Flexsteel settles and ends decades-long legal dispute at Elkhart contaminated groundwater site

The former owner of three RV seat assembly facilities suspected of contributing to a contamination plume that is now a Superfund site in Elkhart has agreed to pay $9.8 million to settle allegations that he allegedly violated federal and state environmental laws.

Flexsteel Industries Inc. has agreed to sign a consent decree with state and federal environmental agencies to settle claims that the company violated the Comprehensive Environmental Response, Compensation, and Liability Act, also known as the name Superfund Act, and equivalent state laws, by failing to prevent the release of a carcinogenic chemical called trichloroethene, also known as trichlorethylene or TCE; tetrachloroethene, or PCE; and other toxic chemicals.

Flexsteel denied responsibility for the contamination and said in a U.S. Securities and Exchange Commission filing that it only signed the deal because it was in the company’s ‘best interests’ .

The settlement pays for a portion of cleanup costs already incurred by the U.S. Environmental Protection Agency and the Indiana Department of Environmental Management at the Lane Street Groundwater Contamination Superfund site and will help fund future cleanup efforts.

“This settlement ensures that the responsible party and not the taxpayers fund the cleanup of the [site]said Assistant Attorney General Todd Kim of the United States Department of Justice’s Division of Environment and Natural Resources. “The cleanup funded by this agreement protects the environment and the health of the surrounding community.”

IDEM Commissioner Brian Rockensuess called the deal “good news” for Elkhart residents.

More than 80% of the world’s RV production is done in Elkhart, earning it the unofficial title of “RV Capital of the World”. But the manufacturing output needed to meet the demands of industry has had an impact on workers, residents and the environment.

RVs are essentially houses on wheels and require many more parts and features than standard vehicles. To manufacture these parts and features, companies use chemicals like TCE, a man-made chemical created in the 1920s used for various industrial purposes like making refrigerants, a degreasing solvent for metal equipment, tool cleaners, paint strippers, spray adhesives, carpet cleaners and stain removers.

The chemical is useful because it’s non-corrosive, non-flammable and easy to recycle, but has been shown to cause kidney cancer, non-Hodgkin’s lymphoma and heart defects, and is linked to leukemia, liver cancer, multiple myeloma, end-stage kidney disease, Parkinson’s disease, scleroderma and other adverse health effects, including various prenatal health conditions.

TCE contamination is an endemic problem in Elkhart. Dozens of polluted sites known as brownfields dot the city, many contaminated with TCE or other volatile organic compounds.

The city is also home to six Superfund sites, the most in the state, all of which are contaminated with TCE and other similar chemicals. Two contamination plumes that would later become Superfund sites were discovered while IDEM was investigating separate adjacent TCE plumes.

One of them is the Superfund site on Lane Street groundwater contamination.

In 2007, residents of the Meadow Farms neighborhood along Kershner Lane were warned that contamination from the Geocel Corp. at 2502 Marina Drive had migrated to their neighborhood, potentially contaminating their private drinking water wells.

An environmental investigation revealed the presence of PCE, TCE and other contaminants in soil and groundwater at the Geocel facility and later dozens of nearby residential properties.

A resident of nearby Lane, concerned about Geocel contamination, submitted well water samples to a private lab, where tests revealed high levels of TCE and other toxic compounds. But the TCE had a distinct contaminant profile that did not match the contamination found in the Geocel plume.

The resident discovered brand new TCE contamination from an unknown source.

IDEM investigated, initially finding TCE at levels exceeding drinking water standards in 13 residences, and the agency provided bottled water and installed water filtration systems in those residences. But the plume was migrating southwest, potentially contaminating more homes.

To prevent residents from drinking or using potentially contaminated water, the EPA hooked many residents up to city water systems and they ditched their residential wells. According to the agency, an unidentified resident refused to be connected to the city’s water supply.

The site was added to the National Priority List, a list of the most contaminated sites in the country, in 2009.

During the assessment of the extent of the contamination, IDEM also investigated the source of the contamination. Inspectors took groundwater samples and visited facilities at an industrial park just north of Lane Street and found three facilities that used or stored hazardous substances. One of these facilities belonged to Flexsteel Industries.

Flexsteel Industries acquired Dygert Seating, a manufacturer of vehicle furniture, in 1997. The company occupied several buildings in the industrial park north of Lane Street.

The EPA suspected that at least one Dygert Seating facility was the source of TCE. The EPA began interviewing company officials, who denied the widespread use of degreasers or solvents.

The company’s former vice president of production, Greg Lucchese, said the company’s maintenance department never had more than a gallon or two of solvent present at any time. Former owner David Dygert told the EPA he was not aware of any contaminants used while he operated the businesses between 1983 and 2007.

In 2011, some residents living at the Lane Street Superfund site filed a lawsuit against Flexsteel, Dygert Seating and company officials, alleging the company used TCE and routinely instructed its employees to illegally dispose of it. TCE and other solvent wastes.

The lawsuit alleged that the defendants implemented “schemes” to hide their unlawful actions, which included a litany of violations, including mail fraud, interstate wire fraud, obstruction of justice and witness tampering. .

As part of the lawsuit, former employees provided written testimony about their experiences. Employees said the company routinely uses C-60, a TCE solvent degreaser, which comes in 55-gallon drums or smaller 5-gallon or 10-gallon pails. The solvent was used to degrease seat frames, clean glue gun equipment or clean installation tables.

After the rain, water seeped in behind the doors and formed on the floor and under the treadmill, where a chemical sheen formed in the puddles due to the C-60 dripping on the floor, according to an employee. Puddles of water would be pushed outside using squeegees and push brooms.

According to employee affidavits, Dygert Seating supervisors, including vice president of production Greg Lucchese, told employees to dump excess solvent outside the back door of at least one building. Empty TCE containers, rags and other TCE-contaminated equipment were placed in cardboard boxes and then disposed of with general garbage in overflowing garbage barrels instead of being treated as hazardous materials. Cardboard was often soaked in TCE before being discarded.

Employees also said the back of the facility area, where employees took smoking breaks and dumped solvent, was littered with contaminated rags, C-60 cans, car parts and other waste. Workers had to try to keep the C-60 canisters from rolling into the parking lot.

The employee affidavits were used by consulting firm Keramida Inc. as part of IDEM and EPA’s assessment of the source of the contamination.

Keramida founder and CEO Vasiliki Keramida herself submitted written testimony as the plaintiffs’ expert in the case, which she submitted to the agencies in 2013.

“It is my professional opinion, with a reasonable degree of scientific certainty, that the Dygert/Flexsteel operations are the source or major contributing source of groundwater contamination in the Lane Street area,” she said. stated in his affidavit.

Later that year, Flexsteel settled the case for $6.25 million.

The EPA and IDEM continued their investigation into the source of the contamination. In March 2016, the EPA sent letters to Flexsteel and two other companies advising them that they might be responsible for the cleanup.

In October 2022, the U.S. Department of Justice’s Environment and Natural Resources Division and the Indiana Attorney General’s Office filed a lawsuit against Flexsteel, alleging the company was responsible for paying for the cleanup. .

The company has agreed to pay $9.8 million to settle the claim, but denies being responsible for the contamination.

“Flexsteel’s independent environmental investigation determined that the source of the contamination was located at another property where Flexsteel did not operate, supporting Flexsteel’s position that it did not cause or contribute to the contamination,” it said. the company said in a filing with the SEC. “Despite this fact, Flexsteel has determined that entering into this agreement and seizing liabilities associated with EPA claims is in the best interests of the company.”

The EPA chose to clean up the Lane Street site through a treatment called in situ groundwater treatment through enhanced bioremediation. The agency will inject nutrients and other compounds into groundwater to encourage the growth of microorganisms that will eat TCE and other toxic chemicals and break them down into harmless compounds.