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City, county lawyers help negotiate settlement in environmental lawsuit against Safety-Kleen [Updated]

April 16, 2010 | 12:29 pm
In a joint effort with Southern California’s air quality management district and prosecutors in four surrounding counties, Los Angeles city lawyers helped negotiate a $15-million settlement with a company accused of illegally selling smog-causing cleaning solvents to auto shops and other businesses across Southern California.

The settlement with Safety-Kleen Systems Inc., finalized this week, provided some welcome news to Los Angeles city officials who are trying to close a $222-million shortfall this fiscal year.

The Texas-based company, which markets itself on its website as a green operation that “enables thousands of businesses to stay in balance with the environment,” admitted no wrongdoing but agreed to end the litigation by paying $3 million in penalties to the South Coast Air Quality Management District.

The rest of the money will be divided between the city of Los Angeles city attorney’s office and the district attorneys’ offices of Los Angeles, Orange, Riverside and San Bernardino counties. City lawyers plan to put their $2.4-million portion into an account dedicated to enforcing consumer and environmental protection laws. They hope the money will help them close the office’s deficit this year.

An attorney for Safety-Kleen could not immediately be reached for comment.

[Updated at 1:13 p.m.: Eric Zimmer, executive vice president of Safety-Kleen, said the vast majority of the company’s customers in the South Coast area have transitioned from petroleum-based solvents to water-based cleaning materials over the last decade. He added that some of the company’s customers told Safety-Kleen representatives they were exempt from the air quality management district’s rules barring certain cleaning materials.

“It is a very complicated set of regulations,” Zimmer said. “The bottom line there was misinterpretation of the implication of those rules by Safety-Kleen and our customers, and the role of Safety-Kleen in the compliance on behalf of customers.”

“We are taking full responsibility and putting this matter behind us,” he said.

Aiming to reduce smog in the mid-1990s, the South Coast Air Quality Management Board passed regulations restricting petroleum-based cleaning solvents that were widely used by auto shops and manufacturers to cut through grease and clean metal parts.

By 2002, the air quality board had virtually banned cleaning solutions that contain what are known as volatile organic compounds -- components of the petroleum-based products that evaporate into the air and react with other pollutants to form smog. Safety-Kleen was a major critic of the original regulations, air quality officials said.

Initially, air quality inspectors worked to ensure that automotive shops and other businesses were complying with the rules, but later shifted their focus to the companies selling banned cleaning materials.
Safety-Kleen was a major supplier to many of businesses caught violating the rules, officials said.

Even after the air quality board explicitly banned the sale of the solvents in 2008, prosecutors and city lawyers allege that Safety-Kleen continued to provide non-compliant part-cleaning products to customers throughout the Southland -- in some cases claiming the products were legal.

Officials at the Air Quality Management District said the use of the non-compliant Safety-Kleen products amounted to half a ton per day of excess emissions from volatile organic compounds -- the equivalent of what a medium-size oil refinery would have produced.
“These are very, very large emissions,” said Joe Panasiti, senior deputy district prosecutor for the South Coast Air Quality Management District. “While they are very small individually, collectively they are enormous.”
Over the three-year period of the investigation, penalties could have ranged as high as $70,000 per day in each location where non-compliant Safety-Kleen products were being used, said Los Angeles Special Assistant City Atty. Vince Sato.

“Safety-Kleen’s exposure to civil penalties is almost a quarter of a billion dollars,” he said. “So we got their attention.”

As part of the settlement, the company agreed to pay for the violations of their customers in the South Coast basin as well as the penalties levied against their company.

The company is also barred from “making untrue or misleading statements” to the public about its cleaning materials that contain volatile organic compounds, and will be required to train its sales representatives about compliance with the region’s air quality rules and California law.

“Suppliers need to be aware that there is an enforcement tool available and we’re on it,” Panasiti said. “Our resources are pretty vast when you include these six agencies together, so we’re hoping it sends a message and we don’t see that widespread non-compliance.”

-- Maeve Reston