Quick Hit Ellyn Fortino Thursday April 24th, 2014, 3:25pm

Chicagoans Hit BP, Koch Brothers Companies With Class Action Lawsuit Over Petcoke

As the debate over petroleum coke stored on Chicago's Southeast Side rages on, a consolidated class action lawsuit was filed in federal court earlier this month against BP and various companies — including three connected to the conservative billionaire brothers Charles and David Koch — for failing to contain mounds of the gritty material.

The class action complaint, filed in U.S. District Court for the Northern District of Illinois on April 7, is consolidated with two other lawsuits brought last year by Southeast Side Chicagoans against BP, which produces petroleum coke, or petcoke, in its oil refining process, as well as several companies that house the powdery substance in the city. 

The 10 Chicagoans named as plaintiffs in the consolidated lawsuit brought the complaint on behalf of themselves and a class estimated to be comprised of thousands of property owners located near the large petcoke piles on the city's Southeast Side.

Petcoke, which can pollute the air and water, is being stored outside along the banks of the Calumet River. Residents who live near the three Southeast Side petcoke storage facilities — two maintained by North Dakota-based KCBX Terminals Company and one operated by Indiana-based Beemsterboer Slag Corp. — say black ash dust from the uncovered petcoke piles is blowing into their communities and covering their homes.

"Petcoke is dangerous to property, as it is highly flammable and explosive, and can be ignited by heat," the complaint reads. "The expenditure of time and money washing and rinsing the exterior and interior of homes, furnishings, vehicles and other real and personal property has been required to prevent potentially hazardous aggregations of petcoke."

The three suits were consolidated “because if this is going to be resolved in any meaningful way, we needed to get every (company) who was a major participant in the creating [of the] situation to be at the table," said Robert Pavich with Pavich Law Group, P.C., one of the attorneys representing the plaintiffs in the case.

The defendants in the case are:

-BP Products North America, Inc

-Calumet Transload Railroad, LLC

-DTE Chicago Fuels Terminal, LLC

-George J. Beemsterboer, Inc.

-Beemsterboer Slag And Ballast Corporation 

-KCBX Terminals Company

-KM Railways, LLC

-Koch Carbon, LLC

KCBX, KM Railways and Koch Carbon are subsidiaries of the privately held Wichita, Kansas-based Koch Industries Inc., a massive American multinational corporation run by the billionaire Koch brothers.

The petcoke mounds piled along the banks of the Calumet River were largely transported there from the BP refinery in Whiting, Indiana, which is the same facility that malfunctioned last month and spilled an estimated 39 barrels of oil into Lake Michigan. 

According to the suit, BP generally stores the eqivalent of about five days' production of petcoke at its Whiting refinery. After roughly five days, the petcoke produced at the refinery is transported to the Chicago storage facilities, which also take in petcoke from other sources, the complaint reads.

Another attorney representing the plaintiffs, Ian Levin, also with the Pavich Law Group and a former U.S. magistrate judge, noted that the stored petcoke often gets shipped to markets overseas in places like China, India and Mexico. The material is commonly used as a fuel source in power plants and is a component in the aluminum, steel and cement making process.

BP is named as one of the defendants in the case because, among other reasons, it "knew or reasonably should have known that the storage/distribution defendants were not taking, and would not take, reasonable and adequate measures to ensure that petcoke being stored at the storage facilities would not migrate into surrounding communities and contaminate the properties of plaintiffs and class members," the lawsuit states.

Levin said the plaintiffs are suing for punitive damages, "which is to punish the wrongdoer and defer further wrongdoing." The families are also seeking injunctive relief, including barring the companies from distributing, storing and transporting the material near the densely-populated residential area.

Pavich said the goal of the suit is to get some relief for the people living on the city's Southeast Side, who for some time now have said the petcoke dust is making their lives unbearable.  

"We need to get something more done to see that these piles of petcoke are not going to be placed in ... the city in a way in which the slightest kind of wind can be blowing (it) around into people’s homes and houses," Pavich said.

Levin and Pavich discussed the consolidated class action complaint at a Chicago event Wednesday night co-sponsored by Common Cause Illinois, a nonpartisan watchdog group that works to "hold power accountable" and promote political and economic fairness.

Common Cause Illinois' Executive Director Rey Lopez-Calderon explained that one reason the group is involved with amplifying the petcoke issue is because citizens may not know who is behind the problem.

"Common Cause has always been known [to pull] people from out of the shadows. The dark money, the shady corporate lobbying, the financing," Lopez-Calderon said. "And organizations like Koch Industries and their leaders, the Koch brothers, have been on our target list for quite some time."

He noted that Common Cause Illinois appreciates the "creative" effort to file a lawsuit meant to tackle the petcoke issue through the use of "people power."  

"This is about people power [and] grassroots citizens lobbying, litigating and organizing," Lopez-Calderon said, adding that it "made perfect sense for us" to get involved on the petcoke topic.

"The intersections are all there," he added. "You have money [and] people who are funneling money into the system getting terrible laws ... There are no laws to help these people around the environmental issues that they’re facing, so they have to go through the litigation process and use a different strategy. But if the campaign finance laws were better, and there was less of a control by these rich people in our Congress and in our states, we would have better policy and better laws for them to use." 

Other groups that co-sponsored the event, held at the Chicago Temple Building, included Chicago Area Peace Action, Chicago MoveOn Council, Citizen Act to Protect Our Water, Democracy in Action Chicago, Frack Free Illinois, Near West Suburban Chicago Move To Amend, Progressive Democrats of America Illinois, Southeast Environmental Task Force and Tar Sands Free Midwest.

Tom Shepherd from the Southeast Environmental Task Force applauded the consolidated class action lawsuit against BP and companies involved with petcoke storage in Chicago.

"I think it’s great they’re going after them," he said. "I think it would be great for anybody to go after them, because they deserve it. These people are gigantic polluters."

As far as the next steps in the case, Levin said the plaintiffs are waiting for the other side to file its response, and "then we'll know about what their position is." 

The latest lawsuit, however, is not the only effort geared at addressing the petcoke concerns of Southeast Side residents. 

There is a pending ordinance in the Chicago City Council that would prohibit new petcoke facilities from setting up shop in the city and bar existing sites from growing. Environmentalists, however, maintain that the measure has since been watered down because an exception was carved out for manufacturing facilities that receive a construction permit and a “new source review” approval from the Illinois Environmental Protection Agency. The public learned of that exception during the city council's zoning committee meeting held earlier this month. Ald. John Pope (10th), who represents the Southeast Side and co-sponsored the petcoke ordinance, stated at that zoning meeting that there may be room to tweak the measure in order to satisfy concerns from those who believe the legislation does not go far enough.

In addition to the pending petcoke ordinance, the Chicago Department of Public Health issued its finalized regulations last month designed to put a cap on emissions that come from petcoke. Under the regulations, petcoke operators have to fully enclose their storage piles within a two-year period and submit monthly progress reports to the city as they work to comply with the public health department’s health and safety measures. 

Shepherd said his group and others are calling on the city to install a moratorium on operations at the petcoke facilities until enclosures are in place. 

Peggy Salazar, also with the Southeast Environmental Task Force, said a moratorium is "common sense."

"If (city officials) feel it’s serious enough to have it enclosed, then (petcoke facilities) should not operate until it is closed," she said. "If it is a serious enough matter to require them to enclose it because of the health risks associated with the dust and the impact on the community, then why are they allowed to operate for two years if it’s serious?" 

Salazar said the city council's zoning committee could take up the petcoke ordinance at its April 29 meeting.

Stay tuned.


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