The valley's toxic history / IBM trial is latest round in long-running dispute over the tech industry's environmental record

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In 1981, south San Jose residents were stunned to learn they had been drinking contaminated water laced with chemicals such as trichloroethane and Freon, toxics that they later suspected were the cause of birth defects in many of their children.

They were even more surprised to learn who the culprits were: Fairchild Semiconductor and IBM Corp., two giants of the then fast-growing technology industry, which prided itself on cleanliness and friendliness to the environment.

The companies' underground storage tanks were found to have leaked tens of thousands of gallons of toxic solvents into the ground. Residents, advocates and even state officials strongly suspected that the contamination caused a high rate of birth defects in the area, although no conclusive link was ever found.

The Fairchild-IBM case led to the discovery of numerous other toxic sites in the region -- Santa Clara County has the most Superfund sites in the nation -- and it prompted stricter environmental laws and a cleanup that has cost tech firms roughly $200 million during the past 20 years. It also ignited what has turned into a continuing battle between tech companies and activists who argue that the so-called clean industry has left behind a dirty legacy.

The latest round of that fight is playing out in a Santa Clara courtroom where two former IBM workers, Alida Hernandez and Jim Moore, accuse the company of exposing them to known or suspected cancer-causing chemicals such as benzene, trichloroethylene and Freon at a San Jose disk drive factory -- the same facility that leaked chemicals into the area's water supply.

Representing the plaintiffs are two attorneys, Amanda Hawes and Richard Alexander, who also were involved in the Fairchild-IBM debacle in the 1980s on behalf of area residents.

"The Fairchild case was the origin of all this," said Ted Smith, executive director of the Silicon Valley Toxics Coalition, an activist group that was formed in response to the south San Jose contamination. "We've been living and breathing this history all this time."

But Robert Weber, the attorney representing IBM in the trial, blasted the case as being waged by a "stale stable of activist warhorses" from the Silicon Valley Toxics Coalition.

Referring to Hawes and Smith, who are married, he added: "It's Ms. Hawes and her husband's crew and fellow travelers. They've been at this for years."

The leak from Fairchild's manufacturing facility on Bernal Road was publicized first and was known to be more serious. As a result, the controversy came to be known as the "Fairchild case." The company was then known as Fairchild Camera and Instrument Corp.

The company's 22-acre site leaked trichloroethylene and other solvents into soil and a major aquifer, according to the Environmental Protection Agency.

Shortly after Fairchild acknowledged its problem, the nearby IBM factory was also found to have a leaking tank. Big Blue's underground tanks on its 400- acre site in south San Jose leaked trichloroethane, trichloroethylene, Freon and other industrial solvents, according to the EPA.

The two leaks affected the drinking water of about 65,000 south San Jose residents.

Residents and environmental advocates then began to investigate a link between the contaminated water and an apparent rise in birth defects in their community, including kidney disease and heart problems.

Before the leaks were discovered, Susan Puppo, who lived near the Fairchild plant, gave birth to a son who had a heart murmur. By the time the child was 1 1/2 years old, he had had four open-heart surgeries.

The Puppos believe the contaminated water caused their son's health problems, although no conclusive proof has ever been presented.

"It was just disgusting that such large companies, both Fairchild and IBM, could be so negligent and have something like (the leaks) happen," said Puppo, who has been clipping news stories of the trial and sending them to her dad, who had worked for IBM in San Jose and knew Moore, the current plaintiff against IBM. "It was shocking and pretty sad."

Both Fairchild and IBM acknowledged the water contamination but maintained that they worked closely with state and federal authorities to fix the problem.

Susan Puppo and her husband, Rick, joined the community movement that pressed the companies to do something about the problem.

"It was such a mess," Rick Puppo said. "All we wanted was for them to close and get out of there."

The problem of toxic contamination turned out to be more widespread in Silicon Valley. Many tech companies had stored highly toxic solvents, such as trichloroethylene, used to make semiconductors, in underground tanks.

"What we realized after a while was that a lot of high-tech companies were pouring their solvents into underground storage tanks -- and they were leaking," said Keith Takata, director of the EPA's Superfund division for the Pacific Southwest region.

Of all U.S. counties, Santa Clara has the most sites, 23, on the National Priorities List, commonly known as the Superfund list. Of those, 19 were contaminated by tech companies.

Wil Bruhns, a senior engineer with the San Francisco Bay Regional Water Quality Board, said the Fairchild-IBM case led other big technology firms, such as Intel and Hewlett-Packard, to check their underground storage tanks.

Within a few months, he said, "we were batting 1,000. Anyone who looked for leaks found them. That ballooned the number of cases of leaks manyfold."

The south San Jose case led to stricter local and state rules for underground storage tanks, which later became part of federal regulations. Companies that store toxic chemicals, including tech firms and gas stations, were required to use double-walled steel tanks with sensors installed between the walls to detect leaks, Bruhns said.

Some manufacturers also switched to less-toxic materials such as isopropyl alcohol or high-pressure water to clean components, he added.

The EPA's Takata said the Fairchild-IBM case "really caused companies to take a look at their practices."

Smith of the Silicon Valley Toxics Coalition speculated on the reason: money.

"The lesson they learned is it's cheaper to prevent additional groundwater contamination than it is to pay to clean it up," he said. "It was a very strong economic message."

Takata estimated that Silicon Valley companies have spent about $200 million cleaning up contaminated sites.

In the Fairchild-IBM case, both companies had to remove the leaking tanks and thousands of cubic yards of soil and then install wells to pump and treat contaminated groundwater.

A civil suit filed against Fairchild, IBM and the water company was later settled. The settlement was sealed, but it reportedly entailed payments in the tens of millions of dollars.

In 1985, the state Health Department said it found a higher-than-normal rate of miscarriages and birth defects -- including holes in the heart, Down syndrome, deformed genitalia and webbed toes -- in a south San Jose neighborhood affected by the leaks. But the agency said it did not find a direct link to the leaks.

Chuck Fraust, director for environment, health and safety at the Semiconductor Industry Association, which represents major tech firms, including IBM and Intel, defended the industry's response to the south San Jose contamination cases.

"Like any conscientious industry, we were concerned and we took action," he said.

But Alexander, the lawyer for the plaintiffs, countered: "They certainly weren't proactive when tens of thousands of gallons of solvents were draining into the aquifer."

The Fairchild site, which is still listed as a Superfund site, was eventually shut down. The company was later bought by National Semiconductor, but it re-emerged as a separate firm in 1997.

The EPA had proposed to include the IBM site on the Superfund list but decided not to do so because it was already under another federal government cleanup program, said Michael Hingerty, an agency attorney.

IBM continued to operate the factory even as it was cleaning it up before selling the facility in 2002 to a new venture controlled by Hitachi.

Cleaning up a Superfund site can take more than 10 years. Hingerty said all 19 tech-related sites in Santa Clara are in the process of being remedied.

Bruhns of the Bay Area water quality board said the tech industry has generally been cooperative in dealing with the problem in Silicon Valley, and he gave particularly high marks to IBM.

"The way I picture companies is which ones brought their lawyers and which ones brought their engineers," he said, adding that IBM brought engineers. "I would say IBM is probably one of the most cooperative companies down there."

Bruhns also described the Silicon Valley Toxics Coalition as reasonable and a legitimate player. "I think they are technically sophisticated enough to get involved in these discussions."

Today, activists are focused on what they believe is another ugly legacy of the tech industry: the damage to workers' health caused by toxic chemicals used in manufacturing.

The issue is highly controversial. Despite many claims by former tech workers that they developed cancer because they were exposed to toxic chemicals in the workplace, no definitive study has been done on the effects of solvents on employees.

Tech companies, such as IBM, have used that argument to reject allegations that their manufacturing operations made many of their workers sick.

Fraust of the Semiconductor Industry Association stressed that the industry has been quick to respond to possible harm from the chemicals it uses. He cited the example of glycol ethers, chemicals used as cleaning solvents that were later phased out by the industry after studies showed that they could cause higher rates of miscarriages.

The association has also been working with Johns Hopkins University to determine if there are enough data to do a comprehensive study on the effects of chemicals on technology workers.

The trial involving Hernandez, who was diagnosed with breast cancer, and Moore, who suffers from non-Hodgkin's lymphoma, will let a jury weigh in on the controversy.

"It is the first time that a jury is going to give a legal answer to the question that people have been raising for 20 years," said Smith, of the toxics coalition.

Time line of events leading up to the IBM trial

1 1956: IBM opens facility on Cottle Road in San Jose.

1957: Fairchild Semiconductor (also known as Fairchild Camera & Instrument Corp.) is founded in Santa Clara County.

2 1981: Water supply wells in south San Jose found to be contaminated due to leaks from Fairchild and IBM underground storage tanks used for toxic solvents. More contaminated sites (such as the one shown) owned by tech firms are later found and included on the Superfund list.

3 1982: Silicon Valley Toxics Coalition, an environmental activist organization led by founder Ted Smith, is formed amid controversy over the south San Jose contamination.

1983: Local governments in Silicon Valley begin passing ordinances for safer underground storage tanks, which later become models for California and federal regulations.

4 1985: California Department of Health Services finds higher-than-normal rate of miscarriages and birth defects in a south San Jose neighborhood affected by the leaks, confirming the suspicions of residents such as Rick and Susan Puppo, whose son was born with a heart defect. But the agency says it did not come up with a conclusive link between the leaks and the health problems.

1986: IBM and Fairchild settle suit filed by south San Jose residents. The terms are sealed.

1998: Former IBM workers at the company's San Jose plant begin filing lawsuits alleging that they became ill because of working conditions.

1999: Semiconductor Industry Association, which represents major tech firms, announces the creation of an expert panel to study cancer risks in tech manufacturing.

2001: SIA panel says it found insufficient evidence to prove or disprove that there is a higher risk of cancer at semiconductor manufacturing plants. The body recommends a comprehensive epidemiological study.

2002: SIA forms new committee to determine if there is enough information available to do a comprehensive study. Results of the survey will be released this year.

5 2003: Lawsuit against IBM by former workers Alida Hernandez and Jim Moore goes to trial before Santa Clara County Judge Robert Baines. (Photo shows IBM attorney Robert Weber.)

Sources: IBM, Silicon Valley Toxics Coalition, Chronicle Research

SUPERFUND SITES IN SILICON VALLEY

Santa Clara has 23 Superfund sites, the most of any county in the nation. Nineteen of the sites were contaminated by tech firms, most of which had used highly toxic chemicals in manufacturing, including trichloroethylene, Freon, trichloroethane and polychlorinated biphenyls (PCBs). A description and map of Superfund sites, also known as the National Priorities List, can be found at the Environmental Protection Agency Web site at www.epa.gov/superfund/sites/npl.

Palo Alto

Hewlett-Packard

Sunnyvale

Advanced Micro Devices (two sites)

Monolithic Memories Inc.

TRW Microwave Inc.

Westinghouse Electric Corp.

Santa Clara

Applied Materials

Intel Corp.

Intel Magnetics

National Semiconductor

Synertek Inc.

Mountain View

CTS Printex Inc.

Fairchild Semiconductor

Jasco Chemical Co.

Raytheon Corp.

Spectra-Physics Inc.

Teledyne Semiconductor

Intel Corp.

Cupertino

Intersil Inc. and Siemens Components

San Jose

Lorentz Barrel & Drum Co.

Fairchild Semiconductor

North of San Jose

Moffett Field

Alviso

South Bay asbestos area (former dumping area)

Source: ESRI, GDT, EPA