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AVX fights to keep its files secret

The Sun News

A federal judge is expected to rule soon on whether AVX Corp. must release more than 1,500 documents that a lawyer says will show the manufacturer was operating what amounted to a "landfill and hazardous waste treatment center" just blocks from the oceanfront after it polluted groundwater at its Myrtle Beach plant with a toxic degreaser called trichloroethylene.

AVX - which last year moved its headquarters from Myrtle Beach to Greenville - does not want to release the documents, which detail the company's efforts to clean up the pollution in the 14 years before it reported the problem to state regulators in 1995.

Kevin Dunlap, a lawyer for the company, could not be reached for comment.

He has said in court filings that the documents are protected because they include discussions about potential legal and insurance issues related to the pollution.

Meanwhile, a trial over whether AVX must compensate adjacent property owner Horry Land Co. over the pollution is scheduled to begin Feb. 22 in Florence, according to court filings last week.

The pollution, which can take decades to clean up, has spread to groundwater on Horry Land's property and through a roughly 10-block neighborhood in Myrtle Beach, according to the S.C. Department of Health and Environmental Control.

The state agency says the pollution does not pose a health hazard, but property owners say it has ruined land values in the area.

Newly obtained documents show AVX continued to violate the state's Pollution Control Act as late as last year, when it discharged more than 30 times the allowable levels of trichloroethylene, or TCE, into a stormwater drainage pond on its property.

AVX also discharged 15 times the allowable amount of a carcinogen called vinyl chloride, according to documents obtained by The Sun News.

Those violations occurred in March 2009, the same month that AVX executives met with residents to allay their concerns about pollution at the company's facility along 17th Avenue South.

DHEC spokesman Thom Berry said the agency did not fine AVX for the violation because the manufacturer did not exceed the allowed discharges in subsequent months.

"Had they reported a second exceedance within the next six-month period, DHEC would have issued an order in the case," Berry said.

The 1,500 documents at question in the court case could bolster a strict liability claim filed against AVX by Horry Land, which owns property across from the manufacturer's headquarters on 17th Avenue South.

Horry Land says it can no longer develop the vacant property and it wants AVX to pay at least $5 million in compensation.

A strict liability finding would mean Horry Land does not have to prove any negligence on AVX's part to win its case. Such liability usually is reserved for those who engage in activities that are known to be dangerous to others.

AVX claims in court documents that its use and disposal of TCE was standard practice for manufacturers in the 1970s - years before the degreaser was shown to cause health problems, such as cancer -and, therefore, does not constitute strict liability.

However, Horry Land lawyer Saunders Bridges said AVX's secret attempts to clean the pollution after a massive spill was detected could raise the manufacturer's level of culpability.

"I think we're going to find out that they were operating an unlicensed, unsupervised treatment plant on their property," Bridges said during a court hearing earlier this year.

"It's not just a matter of the contamination itself, but it's the matter of what did they do on their plant right across the street from us for that 14-year period?" Bridges said.

AVX says it should not have to pay anything to Horry Land because the property owner cannot prove the contamination has caused any financial damage.

Dunlap said during a court hearing that Horry Land has never tried to sell or develop the vacant land and that real estate sales at nearby locations show there has been no loss in property values because of the pollution.

"There is objective real estate data out there that shows and flatly refutes any contention that this property has been damaged," Dunlap said. "Properties with TCE groundwater impact and properties near properties with TCE groundwater impact are selling at or above fair market value."

Bridges, however, said Horry Land's financial loss stems from the fact that it now cannot market the property until the pollution is cleaned. He said the amount of time it will take to clean the pollution - and the resulting loss in potential rental income - will exceed the value of the property.

"It's like an automobile that's been totaled," Bridges said. "The car repairs are going to exceed the value of the car, so it's a total loss of the car. And I think the same analysis could apply here."

There is disagreement over how long it will take to clean up the pollution. An AVX expert has said it will take five years to reduce TCE levels to those considered safe by federal regulators. Horry Land's expert has said there is no way to tell how long it will take to remove the pollution.

AVX's environmental consultant, in its most recent update submitted to DHEC in July, said it still is studying whether molasses injections into the groundwater will be the best way to clean the pollution. The molasses creates bacteria that break down the TCE into a harmless substance.

The consultant still is working on a feasibility plan that must be approved by DHEC before a full-scale cleanup can begin. AVX has been paying for all testing and cleanup within the contaminated area.

AVX has not said how much it has spent on cleanup to date.

The company's most recent quarterly filing with the Securities and Exchange Commission states that AVX has set aside about $20 million for litigation and remediation costs related to the Horry Land lawsuit and two related cases - a class-action lawsuit filed on behalf of residents living near AVX and another lawsuit filed by a developer who claims the pollution ruined plans for a condominium project.

The two related lawsuits are pending in state court.

In a separate part of the federal lawsuit, AVX is attempting to show that Horry Land and the U.S. military are responsible for some of the pollution and they should help pay for its cleanup. The military was added to the lawsuit last year because AVX claims some of the TCE migrated from the former Myrtle Beach Air Force Base, which is adjacent to the manufacturer's site.

DHEC discovered in 2006 that the pollution had spread through groundwater to surrounding properties.

The groundwater is not used as a drinking water source, and DHEC says the pollution does not pose a health problem. However, the federal government requires the groundwater to be cleaned to drinking water standards, which allows TCE at concentrations of no more than five parts per billion. TCE levels as high as 18,200 parts per billion have been recorded in groundwater near the AVX site.

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