American Ecology Announces Federal Appeals Court Dismisses Ward Valley Damages Suit.

Business Editors

BOISE, Idaho--(BUSINESS WIRE)--April 6, 2001

American Ecology Reaffirms Commitment to Seek Recovery of

Damages from State of California in Pending State Court Litigation 

Jack K. Lemley, Chairman, President and CEO of American Ecology Corporation (Nasdaq:ECOL), today announced that a lawsuit filed by subsidiary US Ecology, Inc. to recover damages from the federal government for its failure to complete the land transfer for the Ward Valley low-level radioactive waste ("LLRW") disposal project had been dismissed on appeal.

The ruling, issued on March 30, 2001 by the U.S. Court of Appeals for the Federal Circuit, held that sufficient evidence was not presented to establish that the federal government intended for any third party -- such as US Ecology -- to have rights under an alleged contract between the federal government and the State of California to purchase the Ward Valley site. The Court did not rule on the issues of contract formation or US Ecology's standing to appeal.

"While we are disappointed in the ruling, American Ecology believes its case against the State of California remains strong," Lemley commented. "US Ecology intends to vigorously pursue completion of the land acquisition by California or recovery of monetary damages in State Court," Lemley added.

In May 2000, US Ecology filed suit against the State of California in Superior Court for the County of San Diego seeking to compel the State to resume efforts to acquire the Ward Valley site. This pending suit also seeks recovery of costs incurred, interest, lost profits and certain legal expenses exceeding $162 million.

In October, 2000, California Superior Court Judge S. Charles Wickersham issued an Order granting California's motion to dismiss the case. US Ecology appealed that ruling, and briefing is now underway. Oral argument has not been set. "The State of California still has a contractual obligation to US Ecology and nothing in the recent federal court ruling changes that," Lemley concluded.

American Ecology Corporation, through its subsidiaries, provides a variety of radioactive, PCB, hazardous and non-hazardous waste services to commercial and government customers throughout the United States, such as nuclear power plants, medical and academic institutions and petro-chemical facilities. The company provides scientific solutions that protect people and the environment. Headquartered in Boise, Idaho, the Company is the oldest radioactive and hazardous waste services Company in the United States.

This press release contains forward-looking statements that are based on our current expectations and beliefs regarding pending litigation. There can be no assurance that the Company will recover its investment or earn a return on the Ward Valley project, since the outcome of litigation cannot be predicted. Failure to recover deferred site development costs would have a material adverse effect on the Company's financial condition. For further information, please refer to American Ecology Corporation's Reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission.