U.S. & Va. v. E.L Du Pont De Nemours & Co.

UNITED STATES OF AMERICA and COMMONWEALTH OF VIRGINIA,SECRETARY OF NATURAL RESOURCES, Plaintiffs, v. E.L du PONT de NEMOURS AND CO., Defendant.

Case No. 5:16-cv-00082

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA HARRISONBURG DIVISION

July 28, 2017

By: Michael F. Urbanski Chief U.S. District Judge

MEMORANDUM OPINION

Many years ago, between 1929 and 1950, defendant E.I. du Pont de Nemours and Co. ("DuPont") used mercury in the manufacture of acetate fibers at its plant bordering the South River in Waynesboro, Virginia. A quarter century later, mercury was detected in the South River downstream of the plant. Since that time, many have toiled to remedy the mercury contamination problem. The proposed Consent Decree filed in the instant case is a part of that effort, focusing on natural resource damages.

It is important to note at the outset that the proposed Consent Decree does not concern remediation of the mercury contamination under the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq.. Permitted corrective actions are ongoing to remediate the mercury released in Waynesboro. Both in the Joint Memorandum in Support of Motion to Enter, ECF No. 24, and in evidence presented at the public hearing on June 2, 2017, the parties outlined the substantial efforts being made to remediate the site of the mercury contamination.¹ These continuing remediation efforts are beyond the purview of the proposed Consent Decree, which exclusively concerns the separate issue of natural resource damages.

I.

On December 15, 2016, plaintiffs United States of America and Commonwealth of Virginia, Secretary of Natural Resources, filed a complaint against DuPont seeking the entry of an agreed Consent Decree. ECF No. 1. On April 20, 2017, after a period of notice and public comment, plaintiffs filed an Unopposed Motion to Enter the Consent Decree, along with a memorandum detailing the parameters of the proposed Consent Decree and responding to the public comments received. ECF Nos. 14, 15.

The proposed Consent Decree places three obligations on DuPont. First, DuPont will pay all unreimbursed costs associated with the assessment of natural resource damages, totaling $214,083.22.² Second, DuPont will pay a total of $42,069,916.78 to plaintiffs to be used for natural resource restoration projects. Third, DuPont will fund the renovation of the Front Royal fish hatchery to compensate for lost recreational fishing opportunities.³ The parties summarize the settlement reflected in the Consent Decree as follows:

Like any settlement, DuPont paid more than it thought required — approximately $57 million in total — and the Trustees recovered less than they would have liked. However, theTrustees believe the funds recovered and the proposed in-kind project by DuPont, implemented in accordance with the Restoration Plan, are sufficient to address the injuries identified during the assessment process.

Joint Suppl. Mem., ECF No. 39, at 6. The proposed Consent Decree is the largest natural resource damages settlement in Virginia history.

In exchange, DuPont will obtain a covenant not to sue or take administrative action for natural resource damages resulting from the Waynesboro plant mercury contamination known as of the date of lodging of the Consent Decree. The proposed Consent Decree reserves certain rights to plaintiffs, including future actions against DuPont relating to mercury cleanup, or costs or damages that do not fall within the definition of natural resource damages. The proposed Consent Decree also reserves to plaintiffs the right to pursue natural resource damages of an unknown type or greater magnitude than known at the time of the entry of the Consent Decree. The parties represent that:

Agreement was reached only after substantial scientific analysis of injuries caused by the mercury contamination, significant stakeholder input into the natural resource damage assessment process, and lengthy negotiations involving experienced counsel. The Decree provides for complete funding of the projects identified in the plan for restoring natural resources to their baseline condition, and avoids the significant expenditure of time and resources — as well as the delayed environmental benefit — that litigation would entail.

Mem. in Supp. of Unopposed Mot. to Enter Consent Decree, ECF No. 15, at 2.

Of significance to consideration of the approval of the proposed Consent Decree, in 1984, the Commonwealth of Virginia ("Virginia"), settled a claim with DuPont for natural resource damages and released DuPont from any claim for "damages incurred by theCommonwealth for injury to, destruction of, or loss of natural resources with respect to the presence of mercury in the South River and the South Fork of the Shenandoah River which may have been caused by DuPont's discharge of mercury into those rivers resulting from the manufacture of acetate fibers during the period from 1929 to 1950."⁴ The effect of the 1984 Release looms large in the legal risk-benefit analysis undergirding the proposed Consent Decree.

II.

On May 5, 2017, the court issued an order setting a public hearing on the proposed consent decree and directing the parties to address certain issues raised in the public comments, including: the amount of the settlement; the expenditure of monies on mussel restoration; the impact of the settlement on the Waynesboro area; and the expenditure of monies on the Front Royal fish hatchery for smallmouth bass and other species propagation versus a trout grow-out facility in Waynesboro. ECF No. 19. The court also requested information on site remediation.

The court held a hearing on June 2, 2017. The parties presented testimony from a number of witnesses, including Melanie Davenport, Virginia Permitting Division Director, Virginia Department of Environmental Quality ("VDEQ"); Michael Liberati, leading DuPont's efforts at remediating the mercury contamination at its former Waynesboro plant; Anne M. Condon, Natural Resource Damage Assessment and Restoration Biologist, United States Department of Interior, Fish and Wildlife Service ("USFWS"); Gary Martel, DeputyDirector, Virginia Department of Game and Inland Fisheries ("VDGIF"); Terry Short, Vice Mayor, City of Waynesboro; and Molly Ward, Secretary of Natural Resources, Commonwealth of Virginia. The court also heard public comments from interested citizens. In addition to information presented in open court, the court viewed three South River sites: (1) the Augusta Forestry Center in Crimora, Virginia, location of site-specific natural resource damages studies; (2) riverbank mercury remediation projects in Waynesboro's Constitution Park, adjacent to DuPont's former manufacturing facility; and (3) an example of a fishing access project off Lyndhurst Road in Waynesboro.

A.

Melanie Davenport, Director of the Permitting Division of the VDEQ, was the first witness to testify at the hearing. Davenport provided background concerning mercury contamination in fish downstream of the contaminated site and historic efforts to ameliorate the problem. Davenport testified that it was initially thought that the mercury in the South River would become covered with sediment and decline in fish tissue over time. When fish tissue studies conducted in the late 1990s and early 2000s revealed that mercury contamination continued at high levels, it became clear that additional steps needed to be taken. The South River Science Team ("SRST")⁵ was convened in 2001 to identify, manage and reduce risks to the public from the Waynesboro mercury contamination.

Davenport also provided background on an earlier Consent Decree. The July 1, 2005, Consent Decree approved the settlement of a lawsuit brought against DuPont by the Natural Resources Defense Council, Inc. ("NRDC") and Sierra Club. The 2005 NRDC/Sierra Club Consent Decree⁶ approved funding by DuPont of scientific studies of mercury endangerment and abatement efforts based on those studies. See Nat. Res. Def. Council, Inc. & Sierra Club v. E.I. du Pont de Nemours & Co., No. 5:05cv30013, ECF No. 15-1 (W.D. Va. June 29, 2005). The NRDC/Sierra Club Consent Decree was amended in 2014 to provide for the "implementation of a voluntary program of remediation that is safe, effective, and reasonably necessary to address ecological and human health impacts caused by mercury contamination." Id., ECF No. 20 (Sept. 14, 2014).

Michael Liberati, DuPont's Project Director for remediation and restoration at its former Waynesboro site, testified about the substantial research undertaken by the SRST and the eventual determination that bank erosion is the principal contributor to ongoing mercury contamination of the South River. Liberati outlined the history of on-site remediation efforts and detailed a pilot bank project designed to prevent further mercury contamination. Liberati testified that the pilot project was very successful in that it resulted in a significant reduction in mercury levels in near-bank settings. After the pilot project, work was commenced on the banks of Waynesboro's Constitution Park, a bit downriver from the pilot site, which was identified as having high concentrations of mercury and was eroding. Work was completed on the bank stabilization project in Constitution Park in February 2017 and will continue inthe city shops area of Waynesboro in August 2017. Employing adaptive management techniques and building on the positive results from the pilot program, the VDEQ has approved expansion of the bank stabilization program to encompass contaminated areas of the first two miles of the South River downstream from the former DuPont facility.

Anne M. Condon, Natural Resource Damage Assessment and Restoration Biologist with the USFWS, testified at length concerning natural resource damages resulting from the DuPont mercury contamination.⁷ Condon has worked on the natural resource damage assessment for the former DuPont Waynesboro site since 2008 and has been...