GM's claim against disposer set for jury trial

Collection dispute
The issue: GM's reimbursement demand against disposal company

Where it stands: Texas judge orders trial on maker's $2 million-plus claim.

A late October trial is scheduled in U.S. District Court in Dallas on General Motors' $2 million-plus reimbursement claim against a company that disposed of industrial waste from some of its plants.

The dispute arose from GM's 1989 contract with a predecessor of disposer American Ecology Environmental Services Corp. to remove and dispose of wastes from six auto plants in the South.

In 1996, several hundred plaintiffs sued American Ecology for improper management and disposal of hazardous waste at a Winona, Texas, landfill, where there had been toxic spills, explosions and emissions. The plaintiffs alleged that the release of toxic and hazardous substances caused personal injuries and property damage.

GM and other American Ecology customers were named as co-defendants in that case. GM, the only automaker involved, paid the plaintiffs a $1.5 million settlement and incurred more than $505,000 in legal expenses, according to its claim. It then sued American Ecology to recoup its money.

In an Aug. 30 pretrial decision, U.S. District Judge Sam Lindsay ruled that American Ecology is liable to GM under an indemnification provision in their contract. He also found that GM's $1.5 million settlement was reasonable.

He ordered a jury trial, slated for the week of Oct. 22, to determine the amount GM is entitled to collect.

GM spokesman Jay Cooney said, "We prevailed on the liability side, and we fully expect to prevail on damages."

R. Brian Craft, a Tyler, Texas, lawyer who represents American Ecology, said his client will have the right to appeal its liability and the amount of damages after the trial.

You can reach Eric Freedman at freedma5@msu.edu

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