Cost Evaluation & Recovery

CERCLA Cost Recovery – Former Pesticide Plant

Paul Roux, P.G.


Roux Associates was retained by the defendant, former owner and operator of a pesticide formulation plant, in a case where the current owner was claiming lost property value due to soil contamination by pesticides beneath buildings and pavement. Because of the presence of the pesticides, the site had been listed on the California Superfund site list. The plaintiff claimed to be an innocent landowner under CERCLA. Roux Associates evaluated technical reports and deposition testimony, developed expert opinions regarding the consistency of the plaintiff’s environmental due diligence efforts with the National Contingency Plan, and provided testimony both in deposition and at trial.

The court found that the plaintiff was not an innocent landowner and was responsible for a portion of any clean-up costs. Roux Associates provided additional deposition testimony regarding apportionment of liability. The case was settled prior to the second trial.

Chlorinated Solvents

Paul Roux, P.G.


Roux Associates was retained to evaluate the sources and timing of release for various chlorinated solvents at a site in northern California. The site was formerly used by solvent formulating and storage facilities but was currently being redeveloped for residential use. Since the site was formerly used by multiple parties, apportionment of responsibility among then was necessary. Further, the consistency with the NCP of remedial actions undertaken by the current owner was in question.

Roux analyzed all of the available data, including soil analytical data and deposition testimony of former operators, and formulated opinions regarding the sources of the various contaminants and the appropriateness of remedial actions already completed. Inconsistencies with the NCP of key portions of the investigation leading to remediation were also defined. Our client was able to settle out of the case under favorable terms.

Former Refinery

Neil M. Ram, Ph.D., LSP, CHMM

North Carolina

Roux Associates evaluated work conducted by the USEPA at a former oil refinery to determine whether or not such work was consistent with the requirements of an Administrative Order on Consent (AOC), the National Contingency Plan (NCP), a site Work Plan, and the Administrative Record along with various USEPA guidance.

Roux Associates concluded that work was conducted outside the scope of the AOC and also did not meet the requirements for including information within Action Memoranda as identified in OSWER Directive No. 9360.3-01. The Action Memoranda also did not describe the full extent of the removal, ultimate disposition of contaminants, and what would be left at the Site after removal is completed, along with the technical feasibility of the proposed action(s).

Former Wood Treating Facility / Superfund Site

Neil M. Ram, Ph.D., LSP, CHMM

New Jersey

Roux Associates was retained to evaluate USEPA’s response actions at a former wood treating facility/Superfund site in New Jersey, specifically to determine whether or not USEPA was entitled to recover $235 million in past costs from the PRP. The PRP alleged that USEPA selected the remedial action for the site without sufficient data and that less costly remedial alternatives were available to the USEPA.

Roux’s work included a comparison of the removal and remedial response actions performed by the USEPA against NCP requirements and USEPA guidance. Specifically, Roux Associates evaluated the selection and performance of the response actions at the site versus the requirements set forth in the NCP, including but not limited to 40 CFR 300.430 (RI/FS and Selection of Remedy) and 40 CFR 300.435 (RD/RA). Roux Associates also compared the site administrative record and community participation activities against the NCP requirements to determine if community participation activities were conducted in substantial compliance with the NCP.

Based on this evaluation, Roux Associates concluded that (1) the USEPA’s response actions for the site were not inconsistent with the requirements of the NCP, (2) USEPA’s decisions were not arbitrary and capricious, and (3) response costs incurred were fully recoverable by USEPA.

Analysis of Reimbursable Damages

Peter Alvey, P.E.


Roux Associates was retained by an industrial client to review the environmental costs claimed by the purchaser of 80 of its former facilities as damages under an environmental indemnification agreement established at the time of the sale. As part of its analysis in this case Roux reviewed technical documents, as well as, over claimed costs. Roux was able to identify claimed expenses which were not reimbursable under the agreement, these costs included; routine business expenses, compliance costs and costs which pre-dated the agreement. Roux constructed a detailed spreadsheet which applied various liability allocations, recoveries from third-parties (including insurance recoveries) and calculated pre-judgment interest.

Fraudulent Conveyance Analysis

Neil M. Ram, Ph.D., LSP, CHMM

Multiple U.S. Locations

Roux Associates, Inc. assessed environmental legacy liabilities at hundreds of former wood treating, thorium, mining, petroleum, perchlorate, agricultural-chemical and other industrial operations of a publically traded company. The company had been previously spun off from a parent company, filed for bankruptcy and then filed suit against the parent company alleging that the spinoff was a fraudulent conveyance.

Roux Associates estimated the future costs at the time of the spin to assess and remediate properties that were disclosed in connection with the spin based on, among other things, professional experience, engineering methods, site-specific information and guidance provided in ASTM E2137-06 (Standard Guide for Estimating Monetary Costs and Liabilities for Environmental Matters) and ASTM E-2173-07 (Standard Guide for Disclosure of Environmental Liabilities).

Roux Associates identified hundreds of additional properties that were not disclosed at the time of the spin to estimate the total environmental liabilities for both disclosed and undisclosed properties. In addition, Roux Associates evaluated the Asset Retirement Obligations (AROs) at several facilities.

Roux Associates also assessed the adequacy of current environmental reserves at about a dozen properties under Generally Accepted Accounting Guidance (GAAP) considering the Statement of Position 96-1 (1997 AICPA, Inc., Journal of Accountancy), Statement of Financial Accounting Standards No. 5, Accounting for Contingencies (March 1975, Financial Accounting Standards Board) and professional guidance and experience.

Fraudulent Conveyance Claim – Chemical Company

Neil M. Ram, Ph.D., LSP, CHMM

Multiple U.S. Locations

Roux Associates, Inc. evaluated a fraudulent conveyance claim brought on by the Department of Justice (DOJ) against a large chemical manufacturing company in which DOJ claimed that the company did not properly report its environmental reserves associated with various contaminated sites to the SEC. Many of these sites were impacted with vermiculite that had been mined and then transported to various distribution centers throughout the U.S. The environmental portfolio also included Superfund sites contaminated with solvents, metals and other hazardous substances.

In addition to assessing future costs for assessment and remediation at multiple sites across the United States, Roux reviewed the methods and procedures by which the company established its environmental reserves. Roux relied upon its professional experience as well as applicable industry guidance including ASTM and GAAP.

Roux also developed specific costing methods to estimate environmental assessment and remediation for vermiculite-impacted sites.

Industrial Manufacturing Corporation

Doug Swanson

Multiple U.S. Locations

Roux Associates was retained by a law firm to evaluate existing environmental studies on 12 industrial sites located in eight States on behalf of the purchaser of a division of a major industrial valve manufacturer. As a result, Roux Associates conducted seven Remedial Investigations (RIs), Feasibility Studies (FSs), and baseline risk assessments to assist the purchaser in a CERCLA cost recovery suit for environmental liabilities from the previous owner. All studies were performed in strict accordance with the National Contingency Plan. Chemical constituents of concern at the sites included organic solvents, polychlorinated biphenyls and metals. Roux Associates reviewed all available information and implemented RIs that included performing soil-gas surveys, installing monitoring wells, conducting slug tests, and sampling surface waters, groundwater, and stream sediments. In addition, FSs and risk assessments were performed for each of the sites to determine the potential current and future risks to human health and the environment associated with past chemical handling and disposal practices. Costs to remediate each site were developed. Four experts from Roux Associates gave deposition testimony in the cost recovery litigation. The case was settled favorably to the purchaser prior to trial.

Joint Review of Claim by Midwest Chemical & Explosive Co.

Daniel Sullivan, P.G.

Delaware & Pennsylvannia

Roux Associates was approached jointly by two clients, an insurance company client and one of our industrial clients, to help them both settle a claim for environmental liabilities. Our two clients requested that we provide a fair and balanced estimate of past and future environmental costs at seven chemical plants. Roux performed site visits, reviewed records at company headquarters and at state regulatory offices, and developed site-specific environmental estimates to complete site clean-up to risk based standards.

Within six months of being retained, Roux was successful in assisting the two parties in reaching an amicable settlement regarding the amount of environmental costs. By sharing Roux Associates as a resource, both parties to the settlement saved significant in litigation costs and duplicative consulting costs, and a settlement was reached much sooner because both parties were starting from the same environmental cost estimate.

Soil & Groundwater Contamination – Coal Tar Refining Facility

Paul Roux, P.G.


Roux Associates was retained to provide expert opinions in a CERCLA cost recovery case involving soil and ground -water contamination at a former coal tar refining facility. Roux provided opinions regarding the sources, extent and probable remedial costs for various contaminants, including both coal tar constituents and chlorinated solvents, and apportionment of responsibility for remedial costs between the current and former owners/operators of the site. Roux was able to demonstrate that our Client’s contribution to the documented soil contamination was substantially less than claimed by the plaintiff. In addition an evaluation of probable future cleanup costs indicated our Client’s share of the total projected cost was substantially less than claimed.

The Court found favorably for our client.

Truck Fueling Station

Neil M. Ram, Ph.D., LSP, CHMM


Modeling coupled with well-grounded cost estimating methods was used to determine the site-specific cleanup costs at a truck stop where a mixture of gasoline and diesel fuel had been released a several month period.

The Hydrocarbon Spill Screening Model was used to estimate a NAPL plume length based on the subsurface geology, groundwater gradient, groundwater hydraulic conductivity, and the viscosity of the gasoline/diesel NAPL mixture. Based on the modeled range in NAPL plume length, a remediation system was designed consisting of soil vapor extraction (both vapor points and vapor recovery trenches), air sparging, and direct NAPL recovery wells and trenches.

Costs were then estimated for various response action phases including Mobile Enhanced Multi-Phased Extraction, additional assessment, system design, installation and system operation, post-remediation monitoring and reporting, and system and well decommissioning. An estimated cost range was derived using RACERTM (for system remedial design, construction, and OM&M) and time-and-materials projections (for site assessment and reporting) including a 10% contingency on all component costs.