Although the toxic Exide Technologies battery recycling plant in the city of Vernon has been shut down since March, a beehive of activity continues around the bankrupt company still striving to reopen it.  

A new lawsuit filed this week in Los Angeles County Superior Court cites a known, and growing, list of toxic transgressions in alleging that a cover-up by top employees at Exide endangered the health of 60 children living near the plant.

One attorney for the plaintiffs said it would be the first in a series of five similar lawsuits soon to be filed. The group of lawyers has 475 clients, according to the Wall Street Journal, who claim they were made ill by the plant’s arsenic and lead emissions that spread throughout the neighborhood.

The Journal said the lawyers are going after individuals, and not the company, because of protections in place during Exide’s Chapter 11 bankruptcy proceedings. The company declared bankruptcy shortly after the plant closed but continues to make repairs and negotiate with regulators a path back to productivity, perhaps in 2015.

Earlier this month, U.S. Bankruptcy Judge Kevin Carey told Exide shareholders they were hosed, according to Bloomberg. They weren’t going to get any of their investments back because the reorganization agreed to by senior lenders and Exide didn’t leave any money on the table.

The settlement reportedly removes around $600 million in debt from Exide’s ledger if the company can’t find a buyer while in bankruptcy. The company says that its problems in Vernon have cost it $69 million since March.

When the plant is fully operational, it recycles lead-bearing scrap materials and 23,000 to 41,000 automotive batteries daily as a cheap source of lead for its battery-making facilities. Neighbors complained about being ill for years and the company was regularly in trouble with regulators but kept on polluting until a South Coast Air Quality Management District (AQMD) report a year ago said 110,000 people were at higher risk of cancer because of the plant's arsenic emissions. The AQMD filed a civil suit for $40 million.

Exide has operated with a temporary permit for more than a quarter century, taking advantage of a permitting system that the state Department of Toxic Substances Control (DTSC) admits (pdf) is regarded with “significant dissatisfaction.” The company reached an agreement with DTSC last month to spend $9 million on cleaning up polluted soil around the plant and put $38.6 million aside for plant cleanup in case they don’t reopen.

Exide stock is trading at 0.06. Any damages recovered from the lawsuits are expected to come from insurance companies.

–Ken Broder

To Learn More:

Lawsuit Alleges California Battery Recycling Plant Caused Health Problems (by Sara Randazzo, Wall Street Journal)

New Suit Filed against Exide Plant (by Kim Christensen and Tony Barboza, Los Angeles Times)

Exide Shareholders Lose Bid for Bigger Role in Bankruptcy (by Steven Church, Bloomberg)

State Reports Show Exide Leaking Hazardous Waste Far from Its Vernon Home (by Ken Broder, AllGov California)