“The reign of toxic lead ends today,” said Acting United States Attorney Stephanie Yonekura. “After more than nine decades of ongoing lead contamination in the City of Vernon, neighborhoods can now start to breathe easier.”
Exide had planned to resume operations at the recycling facility as early as next month, but the agreement calls for the facility to be shuttered, demolished and cleaned up. Exide is also required to make expedited payments that will complete funding of a $9 million trust fund that will be used to clean up 216 nearby residences in the Boyle Heights neighborhood and the City of Maywood.
The deal to close the recycling facility is contained in a Non-Prosecution Agreement (NPA). It is estimated that the Exide’s direct costs of compliance are well in excess of $100 million. These costs include the company walking away from recent improvements to the facility and incurring new costs for lead and plastic that must now be purchased to manufacture new batteries.
The United States Attorney’s Office entered into the NPA because negotiations with the bankrupt company revealed that even the threat of a criminal prosecution would almost certainly force the liquidation of the company. The NPA opens the door to new funding for the company, which employs thousands of workers in the United States and around the world, and ensures that money will be available to pay for the clean-up of the Vernon site and several other toxic sites around the United States.
“The agreements with the USAO and the Department should allow us to resolve key conditions to funding of the backstop commitment agreement, and to continue to pursue plan confirmation,” said Robert M. Caruso, President and Chief Executive Officer of Exide Technologies. “We recognize the impacts that closing the Vernon Facility will have on our approximately 130 employees and their families. On behalf of the company, I thank them and the United Steel Workers Union for their commitment and dedication."
Without the NPA, prosecutors believe, Exide would cease to exist as a viable company and responsibility to clean up toxic sites like the recycling plant in Vernon would revert to governmental agencies.
“The agreement with Exide ensures that the Vernon site will be permanently closed, while guaranteeing that the company will survive to adequately finance the clean-up of this long-suffering community,” Yonekura said.
Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest, stated, “The closure of this facility is a victory for the residents of Vernon who have suffered from decades of toxic pollution. This historic action was made possible because of the tireless efforts of local community members, including parents, environmental groups and religious leaders. Today’s announcement shows that companies who fail to meet federal environmental laws will face serious consequences.”
In addition to the commitments to close the Vernon facility and pay for associated clean-up costs, “Exide admits that it knowingly and willfully caused the shipment of hazardous waste contaminated with lead and corrosive acid in leaking van trailers owned by Wiley Sanders Truck Line, Inc. and operated by Lutrel Trucking, Inc. and KW Plastics of California, Inc., from the [Vernon] facility to Bakersfield, California, a significant number of times over the past two decades, in violation of federal law. Each incident could be charged as a felony violation of the federal Hazardous Materials Transportation Act.”
Exide agreed that it could be prosecuted for the felony environmental offenses it previously committed at any time over the next 10 years if it fails to abide by the terms of the NPA. A violation would include failing to adequate finance clean-up efforts at the recycling facility, a program that will be overseen by the California Department of Toxic Substances Control (DTSC).
The company is requesting that the Bankruptcy Court approve the agreements as well as authorize Exide to close the Vernon Facility at a hearing scheduled for March 27, 2015.