Occidental Agrees to Pay $98 Million in Love Canal Case : Environment: In a key civil lawsuit over buried toxic waste, the company will also take over the cleanup effort.

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Taking a big step toward closing a case that raised the nation’s concern about buried toxic waste, Occidental Chemical Corp. agreed Tuesday to pay the state of New York $98 million to settle one of the key civil lawsuits over Love Canal.

The company also agreed to take over monitoring and cleanup of the Niagara Falls, N.Y., neighborhood--a chore that the New York attorney general’s office estimates will cost an additional $25 million over the next 30 years.

Nearly 500 families in the Love Canal neighborhood, built atop nearly 22,000 tons of waste chemicals, evacuated in panic in 1978 after the toxic substances were blamed for a variety of birth defects and illnesses.


Occidental Chemical, a subsidiary of Los Angeles-based Occidental Petroleum Corp., bought Hooker Chemical and Plastics Corp. in 1968. Hooker had dumped most of the waste at the site during the 1940s and 1950s, before regulations for handling hazardous wastes were tightened. The canal was dug for an abandoned hydropower project before the turn of the century.

“We believe the settlement is fair and reasonable,” Thomas Truitt, an Occidental attorney, said at an announcement of the agreement in Buffalo, N.Y.

At one time, estimates of Occidental’s liability in the New York case ran as high as $700 million. But March 17, U.S. District Judge John T. Curtin in Buffalo rejected the state’s bid for punitive damages, which could have amounted to $270 million. In the end, the company might have been held liable at a trial for no more than $130 million, according to Timothy Gilles, spokesman for the state attorney general’s office.

Curtin is expected to accept the proposed settlement.

Of the cash award, due over the next three years, $95.5 million will go to the state treasury and $2.5 million will go to fund environmental projects in the Love Canal area. New York’s out-of-pocket costs in the cleanup and evacuation totaled $74 million, Gilles said.

Occidental still faces lawsuits from the federal government, the city of Niagara Falls and hundreds of former residents who contend that their health problems resulted from toxic materials in the area. The company has countersued the federal government, claiming that the Army dumped hazardous waste at the Love Canal site and should share the liability.

The federal civil suit seeks to recover $198 million from Occidental in remedial costs that include relocation of residents, cleaning of dioxin-contaminated sewers and creeks, conducting studies of contamination around the site, attorneys’ fees and interest.


“Their settlement does not directly affect the federal case,” Ana Cobian, a Justice Department spokesperson, said Tuesday.

However, Gilles said he expects the other lawsuits to be settled relatively soon. “This is the big enchilada here, the New York state claim,” Gilles said.

Wall Street analysts tended to agree. Occidental Petroleum shares added 12.5 cents to close at $19.125 on the New York Stock Exchange after the news.

“It’s a great step forward” for Occidental, said Mary Anne Sudol, a petroleum analyst and senior vice president at Fitch Investors Service. “It’s not all behind them, but it’s a big step.”

Sudol noted that Occidental has set aside reserves of at least $742 million for environmental liabilities in recent years, much of it in anticipation of costs from the Love Canal litigation. An Occidental spokesman confirmed Tuesday that the company does not expect to take any further charges because of the settlement.

For Lois Gibbs, a Love Canal resident who became a national activist against hazardous waste dumps, that was the downside of a settlement she otherwise applauded.


“It’s a good day that the taxpayers of New York finally got their money back,” said Gibbs, now executive director of the Falls Church, Va.-based Citizens Clearinghouse for Hazardous Waste. “But it’s a bad day because I think it’s pretty sad that Occidental didn’t get hurt by this lawsuit.

“If you go into a house and break all the lamps, you don’t get to just pay for the lamps,” Gibbs said. “You have to go to jail. But all Occidental has to do is to pay for the lamps.”

Love Canal: A Chronology

A chronology of events at Love Canal, the chemically contaminated neighborhood in Niagara Falls, N.Y.:

* 1894: William Love begins digging a hydropower canal from the Niagara River. The project is abandoned a few years later, but the ditch retains his name, Love Canal.

* 1942-53: Hooker Chemicals & Plastics Corp. dumps 22,000 tons of chemical waste at Love Canal.

* 1953: The city of Niagara Falls builds a school on property it acquired at Love Canal.

* 1968: Occidental Chemical Corp. acquires Hooker.

* Mid-1970s: Residents in and around Love Canal complain of chemicals seeping into yards and homes.


* 1978: An emergency declaration results in the evacuation of hundreds of families.

* 1979: The U.S. government sues Hooker for cleanup costs at Love Canal.

* 1980: New York joins the lawsuit and sues Hooker for punitive and environmental damages.

* 1988: U.S. District court rules that Occidental must help pay cleanup costs under the Superfund Act.

* 1991: The first of about 230 Love Canal homes, deemed safe by New York health officials, is refurbished and a new owner moves in.

* March 17, 1994: Federal court rules that Occidental does not have to pay New York punitive damages.

* June 21, 1994: Occidental agrees to pay $98 million in cleanup costs to end the lawsuit.