Texas energy company Southern Union appeals $18 million fine for illegal mercury storage in RI

Texas co. appeals $18M RI mercury storage penalty

PROVIDENCE, R.I. — A Texas energy company convicted of illegally storing hazardous mercury in a rundown Rhode Island building asked a federal appeals court Tuesday to throw out an $18 million penalty, calling the punishment “grossly excessive.”

The mercury, stored by the Southern Union gas company in a building in Pawtucket, was exposed to the public in 2004 after vandals broke in and dumped a container of the hazardous liquid at a nearby apartment complex.

A federal judge last October fined the company $6 million and ordered it to pay an additional $12 million for storing the mercury without a permit.

Southern Union on Tuesday appealed the criminal conviction and penalty to the Boston-based 1st U.S. Circuit Court of Appeals. The company said the punishment was more than 50 times higher than penalties imposed on companies that commit much worse environmental violations.

The company said the most it should face was $50,000, or the maximum fine for a single day of a violation.

“But for the intervening criminal acts of vandals who stole the mercury from Southern Union’s locked storage room and spilled it at an apartment complex, Southern Union’s mercury storage posed no threat to the environment or the community,” lawyers for the company wrote.

The penalty was stayed while the company appealed.

Southern Union in 2001 began a program to remove from customers’ homes old gas regulators containing mercury, a toxic element that can cause skin rashes and muscle weakness and disrupt the functioning of the kidneys and central nervous system in people exposed to high quantities.

Workers extracted the mercury from the regulators so it could be shipped out of state and, in the meantime, stored the substance inside a former manufactured gas plant in Pawtucket.

The company says it always intended to recycle the mercury it was storing, though federal prosecutors say workers were allowing it to haphazardly accumulate in assorted receptacles around the neglected facility.

The company says less than one gallon of mercury was stored at the building in the fall of 2004, when a group of vandals broke in, smashed several containers and tracked the toxic substance around a neighboring, low-income apartment complex.

About 90 residents settled a lawsuit last year for undisclosed terms, and their lawyer says some had symptoms such as hair loss and rashes from exposure to the spill.

Southern Union says it spent more than $6 million to clean up the mess, reimbursed displaced residents for damaged property and paid for housing.

Tom Connell, a spokesman for the U.S. Attorney in Rhode Island, declined to comment but said his office would be responding to the company’s appeal.

The company was acquitted at a 2008 jury trial of two other charges of failing to report the spill and of illegally storing gas regulators that still contained the mercury.

The company also argues in its appeal that the federal government lacked the regulatory authority to prosecute it for illegal mercury storage.

(This version CORRECTS SUBS graf 9 to correct to ‘manufactured gas plant’ sted ‘gas manufacturing plant.’. Moving on general news and financial services.)