Toxic Living: California Neighbors Sue After Finding Homes Were Built on Oil-Saturated Soil

Carson ToxinsSarah Netter/ABC News
Adolfo and Alexa

The tidy rows of hacienda-style homes in a pretty, well-manicured southern California neighborhood give little indication of the festering chemicals under the soil.

Built on top of a long-forgotten crude oil storage site, the 285 homes in Carson's Carousel neighborhood are now ground zero for an environmental and medical crisis that has pitted current and former homeowners, some of them cancer-stricken, in a massive lawsuit against Shell.

"I'm very angry. I'm angry that this could happen to our family or anyone else's family," longtime Carousel homeowner Royalene Fernandez said. "It has definitely ruined our lives and I don't want it to ruin my kids' lives or my grandchildren's."

SLIDESHOW: Toxic Oil Under California Neighborhood Blamed for Illness

Fernandez, 64, is terminally ill after having battled both leukemia and melanoma over the last 18 years. She said doctors in January gave her just six months to live, but she is pushing hard for a few final milestones -- her 46th wedding anniversary in August chief among them.

Click HERE to see images from the Carousel neighborhood in Carson, Calif.

Benzene exposure has been linked to an increased risk for the type of leukemia Fernandez was diagnosed with-- chronic lymphocytic leukemia. In the Carousel neighborhood, repeated testing has found benzene levels just a few feet under the soil at more than 1,000 times the acceptable limit, according to environmental experts hired by the plaintiffs and the county water board.

"It was never disclosed that it was ever over any type of oil ground or that anything had been there," said Fernandez, who bought her home on Panama Avenue in 1968 and lived there until 1999. "So of course you would not have bought if it had been disclosed."

In addition to the extraordinarily high benzene levels, the soil has also tested positive for dangerously high levels of methane, leading some environmental experts to fear a massive fireball at Carousel should the gasses ever make it to the surface.

The mayor of Carson said the contamination may be so bad that the entire neighborhood may have to be razed.

Houses were first developed on the site in the late 1960s after Shell sold the site it had operated since 1923. It wasn't until 2008 that random testing discovered disturbing, and some would say alarming, levels of contamination in the ground beneath the homes.

Though Shell has not owned the land in decades, residents, their lawyers and city officials believe it is still the company's responsibility to clean up what was left behind.

"The thing that was really compelling here was that Shell absolutely, positively without a doubt, knew they had this mess of tens of thousands of gallons, or millions of gallons, of very toxic material right under these houses," attorney Tom Girardi said.

Contaminated California Neighborhood Wants Shell to Finance Cleanup

Girardi's law firm, Los Angeles-based Girardi Keese Lawyers, represents the majority of the affected residents -- more than 1,500 adults and children so far. Girardi may be best known for his work with Erin Brockovich on the chromium contamination case against Pacific Gas & Electric which was made into a movie, but he told ABC News that the Carson contamination is the worst his firm has ever handled.

"Everybody in life can make mistakes. The trick of what kind of a person you are is what you do after the mistake is made known to you," Girardi said.

"Do you just sit there and just let other people get exposed to this chemical? Do you let more people come down with leukemia?" he asked. "Or do you say 'My goodness, look what we did. We're supposed to be a good corporation.'"

Shell, which still operates a refinery in Carson, declined several formal interview requests, but released a e-mail statement questioning not only the company's role in the contamination, but whether or not the oil left behind is posing a serious health risk.

"While Shell did not develop the property for residential use, Shell, as a good corporate citizen, has stepped up to the plate and commenced a state-of-the-art environmental investigation," the statement read.

"The environmental agencies have stated that the data so far do not indicate any imminent health or safety risk to the public," the Shell statement read.

Medical experts hired by Girardi Keese have just begun the arduous process of trying to determine whether there is a link between the toxic soil and some residents' yearslong struggles with cancer, migraines, anemia, vertigo and birth defects.

Residents who once enjoyed community barbecues, parades, egg-throwing contests and holiday decorations now largely stay inside, afraid of their own lawns. They say their homes, many once valued around a half-million dollars, are now worthless.

The lawsuit, filed in October against Shell, the developer and its subsequent owners, claims among other things that the companies were negligent in their treatment of the site and that they fraudulently concealed chemical hazards on the property.

Girardi was careful not to attach a dollar amount to the suit, but environmental experts say the contamination could wind up costing the defendants hundreds of millions of dollars in cleanup alone if they are found liable.

"It's not about the money," said resident and plaintiff Lourdes Piazza, whose Ravenna Avenue home tested positive for one of the highest concentrations of benzene in the neighborhood. "If I end up with cancer, if one of my family members ends up with cancer -- money can't buy your health."

Shell Oil Questions Role in Contamination Under California Neighborhood

For 40 years, homeowners and town officials had no idea that the Carousel houses, most accented with palm trees and exotic desert plants, were built on an oil site that Girardi says had never been adequately cleaned out before development started atop a few feet of fresh top soil.

The happenstance discovery in 2008 of highly concentrated benzene and methane during routine testing on an adjacent manufacturing site -- a plant whose operations does not involve either chemical -- led state experts right to Carousel.

Digging just a few feet into a front yard yields mounds of oily soil and chunks of concrete from the collapsed tank walls, accompanied by a noxious odor of rotting oil. Less than 10 feet under Piazza's front yard, the oil simply floats on top of groundwater.

Shell opened the site in 1923 to supply crude oil to a nearby refinery. The storage site was shut down, dismantled and sold in 1966, when the city was part of unincorporated Los Angeles County.

In the late 1960s, the county approved developers' plans to build a residential neighborhood on the property. Ironically, county officials initially turned down the proposal, not because of possible chemical concerns, but because they thought an industrial use would garner more tax revenue.

The city of Carson wouldn't be established until 1968, after the first of the Carousel houses had gone up.

A handful of other defendants are named in the class-action lawsuit, including now-defunct developer Barclay Hollander Corp., which was acquired by Oceanic Properties in 1969 and is now part of a stable of holdings affiliated with Dole Foods. Girardi, however, has made it clear he wants Shell to pay.

"You would think this company who absolutely, positively knew what it was doing would say, 'Okay hey we're caught. How do we help these people, how do we get them all out of there immediately?" Girardi said. "That's what you would think."

Shell, in its statement, said it was the developer's sole responsibility to ensure the site was properly cleaned before being developed.

"The developer had a soil engineer investigate the site and was aware of the soil conditions on the site... The developer, not Shell, removed residual oil and water from the reservoirs, demolished the reservoirs, graded the property, got approvals from both the County of LA and City of Carson for the grading and development, and then sold the homes in several stages," the statement read.

Shell Questions Source of Contamination

Shell also questioned whether the storage site was the only source of the contamination. "Shell's soil sampling program in the Carousel community continues to find compounds in addition to crude oil... As a result, there appear to be additional sources of contamination contributing to the environmental issues at the site," the company said.

Marty Ordman, vice president of marketing and communications for Dole, said the company would have no comment on the lawsuit or Shell's assertion of responsibility, citing pending litigation.

In legal responses filed after Girardi Keese's initial complaint, attorneys for both Shell and the developers have asked the court to dismiss the lawsuit, arguing that the statute of limitations on many of the claims ran out decades ago and that others, including the fraud allegations, also failed to meet legal requirements.

But officials from the mayor and city manager of Carson to the head of the Los Angeles County Regional Water Board believe that the mess in Carousel is Shell's responsibility and they should remediate the property.

Mary Ann Lutz, chair of the Los Angeles Regional Water Quality Control Board, said the ground is poisonous.

"It's extremely serious. We have contaminations two feet under ground," she said. "These people are planting vegetables and eating the vegetables that they're planting in their little gardens. Their kids are crawling on the grass where two feet down we have contaminants."

Drinking water, she said, has so far tested to be safe.

Carousel may not be the only neighborhood affected. Testing has been ordered on an adjacent gated community, a middle school, and the homes just outside Carousel's borders.

Jim Tarr, founder of Stone Lions Environmental Corporation, the environmental testing agency hired by Girardi Keese, scoffed at the notion that Shell is acting responsibly for what he says is clear evidence of potentially lethal contamination.

"There's a very obvious fire and explosion hazard in this neighborhood that needs to be dealt with immediately," Tarr said as he drove through the Carousel streets, pointing out street signs warning construction crews who might dig in the area of smoking dangers from possible methane pockets. "I believe that the Shell oil company would pay for something like that given that they're the ones that left the problem behind when they shut down these three crude oil storage tanks underneath the subdivision."

"I think that this neighborhood should be abandoned at least until the fire and explosion hazard gets straightened out and after that until the benzene problems get resolved," he said. "And there may well be other problems that we don't know about yet that also have to be resolved first."

Carousel Residents Stuck With Contaminated Homes, Can't Afford to Move

Most of the residents still living in the Carousel neighborhood can't afford to relocate while still owing hundreds of thousands on their houses.

Adolfo Valdes said the decision to buy his fixer-upper on Carousel's Ravenna Avenue in 2003 was one of the worst of his life, though he had no way of knowing it at the time.

Snagging the house for a good deal at about $350,000, Valdes, a 34-year-old longshoreman, sunk tens of thousands of dollars in improvements into the house that he shares with his wife and four daughters. Saving money by doing the labor himself, Valdes put in a new pool patio, hardwood floors and bathroom tile. The kitchen was completely redone with granite countertops and stainless steel appliances.

Then one day last year, "There was a bunch of white trucks and people in vests drilling holes on our streets," he said. "Then we got letters from Shell."

The letters, which went out to many Carousel residents this spring, warned homeowners about abnormally high levels of chemicals and that they should avoid direct contact with the dirt to be safe.

Valdes' heart sunk. He said his daughters, the youngest just 3 and 6, suffer from frequent headaches. He no longer allows them to play outside. His older daughters would have to be driven to a park in the next town to practice their soccer kicks.

And worse, Valdes said he learned that the near daily headaches that plagued him daily and the head-splitting migraines that have sent his wife to the emergency room, were very likely caused by the home he took so much pride in restoring.

In March, a trench was dug in Valdes' front yard.

"When they actually tested here and we saw the dark oil it's like, 'Okay, we need to get out of here,'" he said. "It's pretty bad, pretty heartbreaking. All the emotions that go through -- it's pretty bad."

"They recommended don't grow anything you can eat, don't do any gardening, don't let your kids play in the yard," he said of a letter he got from Shell this spring. "It's like okay, Easter egg hunt inside of the house."

Valdes wants to move his family to a safe home. But with a family of six, a tough year financially after a work-related injury and a mortgage owed on a home that the lawyers say is essentially worthless, Valdes doesn't have the money to leave.

"Usually if you strike oil it's a good thing, but not in this case. No one wants to live here. We can't sell our house," he said. "If it was up to me, if I had money that I can go buy another house, than I would do that."

Valdes said he also wants Shell to pay for health insurance for the rest of his daughters' lives. Alexa, 3, he said, often indicates a headache by pointing to her head and tells her father she "has a heart-beep" in her head.

Lourdes and Dominic Piazza are also looking for a way out of Carousel. For years, Lourdes Piazza has been plagued by crippling migraines, she said, and anemia so severe that the high doses of iron treatments ravaged her stomach and intestines.

"I'm just really scared that me or one of my family members ends up with cancer someday," Piazza said. "I feel that Shell has ruined our lives. They've ruined my life here, they've ruined my neighbors lives. We've had our dreams... They've destroyed them."

Soil experts found some of the highest concentrations of benzene under the Piazza's front yard. Their view out their living room window last week was that of a backhoe, caution tape and workers who were careful to put on gloves anytime they were forced to come in direct contact with the dirt.

A jelly jar containing a mini oil slick was collected there as evidence.

Carousel Resident: 'I Want Out Now'

For Royalene and Bernard Fernandez, they want to make sure the next generation of their family fares better than Royalene. Their youngest son Christopher had such strong ties to the neighborhood where he was raised, he bought a house there himself in the 1990s, where he still lives with his wife.

"We bought in good faith the house, thought we were doing the best for our family. And then to find out that many years later, 30 some years later, that we shouldn't have bought there," Fernandez said. "Life would have been a lot different."

Residents are now waiting for further test results, including air samples to determine how much benzene and methane they are breathing.

City officials said that each house will be evaluated on a case-by-case basis, though it's entirely possible the entire neighborhood may have to be razed.

"It's really like psychological torture for the residents there to not know. The uncertainty is so disconcerting," Carson Mayor Jim Dear said. "This contamination needs to be determined to what degree it is and then I think remediation or removal of the homes has to be done as soon as possible."

For it's part, Shell said remedial options would depend on further testing.

"Appropriate options must be driven by science, regulatory standards and protection of public health and environment," the company said in its statement.

But as soon as possible is not soon enough for Lourdes Piazza.

"I'm desperate and I want out. And I want out now," she said, bursting into tears. "Not a year or two for now. I want out now."