Judge hears arguments in city’s effort to dismiss Exide case
She’ ll decide fate of suit, whether deal’s focus was health or land
Was the city of Frisco acting in its governmental capacity or entering into a proprietary land deal when it signed the 2012 agreement to close the Exide Technologies plant in exchange for buying about 180 acres?
The answer will determine whether the civil suit Exide filed in federal court against the city can proceed.
Attorneys presented arguments Thursday on the city’s motion to dismiss the suit in federal court in Plano. Magistrate Judge Kimberly Priest Johnson said she would rule later.
If Frisco was performing its government functions such as those related to residents’ health and safety, it would have immunity from the suit. If the agreement was part of a real estate transaction, the city would not be protected.
The plant originally opened in 1964 along Frisco’s Fifth Street just south of downtown. At the time of Exide’s closure in November 2012, it employed 134 people and was the only secondary lead smelter operating in Texas. It recycled as much as 6 million used automotive and industrial batteries a year.
But Exide also generated a host of contaminants, including lead, cadmium and arsenic. The Texas Commission on Environmental Quality had issued several enforcement actions against the company. And with a nod to the dangers from lead, the U.S. Environmental Protection Agency revised its rules and found that the area around the Frisco plant exceeded the air quality standard for the heavy metal.
The months leading up to the 2012 master settlement agreement included lots of heated exchanges between both sides, threats of legal action and the early steps of amortization — a legal tool cities use to remove unwanted businesses.
The agreement signed that June called for Exide to dismantle its operations and clean contaminated areas. In exchange, the city would purchase the vacant land surrounding the plant’s operations for $45 million. The funds would come from the Frisco Economic Development Corporation and the Frisco Community Development Corporation.
Mark Strachan, who represents the city, argued Thursday that Frisco entered the agreement to protect the health, safety and welfare of its residents. The deal gave the city the tools needed to stop Exide’s ongoing pollution and clean up decades of contamination.
“Using money to achieve that health and safety does not render it proprietary,” he told the court.
Exide attorney Van Beckwith argued that Frisco envisioned a future centered on shopping malls and entertainment facilities. And the city used its development corporations, which he claimed are not protected through immunity, in the deal to gain more land to develop.
Beckwith cited the landmark developments along the Dallas North Tollway that make up what’s known as the $5 Billion Mile. A portion of Exide’s property faces the tollway and is less than 2 miles north of the Dallas Cowboys’ new headquarters and practice facilities.
“Frisco wanted the land that faced the billion-dollar tollway,” he said.
Exide’s civil suit, filed in May, claims Frisco is in breach of the 2012 agreement. It cites the city’s refusal to add more money to an escrow account for cleanup and its attempts to block Exide from receiving a permit for wastewater discharges. City officials have denied those claims.