Lyon Settles McColl Suits, Ending Case

Families who filed lawsuits over the McColl toxic waste dump have settled with the last remaining defendant, the William Lyon Co., for $3.5 million, according to documents approved Friday by a Superior Court judge.

The Lyon settlement, the largest single amount to date, brings to $12.28 million the total awarded to 141 families who claimed that they should have been told that living near the dump in northwest Fullerton was unsafe before they moved into their homes.

The settlement was certified Friday by Judge Jerrold S. Oliver. It appears to end--without a trial--nearly five years of litigation in the complex tangle of cases.

‘File Is Closed’

“The McColl file is closed,” one relieved court official, who asked not to be identified, said Friday.

Some of the previous settlements reached in the McColl case had been challenged before the state Supreme Court and state Court of Appeal. But since those challenges were made by attorneys for the Lyon Co., they are expected to be dropped, attorneys for the McColl families have said.

Attorneys for the plaintiffs, members of the families and Lyon Co. officials were all unavailable for comment on the settlement, which included an order barring any of the parties or their representatives from speaking to the media.

Judge Oliver, who has presided over each of the previous McColl settlements with developers, oil companies, and government agencies beginning last fall, also declined to be interviewed.

Can’t Sue Again

Terms of the settlement also bar the plaintiffs and their relatives from filing additional legal actions against the Lyon Co.

The settlement with Lyon and the Fullerton Hills Development Co., a joint venture between Lyon and Chevron Land & Development Co., will affect only those families living in the Meadows and Island neighborhoods near the McColl dump.

Individual families will receive proportionate shares of the settlement based on the length of time they have lived in the housing developments, their closeness to the dump and the number of family members affected.

Attorney Jeffrey Matz, who represents 122 of the 141 McColl families, previously has said that he expects all families to receive “at least $30,000 to $40,000.”

The McColl dump was created during World War II, when oil companies producing high-octane aviation fuel deposited refinery wastes in 12 sumps on land leased by oil industry consultant Eli McColl. Oil-drilling muds later were added to half the sumps, which McColl eventually had purchased.

Ringed by Homes

The dump now lies beneath a vacant field and part of a golf course at the Los Coyotes Country Club. It is surrounded on three sides by expensive homes.

Highly toxic sulfuric acid, benzene and arsenic have been found in the refinery sludge. Before a canvas covering and layers of soil were placed over the sumps, nearby residents complained that sulfur dioxide fumes caused headaches, nausea and respiratory problems, especially during the summer months.

In recent months, sludge has oozed to the surface in some spots on the fenced dump site, prompting renewed complaints from residents and efforts by state health officials and federal environmental experts to take steps to prevent movement of the congealed wastes.

A $26.5-million federal Superfund project was put in motion to remove the foul-smelling sludge and contaminated dirt to a disposal facility in Kern County in May, 1985. But a Superior Court judge blocked the plans, ordering the state to do an environmental impact study, expected to take another six to 10 months.

Other Suits Threatened

While the final settlement may avoid a trial in the numerous lawsuits filed over the dump, other residents have recently threatened the City of Fullerton with renewed claims.

However, Matz and attorneys for various defendants have said that it would be difficult for residents to initiate lawsuits now. They explained that the problem has been publicized for a long time, and officials have since 1982 been required to disclose the problems with the dump to all residents moving into the area.

Each of the defendants in the McColl cases has reached different settlements.

City officials, for example, agreed in March to pay $2.5 million to all 141 plaintiff families living in the Fullerton Crest, Meadows and Island tracts.

Meanwhile, the J.F. Shea Co., developer of Fullerton Crest, agreed to pay $3.2 million, the largest settlement before the Lyon agreement.

Seven oil companies have settled for $1.4 million, including the six companies that dumped refinery wastes in the dump in the 1940s. Orange County and the State of California have settled separately for a combined total of about $550,000.

One Defendant Bankrupt

Other defendants included a soil analysis firm, grading contractors and the owners of the country club. One defendant has filed for bankruptcy, but plaintiff attorneys were hopeful that some funds still could be attached through the courts.

Attorneys for the plaintiffs credited Judge Oliver with helping to avoid a lengthy trial over the dump. They said his order to nearly two dozen insurance carriers for the City of Fullerton to participate in a settlement conference was invaluable in resolving the issue.