The costs of contamination

Neighbors sue Texas Instruments over pollution

Apr 29, 2007, 11:00pm CDT Updated Apr 26, 2007, 8:04pm CDT
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Jeff Bounds Staff Writer

More than 100 African-Americans have quietly filed a lawsuit against Texas Instruments Inc., alleging that 129
properties they own in historic Hamilton Park have been contaminated by chemicals released by the
semiconductor giant.

The group of 111 represents ownership of about 17% of the 740-odd lots in Hamilton Park, which opened in
North Dallas in the early 1950s as a housing development for blacks of all income levels.

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CLEANUP CONTROVERSY: Emanuel Allen, one of the plaintiffs in the lawsuit against TI.
The complaint charges that TI has negligently released chlorinated solvents onto its property at its 500-acre
headquarters campus in Far North Dallas, as well as the surrounding area. "TI has also improperly disposed (of)
chemicals in the areas surrounding the TI site," the complaint alleges.

TI denies wrongdoing, and says the plaintiffs' claims are without merit. "We don't think there's any basis for the
lawsuit, based on over 20 years of monitoring, regulatory oversight and testing," says Philip J. Ritter, senior
vice president of public affairs at TI.

The under-the-radar lawsuit, filed in state district court in Dallas, pits a relatively powerless group of local
residents against a Texas corporate icon with a longtime reputation for community-mindedness. For instance, TI
recently drew widespread praise for choosing to build a new, environmentally friendly chip plant in Richardson
-- a decision that was said to have saved thousands of U.S. jobs. The lawsuit also sparked an examination of the
scope of TI pollution issues around its Dallas headquarters plant -- see accompanying story on Page 1 -- and the
way those issues have been addressed since the 1980s.

Hamilton Park is located in North Dallas, just southeast of the intersection of Interstate 635 and North Central
Expressway. The headquarters plant for TI (NYSE: TXN), the world's largest maker of chips for cellphones, is
located roughly half a mile north of the neighborhood.

Attorneys for the plaintiffs say they're seeking relief for property damage of unspecified amounts and not health
problems, even though the two primary chemicals listed in the complaint -- trichloroethylene, known as TCE,
and tetrachloroethene, known as PCE -- may be carcinogens, according to the Environmental Protection Agency.

"Property damage is much easier to prove than health damage," says Victor Flatt, the A.L. O'Quinn Chair in
Environmental Law at the University of Houston Law Center. Flatt, who's not affiliated with the litigation, says
environmental suits since the early 1990s have sought property rather than health-related damages, mainly
because the burden of proof is much higher for health claims.

The plaintiffs' beef in court is about what an environmental study they commissioned describes as below-
ground contamination by TCE and PCE. Plaintiffs attorneys say there are "toxic vapors in the sub-soil."

After evaporating from groundwater, the chemicals TCE and PCE can migrate upward by entering the air
spaces between soil particles, according to the plaintiffs' complaint. The chemicals eventually can move through
the foundation of buildings and homes and contaminate indoor air, the complaint says.

There are two main fixes to the problem that have been used in similar cases. One involves sticking what
amounts to a glorified vacuum cleaner into the ground and sucking out the PCE and TCE fumes. This approach
will not remove all of the chemical contamination, experts say.

The other method calls for inserting a slab of concrete and other materials underneath the building or home to
act as a barrier to the chemicals. This does not remove the contamination, but supposedly prevents it from
migrating up into the property.

In either case, plaintiffs' attorneys say, the below-ground contamination must be disclosed to potential buyers of
affected properties, which could affect their sales values.

That disclosure is required under state law, according to Richard Adams, a partner in the Dallas office of
Hunton & Williams LLP.

Adams says that homeowners who know of alleged contamination in their neighborhood would be wise to
disclose the problem when selling properties there, even if its existence has not been proven and even if they're
not part of the litigation.
"If they are aware of the lawsuit ... the prudent thing to do would be to disclose it," says Adams, who is not
connected to the case and who handles environmental matters.

It's unclear whether notice of the contamination is being delivered to potential homebuyers in Hamilton Park,
because so few houses are sold there.

"It's not a big resale area," which is a good thing, says Sherryl Wesson, branch manager of Ebby Halliday
Realtors' northeast Dallas office. "People have been in their homes for years there. You don't see a lot of homes
for sale."

In general, Wesson says, homes in Hamilton Park sell for less than homes in the surrounding area, partly
because they're older and smaller. Since 2005, Wesson's records show, 21 Hamilton Park homes have sold for
an average of $69,402. That compares to the larger, nearby "Stultz" neighborhood nearby, where 69 sales
averaging $131,663 were sold in the same time frame.

In an April 12 letter to Hamilton Park property owners, Ritter said TI does not believe that home values have
suffered because of the supposed contamination, "based on our extensive scientific data and our review to date
of real estate transactions in the neighborhood."

The plaintiffs' environmental study was conducted in 2006 by California-based Soil Water Air Protection
Enterprise, a for-profit company that detected TCE, PCE and two other harmful chemicals at various homes
along Hallum Street in Hamilton Park.

Gina Solomon, a senior scientist for the Natural Resources Defense Council and an assistant clinical professor
of medicine at the University of California at San Francisco, says SWAPE is a "reputable company" that in the
past has worked for plaintiffs and communities in environmental contamination cases nationwide.

One of those chemicals SWAPE detected, called 1,2-Dichloroethane, or 1,2-DCA for short, is used for
removing grease and glue, and irritates the mouth, nose, throat and lungs when inhaled in large quantities,
according to the Wisconsin Department of Health & Family Services. It can also cause liver and kidney damage,
according to the Agency for Toxic Substances and Disease Registry at the Centers for Disease Control in
Atlanta.

The other chemical, 1,1-Dichlorethane, is a degraded form of yet another toxic chemical found at about half of
all U.S. Superfund sites, according to the Western Region Hazardous Substance Research Center at Oregon
State University. The Superfund program is the federal government's trust fund for cleaning up abandoned and
inactive hazardous waste sites.

The SWAPE study says chemical contamination "appears to be more severe at greater depths." The SWAPE
soil probes that detected the chemicals were placed at points 5 feet and 12 feet below ground.

More tests set

"In the soil, you wouldn't really expect to find any of those chemicals" detected by SWAPE, says Thomas M.
Dydek, who has a solo toxicology practice in Austin and is not affiliated with SWAPE or the lawsuit. They "are
not naturally occurring substance(s) in the soil. When you find (them) there, it does suggest something is
happening underground that's not a natural process."

The SWAPE study also found "detectable concentrations" of volatile organic compounds in the air of 24
residences on Hamilton Park's Hallum, Bunche, Ellery, Regal, Campanella and Oberlin streets. Volatile organic
compounds evaporate easily into the air, and include chlorinated solvents like TCE and PCE.
But Dydek says that the levels of chemicals that SWAPE found in the residences' air were not much different
from what you'd expect to find in homes anywhere. "There are levels of PCE and TCE present in most houses,
because there are indoor (and outdoor) sources of those chemicals," such as dry cleaning, Dydek says.

Further investigation is needed to sort out whether the chemicals found in the air of the homes are coming from
the ground or elsewhere, and to determine how large an area is affected by the underground compounds, Dydek
adds.

"We have a series of tests scheduled," says Ted Lyon of the Mesquite law firm Ted Lyon & Associates, one of
three firms handling the plaintiffs' case. "We will probably do testing for the next 10 months."

A key element of the case will be what 2006 records from the Texas Commission for Environmental Quality
show are three plumes of chemically contaminated groundwater on and just south of the main TI campus in Far
North Dallas, just north of Interstate 635.

There is no evidence of any contamination from those plumes on or near the TI operations that border Forest
Lane in North Dallas, which is due east of Hamilton Park.

A 2004 report commissioned by TI on soil and groundwater conditions at the TI facility -- which listed only two
plumes -- said they were caused by "historical, accidental releases of cleaning solvents and fuel compounds."

Laurie Lehmberg, TI's manager of worldwide environmental and energy affairs, says the problem was with
underground storage tanks that leaked. Once the problem was discovered in the early 1980s, she says, TI
informed state regulators and "spent millions of dollars removing underground collection systems from sites
around the world."

The semiconductor industry as a whole has largely moved away from using underground tanks, experts say.

The plumes contain a number of chemicals, and maps of them provided to the state by TI show they are shaped
like flattened ovals and, in the case of TCE and PCE, run along the southern border of the TI campus in Far
North Dallas, extending south toward Interstate 635. A plume of a chemical called "cis-1,2-Dichloroethene," a
solvent that in high concentrations can affect the central nervous system, extends southwest toward the Dallas
Area Rapid Transit LBJ Central rail station, the maps show.

TI has been "investigating" the plumes since 1983, and currently is engaging in a voluntary cleanup of the
contamination under the supervision of the TCEQ, according to agency records and TI executives.

Just what the cleanup should be, and when it will be completed, is open to question. So far, TI has removed
underground storage tanks and some contaminated soil, and done some treatment of contaminated groundwater,
according to TI executives and TCEQ records. In the April 12 letter to Hamilton Park property owners, Ritter
wrote that the company has "initiated cleanup measures to limit elevated concentrations of solvents in
groundwater from affecting the neighborhood."

Legal standard

If the plaintiffs win their case, they could get one of two types of damages -- whichever is less, Lyon says. One
is the difference in the fair market value of their properties before the pollution occurred and the value after the
contamination happened. The other is the cost of cleanup.
Some residents of Hamilton Park report seeing changes in the natural habitat of the area. Lincoln Allen, of the
12700 block of Hallum Street, and other residents say once-abundant wildlife in and around Floyd Branch
Creek has largely disappeared. SWAPE did not test the creek, which runs to the east of Hamilton Park.

Archie Cole, of the 8300 block of Bunch Drive, says the creek once was "filthy" with water moccasins. "All of
a sudden, they were all gone," he says. "It was a dead creek. That's all it was."

Debra Bufford, a Plano resident whose parents still live in Hamilton Park and whose father, Emanuel, is a
plaintiff in the lawsuit, wonders whether contamination is behind the loss of wildlife she remembers growing up
in the area in the early and mid 1960s.

"My question is, and has been, is it coming from the manufacturing aspect of TI? The chemicals and what
they're producing over there?" she says.

In a 2007 state filing with the TCEQ about the contamination, TI says that one chemical plume extends to the
creek, but that the creek does not appear to present a means for humans or the ecology to be exposed to
chemicals.

Indeed, there are other factors, such as construction of roads and buildings in the area, that could account at
least in part for the diminishment of wildlife.

Plumes have 'stabilized'

The 2004 soil and groundwater report that TI commissioned and provided to the state concluded that the two
chemical plumes, along with soil beneath a nearby TI parking lot, "have not adversely impacted the Hamilton
Park residential area, nor are they expected to do so at any point in the future."

In addition, the TI report states that the plumes:

Have diluted and weakened over time, "and are not expected to expand in size, change flow directions,
or increase in concentration over time."
Are not migrating toward Hamilton Park. "They migrate towards Floyd Branch Creek," which is east of
the TI campus, but "do not adversely affect water quality" in the creek, the study says.

Beyond that, a May 18, 2004, letter from the Hamilton Park Civic League to residents cited a TI report
concluding that air emissions from TI's campus and soil and groundwater under the company parking lot
adjacent to Hamilton Park "are well within state levels and do not negatively impact the residents of Hamilton
Park."

The letter was co-signed by two TI execs, Patrice Tompkins-Everidge and Lewis McMahan.

Ritter's April 12 letter to Hamilton Park property owners says the company has "20 years of scientific data that
demonstrates our operation has had no adverse impact on the neighborhood.

Lehmberg, the head of TI's environmental activities, says the plumes have "stabilized" and are shrinking over
time.

TI executives say that as a result of the litigation, the company has been doing more testing to reaffirm its belief
that its operations have not had a negative impact on Hamilton Park.
Among other things, the company has sampled water from four groundwater wells that a previous plaintiff law
firm had drilled in Hamilton Park. TI officials and Hamilton Park residents say that firm looked into the
contamination allegations and opted not to take the case.

Ritter's letter says no solvents or chemicals were detected in the well sampling, and that this "supports previous
data that shows there is no groundwater flowing from Texas Instruments into Hamilton Park. We are collecting
additional data and are in the process of analyzing that information."

Meantime, one local official says the city will be watching the Hamilton Park lawsuit with interest.

"I'm grateful to the Hamilton Park folks for bringing (TI's contamination problems) to light," said City Council
member Bill Blaydes, whose District 10 includes some TI facilities and the Hamilton Park neighborhood.

"That takes some strength in itself, because TI has been a strong supporter of Hamilton Park," Blaydes said. "If
you're going to take on the dog, you better hope it doesn't turn around and bite."