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United States v. Jervis B. Webb Co.

United States District Court, C.D. California, Western Division

June 24, 2019

UNITED STATES OF AMERICA and CALIFORNIA DEPARTMENT OF TOXIC SUBSTANCES CONTROL, Plaintiffs,
v.
JERVIS B. WEBB COMPANY and JERVIS B. WEBB COMPANY OF CALIFORNIA, Defendants.

          ELLEN M. MAHAN Deputy Chief, Environmental Enforcement Section U.S. Department of Justice Environment and Natural Resources Division

          KARL J. FINGERHOOD Senior Counsel, Environmental Enforcement Section U.S. Department of Justice Environment & Natural Resources Division

          Of Counsel: JIM COLLINS Assistant Regional Counsel U.S. Environmental Protection Agency, Region 9

          Michael Scott Feeley, Esq., John C. Heintz, Esq. Latham & Watkins LLP

          CONSENT DECREE

         TABLE OF CONTENTS

         I. BACKGROUND.......................................................................................1

         II. JURISDICTION........................................................................................4

         III. PARTIES BOUND....................................................................................4

         IV. DEFINITIONS..........................................................................................4

         V. PAYMENTS FOR RESPONSE COSTS..................................................7

         VI. FAILURE TO COMPLY WITH CONSENT DECREE...........................8

         VII. COVENANT NOT TO SUE BY UNITED STATES...............................9

         VIII. RESERVATION OF RIGHTS BY UNITED STATES...........................9

         IX. COVENANT NOT TO SUE BY DTSC.................................................10

         X. RESERVATION OF RIGHTS BY DTSC..............................................10

         XI. COVENANT NOT TO SUE BY SETTLING DEFENDANTS.......................................................................................11

         XII. EFFECT OF SETTLEMENT: CONTRIBUTION PROTECTION ....................................................................................12

         XIII. ACCESS TO INFORMATION...............................................................14

         XIV. RETENTION OF RECORDS.................................................................15

         XV. NOTICES AND SUBMISSIONS...........................................................17

         XVI. RETENTION OF JURISDICTION........................................................18

         XVII. APPENDICES.........................................................................................19

         XVIII. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT.............................................................................................19

         XIX. SIGNATORIES/SERVICE.....................................................................19

         XX. FINAL JUDGMENT...............................................................................20

         I. BACKGROUND

         A. The United States of America ("United States"), on behalf of the Administrator of the United States Environmental Protection Agency ("EPA"), and the California Department of Toxic Substances Control ("DTSC"), filed a complaint ("Complaint") in this matter against Jervis B. Webb Company ("JBW") and Jervis B. Webb Company of California ("Webb-Cal") (collectively "Settling Defendants"). In the Complaint, the United States alleged claims against Webb-Cal pursuant to Sections 106 and 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9606 and 9607(a), seeking injunctive relief and reimbursement of response costs incurred or to be incurred at the Jervis B. Webb Superfimd Site in South Gate, Los Angeles County, California (the "Site"), and alleged a claim against JBW seeking to avoid certain transfers of assets from Webb-Cal to JBW under the Federal Debt Collection Procedures Act, 28 U.S.C. § 3001 et seq. ("FDCPA"). DTSC separately alleged claims in the Complaint against Webb-Cal that it is liable to DTSC under Section 107 of CERCLA, 42 U.S.C. § 9607 and/or applicable state laws, for reimbursement of costs it has incurred for response actions at the Site.

         B. The Settling Defendants do not admit any liability to the United States or to DTSC arising out of the transactions or occurrences alleged in the Complaint.

         C. JBW is a Michigan corporation with its principal place of business in Farmington Hills, Michigan.

         D. Webb-Cal was a California corporation from 1949 until its dissolution in 2003. JBW was a shareholder in Webb-Cal from the time of Webb-Cal's incorporation until its dissolution. From 1992 until the dissolution of Webb-Cal, JBW owned 100% of the shares of Webb-Cal, and Webb-Cal was a wholly owned subsidiary of JBW.

         E. The Site is approximately 3.82 acres in size and contains two adjacent parcels of land. The Site is depicted on the map attached as Appendix A.

         F. From approximately 1953 to 2003, Webb-Cal owned and operated portions of or the whole of the Site. At various times during its ownership and occupancy, Webb-Cal manufactured cranes and conveyors on the Site. From approximately 1975 to 1984, Webb-Cal leased a portion of the Site to Blake Rivet Company ("Blake"). Blake manufactured aircraft rivets on a portion of the Site from the 1950s until approximately 1984. Blake has ceased doing business and is insolvent.

         G. Hazardous substances, such as the volatile organic compounds perchloroethene and trichloroethene, were detected in Site soils and groundwater in sampling performed pursuant to directives of the California Regional Water Quality Control Board between 1997 and 2005.

         H. In April of 2006, the California Regional Water Quality Control Board transferred oversight of the Site to DTSC.

         I. On October 23, 2008, DTSC sent a letter to the "Jervis Webb Company of California," which transmitted a draft Imminent and Substantial Endangerment Determination and draft Consent Order.

         J. On February 2, 2010, DTSC issued an Imminent and Substantial Endangerment Order to JBW and the current owners of the Rayo and Firestone properties.

         K. On January 18, 2011, DTSC referred the Site to EPA to assume lead oversight responsibilities. In performing the response actions at the Site, DTSC has incurred response costs and may incur additional response costs in the future.

         L. Pursuant to Section 105 of CERCLA, 42 U.S.C. § 9605, EPA placed the Site on the National Priorities List, set forth at 40 C.F.R. Part 300, Appendix B, by publication in the Federal Register on May 5, 2012, 77 Fed. Reg. 27, 368.

         M. EPA has undertaken a Remedial Investigation ("RI") of the Site pursuant to 40 C.F.R. § 300.430. The RI commenced in 2014 and is ongoing at the time of the lodging of this Consent Decree. In performing this response action at the Site, EPA has incurred response costs and will incur additional response costs in the future.

         N. The United States and DTSC allege in the claim against Webb-Cal that, from its commencement in the 1950s to its cessation in the 1980s, manufacturing operations at the Site released hazardous substances such as trichloroethene and perchloroethene to the soils and groundwater at and beneath the Site and have caused the United States to incur costs of response at the Site. The United States and DTSC further allege in the Complaint that Webb-Cal is liable for all past and future costs of response to hazardous substances at the Site pursuant to section 107(a)(2) of CERCLA, 42 U.S.C. § 9607(a)(2). Webb-Cal does not admit any liability to the United States under CERCLA.

         O. The United States alleges in the claim against JBW that:

1) At the time of its dissolution, Webb-Cal transferred to JBW and JBW received from Webb-Cal all of Webb-Cal's remaining assets in an amount exceeding $2.7 million.
2) At the time of its dissolution, Webb-Cal was indebted to the United States for the costs incurred and to be incurred in response to the hazardous substances released at and from the Site.
3) The transfer of all its assets to JBW by Webb-Cal at the time of its dissolution rendered Webb-Cal insolvent.
4) The transfer of assets from Webb-Cal to JBW was made with the intent to hinder, delay, or defraud the United States as creditor of Webb-Cal.
5) On the basis of the allegations in 0(1) - (4), supra, the United States alleges that JBW is liable to the United States for the value of the assets received by JBW from Webb-Cal pursuant to the provisions of sections 3304 and 3306 of the FDCPA, 28 U.S.C. §§ 3304 and 3306. Settling Defendant JBW does not admit any liability to the United States under the FDCPA.

         P. The United States, DTSC, and Settling Defendants agree, and this Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by the Parties in good faith, that settlement of this matter will avoid prolonged and complicated litigation among the Parties, ...


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