Federal Court Rules Against Metals Companies in Superfund Case

The federal court in Philadelphia ruled last week in favor of the United States in the government's lawsuit over the cleanup of the Metal Bank Superfund Site.

In the case United States v. Union Corporation, et al., Civil Action No. 80-1589, the judge ruled that the former and current site owners – Union Corporation, Metal Bank of America Inc., and Metal Bank owners and officers Irvin Schorsch and John Schorsch – are liable for the cleanup of the ten-acre site, located in Philadelphia.

From 1968 to 1972, Metal Bank salvaged scrap metal and drained oil from used transformers to reclaim copper parts. These activities resulted in oil spills into the soil, groundwater, and river, and soil and groundwater contamination of polychlorinated biphenyls (PCBs), polycyclic aromatic hydrocarbons (PAHs), heavy metals, and volatile organic compounds. In 1983, the Metal Bank site was added to the Superfund "National Priorities List."

The U.S. Department of Justice, on behalf of EPA, sued the current and former site owners and operators – Union Corp., Metal Bank of America, and Metal Bank owners and officers Irvin Schorsch and John Schorsch – under the Comprehensive Environmental Response Compensation and Liability Act and the Resource Conservation and Recovery Act. Superfund and RCRA require parties responsible for contaminated sites to perform or pay for the cleanup.

In 1987, EPA identified additional potentially responsible parties. Ten of these parties, all utility companies, signed a 1991 agreement with EPA to investigate the site and evaluate cleanup options. EPA is currently working with these parties to design and implement the site cleanup.

The defendant site owners declined to participate in the cleanup process. In May 1998, the court lifted the stay on the original lawsuit and later ordered the trial to be conducted in three separate phases: Phase One would determine whether defendants are liable; Phase Two would determine the appropriate cleanup actions and the government's recoverable costs; and Phase Three would determine the liability, if any, of the utilities and other third-party defendants.

In his January 21 opinion, the judge in the case, Judge James Giles, ruled that the defendants were liable for the cleanup, and that the government incurred response costs in connection with the contamination. The court found that the reclamation operations at the Metal Bank site were "very sloppy...the Site operators did not regard the oil as posing any health risks and were not careful about transformer draining and storage procedures," resulting in oil spills and soil contamination. In 1972, a leak or rupture from a 4,000 gallon underground storage tank (UST), located about 25 feet from the Delaware River, resulted in the release of a substantial amount of PCB-laden oil into the groundwater and river.

The court credited the government's "considerable evidence" of actual or threatened releases of hazardous substances from the Metal Bank site, including the 1972 UST oil spill and consistent sampling results showing the presence of PCBs, VOCs, PAHs, dioxins, furans, arsenic, chromium, lead and mercury in the soil and groundwater. The court found that this evidence showed that contaminants are migrating into the Delaware River and nearby mudflats, "a relatively undisturbed and environmentally sensitive area, providing an attractive habitat for a wide variety of aquatic organisms, including plant life, invertebrates, fish and birds."

According to local reports, Metal Bank and Union contended the contamination was not nearly as severe as claimed by the Justice Department and the U.S. Environmental Protection Agency, and that they successfully cleaned up the site in the early 1980s.

The court concluded that site contamination constituted an "imminent and substantial endangerment" to human health and the environment, noting especially the risk to subsistence fisherman and other consumers of PCB contaminated fish and shellfish.