The Environmental Protection Agency (EPA) believes that certain tire dealers in Wisconsin and northern Illinois who sent their scrap tires to a licensed tire processor in Watertown are responsible for the clean-up costs of a massive tire fire that erupted at the processor's facility in 2005.
The EPA, which reportedly spent about $1.04 million cleaning up contaminated water after the fire, sent letters in July to those dealers, the state of Wisconsin and other businesses requesting that they pay their share or face civil action in federal court.
A July 17 letter from the EPA's regional office in Chicago notified 37 entities of potential liability and gave recipients three days to respond regarding their willingness to reimburse the agency. The fire at Watertown Tire Recyclers L.L.C., owned by Thomas Springer, burned an estimated 400,000 to 1 million tires from July 19-23, 2005, and is considered a Superfund site.
Leo Wherley, owner of Don's Tire Service in Cross Plains, Wis., is one of the dealers cited by the EPA and is consulting with his attorneys on a course of action.
``We hired attorneys, Superfund attorneys, and they said as far as the EPA is concerned, you're guilty,'' Mr. Wherley told Tire Business. ``So you all gotta pay. It's just a matter of how much.''
Mr. Wherley said Watertown Tire Recyclers was the only processor he contracted with to haul scrap tires from his single-outlet dealership. At present, he's not sure what he has to pay as it still needs to be negotiated.
``They're beyond law,'' he said of the EPA. ``…(C)ontract law says Watertown Recyclers had title to those tires, and yet they're coming back at us.''
Mr. Wherley, who has owned Don's Tire for 20 years, said he has liability insurance but has found that his coverage doesn't include environmental liability. ``I just assumed we were covered for something like this, but we're not,'' he said.
The EPA's letter stated the agency had used public funds to clean up ``hazardous substances'' created by the Watertown blaze, and under the Comprehensive Environmental Response, Cleanup and Liability Act of 1980, responsible parties are liable for costs associated with site cleanup.
Some of the hazardous substances cited were acetone, benzene, ethyl benzene, toluene, xylene and zinc. Potentially responsible parties include ``persons who arranged for the disposal or treatment of hazardous substances,'' according to the letter.
A follow-up letter dated July 25 from trial attorney Robert Darnell informed the 37 parties that the time limit for the government to recover its costs may expire soon, and therefore the U.S. Department of Justice was considering filing a lawsuit by Aug. 26.
That letter said recipients could sign an enclosed tolling agreement and submit it by Aug. 15, and then they would have six months to exchange information and possibly negotiate a settlement. The agency also told recipients to submit any relevant information regarding their companies' alleged liability or any financial factors that would bear on their ability to reimburse the EPA.
One of the 37 parties named is Mr. Springer, who now is out of business as a tire processor, according to Gene Mitchell, recycling and solid waste section chief at the Wisconsin Department of Natural Resources (DNR).
At one time Mr. Springer's company was one of the largest tire recyclers in the state and processed 40 percent of Wisconsin's scrap tires, Mr. Mitchell said. He added that he didn't know why the EPA identified only 37 entities as potentially responsible for cleanup costs, considering that Mr. Springer's firm must have had a much larger customer base.
``We don't have his records of where he accepted tires from because that's not part of our authority, to look at that,'' Mr. Mitchell said. ``I think clearly, everyone believes that he took from a much larger universe of contributors.''
EPA enforcement officials could not be reached for comment by Tire Business' Aug. 14 presstime.
The state fire marshal determined that as front-end loaders were moving tire chips at Watertown Tire Recyclers' facility, some of those chips got into the loaders' manifold area and combusted from the engines' heat, Mr. Mitchell said.
Because the equipment was working in an area of tire chips within a larger area of whole tires, it didn't take long for the combusted chips to set the tires on fire as well, Mr. Mitchell said.
More than 100 firefighters used a fire suppressant agent and foam to extinguish the blaze, and rain later fell on the site during that time as well, Mr. Mitchell said. Since neither Mr. Springer nor the state was able to bring in experts to treat contaminated surface water that resulted, the EPA mobilized its personnel and equipment to the site, he said.
``Generally, they come in, they incur the costs,'' he said of the EPA. ``They go back to the responsible party—Springer and various corporations—and if they're unable to get costs there, then they seek cost recovery as they would in a Superfund. They go after anyone that had contributed material to the cause of the cleanup.''
He added that if Watertown was a landfill that needed cleanup, the EPA under U.S. law would go after anyone it had records of who contributed waste to the landfill, and it can make judgments on who bears the most responsibility based on volume of waste and the type of waste.
The state paid more than $73,000 to clean up the Watertown site with money from a general environmental fund, according to Mr. Mitchell. Mr. Springer's insurance also paid a significant portion of the cleanup costs, although Mr. Mitchell said he couldn't recall the amount.
In a 2006 settlement between the Wisconsin attorney general and Mr. Springer, the company agreed to pay $320,000 in penalties and costs for violations at the facility that included storing more than the processor's allowed volume of tires and inadequate fire lanes.
The payments reimburse the first responders, the DNR for its response and the state for forfeitures and surcharges. The judgment also set up a payment schedule since Mr. Springer's finances apparently were impacted negatively. It also ordered him to end all tire collection activities at the site by 2010.
Gary Manke, executive director of the Wisconsin Automotive Aftermarket Association (WAAA), said he immediately heard from some of his member dealers who were notified by the EPA. He said at the time, he advised his members to contact the EPA and tell the agency they had insufficient information at present and would need to work towards a resolution.
He said six of the 37 parties identified by the EPA are WAAA members, and the association now is waiting for those dealers to meet with their attorneys in August and decide how they want to resolve this issue. Those members have not heard further from the EPA since acknowledging the receipt of its letters, he said.
Mr. Manke suggested that one possible course of action is that dealers belonging to the association and dealers who do not form a group represented by the same attorneys since they all will have a common liability. He predicted that this process with the government likely will go on for a couple of years.
He also noted that technically, it was the fire and not the tires that generated the chemicals that needed to be cleaned up, and tire dealers are not responsible for the fire.
``Thirty-seven-some people that have been named in this suit basically are individuals that did dispose of (tires) properly, but it was the fire that caused the cleanup at this time,'' Mr. Manke said.
Paul Fiore, director of government and business affairs for the Tire Industry Association, agreed with Mr. Manke.
``There's a lot that's up in the air about this request from EPA,'' Mr. Fiore said. ``The major issue is, let's talk about what are the toxic elements here. Where did they come from? Is it something that tire dealers can be blamed for? I think this is just a shot across the bow from EPA to see what they can do.''
Mr. Fiore said he has never seen a situation like this involving scrap tires and is concerned that a precedent may be set for the federal government to revisit past tire fires.
``This is typical of EPA and of states,'' he said. ``They've got a site they're having problems with, and yet they don't shut them down. They continue to collect tires and then small businesses get sucked into this void.''
Tire dealers should be aware of who's taking their tires and what their insurance policies cover, he said, noting a similar problem with waste oil and Superfund sites in which the EPA bankrupted some automotive repair facilities.
In past years, owners of oil recycling facilities that went bankrupt often would abandon the facilities, Mr. Fiore explained. The EPA went after anyone they could trace the oil to, by probing haulers' records.
Mr. Fiore also said he doesn't believe Wisconsin dealers' only choice is to pay the EPA, adding that any dealer who still needs an attorney can call him, and he will refer an attorney knowledgeable on the EPA and Superfund sites.
``I think they (dealers) have the right to legal counsel,'' he said. ``I think that they're in a good position to start negotiating. I think they're negotiating from strength because there are so many unknowns…. I think it's very early in the process to start thinking