APPORTIONMENT OF REMEDIATION COSTS USING FORENSIC METHODS

Many of Metropolitan’s clients ask our remediation experts to evaluate the appropriateness and cost of remediation decisions, estimate future liabilities, and apportion costs among potentially responsible parties.  

 Our experts rely on forensic methods developed in-house and/or widely used in practice, hands-on practical experience and knowledge of rigorous financial and engineering models to conduct such cost evaluations and cost apportionment.   

Metropolitan scientists have been supporting clients in developing technically sound apportionment strategies and obtaining appropriate evidence for more than 30 years. This work has resulted in successful, quantitative apportionment of chemical inputs to CERCLA, RCRA and state sites as determined by the courts.

The common questions posed to us by the clients include:

·         What is the source of the contamination?

·         What are the characteristics of each source?

·         Who is responsible for each source?

·         What is my cost?

Metropolitan staff has been involved in numerous cases where liability and cost allocation are evaluated using strict review of the National Contingency Plan (NCP).  These cases arise from environmental cleanup and restoration project disputes under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), and also include natural resource damage (NRD) claims for restoration n costs. 

Projects have included commingled groundwater contaminant plumes, large river and urban bay projects with multiple contributing parties, waste landfills, mines, and other contaminated sites. This work has involved investigation of potentially responsible parties, historical site reconstruction, financial analyses, database development, and environmental forensics.

In one recent case involving overlapping various petroleum product plumes (crude oil, naphtha, gasoline), we apportioned the remediation costs by identifying the constituents in the subsurface and the free product, identifying most likely sources, and apportioning responsibility based on the relative amounts of the contaminants at the site.   

To that effect, we divided the site in contamination zones, reviewed existing TPH data, performed additional TPH analyses in each zone, and averaged crude oil, gasoline and naphtha percentages for each zone.  The cost apportionment was accepted by all the parties involved and settled the dispute.

Evaluation of Remedial Alternatives, REVIEW OF PAST EXPENSES AND ESTImation of Future Liabilities AND COSTS

People in control of the remediation process are often focused on a particular presumed remedy or on an overly conservative remedy.  Often in such cases, the cleanup costs could have been significantly less, yet sufficiently protective, if scientifically sound, risk-based methods had been used. 

 Metropolitan toxicologists and ecologists perform site-specific analyses to support the establishment of realistic cleanup goals, and to provide more appropriate comparisons of short-term and long-term human health and ecological risks for different remedial scenarios.  

Metropolitan has found that our thorough and objective evaluation of project risks and potential fatal flaws in site characterization and remedy selection provides a sound technical basis for advising our clients about cost-effective remedial solutions.  We have worked with our clients and the regulatory community to develop least-cost, effective alternatives that have been used to drive business decisions pertaining to Sarbanes-Oxley and bankruptcy requirements, while consistently receiving the approval of regulators.  

  

We have assisted our clients with oversight of the development and evaluation of alternative remedial solutions, costs, and implementation scenarios that meet the capital demands of cash-limited businesses.  Metropolitan has no vested interest in the selected remedy, and thus, our scientists and engineers are technically unbiased and include thorough evaluation of site-specific constraints and potential impacts to onsite operations and nearby human and ecological receptors.  In predicting future liabilities, we use a variety of techniques, from probability-weighted decision-tree analyses to Monte Carlo stochastic models. 

In a recent case, Metropolitan was retained by an industrial client to review the environmental costs claimed by the purchaser of its former facilities as damages under an environmental indemnification agreement established at the time of the sale.   

As part of its analysis in this case Metropolitan reviewed technical documents, as well as, available financial information and costs.  Metropolitan was able to identify claimed expenses which were not reimbursable under the agreement, these costs included; routine business expenses, compliance costs and costs which pre-dated the agreement.  Metropolitan constructed a detailed spreadsheet which applied various liability allocations, recoveries from third-parties (including insurance recoveries) and calculated pre-judgment interest.

Metropolitan worked on this project for several years, first in the settlement context and ultimately testifying at a binding arbitration.  Metropolitan’s work on this project ultimately resulted in significant savings to the client.

SAMPLE PROJECTS

MTBE Cost Allocation Cases

Metropolitan was retained in a number of non-litigation and legal cases to allocate responsibility for petroleum releases at service stations leading to alleged contamination of residential wells.  Metropolitan provided alternative remedial cost estimates, performed stable isotope and other forensic analyses to determine the petroleum sources.

CERCLA Cost Recovery Case

Metropolitan was retained to provide expert opinions in a CERCLA cost recovery case involving soil and ground -water contamination at a former coal tar refining facility. Metropolitan provided opinions regarding the sources, extent and probable remedial costs for various contaminants, including both coal tar constituents and chlorinated solvents, and apportionment of responsibility for remedial costs between the current and former owners/operators of the site. 

Metropolitan was able to demonstrate that our Client’s contribution to the documented soil contamination was substantially less than claimed by the plaintiff. In addition an evaluation of probable future cleanup costs indicated our Client’s share of the total projected cost was substantially less than claimed.  The Court found favorably for our client.

Objective Review of Environmental Claims

Metropolitan was retained by an insurer client and an insured industrial client, to assist them settling a claim for environmental liabilities.  Our two clients requested that we provide a fair and balanced estimate of past and future environmental costs at several industrial plants. Metropolitan performed site visits, reviewed records at company headquarters and at state regulatory offices, and developed site-specific environmental estimates to complete site clean-up to risk based standards.

Within four months of being retained, Metropolitan was successful in assisting the two clients in reaching an amicable settlement regarding the amount of environmental costs.  By using Metropolitan as an objective technical resource, both parties saved significant in litigation costs and duplicative consulting costs, and a settlement was reached much sooner because both parties were starting from the same environmental cost estimate.

Cost Allocation for PAH Contamination

Metropolitan was retained by an insurer to review and critique the allocation method proposed by consultants for the site owner.  Metropolitan also provided our own allocation method, based on synthesizing site-specific historical information regarding equipment, housekeeping, tar production, and changes in feedstock, as well as analyzing present-day contamination patterns.  The claim was amicably settled by both parties using the allocation method proposed by Metropolitan.

Remedial Options for Sediment Contaminated with PCBs

Metropolitan was retained by an industrial client to review and evaluate potential feasibility study remedial options for sediment PCB cleanup, their cost, and risk of implementation.  The work included detailed evaluation of costs beyond the standard feasibility study analysis of –30 to +50 percent.

Metropolitan’s Pledge

Our goal is to help you resolve the claim at the lowest possible transaction cost.  Since transaction costs are, on average, fifty to seventy five percent of the claim, Metropolitan believes that the emphasis should be placed in reducing the transaction costs by collecting high quality data early on to ensure unnecessary challenges by the insured and/or other insurance carrier, should the claim is subrogated. 

We know that you want the facts; that you want them fast; that you want uncompromised quality of the deliverable; and at a rock bottom price.  Metropolitan’s forensic professionals are second to none and are dedicated to fast, efficient and effective response and creating a product of uncompromising quality and value. 

Metropolitan is ready to assist you with a number of forensic engineering or age-dating determinations or evaluations to insure that the proper coverage trigger or period has been determined.  We also have the scientific expertise to determine whether the releases were historic in nature, whether they were sudden or accidental, as well as to be able to differentiate plume contributions from various sources.

We are ready to assist you with E&O claims and/or construction defect claims.  Metropolitan will also use proven forensic techniques in the determination of the cause, origin, and extent of foundation/soil movement, grating/drainage, structural failures, water intrusions, construction defects and other failures.  Our job is to find out what happened and why, from the cause and origin through the extent of loss.  Metropolitan will be able to point the way toward a speedy disposition of the claim.

Metropolitan Engineering, Consulting & Forensics (MECF)

 

Providing Competent, Expert and Objective Investigative Engineering and Consulting Services

P.O. Box 520

Tenafly, NJ 07670-0520

Tel.: (973) 897-8162

Fax: (973) 810-0440

E-mail: metroforensics@gmail.com

Web pages:  https://sites.google.com/site/metropolitanforensics/

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