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Sherwin-Williams Sued over $3.7M Cleanup

Tuesday, February 4, 2014

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Insurance giant AIG is demanding that the federal government and Sherwin-Williams pony up more than $3 million for cleanup reimbursement at a former munitions plant where bombs were painted during World War II.

In a federal-court lawsuit filed Thursday (Jan. 30), AIG Specialty Insurance Co. says it has reimbursed Illinois Tool Works $3,761,227 for a federally ordered cleanup of hazardous substances at the so-called Site 14.

AIG contends that the hazardous waste left on the site was "proximately caused by the United States' and/or Sherwin-Williams' ownership and/or operation of the Site."

Sherwin-Williams did not immediately respond to a request for comment Monday (Feb. 3).

Painting Bombshells

The 3.5-acre industrial facility is located within what is now the Crab Orchard National Wildlife Refuge Site near Marion, IL.

However, from 1942 to 1945, the Sherwin Williams Defense Corp. operated the Illinois Ordnance Plant, a bomb and munitions plant, at the site under a contract with the U.S. War Department. Sherwin-Williams painted and cleaned 500-pound bomb shells at the facilities.

Illinois Ordinance plant
WISU Public Broadcasting

In 1947, the U.S. built the Illinois Ordnance Plant to manufacture and produce bombs.

During that time, Sherwin-Williams used two large above-ground tanks to store solvents, including paint thinner, which was transported into buildings at the site through underground pipes. These tanks "were the property and responsibility" of the U.S. and/or Sherwin-Williams, AIG contends.

After the war, the site was transferred to the War Assets Administration, which leased many of the former ordnance plant buildings to industrial tenants. In 1947, Congress established the 43,000-acre Refuge and turned over the area to the Interior Department's Fish and Wildlife Service.

Fish & Wildlife was tasked with both managing the refuge and supporting private industrial activity on certain portions of the site.

Cleanups, Chemicals and Superfund

In 1947, a company called Diagraph began to use Site 14 for ink and stencil manufacturing. Both Sherwin-Williams and Diagraph used solvents at the site, Fish & Wildlife later determined.

Sherwin-Williams' two tanks remained on the site when Diagraph moved in; at that time, the tanks were about one-third full of a liquid, "which looked and smelled like solvent," the complaint says.

Diagraph never used the tanks and or assumed responsibility for them, according to the complaint.

Also after the war, the Interior Department and its contractors "conducted decontamination of many of the [ordnance] buildings, including those located at Site 14, using chemicals and cleaning solvents," AIG's complaint contends.

Site 14 cleanup
Marion Illinois History Preservation

An insurance company is suing the U.S. and Sherwin-Williams claiming it is responsible for millions of dollars in cleanup costs related to painting and cleaning operations for World War II-era bombs.

The agency "oversaw, managed, and otherwise executed control over the disposal of all wastes, both hazardous and non-hazardous, at Site 14," AIG's complaint states.

In 1986, Fish & Wildlife removed the two Sherwin-Williams tanks from Site 14. The next year, the entire Refuge property was added to the Superfund National Priorities list.

In 1988, an investigation identified seven Refuge sites (including Site 14) that needed remediation.

Remediation Orders

In 2001, a Fish & Wildlife Service Record of Decision for Site 14 determined that the area's soil and groundwater contained excessive amounts of toluene, benzene, ethylbenzene, xylenes, methylene chloride, lead and chromium. The Record of Decision spelled out a remediation plan.

In 2001, ITW acquired Diagraph—and the problems of Site 14.

The federal remediation plan included removing the Former Repour Building (the former Paint Storage Building), excavating and removing contaminated soil, and pumping and treating contaminated seepage water.

In 2002, the EPA issued a Unilateral Administrative Order to Diagraph (by then, ITW Diagraph). According to the AIG complaint, Diagraph and ITW complied and performed the remedial actions.

Underground Pipelines

During the cleanup, however, ITW's remedial contractor found two underground pipelines that originated in the former location of the above-ground storage tanks used by Sherwin-Williams, AIG said.

"Based on field observations and the results of soil groundwater sampling conducted prior to and during the remedial action, leaks in these pipelines were the primary source of soil and groundwater contamination at Site 14," the complaint alleges.

Nevertheless, ITW remediated the site under federal oversight and in compliance with all regulations. The EPA confirmed that field work at Site 14 was complete in 2011 and certified that all remedial actions at Site 14 were complete in 2012.

Authorizing Action

ITW's insurance policy with AIG covered the tab.

All of the cleanup costs, the lawsuit alleges, were consistent with the National Contingency Plan, which provides guidelines and procedures for responding to releases and threatened releases of hazardous substances, pollutants or contaminants.

The plan was revised under the Superfund legislation, officially known as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA).

Crab Orchard Site
U.S. Fish & Wildlife Service

The Crab Orchard National Wildlife Refuge was put on the National Priorities List in 1987. AIG says its policy holder, Illinois Tool Works, has spent over $3 million cleaning up the area.

Superfund created a tax on the chemical and petroleum industries and established broad federal authority to respond directly to releases or threatened releases of hazardous substances. It also established requirements concerning closed and abandoned hazardous waste sites and spelled out liability for releases of hazardous waste at these sites.

Three Reimbursement Requests

Now, AIG says, it has been trying unsuccessfully to get reimbursed by the government and Sherwin-Williams, which it says owned and operated the site when the contamination occurred.

AIG says it has demanded reimbursement three times:

  • On April 28, 2008, from the U.S. for $3.3 million for costs ITW incurred up to that date to implement the remedy and comply with the cleanup order;
  • On July 23, 2013, from the U.S. for $3,745,477.97 in costs incurred up to that date; and
  • On Jan. 28, 2013, from Sherwin-Williams for $3,675,079 in response costs.

According to the complaint, the U.S. and Sherwin-Williams have refused to reimburse ITW.

AIG is seeking recovery of past and future response costs and judicial declaration that the U.S. and Sherwin-Williams are liable for future response costs or damages.

   

Tagged categories: Cleanup; EPA; Government contracts; Hazardous waste; Lawsuits; Sherwin-Williams

Comment from regis doucette, (2/4/2014, 4:09 AM)

I might have missed some "fine point" here, but my main reaction as a private citizen is that of all the items that a national treasury should be supporting, it should be supporting costs associated with our national defense during a two front war that killed thousands of Americans. I see our budget dollars go to absurd expenditures, but now when what was our "arsenal of freedom" getd challenged, I feel that this is a politically charged item aimed at our very survival by "outsiders". Taken to extremes, every drop of protective coating on a warship will now be able to be used as a connection or justification for some foreign nation to sue because we killed one of their warriors or damaged an asset of theirs. Stop hiring lawyers to represent our nation since they only want to feather their lawyer profession with extra lawsuits. If we only hired carpenters to serve in Congress, we would not see hammer and nails on our eating tables or in our bathrooms next to the toilet paper. This lawsuit, however, does belong next to that toilet paper.


Comment from M. Halliwell, (2/4/2014, 11:05 AM)

I don't know that AIG will get much from S-W. They didn't have control over the site for the past 60 years and the environmental standards of the time were far, far different than they are today. If the site was on the Superfund list because it was contaminated in 1987, a considerable time before the EPA decided to issue the Administrative Order, then AIG may (and likely should) be able to claim some of expense back from the Superfund considering the site history. Unfortunately, I've had a lot of clients get caught buying a "clean" site only to have the regulations change and suddenly have a "dirty" site...it's a problem associated with our growing knowledge of environmental matters and contamination.


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