Case 3:91-cv-05528-RJB Document 53-1 Filed 07/13/16 Page 1 of 285

[Pages:285]Case 3:91-cv-05528-RJB Document 53-1 Filed 07/13/16 Page 1 of 285

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON

UNITED STATES OF AMERICA, Plaintiff,

POINT RUSTON,LLC Defendant.

CIVIL ACTION NO. C91-5528 B

COMMENCEMENT BAY NEARSHORE/TIDEFLATS SUPERFUND SITE -ASARCO TACOMA SMELTER THIRD AMENDED CONSENT DECREE BETWEEN THE UNITED STATES AND POINT RUSTON,LLC

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TABLE OF CONTENTS

Page

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. XIV. XV. XVI. XVII. XVIIL XIX. XX. XXI. XXII. XXIII. XXIV. XXV. XXVI. XXVII. XXVIII. XXIX. XXX. XXXI. XXXII. XXXIII. XXXIV.

BACKGROUND ...........................................................................................................7 JURISDICTION ..........................................................................................................11 PARTIES BOUND ......................................................................................................11 DEFINITIONS.............................................................................................................12 GENERAL PROVISIONS ..........................................................................................18 PERFORMANCE OF THE WORK BY POINT RUSTON........................................21 REMEDY REVIEW ....................................................................................................32 QUALITY ASSURANCE,SAMPLING,and DATA ANALYSIS............................33 ACCESS AND INSTITUTIONAL CONTROLS .......................................................34 REPORTING REQUIREMENTS ...............................................................................37 EPA APPROVAL OF PLANS AND OTHER SUBMISSIONS.................................38 PROJECT COORDINATORS ....................................................................................40 ASSURANCE OF ABILITY TO COMPLETE WORK ............................................41 CERTIFICATION OF COMPLETION ......................................................................43 EMERGENCY RESPONSE........................................................................................47 REIMBURSEMENT OF RESPONSE COSTS...........................................................48 INDEMNIFICATION AND INSURANCE................................................................50 FORCE MAJEURE .....................................................................................................52 DISPUTE RESOLUTION ...........................................................................................54 STIPULATED PENALTIES .......................................................................................57 COVENANTS NOT TO SUE BY PLAINTIFF..........................................................61 COVENANTS BY POINT RUSTON .........................................................................66 EFFECT OF SETTLEMENT;CONTRIBUTION PROTECTION ............................67 ACCESS TO INFORMATION ...................................................................................68 RETENTION OF RECORDS .....................................................................................70 NOTICES AND SUBMISSIONS ...............................................................................70 EFFECTIVE DATE.....................................................................................................72 RETENTION OF JURISDICTION .............................................................................72 APPENDICES ............................................................................................................ 72 COMMUNITY RELATIONS .....................................................................................72 MODIFICATION ........................................................................................................73 LODGING AND OPPORTUNITY FOR PUBLIC COMMENT ...............................73 SIGNATORIES/SERVICE..........................................................................................74 ADDITIONAL RIGHTS,BENEFITS &OBLIGATIONS OF POINT RUSTON.....74

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THIRD AMENDED CONSENT DECREE INTRODUCTION

A. On January 3, 1997,the Court entered a consent decree in this action(the "Asarco Tacoma Smelter Consent Decree") providing for the cleanup by ASARCO Incorporated ("Asarco") of the former Asarco Smelter and Slag Peninsula in Tacoma, Washington. The consent decree was entered into by the United States Environmental Protection Agency("EPA") and Asarco pursuant to the Comprehensive Environmental Response, Compensation and Liability Act("CERCLA"),as amended,42 U.S.C. ? 9601 et seq.

B. On November 2, 2000, EPA and Asarco amended Section XX, Stipulated Penalties, of the Asarco Tacoma Smelter Consent Decree to add three new subparagraphs. The 2000 amendment(the "First Amendment")to the Asarco Tacoma Smelter Consent Decree added significant stipulated penalties for Asarco's failure to achieve specified milestone dates.

C. On July 14,2000,EPA issued a Record of Decision(ROD)for Operable Unit 06, the Asarco Sediments/Groundwater Site, of the Commencement Bay Nearshore/Tideflats Superfund Site. Operable Unit 06 encompasses the groundwater under the Asarco Smelter, approximately 150 acres of offshore intertidal and subtidal lands, and the Yacht Basin formed by the Slag Peninsula, all located in Ruston and Tacoma,Pierce County, Washington.

D. On March 5, 2002, EPA issued a Unilateral Administrative Order for Remedial Design and Remedial Action, EPA Docket No. 10-2002-0046, requiring Asarco to perform the Remedial Design and Remedial Action (RD/RA) for Operable Unit 06, the Asarco Sediments/Groundwater Site.

E. In February 2003, a consent decree was entered in the matter of United States v. Asarco Incorporated and Southern Peru Holdings Inc., No. CV 02-2079-PHX-RCB (the "Arizona consent decree"). Among other provisions, the Arizona consent decree provided a temporary (three year) cap on the amount Asarco would have to spend on certain types of environmental obligations at sites around the country, including the Tacoma Smelter. The decree also temporarily suspended the imposition of certain types of stipulated penalties under

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federal consent decrees, including the Asarco Tacoma Smelter Consent Decree, should certain types of deadlines established in those decrees not be met.

F. In February 2005, ASARCO Incorporated merged into a newly formed Delaware limited liability company, ASARCO LLC ("Asarco LLC"). Asarco LLC was the surviving entity of that merger, and assumed all the obligations of Asarco Incorporated, including those relating to the performance ofthe obligations ofthe Asarco Tacoma Smelter Consent Decree and amendments thereto.

G. On August 9, 2005, Asarco LLC filed for bankruptcy protection under chapter 11 of the bankruptcy code in the United States District Court for the Southern District of Texas ("Bankruptcy Court").

H. On December 8, 2005, Asarco LLC entered into an agreement with MC Construction Consultants, Inc.("MC Construction"), to sell approximately 97 acres of its real property(the "Purchased Property")located in Tacoma and Ruston, Washington. The Purchased Property includes parts of the former Asarco Smelter Site, Operable Unit 02, and parts of the Asarco Sediments/Groundwater Site, Operable Unit 06.

I. Under the terms of the sale agreement (the "Tacoma Purchase Agreement"), MC Construction and EPA must reach agreement on remediation tasks associated with Operable Units 02 and 06. Paragraph 5.3 ofthe Tacoma Purchase Agreement states:

Prior to Closing and as promptly as it may be obtained,[MC Construction] shall provide [Asarco] with an instrument or document issued by the EPA...indicating approval of the transfer of the Liabilities, as such Liabilities relate to the environmental matters, that [MC Construction] will assume with respect to the Property indicating approval of[MC Construction's] qualifications with respect to the transfer of such Liabilities.... J. On January 30, 2006, the Bankruptcy Court approved the sale of the Smelter Property to MC Construction. Paragraph 14 of the Sale Order provides that the Sale Order shall not become effective until:

(i) the EPA Lien Agreement is approved by the Bankruptcy Court; and (ii) the Buyer's agreement with the EPA, as contemplated by Section 5.3 of the Agreement, has been approved and entered by the United States District Court for the Western District of Washington, Tacoma Division.

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MC Construction subsequently assigned to Point Ruston, LLC ("Point Ruston") its rights under the Tacoma Purchase Agreement. Point Ruston is a limited liability company incorporated in Washington, with its principal place of business in Ruston, Washington.

K. EPA entered into negotiations with Point Ruston for remediation of the Asarco Smelter Site, Operable Unit 02, and the Asarco Sediments/Groundwater Site, Operable Unit 06 (collectively referred to as the "Site"). This Third Amended Consent Decree embodies the entire agreement between EPA and Point Ruston for remediation of the Asarco Smelter Site, Operable Unit 02, and the Asarco Sediments/Groundwater Site, Operable Unit 06.

L. This Third Amended Consent Decree replaces the Second Amendment to the Asarco Tacoma Smelter Consent Decree (the "Second Amendment"), which the Court entered on October 23, 2006, and includes revisions to the Second Amendment.

M. From the time oflodging and entry ofthe Second Amendment through the date of this Third Amended Consent Decree Point Ruston has undertaken plans to develop the Purchased Property as a residential mixed-use neighborhood with the lower portion of the Purchased Property being developed with condominiums, apartments and other residential units along with commercial, retail, recreation, entertainment and public use facilities. Single-family dwellings have been developed only on the portion of the Purchased Property known as Stack Hill. Point Ruston plans to complete the redevelopment ofthe Site through the development of a residential mixed-use neighborhood. Through Point Ruston's development of the Site approximately seven parcels of property and an area designated as a Materials Management Zone("MMZ")remain uncapped and require a final cap to be constructed. These seven parcels and the MMZ constitute the "Remaining Site Cap", and are depicted on the map attached hereto as Appendix H.

N. Point Ruston represents that it is a Bona Fide Prospective Purchaser within the meaning of Section 101(40)of CERCLA,42 U.S.C. ? 9601(40), and intends to take all steps to maintain its status as Bona Fide Prospective Purchaser, and for purposes of this Third Amended Consent Decree EPA accepts this representation. Point Ruston represents, and for the purposes

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of this Third Amended Consent Decree EPA relies on the representation, that Point Ruston has had no involvement with the Purchased Property or the Site and that Point Ruston has carried out all appropriate inquiries into the prior ownership and uses of the facility prior to purchasing the Purchased Property. EPA agrees that the Work to be performed by Point Ruston under this Third Amended Consent Decree is consistent with "taking reasonable steps," within the meaning of Section 101(40) of CERCLA, 42 U.S.C. ? 9601(40), to stop continuing releases, prevent

threatened future releases, and prevent or limit human, environmental, or natural resources

exposure to previous releases.

O. Point Ruston certifies that, to the best of its knowledge and belief, it fully and accurately disclosed to EPA all information known to Point Ruston, and all information in the possession or control of its officers, directors, contractors and agents which relates in any way to

any Existing Contamination or any past or potential future release of hazardous substances, pollutants or contaminants at or from the Site, prior to purchasing the Purchased Property. Point Ruston also certifies that to the best of its knowledge and belief it did not cause or contribute to a release or threat of release of hazardous substances or pollutants or contaminants at the Site,

prior to purchasing the Purchased Property. If the United States determines that information

provided by Point Ruston in these certifications is not materially accurate and complete, this

Third Amended Consent Decree, within the sole discretion ofthe United States, shall be null and void and the United States reserves all rights, and Point Ruston reserves all defenses, each may

have. P.

On October 23,2006,the Second Amendment,which among other things, added

Point Ruston LLC as a Party, was entered by this Court.

Q. By Order of this Court on January 7, 2010, ASARCO LLC and ASARCO

Incorporated were removed as parties to the Second Amendment.

R. Pursuant to Paragraph 70 of the Second Amendment EPA has previously

submitted five bills for Oversight costs to Point Ruston which have not been paid in full. The

identification number for these five bills are SN 2701026T200, SN 2701226T0034, SN

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270142650006, SN 270152650009 and SN 27016250020 ("Past Due Oversight Costs"). The United States contends that such bills have been incurring Interest in accordance with Paragraph 72 of the Second Amendment. On March 15, 2016, Point Ruston made a payment of $750,000 in partial fufillment of this obligation. Point Ruston's timely payments in accordance with Paragraph 69 ofthis Third Amended Consent Decree will resolve all claims ofthe United States' for Past Due Oversight Costs.

S. The Development Payout Agreement was attached as Exhibit C to the Amended and Restated Tacoma Purchase Agreement dated January 10, 2006. The United States contends that certain payments owed to the United States pursuant to paragraph 2 of the Development Payout Agreement are due and owing and have been incurring interest charges in accordance with the terms of the Development Payout Agreement ("Past Due DPA Claims"). Point Ruston's timely payments in accordance with Paragraph 69 of this Third Amended Consent Decree will resolve all claims of the United States' for amounts owing under the Development Payout Agreement.

I. BACKGROUND 1. The United States of America("United States"), on behalf ofthe Administrator of the United States Environmental Protection Agency ("EPA"), filed a complaint in this matter pursuant to Sections 106 and 107 of the Comprehensive Environmental Response, Compensation, and Liability Act(?'CERCLA"),42 U.S.C. ?? 9606 and 9607, and Section 7003 ofthe Resource Conservation and Recovery Act("RCRA"),42 U.S.C.? 6973,against ASARCO Incorporated ("Asarco"). 2. The United States in its complaint sought, inter alias (a)reimbursement of costs incurred and to be incurred by EPA and the Department of Justice for response actions at the Asarco Tacoma Smelter Site ("Site") in Ruston and Tacoma, Washington, which is Operable Unit 02 within the Commencement Bay Nearshore/Tideflats Superfund Site (the "CB N/T site"), together with accrued interest; and (b) performance of studies and response work by Asarco at

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the Site consistent with the National Oil and Hazardous Substance Pollution Contingency Plan, 40 C.F.R. Part 300(as amended)("NCP").

3. In accordance with the NCP and Section 121(~(1)(F) of CERCLA, 42 U.S.C. ? 9621(f~(1)(F), EPA notified the state of Washington (the "State") on June 30, 1995, of negotiations with Asarco regarding the implementation of the remedial design and remedial action for the Site and EPA has provided the State with an opportunity to participate in such negotiations and be a party to this Amended Consent Decree.

4. In accordance with Section 122(j)(1) of CERCLA, 42 U.S.C. ? 9622(j)(1), EPA notified the federal, state, and Indian tribal natural resource trustees for the Site on June 30, 1995, of negotiations with Asarco regarding the release of hazardous substances that may have resulted in injury to the natural resources under their trusteeships and encouraged the trustees to participate in the negotiation of this Consent Decree. The natural resource trustees for the Site are:(a)the National Oceanic and Atmospheric Administration ofthe Department of Commerce, (b)the Department ofthe Interior,(c)the State of Washington Department of Ecology(on behalf of the Washington Departments of Fisheries, Natural Resources, and Wildlife),(d)the Puyallup Tribe ofIndians, and(e)the Muckleshoot Indian Tribe (hereinafter collectively referred to as the "Natural Resource Trustees").

5. Point Ruston does not admit any liability to the Plaintiff arising out of the transactions or occurrences alleged in the complaint, nor does Point Ruston acknowledge that the release or threatened release of hazardous substances) at or from the Site constitutes an imminent or substantial endangerment to the public health or welfare or the environment.

6. Pursuant to Section 105 of CERCLA,42 U.S.C. ? 9605, EPA placed the Site on the National Priorities List, set forth at 40 C.F.R. Part 300, Appendix B, by publication in the Federal Register on September 8, 1983,48 Fed. Reg.40,658.

7. Because of the complexity of the CB/NT site, Superfund response actions at the CB/NT site are currently coordinated under multiple operable units managed primarily by EPA

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