EPA v. MDC INDUSTRIES INC. (FRANKLIN SMELTING/FRANKLIN SLAG)

Case summary

On August 14, 2018, the Director of the Hazardous Site Cleanup Division concurred on the proposed draft Settlement and Policy Buyback Agreement between Great American E&S Insurance Company, formerly known as Agricultural Excess and Surplus Lines Insurance Company (Great American) and MDC Industries, Inc., concerning the Franklin Smelting Site and the Franklin Slag Pile Superfund Site, both located in Philadelphia, Pennsylvania. The Agreement requires Great American to pay $975,913.89. The settlement amount is to be distributed to the United States (85%) and the Commonwealth of Pennsylvania (15%) pursuant to an assignment of rights to liability insurance proceeds under a 2011 Ability-to-Pay Consent Decree between the governments and MDC (and related entities). The Agreement further provides that the total amount to be paid to the United States shall be deposited in the Slag Site special account to conduct or finance response actions at or in connection with the Slag Site. Although the governments will not be signing the Agreement, the Director of HSCD has concurred with the terms of the proposed Agreement, and the Agreement will now be sent to MDC and Great American for signature. Because of the inter-connected operations and disposal histories of the two Sites, the U.S. contends that MDC, the principal operator at the Slag Site, is also liable under Section 107 of CERCLA as an operator of the Smelting Site. Therefore, Great American, as an MDC insurer, should also provide coverage for response costs incurred at the Smelting Site. The United States? past and estimated future costs for the Sites exceed the amount of the confessed judgment in the 2011 Decree of $30,148,432.25. The policy on which the United States? claim was based was issued to MDC by Great American for the policy period November 2, 1984 to November 2, 1985. This Agreement provides that Great American shall pay the settlement amount of $975,913.89 within 15 days of execution of the Agreement by the Parties, in exchange for a full policy buyback. As part of the buyback, MDC agrees to release Great American from, and covenants not to sue Great American for, all Claims under all Policies, known and unknown.

Defendants (17)

• MDC INDUSTRIES, INC. (F/K/A METALS REFINING CO(SB)Named in complaintNamed in settlement
• FRANKLIN SMELTING AND REFINING CORP (SB)Named in complaintNamed in settlement
• FRANCOS REALTY (SB)Named in complaintNamed in settlement
• SCHWAB FAMILY PARTNERSHIPNamed in complaintNamed in settlement
• SALTZBURG, DAVID ESTATE OFNamed in complaintNamed in settlement
• SALTZBURG, BETTYNamed in complaintNamed in settlement
• SATZBURG, MICHAELNamed in complaintNamed in settlement
• SALTZBURG, SUSANNamed in complaintNamed in settlement
• SCHWAB, ALBERTNamed in complaintNamed in settlement
• SCHWAB, ROGERNamed in complaintNamed in settlement
• SCHWAB, ANNE BROWNNamed in complaintNamed in settlement
• UNITED STATES METALS REFINING COMPANY
• SHELLY MATERIALS, INC.
• ATLANTIC CITY ELECTRIC COMPANY
• OHIO POWER COMPANYNamed in complaint
• SALTZBURG, BETTY, EXECUTRIC FOR ESTATE OF DAVID SANamed in complaintNamed in settlement
• GREATER AMERICAN & INSURANCE COMPANYNamed in complaintNamed in settlement

Facilities (5)

• FRANKLIN SMELTING

  3100 CASTOR, PHILADELPHIA, PA, 19134

  Registry ID: 110071100028

• FRANKLIN SMELTING & REF CORP

  3100 CASTOR AVENUE, PHILADELPHIA, PA, 191343850

  Registry ID: 110009322214

• FRANKLIN SLAG PILE (MDC)

  3701 CARBON ST (NW CORNER OF CASTER & DELAWARE AVE, PHILADELPHIA, PA, 19134

  Registry ID: 110009322214

• FRANKLIN SLAG PILE (MDC)

  3701 CARBON ST (NW CORNER OF CASTER & DELAWARE AVE, PHILADELPHIA, PA, 19134

  Registry ID: 110009322214

• FRANKLIN SMELTING & REF CORP

  3100 CASTOR AVENUE, PHILADELPHIA, PA, 191343850

  Registry ID: 110009322214

Statutes cited

• CERCLA 107A — Cost Recovery

Enforcement conclusions (3)

• MDC IND. (FRANKLIN SMELTING/FRANKLIN SLAG) - 5 DEFENDANTsentered 2011-12-01

  Primary law: CERCLA

• GREATER AMERICAN & INSURANCE COMPANY (FRANKLIN SMELTING/FRANKLIN SLAG)entered 2018-09-05

  Primary law: CERCLA

• MDC INDUSTRIES INC. (FRANKLIN SMELTING/FRANKLIN SLAG)(NATIONWIDE AND MDC INDUSTRIES, INC.entered 2015-06-02

  Primary law: CERCLA

Timeline (6 milestones)

• 2006-03-31Referred To Dept Of Justice
• 2006-04-12Enforcement Action Data Entered
• 2008-12-17Supplemental Referral-Adding parties, counts
• 2011-08-30Complaint Filed With Court
• 2018-09-05Final Order Entered
• 2018-09-05Final Order Lodged