California Department of Toxic Substances Control v. Porcelain Metals Corporation

Filing 69

CONSENT DECREE BETWEEN PLAINTIFF AND DEFENDANT PORCELAIN METALS CORPORATION; EXHIBIT by Judge George H. Wu Related to: Order, Terminated Case, 68 . (See document for full details) (mrgo)

XAVIER BECERRA
Attorney General of California
EDWARD OCHOA
Supervising Deputy Attorney General
OLIVIA KARLIN
State Bar No. 150432
JOHN W. EVERETT
Deputy Attorneys General
State Bar No. 259481
600 West Broadway, Suite 1800
San Diego, CA 92101
P.O. Box 85266
San Diego, CA 92186-5266
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]

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Attorneys for Plaintiff Department of Toxic
Substances Control

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IN THE UNITED STATES DISTRICT COURT

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FOR THE CENTRAL DISTRICT OF CALIFORNIA

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CALIFORNIA DEPARTMENT OF
TOXIC SUBSTANCES CONTROL,

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[PROPOSED] CONSENT DECREE
XXXXXXXX
Plaintiff, BETWEEN PLAINTIFF AND
DEFENDANT PORCELAIN METALS
CORPORATION; EXHIBIT

v.

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Case No.: 2:16-cv-09308-GW-E

PORCELAIN METALS
CORPORATION, a dissolved
Kentucky corporation,

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Defendant.

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I.

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INTRODUCTION
1. Plaintiff the California Department of Toxic Substances Control

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(“DTSC” 1 or “PLAINTIFF”) filed a Complaint in this matter pursuant to the

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Comprehensive Environmental Response, Compensation, and Liability Act

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Please refer to section V, below, for the list of defined terms.
1 [Proposed] Consent Decree Between Plaintiff
and Defendant

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(“CERCLA”), 42 U.S.C. § 9601 et seq. against Defendant Porcelain Metals

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Corporation (“PORCELAIN METALS”). In the Complaint, PLAINTIFF seeks to

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recover its response costs under CERCLA section 107(a), 42 U.S.C. § 9607(a)

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(“RESPONSE COSTS”), related to releases and threatened releases of hazardous

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substances at and emanating from the properties located at 6904 East Slauson

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Avenue, City of Commerce, County of Los Angeles, California, identified by

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Assessor’s Parcel Number (APN) 6356-017-028 (“LOT 2” or the “PROPERTY”),

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and 6840 East Slauson Avenue, identified by APN 6356-017-027 (“LOT 1”). LOT

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1, LOT 2, and the areal extent of contamination at and emanating from those lots is

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collectively the “SITE.” Additionally, PLAINTIFF seeks declaratory relief under

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CERCLA section 113(g)(2), 42 U.S.C. § 9613(g)(2) that PORCELAIN METALS is

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jointly and severally liable for future response costs to be incurred by PLAINTIFF

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to address releases and threatened releases of hazardous substances at the SITE.

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II.

STATEMENT OF RELEVANT FACTS
2. PORCELAIN METALS is an administratively dissolved Kentucky

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corporation whose powers, rights, and privileges are forfeited in California and in

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Kentucky, except as necessary to wind up and liquidate its business and affairs.

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PORCELAIN METALS’ powers, rights, and privileges to wind up and liquidate its

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business and affairs in California will, upon revivor, include the right to sell the

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PROPERTY.
3. PORCELAIN METALS is the current owner of the PROPERTY (LOT

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2).
4. From the 1940s until 1990, the California Metal Enameling Company

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(“CAMEO”) engaged in the manufacturing of porcelain-enameled coated products

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on LOTS 1 and 2, and PLAINTIFF has alleged in the Complaint that those

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operations resulted in the release of hazardous substances into the soil and

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groundwater.

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2 [Proposed] Consent Decree Between Plaintiff
and Defendant

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5. Kenfield Corporation acquired LOTS 1 and 2 in 1952, and merged into

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CAMEO in 1984. CAMEO became the owner of LOTS 1 and 2 as the corporate

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successor by merger to Kenfield Corporation.

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6. CAMEO merged into PORCELAIN METALS in 1990.

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7. Through its merger with CAMEO, PORCELAIN METALS became the

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owner of LOTS 1 and 2 and the owner and operator of the porcelain-enameling

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facility. While record title to the PROPERTY remains in the name of Kenfield

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Corporation, PORCELAIN METALS is the owner of the PROPERTY as successor

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by merger to Kenfield Corporation and CAMEO. PORCELAIN METALS has

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alleged that it has received significant expressions of interest from potential

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purchasers of Lot 2.

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8. Materials known to have been used in the manufacture of porcelain-

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enameled metal products at LOTS 1 and 2 include, but are not limited to: chromic

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acid, alkaline potassium solutions, sulfuric acid, sulfates, potassium dichromate,

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lead, zinc, cadmium, and nickel.

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9. In or around June 1992, in connection with termination of its business in

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California, PORCELAIN METALS hired National Environmental Consultants, Inc.

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(“NECI”) to manage cleanup and demolition activities at the SITE. Demolition of

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all structures at the SITE was completed in December 1992.

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10. Prior to demolition, NECI found hazardous concentrations of chromium,

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lead, cadmium, nickel, and zinc in waste samples collected from the surfaces of

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machinery, and in trenches and pits at the SITE, among other places. Concrete

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sampling showed that chromium had been absorbed in the concrete at the “Pit 2”

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area of the SITE.

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11. In 1993, PORCELAIN METALS retained NECI to perform a phase II

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environmental investigation to investigate contamination underneath certain areas

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of LOTS 1 and 2, identify any chemicals of concern, and define the vertical and

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lateral migration of any chemicals of concern underneath LOTS 1 and 2. NECI
3 [Proposed] Consent Decree Between Plaintiff
and Defendant

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found that the soil in portions of the SITE was contaminated with hexavalent

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chromium, which had migrated vertically and laterally to an extent that was

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estimated by NECI.

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12. DTSC began oversight of the investigation and cleanup at the SITE

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pursuant to a voluntary cleanup agreement with PORCELAIN METALS executed

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in July 1995.

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13. Pursuant to the voluntary cleanup agreement, PORCELAIN METALS

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conducted investigation and/or cleanup activities at the SITE. DTSC issued a no

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further action letter for LOT 1 in 2001. PORCELAIN METALS sold LOT 1 that

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same year, and the new owner subsequently redeveloped LOT 1. PORCELAIN

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METALS ceased investigation and cleanup activities at LOT 2 shortly after the sale

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of LOT 1. PORCELAIN METALS alleges that it was financially unable to

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continue the work on LOT 2.

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14. In April 2006, DTSC terminated the cleanup agreement because

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PORCELAIN METALS had ceased investigation and cleanup activities, and DTSC

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determined that a threat to human health and the environment existed as a result of

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hexavalent chromium and other hazardous substances in the groundwater and soil.

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15. In June 2006, DTSC issued Imminent and Substantial Endangerment

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Determination and Order, and Remedial Action Order, Docket No. IS&E 05/06 –

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015 (“IS/E Order”) naming PORCELAIN METALS as a respondent. The IS/E

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Order required PORCELAIN METALS to implement removal actions, complete a

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remedial investigation/feasibility study, prepare a remedial action plan or removal

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action workplan, and comply with related legal requirements.

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16. In 2007, DTSC determined that PORCELAIN METALS was out of

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compliance with the IS/E Order because of the ongoing presence of hazardous

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substances at the LOT 2 SITE, including hexavalent chromium in groundwater at

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concentrations exceeding the drinking water maximum contaminant level (“MCL”).

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4 [Proposed] Consent Decree Between Plaintiff
and Defendant

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17. DTSC determined that additional investigation and other response

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actions, including long term groundwater monitoring, would be required at the LOT

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2 SITE to address the release and threatened release of hexavalent chromium and

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other hazardous substances migrating through the soil and groundwater.

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18. In 2007, DTSC prepared a time critical removal action workplan to

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address the removal of soil contaminated with chromium and hexavalent chromium.

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In 2008, DTSC revised that removal action workplan and implemented it through a

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contract with URS Corporation.

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19. PORCELAIN METALS alleges that it also went out of business in

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Kentucky, and its operations and facilities there were closed and liquidated. The

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former owner of PORCELAIN METALS, John H. McBride, died in 2011. The

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person now with corporate authority to act on behalf of PORCELAIN METALS is

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Carolyn M. McBride, who is the widow of Mr. McBride and the Sole Officer and

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Registered Agent of PORCELAIN METALS in Kentucky. PORCELAIN

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METALS was administratively dissolved by the Kentucky Secretary of State in

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2015 because it failed to file an annual report.

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20. From 2010 through 2015, DTSC conducted extensive soil and

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groundwater investigations at the LOT 2 SITE to further identify areas of

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environmental concern. DTSC completed a series of removal actions to remove

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hazardous substances that posed a threat to human health and the environment.

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21. DTSC excavated soils contaminated with hazardous substances that

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posed a threat to groundwater, including, but not limited to, chromium, hexavalent

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chromium, cadmium, lead, and arsenic. These activities have lowered

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concentrations of hazardous chemicals, removed contaminated soils, and

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significantly reduced or mitigated impacts to groundwater.

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22. A water production well, “Commerce 3D,” was constructed in 1946 at

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5960 Garfield Avenue, City of Commerce (APN 6356-017-900), which is adjacent

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to the southerly lot line of LOT 2. The well parcel was formerly owned by Park
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and Defendant

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Water Company and was conveyed to the City of Commerce in 1978. The well

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was used for drinking water purposes until it was removed from service in 2001,

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when levels of chromium, hexavalent chromium, and volatile organic compounds

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(“VOCs”) were detected in well water samples. DTSC coordinated with the City of

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Commerce to remove the well from service to reduce the risk of human exposure

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and reduce the need for groundwater remediation.
23. DTSC has incurred, and expects to continue to incur, costs of “response,”

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as that term is defined in CERCLA section 101(25), 42 U.S.C. § 9601(25), in

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taking actions at or related to the contamination at the SITE. The response actions

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include, but are not limited to, the following activities:

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a. Sampling and analysis;

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b. Performing inspections and preparing reports;

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c. Reviewing work plans for investigation and remediation;

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d. Conducting SITE visits and overseeing field work;

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e. Meeting with the potentially responsible party(ies);

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f. Complying with the California Environmental Quality Act; and

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g. Preparing decision documents regarding SITE cleanup and

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monitoring and implementing additional response actions

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concerning the SITE.

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24. PLAINTIFF’s response actions were required to remove the hazardous

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substances released and threatened to be released at the SITE. DTSC’s response

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actions were not inconsistent with the National Contingency Plan, 40 C.F.R. Part

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300.

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25. As of March 2018, PLAINTIFF’s unreimbursed RESPONSE COSTS

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related to the SITE exceeded $3.5 million. PLAINTIFF will continue to incur

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RESPONSE COSTS related to the LOT 2 SITE.

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26. On November 23, 2016, DTSC recorded a statutory lien in the amount of
$2,925,211.32 on the PROPERTY in the Los Angeles County Recorder’s Office.
6 [Proposed] Consent Decree Between Plaintiff
and Defendant

27. PORCELAIN METALS has failed to pay property taxes to the Los

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Angeles County Tax Collector. The amount owed to the Tax Collector amounted

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to $137,107.71 as of August 31, 2018. The Tax Collector scheduled a closed bid

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auction to sell the PROPERTY for tax arrearage on May 31, 2018, but that sale was

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taken off calendar due to the pendency of this settlement and Consent Decree.
28. PORCELAIN METALS’ corporate status in California has been forfeited

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by the Franchise Tax Board (“FTB”), and PORCELAIN METALS shall pay the

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taxes and penalties assessed by the FTB and anticipates receiving a certificate of

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good standing within six to eight weeks of the lodging of this Consent Decree.
29. PORCELAIN METALS has been administratively dissolved in

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Kentucky.
30. PORCELAIN METALS has alleged that its only assets are the

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PROPERTY and general liability insurance policies, and that it now seeks to settle

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this action on the terms set forth herein. By signing this Consent Decree,

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PORCELAIN METALS affirms under penalty of perjury that the financial

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information provided to DTSC is true and correct. In making this determination of

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PORCELAIN METALS’ finances and in entering into this settlement, DTSC has

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relied on the financial information provided by PORCELAIN METALS.
31. PLAINTIFF and PORCELAIN METALS (“the PARTIES”) agree, and

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this Court, by entering this Consent Decree, finds, that: this Consent Decree has

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been negotiated by the PARTIES in good faith; settlement of this matter will avoid

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expensive, prolonged, and complicated litigation between the PARTIES; and this

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Consent Decree is fair, reasonable, in the public interest, and consistent with the

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purpose of CERCLA.

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THEREFORE, the Court, with the consent of the PARTIES to this

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Consent Decree, hereby ORDERS, ADJUDGES, AND DECREES, as follows:

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///

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7 [Proposed] Consent Decree Between Plaintiff
and Defendant

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III.

JURISDICTION
32. The Court has subject matter jurisdiction over the matters alleged in this

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action pursuant to 28 U.S.C. § 1331, 28 U.S.C. § 1367(a), and CERCLA section

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113(b), 42 U.S.C. § 9613(b), and personal jurisdiction over each of the PARTIES.

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Venue is appropriate in this district pursuant to 28 U.S.C. § 1391(b) and CERCLA

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section 113(b), 42 U.S.C. § 9613(b). Solely for the purposes of this Consent

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Decree and the underlying Complaint, PORCELAIN METALS waives all

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objections and defenses that PORCELAIN METALS may have to the jurisdiction

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of the Court or to venue in this district.
33. PORCELAIN METALS consents to, and shall not challenge, the terms of

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this Consent Decree and this Court’s jurisdiction to enter and enforce this Consent

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Decree.
34. The Court shall retain jurisdiction over this matter for the purpose of

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interpreting and enforcing the terms of this Consent Decree, if necessary.

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IV.

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SETTLEMENT OF DISPUTED CLAIMS
35. This Consent Decree resolves PLAINTIFF’s claims against

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PORCELAIN METALS in the above-captioned action. PLAINTIFF agrees to

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settlement of PORCELAIN METALS’ liability in this action in exchange for

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consideration from PORCELAIN METALS, including payment by PORCELAIN

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METALS to reimburse a portion of PLAINTIFF’s RESPONSE COSTS incurred

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and to be incurred at, or in connection with, releases and threatened releases of

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hazardous substances at the SITE. THE PARTIES’ mutual releases of liability and

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the consideration for those releases are set forth herein in detail below.

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36. Except as set forth in Paragraphs 19 and 26-30 above, nothing in this

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Consent Decree shall be construed as an admission by PORCELAIN METALS of

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any issue of fact. Nothing in this Consent Decree shall be construed as an

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admission by PORCELAIN METALS of any issue of law or any violation of law.

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8 [Proposed] Consent Decree Between Plaintiff
and Defendant

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37. Upon approval and entry of this Consent Decree by the Court, this

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Consent Decree shall constitute a final judgment between the PARTIES under Fed.

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R. Civ. P. 54 and 58.

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V.

DEFINITIONS
38. Unless otherwise expressly provided herein, terms used in this Consent

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Decree that are defined in CERCLA, or in regulations promulgated under

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CERCLA, shall have the meaning assigned to them therein. Whenever terms listed

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below are used in this Consent Decree, the definitions below shall apply.

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39. “DAY” shall mean a calendar day. In computing any period of time

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under this Consent Decree, where the last day would fall on a Saturday, Sunday, or

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federal or State holiday, the period shall run until the close of business of the next

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day that is not a Saturday, Sunday, or federal or State holiday.

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40. “DTSC” shall mean the California Department of Toxic Substances

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Control, and its predecessors and successors. DTSC is a public agency of the State

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of California organized and existing under and pursuant to California Health and

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Safety Code § 58000 et seq. Under California law, DTSC is the state agency

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responsible for determining whether there has been a release and/or threatened

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release of hazardous substances into the environment, and for determining the

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actions to be taken in response thereto.

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41. “EFFECTIVE DATE” shall mean the date the Court enters an Order
approving this Consent Decree.
42. “FAIR MARKET VALUE” shall mean the highest price on the date of

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valuation that would be agreed to by a seller, being willing to sell but under no

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particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being

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ready, willing, and able to buy but under no particular necessity for so doing, each

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dealing with the other with full knowledge of all the uses and purposes for which

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the property is reasonably adaptable and available.

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9 [Proposed] Consent Decree Between Plaintiff
and Defendant

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43. “FEDERAL INSURANCE COMPANY” shall mean Federal Insurance

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Company (in its capacity as the insurer of PORCELAIN METALS at the SITE) and

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its parents, managers, managing agents, representatives, affiliates, successors,

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predecessors, heirs, legatees, and assigns.

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44. “LOT 2 SITE” shall mean the property located at 6904 East Slauson

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Avenue, City of Commerce, County of Los Angeles, California, identified by

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Assessor’s Parcel Number (APN) 6356-017-028 (“LOT 2” or the “PROPERTY”),

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and the areal extent of contamination at and emanating from that lot, including

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contamination in the soil or groundwater.

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45. “NET SALE PROCEEDS” shall mean the gross sale price of the

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PROPERTY, less commercially reasonable brokerage commissions, closing costs,

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and marketing expenses.

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46. “PARTIES” shall mean PLAINTIFF and PORCELAIN METALS, and
the term “PARTY” shall refer to either PLAINTIFF or PORCELAIN METALS.

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47. “PLAINTIFF” shall mean DTSC.

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48. “PROPERTY” shall mean the real property owned by PORCELAIN

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METALS, located as 6904 East Slauson Avenue, City of Commerce, County of

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Los Angeles, California, identified by Assessor’s Parcel Number (APN) 6356-017-

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028, and referred to as LOT 2.

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49. “RESPONSE COSTS” shall mean all costs of “removal,” “remedial

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action,” or “response” as those terms are defined by CERCLA § 101, 42 U.S.C. §

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9601, related to the disposal, release, and/or threatened release of hazardous

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substances related to the SITE, including into soil and groundwater.

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50. “SITE” shall mean the properties located at 6904 East Slauson Avenue,

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City of Commerce, County of Los Angeles, California, identified by Assessor’s

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Parcel Number (APN) 6356-017-028 (“LOT 2” or the “PROPERTY”); and 6840

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East Slauson Avenue, identified by APN 63560-017-027 (“LOT 1”) and the areal

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10 [Proposed] Consent Decree Between Plaintiff
and Defendant

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extent of contamination at and emanating from those lots, including contamination

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in the soil or groundwater.

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VI.

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PORCELAIN METALS’ SETTLEMENT OBLIGATIONS
51. PORCELAIN METALS shall pay to DTSC within sixty (60) DAYS of

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the EFFECTIVE DATE an amount equal to $1,865,258.61, the source of which

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will be insurance proceeds from a settlement to be entered into between

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PORCELAIN METALS and its insurer, Federal Insurance Company, prior to the

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EFFECTIVE DATE.

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52. $50,000 of the payment described in Paragraph 51 above shall be

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retained by PORCELAIN METALS for the sole purposes of paying current and

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future real property taxes assessed by the Los Angeles County Tax Collector to

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PORCELAIN METALS for the period from July 1, 2018 to June 30, 2019 and

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continuing up to the date of the closing of the sale of the PROPERTY. After the

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sale of the PROPERTY, any remaining balance from the retained $50,000 shall be

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paid to DTSC.

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53. PORCELAIN METALS shall pay to the Los Angeles County Tax

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Collector prior to or within thirty (30) DAYS of the EFFECTIVE DATE the

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amount needed to satisfy due and unpaid real property taxes on the PROPERTY

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through June 30, 2018 (the “Catch-Up Property Tax Payment”). The Catch-Up

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Property Tax Payment is presently estimated to be an amount equal to $137,107.71

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plus a $1,183.16 penalty for each month that past due real property taxes remain

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unpaid after August 31, 2018.

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54. PORCELAIN METALS shall pay DTSC the NET SALE PROCEEDS
for the sale of the PROPERTY, as set forth in Paragraph 56 below.
55. Revival of PORCELAIN METALS:
a. PORCELAIN METALS shall, prior to or within ninety (90)
DAYS of the EFFECTIVE DATE:

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11 [Proposed] Consent Decree Between Plaintiff
and Defendant

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i.

including penalties, fees, and interest;

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Pay, or cause to be paid to the FTB, all delinquent balances,

ii.

Take such additional steps as may be required by the FTB to

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revive itself, including, but not limited to: (1) filing all

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delinquent tax returns; (2) submitting a revivor request form;

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and

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iii.

Taking any other steps necessary to return to, or maintain,

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“good standing” with the California Secretary of State and the

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FTB sufficient to allow PORCELAIN METALS to sell real

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property in California.
56. Sale of the PROPERTY:

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a. Until the PROPERTY is sold for FAIR MARKET VALUE,

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PORCELAIN METALS shall use commercially reasonable

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efforts to sell the PROPERTY for FAIR MARKET VALUE and

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shall incur only commercially reasonable costs of sale for the sale

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of the PROPERTY.

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b. Prior to entering into or modifying (i) any listing agreement for

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the PROPERTY, or (ii) any purchase and sale agreement for the

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PROPERTY (regardless of whether procured by a broker under a

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listing agreement), PORCELAIN METALS shall provide DTSC a

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copy of the proposed agreement. Within fifteen (15) DAYS of

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receipt of the agreement, DTSC may approve the agreement or

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object to it on the grounds that: (1) any costs or commissions to

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be deducted from the gross sale price pursuant to the agreement or

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other terms and conditions are not commercially reasonable; or

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(2) that the agreement does not provide for FAIR MARKET

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VALUE. DTSC must state with specificity the basis of any

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objection. PORCELAIN METALS may proceed to enter into the
12 [Proposed] Consent Decree Between Plaintiff
and Defendant

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agreement if no objection is timely received. If such an objection

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is made, the PARTIES will promptly confer to determine if the

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objection can be satisfactorily resolved. If resolved,

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PORCELAIN METALS may proceed to enter into the agreement

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consistent with the resolution. PORCELAIN METALS may not

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enter into the agreement until DTSC has withdrawn its objection,

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the objection has been resolved between the PARTIES, or the

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dispute has been resolved by this Court upon a noticed motion by

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either PARTY.

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c. For purposes of this Consent Decree, PORCELAIN METALS

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shall be deemed to have made commercially reasonable efforts to

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sell the PROPERTY if it does both of the following: 1) lists the

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PROPERTY for sale with a licensed commercial real estate

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broker at FAIR MARKET VALUE within twenty-one (21)

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DAYS of the later of (i) the EFFECTIVE DATE, or (ii) the date

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that PORCELAIN METALS may enter into a listing agreement

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pursuant to subparagraph (b) of this Paragraph; and 2) enters into

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a purchase and sale agreement promptly following approval of

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such an agreement by DTSC, or following resolution of a dispute

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regarding such an agreement by this Court under subparagraph (b)

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of this Paragraph.

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d. PORCELAIN METALS shall be obligated to submit to DTSC for

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approval any unconditional bona fide offer to purchase the

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PROPERTY in as-is condition, and without representations or

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warranties, for FAIR MARKET VALUE.

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e. In view of the environmentally impaired condition of the

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PROPERTY, PLAINTIFF will timely respond to inquiries from

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any interested purchasers regarding the possibility of a
13 [Proposed] Consent Decree Between Plaintiff
and Defendant

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prospective purchaser agreement or other limitation on liability.

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PLAINTIFF and PORCELAIN METALS agree and acknowledge

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that the FAIR MARKET VALUE of the PROPERTY may be

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affected by, among other things, the environmental condition of

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the PROPERTY and the potential environmental liability of an

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interested purchaser.

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f. Any purchase agreement and escrow instructions for the sale of

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the PROPERTY shall require the escrow agent to pay DTSC all

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of the NET SALE PROCEEDS.

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g. Any purchase agreement shall require the purchaser, after closing

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of the purchase, to execute and to record, within thirty (30) DAYS

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of request by DTSC, a Land Use Covenant approved by DTSC, if

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the remedy selected for the PROPERTY in an approved final

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Remedial Action Plan or Removal Action Plan approved by

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DTSC requires the recording of a Land Use Covenant.

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h. Any purchase and sale agreement shall require the purchaser to

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allow DTSC access to the PROPERTY to perform response

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actions.

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i. Within ten (10) DAYS of opening escrow to sell the PROPERTY,

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PORCELAIN METALS shall notify DTSC in writing and shall

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provide DTSC with a copy of the agreement to sell the

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PROPERTY and escrow agreement. As early as possible after

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opening escrow, PORCELAIN METALS shall request a

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preliminary Seller’s Estimated Settlement Statement from the

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escrow agent and provide that statement to DTSC.

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j. DTSC presently has a statutory lien on the PROPERTY, recorded

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as instrument number 20161476375 in the Los Angeles County

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Recorder’s Office, a copy of which is attached to this Consent
14 [Proposed] Consent Decree Between Plaintiff
and Defendant

1

Decree as Exhibit A. PORCELAIN METALS agrees not to

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contest the lien on the PROPERTY. Unless DTSC has objected

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to the sale in accordance with subparagraph (b) of this Paragraph

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and the objection remains unresolved between the PARTIES or

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by the Court, on or before the DAY appointed for the close of

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escrow, DTSC will execute and provide to the escrow agent a

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release of the lien (in form and substance acceptable for issuance

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of title insurance without exclusion for the lien), which the escrow

9

agent shall record with the County Recorder at closing.

10

k. Within three (3) DAYS of escrow closing, the escrow agent shall

11

pay DTSC the funds specified in subparagraph (f) of this

12

Paragraph.

13

l. Within ten (10) DAYS of the close of escrow, PORCELAIN

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METALS or the escrow agent shall provide a copy of the Seller’s

15

Final Settlement Statement showing the gross sale price, and each

16

item deducted from same in calculating the NET SALE

17

PROCEEDS remitted to DTSC.

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m. PORCELAIN METALS may, upon thirty (30) DAYS notice to

19

DTSC, and if DTSC does not object within that 30 DAY period,

20

execute and record a termination of the existing recorded

21

Remediation Easement Agreement in favor of PORCELAIN

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METALS with respect to LOT 1.

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n. Prior to the close of escrow, PORCELAIN METALS or the

24

escrow agent shall provide to DTSC a copy of the Seller’s

25

Estimated Settlement Statement together with all supporting

26

documentation for the sale and the calculation of the NET SALE

27

PROCEEDS. Both PORCELAIN METALS’ and DTSC’s

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15 [Proposed] Consent Decree Between Plaintiff
and Defendant

1

approval of the Seller’s Estimated Settlement Statement shall be

2

required prior to closing.

3

o. PORCELAIN METALS will, within thirty (30) DAYS, record a

4

Land Use Covenant provided by DTSC, if: 1) the remedy for the

5

LOT 2 SITE selected in an approved final Remedial Action Plan

6

or Removal Action Plan approved by DTSC requires the

7

recording of a Land Use Covenant; and 2) PORCELAIN

8

METALS still owns the PROPERTY.

9

57. PORCELAIN METALS’ payment obligations under this Consent Decree

10

shall be deemed to have been satisfied in full upon: (1) Delivery to DTSC of the

11

payments due under Paragraphs 51, 52 (if any), 54, and 56.f; (2) Delivery to the Los

12

Angeles County Tax Collector of payments due under Paragraphs 52 (if any is

13

required) and 53; and (3) Delivery to the FTB of the payments due under Paragraph

14

55. The payments specified in Paragraphs 51, 52, 54, and 56.f shall be made by

15

certified or cashier’s check made payable to California Department of Toxic

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Substances Control, and shall bear on its face both the docket number of this

17

proceeding and the phrase “Site Code 300546-SM.”

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a.

Accounting Office, MS-21A
Department of Toxic Substances Control
P.O. Box 806
Sacramento, CA 95812-0806

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20
21
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The payments shall be sent to:

b.

A copy of the check shall be mailed to:

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Robin McGinnis
Senior Staff Counsel
Department of Toxic Substances Control
Office of Legal Counsel, MS-23A
1001 I Street
Sacramento, CA 95814

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Or e-mailed to [e-mail] in .pdf format.

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And to:

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24

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16 [Proposed] Consent Decree Between Plaintiff
and Defendant

1
2
3
4
5

John W. Everett
Deputy Attorney General
Department of Toxic Substances Control
600 W. Broadway, Suite 1800
San Diego, CA 92101
Or e-mailed to [e-mail] in .pdf format.
58. This Consent Decree is conditioned upon full performanceof

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PORCELAIN METALS’ obligations in this Consent Decree. If the requirements

7

of this Consent Decree are not met, then this Consent Decree shall be voidable at

8

the discretion of DTSC, and DTSC may proceed to litigate the Complaint against

9

PORCELAIN METALS. If DTSC voids this Consent Decree, then the entire

10

Consent Decree shall be void.

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VII. ACCESS TO INFORMATION AND THE PROPERTY

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59. Within thirty (30) DAYS of the EFFECTIVE DATE, PORCELAIN

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METALS shall provide to DTSC copies of any and all unprivileged records,

14

documents, and information within its possession or control, or that of its agents,

15

relating to: (a) the ownership, operation, or control of LOT 1 and LOT 2; (b) the

16

purchase, storage, use, handling, generation, treatment, transportation, or disposal

17

of hazardous substances in connection with the SITE; (c) disposals, releases, and/or

18

threatened releases of hazardous substances at the SITE, including the soil and

19

groundwater; and (d) removal, remedial, or response actions conducted by any

20

person at the SITE. If PORCELAIN METALS believes it already produced all

21

such documents, it may comply with this Paragraph by sending DTSC a signed

22

letter representing and warranting that it has already produced the information

23

required by this Paragraph. Sending such a letter shall not absolve PORCELAIN

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METALS of its obligations under this Paragraph.

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60. If after the EFFECTIVE DATE, PORCELAIN METALS obtains or

26

discovers any records, documents, or information described in Paragraph 59 not

27

previously provided to DTSC, PORCELAIN METALS agrees to provide DTSC

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copies of the additional records, documents, or information within ten (10) DAYS
17 [Proposed] Consent Decree Between Plaintiff
and Defendant

1

of the date PORCELAIN METALS discovers or obtains the records, documents, or

2

information.

3

61. For as long as PORCELAIN METALS owns the PROPERTY,

4

PORCELAIN METALS shall allow DTSC access to the PROPERTY to perform

5

response actions.

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VIII. COVENANT NOT TO SUE BY PLAINTIFF

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62. Except as expressly provided in Section IX (PLAINTIFF’s Reservation

8

of Rights) of this Consent Decree, PLAINTIFF covenants not to sue PORCELAIN

9

METALS and its representatives, affiliates, successors, heirs, legatees, and assigns

10

and FEDERAL INSURANCE COMPANY (individually a “Released Party” and

11

collectively the “Released Parties”) for civil liability for reimbursement of all or

12

any portion of past or future RESPONSE COSTS, declaratory relief, injunctive

13

relief, or any other judicial or administrative action or relief pursuant to sections

14

107 of CERCLA, 42 U.S.C. sections 9607, the Resource Conservation and

15

Recovery Act of 1976, 42 U.S.C. section 6901 et seq., the Carpenter-Presley-

16

Tanner Hazardous Substances Account Act, California Health and Safety Code

17

section 25300 et seq., the California Hazardous Waste Control Law, California

18

Health and Safety Code section 25100 et seq, or nuisance or trespass, with regard to

19

releases or threatened releases of hazardous substances related to the SITE, whether

20

known or unknown. This Covenant Not to Sue is conditioned upon the complete

21

and satisfactory performance by PORCELAIN METALS of all its obligations

22

under this Consent Decree. This Covenant Not to Sue may be revoked and deemed

23

not effective if PORCELAIN METALS fails to fully perform on its obligations

24

stated in this Consent Decree.

25

63. For any person, entity, or Released Party not bound by the signatories to

26

this Consent Decree, PLAINTIFF’s covenant not to sue is not valid to those persons

27

or entities absent their express written acknowledgement that they waive their right

28

to sue PLAINTIFF in accordance with the terms of Paragraph 67.
18 [Proposed] Consent Decree Between Plaintiff
and Defendant

1
2

IX.

PLAINTIFF’S RESERVATION OF RIGHTS
64. Reservation of Claims. PLAINTIFF reserves, and this Consent Decree is

3

without prejudice to, all rights against PORCELAIN METALS and its

4

representatives, affiliates, successors, heirs, legatees, and assigns, or any rights

5

PLAINTIFF may have against FEDERAL INSURANCE COMPANY with respect

6

to the following matters:

7
8
9

a. failure of PORCELAIN METALS to meet the requirements of
this Consent Decree;
b. damage to natural resources, as defined in CERCLA section

10

101(6), 42 U.S.C. § 9601(6), including all costs incurred by any

11

natural resources trustees;

12

c. liability resulting from introduction of any hazardous substance,

13

pollutant, or contaminant to the SITE by PORCELAIN METALS

14

after the EFFECTIVE DATE;

15

d. liability resulting from overt acts of PORCELAIN METALS after

16

the EFFECTIVE DATE that cause the exacerbation of the

17

hazardous substance conditions existing at or from the SITE;

18

e. claims based on liability arising from the past, present, or future

19

releases or disposal of hazardous substances at sites or locations

20

other than the SITE and;

21

f. Claims based on criminal liability.

22

65. Government Authority. Except as expressly provided in this Consent

23

Decree, nothing in this Consent Decree is intended, nor shall it be construed to,

24

preclude DTSC from exercising its authority under any law, statute, or regulation.

25

Furthermore, nothing in this Consent Decree is intended, nor shall it be construed

26

to, preclude any other state agency, department, board, or entity, or any federal

27

entity from exercising its authority under any law, statute, or regulation.

28
19 [Proposed] Consent Decree Between Plaintiff
and Defendant

66.

1

Claims Against Other Persons. DTSC reserves, and this Consent is

2

without prejudice to, all rights, claims, and causes of action DTSC may have

3

against any person or entity other than the Released Parties. Other than as set forth

4

in this Consent Decree, nothing in this Consent Decree is intended to be nor shall it

5

be construed as a release, covenant not to sue, or compromise of any claim or cause

6

of action which DTSC may have against any person other than the Released Parties.

7

X.

8
9

COVENANT NOT TO SUE BY PORCELAIN METALS
67. PORCELAIN METALS covenants not to sue, and agrees not to assert

any claims or causes of action against PLAINTIFF or any DTSC contractors or

10

employees that arise from any action or inaction by them related to the SITE,

11

including, but not limited to, any claims or causes of action for injuries, losses,

12

costs, damages, declaratory relief, or injunctive relief that:

13
14
15
16
17

a. arise out of the transaction or occurrence that is the subject matter
of PLAINTIFF’s Complaint;
b. relate to hazardous substances, wastes, or other materials released,
disposed of, generated, or transported to or from the Site; or
c. are caused or incurred as a result of the performance of the

18

requirements of this Consent Decree or DTSC’s response actions

19

at the SITE.

20

68. In any legal proceedings that PLAINTIFF may initiate against

21

PORCELAIN METALS for non-compliance with this Consent Decree, in such

22

proceedings, PORCELAIN METALS may raise any and all defenses that

23

PORCELAIN METALS deems to be relevant to the issue of whether or not it has

24

complied with the terms of the Consent Decree.

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26
27
28
20 [Proposed] Consent Decree Between Plaintiff
and Defendant

1
2

XI.

EFFECT OF SETTLEMENT AND CONTRIBUTION PROTECTION
69.

With regard to claims for contribution against PORCELAIN METALS

3

for “Matters Addressed” in this Consent Decree, the PARTIES agree, and the Court

4

finds as follows:

5

a. This Consent Decree constitutes a judicially approved settlement

6

within the meaning of CERCLA section 113(f)(2), 42 U.S.C. §

7

9613(f)(2).
b. This Consent Decree requires that PORCELAIN METALS pay

8

certain costs with respect to its liability at the SITE.

9
10

c. PORCELAIN METALS is entitled to the contribution protection

11

provided by CERCLA section 113(f)(2), 42 U.S.C. § 9613(f)(2),

12

and by state statutory and common law for the “Matters

13

Addressed” in this Consent Decree, except for actions and claims

14

identified in Section VIII (PLAINTIFF’s Reservation of Rights).

15

70. “Matters Addressed.” The “Matters Addressed” in this Consent Decree

16

include all response actions taken or to be taken and all RESPONSE COSTS

17

incurred or to be incurred, at or in connection with the SITE by PLAINTIFF or any

18

other person.

19

71. The protection provided for in this Section XI is conditioned upon full

20

compliance by PORCELAIN METALS with its obligations in this Consent Decree.

21

72. Nothing in this Consent Decree limits or impairs the right of PLAINTIFF

22

to pursue any other person for unrecovered RESPONSE COSTS incurred by

23

PLAINTIFF.

24

XII. NOTIFICATION

25
26

73. Notification to or communication between the PARTIES as required or
provided for in this Consent Decree shall be addressed as follows:

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28
21 [Proposed] Consent Decree Between Plaintiff
and Defendant

1
2
3
4
5
6
7
8
9
10

For PLAINTIFF:
Robin McGinnis
Senior Staff Counsel
Department of Toxic Substances Control
Office of Legal Counsel, MS-23A
1001 I Street
Sacramento, CA 95814
John W. Everett
Deputy Attorney General
California Dept. of Justice
600 West Broadway, Suite 1800
San Diego, CA 92101
For PORCELAIN METALS:

12

Carolyn M. McBride
Porcelain Metals Corporation
20 River Hill Road
Louisville, KY 40207

13

With copy to:

14

Thomas F. Vandenburg
Wood, Smith, Henning & Berman LLP
10960 Wilshire Boulevard, 18th Floor
Los Angeles, CA 90024

11

15
16
17
18

XIII. GENERAL PROVISIONS
74. Parties Bound. This Consent Decree shall apply to, be binding upon, and

19

inure to the benefit of the PARTIES and their respective representatives,

20

successors, heirs, legatees, and assigns.

21

75. No Rights in Other Parties. Except as provided in Paragraph 74, nothing

22

in this Consent Decree shall be construed to create any rights in, or grant any cause

23

of action to, any person not a party to this Consent Decree.

24

76. No Waiver of Enforcement. The failure of DTSC to enforce any

25

provision of this Consent Decree shall in no way be deemed a waiver of such

26

provision or in any way affect the validity of this Consent Decree. The failure of

27

DTSC to enforce any such provision shall not preclude it from later enforcing the

28

same or any other provision of this Consent Decree.
22 [Proposed] Consent Decree Between Plaintiff
and Defendant

1

77. Attorneys’ Fees and Costs. Except as expressly provided in this Consent

2

Decree, the PARTIES will bear their own attorneys’ fees and costs and will not

3

seek to recover attorneys’ fees and/or litigation costs against each other.

4

78. Final Agreement. This Consent Decree constitutes the final, complete,

5

and exclusive agreement and understanding between the PARTIES with respect to

6

the settlement embodied in this Consent Decree.

7
8
9

79. Modifications. This Consent Decree may be modified only upon written
approval of the PARTIES and with the consent of the Court.
80. Counterparts. This Consent Decree may be executed in two or more

10

counterparts, each of which shall be deemed an original, but all of which together

11

shall constitute one and the same instrument.

12

81. Agent. PORCELAIN METALS has appointed and authorized the agents

13

identified in Paragraph 73 to receive notices with respect to all matters arising

14

under or relating to this Consent Decree.

15

XIV. ENTRY OF THE CONSENT DECREE

16

82. This Consent Decree shall be lodged with the Court for a period of not

17

less than thirty (30) DAYS for public notice and comment. DTSC shall file with

18

the Court any written comments received and DTSC’s responses thereto. DTSC

19

reserves the right to withdraw or withhold its consent to entry of the Consent

20

Decree if comments regarding the Consent Decree disclose facts or considerations

21

that indicate that this Consent Decree is inappropriate, improper, or inadequate.

22

DTSC may modify or withdraw its consent to this Consent Decree if comments

23

received during the public comment period disclose facts or considerations that

24

indicate that this Consent Decree is inappropriate, improper, or inadequate.

25

PORCELAIN METALS consents to the entry of this Consent Decree without

26

further notice.

27
28

83. If, for any reason, the Court declines to approve this Consent Decree in
the form presented, this agreement is voidable at the sole discretion of any PARTY
23 [Proposed] Consent Decree Between Plaintiff
and Defendant

1

and the terms of the Consent Decree may not be used as evidence in any litigation

2

between the PARTIES.

3

84. Each signatory to this Consent Decree certifies that he or she is fully

4

authorized by the PARTY he or she represents to enter into the terms and

5

conditions of this Consent Decree, to execute it on behalf of the PARTY

6

represented, and to legally bind that PARTY to all the terms and conditions of this

7

Consent Decree.

8

XV. APPROVAL OF PARTIES

9

DTSC and PORCELAIN METALS consent to this Consent Decree by and

10

through their duly authorized representatives as follows:

11

FOR THE CALIFORNIA DEPARTMENT OF TOXIC SUBSTANCES

12

CONTROL:

13

DATE:

By:
SIGNATURE

14
15
16

NAME (printed or typed)

17
18

TITLE (printed or typed)

19
20

FOR PORCELAIN METALS CORPORATION:

21
22
23

DATE:

By:
SIGNATURE

24
25

NAME (printed or typed)

26
27

TITLE (printed or typed)

28
24 [Proposed] Consent Decree Between Plaintiff
and Defendant

1

APPROVED AS TO FORM AND CONTENT:

2
3

Dated:

_________________
John Everett
Deputy Attorney General
Attorney for Plaintiff

Dated:

_________________
Thomas Vandenburg
Attorney for Defendant

4
5
6
7
8
9
10

IT IS SO ORDERED, ADJUDGED, AND DECREED.

11
12
13

Dated: February 5, 2019

Honorable George H Wu
e
H.
United States District Judge

14
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20
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25
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25 [Proposed] Consent Decree Between Plaintiff
and Defendant

EXHIBIT A