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IN THE UNITED STATES COURT OF FEDERAL CLAIMS __________________________________________ ) SEVENSON ENVIRONMENTAL ) SERVICES, INC., ) ) Plaintiff, ) ) Case No.: 05-1075C ) Judge Thomas C. Wheeler vs. ) ) THE UNITED STATES, ) ) Defendant, ) and ) ) SHAW ENVIRONMENTAL, INC., ) ) Defendant-Intervenor. ) ______)

STATEMENT OF STIPULATED FACTS

A. 1.

National Hazardous Waste Cleanup Initiatives This case involves cleanup and remediation work at one of the many waste

disposal sites in the United States that are contaminated with hazardous waste and petroleum products from a variety of industrial sources. See generally "Cleaning Up the Nation's Waste Sites: Markets and Technology Trends," (EPA, 2004 ed.), Executive Summary at v. 2. The EPA has established methods for determining whether an environmental

medium is contaminated and requires action. Method 1311, the "Toxicity Characteristic Leaching Procedure" (TCLP), is designed to determine "the mobility of both organic and inorganic analytes present in liquid, solid, and multiphase wastes." EPA Publication, TCLP Method 1311 (effective November 8, 1990). To determine "toxicity," EPA's regulations identify 40 possible contaminants and regulatory levels. If any of the contaminants in a representative

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sample exceeds the regulatory level, the sample is considered to be a Resource Conservation and Recovery Act (RCRA) hazardous sample. 40 C.F.R. § 261.24, Table 1. As relevant here, the regulatory level for lead is 5.0 milligrams per liter (mg/l). Id.

B. 3.

Sevenson's Patents The five Sevenson patents at issue are U.S. Patent Nos. 5,527,982 ("the `982

patent"); 5,732,367 ("the `367 patent"); 5,916,123 ("the `123 patent"); 5,994,608 ("the `608 patent"); and 6,139,485 ("the `485 patent"). 4. Sevenson's technology is based upon chemical bonding reactions involving lead

and radionuclides with a combination of treatment chemicals, such as a combination of sulfates and phosphates. 5. One objective of Sevenson's patented technology is to reduce the amount of

leachable lead at a hazardous site to below EPA's TCLP standard. See `982 Patent, col. 3, lines 42-48 ("It is an object of the present invention to provide a method of treating metal-bearing materials, contaminated soils and waste effluent, and solid wastes containing hazardous levels of leachable metal. It is a further object to provide a method which decreases the leaching of lead in lead-bearing materials to levels below the regulatory limit of 5 mg/l by TCLP test criteria.").

6.

The five Sevenson patents contested in this action are all related. The issue dates

of the five patents are as follows: `982 patent ­ June 18, 1996; `367 patent ­ March 24, 1998; `123 patent ­ June 29, 1999; `608 patent ­ November 30, 1999; `485 patent ­ October 31, 2000. The `982 patent contains 31 claims, of which Sevenson is asserting claims 1-5 and 9. The `367 patent contains 16 claims, of which Sevenson is asserting claims 11, 13, 14, and 16. The `123 patent contains 28 claims, of which Sevenson is asserting claims 1-7 and 15-20. The `608 patent contains 40 claims, of which Sevenson is asserting claims 1-7, 11-24, and 26-30. The `485 patent contains 36 claims, of which Sevenson is asserting claims 1-6 and 15-36.

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C. 7.

Corps of Engineers' Contracts at the Colonie Site The contaminated site at Colonie, New York, near Albany, is owned by the

United States Government Department of Energy ("DOE"), and has been designated for remediation under the Formerly Utilized Sites Remedial Action Program ("FUSRAP") that the Army Corps of Engineers executes for the DOE. The hazardous substances found at the Colonie site include, inter alia, lead and radionuclides. The contaminated soil resulted from activities conducted at the Colonie site from 1930 until the 1980s. 8. The Corps of Engineers awarded an initial contract to ICF Kaiser Engineers, Inc.

("ICF Kaiser") for cleanup work at the Colonie site. In April 1999, the IT Group, Inc. acquired the Colonie site remediation contract from ICF Kaiser. IT Corporation ("IT") then acquired the contract from the IT Group, and performed the remediation work for the Corps of Engineers at the Colonie site. On January 16, 2002, IT filed for bankruptcy. Shaw Environmental, Inc. obtained the assets of certain IT companies on May 3, 2002, and continued performing the cleanup work at the Colonie site. 9. At the Colonie site, some of the excavated soils contained lead which leached

above the RCRA TCLP criteria of 5.0 mg/l. D. 10. The Phosphoric Acid Used At The Site In Colonie, New York The Army Corps of Engineers used "Prayphos P5" phosphoric acid at the Colonie

site. This product was manufactured by the purified wet-process, where phosphate minerals, largely calcium phosphate minerals, within the phosphate rock are reacted with or without weak phosphoric acid, and sulfuric acid. Sulfuric acid contains sulfate. 11. Prayphos P5 phosphoric acid contains phosphoric acid, aqueous phosphate,

phosphate anions, phosphate compounds and impurities as a result of the incomplete chemical reactions, purification steps, and mechanical separation. The product is concentrated liquid containing about 75 percent H3PO4 based on phosphate content and density, that is readily miscible in water and other polar solvents, and thus will contain aqueous phosphate when in the 3

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presence of water. Impurities in this product include sulfate, and may include calcium sulfate, iron sulfate, sulfate ions, calcium ions, calcium salts of sulfate, phosphate and fluoride, gypsum, fluoride ions, and sulfuric acid. 12. The method of treatment at the Colonie site comprised the following relevant

steps. Excavated soil at Colonie was staged in soil piles of approximately 250 yd3. These piles were screened by field instruments measuring radioactivity (in counts-per-minute). A representative sample was extracted from each soil pile for off-site TCLP testing for lead. Soil piles deemed to be "characteristic" (e.g., TCLP lead > 5.0mg/l) were subjected to the on-site soil lead stabilization process. Prayphos P5 phosphoric acid, diluted with water to three parts water to one part phosphoric acid, was mixed with an amount of the lead-contaminated soil in a device called a pugmill. The contaminated soil and diluted Prayphos P5 phosphoric acid were then allowed to cure, and shortly thereafter a sample for post-treatment TCLP for lead was taken. 13. In some instances, the treatment method used at the Colonie site was successful in

reducing the amount of leachable lead to below the EPA's standard of 5.0 mg/l using the TCLP test criteria. In other instances, the treatment method failed to reduce the level of toxicity in the soil to below the required regulatory level. On such occasions, the soil was returned to the pugmill and treated with additional Prayphos P5 phosphoric acid, and allowed to cure, until the amount of leachable lead was reduced to below the EPA standard.

Respectfully submitted,

Dated: __June 22, 2007_____

_s/Brian E. Ferguson____________________ Brian E. Ferguson McDERMOTT WILL & EMERY LLP 600 13th Street, N.W. Washington, D.C. 20005 (202) 756-8000 [email protected]

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WEBSTER SZANYI LLP Kevin A. Szanyi Nelson Perel Todd M. Schiffmacher 1400 Liberty Building Buffalo, New York 14202 (716) 842-2800 [email protected] Attorneys for Plaintiff, Sevenson Environmental Services, Inc. Dated: __June 22, 2007_____ PETER D. KEISLER Assistant Attorney General JOHN J. FARGO Director ___s/ Joshua B. Brady_____________________ JOSHUA B. BRADY Attorney Civil Division U.S. Department of Justice Washington, D. C. 20530 Telephone: (202) 307-0285 Facsimile: (202) 307-0345 Attorneys for Defendant the United States Dated: __June 22, 2007_____ __s/ Russel O. Primeaux_by s/ Joshua B. Brady___ Russel O. Primeaux Kean Miller Hawthorne D'Armond McCowan & Jarman LLP One American Place, 22nd Floor Post Office Box 3513 Baton Rouge, LA 70821-3513 (225) 387-0999 [email protected] Attorney for Shaw Environmental, Inc.

OF COUNSEL: Susan Mitchell Attorney U.S. Department of Justice

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