Southern Union Company, Hazardous Waste, RI 2010

Pawtucket, RI – A Houston-based energy company, Southern Union Company, has been held accountable for the illegal storage of hazardous waste, specifically liquid mercury, at a facility in Pawtucket, Rhode Island. The case, stemming from events that unfolded between 2001 and 2004, culminated in a $6 million fine, $12 million in community service payments, and two years of probation following a jury conviction in 2008. The 1st Circuit Court of Appeals affirmed the sentence on December 22, 2010, rejecting Southern Union’s appeal of both the EPA’s authority and the financial penalty.

The saga began when Southern Union, then the owner of New England Gas, started collecting mercury-containing gas regulators from customers’ homes. Instead of properly disposing of these hazardous materials, the company stockpiled them at an unsecured facility on Tidewater Street. Despite initially contracting with an environmental services company to handle the mercury, that arrangement ceased in 2001. However, the collection and storage continued, with loose liquid mercury accumulating alongside the regulators in a poorly maintained shed. This negligence created a dangerous situation that would ultimately impact the local community.

In September 2004, the facility was broken into by three youths who stole several containers of mercury. They proceeded to spill the highly toxic substance both at the facility and at a nearby apartment complex. The contamination went undetected for approximately three weeks, during which time the mercury spread, necessitating the evacuation of the apartment complex and the displacement of its 150 residents for two months while a comprehensive cleanup operation was conducted. The incident sparked outrage and prompted a thorough investigation by the Environmental Protection Agency (EPA) and the Department of Justice (DOJ).

Federal prosecutors successfully argued that Southern Union violated the Resource Conservation and Recovery Act (RCRA), specifically 42 U.S.C. 11045(b)(4) and 42 U.S.C. 6928(e), by storing hazardous waste without a required permit and through negligent handling. The initial sentence, handed down by U.S. District Court Judge William E. Smith, included a $6 million criminal fine and $12 million in community service payments directed to organizations such as the Rhode Island Foundation, the DEM Emergency Response Fund, and Hasbro Children’s Hospital. Southern Union’s appeal questioned the legality of the EPA’s enforcement powers and the size of the fine, but the First Circuit Court of Appeals upheld the ruling, emphasizing the severity of the company’s disregard for public safety and environmental regulations.

The appeals court explicitly noted that Southern Union’s actions, “willingness to put a densely-populated residential community…at risk by storing hazardous waste under deplorable conditions,” warranted a significant penalty to deter similar misconduct by other large corporations. U.S. Attorney Peter F. Neronha hailed the decision as a victory for responsible environmental practices, stating that “only one thing – financial pain – will prevent irresponsible corporations from polluting our neighborhoods.” Michael E. Hubbard, Special Agent in Charge of the EPA-CID, added that the case sends a clear message that corporations cannot treat urban neighborhoods as dumping grounds for hazardous waste.

However, on November 20, 2013, an amended judgement was issued by the District Court, significantly altering the original sentence. The $6 million fine was reduced to $0, and the community service payment was lowered to $500,000, to be distributed to various entities. Southern Union also received a two-year probation period and was mandated to conduct an environmental compliance audit. The reason for this amended judgement is not fully clear, but it represents a significant reduction in the penalties originally imposed.

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Key Facts

Defendant: Southern Union Company
Crime: Illegal storage of hazardous waste (liquid mercury)
Location: Pawtucket, Rhode Island
Year: 2010 (initial sentencing, appeals upheld conviction)
Statutes Violated: 42 U.S.C. 11045(b)(4), 42 U.S.C. 6928(e) – Resource Conservation and Recovery Act (RCRA)
Initial Penalties: $6 million fine, $12 million in community service, 2 years probation
Amended Penalties (2013): $0 fine, $500,000 community service, 2 years probation, environmental compliance audit
Impact: Evacuation of 150 residents from an apartment complex due to mercury contamination.

Source: EPA ECHO Enforcement Case Database

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