Carwashes Get Huge Bills for Superfund Site Cleanup

So much time had passed that Jim Wilson nearly forgot he once operated a carwash in Sherman Oaks near the Cadillac dealership he has owned on Ventura Boulevard for more than 30 years.

But when he opened the mail recently, Wilson was painfully reminded of the Casa De Cascade Car Wash, closed in 1980 due to poor revenues.

Inside an envelope from the U.S. Environmental Protection Agency was a bill for $142,500, Wilson’s share of the cost of cleaning a Monterey Park toxic waste site that he had no idea existed. His contribution to that Superfund site? Dirt that had been washed from the cars, stored in a holding tank and later trucked there, the EPA said.

“What the hell is this?” the 68-year-old car dealer recalled saying that June morning. He said he had been careful over the years to comply with every environmental regulation on the books.

The EPA acknowledges that Wilson and about 680 area businesses and public agencies that recently received bills did nothing wrong. Instead, EPA officials said the group acted responsibly over the years by sending their waste--soapy carwash mud, petroleum products, industrial cleaning solvents or regular household garbage--to a licensed landfill built by Operating Industries Inc. in 1948.

But because the Monterey Park landfill has since been turned into a Superfund site, those billed must, under federal law, help foot the $600-million cleanup cost, officials said.

Their portion of the cost, officials said, is based on the volume of waste they sent to the site that was closed in 1984, and not its level of toxicity--something that has outraged carwash owners like Wilson.

The group’s predicament, common among thousands of businesses near closed-down landfills across the country, lies at the core of current efforts in Congress to reform the federal law framing the EPA’s Superfund program, which has a budget of $1.39 billion this year.

Critics say the Comprehensive Environmental Response, Compensation and Liability Act (known as CERCLA) unfairly punishes businesses--small and large--that are only remotely connected to Superfund toxic waste sites being cleaned by the EPA.

Enacted in 1980 as a result of New York’s Love Canal crisis, the law “is something that has not made sense for a long time,” said Drew Page, a San Diego attorney who has pushed for Superfund reform on behalf of the Downey-based Western Car Wash Assn. “It’s irrational and needs to be changed.”

‘This Bill Is Not a Penalty’

EPA officials and environmentalists defend the law, saying it is the only fair way to recover money needed to clean up the 1,436 Superfund sites that are polluting soil, ground water and drinking water sources throughout the country. Of those sites, hundreds are closed-down landfills.

“This bill is not a penalty,” said Arthur Haubenstock, an EPA attorney in charge of recovering money needed to clean the Monterey Park landfill. “We’re not saying [the 680 businesses] are immoral or illegal or wrong.”

Rather, “it’s just a question of who should have to pay for cleaning up this mess,” he said.

The site is bordered by the Pomona and Long Beach freeways, Haubenstock noted.

“There are a huge number of commuters who pass by it every day,” he said. “You’ve got gases from there percolating into people’s houses.”

The 680 businesses and municipalities are considered by the EPA to be minor polluters. Documented to have contributed between 2,100 and 110,000 gallons of waste to the landfill since 1948, their group includes carwashes, light manufacturers, auto repair shops, municipalities and a few high-profile corporations, including the Walt Disney Co.

Other companies and municipalities that dumped more than 110,000 gallons of waste at the 190-acre site are considered major polluters by the EPA.

That group--responsible for more than half of the heavy industrial waste causing problems at the Monterey Park site--was billed by the EPA during the late 1980s. Of that group of major polluters, 133 have agreed to pay a combined $300 million.

Though the 680 businesses and municipalities are not considered by the EPA as major sources of the toxic pollution in Monterey Park, under the liability law they can each be held liable for the entire $600-million cleanup cost of the Superfund site.

Should they decide to ignore the EPA’s recent notice, the minor polluters could also be sued by the group of major polluters for even more than what the federal agency is asking for.

Those companies--which, according to the EPA, include Arco, Chrysler Corp. and Times Mirror Co., which owns The Times--seek to recoup from minor polluters like Wilson some of the $300 million they have contributed. Attorneys for the major polluters say they have already sued and recovered about $75 million from other polluters who refused to pay the government.

The EPA advised the minor polluters to settle their bills, promising them legal protection from the corporations as a result and offering a 5% cost reduction if they paid right away.

Feeling trapped, carwash owners call their predicament unfair.

Their waste--essentially soapy mud--is on the cleaner side of the spectrum of industrial solvents, oil and city trash legally sent to the Monterey Park landfill for decades, the carwash owners contend.

Critics complain that the bills for carwash waste--ranging from $7,200 to $377,000 per business--are typical of how minor polluters are steamrollered by the federal law intended to clean up more toxic pollution.

Several carwash owners in the Los Angeles area have hired lawyers to fight their bills. Because the state has assured industry groups that their waste is not considered hazardous--unless engine steam-cleaning is part of their services--the carwashes are disputing the bills.

EPA attorneys said the businesses have until the end of October to pay.

Attorneys for several carwashes said their clients have been refused help from their insurance companies because they were not covered for toxic pollution before 1980, when the law went into effect. Many, like Wilson--who did not steam-clean engines--said they didn’t think they needed such coverage, given the state’s view of their waste.

State and federal officials, however, said what is considered nonhazardous by California is not necessarily viewed the same way by EPA officials.

Carwash owners complain that is unfair.

“We feel we have demonstrated for years that our [waste] is not hazardous,” said Sam Olivito, executive director of the 600-member Western Car Wash Assn.

“This law brings us into a group of polluters that we shouldn’t be in,” he said. “This could put a lot of our folks out of business.”

Mike Genewick, whose Carson carwash was billed for $103,000, said, “The law is ludicrous.”

Referring to an EPA estimate that does not foresee completely removing the toxic waste from the Monterey Park landfill for another 80 years, Genewick said: “The only people benefiting from this are the attorneys and the environmental consultants, because nothing is getting cleaned up.”

The provision that makes it possible for the EPA to hold a single party liable for the entire cleanup cost of a Superfund site is a tort law measure called “joint several and liability.” Essentially, it means that an ounce of pollution at a Superfund site linked to your business can make you legally responsible for the entire cleanup cost.

That aspect of Superfund cleanup and the fact that businesses can be punished retroactively for actions that were legal before 1980 are the chief sources of complaints about the EPA’s Superfund program.

Consistently upheld by federal courts, “the retroactive nature of the law is perhaps one of the most litigated issues of all time,” said Dallas attorney David Whitton, who has helped craft a number of Superfund reform bills that sit in congressional committees awaiting approval.

“What you did that was legal in the 1950s suddenly becomes illegal today,” he said. “That logic has affected a lot of small businesses and insurance companies.”

The rationale behind aggressively going after minor polluters is one of fairness, EPA officials said. Because toxic waste sites are so expensive to clean, it is necessary to spread the burden of cost evenly among those who have contributed, said Kathleen Johnson, who oversees the legalities of EPA cleanup efforts in the western United States.

“It is not fair to the major contributors for us to just dismiss the fact that there were hundreds of other people who brought in smaller amounts” of hazardous waste to landfills like the one in Monterey Park, she said.

The point of the “joint several and liability measure” is to scare polluters into paying what the EPA determines to be their fair share of the cost, Johnson said. Most businesses agree to pay the much smaller bill presented the EPA before the question of enforcing that provision arises, she said.

Critics complain that in cases where the connection to toxic pollution is either hazy or insignificant, the measure puts unfair pressure on businesses to fork over cash for a problem they are only minutely responsible for.

Many small businesses that pay the EPA do so because they are convinced the legal expense of fighting their bills would be even higher, critics say.

“When you hold that kind of hammer over people, it is not a level playing field,” said Kip Prahl, a Sacramento-based environmental consultant. “These are a lot of innocent people who have had their trash picked up like everybody else.”

But because they are businesses, he added, “the government takes a very heavy hand with them. Twenty years after the fact, all of a sudden the government comes back to them and says: ‘You did a very terrible thing.’ And they say: ‘What did I do?’ ”

Carwash Owner Says Business Has Fallen Off

That’s how Richard Duffy, owner of Burbank’s Lakeside Car Wash, responded to his $58,000 bill.

“I just don’t understand it,” he said. “I thought I did everything I was supposed to.”

With dirty cars not rolling in like they did shortly after he opened his shop in 1948, Duffy said he will be hard-pressed to come up with the money. His insurance company has also refused to help, he said.

On the advice of the Western Car Wash Assn., Duffy said he will probably ignore the bill and hope it will go away.

“I’m going to let nature take its course,” he said.

David Giannotti, a Los Angeles attorney who represents the group of large companies that have already settled with the EPA for $300 million, promised aggressive legal action in response to such an approach. Perhaps fearing reprisal from Giannotti’s group, some on the list of 680 have already settled their bill, EPA officials said.

Giannotti acknowledged that the position minor polluters are in is unfair, but “the law is what it is. They must pay their share as we move forward to what we hope is a final remedy” on the Monterey Park site.

“There are a number of things about CERCLA that just cry out for change,” said Giannotti, who represented one of the polluters involved in the Love Canal case during the late 1970s and has specialized in Superfund law ever since.

As it stands, the nature of the law “is one that forces [major polluters] to be sure to pull in as many others as they can” into the process of cleaning a Superfund site, he said. “Whether it’s the local mom-and-pop store or Exxon Oil.”

In the case of the landfill in Monterey Park, EPA officials have determined that about 1,500 additional Los Angeles-area companies--senders of even smaller amounts of waste than the 680 now targeted--can be tapped next to help pay for the cleanup.

Because they sent less than 2,100 gallons of waste to the landfill, their bills probably will be no greater than $7,200, EPA officials said.

But those businesses will still be liable for the entire $600-million cleanup cost and run the risk of lawsuits from other companies if they refuse to pay.