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Executives ruled not liable for Holley chemical leak; Diaz chairman, VP won't face damages in suit on '02 release

The father and son who ran the Diaz Chemical plant in Orleans County when it leaked dangerous chemicals nearly 10 years ago are not liable to pay punitive damages, a federal judge ruled this week.

The decision by U.S. District Judge William M. Skretny is a blow to the more than 100 families who claim Diaz's chemical emissions endangered their health and contaminated their property in Holley.

The ruling severely limits the liability of Diaz's former executives and the ability of families to collect $60 million in damages they sought from the defendants.

"It was a tragic accident, but he didn't cause the accident," said Thomas F. Walsh, the Rochester lawyer representing Theodore Jenney, Diaz's chairman at the time of the Jan. 5, 2002 leak.

Skretny's ruling also limits the liability of Jenney's son, Clifton, who was vice president of Diaz.

The ruling is significant because the Diaz corporation is bankrupt and without any assets.

The families who sued Diaz plan to appeal Skretny's decision, but if it is upheld, their compensation would be limited to specific costs related to federal environmental law.

"While we're disappointed, we intend to move forward with our claims against the individuals under the federal Superfund law," said Alan J. Knauf, the Rochester lawyer representing the families.

The lawsuit, filed in 2004, claimed that Diaz and the Jenneys were responsible for decades of chemical emissions leading up to the 2002 leak.

On that day, a valve release on a process tank blew, spewing two little-known chemicals into the air and splattering homes around the plant.

Nearby residents complained of severe headaches, skin burns, nausea, vomiting and difficulty breathing, as well as other health problems. The leak also led to the relocation of several residents.

In ruling that the Jenneys are not liable for any tort-related claims, Skretny adopted the recommendations of U.S. Magistrate Judge H. Kenneth Schroeder.

"It's the right decision because my client was semiretired," Walsh said. "He was phasing out of the company. No one even told him about the accident for two days."

Diaz filed for bankruptcy in 2003 and abandoned the site, leaving behind a large number of drums and tanks containing chemicals.

The plant became a federal Superfund cleanup site in 2004 and, since then, the U.S. Environmental Protection Agency has shipped more than 9,000 drums and more than 112,000 gallons of hazardous wastes to other sites for reuse or disposal.