U.S. Water News Online
MUSKEGON, Mich. -- A federal judge has ruled that a company
that once owned the polluted site of a former chemical plant does not
have to pay any of the $100 million estimated cost of cleaning up the
The recent decision by U.S. District Judge Douglas W. Hillman in
Grand Rapids is a major victory for Bestfoods Baking Co. and a defeat
for the federal government and the state of Michigan, The Muskegon
``We're disappointed,'' said Larry Johnson, Chicago-based
associate regional counsel for the U.S. Environmental Protection
Agency. He said no decision had been made on whether to file an
appeal by the Jan. 8 filing deadline.
Also disappointed was Kathy Cavanaugh, a Michigan assistant
``We were hoping that (Hillman) would find them liable and we
thought the facts were there to find them liable,'' she said.
Since 1989, the two governments have collaborated on a lawsuit
that seeks to recoup the cleanup costs from the 197-acre site's past
and present corporate owners.
Various companies, including Ott Chemical Co. and Story Chemical
Co., occupied the site in Muskegon County's Dalton Township between
1957 and 1977, when Story abandoned it, according to the U.S.
Environmental Protection Agency.
During that period, waste water from the plant was directed into
seepage lagoons, resulting in extensive contamination of groundwater
and soil. Unprotected tanks of phosgene gas were left onsite, as were
8,700 drums of lagoon sludge.
Phosgene, used as a chemical weapon in World War II, is a product
of the breakdown of chloroform. Exposure to humans can damage the
central nervous system.
Bestfoods, based in Englewood Cliffs, N.J., was called CPC
International Inc. when it bought Ott in 1965 and ran it as a wholly
owned subsidiary until 1972. The site was contaminated with chemical
wastes from the time production began in 1957 until at least 1972,
according to court documents.
But in his 52-page decision released Nov. 9, Hillman ruled that
Bestfoods is not responsible for any of that contamination. He said
the governments failed to prove that the parent company -- as opposed
to its subsidiary, Ott -- actually operated the plant and controlled
its waste-disposal practices.
Hillman's opinion reverses an order that he issued in 1991 holding
Bestfoods liable for much of the site's cleanup costs. In a landmark
1998 ruling, the U.S. Supreme Court tossed out the 1991 decision and
remanded the case back to Hillman for a retrial.
The high court devised stricter standards for deciding whether a
parent corporation is responsible for contamination caused by its
subsidiary, and ordered Hillman to use those standards in deciding
the Ott case.
In effect, he found that the New Jersey parent company did not
dictate day-to-day operations at the facility, even though it helped
devise overall policy for Ott.
``We feel ... that the judge applied the law properly as we see
it,'' said Grand Rapids lawyer Michael Smith, representing the
company. ``Bestfoods did not operate the site under the Supreme Court
The decision leaves only taxpayers -- and none of the original
property owners -- responsible for funding the costly cleanup.
The site's current owner, Aerojet General Corp. of Rancho Cordova,
Calif., signed a consent decree last year with the government
relieving it of responsibility. It hopes to deed clean portions of
the site to Muskegon County for redevelopment.
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