In a court filing earlier this month in support of abandoning the plant, Exide Chief Restructuring Officer Roy Messing said the site is "of inconsequential value and burdensome" because if not sold or abandoned, it would require "significant expenditures in connection with ongoing decommissioning and remediation obligations ... which would deplete the estate's limited resources while providing no benefit to the estate or its constituents."
Messing said in the declaration filed with the court that Exide spent more than $75 million closing the facility and complying with state Department of Toxic Substances Control requirements since 2017 and is currently spending about $750,000 a month to "maintain and secure" the facility.
During the two-day hearing, lawyers for Exide, California and U.S. government sparred over the condition of the site, and would keep the electricity on, pay the contractors maintaining the enclosure around the facility and keep air quality monitors on the facility's perimeter up and running if it were abandoned.
Peter Friedman, an attorney representing the state Department of Toxic Substances Control, said that Exide was foisting responsibility for the cleanup onto California taxpayers and state regulators. He said that "fugitive dust would be free to migrate off site and families living near the Vernon site could not count on being safe, if current safeguards were removed."
Attorneys for Exide suggested the Department of Toxic Substances Control could use the $26.4 million the company was required to set aside to keep the tent intact and prevent pollutants from getting out. Toxic Substance Control officials said that doing so would burn through that money quickly just maintaining the enclosure, and that all told, it will cost $72 million to make the site safe.
Exide's attorneys argued that the company would soon cease to exist and simply no longer has the money to pay for the cleanup, and that the facility would pose no imminent health threat because the enclosure surrounding it remains intact. They also pointed fingers back at the Department of Toxic Substances Control for being slow to act on the health risks at the site and for issuing a determination that it posed an imminent threat only three days before the hearing to approve the bankruptcy plan.
Sontchi asked California's attorney "how much can the government sit back and not take action to remediate ... and then say abandonment is not appropriate because it's an immediate, imminent, threat."
At one point during the hearing, Sontchi questioned how exposure to a dangerous element like lead that builds up in the body over time "somehow qualifies as imminent danger when everywhere you go in your life you're exposed to lead. We all have lead in our bodies. That's reality."
Young children are particularly vulnerable to lead because their brains are still developing and can suffer lifelong harm, including lower IQs, learning difficulties and behavioral problems, from even low levels of exposure to contaminated soil and dust, Dr. Gina Solomon, a University of California, San Francisco professor of medicine and researcher at the Public Health Institute, testified during Thursday's hearing.
The Department of Justice, for its part, said abandonment was a "last resort" and sought to blame the outcome on California's refusal to approve the settlement, which was signed by other states where Exide lead-smelting operations have left behind contamination, including Indiana, Texas and Pennsylvania.
California regulators let the facility in Vernon operate with only a temporary permit for more than three decades despite repeated violations of air pollution limits and hazardous waste rules. The plant shut down permanently in 2015 under a deal between Georgia-based Exide and the U.S. attorney's office for the Central District of California. The company, which at the time was undergoing a previous bankruptcy reorganization, admitted to years of environmental crimes but avoided prosecution by agreeing to close and demolish the plant and clean up the pollution.
Exide began working to close and clean the site in 2017, but stopped in March, citing the COVID-19 pandemic. The company filed for bankruptcy protection again in May with plans to liquidate its assets.
California regulators have said for years they were building a case and would go after the company and any other responsible parties to recoup funds for the cleanup. But there will no longer be an Exide to pursue.
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