Leather Rich fights back in response to DNR’s lawsuit

NORTHEAST WIS. – Attorneys representing dry cleaners Leather Rich Inc. assert Wisconsin’s Spill Law is flawed because it gives the Wisconsin Department of Natural Resources too much latitude in asking individuals to pay the costs to detect and clean up toxins found on property they own.

The Spill Law case the Wisconsin Supreme Court is hearing involves a mom-and-pop dry cleaners, Leather Rich Inc. (LRI) in Oconomowoc, which owner Joanne Kantor wished to sell after her husband died. The amount of money Kantor spent to comply with Wisconsin Department of Natural Resources (DNR) requirements exceeded $300,000 and affected her retirement, according to a legal brief Madison law firm Fredrikson & Byron P.A. filed Nov. 5 with the Supreme Court of Wisconsin in the WMC v DNR case.

“The DNR provided no guidance to Ms. Kantor regarding which of the thousands of PFAS compounds were considered hazardous substances, and at what concentrations those substances would be considered in exceedance. So, when DNR once again refused to allow LRI to begin its remediation after spending nearly $300,000 on investigating the site, Ms. Kantor made the difficult decision to bring this action,” said attorney Delanie Breuer of Fredrikson & Byron in the legal brief.

Breuer, who is representing Leather Rich, paints a sympathetic picture of Kantor in the legal brief, describing her as “a regular, hard-working Wisconsinite who dedicated much of her adult life to building a small business, Leather Rich, with her husband, Ron.”

“As a law-abiding citizen, Ms. Kantor made every effort to comply with DNR’s changing regulations under the Spills Law, investing hundreds of thousands of dollars and several years investigating potential contamination on the LRI property just so DNR would allow her to begin the remediation process,” Breuer said.

Some residents of Marinette County, where Johnson Controls’ Tyco unit is providing bottled water and paying for deep wells for residents in a PFAS-contaminated area, say it’s important to remember why the Spill Law exists and why the DNR should be allowed to continue to hold responsible parties accountable.

“How do you create a rule when essentially industry has been hiding the negative information about this? The Spill Law was specifically designed to deal with all of these unknowns,” said Marinette City Common Council Member Doug Oitzinger. “The WMC, they’re the corporate polluters’ lobbyists. Leather Rich, near as I can tell, they caused this pollution in the groundwater by their facility from the various products they used on dry cleaning.”

In the introduction to the 35-page response, Breuer writes, “to comply with the law, the public must know what the law requires.” She cites a 2019 Wisconsin case, Lamar Central Outdoor LLC v Wisconsin Department of Hearing and Appeals, which involved a change in regulations pertaining to a road sign, where Wisconsin’s highest court determined the state Department of Transportation needed to pass a regulation when it adopted a new interpretation of a Wisconsin law.

Whether the Supreme Court accepts the Lamar case as relevant to the WMC v DNR case could have a bearing on the current case and whether the Spill Law remains as written or is found to be in need of revision.

As written, the Spill Law is designed to be different from most other laws as it deliberately allows for enforcement without set standards codified for some toxins, according to several attorneys. The Spill Law allows the DNR to be proactive in protecting the public from hazardous spills.

The Supreme Court’s decision in the Oconomowoc case involving Leather Rich also could affect Marinette County, where Johnson Controls’ Tyco unit has said it will take responsibility for PFAS-contaminated groundwater in a limited area. Some people want the contaminated area in the Town of Peshtigo and a small part of Marinette, referred to locally as the plume, to be extended to a larger area.

“If the Supreme Court decides that a maximum contamination level in rule isn’t necessary for the Department of Natural Resources to force clean-up, then Tyco would most likely be forced to clean up all of the PFAS contamination,” said state Senator Mary Felzkowski, who believes a public-private resolution might be necessary for the PFAS contamination.

If the Supreme Court were to uphold the appeals court’s decision in the WMC v DNR case, it could strip the DNR of its authority in holding companies like Tyco accountable for chemical spills they caused, Oitzinger said.

Johnson Controls’ Tyco unit discovered PFAS on its property about 11 years ago, yet Wisconsin hasn’t yet set maximum contaminant levels for PFAS in groundwater used for drinking water, Oitzinger said. Without a state rule in place, “the only authority the DNR has is the Spill Law,” he said. Without it, “basically the DNR loses all of its authority to the Tyco spill,” he said, and Tyco might be less inclined to help the community.

“All the things Tyco has done was not done out of the goodness of their heart. They were done because the DNR said, ‘You need to come up with a plan to fix this as best you can,’” Oitzinger said.

The WMC has fought against setting standards for PFAS in groundwater, so it’s hypocritical for the organization to say because standards don’t exist, a company shouldn’t be held accountable for a spill, he said.

Spill Law fines can total thousands of dollars per day, wiping out a citizens’ savings, Breuer said. “As this case demonstrates, DNR’s constant movement of the proverbial goal post with respect to these regulations has very real consequences for Wisconsin residents,” the brief said.

The case could determine how property owners must respond to DNR demands for testing and remediation in the future, she said. But Oitzinger said the Spill Law should apply as it has in other spills, despite the fact the case involves an older widow concerned about losing her retirement savings.

“Of course the Spill Law applies to anyone. If you as a property owner go dump thousands of gallons on your property, you’d have an obligation to clean it up,” he said. It also requires property owners to report a spill.

Dry cleaners in particular often use toxic chemicals, he said. “Who else should be cleaning that up besides the dry cleaner? The financial responsibility is overwhelming.” If it’s overwhelming for Leather Rich, it also might be overwhelming for taxpayers, as some have suggested the government should pay.

“At the end of the day, if you’re not going to pick up the cost, who’s going to? It’s you and me – the taxpayer – you’re the first person we go to get it cleaned up,” Oitzinger said. “The government in many cases have grants to help some of that.”

Felzkowski envisions a public-private resolution, pointing out the federal government approved the use of PFAS chemicals, so it should help with the cleanup.

Breuer said Leather Rich didn’t cause the PFAS spill. To which Oitzinger said, “Instead of suing the DNR, they should have sued the people who made the chemicals who didn’t warn them they were dangerous.” The rulemaking process can take years, Oitzinger said.

In one passage of the 35-page legal filing, Breuer said: “DNR asserts that any substance, including milk and beer, can (and must) be subject to Spills Law regulation. But taken to its logical end, this premise would compel an absurd result.”

But Breuer overlooks exceptions to the Spill Law, such as when a spill is found to be another party’s responsibility, said Rob Lee, staff attorney at Midwest Environmental Advocates in Madison, which filed an amicus brief in the appeals case. “There is an exception for owners of properties that have contamination from neighboring properties seep onto theirs, as long as they allow the cleanup to occur,” Lee said.

The DNR also can use discretion in enforcing the law. “The DNR is not going after farmers or really any private individuals except in very rare circumstances,” he said, such as structure fires where PFAS-containing firefighting foam was used.

Breuer criticized the DNR’s “guess and check” approach to determining whether a spill is hazardous. “Consider the absurd results if such a ‘guess and check’ approach was applied in other legal or regulatory contexts. For example, what if numeric speed limits were abolished and drivers were expected to determine for themselves what driving speed is safe?” she said in the brief.

Yet Wisconsin traffic code includes “too fast for conditions,” which doesn’t specify an exact speed limit but states, “The operator of every vehicle shall drive at an appropriate speed as may be necessary to avoid colliding with object, person, vehicle or other conveyance on or entering the highway in compliance with legal requirements and using due care, or when special hazard exists with regard to other traffic or by reason of weather or highway conditions.”

If the Supreme Court were to rule against the DNR, “the reality is that many contaminated sites in Wisconsin will not be cleaned up when they otherwise would have been,” Lee said. Prior to 1978 when the Spill Law was enacted, people had to confront the polluting parties on their own, such as by filing a tort lawsuit after an injury occurred, he said.

In another scenario, taxpayers, or the state, fund the cleanup, Lee said. “But the Wisconsin Department of Natural Resources is woefully underfunded and understaffed, which necessarily means many sites, if any are addressed at all, will be overlooked,” Lee said, and people will be exposed to hazards.

Kantor made a concerted effort to comply with the DNR’s requests to a point, Breuer said. She didn’t expect to find a problem because it had “an impermeable barrier under the facility to prevent contamination,” according the legal filing.

When the soil was evaluated, low-level volatile organic compounds were detected, and Kantor reported this to the DNR. A year and three months after the DNR’s site investigation had begun in 2018, the DNR informed the company it would need to investigate PFAS at the site, the attorney said. “Prior to this conversation, Ms. Kantor had never heard of PFAS,” Breuer said.
“Believing she had no choice but to comply with DNR’s directive, Ms. Kantor agreed to test for several PFAS and reported those results to DNR. But Ms. Kantor’s compliance led to more demands from DNR, requiring soil and additional water samples be tested for PFAS. DNR provided no guidance to Ms. Kantor regarding which of the thousands of PFAS compounds were considered hazardous substances, and at what concentrations those substances would be considered in exceedance,” Breuer said.

The chemicals that led Leather Rich to alert the DNR, before the PFAS was found on the site, are hazardous, said Dean Hoegger, president and executive director of Clean Water Action Council, a nonprofit dedicated to protecting human health and the environment. Hoegger has personal experience with chemicals used in dry cleaning from working in a dry cleaning business when he was in high school. There’s a lot of chemicals and they’re not always treated.”

Hoegger said the Leather Rich case has some similarities to 1980s litigation involving PCBs, which were being put into the Fox River from recycling fluid and they poisoned fish, he said. “A whole bunch of companies were involved,” he said. “PCBs were ending up in the sediment in the Fox River and pushed out to the Bay of Green Bay in animals and fish, causing fish not to be edible,” he said. “We pushed hard for removing the PCBs and sending them to a secure landfill,” he said. “PCBs were outlawed in lots of different industries. The carbonless paper stopped being produced.”

But from Leather Rich’s perspective, having to “guess and check” what contaminants DNR may consider a hazardous discharge and “then waiting to see if DNR will do nothing or bring an enforcement action” was exceedingly challenging to the point of being abusive, Breuer said, adding, “It is possible this is the first challenge of its kind because DNR’s abuse of the Spills Law has never been so egregious.”