June 21, 2007

A Word from a Neighbor

Justin Katz

I can't imagine what I would do — or, more to the point, demand — if my little square of land turned out to be contaminated. My family would probably be moving into somebody's basement while we tried to figure out how to either save the property or extricate ourselves from ownership of it. Folks right down the hill from me have been facing just this situation for several years, now, so it's not merely hypothetical, but as the legal bills flow out of the attempt to force a company to pay for the clean up, the efficacy, as well as the principle, of doing so is becoming a serious question:

The battle over a contaminated Tiverton neighborhood and the cost of cleaning it up moved to the Rhode Island State House last night, where it was revealed that the tab for a Washington, D.C., law firm representing the state has risen to $777,000 — and climbing. ...

The Rhode Island Department of Environmental has traced the contamination to the former Fall River Gas Co., which allegedly dumped waste material in the area in the early 1900s. The company later became part of New England Gas, which was in turn purchased by Southern Union, a big utility company based in Houston, Texas. ...

Sutherland Asbill, which billed $355,000 in January and February, as previously reported, billed the state another $322,000 for March and April. Noting that the state has yet to receive the firm’s bills for May and June, Alves noted that the bills have been piling up at the rate of $200,000 a month and have likely already reached the $1 million range — with no clear end in sight.

Each month's bill is, by itself, over three times the $60,000 that the DEM was authorized to spend. Clearly, somebody in the line of command is under the impression that victory is certain, but American governmental types' recent transformation into big-wallet-seeking plaintiffs may be crossing into poorly considered territory.

Scarcely a Rhode Islander, no doubt, is not sympathetic to the plight of the affected families, and calls for some sort of well-defined fund to help them would likely draw impressive response; I'd probably contribute to a rattled cup, and if the state weren't on the verge of financial collapse, some of its resources would more readily be available to help. Attempting to enforce modern environmental standards on a company that bought a company that bought a company that violated those standards one hundred years ago, however, may be a no-victory endeavor.

If the state loses the legal battle, nobody has benefited but the lawyers; if it wins, a dubious precedent would have been set. Perhaps we'd be better off ensuring that all environmental regulations are updated to account for our more advanced scientific understanding and then turning our attention to lightening the burden of our darker past, rather than seeking live people in another part of the country to pay for the mistakes of our deceased neighbors.

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What dubious precedent?

Posted by: mrh at June 21, 2007 12:53 PM


To answer your question, I would merely retype what's already written in the post. Do you want to take a stab at what I mean and, if you're so inclined, explaining why that's wrong, before we go through the exercise?

Posted by: Justin Katz at June 21, 2007 7:13 PM

LOL, Justin.

You really had me going there. For a minute, I actually thought you were serious about this.

I mean, as if you would take the side of a large utility company against some local residents. And the part about the precedent! That was great! Like you didn't know there weren't hundreds of precedents about these things already.

I mean, of course you knew how Haliburton acquired all that asbestos liability when it bought that company when Cheney was CEO.

Yup, this was a thigh-slapper.

Posted by: klaus at June 21, 2007 8:02 PM


The proximity of the residents and the boogyman status of a distant company are not this issue here. It's not an us versus them thing. See, that's how folks like you get to parade parochialism and emotionalism as principle. The question is whether or not our approach to solving our problems is ethical or beneficial in the long term.

Although I would note that public issues can set social/cultural precedents as well as legal ones, I'll suggest mainly that even the legal precedent cannot be as clearly set as you insist, as the necessity for such massive legal bills implies. Somebody at the DEM (I suppose) thought this was a sufficient slam-dunk that they could go far, far beyond authorized expenditures. That, in itself, is a dubious precedent (not to mention a disincentive to settlement).

The fact that you see no substantial difference between this case and that of Halliburton/Dressler does not speak well of your ability to understand the evidence of which you so often declare yourself to be in possession. Even beyond the specifics of the corporate purchases (wherein, for one thing, the asbestos claims were already a potential problem, while the soil issues came to light two years after the purchase), the differences between the two claims are tremendous.

I'm not saying that what the folks down the street are having to face is not horrible, but sometimes the urge to find somebody to blame — and to force to pay the bills — can pile destruction upon misfortune.

I'm not siding with the company over the residents. I'm suggesting that maybe there are better ways in which our society can react to these matters as we discover the repercussions of our past ignorance and carelessness.

I say examine the history to determine why nobody caught this potential catastrophe sooner — such as when the property first became available for domestic use — and change the laws to ensure that it cannot happen again. Then offer a well-defined program to assist the affected families, through government assistance and private donations, and pressure the major company to become a key contributor to that fund (assuming we haven't reached the point at which no company's legal department would allow such a thing out of reasonable fear that it would be considered admission of guilt and culpability).

Posted by: Justin Katz at June 21, 2007 8:48 PM


I wasn't trying to be a dick; I was generally asking what the precedent is -- the state spending money to pursue a legal judgment against a company? Or the state going over their expenditure limit?

If it's the former, I think it's worth the cost, because the if the state wins a large judgment it acts as a deterrent for companies to engage in that kind of behavior in the future. If they lose, well, every legal action carries that risk. I don't like the alternative.

If it's the latter, then yes, I agree, that was poorly done. The DEM should have sought (and received) additional funding.

Posted by: mrh at June 22, 2007 1:19 PM

When you buy a business, you acquire the liabilities as well as the assets.


That's really the only fact that's relevant. I don't know the particulars, but they don't matter because this well-established legality pretty much overrides anything else.

If the liabilities were not apparent when the purchase was made...too bad. Otherwise you'd have companies shirking responsibility left and right because "they didn't know." Well, do your homework.

Or, I guess we should raise taxes to take care of these situations instead of holding the business responsible. But haven't you said that taxes are too high? Care to address that inconsistency?

I love it how conservative types blow on about "responsibility," but then never think that business, or Scooter Libbey should ever have to take the consequences of their behavior.

The bald fact is that the company that bought this land did so to make money. They're "far away," but not so far that they didn't think they could make a buck. Now, I admit it's bad luck that they got stuck with this, but there's really no way around it.

I'm sorry if you think it's unfair, and we're being mean to the itty-bitty business, but it's the law, and the law is clear. Or do you believe the law should be situational, or that businesses should be able to ignore when it's convenient. Strawmen? You tell me. If so, what else are you saying?

The liabilities come with the assets.

Posted by: klaus at June 22, 2007 6:55 PM


You're refreshingly like a cartoon. You've no idea about the specifics of the case that you're arguing, and yet you feel justified in displaying a maximum of arrogance. Without realizing it, you're arguing against the RI residents whom you think you're supporting:

The bald fact is that the company that bought this land did so to make money. They're "far away," but not so far that they didn't think they could make a buck. Now, I admit it's bad luck that they got stuck with this, but there's really no way around it.

Actually, the Texas company in question bought a company that bought a company that sold the land. Now, I'll be the first to hypothesize that Rhode Island was wrong to allow the sale of this particular land for residential purposes (given its habitually shirked mandate to protect its citizens), but honestly, I haven't had the time to research the circumstances of the land's sale.

The bald fact, to use your lingo, is that the folks who first bought this waterfront land — decades before both the first hint of pollution and the corporate purchase of the purchaser of the previous owner — thought they were getting a deal. The difference between us, it would seem, is that I acknowledge the homeowners' bad luck and suggest a public fund to help them deal with it, while you attribute the bad luck to a boogyman company and rejoice in the notion of soaking them for thrice-removed repercussions.

Posted by: Justin Katz at June 22, 2007 7:23 PM

But you think the taxpayers should pay for this.

And no matter how many times removed, the company still acquired the company that was responsible for the contamination. That's not exactly a boogyman.

There's the liability.

Why is that so hard to follow? It's got nothing to do with political outlook. It's a matter of legality. Under the current law, the company is liable as the successor to the orignal company.

You have some fuzzy reasons that this is somehow "wrong" because...why? And you want to set up a fund to take care of these issues. Who funds the fund? Taxpayers. Why in the world should I have to pay for this?

You get all offended when the state doles out welfare to needy individuals, but apparently you're all for handing out my money to out-of-state corporations. Now I realize you never said "tax-funded," but where else is this "fund" going to come from?

Look, Justin, all I'm trying to do is get you to think your stuff through before you say it. You're the one with the knee-jerk reaction that it's all some scheme to soak businesses. It's not. It's how the law works. Anything less clear-cut would simply be an entry point for lawyers to tie these situations up for decades. I don't consider that a desirable situation.

You called me a "cartoon" this time (you call me names a lot, you know. That's not exactly effective argumentation). But I call them principles.

What I'm saying is that the law is clear. Uphold it. You seem to have a problem with this, and want to leave me on the hook for the payment.

Posted by: klaus at June 23, 2007 6:38 PM

I've said a number of things, Klaus, and you seem to have absorbed few of them. First a question: Why, if a business buys a business, is it responsible for the unforeseen liabilities accruing thereto, but if an individual buys a property, he is not similarly responsible for its problems? The knee jerking is yours. (By the way, I haven't bothered to research whether there were anti-dumping laws on the books when it was actually done by the Fall River company in question, my reasoning being that those who insist on blaming the thrice removed corporation do not seem to think it matters.)

I did state, though, that it would be nice if Rhode Island weren't in such dire financial straits; it might then be able to throw these folks some money (although it's apparently able to throw lawyers money chasing this supposedly clear precedent on which you insist). My reliance on the government is mostly to administer the fund, which would consist largely of private donations, hopefully including a large sum from the company that is currently the subject of the lawsuit.

My various points are united in my belief that we have to rethink how we approach these problems when discovered. Currently, the media and local government do their utmost to portray the property owners as hapless victims, while the government seeks to sue some company for damages, apparently without a realistic effort to measure the costs versus the benefits of doing so.

Bottom line: I think the citizens of Rhode Island ought to chip in to help these folks of their own free will, without government coercion through taxation. I think further that we ought to examine (1) why our government leaders allowed this land to be developed in the first place, and (2) why our state and local governments are in such horrible financial shape that they haven't the resources to help citizens through this sort of unexpected environmental catastrophe.

As for what you're trying to do vis-a-vis my writing, given aggregate effect of recent comment threads, your proclamation of that effort is increasingly laughable.

Posted by: Justin Katz at June 23, 2007 6:56 PM

It occurs to me to add, Klaus, that you're in no position to feign magnanimity. You've been abusing me pretty regularly, of late, and the inclination to pretend good will rings hollow when it follows your recent missteps.

Posted by: Justin Katz at June 23, 2007 7:07 PM
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