AUSTIN, Texas -- Dynagen Inc., a subsidiary of General Tire, will pay a record $1.4 million fine and $80,000 in legal fees to settle a pollution lawsuit against its rubber manufacturing plant in Odessa, officials said Wednesday.
State District Judge Tryon Lewis of Odessa gave preliminary approval to the proposed settlement on Tuesday. The judgment will be finalized Oct. 14 unless the state acts to alter it.
Under a new state law, the proposed judgment will be open for public review and comment for 30 days. Attorney General Dan Morales will then decide whether to accept or withdraw it.
In addition to the $1.4 million fine -- a record under the Texas Clean Air Act -- the judgment also calls on Dynagen to install air pollution control equipment and initiate practices that will cost $12 million. The company must also pay the state $80,000 in legal fees.
The fine was based on a calculation of Dynagen's 'pollution profit' -- the amount of money a company saves by failing to comply with environmental protection laws. Attorneys for the state said it was the first time such a calculation was used to establish a fine.
Stephen McDonald, a University of Texas economics professor who made the calculation, used a computer program to determine the amount of money that Dynagen saved by delaying expenditures needed to achieve compliance with pollution laws.
The computer recommended a fine of $4.4 million, but Dynagen was given credit for agreeing to install $3 million worth of pollution control equipment beyond what is required by law.
Assistant Attorney General David Preister, who prosecuted the case, said the method of computing the fine sends the message that 'companies can't profit by delaying compliance with the environmental laws of Texas.'
The lawsuit against Dynagen was filed two months after the Austin American-Statesman reported that Texas Air Control Board officials had removed their key investigator, Neil Carman, from the Dynagen case and suppressed his reports on air pollution incidents.
Carmen and his reports were subsequently reinstated. The case against Dynagen involved hundreds of alleged air pollution violations.
