New Jersey Foundry Fined $8M for Safety, Environmental Violations

April 27, 2009

A New Jersey company that manufactures cast iron pipe was fined $8 million Friday for dozens of environmental violations and lying about numerous safety violations at its plant along the Delaware River.

Atlantic States Cast Iron Pipe Co. also will be placed under a federal monitor for a four-year probationary period.

Prosecutors had sought a maximum fine of $15 million for the company, which was convicted in 2006 of conspiring to violate environmental regulations and obstructing state and federal probes at its 153-year-old Phillipsburg plant.

“The overall sentence was fair,” Justice Dept. attorney Andrew Goldsmith said.

The sentencing closed a chapter in a saga that began in 2003 with a series of articles in The New York Times that described widespread environmental and worker safety violations at plants owned by Atlantic State’s parent company, Birmingham, Ala.-based McWane Inc.

The articles spurred a federal investigation, and after a trial spanning seven months in 2005 and 2006, Atlantic States and four of its employees were convicted on 32 of 34 counts. Four other McWane plants have pleaded guilty or were convicted of environmental violations.

The four former Atlantic States managers were sentenced earlier this week to between six and 70 months in prison. One defendant, Daniel Yadzinski of Easton, Pa., was acquitted of conspiracy and the two other counts he faced.

The company was found to have ignored dangerous conditions at the Phillipsburg plant that led to several serious injuries, including one employee who sustained a fractured skull and lost an eye when a saw blade broke apart, and another who had to have three fingers amputated after a safety device on a cement mixer was bypassed.

Atlantic States employees lied to investigators about those incidents, and also tried to cover up the circumstances of a forklift accident that killed employee Alfred Coxe in March 2000, the government charged.

The company also threatened employees with retaliation if they told the truth about the unsafe conditions.

“This was the McWane way,” Goldsmith said in court Friday. “If there was a way to send this company to jail for life, we would propose that.”

U.S. District Judge Mary L. Cooper appeared to give weight to McWane’s efforts to reform, which included spending more than $300 million in the past several years on environmental and safety improvements at its approximately two dozen manufacturing facilities.

Atlantic States and McWane “have given generations of Americans good-paying jobs. They were founded on good principles,” Cooper said. But McWane lost sight of those principles, she added, “well aware of the terrible consequences that stemmed from failure, refusal or neglect of the imperatives for environment and health and safety in the workplace.”

“We’re pleased that the judge took time to recognize the good, hard work done by Atlantic States,” said Ruffner Page, McWane’s president.

Page said the most of the company’s plants are operating below capacity due to decreased demand; the Phillipsburg plant, which has about 240 employees, has been operating about eight to 12 days per month for the past several months.

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