Source: Houston Chronicle, March 8, 2015
Posted on: http://envfpn.advisen.com
In the 1950s, decades before LeRoy Melcher became a well-known real estate tycoon and philanthropist, he opened his first shopping center on San Felipe Road in River Oaks.
It was a modest 12,000 square feet, with a convenience store at one end, and at the other, a shoe repair shop. Tucked in between was a dry cleaners.
Sixty years later, it sits in one of Houston’s most expensive neighborhoods and has become the epicenter of a contentious debate over the enforcement of Texas’ environmental laws.
On one side is a team of attorneys representing the state and Harris County, who blame the Melcher family and their tenant, River Oaks Cleaners, for a toxic plume of chemicals detected beneath the property. The government is seeking penalties of between $50 to $25,000 per day going back nearly two decades — up to roughly $173 million.
On the other side are Melcher’s heirs, who have refused to settle for anything more than $1. LeRoy Melcher, who died in 1999, and his wife donated millions to charities and the University of Houston, which has three buildings on campus bearing their names.
Trey Melcher, LeRoy’s grandson, said the state and county sued before ever notifying the family or the cleaners that they might be responsible for the pollution.
“If they had said, ‘Hey, we did this investigation and we found some problems and we need to work together to fix it,’ we would have done the right thing and cooperated,” Melcher said.
Lisa Wheeler, a spokeswoman with the Texas Commission on Environmental Quality, said recently that the cleaners has no violations on record.
The Melcher family points to a former dry cleaners across the street, which settled an environmental lawsuit with the county for $2 million, as the likely source of the contamination.
Nearly four years after being sued, the Melchers are still fighting the lawsuit, insisting they did nothing wrong.
“I don’t know where the nastiness is coming from,” Melcher said. “But it definitely feels like a shakedown.”
Some Republican lawmakers and business leaders say government shouldn’t be using lawsuits as enforcement tools. Rep. Charlie Geren, (R-Fort Worth) has introduced a bill that would limit civil penalties the government can seek under state law.
“Is some of this enforcement chasing a rainbow?” State Sen. Paul Bettencourt (R-Houston) asked of the TCEQ at a legislative hearing last month.
Steve Minick, vice president of the Texas Association of Business, said in an interview that county lawsuits are “going way overboard.” The state is already working with businesses on clean-up programs, he noted, like those for leaky gas tanks.
“I would ask the question, how many thousands of gas stations in the Harris County area were cleaned up by the state? And why hasn’t Harris County gone after those people?”
Harris County has brought environmental lawsuits for more than 50 years, said Rock Owens, the county’s managing attorney for environment and infrastructure.
He described them as a last resort for the most egregious offenders and a necessary means to protect the public from polluters, adding that they go forward only with the approval of the county’s Commissioner’s Court.
Harris County has four attorneys handling environmental litigation and compliance. They typically brought about four or five cases a year and settlements generally totaled about $1 million or less annually. The addition of outside lawyers on contingencies about four years ago has been a “force multiplier,” Owens said.
Several high-profile cases have resulted in bigger settlements, including a January agreement with AT&T for about $5 million over leaking storage tanks.
Lawyers for the government recently won a $29.2 million settlement from McGinnes Industrial Maintenance Corp. and Houston-based Waste Management Inc. for pollution in the San Jacinto Waste Pits in eastern Harris County. The remaining defendant in that case, International Paper Co., refused to settle, took its chances with a jury and won. The government is asking for a new trial, Owens said.
Of the $29.2 million, the state and county each will get about $10 million, and the outside lawyers will get $9 million, he said. Owens said once the money is released to the county, it will be up to the Commissioner’s Court to determine how it should be spent.
Jacquelyn Young, an environmental advocate who lived near the waste pits for years, said the lawsuits can bring money back into the communities affected by the pollution, but they also send a message.
“It sets an example by letting companies know that it doesn’t matter how big or small they are,” she said. “They will fight to hold them accountable.”
But Minick, of the Texas Association of Business, thinks there’s a different motive.
“They thought Waste Management had a lot of money,” he said of the Harris County lawsuit.
Some business leaders and Republican lawmakers say the state wouldn’t be involved in such lawsuits if it weren’t for Harris County. In legal briefs for the Melcher and San Jacinto Waste Pits suits, Texas notes it is simply fulfilling its role as a “necessary and indispensable party” in legal actions involving state laws.
Harris County learned of the pollution along San Felipe during a flood control project, Owens said. An investigation led to Hallmark Cleaners, Owens said, which operated between 1976 and 1997. The soil and groundwater contamination was confirmed in 1996. The state identified a mixture of chemicals in the plume, including the solvent Perchloroethylene, or PERC, deemed “a likely human carcinogen” by the EPA.
The Hallmark site was among the first accepted into the state’s dry cleaner remediation program in 2005. The cleaners was razed years ago and replaced with a storage facility.
The state’s monitoring eventually led to the discovery of a second plume below the River Oaks property, Owens said.
In a brief filed with the court in August 2012, then-Attorney General Greg Abbott identified both cleaners as problematic. “It appears each dry cleaning operation is the source of one of the plumes.”
The brief added that River Oaks was not in the remediation program. “Nor has it undertaken any remedial action in connection with the contamination,” Abbott wrote.
William Harmeyer, an attorney for River Oaks Cleaners, said that like the Melchers, his clients maintain the pollution migrated from the Hallmark site.
Owens said the Melchers’ site had been “on the state’s radar for years,” adding that the county lacks the legal authority to write citations for violations of environmental laws.
“All the authority we have is to enforce state law, which means we can file a lawsuit,” Owens said. “That’s it.”
Hallmark settled in November 2012, but the Melchers took the case to a jury trial a year later.
Six days into the trial, the judge declared a mistrial in part because a defense witness’ testimony differed from his deposition. The judge sanctioned the Melchers, the dry cleaners and their attorneys for improper conduct and violations of the court’s orders.
A new trial is scheduled for this fall.
The county pursued the lawsuit against the Melchers in part because TCEQ lacks the resources to enforce environmental laws on its own, Owens said. The Texas Dry Cleaner Remediation Program has 185 sites statewide with pending cases, according to TCEQ.
“We have in Texas the illusion of environmental enforcement,” Owens said. “It looks good on paper.”
Wheeler, the TCEQ spokeswoman, referred questions to the state’s Office of the Attorney General, which is representing Texas in the lawsuit. A spokeswoman for that office said she could not comment on pending litigation.
Owens said the county would consider any “reasonable offer” to settle the lawsuit.
He described the Melchers as “recalcitrant, to say the least.”
“We’d like them to pay a meaningful fine,” Owens said. “It doesn’t have to be $173 million, but it has to be significant. And we want them in the dry cleaning program where they can clean it up themselves.”
Trey Melcher said his family feels like it has been targeted unfairly, describing the lawsuit as a form of “extortion.”
“It’s kind of a scary business model that they can go after landowners and businesses thinking that they have assets and looking for money,” Melcher said. “You’re either going to spend years in litigation, or you can settle.”
“But we didn’t do anything wrong,” he said. “Unfortunately, there is no real recovery for us.”
Disclosure: The Texas Association of Business and the University of Houston are corporate sponsors of The Texas Tribune.