below situated in the State of Washington,
as provided" by Section 107(f) of Che Superfmd Amendments and Reauthorization
Act of lVb6 (SAKA), Public l^w No. 99-499, mending the Comprehensive Environmental
Response, Compensation, and Liabilicy Act of 1980 (CQtCLA), 42 U.S.C. 19601 ec
aeq., co secure che payment co che United States of all costs and damages covered
By that Section for which tfescern Processing Cotrpany, Inc. and Garmc J. Nieuwenhuis
(and che marital caniunity composed of himself and his wife) are liable to che
United States under Section 107(a) of CERCLA as mended. The lien for which this
instrument gives notice exists in favor of che Uniced States upon all real property
and rijfrcs co such property Which belong co said persons and are, have been, or will
be, subject co, or affected by, raaoual and remedial actions as defined by federal
law, at or near 7215 South 196th in che City of Kent, County of King. State of
Washington, including che following.described land:
That portion of che Southeast Quarter (S.E. 1/4) of che
Northwest Quarter (N.W. 1/4) of Section One (1), Township
Tuenty-TVro (22) forth. Range Four (4) East, Willamecte
Meridian, lying Westerly of the Puget Sound Electric
ri#it-of-way less Chan forth Thirty (30) feet of Drainage
Ditch No. One (1), containing 12.9 acres more or less.
This statutory lien exists and continues intil che liabilicy for such coses
and da=agcs (or for ary decree or judgment against such persons arising out of
such liabilicy) is satisfied or becomes unenforceable through che operation of che
scacute of limitations as provided by Section 113 of Public Lb* 99-499.
IN WITNESS IHD*£0F, che United States has caused this instrument Co be executed
through cher^rJited'^ates Environmental Protection Agency, and its attorney, in his
official*'eapaciey as Regional Comsel of the Ihited States Environmental Protection
Agency.*:Rejsi-r. -IE.
•V •• v/ .-//r
Bv: SZ4» f c 7w?
State of Washington )ss ViV^Jaiies R. Moore
County of King ) j' Regional Cowisel
' ll.S. £?/. Region 10
day of A/v A A b' . 19fc 7. chere appeared personally
Q'r iToe?tphefundersigned Notary, James R. hbore, feown co me Co be Che Regional
:<£&*6l39£-Cnfc'Viiced States Environmental Protection Agency, Region 10, and he
/acicibuj^gAtTxthac he signed che foregoing NOTICE OF FlDLHAL LIkN in a representeeiv
: cqjjaiXiyJ^s ;£He free and voluntary act and deed of che Ihited States and its «sai
\ A^encty j:o/,' ' .'(•''("f 1 j
/ / HJIAKi PUBLIC tt. and tor the State
My Corrcissior; Expires jS-jIf '~7L of Uishington residing at Seattle
aid
iciai
-------
-------
EPA EMPLOYEES AS
WITNESSES IN
PRIVATE LITIGATION
-------
Cardinal»
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
•REGION IV
j.15 •="»££" Vc
oEC'SGi* 3C3^5
1992
4RC
VIA FACSIMILE
Kenneth S. Canfield, Esq.
Doffermyre Shields Canfield & Knowles
1600 The Peachtree
1355 Peachtree Street
Atlanta, Georgia 30309
RE^ Burnett v. Myriad Properties, Civil No. D-91L49 (Subpoenas
of Mr. Dan Ahern and Mr. Ira Linville)
Dear Mr. Canfield:
Two subpoenas, dated July 31, 1992, from the Superior Couirt of
Fulton County, Georgia were served today around 11:45 a.m. on two
EPA employees, Mr. Daniel Ahern, Chief, Watershed Protection •<
Section, Water Management Division, and Mr. Ira Linville, Chief,
Watershed Unit, Water Management Division. The subpoenas purport
to require Mr.. Ahern and Mr. Linville to appear to be examined on
deposition by defendant in the above stated matter in Atlanta
today at 4:00 p.m.
I have advised Mr. Ahern and Mr. Linville not to attend the
deppsition and I have further advised that the subpoenas have no
legal effect. The state courts have no constitutional authority
to compel federal employees to provide testimony concerning their
official duties unless a federal statute confers such authority
upon them. See Boron Oil v. Downie, 873 F.2d 67 (4th Cir. 1989).
I am not aware of any such federal statute that would apply here.
See also 40 C.F.R. $2.404(b).
EPA regulations at 40 C.F.R. Part 2, Subpart C, prohibit EPA
employees from testifying regarding official matters, either
voluntarily or in response to subpoenas, in any proceeding in
which the United States Government is not a party. The purpose
of the regulations is:
". . .to ensure that employees' official time is used only
for official purposes, to maintain the impartiality of EPA
among private litigants, to ensure that public funds are not
used for private purposes and to establish procedures for
approving testimony or production of documents when clearly
in the interests of EPA." [40 C.F.R. 52.401(c)]
August 3,
•>'inieo Jr ,
-------
-2-
Employees may testify only where the General Counsel or his
designee (or, where the request is from a state or local
government, a Staff Office Director or other official head)
determines that the testimony would "clearly be in the interest
of EPA." I serve as the designee of the General Counsel for
testimony by employees in EPA Headquarters. See 40 C.F.R.
§2.404. In accordance with the regulations, I have consulted
with the Regional Administrator regarding this matter*
These concerns are important to us because of the potential
number of private lawsuits in which EPA employees could be
requested to testify if the regulations are not strictly applied.
Even though providing a witness for a few hours in this case
might not significantly impede our mission, the cumulative effect
of such interruptions would be very serious. This concern is the
basis for our "clear interests of EPA" standard for approving
employees' testimony.
Based on the telephone conversations you have held with the
Office of Regional Counsel, we understand the subpoenas have been
issued in a private lawsuit which Mr. Thomas Burnett, an EPA
employee, has brought against a construction company for injuries
resulting from an alleged assault by the defendants- You have
informed us that you wish to question EPA employees who have
first-hand knowledge of Mr. Burnett in order to assess his claims
that he has and will continue to suffer damages in lost wages
because his job performance has deteriorated as a result of the
injuries.
Under the circumstances of this case, we have determined that
providing Mr. Ahern and Mr. Linville would not be in the interest
of £PA. Mr. Burnett's Official Personnel File, which contains
his Performance Appraisals, has been made available to him
pursuant to a waiver for the release of these documents that he
has executed. Pursuant to 40 C.F.R. S2.406, these documents
could be authenticated by our Agency in order to assist you in
making them admissible in court.
The effect of providing Mr. Ahern and Mr. Linville to private
litigants would constitute an improper diversion of EPA resources
for private purposes. EPA resources are severely limited and we
cannot permit private litigants to use the duty time of federal
employees for numerous proceedings.
Pursuant to your letter dated July 28, 1992, and addressed to
Attorney Maria J. Ramos, we hereby request that you dispense with
the depositions. We would appreciate it if we could receive a
letter from you to that effect.
Finally, we are in possession of the $28.00 (cash) witness fee
given to Mr. Ahern and Mr. Linville and will hold until further
instructions from you.
-------
-3-
If you have any questions concerning this matter, please contact
Maria J. Ramos at 347-5101, extension 2159.
Sincerely yours,
n R. Barker
(/ Regional Counsel
-------
UNITES STATES EN V I SCN MENTAL P^CTECTICN AGEN'CV
CEOICN IV
August 24, 1992
VIA FACSIMILE
James 0. Williams, Jr., Esquire
Derrevere & Williams, P.A.
224 Datura Street, Suite 1102
West Palm Beach, Florida 334Q1
Re: Subpoena For Trial Issued to Records Custodian, U.S. EPA,
Region IV, In The Matter Of Fitzgerald v. City Of Mount
Dora, Et. A1.,
Case No: 91-391-CA-01
Dear Mr. Williams:
The purpose of this letter is to respond to a Subpoena For
Trial directing the "Records Custodian" of EPA-Region IV to
appear and testify in the above-referenced matter in the state
circuit court in Tavares, Florida, on Monday, August 24, 1992
In a telephone conference with Assistant Regional Counsel Stedman
S. Southall on August 20, 1992, you released the "Records
Custodian" from appearance on August 24, 1992. You also stated
you were interested in certain unspecified EPA records and you
would like certified copies of those unspecified records.
In addition to the subpoena to testify, you have telefaxed a
copy of a letter dated August 20, 1992, addressed to the "Records
Custodian", requiring the presence of the witness as stated in
the subpoena, and directing the witness to produce documents
relating to the City of Mount Dora Wastewater Water Treatment
Plant and effluent disposal system during the years 1983 through
1986.
This office has reviewed the subpoena, which has serious
deficiencies. First, this is a subpoena issued by a Florida
state court for a proceeding in which the EPA is not a party. A
review of Florida state law did not yield any jurisdictional
authority allowing service of a subpoena upon an out-of-state
witness to appear in a Florida trial. Furthermore, state courts
have no constitutional authority to compel federal employees to
provide testimony concerning their official duties unless a
federal statute confers such authority upon them. See Boron Oil
v. Downie. 873 F.2d 67 (4th Cir. 1989). I am not aware of any
such federal statute that would apply here. See also 40 C.F.R. §
2.404. Second, the $32.40 witness fee is grossly insufficient to
defray the travel costs of any witness from EPA's Regional Office
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- 2 -
in Atlanta, Georgia. Third, we have no indication that the
subpoena was personally served.
Because the subpoena was not validly issued or served, the
subpoena, the witness fee, and your August 20, 1992 letter are
herewith returned to you in this letter. I invite your attention
to the regulations at 40 CER Part 2, which govern the production
of information by the Agency.
In addition, EPA regulations at 40 C.F.R. Part'" 2 ,* Subpart
C, contain restrictions on EPA employees testifying regarding
official matters, either voluntarily or in response to subpoenas,
in any proceeding in which the United States Government is not a
party. The purpose of the regulations is:
"... to ensure that employees' official time is used only
for official purposes, to maintain the impartiality of EPA
among private litigants, to ensure that public funds are not
used for private purposes and to establish procedures for
approving testimony or production of documents when clearly
in the interests of EPA". [40 C.F.R. § 2.401 (c)]
Employees may testify only where the General Counsel Or his
designee (or, where the request is from a state or local
government, a Staff Office Director or other official head)
determines that the testimony would "clearly be in the interest
of EPA". I serve as the designee of the General Counsel fbr
testimony by employees in EPA Region IV. See 40 C.F.R. § 2 .404.
These concerns are important to us because of the potential
number of private lawsuits in which EPA employees could be
requested to testify if the regulations are not strictly applied.
Even though providing a witness for a few hours in this case
might not significantly impede our mission, the cumulative effect
of such interruptions would be very serious. This concern is the
basis for oar "clear interests of EPA" standard for approving
employees' testimony.
In this case the subpoena has been issued in a private lawsuit.
Previous to the issuance of said subpoena EPA had no knowledge of
the existence of the suit. Although we now know such a lawsuit
exists, we are not aware of the allegations contained in the
complaint and how EPA could possibly be involved in any way in
such lawsuit. As a result, it is impossible for EPA to issue a
determination that it would be. in its interest to approve an
employee's testimony. Both the subpoena and the letter fail to
state why it would be in the interests of EPA to approve a
request for an employee's testimony. As such, assuming the
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3
subpoena had been validly issued, I cannot determine that
according to the regulations it would be in the interests of EPA
to provide testimony in this matter.
cc: Honorable James C. Watkins
Clerk of.Court
Circuit Court
Fifth Judicial Circuit
Lake County Judicial Building Center
550 West Main Street
Tavares, Florida, 32778
Enclosures
Regional Counsel
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IN THE UNITED STATES .DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
VALDOSTA DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
AMTRECO, INC. and JAMES L. DICKERSON,
Defendants,
Third Party Plaintiffs
v.
AMERICAN TELEPHONE AND TELEGRAPH
COMPANY AND WESTERN ELECTRIC
COMPANY,
Third Party Defendants
CIV. NO. 90-31-VAL
MOTION TO QUASH SUBPOENA AND
FOR A PROTECTIVE ORDER TO PROHIBIT
THE DEPOSITION OF MR. LEE DEHIHNS. Ill
Defendants served a subpoena on Mr. Lee A. DeHihns, III on
Friday, June 19, 1992, for a deposition to be held on Tuesday,
June 23, 1992. Mr. DeHihns is a former Acting Regional
Administrator for EPA, Region 4. The Defendants seek to depose
Mr. DeHihns regarding decisions made while acting in his official
capacity. For the reasons more fully set forth in the
accompanying memorandum, the United States respectfully requests
1
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tttat this Court quash the subpoena and issue a protective order
precluding his deposition.
Respectfully submitted,
UNITED STATES OF AMERICA
BARRY M. HARTMAN
Acting Assistant Attorney General
Environment and Natural Resources
Trial Attorney
Environmental Enforcement Section
Land and Natural Resources Division
P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044
(202) 514-2779
Attorneys for the United States
Of Counsel:
VIRGINIA MCGEE
Office of Regional Counsel
U.S. EPA, Region IV
345 Courtland Street, N.E.
Atlanta, GA 30365
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
VALDOSTA DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
AMTRECO, INC. and JAMES L. DICKERSON,
Defendants,
Third Party Plaintiffs
v.
AMERICAN TELEPHONE AND TELEGRAPH
COMPANY AND WESTERN ELECTRIC
COMPANY,
Third Party Defendants
CIV. NO. 90-31-VAL
MEMORANDUM OF THE UNITED STATES IN
SUPPORT OF ITS MOTION TO QUASH SUBPOENA AND
FOR A PROTECTIVE ORDER TO PROHIBIT
THE DEPOSITION OF MRt EBB PEHIHffg. 17,1
Introduction
Mr. Lee A. DeHihns, III served as the Acting Regional
Administrator of EPA from August of 1987 until March 31, 1988.
As Acting Regional Administrator, Mr. DeHihns assumed the
authority delegated to him from the President of the United
States and the Administrator of the Environmental Protection
Agency for the administration and management of Region IV, EPA.
Mr. DeHihns delegations of authority included the authority to
make decisions under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 sea..
("CERCLA") to conduct activities in response to a release or
1
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substantial threat of a release into the environment. Pursuant
to this authority, Kr.DeHihns signed "Action Memoranda* under
CERCLA for the Dickerson Post Site in Homerville, Georgia on
February 11, 1988 and March 15, 1988. These two "Action
Memoranda" authorize increases in the amount of funding for the
removal action (a category of clean-up actions under CERCLA)
being conducted in response to a release and substantial threat
of a release of hazardous substances at the Dickerson Post Site.
S§e Dickerson v. Administrator, E.P.A., 834 F.2d 974 (11th Cir.
1987) (approving this district court's order granting the EPA
access to the Dickerson Post Site for the purpose of conducting a
clean-up at the Dickerson Post site in response to a release and
a substantial threat of release of hazardous substances). The
'Action Memoranda* are included in the administrative record
already filed with the Court. See Attachment l. Mr. DeHihns'
only involvement with the Dickerson Post site is these two Action
Memoranda. Moreover, he does not have personal knowledge of the
facts contained in the memoranda.
The Defendants have had an opportunity to depose those with
personal knowledge of the facts contained in the Action
Memoranda. The Defendants deposed Rita Ford, who drafted the
Action Memoranda, over a period of two days for approximately 15
hours. They questioned her closely regarding the various action
memoranda drafted by her, including those signed by Mr. DeHihns.
Moreover, Defendants have deposed numerous individuals regarding
2
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For the reasons outlined below, the subpoena should be quashed.
I. The Deliberative Process Privilege protects the
decision-making process of the former Acting Regional
Administrator from Discovery.
Courts recognize that the deliberative process privilege
protects the head of an agency from inquiry into or disclosure of
his decision-making and thought processes. The privilege
protects the head of an agency from testifying at depositions and
trials. United States v. Morgan. 61 S.Ct. 999, 1004 (1941),
coalition on Sensible Transportation Inc. v. Dole. 826 F.2d 60,
72 (D«C. Cir. 1987) (plaintiffs barred from inquiring into the
mental processes of administrative decisionmakers during
discovery) ; Bank of Commerce of Laredo v. Citv National Bank of
kfljreflQ, 484 F.2d 284, 288 (5th Cir. 1973), cert, denied. 416
u,L.s. 905 s. ct. 1609 (1974) (deliberative process privilege
protects Comptroller from deposition and interrogatories); Bacon
v. Department of Housing and Urban Development. 757 F.2d 265, 270
(Fed. Cir. 1985) (party cannot probe mental processes of
decisionmaker at trial); San Luis Obiapo Mothers for Peace v.
U.S. Nuclear Regulatory Commission. 789 F.2d 26, 44 (D.C. Cir.
1986).
In United States v. Morgan. 61 S.Ct. 999 (1941), the Supreme
court found error in the District Court's decision to allow the
deposition of the Secretary of Agriculture on a decision that he
made in the course of his responsibilities as an administrative
official. The Court compared the Secretary of Agriculture's
mental processes to those of a judge and held:
4
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[s]uch an examination of a judge would be destructive
of judicial responsibility. We have explicitly held in
this very litigation that it was not the function of
the court to probe the mental processes of the
Secretary. Just as a judge cannot be subjected to such
scrutiny, so the integrity of the administrative
process must be equally respected. It will bear
repeating that although the administrative process has
had a different development and pursues somewhat
different ways from those of courts, they are to be
deemed collaborative instrumentalities of justiQe and
the appropriate independence of each should be
respected by the other, (cites omitted)
Morgan at 1004.
The deliberative process privilege protects and encourages
ther free flow of information necessary to make informed decision-
making by the agency. *[T]he privilege subserves a
preponderative policy of frank expression and discussion among
those upon whom rests the responsibility for making the
determination that enables government to operate." Carl Zeiss.
Stiftuna v. V.E.B. Carl Zeiss. Jena. 40 F.R.D. 318, 324 (D.D.C.
1966), aff'd sub, nom. V.E.B. Carl Zeiss. Jena v. Clark. 384 F.2d
979 (D.C. cir 1967), cert, denied. 389 U.S. 952, 88 S. Ct. 334
(1967). Courts have likened the thought processes of an agency
administrator to those of a judge who reviews documentation, and
consults with advisors before making a decision. See U.S. v.
Morgan. 61 S.Ct. 999, 1004, San Luis Obispo at 44. In Bacon v.
Department of Homing anfl vrftgn pgyeiopment, 757 F.2d 265 (Fed.
Cir. 1985) the Court of Appeals found that the Secretary of the
Department of Housing and Urban Development should not have been
called as a witness in a trial contesting an agency decision.
The Bacon court held "it is not the function of the court to
5
-------
probe the mental processes of the Secretary. Just as a judge
cannot be subjected to such a scrutiny, so the integrity of the
administrative process must be equally respected." Bacon at 270.
The deposition of Mr. DeHihn on the Dickerson Post site will
necessarily involve inquiry into his mental processes as the
Acting Regional Administrator of EPA. Mr. DeHihns became
involved in the Dickerson Post site for the sole purpose of
deciding whether EPA would increase the funds available for the
removal action at the Dickerson Post Site. In making this
decision, Mr. DeHihns weighed other EPA employee's advice and
observations in the context of the goals and policies of EPA in
19B8. The thought processes that led Mr. DeHihns to approve the
funding increases, i.e., to choose one course of action over
another, are precisely the kind of information protected by the
deliberative process privilege.
In circumstances similar to the facts in this case, it has
been held that EPA officials should not be deposed. In United
states v. Conservation Chemical Co.. et al.. No. 82-0983-CV-W-5,
slip. op. at 3 (W.D. Mo. March 25, 1985), the Court adopted the
Special Master's recommendation that Morris Kay, Regional
Administrator for Region VII of EPA, not be deposed. The Special
Master explained his reasons for this recommendation:
Mr. Kay, who is the Regional Administrator
for EPA Region VII, is a senior government
official who holds his position by virtue of
a presidential appointment. To the extent
that a deposition might seek to invade the
mental processes of a high-ranking
policymaker, such deposition should be
6
-------
disapproved. See. United States v. Morgan.
313 U.S. 409, 422 (1941).
Similarly, in United States v. Wheelinq-Pittsburah
st.ee! corporation. No. 79-1194 (W.D. Pa. November 8, 1984), the
Court granted the United States's Motion for Protective Order
seeking to prevent the deposing of Thomas P. Eichler, Regional
Administrator of EPA, Region III. The court stated:
Heads of governmental agencies are not
normally subject to deposition. Kvle
Engineering Co. v. Kleppe. 600 F.2d 226, 231
(9th Cir. 1979). Eichler is a regional
administrator responsible for a substantial
number of enforcement actions. Although
Eichler is not the head of an agency,
because of his position and responsibilities
it is preferable that he not be deposed,
especially since discoverable information is
available by other means. Through
interrogatories served on EPA, Wheeling-
Pittsburgh can inquire whether EPA has
promulgated standards and policies on
substantial compliance with consent decrees
and what these standards and policies are.
Ifl. at 1-2.
These two decisions are in accordance with the well
established principle that the deliberative process privilege
cannot be overridden in either the trial or discovery context
absent a 'strong showing of bad faith or improper behavior on the
part of the agency.* Sensible Transportation. 826 F.2d at 72.
See also. Mothers for Peace. 789 F.2d at 44; Bank of Commerce.
484 F.2d at 288 (allegations that agency had engaged in improper
conduct insufficient to permit discovery into closed agency
meeting).
7
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In Bank of Commerce, the court refused to allow the
deposition of the agency decisionmaker;
[w]hen findings of fact, rendered contemporaneously with the
concomitant administrative decision, are subsequently
available, a reviewing court may not require the agency
officials who participated in that decision to give
testimony explaining their action unless there has been a
strong showing of bad faith or improper behavior.
Bank of Commerce at 288, citing Citizens to Preserve Overton
Park. Inc. v. Volpe. 91 S.Ct. 814, 825.
In San Luis Obispo, the Court of Appeals for the D.C.
Circuit found,
ft]here may be cases where a court Is warranted in examining
the deliberative proceedings of an agency. But such cases
must be rare exceptions if agencies are to engage in
uninhibited and frank discussions during there
deliberations. Were courts regularly to review . . . agency
deliberative proceedings, the discussions would be conducted
with judicial scrutiny in mind. Such agency proceedings
would then be useless both to the agency and the courts. We
think the analogy to the deliberative processes of a court
is an apt one.
San Luis Obispo 789 F.2d at 45.
In the case of Mr. DeHihns, the defendants cannot make the
required showing of "bad faith or improper behavior* on the part
of EPA to require.the deposition of Mr. DeHihns. EPA has
disclosed all the facts and memoranda supporting the decision
made by Mr. DeHihns in the voluminous administrative record
submitted in this case. Further, EPA has provided defendants the
opportunity to depose current and former EPA employees under Mr.
DeHihns who provided him with the facts surrounding this case,
including the On-Scene-Coordinators, and managers who are
familiar with EPA's removal authorities. In addition to the
8
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administrative record and depositions# EPA has provided
defendants with thousands of pages of documents in discovery
concerning the cases of the removal action.
II. Deposition of Mr. DeHihns is unduly burdensome to the
United States and Mr. DeHihns
A. The Deposition is duplicative
Rule 26(c) of the Federal Rules of Civil Procedure give the
district court broad discretion to protect parties or persons
from undue burden and annoyance during the discovery process.
The deposition of Mr. DeHihns is both unduly burdensome and
duplicative. Other than his private thought processes which are
protected under the deliberative process privilege, Mr. DeHihns
does not have any information on the Dickerson Post Site that has
not already been furnished to defendants.
Defendants have had ample opportunity to obtain any
information retained by EPA on the Dickerson Post site during the
past two years of discovery. The United States has already
provided defendants with the opportunity to depose former and
current EPA employees including the On-Scene Coordinators
responsible for the Dickerson site and their managers. Unlike
Mr. DeHihns, many of these persons travelled to the Dickerson
Post Site and made observations and conclusions about the
conditions they observed there. The current and former EPA
personnel that the United States has provided during discovery
are persons that Mr. DeHihns relied on to provide him with
reports and advice in his decision-making role. EPA has given
9
-------
defendants memorialized accounts of EPA reports and advice in the
administrative record filed with the court.
B. The Subpoena Gave Insufficient Notice
Defendants' subpoena gave only one full working days' notice
for the deposition. Defendants have no reasonable basis for
making" this eleventh hour demand during the final week of a
two-year discovery process. Defendants personally contacted Mr.
Dehihns at his home and his work in early Hay of 1992. A one
full working day notice period is unreasonable, and there is no
reason that defendants could not have given reasonable notice as
required under Rule 30 of the Federal Rules of Civil Procedure.
Mr. DeHihns is presently employed in a large corporate law firm
in Atlanta. The one full working day notice provided by the
subpoena is an insufficient period of time for him to properly
schedule a deposition. Moreover, this period is insufficient
time for the United States to respond to a subpoena for the
deposition of the head of an EPA agency.
III. Conclusion
For the foregoing reasons, the United States requests that
this court exercises its authority under Rule 26(c) of the
Federal Rules of Civil Procedure and grant the United States
Motion for a Protective Order to prohibit the deposition of Mr.
10
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L&e DeHihns, III former Acting Regional Administrator of the
Environmental Protection Agency.
Respectfully submitted,
UNITED STATES OF AMERICA
BARRY H. HARTMAN
Acting Assistant Attorney General
Environment and Natural Resources
Divisioi
VALERIE
Trial Attorney
LEE
Environmental Enforcement Section
Land and Natural Resources Division
P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044
(202) 514-27.79
Attorneys for the United States
Of Counsel:
VIRGINIA MCGEE
Office of Regional Counsel
U.S. EPA, Region IV
345 Courtland Street, N.E.
Atlanta, GA 30365
11
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4f Alii Vi'SftWl*
3002
XV THH U5Z7BD BTAXS8 DISTRICT 00US2
FOB. SSB KZOOLB DISTRICT 07 OBOROI*
V&LDOSIA DIVISION
CHll'HXJ 8TATBS OF UDD2ZC&/
Plaintiff
vs.
1MS8EC0, ZBC* 1KD J&MS8 L.
DXCXBBSOV,
Defendants, Third
party Plaintiffs
vs.
MlHBlCMi TSKBPBOSB 1BD
TBLSGRAPK COUP&BX 1HD TO8THEB
ELECTRIC COKP1HY,
Third Party
Defendants.
CIV. SO. 90-3i-VXL(DF)
Filed at S:Q
-------
«003
ovens, this order only being issued by this judge because of his
absence from the district.
SO ORDERED, this 22nd dqy of ^ 1992.
SOSOSS F1TZPAXRICK, JUDGE
UNITED STATES DISTRICT CODBT
AO 7ZA
(ROV. 8JB2)
2
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v. MKOmn,
vnwoa, ac. akd jmbs t. dickbssqn, t _
y DEPENDANTS/THIRD PARTJf SUBPOENA IN A CIVIL CASE
AMERICAN tELBFBGta 'AMD TOt WRAPS PtAIOTXFFS
OCHttNX M8> WB6TBW ELECTRIC CCMPAOT ca«0 numsb*
THIRD PARTY DBrBBANXS.
TO: WU LBS A. DZHZBB/ XIX
C/0 ALSTON ft BIRD
on* Atlantis Cantar/ 1201 Waat Paachtraa Stcaat
Atlanta. CA 30309-3434
~ YOU Afle commanded to appear in ma unttw 3tatca Oietnct Courtatthe place. data, iita time specified baiow to
teetity mthaabowcaaa.
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AMMbk —
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IS YOU AM COMMANDED to eppesrat the place, data, and tfms tpedftad below te teetlfy at the taking d *
-------
/•? • - UNITED STATES ENVIRONMENTAL PROJECTION AGENCY
REGION IV
145 COURTLANO STRtCT
ATLANTA. 6COR6IA SOUS,
1 S &G13
I^T Vi>
-------
-z'-y uui4
-2-
waste "anaqeoent - "TTw W? hae ba«rt hlolooicallv treatlno the wutt
In tht inpounckwnt. aecauae the laooons are unlined, a potential
threat to rerehed aramAmter 'jxiste**. FPA *as use** carhon adeorbticn
to treat the laooon wastewater. The contaminated soil fro* the laooons
>as been staqed and is awaitino dlstxmal. The drums and adjacent
(orrtanlnated soil have been rvrwed*
i. ^.irroundino Area - T*e adlacent land use coneiste of private residences
and naoer/nuln tree farms.
"Viartl.tv and TVpe of Substances Presenti
hazardous substance Is creosote and creosote sludoe, a listed waste.
"*ere vmre 252 onun callon dnra of creosote resin. The tanks contained
4.0H0 nations of liruid waste that was a fixture of creoaote cut vith
:,>el. Apnroxiwatelv inoo cubic yards of soil adjacent, to the <1tw« and
anks waci contaminated. The i*rcund«ents contained 900,000 na lions of
•nter and ?<"i00 cubic vards of sludqe.
"Tireat of Pipusuie to Public or the ttwttnreent
The threat of ouhlic exposure to creosote or creosote byproducts exists by
contact, Inhalation, and possible ingestion of centaetlnatad groundwater*
The aite is not fenced and human contact mposure to creoeofaa vasts la
Toeslble. «cth the surface ivpounfrsnts and oroduet rwainlno in the
i*raeane tanks are ootantlal evoosurs sources.
rface iicnoundnantB are a potential aouros of groundwater oontisilnatlon.
lie rieoth to
-------
2 9 .001 5
r*4r\fp
attachment *2.
PROPOSED PROJECT AND POSTS
A. Objectives of the Project
Immediate-actions will include recycling and/or disposing of tank
licuids, and transportation and disposal of contaminated soil.
3. Estimated Clean-up Costs
Costs are based on worst case scenario that is liquids cannot be
recycled.
c^TTv-rrcai. C0?TS
Current Proposed "ew
Ceilinrjs Increase Ceilinas
«t»CS contractor S42fl,000 £135,^00 S615,f)00
TAT Costs 21.000 21.000
Subtotal, Pxtramiral S441,000 S636,fi(50
Travel 13,001 13,000
Intraoral Indirect Costs
a«aion 3 $54/hr. 24.A40 7.4,840
TOTAL, INTRAMURAL S 76,240 S 74,240
TOTAL SITF BUDGET S583.390 $195,OW S778,390
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2 9 0016
IGIOMAL P£OGHMENDftTION
jse conditions at the Dickerson Post Site meet the NCP Section 300.65
beria for an immediate removal, I recaiwend your approval of this
195*000 ceiling increase request. Your approval would increase the
roject ceiling to $778,390 of which 5615,000 are for EFCS removal
ontractor costs.
3u may indicate your aporoval or disapproval by signing below.
/
\ro rove
i
/
^ ~ Date
Dis^osrove
Date:
Attachments
-------
2 9 001 7
•. td
I Break: a.1 I
(Other: J
»rrrru
rw» MAR 151988
cf».7PT*t oil inn Increase Peruest for nicfcersoo Past Plte
in Wci-srvl11*», Oorcia
ft*"**: Pit» for**
rn-cenne OcorHirvator
""*¦*: T.#>« TTT
* V*.i»r? »»viorwl Administrator, Peoion IV
mrrnrcp
rM«? -»*nrrarK!i55 is to recueet *Vitior^l fundlno In the arrxint of *fil*,cnn
s**ic* vnil^ , 19B7, fundinci wan Authorised for renewal actions at the Piekereon
r c!»<* in "rrwville, Ceornia* The original score of wort includad
cf r,njn*, nank Moulds, laooon wastewater, laooon sludoe# an*
onrtar-iMte^ «»ciJ.
•.mr1' b*oan on t*e sit* Aunuat 10, 1W, Curing Phase I, the site was
wnletf to iiet«rrine the extent of soil contt*inatian« ?amlm were also
r*ten *o »»sMblish dlanosal nrofilee* Pased an these rrofiles the *ite was
ratwnorited Into four waste strwaiw 1) OCB contaminated Iruns and soil,
?) lacoon wastewater, 3) R001 aludoe fro* treatnant o* creosote wastes, and
*1 abandoned ltould crsonte*
r>^.cp it - Huwal and Disposal beoan flecerfcer 7, WR7. 7^ Wfl contaminated
Jn.rR and soil ear* excavated anrt trarsnorted to Choslcal V'aste "nnaoerent#
in rT«?l]e, MafcflM* The laooon wastewater wee nrpceeaed throioh two cartoon
fil*x**,.i«n units and dlecharoed or site after sarnllno confirmed effective
tr»*trv?nt, ""he l/WTons were excavated with contaminated aludne/soil beinc
st.ao«d *w*itinn disposal*
funds requested are for actions consistent with the orloinel
fscr*«» «f urrv, and will be us*d to twewe additional contaninated soil. It
was or^inallv estimated that there would he 2500 cuhtc yard^ of #ludoe.
>fter the Gannon water was treated ar^coKimteiy fWOft cubic v*rds of
4-WD-ERRB 4-WD-ERRB 4-WD~ERRB 4-WD-ERRB 4-WO-ERRB
Pord B4rrchcoc]to Rogara stonabrakar Tobin
W <>•
-------
ad)aoant to the lipoon, which bei cont watal when the lagoons overflowed
^rinc periods of heavy rain prior to the iwnil action. 1M» additional
sol3 « lad and found to have total polynuclsar. arenatlc hydrocsrterw
(PAKja) in iibiii of 33,000 rw. Th# clean-uo citerla for thia ait* Tff"IW
ncn total PM*s«
"w.'wmi mmujbct posts
Wiltional fund* are not bwim renuftsted for TAT or Intra»rur»l expcnwew.
Haily coFt swvarles throuoh March 1, 1W show S2t TAT funris remainina
(S10,fi00) and *0% Intrarxiral funds nmainlno (SS9,2S0).
rrr°AwwL »T*?rs
Currant Pujyusai* New
CelUnos Tncveaae Cellinrjs
FT* contractor 5<51S,000 S€1*,000 $1,211,000
TAT COSta 21.000 21.000
subtotal, F*tr»"ural s«36,000 $1 riU)fiM>
Cortinrencv K6.1S0 66,150
Trrr*L, WU.WW?. S702.1V) M,313,150
%
iyrp.a»*FT>M. fDPTS
Tn^rar^iral rslrect Contn
Labor P S30/hour ? 3B.400 S 3*,400
Travel 13,000 11,000
Tn«:rarwr»l Indirect foets
Paction P $S4/hr. 24,840 ^^24^840
rrT*T., I*TP*WRAL S 7«#240 $ 74,240
TTM. snr BUDGET S77«,390 S61*,000 $1,394,390
orfTrr&L rwppMMFVnATTOW
Because renditions at the Plckerson Poet Site neet the HCP Section 300.fi*
Criteria for an immediate raroval, I leajirwd your amroval of this
<5,000 ceilina increase recuest. Your arprwal *euld Increase the
project ceiliag to $1,394,390 of which SI,231,000 are for FPC5 removal
contractor costs*
vou nav Indicate your approval or diaacrroval hy aiqnino beta*.
/s/.Lec A. DiHihns, HI
anrrowt Acting Regional Administrator Oatei 1 $ 868
nl8*rrmvei
Oatei
-------
1 m OMXTtO STATU DISTRICT COURT
TOR Tit rtSttM DISTRICT Of PENNSYLVAKXA
WITED STATES OP AMERICA*
Plaintiff
and
COMMONWEALTH 0T PENNSYLVANIA, ET AL.,
Intervening Plaintiffs
v.
WHEEL!NC-PXTTSBURCS STEEL CORPORATION,
Defendant.
MEMORAHDOM OPIHIOS
In this conteapt action* the government baa moved foi
protective order to preveot the depotition of Thoaas P. Eichli
Administrator of EPA Region III.
Wheeling-Pittsburgh Steel Corporation asserts it is
necessary to depose Zichlar to detersise EPA standards and
poUeies oa substantial compliance vith. consent decrees and
detersine whether it hat bets the victis of selective prosecut
Seeds of governmental agencies are sot normally sobje
to deposition* K»l» Bwinearia* Ca.
-------
indorsation is available by other aeens. Through interrogetori
served on EPfc, Wheeling-Pittsburgh can inquire whether SPA has
proeulgeted standards and policies on tubitantial coepliaace vi
consent decrees and what those standards and policies art.
If no atandarda or pollciaa on substantial coepliencc
exist, further discovery on thla point, by deposition or
interrogatory, vould bt barred. Furthar discovery vould
necessarily be an inquiry into vby Zichler decided
Wheeling-Pittsburgh vis not la substantial compliance vith the
consent decree and therefore brought this enforcement action.
Inquiry into mental or deliberative processes of adainiatrati?<
decision-makers is generally prohibited. P.S. v. Morgan. 313
409, 422 (1941); IS1 Corp. v. P.S.. 503 P.2d SSI, 559 (9th Ci:
1974)» Ernest and Hacv Harvard Weir Foundation v. O.S.* SOI F
194, 195 b. 2 (2d Clr. 1974).
Further, a. ahovLng of bed fetth Ls necessary to probe
governments reeaon for bringing en. action. 4 J. Moore* fader
Practice 1 2<*St{21 et 2C-U7 (2d ed. 1914). Wheeling-Pittsb*
refers to the depot It ton testimony o£ EP1 environmental^ iciest
Denis II* Slellsski that sa colts ovea battery la the country it
complete-compliance:. Wtfcr oven:reie*--.4lI-the; time*.but.tfcat EPX
uses enforcement discretion to determine whether to take
enforcement action. This is insufficient to show bad faith te
-------
fl entitle Wheeiing-Pittsbutfh to discovery en Cichler'i rta*
bringiag this enforcement action.
For the foresoin* reasons a protective order will
granted. An appropriate order shall issue.
Da ted t Hoveaber 5** * 1904.
Bubeex^l. Teiteibaua
Led States District J
-------
ORPC*
AND N0W M0WM,b" —£ ' «»~ i» .eeerawe. vlth th
foregoing ®emorandua opinion# IT IS HEREBY OHOEWO plaintiff's
aotioft for t protective order to vacate th« notice of deposition
of Thomas P. Eichler Is granted.
* iuftert^ Teltemua
OUtfief Judgt
cct Crai* McKay# Ass't 0# S.Atty
Thomas ABi Esq.
Department of Eaviroosootal Seaoorcu
t. 0. Bos 21.ST
2*sriaborft» P*. 17120
t*rrr Kopelus. Specie! Aw't Atfcy Ceoeral
Vest Vlrgtoii Air Pollution Control Coaigslao
1551 Washington St.* Zut
Charles ton# «ut Virginia 2S3U
E. DeanU Hacfeolckl, Us't Ittf 6«»iiL
Ohio Environmental Protection fcgancy
31ft East Broad at *
Colombo** Ohio 4321ft.
Nilliii &* Jr.# .
EnviroRaental Enforcement Sectloo
0. S. Department of Juatict
Washington/ D.C. 20530
-------
IN THE UNITED STATES DISTRICT COURT FOR THE •
WESTERN DISTRICT OF MISSOURI *>
WESTERN DIVISION
UNITED STATES OP AMERICA#
Plaintiff
) Ho. 82-0983-CV-W-5
CONSERVATION CHEMICAL COMPANY.)
•t al..
Defendant*. }
ORDER
On March 5, 1985. the Special Master filed the Eleventh Set
of Recommendations Concerning Pretrial Matters. On March &,
1985. the Special Master filed the Twelfth Set of Recooaendationt
Concerning Pretrial Matters. No objection hat been filed to
either set of recommendations. In addition, the Court has
reviewed both sets of recomsendations and finds that they should
be adopted. According, it is hereby
ORDERED that the Special Master's Eleventh and Twelfth Sets
of Recommendations Concerning Pretrial Matters are adopted.
1 SCOTT O. WRlGHy
United States District Judge
March
-------
M VVfc' |
- s-CC I
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT Of MISSOURI
WESTERN DIVISION
3\hW-0*
UNITED STATES OP AMERICA
plaintiff.
v.
No. 82-0«3-CV-w-s
CONSERVATION CHKMlCAL COMPANY
et *1 • t
Defendants
SPECIAL MASTER'S ELEVENTH SET
Of RECOMMENDATIONS CONCERNING
PRETRIAL MATTERS
1. The following requests should be approved: th* Motion
For Leave to Pile Answer of Third Party Defendant Metal Plating
Corporation; third-party defendant Atlantic Richfield Company's
Motion to File Answer Out of Time; third-party defendant Crane
Packing Company's Application For Refund of Payment to Special
Master's Fund; the Motion of Rival Manufacturing Company For
Return of Monies Paid to the Special Master's Reimbursement
Fund.
2. The Request by Armco, Inc., AT&T Technologies, inc.,
PMC Corporation and International Business Machines Corporation
For Issuance of Supplemental Document Production Requests To
insurer Third-Party Defendants (later joined in by Conservation
Chemical Company, Conservation Chemical Company of Illinois and
Norman S. HJersted) is hereby approved. Such documents are to
be produced at the document depository on or before March 18«
1995. To the extent that documents responsive to such request
-------
have already been produced, they do not have to be produced
•gain.
J. The following requests for admissions submitted to the
Special Master by various partl*s are hereby approved In their
entirety! Third Party Defendant American fidelity Fire Insurance
Company's Request For Admissions to Conservation Chemical
Company, Conservation Chemical Company of Illinois and Norman B.
Hjersted: Third Party Generator Defendant Che-.-entral Corpora-
tion's Request For Admissions to Third Party rlaintiffs;
Requests For A-laissions By Cooperative Farm C*.«micals Associa-
tion For Service Upon Third-Party Plaintiffs; Third Party
Generator Defendant w* 11man Dynamics Corporation's Proposed
Request For Admissions For Third Party Plaintiff* Araco, .Inc.,
AT&T Technologies# Inc., FMC Corporation and :iternatidnal Busi-
ness Machines Corporation; Proposed Requests For Admissions From
Third-Party Defendant General Dynamics Corporation to Third-
Party Plaintiffs; Proposed Requests For Admissions From Third-
Party Defendant Midland Lithographing Company to Third-Party
Plaintiffs; and Third-Party Defendant Nibco Ir.c's Request For
Admissions.
4. The Plaintiff's Proposed Request Fc? Admissions to
Original attendants and the Plaintiff's Motic*. For Leave to
Submit One Additional Interrogatory Related tc Requests For
Admissions are hereby approved. However, due to the large
number of requests for admissions (948)* the defendants should
have an additional week, until March 29* 1985. in which to
respond to said requests and interrogatory.
-2-
-------
5. The Notion o( the United States Cor * Protective Order
To Vacate the Notice of Deposition of Morris Ray should be
approved. Mr. Key, who is the Regional Administator for EPA
Retion VII* is a senior government official Mho holds his
position by virtue of • presidential appointment. To the extent
that a deposition might seek to invade the me~:al processes of a
high-ranking policymaker, such deposition she.Id be disapproved.
See, United States v. Morgan, 313 U.S. 409, 4T2 (1941). Based
upon the affidavit filed by Mr. Kay, it is dc.;tful that
meaningful information could be obtained thro-;h his deposition
for the following reasons: (1) the litigation was filed prior to
his appointment and thus he does not have first-hand knowledge
of the facts or the reasons for its filing; (2) he has no
scientific or technical expertise; and (3) h$ relies upon CPA
professional staff and consultants, most of vnoa already have
been, or will be or could be deposed. However, in accordance
with the opinion in United States v. Tenneco Chewicsls, Inc.,
No. 80*4141 (D.N.J* 1981 J, the Special Master suggests that
narrowly drawn interrogatories may be appropriate to determine
what relevant information, if any, might have been obtained by a
deposition. See, Slip op. at 16 (attached tc plaintiff's motion
as Exhibit 2).
6. The third-party defendants P.L. Carswell Manufacturing
Company and CMC Production Galvanlzers should be treated as one
entity for purposes of liaison counsel expenses and payments to
the Master's Reimbursement Fund.
7. The Order filed by the Court on December 21. 1984,
-3-
-------
requiring* inter alia, additional contributlc-.» to the Master's
Jle lmhur lament Pund provided that "(«)n ordtr rslating to the
contribution of the government third-party defendants «U] be
held In abeyance pending resolution of the motion pertaining to
the third-party status of the government agencies and officers."
The Special Master understood that provision to apply only to
the third-party defendant federal agencies* finding resolution
of the motion to dismiss the third-party complaint against the
federal agencies. At least one third-party etfendant which is a
municipal corporation, the Sanitary District z( Rockford,
Illinois, has taken it upon itself to include itself within the
exempt group. If the Special Master's understanding of, the
Court's Order is accurate, the Sanitary District of Rockford,
Illinois, and any other non-federal governmer.; agencies which
have failed to make the require contribution should do so on or
before March IS, 1985.
8* Just as the Special Master did not approve interroga-
tories proposed by the third-party plaintiffs to be served on
third-party defendant generators which were directed toward
Phase Two issues, third-party plaintiffs should not be subjected
to unnecessary discovery at this time relatin; to matters which
they may not intend to Introduce at the Phase One trial. Tor
example, third-party plaintiffs need only establish that a given
generator is responsible for a single shipment of hazardous
waste to the CCC site for purposes of establishing Phase One
"liability" of that generator. Thus, detailed discovery con-
cerning other shipments could be a Phase Two matter* Third-
-4-
-------
party defendant generators ere entitled, however* to discover
whet evidence third-party plaintiffs intend to introduce in
Phase One. Therefore# in lieu of requiring third-party plain-
tiffs to answer detailed Interrogatories as to all information
known with respect to each generator, third-party plaintiffs
should be required to summar ixe the contentions it will attempt
to prove for purposes of establishing the P^.jse One "liability*
of each generator. The information provided should include the
following for each third-party defendant (o:*«r than insurance
companies):
(~) name of the party;
(~) basis of liability fgenerator/transporter/other
(describe))j
(c) as to each act of liability for *r.;ch third-party
plaintiffs will introduce evidence in the phase One
trial:
(1) the date of the act;
(2) the Identity of the substance alleged to be
hazardous;
(3) the basis upon which the substance is alleged to
be hazardoust
(4) the source of the information (document/interrog-
atory answer/admission/depo«i:ion testimony,
etc.), with specific reference to numbers, pages,
etc. as applicable.
Such information shall be filed on or before March 22, 1985.
With this in mind, the Motion of Third-party Defendant Gates
Rubber Company For Leave to Propound Inter rogatories and
Requests For Production of Documents to Defendant Conservation
Chemical Company and all Third-Party Plaintiffs should be
denied.
-5-
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koMrt h/ Tryiiun
Special Aatyftr
PRCIL1CH* LEXTKSS t CARLISLE, P.C.
4635 WytridOtt*. Svjitt 210
Kansas City* Missouri .(4112
(816) 753-8885
6
-------
CEPTTPICATE OF SERVICE
I hereby certify that, on this 22 day of June, 1992 a true
and correct copy of the foregoing Motion and Memorandum in
Support to Quash Subpoena for Deposition and Protective Order,
was served by FAX, on the following counsel of record:
Berrien Sutton, Esq.
Sutton & Slocumb
305 West Dame Avenue
Penta Hotel Atlanta
5010
June 22, 1992
-------
CERTIFICATE OF SERVICE
This is to certify that, this Jun^^T 1992, I have served
the foregoing United States' Response to Defendants' Notice to
Produce counsel list by mailing a true and correct copy thereof
in a properly addressed, franked envelope to insure delivery.
Mr. Berrien L. Sutton, Esq.
Sutton & Slocumb
Post Office Box 496
305 W. Dame Avenue
Homerville, GA 3163 4
Alan Wolper, Esq.
Hunton & Williams
2500 One Atlanta Plaza
950 East Paces Ferry Road
Atlanta, GA 30326
Daniel S. Reinhardt, Esq.
5200 NationsBank Plaza
600 Peachtree Street, N.E.
Atlanta, GA 30308
IE, Trial Attorney
!RI
-------
U.S. Department of Justice
MNS:DSG
90-11-1-12
Washington. D.C. J0330
October 13, 1989
BY AIRBORNE EXPRESS
James R. Manspeaker, Clerk
United States District Court
for the District of Colorado
U.S. Courthouse
1929 Stout Street, Room C-145
Denver, Colorado 80294
«
Attention: Leslie
Re: Broderick Investment Co. v. Hartford Accident
& Indemnity Co;. Civil Action No. 86-2-1033
Dear Mr. Manspeaker:
Enclosed for filing in the above-captioned case please find
the original and one copy of the Motion of United States
Environmental Protection Agency to Quash Subpoenas, Memorandum in
support thereof, proposed Order, and Certificate of Service. It
is my understanding that Ms. Betsy Bedient in Judge Weinshienk's
chambers is awaiting the delivery of these filings. Thank you ¦
for your assistance in' this matter.
Sincerely,
Assistant Attorney General
Land and Natural Resources Division
Daniel S. Goodman, Attorney
Environmental Defense Section
Enclosures
cc: Counsel of Record
-------
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT. OF COLORADO
CIVIL ACTION NO; 86-Z-1033
. »r
BRODERICK INVESTMENT CO.,
Plaintiff,
vs.
HARTFORD ACCIDENT & INDEMNITY CO.,
Defendant.
MOTION OF THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
TO QUASH SUBPOENAS
Two employees of the United States Environmental Protection
Agency ("EPA"), Elisabeth Evans and Vera Moritz, as well as an
unnamed Custodian of Records of the EPA Denver Regional Office,
were served with subpoenas -commanding then to testify at the
trial in the above-captioned case. For the reasons set forth in
the attached Memorandum in Support of Motion of the United States
Environmental Protection Agency to Quash Subpoenas, and pursuant
to Fed. R. Civ. P. 45, EPA hereby moves to quash the trial
subpoenas served upon Ms, Evans, Ms. Moritz, and the Custodian of
Records.
Respectfully submitted,
RICHARD B. STEWART
Assistant Attorney General
- l -
-------
'C.
DANIEL S. GOODMAN
At^grney
Environmental Defense Section
Land and Natural Resources Division
United States Department of*Justice
10th and Pennsylvariia Avenue, N.W.
Washington, D.C. 20530
Telephone: (202) 633-3170
MICHAEL J. NORTON
Acting United States Attorney
JERRY R. ATENCI0
Deputy Chief, civil Division
Assistant United States Attorney
1200 Byron G. Rogers Federal Bldg.
Drawer 3615
1961 Stout Street
Denver, Colorado 80294
Telephone: (303) 844-2064
d- fafanuoT'p
OF COUNSEL:
GERALD H. YAMADA
Acting General Counsel
DONNELL L. NANTKES
Attorney
Office of General Counsel
U.S. Environmental Protection
Agency
401 M Street, S.W.
Washington, D.C,. 20460
JONAH M. STALLER
Assistant Regional Counsel
U.S. Environmental Protection
Agency
Region VIII
999 18th street, Suite 500
Denver, Colorado 80202-2405
Dated: October 13, 1989
- 2
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IN THE UNITED STATES DISTRICT COURT
FOR THE «l£TR&3L;OF COLORADO
CIVIL ACTIOJN NO. 8SrZ-1033
BRODERICK INVESTMENT CO.,
Plaintiff,
vs.
HARTFORD ACCIDENT & INDEMNITY CO. ,
Defendant.
MEMORANDUM IN SUPPORT OF MOTION
OF THE UNITED STATES ENVRlONMEtfTAL PROTECTION AGENCY
TO QUASH SUBPOENAS
iytftODUCTEOK
The United States Environmental Protection Agency ('"EPA")
seeks to quash subpoenas served oft EPA by a litigant in this
privaite lawsuit> to which EPA is not a party. Specifically, EPA
contends that (1) under the doctrine of United States ex rel
Touhv v. Raaen. 340 U.S. 462 (1951), the EPA employees cannot be
compelled to testify, since the employees have not been,
authorized to testify under applicable EPA regulations, and (2)
the caselav in this context holds that subpoena enforcement
proceedings are.actions against the United States that are barred
by the government's sovereign immunity. For both these reasons,
the subpoenas should be quashed.
- 1-
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FACTUAL BACKGROUND
This subpoena matter arises in the above-captioned private
civil action pending before this Court. As EPA understands the
underlying litigation, Broderick Investment Company and others
(collectively, "Broderick") have sued Hartford.Accident
Indemnity Company ("Hartford"), seeking a declaratory judgment
that.Hartford should be held liable under the terms of an
insurance policy for costs incurred by Broderick in investigating
and cleaning up a hazardous waste site (the Broderick Wood
Products site). See Letter from Susan T. Smith of Pryor, Carney
and Johnson, representing Hartford, to Jonah Staller, Assistant
Regional. Counsel, EPA, attached hereto as Attachment A.
Broderick is undertaking these response, costs pursuant to tj\e
terms of a Consent Decree into which it entered with EPA. See
United States v. Broderick Investment Co.. et al.. Civil Action
No, 86-Z-369,
In.response to Freedom of Information Act requests, EPA
provided Hartford with-extensive material from its files relating
to the site. Hartford apparently believes that these files
contain "admissions against interest" by Broderick that would
tend to disprove Hartford's liability under the terms of the
insurance policy. See Attachment A. Consequently, Hartford
indicated in its October 2 letter that the insurance company
would be requesting the testimony of several EPA employees to
obtain "confirmation of factual representations made and recorded
- 2 -
-------
by EPA investigators* and to "lay appropriate foundation for the
admission of EPA documents . ... . IdU. at. 2.
Meanwhile, on September 28, 1989, and October 3, 1989, this
Court issued trial subpoenas'to SPA employees Elisabeth Evans and
Vera Moritz and to an unnamed Custodian of Records of the EPA
Denver Regional Office. Copies of the subpoenas-are- attached
hereto as Attachment B. These subpoenas were served on EPA
during the weeks of October 2 and October 9, 1989 and commanded
the recipients to appear and testify before this Court on October
L5, 1989. 1
EPA responded to Hartford's October 2 letter requesting the
testimony of Ms. Evans, Ms. Moritz, and a custodian of records in
a letter dated October 11, 1989. See.Letter from Thomas A.
speicher, Regional Counsel, to Susan T. Smith, attached hereto as
Attachment. C. The Regional Counsel noted that EPA regulations
codified.at 40 C.F.R. Part 2, Subpart C govern the testimony of
EPA'employees in private litigation. A copy of these'-regulations
is attached hereto as Attachment 0. Uhder these regulations, the
Regional Counsel- noted,. no EPA: employee may testify about
information acquired during the course of performing official
duties unless the Agency's General Counsel or his designee
determines that.such testimony "would clearly be in the interests
of EPA.* . 40 C.F.R. § 2.404(a). As the General Counsel's
1 Pursuant to agreement of counsel, the return date of
these subpoenas was later postponed to October 20, i989, in order
to permit sufficient time for the parties to brief and the Court
to consider the instant motion to quash.
- J -
-------
designee, the Regional Counsel concluded in this case that the
requested testimony would not clearly be in the interests of EPA.
Attachment c at 1.
In explaining this determination, the Regional Counsel
explained the "overriding concern" that Agency employees would
"be divertfed from their official duties." Xd[. He noted that Ms.
Evans, as a remedial project manager, is presently engaged in
important duties managing the investigation and cleanup of the
California Gulch Superfund site near Leadville, Colorado. Id. at
2. The Regional Counsel further explained that as a staff
engineer, Ms. Moritz oversees the investigations and preliminary
assessments of potential Superfund sites. Finally, the
Regional Counsel added, the Custodian of Recprds is responsible
for overseeing the production of Administrative Records for
Superfund sites, "a task.critical to the Superfund enforcement
process." Id.
Although the Regional Counsel recognized that the time
required for any one employee to rtestify in private litigation
might not be., great,, he concluded that "the cumulative disruption
to EPA's mission would be severe if EPA employees had to testify
in private litigation every time requested." I£. In this
regard, the Regional Counsel noted that "[p]rivate litigation
which relates to EPA's activities is commonf,] and private
litigants often seek testimony from EPA employees.* I<|.
Consequently, the Regional Counsel concluded that "EPA must be
circumspect in evaluating requests for employee testimony." Id.
- 4 -
-------
Despite these compelling.considerations, the Regional
Counsel was not unmindful of the public interest, in the fair
adjudication of private lawsuits. Thus, the Regional Counsel
expressed a willingness tQrftirovii&g. Hartford with authenticated
copies of the documents referenced in Hartford's October 2
1
letter, in accordance with the procedures set forth at 40 C.F.R.
§ 2.406. Attachment C at 2. It is EPA's understanding that
Hartford has accepted the Agency's offer to provide such
authenticated documentary evidence. 2 Nevertheless, Hartford has
declined to withdraw its trial subpoenas voluntarily, thereby
necessitating the filing of the instant motion to quash.
ARGUMENT
I. The Subpoenas Must Be Quashed Because
Mo EPA Employee is Authorized to Testify.
EPA regulations, authorized by 5 U.S.C. § 301 and codified
at 40 C.F.R. Part 2, Subpart C (Attachment D), set forth the
procedures that EPA employees are required to follow when they
are subpoenaed to testify iri a private action about, information
that thev have; acquired in- the. course of the it official duties.
See 40 C.F.R. § 2.401. These regulations serve several purposes,
among which are ensuring that EPA employees' official time is
used only for official purposed and maintaining the impartiality
of EPA in private litigation. 40 C.F.R. § 2.401(c). see Boron
Oil Co. v. Downie. 873 F.2d 67, 69 (4th Cir. 1989); Davis
2 This documentary evidence would therefore appear to be
admissible in this lawsuit. See Fed. R. Evid. 803(8) and 901(7).
- 5 -
-------
Enterprises v. EPA. 877 F.2d 1181, 1184 (3d Cir. 1989). When an
EPA employee is subpoenaed in a private action, he must
immediately send a copy of the subpoena to the EPA General
Counsel or his designee. 40.'C.F.R. § 2.404(a). The General
Counsel or his designee (here, Mr. Speicher, the Regional
Counsel) then makes a determination whether compliance with the
subpoena would clearly be in the interests of EPA." Id. if the
General Counsel or his designee determines that compliance would
not clearly be in the Agency's interests, the employee must
respectfully refuse to testify. 40 C.F.R. § 2.404(b).
Regulations similar to those in 40 C.F.R. Part 2, Subpart C
were upheld by the United States Supreme Court in United states
ex pel. Touhv v. Raqen. 340 U.S. 462 (1951) ("Touhy'M. Relying
on its earlier decision in Boske v. Comincrore. 177 U.S. 459
(1900), the Supreme Court in Touhv.held that a local FBt agent
could not be found in contempt of court, for refusing to produce
subpoenaed documents when such refusal was based on a Department
of Justice regulation prohibiting disclosure of non-public
documents without the authorization of the.Attorney General. 340
U.S. at 468. The Supreme Court concluded that the Attorney
General's regulation was valid and that the employee had properly
refused to produce the requested papers:
When one considers the variety of information contained
in the files of any government department and the
possibilities of harm from unrestricted disclosure in
court, the usefulness, indeed the necessity, of
centralizing determination as to whether subpoenas
duces tecum will, be willingly obeyed or challenged is
obvious.
- 6 -
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Id.
This Court has consistently, followed the Touhv holding that
a federal employee cannot be compelled to obey a subpoena issued
in a private action to whiqh. the Government is not a party when
the employee's superiors determine, in accordance with the
procedures set xorth in the agency's regulations, .that he should
not comply. See, e.g.. Boatriqht v. Radiation Sterilizers, inc..
592 F. Supp. 1314, 1315 (D. Colo. 1984); Smith v. C.R.C. Builders
Co.. Inc.. 626 F. SUpp. 12, 13-14 (D. Golo. 1983). Likewise, the
Uqited States Court of Appeals for the Tenth Circuit has
regularly adhered to the Touhy principle. See Saunders v. Great
Western Sugar Co.. 396 F.2d 794 (10th Cir. 1968) (vacating
district court order compelling employees of the Small Business
Administration to comply with subpoenas issued by that court);
United States Steel. Corp. v. Mattinqlv. 663 F.2d 68 (10th Cir.
1980) (holding under Touhv and Saunders that, the district court
erred in compelling enforcement of ;a: subpoena directed against an
employee of the Bureau of Standairds).
Recently,, the United States Court of Appeals for the Fourth
Circuit followed Touhy and its progeny in reversing a federal
district court order compelling an EPA employee to appear and
testify in a private action to which the government was not a
party. Boron Oil Co. v. Downie. 873 F.2d at 69-70 (citing, inter
alia. this Court's decision in Smith v. C.R.C. Builders Co.).
The Fourth Circuit noted that
Touhy is part of an unbroken line of authority
which directly supports [the EPA employee's] contention
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that a federal employee may not be compelled to obey a
subpoena contrary to his federal employer's
instructions under valid agency regulations*
873 F.2d at 69. Indeed, the Fourth Circuit added, EPA has "a
valid and compelling interest", in keeping its employees "free to
conduct their official business without the distractions of
testifying- in private civil actions in which the^government has
no genuine interest." Id. at 71. Taking note of the "current
explosion in environmental litigation," the court echoed the
concerns expressed by the Regional' Counsel in the present case,
cautioning EPA
that a strict adherence to its internal regulations is
essential if it is to be successful in preventing its
expert employees from being targeted as potential
witnesses in private actions.
Id. at 72.
The strong public policy behind the Touhv doctrine was
further explained in another recent case in which a federal court
quashed subpoenas directed to EPA employees. Environmental
Enterprises. Inc. v. EPA. 664 F.. jSupp.. "585 (D.D.C. 1987). There,
the United States District Court for the District of Columbia
explained:
If . . . courts could so easily subpoena federal
officials, the officials might find themselves spending
all 6f . their time doing nothing but complying . . . and
thus tAey would have little opportunity to pursue their
important governmental responsibilities. Indeed, I
believe the EPA regulations . . . are conscientiously
designed ... to balance the work of the agency with
the desire to cooperate as much as Dossible with local
proceedings.
Id. at 586.
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Similar concerns were expressed by the district court in
Massachusetts in denying notions to compel the testimony of
employees of the Occupational Safety and Health Administration
("OSHA"):
Because of the nature of the programs it
administers and enforces, OSHA is particularly
vulnerable to" the demands of private parties-seeking
information acquired as a result of official
investigations concerning industrial accidents and
other mishaps in the workplace. If OSHA employees were
routinely permitted to testify in private civil suits,
significant loss of manpower hours would predictably
result.
Reynolds Metals Co. v. Crowther. 572 F. Supp. 288, 290 (D. Mass.
1982) . gee also Hotel Emplovees-Hotel Association Pension Fund
v. Timperio, 622 F. Supp. 606, 607 (S.D. Fla. 1985) (quashing
trial subpoenas served upon Department of Labor employees in
private litigation where the agency had determined, under its
regulations, that in light of "the limited agency resources
available to carry out the agency's congressionally mandated
duties, the overall public interest would be served in this case
by refrainincr from becoming involved in private litigation*) .
Numerous-other courts have also followed Touhv in holding
that a federal employee cannot be compelled to obey a subpoena
when the employee is prohibited from testifying under the
agency's regulation?. See, e.g.. swett v. scnenK, 792 l\2d 1447,
1451-52 (9th Cir. 1986); Giza v. Secretary of Health/ Education &
Welfare. 628 F.2d 748, 751 (1st Cir. 1980). §££ also Pnlted
states v. Biz2ard. 674 F.2d 1382, 13,8*7 (11th Cir.) (rejecting
constitutional challenge to Department of Justice's Touhv
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regulations) , cert, denied. 459 U.S. 973 (1982) ; Cates v. ltv
Aerospace Corp. . 480 F.2d 620, 623 (5th Cir. 1973) (in accordance
with Touhv. Navy regulations were "designed to centralize the
determination of whether a subpoena duces tecum will be obeyed or
challenged on the grounds of privilege") ; Davis v. Braswell Motor
Freight Lines. Inc.. 363 F.2d 600, 602 n.2 (5th Cir: 1966)
("Supreme Court recognized the validity of the 'housekeeping'
function" in Touhv). As the Ninth Circuit explained in Swett,
"the Touhv doctrine is jurisdictional" and precludes enforcement
against a federal employee of an order compelling him to testify,
regardless of the agency's reasons for precluding his testimony.
792 F.2d at 1452 (emphasis added).
Since the Regional Counsel's determination not to permit the
subpoenaed employees to testify was consistent with validly
promulgated EPA regulations, see 40 C.F.R. §.§ 2.401(c), 2.404(a),
it must be upheld under Touhv. Accordingly, this Court should
quash the three trial subpoenas served upon EPA's employees.
II. The Subpoenas Should Be Quashed in the Absence
of a Waiver of sovereign Immunity to the Extent
That They Constitute a Legal Proceeding
Against the United States.
The United States and its agencies are immune from suit
except to the extent that there has been an express waiver of
sovereign immunity. See, e.g.. Block v. North Dakota,. 461 U.S.
273, 287 (1983); United States v. Testan, 424 U.S. 392, 399
(1976); Armv & Air Force Exchange Service v. Sheehan. 456 U.S.
728, 734 (1982). Several courts have held that the doctrine of
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sovereign immunity applies tp circumstances similar to those
present here. In Environmental Enterprises. Ipc. v. EPA, a case
precisely on point, the district court quashed the contested
subpoenas, finding that th©.United States had not waived its
sovereign immunity. 664 F. Supp. at 586. The court saw "obvious
merit to the argument that federal officers should not be
subpoenaed to testify in . . . proceedings of which they are not
parties without their approval." Id- Similarly, in Boron Oil
Co. v. Downie. 873 F.2d at 71, the Fourth Circuit held that
'subpoena proceedings fall within the protection of sovereign
immunity even though they are technically against the federal
employee and not against the sovereign." See Davis Enterprise^
v. EPA. 877 F.2d at 1186 {noting that in Boron a "sovereign
immunity theory* was a "basis for the court's decision*).
Likewise, in Nationwide Investors v. Miller. 793 F.2d 1044
(9th cir. 1986), the Ninth. Circuit'affirmed the dismissal of a
garnishment action in which the testimony of a non-^pairty federal
employee had been ordered. The court held that since.the United
States had not waived its sovereign immunity/ the.district court
"lacked jurisdiction over the action against the federal
officer." Id. at 1048. See also Reynolds Metals Co. v.
crowther. 572 F. Supp. at 290 (invoking the sovereign immunity
doctrine to dismiss a contempt proceeding against two OSHA
employees who, pursuant to instructions from their superiors,
refused to comply with subpoenas in a private civil action);
United States v. McLeod. 385 F.2d 734 (5th Cir. 1967) (absent a
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waiver of sovereign immunity, federal officers cannot be
subpoenaed to testify before a state grand jury).
In short, there is now a substantial body of law
establishing that the doctrine, of sovereign immunity precludes
federal employees from being compelled to testify about their
official duties in private actions to which the United States is
not a party. Since there has been no waiver of sovereign
immunity here, the three subpoenas served upon EPA Region VIII
must be quashed because this Court lacks jurisdiction to enforce
them. 3
CONCLUSION
For the reasons stated above, the trial subpoenas issued by
this. Court oa:September 28., 1989 and October 3, 1989 to employees
of EPA Region VIII should be quashed in their entirety.
Respectfully submitted
RICHARD-B. STEWART
Assistant Attorney General
3 To the extent that Hartford seeks to challenge the
substance of the Regional Counsel's determination not to permit
EPA employees to testify, that determination may be challenged
only in a separate action brought pursuant to the Administrative
Procedure Act. See tiavis Enterprises v. EPA. 877 F.2d at
1184-86. Only if the Regional Counsel's decision were challenged
and set aside in such an action would tliese EPA employees be free
to comply with the subpoenas.
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DANIEL S. GOODMAN
attorney
Environmental Defense Section
Land and Natural Resources Division
United States Department of4 Justice
10th and Pennsylvania Avenue, N.w.
Washington, D.C. 20530
Telephone: (202) 633-3170
MICHAEL J. NORTON
Acting United States Attorney
JERRY R. ATENCIO
Deputy Chief, Civil Division
Assistant United States Attorney
1200 Byron G. Rogers Federal Bldg.
Drawer 3615
19.61 Stout Street
Denver, Colorado 80294
Telephone: (303) 844-2064
OF COUNSEL
GERALD H.YAMADA
Acting .General. Counsel
DONNELL L. NANTKES
Attorney
Office of General Counsel
U.S. Environmental Protection
Agency
401 M Street, S.W.
Washington, D.C. 20460
JONAH M. STALLER
Assistant. Regional Counsel
U.S. Environmental Protection
Agency
Region VIII
999 18th street, suite 500
Denver, Colorado 80202-2405
Dated: October 13, 1989
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CARR. KENNEDY..-PETERSON 8t FROST
a u»w conroMArioft
«ao neocupp omva
post o^picc qox aeo?
REDOING. CALIFORNIA 96099
TCUCPHONC (916) 222*2100
$3$ fx/Aft* I
fofyd W-*£i)
jovr: fW.-v
Attorneys for
CH2M Hill
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SACRAMENTO
-oO CH-
IRON MOUNTAIN MINES, INC- ,
Plaintiff,
vs.
R. JAMES DIEPENBROCK,. et al,;
Defendants.
NO. 321652
ORDER GRANTING MOTION
TO QUASH SUBPENA DUCES
TECUM.
The motions of CH2M. Hill and the. United. States of
America far an order quashing subpena duces tecum came on
regularly for hearing on May 15, 1985, in Department 23 of
the aboveren.titlea court. Dani-el S. Frost of the firm of
Carr, Kennedy, Peterson & Frost appeared as counsel for CH2M
Hill; R. Steven Lapham of the Attorney General's Office
appeared as counsel for the United States of America, anc
Gregory A. wuir of the firm of Klein, Wegis & Duggan,
appeared as counsel for plaintiff Iron Mountain Mines, Inc.,
the Honorable James .T.' Ford, Judge, presiding.-
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ROS
TtON
ttWS
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509<
Good c^use appearing therefor, it i.s hereby ordered
that the motions of CH2M Hill and the United States of
America are granted, arvd that the subpena duces tecun served
on CH2M Hill in the above natter is hereby quashed.
DATED: — •• - -JM
JUDGE OF THE SUPERIOR COURT
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BJWC
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PROOF Of SERVICE
I am a citizen of the United States and employed in Shasta
County, California; I am ovgJi the age of eighteen years and not a
party to the within action; my business address is 420 Reacliff
Drive, P. O. Box 2007, Redding, California 96099-20Q7; on this
date I served ..the
X By placing a true copy thereof enclosed in a sealed
envelope with postage thereon fully prepaid, in the
United States Post Office mail box at Redding,
California, addressed as set forth below.
By. personally delivering a true copy thereof to the
person and at the address set forth below.
GREGORY A., MUIR, Esq.
RALPH B. WTEGIS, Esq.
KLEIN, WEGIS & DUGGAN
P. O. Box 358
Bakersfield, CA 93-302-035
DONALD B. AYER
United.States Attorney
R. STEVEH LAPHAM
Assistant U.S. Attorney
3305 Federal Building
650- Capitol Mall
Sacramento, CA 95814
DSNirSE. J. FiSCIIER, .Esq.
WEIN.TRAUB, GEtiSHLEA, HARDY , ERICH & BROWN
1QO0..G Street, Suite 300
Sacramento, CA 95814
I declare under penalty of perjury that the foregoing is
true and correct.
Executed on May 20, , 1985 , at Redding, California.
DOROTHEA M. HEATH
3.
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DONALD B. AYER
United States Attorney
R. STEVEN LAPHAM
Assistant u. S. Attorney
3305 Federal Building
650 Capitol Mall
Sacramento, California 9531$
Telephone: (916) 440-2331
Attorneys for
IN THE SUPERIOR COURT FOR THE STATE OF CALIFORNIA
COUNTY OF SACRAMENTO
IRON MOUNTAIN MINES. INC. ) NO. 321652
Plaintiff, ) SPECIAL APPEARANCE,. NOTICE OF
) MOTION TO QUASH SUBPOENA DUCES
¦v. ) TECUM-
)
R. JAMES DIEPENBROCK, )
Defendant- )
TO: PLAINTIFF AND ITS ATTORNEY OF RECORD
PLEASE-TAKE NOTICE that on- April 9', 198-5 at 9:00 a.m. in
Department .,10 of the Sacramento SuE^erior- Court, or;'as soon' t'hereafte
as' the matter'can be-heard before this Honorable" Court, the United
States of America, appearing specially, and for the sole'purpose c:
this motion, will move, and hereby does move the court tor art order
quashing issuance and service of' a Subpoena Duces Tecum directed to
custodian of records, CH2M Hill.
Sa.id motion will be made on the grounds that:
1. The affidavit in support of the. Subpoena Duces-Tecum is
insufficient in that it fails to allege that the requested
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documents are material to the lawsuit for which production is
requested and that good cause exists for their production.
2. The Court lac^s. jurisdiction to order production of the
subpoenaed records by reason of the sovereign immunity of the
United 3-tates.
3. Release of the requested information is prohibited by
Privacy Act (5 U.S.C. Section 552a(b) and by 40 C.F.R. Sections
2 .100 et seq.)
Said mot.ion will be based on this notice, the declaration c:
Harry Seraydarian attached hereto and upon the accompanying
memorandum of points and authorities.
DATED:
DONALD.B. AYER
United States Attornev
_ „ H. STEVEN LAPHAV
Oy ; ; .
R. STEVEN LAPHAM
Assistant U. S Attornev
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1 DONALD B. AYER
United States Attorney
2 R. STEVEN LAPHAM
Assistant u. s. Attorney.'
3 3305 Federal Building
650 Capitol Mall
4 Sacramento, California 958,14
Telephone: (9161 440-2331
5
6 Attorneys for
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8 IN THE SUPERIOR COURT FOR THE STATE OF CALIFORNIA
9 COUNTY OF SACRAMENTO
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11 IRON MOUNTAIN MINES, INC.
12 Plaintiff,
13 v-
14 Ri JAMES DIEPENBROCK,
15 ¦ . . . Defendant .
NO. 321652
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
MOTION TO QUASH SUBPOENA
DUCES TECUM
•16 facts
17 On February 22, 1965, the.subpoena Duces:Tecum attached hereto
13 as "Exhibit A was served by mail on CH2M Hill. The Subpoena
19 purportedly requires the Custodian, of Records for CH2K Hill to
20 produce nine categories relating to the .environmental effects of
21 operations Conducted by Iron Mountain Mines, Inc., the party av
22 subpoenaing tne documents. The date of production specified in the
23 subpoena is March 18, 1985, however, counsel, for Iron Mountain Mines
24 has consented to continue that date so that this motion to quash
25 may be heard.
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1 with these provisions the Subpoena Duces Tecum hag no force or
2 effect.
3 A. The Affidavit Fails To Allege That The
Requested Documents Are Material To The
4 Underlying Lawsuit
5 with regard to the materiality of the documents requested the
6 affidavit in support of the subpoena duces tecum states only that:
7 Said records and documents are a reliable
source, of information necessary for, a fair
8 and proper presentation of plaintiff's case.
9, The foregoing statement is no more than an unsupported legal
10 conclusion and insufficient to establish the materiality of the
11 documents to the underlying action. As the court stated in Johnson
12 v.. Superior Court, 258 Cal.App.2d 829, 835, 66 Cal. .Rptr. 134 (1968
13 The requirement (of good faith and
materiality] ... is not met by an
14 affidavit which is totally devoid of
any statement of facts. "The affiant
15 cannot rely, merely- upon the' legal • Conr
elusion, stated in general t;erms that
1 $ the des ired documentary' evidence . is'
relevant and mat&irial. " McClItchy
17 Newspaper .v. Superior Courts 2,6 .Cal. 2d
386;. 396 f 196 p:;2nd 944]; Ex Parte Clarke,
18 126 .C^il, 2.35, 241", *242. [58. p.546, 77 Am.
St. Rep. .176, 46 ALR 835]' the parties
19 seeking the issuance of a subpoena for
the production of documents, "must first
20 show the materiality of the desired
evidence and cannot obtain permission,
21 to search tftrougn all [his adversary's]
papers and records merely in the hope or
22 expectation that the investigation will
disclose favorable information (McClatchy
23 Newspaper v. Superior Court, supra at page
398)
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The court reached a,similar- conclusion in Pacific Auto Ins. Co. v.
Superior Court, 273 Cal.App.2d 61, 67, 77 Cal. Rptr. 836:
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1 [T}o.secure discovery by. use of a Subpoena
2 Duces Tecum, there must be a showing of more
3 than a wish fax the benefit of all information
4 in the adversary's files, and . . . the trial
5 court ^must be afforded the.factual d§ta by the
6 required affidavit to enable it to make an
7. informed ruling on the issues of materiality
8 and good cause.
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10 Plaintiff's statement of materiality fails to allege any
H theory currently known or imagined to which the requested documents
12 might pertain, but rather strongly suggests that plaintiff is
13 attempting to use the present civil action as a vehicle -for
14 obtaining a preview of potential enforcement action against it by
15 the Environmental Protection Agents. If plaintiff has a teason to
10 believe that the requested' documents will materially aid':.it in the
17 prosecution of;its- case it should be required to stiate that reason
1 g so-that the United'States', may ascertain whether any documents under
19 its control are relevant to such theory. See Johnson v. Superior
20 Court,. 258 Cal.App.;.2d 829, 837, 66 Cal. Rptr. 134 (1968.) (affidavit
21 which alleged that requested documents were "necessary to prove
22 allegations of the complaint" was insufficient to meet materiality
23 requirement); Flora Crane Service, Inc. v. Superior Court, 234 Cal.
24 App.2d 767, 787 (1965 ) (affidavit must show the requested documents
25 are relevant to an issue in the case not merely to the subject
20 matter of the action).
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1 B. The Affidavit Fails To Allege Good Cause
2 Good"cause is a separate and distinct requirement for issuance
3 of a Subpoena Duces Tecum, yith regard to good cause, the
4 affidavit in this case alleges only that:
5 Said records and; documents cannot be
obtained from any other source known
6 to plaintiff.
7 Such an averment does not constitute good cause within the meaning
8 of CCP- Section 1985. In People ex rel Department of Public Works
9 v. Younger, 5 Cal.App.3d 575,. 580, 86 Cal. Rptr. 237 (1970) the
10 court granted a motion to quash where the only allegation of good
11 cause was that the requested information was "not available from
12 any other source" . The court further held that the good cause;
13 requirement could not be met by an affidavit which was totally
14 devoid of any statement of facts. Similarly, in Seven-Uo .Bottling
15 go. v. Superior Court, 107. Cal.App.2d 75, 77 (1951) the. cour.t
15 rejected as- insutticient to meet the good cause requirement an
17 affidavit, that alleged merely that the. witness to whom. the. subpoena
18- was directed was the-only one who' could establish facts material to
19 the complaint.
20 Th-e foregoing cases are in accord with California Code of-
21 Civil Procedures Section 2036(a) which states in pertinent part:
22 A party required to show "good cause" to
obtain discovery under any provision of
23 .Chapter 2 (commencing with section 1985)
. . . shall .show specific facts justifying
24 discovery and that the matter is relevant
to the subject matter of the action, or
25 reasonably calculated to lead to the dis-
covery of admissible evidence. (Emphasis
26 added).
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1 As the Johnson court noted in the passage quoted above, conclusory
2 allegations are insufficient to meet the requirements of good cause
3 for the issuance of a SuJppoena Duces Tecum. Nor is the mere hope
4 of discovering favorable information sufficient good cause to
5 warrant *-the issuance of a Subpoena Duces Tecum.
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g THIS COURT LACKS JURISDICTION TO ORDER PRODUCTION
OF THE SUBPOENAED RECORDS BY REASON OF THE SOVEREIGN
10 IMMUNITY OF THE UNITED STATES
11
A. A Subpoena Duces Tecum Is A "Suit" For
12 The Purpose Of Asserting A Claim Of
Sovereign Immunity
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Where the United States is a party to a lawsuit, a state court
may apply its discovery rules to the United States because the
consent of the United States to suit is a waiver of sovereign
immunity which encompasses submission to discovery under the
rules of the forum. Where, however, the United States is not a
party to the lawsuit, it is absolutely immune from judicially
directed discovery absent some waiver of sovereign immunity. In
Civiletti v. Municipal Court, 116 Cal.App.3d 105, .174 Cal. Rptr. 83
(1981), a defendant in a murder prosecution issued a Subpoena Duces
Tecum to the Attorney General of the United States requiring him to
appear and produce documents which both parties assumed in their
briefs to consist of official records of the United States Departmen
of Justice. Noting the applicability of federal regulations
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contained in the Code of Federal Regulations the court stated:
An attempt to compel compliance with either
subpoena by the Attorney General founders
like the Titanic on the hard rock of
sovereign immunity* . . .
The Doctrine of Sovereign Immunity
prohibits any sort of judicial action
against the United States in the absence of
its consent, a consent usually manifested
by legislation. No such consent is asserted
herein.
Regarding 'the power. . . ... to issue
subpoenas to compel the attendance of
witnesses and the production of documents,
and to punish by fine and imprisonment' in
United States v. McCleod, supra, 385 F.2d
at pg. 752, the opinion nates that "'when
this power is asserted by a state sovereignty
over the federal sovereignty, it is in
contravention of our dual form of government
and in derogation of the powers of the federal
sovereignty. The state having the power tc>
subpoena may abuse that power .... This
power could embarrass, impede and obstruct the
administration of a federal agency;' '•
Id. at 109-10, ,1.72 Cal. Rptr. at 86,
The holding, in Civiletti is supported by the broad definition
which was early given to the term "suit". As the United States
Supreme Court noted in Westen v. City Counsel of Charleston, 2 PET.
447, 464 (1829):
The term [suit] is a very comprehensive
one, and . . . [applies] ... to any
proceeding in a court ... by which an
individual pursues that remedy in a court
. . . which the law affords him. The modes
of proceedings may be various, but if a
right is litigated between parties in a
court . . . the proceeding by which the
decision of the court is sought, is a "suit".
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1 More recently, the New Jersey Supreme Court has ruled that a
2 proceeding to enforce a Subpoena Duces Tecum is a "suit"-
3 Proceeding against .a third party for the
production or^do'cuaawts, whether the pro-
4 ceeding originates by subpoena or some more
plenary process becomes a "suit" in every
5 real -sens-e when a third party disputes the
right asserted.
State v. Murphy-, 175 A2d 622, 629 (1961). Other courts, have .
clearly held that a subpoena is "judicial process". Hunt Foods
Industries, Inc. v. FTC, 286 F.2d 803, 809 (9th Cir. 1961). See
United States v. Owlett, 15 F. Supp, 736 (D. Pa. 1936).
Where the object of the subpoena is to obtain official
information belonging to the United States, such a subpoena is,
both ,in; fact and in law a. "suit" against the United.States.
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B. The United States Has Not Waived
14 Sovereign Immunity
15 Commencing with 40 C.F.R. Section .2.100, Federal Regulations,
15 set .forth an-extensive procedure by-which- a private individual may
17 obtain EPA records.; Such regulations set forth to whom the
18 .requests: should be made, the time limitations applicable to such
19 requests and the requesting party's rights in the event of denial.
20 Court action is authorized only, in the event of. a. denial and, -in .
21. such cases, lurisqiction is vested solely in the federal/district
22 courts.
23 Such regulations constitute a limited waiver of sovereign
24 immunity which cannot be expanded to permit a general authorization
25 to obtain government documents by any means.
26 It has long been recognized that the United States may rely on
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1 federal reoulations to refuse tp supply information pursuant to a
2 Subpoena Duces-Tecum. In United States ex rel. Touhy v. Raqen. 340
3 U.S. 462, 71 s. Ct. 416 {1950), the United States Supreme Court
4 upheld the right of the Attorney General to order his subordinates
5 of the Department, of Justice to refuse to obey a Subpoena Duces
6 Tecum ordering the production of certain papers in the possession
7 of the Department- The Court stated:
8 When one considers the variety of information
contained in the files of any government
9 department and the possibility of harm from
unrestricted disclosure.in court, the use-
10 fullness, indeed the necessity, of centralizing
determination as to whether subpoenas duces
11 tecum will be willingly obeyed or challenged
is obvious.
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Id. at 468, 71. 3-. Cf. at 419
Lower federal courts have consistently recognized the validity
of this rule. In Colonial-Savings and Loan Association v. St. Paul
Fire & Marine InSi.Co., 89 F.R.D. .481 (E.D. Pa. 1980), the .'court
af firmed., the right of Federal-Home: Loan Board to refuse disclosure
under 12 C.F.R.- 505.5(b). The Court there cited with-approval
Marcoux v. Mid States Live Stock, 66 F.R.D. 573 (W.D. Mo. 1975), in
which similar reoulations. of the Comptroller of the Currency were
upheld. In Saunders v. Great Western Sugar Co., 396 F.2d 794 < 10th
Cir. X968), similar regulations of the Small Business
Administration were upheld.
The applicability of Touhy and its progeny was recognized by
the California Supreme Court in People v. Parhain^. 60. Cal.2nd 378,.
33 Cal Rptr. 497 (1963). In that case, an FBI agent refused to
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produce, records.pursuant to a Subpoena Duces Tecum basing his
refusal on the then existing Executive Order which prohibited such
disclosure. The Court Jfpun4 Order valid and applicable in the
courts of California.
Since Parham, California Courts have consistently recognized
that a Subpoena Duces Tecum directed to the FBI or other
governmental agency cannot force an agent to testify or produce
documents beyond the sfcope allowed by the Attorney General. In
In re Pratt, 112 Cal-App.3d 795, 881, 170 Cal. Rptr. 80, the. court
relied on Parham to quash a subpoena directed to the FBI holding
that the C.F.R. regulations regarding discovery of testimony and
documents in the possession of the Department of Justice had the
force and effect of lav and that the trial court was bound by the
Executive Order and could not hold the agency or agency in
contempt. See also, People v. Cowans; 111 Cal App. 3d 1.21, 168
Cal. Rptr,. 498 (1980)-; Civiletti v. Municipal Cfrurt, 116 Cal.App.3d
105, 174 Cal. Rptr. 83 (1981),
The foregoing cases confirfn the applicability of the
requirements and limitations set forth in 40 C.F.R. Section 2.100
et. seg. Because petitioner has not complied with these-
requirements this Court has no power to compel disclosure of the
requested infomration.
///
///
///
///
10
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1 III.
2 PRODUCTION OF THE REQUESTED DOCUMENTS IS
PROHIBITED BY THE FREEDOM OF INFORMATION
3 ACT (5 U.S.C. SECTION 552(b) AND BY THE
PRIVACY ACT (?^U.S*.4*»SECTION 552a(b)(ll)
4
A. The Freedom Of Information Act
5
Title 40 Section 2.118 of the Code of Federal' Regulations
6
incorporates the Freedom Of Information Act into its authorized
7
exemptions and states in pertinent part:
8
No request under 5 U.S.C. 552 for an existing, located
9 recoird in EPA'.s possession shall be denied by any EPA
office or employee unless the record contains (or its
10 disclosure would reveal) matters that are
11
(3) Specifically exempted from disclosure by statute
12 (other than 5 U.S.C. (b): Provided, That such statute:
.13 (i) Requires that the matters be withheld^from the
public in such a manner as to leave no discretion on the
14 issue, or
|5- (ii> Establishes particular criteria' for
withholding or. refers to particular types of matters to
16 be withheld;
17 (4.) Trade secrets ajid commercial or financial
information obtained from- a person and priviledge or
18 cohfidefitial (c Subpart'B)-;
19 ....
20 (7) Investigatory, records compiled for law-
enforcement* purposes, but only to the extent that the
21 production of such records would; (a) interfer with
enforcement proceedings . . . ; (e) disclose
22 investigative techniques and procedures . .
23 As set forth in the declaration of Harry Seraydarian, attached
$4 hereto as Exhibit B, subsections (4) and (7) are both, implicated by
25' plaintiffs' subpoena of EPA records although, with regard to
26 subsection (4), the United States defers to counsel for CH2M Hill
11
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With regard to subsection (3), if the subpoenaed documents contain
confidential business data which CH2M Hill considers to be of a
proprietary nature, the disclosure of such documents may be
prohibited by the Privacy Act as more fully set forth in the nexc
section*.-
The meaning of subsection (7) is clear. As the court noted in
Bristdl-Myers Co. v. Federal Trade Commission, 424 F.2d 935, 939
(D.e. Cir. 1-970), cert-, denied; 400 O.S. 824 (1970):
Congress intended to limit persons charged
with violation of the Federal Regulatory
Statutes to the discovery available to
persons charged with violations of federal
criminal law. The exemption prevents a
litigant from using [the Freedom Of Infor-
mation Act] to achieve indirectly any earlier
or greater access to investigatory files than
he would have directly.
Therefore, as previously noted, plaintiffs' subpoena duces tecum
constitutes an improper attempt" to obtain early discovery :of
possible enforcement action, by the Environmental ?rot6ction Agency.
B. The Privacy.Act
To the extent that plaintiffs' subpoena duces tecum
encompenses confidential business data which CH2M Hill considers to
be of a proprietary nature, disclosure of such documents may be
prohibited by the Privacy Act (5 (J.S.C. Section 552a(b)) which
provides in pertinent part:
No agency shall disclose any records which
is contained in a system of records by any
means of communication to any person, or to
another agency, except pursuant to a written
¦request by, or with the prior written request
of, the individuals to whom the record pertains,
unless disclosure of the record would be
12
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til) pursuant to the Order of a court of
competent jurisdiction.
Subpoenas may be issued*1>y answfctorney without prior court
authorization. Issuance of the subpoena is a ministerial act
performed by the court clerk, the legal sufficiency of which is
decided by the court at a later time, if challenged. Johnson v..
Superior Court, 258 Cal.App.2d 829, 835, 66 Cal. Rptr. 134 (1968).
It appears that the only exception to 5 U.S.C. Section 552a(b)
which is arguably applicable to petitioners' document request, is
subsection (11). Subsection (11) is not applicable, however, for
the reason that an attorney-issued subpoena is not a court order
within the meaning of that section. In Stiles v. Atlanta Gas Light
Co., 453 F. Supp. 798, 800 (N.D. Ga. 1978), the court stated:
Section 552a(b)(ll) provides for those
cases in which, for compelling reasons,
the court specifically directs that a
record be disclosed. Mere issuance in
discovery proceedings of. a subpoena -
which is alvays subject to the power of
the court to quash or limit - does net
meet this standard, [Citation omitted]
To so hold would permit precisely the type
of privacy invasion the Act sought to
prevent. (Emphasis in original).
Because petitioner has not requested an order of this court
pursuant to Section 552a(b)(ll), production of the requested
documents should not be required. Even if petitioner were to
request such an order, however, such a request should not be. granted.
for the reason that petitioner has. failed to meet the good cause and
materiality requirements for the subpoena of such documents.
13
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1 IV.
2 CONCLUSION
3 Because CH2M Hill is an agent of the United States for the
4 purpose of its investigation of Iron Mountain Mines, the United
5 States fras standing to challenge the subpoena issued herein. That
6 subpoena should be quashed on the grounds that (1) the affidavit ir
7 support, of the subpoena duces tecum is insufficient in that it
8 fails to allege that the requested documents are material to the
9 lawsuit for which production is requested and that good cause
10- exists for their production; (2) the court lacks jurisdiction to
11 order production of the subpoenaed records by reason of the
12 sovereign immunity of the United States; and (3) release of the
13 subpoenaed information is prohibited by the Freedom Of information
14 Act ana oy the Privacy Act. Therefore the United States
15 resDectfullv requests this court issue an order quashing/the
lg subpoena duces tecum served on CH2M Hill by plaintiffs herein.
3/
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DATED:
DONALD B. AYER
United states Attorney
20 . R-stkvenlapha,,
By.
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R.. STEVEN LAPHAM
Assistant U. S. Attorney
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
CIVIL ACTION NO. 86-Z-1033
BRODERICK INVESTMENT CO.,
Plaintiff,
vs.
HARTFORD ACCIDENT 6 INDEMNITY CO.,
Defendant.
MEMORANDUM IN SUPPORT OF MOTION
OF THE UNITED STATES ENVRIONMENTAL PROTECTION AGENCY
TO QUASH SUBPOENAS
INTRODUCTION
The United States Environmental Protection Agency ("EPA*)
seeks to quash subpoenas served on EPA by a litigant in this
private lawsuit,, to which EPA is not a party. Specifically, EPA
contends tha't (1) under the doctrine of United States ex ral.
Touhv v. Raaen. 340 U.S. 462 (1951), the EPA employees cannot be
compelled to testify, since the employees have not been
authorized to testify under applicable EPA regulations, and (2)
the caselaw in this context holds that subpoena enforcement
proceedings are actions against the United States that are barred
by the government's sovereign immunity. For both these reasons,
the subpoenas should be quashed.
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DANIEL S. GOODMAN
Attorney
Environmental Defense Section
Land and Natural Resources Division
United States Department of Justice
10th and Pennsylvania Avenue, N.w.
Washington, D.C. 20530
Telephone: (202) 633-3170
MICHAEL J. NORTON
Acting United States Attorney
JERRY R. ATENCIO
Deputy Chief, Civil Division
Assistant United States Attorney
1200 Byron <*. Rogers Federal Bldg.
Drawer 3615
1961 Stout Street
Denver, Colorado 80294
Telephone: (303) 844-2064
(I-
OF COUNSEL
GERALD H. YAMADA
Acting General Counsel
DONNELL L. NANTKES
Attorney
Office of General Counsel
U.S. Environmental Protection
Agency
401 M Street, S.W.
Washington, D.C. 20460
JONAH H. STALLER
Assistant Regional counsel
U.S. Environmental Protection
Agency
Region VXIX
999 18th Street, Suite 500
Denver, Colorado 80202-2405
Dated: October 13, 1989
2
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
CIVIL ACTION NO. 86-Z-1033
BRODERICK INVESTMENT CO.,
Plaintiff,
vs.
HARTFORD ACCIDENT & INDEMNITY CO.,
Defendant.
MOTION OF THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
TO QUASH SUBPOENAS
Two employees of the United States Environmental Protection
Agency ('EPA'), Elisabeth Evans and Vera Moritz, as well as an
unnamed Custodian of Records of the EPA Denver Regional Office,
were served with subpoenas commanding then to testify at the
trial in the above-captioned case. For the reasons set forth in
the attached Memorandum in Support of Motion of the United States
Environmental Protection Agency to Quash Subpoenas, and pursuant
to Fed. R. Civ. P. 45, EPA hereby moves to quash the trial
subpoenas served upon Ms. Evans, Ms. Moritz, and the Custodian of
Records.
Respectfully submitted,
RICHARD B. STEWART
Assistant Attorney General
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FACTUAL BACKGROUND
This subpoena matter arises in the above-captioned private
civil action pending before this Court. As EPA understands the
underlying litigation, Broderick Investment Company and others
(collectively, "Broderick") have sued Hartford Accident &
Indemnity Company ("Hartford"), seeking a declaratory judgment
that Hartford should be held liable under the terms of an
insurance policy for costs incurred by Broderick in investigating
and cleaning up a hazardous waste site (the Broderick Wood
Products site). See Letter from Susan T. Smith of Pryor, Carney
and Johnson, representing Hartford, to Jonah Staller, Assistant
Regional Counsel, EPA, attached hereto as Attachments.
Broderick is undertaking these response costs pursuant to the
terms of a Consent Decree into which it entered with EPA. See
united States v. Broderick Investment Co.. et al.. Civil Action
No. 86-2-369.
In response to Freedom of Information Act requests, EPA
provided Hartford with extensive material from its files relating
to the site. Hartford apparently believes that these files
contain "admissions against interest' by Broderick that would
tend to disprove Hartford's liability under the tens of the
insurance policy. See Attachment A. Consequently, Hartford
indicated in its October 2 letter that the insurance company
would be requesting the testimony of several EPA enployees to
obtain 'confirmation of factual representations made and recorded
2
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by EPA. investigators* and to "lay appropriate foundation for the
admission of EPA documents .... Id. at 2.
Meanwhile, on September 28, 1989, and October 3, 1989, this
Court issued trial subpoenas to EPA employees Elisabeth Evans and
Vera Moritz and to an unnamed Custodian of Records-of the EPA
Denver Regional Office. Copies of the subpoenas are attached
hereto as Attachment B. These subpoenas were served on EPA
during the weeks of October 2 and October 9, 1989 and commanded
the* recipients to appear and testify before this Court on October
16, 1989. 1
EPA responded to Hartford's October 2 letter requesting the
testimony of Ms. Evans, Ms. Morits, and a custodian of records in
a letter dated October 11, 1989. See Letter from Thomas A.
Speicher, Regional Counsel, to Susan T. Smith, attached hereto as
Attachment C. The Regional Counsel noted that EPA regulations
codified at 40 C.F.R. Part 2, Subpart C govern the testimony of
EPA employees in private litigation. A copy of these regulations
is attached hereto as Attachment D. Under these regulations, the
Regional Counsel noted, no EPA employee may testify about
information acquired during the course of performing official
duties unless the Agency's General Counsel or his designee
determines that such testimony 'would clearly be in the interests
of EPA." 40 C.F.R. S 2.404(a). As the General Counsel's
1 Pursuant to agreement of counsel, the return date of
these subpoenas was later postponed to October 20, 1989, in order
to permit sufficient time for the parties to brief and the Court
to consider the instant motion to quash.
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designee, the Regional Counsel concluded in this case that the
requested testimony would not clearly be in the interests of EPA.
Attachment C at 1.
In explaining this determination, the Regional Counsel
explained the "overriding concern* that Agency employees would
"be diverted from their official duties." I£. He noted that Ms.
Evans, as a remedial project manager, is presently engaged in
important duties managing the investigation and cleanup of the
California Gulch Superfund site near Leadville, Colorado. Id. at
2. The Regional Counsel further explained that as a staff
engineer, Ms. Moritz oversees the investigations and preliminary
assessments of potential Superfund sites. 2d. Finally, the
Regional Counsel added, the Custodian of Records is responsible
for overseeing the production of Administrative Records for
Superfund sites, "a task critical to the Superfund enforcement
process.* Id.
Although the Regional Counsel recognized that the time
required for any one employee to testify in private litigation
might not be great, he concluded that 'the cumulative disruption
to EPA's mission would be severe if EPA employees had to testify
in private litigation every time requested.* Id* In this
regard, the Regional Counsel noted that *[p]rivate litigation
which relates to EPA's activities is coamon[,J and private
litigants often seek testimony from EPA employees.* Id.
consequently, the Regional Counsel concluded that *EPA must be
circumspect in evaluating requests for employee testimony.* Id.
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Despite these compelling considerations, the Regional
Counsel was not unmindful of the public interest in the fair
adjudication of private lawsuits. Thus, the Regional Counsel
expressed a willingness to provide Hartford with authenticated
copies of the documents referenced in Hartford's October 2
letter, in accordance with the procedures set forth at 40 C.F.R.
§ 2.406. Attachment C at 2. It is EPA's understanding that
Hartford has accepted the Agency's offer to provide such
authenticated documentary evidence. 2 Nevertheless, Hartford has
declined to withdraw its trial subpoenas voluntarily, thereby
necessitating the filing of the instant motion to quash.
ARCTMENT
I. The Subpoenas Must Be Quashed Because
No EPA Employee is Authorized to Testify.
EPA regulations, authorized by 5 U.S.C. S 301 and codified
at 40 C.F.R. Part 2, Subpart C (Attachment D), set forth the
procedures that EPA employees are required to follow when they
are subpoenaed to testify in a private action about information
that they have acquired in the course of their official duties.
See 40 C.F.R. S 2.401. These regulations serve several purposes,
among which are ensuring that EPA employees' official tine is
used only for official purposes and maintaining the impartiality
of EPA in private litigation. 40 C.F.R. f 2.401(c). See Boron
Oil Co. v. Downie. 873 F.2d 67, 69 (4th Cir. 1989) r
2 This documentary evidence would therefore appear to be
admissible in this lawsuit. See Fed. R. Evid. 803(8) and 901(7)
- 5 -
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Enternrlsea v. EPA. 877 F.2d 1181, 1184 (3d Cir. 1989). When an
EPA employee is subpoenaed in a private action, he must
immediately send a copy of the subpoena to the EPA General
Counsel or his designee. 40 C.F.R. § 2.404(a). The General
Counsel or his designee (here, Mr. Speicher, the Regional
Counsel) then makes a determination 'whether compliance with the
subpoena would clearly be in the interests of EPA.* Id. If the
General Counsel or his designee determines that compliance would
not clearly be in the Agency's interests, the employee must
respectfully refuse to testify. 40 C.F.R. S 2.404(b).
Regulations similar to those in 40 C.F.R. Part 2, Subpart C
were upheld by the United States Supreme Court in United statea
ex rel. Touhv v. Raoen. 340 U.S. 462 (1951) ('Zsuhl'). Relying
on its earlier decision in Boske v. Comlncrore. 177 U.S. 459
(1900), the Supreme Court in Touhy held that a local FBI agent
could not be found in contempt of court for refusing to produce
subpoenaed documents when such refusal was based on a Department
of Justice regulation prohibiting disclosure of non-public
documents without the authorization of the Attorney General. 340
U.S. at 468. The Supreme Court concluded that the Attorney
General's regulation was valid and that the employee had properly
refused to produce the requested papers:
when one considers the variety of information contained
in the files of any government department and the
possibilities of harm from unrestricted disclosure in
court, the usefulness, indeed the necessity, of
centralizing determination as to whether subpoenas
duces tecum will be willingly obeyed or challenged is
obvious.
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Id.
This Court has consistently followed the Touhv holding that
a federal employee cannot be compelled to obey a subpoena issued
in a private action to which the government is not a party when
the employee's superiors determine, in accordance..with the
procedures set forth in the agency's regulations, that he should
not comply. SS&, S.q«.> Boatrloht v. Radiation Sterilizers. Inc..
592 F. supp. 1314, 1315 (D. Colo. 1984); Smith v. C.R.C. Builders
Co.. Inc.. 626 F. Supp. 12, 13-14 (D. Colo. 1983). Likewise, the
United States Court of Appeals for the Tenth Circuit has
regularly adhered to the Touhv principle. £fifi Saunders v. Great
Western Sugar Co.. 396 F.2d 794 (10th Cir. 1968) (vacating
district court order compelling employees of-the Snail Business
Administration to comply with subpoenas issued by that court);
United States Steel Corp. v. Mattinolv. 663 F.2d 68 (10th Cir.
1980) (holding under Touhv and Saunders that the district court
erred in compelling enforcement of a subpoena directed against an
employee of the Bureau of Standards).
Recently, the United States Court of Appeals for the Fourth
Circuit followed Touhv and its progeny in reversing a federal
district court order compelling an EPA employee to appear and
testify in a private action to which the government was not a
party. Boron Oil Co. v. Povnie. 873 F.2d at 69-70 (citing, IntflE
alia, this Court's decision in Smith v. c.R.c. Buildera Co.*.
The Fourth Circuit noted that
"Touhv is part of an unbroken line of authority
which directly supports [the EPA employee's] contention
- 7 -
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that a federal employee nay not be compelled to obey a
subpoena contrary to his federal employer's
instructions under valid agency regulations.
873 F.2d at 69. Indeed, the Fourth Circuit added, EPA has "a
valid and compelling interest" in keeping its employees "free to
conduct their official business without the distractions of
testifying in private civil actions in which the government has
no genuine interest." Id. at 71. Talcing note of the "current
explosion in environmental litigation," the court echoed the
concerns expressed by the Regional Counsel in the present case,
cautioning EPA
that a strict adherence to its internal regulations ia
essential if it is to be successful in preventing its.
expert employees from being targeted as potential
witnesses in private actions.
Id. at 72.
The strong public policy behind the Touhy doctrine was
further explained in another recent case in which a federal court
quashed subpoenas directed to EPA employees. Environmental
Enterprises. Inc. v. EPA. 664 P. Supp. 585 (D.D.C. 19*7). Therfe,
the United states District Court for the District Of Columbia -
explained:
If . . . courts could so easily subpoena federal
officials, the officials night find themselves spending
all of their time doing nothing but complying . . . a fid
thus they would have little opportunity to pursue thair
important governmental responsibilities, indeed, Z
believe the EPA regulations . . . are conscientiously
designed . . . to balance the work of the agency with
the desire to cooperate as much as possible vith local
proceedings.
li. at 586.
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Similar concerns were expressed by the district court in
Massachusetts in denying motions to compel the testimony of
employees of the Occupational Safety and Health Administration
("OSHA") :
Because of the nature of the programs it
administers and enforces, OSHA is particularly
vulnerable to the demands of private parties seeking
information acquired as a result of official
investigations concerning industrial accidents and
other mishaps in the workplace. If OSHA employees were
routinely permitted to testify in private civil suits,
significant loss of manpower hours would predictably
result.
Reynolds Metals Co. v. Crowther. 572 F. Supp. 288, 290 (D. Mass.
1982) . S£S alS9 Hotel Employees-Hotel Association Pension Fund
v. Timperlo. 622 F. Supp. 606,607 (S.D. Fla. 1985) (quashing
trial subpoenas served upon Department of Labor employees ih
private litigation where the agency had determined, under its
regulations, that in light of #the limited agency resources
available to carry out the agency's congressionallymandated
duties, the overall public interest would be served in this case
by refraining from becoming involved in private litigation*)*
Numerous other courts have also followed Touhv in holding
that a federal employee cannot be compelled to obey a subpoena
when the employee is prohibited from testifying under the
agency's regulations. See, e.g.. Swett v. Schenk. 792 F.2d 1447,
1451-52 (9th Cir. 1986)t clza v. Secretary of Health. Education &
Welfare. 628 F.2d 748, 751 (1st Cir. 1980). Sfifi United
States v. Blzzard. 674 F.2d 1382, 1387 (11th Cir.) (rejecting
constitutional challenge to Department of Justice's Touhv
- 9 -
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regulations), cert, denied. 459 U.S. 973 (1982); Cates v. ltv
Aerospace Corp.. 480 F.2d 620, 623 (5th Cir. 1973) (in accordance
with Touhv. Navy regulations were "designed to centralize the
determination of whether a subpoena duces tecum will be obeyed or
challenged on the grounds of privilege"); Davis v. Braswell Motor
Freight Lines. Inc.. 363 F.2d 600, 602 n.2 (5th Cir. 1966)
("Supreme Court recognized the validity of the 'housekeeping'
function" in Touhv). As the Ninth Circuit explained in Swett.
"the Touhv doctrine is jurisdictional* and precludes enforcement
against a federal employee of an order compelling him to testify,
regardless a£ ths. agency'? Precluding ilia testimony.
792 F.2d at 1452 (emphasis added).
Since the Regional Counsel's determination not to permit the
subpoenaed employees to testify was consistent with validly
promulgated EPA regulations, sea 40 C.F.R. §S 2.401(c), 2.404(a),
it must be upheld under Touhv. Accordingly, this Court should
quash the three trial subpoenas served upon EPA's employees.
II. The Subpoenas Should Be Quashed in the Absence
of a Waiver of Sovereign Immunity to the Extent
Ttfat They Constitute a Legal Proceeding
Against the United States. - - " v .
The United States and its agencies are immune from suit
except to the extent that there has been an express waiver of
sovereign insunity. See, e.g.. Block v. North Dakota. 461 U.S.
273, 287 (1983); United States v. Testan. 424 U.S. 392, 399
(1976); Armv & Air Force Exchange Service v. Shaahan. 456 U.S.
728, 734 (1982). Several courts have held that the doctrine of
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sovereign immunity applies to circumstances similar to those
present here. In Environmental Enterprises, inc. v. epa. a case
precisely on point, the district court quashed the contested
subpoenas, finding that the United States had not waived its
sovereign immunity. 664 F. Supp.' at 586. The court saw "obvious
merit to the argument that federal officers should not be
subpoenaed to testify in . . . proceedings of which they are not
parties without their approval.* Id* Similarly, in Boron oil
coi v. Downie. 873 P.2d at 71, the Fourth Circuit held that
"subpoena proceedings fall within the protection of sovereign
immunity even though they are technically against the federal
employee and not against the sovereign." Sfifl Davis Enterprises
877 F.2d at 1186 (noting that in Boron a 'sovereign,
immunity theory" was a "basis for the court's decision").
Likewise, in Nationwide Investors v. Miller. 793 F.2d 1044
(9th cir. 1986), the Ninth circuit affirmed the dismissal of a
garnishment action in which the testimony of a non-party federal
employee had been ordered. The court held that since the United
States had not waived its sovereign immunity, the district court
"lacked jurisdiction over the action against the federal
officer.* IjflL at 1048. Sfifi also Reynolds Metals Co. v.
crowther. 572 F. Supp. at 290 (invoking the sovereign immunity
doctrine to dismiss a contempt proceeding against two OSHA
employees who, pursuant to instructions from their superiors,
refused to comply with subpoenas in a private civil action);
united States v. McLeod. 385 F.2d 734 (5th Cir. 1967) (absent a
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waiver of sovereign immunity, federal officers cannot be
subpoenaed to testify before a state grand jury).
In short, there is now a substantial body of lav
establishing that the doctrine of sovereign immunity precludes
federal employees from being compelled to testify about their
official duties in private actions to which the United States is
not a party. Since there has been no waiver of sovereign
immunity here, the three subpoenas served upon EPA Region Vlix
must be quashed because this Court lacks jurisdiction to enforce
them. 3
cwcrasioN
For the reasons stated above, the trial subpoenas issued by
this Court on September 28, 1989 and October 3, 1989 to employees
of EPA Region VIII should be quashed in their entirety.
Respectfully submitted,
RICHARD B. STEWART
Assistant Attorney General
3 To the extent that Hartford seeks to challenge the
substance of the Regional Counsel's determination not to permit
EPA employees to testify, that determination may be challenged
only in a separate action brought pursuant to the Administrative
Procedure Act. Sfifi Davis Enterprises v. EPA. 877 P.2d at
1184-86. Only if the Regional counsel's decision were challenged
and set aside in such an action would these EPA employees be free
to comply with the subpoenas.
- 12 -
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DANIEL S. GOODMAN ~~
Attorney
Environmental Defense Section
Land and Natural Resources Division
United States Department of Justice
10th and Pennsylvania Avenue, N.w.
Washington, D.C. 20530
Telephone: (202) 633*3170
MICHAEL J. NORTON
Acting United States Attorney
JERRY R. ATENCIO
Deputy Chief, Civil Division
Assistant United States Attorney
1200 Byron G. Rogers Federal Bldg.
^Drawer 3615
1961 Stout Street
Denver, Colorado 80294
Telephone: (303) 844-2064
OF COUNSEL:
GERALD H. YAMADA
Acting General Counsel
DONNELL L. NANTKES
Attorney
Office of General Counsel
U.S. Environmental Protection
Agency
401 M Street, S.W.
Washington, D.C. 20460
JONAH M. STALLER
Assistant Regional Counsel
U.S. Environaental Protection
Agency
Region VIII
999 18th Street, Suite 500
Denver, Colorado 80202-2405
Dated: October 13, 1989
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