FEDERAL COURT DISMISSES FOUR BILLION DOLLAR CLAIM
AGAINST THE UNITED STATES

WASHINGTON, D.C.- After three years of litigation, the State of New Mexico dismissed claims against the United States seeking compensation for natural resource damages at the federal South Valley Superfund site near Albuquerque. Initially valuing the claim at more than four billion dollars, private attorneys hired by the state filed suit even though the U.S. and others were cleaning up the groundwater under a plan approved by federal and state authorities. The court's order ending the case against the United States provides no payment to the state or its private attorneys.

Industrial operations at the South Valley Site began in the 1950s and contaminated the soil and groundwater with organic solvents, petroleum hydrocarbons and other pollutants. In 1988, the U.S. Environmental Protection Agency determined that the groundwater should be treated to meet federal and state drinking water standards. The New Mexico Environment Department concurred in that decision. In 1996, with significant financial assistance from the United States, General Electric began a cleanup of the site, including the groundwater. To date, they have spent roughly thirty million dollars to that end and the cleanup is on schedule.

In 1999, private attorneys hired by the State of New Mexico filed suit seeking to recover additional sums, claiming that the treatment of the groundwater to drinking water standards was not sufficient and that it was due an additional four billion dollars in damages. The state's attorneys hired a dozen experts and sought extensive information from the U.S. and others in an effort to prove the state's claim. The United States countered, arguing that the ongoing cleanup would make the water safe for drinking so that further damage payments were unwarranted. Had the case gone to trial, the United States had compelling evidence that the cleanup operations would fully restore the groundwater to drinking water standards.

After a recent week-long hearing, the state filed a motion to dismiss its claims against the United States. On November 20, 2002, the court issued an order dismissing those claims and ending the case against the United States "with prejudice," precluding the state from refiling suit against the U.S. at a later date. The cleanup by the General Electric Company and the United States will continue under federal and state supervision until the groundwater has been fully treated.

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02-694