Claiming an "Act of God" and that Stanford University knew for decades about a chemical spill on its property in Palo Alto but did nothing about it, lawyers for Silicon Valley firms Agilent Technologies and HP companies filed a 20-page response to Stanford's Feb. 23 lawsuit and a counterclaim against the university in U.S. District Court in San Jose on April 30.
The potentially epic battle between the companies and the university for millions of dollars revolves around an estimated 53-year-old discharge of hazardous substances called polychlorinated biphenyls (PCBs) and trichloroethylene (TCE) at 1601 S. California Ave. in the Stanford Research Park.
Stanford blames Hewlett-Packard Company, Agilent Technologies, HP Inc. and Hewlett Packard Enterprise Company for the contamination and for further spreading PCBs over substantial portions of the property during a grading project, according to the university's lawsuit, which was filed by the board of trustees. The university has spent millions of dollars in cleanup and mitigation at the site since discovering the contamination in 2015. Stanford was preparing the property for construction of its University Terrace faculty housing development.
But the companies are countering that Stanford should reimburse them for all of the costs they incurred between 1970 and 2005 when Hewlett-Packard Company and its affiliates held the lease. They previously removed TCE and PCBs they found, which were allegedly discharged by another company, Granger Associates, that occupied the site before HP and Agilent.
Granger is no longer active, according to California Secretary of State records. It was a pioneering tech company specializing in aviation-technology products, according to the IEEE History Center's Engineering and Technology History Wiki. The company signed a 51-year lease with Stanford starting in 1962, but it assigned the lease to another company, Haynes, in 1963, according to court documents filed by Agilent and the HP companies.
Haynes' successor sublet the property back to Granger that same year, and Granger stayed there until 1970. That same year, Hewlett-Packard Company sublet, then took over the lease, occupying the site until 1999.
In 1987, Hewlett-Packard Company removed PCBs found there with the university's knowledge and consent, although the company did not cause the contamination, it claims. In 1990, Hewlett-Packard discovered an underground plating sump created and used by Granger. Again, with Stanford's knowledge and consent, Hewlett-Packard sealed and closed the sump, it claims. The California Regional Water Quality Control Board then issued a "no further action" letter to the company in 1998 regarding the sump, according to the companies. They also claim the levels of the TCE and PCBs were below regulatory levels -- called threshold levels -- during the time they leased the property.
Hewlett-Packard assigned its lease to Agilent, then an affiliate, which stayed there until 2005 before Stanford took back the lease, according to court documents.
The companies said Stanford had knowledge the contamination had occurred as a result of Granger's operations. The university was negligent in its oversight of its lessee, they said in their response to Stanford's complaint.
The university also failed to remediate or cause remediation of the property during and after Granger's operations, they wrote. The complaint should be barred, in whole or in part, because Stanford had knowledge of, and assumed the hazards and risks that caused the damages the university is claiming, the companies maintain.
After Stanford took back the lease from Agilent in 2005, it continued to lease the property to Facebook and later to Theranos Inc. It didn't contend that any action or further remediation was required, according to the companies.
But in an email on Wednesday, Stanford spokeswoman Jean McCown refuted the companies' claims that they don't have continuing liability.
"In the 1980's HP told Stanford that the contamination was fully cleaned up. However, in 2015 when re-development of the site began after the Agilent lease had ended, Stanford learned the contamination was more widespread than had been disclosed and therefore Stanford had to pay additional money to finish the cleanup work," she said.
Stanford also claims the ongoing presence of the contamination constitutes continuing trespass and a persistent nuisance, which the companies refute.
Agilent and the HP companies also claim they are not liable because the alleged hazardous substances release, threat of a release and alleged damage were caused "solely by an Act of God," they wrote their response.
An act of God is defined as "an unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight" under Title 42 section 9607(b)(1) of the United States Code, which the companies cited in their response. The brief does not specify what act of God might have been responsible.
The companies also claim that Stanford accepted the property in "as is" condition "with all faults" when Agilent and the university signed a May 2004 option and purchase agreement. In a 2005 general assignment agreement, Stanford agreed to indemnify, defend and hold Agilent harmless "arising out of or relating to events occurring on or after the date of the agreement," according to the companies' counterclaim.
The counterclaim asks for all costs the companies incurred between 1970-2005 for the investigation, identification, removal, remediation and abatement associated with the TCE, PCBs and other contaminants on the property. It does not specify a dollar amount. It also asks the court to rule on both sides' rights and duties and to decide on each sides' liability for past, present and future contamination removal and remediation costs at the site.
The companies are also asking the court to compel Stanford to indemnify them against any costs and judgments that arise from the contamination.
Additional court papers seek to have claims dismissed against Hewlett Packard Enterprise because Stanford's lawsuit does not show how the company assumed any liability for the contamination, the companies claim. Hewlett Packard Enterprise was formed in 2015.
Stanford claims Agilent, HP Inc. and Hewlett Packard Enterprise Company are named as defendants because they are corporate successors of Hewlett-Packard Company and assume all assets and liabilities, including for contamination.