RI judge orders Texas-based Southern Union to pay $18 million in mercury storage case

Southern Union must pay $18M in RI mercury case

PROVIDENCE, R.I. — The Southern Union gas company was ordered Friday to pay $18 million for illegally storing mercury waste, which was exposed to the public five years ago when vandals stole the hazardous liquid from a rundown building and spilled it at an apartment complex.

U.S. District Judge William Smith on Friday fined the Texas company $6 million and ordered an additional $12 million in payments to the community, saying it had committed a “serious crime” by storing liquid mercury at a neglected building in Pawtucket without the required permit.

“It must be enough to get the attention of other companies who might be doing the same thing,” Smith said of his penalty.

Southern Union in 2001 began removing old gas regulators containing mercury from customers homes and stored them at a building it owned in a densely populated section of Pawtucket. The mercury was initially removed from regulators and then shipped out of state, but the contract soon lapsed, and the regulators and loose mercury began accumulating in glass jars, a plastic jug and other containers around the building.

A group of vandals broke into the building in September 2004, stole several vials and dumped the liquid on the ground and at a nearby low-income apartment complex, endangering residents and displacing them for two months, prosecutors said.

About 90 residents in July settled a lawsuit over the spill for undisclosed terms. Some residents had unacceptably high levels of mercury in their blood and showed other symptoms of mercury exposure, such as hair loss and rashes, but all have recovered, said their lawyer Mark Dana.

Southern Union lawyer John Tarantino asked for leniency, saying the case marked the first time in the company’s 80-year history that it had faced criminal charges. He said Southern Union had already spent more than $6 million cleaning up the mess and had placed affected residents in a hotel and offered them food vouchers.

“Southern Union is not a chronic offender. It is not a company that has a reputation for being in trouble with regulators who is constantly being fined,” Tarantino said.

Smith agreed to stay the fine pending an appeal.

Of the $12 million in community payments, the judge said, $11 million will go toward an endowed fund to dispense grants for environmental remediation and education projects and children’s health initiatives.

Southern Union faced a maximum fine of $38.1 million — or $50,000 for each of the 762 days the mercury waste was illegally stored.

Federal prosecutors sought a fine of more than $20 million, saying Southern Union tried to keep the spill quiet by failing to alert the city fire department. Puddles of mercury remained on the ground for weeks.

“This thing could have been avoided, this whole situation, if they had a mind to comply with the law. They just didn’t care,” said Assistant U.S. Attorney Terrence Donnelly.

The company was acquitted at a jury trial last year of two other charges of failing to report the spill and of illegally storing gas regulators that still contained the mercury.

(This version CORRECTS maximum daily fine allowable under federal law to $50,000, not $500,000.)