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MADISON KIPP 4-02032012114303.jpg

Exterior and smokestacks of Madison-Kipp Corp. 

Madison-Kipp Corp. used its lawyers’ influence with Gov. Scott Walker to try to pre-empt a federal lawsuit that carries the prospect of a judge stepping in to oversee cleanup of pollutants from groundwater and soil at and around the company’s metal fabricating plant on the east side of Madison, documents filed in federal district court charge.

Attorneys for neighbors of the Kipp plant, who brought the federal lawsuit on Oct. 20, 2011, also claim in a March 25 filing in the U.S. District Court of Western Wisconsin that Kipp used its politically connected law firm, Michael Best & Friedrich, to enlist help from the governor’s office in persuading the Department of Natural Resources to back off testing of how widely contaminants from the industrial site had spread onto neighboring residential properties. 

Documents filed with the court reveal that a partner at Michael Best, formerly a state deputy attorney general supervising enforcement of state environmental law, contacted Walker’s chief legal counsel weeks before the lawsuit was filed with the message that Kipp wanted to avoid the citizen lawsuit then being prepared under a federal law that gives the courts broad powers to order remediation of polluted sites.

Kipp and the DNR have dickered for nearly two decades over what needs to be done to determine the extent of contamination from the factory property on Atwood Avenue and clean it up. Michael Schmoller, a DNR hydrogeologist who became project manager for the Kipp site in 2010, said in sworn testimony that the company had a history of “delaying and foot dragging” in response to directives from the state environmental agency. In 2012, the company had still not completed work to determine the extent and direction of groundwater contamination first requested by the state in 1994, Schmoller said.

That was the year the state notified Kipp that tetrachloroethylene (PCE) was detected in groundwater beneath its Atwood factory and that the company was responsible for investigating the extent of contamination and for remediating it.

"The longer contamination is left in the environment, the farther it can spread and the more difficult and costly it becomes to clean up," the DNR’s 1994 letter cautions.

Kipp says it stopped using PCE, a suspected carcinogen once widely used as an industrial solvent and still used in dry cleaning, in the late 1980s. The state first raised concerns over migration of PCE to properties neighboring the Kipp site in 2003; PCE vapors were first detected in the soil of adjacent properties in 2007.

The city is concerned about possible migration of PCE from shallow groundwater at the Kipp property to a deep groundwater aquifer that is tapped for the city’s water supply by a well in nearby Olbrich Park. An expert witness hired by the neighbors in their lawsuit said in sworn testimony last month that the Kipp property is “one of the most contaminated sites I’ve ever worked with,” and that the risk of PCE migrating to groundwater tapped by the city’s water system is being understated. 

Kipp denies that pollution from its plant has reached the city’s water supply, and the Madison Water Utility agrees but says groundwater from Kipp flows toward the well, and eventually could reach the aquifer it pumps from. The city is considering not using the well near Kipp during the summer, when it usually is put into service to help meet peak demand.

Renewed concern over the health effects of pollutants from the Kipp site has the local Schenk-Atwood-Starkweather Neighborhood Association asking the DNR to redouble its efforts. The group on Thursday asked for a map showing the extent and concentration of all contaminants from the site and for a community meeting to let people know the status of the investigation and remediation.

The neighbors’ lawsuit is scheduled for trial in August before Judge Barbara Crabb, but Kipp has asked the court for a summary judgment dismissing the case. Attorneys handling the case declined to comment on arguments raised in briefs filed with the court on the motion for summary judgment.

Residents living on properties abutting the factory site notified Kipp and the DNR in July 2011 that they intended to bring suit under the Resource Conservation and Recovery Act (RCRA), a federal law governing the treatment, storage and disposal of hazardous waste. The law, which requires a 90-day notice before a suit is filed, specifically allows citizens to sue to force cleanup of hazardous sites when state regulatory agencies have not adequately done so. The law gives federal courts the power to order remediation more extensive than that typically required by regulatory agencies. For example, Honeywell International was ordered by a federal court in New Jersey in 2003 to dig up and replace 1 million tons of soil along the Hackensack River, at a cost then estimated at $400 million, in a RCRA suit involving chromium contamination.

On Sept. 14, 2011 — during the notification period for the federal lawsuit — Raymond Taffora, a former state deputy attorney general who had become a partner at Michael Best, emailed Brian Hagedorn, Walker’s chief legal counsel, seeking a telephone consultation on the Kipp case, according to court documents. A memo attached to the email outlines the case, mentioning that a notice of intent to sue had been filed, and remarking:

“MKC would prefer to spend its resources defending allegations against the State of Wisconsin and restoring the environment than paying out-of-state plaintiffs’ counsel given that the federal statute provides for the plaintiffs’ attempted recovery of their fees and costs.”

The federal law under which the neighbors sued specifies that citizens cannot “commence” a lawsuit suit if the state already has brought such a suit. The neighbors assert in their court filings that Kipp’s lawyer contacted the governor’s office to ask the state to file a federal lawsuit to pre-empt neighbors from pursuing their claim.

The two firms representing what has become a class-action federal lawsuit by Kipp neighbors are located in Illinois.

Michael Best, with offices in five cities including Chicago and Madison, in 2011 was representing Walker on what would become three lawsuits challenging his Act 10 law, which curtailed collective bargaining rights for public employees. Representation on the collective bargaining cases was provided under a $500,000 legal services contract with Michael Best that was signed by Taffora a month after he left his job with the state attorney general's office, which usually represents the state on legal challenges. 

Taffora and Hagedorn did not return calls seeking comment on the allegations contained in court documents filed by attorney Michael Hayes, who represents the Kipp neighbors. The documents assert that Kipp tried to used its lawyers’ political influence to get the DNR to file a pre-emptory lawsuit and to back off on the tests that eventually revealed that PCE in soil vapors had seeped onto many neighboring properties.

Schmoller testified that in his 30 years at the DNR, he had never heard of a DNR-regulated company asking the state to sue it in order to block a citizens’ suit. No explanation has been offered in evidence filed with the court as to why Taffora contacted the governor’s office rather than the DNR, or the state’s Department of Justice, with his requests, Hayes writes in a brief opposing summary judgment in favor of Kipp.

Schmoller testified that after resistance from Kipp about doing soil vapor testing, he approached Mark Giesfeldt, director of the Bureau of Remediation and Redevelopment, about funding for DNR to conduct the tests and was met with more resistance.

“There was a lot of ‘Why are you doing this, why do you need this?’” Schmoller said in a deposition. He said that either his supervisor, Linda Hanefeld, or her supervisor, Giesfeldt, told him that Kipp had approached the governor’s office, complaining about the testing that Schmoller was requiring.

Schmoller said his frustration over the lack of progress on the Kipp site led him to offer to resign as project manager on the case, explaining in his deposition that his intention was to let his superiors know: “You can assign it to somebody who would be more than happy to let it dog along. If that’s what the administration wants, fine.”

A DNR spokesman said Friday that the department would not comment on allegations made in court documents, because of pending litigation.

Reed Coleman, who headed Madison-Kipp Corp. from 1964 to 2011 and remains chairman of the company’s board of directors, said in a deposition that he did not ask anyone to speak to the governor’s office about the DNR’s handling of contamination at the factory site, but acknowledged that it “sounds like somebody did.” Coleman said his understanding was that his company asked the DNR to file suit so that the agency “would do its job” and give Kipp a work plan for remediating the contamination. Coleman, who was chairman of the Wisconsin Republican Party from 1968 to 1972, testified he has never met Walker; online records show he contributed $850 to Walker’s campaigns for governor and state Assembly. 

Kipp Vice President Mark Meunier, the company’s spokesman, would not comment on allegations that Kipp used political influence to try to ward off a citizens’ lawsuit. He said, though, that “we as company went to talk with several people higher up in DOJ or DNR, never as a way to try to influence them, but to try to convey to them what we are doing.” Kipp officials are concerned that they are being held to a higher standard than other companies, Meunier said.

Kipp attorney John Busch of Michael Best writes in a brief arguing for summary judgment of the case that the company has worked “hand in hand” with DNR since it was notified of contamination in 1994. But a review of DNR documents reveals that the company was chided for slow progress several times over the years as evidence mounted of contamination beyond its property line and neighbors grew so frustrated with the pace of remediation that they filed suit. 

Contamination from PCBs, or polychlorinated biphenyls, a carcinogen found in oils used at the plant from about 1996 to 1971, was detected at the factory site in April 2012. The Wisconsin Department of Justice sued Kipp in September 2012 in state court, charging that the company violated hazardous spill laws. That lawsuit in state court does not affect the federal class-action suit brought by neighbors. 

Kipp neighbors say in their court filings that the engineering consultants working on Kipp’s contamination issues since 1994 have been under contract to Michael Best for “confidential services,” instead of working directly for Kipp.

The project manager for the current consultant, the international engineering firm ARCADIS, testified in a deposition that she is under the direction of Kipp’s lawyers and must clear any communications with them before contacting DNR.

ARCADIS was hired in early 2012, but the firm has not to date calculated the extent of PCE groundwater or vapor contamination, tasks that DNR has been asking Kipp to do for years, court documents say.

The neighbors claim in their brief that Kipp “grotesquely understates the threats that these families and their environment face from all aspects of the company’s contamination.”

In asking the court to dismiss the lawsuit, attorney Busch of Michael Best argues that contamination from the Kipp site has not resulted in the ”threat of imminent and substantial endangerment to health or the environment” required by the law under which neighbors brought suit. They have a misinformed perception of Kipp “as some evil company polluting freely without a care for who is injured and running from any responsibility for the consequences,” he says.

“Normal persons living near Madison-Kipp would not be substantially annoyed or disturbed by minor contamination (which has been or is being remediated),” he writes. The Kipp neighbors who brought the class-action lawsuit are making things “unendurable for themselves.”

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