Boeing Waste Disposal At Issue -- Federal-Court Trial May Yield Answers

A federal-court trial in Seattle could offer an answer to a troubling question about The Boeing Co. and its toxic-waste-disposal practices.

Did the company's officials know dumping millions of gallons of waste in the ground was wrong or were they just following directions?

In opening remarks in Judge William Dwyer's court yesterday, Boeing's attorneys tried to show the company took the best advice available when, beginning in 1957, it began trucking its waste to Queen City Farms, one of two Boeing dump sites that have turned into two of the worst toxic-waste dumps in the state.

It and the other site, Western Processing, now are on the federal Environmental Protection Agency's Superfund list, and cleanup costs at both sites could total more than $80 million. But Boeing contends it dumped at those sites with the full approval of the King County Department of Health, the old state Pollution Control Commission and the state Department of Ecology.

But Boeing's insurers contend the company knew it was polluting. A gaggle of insurance companies that carried Boeing from 1957 to 1977 have declined to pay those costs, although Boeing, which dumped waste at Western Processing along with 175 other companies, has agreed to pay for a substantial portion of the Western Processing cleanup.

Boeing has sued its insurers for reimbursement. The trial in Dwyer's court, which is expected to last through September, features

attorneys from Boeing arrayed against attorneys from an insurance syndicate that includes Lloyd's of London, Hartford Accident and Indemnity, Aetna Casualty and Surety Co. and a half-dozen other companies.

The companies lost a round before the Washington State Supreme Court in January.

A loss could have troubling legal implications for Boeing.

Boeing's waste has been linked to pollution at 15 sites around the country, including contamination of soil and water in Washington, Oregon and Kansas. It continues to generate more than 8.5 million gallons a year of hazardous waste, an increase of more than 20 percent since 1985, despite a waste-reduction program. That waste is now reduced, recycled or buried in a federally approved dump, but Boeing's past problems linger. Boeing's most recent annual report stated ``it is not possible to determine the impact of environmental issues on future operation because the Company cannot reasonably estimate the full extent of such potential costs.''

The key words in the trial are clauses in standard insurance contracts that say insurance does not pay for liabilities from ``expected and intended'' actions on the company's part.

In remarks outlining the direction the trial will take, Dwyer told the jury that ``Boeing contends it did not expect pollution when it deposited waste.'' The carriers must convince the jury that Boeing knew its disposal practices would cause damage to the environment. In turn, Boeing is expected to say it relied on the best advice available at the time.

Yesterday, Boeing attorney Robert Sayler told the jury that Boeing's involvement with Queen City Farms began in 1957, in the era of Sputnik and before air, water and land pollution was of concern.

Sayler said Boeing uses an enormous amount of toxic chemicals, mostly to coat the outside of its planes.

Sayler contended that years ago, Boeing did not have the scientific capability to look at potential pollution problems. It relied on various government agencies for waste-disposal advice.

In the late 1950s, Sayler said, the King County Health Department recommended Queen City Farms, a waste site owned by the Razore and Banchero families, owners of Rabanco, the waste-disposal firm that currently collects and recycles much of Seattle's garbage. Although the company was dumping toxic chemicals in pits that later leaked into ground water, Sayler said that solution was considered preferable to the more common practice in the late 1950s - dumping chemicals into the Strait of Juan De Fuca, or building ``leachate pits'' on Boeing property that would leak into the Duwamish River.

Boeing continued to haul waste to Queen City Farms through the early 1960s. Then the old state Pollution Control Commission recommended it change over to Western Processing. That operation was considered ``forward-thinking'' because its owner, Garmt Nieuwenhuis, recycled much of the waste for resale. However, with both Queen City Farms and Western Processing, Boeing was careful to stipulate that it no longer owned the waste once it was accepted for disposal.

Western Processing accepted most of Boeing's waste during a period when Boeing underwent tremendous expansion, building plants in Auburn and Everett. But in the late 1960s and early 1970s, as Boeing fortunes shrank, Nieuwenhuis threatened to go out of business. Western Processing was Boeing's, and the state's, only waste-disposal option.

Boeing attorney Charles Gordon said the company was over something of a barrel - despite emerging pollution problems at the site, the company had nowhere else to go. During that time, Boeing conducted an internal study of its options, because if Western Processing went out of business ``Boeing would have to shut down,'' Gordon said.

Gordon warned the jury that insurance carriers would use this study as ammunition, for it recommended that Boeing switch its waste-disposal business to Chempro, a company that at that time was seeking to truck waste to Hanford or build its own disposal facility in Auburn.

Boeing was concerned about possible accidents involved in trucking hazardous waste to Hanford. Meanwhile, Chempro failed to get a permit, Gordon said. Boeing continued its relationship with Western Processing, even as the state began to document pollution problems there.

By 1977, Chempro had procured a permit to process hazardous waste, and Boeing ended its relationship with Western Processing. While Sayler said the transfer was ``for reasons unrelated to any belief substantial damage might have occurred,'' attorneys acknowledged Boeing was concerned about adverse publicity about pollution problems, or the possibility that the chemicals Nieuwenhuis resold might cause an accident for which Boeing might be liable.

Nevertheless, Sayler said, ``no state official told Boeing that its actions would or wouldn't cause environmental damage.''

Although Boeing accounted for at least 50 percent of Western Processing's business, it remained in business another six years. In 1983, the EPA cited Western Processing for extreme pollution problems, and the facility soon shut down.

The trial continues today, with insurance company attorneys' opening statements.