Court Tosses Fed Suit on Rocket Plant Cleanup

     WACO, Texas (CN) – A Texas federal judge has tossed the federal government’s lawsuit against ConocoPhillips over cleanup costs at a military rocket plant in McGregor, Texas.
     U.S. District Judge Walter S. Smith Jr. granted the oil company’s motion to dismiss, concluding the company is shielded from liability under the Comprehensive Environmental Response, Compensation and Liability Act because its performed its work under government contracts that held it harmless.
     “A government contractor may be absolved of liability for a CERCLA cleanup if its contract with the government includes a clause holding it harmless,” the 11-page order states. “The damages clause in the facilities contract would seem to absolve defendant of liability for any damage which occurs to government facilities at MWIRP McGregor.”
     The Naval Weapons Industrial Reserve Plant was first operated by the federal government during World War II.
     Although ownership was later transferred to private owners, federal government operations continued at the plant from 1952 to 1995.
     The Rocket Fuels Division of Phillips Petroleum Company – predecessor to ConocoPhillips – operated on the site from 1952 to 1958 under contract from the U.S. Air Force, designing and produced jet-assisted take-off rockets that provided extra thrust to large military aircraft and solid fuel rocket propellant.
     Manufacturing at the site generated hazardous water materials, including solvents, lubricants, waste oils, paint sludges and propellant. Several other companies operated at the site until 2007, when the property was conveyed to the city of McGregory.
     The U.S. Navy eventually found contaminated soil at the plant and found volatile organic compounds, explosives and perchlorate contaminating the groundwater, according to the federal government’s complaint.
     “Groundwater contamination extended beyond the 1995 plant boundaries in four areas,” the complaint alleged. “The primary chemicals of concern identified in surface water (primarily Harris Creek, Tributary M, Tributary 5, and Station Creek) included perchlorate.”
     In dismissing the suit, Smith relies on the language of two contracts, a rate-order production contract dated June 1953 and a “facilities” contract dated December 1953. The latter contract stated ConocoPhillips would not be liable for “any loss or damage to the facilities provided hereunder.”
     “Under the regulations in force at the time of the contract, the definition of ‘industrial facility’ included, but was not limited to, ‘real property and rights therein,'” Smith reasoned.
     Smith concluded that under the former contract, ConocoPhillips is excused of liability for “government property,” which covers more than just facilities.
     “These sections are broad enough, therefore, to protect Defendant from liability under CERCLA,” Smith wrote.
     He also noted that even if the contracts failed to excuse liability, he would have dismissed the suit anyway due to statutes of limitations barring the claims because remediation cost claims under CERCLA must be filed within six years of “initiation of physical on-site construction of the remedial action.”
     The federal government had stated it has investigated contamination at the site for 30 years and that the Navy took remedial action at the site by as late as 2000.
     “The government argues that its ‘Interim Stabilization Measures’ were removal not remedial actions,” Smith wrote. “However, the label is irrelevant because the actions taken by the government, including all of the trenches and lagoons and storage pools, falls within the definition of remedial.”
     McGregor is approximately 15 miles southwest of Waco.

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