DES MOINES, Iowa — A federal judge in Des Moines has ordered Titan Tire Corp. and Dico Inc., both subsidiaries of Titan International Inc., to pay nearly $11 million in fines to the U.S. Environmental Protection Agency (EPA) for allegedly selling contaminated buildings to avoid cleaning up the site.
The Sept. 5 order by Judge Robert W. Pratt was the latest event in a case the U.S. Justice Department filed seven years ago on behalf of the EPA.
The government accuses Titan and Dico of failing to clean up polychlorinated biphenyls (PCBs) and other contaminants at the former Dico site in Des Moines, a charge Titan International says is false.
According to the order, Titan Tire on behalf of Dico entered into three contracts in May 2007 to sell three buildings to Southern Iowa Mechanical L.L.C. (SIM).
The buildings were on a Superfund site owned by Dico and identified as contaminated by the EPA in 1994, according to court documents. PCBs were the main toxic substances at the site.
Maurice "Morry" Taylor Jr., who at the time was president and CEO of Titan International, authorized William Campbell, then-president and now chairman of Titan Tire, to make the sale, according to the conclusions of law submitted to the Iowa court by the Justice Department.
Between June and November 2007, SIM dismantled and removed the buildings, according to the Justice Department. The EPA discovered the dismantling procedure in progress in September 2007, the Justice Department said.
In his order, Mr. Pratt said that Titan made no effort to advertise the buildings for sale, seek the highest price or have the buildings appraised.
Nevertheless, Dico enjoyed significant financial gain through the May 2007 transactions, according to Mr. Pratt. Because of the removal of the contaminated buildings, the value of the Dico property increased by $720,000, he said.
"On balance, the court concludes the additional facts identified by the parties as suggestive as to what defendants intended when they entered into the 2007 transactions, taken together, weigh clearly in favor of concluding defendants intended to dispose of a hazardous substance when they sold the contaminated buildings to SIM," Pratt wrote in his order.
According to Mr. Pratt, the EPA incurred $5.45 million in response costs and interest because of Titan and Dico's actions. He found both companies joint and severally liable for repaying those costs. He also imposed $5.45 million in punitive damages.
Titan officials could not be reached for comment on the decision or on an appeal. However, Mr. Taylor commented in February 2014 than an earlier decision in the case — a fine of nearly $3.1 million for allegedly tearing down contaminated buildings — was "a big joke."
Only about a teaspoonful of PCBs was ever found on the site, Mr. Taylor said at the time.
"There are some judges who just assume that if the government says something, it must be right," he said.