oversight

Hazardous Waste: EPA's Cleanup of the Eagle-Picher Henryetta, Oklahoma, Site

Published by the Government Accountability Office on 2003-09-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office
Washington, DC 20548


      September 5, 2003

      The Honorable James M. Inhofe
      Chairman, Committee on Environment
       and Public Works
      United States Senate

      Subject: Hazardous Waste: EPA’s Cleanup of the Eagle-Picher Henryetta,
      Oklahoma, Site

      Dear Mr. Chairman:

      From 1996 to 1997, the U.S. Environmental Protection Agency (EPA) conducted a
      cleanup action on a former zinc smelter operated by Eagle-Picher Mining and
      Smelting, Inc. and other areas contaminated by materials from this site near
      Henryetta, Oklahoma. EPA’s cleanup focused on removing the immediate health
      threat posed by lead- and arsenic-contaminated soil transported from the Eagle-
      Picher site to residential and other highly accessible areas. Cleanup actions on
      the Eagle-Picher site involved establishing proper drainage on the site,
      encapsulating the Eagle-Picher site with clay and cover soil, and establishing
      vegetative cover at the site to protect nearby residents from recontamination from
      wind and water erosion of hazardous materials. Since completion of the cleanup,
      private landowners of a neighboring property have raised concerns about
      contamination of their property resulting from EPA’s cleanup actions.
      Landowners allege that EPA, through its contractors, transported and negligently
      disposed of hazardous substances on their property. The landowners also allege
      that EPA’s actions at the site contributed to the migration of contamination from
      the Eagle-Picher site onto their property. These landowners are currently
      pursuing litigation against EPA and the city of Henryetta for damages incurred as
      a result of the cleanup. EPA asserts that the cleanup met its objectives and
      successfully removed the immediate threat to human health and the environment.

      You asked us to provide information on (1) the environmental cleanup actions
      EPA conducted at the Eagle-Picher Henryetta site and (2) the actions EPA has
      taken in response to neighboring landowners’ concerns related to the Eagle-
      Picher cleanup site. To address these objectives, we reviewed documents on the
      background of the site, EPA cleanup activities, and documents provided by
      private landowners. We also interviewed officials from EPA headquarters and
      Region 6 offices, the Department of Interior’s Bureau of Reclamation and its
      contractor on the Eagle-Picher cleanup, the Oklahoma Department of
      Environmental Quality, a representative of the city of Henryetta, and private
      landowners. In addition, we visited the site and neighboring property. Because



                    GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
the landowners are currently involved in litigation against EPA and others related
to the site cleanup, we did not assess the sufficiency or effectiveness of EPA’s
cleanup or the merits of the landowners’ litigation against EPA. We present the
results of the litigation, to date, but we did not determine the cause of
contamination associated with the cleanup or any liabilities associated with the
cleanup. A map of the Eagle-Picher hazardous waste site and the landowners’
property is included in enclosure I. A detailed narrative chronology of events
related to the Eagle-Picher Henryetta hazardous waste site and legal issues
surrounding litigation against EPA and others is included in enclosure II.

Background

From 1916 to 1968, Eagle-Picher Mining and Smelting, Inc. operated a smelter
producing zinc, cadmium, and germanium on a 70-acre property near Henryetta,
Oklahoma. Eagle-Picher received ore from mines in northeastern Oklahoma and
operated a smelter for recovering metals from the ore. These operations left the
site with high concentrations of arsenic, lead, and zinc in waste primarily located
in four piles on the north and south areas of the site. Eagle-Picher, Inc. ceased
operations on the site in 1968, and donated the property to the city of Henryetta in
1974. The city of Henryetta took steps to develop the property, leasing portions of
it to industrial facilities, including a coal mining company that used the site for
storage and transportation and mined the property to the north of the smelter
extensively. In addition, the city used soil from the site as fill material at locations
throughout Henryetta, including residences, schools, and parks, between 1974 and
1995.

The Comprehensive Environmental Response, Compensation, and Liability Act of
1980 (CERCLA) established the Superfund program to clean up highly
contaminated hazardous waste sites. CERCLA authorizes EPA to respond to
hazardous substance releases that threaten public health or welfare or the
environment in two general ways: (1) removal actions, which generally address
environmental emergencies and are generally short-term actions to diminish the
threat of a release, or (2) remedial actions, which are generally permanent
cleanups that are more costly and take longer to complete. CERCLA authorizes
EPA to compel parties responsible for the contamination to clean up the sites;
allows EPA to pay for cleanups, then seek reimbursement from the responsible
parties; and establishes a trust fund to help EPA pay for cleanups and related
program activities. EPA may enter into settlement agreements with potentially
responsible parties (PRPs) that require them to clean up the site or pay for
cleanup. In addition, PRPs may sue to seek contribution from other PRPs for
their response costs incurred during cleanups.

In 1996, Oklahoma state environmental officials requested assistance from EPA in
addressing contamination on the Eagle-Picher site and other locations throughout
Henryetta. Sampling conducted for EPA indicated soil taken from the Eagle-
Picher site and used as fill in residential and other highly accessible areas,
including areas frequented by children, was contaminated with lead and arsenic.


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Specifically, EPA found contamination at levels presenting health concerns at
three schools, three parks, 93 residential alleys, and 162 residential properties.

EPA’s Cleanup Action Focused on Removing Hazardous Waste from High-
Access Areas and Consolidating and Containing Waste at the Eagle-Picher
Site

In August 1996, EPA initiated a removal action on the Eagle-Picher site and other
locations throughout Henryetta in accordance with CERCLA. EPA determined
that the site, including locations where material from the site was used as fill
material in construction, presented an imminent and substantial endangerment to
public health and the environment because of lead and arsenic contamination in
high-access areas. However, because the site did not affect residential drinking
water or a large population, it did not qualify for proposal to EPA’s list of the
nation’s most contaminated sites, called the National Priorities List. EPA placed a
ceiling of $8 million on EPA’s project cost.

Working in partnership with the Oklahoma Department of Environmental Quality,
EPA’s removal action focused on excavating contaminated soil and wastes used
as fill material in residential and high-access areas such as schools and parks, and
on addressing residential areas contaminated by wind or water erosion from the
site. The cleanup action also included moving contaminated material from these
locations to the Eagle-Picher property; consolidating contaminated material
present at the site; and placing a clay cap, cover soil, and vegetation over the
material to protect nearby residents from further contamination. In January 1997,
EPA officials also obtained an agreement granting access to property to the north
of the Eagle-Picher site from the then-current landowner. This agreement allowed
EPA to address contamination in a pond, located on both properties, which was
filled with coal sediments used by the coal mining company that leased a portion
of the Eagle-Picher site to wash coal after it was mined from the property to the
north. EPA states that it filled this pond with clean soil and uncontaminated
debris such as cement blocks from residential properties to remove the threat of
direct contact with contaminated waste material in the pond.

EPA completed the majority of its cleanup actions on the site in August 1997, with
other drainage work completed in December 1997. On February 4, 1998, EPA
notified the Henryetta Economic Development Authority that all phases of the
design and implementation of the cleanup action at the site were complete and
that the site was ready for appropriate commercial or industrial redevelopment.1
On December 11, 1998, the Oklahoma Department of Environmental Quality sent
a similar letter to the city of Henryetta stating that EPA and the department had
completed a project that identified and buried remaining contamination from the
smelter operation and that no environmental factors precluded construction and
use of the property for industrial or commercial purposes.

1
 A January 2001 deed restriction placed on the Eagle-Picher site prohibited residential, childcare,
or nursing care development.


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EPA Provided Neighboring Landowners with Documents Related to the
Eagle-Picher Cleanup

On October 10, 2000, owners of a portion of the property located to the north of
the Eagle-Picher site submitted a hazardous waste release incident report to
EPA’s National Response Center. One of four private citizens co-owning the
property reported stepping in water near the Eagle-Picher property line and later
experiencing chemical burns on his feet. The landowners retained legal counsel
on October 17, 2000, and made a series of Freedom of Information Act requests
for documents relating to the Eagle-Picher removal action from October 2000
through March 2001. The landowners asserted in communication to EPA that the
removal action failed to eliminate exposure to hazardous substances and failed to
prevent the migration of contaminants through soil erosion into water pathways.
Landowners reported incurring expenses for two environmental engineering
studies, a property survey, laboratory tests on soil and water samples, telephone
calls, travel to EPA Region 6 and EPA headquarters, and medical expenses.

According to EPA regional and headquarters officials, EPA responded
appropriately to the concerns of the landowners, expressed through
correspondence, telephone calls, and requests for information under the Freedom
of Information Act between October 2000 and March 2001. EPA referred the
October 2000 incident report submitted by the landowners to EPA’s National
Response Center to the Oklahoma Department of Environmental Quality, which
responded by reviewing the landowners’ concerns and contacting the landowners
to explain that the levels of contamination present did not warrant action by EPA
or Oklahoma. EPA responded to the landowners’ written requests for information
by advising them of the cost to provide documents, and when the cost proved
excessive, providing the documents for landowners’ counsel to review at EPA’s
offices. Although EPA took several months to respond to some requests for
information, EPA attributes these delays to the time required to retrieve
documents placed in storage, review files to locate appropriate documents, and
determine a cost estimate for providing the documents directly to the landowners.

The landowners disagree that EPA was responsive to their concerns about
contamination on their property and assert that EPA’s systemic attitude has
impeded their efforts to obtain information about the cleanup. The landowners
cited unnecessary delays in providing documents and alleged that EPA attempted
to hide the truth about cleanup actions.

On March 16, 2001, the landowners sued EPA and other parties in federal district
court, seeking among other things to recover cleanup costs under CERCLA
resulting from contamination on their property. The landowners alleged that a
release of hazardous substances from the Eagle-Picher property caused the
contamination and that EPA’s cleanup activities had caused the release. At a
February 2002 meeting with Department of Justice attorneys representing the
United States, the landowners proposed settling its litigation for $602 million: $373
million to remedy alleged contamination on the landowners’ property; $100


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million to remedy the alleged failure of the Eagle-Picher cleanup; $2 million in
damages for trespass, nuisance, and personal injuries; $126 million for economic
losses; and $103,000 in expenses incurred for two environmental engineering
studies, a property survey, laboratory tests on soil and water samples, telephone
calls, travel to EPA Region 6 and EPA headquarters, and medical expenses. The
landowners later revised this figure to $28 million, citing a desire to compromise
and save taxpayer dollars. Justice contacted the landowners in March 2002 and
stated that it would not settle. Among other things, the government argued that
landowners had not incurred any cleanup costs recoverable under CERCLA.
Although the landowners report that they have not cleaned up or contained the
contamination on their property, they argue that some of the costs they have
incurred, including the costs of the environmental engineering studies, are
response costs under CERCLA.

The district court dismissed the suit, holding in part that the landowners
themselves were responsible parties because the release was occurring on their
property, and that under CERCLA responsible parties cannot generally recover
cleanup costs. While there is an exception to this rule for “innocent landowners,”
those that exercised due diligence before purchase in determining whether the
property was contaminated and due care with respect to hazardous substances
found on the property, the landowners failed to assert that they qualified for this
exception. The landowners appealed, contending among other things that they
are not responsible parties and that in any event they qualify as innocent
landowners. The appeal is pending. A more detailed description of the litigation
is included in enclosure II.

Observations

Based on our observations, EPA has carried out its planned activities to remove
lead and arsenic contamination from residential and high-access areas and to
mitigate exposure to and migration of lead- and arsenic-contaminated material
from the Eagle-Picher site. From 1996 to 1997, EPA and its contractors took
actions designed to remove contamination from residential and high-access areas,
establish proper drainage on the Eagle-Picher site, consolidate and cover
hazardous material on the Eagle-Picher site with clay and cover soil, and establish
vegetative cover over the hazardous material on the site to protect nearby
residents against further contamination. Our review of EPA’s records shows that
the Eagle-Picher site and the landowners’ property were used for a number of
industrial activities over the past century, hence determining the cause of current
contamination on either property would be problematic. Further, the removal
action did not purport to eliminate hazardous material at the Eagle-Picher site or
to make the Eagle-Picher site suitable for residential development. Similarly, the
action was not intended to remove contamination from the landowners’ property
because, unlike the other properties where EPA took action, it is not a residential
property where EPA determined that an imminent and substantial endangerment
existed. As we describe above, the district court dismissed the landowners’ suit in
its entirety, and the landowners are appealing on the cleanup cost issues. We note


Page 5     GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
that final judgment regarding the merits of the landowners’ case against EPA is
reserved for the court.

Agency and Other Interested Party Comments

We provided EPA with a draft of this letter for review and comment. EPA agreed
with the letter’s findings and observations and stated that the actions EPA has
taken at the Eagle-Picher site were appropriate to address the human health
threats posed by the site. EPA also provided technical comments and
clarifications, which we incorporated in the letter as appropriate. In addition, we
provided the landowners with an opportunity to review and comment on a draft of
this letter. The landowners disagreed with several of the letter’s findings and
observations. The landowners maintain that EPA’s cleanup of the Eagle-Picher
site failed and assert that EPA’s actions during the cleanup were negligent or
incompetent. Based on our review of EPA records and discussions with EPA,
EPA’s contractors for the cleanup, and state and local officials, we believe EPA
carried out its planned activities at the Eagle-Picher site. Written comments
provided by EPA and the private landowners appear in enclosures III and IV,
respectively.

We conducted our work from May 2003 through August 2003 in accordance with
generally accepted government auditing standards.

                                           -----

As agreed with your office, unless you publicly announce the contents of this
letter earlier, we plan no further distribution of it until 30 days after the date of
this letter. At that time, we will send copies to other interested parties and make
copies available to others who request them. In addition, the letter will be
available on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this letter, please contact me or Peg
Reese at (202) 512-3841. Major contributors to this letter were Richard Johnson,
Joanna McFarland, Kirk Menard, Judy Pagano, and Leigh White.




John B. Stephenson
Director, Natural Resources and Environment

Enclosures


Page 6       GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure I


Map of Henryetta, Oklahoma, Eagle-Picher Hazardous Waste Site and
Adjacent Landowner Property




Note: Eagle-Picher site and adjacent landowner property are not to scale.




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Enclosure II


Narrative Chronology of Events Related to the Eagle-Picher Henryetta
Hazardous Waste Site

This enclosure provides a narrative chronology of events related to the Eagle-
Picher site in Henryetta, from its historical industrial use to EPA’s 1996 CERCLA
removal action and current litigation related to that action. This enclosure
presents private landowners’ concerns about contamination from the Eagle-
Picher site onto neighboring property, culminating in a lawsuit against EPA and
others, and EPA’s response to the landowners’ concerns. Figure 1 provides a
timeline of key events related to the Eagle-Picher site.

Figure 1: Timeline of Key Events




Eagle-Picher Site History

The Eagle-Picher CERCLA site is located in the city of Henryetta, Oklahoma, in
east-central Oklahoma. The property is located northeast of downtown
Henryetta, population 6,096, and is west of the town of Dewar, population 919, in
Okmulgee County. From 1916 to 1968, Eagle-Picher Mining and Smelting, Inc.
(now EaglePicher Inc.) operated a smelter on 70 acres near Henryetta, Oklahoma.
The smelter was used to recover zinc, cadmium, and germanium from ore
received from mines in northeastern Oklahoma. From 1943 to 1949, the U.S.
Defense Plant Corporation also operated on approximately 20 acres of the 70-acre
site.

Eagle-Picher ceased operations on the site in 1968 and donated the property to the
city of Henryetta in 1974. The city never operated the site, but leased portions of
the property beginning in 1975 to four companies: Permocast, Inc. (an aluminum
casting company), P&K Company, Ltd. (a coal mining operation), Klutts Trucking
(coal hauling for P&K Company), and Glover Construction (an asphalt plant).
During P&K’s occupation of the land, the company built a coal sedimentation


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Enclosure II

pond—a pond used to remove coal sediments during coal processing—on the
northern end of the property extending beyond the Eagle-Picher property line.
According to a representative for the city of Henryetta, P&K Company also
conducted extensive coal mining operations on the property to the north of the
Eagle-Picher site under an informal agreement with the then-owner. P&K
Company, Klutts Trucking, and Glover Construction vacated the Eagle-Picher site
prior to EPA’s 1996 removal action. Permocast is still active on about 3 acres near
the northwest corner of the site.

Industrial operations left the Eagle-Picher site with high concentrations of
arsenic, lead, and zinc in waste primarily located in piles on the north and south
portions of the site. Over 170,000 cubic yards of bulk solid waste from the smelter
remained on the site from Eagle-Picher’s operations. During the 1980s, EPA and
Oklahoma state agencies conducted numerous site investigations on the Eagle-
Picher property, identifying high concentrations of several metals in waste piles
and soil located near these piles. Air samples also indicated lead and zinc
contamination near a residence located near the Eagle-Picher site. In 1988, EPA
conducted a site assessment to determine if a removal action was necessary to
address the lack of site security around heavy metal-contaminated zinc ore and
waste piles on the Eagle-Picher site. The assessment was conducted to determine
if lead contamination in waste material posed a threat to public health and welfare
through direct physical contact with the material. However, because sampling
indicated that contamination levels did not present an imminent and substantial
endangerment at that time, EPA decided that no further action was necessary.

In 1996, prompted by heightened concern about material from the Eagle-Picher
site moved to residential and high-access areas, the Oklahoma Department of
Environmental Quality (ODEQ) contacted EPA requesting a CERCLA cleanup of
the site. This time EPA decided to proceed. EPA officials explained that several
factors contributed to the agency’s decision to conduct a removal action at the
site in 1996.

         (1)     The health standard for lead had changed, indicating that lead levels
                 in the area were a greater concern than previously believed.
         (2)     Samples indicated that contaminated material from the Eagle-Picher
                 site was migrating to residences located immediately south of the
                 site.
         (3)     ODEQ informed EPA that material from the Eagle-Picher site was
                 used as fill material in the construction of residential driveways,
                 schools, alleys, and other high-access areas.

A site assessment conducted for EPA by Ecology and Environment, Inc. from
1995 to 1996, prior to the removal action, reported that the site posed a threat to
the public and the environment through the risk of direct contact and off-site
migration of contaminants through wind and water erosion. The assessment
found that contaminated material had traveled through a tributary to a creek
located to the north of the Eagle-Picher site. The assessment also found that


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Enclosure II

residences and businesses located south of the Eagle-Picher site within 500 feet of
the southern waste piles as well as high-access areas where smelter material was
used as fill material were contaminated with lead. Lead exposure can be harmful
to humans when ingested or inhaled, but is particularly harmful to children
because of their increased susceptibility to the adverse neurological and
developmental effects of lead. Ecology and Environment, Inc. also developed a
work plan that provided the conceptual design and cost estimates for the removal
action.

Eagle-Picher Henryetta CERCLA Removal Action

EPA initiated a removal action on the Eagle-Picher site and other locations
contaminated with material from the site in August 1996. EPA and ODEQ entered
into a contract pursuant to CERCLA setting forth the responsibilities of both
agencies in conducting the removal action. The removal action addressed threats
at areas accessible to children, residential properties, and the Eagle-Picher site, as
well as an additional industrial site in the area. The primary concern was the
threat to public health posed by arsenic- and lead-contaminated soil.

As the lead agency under the contract, EPA’s responsibilities included excavating
contaminated soil from residential properties and other highly accessible areas,
restoring these properties to near original condition, and consolidating and
encapsulating waste at the Eagle-Picher site. EPA’s responsibilities at the Eagle-
Picher site also included establishing proper drainage to minimize further off-site
migration of hazardous material, placing a clay cap over the heavily contaminated
areas, and placing cover soil over the entire smelter facility site to protect nearby
residents from further contamination. The initial work plan developed by Ecology
and Environment, Inc. included draining and filling the coal sedimentation pond
located on both the Eagle-Picher site and the property to the north with clean soil
or hazardous material from the northern waste pile, or both. ODEQ’s
responsibilities included establishing a vegetative cover on areas of the Eagle-
Picher site and providing funding to reimburse EPA for 18 percent of the cost of
performing the removal action. In addition, the removal action included the
excavation of waste from a separate former smelter site in the area, operated by
Victory Metals, and the consolidation of this waste at the Eagle-Picher site. EPA
was responsible for excavation and consolidation of the waste, while ODEQ was
responsible for establishing vegetative cover on disturbed areas at the Victory
Metals site and reimbursing EPA for costs in connection with the removal action
at the Victory Metals site.

To conduct the removal action, EPA entered into an interagency agreement with
the Department of Interior’s Bureau of Reclamation (BOR) for engineering and
contracting support for removal activities. BOR contracted with Environmental
Chemical Corporation (ECC) to conduct the engineering work on the site. ECC
began excavating material from residential and high-access areas in August 1996
and completed excavation at three parks, three schools, and 162 residential
properties by July 1997. Relocation and consolidation of waste at the Eagle-


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Enclosure II

Picher site was initiated in February 1997. Small ponds located on the site were
filled with soil and compacted, and the most contaminated smelter material was
relocated to the consolidated waste area on the site. Material from waste piles, as
well as waste excavated at the Victory Metals site and other areas, was also
relocated to the consolidated waste area. BOR officials explained that culverts
were installed to drain water from the consolidated waste area—a large,
contoured plateau—and direct water into natural gullies located on the site.

In addition, in January 1997, EPA and the then-owner of the property immediately
north of the Eagle-Picher site entered into an agreement allowing EPA access to
the property. The property, used for coal mining operations by P&K Company
during its lease on the Eagle-Picher site, contained a portion of the coal
sedimentation pond located on both pieces of land. The access agreement stated
that the landowner consented to officers, employees, and parties authorized by
EPA entering and having continued access to the property for taking samples and
other actions related to the investigation of contamination and for the
performance of a response action including, but not limited to

          •     the use of mechanical equipment,
          •     the removal of contaminated material,
          •     the replacement of removed contaminated material with clean
                material and regrading of replaced material to the property’s near-
                original grade,
          •     the replacement of vegetation whose removal was necessary with
                locally available vegetation, and
          •     other actions necessary to mitigate releases or threats of releases of
                hazardous substances from the property.

EPA contractors began draining the north coal sedimentation pond in March 1997.
EPA officials stated that its contractors placed clean soil and large,
uncontaminated debris into the coal sedimentation pond partially located on this
property. EPA officials explained that although Ecology and Environment, Inc.’s
initial plan mentioned the possibility of placing hazardous waste in the pond, EPA
did not proceed with this plan. EPA and its contractors state that activities
conducted on the private property were limited to draining and filling the coal
sedimentation pond with clean material and installing a large drainage pipe that
directed excess water around the coal sedimentation pond into natural gullies on
the site.

EPA began capping the consolidated waste area with clay donated by a local
company in April 1997. Soil donated by a local strip mine in exchange for leveling
the property provided cover soil for the entire Eagle-Picher site. With technical
support from the U.S. Department of Agriculture’s Natural Resources
Conservation Service and other local entities, vegetation was planted to provide
protection against the erosion of contaminated materials. Sewage sludge
provided by the city of Tulsa and the city of Okmulgee also assisted in treating soil
to facilitate revegetation. EPA completed major removal operations in August


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Enclosure II

1997. Additional drainage work was completed in December 1997, and ODEQ
continued planting vegetation on the site into the spring of 1998.

After completion of the removal action, the city of Henryetta agreed to conduct
long-term maintenance on the Eagle-Picher site. ODEQ has provided technical
expertise on maintenance activities to the city as needed. According to city and
EPA officials, the primary concern in maintaining the site is ensuring the integrity
of the cap placed over the consolidated waste area to prevent exposure of
hazardous waste. EPA officials explained that appropriate maintenance activities
include controlling erosion at the site, particularly around drainage pipes where
water erosion of cover soil could occur. EPA officials stated that they asked the
previous owner of the property north of the Eagle-Picher site to assume
responsibility over maintaining the portion of the cleanup that occurred beyond
the Eagle-Picher property line, but the previous owner declined. According to a
city of Henryetta representative, the city attempted to conduct maintenance on
this property, although the city lacked the authority to enter the property. A city
of Henryetta official noted that the logistics of this arrangement were unclear. In
January 2001, a deed restriction was placed on the Eagle-Picher site that limited
land use to commercial or industrial use and prohibited residential, childcare, or
nursing care development because of the continuing presence of authorized
concentrations of hazardous substances in the soil and groundwater. The deed
restriction also stipulated that the groundwater under the site should not be used
for drinking or industrial uses and that activities on the site must preserve and
protect the cap over the hazardous waste.

Private Landowners’ Concerns about Contamination from the Eagle-
Picher Site onto Neighboring Property

Four private citizens began leasing the property north of the Eagle-Picher site in
October 1999. The property was used by P&K Company for coal mining while it
leased a portion of the Eagle-Picher site from the city of Henryetta, and is located
downwind from the Eagle-Picher site and subject to prevailing southerly winds.
The citizens stated that they had an informal agreement with the previous
landowner to lease the land with the intent of purchasing it later. The citizens
occupied the site to pursue several business developments, including building an
asphalt plant, building and leasing commercial properties on land fronting the
highway, and building a prison facility. The citizens reportedly paid $250,000 to
purchase, transport, and erect an asphalt plant on the property in late 1999. The
citizens also report initiating discussions with a potential investor in 1996 about
financing the construction of a medium-security geriatric prison facility on the
site.

During discussions in May 2003, the landowners told us they believed the land
they intended to purchase was suitable for these development plans because state
and local newspaper articles reported that EPA had cleaned up the Eagle-Picher
site adjacent to the land and deemed it available for industrial business use. The
landowners stated that they assumed from this information that the property they


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Enclosure II

planned to purchase was a good site for locating an asphalt plant and a prison.
Furthermore, the landowners noted that no deed restrictions existed on the
property and no problems were identified by the title search conducted before
they purchased the property. The landowners also stated that they did not realize
the coal sedimentation pond, drained and filled by EPA during the cleanup, was
partially located on their property. When asked whether a survey was conducted
on the property to clarify the property boundary with the Eagle-Picher site before
the purchase was made, the citizens told us that the local bank providing the loan
did not require one. The citizens’ purchase of a portion of the 330-acre property
became final in July 2000.2 The citizens maintained an informal agreement with
the previous owner to purchase the remainder of the property located along the
highway when they were able.

In October 2000, one of the landowners stated that he stepped into water on the
southern portion of his property bordering the Eagle-Picher site and experienced
chemical burns on his feet. On October 10, 2000, a private law firm representing
the landowners called EPA’s National Response Center reporting that a hazardous
waste release occurred on the landowners’ property. From October 2000 through
March 2001, the landowners and their counsel contacted EPA requesting
additional information about the Eagle-Picher site. The landowners also
employed two environmental firms to conduct a site investigation that entailed
testing soil and water on the property and to conduct an assessment of health
risks associated with contamination on the property. The site investigation found
elevated levels of pollutants and concluded that portions of the Eagle-Picher
cleanup had been compromised. The assessment of health risks found that
contamination on the site could pose carcinogenic risks to workers. The
landowners also engaged an engineering firm to survey their property to confirm
the location of the boundary with the Eagle-Picher site.

The landowners reported experiencing additional health problems since the
October 2000 incident, including heart problems, skin lesions, and difficulty
speaking and breathing while on their property. The landowners also indicated
that contamination on their property has left them on the brink of bankruptcy.
The landowners ceased discussions with a potential investor in a prison to be
built on the property in December 2000, citing the discovery of a hazardous
material release on the Eagle-Picher site. The landowners also stated that the
asphalt plant erected on the property was never operated because of the
discovery of hazardous material.

EPA’s Response to Landowner Concerns about the Eagle-Picher Cleanup

EPA responded to the private landowners’ October 10, 2000, incident report to the
National Response Center by referring the incident to EPA Region 6, which
referred the incident to ODEQ. EPA officials explained that when the National

2
 According to a city of Henryetta representative, the landowners purchased approximately 280
acres in 2000.


Page 13        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure II

Response Center receives an incident report, it contacts the appropriate EPA
regional office to determine if immediate response is warranted. EPA officials
explained that events such as train wrecks or airplane crashes would require
immediate response. In this case, EPA determined that the incident was
indicative of a pre-existing condition and did not warrant immediate response.
Region 6 officials referred the report to ODEQ because state officials are closer to
and more familiar with sites in their area. The director of the Waste Management
Division at ODEQ told us that ODEQ handles incident report referrals on a case-
by-case basis and does not have formal procedures in place for responding to
reports. In this case, ODEQ reviewed sampling data supplied by the landowners’
counsel and determined that the site did not need to be cleaned up to residential
standards, and therefore the level of contamination present did not justify a
cleanup. ODEQ officials telephoned the landowners and explained its conclusion
that the contamination did not require any action. On December 17, 2002, one of
the landowners E-mailed EPA Region 6’s Internet Comments E-mail address
reiterating concerns about contamination resulting from the Eagle-Picher cleanup.
An EPA Region 6 official responded to this E-mail with a letter sent January 17,
2003, stating that the concerns raised were the same as, or very similar to, issues
EPA discussed previously with the landowners and their counsel and did not
warrant additional EPA response or action.

From October 2000 through March 2001, the landowners and their counsel
contacted EPA through written correspondence, telephone calls, and Freedom of
Information Act requests seeking information about the Eagle-Picher cleanup.
EPA responded to landowners’ written requests for information by advising the
landowners of the cost to provide documents and, when the cost proved
excessive, providing the documents for landowners’ counsel to review at EPA’s
offices. EPA officials told us the agency responded to landowners’ concerns
appropriately. Although EPA took several months to respond to some requests
for information, EPA explained that delays resulted from the time required to
retrieve documents placed in storage, review files to locate appropriate
documents, and determine a cost estimate for providing the documents directly to
the landowners. For example, EPA responded to the landowners’ December 13,
2000, request for documents on March 12, 2001, attributing the delay to the time
required to review site documents and determine an estimated cost for identifying
and copying appropriate documents. EPA officials stated that document requests
after the landowners filed suit were treated as discovery requests within the
litigation rather than Freedom of Information Act requests and were addressed by
EPA and Department of Justice attorneys.

Landowners Pursue Litigation against EPA, ODEQ, the City of Henryetta,
and Others

The landowners disagree that EPA was responsive to their concerns about
contamination on their property and assert that EPA’s systemic attitude has
impeded their efforts to obtain information about the cleanup. The landowners



Page 14        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure II

cited unnecessary delays in providing documents and alleged that EPA attempted
to hide the truth about cleanup actions.

On March 16, 2001, the landowners filed suit in federal district court against
numerous defendants, including EPA and the city of Henryetta, the two
defendants that are the focus of this report. Alleging that these defendants were
respectively a former and the current owner, the landowners sought response
costs under CERCLA and an injunction under CERCLA requiring EPA and the city
to carry out further cleanup activities on the Eagle-Picher site and to clean up the
landowners’ property. The landowners also brought several claims under state
law, alleging that (1) EPA had trespassed on their property;3 (2) the contamination
from the Eagle-Picher site constituted a public nuisance for which EPA and the
city were responsible; (3) the landowners had suffered personal injury from the
contamination on their property originating from the Eagle-Picher site; and (4) the
landowners had suffered economic loss as a result of the contamination on their
property from the Eagle-Picher site.

On February 12, 2002, the landowners, Department of Justice attorneys
representing EPA in the lawsuit, EPA Region 6 officials, and a congressional staff
member met to discuss the litigation. The landowners proposed settling its
litigation for $602 million: $373 million to remedy alleged contamination on the
landowners’ property; $100 million to remedy the alleged failure of the Eagle-
Picher cleanup; $2 million in damages for trespass, nuisance, and personal
injuries; $126 million for economic losses; and $103,000 in expenses incurred for
two environmental engineering studies, a property survey, laboratory tests on soil
and water samples, telephone calls, travel to EPA Region 6 and EPA headquarters,
and medical expenses. The landowners later revised this figure to $28 million,
citing a desire to compromise and save taxpayer dollars.

Following this meeting, Justice wrote the landowners’ counsel on March 19, 2002,
and stated that it would not settle. Justice stated in its letter that EPA did a good
job in cleaning up the Eagle-Picher site and that Justice has not seen any evidence
that EPA’s work harmed the landowners’ property or that the cleanup action
failed. Justice also stated that no contaminated wastes were placed in the coal
sedimentation pond or on the landowners’ property. With regard to the
landowners’ claims for nuisance, economic losses, and medical expenses, Justice
stated that the landowners failed to follow the appropriate procedure for filing
                                      4
tort claims against the United States. Regarding their claims under CERCLA,
Justice asserted that the landowners had not established that they had already
incurred response costs or that any such costs were necessary. Justice also noted
that the only way for the landowners to recover all of their costs would be to
show that they were “innocent landowners” under CERCLA, meaning among
other things that they exercised due diligence in inquiring into the condition of the
3
  Specifically, the landowners alleged that EPA had dumped both hazardous and nonhazardous
substances on their property, moved and used soil on their property, and erected signs on their
property, all without permission.
4
  The landowners have not pursued these claims.


Page 15        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure II

property before they bought it and due care with respect to hazardous substances
that may be present on their property.

On September 30, 2002, the district court dismissed the landowners’ suit against
EPA and the city.5 The court held that the landowners were PRPs for the
contamination on their property, and that applicable CERCLA case law generally
                                                     6
prohibited PRPs from recovering response costs. Although "innocent
landowners" may bring cost recovery actions under CERCLA, the court noted that
the landowners did not argue that they qualified for this exception to the general
rule prohibiting cost recovery actions by PRPs.7 Because the landowners could
not seek any response costs from EPA and the city, the court did not decide
whether the landowners had in fact incurred such response costs. Because no
federal claims remained, the court accordingly dismissed the state law claims
against the city, although it noted that the landowners could re-file these claims in
state court. In an earlier ruling, the district court also rejected the landowners
attempt to obtain an injunction, holding that because CERCLA does not require
EPA to take remedial action, courts lack the power to order it to do so.8 The
earlier ruling also dismissed the landowners’ state law claims against the United
States, holding that the landowners had failed to follow required administrative
procedures in filing such claims against the United States.

The landowners have appealed that part of the district court’s order dismissing
their claim for response costs under CERCLA. The landowners contend among
other things that they are not responsible parties, that in any event they qualify as
innocent landowners, and that applicable CERCLA case law does not prohibit
them from recovering costs from EPA and the city. The landowners have hired
new counsel to pursue the appeal, which is pending.

City of Henryetta Attempts to Condemn a Portion of Private Property
Neighboring the Eagle-Picher Site

Because the landowners will not allow the city of Henryetta to conduct
maintenance on the portion of the cleanup that occurred on their property, the
city is currently attempting to condemn about 12 acres bordering the Eagle-Picher
site. A representative of the city of Henryetta explained that city officials
attempted to conduct maintenance on the landowners’ property but were told

5
  Young v. United States, No. CIV-01-155-S (E.D. Okla. Sept. 30, 2002).
6
  The court also noted that the landowners could have sought contribution from EPA and the city
for the landowners’ cleanup costs had the landowners themselves been subject to a cleanup order
or a cost recovery action under CERCLA. However, neither circumstance was present in this case.
7
  To be considered an innocent owner, owners must establish that at the time of acquiring the
contaminated property they exercised due diligence in determining whether the property was
contaminated, and that since acquiring the property they have exercised due care with respect to
any hazardous substances present. 42 U.S.C. §§ 9601(35), 9607; see Sinclair Oil Corp. v. Dymon,
Inc., 988 F.Supp. 1394, 1397 (D. Kan. 1997).
8
  In addition, the earlier ruling held that to the extent EPA was not negligent, CERCLA specifically
exempted it from liability under the theory that it had arranged for the disposal of hazardous
substances on the landowners’ property as a result of EPA’s cleanup activities.


Page 16        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure II

they were trespassing and were asked to leave the property. An EPA official
stated that surface water is cutting into a gully along the drainage pipe that
terminates into a natural drainage pathway on the landowners’ property. This
gully needs to be repaired because, if left unchecked, it could eventually damage
the drainage pipe or cut into the hazardous substances encapsulated on the site.




Page 17        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure III


           Comments from the Environmental Protection Agency




Page 18     GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure IV


                    Comments from Private Landowners




Page 19    GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure IV




Page 20    GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure IV




Page 21    GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure IV




Page 22    GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure IV


GAO Comments

The following are GAO’s comments on the private landowners’ undated letter,
received by GAO on August 26, 2003.

1. Determining the cause of contamination associated with the cleanup was
beyond the scope of our review. We note, however, that the cause of
contamination on the landowners’ property is not clear. As our report states, our
review of EPA’s records shows that the Eagle-Picher site and the landowners’
property were used for a number of industrial activities. Federal and state
officials told us that at least some contamination was present on the landowners’
property before EPA conducted its removal action. Therefore, our report states
that determining the cause of current contamination on either property would be
problematic.

2. As we reported, in addition to EPA’s Action Memorandum, EPA’s contractor,
Ecology & Environment, Inc., prepared a Removal Site Assessment Report that
included a Conceptual Closure Design & Work Plan for the removal action. This
document provided the conceptual design for the removal action. We agree that
BOR did not submit any design plans. However, EPA contracted with BOR to
conduct the engineering work to implement EPA’s design plans for the removal
action, not to provide additional design plans.

The landowners assume that we spoke to many workers about their accounts of
work performed during the cleanup and that we found inconsistencies between
these accounts and EPA’s plans for the site. While we reviewed the affidavits
obtained by the landowners from two workers who performed work on the site, it
was beyond the scope of our review to interview every worker associated with
EPA’s cleanup. EPA officials and EPA contractors told us that the actions taken
during the cleanup were consistent with the design plan.

3. The landowners assert that the drainage system installed by EPA and its
contractors was installed on both the Eagle-Picher site and the landowners’
property, included a drainage pipe that was installed backwards, and was
designed to transport and deposit contaminated material onto their property. Our
report states, and we have explained our role and scope on this review to the
landowners on numerous occasions, that we did not evaluate the sufficiency or
effectiveness of EPA’s actions during the cleanup. However, we note that EPA
obtained an agreement with the then-current owner of the adjacent property north
of the Eagle-Picher site that allowed EPA to access the property to conduct a
range of work during the removal action, including installing a portion of the
drainage system. EPA officials told us that a portion of the drainage system was
installed on the adjacent property to direct drainage around the consolidated
waste area on the Eagle-Picher site and into natural gullies located on the
adjacent property. Regarding the installation of the drainage pipe, we observed
the drainage pipe during our site visit, but were unable to determine whether the
pipe was installed backwards or not. We disagree with the landowners’ assertion


Page 23        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure IV


that the drainage system was designed to transport and deposit contaminated
material onto the landowners’ property. According to BOR’s Removal Action
Report, drainage control measures were constructed to significantly minimize the
potential for off-site migration of contaminants by capturing and redirecting water
on the site. We note that EPA and city of Henryetta officials told us the drainage
area on the landowners’ property needed maintenance, and that city workers
were refused access to the landowners’ property. We further note that the
removal action purported to mitigate migration of contaminants, not to prevent
any migration of contaminants.

The landowners also assert that the party responsible for designing and installing
the drainage system was negligent or grossly incompetent. As our report states,
because the landowners are currently involved in litigation against EPA and
others, we did not assess the sufficiency of the cleanup or determine any
liabilities associated with the cleanup.

4. Regarding the landowners’ claims of trespass, we note that EPA obtained an
access agreement signed by the former owner on January 20, 1997. The
agreement authorized EPA to conduct a range of activities on the property,
including the use of mechanical equipment, removal and replacement of
contaminated material, and other actions necessary to mitigate releases or threats
of releases from the property. With regard to whether hazardous material was
placed on the adjacent property during the cleanup, officials from EPA, BOR, and
Environmental Chemical Corporation (BOR’s contractor) have all stated that,
although EPA’s initial plans included placing hazardous waste into the pond as an
option, EPA and its contractors did not proceed with this plan. Rather, EPA and
its contractors state that uncontaminated debris such as cement blocks were
placed into the pond, along with clean soil.

Regarding the landowners’ assumption that we conducted our own sampling and
testing to ascertain the truth about what was deposited into the pond located on
both properties, as we stated in comments 1 and 3, determining the cause of
contamination or any liabilities associated with the cleanup was beyond the scope
of our review.

5. We disagree with the landowners’ characterization of our report statements
regarding ODEQ’s response to the landowners’ hazardous waste incident report.
Our report does not state that ODEQ made the determination that the levels of
contamination did not warrant further action by EPA because EPA raised the
required levels for action in 2001. Rather, our report states that ODEQ reviewed
sampling data supplied by the landowners’ counsel and determined that the site
did not need to be cleaned up to residential standards, and therefore the level of
contamination present did not justify a cleanup. While we reviewed the
landowners’ environmental studies, it was beyond the scope of our review to
determine the cause of contamination or any liabilities associated with EPA’s
removal action.



Page 24        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
Enclosure IV


Based on our observations, EPA carried out its planned activities to remove
contamination from residential and high-access areas and to mitigate exposure to
contaminated material from the Eagle-Picher site. Federal, state, and local
officials told us that EPA’s removal action met its objectives. We note that the
removal action did not purport to eliminate hazardous material at the Eagle-
Picher site or to remove contamination from the landowners’ property because
the property was not a residential property.

6. We have no response to the landowners’ comments regarding litigation against
EPA and others. As stated in our report, we present the results of litigation but
because the landowners’ litigation is ongoing, we did not assess the merits of the
landowners’ litigation against EPA. We state, however, that final judgment
regarding the merits of the landowners’ case against EPA is reserved for the court.




(360336)



Page 25        GAO-03-1051R EPA’s Cleanup of the Eagle-Picher Henryetta Hazardous Waste Site
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