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Court Says Titan Is Liable for More than $10 Million; Titan Will Appeal

Posted on September 11, 2017

The U.S. District Court for the Southern District of Iowa recently ruled against two Titan International Inc. subsidiaries for the improper disposal of hazardous substances. Titan CEO and President Paul Reitz says the company will appeal the findings.

"We respectfully disagree with the court's ruling and will appeal," says Reitz. "Titan Tire and Dico did not intend to arrange for the disposal of hazardous substances when they engaged in arms-length transactions with a third-party on identical terms to other transactions the government admits were not improper. We further object to any suggestion that Titan Tire or Dico exposed the public to any environmental risk, as the government's own documents state that the actions in question 'did not likely result in a significant health threat.'

"We believe the court applied a more stringent standard to Titan Tire and Dico than has been applied to other companies in similar cases, and look forward to having the matter reviewed in the appellate court."

Here is a timeline of the events leading up to the ruling.

October 2010: The United States of America, on behalf of the Environmental Protection Agency (EPA), filed a complaint against Dico Inc. and Titan Tire Corp. in the U.S. District Court for the Southern District of Iowa, wherein the EPA sought civil penalties, punitive damages and response costs against Dico and Titan Tire pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA).

June 2015: Titan Tire and Dico, Inc. appealed the U.S. District Court's order granting the EPA's motion for summary judgment that found Dico and Titan Tire liable for civil penalties and response costs for violating CERCLA and Dico liable for civil penalties and punitive damages for violating an EPA Administrative Order.

December 2015: The United States Court of Appeals for the Eighth Circuit reversed the District Court's summary judgment order with respect to "arranger" liability for Titan Tire and Dico under CERCLA and the imposition of punitive damages against Dico for violating the EPA Administrative Order, but affirmed the summary judgment order imposing civil penalties in the amount of $1.62 million against Dico for violating the EPA Administrative Order. The case was remanded to the District Court for a new trial on the remaining issues. 

April 2017: The trial was held.

Sept. 5, 2017: The District Court issued an order (a) concluding Titan Tire and Dico arranged for the disposal of a hazardous substance in violation of 42 U.S.C. § 9607(a); (b) holding Titan Tire and Dico jointly and severally liable for $5.45 million in response costs previously incurred and reported by the United States relating to the alleged violation, including enforcement costs and attorney's fees; and (c) awarding a declaratory judgment holding Titan Tire and Dico jointly and severally liable for all additional response costs previously incurred but not yet reported or to be incurred in the future, including enforcement costs and attorney's fees.

The District Court also held Dico liable for $5.45 million in punitive damages under 42 U.S.C. § 9607(c)(3) for violating a unilateral administrative order. The punitive damages award does not apply to Titan Tire.

Titan Tire and Dico intend to appeal the case to the United States Court of Appeals for the Eighth Circuit. Titan Tire and Dico intend to argue, among other things, that the District Court's ruling misapplies governing law regarding arranger liability and holds them to a more stringent standard than has been applied in other cases. Titan Tire and Dico continue to assert they did not intend to arrange for the disposal of a hazardous substance in connection with the transactions at issue, but rather entered arms-length agreements with an unrelated third party for the sale of valuable, moveable steel buildings, exactly as they had done on an earlier occasion in which no arranger liability was alleged.

According to Titan, the government's own expert witness admitted that moveable steel buildings are valuable commercial products, and Titan Tire's and Dico's internal communications consistently referred to the transactions as "sales" and not disposals of waste. Moreover, the government's position at trial on the costs Titan Tire and Dico allegedly avoided from the transactions in question was inconsistent with cost-related guidance the government provided to them shortly before the transactions occurred.

Related Topics: Dico, lawsuit, Paul Reitz, Titan Tire

Comments ( 2 )
  • John Lipton

     | about 4 months ago

    The woes you talk about are just beginning, The EPA made an assessment of about $10-13 million to clean up the Dico contaminated site in Des Moines Iowa. The cost of cleanup, plus the fine plus new appeal lawyers and consultants will be close to a $25 million hit to the bottom line. This is not factoring in, the EPA interest demands on the $11 million fine. A few weeks ago, Titan Reclaim facility in Alberta Canada caught on fire and a second insurance claim was filed. This project is the brain child of Titan International Chairman to "acquire" an "invention" by his brother who was paid $30 million. This "venture" was officially forecasted in Titan financial disclosures and public discussions to gross $250 million annually effective August 2016 . Anyone that reads the financials can see that over a year later, not a penny was made from the sale of the carbon black and the only figures visible are the cost of the "invention" and desperate rush to show positive gain at any price to justify the $30 million given to the millionaire Chairman brother. Does anyone in Canada or America wonder if government regulators are looking into this? I wonder myself

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