=======================Electronic Edition========================
RACHEL’S HAZARDOUS WASTE NEWS #358
—October 7, 1993—
News and resources for environmental justice.
——
Environmental Research Foundation
P.O. Box 5036, Annapolis, MD 21403
Fax (410) 263-8944; Internet: erf@igc.apc.org
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FIXING SUPERFUND–PART 2:
WHY SUPERFUND GENERATES SO MANY LAWSUITS
Congress passed the Superfund law in 1980, instructing EPA (U.S.
Environmental Protection Agency) to find uncontrolled chemical
dumps, identify the polluters, and make them pay for cleanup. In
Superfund lingo, the polluters are Potentially Responsible
Parties or “PRPs.” PRPs can include a site’s past or present
owners or operators; the people who created the waste in the
first place; and anyone who transported waste to the site.
If PRPs cannot be identified, or have gone out of business, the
federal government (i.e., the taxpayer) bears the cost of
cleanup, but the basic principle of Superfund is “the polluter
pays.”
To make sure that the polluter pays, Superfund contains language
that says the PRPs are subject to strict, joint, and several
liability.[1] That is to say, each individual PRP can be held
liable for the entire cost of cleanup at a site. Furthermore,
damaged parties need not prove that a PRP was “negligent,” merely
that the PRP contributed to the problem in some way. This means
that PRPs are liable for costs of cleanup of chemical dumping
that may have been perfectly legal (though not very smart) when
it occurred.
Superfund got off to a slow start, but by the late 1980s, many
dump sites had been identified, along with many PRPs. The PRPs
naturally asked their insurance companies to pay up. In most
cases, the insurance companies refused, saying their policies
only covered “sudden” events and did not cover chemicals seeping
into somebody’s drinking water for decades. So PRPs started
suing their insurance companies.
By the early 1990s, the insurance industry estimated that the
cost of total Superfund cleanup would range from $26 billion to
$213 billion in 1993 dollars.[2] The insurers weighed this
against all the money available for insurance, and found that
Superfund might actually bankrupt the insurance industry. At the
end of 1992, the Property Casualty Insurance Industry’s surplus,
its financial cushion against catastrophe, stood at about $165
billion.[3] That is for all risk, not just Superfund.
Since it is possibly fighting for its very existence, the
insurance industry has become aggressive about denying
responsibility for the cost of Superfund cleanups. First they
argued that Superfund problems aren’t damages covered by normal
liability insurance but rather are court-ordered mandates, which
aren’t covered. When the courts began rejecting that theory, in
1992 insurers developed a new legal argument which, if accepted
by the courts, would let the insurance industry off the hook
completely. Insurers are now arguing that the Superfund law
imposes “novel” responsibilities that weren’t foreseen when many
insurance policies were issued to PRPs; as a result, the argument
goes, the courts should nullify these insurance policies as a
matter of fairness and equity.[4] According to the Rand Institute
for Civil Justice,[5] 88 percent of the money spent by insurers
has gone to legal and related costs, and 12 percent to cleaning
up contaminated sites. Insurers spent an estimated $418 million
on Superfund in 1992.3
For their part, the major PRPs developed their own strategy for
discrediting Superfund. In some cases, it starts with simple
denial of responsibility. Secondly, as we have seen, PRPs sue
their insurance companies. Thirdly, PRPs sue other PRPs and
other entities, such as local governments and small businesses,
claiming they should share the burden of cleanup costs.
Denial of responsibility means, basically, stonewalling
pollution, even on your own property. For example, Monsanto’s
plant in Sauget, Illinois has over a dozen chemical dumps on it,
according to the WALL STREET JOURNAL, several of them containing
substantial quantities of cancer-causing PCBs, at concentrations
as high as 74,000 parts per million (ppm), or 7.4 percent.[6]
For years, Monsanto’s Sauget plant was the nation’s largest
single manufacturer of PCBs.
Monsanto officials insist that the PCBs on their property do not
necessarily belong to them. Anyone could have dumped PCBs there,
they say. All told, there are more than one million tons of
chemical wastes on Monsanto’s property–chlorinated pesticides,
PCBs and other chemicals that Monsanto manufactured on the site
for decades. Monsanto insists the wastes did not necessarily
come from their plant, located half a mile north of the dumps.
It is company policy to destroy waste records after 4 years.
Meanwhile the state of Illinois has spent 12 years and $1.3
million trying to get the Monsanto site listed on the federal
Superfund. An estimated 13 tons of chemical wastes leach off the
Monsanto site into the Mississippi River each year, according to
the WALL STREET JOURNAL.
Unocal Corporation denies responsibility for toxic wastes found
in 1991 at an oil tank farm in San Diego, Calif., that the firm
owned for 60 years. The present owner of part of the site has
had to sue Unocal in a federal court, alleging that toxic waste
found at the site doesn’t match chemicals that have been stored
in the tanks since the present owner bought them.
In Azusa, California, high levels of contaminants were found in
drinking water wells just south of an Aerojet Corp. rocket plant,
toxic solvents used by Aerojet and others in the area for
decades. It took 13 years of wrangling before Aerojet–without
admitting any wrongdoing–agreed to reimburse the federal
government for the cost of water studies.
But denial does not develop a political movement to overturn the
principle that “the polluter pays,” so industry developed a much
more aggressive strategy in the early 1990s. PRPs figured out
that, if they sued local governments and small businesses they
would rapidly build a political movement that would lobby for
Superfund “reform.”
About 25 percent of the sites on the Superfund list are municipal
solid waste landfills. Municipal solid waste is about 0.5
percent toxic materials, and this has given the big PRPs an
opportunity to sue everyone in sight. DuPont, Rohm & Haas Co.,
Texaco and others are suing 50 municipalities in federal court,
insisting that they each should contribute to the costs of
cleaning up a dump in Gloucester County, N.J. B.F. Goodrich and
Uniroyal have hauled 24 Connecticut municipalities into federal
court on the same basis. General Electric and Polaroid have sued
12 Massachusetts local governments for taking waste to a local
landfill.[7]
“The private sector is using its many years of experience with
this statute to hit the unknowing, little-trained cities in the
pocketbook,” says Kevin Murphy, city manager of Alhambra, Calif.,
one of 29 Los Angeles suburbs being asked by Occidental
Petroleum, Lockheed Corp., Proctor & Gamble and 61 other
companies to fund 90 percent of a huge landfill cleanup that
could cost as much as $800 million.
Even more effective at undermining support for Superfund have
been PRP lawsuits against small companies. Louis Petrone, a
Utica, N.Y., attorney has brought a lawsuit against 603
defendants on behalf of two big corporations –Special Metals and
Chesebrough-Pond’s, the cosmetic giant. The lawsuit has hit an
Elks Club, an exercise gym, a donut shop, a sausage factory and a
pair of nursing homes, in addition to 44 municipalities. Doreen
Merlino, owner of a two-table takeout pizza business was hit with
a 2-inch-thick lawsuit brought by Special Metals and
Chesebrough-Pond’s. It accused her of sending hazardous waste to
the landfill. The accusers didn’t know what kind of waste Ms.
Merlino had sent to the local dump, but their attorney said he
surmised that it might have included empty cleanser or pesticide
cans. The lawsuit asked $3000 from Ms. Merlino, with an offer to
settle for $1500 if she paid up within the month. Ms. Merlino
paid the $1500 because she could not afford to defend herself in
court. She cut her employees’ hours and stopped paying herself
to come up with the $1500. “You don’t have a choice,” she says.
“Small business can’t afford to fight these large corporations.”
Special Metals and Chesebrough-Pond’s have so far raised $5
million by this strategy.
“I have seen people sued –and settle –for waste no more
hazardous than cardboard,” says New Jersey Deputy Attorney
General John MacDonald. “The strategy is to make the entire
Superfund system so ineffective that one way or another, Congress
is going to be forced to scrap it.”
–Peter Montague, Ph.D.
Descriptor terms: superfund; cercla; prps; liability; lawsuits;
insurance industry; costs; monsanto; sauget; il; pcbs; water
pollution; mississippi river; unocal; san diego; ca; azusa;
aerojet; dupont; rohm & haas; texaco; bf goodrich; uniroyal;
general electric; ge; polaroid; alhambra; occidential petroleum;
lockheed; proctor & gamble; louis petrone; lawyers; attorneys;
special metals; chesebrough-pond’s; john macdonald; doreen
merlino;