Firm Agrees to $250,000 Toxics Fine

In what city officials described as the largest penalty ever in a toxics waste case in Los Angeles, Todd Pacific Shipyards Corp. of San Pedro agreed Thursday to pay $250,000 for the illegal storage and disposal of wastes.

The fine was part of a settlement reached between the city and the ailing shipbuilding company that ends a 4-year-old criminal case involving the handling of nine electrical transformers filled with a coolant mixture of mineral oil and cancer-causing polychlorinated biphenyls, or PCBs.

While the transformers were being shipped to Mojave, where they were illegally burned in September, 1983, they leaked the dangerous PCBs in several locations across Los Angeles.

As part of the agreement, approved by Los Angeles Municipal Judge Malcolm Mackey, attorneys for the company entered no-contest pleas Thursday to 10 criminal misdemeanor charges and the city agreed to drop 269 additional misdemeanors against the company, its New Jersey-based parent corporation, Todd Shipyards Corp., and 11 employees of the parent and subsidiary companies.

Contingent on Court Approval

The dismissal of the charges is contingent on Todd obtaining permission within the next 60 days from the U.S. Bankruptcy Court in New Jersey to pay the fine. Todd, the nation’s largest independent shipbuilder, filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code last summer. A lawyer for the company said he expects that the settlement will be approved.

“Todd has had some difficult times in its operation, but this would come within its capability,” attorney Nowland Hong said. “It is in its interest to get this issue behind it and focus on reorganizing its business. That is one of the motivations behind this.”

If the city had prosecuted all 279 counts against the company and had won, Todd would have faced $14 million in fines. But city officials said they were pleased with the $250,000 fine and one-year probation, which also was imposed on the company.

“In the big picture, there were only two things going on: one long prolonged event of illegal storage and one egregious act of illegal disposal,” said Deputy City Atty. Steve Tekosky, who handled the case for the city. “We charged one count for each and every day . . . they were storing the materials. But there was only one act of illegal storage. . . . All considered, it was a very, very stiff fine.”

‘Wildly Exaggerated’

Todd officials could not be reached for comment, but Hong, speaking on behalf of the company, said the settlement substantiates the company’s ongoing contention that the charges were “wildly exaggerated” when they were filed by then-City Atty. Ira Reiner in 1983.

“A problem did occur. There is no doubt about that,” Hong said. “But when you compare what we we ultimately (agreed to), and what was initially sought, there is a vast difference. It was nowhere as severe or serious as represented by the initial prosecution.”

In a complaint filed against the company in November, 1983, the city alleged that Todd illegally stored the PCB-contaminated transformers at its San Pedro yard and then arranged to illegally dispose of them at a smelting facility in Mojave. Instead of disposing of the transformers at a dump licensed to accept the wastes, authorities said, the company turned the hazardous materials over to two machine-sales brokers who were not qualified to handle them.

Leaked From Transformers

Before reaching Mojave, the transformers were transported throughout the Los Angeles area by two men hired by the brokers, the complaint said. PCBs leaked from the transformers at the shipyard in San Pedro, on a residential street in Van Nuys where the truck drivers stopped to visit friends, and in Chatsworth, where the transformers were dismantled and the PCB-laden oil placed in 50-gallon drums, authorities said.

“There obviously was a very real potential danger,” Tekosky said. “Anytime you have an unlicensed, unregistered hauler hauling hazardous wastes and leaking them all over the city, there is potential for danger.”

Since the incident, Todd has spent more than $2.2 million to clean up PCB contamination at its San Pedro yard and at sites in Van Nuys, Chatsworth and Mojave, city officials said. Tekosky said the city was willing to settle the case because of the company’s cooperation in cleaning up the contamination and the lack of violations since 1983.