Financial Settlement for South Carolina’s Philip Services Site

The former Philip Services hazardous waste facility in Rock Hill, South Carolina, is being cleaned up under a 2022 consent decree that requires a group of companies once tied to the site to reimburse the state roughly $4.4 million in past response costs and place about $24 million in a dedicated account to fund the remaining remediation. The agreement, filed as Civil Action No. 0:22-cv-03445-SAL, involves the South Carolina Department of Health and Environmental Control, the United States, and a group of potentially responsible parties. It shifts the burden of finishing the cleanup off the state and onto the companies whose waste ended up at the site.¹

The Site and How It Got Here

The property sits at 2324 Vernsdale Road and covers about 44.5 acres of former industrial land, with another 91 acres of undeveloped woodland nearby. Operations began in 1966 as Quality Drum, which stored, treated, and recycled waste. A hazardous waste incinerator was added in 1981. The facility passed through several owners — Stablex in 1983, ThermalKEM in 1987, and Philip Services Corporation in 1995 — and operated the entire time as a Resource Conservation and Recovery Act hazardous waste treatment, storage, and disposal facility.²

Philip Services submitted an incinerator closure plan in 1998, and the incinerator building came down in 2004. Before closure was completed, however, Philip Services filed for Chapter 11 bankruptcy in June 2003, leaving its environmental obligations at Rock Hill unresolved.³

Site investigations found volatile organic compounds in soil and groundwater, metals in soil above background levels, and liquid-phase hydrocarbons. Sediment and surface water samples did not exceed levels requiring remediation.²

Why a New Settlement Was Needed

When Philip Services entered Chapter 11, the bankruptcy court approved a settlement on December 22, 2003, between DHEC, the EPA, and the Philip Services debtors. A custodial trust was created, with Restoration & Redevelopment Solutions, LLC as trustee, to manage funds for site response actions and potentially sell the property. For the Rock Hill site, governmental parties received $2,981,934 in financial assurance and $1.3 million paid over five years.⁴

By June 2014, the trustee had reimbursed DHEC $3,144,434.13 in past response costs. But the numbers kept growing. As of November 2021, DHEC estimated its total past response costs at roughly $8.67 million, with about $5.5 million of that still unrecovered — and the bulk of the actual cleanup still ahead. That gap between what the bankruptcy trust could cover and what the site would ultimately cost is what drove the state to negotiate a new deal.¹

What the 2022 Consent Decree Requires

The 2022 settlement brings in the companies that sent hazardous waste to the Rock Hill facility. DHEC, the United States, and the Philip Services Site PRP Group agreed to the consent decree filed in the U.S. District Court for the District of South Carolina. The United States participates both as a regulatory party and as a settling party on behalf of federal agencies whose waste reached the site.¹

The PRP Group is organized into three categories:

Work Parties, which are responsible for designing and carrying out the physical cleanup.
Cash Out Settlors, which resolve their liability through one-time payments.
Re-Opener Settlors, whose liability can be revisited under certain conditions.

Financially, the settling parties must reimburse DHEC approximately $4.4 million for past and certain future response costs and set aside about $24 million in a special account to fund the remediation described in the 2016 Record of Decision. The Work Parties must also maintain financial assurance guaranteeing their ability to pay for and perform the cleanup, and they carry responsibility for periodic reviews and any additional response actions DHEC selects.³

In exchange, the settling parties receive contribution protection against claims from non-settling parties and a covenant not to sue from DHEC. The consent decree explicitly states that it is not an admission of liability by any party. The court and the parties described the agreement as intended to be “fair, reasonable, in the public interest” and designed to “expedite the remediation of the Site, avoid protracted, complex, and costly litigation among the Parties, and resolve any known existing and/or potential claims between them.”¹

What the Cleanup Money Pays For

The $24 million funds the remedy DHEC selected in a June 2016 Record of Decision. That plan calls for several actions at the site:

Excavating metals-contaminated soil and disposing of it off-site.
Multi-phase extraction in the fuel oil area.
In situ thermal treatment for volatile organic compounds in soil and groundwater.
Hydraulic containment of contaminated groundwater.
Ongoing groundwater monitoring.
Institutional controls such as deed restrictions and fencing.

Because the Work Parties are the ones performing the cleanup under DHEC oversight, the state is no longer in the position of advancing money for work at an abandoned site and hoping to recover it later.³

Where Things Stand

With the consent decree in place, the PRP Group is funding and carrying out the cleanup under DHEC supervision. The remediation plan is a multi-year effort covering thermal treatment of contaminated soil and groundwater, excavation of metals-laden soil, and long-term monitoring. DHEC remains the lead agency, a role it has held since Philip Services walked away from the site in bankruptcy two decades ago.² Philip Services Corporation itself is now listed as out of business, which is why the responsibility — and the cost — has landed with the companies that used the facility rather than the one that ran it.⁵

1
SC DHEC. Philip Services Site Settlement and Consent Decree
2
SC DHEC. Philip Services Corporation
3
SC DHEC. Philip Services Corporation Site Community Meeting Presentation
4
Federal Register. Notice of Lodging of Settlement Agreements in Philip Services Corporation
5
PitchBook. Philip Services Corporation Company Profile