Consultant Not Liable to Residents of Housing Complex For Not Identifying Vapor Risks

A California state court dismissed a negligence claim brought against an environmental consultant by residents of the infamous Ujima Village low income housing complex for failing to identify health risks associated with a former oil storage facility.

The 300-unit Ujima Village complex had been constructed on a portion of the former 122-acre Athens Tank Farm (ATF)  that had been located in Willowbrook, an unincorporated area within the County of Los Angeles. The ATF was operated by Exxon Mobil and its predecessors from 1924 to 1962. The ATF  contained 22 80,000 barrel aboveground storage tanks along with two crude oil reservoirs/ sumps with a combined capacity of 1.8 million barrels.  After operations ceased  at ATF , Exxon decommissioned the facility. Exxon sold 16 acres of the ATF site to a developer who completed constructed of the Ujima Village Apartments in 1972 with a mortgage provided by federal Department of Housing and Urban Development (HUD). The County Board of Supervisors allegedly acquired title to the balance of the former ATF site in 1987 which was developed into the Ervin Magic Johnson Regional Park (EMJRP).

The Ujima Village complex was not adequately maintained, though, and after the owners defaulted on their loan in 1990, HUD  commenced foreclosure proceedings. Before the foreclosure became final, HUD developed a plan to rehabilitate the property and sell it to a private entity. However, the purchaser withdrew from the sale negotiations after its phase 1 environmental consultant reported that methane gas and hydrocarbons in the subsurface presented “high potential for significant environmental impairment.”

HUD’s property manager retained a consultant in 1992 to perform a phase 2 that concluded that benzene, xylene, toluene and ethylbenzene (BTEX) were present at levels that posed a risk to human health and explosion. The report allegedly recommended further investigation to delineate the extent of the contamination. The plaintiffs allege that the property manager concealed the results of the investigation. The plaintiffs also allege that HUD initially rejected the recommendations and that there were ongoing exposure issues. Instead, the complaint stated, “HUD’s engineers preferred to refer the issue to the HUD Office of Counsel to determine legal responsibility or further action by HUD because the environmental reports had ‘opened Pandora’s Box’ regarding notification to regulatory agencies.

In 1992, the plaintiffs assert that the state Department of Toxic Substances Control (DTSC) advised HUD that a Preliminary Endangerment Assessment (PEA) was required because some of the contaminants exceeded ingestion screening levels.  HUD reportedly advised the DTSC that HUD was trying to sell the property to the County and that the County was reluctant to take over a contaminated site. The plaintiffs allege that HUD never shared the DTSC communications with them.

In 1993, HUD retained Earth Technology, Inc (Earth Tech), a predecessor of defendant Aecom, to perform an assessment of potential health hazards. . The firm conducted three rounds of sampling and testing of soil, soil gas, and indoor air samples. The plaintiffs allege that the Earth Tech detected elevated levels of lead and mercury in the soils and elevated BTEX beneath the buildings but that HUD edited the report so that it concluded that were “no significant threat to the health or safety of residents.

The Community Development Commission of the County of Los Angeles (CDC) hired a consultant to review Earth Technology’s study in December of 1993. The CDC consultant issued a report that was highly critical of Earth Tech Report. The criticisms included that Earth Tech failed to address high levels of petroleum hydrocarbons in the top layers of soil, did not adequately consider that there was a significant risk of explosion, failed to adequately data showing a significant risk of exposure to benzene and that a Preliminary Endangerment Assessment (PEA) should have been performed in accordance with CAL EPA guidelines

In early 1994, HUD issued a memo titled “Ujima Village Apartments: Assessment of Toxic Hazards Compliance with HUD Toxic Policy/Notice 79-33” that expressed HUD’s opinion that contamination at Ujima Village Apartments presented an insignificant risk of exposure to the general public. Later that year, Earth Tech prepared a report that advised HUD that it could be liable to residents or neighbors of Ujima Village Apartments and recommended HUD avoid deep excavation or drilling at the complex or use care when conducting such activities.

According to the complaint, the County initially insisted on additional sampling to determine the full risk to the residents in its negotiations to acquire the complex. However, the complaint alleged, the County dropped the demand when HUD offered to indemnify the County. In 1995, HUD sold the residential complex to the County for $1. The Housing Authority of the County of Los Angeles (Housing Authority) owned and operated Ujima from 1995 until its closure in 2009.

In 2000, the CDC allegedly retained SCS Engineers to perform collect soil gas samples. SCS found elevated concentrations of hydrocarbon vapors in soils. Later that year, the County reportedly retained ATC to conduct a phase 1 at the EMJRP. ATC concluded subsurface soils at the park may have been impacted by previous petroleum refining operations.

Faced with millions of dollars in repair and maintenance costs, the Housing Authority and the CDC sought to find a developer to acquire, rehabilitate and manage the complex.  In 2003, the Housing Authority issued an RFP that sought qualified developers to acquire, rehabilitate, own and manage the Ujima Village complex. The prior environmental reports were disclosed in the RFP.

Two prospective developers were identified but they apparently declined to proceed with the purchase after learning the results of a 2005 investigation performed by Rincon Consultants (Rincon) for the CDC.  Rincon advised the CDC that elevated concentrations of hydrocarbon vapors and the presence of contaminants in groundwater consistent with a gasoline release. Rincon concluded that residents were at “significant risk of exposure and cancer.”

Meanwhile, TRC was retained by a potential developer to perform an environmental investigation phase 1. TRC concluded there was a release of petroleum hydrocarbons associated with the ATF. TRC also reported elevated concentrations of methane and volatile organic compounds in subsurface soil vapor.  TRC also said that in some portions of the property, methane and/or VOCs in the soil gas exceeded the lower explosive limit (LEL).  TRC recommended additional investigation to define the vertical and lateral extent of soil contamination.

In October of 2006, the Housing Authority/CDC retained Rincon to further evaluate environmental conditions at the complex. Rincon concluded that there was a possibility of a chronic health risk concern that warranted additional study and that remediation was warranted  as a preventative measure to reduce possible exposure of VOC to residents as well as to mitigate existing groundwater contamination. The Housing Authority shared the results with HUD and the agencies met with the California Regional Water Quality Control Board (the Water Board). .

The housing authority then met with HUD officials and plaintiffs assert that HUD responded with a letter that stated, in part, that “unhealthy levels of petroleum vapors existed at the project”, “a real health hazard could possibly exist for long-term residents” and that the Housing Authority was concerned about it’s potential liability because it did not have insurance for health related problems.

In May 2007, the Water Board agreed to assume responsibility for the investigation but advised the CDC that it would be responsible for the Water Board’s costs. The Housing Authority then sent a letter advising all Ujima residents that it was considering the possibility of closing the complex due to the age and obsolescence of  the property, the substantial economic cost of rehabilitation, and the significant disruption to the daily lives of residents to remediate environmental concerns. The letter went on to state while displaced residents might be eligible to receive federal relocation assistance payments, residents would forfeit their right relocation assistance if they moved or were evicted before receiving formal notice of eligibility. The letter did not provide any further information about the environmental conditions of the complex

The plaintiffs allege that none of the foregoing reports were provided to the tenants, that communications with Exxon and various consultants between 2007 and 2008 were not disclosed. The plaintiffs also assert that when  community meetings held during 2008 to discuss the environmental conditions at the complex, residents were told that the environmental conditions did not pose adverse health and safety risks to the occupants. Plaintiffs further assert that it was not until a group of former Ujima residents met with an attorney in October 2008 that contamination may pose a serious risk to human health and safety.  and that when public meetings were held, the parties represented that the risks from the contamination were insignificant.

In 2009, the housing authority declared Ujima Village blighted and approved a plan to relocate residents. In 2010, hundreds of former residents filed a toxic tort lawsuit against Exxon, alleging that exposure to chemicals associated with the former storage facility had caused 38 premature deaths, cancer, leukemia, miscarriages, respiratory distress and other health problems. The plaintiffs also sought damages from Aecom as successor to Earth Tech for negligently failing to discover the risks in its 1993 report. A second lawsuit was filed by a group of plaintiffs who had lived at the Ujima complex but had subsequently moved. These cases were consolidated in 2011 and an amended complaint filed.

In Doris Alexander v Exxon Mobil, No. BC 435640, Super. Ct-Los Angeles cty 6/6/12), the court ruled that the plaintiffs did not have any contractual relationship with Aecom and were not the intended beneficiaries of the 1993 environmental. Therefore, Aecom did not have duty that could have been breached. Moreover, to allow the claim against Aecom to proceed, the court said, would expose the firm to millions of dollars in potential liability for a report it was paid approximately $35K.

If allegations in this case are true, the conduct of HUD, the CDC and the housing authority in not timely advising residents that they were being exposed to elevated levels of contaminants and carcinogens is nothing less than disgraceful. This case demonstrates the need to develop clear reporting standards for vapor intrusion sampling results. New York has a strong vapor disclosure law and could serve as a model for other states.


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