St. Louis company to pay $3.6M in environmental cleanup costs

Daily Record and the Kansas City Daily News-Press, Jan 30, 2008 by Donna Walter

The federal government will be reimbursed for close to $8 million for cleaning up hazardous waste at an old industrial recycling site located just north of downtown St. Louis.

In an agreement filed Monday with the St. Louis-based federal court, Solutia agreed to pay $3.6 million to the U.S. Environmental Protection Agency for costs associated with the cleanup of the Great Lakes Container Corp. site.

On Jan. 16, the EPA settled its claims against Mallinckrodt and Shell Oil Company. Mallinckrodt agreed to pay the government $3.95 million, and Shell agreed to pay $215,000.

"We think this is a fair result as to what the cleanup should have cost and Mallinckrodt's responsibility," said Joseph G. Nassif, one of the four Husch & Eppenberger attorneys who represented Mallinckrodt and Solutia.

The cleanup site was used as a drum-reclamation business beginning in 1949. In 1975, the facility was bought by Great Lakes Container, which continued the drum reclamation business until 1985, when it abandoned the facility, according to an EPA fact sheet. Great Lakes Container Corp. cleaned steel drums for other companies at the site.

Mallinckrodt operated the drum recycling plant between 1970 and 1976, according to court records at the 8th U.S. Circuit Court of Appeals.

Throughout the case, Mallinckrodt objected to the EPA's division of liability. In a 2003 court filing, the company noted that it was only one of three former owners of the site but was being asked to pay the lion's share of the cleanup costs.

Shell's share of the settlement represents its liability for arranging for the disposal of PCBs at the site. The oil company agreed in May to pay $228,630 of the cost of cleaning up lead- related hazardous materials.

The January agreements wrap up the EPA's case against the three companies it sued.

U.S. District Judge E. Richard Webber still must approve the settlements. The public has 30 days to comment before the judge can approve or deny the settlements.

The settlement with Solutia is also subject to approval by the U.S. Bankruptcy Court in the Southern District of New York. Solutia, the chemical business spun off from Monsanto, filed for Chapter 11 reorganization in December 2003.

The EPA originally sought close to $9.8 million from Solutia.

The Mallinckrodt settlement requires the company to give the EPA access to documents relating the Great Lakes Container site. The company may not withhold documents on the grounds that they are privileged, according to the settlement. The company may, however, redact confidential information.

The settlement also requires Mallinckrodt to retain all cleanup- related documents and records for five years.

If Mallinckrodt fails to allow the EPA access to its records, the company must pay $1,000 per violation for each day of noncompliance. If the company does not pay its share of cleanup costs in the 30 days after the settlement is approved, it must pay a penalty of $7,500 for each day the payment is late as well interest.

The EPA filed suit against Mallinckrodt, Shell and Solutia in October 2002, seeking costs of about $9.1 million, including prejudgment interest.

The St. Louis Metropolitan Sewer District owns a one-acre parcel of land adjacent to the cleanup site. In September 2004, Webber granted a consent decree between the government and MSD requiring MSD, as a passive landowner, to pay $230,000 to the EPA. That amounted to 2.5 percent of the cleanup costs. Defendant Mallinckrodt objected, but the 8th U.S. Circuit Court of Appeals upheld the agreement in March 2006.

Mallinckrodt and Solutia filed claims against third parties to recoup their share of the cleanup costs. The government and the two companies settled a majority of those claims.

Nassif said the companies still have a handful of third-party claims to pursue. One of the cases is against Anheuser-Busch, confirmed Armstrong Teasdale partner John Cowling.

Once the government's settlement is final, those companies will be approached and asked to contribute their share of the cleanup costs, Nassif said.