Judge Blocks Environmental Suit Against Halaco

A U.S. Bankruptcy Court judge has blocked efforts by environmental groups to push forward with a lawsuit that accuses an Oxnard metal recycler of fouling the air and water near Ormond Beach.

The lawsuit, filed last year in federal court, was automatically put on hold when Halaco Engineering filed for Chapter 11 protection in July.

The company’s attorneys said without such protection, Halaco would have trouble complying with demands by the Regional Water Quality Control Board to clean up the property, perched on the edge of sensitive wetlands.

Attorneys for the Environmental Defense Center and the citizens group Channelkeeper urged a judge to allow their litigation to move forward, arguing that environmental concerns raised in their court papers needed to be quickly addressed.

But Judge Robin Riblet disagreed. She ruled Nov. 1 that Halaco should be allowed to continue working toward meeting the water board’s demands without having to contend with a legal challenge that would divert its attention and resources.

“We’ve got a company, a small company with 40-odd employees, that has been up to its eyeballs in negotiations and hearings with the regional board,” Riblet said during a two-hour hearing in Santa Barbara. “There is only so far [Halaco] can be stretched.”

Riblet ordered the parties to return in April to see how well Halaco has done in complying with a sweeping order to stop the soupy discharges from the plant that since 1970 have yielded 40-foot-high slag heaps near Ormond Beach.

The discharges, which amount to half a million gallons of contaminated water each month, are to end by December, and the slag heaps must be removed within 10 years.

Company officials estimate they will spend more than $1 million to meet a long list of technical requirements. They say that fighting the environmental lawsuit had strapped the company’s resources to the point that bankruptcy was the only option.

Halaco attorneys told Riblet that the company already has made substantial progress toward complying with the water board’s order but said there is still plenty of work to be done.

“We are here not to get out of the [water board’s order],” said Halaco’s attorney, David Shemano of Los Angeles. “We are here to comply with that order.”

The environmental lawsuit alleges two decades of violations of clean air and water laws at the plant, which has long been under fire by regulators, area residents and environmental activists.

Halaco set up shop in 1970 at Oxnard’s southern tip, an area flanked by wetlands that are home to such protected species as the tidewater goby and the California least tern.

Each year, millions of pounds of aluminum and magnesium scrap are melted at the plant. The recycled product is sold to soda bottlers and car companies. What is left has been pumped into waste ponds, where it builds up in slag heaps.

The water board’s order addresses the slag heap and related concerns. The environmental groups say their lawsuit focuses on other areas -- air pollution and storm water runoff -- not addressed by the regional board.