Rhode Island Judge Considers Fate of $12M ‘Blue Soil’ Deal

February 10, 2009

A federal judge said Friday he will soon decide the fate of a disputed multimillion dollar plan to clean up a Tiverton neighborhood contaminated with blue soil laced with arsenic and other toxins.

Lawyers for about 150 residents asked U.S. District Court Judge William Smith to force Houston-based Southern Union to pay $3 million to clean up arsenic, cyanide, lead and other toxins. The pollution was discovered in 2002 when a work crew was digging to install a sewer line.

Attorneys for the neighbors said they reached an agreement in April with Southern Union requiring the company to pay up to $3 million to remove contaminated soil from the neighborhood in North Tiverton. The company would also have to pay $9 million in compensation to the neighbors.

Daniel Bishop, an attorney for Southern Union, told the judge there was never a settlement, only a plan for resolving a complicated case. One of the company’s conditions — that the town of Tiverton drop its legal claims against Southern Union — was never met, the company said.

Smith wrestled during the hearing with differing descriptions of the disputed deal. Southern Union said the company made it clear in negotiations that getting Tiverton to drop its legal case was a key part of an eventual agreement. But lawyers for the neighbors said that condition was never spelled out in a chambers conference with Judge Ernest Torres, who first handled the case.

Torres has recused himself from the lawsuit because he had private discussions to help reach a settlement.

“Why should I give more weight to the in-chambers recitation rather than what the parties actually discussed?” Smith said.

An investigation by the state Department of Environmental Management found the pollution was a byproduct created when the Fall River Gas Co. — now owned by Southern Union — converted coal into gas decades ago. The contamination has left residents unable to dig in their yards, sell their houses or get home loans.

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