Joint Appendix — District of Columbia v. Tri County Industries, Inc.

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No. 99-1953

' ;

IN THE SUPREME COURT OF THE UNITED STATES

~ha ae : Lx ¢

DISTRICT OF COLUMBIA, ET AL., aK

Petitioners,

v. °

Tri COUNTY INDUSTRIES, INC.,

Respondent.

On Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

JOINT APPENDIX

ROBERT R. RIGSBY FRANK J. EMIG

-———-— — €orporgtion Counsel - Greenway Center East

s Suite 314

CHARLES L. REISCHEL 7525 Greenway Center Drive

Deputy Corporation Counsel Greenbelt, Maryland 20770-3525

Appellate Division . . Telephone: (301) 345-7002

Counsel of Record

DONNA M. MURASKY for Respondent

Senior Assistant

Corporation Counsel’

Counsel of Record for Petitioners

Office of the Corporation Counsel

Government of the District of Columbia

One Judiciary Square — 6th Floor South

441 Fourth Street, N.W.

Washington, D.C. 20001

Telephone: (202) 727-6252/724-5691

Petition for a Writ of Certiorari filed on June 2, 2000

Certiorari granted on September 26, 2000

TABLE OF CONTENTS

Page

APPENDIX TO PETITION FOR A WRIT OF CERTIORARI

Opinion of the United States Court of Appeals

for the District of Columbia Circuit in

Tri County Industries, Inc. v. District of

Columbia, No. 99-7028 (January 18, 2000) ....

Judgment on the Verdict in Tri County Industries, Inc.

; v. District of Columbia, Civil Action No.

| 94-2014(0R) (D.D.C. April 20, 1998)

Memorandum Order in Tri County Industries, Inc.

v. District of Columbia, Civil Action No.

94-2014(JR) (D.D.C. July 23, 1998)

Se ae On ae

Judgment on the Verdict in Tri County Industries, Inc.

v. District of Columbia, Civil Action No.

94-2014(00R) (D.D.C. February 4, 1999)

Order of the United States Court of Appeals

for the District of Columbia Circuit in

Tri County Industries, Inc. v. District of

Columbia, No. 99-7028 (March 8, 2000)

(denying petition for rehearing )

Order of the United States Court of Appeals

for the District of Columbia Circuit in

Tri County Industries, Inc. v. District of

Columbia, No. 99-7028 (March 8, 2000)

(denying petition for rehearing en banc )

eT eee en eee ee

~ <ivmmisiion ~

JOINT APPENDIX

Relevant Docket Entries: Tri County Industries, Inc.

v. District of Columbia, et al., Civil Action No.

S6CV-eee GAIAED «0000 686855 l

Relevant Docket Entries: United States Court of Appeals for

the District of Columbia Circuit, Appeal No.

rr 7

DE 45: Amended Complaint -- Excerpts .......... 8

DE 43: Answer to Amended Complaint -- Excerpts ... 9

DE 46: Memorandum Opinion (D.D.C. January 17,

PTT... 10

Decision (D.C. Cir. January 14, 1997) .......... 18

DE 67: Memorandum Opinion Guly YS ever 31

Trial Transcript & Exhibits, Civ. No. 94-CV-2014

(Agu 86-57, WOGGD 0 0 0 0 0 006 ee seen 35

Testimony of Karleen Donnells, Vice President

of Tri County Industries .......... 35

Testimony of John Wegznek, certified public

lM 38

Testimony of Glenn Selzer, President of Tri

County Industries.............. 39

Testimony of Jonathan L. Farmer, counsel for

Tri County Industries ............ 53

Testimony of Alfred Dishian, business consultant 55

Testimony of Donald G. Carter, consulting

GRERNOEE . wo 0000 een eee 58

Testimony of Vincent DiRenzo, environmental

ee wreeT 60

Deposition Testimony of Larry Johnson ..... 64

Testimony of Joel M. Morse, professor of

financial economics ............. 65

Deposition Testimony of Harry Thomas ..... 70

Deposition Testimony of Hampton Cross ..... 71

Deposition Testimony of Francine Howard

of Appeals and Review ........... 72

SITU og co ccccccecccccces 72

Ruling of Court on defendants’ motion for

judgment as a matter of law ........ 77

Testimony of DCRA Inspector Juan Berra-

ME @¢eeeseeeccoeecsoccece 80

Testimony of DCRA Inspector Phillip Thomas . 83

Testimony of DCRA Employee Lennox Simon . 85

Testimony of DCRA Director Hampton Cross... 89

Testimony of DCRA Chief James Sweeney ... 93

Testimony of BAR’s Executive Officer Fran-

DUP bbhbsbeeeececceseccs 103

Colloquy: Court and Counsel .......... 104

Proposed Testimony of Alfred Siess ....... 105

Colloquy: Court and Counsel .......... 112

Colloquy: Court and Counsel .......... 120

Defendants’ renewal of their motion for judg-

ment as a matteroflaw.......... 120

Court directives tojury ..........64.-. 122

Jury Instructions -- excerpts............ 123

Dc cs ccceeeeecosces 126

Plaintiff's Exhibit4..............606. 130

Plaintiff's Exhibit 44 ..............4-. 132

Plaintiff's Exhibit 54; D.E. 17 -- Exh. A ... 133

DEE «ceccoceeccecoces 139

DT «cccccceceeccecce 143

Defendants’ Exhibit 8 (October 15, 1993 letter) 145

Defendants’ Exhibit 10 (December 6, 1993

Relevant Docket Entries

Tri County Industries, Inc. v. District of Columbia, et al.

Civil Action No. 94-CV-2014 (D.D.C.)

[TCI = Tri County Industries, Inc.]

9/20/94 - DE 1: COMPLAINT filed by TCI; jury demand

10/17/94 -- DE 8: ANSWER TO COMPLAINT [1-1] by

defendants DC, SHARON PRATT KELLY,

DEPT. OF CONSUMER, HAMPTON

CROSS, FERIAL BISHOP; jury demand

9/27/95 -- DE 28: ORDER by Judge James Robertson:

granting motion for leave to file amended

complaint [24-1] by TCI

9/27/95 -- DE 29: MOTION filed by TCI for summary

judgment; exhibits (51)

9/27/95 -- DE 45: AMENDED COMPLAINT by TCI [1-1];

jury demand

10/25/95 -- DE 32: CROSS MOTIONS by defendants to

dismiss, or, in the alternative for summary

judgment; Exhibits (7)

12/5/95 -- DE 39: SUPPLEMENTAL MEMORANDUM by

defendants in support of cross motion for sum-

mary judgment [32-2]

12/20/95 -- DE 43: ANSWER TO AMENDED COM-

PLAINT by defendants; jury demand

1/17/96 - DE 46: MEMORANDUM OPINION by Judge

James Robertson

1/17/96 -- DE 47: ORDER by Judge James Robertson:

granting cross motion for summary judgment

[32-2] by defendants with respect to Count I of

the amended complaint; denying motion for

partial summary judgment [29-1] by TCI dis-

missing Count II of the amended complaint for

failure to state a claim upon which relief can be

granted; declining to exercise supplemental

jurisdiction over Counts III and IV of the

amended complaint; dismissing complaint [1-1]

with prejudice.

1/29/96 -- DE 49: NOTICE OF APPEAL by TCI from order

dismissing complaint [1-1] with prejudice. [47-

1}, order [47-2], entered on January 17, 1996.

2/26/97 -- DE 52: CERTIFIED COPY of judgment filed in

USCA dated 1/14/97 on appeal [49-1], vacating

decision of USDC and remanding for further

proceedings OPINION USCA # 96-7022

4/15/97 -- DE 56: MOTION by TCI to strike affirmative

defense of failure to mitigate damages

4/15/97 -- DE 58: MOTION by TCI for summary judgment

on the issue of failure to mitigate damages

5/23/97 -- DE 61: OPPOSITION by defendants to metion to

strike affirmative defense of failure to mitigate ~

damages

5/23/97 -- DE 62: OPPOSITION by defendants to motion for

summary judgment on issue of failure to mitigate

damages [58-1]

5/23/97 -- DE 63: MEMORANDUM by defendants on

damages issues

5/30/97 -- DE 64: REPLY by TCI to defendants’ memoran-

dum on damages issues

5/30/97 -- DE 65: REPLY by TCI to defendants’ opposition

to TCI’s motion for summary judgment on

issue of failure to mitigate damages

5/30/97 -- DE 66: REPLY by TCI to defendants’ opposition

to motion to strike affirmative defense of fail-

ure to mitigate damages

7/25/97 -- DE 67: MEMORANDUM OPINION by Judge

James Robertson

7/25/97 -- DE 68: ORDER by Judge James Robertson:

denying motion for summary judgment on issue

~ “of failure to mitigate damages [58-1] by TCI;

denying motion to strike affirmative defense of

failure to mitigate damages [56-1] by TCI

12/11/97 -- DE 74: MOTION by TCI in limine to exclude

testimony or argument involving the safety of TCI’s

project

12/11/97 - DE 75: MOTION by TCI in limine to exclude

stop work order dated September 22, 1993

12/11/97 -- DE 76 -- MOTION by TCI to amend ad damnum

clause in amended complaint

12/11/97 - DE 77: MOTION by TCI in limine to exclude

defense of failure to mitigate damages

12/16/97 -- DE 79: MOTION by defendants for summary

judgment on damages; exhibits (4)

12/17/97 -- DE 80: MEMORANDUM in support of defen

dants’ motion for summary judgment on dam-

ages [79-1]; exhibits (5)

12/31/97 -- DE 82: OPPOSITION by defendants to motion

to exclude testimony or argument involving safety of

TCI’s project [74-1]

12/31/97 -- DE 83: OPPOSITION by defendants to motion

to exclude stop work order dated September 22, 1993

[75-1]

1/6/98 -- DE 84: SUPPLEMENTAL MEMORANDUM by

defendants in support of opposition [82-1]

1/8/98 -- DE 85: REPLY by TCI to defendants’ opposition

to motion to exclude testimony or argument

involving the safety of TCI’s project A

1/9/98 -- DE 86: REPLY by TCI to defendants’ opposition

to motion to exclude stop work order dated September

22, 1993

1/15/98 -- DE 87: OPPOSITION by TCI to defendants’

motion for summary judgment on damages [79-1]

2/4/98 -- DE 89: REPLY by defendants to TCI’s opposition

to motion for summary judgment on damages [79-1]

3/4/98 -- DE91: MEMORANDUM AND ORDER by Judge

James Robertson: denying motion of defen-

dants for summary judgment on damages [79-

1}; denying motion to exclude defense of fail-

ure to mitigate damages [77-1] by TCI; grant-

ing motion by TCI to amend ad damnum clause

[76-1]; denying motion by TCI to exclude stop

work order dated September 22, 1993; denying

motion by TCI to exclude testimony or argu-

ment involving safety of TCI’s project [74-1]

3/17/98 -- DE 94: PRETRIAL SiATEMENT by TCI;

exhibits (4)

3/17/98 -- DE 95: MEMORANDUM (Pretrial) by TCI on

damages and duty to mitigate damages

3/25/98 -- DE 98: PRETRIAL STATEMENT by defendants

3/27/98 -- DE 99: MOTION by TCI to preclude factual

witnesses from testifying

3/31/98 -- DE 101: OBJECTIONS by TCI to defendants’

proposed exhibits

4/6/98 -- DE 102: OPPOSITION by defendants to TCI’s

motion to preclude factual witnesses from

testifying [99-1]

4/7/98 -- DE 103: OBJECTIONS by defendants to TCI’s

exhibit list

4/14/98 -- JURY TRIAL before Judge James Robertson: jury

of 8 sworn and selected; trial begun

4/15/98 -- JURY TRIAL before Judge James Robertson: same

jury of 8 resumed

4/16/98 -- JURY TRIAL before Judge James Robertson: same

jury of 8 resumed

4/17/98 -- JURY TRIAL before Judge James Robertson: same

jury of 8 resumed and concluded; Jury deliber-

ations began and concluded; Judgment in favor

of plaintiff in the amount of $5,000,000.00;

notes (1) and verdict form filed in court jacket.

4/17/98 -- DE 106: VERDICT FORM

4/17/98 -- DE 107: JURY INSTRUCTIONS

4/20/98 -- DE 104: JUDGMENT on Verdict in favor of TCI

against defendant DC in the amount of $5,000,000.00

4/27/98 -- DE 111: TRANSCRIPT of trial for 4/14/98

4/27/98 -- DE 112: TRANSCRIPT of trial for 4/16/98

4/27/98 -- DE 113: TRANSCRIPT of trial for 4/15/98

4/27/98 -- DE 114: TRANSCRIPT of trial for 4/17/98

5/4/98 -- DE 115: MOTION by defendants for judgment

notwithstanding the verdict or, in the alternative, for a

new trial

5/18/98 -- DE 116: OPPOSITION by TCI to motion [115-2]

6/4/98 -- DE 118: SUPPLEMENTAL MEMORANDUM by

TCI in opposition to motion [115-2]

6/16/98 -- DE 120: SUPPLEMENTAL MEMORANDUM by

defendants in support of their motion for new

trial [115-2]

7/23/98 -- DE 124: MEMORANDUM AND ORDER by

Judge James Robertson: granting motion for new trial

[115-2] unless within 30 days after entry of this order,

TCI accepts remittitur of jury’s verdict to $1,000,000

8/24/98 -- DE 125: RESPONSE by TCI to offer of remittitur

12/8/98 -- DE 132: MOTION by TCI for reconsideration of

the 7/23/98 order [124-1]

2/4/99 - DE 155: JUDGMENT on verdict in favor of

plaintiff TCI in the nominal amount of $100.00

2/23/99 -- DE 158: NOTICE OF APPEAL by plaintiff TCI

from judgment order [155-1] entered on: Feb-

ruary 4, 1999.

Relevant Docket Entries

United States Court of Appeals

for the District of Columbia Circuit

Appeal No. 99-7028

6/28/99 -- BRIEF filed by Appellant, Tri County Industries,

Inc.

8/12/99 -- BRIEF filed by Appellees, District of Columbia, et

al.

8/26/99 -- REPLY BRIEF filed by Appellant

11/12/99 -- ORAL ARGUMENT HELD before Edwards,

Silberman, Henderson

11/18/99 -- LETTER filed by counsel for Appellees in re-

sponse to questions raised at oral argument

11/22/99 -- LETTER filed by Appellant in response to Appel-

lees’ 11/18/99 letter

11/23/99 -- LETTER filed by Appellees in reply to Appel-

lant’s 11/22/99 letter

1/18/00 - JUDGMENT for the reasons stated in the accom-

panying opinion

1/18/00 -- OPINION for the Court filed by Judge Henderson

2/17/00 -- PETITION for rehearing and PETITION for

rehearing en banc filed by Appellees

3/8/00 - PER CURIAM ORDER, In Banc, denying petition

for rehearing en banc

3/8/00 -- PER CURIAM ORDER filed denying petition for

rehearing

[DE 45: AMENDED COMPLAINT -- EXCERPTS]:

AMENDED COMPLAINT

(For Damages -- Violations of Constitutional Rights to Due

Process; Unconstitutional Impairment of Contracts; Tortious

Interference with Contracts; Tortious Interference with Pro-

spective Economic Advantage)

x“ * *

11. On information and belief, various other entities

and individuals, not made Defendants herein, whose identities

or conduct are presently unknown to the Plaintiff, have

participated with Defendants in the violations and tortious

actions alleged herein and have performed acts and made

statements in furtherance thereof.

12. In July, 1992, the Plaintiff initially made applica-

tion with DCRA to obtain all required permits to operate a

soil remediation facility at 2115 Bryant Street, N.E.

13. This facility was designed to treat and clean soil

that had been contaminated with gasoline, diesel oil, fuel oil

and kerosene. It was not intended to treat any hazardous

waste material.

14. DCRA conducted an extensive review of the

Plaintiff's application to construct and operate this facility,

including, but not limited to visits to this site. Such review

resulted in the Environmental Regulation Administration

issuing to the Plaintiff on December 11, 1992, an air quality

operating permit for this project. On December 22, 1992, the

same Administration further approved the project to proceed _

without the filing of an environmental impact statement.

[DE 43 - ANSWER TO THE AMENDED COMPLAINT

11. Defendants lack knowledge or information suffi-

cient to form a belief as to the truth of the allegations stated

in paragraph "11."

12. Defendants admit the allegations stated in para-

graph "12."

13. Defendants lack knowledge or information suffi-

cient to form a belief as to the truth of the allegations stated

in paragraph "13."

14. Defendants admit the allegations stated in the first

sentence of paragraph "14", and deny those stated in the

second sentence therein.

[DE 46 - MEMORANDUM]:

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

TRI-COUNTY INDUSTRIES, INC.

Plaintiff, ;

Vv. : Civil Action No.

: 94-2014 (JR)

DISTRICT OF COLUMBIA, et ai., : FILED

Defendants. : JAN 17 1996

CLERK, U.S. DISTRICT COURT

DISTRICT OF COLUMBIA

MEMORANDUM

Plaintiff Tri-County Industries, Inc., a Maryland

corporation in the business of removing underground fuel

storage tanks and remediating contaminated soil, alleges that

the District of Columbia, and various of its agents acting in

their official capacities, illegally suspended the building permit

and air quality permit issued to Tri County for the construc-

tion of a soil remediation facility. Tri-County asserts claims

under 42 U.S.C. § 1983 for violation of its due process rights

and for unconstitutional impairment of contract. Tri-County

also asserts common law claims. Before the Court are Tri-

County’s motion for partial summary judgment and the motion

of defendants to dismiss or for summary judgment.

I. Background.

In July 1992, Tri-County applied to D.C.’s Department

of Consumer and Regulatory Affairs (DCRA) for the permits

necessary to build and operate a new soil remediation facility

at 2215 Bryant Street, N.E.' On December 11 of the same

year, DCRA’s Environmental Regulation Administration

(ERA) issued an air quality operating permit that was to be

valid upon the issuance of a building permit. On December

22, ERA notified Tri-County that the soil remediation project

could proceed without the filing of an environmental impact

statement, but that the "project is still governed by all other

applicable District and Federal laws and regulations and will

be subject to normal reviews during the permitting and con-

struction process." On February 26, 1993, DCRA issued

building permit No. B378978, permitting Tri-County to

renovate a warehouse to accommodate the soil remediation

plant.

On September 7, 1993, when the warehouse renovation

work was in progress and Tri-County was awaiting the deliv-

ery of its soil remediation equipment, ERA issued a citation

charging Tri-County with occupying the site as a soil remedia-

tion facility -- storing 500 tons of contaminated soil at the site

-- without a certificate of occupancy. The citaticn required

payment of a $500 fine within fifteen days. Tri-County did

not pay the fine.

On September 20, 1993, representatives of Tri-County,

DCRA, and D.C.’s Department of Housing and Community

Development (DHCD), D.C. Councilmember Harry T.

Thomas, and some 100 to 200 citizens attended a community

meeting called by neighbors of the Bryant Street site to protest

the location of the soil remediation facility in their neighbor-

hood. During the meeting, Merrick Malone, a representative

of DHCD, stated his agency’s concerns about the facility’s

location, in view of the number of existing neighborhood

residents and DHCD’s plans to locate a new housing project

nearby. After hearing that concern and others stated at the

meeting, Hampton Cross, then acting director of DCRA,

announced that his agency would re-evaluate the potential

environmental impact of the soil remediation project on the

community and that Tri-County’s permit would be suspended

pending the re-evaluation.

Two days later, on September 22, DCRA posted a

"stop work order" at the plant site.2, On October 15, DCRA

sent a letter to Tri-County requesting more information about

the proposed plant and its potential environmental impact on

the community. Tri-County did not respond.

On December 6, having received no response from

Tri-County, DCRA rescinded the air quality permit and

environmental approval letter issued on December 11 and

December 22, 1992. DCRA also notified Tri-County that it

would move to revoke the building permit (after procedures

and a hearing in accordance with local law), and that Tri-

County must immediately remove all contaminated soils from

the site.

Tri-County sought no relief from the suspension of the

building permit on September 20, or the stop work order of

September 22, or the DCRA request for more information on

October 15, or the rescission and revocation actions of De-

cember 6. Nor did Tri-County seek administrative or judicial

review of any of these actions. Instead, Tri-County takes the

position today that the September 20, 1993, suspension ren-

dered the project economically unfeasible. Tri-County filed

this action on September 20, 1994.

Il. Due Process

The complaint alleges that defendants’ September 20

suspension of the building permit and its December 6 rescis-

sion of the environmental approval violated the procedural and

substantive due process guarantees of the United States Consti-

tution. The undisputed facts provide no support for those

allegations, however, and defendants are entitled to summary

judgment on plaintiff's due process claims.

a. Substantive due process

Neither the Supreme Court nor the Court of Appeals

2 eee ae ae

deciding which governmental lapses are tive

process violations redressable under 42 U.S.C. § 1983. The

Court of Appeals has said, however, that “a plaintiff must at

least show that state officials are guilty of grave unfairness in

the discharge of their legal responsibilities” and that “only a

substantial infringement of state law prompted by personal or

group animus, or a deliberate flouting of the law that tram-

mels significant personal or property rights qualifies for

ion under § 1983." Silverman v. Barry, 845 F.2d

1072, 1080 (D.C. Cir. 1988). Moreover, “inadvertent errors,

honest mistakes, agency confusion, even negligence in the

performance of official duties, do not warrant redress under

this statute." Jd. The Silverman court cited with approval a

First Circuit decision holding that “purposeful, malicious

action" is a prerequisite to a substantive due process claim.

See Ortega Cabrera v. Municipality of Bayamon, 562 F.2d 91,

103 (1st Cir. 1977).

Applying those tests to the undisputed facts of this case

requires a finding that Tri-County’s substantive due process

rights were not violated by the District’s action. The 500 tons

of contaminated soil found at the construction site led to the

issuance of a civil citation to Tri-County on September 7.

That violation alone, under D.C. law, triggered Director

Cross’s discretionary authority to revoke plaintiff's building

permit summarily, if he determined that the infraction posed

a threat to the health and safety of the District’s citizens and

had not been remedied in the time allotted. See D.C. Con-

struction Code § 112.9(3) (1992 Supp.). Even if Director

Cross incorrectly assessed the danger to area residents or

miscalculated the time within which Tri-County should remove

the soil, the temporary suspension of the building permit --

which was not a revocation -- was at most negligent. Director

Cross’s conduct was not the substantial and malicious infringe-

ment of District law that is the stuff of a due process viola-

tion.

DCRA’s subsequent rescission of Tri-County’s envi-

ronmental approval on December 6 was justified by Tri-

County’s failure to deal with the civil citation or to address

the September 22 stop work order and its further refusal to

respond to DCRA’s October 15 request for information. See

D.C. Environmental Policy Act of 1989, D.C. Code § 6-981

et seq. (1995 repl.). Again, even if this decision was in error,

it was at most negligent and did not amount to a denial of Tri-

County’s substantive due process rights.

b. Procedural due process

Tri-County also complains that the guarantee of proce-

dural due process was denied by Director Cross’s impromptu

suspension of its building permit without notice and a pre-

The contours of procedural due process are flexible

and depend upon the circumstances of a given case. Zinermon

v. Burch, 494 U.S. 113, 127 (1990). At bottom, due process

requires some kind of notice and a hearing before the final

deprivation of a property interest. See Logan v. Zimmerman

Brush Co., 455 U.S. 422, 433 (1982); Propert v. District of

Columbia, 948 F.2d 1327, 1331 (D.C. Cir. 1991). Interim

suspensions of licenses and temporary seizures of property

may be undertaken without a pre-deprivation hearing, provid-

ed that there is a sufficient factual basis for the action and that

jmini ive or judicial review of the ton of the

decision is available. See Barry v. Barchi, 443 U.S. 55, 64

(1979); Cokinos v. District of Columbia, 728 F.2d 502 (D.C.

Cir. 1983).

The suspension announced by Director Cross at the

September 20, community meeting was not a "final depriva-

tion" of Tri-County’s asserted property interest in the building

permit. Rather, it was akin to the “interim suspension"

reviewed in Barry v. Barchi, supra. What Director Cross said

on September 20 was that he would suspend the permit

pending further study of the project’s potential environmental

impact. Formal action to revoke the permit did not begin

until December 6, after Tri County failed to respond to

DCRA’s request for information.

I find on the basis of the undisputed facts both (1) that

Director Cross had sufficient grounds upon which to impose

an interim suspension for the purpose of gathering further

information about the project’s environmental impact on the

surrounding community, and (2) that Tri-County had adequate

post-deprivation remedies at its disposal with which to fight

the permit suspension.

It is undisputed that Tri-County was cited for storing

some 500 tons of contaminated soil at the Bryant Street

facility two weeks prior to the suspension and that Tri-County

neither removed the soil nor otherwise responded to the

citation prior to the issuance of the stop work order on Sep-

tember 22. Tri-County’s history of noncompliance with

District environmental, building and zoning laws, the illegal

presence of contaminated soil at the site, and the concerns

about life safety raised by DHCD were enough for Director

Cross, after consultation with his staff, to decide that more

information was needed. “At the interim suspension stage, an

expert’s affirmance, although untested and not beyond error,

would appear sufficiently reliable to satisfy constitutional

requirements.” Barchi, 443 U.S. at 65.

Tri-County could have sought, but did not seek, an

expedited administrative hearing within 72 hours of the

suspension. At such a hearing, the burden of justifying the

suspension would have been the Director’s. D.C. Code § 6-

2706 (1995 repl.); D.C. Construction Code § 112.13 (1992

Supp.). If the result of the expedited hearing had been ad-

verse to Tri-County, Tri-County had the right to a review

before the D.C. Board of Appeals and Review. D.C. Con-

struction Code § 112.14. Tri-County also could have sought,

but did not seek, direct review of the suspension in the D.C.

Court of Appeals pursuant to D.C. Code § 1-1510. And Tri-

County could have sued, but did not sue, for injunctive relief

in D.C. Superior Court or petition for a writ of mandamus in

the D.C. Court of Appeals.

Tri-County’s failure to pursue any of the post-suspen-

sion remedies available to it give a hollow ring to its allega-

~ tions of injury. Even if Director Cross’s decision to suspend

the permit was not adequately grounded, Tri-County offers no

evidence thai the passage of a few days -- the amount of time

deeded for the first level of administrative review -- resulted

in any of the losses alleged in the complaint. Tri-County’s

alleged injury from the September 20 suspension was de

minimis if not ephemeral.

Ill. The Remaining Claims

Tri-County has not developed or argued the claim for

unconstitutional impairment of contract that was set forth in its

amended complaint, and in that complaint Tri-County did not

allege the existence of any contractual relationship with which

the District interfered. Rather, the impairment claim as stated

relates only to prospective contractual relations -- and inter-

ference with prospective business advantage is not a constitu-

tional tort. Accordingly, Count If must be dismissed for

failure to state a claim upon which relief can be granted.

F.R.Civ.P. 12(b)(6).

Having decided to dismiss all the claims over which I

have original jurisdiction, I decline to exercise supplemental

jurisdiction over plaintiff's common law claims of tortious

interference with contract and interference with prospective

business advantage. 28 U.S.C. § 1367(c).

An appropriate order is issued with this memorandum.

‘During the previous year, under the name of Clean

Earth, Inc., Tri-County had operated a soil remediation

facility at 1911 New York Avenue, N.E. Tri-County closed

that operation, however, after it was found in violation of city

zoning laws.

The basis and the import of the stop work order are

disputed. Tri-County maintains that it was issued because of

its failure to pay the fine that was due fifteen days after

September 7 and points to the notation of “no c of o” on the

face of the order -- presumably "no certificate of occupancy,”

which had been the basis for the September 7 citation.

Defendants, on the other hand, argue that the stop work order

implemented Mr. Cross’s announcement at the September 20

meeting that he was temporarily suspending Tri-County’s

building permit.

Argued October 10, 1996

Notice: This opinion is subject to formal revision before publication in

the Federal Reporter or U.S.App.D.C. Reports. Users are requested to

notify the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press. :

Gnited States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Decided January 14, 1997

No. 96-7022

Tri County Lnpustries, Inc. A MARYLAND CORPORATION,

APPELLANT .-

Vv.

FILED JAN Vere COLUMBIA, A MUNICIPAL CORPORATION, ET AL.

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 4ev02014)

Frank J. Emig argued the cause and filed the briefs for

appellant.

Martin B. White, Assistant Corporation Counsel, argued

the cause for appellees. Charles F.C. Ruff, Corporation

Counsel, Charles L. Reischel, Deputy Corporation Counsel,

and Laz Alexander Prager, Assistant Deputy Corporation

Counsel, were on the brief with him.

Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

ORIGINA|

Before: Epwarps, Chief Judge, Witiiams and SENTELLE,

Circuit Judges. -

Opinion for the Court filed by Circuit Judge WiLLiaMs..

Wiis, Circuit Judge: On September 20, 1993 the acting

director of the District of Columbia Department of Consumer

and Regulatory Affairs (“DCRA”), Hampton Cross, summari-

ly and without a hearing suspended a building permit issued

to Tri County Industries, Inc. Tri County contends that the

permit to convert an empty warehouse in Washington, D.C.

into a facility for iis decontamination work. In pursuing the

application, it sought and obtained both an air permit

poudurd! lineata tenttie on ceeme

impact statement. Both were to the issuance of

Tri County’s building permit. See District of Columbia Mu-

nicipal Regulations §§ 20-200.1, 20-7200.1.

On February 26, 1993 the DCRA issued the building per-

mit. Its licensing in place, Tri County completed some work

not

was b all accounts a loud and sometimes unruly affair. In

"he course of it Malone stated, incorrectly as it later turned

out, that a new public housing project was to be built immedi-

ately adjacent to the facility. Cross thereupon stated that he

See District of Columbia Municipal Regulations § 12-1128.)

Tri County did nothing in response to this last missive except

to remove the soil that had been the basis of the September 7

One year to the day after the fateful public meeting, Tri

County filed suit in federal court under 42 U.S.C. § 1983,

alleging deprivation of its property without procedural or

substantive due process. It identifies as deprivations not

only the suspension of its building permit on September 20,

1993 but also the implied simultaneous suspension of its air

quality permit on the same date and the explicit rescission of

its environmental waiver on December 6, 1993.

The district court granted the District’s motion for sum-

mary judgment. It rejected the substantive due process

claim on the ground that Cross’s actions were at most negli-

gent and the procedural due process claim on the ground that

the building permit suspension was only an “interim suspen-

sion” for which Cross had “sufficient factual basis” and for

which prompt review was available, citing Barry v. Barchi,

443 US. 55, 64 (1979). See Tri-County Industries, Inc. v.

District of Columbia, 932 F. Supp. 4, 6, 7 (D.D.C. 1996). We

review de novo. See Diamond v. Atwood, 43 F.3d 1538, 1540

(D.C. Cir. 1995).

We first dispose of Tri County’s claim that the implied

suspension of the air quality permit on September 20, and the

explicit rescission the environmental waiver on December 6,

were deprivations that require our review. As to the air

quality permit, the only ground for regarding it as suspended

at all is the idea that it was joined at the hip with the building

permit, so that the suspension of the building permit equally

suspended the air quality permit. That may well be true: the

letter issuing the permit says that it will not become valid (as

authorization for a stationary source of air pollution) until a

valid building permit is received by the issuing office. See

letter of December 11, 1992 to Tri County from the Environ-

mental Regulation Administration of the DCRA. But it

would seem to follow that reactivation of the building permit

would reactivate the air quality permit. Accordingly, it is

hard to see how the latter’s suspension adds anything to that

of the building permit.

Of course the air quality suspension might generate an

additional issue if the District defended the suspension (if

indeed there was a suspension) as an ication of proce-

dures explicitly laid out for suspension of air quality permits;

in that event we would be called on to review the constitution-

ality of the specified procedures. But the District makes no

such claim. Rather, as we discuss in detail below, since the

suspension of both permits did not fit any authorized proce-

dure, we evaluate Cross’s act, for procedural due process

purposes, by inferring a hypothetical procedure from his

actual conduct. That conduct was, of course, identical for

both permits. Accordingly, the air quality permit seems to

add nothing to the case that is not encompassed in analysis of

the building permit.

Tri County’s attack on the rescission of the environmental

\ waiver fails for a different reason. While the air quality

permit is legally stated as a prerequisite to construction and

operation of a major stationary source (apart from the need

for a building permit), the waiver is merely a step towards

the acquisition of the building permit. District law requires

that the environmental impact of a “major action” be evaluat-

ed “before an agency shall approve any major action, or issue

any: lease, permit, license, certificate, or other entitlement”

the action. See District of Columbia Municipal

Regulations § 20-7200.1. The waiver was simply an adminis-

trative finding that no more was required by way of satisfying

that requirement for issuance of the building permit. But the

due process clauses (here, that of the 5th Amendment, see

Bolling v. Sharpe, 347 US. 497, 499 (1954)) protect persons

only against deprivations of life, liberty or property. While

satisfaction of each of the many steps toward issuance of a

building permit (conceded by the District to be a property

right) is undoubtedly a useful milestone, Tri County offers no

authority for the proposition that an agency “ an

“property”

“Substantive” due process .

Tri County’s substantive due process claim is not

clear. In part the argument appears to be that the District’s

conduct was a taking of its property, unconstitutional because

it was without just compensation. Tri County says that the

District’s “illegal and actions” inflicted “financial

losses and delays” which in turn forced Tri County to aban-

don its plans and rendered the project “worthless.” See

Amended Complaint at 22. As to this claim, the District’s

ripeness defense is clearly sound. Under Williamson Cty.

Regional Planning Comm'n v. Hamilton Bank, 473 US. 172

(1985), a plaintiff advancing a claim for just compensation

under the Taking Clause must have pursued its administra-

tive remedies far enough to establish conclusively the effect of

the regulations; only then can the court determine whether

the impact has been draconian enough to make out a taking

without just compensation. Jd. at 186-97. As Cross’s ukase

of September 20, 1993 purported only to suspend Tri Coun-

ty’s permit, and Tri County sought no relief, it cannot be said

to have met this requirement.’

Alternatively Tri County appears to be invoking the more

nebulous branch of substantive due process, which in our

circuit requires the plaintiff to show “grave unfairness” by

state (or District) officials. See Silverman v. Barry, 845 F.2d

1072, 1080 (D.C. Cir. 1988). There is some authority under

which the very closeness of this claim to the taking argument

might be a ground for rejecting it. “Where a particular

Amendment ‘provides an explicit textual source of constitu-

tional protection’ against a particular sort of government

behavior, ‘that Amendment, not the more generalized notion

1 Insofar as a suit for damages for a regulation that “goes too far”

to be a permissible exercise of the police power is analytically

distinguishable from a suit for failure to supply just compensation,

see Williamson, 473 US. at 197, a failure to establish the impact of

the suspension is similarly fatal, id. at 198-200. Finally, there is no

claim for a “temporary taking.” See First English Evangelical

Inttheran Church of Glendale v. Los Angeles, 482 US. 304, 318

of ‘substantive due process’ must be the guide for analyzing

these claims.’” Albright v. Oliver, 510 US. 266, 273 (1994)

(quoting Graham v. Connor, 490 U.S. 386, 395 (1989)) (plural-

ity opinion of Rehnquist, C.J.). But in this circuit at least,

under Silverman, the requirements of the takings clause

cannot be said to exhaust the Fifth Amendment’s substantive

protection of property rights from government imposition.

See also Albright, 510 U.S. at 286-87 (Souter, J., concurring)

(noting that the Court has rejected the proposition that “the

Constitution’s application to a general subject (like prosecu-

tion) is necessarily exhausted by protection under particular

textual guarantees addressing specific events within that

subject (like search and seizure)”). We thus turn to the

District’s ripeness defense to the Silverman claim.

We identified in Silverman two ways in which a plaintiff

might show the “grave unfairness” that it requires. “Only [1]

a substantial infringement of state law prompted by personal

or group animus, or [2] a deliberate flouting of the law that

trammels significant personal or property rights, qualifies for

relief ...” 845 F.2d at 1080. A mere state law violation does

not give rise to a substantive due process violation, although

“the manner in which the violation occurs as well as its

consequences are crucial factors to be considered.” Commit-

tee of U.S. Citizens in Nicaragua v. Reagan, 859 F.2d 929,

944 (D.C. Cir. 1988).

process,

for nominal damages. See Carey v. Piphus, 435 US. 247,

266-67 (1978). This requirement is obvious enough in the

first formulation—“a substantial infringement....” And we

think it implicit in the second as well. Theoretically, the

reference to “trammelfling] significant personal or property

rights” might embrace trivial trammelling of an important

property right, but we think our clear intent in Silverman

was to confine the concept of substantive due process, itself

oxymoronic, see Gosnell v. City of Troy, 59 F.3d 654, 656 (7th

Cir. 1995), to actions that in their totality are genuinely

drastic. Although Williamson addressed only taking claims,

its logic appears to us ordinarily to apply to Silverman-esque

invocations of the due process clause: unless the victim of

government imposition has pushed its local remedies to the

hilt, it ordinarily will not be able to show the necessary

substantiality. Given that on its face the order of September

20 was only a suspension, and that Tri County failed to

pursue its apparent remedy under District of Columbia Mu-

nicipal Regulations § 12~-123.0 (allowing appeal of agency

action within a department and then to Board of Appeals and

Review), the claim must fail either for want of ripeness or on

the merits.

We thus affirm the district court’s dismissal of the substan-

tive due process claim.

Procedural due process

Setanenhtete meted Gna tte. Section

1983 explicitly treats the District of Columbia as a state, and

there is no doubt that Hampton Cross acted “under color” of

District law when he suspended Tri County’s building permit.

As noted above, the District concedes that the permit was a

property right.

The district judge believed that Cross’s act did not violate

the due process cause because it was a mere “interim suspen-

sion,” for which Cross had a “sufficient factual basis” and for

which prompt review was available. Tri-County Industries,

932 F. Supp at 7. We disagree on the adequacy of Cross’s

grounds, but, more pertinently, the central issue is the ade-

quacy not of his facts but of the process that he purported to

follow.

The District acknowledges that the D.C. Code makes no

provision at all for oral orders of suspension. So far as

suspension itself is concerned, it points to District of Colum-

bia Municipal Regulations § 12-118.1, which allows stop work

orders in the event that work on a structure is being per-

formed contrary to code or “in an unsafe and

manner.” Assuming that Cross’s act could be equated with a

stop work order (such as was issued two days later), the

Saeed Gasitatios tue eutd Gm nn be oumbean

Cross never claimed to have issued his pronouncement be-

cause of defects in the manner of Tri County’s construction—

and the sequence of events at the public meeting would have

undercut any such claim. Rather, Cross candidly rested his

suspension on Malone’s statement that a public housing pro-

ject would be built adjacent to Tri County’s site. The District

does not even suggest to us that there was some procedure

for summary suspension based on word of such a prospect.

Given this total deficiency, one might expect the District to

defend the due process claim on the theory that Cross’s act

was “random and unauthorized.” See Parratt v. Taylor, 451

US. 527, 541 (1981). Because the losses from such an act are

not the result of any state procedure, and because the state

cannot predict when such losses will occur, such acts are not

violations of the due process clause so long as there is an

adequate post-deprivation remedy. Jd. at 541-42; see also

Doe v. District of Columbia, 93 F.3d 861, 868-69 (D.C. Cir.

1996).

In this case, however, the District has not only failed to

argue Parratt but has explicitly thrown the point away,

“assum[ing], for purposes of

Compare Easter House v. Felder, 910 F.2d 1387, 1400 (7th

Cir. 1990) (en banc) (Parratt does

officials); id. at 1408-10 (Easterbrook, J., concurring),

Piatt v. MacDougall, TT3 F.2d 1032, 1036 (9th Cir. 1985) (en

test stated in Mathews v. El-

dridge, 424 US. 319, 335 (1976). The first step, of course, is

to identify the procedure, a matter normally accomplished by

looking at state (or District) law. In the case of a random

and unauthorized act, however, there is, by definition, no

licitly articulated procedure. Accordingly, the procedure

a be reverse engineered from the official’s act—how

might a procedure authorizing such an act have been stated?

(An advantage of the view that Parratt applies even to the

acts of high officials is that it renders this construction

project unnecessary.) -

Here Cross acted on the basis of an assertion by another

government official, made at a public meeting attended by the

representatives of the permit holder, that at some time in the

indefinite future there would be a greater population than had

formerly been expected near the site; thus more people were

likely to be affected by whatever air pollution the project

would emit once it was constructed and operational. He had

no formal evidence before him suggesting that the calcula-

tions on which his own agency had relied in issuing both the

environmental waiver and the air quality permit were un-

sound, with or without regard to the new (mis)information

about the supposed increase in the population affected. Even

summarizing this “procedure” most favorably to the District,

it appears to permit indefinite suspension of a building permit

on the basis of information about greater adverse impacts

than projected at the time the permit was issued, expected to

occur several years in the future, without any factual basis for

believing that the information, if true, would justify revoca-

tion of the permit.

But to call the suspension “indefinite” requires another

step—consideration of the speed of any post-deprivation hear-

ing and possible correction. See Barry v. Barchi, 443 US. at

61, 66 (suspension of horse trainer’s license without pre-

deprivation hearing unconstitutional because neither rule nor

practice applied to trainer assured timely post-deprivation

hearing); Cokinos v. District of Columbia, 728 F 2d 502, 503

(D.C. Cir. 1983) (car towing without pre-deprivation hearing

valid in light of assurance of prompt post-deprivation hear-

ing).

The District appears to provide two ways to appeal a

suspension by the Director. The first is District of Columbia

Municipal Regulations § 12-112.13, but the subsection enti-

Regulations § 12-123.1.2, which requires that an official with-

in the DCRA review actions against a permit holder within

three days and that the Director review any decision by that

probable value, if any, of additional or substitute

procedural safeguards; and finally, the Government’s

interest, including the function involved and the fiscal

and administrative burdens that the additional or substi-

ed an elaborate review of the air quality impacts of Tri

County’s project. Assuming the full truth of Malone’s state-

well as the possible mooting effect of the stop work order,

may be pertinent.

Thus, finding Tri County’s procedural due process rights

violated by Cross’s suspension of the building permit, we

vacate the judgment and remand the case to the district court

to consider the extent of Tri County’s damages.

So ordered.

[DE 67 - MEMORANDUM]:

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

TRI-COUNTY INDUSTRIES, INC.

Plaintiff, :

Vv. : Civil Action No.

: 94-2014 (JR)

DISTRICT OF COLUMBIA, et ai., -: FILED

Defendants. : JUL 25 1997

CLERK, U.S. DISTRICT COURT

DISTRICT OF COLUMBIA

MEMORANDUM

Plaintiff seeks compensation for the District of Colum-

bia’s unlawful suspension of a building permit that had been

previously issued to plaintiff for construction of a soil remedi-

ation facility. The theory of plaintiff's case, and the facts, are

recited in the Court of Appeals opinion reversing my order

granting summary judgment for the defendants and remanding

the case for a determination of Tri-County’s damages. Tri

County Indus., Inc. v. District of Columbia, 104 F.3d 455

(D.C. Cir. 1997).

At a status conference on March 14, 1997, the parties

were directed to submit memoranda on the amount of damages

plaintiff can establish, the legal justification for an award of

damages, the effect of the District’s defense of mitigation, and

the amenability of the record to resolving the case without

further evidentiary proceedings. The memoranda submitted

by the parties betrayed diametrically opposite positions on the

law.

1. Plaintiff takes the position that it is too late for

defendant to contest the claim of $9.8 million in damages —

made in its original motion for partial summary judgment,

because defendants failed to dispute the amount of damages or

to submit any proof of its own. That position is rejected.

Defendants were contesting liability, not the quantum of

damages, at the summary judgment stage.

2. Plaintiff further asserts that defendant did not

timely assert the defense of failure to mitigate and has filed a

motion to strike. The motion will be denied. Strict limitation

on the timing of pleading affirmative defenses is limited to the

defenses of lack of jurisdiction, lack of venue, and failure to

state a claim upon which relief may be granted. F.R.Civ.P.

8(c); F.R.Civ.P. 12. Other affirmative defenses may be

Taised by responsive pleading, such as an answer to an amend-

ed complaint, or by appropriate motion, including motion for

summary judgment. See Charpentier v. Godsil, 937 F.2d

859, 863, n.4 (3rd Cir. 1991). In any event, liberal amend-

ment of answers is allowed under F.R.Civ.P. 15(a). See

Federal Election Commission v. Legi-Tech, Inc., 75 F.3d

704, 707 (D.C. Cir. 1996).

3. Plaintiff has also moved for summary judgment on

the issue of failure to mitigate, arguing that the defense was

waived (it was not, as discussed supra); that plaintiff has no

obligation to initiate legal proceedings in order to mitigate,

relying on Robinson v. Camey, 632 A.2d 106 (D.C. 1993);

and that the District has failed to show that an appeal of the

building permit suspension would have been decided in a

reasonable time. That motion will be denied. The rule on

failure to mitigate damages is that plaintiff may not recover

damages for losses that could have been reasonably averted

after the suspension of its building permit. Tatum v. Morton,

562 F.2d 1279, 1282-84 (D.C. Cir. 1977); Minkoff v. Clark

Transfer, Inc., 841 F. Supp. 424, 430 (D.D.C. 1993).

Robinson , which held that a party’s failure to protect his or

her interest by filing a lawsuit does not constitute contributory

negligence and therefore is not a complete bar to recovery, is

completely inapposite. And plaintiff will not be heard to

argue that defendants failed to show that an appeal from the

suspension would have been resolved in a reasonable time.

Tri-County took no appeal at all, not did it take any step to

challenge the stop work order that was issued two days after

the building permit was orally suspended. See Pennzoil

Producing Co. v. Offshore Express, Inc., 943 F.2d 1465,

1475 (Sth Cir. 1991) (plaintiff's damages limited by the failure

even to request exception to environmental regulation, even if

exception would not have been granted).

4. The question of whether the stop work order issued

two days after the suspension order moots plaintiff's due

process claim (and bars recovery for all but nominal damages)

was suggested by the Court of Appeals but has been’ given

only passing attention in the parties’ briefs. The issue is not

presented for decision at this time, however.

5. The affidavit of plaintiff's environmental expert,

attesting that it is "probable" that from 1994-2000 Tri County

would have treated 75,000 tons of soil per year at $40/ton, is

insufficient to establish loss of profits with reasonable certain-

ty. See Story Parchment Co. v. Patterson Parchment Paper

Co,, 282 U.S. 555, 563 (1931); Samaritan Inns, Inc. v.

District of Columbia, 114 F.3d 1227, 1234 (D.C. Cir. 1997).

As the record now stands, any estimate of lost profits related

to Tri County’s soil remediation business, a relatively new

enterprise with no proven record of profits, would be based on

speculation. Country Club Assocs. Ltd. Partnership v. FDIC,

918 F. Supp. 429 (D.D.C. 1996).'

34 35

An order will issue denying plaintiff's motion to strike

and plaintiff's motion for summary judgment. No other

motions are pending. The defense theories of failure to

mitigate and mootness require a more developed record and

perhaps an evidentiary hearing. A status conference will be

set for the purpose of discussing how and when the necessary

record development is to occur. _

TRIAL TRANSCRIPTS & EXHIBITS -- CIV. NO. 94-CV-

2014 (D.D.C.)

Testimony of Karleen Donnells, Vice President of

Tri County Industries.

[DE 111, p. 78 -- Direct Examination]:

An appropriate order accompanies this memorandum. Q. Ms. Donnells, does Tri County remove for

treatment large quantities of soil that has petro-

it?

JAMES ROBERTSON A — ws

United States District Judge Q. Have you been able to determine on an annual

basis the amount/of such soil that Tri County

will handle?

A. On average, it’s been well over 60,000 tons per

year.

Dated: 7/24/97

[DE 111, pp. 95-96 -- Direct Examination]:

Q. What is Plaintiff's Exhibit 34? * * *

A. These are the T.A. Bennett Trucking Company

[invoices] for hauling of soil into the Bryant

Street facility.

Q. Do you know why soil was being brought into

Bryant Street?

A. We needed to perform a stack test with the new ~

machine for the air quality permit.”

Q. And what is Plaintiff's Exhibit 35? * * *

THE WITNESS: A summary of all the

payments to T.A. Bennett with the cancelled

checks. “_* *

Q. What is Plaintiff's Exhibit 36? * * *

Contrary to plaintiff's assertion, defendant’s challenge

to plaintiff's proof of lost profits is not an affirmative defense.

THE WITNESS: These are invoices from

TSC Transport. They also hauled soil to

Bryant Street. * * *

And Plaintiff's Exhibit 37? * * *

THE WITNESS: Summary of the payments

to TSC Transport and the cancelled checks.

[DE 111, pp. 100-01 -- Direct Examination]:

You have fringe benefits, 28 percent at the top

here. What are fringe benefits that you pay for

your employees?

Those are be [sic] the unemployment, the

federal and state unemployment taxes, Medi-

care, health and welfare benefits, holiday and

vacation pay.

And is that generally 28 percent of their pay-

check?

That’s correct.

And what about corporate overhead? What

does that generally include?

Corporate overhead is basically everything that

is not a direct cost to a job.

And is that at least 25 percent?

At least.

And look at Plaintiff's Exhibit 44. * * *

THE WITNESS: It’s a summary of all the

expenditures we just verified. * * *

For Bryant Street project?

Yes. “* *

This does not include the lost profit claim; is

that correct?

That is correct. These are all strictly direct

costs.

[DE 111, pp. 102-04 -- Cross Examination]:

O>O > OPO >O> OCPOPO> © > CO >

Ms. Donnells, I direct your attention to Plain-

tiff’s Exhibit 34. * * * And what is that exhib-

it?

. This is the T.A. Bennett trucking invoice for

hauling soil to Bryant Street.

Okay. And it is for hauling soil for what

period of time?

From -- well, from July of ‘93 to October of

‘93. x~* *

Okay. Let’s start with the first invoice. What

date was that for?

July 30, 1993. * * *

That was contaminated soi! on that day?

Yes.

Okay. And the next invoice?

August 13, ‘93. * * *

What is the next invoice? What is the date of

that?

August 27, ‘93. |

Okay. What was done on that day?

Hauling soil. From Hilton Hotel and Fairfax

schools.

Okay. How much soil was hauled on that day?

Eighteen loads on this invoice.

In layman’s language, what does 18 loads

mean?

You can average maybe, say, 20 tons per load.

Depends on where it comes from.

20 tons per truck?

Uh-huh.

Okay. And on September 13? You were

billed for transporting soil from where to

where?

Testimony of John Wegznek, certified public accountant

>O>O> O>

> OF OF OF OP O

From NIH * * * Bethesda. * * *

Bethesda. And how much soil was transported

on that day?

13 loads.

Okay. What is the date of your next invoice?

September 17. * * *

How much?

. Ten loads.

Ten 20-ton truckloads? Okay. What does your

next invoice say, ma’am?

September 24th. * * *

And how much soil was transported on that

day?

Ten loads.

Ten loads? And do you have additional invoic-

es?

I have one for October 8.

Okay. And how much soil was transported on

that day?

Eighteen loads.

Okay. And do you have any other invoices for

T.A. Bennett?

February and March of ‘94 invoices for hauling

soil away from Bryant Street.

[DE 113, pp. 113-14 -- Direct Examination]:

Q. Now, in this case, there was a soil cleaning --

piece of soil-cleaning equipment that Tri Coun-

ty intended to purchase which cost $600,000. *

* * Did Tri County and its principals have

sufficient cash resources to purchase this equip-

ment? * * *

THE WITNESS: Yes, they did. * * *

And what would have been the personal prop-

erty taxes on this equipment if it had been

purchased? * * *

* * * With a projected cost of $600,000 the

first year’s personal property taxes would be *

* * $17,850, I believe.

Now the lease that’s been introdyced into evi-_

dence for the -- for where the facility was to

operate on Bryant Street indicated that Tri

County had an option to purchase that property

from the landlord for $1,400,000. Are you

familiar with that provision in the lease? -

. Yes, lam.

Did Tri County and its principals in 1993 have

sufficient cash resources to purchase that prop-

erty?

Yes, they did. * * *

Testimony of Glenn Selzer, President of

. Tri County Industries

[DE 113, pp. 117-19 -- Direct Examination]:

Tell me what your company does.

The company does environmental services.

The majority of our work right now is centered

around the underground storage tank regula-

tions the EPA passed. We do a lot of under-

ground storage tank replacements * * *.

When you dig up an underground storage tank

that has leaked, what are you required to do

with the soil?

. The soils that -- around the tank in many cases,

the tanks have corroded. Oil has leaked into

the soil. The petroleum product, the gasoline,

or in most cases diesel fuel or heating oil has

mixed with the soil, and the whole goal of the

EPA regs is to protect the ground water. * * *

And what do you have to do with this soil?

. Well, we remove the soil that has been impact-

ed by the oil until we get to clean soil that

hasn’t -- hasn’t mixed with any oil. Then we

take it to a treatment facility to be treated.

[DE 113, pp. 120-21, 123 -- Direct Examination]:

Oo FF BD 2?®&

When did -- before Tri County actually started

this project on Bryant Street, did you have my

experience in soil cleaning?

Yes. We would have had the problem since

we got into this business. The problem we

have, though, is all the facilities that handle it.

Washington is a paper town; there is no real

industry here. So cities that have industry

obviously have more oil-impacted soil. They

have services there. We ended up having to

haul -- to this date, there is no place in the city

to take the stuff. We have to haul it to other

cities, Baltimore, Richmond, things like that.

In 1991, did you start a soil cleaning business?

Yes. * * * On New York Avenue, 1911 New

York Avenue. * * *

How long were you working at New York

Avenue?

We were there for probably several months. *

Was the equipment that was used there tested

by the District or in the presence of District of

Columbia officials?

> O>P

Yes, it was.

And was a report issued regarding that?

Yes, it was. We hired a company at the city’s

requirement to come and do what is called a

being emitted from the stack, if there are any,

and also measures dust and particulate. * * *

Did those tests pass the District of Columbia’s

requirements?

Yes, they did.

[DE 113, p. 125 -- Direct Examination):

POPFO

* * * (W)hat happened with the facility on New

York Avenue? Why did that not continue?

The site at 1911 New York Avenue was not

zoned for the industrial use that we -- that --

this plant was considered to be an industrial

there didn’t fit the use of this machine. We

had to find an industrial site.

Did you start looking for an industrial site?

We did.

And did you find one?

Yes. Sometime later we located a site at 2115

Bryant Street.

[DE 113, pp.127-33 -- Direct Examination]:

What equipment were you going to buy for this

project?

The -- the same we used on New York Avenue

from Dustco, the Gencor thermal absorption

unit. 7s *

What was the price of that?

POP OP

$600,000. * * *

How many employees would you need to oper-

ate this plant?

Five people.

And what would their duties be?

A supervisor plant operator, an assistant that

would help him run things, a loader operator

that would run a loader, heavy piece of equip-

ment to load the dirt into the machine, then a

couple of laborers to go around and sweep up

and keep things moving and just general labor

work

Q. How much would the salaries cost you for

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these employees?

About $50,000 a year for the supervisor; the

assistant would probably be $30,000. Machine

operator would make about $30,000 a year, the

guy that runs the loader. The laborers, that’s

$7 an hour.

How long would the plant be in operation?

We'd run six days a week, a shift and a half,

run 12 hours a day. * * *

In 1994, what was the cost on hauling?

It would run a dollar a ton. I base that on the

dump truck rentals, about $40 an hour. They

could go most places in the city in about half

an hour.

And then would you have to do lab tests as part

of the operational costs of this?

Yes, we would.

Why?

We’d do it in the initial -- like I mentioned

before, just to assure what we was bringing

over was just oil, oil that had leaked out of the

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tanks in the soil. No hazardous wastes were

there.

We would also do checks at the plant every

day to make sure the soil that was in there was

‘actually what the plant was -- we had identified

originally, brought in there.

Did your permit allow you to treat any hazard-

ous wastes at this facility?

No, it didn’t. * * *

Did -- how much would lab tests have cost?

About $35 each. * * *

How often, how many tests do you feel that

you would have been doing per day?

Probably four.

Does your company own a loader that it could

have used to put the dirt with petroleum into

this machine?

Yes, we do. .

And what about a mechanic to do repair work?

We also have mechanics.

On staff full time?

Yes.

Tell me what you do with the dirt when it

comes out of the machine with the petroleum

removed.

Once the clean dirt comes out of the machine,

we're * * * constantly digging up other sites in

the city where there’s tanks. We take the clean

dirt and use it to fill in those holes. Currently

we have to buy dirt, backfill material to back-

fill those holes with.

Q. *** [T}n 1994 how much were you paying for

clean fill dirt?

I'd say a minimum of $2 a ton.

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Have you estimated how much clean dirt you

would be able to resell coming out of this

cleaner?

40-, 45,000 tons.

Have you -- you’re aware of the production

rate of this piece of equipment; is that correct?

Yes.

How many tons of soil could you have cleaned

in a year with this machine?

About 75,000 tons.

And did Tri County have the ability to keep

this machine going full time with its own busi-

ness?

Yes. -

* * * [T]s there a certain amount of material

that the machine does not clean?

Yes. When you dig these sites up, you always

have the pavement that is over the top, con-

crei , some under sidewalks, curbs. You get

about 10 percent of the material that comes in

is not soil * * *.

That would still be charged to the customer?

The trucks are weighed by the ton. They pay

for all the tonnage on the truck.

started this project in terms of profit?

Probably $2 million a year.

And your permit was suspended by Mr. Cross,

“the director of DCRA, in September, the 20th,

of 1993. Do you recall that date?

Yes, Ido. Very well.

How much longer before your plant would

have been operational?

30 to 60 days.

What remained to be done?

. The gas line was pretty well down the street.

It was just about completed. We were moving

the equipment from the Midwest. * * *

What type of tests did you have to undergo for

the District before you could start receiving

soil?

. As part of the permit to construct the plant, the

environmental control division of DCRA, the

air quality section, Mr. Wamsgans’ office

asked us to perform an additional stack test like

we performed on New York Avenue.

. What do you mean by a stack test?

That is a test where we run the plant and run

soil through the plant, they hook up air-moni-

toring equipment all up and down the stack that

comes off the afterburner and meaSfire for any

contaminants or hydrocarbons, those carbons

that wouldn’t get remediated in the plant, and

also measures for dust, the amount of particu-

late you put into the air.

This was the same test, though, that had been

performed a year or two before on New York

Avenue on the equipment?

. He just wanted to make sure the machine was

operating as efficiently as there. * * *

[DE 113, pp. 135-39 -- Direct Examination]:

>O>

Before this suspension on September 20, when

he [, Hampton Cross,] suspended your plant

tom operation, had you received a ticket from

. We did. * * *

And what was that ticket for?

Operating without an occupancy permit * * *.

46 47

Q. Did you have a certificate of occupancy at that Q. Did you have the ability at any time to take

point? that dirt out of the facility or get a provisional

A. No, we didn’t. certificate of occupancy?

Q. Why not? A. Yes, we did.

A. In order to get the certificate of occupancy, we Q. Why didn’t you do those?

had to complete the requirements under the A. We thought the -- like I say, we were solving

permit to construct. the problem with Mr. Cross, that was the big

Q. When you were bringing the soil in, were you problem. We -- in other words, if we couldn’t

operating at that point? solve that problem, the other stuff didn’t make

A. No. That was * * * we brought the soil in to any difference. We could have paid the thing

burn for the stack test, which was part of the and still hadn’t done anything with the permit

permit to construct. We had to construct and suspended. * * *

test it before they would give us an occupancy . Why didn’t you appeal this decision?

it . Well, in consulting with Mr. Farmer [, Tri

Q. Did you pay the ticket? County’s counsel], he said the appeal * * *

A. No, we didn’t. would take at least a year and that * * * the

Q. How much was the ticket? appeal board was politically motivated, you

A. $500. * ** know, if there was public pressure, * * * that

Q. On September 22, after Mr. Cross had sus- it * * * wouldn’t matter whether it was legal or

pended your permit to do work on this project, whether our facility was what we said it was or

was the stop work order posted on your build- anything else.

ing? So basically we lose a year, and the -- at

A. Yes, it was. * * * that point, the project would fall apart. I

Q. At that point, why didn’t you pay the ticket and mean, the machine we had for * * * $600,000

have the stop work order removed?

A. Well, the -- if that was the only problem, it

would have been very simple. Just pay the

$500, whether we were wrong or right, and go

back to work. That wasn’t the real problem.

The real problem was Mr. Cross suspended

our construction permit, and we had no way of

knowing whether we were ever going to be --

you know, be able to continue with the project,

or if it was going to remain suspended.

would probably be sold to someone else by

then. We'd have to find a new one.

. Did you know where you could find a new

one?

A. No. We -- we knew manufacturers that made

them, but we hadn't -- we didn’t investigate

that at that point because of -- you know, the

Dustco machine was a used machine, so it was

probably less than half, or around half the cost

of a new one.

> ©

POP 0

If you had appealed, would you have had to

purchase the equipment?

Yes, we would have.

Why?

Like I said, Mr. Johnson at Dustco had other

people interested in it. * * *

Anyway, he had other sales for the

machine. He wouldn’t have sat around and

waited a year for us. He would have sold it to

somebody else.

What about the rent during the period of time?

Would you have had to continue paying rent

during an appeal time?

Yes. And the rent was substantial. Like I say,

it was $14,000 a month basically for this ware-

house and this property. * * *

It would have cost us a -- close to a million

dollars to appeal it in -- at the end of the ap-

peal, * * * if there was political motivation, we

would have lost that appeal and had to go to

the next step. Who knows how much more it

would have cost us?

What decision did you make then?

At that point, we decided that we couldn’t go

forward with that appeal. To -- in November,

we gave the property back to the owner.

[DE 113, pp. 145-46 -- Cross Examination]

Q. * ** And what is Plaintiff's Exhibit 34, sir?

A. This is bills from a trucking company, T.A.

Bennett Trucking Company, that did hauling

for us.

Q. Does that represent billings for soil trucked to

2115 Bryant Street?

POPO>

COPrOr ©

Yes, it does.

What are the dates of those billings, sir?

The first one is on July 30.

What period, sir?

1993. I’m sorry. August 13, 1993, August 27

of 1993, 9/10/93, 9/17/93, 9/24/93, and

10/8/93.

Okay. During that period, sir, did you have a

permit to operate the facility?

At Bryant Street?

Yes, sir.

No, we didn’t.

And weren’t you cited as a result thereof for

storage of soil without a permit, certificate of

occupancy?

We were cited for operating without an occu-

pancy permit.

[DE 113, pp. 166-68 -- Cross Examination]

O> O>FO>O>O

And did you receive that letter, sir?

Yes, I did.

Okay. And who wrote that letter?

Ferial Bishop.

When is it dated?

15 October 1993. * * *

And are there a series of questions that she

asks?

Yes, there is.

Okay. And at number 2, does it indicate that

she wanted to know the amount of soil you

processed per day at the facility?

Yes, it does.

And number 3, did she want to know the num-

ber of trucks in and out of the facility each

day?

Yes.

Number 4, did she want to know the proposed

routes of the trucks * * * through the neighbor-

hood?

Uh-huh. * * *

Contingency plans for any odors, if any?

°°"?

Mr. Selzer, did you respond to the letter?

With a phone call. * * * .

Mr. Selzer, you're not answering my question,

sir. I asked if you responded to this letter from

Ferial Bishop.

Prior to her sending it. * * *

Okay. My question is, did you answer the

letter?

This letter?

Yes.

No. *_* *

And you ignored the letter?

No. I sent it before they sent the letter --

during the permit application. They had all

this information. We went through vector

control for the rodents, through site plans, an

engineer’s site plans, surveys of the property,

sizes, all this -- exact questions were part of

the permit application. They had all this infor-

mation months before they sent the letter.

[DE 113, pp. 181-82 -- Redirect Examination):

Did the District of Columbia have a review

process that you had to undergo to get this

permit?

Quite extensive. We spent almost a year, a

good nine months, meeting with different

DCRA agencies and the city officials, even

Council Member Thomas’ office, and made a

presentation as to what was -- what the project

would do and how it worked and all the

technical review and measurements and proper-

ty lines, site drawings. Just an extensive,

tremendous amount of work.

Before the District issued you this building

permit, had you supplied them with all of the

information regarding your project that they

requested?

Yes, we did.

When you received the October 15, 1993 letter

requesting more information, was any of those

requests seeking information that you had not

given to the District already?

mm ees

. Did the District of Columbia have any right to

request additional information from you after

your permit had been issued?

. Our counsel advised us, no, that we had al-

ready complied with all the letters of the law in

obtaining the permit.

[DE 113, pp. 183-84 -- Court Examination):

THE COURT: For stack testing, you need-

ed 75 tons of dirt?

THE WITNESS: Yeah. Actually, what

happens when you first set the plant up to

perform the stack test, it’s when you first start

processing soil and they burn it, the bag house,

the stuff that takes the particulate out, not the

part that takes the oil out, but the part that

controls the dust from the dry dirt is almost

similar to a swimming pool filter where it coats

the filter before it starts operation.

You have to coat the bag house with dust to

burn soil for probably about an eight-hour

period to get everything coated and set up.

THE COURT: You have to run it for eight

hours before you can do it for three hours?

THE WITNESS: Before you can start

running soil for a test, yes.

THE COURT: So at 11 hours -- so that’s

three hours of testing and eight hours of prep.

That’s 11 hours.

THE WITNESS: Probably so.

THE COURT: At 25 tons an hour?

THE WITNESS: Yes.

THE COURT: That’s 275 tons?

THE WITNESS: Sounds pretty accurate.

THE COURT: About 15 dump trucks full?

14? 20 tons a truck?

THE WITNESS: Yes. Probably about 15

truckloads, something like that.

Testimony of Jonathan L. Farmer, counsel for

Tri County Industries

[DE 113, pp. 191-93 -- Direct Examination]:

Q. When Tri County’s building permit was sus-

pended on September 20, 1993, do you recall

that incident?

A. Ta, ten 2 e*

Would you tell the ladies and gentlemen of the

jury what you did?

A. I called Mr. Cross to ask him the circumstanc-

POPOPO

es by which the permit had been suspended and

exact reasons why. Mr. Cross indicated to me

that he had attended an Advisory Neighborhood

Commission meeting, that it had been a very

raucous and somewhat unpleasant meeting. I

think what he exactly said to me was the nasti-

est meeting he ever had attended.

There were questions about the permit and

its effect on the immediate neighborhood,

certain politicians were asking questions as well

about the permit, and that he was going to

suspend it for further investigation.

Did you request that he lift the suspension?

Within that same conversation?

Or anytime after that conversation?

Yes.

And what was Mr. Cross’ position?

Mr. Cross’ position was that it could not be

lifted. One, he had been directed that it was not

to be lifted. Two, they had discovered that

there were residences within a certain distance

of the building.

> OF 0

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Who -- did Mr. Cross indicate who told him

that it could not be lifted?

I believe the city administrator at that time.

Did you tell that to the client, Tri County

Industries?

Yes.

Did -- what did you advise Tri County Indus-

tries at that point they should do?

Basically, as I said, they had -- I think they

said they had a right to an appeal, but I indicat-

ed to them that that appeal would take-some

time.

Do you recall where that appeal would have

been directed to?

Board of Appeals and Review.

And is that the only appeal remedy that they

would have had in this situation?

Depending on the nature of the suspension, no;

it could have also gone to the Board of Zoning

Adjustment.

How long did you tell them it would take to

appeal to the Board of Appeals and Review?

Eight months to a year.

Did you make any recommendations to them?

I believe I said that was really a business deci-

sion or their choice at that particular juncture,

asking for direction.

* * * (CJould Tri County have filed a lawsuit

to set aside this suspension in a court rather

than an administrative appeal?

A. I don’t think you could have gotten to court

without exhausting the administrative remedy.

. What do you mean by exhausting administra-

tive remedies? Explain that to the jury.

A. You have to appeal to the agency directly.

You have to give the agency an opportunity to

address this situation before going to court.

Q. What happens if you file a lawsuit without

following through on your administrative ap-

peals before?

A. I assume it is dismissed.

Testimony of Alfred Dishian, business consultant

[DE 113, pp. 198-204 -- Direct Examination]:

> QPPO> © PO>

What experience do you have with soil-cieaning

equipment, Mr. Dishian?

Well, I worked for Gencor Engineers. * * *

What was their product line?

Their product line was low-temperature soil

remediation equipment and plants.

ans what was your position with that compa-

ny?

Business development manager. * * *

Did Gencor sell a mode] 232?

Yes, they did.

And what was the name or the number of that

model changed at any time? * * *

* * * I introduced a new numbering system, a

625/825, which meant temperature of opera-

tion, size of plant was a different nomencla-

ture, but essentially the 625 plant was the same

as the 232 plant. * * * 4

Why don’t you explain to the jury how this

type of equipment operates. * * *

. *™** So the soil comes in, very much -- and

is tumbled around like in your drier at home. *

* * The flame and hot gases pass through the

soil, heat it up, and drive off the petroleum oil

that’s in the soil and the moisture that’s with it.

The hot gases are pulled from this rotary

drum into a bag house, very much like a vacu-

um cleaner. * * *

Now the dust falls to the bottom here, and

there’s a screw which carries it out to another

mixer here, and water is put in it. The soil --

the hot soil comes from here and goes up to the

bag house.

Now the reason for this is that the hot soil

that comes out of here is clean, but the dust

that comes out of this end that goes to the bag

house may not be as clean. So what they do is

they take * * * the hot soil, and this is around

600 or 700 degrees, very hot, and they put it in

the bottom of the bag house, and there’s a

screw which pulls it all through the bag house.

Now * * * there’s a compressor that pushes

on the bags, and it drops the dust down on the

hot soil, going through here. And that mixing

dries off what little petroleum is left in the dust

and is sent out to a furnace. Just like a regular

furnace might burn all these gases.

The hot soil then is mixed with -- with the

dust and water is put in it, and then it becomes

a clean pile of dirt.

Now, the gases here go to that furnace over

here, where there’s another burner. The gas is

put in and is raised to approximately 1600

degrees Fahrenheit, which guarantees for the

length of time that this is sized for that the

gases coming out of here will be 99 percent

free of petroleum. That’s the way the machine

is designed. * * *

> Or OF OFOD O

I'd like to show you what's been marked as

Exhibit 47. * * *

What is the second page?

Are those the specifications that were in effect

in 1993 for the Gencor 232 or 625 units?

Yes. Yes.

And are those specifications accurate in terms

of the capability of the equipment?

Yes. * **

What is the amount of soil that this piece of

equipment can treat?

Well, it has a nominal capacity of 25 tons an

hour. It varies depending upon the amount of

moisture that’s in the soil. * * *

How high can the capacity -- or the treatment

rate go?

A. Well, at 6 and 8 percent moisture, you can get

almost 40 tons an hour out of the machine. * *

* * * [C]an you tell us how many employees it

normally takes to operate this equipment?

A. * * * I would say there’s three people at a

minimum.

If you had a qualified mechanic, what would be

the repair parts and costs for that on an annual

basis for this type of machine?

. Well, the parts, I would say if you -- usually

you run through the bags. Like I said, there

are 232 bags in the bag house. And you usual-

ly run through one of those sets of bags in a

year’s time. They cost $12,000 to $14,000.

Other incidentals that -- belts for the pulleys

and bearings and so forth, electrical compo-

nents, I would raise that up to $18,000 to

_ $20,000 a year in parts alone * * * for a single

shift operation. If you operate the machine two

shifts, then, you know, you're gojng to get

more wear.

[DE 113, p. 214 -- Cross-Examination):

Testimony of Donald G. Carter, consulting engineer

Would you agree that there is some -- there are

some health risks associated with the handling

and processing of contaminated soil involving

gasoline products? * * *

No more than filling up your ¢ car with gasoline.

[DE 113, pp. 223-27, 230 -- Direct Examination]:

PO?

MR. EMIG: Your honor, at this point, I

would move the Court to recognize Mr. Cross

[sic] as an expert in the field of mechanical

engineering, energy, and the cost of energy

MR. BOLDEN: I have no objection.

THE COURT: All mght.

BY MR. EMIG:

* * * [Djo you have an opinion as to the

annual utility costs that Tri County would have

incurred if it had operated a soil-cleaning facili-

ty at 2115 Bryant Street?

I do.

And what is that opinion?

It was expressed on my spreadsheet, without

memory of the numbers, it is my opinion of the

POO

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would apply to the equipment that was going to

be applied at that project.

Will you look at Plaintiff's Exhibit 52. * * *

Is that, in fact, your sheet?

Yes, sir. This is the sheet.

Okay. Now when you prepared that, what did

you rely upon?

Manufacturers’ data for the equipment in ques-

tion. * * *

Okay. What else did you rely upon?

* * * So I relied on the information given me

by the man with Washington Gas who does that

or did that, and he provided me with the exact

information I needed. * * *

Look at Exhibit 51, please. * * *

What is that?

. These are the gas rates for commercial, prima-

ry, and high voltage service, or for secondary

service. In this case, that sheet is the second-

ary service as one would pay.

You said gas rates.

I mean electricity. * * *

. *** The system could do 20 tons of soil per °

hour. *“* *

305 days in a particular year would have no

holidays and no Sundays, but it would be those

same six working days without holidays or

Sundays that were at stake. There would be 12

hours of work per day. We would add to that

a half an hour of warmup time at 10 percent of

the fuel consumed to bring the equipment up to

temperature before it began working.

-_*-o =

Testimony of Vincent DiRenzo, environmental consultant

[DE 113, pp. 238-39, 240-44 -- Direct Examination):

> ©

0 > O> O>

Which treatment facilities in this area do you

normally deal with?

Presently there’s really only two that are

remaining. TPS out of Baltimore, and also

Bardon, which operates a facility in West

Virginia.

Do they have any in Virginia?

No. I don’t think there’s any thermal! treatment

units in Virginia anymore. * * *

MR. EMIG: I offer Mr. DiRenzo as an

expert in the field of remediation of soil with

petroleum content.

THE COURT: Any objection to that?

MR. BOLDEN: No objection

THE COURT: All right. * * *

Did you at my request do an analysis of the

costs in the Washington metropolitan area to

thermally treat soil with petroleum in it during

the period 1994 to the year 2000?

Yes, I did.

Did you prepare a report that reflects what

those costs were?

Yes, I did.

Look at Exhibit 54, please. * * *

BY MR EMIG:

When did you prepare that report?

The document is dated March 24, 1995. That

seems the timeframe is correct. * * *

Did you have an opinion as to whether in 1994

there was a need in the Washington area for a

POP

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thermal treatment facility to clean petroleum

soil? *~**

That there was a definite need.

Why do you say that?

We had numerous projects going on at that

time. In addition to the market itself, any -- or

most of the construction projects within the

D.C. metro area generally require excavation

of the materials within the area that they are

building, ‘cause they’re putting parking garages

or that’s part of the design.

Because of that, in the Metro additions, a

lot of the construction projects were generating

a large volume of contaminated materials at

that time. * * *

And did you since that report, since there was

some time between when that was prepared and

when we came to trial, did you have occasion

to update your report?

Yes, I did.

. And tell us what you did for that.

Basically what we did was we went back and

resurveyed because there had been -- since we

had done the initial survey, there had elapsed

quite a bit of time, and there had been a lot of

change in the marketplace. So what we did

was reevaluated, spoke to the disposal facilities

that exist now, which are much less, and then

just basically redid and justified the pricing

again.

And do you have a copy of that report?

Yes, I do.

Is that attached at the end of Plaintiff's Exhibit

54?

Yes. That’s my letter dated March 30, 1998.

>O>

And tell the jury what your opinion is in terms

of what the market rate would have been for

thermal treatment of soil with petroleum in it

during the period 1994 to the year 2000.

. Sure. Basically, for all of 1994, again, we

were looking at $40 a ton; in 1995, we were

seeing a decrease, basically about $2 a ton to

$38 a ton. Then in 1996, basically we differ-

entiated part -- two halves of the year because

there was quite some change. It dropped again

by $2 to $36.a ton. By the end of 1996, it was

down to about $34 a ton, averaging for the

year about $35 a ton for the year 1996.

Then our projection from 1997 through

2000, some of which we had information on

‘97 and also in discussing with -- updating the

thermal treatment facilities in that market --

that are within the D.C. market, we came up

with $32 a ton.

Do you know if these rates in¢luded transporta-

tion to tie facilities?

They did.

Do you have an opinion, Mr. DiRenzo, that if

Tri County Industries had opened a soil treat-

ment or soil-cleaning facility in 1994 if there

would have been sufficient petroleum soil so

that it could have treated 75,000 tons per year

from 1994 to the year 2000? “a

. I feel very confident it could have.

Why do you say that?

. Just because of the amount of projects. Again,

to the construction, the whole Metro line that

went through, as well as all of the additional

construction projects -- and most of these are

just federal based -- involving large amounts of

contaminated soil being so close within the

District of Columbia made it just very advanta-

geous. It would have for us, and we did dis-

pose of contaminated soil at that time.

MR. EMIG: Your Honor, I move for the

admission of Plaintiff's 54.

MR. BOLDEN: Your Honor, I would

object to the report.

THE COURT: I don’t think we need Ex-

hibit 54 because * * * you have his opinion on

the * * * dollar cost per ton per year. You

have his opinion that there is enough soil to

satisfy 75,000 tons per year. I think those are

the basic opinions you need. The report is

unnecessary, and I’ll sustain the objection.

[DE 113, p. 253 -- The Court]:

THE COURT: You said there is no reme-

diation facility or soil-burning facility in Vir-

ginia?

THE WITNESS: Well, there wasn’t. A lot

of it was landfilling or other types, bio-reme-

diation, but the actual thermal treatment pro-

cess, there was not. .

THE COURT: Never was?

THE WITNESS: There was one with

Enviro-Care for a short period of time.

THE COURT: What happened to it?

THE WITNESS: They eventually lost their

permit, and I think it was never -- once it

expired, I don’t think it was allowed to be

reactivated.

THE COURT: What was the facility re-

ferred to in your report that attempted to gain

tes

a larger portion of the market by reducing gate

prices below cost and had to be sold at a loss

as it could no longer make payment on an

incurred debt?

THE WITNESS: That was a facility in

Baltime ze. Again, they came into the market

when there was a lot of construction activities

and tried to really lower the price of their -- I

guess to try to get into the market. Basically

within a year, they were out of business.

Deposition Testimony of Larry Johnson

[DE 113, pp. 7-16]

>O> OF OF OF

And how long have you owned these Gencor

232s?

Since 1990.

Are you familiar with the operation of these

pieces of equipment?

Yeah. ~* *

Do you supervise the operation of these pieces

of equipment?

Yes.

Are [sic] they produce any excessive noise or

odor or smoke when they are operated?

No. “~“* *

And what about dust or smoke?

There is no dust and there is no smoke. The

only thing we have is steam comes off the hot

soil on the discharge end. * * *

And is there any odor produced by this pro-

cess?

No. x* *

O> O> O> ©

Okay. Are you familiar with the soil treating

capacity of this particular Gencor 232 unit?

Yes.

How many tons of contaminated soil will it

treat per hour?

25-40.

How many people does it take to operate this

particular model?

A minimum of three per shift. * * *

What percent, based on your experience, of

soil that it brought into your facility does not

have to be treated because of its larger size?

10 to 25 percent.

Testimony of Joel M. Morse, professor of financial

economics

[DE 113, pp. 259-66 -- Direct Examination):

oO,

Do you teach valuation of new businesses to

your students?

Yes. Essentially, a new business is part of the

curriculum in corporate finance as well as in

investment analysis.

A new business is really a prospective or

forthcoming set of cash flows. As such, I

routinely teach that to people who are out there

doing that stuff, and I have done it as a consul-

tant; and I both teach and learn from my stu-

dents who are practitioners of this art. * * *

Have you testified or prepared opinions on the

issue of lost profits of new businesses before?

Yes, I have.

And can you indicate when that would have

taken place?

oO,

Well, I’ve done that from time to time on and

off in court since 1988. I would say it happens

at least once a year, probatly more often. * *

Is there anything that makes valuation of new

businesses too speculative for you to reach a

valuation figure?

. To value a new business is an established part

of discipline I teach in the graduate program at

the University of Baltimore. We wouldn’t

teach it if it were speculative. We believe it’s

a natural part of business decision-making

which is to go into new ideas, new ventures

and new areas.

MR. EMIG: Your Honor, I offer Dr.

Morse as an expert in the field of financial

economics.

MR. BOLDEN: No objection. * * *

THE COURT: No objection? All right.

Dr. Morse may give opinion testimony in this

field.

BY MR. EMIG:

Did you at my request do an analysis and

prepare a report regarding the lost profits that

Tri County Industries sustained when its build-

ing permit was suspended by the District of

Columbia?

Yes.

And for what period of time did your report

include?

. The year began in 1994 and continued through

the year 2000, so some of those lost profits are

past and some are future. * * *

. Yes. [Exhibit] 56 is my report in this matter

dated April 1995.

oO,

And did you arrive at an opinion in terms of

how much Tri County Industries lost in terms

of profits during the period 1994 through the

year 2 “* *

That amount was $11,628,174. * * *

The information that you received regarding the

costs and the profit -- or the costs and the

revenues for this project, was that the type of

information an expert in your field reasonably

relies on?

Yes. *“_* *

Let me ask you one question. The revenue

figure on which you base your figures, were

they provided by Mr. DiRenzo of Apex Envi-

ronmental?

A. Yes.

[DE 113, pp. 272-73 -- Direct Examination]:

* * * So I’m working here in a model of reve-

nues minus costs, which I feel is a traditional

model and a traditional way of looking at the

prospective or possible profitability of a new

venture. So, for example, in the year 1994, I

estimated that revenues would have been

$3,367,500. From that, I took away the cost

of doing business. * * *

I subtracted the cost line from the reve-

nue line. So, for example, this number here,

$2,031,592, is really easy to get at. All I did

was take $3,367,500 and take away from it or

subtract $1,335,908; and I got as a result, or as

an answer, $2,031,592.

[DE 113, pp. 276-77, 279-81 -- Cross-Examination]:

o> O>

oO,

As I understand your testimony, Dr. Morse *

* * you don’t have expertise in the soil remedi-

ation field; and in putting together your num-

bers, you relied upon reports and numbers put

together by other persons in the field; is that

correct?

Yes.

And your opinions then piggyback on the opin-

ions of other experts retained by Tri County in

this litigation?

Yes. x** *

* ** Did you independently look at the profit-

ability of the companies that had been surveyed

in Apex’s report?

No. x«* *

Then is it true that you made no assessment as

to whether the companies that are indicated in

this report prepared by Apex were start-up

companies?

. That’s correct. * * *

* * * Wouldn’t it seem reasonable that you

would compare your profitability statement

based upon a company similarly situated to Tri

County, one that was new to the field, one that

had no prior experience or training in the field,

and one that, for all intents and purposes, was

nonexistent?

. Well, that last sentence throws me for a loop.

If it’s -- I cannot compare anything with a

company that you said was nonexistent.

Hold on a minute. You can compare it, then,

to a new company in the field?

A. What I have done is common to my field,

which is to estimate the costs and the revenues

for a new venture using data that’s knowledge

-- data and knowledge in that industry. And I

relied on -- and I was asked to rely on -- the

report we are now discussing from Apex.

I was not asked to do the ideas that you are

now suggesting, and I did not independently

believe that to do so would be either possible

or appropriate.

[DE 113, pp. 284-85 -- Redirect Examination]:

Q. Dr. Morse, do you have any indication that any

of the information you relied upon in the prepa-

ration of your estimate of damages was either

wrong or incorrect?

. No. * * *

THE COURT: Dr. Morse, your projection

for the first year of operation of this business

shows roughly $2 million of profit -- is it fair

to call it profit?

THE WITNESS: Yes.

THE COURT: -- on $3 million of sales.

Do you have a measure of how profitable that

enterprise is?

THE WITNESS: That's a very profitable

enterprise, if that’s what Your Honor is getting

at. ** * This * * * would have been * * *a

very profitable business. Are you asking if

that’s an unusually high profit margin?

THE COURT: * * * How would you de-

scribe, how would you quantify that profitabili-

ty?

70 ‘

THE WITNESS: That would be a profit

margin well in excess of 50 percent.

THE COURT: And what woyld you say

the return on investment would be?

THE WITNESS: Well, I have not -- that’s

a good question, sir. I have not been provided

with the capital costs in their entirety. I’ve

been provided with estimates that I believe

were dignified [sic] of the revenue and the

costs.

To the extent that I looked at capital, I

annualized it or I annuitized it. That would be

the land value and the equipment value. * * *

So looking at the profit as a percentage of

capital, you still would see * * * an extremely

profitable business which has been discussed

today.

Deposition Testimony of Harry Thomas:

[DE 113, pp. 286-88]:

"Question: Mr. Thomas, you are a member

of the D.C. Council representing Ward 5; is

that correct?

"Answer: Yes, I am. * * *

"Question: You are ‘algo chairman of

certain committees; is that cosrect?

"Answer: Chairman of the Public Works:

and Environment. * * *

"Question: Did you or your office have any

contact with DCRA after this meeting, and I’m

talking after September 20, 1993, regarding

this project?

"Answer: Officially, I don’t think we had

any. * * *

"Question: What about unofficially?

“Answer: I might have seen Hampton

someplace and said to him that because of

opposition we had some problems there. * * *

"Question: But you did indicate to him that

you were opposed to this project going for-

ward?

"Answer: I made that loud and clear."

Deposition Testimony of Hampton Cross:

[D.E. 113, p. 290}:

"Question: You indicated earlier, Mr.

Cross, that you had a conversation with the

mayor’s Office following the September 20

meeting. Who was that with?

"Answer: That was with Mayor Kelly. It

was with Mayor Kelly. It was a meeting.

"Question: Who else attended that meet-

ing?

"Answer: Two or three, I don’t recall how

many, I don’t even know if you call them

representatives. Two or three members of the

community, who lived in the community

around the Tri County facility, and also Claude

Bailey, v= Sa ales tate

sel attended the. meeting.

Deposition Testimony of Francine Howard James, Execu-

tive Officer, D. C. Board of Appeals and Review:

[D.E. 113, pp. 294-95}:

“Question: What is the purpose and func-

tion of the board?

"Answer: The purpose of the board is to

hear appeals from aggrieved citizens who are

dissatisfied with final decisions and orders that

they receive from the Department of Consumer

and Regulatory Affairs * * * .

[DE 113, pp. 309-23 — Argument of Counsel]:

MR. EMIG: * * * [Wyhat concerns me is

evidence -- of him coming in with evidence that

their neighbor -- there are houses in the vicini-

ty. That's very prejudicial when he can’t tie

that in to any basis for having the permit sus-

pended, Your Honor. I think he’s just playing

on the prejudices and concerns that really got

this project sidetracked in the beginning. I

mean, I think he needs to establish there were

some grounds.

THE COURT: Well, where are we going

here, Mr. Bolden? What are you going to

prove? Or try to prove?

MR. BOLDEN: Well, our case in part is

that the project would have been suspended

anyway or that the project would not have gone

forward for various reasons. * * *

THE COURT: Like what reasons?

MR. BOLDEN: Well, one very obvious

reason is that there were health and safety

concerns that Hampton Cross had, as well as

the community had, which impacted on the

health and safety of that community. * * *

We -- again, in terms of Carey versus

Piphus, that’s our case, that the project would

not have gone forward for various reasons. * *

THE COURT: * * * You mean there is

going to be another whole layer of approvals?

MR. BOLDEN: We're not saying a whole

layer of approvals, but certainly any project

which presents a health risk or a danger doesn’t

have carte blanche to operate. There has to be

a process by which * * * adjustments are

made. -_* *

THE COURT: Given the Court of Appeals’

ruling -- and I think Mr. Emig is correct to this

extent, that the Court of Appeals has ruled that

the suspension order was unlawful -- by what

procedural means or mechanisms could or

would the District have acted to take that sec-

ond look once you -- understanding that it

already had issued am [sic] air quality permit

and a building permit?

What additional permits were necessary?

MR. BOLDEN: Well, first of all, Tn

County had no permit to do business there.

THE COURT: Right.

MR. BOLDEN: Hadn’t applied for it.

Hadn't been granted. So it still had to go

through the -- the panoply of inspections by

various entities of DCRA.

THE COURT: Can you be a little more

specific about this? I mean, this -- what did it

need? What permit, what precisely -- precisely

what permit did it need?

It had a building permit. It had an air

quality control green light. What permits did

it need?

MR. BOLDEN: It did not have a certificate

of occupancy.

THE COURT: All right.

MR. BOLDEN: Which permitted it to do

business.

THE COURT: Is there any discretion on

the -- in the board -- or whoever the issuing

agency is -- to issue a certificate of occupancy

if the building conforms to the building permit?

MR. BOLDEN: Well, there are inspections

by various entities, including the fire depart-

ment, zoning, electrical department, so there’s

still a range of inspections that had to * * *

undergo.

In addition, the equipment that Tri County

proposed to use had to * * * undergo a -- an

additional round of emissions tests, under the

air quality permit. They couldn't -- they could-

n’t do anything with that permit until they

brought the equipment here and tested it.

THE COURT: Okay.

MR. BOLDEN: The equipment had not

been physically at 2115 Bryant Street. It had

-- the initial approvals are based on a 1991

stack test on New York Avenue.

THE COURT: Okay. Fine. But electrical

tests, fire code tests, stack tests -- assume with

me -- and I think it’s fair to assume that Tri

County would pass all those tests * * *. I

mean, if they didn’t, that’s another round. But

you’re talking about new concerns about health

and safety issues.

Now, unless the District of Columbia were

to change the standards for stack gases and

particulates, which they had not done, then I

think we have to assume that the machinery

would pass the same air quality test on Bryant

Street that it had passed on New York Avenue.

Now, what different -- what areas of health

and safety does Siess say would now be raised,

and how except for a certificate of occupancy

would they be raised? What other permit did

they need?

MR. BOLDEN: Your Honor, there’s a

whole area of handling of this material, and it

had to be handled in such a way that it protect-

ed the community. There had to be plan{s] for

transporting it through the community. There

had to be plans for -- there had to be some way

of overseeing how this material was -- passed

through the community.

It turned out later on that there had been

misrepresentations in the initial application

concerning where the residential houses were.

I mean, all of that had to be dealt with, which

is why there was the issuance of this October

15 letter concerning information that was need-

ed.

THE COURT: Do you disagree with this

gentleman’s testimony that everything asked for

in that October 15 letter had already been

provided to the District? * * *

MR. BOLDEN: Yes. I disagree. I don’t

agree.

THE COURT: * * * I share some of Mr.

Emig’s concern about your wa[]ving a lot of

health and safety concerns in the community as

if health and safety concerns would ultimately

doom this project.

You haven’t given me an answer that I find

acceptable yet to the question of what legal

mechanism would have stopped this project.

The health and safety concern question,

obviously we'll have experts on both sides of

this. We have experts on both sides of any

question. But we already have one man who

says this is like working in a gas station.

You don’t believe that. * * *

I will say, however, Mr. Bolden, that it is

conceivable that after hearing the testimony of

a witness expressing generalized health and

safety concerns, it is conceivable that I will

hear the testimony and strike it.

I thought that your Carey and Piphus show-

ing would be a much more targeted showing to

the effect that it is established District of Co-

lumbia -- for example, it is established District

of Columbia law that a building permit and an

air quality control permit don’t cut it; that a

certificate of occupancy doesn’t cut it; that

there’s another permit required under estab-

lished D.C. regulations, and that permit is

called an operating permit. And that under

District of Columbia law, before Tri Cowuty

could obtain an operating permit, it had to

make a new showing on the basis of plans, et

cetera, et cetera, that there would not be any

deleterious effect on the health and safety of

the population. And these are the established

Standards and it is clear from the record that

Tri County could not have met these estab-

lished standards.

Now if you can make that kind of showing,

make it * * *,

[DE 112, pp. 337-41 — Ruling of Court on defendants’

motion for judgment as a matter of law]:

THE COURT: * * * Now, the future earn-

ings case, I think, is a much more difficult one.

It seems to me that what is missing from this

record -- but I’m going to consider it further --

seems to me what is missing from this record

is evidence that -- is evidence of the market for

processing all this soil.

Now, I know there’s an expert who said,

"Oh, yeah, there’s enough soil around here to

bring 75,000 tons a year." Sure, there’s plenty

of soil around; but you need more than soil,

you need some established position in the mar-

ketplace.

This -- there’s nothing in the calculations of

any of these experts that there’s any buildup.

This company is going 75,000 tons a year from

day one of these calculations, all the way

through, full capacity. No evidence about how

he gets there, how he markets it, how he’s

going to make this thing run. And the expert

-- the financial economist conceded that the

profitability figure for this company is extraor-

dinary.

It looks very speculative to me. Now, I’m

going to consider this further between now and

the time this case goes to the jury. I’m not

sure I’m going to sent the future earnings

question to the jury. If I do, however, it will

be with the same ruling that I’m making now,

which is to -- which is the conditional ruling

that Rule 50 requires.

I’m denying the defense motion for judg-

ment as a matter of law, conditional on its

being renewed at the close of all the evidence;

and, if I send these issues to the jury, condi-

tional on it being renewed again after the ver-

dict.

I think there is a hinge here somewhere

between the past -- between the money that Tri

County sank into this enterprise of $600,000

and future earnings. The hinge has something

to do with mitigation. It is one thing to say, as

Tri County does say, it would have cost us a

million dollars to save $600,000 because we

would have had to buy the equipment and wait

out an appeal.

That’s perfectly understandable and maybe

a complete defense to the mitigation claim with

respect to the monies that were spent and lost;

but for Tri County to make that decision, walk

away from this, and then go for all of the

future earnings without sinking the money into

the appeal and going the next step to mitigate

or to hang in there in a way that would permit

them to pursue future damages may -- I say

"may," because I’m not ruling at this time --

may as a matter of law mean that they’re not

entitled to future profits.

So my view of the future profits question at

this point is that the evidence -- although I have

to say, Mr. Emig, you did a very careful work-

manlike job of putting in all the elements of

that spreadsheet. Still what you have is a

spreadsheet; you have a pro forma, without, it

seems to me, very good proof either that the

company could actually start up and do it or

that there was a market for the numbers in the

spreadsheet. And secondly, as I say, I’ve got

this problem with mitigation. * * *

There’s a line in your expert’s report about

how the competition is driving down the price

per ton until it just covers operating costs.

MR. EMIG: Uh-huh.

THE COURT: And that that has driven one

of the competitors out of business because he

tried to take on too much. He didn’t cover his

operating costs.

Your numbers do a lot more than cover

operating costs. They cover operating costs

and return a profit of over 50 percent.

MR. EMIG: Right.

THE COURT: There’s a query whether

_ your own evidence establishes that you really

have a market-competitive product here. So I

hear you. Tri County digs the stuff up itself,

trucks it someplace.

MR. EMIG: That’s right.

THE COURT: Whether it can -- whether it

can sell its own services at that price and deliv-

er that profit is another question that I don’t

really think is what -- I think what I’m inclined

to do is to let the jury decide how speculative

that is and then go back and look at it with the

luxury of a little hindsight and determine -- and

if they -- if they think it is not too speculative,

then, of course you have a leg up, but then I

will have to decide how speculative it is as a

matter of law and whether they should have

had the case in the first place.

Testimony of DCRA Inspector Juan Berrayarza

[DE 112, pp. 342-47 -- Direct Examination]:

I am employed by the District of Columbia as

a zoning inspector for 27 years. * * *

I direct your attention to what’s been marked as

Defendant’s Exhibit 1. * * * What is that

document, sir? * * *

. This is a citation that was written on the pre-

mises of 2115 Bryant Street, Northeast * * *

on the 7th of September, 1993. * * * I was

there because my supervisor at that time, he

sent me to make an inspection * * * based on

complaints from the neighborhood that --

MR. EMIG: Objection.

THE COURT: Sustained. * * *

So I gave a full account of my inspection.

All right. The building had been occupied

as an office on the front, and in the back was

a building that was a big room that was full of

soil, a big pile of soil. So I get in there and

I’m trying to take a picture of the soil, you

know, because my Polaroid camera and the

picture never came out because the room was

so dark.

So when I was there, I had some eye irrita-

tion because the fumes, the stink was coming

out from the soil.

THE COURT: Overruled.

BY MR. BOLDEN:

Okay. When you went to the premises, what,

if anything, did you do?

A. So I got -- because the door was opening and

I’m trying to see what was there. It was --

there was nobody in the building because the

office had been locked.

a Did you -- did you draft that citation,

sir?

A. Yes, sir. I wrote the citation when I went back

to my office to check on all the records to see

if there was a certificate of occupancy for this

use, and I couldn’t find anything in the file.

So I proceeded to write a citation on the --

based on the regulation of the D.C. Code. * *

* That regulation was 3203.1, building occu-

pied, industrial soil remediation business with-

Out a certificate of occupancy. * * *

What is a certificate of occupancy?

There is such a certificate that the zoning regu-

lation required to have use of any property in

D.C., any other use, or single-family dwelling

is supposed to have a certificate of occupancy

in the city. That’s the regulation. * * * With-

Out certificate of occupancy, there was subject

to a fine. * * *

Q. Okay. And what does the citation require that

Tri County do?

A. Well, they must have it on file in order -- well,

they -- they -- right to operate the business

until all the inspection has been performed, you

know. They had to have a building inspection,

plumbing, electrical, zoning, fire. They were

in -- when they responded, has been approved,

they can obtain a certificate of occupancy after

" Por O

O> O>OP>O> © P C

paying for the fee. They can operate the busi-

ness. xx *

Was there a fine associated with that citation,

sir?

There was a fine.

$500 fine?

Yes, sir.

112, pp. 348-50 -- Cross-examination):

Isn’t it correct that Tri County could have paid

that ticket for $500; is that true?

They should have been paying after all these

years.

They could have at any time paid that ticket; is

that correct?

Correct. .

Now the second question I have is this.

Uh-huh.

They could have either removed the soil --

That’s right.

-- or they could have gotten a certificate of

occupancy?

Correct. * * *

Either of those two things plus payment of the

ticket would have resolved this entire problem;

is that true?

Exactly.

Now, you get a certificate of occupancy * * *

when you complete your renovation on the

building?

That’s right. * * *

You go out and you look and you make sure

that all of the work that they say they’re going

QO FP OP

to do in their building permit application has

been done correctly?

Exactly.

That’s all? Then you get your certificate of

occupancy; that true?

Correct, if they comply with the zoning regula-

tion.

Well, they wouldn’t have gotten the -- if they

weren't in compliance with the zoning, they

wouldn't have gotten the building permit in the

first place?

Right. That’s right.

Testimony of DCRA Inspector Phillip Thomas

[DE 112, pp. 351-55 -- Direct Examination]:

>O>

I’m a construction inspector with the District of

Columbia. * * * The Department of Consumer

and Regulatory Affairs.

How long have you been employed with the

— of Consumer and Regulatory Af-

. 16 years, sir. * * *

Directing your attention to the month of Sep-

tember 22, 1993, did you limve an occasion to

visit 215 [sic] Bryant Street, Northeast?

. Ra eee

What did you see?

I saw someone was storing a lot of soil in the

building. * * * There was a gentleman |

spoke to. * * * I asked him who’s in charge.

He said his boss was not there.

BY MR. BOLDEN:

Did it appear he was working there?

POP OPFOP

> ©

He was working there, sir.

What was he doing, sir?

He was by the weight station.

On that day, what, if anything, did you do at

2115 Bryant Street?

I was told to issue a stop work order.

Why was that, sir?

Because there was no CO for the job, what

they were doing on the site, sir.

THE COURT: Was no what, sir?

THE WITNESS: CO, certificate of occu-

pancy for the building.

BY MR. BOLDEN:

What is a certificate of occupancy, sir?

Sir, in the District of Columbia before you --

before you could use a building for any busi-

ness, you are supposed to have a certificate of

occupancy.

And did you notice or did you observe whether

the building was being used for business?

A. It was being used for business, sir. * * * Sir,

>O> ©

I saw that -- the dirt, I saw the weight station,

the guy was in the weight station there. * * *

I show you what has been marked as Defen-

dant’s Exhibit No. 5. * * *

It’s a stop work order for no CO.

Okay. And did you sign that document, sir?

Yes, sir. * * * I served a copy of the stop

work order to the gentleman. I gave it to him

and instructed him * * * he could appeal the

stop work order. I said, from now on you are

stopped from what you are doing here. I said,

you could appeal the stop work order by talk-

ing to Mr. Vincent Ford, my program manag-

er.

Did you post a copy of that?

. I did post a stop work order on the building.

*** It’s a big yellow copy, sir, bright or-

ange.

[DE 112, p. 361 -- Cross Examination]:

Q. So either they appeal it, they take the soil out,

or they get a certificate of occupancy? Any

one of those three things, assuming the appeal

is successful, and your stop work is gone?

A. Yes.

Testimony of DCRA Employee Lennox Simon

[DE 112, pp. 362-67 -- Direct Examination]:

A. I’m employed in the Office of Adjudication, the

Department of Consumer and Regulatory Af-

fairs. * * * The Office of Adjudication is the

adjudicative arm of the department. We con-

duct all of the administrative hearings under the

jurisdiction of the DCRA.

. I show you what's been marked as Defendant’s

Exhibits 2 and 3. * * *

A. The first exhibit is an official decision and

we)

order of the Office of Adjudication which was

issued by Attorney Examiner Rohmular Quan-

der. * * * It was issued on October 25, 1993.

. What was the nature of that proceeding, sir?

This was a matter that came before the office

on the operation of a business in the District of

Columbia without a valid certificate of occu-

~ @tt The hearing was on October 13,

> ©

And what occurred at that hearing, sir?

Looking at the official record of hearing, the

respondent failed to appear at that hearing.

The inspector who issued the citation appeared

and gave testimony under oath as to his obser-

vation of the location and what he saw on the

day of infraction, which was September 2,

1993.

Okay. And did the Court decide the case?

Yes, it did. Also looking at the other docu-

ment, which is entitled “Capsule,” it shows

there were several attempts made by the Office

of Adjudication to contact the respondent tele-

phonically. There were calls backward and

forward, and the respondent also wrote a letter

to the department indicating that -- well, basi-

cally denying that there were any business

activities being conducted at that location.

And based on that information, Attorney *

* * Quander proceeded with the hearing. He

found there was adequate notice of the violation

and proceeded with the hearing.

Q. What, if anything, did he determine?

A. Well, based on the information provided by the

inspector, the zoning inspector, he found the

respondent liable, upheld the original fine,

which was $500. He then assessed a penalty

for the respondent’s failure to appear at the

hearing of a thousand dollars, and he also

assessed $25 in court costs for a total of $1525.

xs *

The order was mailed out to the respondent

on November 3rd, 1993. I have a certificate of

service of that as well. * * *

Q. And does the capsule summary itemize the

dates and times when attempts were made to

notify Tri County?

Yes, it did. It shows that on November 30,

1993, on December 7, 1993, December 13,

January 6 of 1994, and January 10 of 1994

Okay. I show you what’s been marked as

Defendant’s Exhibit 4. * * *

A. That is a letter from the office of the control-

ler, which is another branch within the Depart-

ment of Consumer and Regulatory Affairs, and

that office is charged with collecting all fines

and penalties for the department. * * * It is

dated January 12, 1994. * * * Basically it

informs the respondent that he had a final

decision, an order was issued on this matter,

assessing $1525 in fines. There has been no

appeal taken from that decision, which means

you have 15 days in which to appeal. It is now

final, and the respondent has to make payments

on that; otherwise, the matter will be referred

over to the Corporation Counsel for criminal

prosecution to enforce that judgment.

Aad % Gass aftitensl language in Gat desw-

ment!

. Yes. To cease and desist the operation of the

business until such time as a certificate of occu-

pancy is issued for that particular activity that

respondent was engaged in. * * * It also, as

the act -- the civil infractions act provides the

-- for the suspension of various licenses and

certificates unless the fine is paid, so it is an

enforcement tool used to -- by the department

to collect the fines assessed.

[DE 112, pp. 372-75 -- Cross Examination]:

THE COURT: * * *

This form that is Exhibit 2 says at the bot-

tom of the back of it "Respondent’s failure to

appeal this decision or to arrange for payments

of all fines, penalties, and costs within 15

calendar days of service of this decision shall

operate to suspend automatically the license or

permit until the assessment is paid.”

What does this mean "operate to suspend

automatically the license or permit"?

THE WITNESS: * * * [What that means,

Your Honor, is that on the 16th day the license

or permits or certificates will be suspended by

operation of law.

THE COURT: And does another piece of

paper have to issue to get that done?

THE WITNESS: No, Your Honor. * * *

_ BY MR. EMIG:

. But they don’t indicate in this letter that any

permit has been suspended, do they?

A. They don’t. They didn’t. But the decision and

order speaks for itself. It says it would be

automatically suspended, and that decision and

-- the decision and order was mailed to the

respondent.

. Okay. If -- how is that matter corrected and

that suspension lifted?

A. Once the respondent has paid the fine, penal-

ties, whatever that’s due, then that license

permit certificate would be reinstated.

POP

That’s all that’s required?

That’s all that’s required.

To pay it?

It’s just an enforcement mechanism to collect

the fines, penalties, et cetera.

Testimony of DCRA Director Hampton Cross

[DE 112, pp. 377, 394, 396-99 -- Direct Examination]:

> OPO

> OPo>

I was the acting director of Consumer and

Regulatory Affairs from, I believe, September

of ‘93 to, I think, January of ‘94. * * *

Okay. And the Director?

From January of ‘94 to August of ‘97. * * *

Why was that letter [letter dated October 15,

1993] sent to Tri County, sir?

My best recollection is that it was sent to -

well, to establish a process which would afford

-- which would resolve the issues that had

arisen, to establish a process and to get the

necessary information from Tri County.

Okay. And do you know if Tri County re-

sponded to that letter?

No, they did not. * * *

What do the initials CA, what is that common-

ly known as in the District of Columbia gov-

ernment, sir?

City administrator.

Who was the city administrator at that time?

Mr. Robert Maiiett.

What is Mr. Mallett’s responsibilities in the

District of Columbia government? * * *

As the city administrator, he was responsible at

that time for the overall operation of the Dis-

> OPO PO

trict of Columbia government. * * * I have no

recollection of any conversations with Mr.

Mallett regarding Tri County. * * *

In December of 1993, I recall being advised by

the staff that we had not received any response

to our letter * * * dated October 15, 1993.

And the question was, having received no

response, what should we do.

Okay. And what was done?

We issued them a letter revoking the building

permit. * * *

Okay. What is the date of that letter, sir?

December 6, 1993.

At paragraph 3, paragraph 4, sir -- * * * will

you read that, sir?

"Furthermore, the original environmental ap-

proval was based on information provided by

you on the environmental impact screening

form stating that your facility would be over

700 feet from the nearest residential house.

You failed to bring to our attention the fact that

there is a single-family residence directly

across the street from your facility less than a

hundred feet away. We are concerned that this

home, as well as the proposed DHCD housing

project, are much too close to your facility to

not be impacted by the emissions from the

treatment process and potential emissions from

contaminated soil stored at the facility or trans-

ported throughout the neighborhood.”

[DE 112, pp. 404-07, 412-13 -- Cross Examination]:

Q. You do not know when that October of ‘93

letter was sent to Tri County whether or not

QO POP

you had already received that particular infor-

mation that is listed in your letter?

. At the time the letter was sent, my best profes-

sional information at that time was that we did

not have the information that we were requiring

in this letter. * * *

Are you aware of any legal authority that

would permit you to ask for more information

from a permit holder after the permit has al-

ready been issued?

I don’t know any specific code citation, sir, but

as a professional, when matters come before

you that involve life safety --

MR. EMIG: Objection, Your Honor. I

move to strike that.

THE COURT: You asked the question.

THE WITNESS: When matters come

before you that involve life safety as a public

official, you have a responsibility to ask for

additional information. * * *

Is it true, Mr. Cross, that the Board of Appeals

and Review is merely the reviewing agency that

does the will of the mayor?

That’s net correct.

Did you ever testify to the contrary?

My previous statement is that I do not recall

testifying to the contrary.

Is it true that there are two ways of handling

the situation before the Board of Appeals and

Review; one, that you could ask the board to

take a different position or, two, that the mayor

or chief of staff, Robert Mallett, could tell the

Board of Appeals and Review to reverse its

position?

. Sorry. Could you repeat your question.

QO PO?

Is it true that the mayor or the chief of staff,

Robert Mallett, could tell the Board of Appeals

and Review to reverse its position?

That’s not true.

Did you ever testify to that?

My best recollection is that I did not testify to

that.

Let me show you a portion of your transcript

from your testimony in the Samaritan Inns

case. * * * Is it true that you, in fact, testified

differently before the -- this Court?

Based on that transcript, it is correct. Based

on that transcript, I did say that.

[DE 112, pp. 414-18 -- Redirect Examination]:

O>e

The Board of Appeals and Review is not a -- is

an independent -- is an independent agency. *

* * It doesn’t do the bidding of anyone. It is

an independent agency, making independent

judgments.

. SO you were mistaken in that day?

I was absolutely mistaken. Absolutely. * * *

Concerning adverse environmental impacts, if

new information came to your attention which

you determined had impact, environmental

impact on a project such as the one Tri County

was involved in, what, if anything, would your

agency do, sir?

It depends, counsel, on where the project is. *

* * If the -- if the project is -- the proposed

construction is completed, then you would take

steps to delay or suspend issuance of any final

approvals or -- so that to make sure that the

project did not go -- did not go into effect until

we had assured ourselves that any -- that any --

that there would not be any adverse impact on

the surrounding area. * * *

Why did you send the October 15 letter to Tri

County? * * *

~THE WITNESS: As a follow-up to the

meeting where I -- where I moved to suspend

the permit to establish a process which -- a fair

process which would allow Tri County to

provide us with the information to resolve the

questions about whether or not there would be

any adverse impact on the community.

Testimony of DCRA Chief James Sweeney

[DE 112, pp. 419-29 -- Direct Examination]:

I’m employed at the District of Columbia gov-

ernment, Department of Health, Environmental

Health Administration. * * * I’ve been with

the District government for a little over 25

years. * * * Right now, I am chief of the

hazardous waste management division within

the Environmental Health Administration. * *

I show you what’s marked as Defendant’s

Exhibit 7. Have you seen that document be-

fore? * * *

. This is a document called a supplemental envi-

ronmental questionnaire. * * * It is part of the

building permit application.

Okay. And did there come a time when that

document was presented to you?

A. Yes. * * * [T]he signature of the person who

filled out the form is Calvin Franklin. * * *

Mr. Franklin was a representative of Tri Coun-

ty Industries, who had applied for the permit to

do this project. * * *

. Okay. Now, I draw your attention to, I believe

it is page 2, the last question on page 2. * * *

What does that say, sir?

. The question is, “Will the proposed project

result in an increase in vehicular traffic in the

area surrounding the project?” And it is --

someone has written next to that question, "A

little employee." And the question is answered

"Yes.°

. Okay. And did it come to your attention sub-

sequently that there was somewhat more than a

little employee? * * *

. I can’t remember exactly when, but the more

than a little employee parking meant that there

would also be trucks coming into and out of the

neighborhood with contaminated soil in them.

. I show you what has been marked as Defen-

dant’s Exhibit 8. Do you recognize that docu-

ment, sir? ** *

. This document was written in response to a

meeting that was held on September 20, 1993,

where we received some information concern-

ing the area around 2115 Bryant Street, North-

east. This information had to do with the

proposed construction of a housing project by

the D.C. Department of Housing and Commu-

nity Development very close to the proposed

facility. * * * It is addressed to Mr. Glenn D.

Selzer, president, Tri County Industries.

. Okay. What sort of things were you asking for

in that letter, sir?

A. * * * There are 10 things we ask for. I will

paraphrase them so we don’t waste too much

time.

We are first asking for the total cost of the

proposed project, including the cost of the

remediation equipment to be installed, the cost

of construction materials, and the labor cost-

ings.

Number 2, the expected amount of soils in

tons to be processed per day at the facility.

Number 3, the number of truck trips into

and out of the facility per day.

Number 4, the proposed routes of the trucks

through the neighborhood into and out of the

facility.

Number 5, the proposed hours of operation.

Number 6, current conditions of the facility

property regarding pest infestation, dust, and

odor

Number 7, contingency plans, if any, for

the control of pests, dust, and odor.

Number 8, proposed means for washing the

facility and methods for disposing of wash

water.

Number 8, a typo I find four years later.

The second number 8, actually number 9, I

guess, is the distance of the facility from the

adjacent property proposed for development.

There’s some instruction here on how to mea-

sure that distance. * * * It finishes with,

"Thank you for your timely submittal of this

information."

Do you recall that Tri County responded to that

letter, sir?

A. They did not.

> O

> 2 > ©

Okay. Directing your attention to the request

concerning truck traffic, * * * was there a

reason for asking that question, sir?

Well, originally, when we first looked at the

site in their original application, * * * we

weren’t concerned too much with truck traffic

because it was our understanding that there

were no residences nearby.

However, through this meeting on Septem-

ber 20, we found that there were going to be

the proposed housing project. We also went

out and actually looked at the site and found

that there were residences directly across the

street from it. So we were extremely con-

cerned about trucks going back and forth, both

from a health, or public health standpoint and

from a public safety standpoint. * * *

We were of the understanding that the clos-

est residence was 700 feet away, which would

put it down here or out here somewhere (indi-

cating).

What was the basis for that understanding?

The letter we received during our initial review

of Tri County’s environmental impact screening

form. They stated that the closest residence

was 700-feet away.

And, in fact, how far away is the closest resi-

dence?

Right here, probably 50 to 70 feet directly

across the street from the entrance.

And what other residences would you estimate

aré closer than 700 feet away?

I would say every residence * * * that’s in blue

here is within 700 feet. And possibly these

yellow residences too; I haven’t measured that,

so I don’t know. * * *

Q. Why were you concerned about trucks on

Bryant Street?

. Well, for health reasons and safety reasons.

You have homes, you have children that are

using the streets all the time.

There’s a park here. Kids would be cross-

ing the street to get to the park all the time.

We’re concerned about safety there.

As I stated before, we have the trucks going

by with contaminated soil in them. That con-

tamination tends to volatilize out of the soil,

and it would be into the atmosphere, what we

call the ambient atmosphere around the area,

and it could possibly impact the health of the

people in the area.

[DE 112, pp. 435-36, 439-40 -- Cross Examination]:

Q. You concluded, based upon your review and

your discussions with other DCRA officials,

that this project would not eminently and sub-

stantially affect the public health, safety, and

welfare; is that correct?

A. That’s correct. * * *

Q. Are you aware that the -- in their pleadings in

this case, the District of Columbia has admitted

that they did an extensive review of the plain-

- tiff’s application for this facility including visits

to the site? * * *

A. I suppose I am, yes. * * *

Q. In your opinion, would there be an escape of

the contaminants from the petroleum -- the soil

‘

o> © >

Oro

with petroleum in it into the atmosphere from

this facility?

. If the soil was kept inside the facility, in my

opinion, there would not be an adverse emis-

sion of contaminants from the soil.

So that the facility itself would not have -- the

operation of the facility would not have an

adverse effect on the homes that are surround-

ing the property?

. As far as keeping the soil inside the building?

That’s correct.

And the operation, the intended operation was

for the plant and the soil to be inside the build-

ing?

That’s what I understand, yes.

When this permit was suspended by Mr. Cross,

Mr. Cross directed you to write to Tri County

Industries and to get more information; is that

correct?

I don’t know if it was Mr. Cross or Mrs. Bish-

op that directed me to, but one of them did.

That was the reason that you prepared and sent

out your letter of October 15, 1993, -

That’s correct. * * *

Would items 1 through 9 in that letter, Mr.

Sweeney, normally have been looked into by

DCRA in connection with their application --

with the application for a building permit that

Tri County filed?

We expect someone to ask these questions, yes.

Someone from DCRA?

Yes.

Before you sent this letter out to Tri County

requesting further additional information, did

you ask anyone in DCRA regarding their inves-

tigation to see if they already had this informa-

tion?

Not that I can recall, no. * * *

[DE 112, pp. 432-35, 441-42 -- Cross Examination]:

Q. Mr. Sweeney, isn’t it true that all of your

O> O> O>

O> CPO >

concerns about this project are matters that

should be considered when a building permit

application is filed?

Yes

You yourself do not review issuance of build-

ing permits; is that correct?

Only one very small portion of it.

You did not review the Tri County Industries

application for a building permit?

No, I did not.

What you did, essentially, I think you testified,

was to coordinate the review of the different

branches of the Department of Consumer and

Regulatory Affairs?

Different branches within the Environmental

Regulation Administration of the Department of

Consumer and Regulatory Affairs.

If you would take a look at Defendant’s Exhibit

No. 6, what is that, please?

That is an application for construction permit

on private property.

When was that application filed?

July 1, 1992.

That’s the Tri County application for this pro-

ject?

That’s correct.

Okay. And the form of this application is on

the last page, they have various departments

Oro

PO POP

100

that have to sign off indicating their approval;

is that correct?

That’s correct.

Does your signature appear anywhere?

Yes, it does.

Where?

Under number 6 for Environmental Regulation

Administration, where it’s checked “environ-

mental policy review.”

. When did you sign off on this?

November 6, 1992.

. So from an environmental policy review stand-

point, you approved on November 6 the issu-

ance of this building permit?

Based on the information we had at the time,

yes.

Okay. During this time, you also knew, did

you not, that dump trucks were going to be

carrying the soil into this facility?

Yes, I did.

And you knew from the application that the

plant intended to treat approximately 75,000

tons of soil on an annual basis; is that correct?

Where on the application does it say that?

Well, why don’t we look at Defendant’s Ex-

hibit 10. * * * Page 3. * * * What does that

indicate?

It indicates that there will be a quantity of

74,880 tons per year.

. Okay. So when you signed off on this applica-

tion, you knew, A, that they were going to use

dump trucks, and you knew, B, how much soil

they intended to process; is that correct?

CPO POP

101

. No, that’s not correct. I had not seen this

permit for constructing and operating process

equipment at that time.

Okay. Well, why didn’t -- did you request to

see it?

. No, I did not.

Who had it?

Who had it at that time? Mr. Wamsgans from

the Air Resources Management Division.

And he was -- that’s part of DCRA also?

That’s part of DCRA. His Division was re-

viewing this permit application. * * *

Are there other means of access to the property

other than Bryant Street?

I didn’t search for any; but as far as I can tell,

there are few, if any.

What about Lawrence Avenue?

I suppose you could maybe come off of, I

guess, Montana Avenue or 18th Street and get

onto Lawrence, I’m not sure.

Why don’t you tell the members of the jury the

type of businesses that are on Lawrence Ave-

nue. Are they homes?

As far as I know, there are not homes there.

What are there?

Junk yards, trash facilities; I don’t know every

one down there.

Commercial and industrial businesses?

It’s commercial and industrial.

Do you know if the applicant planned on hav-

ing the dump trucks covered when they came

into the facility?

According to the information from the appli-

cant, yes, they would be covered with tarpau-

lin.

OP,

np EZ > OP OP 0

102

Do you know where the soil equipment was to

be located within the building?

Exactly? No. * * *

Did you ever observe any trucks go into the

facility?

At the time I was there, no.

So you don’t know which route they actually

took, do you?

No, I don’t.

112, pp. 442-43, 446 -- Redirect Examination]:

. Mr. Sweeney, in your letter of October 15,

1993, * * * you requested information concern-

ing the proposed routes of trucks through the

neighborhood into and out of the facility. * *

* And why did you request that information,

sir?

“Cause we didn’t have it. * * *

And if Tri County planned to burn 25 tons per

hour roughly, how many trucks would come

through that neighborhood each day? * * *

. 20-ton truck? 25 tons per hour? A little over

a truck per hour. * * *

THE COURT: If the District had already

decided that there was no environmental impact

Statement requirement, why is it that you re-

ferred to a provision of this environmental

impact statement requirement statute to send

this letter out?

THE WITNESS: I think further on in the

law it talks about supplemental information;

and if we determined that there may be other

information or new information concerning the

Testimony of BAR’s Executive Officer Francine James

103

project, we can go back and request further

information from them, the applicant.

THE COURT: Did you have any authority

for asking the questions in that letter of Octo-

ber 15, 1993 except the authority vested in this

Title 6, Section 983?

THE WITNESS: None that I know of.

[DE 112, pp. 448-50 -- Direct Examination]:

-Q.

* * * And vou’re executive officer of what

office?

The Board of Appeals and Review. ** *

Pursuant to the regulatory scheme of the Board

of Appeals and Review, it there a provision *

* * for emergency appeals?

A. There’s a provision for the emergency appeals

in the rules of procedure. * * *

What about stay orders, stay orders of orders

issued by agencies; is there provisions for that

as well there?

. There is a provision for the chairperson to hear

a Stay order only if it has been denied by the

agency. * * *

THE WITNESS: Motions for stays are not

set down for hearing. Motion for stays are

reviewed by the chairperson. He determines

whether he would grand [sic] the stay. If he

does not grant the stay within 30 days, then the

decision from the director of the department

becomes final.

104

[DE 112, pp. 451 -- Cross Examination]:

Isn’t it true that it would be speculation on

your part to give us an opinion as to how long

it would take an emergency appeal to be re-

solved by the board?

To be resolved?

Yes.

- Or to be heard?

Q. To be resolved.

A. Yes. That’s speculation.

Colloquy: Court and Counsel

[DE 112, pp. 452-54]:

THE COURT: This is Siess? * * * This is

the expert?

MR. BOLDEN: Yes, sir. * * * Well, it is

relevant to two things. First of all, the

plaintiffs have put on a person who explained

the process. He concluded his testimony with

that the process is a safe -- as safe as pumping

gasoline at a gas station.

THE COURT: He did say that.

MR. BOLDEN: I think that it -- fairness

would dictate the District have an opportunity

to put on its views as to * * * whether or not

it is as safe as pumping gas in a gas station. *

** Secondly, it is our view that certain kinds

of -- certain parts of this project would have

required that it be stopped anyway.

THE COURT: ’ Like what?

MR. BOLDEN: Well, the process, the

closeness of the proximity of the facility to the

105

residential facilities, residential homes, the

trucks going through the neighborhood.

THE COURT: Well, you’ve got a little

problem. You just had a witness on the wit-

ness stand who said he knew of no authority

for asking the questions in the October 15 letter

except under the D.C. Code section.

I don’t read the D.C. Code section the way

he reads it. The D.C. Code section relates to

environmental impact statements, period.

Environmental impact statements were waived,

were they not?

MR. BOLDEN: They were waived based

upon the information that DCRA had at the

time. The Court will recall there has been

evidence that some of the information was

incorrect, seme of the information was mislead-

ing, and thai there was -- there were new --

new information came to us which showed --

dictated that we proceed in a fashion which

protects the residents, that there was --

Proposed Testimony of Alfred A. Siess

(DE 112, pp. 455-62 -- Direct Examination):

A. I’m presently employed as an economic envi-

ronmental consultant, and my background is a

degree in civil engineering, and I have an MBA

and 40 years of experience.

. With respect to the process of cleaning contam-

inated soil, are you familiar with that, sir?

A. Yes, I am.

. Okay. And how familiar are you with that

process, sir?

> OF

106

. Well, I’ve been involved in a great many -- as

a consultant in a great many of these low-tem-

perature thermal treatment unit applications. I

have reviewed applications for probably two

dozen or more companies, including about six

or eight in Pennsylvania that use Gencor

Thermotech equipment.

And are you familiar with the process?

Yes, I am.

Would you just briefly * * * describe the pro-

cess for --

Well, the process basically is considered as a

viable alternative for doing on-site remediation

of certain very well-defined contaminated soils.

It is basically just a process where you drive

off the volatile compounds and then treat them

in some way, either by passing the gases

through a carbon filter or by burning them in

an afterburner, oxidizing the gases.

The process is not suited for many different

types of contaminated sites, including some

petroleum-contaminated sites.

. There’s been testimony here that the processing

of contaminated soil through this process is as

safe as pumping gasoline in a gas station. Do

you agree with that, sir?

Absolutely not. First of all, the -- pumping

gasoline at a service station is not necessarily a

very safe endeavor. * * *

The remediation, using any type of system

that requires excavating the soil, and particular-

ly systems that require adding heat to the soil

such as low-temperature thermal treatment, add

a host of other problems that make it much

107

more serious of a threat to public health and

the environment. * * *

Well, first of all, it is generally recognized

that the thermal treatment of petroleum-contam-

inated sites which came about in 1984 when

EPA established their underground storage tank

program, is generally considered that the treat-

ment should be on-site with mobile units.

The reason for that are, first of all, if there

were no dangerous materials in the products,

the gasoline and whatever, there would be no

need to remediate at all.

But the UST program established that left in

the ground, petroleum products are a grave

cause for concern. That happens several differ-

ent ways. One, the volatile organic compounds

will be emitted to the atmosphere even from

the type soils without any -- any action; but

mainly there’s a concern that the volatiles will

migrate down to the groundwater, and for that

reason, it is necessary to take action where you

have contaminated soils.

If you’re going to use a system such as low-

temperature thermal treatment, even on site, it

is more of a problem than come of what they

call in-situ measures, where you actually reme-

diate without excavating. It is much preferred

to use in-situ processes such as air sparging or

vacuum extraction in order to avoid excavation.

If you excavate these petroleum-contaminat-

ed soils, you immediately have what is called

airstripping, where the volatiles are released to

the environment anyway.

. Have you reviewed the application submitted

by Tri County in this case? * * *

108

Q. Such as it was. It was not very complete, but

I did review it, yes sir.

. Why do you think it was not complete, sir?

Well, there are a number of such reasons.

They mention, for example, that they have

provided stack tests with their application. On

further review, it appears that the stack test

may be completely meaningless.

First of all, they were not conducted * * *

at the Bryant Street site because there was no

equipment there at all.

I also understand that they were sent to the

Bryant Street site and stored on site.

What was that, sir?

The contaminated soil sample that was going to

be used for the stack test. My understanding is

that they were sent to the site and remained on

the site for a long period of time. This would

be completely inappropriate for running any

kind of a meaningful stack test.

First of all, it may or may not be represen-

tative of the types of soils they would be deal-

ing with, but also, chances are it would be

airstripped to the point of not giving a mean-

ingful comparison of the problem. * * *

The airstripping of the contaminants in

transportation and in handling again at the site,

and in handling again when they are introduced

to the thermal processing unit, the Midwest

Institute has done studies where they have

deliberately taken soil at a central treatment

unit and spiked the soils with volatile organic

compounds.

They have found that from the time they

have spiked the soils until they finish loading

PFO FF 0

109

them into the feeder hoppers or conveyor belts

for the treatment units, they have lost as much

as 95 percent of the volatiles to the atmo-

sphere. * * *

When you refer to airstripping, what do you

mean by that, sir?

The volatile compounds * * * evaporite [sic]

from the soil.

What is the effect of that?

Well, you’re dealing with hazardous chemicals,

xylene. toluene, benzene, all products of gaso-

line.

There are a total -- the American Petroleum

Institute did studies on low-temperature thermal

treatment. They * * * identified 59 listed

hazardous constituents in petroleum refinery

products, in addition to finding that low-tem-

perature thermal treatment was completely inef-

fective in dealing with heavy metals.

These gasolines and other contaminants on

UST sites contained about 12 or 13 very toxic,

heavy metals, including lead, cadmium, and

other constituents.

Low-temperature thermal treatment only

aggravates the problem because the API found

that the lead was being concentrated in the

control equipment, in the bag houses.

The process that Gencor Thermotech uses *

* * sends most of the soil directly from the

drier to the cooler, where it becomes, quote,

"clean soil" and is what they call product.

But also the dust and the gases that are

driven off at the drier are routed to a bag

house, and the dust is collected in the bag

house, where it accumulates lead and other

110

heavy metals, and then it is returned to the so-

called clean soil.

So you’re actually accumulating products

and then returning them to the so-called clean

soil.

Is there any danger of spontaneous combustion?

There is. * * * What I was getting on this

was that my understanding was that at some

sites, the Gencor equipment uses Cedar Rapids

equipment for some of the things like the bag

houses. Cedar Rapids * * * have stated that it

is very dangerous if you allow the volatile

gases to approach 25 percent of the lower

explosion limit in these units; and there have,

in fact, been fires and explosions in low-tem-

perature thermal treatment plants. So that’s a

related worry. * * *

[DE 112, pp. 462-65 -- Cross-Examination]:

Which DCRA officials that approved the permit

in this case have you spoken with?

I have not spoken with anybody, to my knowl-

edge. I said hello to Hampton Cross.

You’re aware that DCRA reviewed this project

in terms of the environmental effects that could

be expected; is that true?

That’s true, sir. What I have stated when I

submitted the expert testimony form was that I

believe that they were -- they were handicapped

by not having complete information in the

application and that, indeed, they were correct

in asking for more information. * * *

111

Q. Well, if they didn’t have the necessary infor-

oO,

mation, * * * isn’t that their responsibility to

go out and get it before they issue a permit?

I think that’s a legal question. I do know that

in Pennsylvania, we have very stringent re-

quirements for obtaining permits for this type

of work.

Every one of the applications that use Gen-

cor equipment, and also several that use Tar-

mac equipment and Aztec equipment, every

one that I’m aware of that -- every one that I

worked on, which is more than a dozen in

Pennsylvania, was rejected because of not

meeting requirements for protecting the health,

safety, and welfare.

Uh-huh. In this particular case, you've indicat-

ed that the machine is not suitable for certain

types of heavy metals; is that correct?

That’s correct. sir.

And if a company tests the soil before it brings

it to this thermal desorption plant, it can evalu-

ate whether or not it has the presence of heavy

metals; is that correct?

. It is theoretically possible to conduct the proper

site analysis to determine the levels of total

metals and the levels of different metals, yes.

*“**

* ** If you have a proper sampling, a sam-

pling protocol being followed, you can be

pretty confident in terms of the results of those

samples; is that correct?

Usually the site investigations are determined

before you decide on the method that you're

going to use for remediation. * * * The reason

for that is that low-temperature thermal treat-

”

{ 112

ment is not the proper method to use even for

on-site remediation, depending on the soil

characteristics and the contaminants that are at

issue; but when you go to the central thermal

treatment of a great many different sites, the

problem then becomes how does the treater, the

remediator, ensure that the generators are not

sending hazardous wastes to them.

In my experience, the protocols for deter-

mining at the treatment site whether or not the

materials that are being received are, in fact,

nonhazardous have left a lot to be desired. * *

In Pennsylvania, we have questioned the

people who say they are the treatment people

and that they will ensure that no hazardous

materials enter the processor. We have asked

them simply, how do you do that. The proto-

cols that are in effect usually say that you have

to take a TCLP sample from six locations in a

500-ton pile of waste at a depth of six inches or

a foot.

It is simply impossible, in my opinion, to

have a proper testing at the site when you're

taking four ounces of soil from a 500-ton sam-

ple.

[DE 112, pp. 466-78 -- Colloquy: Court and Counsel]:

MR. EMIG. As to the safety comment by

Mr. Dishian, I think that was brought out

during cross-examination. But the real problem

I have with Mr. Siess’ testimony, Your Honor,

is Mr. Bolden’s client has admitted in this case

that it has done a full and complete review of

113

the effects of this project, and what we have

with Mr. Siess is an environmental point of

view saying, well, this could be a problem, this

could be a problem, these aren’t the best ma-

chines in the world.

Well, if there’s a violation of the permit, I

think that’s speculation. If they start bringing

any hazardous waste, they don’t sample

enough, that’s a technical violation of their

permit.

But I don’t see really where he -- his evi-

dence, testimony, goes on any of the issues in

this case. In terms of mitigation, damages, or

mootness, I don’t think it really is specific to

not spoken with the regulators to

know what they did. I’m just not sure there’s

relevance that would help the jury. It would

just prejudice them to the extent of bringing in

opposition to a project. * * *

THE COURT: * * * What is his testimony

going to do by way of assisting the jury to

understand the issues in the case? That’s what

expert witnesses are for.

MR. BOLDEN: Well, first of all, he’s

going to explain the process from our perspec-

tive. And he is going to show why a govern-

ment should be concerned about that process

and why additional information was necessary,

and, in his view, why additional proceedings

on this matter were necessitated.

Contrary to what counsel points out, Tri

County had not completed the testing protocol;

* * * they did not have the certificate of occu-

pancy. So there were still considerable steps to

114

go before this was an up and running and

operational business.

And we believe, we maintain that the Dis-

trict, given new evidence, given issues that

indicated there had been some misrepresenta-

tions in applications, should have second look

at this and either try to resolve them or go

through the process to halt the project. That’s

essentially what our position is.

THE COURT: Let me just rehearse where

we are here. On December 22, 1992, the

administrator of the Department of Consumer

and Regulatory Affairs Environmental Regula-

tory Administration advised Mr. Selzer that an

environmental impact statement for the project

would not be required pursuant to the condi-

tions of the District of Columbia Environmental

Policy Act of 1989.

The letter said that even though an environ-

mental impact statement is not required, the

project is still governed by all other applicable

District and federal laws and regulations and

will be subject to normal reviews during the

permitting and construction processes; and it

said that construction and operation of the

facility would be governed by the special con-

ditions included in approval number 3411

issued by the Air Resources Management Divi-

sion on December 11.

Those special conditions, which are Plain-

tiff's Exhibit 3, approve the construction and

operation of a 25-ton per hour portable soil

remediation unit, including a rotary kilh, a bag

house, and an afterburner, in accordance with

115

submitted plans and specs subject to 12 enu-

merated conditions.

Now the enumerated conditions include, by

the way, that the approved facility would not

be operated to treat hazardous waste materials,

including but not limited to organic solvents,

PCBs, PVCs, but would be permitted to pro-

cess only soil contaminated with gasoline,

diesel oil, fuel oil, or kerosene.

So all this business about heavy metals that

Mr. Siess had to talk about seemed to be off

the reservation.

Now, what I hear Mr. Siess saying, essen-

tially, is that they shouldn’t have issued this

permit. Enlightened places like Pennsylvania

and California don’t do this. But he’s not in

Pennsylvania or California, he’s in the District

of Columbia; and they did do that. They did

issue this.

Now, I’m sorry if my question to Mr.

Selzer [sic] about what legal authority he had

for asking his -- for writing his letter gave you

an answer you didn’t want to hear, but I

haven’t heard anybody say yet what authority

the District had for reopening in that October

15 letter the questions that form the basis for

the -- for your argument here really that when

push came to shove, the District was going to

jerk this -- this permit. That’s your Carey

versus Piphus thing.

But unless the District of Columbia acted

ultra vires, I haven’t yet been shown how they

could have reversed course on this process,

having granted the -- having granted a permit

on December 11, having waived the air quality

116

control on December 22, having issued a build-

ing permit.

Now I will grant you the possibility that a

full-scale legal proceeding, perhaps one even

brought by the community requiring some -- or

demanding some reevaluation of this process,

raising questions like the question Mr. Siess is

bringing here, ventilating the objections of the

community to dump trucks driving past child-

ren’s parks, raising the specter, as you tried to

do in your cross-examination, that who knows

whether the truckers would put those tarps on

the trucks when they really come through or

not -- I would grant you that the proceeding of

that kind might have had the effect of pulling

this permit.

After-acquired evidence, a proceeding for

fraud in saying it wasn’t going to have much

vehicular traffic, just a few employees; a pro-

ceeding for fraud; you told us there weren't

going to be any houses within 700 feet. Look

at all these houses; all that might have hap-

pened. But it didn’t happen. * * *

I am going to hold that Mr. Siess’ testimony

is -- let me just review it. He was going to say

that this process is not suited for some sites,

but that’s not the issue we’re dealing with here,

because we’re dealing with dirt that is already

going to be brought from other sites.

He’s going to say treatment should be on

site. Well, maybe it should, but this treatment

plan was approved for the District of Columbia

-- by the way, his testimony is not time limited,

so you don’t have any idea whether he’s talking

about 1993 or 1998, and that may make a

117

difference on whether in-situ treatment is more

de rigueur today than it was in 1993.

I notice one of your experts -- | think it was

DiRenzo -- had in his report something about

this new biological process for eating up the

little petroleum things. Well, I can remember

from my days in private practice, they were

just beginning to talk about using these

enzymatic ways of doing third-stage recovery

from oil wells and that sort of thing, and that’s

fairly new. I don’t know if they were doing it

in 1993.

He said the stack tests were meaningless

because they were not conducted at Bryant.

Well, the conditions of the grant, of the operat-

ing permit, were that there be stack tests con-

ducted at Bryant. So that doesn’t help us any.

Soil -- the soil samples would be airstripped

as they were taken out of the hole. Well, that

doesn’t affect the neighborhood -- or air-

stripped by transit -- that doesn’t affect the

neighborhood, except in the last couple of

blocks.

Airstripped by being handled inside the

building? Well, you have Sweeney saying

whatever is in the buildi

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