Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 1 of 15 PageID #: 1
`
`JEAN E. WILLIAMS
`Acting Assistant Attorney General
`Environment & Natural Resources Division
`United States Department of Justice
`PATRICIA L. HURST (DC Bar #438882)
`KARL J. FINGERHOOD (PA Bar #63260)
`Senior Counsels
`Environmental Enforcement Section
`Environment & Natural Resources Division
`United States Department of Justice
`150 M Street, NE, Room 5.1123
`Washington, DC 20002
`(202) 307-1242
`Patricia.Hurst@usdoj.gov
`Karl.Fingerhood@usdoj.gov
`
`JUDITH A. PHILIPS
`Acting United States Attorney
`RACHEL S. MORIYAMA (#3802)
`Assistant United States Attorney
`District of Hawaii
`Room 6-100, PJKK Federal Building
`300 Ala Moana Boulevard
`Honolulu, Hawaii 96850
`(808) 286-2890
`Rachel.Moriyama@usdoj.gov
`
`Attorneys for Plaintiff United States of America
`
`
`
`
`
`JEAN E. WILLIAMS
`Acting Assistant Attorney General
`Environment & Natural Resources Division
`United States Department of Justice
`PATRICIA L. HURST (DC Bar #438882)
`KARL J. FINGERHOOD (PA Bar #63260)
`Senior Counsels
`Environmental Enforcement Section
`Environment & Natural Resources Division
`United States Department of Justice
`150 M Street, NE, Room 5.1123
`Washington, DC 20002
`(202) 307-1242
`Patricia.Hurst@usdoj.gov
`Karl.Fingerhood@usdoj.gov
`
`JUDITH A. PHILIPS
`Acting United States Attorney
`RACHEL S. MORIYAMA (#3802)
`Assistant United States Attorney
`District of Hawaii
`Room 6-100, PJKK Federal Building
`300 Ala Moana Boulevard
`Honolulu, Hawaii 96850
`(808) 286-2890
`Rachel.Moriyama@usdoj.gov
`
`Attorneys for Plaintiff United States of America
`
`
`
`
`
`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 2 of 15 PageID #: 2
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`UNITED STATES OF
`AMERICA,
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF HAWAII
`
`
`
`
`
`
`
` COMPLAINT
`
`Plaintiff,
`
`
`
`v.
`
`
`KAANAPALI LAND, LLC,
`and
`OAHU SUGAR COMPANY,
`LLC,
`
`
`Defendants.
`
`
`
`
`
`
`The United States of America, by authority of the Attorney General of the
`
`United States and through the undersigned attorneys, acting at the request of the
`
`Department of Defense, Department of the Navy (“Navy”), Environmental
`
`Protection Agency (“EPA”), the Department of Interior (“DOI”), and the National
`
`Oceanic and Atmospheric Administration (“NOAA”), files this complaint and
`
`alleges as follows:
`
`NATURE OF ACTION
`
`This is a civil action brought against Kaanapali Land, LLC, and its wholly-
`
`owned bankrupt subsidiary, Oahu Sugar Company, LLC, pursuant to Sections 106
`
`
`
`2
`
`
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 3 of 15 PageID #: 3
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`and 107 of the Comprehensive Environmental Response, Compensation, and
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`Liability Act (“CERCLA”), 42 U.S.C. §§ 9606, 9607, for the recovery of response
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`costs associated with, and damages for injury to, destruction of, loss of, and loss of
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`use of natural resources and their services resulting from the release and threat of a
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`release of hazardous substances at and from the former Oahu Sugar pesticide and
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`herbicide mixing facility (“Site”), a parcel of approximately 3.5 acres in size,
`
`which is part of the Pearl Harbor Naval Complex Superfund Site, and located at
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`21° 21' 44.7" north latitude and 157 ° 59' 23.7" west longitude, Waipio Peninsula,
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`Waipahu, Hawaii.
`
`JURISICTION AND VENUE
`
`1.
`
`This court has jurisdiction over the subject matter of this claim
`
`pursuant to 28 U.S.C. §§ 1331, 1345, 1362, and 2201; and Section 113(b) of
`
`CERCLA, 42 U.S.C. § 9613(b).
`
`2.
`
`Venue is proper in this district pursuant to Section 106(a) of
`
`CERCLA, 42 U.S.C. §§ 9606(a), 113(b) of CERCLA, 42 U.S.C. § 9613(b), and 28
`
`U.S.C. § 1391(b).
`
`DEFENDANTS
`
`3.
`
`Defendant Kaanapali Land, LLC (“KLLLC”), is a publicly-traded
`
`Delaware limited liability company, with its principal place of business in Chicago,
`
`
`
`3
`
`
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 4 of 15 PageID #: 4
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`Illinois. KLLLC is the reorganized entity resulting from the Joint Plan of
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`Reorganization of Amfac Hawaii, LLC (now known as KLC Land Company,
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`LLC), certain of its subsidiaries, and FHT Corporation under Chapter 11 of the
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`Bankruptcy Code, dated June 11, 2002. KLLLC is the successor to the entity
`
`described in the General Allegations below as Old Oahu Sugar.
`
`4.
`
`Defendant Oahu Sugar Company, LLC, also referred to herein as New
`
`Oahu Sugar, is a bankrupt wholly-owned subsidiary of KLLLC. New Oahu Sugar
`
`filed a petition for liquidation under Chapter 7 of the Bankruptcy Code in April
`
`2005. The bankruptcy proceeding was closed on December 17, 2019.
`
`5.
`
`The Defendants are “persons” as defined in Section 101(21) of
`
`CERCLA, 42 U.S.C. § 9601(21).
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`STATUTORY BACKGROUND
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`6.
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`CERCLA was enacted in 1980 to provide a comprehensive
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`governmental mechanism for abating releases and threatened releases of hazardous
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`substances and other pollutants and contaminants and for funding the costs of such
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`abatement and related enforcement activities, which are known as “response
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`actions.” 42 U.S.C. §§ 9604(a), 9601(25).
`
`7.
`
`Under Section 104(a)(1) of CERCLA:
`
`Whenever (A) any hazardous substance is released or there is a substantial threat of
`such a release into the environment, or (B) there is a release or substantial threat of
`
`
`
`4
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`
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 5 of 15 PageID #: 5
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`release into the environment of any pollutant or contaminant which may present an
`imminent and substantial danger to the public health or welfare, the President is
`authorized to act, consistent with the national contingency plan, to remove or
`arrange for the removal of, and provide for remedial action relating to such
`hazardous substance, pollutant, or contaminant at any time (including its removal
`from any contaminated natural resource), or take any other response measure
`consistent with the national contingency plan which the President deems necessary
`to protect the public health or welfare or the environment . . . .
`
`42 U.S.C. § 9604(a)(1).
`
`8.
`
`For CERCLA response actions and enforcement purposes, the
`
`Administrator of EPA is the President’s delegate, as provided in operative
`
`Executive Orders, and, within certain limits, the Regional Administrators of EPA
`
`have been re-delegated this authority, which has been further re-delegated to the
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`Director of the Superfund Division.
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`9.
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`Pursuant to Federal statutes, including Section 107(f)(2)(A) of
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`CERCLA, 42 U.S.C. § 9607(f)(2)(A), DOI, NOAA, and the Navy are trustees for
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`natural resources injured as a result of releases of hazardous substances caused by
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`Defendants at the Site.
`
`10. Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), provides in
`
`pertinent part that:
`
`(1) the owner or operator of . . . a facility, (2) any person who at the time of
`disposal of any hazardous substance owned or operated any facility at which such
`hazardous substances were disposed of, . . . (4) . . . from which there is a release,
`or a threatened release which causes the incurrence of response costs, of a
`hazardous substance, shall be liable for – (A) all costs of removal or remedial
`
`
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`5
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 6 of 15 PageID #: 6
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`action incurred by the United States Government or a State or an Indian tribe not
`inconsistent with the national contingency plan; . . . (C) damages for injury to,
`destruction of, or loss of natural resources, including the reasonable costs of
`assessing such injury, destruction or loss resulting from such a release; . . . .
`
`
`11. Section 106(a) of CERCLA, 42 U.S.C. § 9606(a), provides in
`
`pertinent part:
`
`[W]hen the President determines that there may be an imminent and substantial
`endangerment to the public health or welfare or the environment because of an
`actual or threatened release of a hazardous substance from a facility, he may . . .
`secure such relief as may be necessary to abate such danger or threat . . . .
`
`
`12. Section 106(a) of CERCLA, 42 U.S.C. § 9606(a), authorizes the
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`United States to bring an action to secure such relief as may be necessary to abate a
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`danger or threat at the Site.
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`13. The term “natural resources” as defined in CERCLA means “land,
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`fish, wildlife, biota, air, water, groundwater, drinking water supplies, and other
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`such resources belonging to, managed by, held in trust by, appertaining to, or
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`otherwise controlled by the United States, . . . and any State or local government.”
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`42 U.S.C. § 9601(16).
`
`GENERAL ALLEGATIONS
`
`14. Old Oahu Sugar and, later, New Oahu Sugar (together, “Oahu Sugar”)
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`operated sugar cane fields and associated facilities in the area of the Site from
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`approximately 1902 until the 1980s. Oahu Sugar leased the Site and other land
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`
`
`6
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 7 of 15 PageID #: 7
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`from the Navy to grow sugarcane. Oahu Sugar used the Site for the storage,
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`mixing, and loading of pesticides, herbicides, and fertilizers. Oahu Sugar kept a
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`number of aboveground storage tanks in the upland area of the Site. It used the
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`lower area near the shore to store, mix, and load pesticides on crop dusting aircraft.
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`These activities resulted in releases of hazardous substances at and from the Site.
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`15.
`
`In or about 1962, Old Oahu Sugar was renamed “Second Sugar
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`Company” and was merged into American Factors Ltd. Subsequently, a new
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`subsidiary of American Factors Ltd. was formed with same name as Old Oahu
`
`Sugar (“New Oahu Sugar”). Through a series of corporate renamings, mergers, and
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`bankruptcies, KLLLC became the successor in interest to the Old Oahu Sugar.
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`Once formed, New Oahu Sugar began operating at the Site.
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`16. On May 20, 1997, the Hawaii Department of Health (“DOH”)
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`conducted surface soil sampling at and around the former pesticide/herbicide
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`mixing plant. The sampling results from the DOH effort indicated high
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`concentrations of various dioxin congeners at the Site, including dioxin
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`contamination as high as 1,530 parts per billion (“ppb”) for 2,3,7,8-
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`tetrachlorodibenzo-para-dioxin (2,3,7,8 TCDD) toxicity equivalents (“TEQ”).
`
`17. Pentachlorophenol (“PCP”) was also detected at the Site at levels
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`between 8.4 and 35 parts per million (“ppm”). EPA lists PCP as a probable human
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`
`7
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 8 of 15 PageID #: 8
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`carcinogen.
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`18.
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`In August 2002, BEI Environmental Services, on behalf of New Oahu
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`Sugar, conducted a remedial investigation and prepared a remedial investigation
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`report for the former pesticide mixing area. The TEQ results of this soil sampling
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`effort ranged from 10.55 ppb to 992 ppb for dioxin. PCP was detected in surface
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`soils at levels between 37 ppb to 140,000 ppb.
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`19. On March 28, 2005, EPA issued Unilateral Administrative Order No.
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`9-2005-08 against New Oahu Sugar to investigate Site contamination. New Oahu
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`Sugar failed to comply with the 2005 Unilateral Administrative Order and
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`promptly filed for Chapter 7 bankruptcy on April 19, 2005.
`
`20. On September 30, 2009, EPA issued Unilateral Administrative Order
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`No. 9-2009-14 against KLLLC to investigate Site contamination. KLLLC has been
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`performing response actions under that Unilateral Administrative Order since that
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`time.
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`21. Defendants operated the Site at the time of disposal of hazardous
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`substances including dioxin and PCP.
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`22. Releases of hazardous substances at and from the Site, including
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`dioxin and PCP, have resulted in the incurrence of response costs, and in injuries
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`to, destruction of, loss of, and the loss of use of natural resources and services from
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`
`
`8
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 9 of 15 PageID #: 9
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`natural resources, including but not limited to losses of services from the
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`vegetative community and other terrestrial resources in and around the Site.
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`23. The DOI, NOAA, and the Navy have each been designated a natural
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`resource trustee pursuant to Section 107(f) of CERCLA, 42 U.S.C. § 9607(f) and
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`Subpart G of the National Contingency Plan (“NCP”), 40 C.F.R. §§ 300.600 -
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`300.615. Under these authorities, and on behalf of the public, the Trustees have
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`acted to assess damages for the injury to, destruction of, or loss of natural
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`resources at the Site due to releases of hazardous substances from Defendant’s
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`facilities.
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`24. The Trustees performed a pre-assessment screen to examine potential
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`claims for aquatic and terrestrial injuries. As part of the pre-assessment screen, the
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`Trustees examined the data available from the prior Site investigations as well as
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`other data gathered in response to hazardous substances releases and threatened
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`releases at and from the Pearl Harbor Naval Complex Superfund Site. The screen
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`indicated injury to terrestrial and aquatic resources.
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`25. The Trustees’ assessment of injuries to natural resources will be used
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`to develop restoration actions or projects to compensate for the injury, loss or
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`destruction of natural resources and resource services.
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`9
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 10 of 15 PageID #: 10
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`FIRST CLAIM FOR RELIEF
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`(Cost Recovery under CERCLA Section 107, 42 U.S.C. § 9607)
`
`26. Paragraphs 1 through 25 are realleged and incorporated herein by
`
`reference.
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`27. The Site is a “facility” within the meaning of Section 101(9) of
`
`CERCLA, 42 U.S.C. § 9601(9).
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`28. Hazardous substances were released at and from the Site into the
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`environment within the meaning of Sections 101(22) and 101(8) of CERCLA, 42
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`U.S.C. § 9601(22) and (8).
`
`29. The United States has incurred and continues to incur costs in
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`response to releases of hazardous substances at and from the Site into the
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`environment within the meaning of Sections 101(25) of CERCLA, 42 USC §
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`9601(25).
`
`30. Under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), the
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`Defendants are jointly and severally liable to the United States for all
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`unreimbursed response costs incurred by the United States with regard to the Site
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`through the date of filing of this complaint together with accrued interest. The
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`United States is also entitled to a declaratory judgment that the Defendants are
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`liable for response costs that will be binding on any subsequent action or actions to
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`10
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 11 of 15 PageID #: 11
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`recover further response costs (other than such costs as are already being
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`reimbursed) to be incurred by the United States with respect to the Site.
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`SECOND CLAIM FOR RELIEF
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`(Injunctive Relief under CERCLA Section 106, 42 U.S.C. § 9606)
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`31. Paragraphs 1 through 30 are realleged and incorporated herein by
`
`reference.
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`32. The President, through his delegate, has determined that there may be
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`an imminent and substantial endangerment to the public health or welfare or the
`
`environment because of a release of hazardous substances or a threatened release
`
`of hazardous substances at and from the Site.
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`33. Pursuant to Section 106(a) of CERCLA, 42 U.S.C. § 9606(a), the
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`Defendants are jointly and severally liable to perform response actions selected for
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`the Site, which may be necessary to abate a danger or threat with respect to
`
`groundwater, soil, surface water, and/or sediment contamination at the Site.
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`THIRD CLAIM FOR RELIEF
`
`(Natural Resource Damages under CERCLA Section 107, 42 U.S.C. § 9607)
`
`
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`34. Paragraphs 1 through 33 are realleged and incorporated herein by
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`reference.
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`
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`35. Each Defendant is liable under Section 107(a)(2) of CERCLA, 42
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`11
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 12 of 15 PageID #: 12
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`U.S.C. § 9607(a)(2), because it was the owner and/or operator of the Site at the
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`time hazardous substances were disposed of at and from the Site, and because, as
`
`set forth above, the release of hazardous substances at and from the Site caused
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`injury to, destruction of, and loss of natural resources in surrounding lands and
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`other areas within the meaning of Section 107(a)(4)(C) of CERCLA, 42 U.S.C. §
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`9607(a)(4)(C).
`
`
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`36. The United States has incurred and continues to incur costs related to
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`the assessment of the loss of natural resources for which it is trustee resulting from
`
`the release of hazardous substances at and from the Site.
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`PRAYER FOR RELIEF
`
`WHEREFORE, Plaintiff respectfully requests that this Court:
`
`(1) On the First Claim for Relief, enter judgment against the Defendants
`
`and in favor of the United States for all response costs incurred by the United
`
`States in connection with the Site;
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`(2) On the First Claim for Relief, enter a declaratory judgment against the
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`Defendants and in favor of the United States, pursuant to Section 113(g)(2) of
`
`CERCLA, 42 U.S.C. § 9613(g)(2), that the Defendants are liable for response
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`costs, that will be binding on any subsequent action or actions to recover further
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`response costs to be incurred by the United States with respect to the Site;
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`12
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 13 of 15 PageID #: 13
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`(3) On the Second Claim for Relief, enter judgment against the
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`Defendants and in favor of the United States ordering the Defendants to perform
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`the response actions identified in the 2005 and 2009 UAOs, and selected in any
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`decision document for the Site, in order to abate the conditions at the Site;
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`(4) On the Third Claim for Relief, enter a judgment in favor of Plaintiff
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`against Defendants, of liability pursuant to CERCLA Section 107(a)(4)(C), 42
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`U.S.C. § 9607(a)(4)(C), for all damages for injury to, destruction of, and loss of
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`natural resources within the trusteeship of the United States resulting from the
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`releases of hazardous substances described herein, including the unreimbursed
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`past, present, and future costs of assessing such damages, the cost of restoring,
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`replacing, and/or acquiring the equivalent of those injured resources, and the past,
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`present, and future diminution in value of those resources pending restoration or
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`replacement, in an amount to be proved at trial;
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`(5) Enter a judgment in favor of Plaintiff against Defendants for liability
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`for all costs of this action, including attorneys’ fees; and
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`(6) Award Plaintiff such other and further relief as this Court may deem
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`appropriate.
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`Respectfully Submitted,
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`FOR THE UNITED STATES OF AMERICA
`
`
`
`JEAN E. WILLIAMS
`Acting Assistant Attorney General
`Environmental Enforcement Section
`Environment & Natural Resources Division
`U.S. Department of Justice
`
`
`
`
`
`/s/ Patricia L. Hurst
`_____________________________________
`PATRICIA L. HURST
`KARL J. FINGERHOOD
`Senior Counsels
`Environmental Enforcement Section
`Environment & Natural Resources Division
`U.S. Department of Justice
`
`JUDITH A. PHILIPS
`Acting United States Attorney
`District of Hawaii
`
`RACHEL S. MORIYAMA
`Assistant United States Attorney
`United States Attorney's Office
`District of Hawaii
`
`
`14
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`Case 1:21-cv-00190-DKW-RT Document 1 Filed 04/19/21 Page 15 of 15 PageID #: 15
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`OF COUNSEL:
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`GREG BIRKENSTOCK
`Senior Trial Attorney
`Department of the Navy
`Office of General Counsel
`Naval Litigation Office
`720 Kennon St. SE
`Building 36, Room 233
`Washington Navy Yard, DC 20374
`
`REBEKAH REYNOLDS
`Assistant Regional Counsel
`U.S. Environmental Protection Agency
`Region 9, ORC-3
`75 Hawthorne St.
`San Francisco, CA 94105
`
`ERICKA M. HAILSTOCKE-JOHNSON
`Attorney-Advisor
`National Oceanic and Atmospheric Administration
`U.S. Department of Commerce
`General Counsel Office, Natural Resources Section
`501 West Ocean Boulevard, Long Beach, CA 90802
`
`LISA L. STEVENS
`General Attorney
`U.S. Department of the Interior
`Solicitor’s Office
`Division of Parks and Wildlife, Environmental Restoration
`1849 C Street, NW, Mail Stop 6313
`Washington, DC 20240
`
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`15
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