Making a Polluter Pay Up: US v Casmalia


McCutcheon Doyle, a member of the Casmalia Steering Committee, retained Nic Smith in U.S. v Casmalia, a case in which the EPA was suing to obtain funds for the cleanup of a Superfund site.

The Story:

The Casmalia Resources Superfund Site is a 252-acre inactive commercial hazardous waste treatment, storage and disposal facility located in Santa Barbara County. The industrial and commercial waste material at the site included sludge, pesticides, solvents, acids, metals, caustics, cyanide and non-liquid polychlorinated biphenyls (PCBs). Facing multiple regulatory enforcement actions, the site's owners and operators stopped taking shipments of waste material and abandoned efforts to properly close and clean up the site. The conditions at the site presented imminent and substantial endangerment to human health and the environment so the EPA, using Superfund authorities, took emergency actions to stabilize the site, including collecting, treating and disposing of contaminated subsurface liquids, controlling the flow of storm water and stabilizing the landfills.


The EPA finances these costs through legal settlements with the generators of the waste disposed of at Casmalia, as well as with the site's owners and operators. The EPA settled with fifty-four of the largest contributors of waste to the site and a group of over 750 Casmalia customers that sent relatively small amounts of waste to the site. The former owners and operators are also, of course, expected to apply their own resources to the site's cleanup. The EPA had to file suit against Casmalia Resources, Hunter Resources and Kenneth H. Hunter, Jr., the facility owners and operators. Kenneth Hunter, a former owner of the site, tried to get out by making a de minimus offer to the EPA. The EPA's attorneys, however, wanted to know if he was really as broke as he claimed to be.


Nic Smith began work on the case by reviewing a special database that lists owners of property based upon WHERE the tax bill is sent. This is a particularly interesting way of assessing what someone holds, especially when you may only know the person's name. It is very helpful in uncovering possible unrecorded partnerships, joint ventures, etc. Using that database, Nic uncovered a number of oil and gas producing properties that belonged to Hunter.


Bolstered by that find, Nic then reviewed local business newspaper archives, court records and fictitious business names and found that Hunter was involved in a number of companies, including Hunter Dos Tres Corporation, Hunter Edison Oil Company and The Hunter Trust, etc. From that beginning, Nic was able to discover Hunter's ownership interest in a golf course and restaurant, along with other assets.


In the end, we were able to show that Hunter not only was not "broke," but he actually had abundant resources from which to pay for his share of the cleanup and the EPA was able to negotiate a much fairer settlement with the former owner of almost $7 million.

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