Attorneys say $37K settlement beats going to court
The City of Santa Monica settled a lawsuit not because it felt it was liable, but because it was cheaper than defending the case.
The settlement invokes a money argument frequently used in such cases. But where a public entity is involved, it raises broad implications over whether “nuisance” lawsuits can draw taxpayer money because it’s cheaper to settle than to fight.
The City Council recently agreed to give Phillips Petroleum $37,000 to be used to clean up a hazardous landfill site in Carson. But the city argues it had nothing to do with the 157-acre site, which is now emitting toxic materials into the groundwater.
“It was really a business decision,” said Deputy City Attorney Carol Kurtz. “In order to prove that we didn’t take our garbage there it would have cost tens of thousands of dollars.”
Phillips sued Santa Monica more than two years ago, claiming the city dumped its garbage at the landfill in the early 1960s, which contributed to the ground water pollution. Phillips, along with several oil companies, were sued by the landfill operator after it was found that the 157-acre site was polluted. The operator blamed the oil companies for dumping oil refinery waste there, causing the pollution.
But the oil companies turned around and blamed dozens of Southern California cities for contributing to the pollution by dumping their household waste at the Carson site. They sued between 30 and 50 cities in hopes that they would be reimbursed for the $2 million they paid in settlements to have the site cleaned up.
Santa Monica was one of the cities pegged. However, city officials can’t find any record that Santa Monica used the Carson landfill, which closed in 1965.
“The most effective way was to settle this for $37,000 because in the context of this case, which involves millions and millions of dollars, this is a very small amount,” said Assistant City Attorney Joe Lawrence. “We are just trying to get rid of what is a nuisance suit in as a cost effective fashion as possible.”
Kurtz said defending the case, which is pending in U.S. District Court, would have required at least a year’s worth of legal work, as well as the hiring of several experts to testify and research city records from nearly five decades ago.
“And there is always a risk in litigation that you are not going to succeed,” she said. “The presumption is that whatever was dumped would be toxic, but we would have argued that we didn’t take anything there.”
At the time, there were no restrictions on what could be dumped at landfills, and household waste, including batteries and other toxic items, contributed to the pollution.
“If you look at the volume of what was sent there, probably 96 percent of it was municipal waste,” said Deputy Attorney General Dennis Ragen, whose office named the oil companies as responsible for the clean up, as well as the owner of the site in the mid-1980s.
The oil companies admitted that by dumping oil refinery waste, they were liable for some of the pollution. They paid $2 million to the state, $2 million to the site owner and $6 million, which is being held in a state account, for clean up efforts.
But now they want some of it back. Federal law allows them to go after other responsible parties for the pollution, and often times taxpayers are hit with part of the tab.
“They are looking for contributions to their expenses,” Kurtz said. “They know they are going to get settlements.”
“They are looking for contributions to their expenses. They know they are going to get settlements.” — — CAROL KURTZ Santa Monica Deputy City Attorney
Only a few cities have refused to settle, Ragen said. Inglewood, Long Beach and L.A. County are reportedly the entities that plan to defend themselves in court.
“They think the oil companies are more liable than they are,” he said. “They have to argue that in court.”
The site’s current owner, a subsidiary of Glacier’s Union Pension Trustfund, bought the site from BKK Corp., the previous landfill operator. Once the site is cleaned up, the property next to I-405 will likely be sold to a commercial developer.
“We have an agreement with the site owner to clean it up,” Ragen said. “But it doesn’t have enough money.”
The estimated clean up costs are between $26 million and $52 million, according to Ragen. The site owner will have to pay the difference once the settlements and the lawsuits are toted up. That figure could be as high as $37 million, he said.
The California Department of Toxic Substances is overseeing the clean up efforts and is currently monitoring the site. Plans to begin a pilot program that involves a landfill gas extraction system should occur within the next few months, said department spokeswoman Jeanne Garcia. But it will be years before the clean up is finished, she added.
“They are looking to everyone who has dumped there and that’s a big order,” she said, adding 3M Corp. also paid $50,000 toward the clean up efforts. “When it’s cleaned up, it will be worth a lot.”
Hollywood producer Michael Ovitz once considered buying the property for a new NFL stadium, Ragen said.
The vacant site is guarded with a chain link fence and 24-hour security guards. Meanwhile, high levels of contaminants are seeping into the ground, including heavy metals like arsenic, lead and nickel. Traces of DDT, hydrocarbons and solvents also have been found there, Garcia said.
“The toxins were found in the late ’80s after the landfill was already closed,” she said. “You’ve got to remember, there were no regulations back then as to what could be dumped.”
Originally published in the Santa Monica Daily Press print edition on January 24, 2003. Read the original PDF.