There may soon be a light at the end of the tunnel for some tire dealers in Wisconsin and northern Illinois who the Environmental Protection Agency (EPA) slapped with cleanup costs last summer for a 2005 tire fire in Watertown, Wis.
Attorneys representing a group of 27 companies, including tire dealerships, have been negotiating with U.S. Department of Justice (DOJ) attorneys representing the EPA for the past few months and may be near a settlement. The negotiations center on how much each company should pay the EPA for $1.04 million in cleanup costs the agency incurred when 400,000 to 1 million tires burned at Watertown Tire Recyclers L.L.C. in 2005.
The EPA last July notified 37 entities of potential liability for the Watertown fire, as Watertown Tire Recyclers is out of business and the site is classified as a Superfund. Tire dealers, waste haulers and the state of Wisconsin were the entities named by the EPA as potentially responsible.
Since then, negotiations between the agency's attorneys at the Department of Justice (DOJ) and the entities' attorneys have been ongoing and at times stalled because the owner of the site, Thomas Springer, filed a lawsuit against his insurance company.
Now there may be a resolution for the other parties involved, according to attorney Gary Antoniewicz, who represents McFarlane Manufacturing Co. Inc.—an equipment manufacturer as well as a tire and hardware retailer—that is part of the group negotiating with the EPA. He said he is not one of the Superfund attorneys directly negotiating with the DOJ, but he has conference calls with those attorneys once a week on behalf of his client.
He said the group has offered the DOJ $450,000 to settle, with each party paying a sum in proportion to the number of tires they contributed to the site.
However, a sticking point in the negotiations has been the DOJ's insistence that the group agree to joint and several liability, which means the group would be financially responsible for anyone who didn't pay their share, Mr. Antoniewicz said.
“We've got some people who, if you took the entire $1 million and did their proportionate share of it, it would be $10,000,” he explained. “If you're a contributor to the point where you've offered $6,000 to settle, (then) you're not going to take liability for $450,000, which is what the Justice Department's been after.”
Mr. Antoniewicz told Tire Business he is optimistic a resolution is close because attorneys for the group have collected nearly $325,000 and deposited it into a trust fund. “In doing that, we're able to go back to the Justice Department and say, 'Here's what we have. Now get rid of the joint and several liability because we've already paid it in.'”
The DOJ's tolling agreement expired Feb. 15, but negotiations continue between the parties.
(The legal definition of a tolling agreement is an agreement to waive a right to claim that litigation should be dismissed due to the expiration of a statute of limitations. Its purpose is typically to allow parties additional time to assess and determine the legitimacy and viability of their claims and/or the amount of their damages without the necessity of filing an action. During this period, the parties waive any defense by way of any statute of limitations which would otherwise arise during such period.)
Additionally, Mr. Springer's suit against his insurance company still is pending, according to Mr. Antoniewicz, and may still pose an opportunity for the EPA to collect payment from Mr. Springer.
Leo Wherley, owner of Don's Tire Service in Cross Plains, Wis., and a member of the group being assessed by the EPA, said he sent a check valued at more than $5,200 to his attorney Feb. 6.
“We're getting sick of it, to say the least, because we didn't do anything wrong,” he said. “The Department of Justice found people that they thought might have money to pay for it and went after us.”