LOS ANGELES (CN) - A judge tentatively ruled Wednesday that Dole Food is not liable for actions of a developer that built a neighborhood on land contaminated by petroleum waste.
Residents of the Carousel neighborhood of Carson City sued Shell Oil and real estate developer Barclay Hollander in 2009, with support from environmental activist Erin Brockovich. Barclay is owned by multinational Dole Food Company.
The oil giant and developer knew that hundreds of homes would be built above three underground tanks when it transferred part of the site to the developer in the 1960s, the residents claimed.
Six years ago, they learned that oil and carcinogenic chemicals had leaked into soil under a residential area that almost 1,500 people call home.
Ultra-hazardous chemicals were found in the soil, including methane and benzene. Exposure to the chemicals can cause melanoma and lymphoma.
The residents entered into a $90 million settlement agreement with Shell this year. Shell also agreed to participate in a $146 million cleanup.
On Wednesday, Superior Court Judge William Highberger issued a tentative order that granted in full Dole Food's motion for summary judgment.
Highberger said during an afternoon hearing that he was not certain he would make the 7-page order final, giving attorneys on both sides an opportunity to make their case.
But in his order, Highberger rejected residents' argument that there would not be enough assets to award them judgment if Barclay were the only business liable for the pollution.
"Simply put, the fact that a corporation eventually winds down its business (as here) or experiences a long streak of money-losing years sapping its ability to pay tort damages ... does not mean that shareholders of such entities are liable to make up the difference," Highberger wrote.
Dole and its subsidiary Oceanic Properties could not be held liable, because at "no time" were they successors of Barclay, Highberger added.
The residents' attorney Robert Finnerty told Highberger during the hearing not to take the "drastic" step of granting summary judgment, saying the facts showed that Dole Food was liable for the contamination.
Finnerty, with Girardi Keese, said the defendants developed the property "knowing people were going to be harmed," and that it would be an "injustice" to rule in Dole's favor.
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