Ownership of Trash Becomes Central Issue in Toxic-Waste Lawsuit : Environment: Corporations that agreed to help fund cleanup of landfill say governmental agencies that used the site should also be held liable for damages.

It is so esoteric a question of law that it seems almost flip to state it: Who owned the trash taken to a San Gabriel Valley landfill that, before it was closed eight years ago, became one of the worst toxic dumps in the nation?

But it is a principal issue in a trial that began this week in Los Angeles federal court. The answer is potentially worth hundreds of millions of dollars to scores of corporations and 14 cities, Los Angeles County and the state Department of Transportation.

A consortium of high-powered companies, including some of America’s biggest, contend that the governmental entities helped to create the toxic mess by either hauling or arranging for the trash to be taken to the dump.

While acknowledging that they contributed to the hazardous-waste problem--which will take about $500 million to solve--65 corporations are asking the court to make the governmental agencies pay for part of the cleanup cost.

In agreements with federal environmental officials, the corporations have committed to spending more than $164 million to help remedy problems created by a smelly mountain of trash at the 190-acre site, which eight years ago was added to the federal Superfund list. Now the companies want to recoup some of their expenses.

“It’s an attempt by corporate polluters to shift the cost of the cleanup to the taxpayer,” said Paramount City Manager William Holt, a spokesman for the cities.

“I do not think that Congress intended for the taxpayer to pick up the cost of Superfund cleanup when in this case all the taxpayers did was take their trash to the curb,” Holt said. “Banana peels and baby diapers don’t create Superfund sites.”

But an attorney for the corporations, Pierce O’Donnell, complained that the cities try to portray themselves as saintly when in fact they “contributed significantly to the environmental damage.”

“We’re not trying to bankrupt the cities,” he said. “We’re just saying they should pay their fair share. They ignored their duty for four to five decades. Now they have to pay the piper.”

After hearing the arcane debate over “ownership and possession” of hazardous waste, U.S. District Judge William M. Byrne Jr. said he would give a written order on the question when the trial resumes July 21.

“The problem is we’re dealing with a monstrosity of a statute,” Byrne said from the bench.

He said the 1980 Superfund law, which requires polluters to help finance cleanup of environmental disasters they create, is “so poorly, poorly drafted that there will be millions and millions of dollars spent to try to interpret it.”

One key issue in the trial is a section of the law that makes liable for cleanup costs anyone who arranges for disposal or transportation of hazardous waste that they “owned or possessed.”

Some city officials bristle at the notion of paying for an environmental problem they say their communities did not create. In fact, some cities deny ever taking trash to the dump; others say they took only a small amount.

“It’s an absurd lawsuit,” Bell City Manager John Bramble said. “They assume that because we issued an agreement to have our trash hauled, that we are somehow responsible.”

Officials of the cities, some with as few as 13,000 residents, are outraged that corporations such as General Motors, Mobil, Exxon and Georgia-Pacific would try to shift the blame. The lawsuit could result in “financial calamity” for the communities, said David P. Waite, one of the attorneys for the cities.

Before the Operating Industries Inc. dump was closed after a public outcry in 1984, oil companies, aerospace industries and waste haulers dumped millions of gallons of hazardous industrial liquids. Some of the waste contained cancer-causing or potentially cancer-causing substances. Municipal trash also was dumped there, and probably contained hazardous wastes from products such as paints, solvents and nail-polish remover.

Initially, 29 cities were named in the lawsuit. The plaintiffs have dropped five of them, and in the face of rising defense costs--now totaling $7.1 million--10 cities ranging from glitzy Beverly Hills to gritty South El Monte have agreed to settle, some agreeing to pay hundreds of thousands of dollars.

“It is better for our taxpayers . . . than to continue the burden of litigation,” said Holt of Paramount, which spent $252,660 on its defense before deciding to settle.

The corporations, O’Donnell said, have been trying to reach settlements since before they filed suit two years ago. O’Donnell said the corporations have proposed settlements in which the cities would pay a total of $80 million.

The 10 cities that agreed to settle--Bell Gardens, Norwalk, Paramount, Huntington Park, El Monte, Sierra Madre, South El Monte, San Marino, Beverly Hills and La Puente--will pay a total of about $2 million.

Henry Barbosa, the city attorney for Montebello and Lynwood, described the terms proposed for his cities--asking Montebello for $6 million and Lynwood for $4.5 million--as “totally out of line.”

“We don’t pay ransom and we don’t pay tribute,” Barbosa said. The cities, he said, made reasonable counteroffers, which were turned down.

In addition to Los Angeles County and Caltrans, 14 cities are continuing to fight: Alhambra, Bell, Commerce, Compton, Cudahy, Lynwood, Maywood, Montebello, Monterey Park, Rosemead, San Gabriel, South Gate, South Pasadena and Temple City.

Times staff writer Jill Gottesman contributed to this story.