Cities in Southland require waste firms to ink indemnifiers.

Southland cities, wary of being dragged into multimillion-dollar lawsuits over environmental waste cleanups, have begun pressing their residential waste collectors to indemnify them against any future lawsuits from the Environmental Protection Agency.

Lawndale, El Segundo, Alhambra and Manhattan Beach are among the dozens of cities statewide which are either asking for indemnification clauses in their municipal waste contracts or have already gotten such clauses, according to attorneys for the cities.

Rufus Young, an attorney with the law firm of Burke, Williams & Sorenson, which represents more than 25 local cities, said he will advise all his clients to include such clauses as garbage contracts come up for renewal to protect them from future lawsuits. "So far the city councils have found it is a prudent step to take," Young said.

If the trend continues, small independent haulers could be wiped out because they won't be able to provide indemnification themselves or get insurance for it, said John Kelly Astor, an attorney who represents 15 to 20 small- and mid-sized waste companies plus a number of California waste hauler trade associations. Only national companies like Oak Brook Ill.-based Waste Management Inc. are large enough to take such a risk, Astor said.

"Our main fear is that if cities continue to insist on this, there is only going to be two or three large companies left" to compete for city trash contracts, which are worth millions of dollars, Astor said. "It may mean small and mid-sized companies are put at a competitive disadvantage from which they can't recover."

Driving the indemnification clause frenzy are lawsuits like one brought last year by Southland companies against local cities for the $500 million clean-up of Operating Industries Landfill, a federal Superfund site in Monterey Park, Young said.

Sixty-four companies, including Atlantic Richfield Co., Unocal Corp. and Lockheed Corp., which dumped liquid waste at the site sued 29 cities whose residential garbage was also dumped there, seeking to get them to shoulder part of the clean-up cost.

U.S. District Court Judge William Byrne Jr. ruled last July that local cities could be held responsible for the removal of hazardous waste at the site, even though the cities argued they were only dumping municipal garbage, not industrial waste.

According to Mitchell Abbott, attorney for the cities, 10 of the cities have settled with the EPA and the companies for about $2 million. Five have been dropped from the suit. The remaining 14 cities' suits against the companies are scheduled to go to trial this summer.

"In light of this experience, I wouldn't be surprised if most cities were looking at their contracts and trying to decide how to protect themselves," Abbott said. "The decision (of where to dump the waste) is made by the hauler, not the city. And here the city gets hauled into a lawsuit 20 or 30 years down the line and is being asked to pay the costs of the clean-up."

Young said the only hazardous waste that cities produce are things like nail polish remover and household batteries which are thrown into the trash. Industrial and commercial companies generated most of the hazardous waste in dumps, Young said.

Yet, "there are cases all over the country where industrial polluters have served cities," Young said.

John Fellows, an attorney with Rutan & Tucker, a law firm which specializes in representing public agencies, said he is advising all the 15 cities he represents to put indemnity clauses in their next garbage contracts.

Fellows recently authored the clause which was in a municipal waste contract that Torrance-based Western Waste Industries signed with the city of Lawndale in December.

"What it says is 'the contractor shall indemnify the city for any detoxification or closure of a hazardous waste site under the Comprehensive Environmental Response & Liability Act,'" Fellows said. CERLA law imposes strict liability on waste generators and is used by the EPA to force companies and agencies to pay for cleaning up Superfund sites.

David Ludwig, environmental programs manager for the city of Manhattan Beach, said the city is asking for a liability clause in the waste contract it is negotiating with Western Waste.

The city is also asking that there be two separate contracts -- commercial and residential -- since commercial waste is more likely to contain hazardous waste. The separation of contracts "puts the city in a better position to negotiate with the EPA if a claim should come against the city," Ludwig said.

As to claims that the clause shuts small haulers out of the process, Ludwig said, small haulers should band together to create or purchase environmental liability insurance.

Astor, the attorney who represents small waste haulers, said, "It's my understanding the insurance industry isn't writing any environmental impairment coverage anymore." Only a few, huge waste companies which are self-insured or have millions of dollars of surplus, can take an environmental liability risk, he said.

But Astor said he doubts if even the big companies are rich enough to survive if they were held solely responsible for a Superfund site, noting that such a clean-up could cost upwards of $500 million.