IN THE COURT OF APPEALS OF THE STATE OF OREGON PACIFIC Ill, LLC, an Oregon limited liability company, Intervenor-Appellant...
of Oregon and PedersenJanet M Schroer, OSB# 813645         Stephen G. Leatham, OSB# 873820Hart W agner LLP                ...
i                            TABLE OF CONTENTSI.   STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . ...
ii     A.     Preservation of Error. . . . . . . . . . . . . . . . . . . . . . . . . 22     B.     Standard of Review. . ....
iii                                  TABLE OF AUTHORITIESCASESBadger v. Paulson Inv. Co., Inc., 311 Or. 14, 803 P.2d 1178,...
ivOTHER AUTHORITIES2 RCRA and Superfund: A Practice Guide, 3d § 13:36 . . . . . . . . . . . . . . . . 12
v                        INDEX OF EXCERPT OF RECORDConsent Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
1                    APPELLANTS’ OPENING BRIEFI.    STATEMENT OF THE CASE      A.     Nature of the Action and Relief Soug...
2      E.    Questions Presented on Appeal      1.    Did the Circuit court err in approving the consent judgment in      ...
3          Limiting discovery to one interrogatory was an abuse of discretion.   There is no such discovery procedure in t...
4  pollution on property in W ashington County known as the Tannery Site  (ER 3-8; ER; Complaint). Polluting Defendants at...
5  pollution on the western half (10-11-11 Lucas Aff., ¶¶ 3, 6, 8, Ex. A, p. 2).  Pacific III had no interest in the easte...
66:10-12). Pacific III incurred more that $1,400,000 in cleanup costs (3-20-12 Lucas Aff., ¶¶ 5, 8, 9 ,10, 11, Ex. A). DEQ...
7would have eliminated Pacific III’s and Huske’s rights of contribution fromPolluting Defendants (10-11-11 Lucas Aff., Ex....
8items 50 and 51). Pacific III learned of the proposed First ConsentJudgment in April, 2011 and immediately objected (10-1...
9First Consent Judgment. The Replacement Consent Judgment retainedthe provision insulating Polluter Defendants from Liabil...
10below.            6.    The Judicial Imprimatur      DEQ reached the settlement agreement with the parties other thanLuc...
11exposed to the contamination (03-20-12 Lucas Aff., ¶ 12, 13, Ex. B).      This email was not sent to Pacific III (03-20-...
12  public comment, and then presented the consent judgment to the Circuit  Court. The statute provides scant guidance on ...
13  proper standard of review and the procedural parameters in Oregon’s  circuit courts because Oregon’s environmental rem...
14III.   FIRST ASSIGNMENT OF ERROR       The Circuit Court erred in granting DEQ’s motion for entry ofconsent judgment and...
15fairness and reasonableness. The Circuit Court, however, did not makefindings on any element and did not find that each ...
16with evidence or even a rationale. Rather DEQ simply said, “DEQdetermined that the Consent Judgment is in the public int...
17         Defendant W ells Fargo Bank is ranked number 1 in the United  States in market value and fourth largest in asse...
18   Pacific III could proceed on its claims, or to include Pacific III in the   negotiations.          Nor is it fair to ...
19cases, the administrative civil penalty case, and the criminal case are stillpending (Umatilla Co. Cir. Ct. Case Nos. CF...
20      108 at 113 (7th Cir.1976); accord Ficalora v. Lockheed      California Co., 751 F.2d 995, 996-97 (9th Cir.1985). I...
21the Tannery Site. Pacific III is directly impacted by the settlementbecause it precludes Pacific III’s contribution clai...
22to one interrogatory, a method of discovery not provided for in the OregonRules of Civil Procedure.      A.    Preservat...
23need for a fair and informed resolution of the claim and the need for aspeedy, inexpensive, and efficient resolution of ...
24      materials sought to be introduced relate to a claimants      eligibility for benefits. See Sandoval, 967 F.2d at 3...
25      Life Ins. Co. of N. Am., No. 1:08-CV396, 2009 W L 734705, at      *3 (S.D.Ind. Mar. 19, 2009) (citing Semien, 436 ...
26      In the present case, the Circuit Court too narrowly constrained thediscovery, so that the Court was unable to eval...
27needed to establish whether the procedural requirements were satisfiedand whether there is evidence of bias.      There ...
28an informed finding that the consent decree was fair and reasonable.There is insufficient evidence, without those additi...
EXCERPT OF RECORD
ER 1  1,pr.  l         26  ,   ,     112                          L·J       2 .v,; ,y1                                    ...
ER 2  Av 26. 2()12            2:05PM                                                                                      ...
ER 3      ,,     ,-.[!   .    6                     L,   ,   2"1"                               l) L   2 i)5 PM           ...
ER 4                             2:05PM                                                                           No. 5278...
ER 5                                                                                                        No, 5278   P  ...
ER 6         Apr.   26. 2012    2:05PM                                                                       No.       527...
ER 7      0      Apr. Lb. • ·   22                      Vi    2 :vorhi                               n•nu                 ...
ER 8                                                                                                            h 5278   P...
ER 9                                                                                                No. 5278   P.   10    ...
ER 10                                                                                                       5278     P   I...
ER 11                                                                                                   �h. 5278       12 ...
ER 12               2012    2 06 PM                                                                       No.   5278    P....
Consent Judgment Oregon Court of Appeals
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Consent Judgment Oregon Court of Appeals

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This is the opening brief in the Appeal of the Oregon DEQ Consent Judgment with Wells Fargo Bank regarding Frontier Leather and Ken Foster Farms in Sherwood, OR.

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Consent Judgment Oregon Court of Appeals

  1. 1. IN THE COURT OF APPEALS OF THE STATE OF OREGON PACIFIC Ill, LLC, an Oregon limited liability company, Intervenor-Appellant, Court of Appeals Case No. A151296 v. Washington County Circuit Court STATE OF OREGON, ex rel. DICK Case No. C115183CV PEDERSEN, Director, Department of Environmental Quality, Plaintiffs-Respondents, and CRAIG E. BOWEN; PAMELA A. BOWEN; MICHAEL C. GIBBONS; PATRICK D. HUSKE and TAMARA L. HUSKE; IRONWOOD HOMES, INC.; LINKE ENTERPRISES OF OREGON, INC., fka Frontier Leather Company; DONALD W. NELSON; WELLS FARGO BANK, N.A. ; and JAMES M. WILSON, Defendants-Respondents. APPELLANT’S OPENING BRIEF and Excerpt of Record Appeal from the Judgment of The W ashington County Circuit Court The Honorable Donald R. Letourneau, JudgeMontgomery W . Cobb, OSB #831730 Stephanie Striffler, OSB #824053Montgomery W. Cobb, llc Oregon Dept. Of Justice1001 SW 5th Ave., Suite 1100 1162 Court St. NEPortland, OR 97204 Salem, OR 97301Telephone 503-625-5888 Telephone 503-378-4402mwc@montycobb.com stephanie.striffler@state.or.usAttorney for Appellant Attorneys for Respondents StateCounsel listing continues on next page October 2012
  2. 2. of Oregon and PedersenJanet M Schroer, OSB# 813645 Stephen G. Leatham, OSB# 873820Hart W agner LLP Heurlin Potter Jahn Leatham1000 SW Broadway, Suite 2000 211 E. McLoughlin Blvd., 100Portland, OR 97205 PO Box 611jms@hartwagner.com Vancouver, W A 98666Phone 503 222-4499 sgl@hpl-law.comAttorneys for Craig E. Bowen & Phone 360 750-7547Pamela Bowen Attorneys for W ells Fargo Bank and James W ilsonLoren R. Dunn, OSB# 060350 Patrick G. Rowe, OSB# 072122Riddell W illiams PS Sussman Shank LLP1001 4th Ave. Plaza, Suite 4500 1000 SW Broadway, Suite 1400Seattle, W A 98154 Portland, OR 97205ldunn@riddellwilliams.com prowe@sussmanshank.comPhone 206 624-3600 Phone 503 227-1111Attorneys for Linke Enterprises of Attorneys for Michael C. GibbonsOregon, Inc. and Donald NelsonThomas R. Benke, OSB # 922251Environmental Compliance7845 SW Capitol Hwy, Suite 8Portland, OR 97219trbenke@env-compliance.comPhone 503 246-1514Attorney for Patrick D. Huske,Tamara L. Huske and IronwoodHomes, Inc.
  3. 3. i TABLE OF CONTENTSI. STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A. Nature of the Action and Relief Sought. . . . . . . . . . . . . . . . . 1 B. Nature of the Judgment to be Reviewed. . . . . . . . . . . . . . . . 1 C. Jurisdiction on Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 D. Jurisdictional Dates on Appeal. . . . . . . . . . . . . . . . . . . . . . . 1 E. Questions Presented on Appeal. . . . . . . . . . . . . . . . . . . . . . 2 F. Summary of Arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 G. Summary of Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1. The Contamination. . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. The Cleanup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3. The Secret Settlement . . . . . . . . . . . . . . . . . . . . . . . . . 6 4. The Revelation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 5. The Replacement Consent Judgment . . . . . . . . . . . . . 8 6. The Judicial Imprimatur . . . . . . . . . . . . . . . . . . . . . . . 10 II. Overview of ORS 465.325 Consent Judgment Scheme . . 11 A. Proceedings prior to Consent Judgment . . . . . . . . . . 11 B. Circuit Court Review . . . . . . . . . . . . . . . . . . . . . . . . . .12 C. Standard of Appellate Review . . . . . . . . . . . . . . . . . .13 III. FIRST ASSIGNMENT OF ERROR. . . . . . . . . . . . . . . . . . . 14 The Circuit Court erred in granting DEQ’s motion for entry of consent judgment and in entering the consent judgment where there was insufficient evidence that the settlement was fair and reasonable, in the face of evidence of bias and unfairness. A. Preservation of Error. . . . . . . . . . . . . . . . . . . . . . . . . 14 B. Standard of Review. . . . . . . . . . . . . . . . . . . . . . . . . . 14 C. Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1. No Evidence of Fairness and Reasonableness 15 2. No Deference on Fairness . . . . . . . . . . . . . . . . . 21 IV. SECOND ASSIGNMENT OF ERROR . . . . . . . . . . . . . . . . 21 The Circuit Court Erred in limiting Pacific III’s requested discovery to one interrogatory, a method of discovery not provided for in the Oregon Rules of Civil Procedure.
  4. 4. ii A. Preservation of Error. . . . . . . . . . . . . . . . . . . . . . . . . 22 B. Standard of Review. . . . . . . . . . . . . . . . . . . . . . . . . . 22 C. Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23V. CONCLUSION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
  5. 5. iii TABLE OF AUTHORITIESCASESBadger v. Paulson Inv. Co., Inc., 311 Or. 14, 803 P.2d 1178, 1182 (1991) . .13E.E.O.C. v. Hiram Walker & Sons, Inc., 768 F.2d 884 (7th Cir. 1985) . . . . . . 5Hall v. Life Ins. Co. of N. Am., 265 F.R.D. 356, 363 (N.D. Ind. 2010). . . . . . 25Murphy v. Deloitte & Touche Group Ins. Plan, 619 F.3d 1151, 1164 (10th Cir.2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 24Newell v. Weston, 150 Or. App. 562, 572, 946 P.2d 691, 698 (1997) . . . . . 13STATUTESORS 19.205(1) and (5).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ORS 19.255(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1ORS 183.482. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13ORS 183.484. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13ORS 465.320. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 12ORS 465.325. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 11, 12, 25ORS 465.325(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 7, 11, 12, 22, 25ORS 465.325(4)(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12ORS 465.325(4)(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12ORS 465.325(6)(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8ADMINISTRATIVE RULESOAR 340-122-0110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
  6. 6. ivOTHER AUTHORITIES2 RCRA and Superfund: A Practice Guide, 3d § 13:36 . . . . . . . . . . . . . . . . 12
  7. 7. v INDEX OF EXCERPT OF RECORDConsent Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ER 1-42L. Dunn Declaration, Ex. G . . . . . . . . . . . . . . . . . . . . . . . . . . . . ER 43-48Order Granting Entry of Consent Judgment . . . . . . . . . . . . . . . . ER 49-50
  8. 8. 1 APPELLANTS’ OPENING BRIEFI. STATEMENT OF THE CASE A. Nature of the Action and Relief Sought This is an appeal from a “consent judgment” (general judgment ofconsent) memorializing a settlement among the State of Oregon (DEQ)and other defendants pursuant to ORS 465.325(4). The consentjudgment was entered over the objection of Pacific III, which hadintervened in the Circuit Court and was not a party to the settlement.Pacific III seeks reversal of the judgment and remand for furtherproceedings. B. Nature of the Judgment to be Reviewed The Circuit Court granted DEQ’s motion for entry of consentjudgment and ordered discovery limited to one interrogatory. C. Jurisdiction on Appeal This Court has jurisdiction pursuant to ORS 19.205(1) and (5). D. Jurisdictional Dates on Appeal The consent judgment was entered on March 27, 2012. The Noticeof Appeal was filed on April 26, 2012, within the time allowed by ORS19.255(1).
  9. 9. 2 E. Questions Presented on Appeal 1. Did the Circuit court err in approving the consent judgment in the absence of evidence that it was fair or reasonable? 2. Should the trial court have deferred to DEQ on the question of fairness of the settlement? 3. Should the trial court have limited discovery to one interrogatory, a procedure not contemplated by the Oregon Rules of Civil Procedure where there was evidence of unfairness and bias improperly influencing DEQ? F. Summary of Arguments In the presence of evidence strongly suggesting that Pacific III wasbeing deliberately excluded, and its contribution rights deliberatelyeliminated, the Circuit Court was obligated to give the consent judgmentheightened scrutiny. The circuit court did not have sufficient evidence tojustify a finding of fairness under these circumstances and should haverequired DEQ to provide discovery. The Circuit Court should haverefrained from ruling on the consent judgment without more, or shouldhave declined to enter the consent judgment. The Circuit Court was not obliged to defer to DEQ on the questionof economic fairness of the settlement, an issue which is not a subject ofsuperior agency technical expertise.
  10. 10. 3 Limiting discovery to one interrogatory was an abuse of discretion. There is no such discovery procedure in the Oregon Rules of Civil Procedure. More extensive discovery was required to evaluate whether DEQ met the statutory criteria and on the issue of fairnes. G. Summary of Facts 1 DEQ secretly negotiated a settlement with polluting parties, deliberately structured to cut out Pacific III, even though Pacific III spent $1.4 million to clean up the contamination pursuant to a prospective purchaser agreement (PPA) between DEQ and Pacific III (10-11-11 Lucas Aff., ¶¶ 8, 9, Ex. A; 3-20-12 Lucas Aff., ¶¶ 5, 8, 9 ,10, 11, Ex. A).2 DEQ then misused its authority under ORS 465.325 to obtain judicial approval of the settlement and consummate its plan to deprive Pacific III of compensation (DEQ Memo. in Support of Motion for Entry of Consent Judgment, pp. 9-10 (OJIN 15)). 1. The Contamination Defendants W ells Fargo, W ilson, Nelson and Linke (together referred to as Polluting Defendants) were sued by DEQ for liability for 1 The trial court did not make findings of fact. The cited evidencesupports the following statement of facts. 2 Defendants’ oral motions to strike the declarations and affidavits ofVeley and Lucas were overruled (3-26-12 Tr. 35). Prior motions to strikewere not ruled on (12-5-2011 Tr. 45).
  11. 11. 4 pollution on property in W ashington County known as the Tannery Site (ER 3-8; ER; Complaint). Polluting Defendants at various times owned or controlled the property or operations of a leather tannery and a battery manufacturing plant on the Tannery Site (ER 3-8; 10-11-11 Lucas Aff., ¶ 4, Ex. A, p. 2, Ex. B, p. 3).3 The operations resulted in significant contamination of the Tannery Site with hazardous substances including trivalent chromium oxide, cadmium, copper, mercury, chromium, cyanide, asbestos, oils, solvents and lead from lead-acid battery manufacturing and from battery casings that had been piled on the site by prior operators (ER 4-7; 10-11-11 Lucas Aff., Ex. A, p. 2-6; 03-20-12 Lucas Aff., ¶ 5). These hazardous substances contaminated the soils and wells on the Tannery Site (Id.). Some of the hazardous substances from the Tannery Site operations were transported and dumped on the KFF Site (Ken Foster Farms), a portion of which was later owned by the Huske Defendants.4 2. The Cleanup Pacific III bought the western half of the Tannery Site and entered into a Prospective Purchaser Agreement (PPA) with DEQ to clean up the 3 Affidavits and declarations are abbreviated Aff. and Decl., precededby the date and author. Transcript citations are preceded by the date . 4 Patrick Huske, Tamara Huske and their business, DefendantIronwood Homes, Inc.
  12. 12. 5 pollution on the western half (10-11-11 Lucas Aff., ¶¶ 3, 6, 8, Ex. A, p. 2). Pacific III had no interest in the eastern half of the Tannery Site and no responsibility or liability for cleaning it up (10-11-11 Lucas Aff., ¶ 3, 6, 8, Ex. A). The eastern half has not been cleaned up (ER 3-8). The PPA provided detailed requirements and plans for the extensive clean up (10- 11-11 Lucas Aff., Ex. A). The PPA contained a clause in which both DEQ and Pacific III reserved, “any claim or cause of action they respectively have as to any person or entity not a party to this agreement” (10-11-11 Lucas Aff., Ex. A, p. 25, item H(2)). Pacific III performed its remediation obligations under the PPA, successfully removing the contaminants and rendering the western half of the Tannery Site environmentally safe (10-11-11 Lucas Aff., Ex. C). DEQ expressly approved the cleanup and remediation (Lucas Aff., ¶ 10, Ex. C).5 DEQ admitted that "[a]t the time the DEQ approved the Consent Judgment, it was not aware of any need for further remediation on the W estern [half of the] Property" (DEQ Response to Interrogatory, p. 5 See also, Administrative Record, No. 26 (No Further ActionDetermination Tax Lot 500, Former Frontier Leather Site, Sherwood,Oregon, ECST #116), No. 28 (No Further Acton Determination Lots 1 and 2,Tax Lot 400. Former Frontier Leather Site, Sherwood, Oregon ECSI #1 16),and No. 34 (Conditional No Further Action Determination. Former FrontierLeather Site. Tax Lot 1100, 15104 SW Oregon Street, Sherwood, Oregon,ECSI #116) (Confirming issuance of NFA’s for Tax Lots 500,900, 1000 and1100- i.e. the W estern Half of the Tannery Site).
  13. 13. 66:10-12). Pacific III incurred more that $1,400,000 in cleanup costs (3-20-12 Lucas Aff., ¶¶ 5, 8, 9 ,10, 11, Ex. A). DEQ oversaw the clean up andPacific III paid DEQ its oversight costs for the cleanup project (10-11-11Lucas Aff., Ex. A, p. 24). DEQ determined that a “substantial public benefit” would resultfrom Pacific III’s clean up of the western half of the Tannery Site (10-11-11 Lucas Aff., Ex. A, p. 7, item P). 3. The Secret Settlement W ithout notice or invitation to Pacific III, DEQ undertook settlementnegotiations with Polluter Defendants to settle DEQ’s claims for cleanupcosts on the entire Tannery Site, including the western half cleaned up byPacific III (10-11-11 Veley Aff., ¶ 9, 10; 10-11-11 Lucas Aff., Ex. B, p. 2).DEQ reached a deal with Polluter Defendants Linke and Nelson andprepared a consent judgment (First Consent Judgment) memorializingthe settlement on March 9, 2011 (10-11-11 Lucas Aff., ¶ 12, 13, Ex. B).This settlement covered the entire Tannery Site, including the westernhalf cleaned up by Pacific III (10-11-11 Lucas Aff., ¶ 14, Ex. B, p. 2). Iteven included the KFF Site cleaned up by Huske Defendants (10-11-11Lucas Aff., ¶ 14, Ex. B, p. 2, 4), with no remuneration to HuskeDefendants (10-11-11 Lucas Aff., Ex. B). By statute and its express terms, the First Consent Judgment
  14. 14. 7would have eliminated Pacific III’s and Huske’s rights of contribution fromPolluting Defendants (10-11-11 Lucas Aff., Ex. B at 10-11, item 8). ORS465.325(6)(b). The First Consent Judgment purported to resolve all the cleanupcosts for $600,000 (10-11-11 Lucas Aff., Ex. B, p. 6), when Pacific III hadspent $1,400.000 (03-20-12 Lucas Decl., ¶ 5, 8, 9, 10) on theremediation of its portion of the contaminated property. The record reveals one of DEQ’s possible motives for concealingthe negotiations from Pacific III, (11-18-2011 L. Dunn Decl., Ex. G). J.Patrick Lucas is the managing member of Pacific III (10-11-11 Lucas Aff.,¶ 2). Mr. Lucas has been engaged in a long running conflict with DEQregarding an unrelated site in rural eastern Oregon which is the subject ofcurrently pending litigation (Umatilla Co. Cir. Ct. Case Nos. CF090292and CF 080235; OAH Case No. 1002077) and has been the subject ofprotracted prior litigation (11-18-2011 L. Dunn Decl., Ex. G). Pacific III isthe only party with a stake or means excluded by DEQ from thesettlement negotiations. 4. The Revelation Consent judgments are required to be made available for publiccomment. ORS 465.235(4); ORS 465.320. The public review period forthe First Consent Judgment began on March 14 or April 1, 2011 (ER 40,
  15. 15. 8items 50 and 51). Pacific III learned of the proposed First ConsentJudgment in April, 2011 and immediately objected (10-11-11 Lucas Aff.,¶ 15; 10-11-11 Veley Aff., ¶ 7, Ex. C). On April 7, 2011, Pacific III suedPolluter Defendants and DEQ for contribution and to recover its cleanupcosts (10-11-11 Veley Aff., ¶ 8, Ex. E). The cost recovery claim wasdismissed on motion by some of the defendants in that case (10-11-11Veley Aff., ¶ 9). The remainder of those claims were dismissed pursuantto a stipulated judgment of dismissal without prejudice which included atolling agreement, pending the resolution of the instant case because theconsent judgment in this case would preclude Pacific III’s claims againstPolluter Defendants. ORS 465.325(6)(b). 5. The Replacement Consent Judgment DEQ withdrew the proposed First Consent Judgment on June 29,2011 (ER 40, item 54) and, again without notice or invitation to Pacific III,renegotiated another consent judgment (Replacement ConsentJudgment - ER 1-42) with Polluter Defendants (ER 1-42; 10-11-11 VeleyAff., ¶ 10). The Replacement Consent Judgment contained the sameprimary terms as the First Consent Judgment, but added additionalparties and increased the settlement amount (compare ER 1-42 with 10-11-11 Lucas Aff., Ex. B). The Replacement Consent Judgment increasedthe settlement amount to $2,600,000 (ER 9) a four fold increase over the
  16. 16. 9First Consent Judgment. The Replacement Consent Judgment retainedthe provision insulating Polluter Defendants from Liability to Pacific III(ER 18-19). DEQ offered to immunize Polluter Defendants from liability toPacific III (ER 18-19), despite the absence of any payment for the cleanup of the western half of the Tanner site cleaned up by Pacific III. DEQnoticed the Replacement Consent Judgment for public comment on July1, 2011 and the comment period ended on August 1, 2011 (ER 8, 40). This Replacement Consent Judgment is the subject of the instantcase. Pacific III objected to the Replacement Consent Judgment andsued DEQ and Polluter Defendants. DEQ’s response to Pacific III’sobjection was: Pacific III also asserted its claim that DEQ would breach the PPA in a lawsuit against the DEQ and settling parties. Pacific III, LLC v. Wells Fargo Bank. et al.. W ashington Co. Circuit Court Case No. C 112031 CV. On August 8. 2011, the court ruled that Pacific III had failed to state a claim against DEQ and its action against DEQ should be dismissed. DEQs position before the court was that entry of the proposed consent judgment is consistent with the DEQs rights against other liable parties for cleanup at the Frontier Leather [Tannery] site, and that contribution protection is granted by statute to parties settling with DEQ. (0-28-11 Giles Decl., Ex. B, p. 10).Pacific III intervened in the present case, as described immediately
  17. 17. 10below. 6. The Judicial Imprimatur DEQ reached the settlement agreement with the parties other thanLucas before going to public comment (Tr. 17). On February 21, 2012, five months after DEQ filed this lawsuit toapprove the Replacement Consent Judgment, and six months after thecomment period had expired, DEQ emailed a small group of people andattached a "February 2012" update regarding the Ken Foster Farm [KFF]Site entitled "Re: Ken Foster Farm Site-Change in Risk-BasedConcentrations for Chromium" (03-20-12 Lucas Aff., ¶¶ 12, 13, Ex. B)The email was sent at 3:53 p.m., precisely 18 minutes after Pacific III,LLC served its Response to DEQ’s motion for entry of the replacementconsent judgment; (03-20-12 Veley Aff., ¶ 4, 5, 6, Ex. A). DEQ hadrepresented to the court that the record was as posted prior to thesupplemental response (03-20-12 Lucas Aff., ¶¶ 12, 13, Ex. B). Thealteration to the record, announced that DEQ had changed thecontamination level criteria for hexavalent chromium (03-20-12 LucasAff., ¶¶ 12, 13, Ex. B). DEQ, based on the change, withdrew its findingthat the KFF site was not a risk to human health (03-20-12 Lucas Aff., ¶13, Ex. B; 03-20-12 Veley Aff., ¶ 7). The alteration also revealed for thefirst time that the residents of the subdivision on the KFF Site were
  18. 18. 11exposed to the contamination (03-20-12 Lucas Aff., ¶ 12, 13, Ex. B). This email was not sent to Pacific III (03-20-12 Lucas Aff., ¶ 14, Ex.B). It was provided to Pacific III by an environmental consultant (Id.). DEQ did not withdraw the Replacement Consent Judgment, did notconduct new risk assessments, nor did it reopen the public commentperiod following this change in the record (03-20-12 Lucas Aff., ¶¶ 12, 13,Ex. B.; 03-20-12 Veley Aff., ¶ 8; entire administrative record).II. OVERVIEW OF ORS 465.325 CONSENT JUDGMENT SCHEME Oregon’s appellate courts have not addressed the procedural orsubstantive questions raised by the entry of a consent judgment in aCircuit Court under ORS 465.325(4). Common to all the assignments oferror are the unknowns of this process. Unfortunately, as noted by JudgeLetourneau (Tr. 35-36), the statute offers almost no guidance. It is moreaccurate to describe the consent judgment provisions of ORS 465.325 as“allowing” a consent judgment rather than governing it. The term“scheme” is a stretch when referring to this statute. A. Proceedings prior to Consent Judgment DEQ followed a simple process for arriving at the consentjudgment. DEQ simply negotiated the settlements, provided notice ofthem after the fact, assembled an “administrative record” consisting ofthe items listed in Exhibit A to the consent judgment (ER 35-40), allowed
  19. 19. 12 public comment, and then presented the consent judgment to the Circuit Court. The statute provides scant guidance on the pre-submission process. It requires notice of the proposed agreement to “the public and to persons not named as parties to the agreement,” an opportunity to comment and applies the requirements of ORS 465.320 as to the duration of the comment period, a public meeting, and the manner of notice. ORS 465.325(4)(d). Apparently DEQ has not enacted any rules governing consent judgments under ORS 465.325(4). OAR 340-122-0110 specifies the content of the administrative record in remedial actions, but does not appear to apply to settlements by consent decree. Conspicuously absent from the “notice and service list” attached to the consent judgment is Pacific III (ER 41-42). B. Circuit Court Review ORS 465.325 does not expressly provide for any review by the Circuit Court. It simply says that “the agreement shall be entered in the appropriate circuit court as a consent judgment.” ORS 465.325(4)(a). DEQ asserted, and the parties proceeded in the Circuit Court on the assumption that federal case law, decided under CERCLA 6 provides the 6 A useful, if condensed, summary of federal law on challenging anEPA consent decree may be found at: Settlement and Consent Decrees inCERCLA Actions, 2 RCRA and Superfund: A Practice Guide, 3d § 13:36
  20. 20. 13 proper standard of review and the procedural parameters in Oregon’s circuit courts because Oregon’s environmental remediation statutory scheme was modeled in part on the CERCLA statutes. “In situations involving Oregon laws in large measure drawn from a federal counterpart, it is appropriate to look for guidance to federal court decisions interpreting similar federal laws, even though those decisions do not bind us.” Badger v. Paulson Inv. Co., Inc., 311 Or. 14, 21, 803 P.2d 1178, 1182 (1991). This Court has held that federal CERCLA case law provided guidance in interpreting another provision of ORS 465. Newell v. Weston, 150 Or. App. 562, 572, 946 P.2d 691, 698 (1997) review denied, 327 Or. 317, 966 P.2d 221 (1998). C. Standard of Appellate Review Left for this court to decide, is the proper standard of review on appeal. Federal case law interpreting CERCLA provisions does not apply to a question of appellate procedure in Oregon courts. DEQ asserted that this case is not subject to ORS 183 (Tr. 26). The standards of review in ORS 183.482 and ORS 183.484 would not apply if that position is correct. Alternative standards of review to be considered include the federal CERCLA case law and the familiar Oregon standards for review of a trial court’s findings of fact and conclusions of law.(2012).
  21. 21. 14III. FIRST ASSIGNMENT OF ERROR The Circuit Court erred in granting DEQ’s motion for entry ofconsent judgment and in entering the consent judgment where there wasinsufficient evidence that the settlement was fair and reasonable, in theface of evidence of bias and unfairness. A. Preservation of Error DEQ filed its motion for entry of consent judgment (OJIN 14).Pacific III filed a response in opposition (OJIN 64) and a supplementalresponse (OJIN 76) to the motion along with supporting documents anddeclarations. The Circuit Court granted the motion for entry of consentjudgment (ER 49-50) and entered the consent judgment (ER 1). B. Standards of Review This assignment of error presents questions of law on the questionof deference, which are reviewed de novo for errors of law; and questionsof the decisions of the Circuit Court on the issue of fairness, which arereviewed for abuse of discretion and for errors of law on the applicablestandard to be applied to Circuit Court review of consent judgments. C. Argument DEQ acknowleged in its memorandum in support of the motion forentry of consent judgment that the Circuit Court was required to reviewDEQ’s compliance with each element of ORS 465.325 and to review for
  22. 22. 15fairness and reasonableness. The Circuit Court, however, did not makefindings on any element and did not find that each element was factuallyjustified. Rather the Court simply found that it was required to defer toDEQ’s action in entering into the consent judgment and granted DEQ’smotion for entry of judgment, despite feeling very conflicted about PacificIII’s predicament (Tr. 36-38). Although DEQ listed the Oregon statutory elements, as well as theCERCLA case law requiring fairness in its memorandum in support of themotion for entry of consent judgment. Despite reciting the fairnessrequirement at p. 4 of the memorandum in support, DEQ did not discussit and did not offer any evidence that the settlement was fair or that it wasreasonable. 1. No Evidence of Fairness and Reasonableness There is no evidence sufficient to support a finding that the consentjudgment was fair or reasonable under the circumstances. It was,therefore, an abuse of discretion to approve and enter the consentjudgment. The Circuit Court ordered DEQ to answer one interrogatorywhich asked DEQ to explain why it included the western half of theproperty in the consent judgment, eliminating Pacific III’s contributionclaim against W ells Fargo, the obvious deep pocket Polluter Defendant,for a mere $1,900,000. DEQ did not see fit to address the fairness issue
  23. 23. 16with evidence or even a rationale. Rather DEQ simply said, “DEQdetermined that the Consent Judgment is in the public interestnotwithstanding the fact that Pacific III failed to obtain a judgment againstsome of the defendants and, upon entry of the Consent Judgment, will bebarred by statute from seeking contribution from those defendants.”Response to Interrogatory, p. 4:9-12. Here, the agency, DEQ, did not exercise discretion or judgment. Itmerely excluded Pacific III from the settlement process and wiped outPacific III’s claims without any rationale whatsoever. DEQ’s position onthis record is, “we decided to because we decided to.” In the absence ofan exercise of discretion, there is no discretion to which a court needdefer. Pacific III objected to the consent judgment as unfair becausePacific III was excluded from the negotiations, was precluded by theconsent judgment from recovering its clean up costs, and from assertingcontribution claims. DEQ offered no evidence that it had consideredthese factors and no rationale to support its decision to enter into theconsent judgment without including Pacific III, or at least affording PacificIII a chance to participate. W ithout Pacific III’s participation, neither DEQnor the Circuit Court could possibly evaluate whether additional fundscould have been obtained from the Polluter Defendants.
  24. 24. 17 Defendant W ells Fargo Bank is ranked number 1 in the United States in market value and fourth largest in asset value according to its latest annual report.7 Its earnings for 2011 were up 28% to $15.9 billion. Id. W ells Fargo’s $1.9 million share of the consent judgment settlement amount is .01194969 of one percent of last year’s earnings. That is the equivalent of $11.95 for a person earning $100,000 per year. It is no wonder that DEQ did not argue in this case that W ells Fargo could not have contributed more in order to compensate Pacific III for its efforts, or that W ells Fargo would not have entered into a consent judgment without the immunity from liability to Pacific III. Not only would those arguments have been implausible, they would have been impossible on this record because DEQ did not have any facts to support those arguments. DEQ never tried to find out. There was no evidence of any attempts to bring Pacific III into the negotiations or to allow Pacific III to bring its claims against W ells Fargo. On the contrary there is evidence that Pacific III was deliberately excluded, and no evidence proffered to the contrary. If the consent judgment is affirmed on this appeal, no one, including DEQ, will ever know whether it was possible or probable or impossible to structure the settlement so that 7 https://www.wellsfargo.com/downloads/pdf/invest_relations/wf2011annualreport.pdf
  25. 25. 18 Pacific III could proceed on its claims, or to include Pacific III in the negotiations. Nor is it fair to deliberately exclude the one party who successfully cleaned up its portion of the Tannery Site from not merely the negotiations, but from all compensation whatsoever. It may be, in abstract theory, possible that in some other case there may be a reason to shut out the environmental savior of real estate from compensation. For example, perhaps the only polluter defendant may be impecunious. But it this case, no reason was offered (see DEQ’s response to interrogatory offering nothing), and no reason can be found. The decision to exclude Pacific III was arbitrary and capricious, if not worse. In addition to the lack of evidence to legitimize the ostracism of Pacific III and the deliberate elimination of its contribution claims, there is other evidence suggesting a motive for DEQ to act capriciously: bias. DEQ was involved in unrelated civil and criminal litigation with Patrick Lucas, the manager of Pacific III (ER 43-48 - Ex G to Loren Dunn 8 Decl. of 11-18-2011) and had accused Mr. Lucas of environmental crimes and violations unrelated to Pacific III or the Tannery Site. At least two of the 8 Oddly, this evidence was submitted by counsel for W ells Fargo Bankin a transparent attempt to smear Pacific III by association, using irrelevantevidence. Unwittingly, he offered evidence which actually is relevant toDEQ’s bias.
  26. 26. 19cases, the administrative civil penalty case, and the criminal case are stillpending (Umatilla Co. Cir. Ct. Case Nos. CF090292 and CF 080235;OAH Case No. 1002077). Parties in litigation have obvious self interestand emotional biases. This evidence is sufficient cause to require a realexplanation, supported by evidence, of the reasons Pacific III wasexcluded from the settlement and its contribution claim eliminated withoutreason. Federal courts reviewing consent decrees have developed a list ofsuspicious factors which cause a consent decree to be carefullyscrutinized. In E.E.O.C. v. Hiram Walker & Sons, Inc., 768 F.2d 884,890-91 (7th Cir. 1985), the Seventh Circuit reviewed the cases: Those suspicious factors include the allocation of most or all of the settlement benefits to the named plaintiffs or, in cases like this, the charging parties, see Holmes v. Continental Can Co., 706 F.2d 1144, 1147 (11th Cir.1983); United States v. Texas Education Agency, 679 F.2d 1104, 1107 (5th Cir.1982) (per curiam); Plummer v. Chemical Bank, 668 F.2d 654 (2d Cir.1982), the filing of a proposed decree early in the history of a case, before significant discovery has occurred, see Oswald v. General Motors Corp. (In re General Motors Corp. Engine Interchange Litigation), 594 F.2d 1106, 1128 (7th Cir.1979), cert. denied, 444 U.S. 870, 100 S.Ct. 146, 62 L.Ed.2d 95; accord Malchman v. Davis, 706 F.2d 426, 434 (2d Cir.1983); TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456, 463 (2d Cir.1982); Plummer v. Chemical Bank, 668 F.2d 654, or, an allegation that the attorneys involved have sacrificed their clients interests to assure themselves of receiving sizable attorneys fees, Oswald v. General Motors Corp. (In re General Motors Corp. Engine Interchange Litigation), 594 F.2d at 1130; Patterson v. Stovall, 528 F.2d
  27. 27. 20 108 at 113 (7th Cir.1976); accord Ficalora v. Lockheed California Co., 751 F.2d 995, 996-97 (9th Cir.1985). In the present case, most of the settlement funds went to employees other than the principal charging parties, see Parker v. Anderson, 667 F.2d 1204 (5th Cir.1982), the settlement occurred only after extensive discovery, see Flinn v. FMC Corp., 528 F.2d at 1172 (settlement at late stage of discovery assures sufficient development of record to permit reasonable assessment of merits), and, each party agreed to bear its own costs.In the instant case, DEQ has allocated the settlement proceeds toexclude compensating a party that has actually cleaned up the mostcontaminated portion of the site and has not shown that the PollutingDefendants lack the means to respond in damages for the full amount ofthe cleanup - whether it be to Pacific III in a contribution suit or an amountto be allocated to Pacific III from a settlement. DEQ has not shown howits allocation of the settlement proceeds is consistent with a fairsettlement designed to pay for remediation of the pollution on the twosites. DEQ has not offered any evidence to justify this apparentlycapricious action. There is no evidence that the settlement amount couldnot have been large enough to at least partially compensate Pacific III. DEQ argued that these concerns are just Pacific III’s concerns, andthat DEQ must consider the larger picture. But that is no justification forignoring Pacific III’s interests completely. Pacific III is not just anymember of the public. Pacific III cleaned up the major contamination on
  28. 28. 21the Tannery Site. Pacific III is directly impacted by the settlementbecause it precludes Pacific III’s contribution claim against W ells Fargo.Fairness requires that Pacific III’s concerns be addressed meaningfully. There is no evidence that Pacific III’s concerns were addressedmeaningfully. The consent judgment should be reversed. 2. No Deference on Fairness Deference is granted to an administrative agency in exercising itsdiscretion and in areas of technical knowledge where the agency hasspecial expertise. Deference is not required where an issue is one ofgeneral knowledge. Fairness of a monetary settlement and proceduralfairness are areas in which the courts and lawyers have expertise andare equipped to fully evaluate the fairness of settlements. The Circuit Court stated that it was deferring to DEQ completely(Tr. 36-38). The Court did not make any finding of fairness, but thestandard had been briefed and argued extensively. The court should nothave deferred to DEQ on the fairness element. The case should beremanded for a new determination of fairness, after discovery and withoutdeference to DEQ on the question of economic fairness of the monetarysettlement.IV. SECOND ASSIGNMENT OF ERROR The Circuit Court Erred in limiting Pacific III’s requested discovery
  29. 29. 22to one interrogatory, a method of discovery not provided for in the OregonRules of Civil Procedure. A. Preservation of Error Pacific III filed its motion to allow discovery (OJIN 38), seeking thefull range of discovery methods, but with limited scope and duration (12-5-2012 Tr. 47-48). The motion was allowed in part but mostly denied (Id).Subsequently after briefing, the Circuit Court ruled that Pacific III wouldbe allowed only to propound one interrogatory (12-5-2012 Tr. 47-48). B. Standard of Review In the absence of law governing the standard of review of this issuein a consent judgment proceeding, we propose that the standard ofreview for whether discovery is allowed in an ORS 465.325(4) consentjudgment proceeding is for errors of law. See, e.g., Murphy v. Deloitte &Touche Group Ins. Plan, 619 F.3d 1151, 1164 (10th Cir. 2010)(“wereview de novo whether the district court employed the correct legalstandard in resolving a discovery request”). The standard of review of acourt’s determination of what methods of discovery are available in aconsent judgment proceeding should also be for errors of law. See, Id.The standard of review for a court’s limitation of discovery or for settingthe scope of discovery should be for abuse of discretion. See, Id. (“...inexercising that discretion the district court must bear in mind both the
  30. 30. 23need for a fair and informed resolution of the claim and the need for aspeedy, inexpensive, and efficient resolution of the claim, we will notdisturb a district courts exercise of discretion unless it has abused thatdiscretion”). C. Argument DEQ argued that no discovery should be allowed because DEQbelieved the scope of the Circuit Court’s review is limited to theadministrative record DEQ had created (Tr. 46). Pacific III argued thatthe scope of the Circuit Court’s review was broader and required theCircuit Court to evaluate additional factors, particularly factors outside therecord which might affect the fairness and reasonableness standards thefederal courts evaluate in determining whether to accept a consentjudgment (OJIN 46 - reply brief on motion to allow discovery, pp. 9-10). Even if the Circuit Court’s review of the consent judgment is limitedto the administrative record, discovery greater than that allowed by theCircuit Court is proper. ERISA cases are an example. In the usualERISA case, review is limited to the administrative record. However,where evidence outside the record is relevant to the court’s evaluation ofan issue, such as bias, discovery will be allowed. For the reasons we have discussed above, then, we conclude that our case law prohibits courts from considering materials outside the administrative record where the extra-record
  31. 31. 24 materials sought to be introduced relate to a claimants eligibility for benefits. See Sandoval, 967 F.2d at 380. Our cases and the Supreme Courts decision in Glenn, however, contemplate that this general restriction does not conclusively prohibit a district court from considering extra-record materials related to an administrators dual role conflict of interest. Therefore, discovery related to the scope and impact of a dual role conflict of interest may, at times, be appropriate, and we now turn to elucidating the standard for addressing discovery requests related to a dual role conflict of interest.Murphy v. Deloitte & Touche Group Ins. Plan, 619 F.3d 1151, 1162 (10thCir. 2010). A US District court surveyed cases allowing discovery on theissues of bias and conflict of interest in ERISA cases: In Gessling v. Group Long Term Disability Plan for Employees of Sprint/United Management Co., the court found that prior cases such as Semien that “made discovery in such cases nearly impossible to obtain” had been superceded by Glenn [Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S.Ct. 2343, 2346, 171 L.Ed.2d 299 (2008)] and that discovery outside the administrative record is permissible, although the court limited the additional discovery to the issue of bias. No. 1:07-CV-0483-DFH-DML, 2008 W L 5070434, at *1 (S.D.Ind. Nov.26, 2008) (citing Hogan-Cross v. Metro. Life Ins. Co., 568 F.Supp.2d 410, 414-16 (S.D.N.Y.2008); Winterbauer v. Life Ins. Co. of N. Am., 2008 W L 4643942, at *4-6 (E.D.Mo. Oct.20, 2008)). Affirming Gesslings skepticism that Semien remains vital in light of Glenn yet acknowledging the lingering admonition in Semien that discovery should remain limited even in the presence of a conflict, another court in the same division allowed discovery into the conflict of interest such as discovery of underwriting materials, plan procedures, training, the relationship between the administrator and third-party reviewers, compensation structures, approval/denial statistics, and steps taken to ensure accuracy. See Fischer v.
  32. 32. 25 Life Ins. Co. of N. Am., No. 1:08-CV396, 2009 W L 734705, at *3 (S.D.Ind. Mar. 19, 2009) (citing Semien, 436 F.3d at 814- 15); see also Barker, 265 F.R.D. at 394-95, 2009 W L 5191441, at *4 (finding that Glenn contemplates the production of evidence relevant to the claim administrators alleged conflicts in making disability determinations but assessing each request for relevancy); Anderson v. Hartford Life and Accident Ins. Co., 668 F.Supp.2d 1129, 1130-31 (S.D.Ind.2009) (finding that conflict-of-interest discovery should be the rule rather than the exception in ERISA cases); Hughes v. CUNA Mut. Group, 257 F.R.D. 176, 179 (S.D. Ind. 2009) (agreeing that the test in Semien is incompatible with Glenns rejection of “special procedural ... rules”); Reimann v. Anthem Ins. Cos., Inc., No. 1:08-CV-830, 2008 W L 4810543, at *23 (S.D.Ind. Oct. 31, 2008) (finding that, under Semien and in light of Glenn, plaintiff must have an opportunity to supplement the record and, “presumably, to conduct at least some targeted discovery”); but see Creasey v. Cigna Life Ins. Co. of New York, 255 F.R.D. 481, 482-83 (S.D.Ind.2008), reaffirmed in Creasey v. Cigna Life Ins. Co. of New York, 255 F.R.D. 483, 483-84 (S.D.Ind.2009) (declining to follow Semien but finding that the question of whether further discovery is required in cases with a structural conflict of interest should only be decided after the dispositive motion is fully briefed).Hall v. Life Ins. Co. of N. Am., 265 F.R.D. 356, 363 (N.D. Ind. 2010). But the discovery allowed in a consent judgment proceeding underORS 465.325 should not be so limited. This Court should announce thatthe scope of discovery in an ORS 465.325(4) proceeding includes all themethods allowed under the Oregon Rules of Civil Procedure, which maybe limited by the court to the discovery necessary to allow the CircuitCourt to evaluate whether the proposed consent judgment complies withthe statutory requirement and is fair and reasonable.
  33. 33. 26 In the present case, the Circuit Court too narrowly constrained thediscovery, so that the Court was unable to evaluate the fairness andreasonableness of the settlement. It also abused its discretion inordering an interrogatory, a means of discovery not allowed under theOregon Rules of Civil Procedure. The Court also abused its discretion indictating the content of the one interrogatory it allowed. The adversarialprocess benefits from and is informed by the evidentiary informationgenerated by the motivated self interest of each party in developingissues and tactics, and from the give and take among parties. Orderingdiscovery which allows one party an unfettered and unchecked platformfor self serving and unsupported rhetoric is the antithesis of that process.There was no opportunity to challenge the interrogatory, no opportunity toverify it, no requirement that the answer be verifiable, no crossexamination, no opportunity to obtain corroborating or conflictingdocuments or testimony, no cross-check, no verification. Pacific III should have been afforded an opportunity to findevidence of bias or other improper influence on the process, to verify thatthe administrative record assembled by DEQ was complete andaccurate, and an opportunity to see the supporting documentation for theadministrative record. Discovery of evidence not contained in the administrative record is
  34. 34. 27needed to establish whether the procedural requirements were satisfiedand whether there is evidence of bias. There is evidence which suggests that the exclusion of Pacific IIIfrom the settlement and the elimination by DEQ of Pacific III’scontribution rights was motivated by something other than a fair andobjective resolution of the 1. There is no apparent reason or need for the elimination of DEQ’s contribution claims. 2. There is no evidence that the settlement could not have been achieved with Pacific III’s participation, or without including the western half of the property in the settlement, eliminating Pacific III’s contribution claims. 3. There is no evidence that the massive financial assets of W ells Fargo were insufficient to cover Pacific III’s costs. 4. There is no evidence that the settlement amount could have been increased and a portion distributed to Pacific III. 5. There is no evidence from which it can be determined that it is fair and reasonable to deprive the non-polluting party who actually cleaned up most of the contamination of all compensation for the $1,400,000 it spent on the remediation.W ithout the requested discovery, the court could not, and did not make
  35. 35. 28an informed finding that the consent decree was fair and reasonable.There is insufficient evidence, without those additional facts, to establishthat the consent decree and its complete elimination of Pacific III’scontribution claims is not arbitrary and capricious. There must be somereason to allocate all of the settlement proceeds to the other half of theproperty and to DEQ’s general budget rather than paying at least aportion of the costs of cleaning up the western half cleaned up by PacificIII. On this record there is no such reason. That is why discovery isneeded, to determine if some improper factor was considered by DEQ orinfluenced DEQ to let W ells Fargo off the hook for a farthing, to theexclusion of Pacific III.V. CONCLUSION The order of the Circuit Court should be reversed and the caseremanded for further proceedings. Respectfully submitted this 9 th day of October, 2012. Montgomery W. Cobb, llc /s/ Montgomery W . Cobb Montgomery W . Cobb, OSB# 831730
  36. 36. EXCERPT OF RECORD
  37. 37. ER 1 1,pr. l 26 , , 112 L·J 2 .v,; ,y1 "P� No. 5278 P 2 • ••••••• FILED DF.PARTiIEHT GREGOH JUDICIAl H VI ASHINGTOH COUN l 20!2 MAR 26 PH 3: 49 2 IN THE CIRCUiT COURT OF nlE STATE OF OREGON 3 FOR THE COUNTY OF WASHINGTON 4 S STATE OF OREGON, ex rei DICK PEDERSON,DIRECTOR DBPARTMENT Case No. G lf5�� 6 OF ENVJRONMENTAL QUALITY, CONSENT JUDGMENT General Judgment Plaintiff, 7 v. 8 CRAIG E. BOWEN, PAMELA A. BOWEN, 9 MICHAEL C. GIBBONS, PATRICK D. HUSKE and TAMARA L. HUSKE,I0 IRONWOOD HOMES, INC., LINKE EMTERPRISES OF ORE GON, INC., fka11 FRONTIER LEAlliER COMPANY, DONALD W. NELSON, WELLS FARGO12 BANK, N.A., and JAMES M. WILSON,13 Defendants.14 Contents15 1. Parties and Purpose . . . .. . ................... . ... ..... . . ... .. . .. ... .. .. . . . . ... . .. ... . . . . . . .. .... . . . . .... . ...... . .. ........ . . . .3 ... .. ..16 2. Stipulations and Findings . . ......... . . . . .... ...... . . .. . . .. . . . .... . .. ... ............ .. . . . . .. . . . ... .. ....... . ..... . . ... .... .. . .. ... 317 3. Payment of Remedial Action C osts . .. ... ..... .......... . ... .. . . .. . . .. . . ... . . ... . . .. .............. . . ... .... . . . ........ . .. 9..18 4. Option to· Purchase Linke Property .. .... . ... .. . .. . .. . . . ..... .. . ... ... . .. .......... .. . ..... .. . ...... .. .................. .. 1019 5. Access and CoopeJ:ation. . ,, ... , ........... , ...........................................................1220 6. Soils Management at KFF Site . . .. .. . . . . . .. . . . . . .. .. . . .. .. . . ... . . . . . ..... . . . . .. . .. . . .. . .. . . . . . .. . . . 16..21 7. Notices .................................................................................................................................. 1722 8. Covenant Not to s.ue by State of0reg0il . .. . ... ..... .... . ...... .. ..u ... . . . .. ...... , .................................. l723 9. Liability Release by DEQ.,, .......................... , ............................................... 1824 10. Contribution Protection and Actions . . . ... . . .. , ................... , ...... , .......................... 1825 1L Covenant Not to Sue and Liability Release be Defenden!ll .......... . .. . ....... . . . ... . . . ..... ...... . .. ... . . 1926 12, Effect of Settlement . . . . , .. , ............................................................................ 1 9Page 1 " CONSENT JUDGMENT JUSTICE-112976136·vl DepllltmontofiU5U,. l!iS SW Fifth Ave, Suite410 Portlllll<l, OR 97l01 (911) 673-1180 I Fax: (971) 673-1116
  38. 38. ER 2 Av 26. 2()12 2:05PM No. 5278 P, 3 • • 13. Dispute Resolution ....... . . ...... .,.,,,.., ...... , .. ,,.,.,,,,.,,,.. ,, ........ ,.. H,,,,,u •••• ,.............. , d ..uanu.-o •••�••n 20 2 14, R ecor dini ••••••••••••••••••••"� .. ,.,,.,,.,,u,.... .... ...noouun•nooHuo•••••••••••••••••"*"� .. _.._n,oo 21 3 15. Modification . .. .. . .. . . .. . . . .. ······••t••••,, ............ , ............•.• •••••• ........... ...•.•.. , ••••n• 21 4 16. Signatories; Service . . . ....... ...,,.,,,n, .. , ,.. ,""" . , . . , ... .. . ...,H . . , .... . . ,u•• , .... ,,,., ... ,_, •..•....•. . 21 5 17. Retention of Jurisdiotion . . . . . . . . . ... .. .. .... . ..... �.. .. ..... .. .... . u . ..... .. . . ... . .. .. .. . . . . . . ..... .... .... . ... u......... .... . 21 6 Exhibit I Site Locations 7 Exhibit 2 Tannery Site Map 8 Exhibit 3 KFF Site Map 9 Exhibit 4 Administrative Record Index l0 Exhibit S Notice and Service List11121314151617!81920212223242526Page 2 • CONSENT JUDGMENT JUST!CB4i2!17t>l36-v I Dcp"""" or!.,titS tm SW PHih ...,.., Soito41D l<ltlland, Ol !11201 · (911)673-IBS!l/Pox: mil 61:1-1836
  39. 39. ER 3 ,, ,-.[! . 6 L, , 2"1" l) L 2 i)5 PM No. 5278 P. 4 • • I, Parti e s and Pumose :2 Partie s to this Consent Judgment (collectively, �Parties") are Plaintiff State of Oregon ex 3 rei. the Oregon Department of Environmental Quality ("DEQ") and Defendants Craig E. Bowen 4 and Pamela A. Bowen (the "Bowens"); Michael C, Gibbons ("Gibbons"); Patrick D. Huske, 5 Tamara L. Huske, and Ironwood Homes, Inc. (the "Huskes"); Linke Enterprises of Oregon, Inc., 6 flea Frontier Leather Company ("Linke"}; Donald W. Nelson ("Nelson); Wells Fargo Bank, 7 N.A. ("Wells Fargo"); and James M. Wilson ("Wilson"), collectively, the "Defendants." 8 This Consent Judgment is filed simultaneously with and for the purpose of resolving the 9 underlying compla in t by the State of Oregon. The Partie8 desire to resol ve this action without10 litigation and have agreed to entry of the Consent Judgment without admission or adjudication of11 any issue of fact or law.12 The mutual objectives of the Parties are: (a) to protect public health, safety, and welfare13 and the environment by the implementation of remedial measures in accordance with ORS14 465.200 through 465.410 and regulations promulgated theret.:>; and (b) to resolve each15 Defendants liability at the Facility defined in Paragraph 2.B.(10).16 2. Sdpulations and Findings17 A. Each Defendant stipulates:!8 (1) To entry of this Consent Judgment;19 (2) To perform and comply with all provision s of this Consent Judgment; and20 (3) In any proceeding brought by DEQ to enforce this Consent Judgment, not21 to litigate this Courts jurisdiction over this matter or tbe validity of the Con sent Judgment.22 B. DEQ finds, and each Defendant neither admits nor denies:23 (I) From 1947 to 1988, Linke, fonnerly known as Froniier Leather Company,24 operated a leather tannery at 1210 NE Oregon Street (now 15104 SW Oregon Street) in25 Sherwood, Wasl1ington County, Oregon. The tannery and associated operations encompassed an26 area approximately 33 acres in si?.e, referred to in this Consent Judgment as the "Tannery Site."Page 3 - CONSENT JUDGMENT JUSTICE../12!445269 Oepanment or Juslice 1515 SWFifth Ave, SJJit11 410 P..land, OR 97:101 (971)61l·li80/Fax: (971)673·1886
  40. 40. ER 4 2:05PM No. 5278 p 5 • • The general l ocation of the Tannery Site is shown as "Frontier Leather Company" on Exhibit 1, 2 attached to and incorporated into this Consent Judgment. For purposes of this Consent 3 Judgment, "Tannery Site" llle ans Tax Lots 500,600, 602, 900, 1000, and 1100 in Section 29, and 4 Tax Lot 400 in S ection 28, in Township 2 South, Range 1 West of the WiHamette Meridian, in 5 the southeast quarter of Section 29 and the southwest quarter of Section 28. A map of the 6 Tannery Site is set forth in Exhibit 2, attached to and incorporated by reference into this Consent 7 Judgment. Linke owns Tax Lot 600 within the Tannery Si te, comprising 21.06 acres (the "Linke 8 Property"). 9 (2) Frontier Leather produced fin i shed leather from animal hides using a tanningl0 solution co ntain ing 5 percent trivalent chromium oxide. Hide tanning operations generated large11 vol umes of wastewater, which was processed by a treatment system consisting of a primary and!2 secondary clarifier on Tax Lot 602 (formerly T.L. 503) and aeration p onds on the Linke13 Property. Sludge from the primary clarifier was dewatered using a vacuum filter. Unconfirmed14 reports indicate tha t b efore 1978 these sludges may have contained up to S percent chrom ium .15 This sludge, along with sludge from the aeration ponds, was landfilled on the original Frontier16 Leather facility. Surface water and sediment samples from the fonner wastewater treatment17 lagoons contained metals (includ ing cadmium, chromium, copper, lead, manganese, mercury,18 nickel, and zinc) and volatile organic compounds including di-n-buytlphthalate, methylens19 chloride, 1 ,2-dichloroethane, and toluene. A 1985 sludge sample analysis using the Toxicity20 Leaching Characteristic Procedtlle ("TCLP") detected 460 milligrams per liter (mg/L)21 chromium.22 (3) After tanning, chromium-treated animal hides were "split" and only the23 high value front or grain side of the hides was �old. The splits were landfilled in Tax Lots 50024 and 600 between 1971 and 1974. Analyses of hide splits indicate that they contain significa nt25 concentrations of total chromium. The chromium was predominantly in the trivalent oxidation26 state, although low concentrations of hexavalent chromium were also present. A hide splitPage 4 • CONSENT JUDGMENT JUSTIC�·#28445269 Department of Ju�ticc 1515 SW Fillll Ave, Suite 410 Portland, OR 9720 I (971) 613·1810 I Pax: (97!) 673·1 886
  41. 41. ER 5 No, 5278 P 6 • • sample that ODEQ extracted with distilled water in 1973 released sufficient chromium to suggest 2 that the hide splits could represent a significant threat to groundwater quality, 3 (4) Between 1956 and 1972, Frontier Leather leased a portion of Tax Lot 500 4 including a second building on-site to a series oflead·acid battery manufacturers. Activities at 5 the historic battery manufacturing facility included lead ingot melting and battery assembly 6 operations. The lead used for battery manufacturing was reported to contain between 3 and 7 7 percent antimony. Surface dust samples collected within the facilitys battery area, furnace 8 room, and ventilation duct work in 1988 eontained high concentrations of lead and antimony, 9 Excess lead and sulfuric acid "pastes" from the manufacturing process were discharged to an 10 unlined rec�very sump adjacent to the building. The sump was reportedly cleaned out11 approximately every 10 days, and the recovered materials sold to lead smelters. In addition,12 during the first year of operations (1956), 400 to 500 used batteries per day were preprocessedl3 for the recovery of lead. The empty casings were plied northeast of the building, north of the 14 , acid discharge area. The pile eventually included 200,000 to 300,000 battery casings and15 covered one-third of an acre, In about ! 96!, a fire consumed the casings. The remains of the16 casings (mostly ash) hai:! apparently not been remove(,! as of January 31,2002. Subsurface soil17 east of the former battery manufacturing facility was analyzed for lead in 1988 and 2000. In18 ! 990, Linke excavated 743 tons of lead·conlaminated soil and wastes from the northern end of19 Tax Lot 500, adjacent to the former battery manufacturing facility, The contaminated materials,20 containing up to 95,000 mgikg total lead and up to 160 mg/L lead by TCLP, were shipped to21 Chem-Security Systems in Arlington, Oregon for disposal. No confirmation samples were22 collected, In Apri12000, a soH investigation was performed to further assess lead contamination23 in this area. Soil samples contained up to 43,600 mg/kg lead.24 (5) Unconfirmed reports indicate an estimated 21,000 cubic yards of25 cltromi�-<:ontalning wastes, including chromium"treated hlde splits and chromium-containing26 vac:uum filter slu dge , were placed over ao approximate 6.9 acre area on Tax Lots 500 and 600.Page 5 • CONSENT JUDGMENT lliSTlCE-1128445269 U.partmonl ofllllli" !SIS SW Fifth Avo,Suito4l0 Ponland� OR 97201 (971) m-1880/Fax: (971) 67)-1886
  42. 42. ER 6 Apr. 26. 2012 2:05PM No. 5278 P. 7 • • Other waste alleged to have been buried in this area includes lead-acid battery casings, residues 2 from bumed battery casings, concrete, sulfuric acid from battery manufacturing operations, wood 3 and metal scraps, and household garbage from the City of Sherwood. 4 {6) In 2003, DEQ completed a remedial investigation at Tax Lot 600 at the 5 Tannery Site, and identified metals including antimony, trivalent chromium, lead, manganese, 6 and mercury as contami nants of concern. Chromium was detected at the highest relative 7 concentration. Trivalent chromium was detected up to 21,000 mg/kg in soil associated with 8 landfilled hide splits, up to 13,000 mg/kg in sedimentation lagoon soil, and up to 890 mg/kg in 9 wetland soil collected from the Rock Creek floodplain. A risk assessment undertaken by DEQ I0 for the Tannery Site identified trivalent chromium hot spots in soils at levels posing unacceptable 11 risk to tecrestrial receptors. To address these unacceptable risks, DEQ completed a feasibility !2 study and developed a range of potential remedies for the site involving off·slte removal of13 remaining hide splits and hot spot soil concentrations, and capping of residual contaminated14 sediment with clean filL A final remedy has not.been sele.cted for the Tannery Site.IS (7) In addition to waste disposal at the Tannery Site, between 1962 and 197116 hides and other animal wastes and liquid sludge from operations at the Tannery Site were17 disposed of at what is known as the Ken Foster Farm Site in Sherwood, Oregon ("KFF Site).18 The KFF Site is located approximately one-half mile from the Tannery Site, as shown on Exhibit19 l to this Consent Judgment. For pw:poses of this Consent Judgment, "KFF Site" means the20 entire 40.44-acre tract of property located in the northwest quarter of the southwest quarter of21 Section 33, Township 2 South, Range 1 West of the Wi!lamette Meridian. A map of the KFF22 Site is set forth in Exhibit 3, attached to and incorporated by reference into this Consent23 Judgment.24 {8) Sampling conducted in 2006 at the KFF Site found contaminants in ·25 surface soU including autimony, trivalent chromium, leed, and mercury. Triv.alent chromium26 was detected at up to 58,900 mglkg in soils. In 2007, DEQ completed a screening-level riskPage 6 • CONSENT JUDGMENT JUS11CM2ll445269 Dt:panm�n ofJostiet !SlS SW FlMAVe,Suitt4l(.l Pon!and. OR 97201 (971) 61l-188U I P"; (911)673.iU .
  43. 43. ER 7 0 Apr. Lb. • · 22 Vi 2 :vorhi n•nu • • 1 assessm ent at the KFF Site to assess potential risks to residen ts living on the site . This 2 evaluation concluded that site residents are not subject to significant risk through direct contact 3 with site soils. Limited soil cleanup was completed by Ironwood Homes, Inc. for several 4 residential lots at the Ironwood Hon1es development, resulting in DEQ issuance of no further 5 action determinations for those lots. Soils removed from the lots remain on property owned by 6 t h e Huskes at the KFF Site and are managed in two engineered soil cells. Additional work at the 7 KFF Site is waiTanted, including com pletion of a comprehensive remedial investigation and risk 8 assessment, feasibility study, and implementation of removal or remedial action as necessary. 9 (9) Contaminants described above are "hazardous substances" within the10 meaning of ORS 465.200(16). The presence of these hazardous substances in soils and11 sed iments at the Tannery and KFF Sites constitutes a "release" or "threat of release" of12 hazardous substances into the environment within the meaning of ORS 465.200(22).l3 (1 0} Solely f the purposes of this Consent Judgment, and not otherwise, the or14 "Facility," as defined in ORS 465.200(13}, means; (a) the Tannery Site; (b) the KFF Site; and15 (c) the full extent of existing known or unknown contamination by hazardous substances ofany16 media on, above, or below the Tannery Site or the KFF Site, or that has migrnted , may have17 migrated, or hereafter migrates to anywhere from the Tannery Site or the KFF Site.18 (1 1) Donald Nelson was plant manager for Frontier Leather Company from19 1966 to 1972 and its general manager from 1972 untill988.20 (12) For various time periods from 1969 to present, Wells Fargo Bank or its21 corporate predecessors acted as trustee for Linke·related trusts, which trusts from approximately22 December 1975 onward held a controlling share of stock in Frontier Leather Company, and23 a l le gedly managed operations at the Tannery Site through bank employees. James Wilson24 served on the board of directors of Frontier Leather Company, and acted as Wells Fargos25 representati ve in managing operations at th e Tannery Site.26Page 7 • CONSENT JUDGMENT JUSTICE·#28445269 Dtpartmem of Justice 1515 SW Fifth Ave, Suite 410 Portlaod, OR 97201 (911l61l-t880 /Pox; (911) 673·1386
  44. 44. ER 8 h 5278 P. 9 • • (!3) In 1983, Mi.:hael Gibbons purchased two parcels of undeveloped real 2 property within the boundaries of the KFF Site. Each parcel was approximately ten acres in size. 3 In approximately 1986, Gibbons sold one of the parcels to persons that are not a party to this 4 Consent Judgment. In 1987, Gibbons sold the other parcel, which included Tax Lot 900 and a 5 right·of·way serving Ta,x Lot 900, to Craig and Pamela Bowen. According to Michael Gibbons, 6 during the time he owned the aforementioned parcels, he did not undertake any construction or 7 improvement of the properties, other than to lay a g ravel road in order to provide access to the 8 Tax lot 900 parceL In 2004, the Bowens conveyed Tax Lot 900 and the righHf-way to 9 Ironwood Homes, rnc. Patrick Huske is the sole shareholder of Ironwood Homes, Inc. !0 ( 14) Each Defendant is a "person" within the meaning of ORS 465.200(21), ll an<! is a potentially liable person under ORS 465.255.12 (15) In accordance with ORS 465.325(4)(d) and 465.320(1}, on July 1, 2011,13 DEQ provided public notice and opportunity for comment on this Consent 1udgment through14 publication of notice in the Secretary of States Oregon Bulletin.. DEQ also provided notice of15 the proposed Consent Judgment and a public hearing though publication on July 16, 2011 in The16 Oregonian newspapef. On July 26, 20!1, DEQ held a public meeting in Sherwood regarding the17 Consent Judgment. The public comment period ended on August 1, 20 1 1 . Written and oralIg comments were received and considered by DEQ, all documented in the agencys file.19 (16) Based on the administrative lecord described in the Administrative Record20 Index attached t o and incorporated by reference int o this Consent Judgment as Exhibit 4, the21 Director determines, in accordance with ORS 465.325(1) and (7), that this Consent Judgment22 and Defendants commitments under the Consent Judgment will expedite removal or remedial23 action, minimize litigation, be consistent with rules adopted under ORS 465.400, and be in the24 public interest.2526Page 8 • CONSENT JUDGMENT JUST!C£·#26445269 �partrncnt ofJlstice !51$ SW Pifih Av� Suite410 Ponl.,d, OR 97201 (911) 613·1880 I Fox; (97i)67l-ISS6
  45. 45. ER 9 No. 5278 P. 10 • • 3. Payment of Remedial Action Costs 2 Within 30 days of entry of this Consent Judgment by the Court, the following 3 amounts shall be paid to DEQ by or on behalf of the specified Defendants: 4 5 Bowens $50,000 6 Gibbens $50,000 7 Linke $500,000 8 Nelson $100,000 9 Wells Fargo and Wilson $!,900,00010 (Total) $2,600,0001112 B. Payment must be made by certified or cashiers check(s), made payable to13 "Oregon DEQ, Hazardous Substances Remedial Action Fund," and mailed to: Oregon14 Department of Justice, c/o Kurt Burkholder, 1515 SW Fifth·Ave., Suite 410, Portland, Oregon15 9720 I. Each check must reference "Frontier Leather/KFF Site." The Oregon Department of!6 Justice ("ODOJ� shall bold the check(s) in trust until full payment of the total amount under17 Subsection 3 .A., and, upon full payment, shall forward the check(s) to DEQ. Payment is deemed18 made to OEQ upon receipt by ODOJ.!9 c. Timely payment is of the essence. fn the event timely payment of the total20 amount specified in Subsection 3.A. is not received by 0001, DEQ may, at its sole option21 before receipt of the total amount, move to set aside and/or vacate this Consent Judgment, and22 each Defendant stipulates to such setting aside and/or vacating and waives any objections to the23 same. In the event this Consent Judgment is set aside and/or vacated pursuant to this Subsection,24 and such setting aside and/or vacating is a final non-appealable order, ODOJ shall immediately25 return any payments received.26Page 9 - CONSENT JUDGMBNT JUST!CE-#28445269 Dapartment of Jl.l$tlce 1515 SW Fifth Avt, Suite 410 Portl011d. OR 91201 (97) 97:1-1880 I P": (911) 6n·l3!16
  46. 46. ER 10 5278 P II • • l D. In the event the Courts entry of this Consent Judgment is appealed, payment shall 2 be due bu.t held in trust by ODO.l until the appeal is resolved, ot until this Consent Judgment is 3 set aside and/or vacated in accordance with Subsection 3.C., whichever occurs first. If upon 4 app eal the Courts entry of this Consent Judgment is upheld, ODOJ shall forw ard the check(s) to 5 DEQ. If upon appeal the C ourt s entry of this Consent Judgll)en! is not upheld, or if this Consent 6 Judgment is earlier set aside and/or vacated, ODOJ shall immediately return any payments 7 received. In the event the Consent Judgment is not appealed, or is appealed but upheld, so le 8 legal and equitable right, title, and interest in auch money and interest earned on the money 9 irrevocably vests in the State of Oregon, and each Defendant waives, discharges, and releases lO any claim to or recow:se against the money.11 E. Upon receipt of payment from ODOi pursuant to this Section 3, DEQ shall12 dep osit the payment into a site-specific account within the Hazardous Substances Remedial13 Action Fund dedicated to use at DEQs sole discretion to fund investigation, removal, or14 remedial actions at the Facility. All moneys in the site-specific account, including interesi15 earned on the account, shall be used by DEQ as it deems appropriate for petfonning or paying16 f<lr investigation, r emoval, or remedial actions at the Facility, paying DEQ s oversight costs!7 incurred in connection with such actions, paying DEQs costs of administering the account, and18 reimbursing outstanding DEQ remedial action costs at the Facility. Any funds remaining in the19 account afterthese expenses may be used by DEQ al its sole discretion.20 4. Option to Purchase Linke Property21 A. Linke, in return for considerations set fonh in this Consent Judgment, hereby22 grants to DEQ the sole, exclusive, and irrevocable right and option (the "Option") to take title to23 the Linke Property described in Paragraph 2.B.(l), subject to the following terms and conditions.24 B. The term of the Option shall oommenen upon the entry of this Consent Judgment25 by the Court, and shall expire at 5:00p.m. on the first anniversary of the Courts entry of this26Page 10 • CONSENT JUDGMENT JUSnCE•II2844:>�o9 Dt:partmcnl of Juslice 151,, SW Flnh Ave. SuitJl4!0 Portland. 0� 97201 (971) 673-1880 /Fax: (971) 613·1886
  47. 47. ER 11 �h. 5278 12 • • Consent Judgment; provided, Linke is required to convey no greater interest in the Linke 2 Property than it possesses at the time DEQ exercises the Option. 3 C. DEQ may exercise the Option by written notice to Linke given at any time before 4 the expiration of the term of the Option and by payment to Linke of the sum of $50. 5 D. lfDEQ exercises the Option to take title to the Linke Property, Linke shall, within 6 30 days after the Option is exercised and if redemption of the Linke Property is allowable under 7 law at tl11tt time, pay Washington County the amount necessary to redeem !he Linke Property 8 from foreclosure. 9 E. Linke shall allow DEQ and its officers, agents, authorized representatives,l0 employees, and contractors to enter all portions of the Lioke Property under its ownership at allll re asonable times for the purpose of performing investigation or removal or remedial actions at12 the Facility, regardless of whether the Option is exercised.l3 F. Within 60 days after the redemption of the Link� Property under Subsection 4.D.,!4 Linke shall convey and quit claim to DEQ the Linke Property described in Paragraph 2.8.(1).J5 DEQ acknowledges and agrees that lile Linke Property will be conveyed by Linke and accepted16 by DEQ "AS IS," "WHERE IS" and "WITH ALL FAULTS AND DEFECTS," and that neither17 Linke nor its representatives have made or will be making any warranty or representation,18 express or implied, or arising by operation oflaw, regarding the Linke i"roperty, including19 without limitation any warranty of quality, condition, merchantability, and/or fitness for a20 particular purpose or title.21 a. DEQ acknowledges, and Linke agrees that, before any exercise of the Option,22 DEQ will be provided w ith the opportunity to inspect and make such investigations regarding ihe _23 Linke Property and perform such due diligence, inspection, and investigation of the Linke24 Property and its suitability for DEQs purposes, including review of documents and information,25 as DEQ deems appropriate.26Page 11 • CONSENT JUDGMENT JUST-lC£.#28445269 Departmellt ofJUitWc 151$ SW Fifth Avt,Suit• 410 f"911land1 OR 97201 (9"11) 673·18!0 I Fax: (97!) 673·1186
  48. 48. ER 12 2012 2 06 PM No. 5278 P. 13 • • H. Except as provided in Subsection 4.D., DEQ shall be solely responsible for any 2 and all fees, costs, taXeil, or any other expenses associated with the exercise of the Option and 3 Linkes transfer of the Linke Property to DEQ. 4 I. DEQ may transfer the Option to another entity of its sole choosing, within the 5 tenn of the Option and subject to all provisions ofihis Section 4. The transferee of the Option 6 may exercise the Option in accordance with and subject to all rights and obligations ofDEQ 7 under this Section 4. 8 5. Access and Cooperation 9 A. Any Defendant owning or controlling real property at the Facility sh�ll allowI0 DEQ and its officers, agents, authorized representatives, employees, and contrac!OlS to enter thel! property for the purpose of performing remedial activities pursuant to this Consent Judgment.12 B. DEQs remedial activities at a Defendants property may include but are not limited!3 to:!4 (!) Sampling and inspecting air, water, and/or soil at the property;IS (2) Constructing, operating, or maintaining groundwater monitoring wells,16 groundwater extraction wells, piping, utilities, soil liorings, test pits, and/or e xcavations at the!7 property;18 (3) Removing contaminated soils and groundwater from the property;!9 (4) Treating contaminated soils and groundwater;20 (5) Maintaining any monitoring well or extraction well located on the21 property in accordance with Oregon Administrative Rules Chapter 690, Division 240;22 (6) Temporarily storing equipment, vehicles, tools, and other materials at the23 property;24 (7) Temporarily storin g wastewaters and related materials and wastes;25 (!!) Restoring the surface condition of areas disturbed by remedi� activities26 and repairing any structures or improvements damaged by remedial activities; andPage 12- CONSENT JUDGMENT JUST!CE-#2844S269 i)epllnm�nt a(Justice 1m SW Fifth Ave, Silile410 Port1,.,d, OR 97201 (971) 673-1880/ p,., (971) 673·1$86

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