L.A. companies sue cities over Superfund site.

Southland companies responsible for the $500 million cleanup of a regional landfill will soon get their day in federal court to argue that cities which also dumped waste at the polluted site should foot part of their bill, a case viewed as an acid test of government's environmental liability.

Sixty-four industrial behemoths -- ranging from Atlantic Richfield Co. and Hughes Aircraft Co. to paint maker Dunn-Edwards Corp. -- expect a spring trial date for their civil lawsuit against 24 municipalities which discarded solid household trash at the Monterey Park landfill, now a Superfund site administered by the U.S. Environmental Protection Agency. The companies originally filed suit in December 1989, five years after the EPA took over and shuttered the 180-acre landfill adjacent to the Pomona (60) Freeway.

In a worst case scenario for the cities if they lose, they could conceivably have to cough up as much as 90 percent of the total clean up cost at the site, or a staggering $450 million.

What makes the lawsuit so weighty is that it marks one of the first times commercial polluters at a Superfund site have demanded that U.S. cities, not other industrial waste producers, subsidize a portion of the cleanup. Should Judge William Byrne Jr. side with the corporations, it would send a shock wave through other Superfund liability cases nationwide, while further squeezing Los Angeles County cities already pinched by recession.

"There are going to be a lot of eyes on this case," said one observer.

Congress passed the Superfund law in 1981 as a way to force polluters, without formal admissions of guilt, to cleanse more than 1,100 of America's worst toxic waste sites, including 14 in Los Angeles County.

While the law allows corporations targeted for cleanup to sue other entities suspected of dumping hazardous substances, the courts have never been asked to hold cities liable for disposal of their citizens' household waste.

During its 36 years of operations, the privately run Monterey Park dump legally accepted 15 million to 22 million tons of waste, roughly 1 million tons of that liquid materials generated by industrial and manufacturing processes. However, because the cities contributed the lion's share of waste at the Operating Industries Inc. landfill, they should be held accountable for part of the cleanup tab, the companies argue.

"A lot of the costs are directly attributable to the municipal waste," said Elizabeth Weaver, an attorney with the Century City branch of Kaye, Scholer, Fierman, Hays & Handler, which is representing the 64 industrial polluters. "We're only asking others to pay their fair share."

Added Vern Wotnick, Hughes Aircraft's regulatory affairs officer, "If a city, for example, is responsible for 90 percent of the waste at a Superfund site, they should have some responsibility (in paying cleanup costs). That's what this is about."

Under a 1988 agreement with the EPA, the companies vowed to pay $61 million for the first two phases of the cleanup, which is already under way. The $61 million -- the subject of the companies' pending suit -- is funding drainage and treatment of leachate (a yellowish hazardous liquid waste produced mainly by industrial dumping) and basic maintenance and monitoring of the landfill's irrigation, gas and road systems.

A subsequent arrangement last December committed the firms to spend $130 million on the cleanup's third phase: the removal and disposal of explosive methane gas and the spreading of a clay cover to seal the landfill. The concluding fourth and fifth phases -- costing an estimated $323 million -- involve removing contaminated groundwater under the site and then closing the landfill for good.

Meanwhile, the attorney representing the 24 cities maintained that local firms are trying to dodge, or at least defray, the "economic bullet" by muddying an already convoluted issue.

"The question is why this landfill is on the list of Superfund sites," said Mitchell Abbott, a partner at the downtown Los Angeles-based law firm of Richards, Watson & Gershon. "The answer is simple: The site is generating massive amounts of leachate caused by the companies' dumping of industrial liquids. If it wasn't for that, this wouldn't be a Superfund site. But the companies assert cleanup costs should be allocated based on the volume of waste, rather than its toxicity. It's nuts."

Abbott said there was a "90 percent" likelihood the bevy of companies would sue the cities to recover money for the rest of the cleanup cost if industry prevails in the upcoming trial. In the pending case, the court will first decide if the cities are liable. It could take a separate trial to determine how much the municipalities actually owe the 64 companies, which dumped solvents, refining byproducts, metal residues and the like at Monterey Park. No specific costs have been set by the companies.

Among the cities named in the suit -- which will be tried at downtown Los Angeles' federal courthouse, perhaps as early as next month -- are affluent Beverly Hills and San Marino, middle-class communities of Alhambra, Norwalk and Temple City, and some of the county's poorest municipalities like Compton and Cudahy.

Kevin Murphy, Alhambra's former city manager, said the municipalities are so nervous about the trial's outcome they have started putting pressure on their insurers to underwrite the potential costs.

"If the insurers won't do it, this lawsuit could bankrupt some of the cities," Murphy said, adding Alhambra could have to pay $30 million out of its $60 million annual budget to resolve the plaintiffs' cost recovery claims.

A key point that must be resolved in the trial is whether the cities technically "owned" the garbage they sent to Monterey Park. To limit their liability, city officials will try to prove they had no formal franchise agreement with private waste haulers. Another central element will be whether city waste is substantially hampering the cleanup.

Weaver, the attorney representing the 64 companies, said the sheer volume of household trash has made cleanup efforts nettlesome because of erosion and safety problems. She also pointed out that the methane gas her clients are committed to remove is the byproduct of the municipalities' decomposing garbage.

"It's also well accepted by scientists and engineers that municipal waste itself contains hazardous waste" from discarded containers of pesticides, paint cans and nail polish remover, she said. "We are just asking the court to look at the facts and establish an equitable allocation for costs."

Abbott, the cities' lawyer, reiterated it was the industrial dumping that brought the EPA in -- and that political motives are lurking.

"This lawsuit is part of a concerted plan by industry across the country to wreck Superfund by making it so unworkable and silly there will be a public bailout," he said.

Added Paramount City Manager Bill Holt, "The companies here are just being cavalier and greedy. They know they created the problem, not the banana peels and diapers."

Still, two decisions would seem to play in the companies' favor. The EPA, in a policy directive issued last month, said cities that dumped garbage at a Superfund site should fund 4 percent of the total cleanup. Also, Judge Byrne, in a pre-trial decision, has ruled that municipalities are not automatically exempt from Superfund liability.

Other plaintiff companies include aerospace contractors Allied Signal Inc., Lockheed Co. and McDonnell Douglas Corp., petroleum refiners Unocal Corp., Chevron Chemical Co. and Texaco as well as General Motors Corp., Procter & Gamble Manufacturing Co., Xerox Corp. and Uniroyal Goodrich Tire Co.

Approximately 250 companies were identified by the EPA as being liable for dumping at Monterey Park, though only one-quarter of them have joined the lawsuit.