A U.S. District Court jury in Portland, Maine, has ruled a Maryland-based environmental consultancy must pay Maine Rubber International Inc. $700,125 in damages related to work it did for the industrial tire maker in 1998.
Environmental Management Group (EMG) also was ordered to pay Maine Rubber's court costs. The tire firm had sought $1 million in a breach-of-contract lawsuit. The environmental firm said it plans to appeal the ruling. However, Ken Hebert, general manager of Maine Rubber and chief financial officer of parent Maine Industrial Tires Ltd., said that is a long process that could take quite a bit of time.
The industrial tire manufacturer had planned to move to a former cement products company factory in Portland in 1998 from its leased facility in Westbrook, Maine, and hired EMG to do an environmental assessment of the site, according to Mr. Hebert.
According to Maine Rubber officials, EMG sent an inspector to the 40,000-sq.-ft. Portland site. The inspector gave the facility a clean bill of health despite concerns by the plant's neighbors that the factory had serious environmental problems.
Maine Rubber, which makes a variety of polyurethane and rubber products, made long-range plans to move to the Portland site in less than a year, phasing the move so that it didn't bring the company's production to an abrupt halt, Mr. Hebert said.
However, eight months after the EMG report, federal and state environmental inspectors said they found thousands of pounds of hazardous chemicals on the property and further environmental damage to the site caused by the concrete company.
``There were toxic hazardous chemicals throughout the property,'' said Mr. Hebert, who was not general manager of Maine Rubber at the time. The chemicals were killing trees and other vegetation, and hazardous materials were found stored on site. None of it was mentioned in the EMG report, he said.
Maine Rubber backed away from the deal and ``that created all kinds of problems,'' Mr. Hebert said.
The company already had invested heavily in the planned move and the Portland site, but it got more expensive quickly. The rent it paid for the Westbrook facility was doubled by an owner who wanted the building vacated.
To make matters more difficult, the company in mid-1999 purchased Mississauga, Ontario-based Industrial Tires Ltd. and Kenhar Wheel and Baseband-renamed Precision Products-in Guelph, Ontario.
These events left it without a home, its well-planned, staggered five-month transition program trashed and the ITL/Precision Products deal about to close.
The firm launched an intensive search for a new site. It finally settled on the 48,000-sq.-ft. plant it now occupies in Gorham. By then it was summer 1999, and the company had less than two months to move, according to Mr. Hebert.
Maine Rubber had to stop production entirely, rather than follow its original plan of moving one department at a time, to meet the deadline, the executive said.
The company ended up spending more than $200,000 in moving costs and losing more than $500,000 in business.
Although Maine Rubber didn't get the $1 million it sought, Mr. Hebert said he was ``very pleased with the verdict'' and the $700,125 award.