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Friday, March 1, 2024 | Back issues
Courthouse News Service Courthouse News Service

Landfill Cleanup Is a Money Pit for Ex-Owners

CHICAGO (CN) - Owners and insurers connected to an Indiana landfill abandoned in the early 1980s may have to shell out additional funds for cleanup efforts, the 7th Circuit ruled.

From 1977 to 1982, Environmental Chemical and Conservation Co., or Enviro-Chem, operated waste-disposal and recycling sites near Zionsville, Ind. When the Blankert family closed the company, they left behind storage drums and other waste at three disposal sites.

The Environmental Protection Agency responded in 1983 by allocating $3 million to clean the area, and then sought reimbursement from the Blankerts, Enviro-Chem and 250 other parties.

Cleanup initially focused on the main Enviro-Chem site and north side sanitary landfill, but investigators later found pollution at a third location.

Samples of the soil and groundwater around the third site found elevated concentrations of volatile organic compounds (VOCs) and semi-volatile organic compounds (SVOCs). Water collected from nearby Finley Creek, which contributes to the Indianapolis water supply, also contained elevated levels of VOCs.

Responding to a 1996 EPA order, Enviro-Chem and several other companies helped reroute Finley Creek away from the third site.

Plans for cleanup of the third site continued into 1999, when the EPA directed groups responsible for the pollution to bankroll an Engineering Evaluation and Cost Analysis (EE/CA) of the area and reimburse past EPA response and oversight costs.

All obligations under the 1999 order were met in October 2000, but the work was not over.

In November 2002, the EPA called for the polluters to pay for implementation of the EE/CA plan.

When the Bankerts did not contribute, the trustees of the cleanup fund sued in 2008. They also sought a declaration that Auto Owners Mutual Insurance Co., which insured Enviro-Chem during its last days, must contribute to the fund.

U.S. District Judge Richard Young dismissed most of the trustees' claims after finding that it was too late to sue under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Indiana Environmental Legal Actions (ELA) Statute.

A three-judge panel of the 7th Circuit reversed Wednesday.

A cost-recovery claim related to the 2002 order is still possible as under Section 9607(a) of CERCLA, according to the ruling.

The 2008 complaint also scraped under the 10-year statute of limitations under the Indiana ELA, since the appellate panel found that this period began to run in 1998 when the trust first became obligated to clean under an EPA order.

Auto Owners failed to show that it does not have to cover the third site because of a default judgment and agreed judgment from the early 1990s, according to the ruling.

Because the judgments concerned only coverage of pollution from the main Enviro-Chem site, they are not preclusive, the court found.

The judges reinstated the trustees' suit and remanded the case to Indiana for further proceedings.

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